1933-04-13

[Stage Direction]
Bill No. 76, respecting the Quebec, Montreal and Southern Railway Company.-Mr. Simpson (Algoma).

Hon. W. A. GORDON (Minister of Labour) :: I desire to lay on the table of the
fMr. Ralston.]
house a number of orders in council passed pursuant to the relief legislation.



QUESTION PASSED AS ORDER FOR RETURN


Mr. REID:: 1.	What lawyers, of Vancouver or New Westminster, were engaged by the government during the fiscal year ending 1932-33?
2.	For what specific purpose was each engaged ?
3.	What respective amounts were paid by way of fees, emoluments or expenses to each of these lawyers so engaged?
4.	Are any amounts still outstanding; if so, *what amounts are yet to be paid?


Right Hon. R. B. BENNETT (Prime Minister):: I think this will have to stand as an order for return, because it affects every department of the government. It will have to be circulated by the Secretary of State to-all departments.



INQUIRY FOR RETURN

[Stage Direction]
On the orders of the day:
Mr. JEAN-FRANCOIS POULIOT (Temis-couata): Yesterday, Mr. Speaker, as reported' at page 3859 of Hansard, I asked the Postmaster General (Mr. Sauve) with regard to a return ordered by the house on February 8, with respect to the post office at Missanabie, Ontario. The minister replied: "I have nothing: to say to-day." I protested, and the Prime-Minister (Mr. Bennett) said, referring to the Postmaster General:
He might have said, "I shall take this as a notice and deal with the matter to-morrow"-
I should like to ask the right hon. gentleman whether the to-morrow to which he referred then is to-day.
Mr. SPEAKER:: What point is the hon. gentleman trying to make?


Mr. POULIOT:: I am asking if the return will be completed to-day, because that is what I understood from the remarks of the Prime Minister yesterday,


Richard Bedford Bennett: The Postmaster General is not here.



DREDGING-DETROIT RIVER

[Stage Direction]
On the orders of the day:
Richard Bedford Bennett: Yesterday the hon. member for South Essex (Mr. Gott) asked a question with-respect to the operations being carried on in the Detroit river for the purpose of deepening the channel. I have again looked into the matter; I find that a contractor is in charge of the operations and that following the state-

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ment made in this chamber a few days ago by the hon. gentleman we communicated with the United States legation. I am informed that an engineer of the United States government will visit, or is on his way, or is visiting the scene of the operation, and a report will be made without delay.

The house in committee of supply, Mr. Lafleohe in, the chair.



TRADE AND COMMERCE

[Stage Direction]
The Canada Grain Act, including management, operation, maintenance and equipment of elevators, administration of, $2,295,172.20.
Mr. MOTHERWELL:: This is a slack day, with small 'attendance, to take up this item; the minister has left it until quite late.


Hon. H. H. STEVENS (Minister of Trade and Commerce):: Oh, no; I haven't had an opportunity to take it up before.


William Richard Motherwell: I have just been
reading in the Winnipeg Free Press that further amendments to the Grain Act are expected. Should we not put those amendments through before dealing with this matteT?


Henry Herbert Stevens: The suggested amendments to the Grain Act are very formal and deal with something entirely related to eastern Canada. They will be ready in a day or two but they will not affect matters appertaining to these estimates. One of the members of the Board of Grain Commissioners is here and I am anxious to get the item through while the commissioners are in the east.


William Richard Motherwell: I have no criticism to offer of the endeavour to get a difficult item through on a quiet afternoon-half the members are away. I expect, however, that the next call will be from the Minister of Agriculture to get live stock items through. If that is the plan, I do not blame hon. gentlemen much.


Henry Herbert Stevens: That is not the plan.


Some hon. MEMBERS:: Carried.


Mr. BROWN:: No, it isn't carried yet.


Mr. McKENZIE (Assiniboia):: Last night
the Prime Minister indicated that to-day the house would proceed with public works, trade and commerce, marine and fisheries and agriculture. We thought that public works would come first.


Henry Herbert Stevens: I have already said that
I aim trying to take advantage of the presence
in Ottawa of a member of the Board of Grain Commissioners, but I wish hon. members to understand that they are at perfect liberty to discuss the matter as fully as they desire. There is no suggestion whatever of putting anything over the committee, none whatever.


Mr. YOUNG:: We appreciate the minister's position, but is he prepared to make a statement now as to the government's dealings in the grain market?


Henry Herbert Stevens: I thought that was pretty well indicated in the budget debate.


Edward James Young: Has the minister nothing
further to say?


Henry Herbert Stevens: I do not think there is
anything further to say.


William Richard Motherwell: May I hear what
the minister is saying?


Henry Herbert Stevens: I say, there is nothing to add to what was said during the budget debate.


William Richard Motherwell: I should have
thought there would be a good deal to say in answer to the 'hon. member for Willow Bunch, but if his statements are correct we have not much more to ask. He miade many statements that would require a reply from some member of the ministry if he is not correct. If, however, his statements are correct, then I suppose we have all the information it is possible to get.


Albert Joseph Brown: Yesterday I had a question on the order paper to which the minister gave an answer. There was also a motion passed touching the same subject, with reference to correspondence between the government and the Civil Service Commission. These papers have not yet been brought down and until we get full information I do not see how this matter will be satisfactorily disposed of. Of course, the minister may be able to give us now the information we desire. The question I put on the order paper, with the answer, is as follows:
Board of Grain Commissioners-Solicitor
Mr. Brown:
1.	Has a solicitor been appointed for the Board of Grain Commissioners?
2.	If so, who is the appointee?
3.	On whose recommendation was he appointed?
4.	What salary does he receive?
Mr. Stevens:
1.	Yes, temporarily.
2.	E. L. Taylor.
3.	Upon the recommendation of the Board of Grain Commissioners and appointed by the Civil Service Commission.
4.	$5,000 per annum less 10 per cent.
I might add another question, as to the time of his appointment. That question hav-
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ing been answered, I have on the way to the order paper another one:	What was the
amount spent by the Board of Grain Commissioners in the way of fees for legal services during each of the five crop years preceding July 31, 1932? Information has come to us that these legal services were being provided for the Board of Grain Commissioners at a comparatively small charge, and now it seems that the government has appointed a solicitor at a salary, according to the answer given me, of $5,000 per annum less ten per cent. Another question I asked, to which I should like fuller information, was:	On whose
recommendation was he appointed? The answer was that he was appointed on the recommendation of the Board of Grain Commissioners by the Civil Service Commission. I should like to know whether that is the answer to the question as I intended it to be answered, or whether the Board of Grain Commissioners took the initiative in requesting a solicitor for the work. I wish to know whether, according to statements that have Been made, this officer, Mr. E. L. Taylor, was foisted upon the Board of Grain Commissioners. These are some of the questions we want to have answered.


Henry Herbert Stevens: I am happy to be able
to give an answer to practically all that the hon. member has asked. The appointment *of a solicitor to the board, in the position occupied by Mr. Taylor, originated I believe in a recommendation by the Brown commission that someone should be appointed as legal adviser to the assistant commissioners, who later were appointed, and to help, if required, any complainant to get his case before the board in proper order. Mr. Taylor has been acting as legal adviser to the various assistant commissioners who are located, as my hon. friend no doubt knows, in Calgary, Saskatoon and Winnipeg. He gives legal advice constantly on the innumerable matters that arise in connection with the administration of this board's business, which is very extensive and intricate-particularly intricate in view of the amendments of 1929 and 1930 and the adjustments which became necessary. Constantly questions are coming up regarding licences, insurance, and so forth. In addition to that, Mr. Taylor is at the disposal of applicants before the board for adjustment of various matters which they complain about, and he also renders assistance to them.


Mr. BEAUBIEN:: Does he give this assistance free of charge?


Henry Herbert Stevens: Free of charge, yes. That is his position and he is recognized as a very

useful and competent solicitor in that class of work. In addition to that there are some major matters of litigation that may and do come up, and for that purpose, if I am not mistaken, the board retains the services of Mr. Travers Sweatman, K.C.. of Winnipeg. I presume that where necessity warrants it, in matters of sufficient importance, they retain other solicitors as well. I am sorry I have not the particulars of the expenditures for legal services over the past five years.


Albert Joseph Brown: I think that information is very important. The other day I asked the minister to table the report of the Board of Grain Commissioners for the year ended July, 1931. At that time I had in my hand the reports for the previous years and in looking over the particulars I could not find a single item which could be identified as an expenditure for legal services. Evidently the expenditures were so small that it was not considered necessary to concentrate them in a separate item. In view of this, it is hard to understand why a solicitor should now be appointed at a salary of $5,000.


Henry Herbert Stevens: I have a list of the detailed general expenses which include legal fees. The estimate for the current year is $3,000. I have not the particulars for the past year but I should imagine they would be about the same amount.


Albert Joseph Brown: When was Mr. Taylor
appointed?


Henry Herbert Stevens: About a year or a year and a half ago.


Albert Joseph Brown: Why does his salary not appear in the statement of expenditures for the crop year ended July, 1932?


Henry Herbert Stevens: I speak subject to correction, but I assume that it would be included in the salaries item.


Albert Joseph Brown: It does not appear in the expenditures for the 1931 crop year. I have looked over the reports for the two years and I cannot find anything which could be identified as an expenditure for legal services.


William Richard Motherwell: My curiosity has been somewhat aroused by this new appointment. This is the age of economy, of coordination, of the avoiding of overlapping and other hackneyed matters, and yet this appointment is made. We have entered into a period of extreme quietude so far as the administration of the grain act is concerned. There has been no trouble in connection with grading and the quality of grain has been high. Everything has been running as smooth as

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silk and yet we find the minister appointing a legal adviser to the Board of Grain Commissioners. The salary to be paid is $5,000. a rather snug little sum these days and more than most- of us in this chamber are receiving. As I understand it, prior to this appointment the annual cost for legal services was only about $500. We are just entering the Easter season and I shall try to keep my language moderate. The ministry has chosen a very convenient and quiet time to discuss these matters; we are all necessarily more or less under the discipline of the hour but we want the information just the same.


Henry Herbert Stevens: My hon. friend can get any information he wants.


William Richard Motherwell: What was the idea of departing from the fee system, whatever it cost? My understanding is that the cost was less than $1,000 per year, and yet a permanent official is being appointed at a salary of S5,000 at a time when there is the minimum requirement for legal counsel.


Henry Herbert Stevens: As my hon. friend recalls,
the act was amended in 1930. Without doubt there was a general desire upon the part of everyone in western Canada, as well as those having to do with the administration of the act, to see that it was as effective as possible. As I have stated already, the act provides for the appointment of resident assistant commissioners. The appointment of this legal adviser to the commission generally enables the commission to give the resident assistant commissioners the full value of his advice on legal matters. Appeals are constantly being made by farmers to the board in connection with elevator companies and others and frequently the elevator company or the other business concerned has legal advice while the farmer has none. Mr. Taylor takes charge of all such cases and puts them forward in the proper and legal form. In other words, he is the general legal adviser to the board, to the assistant commissioners and to the complainants of the character I have mentioned. I think he is rendering a very valuable and useful service to all concerned.


William Richard Motherwell: Is the salary of
this official being charged to the administration of the act which has to be paid by the farmer? If it is, then all I can say is that it is just another case of the government policy of loading everything on to the farmer. I may be wrong in this surmise, but the minister has not. indicated the amount of the fees paid before this counsel was employed.


Henry Herbert Stevens: As I stated to the hon.
member for Lisgar, I am very sorry that I 53719-252
have not before me the information for the preceding five years.


William Richard Motherwell: My hon. friend
must know what they are.


Henry Herbert Stevens: I do not.


William Richard Motherwell: Surely the minister
would not employ a permanent official without knowing what it was costing under the other system. Surely he is not going to admit that he does not know that much about this branch of his department. It looks like another extravagance practised by this government at a time when it is preaching economies from the housetops. We want some more explanation about this item.


Mr. DONNELLY:: This official is appointed at a salary of $5,000 and yet when any important matter comes up it is handed over to another firm of lawyers. For fifteen or twenty years we managed to get along without employing any firm of lawyers.


Henry Herbert Stevens: No.


James J. Donnelly: They were not employed unless they were needed from time to time. When the grain act was amended two or three years ago we appointed not only three grain commissioners but three or four assistants. Now it seems that we must have a lawyer and an assistant to the lawyer. All these officials are required to help the grain commissioners arrive at a decision because they are the ones who decide what is to be done.


Mr. MALCOLM:: I must confess 'that I
was amazed ait the last remarks of the minister in connection with his counsel. As hon. members will recall, in 1930, there was a very thorough investigation of the Canada Grain Act. As the minister pointed out, aissistant commissioners were provided to provide a little closer contact with the farmers in each district. After all, the Canada Grain Act has a board appointed for one purpose only, namely, the administration of the act; that is the duty of the board. The new board which was appointed met, I think, with general approval of the grain growers and elevator companies in western Canada, and we all feel it should be able to administer the act. If this new solicitor at $5,000 a year is appointed to advise the board, which is after all the oourt of appeal in oases of dispute, and if the appointment is made because the board hardly feels competent to interpret the act which this parliament passed, well and good. But the minister makes .the amazing statement that one of the duties of this lawyer is to act on behalf of the appellants.



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How can he be counsel for the board and at the same time be counsel for the appellant? As I understand the matter, the board is the court that must make a decision in a case of appeal against the action of an elevator company or some other organization or individual. The elevator company, of course, will have a solicitor to present its case before the Board of Grain Commissioners, and naturally the appellant, whoever he is, would have his own lawyers. But how a solicitor before the board can undertake the duty of advising the board and at the same time of advising the appellant, I cannot understand. Perhaps the minister will explain.


Henry Herbert Stevens: I do not think there is
any difficulty in understanding that. This board is not a court in the sense that the Supreme Court of Canada is; it is rather a court of equity than a court of law.


James Malcolm: Quite so.


Henry Herbert Stevens: Ninety per oent of its
dealings is with farmers. A substantial portion of its time is taken up with elevator companies and grain dealers. Where there is a conflict, it has usually been between an individual shipper or farmer and an elevator company or broker or someone of that character. The board will sit to hear those complaints.


James Malcolm: Will the minister pardon me for a moment? He knows many of the complaints are not against elevator companies; they are against weighmasters, or officers of the board.


Henry Herbert Stevens: Yes, but I am simply
indicating the general class, shall I say, of disputes that may arise. They may be with weighmasters.


James Malcolm: Inspectors.


Henry Herbert Stevens: But generally speaking,
the dispute is between the individual shipper and the elevator company or grain concern. Last year, for instance, I find in a memorandum just handed me, that 127 complaints were heard by the board. In forty-two cases no grounds for complaint were found. The complaints were made; they were gone over carefully and dismissed as being without ground. Fourteen cases were withdrawn; thirty-nine settlements were arrived at, and thirteen were found to be outside the jurisdiction of the .board owing to questions of law or matters that had to go to the courts of the land. In five cases the board ordered 
a stated settlement. In one case there was a prosecution of the defendant. Thirteen cases are not yet disposed of.
This legal adviser that I mention is certainly of value to the farmer who appears before the board. The board is a moving body which, for the convenience of the farmers, the grain growers of the district, holds hearings in different parts of the country. The legal adviser would give assistance to the farmer who was making a complaint, thus saving him the expense of retaining a lawyer. I do not think we should make this board's hearings of a character that would force a man to have a lawyer appear before it. I remember very well, when the Board of Railway Commissioners was first organized, the late Justice Mabee would scarcely hear a lawyer before the board on the ground that complainants would be private citizens and it was not fair to put them up against skilled lawyers representing railway companies. In a measure the grain commission is of that character. It is desired to have these things as informal as possible and to deal with them on the grounds of equity. But it is desirable and certainly useful to those who present their claims that they should have the assistance of someone thoroughly familiar with the act so that they may put their claims forward in the best possible form. That is one of the services this lawyer renders. I do not wish to reiterate this to the point of being tedious, but as I said before, in the board's business many matters arise of a small or petty legal character, such as questions of licensing elevator companies and so forth.


William Richard Motherwell: If they are small or petty, they are hardly worth $5,000.


Henry Herbert Stevens: But in the aggregate my hon. friend must understand they would cost a great deal more if fees were paid to outside lawyers. Owing to the growing business of the board it was thought desirable to retain this lawyer.


Albert Joseph Brown: The explanation of the minister is not very satisfactory. Instead of asking whether a solicitor had been appointed for the Board of Grain Commissioners, it seems that I should have asked the question: Has a legal representative for the farmers been appointed to represent them before the-grain commission? Then the answer might have been yes. Whether he is to be temporary or not I do not know; the answer is not very satisfactory.

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We are told that many small eases arise in regard to licences where the advice of the solicitor is required. I am not altogether unfamiliar with the man who has been appointed, and I venture to say that Mr. E. B. Ramsay, the man whom we appointed as head of the Board of Grain Commissioners, is just as competent to settle these questions as is E. L. Taylor.


William Richard Motherwell: Is he a good Tory?


Albert Joseph Brown: I shall tell my hon. friend more about that before we are through. When Mr. E. B. Ramsay was appointed chairman of the grain commission, he had the full confidence of every farmer in Manitoba. He was recognized as thoroughly competent to discharge the duties of his office. When we revised the Grain Act in 1930 he was present at almost all the sittings of the committee of agriculture, and most of the provisions of the clauses of the grain act were made with the sanction of Mr. Ramsay himself. He is quite familiar with every section and subsection of that act; no lawyer can be better qualified to administer the act than he is. It is unnecessary to appoint any man to instruct him as to the provisions of the grain act. So much for that question. This lawyer's duties as outlined by the Minister of Trade and Commerce are so ridiculous that I think the minister should give us some better explanation for the appointment of Mr. E. L. Taylor, who is well known in Manitoba.


An hon. MEMBER:: Who is he?


Albert Joseph Brown: Well, he was a Conservative candidate in the constituency of Mountain in two elections and he was defeated. I am not sure whether he was ever elected to the Manitoba legislature, but his name figured very largely in the election scandal in the constituency of Gimli. That is the man who has been appointed.


Henry Herbert Stevens: It is always very easy for one with prejudice to besmirch the character of someone who, of course, is not able to defend himself. I shall say, without fear of contradiction by any self-respecting citizen of this country, that Mr. Taylor is a respected barrister and citizen of the city of Winnipeg and holds the confidence of a very large proportion of his fellow citizens. I am not questioning the fact that he was a Conservative. After all, is it a sin or crime that a man should espouse the Conservative cause?


Albert Joseph Brown: I am not saying that.


Henry Herbert Stevens: It may be so considered, but I suggest to the hon. member for Lisgar that it is neither courageous nor fair to besmirch by innuendos the name of a man who has no opportunity to defend himself. I have no hesitation in saying that Mr. Taylor is a respected citizen in his own community.


Charles-Philippe Beaubien: What attitude did the
minister take in the customs inquiry? Did he not cast a blemish on anyone's character then?


Henry Herbert Stevens: I will tell my hon. friend what attitude I took. We looked with great care into various matters pertaining to the administration of the Customs department- this is more or less out of order, Mr. Chairman-but from one end of the five months to the other I never put my finger upon nor uttered one syllable against the personal character or reputation of an individual-not one.


Charles-Philippe Beaubien: What about the speeches the minister made in this house, casting insinuations against several members sitting opposite him? He cannot deny that because it is on Hansard.


Henry Herbert Stevens: I do deny it.


Albert Joseph Brown: Over and above this $5,000
that Mr. Taylor is going to get as solicitor for the board, do I understand the minister to say that he is also going to receive out of the estimated expenses for the 1933-34 crop year an additional $3,500 for legal fees?


Henry Herbert Stevens: Provision is made in the
estimates for $3,000.


Charles-Philippe Beaubien: Is that in addition to
the $5,000?


Henry Herbert Stevens: Yes.


Albert Joseph Brown: If Mr. Taylor is such an
eminent lawyer as has been suggested there is no reason in the world why he cannot perform these other services, because his time will not all be taken up performing the petty duties indicated by the minister, and there is no need for giving him that extra $3,000.


James Malcolm: I do not wish to hold
up the minister's estimates, but as one who has administered this department I am going to say to him that this is the most unjustifiable appointment he has ever made. In the first place, when the Board of Grain Commissioners do run into trouble in the administration of the grain act they want the advice not of Mr. Taylor but of the best solicitor obtainable in Canada. That has been the

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course that has been followed in the past. Eminent counsel, of course, have to be called in occasionally by governments and by government departments to help them, but the Board of Grain Commissioners, under Mr. Ramsay and the other two commissioners, know the Grain Act from cover to cover, as do many members of this house, and I say to the minister that it is all hooey to talk about needing a lawyer for the issuance of certificates or licences or for anything of that sort, because Mr. Ramsay knows the act perfectly, and its provisions are as clear as crystal to anyone who studies them. If the minister takes the other stand and says that he thinks the farmers of western Canada have a right to legal counsel in presenting their appeals to the board, he is probably justified in the appointment; but if a lawyer is to be appointed to represent the farmers of western Canada I would expect the minister to request of the house that a growers' counsel be appointed and that the expense be charged up to inspection fees. There is no one more interested in the grain act than the grower, and every dollar that we are here voting is repaid to the treasury, out of inspection fees, by those who ship the grain. It is not paid for by the taxpayers at all. This is a service paid for by the grain producers of Canada, and the sooner members of the house realize that fact the sooner will they realize that this expenditure should not be increased unless the people who are producing the grain and paying the fees so request. I never heard of Mr. Taylor as an eminent counsel in Winnipeg to whom any of the boards in the past went for advice. The last chairman of the board, Mr. Leslie Boyd, appointed by my hon. friends opposite, was a lawyer, a man who I consider gave very valuable service to this dominion. I do not think he ever consulted Mr. Taylor when he wanted an expert opinion on anything pertaining to the grain act, nor do I think that any of the other commissioners did. Why this man should be appointed at a salary of $5,000 without the request of those who are paying the fees I cannot understand. Personally I shall not hold up the minister's estimates but I think he is making a very grave mistake.


William Richard Motherwell: While the minister is recovering-he does not seem to have anything to say in reply-I wish to say, arising out of what was said by my hon. friend from North Bruce (Mr. Malcolm) and the lawyers will correct me if I am wrong, that there is a well known principle in British law that no lawyer can act for two sides of a given 
case. He cannot act for both the appellant and the defendant at one and the same time. Some lawyer repeated that axiom to me just the other day, and it is such plain common sense that any kind of layman on the opposite side of this house should be able to grasp it. As a matter of fact, the minister is caught with the goods, and he is hunting in every hole and comer to find an excuse for this appointment. That is what is the matter. We all know the fix he is in. We all know something more, and that is that $5,000 was not the sum first mentioned, nor $6,000, but a good deal more, was it not?


Henry Herbert Stevens: I never heard of anything more than $5,000.


William Richard Motherwell: I did, and that is the information which the hon. gentleman has not got. I think he had better let this item stand until he gets the important information we require, particularly after it has been pointed out, and as we all know, that this $5,000 comes out of the fees which the farmers have to pay on every car of wheat. The farmer pays $2 per car for weighing and grading, and that is what pays for this service. The government is recouped out of these fees. I suppose this vote in the estimates for the Canada Grain Act has been reduced because of this $5,000 that is going to Mr. Taylor, but should it not have been increased instead? It would seem as if the government under their blighting administration of affairs, anticipate a smaller crop next year, that bugs or worms or Tories are going to attack our grain. Out of this sum that is being voted the minister is giving $5,000 to a political henchman, as far as we can make out to-day, for doing what was done for $500 before, and there hon. gentlemen opposite stand, caught with the goods, thinking they were going to sneak this thing through on a quiet Thursday afternoon. My heart was touched at the beginning by the minister's helplessness, and I was inclined to let him go, but he has made such a mess of it that we can now very well afford to sit down and let him mess away at it himself.


Albert Joseph Brown: I move to reduce this item No. 275. amounting to $2,295,172.20, by the sum of $5,000.


Henry Herbert Stevens: I am quite sure the committee will not expect me to reply to my hon. friend from Melville in the same language and the same terms as he used.


William Richard Motherwell: The minister cannot reply; that is the trouble.

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Henry Herbert Stevens: I have stated three times- I stated it in the first explanation that I made, I stated it again, and I repeat it now -that a substantial portion of the time of Mr. Taylor has been occupied in assisting those who are presenting cases to the board; that is, farmers and producers and that class of applicant. The hon. member for Melville suggests that a lawyer cannot act for both sides of the case. Mr. Taylor is not acting for both sides of the case at all. On the one side of the case would be, as I pointed out before, an elevator company or a concern of that kind, and on the other side would be the applicant such as a farmer, producer or shipper of grain in one of the western provinces. The elevator company would have its solicitor to appear before the board, and the board has put into practice the system that I have mentioned of paying a solicitor and getting him to assist the farmer or producer or the shipper, as the case may be, in presenting his case to the board. In that work about half of Mr. Taylor's time, I should judge, is occupied.
My hon. friend from North Bruce, the hon. member for Melville and the hon. member for Lisgar also suggest that the act is so clear and so perfect that anyone can understand it.


Albert Joseph Brown: That Mr. Ramsay could
understand it?


Henry Herbert Stevens: It is a large act, an
important piece of legislation, and it is no reflection upon Mr. Ramsay or the members of the board to say that there are many little things which require close study. For instance in a day or two I shall show that there are certain amendments now called for arising out of complexities in the act, if you dike to put it that way, or in connection with matters which were overlooked. It is no reflection upon those who drafted it or the Board of Grain Commissioners. The same thing has occurred in connection with many of the major statutes. But in regard to the large. number and variety of bonds that the act imposes upon the commission to exact from those using the facilities of the board, such as elevators and so on, there is required careful supervision and drafting. Mr. Taylor has been devoting a considerable portion of his time to that work, a work which constitutes valuable service to the commissioners. I am sorry the hon. member has taken the attitude he has shown in committee. Certainly there was no thought in my mind of hiding this item, or of slipping through the grain estimates this afternoon. I am quite willing to ask that the item stand over until some other day, so that we may have a full-dress debate on it for a whole week, if the
hon. member wishes it. However, I tell the committee this, that some few weeks ago we had one of the commissioners in Ottawa. He waited two or three days, during which time I was unable to get my estimates before the house. At that time the attention of the members was directed towards other matters.


Mr. MACKENZIE (Vancouver):: The
budget.


Henry Herbert Stevens: No, it was not the budget. I was taking advantage of the presence in the city of one of the commissioners to have my estimates placed before the house to-day. Hon. members opposite must know that it is inadvisable to hold these gentlemen here in the east day after day awaiting the pleasure of the house. It is only for that reason that the estimate was brought on this afternoon. If the committee feels that it is not being treated fairly, I am quite satisfied to ask that the item stand, and I shall go on with other items to which there will be very little opposition.


Mr. STEWART (Edmonton):: Go ahead;
nobody is asking that.


Henry Herbert Stevens: I am not desirous of proceeding contrary to the views of hon. members opposite. I shall undertake to give them ample notice of further discussion on the estimate now before us.


William Richard Motherwell: Mr. Chairman, the
minister is much too accommodating. When reinforcements to the committee were not here he wanted to put this vote through. Now that they are here he wants to place it to one side. That is all his talk amounts to.


Henry Herbert Stevens: The hon. member wishes
me to stop?


William Richard Motherwell: We are just getting warmed up, and we want now to see it through. There is no use having two fracases when one might settle it. The minister has given no information. We might just as well let it go through, or go on with the discussion of it, or pass on to some other phase of the matter-because we are dealing with only one phase-the new counsel and his salary. I wish to impress upon the committee and everybody concerned with this measure that the farmers will have to put their hands in their pockets and pay this bird $5,000. My information is that had the government had its way they would have paid $7,000.


The CHAIRMAN (Mr. Arsenault):: I
shall read the amendment.

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Charles A. Stewart: The hon.
member is speaking to the amendment.


Telesphore Arsenault: I have not read the amendment. It is moved by the hon. membeT for Lisgar (Mr. Brown) that item No. 275 be reduced by $5,000.


Albert Joseph Brown: This matter came to my
attention only yesterday, and the information I was given has been proved, so far, to be correct. I should like to know whether the further information I have is correct. That will show, of course, when we have the correspondence between the department and the Board of Grain Commissioners.


William Richard Motherwell: Is that not down
yet?


Albert Joseph Brown: No, it was ordered only
yesterday.


Telesphore Arsenault: Do
hon. members want this item to pass?


Albert Joseph Brown: We are discussing it, and
we are in order. You were in order a minute ago, when you insisted upon reading the amendment, and we are in order now when we speak to it. The information I have is that the first salary demanded was $7,000. Probably when we have the correspondence we will find who demanded it. The Civil Service Commission balked at that figure, and it was brought down to $6,000. Finally an agreement was reached at $5,000. As I say, although my information on the other points was confirmed, it was not confirmed on this one. I should like to know whether correspondence with regard to the salary passed between the department and the Civil Service Commission?


Henry Herbert Stevens: Certainly I cannot recall
any such correspondence. So far as my recollection goes $5,000 is the only sum that has been mentioned. I have no recollection of a larger sum being mentioned, and I am informed by my officials that they have no recollection of any such correspondence. In that connection I can say no more.


Mr. VALLANCE:: Who requested that Mr. Taylor be appointed to the position? Was it the farmers, or was it the Board of Grain Commissioners?


Henry Herbert Stevens: So far as I know the
suggestion was made by the Board of Grain Commissioners, and the appointment was made by the Civil Service Commission. Again, without examination of the records I cannot say offhand whether a demand was made by the farmers.
rTha Chairman.]


John Vallance: Has the appointment
of Mr. Taylor been made permanent?


Henry Herbert Stevens: No.


John Vallance: It has not? Because
in the investigation last year into the civil service and the Civil Service Act I find at page 919 the following statement concerning the appointment of Mt. Taylor:
On recommendation of the Civil Service Commission the temporary appointment under section 40 of the Civil Service Act of Mr. Edmond L. Taylor as counsel of the Board of Grain Commissioners at $5,000 per annum was authorized for a period of six months from August 1. 1931. under authority of order in council P.C. 298-2188, of September 10, 1931.
Has this temporary appointment been renewed from time to time, and if so, why is there not a permanent appointment made? It must have been renewed several times, because the original appointment went back to August 1, 1931, and we are now in April of 1933. If the position is so important, why is it not filled permanently?


Henry Herbert Stevens: The decision whether or
not it should be made a permanent office has not yet been arrived at. The temporary appointment was made by the Civil Service Commission, and at the request of the Board of Grain Commissioners the period was extended a further six months.


John Vallance: This appointment is
made by order in council?


Henry Herbert Stevens: Yes, and under the Civil
Service Act.


Albert Joseph Brown: I cannot believe that the Board of Grain Commissioners recommended the appointment of Mr. E. L. Taylor. When I asked the question I had it in mind that someone outside the board might have recommended the appointment of Mr. Taylor, and that was the information I wanted to get. Of course I have not got it, and perhaps may not get it. In the beginning the minister said this action was taken because of some recommendation contained in the report of a commission. I do not remember that recommendation, and I should be glad if the minister would point it out.


Henry Herbert Stevens: I am speaking on the
advice of officials who ought to know and who do know.


William Richard Motherwell: Does the minister
know whether Mr. Taylor was engaged in the practice of law prior to his appointment?


Henry Herbert Stevens: Certainly he was, for
many years.

Supply-Trade-Grain Act


William Richard Motherwell: Had he any special experience in connection with the grain act?


Henry Herbert Stevens: Yes.


William Richard Motherwell: I never heard of
him; he must have been buried in the basement somewhere. I never heard of the man being associated with any cases before the courts involving the grain act, because there have been few, if any, such cases. Everything has been as quiet as sitting about the home fire, and yet this appointment must be made at this time. As a matter of fact I know that a lawyer, to be worth his salt in dealing with the grain act before the courts, must have studied that act not for a month but for years, and he must have had some experience before taking over an important case or pretending to fill an important appointment such as this if there were anything to do. There is no one so helpless as an inexperienced lawyer in a grain case, because it is very involved and intricate business. Half the time the lawyer will not know what he is talking about unless he has an army of supporters and prompters around him. The late Mr. Bonnar of Winnipeg was considered one of the best lawyers in the west in connection with grain legislation or litigation. I do not know of anyone who has been able to equal him, but even Mr. Bonnar had to have all sorts of technical support when he went into court. We have never heard of this man Taylor; he may have dropped from the moon for all we know. We do not know whether or not he knows anything about this grain act. As a matter of fact the government is caught spending $5,000 of the money of the farmers in order to give a salary to one of its friends who has the reputation described by the hon. member for Lisgar. Surely his word should be as good as that of the minister in regard to Mr. Taylor; in fact he is far more likely to know the facts, because he knows the gentleman. Does the minister know Mr. Taylor?


Henry Herbert Stevens: Certainly I do.


William Richard Motherwell: Then why did you appoint him if you knew him to be that sort of man? The government should not give away the hard earned money of the farmers at a time when they can hardly buy a clucking hen, and when a lot of them are on relief. Many of them cannot even buy postage stamps to write us, as we know by the small volume of mail we get; they do not know they do not require a stamp. The minister has just displayed what we always knew, his lamentable ignorance of this branch of his department. It is high time the administration of this grain act was handed over to the Department of Agriculture. At least the gentleman heading that department knew enough to do justice to garnet wheat, which my hon. friend, the Minister of Trade and Commerce, wanted to butcher.


Mr. IRVINE:: Did I understand the minister to say that the Board of Grain Commissioners asked for this appointment and that the Civil Service Commission made it?


Henry Herbert Stevens: Yes, that is my information.


John Vallance: I should like to proceed a little further. I hold in my hand a copy of the evidence presented before the committee that investigated the civil service commission last year. I do not wish to deal with the many files that were presented to that committee, some of them trying to prove that the two commissioners were always opposed to the chairman while Doctor MacTavish presented cases in which he was the dissident. This is one case in which Doctor MacTavish dissented; he brought it in to prove that he and the other commissioner were not at all times opposed to the chairman. This is what I find with regard to this position:
The civil service commissioners on August 12, 1931. directed in this case that, in case of extension beyond six months, the continuance of the temporary position to be authorized, and if the position is to be of indeterminate duration. that it be advertised.
This office is now in receipt of a request for the extension of temporary certificate in above connection for a period of six months from February 1. 1932, it evidently being the desire of the department that the appointment of Mr. Taylor be extended by order in council for a further period of six months.
The department advises regarding the possible duration of the employment of Mr. Taylor that they are not at the present in a position to furnish definite information.
At that time the department did not know whether or not this would be a permanent position. I should like to know if the position is of such moment that it should be filled permanently and, if so, why it has not been made permanent.


Henry Herbert Stevens: In all probability it will be disclosed that it should be made a permanent position. We have not decided to make it permanent up to the present, and in view of the criticisms that hon. gentlemen opposite have hurled at my actions in this regard, and particularly in view of the language used by the hon. member for Melville


William Richard Motherwell: Hear, hear, and I shall have more to say.


Henry Herbert Stevens: -we might be justified in abolishing this position at the end of the

Supply-Trade

Grain Act
temporary period, which I think will be in about three months. But I want to suggest to hon. members opposite that in my estimation they have been grossly unfair in their treatment of this matter, because I am confident that it will be found that the services rendered by Mr. Taylor have been of value to those who most required them, and in all probability if we discontinue the position we will be inundated with demands for the restoration of that service. Personally I am not interested in the matter in any shape or form. If' it is thought by the committee that this is a service that should not be continued I am quite prepared to end it when the temporary certificate expires.


John Vallance: The minister says Mr. 1 aylor has been acting for the producers or shippers and also for the Board of Grain Commissioners. Has the minister at hand the number of shippers or producers who have availed themselves of the services of Mr. Taylor?


Henry Herbert Stevens: I could not give my hon. friend that information at the moment, but I understand there have been quite a number of cases, as well as many that never appeared on the records, where complaints have been made to assistant commissioners at Saskatoon or Calgary in addition to the complaints reaching the head office in Winnipeg. Mr. Taylor has frequently investigated those cases and given advice and counsel so that they may not have come to a formal hearing. This has been a useful and valuable service, but that is all I can say in regard to the matter.


Mr. WEIR (Macdonald):: I wonder whether the minister could indicate, from the records under his hand, the sort of cases on which Mr. Taylor has been working, and if the minister could review one or two of those cases to give the committee an idea of what Mr. Taylor may have been doing.


Henry Herbert Stevens: The record at which I am looking does not give that information, but I may be able to give it in a moment.


William Richard Motherwell: It is down cellar in a tea cup, I suppose.


Henry Herbert Stevens: I would suggest to my hon. friend that nothing is to be gained by that sort of language; it does not add to the dignity of the house nor does it help the amity of debate. I am prepared and willing to give to this committee all the information I can. A moment ago the hon. member said that all I had succeeded in demonstrating was that I knew nothing about my department.
[Mr. Stevens.1
I do not wish to boast, but I am not afraid to meet the hon. member or anyone else in a discussion of the affairs of the department.
I do not pretend for a moment to have mastered in detail all its intricacies, but this I certainly do:	From eight-thirty in the
morning until late in the evening I devote whatever energy, ability and time I have to a study of the affairs of the department, and so far as the Board of Grain Commissioners is concerned I leave the administration of the act very largely in their hands, as it is my duty to do. When I come to parliament with the estimates of the board I come fortified with as much knowledge as I have been able to gather to anticipate ordinary questions asked, and I can assure hon. gentlemen opposite, who, generally speaking, are pretty fair and sportsmanlike, that I am prepared to give as complete answers as possible on all matters relating to the department. In this instance I am quite prepared to grant that hon. members have a right to criticize;
I do not object to that at all. But I do feel that it is not quite playing the game for the hon. member to suggest to the committee, and particularly to the public, that I have been so neglectful of my duty since taking office as not to know anything about the affairs of the department. That, I think,
I have a right to resent.


Some hon. MEMBERS:: Hear, hear.


William Richard Motherwell: The rearguard
think they have something to cheer about, but they have not. I was just referring to this branch of the Department of Trade and Commerce, the work under the grain act, which is the only matter before us at the moment. This is the second time this session that the hon. gentleman has undertaken to lecture me on the amenities of debate, although I have been fair enough to allow his ghastly mistake to pass with regard to the wheat which the government were holding over-saying that the government were not in the grain trade when all the time they were-and I excused him before Christmas on the ground that perhaps it was not in the best interests of the state to have the actual facts brought out. Now he takes me to task and picks me out as the chief sinner in criticizing him. Don't I remember when he was on this side of the house? If he had had his way not one of us would have had a square inch of hide left on us after he was through. And [DOT] then to squeal now because we give him a little bit of his own medicine! As a matter of fact, the appointment was made by the hon. gentleman without knowing whether it

Supply-Trade-Grain Act
was necessary or not, and now he tells us, a year and a half afterwards, that he does not know whether the man's services were used by the farmers.


Henry Herbert Stevens: I made no such statement.


William Richard Motherwell: The hon. gentleman has just said it. What did he say? The hon. member for Macdonald and two or three others have asked for information with regard to the suggestion about farmers falling prostrate before the hon. gentleman's appointee and asking for succour and advice at a time when they did not need it, and he lectures us. If he wants to keep his head on his shoulders he had better be civil himself. We do not always get him in the box he is in now. He had better come down the tree as the coon usually does when smoked out. We are not particularly concerned whether he comes down head first or tail first, but I suggest that it would be well for the hon. gentleman to admit that he is up against it instead of attempting to lecture us as he has been doing.


John Vallance: I have listened with
interest to what the minister has had to say with regard to the appointment of Mr. Taylor. Going through the evidence, I find a letter sent by the Deputy Minister of Trade and Commerce to the Civil Service Commission, setting out the reasons why the appointment should be made. During the discussion this afternoon, or at least that part of it that I have heard, I have not detected the real reason given to the Civil Service Commission. Let me quote from a letter written to the secretary of the Civil Service Commission by the Deputy Minister of Trade and Commerce:
I have your letter of the 22nd instant and in reply beg to say that at the moment I cannot furnish definite information regarding the probable duration of the employment of Mr. Taylor.
Matters have been cropping up from time to time which require his attention; and more especially now that the ten cent wheat bonus is being paid, many legal questions regarding the ownership of the wheat grown, etc., are having his attention. I would suggest if possible that the Civil Service Commission extend the certificate for another six months when the matter may then be given further consideration.
This letter was dated December 23 and was addressed by the Deputy Minister of Trade and Commerce to the secretary of the Civil Service Commission. I suppose the six months have expired, and it will be seen that he speaks here of a ten cent bonus, which was
never ten cents at all, and which is no longer in existence. So that the reasons given by the department, for the appointment no longer exist, and I think the minister would be well advised to cancel the appointment.


William Gilbert Weir: Has the minister anything to show what work this gentleman is doing?


Henry Herbert Stevens: I have stated it over and over and my hon. friend has added one other duty which I overlooked; it is true he did give some service in that respect. As regards the individual oases, I am sorry I have not under my hand a statement containing that information. I understand there is an amendment before the chair to cut the item by $5,000. I am advised by the Board of Grain Commissioners that they have reduced their estimates as low -as they possibly can consistently with proper administration, and we cannot accept the amendment. I have already said that the appointment is temporary'. It has been renewed at the request of the department and the commission and I am quite prepared to say that, in the light of what is disclosed, the services may be discontinued at the expiry of the period.
Amendment negatived on division.


Edward James Young: I asked the minister whether he had anything to tell us of the government's activities in the wheat market. When the committee of the House of Commons was investigating the grain marketing situation a few years ago, Mr. James Richardson told us that one of the principal reasons for the prevailing low price of wheat was the fact that the federal farm board of the United States was holding a quantity of wheat. A few weeks ago an announcement was made that the federal farm board 'had got rid of their surplus and since then the price of wheat in Chicago has been steadily advancing. We believe that the Canadian government, through Mr. McFarland, is holding vast quantities of wheat, but we see no corresponding advance in price here. When may we expect the government to get rid of the wheat which it is holding, with results similar to those obtained in the United States?


Henry Herbert Stevens: Let me point out in the
first place something which I am sure my hon. friend knows, namely, that the price of wheat in Chicago has risen because the United States market is no longer on an export basis. It is virtually on a domestic market basis, and that is the chief reason for the rise. Canada, on the other hand, still is and in-
Supply-Trade-Grain Act

evifcably will continue to be on an export basis; consequently there is not likely, through any local agency, to be any rise in price in Canada, except in so far as the price of wheat rises in the world market generally. Now, as regards the quantity of wheat which my hon. friend says is hanging over, let me say this: The official figures of the bureau of statistics show an anticipated carry-over of about 150,000,000 bushels. Of course, it is impossible to give precise figures. The movement of wheat this year has been very creditable. The following movements for export have taken place:
Bushels
1931		 217.000,000
1932		 191,000.000
1933		 239,000,000
These figures show that our wheat is moving out to the world markets in a fairly creditable and rapid manner. In my opinion, given for what it is worth-in the estimation of Eome it is not worth much-the world situation in connection with wheat is gradually and steadily improving. The obvious failure of the winter crop of the United States and the comparatively poor quality of the Argentine crop of the past season has changed the situation very materially. Russia was almost entirely out of the market last year and the indications are that she will not be in the market next year as an exporting factor to any great extent. The position has greatly improved over what it was two years ago. The position at that time was due to the heavy crop of 1928-29. The fact that the government through the agency of Mr. McFarland contributed to the stabilization of the wheat market in Winnipeg during the past two years does not necessarily enter into this picture. That was something which was done to prevent the cash wheat market from collapsing. I think every hon. member will admit the grave danger with which we were confronted during the last couple of years in the complete collapse of the cash wheat market. That collapse was prevented by the action taken by Mr. McFarland acting under the instructions of the government. We feel confident that the holdings which Mr. McFarland has and which are merely futures can be put forward in an orderly manner so as not to create a sudden break in the market. I do not know whether my hon. friend intended to suggest it, but I have heard the suggestion made that we should sell this wheat as quickly as possible. Such action would result in the complete collapse of the market. We intend to make possible a gradual liquida-

tion of the surplus Canadian wheat. I suggest to my hon. friend and to others who are interested that the best and most helpful thing that can be done for this country and for the producers of this country is to have the surplus quantities of wheat fed on to the market in quantities that the market can bear. May I point out again that in my opinion the general world situation is such that the outlook is not too black.


Edward James Young: The minister has stated that there is some 150,000,000 bushels of wheat still in the country. Can he tell us how much of that is in the farmers' hands, how much is in the hands of the trade and how much in the hands of Mr. McFarland?


Henry Herbert Stevens: That figure I gave was the likely carry-over but there is more than that in the country. I have not the exact figures before me but I think I can give them fairly well from memory and they may be subject to correction. According to the latest estimates there are about 80,000,000 bushels in the hands of the farmers. This is an abnormally large amount for this time of year. I think it can be accounted for very largely by the fact that the farmers more remotely removed from the head of the lakes and Vancouver and subject to additional freight charges have been inclined to hold their wheat.


Mr. GARDINER:: Would that amount include wheat held for seed?


Henry Herbert Stevens: Yes. About a week or so ago there were about 69,000,000 bushels at the head of the lakes, 10,000,000 bushels at Vancouver and about 10,000,000 bushels in transit on our railroads and on the high seas. There are about 4,000,000 bushels in the hands of the milling companies, which is somewhat lower than normal-the normal holdings of the milling companies being about five to six million bushels.


James J. Donnelly: Will the minister compare those figures with the figures of a year
ago?


Henry Herbert Stevens: I have not all the figures my hon. friend asks for, but I can give some of them. As at the end of March, 1931, there were 69,000,000 bushels at the head of the lakes, and as at April 1, 1932, there were 55,500,000 bushels. The amount at the head of the lakes this year is about 15,000,000 bushels over and above what it was a year ago. The amount held by the farmers would be about thirty per cent more than normal,

Supply-Trade-Grain Act
while the amount in the hands of the millers is less than normal. There is a little excess at Vancouver, amounting to probably one or two million bushels.


James Malcolm: I think the remarks of the minister are worthy of a good deal of consideration by this committee, because they have confirmed what I knew to be the case when I was occupying the position now occupied by the minister, namely, that the law of supply and demand as it applies to commodities like wheat cannot be changed by governmental regulations. I have a distinct recollection of making a statement in this house which was severely criticized. I said that as far as the trade commissioners were concerned they had nothing to do, nor could they do very much, in connection with the selling of a commodity like wheat. This commodity must find its own levels on the markets of the world. The minister has referred to the abnormally large crop of 1928-29 as having been a disturbing factor in the price of wheat a few years ago. He is perfectly right in stating that that was the disturbing factor. The minister states also that the present plan is to put forward this carry-over wheat in an orderly manner, but it must be realized that the opportunities which we will have to dispose of our wheat will not be caused by any action of the Canadian government or any action of any member of the Canadian government. These opportunities will be brought about by a world shortage or a need of wheat and the wheat will go forward just as fast as the markets can absorb it and will command the price the markets can afford to pay. One fact should be impressed upon the producers of such commodities as wheat; they should realize that the commodity which they produce is liable to be affected by weather conditions in various parts of the world. Wheat is a world commodity and must be sold at the prices prevailing upon the markets of the world. I think the minister's statement, when analyzed, will remove a lot of the nonsense that has been talked as to what can be done to control wheat prices. We have in this dominion, under this item which the minister is asking us to vote on to-day, the very finest wheat handling system in existence in any country, paid for by the producers; the taxpayers are not being asked to pay a cent of this item. Our certificate for Canadian grain is treated in the markets of the world as a final certificate.
There is another delusion that it is well to shatter when the minister talks about the growth of Canadian trade with Great
Britain since the imperial conference was held. We have sold a great deal of wheat lately at a price that the world would pay for it, but that wheat has not all been consumed in Great Britain. It has been credited in our trade returns to Great Britain, but some of it has gone to other countries.
I rose for two purposes: one was to thank the minister for clearing up the situation by pointing out that it was the 1928-29 crop that caused such a surplus all over the world, because the crop was heavy. The minister pointed out also that Russia is not-and in my opinion it never again will be-a large exporting country. Only about five billion bushels of wheat are grown in the world and this is all consumed in the countries in which it is grown with the exception of
700.000.	000 or 800,000,000 bushels. Russia cannot produce more than 1,100,000,000 bushels and has 160,000,000 people who need it all. If they raise the standard of living in that country they may need more. The days when the Russian peasant consumed black bread and Russia exported 300,000,000 bushels of their good grain have gone; the Russians will use more of their own grain as food, and I look forward to Canada coming back to her place as the greatest grain exporter of the world. Shortage of crop may make the
500.000.	000 bushels needed very valuable. A long crop may throw an extra 500,000,000 bushels on the market and the price of course will be affected by the surplus so offered.
The second point I want to make is that European countries can do without wheat. France can consume her soft wheat; she can grow practically as much wheat as can the Dominion of Canada. Germany can use rye bread, and can substitute her coarser grain for Canadian wheat. The only thing that will stop Germany from using rye bread and that will induce France to use hard wheat is for this government to give those countries an opportunity to sell something to the Dominion of Canada. If a favourable trade treaty can be made to take some French commodities and another one to take some German commodities, the very high rates of duty prevailing in those countries against Canadian grain might be modified and we might have a still better market more willing to absorb this carry-over, while the price would reach a high level very much sooner than it would with these trade restrictions existing. Nothing should be more important to a country with 150.000,000 bushels of grain carried and financed by the taxpayers' money than to find an outlet at a high level. I suggest to the minister that the only way in which he
399S

Supply-Trade-Grain Act
can find an outlet is to get favourable entry into countries like Germany and France which now have very high tariffs against us. If he wants that favourable entry, he will have to give favourable consideration to imports of commodities we may satisfactorily buy. The whole wheat situation revolves itself around the opportunity Canada has to trade.
Before I sit down, may I say that it is unfortunate-and the minister knows it, as well as I do-that France, Germany and other continental countries subscribe to the system of keeping their statistics on a country of origin and country of destination basis, w'hile Canada, the United States of America and Great Britain subscribe to a system of export and import figures, regardless of the country of origin. Our trade returns of exports of Canadian wheat to Great Britain are invariably larger than is the actual consumption in Great Britain because, on the Liverpool Corn Exchange, she is the greatest jobber of wheat in the world and resells much of the wheat we ship to her. Nothing would be more valuable in computing what our actual British trade is than for the minister to be able to present-and I tried to get the figures but I never was successful-a statement of the actual consumption of Canadian wheat at all times and in all years by the British consuming public. If he were able to find that and show it to tihe Canadian people, 1 think the public would discover that we show very considerable quantities of wheat credited to Great Britain which are going from Britain to Other markets.
So far as this item is concerned, I have no desire to hold it up. I have spoken, indeed, at greater length than I had intended. Phis matter is in the hands of an efficient board. I do not think we need this extra lawyer, buit that is aside and apart, as the minister says now that he is not anxious to retain his services. Members of parliament on this side have joined with members of parliament on the other and great assistance has been given by members of the Progressive group, notably the leader of that group and the hon. member for Bow River, to make the grain act so clear, so plain, that I believe any layman can interpret it. I agree with the hon. member for Melville there are not many lawyers in Canada who are as familiar with the act as are members who sat on the committee on agriculture, and no one knows the act better than does Mr. Ramsay. Our inspection system is almost as close to perfection as perfection can be 
achieved. We have returned to the sensible idea that in order that grain may be handled, it must be hedged on the market. It cannot be taken off the market. I have a distinct recollection of Doctor Magill telling the committee that in 1922. He was right then, and the same thing is true now. Wheat is ripening in some country all the time and the sooner we realize we have to protect our position from day to day and take world market prices, profiting by the years when prices are higher and facing the situation when they are lower, not allowing any carryover to disturb the market, the wiser we shall be as a wheat exporting country. When we realize we can broaden the scope of our market, by entering into trade treaties with countries that can use our wheat, the wheat situation in Canada will improve. It is improving now owing to actual scarcity. I agree with the minister that the situation will improve during the coming season and before long we may be in a much more comfortable position with regard to wheat producing and marketing in this dominion.


Edward James Young: I do not think the minister quite got the drift of my question. He said that there were some 80,000,000 bushels in the hands of the farmers, 69,000,000 bushels at the head of the lakes, 10,000,000 bushels in Vancouver, 10,000,000 bushels in transit and
4,000,000 bushels in the hands of the millers, making a total of 173,000,000 bushels. If there are in Canada 230,000,000 bushels, that still leaves 57,000,000 bushels to be acounted for. Let me explain the object I had in mind: it was to find out how much actual wheat we shall have to sell yet and also how much paper wheat is in the hands of Mr. McFarland on behalf of the government, which wheat will have to be disposed of. If the minister will tell us that, we shall have some light on the question.


Henry Herbert Stevens: I think my hon. friend is wrong in saying "also," because they run more or less concurrently, if I might use that term; the one is complementary to the other; if you have a contract for the delivery of wheat, that means that someone must deliver that wheat to you, and so on.


Edward James Young: If he has purchased options, he lias a contract not to deliver wheat but to
take it.


Henry Herbert Stevens: And of course to pass it
on.


Edward James Young: Yes, to sell it.

Supply-Trade-Grain Act


Henry Herbert Stevens: Certainly. When I spoke before, I spoke entirely from memory. I have now before me from the bureau of statistics the exact situation on March 24, 1933. While the arrangement is a little different from what I gave, it will be accurate and I shall read it as I have it before me:
Stocks. of Grain at Different Elevators during the Week ending March 24, 1933
Bushels
Western country elevators.. ..	109,564,466
Interior private and mill elevators	5,608,863
Interior, public and semi-public
terminals	 3.170,610
Vancouver and New Westminster. 9,990,449
Victoria	 390,134
Prince Rupert	elevator	 301,695
Churchill	 2.430,283
Port William and Port Arthur..	67.274,934
Eastern elevators-lake ports.. ..	14,298,249
Eastern elevators-seaboard ports.	5,840,579
United States	lake ports	 5,758,644
United States Atlantic seaboard
ports	 951,552
225,580,458
That makes a total of 225,580,458 bushels.


Mr. HANSON (Skeena):: Is there any statement with regard to the Prince Rupert government owned elevator?


Henry Herbert Stevens: Yes, a very small amount, hardly worth mentioning, 300,000 bushels.


John Vallance: How long has that been there?


Henry Herbert Stevens: It passes through. They are not shipping very much. It is rather an unfortunate thing that the elevator is there. The situation generally, in my estimation, as the hon. member for North Bruce said a moment ago, is improving because world conditions are improving. There is no question about that. It may be, and I am a bit hopeful of this, that Canada will actually profit by the conditions that seem to be developing throughout the wheat world to-day. The only thing that could intervene to prevent it would be one of those phenomenal crops all over the world simultaneously, such as actually did occur in 1928-29, but that is a most extraordinary and unusual thing to happen. We do not expect it, and so I believe that Canada will actually benefit from this improvement in conditions. I do not know that there is anything that I can add. I do not wish to prolong the discussion, but these facts I think are useful and illuminating and encouraging.


Olof Hanson: The minister said that it was unfortunate that there was an elevator at Prince Rupert. That is a remark that I cannot let pass unchallenged. That
elevator was built in Prince Rupert and taken over by the government. It was built under the pretence by the government of the day that the port of Prince Rupert would be one of the outlets for grain from British North America. For the benefit of the house I wish to state that wheat can be shipped to the Pacific coast more cheaply to Prince Rupert than to any other port on the Pacific coast. I have taken this matter up with the minister and he has given due consideration to seeing that at the next renewal of the lease with the wheat pool a certain amount of wheat shall go through that elevator at Prince Rupert each year. I must, however, challenge his statement that it is unfortunate the elevator is there. I repeat, that it is cheaper to send wheat to Prince Rupert owing to the grade on the Grand Trunk Pacific railway than it is to any other port on the Pacific coast. We have a harbour in Prince Rupert second to none on the Pacific coast from South America right up to Alaska. The minister knows that, and I hope he realizes that as a representative of British Columbia in the federal cabinet he does not represent only one portion of British Columbia but the whole province.


Edward James Young: I really admire the skill of the minister in answering questions, but to my mind he has not cleared up the situation yet. Everybody knows that when the miller is not buying wheat, then in order to have a market at all, wheat is sold to the speculator. Nowr the impression throughout the country is that there will be this year a carry-over of 158,000,000 bushels to be disposed of. That will be sold by Mr. McFarland or by the grain trade. In addition, it is believed that Mr. McFarland carries large numbers of options which he has bought against wheat he held previously and which must still be sold. When the speculator comes into the market to buy, these options will be offered to him in competition with the actual wheat we have to sell. Is that impression which is abroad correct? Are we carrying large quantities of options in addition to the carryover of 158.000,000 bushels of actual wheat?


Henry Herbert Stevens: I do not agree with the form in which the bon. gentleman puts the situation. I will answer as frankly as I can. It is true that Mr. McFarland is carrying a certain number of options, and it is true that there is in Canada a certain quantity of wheat. Obviously w'hen the purchase of Canadian wheat gradually increases, as we hope and feel confident it will, then the trading in wheat will develop and these options can be absorbed by the market.
Supply-Trade-Grain Act

The point I was making to my hon. friend a moment ago was this. He suggested, perhaps not definitely but I gathered that that was his suggestion, that we should get rid of these options as quickly as possible. If we did that, we would break the cash wheat market, which is of course the very thing we ought not to do. You can only sell as the market is able to absorb, and if the pressure on the market exceeds the ability to absorb, the market falls inevitably as night follows day. If we were to do what has been suggested and get rid of these options, the market would fall and it would destroy the world market because Winnipeg after all is perhaps the most influential centre in the world where wheat is marketed, and wheat prices are fixed. Further, the opposite of that is true. When Canadian wheat was pressing on the market during the past couple of years faster than the market could absorb the actual wheat, there was no speculative buying on the market because it was a falling market, and because of disturbed conditions throughout the world. It was then that Mr. McFarland was authorized to step into the market and take up these options. Otherwise the pool would have had to stop buying the farmers' crop and there would have been a disorganization of the whole wheat-selling system of western Canada. The service that has been rendered has been invaluable in steadying the cash wheat market, and those after all are the figures to examine for the real condition-the wheat actually being shipped and the cash sale price in Winnipeg. Those are the most important factors; the rest is adjustment.


Charles A. Stewart: I want to take issue with the minister in that statement which he has made several times in this house. I happen to be on the producing end, and am therefore a seller of wheat. I have to sell my wheat, in the fall. The large stocks of wheat which the government were carrying in the fall when the new wheat came on the market did not help the situation very materially. That was not their fault. But I do point out to the minister that in October and November of last year large quantities of wheat were thrown on the market by Mr. McFarland, and that action broke the price for me and every other producer in Canada. When the minister tells us in the House of Commons that the action of this government through Mr. McFarland in 1932 saved money for the farmers of western Canada, he is telling us something that cannot be borne out by the facts. No matter what Mr. McFarland may have done in 1931, in 1932 he certainly

did not help the situation. He may be helping it now by keeping wheat off the market, but I can name three occasions upon which he threw very substantial quantities of wheat on the market and broke the market by five cents a bushel. That is what happened to me. I am one of those who happened to pay the piper. I began selling wheat locally for 37 cents per bushel. Before I got through the market was at 28 cents, and it went away below that. If wheat will not leave Canada when the farmers of Alberta are getting less than 30 cents per bushel for No. 1 northern, then I do not know when wheat will leave this country. I say, Mr. Chairman, that the work of John I. McFarland and the support of this government of the wheat market was not worth anything this year. It may be that they were in for a very heavy carry-over, and had to get out from under, but when they took action this year they certainly did not help the farmers of western Canada.
I hold in my hand an order in council passed on the twelfth of this month about which I was going to ask the minister. In it the government seek authority to sell grain. I do not know why they ask for that authority because they can sell grain at any time. The order in council renews the guarantees to the banks and to those whom they have been backing. Now they are going to get out of the market. Apparently that is so, if this order in council is correct, because it states:
The minister recommends that the governor in council may at any time fix and determine a date at which wheat producers shall proceed to sell and dispose of all wheat and other grains in its possession or control acquired under the guarantee of the governor in council, and shall proceed to sell and dispose of all contracts, entered into and falling within this guarantee, for the future delivery to it of wheat and other grains.
I cannot see the necessity for such a provision in an order in council, because ordinarily they may sell wheat if they see fit. I do take issue wTith the minister when he states that in the marketing season for 1932 Mr. McFarland and the stabilization fund were worth anything to the farmers.


James J. Donnelly: As I understand it, in 1930 when the pools were in financial difficulties Mr. John I. McFarland was appointed by them to act as the head of their selling agency and to sell the carry-over of wheat from 1929 and 1930. I tried to get from the minister on April 15 of ladt year some idea of Mr. McFarland's activities, and we are still endeavouring to get that information. We have not got it yet. I ask the minister:	How much
wheat was given to John I. McFarland by the

Supply-Trade-Grain Act
pools to sell? That is my first question. That was the office to which he was appointed; that was the job given him to do, namely to sell the carry-over of the pool. First of all we want to know how much wheat was given to him. Next we want to know how much of that wheat he sold; how much has he still left on his hands? As we find that later on, at the instance of the government, he has taken on other activities, we want to know how much future wheat he has bought. How much he has bought for future delivery?


Mr. POWER:: And at how much?


James J. Donnelly: Yes. How much has
he sold, and how much is he still carrying? When we asked the Prime Minister this question last fall we were told that we would be given the information when we reached the committee stage. We are asking for it to-day. The minister comes along now and tells us that had it not been for the activity of Mr. McFarland in the wheat market last year, dear knows what would have happened to the pool. I say the pools were not in any worse condition than the grain trade; they were in the very same position. They were buying and selling wheat from day to day. The minister knows as well as anybody else that because the government was in the grain market, because the government was in on the wheat market, all the small speculators left the market and would not go near it. They were afraid to touch it. The small speculators were driven out, and that is why the government was in. Further, I want the minister to tell me how much Chicago wheat was sold on the Winnipeg market and was bought by the government through John I. McFarland. How much wheat was sold there by Chicago speculators? We are told that the Americans were buying large quantities of wheat in the Minneapolis and Chicago market, which they sold in Winnipeg. How much did they buy and sell? We want to know.


Henry Herbert Stevens: Obviously it is impossible for me to answer the questions the hon. member has asked. In the first place he is mixing two entirely different activities.


James J. Donnelly: I am not mixing them
at all. I have set them out separately and distinctly.


Henry Herbert Stevens: As I recall the facts, the
pools of western Canada-and in this statement I speak subject to correction-the three western pools were associated and operating together in the marketing of their wheat abroad. This was prior to the fall of 1930.
For a great many years they had been successful, as the market had been largely a rising market. Everything worked profitably and I believe satisfactorily. In 1930, difficulties arose in the world market. We will not go into details, but I will make the simple statement that difficulties were experienced iu the marketing of wheat. The three pools, operating through a western pool selling agency-


John Vallance: The central selling
agency.


Henry Herbert Stevens: -secured the services of
Mr. McFarland to act for them. That is an arrangement between the pools and Mr. McFarland, and has nothing to do with the matter.


John Vallance: No, that is not correct
-excuse me for saying so. I think the minister will agree that when John I. McFarland 'took over the central selling agency of the pools it was done on the say so of this government. Only on that understanding, namely that John I. McFarland took it over, would they guarantee the bank.


Henry Herbert Stevens: No.


John Vallance: The Prime Minister
said so.


Henry Herbert Stevens: I am not prepared to
accept that statement. I shall not enter into an argument about iit, but I cannot accept *the statement of my hon. friend. However, the fact is that Mr. McFarland was retained bv the pools for the purpose of managing the selling agency. Synchronizing with that was a request from the pools for assistance, also a request from the provincial government. The pools were in financial difficulties and owed the provincial governments considerable money. If I am not mistaken the amount in question was about $23,000,000, but I speak entirely from memory and am subject to correction. The government did guarantee the banks against that loss. That guarantee is still outstanding, and unless I am very much mistaken the order in council to which reference has been made is one of the renewals of the original transaction.


Charles Gavan Power: With a little more added.


Henry Herbert Stevens: I believe it is a renewal.


James J. Donnelly: Is this the same
guarantee under which hedges are being bought?


Henry Herbert Stevens: I would say this is a
renewal of the original order, and-again speaking subject to correction, because I have

Supply-Trade-Grain Act
no documents before me-is the order under which the purchases are being made under the stabilization scheme.
The hon. member asks me this question: Under these circumstances how much wheat did Mr. McFarland take over from the pools? Mr. McFarland and the government did not take over any wheat. All Mr. McFarland did was to step in and manage the selling agency of the pools, thereby carrying on their business. The government guaranteed the banks against loss in the transaction, thereby making it possible for the banks to continue financing the pools. So far as the government is concerned, that is all that happened. Had we not done so there would have been a liquidation, which would have been one of the worst things that could possibly have happened to western Canada, involving, as it did, all the fixed assets of the pools, such as the elevators and other assets, scattered throughout all four western provinces. The action of the government preserved that situation, and enabled the banks to finance the pools so that business could be carried on in a normal way. They have been carrying on since, and I am convinced that ultimately the pools and the banks of the western provinces will come out of this whole business without any serious loss. I do not think there will be any loss.
Then my hon. friend asked how much wheat he took over. I cannot answer that question, but it is not germane to the discussion. The hon. member also asked how much wheat he sold. He took over whatever wheat they may have had in store at the time and he sold that wheat plus whatever they bought during his term of office.


James J. Donnelly: No, he has not had
anything to do with the wheat since the carryover of 1930. He has had nothing to do with the selling of the 1931 or 1932 wheat.


Henry Herbert Stevens: He continued to act as
manager of the sales agency up to a certain time, but I am not certain of the date.


James J. Donnelly: His term is not ended yet.


John Vallance: Is John I. McFarland
manager of the central selling agency of the pool at the present time?


Henry Herbert Stevens: There is a matter which
introduces itself here which complicates the question very much. The pools split up at some point. My hon. friends have me at a great disadvantage, because I cannot carry in my mind the exact dates, but I believe they split up at the end of the crop year 1930-31.

The pools as such ceased to operate as a central selling agency, and my impression is that this was done at the end of the crop year 1930-31, which would be in July, 1931. Since then the central selling agency has not functioned in regard.to the handling of the wheat crop of the three western pools.


John Vallance: I hold in my hand an
order in council which was passed on April 10, 1933, in which I read:
The minister recommends that the governor in council may ait any time fix and determine the date at which wheat producers-
I presume that means Wheat Producers, Limited, which John I. McFarland has been operating as manager of the central selling agency.
-shall proceed to sell and dispose of all wheat and other grains in its possession or control.
Has the government, the minister or the governor in council taken over that function, previously performed by John I. McFarland, of selling the wheat now held by Wheat Producers, Limited? They have done so, according to this order in council.


Henry Herbert Stevens: This question is too complicated to discuss from memory or on the basis of just one order in council. About two months ago I was informed that there was still some of the 1930 wheat on hand, but I think that is down now to a very small amount. This order in council necessarily must carry through, until the whole operation is completed, the power inherent in the first order in council. That is why the terms of the first order are repeated.


Charles Gavan Power: This is the first time this
appears in any order in council.


John Vallance: The minister has stated already that John I. McFarland was not engaged by the government. Then we find an order in council which says that at any time the governor in council may perform the functions heretofore performed by John I. McFarland.


Henry Herbert Stevens: My hon. friend has misunderstood me. I said that so far as the original contact of Mr. McFarland with the selling agency in 1930 was concerned it had nothing to do with the government, except so far as the hon. member for Willow Bunch and my hon. friend suggest that the government urged that he should be appointed. I am not going to dispute that. I have no knowledge of its being done, though that may be so. The fact of his employment, however, had nothing to do with the government. He acted for the three pools as head of the

Supply-Trade-Grain Act
selling agency, but his appointment did synchronize with the undertaking of the government to guarantee the banks against loss in connection with the operations of the pools at that time. Now there enters another factor, that is, this stabilization of the market.


John Vallance: Before the minister
leaves that point I wish he would correct me if I am wrong in this suggestion:	Was it
not the undertaking of this government that they would guarantee the banks against loss provided Wheat Producers, Limited, would appoint John I. McFarland as manager of the central selling agency?


Henry Herbert Stevens: I would say to my hon.
friend that no such condition was imposed.


John Vallance: Was the guarantee
given before Mr. McFarland became manager of the selling agency?


Henry Herbert Stevens: If my hon. friends will
permit me to say so, if what my hon. friend says is correct I am not trying for a moment to deny it. I would not hesitate to say, "God bless you; you are right." I would not have any objection at all to doing that; I am not objecting particularly, but if I can I should like to be accurate, and I have no knowledge of any such condition having been imposed.


James J. Donnelly: It is a matter of
common knowledge in western Canada that the government had to guarantee the banks in connection with the money loaned the pools, and that before they would give that guarantee they insisted that the pools appoint a satisfactory man to sell this carry-over. Several names were presented from which one was to be chosen. Mr. Brownlee of Alberta was suggested, together with John I. McFarland, and I understood from common report that Mr. Brownlee would not accept. Mr. McFarland did take the position, and it was understood that this was one of the conditions imposed by the government.


Henry Herbert Stevens: Let me make it quite clear. Let us assume that this was a condition. I am not objecting to it at all; I am quite willing to accept responsibility for it, but in order to be accurate I must answer my hon. friend from my own memory, and I do not recall any such condition. So far as I am concerned, however, my hon. friend is quite at liberty to take that position if he wishes to do so.


James J. Donnelly: I am just telling the
committee what is common knowledge in western Canada and I claim that my hon.
friend, as Minister of Trade and Commerce, is in charge of this branch and should know what was done in that regard. This is our only opportunity to get that information.


Henry Herbert Stevens: My hon. friend is not quite correct there. This guarantee to the banks was dealt with by the cabinet, of course, but it had to be handled through the Department of Finance. I had nothing bo do with that pant of it at all.


James J. Donnelly: That may be quite true, but for all that the Department of Trade and Commerce had to look after the marketing of the wheat. What I should like to impress upon the minister, however, is that John I. McFarland's duty was to sell only the carryover of 1929 and 1930; he has had nothing whatever to do with the pool wheat of 1931 and 1932. Anything Mr. McFarland has done in the wheat market since then has been at the instigation of this government, for whom he went in the market and bought futures or hedges; in any case he speculated in wheat, took a flier in the market. There is no doubt about that. You can call it by whatever name you like, but the ordinary man calls it gambling in wheat. I do not know of any other way to gamble in wheat; you can buy and sell futures or you can buy and sell what are called puts and calls, but that is not the common method. The ordinary way is to buy or sell futures. Not long ago the hon. member for Shelburne-Yarmouth accused the government of gambling in wheat, but according to the government there was no gambling at all; it was an extremely conservative form of doing business.


John Vallance: The Minister of Trade and Commerce was one of the delegates who attended the imperial conference of 1930. With him went the Prime Minister, and the advisers in connection with wheat were John I. McFarland, Doctor Swanson and one of the officials now sitting in front of the minister, Doctor MacGibbon.


Henry Herbert Stevens: And Mr. MacPhail, head of the pool.


John Vallance: The minister seems to remember that name well enough. He will remember also that after Mr. McFarland came back from the imperial conference some two weeks elapsed before he took over that position, and I believe it was suggested to him that the government would guarantee the banks only if the pools would accept Mr. McFarland as head of the selling agency. I cannot agree with the hon. member for Willow Bunch, that to-day John I. McFarland is not

Supply-Trade-Grain Act

selling for the pool. If the statement of the hon. member for Willow Bunch is wrong I would like the minister or his official, Doctor MacGibbon, to correct it.


Henry Herbert Stevens: The situation is this. So far as the handling of physical wheat is concerned, Mr. McFarland acted for the pools for the 1930-31 crop year.


James J. Donnelly: Up to August 31.


Henry Herbert Stevens: Yes. There was a carryover at that time. That wheat had to be put on the market in orderly fashion. Had it been put under pressure for liquidation it would have seriously affected the market. So far as I know, the pools at that time broke up through the combined selling agencies. They were now more or less in liquidation in any case; they were in the hands of the banks which were guaranteed by us. Then arose this situation. The pools had to fix their initial price according to their system-we will not bother our heads with just what the price was in different years; it varied and there were some difficulties in that regard. At any rate, they had to pay the initial price. Here again the pools had to go to the banks to get funds to pay that initial price and the government had to guarantee the banks against loss in that respect. The pools desired, as had been their custom in the past, to take all the grain offering by the members; that is the service they are supposed to render their members. Now, the wheat came on in the autumn months under a pressure greater than the fixed credit in the bank would permit them to absorb, and if the pools could not carry that wheat themselves, in their own account in the bank, then they had to sell options on the market in order to recoup their credit in the bank. I must differ with the hon. member for Willow Bunch, or whoever it was that said that Mr. McFarland went into the market and drove -the speculator out. That is not the case. With the general world collapse and the falling market in wheat, the speculator, the so-called purchaser of options, disappeared; he disappeared in virtually all markets and there were not sufficient buyers of futures in the market to absorb the offering. We were consequently again confronted with a possible collapse of the market, and it was then that Mr. McFarland was authorized, some months -after the end of the crop year, to stabilize, that is to say, to take up these futures in order that the pools who were hedging on the market against their physical purchases of farmers' grain might be protected in their bank credits. The result of that operation has been an accumulation.
L'Mr. Vallanee.]
My hon. friend from West Edmonton a moment ago made an analysis with which I will not quarrel, but I would invite him and other hon. members to -try' to see all sides of this story. I will not quarrel with him when he says that the holding last year, in so far as it related to last year's crop, was not of great value, but I would ask him to remember this. Had the weight of the physical volume of the wheat been poured upon the market, and if the carry-over of last year, which was 130,000,000 bushels, had not had someone to carry it, someone who could carry it, then the wheat condition would have been worse than it was. That is the point the hon. gentleman overlooked; he did not give due weight to it. Someone who was financially capable of carrying it had to be found, and we alone could. We are carrying it to-day and, I think, successfully, and I hope that we shall be able to liquidate the situation without serious loss ultimately.


Charles Gavan Power: I wish to read one order in council dealing with this matter, P.C. 2239, dated September 12, 1931:
The committee of the Privy Council have had before them a report, dated September 11, 1931, from the Minister of Finance, submitting that the economic depression prevalent in Canada, in common with all other countries with which Canada has business relations, is intensified in the provinces of Manitoba, Saskatchewan and Alberta by a partial crop failure, and the difficulty of finding a market for the exportable surplus as rapidly as deliveries are made by the farmer of wheat and other grains grown in the year 1931 in these provinces is apparent. There is need, therefore, if unemployment and distress are not to grow greater, not only in these provinces but elsewhere in Canada, of making immediate provision to enable the farmers in these provinces to sell at market rates or secure reasonable advances upon delivery of their wheat and other grains to the marketing agencies possessing the facilities for marketing the crop. These marketing agencies are:
Manitoba Wheat Pool, wtih its subsidiary, Manitoba Pool Elevators, Limited.
Saskatchewan Cooperative Wheat Producers, Limited with its subsidiary, Saskatchewan Pool Elevators, Limited.
Alberta Wheat Pool, with its subsidiary, Alberta Pool Elevators, Limited; but they, while possessed of a certain amount of cash, do not possess adequate financial resources warranting banking advances that will probably be necessary. Representations have been made by the respective provincial governments. already burdened by obligations arising out of the marketing of the 1929 crop, for assistance from the government of Canada.
The committee, therefore, on the recommendation of the Minister of Finance, advise that repayment of advances made by any chartered bank to any of these marketing agencies, and interest thereon as may be agreed upon between the banks and such marketing agencies in connection with and for the purpose

Supply-Trade-Grain Act
of marketing said wheat and other grains, be guaranteed by the governor in council under the authority of the Unemployment and Farm Relief Act, 1931, under the conditions and to the extent hereinafter mentioned, to wit:
Then it refers to each of the wheat pools and goes on:
(d)	That security upon the wheat and other
grains be	taken	by the	banks under	the
provisions of the Bank Act;
(e)	The	extent	of	the	guarantee shall	be
limited to the maintenance at all times of a fifteen per centum margin in the securities so taken.	.
When, in the usual course of accounting and auditing from time to time, it is ascertained that the	margin	of	fifteen per centum	is
impaired, the liability under the guarantee of the government to the several banks shall accrue.	.
The committee	further	advise that in	the
event of impairment as above set forth further advances, under this guarantee may thereafter be made by the banks, the total not to exceed the respective credits originally established by the banks for the respective marketing agencies unless and until the Minister of Finance makes further arrangements with the banks for additional credits if such be required.
The committee further advise that payment under this guarantee shall be made out of the consolidated revenue fund for the respective balances, if any are owing after the marketing agencies have sold and realized upon all or practically all such wheat and other grains in their possession or control and application of the amounts realized, less expenses, has been made against bank advances and interest, and thereupon the governor in _ council, on the recommendation of the Minister of Finance, shall determine the date at which payments are to be made in pursuance of this guarantee.
That is one order in council. There was another one dated September 28, 1931, and others, a large number of them, down to the latest, April 10, 1933. Now, it is nearly two years since this first order in council was passed and we have never been able to ascertain from the government exactly what the extent of their guarantee was. I do not care whether it was McFarland or anyone else, the government has backed, endorsed and permitted people acting on its behalf to gamble in wheat. It does not matter whether you call it buying hedges or buying futures, they gambled in wheat. They dealt in a commodity they did not have. They bought options for the future delivery of wheat. Very early in his regime the Prime Minister brought Sir Josiah Stamp over from England to find out whether it was moral to deal in futures. I am not sure that at the very time Sir Josiah was investigating this matter the government was not playing the market. I do not know whether the Prime Minister's conscience was bothering him after he started to deal in wheat, but the fact is that an Englishman was brought over here to tell us 53719-253J
that it was permissible and perhaps a good thing to gamble in wheat. I do not think that is sufficient justification for any government to take the money raised by the taxpayers and throw it into the wheat pit like any vulgar speculator. That is what happened.
But there is something still worse than that. Either through incompetency, a lack of the knowledge of finance or for some other reason, we have never been able to find out just where they stand. Many of us gambled in the stock market and we were always able to find out from our brokers just where we stood. We were called for margins upon all occasions and the government must have been called for similar margins. The minister shakes his head but I should like to know if they were not called upon for margins when wheat went to thirty-eight. If they were dealing with brokers and they were not told that their guarantee called for such and such an amount of money, then they had a blanket guarantee. The wheat market is really worse than the stock market as far as gambling is concerned. Lord knows, most of us know how bad the stock market was. We bought Nickel on margin and we bought Auburn automobile, which I consider to be about the worst gamble, on margin, but we knew the condition of our accounts. If rumours are correct this government has been speculating in hundreds of millions of bushels of wheat and they are not able to tell the taxpayers the extent of their gamble. That seems to me to be an unfortunate situation. Apparently there is no accounting to parliament. To the ordinary person who does not know anything about wheat the explanations given as to the wheat pools and Wheat Producers, Limited, and so on are more or less incomprehensible. However, everyone does know that when you play a market, whether it be the stock market, the mining market or the wheat market, you are able to find out whether you are ahead of or behind the game. The taxpayers have never been able to find out from the government just where they stood.
We are told that because of conditions in other countries we may have a win on our gamble, but is -that any justification for the action taken by the government? Any bank clerk absconding with a bank's funds can always say: if -I had continued to gamble I would have been able to make restitution. But that does not save him from criminal prosecution. To-day the minister told us with a certain amount -of pride: we are going to get out and we may make some money. I do not know of any gambleT who does not think the same thing. Everyone in the world
Supply-Trade-Grain Act

Who goes into a gamble believes he is going to make some money but that is no justification from the moi'al or economic standpoint. It looks ias though we may make some money out of it because this last order in council says that the governor in council may at any time fix and determine the date at which Wheat Producers shall proceed to sell and dispose of all wheat and other grains in its possession or under its control acquired under the guarantee of the governor in council. There must be a very intimate relationship between Wheat Producers and the government if the government can by order in council older Wheat Producers to sell. If it was an ordinary transaction of guarantee I do not think they would have the right to order them to sell, but here they say by order in council: you must sell. In order te>
be able to do that, Wheat Producers must be the agents of the government. I cannot interpret it in any other way.


Henry Herbert Stevens: Is it not reasonable where one party guarantees another that there should be some safeguarding power so that they can at any time force, if you like, the one guaranteed to liquidate?


Charles Gavan Power: Surely, and I am not complaining about .that.


Henry Herbert Stevens: It is a reserve power.


Charles Gavan Power: What we have heard all
through has been the statement that the government are not in the market, that they are merely giving a guarantee; but I am trying to show that if they can give an order to 'their agents to go ahead and sell, they possibly gave .an order to go ahead and buy. If they gave an order to go ahead and buy, it was gambling. I do not see any other interpretation that can possibly be made of this action. If they can tell them they must sell, .they can give them an order to buy. If they gave them an order to buy stuff to be delivered at a future date When they did not know the price, it was gambling.


Mr. DUFF:: Who will get the profit, if
there is any?


Charles Gavan Power: I assume the government
will.


William Duff: Then they are not guarantors, they are in the deal.


Charles Gavan Power: They are in the deal and
they were up to their necks when the price was thirty-eight. The order in council reads: "application of the amounts realized," that is the swag from the gamble, the kitty. It continues:

Application of the amounts realized, less expenses, shall be made against such advances and interest, and thereupon the governor in council, on the recommendation of the Minister of Finance, shall determine the date at which payments are to be made in pursuance of this guarantee.
If we are lucky we may get a little money for unemployment relief, and that will not be such a .bad idea. We would have as much chance to relieve unemployment through gambling as we would have through some of the other policies of the government.


Mr. SPEAKMAN:: It is just as good as
a sweepstake bill for hospitals.


Charles Gavan Power: At any rate I stated its
purpose quite frankly. There was no hypocrisy about it, I admitted it was gambling. The final paragraph of .the order in council of April 12, 1933, reads:
The minister finally recommends that should the Relief Act, 1933, expire and no renewal or further extension of the powers therein contained be then exacted, and any portion of such advances or interest to wheat producers be unpaid to the said banks, wheat producers shall pi'oceed to sell and dispose of all wheat and other grains, if any, in its possession or control acquired under the guarantee of the governor in council and shall proceed to sell and dispose of all contracts entered into and falling within the guarantee of the governor in council for the future delivery to it of wheat and other grains. Application of the amounts realized, less expenses, shall be made against such advances and interest, and thereupon the governor in council, on the recommendation of the Minister of Finance, shall determine the date at which payments are to be made in pursuance of this guarantee.
I am not quite sure just what that means, but it looks as though when the Relief Act, 1933, is about to expire the government will be able to come to us and say: Unless you pass this act at once we are going to dump so many million bushels of wheat upon the market, and think what the results will be in western Canada! I cannot see any other reason for it. They are going to order the sale of this wheat before the Relief Act expires, and if it does not, apparently the wheat will have to be disposed of.
There is one other point: I have not the order in council before me, but perhaps the minister cau give some explanation of it. It is an order in council passed a month or so ago. dealing with advances made to farmers. It is all mixed up and rather confused in the minds of those who are not familiar with the wheat situation. It relates that an advance of thirty-five cents has been made under the pool plan as an initial payment to the farmers. It goes further and relates that it is not likely that any additional payment would be justified. Then it says further that even

Supply-Trade-Grain Act
though such additional payment may not be justified, the government authorizes an interim payment of five cents a bushel to persons who have delivered their wheat under the pool plan and that such wheat amounts to about 13,000.000 bushels. As I interpret this order in council, it means this: that people in western Canada who were hard pressed for money last fall and sold their wheat outright will receive only the amount which they got at that time; that those who were able to hold their wheat and carry it according to the pool plan, received an initial payment of thirty-five cents and will now be given five cents more than the men who were so hard up that they had to sell. If that is the wrong interpretation, I shall be glad to get an explanation from the minister.


Henry Herbert Stevens: The hon. member is not quite correct in his interpretation of that last order in council. It will be understood very readily by all western members and, I think, by most members, that in the operation of the wheat pool system, the pool at the commencement of the season makes an estimate, which is usually supposed to be verj' conservative, of what wheat will bring throughout the season. Then for its initial payment, it fixes a price with a safe margin below that estimate. During all the years of the operation of the pool, with the exception of one or two in these very recent years of distress, the market upheld the expectation. The consequence was that the intial payment was invariably followed by one, two and, I think in some cases, three subsequent distributions. The final distribution would not occur until the pool had disposed of that particular crop year's purchases. In the instance my hon. friend has mentioned, the pool fixed a price of thirty-five cents.


Charles A. Stewart: What year?


Henry Herbert Stevens: That would be for the current crop year.


John Vallance: At the head of the lakes.


Henry Herbert Stevens: Well, at the point where it is always fixed, thirty-five cents at the head of the lakes, but that is standardized. Then later in the season, had they been free of any obligation to the government, they would of their own volition have made a second payment, a dividend as they call it, if they had earned that dividend in the sale of their grain. In this case they had earned that dividend, but they could not pay it without authority of the governor in council because of the various guarantees against them. *


Charles A. Stewart: The guarantee of 1931 is still the guarantee?


Henry Herbert Stevens: The original guarantee.
The point I would like the committee to grasp is this: If the government had wished, let us say, to be exceedingly exacting, they might have refused and said: Until you liquidate the original guarantee, that is the one which protected their elevators, their other property and all the rest of it, we will not authorize a further dividend. But that would have been obviously unfair, because that guarantee is being liquidated by a long process and over a long period of time. So the governor in council permitted the pool to pay a dividend in this case, and I think it was a fair and proper thing to do, wholly in the interests of the farmers.
Let ms turn to my hon. friend's rather lengthy, humorous


Charles Gavan Power: I was quite serious at that time.


Henry Herbert Stevens: -and fairly reckless dissertation of a few moments ago. This matter is not just a cheap gamble.


Charles Gavan Power: It is a very extensive one.


Henry Herbert Stevens: It has nothing to do with ordinary gambling in the markets. This is a very serious matter and it amounts to this: There are two ways in which this wheat can be marketed; one way is the elimination of the grain exchange in Winnipeg and the physical wheat to be offered for sale and purchased as the purchasing market will absorb it. If that method were resorted to in Canada you would have a pressure of Canadian wheat, in the world market in the autumn months-As long as the market is such that it can absorb that pressure, Canada's returns will be the fair world market value. But at the' present time and for the last four years in particular-and the same may be said of previous periods of time

nothing but chaos and disaster would have resulted to the Canadian seller of wheat had that course been followed. There is no escape from that.
What is the other method? It is that which has grown up over a long period of years. I remember, and my hon. friends in the far corner opposite will remember, that many a time in the committee on agriculture this point has been raised and debated. We have urged the farmers to hold their wheat back and to feed it more slowly into the market. That is fine in theory, but the farmer must pay his taxes; he must put in his stock of food and so on for the winter. So he presses his wheat on the market in the fall. This is his practice and there is no
4U08
Supply-Trade-Grain Act

need of our questioning whether he is wise or the reverse; he does this. If he presses his wheat on the market and there is no one to buy the futures, to hold them and to carry them forward for a period of three or six months as the case may be, I believe the market will break. What the grain exchange does is this: it permits buying for later delivery by those who desire to use the wheat later on, for instance, milling companies which want delivery in May, or people who are bona fide exporters, who want to anticipate foreign requirements over a period of months, or speculators. It must be borne in mind that it is not only irresponsible speculators who buy futures. Let us not for a moment get that idea.


Charles Gavan Power: We know that.


Henry Herbert Stevens: We know there is the
element of the irresponsible speculator, but there is the exporter who is providing for his normal requirements over the whole period and there are the milling companies and other agencies which are bona fide dealers in wheat. They come forward and carry this wheat during a period of time that permits the farmer to dispose of his wheat for cash and by that system and the negotiation of those contracts in the banks bona fide concerns and speculators are enabled to carry those futures over a long period of time. It was to perform that function in part that the government authorized this purchasing of futures to which my hon. friend has referred.
I want to emphasize again, as I did before, that it is a matter of opinion whether the government should or should not have done it, but it is not open to question that in doing it they rendered a service to the market. I wonder if my hon. friends, particularly my hon. friend from Willow Bunch and hon. members from Saskatchewan, Alberta and Manitoba, would take the opinion of those responsible for the operation of the big wheat pools of western Canada.


James J. Donnelly: No.


Henry Herbert Stevens: I suppose not.


William Richard Motherwell: They were in a
position where they had no say in the matter.


Henry Herbert Stevens: I have just been given
to understand that it is desired that the committee rise and report progress, and I now move accordingly. We shall have to continue the consideration of these estimates at some future time, but I do ask hon. members of the committee to give thought to the welfare of the pools in whose interest and support this operation was carried on.

Progress reported.
On motion of Mr. Bennett the house adjourned at 5.45 p.m., until Tuesday, April 18
Tuesday, April 18, 1933