1933-02-01

[Stage Direction]
A message from His Excellency the Governor General transmitting estimates for the financial year ending March 31, 1934 was presented by Hon. E. N. Rhodes (Minister of Finance), read by Mr. Speaker to the house, and referred to the committee of supply.

[Stage Direction]
Bill No. 16, respecting the Synod of the Diocese of Saskatchewan and to change its name to "Synod of the Diocese of Saskatoon."-Mr. Mackenzie King.
Bill No. 17, to incorporate Canadian Railway Employees Mutual Benefit Association. *-Mr. Casselman.

Western Freight Rates

Hon. MURRAY MacLAREN moved:: That the report of the committee on the administration of the Pension Act be printed, six hundred copies in English and three hundred copies in French.


[Stage Direction]
Motion agreed to.


Hon. R. J. MANION (Minister of Railways and Canals):: Mr. Speaker, yesterday I
promised to make to the house a very brief statement concerning domestic freight rates, and particularly concerning the relation of that matter to the bill standing in the name of the 'hon. member for New Westminster (Mr. Reid), and the resolution in the name of the hon. member for Qu'Appelle (Mr. Perley). At various times other hon. members from the western provinces have asked questions concerning this matter. May I point out that during the interprovincial conference a meeting was held at which were traffic representatives of the two railway systems, and two representatives from each of the four western provinces, with the exception of British Columbia. On account of Doctor Tolmie's loss there was only one representative from that province. The Minister of Agriculture (Mr. Weir), and myself, attended the meeting, and there was an endeavour to arrive at some satisfactory solution of the difficulties, and to formulate at least a compromise among the different parties concerned.
As a result of the conference a satisfactory arrangement was arrived at. Although I do not intend at this time to give details, I may say that after a lengthy discussion, a proposal was made by myself to cut the domestic rate materially on the lower grades of grain- feed grain. The intent was not to get the rate as low as the export rate, but to cut it materially. That suggestion was satisfactory to the representatives of the four western provinces, as expressed by them at that time, and in a general way was acceptable also to the representatives of the railways, who agreed to take the matter under advisement and to submit to me a letter officially offering to put into force the rates proposed on the lower grades of grain, or that type known as feed grain. This would affect particularly the poultry raisers. From the information we have received the greatest number of complaints concerning the freight rate between the prairie provinces and British Columbia had come from the poultry raisers.


Mr. HANBURY:: There is no dispute between the prairie provinces and British Columbia; it is between eastern Canada and British Columbia.


Robert James Manion: I refer to the dispute between the western provinces and the railways. The railway representatives were to receive from the Department of Agriculture a list of the lower grades of grain which could be used for feed purposes, and some time was required to get this information. Unfortunately one of the representatives, the traffic manager of the Canadian Pacific Railway, Mr. Stephen became ill and as a consequence the proposal has not been placed in my hands, but it is my expectation that within a day or two I shall receive it. At that time I shall send it to the representatives of the provinces. They are to deal with it, and if it is acceptable to them they will advise me and the new rate will be put into effect.
In view of the proposed compromise arrangement I suggest to the hon. members for New Westminster and Qu'Appelle, and to any other hon. members interested that they might well leave the matter in abeyance until we have had the opportunity to get replies from the western provinces.


Mr. REID:: Could the minister give any
information of what reduction might be expected?


Robert James Manion: I did not intend to give
exact information, although I can think of no objection to stating that it will be in the neighbourhood of a fifty per cent reduction of the difference between the domestic and export freight rates. That arrangement was acceptable to the representatives of the four western provinces. They considered it a very fair proposition, and they appeared to be particularly pleased with the proposed compromise arrangement.


Mr. HANSON (Skeena):: Will that affect
other commodities?


Robert James Manion: We dealt only with lower
grades of grain for feed purposes, and particularly considered the interests of the poultry raisers.


Thomas Reid: Mr. Speaker, may I be pardoned for asking a question at this point? I ask the Minister of Railways and Canals or the Prime Minister what attitude the government will take regarding the appeal before the Privy Council?


Mr. SPEAKER:: Order.


Thomas Reid: I was asking the indulgence
of the house.
168C
Questions


Pierre Édouard Blondin: This is not the proper
time to introduce a discussion such as the one proposed by the hon. member.



RAILWAY ACT AMENDMENT

[Stage Direction]
Mr. THOMAS REID (New Westminster) moved for leave to introduce Bill No. 18, to amend the Railway Act (rates on grain).
Some hon. MEMBERS:: Explain.


Thomas Reid: The purpose of this bill is
to give to British Columbia the same rates on grain as were given by parliament to the eastern provinces.
Motion agreed to and bill read the first time.



QUESTIONS

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

Mr. SPENCER:: 1.	Are any charwomen employed in the House of Commons receiving pension, as widows, from the United States Army and Navy Department, Washington, District of Columbia?
2.	If so, how many, and how' long have these charwomen been employed?


Pierre Édouard Blondin: Dropped.


Mr. SPENCER:: I should like to say, Mr. Speaker, that I do not understand why the question has been dropped.


Pierre Édouard Blondin: I understood information had been supplied to the hon. member by the Clerk of the House.


Henry Elvins Spencer: I received a letter, but
it is not satisfactory to me.


An hon. MEMBER:: Stands.


PAYMENTS TO SHIPS CARRYING LUMBER
Mr. DUFF:: 1.	What amount has been paid by the Dominion of Canada to ships carrying lumber from British Columbia ports?
2.	Was the said amount paid on the basis of one dollar per thousand superficial feet?
3.	To what ports of destination was said bounty or bonus paid?
4.	Has any amount been paid for the carriage of lumber from Atlantic ports, on a basis of so much per thousand superficial feet?


Mr. STEVENS:: 1.	August, 1929, to December, 1932, inclusive, $268,950.
2.	No.

3.	To Sydney, Melbourne and other Australian ports or to Shanghai, Hangkow and other north China ports.
4.	No.


COPPER, NICKEL AND SILVER COIN HOLDINGS
Mr. REID:: 1.	What are the various amounts of copper, nickel, and silver coin held by the Department of Finance in the right of the Dominion of Canada or as collateral for bank issues?
2.	What were the total amounts of copper, nickel and silver coins issued by the Mint during 1932?
3.	Were any gold coins minted during 1932?
4.	If so, to what value were these minted?


Mr. RHODES:: 1.	Issuable silver, nickel and bronze coin held by the Department of Finance:
Silver	$258,960
Nickel	 53,290
Bronze	 17,700
2.	Silver, nickel and bronze coin struck by the Mint during 1932:
Silver	$287,000
Nickel	 165,000
Bronze	 213,200
3.	No.
4.	Answered by number 3.


ALFRED, ONT., MAIL DELIVERY
Mr. BERTRAND:: 1.	Did the contract for mail delivery on rural route No. 2, Alfred, Prescott county, expire on December 31, 1932?
2.	If so, to whom was the renewal of the contract, granted?
3.	Were any tenders called for?
4.	Who were the tenderers and what was the amount of each tender submitted?
5.	Is the successful tenderer now performing the work?
6.	What sum will be paid to him annually for his services?


Mr. SAUVE:: 1. Yes.
2.	Department did not grant a renewal.
3.	Yes.
4.	Per
annum
H. Charette, Alfred	$475
Joseph Seguin, Alfred	   480
Ovide Lepage, Alfred	   490
H. Charette, Alfred	 595
Geo. Bourgon, Alfred	   600
Alfred Lariviere, Alfred	 645
Dolplie Larocque, Alfred	 675
Joseph Rourcder, Alfred	 750
Arthur Poirier, Alfred	 750
5.	Yes.
6.	$475 per annum.

Cooperative Commonwealth-Mr. Woodsworth


QUESTION PASSED AS ORDER FOR RETURN
Mr. BOURGEOIS:: 1.	How many persons have received direct relief during the twelve months preceding the first of October, 1932, in each of the following cities: Montreal, Quebec, Three Rivers, Sherbrooke, Hull, Ottawa, Windsor, Stratford, Peterboro, London, Kitchener. Brantford, Halifax, Moncton, Saint John, N.B., Winnipeg. Brandon, Victoria, Vancouver, Edmonton, Calgary, Regina, Saskatoon?
2.	What sums were distributed by way of direct relief in each of these cities during the aforesaid period and what sums for food, rent, fuel, clothing, medical treatment, etc.?
3.	Was the portion contributed by the federal government the same in the case of each of the above-named cities, and if not, what is the difference?


MOTIONS FOR PAPERS
Mr. WOODSWORTH:: For a copy of all correspondence, including letters, telegrams and other documents, exchanged between the Minister of Immigration. or any of his officials, and Mr. J. M. Hackney of St. Paul, Minnesota, and other persons, regarding the release of Peter Verigin, or the proposal to remove the community Doukhobours to Mexico.


POTATO EMBARGO
Mr. MacLEAN:: For a copy of all correspondence, letters, telegrams and other documents that have passed between the Canadian government and the government of Great Britain, regarding the lifting of the potato embargo, including report of British officials who visited Canada in the fall of 1932 in connection with potato embargo questions, and the possibility of the potato beetle being transmitted in potato shipments.


COOPERATIVE COMMONWEALTH
[Stage Direction]
Mr. ,T. S. WOODSWORTH (Winnipeg North Centre) moved:
Whereas under our present economic arrangement large numbers of our people are unemployed and without the means of earning a livelihood for themselves and their dependents;
And whereas the prevalence of the present depression throughout the world indicates fundamental defects in the existing economic system;
Therefore be it resolved,-That, in the opinion of this house, the government should immediately take measures looking to the setting up of a cooperative commonwealth in which all natural resources and the socially necessary machinery of production will be used in the interests of the people and not for the benefit of the few.
He said: All down through the years there have been those who dreamed of a new and better social order. I do not know that it was
ever better expressed than by our own English poet Blake, who would give us no respite until "we have built Jerusalem in England's green and pleasant land." Prophets have foretold the coming of a better day. Great economists have pointed out that our present economic system could not last very long, but must give place to a different one. In more recent days we have the technicians pointing out not only the feasibility of fundamental changes in our social order, but the absolute necessity of such changes if our civilization is to persist.
It is only the newer groups, however, that have had the courage to set this before the country in the form of a definite program. When the Independent Labour party was first represented in this house in 1921, we placed in the very beginning of our platform the following:
The Independent Labour party of Manitoba is formed for the purpose of giving political expression to the aspirations of all workers regardless of industrial affiliation, who believe in the establishment of a cooperative commonwealth, with production for use and not for profit as its economic basis.
As far as opportunity offered I have tried through the years to keep that object definitely in view. Last year the United Farmers of Alberta, in order that there should be no doubt about their ultimate objective, stated their position in very clear terms, adopting the following short definition of a cooperative commonwealth:
A comniunity freed from the domination of irresponsible financial and economic power, in which all social means of production and distribution, including land, are socially owned and controlled either by voluntarily organized groups of producers and consumers, or-in the case of the major public services and utilities and such productive and distributive enterprises as can be conducted most efficiently when owned in common-by public corporations responsible to the people's elected representatives.
When I introduced this motion a year ago there was no large body of organized opinion behind it. Today that situation is altered, for last August there was organized the Cooperative Commonwealth Federation-
[Stage Direction]
a federation of organizations whose purpose is the establishment in Canada of a cooperative commonwealth in which the basic principle regulating production, distribution and exchange will be the supply of human needs instead of the making of profits.
The statement given to the public at that time, and embodied in resolutions by the Cooperative Commonwealth Federation, goes on:
The object of the federation shall be to promote cooperation between the member organizations and to correlate their political activities.
1688	COMMONS
Cooperative Commonwealth-Mr. Woodsworth
We endorse the general viewpoint and program involved in socialization of our economic life as these have already been outlined and accepted by the Labour, Farmer and Socialist groups affiliating.
I may say that a considerable number of organizations have already affiliated with the Cooperative Commonwealth Federation-
Mr. BENNETT:: Might I ask the hon. gentleman a question before he leaves that phase of his argument? What would he do with the constitution of the country as it now stands?


James Shaver Woodsworth: The constitution of the country I presume would remain as it is to-day.


Richard Bedford Bennett: It could not.


James Shaver Woodsworth: It is the Prime
Minister's option to explain the matter in his own way. I would say that if changes are necessary in order to meet the needs of the people, then those changes must inevitably come.


Richard Bedford Bennett: The hon. gentleman misunderstood me. It would mean the entire wiping out of the present federal system, if effect were given to what has just been said.


James Shaver Woodsworth: No, Mr. Speaker, that is not correct. I would point out further that this new organization is a federation rather than a party. The farm bodies in the three western provinces and in Ontario have already voted to affiliate. Further than that, the political labour bodies in the provinces from British Columbia to Montreal have also voted to affiliate. And in addition a very large number of people who have been outside the ranks of farmer or labour political parties are now joining Cooperative Commonwealth Federation clubs, and will in this way come into the federation.
May I say that the name is descriptive of the basis and purpose of the new organization. It does not advocate a bureaucratic state socialism. We recognize very clearly that there are certain matters which must be dealt with by the state; there are other matters that may be left to voluntary cooperative effort. We clearly emphasized that in one of the planks of our platform, if I may use that term-the encouragement of all cooperative enterprises which are steps to the attainment of the cooperative commonwealth.
The Prime Minister, who has already voiced his objection thus early in my speech, gave a rather curious reception to the new organization. In his speech in Toronto last NovemfM*\ Woodsworth.!
ber, as reported in the Mail and Empire of November 10, 1932, he said:
The "swing to the left" behind Mr. Woodsworth is towards a government soviet in its character. ... It is no longer a party but a jumble, being led by a cooperative commonwealth. Why? Because they seek to capitalize all the unrest that exists.


Some hon. MEMBERS:: Hear, hear.


James Shaver Woodsworth: The Prime Minister or the Conservative party ought never to talk about capitalizing unrest.


Mr LAPOINTE:: In this he is right I


James Shaver Woodsworth: The Prime Minister goes on:
What do they offer you for dumping you in the mud? Socialism, communism, dictatorship.
. . . They are sowing their seeds everywhere. . . . And we know that throughout Canada this propaganda is being put forward by organizations from foreign lands that seek to destroy our institutions. And we ask every man and woman to put the iron heel of ruthlessness against a thing of that kind.


Some hon. MEMBERS:: Hear, hear.


James Shaver Woodsworth: There are some hon. gentlemen behind the Prime Minister who applaud.


An hon. MEMBER:: A lot of them.


James Shaver Woodsworth: I want to say to the Prime Minister that his statement is not only libellous, but it is clearly seditious.


Mr. LAPOINTE:: Does that come under
section 98 of the criminal code?


James Shaver Woodsworth: No, it comes under sections which are much more fundamental to the welfare of this country than section 98. It is setting one class against another. It is advocating the use of force, and as such I say that it is clearly seditious, and further it is absolutely untrue. I wonder what would be suggested if I should advocate putting the iron heel of ruthlessness on all capitalists?


Mr. GARLAND (Bow River):: On the neck of the Prime Minister.


James Shaver Woodsworth: Or, as has just
been suggested to me, on the neck of the Prime Minister? I am quite sure that certain sections of the criminal code would be immediately invoked. In all seriousness I think it is beneath the dignity of the Prime Minister to make a speech of that kind. The Prime Minister is very fond of quoting scripture. May I venture to recall to his memory a certain passage in which the one whom he calls the Man of Nazareth says "with what measure you mete, it shall be measured to you again."

Cooperative Commonwealth-Mr. Woodsworth
I may say that the Cooperative Commonwealth Federation has no connection what-;ver with Moscow-none whatever.


Some hon. MEMBERS:: Oh, oh.


James Shaver Woodsworth: If some of the
gentlemen who say "oh" would have the courage to get up and make the statement that their interjection implies, they would have to retract. It is all very well for men hiding behind high positions to make baseless allegations against other citizens of this country, but the least they can do, is to prove their allegations, and the Prime Minister has the whole secret service at his disposal to try to prove his. The Cooperative Commonwealth Federation is an indepedent organization, and it is preposterous-


Some Hon. MEMBERS:: Hear, hear.


James Shaver Woodsworth: -that the labour men of this country from coast to coast, and further, the organized farmers in the four great provinces, should back an organization of that kind only to have it suggested that it emanates from Moscow. The Conservative; say that. On the other hand, the Liberals say that it is a Tory trick. You caD take your choice.
Let me say that we must distinguish clearly between the Cooperative Commonwealth Federation and communism. It is quite true that both believe in a changed social order, in a new economic system. The communists are convinced that this can be brought about only by violence. They think it cannot be done in any other way. We believe that it may come in Canada by peaceful methods and in an orderly fashion, and that is the purpose of this organization.


Mr. MORAND:: The end being the same.


James Shaver Woodsworth: It may very well
be that force may prove inevitable, yes, if the attitude of certain gentlemen is persisted in and the people of this country are denied the right that they have to self-expression and to the enjoyment of a decent livelihood.
Mr. GARLAND l Bow River): Even the right to work is denied them.


James Shaver Woodsworth: I note that the
Vancouver Daily Province in its .ssue of December 6, said this:
The answer is that you cannot effect such a revolution at once, if at all, wi*h >ut force and violence. You cannot destroy coupon clipping *without tearing down the intricate and allinvolving structure of capitalism, and you cannot do that without misery and universal suffering and injustice and tyranny.
Well, if many take the position that we cannot do this thing constitutionally, and 53719-107
behind it is the threat that it will not be permitted to be done constitutionally, then none of us can answer as to what may actually take place. We in our group are out to try to bring about the end in view by peaceful and orderly methods.
The Prime Minister goes on to say:
Remember the words of the Man of Nazareth, "the poor we have always with us." Nineteen centuries have passed, but it still is so.
It seems to me, Mr. Speaker, positively sickening that a wealthy man should stand up and lecture poor people in that fashion. Only a week ago, when I was addressing a iarge meeting of unemployed married men in Calgary, the Prime Minister's own city, I thought how insufferable it was that the Prime Minister should talk to these men in that fashion and offer them that kind of moralizing, when he himself enjoys bis own wealth because of certain social arrangements, and when his policies, in the judgment of a great many people of this country, have done much to bring about the impoverishment of these poor people.


An hon. MEMBER:: What have you done for this country?


James Shaver Woodsworth: I would appeal to
you, Mr. Speaker, for order. I am, I think, within my rights. Certain gentlemen are constantly interrupting and I would appeal to you that they either leave the chamber or be silenced. As a matter of fact, I do not think the Prime Minister is interpreting scripture in accord with the interpretation of a great many of the most eminent theologians. May I venture to quote a paragraph from a very interesting pamphlet, Catholic Principles and the Present Crisis, issued by the Reverend John A. Ryan, D.D., in which he says:
We cannot perm:, millions to starve in this land of plenty nor can we afford to unleash the forces of savagery and revolution. In the extreme predicament that is closer to us than we like to contemplate, there is another Catholic principle which is pertinent and adequate. It was .-.rated by Pope Leo XIII in an Encyclical On the Condition of Labour: "Whenever the general interest or any particular class suffers or is threatened with injury which in no other way can be met or prevented, it is the duty of the public authority to intervene."
Father Ryan goes on to say:
If for any reason the public works remedy fails, the public authorities will be under moral obligation to take temporary charge of and operate our essential industries, not only for the benefit of our most distressed classes but in the interest of the whole community.
Showing the bankruptcy of capitalism in this crisis, may I quote a paragraph from

1690	COMMONS
Cooperative Commonwealth-Mr. Woodsworth
Hjalmar Schact, until lately president of the German Reichsbank, who in a recent book said :
Never was the incapacity of the economic leaders of the capitalist world so glaringly demonstrated as today. A capitalism which cannot feed the workers of the world has no right to exist. The guilt of the capitalist system lies in ite alliance with the violent policies of imperialism and militarism. The ruling classes of the world today have as completely failed in political leadership as in economic.
We believe that the first step to be taken in bettering the present conditions is to adopt a planned economy. During the war, when the lit e of the nation was considered to be at stake, there was very careful planning not only within our own country but as between the allied nations, and rationing was carried out to a very considerable extent. Within the nation as a whole, however, we normally have permitted anarchy to reign; we have had overdevelopment in some lines and underdevelopment in others. Take our pulp and paper as an outstanding example of the absence of any definite plan-overcapitalization and overdevelopment of every kind going on until even Saturday Night describes the power project as a racket.
I do not need to dwell on this; it is known to everyone. Moreover, we have had manipulation of credit which has played serious mischief with our whole economic system and has transferred hundreds of millions of dollars from one set of pockets to another. Further than that, we have had no relationship existing between distribution or consumption and producticn It is obvious that our machine must slow down unless the people can buy whac is produced Had I time I could easily give a great many quotations from recognized authorities on this point.
One of the most recent pronouncements was contained in a resolution passed by the international labour organization. Mr. P. W. Martin, summarizing the conference resolution, says:
By means of the special financing of public works, it aims at increasing the volume oi buying-the fundamental condition of any improvement in the economic situation. By insisting upon monetary stability it provides for tile essential measure which must accompany any such increase in the volume of buying, viz., adequate safeguards against undesirable price inflation. By laying down that the achievement of monetary stability must be international ir, scope it makes the necessary basic provision for the achievement of exchange stability Finally by drawing attention to the need foi non-nionetary measures, the adoption of which would be facilitated by the monetary measures already considered, it opens the way to international action for adjusting production to consumption and removing the barriers to inter-
[Mr. Woodsworth.J
national trade. . . . For the irrational forces which at present control business activity it proposes to substitute a process better adapted to modern conditions; conscious adjustment of the volume of buying, so as to provide an adequate outlet for the whole product of industry, no matter how large that product may be. And in making this proposal it goes to the root of the present crisis.
In this connection I may give one other quotation taken from the October letter of the Royal Bank of Canada. Speaking of changes, he says:
Among the most notable has been the attention given in the last few years to national planning-an idea developed in a rapid and spectacular form by the Russians, but of necessity forcing itself upon all of us. . . . We have scarcely grasped the fact that individualism in the old sense is no longer possible and that laissez-faire and the invisible hand are out-dated, when we are compelled to acknowledge that cooperation on a base even so broad as the national one is inadequate. In fact, its consequences are far more serious. Disasters may follow from an unregulated and individualistic economic behaviour, but they are mild compared with the tragedies if large national groups clash, each thoroughly organized in opposition to the rest. The national approach will not do.
I do not think we could proceed very far along the line of central planning-that is, under an administration really in earnest about producing results-without having to deal with the control of the banks. Theoretically, of course, parliament controls the banks, but in practice, in my judgment, the banks control the administration. Back as early as 1925 I introduced a resolution to this effect:
It is not in the interests of the country at large that the privilege of issuing currency and controlling financial credit should be granted to private corporations.
I am more than ever convinced that the issuing of currency and the control of financial credit should be in the hands of a body directly responsible to the representatives of the people. It may be that we can set up i commission, although the commission form of government is today on trial; but it ought aot to be left to those who might rightly be termed irresponsible and interested parties. Whether or not it is necessary to nationalize our whole banking system is perhaps a matter for debate, but all that we insist upon is that there should be effective control, and that may probably be exercised through a central bank working in the interests of the people rather than in the interests of the banks.
I do not think we could proceed very far without increasing the public control of industry. I believe the Prime Minister himself stated the underlying principle that should

Cooperative Commonwealth-Mr. Woodsworth
obtain in dealing with our natural resources, m his speech introducing the radio bill last year. This is what he said:
I believe that there is no government in i nnada that does not regret today that it has nai ted with some of these natural resources for considerations wholly inadequate and on terms that do not reflect the principle under which the crown holds the natural resources in trust, for all the people. . . .
If the Prime Minister would extend that principle to all our natural resources he would be advocating what we in this corner have been advocating through the years. The crown holds the natural resources in trust for all the people.


Richard Bedford Bennett: May I lemind the hon. gentleman that it is the crown in right of the provinces.


James Shaver Woodsworth: Not in relation to the radio.


Richard Bedford Bennett: That is national


James Shaver Woodsworth: I do not want to go into the constitutional question in detail today.


Mr. GEARY:: You are founding your argument on it.


James Shaver Woodsworth: No. I am not
founding my argument on the constitution as it is today but on something a great deal bigger.


George Reginald Geary: Why don't you establish your basis and proceed.


James Shaver Woodsworth: I am dealing with principles. There may be the complicated legal question of the crown in right of the provinces as against that of the crown in right of the dominion. I do not want to be drawn into that discussion today; I am dealing with the general principle and we believe that what is true of the Dominion government ought to be true of the provinces as well. We are laying down a great general principle which will have to be worked out. If war broke out these constitutional questions would not stand in the way for a minute; the Dominion government would invoke certain residual powers it holds and would manage to make the constitution work. That is the point. An hon. member behind me suggests that the crown is the people. Of course it is. There is a great deal bigger question at issue than that of the respective rights of the provinces and of the dominion. Let me quote still further from the radio speech of the Prime Minister:
I cannot think that any government would be warranted in leaving the air to private 53719-107J
exploitation and not reserving it for development for the use of the people.
It was only a few days after that utterance that the question of radium came up. I think radium deposits are considered to be under the control of the dominion, but when this matter was being considered the government made no effort to apply its own principle. If the principle enunciated by the Prime Minister applies to one particular natural resource it ought to have been applied to radium as well. I think this gives a practical answer to the hon. member for South Toronto (Mr. Geary)-the government took no action even where it had the authority.
Whether or not we like it, to-day the state is intervening more and more in business affairs. I submit that the Duff report and the suggested plans founded thereon go further than most legislation when they attempt to consolidate the railroads in some way or to arrange for their centralized control. We are being forced to advance along socialistic lines. I know there are those who say we should have less government in business, but-


Mr. YOUNG:: Hear, hear.


James Shaver Woodsworth: The hon. member
for Weyburn (Mr. Young) says, "hear, hear." He has been long enough in Ottawa to know that there is a steady stream of people coming here to secure special favours and that no corporation could exist had it not come to the government for its charter and for special favours.


Some hon. MEMBERS:: No.


James Shaver Woodsworth: Industry undoubtedly is in a serious plight to-day. It seems to me that instead of our being lorced tu take over industry', a great many industries will be coming to us. as did the old Canadian Northern, and asking to be taken over. Industry is in a bad way. I do not believe that the industrialist can pay his dividends to-day and at the same time pay decent wages, but when that alternative must be decided I say unhesitatingly that the employees ought to be secured a decent living and their claims should have priority over dividends. If industry as constituted under present conditions cannot grant a decent living to its employees, so much the worse for industry, and in such cases it should be taken over.
Similarly the governments of this country are in a bad way because they are not able to balance their budgets; I do not believe they can, on the one hand, give adequate services to the people and, at the same time,
1692	COMMONS
Cooperative Commonwealth-Mr. Woodsworth
pay the interest upon their bonded indebtedness. We shall have to say whether the interest upon bonded indebtedness shall have precedence over the sendees needed by the people.


Mr. HANSON (York-Sunbury):: Would
the hon. gentleman allow me to ask a question?


James Shaver Woodsworth: I have only two or three minutes left.


Richard Burpee Hanson: We will
give you a little more time. Does the hon. gentleman know of any industry where interest has taken precedence over wages?


James Shaver Woodsworth: I have only a few moments left; we are narrowly limited as to time.


Richard Burpee Hanson: Answer
the question.


Edward Joseph Garland: The
Speaker intervenes upon other occasions.


James Shaver Woodsworth: I recognize that a
great many object to the program which we have in view in that it may undercut what is called the principle of private property. That may be quite true, but I suggest that that principle of private property has been unwarrantedly extended. We create an artificial body which we call a corporation, and then, without imposing upon it any responsibilities, we give it all the privileges of a private person; without its having any soul, we endow it with immortality. I do not think we can allow an assumption of that kind to continue. It may very well be that my home is private property, that other things which 1 use and enjoy are private property, but the original idea of private property should never have been extended to the machinery by which modern production is carried on. It does not belong there at all and ought never to have been extended to such a degree- that will have to be altered. Who can contend for a moment that the Bank of Montreal or the Canadian Pacific Railway are private property in any real sense? They have been given certain charters and certain privileges which they enjoy just so long as they are considered to minister to the welfare of the country. Many believe that our banks are inviolable, but I would remind the country at large that our banks exist because of charters which really terminate this year. Those charters need not be reissued if parliament so desires; they are given at the will of parliament for a ten year period only, and the sooner the banks recognize that they are dependent upon the people, the better for all concerned.

The Prime Minister in his Toronto speech said:	" Are you prepared to give up those
things which have been earned by honest toil?" Does anyone mean to say that the great fortunes in Canada have been built up by what could be termed "honest toil "? Has the Prime Minister's own fortune been gained by honest toil?


Some hon. MEMBERS:: Shame.


Some hon. MEMBERS:: Withdraw.


Pierre Édouard Blondin: I ask the hon. member to withdraw the imputation he has just made.


James Shaver Woodsworth: Mr. Speaker, I simply asked a question.


Pierre Édouard Blondin: I ask the hon. member to withdraw the imputation he made; he must know that it is out of order.


James Shaver Woodsworth: Mr. Speaker, 1 submit-


Some hon. MEMBERS:: Sit down.


Some hon. MEMBERS:: Order.


James Shaver Woodsworth: Mr. Speaker, on a
point of order; I submit that I made no statement which is contrary to the rules of this house.


Pierre Édouard Blondin: I have given my ruling,
and I ask the hon. member to withdraw his imputation.


James Shaver Woodsworth: Mr. Speaker, on a
point of order; may I again state that the Prime Minister made the statements-


Pierre Édouard Blondin: I recall what the hon.
member said, and what he said is out of order. I have so ruled, and I ask him to withdraw.


James Shaver Woodsworth: Then I appeal
from Your Honour's ruling.


Pierre Édouard Blondin: The hon. member has
used unparliamentary language and I ask him to withdraw it. The hon. member has made the imputation that the Prime Minister has been guilty of dishonesty.


James Shaver Woodsworth: No, Mr. Speaker,
I gladly-


Pierre Édouard Blondin: I would regret to have to name the hon. member, but I propose to do so unless he conforms to the rules of this house. I ask the hon. member to withdraw his objectionable words.


James Shaver Woodsworth: I withdraw any
imputation that the Prime Minister has made his money dishonestly.


An hon. MEMBER:: Yammer ahead.

Cooperative Commonwealth-Miss Macphail


James Shaver Woodsworth: What I was trying to point out was that a great many fortunes in Canada have not been built up by what we used to consider in the old days as steady savings, collected by hard, assiduous toil. I was trying to say that a great many fortunes in this country-in this case I am not referring at all to the Prime Minister-have been built up by manipulation, by stock watering, by various kinds of speculation.


Some hon. MEMBERS:: Oil.


James Shaver Woodsworth: Yes, oil and so
forth.


Pierre Édouard Blondin: I would ask for silence
in the house because it is impossible for the hon. member to speak with so much noise.


James Shaver Woodsworth: I believe it is within the knowledge of all hon. members that large fortunes have been made in this country by other methods than that of the old-fashioned toil, and under such circumstances there is no reason why the right to the possession of such fortunes may not be challenged and why, when there are hundreds of thousands of people on the verge of starvation, there may not be levied on those who presently own them, the large amounts that are necessary to put into effect certain kinds of public works or to make other provision that will adequately meet the needs of the people in this crisis. As certain people have pointed out very clearly, it is quite constitutional to do that in the case of an international war; it is equally constitutional to do it in the case of a war against poverty. Unfortunately we have been emphasizing too much the financial aspect ; we have not paid sufficient attention to the welfare of our citizens. May I be permitted to quote those old lines of Goldsmith which I think ought to be inscribed in every legislative chamber in Canada:
111 fares the land, to hastening ills a prey, Where wealth accumulates, and men decay.
Unfortunately we have had a great acceleration in the speed with which wealth has been built up in this country and today we are experiencing the reaction in that people are literally decaying in their physical health and in their morals because of conditions that exist. I think of the thousands of people whom I meet, who are almost in despair, who should be lifted out of their despair. It is the first duty of any administration adequately to feed, clothe and shelter its people. That is not being done by the present government. I quite admit that if anyone proceeds to carry out that policy, it may very well mean heavy taxation on certain corporations and
individuals who hitherto have escaped lightly; it may very well mean a challenge to the prevailing ideals of private property, but it is becoming essential at the present time. With me, and I think with an increasing number of people across the country, the question is not whether we ought to have changes; the real issue is whether changes will be brought about in an orderly and peaceable fashion or whether matters will be allowed to drift until there is a crisis, possibly a catastrophe, when, as best we can, we may try to pull ourselves together.
The terms of the resolution are, I think, clear to all. I would say again that the new program is being backed by responsible groups of organized farmers, labour men and other citizens. I trust the discussion will not simply degenerate into a calling of names, but that on the other hand we shall attempt to discuss seriously the principles which are at stake.


Miss AGNES MACPHAIL (Southeast Grey):: Mr. Speaker, in rising to second the motion of the hon. member for Winnipeg North Centre (Mr. Woodsworth), I wish first to say that since the house adjourned before Christmas we have had a particularly interesting time. Those of us who call ourselves members of the Cooperative Commonwealth Federation have had the opportunity in the last two months of seeing large numbers of our Canadian people. May I say that for the most part the money which paid for our travelling and other expenses came out of our own pockets or, if it did not, collections to meet expenditures were taken up at the meetings. I cannot understand the attitude of many individuals and newspapers, particularly some of the small ones, which have been printing really scurrilous reports. While I may make bitter attacks on policies, I hope I may not live to mete out to my fellow members in the house some of the, shall I say, receptions that have been meted out to me.
In the last three or four years as things got worse and worse, and the suffering and poverty of the people increased very rapidly, many citizens and, members of the house who do not belong to either of the major parties, really expected-I for one, at any rate, did-that there would be changes of policy on the part either of the government or of the Liberal party. I thought there would be on the part of responsible members,, citizens who must stand in high regard in. their individual communities-one would judge that by the fact they have been elected to this house-a realization that these days we are passing through are not ordinary days and that a change of policy had become
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necessary. As time went along we saw there was no such realization, and possibly I had better pay tribute where tribute is due and thank the Prime Minister (Mr. Bennett) and his party for the very able assistance they have unwittingly given to the Cooperative Commonwealth Federation. It would not otherwise have been possible to have addressed such vast audiences nor would such support have come our way had it not been for the policies of the Prime Minister and his pronouncements from time to time, and I here and now thank him.
There was, on the part of many people, fine people too, an expectation that the Liberals would turn to the left. But instead we found them talking about personal liberty, religious liberty and constitutional liberty, as though these could be all that they ought to be if they were not accompanied by economic liberty. So it seems curious that it has fallen to those groups which are much less well equipped by way of organization across the country, possibly by way of training and certainly by way of financial support, to give a lead to the country at this time. The name of the organization that is saying the only things that are different from those which have been said for a hundred years is the Cooperative Commonwealth Federation. It is true that organized farmers, organized labour and the socialist party of British Columbia were the founders of the C.C.F., but it is also true that the cold waters of this prolonged depression are to-day loosening the hold on security of business and professional men and industrialists. There is no doubt at all that business and professional men, and smaller industrialists who thought they would never reach a time when they would experience insecurity are to-day insecure, and indeed some of them are in the ranks of the unemployed. This orderly mobilizing of the people's forces does not consist of farmers and labourers only, but is augmented by these new, insecure groups, namely, the business, professional and smaller industrial peoples. Therefore it cannot but be true that in the months that lie ahead of us the forces of the people will gather strength. It has not been our doing. Had either of the old parties offered solutions, or even attempted to offer solutions, or had the government extended some sympathy to those suffering so greatly, they would have held much of the ground which they so easily won in 1930, and the Liberal party would have gained ground more rapidly than it is now doing. The Liberals, of course, do offer sympathy, if nothing else. 
I am very glad to say that the Canadian people cannot be reconciled to continued want and privation, suffering, disease and early death in a land of abundance. They cannot and will not be reconciled to it. If they could they would not be the red-blooded Canadians about whom the Minister of Railways and Canals talks so much. The attempt of the Cooperative Commonwealth Federation is to build a social order or society which will serve mankind, instead of allowing a social organization to continue which makes mankind serve the system. Although municipal governments and provincial legislatures may desire great and fundamental constitutional changes, they cannot make them, and that the great constitutional changes which must come will come because of changes made in the House of Commons of Canada.
May I say-and I do not think I need say this to the country, if I must to the House of Commons-that I am an anti-revolutionist. I never have believed in force. Today I have no more belief in it than I had in years gone by. It will not be the activities of the Cooperative Commonwealth Federation which will bring revolution in Canada. There are only two classes which make revolution possible, namely, the class at the top which stubbornly and stupidly will not be moved by changed conditions, and the class at the bottom which wants to bring about a change in the social order by revolution. Those at the top, well aided by the government of this country, unconsciously are doing everything they can to bring about that which they most fear. It is simply ridiculous to brand as revolutionists members such as the hon. member for Winnipeg North Centre (Mr. Woods-worth) and myself. If any hon. member will turn to the debates of this house for the eleven years we have been here he will find that we were anti-militarists at a time when we were called Germans and Russians and all sorts of things, because of it and there are no two people in the House of Commons who have stood out more consistently against force as a means of settling disputes than have the two members speaking to this resolution. So that may I say here that those who try to assert that we are bloody revolutionists, that Mr. Woodsworth was born in Russia and has a foreign name, and all that kind of nonsense, are doing us very much good and themselves as much harm. It will not take the people of Canada long to know there is no truth in such a suggestion.
We did not get out of previous depressions by intelligent collective action. We got out of them more or less by accident. Either some great, startling invention came along

Cooperative Commonwealth-Miss Macphail
which caused capital expenditure on a large scale, or we had a war, or some other unexpected occurrence, or there was an export of capital. But the export of capital is no longer possible. These three factors, the export of capital, the war of 1914 which brought an end to the depression previously existing, and startling inventions such as the motor car brought us out of depressions previous to the present one are not likely to be repeated. It seems to me that this depression has been so prolonged that there is less and less chance of some accidental happening bringing us out of it. It looks as though we were going to have to think our way out, then act our way out, and as individuals we cannot do it. We can do it only by collective action. The things which have brought us out in the past are less likely to bring us out now. I refer particularly to two factors, namely, the export of capital and those startling inventions causing great capital expenditures. The third one I want most of all not to happen, namely, the declaration of war. Oddly enough, however, if war were declared the government now sitting on the treasury benches, to save the situation would do those very things which, if done in peace times would be equally effective. But apparently we would have to have a war to convince them such action was necessary. Great capital expenditures brought about by new and great inventions are unlikely since industralists, capitalists and financial magnates who would be injured by the displacement of equipment which they now possess would take steps to buy up inventions which might in their opinion enter into too great conflict with their interests. Such inventions would have a nuisance value.
Suppose none of these factors become effective what will we do? If we follow the policy which is now being pursued, one of liquidation without replacement of credits we will bring about wholesale defaulting on bonds and debentures, with therefore less credit in circulation and lower prices. In the year 1932 corporations and municipalities in Canada defaulted on their bonds to the extent of $45,000,000. We must remember that those bonds and mortgages which are the debts of the people are really the basis of financial credit. Those defaults wiped out credit. The banks used the bonds as a basis of credit, and individuals and companies used them as collateral. So an insolvent debtor means default which wipes out credit, making the volume of currency and credit in circulation less, with attending lowered prices and greater insolvency. That is the policy we are now pursuing relentlessly. There is no doubt at all that there is a curtailment of credit
throughout the country, and a great many individuals believe that if there are fewer expenditures the money will be saved. Actually that is not so. But reduced expenditure lessens the volume of the means of payment slowing up trade and pulling down our activities all along the line.
In this connection I should like to quote the words of Gustav Cassel, the well known Swedish economist with whose works I am sure hon. members are familiar. In the work before me he deals with the policy of deflation. He considers the condition where there is less and less currency in circulation. He is recommending the opposite treatment, that of raising falling prices by a greater flow of currency into the commercial life of the country. But he says:
The deflationists, however, look upon this question in their own way-
I do not know any real reason why a person should have to strain his voice to make himself heard. If anyone wants to talk there are comfortable lobbies.


Mr. DEPUTY SPEAKER:: Order.


Agnes Campbell Macphail: May I begin again:
The deflationists, however, look upon this question in their own way, regarding deflation as in itself a desirable thing. They think that the necessary equilibrium should be brought about by forcing down all prices to the level of the lowest. They disregard-
And this is exactly the policy that this government has been pursuing.
They disregard the great social evils, labour struggles, and political disturbances-
Of which the Canadian Cooperative Commonwealth, I should say, is one.
-unavoidably connected with a restrictive policy of such severity as would be required for the purpose. And, what is still more important, they do not understand that such a restrictive policy would inevitably expose the low prices to a new pressure and cause them to fall still more.
So that if Gustav Cassel is right, there is no doubt that unemployment figures will continue to increase, that prices of all basic commodities will go still lower than they are at the moment.
There is one other thing that possibly we have not given enough thought to, that is that the industrial mechanism is very delicate and very intricate and that while it can be slowed down to a certain extent without smashing it, you cannot slow it too much or the whole thing goes to pieces. We all know that you must have a certain turnover in business to carry the overhead, once the turnover becomes too small to carry the
1696	COMMONS
Cooperative Commonwealth-Miss Macphail
overhead then the concern cannot go on. That is true of any business, and the bigger the business the truer it is. One would think, in that regard, not only of our great industrial plants but also of commercial companies, like Eaton's or Simpson's, or of our railways. Sometimes I think we are getting very close to the minimum of activity, and that once we have passed that minimum we shall run into difficulty much more rapidly than we have done up until now.
That brings us then to the question: How are we going to increase business activity? How are we going to increase industrial activity? How are we going to raise the level of prices of basic commodities? I think there are many ways. But I think one of the things that must be done-and I am not going to develop it because it will be developed by other speakers-is that we must draw upon social credit, or the credit of all the people; we have to stop a small group of individuals, no matter who they happen to be, having the right to issue credit against the assets of the people. I have no objection to them writing notes against their own assets, but I have great objection to them writing notes against the assets of the people, for which the people pay them very high interest. We have paid out far too much in interest, both on foreign and domestic loans, in the years that lie behind us. We have now solved the problem of production but not that of distribution. The distribution of goods and services is in essence the whole problem that faces us at the moment. In order to distribute goods and services, the purchasing power of the masses of the people in this and every other country must be increased. That means, of course, that those who have more purchasing power today than they have needs or capacity must have their purchasing power curtailed, for the economic good of the whole.
When we are passing through a time such as the present, individuals and even large companies are spending less and less. Uneconomic as it is, and as they may realize it to be, it is impossible for them to do anything else, grim necessity forces them to cut down their expenditure, and the cutting down of expenditure by individuals, companies, corporations and governments greatly lessens the volume of currency and credit in circulation, with the result of a still further fall in prices, greater unemployment and greater distress.
So we must increase the amount of credit and currency in circulation. May I quote what two eminent authorities have to say on this subject? G. D. H. Cole is one of 
the great British authorities, a leader in economics in the university of Oxford and a member of the economic advisory council. He says, at page 345 of The Intelligent Man's Guide Through World Chaos:
Where the private investor refuses to invest governments will have to step in. Nothing would be more likely to help, given the right international conditions, in promoting world revival than a large-scale and systematic policy of public development directly planned and financed by the governments of the leading countries. With this would have to go a more liberal credit policy and, if possible, an international agreement under which each state would agree to liberate its currency system from the present shackles upon expansion, either on the basis of a reformed gold standard or through a system of related national currencies "managed" without any reference to a metallic standard.
Stuart Chase, who is a well-known American economist, commenting on the same point, says:
When the cycle starts down, extend public works; when it starts to boom, retrench public works.
Again he says:
The depression could be broken by feeding a huge stream of new purchasing power into the industrial system. . . . We may have to create new money to finance new wealth. If you want to call it inflation, all right. I am not afraid of the word.
And another very brief one from Chase. Anything I may say on this subject may be discounted, so I believe we had better keep to world authorities. He goes on to say:
In the last analysis, what is a people's credit for, if not to finance the end of a people's misery and desolation? Certain leading citizens regard government credit as private property, to be doled out to bankers and railroad bondholders. The very mention of letting the people of America benefit by their own credit throws some of these prominent citizens into a paroxysm. "Better," I heard a banker say, "universal bankruptcy than one dollar of inflation." These brave boys on burning bridges may stand a moment too long.


Mr. POULIOT:: The hon. member's own
speeches read better than what she is reading.


Agnes Campbell Macphail: The odd thing about
it is that when private individuals or companies or corporations borrow against their assets we call that prosperity, but when it is proposed that governments should use national credit to finance national schemes, it is called inflation. I must say that I do not quite appreciate this great worry about inflation, but I am not going into that. There is no doubt about this, that the essence of the depression is falling prices, caused by deficiency of purchasing power. One sees everywhere attempts to break down "sales

Cooperative Commonwealth-Miss Macphail
resistance," the spending of large sums to induce people to buy, and the very people they are trying to induce to buy would very much like to buy if they only had the purchasing power. One sees it everywhere. I notice at the picture show last night that at the motor show in Toronto they put on a vaudeville performance to induce people to go to the motor show, which I would say is a rather odd way to break down sales resistance. We must now turn our whole attention upon the consumption of goods. We must pass at once from an economy of production to an economy of consumption and we must continue to address ourselves to that problem until the consumption of goods equals the production, and continue even further, until the amount of goods consumed is equal in volume to the amount of goods which all our plant and equipment is capable of producing. When that point is reached we shall for the time being have solved the problem. That being so, we must seek to evolve policies, taxation, financial and trade policies, which will increase the consumption of goods. This I will admit is a new idea because the whole effort of governments in the past, and it has been a very well directed and very successful effort, has been towards the production of goods. But to-day the only thing that people with accumulated capital know what to do with it is to invest it in plant and equipment to produce goods of which there are already too much. So that to use it in that way is nonsensical.
It does seem to me that what we shall have to do in the very near future is to take the burden of federal taxes as much as possible off the backs of the consumers so as to increase their purchasing power of goods, and throw the burden of federal taxes upon accumulated capital, not for the purpose of injuring accumulated capital, but rather to prevent accumulated capital from being what it is now, an economic nuisance. If that were done, and it could be done by income tax, inheritance tax, and the taxation of unspent balances, whether of individuals or corporations, beyond a certain figure, it would bring into the federal treasury great sums of money from a yet almost untapped source, and at the same time it would increase the purchasing power of the masses of the people, enabling the consumption of goods in some degree at least to catch up with production.
I am sure there is no member of this house-at any rate I would not like to think there is one-who is not sensible of the very great suffering of the people of Canada today, and that suffering is increasing day by day and
week by week. In this year 1933 we are going to see very many more people go off our farms and many more people give up their homes because they are unable to meet their payments than was the case in 1932. That certainly must be realized by other members of this house if they receive as voluminous a mail of the same sort as comes to my desk. They must know a great deal about the extreme suffering of our fellow-Canadians. But it does seem to me that inasmuch as parliament can, parliament should relieve the people from the corroding worry and despair to which they are subjected at the present time. People are so much afraid of certain things. They are afraid of unemployment, with no means of their own. They are afraid of sickness and accident. The are afraid of old age, because often old age for various reasons starts before the age of seventy, and inasmuch as these fears can be relieved, I think it certainly ought to be.
One word about unemployment. The only real cure for unemployment is employment. I think one by one we have all come to that conclusion. The last time I spoke in this house before the Christmas adjournment I said I wondered if any of us really realized the actual feelings of millions of our people who go on from day to day without work and without hope. I wonder if we realize what that is really doing to the moral fibre of our nation. How long can we continue to do it without actually destroying the very qualities in Canadians of which we have been so proud? I feel that we must set about getting work for those who are out of work. I do not think we can say that there is nothing to do while people live under the most wretched conditions in this country, while they live in the slums of our great cities, while the people in our countryside have not got the comfortable homes and the electricity and the various other conveniences that everyone ought to have today and while some work too hard.
I have here a little pamphlet called the Canadian Student which came to my desk only two days ago. In an article written by an English girl, under the title of "Why Don't Our Young Men Care?" One finds the very thing I have been emphasizing, that these people are our charge, and however much we may try to laugh it off and say it does not matter to us, after all, if we are responsible citizens, and particularly if we are responsible members of parliament, the misery of our fellow-Canadians matters very much indeed. If it does not, we have no business to be here. After expressing her disappoint-
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ment in the activities of the student body in Canada she says:
No, I am forced to the conclusion (refute it if you can) that you here just do not care; you have no enthusiasm, no zest; nothing on which you are really "keen." You do not care that at a ten-minute walk from the university there are houses, inhabited by your fellows, which are so insanitary, rat-infested, smelly and filthy, that they would be a disgrace in an uncivilized community. You say you do not know this? Why not? It is your business.
That is exactly how I feel about it. She goes on:
blow man- of you know that in three centres less than a half-hour's walk from Varsity, there meet once a week groups of men, often numbering in the hundreds, who are your fellow-Oanadians, who through no fault of their own are not working at the moment, but who would welcome the friendliness of a chat or a smoke or a game with you-if you are really interested in their problems? Are you not interested in them or their problems? Why not?-they are your business.
I know that sentiment is out of place in this house, but I do feel that what we need now is a new sense of patriotism, not the sort of patriotism that means going out to fight and kill somebody, but that sort of patriotism that says to each one of us that the feeding and clothing and sheltering and the developing of the personalities of Canadians is the business of each one of us, the business of all thinking Canadians. I do think some times that members of this house do not always feel a sense of personal responsibility for present unhappy conditions. This is the test I Are we willing to sacrifice ourselves, our time, our money and our efforts, in an endeavour, even though it be in vain, to set up a new social order that puts in the centre human beings and relates everything else, finance, industry, and all else to the service of our fellow-Canadians?


Mr. G. G. COOTE (Macleod):: Mr. Speaker, everywhere that I have gone since parliament adjourned a few months ago I have been met with this question by the citizens of this country:	Is parliament going to do anything
for us this year? Is parliament going to do anything to make conditions better? Will parliament do anything to give us employment? Will it do anything to make it possible for our boys and girls to get work?
I have not been able to give my fellow-citizens a very reassuring answer, and coming back to parliament on Monday last and looking oveT the speech from the throne which was read to us a few months ago, and glancing over the order paper now before us, which I suppose contains the bulk of the program which is to be submitted to parliament, I canfMiss Macphail.]
not help feeling that the resolution which is now before the house offers the most promise to the citizens of Canada for some improvement in conditions, because it asks that the government should immediately take measures looking to the setting up of a cooperative commonwealth in which all natural resources and the socially necessary machinery of production will be used in the interest of the people and not for the benefit of the few. That proposal, it seems to me, is so reasonable that it should have the sympathetic consideration at least of all the members of this House of Commons.
Wherever we look today throughout the so-called civilized world we find the various countries enduring all sorts of trouble. I fancy that most of the statesmen of the world, when they retire from their offices at night, must exclaim with that celebrated character of Shakespeare:
The time is out of joint; 0 cursed spite.
That ever I was born to set it right!
Coming to Canada, we find conditions in a frightful mess. We find a land where food is more plentiful than it has ever been before; yet many people are going hungry. We find great quantities of clothing in the warehouses and in the retail stores; yet I personally know of many people who are going insufficiently clad, people who have not all the clothing they really ought to have. There is a vast amount of coal in Canada, and any number of miners who are willing and anxious to work; yet there are thousands of homes in the country in which the furnaces are not being lit this winter, the people having to keep warm as best they can around the cook stove . lecause they have not sufficient money with which to buy the necessary fuel. There is a lot of railway equipment idle in the yards while there are numbers of Canadians who are wanting to ride on the trains; but the trains are not running, at any rate not more than half the number of trains we had in operation some time ago.
As a matter of fact, we have goods and services of all kinds in abundance in Canada, but the people are not in a position to obtain anything like a sufficient quantity of these things. There is no scarcity of anything, so far as I can ascertain, except a scarcity of money; and as one of the best living economists said some time ago, of all things that mankind needs in this very complex system under which we now live, the one thing of which mankind can have as much or as little as it likes, is money, because money is so easily made. There are two kinds of money, one made with a bank ledger and a fountain

Cooperative Commonwealth-Mr. Coote
pen-a kind very easily made and, unfortunately, easily unmade. There is another kind of money made of high grade paper and with a printing press, and that is the better kind.
A good many people have an entirely wrong idea of money. They think it is something to be saved, something to be hoarded, something to be bought and sold, a commodity like wdieat or potatoes. Money is nothing of the kind. In the true sense of the word it is a medium of exchange, a system of tickets whereby we exchange goods and services one for another. Speaking in the material sense money is the most important thing in our lives, and it is imperative that we should have a proper amount of it. It is important not to have too much and equally important not to have too little. You might have too much, just as they had in Germany years ago, when there was a great quantity of money in circulation and a very small amount of goods, with the result that money lost its purchasing power. On the other hand, you might have such a condition as exists in Canada today-great quantities of goods and very little money, so that the goods lose their money value. Money, I repeat, is the most important thing in life, because it is the means of livelihood of every man and woman receiving wages or salary; it is the means of livelihood of professional men and and all others, including producers. Why do they want money? Because they must have it if they are to get their livelihood. That is the reason that money is so important to us. The whole standard of living of our people depends upon the amount of money they control, and for the last three years the standard of living has been steadily declining.
It seems to me that the success of any monetary system should be judged by the standard of living which the people can enjoy under it. If our standard of living has been steadily declining, as it has been for three years, then there is something seriously wrong with our money system and we have a prima facie case established against the present system. We may understand it better if we examine the causes of the crisis from which we are suffering, the so-called depression. I have not time today to attempt to deal with the many contributing causes of the crisis. One cause, of course, is the displacement of men by machinery; I will not attempt to deal with that. Another cause is the unequal division of wealth or income, with which I shall have to deal incidentally. The next cause is our antiquated money system, a debt-creating system which has been in use in the so-called civilized world for the last hundred years, under which, according to an
estimate of the League of Nations, there has been built up throughout the world an aggregate debt of over four hundred billions of dollars. In the United States, according to an estimate I have seen, the figure is two hundred and eighteen billions, and I have seen an estimate of eighteen billions for Canada.
I suppose these debts are theoretically or technically payable in gold; yet all the gold in the world amounts to only eleven billion dollars. May I ask how anyone expects to pay in gold even the interest, let alone the principal of this debt of four hundred billion dollars. The interest is not paid in gold but in goods. When it comes to paying international debts they are paid with goods, and (he tariffs which we hear so much about today only serve to impede that payment in goods. Many international debts are today impossible of settlement owing to tariffs and the low world price of export commodities. I believe that any student of the present crisis will agree that the immediate cause of this world situation is the collapse of commodity price levels which started in 1929, and which collapse was brought about by a deflation of the world's credit.
May I quote briefly from Sir William Beveridge, director of the London School of Economics:
This is essentially a money crisis. There is a breakdown in the machinery of exchange. What we have in this crisis is a fall of prices, representing deflation of money.
That is a very positive statement. The house knows what deflation means; it means contraction. Evidently the remedy for the deflation of money would be an inflation of it; yet some leading men in the country tell us that the last thing iu the world we can think of would be some inflation. All the inflation I want is enough to offset the deflation which has already taken place. There are many people in this country who do not believe that there has been any deflation; they say, "There is as much money now as there ever was." I want to contradict that statement positively and to give figures in support of my contention.
There are two kinds of money-cash or currency made with a printing press, and bank loans or credits created by means of a bank ledger and a fountain pen, as I have already said. I recently secured figures from the Deputy Minister of Finance to see what deflation had taken place in Canada in the last three years, from October 31, 1929 to October 31, 1932. I find that there has been a contraction or diminution of dominion notes in circulation in Canada of $50,000,00'). As a
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Cooperative Commonwealth-Mr. Coote
matter of fact, we have only about half the dominion notes in circulation now that we had in 1920. Speaking from memory, I believe we have at present $161,000,000 as compared with $320,000,000 in 1920. One would have to go back to 1914 to find a year in which there was as small an amount of dominion notes in circulation as there is today.
Those figures will give some idea of the deflation which has taken place in the amount of legal tender in circulation in the country. There has been a shrinkage of $50,000,000 in the bank notes in circulation in Canada. The figure is now down to $133,000,000. There is a diminution or contraction of approximately $600,000,000 in total bank loans in Canada outstanding on October 31, 1932, as compared with October 31, 1929. Of the amount of bank loans outstanding today I dare say that perhaps fifty per cent are frozen loans. The bulk of the business of this country is done by means of bank loans, and we are attempting to carry on with probably not more than one-half the amount of active bank loans which we had three years ago. Surely when these figures are available to the house no one will say that we have not been deflated. We have been deflated to the extent of approximately $700,000,000. How can business in Canada be normal under these conditions? The amount of business which can be done depends upon the money in circulation and available to the people. This deflation started in 1929 and has continued ever since. As a result the confidence of the people has been destroyed and the velocity of the circulation of money has slowed down. Once confidence is destroyed the whole vicious spiral of deflation gets under way and commodity prices go to-I shall not say where. As one commodity dealer has said: "If it is true, as some modernists say, that there is no hell, where have commodity prices gone to anyway?"
Speaking of commodity prices brings me to the present position of those engaged in our four primary industries, agriculture, forestry, mining and fishing. The prices received by the people engaged in these industries largely determine the amount of new money with which the people of Canada can do their business. When the prices of these commodities break fifty and sixty per cent, as they have done lately, is it any wonder that business has disappeared?
In order to illustrate the position of our commodity producers I shall deal very briefly with the position of the farmer. The farmer is affected by three different levels, the level of his debts, his taxes and insurance premiums, his hospital fees, etc., the price level of the goods he sells and the level of retail

prices. As I remember the statement of the Prime Minister at the Imperial conference, he said that in three years the price of wheat had fallen sixty-three per cent, that of other farm products fifty-six per cent, and the cost of living, nineteen per cent. Averaging the price of wheat and other farm products, we find that there has been a drop of sixty per cent in the price received for these commodities, while there has been a drop of only nineteen per cent in the price of those goods which the farmer is forced to buy, and no drop at all in the level of his taxes or the interest on his debts. How can the farmer carry on? Forty-five per cent of our people are engaged in agriculture, and the prices they receive for their products largely determine whether or not there is to be business prosperity in Canada. The gross revenue of agriculture has decreased by over $925,000,000 in the last three years.
What I have said about agriculture applies in a greater or lesser degree to forestry, mining and fishing. We talk about the great debt of this country, and we sometimes forget that the payment of that debt depends upon the earning power of the people engaged in these industries. When this country was floating one of the great victory loans, Sir Thomas White was reported to have said that if the interest upon those bonds was to be paid, it would be paid from the top six inches of Canada's soil. There is no interest paying power in the prices received to-day by those who are rvorking the top six inches of our soil. Those who are dependent upon the coupons which they clip from the bonds of Canada should be concerned about this matter; they should do something to bring back the buying power and paying power of the people engaged in our primary industries.
So far as the farmer is concerned, his load of debt has been doubled and, in some cases, trebled, but in connection with that debt there has been a fortuitous gain to the creditor because of the increased purchasing power of his money. If I remember the Prime Minister's words correctly, he said that in some cases this fortuitous gain has amounted to forty-eight per cent. Even if this increase could be borne, it constitutes a grave social injustice. Canada cannot return to prosperity so long as we maintain a policy which inflicts a grave social injustice upon the great body of producers of this country.
I do not think the people of Canada are going to put up with this forever, especially if we can get a chance to tell them what is going on. Of course, that will be very difficult. The previous speaker (Miss Macphail)

Cooperative Commonwealth-Mr. Coote
deplored some of the reports which had appeared in the press. So far as I am concerned I think the press has on the whole been very fair to me. To those who have been maligned by the press I should like to quote the words of an economist, not a politician. John Maynard Keynes, in his Essays in Persuasion, says this about the press:
But we live in a curious age when utterances in the press are deliberately designed to ora-form -with the worst informed instead of with the best informed opinion because the former is wider spread.
If the impending crash about which some people talk ever occurs, the metropolitan press of this country will be more responsible for it than the politicians. However, I believe that some of the papers in Canada are turning over a new leaf; they are showing better judgment than they did in the past. We find editors who realize that we face a really desperate situation and that new measures must be considered and considered in a friendly light and with an open mind.
I have not the time to recite fully the conditions which exist in Canada, but the present deplorable state of affairs is familiar to most of us. It is the result of the old policy of laissez-faire, the old "rugged individualism," the "survival of the slickest," every man for himself and the devil take the hindmost. In short, a state of anarchy is prevailing in Canada today, with regard to production and distribution. We cannot expect to get out of this condition until we exercise some control. We need something to replace anarchy, we need a planned economy. I know that some people think that it is very radical to talk about a planned economy, but in doing so I think we are in very good company. I should like to quote from the World's Economic Crisis and the Way of Escape. This is a collection of six lectures given under the auspices of the Halley Stewart Foundation by Sir Arthur Salter, Sir Josiah Stamp, J. Maynard Keynes, Sir Basil Blackett. Henry Clay and Sir William Beveridge. Sir Basil Blackett is a director of the Bank of England, and I think he will be considered as being eminently respectable. He says:
A fair summary of what has been expressed in previous lectures would be that modern civilization finds itself on the brink of chaos owing to the inability of human beings to manage the machine they have brought into being. It is not merely that we are failing to make full use of the marvellous opportunities which science opens up to the twentieth century.
I hope hon. gentlemen will listen to this next sentence.
We are in immediate danger of finding ourselves the victims of a Frankenstein of our own creation; the genius of man has outstripped his code of morals both in the national and in the international sphere. The structure of the twentieth century cannot be built up on outworn foundations. If we are to survive we must be prepared to "think adventurously" and to challenge existing values and the customs based on them, carefully distinguishing between those that have passed their usefulness and those that are really essential.
And then again:
I wish to put before you this evening the view that conscious corporative planning is not only a desirable means of progress hut an unavoidable necessity if we are to save the economic structure of modern civilization from disaster-
Those are just as strong words as I could use myself.
-and that the immediate task to which we should bend all our energies is to prove to ourselves and to the world that planning is consistent with freedom and freedom with planning.
I regret the Prime Minister is not in the chamber to hear those words. I am sorry I have to skip so much of what Sir Basil Blackett said on that occasion. He says:
Here we come to the heart of our present-day problem of a financial and economic crisis brought on not by scarcity but by plenty. It is the fact that this is a crisis of plenty which has shocked mankind and accounts in a special degree for that intense interest in economic and currency questions which has among its other manifestations brought crowded audiences to listen to these lectures.
It is said that in proportion to their numbers there are more chess experts in the lunatic asylums than any other class, and next to them come currency experts.
Now listen to the laughter.
In view of what we have done with currency and currency has done with us in the last twenty years, we are all of us fit for the lunatic asylum. If many currency experts go mad, it is the natural result of their coming face to face with the insanity of the monetary systems with which man has tortured himself ever since he passed from barter to money. Money was meant to be a yardstick with which to measure the value to be put on commodities and services in process of being exchanged for each other, but throughout the ages mankind has never been able to devise a monetary yardstick which did not at one time measure an inch and at another a hundred or more inches.
I remember reading some time ago that in olden times the yard in England was the measurement of the king's waistline. All of us will realize how the yardstick must have fluctuated in those days. The old Saxon kings used to have, I believe, fasting periods succeeded by feasts and one can imagine the
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change in the yardstick after dinner. One can imagine the change which took place when the old king died and he was succeeded by a slim person like myself.
In the forefront of the reforms which the planned twentieth century demands is a stable money whose purchasing power will remain constant. It is to our failure to seize this primary necessity of any rational monetary system that our present distress is preeminently to be attributed.
I wish to draw the attention of the free traders in the house to the next paragraph which I read; and I want to apologize for such lengthy quotations from Sir Basil Blackett, but I cannot resist telling the house some of the things he has said in this excellent address. He continues:
And we hare erred with our eyes open. At the Genoa conference of 1922, some forty-five nations there assembled solemnly adopted a series of financial resolutions which set before the world two principal aims, first the restoration of the gold standard and second the prevention of fluctuations in the purchasing power of gold. The nations of the world were remarkably successful in giving effect to the first part of these recommendations, and by 1929 practically the whole world except China was on the gold standard. But they signally failed to give effect to the second part of these recommendations, the stabilization of the purchasing power of gold, although it was far the more important of the two. Indeed it may be averred that the return to gold was by itself of importance mainly as a step towards stability of prices. By this neglect we have earned the well deserved punishment of our present distress. We snatched at stability of the foreign exchanges on the basis of an international gold standard, whose main value was that it would facilitate and expand world trade. With poetic justice most of the nations which have remained nominally on the gold standard are moving heaven and earth to restrict world trade in order not to be driven off the gold standard.
How are they moving heaven and earth? Why, by putting on prohibitive tariffs. After the nations all got back on the gold standard, the nations with the lower production costs, lower price levels, were able to ship their goods into countries that were on a gold standard and that had higher price levels, and they took their payment, not in goods, as they should have done in world trade, but in gold. The gold standard countries with the higher price levels, in an endeavour to protect their gold supplies which were not large, imposed prohibitive tariffs to prevent those goods from coming in. That destroyed all the good effect that might have accrued from the gold standard. The gold standard is the reason for the ultra high tariffs that have been imposed by the nations of the world in the last five or six years, and I am really very much surprised at free traders 
being such ardent defenders of the gold standard. I want to say very emphatically that I am opposed to these high tariffs; I want them wiped off.
According to Sir William Beveridge whose remarks are given in this book I have just been quoting from, the root cause of booms and depressions is that anarchy has been allowed to prevail in the issuing and in the destruction of credit. He says:
The making and unmaking of purchasing power has fallen into an anarchy, and from the anarchy spring the alternate inflation and deflation which make our booms and depressions. Unless we can restore effective control and stabilize purchasing power we shall never escape from crises.
There is the explanation for hon. gentlemen who want to know the cause of this trouble. Anarchy has been allowed to prevail in regard to the issuing and destruction of credit and the making and unmaking of purchasing power because the bulk of purchasing power is credit issued by banks. If I can quote from memory the words of R. S. Noble at a meeting of the Canadian Political Science Association in the spring of 1931, he said that in his opinion the main cause of the world depression was a stupid central bank policy with France and the United States the principal villains in the piece. If we are to get out of this depression and to avoid further depression, we must see that anarchy no longer prevails in the making and unmaking of purchasing power. I do not think any halfway measures will accomplish this. As regards a central bank, as has been suggested by some hon. gentlemen where the banks will cooperate with the government and they will each take a shaie in it, in the ownership of the bank, I do not think that will suit our purpose at all. Personally I think the state must assume its natural function of providing for its people a monetary system which will ensure that at all times there is just the right amount of money to serve the needs of the people.
Sir William Beveridge-and I think he can be called an orthodox economist

Director of the London School of Economics, says:
If you look back into history you will see that, from the earliest times, the making of money, of purchasing power, has been a thing which men have thought should be controlled by one authority in the state, should not be entrusted to many authorities or to private caprice. That, I believe, is a bit of basic common sense in economics. The making of purchasing power is a privilege too important to be allowed to a subject.
I want to repeat the last sentence:
The making of purchasing power is too important to be allowed to a subject.

Cooperative Commonwealth-Mr. Coote
We are in this crisis principally because we have not heeded that bit of basic common sense in economics. As Sir William Beveridge says, this matter is too important to be left to the whim or caprice of any banker or any corporation. Credit is the life blood of industry and it cannot any longer be entrusted to private authority. The state must assume control and we are responsible to the people of Canada in this matter.
I earnestly hope members of the House of Commons will be willing to assume their full share of responsibility and let us create a body which will be responsible to the people and which will be put in charge of credit in this country. The first step in a planned economy which Sir Basil Blackett mentioned and which I so ardently desire to see set up in Canada is a central bank owned by the state whose duty it would be to see that sufficient money is at all times available to allow us to distribute among our people the consumable goods which we can produce. Had we had such a system in operation in Canada during the last six years, we would not have had a falling standard of living for the past three years; we would have had instead a rising standard of living. That is the way to keep people employed. It will mean complete abandonment of the gold standard, so far as internal currency is concerned. So long as we depend on a gold standard we place our whole internal economy in the hands of the goldmongers of the world. As a red-blooded Canadian I am not content with that system. As a Canadian I want to say that our national money system must be one which will give us honest money. Some hon. members may ask what I mean by honest money-it is money which will be an honest measure value. As Sir Basil Blackett has said, we have a measure of value which fluctuates to the extent of at least fifty per cent in one year. We must have money which will always measure the same amount of goods, so far as the question of money affects the price of goods. It may well be described as a money which will enable the farmer and the artisan to work and to live, to pay taxes and to enjoy life-that more abundant life for which we were created. In 1914 we abandoned the gold standard; otherwise we would have lost the war. In that year bankers came to Ottawa and conferred with the Minister of Finance for a few hours; a special meeting of the cabinet was called, and an order in council was passed suspending i-edemption in gold. Bankers next day were relieved from the liability of paying out gold. We got off the gold standard in half a day.


Edward Joseph Garland: Illegally, at that.


George Gibson Coote: Yes, but I do not care about that. The action taken at that time was in my opinion quite proper. In the present instance we have had at least a year and a half to take similar action and we have not done it. However, I have not time to go into that phase of the matter; at a later time a better opportunity to do so may be afforded. We are engaged in a war today, a war against depression, unemployment, hunger and poverty, and this war can be won only by scrapping the system which has brought about the present desperate condition, and by the use of honest money issued only by a national government agency, and guaranteed by the real wealth of the nation. We must have money which cannot be cornered or depressed by enemies without the state, and which cannot be made scarce at a time when we need it most. One of my friends has suggested to me that enemies within the state might be included.
I shall not devote much time to a discussion of a substitution for the gold standard; I fear that already I have taken too much time on that particular point. But we can have a managed currency so that the amount of money in circulation will correspond to our production. Again I take the liberty of quoting the words of Sir Basil Blackett. He says:
There is still a strong tendency to stigmatize all talk about stable money as unorthodox, visionary, cranky. Do not be frightened. Let the British people with their strong grasp of the practical realize that stable money is an intensely practical proposition, within their grasp today, if only they will believe in it and work for it and insist on getting it, and make up their minds to accept and enforce all the measures necessary to secure and maintain it.
I have before me a page taken from Lloyd's Bank Monthly, of London, England, in which I find the following statement:
The pound sterling, since it has had no metallic basis has proved a better and more constant standard than gold. Indeed, if all currencies were stabilized in terms of purchasing power, with safeguards^ against inflation and deflation, instead of in terms of one arbitrary commodity like gold, these great changes in the burden of debts and other fixed charges would be avoided.
The first step in a planned economy is t( create a money system owned by the state itself. Then an agency set up by the state -a central bank-would see, as I said before, that we have the money necessary for out own business, and not any more than is necessary. I do not want a bankers' bank; it should be owned one hundred per cent by the
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state itself. That means that money would be controlled for the benefit of society.
I might very well recommend to the house the words of Henry Ford as they appeared in a magazine article last fall. He is reported as saying that the government should take back control of money. He states that the control of money is just as important as the postal service or any other national service. His words are:
The government should take back control of money, and give us a public service money system, managed as our postal service is for the service of the people's business, managed as our weather service is for the protection of the people's business, and as our rivers and harbours are, for the promotion of the public business.
We have spent millions of dollars in harbour improvements for Canada so that our business may be promoted. Those harbours a<re not receiving half the traffic they should. Our railways are not getting half the traffic they should get because we have failed to provide our people with a proper monetary system which would enable us to distribute in Canada those things which some people are getting and others are not, and to develop a standard of living which only some now enjoy. The question may be asked: How would you get this money out? That is very easy to answer. I have to be very careful in my suggestions, but I wish to make one or two. The first is the payment of a bonus on wheat production in Canada. I would do it yet. We could put out quite a few dollars in Canada in that way. Last year in Australia the government paid a nine cent bonus on wheat. First, I say we should have a bonus on wheat, and perhaps on some other things, if necessary. I do not particularly like the system of bonuses, but at the same time something must be done to keep a lot of our farmers from falling back on the state for direct unemployment relief. I think the state would be wise to give them a slight bonus rather than to have them on its hands in the other Way.
Then we could have a useful housing program to be operated in cooperation with some of the municipalities which might tear down some of the slums and replace them with decent dwellings. Within eight minutes' walk from this point in the city of Ottawa, in a vicinity adjoining Bank street, there are many buildings which look as though they might fall down at any time. Then, we should have a more liberal old age pension scheme; some of our old men should be relieved of their duties so that our young men coming out of
fMr. Coote.l
school may have the opportunity of taking their places. We need state hospitals and medicine, and we need more state owned hydro-electric power stations. We must put the unemployed to work. A terrible state of affairs exists. The labour of 800,000 men is available to increase production of real wealth in Canada. We are crazy to think we would bankrupt ourselves if we put these people to work. I do not care if it did take $200,000,000 in dominion notes to put them to work; my idea would be ito put those notes in circulation and keep them circulating. As I said before, the dominion notes in circulation today are about $160,000,000 less than they were in 1920. We would not be bankrupting ourselves. We would not be ruining ourselves. We would not be following the example of Germany if we took $200,000,000 and put those men to work. Why not put them to work? Is that not what the government promised to do? -but that was before hon. members opposite formed a government.


Agnes Campbell Macphail: Now they sit and
laugh at anybody who suggests a remedy.


George Gibson Coote: We should increase commodity price levels, increase the returns of every farmer and of all the men engaged in our four primary industries. Then give us more public works. At a time like this, we cannot rely any longer upon private initiative to put money into circulation. That means that the government must act, and in this instance I refer to the federal government. That government has control of the economic forces which determine whether or not people can get employment. It has full control of finance, banking, currency and credit. It has control of railways and immigration. The responsibility lies on the Dominion government. How can it take care of the burden of unemployment? Let us produce some real policy, and put those people to work, a policy which will put purchasing power in their hands-because business depends upon the purchasing power of our people. And it depends upon that purchasing power going round and round. Once we get this money out we must see that it stays out, that some millionaire does not take a half million of purchasing power in any one year and side-track or hoard it up, waiting for a period of depression to come when he can go out and buy twice as many industries with it as when business is good. To keep it circulating I suggest that we should change our income tax; take the suggestion made by the Prime Minister, I think two years ago, a tax based upon this principle; one per cent on the first $1,000 of

Cooperative Commonwealth-Mr. Heaps
taxable income, two per cent on the second, three per cent on the third, and so on, not stopping at twenty-five per cent on the twenty-fifth thousand as he suggested, but carrying it on until it reached ninety-nine per cent on the ninety-ninth thousand; thus you would effect a limitation of income to about $50,000 a year. That may be too small, or it may be too large, but I suggest for the consideration of the house that we adopt that as an emergency measure. I think it would prove so useful that we would not give it up. We should call the provinces together and suggest to them that the Dominion government should collect the inheritance tax and pay a share to the provinces and we should have an inheritance tax that would take for the state all that is left beyond what is necessary to make ample provision for the widow and orphans. That would be a kindness to some of the sons of our millionaires, for under the present system the money they get is the ruination of them, some of them become nothing but useless parasites on society.
This subject is well dealt with in a book entitled In Days to Come by the late Walter Rathenau, a former minister in Germany, the son of a wealthy German industrialist, who says that the handing over of these vast estates through legislation set up by the state is absolutely unjustifiable.
Then we should have some control over industry, particularly those industries which are now approaching monopoly; control of capitalization, to prevent the exploitation of the public through bonds and stocks such as has taken place in the last few years. With a proper income tax and business profits tax and inheritance tax we can collect enough money to give ample old age pensions and ample unemployment insurance.


Pierre Édouard Blondin: The hon. gentleman has
spoken for forty minutes.


George Gibson Coote: If I may just have two or three minutes to conclude. I crave the indulgence of the house.
What I want, in short, is to give a feeling of economic security to the masses of the people of this country, who have always shown themselves willing to work and do their very best. Once we give them that feeling I am sure they will find it possible to develop the artistic side, the poetic side, the spiritual side of their life in a way that has not been possible hitherto but that should be possible in the days that are ahead.


Mr. A. A. HEAPS (North Winnipeg):: This afternoon we have been discussing what I regard as one of the most important resolutions that has been introduced into this parliament. The three previous speakers have made a very strong indictment of the whole capitalistic system, and so far we find none so humble to do it justice. The viewpoint they have represented here this afternoon is being expressed by large and increasing numbers of people in Canada. I think those of the members of this house who during the past couple of months have had the opportunity of meeting either their own constituents or those in other parts of the dominion will realize that a great change has taken place among many hundreds of thousands of the Canadian people in their views of these great economic problems. It is generally admitted by all thinking people that there is something radically wrong with our economic structure. It is quite obvious that it is not functioning as it should, and that people in numbers undreamt of a few years ago are now in want, or are facing the future with the utmost uncertainty.
Some people claim that the condition in which we live is merely a dislocation of the economic structure. Those who make this admission and yet favour the retention of the existing system must realize that when a dislocation of the magnitude of the one we are at present experiencing occurs, it may mean that the capitalistic system is falling apart. There is no one today bold enough to say whether present conditions are temporary or permanent in their character. For almost three and a half years we have been confronted with this acute crisis, each day bringing forth the oft-repeated assertion that " prosperity is just around the corner," or that " we have reached the bottom." Just as no person is able to say whether the crisis is temporary or permanent, so no one can state with certainty that we have reached the bottom or have turned the corner. These statements are merely the expression of a pious hope, without any sound reasoning to support it.
The economic situation has compelled many people to give thought and consideration to these problems, and on every hand we find those who doubt the efficacy of our economic structure and who are wondering whether some other system more just in its character could not be devised than the one under which we are now living.
The crisis through which we are passing is man-made. It is not one that has been imposed upon up by some supernatural force. If the crisis is one created by the action of

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man it ought not be beyond man's capacity to find methods of coping with it. The greatest desire of all people is for security, economic and otherwise. At present even those whom we term capitalists have not much security; certainly the great masses of the people who depend upon their labour power for their very existence have none. With the advent of the machine in industry our capacity to produce the essentials and even the luxuries of life has reached a capacity undreamt of by our forebears. Productive capacity has increased to such an enormous extent that it is a generally accepted fact that there is practically no limit to it. During the past hundred years the ingenuity of man has been directed towards perfecting our modes of production, but while this has been taking place the question of consumption and distribution has been left to take care of itself, with the notable exception of the efforts of the organized labour movement in all parts of the world. I claim that the greater the capacity to produce the better it should be for all concerned. Therefore, efforts such as are being made at the present time to supplant more efficient means of production with those less efficient is a retrograde step. Production should always be maintained at the highest level.
But in our present economic structure it is a fact that the greater our production and accumulation of wealth, the more poverty and all that it implies do we find in our midst. Such a self-contradiction affecting our daily lives cannot go on indefinitely. Those who advocate increasing our manufacturing establishments as a means of providing further employment lose sight of the important fact that it is not lack of production that is causing the present economic condition; it is the question of a reasonably equal distribution of the commodities produced amongst those who require them. Our energies must be devoted, not to the problem that has already been solved, that of production, but to the task of distribution. We have in Canada more than is sufficient to satisfy all our human requirements. Wheat has been used as fuel by our farmers, while in the cities people are begging for bread. Last year we were informed by hon. members of the house that potatoes were being sold at six cents a bushel because there was no market for them, yet many thousands would be glad of the opportunity of utilizing them to keep body and soul together. Our coal miners walk the streets in idleness, anxious to win the coal from mother nature, yet many a home is cold in winter for lack of fuel. In other parts of the 
world we find exactly the same conditions as we do here in Canada. For instance, in Brazil, there is too much coffee and it is being dumped into the ocean. In the southern states there is too much cotton, and they are making bonfires of it. Yet people are in dire need of these very commodities.
As I have already said, I am unalterably opposed to any policy of curtailing production. What I do want to see is a rational system of distribution, under which some of the conditions I have mentioned may be forever eliminated from our midst. Poverty in the midst of plenty is something which cannot exist for long. No people can take their rightful place amongst the nations if they are denied a proper and decent standard of living. The workingman within the state has his responsibility, just as the state has its responsibility to the individual. There seems to be an idea widely prevalent, which cannot be too strongly challenged, that the labourer is always seeking aid from governments. As a matter of fact, the person who receives the least assistance from the state is the worker. The state, for instance, protects the rights of property as against the rights of the producing class. If we will reflect for a moment on the aid that has been given by the state to financial institutions, to our railways, to manufacturing and shipping industries in this country, we shall see what a staggering figure that aid has reached, and what a staggering obligation it has thrown upon present and future generations. But the only direct way in which the state has come to the assistance of the worker in giving him economic security in Canada has been through old age pensions, and one or two other pieces of legislation of a similar character. If the worker at a time like the present seeks the assistance of the state, he hopes that that assistance will be given in such a way that he in return will be able to contribute something of a constructive character to the community. It is the worker, by hand or brain, who is responsible for the building up of a nation, and no nation can develop and progress if it allows its men and women to live in more or less complete idleness.
Today we are living in an era of contracting capitalism and competitive individualism, and the conflicting nature of these two forces must be quite apparent to hon. members. It is the object of the motion to remove the competitive basis of industry as it now exists, and to supplant it with cooperative effort in which all our citizens will be asked to give of their best in building up a strong and vigorous nation Our design is to eliminate all that

Cooperative Commonwealth-Mr. Heaps
is undesirable in the present economic system, and to keep that which is best, and to build upon that basis. Naturally this implies fundamental changes and a new mental attitude towards our economic problems. It means a considerable extension of the policy of government ownership, government control and regulation, beyond what we now have. I know that some hon. members are horrified at the thought of more government ownership or control, but I should like for a moment to enumerate some of the forms of government control that we now have and with which we come in contact in our daily life.
Takmg the federal government first, it owns or controls the post office. It owns or nominally owns a railway. Then it controls, through the agency of a railway board, railway rates. It owns harbours and canals, and only very recently there oame under the ownership and control of the federal government the radio broadcasting services in Canada. But there is a form of government control and regulation elsewhere b}' the federal government to a far greater extent than exists in any of the directions I have already mentioned. It has been stated in this house and on the public platform by members of the government that but for the tariff now existing in this country many of our industries could not possibly exist. So we see that in the tariff structure of Canada we have another form of government control and regulation. It has also been said by the Prime Minister and others that if the tariff had not been increased to the height it has now reached in Canada, some of these industries would have been driven out of business. So in the tariff we have a form of government control and regulation, and I regard it as a form of government control that acts simply for the protection of capital and in no way for the protection of those who are employed in industry.
In the provincial sphere, we find local governments owning or controlling hydro light and power, telephones, and, what may be of even greater importance to some people, the liquor business. Our provincial governments also have control of the educational facilities of the nation. A great many years ago the education of the rising generation was practically in the hands of private enterprise, but gradually we have reached the stage where private enterprise had to be supplanted by the state, and today education has become almost a state function in all parts of the country.
In the municipal sphere, we find a similar state of affairs. In many of our municipalities 53719-108J
the transportation facilities are owned and controlled by the municipalities. It would be almost unthinkable if the water supply, for instance, of any city were in the hands of private enterprise, or anything else which has to do with the health of the community. Municipalities also control parks and recreation facilities, hospitals, and in some cases cemeteries, as well as looking after the general health of the community. My hon. friend from Southeast Grey (Miss Macpbail) also adds golf courses, but I class them under the head of recreation, and not work.
In addition to what I have already enumerated, we find that various governments have introduced workmen's compensation acts providing for compensation to the man who is injured while at work. Minimum wage laws which affect different industries have also been introduced in different legislatures, and the hours of labour have been controlled. There have been similar enactments put on the statute books in all parts of this dominion, giving a certain control and regulation to the state of the industries affected.
What we are really asking for in this motion is that this idea of state control, ownership and regulation, should be extended a great deal further than obtains at the present time. I know that some hon. members of this house have a horror of the idea of government control or government regulation, but what is the position at the present time? Who is in control of industry in this country? Is it the individual or is it the banks? I venture to assert that most of the industries of this country are at this very moment owned by the banks or the great financial institutions of this country. So therefore when we advocate either state control or government ownership it really resolves itself into the question whether there shall be control and ownership by the banks or control and ownership by the state. And if we put that question plainly to the people of this country I 'have no hesitation in saying that they would prefer state control to banking control. Those who have been in control of the affairs of the nation in recent years have failed to grasp the significance of the vast changes which have been taking place in our midst. For many decades we have been building up a political democracy which finds expression through its representatives in this house. While that is desirable and is something which must be maintained, there has also grown up in this country a power which is a more potent force than parliament itself. I refer to the power of finance. I
1708	COMMONS
Cooperative Commonwealth-Mr. Heaps
am not entirely blaming the financiers for this state of affairs. I blame parliament far more because it ought to be sovereign in the country, and if parliament has allowed the financial interests to have such a controlling influence, then it ought to be the duty of parliament to see that the control of finance and credit should be in its own hands and should be utilized for the benefit of the people as a whole and not for the benefit of financial institutions.
We are told that if we allowed the state to own or control the industries of the country it would be doing away with that private initiative which helps to build up a nation. For a moment or two I want to deal with this question of private initiative, sometimes termed incentive, about which, if this debate :is prolonged, we shall hear a great deal in this house.
I wonder what incentive the average working man has at the present time. Take a man working on the railway. He gives the best years of his life in the service of the railway, helping to build up the system in this country, and after he has worked for ten or fifteen or twenty or twenty-five years what does he find? What is his position at this moment after twenty or twenty-five years of service? He is told that his services are no longer required, and after an experience of unemployment he has to go into the bread line and take his chance with the rest, becoming a recipient of public relief. Is that any incentive, or where is the opportunity of initiative? And yet that is what we find among hundreds of thousands of our people. The average working man who has laboured in industry for ten or twenty or thirty years finds, when he gets old, that he is supplanted by someone who is younger and more vigorous and is therefore able to turn out a larger amount of work because he is more physically fit for the task. We find, therefore that men are thrown into the scrap heap and told to go and shift for themselves, and if they are fortunate enough to reach the age of seventy they will then be entitled to five dollars a week.
Most working men today like farmers live on the borderline of poverty, and these people who have a hard grind to make a living, year in and year out, eking out a mere pittance, hardly able to put anything away for a rainy day, have not much urge in the way of initiative or incentive. I maintain that the very system under which we are living crushes out of the individual that incentive which so many of us would like to see among the people as a whole.

I wonder how many people have been in Ford's factory or any similar institution and had an opportunity of seeing just how much incentive there is for the workers there. The individual merely becomes a cog in the machine. This is true of every industry. Industry has become so specialized in every line of endeavour that at the present time the eight hour day is nothing but a monotonous grind, and instead of the machine becoming the slave of the individual the individual is made the slave of the machine. I entirely disagree with those who suggest that under a sane and more orderly social system there would be no room for that incentive that makes for invention and progress. Let me say something that I have said in this house before, because it is worth repeating. There is one profession whose members do not always regard the dollar as the sole motive for scientific advancement. In most of the engineering lines and among other professions the main motive no doubt is the desire to accumulate a little more wealth. But here may I say a word with respect to the medical profession. In the sphere of medicine it has been a time-honoured custom that those men engaged in research in medical laboratories, those who are able to discover something of advantage to humanity at large, never attempt to use their discoveries as means to gain any commercial benefit for themselves. Such discoveries are given to the world at large so that humanity may be the gainer as a result of the efforts of these research workers.
Even though money has not been the incentive to the medical profession in bringing about these changes which in some way relieve human suffering, I believe I can state with considerable confidence that medicine has kept pace with almost any other branch of scientific activity we know of, so that it ought to be obvious, that given something worth while to strive for, the human being will usually respond, refusing to regard money as the motive for engaging in work of real value. Most people would be satisfied with the thought that anything which they might do to improve conditions in the world at large and to make for a happier life and a better standard of living would bring its own reward.
During the hundred and fifty years or so that capitalism as we know it today has been in operation it has been of some advantage to mankind; it has done certain things which the present generation appreciate. But we say that it has more or less outlived its usefulness; it has reached the stage where it is beginning to decay and is unable to function as a sane

Cooperative Commonwealth-Mr. Heaps
or orderly system. It has almost perfected the art of production. We have produced wealth in abundance, wealth undreamed of a few generations ago; yet capital itself is at this moment rapidly disappearing from our midst. May I here make a distinction between capital and wealth? If the capital of a nation disappears it does not for a moment follow that one iota of wealth will disappear -I am of course referring to finance capital. Although, as pointed out this afternoon by the hon. member for Southeast Grey, a great deal of capital has disappeared from our midst during recent years, the wealth of the country remains intact, and all that is required is a sane system of planning whereby the wheels of industry will be kept running and men engaged in useful production.
Our indictment against capitalism is that it has made man the slave of the machine. On most occasions it has fought every effort made in the past to improve the conditions of the masses. In its competitive character it creates hatreds and jealousies; in its quest for markets it engenders war. It allows wealth to accumulate in superabundance in a few hands while vast numbers live on the border line of poverty and others in actual poverty and want. We in this corner of the house and many others in the house wish to replace these conditions by an economic structure which will really recognize the human being as all-important. Human wellbeing must therefore be the first consideration. We want competition replaced by cooperation. We want the human being to realize that his own and the community's interests are identical and that the wellbeing of the one is the wellbeing of the other. We want to abolish the real causes that lead to war. We want to abolish the idea that the interchange of commodities is a form of warfare, making people realize that, on the contrary, such interchange is the cement that binds nation and nation together. We want to eliminate that competitive individualism with the enormous waste and poverty resulting therefrom. We want to displace all this with an idea which will build up a strong and vigorous nation, where mutual help shall be the dominant factor instead of antagonism. If a labour government were in power today I would expect the faithful service of all citizens. As a writer in a British labour paper stated recently, under a labour government the state would enter upon the task of national reconstruction, keeping always before its eyes the principles of humanity. They should have precedence to profits.


Agnes Campbell Macphail: A labour government?


Abraham Albert Heaps: The hon. member for Southeast Grey asks, "a labour government?" I believe that if a labour and farmer government took control of this country we would expect just that thing. As far as I am concerned I do not care whether a government under another label brings in these reforms and fundamental changes in our economic life. What I am anxious to see is that these changes are made. However, I have little hope that any other group or party will be responsible for these changes except that group which happens to sit in this comer of the house. A labour or a farmer government, a combination of both, or the Cooperative Commonwealth Federation if given a mandate by the people, would inaugurate a policy which would govern the nation as though it were an association of citizens, cooperating to provide by the most economical methods for the material needs of all the people, requiring faithful service of all members of this association, and assuring to them a means of living a healthful and decent life.
This afternoon certain statements were made as to the constitutional aspects of this question. Whenever we desire to bring about a fundamental change, particularly in the economic life of the people of this country, we are always told that there is a constitutional difficulty. Let me say that where there is a will to bring about these changes which will improve the lot of millions of our people, then there will be found a way out of these constitutional difficulties. It is only when there is no will that there is no remedy. A few years ago the same constitutional difficulty was raised with regard to old age pensions, but we find that the constitutional objections were overcome and today approximately
45.000	people are receiving the benefits of old age pensions. If it had been necessary for the provinces to agree to certain constitutional changes to make that possible, these
45.000	people probably would not be in receipt of pensions. When the people of this country are prepared to bring about the changed economic conditions which are in keeping with the general terms of the resolutions proposed by the hon. member for Winnipeg North Centre, I think ways and means will be found of adjusting our constitution to meet the needs of the people. As has so often been said by others, the constitution was made for the people of Canada, not the people of Canada for the constitution.


Edward Joseph Garland: Mr. Speaker, in connection with this resolution I find myself in almost complete agreement with the utterances of those who have preceded me.
1710	COMMONS
Cooperative Commonwealth-Mr. Garland
I regret that no member of any other party in this house has so far taken part in the discussion. I trust that before the debate is concluded we shall have the result of their deliberate consideration with regard to a proposal which is not only fundamental but which is receiving with extraordinaiy rapidity the marked approbation of the people of Canada from coast to coast. Nothing has interested me so much in the last few months as the astonishing display of enthusiasm at meetings wherever this question has been discussed, the proposal to bring into being by constitutional and legal means a new social order has been considered. I wish hon, members could have attended some of these meetings and have heard the expressions of opinion of those who attended, the applause, the condemnation of existing injustices, and the complete agreement in the general denunciation of the inhuman and unsocial character of the economie'order under which at present we are condemned to function.
As I say, I find myself in accord with the words used by the hon. members who have preceded me. They have done something which neither of the old political parties, with all their experience, with all their love for the existing capitalistic system and their reverence for those institutions which they are determined to keep alive, has yet done. We have developed a constructive social plan. It is true that it is tentative in character and will be subject to necessary modifications from time to time, but hon. members on both sides of the house, particularly of the government, have so far utterly failed to offer the people of this country any constructive plan whatever. They have shown that they are bereft of courage and vision in the handling of the situation, even if they have the economic knowledge, which I very seriously doubt.
We have been in an economic tailspin, if I may use the phrase, for three years. We are now entering the fourth year, and any tail-spin which is permitted to go on unchecked will sooner or later bring about the crash. That is just about the stage this country has reached. Even the Prime Minister (Mr. Bennett) has expressed the gravest alarm at the dangerous financial, commercial and economic condition of our people. But what is he doing about it? What is his plan? Does he think he can make the present social and economic order function intelligently? Does he think that under capitalism he can ever undertake the distribution of the collectively produced wealth of Canada upon a fair and equitable basis? Does he imagine that under

capitalism he will be able to cure unemployment? Does he believe that under capitalism he is going to establish equality of social and economic life for the people of Canada? If he does, then I tell him that he does not know anything about economics.
During the three years of this tailspin we have had no constructive leadership; it has been just a jumping from one crazy idea to another. First, high tariffs; then, rigid deflation ; at another time the expansion of money in order to relieve unemployment; at still another time the contraction of money; and today we have the all-pervading policy of economy. This is the most destructive deflationary policy which could possibly be conceived, and the most stupid which could be inaugurated in a country where, as other speakers have suggested, the only problem is to discover how best to consume the wealth of goods which we are so capable of producing collectively. There has been no intelligent leadership, on the part of either the bankers, the statesmen, the big businessmen or the political parties during the past three years. They have all concentrated with everlasting energy and persistent resolution upon the effort to "just get by" in the hope that some expected upturn which they have no justification to expect, will occur. There has been no application of rationality to the problem; there has been no wish to experiment; there has been no boldness in policy; there has been no understanding of the modern economic world in which we live, in short there has been no leadership.
Debatable as it may be, inadequate as I grant you it possibly is, we in this corner of the house at least are offering to the people some leadership, some way out. You may call it wrong, stupid, and futile. I believe it to be sound, intelligent and rational. If it is not, then in the most friendly sense I challenge hon. members on both sides to disabuse me of my consciousness in this regard. But let me point out for their interest that men who hold infinitely higher positions than I ever hope to attain have already expressed themselves in no uncertain terms on this matter. Let me take words I used last year and use again, the words of Lord Marley, speaking on June 22, 1932 (not long ago), in the House of Lords in Great Britain, that chamber which with the exception of our own upper house is perhaps the greatest bulwark of the existing capitalistic system one can find anywhere on earth. This noble Lord said:
The capitalist system is tottering. Unfortunately we cannot be entirely detached because

Questions
we are affected in the common smash. The difficulty of the system is how to consume the goods which the system is able to produce.
Even he understood that.
The greatest danger in the world from the system-
And I ask hon. members to note these words of his.
-is the danger that the only means of consuming these goods to an adequate extent is by another world war.
Let those significant words sink into the consciousness of hon. members both opposite and around me. One can philosophize at times, but after all we are facing practical difficulties and issues now. I ask hon. members what they conceive to be the cancer, the canker, that is wrecking this civilization as surely as I am standing here. With all the earnestness, sincerity and moderation at my command I say this. That cancer is that we have an	economic	code which	basesits conception of success upon the attainment of wealth. We do not ask how the wealth is attained. It may be by any kind of trickery or chicanery, by stock juggling, by syndicates	formed to	exploit	the	shareholders of a	company;	it may	be	by adozen devices well known	to hon.	gentlemen,
well known to competitive commercialism. But I say to them that the philosophy that underlies and governs such a system belongs to a day of primitive and primeval barbarism and not to a modern Christian civilization. Somebody said this afternoon that there had grown with the system the strange idea that the survival of the fittest was the law which should govern-the law of the jungle.



BUSINESS OF THE HOUSE


Richard Bedford Bennett: Before the house rises, I wish
to move a resolution that I promised the last day before the fall adjournment. I move:
That the following resolution passed by the house on October 7, 1932, be rescinded:
"That on and after Monday, the 10th instant, and every day thereafter, government orders shall have precedence over all business except questions by members and notices of motions for production of papers."
And that standing order 15 be adhered to in the same manner as though the session had opened on January 30, 1933.
It will perhaps be recalled that I indicated to the house we would treat private members' days as though the sassion opened on the 30th day of January, and this is to give effect to that understanding. It is well that the motion should be passed now, because tomorrow is
a private members' day, and the hon. member for Bow River (Mr. Garland) will be able to continue his remarks.


[Stage Direction]
Motion agreed to.
At six o'clock the house adjourned, without question put, pursuant to standing order.
Thursday, February 2, 1933