1933-02-06

Hon. HUGH GUTHRIE (Minister of Justice) moved:: That a message be sent to the Senate to acquaint their honours that this house has appointed the honourable the Speaker and Messieurs: Barber, Bertrand, Bourassa, Boyes, Butcher. Carmichael, Charters, Ohevrier, Cotnam, Dubois, Dupuis, Factor, Ferland, Fontaine, Fortin, Fraser (Cariboo), Gagnon, Girouard, Guthrie, Hepburn, Irvine, Jones, Lafleche, Larue, LaVergne, MacMillan, MoGillis, McGregor, McIntosh, Marcil, Peck. Perley, Sii George, Pouliot, Quinn, Rheaume, Short. Smoke, Stirling, Thauvette, Thompson (East Simcoe), Thompson (Lanark), White (London), Wright, a committee to assist His Honour the Speaker in the direction of the library of parliament, so far as the interests of the House of Commons are concerned, and to act on behalf of the House of Commons as members of a joint committee of both houses on the library.


[Stage Direction]
Motion agreed to.

Hugh Guthrie: That a message be sent to the Senate to acquaint their honours that this house will unite with them in the formation of a joint committee of both houses on the subject of the printing of parliament, and that the members of the select standing committee on printing, viz., Messieurs: Anderson (Halton), Baribeau, Belee, Boulanger, Bourgeois, Brasset, Charters, Desrochers, Dubois. Embury, Esling, Factor, Fortin, Girouard, Gott, Gray, Hay, Heaps, Howden, Lucas, MacLean, McKenzie (Assini-boia), McLure, Maloney, Marcil, Matthews, Moore (Chateauguay), Munn, Murpliy, Parent, Peek, Perras, Piekel. Porteous, Price, Quinn, Rheaume, Rinfret, Roberge, Robinson, Rowe, R verson, St-Pere, Short, Simpson (North Simcoe). Spankie.. Spencer, Spotton, Taylor, Tetreault, Verville, Wilson, Woodsworth, Wright, will act as members on the part of this house, on the said joint committee on the printing of parliament.


[Stage Direction]
Motion agreed to.

Hugh Guthrie: That a message be sent to the Senate to acquaint their honours that this house has

Business of the House
appointed the honourable the Speaker and Messieurs: Ahearn, Barrette. Black (Halifax), Bourassa, Carmichael, Cayley, Garland (Car-leton), Hanbury, Howard, Howden, Lafleche, Macphail, Miss, Mullins, Ryerson, Senn, Spankie, Spence, Sproule, Thauvette, a committee to assist His Honour the Speaker in the direction of the restaurant, so far as the interest of the Commons are concerned, and to act as members of a joint committee of both houses on the restaurant.


[Stage Direction]
Motion agreed to.

Hugh Guthrie: I lay on the table the report of the superintendent of penitentiaries re Kingston penitentiary disturbances. I move that the report be printed, five hundred copies in English and two hundred and fifty copies in French.


[Stage Direction]
Motion agreed to.

Mr. SPEAKER:: I have the honour to inform the house that I have recived a communication from two members, notifying me that the following vacancy has occurred in the representation, viz:
Of Miaxiime D. Cormier, Esquire, as member for .the electoral district of Restigouche-Madawaeka, by decease.
And that I have issued my warrant to the chief electoral officer to make out a new writ of election for the said electoral district.
And also, that I have issued my warrant to the chief electoral officer to make out a new writ of election for the electoral district of Yamaska, consequent upon the judgment of the Supreme Court of Canada declaring the election therefor, held on the 28th July, 1930, to be null and void.



LABOUR CONFERENCE

Hon. W. A. GORDON (Minister of Labour) :: I lay on the table of the house certain orders in council passed pursuant to the relief legislation. Also, Mr. Speaker, I desire to lay on the table the authentic text of the draft convention which was adopted at the fifteenth session of the International Labour Conference, 1931, in accordance with the provisions of article 405 of the treaty of Versailles and the corresponding provisions of other treaties of peace; also text of an order in council which has been adopted dealing with the competence of parliament and of the provincial legislatures respectively with regard to the subject matter of this draft convention. The texts of the draft convention and of the
order in council above mentioned have been transmitted to the fautenanhgoV'ermors of the several provinces.



BUSINESS OF THE HOUSE


Hon. E. N. RHODES (Minister of Finance):: When notice was given of the introduction of this bill to amend the Income War Tax Act, and of the one that follows, to amend the Salary Deduction Act, 1932, it was believed that by having them placed on the order paper, under the heading "Introduction of Bills," these bills could be proceeded with merely by introducing them in the ordinary course inasmuch as they were bills proposing to continue existing acts for a further period of a year. It subsequently transpired that there is a specific rule of the house which requires that a tax measure must be preceded by a resolution. Under these circumstances I would ask the unanimous consent of the house, to accept this notice of introduction as notice of the resolution, in which event I would move that the house do to-morrow resolve itself into committee of the whole to consider the proposed resolution. The advantage of that course would be that we could proceed to-morrow with the resolution; otherwise, the next government day being Friday, we should be precluded from the consideration of the resolution until Friday. In these circumstances I would ask whether I might have the unanimous consent of the house. If not, it only remains for me to put the notice on the order paper and wait until Friday.


Right Hon. W. L. MACKENZIE KING (Leader of the Opposition):: The minister's remarks apply, I take it, to the two last measures on the order paper. So far as the opposition is concerned, there is no objection to what he has proposed.



INCOME WAR TAX ACT AMENDMENT

[Stage Direction]
Hon. E. N. RHODES (Minister of Finance) moved that the house go into committee tomorrow to consider the following resolution:
Resolved, that it is expedient to continue in force until March 31, 1934, the provisions of an act to amend the Income War Tax Act, chapter 44 of the statutes of 1932, and to provide that the persons therein described shall be liable to pay the tax thereby imposed in respect of salaries or pay paid to them by the Dominion of Canada during or in respect of the fiscal year 1933-34, in accordance with the provisions of the said act.
He said:	His Excellency the Governor
General, having been made acquainted with
Salary Deduction Act
[Stage Direction]
the subject matter of this resolution, recommends it to the favourable consideration of the house.
Motion agreed to.


[Stage Direction]
Hon. E. N. RHODES (Minister of Finance) moved that the house go into committee tomorrow to consider the following proposed resolution:
That it is expedient to continue in force the provisions of the Salary Deduction Act, 1932, until the 31st day of March, 1934, and to provide that the provisions of the said act shall apply to the indemnities of members of the Senate and the House of Commons for the session of parliament which commenced on the 6th day of October, 1932.
He said:	His Excellency the Governor
General, having been made acquainted with the subject matter of this resolution, recommends it to the favourable consideration of the house.
Mr. POULIOT:: Does this mean that we
are postponing our objections until to-morrow?


Mr. DUFF:: I do not wish to impede the progress of the minister's resolution, but I want to say here and now that I am just as much opposed to these resolutions as I was last year. I am opposed to any reduction in the salaries of the officials of the House of Commons or anyone else.


Pierre Édouard Blondin: There will be a proper
time at which to express objections.


William Duff: I contend that I am entitled to express my objection upon the moving of the resolution.


[Stage Direction]
Motion agreed to.

[Stage Direction]
On the orders of the day:
Mr. GEORGE W. McPHEE (Yorkton): I should like to address a question to the Minister of Agriculture (Mr. Weir), in connection with the now much discussed deal with Russia to exchange Canadian cattle for Russian products. My question is based upon a statement made last Friday evening by the hon. member for Battle River (Mr. Spencer). The hon. member stated that Mr. Serkau had been keeping closely in touch with the Minister of Agriculture andfMr. Rhodes.]
Pierre Édouard Blondin: The hon. member should state his question.


Mr. McPHEE:: This is the basis of my
question.


Pierre Édouard Blondin: It is not permitted to
quote in this manner from debates of the same session.


George Washington McPhee: The hon. member stated
that the minister had given consent to Mr. Serkau before he went to New York to consult with the Russian agent, and that it was with the consent and approval of the minister that he went to Russia.


Pierre Édouard Blondin: The hon. member should
proceed with his question.


George Washington McPhee: My question is:	Are or
are not the statements made by the hon. member for Battle River correct?


An hon. MEMBER:: Ask him.


Hon. ROBERT WEIR (Minister of Agriculture) :: I would like the hon. member to
suggest what the withholding of my consent would have to do with that gentleman going to New York?



QUESTIONS

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

Mr. MARGIL:: 1.	Has the Postmaster General received a petition signed by the patrons of Sillarsville post office, asking for the appointment of Mrs. E. G. Sillars as postmistress to succeed her late father-in-law, Hugh Sillars?
2.	If so, what action has been taken in this
matter?	[DOT]


Mr. SAUVE:: 1.	Yes.
2.	Prior to receipt of petition, instructions were issued for appointment of Mr. Hudson Adams. In view of petition, the case is being given further consideration.


MAIL SERVICE FROM BONAVENTURE STATION
Mr. MARCIL:: 1.	Has a mail contract been awarded for the mail service between Bonaventure railway station and Bonventure East?
2.	If so, to whom and at what price?
3.	Who were the other tenderers and what was the price of each tender?


Mr. SAUVE:: 1.	Yes.
2.	Pierre Henry, at $144 per annum.

Questions
3.	Per annum
Barthelemi Henry	 S240
Ovide Bourdages	 298
Pierre G. Poirier	 340
Alfred Bourdages	 344
Fermin Bourdages	 354


JAPANESE LEAVING CANADA
Mr. REID:: 1.	Has any record been kept by the Department of Immigration of those of Japanese origin leaving Canada for Japan?
2.	If so, what numbers have left Canada during the years 1927, 1928, 1929, 1930, 1931 and 1932?
3.	What percentage of those leaving Canada for Japan have left with the intention of returning or on permit?


Mr. GORDON:: 1.	The only record kept by the Department of Immigration and Colonization of Japanese leaving Canada covers those registering outward with the intention of returning to Canada.
2.	The number of outward registrations on record are as follows:
1929		 798
1930		 871
1931		 835
1932		 711
3.	No information.


HAVRE ST. PIERRE, QTJE., RECONSTRUCTION WORKS
Mr. CASGRAIN:: 1.	Has the government received a petition from the municipal council or citizens of Havre St. Pierre, on the north shore, in the county of Saguenay, requesting that improvements and reconstruction works be carried out at the wharf in this locality?
2.	If so. does the government intend granting this petition?


Mr. STEWART (Leeds):: 1.	Yes.
2.	Matter under consideration.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. GOTT:: 1.	How much has the present government spent in direct relief since assuming office?
2.	How much was spent through unemployment schemes?
3.	How much was loaned to provinces for relief work?
4.	What amount was loaned to each province?


GRANDES BERGERONNES, QUE., WHARF
Mr. CASGRAIN:: 1.	Has any money been voted and spent to
improve the approaches of the wharf at Grandes Bergeronnes, in the county of Saguenay, to enable boats to land more easily at this point?	.
2.	If so, what money was spent for this purpose?
3.	Who requested that such work be undertaken?
4.	What is the name of the superintendent in charge of said work?
5.	By whom was he recommended and appointed ?
6.	What was the total cost of this work?
7.	What are the names of the persons engaged in this work?



MOTIONS FOR PAPERS


[Stage Direction]
Mr. LaVERGNE:
For a copy of all documents, correspondence and orders in council with respect to part of Labrador, heretofore situated in the province of Quebec, taken over by the government of Newfoundland, and now forming part of the Dominion of Newfoundland.

Mr. MARCIL:: For a copy of the evidence and a report of the investigation in connection with the charges against Edmund Nadeau, Indian agent, for the Maria Indian reserve, together with the correspondence and report regarding the appointment of Reverend J. A. W. Provencher as his successor, and that of J. Adhemar Cyr, presently in charge of the Indian agency.



CAMPBELLTON, N.B., POSTMASTER

Charles Marcil: For a copy of all documents bearing on the appointment of the postmaster of Campbellton, New Brunswick.



VANCOUVER SURVEYOR OF CUSTOMS AND EXCISE

Mr. MACKENZIE (Vancouver):: For a copy of all correspondence in connection with the demotion of R. C. Maxwell, former surveyor of customs and excise at port of Vancouver.



VANCOUVER COLLECTOR OF CUSTOMS

Ian Alistair Mackenzie: For a copy of all correspondence in connection with the retirement on superannuation of George L. Allen, collector of customs at the port of Vancouver.



VANCOUVER CHIEF CLERK OF CUSTOMS

Ian Alistair Mackenzie: For a copy of all correspondence dealing with the retirement on superannuation of C. A. Whitehead, chief clerk of the customs department at port of Vancouver.

1818	COMMONS
Economic Conditions-Mr. Speakman



EXPENDITURES BY DOMINION GOVERNMENT

Ian Alistair Mackenzie: For a return showing:
1.	Amount paid by the government of the Dominion of Canada consequent upon the passing of tlie Maritime Freight Rates Act of 1927
2.	Amount spent by the government of the Dominion of Canada on the Intercolonial Railway since confederation.
3.	Amount spent by the government of the Dominion of Canada on the various harbours of Canada.
4.	Amount spent by the government of the Dominion of Canada by way of assisting the various harbour commissions of the Dominion of Canada.
5.	Amount spent by the government of the Dominion of Canada upon the canal system of the Dominion of Canada in: (a) the province of Ontario; and (b) in the province of Quebec.



VICTORIA, PJBX, WHARF

Mr. MacLEAN:: For a copy of ail letters, telegrams and correspondence regarding the work in connection with the extension and repairs to the wharf at Victoria, Prince Edward Island; also a copy of all tenders and a statement showing in detail the names of the different men employed on the work, the amount paid to each, the names of all parties from whom lumber and other materials for the wharf were purchased, the amount paid in each case, the name of the inspector and the amount paid to him for work done.



DISMISSAL OF ALPHEE OTIS

[Stage Direction]
Mr. LaRUE:
For a copy of all telegrams, correspondence and other documents, including copy of the evidence and proceedings of the inquiry in the possession of the Minister of Marine, with respect to the dismissal of Alphee Otis as light and fog signal keeper at Sainte-Felicite, Matane county, on September 16, 1927.


Mr. ALFRED SPEAKMAN (Red Deer) moved:: Whereas; the question of public and private indebtedness has become one of our greatest and most perplexing problems, enhanced during the past years by the extremely low price level of all primary commodities, through which this indebtedness must be in large part met, and the effect of which has been to double and treble the actual burden of these liabilities; and,
Whereas; this fact has been recognized in respect of certain international obligations, and has become a practical issue in respect of the public obligations of many countries; and, Whereas; no such recognition has as yet been given to the heavy private indebtedness within this country, although these, together with the high interest rates which prevail, constitute 
just as heavy and impossible a burden to the individual, as do national and international obligations to the countries concerned; and,
Whereas; this situation is one of the greatest factors in the present economic depression, and is one of the greatest barriers to the financial recovery of agriculture and industry, and as such, deserves and commands the immediate attention of this parliament;
Therefore be it resolved, that, in the opinion of this house, the government should give serious and immediate attention to the question of debts and interest rates within this country, and the possibility of their reduction, either by way of direct action, or by the submission of the entire problem to a special committee of this house, in order that the subject may be fully inquired into, and if possible, some solution found.
He said: Mr. Speaker, this resolution which stands in my name and which is now before the house deals with a problem and presents a situation which is familiar to most hon. members and which, I think, demands the serious consideration of us all. In drafting this resolution and its preamble I have endeavoured to make it, so far as possible, selfexplanatory, so that it will contain within itself not only an indication as to the problem involved but one or two of the main arguments in support of the suggestion which is made, that suggestion being contained in the germane part of the resolution and asking that the government take into serious consideration the possibility of some reduction being made in the debts and interest of the people of this country, whether that reduction may be made by way of direct action or whether the subject may be dealt with through the appointment of a committee or in some other manner.
It might be said that I have not been very definite in this resolution. Not only do I admit the fact that I have made no definite suggestion as to the percentage of reduction which is necessary or which might take place, or as to the method which might be followed in applying such a reduction, if one were found possible, but I have purposely refrained from attempting to speak in a definite and dogmatic manner, for I recognize as clearly as does any other hon. member that this subject is one of tremendous difficulty; that it is fraught with complexities and that it can be approached only with great care and dealt with after careful consideration and deep thought.
Owing to the fact that my time is limited I shall not try to deal with the matter in other than a somewhat superficial way. Did my time permit, I should be glad to go into it in a more fundamental manner, and to discuss the question as to whether the growth

Economic Conditions-Mr. Speakman
of debt was an inevitable and integral part of the system under which we live and whether it were possible under any circumstances for the debts of the world to be paid. But as my time is limited I shall confine myself to the more obvious phases of the situation.
I have stated that I am aware of the difficulties that are involved. I am also aware of many of the criticisms which might and undoubtedly will be advanced in respect of such a suggestion, and with your permission, sir, I shall endeavour to anticipate one or two of the more serious and obvious. It might be suggested in the first place that this question of debt reduction, so far at least as it applied to agriculture, was at this time wholly academic in that now and under present conditions it makes little difference to the average farmer whether his debts stand as at present or whether they are materially reduced, as in few cases on the farm is the farmer able out of existing prices to pay any part of that indebtedness, as it now stands or if reduced. But I must point out in connection with that objection, first, that this resolution does not confine itself wholly to agricultural indebtedness but deals with indebtedness as a whole and, second, that we surely may anticipate that there will be some change in the situation. As a matter of fact, were we to follow that line of action or of inaction which led to an indefinite perpetuation of the present situation at least in respect of agriculture, we might accurately anticipate, not that the question of debt reduction would be one of prime urgency, but that not only would agriculture itself gradually become bankrupt but those who are directly or indirectly dependent upon agriculture would follow that pursuit into bankruptcy. Whether by the flux of time- and I doubt this-or by definite action taken, I am taking it for granted that some change in the situation must be brought about, and when that time comes, then the question of debt and its payment becomes one of immediate and urgent consideration.
It might also be suggested by way of criticism that in this resolution I am calling upon a federal government to consider matters which, under our constitution, are outside federal competence. I have no such purpose in mind nor am I suggesting that the federal or any other government should exceed the bounds of its own constitutional jurisdiction. I am not suggesting that we should ignore the law as it stands, but I am proposing that among the various govern-53719-115J
mental authorities, federal and provincial, within this country, in cooperation and joint action lie sufficient power and authority to deal not only with the question of debt, but with any other question in which the general good of the Canadian people is so deeply involved. I am suggesting that this government might well consider the question to the extent of its own jurisdiction and competence and, realizing that a part at least of the question of interest lies within federal competence, might take the lead, as the senior body, if one might so term it, within Canada in bringing about conference and cooperation as between itself and the provincial governments with the object of deciding upon and, if possible, putting into effect some policy which would relieve this intolerable burden. That is as far as my suggestion goes. I might further suggest along the same lines, that the federal government, as a federal government, is deeply concerned and that the resolution now before us might also contain a reference to the international situation and the part which Canada must play.
The other criticism which might well be advanced, and which as a matter of fact has been advanced throughout the country, is one touching the financial morality of such a suggestion. There is the question as to whether or not by any action, governmental or otherwise, bodies, individuals, corporations or countries which have loaned money should be deprived of a part of their rights when they demand repayment. There is the question as to whether we should suggest that a creditor organization which has loaned, say, $1,000 some years ago should now content itself with the receipt of $500. I use these figures arbitrarily and merely by way of illustration. In this connection ! would ask the question: What was loaned at that time? Money? Yes. But what is money? I am not going to enter into an academic discussion concerning money, but I am going to suggest that, after all, what was actually loaned had in itself no intrinsic value. What was loaned was potential purchasing power, potential goods, potential commodities, potential service. In other words what was loaned was the equivalent of certain goods or services which might be rendered. To my mind there is nothing unjust in the suggestion that in these days of public stress, in these times when eveiy citizen in the land is sharing or should share the effects of present conditions, we should at least consider the question as to whether it would not be perfectly fair to return to the creditor the same value in purchasing power, the same value in respect
1820	COMMONS
Economic Conditions-Mr. Speakman
of goods and services purchased, as had been advanced, together with fair interest. To my mind that is a matter which might well be considered; it is a question which few have answered, and it is a suggestion which will come within the strictest bounds of financial morality.
Then there is another aspect of the matter which is much more serious. We are well aware that during a war-in fact at any time of public emergency-the legal right of individuals must at times give way to the public weal. I am suggesting there is more involved in this matter of debt than merely a legal demand upon some person to repay a sum of money borrowed, than merely the legal right of some individual or corporation to receive repayment of a sum loaned. There is the question of the effect of the debt situation upon the entire community, upon the welfare of all the people and of the state itself. To my mind not only is there a tremendous question involved but in this situation there is a definite menace to the well being of all of us. After all, concerning certain classes of international indebtedness, it has been recognized throughout the world that the repayment of such debts, even if possible, would be detrimental to the public weal-would be detrimental alike to both the loaning and borrowing countries. That was recognized fully in respect of the German war reparations. Step by step, period after period, conference after conference, the demands for reparations have been reduced until at Lausanne those demands were practically wiped out. They were not, in my view, wiped out from any altruistic motives; they were wiped out because of the definite recognition on the part of the allies that they would suffer equally with the country called upon to make the payments. The allies recognized that the withdrawal annually of those large sums of money from the current purchasing power of the world, that the payment of those moneys without a corresponding exchange of goods, was detrimental to public interest and a definite handicap to the restoration of trade. The same argument could be applied with equal power and equal truth to other classes of war debts. It will be noted that to-day the statesmen of the world recognize that fact, and not only is debtor country after debtor country defaulting or threatening to default, repudiating or threatening to repudiate payment of the moneys they owe, but even Great Britain herself, whose financial morality has never been questioned, and who has prided herself upon her ability and willingness at 
all times to pay every dollar when due, has come to the conclusion, and has so notified her chief creditor, that some different arrangement must be made, and that the latest payment she made may be the last under present circumstances.
Again, Mr. Speaker, the withdrawal of that percentage of current purchasing power, the absorption of that portion of the national income along unproductive lines is a menace and barrier to future trade recovery. To my mind it is the impelling motive, and will be the impelling motive when these arrangements are perfected, and when these debts in large part will be-and I believe they will be-wiped out and cancelled. After all- and this is a somewhat paradoxical situation -the ill effects of payments of international debts is felt just as much by the creditor nation as the debtor nation. To-day we have the seeming anomaly of the United States, the chief creditor country of the world, declaring on the one hand a definite policy providing for debt repayment, and, on the other hand recognizing, as every country must recognize, that in the last resort those debts must be paid in goods, refusing to accept payment in that form. She realizes that such payment would not only inflict hardship upon the country charged with payment, but would inflict greater hardship upon herself. To avoid that eventuality they have raised barriers to prevent the payment of those debts in goods, because if the debt were paid in that way great quantities of goods would be admitted into the country without calling for the export of other commodities in return. Nations of the world are beginning to realize that such a situation would end in the closing of factories of the creditor country, and a tremendous increase in unemployment figures. I cannot but believe that what applies to war debts or reparations must apply with equal force to other forms of international indebtedness. Every factor which makes it impossible or inadvisable to pay war debts in full operates to exactly the same degree and in exactly the same way in respect of all other international obligations. There may be a difference of course, from an academic point of view, or from the point of view of financial morality, if you will-a difference in the origin of the debts, or a difference in the purpose for which those debts were incurred. But from the business point of view, and that is the aspect from which I choose to discuss it, there is no difference in the effects of the repayment, or the demand for repayment, as between one form of international liability and another.

Economic Conditions-Mr. Speakman
Now as my time is passing rapidly and, as these arguments are being given increasing recognition throughout the countries of the world, may I suggest that some of them apply with almost equal force to internal and private indebtedness? When we survey the debt situation throughout the world and endeavour to compute the amount which is now owing we find a sum which is so huge as to stagger the imagination. Four hundred billion dollars, the computed amount of world indebtedness, means nothing to me personally. I can no more comprehend it than I can comprehend the computations by which astronomers measure the distances between stars or the speeds at which certain stars may travel in their orbits. Four hundred billion dollars means as little to me in actual effect as the distance represented by a light year. Any consideration of that sum, any question of repayment in full or even in large part becomes not only meaningless but positively ludicrous. When you consider that the interest alone at five per cent amounts to $20,000,000,000 a year on world obligations, I think it becomes obvious that the business of this world, the production of this world, the ability of this world to pay must fall infinitely short of that vast sum.
Now we turn to private indebtedness, internal indebtedness, the discussion of which is the main purpose of this resolution, and which to a much greater degree than international indebtedness is in out hands, within our own competence, and is a much more immediate and urgent problem as far as we are concerned. I have been endeavouring to compute with as great accuracy as possible the aggregate of debt within this country. I have been unable to arrive at an accurate computation, but roughly speaking, drawing upon the last census returns I find that in interest bearing bonds publicly issued, that is federal, provincial and municipal, we owe $4,600,000,000 of which $3,220,000,000 is owing in Canada and $1,380,000,000 outside of Canada. Then I find also that other bonded debts, that is of railway and other corporations, amounts to nearly as great a sum. I say "nearly"; a billion dollars less, but what is a billion dollars in view of sums such as I have indicated? Their bonded indebtedness amounts to something like S3,500,000,000, of which $1,500,000,000 is due in Canada and nearly $2,000,000,0000 due outside of Canada.
Then I find that mortgages upon farms amount to approximately $700,000,000. There is a question in doubt in regard to that, I have been unable to obtain satisfactory information as to whether that includes all forms of sale agreements on farms, some say
it does, some say it does not, I have been unable to ascertain from any of our authorities whether in taking the census all census takers treated those questions alike, and secondly, as to what actually was involved. But the weight of opinion is that this does not include agreements of sale, but only mortgages, where the money has been actually loaned to an individual already owning his land. And this total does not include mortgages on town or city property, but only farm mortgages.
Then I find that the sums owiing to banks of this country by individuals and corporations amounts to somewhere about . $2,500,000,000. Again I have been unable to get definite details as to that indebtedness, but that figure is given me from the census office from the best authorities that I can consult as approximately the amount owing to the banks at the present time.
These figures then, totalling about $12,000,000,000, can be taken as fairly definite. But they do not include, as I say, mortgages on town or city property, it is unlikely that they include amounts owing on sales agreements on farm and other properties, and they do not include the vast total of relatively small debts owing by various individuals and companies, to retail stores for instance. So I think it would be safe to estimate that you can add another five or six billion, but I shall confine myself to the $12,000,000,000 definitely indicated, merely suggesting that this is not the whole. A tremendous load, you will say, upon a population the size of ours. Including interest it calls for an enormous percentage of our national income. As to the interest charges, that again is somewhat uncertain because the rate of interest varies greatly, from perhaps 4i per cent in some favoured cases, 5 per cent on some classes of bonds, up to 8, 9, and 10 per cent upon certain classes of mortgages and other liabilities. Indeed, Mr. Speaker, I know that in many cases, through fees, charges on renewals, compounding of interest, it amounts to as high as 12 and 14 per cent for some unfortunate people. But even if you take it on an average at 6 per cent and apply it only to the $12,000,000,000 of which we have definite record we have a sum of $720,000,000 a year due in interest, an amount double or treble the entire value of this last year's wheat crop.
Now what is the effect of that? I must deal with it very briefly, and merely from two aspects. First as to the effect on the public weal, using the term commonly used, one expressing a situation of very great importance. What is the effect of the with-
1822	COMMONS
Economic Conditions-Mr. Speakman
drawal from channels of consumption, from current purchasing power, of so large a sum? Of even so large a sum as that part which is paid? It must be remembered in this connection that a large part of these annual payments is due, not to men of moderate means, who will spend the greater part of their income in the purchase of commodities or services, but to men or corporations whose income already covers their needs, and the bulk of whose surplus income must go not into purchasing channels but into investment. Now investment is necessary and good. But the common form of investment is either bonds or additions to our productive plant or its improvement. No matter how it is invested it is not added to the purchasing income of this nation in respect to its purchase of goods.
What is the effect of its withdrawal from current purchasing power? The effect is obvious on all sides, in every country. As you withdraw purchasing power-it is true that this is only one factor in the situation- the inevitable result must be unsold goods and crashing price levels. Both of those conditions are with us to-day, and to this the debt situation, the payment of debt and of interest as far as it is paid, is one of the main contributing factors. It is for the public good- including the cerditors in this country-to see a revival of trade, an increase in the price level of primary commodities, a general speeding up of the wheels of industry. This can only be accomplished through an acceleration of and adding to the means of consumption. I must leave that, for time will not permit any detailed discussion of the point.
Now I come to the effect of debt on the private individual-its damning and crushing effect-and if I confine myself largely to its effect on agriculture it is from no lack of realization that it applies with equal force and weight to other industries and individuals; but I am familiar with its effect on agriculture, and I prefer to speak of that which I know. Take the case of the average farmer to-day-and I am not speaking now of the farmer whose position has always been hopeless; I am not speaking of the inefficient farmer, but the average farmer who is recognized by those who know him as being as efficient and courageous an individual as will be found in this country. As a matter of fact, when you take into consideration the ordinary vicissitudes of farm life, the uncertainties through climatic conditions which must always be the farmer's lot, you will recognize that to be a farmer continuously, to stay with the job year in and year out throughout a lifetime, requires courage, 
patience, perseverence and optimism of no mean order. But he is content with that.
Consider, however, the' situation of these men to-day. Some years ago, for purposes of increased production, in some cases because of the encouragement offered by the high price levels, because of the demand made on the farmer for increased production, because of governmental and financial encouragement, many of these men, too many of them, went into debt. I am not discussing the question whether or not they Should have gone into debt. I suppose if our foresight had been as good as our hindsight, many of us would have acted differently four or five years ago than we did. But they did go into debt for business purposes, and certainly for purposes perfectly meritorious. They borrowed money, mortgaged their farms and other property as security for the payment of that money, and anticipated at that time, as they had every right to anticipate from the price levels, the general conditions, future prospects, and from the optimistic statements of every political and financial leader in the country, that they would be able to borrow in safety and repay when the time came.
Prices crashed and this money, we must remember, was borrowed at that time mainly on high prices. That statement will go unchallenged. Certainly no farmer has borrowed, at any rate very few farmers have borrowed any money since prices fell. No money has been loaned since that time. So that I am safe in saying that the debt was incurred on high price levels. Now the farmer finds himself with a debt which was a moderate and reasonable one at the time it was incurred, bearing not too great a proportion to the value of his assets; but to-day under any fair appraisal-and I am not speaking now of forced Sale when land and stock are worth practically nothing, but of fair appraisal- to-day, I say, under any fair appraisal, tens of thousands of these men owe more money than the entire value of their assets; and if the ordinary rules of bankruptcy were put into force, that is to say, the ability to pay when due the amount due, they would be bankrupt. Of course, they are not bankrupt now in that sense, because no one is attempting to foreclose, or very few. No mortgage company or bank, no individual wants to take a security which has become a liability; they do not want to find themselves obliged to pay taxes on the land. At the present time therefore the land is reasonably safe. But the farmers find themselves confronted with a debt greater in amount than the

Economic Conditions-Mr. Speakman
entire value of their property, and with an income reduced enormously through the crash of prices.
Let me give one slight illustration. There is a man whom I know very well who borrowed a relatively small sum-$2,000. He borrowed at a time when the price of wheat in my locality was a little over a dollar net to the farmer. He was unable to pay because the price fell shortly after the tame he borrowed. To-day wheat is worth, roughly, 25 cents a bushel at the country point in my district, for No. 1, as compared with a dollar and a few cents three years ago. That means that while he borrowed the value of 2,000 bushels of wheat he must pay 8,000 bushels in return. Now, wheat itself has not lost its value; it is as valuable for food purposes as ever it was. But it has lost its value in relation to other goods and principally in relation to money. This man is called upon to pay that increased number of bushels of wheat. It is not merely a matter of his debt having quadrupled; his ability to meet his indebtedness has been cut far more than four times. A man farming pays his debts out of the surplus left after he has paid his cost of living, operating expenses and taxes. Even were there a modicum left to-day, you will realize that it takes a far greater percentage of 25 cent per bushel wheat to maintain his farm and keep his family than when wheat was worth a dollar. The surplus left therefore, if any, is a much smaller proportion of the entire crop than at the time wheat was higher; and yet that smaller surplus is worth only one-quarter as much per bushel. So that the debt-paying ability of the farmer has been cut eight or ten times, even if the price has fallen only three-quarters.
Now what will this man do? You will say to him, carry on. Surely; he is carrying on in the hope and confident trust that times will improve, in the confidence that the mortgage company will not foreclose, for reasons I have indicated, or that the provincial government will step in with some protection and prevent foreclosure. But what then? The man is not paying that principal; he is not paying his interest. As a matter of fact he has cut his standard of living to the bone. In doing so he is leaving goods unpurchased on the shelves in the stores. This results in factory wheels being slowed down, thus adding to unemployment. He has cut his operating costs, and that means that he is reducing the efficiency of his farm for the future. He is allowing weeds to grow because he cannot keep them under control; he is allowing the place to fall into disrepair because he cannot keep it in proper
condition; his fences are falling in because he cannot repair them; his machinery is wearing out because he cannot replace it; and his efficiency is being reduced not through any fault of his own but because that is involved in the lower cost of operation. He is paying his taxes if he can. But he sees year by year not only that unpaid amount remaining but the accumulation of interest. His debt is increasing, and there is a situation which is breaking the hearts and threatening to break the morale of the most courageous and optimistic lot of men in the country.
I am asking to-day that in view of these circumstances the government should do something-not that they should step in and immediately cut debts; no. I am asking, however, that they take into serious consideration the possibility of this being done; that they acquire all the knowledge and the experience that men may give them; that they discuss it with those who are interested in cooperating and in endeavouring to remove part of the burden. For it is obvious to all that it is not only the individual who suffers; but the nation itself, under that load, when faced with the upward trend, which we hope is ahead of us, will be hampered and weighed down so that the climb into that prosperity which we are all hoping for will be retarded. May I repeat that I am asking for nothing unfair. It is the duty of every citizen of this country to bear his or her share of the troubles which lie upon the land. Amidst the crash of falling values when stocks have disappeared, when men onoe wealthy have become poor, when farms have become liabilities, when primary goods can be hardly given away and when retail goods have been left upon the shelves, one commodity, one set of men are standing untouched-money itself has retained and is increasing its actual value. It is a misnomer and a mistake to treat money as a commodity and to my mind it is a most ridiculous and anomalous situation that when the value of the real wealth of the land has fallen, the value of the symbol itself remains untouched or has actually increased in value. It is not right that one class of mien, the creditor class, should be immune in an emergency which is crushing and threatening the nation itself.
I am not asking for anything unreasonable and I have endeavoured to avoid speaking in a political, a critical or a partial manner. I am not imputing blame to any government, as no government in itself has been responsible. Certain governmental actions have added to the situation, but the difficulty lies in the system under which we live and move.
1824	COMMONS
Economic Conditions-Mr. Guthrie
I am speaking of this matter from the point of view of what I believe to be practical business and common humanity. I fervently hope that the house will consider this matter from the same point of view, that it will give its unbiased consideration, its most intelligent thought and considered vote in an effort to assist the people of this country and of the world in removing a burden which can no longer be borne.


Hugh Guthrie: Mr. Speaker, I think we will all agree that the hon. member who has just resumed his seat (Mr. Speakman) lias brought to the attention of this house a serious problem which confronts not only the people of this country but of all civilized countries of the world, namely, the question of debt and the question of interest. In reading the motion which the hon. member moved I notice that apparently he intended to confine its scope to what one might call the domestic debts of the Dominion of Canada; in his motion he asks that the immediate attention of this house should be given to the question of debts and interest rates within this country. While in his opening remarks he elaborated quite fully his own views with regard to what one might call the international financial situation throughout the world, I think he intends his motion to apply more particularly to what I might describe as the domestic situation or the question of national, provincial, municipal and private debts within the borders of the Dominion of Canada.
The figures which he gave to the house with regard to these various classes of debts I think produced something in the nature of a shock. Personally, I had no idea that the aggregate indebtedness at this moment of the Dominion of Canada was anything approaching the figure of twelve billions of dollars; I thought the total amount would have been much less. These figures stated by the hon. member are so enormous that I think the house should take serious note of the situation as it exists to-day. When one contemplates the aggregate debt of the country one must also contemplate the aggregate amount of interest which is payable annually in respect of such debt. As I understand this motion its purpose is to induce this house or a committee of this house to give serious and careful study to this important and pressing problem. As the hon. member elaborated his ideas I thought that he was perhaps a little academic and a little theoretical in his treatment of the situation and I was inclined to think that he should have offered something 
in the nature of a practical suggestion as to what might be achieved to the end asked for in his motion.
In this country there are roughly four chief divisions of indebtedness. First, there is the public debt, in which term we include national debts, provincial debts and municipal debts. Then, there is another type of debt which is also a public debt namely, our railway debts. I always include railway debts when considering the public debt of this country. There is yet another vast amount of indebtedness which has to be considered namely, that of the great corporations of this country. Private corporations have raised large amounts of money by bonds and otherwise both in this and other countries, and these obligations must be considered to some extent at least as public debts of the country. Unfortunately, a large proportion of these corporation debts are held and are payable outside of Canada and this fact rather adds to the burden which we have to bear in respect to them both in connection with the payment of principal and the payment of annual interest.
We then come to what we might call the private debts of the country, the debts which the people of the country owe to each other, to the banks, to the loan companies, and to individuals. In respect of all these debts interest is payable. Under the act which constituted the Dominion of Canada the matter of interest was placed among those subjects which come within the exclusive jurisdiction of the parliament of Canada. By subsection 19 of section 91 of the British North America Act, interest is specifically mentioned as being one of the subjects to be dealt with exclusively by this parliament. To many it may come as news that there is in existence an act of this parliament known as the Interest Act. Unfortunately or fortunately in dealing with the subject of interest this parliament has to a very large extent divested itself of authority in respect of past transactions. The second section of this act provides:
Except as otherwise provided by this or by any other act of the parliament of Canada, any person may stipulate for, allow and exact, on any contract or agreement whatsoever, any rate of interest or discount which is agreed upon.
Parliament in its wisdom has left the question of interest almost entirely at the will of the people who enter into contracts or make bargains. The only practical enactment contained in the Interest Act having application to past transactions, is to be found in the third section which provides that where no interest is stipulated in the bargain or agree-

Economic Conditions-Mr. Guthrie
ment, five per cent shall be the maximum amount which may be chargeable.
It is true that there are provisions in the act with regard to the rate of interest which may be charged upon mortgages, but these provisions are not what one would describe as being provisions of practical utility. For instance, in respect of mortgages it is merely provided that where the payment of principal and interest is combined as in the instalment plan that a specific rate of interest must be stated in the mortgage and no greater rate can be charged. There is also provision that where a mortgage extends beyond a period of five years it can always be paid off at the end of the five year period by tendering the amount of the mortgage plus three months' interest in advance by way of bonus. The same section also provides that after such a tender no further interest may be charged. These are practically the only items of general utility mentioned in the Interest Act.
We have a number of special acts which deal with interest. We have in the Bank Act provisions in regard to the rate of interest. We have in the Exchequer Court Act provisions under which five per cent only can be charged. We have in the Expropriation Act and in the Bills of Exchange Act provisions in relation to interest. We have likewise on our statute books an act known as the Moneylenders' Act under which I think the maximum amount chargeable by way of interest is 12 per cent, but that act applies only to loans under $500, so that the Moneylenders' Act is one of very limited application. One may state in general that this country, whatever rate of interest may be agreed upon between the borrower and the lender, such rate will have to be paid, except under certain specific acts some of which I have just mentioned. So far this parliament has not taken any very definite action in regard to the question of interest although its jurisdiction in respect of that subject is certainly exclusive and, I believe, unquestioned. To a large extent parliament has left the question of interest to be agreed upon by the borrower and the lender.
The practical question is:	How are we
going to proceed to reduce the debt and interest in Canada and at the same time be just, do no wrong to any party concerned? It will be readily understood that most of our contracts and agreements, in fact one might almost say all of them, are made under the authority of provincial laws; they all touch the great question of property and civil rights; they are contracts upon which this parliament of Canada has no right to legislate.
The only legislative right of this parliament would be to fix the rate of interest; but this parliament has already expressly provided in the Interest Act that the parties themselves may stipulate and agree in regard to the rate of interest which shall be charged. After having given parties the right to negotiate, to make their own agreements in respect of interest, would it be wise or proper for this parliament now to intervene and in any way to alter or vary rights arising under contracts and agreements which we have permitted to be made and where various interest rates have been agreed to between the parties?
There may be some means, which does not for the moment present itself to me, of meeting a situation of this kind. No practical suggestion was offered in regard to the matter by my hon. friend who moved the motion. If there is a prospect of reaching a solution of the problem, of finding a remedy for the pressing situation which undoubtedly exists in this country as regards both debt and interest, the house will certainly welcome the opportunity. I notice my hon. friend in his motion asks that a committee of this house should study the question and report upon it. I would heartily agree with his suggestion. Perhaps a special committee might be best for the purpose, but in my judgment I think a question of this kind might well be studied by the banking and commerce committee. That, however, is not a matter of importance. The banking and commerce committee is already constituted and I think at present embraces in its numbers all or practically all hon. members who are most familiar with the subject of finance, public debt, banking, interest and the like My suggestion-and it is only a suggestion -would be that this particular question should be referred to that committee to be dealt with at the present session, and if any solution can be found which will assist us in reducing rates of interest or in reducing the public and private debts of this country, then my hon. friend will be entitled to congratulations in regard to debt from every corner of the dominion.
I am not dealing at all with the international situation; I am at the moment referring only to those debts which are hampering us in this country and those burdensome interest payments which we are called upon annually to make in Canada. Whether from private individuals, corporations, municipalities, provinces, or from the Dominion treasury, I cannot recognize much distinction between them. They are all oppressive; they
1826	COMMONS
Economic Conditions-Mr. Guthrie
are all burdensome. I think I can admit that I did not fully realize the enormous amount of indebtedness of this country until I listened to the figures submitted to the house this afternoon by the hon. member for Red Deer (Mr. Speakman). I suppose an ideal state for this or any other country would be to have no debts, either public or private. Indeed we may well recall the words of William Shakespeare when he says:
Neither a borrower nor a lender be,
For loan oft loses both itself and friend;
And borrowing dulls the edge of husbandry.
However we may never reach thait happy condition. Business has to be carried on in this, and every other country by means of credit. The question is: What rate of interest must we pay for the credit which is necessary for the conduct of business? Is there any practical way of controlling interest rates except through the inexorable law of supply and demand? Personally, I trust this motion may pass this house and that the whole question may be referred either to a special committee or to the committee on banking and commerce, and let me express the hope that the committee, to whichever one it is referred, may bring in something in the nature of practical conclusions from which we may eventually obtain some relief.


Mr. W. T. LUCAS (Camrose):: Mr. Speaker, I am glad indeed to second the resolution moved by the hon. member for Red Deer (Mr. Speakman) and I am sure hon. members will join with me in congratulating him on the clarity and forcefulness with which he presented the subject matter of this resolution to the house. I should also like to congratulate the Minister of Justice (Mr. Guthrie) on the manner in which he has accepted the resolution and advised the house to pass it and refer it to a committee. He stated that the hon. member for Red Deer had not offered any practical solution to this question. We are all looking for solutions, and the idea of the hon. member was that instead of a solution being offered by him, the question should go before a committee of the house where it would receive the benefit of the combined wisdom of the members of that committee in offering a practical solution to deal with this all-important question, one which I 'think touches the very lives of the people at the present time.
When one speaks of scaling down debts, this is looked upon by some as repudiation and therefore with disfavour, but in my opinion the average individual is honest and wishes, if at all possible, to liquidate his

undertakings, I believe hon. members will agree that we are facing at present entirely new world conditions. As the Right Hon. Winston Churchill, speaking on the last British budget, says:
As I left the politics of yesterday for those of to-da.v, I now leave the polities of to-day for those of to-morrow.
In other words, what was good for yesterday may not be good for to-day or to-morrow, so we have to change our outlook according to the general conditions with which we are confronted. When we come to the question of debts I am sure most hon. members, including the Minister of Justice, have certainly been shocked by the startling figures presented to the house this afternoon by the hon. member for Red Deer. I am not going to repeat those figures, because they are already on Hansard.
Coming down to the question of farm debts, I shall direct my remarks more particularly to conditions obtaining in the province of Alberta, from which I come. It is not my wish to cast any reflection upon those engaged in taking census information, but I suggest there is at least a doubt as to whether or not the figures as shown in the census reports present a true picture. I find from those reports that there are 97,408 farms in the province of Alberta. Of that number 34,305 reported debts, Showing a total debt of 8108,463,700. In other words only 35 per cent of Alberta farms report encumbrance, and the natural conclusion would be (that 65 per cent are clear of debt. I believe any hon. member who is familiar with conditions in western Canada will agree it is hard to believe that 65 per cent of western farms are in that fortunate position. We know, further, that apart from mortgages there are many other debts. Before a committee of the Alberta legislature sitting about a year ago the fact was brought out that the retail merchants in that province alone had on their books debts totalling over $40,000,000. We know that those debts in most cases were contracted in good faith, but that the price levels at which they were contracted were much higher than they are to-day. As everyone knows the price of farm products to-day has dropped approximately 60 per cent, while the cost of living has dropped only about 20 per cent. Farm prices have been cut more than 50 per cent while debts, mortgages, interest rates and other charges have remained the same. It is generally recognized to-day by all well informed people that war debts must be cancelled. In this connection I should

Economic Conditions-Mr. Lucas
like to quote the words of Mr. Chamberlain, as they appear in the press of recent date:
Now in pointing out what would be the effect of resuming war debt payments, I am not using threats. If you see a man walking along a precipice and you point out to him that the ground just in front of him is^ undermined, that is not a threat, it is a warning, and it is not less friendly because it is evident that if the man goes over the precipice he is quite likely to drag you down with him.
I believe that is a point we should all keep in view, because it is becoming generally recognized that to force payment at the present time is just about as harmful to the creditor as the debtor. While there is a general feeling that war debts must be cancelled I think we must come to the conclusion that the same process must be applied to governmental and private debts. I have before me a copy of the Toronto Saturday Night of February 4, a publication printed in Toronto, the financial centre of Ontario. In it I find the following:
That it is time something was done to readjust the relations between debtor and creditor, so far as the sovereign power of Canada can properly readjust them, becomes daily more evident. We do not think the east of Canada fully appreciates the tremendous force behind the demand for readjustment of interest rates- even on old contracts-in the west.
Steers, good and choice	
Steers (up to 1,050 pounds) medium Hogs (bacon)	
From my experience I know that from seventy five cents to one dollar is charged for freight and commission to deliver those hogs from most points in Alberta to Edmonton or Calgary. When one realizes that a 200 pound hog will bring only $4 or less he realizes how impossible it is for the farmer to meet his obligations.
In regard to poultry raising I do not believe any people in Canada are playing their part better than the farm women. When the price of wheat went down to such low figures the women, in order to do their share in an effort to help out, went in for raising poultry, and especially turkeys. However, at Christmas time in the district from which I come No. 1 turkeys were selling at 6i cents a pound, No. 2 for 4| cents and No. 3 for 2i cents. It was quite a common thing to buy turkeys weighing 15 or 16 pounds for as little as fifty cents. Under those conditions the farm women can derive very little encouragement. A wrong impression has been broadcast by a number of people who have travelled through western Canada to the effect that everything in that section of '..he country is fundamentally
It is encouraging to find a paper from the city of Toronto voicing that viewpoint, because there is a general feeling in western Canada that the east has not a full appreciation of the tremendous debt load carried in the west. Just as the world has become more and more interdependent, so are the different classes of people becoming more interdependent. No one class can hope to be prosperous while another class suffers. These facts lend some force to the expression of Mr. Chamberlain to the effect that if the debts are enforced the creditor will also suffer.
No matter how honest a farmer may be, how can he pay his debts under present conditions? As the hon. member for Red Deer (Mr. Speakman) has said, the price of wheat at most local points in Alberta is about 25 cents a bushel. The result is that a debt of 81,000 contracted when wheat was worth $1 per bushel is equal to a debt of $4,000 to-day. Then, turning to cattle and hogs, I find some information in the live stock market report of February 2, 1933, issued by the Department of Agriculture which I have no doubt will be of interest to hon. members. These are the average prices in the cities of Toronto, Winnipeg and Calgary:
Toronto .. $3 78 ..	3	45..	3	65
Winnipeg $3 29 2 53 2 82
Calgary $3 10 2 60 2 62
sound. True, there have not been many evictions; in most cases the farmers have been allowed to stay on their lands. As a matter of fact it has got to the position where the creditor does not want the land, it is a liability to him at the present time, because when he takes possession he becomes liable for taxation. It is true that the people are becoming more or less reconciled to the condition. But there is a feeling of bitterness developing amongst the farmers, for they realize that while they are allowed to live on the land, yet all the time interest is piling up, and now that there is very little hope of this depression passing in the near future they realize that by the time it does pass all the equity they may now have in their land will have disappeared and they will find themselves with nothing, and their life's savings gone.	.
Dealing with this interest question I think Australia has set an example that is worthy of consideration. If I am rightly informed, they cut interest by 22i per cent, and also lowered the rate on bank deposits and loans.
!82S	COMMONS
Economic Conditions-Mr. Gershaw
There is no question that conditions are serious, and I am very glad indeed to know that the government is prepared to accept this resolution, and I trust that when it comes before the committee they will give it the consideration which it deserves.


Mr. F. W. GERSHAW (Medicine Hat):: This resolution, Mr. Speaker, deals with a subject which is very prominently before the people of Canada at the present time. People everywhere are discussing it; indeed one of the most hopeful signs on the horizon at the moment is that interest in economic problems such as this is widespread and general. Clearly the primary producers are being discouraged and crushed by the burden of debt and interest charges, and everyone recognizes the necessity of some adjustment between the debtor and creditor classes. If there is one point I would like to make clear and emphasize, it is the fact that recovery in general is inseparably bound up with the recovery of agriculture in particular. Everywhere we find stagnation in business. This is due largely to lack of purchasing power, the sources of which in Canada are largely the sale of products of the forest, the mine, the sea and the land. Of these primary products agriculture is the most important, because some forty-seven per cent of the people of Canada are engaged in agriculture. When our agriculturists are in the red, as it were, there can be no prosperity, because the curve indicating the progress and welfare of the agriculturists is reflected in the curve marking the prosperity of Canada in general. Mr. Wilson, of the Royal Bank, made the statement recently that during the past year interest rates on bonds had fallen from 5.20 to 4.83 per cent. This is a small reduction; it is nothing compared with that which has taken place in the prices of primary products. Certainly the value of money has remained up, whereas the value of other things has greatly depreciated.
I desire at this time to put on Hansard a few figures from the Minneapolis Tribune, showing that the production of wheat has more than doubled during the last forty years. In the United States of America it has increased from 378,000,000 bushels to
890,000,000 bushels; in Canada from 42,000,000 to nearly 400,000,000 bushels; in the Argentine from 31,000,000 to 219,000,000 bushels; in Australia from 27,000,000 to 171,000,000 bushels; in India from 229,000,000 to 347,000,000 bushels. In Canada we have a crop usually somewhere around 400,000,000 bushels. We can only use 100,000,000 for food and seed, so we are faced with the necessity of marketing between 200,000,000 and 300,000,000 
bushels. I believe that the difficulty in distributing this amount would have been much less had we some sixteen or eighteen months ago followed Great Britain and some twenty-one other countries in going off the gold standard. Where can we find a market? The countries of Europe,-France, Italy, Germany,-have high tariff barriers against our wheat. Great Britain cannot take it all. For years we looked with hope to the Orient. We saw there a great potential market, with hundreds of millions of hungry people, but recently we have lost that market. According to the figures from Mr. Marler's office, referred to the other night, we have lost it to Australia, because in 1928 we supplied 51 per cent of the wheat imported by Japan, and at present we are supplying only 13 per cent, just enough for blending purposes. Australia in 1928 supplied only 12 per cent, and to-day is supplying 84 per cent. So that great market is gone. Also the flour millers of this country have in the past supplied the Orient with large quantities of low grade flour. Recently some of them tendered for contracts; if they had received those contracts their mills would have been occupied for a long time. Unfortunately for us the contract went to Australia, because Australia was able to make more use of the money of China. The premier of Australia pointed out recently that his country by the action it had taken had been able to improve very much its desperate financial condition. Why is Australia taking from us the market that we so badly need? Why is it possible for them to get flour contracts, sell their crop and improve their financial condition? I think the answer is clear; they have depreciated their currency, when world-wide deflation was sweeping over all countries. Canada, almost alone among the smaller nations of the world, has taken the full impact of deflation unchecked and unsoftened by any form of reflation. We have seen values crumbling around us, and no hand has effectively stopped them. Even to-day we are trying to pay debts that in present values, of wheat for example, amount to three or even four times what they amounted to when incurred. We find it very difficult to carry on trade; while people in New Zealand and Australia and the Argentine, who are our competitors, can sell their products in Great Britain and taking home the pound sterling find it worth S6 to $7, we in Canada in selling to Great Britain find the pound sterling in our country worth something like S3.80. How can we compete on an unfair basis such as that? Surely there has been much misery and suffering owing to the unfair position in which our producers find themselves.

Economic Conditions-Mr. Gershaw
In discussing some of the effects which deflation has had, I wish to put on Hansard a few figures taken from Stuart Chase's book entitled "The New Deal." I quote these figures because of their accuracy, although similar conditions could be found anywhere in our own country. A certain committee visited 6,304 families in New York. These families were unknown to the relief organization. They did not apply for relief. We find that 81 per cent lacked food; 88 per cent were in arrears for rent; 38 per cent lacked winter clothing; 25 per cent were short of fuel; 67 pea' cent were in arrears for life insurance; 74 per cent borrowed from relatives, and 1,500 families had pawned their furniture to buy food. That, remarks the author of this book, is what deflation means in human terms; that is the grim savagery of the business cycle downward. We need only look around us in Canada to see what deflation has meant here. We find that a debt which could have been paid in 1929 with 100 bushels of wheat now requires 400 bushels. Unemployment is mere widespread; financial stringency is greater; tariffs are higher and confidence is less. According to the definition, deflation is caused when the available supply of goods outruns the available supply of money, and it is quite easy for us to see how, in days like these, when new machinery is being invented and when more and more capital has been put into larger and larger factories-when these conditions exist, it is easy to see how the supply of goods could exceed the supply of money, and when that happens deflation occurs. It has happened before. History records that away back in the early ages the Roman Empire had a standard of living which until thait time had not been thought of. So long as they were able to get gold from the mines of Spain and Greece their prosperity continued, their standard of living was maintained. But when these mines were worked out and there was a shortage of gold, the Roman Empire declined and fell. Their rich fields were turned into pastures. Taxes were unpaid and Rome fell into an abyss and carried a large part of civilization with it.
Surely if this process of deflation continues we must take warning lest a similar fate befall our country at the present time. Repeatedly during the last century we have been threatened with disaster from deflation; many cycles of depression have come, and usually they have gone when some fresh supply of gold has been discovered. The discovery of gold in South Africa or in California or in the Klondyke has usually arrested
the downward trend and introduced a better standard of living, better prices and greater prosperity. That is what has happened time and again, whereas a shrinking of currency has resulted in lower prices and a lower standard of living.
Some figures were put on Hansard the other night by the hon. member for Macleod (Mr. Coote) showing that at the present time we have a great shrinkage in currency. Dominion notes in the last twelve years have shrunk from 8320,000,000 to $161,000,000, and bank notes from $200,000,000 to $150,000,000, while bank loans have shrunk by $600,000,000. Deflation has resulted in a decrease in profits and an increase in fixed charges, and this has induced, first, caution and then fear and then the panic which we see at the present time.
In 1869, Senator Sherman of the United States, speaking on the effect of a contracting currency, said this:
To every person except the capitalist out of debt and the salaried person-
I assume he means the person whose salary has not been cut.
-it is a period of loss, lassitude of trade, the fall of wages, suspension of enterprise, bankruptcy and disaster.
Another book I have read recently points ouit that there are certain classes who suffer and suffer severely by deflation, and there is one class that suffers much less than others through this process. Deflation affects the active business man. If he is renting buildings his rent stays at about the same rate, whereas he finds that he has fewer sales, less cash and less in the way of profits. Deflation affects more particularly the primary producer, the producer of an exportable product, because of the lower prices which he receives for ithat product, and owing to the fact that interest and mortgages are stationary, his burden is relatively increased. Deflation is hard for labour because there is so much unemployment, and particularly hard for governments because budgets are unbalanced and the people are dissatisfied and discontented. Only the capitalist with vested interests may be fortunate enough to gain, if he has money invested and can secure the same rate of interest for it.
Other countries have faced difficulties such as confront us at the present time and have made attempts to stay the process of deflation. I find that as far back as 1790 inflation took place in France. At that time some 400,000,000 units of currency were issued, based on confiscated church property. There were some gainsayers even at that time, but
1830	COMMONS
Economic Conditions-Mr. Euler
othere could hardly contain themselves for joy when they anticipated the advantages of this action. The result of this particular effort was apparently quite successful. The treasury was relieved, a portion of the debt was paid, credit revived, trade increased and troubles seemed to vanish. It is quite possible that if the national authorities had stopped at that point no disaster would have ensued. No doubt they brought great relief to many of their citizens at that time. We read, of course, that later on they got into difficulties. The government was unwise enough to yield to temptation and followed the seductive path of unrestricted inflation.
Those who are so much afraid of inflation at the present time have in mind unrestricted inflation, whereas those who advocate some measure of inflation contemplate a controlled effort, not as a panacea for all our evils, but as something more desirable than drifting with the downward course of deflation without any effort at control. We are the custodians of all that has been gained and earned in the past, and surely with the experience before us of other nations and ages we should be able to act and still avoid the pitfalls which face those who carry on to fatal extremes. We know what the process of deflation has done to others, and we must guard our country and see that all that is modern in our civilization does not pass away. New Zealand, South Africa and other countries are keeping their currencies upon a suitable depreciated basis; why not Canada?


Hon. W. D. EULER (North Waterloo):: Mr. Speaker, since the hon. member for Red Deer (Mr. Speakman) has made so convincing an argument that the Minister of Justice (Mr. Guthrie) on behalf of the government has consented to the appointment of a committee as requested in the resolution, it is probably a little out of place to attempt to discuss the merits or demerits of the question of debts and interest, and I may say to you, sir, that I do not intend to do so. The mere citation of the total amount of debts as being twelve billions of dollars, and the fact that governments, federal, provincial and municipal are obliged to pay some $700,000,000, annually in interest, presents an immediate argument for the consideration of this question, especially in view of the fact that it would seem to be impossible to continue to pay this interest. My principal reason in rising at this moment is not only to give my support to the resolution-this is not necessary since it is going to carry- but to deal for just a moment with another phase of the matter which has not been 
touched upon by my hon. friends from the west.
Quite naturally they have spoken of the difficulties of the western farmer-perhaps eastern farmers should be mentioned as well -but I have in mind a situation which is just as serious as that facing the farmer. If you look over the industrial towns and cities of the province of Ontario, cities like Windsor or Kitchener, you will find there literally thousands of men out of work. Two or three years ago these men owned their homes. They placed mortgages upon them, and they now find it not only impossible to pay the interest, but, like the farmer in the west, they are seeing the equities in their little homes absolutely wiped out. They are being left with nothing. Their difficulty is just as great as that being faced by any other class in the country. It seems to me that the trend must be in the direction of lower interest rates, especially so long as prices of commodities remain as they are at present.
It seems a solution which is offered apart from the preventing of future issues from bearing such high rates of interest, is what might be called repudiation. This is an action which none of us like to contemplate; countries pride themselves in carrying out their indebtedness, as do people, municipalities and provinces, but sometimes the necessity or, as the hon. member for Red Deer has said, the weal of the public generally requires remedies which otherwise would not be considered. I think it was about two years ago I made a suggestion to this house which, if hon. members paid any attention to it, rather shocked the house; I said that it might ultimately become necessary to have what might be called a capital levy. I also made another sugegstion along the lines of what may be considered by the committee to be appointed, I referred to the fact that the Jewish people in ages gone by had what they called a jubilee year every fifty years when all debts were wiped out. I commend that suggestion to the consideration of the committee. The suggestion is of course not really serious.
As has been stated, Australia has by process of legislation reduced the interest on her debts by something like twenty-two and one-half per cent. Great Britain has reduced the interest on some ten billions of dollars of securities from five per cent to three and a half per cent. I am inclined to think that the acceptance of the new bonds at the new rate of interest was not quite so voluntary as some of us might think.
I have really nothing more to say except that I do not quite agree with the Minister

Economic Conditions-Mr. Rhodes
of Justice when he stated that the hon. member for Red Deer had made no practical suggestions as to what might be done. I do not blame him for that; he has opened up the question and apparently he believes that in a multitude of counsellors there may be wisdom. I think he is quite right in leaving concrete proposals to the committee itself. I believe that the deliberations of this committee will serve the further purpose of bringing out information which will show the Canadian people the serious situation in which we are placed.


Edgar Nelson Rhodes: Mr. Speaker, before the hon. member for Red Deer (Mr. Speakman) closes the debate, I should like to say just one or two words. In the first place I congratulate the hon. member upon the temperate and judicial manner in which he has dealt with an admittedly very difficult and complicated question. It is not only a subject difficult in its perplexity, to use the hon. member's own word, and one which can be dealt with only after deep thought and careful study, it is a most important subject having regard to the possibilities of implication and repercussion . in the character of the discussion itself. I need not elaborate upon this point of view except to say that for this reason I wish to pay tribute to the hon. member for his moderate method of approach.
The hon. member for North Waterloo (Mr. Eluler) cited the case of Australia but I do not think that a parallel can be drawn between Australia and this country. In the first place the Australian debt was much larger in proportion to population than the debt of Canada. At this point let me say in parenthesis that I do not propose to discuss with the hon. member the accuracy of his figures with respect to the gross debt.


Alfred Speakman: They were taken from the bureau of statistics.


Edgar Nelson Rhodes: They may be correct and
I do not know that a discussion as to their magnitude is material. However, I do think that he has rather gone beyond the mark in the matter of the annual interest charge. We all agree that the debt is sufficiently onerous and constitutes a heavy burden; a real problem is created which has to be dealt with by this country as well as by every country in the world.
The Australian national credit has become impaired, so much so that their national bonds which had been sold in 1928 by the house of Morgan at ninety-two and a half, dropped within three years to a figure of
thirty. In other words, they were selling in the open market at less than one-third of the issue price. The bonds of some of the Australian states went to even lower figures, and so they were confronted with a desperate situation which required rather drastic treatment. I would point out that despite the fact that they had a desperate situation with which to deal and in connection with which a drastic remedy had to be administered, they did not for one moment attempt to repudiate the principal sum of their national debt. All they attempted to do was to reduce the interest charges and that in the first instance was done voluntarily. A very substantial period of time was allowed to the people of Australia to convert on a basis which meant a reduction of some 221 per cent in the interest charge. As a matter of fact voluntary conversion took place on the part of 91 per cent of the holders of the bonds. With respect to the remaining nine per cent, only three per cent refused to convert. It was assumed that the remaining six per cent were either indifferent or were prepared to convert. It was then that they stepped in by way of legislation to compel conversion on the part of the nine per cent or the three per cent, as the case might be.


Ian Alistair Mackenzie: Ninetyone per cent applied directly; six per cent applied by efflux of time, and three per cent refused.


Edgar Nelson Rhodes: I am quite prepared to
accept the figures given by the hon. member for Vancouver Centre (Mr. Mackenzie). That is substantially what I said or intended to say. But it must be noted that although Australia did by this method reduce interest charges to the extent of 221 per cent, it did so only in the case of its own nationals; it made no attempt whatever to reduce interest charges as regards its obligations outside that country. In other words, it was free entirely of any suggestion of repudiation. A subject for the committee might very well be the collateral considerations which followed the reduction of interest in Australia, because they realized that the sacrifice must be general. So they abolished royalties which had been in existence for many years; they abolished or largely reduced bounties of a substantial character to the Australian wine industry; they reduced mother's allowances; they reduced very substantially the salaries of all civil servants, the reduction ranging from 15 to 20 per cent. A corresponding reduction was made in indemnities to members of parliament and to all officials of state. Old age pensions were
1832	COMMONS
Economic Conditions-Mr. Rhodes
reduced in a like proportion. At the same time there were substantial increases in taxation. It might be well for the committee, when it considers this subject, to bear these collateral considerations in mind,


Mr. STEWART (Edmonton):: What was
the percentage of international as against domestic debt?


Edgar Nelson Rhodes: 
Ian Alistair Mackenzie: 
Edgar Nelson Rhodes: A very substantial amount.


Mr. COOTE:: Practically the same as their internal bonded indebtedness.


Edgar Nelson Rhodes: About half and half. I
am not for a moment suggesting that a reduction in interest charges is not desirable. Unquestionably it is, but it can make only a partial contribution towards that recovery to which we all turn our minds with such keen interest.
When the hon. member for Red Deer gave the illustration of the farmer who had placed on his farm a mortgage of $2,000 which, at the time it was made, represented a mortgage value of 2,000 bushels of wheat, whereas the same mortgage would to-day require for payment 8,000 bushels of wheat, I could not help thinking the remedy there would not lie even in a reduction of principal of our debt. The remedy there would lie in an increase in commodity prices. The singular point is that although economists, financial men and experts who have devoted their minds to the subject of economics disagree on every other subject, the one subject on which they are all in agreement is that the one thing desirable to bring about world recovery is a.n increase in commodity prices.


Mr. IRVINE:: How is that to be brought about?


Edgar Nelson Rhodes: How it is to be brought about is another matter entirely. The Minister of Justice (Mr. Guthrie), having in mind the constitutional aspect, indicated that there were some very real difficulties in the way of practical solution of this subject. The hon. member for Red Deer recognized that fact. I do not wish to stress the constitutional difficulties in the way; I merely indicate that fact as an added circumstance, showing that

we have an additional difficult problem on our hands in dealing with the matter as compared with Australia, because in the latter country a few years ago the whole of the states' debts were taken over by the commonwealth and to-day there can be no increase in debt there except that- authorized by a public body which has been set up under statute. To put ourselves in a position comparable to that of Australia we would have to take over all the debts of the provinces and they would thus thereafter lose their autonomy in the matter of raising additional sums by borrowing.
My hon. friend said quite properly: Nevertheless the dominion is in a position to give a lead. Let me assure the hon. member and the house that the government is sensible of the difficulty and the importance of this subject and has given iit great consideration. Discussions have been had for a considerable period of time with responsible bodies throughout the country, including provinces, looking to some arrangement which would give a lead to the people at large in the matter of a reduction in interest charges. Further than that I would not at this stage wish to go lest my remarks might be given a wrong interpretation. I need only point out the fact that the government long since has recognized the desirability of reducing interest charges. As a matter of fact the conversion loan of two years ago was a step in that direction, and the magnitude of that operation at that time is not generally recognized in this country. There was converted then no less a sum than $638,600,000, or 60 per cent of the total bonds available for conversion, representing a conversion covering, in round figures, at least 25 per cent of our whole direct national obligation. The net result will be, when the full interest reduction comes into force in 1935-6, we shall have saved in interest annually no less a sum than $6,192,964.


Ian Alistair Mackenzie: What was the rate of interest?


Edgar Nelson Rhodes: The conversion loan interest, as the house is well aware, was four and a half per cent as against rates of interest of five and five and a half per cent on the bonds. It is one thing to pass a pious resolution as to the desirability of reducing interest charges; it is quite another to bring about that reduction, especially bearing in mind that the man who owns the money is the arbiter as to the interest he will receive if he chooses to lend, because so far even in utopian society I do not know of any method whereby an individual can be compelled to lend money.

Economic Conditions-Mr. Rhodes
Only last year we tried an experiment in a mild way in Canada. We brought out a national loan and bearing in mind the insistent demand that had been made, not only by public bodies but in parliament and in the press that we should have lower interest rates, we properly took heed of those voices. We tried mildy to give the people of Canada an opportunity to respond to that call. As a matter of fact, for the first time in Canada we issued bonds bearing a four per cent coupon. It is true it was offered to the public at the rate of 93.45, and at a price which yielded four and one-half per cent. That issue was made to the public on October 31, 1932. I have in my hand information showing the yield to the investor in dominion securities, as they were sold in the open market on November 1 of last year. The highest yield to be found in the list before me on comparable issues is on the 1943 issue and that issue yielded to the investor on that day 4.68. The lowest yield on any dominion issue in that range on that day was 4.57. Yet, would you believe it, that -07 per cent was sufficient to cause many individuals to refrain from purchasing our bonds yielding 4i per cent when they could go to the open market and buy one yielding 4.57. That trend is shown in a most eloquent way by an analysis of the figures showing purchases of that issue of last year. The total number of those who purchased bonds in S500 denominations was 3,784. Their purchases totalled
82,693,000,	or only 4.81 per cent of the total issue. Almost half of that issue or, to be exact, 47.32 per cent was purchased by large institutions. Those figures would show that the issue did not meet with popular response. It may be that the government should have made a greater effort by way of publicity although I must say that at the time we inaugurated that campaign we were criticized because we called to our assistance, by means of radio hookup, the premiers of the various provinces. It would seem therefore that we get criticism both ways.


William Daum Euler: I would have suggested smaller denominations.


Edgar Nelson Rhodes: My hon. friend suggests smaller denominations, and in reply I would say that that subject received very careful consideration. An analysis of the response by those subscribing in amounts from $100 to $200 in earlier bond issues reveals that the aggregate sum subscribed by those small purchasers is very small indeed, and represents but a small fraction of each issue. It was the opinion of those identified with bond circulation that it was desirable to keep the 53719-116
cost of flotation and servicing to the lowest possible point. I may say that the cost of servicing coupons on smaller issues is out of all proportion to the amount of money received. It is true that after weighing the arguments one might conclude that it would be highly desirable to have distribution as wide as possible. It may be that we erred in not having smaller denominations in the last issue. In connection with a future issue, which will be larger, I have no doubt there will be an opportunity for the purchasers of small amounts to subscribe. Our reason for not issuing in smaller denominations was, in part, as I have indicated, but more largely by reason of the fact that it was only a small issue, and it was only in connection with larger issues covering longer periods of time that we felt we would be justified in issuing the smaller denominations.
I do not know that there is anything further I should say at this time. I should like to assure my hon. friend from Red Deer (Mr. Speakman) and the house, that the government is entirely in sympathy with the main object of the resolution. Any assistance we can render will be gladly given. We will cooperate in every possible way, and while I believe that the committee will face a very heavy task, and while I am fearful as to the results of its practical conclusions, I do know that it will embark upon its work with our blessing. May I go just a little farther than my colleague the Minister of Justice. As to the question whether the matter should be referred to the banking and commerce committee instead of to a special committee, I suggest my hon. friend would do well to amend his resolution so as to refer this subject specifically to the banking and commerce committee, a body set up deliberately for the purpose of settling matters of this kind. I believe that committee would give the subject as good if indeed not better consideration as a special committee, unless that special committee were composed of members of the banking and commerce committee. In that event there would be no object in not using the standing committee.


George Gibson Coote: Mr. Speaker, the subject matter of this resolution has been dealt with very fully by the hon. member for Red Deer (Mr. Speakman), and in the few moments at my disposal I shall try not to traverse the ground that he has covered. First of all I should like to congratulate the hon. member upon his presentation, and upon his success in obtaining the consent of the government to have the matter referred to the banking and commerce committee.


Mr. YOUNG:: Would that be tying our
dollar to the pound?


George Gibson Coote: No; it would be placing our dollar at its proper level, much nearer the proper level in gold countries than it is today. I think there is a great deal of misconception about the value of our dollar, about its being down so much; it is really the value of gold which has jumped around in the last three years, more than the value of sterling and the Canadian dollar. Canada, in her desperate attempt to keep up with gold, has deflated her currency much more than Australia, New Zealand and other countries that we are attempting to compete with. The result is that price levels are much lower in Canada than in nearly all those countries, and therefore the problem of debt is much more acute.
I support this resolution because so far I have been unable to interest the government in the question of raising the Canadian price level. Two years ago I said in this house that Canada should abandon the gold standard and allow her dollar to depreciate in foreign countries so as to raise commodity price levels in Canada. Had that been done, farmers and other producers in Canada, as well as working people, would not have been so terribly indebted to-day but would have been able to keep up their interest. There is no doubt in my mind that the bulk of our farmers could under such circumstances have kept up their interest payments. However, the government did not see fit to give much consideration to my proposal, so that deflation has continued while commodity prices have fallen steadily and debts and interest have continued to pile up. It was pointed out by the Minister of Trade and Commerce (Mr. Stevens), in the splendid speech which he made last year, that interest rates of eight, nine and ten per cent could not be paid at present price levels. The prices of agricultural products are so low that the farmers have no ability to pay interest at any rate
1836	COMMONS
Economic Conditions-Mr. Speakman
to-day. There are therefore only two alternatives: either find a way of doing what is suggested in this resolution, or we must raise commodity price levels. I would say that at the present time we must do both, because debts have continued to pile up on us until they have reached that point where in many cases we cannot take care of past indebtedness.
As suggested by the Minister of Finance, I am going to move, seconded by the hon. member for Peace River (Mr. Kennedy), that the resolution be amended by striking out the words "a special committee of this house" and substituting therefor the words "the select standing committee on banking and commerce." If that is accepted by the house, I am sure it will be acceptable to the hon. member for Red Deer and a great many others of us, and I hope that when it is taken up it will receive very serious consideration and that we shall get from the committee some definite recommendation which will lead to a solution of this problem, one of the most important and most pressing in Canada to-day.


[Stage Direction]
Amendment agreed to.
Alfred Speakman: I have no intention of prolonging the debate, but I do wish to express my appreciation of the reception which this resolution has met throughout the house and particularly, may I say, on the part of the government as voiced by the Minister of Justice and the Minister of Finance. I have succeeded up to the limit of my most optimistic expectations for the time being.
I am perfectly prepared to accept the amendment, and that the matter be referred to the committee on banking and commerce, my sole purpose being to have the subject brought before a representative body of the house for the most careful investigation and study and in the hope that some results may accrue. I think there is no question that throughout the country a certain measure of relief and appreciation will be felt on the part of debtors, who form such an overwhelming majority of the population, at this evidence that their plight and this problem have been recognized by the house and the government, and that the house is at least taking the first necessary step towards studying and, if possible, meeting the situation.
It is unnecessary for mie to say more, save to reply to one or two suggestions or inferences on the part of the Minister of Justice (Mr. Guthrie) and the Minister of Finance (Mr. Rhodes). The Minister of Justice was not exactly critical, although he seemied rather

disappointed; that I did not make, nor did I propose to make, any definite suggestion either as to the extent of the reduction which might be undertaken or as to the method which might be followed. I purposely refrained from this for the reason suggested by the Minister of Finance himself, that I felt it would be arrogating to myself more knowledge than I possess were I to assume that I had solved the problem in my own mind and that therefore it was unnecessary for other people to give any consideration to the problem. I think it is infinitely better for the committee itself, with all the means at its disposal, and all the evidence that will be adduced, to arrive at a solution. It would be far better to have a solution which was sound and businesslike, a practical solution, than one which would be more or less theoretical.
I also refrained from discussing any other aspects of the situation. The Minister of Finance rightly suggested that perhaps a better method would be to raise price levels. I agree, but the minister will recognize that they are two separate questions, although dealing somewhat with the same problem and having the same result in mind. From my experience I have found that the less involved you make a proposition the better its chances are for possible success in the house. If you segregate it from all other suggestions you are likely to find that support which would be lacking if you linked up the question with some other point of view which might not be so acceptable. While, therefore, I should have been glad to discuss inflation, depreciation and all the various aspects of the problem, I felt it was wise to refrain from such discussion at this time.
I can only again express my appreciation of the support given and interest taken throughout the house, and my most sincere hope that the labour of the committee will not be wasted but that it will get to work promptly, taking its duties seriously, and that something worth while for the country will result.
Resolution as amended agreed to.



A CANADIAN FLAG


[Stage Direction]
Mr. CAMERON R. McINTOSH (North Battleford) moved:
That, in the opinion of this house, a special committee be appointed for the purpose of considering the advisability of adopting a Canadian flag, representing Canada as a whole

A Canadian Flag-Mr. McIntosh
and in which the British flag shall occupy the position of honour, thus symbolizing the dominion as an equality partner in the commonwealth of British nations.
He said: I am not moving the resolution to-day, Mr. Speaker; I am making a brief statement
Mr. STEVENS:: I did not quite understand what my hon. friend said. The resolution has been called, and surely if he now proceeds he is discussing it.


Mr. McINTOSH:: Very well. The resolution standing on the order paper in my name, with reference to a distinctive flag for Canada, and requesting a special committee of the house to investigate and report upon the question, is a resolution which in scope and substance is essentially the same as the one which was before the house two years ago. In my humble opinion, and I am quite satisfied in the opinion of growing thousands of red-blooded Canadians throughout Canada, this resolution occupies fundamental ground and affords an historic basis for the discussion of a distinctive flag for Canada. When endorsed by the members of this house, the resolution will result forthwith in a preliminary satisfactory solution of an heraldic problem -which is becoming more important nationally and imperially every day. May I remind hon. members that two years ago a similar motion was brought before this house. If I remember correctly, when I rose to speak: in moving the resolution it was about a quarter after five o'clock and after I had finished speaking the Prime Minister (Mr. Bennett) abruptly adjourned the house. The discussion at that time took place upon Empire day, a very noteworthy day in our national and imperial history. The resolution then found its way into public bills and orders and did not come up for further discussion during that session. Because the discussion at that time had been very brief and no vote had been taken, I made up my mind that I would again put this resolution-a similar one-upon the order paper.
However, there is another reason for placing this resolution again upon the order paper. If hon. members will allow their minds to go back to July and August of last year, they will recall the imperial conference and also the fact that Canada, the oldest self-governing dominion of the crown; was the only nation represented at that conference without a distinctive flag. Australia had her flag. New Zealand had hers, as also had South Africa; every self-governing dominion of the commonwealth of British nations, with the exception of Canada, had a distinctive flag-a flag
symbolic of its natiomi life. The comments of prominent Canadians as well as the lively discussion in the weekly and daily press of the country at the time showed the great interest there was in the question of a national emblem, in the maimer in which Canada had been placed in a ridiculous "equality of status" position during an imperial conference held in the capital city of our dominion. Everywhere there was a sentiment remedial action should be taken.
Further, may I say that during last October and November no private members' resolutions or bills came before the house, which explains -why this resolution is now before us. Were conditions normal throughout Canada, were we in the same position to-day financially and otherwise as we were in 1928 or 1929, I would certainly press this resolution in order to have a complete debate upon it and place every hon. member on record as being for or against. Because of the anything but normal conditions now prevailing throughout Canada, because of the unemployment rampant throughout the land, because of the interest charges which are bearing so heavily on our people, because of the avalanche of debts which are facing Canadians from ocean to ocean, because of the economic and industrial problems which face this country, because much time must be taken up in the consideration of all these matters, I am going to ask that the house postpone its consideration of this resolution.
. The fact that many Canadians are without food, clothing and shelter causes me to withhold this resolution until some future occasion when it may be discussed under more auspicious conditions, thus helping rather than perhaps hurting a cause so near and dear to all Canadians strong in their national and empire zeal and faith. When this time rolls around I hope parliament will come to a flag conclusion that will redound to the welfare of this country.
What we desire is a distinctive flag for Canada, a distinctive flag for Canada's life, a distinctive flag to symbolize Canada's soul, a flag to tell of the Canada spoken of in the words:
Life's the fo-rce divine that makes us differ from the states effete

Be it ours to catch its image as it speeds with twinkling feet.
When that time comes-and it cannot come too soon-I hope every hon. member will give this question the unerring attention it deserves. May I hope every representative will catch a glimpse of the greater and more glorious Canada to be, and make sure such a Canada is emblazoned in figures clear and plain. And when this important occasion

Tariff Board-Appointments
arises I hope every hon. member will not be afraid to discuss this matter as any courageous Canadian ought to discuss it. Should that be done and should a committee be appointed to deal with the question, I feel sure that its report will be unanimous in favour of having a distinctive flag for Canada.


Jean-François Pouliot: I congratulate the hon. member upon his excellent speech, but would direct his attention to the fact that because of the conditions now prevailing in Canada, our flag should be at half-mast.


Pierre Édouard Blondin: Am I correct in understanding that the hon. member wishes to withdraw his resolution?


Cameron Ross McIntosh: Yes.


Pierre Édouard Blondin: By consent of the house, the resolution is withdrawn.
Motion withdrawn.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.



TARIFF BOARD


Right Hon.   S@: At the request of the Prime Minister (Mr. Bennett) I wish to inform the house that His Excellency has been pleased to approve [DOT] the appointment of the three members of the Tariff Board:
The Hon. George Herbert Sedgewick, a justice of the High Court of Justice of Ontario, Toronto, Ontario, chairman.
Milton Neil Campbell, Esquire, M.P., Pelly, Saskatchewan, vice-chairman.
Charles Hebert, Esquire, B.A., of the city of Montreal, P.Q., wholesale grocer.
I ask permission to lay a copy of the order in council on the table.



&quot;KINGDOM OF CANADA&quot;


[Stage Direction]
Mr. ARMAND R. LaVERGNE (Mont-magny) moved:
That in view of the statute of Westminster, the traditions of the Canadian people, and the constitution of the country, this house is of the opinion that the name of Canada should be changed from that of "The Dominion of Canada" to that of "Kingdom of Canada."
He said: Mr. Speaker, the resolution which stands in my name has been on the order

paper for the last two years and I feel I must apologize to the house for bringing it up only to-night. The first year I was prevented by the rules of procedure and also by some more pressing business, from bringing it up. Last year I was delayed by private circumstances in coming to the house, and I bring it up to-night on its first call so that I may not lose the opportunity of presenting it.
By the Statute of Westminster we have become a nation, equal in partnership, of the commonwealth of the British Empire; we have ceased to be a dominion in order to become an independent nation under the sovereignty of the King of Great Britain, Ireland and the dominion beyond the seas. Having outgrown the status of a dominion, according to our. constitution, we are certainly not a republic-and may I add, I thank God we are not-we are a country which is under the sovereignty of King George Y and his successors. This country since the Treaty of France in 1763 has become one of the jewels, may I say, of the British crown. Having outgrown the status of a colony, not being a republic, we are, according to our constitution, according to history, according to facts, a country which is under the monarchical system, which has at its head a king or monarch and which is legislated for by him through a parliament, comprising the Senate, which takes the place of the House of Lords in England, and our House of Commons. Having ceased to be a dominion, having ceased to be a colony, not being a republic, we are therefore in our constitution a kingdom, and I claim that it is high time we should come back to the thought of the fathers of confederation and give to our country as its official name that of Kingdom of Canada.
In 1864, at the conference of Quebec, it was decided by the fathers of confederation that the new British-American state which was being created on the North American continent should be a kingdom. It was so officially styled in a draft which was submitted to the House of Commons in Great Britain. History tells us that the British House of Commons, or the minister for the colonies of the time, to please our republican friends to the south, decided to change the name to "Dominion of Canada" instead of "Kingdom of Canada," as was desired by Macdonald, Cartier, Galt and all the other fathers of confederation. In my opinion this was a mistake. It was unfortunate, but at the same time there was not only the fear of the republican sentiment of our neighbours to the south, but also the fear of displeasing, as making for independence the

Kingdom oj Canada-Mr. LaVergne
rabid imperialists who then lived in Canada. It was stated at the time that an independent or another kingdom under the British crown could not exist, as such a course would be contrary to logic, the fact being forgotten that for a long time the king of Great Britain had been King of Great Britain and, before the union of 1603, King of Great Britain and Scotland; King of Great Britain and Ireland; King of Great Britain, Ireland and France; King of Great Britain, Ireland, France and Hanover, until the Salic law prevented Queen Victoria from becoming Queen of Hanover. We have seen the joint kingdom of Sweden and Norway. Perhaps the house will permit me to refer to a letter written by Sir John A. Macdonald to Lord Knutsford on July 18, 1889, in which he says:
The union was treated by them-
That is, the House of Commons and House of Lords in Great Britain.
-as if the British North America Act were a private bill uniting two or three English parishes. Had a different course been pursued -for instance, bad united Canada been declared to be an auxiliary kingdom, as it was in the Canadian draft of the bill-I feel sure (almost) that the Australian colonies would, ere this, have been applying to be placed in the same rank as "the Kingdom of Canada."
And he added a postscript:
On reading the above over, I see that it will convey the impression that the change of title from Kingdom to Dominion was caused by the Duke of Buckingham.
The Duke of Buckingham at the time was Minister for the Colonies.
This is not so. It was made at the instance of Lord Derby, then Foreign Minister, who feared the first name would wound the sensibilities of the Yankees. I mentioned this to Lord Beaeonsfield at Hughenden in 1878, who replied: "1 was not aware of the circumstance, but it is so like Derby, a very good fellow but one who lives in a region of perpetual funk."
Therefore, if our country in 1867 was not called the Kingdom of Canada, it was for those two reasons which seem antagonistic but which we often find in combination in our history-the rabid imperialists on one side and those who 'have, to use the words of Lord Beaeonsfield, "a funk" of the Yankees.
Since by the Statute of Westminster we have acquired a status of equal partnership, it is high time that we should recognize our independence, our real status of equality, the system which administers our country, and that, having ceased to be a dominion, we should be called the Kingdom of Canada. By taking this course, we should at the same time do away with the title of the governor general; we are governing ourselves and it would follow logically that the governor general who
represents in this country the King of Great Britain and of Canada, should be a viceroy. If this house will look into the history of the resolution passed by the conference of 1864 it will find that the fathers of confederation intended to have as the chief executive in Canada the King of England or as a representative one of the members of the royal family.
I have given the reasons for the resolution and have outlined the historical facts. There is one other point upon which I should like to 'be perfectly frank. In this twentieth century, particularly since the great war, we have seen thrones crumbling and frenzied democracy asserting itself. I speak on behalf of a race which has had only one motto since it has been known as the French race,-God and the king. I feel that a voice should come from the true American continent asserting the undoubted benefits of the monarchical system, recognizing at the same time the proud state which our country has attained. I feel that we should no longer be a dominion, no longer a crown colony or one administered by the Governor General, but a free nation in the British commonwealth known as the Kingdom of Canada under the sovereignty of the King of Great Britain, Canada, Ireland and the other kingdoms of the empire.
Pierre Édouard Blondin: Before further discussion takes place I dhould like to call the attention of the hon. member moving the resolution to the fact that he indicated the hon. member for Bellechasse (Mr. Boulanger) would second the motion. As the hon. member for Bellechasse has not been in his place to-day I feel called upon to ask the hon. member for Montmagny to name someone else.
Mr. LaYERGNE: I do not know whether I need a seconder, but if it is necessary I hope someone will second it.
Mr. JEAN-FRANQOIS POULIOT (Temis-couata): I am supporting it.


Pierre Édouard Blondin: I understand the hon. member seconds it.


Jean-François Pouliot: Yes, I second it. It is my pleasure to agree this time with the hon. member for Montmagny (Mr. LaVergne), a man who is a true patriot. Although I do not always agree with him there are occasions when one is glad to do so. As my good friend from Bellechasse (Mr. Boulanger) is not here to-night, I willingly second the motion.
There is one particular phase of the remarks of the hon. member for Montmagny which seems worthy of further comment, namely his reference to the viceroy. The old French

Income Tax-Mr. Munn
governors were known not only as governors but as viceroys, and at the present time if we adopt the suggestion of the hon. member opposite we would be reverting to traditional practice. May I make reference to those words appearing on the arms of the royal family, "God and my right." I have the greatest respect for the royal family, and I much admire the fact that they have emblazoned on their coat of arms the French expression "Dieu et mon Droit." To those who would be inclined to oppose a suggestion such as the present one, or that involved in the use of both languages on our currency, I would call attention to the fact that down through the centuries the royal family have chosen to have inscribed on their coat of arms the French words "Dieu et mon droit" and "Honi soit qui mal y pense."
I am pleased to support the remarks of the hon. member concerning the viceroy, but in closing should like to add one sentence in French. Although the speech of the hon. member for Montmagny was to the point and was most excellent, (Translation):	we
admit that all cannot understand why we should call Canada "a kingdom" since (text) il "empire" tout le temps.


Mr. J. H. STITT (Selkirk):: Mr. Speaker, before this resolution comes to a vote, and as there appears to be a dearth of speakers on a motion of such importance as this one which concerns our country's name,. I should like to say a few words extempore in praise of the name of our country, the Dominion of Canada. Probably it will be easier for me to make these remarks than certain other hon. members-and I say this without intention of offence-because an hon. member might ordinarily be censured for what might appear to be disloyalty if he ventured to speak against a motion of this kind. I imagine, however, that a man who bore arms in support of his country and of his king is not liable to that criticism.
Some years ago, if my memory serves me correctly, I wondered just, how the Dominion of Canada acquired its name. I learned that while the fathers of confederation were debating what name they should give our country one of the fathers whose habit it was to read the scriptures before retiring happened to read one of the psalms, the following verse of which struck his imagination: "He shall have dominion also from sea to sea and from the river unto the ends of the earth." It was because of that biblical expression, Mr. Speaker, that the Dominion of Canada was named. Against the resolution of my hon. friend, the Deputy Speaker, I urge that the 
sacred and historic character of our nature is enshrined in the word "dominion" more than it ever can be in the word "kingdom." There is perhaps another reason. Since the Statute of Westminster, and even before that date, the self-governing units of the empire have been referred to as the self-governing dominions. And I believe they have been so called, because that word has been used to denote not only our connection with the empire but our autonomy. That is another reason why we should continue to adhere to and hold dear the name "Dominion of Canada."
I did not expect that this resolution would come before the house this evening. I rather feel that on a matter of this kind, which is perhaps one of high policy, one on which many hon. members of this house would want to take time to deliberate, it would perhaps be in order if I moved the adjournment of the debate, and I do so move, seconded by the hon. member for Nelson (Mr. B. M. Stitt).
Motion agreed to and debate adjourned. INCOME TAX



INTEREST ON BEARER BONDS-PROPOSED COLLECTION BY DEDUCTION OP TAX ON PAYMENT OF COUPONS

Mr. A. E. MUNN (North Vancouver) moved:: Whereas the question of securing proper returns from taxpayers so that no revenue properly taxable is to escape taxation becomes of utmost importance, especially in times of decreasing revenues such as at present;
Whereas the securing of revenue from these sources is difficult inasmuch as bonds to the extent of hundreds of millions of dollars have been issued by the dominion and provincial governments as well as industrial companies, power and public utilities companies, the majority of these being bearer bonds transferable by delivery pass from hand to hand without any available record as to who holds them at any particular time.
Therefore be it resolved, that, in the opinion of this house, legislation should be introduced providing that banks, trust companies and other agents in making payment of -interest coupons on bearer bonds shall deduct from the amount of each coupon the tax returnable to the federal or provincial governments interested and be responsible for the deposit of -the same in the federal or provincial treasury.
He said: The resolution, as I see it, speaks for itself. I am not offering any criticism; I am offering what I consider a practical suggestion that- will in my opinion result in the return to the federal and provincial exchequers of large amounts of taxes that have been missed. The honest man, of course, will make his return, but unfortunately we have others, and there is -the danger that we are losing a lot of money in this way. It would be a very

Redistribution-Mr. Barrette
simple matter, in my opinion, to tighten up the regulations or introduce some new system so that there would be no possible chance of the treasury losing taxes due from those who are well able to pay.
One thing we must bear in mind; we must take care of the small investors, those whose revenue is exempt. If this tax is collected at the source and the small investor is compelled to pay it, then there would have to be some way of rebating it to those who come under the exemption.
I think this resolution should have the unanimous support of the house.
Hon. E.N. RHODES (Minister of Finance): With the principle of this resolution the government is in entire accord; we have complete sympathy with the object sought to be attained. We have no hesitancy in accepting the resolution, although I may point out that while accepting the principle in its entirety there may have to be some variation from the procedure outlined. This resolution provides that the tax shall be deducted when the individual coupon is cashed. In numerous instances such bonds are in the hands of small holders by whom there is no tax payable, and to make the deduction at the source would involve such individuals in hardships and delay waiting for the cumbersome machinery of government to move before receiving their rebate, which in the nature of things might have to be many weeks or perhaps months. A better method, one which I think can be equally effective, is that of keeping absolute check upon the cashing of each individual coupon; then as it is disclosed that the coupon in question ought to bear a tax, the assessment can be made and the money returned to the treasury. This method would not only avoid the necessity of making refunds but would also save a large sum in accounting costs, and inconvenience to the treasury.
As I have already intimated to the house, before this session closes a measure will be brought down which I think will completely and effectively carry out the object of this resolution.


[Stage Direction]
Motion agreed to.


Mr. J. A. BARRETTE (Berthier-Maskinonge) (Translation) moved:: Whereas this house will soon be called upon to effect a redistribution of electoral ridings in the various provinces constituting the Canadian confederation;
Whereas; the number of electoral ridings in each province other than the province of Quebec is based on the population unit of this latter province; and,
Whereas; the parliamentary representation of the province of Quebec with a population of 2,874,255 comprises 65 members, or a quotient of 44,219 per unit of representation; and,
Whereas; the parliamentary representation of the province of Ontario now comprises 82 members, with a population of 41,849 per unit of representation; and,
Whereas; notwithstanding the fact the population of the province of Ontario shows an increase in numbers but a decrease proportionally to the increase in the population of the province of Quebec, the latter province taking as a basis the unit of representation of the province of _ Ontario would be entitled to 69 members, New Brunswick 12. Manitoba 17, Saskatchewan 22, Alberta, 18, British Columbia 17;
Therefore be it resolved, that, in the opinion of this house, in order to promote harmony among the Canadian people, the parliament of Canada do grant to the provinces a just and equitable representation based on the unit of representation of the province of Ontario.
Mr. Speaker, the resolution which the house is called upon to consider tends to do justice to the provinces which have not their fair quota of representatives in this parliament. I am broaching a rather ticklish question. It should give rise to quite an important debate in the house, as all hon. members are interested in rightly representing their province and exacting the largest representation possible so as to assert their rights. The purport of this resolution is to prove to the house that the province of Quebec has not, at present, the quota of representation to which it is entitled according to the last census.
Ever since confederation, the representation of each province has been based upon the representation of the province of Quebec. Each had the number of members to which it was entitled taking as a unit the population represented by each of the sixty-five members of Quebec, the decennial census was to be the basis of reckoning.
According to the last census, the province of Ontario should be deprived of four seats, if Quebec is taken as the unit of representation, but if Ontario retains its eighty-two seats, Quebec should be given sixty-nine instead of sixty-five, if we wish to place Quebec on the same footing as Ontario. In claiming these eighty-bwo seats. Ontario bases it>s contention on section 51, subsection 4 of the British North America Act, which reads as follows:
On any readjustment the number of members for a province shall not be reduced unless the proportion which the number of the population of the province bore to the number of the aggregate population of Canada at the then

Redistribution-Mr. Barrette
last preceding readjustment of the number of members for the province is ascertained at the then latest census to be diminished by one-twentieth part or upwards.
That is equivalent to a loss of 5 per cent in the ratio of its population.
The number of members of the House of Commons may be from time to time increased by the parliament of Canada, provided the proportionate representation of the provinces prescribed by this act is not thereby disturbed.
It is with reference to this article that I shall base my contention that Quebec be given sixty-nine members and that the other provinces be given the representation in the same ratio. I shall point out to the hon. Minister of Trade and Commerce (Mr. Stevens) that, were he to accept my resolution, his province would be given three more members, Alberta, which is represented in the house by the right hon. Prime Minister (Mr. Bennett), would have two more members, and Saskatchewan one more. Would any one oppose this resolution simply because Quebec would be entitled to four more representatives? I do not think that this would be a good reason for rejecting the resolution which I have the honour to submit to the consideration of the house.
When confederation was decided upon, this case was particularly dealt with by the fathers of confederation and a long debate ensued on this point, Sir Henri Joly de Lot-biniere had foreseen the situation which presents itself to-day. If you will permit me, I shall read to the house an excerpt of the discussion which then took place. In the Hansard of 1865, at pages 359 and 360, you will note, sir, that the Fathers of Confederation attached great importance to this question.
The following are the clauses of the resolution of the Quebec Conference which settles the organization of the House of Commons, especially as regards the number of representatives :
17.	The basis of representation in the House of Commons shall be population, as determined by the official census every ten years, and the number of members at first shall be 194, distributed as follows:
Upper Canada, 82.
Lower Canada, 65.
Nova Scotia, 19.
New Brunswick, 15.
Newfoundland, 8.
Prince Edward Island, 5.
18.	Until the official census of 1871 has been made up, there shall be no change in the number of representatives from the several sections.
19.	Immediately after the completion of the census of 1871, and immediately after every decennial census thereafter, the representation from each section in the House of Commons shall be readjusted on the basis of population.
20.	For the purpose of such readjustment, Lower Canada shall always be assigned 65

members, and each of the other sections shall at each readjustment receive, for the ten years then next succeeding, the number of members to which it will be entitled on the same ratio of representation to population as Lower Canada will enjoy according to the census last taken by having sixty-five members.
21.	No reduction shall be made in the number of members returned by any section, unless its population shall have decreased, relatively to the population of the whole union, to the extent of five per centum.
22.	In computing at each decennial period
the number of members to which each section is entitled, no fractional parts shall be considered, unless when exceeding one-half the number entitling to a member, in which case a member shall be given for each such fractional part.	.
I object, says "Sir Henri Joly de Lotbimere to the 21st clause, because it contains provisions which are unjust to Lower Canada. The full scope of that clause is not generally understood; that proportion of five per cent appears to be a very small affair, and yet, under certain circumstances, it might produce considerable results, which are not taken into consideration in the explanations given on that subject in the work written by the Hon. Mr. Cauchon, which the government has caused to be distributed (pages 72 to 87). It is difficult to foretell what the exact numerical increase of the several provinces will be from the present time to the next census in 1871. The Hon. Mr. Cauchon assumes, as the basis of his calculations, a rate of thirty per cent. Let us suppose the case to prove that in all the provinces (with the exception of Lower Canada) the population increases by thirty per cent between 1861 and 1871, and that of Lower Canada increases by thirty-four per cent. It may, perhaps, be objected to this that it is improbable. My reply is, that when we are discussing a scheme of such importance as that which is now under our consideration, we should provide for all possible contingencies; but this one is far from being impossible if the predictions of the Minister of Finance and the Attorney General, who promise to Lower Canada so brilliant a future under the federal system, are fulfilled. If Lower Canada become' the heart of the commercial life; if the mines of copper, lead, silver, and gold which we have lately discovered should produce the same results that they produce everywhere else, that of attracting a great influx of population, I cannot be accused of any great exaggeration in supposing that the population of Lower Canada may, between the years 1861 and 1871, increase by four per cent more than the population of the other provinces. In the case which I have supposed the increase would be as follows:

Upper Canada	 418,827
Lower Canada	 377,625
Nova Scotia	 99,257
New Brunswick	 75,614
Newfoundland	 [DOT]	39,000
Prince Edward Island	 24,227
Total increase	 1,034,550
According to this calculation, Lower Canada would have in 1871, a population of 1,488,289 souls, which would have to be divided by 65, that being the invariable number of representatives assigned to Lower Canada, in order to ascertain what would be the number of con-

Redistribution-Mr. Barrette
stituents for each representative in the federal parliament. The result will be found to be 22,896. Upper Canada would have a population of 1,814,918 souls, which, divided by 22,896 would give her 79 representatives instead of 82. Nova Scotia would have a population of 430,114 souls, which wrould give her 19 representatives as at present (eighteen and a fraction over the half). New Brunswick would have a population of 327,661 souls, which -would give her fourteen representatives instead of fifteen. Newfoundland would have a population of 169,000 souls, which would give her seven representatives instead of eight. Prince Edward Island would have a population of 104,984 souls, which would give her five members as at present (i.e. four and a fraction over the half). It would be seen that if the five other provinces were represented on the same scale as Lower Canada, they would, in 1871, lose among them five members; but as the total population of each will not have decreased by five per cent, relatively to the total population of the confederated provinces, there will be no reduction in the number of their representatives, in accordance with the provisions of this twenty-first clause. It is the interest of Lower Canada, more than any other province, to watch with a jealous eye over the mechanism adopted for the organization of the federal legislature. In case of a vital question arising, we should have to counteract the votes of these five members (who ought, in justice, to be deducted ipom the representation of the other provinces) by those of five of our members, whose votes would thus be lost to us, as would also be the weight which their five united counties, with a total population of 114,480 (or 22,896 for each county), would throw into the scale.
As you will note, Mr. Joly complained then of what is happening to-day. But Sir Hector Langevin, one of the fathers of confederation, pointed out to him that he misinterpreted the Confederation Act, and I am quoting an extract from his speech of February 21, 1865, page 391, of the Debates of the House of Commons of that day.
The hon. member for Lotbiniere, getting over his fears and predictions and speaking of the sixty-five members from Lower Canada, put the following question-"Suppose the papulation in Lower Canada should in ten years increase thirty-four per cent, while that of the other provinces increases only thirty per cent, would it not be unjust to Lower Canada that the number of its representatives should remain the same, should still be sixty-five, while that of the other provinces will be increased; while in any case the number of representatives from the provinces is not to be diminished unless their population should diminish five per cent?" This point is very important, but we must observe that whatever the increase of the population in the other provinces, the part from Lower Canada is fixed and known. Thus, for instance, if the population of Upper Canada should increase more than that of Lower Canada, the latter would always have sixty-five members, the other provinces receiving such increased number of representatives as their increased population would entitle them to. But the resolutions do not prevent Lower Canada from having more than sixty-five representatives, if its population should increase faster than that
of the other provinces. The French translation of these resolutions is erroneous, for its says that "for the purpose of determining the number of representatives from each province at the end of every decennial census, Lower Canada shall never have either more or less than sixty-five representatives," whereas the English version of the resolutions, which is the official version, says: "Lower Canada shall always be assigned sixty-five members." This does not mean that Lower Canada can never have more than sixty-five members, but that it cannot have less than sixty-five members. That is, I think, a categorical answer to the hon. member's objection.
This is a categorical answer, stated Sir Hector Langevin, asnd this categorical answer was never contradicted in that debate. Therefore, we should consider as a fact, that the basis of representation of the provinces in the House of Commons is the population of these provinces.
Moreover, allow me to read extracts from the proceedings of the deliberations of the delegates from the provinces of British North America assembled in October 1864, at Quebec, to discuss the scheme of confederation:
Minutes of the deliberations of the conference of the delegates from the provinces of British North America, October, 1864.
Conference Chamber,
Parliament Buildings,
Wednesday, October 19, 1864.
It was moved by the hon. Mr. Brown:
That the-basis of representation in the House of Commons shall be the population as determined by the official census every ten years; and that the number of members at first shall be two hundred-distributed as follows:

Upper Canada	 89
Lower Canada	 65
Nova Scotia	 19
New Brunswick	 15
N ewfoundland	 7
Prince Edward Island	 5
That each section shall distribute its representatives in such electoral divisions as it deems best;
That until the official census of 1881 has been made up, there shall be no change in the numbers of the representatives from the several sections;
That immediately after the completion of the census of 1881, and immediately after every decennial census thereafter, the representation in each section shall be readjusted on the basis of population;
That for the purpose of such readjustment, Lower Canada shall always be assigned sixty-five members, and each of the other sections shall at each such readjustment receive, for the ten years then next succeeding, the number of members to which it will be entitled on the same ratio of representation to population as Lower Canada will enjoy according to the census then just taken by having sixty-five members.
That no reduction shall be made in the number of members returned by any section, unless its population shall have decreased relatively to the whole population of the whole federation to the extent of five per centum or over;

Redistribution-Mr. Barrette
That in computing at each decennial period the number of members to which each section is entitled, no fractional parts shall be considered, unless when exceeding one-half the number entitling to a member, in which case a member should be given for each such fractional part;
That the number of members may at any time be increased by the federal parliament -regard being had to the proportionate rights then existing.
Mr. Galt:	In reference to Mr. Browns
motion, I propose 225 members instead of 200. If we divide 225, according to population, I calculate it would give:-
Upper Canada	
Lower Canada	
Nova Scotia	
New Brunswick	
Newfoundland	
Prince Edward Island
74
17
6
We should commence with the census of 1861, and readjust after each subsequent census. We have supposed that the population of Lower Canada, being tolerably equable in its character, would afford the best basis. But haring respect to the rapid increase of Upper Canada, we think the lower provinces should not be reduced if they do not increase in the same ratio. Therefore, the lower provinces would have the same as they have now unless in the very improbable case of any one falling off by five per cent or more-that is a decrease relatively to the whole population.
Mr. Brown: We thought it best not to take the census of 1861, but the proportionate increase in five years thence and change in 1881, but this may not be intelligible. It may be better to take the census of 1861. In that case the figures in the motion would be as follows:-
Upper Canada	 82
Lower Canada	
Nova Scotia	 19
New Brunswick	 1"
Newfoundland	 "
Prince Edward Island	 5
Mr. Tupper: That is better, as the public m the other case liave no data.
Mr. Brown: In the apportionment, if a fractional part, we don't allow it; if over one-half, we allow' one.
Mr. Johnson: But if you have quadrennial parliaments, you may by increase of population have to increase your members in the assembly at an improper time.
Mr. Tilley: And to alter your electonal divisions.
Mr. Brown: After the census of 1871, we shall adopt the same rule. The practical result will be that while Lower Canada certainly will not be less and the lower provinces may increase in population, they cannot decrease in the number of representatives. It keeps the house within a reasonable limit. It is now to start with one in 17,060. It will afterwards vary. There is just one difficulty. Messrs. Galt and Cartier think the number too small. They think the house should number 216. In that event, Mr. Galt proposes that Lower Canada should get 73, and the rest in proportion, so as
[Mr. Barrette.}
to get, on the basis of the census of 1861, 216 in the house.
Mr. 'Coles: 1871 is too soon to alter. It should be in 1881.
Mr. Galt: Upper Canada will not consent to that, and it must be so definitely understood.
Mr. Tilley: We have fourteen counties, some with four representatives, others with two, and the City of iSaint John, two. Twenty one, the number stated in the printed motion, would better answer us. I agree with Mr. Brown's proposition to begin with a goodly number, that it may not be disturbed for some time to come.
Mr. McCully: I advocate the adoption of the measure as it stands. I do not think we should make local distribution of members.
Mr. Archibald:	By accident the proposed
arrangement will suit both Nova Scotia and New Brunswick. One member for each county, and one for each metropolis, will give the exact number provided in Mr. Brown's scale of 193.
The several provinces announced their consent and approval of the scheme of 193 members based on the census of 1861, as precisely suiting the mode in which each could adapt the electoral divisions at present existing to such a state of things.	_
Mr. Shea, however, argued that inasmuch as a Newfoundland census was taken in 1857, an allowance for the .period intervening between that date and 1861 would entitle Newfoundland to another representative. It was conceded by all the provinces that Newfoundland should have another representative, thus raising its number to eight, and the whole number to 194.
Mr. Brown's motion carried, Prince Edward Island alone voting nay.
Mr. Haviland: Prince Edward Island would rather be out of the Confederation than consent to this motion. We should have no status. Only five members out of 194 would give the Island no position.
Mr. Tilley: That is rather singular ground of objection, for they objected to the basis of representation by population. Now it was fully understood at Charlottetown that those who came to the conference expected representation by population. Some difficulty might have arisen on those points but not on this.
Mr. Palmer: I am not inimical to the grand scheme of Confederation. I believe it will be productive of great benefit. But I take exception to the principle adopted by this resolution. Representation by population is not applicable -when a certain number of provinces are throwing their resources into one confederation, and giving up their own self-government and individuality. When a colony surrenders that right, she should have something commensurate in the Confederation. The debt of Prince Edward Island is nothing. Our taxation is vastly below that of the other provinces. Our trade and revenue are rapidly increasing. Why give up so great certainties for an uncertain benefit where we have only a feeble voice? Looking first at the larger provinces, Canada has secured to herself a greater number of representatives than she had before. It may be said that we may join with the other maritime provinces in any matters affecting our common interests, but even then our united strength would still be far below Canada's number of representatives. Not even two or three more members would induce me to give my assent to the scheme. I never understood that any proposition at Charlottetown was to be binding as to representation

Redistribution-Mr. Barrette
by population. It was there made by those from Canada and I did not think it necessary to remark on it, as it *was a mere suggestion then thrown out by Canada for consideration.
Mr. Shea: The speech just made should have been delivered before we came to this conference. What has brought us here? What brought about the conference except the difficulties in Canada over the question of representation by population? We came here from Newfoundland with that understanding. Canada could not give way in such a matter. Prince Edward Island is in a better position than Newfoundland as regards the Legislative Council, as they have an equal number of representatives therein.
Mr. Coles: Newfoundland is the cause of our getting a less representation in the Legislative Council than we should otherwise have had. I understood that this matter was to be settled on the basis of representation by population. I stated lately that I thought our Prince Edward Island government should not have sent us here unless to carry out these views stated by the Canadian government. The Attorney General of Prince Edward Island (Mr. Palmer) now states that the government cannot accede to it. I think that we came here prepared for representation by population, and I regret that the Attorney General of Prince Edward Island had not previously stated that he could not accede to the principle and withdrawn from the conference.
Mr. Haviland: I am not a member of the Prince Edward Island government. I express only my individual opinion.
Mr. Coles: Then the government should have instructed their delegates properly.
Colonel Gray (Prince Edward Island): My colleagues and myself feel in a humiliating position. We feel that a slur has been cast by Mr. Coles on the government which I have the honour to lead. I came to the conference understanding fully the question. I have never had any conversation with the Attorney General on the subject. My idea was as dear as the sun at noonday that we were to treat on the basis of representation by population. The Attorney General heard as much as I did at Charlottetown. Certainly none of us should have been here unless the members of our delegation had been agreed on the point. AH that I could get for Prince Edward Island I would, but I fancied we were fully agreed on these points at Charlottetown, and that our discussion was to be about details.
Mr. Galt: It would be a matter for the greatest Tegret that any difficulty should arise over this matter. We request the Prince Edward Island delegatee to reconsider their position. It would be a matter of reproach to us that the smallest colony should leave us.
Mr. Whelan: I should feel it my duty to-night to vote against the resolution, but we had better reconsider the matter. Mr. Haviland and I came here perfectly untrammelled and without any instructions from the Governement of Prince Edward Island. We understand that all proceedings were to be de nova and apart from anything which had taken place at Charlottetown. I thought that Prince Edward Island had not been fairly treated as to representation in the Legislative Council, but I gave way on that occasion. I do not think, however, I could say that I was satisfied with the representation
of five in the Federal House of Commons. We are in an isolated position. Our resources are large, and our people would not be content to give up their present benefits foT the representation of five members. It may be said that the Confederation will go on without Prince Edward Island, and that we shall eventually be forced in. Better, however, that, than that we should willingly go into the Confederation with that representation. But if the government who form the delegation will take the responsibility on them, I may support them.
Adjourned at 10 o'clpck p.m.
Thursday, 20th October, 1804.
Mr. Brown: I desire to ask if the Prince Edward Island delegates will state what their views are on the resolution of last evening?
Mr. Palmer: On making my observations last night I was under the impression with respect to any vote given that the party voting was bound to maintain it. Dr. Tupper had said whoever voted for a proposition could not afterwards oppose it in his local legislature, and such appeared to be the general opinion by tacit consent. I could not consent that Prince Edward Island, free of debt comparatively, should come into federation with the other provinces indebted largely, especially as nothing had been said or settled as to the relative share of the burden to be borne by each. I am told, however, by my colleagues from Prince Edward Island, that the financial question will follow the present discussion, and that the matter of representation must depend on the financial resolutions. That may alter our position. _
Mr. Coles: Every question must stand on its own footing. Why mix up financial matters with representation?
Colonel Grey (Prince Edward Island): I am instructed by my co-delegates to say that the provision of five members is unsatisfactory. Prince Edward is divided longitudinally into counities, each returning ten members. But they are always opposed to change of representation. We cannot divide the three counties among the five members.
Mr. Brown: Every province must revise its own electoral division to suit the number to its representation.
Mt. Coles: Mr. Galt had proposed six members for Prince Edward Island. I approve that rather than Mr. Brown's motion, because it allows us to give to our three counties two members each.
Mr. Pope: I was absent last night. I was under the impression that it had been clearly laid down at Charlottetown that representation by population was to form the basis of he Lower House. I could not, therefore, have argued for a greater number than our population entitled us to get. I agree in all that has been said by Colonel Gray and Mr. Coles. But the circumstances of Prince Edward Island are such that I hope the conference will agree to give us such a number as we can divide amongst our three constituents. Nature, as well as the original settlement of the Island, has made three counties, and it will give rise to much difficulty if we had to adjust five members to the three counties. I cannot ask it as a matter of right, but one of expediency as one without which it is impossible for us to carry the measure in Prince Edward Island, I, therefore, ask for six members.

Redistribution-Mr. Barrette
Mr. Haviland: I fully agree with Mr. Pope. It would be an insuperable difficulty if we had not six members.
Mr. Brown: To give Prince Edward Island five members the total population should be 205. It is obvious we cannot depart from representation by population. The only thing to do would be to take Prince Edward Island as the basis which would give a House of 230, altogether too large. Give one member to each county, and let the whole Island elect the other two, and keep the number five intact; or let the whole Island elect five. We should have to add thirty eight members to the House in order to give Prince Edward Island, six as the basis of representation by population.
Mr. A. A. Macdonald: We are not bound by the principle of representation by population laid down at Charlottetown. Our constituents will say and will speak of the increased representation of Canada, and decrease representation of the Lower Provinces.
Mr. Galt: There is no use in asking the conference to depart from the principle laid down. We cannot justify it. If the principle is good it is the game for all, and we could not defend the action of giving 13,000 in Prince Edward Island a number where it required 17,000 in any other province for that purpose. It wquld be indefensible. The difficulty is of a purely local nature. It is impossible for the conference to depart from the rule of population being the basis of representation.
Mr. McCuIly: There is another reason. As to the constitution of the Upper House, we looked on that as flexible. If we made the concession perhaps Prince Edward Island might not come in, and, besides, the Northwest might require, for a local reason, an increased representation irrespective of population. The rule of representation by population must be rigid and unyielding.
Mr. Dickey: Give one member to each county in Prince Edward Island, one to Charlottetown, and one elected by the whole Island. Members elected for the federal legislature would not be elected for local purposes, but are representatives of the whole Island. It is a question for Canada. We (Nova Scotia) would concede six members though it would place us in difnoulty.
Mr. Haviland: There is no solution in the above proposition.
Mr. Pope: Religious feeling in Prince Edward Island runs very high. The Protestants outnumber the Roman Catholics, and in consequence the fifth number as proposed by Mr. Dickey would not represent the Roman Catholics.
Mr. Fisher:	I came here convinced that
representation by population was settled as the basis upon which the provinces were to be asked to confederate.
Mr. Coles: Whatever may be the result of this matter, Prince Edward Island should submit. The question has been settled. Let us go on with the business, and let Prince Edward Island settle for themselves when the question comes before them.
And after the debate:
And the question of concurrence being put on the motion of the Hon. Mr. Brown, the conference divided, and the names of the provinces were taken down as follows:

Yeas
Canada	r	 2
Nova Scotia	 1
New- Brunswick	 1
Newfoundland	 1
Nays
Prince Edward Island	 1
So it passed in the affirmative.
And the hour of ten o'clock p.m. ensuing, and a motion for adjournment being carried, the chairman declared the conference adjourned until to-morrow.
I wish to draw the attention of the House to the adoption by this conference of a re-sohition as proposed by Mr. Brown, and which reads as follows:
The basis of representation in the House of Commons shall be population, as determined by the official census made every .ten years, etc.
Immediately after the completion the census of 1871, and immediately after every decennial census thereafter, the representation in each section shall be readjusted on the basis of population.
For the purpose of such readjustments Lower Canada shall always have sixty-five members, etc.
No reduction shall be made in the number of members returned by any section, unless its population shall have decreased relatively to the whole population of the whole federation to the extent of five per centum or over.
The federal parliament may at any time increase the number of members-regard being had to the proportionate rights then existing.
And as they discussed these resolutions, the delegates became more familiar with the subject. Thus, Mr. Galit explains clearly that the clause providing that a province may keep its representation in the event of a decrease in its population of less than five per centum has been inserted so as to protect all other provinces against that of Ontario, and he expresses himself in the following terms:
We should commence with the census of 1861, and readjust after each subsequent census. We have supposed that the population of Lower Canada, being tolerably equable in its character would afford the best basis. But having respect to the rapid increase of Upper Canada, we think the lower provinces should not be reduced if they do not increase in the same ratio. Therefore, the lower provinces would have the same as they have now unless in very improbable case of any one falling off by five per cent or more-(that is a decrease relatively to the whole population.
And Mr. Brown added:
The practical result will be that while Lower Canada will not be less and the lower provinces may increase in population they cannot decrease in the number of their representatives. It keeps the house within reasonable limits.

Redistribution-Mr. Barrette
The above two quotations show very clearly that the clause concerning the five per centum has not been inserted with a view to protecting the province of Ontario. It was in fact an arrangement proposed by the latter province with a view to win the other provinces to the principle of representation by population. This principle was further advocated by the several delegates to the conference with the exception, however, of the delegates from Prince Edward Island who were against population forming the basis of representation, and they preferred at first to remain out of the confederation rather than consent to this measure.
Following are some declarations made by a few of the delegates:
Mr. Tilley:	It was fully understood at
Charlottetown that the several delegates who came to the conference expected representation by population.
Mr. Shea: The conference was brought about by the difficulties arising in Canada over 'the question of representation by population. We came from Newfoundland with this understanding. Canada cannot give way in such a matter.
Mr. Coles: I understood that this matter was to be settled on the basis of representation by population.
Colonel Gray: My idea was as clear as the sun at noonday that we were to treat on the basis of representation by population.
Mr. Pope: I was under the impression that it had been clearly laid down at Charlottetown that the House of Commons was to be constituted upon the basis of representation by population.
It was also in the course of the same speech that Mr. Pope proposed that Prince Edward Island be given an additional member, not as a matter of right, but one of expediency.
To which Mr. Brown took objection on the ground that this would have made it necessary to increase the number of members from the other provinces.
Mr. Galt added:
It is impossible for the conference to depart from the rule of population being the basis of representation.
Mr. McCully added:
The rule of representation by population must be rigid and unyielding.
The motion of Mr. Brown was then carried by the conference of Quebec in 1864, adopting the principle of representation by population.
The following year, on March 13, 1865, the Provincial Parliament of Canada after a lengthy debate also adopted the terms of the Act of Conference concerning the following clauses: 17, 18, 19, 20, 21, 22, 25.
In the course of the discussion, it was emphatically declared that representation should be constituted on the basis of population, and Sir Hector Langevin in his speech, an excerpt of which I have already quoted, declared that clause 21, in respect to the five per centum clause, cannot work to alter the basis of representation by population. As in the hypothetical case presented by Mr. Joly, the representation of Quebec will be increased.
I also wish to draw the attention of the House to the fact that following the conference of Charlottetown, that of Quebec in 1864, and a meeting of Parliament of Canada, in 1865, there was held in London a conference of the delegates from the provinces of Ontario, Quebec, Nova Scotia and New Brunswick.
The following is the official correspondence relating to this conference:
Appendix

Westminster Palace Hotel, London, S.W., Dec. 4, 1866.
My Lord,
I have the honour to inform you that the delegates from the provinces of Canada, Nova Scotia, and New Brunswick met this morning and formed themselves into a conference for the purpose of arranging the terms of union of those provinces.
The gentlemen forming the conference are as follows:

The Hon. John A. Macdonald, Attorney-General, Upper Canada, and Minister of Militia of Canada.
The Hon. G. E. Cartier, Attorney-General of Lower Canada.
The Hon. A. T. Galt.
The Hon. W. McDougall. Provincial Secretary.
The Hon. W. P. Howland, Minister of Finance.
The Hon. H. L. Langevin, Postmaster General.



NOVA SCOTIA

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The Hon. Charles Tupper, Provincial Secretary.
The Hon. W. A. Henry, Attorney-General.
The Hon. J. W. Ritchie, Solicitor General.
The Hon. J. McCully.
The Hon. A. C. Archibald.

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The Hon. P. Mitchell, President of Council.
The Hon. R. D. Wilmot.
The Hon. S. L. Tilley, Provincial Secretary.
The Hon. Charles Fisher, Attorney-General.
The Hon. J. M. Johnson.
I have the honour further to inform Your Lordship that I was then appointed Chairman, and Lieut.-Col. H. Bernard, Secretary of the conference.
I have the honour to be, My Lord,
Your Lordship's most obedient servant,
John A. Macdonald.
The Rt. Honourable,
The Earl of Carnarvon,
Secretary of State for the Colonies.
Westminster Palace Hotel, London, December 25, 1866. Dear Lord Carnarvon,
I am happy to inform you that the delegates who have sat steadily from the 4th to the 24th
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Redistribution-Mr. Barrette
inst., have arrived at a satisfactory conclusion, and have adopted by unanimous vote of the provinces, a series of resolutions which I shall transmit to-morrow morning to Your Lordship at the Colonial Office.
The delegates desire me to convey to you their views that it is expedient to avoid any publicity being given to the resolutions until the bill is finally settled and ready to be laid before parliament. They think that their early publication would answer no good purpose, and might -tend to premature discussion on imperfect information of the subject both in this country and United States.
Believe me,
Dear Lord Carnarvon,
Yours very sincerely,
John A. Macdonald.
The Rt. Honourable,
The Earl of Carnarvon,
Secretary of State for the Colonies.
Westminster Palace Hotel, London, December 26, 1866.
My Lord,
I have the honour to transmit to you by desire of the conference of delegates from Canada, Nova Scotia and New Brunswick, a series of resolutions. They submit these resolutions for the favourable consideration of Her Majesty's government with a view to the early introduction of a bill into the Imperial parliament based upon them.
The delegates purpose to reassemble here on Friday the 28th inst., and shall be glad to wait on Your Lordship at your convenience for the purpose of arranging the course of action.
I have the honour to be, My Lord,
Your Lordship's very obedient servant,
John A. Macdonald. The Rt. Hon. The Earl of Carnarvon.
December 28, 1866. Downing Street,
Sir:-
I am directed by the Earl of Carnarvon to acknowledge .the receipt of your letter of the 26th instant, forwarding resolutions in which the delegates from Canada, Nova Sootia and New Brunswick have embodied the principles on which they desire that a bill may be introduced into parliament for the union of those provinces.
Lord Carnarvon will at once give his careful attention to these resolutions, and as soon as His Lordship shall have had time to give them the consideration which they require, he will not delay to fix a day and hour when he may have the pleasure of conferring with you and the other gentlemen who are acting with you on the subject.
I am, sir, your obedient servant,
Frederic Rogers.
The Hon. John A. Macdonald.
Confidential.
Highclere Castle,
Newbury, December 28, 1866. My Dear Sir:-
I received this morning your official letter and the resolutions of the delegates.
I found it difficult to consider them in their present form and have sent them to London to-day to be put into type; but I will on their return to me lose no time in giving them my

best attention. I will communicate with you, as soon as I have sufficiently mastered the changes introduced, to fix a meeting with yourself and the delegates.
I quite agree in the expediency of considering the resolutions private for the present.
Believe me, my dear sir,
Yours very faithfully,
Carnarvon.
The Hon. J. A. Macdonald.
The resolution relating to the House of Commons reads as follows:
The House of Commons shall be constituted upon the basis of representation by population and shall consist of 181 members, distributed as follows: Upper Canada, 82; Lower Canada, 65; Nova Scotia, 19 and to New Brunswick, 15; and after the decennial census of 1871, and every decennial census thereafter, upon the termination by a dissolution or otherwise of the parliament then existing, the representation from each province shall be readjusted, and for that purpose shall always be assigned 65 members, and to each of the other provinces at each readjustment shall be assigned the number of members to which it will be entitled in the same ratio of representation to population as Lower Canada will have.
In the computation at each decennial period of the number of members to which each province i3 entitled, no fractional part shall be considered, except in cases when any such fractional part shall exceed one-half the number which would entitle a province to a member on the basis of population, in which case a member shall be assigned for each such fractional pant; and no reduction shall be made in the number of members to be returned by any province unless its population shall have decreased relatively to the population of the whole union, to the extent of five per centum.
The parliament may at any time increase the number of members in the House of Commons, but such increase shall be in the proportion to which each province would be entitled under this act.
Once more you can see that it i.s stipulated that population shall form the basis of representation and that the parliament may at any time increase the number of members in the House of Commons, such increase to be in the proportion to which each province is entitled. You will further notice that the reason why Quebec is assigned 65 representatives is being given in the following terms:
Representation from each province shall be readjusted and for the purpose of such readjustment Lower Canada shall always have sixty-five members.
This number of sixty-five members is established for the purpose of the readjustments, because it represented at that time the number of representatives Quebec was entitled to get 'according to its population. It was never intended to limit at sixty-five the number of representatives from Quebec, but simply to settle the total number of representatives in parliament, using as a basis the population

Redistribution-Mr. Barrette
of Quebec which, it was expected, would increase with more stability than that of the other provinces.
The Act of British North America was subsequently passed by the Imperial parliament. The only difference between the statute enacted by the latter parliament and one parsed by the Canadian delegates, is in the phraseology. The rule in respect to population being the basis of representation is clearly defined therein.
If, because of subsection 4 of section 51 of the Act of North British America, the principle of representation by population is materially affected, then we must, as explained by Sir Hector Langevin, take advantage of section 52 of the .same act which stipulates that the number of members of the House of Commons may be increased by parliament, from time to time, regard being had to proportionate rights then existing, as provided by the act.
I ought to remind you, sir, at this time that the Act of Confederation of British North America has been altered at London, and that subsection 1 of section 51, which reads: "Quebec shall have the fixed number of 65 members," has been substituted for the original clause reading, "For the purpose of readjustments, Lower Canada shall always be assigned 65 members. . . . " etc. Both versions, however, must be interpreted as meaning that Quebec is to have a minimum of 65 members.
It is obvious that this number wa.s adopted because it was expected then that the population of our province would increase gradually and come nearest to the average increase in population of the whole country-and that is exactly what happened; the increase in population of the province of Quebec has been proportionate to the average increase of the whole population of Canada. On the other hand, the population of the province of Ontario, after increasing for a few years, has not been decreasing relatively to the increase of the general population, seemingly to the extent of 3; 86 per centum.
Therefore, it is obvious that unless parliament avails itself of its power, as per the provisions of section 52, of the British North America Act to raise the number of representatives in the House of Commons, that Ontario shall continue to retain its 82 members, in spite of the fact that the population will be decreasing by 3.86 per centum at each census compared with the increase of the rest of the population.
At the time of the 1921 census, Ontario was entitled to get no more than 81 members;
nevertheless, the latter province has, in accordance with the provisions of subsection 4 of section 51, retained its 82 members. The retaining of this one member did not in itself constitute a great injustice to the other provinces, but it created a precedent in can-sequence of which, upon the date of the census of 1931, Ontario has retained four members above the number which its population entitled it to get. What will the result be upon the census of 1941 and thereafter?
Let us suppose that the Dominion of Canada shall increase in population in the proportion of 18.4 per centum every ten years; that the province of Quebec shall also increase in the same proportion,, that is 27.71 of the total increase, while the increase for the province of Ontario relatively to that of the other provinces, shall be less, gradually to the extent of 3.86 per centum-less than one-twentieth. Thus, Ontario, never decreasing to the extent of one-twentieth relatively to the general population of the dominion shall upon every census retain its 82 members, and we will then have the following result, in 1941, the population of the whole of Canada shall be 12,241,551; that of Quebec shall be 3,392,133, while that of Ontario shall be of 3,848,743. Nevertheless, Quebec shall have 65 members-one member per every 52,186 of population; while Ontario, with a population not entitling it to get more than 74 members, shall retain its 82 members -8 members above the number to which it is entitled, and each of its members shall be elected by 46,936 constituents-5,250 less than in each county in the province of Quebec, which will nullify the votes of 341,250 voters of 'the latter province. In 1951, the popular tion of the dominion shall be 14,445,030; that of Quebec, 4,012,717, and that of Ontario, 4,316,174. Thus, Quebec with its number of sixty-five, shall have one member to every 61,734 which ought to bring down the representation from Ontario to 70 members; yet, because its comparative decrease in population will be less than one-twentieth, the province of Ontario shall retain its 82 members, each one of whom shall represent a population of 52,635 which is 9,099 less constituents than in every county in the province of Quebec, and will nullify 591,435 votes from our province.
In 1961, the population of the dominion shall be of 17,045,135; that of Quebec, 4,723,206 and that of Ontario, 4,840,818. Each member from Quebec shall represent 72,666 constituents. While the representation from Ontario should be reduoed to 67 it will, nevertheless, retain its 82 members. Each of these 82 members representing 59,034 constituents,
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Redistribution-Mr. Barrette
which is 13,632 less than in each county in the province of Quebec, and will nullify 886,080 votes from the latter province. In 1971, the population of the dominion shall be 20,113,259, that of Quebec, 5,573,382 and that of Ontario, 5,426,557.
You will notice that in 1971, the Ontario population shall be slightly less than that of Quebec, nevertheless that province shall have retained its 82 members as against 65 from Quebec. In 1971, Ontario shall be assigned one member for a population of 66,177 while Quebec shall have one member for a population of 85,600, a difference of 19,423 per county, which nullify 1,262,495 votes from the latter province and 3,059,637 from all over Canada.
This proportion is absolutely ridiculous, in fact so much so that it makes it obvious that section 52 has been inserted to correct section 51 which is solely a clause to guarantee a certain minimum representation to the province.
The following is a schedule of figures I have
just quoted.	Popu-	Papu-	Popu-lation	lation	lation
Census

Canada	Quebec	Ontario1861 . .	3.171,418	1,111,566	1,396,0911871 . .	3.689,257	1,191,516	1,620,8511881 . .	4,324.810	1.359,027	1,926,9221891 . .	4,833.239	1,488,535	2,114,3211901 . .	5,371.315	1,638,898	2,182,9471911 . .	7.206,643	2,005,776	2,527,2921921 . .	8,787,949	2,367,665	2,933,6621931 . .	19,374.196	2.874,255	3,431,6831941 . .	12.241,551	3,392,133	3,848,7431951 . .	14,445,030	4,012,717	4,316,1741961 . .	17,945,135	4,723,206	4,840,8181971 . .	20,113,259	5,573,382	5,426,557The 1931	census	gives too	considerable
advantages to the province of Ontario for the other provinces to ignore the situation. If Ontario is to be allowed 82 members without increasing the representation of the other provinces, then the result will be that each member from Ontario will represent 41,856 constituents as against 44,219 for every member from the other provinces, (except Prince Edward Island) a difference of 3,269 constituents per county, which would make a total of 212,485 constituents whose votes would be nullified in Quebec only, or a total of 519,771 for the whole of Canada.
The British North America Act is the result of an agreement signed by the delegates from the several provinces of the Dominion, the basis of which being that every province shall be represented in the House of Commons by a number of members proportionate to its population. Every province had insisted on this condition and this is precisely why Prince Edward Island remained out of the confederation at the start.
[Mr. Barrette.!
The idea of confederation originated in Ontario, the most powerful of all provinces of the dominion, which for years had requested the representation by population.
Subsection 4 of article 51, was inserted with a view to the protection of the smaller provinces, and it never occurred to any of the delegates at the time that this clause might some day, serve to give the larger province of the dominion such a considerable advantage over the other provinces.
The population of Ontario which is affected by subsection 4 of section 51-that is to say one-twentieth of its comparative population, is four times more considerable than that of the second largest province-exception being made of Quebec-and thus give her a protection four times greater.
Parliament has not only the power but it has also the duty to carry out the provisions of section 52 of the act with a view to the re-adjustment of the representation from the provinces so that Ontario shall not be assigned a higher percentage of the membership of the house than her population entitles her to get and this can only be done by increasing the total membership of the house. Ontario has the right to retain her 82 members but the other provinces have also the right to an increased membership.
According to the census of 1931, Ontario has a population of 3,431,683 which if divided by 82 gives a result of 41,849; the population of the dominion is 10,374,196 from which we should deduct the population of Prince Edward Island, the Yukon and the North West Territories, which are assigned 5 members irrespective of population numbers 100,720 and therefore the net population of the other provinces, amount to 10,273,476, which divided by 41,849 would give 245 members for these provinces, and to that number should be added 2 members to provide for subsection 3 of section 51 which allow an extra member to a province for a fractional part exceeding one-half of the unit of representation and this would bring the total membership to 252 members including the five members for Prince Edward Island and the Yukon. Therefore, in all fairness to five provinces of the dominion a bill should be passed by the house stating that:-
"According to section 52 of the confederation act, the number of members of the House of Representatives is thereby increased from 245 to 252-and, the next House of Commons shall be constituted as prescribed by the confederation act upon the basis of repre-

Redistribution-Mr. Barrette
sentation by population and shall consist of 252 members distributed as follows:
Ontario	 82
Quebec	 69
Prince Edward Island	 4
Nova Scotia	 12
New Brunswick	 10
Manitoba	 17
Saskatchewan	 22
Alberta	 18
British Columbia	 17
Yukon	 1
And for this purpose subsection (1) of section 51 is changed to read:	"Quebec shall have
the fixed number of 69 members," and subsection 2 of section 51, is amended by substituting-"Number sixty-(five by number sixty-nine."
Section 52 gives to the Parliament of Canada the right to amend section 51-as mentioned above, as otherwise, Parliament could not take advantage of Section 52, as the number of members is controlled by the population of the Dominion divided by the population of Quebec multiplied by 65-plus such additional numbers guaranteed to the provinces by suib-Tsection 4 of section 51, and a special act of the Imperial Parliament which guarantees to each province as many members as they have senators.
It is therefore, very clear that unless the Parliament of Canada can increase the representation of Quebec it cannot take advantage of section 52 and this would be an absurdity.
I must point out that section 52 gives to parliament the right to increase the miemiber-shilp of the house but does not give it the right to reduce such membership. This reduction can only come in the natural operation of section 51 by an excess increase in the population of Quebec over the population of the other provinces. And this is an additional proof that the legislators intend to fix the representation of Quebec at 65 as a minimum and not as a maximum, as stated by Sir Hector Langevin.
What objections can there be to give to Quebec and five other provinces the increased membership they are entitled to receive? Economy? The indemnity of the 9 new members will total $28,000 less 10% or $25,800. By decreasing the indemnity of each member by 12i% instead of 10%, you will offset this increase in our expenditures and even if the full amount of $28,000 had to be provided for, the principle involved is worth much more as the advantages given to Ontario now represent the disfranchising of 212,485 of Quebec citizens, figure which is obtained by multiply-53719-117J
ing by 65 the difference of the unit of representation between Ontario and Quebec; each member represents 54,219 citizens in Quebec and only 41,850 in Ontario a difference of 3,269 by county. Also, you must keep in mind that at the time of confederation the unit of representation was 17,101 and it is, now 44,219, or more than 2i times greater. This unit should be stabilized around 40,000 and this can only be done by increasing the membership of the House.
If it does not take this logical and just action, the government will be facing a worse situation at the next census. During the next decade, indications show that Quebec and the West will continue to increase at a greater rate than Ontario. If the same rate prevailed, Ontario who has retained 1 seat more than she was entitled in 1921, and 4 seats more in 1931 would be entitled in 1941 to 8 seats less which she may keep on account of subsection 4 of section 51: in 1951, she will again keep 12 seats more than she is entitled, in 1961, 15 seats more and 1971, 19 seats more with the result that in 1971, with a population less than Quebec, Ontario would still retain its 82 members, against the 65 members of Quebec. Do you think that Quebec and the other provinces would tolerate this?
I fail to see how Ontario could be allowed to retain the representation it now enjoys without increasing proportionately the representation of the other provinces. The confederation act does not only permit but implicitly compels the house in this case to increase the membership of the house by using section 52 of the act. The rights of five provinces are involved and surely these five provinces should vote unanimously in favour of my resolution which is a recogniza-tion of their rights. A vote against it by any member of the province affected can only mean that this particular member would deliberately refuse to accept an increased membership for his province, because it would benefit Quebec too much. But this cannot be the spirit of justice which animated the present parliament and I expect that every member of this house will vote for my resolution as soon as he will stop to think and recognize its justification.
This resolution is of the utmost importance to the Province of Quebec, which would entitle it to four more members; British Columbia, so well represented by the hon. Minister of Trade and Commerce (Mr. Stevens), would be entitled to three more seats; Alberta to two, and Saskatchewan to one.
I do not see why, those who have an interest in setting forth the claims of their
[Stage Direction]
Redistribution-Mr. Barrette
respective provinces should not take advantage of the present resolution. In my own province it may be contended that it is simply a question of delivering a speech in the House and being placed in the limelight, however, I state the province of Quebec, under the circumstances, is entitled to have four more members, comparatively to the population of Ontario; this is what I am claiming at present in the house and I trust that my voice will be re-echoed, especially on this side of the house. I see by my side the honourable member for Dorchester (Mr. Gagnon), the honourable member for Montmagny (Mr. LaVergne) as well as the honourable member for St. Ann (Mr. Sullivan) all of whom, I am certain, will claim what is due to the province of Quebec. I am also aware that a number of my colleagues on your left, sir, will equally do their duty and claim for our province a just share of representation. I feel confident that the government will agree that the claim which I have just presented is just and will be favourably considered.
Henry Herbert Stevens: I have not been able to
follow the hon. member for Berthier (Mr. Barrette) in his argument, but I think I understand fairly well the chief points of the case he has presented. The hon. member suggests that because of the application of, shall I say the rules of the game, as set forth in the British North America Act, it so happens, that the unit of population of Quebec at the present time exceeds the number which is found by dividing the number of members for Ontario into the population of that province, and that possibly there has been something in the nature of unfairness to the other provinces of Canada. The hon. member has been good enough to Indicate that in my own province of British Columbia, if his system of allocation of members throughout Canada were adopted, we would have three additional members instead of two. However, this situation is covered by the British North America Act.
The first point which I would like to draw to the attention of my hon. friend is that the resolution which he proposes, no matter what treatment it may receive, cannot in any way affect the matter as it is determined by the British North America Act. Let me direct the attention of the house and my hon. friend to the terms of his resolution. It will be noted that he asks for two things, his first proposal being that the parliament of Canada shall grant the provinces "just and equitable representation." I shall deal with this point in a moment when I refer to the

British North America Act. He then asks that this representation be based upon the unit of population of the province of Ontario.
When the fathers of confederation dealt with this very difficult and complex matter they hit upon a system which has I think been recognized throughout the British Empire, and probably throughout the world, as a. unique and admittedly fair method of ascertaining the representation within a dominion such as Canada. Furthermore, the fathers of confederation, and particularly Cartier, who as one of the members of the government at the time played an important part in formulating this particular scheme, were highly commended for the solution which they had arrived at. Through all the succeeding years this has been looked upon as one of the outstanding achievements of confederation. May I point out to my hon. friend that were it possible to adopt his resolution, which it is not; were we able to achieve the objective which he desires, namely, that the unit of representation should be based upon the population of Ontario provided by its present number of members, it would take away from his own province what has always been looked upon as one of its finest, shall I say, elements in its association with confederation-the fixture of its representation at sixty-five members.


An hon. MEMBER:: A safeguard.


Henry Herbert Stevens: 
Mr. MERCIER (Laurier):: In the case of the maritime provinces is the number of senators to which they are entitled not the basis on which the number of their members to this house is established?


Henry Herbert Stevens: No, my hon. friend is
referring to another point. What he refers to, I think, applies to Prince Edward Island, namely, that the number of members in the house shall in no case be less than the number of senators in the province.


Joseph-Alexandre Mercier: Does that
apply only to Prince Edward Island?


Henry Herbert Stevens: It applies to any province, but it is actually in force only in regard to Prince Edward Island, because all the other provinces, I think without exception, have at the present time a larger number of members than senators.


Charles A. Stewart: The numbers are pretty close in New Brunswick.


Henry Herbert Stevens: Yes, they are getting
close. But the point I wish to make is that rule No. 4 of section 51 of the British North America Act has completely anticinated the

Redistribution-Mr. Stevens
very point he has raised-that is the main argument he advances-and has specifically provided for it. Consequently it is not competent for us to change that.
The hon. gentleman then proceeds to section 52, and under it he makes the claim that it is competent for the house to increase the number of members. I shall read section 52 and then indicate wherein I differ from my hon. friend in the interpretation of it. Section 52 reads:
The number of members of the House of Commons may be from time to time increased by the parliament of Canada, provided the proportionate representation of the provinces prescribed by this act is not thereby disturbed.
Obviously, the meaning of that section is simply that should, for instance, Quebec stand dormant, without increase in its population -a condition which, heaven knows, is impossible, but still let us assume for the sake of argument it were so-and the rest of Canada were to increase rapidly in population, then the unit of population ascertained by the division of the population of Quebec by sixty-five, divided into the rest of Canada, would very probably call for a much larger number of members than at present sit in the house. While the hon. member was speaking, I made a brief computation which will illustrate this point. Let us assume for the sake of argument that in the next decennial period the population of Quebec did not change and the number of members being sixty-five, the unit of population would be, as at present, 44,219. But assume also that
3,000,000 were added to the rest of Canada: that would give an additional 240 members above the number for Quebec, or, in all, 305 members who would have seats in the house. I admit that with the division of provinces there would be fractions which would vary that, but I am taking it just as a general argument. In other words, if the population of Canada outside Quebec increased at a more rapid ratio than did Quebec, there would be an increase of membership in the house. So the fathers of confederation, realizing that that might occur, provided that the parliament of Canada, in the event of such a happening, should have the power to increase the number of members in the house, and of course this has been done from time to time. I believe at the last decennial census it worked out that the increase was from 241 to 245 members. I am speaking from memory.


Alfred Speakman: From 235 to 245.


Henry Herbert Stevens: 
Charles A. Stewart: I do not
rise to discuss the motion. I agree with the Minister of Trade and Commerce (Mr. Stevens), that the representation as provided in the British North America Act has so far worked out very satisfactorily for all the provinces. But my friend and colleague, the exMinister of Justice (Mr. Lapointe), expressed a desire to discuss this motion, and I would ask permission to adjourn the debate in order to give him an opportunity to speak to the motion later. I do not wish to cut off discussion now.


Mr. R. K. SMITH (Cumberland):: Mr. Speaker, I regret very much to occupy the time of the house and delay proceedings by a further discussion of this important matter, certain phases of which have been fully covered by the Minister of Trade and Commerce (Mr. Stevens). I am sorry also that my knowledge of the French language is not sufficient to have enabled me to follow the mover of the resolution (Mr. Barrette). After listening to the clear responses made by the minister, however, I believe I have a fair grasp of the pertinent portions of the mover's remarks. It would appear from what has transpired in the last few years that the farther we remove ourselves from the time of confederation, the farther we remove ourselves from the spirit and intentions of the fathers of confederation and get down to the strict and rigid interpretation of the British North America Act. I believe before I have concluded I shall have established to the satisfaction of hon. members the fact that at least in some measure that is so.
With the few minutes at my disposal I should like to give a brief history of the question of representation in this house as it affects the maritime provinces, and the inequalities with which we have had to contend for a great many years. Representation in this house is a burning question in the maritimes to-day on account of what would appear to be a further decrease in our representation in the near future, which we claim is already too greatly reduced.
A conference of the representatives of the provinces of Canada met in December, 1910, convened by the premiers of Ontario and Quebec, to consider the representation of the maritime provinces in the parliament of Canada. This question was discussed at considerable length, but no decision was reached.
A further conference was held in October, 1913, at Ottawa, to continue the study of the question of representation and other matters. A resolution was moved by the premiers of New Brunswick and Prince Edward Island:
That, in the opinion of this conference, the representation granted to the maritime provinces at the time they respectively entered confederation should be restored and rendered irreducible.
After considerable debate, this resolution was withdrawn and another substituted to the effect that an amendment to the British North America Act be sought providing an irreducible minimum in the representation of the maritime provinces of eighteen for Nova Scotia, thirteen for New Brunswick and six for Prince Edward Island. This also was withdrawn, and a resolution dealing with the problem of Prince Edward Island was introduced. Finally, the conference passed the following:
Resolved, that this conference expresses the opinion that, not representing the provinces for the purposes of this matter of representation, it declines to take any action in regard to it.
At this conference two memoranda were presented, one by the premiers of Nova Scotia, New Brunswick and Prince Edward Island, and the other on behalf of Prince Edward Island, urging its special claim. At that time, 1913, as a result of the census of 1911, Nova Scotia's representation had been reduced from eighteen to sixteen, New Brunswick's from thirteen to eleven, and Prince Edward Island's from four to three. The representation of the western provinces had increased according to their population.
One result of the conference was an amendment to the British North America Act, 5-6 George Y, chapter 45, providing that " notwithstanding anything in the said act, a province Shall always be entitled to a number of members in the House of Commons not less than the number of senators representing such province." This enabled Prince Edward Island to retain a fourth member.
For a moment or two I should like to speak concerning what we claim is the loss of a federal member from the province of Nova Scotia, despite the present method of establishing the unit of representation for each of the provinces of Canada.
The population of Nova Scotia increased from 1911 to 1921 by 31,499, Quebec's population increased at a relatively larger rate, so that the unit of representation after the 1921 census became 36,283. Nova Scotia's representation in the House of Commons was therefore reduced from 16 to 14. The population contained 33,965 more than was necessary to give fourteen representatives, but because we had fallen 2,318 below the fractional part, not exceeding one-half of the whole number required to entitle the province to a member, our population to that
Redistribution-Mr. Smith

extent was disregarded, and we suffered the loss of one member. Nova Scotia could not
*'ain its members, as Ontario did, under subsection 4 of section 51 of the British North America Act, whereby no reduction can be made unless the proportion which the population of the province bears to the total population of the dominion be diminished by one-twentieth part or upwards.
It may be difficult to overcome an effect such as this, but it is a fact that there are 33,965 persons in Nova Scotia unrepresented in the House of Commons while there are in Canada, outside of the maritime provinces ninety-six electoral districts returning members with less than that population within their bounds. The membership for Nova Scotia cannot be reduced below ten, the number of our senators. But if by the increase of population in Quebec our representation were lowered to this minimum, it would mean a total reduction since confederation of nine. This is a condition which is being rapidly approached. Had the unit of representation, instead of being 36,283 been 36,125, a difference of 158, Nova Scotia would have been saved another representative, and instead of having fourteen members in the House of Commons would have had fifteen; that is, if the population of Quebec had been less by 10,287 persons the unit would have been so reduced.
By the British North America Act, section 51, subsection 2-
There shall be assigned to each of the other provinces such a number of members as will bear the same proportion to the number of its population (ascertained at such census) as the number sixty-five bears to the number of the population of Quebec (so ascertained).
Quebec is defined by this act, section 6 as follows:
The part of the province of Canada (as it exists at the passing of this act) which formerly constituted respectively the provinces of upper Canada and lower Canada, shall be deemed to be severed, and shall form two separate provinces. The parts which formerly constituted the province of upper Canada shall constitute the province of Ontario: and the part which formerly constituted the province of lower Canada shall constitute the province of Quebec.
That is, the population to be taken is the population of the territory known as Quebec at the passing of the British North America Act. But the population of Quebec which has been taken as the basis for the unit of representation since 1900 is the population of that province as originally constituted, plus the population of the extensions made by chapter 3 of the acts of 1898. It is now possible, from information at hand to ascertain just what population was counted in these added 
territorities, for they contain all of Abitibi, the district of Labrador, and what is known as part of east Maine, all that territory north of the height of land, part of it being traversed by the National Transcontinental Railway. In extending the boundaries further in 1912 the territory then given to Quebec was excluded in considering the population forming the unit of representation but the population added by the Act of 1898 is included. A statement from the dominion statistician shows that there were 13,644 people in this area. These should not have been counted in determining the unit of representation. Excluding them, the unit becomes not 36,283 as used, but 36,073. This figure divided into the population of Nova Scotia, 1921, gives 14 and a fractional part, exceeding one-half of the whole united number by 778 and entitling this province to another federal member. The representation in the House of Commons from Nova Scotia, as fixed by the Redistribution Act, 1924, should therefore have been fifteen members. The province was under-represented in the last parliament by one member and will be in the next unless immediate steps are taken to correct this error.
Now let me refer you to some remarks of the fathers of confederation. I begin with a statement by Sir John A. Macdonald in the parliamentary debate on confederation in 1865:
By adopting the representation of Lower Canada as a fixed standard-as the pivot on which the whole would turn-that province being the best suited for the purpose, on account of the comparatively permanent character of its population, and from its having neither the largest nor the least number of inhabitants.
But instead of the population of Quebec being "comparatively permanent" in its Character it has shown a relatively large increase and is overflowing into territory which did not form part of its original area. Taking the original provinces into consideration, Nova Scotia has increased in fifty years 35.8 per cent, New Brunswick, 35.2 per cent, Quebec, 98.17 per cent, and Ontario, 80.99 per cent. Quebec, therefore, has shown the largest relative percentage of increases of the four original provinces and is the least stable in character instead of being comparatively permanent.
Gray, in his account of the conference at Quebec, states:
Thus at the first inception on entering into the union, population was not intended to be held as the only rule for representation. Though taken as a guide, the apportionment must be more or less arbitrary. Existing arrangements. territorial and other considerations must be taken into account, and modifications to suit

Redistribution-Mr. Smith
circumstances necessarily made; but after entering the union, future changes of the entire representation were to be governed by that principle. .	. The conference, therefore, while
taking population as the basis, and laying down that strictly as the rule, acted upon the principle that in the first instance territorial area and local circumstances must also be considered.
The memorial which was presented at the interprovincial conference in 1913 on behalf of the three maritime provinces forms substantially their claims to-day. The memorial reads:
The question of the legal right of New Brunswick and Prince Edward Island to retain their original representation was referred to the Supreme Court of Canada in 1903, and was decided against these provinces. On appeal to the privy council the answer of the supreme court to the question submitted was held to be correct.
We must bow to this decision so far as the strict interpretation of the written contract is concerned, but this was not the expectation and belief of the delegates at the time of the negotiations of the terms of union, for the Honourable George Brown, in moving the resolution fixing the number of representatives which each colony should have in the house, stated: "The practical result will be that while Lower Canada certainly will not be less and the lower provinces may increase in population, they cannot decrease in the number of representatives. It keeps the bouse within a reasonable limit."
And in a speech delivered at Sherbrooke in 1864, shortly after the Quebec conference, Hon. A. T. Galt had said:
We have supposed that the population of Lower Canada, being tolerably equable in its character, would afford the best basis. But having respect to the rapid increase of Upper Canada, we think the lower provinces should not be reduced if they do not increase in the same ratio. Therefore, the lower provinces would have the same as they have now unless in the very improbable case of any one falling off by five per cent or more-that is, a decrease relatively to the whole federation.
Representation by papulation, while accepted as a guiding principle in fixing the representation of each province, in the dominion parliament, was intended to be made subservient to the right of each colony to adequate representation in view of its surrender of a large measure of self-government. In consideration of surrendering its independent colonial status, each colony was entitled to such a representation in the federal parliament as would be sufficient to guard that right.
A self-governing colony wras something more than the number of its habitants.
The principle that population was not the sole consideration in fixing representation was recognized in the cases of Manitoba, British Columbia and Prince Edward Island when these provinces respectively entered the union.
Manitoba, with a population less than one unit of representation, was given four, with a provision that after the census of 1881 its representation should be "readjusted" under the terms of the British North America Act.
The census of 1881 showed a population of sixty-two thousand two hundred and sixty,
which would have entitled it to three members, but it was "readjusted" up to five.
British Columbia with a white population of less than ten thousand and a total population not exceeding forty thousand when it entered Confederation, in 1871, was given six members as an irreducible minimum. In 1881 it had but two units of representation and in 1891 four units.
Prince Edward Island obtained six members upon entering confederation with but five units of population, passed the census of 1881 in the same condition, but, not being safeguarded as was British Columbia, was reduced to a representation of five after the census of 1891.
It may be said that in each of these cases there was an expectation of such increase as would in time bring all the provinces upon the basis of representation allowed upon entering confederation. Admitting such to be the case, it goes to show that the splendid optimists who made confederation thought only of readjustment upwards and not downwards.
When the maritime provinces entered confederation it was impossible for them to have foreseen the extent and effect of the development of western Canada. They never imagined that in the days to come the growth of the west would strip them of their influence in the councils of the nation. Though the times were not over prosperous, they contributed their share to the cost of purchasing the lands from the Hudson Bay Company and equipping them for 'settlement; bore their part of the cost of Canada to the Canadian Pacific Railway and all the other vast expenditures that went to link together the far-flung provinces of Canada and to convert the wilderness into thriving communities out of which have developed the splendid prairie provinces of to-day. But most of all, they gave their sons and daughters to the ivest. From Manitoba to the Pacific coast the maritime provinces people form an important element of the population who have played no small part in the development of these new lands.	. .
All these contributions the maritime provinces have cheerfully made in the interests of Canadian unity and progress: but they feel it a cruel exaction of the strict letter of the bond which will impose a lasting penalty upon them for the sacrifices they have made in such a cause.
I appeal to this house, Mr. Speaker for unity and justice in this matter. This resolution may not be the appropriate time to express our views on this question, but as it would appear that this may be the last opportunity to present our case before the redistribution bill is brought into the house and passed I appeal to this parliament for a spirit of unity and fair play with respect to the representation of the maritime provinces in this house which has suffered so badly. I feel that we have every just right to put forward this claim, which I have humbly endeavoured to do in the interest of the province from which I come.


Hon. P. J. A. CARDIN (Richelieu):: I think it is becoming apparent that the existing representation of the province of Quebec in
Redistribution-Mr. Cardin

the House of Commons is not adequate, and that a change might be sought in the near future. I do not contend that the resolution which is undetr consideration is the proper mode of attaining that purpose. I admit quite frankly and without hesitation thait the argument of the Minister of Trade and Commerce appears to me to be perfectly correct and in accordance with the true interpretation of the statute. I do not think that the mover of the resolution (Mr. Barrette) had in mind changing the system of determining representation in the House of Commons; he only wanted to make an adjustment for the present owing to the inadequacy in practice of the British North America Act.
It is said that the representation has been settled as it now is with a view to providing a safeguard for the province of Quebec. It has turned out, however, that this safeguard has worked against the province of Quebec. The law has not fulfilled the expectations of the fathers of confederation, because at the present time the province of Quebec finds itself in an unfavourable position when that law is carried into practice. This is not the fault of an3rone in this house; it is the fault of the fathers of confederation, who made the mistake in making their estimation of what would be the result of their legislation and what the growth of population in the different provinces might be. One can readily understand that it is not fair that a member should represent a constituency in the province of Quebec on the basis of a population of 44,000 while a member representing a constituency in the province of Ontario does so on the basis of 41,000. As I have said, however, the remedy is not to be found in the resolution which has been presented to the house by the hon. member for Berthier-Maskinonge (Mr. Barrette). As has been said, when the redistribution bill was presented to the house, an amendment to the British North America Act would be required to achieve the aim of the hon. member, and I think the whole speech of the hon. member for Berthier-Maskinonge was based on a wrong interpretation of the British North America Act and of the resolutions passed in 1864 or 1865, as interpreted by Sir Hector Langevin. The true position was placed before the members at the time by Sir Henry Joly, and the argument made by him was perfectly correct and in accordance with the true interpretation of the resolutions and of the different sections of the British North America Act. When Sir Hector Langevin undertook to reply to Sir Henry Joly and to try to dispel the fears he had expressed, Sir Hector
FMr. Cardin.]
Langevin was entirely wrong, and the text of the law would not justify the interpretation which he gave the resolutions at that time. Sir Hector Langevin had based his whole argument, in his reply to Sir Henry Joly, on section 52, which empowers parliament to increase the number of representatives of the different provinces; but the mistake he made was this, that section 52 could not be interpreted as a contradiction of section 51. Section 51, subsection 1, provided that Quebec should have a fixed number of 65 members. A fixed number of 65 members means that the number cannot be increased or decreased, and section 52 cannot be interpreted as meaning that the representation of the province of Quebec can be increased when section 51 declares that it cannot be increased and that the number of 65 members is fixed. The whole argument of the hon. member for Berthier-Maskinonge is based on the observations made at the time by Sir Hector Langevin, whose argument was based upon an error and a wrong interpretation, a supposed contradiction between section 52 and subseotion 1 of section 51. That is the whole question.
Apart from the question of law, I think it is well that all members of the house should keep in mind and give their best attention to the possibility of going into the matter on another occasion, with a view to providing for a change in the British North America Act, because, according to the calculation placed beifore the house, before very long there will arise a situation which will be unjust to the province of Quebec. I think it is the duty of all hon. members of this house, who are desirous of preserving that harmony that has always existed in the relationships of the citizens of the various provinces of Canada, to study this question seriously, and when the next opportunity presents itself to find a better and more equitable basis for representation of the province of Quebec in the House of Commons.
On motion of Mr. Stewart (Edmonton) the debate was adjourned.



PRODUCTION AND DISTRIBUTION


Mr. ROBERT McKENZIE (Assiniboia) moved:: Thait, in the opinion of this house, an immediate inquiry should be made under the provisions of The Research Council Act, chapter 177, R.S.C., 1927, or by other means, into the

Production-Mr. McKenzie
causes underlying the wide spread between the prices of raw products and the prices of goods manufactured from such products.
He said: In presenting to the house the resolution which you have just read, Mr. Speaker, I do so because I am firmly convinced that in many instances an injustice is being perpetrated upon our people, which has the effect of bringing the present depression to bear more heavily than it need bear, particularly upon the farmers and the labouring classes. In the second place, I find that there is throughout the country a demand that the government provide means for the most effective relief possible by enabling the people to buy their necessities as Cheaply as they can, discarding all handicaps that have a tendency to make living expenses higher than they ought to be. In many instances our farmers and labouring classes particularly find the cost of living bearing more heavily upon them than it has ever done previously. This is due largely to the disastrous fall in prices in the last few years of those commodities which the primary producers have to sell in the markets of the world, and also the fact that there is not a similar decline in the prices of manufactured products.
I go to a relief officer in any part of the country and ask him about relief matters, and at once I am told that one of our greatest needs in relief work is clothing; and I ask myself why it is that clothing is so badly needed when all our products are at sudh low prices. The only answer I can make is that the price of clothing of all kinds is too dear when compared with the purchasing power of the individual. This fact is the reason for this resolution.
Some months ago I sent a letter to the weekly and daily press throughout Canada, almost from one end to the other, in which I drew attention to the wide spread between the price received by the farmer for his raw wool and the price he had to pay for underwear. I dealt with just that one article, but I received letters from people all over the country. At that time wool was selling at from four to four and one-half cents per pound and people were having to pay from $2 to $4 per pound for the same wool manufactured into underwear. From the many letters which I received I learned that there were many people like myself who were wondering why there was such a wide spread between the price received for raw wool and the price paid for the finished product. Many people had arrived at the same conclusion as myself, that someone was making a high profit. One man evidently had settled in his
own mind the reason for this wide spread; he seemed to have a solution, nevertheless it was hard for me to understand why four cent wool should become two, three and four dollar wool when manufactured into underwear. I have most of these letters before me and I shall give a few extracts to show the feelings of different people throughout the country in connection with this very matter.
One man wrote that he had purchased a pair of trousers for $10 the weight of which was two pounds. He said they were simply trash in comparison with trousers he had bought in Scotland for fifteen and sixteen shillings. I wonder why the imperial conference did not do something to enable the clothing manufacturers in the old land, who could produce at less than half the cost of the manufacturers in Canada, to send their goods into this country.
Another man wrote that his sheep were of the Rambouillet breed which produces a very fine grade of clothing wool. He received six cents per pound for this wool, a premium of one or two cents over the market price. He went out and bought three ounces of fine yam at twenty cents per ounce; in other words, he exchanged ten pounds of wool for three ounces of yarn. That would seem to explode the argument that high wages is the reason for this spread, because we know that wages make up only a small part of the cost of converting raw wool into yarn.
Another man wrote and said that four years ago he had bought one hundred per cent woollen underwear for $3.50 per suit; at that time he had sold his wool for twenty-five cents per pound, but this year while he had to pay the same price for his underwear he could get only four and one-eighth cents per pound for his wool.


Mr. SHAVER:: Does the 'hon. member
think that that is a true statement, that underwear is selling to-day at the same price as it sold for three years ago?


Robert McKenzie: These
letters were written ten months ago, and at that time the writer said woollen underwear cost the same as it did three years ago.


Frank Thomas Shaver: Does the hon. gentleman
think that that is a correct statement?


Robert McKenzie: The hon.
member will have a chance to explain, if he wishes. He is not from western Canada, and this letter was received from a resident in that part of the country. '
Production-Mr. McKenzie

Another man sent me a purchase slip covering two suits of underwear at $2.95 per suit, their weight being thirteen ounces. This would show t/hat the wool in the manufactured state was selling at over $3 per pound.
All this was a year ago; but let us see what the conditions are to-day. I say to my hon. friend that they are very much worse to-day than they were a year ago. A farmer in my own part of the province of Saskatchewan sent 600 pounds of wool to Winnipeg through the cooperative organization and at the same time ordered some blankets, the cost of which was to be charged against his wool. To his surprise he received word that bis wool was too dark in colour and that owing to the deplorable state of the market no advance could be made on his shipment either in cash or in credit. That is the condition which exists today. When I received these letters raw wool was selling at four or five cents per pound, but to-day some of our farmers are receiving only two and two and a half cents per pound. The relief officers still report that the greatest need of the people to-day is clothing, and the price of this manufactured product is very little below what it was three or four years ago when the farmers were receiving twenty-five cents per pound for their wool.
I am frequently asked whether conditions in western Canada are better to-day than they were last year. Last year if you spoke to almost any farmer in western Canada about the conditions which prevailed he replied that things would not be too bad, even with the low prices, provided he could get a good crop; he felt that he would be able to pull through. Taken on the whole, the crop in western Canada was quite good; in some parts of my province it ran forty to forty-five bushels per acre in wheat, but because of the prices he received for his crop the farmer is even poorer to-day as far as money is concerned than he was a year ago. It is true that there is plenty of food for everybody, but money is out of the question.
Last year our people were hoping that the imperial conference would surely do something to relieve conditions, that it would permit the good quality clothing which is produced at lower prices in the old country to come into Canada, the type of clothing so badly needed by the people of this country. This conference, to say the least, has gone into the limbo of forgotten things, with no benefits so far to our farmers. Even the preference on wheat and the bacon quota have been of no value whatever to them.
In the replies which I received to the letters which I sent to the press, I was quite frequently

asked: Why do you mention wool? A man from British Columbia would say: Conditions are just as bad with regard to our fruit, our fisheries, and people in other parts of the country would mention other products in regard to which they said the situation was just as bad as that of wool. My reason for mentioning wool was that in Saskatchewan, the province from which I come, during the hard winters which we have there, people require woollen clothing and they find it almost impossible to buy it at the prices which prevail. That is why I said that wool was too cheap, while on the other hand woollen clothing was too dear.
Let me put the situation in this way. In western Canada to-day we have farmers who do not shear their sheep because it does not pay them to do so, especially if they have to hire a man to shear them; the wool will not pay for the cost of shearing. On the other hand, those farmers and their families are not able to buy woollen clothing because it is too dear. Under such conditions I say to the government that something must foe done. Surely they will not permit such a situation to continue without endeavouring to do something towards relieving it.
My resolution, however, does not deal with wool alone; it deals with products in general, and I have no douibt some adjustment is just as urgent in many other lines. In fact, I have with me newspaper clippings indicating that many other people are as firmly convinced as I am that there is a need for adjustment in many other lines. I have under my hand a clipping which I took from the Farmer's Sun of December 8 last, which says:
Farm price declines fail to aid consumer.
Burden of debt doubled, but, while producer gets less, distributors maintain same spread.
AH interests not bearing same burden.
Then the article goes on to show the spread between the price of wheat and the price of flour and bread. It deals also with something which is quite noticeable in the cities, and that is the difference between the price the farmer receives for his cattle and the prices people have to pay in city shops for their meat. It also mentions the high price of milk, retail, in comparison with what 'the farmer receives. Then it deals with another subject which was dealt with in a resolution introduced earlier to-day and which the government is evidently going to send to the banking and commerce committee. I refer to the question of the burden of debt. It says:
Farm prices have been cut in half.

That is hardly a correct statement, because they have been cut in three and in some oases even four.
Debts mortgages, interest rates, remain the same.
I believe the time has come when something must be done with regard to the question of debt and interest.
I have under my hand a clipping, a letter sent to the Winnipeg Free Press and signed by John Farmer of Sennett, Saskatohewan. I want to read a portion of it because it deals directly with the resolution which I am presenting. It appears in the issue of December 3, 1932. It is headed:
800 pounds of wheat for eight ounces of tin.
This gentleman says:
Since the imperial conference I have had occasion to order extra parts for a cream separator, which I have been using for the past 16 years. The parts required were a tin float, a tin cup, in which the float works, and three small rubber rings.
Not knowing the price of these articles I enclosed one dollar with my order, deeming it sufficient to pay for both extras and postage.
The articles ordered from a house in Winnipeg came by parcel post with a c.o.d. charge against them for $2.91. This amount, plus the dollar that I had sent with my letter, covered the cost of the goods and the postage and money order fee.
The total cost to me was almost four dollars. The two articles of tin, together, weighed exactly 8 ounces.
I understand that tin is a product of our own country, and taking this into consideration along with the current prices of the commodities that I had to sell in order to raise the money to pay for repairs for my cream separator, the following rather startling facts were revealed. At 30 cents a bushel, I would have to exchange 800 pounds of wheat for 8 ounces of tin; or 1,600 pounds of barley at 12 cents a bushel; or 1,700 pounds of oats at 8 cents a bushel; or 40 dozen of eggs at 10 cents a dozen; or 331 pounds of butter at 12 cents a pound. The labour and expense incidental to producing these commodities would, I think, more than offset the labour and expense of manufacturing a float and a cup out of 8 ounces of tin.
The prices quoted above were current at the time of ordering the separator parts, which was in the early part of October, 1932.
Examples of this kind should, I think, be brought forcefully to the attention of our government. Do they realize the weight of the unjust burden placed on the farmers while they are protecting the manufacturer?
Then the letter goes on to deal with the matter of protection about which I may have a little to Bay Later on.
Many anomalous conditions exist throughout the country. For instance, we have oats selling in Saskatchewan at seven cents a bushel and even lea?, but oatmeal is selling at five cents a pound. A naan would have to
Production-Mr. McKenzie
sell about thirty cow hides at present prices to buy one pair of cowhide boots. Wool is selling at about two cents a pound while underwear is in the neighbourhood of $3 a pound. Just consider the fact that a man would have to care for, house, feed and shelter the year round and shear, if he thought it was necessary, thirty sheep in order to get enough money from the wool to buy one suit of underwear. Surely that is a condition which ought not to be permitted to exist. A year ago I brought to the attention of the house another anomalous condition with regard to a man in western Canada who took a calf skin into a store where they gave him fifty cents for it. He bought a pair of shoelaces which cost him twenty cents, and a clerk in the store figured out that if he were to buy back that whole calf skin in the form of shoelaces, it would cost him something over S70. Surely that is a condition about which it should be possible to do something.
IV heat at present is selling retail at country elevators in western Canada at thirty cents a bushel, while puffed wheat is worth more than $30 a bushel. Surely something can be done in regard to such a situation. I believe the government are aware that something should be done in connection with this matter. I was pleased last year with the remarks of the Minister of Agriculture (Mi. Weir) when he spoke regarding agricultural conditions and the proposed appointment of a marketing board. His words appear at page 3400 of Hansard for 1932:
I assure hon. gentlemen that we have given more attention and thought to this question than to any other,-
Referring to the marketing board.
-and in this connection I have received excellent cooperation from hon. members irrespective of party. Because of the reasons I have stated it has been thought best to appoint a commission to study the whole problem of marketing, and the government intends to appoint such commission to study this question, especially in connection with export marketing. It will study the problem of supply and demand and perhaps more particularly the spread in the processing of the major farm products.
I regret the board has not been appointed, and particularly that no action has been taken concerning the last part of the minister's words I have just quoted. I have never been very much in favour of the marketing board, except in so far as it would have power to investigate these processing spreads. I want to emphasize again that something must be done; western Canada has practically reached the breaking point. People cannot go on this way very much longer. If in time of war it was necessary to create
Production-Mr. McKenzie

statutes preventing undue profits; why not do it now? I believe it is more necessary to-day than it was during war times.
I may be asked for my suggestion. I do not believe it necessary to make any. The resolution standing in my name states specifically that the matters to which I have referred should be placed in the hands of the body appointed for that particular purpose, namely for the purpose of investigating conditions such as these. The investigations could therefore be made without cost to the government. The research council has the power to make investigations and to summon any persons they may wish to give evidence before them. I know there are people who are satisfied that if we had proper tariff legislation-and I must confess I am one of them -conditions would be greatly improved. A reduction in tariffs would help to relieve matters. Others say we cannot have a proper adjustment unless there is greater control of currency. That is a factor which may be of importance. Then there are those who say that reduced tariffs and control of currency would be of no use unless an attempt were made to control the monopolies, combines and cartels which control industries to such an extent throughout the world. I do not know just to what extent industry is controlled by monopolies, but I am told that a large percentage of industries are to some extent under the control of monopolies or combines. Then there are others who say that the trouble lies in ineffective distribution and transportation, and that until these difficulties are corrected we cannot expect any relief. I would say that something must be done concerning the spread in prices, even though the government may find it necessary to take over industries, as some of our friends in the corner suggest. If it is necessary, let them do it. I am firmly convinced, however, that undue profits in all lines of industry must be curtailed, and that industrialists must not be allowed to charge more than reasonable profits.


Mr. GOTT:: Does the hon. gentleman
suggest that these conditions have existed only since the present government came into power?


Robert McKenzie: Yes, certainly.


Eccles James Gott: They existed throughout the
former regime.


Mr. HARRY BUTCHER (Last Mountain):: 
Edward James Young: There is an expression that I have used in this house on former occasions, taken from Bastiat, and I want to repeat it because it should be graven on the mind of every man in this house. It is this:
Study all economic questions from the consumers standpoint, for the consumers' interests are the interests of the human race.
Every improvement in the methods of production or distribution of goods should result in lower prices to the consumer. If it does so result it benefits the whole human race the consumer, which includes everybody, because he has more goods available for consumption; the producer, because he has more employment in producing that greater quantity of goods.
Let me give you an example. Take the printing industry. Prior to the invention of printing, the transcribing of the written word was a slow and laborious process, and not
Production-Mr. Young

many men were employed in it. Their work was physically painful; their wages were small, and very little reading matter was produced and made available to the people. Then someone invented printing. What was the result? Printed matter became so cheap, that the advantage of the new invention passed on to the consumer in the form of cheaper printed matter resulted in an ever greater and greater demand for the printed word. Instead of a few hundred men being employed in transcribing the written word thousands nay, millions of men were employed, and the wages they received were infinitely greater than the wages of the old-fashioned hand writers. People throughout the world were enlightened, received the benefits of knowledge, which can be traced directly to the invention of printing and the passing on to the consumer of the benefits of the invention. The men who profited by the process, although they made not nearly so much profi'; per written sheet, found their aggregate profits enormously greater than they otherwise would have been. Suppose those in charge of that industry had said: "We will not pass on this advantage to the consumer, we will appropriate to ourselves all the advantage of the new invention, charge as much as we ever did for the written page, and put the profit in our pockets,"-what would have been the result? No increased demand for printing, no increased number of people employed in the industry-a larger profit on each individual sheet to be sure, but the aggregate profits would not have been as a drop in the well compared with what they are to-day.
Take another example, the invention of the loom. Before the time of that invention cloth was made by a slow and laborious process requiring a great amount of human labour to produce it, so much, indeed, that people could not afford many clothes, and what they had were of the coarsest. Someone invented the loom. Those engaged in the industry, seeing this new machine coming and throwing them out of employment said, "This machine is going to take away our livelihood", and they proceeded to wreck the machines and had to be restrained by law. What happened? They soon discovered that the invention of this new process was cheapening the production of doth so that now everyone was buying cloth; the demand increased so enormously that more men than ever were employed in the industry. The benefit was passed on to the consumer. All humanity profited by the advantage of having cheaper clothing. Those engaged in the industry profited because they

had more work and better wages, and those who owned the industry found that their profits were greater in the aggregate, though they might be less on each piece of cloth. This, then, we can take as the rule: that wherever the advantage of an improvement in method or process of production or distribution is passed on to the consumer in the form of lower prices, all humanity benefits; but whenever an attempt is made to retain that advantage to one person or group of persons, whether capital or labour, whoever they may be, the result is less employment for the human race and nothing added to the aggregate wealth of the world.
Improvement should always result in lower prices. When an improvement in any process or the invention of a new machine does not result in lower prices, then one of two things is true: either that machine is not truly a labour-saving device, or somebody is taking too heavy a toll and profiteering by it. It is quite conceivable that a new machine or a new process of producing a certain article might be invented, and that the labour cost required to produce that machine might be greater than the labour saved by the use of it. But that does not often happen. Generally there is a real saving in labour, and unless it is passed on to the consumer in the form of lower prices, the result is less wealth for the human race, less employment, smaller profits for those interested in the industry, and more misery in the world.
To-day the tendency throughout the world is to keep prices up. Whenever any institution or industry installs new machinery or improves its processes, the last thing they think of is passing the benefit on to the consumer; they want to retain it to themselves; and in order to conceal their profits, as my hon. friend from Last Mountain has said, they call in the high financier. They water their stock and expect the industry to pay profits on that water. As a friend of mine once put it, the greatest need of Canada today is some means of protecting her good business men from her big business men. The good business man improves his methods; the big business man sees the possibility, because of these improved methods, of increasing profits if he can get control of the industry- and he does so. He gets control and then proceeds to find ways and means of keeping prices up, retaining for himself and his associates the advantage of these inventions which should be passed on to the consumer.
In the days of our grandfathers a man could build a flour mill on the side of a stream and grind the people's wheat into

Production-Mr. Bothwell
flour. At that time we had a law which provided that no miller could take more than 20 per cent toll on the grain he ground. A farmer could take 187^ pounds of wheat to the mill and for that receive 100 pounds of flour, 50 pounds of bran and shorts, leaving 37| pounds with the miller as bis toll. And at that rate many millers laid the foundations of substantial fortunes. To-day I live within one hundred miles of one of the most modern mills in the country, and it takes 540 pounds of wheat to buy 100 pounds of their flour, and I get no bran or shorts. That is in one modern up to date mill. Not very far away in another direction a farmer has erected a small mill and he will grind wheat and deliver it in the same town at the rate of 100 pounds for 360 pounds of wheat. This would seem to indicate that the larger the mill the higher the prices they have to charge. I cannot believe that, with these immense mills with all modern machinery and with labour costs reduced to a minimum, it is necessary for them to charge such prices. If i.t is, then I say they are not economical, and I think it would be very interesting for the government to find out exactly why it is that with all these modem inventions and all these improvements in processes of production and in methods of distribution, we find ourselves paying ever higher and higher prices instead of lower prices. I do not think it would be a very expensive thing to get at the facts; it would be merely a matter of gathering of statistics to find out the cost of producing and distributing goods: What are your capital costs? What are your labour costs? What are your selling costs? What do you pay in rent? What do you pay for the lease of land, and so forth? These facts can be easily discovered. Let the information be gathered in the form of statistics and it is not a difficult matter then to interpret them. If we got such information I believe we should find that in many industries we are paying far more than is at all necessary for the products we buy.


Mr. C. E. BOTHWELL (Swift Current):: This resolution asks for an inquiry under the Research Council Act. There is ample power under that act to inquire into the subject under discussion. Under section 10(c) of the act the council is empowered to undertake in such a way as may be deemed advisable researches with the object of improving the technical processes and methods used in the industries of Canada, and of discovering processes and methods which may promote the expansion of existing or the development of new industries. And under section 10, sub-53719- 118
section (c), paragraph (vii) the council has power to carry out researches, the object of which is to improve conditions in agriculture.
Under both these sections I think there is ample power, and the illustrations given by those hon. members who have spoken before me, as well as the few illustrations I will give, will, I think, impress upon the government the necessity of having an inquiry.
A few days before leaving for Ottawa to attend this session, I saw a demonstration of General Motors in the city of Swift Current. They had three or four different makes of cars there, and one of the representatives of General Motors seemed to think that a Chevrolet car was the kind of car that the farmers in that district should buy. It would represent a price of around $900, a reduction of $400 odd as compared to what it was a few years ago. For that car, priced at $900, the farmer would have to pay 3,600 bushels of wheat, and when that car was selling for $1,300 or thereabouts, 3,600 bushels of wheat would have bought three of them.
In Montreal this past summer harness leather, but not made into harnesses, was worth 40 cents a pound, and at the same time cow skins were worth a cent a pound. Shoes were selling at from $7 to $10 a pair, while calf skins were selling at 10 cents apiece. The hon. member for Assiniboia spoke about wool and the cost of the articles manufactured therefrom. A few days ago there appeared in one of the western papers a letter from a gentleman in the province of Saskatchewan, telling his experience with wool. He was offered from two to three cents a pound for his wool, according to grade, colour and so on. They could not get it much lower than that-it varied from two to three cents. He accepted that price and shipped the wool to a woollen mill in Ontario to have it made into blankets. When he received the blankets he sold them in competition with the stores and realized eighteen cents per pound for his wool, after allowing for freight on the wool from Saskatchewan to Ontario and on the blankets from Ontario to Saskatchewan.
Last summer a farmer went into his home town to get a pair of shafts for his horse rake. He went to the Massey-Harris agency, where he was quoted $4.50. He thought it was too much and said he would go to the planing mill and get them made. The agent offered to order them from the mill for him, but he said he would do it himself. He went to the mill and had the shafts sawn into the right shape, and the completed article cost him $1. He had to drill a couple of holes

Production-Mr. Stevens

before he could use them, but I think this illustrates the great difference there is in the cost of manufacture of certain articles and the retail price. It might be interesting to note that the Massey-Harris agent told him that as they were selling very little new machinery, they had to charge more for the parts.
Another farmer in the same district bought a set of bob-sleighs for which he paid $55. Last winter he thought he would try to make up a set. He took his own timber out of the bush, had it sawn, and made up the sleighs. He bought some bolts and used the shoeing off some old sleighs. His actual outlay was $4.25, his time being put in for nothing. While it may not be just as good a set as he could have bought, they answered the farmer's purposes just about as well as the set for which he had paid $55. The shoeing, not being new, may wear out a little more quickly, but the sleighs are very serviceable. The same farmer needed some doubletrees, and upon pricing them found that they would cost $3. He had them made up at the local mill at a cost of eighty cents, and then used some paint which he happened _ to have around to finish off the article.
With mills and factories properly equipped to manufacture these things, there would seem to be too great a spread between what they charge and what it costs a man to have them made in a rather crude sort of way. These illustrations would1 seem to prove that there is too much difference between the cost of raw material and the price of the finished product. I support the resolution because I believe that valuable work can be done by the research council along these lines.


Henry Herbert Stevens: Mr. Speaker, there are a few things which I should like to say in regard to this matter, but as it is now almost eleven o'clock possibly it would be just as veil to call it that hour.
May I point out to the hon. member who moved the resolution (Mr. McKenzie) that it would be much better if instead of referring to the research council he referred to the bureau of statistics. The hon. member for Weybum (Mr. Young) spoke to the point when he said that much of this information is already available and needs only to be compiled. The hon. member for Swift Current (Mr. Bothwell) quoted a section of the Research Council Act, but that refers obviously to scientific research.


Charles Edward Bothwell: Also to agriculture.


Henry Herbert Stevens: :. That is scientific research into agriculture. For instance, the council

is carrying on inquiries with regard to honey, and so forth, but it is scientific research. The bureau of statistics is equipped with a Btaff of statisticians and economists who could handle a question of this kind much better.
There are some observations which I feel should be made in regard to this matter, and perhaps it would be as well to allow the resolution to go over for a few days. It will be up again, and I can assure all my hon. friends who have spoken that my observations on that occasion will be sympathetic and not in any sense antagonistic to the object they have in view.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Tuesday, February 7, 1933