1933-03-21

Mr. JEAN FRANCOIS POULIOT (Temis-couata):: Rising to a matter of privilege, Mr. Speaker, the Minister of Labour (Mr. Gordon) stated yesterday, as reported at page 3203 of Hansard:
If my recollection serves me correctly, and my hearing is right, the hon. member for Temiseouata directed his barrage against the province of Quebec.
The hearing of the hon. gentleman may be correct and his recollection may serve him correctly, but his understanding was very poor because I did not direct any barrage against my own province, which I love as much as my country and for which I am always fighting.



THE BUDGET


[Stage Direction]
Hon. EDGAR N. RHODES (Minister of Finance) moved:
That Mr. Speaker do now leave the chair for the house to go into committee of ways and means.
He said: Mr. Speaker, in moving that you do now leave the chair to enable the house

to resolve itself into committee of ways and means to enable supply to be granted to His Majesty for the fiscal year ending March 31, 1934, it is proposed to discuss the year's financial operations under the five headings followed in the last budget, namely:
1.	A short review of world economic conditions;
2.	Canada's trade and commerce and financial conditions in Canada;
3.	The financial operations and accounts of the dominion for the year ending March 31, 1933, and, as the fiscal year has not yet closed, the transactions still to take place have been estimated as closely as possible;
4.	The estimated revenue and expenditure for the year 1933-34;
5.	Ways and means to secure the revenue required to meet the estimated expenditure.
World Economic Conditions
When the budget was presented one year ago, a world financial storm of unprecedented severity was still in progress. It had started, you will recall, in Austria in the spring of 1931 and had passed from one country to another, crippling financial institutions and generally dislocating the machinery of finance and trade. Before the end of September, England had been forced off the gold standard and her example was soon followed by a score or more of other countries. With few exceptions, all countries felt it necessary to institute exchange controls or impose additional restrictions on trade, in order to protect the value of their currencies and to safeguard themselves against unfair competition arising out of depreciated exchanges.
As a result of these conditions, the international exchange of goods tended to become more and more restricted; the world level of prices, particularly the prices of primary products and the staple exports of debtor countries, became subject to intolerable pressure ; and the forces making for declining business activity and increasing unemployment were reinforced.
The United States was perhaps the last important country to feel the full force of the financial storm. During the winter of 193132, its banking system was subject to a double strain; foreign individuals and institutions with balances in the New York money market repatriated these balances or earmarked gold against them, while domestic depositors, distrustful of the solvency of their banking institutions, withdrew deposits. The inevitable result was the failure of thousands of small unit banks, heavy depreciation in the value of securities thrown upon the investment market, falling commodity prices and a

The Budget-Mr. Rhodes
vicious spiral of deflation. To counteract this movement, a program designed to create an expansion of credit was instituted, involving chiefly the formation of the Reconstruction Finance * Corporation, the liberalization of banking legislation and extensive open market purchases of government securities by the Federal Reserve banks. By midsummer the processes of disintegration appeared to have been effectively checked.
Up to this period, world commodity prices had been falling and business activity steadily shrinking. Even in England, departure from the gold standard had brought only temporary inflation and the level of wholesale prices had been declining since November. In June or July, however, prices turned upward in both England and the United States, and industrial production showed a similar upswing. In June, the Lausanne conference, somewhat to the surprise of the world, reached a provisional settlement of the reparations problem. While the European nations made their acceptance of the agreement conditional upon similar action being taken by the United States with respect to war debts, this conference had all the promise of marking a real beginning of international co-operation, through which the hopeless tangle of reparations, debts, tariffs, armaments and unstable currencies might be solved by international action. In July-August, the Ottawa conference, to the accomplishments of which further reference will be made a little later, succeeded in effecting a measurable relaxation of trade restrictions within the huge trading area of the British Empire, and pointed the way to similar action on a broader scale. These developments in the international sphere created an atmosphere favourable to business recovery.
During the summer also Great Britain carried through a highly successful conversion operation, reducing the rate of interest from 5 to 3i per cent on over two billion pounds of callable public debt. This was made possible by a condition of extraordinary ease in the money market, symbolized by successive reductions of the Bank of England rate from 6 to 2 per cent and by the sale of Treasury bills at the record low rate of f of one per cent. Somewhat similar conditions prevailed in other leading money markets of the world. In the security markets, prices rose rapidly, particularly for high-grade bonds. Low money rates are traditionally regarded as the chief prerequisite to and as the forerunner of business recovery. It was not unnatural therefore that confidence began to return. Indeed, the third quarter of 1932 was a period of noticeable improvement in world industry and in business sentiment.
53719-203£
But the improvement was not maintained, and since last October world trade, industrial production and. wholesale prices have once more tended downwards. In the renewal of the decline, the failure of the war debt negotiations has been an important, though not the sole, factor. During the last few weeks, there has been a recurrence of banking troubles in the great country to the south of us, and new clouds have appeared on the political horizon in Europe. On the significance of this banking crisis and these new political disturbances, it is not necessary for me to comment. But I do wish to warn against too gloomy an interpretation of current happenings. Events that may seem well-nigh disastrous in themselves may nevertheless be necessary to effect some of the radical changes in public attitudes and national policies which will make possible a fundamental and permanent solution of the difficulties which beset the world.
There are those who decry the possibility of an international solution and who insist that we should seek remedies at home for present conditions. I do not wish to minimize the difficulties and delays which are involved in any program based on international agreement, or to overlook the plain duty which rests upon every nation to keep its own house in order and to strive to the utmost by domestic action to accelerate the processes of business recovery. However, one cannot fail to observe that the present crisis is international, both in its causes and its effects, and that the remedy must be sought in international understanding and co-operation. Slowly, but nevertheless surely, the world is approaching full realization of the fact that the day of national self-sufficiency is past, that an international disease can only be cured by an international remedy.
Therefore, I look forward hopefully to the World Economic and Monetary conference which is expected to meet in London in the near future, and to which we propose to give our whole-hearted support. Members of this house have already had an opportunity of studying the agenda of that conference prepared by an able committee of experts. I am hopeful that on the basis of this agenda a program can be worked out for the relaxation of exchange controls and other excessive restrictions on international trade, for the stabilization of currencies, and for the stimulation of a rise in the world level of wholesale prices. The success of this conference assumes a prior or simultaneous settlement of the war debt question and some appeasement of political fears and rivalries as a result of progress in disarmament discussions
The Budget-Mr. Rhodes
[Stage Direction]
or otherwise. If these prerequisite conditions can be achieved, it should be possible to reach agreement upon a program which would be effective in restoring world confidence and initiating an early recovery of business activity. The world has this solution within its grasp and in my opinion there is no other short of prolonged and painful liquidation, if this indeed can be called a solution. Events are moving rapidly, driven by the urge of economic necessity. On this fact may rest the basis for a greater degree of optimism than has obtained in many months.
As foreign trade plays a dominant role in Canada's economy, it follows that the world conditions which have just been outlined, have inevitably been reflected in business conditions within this country. The course of industrial production and the physical volume of business in Canada has followed very closely that of the other leading countries. Fortunately, since the first of the year, there has been a moderate improvement in wheat prices and those who are usually well-informed are hopeful that this improvement will be sustained. I do not need to emphasize that if this rise in wheat prices can be sustained and carried farther, no other single
development could be of more importance in stimulating business recovery and reviving a spirit of confidence.
Trade of Canada
Reference has been made to the factors which have contributed to a further decline in world trade, including lower commodity prices, reduction in purchasing power of many of our principal markets due to unfavourable exchange conditions and the widespread application of import restrictions. It is a matter of satisfaction that relatively the position of Canada among the great trading nations has been so well maintained. In 1932, Canada again ranked fifth, after having been seventh in 1931. An examination of the statistics also reveals that the loss in dollar value of total trade in 1932 was proportionally not so great for Canada as for other important trading countries. The soundness of our financial policy, and the beneficial effect of trade agreements, particularly those concluded with empire countries, have contributed to this result.
The following is a statement of Canada's foreign trade for the first eleven months of this fiscal year, as compared with the same period in 1931-32:
Imports	
Exports-
Canadian produce Foreign produce. .
Total	
Trade of Canada (.000 omitted)
Eleven months ended Feb. 29-1932	Eleven months ended Feb. 28-1933	Decrease. $ 521,056	$373,421	$147,635. 536,595 . 9,952	437,329 6,332	99,266 3,620. $1,067,603	$817,082	$250,521
It will be observed that the value of the exports of Canadian produce has declined to a lesser extent than the value of imports. Indeed, when the lower prices of the leading Canadian export commodities are taken into consideration, there will be found to have been very little reduction in the actual volume of exports.
It is also noteworthy that, despite the unfavourable conditions which have prevailed, there has been a progressive improvement in
the balance of trade. In the first eleven months of this fiscal year, ended February 28, the excess of exports over imports was $70,240,000 which is a remarkable showing as compared with a favourable balance of $25,490,000 in the corresponding period of the previous year, and a complete reversal of the position in the eleven months ended February 28, 1931, when our trade showed an unfavourable balance of $70,524,000. Comparative figures are as follows:
Eleven months ended- February 28,1931. February 29, 1932 February 28, 1933
Trade of Canada (000 omitted)
Imports .. ..	$831,232
	 521,056
.. ..	373,421
Exports
[Stage Direction]
Balance (-) $70,524 ( + ) 25,491 ( + ) 70,240
Although the tariff agreements arising out trade statistics, significant developments of of the Imperial Economic Conference have the utmost importance to our trade with been in force only a few months and their empire countries are indicated, advantages are not yet fully reflected in the
[Stage Direction]
The Budget-Mr. Rhodes
In tli!; ten months ended January, 1933, (the latest date for which trade statistics by countries are available), Canada's exports to various parts of the empire were slightly greater than in the same period in 1932, and to the United Kingdom had increased by some
seven million dollars. In addition, the decline in empire imports was much less, relatively, than in respect of non-empire imports. Trade totals reflecting the interempire movement of goods are as follows:
Inter-Empire Trade of Canada
Ten months ended
Imports from United Kingdom	 ¥ 87,509,816
Exports	to United Kingdom	
153,776,204Imports	from British Empire	
122,448,561Exports	to British Empire	
192,824,941
Ten months ended
January 31,1933 $ 73,629,042 160,610,678 101,939,909 193,115,066
When expressed as percentages of total trade, these figures clearly indicate the trend towards increased trade with empire countries. In the ten months ended January 31, 1933, imports from the British Empire were 29-13 per cent of total trade, as compared with
United Kingdom British Empire. United States.. Other countries.
25-23 per cent for the previous corresponding period. Exports to empire countries in the same period were 46-34 per cent of total trade, as compared with 37-84 per cent formerly.
The percentage distribution of Canada's trade is shown in the following statement:
Imports		Exports	
Ten months	ended	Ten months ended	
January 31		January 31	
1932	1933	1932	1933%	%	%	%. 18.03	21.04	30.02	38.5429.13	37.84	46.34. 60.77	57.22	41.54	30.89. 14.00	13.65	20.62	22.77
In imports from the United Kingdom, the chief gains have been in textiles, coal, manufactures of iron and chemicals. So far as exports to the United Kingdom are concerned, important increases are being registered in many products of the farm, mine and factory.
An increase has occurred! in both imports from and exports to Australia, the latter rising from $4,207,000 to $6,047,000. This improvement is especially gratifying to those interested in trade from the Pacific coast.
A feature of the import trade has been the growing importance of the West Indies as a source of supply of semi-tropical fruits and vegetables.
Considered in the light of world conditions, Canada's external trade has shown a reassuring stability which reflects not only the underlying productive capacity of the country, but also the energy and capacity of those engaged in production and trade.
Financial Conditions in Canada
It will be recalled that after Great Britain departed from the gold standard, the export of gold from Canada was prohibited except under license and the gold production of the mines was purchased by the government at the world price. This policy has been continued, and the receipt of the New York premium, which would, of course, have been obtainable by producers had they been permitted to export their gold freely, has undoubtedly contributed to the substantial expansion which has occurred in gold production. Next to South Africa, Canada is now the largest producer, having expanded her output from $16,000,000 in 1913 to $63,000,000 in 1932, succeeding the United States as the second largest producer. It is estimated that for the present calendar year our production will amount to $67,000,000.
The importance of this industry lies not alone in the increasing employment it has given to labour, the profits which have been disbursed in dividends and the impetus given to domestic trade generally, but perhaps primarily at this time in the support which it has given to our exchanges and the national credit.
This increased gold supply, available for export without weakening monetary gold reserves, taken in conjunction with the elimination in the past two years of a large unfavourable balance of trade and the substitution therefore of a favourable balance exceeding $70,000,000, has been most significant in relation to Canada's ability to meet, without undue strain, the burden of interest
The Budget-Mr. Rhodes
[Stage Direction]
and principal payable abroad. Without making a detailed presentation of the various items entering into Canada's balance sheet of international payments, it may be noted that current estimates of the position indicate that exports of goods, gold, and services, are sufficient to offset annual charges payable abroad and to leave a substantial balance for principal payments on account of external debts. This has been a most important factor in maintaining the high credit position of Canada in world markets. During the past year Canada was the only foreign country that was able to borrow in the public markets of the United States.
This enviable position has been and can be held only by the maintenance of sound financial and monetary policies. Much has been heard in recent months about inflation. Some of the advantages claimed for inflation may seem alluring to industries harassed by falling prices and declining turnover. But let the sponsors of inflation never forget that apart from tlhe other difficulties and dangers involved in their program, one inevitable result would be a flight from our dollar, a withdrawal on a large scale of the capital invested by foreigners in this country in the form of securities and bank deposits. There are also to be considered internal reactions to any steps which might impair confidence in a country's currency. Against policies which might lead to such dangers, this government has resolutely set its face.
The external value of the Canadian dollar, though showing greater fluctuations than are desirable for the normal conduct of international trade, has been maintained at a moderate discount in terms of the United States dollar. In October last, the rate rose to 6J per cent discount, and at no time during the past year was it depresesd to the level of December, 1931. There are some who advocate that our dollar should be tied to sterling at the old parity and still others who criticize what they mistakenly believe to be a policy of pegging our dollar in terms of New York. This is not the time to enter into a discussion of this broad and complicated question. Suffice it for me to say that our dollar has been allowed to find its own level and that as a result it has been fluctuating about half-way between t'he United States dollar and the English pound. In so doing it may be working out a not unsatisfactory compromise between those of our national interests which would be benefited by close and stable relations with sterling, and those on the other hand which would be seriously harmed by a heavy and fluctuating discount in terms of New York.
[Mr. Rhodes.!
The financial and monetary policies which have been followed have also contributed to the efficient working of our internal credit and investment facilities. In general the needs of industry, of crop-marketing agencies ana of public bodies harassed by falling revenues have been taken care of with admirable efficiency, particularly in view of emergency conditions and in the ligffit of the situation in many other countries. Canada is one of the few countries that has been able to retain a market for new long-term financing, and the volume of long-term capital issues which were floated in the domestic market last year is, I submit, a splendid tribute, not only to the efficiency of our investment and banking institutions, but also to the thrift of the Canadian people and the underlying strength of our economic position. Excluding shortterm and refunding loans, a total of $267,000,000 was raised. In passing, it is interesting to note that over $15,000,000 was secured by Canadian borrowers from the London market, three provinces and two municipalities selling their first sterling issues since 1914.
The dead hand of past lavish expenditure and borrowing still weighs heavily upon all public bodies. While public revenues keep falling, debt charges persist and increase, consuming an ever-growing proportion of total current receipts. This whole problem of interest charges is now receiving the attention of the banking and commerce committee of this house. Without touching upon their field, may I say that the policy of this government is to keep the interest charges upon the public debt as low as possible by maintaining such financial policies as will enable us to raise new funds and convert maturing loans on the most economical basis. When the opportune moment arrives, we propose to offer a conversion loan to the public of this country. But it will be on a basis that will keep faith with investors and will not in any sense involve repudiation of existing contracts. Under such conditions, the issue can be made, it is believed, at a rate which will involve a substantial saving to the public treasury.
May I refer also, at this time, to a matter which has received some attention in the public press, namely, the movement on the part of the banks and other financial institutions to reduce the interest rate on savings bank deposits. In my judgment this reduction is a necessary step if we are to reduce the interest rate on bank loans, on mortgages and on long-term bonds to a level where business recovery will be most effectively stimulated. I need not dwell upon the extent to which

The Budget-Mr. Rhodes
it will ease the burden of financing for all public bodies by enabling funds to be raised it lower rates. In this matter, therefore, the government is prepared to cooperate by reducing the rate of interest paid on postal savings deposits.
Finally, I wish to refer to the contribution of the chartered banks to the orderly financing of our economic life. Under the impact
of the severest financial storm that history records, our banking system has fully maintained its enviable reputation, meeting every demand upon it and retaining the fullest confidence of the public. The annual bank statements which have been issued recently indicate an exceptionally strong and liquid position, while the chief concern of our banks would appear to be the difficulty of finding satisfactory outlets for the investment of their surplus reserves.
A bill has already been introduced in this house providing for the extension of existing bank charters until July 1, 1934. Before that date the periodic revision of the Bank Act will have taken place. Speaking in this house more than a year ago, the right hon. the Prime Minister, raised the question as to whether or not a central bank should be established in Canada. In recent months the question has been widely discussed, but it must be recognized that it is a highly technical matter, upon which conclusions should be reached only in the light of the fullest enquiry into all aspects of the problem. The government proposes, therefore, to appoint a royal commission to study the organization and working of our entire banking and monetary system, to consider the arguments for and against a central banking institution and to make recommendations for revising or supplementing our existing banking and monetary legislation. I need scarcely say that the endeavour will be made to secure a body of experts, wherever they may be found whose competence and whose freedom from bias will command the respect of every section of the Canadian public. The intention is that the commission should begin its investigation at an early date, should adjourn, if necessary, in order to consider its findings in the light of any recommendations that may be made by the World Monetary conference, and should submit a report which would become the basis for study by the banking and commerce committee at the next session of parliament.
The brief reference which I have made to the financial situation in this country may well be a source of satisfaction to Canadians, having regard to world conditions. I do not overlook the darker elements in the picture- the low level of business activity, the shrinkage of trade, the pressure of low prices and of existing debts, the increase of unemployment and the various social costs which it involves. Nevertheless, it means much for the prospect of future recovery that as a nation Canada is able to take care of her foreign commitments without undue strain; that our financial structure continues intact and. our credit remains unimpaired in the markets of the world.
Taxation Revenues 1932-33
The continuance of the decline in business activity and in commodity prices had the inevitable effect, in Canada as in other countries, of a continuing fall in public revenues. This was particularly marked in taxation revenue from which the dominion derives over 80 per cent of its total receipts.
Of the major sources of taxation revenue, the income tax alone will yield the sum estimated. When the fiscal year ends on March 31st, income tax receipts, as now estimated, will approximate 862,000.000 as compared with an estimate of 160,000,000 and a yield during the previous fiscal year of $61,255,000.
The customs tariff still ranks first as a contributor to the dominion treasury, but its yield of $72,000,000 for 1932-33 is substantially below the customs revenues of last year. This decline reflects, of course, the fall in commodity prices and the gradual shrinkage of international trade due in part to exchange restrictions and chaotic monetary conditions. The fall in excise duties, which are estimated to produce 838,594,000, was slightly less rapid than that in customs duties.
Because of the increase in the rate from 4 per cent to 6 per cent, the sales tax again rose to third place in the list of revenue producers. Though the higher rate was not fully effective during the entire year, the return will exceed $58,000,000 and closely approach that of the income tax and the customs tariff. If to sales tax receipts we add the yield of the various other excise and miscellaneous taxes imposed by the Special War Revenue Act, we have a total estimated return of 885,432,000 or over 33 per cent of our total taxation revenue.
The following table gives a comparative statement of the estimated receipts from taxes for the fiscal year now closing and the previous four years:
The Budget-Mr. Rhodes
[Stage Direction]
Taxation Revenues
(000 omitted)
1928-29	1929-30	1930-31	1931-32	Estimated 1932-33Customs import duties	$	$	$	$	$187,206	179,430	131,209	104,133	72,081Excise duties	
War Tax Revenues-	63,685	65,036	57,747	48,655	38,594Banks	
Trust and Loan Companies	1,243 8	1,408	1,429	1,390	1,350Insurance companies	895	74	74	12	805Delayed business profits	455	173	34	3	Income tax	59,422	69,021	71,048	61,255	62,000Sales tax	
Manufacturers', importation, stamp,	63,646	44,859	20,784	41,734	58,757transportation taxes, etc	19.3G1	18,550	13,951	17,872	24,520Total receipts from taxation	395,921	378,551	296,276	275,054	258,167
Public Service Revenues
the mail of the various branches of the
The sum of $52,709,932 will, it is estimated, be collected by way of revenues from the various public services. This is slightly larger than the corresponding figure for the previous year.
The chief source under this head is the Post Office Department, the revenue of which is estimated at $31,129,243. This is slightly less than the estimate and less than the total for 1931-32. On the other hand, post office expenditures have been reduced more rapidly with the result that a deficit of $2,214,000 in 1931-32 has been turned into an expected net revenue of approximately $567,000 during the current year. The figures for post office receipts do not include any credit for handling
public service free of charge, nor does the department's expenditure take into account disbursements made by Public Works and other departments on account of Post Office.
The second largest item of public service revenues is interest on investments, representing interest on advances to harbour commissions, provinces, etc., and including the regular payments by Rou-mania on its loan. The total this year will exceed $11,500,000, as compared with $9,330,125 last year. Included in the total is the payment of $807,000 by the chartered banks for interest upon advances under the Finance Act. The corresponding payment last year was $360,247.
A five-year comparison of non-tax revenues follows:
Non-Tax Revenues
Canada Grain Act	
Canada Gazette	
Canals	
Casual	
Chinese Revenue	
Dominion Lands	
Electricity	
Fines and forfeitures	
Fisheries	
Gas inspection	
Insurance inspection	
Interest on investments	
Marine	
Mariners' Fund	
Military college	
Miltary pensions revenue	
Ordnance lands	
Patent and copyright fees	
Penitentiaries	
Post Office	
Premium, discount and exchange
Public works	
R.C.M.P. officers' pensions	
Superannuation fund	
Weights and measures	
_______Total non-tax revenues...
1928-29	1929-30	1930-31	1931-32	Estimated 1932-33$	$	S	$	s2,992,540	2,047,207	2,179,047	1,484,826	1,437,49380,214	93,890	71,197	73,590	74,0001,230,333	1,043,647	1,026,671	976,845	806,2004,041,095	4,300,710	3,678,487	4,286,745	4,360,45418,224	14,345	21,996	10,059	9,8004,070,339	4,139,104	1,655,401	485,364	453,500563,964	546,957	632,151	402,189	299,797655,485	748,343	433,716	233,512	208,886109,300	110,724	73,937	40,519	37,72592,398	100,763	94,255	81,359	81,627131,626	138,780	148,942	149,902	159,91812,227,562	13,518,205	10,421,224	9,330,125	11,506,694182,810	184,637	199,000	191,905	178,557236,808	209,322	201,768	184,485	185,64620,204	19,820	19,882	20,045	20,116155,830	158,881	159,000	163,229	156,67624,830	30,277	29,384	14,250	15,000530,239	574,918	559,646	525,248	558,882178,449	181,024	183,288	166,111	101,83830,611,964	33,345,385	30,212,326	32,234,946	31,129,243501,592	458,390	501,610	301,108414,085	408,151	362,391	280,591	214,7816,373 81	6,471 5	6,357	14,787	9,703399,247	407,248	419,750	406,529	402,28859,475,592	62,787,204	53,291,426	51,757,161	52,709,932
[Stage Direction]
The Budget-Mr. Rhodes
Included in casual revenue in the above table is SI ,400,000 received from the sale of radio licences. This compares with $514,177 received during the previous year when the fee was $1 compared with the present $2.
Special Receipts
Special receipts were not as large as during either of the previous two years, primarily because nothing has been received on account of German reparations since the Hoover moratorium. From the Custodian of Enemy Property, however, there has been received $4,000,000, which has been taken into the
accounts in part as an offset to the disbursements from the consolidated revenue fund in respect of compensation paid to civilians for damages sustained in the war.
Summary of Revenues
Adding special receipts to the returns from taxation and public service revenues, we reach a grand total revenue of $315,290,000, which is $18,549,000 less than the figure for the previous year.
A comparison of revenues for the last five fiscal years is given in the following table:
Summary of All Revenues
(000 omitted)
1928-29	1929-30	1930-31	1931-32	Estimated 1932-33$ 395,921 59,476	$ 378,551 62,787	$ 296,276 53,291	$ 275,054 51,757	$ 258,107 52,710
455,397 5,476	441,338 4,771	349,567 6,622	326,811 7,028	310,817 4,473
					
					
	460,873	446,109	356,189	3330839	315,290
					
Ordinary Expenditures 1932-33
The ordinary expenditures for the year are estimated at $364,425,000, which is $8,080,000 less than the figure for 1931-32. Whilst this expenditure is $130,000 more than was estimated, this slight increase must be considered in the light of the fact that after the budget estimate was made, supplementary estimates were passed, amounting to $7,644,000. By means of rigid control over expenditures,
it was possible to effect a total saving of upwards of $12,000,000 from the total amounts voted by parliament.
In previous budgets it has been customary to give a statement of ordinary expenditures by services. The following five-year summary is given on the basis of expenditures by departments (with sub-heads for the more important services), in the belief that this classification will be more serviceable.
Statement by Departments of Expenditure for the Last Five Fiscal Years
(000 omitted)
Ordinary Account	1928-29	1929-30	1930-31	1931-32	Estimated 1932-33% 8,128 400	$ 10,245 402	10,119 416	10,212	*8,601436	390Chief Electoral Officer, including Elec-	75	46	2,256 343	145	64268	308	306	243Extemal Affairs including Office of the	749	897	928	994	875Finance-	124,990	121,566	121,290	121,151	134,971728	12,554 1,600 2,687	12,497 1,600 837	17,436	13,695	13,677Special Grants to Maritime Provinces....	1,600 778	1,600 536	1,600 5312581,648 2.369	i, 545 2,006	1,476	1,405	1,330General Expenditure	1,794	1,845	2,018
The Budget-Mr. Rhodes
[Stage Direction]
Statement by Departments of Expenditure for the Last Five Fiscal Years-Concluded
(000 omitted)
Ordinary account	1928-29	1929-30	1930-31	1931-32	Estimated 1932-33$	%	$	$	%Fisheries	1,974	2,426	2,435	2,046	1,883Governor General's Secretary's Office	155	170	142	148	146Immigration and Colonization	2,950	3,094	2,588	2,200	1,769Indian Affairs	4,789	5,333	6,069	5,081	4,507Insurance	156	159	178	ISO	166Interior	7,787	8,490	8,104	4,647	3,576Justice	2,640	2,591	2,538	2,560	2,480Penitentiaries	1,808	2,561	3,237	2,737	3,039Labour	011	697	797	633	628Technical Education	1,152	413	391	283	300Old Age Pensions	
Legislation-	833	1,537	5,658	10,032	11,500House of Commons	1,652	1,690	1,786	2,061	2,261library of Parliament	74	74	76	81	66Senate	539	529	568	650	698Marine	
Canadian Radio Broadcasting Commission 	7,514	8,944	8,030	7,262	6,443 250Mines and Geological Survey	
Movements of coal and Dominion Fuel	1,250	1,358	1,420	1,264	1,077Act	
National Defence-	23	56	514	721	1,271Militia service	11,044	11,033	10,953	9,700	8,808Naval service	1,836	3,013	3,598	3,043	2,422Air service	5,041	5,921	7,147	4,040	1,750Sundry services	1,753	1,925	1,928	1,347	1,085National Revenue (including Income Tax). Pensions and National Health- Treatment and after-care of returned	13,542	13,844	13,972	13,920	11,148soldiers	7,902	8,494	9,774	11,154	10,811Pension, war and military	41,095	40,032	45,541	48,249	44,500Health division	1,275	1,390	1,342	1,246	965Post Office	34,950	36,557	37,892	36,052	32,073Privy Council	59	58	54	53	51Public Archives	189	203	212	212	175Public Printing and Stationery	291	302	295	289	248Public Works	[DOT] 18,685	19,819	25,453	17,648	13,983Railways and Canals	3,870	4,122	4,479	3,997	4,028Maritime Freight Rates Act	7,178	7,401	10,327	9,187	10,650Royal Canadian Mounted Police	2,800	3,100	3,192	3,488	6,245Secretary of State	426	454	479	483	460Soldier Settlement Board	
Trade and Commerce-	1,442	1,362	1,300	1,036	851Department	3,245	3,252	4,955	6,417	3,335Mail subsidies and steamship subventions	1,026	1,083	1,323	2,999	2,083Canada Grain Act	1,856	2,271	2,356	2,306	2,136Total ordinary expenditure	350,886	357,707	389,539	372,505	364,425
Premium, Discount and Exchange
It will be noted that only the net balance of the above account is included in the figures. During this fiscal year, the expenditure for this purpose will, it is estimated, total $8,000,000. Of this amount, $7,962,000 represents premium paid on gold purchased by the mint, the balance representing exchange on sundry items. This expenditure was more than offset on the revenue side by credits totalling $8,301,000, resulting from the sale of
New York funds acquired by the shipment of gold, the discount on sterling purchased to meet London requirements, and the discount on sterling securities purchased below par for sinking fund purposes. This makes a net revenue for the year of $301,000. The inclusion of the net balance only in the accounts avoids the undue inflation of revenue and expenditure arising primarily from the governmental policy of centralizing and controlling the purchase and export of gold.
[Stage Direction]
The Budget

Mr. Rhodes
Capital Expenditures
The amount voted for capital expenditure was $9,678,100, of which $9,123,000 will be spent. Last year the expenditures on capital
account amounted to $16,980,000 and for the year 1930-31 the expenditure was $28,222,000.
Classified on the usual three-fold basis, capital expenditures for the last five years are presented in the following table:
Capital Expenditures (000 omitted)
Estimated.
1928-29	1929-30	1930-31	1931-32	1932-33
Canals	 $13
Railways	 6
Public Works	 3
Total capital expenditures	 $22
.164	$ 9,324	$ 9.842	$ 3,299	$3,129,302	6,603	6,371	6,242	1,582,343	6.574	12,009	7,439	4,412,809	$22,561	$28,222	$16,980	$9,123
Special Expenditures .
Special expenditures, it is estimated, will amount to $42,483,000. This represents a reduction of $12,993,000 from the previous year.
The two chief items in this classification are wheat bonus and unemployment relief. The carry-over of wheat bonus paid during the current fiscal year is $1,826,260, making a total outlay on this account of $12,734,689- considerably larger than was at first contemplated due to the unexpectedly large crop of 1931.
Unemployment Relief
On unemployment relief, the total expenditure during the year will be $35,603,000, which is a larger amount than the current annual
cost of relief due to the fact that there was carried over from the previous year a large expenditure in respect of the Dominion government's share of the cost of relief works, the accounts for which reached us for payment some time after the actual expenditures were incurred by the provinces and municipalities.
The total amount paid in respect of commitments arising out of the 1931 act was $17,300,000. of which $12,400,000 was for the public works just mentioned. The amount paid in respect of commitments carried forward from the 1930 legislation was $553,400, and the payments under the Relief Act of 1932 are estimated at $17,749,600. The whole expenditure may be summarized as follows:
Public wrorks	 $12,531,100
Direct relief (including Saskatchewan Relief Commission, $4,600,000)	 19.630,280
Other expenditures, mainly Dominion projects	 3,441,620
[Stage Direction]
A comparative statement showing special expenditures during the last five fiscal years follows:
Special Expenditures
(000 omitted)
-	1928-29	1929-30	1930-31	1931-32	Estimated 1932-33Adjustment of War Claims	
Cost of Loan Flotations	
Miscellaneous Charges	
Reparations- Claims for Compensation	$ 120 11 2,056	$ 95 17 3,027 6,700	$ 110 193 2,955 500 4,432	$ 91 1,350 3,500 1,331 13,190 25,106	$ 72 1,551 3,165 266 553 17,300 17,750 1,826
10,908	
			8,599		
Total Special Expenditures						
	2,187	9,839	16,789	55,476	42,483
The Budget-Mr. Rhodes
[Stage Direction]
Loans to Provinces
Loans by the Dominion government to provincial governments under authority of the Relief Act, after taking current repayments into account, amounted to 117,489,725. The loans carried forward from the previous fiscal year totalled $22,544,422, on account of which $2,000,000 was repaid during 1932-33. The total presently outstanding is therefore $38,034,147.
Two	provinces-Manitoba	and British
Columbia-were given temporary assistance in meeting maturities in New York, undertakings having been given that the loans by the dominion would be repaid from refunding issues in Canada. A portion of such loans has been repaid, as well as $2,000,000 by British Columbia on account of a similar loan made in the previous year, the result being that the loans to assist provinces to meet their New York obligations increased during the year by a net amount of $506,716.
The prairie provinces, in the spring of 1932, granted assistance in the form of loans for seed grain and seeding operations to farmers in areas that had suffered from drought, and the Dominion government co-operated in this emergency measure by lending the provinces
the required amounts, aggregating $6,740,000, on account of which $630,000 has been repaid, leaving $6,110,000 presently outstanding.
The loans for other provincial purposes, mainly for the financing of public works and direct relief expenditures, totalled $8,873,009, of which amount $6,500,000 was assigned to the financing of provincial and municipal share of the cost of public works under the 1931 relief program, provision for which extended over into the present fiscal year. It will be remembered that in view of conditions existing in the western provinces, [DOT] the dominion then undertook not only to pay the agreed share of the cost, but also to assist the provinces in the financing of the balance.
In all* these cases, the dominion made the loans only after the most pressing representations by the governments of the provinces concerned, and as a temporary measure until these provinces, admittedly subjected to far-reaching readjustments in their budgets, were afforded the time necessary to arrange the financing of their own obligations.
A summary statement showing amounts of loans and the purposes for which they were authorized, follows:
Loans, 1932-33 net outstanding	Loans covering obligations maturing in New York	Loans re assistance to farmers, including purchase of seed grain	Loans for provincial purposes including public works and direct relief	Total$ 1,944,130	$ 380.000 5,590,000 140.000	$ 2,632,580 2,134,338 1,700,000 2,406,091	$ 4,956,710 7,724,338 1,840,000 2,968,677
562,586			
Loans, 1931-32 net outstanding	 Total outstanding					
2,506,716 9,637,189	6,110,000	8,873,009 10,907,233	17,489,725 20,544,42212,143,905	6,110,000	19,780,242	38,034,147
Loans and Advances, Non-Active
The final classification of expenditure consists of those advances to corporations which are non-interest-bearing and are regarded as non-active. They are charged as expenditures for the year and are not treated as assets in establishing the net debt of the Dominion.
Steamship Companies
Under the head " Canadian National Steamships," provision is made for the operations of the West Indies service and the Canadian Government Merchant Marine. There was an improvement in the operating results of

the West Indies service in 1932. The cash outlay from the dominion treasury for the year's operations was $753,716; the corresponding figure for 1931 being $916,568. However, as $161,448 of the 1931 loss was not voted until the commencement of the current fiscal year, our accounts for 1932-33 will show total loans of $915,164 to the Canadian National (West Indies) Steamships.
The operations of the Canadian Government Merchant Marine fleet have been subject to some curtailment and 13 vessels not in service were disposed of during the past year. The dominion treasury furnished $326,613 for

The Budget-Mr. Rhodes
1932 operating loss but, on the other hand, received back from the company $2,624,000 as a credit to previous years' advances. Of the latter amount, $600,000 represented working capital released as a result of lower commodity prices and diminished fleet and $2,000,000, a surplus transferred from the company's insurance fund. This fund accumulated by reason of the fact that the annual charges for the cost of insurance were greater than the losses realized, and as the government has financed directly the whole cost of the merchant marine, it is appropriate that the surplus so accumulated should, particularly in view of the reduction which has been effected in the operations of the company, be now returned as a credit against the loans
made by the government in previous years. Taking into consideration these refunds, the accounts for the year will show a credit under the classification " Canadian National Steamships" of $1,383,000.
The other non-active advances include $500,000 to the Quebec harbour commission, $2,447,000 to the Canadian Pacific Railway Company to enable the company to keep its shops open and provide employment for labour and $395,000 for Montreal harbour bridge deficit. The net requirements for loans and advances non-active will therefore be $1,959,000, as shown in the following statement which gives comparisons also for the previous four years:
Loans and Advances, Non-Active (000 omitted)
-	1928-29	1929-30	1930-31	1931-32	Estimated 1932-33$	$ 2,933 2,491 2,821 17	$	$	$Loans to Canadian National Steamships... Loans to Quebec Harbour Commissioners..	758 2,888	1,827 3,491 170	1,199 1,379 534	1,383 (cr) 500 395 2,447
Accounts carried as active assets transferred	10,000				
					
	13,646	8,262	5,488	3,112	1,959
Summary of Expenditures	expenditures for the year amounted to $417,-
Grouping the 1932-33 expenditures together 990,000 as compared with $448,073,000 in as in the following comparative table, it will 1931-32, a reduction of $30,000,000. be observed that the total of government
Summary of Expenditures (000 omitted)
[Stage Direction]
1928-29	1929-30	1930-31	1931-32	Estimated 1932-33$ 350,886 22,809 2,187 13,646	$ 357,707 22,561 9,839 8,262	$ 389,539 28,222 16,789 5,488	$ 372,505 16,980 55,476 3,112	$ 364,425 9,123 42,483 1,959
389,528	398,369	440,038	448,073	417,990
Canadian National Railways
All of the money required for the Canadian National Railways in 1932 was provided from the dominion treasury.
It is well-known that as regards the volume
of railway traffic, the year was very disappointing. Taking the system as a whole gross operating revenues suffered a decline of 19 per cent or over $39,000,000 as compared with the previous year. Notwithstanding that the management paralleled this decrease of $39,000,000 in gross earnings by a reduction of
321G
The Budget-Mr. Rhodes
[Stage Direction]
$44,000,000 in operating expenses, the net financial result for the year, after absorbing fixed charges due the public and exchange premium, was only slightly more favourable than in 1931. The dominion was required to provide in cash $60,058,506 for deficits, as compared with $60,968,438 in the previous year. These figures are for the whole system, including eastern lines, and take no account of interest amounting to $35,500,000 accrued in the accounts of the railways, but not paid, on loans by the government to the company.
In addition to provision for deficits, cash must also be furnished for debt retirement and capital expenditures. The former are, of course, fixed and uncontrollable. Capital expenditures, however, have been drastically curtailed, the net in 1932, after crediting equipment retirements, amounting to $799,158, as compared with a corresponding figure of $34,373,262 in 1931.
The following statement gives a comparison of the financial requirements of the system for 1932, as compared with the budget estimates, and actual requirements in 1931:
Canadian National Railways-Financial requirements'
Actual 1932	Budget 1932	Actual 1931Deficit- System (ex. eastern lines)	$ 53,422,661 6,635,845	$ 42,784,610 6,217,400	$ 52,255,676 8,712,762Eastern lines	
60,058,506 799,158 11,510,178	49,002,010 7,033,738 11,681,652	60,968,438 34,373,262 10,041,691 4,226,030
Capital expenditures				
Debt retirement				
Discount on securities issued				
Less working capital available				
	72,367,842 4,231,997	67,717,400	109,609,420 633,155
Amount required				
	68,135,845	67,717,400	108,976,265
			
Of the total of $72,367,842 required by the railways in 1932, $4,231,977, it will be seen, was secured from the working capital funds of the company; the balance of $68,135,845 was furnished by the government-$6,635,845 by payment of the deficit on the eastern lines as a charge on the consolidated revenue fund, and $61,500,000 by loan to the company under authority of the Canadian National Railways Financing and Guarantee Acts, passed at the 1932 session. The whole of the amount authorized was paid.
One of the recommendations of the Royal Commission on Railways and Transportation, to which effect is being given in the legislation now before parliament, is that sums which are required to meet deficits should be voted by parliament annually. To implement this recommendation, the government has submitted an estimate of $53,422,661 in respect of the income deficit of the system in 1932, (excluding the loss on eastern lines already provided for by vote). This amount will be credited against the loans of $61,500,000, above referred to, leaving a balance owing the government of $8,077,339, which will remain standing as an interest-bearing loan, repre-
senting as it does outlay for capital account and debt reduction.
At the same time, loans of $41,121,216 made by the government to the Canadian National Railway Company in the fiscal year 1931-32 in respect of railway operations in 1931, will be transferred from the category of active to non-active assets, as these also represent loans for deficits. They will be added to the $614,000,000 of non-active assets shown in the public accounts for loans to railway companies and for the purchase of capital stock.
In so far as the accounts of the railway company are concerned, the ultimate treatment of government advances, prior to the year 1932, representing partly losses and partly capital expenditures, will be governed by the action of the proposed board of trustees to whom the control and management of the railways will be entrusted. The royal commission has recommended that the question of the capital structure of the system have the early attention of the board of trustees. It should be understood, however, that so far as the government's accounts are concerned, the effect of treating these railway advances

The Budget-Mr. Rhodes
as non-active assets, has already been to absorb them fully into the government debt.
As at March 31, 1933, the funded debt of the Canadian National Railways due the public will amount to about $1,263,000,000, having been reduced by $11,000,000 in the past year. Qf the amount outstanding, $965,000,000 bears the guarantee of the dominion.
The company has also been able to retire a temporary debt of $9,008,250, by the utilization of working capital released through reductions in stores and material accounts. This debt represented the construction cost of the Manitoba Northern railway, a branch line undertaken in 1927 and financed under authority of order in council by temporary bank loans.
Harbour Commissions
Advances to harbour commissions totalled $6,657,000, a considerable reduction from the previous year when upwards of $14,000,000 was loaned. For the most part, this sum represents capital cost of port developments inaugurated some years ago. A statement of the advances in 1932-33 and four previous years, and the total advances to date, is as follows:
Advances to Harbour Commissions (000 omitted)
1928-29	1929-30	1930-31	1931-32	Estimated 1932-33$	$	$	$	$Chicoutimi	500	815	846	465	324Halifax	30	1,272	3,539	2,752	1,023M ontreal-Construction	1,370	4,336	2,291	1,412	614170	534	395189	56Quebec	2,888	2,821	3,491	1,379	500Saint John	602	1,711	1,094	5,764	2,581136	1,544	747	255Vancouver	1,596	345	2,802	809	9096,986	11,436	15,777	14,051	6,657
Advances to date
Chicoutimi	
Halifax	
Montreal-Harbour..
Montreal-Bridge___
New Westminster___
Quebec	
Saint John-Harbour
Three Rivers	
Vancouver	
2,950
8,616
58,003
1,099
26,309
11,752
2,682
22,326
133,982
It has been the practice to carry these loans, with the exception of those for the Quebec commission and the Montreal harbour bridge deficit, as active assets, on the assumption that they represented1 capital works that would sustain the debt incurred for them. Clearly, that has not been the situation with respect to the Chicoutimi, Three Rivers, Halifax and Saint John commissions. Interest can be paid only because it is added to the construction cost. It is proposed to transfer the advances to these commissions totalling $26,000,000, to the non-active category at once, as the financial position of these commissions
is anything but satisfactory. It may be observed that Sir Alexander Gibb's recommendations for the control and operation of national ports would, if put into effect, involve further adjustments in the manner of recording the expenditures which the government has made for their development.
Canadian Farm Loan Board
The dominion continued to purchase at par the board's 5 per cent bonds to the extent that loaning operations required. Bonds pin-chased amounted to $850,000 and a subscription of $70,650 was made to capital stock-
321?
The Budget-Mr. Rhodes
[Stage Direction]
The capital furnished from the dominion treasury for the operations of the board now aggregates $8,137,115, divided as follows:
Initial capital	$5,050,000
Purchase of bonds	 2,650,000
Purchase of capital stock	 437,115
[Stage Direction]
Having presented the revenues and expenditures under the appropriate classifications, we are now in a position to indicate the met results of the dominion's accounts for the year. Minor adjustments have yet to be made before the accounts are closed, but the figures given are believed to approximate the final balances for the year.
With ordinary expenditures totalling $364,-
425,000	and revenues of $310,817,000 it will be observed that the resulting deficit on ordinary account is $53,608,000.
When the budget was brought down last year, it was expected that the taxation proposals then submitted would increase the receipts to such an extent that there would be at least a balancing of the budget on ordinary account. The actual expenditure, as has been indicated has closely approximated the estimate. The explanation for the deficiency on ordinary account is therefore found in the failure of the revenues to attain the expected yield due to falling prices and shrinkage in business activity.
Special expenditures, including $37,400,000 for unemployment relief and wheat bonus, amounted to $42,483,000. If against this sum there is applied $4,473,000 received in special revenues, there remains a balance of special expenditures not provided from income, of $38,010,000. In addition there are the capital expenditures of $9,123,000 and net loans and advances non-active of $1,959,000. The resulting increase of debt on government operations for the year is therefore $102,700,000, as compared with a corresponding figure in the previous year of $114,234,000.
To give effect to the assimilation in our accounts of the deficit of the Canadian National Railways, tihe increase in debt of $102,-
700,000	on government operations will be augmented, as previously referred to, by the addition of a special charge of $53,422,000, resulting in a total addition to the debt, after taking into consideration the year's operations both for government and the railways, of $156,122,000.
In the balance sheet, effect will be given also to the transfer from active to mon-active assets of $41,000,000 of advances to the Canadian National Railways in 1931-32, and of $26,000,000 of loans to harbour commissions, as already referred to.

Loan Flotations
The dominion has been able to arrange for the orderly financing of all requirements during the year, including provision for maturing securities and the financing of the Canadian National Railways.
External borrowings in 1932-33 were for the purpose of meeting maturing obligations in New York. An issue of one-year 4 per cent treasury notes dated October 1, 1932, for the amount of $60,000,000, was sold to a New York banking group at 99-28 and accrued interest. From the proceeds of this issue a 5 per cent temporary bank loan, then standing at $13,000,000 but originally negotiated in 1931 for $19,000,000, almost entirely for railway purposes, was paid off and the cash balances of the dominion held in New York were restored to the extent that they had been utilized in making periodic payments on account of this indebtedness. The other maturing Obligation paid from the proceeds of this sale was the issue of $40,000,000 two-year 4 per cent notes which fell due December 1, 1932.
In Canada $85,000,000 was raised by the sale of treasury notes to the chartered banks. The first issue dated August 1, 1932, was for one year at 4J per cent and was sold at par and accrued interest. The other issue of two-year notes, dated November 1, 1932, was for $35,000,000 at 4 per cent and was sold at par and accrued interest. In addition, for temporary financing, $12,000,000 of 90-day 4 per cent treasury bills dated October 15, 1932, were sold to the banks at par. These were called for redemption on November 3.
A public issue of securities was made in Canada at the end of October. The offering was for $80,000,000 4 per cent bonds dated October 15, 1932, divided into two maturities:-$25,000,000 of three-year bonds and $55,000,000 of twenty-year bonds. The three-year bonds were sold at 99-20 and interest, yielding 4-28 per cent; and the twenty-year bonds at 93-45 and interest, yielding 4£ per cent. The .three-year maturity was immediately over-subscribed about three times, and all subscriptions in excess of $25,000 were allotted on a percentage basis. The twenty-year maturity moved more slowly but the books were closed shortly before the date set with a slight over-subscription, the total amount of the issue being $56,191,000. The whole issue is payable in Canada only, and the twenty-year bonds axe subject to redemption at par after fifteen years.
The sale of the 4 per cent loan of 1932 was in charge of a committee representing banks and investment houses, under the chairmanship of Sir Charles Gordon, president of the

The Budget-Mr. Rhodes
Bank of Montreal, and operated along lines similar to that employed in -the national service and conversion loans of 1931.
The expense of raising the loan, including commissions, advertising, printing, and delivery of securities, was about three-quarters of one per cent.
The proceeds of the issue were used for the purpose of paying off $34,449,950 of 5J per cent renewal loan bonds which remained outstanding after the conversion loan of 1931, and the balance of the proceeds was devoted to the general purposes of the government.
It is well to record that with this issue new ground was broken and for the first time -there
was offered for public subscription in Canada, a dominion security bearing a 4 per cent coupon.
While this factor produced some sales resistance, notwithstanding that the yield to the investor on -the twenty-year maturity was actually 4? per cent, it speaks well not only for the organization which conducted the sale of the loan, but also for the responsiveness of investors to the prime security of Canada that the issue met with success.
The direct -obligations of the dominion in the form of unmatured funded debt are listed in the following statement:
Unmatured Funded Debt as of March 31, 1933, and Annual Interest Charges
Date of maturity	Rate	Where payable	Amount of loan	Annual interest charges%	$ cts.	S cts.1933-Aug.	1	4 2	50,000,000 00	2,250,000 001	4	60,000,000 00	2,400,000 001 (a)	5£	169,971,850 00	9,348,451 751	3|	23,467,206 27	821,352 22July	1	5	33,293,470 85	1,664,673 541	4	35,000,000 00	1,400,000 001	5|	226,138,350 00	12,437,609 251935-Aug.	1 (a)	5	Canada and New York...	874,000 00	43,700 004	25,000,000 00	1,000,000 001936-Feb.	1	40,000,000 00	1,800,000 0015	5	79,535,200 00	3,976,760 001937-Mar.	1 (a)	5	Canada and New York...	90,166,900 00	4,508,345 001 (a)	5£	236,299,800 00	12,996,489 001	3	8,071,230 16	242,136 901	3	18,250,000 00	547,500 001	3	10,950,000 00	328,500 001	3 \	15,056,006 66	526,960 231	4£	75,000 000 00	3,375,000 0015	5	141,663,000 00	7,083,150 001943-Oct.	15	5	147,000,100 00	7,350,005 001944-Oct.	15	4a	50,000,000 00	2,250,000 001	4*	45,000,000 00	2,025,000 001947-Oct.	1	2|	4,888,185 64	122,204 641	3 \	137,058,841 00	4,797,059 431	5	100,000,000 00	5,000,000 0015	4	56,191,000 00	2,247,640 001	4f	43,125,700 00	1,940,656 001957-Nov.	1	4 \	37,523,200 00	1,688,544 001958-Nov.	1 (b)	4i	276,688,100 00	12,450,964 501 (c)	4 \	285,771,800 00	12,859,731 001	4	93,926,666 66	3,757,066 671	4	100,000,000 00	4,000,000 002,715,910,607 24	127,239,499 13Payable in Canada	
Payable in Canada and New York	
Payable in New York	
Payable in London	$ 2,013,201,570 85 	
91,040,900 00 	
300,000,000 00 	
311,668,136 39	74-13% 3-35 11-05 11-47Less bonds and stocks of the above loans held funds	S 2,715,910,607 24 as sinking	100-00%(a) Tax free in Canada.	$ 2,649,908,882 73	
(b) Tax free to Nov. 1, 1933, 5j% to Nov. 1. 1933 (e) 51% to Nov. 1, 1934.
[Stage Direction]
27ie Budget-Mr. Rhodes
[Stage Direction]
Indirect Liabilities
A statement is submitted presenting in detail the various bond issues guaranteed by the dominion outstanding in the hands of the public as of March 31, 1933, of a total par value of $996,148,354, or $4,300,000 under the figure of a year ago. There are, in addition, contingent liabilities of a special character assumed under the several relief acts. These include guarantees in connection with wheat marketing, the Province of Manitoba Savings Office, the Beauharnois Light, Heat and Power Company and Newfoundland.
In the budget speech of last session, mention was made of the guarantee given by the government to chartered banks in respect of their advances to Canadian Co-operative Wheat Producers Limited, arising out of operations in connection with the 1930 crop, and also with respect to the banking accommodation guaranteed to the wheat pools in the three western provinces in connection with the marketing of the 1931 crop. In connection with the latter operations, the advances made by the banks and guaranteed by the government were repaid with the exception of small balances transferred to the present crop year, and no liability has accrued against the government in respect of its guarantee for the marketing of the 1931 crop.
In response to urgent requests of the governments of the three western provinces, similar arrangements were effected for financing the 1932 crop and consequently, under authority of order in council of September 20, 1932, P.C. 2077, passed pursuant to the Relief Act, 1932, a guarantee was authorized, subject to certain safeguarding provisions, of advances to the three provincial pools arising out of the marketing of last year's crop. In the case of the Manitoba organization, the limit of credit was established at $1,395,000; for Saskatchewan, at $15,000,000; and for Alberta, at $9,000,-
000.	Within the last few days, arrangements were made by which a guarantee was given to enable the pools to distribute an additional 5 cents per bushel to farmers whose grain of the 1932 crop is being marketed on the pool plan. This action was taken so that an increased percentage of the value of their grain might be available at seeding time. Under these guarantees, the liability of the government accrues only after the crop has been marketed, and there is no ground for anticipating any less favourable outcome than in connection with the financing of the crop of the previous year.

The guarantee of advances to Canadian Cooperative Wheat Producers Limited in connection with the 1930 crop remains in effect, and it was necessary during the past season for the company to increase its liability as a result of stabilizing transactions which it was considered expedient in the public interest to support. To these operations the government gave its guarantee. The steadiness which has developed in the wheat market has undoubtedly vindicated the action then taken and the question of ultimate liability will depend entirely upon the future course of wheat prices.
By order in council of April 28, 1932, P.C. 972, effect was given to an undertaking by which, in the month of February of that year, the dominion guaranteed the chartered banks doing business in Winnipeg from loss in respect of the assumption by these banks of all liabilities of the Province of Manitoba Savings Office. The banks received from the province of Manitoba as security for the assumption of such liabilities, $12,442,400 one-year 5$ per cent treasury bills, maturing February 27, 1933, and on the maturity of these bills the banks were willing to accept a renewal, less the sum of $334,098 paid on principal account, provided the guarantee was continued. This the governor in council authorized under minute of February 22, 1933, P.C. 318.
In connection with the Beauharnois power project, the government has guaranteed advances of a principal amount of $15,539,000 made by several of the banks to finance construction work. These advances are secured in practically double this sum by the deposit of first mortgage bonds of the Beauharnois Light, Heat and Power Company which, in the opinion of the government affords ample security. The orders in council relating to this guarantee are dated July 11, 1932 (P.C. 1577) and February 6, 1933, (P.C. 213).
Finally, mention may be made of the assistance rendered jointly with the government of the United Kingdom, which enabled Newfoundland to meet interest obligations due January 1 last. The commitment of Canada relates to the guarantee of a bank loan of $625,000, bearing interest at the rate of 5 per cent.
The indirect obligations represented by guaranteed securities outstanding in the hands of the public are set out in the statement which follows:

The Budget-Mr. Rhodes
Bonds Guaranteed by Dominion Government as at March 31, 1933
Date of maturity
Issue
Sept. 1, 1934	
Feb. 15, 1935	
Sept. 1, 1936	
Oct. 1, 1940	
Dec. 1, 1940	
July 1, 1946	
April 1, 1948	
Sept. 1, 1951	
Aug. 1, 1952	
July 10, 1953	
Feb. 1, 1954	
Sept. 15, 1954	
Mar. 1, 1955	
June 15, 1955	
Feb. 1, 1956	
July 1, 1957	
July 20, 1958	
May 4, 1960	
May 19, 1961	
Jan. 1, 1962	
Jan. 1, 1962	
Dec. 1, 1968	
July 1, 1969	
Oct. 1, 1969	
Nov. 1, 1969	
Feb. 1, 1970	
By tenders or drawings. Various dates 1933-54...
Serial-Feb. 1 and Aug. 1, 1933-38. Perpetual	
[Stage Direction]
Canadian Northern	
Canadian Northern	
Grand Trunk	
Grand Trunk	
Canadian Northern	
Canadian Northern	
New Westminster Harbour Commission....
Canadian National	
Saint John Harbour Commission	
Canadian Northern	
Canadian National	
Canadian National	
Canadian National (West Indies) Steamships
Canadian National	
Canadian National	
Canadian National	
Canadian Northern	
Canadian Northern Alberta	
Canadian Northern Ontario	
Grand Trunk Pacific	
Grand Trunk Pacific	
Canadian National	
Canadian National	
Canadian National	
Harbour Comm, of Montreal	
Canadian National	
Canadian National	
City of Saint John debentures assumed by
Saint John Harbour Commissioners...
Canadian National Equip. G	
Grand Trunk Guaranteed Stock	
Grand Trunk Debenture Stock	
Great Western Debenture Stock	
Grand Trunk Debenture Stock	
Northern Railway of Canada Debenture Stock	
Interest rate	Amount outstanding	
%	S cts.	
4	17,060,333	334!	17,000,000	006	24,220,000	007	23,989,000	007	23,779,000	0061	24,238,000	004!	700,000	0041	50,000,000	005	667,953	043	9,359,996	725	50,000,000	00a	26,000,000	005	9,400,000	0041	50,000,000	0041	70,000,000	0041	65,000,000	003 1	7,896,561	6331	3,149,998	6631	34,229,996	873	34,992,000	004	8,440,848	0041	35,000,000	005	60,000,000	005	60,000,000	005	19,000,000	005	18,000,000	002	28,268,505	40Various	1,299,018	805	8,250,000	004	60,833,333	335	20,782,491	675	13,252,322	674	119,839,014	334	1,499,979	67
996,148,354 12
The statistical presentation of the dominion's financial position is completed with the submission of the balance sheet enumerating the assets and liabilities, estimated as of March 31, 1933. Total liabilities are shown at $2,990,315,000. After deducting from this
amount active assets made up of cash balances, specie reserve, income-producing and current assets, totalling $391,226,000, the resulting net debt is shown at $2,599,089,000. The statement is as follows:
Active Assets, March 31, 1933 (Estimated)
Cash, working capital advances and other current assets. . ..
Specie reserve	
Advances to banks under Finance Act	 , '' ''
Loans to provinces for housing	 $10,382,000
Loans to provinces, Relief Act, 1931	 38,034,000
Loans to foreign governments-
Greece	 6,525,000
Roumanra	 23,969,000
Loans to harbour commissioners-
Montreal	 58,003,000
Vancouver	 22,326,000
New Westminster	 245,000
Canadian National Railways	
Canadian Farm Loan Board	
Soldier and general land settlement	
Seed grain and relief advances	
Canadian government railways open and stores accounts Deferred debits-
Unamortized discount and commission on loans.. .
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The Budget-Mr. Rhodes
[Stage Direction]
Liabilities, March 31, 1933 (Estimated)
Dominion notes outstanding	
Bank circulation redemption fund	
Insurance and superannuation funds-
Government annuities	$
Insurance fund, civil service	
Insurance fund, returned soldiers	
Retirement fund	
Superannuation funds	
28.425.000
7.790.000
11.242.000
7.205.000
42.880.000
Trust funds-*
Indian funds	 13,500,000
Common school funds	 2,672,000
Contractors' securities deposits	 350,000
Other trust funds	 2,120,000
Contingent and special funds	
Post office money orders, postal notes, etc., outstanding
Province accounts	
Post Office Savings Bank deposits	
Funded debt-
Unmatured	 2,649,908,000
Matured but not presented for payment	 1,960,000
Interest coupons matured but not presented for payment.. ..
[Stage Direction]
Non-active Assets, March 31, 1933 (Estimated)
Canadian National Railways	
Canadian National Steamships	
Harbour commissioners-
Quebec	 $ 26,309,000
Chicoutimi	  2,950,000
Halifax	 8,616,000
Saint John	 11,752,000
Three Rivers	  2,762,000
Montreal south shore bridge	 1,099,000
Seed grain and relief advances	
Soldier and general land settlement	
Miscellaneous advances	
Capital accounts-
Canals	
Railways	
Public buildings, harbour and river improvements
Military property and stores	
Territorial accounts	
240.206.000
443.516.000
247.749.000 12,035,000
9,896,000
Railway accounts (old)	
Consolidated fund balance as at debit, March 31, 1933
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Net debt, March 31, 1933
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Estimated Revenues and Expenditures 1933-34
Based upon current rates of taxation the revenues for the next fiscal year are estimated at $287,230,000 made up as follows:
Taxation revenue:
Customs duties	$72,000,000
Excise duties	   38,000,000
Income tax	 40,000,000
Sales tax	  59,000,000
Manufacturers', stamp, importation and other special taxes	 26,655,000
Non-tax revenue:
Post office	
Interest on investments Other sources	
30.100.000
11.400.000
10.075.000
[Stage Direction]
Total
[Stage Direction]
The Budget-Mr. Rhodes
With revenues so reduced, it becomes incumbent on the government not only to propose measures which will add substantially to the present income, but also to put into effect every reasonable economy in the administrative cost of the public service. The estimates for the ordinary services of government in the fiscal year 1933-34 total §369,429,000, a figure which closely corresponds to the actual expenditure in the present fiscal year after taking into account the estimated increase in interest on public debt and pensions. The gap therefore between the revenues at the present yield and the estimated ordinary expenditures is $82,000,000.
Last year, attention was directed to the extent to which the government had endeavoured to meet existing conditions by reductions in the expenditures within its control. For the purpose of making comparisons, special expenditures for unemployment and farm relief and the railway deficit, are set aside, but all other expenditures on capital as well as ordinary account, are taken into consideration. These expenditures, controllable and uncontrollable together, have fallen from $427,009,000 in 1930-31 to $381,000,000 in the current fiscal year, a reduction of slightly over ten per cent. Opportunities for the reduction of expenses, however, are necessarily confined to the expenditures that are controllable, as opposed to those which are fixed and generally uncontrollable, of which the main items are debt charges, pensions, subsidies and ex-soldiers' care. The controllable expenditures in the present year have been $145,000,000 as compared with $208,000,000 in 1930-31, a decrease of $63,000,000 or thirty per cent. The estimates for next year indicate a further saving of about 3£ millions in this class of expenditure.
Under the urgent pressure of declining revenues, it is considered necessary that further substantial economies should be made. It is proposed therefore that the original allotments to departments of the votes for controllable services should, when supply is released in the new fiscal year, be so modified that ten per cent of the total, or approximately $14,000,000, will be withheld. This saving cannot be achieved) by a uniform deduction from all services. The percentage may be smaller in some and larger in others, but the object in view will be to so adjust expenditures that this further economy will be effected with the minimum disturbance to personnel and to essential public services.
It is perhaps hardly necessary to say that such a measure will entail not only the earnest cooperation of employees of the civil service, but also a measure of forbearance on the part of the public generally. Recently, the
Treasury Board appointed a committee of officials to review and report upon the cost of government printing and! stationery with a view to the formulation of regulations and procedure which would, with an effective cooperation from the civil service, as well as the public, result in substantial savings in that direction. There are other avenues for improved and economical administration which it will be necessary to explore.
In this connection, I may say that with respect to pensioners who are in the employ of the government and who are paid the salary of the position, action will be taken whereby the payment of pension will be suspended during the period of such employment. Where the full salary of the position is not paid, the pension payment may not exceed the amount of the difference between salary received and the established salary of the position. If the pension is greater than the salary, the employee shall elect either to be paid the pension and relinquish the position, or to retain the position and have the pension withheld during the period of such employment. This will be made applicable not only to the government service but also to boards or commissions whose activities are financed from the dominion treasury.
Not only in the government services, but also in the budgets of the railways and other bodies financed by the dominion, are we endeavouring to meet the exigencies of the day. Economies instituted by the Canadian National Railways in the course of the year 1932 will be fully reflected in the 1933 operations. Last week this house gave second reading to the legislation to make effective the recommendations of the Royal Commission on Railways and Transportation, under the provisions of which additional large savings should, in course of time, be attained. Mention may also be made of the proposed legislation relating to the administration and control of our national ports, based upon the report of Sir Alexander Gibb. The measures for coordination of administration and more effective control and supervision of capital expenditures, may be expected to afford further relief to the dominion treasury.
After making allowance for this estimated reduction of $14,000,000, ordinary expenditures will be approximately $68,000,000 in excess of revenues estimated on present rates and yield. Accordingly it is proposed to recommend measures which will, it is anticipated, produce at least $70,000,000 on the basis of present business conditions, leaving a surplus of $2,000,000. Even a slight improvement in price levels and the general volume of business would increase substantially the surplus to be applied agairst capital and
The Budget-Mr. Rhodes
[Stage Direction]
special expenditures. Capital expenditures for the coming year are estimated at $7,166,-
000.	It is difficult at this time to make a precise estimate of special expenditures, but an view of the practical completion of public "works projects for which commitments had ibcen made under the 1930 and 1931 relief acts, it is clear that the total should be substantially less than during the present fiscal year. Special expenditures and non-active advances will probably not exceed $35,000,000.
If business conditions do not improve, estimated revenues will not cover these special expenditures for unemployment relief nor the Canadian National Railways deficit, estimated at $47,941,000. It is nevertheless the considered view of the government that the reduction in expenditures for the ordinary public services outlined above, and the proposed increases in taxation represent as drastic a fiscal program as should be contemplated at the moment although further proposals with respect to the railway deficit are subject to review before the close of the session.
Income Tax
It is proposed to raise the rate of taxation on incomes of corporation and joint stock companies to 12i per cent, and to remove the exemption of $2,000 in respect of such incomes. Where a corporation files a consolidated return of its own income and the income of its subsidiaries, the rate of tax is to be 13i per cent. The surcharge of 5 per cent of the amount of tax otherwise payable in respect of corporation incomes in excess of $5,000 is to be absorbed into the new rate.
In respect of the tax on personal incomes, the statutory exemption, where heretofore $2,400 will be reduced to $2,000, and where heretofore $1,200 will be reduced to $1,000. The exemption for dependent children is to be lowered from $500 to $400. The exemption for parents, grandparents, brothers and sisters, is to be the actual amount expended up to a maximum of $400. The surcharge of 5 per cent in respect of personal incomes in excess of $5,000 will be continued.
A new schedule of rates will be inserted in the act applicable to all incomes in excess of the exemptions and allowances. The changes in the exemptions and in the rates of tax will apply to incomes of 1932. The following statement indicates the proposed increase in taxation in the case of a married person without dependents at various amounts of income:

Schedule Showing Taxes Payable on Certain Incomes under the present rates and under the proposed rates with an Exemption of $2,000 for Married Persons and $1,000 for Single Persons and commencing the first $1,000 of Taxable Income at 3%.
Married Person, No Dependent
Income	Present Tax	Proposed Tax	Increase$ cts.	$ cts.	$ cts.2,000	2,100	3 00	3 002,200	6 00	6 002,300	9 00	9 002,400	12 00	12 002,500	2 00	15 00	13 002,600	4 00	18 00	14 002,700	6 00	21 00	15 002,800	8 00	24 00	16 002,900	10 00	27 00	17 003,000	12 00	30 00	18 004,000	32 00	70 00	38 005,000	58 00	120 00	62 006,000	98 70	189 00	90 307,000	147 00	262 50	115 508,000	205 80	346 50	140 709,000	275 10	441 00	165 9010,000	354 90	546 00	191 1011,000	445 20	661 50	216 3012,000	546 00	787 50	241 5013,000	657 30	924 00	266 7014,000	779 10	1,071 00	291 9015,000	911 40	1,228 50	317 1016,000	1,054 20	1,396 50	342 3017,000	1,207 50	1,575 00	367 5018,000	1,371 30	1,764 00	392 7019,000	1,545 60	1,963 50	417 9020,000	1,730 40	2,173 50	443 1025,000	2,788 80	3,349 50	560 7030,000	3,918 60	4,588 50	669 9035,000	5,100 90	5,880 00	779 1040,000	6,335 70	7,224 00	888 3045,000	7,623 00	8,620 50	997 5050,000	8,962 80	10,069 50	1,106 7055,000	10,355 10	11,571 00	1,215 9060,000	11,799 90	13,125 00	1,325 1065,000	13,297 20	14,731 50	1,434 3070,000	14,847 00	16,390 50	1,543 5075,000	16,449 30	18,102 00	1,652 7080,000	18,104 10	19,866 00	1,761 9085,000	19,811 40	21,682 50	1,871 1090,000	21,571 20	23,551 50	1,980 3095,000	23,383 50	25,473 00	2,089 50100,000	25,248 30	27,447 00	2,198 70110,000	29,108 10	31,521 00	2,412 90120,000	33,072 90	35,700 00	2,627 10130,000	37,142 70	39,984 00	2,841 30140,000	41,317 50	44,373 00	3,055 50150,000	45,597 30	48,867 00	3,269 70175,000	56,597 10	60,396 00	3,798 90200,000	67,859 40	72,187 50	4,328 10225,000	79,384 20	84,241 50	4,857 30250,000	90,934 20	96,558 00	5,623 80275,000	102,721 50	109,137 00	6,415 50300,000	114,534 00	121,978 50	7,444 50325,000	126,583 80	135,082 50	8,498 70350,000	138,658 80	148,449 00	9,790 20375.000	150,971 10	162,078 00	11,106 90400,000	163,308 60	175,969 50	12,660 90450,000	188,4S3 40	204,298 50	15,815 10500,000	214,183 20	233,152 50	18,969 30600,000	266,658 00	291,931 50	25,273 50700,000	319,158 00	350,731 50	31,573 50800,000	371,658 00	409,531 50	37,873 50900,000	424,158 00	468,331 50	44,173 501.000,000	476,658 00	527,131 50	50,473 50
The Budget-Mr. Rhodes
It is felt that higher rates of taxation could not reasonably be imposed, bearing in mind not only the depleted incomes out of which the tax must be paid but also the fact that in some provinces the same incomes will be subjected to further levies for provincial and/ or municipal purposes.
In order to ensure that income from bearer coupons does not escape taxation, it is proposed that all bearer coupons must have attached thereto a duly completed ownership certificate disclosing certain necessary information with respect to the owner of such coupons. The ownership certificates attached to the coupons will be forwarded by the paying agents to the debtor corporations which will be required to segregate them and to file them with the commissioner of income tax under a covering form.
A tax of 5 per cent is to be imposed at the source on all interest or dividends paid by Canadian debtors to non-residents of Canada. In this connection I may remind you that the Dominion Income Tax Act contains a section providing for a credit to Canadian residents in respect of taxes paid abroad, provided that other countries grant reciprocal allowances. Similar provision is contained in the tax legislation of those countries in which there reside any considerable number of persons who would be affected by this new impost.
A tax of 5 per cent is also to be imposed at the source on all interest or dividends received by way of bearer coupons or cheques by Canadian residents where such coupons or cheques are payable, by Canadian debtors, optionally or otherwise in foreign currencies, and such coupons or cheques are cashed in a currency which is at a premium over par of Canadian funds.
The Income War Tax Act will also be subject to other amendments of a minor character, designed primarily to strengthen its administrative provisions.
Sales Tax
The sales tax will remain at 6 per cent as at present. Additional revenue will be derived from a limited adjustment of the exempt and partially exempt list, in the case of a number of articles not primary products which it is believed should, under present conditions, carry a proportionate share of the tax burden. The chief items to be taken from the exempt list are materials and non-permanent equipment entering into the manufacture of goods subject to the sales tax, fuel oil, molasses, corn syrup and sugar cane syrup, cleaned rice, sago and tapioca, certain other processed foodstuffs, and certain types of machinery and appliances.
All items included in schedule IV of the Special War Revenue Act, now taxable at 3 per cent, will be subject to tax at the full rate of 6 per cent, with the exception of articles manufactured or produced by the labour of the blind in institutions in Canada established for their care or under the control or direction of such institutions.
Excise Taxes
Special excise taxes will be levied on the following products at the rates specified; cosmetics and toilet preparations, 10 per cent on the duty paid value, when imported, or the manufacturer's sale price, when manufactured in Canada; automobile tires and tubes, 5 per cent on the duty paid value or the manufacturer's sale price; cigarette papers, in sheets, packaged or not, imported into or manufactured in Canada, 2 cents per hundred leaves; and cigarette tubes, imported into or manufactured in Canada, 5 cents per fifty tubes. In the two last-named cases the tax will be collected by requiring the importer or manufacturer to affix stamps to the packages of paper or tubes.
A special excise tax of 2 cents per pound will also be levied on all refined sugar imported into or refined in Canada. In announcing this tax, however, I call attention to the fact that the government has refrained from imposing any special excise tax on tea, coffee or other similar commodity of general consumption.
It is also proposed to levy an excise tax of 25 cents per gallon on unfermented wort and an excise tax of 50 cents per pound on malt syrup or malt syrup powder, extracts of malt, fluid or not, or any other malt product intended for the brewing of beer.
The provisions of the Special War Revenue Act exempting from the stamp tax, cheques, receipts to banks, money orders, travellers' cheques and post office money orders where such instruments are for an amount not exceeding $5 will be repealed, except in the case of creamery tickets or cheques. The stamp tax on postal notes will be raised from 1 to 3 cents. When matches are put up in books or packages containing less than twenty-one matches, excise tax will be payable at the rate of 3/20ths of one cent per package.
Other amendments to the Special War Revenue Act will include a provision exempting from the note circulation tax the notes of a Canadian chartered bank specially issued to circulate in any British colony or possession other than Canada, to the extent that they are subject to tax by or under the laws of such colony or possession.
The Budget-Mr. Rhodes
[Stage Direction]
Excise Duties
The excise duty on distilled spirits used in the manufacture of proprietary medicines, extracts, essences, perfumed spirits, and pharmaceutical preparations will be raised to $2.50 per proof gallon. An excise duty of $1 per proof gallon will also be imposed on spirits distilled from the juices of native fruits for use by registered wine manufacturers in fortifying native wines.
Customs Tariff
In the early stages of this session, in order to implement agreements entered into at the Imperial Economic conference, amendments were effected involving 260 items of our tariff schedules.
Recently, a tariff board was established. In these circumstances, it is deemed undesirable to propose, either in whole or in part, any major revision.
Certain amendments of a minor character, some 57 in number, are submitted. These may be sub-divided as follows:
Clarifications of wording	 21
Reductions under	all	tariffs	 15
Reductions under Rritish preferential
tariff	 3
Reductions under intermediate and
general tariffs	 12
Increases under intermediate and
general tariffs	 5
Increases under British preferential tariff	 1
The rates in our tariff schedules were made having in mind parity of exchange. Consequently when the pound sterling became depreciated, it was necessary to value it for purposes of special or dumping duty at $4.40, in order to offset in part the advantage which the British exporter obtained in our markets as a result of the depreciated pound. After careful examination, it is believed that under present conditions this valuation can be lowered with safety. I am therefore pleased to announce that, effective to-morrow, the value of the pound sterling for this purpose will be $4.25.
The government has given most careful consideration to the problems with which our agricultural and fishing interests are confronted in selling their products in countries with depreciated and fluctuating currencies. As a result it is proposed to establish a fund to be known as the agricultural stabilization fund.
From it there will be paid to exporters to the British market the difference between the price actually received and the pound sterling valued at $4.60. In other' words, to the ex-

tent that the pound sterling falls below $4.60 the difference will be made good from this fund.
This will apply to the following commodities: animals, meats (including bacon and hams), poultry, fresh fish, canned fish, tobacco, cheese, milk products, canned fruits, canned vegetables, maple products, eggs and honey.
The direct result of this policy will mean increased returns to producers, and it is believed that the indirect returns will be even greater. To-day the exporter has to insure himself against losses arising from fluctuations in currency, and this insurance can only be secured at the expense of the producer through the payment to him of the lowest possible price. With an assured fixed and certain cash return the exporter can afford to pay the producer the full value of his product. There remains the additional advantage that as exports are stimulated there would follow improved prices in the home market. Appropriate measures will be taken to give effect to this policy.
It is fully recognized that the additional measures of taxation will involve further sacrifices and the assumption of further burdens by individuals, commerce and industry. Four years of stress and strain resulting from a world depression of unparalleled magnitude cannot but make these burdens more difficult to bear. Nevertheless, it is of paramount importance that as to current expenditures at least we should live within our income. We cannot do less and preserve our national credit. Should that be impaired it would be found that the ultimate sacrifice involved in the effort to restore it would be many times greater.
It has been urged in many quarters that we should balance our budget to the extent of providing currently for the additional expenditures we must make to provide for deficits of the Canadian National Railways and for unemployment relief. Beyond question this would be the ideal course. But to attempt to pursue it under existing conditions would-in my judgment-not only place an unbearable burden upon the taxpayer of to-day, but would as well retard that recovery of business and industry which is essential to our future well-being.
With a slight improvement in business our present taxation will produce an expanding revenue sufficient to provide a margin beyond our current needs. Furthermore as conditions improve the drain upon the treasury for the national railways and unemployment relief will, at the same time, automatically diminish. With expanding revenue upon the one hand

The Budget-Mr. Rhodes
and lessening demands upon the other, we can approach gradually and in orderly manner that goal which we must determine to attain at the earliest possible moment, namely, to pay our way year by year, and contemplate a reduction rather than an increase in our national debt. Meantime it is not unreasonable to spread over a period of years the exceptional burden imposed upon us by the unusual severity of existing world conditions.
That conditions throughout the world are grave it would be idle to deny. That we have our own serious problems to solve is beyond question. At the same time we have no occasion to despair for the future, on the contrary I am of the firm belief that we can look forward with complete confidence to better and happier days. We still retain the same rich and varied resources, we are still blessed with those qualities of resourcefulness which are a heritage from our sturdy pioneer forbears. As we have overcome all obstacles which in the past have bestrewn our national path, so will we continue to overcome those which lie ahead.
Mr. Speaker, I beg to give notice that when we are in committee of ways and means I shall move the following resolutions:
Resolutions to Amend the Customs Tariff
1. Resolved, That the Customs Tariff, being chapter forty-four of the Revised Statutes of Canada, 1927, as amended by chapter thirty-nine of the Acts of 1929, chapter thirteen of the Acts of 1930, (first session), chapter three of the Acts of 1930 (second session), and chapter thirty of the Acts of 1931, be further amended by adding to Section six thereof the following subsection:-
(9) Notwithstanding the provisions of any other law, the Governor in Council may from time to time and as occasion requires order and direct, subject to such exceptions as may be made, what shall be the rate of exchange fixed for any currency in computing the value for duty of goods imported into Canada from any place or country the currency of which is depreciated, and in case a sum in Canadian currency less than the invoice value of the goods in the currency of the place or country of export, computed at the rate of exchange so ordered, be paid for the goods, the actual selling price of the goods to the importer shall be regarded as less than the fair market value of the goods when sold for home consumption, and the provisions of this Section shall apply and special or dumping duty shall apply equal
to the difference between the value of the invoice computed at the current rate of exchange or at the average current rate from time to time fixed by order of the Governor in Council, and the value of such invoice, computed at the rate of exchange for duty so ordered as aforesaid, or may be less than such difference as the Governor in Council may from time to time order and direct; and the Governor in Council may order and direct that in all cases of sales or consignments of goods imported into Canada, where the importer owns, controls or is interested in the business of the exporter, or the exporter owns, controls or is interested in the business of the importer, or the importer and exporter operate under a controlling or holding company, notwithstanding the expressed terms of the sale or consignment, the transaction shall be regarded as a sale and the actual selling price to the purchaser in Canada shall be taken to be the value of the goods in the currency of the place or country of export converted into Canadian currency at the current rate of exchange, or at the average current rate from time to time fixed by order of the Governor in Council, and shall be regarded as less than the fair market value of the goods when sold for home consumption and the provisions of this Section shall apply and special or dumping duty shall be deemed to apply equal to the difference between the value of the invoice computed at the current rate of exchange or at the average current rate from time to time fixed by order of the Governor in Council, and the value of such invoice computed at the rate of exchange for duty so ordered as aforesaid, or may be less than such difference as the Governor in Council may from time to time order and direct.
Any order in council made hereunder may be varied, extended or revoked at any time by the Governor in Council.
This subsection shall be deemed to have had effect from and after the first day of September, 1931.
2. Resolved, That Schedule A to the Customs Tariff, being chapter forty-four of the Revised Statutes of Canada, 1927, as amended by chapter seventeen of the Acts of 1928, chapter thirty-nine of the Acts of 1929, chapter thirteen of the Acts of 1930 (first Session), chapter three of the Acts of 1930 (second Session), chapter thirty of the Acts of 1931, chapter forty-one of the Acts of 1932, and chapter six of the Acts of 1932-33. be further amended by striking thereout tariff items 79, 99c, 101, 123a, 157a, 173, 194, 203a, 203b, 206a, 208. 208e, 208o, 209, 210e, 278. 315, 315a, 316. 327, 353, 366b, 385a. 409j, 409q, 417, 438b, 438d, 445c, 471, 475, 476a, 485, 520c, 568, 571, 682a, 756, 783, and 799, the several enumerations of goods respectively and several rates of duties of customs, if any, set opposite each of said items, and by inserting the following items, enumerations and rates of duty in said Schedule A:-

Tariff Item	-	British Preferential Tariff	Inter- mediate Tariff
79	Florist stock, viz.:-Azaleas, rhododendrons, pot-grown lilacs, rose stock and other stock for grafting, seedling carnation stock, araucarias, bulbs, corms,		
79c	tubers, rhizomes and dormant roots, n.o.p	
Seedling stock for grafting, viz.:-Plum, pear, peach	Free	15 p.c.99c	and other fruit trees	
Raisins and Dried Currants:-	Free	Free(i) Until July 31, 1934	per pound	Free	4 cts.(ii) Thereafter	per pound When in packages weighing two pounds each, or less, the weight of such packages to be included in the weight for duty.	Free	3 cts.101 101b	Oranges, n.o.p	per cubic foot Oranges, the produce of Palestine (when imported direct from the country of growth and production) during the months of January, February, March and April	Free	35 cts.123a 157a	Crabs, clams or shrimps in sealed containers	
Amyl alcohol or refined fusel oil, when imported by the Department of National Revenue or by a person licensed by the Minister, to be denatured for use in the manufacture of metal varnishes or lacquers, to be entered at ports prescribed by regulations of the Minister, subject to the Excise Act and to the regulations of the Department of National	17$ p.c.	40 p.c.173	Revenue	
Books and Cards, including playing cards, embossed or grooved, for the blind; and books for the instruction of the deaf, dumb or blind; maps and charts	Free	Free194	for the use of schools for the blind	
Playing cards, in packs or in sheet form, n.o.p.; cards and sheets partly lithographed or printed, for use in the manufacture of such playing cards, per pack	Free	Free203a	or equivalent Chemical compounds composed of two or more acids or salts soluble in water, adapted for dyeing or	5 cts.	7 cts.tanning	
Provided, that when such chemical compounds, are permitted Free entry into the United Kingdom, by license, under Section (2) of the Dye-	Free	10 p.c.Stuffs Act (1920) the rates of duty shall be	Free	FreeGeneral Tariff	Present Rates	B.P. Tariff	Int. Tariff	Gen. Tariff20 p.c.	Free	15 p.c.	20 p.c.Free	Free	15 p.c.	20 p.c.4 cts.	Free	4 cts.	4 cts.3 cts.	Free	3 cts.	3 cts.35 cts.	Free	35 cts.	35 cts.Free	35 cts.	35 cts.40 p.c.	17} p.c.	27} p.c.	30 p.c.Free	Free	25 cts.	25 cts.per gal.	Free	Free	Free	Free5 cts.	7 cts.	8 cts.8 cts.	5 cts.	7 cts.	8 cts.15 p.c.	22} p.c.	22} p.c.10 p.c.	Free	10 p.c.	10 p.c.Free	
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The Budget

Mr. Rhodes
203b
206a
208e
208o
208u
209d
210e
278d
315a
Aniline and coal tar dyes, soluble in water, in bulk or	Free
Provided, that when such dyes are permitted Free entry into the United Kingdom, by license, under Section (2) of the Dye-Stuffs Act (1920)	Free
Bacteriological products, or serum for sub-cutaneous	Free
Boracic acid and borax in packages of not less than twenty-five pounds weight; hydro-fluosilicic acid; tannic acid; ammonia, sulphate of; cyanide of potassium; cyanide of sodium and cyanogen bromide; antimony salts, viz.: tartar emetic, chloride and lactate (antimonine); arsenous oxide; precipitate of copper (crude); verdigris or sub-acetate of copper, dry; sulphur and brimstone, crude or in roll or flour; argols; iodine, crude; bromine; sulphide of	Free
Cresylic acid and compounds of cresylic acid, used in the process of concentrating ores, metals or minerals	Free Free
	Free
Xanthates, for use in the process of concentrating	Free
Potash, muriate and sulphate of, crude; saltpetre or	Free
Potash, chlorate of, not further prepared than ground.	Free Free
Nitrate of Soda or cubic nitre when imported for use as a fertilizer, or in the curing or pickling of meats, or when imported by manufacturers of explosives for use exclusively in their own factories in the	Free
Oils, viz.:-Cocoanut, palm and palm kernel, not edible, for manufacturing soap; carbolic or heavy	Free
Olive Oil for manufacturing soap or tobacco, or for	Free
Carbonsor carbon electrodes over three inches in circumference or outside measurement and not exceeding thirty-five inches in circumference or outside measurement; carbons of a class or kind not produced in Canada, when imported for use in the manufacture of dry batteries and dry cells	 Carbons or carbon electrodes exceeding thirty-five inches in circumference or outside measurement... Electric light and arc carbons, pointed or not, and	Free Free 22J p.c.
and					per pound	
10 p.c.	10 p.c.	Free	10 p.c.	10 p.c.
Free	Free			
Free	Free	Free	20 p.c.	20 p.c.Free	Free	Free	Free	Free15 p.c.	15 p.c.	Free	15 p.e.	15 p.c.10 p.c.	10 p.c.	Free	10 p.c.	lOp .c.Free	Free	Free	10 p.c.	10 p.c.Free	Free	Free	15 p.c.	15 p.c.Free	Free	Free	Free	FreeFree	Free	Free	Free	Free15 p.c.	20 p.c.	Free	Free	Free	Free	FreeFree	15 p.c.	20 p.c.10 p.c.	10 p.e.	Free	10 p.c.	10 p.c.Free	Free	Free	10 p.c.	10 p.c.Free	Free	Free	Free	Free20 p.c.	20 p.c.	Free	20 p.c.	20 p.c.32! p.c.	35 p.o.	22! p.c.	32| p.c.	35 p.c.20 cts.	20 cts.	
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The Budget-Mr. Rhodes

Tariff
Item
327a
353a
366b
Spectacles; eyeglasses, and ground or finished
spectacle or eyeglass lenses, n.o.p	
Contact eyeglasses or lenses, designed to be worn in direct contact with the human eye, under the
lid	
Aluminum and alloys thereof, crude or semi-fabricated, viz.:	Pigs, ingots, blocks, notch bars,
slabs, billets and blooms; bars, rods and wire; angles, channels, beams, tees and other rolled or drawn sections and shapes; pipes and tubes; plates, sheets and strips, including circles; leaf or foil, less than -005 inch in thickness, plain or embossed, with or without backing; wire and cable, twisted or stranded, reinforced with steel or not; aluminum
powder	
Aluminum scrap	
Provided, that nothing shall be deemed to be aluminum scrap except waste or refuse aluminum, fit only to be remelted.
Parts of watch movements, finished or unfinished...
385a
Provided, that when imported under the Intermediate or General Tariffs, the duty on plates designed to hold in place four or more wheels or other moving parts shall be not less than, per plate Sheets, plates, hoop, band or strip, of rust, acid or heat resisting steels, hot or cold rolled, polished or not, valued at not less than five cents per pound...
409j Fanning mills; peaviners; corn husking machines; threshing machine separators, including wind stackers, baggers and self-feeders therefor; complete parts of all the foregoing	
409q Complete parts for repairs, under regulations prescribed by the Minister:-
(i)	For the implements or machinery enumerated in tariff items 409c, 409e, 409f, 409g, 409j, 409o, 409p and 439c	
(ii)	For the implements or machinery enumerated in tariff item 409b	
(iii)	For the implements or machinery enumerated in tariff item 409d	
British Preferential Tariff	Inter- mediate Tariff	General Tariff	Present Rates	B.P. Tariff	Int. Tariff	Gen. Tariff20 p.c.	27J P-c.	30 p.c.	20 p.c.	275 P.c.	30 p.c.Free	Free	Free	20 p.c.	275 P.c.	30 p.c.Free	30 p.c.	30 p.c.	Free	30 p.c.	Free	Free	Free	Free	30 p.c.	30 p.c.Free	15 p.c.	15 p.c.	Free	15 p.c.	15 p.c.(Plates acc	ording to compone	nt materials)10 cts.	15 cts.	Free	20 p.c.	20 p.c.	Free	20 p.c.	20 p.c.75 p.c.	20 p.c.	20 p.c.Free	15 p.c.	25 p.c.	Free	15 p.c.	25 p.c.Free	10 p.c.	10 p.c.	Free	10 p.c.	10 p.c.Free	71 p.c.	75 p.c.	Free	75 p.c.	75 p.c.Free	6 p.c.	6 p.c.	Free	6 p.c.	6 p.c.
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The Budget-Mr. Rhodes
409r
428d
438b
43Sd
(iv)	For the implements or machinery enumerated in tariff items 409h and 409n	
(v)	For the implements or machinery enumerated in tariff item 409k	
Weighers for use as parts of threshing machine separators, and complete parts thereof	
Machinery and complete parts thereof, and structural iron and steel, of a class or kind not made in Canada, when imported for use exclusively in the construction or equipment of factories for the manufacture of sugar from beet-root, under regulations prescribed by the Minister	
Magnetos and complete parts thereof, when imported by manufacturers of internal combustion engines, for use exclusively in the manufacture of such internal combustion engines, in their own factories... Automobiles for conveying passengers only, n.o.p., valued at retail at place of production, when new, with standard equipment complete, at not more than twelve hundred dollars each; motor trucks with standard equipment (not for use on railways or tramways), not to include machines or other articles mounted thereon or attached thereto for purposes other than for loading or unloading the truck; chassis for motor vehicles specified in this
item	
Horns, distributors, instrument board lamps, oil gauges, gasoline gauges and parts thereof, thermostats, oil filters, carburetors, purifiers for oil, purifiers for air, lock washers, speedometers and parts thereof, vacuum tanks, fuel pumps and parts thereof, composite gaskets of metal and asbestos, steering wheels and rims therefor, one piece welded axle housings, machined or not, instrument bezel assemblies, dash heat indicators, electric ignition locks, steering gear locks, transmission locks, or combinations of such locks, and parts thereof, cylinder lock barrels and keys, bearing spring shackles and automatic radiator shutter assemblies, ammeters, radiator shells, body cowls, and body stampings of metal, including front, rear, side and door stampings, not further manufactured than welded or riveted for shipping purposes, all the foregoing being of a class or kind not made in Canada, when imported by manufacturers of goods enumerated in tariff items 438a, 438b, 438c, 438e and 438f, for use only as original equipment in the manufacture of motor vehicles enumerated in Tariff Items 438a, 438b, 438c and 438f	
Free
Free
Free
Free
Free
Free
Free
10 p.c. 17$ p.c 10 p.c.
Free
10 p.c.
17$ p.c
Free
15 p.c.	Free	10 p.c.	15 p.c.175 P-c.	Free	17J p.c.	17£ p.c.10 p.c.	Free	15 p.c.	25 p.c.Free	Free	Free	Free15 p.c.	15 p.c.	25 p.c.	30 p.c.20 p.c.	Free	17} p.c.	20 p.c.Free	Free	Free	Free15 p.c.	25 p.c.	27} p.c.15 p.c.	27} p.c.	35 p.c.
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The Budget-Mr. Rhodes

Tariff Item	-	British Preferential Tariff	Inter- mediate Tariff438h	Annular ball bearings and parts thereof, when imported for use in the manufacture of goods enumerated in tariff items 438a, 438b, 438c, 438e and 438f, for use only as original equipment in the manufacture of motor vehicles enumerated in tariff items 438a, 438b, 438c and 438f, under regulations prescribed by the Minister	Free	Free440n	Complete parts for repair of engines enumerated in tariff item 440m	Free	12J p.c.445c	(i) Electric telegraph apparatus and complete parts thereof	Free	25 p.c.(ii) Electric telephone apparatus and complete parts thereof	10 p.c.	25 p.c.445j	Electric dry shaving machines, of a class or kind not made in Canada, for use in removing human hair.	Free	10 p.c.464b	Steel die-blocks, of a class or kina not made in Canada, not less than forty-four degrees of hardness by scleroscopic test	Free	Free471	Belt pulleys of all kinds, n.o.p., for power transmission	15 p.c.	25 p.c.471a	Pressed steel belt pulleys, for power transmission-	Free	25 p.c.475	Stereotypes, electrotypes and celluloids of books, and bases and matrices and copper shells for the same, whether composed wholly or in part of metal or celluloid; positive and negative films of books..	Free	Free476a	Glassware and other scientific apparatus for laboratory work in public hospitals; surgical operating tables and complete parts thereof; apparatus for sterilizing purposes, including bedpan washers and sterilizers but not including washing or laundry machines; all for the use of any public hospital, under regulations prescribed by the Minister	Free	Free485	Metal caps, for use in the manufacture of electric batteries	Free	Free486	Artificial Larynx, for use in restoring speech	Free	Free520c	Linters of short fibres of cotton, bleached, and cotton pulp, when imported by manufacturers of paper, for use exclusively in their own factories in the manufacture of blotting or other grade of paper...	Free	10 p.c.General Tariff	Present Rates	B.P.	Int.	Gen.Tariff	Tariff	TariffFree	Free	Free	Free15 p.c.	10 p.c.	25 p.c.	27i p.c.30 p.c.	Free	25 p.c.	30 p.c.30 p.c.	Free	25 p.c.	30 p.c.10 p.c.	15 p.c.	27j p.c.	35 p.c.Free	15 p.c.	27$ p.c.	35 p.c.27J p.c.	15 p.c.	25 p.c.	27$ p.c.27j p.c.	15 p.c.	25 p.c.	27$ p.c.Free	Free	Free	Free15 p.c.	32f p.c.	40 p.c.Free	Free	Free	Free15 p.c.	27i p.c.	35 p.c.Free	Free	Free	Free15 p.c.	27i p.c.	35 p.c.Free	15 p.c.	27j p.c.	35 p.c.12§ p.c.	Free	22| p.c.	25 p.c.7$ p.c.	10 p.c.	12§ p.c.
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The Budget-Mr. Rhodes
522b
Yarns, wholly of cotton, coarser than number forty but exceeding number twenty, not more advanced than singles, when imported by manufacturers for use exclusively in their own factories in the manufacturing of cotton sewing thread and crochet, knitting, darning and embroidery cottons	
7$ p.c.
15 p.c.
523d
Woven fabric, wholly of cotton, imported for use as
billiard cloth	
and	per pound
Woven fabric, wholly of cotton, specially treated and glazed, when imported by rubber manufacturers for use in their own factories, exclusively as a detachable protective covering for uncured rubber sheeting	
Free
Free
27$ p.c. 3$ cts.
30 p.c.
571
Knitted garments, knitted underwear and knitted
goods, n.o.p	
and	per pound
Carpeting, rugs, mats and matting of straw, hemp, flax tow, jute or paper; carpet lining and stair pads..
25 p.c.
15 p.c.
35 p.c. 25 cts.
22$ p.c.
682a
Net floats of aluminum, glass or cork, of a class or kind not made in Canada, for use only in deep-sea or lake fishing, not to include floats for sportmen's use	
Free
Free
783
Artificial abrasive grains, crushed or ground , when
imported for use in Canadian manufactures	
Gasoline and steam engines, transmission assemblies and parts thereof, magnetos, starting motors, electric generators, propeller shafts, steel chassis frames, brakes, clutches, brake and clutch controls, steel road wheels, steel rims for pneumatic tires, larger than thirty inches by five inches, steering gears and front and rear axles, all of a class or kind not made in Canada, when imported by manufacturers of motor trucks with standard equipment (not for use on railways or tramways), not to include machines or other articles mounted thereon or attached thereto for purposes other than for loading or unloading the truck, for use only in the manufacture of such motor trucks	
Free
Free
Free
17$ p.c.
20 p.c.	121 p.c.	15 p.c.	221 P-c
			
2 eta.	31 cts.	4 cts.321 p.c.	221 p.c.	271 p.c.	321 p.c4 ots.	2 cts.	31 cts.	4 cts.35 p.c.	25 p.c.	30 p.c.	35 p.c.2 cts.	31 cts.	4 cts.45 p.c.	25 p.c.	25 p.c.	45 p.c.30 cts.	25 p.c.	15 p.c.	22£ p.c.	25 p.c.30 p.c.	35 p.c.	40 p.c.5 cts.	15 cts.	20 cts.Free	Free	Free	FreeFree	171 P-c.	20 p.c.Free	Free	Free	Free20 p.c.	Free	171 P-c.	20 p.c.
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The Budget-Mr. Rhodes
The Budget-Mr. Rhodes
[Stage Direction]
3.	Resolved, That Schedule B to the Customs	serting therein the following Item, enumeration
Tariff, being Chapter forty-four of the Revised	and rates of drawback of customs duties:-
Statutes of Canada, 1927, be amended by in-
Item No.	Goods	When Subject to Drawback	Portion of Duty (Not including special Duty or Dumping Duty) Payable as Drawback1063	Materials, including all parts	When used in the manufacture of engines	for use exclusively in the equipment of	aircraft	CO p.c.4.	Resolved, That Schedule C to the Customs	ing therefrom Item 1215 and by inserting inTariff, being Chapter forty-four of the Revised	said Schedule C the following Items:-
Statutes of Canada, 1927, be amended by delet-
1215	Used or second hand automobiles and motor vehicles of all kinds, manufactured prior to the
calendar year in which importation into Canada is sought to be made.
Provided, that this Item does not affect in any manner automobiles and motor vehicles,-
(a)	Imported under Tariff Items 702, 705a, 706, 707 or 708, or under tourists' or travellers' vehicle permits;
(b)	Imported by a bona fide settler on a first arrival but not entitled to entry free of duty under Tariff Item 705a;
(c)	Bona fide purchased on or before the first day of June, one thousand nine hundred and thirty-one, by consumers for their own use and not for resale;
(d)	Forfeited or confiscated for any offence under the Customs laws, or the laws of any province of Canada;
(e)	Left by bequest.
1216	Used or second-hand aeroplanes and aircraft of all kinds.
Provided, that this Item does not affect in any manner aeroplanes and aircraft,-
(a)	Imported under tariff Items 707 or 708, or engaged solely in international traffic, or brought in by non-resident tourists for temporary use under permit issued by the Department of National Revenue;
(b)	Bona fide purchased on or before the twenty-second day of March, one thousand nine hundred and thirty-three, by consumers for their own use and not for resale;
(c)	Forfeited or confiscated for any offence under the Customs laws, the Air Regulations or the laws of any province of Canada;
(d)	Imported by the Department of National Defence for military purposes.
5.	Resolved, That any enactment founded upon Resolutions 2, 3 and 4 of the foregoing Resolutions to amend the Customs Tariff or Schedules thereto, shall be deemed to have come into force on the twenty-second day of March, one thousand nine hundred and thirty-three, and to have applied to all goods mentioned in the foregoing Resolutions imported or taken out of warehouse on and after that date, and to have applied to goods previously imported for consumption for which no entry for consumption was made before that date.

[Stage Direction]
Resolved, That it is expedient to introduce a measure to amend the Excise Act, chapter sixty of the Revised Statutes of Canada, 1927, and to provide:-
1.	(i) That section one hundred and forty-nine of the said Act, as amended by chapter eight of the Statutes of 1932, be amended by providing that the rate of excise duties set out by the second paragraphs (a), (b) and (c) of the said section be fixed at two dollars and fifty cents per gallon of the strength of proof on spirits used in the manufacture of patent and proprietary medicines, extracts, essences, perfumed spirits, and pharmaceutical prepara-

tions manufactured in bond, instead of $2.40, $2.42 or $2.43 as set out in the said paragraphs: (ii) That said section one hundred and forty-nine be further amended by adding thereto the following subsection as subsection two thereof: "(2) There shall be imposed, levied and collected on all spirits distilled from the juices of native fruits for use exclusively by registered wine manufacturers under prescribed regulations, a special excise duty as follows:
On every gallon of the strength of proof by Sykes' hydrometer, one dollar and so in proportion for any greater or less strength than the strength of proof and for any less quantity than a gallon, and the said duty shall be payable by the registered wine manufacturer at the time such spirits are taken out of warehouse."
2.	That subsection two of section one hundred and fifty of the said Act be amended by repealing paragraphs (a), (b) and (c) thereof and substituting therefor the following:
"On every gallon of the strength of proof by Sykes' hydrometer, two dollars and fifty cents, and so in proportion for any greater or less strength than the strength of proof and for any less quantity than one gallon." thereby increasing to a flat rate of two dollars and fifty cents the duties already imposed at

The Budget-Mr. Rhodes
$2.40, $2.42 and $2.43 as the case may be on spirits nsed by licensed druggists in the manufacture or preparation of medicines, etc.
3.	That any enactment founded on the foregoing paragraphs of this Resolution shall be deemed to have come into effect on the twenty-second day of March, one thousand nine hundred and thirty-three, and to have applied to all goods taken out of warehouse for consumption on and after that date.

[Stage Direction]
Resolved, That it is expedient to amend The Special War Revenue Act, chapter one hundred and seventy-nine of the Revised Statutes of Canada, 1927, as amended by chapter fifty of the Statutes of 192S. chapter fifty-seven of the Statutes of 1929, chapter forty-three of the Statutes of 1930, chapter fifty-four of the Statutes of 1931 and chapter fifty-four of the Statutes of 1932, and to provide:
1. That section four of the said act be amended to provide that notes of a bank in circulation in any British colony or possession other than Canada, under the authority of section sixty-two of the Bank Act and in respect of which taxation is levied and payable by or under the laws of such colony or possession, shall be exempt from the taxation required to be made under sections three and four of the said Act, provided that if the tax imposed by or under such laws is less than the tax imposed under section three of the said Act the amount of such exemption shall not exceed the amount required to be paid by or under the laws of such colony or possession in respect of such notes.
2.	That the provisions exempting from the stamp tax cheques, receipts to banks, money orders, travellers' cheques and post office money orders, *where such instruments are for an amount not exceeding $5 be repealed, except in the case of cheques issued by butter or cheese factories to producers of milk or cream.
3.	That section seventy of the said Act, as enacted by chapter fifty-four of the Statutes of 1931, be amended by providing that the stamp tax on postal notes shall be at the rate of three cents.
4.	That section fifty-eight of the said Act, as enacted by chapter forty-three of the Statutes of 1930, be amended by adding thereto and making liable to the excise tax on sale, transfer or assignment of stocks, bonds, etc., the following:
"Any participating interest in the operations or profits of any association, company, or corporation, represented by certificates, documents, or other instruments of title capable of being sold, transferred or assigned, including mineral deeds, oil royalties, and fixed investment trust shares issued by a trustee and representing equitable ownership in deposited securities."
5.	That section seventy-six of the said act be amended by providing that when matches are put up in packages containing less than twenty-one matches each the tax shall be payable at the rate of three-twentieths of one cent per package instead of at the rate of three-sixteenths of one cent.
6.	That part X of the said act be amended by adding thereto the following as section 77 (a):
"77(a). Except as hereinafter provided, every manufacturer and every importer of cigarette papers in packets shall affix to every packet of cigarette papers manufactured by him or imported into Canada, an adhesive or other stamp of the value of 2 cents for each 100 leaves or fraction of 100 leaves contained in such packet.
2.	Except as hereinafter provided, every manufacturer and every importer of cigarette paper tubes shall affix to every package of cigarette paper tubes manufactured by him or imported by him into Canada, an adhesive or other stamp of the value of 5 cents for each 50 cigarette paper tubes or fraction of 50 cigarette paper tubes contained in such package.
3.	No manufacturer or importer shall sell or import cigarette papers or cigarette paper tubes unless they are in packets or packages.
4.	It shall not be necessary to affix an adhesive or other stamp to packets of cigarette papers or packages of cigarette paper tubes manufactured in Canada for export out of Canada when they are manufactured and exported under regulations made under the provisions of this act.
5.	When cigarette papers in packets or cigarette paper tubes in packages are imported into Canada, the adhesive or other stamp shall be affixed to the packets or packages while they are in the custody of the proper customs officers.
6.	The provision® of this section shall not apply to cigarette papers or cigarette paper tubes sold to, or manufactured by, or imported by, a manufacturer licensed to manufacture cigarettes, who employes such cigarette papers or cigarette paper tubes in the manufacture of cigarettes subject to the provisions of the Excise Act."
7.	That subsection two of section eighty-six of the said act be amended by adding thereto the following proviso:
"Provided that if a licensed wholesaler sells goods to another licensed wholesaler at a price less than the value upon which the tax is to be computed under paragraph (c) of the last preceding subsection, the vendor shall forthwith become liable to pay the tax upon the difference between such value and his sale price."
8.	That schedule I to the said act be amended by adding thereto the following articles and imposing thereon an excise tax at the rate set opposite the respective article:
(i)	Articles, materials or preparations of whatever composition or in whatever form, commonly or commercially known as toilet articles, preparations or cosmetics which are intended for use or application for toilet purposes, or for use in connection with the care of the human body, including the hair, nails, eyes, teeth or any other part or parts thereof, whether for cleansing, deodorizing, beautifying, preserving or restoring, and to include toilet soaps, antiseptics, bleaches, depilatories, perfumes, scents and similar preparations, 10 per cent.
(ii)	Tires of rubber, including inner tubes, for automotive vehicles of all kinds, including trailers or other wheeled attachments used in connection with any of the said vehicles, 5 per cent.
[Stage Direction]
The Budget-Mr. Rhodes
[Stage Direction]
9.	That schedule II to the said act be amended by adding thereto, the following articles and imposing thereon an excise tax at the rate set opposite the respective article:
. (i) Sugar, as enumerated in customs tariff item No. 134, 2 cents per pound.
(ii)	Unfermented wort (sweet wort), 25 cents per gallon.
(iii)	Malt syrup, or malt syrup powder, extracts of malt, fluid or wot, or any other malt product intended for the brewing of beer, 50 cents per pound.
10.	That schedule III to the said act, as enacted by chapter fifty-four of the statutes of 1932, be repealed and the following substituted as schedule III:
Schedule III
Bread, not to include rolls, buns or similar goods, whether sweetened or not; flour, not including self-raising flour; animals living; live poultry; meats and poultry, fresh; meats salted or smoked; milk, including buttermilk;, condensed milk, evaporated milk and powdered milk; cream; butter; cheese; lard, when produced in Canada; eggs; vegetables, fruits, grains and seeds in their natural state; shorts; bran and middlings when for use as cattle hog, poultry or other stock feed; alfalfa meal; oil cake, oil cake meal; grains mixed or crushed for cattle or poultry feed; hay; straw; hops, when produced in Canada; nursery stock; vegetable plants; other farm produce sold by the individual farmer of his own production; bees; honey; sugar; maple syrup; salt, when manufactured or produced in Canada; ice; fish and products thereof; ores of metals of all kinds; fuel other than in liquid form; gold and silver in ingots, blocks, bars, drops, sheets or plates unmanufactured; British and Canadian coin and foreign gold coin; logs and round unmanufactured timber; split fence posts: fence posts, railroad ties, pulpwood, tan bark, and other articles the product of the forest, when produced and sold by the individual settler or farmer; newspapers and quarterly, monthly, bimonthly and semi-monthly magazines and weekly literary papers unbound; materials for use only in the construction, equipment and repair of ships; ships licensed to engage in the Canadian coasting trade; radium; electricity; gas manufactured from coal, calcium carbide or oil for^ illuminating or heating purposes; artificial limbs, and parts thereof; artificial eyes; donations of clothing and books for charitable purposes; settlers' effects; War Veterans' badges; memorials or monuments erected in memory of soldiers who fell in the Great War; articles for the use of the Governor General; articles imported for the personal or official use of the British High Commissioner, Ministers of Foreign Countries, Consuls General who are natives or citizens of the country they represent and who are not engaged in any other business or profession; bibles, missals, prayer books, psalm and hymn books, religious tracts, and Sunday school lesson pictures; manila fibre for use only in the manufacture of rope not exceeding one and one-half inches in circumference for the fisheries; boats bona fide purchased by individual fishermen for their own personal use in the fisheries; articles and materials used in the manufacture of boats bona fide built for individual fishermen for their own personal use in the fisheries; sinkers and floats including trawl kegs, when for use exclusively in the I Mr. Ithodes.]
fisheries, not including these articles for sportsmen's purposes; fibre for use only in the manufacture of binder twine; fertilizers; dried beet pulp; manuscript; raw furs; wool not further prepared than washed; drain tiles for agricultural purposes; printed text-books authorized by the Department of Education of any province in Canada and phonograph records so authorized for instruction in the English and the French language, and materials used exclusively in the manufacture or production thereof; insulin; calf, cattle, hog, fox or poultry feed; preparations or chemicals sold for disinfecting, dipping or spraying and so used in agriculture or horticulture, and materials for use exclusively in manufacture or production of such preparations; cream separators and parts thereof: ears and other similar appliances for use exclusively at a mine or a quarry for mining or quarrying; articles and materials to Be used exclusively in the manufacture of cars and other similar appliances for use exclusively at a mine or a quarry for mining or quarrying: articles and materials to be used exclusively in the manufacture of cream separators and parts thereof; usual coverings to be used exclusively for covering goods not subject to the consumption or sales tax; materials to be used exclusively in the manufacture of usual coverings to be used for covering goods not subject to the consumption or sales tax.
Woollen rolls or -wool yarn milled for a producer of wool from such wool supplied by him for his own use; cotton duck and cotton sail twine to be used Only in the manufacture of equipment for ships or vessels; official stationery imported by His Majesty's Trade Commissioners in Canada from His Majesty's Stationery Office in England; crushed stone, produced or manufactured by any municipality exclusively for use in building or maintaining its roads or sidewalks, and not for sale, and sand, gravel, rubble and field stone; lasts for boots and shoes including rubber footwear and patterns and dies for boots and shoes including rubber footwear; apples, dried, desiccated or evaporated: articles and materials for the sole use of any bona fide public hospital certified to be such by the Department of National Health, when purchased in good faith for use exclusively by the said hospital and not for resale; preparations for use exclusively as gopher poison: bakers' cake and pies when produced by any one manufacturer or producer to the value of not more than three thousand dollars in any one calendar year.
Goods Enumerated in Customs Tariff Items
40. Salt for use of the sea or gulf fisheries;
173. Books, embossed, and grooved cards for the blind; and books for the instruction of the deaf and dumb and blind: maps and charts for the use of schools for the blind;
175. Books not printed or reprinted in Canada, which are included and used as text-books in the curriculum of any university college or school in Canada; books specially imported for the bona fide use of incorporated mechanic^ institutes, public libraries, libraries of universities, colleges and schools, or for the library of any incorporated medical, law, literary, scientific, or art association or society, and being the property of the organized authorities of such library, and not in any case the property of individuals-the whole under regulations prescribed by the Minister-provided that im-

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porters of books who have sold the same for the purpose mentioned in this item shall, upon proof of sale and delivery for such purpose, be entitled to a refund of any duty paid thereon;
209b. Nicotine sulphate;
281. Fire brick, containing toot less than ninety per cent of silica; magnesite fire brick or chrome fire brick: other fire brick valued at not less than one hundred dollars per one thousand, rectangular shaped, the dimensions of each not to exceed one hundred and twenty-five cubic inches, for use exclusively in the construction or repair of a furnace, kiln or other equipment of a manufacturing establishment;
281a. Fire brick, n.o.p., for use exclusively in the construction or repair of a furnace, kiln, or other equipment of a manufacturing establishment :
352a. Bells, when imported for use in churches only;
364. Diamond dust or bort and black diamonds, for borers;
406. Coil chain, coil chain links, including repair links, and chain shackles, of iron or steel;
409a. Milking machines and attachments therefor; centrifugal machines for testing but-terfat, milk or cream; complete parts of all the foregoing;
409b. Cultivators, harrows, seed-drills, horse-rakes, horse-hoes, scufflers, manure spreaders, garden seeders, weeders, and complete parts of all the foregoing;
409c. Ploughs; farm, field, lawn or garden rollers; soil packers; complete parts of all the foregoing;
409d. Mowing machines, harvesters, either self-binding or without binders, binding attachments, reapers, harvesters in combination with threshing machine separators including the motive power incorporated therein, and complete parts of all the foregoing;
409e. (i) Spraying and dusting machines and attachments therefor, including hand sprayers; apparatus specially designed for sterilizing bulbs; pressure testing apparatus for determining maturity of fruit; pruning hooks; pruning shears, animal dehorning instruments; and complete parts of all the foregoing;
(ii) Fruit and vegetable grading, washing and wiping machines and complete parts therefor;
409f. Hay loaders, hay tedders, potato planters, potato diggers, fodder or feed cutters, ensilage cutters, grain crushers and grain or hay grinders for farm purposes only, post hole diggers, snaths, stumping machines and all other agricultural implements or agricultural machinery, n.o.p., and complete parts of all the foregoing ;
409g. Incubators for hatching eggs, brooders for rearing young fowl, and complete parts of all the foregoing;
409d. Scythes, sickles or reaping hooks, hay or straw knives, edging knives, hoes, pronged forks, rakes, n.o.p.; complete parts for goods enumerated in Tariff Item 409i;
409j. Fanning mills; peavdners; corn husking machines; threshing machine separators, including wind stackers; baggers, weighers and selffeeders therefor; complete parts of all the foregoing;
409k. Windmills and complete parts thereof, not including shafting;
409n. Portable engines with boilers, in combination, for farm purposes; horse powers and traction engines foT farm purposes n.o.p.; and complete parts of all the foregoing;
410b. Machinery and apparatus for use exclusively in washing or dry cleaning coal at coal mines or coke plants; machinery and apparatus for use exclusively in producing coke and gas; machinery and apparatus for use exclusively in the distillation or recovery of products fro-m coal tar or gas; and complete parts of all the foregoing, not to include motive power, tanks for gas, nor pipes and valves 10J inches or less in diameter;
411. Machinery for use in sawing lumber, up to but not including the operation of planing, and complete parts thereof, not to include motive power, when for use exclusively in sawmills (for the purpose of this item motive power is defined as equipment for driving the machinery of the sawmill);
411a. Machinery, logging cars, cranes, blocks and tackle, wire rope, but not including wire rope to be used for guy ropes or in braking logs going down grade, and complete parts of all the foregoing, for use exclusively in the operation of logging, such operation to include the removal of the log from stump to skidway, log dump or common or other carrier;
_ 411b. Cylinder stave saws, wheel type stave jointers, crozing and champhering machinery, when for use exclusively in making staves;
439c. Farm wagons, farm sleds, logging wagons, logging sleds, and complete parts thereof;
440k. Engines and complete parts thereof, to be used exclusively in the propulsion of boats or in hoisting nets and lines used in such boats bona fide owned* by individual fishermen for their own use in the fisheries, under regulations prescribed by the Minister;
442. Articles which enter into the cost of manufacture of the goods enumerated in tariff items 409a, 409b, 409c, 409d, 409e, 409f, 409g, 409j, 409o, and 439e, when imported by manufacturers for use exclusively in the manufacture in their own factories of the goods enumerated in tariff items 409a, 409b, 409c, 409d, 409e, 409f, 409g, 409j, 409o, and 439c. under regulations prescribed by the Minister.
442a. Notwithstanding the provisions of tariff item 442. materials or commodities as hereunder defined or described, when imported by manufacturers for use exclusively in the manufacture, in their own factories, of the goods enumerated in tariff items 409a, 409b, 409c, 409d. 409e, 409f, 409g, 409j, 409o, and 439c, under regulations prescribed by the Minister:-[DOT]
(1)	Pig iron;
(2)	Bars or rods, of iron or steel, hot rolled;
460. Materials to be used in Canada for the
construction of bridges and tunnels crossing the boundary between the United States and Canada. when similar materials are admitted free under similar circumstances into the United States, under regulations prescribed by the Minister;
464. Steel dies, of a class or kind not made in Canada, valued at not less tham one thousand dollars each, for use exclusively in stamping metal sheets or metal plates; Provided that such dies shall be exported from Canada under Customs supervision within three months from the date of import entry;
476. Surgical and dental instruments of any material; surgical needles; X-ray apparatus; surgical operating tables for use in hospitals; microscopes valued at not less than $50 each by retail; and complete parts of all the foregoing;
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[Stage Direction]
476a. Glassware and other scientific apparatus for laboratory work in public hospitals; apparatus for sterilizing purposes, including bedpan washers and sterilizers but not including washing or laundry machines; all for the use of any public hospital, under regulations prescribed by the Minister;
480. Crutches or specially constructed staffs for cripples;
538. Binder twine or twine for harvest binders;
663b. Articles which enter into the cost of the manufacture of fertilizers, when imported for use exclusively in the manufacture of fertilizers;
666.	Nitro-glycerine, giant powder, nitro and other explosives;
667.	Blasting and mining powder;
682. Fish hooks, for deep-sea or lake fishing, not smaller in size than number 2.0; bank, cod, pollock and mackerel fish lines; and mackerel herring, salmon, seal, seine, mullet, net and trawl twine in hanks or coil, barked or not-in variety _ of sizes and threads-including gilling thread in balls, and head ropes for fishing nets; marline, and net norsels of cotton, hemp or flax; and fishing nets or seines, and manila rope, not exceeding one and one-half inches in circumference, when used exclusively for the fisheries, not to include hooks, lines, nets or ropes commonly used for sportsmen's purposes;
692. Coins, cabinets of; collections of medals and collections of postage stamps; medals of gold, silver or cooper, and oilier metallic articles actually bestowed as trophies or prizes and received and accepted as honorary distinctions, and cups or other metallic prizes (not usual merchantable commodities), won in bona fide competitions;
695a. Paintings in oil or water colours, and pastels, valued at not less than twenty dollars each; paintings and sculptures by artists domiciled in Canada but residing temporarily abroad tor purposes of study, under regulations by the Minister;
696. Philosophical and scientific apparatus, utensils, instruments, and preparations, including boxes a-nd bottles containing the same; maps, photographic reproductions, casts as models, _ etchings, lithographic prints or charts; mechanical equipment of a class or kind not made in Canada. All articles in this item, when specially imported in good faith for the use and by the order of any society or institution incorporated or established solely for religious, philosophical, educational, scientific or literary purposes, or for the encouragement of the fine arts, or for the use and by order of any public hospital, college, academy, school, or seminary of learning in Canada, and not for sale, under regulations prescribed by the Minister ;
700.	Animals and articles brought into Canada temporarily and for a period not exceeding three months, for the purpose of exhibition or of competition for prizes offered by any agricultural or other association; provided a bond shall be first given in accordance with regulations prescribed by the Minister, with the condition that the full duty to which such animals or _ articles would otherwise be liable shall be paid in case of their sale in Canada, or if not re-exported within the time specified in such bond;

701.	Menageries, horses, cattle, carriages and harness of, under regulations prescribed by the Minister;
702.	Carriages for travellers, and carriages laden with merchandise, not to include circus troupes or hawkers, under regulations prescribed by the Minister;
703.	Travellers' baggage, under regulations prescribed by the Minister;
704.	Apparel, wearing and other personal and household effects not merchandise, of British subjects dying abroad, but domiciled in Canada; books, pictures, family plate or furniture, personal effects and heirlooms left by bequest;
Articles and materials to be used exclusively in the manufacture of goods enumerated in customs tariff items: 281, 281a, 391a, 406a, 406b, 409a, 409b, 409c, 409d, 409e, 409f, 409g, 409i, 409j, 409k, 409n, 410b, 411, 411a, 411b, 439c. 440k, 442, 442a. 476, 476a, 480, 538, 663, 663a, 663b, 666, 667, 696.
Materials, not to include plant equipment, consumed in process of manufacture or production, which enter directly into the cost of goods enumerated in customs tariff items: 281, 281a, 391a, 406a, 406b, 409a, 409b, 409c, 409d, 409e, 409f, 409g, 409i, 409j, 409k, 409n, 410b, 411, 411a, 411b, 439c, 440k, 442a, 476, 476a, 480, 538, 663, 663a, 666, 667, 696.
11.	That Schedule IV to the said Act, as enacted by chapter fifty-four of the Statutes of 1932 enumerating articles exempt for fifty per cent of the sales tax, be repealed and the following substituted as Schedule IV:
Schedule IV
All articles manufactured or produced by the labour of the blind in institutions in Canada established for their care or under the control or direction of such institutions.
12.	That Schedule V to the said Act, as enacted by section sixteen and referred to in section twelve of chapter fifty-four of the Statutes of 1932, be repealed and the following substituted as Schedule V:
Schedule V
Articles on which other excise taxes are imposed on importation by Part XI of this Act; raw leaf tobacco when imported by licensed tobacco or cigar manufacturers; material for the manufacture of binder twine for export, when imported by the manufacturers thereof; British and Canadian coin and foreign gold coin, bullion and unmanufactured gold; fish and other products of the fisheries of Newfoundland; fish caught by fishermen in vessels registered in Canada or owned by any person domiciled in Canada, and the products thereof carried from the fisheries in such vessels; donations of clothing for charitable purposes; bibles; fertilizers; animals for the improvement of stock; boards, planks and deals of fir, spruce pine, hemlock or larch, in the rough, or not further manufactured than planed or dressed on one side, when imported from a country which admits free of duty similar lumber imported from Canada; goods enumerated in customs tariff items 173, 364, 460, 700, 702, 703, 704, 705, 705a, 706, 707, 708 and 709.
13.	That any enaetement founded on paragraphs five, six, seven, eight, nine, ten, eleven and twelve of this resolution shall be deemed to have come into force on the twenty-second day of March, one thousand nine hundred and thirty-three, and to have applied to all goods

The Budget-Mr. Rhodes
imported or taken out of warehouse for consumption on and after that date, and to have applied to goods previously imported for which no entry for consumption was made before that date.
14.	That any enactment founded on paragraphs two, three and four of this resolution shall be deemed to have come into force on the first day of May, one thousand nine hundred and thirty-three.

[Stage Direction]
Resolved, that it is expedient to amend the Income War Tax Act and to provide:-
1.	That the exemption granted to a married person or a widow or widower with a dependent child be reduced to $2,000 and the exemption for all other persons be reduced to $1,000;
2.	That the exemption heretofore afforded to householders as defined shall be abolished;
3.	That the exemption for a dependent child or grandchild be $400;
4.	That the exemption for a dependent parent, grandparent, brother or sister be the actual amount expended by a taxpayer up to a maximum exemption of $400 for each such dependent person;
5.	That the exemption of $2,000 heretofore afforded to corporations and joint stock companies be abolished;
6.	That the graduated rates of tax applicable to persons other than corporations and joint stock companies shall be the rates set forth in the following schedule;
7. That the rate of tax applicable to corporations shall be twelve and one-half per centum;
8.	That where a corporation elects to file a consolidated return, the corporate rate of tax shall be thirteen and one-half per centum;
9.	That the additional rate of tax heretofore provided in respect of incomes in excess of $5,000 shall not apply to corporations;
10.	That all bearer coupons, coupon certificates or dividend warrants issued by Canadian debtors in respect of which any interest or dividends are payable and all similar bearer coupons and dividend cheques issued by British or foreign debtors which are cashed by residents of Canada must have attached thereto a duly completed ownership certificate on the form prescribed;
11.	That a tax of five per centum shall be imposed at the source on all dividends or interest paid or credited by Canadian debtors to non-residents of Canada;
12.	That a tax of five per centum shall be imposed at the source on all dividends or interest payable by Canadian debtors and cashed by Canadian residents at a premium over par of Canadian funds;
13.	That rents and royalties which are payable by Canadian debtors to non-residents of Canada shall have deducted at the source a tax of twelve and one-half per centum subject to adjustment on assessment of the Income Tax Return filed by the non-resident.
14.	That provision be made to clarify and to render more certain and effective Section 13 of the said Act;
15.	That provision be made for the limitation of certain allowances and expenses charged by companies in respect to amounts paid to relatives of shareholders, bonuses to officers and fees to directors;
16.	That interest on indebtedness and taxes on productive property shall be rateably apportioned between income from sources exempt and those not exempt from Income Tax, provided that in no case shall such interest or taxes be apportioned against a taxpayer's income from his chief occupation or business;
17.	That any enactment founded on paragraphs one to nine, both inclusive, and paragraphs fifteen and sixteen, shall be deemed to have come into force at the commencement of the 1932 taxation period and to be applicable thereto and to fiscal periods ending therein, and to all subsequent periods;
18.	That	any	enactment	founded	on	the
provisions of paragraphs ten, eleven and twelve of this Resolution shall be deemed to have come into force on the first day of April, 1933, and shall be applicable to all payments made or received on or after such date and to any coupons, coupon certificates or dividend warrants which are redeemable on or after the said 1st April, 1933;
19.	That	any	enactment	founded	on	the
provisions of paragraph thirteen of this Resolution shall be deemed to have come into force on the 22nd day of March, 1933, and shall be applicable to all payments made on and after the said date.

[Stage Direction]
Rates of Tax Applicable to Persons other than Corporations and Joint Stock Companies
On the first $1,000 of Net Income or any portion thereof in excess of Exemptions 3 per centum, or
$30 upon Net Income of $1,000; and upon Net Income in excess of $1,000 and not in excess of $2,000, 4 per centum in addition on such excess, or
$70 upon Net Income of $2,000; and upon Net	Income	in	excess	of	$2,000	and	not	in
excess of $3,000, 5 per centum in addition on such excess, or
$120 upon Net Income of $3,000; and upon Net	Income	in	excess	of	$3,000	and	not	in
excess of $4,000, 6 per centum in addition on such excess, or
$180 upon Net Income of $4,000; and upon Net	Income	in	excess	of	$4,000	and	not	in
excess of $5,000, 7 per centum in addition on such excess, or
$250 upon Net Income of $5,000; and upon Net	Income	in	excess	of	$5,000	and	not	in
excess of $6,000, 8 per centum in addition on such excess, or
$330 upon Net Income of $6,000; and upon Net	Income	in	excess	of	$6,000	and	not	in
excess of $7,000, 9 per centum in addition on such excess, or
$420 upon Net Income of $7,000; and upon Net	Income	in	excess	of	$7,000	and	not	in
excess of $S,000, 10 per centum in addition on such excess, or
$520 upon Net Income of $8,000; and upon Net	Income	in	excess	of	$8,000	and	not	in
excess of $9,000, 11 per centum in addition on such excess, or
$630 upon Net Income of $9,000; and upon Net	Income	in	excess	of	$9,000	and	not	in
excess of $10,000, 12 per centum in addition on such excess, or
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$750 upon Net Income of $10,000; and upon Net Income in excess of $10,000 and not in excess of $11,000, 13 per centum in addition on *uch excess? or
$880 upon Net Income of $11,000; and upon Net Income in excess of $11,000 and not in excess of $12,000, 14 per centum in addition on *ueh excess, or
^$1,020 upon Net Income of $12,000; and upon Net Income in excess of $12,000 and not in excess of $13,000, 15 per centum in addition on such excess, or
$1,170 upon Net Income of $13,000; and upon Net Income in excess of $13,000 and not in excess of $14,000, 16 per centum in addition on such excess, or
$1,330 upon Net Income of $14,000; and upon Net Income in excess of $14,000 and not in excess of $15,000, 17 per centum in addition on such excess, or
$1,500 upon Net Income of $15,000; and upon Net Income in excess of $15,000 and not in excess of $16,000, 18 per centum in addition on such excess, or
$1,680 upon Net Income of $16,000; and upon Net Income in excess of $16,000 and not in excess of $17,000, 19 per centum in addition on such excess, or
$1,870 upon Net Income of $17,000; and upon Net Income in excess of $17,000 and not in excess of $18,000, 20 per centum in addition on such excess, or
$2,070 upon Net Income of $18,000; and upon Net Income in excess of $18,000 and not in excess of $19,000, 21 per centum in addition on such excess, or
$2,280 upon Net Income of $19,000; and upon Net Income in excess of $19,000 and not in excess of $20,000, 22 per centum in addition on such excess, or
$2,500 upon Net Income of $20,000; and upon Net Income in excess of $20,000 and not in excess of $25,000, 23 per centum in addition on such excess, or
$3,650 upon Net Income of $25,000; and upon Net Income in excess of $25,000 and not in excess of $30,000, 24 per centum in addition on such excess, or
$4,850 upon Net Income of $30,000; and upon Net Income in excess of $30,000 and not in excess of $35,000, 25 per centum in addition on such excess or
$6,100 upon Net Income of $35,000; and upon Net Income in excess of $35,000 and not in excess of $40,000, 26 per centum in addition on such excess, or
$7,400 upon Net Income of $40,000; and upon Net Income in excess of $40,000 and not in excess of $45,000, 27 per centum in addition on such excess, or
$8,750 upon Net Income of $45,000; and upon Net Income in excess of $45,000 and not in excess of $50,000, 28 per centum in addition on such excess, or
$10,150 upon Net Income of $50,000; and upon Net Income in excess of $50,000 and not in excess of $55,000, 29 per centum in addition on such excess, or
$11,600 upon Net Income of $55,000; and upon Net Income in excess of $55,000 and not in excess of $60,000, 30 per centum in addition on such excess, or
$13,100 upon Net Income of $60,000; and upon Net Income in excess of $60,000 and not in excess of $65,000, 31 per centum in addition on such excess, or
(Mr. Rhodes.]
$14,650 upon Net Income of $65,000; and upon Net Income in excess of $65,000 and not in excess of $70,000, 32 per centum in addition on such excess, or
$16,250 upon Net Income of $70,000; and upon Net Income in excess of $70,000 and not in excess of $75,000, 33 per centum in addition on such excess, or
$17,900 upon Net Income of $75,000; and upon Net Income in excess of $75,000 and not in excess of $80,000, 34 per centum in addition on such excess, or
$19,600 upon Net Income of $80,000; and upon Net Income in excess of $80,000 and not in excess of $85,000, 35 per centum in addition on such excess, or
$21,350 upon Net Income of $85,000; and upon Net Income in excess of $85,000 and not in excess of $90,000, 36 per centum in addition on such excess, or
$23,150 upon Net Income of $90,000; and upon Net Income in excess of $90,000 and not in excess of $95,000, 37 per centum in addition on such excess, or
$25,000 upon Net Income of $95,000; and upon Net Income in excess of $95,000 and not in excess of $100,000, 38 per centum in addition on such excess, or
$26,900 upon Net Income of $100,000; and upon Net Income in excess of $100,000 and not in excess of $110,000, 39 per centum in addition on such excess, or
$30,800 upon Net Income of $110,000; and upon Net Income in excess of $110,000 and not in excess of $120,000, 40 per centum in addition on such excess, or
$34,800 upon Net Income of $120,000; and upon Net Income in excess of $120,000 and not in excess of $130,000, 41 per centum in addition on such excess, or
$38,900 upon Net Income of $130,000; and upon Net Income in excess of $130,000 and not in excess of $140,000, 42 per centum in addition on such excess, or
$43,100 upon Net Income of $140,000; and upon Net Income in excess of $140,000 and not in excess of $150,000, 43 per centum in addition on such excess, or
$47,400 upon Net Income of $150,000; and upon Net Income in excess of $150,000 and not in excess of $175,000, 44 per centum in addition on such excess, or
$58,400 upon Net Income of $175,000; and upon Net Income in excess of $175,000 and not in excess of $200,000, 45 per centum in addition on such excess, or
$09,650 upon Net Income of $200,000; and upon Net Income in excess of $200,000 and not in excess of $225,000, 46 per centum in addition on such excess, or
$81,150 upon Net Income of $225,000; and upon Net Income in excess of $225,000 and not in excess of $250,000, 47 per centum in addition on such excess, or
$92,900 upon Net Income of $250,000; and upon Net Income in excess of $250,000 and not in excess of $275,000, 48 per centum in addition on such excess, or
$104,900 upon Net Income of $275,000; and upon Net Income in excess of $275,000 and not in excess of $300,000, 49 per centum in addition on such excess, or
$117,150 upon Net Income of $300,000; and upon Net Income in excess of $300,000 and not in excess of $325,000, 50 per centum in addition on such excess, or

Relief Act, 1933
$129,650 upon Net Income of $325,000; and upon Net Income in excess of $325,000 and not in excess of $350,000, 51 per centum in addition on such excess, or
$142,400 upon Net Income of $350,000; and upon Net Income in excess of $350,000 and not in excess of $375,000, 52 per centum in addition on such excess, or
$155,400 upon Net Income of $375,000; and upon Net Income in excess of $375,000 and not in excess of $400,000, 53 per centum in addition on such excess, or
$168,650 upon Net Income of $400,000; and upon Net Income in excess of $400,000 and not in excess of $450,000, 54 per centum in addition on such excess, or
$195,650 upon Net Income of $450,000; and upon Net Income in excess of $450,000 and not in excess of $500,000, 55 per centum in addition on such excess, or
$223,150 upon Net Income of $500,000; and upon Net Income in excess of $500,000, 56 per centum in addition on such excess.
On motion of Mr. Ralston, the debate was adjourned.


[Stage Direction]
The house resumed from Monday, March 20, consideration in committee of the following proposed resolution-Mr. Gordon. Mr. Hanson (York-Sunbury) in the chair;
Resolved, that it is expedient to introduce a measure to continue in force the provisions of the Relief Act, 1932, until the 31st of March, 1934.
The CHAIRMAN (Mr. Hanson, York-Sunbury) :: The debate is on the second amendment. Shall the amendment carry?


Mr. BENNETT:: The amendments are all
carried.


Mr. LAPOINTE:: What is the nature of
the second amendment?


Mr. MACKENZIE KING:: The minister
was to give as some information which would enable us to form an idea as to the basis, if any, on which he was estimating the amounts that would be necessary for the next year. Can he tell us what was paid out to assist in defraying the cost of the sale and distribution of products of field, farm, sea, river and mine during the last year under this act?


Mr. GORDON:: The only direct payment
was the sum of S3,000 for the fitting up of one of the ships for the cattle trade, I believe.


William Lyon Mackenzie King: From the statement which has just been made by the Minister of Finance it is evidently intended that certain payments shall be made which will facilitate the export of cattle and the like from this country. Is the money for that purpose to come out of the relief fund?


George Gordon: I assume it would. The
act makes provision for the payment out of the consolidated revenue fund of such sums as may be expediently paid for that purpose.


William Lyon Mackenzie King: It seems to me that is confusing the issue very much-The resolution before us is for the relief of unetaployment. Surely the minister cannot justify paying out of funds voted for relief purposes moneys to assist producers in the export of their produce, using moneys intended to relieve the unemployed to bonus those who have employment.
At the moment I do not take any exception to money being used to assist in the export of live stock and products of different kinds, but I do take exception to this parliament voting money for relief which is to be used for the purpose of subsidizing producers or exporters.


George Gordon: Of course the act places a limitation on the amount to be devoted to direct relief and as hon. members know, what is meant by direct relief is set out in the regulations. The act also makes provision in terms for the use of some money for other purposes as occasion may arise, and one of those purposes is that which the right hon. gentleman has just mentioned. I think it is well understood that the act contemplates that if money can be usefully employed in that way it should be so employed.


William Lyon Mackenzie King: In his remarks the Minister of Finance clearly indicated that there were to be certain expenditures on account of relief. In addition he spoke of expenditures for other purposes, one of them being to subsidize-I think we might call it that-producers who are exporting certain commodities to Great Britain. I do think, if such is the case, that the house should vote these amounts separately; it ought to know what it is voting in exact terms. If these amounts in the nature of subsidies are to be paid, I do not think that should be done under the guise of unemployment relief; they should be voted distinctly for the purpose of furthering production and the export of certain commodifies from this country to Great Britain.


Richard Bedford Bennett: If the right hon. gentleman will observe, the power to assist agricultural development has been contained in the relief bills for the last two years. This provision in the present bill will be made use of as indicated by the Minister of Finance in the statement he just made; that is, whatever amount may be involved will be a charge under this measure, just as it would have been last year if such payments had been made.
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William Lyon Mackenzie King: I think the Prime Minister sees what will follow as a result; we will be told that trade with Great Britain in these products has increased as a result of the United Kingdom^Canada agreement, while as a matter of fact if that trade does increase it will be because we have voted for the relief of unemployment money which is being used to subsidize the export of certain commodities to Britain. To me that does not seem a fair way to deal with the appropriations which this house is asked to make. I would ask the minister if there are any other objects or services, for which the Minister of Finance has indicated provision is to be made, payment for which will come out of money we are now voting for relief purposes.


George Gordon: I know of no others at the present time, but I can easily understand that occasions might arise when the provisions of this act might be resorted to for other purposes, and I think very properly so.


Mr. SPEAKMAN:: This information may have been given, but if so I did not catch it. I should like to ask the minister just how much was expended last year on that kind of direct relief which is covered now by the $20,000,000 limitation.


George Gordon: The expenditure this year which I estimate will not be more than $20,000,000 covers all that sort of relief that was given during this fiscal year.


Alfred Speakman: That is hardly the information I wanted. How much was expended last year on that sort of direct relief which will be covered this year by this $20,000,000?


George Gordon: Nothing was paid out this year except money for direct relief, and the amount actually paid out in that way up to February 28, 1933, amounted to $11,898,291.76. There are other commitments which will come in and which will be shown in the report which will be tabled under the act. As my hon. friend understands, sometimes the accounts are delayed; in fact quite recently we paid small accounts coming in under the 1930 legislation. However, that is substantially the position.


Alfred Speakman: I wanted to ascertain whether the limitation of $20,000,000 inserted in the act this year will prove adequate as compared with the expenditures of last year for the same purposes. I understand that we did not spend $20,000,000 last year on direct relief.


George Gordon: I estimate, and I am certain that I am right, that the $20,000,000 named in the present legislation will be sufficient to take care of direct relief for the coming year. Last year, of course, the amount was greater, but with better organization, a better system, and I think with some improvement in general conditions-it is slow but I think it is noticeable-I believe the expenditure will be cut down.


Mr. HEAPS:: If this amount of $20,000,000 is not sufficient to cover the cost of relief what course of action will be open to the government?


George Gordon: I do not think that difficulty will arise, but unquestionably if it does present itself it will come about when parliament is in session, and the government can apply to the house for assistance.


Mr. REID:: I wonder if the minister has the information at hand with regard to the number of families that have been put on the land in British Columbia, and if he could say where they have been located.


George Gordon: I believe the government of British Columbia have placed a small number-probably less than one hundred-of families on the land under their agreement. I am not disappointed, however, because it is essential that a rigid selection be made if any permanent colonization is to result. The actual number has not been reported to us by the province of British Columbia as yet.


Mr. SPENCER:: I should like to ask the minister a question with regard to the unemployed who are placed on the land. Is the land selected iby the federal government or by the provincial government? What sort of land is it? Is the land improved; is it government land, or is it land that has been abandoned by other people? Could the minister give us some particulars along this line?


George Gordon: Committees are set up in each province of Canada to deal with the matters to which the hon. gentleman has referred. It is obvious that the purchase of land must be discouraged. In many municipalities throughout Canada there are abandoned farms belonging to those municipalities, and generally we have found the municipal authorities anxious to cooperate in placing these farms at the disposal of the various committees. The purchase of farms is discouraged for the reasons I indicated last night and during the course of the debate a week or so ago; families starting on the land have

very little hope of paying a large purchase price for their farms. I am of course not a farmer, as is no doubt obvious to most of the farmer members of the house, but it is quite apparent that one of the outstanding causes of so many failures is the fact that people go on land with a burden of debt which in too many cases spells their ultimate disaster. Therefore the attention and the efforts of the committees throughout Canada are directed towards placing these people on lands which have fallen to and are now owned by the municipalities, and in a larger measure upon crown lands owned by the provinces, the purchase price of which is practically negligible.


Henry Elvins Spencer: Will these people be on
a rental basis in relation to the municipalities?


George Gordon: No; that has not been the experience of the committees. The municipalities in some instances donate land without reference to arrears of taxes; and with respect to crown lands, although I have not the exact details, I do know that the purchase price in Ontario-and I believe it is about the same if not more favourable in Quebec-is 50 cents an acre, and the lOoatee has ample time in which to pay. In fact, it is spread over five or six years.


Henry Elvins Spencer: Is any of the money
given by the government allowed to be used in part payment or as a down payment?


George Gordon: None of the money which the Dominion government subscribes is permitted to be used as a down payment on land. In fact, the committees throughout the country have insisted that none of the $600 subscribed through the three-way agreement shall be used for that purpose. The agreement with the various provinces provides that. The whole of the $600, which is given in progressive payments 'to the locatee, is therefore devoted to establishing him on the land on which he is located.


Henry Elvins Spencer: If men who have been
farming for years have found it necessary to throw up their lands because they cannot make a success, does the minister think that men who do not know as much about agriculture, and who are under-financed can possibly be successful on land so poor that it has a value of only fifty cents an acre? As one who has hod a great deal of experience in agriculture, I cannot see how these people can have the ghost of a chance under the circumstances.
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Mr. DONNELLY:: With regard to the
seventy municipalities that suffered three crop failures, I understand that one hundred per cent of the relief was given by this government; that is to say, this government furnished these people with their seed grain and so forth and feed for horses and cattle, and all the moneys for this purpose were put up by the dominion and not by the province. Am I correct in that assumption?


George Gordon: The money for seed grain
in the dried out areas to which the hon. member refers was not paid in that sense by this government. That was a loan to the province of Saskatchewan. In these municipalities, which I believe number eighty-four, one hundred per cent of the relief that was given to the people in that area was paid by the Dominion government.


James J. Donnelly: When the minister says that one hundred per cent of the relief was paid by the Dominion government, does he mean only groceries and clothing, or groceries, clothing and feed for cattle and horses as well?


George Gordon: Yes, it includes everything.


James J. Donnelly: We listened last night
to two members from the province of Saskatchewan saying that the reason for the difficulties in Saskatchewan was the fact that the province had to look after these people in the dried out areas, and these hon. members pretended that the province of Saskatchewan had fed the people.


George Gordon: I did not hear any member say that.


James J. Donnelly: They said that the province of Saskatchewan was in a serious situation because they had had to take care of these people in the dried out areas where there had been crop failures. Personally, I understood, precisely what the minister says now, that the money had been put up by this government and not by the government of Saskatchewan, and there is no reason why the financial condition of the province should be ascribed to these crop failures, seeing that the money was put up by this government. What I have objected to and still object to, however, is that though we are putting up one hundred per cent of the money we have nothing whatever to do with the administration of it. The administration of the money is entirely in the hands of the province, as I understand it, and during the first two years of such administration we saw men running up and down the country handling relief and
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drawing salaries equal to what they were handing out in the way of relief for groceries. The salaries of these supervisors in each municipality, taking all their expenses into account -the supervisor would drive from town to town and village to village, charging so much for each trip-amounted to as much as was handed out in the way of relief for groceries. Taking the administration of the system as a whole, the amount handed out in this dried out area looks small, but a large amount was for seed and for feed for the cattle and horses, and that required very little supervision in its distribution. But so far as the groceries were concerned, most of the expense was incurred in connection with supervision and the handing out of supplies. This year I am pleased to see that they have taken it out of the hands of these men and put in back where it was before, in the hands of the municipal officers, who are handling it for nothing.
The only objection we have to-day to the handling of relief in these districts is that the people in the dried out area, where there has been no crop for four years, have not been receiving enough money for clothing. I urge upon the minister the importance of furnishing both bedding and clothing. These people have had no crop for four years, and a man with a family of four or five cannot do very much with fifty dollars a year. When he is given fifty dollars a year for the purchase of clothing and bedding and everything else for his family, you can readily understand that some members of his family must suffer. I have come across families some of whose little ones have been unable to go to school because they had no clothing, and some of the women have told me that they were obliged to keep fires on all night because there was not enough bedding to keep the children warm-and this, not in one or two cases but in many instances. The children were unable to go to school because they had no clothing. Again I urge upon the minister the necessity of handing out more money for clothing in these districts. During the first year or two of the present calamity a great many people in eastern Canada sent out a lot of secondhand clothing, but there has not been so much in the last year or so. Apparently they are weary in welldoing and are not sending the same quantity of clothing as before, so that it is imperative that the government should look after these people and see that they are better provided for than in the past.


Mr. GERSHAW:: Could the minister inform the committee what period elapses between the time that a particular municipality pays out money and the time it receives the

government's share? In the usual course of events, a municipality pays one-third of the cost of relief and many municipalities are having great difficulty in financing because of the time which must elapse before they receive the government's one-third.


George Gordon: About ten days elapse
after the receipt of accounts before the cheques are forwarded to the municipality or the province.


Mr. BOUCHARD:: Yesterday the minister seemed to be in fine form when speaking of the back to the land movement. He stated that almost 100,000 people had been induced, directed, guided and inspired to go back to the land. Apparently this made such an impression upon the members of the committee that I thought that most of them would go back to the land immediately. I was surprised to-day to find that they were still present in the chamber.


George Gordon: I am afraid that they
would not make good.


Joseph Georges Bouchard: This afternoon the
minister told the committee that he was not a farmer himself. I am not surprised that he speaks with such enthusiasm of the back to the land movement because it is a matter of experience that those who speak most about a thing are those who know least about it. Apparently this is another make-believe policy and is similar to many other measures introduced by this government. We all know from experience how we try to induce the electors to vote for us and we are generally quite satisfied when we succeed in getting a majority to do so. Does the minister intend that the people shall be led to believe that nearly 100,000 people have been induced, directed, guided and inspired to go back to the land? I should like to know just how many have been established upon the land. I am entirely in agreement with what little good may come out of a back to the land movement but I do not think the government should try to induce the country to believe that so much good has come out of this movement. The best settlers on the land are those who are not given a chance to settle, the sons of farmers. These men cannot obtain any advantage from this scheme. Despite what has been said by the hon. member for Temiscouata (Mr. Pouliot), I contend that the best scheme to be followed in this regard is that one introduced a few years ago by the Minister of Colonization of the province of Quebec. That province gives a premium of $24 to any settler for every acre of

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land he opens 'Up. This is a real scheme and it offers a cure for the situation which confronts us. Perhaps the minister may not agree with me, but I would characterize this back to the land movement as a public confession by the government, as an expatiatory formula, as an admission of carelessness in the past, as a demonstration of the use of two pounds of cure where one ounce of prevention would have brought about the same result. I do not want to be too critical of the minister because I welcome any effort which is made in this connection. However, I do not think the country should be misinformed about the facts and told that 100,000 people have been induced, directed, guided and inspired to go back to the 'land. In effect, the minister is stating that he has induced one-eighth of our unemployed to settle upon the land. I should like to know just how many people have been settled upon the land, how many have stayed and how many are likely to remain permanently.


George Gordon: Mr. Chairman, a short
time ago the hon. member for Battle River (Mr. Spencer) asked me if I thought it possible that a man could take up a farm location and sustain himself with only $600 in cash. From what the hon. member said, I take it that he has had much experience in colonization. I have seen one of the finest agricultural sections of Canada opened up, I refer to Timiskaming. When I went to that section of the country there were only a few small locations opened up. The settlers who came there had no money and prices were extremely low. If the hon. member for North Timiskaming (Mr. Bradette) were in his seat, I think he would agree with me when I say that probably there is not a finer section of settled agricultural land in Canada than the hundreds of miles to be found in our ridings. These men went in there when there was nothing but spruce trees upon the land; they had no money but to-day they own their farms. It is to their everlasting credit that I have received but few communications from them asking for any kind of relief. The population is about evenly divided between French and English speaking settlers, and I think I should comment upon how splendidly these people get along together. Anyone who started anything in the way of racial strife in that part of the country would not get very far. These people have confidence in each other and they are getting along as the two races should get along. They went into that country when it was solid spruce bush, when there were no pulpmills to which to sell their wood. In the first few years they did have
difficult times but to-day the great majority of the settlers own their beautiful farms without one cent of encumbrance against them. They did not have 8600 given to them. Their products were very low at the time they went in there, but they have made a success.
I take issue with the hon. member for Battle River with respect to the province of Quebec because the province of Quebec probably above all other provinces in Canada has for centuries devoted itself to the expansion of sound colonization within its boundaries, and in fact has extended its colonization schemes beyond its own boundaries into other provinces.
I am not in agreement with what the hon. member for Temiscouata has said with respect to colonization in the province of Quebec, and I had not intended to refer to it because I do not think I am charged with the responsibility of settling a scrap between the hon. member for Temiscouata and the Minister of Colonization, Hon. Mr. Laferte, in the province of Quebec, but I do say this, that in the county of Temiscouata, of the total number of settlers who were placed there, only two were placed under this scheme. Mainly the settlers that we have assisted to place on the land through the organization of the province of Quebec are in Abitibi and Timiskaming. When the 'hon. member for Temiscouata says that men, women and children, were hived there in sheds, and eating grass and roots and all that sort of thing, I do not know that he was speaking seriously; I cannot help but think that he was a little facetious. The fact is that under our colonization scheme the men folks went up into that country first, and they went there in charge of officers who are acquainted with that sort of work, and those officers stayed there until the men got their houses built and a little clearing made, and it was not until long afterwards that the men's families came along. I have had not only one but hundreds of communications sent to me by the railway committee upon which we have representation indicating the success of that scheme. At no time were any of these people housed together in the way the hon. member for Temiscouata has suggested.
In the riding of Temiscouata, where the settlers were placed by the provincial government alone, an effort was made some years ago, I am informed, to flood that land under some conservation of water scheme, and at that time-I may be misinformed-I was told that the hon. member for Temiscouata was in favour of colonization there. But now he has changed his viewpoint and claims that that effort by the provincial government should
Relief Act, 1933

not have been undertaken. But these are all provincial matters which have nothing whatever to do with the joint effort of the municipality, the province and the dominion.
I have a detailed report, which I have not by me at the moment, from the colonization agent of the Canadian National Railways with respect to the settlement that has taken place in Abitibi and Timiskaming, in the province of Quebec, not in Ontario. I know that country very well, as well, in fact, as I know the country across the interprovincial boundary line where I live. I know that those people are located close to the railway; I know that they have passable roads built already; I know that good judgment was used by everyone concerned, both by our representative on the committee and the representative of the province of Quebec, to see that the locations were arable crown lands which were adjacent to and had the benefit of that best of all markets, the immediate home market in the rapidly expanding mining sections of Quebec. I wonder if members of this house realize what is going on in mining up in that section of the province of Quebec. Those mines have lain there longer than I would care to calculate. They were opened up only in 1923 as a result of prospecting by prospectors from the towns of Haileybury, Cobalt and New Liskeard, and they located what is now that wonderful mine, the Noranda. That inspired other prospectors to come in, until to-day in the northwestern part of the province of Quebec I hazard the opinion that there is not a finer mining camp on this continent, and of necessity it provides an immediate market for those who go on the land. So I say that the joint committee of the railways, ourselves, and the province of Quebec, should be commended for that effort. Whether we are commended or not we have evidence now of the success of at least that portion of the effort that we are putting forward to endeavour to locate upon the land those people who are suited to taking up farm locations and becoming farm owners with a view to placing themselves in a position of independence so far as their immediate needs are concerned. That generally has been the policy that we have been projecting.
I know how easy it is, by reason of my experience with those pioneers who went into the northern part of Canada, for a man to become discouraged. That all too frequently happens, but I say this, that we are at least devoting our effort towards giving Canadians in Canada, regardless of their race and political affiliations, a chance to become owners of that part of the national assets of Canada.

We must do it of necessity if we are going to support the services that have been projected, particularly railways. That necessitates turning a lot of our vacant spaces into production.
It may be asked, what is the use of doing it with price levels so low? Well, a few years is only a short space in the life of a country, and I think it will be only a short time before that condition disappears. If our own people do not accept the opportunity that I believe we are giving them-and it must be remembered that we have restricted immigration into this country for the purpose amongst others of giving our own people the first chance-in devoting any money we have towards the assistance of colonization by Canadians within Canada, but if our own people do not see the force of taking advantage of this opportunity, then I say that if we must have people we shall perhaps have to turn once more to seek new people from other lands. Bear this in mind, that at no time have there ever been any restrictions placed by this government on British people coming to Canada. That has never been done. But the movement is a slow one. Often we find that people even from Britain come out here for the purpose of colonization who are not suited. The selection was not made of them over there, and there have been disappointments. So far as the continent of Europe is concerned, it is well known that governments on the continent and many private agencies have devoted their energies towards moving the populations of Europe. Some of those countries are crowded, of course, and they are looking for an outlet wherever possible. It is equally true that no country likes to get rid of its best, and therefore it is essential that we exercise that degree of discrimination which is likely to result in contracting the migrations of peoples and result in the bringing to this country, so far as is humanly possible, those who are likely to be easily assimilated into our national life and become proper and useful citizens of this country. Shortly, that is my conception of the immigration policy which should be pursued. True, it is slow; it is not as colourful as the plan which has been followed in the past, but in my judgment it is the policy which will ultimately be found to be sound. Because, in my view, the greatness of a nation must be measured not merely by the number of people within its borders, but by the spirit and character of those people. That is the true measure of the strength of a nation.
In short, that is the policy this government is pursuing. While I do not expect we will attain one hundred per cent success in the movement, so far as I am personally concerned

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I shall at least have the satisfaction of knowing that we have given our people at home a chance to take advantage of an opportunity and to become the owners of locations within Canada. I am convinced that a fair measure of success will be the result. The head of the colonization department of the Canadian Pacific Railway has handed me a list showing those who have settled on one short branch of that railroad in Ontario. It shows that during the past eighteen months 1,510 families settled there, without any help from the railway' or from the government. Hon. members can see that at least some people in Canada believe that to establish themselves on farms, whether they intend to stay there or not, is the course of wisdom. The fact that they go to the farms is an illustration of their confidence in the belief that at least they can go into our farming communities and support themselves during this period when there is little or no employment security in industry.
Shortly put, that is the object of our devoting this comparatively small sum of money towards helping people to become self sustaining on the land.


Mr. BOULANGER:: Mr. Chairman, I should like to add a few words to the remarks of the hon. member for Kamouraska concerning the back to the land movement. I do not wish to criticize the plan; on the contrary I should like to congratulate the minister upon its success, despite the difficult conditions under which it has been operated. The scheme is carried out through the cooperation of the federal, provincial and municipal governments, and applies only to the unemployed in the cities. Any hon. member who has been born on a farm knows that in order to be a successful farmer one has to be born to it. Farmers are not improvised; they are not trained in a day. To use a French expression, d'aujourd'hui a domain. Because of this handicap it is a surprise that the back to the land plan has met with such a degree of success.
It seems to me one of the great difficulties in connection with the execution of the plan arises from the fact that the municipalities are asked to contribute to the amount being spent in settling the urban unemployed on the land. Very few municipalities, with the exception of large cities such as Montreal, Winnipeg, Toronto or Quebec have any money to help settle their unemployed in faraway colonization districts. That is one reason why the plan does not work as successfully and as speedily as one might hope. Another reason is that the large municipalities which could contribute towards settling their unemployed
on the land are not very anxious to spend the money to send the citizens away from those municipalities. I have been informed that the large cities are more or less reluctant to settle their unemployed in faraway colonization districts such as Abitibi, Timiskaming or even Temiscouata county. The reason is very simple: When the unemployed remain within the boundaries of a city they receive relief moneys for shelter, for food, for fuel, for clothing and so on. This money is spent in the cities in local stores, with consequent benefit to local trade. Some of it returns to the municipal coffers in the form of taxation. For those reasons, of course, the cities prefer to retain their unemployed and have them spend their relief moneys in the cities. They do not wish to have them go to distant points to settle on the land.


Ernest Lapointe: I do not agree with that.


Joseph Oscar Lefebre Boulanger: For those reasons I
urge upon the government that it should relieve the municipalities from contributing to the land settlement fund, and that the scheme should be only a two party affair, between the federal and the provincial governments.
I have another suggestion to make to the government in connection with the back to the land movement, namely to enlarge the scope of the plan. At the present time it applies only to the city unemployed, and to the heads of families. As I said a minute ago, to be a successful farmer one has to understand farming and to be born to it. We cannot make a successful farmer of a person who has been living in the city for fifteen or twenty years. There is possibility of making a successful farmer of a man who has been in the city for only a short time. If he is a farmer who has been lured into the city, but has kept in touch with operations on the land and has not forgotten the elementary principles of farming, his chances of success are much better. But it is very doubtful whether a man who for fifteen or twenty years has been a labourer in industry could make a success, if he were transplanted in a far away district such as Abitibi or Timiskaming.
I repeat that in view of the conditions under which the back to the land movement has been operating its success has been marvellous. I would urge upon the government, therefore, to extend the plan, so that it might apply not only to city unemployed but also to farmers' sons. In old counties the scheme cannot be carried out. For instance, in an old county such as the one from which I come, a county which has been settled for over three hundred years, there can be no colonization. Our great problem is to know what to do with
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our fanners' sons. We cannot place them in commerce or industry, we cannot place them even in the civil service. They are the real prospective farmers who would make a success on the farms. They have the proper training, they are familiar with farming, and they would be more successful than would be the city unemployed. I therefore ask the government to extend the scope of the back to the land movement so that it may embrace farmers' sons. The rural sections are full of, young men who have nothing to do. They cannot get land in their neighbourhood; their fathers cannot place them in the parish where they were born, or the county or district, so they have to go far away. They can no longer go to the cities because there is no work; the only place they could go would be on the land in the colonization districts. There you have the very best of settlers. I would ask that the government find means to help those young farmers in the same manner as city unemployed are helped to settle on the land.
Another point I would like to bring to the attention of the minister is this: In some places where farms have been opened more or less recently the clearing of land has not advanced far enough to make them capable of supplying sufficient revenue to support the occupants. Those farmers are willing and anxious to increase their clearing, but they have not the money or the help to do it. I wonder if it would be possible to use some of the unemployed, more especially the unemployed living in the country, and even those living in cities, to help these farmers to clear their land. The owners of the farms cannot pay for help, but they could give them food and shelter if the government under a back to the land movement would undertake to pay a small wage to those engaged in clearing land for the benefit of already established farmers.
Another suggestion I would like to make concerns a plan which has been discussed for a long time in the province from which I come. At the present time the provincial government makes grants or pays premiums for clearing and ploughing on unpatented land; but once letters patent have been obtained the settlers no longer get those premiums or grants. It would perhaps be possible, under a scheme of co-operation between the federal and the provincial governments, to continue the payment of those grants or premiums even after letters patent have been granted. It would enable the farmers to clear enough to produce revenue sufficient to support themselves and their families. I offer these suggestions not in any spirit of criticism but only

with the intention of making the land settlement plan a little better, a little larger, a little more beneficial for all concerned. Before I resume my seat may I be allowed to congratulate the acting Minister of Immigration and Colonization (Mr. Gordon) upon the sentiments and opinions he expressed last night and to-day on the question of immigration.
I do not doubt the sincerity of the minister, and I am willing to admit that he has always held those opinions and sentiments; but may I be permitted to remind him that they have not always been the opinions and sentiments of his party? I remember very well, as those will who were with me here in 1928, that very few hon. members at that time held the opinions to which the minister gave expression yesterday. Very few of us warned the country to go slow on immigration. In the * session of 1928 the then leader of the opposition, the present Prime Minister, made a savage attack on Mr. Forke because he was not filling the country up fast enough with immigrants. I am glad the opinion has changed, and that the acting Minister of Immigration and Colonization has expressed as favourable to a principle for which my good friend the hon. member for Quebec South (Mr. Power) and myself fought in the house in 1928.


Mr. GAGNON:: Before the minister
answers my hon. friend from Bellechasse (Mr. Boulanger) may I be permitted a few words to congratulate my hon. friend for the excellent spirit he has displayed in his criticism of the back to the land movement. I would have been much pleased if the criticism of my hon. friend from Kamouraska (Mr. Bouchard) had been on the same lines.


Joseph Georges Bouchard: I made no criticism at all. Will my hon. friend permit a question?


Onésime Gagnon: I shall be through in a
minute, and I do not want to enter into any controversy. I desire only to support what my hon. friend from Bellechasse has said about the sons of farmers from our districts, Bellechasse and Dorchester, who are unable to profit by the back to the land movement because our municipalities and districts cannot provide the sum of $200 which is required by the legislation. I think the suggestion of the hon. member for Bellechasse ought to be studied very seriously. May I suggest that this government in conjunction with the provincial government consider a plan whereby the cost of transportation of sons of farmers might be paid, in order to help those who wish to leave the old districts such as Dorchester and Bellechasse and the

Reliej Act, 1933
counties situated south of the St. Lawrence, and go to the new territories like Timiskam-ing or Abitibi? Last year I had a request from a man in the county of Dorchester who had twelve children. He had secured lots in Abitibi for three of his sons but unfortunately he could not find the necessary money to carry his furntiure and family from Dorchester to Abitibi. He applied to the provincial government and to the federal government, but was told that the back to the land scheme did not provide for the cost of transportation of the sons of farmers. May I suggest that the government study that side of the matter and enter into negotiations with the provincial government to find a way of helping fathers of large families who are anxious to have their sons settled on land in the newer districts?
My hon. friend from Bellechasse says it is difficult to make a good farmer of a city dweller. That is true, but on the other hand my hon. friend and others on that side of the house should not forget that during the years 1927-28-29 a great number of sons of farmers were lured into the cities by industrial activity. For instance in Quebec when the Anglo-Canadian pulp and paper mill was opened I think 2,000 young people came in from the neighbouring districts to settle in Quebec. These people have since been unable to secure employment, but they are not city dwellers in the true sense of the term; they are sons of farmers who have been lured into the city but who would be willing to go back to the land and would make very good settlers.
May I also point out to those on the other side of the house that this government has taken into serious consideration the suggestion which has been offered by the provincial governments. The federal government has respected the autonomy of the provinces, and in regard to the back to the land movement this government has done nothing contrary to the wishes and desires of the government of Quebec. So we on this side of the house were surprised to hear the strong criticism offered in the house yesterday by the hon. member for Temiscouata, and we wondered if all hon. gentlemen opposite were of the same opinion. We would be interested, and I am sure the government of Quebec would be interested also, to know whether hon. gentlemen opposite share the views of my hon. friend from Temiscouata with regard to the colonization policy of Quebec.
This is all I have to say, Mr. Chairman, and I conclude my humble remarks by thanking my hon. friend from Bellechasse for his broad criticism. I am sure the government will take his suggestions in the proper spirit.


Jean-François Pouliot: Unfortunately I was not in the house yesterday when the Minister of Labour said:
If my recollection serves me correctly, and my hearing is right, the hon. member for Temiscouata directed his barrage against the province of Quebec.
When the house opened to-day I rose to a question of privilege and said:
The hearing of the hon. gentleman may be correct and his recollection may serve him correctly, but his understanding was very poor because I did not direct any barrage against my own province, which I love as much as my country and which I am always fighting for.
A esterday I said the following words, which appear at page 3156 of Hansard:
In my remarks, I had no more the intention of attacking the Quebec government than -attacking, in the house, the Minister of Labour, yesterday.
I was referring to my speech on March 2. I am sorry that the minister does not understand French, but it will be noticed that in my remarks yesterday I did not seek to place any blame on this Or any other government. For this reason I was very much surprised to hear my hon. friend from Dorchester ask what Mr. Tasehereau might think or what the Quebec government might think. I have nothing unpleasant to say about the Quebec government, but I find it very strange that the hon. member for Dorchester should stand on the platform and oppose the Quebec provincial government during every election and still be so much interested in their welfare between elections. He might be taken much more seriously if he supported the provincial government during elections as well as between election campaigns. What I said yesterday was mostly objective and not subjective; I wanted to give my unbiased views with regard to this extremely important problem confronting us at present. Speaking yesterday the Minister of Labour said:
I am not unmindful of the situation, but the policy which I have outlined will be pursued.
So he is the father of that policy; he has given his name to it. So much the better for him if he is pleased with it, but there is a lot that can be said about this policy; he must be told where it is wrong. It does not matter what name may be given to it; it does not matter by whom the policy is out-
Relief Act, 1933

lined. The essential thing is that it should bring about efficiency, and if it does not do so it is a bad policy.
What did I say about those camps on March 2? I did not mention there were any camps in Temiscouata county, though I have since learned from a letter which appeared in the press that there were such camps. I did say they had these camps in the north and I saw families going there while there were no roads leading to their lots. I do not say I have been misquoted or misunderstood; I have said what I have said and nothing else. There is something I should say, and I do not refer to it because I have any quarrel with any person; I have no quarrel with anyone, but when a man is incompetent I ask for his dismissal without fear or favour. I am here to do my duty. I am not here to exact any sort of vengeance from this person or that, and I have no such idea and no ill feeling towards anyone. I will do my duty as best I can, and I will not be swayed by what may be said by the hon. member for Dorchester, or even by the minister himself. I fear no one but God, though after listening to the budget speech this afternoon I also fear for the future.
Here we have a scheme to send people back to the land, and it is advertised like a circus. Has it been well thought out? Is there a careful selection of the would-be settlers? On what basis is that selection made, and who makes it? Those are interesting questions.
In my constituency of Temiscouata there is a seigniory, an area two leagues wide along lake Temiscouata; that seigniory is a cancer in that farming district. Many people there suffered eviction, just as the Irishmen were evicted from their own country. That property formerly belonged to Seignior Thomas, who died, and now it is the property of the Fraser Company. There are several parishes contained in that siegniory: Sainte Rose du Degele, Notre Dame du lac, Saint Mathias de Cabano, Saint Louis du Ha! Ha!, Saint Eusebe de Cabano. The new parish of Squatec is close by, and there is also the parish of Saint Juste du Lac. Among these are some rather old parishes, but the seignior refused to grant lots to the sons of the farmers, and as a consequence the young men could not settle near their homesteads. As a result they have had to settle on land farther away, though if conditions had been reversed there would not have been the gaps between those parishes and the crown lands in the eastern part of my constituency. For a long time now I have advocated an exchange

of lots in order that the sons may be near their fathers. Nothing has been done except to create a new parish in front of Notre Dame du Lac, although there was a good location further south on the Madawaska river. That scheme has never been accepted for the simple reason that there was too much oomimon sense in it. The lands in the vicinity of the Madawaska river are excellent for farming but they have been neglected. The soil is good and there is only one river to cross, a small river, to reach the other side. Lake Temiscouata is over a male wide and is quite deep, and for about two weeks in the spring and two weeks in the fall it is impossible to cross it owing to the moving ice. Now this is my suggestion, which I have often made in public and in the press. I suggest that there should be an exchange of lots so that these vacant lands might be granted to farmers' sons who have experience in farming and who could settle near the old homestead. In the first place, the farmers must strengthen their position in the old parishes; they must strengthen the old fortress in each parish, and after that is done colonization should go forward step by step just as in the army. When a range in a new township is conceded, a second range should be conceded provided all the lots on the first range are inhabited by serious settlers. How can we pick and choose this and that one? How can we take Paul and Joe, Fred and Tom, and take them away into the midst of the forest and say to each of them, "You will have to settle here and there."
I submit that there has been no system in colonization; there has not been any system for some time, perhaps since confederation, and possibly even before that. I do not blame any government, but I offer them this suggestion and ask them to take it into serious consideration so that all may profit thereby. The Gordon scheme is a very nice name, and perhaps no one could suggest any better; but it must be lasting. It should not merely be a palliative. If it is only a palliative, what is the use of taking men from the city where they are on relief and placing them in the middle of the wilderness and giving them $600? They will simply die there; you might as well support them in the city. It would be cheaper, for it seems to me that the government will simply have to bring them back from the forest and see that they are cared for.
These are all serious considerations. More than that, Mr. Chairman, may I say that the reason I spoke as I did yesterday is that I am tired of this wonderful picture of colonization which is given us by those who have an

Relief Act, 1933
interest of some kind in painting it that way. Things must be presented to us exactly as they are; there should be no camouflage. If a thing is good, let it be so represented; if it is bad, we must be told that it is bad. But what have we here? We have the maple syrup of Dorchester uttering sweet words to the house in the same fashion as French fried potatoes are sizzled in the pan. We have complaints of every description-flowers of every kind. To-day it was just as at a wedding, flowers everywhere, flowers to this one and flowers to that one. I suggest that the minister is too much of a man to care so much for flowers.


George Gordon: Certainly I don't like
French fried potatoes and flowers in the same bouquet.


Jean-François Pouliot: Well, this is about dinner time and that is why I said that, but when I spoke of French fried potatoes I did not mention the minister but my hon. friend from Dorchester. I say that it is simply a waste of time indulging in such compliments in regard to everything. The Minister of Labour is a jolly good fellow, but there are others on the opposite side who are so touchy that we have to wear white gloves in dealing with them. Is it manly? No; we have to get at the facts as they are. We had an example of this to-day; the Minister of Finance set a very good example when he told us the bare truth. We have been looking for the truth in regard to our financial situation ever since August, 1930, and the Minister of Finance today gave us the facts in this regard. Now, I am giving the truth with regard to colonization. I have a proper regard for the men but none for the system as it now operates, because it does not deserve it. I do not wish to be unpleasant to anyone in the province of Quebec, not even to Mr. Bilodeau, and I asked for his dismissal not only for the good of the settlers but for his own good. There is no personal feeling between himself and myself, nor is there any personal feeling between Mr. Taschereau and myself. That gentleman was kind to me and I appreciate it highly, and Mr. Laferte is not a bad fellow. But the important question is this: Have we competent men managing this scheme? I do not intend to reflect on the minister. He probably said to his staff, "I want this to be done in such and such a way". Well, who did it? Was it the provinces or the federal government? Under the scheme the sum of $600 is provided for each family, either $400 or $500 in cash quite early, and $200 or $100 later on. I say that this will not suffice. I do not think it is fair to treat neople this way.
To sum up what I have said, I submit that in the first place there must be a proper classification of the unemployed, as was said yesterday. My hon. friend from Bellechasse spoke about farmers' sons who would be good settlers to take advantage of the scheme. That is all very well, but the farmers are now in such dire straits that they cannot give money to their children to live outside the home. Some of them are so badly off that they have no clothing for their children, so that the young ones cannot get the benefit of fresh air nor can they go to school this winter. I say this with a full knowledge of the facts. Not only that, but in those parishes that have been referred to by the Minister of Colonization for Quebec, and the names of which you will find enumerated in my speech yesterday, there are places where the situation is so bad that mothers of large families came to my place and told me that when it was raining the roof was leaking so much they had to put on extra clothes to keep from getting wet. Something should be done for these people. It cannot be done by money cooperation in colonization schemes, it must be done by a regular increase in the provincial subsidy. The British North America Act provides that the federal government shall have certain duties, certain responsibilities and certain rights and outlines the jurisdiction of each province in similar matters. During past years, and especially since 1930, the provinces have been coming to the federal government for assistance. This government owes them nothing more than the agreements in virtue of the British North America Act provide for, but if the provinces cannot manage themselves, they have to come here and ask for an increased subsidy. I would have no objection to an increase in that way. But as this matter of colonization has been decided by both the federal and provincial governments, I desire to discuss this matter and to express my views. Some of the money given to the provinces has been collected by federal taxation, and because of that fact, I feel it is my duty to fight for the recognition of these elementary truths. It is not pleasant for me to do this but I repeat that I feel it to be my duty and I shall continue upon this course until I have satisfaction. As I have said many times, I do not wish to be unpleasant to the minister but I cannot understand how he hopes to bring about a real cure for unemployment without having a classification. Otherwise, any measures adopted will be but palliatives. It reminds me of the director in the Quebec seminary which I used to attend. When we had a cold he would tell us not to use any cold

Relief Act, 1933

syrups because when a cold was not cured it lasted for thirty days and when it was cured, it lasted for twenty-nine days. This is the same thing, it is a palliative measure.
Unless we stop the country will be bankrupt. Common sense is the only thing that will stop this race to bankruptcy. There is no necessity of having a Union government to do this; the only thing needed is the cooperation of minds. I put the Minister of Labour (Mr. Gordon) in the category of those who can provide this. I ask him to see to it that more care is given in council to the preparation of our laws. The ministers have great responsibility but they should do more thinking before rather than after when preparing legislation to be passed by order in council or otherwise. I ask the minister to see, first, that there is a classification of those who want to enjoy the benefits of the Gordon scheme for the relief of unemployment and back to the land policies; second, that there is a classification of lots in order that settlers may be placed in convenient locations; third, that the position of the farmers in the older parishes is strengthened by filling up with new settlers the farms which are now vacant. These farms could be purchased by the government and given to the new settlers rather than having them placed back in the forests. When a man without experience in agriculture is placed upon the land he should really have one or two neighbours who have had farming experience. They would be like columns to support him in his efforts to obtain the benefits of this scheme. There should be no vacancies in our settlements. There have been cases where a man has succeeded in getting a letters patent for his lot and then selling it to a lumber concern. The timber was taken off and no one wanted to cultivate the land, thus leaving a vacancy in the community. If the minister says he will consider the classification of the unemployed, I shall be satisfied for the moment.


Mr. NEILL:: Might I suggest to the minister that this evening he be prepared to make a statement in connection with unemployment insurance? I spoke on this matter yesterday and quite a number of hon. members on this side have expressed the desire to obtain some information on the subject.
At six o'clock the Speaker resumed the chair and the house took recess.
After Recess
The house resumed at eight o'clock.



PRIVATE BILLS


[Stage Direction]
The house in committee on Bill No. 17, to incorporate -the Canadian Railway Employees Mutual Benefit Association-Mr. Maclnnis- Mr. LaVergne in the chair.
On section 1-Incorporation.
Mr. WHITE (London):: As no explanation was given of this bill on the first or second reading, and as the sponsor's name has been changed in the meantime, I should like to hear an explanation of the bill from the present sponsor.


Mr. MacINNIS:: I understood, Mr. Chairman, that on the introduction of any bill into tile house the sponsor had to give an explanation. This bill is very simple. It is to incorporate certain persons as the Canadian Railway Employees Mutual Benefit Association, as a fraternal benefit society, carrying benefits and insurance for the protection solely of the members, their families and dependents, and not for profit. The bill as it is now before the house has received the approval, I understand, of the superintendent of insurance and has passed the banking and commerce committee without amendment. I do not think that there is any further explanation necessary at this time.


Mr. STEVENS:: It is generally understood that the organizations of railway employees of Canada have very well established and well organized benefit societies, conferring upon their members certain privileges with respect to insurance and other matters of that kind. Glancing through this bill I am wondering whether it would not conflict with existing organizations. The point I am making from my long knowledge of and acquaintance with these organizations is that generally speaking they are very well managed, and some of them are quite- powerful so far as their long standing and accumulation of funds is concerned. One of the main things that is necessary in an organization of this kind is the security of its funds. I am just wondering whether this new organization may not conflict with some of the existing well-established organizations. Perhaps the hon. member would give us some information on that point.


Angus MacInnis: As the hon. gentleman
well knows, it would be rather difficult to form any new organization that might not possibly

Private Bills
conflict with another already in existence; but as I understand the situation, from many years' association with trades union organizations, they are organized first of all as a protection for their members in dealing with their employers. The matter of insurance of various kinds is secondary. Most of these organizations, including the international organization to which I myself belong, give death benefits and old age and disability benefits. In our local organizations we go beyond that, although, being a local organization, we have not federal or provincial authority. But we have our own sickness and death and disability benefits. I do not know to what extent this organization might conflict with other organizations already established so far as insurance is concerned.


Mr. GRAY:: I should like to follow up what has been said by the Minister of Trade and Commerce. I should also like to hear from the chairman of the committee before which this bill was considered. It is my understanding that the railway brotherhoods are largely opposed to this bill. I agree with the Minister of Trade and Commerce when he says that this society might infringe upon, or at least will add to, the brotherhood organizations already in existence. Just a few weeks ago there appeared before the Prime Minister and the cabinet a number of men representing railway employees no longer employed, and it was then stated quite plainly to the Prime Minister and the cabinet that the majority of the men appearing before them were men who had formerly been in brotherhoods and now found themselves unable to pay their dues and consequently were, so to speak, outside the pale. As a consequence of being unable to keep up their dues they found themselves in the unenviable position of not being able to get what they considered their just rights with the railway trades unions. I submit, Mr. Chairman, that before we proceed to incorporate another benefit society, if you wish to call it that, we should know very clearly whether it is the wish of the organized brotherhoods which have been in existence for a number of years, and which, I believe I am correct in saying, are having difficulty in making their organizations stand up, that another society of this kind should be incorporated.


Mr. SMOKE:: If it is true, as stated by the Minister of Trade and Commerce, that the railway employees already have a brotherhood, it seems to me that in these times when economy should be the watchword it is a mistake to incorporate another such society. For that reason I think this bill should be 53719-206i
rejected, but whether or not at this stage I am not in a position to say. It does seem to me that in these times of stress and strain it is a mistake to incorporate another such federation as this, because obviously it will cost more to carry on two institutions of this sort than one.


Mr. NICHOLSON:: It is necessarily true
that if this bill is passed and the organization is incorporated it will come into direct competition with organizations already in existence. However I do not believe I should be disposed to oppose the bill on that ground if, in other respects, it was sound. In organizations of the kind which I know something about, the insurance funds and the general funds are kept entirely separate. The premium on insurance is paid as such, and the assessments for general purposes are paid into separate funds and used only for the purposes of those funds. They are not allowed to overlap. Any sound insurance scheme necessarily must involve the payment of the premium into the insurance fund, and that it be kept there for the purpose of insurance and for nothing else. However, that is not what we find in this bill, and it is because of the different provisions contained herein that I voice my opposition.
In its present form I do not believe the House of Commons should pass the bill. I am surprised that the hon. member has proceeded with the bill as it appears before us. Manifestly, if he has read the bill he has not understood it, otherwise I do not believe he would have allowed it to come before us in its present form. The purpose of the bill is to bring into being a new association or organization for a variety of purposes, among others to organize, establish and carry on local branches of the society. Then, the second purpose for which it is incorporated is that of uniting its members in social and fraternal bonds. No one could object to an association of men brought together for the purpose of social and fraternal activities.
Then the bill proceeds to define a variety of classes of insurance which may be put into effect in regard to only a portion of the members of the association. The bill differentiates completely between this proposed society and organized brotherhoods which have been in existence for more than half a century. In these organized brotherhoods every member must take out an insurance policy. Not so in the present instance; they may if they wish. The first purpose of incorporation is to unite the members in social and fraternal bonds. Then, let us follow the provisions of the bill.
Private Bills

In. subsection (c) of section 4 we find provision for a variety of insurance, among others sick benefit, old age pensions, annuities and health insurance.
Then the bill provides that the society shall have power to fix and refix the amounts of premiums. There is no stabilized premium fixed at all. If there are a thousand members in the society, thirty per cent may take out insurance, and the remaining seventy per cent may be there for social and fraternal purposes. Then what follows? As we read the bill we find provision for the establishment of different funds. Let me read paragraph 9:
The society shall have power from time to time to make, amend and repeal by-laws and regulations for governing the election of officers and trustees and prescribing and defining their duties and powers, the holding of meetings, the admission of members, fixing and refixing of the amounts of the premiums, dues and assessments to be paid by its members, and generally for the government and management of the society.
Note the expression "fixing and refixing of the amounts of the premiums". Then, let us follow on:
10 (1) The society may maintain a general fund to which shall be credited all dues and other sums intended to be used for the payment of expenses of administration and all expenses of the society shall be payable out of such fund.
That refers to the expenses of social and fraternal activities. It may refer to golf courses; anything, aside altogether from insurance, is embraced by this clause. Now we come to subsection 2 of section 10-and at this point to my mind we begin to touch the vicious principles behind the bill:
The society may make provision in its bylaws whereby in the event of there being a deficiency in the general fund-[DOT]
Hon. members will note the provision is for a deficiency in the general fund, not the insurance fund. And in such circumstances what may they do?
-the annual meeting of the society may in any year provide for the allocation to the general fund of such portion as the actuary of the society may recommend of the premiums or assessments, falling due during the succeeding twelve months-[DOT]
To the extent of one-sixth of the total premium. That is not all they may do. Assuming that there is a surplus in the annuities fund, or that the actuary makes a calculation that there is such a surplus at the end of one year, and finds at the end of the next year that he is short-in such circumstances subsection 4 applies:
If at any time the general fund or a surplus in any other fund becomes exhausted or is in

danger of becoming exhausted, the board of trustees shall have power to make a proportionate assessment upon each member in the fund-
Note this: They exhaust the moneys in the annuities fund or life insurance fund for general purposes and may then turn around and assess the men in that particular fund. They use the funds of the man who takes out life insurance, or provides an annuity for his family, as a surplus for general purposes, and then assess him again to reestablish or replenish his own fund. Then we find in section 11:
The society may make provision in its constitution whereby-
And bear in mind there is no constitution or no set of by-laws attached to the bill-
-such portion as shall be approved by the actuary of the society, of the surplus above all liabilities in any benefit fund, may be applied to grant new or additional benefits to the members-
If I understand English at all, section 11 simply means that out of the surplus insurance fund which is being paid by a certain class of insurers or policyholders funds may be taken to place insurance on individual members of the society who have never carried any kind of insurance whatsoever.
Then the final clause, No. 12, is as follows:
Except as hereinbefore otherwise provided, the Canadian and British Insurance Companies Act, 1932, shall apply to the society.
By this bill we are asked to legislate right out from under the insurance law of the country, and to set up a special set of provisions for the society asking incorporation, a society the purposes of which are wholly undefined in the bill.
As the hon. member for West Lambton has said, this association would come into competition with organizations which are finding it very difficult to carry on. However I do not oppose the bill on that ground. I oppose it because from A to Z it is absolutely unsound, and because the parliament of Canada should not permit any group of men to sell insurance to railwaymen or any other class under conditions such as are set out in the bill. I am amazed that the hon. member should have proceeded with the measure as it stands without first having studied it and learned its exact meaning.


Mr. HACKETT:: Mr. Chairman, I believe that some of the statements made by the last speaker may have been made without full information.


Alan Webster Neill: Hear, hear.

Private Bills


John Thomas Hackett: It is a matter of indifference to me whether or not the bill before us passes. However I am a member of the banking and commerce committee which gave careful consideration to it. I believe the house need only consider whether or not a number of men who have complied with the law are entitled to become incorporated. The hon. gentleman who has just spoken need have no fear that this new organization will engage in the insurance business in a way that is unsound.


George Brecken Nicholson: Are they permitted under this act to engage in the insurance business on the side?


John Thomas Hackett: No. Section 12 of the bill reads:
Except as hereinbefore otherwise provided, the Canadian and British Insurance Companies Act, 1932, shall apply to the society.


The CHAIRMAN:: Order. We are on
clause 1.


John Thomas Hackett: But I am drawing to the attention of the committee the fact that clause 1 as well as the rest of the bill-


Armand Renaud La Vergne: The remarks of the hon. gentleman would be in order on the second or third reading, but in committee we must discuss the bill clause by clause.


John Thomas Hackett: But I am answering a question.


Armand Renaud La Vergne: Even so I think at present it is out of order.


John Thomas Hackett: If the chairman had made a ruling when the question was asked I would not have endeavoured to answer it. However, the point I wish to make is that the bill itself and the clause under consideration have been carefully considered by the superintendent of insurance, who took no exception to it and assured the committee that the insurance business could not be engaged in unless the necessary deposits and guarantees and actuarial assurance were provided.


Armand Renaud La Vergne: The hon. gentleman is perfectly in order on clause 3, but clause 1 is the name only.


John Franklin White: Coming as I do from an important railway centre in western Ontario I have more than an ordinary interest in this bill. Quite a number of members of railroad organizations have spoken to me in opposition to it. I join with those who oppose it on the ground that it is not necessary, that there are already many organizations which can take care of the very work this is intended to do. On the Canadian Pacific Railway there are local and system-wide organizations; on the Canadian National Railways there is the Intercolonial provident fund, the Grand Trunk provident fund-


Armand Renaud La Vergne: Order. The question is on clause 1, whether these gentlemen named are to form this corporation; that is all.


John Franklin White: I am coming to that. Then there are the Canadian National Railways Pension Act and the Workmen's Compensation Acts of the various provinces. Negotiations are now being carried on with the railroads looking to a standard benefit association covering the entire government railways. Therefore I believe there is no need for this incorporation, not only for the reasons I have mentioned but also because there are less men by thousands now in the employ of the railroads than there were a few years ago. One hon. member made the statement in the debate on the railway bill that as between 1929 and 1931 there were 33,000 less railroad men employed. As between 1931 and 1933 the difference is impossible to say, but it strikes me that the total will run up to probably
50,000	less. So for that reason there is less need for this incorporation than otherwise might be the case.
As to the consideration by the committee of this first clause, I cannot find very much in the minutes. They merely state that the solicitor for those who wish incorporation was heard, and also the superintendent of insurance, and that it was passed without amendment. Evidently no representative of the railroad organizations appeared; possibly they were not aware of the bill coming before the committee.
Coming to the bill itself, I notice these men who seek incorporation are all from Vancouver. There is evidently no country-wide demand for such an organization; if there were, some of those who wish incorporation would have been resident in other parts of the country. It is true that in clause 1 there are listed several different trades, for example, three yard men, one conductor, two switchmen, one foreman, one fireman, two trainmen, one machinist, one hostler, one engineer and one motorman. But there are other things that I object to in connection with the incorporation. There are clauses which provide that all the offices can be given to those who seek the incorporation. There is another clause which deals with those who may be considered members of this society in good standing, confining it to those whom the society will admit. Anything of this kind
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should be open to all employees of all railroads. Other bills which have gone through in years gone by, back to 1874, had that provision. Then there are conflicting clauses as to premiums, assessments and dues and some other things to which I might object.
Now I come to the list of men who are seeking incorporation. The first name on the list is Mr. McConachie; he is about the only one concerning whom I wish to say anything. I have made some inquiry as to his connection with the railroad brotherhood and his work on the railroad with which he is employed. I find that in five years he has worked a total of 690 days; in 1928, 223 days; in 1929, 287 days; in 1930, 145 days; in 1931, 29 days; in 1932, 6 days; and in the year 1933 has not worked up to the present. It may be urged that on account of lack of railway business he has not been allowed to work, but that is not the case, because he has been in the Canadian Pacific Railway service since 1918, which would assure his seniority, so that he would have no difficulty in working steadily. I assume, therefore, from what I have heard, and I believe my information is correct, that he has been engaged in other activities. I am told that he was the prime mover in an organization which was started a few years ago called The Big Four. The Big Four scheme in Vancouver, started by this gentleman and some others, was called an insurance scheme. In railway parlance The Big Four is understood to comprise the Brotherhood of Locomotive Engineers, the Brotherhood of Firemen and Enginemen, the Order of Railway Conductors and the Brotherhood of Railway Trainmen. The men who have spoken to me on the subject say that this name was appropriated by the people running this lottery-for that is what it really was-and employees of railroads were given tickets to sell, the name Big Four being used to give it a sort of standing so that the tickets would sell more readily. Tickets were sold which had an accompanying stub; the stubs and the cash collected were sent to Vancouver once each month, and a drawing was held each month on a oertain date. The tickets sold at one dollar each. When the time arrived for the drawing the stubs were put in a container, stirred up, and a person was blindfolded and charged with the duty of withdrawing the stubs one by one. The first drawn carried a prize of S750, the second $500, and several others, perhaps about fifty different prizes of gradually lessening amounts. It is said that ten per cent was deducted from the receipts for

the month for expenses, the prizes were paid and then claims for certain benefits were considered and certain sums paid to those who were thought worthy. That was so successful in Vancouver that an office was opened in Winnipeg; the Vancouver office looked after British Columbia while the Winnipeg office took care of the other western provinces. It is said that some $10,000 to $14,000 was collected at each office per month, but a year ago the Winnipeg office was raided by the police. The case came to trial; the court decided that this constituted a lottery, and a fine of $250, or some such figure, was imposed. After that the proceedings were carried on in a little different manner. I have one of the tickets here; on it appears the words "The Big Four relief fund, Manitoba and Saskatchewan railway employees, receipt for dues paid for January, 1933."
After the fine was imposed I am told that the same scheme was carried on from a Winnipeg hotel room. The drawings took place sub rosa, and were never carried on twice in the same place. I have here a list of payments for relief over a certain period, but I have not been able to find that any audited statement of receipts or of expenditures has been published. All that is made public is a statement of benefits paid, which is in the form of an advertisement for further sales; there is no accounting for these funds, and in my opinion the railway workers have been exploited. I see no reason why another organization should be built up, the expenses of which would have to come out of the pockets of the railway men. I do not think it is necessary to have such an organization; there seems to be no general demand for it; the reputation of those applying is not of the best, and the original sponsor of the bill has withdrawn. So there seems no reason why this bill should proceed further, and I therefore move that the committee rise.


Angus MacInnis: Mr. Chairman-


Armand Renaud La Vergne: The motion is not
debatable.
Motion agreed to on division.



SECOND READING

[Stage Direction]
Bill No. 49, respecting a certain patent application of Fred Charles Fantz.-Mr. Anderson (Toronto-High Park).

[Stage Direction]
Mr. P. F. CASGRAIN (Charlevoix-Sague-nay) moved the second reading of Bill No. 46, to amend the criminal code (lotteries).

Criminal Code-Lotteries
Some hon. MEMBERS:: Explain.


Some hon. MEMBERS:: Carried.


Mr. J. L. BROWN (Lisgar):: I	thought
perhaps the mover of this bill would have something to say, because I have an amendment to offer.


Mr. CASGRAIN:: I have already explained the bill.


John Livingstone Brown: When this bill was put on
the order paper I thought it was one that should command some attention, and I have been giving it some thought. The bill purports to deal with a somewhat unsatisfactory situation in regard to money obtained by lottery. This proposal is that before a person is allowed to sue for such money the consent of the attorney general must be secured, but I propose to offer an amendment which, though perhaps not an entirely satisfactory way to deal with the matter, from my point of view it seems more satisfactory than the bill as it now stands or the amendment proposed by the hon. member for Chardevoix-Saguenay (Mr. Casgrain). Before dealing with that matter, however, I think perhaps it might be well to place on Hansard the section of the code dealing with lotteries, especially in view of the fact that apparently before this session ends we will have before us a bill dealing with the whole question of lotteries in perhaps a more comprehensive way. So for the information of the public and perhaps for (the information of many hon. members I propose to place on Hansard section 236 of the criminal code, even though it may take a few moments to do so. The section reads:
Every one is guilty of an indictable offence and liable to two years' imprisonment and to a fine not exceeding two thousand dollars who-
(a)	makes, prints, advertises or publishes, or causes or procures to be made, printed, advertised or published, any proposal, scheme or plan for advancing, lending, giving, selling or in any way disposing of any property, by lots, cards, tickets, or any mode of chance whatsoever; or
(b)	sells, barters, exchanges or otherwise disposes cf, or causes or procures, or aids or assists in, the sale, barter, exchange or other disposal of, or offers for sale, barter or exchange, any lot, card, ticket or other means or device for advancing, lending, giving, selling or otherwise disposing of any property, by lots, tickets or any mode of chance whatsoever; or
(c)	conducts or manages any scheme, contrivance or operation of any kind for the purpose of determining who, or the holders of what lots, tickets, numbers or chances, are the winners of any property so proposed to be advanced, loaned, given, sold or disposed of; or
(d)	disposes of any goods, wares or merchandise
by any game or mode of chance or mixed chance and skill in which the contestant or competitor pays money or other valuable consideration; or	[DOT]
(e)	induces any person to stake or hazard any money or other valuable property or thing on the result of any dice game, shell game, punch board, coin table or on the operation of any wheel of fortune:
Provided that the provisions of paragraphs (d) and (e) of this subsection in so far as they do not relate to any dice game, shell game, punch board or coin table, shall not apply to any agricultural fair or exhibition, or to any operator of a concession leased by any agricultural fair or exhibition board within its own grounds and operated during the period of the annual fair held on such grounds.
2.	Every one is guilty of an offence and liable on summary conviction to a penalty of twenty dollars, who buys, takes or receives any such lot, ticket or other device as aforesaid.
3.	Every sale, loan, gift, barter or exchange of any property, by any lottery, ticket, card or other mode of chance depending upon or to be determined by chance or lot, is void, and all property so sold, lent, given, bartered or exchanged, is liable to be forfeited to any person who sues for the same by action or information in any court of competent jurisdiction.
4.	No such forfeiture shall affect any right or title to such property acquired by any bona fide purchaser for valuable consideration without notice.
5.	This section includes the printing or publishing, or causing to be printed or published, of any advertisement, scheme, proposal or plan of any foreign lottery, and the sale or offer for sale of any ticket, chance or share, in any such lottery, or the advertisement for sale of such ticket, chance or share, and the conducting or managing of any such scheme, contrivance or operation for determining the winners in any such lottery.
6.	This section does not apply to-
(a)	the division by lot or chance of any property by joint tenants or tenants in common, or persons having joint interests (droits indivis) in any such property;
(b)	raffles for prizes of small value at any bazaar held for any charitable or religious object, if permission to hold the same has been obtained from the city or other municipal council, or from the mayor, reeve or other chief officer of the city, town or other municipality, wherein such bazaar is held, and the articles raffled for thereat have first been offered for sale and none of them are of a value exceeding fifty dollars;
(c)	the distribution by lot of premiums given as rewards to promote thrift by punctuality in making periodical deposits of weekly savings in any chartered savings bank;
(d)	bonds, debentures, debenture stock or other securities recallable by drawing of lots and redeemable with interest and providing for payment of premiums upon redemption or otherwise;
(e)	the Art Union of London, Great Britain, or the Art Union of Ireland. R.S., c. 146, s. 236; 1922, c. 16, s. 11; 1925, c. 38, s. 4.
Mr. LaVERGNE : The Art Unions of Great Britain and Ireland are exempted from the provisions of section 236-


John Livingstone Brown: I am not discussing that
matter.
Mr. LaVERGNE: It is very important.
Criminal Code-Lotteries


John Livingstone Brown: I have read the section as it appears, and if the hon. gentleman wishes to move an amendment he can do so.
Mr. LaVERGNE:	There are two foreign
countries that are exempted under the code.


John Livingstone Brown: I Have read the section of
the criminal code dealing with the question of lotteries. Subsection 3 is the provision which it is proposed to amend by inserting these words:
-after having obtained the leave of the attorney general for the province in which the proceedings are taken.
It would seem that in order to protect his winnings, the winner of the prize gets his relatives to sue, thus precluding any outsider from suing. That seems to be the purpose of the amendment. It might however be a false assumption that the attorney general of a province would always wish to protect the winner; it might very well be that the attorney general, if he had a certain attitude of mind towards lotteries in general, would prefer someone else to sue.
I said I wished to propose an amendment and it is this. I move, seconded by the hon. member for Antigonish-Guysgorough (Mr. Duff):
That all the words after "forfeited to" in the twelfth line be struck out and the following substituted:
"the crown in the right of the province whenever any person, having secured leave of the attorney general, sues for the same by action or information in a court of competent jurisdiction."


Joseph Philippe Baby Casgrain: I rise to a point of order. I am not sure whether the hon. gentleman has the right to move an amendment on the second reading.


Mr. SPEAKER:: The hon. member has
offered an amendment which is not in order, but he has the right to continue speaking on the second reading.


John Livingstone Brown: Very well then. That will
be the amendment which I shall move when we are in committee, and I presume it will be in order. Let me continue speaking on the principle involved in the amendment. The difference between the original bill and the amendment I propose to move at the proper time is that in one case the man who has come into possession of money or goods in an illegal manner is protected in his winnings, whereas in the other he is not. It is not altogether satisfactory to me that even the crowm should come into possession of goods

that are obtained illegally, but of the two alternatives I would choose the latter. It seems much more fitting that instead of the winner of a prize which is obtained in an entirely illegal manner being protected in the holding of his winnings, the crown should come into possession of the prize. That is the difference between the two.
Mr. LaVERGNE: There is something that strikes me as an anomaly in the criminal code in section 236 which the bill proposes to amend. Not coming from such solid Puritan stock as the hon. member for Lisgar (Mr. Brown), I have no objections personally to lotteries. I think on the whole they might prove to be a good thing in connection with our national loans and to help our hospitals and charitable institutions. If we are going to amend section 236 of the criminal code, why not strike it out altogether? Under this section it is a crime for any Canadian to hold a lottery, to sell or buy tickets or participate in a lottery, yet under paragraph (e) of subsection 6, the Art Union of London, Great Britain, and the Art Union of Ireland are exempted. Lotteries are either good or bad, and if they are bad, they must be just as bad for the Art Union of London, Great Britain, and the Art Union of Ireland as they are for the individual Canadian.


Richard Bedford Bennett: Mr. Speaker, the hon. gentleman who has just resumed his seat (Mr. LaVergne) has referred to the provisions of the criminal code which exempt from the operations of the law the Art Union of London and the Art Union of Ireland. I have not had time to send for the statute I have in mind, but lotteries had worked such havoc among the masses of the people in Great Britain that parliament intervened and made them illegal. If any hon. member is interested and takes the time to look up the speech made in the House of Lords by Lord Chesterfield, remarkable for the letters he wrote to his son, he will find the most powerful indictment of lotteries which could be made in any language. With every word he said I am wholly in accord. When lotteries were made illegal in Great Britain an exception was made in the case of the Art Union of London and the Art Union of Ireland in order to promote the distribution of paintings and works of art. Perhaps upon a later occasion I shall have an opportunity of bringing this statute into the house in order that hon. gentlemen may be informed as to why this exception was made. The provisions of that statute were

Relief Act, 1933
applicable throughout the empire, but under the statute of Westminster, if we now desire to remove from our criminal code the exception in favour of the Art Union of London and the Art Union of Ireland, I do not think there is any doubt we have the jurisdiction to do so. I should like the hon. gentleman who has just spoken to realize that the genesis of that exception was to give an opportunity to these organizations to distribute paintings and works of art. The limitations imposed by the statute were such as to ensure that the prizes would not be money but works of art or the result of the genius of painters reflected sometimes in masterpieces. The exact date upon which this statute was passed is not in my mind. Possibly some better informed member will be able to give the house this information. My memory is, and I rely solely upon it, that it was somewhere about 1826.
I do not think that any good purpose would be served by leaving it in the power of any one man to determine whether or not action should be brought to recover the winnings of a lottery. That is my own personal opinion. As the hon. member for Lisgar has said, if there are winnings from a lottery and the law as it now stands makes lotteries illegal, the returns should be forfeited to the crown in the manner in which his amendment proposes. As the Minister of Justice points out, a burglar's tools are. forfeited, on conviction, as well as liquor and the automobile in which it is being carried. It might well be that money won in a lottery should be forefeited to the crown rather than to an individual who might prompt action. It is something like a quantum action in which half the proceeds go to the informer. I must say reluctantly to the hon. member for Charlevoix-Saguenay (Mr. Casgrain) that I do not share his views as to the desirability of placing in the hands of an attorney general of any province the power of saying whether or not an action should be instituted by any person or persons for the purpose of recovering money won by some other person in a lottery. I have the strongest possible opposition at the moment to any effort being made to stimulate speculation by the Canadian people. During the last four or five years they have been gambling with various mining shares and other matters with a terrible result. I think that any benefits which might accrue to individuals through lotteries are more than offset by the ill that is done by having the savings of thrifty Canadians risked in purely speculative ventures.



UNEMPLOYMENT AND FARM RELIEF


[Stage Direction]
The house resumed consideration in committee of the following proposed resolution- Mr. Gordon-Mr. LaVergne in the chair:
Resolved, that it is expedient to introduce a measure to continue in force the provisions of the Relief Act, 1932, until the 31st of March, 1934.
Mr. YENIOT:: In 1931 an order for 2.000,000 ties was placed and I should like to know if the full cost of that order was charged to unemployment relief.


George Gordon: Under the 1931 act the cost of those ties was charged to unemployment.


Mr. VENIOT:: I understand a further order for some 800,000 ties is being given by the Canadian National Railways. Are these to be paid out of the unemployment relief fund or are they to be chargeable direct to the Canadian National?


George Gordon: That order wil be chargeable to the Canadian National Railways.


Ernest Lapointe: Reference was made
last night to orders in council P.C. 2787 and 2171, by the first of which an amount of $1,447,222.71 was advanced to the Canadian Pacific Railway to pay the wages of men employed in the shops, and by the other the sum of $1,000,000 was advanced to the same railway also to pay the wages of the men employed in the Shops. In both those orders in council there is reference to arrangements that have been made to maintain operations in the shops of the Canadian National Railways. I should like to know what arrangements have been made with the Canadian National Railways for the purpose of permitting the employment of their workmen in the shops.


George Gordon: At the time the first order in council was passed authorizing the $1,400,000 odd in payment of the wages of the employees on the Canadian Pacific, the position of the shopmen on both railways was giving a good deal of concern, and it was felt that keeping those shops open for a short time would probably be as sound a measure of unemployment relief as the government at that time could well adopt. The Canadian National directorate did make arrangements and provide for keeping their shops open. They might 'have closed them, and a great many of their employees would then of course have come on relief. Having regard to the fact that the Canadian National Railways, receiving as they do their money from this parliament, were keeping their
Relief Act, 1933

shops open, it was the opinion of the government, in view of the situation in which the Canadian Pacific Railway found itself, that provision should be made for the loaning to the Canadian Pacific of the amount of $1,400,000 odd in order that they might keep their shops open for a similar length of time. With reference to the authorization of a further $1,000,000, that money, while authorized, has not yet been spent, as the return of the wages paid has not yet been submitted to the government.


Ernest Lapointe: The Canadian National
Railways did not get any advance from that relief fund?


Richard Bedford Bennett: Perhaps I might explain, as the hon. Minister of Labour was not then in that department. The former Minister of Labour, Senator Robertson, dealt with this matter, and under the arrangements made, the Canadian National shops were kept open on part time without a shutdown, but the Canadian Pacific Shops had been closed, and it was a question as between giving direct relief and loaning the money to keep the shops in operation for the period of time mentioned in the order in council. But the order in council was not passed until long after the expenditure had been incurred, and with the application there were filed the vouchers signed by the workmen for all the moneys thtat had been expended for actual labour, as represented in the order in council.
There is one further thing to be said. The company thought that if there was an improvement in business it would not be essential that they should get a loan, but when there was not that improvement as expected, the order in council was passed. It will be observed that the order in council is dated September 30, 1932, long after the expenditure had been incurred, the expenditure being made in the month of December, 1931.


Ernest Lapointe: My question relates to
the Canadian National Railways shops. What has been done about them?


Richard Bedford Bennett: They were not dosed.
Senator Robertson made an arrangement that permitted the Canadian National shops, by staggering employment, and with partial shutdowns, to continue open, and the recital in the order in council has reference to the arrangement made by Senator Robertson, with which the present Minister of Labour was not then familiar.


Ernest Lapointe: May I refer my right
hon. friend to an answer that he gave me this 
session on November 8, at page 924 of Hansard. The hon. member for Maisonneuve (Mr. Jean) had asked a question which included this:
4. Did the government make similar advances to the Canadian National Railways?
My right hon. friend, the Prime Minister, did not reply at first to that part of the question, and I asked him what about part 4 of the question, reading, "Did the government make similar advances to the Canadian National Railways?" And the Prime Minister replied:
I thank my hon. friend for bringing that to my attention. Yes, the government did make similar advances.
That is not what my right hon. friend says now.


Richard Bedford Bennett: That is what I wished to convey at that time, and if the hon. gentleman had so desired it could have been amplified. There were in point of fact larger advances to the Canadian National than to the Canadian Pacific, but the advances were made by not shutting the Canadian National shops down during that period. There was more employment and a lessening of unemployment by the shops continuing to remain open during that whole period under consideration. There never was a shutdown of the Canadian National shops during that period, whereas in the other case there was a shutdown.


Ernest Lapointe: But any aid given to the Canadian National Railways was not taken out of this vote?


Richard Bedford Bennett: Oh mo, none at alll, so
far as my memory goes, except the ties, as was mentioned by the minister a few minutes ago.


Clarence Joseph Veniot: I brought this question up
the other day, and to-night the Prime Minister leaves the impression on the committee that there was no closing down of the Canadian National shops, that there was continuous work.


Richard Bedford Bennett: Not continuous work,
but not a continuous shutdown.


Peter John Veniot: There was not an absolute
shutdown in the shops at Moncton. The work was intermittent, the shops working sometimes four days a week, and so on.


Mr. MANION:: That was true all over
the country.


Peter John Veniot: Yes. But the point I wish to make is that while the Canadian National shops were kept open in an intermittent way

Iieliej Act, 1933
for purposes of relief, the money so expended never came out of the relief money voted by this parliament; it came out of the earnings of the Canadian National Railways, and the earnings of the road not being sufficient to meet the expenses, that amount is charged up as part of the deficit of the Canadian National Railways. Now to meet that deficit we have borrowed money on which we are paying 4} or 4} per oent. While we are charging interest to the Canadian National in that regard, we are loaning money to the Canadian Pacific at no interest at all, and in order to pay the Canadian Pacific the money that was earned under that order in council we floated bonds on which we are paying 41 or 4| per cent interest. I claim that it is not fair. It is not treating the Canadian National system right, and especially the Atlantic section, which during last year in the reduction of operating expenses was cut down to the expenditure of one-half of the whole difference between 1931 and 1932, as compared with the total mileage of the Canadian National railways throughout Canada. If we are going to furnish money to the Can* adian Pacific without charge, and we are going to say to the Canadian National, "Keep your shoips open for a certain number of days in the week or a certain number of days in the month," and then charge that expenditure up as part of the deficit of the Canadian National and make them pay interest on it at 4J per cent, I claim that we are not dealing fairly with the Canadian National.


Richard Bedford Bennett: The only difficulty about the hon. gentleman's observations is that they happen to be inaccurate.


Clarence Joseph Veniot: They are not.


Richard Bedford Bennett: That is the only difficulty, and I think I can satisfy him on that point- even the hon. gentleman himself. In 1931 there was a surplus of revenue over expenses on the Canadian National Railways.


Clarence Joseph Veniot: Not on the Atlantic division.


Richard Bedford Bennett: Excuse me-on the system as reported; and the operating expenses include charges for the keeping open of the shops. The surplus was approximately $2,000,000.


Clarence Joseph Veniot: How much?


Richard Bedford Bennett: $2,000,000. In 1932 there was also a surplus of approximately $5,000,000. So that no part of the deficit paid by this parliament had reference in any way, shape or form, directly or indirectly, to the operating expenses in which were included charges for
the keeping open of the shops. The expense of keeping the shops open was charged against the operating expense of the road, from week to week and from month to month, and at the end of the year there was a surplus of income over operating expenses. The deficit was with respect to interest on capital, improvements and betterments.


Peter John Veniot: I do this with some trepidation, but allow me to correct the right hon. Prime Minister. There was no surplus on the Atlantic region, and that is what I am talking about. There was a deficit of over $5,000,000 in 1931 on the Atlantic region, part of it being charged up to the Maritime Freight Rates Act, and the balance charged to operating deficit of 1931. I know whereof I speak. I rely on the records laid on the table of the house. I refer to the Atlantic region, and if the right hon. Prime Minister attempts to show there was a surplus which included the whole Canadian National railway system, he is wrong. I do not accept his word, because I know I am right. It is a matter of choosing between two facts; under the rules of the house I am not bound to accept the Prime Minister's word; knowing I am right I cannot accept it. In the year 1932 on the Atlantic region of the Canadian National railways there was a deficit of between $4,000,000 and $5,000.000. Those shops were kept open intermittently for the purpose of helping out the unemployed. At the time we were charging as a deficit the operation of the Moncton shops, we were loaning money to the Canadian Pacific Railway without interest.


Richard Bedford Bennett: I hesitate to trespass upon the time of the committee; I do not wish to waste the time of hon. members by talking about two incomparable matters. I was talking about the Canadian National railways system; the hon. member who has just taken his seat was talking about the Atlantic division. I am not talking about the Atlantic division. I have said that in the year 1931 there was a surplus of 82,000,000 on the operation of the Canadian National system. That is all I am concerned about. I could point out a dozen places where there were deficits in the Canadian National system, but at this time I have simply stated that there was a surplus of revenue over expenses. That is all I have to say.


Peter John Veniot: I have more than that to say. The Prime Minister should know, and I am sure he does, that the Atlantic region, the old Intercolonial, the shops' of which are at Moncton, is not under the Canadian National railway system. Their accounts are
Reliej Act, 1933

kept separately. The Canadian National directors are authorized by order in council to manage the road. As I said the other day, the Atlantic section represents a bond between the maritime and the central provinces which was arranged at the time of confederation. All governments have religiously safeguarded the status of the old Intercolonial by saying, through order in council, that the members of the directorate of the Canadian National system on behalf of the government of Canada shall manage the road, shall keep the accounts separate and submit them to parliament. Under that arrangement the Atlantic region has had a deficit during the last five or six years. Therefore I submit the Prime Minister's argument does not hold water.


Abraham Albert Heaps: I spoke a week or so ago concerning a matter which has just been mentioned. I addressed the Minister of Railways with regard to men employed at the railway shops as the result of a grant given by the government to the Canadian Pacific Railway. I have in my possession a couple of letters concerning this important point. Some of the men employed in the shops of the Canadian Pacific Railway claim they have not received the amount of work they should have received as a result of the grant given by the government to the railway company. They claim the work they should have done was being done by the foremen on a monthly basis. Because the men who were employed on a monthly basis were doing a great deal of the work, those who were employed on an hourly basis did not have the opportunity for work they should have had. If such is the case it means that the advantages gained by the grant given to the Canadian Pacific have to a large extent been nullified by the action of the railway in giving work to permanent employees who, in any event, would receive their monthly cheques.
I believe the Prime Minister said to-night, as well as on a previous occasion, that some vouchers signed by the men had been presented either to the cabinet or to parliament.
I am wondering whether those vouchers will be open for inspection, so that those who today are urging that the men on an hourly basis have not been treated fairly might receive some satisfaction. Could the vouchers be looked into so that we might ascertain whether the men received the advantages which they should have had from the moneys granted by parliament?


Richard Bedford Bennett: There are several volumes of vouchers respecting some 8,000 employees scattered across Canada from the Atlantic to 
the Pacific. Those vouchers are filed at the Privy Council office. I shall speak to the Clerk of the Privy Council so that it may be possible for the hon. gentleman to examine them.


Ernest Lapointe: Is this money advanced to the Canadian Pacific to keep all their shops open? Is there any specification as to what shops will be kept open? Because I know at the present time in my own city and my own constituency employees in shops are threatened with unemployment. I know that negotiations are being carried on between the city council and the company. If a million dollars was advanced to keep the shops open I suppose Quebec will have the same treatment as other places where there are shops?


Richard Bedford Bennett: All the shops were kept open, but it was a period of time during the Christmas season. It will be observed in 1931 the work commenced some time past the middle of November and continued up to the last work day before Christmas week. The same course was followed in 1932. The agreement was-and I have every reason to believe it was earned out-that there should be no discrimination, but that all the shops should be worked for the number of days the money would permit. But it was in November and December, 1932 that it was done.


Ernest Lapointe: But the moneys are to be paid in 1933?


Richard Bedford Bennett: Yes.


Armand Renaud La Vergne: Shall the resolution
carry?


Alan Webster Neill: No.


Joseph Philippe Baby Casgrain: During the past few
days we have heard a discussion concerning relief measures in the province of Quebec. Pemsomally I do not intend to speak at length concerning points already covered by other lion, members. I am .aware that some people find fault with certain legislation which has been in force in the province of Quebec. In the province from which I come I notice the law has been administered through the efforts of the Minister of Colonization, Game and Fisheries, the Hon. Hector Laferte. I hold no brief for him or for the provincial government in this matter, but I think it is fair to say that the law has been administered by the Department of Colonization, Game and Fisheries of the province of Quebec in a fair way, and that the people in the various districts tvhere settlements have been made are satisfied. For instance in the district I have the honour to represent in this house I know

Relief Act, 1933
that some new settlements were established behind Ste. Agnes and St. Simeon in the county of Charlevoix, also the north shore of the St. Lawrence, and in places called Mille Vaches, Les Escoumains, Canitons Latour and Laval and at Manikuagan. I have here the whole report of the Department of Colonization of the province of Quebec for the year 1932 and it is stated at page 88 that 71 families have been settled in one district and 44 the other.
But, Mr. Chairman, coming back to this movement, as was stated this afternoon by the hon. member for Kamouraska, while the government may claim this policy as its own, nevertheless I think it is not the policy of this government; it is not the Gordon scheme as we might call it, because long before this government ever had a back to the land policy we in the province of Quebec, the government that is to-day administering the affairs of that province, the Taschereau government, had started this movement of colonization.


Mr. SAUVE:: Hear, hear.


Joseph Philippe Baby Casgrain: My hon. friend the
Postmaster General says "hear, hear." I know myself that since I have had the honour to represent the district I do represent in this house, on the river Outarde near Outarde falls great districts were settled. Families were brought from Other parts of the province of Quebec, where there are good lands, and people were established there through the efforts of the provincial government as far back as 1926 to 1930. Therefore, I think the adoption of this back to the land policy by the government in Ottawa is due to the example and the good work of the government of the province of Quebec.
While on this subject I would like to say a word with respect to the hon. Postmaster General. I want to pay a tribute to him-* for once we can agree: I can say that he has done some good, because in one of the districts I have just mentioned there was a new place called St. Isidore le Laboureur, behind St. Simeon, for which a post office and mail service was requested. I asked the Post Office Department ito grant this favour to this new settlement, and I have received confirmation of the success of my efforts in obtaining the post office and mail service through the Postmaster General. I think that is a desirable thing he has done in helping these people, giving them the services necessary to make their settlement attractive. I think also, Mr. Chairman, it is a good way to make
these people favourable and to minimize the evils for which this government have been responsible since they have been at the head of affairs in this country.


Arthur Sauvé: This is not my birthday!


Joseph Philippe Baby Casgrain: There is one other point to which I wish to draw the attention of the acting Minister of Immigration and Colonization. The hon. member for Kamouraska this afternoon mentioned that last night the minister said that through the efforts of his department people to the number of 100,000 or more have been attracted and brought in to settle in these different places. With the hon. member for Kamouraska I take exception to that statement as indicating the number of people who have been settled in these various places. I have mentioned a few settlements in the district I have the honour to represent, and I think it would be well for the minister to advise the committee in detail respecting the other districts of Quebec and the other provinces of Canada in which people to the extent of 100,000 have been settled through the efforts of this government. I express the opinion that if a lot of people have been settled on the land it is due not so much to the policy adopted by this administration as to the policy initiated by the government of Quebec, and I dare say that in Ontario and elsewhere they may have had in effect a similar scheme long before the federal government started its activities along that line.
I think also that the remarks made by the hon. member for Bellechasse (Mr. Boulanger) should receive the careful attention of the minister. He said that only heads of families are entitled to the benefit of this plan. The sons of farmers in our province who are qualified to settle on land in these new districts ought to be encouraged just as much as heads of families, because it would mean that people would be encouraged to stay in our province to the benefit not only of the province of Quebec but of the whole of Canada.
There is also the point brought up by the hon. member for Temiscouata (Mr. Pouliot) as to the classification of people who ought to go on the land. I agree with the remarks made by some hon. members this afternoon that it is better to attract to the land or keep on the land those who are accustomed to country life than men taken from the slums of cities where they have been for a good many years, idle maybe, people who for a long time have had no contact with the land and who therefore cannot have the same energy and courage to start anew, especially if they are advanced in age.
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George Gordon: We do not take that class of people at all.


Joseph Philippe Baby Casgrain: I say that the efforts
of this government and of the provincial governments should be directed to the settlement of the sons of agricultural families. In the report published this year by the Department of Trade and Commerce at page 184, it is stated that only heads of families can benefit from such measures. I take issue with the department on that point. I think the sons of farmers in the various provinces ought to be encouraged to avail themselves of the benefit of this back to the land scheme rather than people in the cities. And I think they ought to be encouraged as much as heads of families. I know in my own district there are many people who would be willing to take advantage of such a scheme. I think, Mr. Chairman, that this government is not entitled to take the full share of credit for what has been done, because it could not have been done without the assistance of the provincial government, which has indicated where the settlement should take place. And as I have said, the provincial government was away ahead of this administration in adopting the back to the land movement.


Alan Webster Neill: Mr. Chairman, I suggest that the present moment is an appropriate one for the minister to give us some information concerning the unemployment insurance proposals. I know he is straining at the leash and yearning to give us out of his wealth of experience and knowledge and ability a statement on the matter. He was present at the conference with the provinces and therefore is in a position to inform us in regard to this very important subject. The public will not be satisfied with any mere evasion of the subject. They had reason to believe that action would be taken on this matter, but the session is going on and I do not know of any other occasion when this question could be brought up. I think that in considering the question of relief it is quite appropriate for the minister to give us the fullest possible information on the prospects of having unemployment insurance put. into effect in Canada.


George Gordon: Dealing first with the observations of the hon. member for Charlevoix-Saguenay, let me say at once that there is no intention, and I hope there never will be, of trying to take credit away from the province of Quebec with respect to colonization. If the work carried on by the province of Quebec along these lines in the past needed

defence, I defended them in the house against the impeachment of the hon. member for Temiscouata. Anyone who have even casual knowledge of the history of the development of Canada should not be slow to commend the actions of the successive governments of the province of Quebec even before confederation, and in fact almost since the beginning of settlement, along this line.


Joseph Georges Bouchard: If the minister would allow me, I think he should make a distinction between colonization and the back to the land movement. I think several hon. members have become confused. There are two systems in Quebec, but colonization before confederation has nothing whatever to do with the back to the land movement.


George Gordon: I was endeavouring to reply to the remarks of the hon. member for Charlevoix-Saguenay, who referred-and I think very properly-to colonization and the back to the land movement. So far as I am concerned I see very little difference between the two, but perhaps my hon. friend may see some refinements that I am unable to distinguish. There is no question of who is to get credit for this or that. If I may use the w'ord, Mr. Chairman, I do not care a continental who gets the credit so long as we either lead the way or supplement the efforts of those leading the way in order that the desired object may be attained, that is, that those who are ready and willing and desirable may take full advantage of this opportunity to make themselves independent and selfsustaining. If any success has attended the efforts of this government, in conjunction with the provinces and the railway companies; if any credit is due anyone with respect to any assistance this government has been able to give, I will hand that credit to anyone. I will give it to the hon. member for Charlevoix-Saguenay. He can take it to himself with my blessing; it will be his very own, so long as we do what we are hoping to do. This business of taking credit one way or the other at a time like this does not give me any great concern.


Jean-François Pouliot: Did the minister say I had impeached the province of Quebec? Were those the words he used?


George Gordon: I do not know that I can recall my exact words, but in substance I said the hon. member for Temiscouata had criticized the colonization efforts of the government of the province of Quebec. So far as I know the efforts of that government deserve credit, and my contact with their officials

Relief Act, 1933
certainly has been pleasant and profitable. I have found them desirous of accomplishing what has been my objective, and probably they had that end in view long before I came into public life.


Jean-François Pouliot: Mr. Chairman, I rise to a
question of privilege. I am sorry to interrupt the minister, but he said he had to defend the province of Quebec against the impeachment of the hon. member for Temiscouata. Those were his words; I was looking at pictures but listening to his speech, and my understanding is corroborated by those about me on this side of the house. Is it fair for a minister of the crown to use such language, especially after I repeated my complaints this afternoon? I was not complaining of the government of Quebec; I did not say a word against the government, against the provincial minister or against my hon. friend. Is it fair to give a false interpretation to my words? I ask the minister to withdraw his reference to the impeachment of the province of Quebec by the hon. member for Temiscouata; it would be only fair.


George Gordon: I am quite content to let the words of the hon. member for Temiscouata, as they will be revealed in the pages of Hansard, speak for themselves. If I used words which were not exactly his I can only say that of course my memory is not so good that I can follow him exactly. Certainly I gathered from his remarks to-day and a few days ago that he roundly condemned the administration of the colonization department of the province of Quebec.


Jean-François Pouliot: By certain employees.


George Gordon: The government takes responsibility for its officials, of course. The hon. member went so far as to say that the colonists who were sent out by the government had to eat grass and roots and so on, and I believe he even said they lived like swine. I do not come in contact with the provincial colonization men and I have nothing to do with provincial policies in Quebec, but I do know that this department is in touch with our committee, which consists of the representatives of the colonization departments of the railways, of our department and of the Quebec department. From my observations and from what I can gather I cannot conceive that those men would be parties to a colonization effort such as has been described by the hon. member for Temiscouata.
With regard to the situation in my hon. friend's own constituency I can only say that under the assisted plan we have placed only
two settlers in that county, and I have been instructed by the head of the colonization department of the Canadian National Railways that from both of these settlers he recently received communications stating that they were getting along well, that they were very happy to be located where they are, and so on. Our locations are almost entirely in the Abitibi and Timiskaming district, and I have lengthy reports concerning the way those settlers are getting on. There is throughout a spirit of satisfaction with the locations upon which they are placed and with the conditions under which they are living, and a feeling of optimism prevails amongst these settlers. There were not housed together in buildings, men, women and children huddled together, as suggested. The hon. member for Temiscouata was not in his place this afternoon when I explained that the heads of families preceded the families. They were taken care of, their locations were picked out in a fertile section of the country adjacent to the mining areas of northwestern Quebec, and their families followed after them. A representative of the Canadian National Railways, because it is the Canadian National that runs through that country, has made many trips visiting these people. Their churches are being built and the general atmosphere is one of optimism.
I will not delay the committee by reading all the communications I have received, or even a number of them, from that locality, but I can assure hon. members that what I say is correct with respect not only to the feeling that exists amongst these settlers but with respect to their confidence in the future. Hon. members who represent city constituencies must bear in mind that it is difficult for them, if they have not been around a great mining area like northwestern Quebec and parts of northern Ontario, to visualize the opportunities that are there for the Canadian people. It is a wonderful thing for the country that we have such places in these parts of Canada. It is quite true that the farmers there are experiencing difficulties, just as the farmers throughout the world are; but they have excellent locations and their homes are largely unencumbered, inasmuch as their locations were crown lands; and while across the Ontario boundary the settlement is older than it is in Quebec, nevertheless wonderful strides are being made in the colonization of that country. I do not say this purely because the hon. member for Temiscouata doubts the soundness of the program that is being contributed to by the federal government; I state it merely as a fact, so that the committee will get a picture of the movement of these settlers
Relief Act, 1933

Since I have been a member of this house I have refrained from quoting from newspapers, but if I may be pardoned for doing so on this occasion, I would read what the deputy minister of the colonization, game and fisheries department of Quebec had to say with reference to a visit to that area:
In an interview accorded a Chronicle-Telegraph representative this morning, Deputy Minister L. A. Richard of the Provincial Colonization, Game and Fisheries Department, expressed his amazement at the unbounded enthusiasm which he had personally witnessed amongst the "back to the land colonists," who were only a few weeks ago settled on arable and wooded lots in the Temiskaming district.
Mr. Richard, who accompanied his minister, Hon. Hector Laferte, and a number of rail-waymen and prominent citizens, has just returned from a visit to the newly formed settlement, not far from the banks of the "Lonely River," where these hardy sons and daughters of Quebec are going to wrest a home and comfortable living from mother earth who they deserted in their more prosperous days, but who has received them back again in the days of their adversity.
In prefacing his interview, Mr. Richard explained that when these heads of families were picked for the great experiment, it was with the knowledge that they were former farmers, and all of them knew a smattering of carpentry, that is, they knew how to put together a log cabin.
"The visit to these settlers of ours was a revelation to me," said the Deputy Minister. "I had been told they were satisfied, but I was not prepared to see all of them bubbling over with unbounded enthusiasm. They are! Everyone of them! There wasn't a kick anywhere, and I surely thought there might be, as they had been placed on the land so late in the year.
"I talked with many of them and their speech was just the same. Thankfulness that at last after many weary months of wrestling with the wolf at the door, they were their own masters. Living in houses they had built themselves. Their fate in their own hands; their immediate wants provided for by a beneficent government, or rather I should say beneficent federal, provincial and municipal governments. No taxes to pay; no irate landlords demanding their pounds of flesh; soil which will grow almost anything; brooks and streams teeming with all kinds of fish in season, also a pure water supply brought from the surrounding hills; a moose perhaps, and partridge and hares running around waiting to be bagged and put in the larder."
I am sure this part of the interview will be quite interesting to the hon. member for Temiscouata, the hon. member for Charle-voixnSaguenay and, I might almost venture to suggest, the hon. member for Comox-Alberni:
This picture is not exaggerated! These people are happy, and you would have thought so too if you had seen about a thousand of them, men, women and children, as they attended open air mass on Sunday last, and witnessed the first marriage in the settlement
LMr. Gordon.]
which by the way is to be called St. Monica de Rollet, after the wife of Louis Hebert, the first Canadian settler. Incidentally Hon. Mr. Laferte gave the bride away and kissed her heartily.
I have many such communications from these settlers. Now, I do not think they will be one hundred per cent successes; they never have been in the past. We do look forward however to a considerable and substantial permanent settlement, although there will unquestionably be disappointments.
With reference to the question asked by the hon. member for Comox-Alberni, I do not think the measure now before the house affords the proper opportunity to discuss the matter of unemployment insurance, which is a very broad one. Many countries in the world have attempted some sort of unemployment insurance, and many private concerns have endeavoured to fashion a plan of some kind that would1 take up the slack in times when industry had failed to give that job security which is so essential to the workers in industrial centres. Plans have been instituted1 in certain countries in Europe, and in the United States industries have set up schemes-such industries as the General Electric Company-in connection with the question. The whole question of unemployment insurance is one of great complexity. The hon. member for Comox-Alberni, I take it, would like to know whether a measure of that kind will be brought before the house this session. I can tell him it will not. No government would be justified in hurriedly embarking on a project the success of which would be founded perhaps in very large measure upon a careful study of the various factors that enter into the consideration of it.
The matter is under consideration by the government, as it is unquestionably under consideration by many public bodies, and it is hoped that some solution will be found in order to give to the workers that security during seasonal unemployment, or unemployment for any other reason, which many people think -the workers should enjoy. No government would embark hurriedly on a plan of that sort without having canvassed every possibility of success or failure. We had to take into consideration the necessity of establishing it upon a firm foundation so that it would not meet with disaster during the course of its operation. I think we were adopting a wise course with respect to so important a subject.


Alan Webster Neill: Could not the minister tell
us what progress was made at the recent interprovincial conference? The Prime Minis-

Relief Act, 1933
ter was very definite in his assurance last November. I quoted his remarks yesterday and I think he said that they might be able to introduce a bill at this session. I believe he used the word "guarantee" that steps would be taken at the coming conference to have arrangements -made which would make it possible. I should like to know what progress was made or what obstacles were encountered at that conference. It has been stated that this is not an appropriate time to discuss this -matter, but I would point out that it -has a distinct bearing upon the question we are considering. We are going to vote $20,000,000 for direct relief and perhaps vve would not have to spend so much if an unemployment insurance policy were put into effect in the near future. It would be a sort of alternative. No one is suggesting thait the government should plunge hurriedly into this matter. The question was brought up on April 29, 1931, nearly two years ago and the Prime Minister then told us very distinctly what he proposed to do. I -am not trying to harass the minister in any way but I do not think it is out of place to ask for some definite report upon the progress which has been made. There is no use talking about Europe or the United States; this is Canada and this thing has been hanging fire long enough. The Prime Minister was very definite last November and I think we are now entitled to a definite statement.


Mr. BEAUBIEN:: Mr. Chairman, I would
not have taken part in the discussion on this resolution had it not been for certain words uttered by the Prime Minister on March 3 which to my mind reflected upon the province of Manitoba. As a member from that province I think I would be negligent in my duty if I did not put the facts before the house. On March 3, the Prime Minister said:
In the province of Manitoba they had wh-at they called a savings bank in which the people of that province had deposited some $12,000,000 in small savings accounts. When the cheques were being written to withdraw that money what did they have? They had the promises to pay, the I.O.U.'s of the province of Manitoba. The money was gone; in its place had been substituted I.O.U.'s of the province of Manitoba that could not be sold. . . . We guaranteed the $12,000,000 of those deposits to enable the depositors to draw out money with which to live. That was one of the guarantees we made under the statute, and the order in council was laid upon the table of this house. I
I do not inbead to read the order in council, but I should like -to refer to the report of the committee of the legislative assembly of Manitoba which investigated the closing of
the savings bank. This report shows thait that bank had as guarantees for the deposits the following securities:
Railway bonds and registered stock guaranteed by the Dominion of
Canada	$2,398,728	44Dominion of Canada bonds	
69,000	00
Ci-ty of Winnipeg registered stocks
and bonds	 495,278	42
Province of Manitoba Exchequer
bonds	
6,615,000	00Provincial and municipal stocks, bonds and debentures (most of . which guaranteed by the province of Manitoba)	
3,051,313	73Province of Manitoba farm loans bonds guaranteed by the province of Manitoba	
1,750,222	63


George Gordon: What is the date of that report?


Charles-Philippe Beaubien: The investigation took place during the session of 1932. The savings bank had closed before the legislature met.


George Gordon: I should like to know the date when it is said that these securities were in fact in the hands of the bank unencumbered.


Charles-Philippe Beaubien: The last report filed is for the year ended April 30, 1931. The report sets out in detail the investments held by the savings bank at that time, which were those I have just read. The report continues:
The above amounts represent the book values of these securities. The estimated market value as of April 30, 1931, was $14,764,743.55.
The deputy provincial treasurer in his evidence states that at the end of August there was no material change in the value of these securities since April 30 of that year; in fact their value remained about the same until England went off the gold standard.
There was no material change in the nature of investments at the time the office closed. At that time the investments were as follows:
Dominion government guaranteed
securities	$ 2,470,800 87
City of Winnipeg stocks and bonds 495,278 42 Province of Manitoba exchequer bonds and debentures and other municipal stock guaranteed by the province	 11,514,528 36
Making a total	$14,480,607 65
The evidence shows and the committee find that after England went off the gold standard the market for all classes of securities was in a very chaotic condition, in fact for a period following this time there really was no market at all at which bonds could be sold for reasonable prices. Such conditions continued until the office closed.
The committee points out that the act contemplated that the moneys received by way of deposit were to be invested in the manner provided for in the act, and this particularly refers to the securities of the province. Notwithstanding this fact the trustees had, at the

Reliej Act, 1933


George Gordon: Has the hon. member the total value of the bonds which were held unencumbered by the bank at the time it went out of business?


Charles-Philippe Beaubien: I did not catch that.


George Gordon: I said the bonds and stocks which the savings office held unencumbered in its vaults as security against the deposits when the bank closed.


Charles-Philippe Beaubien: According to this report the security was exactly the same then as it was before, namely:
Dominion government guaranteed
securities	$ 2,470,800 87
City of Winnipeg stocks and bonds 495,278 42 Province of Manitoba exchequer bonds and debentures and other municipal stock guaranteed by the province	 11,514,528 36
Total	$14,480,607 65
What are the conclusions of the committee which investigated the closing of the savings office? They are as follows:
In conclusion the committee finds:
1.	That the savings office was in a sound position as of the 31st day of August, 1931, immediately preceding the precipitous decline in the world market for securities. _
2.	That the deposits of the savings office were invested in strict accordance with the statutes authorizing the office; that the percentage of provincial securities held by the office was in accordance with the purpose for

which the savings office was established; and that the * percentage of such deposits held in cash and invested in dominion government securities was such as to ensure the office being able to meet every emergency that could be foreseen.
3.	Then following the precipitous decline in the securities market, the government secured a credit of $1,000,000 to meet any possible emergency arising from this circumstance, and this provision proved quite adequate for such purpose.
4.	That the business of the savings office was normal up until about January 11, 1932, when the unusual withdrawals of deposits commenced as a result of rumours.
5.	That the rumours which started the run which resulted in the closing of the savings office apparently were in part the result of a deliberate and organized campaign.
6.	That any rumours relating directly to the provincial savings office, which were traced to individual citizens, were circulated by the following:

The names are given but I shall not read them:
7.	Your committee is of the opinion that had the Dominion government given the necessary guarantee as requested, the savings could and would have been saved to the province of Manitoba. If such request had been granted it 'would not have been necessary for the Dominion government to assume any greater responsibility than it assumed when it finally guaranteed the banks.
8.	Your committee find that the action of the Dominion government in refusing the request of the province for such guarantees cannot be justified in view of the guarantee given later by it to the banks, and in view of assistance given to other provinces.
9.	The committee finds that the suggestion made that Premier Bracken went east in company with any other person or persons for the purpose of selling the savings office, or that he or any person or persons associated with him at any time offered to sell the savings office, is without foundation.
I think, Mr. Chairman, that these facts should be put before the house. The Prime Minister referred to the I.O.U.'s of the province of Manitoba. We know that the province of Manitoba is going through some difficulties, and we know that this government also is going through some difficulties, but at the same time I do not think it gets us anywhere to throw reflections on the securities of the province of Manitoba. The province is doing the best it can in trying to meet the situation. I know that it is probably not as sound as it was a year ago or two years ago. I do not know anybody's securities that are as sound to-dav as they were one year or two years ago. The government admits that itself when it allowed the banks and insurance companies to value their stocks as of a day six or twelve months previous to make a better showing at the end of their financial year. I think I have put the facts before the house, Mr. Chairman, in a true light.	[DOT]

Rcliej Act, 1933


Richard Bedford Bennett: Mr. Chairman, this afternoon, the Minister of Finance made the following statement:
By order in council of April 28, 1932, P.C. 972, effect was given to an undertaking by which, in the month of February of that year, the dominion guaranteed the chartered banks doing business in Winnipeg from loss in respect of the assumption by these banks of all liabilities of the Province of Manitoba Savings Office. The banks received from the province of Manitoba as security for the assumption of such liabilities, $12,442,400 one-year 5J per cent treasury bills, maturing February 27, 1933, and on the maturity of these bills the banks were willing to accept a renewal, less the sum of $334,098 paid on principal account, provided the guarantee was continued. This the governor in council authorized under minute of February 22, 1933, P.C. 318.
That is the transaction so far as the Dominion government is concerned.


Charles-Philippe Beaubien: It proves that the province of Manitoba was pretty fair. They paid something on it anyway.


Richard Bedford Bennett: I do not think that that observation calls for any reply. That $2,470,000 of dominion securities to which reference has been made 'was hypothecated to the banks, to enable the province to secure cash with which to meet the demands of depositors. When that was exhausted and there came a day in February, 1932, when there was no longer anything left in the way of cash to meet the demands of the people who had put their money in the bank, then the bank either had to close its doors or get cash from some other source. It secured it from the chartered banks of Winnipeg, making its own bargain with the banks in that city, the bargain being a bargain made between the chartered banks and the province of Manitoba. The banks, as I explained in the statement I read to this nouse last year, stated that they were not prepared to become responsible for deposits aggregating $12,000,000 on the I.O.U.'s of Manitoba, and requested a guarantee which we gave to prevent the depositors from failure to get their moneys.
So far as the report is concerned, we all know about it. It was a report made before the last provincial election. It is partisan, it is incorrect, and what is more, it was made for a particular purpose. No good end will be served by discussing it here now, for this is not the tribunal that directed1 the investigation or held it. It was held by the province under the direction of its ministry. A report was brought in to the house just prior to the election. The report reflected upon a number of men who, it said, had started 53719-2071
rumours with respect to the solvency of the savings office, and the names were given, one of them a member of the legislature. The result was, of course, an acrimonious discussion on the part of everybody connected with the transaction. It served its purpose, but it did not improve the condition of the province of Manitoba.
It is incorrect, for instance, to say that the province of Manitoba has not received consideration at the hands of this government as other provinces have. It has received more consideration relatively to its population, so the Minister of Finance told me the other day, than any other western province. That is the position as the Minister of Finance explained it to me the other day when I was going over the figures, and I believe them to be correct.
The letter to which I referred the other day which was sent to the province of Manitoba was sent to all the western provinces, and one province, Manitoba, has sent a reply in which in large measure they indicate the correctness of the views which were held by this government. To preserve the financial integrity of the province of Manitoba it will be necessary for the Dominion government to make very large payments, many millions of dollars, and no useful purpose can be served by discussing in this house a report made by a committee appointed by a provincial legislature, and which in the view of at least half the people of the province is unsound, incorrect and unwarranted in fact.


Charles-Philippe Beaubien: May I say to the Prime Minister that no useful purpose can be served by the statement which he made in this house on March 3. When did we eveT describe provincial exchequer bonds as I.O.U.'s? I have given I.O.U.'s, but they were always written on pieces of paper. In my view such a reference was a reflection upon the securities of the province of Manitoba. May I ask the Prime Minister this question: Suppose there had been a run on one of the large chartered banks, and the other banks did not come to its assistance, would there not be the same result as ensued in the case of the provincial savings bank?


Richard Bedford Bennett: I do not think any good purpose is served by answering supposititious questions. But since the question has been asked perhaps the committee would like an answer. There was a run on one of the chartered banks in Canada. It was a run predicated entirely upon the failure of one of the great brokerage firms of this country. It was thought by many people that the bank
Relief Act, 1933

might be a failure; 810,000,000 in. deposits were withdrawn. No assistance was given by other banks, and ithere was no question of the government being asked for assistance.


Mr. POWER:: This might be the proper
time to read from an order in council P.C. 2693 dated October 27, 1931, about the time of the failure of the stock brokerage firm to which the Prime Minister has referred. I imagine this order in council applies to the situation in Manitoba. It is as follows:
His Excellency,
The Governor General in Council:
Whereas the acting Minister of Finance reports that, owing to the existing general depression, hut more particularly the recent international monetary developments, quotations have been recorded in the security markets for many high grade government securities which would not see-m to be normal or reasonable quotations, or such as might serve as a proper indication of the intrinsic value thereof, having regal'd to the fact that the security behind these obligations has undergone no fundamental change.
And whereas the chartered banks are required-
Not the savings banks.

under the provisions of the Bank Act, to show investment securities , in their monthly and annual financial statements at not in excess of market values;
And whereas representations have been made by the inspector general of banks that it is in the public interest that a reasonably stable basis of valuation be determined for such high grade security;
And whereas section 4 of chapter 58 of the statutes of 1931 provides that His Excellency the Governor General in Council shall have full power to make all such orders and regulations as may be deemed necessary or desirable for, among other things, maintaining peace, order and good government throughout Canada;
Therefore His Excellency the Governor General in Council is pleased-on the recommendations of the acting Minister of Finance and under the authority of section 4 of chapter 58 of the statutes of 1931 aforesaid, and of all other powers and authorities in that behalf- to order and it is hereby ordered as follows:
1.	That for the purpose of the return provided under section 112 of the Bank Act and schedule "G" thereto, and the annual report as directed by section 53 of the same act, the chartered banks of Canada shall, until this order is amended or rescinded, value the securities owned prior to the thirty-first day of August, 1931, at not more than the book value, or the current market prices thereof on the exchanges at the close of business on the thirty-first day of August, 1931, whichever may be the less, and the securities acquired since the thirty-first day of August, 1931, at not more than the cost price thereof.
2.	This order shall come into force and effect on the twenty-sixth day of October, 1931, shall apply to the returns of the chartered banks as from September 30, 1931, and shall continue in full force and effect until the first day of March, 1932, unless sooner amended or rescinded by competent authority.

I was informed some time in May last year that this order in council had not been renewed, and I take it it has not been. But for the purpose of the point which has been brought up I should like to call the attention of the committee to the fact that in the preamble to the order in council it is recited that "the market for high grade government securities has fallen, although the security behind these obligations has undergone no fundamental change." In other words the preamble deals entirely with high grade government securities. But the executory portion of the order in council deals with all securities. I imagine that under this order in council the banks, in their reports, were entitled to value Brazilian, Nickel, Canadian Pacific and all other common stocks as of their value on August 31, 1931, although as a matter of fact, when this order in council was passed, these stocks had fallen considerably. To-day they are considerably lower in value on the security markets of the world than they were at that time. It seems to me that to a considerable extent this was giving government assistance to the banks. It was at least supporting their credit to a considerable extent and permitting them to make reports of their securities at other than their real value on the ordinary security market.
Listening to the remarks of the hon. member for Provencher (Mr. Beaubien) I noticed that the report of the committee of the legislature of Manitoba called attention to the fact that the government had permitted a revaluation of securities held by insurance companies. Apparently they were not aware that the banks had been permitted to revalue their securities. I suggest that if the savings bank of Manitoba had been permitted the same valuation of its securities as the chartered banks of Canada were, there might have been a chance of saving it. I also draw attention of the committee to another paragraph of that report in which it is stated that if the government had come directly to the support of the savings bank it would have assumed no greater obligation than it did by supporting the chartered banks. I am not aware of all the details of the transaction, but it would appear to me that the people of Manitoba have a fairly legitimate ground for complaint when they say they were not treated as well as were the chartered banks of Canada.


Richard Bedford Bennett: I suppose, Mr. Chairman, it is within the knowledge of this committee that the savings office of Manitoba was not a bank. The observations to which we have just listened would leave the conclusion in the

Relief Act, 1933
minds of the committee that it was a savings bank. The province of Manitoba has no authority to conduct a bank. It has a savings office, as has the province of Ontario. And there are grave doubts in the minds of many as to whether or not the provinces have power at all to conduct the form of office they were conducting, which consisted in receiving from the people deposits withdrawable by cheque. It has been contended, and is still contended by eminent legal authorities, that neither province has a legal right to engage in that business. The word "bank" is not used for that very reason; "savings office," and not "savings bank," is the term used. If they were banks they would come within the provisions of the Bank Act; they have sought no authority from this parliament to open savings banks. There would be no reason why the province of Ontario or the province of Manitoba, if they so desired, should not obtain from this parliament the right to conduct a bank, and if they did they would be subject to the requirements of the Bank Act with respect to paid-up capital, the obtaining of a proper and appropriate directorate, and the conduct of business under inspection.
The moneys that were deposited in the savings offices at Winnipeg and other points in Manitoba aggregated the sum of $12,000,000 or more. In the month of January the depositors began to withdraw their money. As the province had no money with which to meet these demands-and nothing more clearly indicates what the science of banking really requires than this very transaction- they were called upon to secure the money from some source. They borrowed it from a chartered bank and gave as security for the loan thus obtained the bonds of the Dominion of Canada in which they had invested a portion of the depositors' money. As I understand the science of banking-my knowledge is limited-it consists in the maintenance of an equilibrium between time deposits and time loans on the one hand and demand deposits and demand loans on the other. If a bank ties up in time loans money required to meet its demand deposits it becomes insolvent. If it ties up its assets in time loans to an extent that makes it impossible for it to meet the cheques of its depositors, you have exactly the situation they had in the United States of America the week before last. In that country four thousand banks failed during the last few months. Why? Because they had taken deposits from people and invested the money in real estate, mortgages, and other assets
which could not be sold, and there was therefore no money with which the demands of the depositors could be met; being unable to pay they closed their doors and went into liquidation.
The province of Manitoba in the month of January had no money in its till-that is admitted. But it was able to borrow a certain sum of money from the Canadian Bank of Commerce by pledging its Dominon of Canada bonds, under an option agreement whereby the bank was entitled for a given time to buy them at a figure if the bank so desired. That was the source of cash for the province of Manitoba to put into its till to meet the demands of its depositors. When the run on the savings office began-and the committee of the legislative assembly reported that suspicion and rumour were largely responsible for it; I am not going to discuss that-they had to get money somewhere. Being unable to get further money from the banks they had nothing but their own I.O.U.'s. Objection is taken to the use of that term by me, but it is exactly what the security was-I.O.U.'s which could not be sold for the purpose of providing cash to meet the cheque demands of the depositors. Then it was that the chartered banks and the province made the arrangement to which I refer. That arrangement not being to the satisfaction of the banks, they said: "We will not do this with the security you offer us, because someone has to provide as much as $12,000,000, possibly the -whole of it within the next thirty days"-because although the province claim they were entitled to notice of withdrawals, I think the maximum was thirty days and perhaps in some cases the term was as low as ten days. So that $12,000,000 was the possible amount that the banks might have to supply, and the banks divided this among themselves rateably on the basis of their business in -the city of Winnipeg, each assuming its proportion of responsibility to meet the demands of the depositors. They said: "We will do this only on one condition, namely that the Dominion government give its guarantee." The banks had $12,000,000 and more of province of Manitoba securities, bonds and treasury bills, and with the guarantee of the dominion, they assumed the responsibility of meeting on demand the cheques of any depositors in the savings offices of Manitoba. I will not further traverse that matter.
The hon. member for Quebec South (Mr. Power) has referred to -the order in council of October 27, 1931. That had no reference, of
Relief Act, 1933


Ernest Lapointe: This has not been renewed?


Richard Bedford Bennett: No.


Ernest Lapointe: It is no longer in force?


Richard Bedford Bennett: No. With respect to
the other matter, that is the securities acquired by the banks after the 31st of August, 1931- and I think it is only fair to say that the banks were not very much interested in acquiring securities after that; they were interested in providing cash with which to meet any possible demands that might be made by their depositors-it is a matter of satisfaction to say that even though we are but ten millions of people and our riches are relatively not great, there never has been a moment when any cheque presented by a depositor, whether for a small or large amount, has not been honoured by our chartered banks.


Some hon. MEMBERS:: Oh, oh.


Richard Bedford Bennett: I am assuming always,
of course, that the drawer of the cheque was in funds at the bank himself. I was not contemplating the possibility of not sufficient funds being the answer, but apparently that has happened to us all, so hon. gentlemen were in good1 company with their province with respect to similar conditions and circumstances. I was pointing out, Mr. Chairman, that this is a great distinction when we consider some other countries. One does not want to be boastful of the institutions of one's own country, but up to the moment they have weathered the storm very successfully by reason of what I have just said, namely a proper appreciation of the fact that you cannot invest the money of the depositors in unrealizable assets beyond a certain margin and remain solvent. That is all there is to it. This order in council provided for

Relief Act, 1933
a temporary necessity that arose by reason of a complete demoralization of the world's markets, but there was no change in the real value of the securities that were held, they being, as I have said, the class of securities that banks purchase in order to take care of conditions which, in the wisdom of those who manage them, may at any time arise. It is common knowledge that difficulties have arisen in some of the great countries of the world. Corporations have drawn their cheques to meet their pay-rolls and limitations have been placed upon the amount that might be drawn; so much has been set as the maximum for each workman, and so much as the maximum for each executive. Even great insurance companies have had to apply limitations and restrictions as to the payment of cash surrender values and the making of loans on policies. This action was taken to prevent any possible disruption or disorganization of our banking system and to maintain the confidence of the depositors so that, with few exceptions, there were no large withdrawals from the banks, and the integrity of our institutions has been maintained.


Charles Gavan Power: I would not venture to
embark on a discussion of banking with the right hon. Prime Minister, but now that we are on this matter perhaps it might be just as well to clear it up. I gathered from the remarks of the Prime Minister that this order in council did not apply to securities such as those I mentioned, Brazilian and Canadian Pacific, but referred only to high grade securities.


Richard Bedford Bennett: No, I did not say that.


Charles Gavan Power: I have some recollection of having read a bank statement, or bank statements, in which I saw a column containing a list of railway and other securities held. I would assume that some of the chartered banks of Canada must have stocked up pretty heavily with Canadian Pacific, let us say, which was one of the best known securities, and which was considered almost as solid as the Dominion of Canada. If that were the case, Canadian Pacific stock, which was one of the securities they were permitted to value as of its market value on August 31 or its book value, most assuredly would be valued in the October statement at more than its real value in the markets of the world on that date. I hope if I am making any mis-statements I will be corrected, because I do not want to exaggerate the situation in any way or to say anything that is not correct. I would assume
that when Canadian Pacific fell to 12, let us say, as it did some time early in 1932, in the report made by the banks to the government it could have been valued at let us say 25. That was one of the points I was endeavouring to make. Whether or not the banks took advantage of this order in council I am unable to say, but it permitted them to make their reports for the months of September, October, November and December of 1931, and their annual report for that year, as well as their reports for the following months until March, 1932, showing the value of their securities on the basis set out in this order in council. The right hon. gentleman stated that a large proportion of the assets of Canadian chartered banks consisted of provincial and federal government bonds.


Richard Bedford Bennett: Not a large proportion. But I should not interrupt the hon. gentleman.


Charles Gavan Power: Then I will say that a considerable proportion, if my right hon. friend will agree to that, was invested in provincial and federal government securities because, we are told, these were liquid. I do not know that we ever had a better example of when they were not liquid than in the case we have been discussing. I suppose the same observation could be made with justice in respect to the banks in the United States which unfortunately have had to close. A large number of banks, under the state banking laws, were permitted to value their securities at other than the market value, but apparently that was not sufficient to save them from the liquidation which resulted, which forced a large number of banks in that country to close their doors.
I very much regret that I used the word "bank" with reference to the Manitoba savings office. I quite understand that there is some discussion as to whether or not provinces have the right to call these institutions banks, but I am not particularly concerned with that. This was an institution which held the savings of the people and, as such, it was entitled to whatever protection could be afforded. Whether or not it could be properly called a bank or an office is not material to the discussion; the fact that it was an office and not a bank should not be made an excuse for not extending to it all the assistance this government could give.


Richard Bedford Bennett: I will not trespass upon the time of the committee beyond saying that the form of return provided by the Bank Act,
Relief Act, 1933

which is chapter 12 of the revised statutes of Canada, calls for the bank to make a return of its assets and liabilities. Under the heading of liabilities it must describe:
Liabilities
1.	Notes in circulation	$
2.	Balance due to Dominion government after deducting advances for credits, pay-lists, etc	
3.	Advances under the Finance Act.
4.	Balances due to provincial governments	
5.	Deposits by the public, payable
on demand in Canada	
6.	Deposits by the public, payable
after notice or on a fixed day, in Canada	
7.	Deposits elsewhere than in
Canada	
8.	Loans from other banks in
Canada, secured, including bills rediscounted	
9.	Deposits made by and balances due to other banks in Canada..
10.	Due to banks and banking correspondents in the United Kingdom
11.	Due to banks and banking correspondents elsewhere than in Canada and the United Kingdom
12.	Bills payable	
13.	Letters of credit outstanding..
14.	Liabilities not included under
foregoing heads	
15.	Dividends declared and unpaid..
16.	Rest or reserve fund	
17.	Capital paid up	
Under these seventeen heads the liabilities of the banks have to be stated. Now we come to the question of assets, which are listed under twenty-eight headings:
1.	Current gold and subsidiary coin.
2.	Dominion notes.
3.	Notes of other banks.
4.	United States and other foreign currencies.
5.	Cheques on other banks.
6.	Loans to other banks in Canada, secured, including bills rediscounted.
7.	Deposits made with and balances due from other banks in Canada.
8.	Due	from	banks	and	banking	correspondents in the United Kingdom.9.	Due	from	banks	and	banking	correspondents elsewhere than in Canada and the United Kingdom.10.	Dominion government and provincial government securities.11.	Canadian municipal securities, and British foreign and colonial public securities other than Canadian.12.	Railway and other bonds, debentures and stocks.
With my limited knowledge of the situation, I cannot recall at the moment any substantial holdings of Canadian Pacific or other stocks by any banks in Canada. So far as my knowledge goes, that is not the form of investment that the banks make, for reasons that are obvious.
[Mr. Benrett.l
13.	Call and short (not exceeding thirty days) loans in Canada on stocks, debentures, bonds and other securities of a sufficient marketable value to cover.
14.	Call and short (not exceeding thirty days) loans elsewhere than in Canada on stocks, debentures, bonds and other securities of a sufficient marketable value to cover.
15.	Other current loans and discounts in Canada.
16.	Other current loans and discounts elsewhere^ than in Canada after making full provision for bad and doubtful debts.
17.	Loans to the government of Canada.
18.	Loans to provincial governments.
19.	Loans to cities, towns, municipalities and school districts.
20.	Non-current loans, estimated loss provided for.
21.	Real estate other than bank premises.
22.	Mortgages on real estate sold by the bank.
23.	Bank premises, at not more than cost, less amounts (if any) written off.
24.	Liabilities of customers under letters of credit as per contra.
25.	Deposit with the Minister of Finance for the security of note circulation.
26.	Deposit in the central gold reserve.
27.	Shares of and loans to controlled companies.
28.	Other assets not included under the foregoing heads.
I speak now subject entirely to correction, for I have not taken the trouble to charge my memory with the matter; but so far as I know at the moment, if I were a witness in a cause, called upon to depose as to what my knowledge might be of any bank holding any shares of the two companies which the hon. gentleman has mentioned, I could not say I know of any bank holding any of them at any time during this troublesome period, because it was not with that class of security that we were dealing. We were dealing with a situation that had arisen by reason of the complete demoralization of the credits and prices on the markets of the world-that is, not only on our sidb of the world but in the old countries as well-as a result of Great Britain going off the gold standard, and consequently shaking the entire credit structure of the world.
I quite agree that the effect of this order in council was, as I have said, to permit the banks to fix, as of the 31st day of August, the then existing value as reflected in the exchanges of the country as the market price of their securities for the purpose of filling in under the proper heading the list of their assets-because their liabilities were not matters that we dealt with.


Mr. MALCOLM:: Had the order in council anything to do with the valuation of securities held as collateral by the bank, as security against loans to customers?

Relief Act, 1933


Richard Bedford Bennett: I think not, because that was not the phase of it with which we felt we had authority to deal. That was purely a banking transaction, between the bank and its customers, and to interfere with the bank's transaction of business would involve on the part of the country the examination of the various accounts of individuals, which we declined under any circumstances to do or to accept the responsibility for. And it was because of difficulties that arose by reason of the very circumstances to which the former Minister of Trade and Commerce has alluded that I for one did not feel, and I do not yet think, that it was desirable for the dominion to become responsible in the way of taking over the savings offices in Manitoba. To take them over and to become responsible for cash and to deal with customers was not the business of the country. What we did was to use the collective credit of the people of Canada to make certain that over 40,000 depositors in the province of Manitoba, having aggregate savings of 812,000,000, should not lose those savings or should not be delayed in receiving their money by reason of the fact that the money they had paid in had been invested in something that could not be realized upon. That is the short way of putting it. In other words, you could not realize on a mortgage on real estate for the purpose of meeting a cheque; and when you substituted, for the money you took, a mortgage and then exchanged the mortgage for a treasury bill with the promise to pay, and could not sell that, you were no better off, because your treasury was empty of cash in either event; and because it was empty of cash, the situation developed as I have indicated.
I think, without trespassing further on the time of the committee, that what we endeavoured to do we succeeded in doing, namely, preventing shall I say suspicion and distrust undermining the confidence of the Canadian people in their financial institutions, so that they might be tempted to withdraw their money and hoard it, as has been done in other countries of the world during the great depression through which we are passing. It is a matter of satisfaction and for that reason I felt especially pleased with what was said yesterday by the leader of the opposition regarding the condition of this country as compared with other countries, because, whatever else may be said, we had met the demands that were made by the depositors in our financial institutions for their money in accordance with the terms of their contract of deposit, without any hesitancy
or any request for delay or for limitation of the amount they might receive in accordance with the balance outstanding to their credit.


Mr. HEENAN:: I think the minister might give more information with respect to the question raised by the hon. member for Comox-Albemi as 'to what transpired at the dominion-provincial conference in regard to unemployment insurance. It is a very important question, especially when we are discussing unemployment relief measures, and it is one that has been the subject of debate in this house for several years. I can recall its being submitted to the industrial relationships committee on two occasions, after which the provinces were canvassed to see what view they took of the matter. I think the files of the department will show that at least four of the provinces agreed to participate in a conference looking to the establishment of an unemployment insurance scheme in Canada. Certainly the Prime Minister of Canada gave the workers of the country hope, on April 29, 1931, that there would be introduced in this house an unemployment insurance scheme. His words are to be found at page 1103 of Hansard of April 29, 1931. After stating what was first to be considered with regard to the number of those who would come under the scheme, and so forth, he said:
I propose, if we are spared as a government and as individuals, that the information we will have before our term of office is ended shall be crystallized into the form of legislative proposals to be submitted to this house.
I recall the large headlines that were carried in the newspapers of the country, to the effect that the government intended to introduce an unemployment insurance scheme in the House of Commons, and I also recall many of the labour men expressing the hope that it would come into existence at an early date. I realize of course that it was necessary to discuss the matter with the provinces, and that conference was called and met here not very long ago. I know that unemployment insurance was on the agenda and I think the committee has a right to know what took place at that conference. We have a right to know whether any serious attempt was made to get the provinces and the dominion together for the purpose of formulating an insurance scheme and-


Armand Renaud La Vergne: I think the hon. member is wandering far away from the resolution.


Some hon. MEMBERS:: No.

Relief Act, 1933


Armand Renaud La Vergne: We cannot discuss
insurance and what took place at a conference.


Mr. MACKENZIE (Vancouver):: We can
discuss any possible remedy for unemployment.


Armand Renaud La Vergne: This is a resolution to cover a vote of $20,000,000 for unemployment relief, and in my humble opinion the hon. member is wandering far afield.


Ernest Lapointe: Peace, order and good
government.


William Lyon Mackenzie King: A blank
cheque.


Ian Alistair Mackenzie: Surely
unemployment insurance should be considered as unemployment relief.


Peter Heenan: There seems to be a lot of talk about banking, insurance, land settlement and everything else, but when we discuss unemployment insurance, old age pensions or anything of a social character we are immediately called to order.


Armand Renaud La Vergne: That is probably the
hon. gentleman's own fault.


Peter Heenan: I would say it was rather the fault of those in the chair.


Armand Renaud La Vergne: The hon. member is
now entirely out of order.


Peter Heenan: As far as I am concerned, if I am ruled out of order I am prepared to appeal against the ruling of the chair. I think the government and the Minister of Labour particularly owe it to this committee, and especially to those who have been directly interested in the establishment of an unemployment insurance scheme, to tell what took place at the dominion-provincial conference. We should know whether or not a serious attempt was made to establish an unemployment insurance scheme. If there were no obstacles in the way of this scheme, why have we not an unemployment insurance bill before us at the present time?


Armand Renaud La Vergne: The resolution reads:
Resolved, that it is expedient to introduce a measure to continue in force the provisions of the Relief Act, 1932, until the 31st of March, 1934.
This discussion does not relate to the resolution.


William Lyon Mackenzie King: The Relief Act takes in everything.


Armand Renaud La Vergne: It does not take in
insurance.
{The Chairman.]


William Lyon Mackenzie King: The Relief
Act gives to the government a blank cheque and the power to do anything it pleases to relieve unemployment.


Armand Renaud La Vergne: Surely the right hon.
leader of the opposition will not say that insurance is relief.


William Lyon Mackenzie King: It would mean
the paying out of less money for relief purposes, and therefore it comes within the four corners of this resolution.


Armand Renaud La Vergne: What the right hon.
gentleman has just said justifies me in my ruling.


William Lyon Mackenzie King: This afternoon we were told of innumerable purposes to which this money might be devoted. It is a blank cheque; the governor in council has unlimited authority to enact any measure to help to relieve any future situation. As a matter of fact the government, if it so desired, could establish an unemployment insurance scheme under this very legislation.


Armand Renaud La Vergne: It is not covered by the Relief Act.


Ernest Lapointe: Peace, order and good government.


Ian Alistair Mackenzie: There is an amendment and an amendment to the amendment.


Peter Heenan: The dominion-provincial conference was called for the purpose of considering unemployment relief measures and unemployment insurance was to be discussed at that conference. We are entitled to know what decision was come to with respect to unemployment relief. The Prime Minister aroused the hopes of the workers on April 29 when he said that this matter would be crystallized into legislation before the end of the life of this government.
While the minister is thinking about giving us an answer I should like to deal with the back to the land movement. This is not the first effort that has been made to get people back to the land, even in Ontario. I hope the minister has better luck with his scheme than Hon. Howard Ferguson had with the one he attempted when he was Minister of Lands and Forests of Ontario. A colony was established in 1917 east of the Kapuskasing river and a sincere effort was made to place people back on the land. The Ontario government gave a great deal of consideration to

Questions
this matter but the scheme which was started in 1917 had to be abandoned in 1920. Mr. Ferguson was very careful in selecting a site on the Kapuskasing river and the soil on the site selected was considered to be of the best quality. The beauty of the landscape wa3 even taken into consideration, and the Dominion government finally leased some land on the other side of the river.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Wednesday, March 22, 1933