1934-02-22

Hon. R. J. MANION (Minister of Railways) :: I beg to lay on the table of the house a report of the work performed and the expenditures made, as of December 31, 1933, together with the estimated expenditures for 1934, under authority of chapter 12, statutes of Canada 1929, of construction by the Canadian National Railway Company of certain terminal facilities, with grade separation and other works at and in the vicinity of the city of Montreal.



BANK ACT AMENDMENT


[Stage Direction]
Hon. EDGAR N. RHODES (Minister of Finance) moved for leave to introduce Bill No. 18, respecting banks and banking.
Mr. MACKENZIE KING:: Will the minister explain?


Mr. RHODES:: The occasion which calls for the introduction of this bill is well known to the house and to the country, inasmuch as the charters of the existing banks expire on the 1st day of July of this year. It is some eleven years since a similar measure was introduced in this house-to be exact, on the 20th day of March, 1923-by the then Minister of Finance, the Right Hon. W. S. Fielding, and I think it might not be amiss if I quoted from one or two paragraphs of his introductory remarks on bringing down that legislation on that occasion. These remarks will be found at page 1310 of Hansard of that year. He said:
I think, perhaps, the house will be con-venienced if I proceed at once, on the motion before us, to state the nature of the bill which I shall have the pleasure of introducing shortly. In that measure the government will bring the best possible judgment they can to bear upon a question of the highest importance, and one of widespread interest. I cannot venture the hope that the conclusions we have reached will he received with unanimity. I am well aware that the question is one concerning which there will be differences of opinion, but I am going to ask, and I think it reasonable to do so, that hon. gentlemen reserve their judgment in the matter, until they have had an opportunity of examining the bill, and, what perhaps is of more importance, an opportunity of participating in or observing the inquiry which will take place before the 74726-52
committee on banking and commerce. So soon as the early stages of this bill are disposed of, it is my intention to ask the house to refer the bill to the committee on banking and commerce, where there will be abundant opportunity for raising every question in relation to it, and the fullest possible opportunity for inquiry and discussion.
The Bank Act is the fruit of the study of a long line of ministers of finance, of governments and parliaments, and I feel that in the main it has served a good purpose; it has proved itself adapted to the needs of Canada; and I venture the opinion-which, possibly, will riot be shared by everybody-that any radical change in the act at present would have a disturbing effect upon the business of the country; it is a class of question upon which we shall do well, I think, to go slowly.
The first provision is of course the one which proposes to extend the charters of the banks for a further period of ten years. Perhaps the most important of the earlier changes is that which will be necessitated by the creation of the central bank, and it arises in connection with the note issue. Section 60 of the present bill continues in force until the day on which the Bank of Canada is authorized to commence business the provisions which presently govern the issue of notes by the chartered banks.
Briefly stated, these provisions limit the total amount of the notes of a bank in circulation at any time to the aggregate of- (a) the amount of the unimpaired paid-up capital of the bank; and (b) the amount of current gold coin and of dominion notes held by the bank in the central gold reserves.
In addition during the crop moving season, it is possible for a bank to issue additional notes to an amount not exceeding 15 per cent of the combined unimpaired paid-up capital and rest or reserve fund of the bank.
Section 61 contains the provisions that wijl govern note issue after the central bank has been authorized to commence business. On that day, subsections 3 to 18 of section 60 are repealed and thereafter the maximum amount of notes which a bank may have in circulation at any time shall not exceed the amount of its unimpaired paid-up capital. Moreover, beginning with the first day of January, 1936, this maximum is reduced by 5 per cent per year for a period of 5 years and then by 10 per cent per year for another period of 5 years. Thereafter, until parliament further enacts, the amount of notes of a bank in circulation shall not exceed 25 per cent of the amount of its unimpaired paid-up capital. These provisions, however, do not operate to limit the right of a bank to issue its notes outside of Canada in British possessions or colonies as authorized by section 62

Bank Act-Mr. Rhodes

of the Bank Act. Under no circumstances, however, may the total amount of notes outstanding both within Canada and elsewhere exceed the amount of the bank's unimpaired paid-up capital.
The general purpose of these provisions is gradually to eliminate the note issue privileges of the chartered banks and to secure for the Bank of Canada the sole right to issue notes intended for public circulation in Canada. It is in conformity with the general theory that the right to issue currency is a prerogative of the sovereign and should not be delegated to any private profit seeking institution. Despite the acceptance of this general principle, however, it has been realized that the too sudden withdrawal of the circulation privileges of the chartered banks would undoubtedly result in the closing up of many branches and the consequent loss of banking facilities by many pioneer and small or remote communities.
The next important provision is that having to do with the rate of interest. Section 91, subsection 1, provides that no bank may charge a higher rate of interest than seven per cent, and that every bank which violates the provisions of this subsection shall be guilty of an offence. For each such offence, the bank shall be liable on summary conviction to a fine not exceeding $500, and every officer of the bank who violates the said provision shall be guilty of an offence and liable on summary conviction to a fine not exceeding $100. Provision, however, is made for a minimum charge of one dollar.
It will be recalled that much controversy has recently waged over the precise effect and the wisdom of the provision in the present Bank Act stipulating a maximum rate of interest. Experience in other countries has shown that the attempt to restrict interest rates is usually ineffective and inexpedient in the public interest. In Great Britain, for instance, after several methods had been tried, an act was finally passed in 1854 repealing all the usury statutes.
The question in its Canadian application was given careful consideration by the Macmillan 'Commission on Banking and Currency, and their comments will be found in paragraphs 249 to 253 on pages 72 and 73 of their report.
In paragraph 251 of their report they make the following statement:
As regards the future we are of opinion that the choice lies betwen either repealing the subsection altogether or so recasting it as to put it beyond doubt that it is illegal to stipulate for more than seven per cent interest or discount; if the latter course is adopted a penalty for contravention should be imposed.

After weighing the considerations pro and con, the commission was unable to reach a unanimous agreement, although it might be well to point out that four members of the commission were of the opinion that we should adopt the method that had been found most effective in Great Britain of removing the limitation altogether. The fifth commissioner, however, contended that the statutory maximum still serves a useful purpose; that adequate reasons for repealing the section had not been adduced and that it ought to be retained. The present draft of section 91 retains the statutory maximum, but provides for what we believe will be appropriate penalties in case of contravention.
The next change is that which arises out of the recommendations contained in paragraph 291 of the report of the Macmillan Commission on Banking and Currency, reading as follows:
As, under the law of the province of Quebec, a married woman could not, apart from section 95, deposit or withdraw money without her husband's consent, the effect of the subsection just quoted is that in this province a married woman cannot without her husband's consent deposit more than $2,000 in a bank. Apparently under the Dominion Post Office legislation a married woman is under no disability as regards the amount 'which she may deposit in the Post Office Savings department, and may make deposits up to the limit of $5,000 which applies generally. "YVe were asked to recommend that in the case of married women in the province of Quebec the limitation on deposits in the banks to $2,000 should be removed and an unlimited right of deposit conferred, without the requirement of the husband's consent. We think that this is a reasonable request and we recommend that section 95 (3) be amended accordingly.
This recommendation of the commission has been accepted and implemented by eliminating subsection 3 of section 95 of the present Bank Act. This subsection reads as follows:
(3) If the person making any such deposit could not, under the law of the province where the deposit is made, deposit and withdraw money in and from a bank without this section, the total amount to be received from such person on deposit shall not, at any time, exceed the sum of $2,000.
The next change has to do with the yearly and monthly returns. Various changes have been made in sections 53 and 112 and in schedule G of the act. These sections and this schedule provide for the form of the annual and monthly statements to be made by the chartered banks to the Minister of Finance. The changes made are designed primarily to secure more uniformity between the annual and the monthly return, to clarify previous wording, and in some cases to give a more

Questions
detailed classification of assets or liabilities in order to make possible a clearer appreciation of the position of t'he bank.
The next important amendment occurs in section 75 having to do with the business and powers of a bank. Paragraph (f) of subsection 2 is changed by lowering from ten per cent to five per cent of its paid-up capital the amount of a loan or advance which can be made by a bank to a director or to any firm or corporation in which the president, general manager or director of the bank is a partner or shareholder, without the approval of two-thirds of the directors present at a meeting of the board.
A new subsection 3 is added providing that in no case shall a director of the bank be present or vote at a meeting of the board during the time when loans or advances to himself or any firm or corporation of which he is a partner or director are under consideration. This implements a recommendation made by the Macmillan commission.
Certain changes or additions are made, particularly in section 90, concerning the relations between the bank and its customers, the type of security that can be taken, and so forth. These changes are designed to facilitate the granting of banking credit in certain cases.
A new subsection has been added to section 125 providing for a reduction in the double liability of shareholders pari passu with the withdrawal of the note circulation privilege of the banks.
These are the principal provisions of the bill. There are a number of minor changes which involve clarification of wording, uniformity in phrasing, improved definitions and so forth.
In submitting the bill to the house, I do so with the assurance that the government invites the closest and most careful scrutiny of the committee on banking and commerce, and while it cannot be expected that the measure will meet with universal accord, I express the hope that on the whole it will be found acceptable. As a concluding word may I suggest that, in the interest of public business as well as for the convenience of hon. members, its passage on its way to the banking and commerce committee might be expedited.
Motion agreed to and bill read the first time.


Mr. SPEAKER:: When shall said bill be
read a second time.


Edgar Nelson Rhodes: Would there be any objection to its being read now a second time for the purpose of facilitating its passage to the banking and commerce committee?
74726-52 J


William Lyon Mackenzie King: Mr. Speaker, I
desire to expedite the measure, but we would like to see it before having it pass its second reading.



QUESTIONS

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

Mr. PORTEOUS:: 1.	How many disability pensions were: (a) increased; (b) decreased, as a result of routine medical reexamination of pensioners during the year 1933?
2.	What was the increased annual liability as a result of: (a) increased; and the decreased annual liability as a result of (b) decreased?


Mr. MacLAREN:: 1.	(a) 2,540; (b) 2,695.
2.	(a) $480,844; (b) $561,607.


CAIRO POSTAL CONGRESS
Mir. POULIOT:: 1.	What is the agenda of the Cairo Postal congress?
2.	lias the government given special instructions to the Canadian delegates in connection with the subjects mentioned in the agenda?
3.	If so, what are such instructions?
4.	Since the beginning of this congress: (a) what subjects were discussed; (b) what matters were decided?
5.	Has said congress adjourned or come to an end?
6.	If not, what questions are to be (a) discussed; (b) decided before the end of said congress?
7.	Who are the members of the Canadian delegation who have taken part in the discussion since the beginning of the congress?
8.	What technical subjects have they discussed ?


Mr. BENNETT:: Mr. Speaker, I should like to make a very earnest appeal to the hon. member for Temiscouata to drop this series of questions dealing with the activities of the Postmaster General while attending a postal congress-


Mr. POULIOT:: Mr. Speaker, I rise to a point of order. Chapter IV of the standing orders of the house-


Some hon. MEMBERS:: Oh, oh.


Jean-François Pouliot: I will wait until the hon. members listen to me. I stand by the rules of the house.


Pierre Édouard Blondin: Will the hon. member proceed with the point of order?
Questions


Jean-François Pouliot: I hold in my hand the standing orders of the House of Commons, coming from the table of the Clerk of the House. Chapter IV relates to questions. Standing order 44, paragraph one reads as follows:
Questions may be placed on the order paper seeking information from the ministers of the crown relating to public affairs; and from other members relating to any bill, motion, or other public matter connected' with the business of the house, in which such members may be concerned; but in putting any such question or in replying to the same no argument or opinion is to be offered, nor any facts stated, except so far as may be necessary to explain the same.
Therefore, sir, the right hon. gentleman, in accordance with the rules of the house, which I respect, which I have always respected and which I want to be respected in this house, has no right to state any facts except in answer to my question nor to express any [DOT] opinion of any kind. He has other opportunities, when we go into supply, or on the orders of the day, to express his views; but, sir, as the guardian of the rules of the house, as the only member of the House of Commons who has any precedence over the other members while in the house, I ask you, sir, to give me fair play. The Prime Minister now is no more than the hon. member for West Calgary, and I am the member for Temis-couata. I ask for your decision, and I expect to receive a decision in all fairness, because all members are on the same footing in the House of Commons.


Richard Bedford Bennett: Mr. Speaker, I was about to suggest that these questions are not in order, and to indicate that they might properly be and should be stricken off the list by the Speaker. In doing so I was about to make certain observations as to bringing into discredit this parliament or this country or the Postmaster General among foreign countries.


Jean-François Pouliot: Mr. Speaker, I rise to a point of order.


Richard Bedford Bennett: I had not proposed to proceed further with the discussion.


Jean-François Pouliot: Mr. Speaker-


Pierre Édouard Blondin: The hon. member has stated his point of order.


Jean-François Pouliot: I wish to state a new one.


Mr. STEWART (Leeds):: One at a time.


Pierre Édouard Blondin: The point of order that has been raised first may be discussed.


Jean-François Pouliot: I would like the right hon. gentleman to stop.


Pierre Édouard Blondin: Will the hon. member take his seat.


Jean-François Pouliot: I stand by the rules of the house, which are in print.


Pierre Édouard Blondin: Question No. 13 will stand for consideration.



CLEMVILLE-PORT DANIEL, QUE., MAIL CONTRACT

Mr. MARCIL:: 1.	Has the mail contract held by Julien Langlois, for the service between Clemville and Port Daniel, Quebec, been renewed? If not, why?
2.	How long has Langlois held this contract and what wras the amount allowed him and the service required?
3.	Has a new contract been entered into for this service? If so, with whom, on what terms and price?
4.	Were any complaints made against the service given by Julien Langlois?
5.	If so, have they been investigated, by whom, and with what result?


Mr. DUPRE:: 1.	No. Contract arrangements were made with another person.
2.	Since April 1, 1930. He was paid at the rate of S156 per annum for performance of triweekly service of 3i miles each way.
3.	Yes. Felix Langlois at S140 per annum, effective April 1, 1934.
4.	No.
5.	See answer to No. 4.



HOPETOWN, QTJE., POSTMASTERSHIP

Mr. MARCIL:: 1.	Who is the postmaster of Hopetown, Bona-venture county, Quebec?
2.	When was he appointed, and on whose recommendation ?
3.	At what distance is this office situated from the nearest offices east and west?
4.	Is the money order business attached to this office?
5.	What was the revenue of this office during
the last fiscal year?


Mr. DUPRE:: 1.	John Daniel Ross.
2.	(a) October 7, 1933; (b) Hon. Dr. E. Paquet.
3.	1 mile 628 yards west of Riviere Nouvelle and 14 miles east of Paspebiac Est.
4.	No.
5.	$142.90.



MONTREAL CUSTOMS HOUSE

Mr. MEROIER (St. Henri):: 1.	On what date were the foundations of the new customs house, in Montreal, McGill street, built, and what was the cost of such foundations?
2.	Were these foundations since protected against weathering? If so, how?

Questions
3.	Are these foundations still in good order, and in condition to hold in all security, the weight of a new building?
4.	Are the plans and specifications for the new building finished?
5.	What is the name of the architect, and has he been paid for said plans?
6.	If so, on what date and how- much?


Mr. STEWART (Leeds):: 
Mr. POULIOT:: 1.	Who is the civil servant who forwarded to the government the typewritten original text of the translation of the speech from the throne for 1934 in the French language?
2.	What civil servant is responsible to the government for this translation?


Mr. CAHAN:: Mr. Speaker, the responsibility for the preparation of the speech from the throne rests with the government of the day. This government, so long as it is in office, will assume that responsibility.



SEIZURE OF AUTOMOBILE OF GEORGE ROBERGE

Mr. LAFLECHE:: 1.	Is the Department of National Revenue at present in possession of an automobile seized and belonging to George Roberge of Asbestos, Quebec ?
2.	If so, since what date has the department been in possession of this car?
3.	Will the department return this automobile to the said Mr. Roberge?
4.	If not, will it be sold at auction and when w-ill the sale take place?
5.	Will the said George Roberge be advised of the sale?


Mr. MATTHEWS:: 1.	Yes.
2.	July 24, 1933.
3.	The department does not propose to return this automobile to the said Mr. Roberge.
4.	The automobile will be offered for sale by written tender on April 1, 1934.
5.	Mr. George Roberge has been advised through his counsel, Mr. Jos. Duguay, barrister, Victoriaville, P.Q., that the automobile will be offered for sale by written tender on April 1, and that if he is interested in submitting an offer for same he should place himself in communication with the officer in charge, Royal Canadian Mounted Police detachment at Thetford Mines, P.Q.



CANADIAN NATIONAL RAILWAYS-MONTREAL TERMINAL

Mr. MERCIER (St. Henri):: Is it true that the government will use and spend this year, on relief work for unemployment, the balance of 50 million dollars unanimously voted by the House of Commons, in 1930, for the erection of the terminus station of the National railways, at Montreal, and other railway improvements?
Mr. MANIO'N:	The sum referred to was
not " unanimously voted," as stated. The expenditure of 50 million dollars was authorized by chapter 12, 1929, with annual outlay restricted to 10 million dollars per annum, except as otherwise approved by the governor in council. It is not intended to proceed with this project as a relief work.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. REID:: 1.	Were tenders called for supplies for the penitentiary at New Westminster during the year 1933?
2.	If so, for what supplies?
3.	What firms submitted tenders?
4.	Who were the successful tenderers?
5.	Are any supplies purchased without tenders being called for?
6.	If so, what articles are so purchased and from what firms?


Mr. GUTHRIE:: Return tabled herewith.


Mr. HOWARD:: 1.	What increase has been made in:	(a)
national debt of Canada from December 31, 1930, to December 31, 1933; (b) the total railway debt of Canada from March 31, 1930, to December 31, 1933?
2.	Since the tax on sugar has been in force, what revenue has it produced to the Canadian government up to December 31, 1933?


Charles Hazlitt Cahan: Return tabled herewith.


Mr. LAFLECHE:: 1.	What is the name, headquarters, rank and salary, of all officers of the Royal Canadian Mounted Police in Sherbrooke, Quebec, for the period. April 1. 1933, to February 1, 1934?
2.	What is the total amount of monthly expenses for salaries, uniforms, stationery, rent, travelling expenses, car repairs, gasoline, new ears, etc?
822	COMMONS
Technical Education-Mr. Gordon
3.	What is the amount received' by the Royal Canadian Mounted Police officers for mileage serving summons and attending court in connection with trial?
4.	What officer or officer's family had medical
attention during period April 1,	1933, to
February 1, 1934, and if admitted to hospital, what hospital, what amount was paid to same, what are the names of physicians attending and what amount was paid in each case?
5.	What is the amount received from the local government for local police work?


Mr. MARCIL:: 1.	Has a contract been awarded for work at New Carlisle wharf, Quebec?
2.	If so, to whom and at what price?
3.	What is the nature of the work and how much work has been done under this contract?
4.	What is the amount in the main estimates and what is it intended for?
5.	Who asked for this work?
6.	Who is the overseer and how much has been paid him up to date?


Hugh Alexander Stewart: Return tabled herewith.



TECHNICAL EDUCATION ACT


[Stage Direction]
Hon. W. A. GORDON (Minister of Labour) moved that the house go into committee at the next sitting to consider the following resolution:
That the Technical Education Act be amended to provide that any balance of the ten million dollars appropriated under the act. unexpended on the 31st March, 1934, shall remain available during any one or more of the live succeeding fiscal years, but no portion thereof shall be paid to any province after the 31st day of March, 1939.
He said:	His Excellency the Governor
General, having been made acquainted with the subject matter of this resolution, recommends it to the favourable consideration of the house.
Mr. MACKENZIE  ICING@: Before the
motion carries may I ask the minister what Technical Education Act is referred to?


Mr. GORDON:: This is the original act
under which the $10,000,000 was appropriated, part of which has not been expended.


William Lyon Mackenzie King: What year?


George Gordon: I do not remember the
year.


William Lyon Mackenzie King: The act of
1919?


George Gordon: I imagine so. I do not
know whether it was 1919 or 1920, but it has no reference to the later act passed, I think, in 1931.


[Stage Direction]
Motion agreed to.
TRADE WITH THE UNITED STATES On the orders of the day:
Richard Bedford Bennett: Mr. Speaker, in view of the interest
that this house has manifested in the discussions that have taken place as to trade relations between the United States of America and Canada, and as to which dispatches that may have appeared in the press are not quite uniform, I desire to indicate to the house the text of the statement given out by the State department of the United States:
Trade between the United States and Canada is larger in normal times than that between any other countries in the world, and it is natural that both countries should desire to restore the reciprocal flow of commodities to normal proportions. We hope to he in a position at an early date to take steps looking to the completion of a trade agreement with Canada which will further the interests of both countries. We hope first to bring into practical application the "good neighbour" policy between these two great countries which lave so much in common.


William Lyon Mackenzie King: May I ask the Prime Minister the date of the communication Which he has just read to the house?


Richard Bedford Bennett: Yesterday.
RAYON YARN DUTY On the orders of the day:


Mr. E. J. YOUNG (Weyburn):: Mr. Speaker, I would like to direct a question to the Minister of National Revenue (Mr. Matthews). In the Toronto Star of January 27, 1934, the following appears:
Toronto importers were startled yesterday to learn that Courtaulds (Canada) Limited, had applied to the customs house here for a rebate of the duty on two large shipments of rayon yarn on the grounds that these shipments had been specifically exempted by order in council.
I would like to ask the minister if any such order in council was issued, and if so what was the amount of the rebates, and why were they granted?


Hon. R. C. MATTHEWS (Minister of National Revenue):: Mr. Speaker, I will be very glad to get the information.
SILVER AGREEMENT On the orders of the day:


Mr. THOMAS REID (New Westminster):: I should like to ask the Minister of Finance (Mr. Rhodes) if he can tell the house what

Discontinued Pensions
countries, by their governments, have ratified the agreement on silver, and what countries have not yet done so.


Edgar Nelson Rhodes: I am unable to answer that question offhand, but I will take this as a notice.



DISCONTINUED PENSIONS

[Stage Direction]
On the orders of the day:
Right Hon, R. B. BENNETT (Prime Minister) :	I have to advise the house that the
Board of Pension Commissioners, with respect to all cases in which the legality of the marriage status of a pensioner was under dispute, will send cheques to such persons as may be affected as from the day of the discontinuance or reduction of the pension, and that the board proposes to refer to the Justice department, for an opinion, the legal questions involved in the determinations at which they had arrived. The matter is under consideration by the Minister of Justice for the purpose of determining whether or not he has authority to refer typical cases from the several categories affected to the Exchequer Court for an opinion or judgment.
With respect to the cases in which the pension or allowance has been reduced or cancelled the board is forwarding cheques to all those who have been thus dealt with without having an opportunity to be heard.
Mr. MACKENZIE (Vancouver Centre):: May I ask the Prime Minister if that includes all cases?


Richard Bedford Bennett: It refers to all cases which have been dealt with since February 1, 1933. The statute now provides that the cases can only be dealt with after an opportunity has been accorded to the person concerned to be heard, so it puts all the cases that have been dealt with since that date in the category of cases provided for by the statute.


Mr. VENIOT:: Irrespective of the class in
which those cancelled pensions are to be found?


Richard Bedford Bennett: I said all cases in which, under the statute, it is now provided that the person concerned ^hall have an opportunity to be heard. They will be treated as though the statute applied as from February 1.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the orders of the day:
Mr. J. E. MICHAUD (Restigouche-Mada-waska):: I should like to ask the Minister
of Railways (Mr. Manion) if he has received
a protest from the government of the province of New Brunswick with regard to the closing of the railway station at Aulac in the county of Westmorland, and, if such protest has been received, what action has been taken?


Robert James Manion: I receive so many protests of this kind that from memory I cannot say whether or not I have received the one referred to. I have received from someone a protest along that line; I cannot remember at the moment from whom it came, but all I can do is to pass such protests on to the management of the railway, and that I have done. I might just add that of course those interested can appeal to the board of railway commissioners as well.
TOBACCO TAX On the orders of the day:


Mr. E. J. GOTT (South Essex):: I should like to direct a question to the Minister of Finance (Mr. Rhodes). I have received one or two telegrams from the tobacco growers of western Ontario protesting against a proposed tax of 20 cents per pound on raw leaf tobacco. I should like to ask if any representations have been made to the government by the growers of raw leaf tobacco in Canada with regard to this tax; if so, when they were made and if they are likely to receive favourable consideration.


Edgar Nelson Rhodes: I may say that a deputation waited upon me making representations along the lines indicated, but I am sure my hon. friend will be the first to appreciate that any announcement on behalf of the government with respect to tariff or taxation can be made only in the orthodox way, when the budget is brought down.
BUREAU FOR TRANSLATIONS On the orders of the day:


Charles Hazlitt Cahan: I may say for the information of those members of the house who may be interested that when government orders are reached on Tuesday next I propose to move the second reading of Bill No. 4, respecting the bureau for translations.



BANK OF CANADA


[Stage Direction]
Hon. EDGAR N. RHODES (Minister of Finance) moved:
That, it is expedient to introduce a measure to incorporate a central bank in Canada, and
[Stage Direction]
Bank of Canada-Mr. Rhodes
to provide for the appointment and salaries of the officers and staff of the bank and the appointment and fees of the directors, and to make such further provisions in respect to the functions, powers and administration of the bank as recommended by the Royal Commission on Banking and Currency in Canada.
He said: Mr. Speaker, the bill which is founded upon this resolution is one of unusual importance and significance. It marks an advanced stage in our economic and financial development as a nation. The proposed central bank should not, I submit, be regarded as a break with the past; we are not departing from the system which has served us so well. Rather the central bank should be regarded as another stage in the natural evolution of our banking system.
It has long been an accepted principle in Canada, and I think wisely so, that banking legislation should recognize and closely follow changing conditions in the business and financial world. In recognition of this fact our Bank Act has provided for a decennial revision. The ten-year period since the last revision expired last year, but it will be remembered that at that time, in recognition of the importance of the changes contemplated, this house agreed to postpone the revision for one year in order that the situation might be thoroughly explored. To ensure that the highly technical questions inherent in such a comprehensive investigation should have the benefit of unbiassed, expert consideration, the budget speech of last year promised the appointment of a royal commission. From that speech I quote the following paragraph:
[DOT]-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.
In the meantime this proposal has been carried out, and it now becomes my duty, on behalf of the government, to submit the results to the house in the form of a bill.
The royal commission was appointed on July 31, 1933, by order in council P.C. 1562, naming the following commissioners: Right Hon. Lord Macmillan, P.C., K.C., of London, chairman; Sir Charles Stewart Addis, K.C.M.G., of London, England; Right Hon. Sir William Thomas White, P.C., K.C.M.G., of Toronto; Hon. John Edward Brownlee, K.C., MiL.A,, of Edmonton and Beaudry Leman B.Sc., C.E., of Montreal.
It is unnecessary for me to dwell upon the calibre of that board and the work they accomplished, other than to say that I think the banks and the country are especially in-

debted to Lord Macmillan and Sir Charles Addis for giving to Canada the benefit of their wide knowledge and experience at considerable personal inconvenience to themselves. The inquiry took up a considerable portion of their time, which they gave gladly and willingly, and without remuneration. I do not propose to refer to the terms of reference at length, but I should like to set out the last two paragraphs of the order in council. They are as follows:
2.	That, without limiting the general scope of their inquiry into the operation of the banking and monetary systems of Canada, the said commissioners shall in particular examine the provisions and working of the Bank Act, the Dominion Notes Act, the Finance Act and the Currency Act, and the advisability of establishing a central banking institution; and
3.	That said commissioners shall report their recommendations for revising or supplementing the above mentioned acts and for the adoption of such other measures as they may deem desirable to promote the revival of trade and enterprise and to facilitate intra-imperial and international cooperation for the purpose of raising the level of commodity prices and for the purpose of ensuring increased domestic employment and the stability of the economic, financial and social institutions of this country.
The terms of reference, broadly stated, provided for a study of the entire monetary and banking system of Canada, with recommendations for revising or supplementing this system. The first public hearings were held at Ottawa, and from this centre the commission undertook a dominion-wide itinerary which included important cities in every province. Sessions were held in Victoria, Vancouver, Calgary, Edmonton, Saskatoon, Regina, Winnipeg, Halifax, Charlottetown, Saint John, Quebec, Montreal and Toronto. Representations were invited from provincial and local governments, public bodies, associations and individuals. The commission made every effort to secure the widest possible range of information and expert opinion. The list of those who appeared before the commission in the course of its inquiry included sixteen government representatives, twenty-eight officials of Canadian banks, eighty-one officials of public bodies, organizations and associations, and ninety-six personal representatives, making a total of two hundred and twenty-one. The record of the testimony and examinations in these public hearings covers no less than seven volumes containing over thirty-seven hundred pages. In addition the commission received written submissions from no less than one hundred and ninety-six individuals and organizations. These also received the careful attention of the commission. On the basis of this exhaustive and

Bank oj Canada-Mr. Rhodes
comprehensive study of our entire monetary and currency system the commission made several important recommendations with which all hon. members are doubtless familiar.
Among the recommendations, and overshadowing all others is the majority recommendation for the immediate establishment of a central bank in Canada. In addition to this the report contained valuable suggestions for the constitution of such an institution. After careful analysis of the entire range of arguments submitted by the commission in support of its recommendations, the government submits to the house this measure to incorporate the Bank of Canada.
It is perhaps worth while to point out the extent to which the principle of central banking has been adopted by important countries of the world. In most of the leading countries the present central banks have, as the Macmillan commission pointed out, reached their present positions of national and international importance by a long process of growth. But particularly since the war the spread of this type of institution to other countries has been very rapid. In fact, Canada is almost in an unique position in being one of the few countries of the world which up to the present time has not had a central bank. Among other British dominions Australia and South Africa have had such institutions for several years, while New Zealand and India have, during the last few months, passed legislation providing for the establishment of central banking institutions. Postwar world conferences repeatedly have pressed for the further establishment of central banks.
We find the following at page 62 of the Macmillan report:
The International Financial Conference held at Brussels in 1920 unanimously recommended that:	_ _
'The conference is of the opinion that in countries where there is no central bank of issue, one should be established."
Again, at Genoa in 1922, the International Economic Conference resolved that:
"Banks, and especially banks of issue, should be free from political pressure, and' should be conducted solely on lines of prudent finance. In countries where there is no central bank of issue, one should be established."
At the World Monetary and Economic Conference of 1933. resolutions, to which Canada was a party, were adopted that:
"The conference considers it to be essential in order to provide an international gold standard with the necessary mechanism for satisfactory working, that independent central banks, with the requisite powers and freedom to carry out an appropriate currency and credit policy, should be created in such developed countries as have not at present an adequate central banking institution.
"The conference wish to reaffirm the declarations of previous conferences with regard to the great, utility of close and continuous cooperation between Central Banks."
The question naturally arises: Why has Canada not hitherto had a central bank? I think perhaps the answer is rather flattering to us as a people, and certainly it is a tribute to the character of the services which our existing banks have rendered up to the present time, because it has been due largely to the operation-and successful operation-of our existing system that we could afford, for the time being, to postpone supplementing it with a central bank.
Admitting this fact however, is not to be taken as implying that our banking structure has deteriorated in recent years, making it necessary to supplement it. Rather, the changes which have rendered such action at present desirable are largely external. The complex post-war world conditions within which our banking and currency mechanism must operate have engendered forces which are not amenable to the highly simplified statutory control over our financial structure such as has sufficed up until now. Changed and changing conditions demand constant supervision and an active, rather than passive mechanism of control. To meet these demands is the main purpose for which the central bank is to be created. Perhaps no better statement is available of the chief functions of a central bank than that which is contained in the Macmillan report, and which is to be found at page 63 as follows:
In the first place, from a national point of view, the central bank, within the limits imposed by law and by its capacities, should endeavour to regulate credit and currency in the best interests of the economic life of the nation and should so far as possible control and defend the external value of the national monetary unit. In the second place, from the international point of view, the central bank by wise and timely cooperation with similar institutions in other countries, should seek, so far as may lie within the scope of monetary action, to mitigate by its influence fluctuations in the general level of economic activity. These functions do not, of course, exhaust the tasks of a central bank. Within a state the central bank should, in addition, be a ready source of skilled and impartial financial advice at the disposal of the administration of the day. In return for the privileges which the state confers upon it, the bank should use its store of experience in the service of the community without the desire or the need to make profit a primary consideration.
In simpler form these functions may be stated as:
1.	To regulate internal credit;
2.	To regulate the foreign exchanges;
3.	To mitigate fluctuations in the level of
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Bank oj Canada-Mr. Rhodes
production, trade, employment and prices as far as may be possible within the scope of monetary action and;
4.	To give expert and impartial financial advice to the government of the day.
It cannot be too strongly emphasized that the exercise of these functions lies outside the power of any single commercial institution or group of commercial institutions. No purely profit-making institution operating in a competitive system can afford to place social interests before its own in regard to credit policy. This, I think, is obvious. Nor can the management of such a body be expected to regard the maintenance of the monetary standard, for example, as a duty prior to its obligations to the stockholders. Clearly it is impossible to visualize any effective international cooperation to the end of mitigating world fluctuations in business unless predicated on a high degree of internal unity and control. This latter feature we certainly lack in Canada.
At this point we are now able to see in proper perspective the role which some have claimed should be filled by the Finance Act. The Finance Act, it may be said, has served us in the manner of providing a " halfway housein a period of transition from the stage of passive statutory control over our banking and currency system to one of active centralized regulation. In providing an elasticity in our credit structure, and particularly in emergency use, the Finance Act has fulfilled a useful function. It is clear now that while in a position to offer some of the advantages which follow from a central bank it lacked the powers of control ordinarily associated with such an institution. To make provision in the Finance Act for the powers necessary to perform adequately the functions outlined above would, in effect, mean the creation of just such an institution as is proposed in this bill.
It is important that the nature of the contemplated regulation over credit policy be clearly understood. It is not proposed that the Bank of Canada shall be directly responsible for the general level of prices within Canada. Certainly, prices of particular commodities are not to be its direct concern. It is believed desirable, however, and it is intended that the bank shall have a definite measure of control over the total volume of credit and thus be in a position indirectly to exert an influence over the general price level. The ability of central banks to maintain any monetary standard, indeed, largely depends upon its control over internal credit policy, 
as also does its ability to cooperate with other nations in financial programs of mutual benefit.
Just here I think I should recite in full the w'hole of paragraph 207 of the Macmillan report, which says:
207. It is easily possible to expect either too much or too little of central bank action. A central bank is at the same time an instrument and a force. As an instrument it is the means by which the state-which must necessarily retain ultimate sovereignty in matters affecting the currency-can give effect to the national policy. As <i force the central bank has certain po\vers in its keeping which can be used to achieve the ends of national policy. Clearly these powers are of differing efficacy according to the aim of the policy. A central bank cannot be expected to influence directly the price of a particular commodity. It is even not desirable that a central bank should be specifically charged with any responsibility for the general price level of a country. There are many factors, of varying nature, which combine to influence that level, and a central bank, working as it does purely in the monetary sphere, cannot be expected to have complete control, though it may well have a measure of influence. If it attempted to exercise any drastic control it would have to wield powers far beyond those which any body other than the sovereign authority would be entitled to exercise. It is manifest, however, that the regulation of the volume of credit is an important factor in influencing the level of economic activity and therefore of prices and this is one of the cardinal tasks of a central bank.	In the
absence of a central bank it is a task the fulfilment of which is either left to chance, or performed inadequately by other agencies. The regulation of the quantity of credit is effected by the action of the central bank on the reserves of the commercial banks. By increasing or diminishing these reserves, or by increasing the cost of securing them, there is set in motion a process of expansion or contraction through the ordinary channels of banking. A central bank is thus not a competitor with the commercial banks. Its functions are regulatory and indirect.
In some quarters, there has been apprehension that the creation of this institution would injuriously affect the chartered banks.
It is our belief that there is no ground for this apprehension. On the contrary, experience in other countries has demonstrated the fact that the whole banking structure has been strengthened to the benefit and not the detriment of other banking institutions.
The Bank of Canada is not to be regarded as a competitor with our chartered banks. Its functions are intended to be supplementary and regulatory.
The Macmillan report refers to the introduction of a central bank in South Africa and in Australia, and I quote one paragraph of the report in reference thereto:
It. is perhaps worth observing that in South Africa and Australia the commercial banks

Bank of Canada-Mr. Rhodes
viewed the advent of central banking with considerable mistrust, possibly owing to a failure to appreciate the part which a central bank is designed to play, and to apprehensions as to the extent of its disturbance of the existing banking system. The first years of its operation were thus rendered more difficult by the lack to some extent of cooperation on the part of the commercial banks but in recent years there has been a growing appreciation of the advantages of central banking leadership and control, and the central banks in these two countries have now obtained both the goodwill and the cooperation of the commercial banks.
Coming to the main features of the bill itself, I shall indicate them as briefly as possible. As at present proposed the bank of Canada is to be a privately-owned institution, thie chief officers and directors of which initially are to be appointed by the governor in council. Several provisions have been included which are designed to remove the fear that a privately-owned institution might come under the control of bankers or other financial interests. In other words, the endeavour has been made to retain the advantages of private ownership without its disadvantages. Thus, the Bank of Canada, though privately owned, will operate as a public trust. Profits are definitely limited to 6 per cent upon a small capital. Adequate powers are given to the bank to perform the functions which I have described as appropriate for a central bank. Thus it is to have power to buy and sell gold and silver, bills of exchange and promissory notes, and certain stipulated kinds of securities. It may also rediscount bills and notes, make loans and advances to the banks and to the dominion and provincial governments, and accept non-interest-bearing deposits. In addition, it is intended that the bank shall eventually possess the sole right of note issue. Against its notes and deposits a reserve of at least twenty-five per cent is to be held. The legal reserves of the chartered banks will in future be held, in part at least, with the central institution.
It will be obvious at once to those familiar with the Macmillan report that the suggestions contained therein have been closely followed. That document has provided the foundation and largely the material of the structure. The task of the government has been to implement and where necessary to supplement rather than to create outright. In this the aim has been to provide Canada with a central bank best suited to our own particular needs.
It is proposed that the capital of the bank shall be 85,000,000. This amount was regarded as adequate by the Macmillan commission. In the determination of this figure it was borne in mind that dividend obligations to stockholders should be as light as possible. The management should be free to perform its public functions without regard to the necessity of making profits. Provision is made for increasing the capital from time to time, if occasion should demand it.
Shares, which are to be of $100 par value, may be held only by British subjects ordinarily resident in Canada or by Canadian corporations. The chartered banks are to be strictly prohibited from holding shares directly or indirectly, as are also bank directors, officers and employees.
In order to secure a wide distribution of ownership, not more than fifty shares-$5,000 -may be held by or for the benefit of any one person other than the Minister of Finance.
Dividends to shareholders may not exceed six per cent. Profits in excess of this and after reasonable provision has been made for reserve and other purposes are to be paid into the consolidated fund. Thus it is to be noted that, although private ownership is contemplated, the bank is not to be a "profit making" institution. This feature sharply distinguishes the bank from the ordinary business or commercial enterprise and is designed to enable the bank to pursue its legitimate ends, unhampered on the one 'hand by the urge to make profits and on the other by undue political interference.
The initial appointments of governor, deputy governor, and assistant deputy governor are to be made by the governor in council. The term of office of these executives of the bank is seven years. They are eligible for reappointment. Subsequent appointment of these officers is to be made by the directors with the approval of the governor in council.
Likewise, the first directors are to be appointed by the governor in council. Thereafter they are to be elected by the shareholders and are to be eligible for reappointment for terms of five years. The original directors retire in rotation as follows:
1.	After the 3rd annual meeting;
2.	After the 4th annual meeting;
2. After the 5th annual meeting;
2. After the 6th annual meeting.
The question of control is important. Broadly stated, the problem in this connection is that of creating an institution which shall be devoted to the public interest but which shall not be subject to the exigencies of politics in the narrower sense of the word. The services of the bank should obviously be at the disposal of the government, particularly in times of severe crisis and emergency. Clearly, however, the bank should not be subject to dictation by the government, for at
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Bank of Canada-Mr. Rhodes
times the exigencies of public finance might not be wholly in harmony with banking policies that might be considered wise and essential in the general public interest. Clearly, also, the bank should be protected from pressure by particular private interests. It is in view of these demands and possible dangers that the above regulations regarding ownership, appointment of officers, and limitation of profits, etc., have been drawn up. In this light these various features may be explained, for example:
1.	Private ownership renders the bank more independent and detached from political controversy than would be the case under direct public ownership.
2.	Limitation of profits removes dangers inherent in private ownership, but still offers conservative investment for private capital.
3.	Limitation of share holdings, broad diffusion of stock ownership, and the provision that none of the shares may be held by chartered banks or by bankers tend to avoid pressure from particular interests.
4.	Initial appointment of officers, including directors, by governor in council with provision for approval of subsequent governor, deputy governor, and assistant deputy governor by the same body affords guarantee of proper expert and disinterested leadership. The features allowing for only gradual retirement of original directors, with eligibility for reappointment, ensures that continuity of sound policy is made possible. This again affords protection against special interests. Sole powers given the minister to cast proxy votes of shareholders absent from annual meetings adds further to this protection as also does the reservation to governor in council of right to approve by-laws.
It is believed that the provisions here outlined will provide a workable organization combining the advantages of private ownership with adequate protection of the public interest.
In defining the powers of the bank, an attempt has been made in the bill to provide ample scope for the exercise of all legitimate central banking functions and yet to restrict the bank's assets to the most liquid and highest grade securities so that it may always be in a sufficiently strong position to assist in tiding the country over periods of strain.
The bank is to be allowed to buy and sell coinage and gold and silver bullion, transfer funds within and to and from Canada, and deal in bills of exchange of specified types and maturities.
It is also permitted to purchase on its own initiative or to rediscount certain types of 
investments. These are to include short and long term securities issued or guaranteed by the dominion or any province, with strict limitations, however, on the amount of such long-term securities which may be held. The short-term securities of the United Kingdom, other British dominions, the United States, and France, as well as a limited amount of longterm securities of the United Kingdom and the United States, may also be purchased. These provisions have been framed to allow the bank to hold earning assets in a suitably wide range of currencies. The limitations on the holdings of long-term securities are to assure a high degree of liquidity at all times.
The chartered banks are to be given access to central bank credit in a set of provisions which afford them privileges comparable to those which they now enj oy under the Finance Act. Thus, the bank is to be allowed to buy and sell or rediscount a wide range of bills of exchange and promissory notes endorsed by a chartered bank. Loans and advances may also be made to the chartered banks for limited periods on pledge of suitable collateral.	.
The dominion and provincial governments are also eligible for loans and advances but, in accordance with the suggestions in the Macmillan report, these are subject to appropriate limitations.
Deposits are to be accepted from the dominion and provincial governments and from the chartered banks but such deposits will not bear interest. It is expected that the provisions for chartered bank deposits will greatly facilitate clearing operations.
For the purpose of carrying on open market operations the bank is permitted to buy and sell in the open market securities, cable transfers, bankers' acceptances and bills of exchange of specified kinds and maturities, with or without the endorsement of a chartered bank. -Open market operations are recognized as one of the important devices by which central banks maintain control over credit. Ample scope is here provided for the bank's activity in this connection.
The bank is to be required to act as fiscal agent of the Dominion of Canada without charge and may also by agreement act as banker or fiscal agent for the government of any province.
It is obviously unwise for a central bank, owing to the nature of its functions in the community, to engage in or have a direct interest in any industrial or commercial undertaking. Nor should it make loans or advances on real or immovable property. Unsecured loans and renewals of loans and advances

Bank of Canada-Mr. Rhodes
should not be allowed except under rigid limitations or in exceptional circumstances. These are among the various kinds of business specifically prohibited in the bill.
It is intended that the bank shall eventually possess the sole right to issue notes in [DOT]Canada. The Macmillan report's comment on this matter is worth giving. It will be found [DOT]on page 98 of their report and it reads as follows:
A central bank is responsible for the control of the volume of credit and the maintenance of the stability of the value of the currency. This responsibility connotes that the bank should be granted the sole right of issuing currency (other than coin) for it would 'be intolerable that a central bank's policy should be hampered by the action of other issuing authorities in a country. The experience of other countries has shown conclusively that the right of issue is not indispensable in assuring adequate profits to commercial banks.
In accordance with this recommendation the Bank Act is being amended to provide for the gradual retirement of the notes of the chartered banks. The Dominion Notes Act will be amended, and this act, together with the act of 1915 respecting dominion notes, and the Finance Act, will be repealed as of the day on which the Bank of Canada is authorized to commence business. With the opening of the Bank of Canada, the Minister of Finance will transfer to it gold now held against dominion notes, silver bullion to the limited amount necessary to implement the London Agreement, namely, 1,671,802 ounces, and securities of the dominion equal to the balance of dominion notes outstanding, and thereafter the bank will become responsible for the redemption of all such notes.
Bank of Canada notes are to be legal tender in Canada. It is not contemplated that they should be redeemable in gold coin. Provision is made, however, that when suspension of specie payments is not in effect, Bank of Canada notes will be redeemable in gold bars containing approximately 400 ounces of fine gold. This regulation providing for the redemption of notes in gold bars follows the practice adopted by Great Britain when gold payments were resumed in that country in 1925, and subsequently adopted by a great many other countries. The United States, which recently passed the Gold Reserve Act sponsored by President Roosevelt, is the most recent country to provide for the redemption of its currency in the form of gold bars. This arrangement is usually called the gold bullion standard; it accepts the theory that under conditions gold is primarily of use only in the settling of international balances of payments and it is designed to prevent any possible embarrassment to the bank from an internal drain of gold for, say, hoarding
purposes.		
Against its notes and deposit liabilities the bank is required to hold a minimum reserve of 25 per cent in gold. In addition to this minimum reserve, the bank may hold silver bullion in an amount limited to the obligation assumed by Canada under the International Silver Agreement, signed at London last summer, and foreign exchange in the form of bank balances, short-term treasury bills of the United Kingdom or the United States of America and short-term bills of exchange payable in sterling or United States funds or funds of any country on a gold standard.
In fixing the minimum reserve ratio at 25 per cent in gold and in providing, as above, that notes be redeemable only in gold bullion, the government is meticulously observing the resolutions passed at the London conference last summer. It is going beyond the recommendation of the Macmillan report, which suggested that part of the minimum reserve of 25 per cent might be held in the form of foreign exchange. Such foreign exchange as the Bank of Canada may hold may be regarded as part of the bank's reserve, but it must be in addition to the minimum gold reserve of 25 per cent.
In order that the central bank may be enabled to exercise the necessary control over credit policy in Canada, the chartered banks are to be required to maintain with the bank deposits equal to five per cent of their deposit liabalities within Canada. At present, each bank is free to determine the size, form and location of its cash reserves, except for the requirement that 40 per cent of whatever reserve is held must be in the form of dominion notes. The regulations here proposed will tend to concentrate the banking reserves of Canada and to provide that they shall not fall below a certain limit. It is through this [DOT]power to influence the volume of chartered bank reserves by various kinds of action that the bank is able to exert its influence over the total volume of credit. These provisions which concentrate reserves and ensure an [DOT]adequate reserve position should add considerably to the strength of our credit structure.
On the opening of the bank all gold held by the chartered banks is to be transferred to the Bank of Canada. The value of the gold so transferred is to be computed on the basis established by the Currency Act, that is to say, $20.67 per fine ounce. Profits from such gold transferred to the Bank of Canada by the
1	COMMONS
Bank of Canada-Mr. Mackenzie King
chartered banks, in so far as such gold has 'been held against their liabilities within Canada, are to accrue to the Dominion government. Similarly, the government will secure any profit that may result from the revaluation of the gold which has been held as security against dominion notes, and which is transferred to the Bank of Canada. From time to time in the future also the governor in council is authorized to require every Chartered bank or every other person to transfer to the bank any or all gold coin or bullion held in Canada which is owned by such chartered bank or such other person.
Appropriate provisions will be found in the bill for shareholders' audit of the bank and such further audit and inspection by the Inspector-General of Banks or by outside auditors as the Minister of Finance may deem to be desirable.
Provision is also made for weekly, monthly and annual reports.
The bank is to be required to establish a rest fund and any surplus earnings after meeting charges of management, depreciation of assets, et cetera, and after payment of accumulated dividends at six per cent are to be applied as follows:
One-third of such surplus shall be transferred to the rest fund and the residue to the consolidated revenue fund if the rest fund of the bank is less than the paid-up capital;
One-tenth of the surplus to the rest fund and the balance to the consolidated revenue fund if the rest fund is as large as but less than twice the paid-up capital; and
All the surplus earnings to the consolidated revenue fund when the rest fund is equal to twice the paid-up capital.
In conclusion, I desire to assure the house that the government has given careful thought and study to the drafting of this bill. At the same time, in submitting it to the banking and commerce committee, it invites that committee to give it the most careful examination and scrutiny, and if in its judgment any amendments can be made which will be designed to accomplish more fully the purposes of the measure or to strengthen its provisions, they will be not unwelcome.
William Lyon Mackenzie King: Mr. Speaker,
the motion which is under consideration is one to enable the Minister of Finance (Mr. Rhodes) to introduce a bill establishing a central bank in Canada. As foreshadowed in the speech from the throne, the central bank measure will in all probability be the most important bill to be introduced at this session 
of parliament and, as the minister himself has just said, one of the most important measures ever introduced into the House of Commons of Canada.
At this preliminary stage of the introduction of the bill, it is not to be expected that any debate whatever will take place. The minister was not only justified but wise in giving, as he has done, at the earliest moment possible, a very full explanation of the main provisions and features of the bill. The country has been waiting, as well as this parliament since it assembled, for the measure to be introduced. From what the minister himself has said this afternoon it will be apparent that the provisions of the bill are so many, so important and so far-reaching that it would be most unwise to attempt any criticism or comment upon them until hon. members of the house have the bill in its entirety before them and are able to weigh the value of the different provisions in relation to each other.
I would like, however, to make perfectly clear the attitude of the official opposition with regard to the measure now being introduced. The bill is one for the establishment of a central bank. I need not repeat that we on this side of the house have for some time past been advocating that a central bank should be established in Canada. We have been urging the government to enact such a measure. I must commend the Minister of Finance and the government on having accepted-


Some hon. MEMBERS:: Oh, oh.


William Lyon Mackenzie King: -a suggestion from this side of the house at last. Yes, and may I point out, it is a constructive suggestion that has been acted upon. They are adopting a measure which is recognized now on all sides as being essential in the development of our banking system in this country.
Speaking on the 27th of February last, just a year ago this week, I made very clear in this house the position not only of the official opposition, but of the Liberal party as such on the question of a central bank and I would like now to repeat the words then used. The statement was made at a time when I was presenting the position of the Liberal part}' with respect to some present day problems. At that time, speaking of banking, credit, and currency, I said:
Liberalism believes that credit is a public . matter, not of interest to bankers only, but of direct concern to the average citizen. It stands for the immediate establishment of a properly constituted national central bank, to

Bank of Canada-Mr. Coote
perform the functions of rediscount, and the control of currency issue, considered in terms of public need. A central bank is necessary to determine the supply of currency in relation to the domestic, social and industrial requirements of the Canadian people; and also to deal with the problems of international commerce and exchange.
That statement is clear and concise. From our point of view it did not require any royal commission to inform the government as to what was necessary with respect to the establishment of such a bank.


Mr. ERNST:: It was all worked out in
detail.


William Lyon Mackenzie King: However, we
have the report of the royal commission, and I should like to join with the Minister of Finance in expressing appreciation of the services voluntarily given by Lord Macmillan and Sir Charles S. Addis as members of that commission. I refrain from commenting on the complexion of the commission as a whole in not having had included in its personnel representatives of certain classes in the community that I think should have been included. I do so, simply because I do not wish to provoke debate at this stage. But I have pleasure in joining with my hon. friend in expressing appreciation of the services of the two distinguished and eminent authorities whose names I have mentioned.
In so doing I wish to make clear, and I emphasize this more particularly because the resolution before us makes reference to the Macmillan report, that in supporting the resolution we are not to be assumed to be supporting everything that has been recommended by the Macmillan commission. I wish to make equally clear that in supporting the motion to enable the minister to introduce the bill we are not for one moment to be assumed to be endorsing the several provisions of the bill. As a matter of fact we have not seen the bill yet, and therefore notwithstanding the minister's lengthy explanation, could not be expected to express any opinion on its provisions. All we can be said to be doing at this stage is expressing our approval of the introduction of a bill to create a central bank. There are provisions in the bill as announced by the minister which I think will commend themselves to hon. gentlemen on this side. There are some provisions which the minister has mentioned to which I believe exception will be taken. Therefore I want to make it particularly clear that when the minister states that the bank is to be constituted in a certain way, that certain powers are to be given to its officers, that the officers are to be appointed in a certain way, that the stock is to be held
by certain persons only these are all features of the measure on which we express no opinion at the moment with respect to and on which we wish to reserve our right to discuss very fully when we have the bill itself before us. At the moment we are simply acquiescing, and acquiescing very cordially, in the introduction of a bill for the purpose of creating a national central bank in Canada.
I do not think I need add more than that. The minister will, I assume, be prepared to answer questions when the resolution is being considered in committee of the whole. I wish to conclude with words, which have reference to the concluding words used by the minister himself, and say that our attitude on this side will be governed very much in the light of the minister's statement that he will invite before the banking and commerce committee to which he intends to refer this measure full consideration of its respective provisions, and that the government is still open-minded and will weigh carefully any suggestions which may be put forth there. We have no desire in any way to delay the measure in its progress to the banking and commerce committee. Indeed we wish the measure might have gone to the committee at an earlier date, recognizing how important that stage will be. I repeat, the attitude of hon. members on this side in permitting the bill to be expedited towards the committee stage is due to the fact that when the bill is before the committee they will then have opportunity to express very fully t'heir opinion with respect to its different provisions, and, if thought advisable, to move amendments to the measure when it comes again before the house.


Mr. G. G. COOTE (Macleod):: The establishment of a central bank in Canada has been urged from this corner of the house for a good many years.


Some hon. MEMBERS:: Oh, oh.


George Gibson Coote: For the information of members who have only been in the house for one term of parliament may I say it has been advocated in the banking and commerce committee for the past ten years by hon. members from this corner. I will not attempt to put on Hansard a record of the various attempts which were made, but perhaps it is worth while to remind the house that in 1931, three years ago, with the approval of members from this comer, I personally moved:
That, in the opinion of this house, there should be established in Canada a nationally owned central bank.



S32 COMMONS

[Stage Direction]
Bank oj Canada-Mr. Coote
On that occasion the only support which the suggestion received was from the hon. members in this comer. As far as I remember the leader of the opposition did not take any part in the debate. The Prime Minister on that occasion said that he could not agree to the establishment of a central bank at that time. It might be worth while reading to the house the last sentence of his remarks on that occasion. He said:
But I ask my hon. friend not to press his motion to a vote at this time because this country is not prepared to make the change that his motion involves, and until it is apparent it is, there is no good reason why the action should be taken. But I assure my hon. friend I am sufficiently alive to human progress to realize that time may come, and if when it comes, we are here, as we probably shall be half a century hence, that action will be taken.
When I introduced the motion three years ago, Mr. Speaker, the main reason I gave, which was stressed all through the course of my remarks, was the need to establish some agency to control credit in Canada in order to maintain, so far as it can be done through monetary control, a stable price level. I want to say that if that action had been taken at that time; if we had set up in Canada a nationally owned central bank charged with that duty and given the necessary powers, we would to-day be in a better position as a nation. On that occasion I pointed out that Australia had a nationally owned bank, and I think it worth while to advise the house just what use has been made of that bank in that country. It has assisted materially in bringing about in Australia much better conditions than exist in Canada. I have here a review of an article which was written by Professor Douglas Copeland, of the university of Melbourne, and which appeared in a recent issue of Lloyds Bank Monthly Review. In paragraph 4 the review points out that the expansion of credit in Australia was of great assistance to the government in meeting the depression in that country. The review goes on to say:
Bank credit was expanded for financing government deficits and public works by the issue of treasury bills through the Commonwealth Bank, Australia's central bank. During the crisis the expansion was at least 40 per cent. The treasury bills held by banks in Australia last June amounted to approximately 48 million pound's. They bear interest at two and a half per cent.
That is worth noting.
They form a convenient form of investment for banks in a period of low demand for business loans. They may be discounted at the Commonwealth Bank. Various kinds of fears have been expressed regarding the dire consequences which would follow the issue of the 
bills, but so far nothing has happened to cause Australia to lose sleep over them.
As a result of the joint action of the Commonwealth Bank and of the government- and this action was taken at the request and with the full approval of the government- for eighteen months commencing in January, 1931, Australian wholesale price levels were relatively stable. They fell seven points as a result of the crisis in the United States, which began in October, 1932, and reached bottom in March, 1933. Then they recovered. Taking 1911 as 100, wholesale prices in 1931 were 143 and in 1932, 141. The corresponding figures for Canada are 118 for 1931, 109 for 1932, 100 for last March and 111 for last June. In other words, our wholesale price index in Canada has been approximately 30 points below the level in Australia, and as a result of that our producers and businessmen, and the country as a whole, find themselves infinitely worse off. Four years ago Australia was in a worse position than Canada, or to put it the other way I would say that Canada was in a better position than Australia, but Australia took appropriate action; they had what I consider a more intelligent monetary policy, and one reason why they were able to do so was that they had a central bank. Yet when I introduced the resolution in 1931 asking for a national central bank it received no support outside this corner.
I was discussing the question of the relative position of Canada's currency on the world markets with some professors of economics in Canada in 1931, and they agreed that I was right in my contention that our currency was at too high a level, but they said, "We have no machinery to control it, and we will have to put up with the present position." I asked, "What do you mean by machinery?" and their reply was, "We have no central bank." I came to this house and introduced the resolution asking for the establishment of a central bank, but it was refused by the government. Now the idea has become popular in all quarters. I am very glad of that, but as a citizen of Canada I must express my regret that we did not take action three years ago. I believe I would not be overstating the case if I said that if, during the past three years, we had maintained in Canada the price level that has been maintained in Australia, this country would be better off by a billion dollars. If in 1932 we had maintained a comparative price level with Australia our wheat crop of that year would have been worth a hundred million dollars more in Canadian currency to the

Bank of Canada-Mr. Woodsworth
farmers of western Canada, and the same difference, in proportion, would apply to all our other exportable products. It is worth while pointing out that while we have strained every effort during the last three years to balance our budget, last year we wound up with a. deficit of something like $150,000,000, while the commonwealth government of Australia for their last fiscal year had a surplus of £3,000,000, largely due to a different monetary policy. One reason why Australia was able to have this different monetary policy was that they had a bank of their own, a nationally owned bank if you like.
This is perhaps not the appropriate time, to discuss in detail the proposal as brought in by the Minister of Finance this afternoon; that will come when we have had an opportunity of reading his remarks in full and seeing the bill. I do want to say to-day, however, that I see no reason at all for having any paid-up capital for this bank. The Commonwealth Bank of Australia had no paid-up capital, and it has been an eminently successful institution and has made profits for the government. If I remember correctly it started off with an advance from the government of £10,000 for till money, but I am satisfied that it had no paid-up capital. I see no reason at all for loading up this bank with a paid-up capital of $5,000,000 on which we are going to pay six per cent. That means paying out $300,000 a. year to the holders of this stock, and there is no need for that.
Next I want to say that in my humble opinion this should be a nationally owned bank, as was stipulated in my resolution in 1931. This country to-day is facing problems which are very difficult of solution. Almost every problem that you could name, almost every problem that was mentioned in the debate on the speech from the throne which took up three weeks of the time of this house, depends on a national credit policy for its solution. To-day we should have the very closest cooperation between the central bank and the government. That cooperation should be as close as the cooperation that now exists between two departments of the government. This bank is going to have more power than the government has, once we turn over to it the sole right to issue legal tender and credit in Canada. I cannot imagine this house turning over to a privately owned institution the sole right to issue legal tender in this country, in which debts of approximately fifteen billion dollars are expressed. Is a private corporation going to issue enough legal tender or is it not? Apparently this parliament is to have 74726-53
no say in the matter; we are going to turn over that right to a privately owned institution. I simply cannot let this opportunity pass without saying to the Minister of Finance that I do hope that when we come to discuss the bill he will see his way clear to change that part of it so that the bank that is to be set up in Canada, that is to have such wide powers and that might be so useful to us in solving the problems with which we are now confronted, should be nationally owned and controlled.
Mr. J. S. WOODSWORTH (Winnipeg North Centre):: I should like, if I may, to endorse and supplement what has been said by my hon. friend from Macleod (Mr. Coote). It was with somewhat mixed feelings that I listened to the announcement of the establishment of a central bank in this country. We have been advocating something of the kind for years.


Mr. BELL (Hamilton):: How many years?


James Shaver Woodsworth: For some ten years, but I must confess that I am not very well satisfied with the announcement that has actually come to us. It seems to me if I might use am illustration it would be something like this: A sharp knife is preferable to a dull knife; but a sharp knife may be used in the hands of a skilled surgeon to save life. It may be used in the hands of a murderer to take life. I am afraid the central bank miay become a means of more effectively scalping the public. The pressure of public opinion undoubtedly has forced the government to take action along this line. This measure may possibly placate the public, but I think it is only fair to warn the Canadian people that the central bank as proposed will not accomplish what some of us, at least, have been urging during these years. As was to be expected, the banks have again won. Even although in some individual measures proposed the banks may not be in full accord, essentially the financial control still remains with the financiers and is not secured for the public.
As I -heard the reasons advanced by the Minister of Finance (Mr. Rhodes) for the establishment of a central bank I could almost hear the echoes of what we have said in this corner of the house for some years past. But when he proceeded to give the outlines of the proposed legislation I felt that after all we were being, shall I say, "fooled." I do not wish to use any word which would be offensive, but my belief is that the legislation proposed will be so far from accomplish-



S34 COMMONS

[Stage Direction]
Bank of Canada-Mr. Woodsworth
mg the purposes for which the central bank should be established1 that the public at least ought to be warned of the real situation.
Sometimes hon. members in this comer of the house have been called wild-eyed visionaries. For that reason possibly I might be permitted to take a few minutes to bring to the attention of the house some of the measures which we have urged in the past. The hon. member for Macleod has mentioned several. I can recall very distinctly, when the Bank Act was being revised in 1923, moving in committee for the establishment of the position of inspector general of banks. That was turned down. It required the failure of the Home Bank before the government of that day would permit the appointment of an inspector general of banks. In 1923, while the act was under revision, I can recall very distinctly-and my recollection is borne out at page 4018 of Hansard-urging that some steps should be taken to curb the power of the banks. I pointed out the interlocking directorates which existed and -how, by means of this, great power was in the hands of the bank directors, and that virtually in Canada we had a money monopoly.
Further, in 1925, I find this resolution standing in my name:
That, in the opinion of this house, it is not in the interests of the country at large that the privilege of issuing currency and controlling financial credit should be granted to private corporations.
To-day the leader of the opposition (Mr. Mackenzie King) has claimed that fo-r -a long time the Liberals have been in favour of a central bank. May I say that we did not receive any very great assistance from the government of that day when we put forward the proposal I have just mentioned. Hansard will amply indicate that. The hon. member for West Hamilton (Mr. Bell) scoffs at the suggestion that we proposed these things.
Leslie Gordon Bell: I did not scoff at anything. It must have been the smiling member for East Hamilton.


James Shaver Woodsworth: Ten years of sunshine has done its work upon the copy of Hansard from which I am quoting. It is now badly faded, but it indicates that that far back we were trying to secure some changes. Further, in 1926 a similar resolution was brought in.
In 1928 I moved, in somewhat more positive form:
That in the opinion of this house the time has come for the establishment of a national system of banking.
[Mr. Woodsworth.l
While I recognized that that could not be brought about at one fell swoop, I did urge these points, which I summarized:
. . . that we need greater government control than we have at present because we have reached a stage of industrial and financial development when a few men not directly responsible to the people, control the money practically of the whole people of Canada.
Secondly, the hanks still have in their own hands the valuable franchise of issuing currency. This should not he given to any privileged group. The issue of money is essentially a government function.
Thirdly, I went on to speak of the control of credit. It is necessary to have some central control in order that the weaker portions of the country and the weaker industries can be protected against those strong concerns which now are working in such close cooperation with the banks. Further, as undoubtedly, according to the authorities I have quoted, the amount of money in circulation, including the credit which was given, has a direct bearing on the cost of living. It is all important that this function too, should he controlled by officials who are responsible to the public, and not to irresponsible private corporations.
There is a fourth point which I have not had time to develop, hut which I shall simply mention in closing, and that is that if some plan of this kind could be carried out it would assist materially in government financing.
I would urge to-day that the power of finance in Canada is almost supreme. I think I am not going too far to say that in practice it is greater than that of the government. In recent years some of us have been almost shocked when we learned that the army and the military clique in Japan had never been brought under the control of the parliament of that country. Well, I take it that in Canada the financial powers have never been brought under parliamentary control. Even as far back as the time of Mr. Gladstone I find that there was a dawning recognition of the tremendous power of the banks.
Reading from Morley's Life of Gladstone I find a statement from Mr. Gladstone:
From the time I took office as Chancellor of the Exchequer I began to learn that the state held, in the face of the bank and the city, an essentially false position as to finance. The hinge of the whole situation was this: The government itself was not to be a substantive power in matters of finance, but was to leave the money power supreme and unquestioned. In the conditions of that situation I was reluctant to acquiesce, and I began to fight against it by financial self-assertion from the first. ... I was tenaciously opposed by the governor and the deputy governor of the bank, who had seats in parliament, and I had the city for an antagonist on almost every occasion.
I think the only difference between Mr. Gladstone and the ministers of finance we have had in this country in recent years is

Bank of Canada-Mr. Woodsworth
that at least he fought against the financial power, while our ministers of finance apparently have acquiesced in their policies.
May I emphasize several points which seemed to me to be of importance, but which are not affected by this measure. First of all let us consider the interlocking directorates of our present chartered banks. Although there may be some control of credit in this new body which is to be created, as a matter of fact a very large measure of the control of credit will still be in the hands of the chartered banks. That means that they can throw credit this way or that way. I am glad to note in the outline of the legislation containing proposed changes in the Bank Act that there is some little control over the amount that may be loaned to directors. That will be of assistance. But even with that we may still have the chartered banks very largely in the position to say whether credit shall be given or withheld, and to whom credit shall be given. We in this group still think, that credit ought to be in the nature of a public utility and that it ought not to be placed in the power of private, and may I say, irresponsible individuals.
I am glad to note in this proposed legislation that ultimately the new bank is to have control of the issuance of the currency, but I do not know why the government should treat the banks so leniently. Several years ago we were told that the franchise of issuing currency was of no very great importance, but now the banks have come to the position where they admit that it is of great financial importance to them, and so under the proposed legislation this franchise is to be taken away from them by very gradual steps indeed. It does seem to me that the issuance of currency is a prerogative that ought never to have been surrendered and one that ought immediately to be taken back by the government.
As to the control of credit itself, which in my judgment is a great deal more important than the power to issue currency, may I read two or three very significant sentences from the Macmillan report, which I believe the Minister of Finance has already quoted to-day:
From a national point of view, the central bank, within the limits imposed by law and by its capacities, should endeavour to regulate credit and currency in the best interests of the economic life of the nation and should so far as possible control and defend the external value of the national monetary unit.
Again:
There are many factors, of varying nature, which combine to influence that level, and a central bank, working as it does purely in the monetary sphere, cannot be expected to have 74726-53i
complete control, though it may well have a measure of influence.
Still further:
It is manifest, however, that the regulation of the volume of credit is an important factor in influencing the level of economic activity and therefore of prices, and this is one of the cardinal tasks of a central bank.
That is the position, Mr. Speaker, that we in this corner of the house have taken for some years. We were laughed at by members of the older "parties even though we quoted as our authorities some of the best economists and some of the most experienced bankers in the old land. Only this session someone ridiculed us suggesting that we should confine ourselves to practical matters. But we regard it as a full vindication of our position that the Macmillan report has frankly recognized the influence on the price level of the control of currency and credit.
I am rather sorry, however, that the Macmillan report and the Minister of Finance, following that report, have not gone so far as to advocate the assumption by the central authority of greater powers. There is one little sentence which I omitted from the excerpts which I have given from the Macmillan report:
If it attempted to exercise any drastic control it would have to wield powers far beyond those which any body other than the sovereign authority would be entitled' to exercise.
I submit, Mr. Speaker, that unless some body, either the newly appointed bank or the government, itself exercises what is here termed sovereign authority, we are not going to secure the full control of credit, and are not going to be able to control price levels. I think that nothing short of that is going to help us in a material way to solve our present difficulties.
We were told by the present government some years ago that the Finance Act was able to function in this country as a central bank, and that we did not really need a central bank in this country. I recall an amendment which I offered to the Finance Act which if passed would have had the effect of enabling our Finance Act to be of some real service. Possibly I might be permitted to read from that amending bill which I proposed:
The minister may, subject to the approval of the governor in council, appoint a board of commissioners to exercise, under the supervision of the minister, the powers vested in the minister by this act, and without limiting the powers which are by this act so conferred the board may-
(a) exercise the powers conferred upon the minister by section five of this act;

Bank oj Canada-Mr. Woodsworth
(b) buy and sell in the open market any or all of the securities set forth in paragraphs (a) to (e), both inclusive, of section five of this act, and may make all advances of dominion notes necessary for this purpose.
I may say that my bill was ruled out of order on the ground that it involved the expenditure of public money. Thus once again we were thwarted in our efforts to secure some improvement of the situation.
I concur with my hon. friend from Macleod in the idea that we should have, some way of maintaining the stability of our exchanges. I hope that it may be possible to do this under the proposed bank, but I am very doubtful whether the bank as organized is likely to be in a position to act effectively.
There is only one other point in this connection that I should like to mention and that is in regard to government financing. For years some of us have thought that the government, if for no other reason, should have a central bank, in order to finance without having to resort to private institutions which always took a very heavy toll.
I regret indeed that the proposed legislation proposes to set up the bank as a privately-owned institution. The Minister of Finance has suggested that he is willing to consider seriously any amendments which may be brought forward by the committee on banking and commerce. I do hope that he will listen to amendments which would change the set-up of the bank and allow it to be a publicly-owned institution. I am quite confident that nothing less will satisfy the Canadian people, and that nothing short of that will enable the bank to function as it should.
I should like also to object to the control as proposed. It is all very well to have the government make the initial appointments, but after that it would seem that the management is to be self-perpetuating, with a certain safeguard, perhaps, that they have to be acceptable to the government. It does seem to me that there should foe a closer connection between the proposed bank and the government, and, I do not hesitate to say, a greater control by the government than may be possible under the proposed arrangement.
As I listened to the Minister of Finance it occurred to me that his statement with regard to the fear of political influence was one of the worst indictments of our democratic institutions that could possibly be put forward. Government is so corrupt to-day that we must forsooth set up another body, outside of government, that will not be influenced by government. If that is the case we might as well throw up our hands. Surely the people ought to be sovereign; surely in the long run the

people must be depended upon to control the situation. As it is, we set up a body that is virtually independent and will be composed of people who undoubtedly have their own interests at heart. The further arrangement regarding shareholders means that it is the wealthy people who will still be in charge. In this legislation we are doing nothing to take the control from the hands of the financial interests and put it under the power of this parliament.
I note too the minister tells us that the privileges of the chartered banks, under the new arrangements, will be similar to those now enjoyed under the Finance Act. There again, it seems to me, we are perpetuating a system that is inherently evil. I think it was my hon. friend from Battle River (Mr. Spencer) who two years ago introduced an amendment under which the municipalities and the provinces would have the same rights under the Finance Act that the banks now have.


Mr. SPENCER:: The provinces only.


James Shaver Woodsworth: I stand corrected. I myself would have gone further and said that not only the provinces but the municipalities as well should have those rights. That amendment was rejected by the government. Apparently there is no provision in the proposed legislation to cover that point. Under the Finance Act, as it has existed in the past, loans may be made on certain securities, in practice at 3 per cent, and the provinces and municipalities may then be charged say 6 per cent. The assessment of values of securities is left in the hands of the trustees of the gold reserve, three banks. If these privileges are to be continued I submit that there is little hope that under the proposed arrangements there will be any great improvement.
I shall suspend further criticism until the details of the legislation are brought down, but I would suggest again that the government would be well advised if it permitted certain amendments which would give to the people of the country greater and more direct control in the management of the new institution, and would make it essentially a publicly-owned utility.


Richard Bedford Bennett: I would make one observation
only, consequent upon the remarks of the leader of the opposition (Mr. Mackenzie King). There is no great interest as to who at a particular time suggested that there should be a central bank, but I think it might be well to remember that when the Genoa conference was held in 1922 a recommendation for a central bank was passed and this country

Bank of Canada-Mr. Bennett
was represented at that conference by one who had the approval of the then government. I have always been wandering just why, when the Bank Act was revised in 1923, no provision was made for a central bank. That is what I desire to say, and I say frankly that hon. gentlemen who sit opposite and to the right did three years ago argue for a central bank. I think it would have been a little better this afternoon if they had said that it would be quite impossible to create a central bank in this country without revising the Bank Act, and as the Bank Act was for a period of ten years, to have undertaken at the end of seven years to withdraw or to lessen the privileges which parliament had conferred for ten years, to create a central bank at the end of the seven year period, would have brought about great difficulties. I think there is no doubt in the mind of any hon. member that that is so.


James Shaver Woodsworth: Does the Prime
Minister really suggest that there can be no revision of the Bank Act within the ten year period?


Richard Bedford Bennett: He certainly does not, Mr. Speaker. But he does desire to assure the hon. gentleman from Winnipeg North Centre (Mr. Woodsworth) that when privileges are granted for a period of ten years the abrogation of those privileges before the end of the period cannot take place unless something in reason is substituted for them.
Now the essential feature of our banking legislation has been that we have conferred certain privileges upon organizations or corporate entities that came into being by the exercise of their powers by parliament. That is, parliament has said that a given number of individuals who will subscribe a given amount of capital shall thereby become organized, not as a trading corporation but as am entity called a bank, with a proper name; and amongst the privileges which we have conferred upon the banks heretofore in the last fifty years was the privilege of issuing paper money. That is, during the period of ten years, from 1923 until 1933. and by appropriate legislation in 1933 until the first of July, 1934, the chartered banks, created by statute of this parliament, had conferred upon them a privilege-the privilege of issuing paper money to the extent of their paid-up capital. And I think it will be common ground with us all that to have deprived the banks of that privilege within the ten years would have been an improper exercise of the powers of parliament. I merely mention that, because I am not going to discuss the various features of the legislation, which have been so
fully explained to the house by the Minister of Finance. I merely wish to indicate that as long ago as 1923 this parliament was aware of the fact that the nations of the world had met together at Genoa and had declared that a central bank was desirable for all countries that did not possess one. The present president of the Bank of Montreal was one of the delegates who attended that gathering, and for good reasons the government of the day, when amending the Bank Act, did not make any provision for the establishment of a central bank.
I do not know that any very great purpose is served by wandering around to ascertain who was the putative father of this particular idea in days gone by. It might be sufficient for our purposes to say that this government at the present time is assuming paternity for the measure introduced by the Minister of Finance. That perhaps covers the situation sufficiently for our purposes, and there is no necessity of making further observations with respect thereto. I do not think any useful purpose will he served at this stage by traversing the various observations made by the hon. gentleman who has just resumed his seat (Mr. Woodsworth), nor by traversing the various matters referred to by the leader of the official opposition. All that need be said is that by passing the resolution now standing in the name of the Minister of Finance we are not approving of the details of the measure, for the house is not yet possessed of a knowledge of those details. We are merely pronouncing in favour of a central bank, and when the measure has been introduced and the bill given the first reading the house will have an opportunity to consider later the-extent to which it approves of the details as they appear in the measure.
On the other hand it will go to the committee on banking and commerce where I am sure, if it follows the course that similar measures have done in days gone by, it will meet, at the hands of those who sit opposite and to the right, with that warm reception that characterizes all measures that emanate from any government. That their ideas with respect to finance are sometimes extreme is well known, but that many of the suggestions they have made from time to time with respect to credit, banking facilities and so forth are generally recognized as having some merit is but a very commonplace statement to make. One could not expect that every possible suggestion that has ever appeared in any part of the world would all be wrong. I am sure that is the attitude of mind with which the hon. member for Wetaskiwin (Mr. Irvine), for instance, views this matter. There
Bank oj Canada-Mr. Bennett

to them, and making provision to secure the largest profits to relieve the taxpayer of his burdens. That is, all the profits resulting from the operations of this bank, with the exception of the dividend upon the $5,000,000 capital. Mark you, the taxpayer would have to pay interest if the money were borrowed on the open market, but by the proposed plan it is the shareholder, instead of the taxpayer buying the bonds upon which the interest is paid. It may be the rate would be slightly less in one case than the other, but the interest on the capital would in any event have to be paid. In that connection may I remind my hon. friends that the Commonwealth Bank of Australia in its early years was operated at a loss, until its expanding powers enabled it to cope with the situation and make not only profits but build up a reserve which was capitalized in 1924 as I have indicated.
So in taking the steps we have in carrying out the majority opinion of the Macmillan commission I do submit that it was not done merely because it was their opinion, but because the experience of business men throughout the world has been that we have not yet been able to devise any legislative action, any scheme whereby those who are responsible for the conduct of business when publicly owned are subject to the scrutiny and criticism that falls upon the directors of private enterprises at the hands of the shareholders. That is one of the great reasons that has influenced your government in arriving at the conclusions that are expressed in the bill.
I had not intended to deal with so many of these matters as I have. I only trust that the assurance given by the Minister of Finance may be taken to heart by every hon. member of the house and that an earnest effort be made to place upon the statute books, by the collective wisdom of all groups in the house and every individual who has a constructive suggestion to make, a measure that will create for us the Bank of Canada, which will discharge its functions as well as, if not better than, any central bank established in any country of the world.
Motion agreed to and the house went into committee, Mr. Lennox in the chair.


Ian Alistair Mackenzie: I think the Minister of Finance indicated in his address that the gold reserves of the treasury would 'be taken over by the central bank and that the profit would go to the dominion government. Has he any computation of what that profit will be?


Edgar Nelson Rhodes: No, it is not possible to make that computation. When the bill is

brought down we will see that provision is made for a computation.


George Gibson Coote: May I ask the minister whether the central bank will take over the gold held by the chartered banks, if so, at what price?


Edgar Nelson Rhodes: It is proposed that the gold which is taken over shall be gold which is applicable to their business in Canada. It is not proposed to deal with the gold which is earmarked as a reserve against the liabilities of the bank outside of Canada in the same manner as the gold which is held as a reserve for business in Canada.


George Gibson Coote: Am I to understand from
that answer that part of the gold held by the banks in Canada is earmarked for business outside of Canada?


Edgar Nelson Rhodes: Yes, it is, and has been
for a very considerable length of time.


Mr. IRVINE:: I should like to ask the
minister a question having to do with the control of the bank. Supposing the central bank was endeavouring to regulate the control of credit in Canada, and supposing the policy it adopted in order to do so was contrary to the policy of the government of the day, and they clashed, which authority would make the decision?


Edgar Nelson Rhodes: Unquestionably the authority of the governor and the board of directors of the bank would prevail.


Edward James Young: Now give us an example
of that; we do not understand what you have in mind.


William Irvine: If my hon. friend expects
me to give him an example I should be very glad to do so, but I should like to take a week in order to make sure that he understood it.


Edward James Young: Then will the hon. gentleman come back in a week with an example?


Henry Elvins Spencer: I think in outlining the
set up of the bank the minister said there would be seven directors. I should like to ask how these directors are to be appointed. I know they are to be appointed by the governor in council, but is it suggested that they should come from different parts of Canada or that they should represent different callings, or has the government anything in mind with regard to their qualifications?


Edgar Nelson Rhodes: The directors are to be
selected in the first instance by the governor in council and they will retire in rotation in order to make for continuity of policy. As

Bank oj Canada
and when they retire their places will be filled by the shareholders, but the bill will provide, as well as can be provided in a statute of this character, that they shall be selected in such manner as to make them representative of the different interests in the country.


Mr. McINTOSH:: If the opinion of the
governor and the directors of the bank prevails in any difficulty that may be up for solution, then what about responsible government in Canada? Where would that be?


Edgar Nelson Rhodes: Well, Mr. Chairman, the
authority and power of parliament is always supreme, and it is none the less supreme because of the fact that parliament, in its wisdom, may delegate a portion of its authority in this instance, as it has done in numerous other instances. [DOT]


Ian Alistair Mackenzie: The
minister has stated that no employees or officials of the chartered banks will be allowed to hold shares in the new bank. May I ask if that will apply also to the trust companies, some of which at the present time are more or less subsidiaries of certain banks?


Edgar Nelson Rhodes: The act is worded as
closely as it is possible to make it in order to prevent a bank from holding shares even indirectly, and I would assume in the instance to which my hon. friend refers that it would become a matter of interpretation as to whether that would be an indirect interest on the part of the banks. I can assure my hon. friend that when the bill is considered by the committee on banking and commerce the government will welcome any additional safeguards that can be provided in order to help carry out the intention expressed in the bill.


William Lyon Mackenzie King: May I ask if there is any provision in the bill to the effect that the officers shall be Canadians?


Edgar Nelson Rhodes: I think the term used is "British subjects." The bill provides that they must be British subjects, but it does not say they must be Canadians.


Mr. LAPOINTE:: Why not "Canadian
nationals"?


Edgar Nelson Rhodes: Well, Mr. Chairman, that is a fair subject for debate, and it is a matter which can be discussed in the banking and commerce committee. I am merely advised that the practice which has been followed in numerous other acts in which limitations are imposed with regard to the nationality of those who shall compose certain bodies has been followed in this case, but that is a
matter for discussion. Of course there are other limitations in addition to this matter of residence.


Thomas Reid: I should like to ask the minister if the government will control the metal coverage and also define what precious metals will be used as coverage.


Edgar Nelson Rhodes: I think the answer to that question is that the statute itself provides for the metal coverage, so the statute would control it and not the government.


Henry Elvins Spencer: May I ask if the Minister of Finance will hold a share in this bank, on behalf of the government?


Edgar Nelson Rhodes: No. It is provided in the bill that if the stock is not completely taken up by the public the Minister of Finance may do so. There is also a provision that all proxies shall come through the Minister of. Finance.


Ernest Lapointe: Are members of parliament excluded?


Edgar Nelson Rhodes: No.


George Gibson Coote: Is the Minister of Finance to be a member of the board?


Edgar Nelson Rhodes: No.


Mr. MacLEAN:: If I understood him correctly the minister said that the issuing of these bills would be gradually taken over by the central bank. How will that be done? I understand that at present the advertising from the bills is quite a factor to the banks, and that if they lose the right to issue bills they will lose the benefit of this advertising.


Edgar Nelson Rhodes: The bill provides that beginning January 1, 1936, there must be a reduction of 5 per cent in the bills issued by the banks. That reduction continues for a period of five years, and then for a further period of five years the reduction is 10 per cent annually, so that at the end of ten years there will remain only 25 per cent of the total issues by the banks. Then when we come to another decennial revision of the Bank Act we will see what action is advisable in that respect, but certainly the notes of the banks will disappear in the proportion I have mentioned, so that at the end of ten years all the bills, with the exception of 25 per cent, will be those of the Bank of Canada.


Edward James Young: The minister spoke of the right given the chartered banks to issue notes. Do they pay any interest to the government on their note issue or any part of it?


Edgar Nelson Rhodes: Yes; they pay, and have paid for a number of years, a tax of one per cent on their circulation.
Bank of Canada


Edward James Young: On their total circulation?


Edgar Nelson Rhodes: Yes, that is to say, they pay that tax on their regular circulation. Of course there is provision for the additional issue of 15 per cent of their circulation for a certain period, on which they pay a much higher rate.


William Lyon Mackenzie King: In one of his
addresses the Prime Minister intimated that the government's intention to establish a central bank was partly the outcome of a resolution passed at the world economic conference approving one of the resolutions of the monetary and financial commission. I believe that this resolution states that among other purposes the central bank is necessary in order to provide an international gold standard, with the necessary mechanism for its satisfactory working. Would the Minister of Finance be kind enough to indicate whether or not there is a provision in this bill for that purpose and, if so, the nature of the provision?


Edgar Nelson Rhodes: Yes; I think the bill as drafted is amply wide to take care of all international transactions, including gold. I pointed out that the standard of the bank will be a gold bullion standard, but at the same time the bank may buy and sell gold coins.


Mr. HANBURY:: Before this resolution is reported may I say that as I understand it, [DOT]private ^ownership is service for a profit. Under this measure I understand the profit is going to be limited and it is a question in my mind whether it would be in the interests of efficient operation of a central bank to give permission to make some small return over and above what has been provided, so that we will at all times be assured of efforts to increase efficiency.


Edgar Nelson Rhodes: Mr. Chairman, the profiit above the fixed amount for which there is provision in the bill, namely of six per cent, goes to the consolidated revenue fund. We have endeavoured on the one hand to provide a fair return for the capital which is supplied from private sources but on the other hand have tried to eliminate the urge to make profits, as profits.


Richard Bedford Bennett: There is no limitation upon the profits, but there is upon the dividends.


Wilfred Hanbury: That is the point I have in mind. The time may arrive when a profit has not been earned. If we have a private bank striving to earn profits, but is not successful in that effort, it may be that the service would become less efficient. That is

*the point I am bringing to the attention of the minister, namely as to whether or not we should not maintain some basis of profit so that we may continue at all times to increase efficiency and the desire for greater profit.


Mr. BOWMAN:: Are the dividends to be guaranteed by the government?


Edgar Nelson Rhodes: No, they are not. As a matter of fact, if the bank does not earn six per cent there will be no dividends paid.


James Langstaff Bowman: They will be cumulative?


Edgar Nelson Rhodes: Yes, they are cumulative.


William Lyon Mackenzie King: The minister has stated that the provisions in the main are based on the findings of the royal commission. Could the minister indicate whether or not the bill departs in any particular from the findings of the commission?


Edgar Nelson Rhodes: There may be some details, but in its broad features I think it is fair to say that we have followed the recommendations of the Macmillan commission. I have in mind one instance, for example, where the commission recommend that the reserves of the bank should be twenty-five per cent in gold and foreign exchange. We have provided that it must be twenty-five per cent in gold, and that any foreign exchange must be over and above the twenty-five per cent, which means that we have gone even farther than was recommended by the commission.
Then, of course there are other recommendations. For instance, one major recommendation made by the commission was that, the central bank should take over and manage the public debt of Canada. We did not see fit to recommend in this bill that that feature should be mandatory. But, in the main we have followed the broad general recommendations of the commission, departing perhaps here and there in detail.


William Lyon Mackenzie King: The wording of the resolution has prompted my question. It might be construed as meaning that all the provisions of the bill are as recommended by the royal commission. But I am quite satisfied with the minister's reply to the effect that there are some provisions which are not in accordance with the recommendations of the commission, and differ from them. I assume that when the bill comes before the committee and there is consideration of any of the provisions the minister has mentioned, a suggestion which may run counter to the recommendations of the commission will not be ruled out because it is a counter recommendation.

C.N.R.-Appointment of Auditors


Edgar Nelson Rhodes: I believe the statement I made at an earlier stage, when moving the house into committee, will indicate that the government is prepared to deal sympathetically with any suggestion towards strengthening the bill, and which has in mind the main object of the bill, which may emanate in committee.


Richard Bedford Bennett: If the right hon. gentleman would look at the measure he will see that the limitation is not such as he indicated. It is not so indicated1.


Wilfred Hanbury: Is it the intention to charge income tax on the profits of the central bank?


Edgar Nelson Rhodes: There is no reference in the bill itself to income tax, but certainly the dividends which go to individual shareholders will be subject to income tax.


Wilfred Hanbury: You could not say with reference to the corporation itself?


Edgar Nelson Rhodes: No, because that is the
property of the treasury, and goes into the consolidated revenue fund.


Edward James Young: The point is this: Does the income tax come off the gross profits before that payment is made to the revenue fund, or will it come off afterwards?


Edgar Nelson Rhodes: I cannot see that it makes the slightest difference whether it is gross or net. All the shareholders can get is six per cent, and that is all in which he is interested. That six per cent will be subject to income tax.


Edward James Young: Gan he get six per cent?


Edgar Nelson Rhodes: If it is earned; but he must render an account of that six per cent in making out his income tax report, as a portion of his income.


Edward James Young: That is not the point. Here is a corporation which will earn certain profits. All profits over six per cent will go to the government. That corporation will be taxable for its profits.


Richard Bedford Bennett: No, it is not.


Edward James Young: Will the six per cent left with the corporation for dividend purposes be taxed as income tax against the corporation?


Edgar Nelson Rhodes: No, there will be no tax against the corporation whatever.


Mr. BO YES:: May I ask the minister if the double liability clause which applies to shareholders of chartered banks will apply to shareholders of the central bank?


Edgar Nelson Rhodes: No.


Henry Elvins Spencer: I should like to ask
whether there will be any maximum with regard to salaries of the officials?


Edgar Nelson Rhodes: The only limitation imposed in the measure as at present drafted is a maximum amount which will be available as fees for directors. There is a further provision in the bill that the salaries payable to the governor, the deputy governor, and the assistant deputy governor shall in the first instance and thereafter be subject to the approval of the governor in council.


William Lyon Mackenzie King: Does the minister present a report to parliament and is the report subject to review at each session?


Richard Bedford Bennett: No, not subject to review; we make a report but it is not subject to review.


William Lyon Mackenzie King: But, as a basis for discussion in the house?


Richard Bedford Bennett: Yes, it could be discussed.
Resolution reported, read1 the second time and concurred in. Mr. Rhodes thereupon moved for leave to introduce Bill No. 19, to incorporate the Bank of Canada.
Motion agreed to and bill read the first time.


William Lyon Mackenzie King: May I ask if copies of the bill in English and French are already available for distribution?


Edgar Nelson Rhodes: Yes, I will send a copy over to my right hon. friend.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.
CITY OF OTTAWA AGREEMENT Hon. H. A. STEWART (Minister of Public Works) moved the second reading of Bill No. 8, to authorize an agreement between His Majesty the King and the corporation of the city of Ottawa.


[Stage Direction]
Motion agreed to, bill read the second time, considered in committee, reported, read the third time and passed.


[Stage Direction]
Hon. R. J. MANION (Minister of Railways and Canals) moved the second reading of Bill No. 17 respecting the appointment of auditors for national railways.
[Stage Direction]
C.N.R.-Appointment of Auditors
Right Hon. W. L. MACKENZIE KING ^Leader of the Opposition):	When this
measure was introduced I asked the Minister of Railways to give an explanation, and my recollection of that explanation is that the minister said it was to appoint auditors as provided by the Railways act of last session. Looking however at the bill which has been presented, it appears to be a bill to amend the act of last session and to have the auditors appointed by act of parliament rather than by resolution of the House of Commons. That is hardly in accordance with the explanation given by the minister.
Robert James Manion: As a matter of fact, the
leader of the opposition is correct in using the word resolution. On looking into the matter however we find that we could not do it by resolution of parliament. If it is done by parliament, which comprises the King, the Senate and the House of Commons, it must be done by statute. I fancy that there was rather a slip-up last year in this respect. My impression was that it was by resolution of the House of Commons, but unfortunately we made it "resolution of parliament," and I am advised by the legal officers, both of my own department and of the Department of Justice, that the way proposed is the only way of carrying it out.


William Lyon Mackenzie King: It may be
irregular to be debating the measure on the second reading. Perhaps I may be pardoned however, if I say a further word, in view of the explanation given at the outset and the change in the significance of the measure in what is now proposed. My own feeling would be that the intention originally was to have the auditors appointed by resolution of the House of Commons. I believe it would be better to provide in the measure for resolution by the Commons and to proceed along that line rather than to appoint the auditors by act of parliament. There is one other fact I would mention, and that is that the essence of the appointment will lie in the names of the persons to be appointed, and the bill as presented leaves that blank.


Robert James Manion: I will tell the right hon.
gentleman who they are.


William Lyon Mackenzie King: Before agreeing to the second reading of the bill, if we are doing more than agreeing to the appointment of officers, the house ought to know the names. Would not the minister consider the suggestion I have just made of having the auditors appointed by resolution of the House of Commons? I will be perfectly frank as to what I have in mind. The House of ComfMr. Manion.]
mons is the body that primarily has control over money matters. It has always been of special concern to the House of Commons to deal with all problems of finance, and we ought not to be asked to share that power with another branch of parliament. If there were appointed auditors whom the House of Commons might wish at any time to change, this house should be free to make that change without having to obtain the consent of the Senate.


Robert James Manion: If my right hon. friend
will allow the bill to go into committee we can discuss that point afterwards. I have not given any thought to the suggestion he has made, though I do not see any objection to the matter standing as it is, because the appointment is only for one year in any event. The provision adopted last year was that a continuous audit of the accounts of the national railways should be made by independent auditors appointed annually, and so forth. So that it will have to come up next year, though that would not be necessary if the intention were to leave the same auditors; and inasmuch as we intend to appoint the auditors who have been there for a good many years I do not think the house will object.


Mr. PETER McGIBBON (Muskoka-Ontario):: I voice my objection to the last
statement of the minister. I do not think that one firm of auditors should be continuously auditing the accounts. It might be all right for three or four years, but I think there should be a change every three or four years, in the interests both of the railways and of this parliament. I am glad to note the minister's statement that it is only for one year, because otherwise I should be very much disappointed.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Gobeil in the chair.
Section 1-Auditors appointed.
William Lyon Mackenzie King: Will the minister explain?


Robert James Manion: We intend to appoint,
for this year at any rate, the same auditors who have been carrying on for many years, George A. Touche and Company of the city of Toronto, chartered accountants. In reply to my hon. friend from Muskoka-Ontario, there is no reason why these auditors need necessarily remain longer than one year; the provision which I have just cited states that the auditors shall be appointed annually. I said that if we did not desire next year to change

C.N.R.-Appointment oj Auditors
the auditors there would be no need to reappoint them; in other words, they would carry on until their successors were appointed. But that is a matter for discussion next year. It has been decided, after a good deal of consideration, that the auditors who have been doing the work for a good many years-
I do not know exactly how long, but eight or ten years at any rate-are so well trained in the work and are so capable that it would be wise to appoint them at least for this year. I am informed by the railway people themselves that it would take quite a long time for any group of auditors to learn the method of auditing such an immense system of books and accounts as are contained in this vast business. For example, I am told that there are no other chartered accountants in Canada who are familiar with the Interstate commerce commission's type of accounting and the accounting of the Canadian National Railways is carried on under the same rules as those of the Interstate Commerce commission for the railways of the United States. If it be true, as I am informed, that there are no other companies of chartered accountants in Canada who are familiar with that type of auditing, it would probably take many months for a new company to assume charge of the auditing and become familiar with it. Therefore, after a good deal of consideration, we felt that it would be wise, at any rate for this year, to appoint George A. Touche and Company, and I intend to move that the name " George A. Touche and Company, chartered accountants of the city of Toronto " be inserted in section one of this bill.


Henry Elvins Spencer: For how many years have the same auditors been engaged?


Robert James Manion: I believe for eight or ten; they have been doing that work for many years anyway.


Mr. STEWART (Edmonton):: Was the
minister advised by the law officers as to the necessity for making this appointment by statute rather than by resolution which would confine it to the House of Commons?


Robert James Manion: I was so advised.


Richard Bedford Bennett: In the main act the
resolution is a "resolution of parliament" and a resolution of parliament does not mean a resolution of the House of Commons; that is all. Parliament means the Commons, the Senate and the Sovereign, The only way to meet that condition was to pass a statute or else amend the main act and provide that, the resolution should be one of the House of
Commons. Rather than amend that act, we are following the course the act indicates- passing a resolution of parliament.


Charles A. Stewart: It seems to
me that this is making appointments in connection with the operation of the Canadian National Railways very difficult to change. It is all right to say that they can be changed by statute, but a statute requires the consent of both houses. This is a case in which the intention clearly was to leave the matter to the commons itself. If the main act did not make that provision, it appears, to me that it should have done so, because after all the House of Commons is the body that is responsible for the operation of the national railways.


Richard Bedford Bennett: Not any more than the
Senate.


Charles A. Stewart: My right
lion, friend and I may differ in that regard.


Richard Bedford Bennett: There cannot be a difference of opinion.
Mr: STEWART (Edmonton): Yes, there can be a difference. There was considerable controversy in the passing of the act last year.


Richard Bedford Bennett: Not on this point,


Charles A. Stewart: Not on this particular point because it did not arise, but it arises now and personally I want to protest.


Mr. GRAY:: I do not have the act of
last year before me, but it appears to me that once the name of George A. Touche and Company is inserted in this bill, they are made permanent auditors of the Canadian National Railways unless the act is repealed.


Robert James Manion: May I read the section to my hon. friend; it is section 13 of the act of last session. It reads:
A continuous audit of the accounts of National railways shall be made by independent auditors appointed annually 'by a resolution of parliament and annually reporting to parliament in respect of their audit. Their annual report shall call .attention to any matters which in their opinion require consideration or remedial action. They shall be paid by the national company such amounts as the governor in council shall from time to time approve.
The only way we could do this other than the way in which we are doing it would be by changing the act of last year, because it distinctly states, as the Prime Minister pointed out, that the appointment shall be made by a "resolution of parliament" and according to my information that can be done onlly by a statute of that kind. As the bill says that the appointment is to be made annually, this



S46 COMMONS

[Stage Direction]
C.N.R.-Appointment of Auditors
parliament can change the auditors next year and there is certainly nothing permanent about the appointment.
Ross Wilfred Gray: I agree with the minister that we can change the auditors, but we shall have to do so each year by this particular legislation we are now placing on the statute books. This power is conferred by the act of 1933 and it is that act which tire government should amend rather than introduce a separate measure, I ask the minister to consider the matter.


Robert James Manion: I simply reply that I have been informed by the legal officers of the crown that a resolution of parliament means a statute. The only way in which you can pass a resolution of parliament is by passing a statute. Therefore we are carrying out entirely the course laid down last year.


William Lyon Mackenzie King: What the minister says is quite correct, that if there is to be a resolution of parliament, an act of parliament is what is signified, but I should imagine that in the original draft of the act the emphasis was intended to-be placed on the word "resolution" and not on the word "parliament." The fact that the word "resolution" appears, would seem to indicate that what the law officers had in mind was a resolution of the House of Commons; otherwise they would have adopted the customary phraseology by the use of the word "act." I have no suggestion or comment to make as to the auditors; I know nothing about the firm mentioned except what is highly creditable in every way. A larger consideration and very important principle are involved, namely that on these matters which relate to financial operations and appointments of this character which are specially related thereto, the House of Commons should maintain its position of control and, in fact, a more or less exclusive control. I can understand wherein perhaps the minister may have some reluctance to bring the original act before parliament for purpose of amendment, as it might open up a discussion on the matter generally, but even if he is obliged to run that risk, it is much better to take the right course at the outset and preserve to this house the appointment of auditors by resolution of the commons alone, than to pass acts of parliament in connection with matters for which the House of Commons alone should be responsible.


Richard Bedford Bennett: Now that I think of the matter, I suggest that the provision was placed there with great deliberation; it was to remove the appointment of auditors from mere political control. The House of Commons is a political organization purely and simply.

The Senate need not be and very often is not. In the days of Macdonald, it will be recalled, a very important bill of his was defeated by the Senate although he had a majority there. To say that the House of Commons with respect to the appointment of auditors is in a better position to select them than another body which, under our constitution, unless we desire to amend it, has equal powers regarding matters of this kind, is, in my judgment, a wholly erroneous view. I find the argument advanced difficult to follow. I believe a firm of auditors selected by the Senate, if I might mention that body here, would be probably a better selection than could be made by the commons and one more apt to be free from any political consideration or control. There is no question of politics in this appointment for the simple reason that this firm has been employed for several years; but the point made by the hon. member for Muskoka (Mr. McGibbon) and referred to incidentally by the hon. member for Battle River (Mr. Spencer) is, in my judgment, well taken. It will be recalled that in the Bank Act provision is made that auditors are to' hold office for a limited time only and that other auditors have to be appointed as shareholders' auditors. The reason is obvious and I can only say that so far as the government is concerned, it will follow very closely what has been said by the hon. gentlemen, the only difficulty being this, that inasmuch as the auditors will be for the year 1934, continuity in audit might be lacking if the house did not meet until later than January by a whole month, because the appointment would have to be made at once byparliament for the year 1935. But as the matter stands, in order to remove any doubt such as that raised by the hon. member for West Lambton (Mr. Gray), I suggest that the minister add the words "for the year 1934," although this is not required, for the preamble is the power conferring provision and the section is the exercising of the power; as the power can be exercised only for an annual appointment, it follows that the appointment is for one year and one year only. But if the minister is satisfied that any of the members are in doubt about the matter, it can be removed by adding the words "for the year 1934."
But I think it is unfair that with respect to some matters there should be constant effort made to suggest that this house has a position superior to that of any other part of parliament. Parliament is a composite body, consisting of three elements, the crown, the senate and the commons. And as has been said so often, they must act in cooperation to effect

C.N.R.-Appointment of Auditors
the passing of a statute. A resolution of parliament means a statute, so far as the general legal provisions are concerned; and to provide that auditors shall be selected by a joint resolution of the House of Commons and the Senate in the form of a statute does, I think, remove it from at least some difficulties that might at some time occur; they are not present at the moment, but they might. The very fact that these words were left in after so many revisions indicates to my mind that it was intended always that the selection should be made by joint action of the Senate and the House of Commons acting in their legislative capacity for the purpose of effecting the provisions of the statute.


William Lyon Mackenzie King: Mr. Chairman, I cannot agree with the Prime Minister at all when he says it is unfair to assert a superior right on the part of the commons when it comes to dealing with money matters.


Richard Bedford Bennett: This is not a money matter.


William Lyon Mackenzie King: My right hon. friend's assertion was a broad one of the superior right of this House of Commons in certain matters or any matters. There is no doubt in the world that the right of the commons is superior to the right of any other branch of parliament with respect to the control of public moneys and public expenditure.


Richard Bedford Bennett: Hear, hear; we are agreed on that.


William Lyon Mackenzie King: I think it is part of the obligation of the commons to preserve that right as rigidly as is possible. As the Prime Minister says, the appointment of auditors is not on all fours with a financial measure, but the auditors are appointed to exercise supervision over the expenditures of the national railways, the largest expenditures that this country has to account for under any one particular service. And the analogy as a consequence is close enough to hold as to the special right of the commons in the matter.
Further I should like to draw attention to the fact that this House of Commons has already parted pretty well with its control over the railways. We are being told by no one oftener than the Prime Minister and the Minister of Railways that the financial difficulties in this country are accounted for more by the expenditure on the national railways than by anything else. In those circumstances
it seems to me that there is every reason why the commons should keep its control over the expenditure of public moneys by the railways and over those who are to audit the expenditure of these particular public moneys.
The Prime Minister speaks about political control, and says that the object was to do away with political control. That observation is to some extent a reflection upon the commons itself. I can speak the more freely in that this measure proposes to leave the matter entirely in the hands of the present government, moreover, there is no pressure from the opposition and no criticism of the government's likelihood to deal in a partisan manner with the appointments they are making. What we are striving for is the maintenance of the broad principle that the government that is in power is responsible to the people for the expenditure of public moneys, and should keep in its control appointments which will have an important bearing on the whole matter of expenditure and taxation. That is a far-reaching and fundamental principle, and I think it should not be departed from. Each time a surrender is made it becomes more difficult to maintain the position. Last session when the bill was before the house the right of any change in the person of the president of the railway was taken away from the government of the day, and by an act of parliament matters were so arranged that another house, not the one elected by the people, would have to sanction any change of the person who was to hold the chief administrative office of the railway. I think that is getting very far away from the control by the people over their public utilities and over the expenditure of public moneys incidental thereto and wherever a situation of that kind arises the commons ought to assert its position very strongly by opposing it. I still hope the minister will not press the matter. If he does, I feel we ought to register our vote against it. We may be voted down, but, nevertheless, the matter involves a fundamental principle which I think ought to be preserved. I have no desire to divide the house on a measure of this kind, but from the way the minister spoke in introducing it, I feel that he himself was not too sure of what the intention of the provision was; the bill is simply intended to amend an act, but is doing so in a roundabout way. I wish the minister would consent to leave the matter over until he has had opportunity for its further consideration.


Leslie Gordon Bell: The Prime Minister has made a suggestion that seems calculated to remove any difficulty. Would it
C.N.R.-Appointment of Auditors

not help us to get on with the consideration of this matter if the minister were asked what response he feels disposed to make to that?


Robert James Manion: Mr. Chairman, I am entirely agreeable to that, because as a matter of fact it leaves it exactly where it is, except that it makes it more definite. The Prime Minister is apparently anxious, as I am, that everyone should feel that the matter is being dealt with in a way that is absolutely above board, as is the case. I am quite agreeable to inserting after the word "auditors"-I presume that is where it would be-"for the year 1934," which would make it definitely and distinctly an appointment for this year, until we reappoint them or appoint someone else next year.
I could more easily understand the position taken by the right hon. leader of the opposition if we were changing the auditors, but as a matter of fact the auditors, for whom I have a great deal of respect, were there when we came into power and had been for some years previously; they have had very wide experience, I have personally discussed with them their experience and have come to the conclusion that they are a splendid group of auditors. For those reasons I think we are on such solid ground in reappointing them that I do not feel like withdrawing from the position except to add at the suggestion of the Prime Minister the words "for the year 1934" which definitely and distinctly makes the appointment for one year. The matter should probably have been discussed last year if there was any objection, because the words are distinct enough-I was merely speaking from my own memory when I spoke first-the words are so distinct that had we gone into it it would either have been decided to leave it as it is, which is exactly what we are doing, carrying out the act of last year, or if we had wanted to leave it entirely to the House of Commons we should have changed it. But I repeat, I am advised by the legal advisers of the crown that what it means is that we should pass a statute. I do not wish to prolong the discussion, but I do not see any reason for withdrawing it at the present time. I should like to have it carried. And I feel that my hon. friends should have no real objection, particularly in view of the fact that I think these are the auditors whom they themselves appointed.


Charles A. Stewart: Mr. Chairman, that is not the point that we are arguing. We are not objecting to the individuals who are being appointed, but we are pointing out again that this is a departure from an important principle. True it was done last year, done against our protest, interjecting the

Senate into the control of the expenditure of this money. That is the objection we take. We believe that inasmuch as the House of Commons has full and complete control over expenditure and over the revenues of the country without interference by the Senate, it was a mistake to interject the Senate into the matter of the administration of the railway at all. While this present item is perhaps not very important, yet we do desire to register our protest again against anything that in any way brings the Senate into even seeming control of the public expenditure.


Richard Bedford Bennett: I am sure the hon. gentleman has overlooked one fact. The reason this provision is here I take it is that the Auditor General of Canada cannot be removed except on the joint address of both houses of parliament. There is the analogy. My memory is not sufficiently good as to what the causes were that brought about the present legislation,, but it must be within the memory of every hon. member in this chamber that the Auditor General cannot be removed from office except on the joint address of both houses of parliament. These auditors are to be appointed by a resolution of parliament, which is the converse of the provision that the Auditor General can be removed only by a joint address of both houses of parliament. So now the auditors of this system are appointed by what amounts to a joint address of both houses of parliament, though a joint address would be an improper method of procedure; it is the resolution of parliament mentioned in the act, which of course means a statute.
It would serve no useful purpose to enter into a discussion as to why joint addresses of both houses of parliament are necessary to bring about certain results, but the question of expenditure as distinguished from the auditing of expenditure is so well known as to not require very much discussion. This is the house in which money bills originate, yet every day the Senate deals with legislation touching on public expenditures, and I suppose it will continue to do so as long as it exists. There is no bill which leaves this chamber which is not passed upon by the Senate. It has been said that it is not competent for the Senate to amend a supply bill. There was a difference of opinion as to that; one eminent authority said the Senate had that power. I have always accepted the view that there was no power in the Senate to amend a supply bill or any bill of that character.
It will be recalled that it was in connection with a subsidy bill that the Senate asserted

C.N.R.-Appointment of Auditors
its authority and destroyed the bill after it had passed the commons, in the days of the late Sir John A. Macdonald. It will be recalled also that after a subsidy bill had passed this commons handing over the Yukon to a well known firm for exploitation the Senate destroyed that legislation. The Senate has exercised this power and in many cases-in fact in most cases, I think-its position has been vindicated. For instance, it was an investigation carried on by the Senate in connection with the expenditures under subsidies granted to a railway that brought about the downfall of the Mercier administration in Quebec, and the Senate has always passed upon legislation enacted by this chamber, though it must take the risk of its own life if it destroys a supply bill, for example. I have given two instances of money bills being destroyed by the Senate, and the third case to which I have referred had to do with the expenditure of public money under a subsidy bill.
I do not think any good purpose would be served by going into the countless examples that might be referred to. To-night we are following the provisions of a statute passed last year, which necessitates the passing of a statute now to appoint for one year a firm of auditors, which firm held office when we came into power. Whether or not they should be appointed for longer than a year or whether or not there should be a change are matters which I am not going to prejudge, but I will say that in large public institutions such as our banks, parliament has accepted the principle that there should be a change of auditors from time to time.


William Lyon Mackenzie King: With regard
to the parallel drawn between the appointment of the Auditor General and the appointment of these auditors, I do not think it can be said that the cases are on all fours. The position of the Auditor General is made what it is with the view of preventing pressure by the administration of the day upon a public servant. The auditors appointed for this purpose would not be subject to the immediate control of the government to at all the same extent that an Auditor General, auditing the general accounts of the government, would be.
The point to be kept clearly to the fore is the right of control by the commons in all money matters. The Prime Minister says that we are not to have any political control. If he uses that word in any other than a very narrow sense, meaning partisan political control he is wholly misrepresenting the position 74726-54
of the commons. The members of the House of Commons are sent here for the purpose of exercising control in money matters and of exercising political control, using the word " political " in the sense of the control which, as members of parliament, they are sent here to exercise. I can see where, arising out of the difficulties of administration, there may be reason for doing away altogether with government owned or government controlled institutions, but so long as you have either -or if you have neither-you have still to preserve the right of the commons to control everything in relation to money matters where public expenditures are involved, if the commons is to perform its functions at all.
I do not wish to make a mountain out of a mole hill in a small measure of this kind. As to the bill itself, we have made it perfectly clear that we have no objection to the auditors that are being named, nor have we any objection to their being appointed for a year. We are seeking simply to preserve the principle of the right of the commons to exercise its control in money matters. And may I point out this further reason. It may become necessary to make a change in the auditors even while parliament is in session, and a resolution of the House of Commons can be much more speedily passed than an act of parliament. If, after all that has been said, the government wish to persist and are determined to put through the measure we will simply register our opposition to it. Beyond that I do not wish to press the matter.


Robert James Manion: I should like to say just
one word to emphasize the position taken last year. The recommendation really was the recommendation of the Duff commission, whose recommendations we were carrying out. Section 208 of their report states:
A continuous audit of the accounts of the system should be made by independent auditors appointed by parliament from a list or panel drawn up by the trustees-
You will perhaps remember, Mr. Chairman, that when we were discussing that point I took the attitude on behalf of the government, which was supported by the house, that it was not wise to have the trustees themselves suggest any auditors, because really the auditors would be checking the work of the trustees. So we left that out, but the suggestion that auditors should be appointed by parliament was made originally in the report of the Duff commission.
My right hon. friend will remember also that this bill was introduced not in this chamber but in the Senate, and was carried



C.N.R.-Appointment oj Auditors
through there. I happened to have a copy of Hansard on my desk, and while the discussion was going on I looked through the debate that took place last year. Though the discussion covered a couple of pages of Hansard the only objection made to the appointment by parliament came from the hon. member for West Edmonton, who took the attitude that this should be done by the governor in council. He did not object to the parliament end of it at all, but he thought we were taking out of the hands of the governor in council the right to appoint these auditors, and I presume that my right hon. friend would be better satisfied to have the auditors appointed in this present way. We are merely carrying out the suggestion of the Duff commission in this measure.


Mr. HANSON (Skeena):: Who pays these auditors?


Robert James Manion: The railway.


Olof Hanson: How much are they paid a year?


Robert James Manion: I cannot answer that question, but I can give it when we are discussing other railway matters. I did not know this bill was coming up to-night, and there are some facts I have not at hand. The auditors are paid according to the amount of work they do. This is a huge job, and this firm have men scattered east and west from Montreal. I presume they are paid a pretty good sum, but it is in proportion to the work done.


Mr. DUPUIS:: I should like to know from the Minister of Railways how he is going to amend section 1 in accordance with the suggestion of the Prime Minister.


Robert James Manion: I accepted the suggestion of the Prime Minister and put in the name of George A. Touche and Company, of Toronto and Montreal. They have offices in both cities, and I think that would be the proper way to describe them. Then the words "for the year 1934," are to be inserted after the word "auditor."


Robert James Manion: I move:
That the words "for the year 1934" be inserted after the word' "auditors."
as well as putting in the name of George A. Touche and Company of Toronto and Montreal.


Vincent Dupuis: A continuous audit means that they work yearly?


Robert James Manion: Yes.


Vincent Dupuis: On every occasion they are called?


Robert James Manion: Yes, that is right.


The CHAIRMAN (Mr. Gobeil):: Shall the amendment carry?


Some hon. MEMBERS:: On division.
Amendment agreed -to on division.
Section agreed to on division.
Bill reported.



DEPARTMENT OF PUBLIC WORKS

[Stage Direction]
The house in committee of supply, Mr. Hanson (York-Sunbury) in the chair.
Hugh Alexander Stewart: Mr. Chairman, we will continue with item 113:
British Columbia-Essential undertakings-
Esquimalt-repairs and improvements to R.C.N. barracks and H.M.C. dockyard, $15,000.
Fraser, Skeena and Naas rivers-operation and maintenance of snagboats, $35,000.
Oona river-float, $3,700.
Harbours and rivers generally-for maintenance of services, no new works to be undertaken, $75,000.


Olof Hanson: Shall the item carry?


Mr. NEILL:: No.


Hugh Alexander Stewart: Mr. Chairman, the hon. member for Gloucester (Mr. Yeniot) was not in the house when an item respecting public works in New Brunswick in which he was interested was passed. I promised him that the first item brought up in the estimates would, so far as I was concerned, give him an opportunity to discuss the New Brunswick item. I suggest that we do that at this time.


Peter John Veniot: Sup-ply-Harbours and Rivers


Hugh Alexander Stewart: I think my hon. friend must admit that the government has been impressed by the importance of having something done at Shippigan, from the very fact that an item has appeared in the estimates and that tenders have been invited for the work. He will also recall that after the estimates were brought down, and after the Minister of Finance had introduced his budget, an undertaking was given that the expense covered by the estimates would be reduced by approximately $14,000,000, and that undertaking has been carried out. Each department was asked to review carefully the program of contemplated works and as far as possible to meet the requirements of the situation. That is the reason why, although tenders were invited for this work, it was not undertaken. It is true that the importance of the work has been emphasized by the getting-out of pulpwood recently in that section. There is no doubt that the work is an important one, and if the revenues permitted, it would be undertaken. I shall consider whether it is possible even now to award a contract on the vote that has been passed this year, although the department had undertaken to forego any expenditure in respect of that item.


Peter John Veniot: I would point out to the minister that the share which the dominion government alone has to pay towards the dole in Tracadie, in Shippigan and in Inkerman, will amount to almost one-quarter if not one-half of the cost of constructing the wharf.


Hugh Alexander Stewart: There is no guarantee that if we did this work we should be relieved of this liability in respect of the dole, because we have not found it to work out that way.


Peter John Veniot: There is a guarantee; the people selling pulpwood will not get the dole.
Mr. STEWAiRT (Leeds): It would undoubtedly provide some employment, but I am afraid there would still be some contribution in respect of what the hon. gentleman calls the dole.
Mr. VEiNIOT: What about dredging?


Hugh Alexander Stewart: Now I will take up the second item, dredging at Bathurst. Representations similar to those made by the
hon. gentleman to-night have been made in connection with the situation at Bathurst. That also will be considered and it may be provided for out of the general vote or possibly in some supplementary estimate. If it is as urgent as my hon. friend says we will see if something can be done. In regard to Tracadie, considerable expenditure was made under the appropriation made by the former government, but owing to the curtailment of the vote available for government dredges in the maritimes we were unable to continue in operation all the dredges and had to lay up such ones as we thought could with advantage be dispensed with, continuing in operation only the one most useful. I am not sure that we shall be able to do much more at Tracadie this year. However, we will see what can be done.


Peter John Veniot: Because the new gulley is
not opened through to the beach, the work that cost $170,000 odd is being destroyed by the force of the seas, which otherwise would have a vent through the new channel and would not cause as much pressure on the outside work. If that work is left in the condition in which it is now and that channel is not opened, the pressure from the sea will be so great that you will not have any work there inside of two years; it will be all destroyed.


Leslie Gordon Bell: Will the hon.
member for Gloucester assist us by telling the committee these two things, if he has them within his knowledge: First, as to when the dredge he speaks of ceased operations, and secondly as to when the trade in pulpwood to which he refers became active.


Peter John Veniot: Dredging operations ceased
in October, 1930, notwithstanding that the money had been voted for that purpose in the session of 1930. Dredging in Shippigan ceased, inside and outside the gulley, and operations provided for by a vote of $10,000 passed in this house in 1930 for dredging at Lameque, were also discontinued. Dredging at Lower Caraquet wharf, which was to be carried on under an appropriation of that year, was discontinued, as was also dredging at St. Simon, another fishing centre. So far as pulpwood is concerned, operations started in 1931, some time in the fall, and reached their highest figure in 1933, last summer, when there were shipped out 20,000 cords of pulpwood from that section of Gloucester. Of course, more wood is shipped from Gloucester off private lands, but the rest was in the upper section of the county where it had to go by rail and could not go by water.

Supply-Harbours and Rivers


Olof Hanson: Can the minister tell us where the money was spent last year in connection with dredging in British Columbia?


Hugh Alexander Stewart: I have not that information but I will undertake to get it for the lhon. gentleman.


Olof Hanson: I understand that very little if any of the money was spent in the northern part of British Columbia, there are three different places where, as I have been informed on reliable authority, the floats are in such poor shape that neither the fishermen nor anyone else will dare to land boats. Nothing is mentioned here about the floats, and I know that recommendations were made to the department, and to the district engineer, who is familiar with the conditions. There is one at Silver City on the mainland and there are two on Queen Charlotte Islands. A very small amount of money would put these floats into proper shape. These recommendations have been forwarded to the department and I should like to know whether, under the vote for harbours and rivers generally, something will be spent to put these floats into shape.


Hugh Alexander Stewart: The dredging to which the hon. gentleman refers would come under item 116.


Olof Hanson: I think it is 113.


Hugh Alexander Stewart: Item 116 would
be for dredging, British Columbia, $140,000.


Olof Hanson: But the item 113, harbours and rivers.


Hugh Alexander Stewart: That is for existing services.


Thomas Reid: Regarding item 113, I notice that under the item of harbours and rivers generally there is a reduction this year of some $25,000. I know the minister will tell me that there is a reduction all round in the estimates. Of course I do not know what there might be in the supplementaries, but taking the estimates now before us I protest against this reduction this year. In this regard may I point out that last year New Westminster was the only port in the whole of Canada that showed an increase and it is now the third largest port. In spite of the depression through which we are passing, the number of ships entering that port increased during 1933 to the extent of 469 large vessels of from 8,000 to 10,000 tons. I draw the minister's attention to that considerable increase in business and appeal to him now for greater consideration for that port. On occasions there are as many as six deep sea vessels

in the port at one time and they are finding it difficult at times to turn around in going out. They have, I might say, to turn around so as to head downstream in going out down river. Owing to lack of depth of water in various spots ships become stranded, and last year I believe one or two became stuck for the lack of room while endeavouring to turn around and go out. I need hardly draw attention to the seriousness of a ship of 9,000 or 10,000 tons being stuck in the sand because, if it touches bottom, especially if it has a cargo, the consequences may be serious.
I do not believe the government has been entirely seized of the trade outlook from the west. Since confederation the whole development of Canadian ports has been on the Atlantic seaboard and in looking over the estimates I notice that the amount available for Atlantic ports is just ten times as much as that for those on the Pacific. Far be it from me to raise the issue of the east against the west, but I think the time has now come when Canada should look more to her western ports especially as her trade with the orient and other countries is growing and will grow as the years pass by. When, on looking at the estimates, I find a total of $1,131,400 available for Atlantic ports and the total estimate for the western ports of British Columbia is $128,700, it is no wonder that I rise and protest.
To come to the item under discussion, especially with regard to the Fraser river, I should like to point out that 60 per cent of the lumber that left British Columbia, last year went out from that river. Well over 218,000,000 feet of lumber left that river for export in addition to many tons of fish and 431 cases of apples, but all told 2,384,000 gross tons went through the port of New Westminster last year. As I say, it is the third largest port in Canada and yet we find for the whole of British Columbia an estimate of only $128,700. The matter of ships not having room to turn due to lack of depth of water should be attended to because, in spite of the difficulties which have beset us in the development of the port due to the irregularity of the Fraser river, New Westminster has shown wonderful growth. I believe I am safe in saying however that the channel there in some parts at least is not any better after twenty-five years of operation. It is true that it has been developed and improved in parts, but there are other parts that I believe should be further considerably improved. While I do not object to what is being spent in the east, I am appealing to the minister in all seriousness that more attention should be paid to ports on the Pacific especially the port of New Westminster.

Supply-Harbours and Rivers


Hugh Alexander Stewart: I think my hon. friend will agree with me when I say that you cannot roughly determine by geography the expenditures which should be made; the matter depends upon existing conditions.


Cameron Ross McIntosh: Geography would be a factor, would it not?


Hugh Alexander Stewart: It might have
something to do with the matter. I think the hon. member should also agree with me that special consideration has been given to the requirements of New Westminster and a very large proportion of the money available for expenditure in British Columbia has been expended on the Fraser river. We have done our best to meet conditions as they arise there from time to time and every representation that my hon. friend has made -and he has made many of them, as he has a right to do-have, as conditions warrant, been given prompt attention; just so far as our equipment has permitted and funds are available, the requirements have been met. I think he will agree with that, and that we have made a sincere and honest endeavour to meet the difficult conditions that arise from time to time in the Fraser river. The engineers are in touch with the situation; they are following it from day to day and doing their best to meet the emergencies as they arise.


Wilfred Hanbury: I would just like to associate myself with the remarks made by the hon. member for New Westminster. While it is true that much money has been spent on that harbour, I would point out to the minister that large expenditures will probably be necessary there for some time to come. Canada has already a large investment in the Fraser river up to the harbour of New Westminster and with the silting and the shifting of sands in the river it probably will be necessary for some time to come, if we are going to have an efficient port, to make heavy expenditures there.


Hugh Alexander Stewart: There is no
doubt about that.


Wilfred Hanbury: As the hon. member for New Westminster has pointed out, a very large percentage of the total exports of British Columbia go out through New Westminster harbour. It is therefore of vital interest to industry in Canada and particularly to lumbering that that harbour should be maintained in a condition that will enable the export of lumber to be put on a proper basis. I cannot believe the amount that has been provided in the estimates for the general maintenance of services is sufficient for the
requirements of New Westminster harbour and I support the recommendation of the hon. member for that constituency, that the minister should investigate the matter carefully to see that we do not economize to such an extent as to lose a large portion of the investment we have already made there. As I pointed out before, our investment is now large and unless we maintain it on an efficient basis, the time will come probably shortly when it will be necessary to spend an exceptionally large amount to put that harbour into the condition in which it should be maintained. I would inquire of the minister whether the sea wall and other works that have been carried on for many years in the harbour of Vancouver along Stanley park would come under this item. For many years work has been carried on at Stanley park in Vancouver in connection with the sea wall and other projects. I am not sure whether that work would come under this item or some other item.


Hugh Alexander Stewart: A special appropriation would be required, I would say. I would like to ask the hon. member if the work is carried on by the harbour commission?


Wilfred Hanbury: No, by the Public Works department. And if there is no other item I would like to mention to the minister that at this time when every effort is being made to create employment for manual labour, possibly the construction of the sea wall in Stanley park, Vancouver, is a work that is nearer to being all manual labour than anything that might be done. This work has been going on, the expenditure running, I think, from $9,000 or $10,000 to $12,000 a year. I think there is considerable work still to be done, and I would suggest to the minister that he investigate it, particularly in relation to the program of works which the government propose to put into force to meet the unemployment situation. I would ask him to investigate that and other work at Stanley park, Vancouver, which would consist very largely of manual labour, to see whether funds could be provided to carry them on now when employment is so vitally needed.


Thomas Reid: I would like to ask the minister if he contemplates making any provision in the supplementary estimates for the improvement of some of the jetties, or doing any further work on the jetties?


Hugh Alexander Stewart: I can scarcely tell my hon. friend yet what will be in the supplementary estimates, but if he has any suggestions along that line we will give them consideration if he will send them in.
Supply-Harbours and Rivers


Olof Hanson: I nearly always agree with my hon. friends from Vancouver-Burrard (Mr. Hanbury) and New Westminster (Mr. Reid) but in this case I do not. They talk about the government spending money in dredging to develop harbour facilities on the Pacific coast. I wish to remind the government and the members of this house that at Prince Rupert in British Columbia we have a harbour that is second to none on the Pacific coast and needs no dredging. The government railway runs to it, it is 500 miles nearer to the orient than any other Pacific port. So I take exception to the proposal that money should be spent to try to make artificial harbours on that coast when we have natural harbours which are more suitable.
I also wish to ask the minister whether when the supplementary estimates come up he would consider those -two places I mentioned in British Columbia. There is one on -the mainland, Silver City, and two on Queen Charlotte island, which require a little repair or improvement to enable the fishing fleet and the coastwise shipping to land at the docks; also one in the interior which has not had any assistance in the last four years. Before that they used to have a few dollars each year, and it requires $200 more to complete the work on the White Sail and Ootsa rivers. It used to come within the Nelson district but now it is included in the coast district. I would like the minister to give me an assurance that he will look into that matter. Representations have been made to him by myself and some others.


Hugh Alexander Stewart: I will ask the
district engineer to make a -report on the suggestions of my hon. friend.


Alan Webster Neill: I would like to take a minute or two to put on the record a matter that I have taken up with the minister privately, the extension of the lumber assembly wharf at Port Alberni. That wharf is rather a unique undertaking; it was built at a cost of $135,000 some six or seven years ago, and u-nlike any other work of the character in Canada, I think, it paid from the grass roots, if you can apply that expression to a wharf. We have no harbour commission there, no suggestion of graft, no expensive machinery, no costly overhead officials. It is -run by the government itself, run well and economically, and it has paid as I say right from the beginning. Of course there are wharves elsewhere under the auspices of commissions and harbour boards, but this one is run by the government. There is no doubt that it has been the salvation of that thriving little town during the

depression, the whole community would have been on relief had it not been for the seaborne trade that was carried on through the instrumentality of that wharf. My hon. friend from New Westminster talks about his port being the third biggest in Canada. Port Albemi is the third biggest lumber shipping port in British Columbia, its export of lumber runs very close to that from New Westminster. Last year 104,000,000 feet of lumber were shipped from there, and this is only one small place on the west coast. I happened to notice in the press that the total shipments of lumber from New Brunswick were only 135,000,000 feet. The lumber business there was very closely run, there is little money in it, it was being run more to keep the men in employment than -anything, and that condition still obtains to some extent. To help the industry out the government reduced the wharfage dues by one half, and even -at that i-t is bringing the government in something like $1,000 a -month, a condition that I do not think obtains in the case of those ports for which my hon. friends from Vancouver-Burrard and New Westminster speak. Port Albemi, I think, is one of the finest harbours on the Pacific coast. We do not need dredging to make a harbour, all we want is a wharf. We could put the whole British fleet in the Albemi canal and still have room for more. The other day I saw an item in the newspaper stating that a boat had just come in for lumber, I think it said it is the second biggest ship afloat in freight business, but she had no trouble getting in or out, went in under her own steam, did not -require to be hauled in. But the wharf is dangerously overcrowded. I was there before I left and every available foot was occupied almost to the extent of being dangerous. Indeed I noticed that there was a little Y-shaped place between the approach and the wharf, never intended to be a part of the wharf, but it was planked over to prevent people walking into it in the dark, and because the place was so over-crowded they had some 1,700 ties piled there, and they went diown into the water. An extension of 200 feet was recently asked. That certainly would relieve the congestion to some extent, provide space for lumber and so would help a little; but what is being asked now-the minister has had telegrams and letters recently-is that with the increased business, growing every day, there should be an addition of 400 feet, which would provide a berth for another ship. At the present time only one ship at a time can lie at the wharf, and others, sometimes four or five at once, have to lie out in the stream.

Supply-Public Works-Dredging
That is expensive, and there is danger of us losing our trade, so painfully and laboriously worked up, on account of the boats not being able to get quick service. Demurrage on an ordinary steamer will run from 8200 to $700 or $800 a day, and if any lumber merchant has to pay that you will understand it ia going to make him very unwilling to come back to that port.
I would like to say further that the government as we know has in contemplation a large program of public works this coming summer. I am certain, as I think many of us must be, that some of that money will be spent for purposes that will not only be unproductive but will be a source of expense for maintenance in the future. This is an outstanding case of a work that will not only provide employment while the work is being done but it will pay, in the wharfage, interest on the expenditure and will provide work for the men, the stevedores and those employed in the lumber business. So the government will not be involved in the expense of maintenance, and it will be substantially helping to relieve the unemployment situation, not only for to-day or for this year but for years to come. I know the engineer, who is a very capable man of wide experience, is in sympathy with this suggestion. He made a personal investigation of the situation; even in the short period since I left home trade has gone ahead, and it is increasing almost day by day. It is proposed to construct another large sawmill at that point;
I understand they are to break the ground next month, and certainly this would encourage them to go on with that work. Adjoining the Alberni canal in that neighbourhood is the last large stand of the big Douglas fir on the Pacific coast; I think there is a larger stand there than anywhere else. We have three large sawmills at that point in addition to the new, modern mill which is contemplated, and no doubt that is where the great development is going to take place in the next few years.
I only wish to put these facts on record. I know the minister will do what is right and that he will have the matter investigated. The extension of this wharf would be thoroughly justified from every point of view.


Hugh Alexander Stewart: In reply to my
hon. friend I can only say that these estimates were prepared before any representations such as he mentions were made in connection with the extension of the wharf at Alberni. It is true, as he stated, that I have received many telegrams and representations such as he has
described, and I may tell him that I have had representations with regard to the extension of a wharf in at least one other locality. All these matters are being studied in connection with any program we may develop, and in connection with our supplementary estimates. The recent development of the lumber business in British Columbia seems to have been very rapid, and in some respects it appears to have outgrown the facilities that were considered ample under the conditions that existed two or three years ago.


[Stage Direction]
Item agreed to.
Dredging-
Maritime provinces, $161,200.
Ontario and Quebec, $215,500.
Manitoba. Saskatchewan and Alberta, $50,000. British Columbia, $140,000.
Alfred Edgar MacLean: Would the minister give
us a little information with regard to the dredging done in Prince Edward Island last year, and what is contemplated this year?


Hugh Alexander Stewart: I cannot give
my hon. friend particulars of the expenditures made in the past year. This is a general item which will enable us to allocate the amount for such works as appear to be most necessary. The plant that we have in the maritimes will be operated as far as the appropriation will permit, and the work will be done where it is most urgently needed.
I am afraid that is all I can say on a vote like this.


Thomas Reid: I wonder if the minister has
any information as to how much was spent for dredging in British Columbia last year, and where it was spent.


Hugh Alexander Stewart: I have not that information, though I can get it.


Thomas Reid: I notice a small increase in the dredging vote this year, for which I am very glad, but I would direct the minister's attention to the fact that dredging is needed on the Fraser river in order to provide adequate facilities. A great deal of dredging is required in front of the elevator, which is being operated by a reliable grain firm. Dredging is also required in front of the wharfage facilities of the Pacific cold storage, so that at least two vessels can lie there and be loaded or unloaded at the same time. In addition there is the new cut, which may give a good deal of trouble. I wonder if the minister has any information with regard to the new cut, whether it has been completed and whether or not it is a success.

Supply-Public Works-Dredging


Hugh Alexander Stewart: The last time I discussed the matter with the chief engineer he reported that the results were very satisfactory.


Thomas Reid: I speak of the amount to be spent for dredging because I know the requirements that should be met, and I know that once an appropriation passes that is the end of it. In other years when we have come asking for more dredging to be done we have been met with the answer that the appropriation has been exhausted, so this year I am suggesting to the minister that more dredging is required in order to maintain the facilities which are in operation on the Pacific. I would ask the minister seriously to consider this matter when the supplementary estimates are being made up.


Hugh Alexander Stewart: Very well.


Mr. RYERSON:: I should like to ask the minister if anything is included in this vote for the dredging of Port Dover harbour?


Hugh Alexander Stewart: All I can say to my hon. friend is that the amount has not been allotted as yet. It will be distributed in the way we think most desirable having regard to the most urgent needs.


Robert Edwy Ryerson: I might say to the minister that this work is very important, and is so considered by the fishermen and business men of Port Dover. I have received representations from the Grand Valley Board of Trade calling my attention to the difficulties that are being experienced at Port Dover at present, and I would ask the minister to take this matter into consideration.


Hugh Alexander Stewart: I will have it investigated.


Mr. SANDERSON:: I should like to ask the minister what proportion of the amount of $215,500 devoted to Ontario and Quebec is to be spent in Ontario, and where the work is contemplated.


Hugh Alexander Stewart: I can only give my hon. friend the same answer, that the allocation has not been made as yet. Last year we had many demands for dredging that could not be met, and we just did the work we thought was most urgent as far as the funds would permit. That is why the vote is made up in this way.


Frederick George Sanderson: Then I would like to ask the minister if the total amount is apportioned in any way as between Ontario and Quebec.


Hugh Alexander Stewart: No, that is the form in which the vote has been made up for a great many years.


Mr. CASGRAIN:: Could the minister tell us how much was spent in Quebec last year under that item, and where the work was done?


Hugh Alexander Stewart: I am afraid I cannot give my hon. friend that information.


Joseph Philippe Baby Casgrain: Has the minister any report from his officers as to the work that will be done this summer, and where it will be done?


Hugh Alexander Stewart: No.


Joseph Philippe Baby Casgrain: Is that work done by government dredges or under contract?


Hugh Alexander Stewart: Some of it may be done under contract but most of it will be done by our own dredges.


Frederick George Sanderson: Could the minister say what amount was spent in Ontario for dredging last year?


Hugh Alexander Stewart: As I say, I have not the information here as to the expenditures last year.


Thomas Reid: Has the minister any information with regard to the dredging contract that was let for the north arm of the Fraser river last year, and how much was spent?


Hugh Alexander Stewart: I have not that information.


Thomas Reid: Some time will you get it.?


Hugh Alexander Stewart: I shall send that to my hon. friend, if he would like to have it.
I will see it is sent to him.


Sir EUGENE FISET:: I suppose the minister will tell me that the same applies to the dredging work done last year at Rimouski.


Hugh Alexander Stewart: Yes.
M,r. McINTOSH: There are items here for [DOT] Manitoba, Saskatchewan and Alberta. This year the amount is $50,000 for dredging, last year it was $53,000. The amounts are fairly equal, one year with another. May I ask the minister where that amount of $50,000 for dredging will be spent?


Hugh Alexander Stewart: Again the same answer will apply. On the reports of our engineers, as they come in, the money will be allocated.

Supply-Public Works-Dredging


Cameron Ross McIntosh: Has not the minister a rough approximation in mind as to how much will be spent in Saskatchewan?


Hugh Alexander Stewart: No.


Joseph Philippe Baby Casgrain: This may not be a
serious matter, but it is not fair to the members that the minister should come to this chamber and ask for votes, when he is not able to tell us how much is going to be spent in the province of Quebec, how much in the province of Ontario, or the provinces of Manitoba, Saskatchewan or Alberta. Upon what information does the minister base his estimate when he puts certain amounts in the estimates? If he has no program or no definite information to go by for each province, how does he fix a figure?


Hugh Alexander Stewart: The amounts that were required in previous years to keep our dredges operating-that is the basis of our estimate.


Joseph Philippe Baby Casgrain: But I understand that the estimates are made on reports of various district engineers. They send reports to the officials at Ottawa in which they state, "We have a request to do dredging at such a place, such a port or the entrance of such river." Surely the minister must have before him the report of those officials, and he must be in a position to tell us where these moneys will be spent. He should be able to tell what is going to be spent in the constituency of the hon. member for Rimouski, or what is to be spent in other counties of the province of Quebec. The same would apply to the other provinces. I do not think it is fair to vote these large amounts of money without knowing where they will be spent, and at whose request and for what purpose the expenditures are being made.


Cameron Ross McIntosh: Mr. Chairman, I notice in item 116 there is a vote of 8161,200 for the maritime provinces, a vote of $215,500 for Ontario and Quebec and one for $140,000 for the province of British Columbia. Far be it from me to say that these amounts are too large. I notice however the minister cannot give any particulars with regard to any one of these amounts. Then when it comes to that stretch of the dominion which lies between Winnipeg and the mountains we have the paltry sum of $50,000. Although the House of Commons has power over revenue and control over expenditures yet the minister cannot explain where this $50,000, this paltry sum, this bit of money as I might say, is to be spent during the coming year.


Hugh Alexander Stewart: Mr. Chairman,
I think my hon. friend will agree that there are not many harbours in Saskatchewan.


Mr. VALLANCE:: How about Churchill?


Cameron Ross McIntosh: I thought the minister would come back with that statement, and I shall refute it inside of the next few minutes.


Hugh Alexander Stewart: I was going to
state that for the operation of the departmental plant in 1934 and 1935 one dredge is required at an expense of $46,300, and some day labour amounting to $1,500.


Cameron Ross McIntosh: In what province is
that?


Hugh Alexander Stewart: The amount of
$46,300 covers the operation of more than one dredge.


Joseph Philippe Baby Casgrain: What province is that?


Hugh Alexander Stewart: The provinces of Saskatchewan, Alberta and Manitoba.


The CHAIRMAN (Mr. Lawson):: Shall
the item carry?


Some hon. MEMBERS:: No.


John Vallance: I should like to ask a
question. Has it always been customary to vote these sums without any detailed statements from the minister? When we ask him what was done with the vote given last year he does not seem to know. We are asking what he is going to do with this year's vote, and he tells us he does not know. When do we reach the stage at which the minister^ will know, and will be able to tell the house either what he contemplates doing or what he has done?


Hugh Alexander Stewart: We prepare a
tentative program as soon as we know what money is available.


John Vallance: What did you do with
it last year?


Hugh Alexander Stewart: It is used to the best possible advantage where work is most needed.


John Vallance: Surely the minister can tell us where the money was used before, if he cannot tell us where he is going to use it this year. Where did you use the money last year? Where were the dredges operated?


Hugh Alexander Stewart: I find I have
expenditures for Manitoba, Saskatchewan and Alberta: for dredge No. 202, at Lockport S96; Lake Bar, $650.


John Vallance: Is that a dredge with
a shovel?

Supply-Public Works-Dredging


Hugh Alexander Stewart: It goes from
place to place and does the little work that is needed. Then, in Winnipeg, Manitoba, there was work at a second wharf costing $320, at Ramsay's Rapid, Springfield, $2,621; Goldeye lake, Manitoba, $4,860; Olafson's bay, Manitoba, $1,040; Selkirk slough, $2,234; marine railway at Selkirk, $500; making a total of $12,375 with some other small items I have omitted?


Joseph Philippe Baby Casgrain: Well, if t'he minister can give us the figures for last year in regard to the provinces of Manitoba, Saskatchewan and Alberta, it would be only fair for him to give those of the province of Quebec. Probably he would give the figures in the province of Ontario too. Where was the work done, what money was spent and for what purpose?


Leslie Gordon Bell: We willl look
after Ontario; stick to Quebec.


Hugh Alexander Stewart: These are some figures for Ontario and Quebec: Rimouski, $26,000; Matane, $26,000. Then we come to dedge No. 117: Port Burwell, Ontario, $15,148; Rondeau, $354; Kingsville, S3,703; Leamington, $17,186; Port Stanley, $1,736, making a total of about $38,000.
Then, for dredge No. 127, there is an expenditure in Bonaventure county of SI,500. On dredge No. 2 at Amos there is an expenditure of $351; lake De Montigny, $4,881; Heva river, $4,215; and lake Blouin," $5,851.


Cameron Ross McIntosh: What river is that?


Hugh Alexander Stewart: Blouin.


Joseph Philippe Baby Casgrain: Where is that situated?


Hugh Alexander Stewart: In Pontiac county I believe.


Frederick George Sanderson: I should like the minister to give the total amounts spent last year in the province of Ontario for dredging?


Hugh Alexander Stewart: I am told that
the returns showing total expenditures are not yet compiled. Repairs to dredges, and that sort of thing, have not been allotted; they are still under contract.


Frederick George Sanderson: How long will it take the minister to get that information; when does he expect it?


Hugh Alexander Stewart: When the repairs to the dredges which are laid up are completed, and the accounts rendered.


Frederick George Sanderson: When will that be?


Hugh Alexander Stewart: We do not know that until the end of the fiscal year.
[Mr. Vallance.l


Frederick George Sanderson: I am not asking for
the exact expenditure to a dollar, but could he not give us some information which would be fairly close to the amount spent?


Hugh Alexander Stewart: I thought I was giving my hon. friend that when I gave him the expenditure in these different places.


Frederick George Sanderson: The minister gave the figures for Ontario and Quebec bunched together. I want the figures for Ontario separate.


Hugh Alexander Stewart: The figures are not separated by provinces. The appropriation for Ontario and Quebec was $215,000, and the authorizations that have been given in respect of it are $157,162.25. The items are Baie des Sables, $538.71; Barachods de Malbaie, $100; Bell River, $050; Desjardins, removal of logs at wharf, $63.05; and a long list of small items of work done by day labour in different harbours.


Joseph Philippe Baby Casgrain: Was any dredging done in the riding of C'harlevoix-iSaguenay?


Hugh Alexander Stewart: I do not notice any.


Joseph Philippe Baby Casgrain: Would the minister be able to find out by referring to his books? Several requests were made in previous years when I was on the other side of the house and since I have been on this side by myself for dredging in 1930, 1931, 1932 and 1933. No doubt if all the requests that have been made have not been granted, at least some of them that were supported by hon. gentlemen opposite may have been granted and work done. If any work has been done I would like to know if it was done by dredges under the control of the department of the minister or by private companies, and where such work was carried on.


Hugh Alexander Stewart: There does not appear to have been any dredging done in Oharlevoix-Saguenay.


Joseph Philippe Baby Casgrain: Nothing?


Hugh Alexander Stewart: That is what I am told.


Joseph Philippe Baby Casgrain: Did not the minister receive requests last year for certain dredging to be done at the entrance to certain rivers?


Hugh Alexander Stewart: All I can say is that we have had many requests that we have not been able to comply with.


Joseph Philippe Baby Casgrain: Does the minister anticipate that out of this vote of $215,000 there is any possibility of some of the works that were asked for last year being proceeded with this year?

Supply-Public Works-Bridges


Hugh Alexander Stewart: The more urgent ones will certainly have to be considered.


Joseph Philippe Baby Casgrain: Does not the minister consider that these works in Charlevoix-Sa-guenay are just as urgent as works in other counties?


Hugh Alexander Stewart: No discrimination is made on county or provincial lines. We are simply doing our best with the limited appropriation to meet the most urgent of the many demands that are made upon this vote.


Frederick George Sanderson: A moment ago I asked the minister what to my mind at least was a very simple question-the total amount of dredging that had been done in the province of Ontario last year. I want the total amount.


Hugh Alexander Stewart: If my hon. friend insists on getting that information, as he is entitled to, I shall have it added up by the officials of the department and checked, and give him the information.


Frederick George Sanderson: Might I ask the minister how long it will take to do that?


Hugh Alexander Stewart: I do not know;
it should not take very long.


Frederick George Sanderson: I would suggest to
the minister in all kindness that he had better let this item stand until he gets the information.


Hugh Alexander Stewart: I am just told
that all the reports are not in yet. Repairs to the dredging plant are not in, and the figures have to be apportioned.


John Vallance: Better hold the election ofi for another year then.


Leslie Gordon Bell: We must find out
about the dredging in Perth.


Wilfred Hanbury: Does the dredging at
Churchill come under this vote for Manitoba, Saskatchewan and Alberta?


Hugh Alexander Stewart: No, that is in
the Department of Railways and Canals.


Frederick George Sanderson: The information I
desire is rather important and I cannot for the life of me see why the minister cannot or will not give it to me.


Hugh Alexander Stewart: It ought to be
perfectly plain to my hon. friend that I cannot give him information that is not here and that has not yet been compiled. I have told him that I will have it compiled and will give it to him.


Frederick George Sanderson: I will put it this way. If the minister cannot give me full information as to the full amount spent on dredging for the province of Ontario last year, how much has been spent in the province that he has knowledge of?


Hugh Alexander Stewart: I can only tell
my hon. friend that the total expenditure out of this vote up to January 31 was $149,736.70.


Frederick George Sanderson: In the province of
Ontario?


Hugh Alexander Stewart: No, that is the
combined expenditure.


Frederick George Sanderson: WTe are not getting
very close together, Mr. Chairman. Out of this $149,000 odd, how much was spent in Ontario?


Hugh Alexander Stewart: That is what I
have told my hon. friend I will get for him and send to him, or if he insists on the item standing I will let it stand.


Frederick George Sanderson: I would suggest that
the minister had better let the item stand for that information.


Hugh Alexander Stewart: All right.
Item stands.
Roads and bridges-
Burlington channel bridge-maintenance and repairs, $15,000.
Dominion roads and bridges-generally, $5,000.
Perley bridge over Ottawa river at Hawkes-bury, the Quebec government to contribute one-third of cost of construction only, the Ontario government to contribute one-fourth of cost of construction and to pay annually one-fourth the maintenance costs, $3,000.
Great Bear river rapids-completion of portage road and dock, $12,000.
Kingston-wharves and bridges-maintenance and repairs, $19,000.
Ottawa

maintenance and repairs to bridges and approaches, $8,000.


John Vallance: I do not know whether this is the proper item upon which to ask this question. The item is headed "roads and bridges." If and when the government decides to build a bridge, we will say, for unemployment relief purposes, is it the engineers of his department who have charge of the construction of such works undertaken as a measure of relief?


Hugh Alexander Stewart: In the matter of works undertaken for the relief of unemployment, the municipality, the province and the dominion contribute jointly, and the work is carried on under the supervision of the municipality or the province, and not under the supervision of the dominion. The dominion engineers do not prepare the plans

Supply-Public Works-Bridges

nor supervise the work. The dominion makes its contribution to the expenditures made by the province on a report that the expenditures have been made.


John Vallance: The department itself has no supervision over any work that is constructed as a relief measure?


Hugh Alexander Stewart: None whatever.


John Vallance: Now that the Prime Minister has left the chamber-I notice that the hon. member for Rosetown addressed the Prime Minister-I was just wondering if he had noticed that roads and bridges were coming up. Some two years ago the municipality of Outlook, the provincial government, and I think the federal government entered into a solemn agreement to build a bridge across the southern Saskatchewan river at Outlook. The approaches are built, as the hon. member for Saskatoon (Mr. MacMillan) will agree with me-


Mr. MacMILLAN:: That1 is all wrong.


John Vallance: Is it the intention of the federal government to come through with their contribution so as to make the construction of this bridge possible?


Hugh Alexander Stewart: I would suggest that my hon. friend ask the Minister of Labour under whose jurisdiction all these works for the relief of unemployment come. They are not conducted under the Public Works department at all. We have no part or lot in them, unless in respect of a work that is done by the dominion which is wholly of a dominion character.


John Vallance: Where it is a three-way split the dominion has nothing to do with it?


Hugh Alexander Stewart: Nothing to do with the supervision of the work. The plan is approved by the province and the scheme in general is approved by the dominion government on the recommendation of the Minister of Labour, and when the work is completed and the accounts have been audited the contribution is made.


John Vallance: Are we going to have an opportunity at some other time to discuss these matters?


Cameron Ross McIntosh: Will the minister say
that his department has no initiative at all, no responsibilitj'' whatever in connection with a public works relief program?


Hugh Alexander Stewart: I say that, for reasons which I think the hon. gentleman will understand, other plans have been adopted 
on the recommendation of the provinces and municipalities, and our part is that of contributor. We do not initiate, we do not supervise, we do not control; we pay our share of the cost.


John Vallance: I am in receipt of a resolution passed by the municipality of Eatonia, southern Saskatchewan, soliciting the cooperation of this government in the scheme just outlined by the minister of a one-third contribution each from the province, the municipality and the federal government. Has the minister received a copy of that resolution? I fancy it has been sent to other members; I should think the hon. member for Kindersley has received one.


Hugh Alexander Stewart: We have received a number of resolutions recently and the name is rather familiar.


John Vallance: What consideration is it receiving from the government?


Hugh Alexander Stewart: The matter
would appear to be one that should come through the province with respect to relief of unemployment, rather than on the initiative of the dominion.


Cameron Ross McIntosh: When the minister receives a resolution of that kind, to what department does he turn it over, if he has no responsibility in the matter?


Hugh Alexander Stewart: It goes to the Department of Labour, or a reply is sent suggesting that as it is for the relief of unemployment it be taken up with the municipality and the province and forwarded through the regular channel to the Minister of Labour.


James Earl Lawson: I woidd point out that the questions which hon. members have been asking have no relation to the item under discussion. Hon. members are asking questions with respect to the contribution of the dominion to unemployment relief.


John Vallance: This government is responsible to the extent of one-third in connection with these bridges, and there must be some item under which we can discuss this matter. If the minister says, and the chair so rules, that this is not the proper time to discuss it, very well; but there must be some item under which it can be taken up.


Cameron Ross McIntosh: Will the chairman make the statement that since the Department of Public Works cannot accept responsibility in

the matter, and the Department of Labour cannot, there is some other department that assumes the responsibility. If so, what department?


James Earl Lawson: It would be futile for the chairman to make such a statement because it would not be binding on the house or on the committee.


Hugh Alexander Stewart: This vote relates to roads and bridges built by and under the control of the government; that is all.


Frederick George Sanderson: There is a small
amount of $5,000 for dominion roads and bridges generally. Where was this money spent last year, generally, in connection with dominion roads and bridges?


Hugh Alexander Stewart: The amount is
required for repairs, renewals and painting that may be necessary in connection with various roads and bridges throughout the dominion, under the jurisdiction of the department, and for which no provision has been made by specific items in the estimates.


Frederick George Sanderson: What amount was
spent last year under this vote ?


Hugh Alexander Stewart: The amount was $1,977.


Frederick George Sanderson: Where was it spent?


Hugh Alexander Stewart: I have not the
details of that item.


Paul Mercier: There is an
item for maintenance and repairs to the Burlington channel bridge. What sort of bridge is that?


Hugh Alexander Stewart: It is at the
entrance to the harbour at Hamilton.


Paul Mercier: How is the
amount divided between maintenance and repairs?


Hugh Alexander Stewart: This is a vote of $15,000. For 1934-35, for permanent staff, there was $6,000 less 10 per cent, or $5,400; for seasonal staff, $4,080, less 10 per cent, or $3,672, making a total of $9,072. For supplies and repairs, and electrical power, there was S2.000; telephone, $40; lighting, $164; supplies, such as oil, etc., $2,000; repairs, renewals and unforeseen contingencies, $1,724, making a total of $5,928. This gives a grand total of $15,000.


Paul Mercier: When was
the bridge built?


Hugh Alexander Stewart: I do not know.
Supply-Public Works


Paul Mercier: Does the
minister know the name of the contractor?


Hugh Alexander Stewart: No.


Leslie Gordon Bell: I think he has a
lawyer already.


Paul Mercier: We have heard so much about the Montreal bridge that I want to know something about the Burlington channel bridge.


Joseph Philippe Baby Casgrain: How many bridges are under the control of the Department of Public Works?


Hugh Alexander Stewart: We have the
maintenance of the St. Leonard, Eew Brunswick international bridge, one at Clair, New Brunswick; one at F.dmundston, New Brunswick, and there are general repairs to other bridges, representing $3,300.


[Stage Direction]
Item agreed to.
Telegraph and telephone lines-
Saskatchewan and Alberta telegraph and telephone lines-repairs and improvements, $5,000.	.
Joseph Philippe Baby Casgrain: Just above this item I
see for Quebec, "appropriation not required for 1934-35, $10,500." Have the works that were started in the county of Charlevoix-Saguenay from Tadoussac right along the north shore of improving, repairing and remodelling the telegraph line, been discontinued, or are they going to be carried on again this year? As I understand the situation, a few years ago a program was elaborated whereby the department was to build every year certain sections of the line and if my memory serves me well, at the present time the work has stopped at Seven Islands. Is the work going to proceed or is it to be left unfinished?


Hugh Alexander Stewart: There is a general overhauling and repairing of the lines and rebuilding them where that is found to be necessary, but we are not at this time making any extensions that can be avoided.


Joseph Philippe Baby Casgrain: I am not talking about
extensions. This line was built many years ago, in 1886, and it was pointed out about four years ago that it would have to be nearly all rebuilt. Of course the government could not do the work all at once and they started to do it piecemeal, section by section. I understand the work was commenced and went on as far as a place called Seven Islands. It would be a pity if the work were not proceeded with, because as soon as business starts up in that area where development is going on, surely the people there will need
Supply-Public Works

means of communication and at the present time they have not the type of telegraph service they require on account of the line being old-fashioned and not giving the satisfactory service that would be afforded by a modern line.


Hugh Alexander Stewart: I can only say
that I shall look into the matter and see whether it is possible to make those extensions.


Cameron Ross McIntosh: Where is this appropriation of $5,000 for telegraph and telephone lines in Saskatchewan and Alberta to be spent?


Hugh Alexander Stewart: The requirements for 1934-35 on the Athabaska-Fort McMurray line are $500 and on the Edmon-ton-Hudson Hope line, $4,500.


Cameron Ross McIntosh: No part of that appropriation is to be spent in northern Saskatchewan?


Hugh Alexander Stewart: No.


[Stage Direction]
Item agreed to.
British Columbia northern district-repairs and improvements, $8,600.
British Columbia Vancouver island district- repairs and improvements, $4,000.
Telephone line on Langara island, $1,000. Yukon telegraph system-repairs and improvements, $4,000.
Alan Webster Neill: As regards the second item
for British Columbia, Vancouver island district, there is a cut of something like 30 per cent. That line is being starved; the work cannot be done for $4,000. What is the explanation?


Hugh Alexander Stewart: This is for general repairs and improvements on the Vancouver island district line as requested by the general superintendent in the memorandum which he has filed covering his requirements.


Alan Webster Neill: Why is it 30 per cent less
than it was last year? Last year's vote certainly was not a large one.


Hugh Alexander Stewart: Last year to
January 31 we spent only $4,081.


Alan Webster Neill: The minister is working on the principle of feeding the horse on a straw a day and presently the horse will die.


Hugh Alexander Stewart: I hope not.


Alan Webster Neill: I hope not also.


Wilfred Hanbury: Would the minister explain the large reduction in connection with the Yukon telegraph system. I have no particular interest there except a general one.


Hugh Alexander Stewart: The main portion of the work performed in 1933-34 was carried out on the Telegraph creek-Iskoot section with Foreman Edlund in charge, on the Nahlin-Nakina summit section with Foreman W. Blackstock in charge and on the Shesley-Nahlin section with Foreman C. W. Vance in charge. These sections are approximately sixty miles in length and very difficult to work over owing to the fact that materials and provisions had to be brought in by pack horses for a great distance. It is contemplated in 1934-35 to work over as great a mileage as was done this year, but in a territory which will not involve the expense presently encountered. For that reason the amount of money required for 1934-35 will mot be as great as that expended in the present year. The territory is different.


Cameron Ross McIntosh: Has item 112 been
carried?


Hugh Alexander Stewart: I think that one stood.


[Stage Direction]
Item agreed to.
Miscellaneous-
Architectural branch-salaries of architects, clerks of works, inspectors, draftsmen, clerks and messengers of outside service, $63,700.
Engineering branch-salaries of engineers, clerks, etc. of outside service, $366,000.
For operation and maintenance of inspection boats, $10,000.
Maintenance and operation of water storage dams on Ottawa river and tributaries, $23,100.
National Gallery of Canada. $25,000.
National monument on Connaught place,
[Stage Direction]
Surveys and inspections, $55,000.
Balance of expenditure for works already authorized provided amount for any one does not exceed $200, $4,500.
Miscellaneous works not otherwise provided for, not more than $3,000 to be expended upon any one work, $50,000.
William Lyon Mackenzie King: I notice that in this item is included an amount for the national monument on Connaught place, an increase of $25,000 over last year's vote. Will the minister indicate what progress has been made with the monument and at what stage of completion it is at the moment?


Hugh Alexander Stewart: This is to provide for the inclusion of three additional figures to the national commemorative monument and also for the transfer to and the setting up of the monument in Ottawa, as follows:
Three additional figures, $10,000.
Drawback on the contract being held pending the erection at Ottawa, $12,050.
Granite base, $60,000.
Concrete foundation, $7,000.
Grading pavements, sidewalks, etc., $10,950- Total, $100,000.

Supply-Public TVorks
The appropriation for last year was $75,000, bo the additonal expenditure contemplated is in connection with setting up the monument after it arrives.


William Lyon Mackenzie King: What the minister has just said would indicate that the government evidently expect the monument will be sufficiently advanced to be placed in position possibly this year. In that connection I should like to say just a word to the minister about the location of the monument seeing that there have been some rumours to the effect that what was originally intended as the site for the national war memorial might be changed. A rumour has been circulated-and I imagine that there is no foundation for it-that some place other than the capital, Ottawa, might be chosen; again with respect to the capital, that the original site proposed, namely Connaught place; might be altered to some other site. I just wish to point out in connection with the monument that the site and all that pertains thereto was very carefully considered before any designs were called for. As the minister will recall, the monument was the result of a competition, almost a world competition; it was open to all artists, sculptors and architects of the British Empire and of the allied and associated powers. The terms and conditions of the competition were all carefully set forth in plans and specifications which were distributed at the time of the competition and which contained a description of the site and photographs of the area and surrounding buildings. I have in my hand a small volume issued by the department of public works in 1925 entitled Conditions of Competition few- National Commemorative War Monument. In the terms and conditions it is set forth that the government desire to have a monument erected in the capital of Canada and that to quote the exact words: "the site of the monument will be on Connaught place in the city of Ottawa, in approximately the position shown on the accompanying plan." Mention is made of the fact that Connaught place was selected as being the most centrally located spot in the city of Ottawa, the idea of the government of the day being that the wish of the people of Canada generally would be that the monument would be placed where it would be seen most readily by visitors to the capital, and most generally by those who are resident in the capital; in other words where its position would permit of its being most generally and favourably viewed. It was agreed at the time that no other site was quite as appropriate as Connaught place. The designs were made in reference to Connaught place, and without a change of the monument in some particulars 74726-55
it will not be possible to locate it elsewhere. As the minister will see, the volume which was sent out by his department in 1925 contained views of Connaught place which were submitted to the sculptors, and all the designs which were sent in had relation to the immediate environment. The government appointed assessors who appraised the various designs and models sent in. The one that seemed the most appropriate was selected, and the monument selected by the assessors has special relations to the particular site named in this volume of conditions.
To show how important it is to retain the selected site I would draw attention to the fact that at the time those who have been awarded this monument pointed out that something would be lost if the site were changed, in that the monument was symbolical of the .response of the new world to the old at the time of war, and that the figures had been arranged so that when the monument was in position the troops would be moving from the west to the east. It is necessary therefore that the monument should be so placed that the movement of the troops passing through the arch, will be from the west to the east and that the Connaught Place site affords in a quite unique way.
I think it is important that that particular site should be kept in mind for the further reason that other large expenditures that have been made by the government were made having in mind the widening of the central area of the city into an open park which would permit of the monument as well as the parliament buildings, being seen from a distance and the farmer as a central feature as parliament hill is approached from the park. As the minister knows we were discussing the other evening the matter of the central park and the question came up then as to what the city had promised to do with respect to the city hall. I am glad to supplement by this further word, what was said the other night, that while there may not have been a specific and legal agreement as to the site of the city hall becoming part of the park, the understanding was that a time would come when both the city hall and the post office building would have to come down, and what was agreed to was that when the time came that either of those buildings was demolished the space thus created would fall into what would be the Confederation park space. If the government of Canada decided to demolish the present post office that space would become part of the open space belonging to the city; similarly if the city decided to demolish the city hall that site would not be built upon again by the city but would become part of the park.



Supply-Public Works

I want to mention, because I may not have occasion to speak of this again, a further reason for keeping in mind the central position in the capital for the location of this monument. The site was selected, as I have said, in relation to the larger plan of central development of the capital. That plan contemplated a time, which may not be very far distant, when the railways which run into the centre of the city will be electrified, and when the railway tracks themselves will be covered over, as they are in approaches to many large cities. If one were to seek to visualize what was in the mind of the government at the time they were planning the expropriations that have already taken place it was that in course of time the station itself would be enlarged to extend farther in the direction of Laurier avenue. Anyone looking at the station to-day will see that it is constructed only in part, that it contemplates an extension to the east corresponding to the portion constructed at present to the west of the central arch. From there on towards the east the railway tracks would be covered and become in the course of time something in the nature of a plaza which would extend along the east bank of the canal and adjoining Nicholas street from where the station is to beyond Laurier avenue as far as what is known as the Deep Out near Echo drive. My hon. friend the Minister of Public Works is familiar with that portion of the park because up to a certain stage since he has been in office he has himself completed in a very creditable way that park area which lies 'between the canal and Nicholas street all the way from the Union station to the Deep Cut. He himself has been responsible for the direction of that work, and has added since the old buildings thereon were demolished that portion of the open space as park area to what is already park area or driveway on the east side of the canal and which will be an all important part of the larger scheme when completed.
The decision as to the location of the post office can be settled later, when it may be necessary. A suggestion has been made that the government in putting up other departmental buildings might wish to turn the Langevin block into a post office. Again there has been a suggestion that the front portion of the Union station might become the post office, and the station itself be enlarged. This would appear to have everything to commend it. I mention these matters now because they were in the mind of the previous government at the time the general plan was discussed with those who had to do with the setting out of the terms of the competition for the monument, and they may not be known to

members of the present administration or present to the minds of some who are discussing the question at the moment. What I would suggest, if I might be permitted, is that before the monument is put permanently in any place it be erected temporarily in what is regarded as the best site in the capital, and be permitted to stand there until full opportunity has been given to this house to discuss a change of site should that be thought desirable. I believe the monument was erected in Hyde park, in England, temporarily, and there ought to be opportunity of treating it in a similar manner here.
Just one other point. Some suggestion has been made that the monument should be placed on parliament hill. That point too was carefully considered at the time the terms of the competition were arranged. It was pointed out then that already in connection with the parliament buildings there are three memorials which relate to the great war. There is the central column as one comes into the houses of parliament, which carries an inscription commemorative of Canada's participation in the Great war. There is the carillon, symbolical of the service and sacrifice of Canadian men and women in the war, and there is the peace tower. As far as other memorials on parliament hill are concerned I think they have been confined to some association with the political life of the nation as distinct from its other activities.
As to an objection that has been raised by some to a site on or near a thoroughfare, I would point out that in most of the large cities of the world that is precisely where many of the great .memorials are located. In London, England, the Nelson monument is located in Trafalgar square a part of London where the traffic is most dense. Similarly the cenotaph is located in Parliament street near Whitehall, in the centre of the thoroughfare there. The Arc de Triomphe in Paris is in the centre of the Champs Elysees where many thoroughfares converge. I cite these instances in order that this aspect of the matter may be before the government when considering the location of the memorial this year.


Hugh Alexander Stewart: I am grateful to my right hon. friend for the clear and comprehensive summary he has given of the plans and ideas which presented themselves to those who suggested this monument. It is true, as he said, that suggestions have been made not in keeping with those he has outlined to-night and, as has already been intimated, a committee of cabinet has been appointed to consider these matters. We are prepared to discuss the whole situation with the city and with those who may be interested in town

Supply-Harbours and Rivers
planning, and we hope to arrive at the conclusion that will produce the very best results. I can only say that my right hon. friend's suggestions will be brought to the attention of the committee at its first meeting and will be kept prominently before the committee in all conferences and discussions we may have as to these important matters.


William Lyon Mackenzie King: I should like to thank the minister for what he has said. May I point out just one further consideration of importance. We are voting this money under the designation "National monument on Connaught place," and whatever has been paid out already has been paid out under appropriations so designated. The designs were for a monument on Connaught place; the moneys have all been appropriated under that heading from 1923 to the present time, and I suggest to the minister that the committee consider whether any alteration of the site at the present time would not involve a breach of the contract both with those who were competitors, and the artists who received the contract. I know that two of the brothers who won the competition came to the capital to view the particular site, and made certain alterations in the original design on the recommendation of the assessors and in order to make the monument, when it was completed, harmonize with the buildings in the immediate environment. I think that is an important consideration to keep in mind.


Hugh Alexander Stewart: That is a point I had not noted before. The wording of the vote is exactly the same as it has been in all previous years, and possibly it does irrevocably commit the government to the location of the monument.


William Lyon Mackenzie King: I should like to add one further word, because I think all these considerations are important. The portion of the city selected for the monument is known as Connaught place. It will be recalled that the Duke of Connaught, after whom Connaught place is named, was the Governor General of Canada at the commencement of the war. His Royal Highness was resident in Ottawa at that time. This adds a further association Which makes that site if suitable in other respects, particularly appropriate for the location of a national commemorative war monument.


Paul Mercier: What is the total cost of the monument?


Hugh Alexander Stewart: As far as we can tell the total cost will be $240,672.


Paul Mercier: Can the
minister say when that monument will be completed?
74726-55 i


Hugh Alexander Stewart: The work has not been completed as yet and we cannot tell when it will be ready for delivery.


Paul Mercier: Of the $25,000 increase this year I understand that $10,000 is for three additional figures. What are those figures?


Hugh Alexander Stewart: They were suggested as an improvement of the original design of the monument, and were authorized by order in council of April 18, 1933.


William Lyon Mackenzie King: I regret to have to draw the minister's attention to the fact that the first two items in this miscellaneous vote concern the salaries of architects, clerks, inspectors, draughtsmen, messengers, engineers and so on. If these involve the ten per cent reduction I think the item had better stand.


Hugh Alexander Stewart: The item will have to stand on that account.
Item stands.
Harbours and rivers-Nova Scotia-Under contract-
Cow Bay (Port Morien)-breakwater replacement, $17,000.
Yarmouth harbour-dredging, $41,000. Essential undertakings-
Blandford-breakwater-wharf	replacement,

Black Point-harbour protection, $3,600.
Broad Cove	marsh-breakwater-wharf
replacement, $12,500.
Halifax-repairs to wharfs and replacement of machine shop at R.C.N. barracks and H.M.C. dockyards, $25,000.
Phiuneys Green-wharf, $4,900.
Port Dufferin (John Vogler's Shore)-breakwater, $4,900.
Port Mouton-breakwater replacement, $6,900.
Trout Cove (Centreville)-breakwater extension, $4,200.
Harbours and rivers generally-for maintenance of services, no new works to be undertaken, $225,000.


Mr. RALSTON:: Is this the item which was being discussed by the hon. member for Antigonish-Guysborough?


James Earl Lawson: I am informed that this item was up for discussion on February 16.


James Layton Ralston: Perhaps I am not in order, but one has to consider this point in connection with public works estimates. Has any policy been arrived at with regard to relief works? For the moment I will confine my question to Nova Scotia.


Hugh Alexander Stewart: None, except
such as have been undertaken under the agreement made with the province some months ago by which there is a joint com-tribution by the municipality, the province and the dominion. If my hon. friend has in



S6S COMMONS

[Stage Direction]
Supply-Harbours and Rivers
mind what he has been reading in the newspapers as to proposed new works, nothing has been decided as yet.
James Layton Ralston: Can the minister give us any idea as to when we may expect a decision?


Hugh Alexander Stewart: I am afraid my hon. friend will have to wait and see.


James Layton Ralston: I mean whether it will be next month or not for two or three months.


Hugh Alexander Stewart: I should say it would be before the house rises.


James Layton Ralston: Thank you very much; that is very informative.


[Stage Direction]
Item agreed to.
Quebec-Under contract-
Matane-repairs to harbour works, $19,800.
New Carlisle-wharf reconstruction, $17,000.
Petit Cap-breakwater reinforcement, $34,000. Essential undertakings-*
Anse au Griffons (river)-improvements to jetties, $12,000.
Anse aux Griffons-to complete wharf improvements, $1,400.
Baie Ste. Catherine-wharf improvement,
[Stage Direction]
Bonaventure-widening wharf, $4,600.
Grande Anse-wharf, $5,000.
Harbours and rivers generally-for maintenance of services, no new works to be undertaken, $300,000.
Paul Mercier: What work is to be done at Matane? Is that a new wharf or what is it?


Hugh Alexander Stewart: This is to complete harbour repairs now under contract and to drive forty-five feet of sheet piling along a 160 foot section of the wharf.


Paul Mercier: Is it an
addition to the wharf?


Hugh Alexander Stewart: It is only a repair.


Eugène Fiset: When this item was being considered previously the minister agreed to furnish me with certain information. I asked if the contract for the repairs to the Rimouski wharf had been completed and whether it was intended that further repairs, which are badly needed, would be gone on with this year.


Hugh Alexander Stewart: The contract has not been completed; $13,000 is to be expended next year, and I suppose my hon. friend suggests that we might continue the work and expend a little more.


Eugène Fiset: I have no doubt the minister has received such numerous requests from the local people and from the engineer in charge that I have no fear but that he will have to go on with the work.


[Stage Direction]
Item agreed to.

Saskatchewan, Alberta and Northwest Territories-harbours	and rb'ers generally-for
maintenance of services, i*. new works to be undertaken, $10,000.
Mr. GARDINER:: How uch was spent
in these provinces last year?


Hugh Alexander Stewart: Up to January
31, $2,001.11. I have not the details of that small item.


Mr. KENNEDY (Peace River):: Will some of this money be used to clear the waterways up towards Great Bear lake?


Hugh Alexander Stewart: Under roads and bridges we have a special item for Great Bear lake. I cannot say where this money will be applied.
Mr. MeINTOSH: Will the minister explain where this $10,000 is to be spent?


Hugh Alexander Stewart: The note I have is that this general appropriation is required to provide for the maintenance and repair of existing harbour and river facilities in the provinces of Saskatchewan and Alberta and the Northwest Territories.
Mr. MeINTOSH:	Cannot the minister
specify?


Hugh Alexander Stewart: No; it is spent
just as the need arises in these places. It is a very small vote, I am sure.
Mr. MeINTOSH: I notice that under item No. 100, which we have considered, concerning public buildings and repairs for the province of Saskatchewan there is a vote of over $50,000, of which $30,000 is to be spent in Regina. The remainder of $22,500 is for the rest of the province. If I remember correctly very little of that money is to be spent in northern Saskatchewan, perhaps only a few dollars on improvements and repairs. Practically the whole amount is to be spent in Regina city. To me that looks rather peculiar. Regina city is represented in this house by a government supporter.
Mr. STEWART- (Leeds):	I think there
are some large buildings in Regina too.
Mr. MeINTOSH:	Now we come to this
item for harbours and rivers, and find that there is a vote of only $10,000 for Saskatchewan, Alberta and the Northwest Territories. If we take the amounts to be spent on harbours and rivers in the eastern provinces and compare them with the amounts to be spent in the western provinces we find that while the figure for the east is about $400,000, that for the west is only about $145,000. In other words the east is getting about two dollars to our one. Out of the $145,000 the provinces of Saskatchewan and Alberta and the Northwest Territories are getting only

Supply-Harbours and Rivers
$10,000. May I ask the minister how much of this $10,000 is to be spent in northern Saskatchewan. We would not expect any of it to be spent in the south or centre, because we have no harbours or rivers in the centre, and none of consequence in the south. But what about the north? I know the minister knows all about the river and lake system of northern Saskatchewan. How much money are we spending on it?


Hugh Alexander Stewart: As I have
already pointed out to the committee this is a general vote to be expended where conditions arc such that expenditures must be made. If there are any harbours or rivers in northern Saskatchewan which require expenditures we will have to consider the matter and act accordingly.


Cameron Ross McIntosh: I hope the minister will do that. Perhaps the minister will remember that I drew his attention last year to an important work, when the votes for harbours and rivers were before the committee. On that occasion I drew his attention to the fact that on the Beaver river, one hundred and fifty miles north of North Battleford there are serious rapids, and that these rapids ought to be cleared of the rocks before navigation can be complete from the Beaver river up to the deepwater system of northern Saskatchewan. I drew his attention also to the fact that a sum of $4,000 or $5,000 had been spent by the late government in clearing out these rocks, and the minister said that he would give the matter his consideration. If I remember correctly, after parliament prorogued a letter came from the department saying that the engineer had looked into the situation and had reported that the matter was not very urgent. That is something like taking the matter into consideration. It is a very easy way of getting over it and, of course last year not a dollar was spent. The rocks and rapids are still there and are still an obstacle to the thousands of settlers and tourists, hunters and miners going from the south to the north. May I ask the minister if at 'this time he has anything of a more definite nature to say with regard to doing some constructive work on these rapids in the present year? Has the matter received any consideration whatever?


Hugh Alexander Stewart: I am inclined to think the item to which my hon. friend refers is one of those which fell by the wayside in order to arrive at the $14,000,000 reduction promised by the Minister of Finance, and I do not know that conditions have changed. It is possible we may be able to do something this year.


Cameron Ross McIntosh: Mr. Chairman, the minister appears to have the idea that there are
no rivers, harbours or lakes of any account in northern Saskatchewan. That gives me an opportunity, perhaps a brief one, to call the attention of the committee to the fact that that is an erroneous conception of the water system of northern Saskatchewan. The time is coming when some money will have to be spent.


Eccles James Gott: For canoes?


Cameron Ross McIntosh: If we take you along we will have to have more than a canoe.


Eccles James Gott: I will go along.


Cameron Ross McIntosh: The time is coming when more money ought to be spent in clearing the Beaver river rapids of rocks, in order to have a waterway into that northern area. May I say that we now have a first class provincial highway from North Battleford to Meadow Lake, a distance of slightly over one hundred miles. It is one of the best provincial highways in the province. And then from Meadow Lake to Green Lake, another distance of forty-five to fifty miles the highway is not as good. But when we come to Green Lake we come in contact with the river and lake system of northwestern Saskatchewan. As we leave Beaver Lake and follow the Beaver river down to deep water we come in contact with the Beaver river rapids. As I said, there was an expenditure of about $4,000 made in an effort to clear the rapids. Perhaps another $4,000 or $5,000 would completely clear the Beaver river of the rocks I have mentioned. I think that ought to be done. It is not as though a big expenditure was involved, and it will be money well spent. The point I wish to explain is that the playground of western Canada is in northern Alberta, northern Manitoba and northern Saskatchewan. Northwestern Saskatchewan is part of that playground, and when one goes into that new land and sees for himself at first hand he will understand that it is a very favourable part. For instance, from Green Lake to Dore, the point at which deep water begins, is a distance of about fifty miles. There is now a'rough motor road constructed from Green lake to deep water at Dore. That means there is a motor road from North Battleford to Meadow Lake, a distance of over one hundred miles, and from Meadow Lake to Green Lake, and from Green Lake to the foot of the deep water,-practically another one hundred miles. And it is possible now to go by water from North Battle-ford to deep water in a very short time. After getting into deep water one comes into contact with the Beaver river in earnest. It is a magnificent river, in some places as wide as the St. Lawrence, and from fifty-five to seventy-five feet deep. It flows into the river Churchill as do Reindeer Lake, lake Athabaska

Supply-Harbours and Rivers
and Peter Pond Lake all of which of course are connected with lake Churchill, other northern lakes, and Churchill harbour. Into that new land thousands of settlers, miners, tourists and other people are continually coming in the spring, summer and autumn months. The amount of freight going up and down the Beaver river and into lake Churchill and further north and east and west is surprising. As a land for tourists it is indeed hard to surpass.
As this item was before the house I thought it my duty to draw attention to the fine fishing, farming, lumbering and mining potentialities of that great area. If the Beaver river rapids were cleared at the expenditure of a small amount of money the people living in southern Saskatchewan, Alberta, and for that matter Manitoba, who wanted to go north would be able to go north to investigate and get information of that northern area firsthand. They could get to that tourist area cheaper than to many other parts of the dominion. I shall not take up any more of the time of the house but I wanted to bring these facts to the attention of the minister and of the house. I trust the day is not far distant when at the expenditure of a small amount of money these rapids will be cleared. It will be money well spent because it will make more effective a 200 mile motor road, from North Battleford through Meadow Lake and Green Lake to Dore, and thus be instrumental in opening up a lake and river channel three or four hundred miles north of North Battleford extending into the northern hinterland, where there are bound to be great developments in the future.


Hugh Alexander Stewart: Thank you.


[Stage Direction]
Item agreed to.
Graving docks-
Champlain graving dock, $65,000.
Esquimau graving docks. $80,000.
Lome graving dock, $36,000.
Selkirk-repair slip, $3,000.
Thomas Reid: Has the minister any information as to the number of ships and the names of the companies using the Esquimalt graving dock last year?


Hugh Alexander Stewart: This is to provide for the staff, supplies and replacements in connection with the operation of the dock. I have not a report for the current year, but repairs and improvements for 1932-33 amounted to 87,300. I shall be glad to get the information my hon. friend desires as to the number of ships and the companies using the dock and send it to him by letter, if that will satisfy him.


Thomas Reid: Yes, thank you.


[Stage Direction]
Item agreed to.
Progress reported.

[Stage Direction]
Mr. BENNETT moved the adjournment of the house.
He said: There are second readings standing which it might not be convenient for the opposition to take to-morrow. The Bank Act they would probaly prefer to take at a later date 'than to-morrow. However, it is printed in English and French and will be ready for second reading, also the bill respecting the central bank, and if hon. gentlemen opposite are willing to proceed with those we shall proceed with either one or the other or both, as my right hon. friend thinks desirable. Then we shall take supply-Railways, Trade and Commerce, Justice. I think perhaps it is not necessary to mention any other department from what I know of the ability of hon. gentlemen opposite to engage the attention of 'the house. I think that will be sufficient for the day.
William Lyon Mackenzie King: We have every desire to expedite the two banking measures, but as my right hon. friend knows, each of them is a long one and I doubt if any hon. members have had time thus far even to look at them. I think it would be desirable to let them stand until Tuesday. Apart from that, I think the other business my right hon. friend mentioned might be proceeded with.


Richard Bedford Bennett: On Tuesday it is desirable that precedence should perhaps be given to the Translation Bureau bill. As the hon. Secretary of State mentioned to-day there are gentlemen who desire to participate in that discussion, and I think it should be taken on Tuesday. That was 'the reason he mentioned it. Then after that we will proceed with the banking measures. .
Motion agreed to and the house adjourned at 10.55 pan.
Friday, February 23, 1934