1934-04-27

NEW MEMBER

Mr. SPEAKER:: I have the honour to inform the house that the clerk of the house has received from the chief electoral officer certificates of the election and return, of Al-mon Secord Rennie, Esquire, for the electoral district of South Oxford.



NEW MEMBER INTRODUCED

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Almon Secord Rennie, Esquire, member for the electoral district of South Oxford, introduced by Right Hon. W. L. Mackenzie King and Hon. J. C. Elliott.

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Sixth report of the select standing committee on miscellaneous private bills.-Mr. Maloney (for Mr. Stinson).

Mr. M. J. MALONEY (South Renfrew) moved:: That Bill No. 27, an act to incorporate Thousand' Islands Bridge Company, reported upon to-day by the select standing committee on miscellaneous private bills be placed upon the order paper of the house for consideration this day in committee of the whole, and for third reading.


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Motion agreed to.

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A message from His Excellency thei Governor General transmitting estimates-Canadian Government Merchant Marine, Canadian National Steamships and Maritime Freight Rates
Act-for the financial year ending March 31, 1935, was presented by Hon. E. N. Rhodes, (Minister of Finance), read by Mr. Speaker to the house, and referred to the committee of supply.

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Hon. MURRAY MacLAREN (Minister of Pensions and National Health) moved for leave to introduce Bill No. 70, to amend the Food and Drugs Act.
Some hon. MEMBERS:: Explain.


Mr. MacLAREN:: Mr. Speaker, the main purpose of this amending bill is to bring conformity between the Proprietary or Patent Medicine Act and the Food and Drugs Act by the introduction of a clause which will affect a similar list of diseases in both acts for which the sale of remedies is prohibited. The effect will be that the list of diseases in both acts will be similar.
Another provision in the amendments is that protection will be provided in reference to vinegar. The substitution of acetic acid for vinegar will be prevented.
Motion agreed to and bill read the first time.



CANADIAN NATIONAL RAILWAYS


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Hon. E. N. RHODES (Minister of Finance) moved that the house go into committee to consider the following proposed resolution:
That it is expedient to bring in a measure respecting the Canadian National Railways, to authorize the provision of moneys to meet expenditures made and indebtedness incurred during the calendar year, 1934, and to provide for the refunding of certain maturing financial obligations.
He said: Mr. Speaker, the bill which it is intended to found on this resolution is designed to take care of the full financial requirements of the Canadian National Railways for the calendar year 1934. It provides for the raising of funds for equipment principal payments, sinking funds, and miscellaneous maturing obligations amounting to $12,185,828; for' construction and betterments $4,202,007 and for the estimated net income deficits amounting to $48,840,298. These amounts, in particular as respects the contemplated deficits, are arrived at as a result
C.N.R.-Finance
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of a report which has been received from the trustees of the railway system in conformity with the act. That makes the total sum required for the railway's operation under the headings I have mentioned $65,228,133.
The bill is in two parts. The first part has to do with what might be termed the ordinary financial requirements of the railway for the year. The second part makes provision for the refunding of two maturities for the calendar year, the first one falling due September 1, 1934, and amounting to $17,060,333.33, Canadian Northern four per cent guaranteed debenture stock and bonds; also Great Northern Railway of Canada four per cent first mortgage bonds falling due October 1, 1934, amounting to $3,510,250. It also provides for the refunding of a maturity falling due on February 15, 1935, Canadian Northern Railway Company 4jj per cent guaranteed bonds, amounting to $17,000,000. It was thought wise that we should secure at this time legislative authority to refund or otherwise take care of that maturity lest there might not be time to secure legislative authority having regard to the date at which the session might commence.
Motion agreed to and the house went into committee, Mr. Sullivan in the chair.
Mr. IIEENAN:: The minister I think gave a total of $65,000,000 odd. Would he kindly repeat the different headings?


Mr. RHODES:: Certainly. The first item is for equipment principal payments, sinking funds, and miscellaneous maturing obligations.


Peter Heenan: How much for equipment?


Edgar Nelson Rhodes: $12,185,828; then, for construction and betterments, $4,202,007 and net income deficits, $48,840,298. Does the hon. member desire the figures with respect to maturities?


Peter Heenan: No. Has the minister
any details with respect to the new equipment and the investment required?


Edgar Nelson Rhodes: When I was referring to
the resolution perhaps I should have said that it is proposed that this bill shall be submitted to the committee.on railways and shipping where full details will be available.


Mr. HANBURY:: In what way does the
minister propose to finance these obligations when they mature?


Edgar Nelson Rhodes: The bill will provide an
alternative; the money may be advanced or we may guarantee the securities of the railway.


Wilfred Hanbury: Is it proposed that the
government will issue bonds for the purpose of meeting these maturities?


Edgar Nelson Rhodes: That remains to be determined; the alternative provision will be in the bill.


Peter Heenan: The hon. member for
Skeena (Mr. Hanson) sent me a copy of a letter which he had received from some men who were being paid a very low wage by the Canadian National Railways. I am sorry I have not the letter with me at the moment but they claim that despite a majority award by the board of conciliation and investigation they were still reduced by the management of the railways. The letter refers to the fact that the government has announced the restoration of the deduction to civil servants receiving salaries up to a certain amount, and it is claimed that as the railway is owned and controlled by the government, the government should consider asking the management to give back the reduction in wages which has occurred in connection with the low paid men.


Edgar Nelson Rhodes: I am sure my hon. friend
will be the first to appreciate that I am not in a position to make a statement with respect to his question. His question is one which should more properly be directed to the management of the Canadian National Railways. This matter could be discussed quite fully in the committee.


Mr. RALSTON:: I should like to ask a
question with regard to the general policy of book-keeping as between the government and the Canadian National Railways. As I understand it, provision is to be made for the issuing by the Canadian National of certain notes to cover equipment and principal payments on account of equipment and other capital expenditure, and also to provide for construction and betterments. I understand that the minister proposes to issue notes of the Canadian National which I suppose will be either sold or loaned against by the government in order to provide cash. In case the government should make loans, do I understand that the practice will be to treat the obligation of the railway to the government for those loans as an active asset as distinguished from a non-active asset?

Civil Service-Salary Deduction


Edgar Nelson Rhodes: I could not answer my
hon. friend with accuracy until I have had an opportunity to confer with the officials of my department. There are certain assets which are active and there are others which are not active. The active assets are treated as such and the non-active assets are absorbed in the annual expenditure as brought down in the budget statement. Without knowing the particular item I would not be able to give a satisfactory answer and in any event I would have to confer with the officials. If the hon. member has any particular item in mind I should be glad to get the information for him.


James Layton Ralston: The minister gave an item of something like $12,000,000 for equipment principal payments, sinking funds, et cetera. These ' are to be provided for by notes and I should like to know whether the minister as keeper of the treasury will regard the asset as active should the money be loaned to the Canadian National Railways. I think the minister will find that in most cases where payments on account of capital expenditure or current capital expenditures, if I may use the term, are made, the obligation of the railway to the government is treated as an active rather than a non-active asset. I should like to know if this will apply to the whole of that $12,000,000.


Edgar Nelson Rhodes: I would not like to answer my hon. friend at the moment but I shall make inquiry and before the bill passes I will give him an accurate answer.
Resolution reported, read the second time and concurred in. Mr. Rhodes thereupon moved for leave to introduce Bill No. 71, respecting the Canadian National Railways and to authorize the provision of moneys to meet expenditures made and indebtedness incurred during the calendar year 1934, and to provide for the refunding of certain maturing financial obligations.
Motion agreed to and bill read the first and second times.


Edgar Nelson Rhodes: Before moving that the bill be referred to the committee on railways and shipping, I desire to inform the hon. member for Shelbume-Yarmouth (Mr. Ralston) that I am now in a position to say that loans in cash for equipment principal payments and capital have been entered in the books as active assets for the last two years. I move that this bill be referred to the committee on railways and shipping.


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Motion agreed to.


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Hon. E. N. RHODES moved the second reading of Bill No. 55, to provide for the deduction from compensation in the public service.
He said, Mr. Speaker, there is nothing that I feel I can usefully add to what was said when this bill was introduced. I can certainly add nothing to what was said in previous years at very great length in connection with similar measures which it has been our duty to consider. This year we have been able to make a partial restoration in full of salaries. It would have been a much more pleasing duty on my part, and much more pleasing to the government and to the house as a whole, could we have gone the full distance. That we do not do so is due entirely to the limitation imposed upon us by our revenues. That is the sole reason, and I may say that we shall be only too delighted, when the time arrives and the treasury will permit us to do so, to restore in full the salaries which have been reduced during the past two or three years.
Mr. WILLIAM DUFF (Antigonish-Guys-borough):: Before the motion is carried
there are just a few words I wish to say. You know, sir, that I have always opposed a reduction in the salaries of public officials, and I am not going to delaj'- the house with any remarks this afternoon. I simply say to the Minister of Finance (Mr. Rhodes) that I hope that in the next few months another government will be in power so that we can restore the salaries to what they were before the present administration reduced them.


Mt. J. L. BROWN (Lisgar):: There is
one class of public official who I think should receive some special consideration. Probably most of the members of this house have received communications similar to those that have come to me, and no doubt the government has received representations in the matter. I refer to the postmasters. It is well known that the total recompense of the postmasters proceeds not only from salary but from certain commissions, and it has been pointed out, very properly I think, by the postmasters, that not only have their salaries been reduced but that owing to the depression the recompense they receive through commissions has also been very much reduced.
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Thus they suffer a double reduction. This I think is a situation which should in fairness have the consideration of the government. Is it fair to reduce by 10 per cent the salaries of those men who, because of the severe times through which we have been passing, have already suffered a great reduction in their total income? This matter I have no doubt has already been brought to the attention of the Minister of Finance and the government, as it has been brought to the attention of myself and probably other members of the house. Has the Minister of Finance any statement he would like to make in that regard?


Edgar Nelson Rhodes: My hon. friend will forgive me, but I would remind him that I have exhausted my right to speak on the motion for second reading. In committee I shall be happy to discuss the matter.


Mr. E. R. E. OHEVRIER (Ottawa):: Before the motion carries for the second reading I wish to make a few observations. I do not intend to delay the house at any great length, but we are confronted with a situation which I think calls for consideration in view of the decision which you, Mr. Speaker, gave a few days ago with respect to another bill. I voted against Your Honour's interpretation of the rule with respect to amendments to the second reading of bills, but the majority of hon. members sustained that ruling. We are now on the second reading of Bill No. 55, and that means that we are concerned with its principle. The principle of the bill may be ascertained in the same manner as the principle of the marketing bill was sought to be ascertained when that measure was before the house. This bill is "An Act to Provide for the Deduction from Compensation in the Public Service." The short title' of the bill is:
This act may be cited as The Salary Deduction (Continuance) Act, 1934.
Section 3 of the bill reads:
Notwithstanding the provisions of any statute or law, there shall, during the fiscal year ending the 31st day of March, 1935, be deducted from the compensation of every member of the public service of Canada 10 per centum of the amount thereof: Provided-[DOT]
Now I submit that the principle of this bill is not to be found in any rider to the bill; we are not concerned with the principle of the rider. We are not concerned with the principle of the provision but, I submit, with the principle of the bill itself, and that principle is double-barrelled in that it is for the continuance of the deduction from compensa-

tion in the public service. It is true that by the rider in the bill, an amendment to the law, some small minority will be affected in an infinitesimal way, and I suppose that in times of stress such as the present, with a government in power such as we have to-day, for these small mercies we ought to be grateful. But my attitude to these salary reductions is well known both in this house and elsewhere, and I for one cannot accept the principle of a continuance of the deduction from these salaries.
Now, the Minister of Finance, in introducing the bill, said that a certain range would be affected. I quote:
That range takes in a very large number of employees of the public service. As nearly as we can ascertain some eighteen thousand in number will be affected, including revenue postmasters, part time collectors of customs, lighthouse keepers, wharfingers, charwomen, seasonal or part time labourers, lockmen and bridgemen on the canals. Those in receipt of salaries above the sum of $1,000 will be subject to the same deduction as hitherto.
Therefore, right on the face of it, there is one class of the two classes of the service, those engaged in the service of the state, that will benefit, one small portion of a huge class. The government, at the time they decided upon this most unfortunate policy, were careful to make these deductions as heavy as possible upon both classes of the service-the public service at large and the civil service, so-called. This bill means something or it means nothing. If it means anything, it means something in the way of deduction. But after all, what does it mean in a practical way? I am sure that if the minister had been properly advised, or if he had followed his own sagacity and had gone carefully into the measure, he would not have brought down this picayune concession to those affected; because, with all deference to the hon. gentleman, for whom I have the highest regard, I am bound to say that the restoration of 10 per cent to those who will benefit is absolutely ridiculous. Let us see how far the generosity of the government, under the most difficult circumstances to which the minister has referred, will go, and to what extent the 18,000 employees referred to will benefit. Is this to be a smoke screen or a camouflage?
I take the report of the civil service committee for 1932 and I find in appendix J the total number of permanent and temporary employees in the civil service so-called of Ottawa, as of March, 1931, which is the last figure available, was 11,766 and the total

Civil Service-Salary Deduction
number outside Ottawa for the same date was 33,815, making the total number in Canada 45.581. Therefore there is in Ottawa about 30 per cent and outside Ottawa about 70 per cent of the classified service, so that when one speaks about the civil service one speaks not for the civil service of Ottawa alone but for 100 per cent of the civil service wherever in Canada those employees may 'be located.
When I look at appendix C of the same report, what do I find? The minister said that he was returning the salary deduction to all those who receive $1,000 or less. Included in that number let us see how many are in the classified service and how many in the non-classified service, and how they compare with the 18,000 he says will be affected. If we look at appendix C we find the different salary ranges comprise the following percentages of the classified service:
Percentage of
Salary range-	classified service
Up to $1,020	 6.2 percent
Up to $1,500	 42 percent
Up to $1,980	 79 percent
Up to $3,000	 94.65 per cent
These figures are cumulative. 'Rut all those in the range up to $1,020 are not getting that amount. The numbers and the various amounts they are receiving are as follows:
Humber
of employees	Salary
[DOT] 95	$210
64	 240
80	 270
1	 360
92	 420
69	 480
5	 600
159	 660
We have not yet reached the class grade *one. which starts at $720. The earnings of the lower grades in the classified1 service start at $720 and the class goes to $1,020. The numbers with the amounts received are as follows:
Number
of employees	Salary
6	$720
82	 780
4	 840
58	 930
106	 960
Not one civil servant in the classified service earns exactly $1,000 because there is no such category. The class salary range is $720, $780, $840, $900, $960 and then $1,020. The minister might have gone a little higher and put the cleavage where it should naturally have been, that is, at $1,020. Who gave him the information or advice or suggestion to
make the division at $1,000 when the nearest approach to that is $960 and then the salary jumps to $1,020?
It is true that the number of those who earn $1,020 and under is 2,145, but none of them earns exactly $1,000. There were 106 in the classified service at $960 or 721 earning up to that amount. If we take it that one-quarter of the classified service resides in Ottawa, then there would be 180 or at the very utmost 200 of them in this city who would be affected. That shows the fault or want of logic in making the division at $1,000 rather than at $1,020 where the cleavage should have been made.
Of those who earn from $720 to $960 there are about 200 in Ottawa and there may be about 700 in the whole of Canada. I do not think any of them are married, though undoubtedly some of those who earn that amount have certain dependents. Some may help their mother or brothers and sisters, but they are the very few. Why not, for instance, have started at the class, grade 2, getting $1,080 where, for example the letter carriers start, most of whom have dependents? The unfortunate feature of this attempted legislation is that it hits where it is least needed, but when the bill is in committee we will go more fully into that aspect of the situation.
Let us take the unclassified service and see how far we get within range of the 18,000 who in this time of stress are to be benefited by this most generous legislation. There are about 60,000 employees in the unclassified service. Uinder the prevailing rates there are some 6,000 and part-time, seasonal, postmasters, etcetera, about 18,000. Who are the people in this unclassified portion who would benefit? I am taking this from the Statistics of the Civil Service of Canada, numbers employed and expenditures on salaries by departments, published under the authority of the Minister of Trade and Commerce. Let us take the Department of Agriculture first and move rapidly through the list. In that department the unclassified portion who would 'benefit are day labourers engaged in work necessitated principally in connection with experimental farms. In the Department of Immigration and Colonization the inspectors of immigration who are permanent officials of the Department of National Revenue, are paid part-time wages only and as has already been shown in customs returns, their part-time wages-from $50 to $400 per annum-paid by this department are included in salaries and wages of " non-enumerated classes."
Civil Service-Salary Deduction

In the Department of Labour the same thing applies. In the Department of Marine, the expenditure on wages for all ships' companies and casual help is included under "non-enumerated classes;" the latter includes the working force employed during the summer months in deepening and widening the St. Lawrence ship channel, also artisans and labourers employed by the day as required at the Sorel shipyard and on construction work. Is there something in the far distance or the near distance or what?
In the Department of Fisheries it includes wages for egg-sorters employed for short periods, and fishery guardians employed occasionally for short periods.
In the Department of National Defence, the members of the permanent naval, military and air forces are not regarded as civil servants. Hence neither numbers of personnel nor expenditures on pay are included in this report. Transient labour is sometimes employed by military engineers on repairs and construction work.
In the Department of National Revenue it is occasionally necessary to engage employees for a few hours or days at the most, yet these still appear as those who have benefited by this generous return.
In Pensions and National Health, in the health branch, where there is no part time salaried medical officer to look after sick sailors on landing at maritime ports, private practitioners give attention to these sailors and render their accounts to the department. Occasionally when a vessel having quarantin-able diseases on board arrives at a quarantine station it is necessary to engage a nurse or other help for a few days to assist the regular staff. These are among the eighteen thousand who will benefit.
In the Post Office, the employees of revenue post offices and sub post offices, together with mail contractors and licensed vendors are placed in the category of "non-enumerated classes." Mail contractors are paid under the tender and contract system, and as a rule do not give the whole of their time to the postal service. Most of the people affected by this disposition are people who have other avocations, they are not full time servants of the crown, they have some other means of livelihood, while those in the enumerated classes, the civil servants so-called, are by law precluded from engaging in any other sphere of activity than the service of the state. Those therefore are some who will be helped by the generosity of the government.

I have therefore shown that up to the present there might be in the city of Ottawa 180 in the unclassified, and probably some 600 to 650 charwomen. There are also classified temporaries not under the civil service commission, probably some 300, so that the total affected here will be from about 1,130 to 1,200. In all Canada there are 721 in thi3 class, grade one, with salary of $457,000; in Ottawa 180 with salary of about $114,000; 650 charwomen with wages of $22,650; and 300 unclassified at $900 or a total of $270,000. That is there would be altogether $406,952 upon which to draw this ten per cent. So this year the government would return probably $40,000, but from this one class alone they had during the last years over $80,000.
Now let us see the fairness of this return, in view of what the minister told the house when he presented his budget the other day. The total payroll of the classified service in Canada was $91,000,000 odd. The Ottawa payroll for the same period was $19,134,000 or twenty per cent of the salaries. The ten per cent deduction in 1931 gave $8,700,000. Ottawa contributed in cash $2,000,000. One quarter of about 8,000 statutory increases would amount to something like $250,000. The promotions that were stopped would represent something like $75,000. In other words, Ottawa has contributed $2,325,000. And Ottawa produced that amount out of $8,-. 700,000 or thirty per cent of the revenue with twenty per cent of the salaries paid.
But that is not all with reference to the treatment that these people are getting now. Take for instance a chief clerk in the service; his maximum is $3,720. Suppose he was at $3,480 when the ten per cent came. His present salary is $3,480. Ten per cent off is $348, the increase stopped, $240, the deductions therefore outside of his five per cent for superannuation amount to $588 or sixteen per cent, to which adding the five per cent gives twenty-one per cent instead of ten per cent. The straight deduction by the stopping of promotions and statutory increases and the ten per cent cut bring it to sixteen per cent.
Take another class, a head clerk, a similar calculation shows the result to be seventeen per cent. Yet when the minister spoke the other day he told the house that in the last two years they had taken in a phenomenal amount of money-I will come to that in a moment.
There is another feature about it. Who are those who will benefit? Following the rules

Civil Service-Salary Deduction
of the house I asked His Honour for some information in respect to the staff. I asked:
Are all the sessional staffs of the House of Commons to be benefited by the terms of the proposed Salary Deduction Act just introduced?
Answer: No.
Question: If not all, which ones will?
Answer: Charwomen, pages and parliamentary restaurant employees in receipt of salaries of $1,200 or less per annum.
Question: If any are excluded, which ones are they, what are the reasons therefor?
Answer:	Sessional clerks, protective staff,
messengers, servants, debates staff, stenographers.
As to the reasons, I am furnished with a circular letter number 115 dated April 11, 1934, from the office of the comptroller of the treasury. I do not know whether these regulations have been changed since; if they have, so much the better, they could not have been made worse than they are now. If they have not been changed, I shall cite them so that the minister may take cognizance of them and change them. Now what is the result? Take these two cases and see the logic of it. A stenographer here during the last session earned $690, at the rate of $5 a day. But for the purpose of this bill her salary must be computed at 365 days at $5, or equivalent to a yearly salary of $1,825, therefore she gets no benefit from the proposed restoration. A servant who last year worked, say, 300 days at $2.75, was paid $825. The government in its greed at the time of taxation takes the $825, taxes it $82.50, but this year when it is a question of returning it, they say to this man, you must calculate your salary at $2.75 a day for 365 days, and as the total remuneration so worked out comes to $1,003.75 he does not get back his ten per cent. That is based on this regulation, the fourth paragraph of the letter:
The bill is applicable to all employees, including prevailing rates, seasonal and sessional, and in order to establish whether the annual compensation will be above or below $1,000. accounting officers will establish what would be the amount earned if the employee were continuously employed for the full twelve months, and then treat the employee in accordance with the classification thus theoretically established.
When it comes down to returning the ten per cent, then all kinds of regulations are made so that the civil servants will not be able to get it back. But when it was a question of deducting, then if a man earned $16, or had been paid during the past year S35 for some small services he might have rendered, he was taxed $3.50. Then we are told by hon. members opposite that this is
a most generous move, and that the 18,000 people affected will to a considerable extent be benefited.
These deductions are made, in the face of a statement by the minister made on April 18, which is reported at page 2284, of Hansard, as follows:
To achieve this result, there has necessarily been a rigid scrutiny and control of departmental activities and personnel. From 1930 to 1933, government employees, including fluctuating as well as permanent staffs, were reduced by over 12,000 in number. The saving in salaries and wages exceeds $10,000,000 a year, not including the saving of some $7,800,000 arising out of the ten per cent salary deduction.
Mind you, Mr. Speaker, that from this particular class of service there has been a saving in salaries and wages exceeding $10,000,000 a year, outside of the sum of $7,800,000, and all this without one cent of expense for collection. Yet, when it comes to handing back some of this money we find exactly the contrary attitude. In other words the government took away from the service every penny it possibly could, and now when the time comes when they could do something, particularly in view of the tremendous amount of money they collected so easily, they deny even the most elementary rights of justice.
I could elaborate at greater length. What does the taking away of that amount of money from the civil servants amount to? It means that between the years 1930 and 1933, at a saving of $10,000,000 a year there has been a total saving of $30,000,000 in addition to the saving of $7,800,000 for a period of three years, amounting to $23,400,000, or a grand total of $53,400,000. There is that amount of money less in circulation among the civil service employees. One can readily imagine the amount of purchasing power which has been lost.
Next I should like to direct the attention of hon. members to the denial of promotions. This is one point which could not be considered in connection with the figures quoted by the minister. A vacancy may be created, by death or otherwise. The new appointee is not placed in the position at the salary he or she should have, but performs the work which had previously been performed at a much higher salary. Those people find themselves in the same position as the acting lance corporal, but without pay. This procedure, also, is against the recommendations of the Civil Service Commission.
As the service is not limited to the city of Ottawa, let us see what the opinion is in
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Brantford. I have before me a newspaper clipping dated April 12, from that city, which reads as follows:
There wasn't much rejoicing around the post office over the announcement all employees receiving under $1,000 would get back that ten per cent pay cut. Only one is affected-the boy who delivers special delivery letters. His pay will be raised from nine cents a letter to fen cents.
This, taken with the cheque for one cent produced some time ago by the hon. member for Kenora-Rainy River (Mr. Heenan) would indicate that surely this is a one cent government.
At this point I should like to say only a word or two with reference to certain editorials, but I am afraid that because of the decision rendered only lately by you, Mr. Speaker, any criticism appearing in an editorial directed against a measure before the house would not be received. However, I would suggest that anyone interested in the matter, and any hon. member appreciating the meaning of this measure, should refer to the editorials of the Ottawa Journal of April 10, and the Ottawa Citizen of April 11.
However, as I have dispensed with the other editorial comments I shall direct my attention to only one of them which does not affect the bill. I commend this article to the attention of every hon. member. This is an editorial of the Ottawa Journal dated Saturday April 14,-and because of the writing of this article I can forgive the Ottawa Journal for many articles they have written. It is as follows:
One of the most significant things in Canada during the past week was something that few people noticed. It was that the government's decision to do nothing substantial about civil service salaries was almost entirely ignored.
Here in Ottawa, of course, there was regret and disappointment. But outside of this city, in the dominion as a whole, the matter went all but unnoticed. Not a newspaper, that we have seen, whether published in our larger cities, or in smaller centres, evinced the slightest concern. The thing was deemed unworthy of comment.
I read this because I should like the points contained herein to be brought to the attention of all hon. members. What does this mean?


Edgar Nelson Rhodes: Mr. Speaker, I must rise to a point of order. I submit it is not competent to read either a newspaper editorial or an article calling in question a matter before parliament. The hon. member for Ottawa is contravening the rules in doing so. Members of parliament are here to give expression to the voice of the people.


Edgar-Rodolphe-Eugène Chevrier: I suppose the point of order raised by the. minister will have to come out of the time I had at my disposal. I hope the minister has not spoken with a view to interrupting the reading of the article, in other words that he has not attempted to trip me on a mere matter of time. I think it would be well for Your Honour to give a ruling once and for all as to what we are or are not to do. Only last night the hon. member for Dorchester (Mr. Gagnon) read the whole of an editorial into his speech. Then, earlier in the week the same question was raised, and in connection therewith I was pleased to read what Your Honour said when, on that occasion, the hon. member for Souris (Mr. Willis) spoke. Your Honour then decided you would look into the nature of the editorial. As it did not attack the measure before the house, and was not a comment upon the legislation itself, your decision was that the hon. member was at liberty to use it. I cannot think that there would be one decision for one member and another for another. I have the highest regard for Your Honour's decisions, and respect them at all times, but I do submit that in reading this article, one which has nothing to do with the bill but which simply explains the situation of certain classes of people in Canada, I am well within my right. It does not criticize the policy of the government, but it brings to the attention of hon. members the fact that a certain category of government employees are worthy of some consideration. Possibly Your Honour would permit me to take the same liberty as you accorded the hon. member for Souris. In that event I could read the article, and then if Your Honour decided I should not have read it you might order that it be expunged from the record.


Pierre Édouard Blondin: The article read by the
hon. member for Ottawa is on different lines from that read by the hon. member for Souris. As I understand what the hon. member has read it does comment directly on a matter before the house. The precedent as laid down by Bourinot, has been cited so often that there can be no necessity to repeat it at this time. I do not think the hon. member for Ottawa is in order in reading further the article, part of which he has already read.


Edgar-Rodolphe-Eugène Chevrier: It may be that what
I have already read was not in order, but what I should like to read now is certainly in order. I do not wish to quarrel with Your Honour's decision but I suggest I should be accorded the same privilege which was extended to the hon. member for Souris. If you

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find, after reading the article, that it should not have been read Your Honour could say so at a later date. But if Your Honour came to the conclusion that I was within my rights in so reading the article you could so state.


Pierre Édouard Blondin: My ruling is that the
editorial does comment directly on legislation before the house. The article read by the hon. member refers to the policies of parties. It is perfectly in order for the hon. member to make his own comments but the extracts which he is reading are not authoritative at all.


Edgar-Rodolphe-Eugène Chevrier: I do hope, Mr. Speaker, that we might have some decision which might be understood. I may be dense but I fail to understand just when I am permitted to read an editorial. I was very careful not to read certain ones I have just mentioned because they would constitute a violation of the rules. However, I am bound to accept Your Honour's ruling, but I must make these observations for my own satisfaction.
My time is about exhausted. For the reasons I have given I certainly cannot accept the principle of this bill which is one of deduction, and secondly, one of a continuance of deduction, also because it is so niggardly in its provisions. I am grateful for the little that has been done in a small way for a small class, but as I cannot accept the principle of this bill I shall vote against it.


Mr. A. M. CARMICHAEL (Kindersley):: Mr. Speaker, before the second reading of this bill is adopted I think we are supposed to express our opinion in regard to the principle embodied in it. Lest the second reading should go by without very much protest, thereby conveying the impression that this chamber is almost unanimously in favour of this bill and the principle embodied therein, I feel like voicing my own opposition to the principle of the further continuance of the salary deduction.
We have had this salary deduction imposed on our civil service for the years 1932 and 1933, and on each of those occasions I took the privilege of speaking in favour of the principle. I did so for various reasons. I realized that the Finance minister had difficulty in meeting his obligations. Revenues were down, expenditures were increasing, and it was necessary to conserve in the expenditure of money in every way possible. Also I realized that throughout the country in general there was a tendency among business firms, commercial houses, agricultural people, school teachers and so on to reduce
salaries, and the government therefore was simply moving with the general tendency in the years 1932 and 1933.
But now, Mr. Speaker, conditions are somewhat different from what they were two years ago. Instead of business firms and commercial houses reducing salaries and having their employees get along on a lower wage scale, just the reverse is happening. We notice in the papers quite frequently items such as this one from Chemainus, B.C. This dispatch is dated February 28, 1934, and it says that nearly one thousand employees get a pay increase. The Victoria Lumber and Manufacturing Company have given their employees a wage increase of approximately ten per cent, effective March 1. I have another clipping here from Toronto, that the Toronto board of education has decided against any salary reduction in 1934, and has restored to the teachers the five per cent reduction that was in effect during the last two years.
Also another clipping to the effect that the United States Senate overrode administration forces and voted to restore one-third of the federal pay cut of last February and to give back the full fifteen per cent reduction effective July 1. And so on. I could quote a number of similar extracts showing that there is a general tendency to restore that which has been taken away for the past couple of years.
It seems to me that the dominion government will be moving along the right line if they too decide to restore that which has been kept back from the civil service for the past two years. I realize that they are making a slight gesture in that direction, but it is so slight that it is very difficult even to see it, and the benefits accruing therefrom are not going to be very extensive. It would seem to me that if the entire salary cut were restored to the civil service, while it would mean the raising of an additional $8,000,000, yet the benefits to be derived from putting that amount of money into circulation would be felt in a great many channels throughout the country, including the channels of taxation. It would mean, for example, that the returns from the sales tax would be considerably increased; it would mean that the income tax returns would also be increased. It would mean that business in general throughout the dominion would receive such a stimulus that it is quite likely that a considerable portion of the additional $8,000,000 expended would come back into the dominion treasury before the end of the year.

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But in any case, even though it did not, I note in Hansard that the minister in his budget address tells us that he anticipates revenue for the ensuing year to exceed expenditure by the amount of $8,800,000. That being the ease, even though there should be no revenue at all come back because of this $8,000,000 of additional expenditure, there would yet be $800,000 of a surplus, according to the minister's own figures.
Another point I would like to put before the minister is this. The government of the day has penalized the civil service of this country for two years by subjecting the civil service to' a ten per cent reduction. But the wages of money have not yet been penalized. The largest item in our estimates is made up of interest on our public debt, $141,494,853.65 being the interest for the ensuing year. Without going into the question whether the government is competent legally to take action in regard to interest reduction, although I realize that Australia has taken action and reduced her interest charges by 22J per cent, I would point out that if the government did take action and reduced interest charges by ten per cent, so that a levy was put on the wages of money, as well as having a levy put for the past two years on the wages of hard-working civil servants -if we put such a levy on the interest accumulating on our national debt it would bring us in over fourteen million dollars in one year. I would commend to the minister, if he feels that he must have this additional money, the taking of action along the line of reducing the wages of money, which is interest, and restoring to the hard-working civil servants that which I am sure they will be glad to receive, and if they receive it I am sure they will put it into circulation by spending it properly.


Mr. T. F. AHEARN (Ottawa):: My colleague the senior member for Ottawa (Mr. Chevrier) who has just spoken, is recognized, I think, in this house as an authority on civil service matters, and therefore I do not propose to elaborate on the civil service statistics that he has presented to the house.
When the salary deduction bill of two years ago was ' introduced I stated that in my opinion such a bill was a wide open invitation to business to discharge employees and cut salaries. I think the same thing applies today. The businessmen of the country follow the lead of the government; the government is a barometer to business and industry. Public employees were being discharged, retirements were being hastened and salaries were cut and the employers observed that

barometer and tightened their belts. Up to that time many employers had felt that they were doing a patriotic duty by trying to maintain wages and keep employees at work but the government legislation gave them a definite lead. I believe this action of the government is simply a vote of want of confidence in its own fiscal policy; it is simply a matter of deflation, of tightening the belt and it has been followed throughout the country. It is a strange paradox to see the government causing unemployment and the lowering of wages on the one hand and paying out huge sums of moneys for relief with the other. I think the condition of our revenues to-day can be blamed on the basic policies of this government. Towering tariff walls and extreme deflation all along the line must lead inevitably to a burden of direct taxation. The present policy is not different from what it was in 1930.
I think hon. members will realize that the civil service is what might be described as Ottawa's most important industry. It employs the greatest number of men and women and the wages and salaries paid are more than those paid by all other industries combined. The purchasing power of the city depends upon the civil service. When the dismissals occurred, followed by the ten per cent cut and the loss of the statutory increases, a terrific blowWas dealt to this city. I do not believe the people throughout the country realize what a concentrated blow was dealt to one particular community. The effect of the dismissals and the cut in salaries was immediately felt in Ottawa. The earnings of practically all business concerns began to fall and many were forced to follow the government's example. Where three persons had been employed in a grocery store, let us say, one was let out and as a rule the two kept on suffered some reduction in pay. Business failures became quite prevalent. I know, from my own experience, that many Ottawa businessmen are simply hanging on by their finger nails. A large departmental store which was founded by men who had played a big part in the building up of this city and whose memory is still fresh in the minds of most of the people of Ottawa went into receivership. The irony of it all is that this was caused by a government whose election promise was employment for all.
Last January the number of heads of families on direct relief in Ottawa was 5,000. The census of 1930 gives Ottawa a population of only 130,000. Those in charge of the relief situation in Ottawa tell me that there are still

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about 4,700 heads of families on direct relief. There are also many unemployed persons being taken care of by relatives, while the missions and hostels are full of single men. The welfare bureau estimates five to a family, so hon. members will see that the unemployment situation in this city has assumed very serious proportions. I think any businessman in Ottawa will admit that the problem with respect to unoccupied houses, shops and apartments is becoming very grave.
If the reports in the press are true that employment is increasing in Canada, I am afraid Ottawa has lagged far behind. Optimistic reports have appeared in the press and optimistic statements have been made by members of the ministry in connection with the rise in revenues and I do not think anything else has received as much attention from my constituents. They feel that if these things are true, then they should receive some relief. However, I am afraid their hopes have been blasted. That seems to be the only definite policy of the government, to blast the hopes of the people of this country.
In these days of disappointments, we must be thankful for small mercies, and the return of the salary deduction of ten per cent to certain employees-I understand they number about 1,200 of whom about 700 are charwomen-is a matter of real satisfaction to the people of this city. Perhaps these people needed it the most, but the fact remains that this bill does not benefit the real civil service of the country. I understand that in Ottawa there are about 10,500 people who will not be affected by the provisions of this bill. These are the people who are charged with the main responsibility of carrying on the varied activities of government, but this great body of men and women receive no relief by the removal of the salary deduction or the restoration of the statutory increases. I warn the government, in all seriousness, that its policies with respect to the civil service are beginning to undermine the morale of the service as a whole. The service is beginning to feel that the present government has no sympathy for it or for those who live in the capital of Canada. Faith and hope are becoming seriously undermined in Ottawa. The minister tells the civil service to go on hoping. Now the civil service of Canada, as I think all hon. members of this house will agree, are an exceptionally fine body of men and women and they have exceptionally fine and high traditions of service. I remember, and I think hon. gentlemen will also recollect, the statement made by the Right Hon. Stanley Baldwin in which he expressed words of high 74726-165
appreciation of those civil servants of Canada with whom he had come in contact, and, coming from a country where the civil service stands very high in the esteem of the people, he paid the civil service of Canada, I think, a great compliment. After dashing to the ground the hopes of the civil service, the Minister of Finance, speaking on the budget, made the following statement as reported at page 2293 of Hansard:
At the same time, while the improvement has been gradual, it has not only been sustained but has progressively increased. This is evidenced by the splendid increases in both imports and exports for the month of March, which show a proportionate advance in volume of trade hitherto unprecedented.
It is generally recognized that this depression and its blighting effects have been world wide. This fact of itself has had the tendency to produce a "depression psychology," followed by what might be termed a "depression weariness." The result is that we do not so readily recognize and properly appraise the incontrovertible evidences of reviving activity which have made their appearance.
These signs of improvements are so marked as to indicate beyond question that we are on the road to recovery. May we with renewed hope, fresh courage and firm step

I wonder who wrote that.
-press on towards the goal of better and happier days which lie not far ahead.
The minister is certainly optimistic and full of hope, and I cannot help feeling, as I am sure most other people feel, that he might have done somewhat better in this matter of salary restoration. He plainly voices a hope there, but he is not willing to take a chance of any kind. I understand that the revenues of the country in April have improved to a marked degree.
The policy of our neighbours in the United States has been to raise the wage levels and to reduce unemployment, but by a strange paradox this policy did not provide for the restoration of salary reductions to the civil service, which I understood amounted to 15 per cent. So that the Senate of the United States, no doubt realizing that this was inconsistent with a recovery program, have passed, over the president's veto, an act which provides for the full restoration of the 15 per cent by next July. An extremely cautious chancellor of the exchequer has also restored half of the reduction to the civil service of Great (Britain. It seems, therefore, that the legislatures of Great Britain and the United States appreciate their respective civil services rather more than we do ours in Canada. Personally, I think that if there had been only a restoration of say half the cuts it would have caused great satisfaction in this



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country and1 would have stimulated business men. They would have felt that things were on the upgrade, and that the government was leading the way in the restoration of higher wage levels and greater employment.
I cannot help regretting that the minister, who has one of the kindest hearts in this house, did not feel himself able to do something substantial for a 'body of people who have suffered severely during the last two or three years. People generally forget, and perhaps hon. members in this house do, that during the boom years, 1927, 1928 and 1929, the wage increases to those engaged in industry generally reached a point 90 per cent above the figures of 1913, while those of civil servants went up to only 60 per cent. If civil service salaries do not keep pace with those paid in general industry, can the people of Ottawa be blamed for coming more and more to the conclusion that the government is not really in sympathy with the civil service and the people who live here?
Let me take the example afforded by the order in council brought down by the Secretary of State a few years ago, providing ' that no civil servant may run for the city council or the board of control without the permission of the head of the department. Consider the number of civil servants entitled to vote in municipal elections in Ottawa. They are wanted in the city council of Ottawa because they naturally represent a very large cross-section of the city and of Ottawa public opinion. Let us suppose that a large industry pursued the same policy; I think a roar of disapproval would go up. I would suggest that that order in council be rescinded.
An election is being indefinitely delayed, and the people of Canada are voting no confidence in the government. Now public opinion must be heeded by public men. I commend Canadian history to those who doubt that statement. I commend them to look at what happened to the government of Alexander Mackenzie who remained in office a little too long; I understand that the Liberal party was out for about twenty years. And Sir Charles Tupper also disregarded byelection results, and we all know that the Conservative party was out of office fifteen years. It can be seen, I think, that history has a marvelous way of repeating itself. I commend that thought to members of the present government
I rather hope that the present government does stay in one year longer than the ordinary life of parliament, because the public will know how to deal with those who will not

respect popular opinion. Let them stay in, praying for the backwash of Roosevelt and British prosperity; but the people will exact the penalty all the same. History teaches that.
In the next election campaign the Prime Minister, I suppose, will address an audience in Ottawa, and I shall not be surprised or shocked if the audience at that meeting forms itself into a giant glee club and sings at the conclusion of his address:
It is all very well to dissemble your love,
But why did you kick us downstairs?


Mr. HUMPHREY MITCHELL (East Hamilton):: Mr. Speaker, I want to say just
a very few words on the measure before the house. I notice the previous speaker said that Sir Charles Tupper disregarded byelections. I think it would have been fairer if he had said that Tupper was warned by them; possibly the recent byelection in Canada will have its effect on the government of the day and maybe we shall not have an election this year.
I have always maintained in this house a consistent attitude against reductions in salaries. I am, in fact, one of the few who have been opposed to a reduction in our own indemnity.


Thomas Franklin Ahearn: In the house.


Humphrey Mitchell: Yes, I think so, if I
remember correctly. When this salary deduction legislation was originally passed I understood it was to be for just a year and of course we have had a reiteration of that policy from year to year since the act was first passed. We have now the spectacle where the government comes to the house in a spirit of contrition and the amount of money that is going to be returned to the civil service is about two per cent of the original cut. I was pleased to-day to see the hon. member for Kindersley (Mr. Carmichael) also in a spirit of contrition. We are gradually winning over all those who thought the soundest way to get out of the depression was by decreasing wages. Now we see the general movement toward what I consider the sound stand adopted by the forces of labour in this country in connection with wages. Whether we like it or not, the salaries paid constitute the cornerstone of the business life of the dominion. That has been recognized in every country in the world. It has been recognized in part by the institution of a committee under the jurisdiction of the government. It has been recognized by the republic to the south of us. It has been recognized by the government of Great

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Britain in giving back to their civil servants some part of the deductions made in their salaries. It has been recognized by the railroads of the United States. I notice in today's paper that the ten per cent deduction placed in operation there is going to be returned completely to the men during the next year. It has also been recognized by the government of Ontario; whether on the basis of pure economics or politics, I would not like to say. Nevertheless they in their wisdom find that the soundest way of bringing that province and, of course, this country in turn, back on an even keel is by a restitution of the reduction of wages put into operation by them.
I would like to have seen the federal government go further. I do not say that for political effect; it is a position I have always taken, a position the labour movement in this and every other country has taken in connection with wages of men and women not only in the civil service but also in industrial and business pursuits. Until we find a way of permitting the people to consume the things they produce, we shall never get out of the wrnods and that is true not only of this but of every other country. The present recommendation of the government does not go far enough; it includes 18,000 civil servants who receive wages below $1,000 per annum and I understand it affects only two per cent of the permanent service.
I would like to make one or two suggestions to the minister particularly in regard to temporary employees, and especially stenographers. I understand their salaries are based on a daily wage and of course they will not come within the confines of this legislation. I believe they should be treated just the same as some of the more highly paid officials of the government whose duties to a large degree centre around the sessions of parliament. It would be a constructive policy that rather than those girls being paid just for the five or six months they are here, they should be granted an annual salary and possibly allowed to come within the jurisdiction of the 'Civil Service Commission. I think it is fair to say that most of them, when they leave here, are more or less kept in idleness until the next session of parliament rolls around. I am not saying this in criticism of the conditions enjoyed by those higher officials of the house whom I have mentioned.
Further, I do not think the bill goes far enough. Many of the employees coming within the provisions of the bill are single. If they are not single; if the argument should be that many of them are married, I would suggest as I have done before that their wage 74726-165J
rates be investigated by the Stevens committee now considering the question of sweated labour. But it would have been well had the government taken into consideration particularly married men and those with family responsibilities who are outside the provisions of this legislation. I believe the government has a direct responsibility to see to it that the wages and working conditions of their own married employees conform to an adequate, might I say a Canadian standard of living. It would be well if the government would seriously consider this matter.
It is passing strange to see how the mental outlook of human beings goes in cycles. We get the cycle where people think the solution to the problem is through cutting wages. May I make this observation: if that is a solution to the problem, then let us work for nothing and we shall all become rich. If low wages and intolerable conditions constitute the basis of the success of any country, China and India would be the most successful in the world. I have no patience with some people who think because somebody else has a cut in wages, the civil servants should also have one. I do not think it is a sound policy to spread the misery. There would have been some soundness in the attitude of the government toward this question had they adopted a policy similar to that enunciated by the Postmaster General of Australia when he spoke recently before the members within the confines of this house. As he said, the obligation was spread not only over the wages and working conditions of the people in Australia, but also over the wages of money.


Mr. BEYNON:: He cut the wages of the civil service there.


Humphrey Mitchell: You know how much it was as well as I do; I don't need to tell you. I am not supporting the position taken by the minister, I am just saying that the position of this government would have been far sounder if their policy took into consideration the reduction of the wages of money as well as the wages of human beings.
I have just had a note handed to me which says that the wages of a stenographer amount to less than $1,000 a year but they do not get back the ten per cent cut. I understand that their wages are on the basis of $5 a day rather than a yearly wage, which of course places them outside of the confines of this legislation.
I give the government some 'measure of congratulation for the steps they have taken, but I very much regret that they were not able to go the whole way, because I do not think that this country will ever get back to what

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might be called a normal condition until there is recognition of the fact that the consuming power of the men and women engaged in industry, the average man and woman, is the corner stone of the prosperity of the country.


Mr. ANGUS MacINNIS (Vancouver South):: I wish to add a few words to the protest that has been made by other members on this side of the house in connection with this bill. Like the others I am of course in favour of the bill in so far as it restores some of the deductions that have been made in former years. But I believe the government could have gone considerably further in restoring the deductions to the lower grades. I'believe when the bill came up in 1932 some members on this side, possibly of this group, proposed an amendment that the deductions should not apply to any salary or wage less than $1,800 a year. I believe that $1,800 enables a family, if it is not too large, to have a fairly decent standard of living, though not at all commensurate with what we could have in this country if we had proper distribution and were allowed to produce wealth in the way and to the amount that we could. So I suggest to the minister and the government even now that, as they feel that conditions are improving and that there has been some gain since the date on which the announcement was made and the bill introduced in the house, they should consider increasing the number of exemptions in the bill.
Before I say anything more, I wish to congratulate the hon. member for Kindersley (Mr. Carmichael) upon the position he has taken to-day. I remember last year when I spoke along similar lines he censured me rather severely, which hurt me somewhat, and which I rather resented at the time, because I pointed out then that I was not seeking an increase for myself, that I would have even agreed to have my own indemnity still further reduced if thereby those who were getting lower wages could have their salaries increased or could be exempted from the deduction. I am glad to-day to see that he has come to realize that, as I think the hon. member for East Hamilton (Mr. Mitchell) said, we cannot bring back prosperity by reducing wages.
Another effect of the salary deduction bill is that it has eliminated the annual increments resulting from promotions from one grade to another. This also is a hardship, and I do not think it is right that it should continue. I also wish to point out that the government itself is violating the terms of the bill by discriminating between individuals in the

civil service. I have before me copies of various orders in council that have been passed recently increasing salaries. There is one case of an inspector in the income tax office for Montreal district who had his salary increased from $4,500 to $5,800. I think when a person is receiving a salary of $4,500 a year he is suffering no great hardship, that he can live fairly decently on that. Yet we have the government, that refuses to increase the salary of stenographers who receive a very small wage, or continues to reduce the wages of others who receive more than $1,000 a year, increasing the salary of a person who is already receiving the relatively high salary of $4,500 a year. There is another, an assistant inspector of income tax at the Montreal office, whose salary has been increased from $2,800 to $4,000 under authority of order in council. Another one, a clerk, grade one, raised to grade two. Another, a clerk, grade one, promoted to grade three, an increase of wages going with all of these promotions. Rather than discriminate in this manner, I think it would be much better for the government to restore altogether the deductions that have been made and bring harmony and contentment into the civil service. I believe that we are all becoming convinced now that the great problem before the world, and the problem that is facing this dominion, is to find some means to distribute the wealth that we can produce in such great abundance. I am quite satisfied that we can never do that by decreasing the medium through which the individuals draw upon that wealth.
In my opinion the government should be a model employer. They should set an example to other employers. That does not mean being extravagant or wasteful. They should first set a remuneration sufficient to provide a certain standard of living, and then see that no one in their employ receives less than that remuneration. I say again that the government would be wise, they would be doing a good thing for this country by restoring all the deductions made in 1932, or, as a minimum, by exempting from the bill all employees receiving less than $2,000 a year.


Mr. A. W. NEILL (Comox-Alberni):: To
begin with a minor matter, I think there must be some misunderstanding in the minds of many hon. members of the house and of the sessional staff in connection with the staff's remuneration or the deduction. A pay day has passed since the minister announced that the ten per cent would be restored in

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part, and the staff has had no restoration. Apparently for that reason they think they are not going to get any. Take the question of the stenographers who get around $150 a month, which is figured as $1,800 a year. That being over $1,000, the department has ruled that they cannot get the ten per cent restored. But I do not see how the government can possibly evade-I do not believe they want to-the terms of the bill that:
no provision of this act shall operate to reduce the compensation of any member of the public service of Canada below one thousand dollars per annum.
If it be found at the end of the year that members of this staff have not earned $1,000 in the year I suggest that it is very much up to the government to give them back the ten per cent for the limited portion of the year which they have worked, even though at the time they were working at a rate' greater than one thousand dollars a year. That seems only reasonable. I trust the minister will take steps, either by regulation or perhaps by an explanation in committee, to make that clear. I wish he would do so, because there is a great deal of misunderstanding not only among hon. members but also among people to whom this matter is one of great concern.
I wish to touch upon another method of accounting, which I think is unfair. Seamen on government boats receive very small pay -I believe it is $65 a month-and board. The government have a habit of putting a fictitious valuation, inasmuch as it is a sum arranged by themselves, on the value of the board the seamen receive. That amount is added to the $65, with the result that the total is brought to a point where the ten per cent may be deducted. These men are not given very much in cash. They are given the food the government buys for them, which is bought at a price the government purchaser thinks best. Whether or not the buying is done in the most economic way, we do not know and the men concerned have no say in the matter. They are charged with a certain sum-and I forget whether it is $25 or $35 per month-but at least an arbitrary sum which is reckoned as part of their wages. Many of the men are married and have to maintain homes on land. It is notorious that a man living with his family can live far cheaper than when living by himself. Surely that is a matter which should be taken into consideration. For instance, if a department sends a permanent official from Ottawa out to the Pacific coast or to any other point in the dominion on public business, the whole of his expenses are paid while
such official is away. Bills for hotel accommodation, board, and other necessary expenditures are paid. Those men are not charged with the board expenses, nor is the ten per cent deduction taken on the additional amount. Such computation would not be reasonable.
The next thing I would expect to hear- and I am afraid to make the suggestion for fear the minister should grasp at it-is that the men would be charged for their sleeping accommodation, blankets and' so on. Although this may be a matter of small concern to most people in the dominion, it is of great concern to the men directly interested. I know of my own personal knowledge that it does make a very great difference. Taking the ten per cent from a man who is receiving only $65 in cash for the support of his wife, his home and his children, acts as a severe strain on his resources.
To some extent I should like to follow the remarks of the hon. member for Vancouver South (Mr. Maclnnis). I suggest that as times are improving, and as in every return, national revenues are increasing, the minister might consider whether in months to come, possibly in a period of six months from the beginning of the fiscal year, he could reconsider the situation, and just now make the necessary provision in the act. If at that time he found conditions had improved sufficiently, instead of waiting another six months he could then restore the ten per cent cut in its entirety. In my view he might very well do that. Such procedure would not cost him any money if the revenue was not coming in as fast as he thought it should be to justify a further increase. The minister himself showed an indication of his views in this connection because, as a matter of fact, he hesitated to make a decision in regard to the reductions until he had before him the last possible returns so as to ascertain what action would be justified.
At this point I shall deal with the bill in its wider aspects, and first congratulate the Minister of Finance upon his courage in bringing down that which he must know is an unpopular measure. With an election in sight he must realize that in the larger cities or those points of the dominion where civil servants predominate, the measure will not be received kindly. It could not have been his own disposition to incur all the odium involved, unless he considered his action entirely necessary. For that and other reasons I shall vote for the second reading of the bill. I do suggest however that he should have made the minimum limit greater, and in committee

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ment and the civil service commission classify the office and the postmaster begins at a minimum salary of $2,040, with increases of S60 a year up to the maximum of $2,400. The assistants who previous to his obtaining that classification were paid by him out of the bulk revenue of the office are no longer paid in that way. They become regular civil servants and their salaries are fixed by the civil service commission according to the classification of the post office in which they are working. The classification may give them $700, $750 or $900, and the postmaster has nothing at all to do with the fixing of their remuneration. The postmaster in the class B-2 post office becomes a regular civil servant. He suffers the salary deduction of ten per cent, say $200. But if he had not become a regular civil servant, if he remained under the old classification of his office, his deduction would have amounted to $400 or $500. In this way an injustice is done. The regular civil servant has suffered only a reduction in his salary which is fixed by the commission but the country postmaster has had to suffer a reduction in loss of revenue and a reduction in salary. If the revenues of the post office had kept up to the 1930 figure the injustice done would not have been so great, but I think it will be found that the revenues of a post office, especially of these commission offices, has been reduced considerably. I believe there is a difference of about $2,125,000 between the present revenues of the Post Office Department and what they were in 1930. I wish the minister would consider this matter and take it up with the officials of the Post Office Department.
I hold in my hand a copy of a memorial sent to the Post Office Department by the Canadian Postmasters' Association setting forth certain reasons why these things should be changed. I have given some of these reasons already and have added others. It cannot be said that this matter has not been brought to the attention of the government because the postmasters association has been very persistent in pointing out this injustice. When we were considering the bill which made a general reduction without any exception, I stated that I could not see how injustice could possibly be avoided.
There is certain information I should like to get when the bill is in committee. I do not oppose the second reading because we must be thankful for small mercies. The government has seen fit to make a readjustment up to a certain figure and while that does not meet my views in all respects, it is something. 
I understand that some 18,000 servants-I am not going to call them civil servants-of the government will be affected by this measure. I am distinguishing between civil servants and workers outside of what is really known as the civil service, especially those workers who do not come under the civil service commission for appointment or dismissal. I should like to know how many revenue and nonrevenue offices, that is accounting and nonaccounting offices, will be affected by this measure. With the aid of the Postmaster General's report I have endeavoured to arrive at the number of non-accounting offices, and I find there are some 3,000. I think I am pretty close to the correct figure. These nonaccounting offices are little country post offices in which the postmaster receives a salary of $100 per year. Previous to your humble servant occupying the position of Postmaster General in the former government, these postmasters received $60 per year. I increased this salary and I might say that that increase was strongly supported by the opposition of that day, the present government. The increases in these salaries and in connection with other offices amounted to over $1,000,000 in that year. But the present government has cut down these small, measly salaries. People will say that that does not make any difference, that this is ready-found money for these people as they are not dependent upon the salary for their living. That may be quite true but it must be remembered that they must give time to the work. There are many country post offices where the mails are received daily and although the revenue and the quantity of mail handled is small the postmaster or postmistress must attend to see that the mail is received and distributed. The postmaster cannot afford and the government cannot afford to have a separate building, and the postmaster uses his own house as the office. The government has done what I consider it had no right to do, cut down the rental allowance by ten per cent. A country postmaster may receive perhaps $20 per year for the use of his house but that has been cut by ten per cent. There are cases where the Post Office Department will not agree to a rental above $50 per year. Sometimes an application is made to the Department of Public Works and rather than undertake the construction of a public building to be used as a post office, that department will add $50 more for rental.
Not only was that allowance cut, but the allowance for night work was cut. Under our laws a country post office need not keep

Civil Service-Salary Deduction
open after eight o'clock at night but any postmaster in a small country post office will tell you that people come in at eight, nine, ten, eleven and even twelve o'clock to get their mail. They come in from long distances and they see a light in the house and they come and ask for their mail. It has always been a question whether night service of that kind should be paid for by the department, but it was recognized in many cases. It does not amount to very much and is a help to the postmaster, and yet that night allowance is cut.
I am not going to ask the minister to look into too many things but I do ask him to look into the reduction in the rental, forwarding and night allowances. I ask him to see if some rectification cannot be made of what I claim to be injustices. From my experience as head of the department I know they are injustices. These injustices have existed for two years, which is too long. I hold the minister to the promise he made me when I withdrew my objection to the second reading of the bill last year, that any injustice which could be shown would be rectified. I feel quite sure the Post Office Department will admit that these are injustices and if they will not admit that, I should like to discuss them upon the floor of this house.
Mr .W. A. BEYNON (Moose Jaw): I do not wish to delay the house for any length of time on this bill. I do wish however to associate myself to some extent with the hon. member for Comox-Alberni (Mr. Neill). It is not very often that we see eye to eye, but on this occasion I think he was quite sound when he said that in discussing this bill we are not discussing wages in Canada but are discussing the private business of the government of this country. And I believe he was quite sound also when he said that a government cannot spend itself rich any more than an individual can. I know that an individual cannot because I have tried it.
I cannot be at all surprised that the members representing the city of Ottawa should take the stand that they have taken on this bill. I can quite appreciate their being in favour of restoring the cut to the civil service of the country. I was however a little surprised at the attitude taken by the hon. member for Kindersley (Mr. Carmichael). It seemed to back up to some extent the stand taken by the junior member for Ottawa. He referred to the fact that business concerns in this city had gone bankrupt, and that was partly due to the reduction in the salaries of civil servants in the city. I want to say that the
city of Ottawa does not know anything about depression. That is the situation.


Edgar-Rodolphe-Eugène Chevrier: Would that be a reason for inflicting this on Ottawa?
Mr. BEYN'ON:	It is a reason why the
people of the rest of Canada who are really suffering a depression and know what it means should not have to pay the additional taxation necessary to restore the cut. That is what it means, and I agree with the hon. member for Comox-Alberni when he says he could not support the restoration of the cut and go back to his constituents, who are suffering a decrease in revenue not comparable at all with the slight decrease which the civil servants have received, but infinitely greater, in some instances their revenue having been absolutely wiped out, and in other eases having slight revenues but being taxed to the limit of their capacity to pay the taxes of the country.
Then we have as a necessary measure one-half of the original tax on sugar. I will not stand up in this house and recommend returning the whole of the civil service cut until that tax is removed and until the revenues of the country will warrant its removal, because that is being borne by the whole of the people of Canada, who can much less afford it than the civil servants can afford to suffer this small cut.
People coming from western Canada to the city of Ottawa are struck by the fact that the people of Ottawa do not know the first thing about depression. The member for Kindersley is fully aware of that. He is a gentleman for whose views I have a great deal of respect and he is usually very sound, but I think he got off the trail this afternoon. I should like to see the salaries returned to civil servants. It is not that I have the slightest thing against the civil service and I should like to see them have the cut restored. But they are much better off, even with the reduction, than ninety-five per cent of the people of the west who are paying taxes to pay the salaries. That is the situation, and while that obtains I do not feel that I could stand in this house and advocate the return of the cut.
The hon. member for Kindersley spoke about taxing the wages of money. That subject has been explored, and he frankly admitted that he could not suggest how it could be done. I should like to see it done, and to a certain extent it is being done in so far as the refunding has been reducing interest. So far as the government is able to do that, they are doing it to their utmost.

Civil Service-Salary Deduction
There is one respect in which I wish to associate myself with the senior member for Ottawa, and that is with regard to the salaries of the sessional staff, those who are receiving as a matter of fact much less than one thousand a year because they are employed only during the term of the session. I do not think it is sound to compute their salary on the assumption that if employed all year they would receive over $1,000, because we know as a matter of fact that they are employed only a few months, less than half the year, and some of them come long distances. They are not overpaid. Those who have come since the increases were stopped get only $4 a day, and after they have paid their expenses they have little left. I hope the minister will give that consideration and that it can be adjusted.
I have also some sympathy with the arguments of the ex-Postmaster General (Mr. Veniot). I know there are some postmasters in the revenue post offices who should receive consideration at the hands of the minister. While I am not as familiar with that subject as the ex-Postmaster General is, I know that there is hardship. How the matter can be adjusted I do not know but I am sure the minister will give it his attention.
That is all I wish to say on the subject. I have nothing in the world against the civil service or against their getting their pay back, but while the hardly-pressed people of the west are suffering hardships, while they are in that plight, I do not feel that I could stand in this house and ask that the reductions be restored.


Edgar Nelson Rhodes: I do not propose to take the time of the house for more than a few moments, especially as it will be more convenient, in committee of the w'hole, to deal with many of the individual and specific matters raised by different hon. members. I hope they wall realize that if I make no reference to any specific instance they have brought up I shall be glad to do so when we are in committee.
There are however one or two general observations, as touching upon the principle of the bill, on which I wish to say a few words, as a reaction from some of the remarks made by certain hon. members. Take the hon. member for East Hamilton (Mr. Mitchell). He may be surprised to hear me say that I have always been an advocate of high wages. You show me the country where you have high wages and high prices and I will show you a country in which there are far more prosperous conditions than there are in the

country that has low wages and low prices. That is axiomatic. But my hon. friend goes off the rails, if I may use the vernacular, when he confuses wages with the amount paid to civil servants, which must come out of the pockets of the taxpayers, including the wage earners of the country.
My hon. friend from Comox-Alberni has suggested that it must be an unpleasant task for me to be associated with a measure of this kind. I assure him it is one of the most unpleasant duties I have ever had to discharge, and I have had many in my public life. But it is a duty, and one must perform one's duty. In that connection let me make this observation and I do it in all kindliness -with respect to a remark made by the junior member for Ottawa (Mr. Ahearn) when he referred to the ill fate that befell the Hon. Alexander Mackenzie who was recognized as having been such an honest man that he said he had to sleep on the public chest with arms beside him to protect it against the raids of divers and sundry people. I do not profess to be a prophet, but I venture the opinion we are coming to the time in this country when men of the character of Alexander Mackenzie are going to receive a far greater degree of veneration than they did in times past. This dominion is strewn with wreckage in the form of public expenditures running into the tens and hundreds of millions of dollars which have been made with the acclaim of the people, not realizing, poor souls, that the day would come when they would be called upon to pay the bills. That day has arrived in very large measure and there is on the part of the Canadian people a consciousness toward public expenditures, the like of which has not obtained before. I hope the junior member for Ottawa does not continue along the trail indicated by the process of thought he showed here to-day, because if he does so, I venture to say that his continuance in public life will not be long. He was enunciating the theory that we should, to put the matter baldly, purchase the people with their own money. He had in mind the fact that in times past spending governments were popular governments. That was true, but, as I say, that was in the days when people did not stop to think and realize they would ultimately be called upon to foot the bills. I do not want to indulge in any heroics but my mind recalls a statement of Abraham Lincoln when he said: "I would rather be right than be president." I may say to the junior member for Ottawa that I would rather do my duty as

Civil Service-Salary Deduction
I see it than be Prime Minister of Canada, even if that involves the protection of the people as against themselves. That leads me to say this: In the first place the hon. member for East Hamilton (Mr. Mitchell), and some other hon. members for whose opinions I have the highest respect, fail utterly to take into consideration the fact that we are passing through a period the like of which has not hitherto been known in the history of the world. The very world is rocking and we are coping with a condition which we cannot measure or deal with on the basis on which we would have dealt with it under what we knew in times past as normal conditions.
The hon. member for Kindersley (Mr. Carmichael) for whose opinions, always formed as a matter of honest conviction, I have the highest respect, has fallen into error, I am afraid, when he suggests that by restoring the civil servants' pay we would improve conditions because we would be putting that much more money into circulation. I submit that we do no such thing. All we do is transfer from the pockets of all the taxpayers of Canada the $7,800,000 which would be required to be placed in the pockets of the civil servants who would receive that sum. You would increase the spending power of the civil servants to that extent but you would also diminish the purchasing power of the taxpayers to the same extent, and you are just as far ahead in the last analysis as you are in the first. The hon. member referred to the fact that an industry in British Columbia employing about a thousand men had restored the pay of its employees. Certainly, and why did they do that? Because they had the money with which to do it; the industry was earning sufficient to do it. The hon. member for Kindersley-and I hope he will not take exception to my singling him out for the moment because I want to deal with one or two of the arguments he put forward-said that the Minister of Finance in his budget estimated that we would have a surplus of some $8,000,000 during the coming year. That is true, but my hon. friend must bear in mind one or two factors. In the first place, as I know to my sorrow, this is a very difficult period in which to budget and we must have some margin of leeway. We are not dealing with budgets in the old days when conditions were more or less static. Last year I budgeted for a balanced budget this year, but I found I was wrong to the extent of $24,100,000, although I budgeted on the best advice which I could receive. There is not a country in the world which has not had that same difficulty in recent years. Let me point this out to the hon. member for
Kindersley and to the house: he did not refer to the matter, but several hon. members referred to the action of the British government in restoring a portion of the salary deductions of civil servants and others in Great Britain. In Great Britain they had a surplus, not on current account but on all accounts, of a stupendous sum, greater than the amount which we shall have added to our national debt for last year and this year. Notwithstanding that surplus, what did they do? They restored only one-half of the salary deduction, and these deductions applied to school teachers to the extent of fifteen per cent, policemen, judges, members of the defence forces, cabinet ministers, members of parliament, in some instances going to twenty per cent in the higher brackets and ten per cent in the lower.
Look at the picture in Canada in the light of what they did in Great Britain. Notwithstanding that huge surplus, the British government restored only a portion of the salary deduction. Why? Because they wanted to err on the side of caution, I presume. But in Canada all we are hoping to do this year is to balance the budget on current account and go into debt still further to the extent that we have to utilize funds to meet deficits on the Canadian National Railways, capital expenditures which are not taken care of out of revenue and the amount required for unemployment relief.
It may be a surprise to the two Ottawa members that I am just as anxious as they are to see the salary deductions restored, but as a public servant I have a duty to perform and I have to keep in mind the taxpayers of this country and the fact that we must maintain the credit and integrity of the dominion We would be far better off to inconvenience, if I may use that word as a milder term, those members of the civil service who have to make the sacrifice for another year-and I hope it is the last one-than we would if we dashed into a restoration of salaries, knowing that we could bring it about only through putting additional taxation on the people.


Edgar-Rodolphe-Eugène Chevrier: Might I ask the minister this? I appreciate his words, but in view of what he said, would he remember, when the time comes, the burdens the civil service has borne?


Edgar Nelson Rhodes: I yield to no man in this country in my appreciation of, in the main, the character of the work that is performed by the civil service. There are in the civil service the drones, as you will find in any large organization: there are some who are not earning one-tenth of their salary, but by and

Civil Service-Salary Deduction
large the civil service are as fine a body of public servants as you will find in any country in the world. They work long hours, and this country is extremely well served. In my experience and contact with them the latter class are the ones who complain least about this salary deduction, because they know the extremity in which the country is placed, and the dire necessity which forces the government to effect this saving.
I do not want to enter into a dissertation on economics or sociology, much less discuss the tariff, but I think it is necessary to make just one brief reference, because my hon. friend the junior member for Ottawa (Mr. Ahearn) was at pains to repeat what he had heard so many of his elders on the opposition side say, namely that our difficulties are due to the tariff policy of this government. He is a promising young man; I have every hope of his going far in public life and I do not want him to start off on the wrong foot, therefore I would warn him not to repeat in parrot fashion what he hears so frequently, or he may in time come to believe it himself. In the first place I never could understand what difference it makes to the taxpayers whether they pay by direct taxation or indirectly through the customs house. If you collect $100,000,000 in revenue through the customs house it comes out of the pockets of the people just as if it were collected in direct taxation.


An hon. MEMBER:: You would do more business.


Edgar Nelson Rhodes: I am prepared to admit that there are cases where the incidence is split; in some cases perhaps more is paid by the importer, in many cases it is paid by the exporter, and in some cases it is divided. But the point is that money expended by the people comes out of the pocket of someone, whether it comes through the customs house or through direct taxation. Let me point out to the junior member for Ottawa that we are not the only foolish people on earth. He cannot point to a single country in the world to-day, unless it be Russia, where there is no unemployment, and I am sure he would not want us to adopt the methods they employ there in order to avoid it. But let us say that the question he has raised in that regard is a matter which is open to argument. Well and good; we can discuss it in its proper time and place. But we are confronted with a condition and have to deal with it the best way we can, in the light of the ability of the taxpayers to meet their obligations.

One other thing, though perhaps this is hardly necessary in view of some remarks I have already made. My hon. friend the junior member for Ottawa said in plain terms that the feeling was growing that this government was out of sympathy with the civil service. Well, that statement is quite parliamentary; my hon. friend has a perfect right to that opinion if he chooses to express it, but it is not justified by the facts. I think the ordinary, average, intelligent civil servant, and they are an intelligent body, realizes the situation as well as the government itself does. While he has to suffer because of this cut, as some of the rest of us do, he is prepared to meet the necessities of the case.
While there is much more I should like to say, I do not want to impede the progress of a measure for which I happen at the moment to be responsible. Let me impress upon the house the fact that I entertain most profoundly the hope that we shall never again be called upon to meet an emergent situation by an emergent measure of this kind. For the sake not only of the government of the day but of the country as well, and the welfare of the civil service, I hope we shall not be called upon again to deal with a measure such as this. When we are in committee of the whole I think I shall be able to demonstrate to the hon. member for Gloucester (Mr. Yeniot) and one or two others who made observations to-day that this restoration means something more than they think it does. It affects eighteen thousand people, and it matters not whether they be called civil servants or what their designation or classification may be, they are employees of the government. They are now being placed in precisely the same position as they were before any salary deduction took place. Whatever complaints may have been made as to the manner in which this deduction applied in the first instance, I do not think any legitimate complaint can be made as to the circumstance that, when the time came that we could consider a restoration, small though it may be, we have first taken care of those in the humbler ranks. And we will reach those in the higher ranks, who are best able to stand it, as soon as opportunity reasonably permits.
Motion agreed to and bill read the second time.


Peter Heenan: On division.
The house went into committee on the bill, Mr. Smith (Cumberland) in the chair.
Progress reported.
At six o'clock the house took recess.

Discount and Loan Corporation
After Recess
The house resumed at eight o'clock.



PRIVATE BILLS


[Stage Direction]
Mr. J. A. SULLIVAN (St. Ann) moved the third reading of Bill No. 58, to amend an act to incorporate The Discount and Loan Corporation of Canada.
Mr. H. E. SPENCER (Battle River):: Mr. Speaker, the bill before the house asks hon. members to sanction certain privileges to some money lending interests, which privileges I do not think are in the interests of Canada. Similar bills have come before the house on other occasions, and unfortunately some have passed. Last year a bill very similar to the present one was placed before the banking and commerce committee, and was there subjected to considerable criticism; afterwards in the house the bill was thoroughly discussed and eventually defeated. I do not know how this bill has reached this stage, but inasmuch as it is now before the house for third reading I am afforded an opportunity of saying something with regard to this type of legislation.
In my opinion the bill should have gone to the banking and commerce committee. How it passed through committee of the whole I do not know. If it had gone to the banking and commerce committee I am quite sure an amendment would have been suggested and possibly passed at that stage. Looking through the bill I find it is very similar to two bills which came before the banking and commerce committee only yesterday. Apparently the whole idea behind the legislation is to enable certain money lending interests to lend financial assistance to those whom we may describe as down and out, and who cannot get any help or support from the ordinary banking institutions. In subparagraph (i) of section 3 I find provision for a rate of interest of no more than seven per cent. At first sight this looks very harmless indeed, because under our banking laws the same rate is allowed. But upon further investigation I find that two per cent is allowed for expenses. Subparagraph (ii) provides:
Charge and deduct, in addition to interest as aforesaid, for expenses to be incurred by the company for administration, including overhead, keeping of records, professional advice, correspondence and other like matters, two per centum of the principal amount of the loan.
It seems to me that the banking institutions of Canada have exactly that same work to do before making a loan, and if they charge more than seven per cent we penalize them.
In the present instance, however, it is suggested that the corporation in question should be allowed to charge another two per cent in addition to the seven per cent, because of the work falling to their lot. In the new Bank Act, supported by the government of the day, we have seen fit under section 91 to provide severe penalties if the banks charge more than the rate of seven per cent. Yet this bill asks parliament not only to permit the charging of seven per cent, but to permit an additional charge of two per cent to do the work done by the bank under the original seven per cent.
That is not all. In subparagraph (iii) I find provision for a fee not exceeding $10 for sundry services. Furthermore, interest is deducted from the principal before the principal is given to the borrower. This in itself means that the borrower is penalized for a good deal more than the rate called for in the bill. He does not get the full principal, but gets a sum less interest and other charges.
Further, if the unfortunate borrower happens to be so lucky as to be able to repay the loan before the due date he can do so only on condition that the lender has the option of deducting three months' interest. These various interests added together total about thirty-eight per cent. When we put stringent regulations and penalties in our Bank Act to prohibit banking institutions charging more than seven per cent surely parliament is not going to allow a loan corporation to lend money to probably the poorest of our people at a rate of about thirty-eight per cent interest. I have known of people in western Canada who borrowed at the rate of eight per cent or nine per cent compound interest. Once those people got into the hands of the moneylenders they found it most difficult to get out. Therefore I oppose any bill such as the present one which is likely to force borrowers to pay such high rates. I oppose it because I believe that only in very few cases will the borrower ever get out of the clutches of the moneylender. I therefore move:
That the bill be not now read a third time, but that it be referred back to the committee of the whole with instructions that they have power to amend it as follows:	Insert the
following paragraph immediately after subparagraph (iii) at page 3 of the bill, namely, IV "In no case shall the total charges for interest and additional charges exceed thirteen per cent per annum."


Humphrey Mitchell: Mr. Speaker, I seconded the motion of the hon. member for Battle River (Mr. Spencer) because I am of the opinion

Discount and Loan Corporation
that this form of organization is unnecessary in Canada. I am not unmindful that charters are being granted to similar organizations. I believe it was last session I listened to a speech delivered by the Minister of Trade and Commerce (Mr. Stevens) in which he discussed interest rates and said that an interest rate of even ten per cent was unsound. I hold in my hand a pamphlet circulated by one of the corporations similar to the one now under consideration, a corporation which received a charter through this House of Commons and is doing business. They have a very subtle way of advertising. They say that they make loans of $50 to $500 to men and their wives for paying bills, meeting emergencies, and taking advantage of opportunities. They also say that the corporation is incorporated by a special act of parliament of the Dominion of Canada and that its activities are closely supervised by the dominion superintendent of insurance, and they add:	"These facts guarantee the
strength, reliability and motives of the organization." They go on to give the cost to the borrower of some of the loans. The following table shows the actual cash received by the borrower on loans of different amounts.
Amount of loan $456.. 300. 240. 180. 120.
Actual amount of cash received by borrower .	$404	96.	263	00.	208	40.	153	80.	99	20
Taking into account the cost of negotiating the loan, the discount, and the rate of interest charged, the borrower pays in some cases almost forty per cent. In the first place, it is absolutely unsound; in the second place I consider that it is taking advantage of people who possibly because of the present depression find themselves in the position of being compelled to borrow from these corporations. I do not think this house or the people of this country are willing to grant such powers to any individuals or groups of individuals. People of this sort are called loan sharks in the United States where the people have had a great deal of experience with them. The people of France have also had considerable experience with these loan sharks quite recently. I refer to Stavisky, the man who committed suicide and brought about the collapse of the French government.
In this pamphlet the corporation goes on to say that banks are principally wholesalers of credit while this corporation is a retailer of cash. They add:

Since these small loans do not bring the banks a profit, they are forced to insist that they be well secured by negotiable collateral or acceptable endorsement. Banks do not accept as security the customer's chattels and wages-the only security many thousands of families have to offer.
I would point out in connection with their statement, "Banks do not accept as security... wages" that anyone who has had experience in municipal government knows that many of the municipalities have in effect regulations that should an employee's wages be garnisheed he is automatically discharged. I do not know of any better security that any corporation would desire for a loan than the borrower's fear of losing his employment under present conditions. They go on:
Many people of considerable means who might have bank credit by asking their friends to endorse for them, prefer to avoid these inconveniences even at a higher cost by coming to-
I will not give the name of this lending corporation, but they go on to say that the above-mentioned borrowers come to the lending corporation "when in need of sums of from $50 to $500." It will b'e observed how subtle is the approach made by this corporation with headquarters in this city, in their advertising to induce people to borrow from them. They say further:
To-day money is essential to the family. Gone are the days when the pioneer raised his own produce and traded it for everything from cloth and foodstuffs to household furnishings.
There is an ever-present need for money when debts pile up because of sickness, temporary unemployment, pay cuts, or when funds are needed for emergencies of birth, death, travel or to take advantage of opportunities in education or business.
I do not need to point out the unsoundness of the proposition and the unethical approach in an advertisement of this description. It puts me in mind of some of the advertisements for patent medicines which were scrutinized by the government to the south of us, advertisements setting out letters testifying to cures for certain diseases from people who on investigation were found to have died within six months of writing the letters.


Mr. COOTE:: Having got enough from the
testimonial to pay the funeral expenses.


Humphrey Mitchell: If there was not so
much tragedy in the situation it would be almost a comedy. The pamphlet goes on to give testimonials from various individuals:
A financial expert who had found it necessary to borrow-

Wawanesa, Mutual Insurance
He must have been some expert.
-to meet unexpected expenses wrote after the loan had been completed as follows:
"I would like to take this opportunity to say how much I have enjoyed doing business with your firm, and where it does not interfere with my own business, I will be pleased to recommend your company to any reputable party seeking financial assistance."
We are passing through troublous times when many in poor circumstances find themselves with obligations that they have incurred, but I do not think that the conditions justify our giving any organization the right to charge interest rates of from thirty to forty per cent. Whether we like it or not, if we pass this bill, the responsibility is ours. It is passing strange that in this period of depression so many applications are being made to parliament for charters for corporations of this description. I would like the members of this house to bear these observations in mind when they are deciding whether this bill shall become law. Frankly I do not believe these organizations are necessary in this countrj'.
I could speak at much further length, but as the hour is passing I will conclude by saying that I felt it my duty at least to point out to the house and to the people the subtle form of advertising that is being done by these loan companies in the pamphlets which they spread broadcast to catch people who possibly have not sufficient knowledge of the actual costs and charges involved in the borrowing that is done under the conditions laid down in the charters which companies of this kind get from the dominion government.


Right Hon. R. B. BENNETT (Prime Minister) :: Mr. Speaker, there is of course a duty that rests upon the government of the day to be responsible in varying degrees for the legislation enacted by the house. It is the view of the government that this bill should not be passed in its present form. In addition to that, I suggest to my hon. friend from Battle River (Mr. Spencer) that with the permission of the house he amend his amendment by striking out the words "not more than thirteen per cent" and substituting words that the bill be not now read the third time but be referred back with instructions to the committee on banking and commerce. While it is being considered there the government will decide whether or not it is advisable to enact legislation to provide that the companies which have already secured charters, as mentioned by the hon. member for East Hamilton (Mr. Mitchell), shall be subject to a general law to the effect that the rates which
they may receive, including all charges, shall not exceed a fixed percentage somewhat less than the sum mentioned by the hon. member for Battle River. If the amendment should be altered as I suggest, we could immediately dispose of it; if not, I suggest that some hon. gentleman adjourn the debate in order that an opportunity may be given to consider just what form the statute should take to meet all cases of this kind.


Henry Elvins Spencer: With the permission of the house, and on the suggestion of the Prime Minister (Mr. Bennett) I am quite willing that this bill should go back to the banking and commerce committee.


Pierre Édouard Blondin: With the unanimous consent of the bouse the amendment will be amended to read:
That the bill be not now read a third time but that it be referred to the select standing committee on banking and commerce.
Amendment as amended agreed to.



WAWANESA MUTUAL INSURANCE COMPANY

[Stage Direction]
Mr. W. W. KENNEDY (Winnipeg South Centre) moved that the house go into committee on Bill No. 29, respecting the Wawanesa Mutual Insurance Company.
Motion agreed to and the house went into committee, Mr. Lavergne in the chair.
On section 1-Incorporation.
Mr. KENNEDY (Winnipeg South Centre):: insurance on the mutual system but it also issues automobile policies as well as cash premium fire policies.
At the time of the incorporation of the company under dominion charter, automobile insurance was not thought of, although this was included in the powers of the act. Fire insurance, mainly on the mutual system, was the object in view. Consequently, provisions in the act as to membership were not coni sidered as closely as they might have been and were made somewhat wider than is desirable where other classes of policies, such as automobile insurance, are issued. The company eventually decided to issue automobile insurance on the cash plan and in order to preserve the mutual character of the company, even though it deals in other classes of insurance to some extent, it is deemed advisable to have the act amended so that membership will be limited to policyholders on the mutual system. This will correct a situation which is created by the present provision as to membership in the company and which is undersirable and prejudicial to the interests of the mutual policyholders who are and will remain to all intents and purposes the mainstay of the company. This provision is that each policyholder is entitled to one vote for each 81,000 of insurance carried. Under this provision anyone paying a premium on an automobile policy of approximately $80 can secure insurance for $100,000 public liability, 81,000 property damage, $1,000 collision damage and $1,000 fire and theft, making a total of 8103,000. This insurance would entitle him to 103 votes. For the same premium a fire insurance policyholder would have a covering of not more than $16,000 and would be entitled to only 16 votes. Under the above provision, cash premium policyholders who pay considerably less for premiums and who have no further liability have equal voting rights with the mutual policyholders who are contingently liable over and above annual assessments up to the full extent of their premium notes for losses during the term of their insurance. The company was essentially a mutual company and it was never the intention to extend membership to policyholders other than those on the mutual system. It would be entirely contrary to the purposes and objects of the company to do so.
There are no provisions covering this point in the dominion insurance act, but some of the provincial acts such as British Columbia, Manitoba and Ontario contain provisions governing mutual insurance and limiting mem-

bership in a mutual company to policyholders under the premium note plan. I would refer the committee to section 149 of the Manitoba act, chapter 6, 1932, to section 28 of the British Columbia Mutual Companies Act; and to section 263 of the Ontario act, chapter 218, revised statutes of Ontario, 1927. It is felt that this restriction is a proper one and necessary for the purpose of preserving the. *mutual character of the company and an amendment is therefore sought to the company's act of incorporation to provide for membership along the lines of the sections of the British Columbia, Ontario and Manitoba acts above referred to. The amendment proposed has been submitted to and approved by Mr. Finlayson and it follows the wording of the act incorporating the Commerce Mutual Fire Insurance Company, chapter 90, 17 George V.
Section 1 of the bill amends section 1 of the act and provides for the restriction of membership to those on the mutual system. Section 2 states that a director shall be a member on the mutual system. Sections 3 and 4 carry out the same idea. Section 3 states that each policyholder on the mutual system who is not in default shall be entitled to a vote and that any member who ceases to hold a valid policy on the mutual system shall thereupon cease to be a member. This bill has been passed unanimously by the committee on banking and commerce.


Mr. SANDERSON:: Does the company do business outside of Manitoba?


Mr. KENNEDY (Winnipeg) :: It has a dominion charter and it does business outside of Manitoba; it operates in Ontario.


James Layton Ralston: Are all policyholders now members, that is, are all holders of automobile insurance policies members as well as those who pay cash premiums?


Donald MacBeth Kennedy: Under the act as it stands, anyone who has a policy is a member of the company.


James Layton Ralston: Section 4, which requires a two-thirds vote of the members, means the votes of the present members, in order to bring the act into force.


Donald MacBeth Kennedy: Section 4, to which the hon. gentleman refers, provides:
This act shall come into force on the date to be specified by the superintendent of insurance in a notice in the Canada Gazette, and

Thousand Islands Bridge
such notice shall not be given _ until this act has been approved by a resolution adopted by at least two-thirds of the votes of the members of the company present or represented by proxy. . . .
That would refer to all policyholders of the company.


James Layton Ralston: The present members.


Donald MacBeth Kennedy: Yes.


Frederick George Sanderson: Was the company's original charter a dominion charter?


Donald MacBeth Kennedy: It was a provincial charter obtained in 1895. The present charter, which is dominion, was obtained by special act in 1929, taking over all powers of the former company.


Frederick George Sanderson: When did this company start to do business in Ontario?


Donald MacBeth Kennedy: I have not the information at hand.


Frederick George Sanderson: Apart from Manitoba and Ontario, in what other provinces do they do business?


Richard Bedford Bennett: All the western provinces.


Donald MacBeth Kennedy: I understand it does business throughout Canada; it is widely known.


Mr. McKENZIE (Assiniboia):: In section 1, giving the list of names, the name Manstone in line 12 should be Vanstone. I happen to know something about the company and I think that name as it appears in the bill is misspelled. The insurance manager is Mr. Vanstone.


John Livingstone Brown: Vanstone is the name.


Donald MacBeth Kennedy: If the hon. member knows that it should be Vanstone it should be changed.


John Livingstone Brown: There is no question that Vanstone has been the manager of the company a good many years.


Donald MacBeth Kennedy: That is the gentleman referred to.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Sections 2, 3 and 4 agreed to.
Bill reported, read the third time and passed.

[Stage Direction]
On the order:
House in committee on Bill No. 43, to incorporate Personal Finance Corporation.-Mr. Hackett.
Richard Bedford Bennett: Stand.


Mr. POWER:: When this bill came before the committee yesterday an amendment was moved by the hon. member for Sherbrooke to the effect that the life of these companies should be limited to five years or ten years in the same manner as the bank charters, which are renewed every ten years. The Minister of Finance, who was in the committee, said he thought the matter was worthy of consideration by the government, provided that the government could also as a matter of policy limit or restrict the existence of companies previously incorporated, because it would be obviously unfair to treat these new corporations which are now being brought into existence by parliament differently from others which had received authority to perform similar functions. I would ask the Minister of Finance, when the general policy of the government with respect to these loan corporations is being discussed, as the Prime Minister promised us a few moment ago it would be discussed, to call to the mind of his colleagues the fact that it might be in the public interest if the life of these loan companies were limited in a similar manner to the life of the banks.


Edgar Nelson Rhodes: My hon. friend will recall that in the committee I said that in the first instance I would confer with the superintendent of insurance and following that conference would take the matter up with my colleagues. Otherwise my hon. friend is accurate in stating the situation, and I shall be glad as opportunity presents itself to consider his suggestion.
Bill stands.



THOUSAND ISLANDS BRIDGE COMPANY

[Stage Direction]
The house in committee on Bill No. 27, to incorporate Thousand Islands Bridge Company-Mr. Maloney-Mr. LaVergne in the chair.
On section 1-Incorporation.
Henry Elvins Spencer: What is the number of the bill?


The CHAIRMAN:: This bill is No. 27. It is not on the order paper, but a motion was made, granted by unanimous consent, to put it on the order paper.


[Stage Direction]
Section agreed to.
Sections 2 to 19 inclusive agreed to.
On section 20-Employment of labour.
Mr. STEWART (Edmonton):: May I inquire of the sponsor of the bill whether the



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rate of tolls to be charged on this bridge will be the same as those in effect elsewhere in the province? Who is in control of the tolls?


Martin James Maloney: I understand the toll rates will come under and be subject to the approval of the railway commission.


[Stage Direction]
Section agreed to.
Section 21 agreed to.
Bill reported, read the third time and passed.


[Stage Direction]
The house resumed consideration in committee of Bill No. 55, to provide for the deduction from compensation in the public service-Mr. Rhodes-Mr. MacDonald (Cape Breton South) in the chair.
On section 2-Definitions.
Peter Heenan: There is one minister for whom I would almost let everything he proposes go through because when he proposes anything in the house he does so with such a gracious smile and I get so few smiles from any other minister of the present government that I would do almost anything for the Minister of Finance. But I listened to him with interest just before six o'clock and I am sorry that he attempted to read a lecture to some members on this side of the house-


Edgar Nelson Rhodes: Oh, no.


Peter Heenan: -especially the two members for Ottawa, because, forsooth, they endeavoured to advance an argument why many of their constituents ought not to have their wages or salaries reduced. In closing the debate on the second reading, the minister, if I got his words correctly, said in effeeb-and there may be something in his argument- that this country is strewn with the wreckage of public expenditures made, as I believe he suggested, with public acclaim. I am inclined to agree with him that a great deal of public expenditure has been made in Canada with the consent and approval of the people generally. I think the minister also added words to the effect that the poor souls did not know at the time they were clamouring for those expenditures that some day they would have to pay the bill. I thought it was very strange for a minister of this government to make such a statement, because I am satisfied no 
other party that has ever been elected to power in this country has made so many promises as hon. gentlemen opposite have made in regard to public expenditures. And now when their policies have all failed, and brought the country to the verge of financial ruin, in order to make up part of the loss they take it out of the poor public servant. I can recall the promises made by the present Prime Minister and his candidates-I do not know whether the present Minister of Finance joined with them, for he was not a candidate; he was premier of a province at the time, but if he was anything like the then premier of Ontario, Hon. Howard Ferguson, he would have made plenty, because Mr. Ferguson not only proclaimed and repeated throughout Ontario the promises made by the leader of the Conservative party but added a good many others on his own account. Then of course he dug himself into a good job and left his colleagues in Ontario to sink, but unfortunately the people of Ontario had to sink with them.


Frederick George Sanderson: But he is still their
adviser.


Peter Heenan: At. any rate when on that occasion the present Prime Minister and his colleagues went through the country they knew the financial conditions that prevailed; they knew there was a world depression-if they did not they had no right to seek election to office-and it was just one more mistake the public made. But notwithstanding their knowledge of the conditions they went out clamouring for office, promising one thing after another-a national system of old age pensions paid one hundred per cent from the federal treasury; a national highway paid one hundred per cent from the federal treasury; technical education; a technical school in every little hamlet-and by the way in order to hoodwink the people they did introduce a measure in 1231 providing for grants for technical education but refused to pay in accordance with it

public works galore, in every part of the country-


Mr. BEALTBIEN:: Mafeking cut-off!


Peter Heenan: Do not let us talk about
railroads, because if this government is in office much longer we shall not need even tramways to take the goods out of the country. And what promises the Prime Minister made to the public servants themselves in Ottawa!
I read some of the Prime Minister's speeches and I heard him over the radio the night before the election. There is no use repeating

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here what he promised the civil servants of the country. That is why I was astounded to hear the Minister of Finance read a lecture to . the two members for Ottawa this afternoon because they were doing what they could to see that the public servants of this country got a square deal. Now I am not going to enter into any lengthy address, I am sure my hon. friends will know that-[DOT]


An hon. MEMBER:: Thank you.


Peter Heenan: I know' my friends like to hear me, but I intend to deny them that pleasure. I am going to reserve my further criticism of this measure, because I said last session and the session before all I could say on the subject. I agree with the hon. member for East Hamilton (Mr. Mitchell) in practically everything he said, that the cutting dowm of wages and salaries only sinks the country into the mire that much deeper. Whether they are paid from the public treasury- or anywhere else, the more money you take out of circulation the longer the country will be in getting back to prosperity. The point I want to make now- is that the government ought to be an ideal employer; the government should take the lead. Here is a government that promised higher wages to the workers, higher prices to the farmers, yet was the first organization in the dominion to reduce wages. The Prime Minister made no bones about it; you have to take off your hat to him for something. When this bill was introduced he said someone had to lead the way, someone had to show an example in Canada. Unfortunately business men and employers of labour all over Canada folio-wed his lead, followed the example of the government of Canada, and cut down wages and salaries to such an extent that in some cases they are not considered wages at all. In fact the Ontario government say that the money they are paying to men on the highways is not wages, that it is just a little pittance to enable them to buy a plug of tobacco once in a while. All that has resulted from the example of this government.
I want to hear the interpretation put on some of these clauses to see whether the public servants are going to get anything out of the measure. Out in the corridors I have heard several interpretations, though of course the Prime Minister is not responsible for them. I even heard that sessional employees, for instance the stenographers, are not to get the benefit of this restoration because they are paid by the day. Yet this bill says that those receiving not more than $1,000 a year are 74726-166 ^
not to be reduced. I understand that the sessional stenographers receive about $500, yet they are not to get the benefit of this because forsooth it is argued-I hope the finance minister does not argue that way-that they receive $4.50 or $5 a day and therefore their salaries calculated on a yearly basis at that rate exceed $1,000. If that argument is applied
1	think the minister should work it the other way too, and should guarantee these public servants at least $1,000 a year. I think that is fair; he cannot have it both ways.
I shall reserve my further remarks until we get the minister's interpretation of the bill.


Edgar Nelson Rhodes: As I understand it, the immediate subject under discussion is section
2	of the bill. After the exhaustive and illuminating analysis of the section made by my hon. friend (Mr. Heenan) there scarcely remains anything for me to say. However my immediate occasion for rising is to take exception to the attitude of the hon. member for Kenora-Rainy River in suggesting that though it is competent, to use his own expression for the members for Ottawa to "put up an argument" with respect to their views concerning this measure, it is not competent for the Minister of Finance to put up an argument without being accused of reading a lecture to the hon. members for Ottawa. Now, sir, surely my hon. friend, who ought to be a democrat, should not in a free parliament deny even to one so humble as a minister of the crown the right to give expression to a point of view without being taken to task as having lectured hon. gentlemen opposite. If there was anything either in my voice or the manner or matter of my remarks which would lead my hon. friend to think I was attempting in a superior way to lecture hon. gentlemen opposite, I beg to assure him that such was far from my mind. All I can say is that if in the circumstances hon. gentlemen felt they were entitled to receive a lecture, then they must assume the responsibility, and I hope they will not blame me.
My hon. friend at the end of his observations was good enough to put a succinct question to me as to the meaning of this bill. I shall be glad to answer him or any other hon. gentleman to the best of my ability with respect to any question that arises. I wish to assure my hon. friend that the bill provides in clear terms that the compensation of any employee in the public service-and the definition is given in this section; it is a very wide one, namely:
"Compensation" means the salaries, wages, commissions, fees, or other remuneration,
Civil Service-Salary Deduction

authorized to be paid by statute, or regulation, or other authority, and includes sessional indemnities and allowances, in cash or in kind, forming part of the remuneration attached to an office.
Putting it in as plain language as I have at my command, I wish to say that the bill provides that the compensation within the year of anyone in the public service shall not by virtue of this act be less than $1,000 per year. Sessional employees who are in receipt of wages of $5 a day projected over a given number of days would be placed in a class beyond the range of $1,000. But the length of time they actually serve, which depends upon the length of the session, will determine whether they will or will not within the period of a year receive $1,000. And if at the end of the session those employees do not in the aggregate for the year receive a salary of $1,000 they will be subject to no deduction. Inevitably there will be cases where immediate provision cannot be made, because it will not be known until later in the year whether an employee will fall within one class or the other. I would refer my hon. friend and the committee to subsection (c) of section 6, which is very wide in its terms and reads: The treasury board may make regulations- (c) For any other purpose deemed necessary to give effect to this act.
I can assure my hon. friend and the committee that the attitude of the treasury board will be to make regulations which shall construe this act in the widest possible terms in favour of the public servant, with the object of carrying out the express purpose of the bill as provided more specifically in section 3, that the compensation within the year of any public servant shall not, by virtue of any provisions of this act or of its operation, fall below the sum of $1,000.


Mr. VENIOT:: Was that the condition in the old act?


Edgar Nelson Rhodes: No.


John Livingstone Brown: It has often been in my mind to dissent from a view frequently expressed in this house, but hitherto I have refrained. That view is based seemingly on the belief that all industry exists for the purpose of paying wages-that we run our railways to pay wages; that we carry on our industry to pay wages, and that our farms are operated to pay wages. I wish to dissent most emphatically from that view. This afternoon the contrary view was expressed by the hon. members for Comox-Alberni and Moose Jaw. Wages or salaries are simply one of the factors which enter into the expense of carrying on industry, whether it be private industry or
[Mr. Rhodes 1
government business. The idea that industry can be brought back to a prosperous condition by paying high wages is, to my mind, beginning at the wrong end. It is putting the cart before the horse. I should be only too happy if Canada were in a position to pay high wages. But let us consider the position on the farm. I know perfectly well that we cannot bring farming back to a prosperous condition by beginning to pay higher wages. Unfortunately, and much against our will on the farm we have had to reduce wages. The most prosperous time on the farm was the time when we were paying high wages; those wages were demanded of us when times were good. Certainly we would be glad to go back to those days. What applies to the farm I believe applies with equal force to other industries and to matters of government. I agree with the statement made this afternoon by the Minister of Finance, namely that to pay high wages to one class in the community, thereby increasing its purchasing power, we must take it out of another class by taxation. I know that idea is combated by the hon. member for Kenora-Rainy River and other hon. members at the end of the chamber. My firm conviction, however, is that just as farming cannot be made prosperous by beginning to pay high wages, neither can any other industry.
This afternoon when we were discussing the motion for second reading I called attention to the fact that I thought one section of the public service was being unduly discriminated against in the matter of salary deduction. My point was taken up by the former Postmaster General, a man thoroughly familiar with the whole situation. He stated the case very much better than I could have hoped to do, because in these matters I have not the knowledge possessed by the former minister. Let me, however, state the facts about one case which has come to my attention-I am not going to say it is an accurate statement of facts, but I give them as they are given to me. Certainly under such circumstances it would seem that revenue postmasters are being treated with some unfairness. For instance the person whose case I now put before the committee has stated that the postmaster's gross salary is $2,000 and that after a ten per cent deduction amounting to $200 the net amount received is $1,800. From that amount this man has to pay an assistant's salary of $500, fuel expenses $150, lighting $60, caretaking and insurance $100, reducing the net income to $990. If that is anything like a correct statement of the facts it will be perfectly plain to all hon. members that a ten per cent deduction from the gross

Civil Service-Salary Deduction
receipts of this man has the result of subjecting him to a much higher deduction than that taken from any other class of public employees.
I am glad that in this measure the government has introduced the principle of setting a minimum from which there shall be no deduction. It will be remembered that when action was taken by the government two years ago to reduce the salaries, the contention was strongly urged that that system should be adopted. To some extent that principle is now recognized. So that, for my part, while I do not like to lose that extra $400 which hon. members would like to have received all these years, I cannot protest against the general purpose the government has had in view in adopting this legislation, much as we may dislike the effect it has had upon our indemnities.


Wilfred Hanbury: I am afraid I cannot
agree with the hon. member who has just taken his seat (Mr. Brown), that civil servants may be receiving either more than or as much as they are entitled to receive. I believe that in the civil servants of Canada we have a body of men and women who are entitled to anything that we can afford to pay them, within reason. I recognize the necessity of the government's attempting to balance the budget. But based on the very optimistic remarks made by the Minister of Finance upon the presentation of his budget, and particularly upon certain remarks made by the Minister of Railways and the Minister of Trade and Commerce before the electors of South Oxford, we are naturally entitled to come to the conclusion that conditions in Canada are on the up grade. I am one who believes that we are on the up grade. I believe also that the main responsibility for giving added impetus to the present trend rests with the government. The government have recognized this to some extent in the clause exempting from the cut the salaries of $1,000 and under. I think they should have gone much further. My own view is that they should have returned the whole ten per cent deduction. That would have done much to give encouragement to every class of the community throughout the country. I believe also that it is in the interests of the Canadian people that the government should return as soon as possible-it should have been done before now-the statutory increases which they have withheld and are withholding from the civil service. The government should also return to the system of giving the civil service the promotions which they have earned.
The main basis of my remarks, Mr. Chairman, is not that the civil service is overpaid or underpaid. I think the government have the responsibility to go as far as they possibly can in encouraging industry throughout Canada to-day and in encouraging people all over this dominion to spend the money they are withholding from the market.
With reference to the high wages referred to by my hon. friend who has just preceded me, I would point out to him that it is not a question of high wages or low wages; it is a question of relative purchasing power. We all recognize that the farmers of Canada today have a low purchasing power. We also recognize that the farmers of Canada to-day, particularly the wheat growers of the west, have received government aid on many occasions. I can speak perhaps for some of the industries that have not received a five cent bonus on wheat and other assistance. The lumber industry has not received the encouragement that even the grain growing industry has received in Canada, and yet the lumbering industry is quite prepared to shoulder its full share, I am sure, if the government will give that encouragement to industry which it should in the present circumstances.
I am again going to suggest to the minister that in my opinion there is a grave responsibility on the part of the government at this particular time to give added impetus to industry by seriously considering returning to the civil service of Canada the deduction which is being continued by this bill.


Mr. MANION:: May I ask my hon. friend a question? Is the lumber industry paying as high wages in the bush, for example, as it was four or five years ago?


Wilfred Hanbury: In comparison with five years ago there is a difference, but what the actual difference is I cannot say offhand.


Robert James Manion: A difference downward?


Wilfred Hanbury: Downward. I would
point out to my hon. friend in that connection that in British Columbia we have only recently had reenacted the minimum wage law. Prior to the enactment of that law the conditions in the lumber industry in British Columbia, arising out of the struggle for existence, permitted the operators to pay only a wage much below what should be paid, but through some development in the industry we have recently enacted a minimum wage law which provides the same minimum wage that was effective five years ago. Whether the

Civil Service-Salary Deduction
more efficient workmen or the higher branches of the workmen in the woods will receive the same relative increase as the minimum wage represents is something that has not yet been demonstrated.


Robert James Manion: Then my hon. friend's
industry is not doing to-day what he advocates we should do in connection with the civil service.


Wilfred Hanbury: The industry in British
Columbia has just decided to do that very thing. They are paying a minimum wage equal to the minimum wage that was being paid five years ago, notwithstanding that the cost of living is lower.


Robert James Manion: A minimum wage but not a maximum, my hon. friend said.


Wilfred Hanbury: It is a minimum wage
we are discussing, with ten per cent taken off.


Robert James Manion: I do not admit it is a
minimum wage.


Mr. GARLAND (Carleton):: Last session
when the salary deduction measure was before the house I made a plea for the lower grade civil servants. I am thankful that the government in their wisdom have seen fit to restore the deduction to civil servants receiving salaries less than $1,000. It might have been better if the minimum had been placed a little higher, but the decision must be left to hon. gentlemen on the treasury benches, who are in a better position than the ordinary member to know the actual financial condition of the country.
I was glad to hear the explanation that was given by the Minister of Finance with regard to sessional labour. Another class which should be given the same consideration is the labourers, teamsters and such who are working, for example, at the experimental farms. From the interpretation given tonight by the minister I should judge that they are to be given the same treatment.
I realize quite well that in the constituency which I have the honour to represent there are mechanics and labourers who have had a much larger reduction in their income than ten per cent. In fact, many of them are still out of work. The farmers in my constituency and the dairymen who live closer to Ottawa are selling milk from their farms to the distributor for something like 76 cents per hundred pounds, which is two cents for milk that is being delivered to the consumer at ten cents a quart. I have no doubt, however, that they will be looked after by another committee of this house that is now sitting.
[Mr. Hanbury.l
I have sympathy with the civil servant who is receiving a little more than the $1,000 and does not share in the restoration of salary provided for the lower paid employees. I have sympathy also for others who are working in this city, the street railway men, for example, who received a reduction of ten per cent in their wages which up to the present has not been restored, and whose working conditions were changed so that one man now runs an electric car which two men ran some years ago. That means a further reduction for them. In addition they have to take one day off every two weeks, which means a still further reduction. I have sympathy with these people as well as with the civil service, and I wonder if there are not other members who feel the same way. I know the sympathy that some members have for the civil service, and how they plead for them at a time like this almost with tears in their eyes, but do not mind getting a summons out for a man who drives his neighbour to work in his automobile instead of letting him pay street car fare.
I wish to congratulate the government on making a move in the right direction. I firmly and honestly believe, after the statement made by the Minister of Finance tonight, that when this time comes around next year the salary cut will be completely restored and everybody will be happy. I hope that that will apply to other concerns in this city at the same time.


William Duff: We are delighted to have a comparison made between conditions in private enterprise in the city of Ottawa and in the civil service, but I do not see, Mr. Chairman, what it has to do with this bill. If my hon. friend from Carleton has any grievance against any member of this house or against any private individual in Ottawa I suggest that he go down Sparks street at nine o'clock to-morrow morning and get a crowd around him and fight it out there. This is not the place. We are not interested.
My views with regard to the civil service salary deduction are very well known. Unlike the hon. member for Carleton I have always opposed this ten per cent deduction. Although I live a thousand miles away from Ottawa and from my hon. friend's constituents, a number of whom I believe, are civil servants, I have always been against this deduction of ten per cent. I believed from the first that it was not in the best interests of the country to make this deduction. But of course I understand my hon. friend's position;

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as a supporter of the government he must get up and try to express views in line with what his government and his party think.
I do not think for one moment that the country has gained at all by making this ten per cent deduction. I said two years ago, and again last year, that the very fact that the government was the first employer in this country to reduce wages by ten per cent would mean, and it has meant, that tens of millions of dollars would be taken out of the pockets of the workmen of this country. The result is that the -whole country suffers.
The Minister of Railways asked the hon. member for Vancouver-Burrard whether it was not a fact that the wages of the lumbermen had been reduced in the last two or three years. The minister seems to forget that there is quite a difference between the wages paid by private concerns and those paid by the government. Let me say to the minister that every civil servant in this country has a contract with the government. The ordinary' lumberman in the bush or the man employed by a private concern has no contract, but every civil servant has a contract when he accepts a position. Advertisements are issued, applications are asked for, claims are considered by the civil service commission or the government, and when a decision is arrived at, the man or woman has a contract. He or she has a contract just the same as I have. The people of this country promised to pay me S4,000 per year to represent them in this parliament. I have always contended that I am entitled to that $4,000 and that this government had no right to reduce my sessional indemnity' to $3,600.
Mr. McINTO-SH: Sue the government.


William Duff: They would not issue a fiat. Let me tell the minister that the civil servant is in an entirely different position from that of the man in the bush or the man working in a private enterprise. Civil servants, whether they be stenographers, elevator men, charwomen, lighthouse keepers or anything else, have a solemn contract with the government. The Prime Minister often speaks of the sanctity of contracts. I say to the Minister of Railways: Go and consult the Prime Minister and ask him where is the sanctity of contracts in this bill or in those of the last two years. Subsection (b) of section 2 defines a member of the public service as follows:
"Member of the public service of Canada" means every officer, clerk and employee in any branch or portion of the public service of Canada, to whom any compensation is paid, *either directly or indirectly, out of the revenue
of His Majesty in respect of his government of Canada, other than the Governor General of Canada, the lieutenant governors of the several provinces of Canada, the members of the judiciary, and the members of the military, naval and air forces of Canada, and the Royal Canadian Mounted Police, and includes members of the Senate and House of Commons of Canada.
I should like to know if it is intended that the governor general, the lieutenant governors, the members of the judiciary and the members of the military', naval and air forces and the Royal Canadian Mounted Police are to receive their full salaries?


Edgar Nelson Rhodes: I am sure we must all pay tribute to the consistency of the hon. member for Antigonsh-Guysborough throughout the years that we have had to consider such bills as the one now under consideration. He has left no doubt as to his attitude with respect to this and the measures of previous years. Whether or not we agree with him, we must give him credit for making his position so clear. It may be that when one enters the public service he has a contract, but I do not feel myself in a position to argue as to the legal position of that contract. I think the overriding question of the public need is the consideration which has governed. The people of the mother country have as keen an appreciation of the sanctity of contracts as any people on earth, and yet under precisely the same conditions, Great Britain reduced the salaries of some of her higher paid members of the judiciary by as much as twenty per cent, of her cabinet ministers by a like amount, of her school teachers by fifteen per cent and of the members in the other services by substantial percentages. Whether or not hon. gentlemen are in agreement with us, we have assumed it to be in the public interest to make this deduction in order to meet an emergent situation.
With respect to the specific question asked by my hon. friend, I may say that ever since the first salary deduction act the Governor General has voluntarily sent his cheque regularly for ten per cent of the full amount of his salary. The members of the judiciary and of the naval and, military forces are not touched by this bill, but there is another bill touching their salaries which will bring about a similar result. This bill makes a straight salary deduction, but a companion bill which will follow contains a provision for a special income tax to amount to ten per cent of the salaries of these individuals. It will be in terms similar to the bill of last year, and it will cover all those in the list except the

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lieutenant governors. For reasons which I need not at this moment discuss at length, it was felt that as representatives of His Majesty they should not be placed in the same position as those who had been cut.


John Livingstone Brown: I have a matter which I should like to bring to the attention of the government. This may not be the proper time to do it and, if not, I should be glad to be informed as to when would be the proper time. In some parts of the country there are government institutions such as experimental farms. Those employed on these farms are paid by the dominion government. In some cases they live in houses which are the property of the government and that property does not pay any tax. This imposes a very heavy burden upon the school systems. The matter was brought to my attention a month or so ago when it was pointed out that a large number of employees of the government in a certain place were living on government property. In that same place a large number of children were attending the public school, imposing a heavy burden upon the people of that community, many of them very poor, yet having to pay taxes out of their very small incomes to support the schools at which the children of government employees were receiving education, without cost to themselves or the government. If it is at all possible I suggest that in all such cases the government should see that a school tax in some form be paid so as to ease the burden of taxpayers in such communities. That is the situation that prevails in some of the provinces, although I am told to-night that there are some provinces in which an arrangement is made for the payment of some special tax. I suggest that in all cases where employees of the government live on property on which no taxes are paid and enjoy the benefit of schools the government should impose an obligation on those receiving remuneration to contribute to the school tax.


Edgar Nelson Rhodes: I do not take exception in the main to the attitude of my hon. friend, but I must point out to him that he raises at once the larger question as to how far crown property ought to be exempt from taxation. I do not suppose it would do much good to enter into a discussion of that phase of the matter; that is a recognized principle and we need not go into the reasons for it. But where there are employees living on crown property under such conditions as the hon. member has depicted, the right to live in those houses forms a portion of the compensation, and the amount of cash which the 
employee receives is diminished to the extent of the allowance made for his so living. In the main that compensation is fixed by the civil service commission for various classes of the public service living on government property throughout the country.


Peter John Veniot: That would not exempt the individual living in the house.


Edgar Nelson Rhodes: As my hon. friend rightly says, there is no good reason why such a person whose children enjoy the privileges of the public school should not be called upon to pay his share of the school rates the same as other people living in the community. Whether there is any governmental action which can be taken or is required in the circumstances, I am not in a position at the moment to say, because so far as I am concerned the matter has never been raised before. But from the point of view of the community, in equity and in simple justice such an employee ought to pay his fair share of the school rates.


Edgar-Rodolphe-Eugène Chevrier: I accept very gladly the explanation which the Minister of Finance has made with reference to the various staffs of the house. The information which I received may have been right at the time, but a different construction has been placed upon it, and I congratulate the minister on this extension of generosity. I never took the words of the hon. gentleman to mean any lecture to me this afternoon; he would have had to speak in a very much different tone to lead me to believe that he was trying to lecture me. I like his cold steel; he is a gallant foe; I have had many a tiff with him, but I have managed to come out without being either too much scared or too much scarred.
The hon. member for Lisgar has stated the situation from his point of view, but I would say to him and particularly to the hon. member for Moose Jaw-and this applies to a slight degree to the Minister of Finance: O consistency, what crimes have been committed in thy name! It happens that in the constituency of Lisgar there are a certain number of rural postmasters and therefore there is a duty incumbent, and properly so, on the distinguished member for Lisgar, to look after their particular interests. It happens that in the city of Ottawa there is but one postmaster, but there are hundreds of letter carriers. Well, why should not what is good for the rural postmasters be also good for the city letter carriers? It happens that in Ottawa there are twenty or twenty-five per cent of the classified civil servants of the dominion.

Civil Sertrice-Salary Deduction
If instead of having that percentage of civil servants in Ottawa we had so many farmers or brickmakers or textile workers or manufacturers, then I doubt very much that as many hon. members of this house who are prone to hit upon, this city and upon the civil servants would take the same attitude. Why not be consistent, therefore? This city has a population of 136,000 and of that number there may be 10,000 employed in some line of industry, be it match making or soap making or forging or in the civil service or as grocers, and if these particular interests are not in conflict with the general interest, then surely there is a duty incumbent on those whose honour and privilege it is to represent these people in this house to see that their particular interests are properly safeguarded, provided that the general interest of others is not jeopardized. That is the stand I have consistently taken.
The hon. member for Moose Jaw said that the city of Ottawa does not know anything about depression. Well, I am not here to say unpleasant things about the city of Ottawa or of any other city. I am not here to expose the evils or those charitable cases that are being looked after. This is not the time and place, and it is not my particular duty to do so in this house. But I would point out that in Ottawa there has been a tremendous amount of direct relief expended through the government, by private parties, by social and religious organizations!, and voluntarily by the civil servants to a considerable proportion of their salaries, though they have been cut ten per cent. True, it is not quite as apparent around Ottawa that there is as much depression or as much hardship as one might see elsewhere, but let me say that though the wound may be concealed it does not mean that it is not as painful as one that is exposed, and very often there is much more bitterness added in trying to conceal it than to show it.
The hon. member for Moose Jaw also said that so long as the western people suffered, he did not want the cut to be restored. Well, I have more consideration for the western farmer and more sympathy for the business people of the rest of the dominion than some members have for a certain portion of the community. I deplore their misery; I deplore the misery of the farmer, of the industrial wage earner, but I ask: How much has the $8,700,000 that was taken away from the civil servants helped those poor people, and also how much has the $2,500,000 from Ottawa helped to alleviate their suffering? I am sure it must have mitigated it to a certain extent
if one considers how some hon. members desire that the cut be not returned. I think I have some reason to say for the city of Ottawa: Hands off the civil service.
The Minister of Finance this afternoon said that if we transfer the $8,700,000 from the pockets of the taxpayer, that is simply a matter of bookkeeping. I pointed out before in that connection that the government was able to collect $8,000,000 or $9,000,000 by simply moving the decimal point in the books and that it did not cost one-hundredth of one per cent to collect that amount. There never before has been any collection agency, any bond selling or issuing of a loan for the government that has cost it so little. It is quite proper for hon. members to take this attitude if they think it is going to benefit themselves, but let me put the matter in this way: If the civil service not only of Ottawa but of Canada as a whole is to be taxed in that manner to the extent of ten per cent and if that sum of $8,700,000 is applied on the public debt or to help to balance the budget, then why in the name of goodness and of justice did the large industrial corporations when they made the deductions they did from the wages of their employees, not take that money to the Minister of Finance and say: Here is our fair share; just as the civil service have paid their portion into your hands, so we pay ours that you may be helped in solving your financial difficulties, in balancing the budget and in alleviating the suffering that exists? But they did not do that, and the minister knows well that none of all the wage deductions that have been made by private enterprise has found its way into the coffers of the state to help relieve his financial troubles. But if that course had been followed; if the money taken from those whose salaries were cut had been paid into the coffers of the state, then of course the civil servants of Canada would feel somewhat relieved in knowing that they were not the only ones that were being mulct to this extent.
The Minister of Finance said lastly that the wages and salaries of the civil servants must come out of the pockets of the taxpayer, but one would think the civil servant simply drew his salary and did no work-


Edgar Nelson Rhodes: Oh, no.


Edgar-Rodolphe-Eugène Chevrier: I know the minister does not mean that; it is absolutely inconsistent with the words of eulogy which he uttered, and quite properly, with respect to the civil service this afternoon, which he knows they deserve. That is what the minister says, but

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others who are not in his position, and who do not understand the situation as he does, put a different construction on the matter, and it is not fair. When the civil service of Canada works, it works for the benefit of the state. Civil servants are servants of the state; they serve not only Ottawa but the whole of Canada when they earn their wages, and there ought to be a feeling of pride on the part of everyone, whether from the eastern or the western provinces, or from the north or the south, to know that while goverments come and governments go, while one ministry falls and another takes its place, the civil service of Canada carries on its work just the same. The backbone of the Canadian public service to-day is the presence in it of men of long years of experience, men who have served loyally under Grit and Tory, Liberal and Conservative administrations. Therefore these people are entitled, for the sole reason that they have served the state loyally, to be so treated any time a question concerning them is brought up.
Having said that much, I have only one question to ask the minister so that he may reply when he speaks again. He said that some 18.000 would be affected. Some days ago I placed a question on the order paper, but it was turned, and quite properly, into a return. I do not know that I shall get the answer in time, and I should like to ask whether the minister can inform me as to the units that go to make the total. I should like to know how the 18.000 are made up, and what amount will be paid to each.


Edgar Nelson Rhodes: May I at once say to the senior member for Ottawa that I do not take exception to his attitude on this question; on the contrary I commend him for championing as a representative of Ottawa the cause of a large number of those who are his constituents. He is doing only the right and proper thing as a representative who has in mind the interests of those who sent him to parliament. But I do object very seriously to his placing in my mouth words which I never uttered, and drawing therefrom inferences which cannot properly be drawn from the words which I did use. When I said that the civil servants are paid out of the pockets of the taxpayers of Canada I did not for one moment raise the question of the propriety of that being so; on the contrary,
I am the first to concede to my hon. friend that I know many, many in the civil service who, even if they had their full salary restored, would still be earning more than they

were receiving. There are many in the service who are underpaid even at their full salary. At the same time there are some civil servants who would be overpaid if they got S100 a year; they are, however, in the great minority. For the civil service at large I have nothing but the greatest admiration, and I admit at once that by and large they earn their salaries. If my hon. friend were fair- I am not suggesting for a moment he intended to be unfair, but he was-he would have acknowledged that I did not use the argument in the connection he suggested. The hon. member for Kindersley had said that if we restored the salaries it would have increased the purchasing power of the civil servants by $7.8!X).COO a year. What I said was that the civil servants were paid out of the pockets of the taxpayers and that all the restoration of salary would do, so far as purchasing power was concerned, would be to transfer it from the taxpayer, whose purchasing power would be that much less, to the civil servant, whose purchasing power would be that much more, and that at the end we would be no further ahead than when we started. That was what I had in mind when I made the remark that the civil servants were paid out of the pockets of the taxpayers.
With respect to my hon. friend's direct question, the officials of the department tell me that to make an exact allocation of the number affected in the city of Ottawa would take a very long time, because it means the conning of some sixty thousand names. The best estimate I can secure from those most versed in civil service affairs in Ottawa is that it wall affect somewhere between fifteen hundred and two thousand individuals in Ottawm.


Edgar-Rodolphe-Eugène Chevrier: Could some proportion be given as between classified positions and unclassified?


Edgar Nelson Rhodes: That is of the total
eighteen thousand?


Edgar-Rodolphe-Eugène Chevrier: No, of the number in
Ottawa.


Edgar Nelson Rhodes: I am advised that it is impossible to give the information unless the method I suggested a moment ago were followed. But I am advised that of the total number of employees in the public service comprised in this number, some thirty-three thousand, more than half, are in the classified service. While of course it would be impossible to apply that same proportion to those who are under the $1,000 rate, because

Civil Service-Salary Deduction
the chances are that the greater number would be in the class above $1,000, my hon. friend, whose knowledge of the civil service is probably more intimate than that of most persons outside of. the civil service itself, will be able perhaps to make some rough deduction until such time as we can get a more accurate figure.
Mr. MaeINNIS:	I wish to thank the
minister for the assurance he gave a few minutes ago that those civil servants who are not getting over $1,000 a year, regardless of whether or not they are full time employees, will not be subject to the deduction. That will be a welcome assurance to many civil servants.
The hon. member for Lisgar said that the purpose of industry is not the payment of wages. But he stopped there and did not tell us what the purpose of industry is, so we are no wiser than before. In my opinion the purpose of industry is to produce the things that the community needs, and the things so produced are distributed in part through the payment of wages. I know very well that the owners of industry regret every cent they have to pay in wages, but I also know, whether they do or not, that if they did not pay any wages at all their condition would be much worse even than it is now. There is no possible way of keeping industry going unless we provide the means of distributing the product. It is being distributed to-day largely through salaries and wages. What has happened is that our ability to produce has increased and is increasing every day, and as it increases we are reducing our ability to distribute the product. Because of that the economic condition of the people becomes more and more the concern of government. We have noticed that in the last few years, in the extent to which the government has had to take steps to relieve the effects of the inability of industry to distribute its own product. If wages were reduced still more the position of the farmer would be worse, because he would be still less able to sell what he produces. Therefore I say it is of real concern to the government to see that the means of distribution of goods and services produced in the country are maintained. For that reason the government should make provision that those in its own service shall be adequately recompensed, so as to help relieve the depression in industry. We find that in the United States the depression was raised only when they took steps to raise wages. In Great Britain they had to do the same thing,
and I am quite satisfied that we in this country will have also to do it.
Hon. members talk about the poor taxpayer. The fact is that taxation will have to be used as a means of further equalizing the present inequitable distribution of goods. It is being so used in Great Britain, where the greater portion of the larger incomes is taken in order to distribute better the products of industry. The hon. member for Lisgar will have to revise his economics before he finds a solution of the problem confronting the people to-day, the problem of misery and want in the midst of the greatest abundance that the world has ever seen.


Mr. VALLANCE:: I would like to follow
the question asked by the hon. member for Lisgar as to the position of revenue postmasters. As far back as April 16, an order of the house was passed for a return showing:
(1) A list of post offices having revenue of $1,500 to $10,000 (on which salaries are determined), showing revenue for each of the years 1931-32, 1932-33 and 1933-34; (2) casual or automatic pay cuts suffered by each of the postmasters in these offices for each year (exclusive of the 10 per cent deduction).
The return has not yet come down. I asked for it in order to be in a position to ask the minister some questions regarding the effect of this cut on revenue postmasters. When the ten per cent deduction bill came up the first year I drew to the attention of the minister the position of these revenue postmasters. Some of them have suffered as much as a thirty-five per cent cut by reason of shrinkage of revenue of the post offices. Those in the large post offices such as Ottawa are subject only to the ten per cent cut, and I suppose the revenue in the post office at Ottawa is proportionate to that of any other urban post office. There are I suppose large numbers of revenue postmasters who will be relieved of the ten per cent deduction if the income resulting from the revenue of the office is $1,000 or less; but there are many post offices showing an income of over $1,000 without allowing any deduction for the cost of help. Postmasters in this class are not receiving the consideration that many of us feel they should. I would like the minister to give them further consideration, because while many have an apparent income of $1,500 or $2,000 they are not in fact getting $1,000, yet are still subject to the ten per cent deduction. It seems to me that the government and the minister should give this type of civil servant a little further consideration.

Civil Service-Salary Deduction


Edgar Nelson Rhodes: In reply to the hon. member who has just taken his seat may I say that there may be instances where individual postmasters have had their receipts reduced as much as thirty-five per cent. I take it that my hon. friend is referring to the diminution of business in post offices. May I point out to him that so far as the aggregate of postmasters is concerned, nothing like that percentage is shown. The commissions of revenue postmasters in the fiscal year 1930-31 amounted to $6,664,651.


Peter John Veniot: From salaries?


Edgar Nelson Rhodes: These are commissions.


John Vallance: How many offices?


Peter John Veniot: What is the figure for the previous year?


Edgar Nelson Rhodes: I have not that figure before me. The corresponding figure for the twelve months ending September 30, 1933-


Peter John Veniot: Why not give the fiscal year?


Edgar Nelson Rhodes: Because we have not that figure. The amount for the year ending September 30, 1933, is $6,542,170. As between those two periods there is a shrinkage in commissions to revenue postmasters of only two per cent. There are 12,000 revenue postmasters in the whole of Canada, and this salary deduction bill will restore the full salary to 10,000 of the 12,000.


Peter John Veniot: The minister is mistaken ; there are not 12,000 revenue postmasters in Canada.


Edgar Nelson Rhodes: That is the information I have.


Peter John Veniot: There are not that many on commission.


Edgar Nelson Rhodes: I have the information-


Peter John Veniot: I don't care what information the minister has; he has the wrong information. I make that statement, and I know what I am talking about. If the minister says there are 12,000 commission postmasters in Canada, he has the wrong information.


Edgar Nelson Rhodes: Well, Mr. Chairman, I have that information, and I got it from the Post Office Department.


Peter John Veniot: I have the whole thing right here in front of me. There is a mistake somewhere.


Edgar Nelson Rhodes: Since we cannot settle the matter upon the basis of "you're another" as between the hon. member for Gloucester and myself-


Peter John Veniot: Better let it stand.


Edgar Nelson Rhodes: I can say only this, that until such time as I can have the figure rechecked I must accept the figures which are given to me and which I am assured are accurate. Up to the moment that is the best I can say. Then, to conclude what I was saying, the salary, compensation or whatever you wish to call it would be restored in full to 10,000 out of the 12,000, assuming for the sake of argument, so as to appease the hon. member for Gloucester, that the figures given to me are correct.


Peter John Veniot: Not at all. I am right and you are wrong, that is all.


Edgar Nelson Rhodes: At all events it is fair to assume that five-sixths of the postmasters will have their complete compensation restored as a result of this bill.


Edgar-Rodolphe-Eugène Chevrier: Why not do the same with other classes?


John Vallance: On what I am about to say I am not going to condemn the government. My remarks will bear on the salaries the postmasters are now receiving. I hope the ex-Postmaster General will contradict me if I am wrong.


Peter John Veniot: I will do that all right.


John Vallance: For some considerable
time postmasters, whether they be revenue or otherwise, have lost a certain percentage of revenue because of the fact that parcels are to-day going through post offices insured without the payment of any fee for that insurance. Although the Postmaster General is not in his seat I believe I am correct in that statement. At certain periods of the year the fees for insurance had brought considerable revenue to the revenue post offices which, under present circumstances, has been cut off. Probably that action was taken to meet the competition of express companies-
I do not know. The fact remains that a source of revenue has been taken away from the revenue postmasters.


Peter John Veniot: You are right.


John Vallance: In view of that fact,
and in view of the general reduction in business going through the post offices, I again urge that the minister if at all possible give further consideration to this type of civil servant, because I believe in this connection

Civil Service-Salary Deduction
an injustice is being done. Many postmasters to-day are unable to carry on. I do not have to enlarge upon the point, because the minister knows the facts as well as I do. He knows how their wages or salaries are arrived at, taking rent and other matters into consideration. The rent is determined by the revenue going through the post office. Because of the fact that the revenue is diminishing the rent diminishes with it. In many instances cuts as high as thirty-five per cent have been suffered. That cut it not in revenue alone but in salaries. It seems to me that if the minister can he should give them some further consideration.


Edgar Nelson Rhodes: Withount calling in question the merit of the plea just made by the hon. member for South Battleford, he must bear in mind that the fixing of postmasters' salaries is not within my province, nor, I am sorry to say, am I in a position to give complete information upon the point in question. I am not trying to avoid any responsibility, but the hon. member will appreciate that the information should be sought from and the plea made to my colleague, the Postmaster General. I shall direct his attention to the points raised by the hon. member. For the moment, however, I am not in a position to give him the information he desires.


Peter John Veniot: In order to have a correct understanding between the Minister of Finance and myself I wish to state that there are 12,133 post offices in the whole of Canada. I was talking about commission offices, revenue offices paying postmasters on commission, and the Minister of Finance told us, as I understood him, that there were 12,000. There is no such thing.


An hon. MEMBER:: How many are there?


Peter John Veniot: It is hard to tell how
many there are. The number is about 9,000, I think.


Edgar Nelson Rhodes: If I may repeat, we cannot get any farther ahead at the moment. I assure the hon. member and the committee that I am giving only such information as has been furnished to me by the Post Office Department. However, in the light of what the hon. member for Gloucester has said I will check up with the department.


Peter John Veniot: The minister may be confounding commission and revenue offices. I am speaking of offices affected under this bill, the remunerations of which are based on commissions. There are not 12,000 of them in Canada. That is the statement I make and stand by.	.


Mr. REID:: I was particularly pleased this afternoon to hear the Minister of Finance say that he was a believer in high wages and high prices and that the countries in which high wages and high prices exist were the countries which gave the most comforts to ordinary citizens. I heartily concur in that statement. I was pleased also to hear that ten per cent was not to be taken off those receiving less than 31,000. My own view and wish of course would have been to see the ten per cent restored on salaries under 32,000. However, the minister has pointed out that in his opinion and in the opinion of the government conditions do not warrant such a change. While I am and always have been an advocate of high wages, and have persistently fought for high wages throughout my life, I believe this would be the proper time to view the great spread between the salaries received by a certain class of civil servants and other classes. We have a class of civil servants in this dominion under the heading of deputy ministers to whom we are paying in salaries a total of 3275,000 a year, and I never hear anyone in this house protesting against the great spread between the $9,000 a year received by some of these deputy ministers and the $3,500 a year received by other civil servants who are just as capable. There are thirty men rated here at cost of over 3275,000 a year, and in addition the country is contributing a certain amount of their superannuation. Very many of these men will be retired on a higher superannuation allowance than most men can earn in a whole year. Some of them receive an annual superannuation allowance of 36,000. I say that without fear of contradiction. If there was any possibility of the lower grade civil servants ever working up to a salary of $9,000, I for one would never raise my voice in protest, but when one considers that these $9,000 positions are just political appointments calling for men of no greater calibre than many heads of branches who are receiving only $3,600, although just as capable, I cannot help but express my feeling that it is time we reviewed this salary question very carefully. If we are ever going to put our house in order now is the time to do it. Let me repeat, in order that I shall not be misunderstood, that I am not against paying high wages or paying what a man is worth, but there is too wide a gap between a certain class of civil servants occupying high positions and that other large group which unless something is done can never be jumped and never will be, because in the majority of cases the higher offices to which I refer are just straight political appointments.

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There is another point. I understand that an order in council was passed some time ago by the government that civil servants of the age of sixty-five years or over should be discharged or superannuated. If I am wrong I hope the minister will correct me. Some time ago I put a question on the order paper regarding this order in council, and a return was brought down to the house which makes interesting reading. What makes me rise on this occasion is what I consider an injustice in connection with an order of this kind. I am not at this time entering into the merits or demerits of the question whether a man of sixty-five or over should or should not be dismissed, but I do take the ground that once an order of that kind has been made there should be no favorites played. Many men who are sixty-five and over have retained their positions due to a certain amount of pull, while others who have not that pull have been dismissed and I feel that it is my duty to protest. I may be wrong in my impression about the order in council to which I refer. The return tabled in the house on April 9 shows the total number of civil servants discharged and superannuated under that order in council applying to employees sixty-five years and over. This was my question:
1.	What was the total number of civil servants and' government employees discharged and superannuated under the ruling regarding all employees 65 years and over?
2.	What were the numbers discharged and superannuated respectively, in each department of the public service since the order came into effect?
3.	How many persons 65 years of age or over, are still in the employ of the government?
4.	What are the names of the said persons, and in what respective departments of the public service are they engaged?
The return that was brought down in reply gives a table showing in the first column the number superannuated or retired, in the second column the number discharged, and in the third column the number still engaged. I find that 506 w-ere superannuated or retired and 58 discharged, and that 1,020 are still engaged. In looking over the names I find that men have been retained who do not occupy a key position. My complaint is not that they are retained, but that the order in council is not applied impartially, that one man with a little pull is retained and a man without pull let go. I could cite instances of men who have been retained in the public service because of a little influence they had, while immigration inspectors, customs and excise officers, clerks, cooks, charwomen, blacksmiths, and so forth right through the list

have been let go. I know captains of dredges who have been let out in my district because they have reached the age of sixty-five, while I find others have been retained. I would like the minister to explain why this order in council has been carried out in the way it has.


Edgar Nelson Rhodes: My hon. friend from New Westminster is probably aware of the fact that it has been the law for many years that it is competent upon the recommendation of a minister of the crown for the government to retire any employee who arrives at the age of sixty-five, and no special or general order in council is required for that purpose. The order in council to which my hon. friend refers had reference only to those civil servants who were sixty-five years or over and whose services could be dispensed with, and whose places it would not be necessary to fill. It was solely from the viewpoint of economy and efficiency in the public service that that order in council was passed. In each instance the individual retired received a retiring gratuity. In fact, in the view of the auditor general, who made official complaint in the matter, the government was over generous and exceeded its power in giving a larger gratuity than he thought the law warranted.
I cannot speak for all departments of the government; I can only speak for my own. Although it is not a pleasant duty to be associated with a policy which calls for the retirement, even with a gratuity, of those who have reached the age of sixty-five, it is difficult for one administering a department, having in mind his duty to the state, to justify continuing in the public service and paying full salary to one who is doing work that can be done by others in the department without adding to their numbers and without burdening unduly those who remain in the service. I would welcome from my hon. friend the slightest evidence that so far as my department is concerned there was any kind of pull whatever in the matter. I accepted without question the advice I received from responsible officers of my department in whom I had and still have the fullest confidence. I am not suggesting for one moment that there may not be individual cases where pull may have been exercised. We are all human. We know the atmosphere which surrounds the public service and which it is difficult to eradicate, but I would venture the belief that in the main, in the great majority of cases, the retirements were made in conformity with the idea which was in mind at the time the order in council was passed.

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My hon. friend has referred to the fact that a number of others have been retained in the public service who are over sixty-five years of age. Certainly. We did not desire that any man who was performing a useful public service should be retired because he was sixty-five, and that was specifically provided for. The order in council had reference only to those whose positions did not require to be filled, in other words, those who were surplus in the department. Nor did it apply to those sixty-five years of age who were occupying administrative posts which they could properly fill. I have in mind members of the public service over seventy years of age who had to be retained by special votes in the estimates, but they are men who are singularly young for their years, who have acquired wide knowledge in the service and are of singular use to the public service, and it was believed that it was in the public interest that their services should be retained. I hope I have covered the ground that I should cover in answering to the best of my ability the question of the hon. member for New Westminster.


Thomas Reid: The minister has covered it but, to be candid, I am not exactly satisfied with the reply. I realize that there are some men in key positions who in the interests of the public service should be retained, but in looking through this list I find that some of those who were let out were just as competent as those who were retained.


Edgar Nelson Rhodes: My hon. friend has put a wrong meaning upon my language. I would not want it to go abroad that the people who were retired were incompetent. The reason they were let out is because there was no work for them to do. In many cases these changes are made through no fault of the individual; there may be a change in the character o,f the public service. I do not wish for one moment to reflect upon any of these individuals.


Humphrey Mitchell: I think retirement at sixty-five years of age should be automatic.


John Vallance: It is not, and that is the trouble.


Humphrey Mitchell: I think it is a sound rule. I have had some experience in municipal work where men can look forward to retirement on pension a,t the age of sixty-five years. I do not think any man is indispensable. The earth would continue to spin round on its axis if a bomib were dropped on this House of Commons and We were all finished off. Under the law of averages, when a man reaches the age of sixty-five years he
begins to slow up. I know there are exceptions to the rule, but to circumvent a rule and prevent the younger men from coming along is unfair and unsound. When a rule like that is adopted it should be enforced without fear or favour.


[Stage Direction]
Section agreed to.
On section 3-Ten per cent deduction.
Alan Webster Neill: I suppose I would be out of order in moving to raise the minimum above $1,009, but I would ask the minister if he will not consider suggestions in that regard.


Edgar Nelson Rhodes: I think my hon. friend is quite right; it would not be competent for him to move an amendment which would have the effect of increasing the charge upon the public revenue. I say in all seriousness that I know of no other matter to which I have given more consideration, having regard to the demands upon the time of a public man. If I had consulted my personal wishes I would have liked to restore all the salaries and have no salary deduction act. But I had to measure the situation in the light of our needs. It may surprise my hon. friend to know that the moment you go above $1,000 you soon run into those who receive the major portion of the salaries paid in the public service. A jump of $100 or 1200 runs you into millions. We felt that in the light of the revenues the maximum to which we could go this year was $1,000. For the reasons I have indicated, no further consideration could be given to this matter.


Alan Webster Neill: There is one point which I do not think has been presented to the minister. Accepting the position he has stated, would he allow an exemption instead of a minimum of $1,000? A man earning $1,200 is now subject to a deduction of $120, but with an exemption of $1,000 he w'ould pay only ten per cent on the $200 over the $1,000.


Edgar Nelson Rhodes: My hon. friend overlooks the fact that in the case of those who receive $1,200 and under, the government pays the contributions to the superannuation fund, hence the deduction is only five per cent. In connection with the borderline cases we have provided that in no instance shall a man receive less than $1,000 per year.


Alan Webster Neill: I wonder if the minister would consider the point raised this afternoon in connection with board and allowances and insert the Words "in cash" after the words "one thousand dollars"? I refer to the seamen who receive $65 per month but who undergo a deduction of ten per cent on the alleged cost of

Ciml Service-Salary Deduction
their board. Of course this board does cost the government something, but an arbitrary value is placed upon it and a deduction of ten per cent made. The deduction comes off the $65 received. These men have homes to keep up, and after this deduction is made and they pay the necessary expenses for clothes and other things, it leaves very little for their families. I know the minister has power under section 6 to make arrangements of this kind, and I should like to know if he will consider this matter.


Edgar Nelson Rhodes: In the application of this act, as in the application of any act of a general character, there are bound to be instances of hardship.


Alan Webster Neill: That is what you are taking the power for.


Edgar Nelson Rhodes: You cannot escape these individual cases. However, I cannot accede to the suggestion of the hon. member for Comox-Alberni. The amount of cash which such a man receives has been adjusted in the light of the value to him of the allowance he may receive, whether it is living quarters, food, rent or a dozen and one other things. These are classed as compensation and his salary must be judged not in the light of the amount of cash he receives but in the light of the amount of his total compensation, either in cash or in kind.


Alan Webster Neill: But this is not based upon the value to the man, it is based upon the cost to the government. The government may set a figure of $30 as the value of his board, but if he were living at home with his family he could live much cheaper than that. If this man were living at home it would be quite different, but he must maintain his wife and family out of his wages, and I ask the minister how he can do that when this deduction is made from the $65 he receives.


Edgar Nelson Rhodes: It is beside the point whether or not a man can maintain a home on S65 per month or any other sum.


Alan Webster Neill: It is very much to the point.


Edgar Nelson Rhodes: That is not the point, although for the sake of argument we will assume that he cannot. I am not going to give the obvious answer, that he is not compelled to work for the government and need not accept that rate of compensation if he does not wish to do so. So far as this bill is concerned all we are dealing with is the question: Shall there or shall there not be a deduction of ten per cent? The broad question

of whether or not an individual is being adequately compensated is not one which can be properly raised here. The objection raised by my hon. friend may be well taken, but it has no reference to the question of the 16 per cent deduction.


Alan Webster Neill: Would the minister think
over the point I raised this afternoon of reconsidering his decision six months from the beginning of the fiscal year should the revenues in the future justify it?


Edgar Nelson Rhodes: It would be difficult to
provide against such a contingency in view of the fact that our whole set-up, so far as current account is concerned, has been made up for the year on the assumption that this deduction will take effect during the fiscal year. In these circumstances the government would leave itself open to every conceivable kind of pressure and criticism if it did or did not act at a given time with respect to the restoration of the balance. This does not apply to my hon. friend, but in view of the criticism which we have received ad lib from hon. gentlemen opposite with respect to the blank cheque, and considering the objection they attach thereto, I am rather surprised at the suggestion that there should be such a power as that placed in the hands of the government.


Alan Webster Neill: But this would be specified in the act, that in six months' time action shall be taken if the increasing revenues justify it. I do think the minister's argument rather weak when he says that the set-up of the finances is based on the assumption he states and therefore he cannot depart from it. The set-up of the finances in the last several yearn past has totally failed to come up to his estimate and nothing in particular has happened. Cheerfully and hopefully he anticipates, as he says in the budget, that the returns in the ensuing months will run higher than he has calculated either in the past or in his set-up, and I have no doubt that he will cheerfully accept the increased revenue in the months to come if it eventuates. Well, surely he can anticipate action on such increased revenue. He will not repudiate the increased revenues as they come in,, and therefore I do not see why he should not consider the suggestion. With all deference to the minister, I submit that the argument as to his being unable to depart from an arranged set-up is rather weak.


Edgar Nelson Rhodes: If it is any comfort to my hon. friend I am quite prepared to concede that my argument is weak, but I do not agree

Civil Service-Salary Deduction
with his that the matter is not being considered, for I have given it a great deal of consideration. Because I cannot accede to the suggestion he makes, it by no means follows that the matter is not being considered.


Sir EUGENE FISET:: In section 3, subsection 1, there are two provisos. The first is:
That no provision of this act shall operate to reduce the compensation of any member of the public service of Canada below $1,000 per annum.	[DOT]
That appears to be absolutely specific, but the second proviso, I frankly confess, I do not exactly understand; I do not understand the purpose of it. The first proviso seems to deal with the matter absolutely and entirely, but the second provision is extremely vague and I should be glad if the minister would explain it.


Edgar Nelson Rhodes: The first provision is intended to deal with the borderline cases and the second one is the general exemption. Whether these provisos are happily worded or not, I think that they are very clear in their intention. I do not assume responsibility for the verbiage; the responsibility belongs to the Department of Justice. I may say, however, that the idea was to make it clear beyond peradventure that the full salary up to SI,000 should be paid in all instances.


Eugène Fiset: That is rather
vague. There is another provision, which is that the money may be paid out of any unappropriated moneys in the consolidated revenue fund. Does the minister think it is advisable that such a provision dealing with civil service appropriations should be placed in the body of the bill? This house has not voted the civil list for any department. That civil list contains first of all salaries, and secondly contingencies, and it seems to me it could easily be provided that the money that may be needed should be voted by parliament instead of being paid out of the consolidated revenue fund. Inasmuch as each department will have to deal with any adjustment that may have to be made in the salary of any one of the civil servants that may be affected, why not provide in the body of the act for the money to be paid out of departmental contingencies vote? The contingencies vote authorizes the payment of travelling expenses of civil servants. Surely therefore, if you amended this bill to provide that any adjustment required would be met out of the contingencies vote, you would avoid creating the precedent, which is now being established, of dealing with the matter out of the consolidated revenue.


Edgar Nelson Rhodes: My hon. friend has had
a very wide experience in the public service, but I would point out to him that there is nothing unusual in this provision. He may not have found it in a salary bill of this kind, but he will find it in numerous statutes passed by parliament. Now, the reason for this is twofold. In the first place, I must direct to the attention of the committee the fact that the estimates were prepared and printed on the basis of ninety per cent, and notwithstanding what my hon. friend has said, the civil government vote has been passed in a number of instances. In the second place, the contingency vote has been reduced in most departments. But even if it were at the old figure, it could not adequately take care of the ten per cent. But there is a further reason, and it is this. A number of cases will have to be dealt with by the treasury board under the provisions particularly of subsection (c) of section 6, and money must be provided to pay the compensation in these cases. You could not, unless you put in some omnibus lump sum in a general vote, which would not get you further ahead, be able to provide by specific vote for these particular cases; whereas this means that where you can pay it out of the consolidated revenue fund there will be no excess vote but only that amount required will be taken for the compensation provided for in the restoration of salary deduction in respect of those who receive up to $1,000.


Eugène Fiset: I quite understand the minister, but I realized during my days in the service that one of the most sacred things was the consolidated revenue fund. I can remember that it was impossible to draw any money from that fund except by governor general's warrant when the house was not in session. I realize also, as the minister says, that especially in the last three or four years there has been a tendency for us to put our hands on this special vote, called the consolidated revenue fund, and to embody in numerous acts of parliament the powers granted under this act. This deals with civil service appropriations. I think it is creating rather an awkward precedent to authorize any money to be paid out of the consolidated revenue fund for such a purpose. I believe it would be proper to provide under a special vote, either in the supplementary estimates or in the contingencies, a lump sum to be administered departmentally or by the treasury board than to place those words as they stand in the legislation. Of course I may be wrong. I can quite well understand the Minister of Finance has his own reason, but

Civil Service-Salary Deduction

I think one of my colleagues has an amendment to offer and we can proceed with it.


Edgar Nelson Rhodes: In reply to the hon. member for Rimouski, may I say that this bill is establishing a precedent which I hope parliament will never be called upon to follow in
after years.


Eugène Fiset: Why take such an extreme course?


Edgar Nelson Rhodes: I have no doubt I can find numerous cases, but my mind comes at once to the provision which is on the statutes today in regard to old age pensions. If my memory serves me aright that is an elastic provision in precisely the same terms. There is no vote, no sum mentioned. The money may be taken out of the consolidated revenue fund and the amount may expand or contract, of course theoretically contract, because we will expect it to expand. Naturally this provision is in the bill for the reasons I have indicated, and it will not be necessary to deal with it again on account of our not being able to make an accurate estimate. In view of the circumstances and the precedent I cannot see any objection.


Peter John Veniot: I fully agree with the stand taken by the hon. member for Rimouski. The case cited by the Minister of Finance of the old age pensions is an entirely different one.


Edgar Nelson Rhodes: Why?


Peter John Veniot: I will give the reasons.
The general estimates as submitted to the house provide for a deduction of ten per cent or for ninety per cent of the former salary. This bill completely disorganizes those estimates; it provides that up to a certain salary the amount of ten per cent as deducted in the general estimates shall be returned. The proper way to deal with the matter would be to bring in a supplementary estimate to supplement, if I may use that term, the general estimates as they now stand. In that respect the case is entirely different from that cited to the committee by the Minister of Finance. My opinion is that sufficient information could be obtained so that there could be inserted in the supplementary estimates of each department the sum necessary to cover the restoration of this ten per cent deduction. Each department ought to be able to know within a measurable distance the exact figure that would be required. I can understand that the minister is quite right in saying that certain cases will have to be readjusted in some way or another, but those cannot 
amount to such a large sum as to warrant the minister in departing from the principle of obtaining the authority of parliament in voting money for public expenditures. In view of that I have an amendment that I wish to move, seconded by the hon. member for Rimouski :
That section 3 be amended by striking out the word "unappropriated" in line ten on page two and' substituting the word "appropriated" therefor.
While I am on my feet might I ask the minister this question:	Has he given any
thought to the case of commission postmasters whose ten per cent deduction is made from the gross revenue of the office? Has he considered applying the ten per cent deduction to the actual salary the postmaster would receive after paying the expenses necessary for carrying on the office?


Alan Webster Neill: The wording of the amendment does not make sense.


Richard Bedford Bennett: It certainly does not.


Edgar Nelson Rhodes: I am sure the chairman
would say that the amendment is out of order without my raising the point, even assuming that it made sense.


Alan Webster Neill: It should read: "Of any
moneys appropriated."


Peter John Veniot: It means that the word
"appropriated" is substituted for "unappropriated."


Edgar Nelson Rhodes: All I can say is that if the money were appropriated, it would not be in the consolidated revenue fund. I do not want to split hairs with my hon. friend. I submit to him that he cannot differentiate in principle between the provision of this bill which says that the money required under the legislation shall be paid out of the consolidated revenue fund, and the old age pensions measure which he supported, which makes precisely the same provision.


Peter John Veniot: Certainly I do.


Edgar Nelson Rhodes: Why?


Peter John Veniot: I have already given the
reason.


The CHAIRMAN (Mr. MacDonald, Cape Breton):: The difficulty, as I understand the
matter, is this. The clause as amended would read:
There may be paid out of any appropriated moneys in the consolidated revenue fund-


Peter John Veniot: Let me read the amendment again:

Civil Service-Salary Deduction
That section 3 be amended by striking out the word "unappropriated" in line ten on page two and substituting the word "appropriated" thprefor.
Or substitute therefor the word "appropriated."


Eugène Fiset: I do not wish to
second such an amendment because I do not think it is what I intended. I would be willing if the hon. member for Gloucester would substitute for his amendment:
Out of moneys appropriated by parliament, such sums-
Instead of:
Out of any unappropriated moneys in the consolidated revenue fund, such sums-


Peter John Veniot: That is what it means.


Richard Bedford Bennett: I wonder whether the
committee might not think it desirable to leave this as it stands. It is the usual form adopted in all cases where an elastic sum has to be provided to meet a situation arising by reason of changed arrangements from the estimates as submitted. I will give another case, one in connection with the civil service. commissioners and their retirement. They were to be paid out of the consolidated revenue fund such gratuity as was thought desirable. Wherever an amount has to be paid to supplement a fixed sum in the estimates and the exact amount cannot be ascertained, I think it is within the knowledge of the hon. member for Rimouski that this is the form which is used; that is the unnamed and undetermined amount which it is impossible at the moment to fix, is to be paid out of the consolidated revenue fund.


Eugène Fiset: Would the Prime
Minister allow one word? I am not exactly criticizing the method that has been adopted.
I say it is too bad that a precedent of that kind should be created.


Richard Bedford Bennett: It is not a precedent.


Eugène Fiset: Will the Prime
Minister permit me? In this special measure providing for the deduction of ten per cent we are really dealing with civil government estimates. I was under the impression when I spoke that none of the civil service appropriations had been voted for any department. The minister tells me some have been voted. In the civil government appropriation there are two kinds of votes, one providing for the salary of the civil service for each department, and the other for contingencies.
I think if the Prime Minister takes the trouble to read the bill he will find that the sum of money concerned will not be extra-74726- 1675
ordinarily large. In my humble opinion it would be preferable if a special amount, call it contingencies if you like, were provided, either for each department so that they might deal with their own cases, or in a lump sum, and let the sum be voted by parliament. I do not criticize either the Minister of Finance or the government for taking the course they have; it is their responsibility, but I have put my views fairly and I think plainly.


Mr. GERSHAW:: The question I intended to ask has been answered rather fully by the minister, but I wish to say just a word that might be of use in further consideration of the matter. I have before me a list of ten post offices, within each case the gross revenue for 1930, 1931, and 1932. A typical one is where the gross revenue in 1930 was $3,000 and is now $1,900. These men will not be benefited by this legislation, yet their expenses are the same as when the revenue was at the higher point. The responsibilities are the same-they handle large sums of money; they must in each case pay an assistant. I give these as typical examples of post offices all over the country; these postmasters are making a greater contribution on account of the way their salaries have been reduced.


Edgar Nelson Rhodes: My hon. friend of course
will appreciate that he is dealing with a class of public servant in receipt of a far higher salary than SI,000.


Frederick William Gershaw: Slightly higher.


Edgar Nelson Rhodes: Well, they are beyond the limit, and we cannot possibly bring them in.


Peter Heenan: The Minister of Finance
gave a very illuminating answer to the question I asked, but I am afraid his answer with respect to the principle adopted in connection with old age pensions is not so illuminating.


Edgar Nelson Rhodes: My hon. friend should
distinguish between the case of the appropriation and the old age pension.


Peter Heenan: I am going to try to
distinguish, try to illuminate. Surely each minister can estimate the number of employees in his department that are going to have the ten per cent restored. Neither the minister nor anyone else can tell from month to month how many old age pensions will have to be provided for. He does not know but what another province might ask the government of Canada to permit them to enter into this agreement. Another thousand old age pensioners might come on the plan.
263S

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There is no other way I know of that they could be provided for except by what you might call a blanket order of this description. That cannot be said with respect to the number of employees to be affected under this measure.


Edgar Nelson Rhodes: 
[Stage Direction]
At eleven o'clock the house adjourned without question put, pursuant to standing order.
Monday, April 30, 1934