1935-06-10

Mr. BENNETT:: On May 27 the hon member for Antigonish-GuySborough (Mr. Duff) moved for the production of papers. These papers subject to the limitation which I then expressed, are now presented. A number of the dispatches are of a confidential character,



BANK OF CANADA ACT

[Stage Direction]
On the order for the introduction by Mr. Reid of a bill to amend the Bank of Canada Act:
Mr. SPEAKER:: I will now give a decision on the motion of the hon. member for New Westminster (Mr. Reid) for leave to introduce a bill. When the hon. member for New Westminster moved on Thursday last for leave to introduce the bill standing on the order paper in his name-an act to amend the Bank of Canada Act-he stated in part, as Deported at page 3338 of Hansard, that "There are two changes contemplated in the proposed bill; the first is to amend paragraph (lb), subsection 3 of section 25, and would empower the minister to purchase silver for the redemption of dominion notes."
If it is true that the bill will do what its sponsor states, empower the minister to purchase silver, then it will be generally agreed that it is out of order on the ground that a private member cannot introduce a measure which involves the expenditure of public moneys.
Upon looking up original section 25, I find that paragraph (b) of subsection 3 of the Bank of Canada Act, reads as follows:
3.	On the day on which the bank is authorized to commence business the minister shall transfer to the bank-
(b) silver held by the minister for the redemption of dominion notes valued at the market price of the fine silver content thereof.
Bank oj Canada

Mr. Reid's amendment proposes to add to subsection (b) just referred to the following words:
and at any time thereafter the minister may transfer to the bank silver held by him for the redemption of dominion notes or hereafter purchased for the redemption of dominion notes valued at the market price of the fine silver content.
The original section as just quoted provides that "on the day on which the bank is authorized to commence business, the minister shall transfer to the bank silver held by him for the redemption of dominion notes." The amendment provides that "any time thereafter the minister may transfer to the bank silver held by him for the redemption of dominion notes or hereafter purchased for the redemption of dominion notes," etcetera.
While I do not think the amendment goes as far as the hon. member suggests, that is "empowers" the minister to purchase silver, it certainly -contemplates the purchase of further silver by the minister and does empower the transfer of silver held by him to the bank.
The purchase of silver by the government certainly involves the expenditures of government moneys. Speaking of silver in the narrow sense as " money," its transfer from the minister to the bank, as authorized by the proposed amendment, involves the expenditure of public moneys. It is quite clear that legislation involving the expenditure of public moneys can only be introduced by a responsible minister of the crown upon the recommendation of His Excellency the Governor General. On the ground that the expenditure of public moneys is involved the amending motion is out of order.
It is, in my opinion, also out of order on a second ground. Giving silver the wider meaning of "property" its transfer as proposed by the amendment involves the disposal or alienation of crown property. No private member may introduce a measure for this purpose without first having asked the house to agree to an address for leave to proceed thereon, such leave to be obtained prior to the introduction of the bill. (See Bourinot 4th edition, page 414.) No such leave has been obtained.
I therefore rule that the motion to introduce the bill in question is out of order.


Mr. THOMAS REID (New Westminster) :: Mr. Speaker, I appreciate the thought and the great care you have given the matter, and also the fairness with which you have dealt with it. But I must say I am disappointed at being prohibited from introducing this bill.



QUESTIONS

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

Thomas Reid: According to a treaty entered into in 1846 between the United States of America and Her Majesty on behalf of Canada for the settlement of the Oregon boundary, in clause 2 thereof, it was expressly agreed that the Columbia river and its branches were to be kept open for the free use and navigation of all British subjects from the 49th parallel of north latitude to the Pacific ocean,-[DOT]
1.	Is the government aware that the provisions of this clause have been violated?
2. If so, what steps have been taken to protect the interests of the Canadian people so as to keep inviolate the provisions of the treaty and particularly clause 2 of tile agreement?
3.	If not, will steps be taken to see that the terms of the treaty are lived up to in every particular?


Richard Bedford Bennett: We are obtaining further information in respect to Question No. 4. It is, as I said the other day, a matter of some difficulty from the international standpoint.


Pierre Édouard Blondin: Shall the question stand?


Richard Bedford Bennett: Stands.


RADIO COMMISSION AUTOMOBILES
Mr. TOTZKE:: 1.	Have any automobiles been purchased by the radio commission for the use of any of the commissioners?
2.	If so, what makes and at what prices?
3.	Have any automobiles been rented by the commission for the use of any of the commissioners?
4.	If so. what makes of ears, and at what
rental?	[DOT]
5.	Has an automobile been purchased in Ottawa and shipped to Vancouver for the use of one of the commission's inspectors?
6.	If so. what was make of car, price of purchase and cost of transportation ?


Mr. DURANLEAU:: 
UNEMPLOYMENT RELIEF EXPENDITURE-HULL COUNTY, QUE.
Mr. FOURNIER:: What was the total sum expended by the government in tlie county of Hull under authority of the various unemployment relief measures in each of the fiscal years covering the period from March 31, 1930, to March 31, 1935, inclusive?


Mr. GORDON:: The following are the amounts paid to the province of Quebec under the legislation indicated for relief in the federal constituency of Hull in accordance with certificates of expenditure rendered by the province:
The Unemployment Relief Act,
1930	$ 134,123 46
The Unemployment and Farm Relief Act, 1931, and Continuance Act, 1932	 182,487 49
The Relief Act. 1932	 90.492 84
The Relief Act, 1933	 140,168 80
(1) The Relief Act, 1934	 36,823 72
(1)	On July 31. 1934, the dominion ceased contributing to the province's expenditures on a percentage basis and since that date has paid to the province a monthly grant-in-aid to assist the province in discharging its responsibilities connected with the relief of necessitous persons within its borders. The amount of the grant-in-aid allocated to the different sections by the province is not however a matter of record with the dominion.


UNEMPLOYMENT RELIEF EXPENDITURE-PONTIAC COUNTY, QUE.
Alphonse Fournier: What was the total sum expended by the government in the county of Pontiac under authority of the various unemployment relief measures in each of the fiscal years covering the period from March 31, 1930, to March 31, 1935, inclusive?


George Gordon: The following are the amounts paid to the province of Quebec under the legislation indicated for relief in the federal constituency of Pontiac in accordance with certificates of expenditure rendered by the province:
The Unemployment Relief Act,
1930	$	96,276 86
The Unemployment and Farm Relief Act, 1931, and Continuance Act, 1932	 167,794 98
The Relief Act, 1932	 174,452 08
The Relief Act, 1933	 46,193 73
(1) The Relief Act, 1934	 13,887 56
In addition to the foregoing expenditures, the dominion has paid to the province under the provisions of The Relief Act, 1933 the sum of S9.890.87 for work undertaken on the Maniwaki-Mont Laurier and Senneterre highway, but certificates of expenditure rendered by the province do not indicate what proportion of the expenditure was made in the county of Pontiac.
(1) On July 31, 1934, the dominion ceased contributing to the province's expenditures on a percentage basis and since that date has paid to the province a monthly grant-in-aid to assist the province in discharging its responsibilities connected with the relief of necessitous persons within its borders. The amount of the grant-in-aid allocated to the different sections by the province is not however a matter of record with the dominion.


UNEMPLOYMENT RELIEF EXPENDITURES- WRIGHT COUNTY, QUE.
Alphonse Fournier: What was the total sum expended by the government in the county of Wright under authority of the various unemployment relief measures in each of the fiscal years covering the period from March 31, 1930, to March 31, 1935, inclusive?


George Gordon: The following are the amounts paid1 to the province of Quebec under the legislation indicated for relief in the federal constituency of Wright in accordance with certificates of expenditure rendered by the province:
The Unemployment Relief Act,
1930	$25,185	09
The Unemployment and Farm
Relief Act, 1931, and Continuance Act, 1932	
52,696	93The Relief Act,	1932	
10,593	90The Relief Act,	1933	
21,708	25*The Relief Act,	1934	
7,444	62
In addition to the foregoing expenditures, the Dominion has paid to the province under the provisions of The Relief Act, 1933, the sum of $9,890.87 for work undertaken on the Maniwaki-Mont Laurier and Senneterre highway, but the certificates of expenditure ren-
Questicms

dered by the province do not indicate what proportion of the expenditure was made in the county of Wright.
* On July 31, 1934, the dominion ceased contributing to the province's expenditures on a percentage basis and since that date has paid to the province a monthly grant-in-aid to assist the province in discharging its responsibilities connected* with the relief of necessitous persons within its borders. The amount of the grant-in-aid allocated to the different sections by the province is not however a matter of record with the dominion.


MILLHAVEN, ONT., DOCK
Mr. PHASER (Northumberland):: 1.	Under what terms was the new dock at Millhaven, Ontario, constructed?
2.	Were public tenders called for?
3.	If so, what tenders were received and from whom ?
4.	Was the contract awarded' to the lowest tenderer?
5.	If by contract, who received the contract, and what was the total contract price?
6.	If by day labour and purchased material, what was the total cost?


Mr. STEWART (Leeds):: 1.	A 32-foot extension was built to the dock by day labour.
2.	No.
3.	4 and 5. Answered1 by No. 2.
6. $1,005.31.


POINTE AU PIC, QUE., WHARF
Mr. CASGRAIN:: 1.	Did the government purchase lumber for the construction now being carried out at the Pointe-au-Pic wharf, in the county of Charlevoix?
2.	If so, what was the quantity purchased and from whom?
3.	Was such lumber inspected before the purchase and by whom?
4.	Was such lumber according to the specifications of the Department of Public Works?
5.	How much was paid for such lumber and to whom?


Mr. STEWART (Leeds):: 1.	No, work was done under contract.
2 to 5. Answered by No. 1.


EMPLOYMENT STATISTICS, MONTREAL
[Stage Direction]
Mr. LAITR'JN:
1.	How many establishments in Montreal have reported to the dominion bureau of statistics on the number of people employed by them?
2.	How many of said establishments employ more than 25 persons?
3.	What are the names of said firms or establishments?
4.	How many employees are employed in each of said establishments?
Mr. HANSON (York-Sunbury):: 1.	Assuming that industrial establishments are meant, 2,226 industrial establishments, employing 80,212 persons, reported to the dominion bureau of statistics in Montreal proper in 1933. With regard to merchandising and service establishments, the 1931 census showed that there were 17,602 such establishments employing 78,187 persons.
2.	The number of industrial establishments which have 25 employees and over is compiled for Canada as a whole and by provinces, but not by localities. It would take considerable time to get the figure for Montreal, as the individual returns are filed by industries, not by cities and towns.
3 and 4. The dominion bureau of statistics is unable under the secrecy clause of the Statistics Act to give out any information relating to an individual concern.


Mr. CAHAN:: The information requested in Question No. 39 has already been laid on the table of the house in return No. 225 which was moved for by the hon. member for Que-bec-Montmorency (Mr. Dorion).


Pierre Édouard Blondin: Question No. 30 dropped.


R. JAMES GREAVES, VALPARAISO, SASK.
Mr. DONNELLY:: 1.	Is one R. James Greaves of Valparaiso', Saskatchewan, in the employ of the dominion government? (a) if so, in wliat capacity; (b) what are his duties and on what date did they commence ?
2.	What remuneration does he receive?
3.	Is his remuneration such as to permit of him taking part in partisan political activities?


Sir GEORGE PERLEY:: 1.	Yes. (a) and (b)-Official receiver for the judicial districts of Melfort, Humboldt and Prince Albert in the province of Saskatchewan. His duties commenced on March 30th, 1935.
2.	$160 a month.
3.	No.


GRANDE ALDOUANE, N.B., WHARF
Mr. MICHAUD:: 1.	Was any work done on the wharf, at Grande Aldouane, Kent county, New Brunswick, since January 1, 1934?
2.	If so, what was the nature and cost of such work?


Mr. STEWART (Leeds):: 1.	Yes.
2.	(a) Construction of wharf at an estimated cost of $10,000.
(b) Expenditure to date $5,682.77.

Questions as Orders for Returns



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. MacLEAN:: 1.	How many miles of trans-Canada highway have been constructed in Canada since 1930?
2.	How many miles of this highway have been constructed in each of the nine provinces, showing each province separately?
3.	What was the cost per mile in each province in connection with this construction work, and what percentage of the above cost was paid (a) by the federal government; (b) by the provincial government; (c) municipality?
4.. How many miles of this highway still remain to be constructed, showing number in each province separately?
5.	What is the total cost of the federal government's share of this highway up to the present time?
6.	What is the estimated cost to complete the work?


CIVIL SERVICE PROMOTIONS
Mr. GAGNON:: 1.	How many employees within the government service have been promoted by the governor in council since the establishment of the staff control regulations?
2.	How many promotions were made in each department ?
3.	How many English Canadian employees were promoted in each department?
4.	How many French Canadian employees were promoted in each department?
5.	What was the increase in the remuneration of each in each case?
Mr. DURANLEAU; Stands as order for return.
tained in sessional paper No. 335 of May 20, 1935, to the effect that all general departmental correspondence, "which up to the present has been addressed to Mr. Little as Director of European Emigration, will in future be addressed to the high commissioner marked 'Attention Mr. Little,' " was the high commissioner authorized to open correspondence thus addressed?
2.	Referring to consultations of the said Mr. Little with the high commissioner "respecting any important matters which would from time to time he the subject of correspondence" coming from the Department of Immigration, to use the words of the letter already referred to. was the high commissioner empowered to give any instructions to the said Mr. Little?
3.	If so, in virtue of what authority, and while doing so, was the high commissioner under the supervision of the head or deputy head of the Department of Immigration and Colonization?
4.	If not, to whom was the high commissioner responsible for any instructions or advice given to the said Mr. Little?
5.	Referring again to the above mentioned letter, what was the line of demarcation between (a) any matter of public business not involving the question of policy and dealt with through the Department of Immigration and Colonization, and (b) any matter of public business involving the question of policy and dealt with through the Secretary of State for External Affairs?
0.	Since October 24, 1931, did the Secretary of State for External Affairs communicate with the high commissioner with regard to any matter of public business involving a question of policy for the Department of immigration and Colonization, and, if so, was it in accordance with orders in council passed on or after October 24, 1931?



RADIO BROADCASTING STATIONS IN CANADA


Mr. POULIOT:: 1.	Did the sum of $721,479.35 being the total of two items mentioned in sessional paper No. 269 of March 20. 1935, for the cost of the high commissioner's office in London, from August 1, 1930, to February 1, 1935. include any amount spent for publicity and printing?
2.	If not (a) what total amount was spent by the high commissioner and the high commissioner's office in London for publicity and printing during that period; (b) did the latter amount include anything for entertainments; (c) if so, how' much; (d) how much was spent for publicity in Great Britain; (e) how much in Canada; (f) same questions for printing?
3.	Did the sum mentioned in the first place include the salaries and travelling expenses of the officers of the five departments mentioned in sessional paper No. 335A of May 20. 1935.
4.	If not, what total amount was paid for such salaries and travelling expenses during the above mentioned period?



W. R. LITTLE, DIRECTOR OF EUROPEAN EMIGRATION

Mr. POULIOT:: 1.	Referring to letter of Deputy Minister of Immigration and Colonization dated October 24, 1931. to W. R. Little. Director of European Emigration, London, S.W. 1, England, con-


Mr. GAGNON:: 1.	How' many radio broadcasting stations are there at present in Canada?
2.	How many broadcasting stations are there: (a) in British Columbia, (b) in Alberta, (c) in Saskatchewan, (d) in Manitoba, (e) in Ontario, (f) in Quebec, (g) in New Brunswick, (h) in Prince Edward Island, (i) in Nova Scotia?
3.	What is their respective power output?
4.	What are the radio broadcasting stations in Canada receiving payment from the radio commission for services performed in connection with the broadcast of the commission's programs or otherwise?
5.	What amount is paid to each station in
particular and also by province?	.
6.	What has been the income from radio licence fees in each province for the fiscal years 1933-1934 and 1934-1935?
7.	What amount did the radio commission spend on the production of programs during the fiscal years 1933-1934 and 1934-1935?
1 How many appointments were made to the Canadian Radio Broadcasting Commission: (a) under the Civil Service Act, (b) under the Canadian Radio Broadcasting Act?
2.	What are the names of these appointees, the position they occupy and the salary rate in each case?
Motions jor Papers

3.	How many of these appointees are: (a) English Canadians, (b) French Canadians?
4.	What are their respective positions, place of employment and salary rate?
st. John's, que., fence on richelieu street



PROPERTY.

Mr. RHEAUME:: 1.	Upon whose request was a fence erected on the land which the government owns on Richelieu street at St. John's, province of Quebec, to the east, near the building occupied by the Department of National Revenue?
2.	Were tenders called for?
3.	What are the names of the tenderers?
4.	To whom was the contract awarded and what was the amount paid?
5.	Did owners of neighbouring properties contribute to the cost of said fence?
6.	If so, what amount?


Mr. STEWART (Leeds):: Return, tabled herewith.



IMPORTATIONS OF FLOUR

Mr. FERLAND:: 1.	Did Canada import flour during the past four years?
2.	If so, (a) from what countries, (b) what quantity, (c) what was the value of such imports?


Mr. HANSON (York-Sunbury):: Return
tabled herewith.



TRADE WITH UNITED STATES

Mr. POULIOT:: 1.	What were Canada's total exports to the United States in the twelve month periods ending, (a) May 31, 1931; (b) May 31, 1932; (c) May 31, 1933; (d) May 31, 1934, and (e) May 31, 1935?
2.	What were Canada's tota'l imports from the United States during the corresponding periods ?


Richard Burpee Hanson: Return tabled herewith.



BANK OF CANADA NOTE ISSUE

[Stage Direction]
Mr. POULIOT;
1.	What is the number of bank notes for each figure issued, (a) in English, and (b) in French by the Bank of Canada?
2.	How many French notes were distributed
to each chartered or savings bank?
Sir GEORGE PERLEY:: This question may be passed as an order for return on the understanding that the information asked for by question No. 1 cannot be available until reports are received from the various agencies of the bank, as the information is not presently available at head office, and that question No. 2 cannot foe answered, as statistics are not kept on this basis.


Mr. POULIOT:: On the point of order; the other day I asked exactly the same question and I was answered by the total amount of

notes. I presume that the Bank of Canada knows what number of bank notes of each denomination are issued and I do not see why there is so much trouble in getting that information.


Pierre Édouard Blondin: Question stands as order for return with the reservation mentioned by Sir George Perley.



MOTIONS FOR PAPERS


Jean-François Pouliot: For a copy of .all correspondence between the government of Great Britain, the War Office and the Admiralty, on one hand, and the Canadian government on the other hand, with regard to militia orders 116 of 1933; 157 of 1933, and 118 of 1935.


Richard Bedford Bennett: I do not know if there is any correspondence or not, but it will be subject to the usual reservation in matters of that kind.


Jean-François Pouliot: On a question of
privilege, Mr. Speaker-
Some hon. MEMBERS; Order.


Pierre Édouard Blondin: There is no question of privilege. The Prime Minister has pointed out that the question has reference to military matters, it is quite right for the government to make the usual reservation.
Mr. POULIOT; But we are not in time of war, we are in time of peace.


[Stage Direction]
Motion agreed to.

Jean-François Pouliot: For a copy of detailed accounts of the expenditure of an appropriation of $100,000 for publicity and advertising in the United Kingdom and Europe, referred' to in letter from the Minister of Trade and Commerce to the High Commissioner for Canada in London, dated April 12, 1933, and for all amounts administered by the office of the said commissioner for similar purposes.



UNEMPLOYMENT RELIEF, SASKATCHEWAN

Ernest Edward Perley: For a return showing:
1.	Amount of direct relief paid out by municipalities in the drought areas of Saskatchewan as reported to the federal Department of Finance by the provincial government of Saskatchewan.
2.	Number of families reported by the provincial government of Saskatchewan to the Department of Finance as being in receipt of direct relief in each rural municipality.
3.	A copy of correspondence between the Department of Finance or its representatives, and the provincial government, or i te repre-sentatves. with reference to relief administration in R.M. 104.

Trail Smelter



CHURCHOVER, N.S., MAIL CONTRACT

Mr. RALSTON:: For a copy of all notices, tenders, contracts, letters, telegrams, memoranda, recommendations, communications, correspondence and documents since January 1. 1935, in the possession of the Post Office Department with respect to the contract for carrying the mail between Church-over and railway station, Shelburne county, N.S.
SHELBUKNE-tJPPEB OHIO, N.S., MAIL CONTRACT


James Layton Ralston: For a copy of all notices, tenders, contracts, letters, telegrams, memoranda, recommendations, communications, correspondence and documents since January 1, 1935. in the possession of the Post Office Department with respect to the contract for carrying the mail between Shelburne and Upper Ohio, rural route No. 1.



BIRCHTOWN, N.S., MAIL CONTRACT

James Layton Ralston: For a copy of all notices, tenders, contracts, letters, telegrams, memoranda, recommendations, communications, correspondence and documents since January 1, 1935, in the possession of the Poet Office Department with respect to the contract for carrying the mail between Birch-town and railway station, Shelburne county, NS.



TRAIL, B.C., SMELTER APPROVAL OF CONVENTION BETWEEN CANADA AND THE UNITED STATES CONCERNING DAMAGE COMPLAINED OF IN THE STATE OF WASHINGTON

Richard Bedford Bennett: That it is expedient that parliament do approve of the following convention between Canada and the United States: relating to certain complaints arising from the operation of the smelter at Trail, British Columbia, signed at Ottawa on the 15th day of April, 1935. Convention Between Canada and the United States
Relating to Certain Complaints Arising from the Operation of the Smelter at Trail, BjC.
Ottawa, April 15, 1935. His Majesty the King of Great Britain. Ireland and the British dominions beyond the Seas, Emperor of India, in respect of the Dominion of Canada, and The President of the United States of America.
Consider i ng that the government of the United States has complained to the government of Canada that fumes discharged from the smelter of the Consolidated Mining and Smelting Company at Trail, British 'Columbia, have been causing damage in the state of Washington, and	.
Considering further that the international joint commission, established pursuant to the Boundary Waters treaty of 1909, investigated problems arising from the operation of the smelter at Trail and rendered a report and recommendations thereon, dated February 28, 1931, and
Recognizing the desirability and necessity of effecting a permanent settlement,
Have decided to conclude a convention for the purposes aforesaid, and to that end have named as their respective plenipotentiaries:
His Majesty the King of Great Britain, Ireland and the British dominions beyond the Seas, Emperor of India, for the Dominion of Canada:
The Right Honourable Richard Bedford Bennett, Prime Minister, President of the Privy Council and Secretary of State for External Affairs;
The President of the United States of America:
Pierre de L. Boal. Charge d'Affaires ad interim of the United States of America at Ottawa;
Who, after having communicated to each other their full powers, found in good and due form, have agreed upon the following articles:
Article I
The government of Canada will cause to be paid to the secretary of state of the United States, to be deposited in the United States treasury, within three months .after ratifications of this convention have been exchanged, the sum of three hundred and fifty thousand dollars, United States currency, in payment of all damage which occurred in the United States, prior to the first day of January, 1932, as a result of the operation of the Trail smelter.
Article II
The governments of Canada and the United States, hereinafter referred to as "the governments," mutually agree to constitute a tribunal hereinafter referred to as "the tribunal," for the purpose of deciding the questions referred to it under the provisions of article III. The tribunal shall consist of a chairman and two national members.
The chairman shall be a jurist of repute who is neither a British subject .nor a citizen of the United States. Ho shall be chosen by the governments', or, in the event of failure to reach agreement within nine months after the exchange of ratifications of this convention, by the president of the permanent administrative council of the permanent court of arbitration at The Hague described in -article 49 of the convention for the pacific settlement of international disputes concluded at The Hague on October 18, 1007.
The two national members shall be jurists of repute, who have not been associated directly or indirectly, in the present controversy. One member shall be chosen by each of the governments.
The governments miay each designate a scientist to assist the tribunal.
Article III
The tribunal shall finally decide the questions. hereinafter referred to as " the questions," set forth hereunder, namely:-
(1)	Whether damage caused by the Trail smelter in the state of Washington has occurred since the first day of January, 1932, and, if so, what indemnity should be paid therefor?
(2)	In the event of the answer to the first part of the preceding question being in the affirmative, whether the Trail smelter should
Trail Smelter

be required to refrain from causing damage in the state of Washington in the future and, if so, to what extent?
(3)	In the light of the answer to the preceding question, what measures or regime, if any, should be adopted or maintained by the Trail smelter ?
(4)	What indemnity or compensation, if any, should be paid on account of any decision or decisions rendered by the tribunal pursuant to the next two preceding questions?
Article IV
The tribunal shall apply the law and practice followed in dealing with cognate questions in the United States of America as well as international law and practice, and shall give consideration to the desire of the high contracting parties to reach a solution just to all parties concerned.
Article V
The procedure in this adjudication shall be as follows:

1.	Within nine months from the date of the exchange of ratifications of this agreement, the agent for the government of the United States shall present to the agent for the government of Canada a statement of the facts, together with the supporting evidence, on which the government of the United States rests its complaint and petition.
2.	Within a like period of nine months from the date on which this agreement becomes effective, as aforesaid, the agent for the government of Canada shall present to the agent for the government of the United States a statement of the facts, together with the supporting evidence, relied upon by the government of Canada.
3.	Within six months from the date on which the exchange of statements and evidence provided for in paragraphs 1 and 2 of this article has been completed, each agent shall present in the manner prescribed by paragraphs 1 and 2 an answer to the statement of the other with any additional evidence and such argument as he may desire to submit.
Article VI
When the development of the record is completed in accordance with article V hereof the governments shall forthwith cause to be forwarded to each member of the tribunal a complete set of the statements, answers, evidence and arguments presented by their respective agents to each other.
Article VII
After the delivery of the record to the members of the tribunal in accordance with article VI the tribunal shall convene at a time and place to be agreed upon by the two governments for the purpose of deciding upon such further procedure as it may be deemed necessary to take. In determining upon such further procedure and arranging subsequent meetings, the tribunal will consider the individual or joint requests of the agents of the two governments.
Article VIII
The tribunal shall hear such representations and shall receive and consider such evidence, oral or documentary, as may be presented by

the governments or by interested parties, and for that purpose shall have power to administer oatihs. The tribunal shall have authority to make such investigations as it may deem necessary and expedient, consistent with other provisions of this convention.
Article IX
The chairman shall preside at all hearings and other meetings of the tribunal, and shall rule upon all questions of evidence and procedure. In reaching a final determination of each or any of the questions, the chairman and the two members shall each have one vote, and, in the event of difference, the opinion of the majority shall prevail, and the dissent of the chairman or member, as the case may be, shall be recorded. In the event that no two members of the tribunal agree on a question, the chairman shall make the decision.
Article X
The tribunal, in determining the first question and in deciding upon the indemnity, if any, which should be paid in respect to the years 1932 and 1933, shall give due regard to the results of investigations and inquiries made in subsequent years.
Investigators, whether appointed by or on behalf of the governments, either jointly or severally, or the tribunal, shall be permitted at all reasonable times to enter and view and carry on investigations upon any of the properties upon which damage is claimed to have occurred or to be occurring, and their reports may, either jointly or severally, be submitted to and received by the tribunal for the purpose of enabling the tribunal to decide upon any of the questions.
Article XI
The tribunal shall report to toe governments its final decisions, together with toe reasons on which they are based, as soon as it has reached its conclusions in respect to the questions, and within a period of three months after the conclusion of proceedings. Proceedings shall be deemed to have been concluded when the agents of the two governments jointly inform the tribunal that they have nothing additional to present. Such period may be extended by agreement of the two governments.
Upon receiving such report, toe governments may make arrangements for toe disposition of claims for indemnity for damage, if any, which may occur subsequently to toe period of time covered by such report.
Article XII
The governments undertake to take such action as may be necessary in order to ensure due performance of the obligations undertaken hereunder, in compliance with toe decision of the tribunal.
Article XIII
Each government shall pay the expenses of toe presentation and conduct of its case before toe tribunal and toe expenses of its national member and scientific assistant.
All other expenses, which by their nature are a charge on both governments, including toe honorarium of toe neutral member of toe tribunal, shall be borne by the two governments in. equal moieties.

Trail Smelter
Article XIV
This agreement shall be ratified in accordance with the constitutional forms of the contracting parties and shall take effect immediately upon the exchange of ratifications, which shall take place at Ottawa as soon as possible.
In witness whereof, the respective plenipotentiaries have signed this convention and have hereunto affixed their seals.
Done in duplicate at Ottawa this fifteenth day of April, in the year of our Lord, one thousand, nine hundred and thirty-five.
(L.S.) R. B. Bennett.
(L.S.) Pierre De L. Boal.
And that this house do approve of the same
He said: Mr. Speaker, the convention which this house is asked to ratify deals with an agreement arrived at between the governments of the United States and Canada with respect to a matter that has been the subject of controversy for many years. When this government came into office in August, 1930, the subject matter of the dispute had been under consideration by the international joint commission who made a report in 1931, in which they recommended that $350,000 should be paid the farmers and others in the state of Washington who had suffered under the circumstances to which I shall presently refer.
As is well known the smelter at Trail is near the boundary line between Canada and the United States. In the course of its operations the chimneys emit large quantities of smoke which is heavily laden with poisonous substances that affect vegetation very adversely. Those members of this house who have visited one of the islands off the Pacific coast will recall that as they approached the harbour they observed that the vegetation had been entirely destroyed by the fumes from the smelter at that point. Prevailing winds carried the gases emitted from the chimneys of the smelter into the United States, and of course they had the effect of seriously injuring the vegetation of that area over which they circulated. The grasses, grains, flowers and to some extent the trees Were greatly injured by these fumes and the farmers of the United States, through their government, claimed that the loss was substantial.
An agreement was arrived at between the two governments, the government of Canada and the government of the United States, by which the international joint commission investigated the matter as I have indicated, but those findings were not final; the commission acted only in an advisory capacity and not for the purpose of rendering a final judgment. The sum of $250,000 was recommended to be paid; the finding in that regard was unanimous, but the citizens of the locality affected in the state of Washington complained
that this was not adequate and that the principles upon which the international joint commission had proceeded did not fully take into consideration the circumstances in connection with the injuries sustained. Much discussion has taken place; finally this convention has been arrived at. The $350,000 is to be taken on account, so to speak, up to the date indicated by the convention. That money, of course, is not provided by the Dominion of Canada; it is provided by the Consolidated Mining and Smelting Company and has been made available to the government of Canada for payment to the United States.
The provisions of the convention to which particular attention should be directed are found in articles II and III. In article II it will be observed that a tribunal is to be constituted, to consist of a chairman and two national members. The article continues:
The chairman shall be a jurist of repute who is neither a British subject nor a citizen of the United States. He shall be chosen by the governments, or, in the event of failure to reach agreement within nine months after the exchange of ratifications of this convention, by the president of the permanent administrative council of the permanent court of arbitration at The Hague described in article 49 of the convention for the pacific settlement of international disputes concluded at The Hague on October 18, 1907.
The two national members shall be jurists of repute, who have not been associated directly or indirectly, in the present controversy. One member shall be chosen by each of the governments.
What they are to determine is set out in the questions mentioned in article III, as follows:
(1)	Whether damage caused by the Trail smelter in the state of Washington has occurred since the first day of January, 1932. and', if so, what indemnity should be paid therefor ?
(2)	In the event of the answer to the first part of the preceding question being in the affirmative, whether the Trail smelter should be required to refrain from causing damage in the state of Washington in the future and, if so, what extent?
(3)	In the light of the answer to the preceding question, what measures or regime, if any. should be adopted or maintained by the Trail smelter?
(4)	What indemnity or compensation, if any, should he paid on account of any decision or decisions rendered by the tribunal pursuant to the next two preceding questions?
I think perhaps the house is not concerned at the moment except with respect to the two articles I have mentioned; that is, the circumstances under which the tribunal is coming into being, the personnel of the tribunal and the questions to be determined. I need hardly say to the house that the finan-
Trail Smelter

cial obligations under which this country may be placed by reason of any determination of this tribunal will foe paid by the smelter company affected under an arrangement that has been made with them.
The question as to why the Dominion of Canada should be in the matter at all received very careful consideration before this government came into office, and it was felt that the only method by which the claim made by nationals of our neighbour could be disposed of satisfactorily would be through some action taken by the national government of this country on the one hand and of the United States on the other. When the international joint commission reported up to the end of 1931, the matter now is being treated as having been concluded up to that point, and the payment of money is being made for the liabilities that resulted from the poisonous fumes circulating in the state of Washington up to the date of that award.
I do not think there are any other questions calling for consideration in connection with this convention. If there are I shall be very glad to endeavour to answer them. I may add that the convention has been ratified by the senate of the United States.


Hon. CHARLES STEWART (West Edmonton) :: I am not just clear as to whether
the $350,000 is settlement in full up to 1932, because I understand that there has been considerable damage since then.


Richard Bedford Bennett: Yes. Article 1 provides:
The government of Canada will cause to be paid to the secretary of state of the United States, to be deposited in the United States treasury, within three months after ratifications of this convention have been exchanged, the sum of three hundred and fifty thousand dollars. United States1 currency, in payment of all damage which occurred in the United States, prior to the first day of January, 1932, as a result of the operation of the Trail smelter,


Charles A. Stewart: I only asked the question because at one stage of his address the Prime Minister remarked that this was an interim payment. It is settlement in full?


Richard Bedford Bennett: Yes, up to that date.


Hon. ERNEST LAPOINTE (Quebec East):: I realize that we are not in committee, but I should like my right hon. friend to say whether in its report the international joint commission recommended the appointment of a tribunal such as the one provided for by this convention. Is there any particular reason why there should be a special tribunal, because the international joint commission it-

self, under the law, has authority to deal with such matters when they are submitted to that body by one or other of the tw'o governments?


Richard Bedford Bennett: I believe it is only necessary to say that the United States was not prepared to accept the international joint commission as the tribunal to deal with this matter. Perhaps it will be recalled by the right hon. gentleman opposite that it was agreed between the two nations that the conclusion arrived at by the international joint commission with respect to-damage up to January 1, 1932 would be advisory, rather than in the nature of a judgment.


Mr. MACKENZIE (Vancouver):: May I ask if any of the cost of the new tribunal will have to be borne foy this government, or by the smelters corporation?


Richard Bedford Bennett: I shall know nothing until the finding is made. So far as we are concerned they will be indemnified by the corporation.
Mr. POULlIOT: In view of what has been said by the leader of the government may I ask if anything has been done by the government in connection with the commuter's problem in Windsor? Nothing has been done?


[Stage Direction]
Motion agreed to.

[Stage Direction]
PURCHASE, STORAGE AND MARKETING OP WHEAT .	AND OTHER GRAINS
Right Hon. R. B. BENNETT (Prime Minister) moved that the house go into committee to consider the following proposed resolution:
That it is expedient to bring in a measure to establish a board to be known as the Canadian grain board with power to purchase, receive and take delivery of wheat, oats, barley, rye and flax-seed, or any one or more of such grains for marketing and to sell, store, transport and market such grains, and to provide for the appointment of such clerks, employees and assistance as may be necessary, and to provide for their remuneration and for the expenses of, and arising out of, the operations of the board.
He said: Mr. Speaker, I do not propose to make a lengthy speech to-day upon this matter, or at any rate at this stage, because obviously what I might say would probably be in response to questions which might be asked, and it is perfectly clear that there is no opportunity to do that in the mere movement of the house into committee to consider the resolution.

Grain Board-Mr. Bennett
I think possibly I should say that once in this country we had a grain board brought about, of course, by the exigencies of the war. The situation at the present time, without going into the matter in detail, is that this country has not been able to market all its wheat, and that there is a large surplus of unsold wheat, or an accumulation of surpluses beginning in 1929 and followed by a further large carryover in 1930 and in succeeding years, by reason of large crops.
I shall not at the moment deal with the political side of the observations which have been, made by hon. gentlemen opposite, because the matter is far too serious to discuss from the standpoint of narrow party politics. I should like to say however that I am prepared to give the committee the fullest information as to the world movement of wheat to indicate, notwithstanding what has been said notably by the hon. member for West Edmonton (Mr. Stewart) that tariffs had something to do in preventing the sale of wheat in France and Germany. If the hon. member would just look at the imports into France, the imports into Germany and the imports into Italy I think he would probably arrive at a different conclusion.. AH that is necessary to do is to point out that there has been no diminution in the use of wheat by the people of the world and that, for instance in 1934 the entire wheat purchases by France were from Canada, with the exception of 1,000,000 bushels. All the wheat France imported from abroad, with the exception of something like 1,000,000 bushels, came from Canada, and that of the importations into Germany the greater part came from Canada. But those importations were very trifling. For instance, in the last five years the largest sale of wheat to France was 31,000,000 bushels. That was a period of time, of course, when France was not herself producing ample wheat for her own requirements.
I have already traversed this matter on more than one occasion, and to-day I desire only to make this simple observation, that owing to the result of post-war action on the part of countries which -were formerly wheat importing countries they have placed themselves in a position where to a very large extent they are free from the necessity of importing wheat from any country. For instance today France is a large exporter of wheat. In the year 1934 she exported large quantities of both wheat and flour to Great Britain and to other parts of the world. I suppose it must be known to hon. members that in this present year France is exporting wheat,-denatured wheat,-to the United States under the world's
wheat agreement. I might add that the Pontine imarshes of Italy, now available for the production of wheat, has placed under cultivation thousands of acres which never before produced wheat, and the use of fertilizers has increased the yield per acre in Germany to an extent even greater than it was before the war.
The essential fact for us to recall is that the countries of Europe which during the war did not produce wheat found themselves dependent upon the countries which did increase their production, notably Canada, and that unfortunately for us for some strange reason we did not realize that in 1925, 1926, 1927, 1928, 1929 and 1930 the countries of Europe had recovered their pre-war position-not only recovered it, but greatly strengthened it, and were' supplying not only their own requirements but were also on an export basis.
Under these circumstances the position was a very simple one. The question was whether or not chaos should reign in respect to the largest industry we have, in point of value of exports, or whether something should be done to endeavour to save it from the chaotic condition prevailing. Something was done. It may be that there is some desire to discuss the matter at length. I am prepared to do it in every detail and in every particular. It will be recalled that when before a committee opportunity was afforded for discussing the matter in detail, by a majority vote it was decided that such discussion would not be in the public interest. The determining factor at that time in the committee was hon. gentlemen opposite.
But eliminating that consideration for the moment I am merely pointing out that the world has been producing so much more wheat than it has been consuming that there is a large surplus, and that that surplus must be taken care of by some orderly method or we will have a complete dislocation of the whole wheat industry in Canada. We might as well face it frankly. I am not going to dwell upon these matters at this time further than to say that there were certain well defined conditions which during war time necessitated the creation of a wheat board. At the present time we have a condition whereby we have large quantities of wheat unsold. We and the rest of the world, namely the wheat producing countries of the world, have a substantial surplus of wheat over world requirements, but, as I have stated previously I shall not go into a detailed discussion. of the matter at this time. I merely state that I am in a position to give the figures when they are required.
[Stage Direction]
Grain Board-Mr. Mackenzie King
I desire to direct the attention of the house to the particulars of the resolution itself. Assuming that the house is of the opinion that it is desirable in the public interest that there should1 be a board to deal with the most extraordinary situation that has ever existed in regard to wheat so far as we have a record, because it will be recalled that the price of wheat in 1932-33 reached the lowest point in four hundred years-there is a complete record of the price of wheat in the various parts of the world for over four hundred years, and as I say wheat never reached a lower price in five hundred years than it did in 1932-33"-under those circumstances, and with the surplus now existing it becomes essential to deal with the situation in some orderly manner. To the extent to which it may be possible to do so except through a wheat board I shall be very glad indeed to hear opinions expressed by members of this house. But if we conclude, as I believe the house will, that a wheat board is essential, then you ask yourself two simple questions: First, what power has this parliament to create such a board; and second, what shall be its powers?
With respect to the first, there has been a modification of the legal position by reason of the fact that the Grain Act was amended when it was decided by the supreme court, by a majority with the Chief Justice dissenting, that the Grain Act was ultra vires in so far as certain sections of it were concerned; and it was indicated that it could be made intra vires if the facilities or elevators were declared to be works for the general advantage of Canada. And so. under section 233 of the Grain Act, as consolidated in 1927, the declaration is made that these elevators, which are usually on the right of way of various railway companies, are works for the general' advantages of Canada.
The bill predicated1 upon this resolution would limit its operation to interprovincial and international trade. It would not seek to deal with purely domestic trade in any one province for that might be entirely beyond our jurisdiction.
The next question is, what shall be the powers of the board1? The board will1 be empowered, as the resolution indicates, to deal with wheat as buyers and sellers and the sole marketers of it for the purpose of ensuring that it shall find at least as large a market as possible under the circumstances that now exist.
That is all that can be usefully said1 on the resolution itself, but at the appropriate time I shall make a more extensive statement than that which I have now made.
Right Hon. W. L. MACKENZIE KING (Leader of the Opposition):: Mr. Speaker, my purpose is not to discuss the resolution but rather to ask my right hon. friend a question as to his intentions in the matter of procedure. It has, I think, been customary in connection with a measure of this importance to have it referred either to one of the select standing committees of this house, in this case I presume it would be the committee on agriculture, or to a special committee. If we knew at this stage the intention of the government in the matter it would enable us to govern ourselves accordingly in the discussion on the resolution.
May I say that I agree with the Prime Minister that this question is far too serious to be dealt with in any narrow partisan manner. I believe it is as serious as any problem which has faced this country at any time, and too great care cannot be taken in the consideration of what is to be done. It is for that reason I feel that if the government could see its way to refer the bill to a select or special committee it is wholly probable that some of the points which may be obscure at the moment would be cleared up and possibly much in the way of confusion and controversy avoided.
As I read the resolution it is in very general terms, and does not go beyond recommending the establishment of a board. We shall not know what powers the board will have other than has been indicated thus far by the Prime Minister until we see the bill itself, and differences of view that otherwise might arise might perhaps be wholly avoided if the powers of the board were settled in a committee in advance. I therefore am asking the Prime Minister if he wrould say to the house that when the resolution carries and the bill has been introduced it would be understood that it would be referred to a select committee. If not, I .may say that on the resolution itself a great deal of information will necessarily have to be sought.
May I say that, while to-day the Prime Minister has indicated his willingness to give full information, up to the present the opposition has not pressed the government either in the matter of proceeding with this measure or in respect to the wheat situation generally, realizing that the Prime Minister himself would wish to have charge of the measure and that there were considerations of public policy involved of which account should be taken, also that there might foe in connection with this great problem some features or aspects which the gov-

Grain Board-Mr. Coote
ernment might feel it would not be advisable to disclose for fear of some effect the disclosure might have upon the market or upon existing or future conditions. That may or may not be the view held by the government. I do think that in a matter of this importance it is advisable that the fullest information possible should be given to parliament. If there is anything that for any reason should not be given to the public either immediately or possibly until later on, that knowledge should at least be in possession of hon. members of parliament. That could be so arranged in a committee, where there might be objection to making public at this stage some of the facts of which we would wish to have full knowledge.
Those are some of the considerations I have in mind in asking the Prime Minister if he is prepared to consider referring the bill to a select committee after it has been introduced.


Richard Bedford Bennett: Mr. Speaker, I would be sadly lacking in consistency if, believing as I do that this is one of the most serious problems that confronts the Canadian people, I did not accept at once any suggestion made by the right hon. gentleman as to cooperation in dealing with the problem itself, and if he believes that the matter would be better dealt with by a committee than by discussion in this house I would be the last man not to accept his suggestion of cooperation in that way.
The question as to whether or not it could better be done by a select or special committee is one that I should like to have some time to think about. The right hon. gentleman was good enough to mention to me his suggestion as he came into the house to-day. He thought a committee should deal with the problem. Under those circumstances I should like to reserve the settlement of that question until I have had time to give it a little thought, but I believe that it is my duty to accept one of those methods in dealing with this question. I would therefore suggest, reserving the right of the opposition, or of any member of this house for that matter, not to be regarded as approving the resolution merely because we adopt it, that after the resolution is agreed to the bill be given its first reading so that hon. members will have the opportunity to read it. I believe that under the rules the bill must then be given a second reading and referred to a committee, whether a standing committee or a select committee. I would have great pleasure in following that course if it commends itself to the judgment of the house. In that event I 92582-220
probably on the second reading would make a statement that would enable hon. gentlemen who desire to consider the bill in the light of the facts as I understand them to be able to direct their minds more intelligently, if I may say so without reflecting at all on their intelligence1-more effectively to the problem itself in the light of the information I might be able to furnish on the second reading.


Mr. G. G. COOTE (Macleod):: Mr. Speaker, I would just like to say a very few words in regard to the resolution which has been introduced. First I would say that in my opinion the wheat problem is the gravest problem confronting Canada and confronting this parliament to-day. I shall quote just one statement that was made by Sir Edward Beatty in a recent address in Toronto, when he said, speaking of our wheat production:
In, the five years of expansion from 1925 to 1929 inclusive, our production rose to a value of $2,178,000,000.
In the five years of the depression, that is the following five years of 1930 to 1934 we produced $760,000,000 worth of wheat. Anyone who reads these figures must agree that that is perhaps the greatest underlying cause or factor contributing to the depression. In the next paragraph Sir Edward Beatty made this very significant statement when he said:
No farmer in western Canada is more interested in the yield and price of our wheat crop than are you, the businessmen and workers of Toronto.
I am very pleased the Prime Minister (Mr. Bennett) has introduced a resolution looking to the setting up of a wheat board and I should like to refer to one phase of this matter with which the Prime Minister dealt, that is the powers of the board. It is hardly necessary to point out that at the present time there is a large volume of wheat held in Canada. We all know that the government has been supporting the market price of wheat and this matter is of great importance to the Canadian wheat producer. I should like to know from the Prime Minister, either now or when we are in committee, whether this board will continue to have the financial backing of the government in the support of the market price of wheat. In other words, will the market 'price of wheat be supported by the government through the operations of this board? In my own opinion the desirability at this particular time of establishing a grain board hinges on this one question. This question is of supreme importance and that is why I wanted to emphasize that point.

Grain Board-Mr. Bennett


Richard Bedford Bennett: The bill will disclose what the powers of the board will be. I do not propose to undertake on behalf of any government to say just what the government will do.


William Lyon Mackenzie King: I have spoken already 'but I should like to add that I appreciate the position taken by the Prime Minister (Mr. Bennett). I realize that he will wish to decide whether it is preferable to refer this bill to a select committee or to one of the standing committees. It is understood that by proceeding in this manner no hon. member will be prejudiced or committed in the stand he may wish to take on any of the provisions of the bill in virtue of approving of the second reading. I repeat that, with this understanding, I think the course suggested, in which the government now acquiesces, will prove to be best with respect to this important matter.
Motion agreed to and the house went into committee, Mr. Morand in the chair.


George Gibson Coote: Before the resolution is adopted formally I should like to know if the Prime Minister (Mr. Bennett) cannot give us a little more information with regard to the powers and financial operations of the board.


Richard Bedford Bennett: When the bill is submitted to the house the government will be glad to hear any suggestions which might be made by hon. members with respect to the powers of this board. It would be highly improper for me to undertake to say what any government might or might not do in the future. It is contemplated that the government will be given the power to give such assistance to this board as may be necessary to enable it to function. Beyond that I feel I could not and should not go. It is suggested that either a special committee be set up to which this bill would be referred or that it be referred to the standing committee. The government will welcome rather than regret any suggestions which might be made by hon. members in the form of amendments or otherwise. This is not a long bill and I do not think it is a difficult bill to understand. I believe the bill is printed as the copy I have in my hand is a printed copy which was approved this morning. If this resolution passes I would ask for first reading of the bill and take the second reading on Wednesday at which time I will make a statement as ample as possible with respect to the whole situation. By that time we will have decided whether this bill will be referred to a select committee or to the stand-

ing committee. My personal view at the moment is to refer it to a select committee of seven or nine members but this view is subject to modification as I give it further thought and consideration.


Charles A. Stewart: I anticipate that I shall have a few things to say about this bill but I intend to wait until second reading before making any statement.
Resolution reported, read the second time and concurred in. Mr. Bennett thereupon moved for leave to introduce Bill No. 98, to provide for the constitution and powers of the Canadian Grain Board.
Motion agreed to and bill read the first time.



FAIR WAGES AND HOURS OF LABOUR

[Stage Direction]
Hon. W. A. GORDON (Minister of Labour) moved the second reading of Bill No. 75, respecting fair wages and hours of labour in relation to public works and contracts.
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Morand in the chair.
On section 1-short title.
Ernest Lapointe: I should like the minister to give the committee some explanation of this bill. We have already upon the statute books a law concerning the hours of labour on public works and under public contracts. I can see that this bill is to add the forty-four hour week to the eight hour day which exists under the present law. But this is going to apply to public works. I wonder whether it is worth while to enact this legislation at this time when this country has delegates sitting even to-day at Geneva for the purpose of considering a draft convention to establish a forty hour week, more particularly on public works either undertaken by governments or subsidized by them. The international labour conference which is now sitting and where we are represented is at this moment studying this very question, except that instead of a forty-four hour week as proposed by this legislation, the draft convention contemplates a forty-hour week on public works either undertaken by the governments themselves or subsidized by them. I would like my hon. friend to tell the committee w'hat is the stand of Canada on the draft convention which is being submitted at Geneva at the present time. It seems that by asking the house to enact this legislation, the government is not favouring the draft convention which is being submitted to our delegates at Geneva.

Fair Wages and Hours oj Labour
I should also like my hon. friend to say whether the delegates of the ' government of Canada have special instructions as to the stand they are to [DOT] take on this Geneva convention.


George Gordon: The purpose of this bill
is obvious. We have now an enactment respecting fair wages and an eight hour day for labour employed on public works for the Dominion of Canada. The substantial changes* in the present bill are to implement the royal commission's report by way of the adoption of a forty-four hour week with respect, to contracts for the construction, repair and so forth of federal buildings and the adoption of an eight hour day in connection with work that may be performed by a province or any other body to which the dominion government subscribes public money.
The reason is not obscure why a forty-four hour week is not imposed under section 5. It was thought by the law officers of the crown and those who advised in the preparation of the legislation that the adoption of a forty-four hour week with respect to the class of work contemplated by section 5 might very well give rise to an invitation to impeach the validity of the legislation on the ground of its unconstitutionality. Those are the substantial changes that are .made in the bill from the provisions which prevail in the enactment now on the statute books.
With regard to the deliberations now being carried on at Geneva with respect to a forty hour week on similar works, I would say only this: if such a convention is adopted at Geneva, is ultimately ratified here in Canada and is translated into legislative enactment, then it will be, I think, soon enough for us to take a further progressive step in the reduction of hours of labour. These things cannot all come at once. I would prefer- and I say this with the greatest respect to the hon. member for Quebec East-to take these matters up in progressive steps as we are sure of our course and certain of the legality of the legislation which we are enacting.


Ernest Lapointe: But we are taking a step at the present time; we have representatives at Geneva. Surely they must have some instructions as to the stand they are to take on this question, whether we should have a forty hour week on public works.


Richard Bedford Bennett: As the hon. member knows, communications between Geneva and the government of Canada are carried on through the Department of External Affairs. The Department of Labour was advised of this discussion. I think the hon. member in 92582-2204
this and other matters has overlooked the fact that no draft convention binds any country until such time as that country accedes to it. It is for the parliament of Canada to say whether or not it accedes to it. If it is unanimous on this as it has been on other conventions submitted to it during the present session, there should be no objection on that score. But- the government take the view, rightly or wrongly, that inasmuch as at this session of parliament we had expressed in formal terms our approval of the convention, our delegates should be instructed to inform the committee at Geneva of that fact and indicate that this government was not at the moment prepared to instruct its representatives to vote for or against the draft convention for a forty hour week but would rather they indicate what we were doing and state that if the draft convention were passed and recommended by the international labour office-it is not, as the hon. gentleman has said, the international labour conference-and the convention, if one were arrived at, dispatched to us as soon as possible we would communicate, as we have done heretofore, with the various provinces to indicate just what had taken place so that thej' might make their representations known to the parliament of Canada to enable it to determine what action it would take in the way of approving or disapproving the draft convention. But in view of the fact that this bill was standing on the order paper from the earlier part of the session we would not instruct our delegates to vote for or against such a draft convention but would ask them to indicate exactly what the position was and to act accordingly.


Ernest Lapointe: I am grateful to my right hon. friend for stating that I had overlooked the fact we are not bound by this convention until we have ratified it. I knew that. I believe this parliament of Canada is not bound even when this draft convention is adopted over there. This question has been discussed previously. But I wish to draw my right hon. friend's attention to this fact. He seems to indicate that the delegates of Canada have no formal instruction to vote on this question when the draft convention is submitted to the conference. Well, that is what happened last year; in common with the delegates of other countries they abstained or refrained from voting, with the result that there was not a sufficient number of votes for the adoption of the draft convention. There was much criticism, in labour circles more particularly, with regard to the

Fair Wages and Hours of Labour
stand taken by the delegates of some of the governments at the conference. I infer from the statement of my right hon. friend that our delegates have no instructions even this year, and I am afraid that the result may be the same as last year.
However, I have no objection to this bill, except that it seems a little futile that we should enact this legislation at a time when the very matter of the length of the week of labour is being considered at an international conference where we are represented and our delegates are sitting.


Richard Bedford Bennett: I think perhaps the hon. gentleman has overlooked the fact that even if a draft convention were arrived at there it might be five or six years before it would become effective. Therefore it is desirable that this legislation should be enacted in the meantime. Mere discussion at Geneva and arriving at a draft convention does not give it any validity as far as Canada or any country is concerned until it is ratified or acceded to. That is the reason they are called draft conventions. It may well take a period of years before final action is taken. But there is always ample opportunity to accede to the draft convention during the time that elapses from the time of its adoption by the international labour office and the time that it is sent forth to the world and a sufficient number of nations have indicated their approval to give it validity. The action taken at Geneva does not in any sense do more than launch the draft convention, to enable the nations to determine what action, they shall take. Canada's action at Geneva would not have any effect to bind Canada to a forty-hour week, that would have to be done by this parliament after the convention is settled and a sufficient number of nations have acceded to it to make it effective, as perhaps the hon. gentleman knows better than I, for he has followed these things longer and perhaps with more care. But I have satisfied myself that it is desirable to enact this legislation, having regard to the long period that may elapse before any substitute legislation may take its place.
As far as our own delegation is concerned, do I understand the hon. gentleman to recommend that our delegates should be empowered to vote for a convention containing a provision for a forty-hour week?


Ernest Lapointe: No, I should think the Canadian government should give instructions, whatever they foe, not place our delegates in a situation where they could refrain from taking a stand, as last year.


Richard Bedford Bennett: Last year there had been no ratification of the forty-four hour week, and it is because we have now taken that step that we have instructed our delegates to explain just what the facts are and that it is matter for discussion. The government has had no opportunity, in view of the ratification of the forty-eight hour week to discuss with the various provinces and bodies affected what might be their considered view with respect to this matter. But if as the hon. gentleman said, action is taken in the way of a draft convention, then this parliament will in the light of the knowledge it secures in the manner indicated be able to place before the Commons and the Senate a full statement with respect to the attitude of mind of those who may be affected.


Mr. WOODSWORTH:: I failed to follow the argument of the Minister of Labour (Mr. Gordon) a- few minutes ago. I can understand that if after the ratification of a treaty we were bringing in legislation to implement that ratification it would be general legislation, and might have to be somewhat limited in character. But this bill does not provide general legislation w'th regard to the work day but is limited to the work day on public works, and works assisted by the government. I cannot quite see how the minister can take the ground that the dominion government is not competent to decide how long men may work on government works or contracts to which the dominion government is a party. It seems to me that in that case it is quite competent for this parliament to state any hours it pleases without in any way getting into constitutional difficulties.


George Gordon: I do not think the question raised by the hon. member should cause any great difficulty. I am quite in agreement with him when he states that on purely federal works this parliament would have sovereign authority to make a one-hour week if it chose or a week of any other number of hours within the number contained in a week. The change with respect to purely federal works was to bring the construction of such works into harmony with the recommendations made by the royal commission on price spreads and mass buying. That amendment appears in section 3, subsection (1) (b) of the bill.
Then with respect to the new section, section 5, which deals with work to which the dominion, the federal state, may contribute by way of subsidy, loan, advance or guarantee; with respect to that class of work this enactment goes no further than the forty-eight hour week, because as I said a few

Fair Wages and. Hours of Labour
momenta ago, where the work is primarily-being carried1 on by another agency and the federal state merely contributes, then we might well imperil the legality of the bill by going further than we believe we have the right to go under the legislation recently introduced with respect to the adoption of the eight-hour day.


James Shaver Woodsworth: That is the very
point.


George Gordon: Just a moment, I shall
try to clear this up. But while the legislation with respect to that class- of work confines the dominion to an eight-hour day ostensibly, yet-and I think this keeps us clearly within the law-there is nothing in my judgment to prevent this government entering into an agreement, say, with a province, say, with any other agency, where it seems proper that the federal state should subscribe, that one of the conditions of that agreement should be that it shall conform to a forty-four hour week or such other regulation as might be imported- into such an agreement as a condition for the advance.


James Shaver Woodsworth: Then as I understand it would be quite competent for us in any section of this bill to provide for a forty-four hour week or a week of any number of hours?


Richard Bedford Bennett: Forty-four is in.


James Shaver Woodsworth: In one place it
says forty-eight. My suggestion is that it seems to be quite competent for us to provide in any section or all sections for the forty-four hour or even the forty h-our week.


George Gordon: I am afraid I have not made myself clear. This parliament may insert any number of hours they want, and invite the impeachment of this law on constitutional grounds. That is what I do not want to see happen. But, as I have explained, in section 5-which deals with work to which the federal government may contribute-we are careful to see that we conform to the authorities and powers that we believe we presently have under the eight hour day bill which recently passed- through parliament.


James Shaver Woodsworth: But surely we
would not need to contribute-


George Gordon: That is exactly what I
have explained. That matter can be easily made the subject of any agreement that may be entered into, and a condition imposed that certain hours of work will have to prevail if the contribution is to be made.


Mr. KENNEDY (Winnipeg):: With respect to the point under discussion, referring to government contracts that are entirely federal undertakings subsection (b) of section 3 says:
The working hours of persons while so employed shall not exceed eight hours per day nor forty-four hours per week-
Apparently the right to make that provision is unquestioned. Then turning to section 5, to which the hon. member for Winnipeg North Centre has referred, this deals with agreements for work involving dominion aid. That is, aid may -be granted by loan, by credit or by any other means, to any undertaking, and we must bear in mind that such aid always will be granted under some agreement with the province concerned. In any such agreement, according to this section, there shall be inserted certain stipulations, including:
-the following conditions respecting fair wages and hours of work, that is to say. the condition respecting fair wages set forth in paragraph (a) of subsection 1 of section 3 of this actand then-
-and the condition that the working hours of persons employed in the execution of the work shall not exceed eight hours per day-
The suggestion of the hon. member for Winnipeg North Centre (Mr. Woodsworth) is that there is no reason why there should not be inserted, after the eight hour provision, the phrase that appears in subsection (b) of section 3, "nor forty-four hours per week." I quite agree with the hon. member for Winnipeg North Centre; in fact I had made a notation to suggest that these words should be inserted.
With respect to the point raised by the Minister of Labour, as I followed him he indicated that this has not been put in because it might imperil the validity of the enactment. But if you read the section in question you will see that by this bill pro-vision is made setting a weekly maximum of forty-four hours in any undertaking into which a provincial or other body enters with the federal government, by inferring that in every agreement between this government and a province or municipality that provision will be inserted. But this whole section deals with cases in which aid is granted; this section sets out the agreement and then says that in every such agreement there shall be inserted certain stipulations. One is in connection with the eight hour day; another is in connection with the forty-four hour week. It seems to me that it is competent for this parliament to lay down the regulation that if the federal government enters into a contract with a province, a municipality or any other body

Fair Wages and Hours oj Labour
to grant aid, they can lay down the terms upon which that aid will be granted. So I submit that it would be quite competent for parliament to do so, and obviously it would be valid to insert those words in subsection 2 of section 5, namely the words "nor forty-four hours per week" after the words "eight hours per day," as appearing in subsection (b) of section 3, and I so suggest.


George Gordon: I will only refer to the
point once again; at least I trust I will have to refer to it only once again. It is gratifying, at least, to note that two members from Winnipeg agree on one subject at the same time. In my mind there is a clear distinction in the interpretation of this section, and of course I get some comfort out of the thought that very eminent legal minds have assisted in drafting section 5. In this section it distinctly states that the working hours of persons employed in the execution of the work shall not exceed eight hours, per day. That is in harmony with the legislation which passed through this parliament only recently. Some hold the view that that legislation is not constitutional; the government believe it is constitutional. To avoid the possibility of an impeachment of this legislation by reason of an imposition, direct or implied, upon some other agency whether it be a province or a municipality-and the province is what I am directing my remarks to at the moment-the provision is made in the legislation itself that in the agreement which may be fashioned under the provisions of the bill the forty-eight hour week shall not be exceeded. I have no doubt, however, that operating under the bill itself and through to the agreement which may be entered into between this parliament or the executive as the case may be, and a province, it would be quite legal to bring the -working hours into harmony with the forty-four hour week or any lesser period of time that might be a condition imposed by this parliament when a grant was being made, and to withhold a grant under such an agreement if the spending authority did not conform to the condition that attached to the grant or guarantee.


James Shaver Woodsworth: I do not know
whether or not we have made ourselves plain in this matter, but the legislation passed recently consonant with the ratification of the treaty was general legislation referring not merely to government contracts but to all work. It was in that connection that it was considered that if we had exceeded the terms of the treaty or the convention that legislation might have been regarded as unconstitutional. In this case, however, my point is that this bill deals particularly with IMr. D. M. Kennedy.]
dominion public works or such works as are assisted by dominion grants. That is a specific matter over which the dominion has control. In this measure we are discriminating between two classes of workers. On the one hand we have those on government contracts who are not permitted to work more than forty-hour hours a week; on the other hand w-e have those on contracts to which the dominion government makes grants, who are permitted to work forty-eight hours a week. The minister takes the ground that this section cannot be brought in harmony with the first section because we might invalidate the whole legislation.


George Gordon: No. I say it can be done mder the agreement but not under the bill.


James Shaver Woodsworth: I was going on to say that the minister says it can be arranged under the agreement, but if he will turn to subsection 2 of section 5 he will find the conditions to be stipulated in every such agreement. We are talking about the very thing to which he has referred. We ask that these conditions be stipulated in the agreement; we are not asking anything else. We are simply providing that this be put in black and white in the agreement. I cannot see how in connection with any agreement there could be any difficulty about inserting the provision for foi'ty-four hours, as was done in the preceding section.


Mr. GUTHRIE:: If I understand my hon. friend's objection correctly it is that the forty-four-hour provision should be stated in connection with all contracts made for work which is not strictly speaking work performed by government servants. We make contracts here, and we can stipulate in connection with our contracts the terms we expect to be carried out. But we also make grants to provinces and to municipalities in connection with works which they propose to carry out; those are grants in aid. As the bill was originally framed and submitted to council the clause applied to all works carried on in provinces and municipalities to which we had made government grants or appropriations.
The bill was then submitted to Mr. Tilley, K;C., and Mr. Geoffrion, K.C., and they both pointed out that that provision in regard to the work performed by contractors other than government contractors would be invalid and beyond the powers of this parliament, as contravening provincial legislative jurisdiction. But they both said, "You can achieve the purpose you have in view by inserting in your bill section 5, as it appears in this measure." Namely, it was indicated that we

Fair Wages and Hours oj Labour
could insert terms in our agreements with provinces and municipalities which would bind them in respect of any terms upon which we decided. They said that if we placed it in the bill it would constitute a clear infringement of provincial jurisdiction, but that we could put it in an agreement as a term or condition upon which a grant would be made, and that by doing that we would achieve the same end. Consequently the bill is in its present form.


James Shaver Woodsworth: Subsection 2 contains the regulation with regard to an agreement, and it specifies that we shall enter into such agreements only under certain conditions.


Hugh Guthrie: To which subsection do you refer?


James Shaver Woodsworth: Subsection (2) of section 5. It reads "In every such agreement- "


Hugh Guthrie: "-there shall be inserted" the stipulations which I have mentioned.


James Shaver Woodsworth: Yes, and we suggest that they be inserted in such a way as to ensure no more than eight hours a day or forty-four hours a week.


Hugh Guthrie: We might wish to make them less than that.


James Shaver Woodsworth: We are asking simply this, that subsection (2) be brought into conformity with section 3. I can see no objection to that. Of course, I hesitate to take issue with the eminent counsel to whom the minister has referred, but it does seem to me that we should not simply have great names hurled at us so as to silence us. We ought to use our own brains. The government has already sponsored certain legislation about which Mr. Tilley and the other eminent gentleman expressed some doubt.


Hugh Guthrie: Some doubt is correct.


James Shaver Woodsworth: Yes.


Hugh Guthrie: There is no doubt expressed by them in connection with this matter.


Donald MacBeth Kennedy: I should like to say a word on the point in question, namely, as to the validity of inserting after "eight hours per day" in subsection (2) of section 5 the words "nor forty-four hours per week."
I hesitate to differ from such eminent counsel as have been mentioned, but this subsection does not attempt to legislate as
to the hours which any province or municipality shall stipulate. It merely provides that if the federal government grants money in aid of a province or a municipality, or in fact any other body, then it shall insert certain provisions in the agreement. In the event of there being no such regulation, when the federal government came to deal with a province asking money in aid of works the federal authorities could work out an agreement. It would competent for the federal government to make such terms as they saw fit, so long as they agreed with the other bargaining party. They could agree that they would grant money only on the condition that the men working on the job worked a certain number of hours per week or day. This section proposes to give directions to the government when entering into any such agreement that they shall insert a provision that the workman shall not work more than eight hours per day. I submit it is perfectly competent for this parliament to instruct the government to insert in any such agreement a further provision that it shall not exceed forty-four hours per week. That would not be legislating for the provinces. It would simply place the federal government, when dealing with the provinces, in the position of deciding whether or not it will enter into an agreement to grant assistance in respect of works, and in the position of stating that they will grant assistance only when that provision appears in an agreement.
Section 1 agreed to.
On section 2-Fair wages.


George Gordon: I believe section 2 has been copied from the present act and gives rise to some ambiguity. Unfortunately the draftsman has carried the phraseology into this seotion. The section begins with these words:
In this act, unless the context otherwise requires, "fair wages" means such wages _ as are generally accepted as current from time to time for competent workmen.
That wording, as hon. members will realize, might cause great confusion. A contract might be entered into to-day and wages change to-morrow. In order to clarify the situation I should like to move:
That section 2 of the bill be amended by striking out the words "from time to time" in the third line of the said section, and substituting therefor the words "at the date of the contract, when such work is being performed' by contract."


Hugh Guthrie: I so move.

Fair Wages and Hours of Labour


William Lyon Mackenzie King: May I ask the minister if that does not change the intention of the definition as set forth in the original act? Was the definition not intended to leave room for the possibility of altering the rate, assuming that the wages in the district were to alter over a period of time? For example, in a contract running for three or four years the rate might be one thing this year and another next year. I believe it was the intention in the original definition to indicate that if the general rate altered, the rate in the government contract should be made to correspond with it.


Mr. HEAPS:: I do not believe the amendment would clarify the situation. I am of the opinion the point raised by the right hon. gentleman is pertinent, and the difficulty he points out would cause trouble in the event of a contract continuing for twelve months. The whole clause appears to be ambiguous, because it uses the expression "accepted as current from time to time" or, as the amendment suggests, "at the date of the contract." I can find nothing in the section which in any way compels the government to accept any fair wage clause or fair wage legislation which may be in operation in the various provinces. There may be in operation in a province a fair wage act which specifies certain wages to be paid on a certain class of work to mechanics or labourers. Under its present wording this section does not indicate that the fair wage must be accepted. But there may be wages paid that are considerably below the wages specified in the fair wage act and yet it might be the current rate of pay. You might have a dual rate of pay in a district, and unless this clause is made more specific than it is at present it probably will give rise to a good deal of confusion and misunderstanding. I would like to see something in this clause which would compel the contractors in various parts of the country to accept wherever they are in effect the fair wage laws of the provinces and pay that rate of pay on all government contracts. I think the word "current" should be cut out entirely from the clause. At the present time I think the minister must know that there is a good deal of dissatisfaction, and strikes I believe in one or two places, where government contracts are being carried on because the wages paid are below even the accepted rates of pay as understood in those localities. If this clause is going to give rise to confusion I think the minister ought to make it more specific than it is at the present time in order that there may be no misunderstanding wherever government contracts happen to be let.


George Gordon: Mr. Chairman, in the light of what the right hon. leader of the opposition has said we are prepared to drop the amendment. With respect to the observations made by the hon. member for North Winnipeg (Mr. Heaps), if there has been any strike on federal government contracts by reason of the non-payment of fair wages I would like to be advised if the hon. member knows of any such strikes, because great care is taken and has always been taken by the Department of Labour to see that fa:r wages as defined by the act are inserted in the schedule attached to and which becomes a part of the agreement of every contractor who is contracting to do and is doing federal construction work. If that contractor does not pay the wages according to the schedule which is part of his contract, then when the Department of Labour is notified, and it does not need to be any formal notification, just a letter or a post card or a telegram, investigation is immediately made, and if it is found that in any class of labour on federal works the contractor as failing to pay the wages as stipulated by the Department of Labour and accepted by the Department of Public Works the amount is at once held back from the contractor until full investigation is made, and if it is found that the allegations are correct the amount is paid direct to those who have been underpaid according to the terms of the agreement.


Abraham Albert Heaps: I will give the minister
privately a couple of instances perhaps later on in the afternoon, because I do not want to bring the names of any individuals into the discussion. But I do know of two instances. I think there is some trouble right now in the contract let for the building of a post office in Montreal. I have sent out for the newspaper files. There are also low wages being paid on government contracts in Manitoba, the facts of which I shall be glad to let the minister have.


George Gordon: I would be glad to be advised of them.


Abraham Albert Heaps: What I am trying to do, Mr. Chairman, is to have this clause made a little more specific than it is at the present time because the word "current" referring to current wages is very ambiguous. The wages in a district may be only thirty cents per hour, and yet the wage stipulated by the fair wage act of the province may be forty-five cents per hour. In that case the contractor would be quite justified, according to the wording of the act, in paying the lower rate of wages because strictly speaking he would be within the terms of the act. I am asking

Fair Wages and Hours oj Labour
the minister if he will not so word this clause as to compel the contractor to pay the wages as specified in the fair wage acts of the various provinces and of the dominion.


George Gordon: Mr. Chairman, I think that upon reflection the hon. member will not pursue that argument further. Surely the federal government is quite as able to determine what fair wages are as any province of Canada, and I do not say that disrespectfully of any province. If section 2 is examined further it will be observed that fair wages not only means "such wages as are generally accepted as current from time to time for competent workmen in the district in which the work is being performed," but at the end of the section there are these words, "but shall in all cases be such wages as are fair and reasonable." We have very .competent officials who determine both those sets of facts, if both have to be determined-what fair wages are generally accepted as current in the locality, and in addition thereto, if the wages that are generally accepted as current are not fair and reasonable wages, our officers will fix as the wage a wage that is fair and reasonable rather than the current wage. I must say that in my experience in the Labour department in the last four cur five years I have run across no difficulties, or difficulties so indifferent that I have not charged my memory with them, where the wages fixed by the department have not been fair and reasonable. Sometimes they are the current wages. They are never lower than the current wages, and very frequently they have been higher.


Mr. NEILL:: Would the minister indicate the nature of the amendment he proposed? I have only just come in.


George Gordon: The amendment has been withdrawn.


Alan Webster Neill: What was its nature?


George Gordon: It was proposed to strike from the third line of section 2 the words "from time to time" and insert in lieu thereof the words "at the date of the contract when such work is being performed by contract." It was pointed out by the leader of the opposition that a contract for a considerable period of time might well work a hardship upon employees, and upon his suggestion the amendment was withdrawn.


Mr. MacINNIS:: Just a word on this olause as to wages that are fair and reasonable. Evidently the contractors would have to have some indication of the wages they would have to pay before they could tender on the contract. They may have tendered intending
to pay the prevailing wage. That is the wage which the fair wage officer must take into consideration. I understand that it means that the fair wage officer must find out the prevailing rate, how many employers there are in the district and how -many pay such and such a rate, and if more pay a certain rate than another rate the rate paid by the greatest number is accepted as the prevailing rate. When and how is the government going to come to the conclusion that the rate being paid is not a fair and reasonable rate. Who is going to determine it? Is it going to be determined after a complaint from some of the employees on a particular work, or is the fair wage officer going to investigate and report to the government as to the wages being paid?


George Gordon: The fair wage officers of the Department of Labour determine what the fair wages shall be with respect to any contract, and in determining what fair wages shall be they certainly inquire into what are the current wages for competent workmen in the class of work to be performed. They undoubtedly inquire as to whether or not there is a prevailing rate of wages and in all cases they are charged with responsibility of seeing that the wages paid are fair and reasonable. If the hon. member for Vancouver South (Mr. Maclnnis) will investigate, as he undoubtedly has, the wages paid od federal contracts, he will find that very frequently the fair wage officers of the department have insisted upon the payment of wages which were higher than the current or prevailing rate-"prevailing" is not used in the statute-in order that the wages paid may be fair and reasonable. That has been the policy of the department and I trust it will be the policy in the future.


Alan Webster Neill: That section has been in use for many years.


George Gordon: Yes.


Abraham Albert Heaps: In the case of a dispute would the Department of Labour accept the fair wage act of the particular province in which the dispute .might occur?


George Gordon: It is not likely that the
dominion would cast aside the judgment of a province with respect to a matter of that kind but the dominion would not be prepared to accept the statement of a province as to what was fair and reasonable wages. All these matters would be inquired into from all angles, including what was the judgment of the province as to what was fair and reasonable wages.

Fair Wages and Hours oj Labour


Abraham Albert Heaps: There might be two sets of
wages for the same class of work and difficulty might arise. In order that the uniformity of pay within a province should be maintained I think the government should be prepared to accept the judgment of the provincial authorities as to what was considered fair and proper within the province.


George Gordon: In my judgment that is
just what the dominion government should not do. I do not think the dominion government should be committed to paying wages which are high or which are low simply because a province has adopted a scale and considers it as the proper current rate. The endeavour of the federal government is to see that fair and reasonable wages are paid on federal works. If the hon. member thinks over this matter I believe he will banish from his mind the idea that the true intent and meaning of this legislation would be brought about by the federal government subscribing to the judgment of the nine provinces of Canada as to what was fair and reasonable wages.


[Stage Direction]
Section agreed to.
On section 3-Government contracts for work subject to certain conditions.
William Lyon Mackenzie King: Is it not a
general rule that where the eight hour day prevails the forty-four hour week also prevails?


George Gordon: I have no doubt that the forty-four hour week does prevail in some undertakings but there are many industrial undertakings where it does not prevail.


William Lyon Mackenzie King: Is it not true in many trades, usually where the eight hour day prevails, the men knock off on Saturday after working four hours, which makes a forty-four hour week?


George Gordon: That may be true but it
is not my understanding of Canadian industry. *


Alan Webster Neill: This section calls for a forty-four hour week.


George Gordon: Yes.


Angus MacInnis: Certain building trades
in Vancouver have had the forty hour week for some years and I should like to know if these men will be compelled to work a forty-four hour week?


George Gordon: It says, "shall not exceed."


Mr. RINFRET:: I should like to repeat
the observations I made when the eight hour day bill was before this committee. At that

time I referred to special work, either seasonal or intermittent. The men engaged in such work are afraid that this eight hour provision will prove harmful. In the harbour of Montreal there are several thousand men who work only during the summer, some of them for only a part of the summer. Instead of having a time limit placed upon their work they are anxious to work longer hours as that provides compensation for the time they do not work. While in theory the eight hour day and the forty-four hour week may be very nice, when it comes to practice in these times we are much more concerned about the people who are not working rather than limiting the hours of those who are working. I notice that subsection (b) of this section provides for cases such as I have mentioned, when it states:
-or except in cases of emergency as may be approved by the minister.
The minister was very kind in meeting the suggestions I made when we were dealing with the other bill, and I should like to know from him whether this bill is to have the same effect. Will the government or the minister be able to allow men working in harbours, for instance, to work more than eight hours a day or forty-four hours a week? I have been greatly interested in the theoretical social reform legislation with which we have been busy for most of the session but when I go back to my people I find that they are not looking for minimum wages, they are looking for wages of any kind; they are not complaining because they have to work too much, it is the other way around, they are afraid that their week will be shortened. When the eight hour day bill was before the committee the longshoremen were afraid that it would interfere with them and I have had similar requests in connection with this bill from men employed by the government in the harbour of Montreal. They are not very anxious to have their work limited to so many hours a week -when they know that the previous week they have not worked or may not work in the week following.


George Gordon: Mr. Chairman, the object
sought by the government in the reduction of hours is just what the hon. member for St. James (Mr. Rinfret) has referred to: That is, to spread the work among more people by reducing the number of hours. But in cases like those suggested by the hon. member the inclusion in section 3 (b) of the right to except, was for the purpose of excepting from the operation of the bill those who work intermittently and perhaps for a very short time throughout the year.
34S9

Fair Wages and Hours of Labour
Mr. EiLLIOTT: Does the minister make a distinction between prevailing rate of wages and current rate of wages? I notice he uses both terms. I understand in some cases a distinction is made between the two.


George Gordon: I never made any distinction.
Mr. MaeINNIlS: Subclause 2 of this clause reads:
The provisions of this section shall not apply to the purchase of materials, supplies or equipment-
And so forth. Is the government going to take any steps to see that fair wages and fair conditions shall obtain in the production of these supplies?


George Gordon: The subject raised by the hon. member for Vancouver South has been debated many times in connection with both this and former legislation. It is my view that the government cannot fix wages where materials, supplies and equipment are being purchased, that is, traced back to the various factories or departments of factories where these things are being manufactured. This would not be practicable in the first place. If the federal government are paying higher wages, as they very frequently and indeed in most cases do, than industry is paying or able to pay; in other words, if they ai'e giving at least some lead to those who are able to pay higher wages, then, if they were to undertake the project their activities back behind the actual construction, because we are dealing with construction of buildings, into the wages that are being paid in the manufacture of supplies that go into such buildings and that are not made on the ground, I think we would be in great difficulty and I doubt seriously whether this could be administered.


James Shaver Woodsworth: Perhaps in some cases it might not be possible to trace materials back far enough, but in many cases, especially in connection with building, this could be most readily done. For instance stone comes from a certain quarry. There are certain quarries in which fair wages are paid; there are others in which unfair wages are paid. Surely it is quite possible for the Dominion government to purchase only from those quarries where fair wages are being paid. The same thing is true with regard to steel used in certain building construction. We have some factories in which it is known fair wages are paid; there are others in which it is generally known unfair wages are paid and sweating conditions prevail. I think the report of the price spreads commission
recommends that action be taken by the government along this line and even goes so far as to suggest general legislation so that there would be something in the nature of a white list and a label provided in order that we might know whether articles are being produced under fair conditions. Whilst it might be difficult to do that with regard to a number of commodities that pass through several hands, it is quite easy to do it with regard to materials that enter into building construction.


[Stage Direction]
Section agreed to.
Section 4 agreed to.
On section 5-Agreements for works involving dominion aid.
Mr. WOODSWORTH1:	In harmony with
my presentation of a few moments ago when on clause 1 the question of constitutionality was being discussed, I beg to move:
That in line 29 after the word' " day," there be inserted the words " nor forty-four hours per week."
I do not think, it is necessary for me to repeat the arguments advanced half an hour ago.
Mr. GOiRDON:	I have already covered
the ground' with respect to the observations m'ade by the hon. member for Winnipeg North Centre which have now found expression in the amendment he proposes. It is, I think, very desirable that when we are passing any legislation and particularly legislation that may challenge or invade provincial rights, every possible kind1 of precaution should be taken, to see that any measure passed! through this parliament is not open to impeachment upon the ground of its lack of constitutionality. I have already pointed out that section 5 establishes a forty-eight hour week and imposes a forty-eight hour week upon those who carry on operations to which the dominion government subscribes under section 5. The reason that a forty-eight hour week is imposed1 is because the federal parliament has established by legislation a forty-eight hour week. The opinion of the law officers of the crown and of very profound men who are students of constitutional law is that if a forty-four hour week is placed in the statute itself, that leaves it open to impeachment; but in order to make it possible that a forty-four hour week or less may prevail in connection with the expenditure of moneys by a province-and I cite the province as an instance-where the dominion contributes to that expenditure, provision is made that an agreement be en-
[Stage Direction]
Fair Wages and Hours of Labour
tered into pursuant to the terms of this legislation, and in that agreement the condition may be imposed as to working hours per week. In other words the measure is inviolate; it provides that the working hours per week shall not exceed forty-eight, which we believe to be constitutional, and the stipulation can carry through into the agreement when one is entered into: Here is the dominion's contribution to you, but we will give it only on condition that you subscribe to, say, a forty-four hour week. They can either take it or leave it. In my view this places the legislation beyond reach of impeachment and places within the hands of the dominion government or the executive, as the case may be, the right to impose those conditions in the agreement.
James Shaver Woodsworth: I cannot let the
minister get away with an argument like that. In section 3 we provide for fair wages. I submit that the provinces have control of wages under the British North America Act, I think the minister will not question that. Yet in section 5 we proceed to say that the condition respecting fair wages set forth in paragraph (a) of subsection 1 of section 3 shall be insisted upon. We do insist upon fair wages, a matter under the purview of the provincial authority, but we do so because, and only because, we are entering into an agreement. If it is true that we can stipulate what wages shall be paid I submit that we can also stipulate what hours can be worked. I am inclined to think that this whole matter must have arisen through some error in draftsmanship, because there is no real reason behind it. It seems to me to be eminently reasonable that if the minister could insist that wages should be not high or low simply to conform to the provincial scale, then the hours should not be short or long simply because there may be ^ some provincial arrangement prevailing. This is a provision which relates, as subsection 2 very clearly indicates to the conditions to be stipulated in the agreements, the very thing the minister is talking about. I do not think it is a constitutional question at all. The minister has not shown how it affects the constitution. He simply asserts that he has had certain advice. I should like to have him produce the advice on this particular matter in written form; then we should be able to use our best judgment as to whether or not we think it is sound.


Hugh Guthrie: Section 3 of the bill
provides for the payment of fair wages, for an eight hour day and a forty-four hour week. In section 5, subsection 2, instead of repeating the language of these clauses it is provided that:

-the condition respecting fair wages set forth in paragraph (a) of subsection one of section 3 of this act and the condition that the working hours of persons employed in the execution of the work shall not exceed eight hours per day except in such special cases as the governor in council may otherwise provide or except in cases of emergency which may be approved by the minister.
That part in relating to hours is identical with paragraph (b) of section 3.


James Shaver Woodsworth: No, it is identical
but for the one clause which I asked should be inserted: that is in line 29, after the word "day," there should be inserted the words "nor forty-four hours per week." It is identical with that exception.


Hugh Guthrie: I do not see any objection to putting that in.


Ernest Lapointe: Except that according
to the Minister of Labour the law officers of the cr-own and two eminent counsel who have been specially consulted in the matter have declared that it would be invalid.


Hugh Guthrie: Not as a stipulation in
an agreement.


Ernest Lapointe: That is what the Minister of Labour said.


Hugh Guthrie: Not as a stipulation in
an agreement, but as an enactment affecting labour laws in the province it would be invalid. But the counsel say you can achieve your purpose by stipulating expressly in your agreement upon what terms your money is granted. If we seek by legislative enactment to interfere with wages or hours of labour in the provinces, saving in regard to our rights under the conventions which we have adopted, then we are at least on controversial ground; our counsel say our act would be invalid. To get around that invalidity we are stipulating in the agreement for these very things. For myself I do not see any objection to placing "nor forty-four hours per week" there, as they appear in subsection (b) of section 3.


[Stage Direction]
Amendment agreed to.
Mr. ELLIOTT:: Is this not section 5 practically enacting what the practice is now under certain orders in council that have been passed?


George Gordon: You mean the resolution
of thirty-five years ago and the subsequent order in council of fifteen years ago?


John Campbell Elliott: There are certain orders
in council, I understand, providing for what is now sought to be enacted by section 5. Am I correct?


George Gordon: In a measure, but section
5 goes further.

Fair Wages and Hours of Labour


John Campbell Elliott: Would the minister tell
us to what extent it does enlarge upon what is stated in those orders in council?


Louis Édouard Fernand Rinfret: I understand there is an
essential difference between clause 3 and clause 5. In clause 3 we are dealing with dominion government contracts; in clause 5 we are dealing with works to which the government contributes, but which are carried on not by the government but by individuals or provinces. Is not that the reason clause 3 is drafted differently from clause 5?


George Gordon: Yes.


Louis Édouard Fernand Rinfret: When the Minister of
Justice spoke he did not seem to make that distinction. I gathered that the government still maintains that it can impose the eight hour day on account of stipulations in the treaty of Versailles, but has no authority to impose a forty-four hour week. Are We now taking a new attitude on that last point?


Hugh Guthrie: We are trying to meet
the very problem that my hon. friend has stated. The treaty of Versailles, by which we are bound', and the convention we have adopted, provides for a forty^eight hour week. Under these present arrangements, on all government work we are limiting the week to forty-four hours. In cases where we make grants either to provinces or to municipalities we are not in a position to dictate these provisions by legislation, but we can achieve our end by making a stipulation in our agreements that we will not grant the moneys unless they agree to these particular terms. An enactment that they shall do so would be invalid.


Louis Édouard Fernand Rinfret: I do not want to press
the point, because with my leaders I do not accept the attitude of the government that we have authority even by the treaty of Versailles to impose an eight hour day. But I thought the government had contradicted itself; perhaps I am wrong in that point, I was quite aware that by the treaty of Versailles the stipulation was for a forty-eight hour week. Now we have gone to forty-four hours.


Hugh Guthrie: On government works.


Louis Édouard Fernand Rinfret: The Minister of Justice
led us to understand that the reason forty-four hours did not appear in clause 5 was that the legal authorities had given an opinion that it should not. We seem to be losing ground constitutionally every day. Perhaps to-morrow we shall have a bill for a forty hour week. I am not pressing the objection, because as I say personally-and as a member of the Liberal opposition I follow my leader-we should not have legislation on that matter at all.


John Campbell Elliott: I wonder if the minister could tell us the differences between the order in council and the enactment?


George Gordon: The difference as reflected in section 5 is that it applies the fair wages policy of the federal government to work done or moneys spent where the Dominion of Canada makes a contribution, subsidy, loan, advance or guarantee for aid in construction and so on. That is the main enlargement of the old resolution; where we make a subsidy or a grant, say to a province, under section 5 we have the right to impose the fair wages policy of the dominion government in connection with the work.
Section as amended agreed to.
Sections 6 and 7 agreed to.
On section 8-Date of coming into force.


John Campbell Elliott: I see this will not come into force until May 1, 1936, and shall not apply to any contract with the government of Canada existing at that date. Why defer it for that length of time?


George Gordon: It will be recognized that it is quite difficult in bringing into force an act of this kind to fix an arbitrary date that will not seriously interfere with existing rights and contractual obligations. It was thought that by postponing the operation of the act until the date mentioned an opportunity would be given to have present contracts completed and, if I may put it in this way, to educate those in the contracting business in the new order of things in order that they might accommodate themselves to this legislation. It may be that the -act has been postponed too long, though in the judgment of the government it is not too long a postponement.


James Shaver Woodsworth: Have we not already a sufficient number of exemptions in the particular clauses without having this general exemption which might invalidate the whole act? This section provides that exceptions may be granted-
-to any contracts, agreements or works thereafter made or undertaken which are by order of the governor in council declared to be excepted from the operation of the provisions of this act.
It seems to me that this really throws the act wide open again, and that it is hardly necessary in view of the exceptions noted in the particular clauses.
Public Works Program


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


[Stage Direction]
Right Hon. R. B. BENNETT (Prime Minister) moved the second reading of and concurrence in an amendment made by' the senate to Bill No. 63, to create employment by public works and undertakings throughout Canada and to authorize the guarantee of certain railway equipment securities.
He said:	The only amendment made by
the senate is in line 36 of section 7 on page 2 of the bill, which now reads:
[Stage Direction]
with respect to a certificate as to the wisdom of such recommendation made by the chief or the assistant chief engineer-
That is, it shall be accompanied by a certificate of the chief or assistant chief engineer or architect in charge of such work. The senate have added the words "as to the wisdom of such recommendation made by."
Ernest Lapointe: Is this in connection with tenders?


Richard Bedford Bennett: It is in connection with cases in which tenders are not required.


John Campbell Elliott: It tells what the certificate is to be?


Richard Bedford Bennett: Exactly.
Motion agreed to; amendment read the second time and concurred in.



COMBINES 'INVESTIGATION ACT

[Stage Direction]
Hon. W. A. GORDON (Minister of Labour) moved the second reading of Bill No. 79, to amend the Combines Investigation Act.
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Morand in the chair.
On section 1-Short title.
Ernest Lapointe: Perhaps the minister will explain the bill. Is it exactly in conformity with the recommendations of the price spreads commission?


George Gordon: Yes, in substance. It is to amend the present act to give effect to certain of the recommendations made by the price spreads commission, but the major change is to transfer the powers at present

invested in the registrar and the Minister of Labour to a federal industry commission, which it is contemplated establishing under the Dominion Trade and Industry Commission Act. Then the remainder of the amendments are merely to bring the present act into conformity by substituting the commission for the registrar, and I believe in one or tivo instances for the minister, so that throughout the present act the amendments will conform.


James Shaver Woodsworth: I believe under the present act the minister takes the ground that the report of the registrar need not be made public. Under the amended law will all reports of the commission be made public?


Richard Bedford Bennett: The hon. member will recall that in connection with the tariff board we had a long discussion about this matter. The two acts will be read together, so far as that is concerned, and the tariff board would be the judge as to whether it was not in the public interest or unfair to the individual to have the investigation published. That is, obviously everything is not published, but everything is not secret, and the board shall be the determining tribunal with respect to that feature of the matter. That is what has been determined in the past in connection with the Tariff Board Act.


James Shaver Woodsworth: It seems to me that this is distinctly a retrograde step, because under the Combines Investigation Act which we have had in the past at least the commissioner's findings were made public. Some of us have claimed that the registrar's findings should also be made public. Apparently, however, we are now to have a new commission, namely the tariff board, which shall have power to state whether or not its findings shall be made public.


Richard Bedford Bennett: No; I think the hon. member misunderstood me. I referred to the evidence, not the findings.


James Shaver Woodsworth: I am speaking about the findings of the commission and my question was as to whether or not the findings were to be made public. Did I understand the Prime Minister correctly?


Richard Bedford Bennett: No. I was dealing with the evidence. The hon. member will recall that a great deal of discussion took place on this point when the tariff board was set up. The findings of that board are made public.


James Shaver Woodsworth: My question is whether or not the findings of the commission will be made public.

Combines Investigation Act


Richard Bedford Bennett: Yes.


James Shaver Woodsworth: Not the evidence. At the present time the minister takes the ground that the reports of the registrar need not be made public. The question was whether or not under the new arrangement the reports of the commission would be made public.


George Gordon: Yes, they will be made public.


Mr. ILSLEY:: After reading the act I would not think that to be so. In the Combines Investigation Act the matter is covered in two or three sections. Reports of commissioners were made public, unless there was a provision in the report recommending against publicity, but the section dealing with reports of the registrar was silent. The minister took the view that the section being silent he had no authority to make the reports public. I know however it was the view of members of the price spreads commission that that opinion was incorrect, that the act being silent the minister had a discretion in the matter and could make the reports of- the registrar public or otherwise, as he wished. In Bill No. 86, providing for the establishment of a dominion trade and industry commission, section 28 states:
The commission shall within fifteen days after making any report, recommendation or finding under this act make the same public in such manner as seems desirable unless the commission is unanimously of the opinion that the public interest would not be served by publication or that the public interest would be better served by withholding publication.
(2) Wherever possible the commission shall with the report, recommendation or finding make public the reason and the facts upon which the decision is based.
I do not know at this time whether that section applies to reports made under the Combines Investigation Act, but I assume that is the section that applies.


George Gordon: It will apply.


James Lorimer Ilsley: Yes, it will apply when the two bills are passed. We gave some thought to the matter of publicity when we were considering the evidence placed before the price spreads commission. The members of that body were of the opinion that there was no good reason why reports should not always be .made public.


George Gordon: Of the registrar?


James Lorimer Ilsley: Yes. There might be
reasons why all of the evidence in a case should not be made public, but we concluded that there was no good reason why every report should not be made public. There are a great many instances where six persons
apply to the registrar, under the Combines Investigation Act, alleging that a combine exists and asking for an investigation. The registrar looks into the facts and circumstances and decides that the six persons who signed the application did not fully go into the matter, that they are proceeding on hearsay evidence and that they are wrong. In such event he would make a short report indicating that there was no reason why there should be any investigation. From time to time such reports are made. It is a very common thing for a few individuals from one part of Canada or another to write the registrar and allege the existence of a combine. Upon looking into the facts the registrar sometimes decides that what these people allege to be a combine does not contain the statutory elements of a combine, and makes a report to that effect. That would be the end of the matter. There is no reason why those reports should not be made public; they cannot possibly hurt anybody. When the registrar finds that the facts are such as to warrant an inquiry he may proceed to investigate and may in the end find that a combine exists. It may be that on some occasions a court may find that a combine did not exist. Only once in the history of the administration of the Combines Investigation Act has a judge found that a combine did not exist when in the first instance the registrar had found that it did; in every .other case the court has corroborated the finding of the registrar. It seems to me rather theoretical and fanciful to state that in publishing the findings any injustice would be done. An intolerable condition exists when we permit the making of expensive and important inquiries into alleged combines and have the reports kept secret. That is what has happened.
We took enough evidence before the price spreads commission to know that in the rubber trade there is a condition of affairs which apparently constitutes a combine. We tried to get the report which was made in connection with this industry, but could not get it; it was kept secret, and has not been published. I can, see no reason why it should not be published. It is most important, if matters of this kind are to be considered intelligently by governments or parliaments that publicity be given to them. I believe the hon. member for Winnipeg North Centre is asking for full publicity of reports, and' if I understand his position correctly I strongly support it. I am sorry the necessary provision to bring that about is not made in this bill.
Combines Investigation Act

Mr. WOOD8WORTH: Decidedly I believe in such publicity, but I was attempting to get at the facts of the case. A few moments ago I asked the minister if all the reports would be made public, and apparently he was not quite sure. In the meantime the Prime Minister stated that in the case of the tariff board the evidence was not made public. I had not been talking about the evidence but about the report, and I again asked the minister, who stated that all reports would be made public. Then the Iron, member for Hants-Kings (Mr. Ilsley) read section 28 of the trade and industry commission bill, and I understood the minister to say that it was that act that applied in this case. If it does then it is quite obvious that the publication of these reports is not automatic but within the discretion of the commission, and in enacting this legislation we are taking a retrograde step because in the past, although we could not get the registrar's reports, at least we got the reports of the commission. Now apparently the commission itself may decide whether or not it gives us any report. I am strongly of the opinion that we should have full publicity with regard to these matters.


James Lorimer Ilsley: I just want to add to what I said that the evidence before the price spreads commission revealed a startling concentration of business in Canada, great numbers of large corporations and what the experts call monopolies and quasi-monopolies. Times are changing. It may have been quite proper twenty or thirty years ago to be very careful as to what publicity you gave to matters of this kind, but it is highly important in these latter days that the public have all the facilities possible for coping with these great concentrations of industry, and to that end it seems to me important that the public be acquainted with the true state of affairs. The act is being amended not only to cover combines but to give better facilities for coping with monopolies such as mergers and the like, and it is exceedingly important that the public be acquainted at once on the conclusion of an investigation with the true state of affairs. If, for instance, eighty-five per cent of the packing industry gets into the hands of one company, which is what would happen if two of the largest companies were to merge at the present time, that is a fact which the public should know, and know at once. It would be revealed by an investigation under the Combines Act as amended, and it is not a fact that the commission should have the discretion to keep to themselves. There is no danger that I can see about publicity. The danger that always 
used to be urged was that publicity might prejudice the mind of the public in the event of a criminal prosecution, but an official report is no more likely to do that than the irresponsible reports in the newspapers-not nearly as likely, because what the registrar or what the commission finds about these great combinations and monopolies and quasimonopolies is quite certain to be true. I would urge that the government provide for full publicity of these reports rather than leave it to the discretion of the investigating commission.


George Gordon: The question of what sort of report, whether the report of the registrar's inquiry or of a commissioner, should be made public and be given publicity has been the subject of discussion since the first legislation was enacted in 1910, and upon its subsequent reenactment with amendments thirteen years afterwards. Rightly or wrongly, the Combines Investigation Act at present in force is silent with respect to publicity to be given to the report of the registrar, whether that report be a final or an interim one. It is equally true that since the act was amended in 1023 the practice of the Department of Labour and of the federal government has been to treat the silence of the legislation with respect to publicity as constituting the foundation of proper practice, that these investigations and inquiries should not be made public.


James Lorimer Ilsley: I have in my possession a
report dealing with the P.A.T.A,, a report that was made by the registrar. Two reports were made1 in 1925 and 1926, one by the registrar and one by the commissioner, and the, registrar's report was printed and published.


George Gordon: It may be that the registrar's report was published) but I am stating that the general practice was not to make them public. The act, of course, did and does make provision for publication of a commissioner's report. When the Combines Act was before parliament in 1923 a long discussion took place with respect to its operation and) with respect to what was expected of it in the way of curbing combines and monopolies which were against the public interest and in restraint of trade. Great things were expected of the combines act, and so far as the act went I think it did bring about some sort of useful progress. But there is no manner of doubt that white the present combines act was upon the statute book great combines came into existence. I am not prepared to condemn them as detrimental to the public interest, or to commend them as the kind of monopoly that is in the

Combines Investigation Act
public interest-for there are the two kinds, as everyone admits. But with respect to the publication of a preliminary inquiry into the business of people where full facilities are given for such inquiry and where it is expected that a full and confidential disclosure shall be made of all the intimacies of the business, I have no doubt that that was the consideration that influenced, those in the past to be extremely careful about publishing to the world and to the man's competitors the complexities and the inner workings of his business. I am sure that every member of this House of Commons could have his own private business investigated and would welcome complete publicity with respect to his every activity, and that every member would emerge as pure as the driven snow, but at the same time there were those in years gone by who thought that to make public a confidential and complete disclosure of all a man's business was something that should not be done in a hurry, that the information should not be just poured out through a funnel for his competitors. I believe that was the argument that then prevailed, but as the hon. member for Hants-Kings has said, since the investigation of last year, times have changed. We are undoubtedly in changing times, and perhaps it is proper and right that these things should be published to the world, whether they are right or whether they are wrong, on the principle I assume that if a man is right his business should be known to everybody, and if he is wrong he should be pilloried at once. These are just observations that you can take in any way you like. But would it not be better to defer the argument as to the publicity which should be given to these matters until section 28 of Bill No. 86 is before the committee. The section has been read already to the committee by the hon. member for Hants-King and I shall not burden the committee with a re-reading of it. In substance it states that within fifteen days after making any report "the commission shall make the same public" if they deem it in the public interest to do so. That bill has not been dealt with in committee, and I think it would be desirable to await its presentation in order to determine the extent to which this section might be amended. Section 28 of the dominion trade and industry commission bill might be amended also in order that the proper course may be taken. Let us hope that we do adopt the proper course in all cases. I suggest that we postpone this discussion until the section which deals directly with the matter is under review.


James Shaver Woodsworth: Contrary to his
previous statement, the minister now admits that these reports are not all made public.


George Gordon: I scarcely think the hon.
member can pin me down like that.


James Shaver Woodsworth: Will the minister
make a direct statement?


George Gordon: Section 28 says that within fifteen days of making any report, recommendation or finding under the act the commission shall make the same public in such manner as seems desirable unless the commission i3 unanimously of the opinion that the public interest would not be served by publication or that the public interest would be better served by withholding publication.


James Shaver Woodsworth: Is that in this bill?


George Gordon: No, that is section 28 of
Bill No. 86.


Louis Édouard Fernand Rinfret: I think this discussion is very improper. The bill now under consideration is based principally upon the establishment of a commission which does not now exist and will not exist until Bill No. 86 has been passed. The present bill might be passed and sent to the senate, and the house might decide not to adopt the other bill. It is close to six o'clock and perhaps the minister will consider whether we should not deal first with the other bill. That bill, which states that "commission" means the Dominion Trade and Industry Commission which will be established under the Dominion Trade and Industry Commission Act, 1935, has not been read a second time and might not be adopted by this house. What would be the good of this bill if the other were not adopted?


George Gordon: It might be well to take
up the other bill first.


Louis Édouard Fernand Rinfret: The minister has found it necessary to refer to a section in the other bill in order to make his point clear. Perhaps he would give some thought during the dinner recess to the question whether we should not go on with the other bill first.


James Lorimer Ilsley: One section of this bill repeals a large part of the Combines Investigation Act. If that is repealed and there is no commission set up, we would have no legislation.


George Gordon: There is virtue in what the hon. member for St. James (Mr. Rinfret) has said as to the order in which these bills might properly be taken up. I shall consider this during the supper recess.
At six o'clock the committee took recess.

Criminal Code Amendment

After Recess
The committee resumed at eight o'clock.


George Gordon: In the light of what has been said with respect to the other bill, I would move that the committee rise, report progress and ask leave to sit again.
Progress reported.



CRIMINAL CODE AMENDMENT

[Stage Direction]
The house resumed from Wednesday, May 29, consideration in committee of Bill No. 73, to amend the criminal code-Mr. Guthrie-Mr. Morand in the chair.
On section 6-Discrimination in trade.
Hugh Guthrie: Returning to this bill which was partly discussed on a former occasion, I think I should put on record the recommendation of the price spreads commission with regard to the matters with which it deals. At page 135 of the report of the royal commission, certain amendments to the criminal code are recommended. I need not read that section. On page 246 there is another recommendation in regard to fraudulent advertising, dealt with by clause 4 of the bill, but the portion of the report which I desire particularly to read is at page 270. I will start in the middle of the page:
We suggest that practices should be prohibited as unfair which are characterized by bad' faith, fraud, misrepresentation, or oppression; which are resorted to for the purpose of destroying competition or eliminating a competitor; which facilitate the development of monopoly; or which destroy fair corn-competitive opportunity and prevent the survival of those who can organize and carry on the production of goods most efficiently. It is in this sense that the word "unfair" should be used in the act.
Without attempting to restrict the application of this test of "unfairness" by the commission, we feel that certain practices which we have examined should very definitely be considered "unfair" under the act. They are so widespread and generally condemned that their complete prohibition by the commission is justified. We refer specifically to-
1.	discriminatory discounts, rebates and allowances,
2.	territorial price discrimination and predatory price cutting.
The reference in the extract which I have just read is to the trade commission which is recommended in this report and is not to the criminal code. Clauses were drafted to carry into effect that recommendation for the purpose of inserting them in the federal trade commission measure, but immediately we had

done so we realized that our troubles were beginning. In view of the decision of the judicial committee of the privy council) in respect to the Board of Commerce Act and the Combines and Fair Prices Act, if we bad placed in that bill prohibitory sections in regard to the matters recommended in the report, according to the opinion of the law officers of the department they would have fallen to the ground1 as ultra vires; they could not be supported1. It is true that the general regulation of trade and commerce is, under the British North America Act, within the competence of this parliament; but the moment you go to the point of interfering with private rights, the moment you begin to fix prices, to interfere with contracts or matters of that kind, you have gone, according to the decision of the judicial committee of the privy council, beyond the realm of the regulation of trade and commerce. Property and civil rights within a province are within the exclusive jurisdiction of the provincial legislature, and for that reason these sections which were drafted originally for the trade and commerce bill were omitted from it. While there was serious doubt as to our right to pass such legislation-and indeed it was not doubtful; it was definitely decided that we had no such right-we have the right in this parliament to pass criminal laws as we see fit to do, and these particular sections were therefore transferred into the bill to amend the criminal code of Canada.
The question of course arises whether the amendments which we now submit are really in their pith and substance, which is the language used in so many of the judicial committee's judgments, of criminal legislation. We submit they are in so far as they are for the protection of the public, for the good of the community and to frustrate unfair practices by traders throughout Canada.
Let me, after making that preliminary statement, place upon the record the opinion which I had not with me when this matter was before the house on a former occasion. At that time I read the opinion of Mr. Tilley, K.C., upon these sections, and it will be remembered that he pronounced upon them as follows: that section 4 of the bill was good and within the competence of parliament. In regard to section 5 he said: " I think it is intra vires; in regard to section 6, paragraph (a) is of doiibtful validity, paragraph
(b)	is valid, and paragraph (c) is valid." Such is the opinion, in brief, of Mr. Tilley, K.C.
I desire to place upon the record the opinion of Mr. Geoffrion, K.C., in regard to

Criminal Code Amendment
the same section. His opinion under date of May 15, 1935, to the Deputy Minister of Justice is as follows:
Sir,-In conformity with your letter of the 6th instant, I have read the bill to amend the criminal code, sections 4, 5 and 6, with a view of giving my opinion as to the powers of parliament to adopt it.	_	_
I believe this is good criminal legislation, therefore within the dominion's powers, except possibly paragraph (a) and (lb) of section 415A as enacted by section 5 of the bill.
I take it that, generally, these paragraphs aim at punishment for violation of provincial legislation respecting minimum wages and maximum hours. Of course, there can be no doubt in so far as federal legislation on that subject is concerned. The majority of eases would, however, be covered by provincial laws because the subject of minimum wages and maximum hours of labour is, it seems to me, normally a provincial subject.
I know the dominion parliament has already claimed power to decree punishment for the violation of a provincial statute; section 164 of the criminal code is an example of that and this has never been challenged but I doubt the validity of such an enactment in view of section 92 of the British North America Act. paragraph 15, which gives to the provincial legislature exclusive legislative power concerning the imposition of punishments for enforcing any law of the province, et cetera, et cetera. If the dominion can decree a punishment for the breach of a, provincial law. it can do so whether the province has decreed one or not. The legislative power in that respect ceases to toe exclusive, notwithstanding the terms of the British North America Act and the dominion statute must prevail so that the provincial legislature enacting mandatory or prohibitory provisions will be exposed to have a punishment attached to its orders quite different from the one it desired. The power to order and the power to punish for disobedience should logically be united.
I would think the words "criminal law" in section 91 should be restricted by paragraph 15 of section 92. just as "marriage" in section 91 is restricted by "solemnization of marriage" in section 92. The general words in the assignment to the dominion in both cases being restricted by the special exclusive assignment to the province.
I do not think however, that these provisions, if unconstitutional, would affect the validity of the rest of the act.
Yours truly,
A. Geoffrion.
Now it will be noted that Mr. Geoffrion states as his opinion that sections 4 and 6 of the bill are within the jurisdiction of this parliament, and section 5 is also valid except possibly subsections (a) and (b). As to the contention of Mr. Geoffrion that we would be imposing penalties in regard to laws of the provinces in respect of which penalties are already imposed, it is to be noted that for many years. I think since 1888, our criminal code has contained clause 164, which I am going to read:
Everyone is guilty of an indictable offence and liable to one year's imprisonment, who, 92582-2211
without legal excuse, disobeys any act of the parliament of Canada or of any legislature in Canada by wilfully doing any act which it forbids, or omitting to do any act which it requires to be done, unless some penalty or other mode of punishment is expressly provided by law.
That section has never been directly challenged in the courts. If anyone thinks it is a doubtful section, as Mr. Geoffrion does, at any rate it has stood the test of forty-five years and I think more than that. I know that an opinion was given on that question by the late Hon. Edward Blake, an eminent lawyer, who while Minister of Justice affirmed our right to impose these penalties notwithstanding penalties imposed by provincial laws, and that opinion has been followed in the department ever since.
Let me summarize the position. I leave out section 4 for the moment, because according 'to all legal opinions that we have obtained, both of the law officers of the department and of the two eminent counsel I have mentioned, section 4 is within the competence of the parliament of Canada. With regard to section 5, Mr. Geoffrion entertains doubts as to subclauses (a) and (b). Mr. Tilley expresses 'the opinion that the whole section is within the legislative competence of this parliament. In regard to section 6 Mr. Tilley expresses doubts as to subclause (a) but says subclauses Ob) and
(c)	are valid. Mr. Geoffrion expresses the opinion that the whole of section 6 is within the compeitence of this parliament. On a former occasion it was very much criticized that the government should introduce into this house a 'bill in regard to which there should be some doubt expressed. It is not the first time such a course has been taken. There is doubt u,p to the present time about many of our constitutional rights, which have never been tested, and some provincial rights too. If on account of these doubts the provinces withhold their hands and pass no legislation, and if we are to do the same here, the result of course is stalemate and no legislation 'occupies the field. My hon. friend the former Minister of Justice (Mr. Lapointe) is not in his place, but he will well remember section 1025 of the criminal code, which abolished all appeals in criminal cases to the judicial committee of the privy council. That was a section of doubtful validity which was passed toy this parliament. In 1928 when it came before the judicial committee they held it as ultra vires of this parliament-as bad, void. When the statute of Westminster was passed by the British parliament and reenacted in this parliament, section 1025 was again passed by this house and the senate and
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became law, but recently it has been challenged again before the judicial committee, and on Thursday or Triday I think of last week a judgment was given maintaining the right of the parliament of Canada to enact section 1025.


Mr. DUFF:: Did they know it was doubtful when they enacted it?


Hugh Guthrie: It was always looked upon as doubtful.


William Duff: Was it so expressed here in parliament?


Hugh Guthrie: There is an opinion in the Department of Justice that it was doubtful. I could enumerate a score of acts in regard to which there was douibt. I am going to mention one because it was up in the house to-day, that is the Canada Grain Act. When that law was enacted the late Mr. Justice Newcombe expressed the opinion that many of the sections were of doubtful validity. Subsequently the act was before the Supreme Court of Canada and certain sections were held invalid, as beyond the legislative jurisdiction of this parliament. But in that case the supreme court- suggested a remedy to us. They said: If you declare the elevators to be works for the general advantage of Canada, you might overcome the difficulty. In the following session, to cure the difficulty and remove the doubts, parliament passed an act to declare these elevators to be works for the general advantage of Canada. But there are some sections of the act not yet without doubt, and in order to remove further doubt or make the act secure so far as it might be possible to do so, this ingenious clause was put in at the end:
234. If it is found that parliament has exceeded its powers in the enactment of one or more of the provisions of this act, none of the other or remaining provisions of the act shall therefore be held to be inoperative or ultra vires, but the latter provisions shall stand -as if they had been originally enacted as separate and independent enactments and as the only provisions of the act; the inter)-' tion of parliament being to give independent effect to the extent of its powers to every enactment and provision in this act contained.
I submit the present measure in the form in which it is drawn is a serious attempt to carry out as far as it possibly -can be done by this parliament the recommendations of the price spreads commission in regard to unfair trade practices. The best legal opinion we can get on the subject says that if we place these sections in the trade commission act, as recommended in the report, they will be ultra vires of the powers of this 
parliament as an interference with property and civil rights within the various provinces. If we place them in the criminal code, however, and treat this as criminal legislation, probably they will stand fire, although as I have elaborated doubt has been expressed in the opinions of Mr. Tilley and Mr. Geoffrion. The -other sections of the code, of course, are not open to that constitutional conflict, but sections 4, 5 and 6 of this act are prepared with an eye to carrying out the recommendations of -the price spreads commission.
I would ask this committee to give serious consideration to these -clauses. I know they were rather roundly denounced the other night, but that does not get rid of them. They are entitled to serious consideration and in the main according to the best legal opinions obtainable, they are valid. Some of the subsections are called not invalid but doubtful. That is the spirit in which this bill is submitted to the house at the present time.


James Layton Ralston: Mr. Chairman, I think there could be written across the face of this bill, particularly sections 5 and 6, "sic transit gloria reform." If this is the best this government can do to implement all the promises contained in the radio speeches which were made last- January, then it does seem to me that His Excellency the Governor General would be well advised to come down and dissolve this house.
I am going to deal with what my hon. friend the Minister of Justice has said in regard to the legal aspect of the matter, but I hope that the discussion will not entirely centre around the legal phases of this bill. This is just -another instalment of the series of anti-climaxes to those radio speeches of January last, which has been furnished to this house during the last three -or four months. From time to time we have had shreds and patches of the resounding sentiments whitfh were -expressed on that occasion. We have had the unemployment insurance act, which was broadcast so as to hold out the hope to the working people and the unemployed of -this country that it was going to solve all their problems. But when the unemployment insurance act was brought down we found that it did not benefit anybody for a year at least; that it would not assist in the slightest in connection with the unemployment which exists in this country, but -that it would only help those who were already employed and who were able to pay the assessments for the time set out in that act. We also found that it left out three of

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the four primary industries of .the Dominion of Canada.
Then we had the eight hour day bill before us this afternoon, the law with regard to hours of labour on, public works. In either the last or the next to last section of the bill we find that the act will not come into force until May 1, 1936. Then there was the Companies Act. We were going to do away with no par shares, those things which are Said to have been the delusion of the investor. The amendment to the Companies Act has been brought down; no par shares are not struck out. They will continue to be issued notwithstanding the strictures of the Prime Minister regarding them. The dole was a rotten thing according to the radio speeches, but the dole still exists in Canada and we have been voting goodly amounts of relief money for that purpose. Now finally the report of the price spreads commission is crystallized into a few sections which appear in this act, and notwithstanding the statement which was made during the radio broadcasts with regard to the open market place, I would almost think that the open market place is going to continue. During the course of those speeches last January the Prime Minister said:
You would' agree that free competition and the open market place, as they were known in the old days, have lost their place in the system, and that the only substitute for them, in these modern times, is government regulation and control.
And, according to this act, that government regulation and control is going to consist of making it a crime for a man to give a greater discount to one man than to another.
I want to deal for a .moment with section- 6, which has been, referred to by the Minister of Justice, and the legality of which has been discussed, in order to give the committee the effect of what section 6 really provides. Section 6 says in substance that if Mr. A is doing business and gives to Mr. B a greater discount on a similar quantity of goods than the discount which he gives to Mr. C, Mr. A is guilty of a crime and should go to gaol. It does not make any difference that Mr. A is giving that larger discount to Mr. B in order to meet a price which Mr. B had been quoted by somebody else; Mr. A is still a criminal because of the fact that he met the price of his competitor. There is nothing in the act which intimates that Mr. A cannot give Mr. B a lower price than he gives Mr. C; all that is provided is that he must not give a greater discount. That is to say, while he cannot quote a price of $100 and give one man ten per
cent off and another man fifteen per cent off, there is nothing in the section which says he cannot quote one man a price of $80 and another man a price of $85, because that is not giving a discount. Neither is there anything in the section to suggest that he could not take a base price of $80 and say to one man, "I will give you these goods at $80 plus ten per cent," and to another man, "I will give you these goods at $80 plus fifteen per cent"; in that case he has not committed any crime because he has not given any rebate or discount.
I submit to you, Mr. Chairman, that we ought seriously to consider the legislation we put on the statute books. All we are doing here is to make law evaders of the people of the Dominion of Canada when we pass sections of that kind, and I am leaving out altogether the question of the validity of the act. I say on the construction of the act itself it is nothing less than a snare and a delusion so far as the mercantile people of this country are concerned, and nothing less than a sham and mockery so far as the relief of the consumer is concerned. There is nothing real in it. People can readily evade the law; anyone can read it and see that he can easily get around a section like this, but still the section is put in in deference to some of those who feel that if they could have their feelings salved by having at least a little of the report of the price spreads commission carried out that would at least save their faces. I submit that a section which prevents an honest trader from meeting competition and makes no allowance for savings in sales costs on account of selling a large volume is not the sort of section which should be written into the criminal law of the Dominion of Canada. We had1 a commission which cost this country $500,000. If this is the best this government can bring down in implementing the report of that commission then that $500,000 has been worse than wasted. I submit to you, Mr. Chairman, that a section of this kind is just silly; it is just meddling, that is all; interfering and irritating without doing the slightest good.
I am not the only one who holds that opinion. The other night I noticed, and I intended to read, an editorial which appeared not in a Liberal organ but in a newspaper which is supposed to support this government, the Montreal Star. It was referring to the remarks of the Minister of Justice (Mr. Guthrie) when he introduced this bill, when he admitted that some of these sections were of doubtful validity. This is what the Star said:
Doubtless our parliamentarians, both inside and outside the cabinet, will have this
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phase of the matter well in view. The senate just the other day had to hold up and rewrite a government measure which had passed the commons. Last week we heard a minister introduce a bill with the amazing statement that he was not quite sure of its constitutionality.
That was the Minister of Justice, in connection with the bill we are now considering.
Surely now there will be an end to this sort of thing. Parliament will have the full support of the people in adopting legislation which promises to ameliorate, even to a small degree, the genuinely distressing conditions under which our people are to-day living, but it will not earn any public gratitude by driving through sham relief measures which profess to work miracles but which will lead only to chaos, disappointment, a further paralysis of business and the general confusion which to-day pervades the United States.
I do not think any more apt words could have been used concerning the bill before us to-night, in view of what the Minister of Justice has just said, than the words I have just read. We remember what occurred in the United States. Chaos and confusion reign because a law was enacted; business had to set up new machinery and make expensive readjustments to meet it and when attempts were made to enforce it it was held to be without legal foundation. The result is that the man who played the game and lived up to the letter of this invalid law has been penalized because his competitor had nerve enough to disregard it. The same situation will arise in Canada, one which would lead only to disappointment. The people who do attempt to live up to it will be prejudiced and, will be at a disadvantage with their competitors.
Now, with regard to the legal situation I am not going to attempt to discuss the opinions which the Minister of Justice has read to-night. I should be perfectly satisfied, had we definite opinions from either of the gentlemen whom he has quoted. I should be satisfied if we had a definite opinion from the Department of Justice itself. But the minister a few nights ago, upon introducing ;he bill, and in a discussion in committee ntimated clearly that he himself held the gravest doubts as to its validity. We do not aave to go farther than that. At page 3166 of Hansard he makes the statement that the opinion of the law officers of the crown is that section 5 presents some difficulties. He has now brought forward Mr. Geoffrion's opinion in which it is stated that that gentleman is doubtful about the validity of clauses
(a)	and (b) of section 5. And the minister tells us the Department of Justice was doubtful about all the clauses of section 5. On

the other hand Mr. Tilley felt they could be supported; so there we are. There is no doubt that the Minister of Justice and his department are doubtful about section 5. In fact the minister is doubtful about the whole section and Mr. Geoffrion is doubtful about subsections (a) and (b), and still it is proposed to pass this bill.
The Minister of Justice has said that if we do not legislate and if the province does not legislate, both being fearful of our jurisdiction, what will happen? I say to him, and I think he will agree with me that there is no reason in the world why the province could not legislate in connection with subsection (a) and
(b)	of section S. No person has suggested that the province has not the right to legislate with regard to employment of persons at rates of wages less than the minimum rates fixed by law or public authority. There is no difficulty about the province legislating in that matter. ' Up to this time we have assumed that the provinces have had jurisdiction with respect to minimum wages. In fact, all the parliamentary utterances from the Prime Minister down for a long time past have indicated that the provinces were the bodies which had the jurisdiction with regard to wage rates. Therefore there should be no question that the province has power to legislate with regard to the matters contained in subsection (a) of the new section 4I15A and the same applies to subsection (b). The minister's fears about nobody being able to legislate if we do not attempt to do it here seem quite groundless.
If I were permitted to express an opinion about subsection (c) of section 5 I should have thought it was valid. That is to say, in connection with the subsection which reads:
(c)	falsifies any employment record required to be kept by law or any competent public authority;
I should have thought that falsification was a criminal offence, and that in its very nature it was morally wrong and detrimental to the public interest. But subsections (a) and (b) are different. They have to do with matters [DOT]of contract and civil rights. Then, subsection
(d)	reads:
(d)	punches a time clock with intent to
deceive;
That would seem to be a crime. Then, as to subsections (e), (f), (g), and (h) I would say that subsection (e) may contain an element of crime but, as the law officers of the crown have properly indicated, subsections (f), (g), and (h) seem to deal with matters essentially having to do with private contracts.

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I now turn to section 6 of the bill. What are the 'opinions respecting this section to which the Minister of Justice has referred. He stated in no uncertain terms that he had doubts as to the validity of this section-and when I refer to section 6 I direct your attention particularly to subsection (a), with which I have just dealt, and which makes it a crime for a man. to give a greater discount to one man than to his competitor. The Minister of Justice has doubts about this section. The following opinion expressed by Mr. Tilley appears at page 3166 of Hansard:
Subsection (1) of section 6 is, I think, of very doubtful validity, but sections (2) and (3) are, I think, valid.
By subsection (1) he means, I .think, subsection (a). At a later point, at page 3167 of Hansard, the opinion of Mr. Tilley is cited as follows:
All I can say is that in my opinion the subsections is of very doubtful validity, and I incline to the view it is invalid.
Here he is again speaking of subsection (a) of section 6. I do not think we need much more than that. However, let us turn to the statement of the Minister of Justice as it appears at page 3168 of Hansard. This is what the minister says:
I am giving the committee an opportunity of passing an opinion on the point. I think myself that they would be very inefficacious even if they were passed. I do not believe you could ever support a prosecution on them because you never could prove your case.
What is the use of our passing legislation of that kind? Why waste our time on it? First we have the opinion of Mr. Tilley that the subsections are doubtful, then we have the opinion of the Minister of Justice that he has grave doubts; then we have the opinions of the law officers of the crown that there is doubt. On top of that we have the opinion of the Minister of Justice that in any event it would be inefficacious.
I submit it is time we go to something more substantial than writing formal crimes into law books, knowing in the first instance that there are grave doubts as to the validity of the statutes enacted and graver doubts as to the possibility of securing convictions under them. I should have thought the Minister of Justice would have withdrawn these sections as to which doubts have been expressed by these eminent jurists. I submit for the consideration of this committee and that of the Minister of Justice that we had better devote our attention to something which holds in it more hope for the urgent problems of the people of this dominion than does the legislation before us.
I .conclude my observations by quoting a statement which appeared in a letter written last fall by the Prime Minister to one of his colleagues, upon which occasion he pointed out the danger of raising the hopes of people with regard to legislation of doubtful constitutional validity. Writing to the former Minister of Trade and Commerce (Mr. Stevens), the Prime Minister said:
In due course a committee of eleven was appointed and you were elected chairman. From that time the committee had an absolutely free hand and no effort of any kind, shape or form was made to in any way limit or restrict its activities except that on more than one occasion we pointed out to you the danger of creating in the minds of those interested, especially in the retail business, the impression that parliament could provide a remedy for the conditions of which they complained in view of the decisions of the courts as to the jurisdiction of provincial legislatures over contracts and price fixing.
I commend that passage to you, Mr. Chairman, and the committee. I believe we may well take note of it and the warning contained therein, namely, not to take our time in the passage of legislation of doubtful validity, and the attempt by a stroke of a pen to make the people of Canada conform to some idealistic standard of business ethics' couched in such general language as to prohibit perfectly legitimate and straightforward business transactions, and which cannot be enforced.
I submit to the Minister of Justice that the sections which he is advised by these eminent jurists are invalid or of doubtful validity ought to be withdrawn, so that we may get on with something more practical and useful.


Donald MacBeth Kennedy: Mr. Chairman, may I make bold to attempt to reply to some of the objections raised by the hon. member for Shelbume-Yarmouth (Mr. Ralston), the critic of the opposition. I wonder whether he has made it clear even to himself what his plan is so far as the carrying out of the report of the price spreads commission is concerned.


James Layton Ralston: Ask some of your own friends.


Donald MacBeth Kennedy: This aittack is a fair example of the guerilla warfare that is being carried on by the Liberal party throughout Canada, and a very considerable section of the financially interested press, so far as implementing the report of the price spreads commission is concerned!.
Let me first refer to the quesition of the legality of the amendments. I refer specifically to section 6 of the bill now under discussion. With reference to the opinion expressed by the Minister of Justice (Mr. Guthrie) quoting
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Mr. Tilley as ,to the legality of these sections, I refer the committee to an article which appeared in the Toronto Globe of June 4, under the heading How Great Minds Think Alike.
A new and' remarkable example of identity of thought expression, showing how great legal minds can think, speak and give legal opinions alike, and in strangely similar language, has brightened the annals of Canadian law. It is supplied by two legal opinions-one of the late Hon. Edward Blake, K.C., and one of W. N. Tilley, K.C., regarding the same questions of law submitted for their views at periods forty-five years apart.
Then is quoted the opinion of Mr. Tilley in 1935. His opinion has already been put on record1 in Hansard of this session at page 3166. The article then goes on to quote Mr. Tilley as follows:
The result may be an inconvenient exposure to a double liability, but that possibility affords no argument against the right of the dominion to exercise its powers.
Continuing, the writer of the article in the Globe says:
The same legal questions as to a conflict between dominion and provincial legislation arising out of convictions and penalties for offences under dominion and' provincial laws, within the power of both to legislate upon, arose in two old cases in Ontario in the years 1890 and 1892 respectively.
Mr. Blake-1890.
In one of these-that of Regina versus Stone, in the year 1802, reported in volume 23 of the Ontario Law Reports-the late Mr. Justice Rose, at page 49 of that case, said:
"In my opinion, Mr. Edward Blake, in his argument in Regina versus Wason, correctly stated the law as follows: 'The jurisdiction of the provinces and the dominion overlap. The dominion can declare anything a crime, but this only so as not to interfere with Or exclude the powers of the province of dealing with the same _ thing in its civil aspect and of imposing sanctions for the observance of the law (See No. 15 of section 92) so that, though the result might be an inconvenient exposure to a double liability that possibility is no argument against the right to exercise the power.' "
So much for the opinion of the late Hon. Mr. Blake. Now I refer to a comparatively recent case, as recent as 1931, a case with which the hon. gentleman who has just taken his seat (Mr. Ralston) is thoroughly familiar, the Proprietary Articles Trade Association et al, appellants, and Attorney General for Canada et ai, respondents, which was heard by the privy council on appeal from the Supreme Court of Canada (Law Reports appeal cases, 1931, page 310). Without referring to other matters which may be more appropriately dealt with when the bill creating the dominion trade and industry commission is receiving the attention of the house, I refer to a certain phase of the {Mr. W. W. Kennedy.]
judgment which is entirely in point. It discusses the question of the right of the parliament of Canada to declare acts criminal, and the whole principle is discussed in detail with respect to the limitations or otherwise of the federal parliament to declare acts criminal and to fix penalties. The views there expressed are to my mind particularly important in view of the contention that is sometimes made that the jurisdiction of this parliament to declare an act criminal must be in respect of some act that is by its very nature venal. I submit that that is not the law, and the hon. member for SheKburne-Yarmouth I opine is also clearly aware that that is not the law. In any event the unanimous judgment of the privy council delivered by Lord Atkin on behalf of the committee, dealing with th.e point under discussion, will be found at the bottom of page 323 of the report to which I have referred. In discussing federal jurisdiction as to establishing criminal offences, Lord Atkin states:
The definition is wide and may cover activities which have not hitherto been considered to be criminal. But only those combines are affected which have operated or are likely to operate to the detriment or against the interest of the public whether consumers, producers, or others; and if parliament genuinely determines that commercial activities which can be so described are to be suppressed in the public interest, Their Lordships see no reason why parliament should not make them crimes. "Criminal law" means "the criminal law in its widest sense."
Then is cited the case of the Attorney General of Ontario versus the Hamilton Street Railway, 1903, A.C. 524. Continuing, Lord Atkin says:
It certainly is not confined to what was criminal by the law of England, or of any province in 1867. The power must extend to legislation to make new crimes. Criminal law connotes only the quality of such acts or omissions as are prohibited under appropriate penal provisions by authority of the state. The criminal quality of an act cannot be designed by intuition; nor can it be discovered by reference to any statute but one; Is the act prohibited with penal consequences? .... It appears to Their Lordships to be of little value to seek to confine crimes to a category of acts which by their very _ nature belong to the domain of "criminal jurisprudence"; for the domain of criminal jurisprudence can only be ascertained by examining what acts of any particular period are declared by the state to be crimes, and the only common nature they will be found to possess is that they are prohibited by the state and that those who commit them are punished.


James Layton Ralston: Does my hon. friend not think that Mr. Tilley had that judgment in mind when he gave the opinion that notwithstanding that judgment this bill is of doubtful

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validity? And the Minister of Justice was also perfectly aware of that judgment and still is of the opinion that this measure is of doubtful validity.


Donald MacBeth Kennedy: I can no more guess what was in the mind of Mr. Tilley than I was able to guess when my hon. friend sat down what was his real attitude towards implementing the report of the price spreads commission.


James Layton Ralston: Does my hon. friend not think that Mr. Tilley would have taken occasion to examine the decision which has just been quoted before he gave the opinion which was read by the Minister of Justice?


Donald MacBeth Kennedy: I would assume. if my hon. friend asks me to speculate, that Mr. Tilley was familiar with that judgment.


James Layton Ralston: Thank you.


Donald MacBeth Kennedy: And as I understand the opinion he has given, it is not that the proposed amendments to the criminal code which I am now discussing are invalid.


James Layton Ralston: He said the section is of doubtful validity-


Donald MacBeth Kennedy: Mr. Chairman, if my hon. friend wishes to question me on any matter on which I can provide information I shall gladly give it, but to ask me to speculate as to what was in another man's mind-


James Layton Ralston: Will my hon. friend permit me? I am only pointing out to my hon. friend, who said that Mr. Tilley had not given that opinion, that Mr. Tilley distinctly said, "I incline to the view that it is invalid."


Donald MacBeth Kennedy: What particular section?


James Layton Ralston: Section 6, subsection (a).


Donald MacBeth Kennedy: We go to the privy council for the law and there is the law as laid down in the most recent judgment of the privy council by Lord Atkin in 1931. I think my hon. friend if he were arguing a case in the supreme court here would feel that he -was entitled to rely on this judgment of Lord Atkin until such time as it was overruled. I submit, therefore, apart altogether from the question whether these sections will effectively achieve what the report of the price spreads commission hoped to achieve, that they are quite valid. As to their effectiveness, that is another matter on which I shall perhaps have something to say when the Dominion trade and industry commission bill is before the house.
Let me say very humbly as ex-chairman of the royal commission on price spreads that I am indeed gratified to know that the government, even in the face of the attacks levelled against it on account of the possible doubt as to some of the legislation they propose, are going so far in spirit to implement the recommendations contained in the price spreads report. I congratulate the government upon their willingness even to submit themselves to the attacks to which they have been subjected to-night in their desire to carry out in spirit the recommendations of the price spreads commission.
Let me make another observation. It may be that upon challenge some of these provisions will be found to be invalid. As a member of the bar of twenty-five years standing I am familiar with the attitude of lawyers towards legislation and contracts. In advising as to the validity or otherwise of contracts they are influenced by their very training. Out of abundance of caution-ex abundante cautela-they feel it to be their duty towards their clients to advise against entering into a contract which might possibly be invalid. But when we come to legislating in this house in the way of reform I do not think that that hesitant attitude should prevail. I have enough respect for my opinion and reputation not to argue in or out of this house for something which I believe to be obviously invalid. When the legislation being introduced is to provide remedies for abuses which are recognized by all hon.. members as such; when it is agreed that the act or acts sought to be prohibited should be prohibited, then I submit we should be willing to break and occupy new ground. If on challenge this legislation be found to be invalid, I submit that it will not have been in vain. What purpose will it have served, even though it be successfully challenged? The federal government has sought to remedy practices which are considered unfair and against the public interest, and if it be held that the federal government has not jurisdiction so to do, then it will have served the purpose of directing the eyes of the people of Canada to the necessity of a readjustment of the legislative jurisdiction as between the federal and provincial governments. If it serves no other purpose than that, it has served well.
The comments of the hon. member for Shelburne-Yarmouth are very similar to those which have appeared in a large section of the press. What has been the purpose of this comment? I am not imputing any insincerity to the hon. member for Shelburne-Yarmouth, but the purpose of his comments has been to condemn this legislation in one way or
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another and to condemn the report of the price spreads commission by this guerilla warfare, thus rendering it ineffective. He is, in effect, saying: Nothing can be done; let things go on as they were. In support of this statement I should like to make reference to some of the press comments, which have been very misleading in two important respects. First, they have exaggerated the number of boards and necessary employees recommended, and, second, they have implied that the report recommended price fixing and much more drastic control of actual business operations than the commission ever contemplated. I quote from the Financial Post of May 25, as follows:
It would' require about 3,000 new civil servants to implement all the regulatory measures proposed by the price spreads report.
And on May 18:
It assumes that two score or more new statutes and several thousand new political office holders-
And on April 20:
In all, the report recommends 13 new government bodies.
I quote from the Toronto Telegram of April 9:
Price spreads report recommends score of new bodies.


Mr. YOUNG:: Hear, hear.


Donald MacBeth Kennedy: The hon. member laughs because I quote from a paper which supports the government. He is not accustomed to hon. members on his side being as fair as that. The same exaggerations appeared in the Border City Star of April 6, the London Advertiser of April 10 and (the Winnipeg Free Press of May 2, but I shall not take the time to quote them. Hon. members opposite, both in and out of the house, parrot-like, have repeated- the accusation that we proposed setting up thirteen new boards to be staffed with some three thousand additional employees. The facts are that two of the boards proposed, the live stock and- fisheries-whatever their merits or demerits may be-are recommended to be set up u-nd-er appropriate jurisdiction. In so far as the live stock board1 is concerned, the appropriate jurisdiction would be the Department of Agriculture; in the case of the fisheries board1 there is a pertinent department under which it would operate. In other words, the recommendation is for nothing more than a reorientation of some of the work now being done in .the Department of Agriculture with respect to live stock, marketing, grading, statistics, et cetera; or in the 
fishing industry for the setting up of an agency of the sort already provided for by the Natural Products Marketing Act. So much for the two board's.
The new division of standards recommended for the Department of Labour was so described to emphasize the necessity of hawing the functions for which the department -was originally created more adequately performed. No such recommendation would have been necessary if the department had been adequately staffed. The securities board and the consumer commodities standards board] were so described to -emphasize the importance of their functions. However, the report is very clear that they are only sections of the trade commission, and that their membership would consist of representatives of other departments having to do with the sam-e or related problems. With the need for better coordination of government departments, it is surely no offence to recommend the establishment of inter-departmental committees. Surely it is better if we are going to tackle these problems at all to support th-e judgment of one official, for example, the director of the securities division of the trade commission, with the judgment of his colleagues who have to consider the same general problems from slightly different points of view. I refer hon. members to price spreads report, page 238.
In the sense in which the press refers to the creation of new -boards and commissions, the report in fact recommended only three, live stock, fisheries and the trade and industry commission. It is true the trade commission would probably have several sections. It is true also th-at in various connections we recommended the creation of unpaid advisory committees, but surely no objection can be taken to the government making every effort to secure the practical advice and- cooperation of those who are likely to be affected by the administration of any law, new or old. To say that a score of new agencies was recommended' is the grossest distortion.
The frequently publicized- suggestion that three thousand new civil servants would be needed1 is even worse. This would- be from four to six times the number employed- -by the United States federal trade commission. Even if -the dominion trade commission were given all the powers recommended, it would probably start with a staff of not more than twenty-five and the utmost expansion of its powers would not call for a staff of more than one hundred.

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I quote from the Saturday Night of April 20:
-the commission would decide whether its capitalization was fair, and that would mean estimating the earning power of the enterprise . . . would decide whether there were enough in the industry already . .. would have power to decide the price level and to determine discounts, terms and other trade practices.
Whoever wrote that editorial did not take the trouble to read the report, or if he read it, he did so without seeing its clear intent. With respect to securities the recommendations were simply that gross overcapitalization and deceptive prospectuses by which investors might be defrauded should be prohibited and conservative practices-I use the word in the best sense-should be encouraged. There was no recommendation that all businesses should be licensed, none that prices or even discounts should be fixed by government authority. In fact, price fixing was positively rejected as a generally unsound policy. I refer hon. members to page 144 of the report.
During the Easter recess I read a six or seven column article in Saturday Night which attacked the report on the basis of price fixing and which referred to the failure of the price fixing features of the NRA. Price fixing was the one thing which we studiously avoided recommending and, therefore, this long article is based upon a false premise. Such is the basis of much of the press comment. I shall not take up more of the time of the committee so far as press comment is concerned. As to why the press adopts this attitude, hon. members can judge as well as I; but when I see papers like the Financial Post and Toronto Saturday Night attacking the report, damning it out of hand, without a proper or adequate consideration of it, then I must assume they are actuated by some other motive than that of the public weal.
As to these sections, I will frankly state this: I think the section, immediately under review, that is section 6, the amendment to the criminal code, section 498A with the subsections dealing with discriminating in trade, and so forth, really touches only the "fringe" of what was intended.


Ian Alistair Mackenzie: Hear,
hear.


Donald MacBeth Kennedy: Wei, my
hon. friend agrees with me when it suits him. That section touches only the fringe of what the price spreads report recommends. As I have said, I believe these provisions are valid; but let me say this: When you come to deal in the criminal code with trade practices that
are found and generally admitted to be unfair, I question the ultimate effectiveness of dealing with them exclusively in, that way. It is all well and good to deal with them in the criminal code by making crimes and offences of certain practices that we all agree should be prohibited in the public interest, but I think there is too great a rigidity in that method of dealing with them. What may be an unfair competitive practice and against public interest on one set of facts to-day may conceivably not be unfair even on a similar set of facts to-morrow. Times change; -competitive conditions change; the circumstances of commerce change, and even though you do outlaw in the criminal code certain trade practices that are obviously unfair, yet the ingenuity of the mind to find other means of unfair trade practices knows no bounds. You may outlaw certain practices to-day, 'but to-morrow other practices may crop up; so here I advance the view, which I propose to deal with more completely when we are considering the Dominion Trade and. Industry Act, that in -attempting to deal with unfair competitive practices, a trade and industry board should be given certain administrative power of its own volition and after investigation and consultation, with those who are trained in the industry in question, to find what are unfair trade practices and to issue an order to cease and desist. In that -way you escape the defect of the rigidity of putting such provisions in the criminal code alone. In other words, by such a procedure you have what may be called a continuity of administrative power. Therefore the best way to deal with the matter effectively is to set up such a board-and I submit the effectiveness of that board will depend largely upon its personnel-and give it power to determine from time to time, in the light of the investigations it may make and in the light of consultations with representatives of the industry itself, what are fair and unfair practices and to prohibit the latter.
Just one further point and I shall have finished. Another hurdle that is raised apart from constitutionality is the question asked by some: How can any board say what is "fair " and what is " unfair?" We have some leaders of business travelling across the country, even referring to us as " shyster politicians." Mr. Burton of the Simpson Company on a recent trip west was reported in the press as referring to conditions as looking good after the rains but saying that if they could only get rid of a few of these " shyster politicians," everything would be well. The same
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Mr. Burton who decried the idea that it was possible for any member of the House of Commons to know anything about business or anything in respect of it, went to Saskatchewan and gave a panacea for employing all the unemployed youth of the country. He was going to regiment them with colonels, majors, captains, lieutenants, sergeant majors, sergeants, corporals and lance-corporals, and put them into camps, and all that sort of thing. I quote that merely as a measure of the value of his judgment as to what we can do in this house, and I would suggest to him that if that is a fair measure of the value of his views, he had better stay behind the ribbon counter.
As to what is " fair " or " unfair," there are some matters that are fundamental. The sense of right or wrong; the sense of what is fair or what is unfair-these are instincts that are embedded in every human heart. This is a sense that overleaps all barriers of race, creed or colour. And so, when such a board comes to deal with practices in the trade, with power to put investigators into any line of business, to put in experts or accountants, to have books opened to them, to call witnesses and to consult those interested in the industry in question, I submit it is not a too difficult task for such a board to decide within reason what is a fair or an unfair practice.
One other point is this: this proposed legislation is often attacked from the point of view that we seem to think all business is dishonest. That was not the impression created on the price spreads commission as interpreted by me; we found that there is an honour in business, which is the fine gold of it. I have enough faith in my fellowmen to believe the average man wants to do the decent thing; he wants to conduct business in a decent way. This legislation is designed not to make criminals out of honest men or to attack those who want to play the game, but to clip the wings of the " chisellers " in commerce and to make it easier for those who want to do business in a decent way to do it.


James Lorimer Ilsley: I do not propose to follow the hon. member for Winnipeg South Centre (Mr. Kennedy) in everything he has said. I agree with some of what he has said; I think a certain section of the press has exaggerated the amount of government expenditure which would be necessary to carry out the recommendations of the price spreads commission, and I believe there would be no such addition to the civil service as such a paper as, for example, the Financial Post, suggests. But I do not think the hon. member should have imputed the motives he did to those who express sincere objections to some of the recommendations of the price spreads com-
mission. I thought he went entirely too far and was a little bit too free in what he said in that connection; nor do I know of any guerilla warfare that is being conducted against any recommendations designed to remedy abuses that were revealed by the investigation.


Ian Alistair Mackenzie: It is all on the other side.


Richard Burpee Hanson: It is all over there.


Ian Alistair Mackenzie: It is all on the other side. What about your own government?
Mr. ILSLE1 ; The line between those who-want a remedy of abuses that were revealed by the price spreads commission is not one that runs between two political parties. I would almost go as far as to say that I think every hon. member of this house would like to see these abuses remedied. But it is one thing to say that and another thing to say that everyone should agree with the hon. member for Winnipeg South Centre in the methods he thinks should be adjopted for remedying those abuses. There wTas disagreement between the members of the commission, and there continues to be disagreement up to the present time. As the hon. member correctly said, the commission recommended establishment of three boards or bodies, a federal trade and industries commission, a board of live stock commissioners and a fisheries board. Three of the Liberal members of the commission, the hon. member for Belleehasse (Mr. Boulanger), the hon. member for Toronto West Centre (Mr. Factor), and myself, dissented from the recommendation to set up a board of live stock commissioners because we thought it would be a fifth wheel to the coach, entirely unnecessary, and that anything it could possibly do could be done by existing agencies. In that respect our attitude seems to have met with the approval of the government. The government do not propose to take steps to set up a board of live stock commissioners, and I commend them for their good sense in coming to that decision. In regard to the board of fisheries. I suppose we shall be represented in the fishing districts of the maritime provinces as not wanting to help the fishermen. But nothing could be further from the truth than that. In as carefully reasoned a statement as we were capable of making we gave the reasons why we thought the establishment of a fisheries board with the powers that were recommended by the majority of the commissioners would hurt the fishermen more than it would help them..

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We thought it would be a serious injury rather than a benefit to the fishing industry of the maritime provinces, and I do not want to be represented either here or elsewhere as being out of sympathy with the fishermen of the maritime provinces because I had an honest difference of opinion with some of my colleagues about what should be done to help them.
When we come to the matters before the -committee-and really we are discussing sections 4, 5 and 6 of the amending bill-I want to say very frankly what I think about those sections. I listened with great care to the opinions read by the Minister of Justice (Mr. Guthrie) which he obtained from Mr. Tilley and Mr. Geoffrion. I am so much impressed with the seriousness of the offences against the minimum wage acts of the provinces that I should be disposed to concur in the enactment of such criminal legislation by this parliament- as would have the effect of putting an end to these abuses. So far as I can see, there would not be much objection to the enactment of 415A, that is section 5 of the amending act. It is true that there is an opinion of one counsel, Mr. Geoffrion, that subsections (a) and (b) are not within the competence of this parliament. I thoroughly appreciate the legal reasons given by Mr. Geoffrion for that conclusion. But it is not an extremely serious thing for this parliament to legislate beyond its jurisdiction on a matter of this kind. It is a very different thing when we come to section 6, as I shall- try to point out. It adds another penalty, which may or may not be enforceable. I should think there is some argument for the validity of the section; apparently Mr. Tilley thinks its provisions are perfectly enforceable. What occurs to me is that the violation of minimum wage regulations, the payment of girl workers at less than the minimum rate and the fraudulent and cruel practices resorted to by many employers, are of national, not only of provincial, importance, and that there is considerable justification for the enactment of legislation of the kind set out in section 5.
But when we come to section 6 different considerations prevail. To put the matter very briefly I should say it would be a mistake to pass subsection A of section 498, which is found in section 6 of the bill. Let us look at that section:
Every person engaged in trade or commerce or industry is guilty of an indictable offence and liable to a penalty not exceeding $1,000 or to one month's imprisonment, or, if a corporation, to a penalty not exceeding $5,000 who
(a) is a party or privy to, or knowingly assists in, any transaction of sale which discriminates against competitors of the purchaser in that any discount, rebate or allowance is granted to the purchaser over and above -any discount, rebate or allowance granted to the aforesaid competitors in respect of a sale of goods o-f a similar quality an-d quantity;
Perhaps the committee is not fully aware of the grounds for the recommendation against discriminatory discounts, rebates and allowances -that is contained in the price spreads report. I do not know with certainty what was in- the minds of my fellow commissioners, but I can say what was in my own mind in coming to the conclusion that discriminatory rebates, discounts and allowances are for the most part injurious to the economic life of the country. It was this, and this only: that the tendency of such discriminatory rebates, discounts and allowances is to eliminate competition. I suppose a person has to have a certain economic philosophy in considering our contemporary life in this country. Most of the commission did not take the socialistic view that competition should be done away with, but rather the view that competition should be preserved, that competition is a most important regulating factor, and that our legislation should be directed to the abjective of preserving fair -competition among our trades and industries. It was brought to the attention of the commission that manufacturers were giving much larger discounts to -corporate department stores and perhaps chain stores-although I would not be certain of my recollection on that point-than they were giving to voluntary chains. The committee will understand what that means. A great department store with immense buying power is able to get a discount of say twelve or fourteen per cent off the list price. A number of independent retailers get together, form a voluntary chain and undertake to buy in just as large quantities, to pay cash and to warehouse, in other words as purchasers to put themselves on exactly the same footing as the corporate purchaser. But it was discovered that the members of the rubber combine, so-called, would not give them the same terms that they gave the corporate purchaser. The inevitable effect of such a practice on a wide scale is to drive out the independent competitors of the corporate purchaser. It lessens competition, and if continued for a long period of years results in something approaching monopoly, or quasi-monopoly. That is the basis of the legislation in the United States-I do not know whether in other countries or not-against discriminatory discounts, rebates and allowances, that it results in the elimination of competition and thereby deprives the consumer of the protec-
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tion which he should be given by the preservation of competition. None of that, of course, appears from this section. It is quite possible that if the section were redrafted in such a way as to show that the public interest was being thought of, it might have a much better chance of running the gauntlet of the courts than it will in its present form. I direct the attention of the Minister of Justice to that; because he will recall that in the Combines Investigation Act case from which the hon. member for Winnipeg South Centre has read, that was a very important element in the decision. The judicial committee of the privy council said:
*-if parliament genuinely determines that commercial activities which can be so described are to be suppressed in the public interest, their lordships se no reason why parliament should not make them crimes.
But in the Combines Investigation Act it was expressly stated that only those combines which operated or were likely to operate to the detriment or against the interest of the public, whether consumers, producers or others, were to be regarded as criminal enterprises, and it might be possible by a change of draftsmanship to give this section a better chance before the courts. I do not agree with my hon. and learned friend from Winnipeg South Centre that we should pass invalid legislation for the sake of directing public attention to particular matters.


Donald MacBeth Kennedy: If the hon. gentleman will permit me, I clearly pointed out that I had too much respect for my reputation to suggest that either in this house or out of it I would support the passing of obviously invalid legislation. My argument was that there was some doubt about the legislation, and I advanced the suggestion that where it was only a question of some doubt we might well pass it and run the risk of the challenge.


James Lorimer Ilsley: My answer to that is that we should not pass even doubtful legislation if there is a possibility of making it valid. There is a tendency in this parliament this session to go at the passing of legislation in a very careless and irresponsible manner. The NRA decision in the United States rendered a great service in bringing it home to the people of this country that you cannot just put on the statute books anything you feel like putting there, whether or not it is constitutional. and that to pass a volume of doubtful, unconstitutional and invalid legislation causes immense misery, unrest, disappointment and discontent among the people of the country and leaves them in all kinds
fMr. Ilsley.]
of losses, difficulties and trouble. When hon. gentlemen opposite attack this party for paying some attention to the constitutionality of this legislation they are overlooking that fact. A person is rendering a service to his country when he points out the respects in which legislation is doubtful or unconstitutional, and I think no one realizes that better than the-hon. gentleman who preceded me in this debate. I said that was the basis of legislation such as this, but you can drive through this section with a coach and four. As the Minister of Justice very correctly said, under this section it will be impossible to get a conviction.


Hugh Guthrie: No, I did not say that.


James Lorimer Ilsley: It was something like that.


Hugh Guthrie: I said it would be difficult.


James Lorimer Ilsley: It would be very, very difficult. To begin with, as my hon. friend from Shelbume-Yarmouth pointed out, this affects only rehates, discounts and allowances; it does not affect price discriminations. For instance it is still possible, and quite properly so, for a man who, for example, has apples or fish on his hands to take on the same day from the second purchaser a different price-from that which he took from the first purchaser. You have to do it in order to get rid of your product. There are many cases, particularly in connection with perishable goods, where there must be price discrimination, and anything that prevents price discrimination prevents the carrying on of business. If the section were changed to affect price discriminations there would have to be a great many exceptions and provisos.
Very little care has been exercised in the drafting of this section; apparently whoever drafted it had only a superficial view of the problem before him. The problem is -a very difficult one to meet. It is hard to make the offences definite and put them in the criminal code because then, as the hon. member for Winnipeg South Centre very properly pointed out, those desiring to evade the law think of a new form in which to carry on their evasion. On the other hand if you set up a board and leave it to the board to define offences, you give that board a dangerous power; you really give it the power to legislate in what is essentially the criminal phase, so it is a very difficult problem. I do not know whether the draftsman of this legislation studied what they did in the United States. In 1914 in that country they had extensive debates on these very topics, and since then

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they have had legislation under two acts, the Clayton Act and the Federal Trade Commission Act. I think I will place on Hansard section 2 of the Clayton Act in order to show the care with which this legislation was drafted in the United States, a very different thing entirely from this slapdash section.
2. That it shall be unlawful for any person engaged in commerce, in the course of such commerce, either directly or indirectly to discriminate in price between different purchasers of commodities, which commodities are sold for use, consumption, or resale within the United States or any territory thereof or the District of Columbia or any similar possession or any other place under the jurisdiction of the United States, where the effect of such discrimination may be to substantially lessen competition or tend to create a monopoly in any line of commerce: provided, that nothing herein contained shall prevent discrimination in price between purchasers of commodities on account of differences in the grade, quality, or quantity of the commodity sold, or that makes only due allowance for difference in the cost of selling or transportation, or discrimination in price in the same or different communities made in good faith to meet competition: and provided further, that nothing herein contained shall prevent persons engaged in selling goods, wares, or merchandise in commerce from selecting their own customers in bona fide transactions and not in restraint of trade.
I do not know that I would advocate the adoption of that section but certainly I would be opposed to the adoption of subsection (a) as it is placed before the House of Commons. To begin with, it does not touch the question of volume discounts at all; it refers only to quantity discounts. The great evil-I know it is controversial as to whether or not it is an evil, but I consider it so-that we found was that a purchaser who was prepared to buy in equal volume to another purchaser, over a certain period, say a period of a year-*


Donald MacBeth Kennedy: Does not the term "quantity" mean the same as "volume"?


James Lorimer Ilsley: No. I do not think there is anything in common, between, the two. My hon. friend will remember that there was a clear distinction between volume discounts and quantity discounts. The quantity discount is the discount on a certain shipment; the volume discount is what the purchaser gets crver a certain period of time. They are altogether different, and in turn they are both different from a quota discount, which is something else again. Then there are trade discounts and cash discounts. This provision only applies to quantity discounts. Volume discounts in my judgment, are the important discounts. The case I mentioned a while ago was a case of gross discrimination in volume discounts, something which I do not consider to be in the interests of the country, and something which should be prevented if it can be prevented by legislation. Certainly it cannot be prevented in this superficial way.
I do not know that I have very much more to say with regard to this section, but I consider it so far short of anything that is useful that I do not think this subsection should be passed. Of course none of these sections is any good unless you have a vigorous board or commission to do the investigating; I think my hon. friend admitted that. When we come to subsections (b) and (c), I do not see any objection to1 them; I do not think there is any question about their constitutionality or their validity, but in those sections the burden of proof on the crown is extremely heavy. The crown must prove that there is a policy of selling goods; they must prove in the one case that the goods are sold at unreasonably low prices, and they must prove that they are sold for a certain purpose, that purpose being to destroy competition or eliminate a competitor. There is no doubt in miy mind that if that is proved there ought to be a conviction and there ought to be an enactment that will justify a conviction. The whole history of the Standard Oil Company in the United States is a history of predatory price cutting and territorial price discrimination, which resulted in that company driving out its competitors one by one until it had nearly the whole of the business in the United States. If there had been enactments like this which could have been enforced1-I admit that they are very difficult of enforcement-they would have prevented a great evil in the United States, and I think possibly the same would be true in the Dominion of Canada.
So to put it briefly my position-and I do not think my hon. friend will say it is a position of guerilla warfare-is a mild position: Although there are some doubts about the constitutionality of subsections (a) and (b) of the new section 415A, and although the law officers of the crown condemn practically all the section, I should be disposed to support it. But subsection (a) of section 498A is so bad it should not be supported. Subsections (b) and (c) should be supported, but owing to the terrific burden on the crown of enforcing them I am doubtful whether there would be many convictions under those subsections. All the subsections of section 498A will be a dead letter unless we have a vigorous investigating body behind them to get out the evidence and to find out whether or not such evidence comes within the meaning of the sections.
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Mr. STEVENS:: I have listened with a
great deal of interest to the observations of the hon. member for Shelburne-Yarmouth (Mr. Ralston) as well as those of the hon. member for Hants-Kings (Mr. Ilsley). I rather regret the attitude indicated by the hon. member for Shelburne-Yarmouth. He is one of the outstanding legal minds of the house, and I think he will not accuse me of discourtesy if I say that really the substance of his remarks was to pour ridicule on the whole business. To one who is not a lawyer, but I hope not without some experience and some knowledge in matters of this kind, I felt a bit of despair come over me. Is it possible, Mr. Chairman, that when we are confronted with conditions which those who have given any thought to the matter at all must admit are tragic, this great house of parliament is so helpless, so hamstrung and tied hand and foot, that in connection with any question we must be confronted with the constitution? I am wondering: Is this constitution we hear so much about-and, strangely enough, largely from interests gloriously prosperous under it -is this constitution such that those who are suffering under the handicaps that have been described in connection with this very bill, namely unorganized workers of the most helpless type as well as the smaller businessmen to whom the hon. member has just referred, have no rights under it at all? Is it possible that it is not within the power of parliament to do anything for them? Yet that seems to be the case, because the Minister of Justice (Mr. Guthrie), in what I have no doubt was a very learned dissertation upon the matter, said that the measures we are asking for in the report cannot be granted because possibly they may be unconstitutional. Therefore he brings down this bill. The minister is followed by the most eminent legal light on the opposite side of the house-and I make that observation in no tone of irony, wishing only to pay tribute to my hon. friend's high legal attainments-the minister, I say, is followed by that hon. member who says: "Well, this is so ridiculous that we should drop the whole business; let us forget it and go on with something else." It is a sorry outlook for those of us who are not lawyers and are trying to do something.
In view of the fact that all those who preceded me wandered over half a dozen bills I wonder if I might read to the committee that which I believe hon. members opposite will agree is the reasonable and considered view of the commission. I do not think any of them will dissent from that statement. If perhaps I read at some length I shall ask the committee to follow me, because really I do

believe we should try to get back to that which we are proposing to do, namely to correct the abuses which seem generally to be admitted as being present in our social and economic structure.
By the way, I shall read from this report the words which indicate what the trade and industry commission should do, but I shall ask the members of the committee to follow the other part of it, and later we will discuss the matter of the trade and industry commission versus this method. Under the paragraph headed "The definition of unfair trade practices" I read:
We therefore recommend that the trade and industry commission should, in the manner and to the extent previously recommended' in connection with consumer protection, supervise the enforcement of existing laws which prohibit certain business practices.
There is no dispute about that. Then:
There are, however, other competitive practices, which while not illegal may be equally unfair. These take many forms, but the majority of them may be brought under the definition of unfair price discrimination; "unfair," because it operates inequitably as between competitors, because the burden of it is often pushed back to the wage earner or primary producer, without corresponding benefits to the consumer.
I pause there. What we found, sitting as a commission, was that these practices which were declared to be unfair and which subsequent to these words .are elaborated, had this effect: they bore down upon the wage earners- we know that resulted in the sweatshops; they bore down upon the primary producer, or worked back to the primary producer who carried the load, and they conferred no great benefits upon the consumer. There you have the people about whom parliament is concerned. There are innumerable illustrations in the evidence in support of my statement. And, by the way, I sometimes think the House of Commons needs about a week's discussion on this matter in order to refresh the memories of hon. members on much of the evidence and enable them to have a full appreciation of it. May I interject at this point that a moment ago the hon. member for Hants-Kings said that price discrimination in the handling of fruit was inevitable. He will realize that we are discussing general unfair price discrimination, and not incidental price discrimination which might arise in connection with fruit, fresh fish or other perishable goods.


James Lorimer Ilsley: I agree the report covers that, but if the section under discussion extends to price discrimination-which it apparently does not-it goes entirely too far, and makes no exceptions.

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Henry Herbert Stevens: That has been amply demonstrated here to-night. My hon. friend in a very able way ridiculed1 the whole business. There is the danger of confusing the' economic, legal, and ethical implications of unfairness, but no one will say that we must confine ourselves merely to that which is strictly legal. We have at least some duty to make some provision for dealing with that which might be unethically or inequitably unfair. I quote again from the report:
We recognize that there is a very real danger of confusing the economic, legal, and ethical implications of "unfairness" and we feel that this danger might be removed to some extent if certain general criteria were laid down in the act.
That is, in the act respecting the trade and industry commission we should endeavour to lay down certain general principles that might be a guid'e to commerce and which would be adopted I believe by business men generally, so that by the very force of public opinion we would be able to achieve what the lawyers all tell us is so difficult to achieve in statutory form. Let me proceed:
We suggest that practices should be prohibited as unfair which are characterized by bad faith, fraud', misrepresentation, or oppression; Which are resorted to for the purpose of destroying competition or eliminating a competitor; which facilitate the development _ of monopoly; or which destroy fair competitive opportunity and prevent the survival of those who can organize and carry on the production of goods most efficiently. It is in this sense that the word "unfair" should be used in the act.
We do not say that we should work out in an ultra constitutional manner all of those things in statute law, but we do say that it is surely possible to frame an act which will declare to the Dominion of Canada that certain practices in business come within the terms of unfair and unethical practices. Having defined them, even if those who impinge upon those practices cannot be punished by criminal law or some other process, the very fact of the existence of those practices, with the publicity that is given to them, of which I shall speak later on, will hold such people up to the public as guilty of an unfair act. The commission's report proceeds:
Without attempting to restrict the application of this test of "unfairness" by the commission, we feel that certain practices which we have examined should very definitely be considered "unfair" under the act. They are

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appropriate, publish their prices and discounts. Further, each decision published should state clearly the facts, the argument and the ruling, so that the reports would constitute a body of intelligible case law.
I think there is one other quotation I should like to make later, but I pause here to point this out: This is a weapon that the commission can use, that would accomplish our aims and objects in spite of these narrow and legal technicalities-the power of investigation, the publicity that would be attendant upon it, following of course upon what I said a moment ago, the laying down of general principles in regard to unfair practices.
I wish to read one other quotation and then I shall desist from that part:
Having considered the more common form of price discrimination by which mass buyers are able to obtain preferential treatment, it remains only to draw the obvious conclusion. There is little serious objection to discounts, free deals, and allowances when these are available to all on the same terms, and are related to any measureable service rendered, or economy effected. At the worst they simply complicate the problem of accounting and costing. But when such concessions are given not in return for any service, not openly, and not to all on the same terms, they involve gross discrimination and become a powerful weapon by which mass buyers compete unfairly with their small rivals and use their massed purchasing power to take undue advantage of their weaker suppliers.
That is the finding of the commission. What I suggest is this: Inasmuch as legal advisers by their arguments and learned opinions of certain eminent counsel throw doubt upon the matter, I suggest that care should be taken to redraft those clauses so that they will be more to the point in regard to matters that ought to go into the criminal law, but that the Minister of Justice

and I appeal to him now-give earnest study to the proposals set forth on these two pages of the report and include them in the bill that has been introduced to create a trade and industry commission. I will discuss that bill further when we come to it.
But I draw to the attention of the Minister of Justice and of the members of the committee the spirit as well as the terms of this report as represented and set forth by the commission itself. I do not think any member of the commission will say that I am making an overstatement when I say that these suggestions were the result of long and careful handling of this question and of veiy minute and analytical discussion among ourselves. I do not think there is any difference between us other than the reluctance of certain hon. members to set up a new commission; on the other part of the matter there is not much difference of

opinion. I therefore make that suggestion to the Minister of Justice in the hope that we may find some way of passing legislation that will be helpful to those who are bearing the brunt, shall I say the penalty, of the actions of others, the worker, the primary producer and the consumer getting no benefit, as the report indicates, not through any act of their own, but because of unfair, predatory and discriminatory practices in another realm altogether.


Edward James Young: The commission on price
spreads and mass buying-and I say this with all due respect to the majority of the the commission-spent much time and! effort in exploring conditions* and business practices as they exist. It spent little time in delving into the underlying causes of those conditions and trying to seek out the remedy. It appeared to me that for every evil that was found to exist, the commissioners had in their minds one and1 only one remedy, and that perhaps the most futile of all, namely, to pass a law against the evil. Were some people suffering from what they considered unfair competition on the part of their competitors, unfair trade practices, the commission would suggest the passing of a law against it. Were the farmers not receiving from the packers an adequate price for their cattle or hogs, the idea in the mind of the commission was to pass a law against paying low prices. Did merchants find themselves unable to get the cost of their goods ouib of their customers, the remedy that suggested itself to the commission was to pass a law against price cutting. As I said before, the one remedy that suggested itself to the mind of the commission for every evil was to pass a law against it.
There had arisen in this country a condition where business came almost to a standstill. Merchants found their stocks were not moving; manufacturers were unable to get orders for their goods and had to lay off their men. It seemed to me that this condition was not and could1 not be due to the business practices of any one class of merchants or any one Class of buyers; there must have been an underlying cause for it all; for the business decline was experienced not only by the small buyer but by the large buyer; it was experienced not only by the small manufacturer but by the large manufacturer. Every class in the community experienced the same thing. The cause of the trouble in my opinion was the fact that the primary producers in this country had lost their income. The income of our farmers during the first two years of the

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depression was cut in half; fifty per cent of their income had disappeared, while retail prices of the goods they had to buy had fallen only about one or two percent.


An hon. MEMBER:: That is wrong.


Edward James Young: No, it is not wrong. I have the figures before me showing that where the net value of farm production for 1928 was $1,501,000,000, .by 1930 it had fallen to $860,000,000. or almost one-half. The index figure given by the bureau of statistics of retail prices, taking 1926 as the base year, letting 1906 equal 100, stood in 1928 at 98-9 and in 1930 at 99-2; in fact retail prices had actually increased slightly while the price of farm products had dropped almost fifty per cent. That condition did not apply to the farmers only; the same condition prevailed in the fishing industry, the lumber industry and all our basic industries. Was it to be expected that under conditions such as these, business would thrive in this country? How can you expect the Canadian people to buy goods when their incomes are cut in half? The primary producers, farmers, fishermen, lumbermen and so on, constitute perhaps sixty per cent of our population, and with sixty per cent of our population unable to buy goods, everyone in business suffered. It seems to me that the logical remedy for that situation is not to pass laws against price cutting but to find what was the cause of the two price levels which had arisen. Here we have sixty per cent of the people of the country selling their goods at a lower price level, while the things they want to buy are on a higher level, so much so that they cannot buy them. The remedy lies in seeking the cause of that condition and removing it, not in passing laws against price discrimination and unfair trade practices.
To me it seems that one of the principal causes of that situation is the wrong fiscal policy which has been followed by this country. I am not blaming this government alone; it has been the policy of the country for years. But this government accentuated the trouble; it went to the extreme limit when on coming into power it found that prices of primary products were falling, and instead of taking steps to see that the prices of secondary products fell with them, they took steps to prevent that, with the result that retail prices were maintained at practically the former level, or in some cases at a higher level, while the prices of farm products dropped almost forty per cent. Yet a stranger coming to this country and reading
the majority report of the price spreads commission and having no other source of information would have the impression not only that the fiscal policy of the country was in no way to blame for the situation, but that it had actually helped to improve conditions. Nothing could be. further from the truth. The hon. member who just spoke (Mr. Stevens) referred to the price of tomatoes being cut to 70 cents when it should have been 80 to 90 cents. Why was it cut to 70 cents? Did any man cut the price just for the fun of it? It was cut to 70 cents because the people who had those tomatoes had to find a way of getting them into the hands of the consumer. As I said before, a condition arose in which the consumers could not buy the goods, and the merchants were then obliged to find goods at a price which the consumers could pay or not sell them at all. Some influence had to come into the market to force down the price of retail goods to a parity with the price of primary products. When we proceed to legislate against the forcing down of those prices we legislate for conditions which will perpetuate the depression instead of relieving it. Let me give an example. Beans were priced at 5 cents a pound. They were not selling at that price, because people could not pay it; therefore the merchants could not sell the stocks they had, and so could not buy any more from the farmers. The price of beans to the farmer dropped to sixty cents a bushel. Then one of the large chain store concerns said: We think we can clear up this situation. So they advertised beans for sale throughout the country at one cent a pound-that is price slashing for you. What happened? They sold thousands and thousands of bushels of beans at that price. Other merchants had to meet that price; they had to take the loss on the stocks on hand. Such large quantities of beans went into consumption that the market was cleared, the glut was removed and immediately the price began to rise. Now I ask you, was it not better for the farmer, for the consumer, for the merchant, for everyone concerned that the price of beans be slashed as it was so that beans would move into consumption, than that the price be maintained as the merchants were attempting to do, with the result that no one could sell any beans?


An hon. MEMBER:: Would you apply that argument to wheat?


Edward James Young: Yes, absolutely. The hon. member for East Kootenay (Mr. Stevens) says that discounts should be placed on a
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scientific basis. On what scientific basis will you place discounts? The price at which goods should sell is the price at which they will move. No board can sit in an office and determine any scientific price basis at whioh goods will move. The price at which they will move is the price which the eon-sumer is willing and able to pay for them.
We have had much discussion as to whether or not this legislation is valid. I leave that largely to the legal members of the house. I am more concerned with whether or not this legislation is desirable. Is it desirable even if it is valid? Let us look at it. The hon. member for Winnipeg South Centre (Mr. Kennedy), speaking the other night on. this bill, said that when a man steals a loaf of bread he is branded as a thief and senlt to gaol; therefore when a man steals the time of his employee he also should be sent to gaol for it. I agree; no one disputes that. .But this legislation goes much, further than that. It not only proposes to send the man to gaol for stealing the time of his employee; it proposes to send him to gaol for working his employee overtime even if he pays him for it. Section 5 says:
Everyone is guilty of an indictable offence and liable to two years imprisonment or to a fine not exceeding $5,000, or to both imprisonment and' fine who, knowingly-
(a)	employs -a person at a rate of wage less than the minimum wage rate fixed by law or any competent public authority;
(b)	permits an employee to work beyond the maximum hours fixed by law or ,any competent public authority;
What does that section contemplate? We are providing a penalty of fine or imprisonment or both for any man who permits his employee to work beyond the maximum hours, such maximum to be determined by some competent authority. We do not know what the maximum hours would be; we do not know what would be determined to be a crime in the different provinces, but we know that if any employer permits his employee to work overtime, even if he pays him double time for it, he can be sent to gaol. Let us take a few cases. Suppose a bricklayer is sent by his employer to build a chimney. Suppose when quitting time comes the chimney is almost finished, and he says: "I do not want to come back to-morrow morning and finish this; I will work an extra half hour and finish it to-night." His employer may be sent to gaol.


Hugh Guthrie: Is the employer permitting him to do that?


Edward James Young: Yes, under this legislation. Suppose a garment maker, making a lady's

dress or a man's coat, when quitting time comes is not quite through, and the customer wants it that night. If the employer permits that employee to finish that garment, even if he pays double rate -for the extra time, under this legislation he can be sent to gaol. So with a plumber mending a leak in a pipe. Or suppose you are out in the country, something goes wrong with your car, and you take it to a nearby garage and set a man to work on it. When his working time is done he is not quite through. But he must not finish it; if he does his employer can be sent to gaol, so you can. wait until the morning, whether there is any place to stay or not. Or suppose a train is out on the road; when the crew's day is up they may be somewhere out on the main line, and if the dispatcher orders them to come to the terminal he also can be sent to gaol for permitting them to work overtime. This legislation might be made to apply to farmers, whatever is determined by the competent authority, and in some provinces they might decree maximum labour hours for the farmers, in whioh event a farmer who permitted his hired man to stay until he finished the field at night, or perhaips sent him to milk the cows after supper, could be sent to gaol. I went down Bank street the other night and saw them digging a sewer there, and I thought that if at just about quitting time that sewer caved in and half buried some workmen, and the contractors permitted the others to dig them out, they could be sent to gaol for it.


Some hon, MEMBERS:: Oh, oh.


Edward James Young: My hon. friends laugh, but that is the way the act reads.


Hugh Guthrie: Has my hon. friend read the limitation of the Hours of Work Act? That would be the competent authority, as to emergencies and the like.


Edward James Young: The hours of labour undoubtedly will be set by the local authorities, and they will be different in different localities. This provides a penalty for whatever act is passed by whatever local authority.


Hugh Guthrie: By a competent local authority.


Edward James Young: I will admit that many of them are not competent. Speaking of incompetence, let us go back to subsection (a), which reads:
-employs a person ait a rate of wages less than the minimum wage rate fixed by law or any competent public authority;
During the investigation we found cases in which the minimum wage law had to be

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ignored, and this was particularly so in the garment trades. As I said before the public had ceased to buy garments; they could not buy them. What were they doing? The women had sewing machines in their homes, and they were commencing to make their own garments. Those engaged in the garment trades, therefore, had to compete with the housewives who had sewing machines in their homes. That is why wages are always low in the garment trades; they have to compete with the housewives. As I have already said, it was found that people would not buy garments at the prices which the factories had to charge. Then, by agreement between the employers, the employees and the unions, they said, ''In order to get work at all in these factories we will have to take wages less than those provided by the minimum wage law." We asked the competent authority of one of the provinces how he arrived at his minimum wage. He replied, "Oh, we arrived at that fifteen years ago. WTe based it on the cost of living." Then he was asked, "Have you never Changed it since?" He replied, "No, there has been no change in the cost of living since then, so we never bothered changing the law." He was so competent that he did not know that in the last fifteen years the cost of living has varied as much as twenty per cent, but the minimum' wage had not been varied accordingly. Now let us look at the next offence:
(c)	falsifies any employment record required to be kept by law or any competent public authority;
Have we not laws already against falsifying records? I think we have, so we do not need further laws. Then the next offence:
(d)	punches a time clock with intent to deceive;
Is there not a law against that now? It is the same as making a false entry in a record. Then let us turn to the next offence:
(e)	puts the wages of more than one employee in the same envelope with intent to evade the provisions of any minimum wage law;
Any person wishing to evade that section simply need not use envelopes. The offence is putting the wages in an envelope.


Hugh Guthrie: That is the offence we are aiming at.


Edward James Young: The next offence is:
(f)	makes any deduotioni from any employee's wages for any purpose not warranted by law unless such deduction has been approved first by a competent public authority;
Is it not quite apparent that any person who makes a deduction from his employee's
wages contrary to the law is breaking the law? I do not think that section is necessary at all. The next offence is:
(g)	employs any child or minor person contrary to law;
What is a minor person? I am not a lawyer, but I think it is a person under twenty-one years of age. Here we have a prohibition against the employment of children or minor persons contrary to law; a man can be sent to gaol for that. Then the last offence:
(h)	does any other similar act contrary to law oir the rules or regulations of any competent public authority.
Then the penalties follow; a year's imprisonment or So.000 in fines for breaking any rule or regulation made by certain public authorities to be set up by other bodies. Then we pass on to section 6, and we find:
Every person engaged in trade oir commerce or industry is guilty of an indictable offence and liable to a penalty not exceeding one thousand dollars or to one month's imprisonment, or, if a corporation, to a penalty not exceeding five thousand dollars, who
(a)	is a party or or privy to, or knowingly assists in, any transaction of sale which discriminates against competitors of the purchaser in that any discount, rebate or allowance is granted to the purchaser over and above any discount, rebate or allowance granted to the aforesaid competitors in respect of a sale of goods of a similar quality and quantity;
Translated that means that if you give a discount to one person you have to give the same discount to another person. The object of this provision is to give the small merchant the same chance in the market that the large mass buyer has, but this section will not achieve that end because in the investigation we found that one of the largest chain stores in the country, and I think perhaps one of the hardest buyers in the country, received hardly any discount. They did not go in for discounts; they did not ask for discounts. They said, " What is your price? This is what we will pay, no more, no less." As my hon. friend from Hants-Kings has pointed out, this section is almost impossible of enforcement. Then we go on to the next subsection:
(b)	engages in a policy of selling goods in any area of Canada at prices lower than those exacted by such seller elsevdiere in Canada, for the purpose of destroying competition or eliminating a competitor in such part of Canada;
I wonder if that is meant to apply to goods that are sold prepaid. Let us take cigarettes manufactured in Montreal and sold at the same price all over Canada. The company has to pay the freight on those cigarettes all
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the way to Vancouver, and naturally they will have to take less for the cigarettes they sell in Vancouver than for the cigarettes they sell in Montreal or Ottawa. I do not know whether that would be considered discrimination. But let me give you an example of what is happening now, in order to see how this would work out. A certain chain store has a large number of units in different parts of this country. It adopts the practice of settling at the same price in all those units, as far as possible, but it finds that in one particular city it has a competitor, also a chain but a local chain with all its stores located in one place. Under this section that local chain can cut prices as to-day it is cutting prices, on the larger chain. Under this section the larger chain would be denied the right to meet those prices unless they sold their goods for the same prices in every part of the country, but they could not sell for the same price all over the country. What would you do about it? In that way you could tear that big chain to pieces, by letting this one chain undersell it in this place and another chain undersell it some place else, and so on. Then the next paragraph:
(c)	engages in a policy of selling goods at prices unreasonably low for the purpose of destroying competition or eliminating a competitor.
I do not know how you would determine whether prices were unreasonably low for the purpose of destroying a competitor or eliminating competition, but as I said before the trouble in this country to-day is that prices have not been low enough. The prices of primary products went down to the point where the producers of those goods could not buy the secondary products because they could not pay the retail prices for them. It has been found impossible to raise the prices of primary products. The only way to1 get business moving, the only way to increase employment, the only way to restore prosperity in this country is to bring down prices. Merchants were not willing to bring down prices because they did not want to take the losses it would involve in connection with the stocks on hand. Those cutting prices were the ones forcing prices to come down; they were really the benefactors of the people, because they were forcing on the mercantile trade generally the very policy that was required to get business moving.
On the whole I think the legislation, whether valid or not, is undesirable and for that reason, Mr. Chairman, I believe it should be opposed.


James Shaver Woodsworth: It seems to me, Mr. Chairman, that as so far we have had speakers only from the government side and the opposition, possibly it would be well that some of us who belong to neither of these parties should have a word to say on this matter. As I understand it the Liberals take their stand in opposition to this measure very largely on two points, first of all that it is unconstitutional and secondly that it is undesirable as interfering with trade and private affairs.
With regard to the constitutional aspect of the question, we had that matter discussed earlier in the evening from the purely legal standpoint. I do not profess to be an expert in legal matters but I do know enough of the history of law to recognize that it is very largely a history of changes in public opinion and the very slow and lagging process of gradual change in law made reluctantly in an effort to come up to the existing development of public opinion. The law lags far behind, and it is only under very great pressure that at last we have recorded in our codes the decisions arrived at by the great majority of our people. I quite agree with the bon. member for Winnipeg South Centre (Mr Kennedy) when he states that there is no clear cut line between criminal and noncriminal acts. A few years ago it was not a crime to hold slaves. Many people of the most worthy classes held slaves, and justified themselves from the ethical standpoint in so doing. Undoubtedly in those days it was legal to hold slaves; there was no crime in it whatever. Then there arrived a time when it was declared to be a crime to hold slaves. I have not the slightest doubt that before that time there would be a great deal of legal argument to the effect that to do away with slavery would be an infringement upon the rights of private property. That would be a logical argument, because men had private property in the possession of slaves and, as the rights of private property were understood up to that time, the taking away of the slaves would be an infringement.
It seems to me that to-day we face the necessity of a higher code, a new code if you like, with regard to the protection of society, necessitated by the new conditions which have developed in this industrial period. To a certain extent competition used to act as a regulator. I am pleased that the hon. member for Hants-Kings (Mr. Ilsley) pointed out that fact so clearly, but I believe he would also recognize that to a very large extent competition has ceased to be a regulator to-day.

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James Lorimer Ilsley: No.


James Shaver Woodsworth: I thought he had gone farther than he admits. It would seem as though the great moss of evidence before the price spreads commission went to show how hopeless is the factor of competition as a real regulator. From beginning to end the evidence before that commission shows the growth of large scale industry tending to monopoly, all sorts of agreements indicating an utter disregard of public welfare and certainly a very great disregard of the welfare of employees.
I do not think we can any longer count upon competition as a regulator of trade. Someone has called attention to the fraudulent practices noted by the price spreads commission. I have not time nor do I think it necessary to enumerate those practices, although in part they were enumerated by the hon. member for Weyburn (Mr. Young). I do ask however whether it is impossible to-day for us to do something to safeguard the interests of employees. There is no doubt that people are being employed at a rate of wages less than the minimum rate fixed by law. I cannot see anything absurd or out of the way in making that a crime. The evidence disclosed that there were people employed at wages less than sufficient to keep body and soul together, as we put it, and quite insufficient to maintain a decent standard of living. Some received as low as $2 a week. In many cases it meant that girls were being forced out on to the streets. Yet when we suggest that some measures be taken to prevent this kind of thing we are told it is utterly absurd. Surely if it is a crime to deal cruelly with people it is a much greater crime to have that cruelty extended over a number of years.
We used to think that in Canada we had some ideals of sportsmanship. Some people exercise good sportsmanship when dealing with wild game. They will give a bird or an animal a chance for his life, but these same people will put an employee in a position where he has no chance, and where he is driven down, and down. I would suggest to the hon. member for Weyburn that he read the laws already on the statute books. If we have protection for wild game surely we might have some protection for the workers in our factories. Even the farmer cannot shoot game or catch fish in certain seasons of the year. I wish the hon. member for Weyburn would have a little greater sense of proportion and try to balance things up a little more than he does. We have all sorts of regulations, but when it comes to anything affecting trade and commerce it would seem that the whole realm is sacrosanct.
There is a provision in this bill against workers being allowed to work above the maximum hours. Is there anything wrong in that? We have legislation, which possibly the hon. member for Weyburn would uphold, preventing Sunday work. It is quite true that a man's automobile might break down on Sunday, and he might be held up. In spite of this, I think the hon. member for Weyburn would agree that the legislation enforcing respect for the Sabbath is quite proper. Yet any measure for that purpose is surely as arbitrary as this one prohibiting the working of employees beyond proper hours.
Then we come to the falsification of statements. Again, why is this not a crime when it affects the welfare of an employee? If we falsify a cheque, endorse or sign it improperly we are liable to the law of embezzlement, and have committed a crime. Why is it less a crime to falsify a statement supposed to indicate the hours of work of an employee? I cannot see why it w'ould be. Possibly it would be considered a lesser crime merely because we are not accustomed to prohibiting these practices against the interests of employees. We have not yet seriously taken to heart the interests of the employee.
And so I could go on to a discussion of all the matters dealt with under section 5. The hon. member for Weyburn actually attempts to poke fun at subsection (g), which reads:
(g) employs any child or minor person contrary to law.
Well, when we consider that young children are being employed at pitiably low wages, and being stunted in body and mind, we must feel indignant when we find anyone ridiculing legislation designed to protect them.


Edward James Young: Will the hon. member say what a minor is?


James Shaver Woodsworth: I will leave that for general definition.


An hon. MEMBER:: He knows well enough what it is.


James Shaver Woodsworth: " Employs any child or minor person contrary to law "-could you want anything more than that?


Edward James Young: I want to know what a minor is.


James Shaver Woodsworth: The law defines it. Surely we have the right to protect minors. We have a solemn obligation to protect the youth of Canada and I do resent in this twentieth century any hon. member, even one calling himself a Liberal, trying to ridicule legislation designed to protect children.
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Mr. FRASER (Northumberland):: No person ridiculed it.


James Shaver Woodsworth: That was my
understanding. The hon. member for Northumberland (Mr. Fraser) has chosen to interrupt, and following that interruption I would turn to the next section of the bill. The Liberals oppose this section as being contrary to the freedom of trade. In a debate only a few days ago on the marketing act the hon. member for Northumberland protested against producers being coerced, and against their being enforced to adopt ideas and policies tabulated or formulated in the minds of so-called supermen who have been chosen by the Minister of Agriculture to tell Canadians what the producers know better than he knows. The hon. member waxed eloquent when he was speaking about the matter, stating that the Natural Products Marketing Act was the most vicious piece of legislation ever placed on the statute books of Canada. He said it was impossible to prevent bootlegging in liquor and he wondered how we could prevent bootlegging in potatoes. He asked how an ordinary decent Canadian citizen such as he himself claimed to be could possibly be prevented from selling his goods in any way he pleased. He wanted to know what you could do with him if he refused to sell his apples, and so on and so on. In connection with one of the clauses I happen to have had my attention called to the Milk Control Act of 1934 of the province of Ontario, which was modified very slightly by the Liberal government this year in order to make it more stringent. Let us see what they are doing in the province of Ontario. I quote from the act:
The board shall have jurisdiction and power upon its own initiative, or uipon complaint or request made to it in writing, to inquire into any matter relating to the producing, supplying, processing, handling, distributing or sale of milk and, subject to the approval of the lieutenant governor, to make regulations with respect thereto or to any of the said matters.
I want to call this to the attention of the hon. member for Northumberland. As I have said, the act was under review by the Liberal government in Ontario this year which made one or two slight modifications to make it more drastic. Quoting from the act again:
(a) governing and supervising the producing, processing, handling, storing, hauling, delivering, distributing, keeping or offering for sale and the sale of milk, and all persons engaged or employed therein, and the reports and returns to be made by them to the board;
I suppose that what is true of milk may conceivably be true of potatoes or apples. I quote further from the act:

(a) requiring per sons or classes of persons engaged or employed in the processing, handling, storing, hauling, delivering, distributing, keeping or offering for sale, or the sale of milk to be licenced and to fix the term of such licences and the fetes to be paid therefor;
(c)	governing disputes and the determination of disputes arising between producers and distributors of milk, or between any two or more classes or branches of persons engaged in the milk industry as producers, processors, handlers, haulers, distributors or vendors of milk, or as being otherwise engaged in the said industry;
(d)	governing agreements which may be entered into between producers of milk and other persons or classes of persons engaged in the milk industry.
Surely that legislation is telling the producers what they have to do, and it provides for fines in connection therewith. I want to read one or two other brief sections to give the scope of the act:
No person shall engage or be employed in any branch of the milk industry as provided by and in accordance with this act and the regulations.
Again that is almost identical with the terms of the Natural Products Marketing Act, and certainly not less severe than that which we have before us this evening. Then section 11 :
Every person who violates any of the provisions of this act or of any regulation, rule or order made under this act or of the board shall incur a penalty of not less than $5 for each offence, recoverable under the Summary Convictions Act.
There you have a man made a criminal and fined for disobeying any of the regulations under the act.


William Alexander Fraser: That is what I objected to the other day.


James Shaver Woodsworth: Quite so, but I say that this is in force in the province of Ontario in regard to milk, and the whole act was under review and modified to make it more drastic by a Liberal government in Ontario.


William Alexander Fraser: I said
the other evening that I did not care whether it was a Liberal, Conservative or Cooperative Commonwealth Federation government. Two wrongs do not make a right.


James Shaver Woodsworth: My hon. friend repudiates the Liberal government of Ontario for retaining this law on the statutes?


William Alexander Fraser: No, the hon. member is away off the mark. I stated quite clearly what I had to say,


James Shaver Woodsworth: The province of
British Columbia under a Liberal government

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has taken very similar action. I am afraid the hon. member for Northumberland will have to withdraw himself from the Liberal party and its policies.


William Alexander Fraser: If I do I won't go down there among you; I can tell
you that.


James Shaver Woodsworth: That may be. I think the hon. member will have to adopt the policy of the ex-Minister of Trade and Commerce (Mr. Stevens) and form a party of his own. I repeat it was the Liberal government of Ontario that amended the Milk Control Act.


William Alexander Fraser: If I do form a party I will get further than you did in forming one.


James Shaver Woodsworth: I sent to the library a few minutes ago to try to obtain the official amendment that the Ontario government made to the Milk Control Act, but it was not available. I venture to read from the Canadian Co-operator of April, 1935, what I think may be taken as a correct copy of the amendment. This amendment to the Milk Control Act with respect to the prohibition of co-operative dividends, which was introduced by the Hon. Duncan Marshall, reads:
Notwithstanding anything in the Companies Act or in any letters patent of incorporation or supplementary letters patent or in any other general or special act contained, no person, firm or corporation shall give or distribute any fund, refund, rebate, interest or dividend to any purchaser of milk therefrom, either directly or indirectly in respect of such purchases of milk, except such interest or dividend as may be earned on capital invested by such purchaser in such firm or corporation.
And the Canadian Co-operator adds this note:
The exception in favour of payment of interest or dividends on their capital investment in dairies by milk consumers seems to be a deliberate discrimination in favour of capitalist dairies. In recnt years it has been the practice of some of them to conduct campaigns for the sale of dairy securities to producers and consumers of milk. Capitalist dairy corporations are specifically enabled to distribute their profits 'in a manner agreeable to them, but that right is denied to cooperative dairies.
I have read this amendment because I think there is a danger that we do precisely the same thing if we pass section 498A (1) without some modification or without adding some safeguarding clause. I received a letter the other day from the secretary of the Co-operative Union of Canada, who points out that:
While manifestly not intended to embarrass cooperatives or to obstruct the practice of
cooperative principles, it is possible that the distribution of the net profit surplus made by cooperative wholesales among retail societies might legally be construed to be within the prohibition of the payment of discounts, rebates or allowances, and a similar distribution of the net profit, surplus, by retail societies among consumers might legally be interpreted as reducing net prices to unreasonably low figures. The question of motive is a difficult one to establish in law, but unsympathetic courts might find as a fact that cooperative societies operate "for the purpose of destroying competition or eliminating a competitor."
He suggests that the following be added1 as an addendum to section 498A(1) of the criminal code, and I draw the minister's attention to this in order that perhaps he himself may see fit to incorporate it in the draft:
The provisions of this subsection shall not, however, prevent a cooperative society returning to producers or consumers, or a cooperative wholesale society returning to its constituent retail members, the whole or any part of the net surplus made in its trading operations in proportion to purchases made from or sales to the society.
It would seem to me, Mr. Chairman, that an amendment of that kind would safeguard the cooperative societies. From the present draft I do not think the government is intending to penalize the cooperative societies but since it may have that effect I believe something of this kind is highly desirable.
Mr. 'GUTHRIE: I may tell my hon. friend that a suggestion has been made already in the language in which he has moved it, and the view of the law officers is that this section as drawn would not apply to the cooperative societies. However, it may be necessary to clarify the matter and I will let my hon. friend know the next time the bill is before the house.


James Shaver Woodsworth: I thank the minister. I wanted this matter made very dear because while it is desirable to curb the avaricious practices indicated by the report of the price spreads commission, it is an altogether different thing for people to organize cooperatively and return their dividends. The report of the price spreads commission urges:
-further development of consumers' cooperatives in Canada would' be of general benefit.
It has also declared that the movement-
-should not be victimized in the early stages of its development by unfair competitive practices or price discrimination on the part of manufacturers and wholesalers.
I have very little more to say on the bill as a whole, but in the few minutes left to me I should like to refer again to section 5.
Criminal Code Amendment

Anyone who has been Connected in any way with the labour movement or who has been in close contact with industrial affairs must realize that in many cases the employee is almost helpless. We see this fact in its most exaggerated form in the company towns where a large corporation, very often an American corporation, practically controls the life of the whole community. It is quite obvious that in such cases the employee is helpless. It may be said that he can organize with others tout I submit that so far we have made no provision for the protection of the employee in his right to organize. Under these circumstances it has become practically impossible for employees to form a strong union. We in this house claim that this parliament is an impartial authority; as such it becomes incumbent upon us to protect the weaker members of society who are not in a position at the moment to protect themselves.
I cannot see why there should be such solicitude for the interests of the employers and 'the great corporations. Should an employee break a bit of machinery or smash a window he is considered a criminal, while through a Jong series of years employers have persisted in practices which have undermined the health of the workers, which have condemned them to a life in which they have no joy in living, and which have precluded them from the enjoyment of leisure. Yet these employers are not treated as criminals. In my judgment their crime is far more serious than that of the man who destroys a bit of property. Human life ought surely to be worth more than property. As yet we have hardly begun to protect human life, and while this legislation is far from being what I should like it to be, I feel that it is a gesture toward protecting the welfare of the employees and as such I welcome it.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned without question put, pursuant to standing order.
Tuesday, June 11, 1935
The bouse met at three o'clock.

[Stage Direction]
Second report of the select standing committee on banking and commerce-Mr. Chaplin.

[Stage Direction]
On the orders of the day:
Hon,. GROTE STIRLING (Minister of National Defence): Mr. Speaker, I beg to lay on the table report of the commission which was appointed to investigate conditions in the rdlief camps of British Columbia. I should like on this occasion to make a statement thereon.
The report is presented by the Hon. W. A. Macdonald, C. T. McHattie, and the Reverend E. D. Braden,, appointed a commission by order in council P.C. 861, dated April 1, 1935, to inquire into the conditions obtaining and all and any complaints which have been made with respect to the administration and management of the camps established by the Department of National Defence in the province of British Columbia.
In view of the general interest in this report as evidenced by the many enquiries made by hon. members of this house, I think it would be of interest should I briefly recapitulate the principal points adduced by the commission from the evidence which they collected in the course of a most comprehensive survey of the situation during which, in addition to public hearings in the larger centres in British Columbia., they visited 46 separate camps; in all 277 witnesses were examined.
The greatest care was exercised by the commission in order to ensure that all who wished to testify should have a full and fair opportunity of so doing and men were encouraged in the absence of members of the camp staffs to freely state any oolmplaints and grievances which they might feel they had.
The commission " questioned all witnesses as to matters which were likely to create a grievance in camp life, such as food, cooking, sleeping accommodation, sanitation, medical attention, recreation, consideration of complaints and other matters." It may be assumed therefor, that every possible complaint or cause of complaint has been fully enquired into.
The commission reports:
We are quite satisfied that the officers commanding these military districts properly performed their duties in administering and managing these camps, and' that they acted with fairness and ability in discharging a new and difficult task.
The military districts referred to are military districts Nos. 11 and 13 with head-

B. C. Relief Camps
quarters .at Ksquimalt and Calgary respectively. As regards the superintendents of groups of projects, the statement is made:
We contacted all the superintendents, and from the results obtained in their work, they appeared quite competent. When you consider the responsibility borne, the nature of the duties performed, the difficulty of maintaining discipline, and the nature of the employment of the thousands in these camips, then, almost without exception, they filled their positions satisfactorily.
The exceptions referred to relate to the cases of two individuals .only out of the many whose services were commented upon. In one of those cases, in the light of all circumstances, the commission report:
We are not disposed to make any adverse criticism of this superintendent.
In the other case the evidence is of a failure in certain administrative arrangements and of a lack of judgment in the individual concerned. The replacement of this man has been under consideration for some time but action was deferred pending the reports of the investigation. Definite arrangements have now been made to replace him.
Several complaints of mail being tampered with were received. In this connection the commission reports:
We find that the charges were not supported by evidence.
As regards foremen in individual camps, after commenting on the difficulties inherent in their position, the commission state:
The foremen, as a whole, acted properly and patiently.
Certain, individual cases, where complaints against foremen appeared well founded, were brought by the commission to the attention of the superior authorities concerned. These cases are not qpecificaly set .out in the commission's report but as soon as full particulars are .available they will be dealt with as the circumstances may require. It is pointed out however, that during the period of administration by the Department of National Defence, 192 changes of foremen and subforemen have taken place and of these thirty per cent- were for disciplinary reasons or in-coimpetency.
One of the complaints made against the camps was the so called "militarization." The commission states:
We feel no hesitation in reporting that it did not, and does not, exist in the slightest degree.
As regards food, the commission stated:
We consistently investigated this important feature of camp life, and became satisfied that
the meals which had been, and were being, served to the men were good then, and had been so, long prior to our visits.
Reference is made to occasional "bad cooking which may have spoiled good food" and the steps being taken by the Department of National Defence to remedy this situation through the establishment of a school of cooking. The first of these courses has been completed and a second is under arrangement. The capacity of the course is for thirty candidates. In other comments on the satisfactory quality of the food supplied, the commission make a reservation as to the quality of milk and the condition of meat in certain cases. They state that the complaint respecting milk " has now been remedied." As regards meat they state that "care has been taken to provide for a proper supply of meat" but that "on several occasions, the strictness which should have been applied in requiring fulfilment of the terms of the contract was neglected." This matter is being further inquired into and the necessary action will be taken to terminate those contracts where neglect has been shown. There is definite information, however, that in many cases meat not up to the standard has been returned to the contractors at their expense.
The commission reports:
There was a complaint made as to beds, but this has been remedied, although an objection still exists in some of the camps.
Further particulars of this are being obtained and consideration will be given and also to a suggestion as to the issue of "cotton sheets."
The commission states that generally speaking they were satisfied as regards cleanliness of dining rooms, kitchens, bunk houses and store rooms, especially the kitchens. They refer to cases of vermin and comment that "steps were being taken to cope with the situation." They remark that "cleanliness was a characteristic of the men in the camps." They refer to one camp in which rats had become a menace. This matter will receive prompt and effective attention. During the past three weeks the rats have been practically eliminated by the use of gas. Except as regards one camp where immediate remedial action is being ordered, the commission reports favourably on sanitation and the same is true as regards water supply. They refer to "the wonderfully good health which prevailed."
As regards medical attention to the men in the camps the commission report investigating complaints as to laok of attention and neglect and state that they found these "not substantiated by evidence."
B. C. Relief Camps
[Stage Direction]
Certain suggestions as to a change in the system followed for the issue of tobacco are put forward for consideration and these will be carefully examined.
In their report the commission then examined the mental attitude of the men in the camps, the question of unsuitability of some of the men for the-
-type of life involved or the work expected to be done;-
the question of young men in the camps; of the difficulty of men keeping in touch with possibilities of employment; the limited assistance which the provincial labour bureau has been able to offer; the fact that the idea prevails among the men that employers deem them unsuitable for employment. In this connection the commission comment that-
We did not find evidence to substantiate this opinion.
Reference is then made to the so called [DOT]'clothing racket;" to the alternative of giving a cash allowance in lieu of issues in kind and the opinion is expressed that this-
[Stage Direction]
would not be beneficial to the men utilizing these camps.
I may say that this opinion is fully shared by the administrative officers of the department; that the costs for clothing are remarkably moderate having regard to all circumstances and that it is clear that trafficking in this clothing, while it does take place despite all the precautions which have been taken, is not on anything like as large a scale as some reports from outside sources would seem to indicate. Further, measures to act as a deterrent to this diversion of equipment intended for relief, have now been instituted but it is too early as yet to judge the results which will be obtained.
I may say that the possible difficulties in connection with the issue of clothing and other necessary equipment were foreseen at the time the relief projects were first instituted and at that time it was decided to rely on the good faith of the men being cared for unless and until it had been established by experience that precautions against theft and misuse were necessary.
It must be realized that every restrictive measure which is instituted to prevent abuse by a few unscrupulous individuals impinges also on the vast majority of the men who act fairly in these matters.
The commission refer to isolation of some of the camps, to the absence of social contacts and the lack of any change of environment- -with a consequent depressing mental attitude.

In this connection, as a result of a survey of the situation throughout Canada which had been placed in hand before the commission was appointed, the conclusion was reached that a system of leave with allowances should be instituted. The necessary instructions in this connection were issued on 8th May, 1935, and the railways are cooperating by the issue of transportation at reduced rates (2 cents per mile).
As regards recreation, the commission states:
A general complaint was voiced in all camps visited regarding inadequate recreation facilities and appointments.
Up to the present no recreational equipment has been provided as a charge against the public for the reason that it was thought that this should and could be provided otherwise. Many thousands of dollars either in cash or in kind were raised through the personal endeavour of the officers of the Department of National Defence, the units of the militia and of the air force and their friends who had a natural desire to assist in helping those less fortunately placed. These funds were supplemented by the small profits from the canteens and the whole has been very carefully administered with a view to doing the best possible, particularly for the outlying projects in isolated localities far from the observation of the public.
Ian Alistair Mackenzie: May I ask the minister if he has included all the recommendations of the commission in the statement he has just read to the house?


Mr. STIRLING:: I would not say it has picked up every one of them, but it has dealt with the principal ones.


Ian Alistair Mackenzie: Will
copies of the report be available?


Grote Stirling: The hon. member for Vancouver South (Mt. Maclnnis) asked with regard to the printing of the report. The government's idea is that there would not probably be a large enough demand for the report to warrant the printing of it. However I have a spare copy in typewritten form, and if the hon. member asks me for it I shall be glad to let him see it.


Mr. MUNN:: I should like to ask a question in this connection. I think all members from British Columbia would like very much to have a copy of the report; perhaps members from other parts of Canada would like to see it, too.


Alan Webster Neill: Hear, hear.

National Research Council


Mr.   MUINN@: Would it not be possible to have it printed? I should like to have an answer from the minister.


Grote Stirling: Very well. I move:
That 200 copies in English and 150 copies in French of the report be printed.


Ian Alistair Mackenzie: Hear,
hear.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mr. F. G. SANDERSON (South Perth):: Mr. Speaker, I have a question to ask. Originally I intended to ask it of the Minister of Trade and Commerce (Mr. Hanson) but I believe I shall direct it to the Prime Minister (Mr. Bennett). My question is based upon a press report of a few days ago to the effect that Doctor H. M. Tory, head of the national research council has resigned, and that his successor was appointed, namely, Major General McNaughton at a salary of $15,000 per year. I understand Major General McNaughton has been chief of staff of the Department of National Defence for some time at a salary of $10,000.
My question is this:	Has Major General
McNaughton resigned as chief of staff of the Department of National Defence, and if so when; and when did he assume the duties of head of the national research council at $15,000 per year?


Richard Bedford Bennett: Some seven years ago a contract was entered into between the government of Canada and Doctor Tory employing him for a period of seven years from the 1st day of June, 1928, to the 1st day of June, 1935, at a salary of $15,000 per year, or until his successor was appointed. I believe communications took place between the Department of Trade and Commerce and Doctor Tory, and when the 1st of June came Major General McNaughton was appointed in his stead at the same salary for the same term, and of course he ceases to be chief of staff. He will be paid the emoluments of his new office, when he takes that over, after cleaning up his present office, Major General Ashton having been appointed chief of general staff.


Frederick George Sanderson: I am not quite clear
on the matter. I understood the Prime Minister to say that Major General McNaughton took charge of the national research council on June 1; is that right?


Richard Bedford Bennett: I said he was appointed as from the 1st of June.


Frederick George Sanderson: Is he still chief of
staff of the Department of National Defence?


Richard Bedford Bennett: He is not drawing two
salaries, if that is what the hon. gentleman means. But he is clearing up the business of his office until General Ashton takes over. The fact is however that he is appointed head of the national research council from June 1, 1935.


Frederick George Sanderson: Then, Mr. Speaker,
Major General McNaughton is still acting chief of staff of the Department of National Defence and is also at the head of the national research council; is that right?


Richard Bedford Bennett: Of course that is not
correct. If the hon. gentleman will listen again he will not have so much difficulty.


Frederick George Sanderson: I have been listening
attentively.


Richard Bedford Bennett: I said that Major General McNaughton had been appointed head of the research bureau from June 1, 1935, and that he is cleaning up his department as a matter of detail, and will occupy the position as chief of the research bureau. That is his appointment. He is cleaning up his position, but is acting as head of the council, and has acted as such. He is doing the same as any man going to another position would do, namely, cleaning up his old office as his successor, General Ashton, has not yet arrived.


Ian Alistair Mackenzie: May I
ask the minister if General McNaughton will be seconded for duty with the national research council or will he sever all connection with the Department of National Defence?


Grote Stirling: He ceases to be chief of general staff and becomes president of the national research council.


Ian Alistair Mackenzie: And not seconded,-or is he appointed for a number of years under contract?


Richard Bedford Bennett: I said that.


Ian Alistair Mackenzie: It is an important point. Is he seconded for duty or is he not?


Grote Stirling: No.


Richard Bedford Bennett: He is seconded, yes.


Frederick George Sanderson: I should like to ask
the Minister of National Defence or the Prime Minister about the pension Major General McNaughton will receive after he leaves the Department of National Defence?
National Research Council


Richard Bedford Bennett: He will receive such pension as his payments entitle him to receive under the law.


Mr. CASGRAIN:: Outside of the S15,000?


Frederick George Sanderson: If the Prime Minister is aware of the exact amount of the pension I think he should state it to us.


Richard Bedford Bennett: I have no idea what the pension would be, nor has anyone else until the moment for pension arrives. When that time arrives he will be eligible for the pension to which his payments to the superannuation fund have entitled him.


Frederick George Sanderson: Mr. Chairman-


Some hon. MEMBERS:: Order.


Some hon. MEMBERS:: Sit down.


Frederick George Sanderson: I won't sit down until this is finished. My question is a very proper one and in the interests of the public generally. If the Prime Minister does not have the information in regard to the pension which Major General McNaughbon will receive after he goes over to the research council and receives 815,000 per year will he when he finds that out give the information to the house?


Richard Bedford Bennett: He will answeT at once.
He will receive no pension. I made it so clear that I did1 not think any man with intelligence would have any difficulty in understanding it.


Frederick George Sanderson: I would say to the
Prime Minister that my intelligence is not of the same standard as his, but I say further that this afternoon he is evading the question. Will Major General McNaughton maintain his pension rights when he goes over as head of the research council?


Richard Bedford Bennett: I made it clear that
he has the right of pension which would be due him as a public servant when he terminates his services. He will secure such pension as his payments into the fund entitle him bo receive. He will not receive pension and salary at the same time. I repeat, he will not receive a pension and salary at the same time.


Ernest Lapointe: That is better.



HIGH COMMISSIONER'S OFFICE


[Stage Direction]
On the orders of the day:
Jean-François Pouliot: Mr. Speaker, may I draw the
attention of the Minister of Trade and Com-
merce (Mr. Hanson) to page 3451 of Hansard for yesterday, and particularly to a question having to do with the High Commissioner's office at London, and the expenditures in connection therewith. Yesterday when the question was called1 the minister called "Answered." To-day it appears in Hansard that he stated1 "Return babied forthwith." I have telephoned the office handling sessional papers, and I find that there are no papers in that office. May I ask what the minister meant?


Richard Burpee Hanson: I believe my answer was
not correct. I thought I was answering another question. I understand the question was ordered to stand as an order for return then tabled or to be tabled. However there will be no difficulty about it.



TRADE AND INDUSTRY COMMISSION


[Stage Direction]
Hon. R. B. HANSON (Minister of Trade and Commerce) moved the second reading of Bill No. 86, to establish a dominion trade and industry commission.
He said: Mr. Speaker, the bill now before the house for second reading is an honest, sincere attempt to give effect to such portions of the report of the royal commission on price spreads not otherwise provided for in legislation currently before the house and within the constitutional limitations of parliament.
It will be recalled that chapter 9 of the report of the royal commission, beginning at page 248 of the report, deals exhaustively with the problem of state control of business, and the general recommendations of the report have been summarized under the following headings and recommendations:
1.	The setting up of a federal trade and industry commission with a structure consisting of five members appointed by the governor in council as a semi-autonomous board under the president of the privy council; (b) its status both in its authority and in its relation to the responsible minister and to parliament to be similar to that of the board of railway commissioners.
I shall allude to the question of the structure of the proposed board at a later stage in my remarks.
2.	Functions of the commission. These were to be administrative, advisory and investigatory. I shall not go into the various sub-

Trade Commission-Mr. Hanson
headings of all these functions but would crave leave to have the summary of the general recommendations as they appear in the report printed in Hansard:
Chapter IX
The Problem of State Control General Recommendations
1.	Federal trade and industry commission.
1.	Structure
(a)	To consist of five members appointed by the governor in council, as a semi-autonomous board under the president of the privy council.
(b)	Its status both in its authority and in its relation to the responsible minister and parliament, to be similar to that of the board of railway commissioners.
2.	Functions
(a)	Administrative-
(1)	Rigorous administration of an amended
Combines Investigation Act, for the purpose of retaining and restoring competition whenever possible.	.
(2) On instruction from the governor in council, to regulate monopoly, when competition cannot or should not be restored or enforced.
(3) On instruction from the governor m council, to a sanction and supervise agreements for industrial self-government.
(4)	To prohibit unfair competitive practices.
(a)	Such practices should not be set out in
detail in the act setting up the commission, but a general definition of unfairness should be included.	_
(b)	A definition for this purpose is suggested.
(c)	Certain practices such as discriminatory discounts, rebates and allowances, territorial price discrimination and predatory price-cutting, should be included within this definition.	_
(d)	The commission should act by inquiry,
hearings and where necessary, prohibitory orders.	,
(e)	An appeal from these orders to the Exchequer Court of Canada, should be permitted.
(f)	The commission should be given adequate power, ,as outlined, for the enforcement of its orders.
(g)	In more serious cases, the commission might prosecute directly under the act for the offence of competing unfairly.
(h)	The results of its major findings should be published.
(5)	To supervise generally, or cooperate in the administration of existing laws relating to merchandising and business practices for which no other agency exists.
(6)	To administer new laws for the protection of the consumer.
(7) To administer the regulation of new security issues for protection of the investor.
(8) To cooperate with chambers of commerce and boards of trade in the development of commercial arbitration or the refereeing of business disputes.
(9)	To cooperate with other government agencies, whether federal, provincial or municipal. in the solution of trade and industrial problems.
(b)	Advisory-
(1)	To government-	_
(a)	To recommend to the governor in council the recognition and regulation of monopoly in 92582-223
special situations where competition cannot be restored.
(b)	If so requested by an industry, and after investigation, to recommend to the governor in council the granting of powers of "self-government" in special situations where competition seems undesirable.
(c)	To recommend to the governor in council such regulatory measures as each such situation seems to require under (a) or (b).
(2)	To industry-
In cooperative trade practice conferences to advise industry and secure its advice about the elimination of unfair trade practices.
(c)	Investigation and pubicity-[DOT]
(1)	Full power to inquire into the organization and practices of any industry.
(2)	General economic investigation.
(3)	Full publicity to the results of any investigation.
(4)	Authority to require that firms or industries publish such information about prices or other matters as may be in the public interest.
2.	Amendments to the Combines Investigation
Act.
1.	To facilitate the application of the act to single unit monopolies, as well as to combinations in restraint of trade, a definition of monopoly 'is given which should be included in the act.
2.	Section 28 of the act should be amended to ensure that reports of inquiries by the registrar, when the inquiry has been such as a commissioner would make, should be subjected' to the same provisions in respect to publication as are commissioner's reports.
3.	Proposals for the extension of the general
statistical work of the dominion bureau of statistics.
The second general recommendation relating to this problem of state control had to do with amendments to the Combines Investigation Act, and there were proposals for the extension of the general statistical work of the dominion bureau of statistics.
For the purpose of the report, the commission divides industry into five different categories, namely:
1.	Monopolies which could be subjected to complete regulation or government control.
2.	Industries wherein competition could be satisfactorily restored by the enforcement of the Combines Investigation Act.
3.	Imperfectly competitive industries wherein regulations must be resorted to rather than the restoration of competition.
4.	Industries where competition is effective.
5.	A few industries where competition is of such a cut-throat character that it must be modified. This is referred to at page 264 of the report.
The commission recommended the setting up of a trade and industry commission under the president of the privy council and which was to have among others the following powers:
A. Rigorous enforcement of the Combines Investigation Act. This is referred to at page 266 of the report.
[Stage Direction]


Trade Commission-Mr. Hanson
This recommendation is incorporated in clause 13, of the bill, which provides that the commission shall be charged with the administration of the Combines Investigation Act, and shall exercise ail the powers and jurisdiction and perform all the duties com ferred on the commission under the said act.
Under this power, industries in the second and fourth categories above referred to, were to be dealt with. The commission pointed out that the Combines Investigation Act should be strengthened by rendering it more definitely applicable to "single company monopolies," as compared with combinations.
A definition of monopolies was recommended which has been substantially adopted as one of the amendments to the Combines Investigation Act, bill 79, wherein under section 2 (4) "merger, trust or monopoly" is defined to mean and include "any combination resulting from the purchase, lease of, or other acquisition by any person of any control over or interest in the whole or part of the business of any other person; or any person or combination of persons engaged in industry or commerce who, in any particular area or district or generally in Canada, dominate or control any class of business; or any person or combination of persons possessing or exercising within any particular area or district or generally the sole right or power of manufacturing, producing, transporting, purchasing, supplying, storing or dealing in any commodities which may be the subject of trade and commerce." I submit, Mr. Speaker, that that is a very wide definition of merger, trust or monopoly.
B. The second power to be given the commission was to regulate monopolies "where competition cannot or should not be restored. This is referred to at page 267 of the report.
The commission recommended that specific industries should be declared by the commission monopolistic and exempt from the operation of the Combines Investigation Act, and subject to regulation by the commission. Under this power industries in the first and third categories are to be dealt with.
In the bill as originally drafted and submitted to counsel for opinion, there was a provision which provided for the exemption from prosecution under the Combines Investigation Act or section 498 of the criminal code, of an industry which because of its monopolistic character should be regulated and controlled as the public interest would not be safeguarded by restoring or enforcing competition and it was the opinion of both counsel that such a provision could not be justified under the heading of "regulation of 
trade and commerce," by section 91 (2) of the British North America Act, and it was not an exercise of jurisdiction under criminal law.
I may be permitted to quote the opinion of Mr. Tilley, dated May 15, 1935, in this regard, in which he says:
This section (15) seems to be bad. It purports to authorize the commission to exempt an industry from the criminal provisions respecting combines of the Combines Investigation Act, and of the criminal code, because of the monopolistic character of the industry or the nature or dimensions of any of its Operations....
The dominion has been considered authorized to deal with combines under the power of criminal law and also under its power over patents and customs. Otherwise, as a previous decision showed, the dominion had nothing to do with the matter. This is clearly not criminal legislation. It is regulatory legislation and on that account seems to be bad'.
Undoubtedly the Teamed counsel had in mind the board of commerce case decided by the privy council in 1921 and cited as the Attorney General for Canada versus the Attorney General for Alberta and others to be found in 1922 Appeal Cases, page 1. It will be recalled -that in 1919 parliament enacted two statutes called the Board of Commerce Act and the Combines and Fair Brices Act, to be read and construed together, under which it was proposed by the board to issue an order prohibiting retail clothing dealers from making unfair profits. The authority of the board was challenged and the Supreme Court of Canada was asked to decide two questions. First, whether the board of commerce had lawful authority to make such an order and, second, if so, whether they had lawful authority to require the Supreme Court of Ontario to make it a rulle of court. The Supreme Court of Canada was equally divided in opinion and special leave was granted to appeal to the privy council. The privy council held that the first question must be answered in the negative, that is to the effect that the board had no lawful authority to make an order prohibiting retail clothing dealers from making unfair profits. As a consequence the second question did not arise. The privy council decided that the legislation setting up a board of commerce with power to make such an order was, in the absence of exceptional circumstances, imperilling the peace, order and good government of the dominion beyond the powers conferred on the dominion parliament by section 91 of the British North America Act.
It may be of interest to hon. members who are of the legal profession to study this judg-

Trade Commission-Mr. Hanson
ment which was delivered on- behalf of thieir lordships by Viscount Haldane. This reads:
The regulation of trade and commerce did not by itself enable interference with particular trades in which Canadians would, apart from any right of interference conferred by these words above, be free to engage in the provinces.
With reference to the criminal law he said that this power enables the dominion parliament to exercise exclusive legislative power where the subject matter is one which by its very nature belongs to the domain of dominion jurisdiction. It continues:
It is quite another thing, first to attempt to interfere with -a class of subjects committed exclusively to the provincial legislatures, and then to justify this by enacting ancillary provisions designated as new phases of dominion criminal law which require a title to so interfere as basis of their application.
The third power to be exercised by the commission was to give approval to price and production agreements between' the persons engaged in any industry where cutthroat competition was demoralizing the industry. This power of approval is now provided for by section 14 of the bill, which reads:
(1)	In any case where the commission, after full investigation under the Combines Investigation Act, is unanimously of opinion that wasteful or demoralizing competition exists in any specific industry, and that agreements between the persons engaged in the industry to modify such competition by controlling and regulating prices or production would not result in injury to our undue restraint of trade or be detrimental to or against the interest of the public, the commission may so advise the governor in council and recomend that certain agreements he approved.
(2)	The governor in council may, if of opinion that the conclusions of the commission are well founded, approve of any such agreement, and shall make regulations requiring the commission to determine from time to time whether the agreement is resulting in injury to or undue restraint of trade or is detrimental to the public interest.
(3)	The commission shall require persons engaged in the industry to furnish full information relating to operations within the industry under the agreement and may at any time, of its own motion and in its absolute discretion, advise the governor in council to rescind the approval of the agreement and the governor in council may rescind the approval.
The fourth power recommended by the report related to the protection of the consumers, which was to be effected by two means: First, by the enforcement of the laws relating to weights and measures, trademarks, patents, commodity standards et cetera and, second, by improving and adding to commodity standards. Under section 20 of the bill the commission is given power to receive and investigate complaints respecting the 925S2-223f
various laws which exist for the protection of the consumer, as well as others generally described in the bill as "laws prohibiting unfair trade practices," and enumerated in section 2, subsection (h) of the bill. I would direct the attention of hon. members to the large number of statutes presently existing and in force which are named in subsection (h) of section 2. It is surprising to find that there are already so many acts on the statute books prohibiting unfair trade practices. As will be observed these include the Agricultural Pests Control Act, the Canada Grain Act, the Combines Investigation Act, the Dairy Industry Act and a long list of I think twenty-eight others including sections 404, 405, 406, 415A and 486 to 504 inclusive of the criminal code itself, as well as those other bills which are now before the house for enactment. The enumeration of these acts, including the criminal code, and of the regulations made from time to time under most if not all of them, would indicate that there is a very large body of legislation now on the statute books which has for its object presently and now existing the protection of the consumer as well as others.
It may well be that there is ground for the belief that in the past all of these laws and regulations have not been sufficiently or efficiently enforced and in order to remedy this defect, if defect there be, the bill gives authority to the governor in council under section 21 to appoint an officer to be called the director of public prosecutions and who shall be responsible for the prosecution of all these laws above enumerated, including the sections of the bill now before the house. It will be observed that under section 22 of the bill it shall be the duty of the director of public prosecutions under the superintendence of the Minister of Justice:
(a)	to institute, undertake or carry on, at the instance of the Attorney General of Canada or the commission criminal proceedings for violation of any of the laws prohibiting unfair trade practices in cases which appear to be of importance or difficulty or in which special circumstances or the refusal or failure of any other person to institute, undertake or carry on such proceedings appear to render the action of suck director necessary to secure the due prosecution of an offender;
(b)	to give such advice or assistance to t(he Attorney General of any province in connection with the prosecution of offenders against iaws prohibiting unfair trade practices as appears necessary to secure the prosecution of such offenders;
(c)	to assist the commission in the conduct of any investigation where it is alleged or complained that an offence against any of the laws prohibiting unfair trade practices has been or is likely to be committed.
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In addition to the foregoing the commission is given investigational and advisory authority in connection with commodity standards, as covered by sections 15, 16, 17, 18 and 19.
The royal commission further recommended that the dominion trade commission should have authority to regulate trade practices by means of "cease and desist" orders directed to any person engaged in industry whose conduct seemed to the commission to be unfair. This same method of mandatory regulation had been resorted to by parliament when it enacted the Board of Commerce Act, 1919, chapter 37, 1910 George V, 1919, and the Combines and Fair Prices Act, 1919, chapter 45, 1910 George V, 1919. This legislation, which was to be read together, was held to be ultra vires by the privy council in the board of commerce case above referred to in which it was held that orders issued by the board of commerce prohibiting certain retail dealers from making unfair profits was beyond the jurisdiction of the federal parliament.
The legislation setting up such a board with power to make such regulatory and mandatory orders was not clothed or made under exceptional circumstances imperilling peace, order and good government of the dominion.
In this connection Lord Haldane makes the following observations:
The first question to be answered is whether the dominion parliament could validly enact such a law. Their lordships observe that the law is not one enacted to meet special conditions in war time. It was passed in 1919, after peace had been declared, and it is not confined to any temporary purpose, but is to continue without limit in time, and to apply throughout Canada. No doubt the initial words of section 91 of the British North America Act, 1867. confer on the parliament of Canada power to deal with subjects which concern the dominion generally, provided that they are not withheld from the powers of that parliament to legislate, by any of the express heads in section 92, untrammelled bv the enumeration of special heads in section 91. In may well be that the subjects of undue combination and hoarding are matters in which the dominion has a great practical interest. In special circumstances, such as those of a great war, such an interest might conceivably become of such paramount and overriding importance as to amount to what lies outside the heads in section 92, and is not covered by them. The decision in Russell v. The Queen (7 App. Cas., 829) appears to recognize this as constitutionally possible, even in time of peace; but it is quite another matter to say that under normal circumstances general Canadian policy can justify interference, on such a scale as the statutes in controversy involve, with the property and civil rights of the inhabitants of the provinces. It is to the legislatures of the provinces that the regulation and restriction of their civil rights have in general been exclusively confined, and as to these the provincial legislatures possess quasi-sovereign 
(authority. _ It can, therefore, be only under necessity in highly exceptional circumstances, such as cannot be assumed to exist in the (present case, that the liberty of the inhabitants of the provinces may be restricted by the parliament of Canada, and that the dominion can intervene in the interests of Canada as a iwhole in questions such as the present one. Tor normally, the subject matter to be dealt (With in the case would be one falling within section 92. Nor do the words in section 91, tile regulation of trade and commerce," if .taken by themselves, assist the present dominion contention. It may well be, if the parliament of Canada had', by reason of an altogether exceptional situation, capacity to interfere, that these words would apply so as to enable that [DOT]parliament to oust the exclusive character of the provincial powers under section 92.
In this connection I may observe that in the original draft of the bill three sections were included which had to do with the question of mandatory and regulatory orders, the publication of price lists and other things of a like character.
Mr. Tilley, in his opinion submitted to the government, stated as follows;
Sections 28, 29 and 30 are, I think, invalid. [DOT]By subsection (3) of 28 a person who omits to comply with an order of the commission [DOT]made under the section is guilty of an offence [DOT]and liable on indictment or summary conviction to a penalty. While this provision gives section 28 the appearance of criminal law, I am [DOT]of the opinion that parliament cannot under criminal law authorize a commission to declare [DOT]what practices are unfair and to issue orders [DOT]prohibiting the practice and then attach criminal consequences to a breach of the order. Where the matters dealt with are provincial in character, the provincial legislature can provide the sanction.
Mr. Geoffrion in his opinion of May 15 states:
Sections 28, 29 and 39 of the bill as originally drafted also appear to me to be bad. The dominion can deal with unfair trade practices [DOT]under its jurisdiction concerning criminal law [DOT]but that is not what it does here. I would [DOT]think that the judgment on the first combines act which is set aside would apply here.
I am not unmindful of the decision in the privy council in the Proprietary Articles Trade Association case, reported in 1931 Appeal Cases, page 210, where it was held that the legislation in question, being in its pith and substance within enumerated heads of section 91, it was not material that it affected property and civil rights in the province . . . and it further decided that it was unnecessary to discuss whether the legislation was intra vires also under section 91, head 2, "The regulation of Trade and Commerce." The difference between the Board of Commerce ease and the PA..T.A. case in substance is that, in the first case, the legislation endeavoured to make the commission of a prohibited offence which was not

Trade Commission-Mr. Hanson
in. its pith and substance a crime, criminal legislation. In the latter case, according to the judgment of Lord Atkin, if the legislation in its pith and substance was criminal in character, it was intra vires.
I submit, therefore, that the government was justified in not including in the bill presently before parliament provisions for the regulation of monopoly in the sense that I have outlined or for mandatory and regulatory orders such as is contemplated by the findings of the commission to which I have referred. Counsel have unanimously advised that the commission could not be clothed with these powers.
However, amendments have been introduced in bill 73, an act to amend the criminal code, (clauses 5 and 6) to carry out the recommendation of the commission with regard to unfair trade practices in so far as this may be done. A further recommendation in this connection was that the commission might require any person to publish price lists and this too was thought to be ultra vires.
The bill now before the house, therefore, naturally divides itself into five main departments of activity, namely:
1.	Administration of the Combines Investigation Act.
2.	Investigation of complaints respecting unfair trade practices.
3.	Supervision of commodity standards.
4.	Issue of new securities.
5.	Price and production agreements.
There is also the general power of investigation into unfair trade practices and provision for fair trade conferences, cooperation with boards of trade, and economic investigation, to which are attached enabling powers.
A further outstanding provision of the bill is the initiation of the office of director of public prosecutions. Hitherto in Canada we have never had such an officer but in the United Kingdom they have had a director of public prosecutions with most beneficial results to the body politic, and I commend unreservedly this provision of the bill to the house and to the country.
I have not hitherto made specific reference to the powers of the commission to investigate the capital structure of companies and the issue of new securities as recommended by the royal commission. In the Dominion Companies Act itself and in the amendments contained in the bill proposed by the hon. Secretary of State will be found provisions which, in my opinion, go a long way towards meeting the recommendations of the royal commission, and in section 26 of the bill it has been provided that the commission shall have the power, if requested by the Secretary of State,
who is charged with the operation of the Companies Act, to investigate and review the capital structure of any company incorporated by or under any act of parliament proposing to issue new shares, debentures or other securities to the public. Ample provision is made for the furnishing of such information as the commission may require, and provision is further made that the commission may disapprove or reject any such issue but shall not give formal approval to an issue. These provisions, together with the provisions of the Companies Act as proposed to be amended, should go a long way to meet the recommendations of the royal commission in this regard.
I should add that on page 272 of the report the royal commission further recommended that the commission should have investigational and advisory powers upon economic questions generally. This recommendation is implemented by clause 25 of the bill. In my opinion, however, that clause requires a slight amendment by inserting in the sixth line after the words "economic council" the following words:	"Established under the
Economic Council of Canada Act 1936."
I am not unmindful of the fact that in its recommendations regarding the problem of state control, the royal commission recommended the establishment of a distinct trade and industry commission with a structure consisting of five members appointed by the governor in council as a semi-autonomous board under the president of the privy council, and with a status both in its authority and in its relation to the responsible minister and parliament, to be similar to that of the board of railway commissioners with administrative, advisory and investigatory functions.
The structure of the commission set up under this act frankly does not carry out the terms of that recommendation but on the contrary constitutes a commission consisting of three commissioners, the members of which shall be the members for the time being of the tariff board as established pursuant to the Tariff Board Act, chapter 55, 1031, who shall by virtue of holding office as members of the said board and by virtue of the bill be the commissioners under this bill.
Objection may be taken to this method of constituting a dominion trade and industry commission, but I assure the house and the country that the government has given the most careful consideration to this aspect of the matter, and has arrived at the conclusion that if the functions of a dominion trade and industry commission can be efficiently carried on by a presently existing board, it is in the
[Stage Direction]
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public interest that this should be done. I have taken measures to satisfy myself that the tariff board as presently constituted, or as it may be constituted hereafter by an en-largment of its personnel, is fully capable of performing the functions imposed upon it by the terms of this bill.
The whole matter is one of modus operandi, not of substance, and the method adopted should not be condemned because this provision of the royal commission report has not been translated into legislation. The tariff board, as presently constituted, is without question an efficient body and has performed most useful service to the people of Canada. If it is accepted as the dominion trade and industry commission the board will function efficiently and competently, and there will be the additional advantage of a saving to the public treasury of a large expenditure which would be necessary if a new and distinct board were to be set up. The dominion trade and industry commission will function as a separate branch of the tariff board, with its own officers and secretariat. It may be necessary in the course of time to increase the personnel of the tariff board for this purpose, but at this juncture it is not thought that we should set up in this country another new and expensive commission of the character indicated by the report.
I commend the bill to the best consideration of the house, and will welcome constructive suggestions with respect to the substantive clauses thereof, always assuming that such suggestions are consonant with the legislative jurisdiction of this parliament.
Henry Herbert Stevens: Before the bill is read the second time I should like to make a few observations. This bill is one of several offered to parliament with the declaration that it gives effect in an adequate manner to the proposals and recommendations of the price spreads and mass buying commission's report. It might be interesting at this point to indicate to the house a number of bills which purport to participate in the discharge of that duty. There were several bills based upon the peace treaty; No. 21 for the eight hour day, No. 22 for the weekly day of rest, No. 40 to provide for minimum wages-not directly associated with the price spreads commission report but indirectly related to the problems which were exposed during that inquiry-and the bill to establish an economic council. That bill and the unemployment and social insurance bill may be said to contribute in some measure towards

the discharge of that obligation although not directly associated with the report. Other bills, however, which I think may be said to arise out of the report are as follows. Bill No. 70, to amend the Weights and Measures Act, regarding which I have nothing to say except that it does, I think, add to the efficiency of that act; Bill No. 72, to amend the Live Stock and Live Stock Products Act, which I shall not discuss at this time other than to say that in my opinion it does not in any sense carry out the suggestions of the report-


Mr. GARLAND (Bow River):: Hear hear.


Henry Herbert Stevens: -or in any adequate
way give that measure of correction of the abuses and faults which were found to exist in connection with the marketing of live stock and live stock products. Bill No. 73, to amend the criminal code was debated yesterday and is still before the committee ,of the house. As I pointed out last night it was declared on at least two occasions by the Minister of Justice to be in some of its clauses at least of very doubtful value. I should think a measure launched in that spirit would not inspire very much fear in the hearts-I think they have not hearts, but in the minds of those who were most *guilty of violation of the ordinary ethics of business as employers. In addition to that the leading legal advisers and spokesmen of the opposition declared that it was so trivial that the house should not waste any more time considering it. That was not my own opinion, that was the opinion expressed by eminent legal authorities on both sides of the house. Bo one cannot take very much comfort out of the amendments of the criminal code. I made certain suggestions last night to the Minister of Justice (Mr. Guthrie), and I hope that when the matter is again taken up these clauses may be amended so as to make them more effective and perhaps contribute somewhat to the discharge of the obligation to which I have referred. Then there is Bill No. 75, respecting fair wages and hours of labour in relation to public works and contracts. That is quite commendable, and is simply placing in statutory form matters which in the past were supposed to be done by governments, this government and preceding governments, and I think this bill should be welcomed by the house and the country as at least a clearing up or making obligatory by statute of practices that ought to be carried out in any case. Bill No. 79 to amend the Combines Investigation Act simply brings the administration of that act under the trade and industry commission. It

Trade Commission-Mr. Stevens
does one or two other things as well, and to that extent I think should be commended. Then there is a bill to amend the Companies Act which has not yet been considered, which has to do with corporate structure, capitalization, prospectuses and so forth.
Then we have this bill, to establish a trade and industry commission. For the last couple of months I have been waiting patiently, I have scanned with great care the bills which up to the present time 'have been introduced, with the hope that the recommendations in the report of the price spreads commission would be put into such legislative form that we might expect effective remedies for the evils so completely demonstrated in the report. This bill now before the house I looked for with a great deal of hope and confidence, expecting that it would contain such provisions as would adequately take care of the case. It is a matter for regret to me and an extremely distasteful duty to have to say that I am deeply disappointed with the bill.
I had hoped for much more from it, perhaps I had hoped for too much; but I am very much disappointed. I shall try in the limited time at my disposal to indicate the reasons for that disappointment, and perhaps suggest where I think the bill might yet be made * more effective, in the hope that these suggestions may be received by the government with some measure of interest and consideration.
My hem. friend the Minister of Trade and Commerce referred to one or two matters with which I should like to deal before I proceed with the remarks which I have prepared for this occasion. My hon. friend cites the decision of Lord Haldane. Now I know that those who are of the legal profession rather resent a layman examining or offering opinions about decisions of the privy council or other courts. I do not do so with any desire to assert my authority, because I have none. Hon. gentlemen in this house constantly cite the decision of Lord Haldane on the Board of Commerce Act and its twin act as if it were the last word that can be said on the subject. But it will be noted from the very quotations made by the Minister of Trade and Commerce, who is a very able lawyer, that he pointed out that Lord Haldane'said that the dominion government was exceeding its jurisdiction when it interfered with the practice of individual retail traders.
The report of the commission, Mr. Speaker, and the argument that some of us are making, is not that we should interfere with the activities of an individual citizen or trader but that we should set up machinery that will formulate rules to govern trade and commerce as * whole in this country. We are seeking to lay a foundation that will build up rules of practice which all industry will respect.


Donald MacBeth Kennedy: In the public interest.


Henry Herbert Stevens: And in the public interest.
I shall come to a more detailed argument on that in a moment. We are not therefore, going contrary to what Lord Haldane cited in that instance; on the contrary we want to establish rules of practice for all. Then my hon. friend cited the decision of the privy council under Lord Atkin in 1931 or 1932, and if he will not think me impertinent I should like to correct his interpretation of that decision. My hon. friend suggested that the decision of the privy council under Lord Atkin was to this effect, that you could not declare a thing a crime that was not in its nature a crime. My hon. friend will correct me if I am wrong in my interpretation of his words. Let me read what Lord Atkin said, because I think if we are going to stand on legal precedents at least we should take the latest precedent. Let us see what Lord Atkin said:
The criminal quality of an act cannot be discerned by intuition; nor can it be discovered by reference to any standard but one: Is the act prohibited with penal consequences? Morality and criminality are far from ooextensive; nor is the sphere of criminality necessarily part of a more extensive field covered by morality-unless the moral code necessarily disproves all acts prohibited by the state, in which case the argument moves in a circle. It appears to their lordships to be of little value to seek to confine crimes to the category of acts which by their very nature belong to the domain of "criminal jurisprudence"-
May I emphasize those words:
It appears to their lordships to be of little value to seek to confine crimes to the category of acts which by their very nature belong to the domain of "criminal jurisprudence"-
That is precisely the reverse of what seems to have been accepted as his decision.
-for the domain of criminal jurisprudence can only be ascertained by examining what acts at any particular period are declared' by the state to be crimes, and the only common nature they will be found to possess is that they are prohibited by the state and that those who commit them are punished.
Let me pause there; any act prohibited by the state for which there are penal consequences is a crime. So Lord Atkin has said. That is not my opinion; that is the opinion of their lordships of the privy council.
Their lordships agree with the view expressed in the judgment of Newcombe, J., that the

Trade Commission-Mr. Stevens
passage in the judgment of the board in the Board of Commerce ease, to which allusion has been made, was not intended as a definition.
There, sir, I have cited Lord Atkin. I am not presuming, in the face of men in this house learned in the law, to argue the pro or con of the legality of things, but I do think we have come to a position in this House of Commons where we have a right to make some sort of effort to legislate in the interests of the great masses of the people. And I say that in spite of the fact that one person has described me as an individual running amok. I say that, sir, because I know that the people of this country are looking to this house to bring about some measure of relief from the evils which are present with us.
I am not going to argue that point further, but I should like to point out this: In days gone by in this country there were laws regarding crime, just as there are today, but there was something else. There were standards of ethics; there were customs and practices in business which were recognized by and large as very largely controlling men in connection with their affairs. Do not let us forget that there was a much larger code of ethics than there was of laws. I would be doing business with another man; certain practices, customs and ethics governed me. That was all right so long as we had individuals in business, but what has happened? Let us face the fact. A complete change has come over the western world in the method >of doing business. The old relationship of myself with hon. gentlemen opposite or individuals here and there has largely disappeared, and what do the business men find1 to-day? I will ask any business man in any part of this house; he can answer for himself as to what he finds to-day. You meet some individual in connection with some business transaction; it may be the sale of goods, it may be in connection with a building contract or anything you like, and what do you find? Usually you find that you are dealing with some offioial of a large corporation and, as our report shows, that has extended not to a few great industries or utilities but to every branch of human activity. The corner grocery has largely passed out of the hands of the individual into the hands of great international corporations. The five cent article that a shop girl will buy to put in her ear is now associated with corporations worth scores and, indeed, hundreds of millions of dollars. You go into a dry goods store to buy a suit of clothes and you are dealing 
with a corporation that has its tentacles spread over 171 different units, doing business all over the country, with a capital structure of S30,0000,000 or $40,000,000.
So, Mr. Speaker, we have a different method of orientation of business to-day, and I think it behooves parliament to face , the common facts. This has been an evolution, a growth. I am not complaining; I am not condemning parliament or anyone associated with the past government of this country for not having advanced quite as rapidly as this development, because it was not perhaps realized1 or seen. Yet the report shows, as anyone who desires to read it will find, that many of the abuses to which we have directed attention have existed1 for quite a number of years. It is only during the last few years-particularly during the depression, it is true, because that accentuated the burden or the suffering-that it has developed that certain abuses have crept in due to this condition to which I have referred. The report describes that as due to the concentration and the control of credit and industry, and I should like to spend a feiw moments to impress upon the minds of hon. members the fact that concentration is with us, and the degree to which that concentration has developed. First let me refer to the report, from which I should like to read one or two brief extracts. I quote from page 13:
The evidence ... has shown that a few great corporations are predominant in the industries that have been investigated; also that this power, all the more dangerous because it is impersonal-
I should like the house to note those words.
-all the more dangerous because it is impersonal, can be wielded in such a way that competition within the industry is blocked, the welfare of the producer disregarded, and the interests of the investor ignored.
Then there is another point to which I shall now direct the attention of the house.
In the years 1900 to 1933 there occurred in Canada 374 mergers, or, as it has been called by economic experts, consolidations, involving 1,145 firms. I am going to draw attention to a phenomenon which I think should be given close consideration and study. Of these 374 mergers or consolidations 246 occurred between the years 1904 and 1930, and 128 in the remaining 27 years. It will be noted that 1924 and the years subsequent to 1924 followed the passing of the Combines Investigation Act. I ask hon. members, Mr. Speaker, to give consideration to this point, because I am arguing at this time not to

Trade Commission-Mr. Stevens
indicate that the Combines Investigation Act is responsible for the merger but to prove that in spite of the Combines Investigation Act the natural growth or evolution of business control and concentration went on and resulted in 246 consolidations. What does that mean? It means this that the Combines Investigation Act, while an admirable measure 

and I wish to say at once that I stand for its continuance, but urge that it be placed under an effective board; I urge its continuance for the value that is inherent in it- it means that this Combines Investigation Act is not sufficient to control the situation. That has been demonstrated. It does not as a matter of fact to any extent deal with the situation which has arisen. This is an economic phenomenon outside the vision of the framers of this act, and calling for distinctive treatment by parliament.
Let us look at credit concentration. I shall give only a few illustrations, and since the time at my disposal is short I shall give them quickly. I should like to say to the house that in citing these facts I am not for one moment discussing the question whether the condition is good or bad; I am simply trying to indicate that what I describe is a factor in the economic life of Canada which we must face and with which we must deal. Four of the largest trust companies, three of the largest mortgage companies and six of the largest insurance companies have combined assets of $3,149,000,000, or seventy-five per cent of the assets of all such institutions doing business in Canada. Does that not indicate, sir, a growing concentration in Canada of capital control, of wealth control, of credit control? Then, turning to retail business I find that two concerns control 12-9 per cent, practically 13 per cent, of all the retail business in Canada. Probably 50,000 other concerns, or thereabouts, do the remainder of the business. There is good evidence of the development of powerful institutions within the activities of certain lines of business commerce and finance in Canada.
As was indicated last night by a speaker from the opposite side of the house I find that in the packing industry one concern controls 59 per cent of the business, two together controlling 85 per cent. There again, sir, you have a great concentration of power and control, and we have-how many?-we have 700,000 farmers who must do business under the shadow of that control. For the moment we are not interested in whether this is a good or a bad condition-although in fact we are deeply interested in it-but at this time we turn our attention to the terrific concentration of powerful control in certain lines of goods, on the one hand, as against the unorganized and diversified efforts of 700,000 farmers. Because, Mr. Speaker, nearly every one of those farmers is in greater or lesser degree interested in the meat packing business.
Let us now turn to agricultural implements. In this industry two concerns control 63 per cent of Canadian business-two concerns only. And without going into that in detail we know that the policy of those concerns-and again without debating whether or not it is good or bad business-has been one of expansion. They developed a condition under which there was a terrific overhead. Who bare that overhead? The farmer did. The purchaser of the implements had to bear it. You say, "Weill, that must be, because the overhead must foe considered." Well, if your sales drop from 850,000,000 down to $10,000,000 Obviously the unit of overhead is multiplied tremendously; but the farmer pays it all. Is it any wonder that the producer is asking for some measure of relief, is urging that this new orientation of business should be looked at by parliament and some steps taken to protect him against unfair exploitation?
Let us turn to the textile industry. In that there are two great concerns, each of which has one subsidiary. Between them they control 79 per cent of the business in their line. And so one might go on; I have a number of others which I shall not enumerate. These must serve to indicate), however, that the concentration in the control of industry has been going on apace, and what is of still greater significance so has the concentration of the control of credit.
Ait this point may I say a word or two about interlocking directorates and individual control. Sir, I could spend at least an hour demonstrating to this chamber a situation which is amazing, if not appalling. Again I say it is not a question whether or not these men to whom I refer are good or bad citizens. It is the terrific responsibility that they have assumed by acquiring control of such a large proportion of the business of Canada with which I am now dealing. The significant point is that it constitutes in my opinion a drastic, if not a revolutionary, change in our business methods. I have before me two or three examples which I should like to read hurriedly to the house, and which I have, worked out carefully.
I stated on another occasion, and I have the figures before me, that some twelve individuals by their position in the financial world control $9,800,000,000 of wealth in the
Trade Commission-Mr. Stevens

form of company assets. These twelve individuals hold twenty-three presidencies, twelve vice-presidencies, three chairman-of-board-of-directorships, and forty-seven directorships. That is terrific control. As a matter of fact some individuals hold presidencies or the absolute control of companies to the number of eight, ten or twelve companies, any one of which would be sufficient to tax the energy and intelligence of a very able man. Yet they sit in control of these companies. No person could argue, as some attempt to do, "Oh well, they are only one on the boards of directors." I shall show you in a moment how boards of directors interlock. But that is not the point. Any person who knows, as I know, must realize that when these individuals walk into a board room they dominate the situation. One hias but to glance back over the list to realize that in this instance the old saying would hold true, "Where McGregor sits is the head of the table." Where these men sit at meetings of boards of directors is the head of the table. Their policy, their direction and their control is almost if not wholly absolute.
Here is one illustration. One man is president of a chartered bank, which I shall call A, and a trust company which I shall call B. The assets of these two institutions are in the one instance $768,000,000 and in the other $657,000,000, in round figure^, or a total of $1,425,000,000. One man is chairman of both boards. Analyzing these two institutionis further we find that bank A has a board of directors of eighteen members who hold a total of 189 directorships, and trust company B has a board of twenty-five members holding 222 directorships. Taking the two institutions combined we find that out of a total of forty-three directors, eighteen in the bank and twenty-five in the trust company, only twenty-nine persons bold the directorships of these two companies. In other words fourteen are on both concerns. Still taking the two together these twenty-nine men who hold forty-three directorships on these two concerns, a big bank and a big trust company, also hold 248 directorships in other companies. Oan it be said that there is no evidence of concentration?
Take another case, bank C and trust company D. These two have assets of $729,000,000 and $825,000,000 respectively, or combined assets of $1,555,000,000. The same person is president of both institutions, with another man vice president of both. These two men out of a list of twelve are members of both boards of directors. Taking them separately we find that 25 directors of the trust company

hold between them 261 directorships in other companies while 25 directors of bank C hold 252 directorships between them. Taking them together we find that 50 directorships of these two institutions are held by 38 men, 12 out of 35 on the trust company are also with the board of directors of the bank. Again, these 38 men who hold 50 directorships on the bank and on the trust company hold 346 directorships in other companies.
I will now take a life insurance company. We will call it E. It has a directorate of 17 members who hold a total of 156 directorships in other companies. The important point in this is that of 17 directors 10 of them hold 16 directorships in the four institutions above referred to, bank A, trust company B, bank C and trust company D, with six of them holding two apiece and four holding one apiece.
I am not going to pursue that further than to say this. I advance that as a very meagre illustration of the extent to which the concentration of the control of credit and industry in this country has grown. I notice that my time is slipping by and I must not spend too much on that phase except to say to the house that it would bear most careful and critical examination. I would ask hon. members before these bills are finally passed to give study to that section of the report dealing with this question of concentration. Incidentally, Mr. Speaker, I have just been told that I am not limited as to time, although I thought I was.
In regard to the trend towards concentration, it is much greater than it would appear on the surface, and the reason I say that is this: Many distinctive corporate names are used whereas the institutions or the personnel of the institutions are actually much the same. Then there is the question of interlocking directorates, to which I have referred, and there is another question of enormous importance, the question of credit control. There are industries the president or some prominent member of which sits upon the directorate of a bank, and it is well known that those who have that favoured position frequently get much better and more generous treatment in respect to the credit granted to their company than those who have not that favoured position.
Then there is the question of stock ownership scattered all over the country, with management control of the business, which is also another form of concentration.
There is also the practice of dummy directors. Frequently a powerful institution will appoint to the board of directors a person who is just a clerk or salaried employee, but he is

Trade Commission-Mr. Stevens
merely a clerk voicing the opinion and discharging the orders of those who are more powerful but who do not wish their names to appear.
There is the question of motive, which is very well dealt with in the report. The motives may be said to be two: power, profit and prestige is one of the motives impelling men to secure a larger degree of concentration. There is also, of course, the motive of production and administrative economies and reduction in costs.
Constitutionally, politically, and nominally, Canada is a democracy, but actually Canada is ruled by a plutocratic autocracy. I know there are those who will consider that an extreme statement, but I think it is necessary for the House of Commons to look the facts squarely in the face. It is not a thing to laugh about. It is something, sir, that we in this house, the last fortress I might say of democracy, ought to take into very careful consideration, because if parliament fails in its duty to a democratic state then I hesitate to say what may be the consequence of its failure to discharge such a duty. This house must take notice of these developments.
What I am asking for is not the surrender of the constitutional rights of provinces, municipalities, or individuals; I am not asking for that at all. What I am asking is that this house recognize its duty to the country, to a democratic state, and exercise its powers to the limits of its constitutional rights; and I think we can do much within our constitutional rights to remedy evils of which complaint is made.
Sir, it has been said by some: Leave the problem to be worked out in the courts. That argument is frequently advanced, but in my opinion it is futile and weak. Private citizens cannot possibly appeal to the courts against great corporations. It cannot be done, and it will not be done. Let me give you an illustration, Mr. Speaker. Only a few days ago there was brought to my attention a violation of the criminal code provisions against false advertising. There was no particular need for anybody to write to me about it that I know of, but they did; for it was open to these individuals to go to the nearest police court and swear out an information, and in that way redress through the courts was available. That is in the law and has been there for years. But what individual, what business man is there among the members of this house who on seeing a glaringly false advertisement in the press to-morrow morning will go out and swear an information
against his competitor in his own town? It simply is not done; that is all. It is no use saying that it is the duty of a citizen to do it. I do not think it is his duty. It is the duty of some public official to see that the laws are administered.
But that is not all. What happens to the individual, to the small merchant with limited resources, who goes up against an institution with forty or twenty or fifteen or ten or five million dollars behind it? What earthly chance has he in the courts against a big institution like that? I care not how just the courts are; I care not how impartially justice is administered, as I believe it is administered by the courts; but what chance, I ask, has the individual or the small merchant when he attempts to carry on his competitive business against these powerful corporations? I had in my hands this morning a letter from a prominent business man in Toronto marked "strictly confidential" and "private," and in the body of the letter he said, "Mr. Stevens, do not under any circumstances disclose what I have written." Then he went on to give me all the facts of a case. But what can I do; What can any public man do in a case like that? He can do nothing. The only people who can do anything in the matter would be a properly organized government body. I agree with the proposal of the Minister of Trade and Commerce in this bill to set up a public prosecutor or official who will be in. charge of prosecutions. Let me point out the situation to the minister. My hon. friend very properly says that the governor in council may appoint an officer to be called the director of public prosecutions. That is a very high sounding name and would seem to be all right, but let us see what his powers are to be. Section 22 reads:
It shall be the duty of the director of public prosecutions under the superintendence of the Minister of Justice-
These things can be done to-morrow under the superintendence of the Minister of Justice (Mr. Guthrie) without the appointment of any new official. The Minister of Justice can retain a lawyer in any part of Canada, as he does every day, to prosecute under any existing law. He can do this directly through the officers of his department or he can retain an official to prosecute. The section continues to state what he is to do, as follows:
(a) to institute, undertake or carry on, at the instance of the Attorney GeneraJl of Canada-
First he is under the superintendence of the Minister of Justice and then he carries on at

Trade Commission,-Mr. Stevens
the instance of the Attorney General of Canada, who is the Minister of Justice. The section continues:
*-or the commission criminal proceedings for violation of any of the laws prohibiting unfair trade practices.
Wihat were we told yesterday by the Minister of Justice and by the eminent legal authority on the other side of the house? We were told that it is impossible to make a law to deal with unfair tirade practices. From the other side of the house we were told that it is so much eyewash and from this side we were told that it is doubtful. This prosecutor is to institute proceedings for viola^-tion of any laws prohibiting unfair trade practices. What I want to impress upon the Minister of Justice and the members of the government is that we should provide in this bill for a board to declare what are unfair trade practices. There is no definition of unfair trade practices. When members of the legal profession are asked to enumerate in legal form what are unfair trade practices, all of them will draw away from the task of making that definition and some of them will tell you that it cannot Ibe done. Let us see what the report has to say in that respect. I quoted from the report last night but I shall repeat the quotation. I ask hon. members of the house and the government to listen to this part of the report which along with the other parts is the product of careful thought with respect to all these problems. It reads:
We feel, further, that it would be unwise to attempt to write at present into statute law a rigid definition of what constitutes an unfair practice, _ with a list of such practices. Such a list, if appropriate at the present time, would probably soon be rendered obsolete by changing conditions. At the same time we recommend that the act creating the trade commission and giving it power to prohibit unfair competition should establish certain principles for the determination of unfairness. We recognize that there is a very real danger of confusing the economic, legal and ethical implications of "unfairness" and we feel that this danger might be removed to some extent if certain general criteria were laid down in the act.
Will hon. members and particularly hon. members of the government pause for a moment and consider this matter. It is clearly admitted in the report, and as a result of our study we know, that it is almost impossible to lay down in legal phraseology what are unfair trade practices. Through the centuries we have built up, shall I say, a code of ethics to govern the dealings between man and man, but in the face of the reorientation

of business, in the face of the concentration of the control of industry and finance in the hands of the few, we are confronted with a new situation. There is no code of ethics to determine the practice between myself and a great corporation. It may determine what is the truth and what is fair dealing between an individual in a corporation and myself, but that individual will say to me: I am sorry, Stevens; I would not do this of my own will, but the company whose head office is in New York, in Chicago, in Philadelphia, in Toronto or in Montreal tells me that I must do this. He is sorry, but who suffers? I suffer or the fellow who is not able to cope with them suffers. The rigid rule is: business is business. That is the rule laid down by the head offices of corporations at some distant point. This fact can no longer be ignored. It is all very well to say that the game will be played according to the rules, but how can you apply rules to a packing company which controls fifty-nine per cent of the business and which shuts up a factory here and a factory there? Will the rules apply to their dealings with ten, one hundred or three hundred farmers throughout the country? What rules have we to protect these farmers? None. What code of ethics controls the actions of the company? He is a fine man who runs the business, his relations are cordial with his staff, but when it comes to dealing on the part of the corporation with ten, twenty, fifty or one hundred other people, there is no code of ethics to enter into the proposition. What about the flour milling companies, whidh control sixty-three per cent of the capacity of this country; what about their relations with the three hundred and fifty odd small competitors? What does the head of the Ogilvie Flour Mills Limited care for the welfare of the three hundred and fifty small competitors in Ontario and Quebec? I tell you that there is no code of ethics, there is no control, there are no rules of the game. It is not a case of the survival of the fittest, as some have said; it is not the application of the law of supply and demand, it is the ruthless power of huge capital concentration against individual operations.
There is some need of a referee. There is some need of new rules of the game. We hear about business being conducted as a game of football or baseball is played, but that is not the case. We need a referee with the power behind him to enforce the rules. That is what is asked for in this report, that the house take bold of this situation earnestly and give the commission the right to lay

Trade Commission-Mr. Stevens
down rules of practice which will be respected, honoured and accepted by the people of this country. I am familiar with this matter and I speak with a great deal of confidence when I say that the great body of business men, the retailers, the wholesalers, the distributors and the manufacturers, are keen and anxious to have rules laid down and are willing to observe those rules. We have laws against murder, but we have murderers. We have laws against theft, but we have thieves. We have a constitutional right to pass laws against these things but we cannot control them absolutely. There will be the chisellers who will seek to evade these rules, but with the building up of practice, with the development of public opinion and with the establishment of the justice of your case you will gradually build up for commerce a set of rules and ethics of procedure which in my opinion will be more efficacious in carrying on the business of this country than mere statute law. I say to this house with great earnestness that this country is waiting for the House of Commons to lay down rules which will relieve countless thousands of our citizens from the unfair and predatory practices to which they have been subjected in the past.
Before closing I wish to refer to one or two things in connection with this bill. There is a certain inherent and in my opinion fatal weakness in the bill. I hope that the Minister of Trade and Commerce will not think me discourteous when I say that while I agree with him when he says that the tariff board is well qualified and efficient, I distinctly and definitely disagree with him in the suggestion that it is competent from the point of view of physical and mental effort and the time necessary to deal with this very important matter. I do not think it can be done. We have a customs tariff board presided over by one of the ablest judicial minds in Canada; so far as that is concerned no one can complain. Indeed, I think that the chairman of the board has added greatly to his laurels by the manner in which he has presided over its proceedings. But I venture this statement, that he has before him now specific duties outlined which will keep him and his colleagues busy for at least a year. I can cite matters that are crying out for consideration by that board, matters that will occupy them another year. Let me mention one. That board ought now, at the earliest possible moment, in anticipation of the falling in of the British-Canadian trade agreements, to be studying the whole textile schedule of our
tariff. They ought to be studying this subject, and they ought to provide the government, long before those agreements fall in, with some guiding principles that will enable them to remove from the Canadian tariff those measures which are objectionable to our British trade relations. It does not follow that a statement of that kind is a condemnation of the agreements, but it does follow that out of our experience with those agreements there is ample opportunty for adjustment, which will greatly enhance our standing in Great Britain. That is a task they can undertake. I suggest that when it is said that the tariff board are efficient and qualified you do them tardy justice; but I reiterate that they are not competent from the standpoint of time and organization to undertake this task, which is a tremendously important one.
We speak of the difficulty of prohibiting unfair practices. I have dealt with them pretty fully. It is not a question of drafting some narrow legal definitions of unfair practices and penalizing people for indulging in them. Rather, it is a question of building up a broad based catalogue of rules and practices that should govern commerce. Do that, and in the years to come you will attain a position similar to that which the interstate commerce commission has established for itself. On the other hand, I am not suggesting that it should be confined to what is in the interstate commerce act or in the American federal trade board act-not at all. I do say this however. Take a board established on the basis of the Canadian railway board, which acts as referee between the public and the railways-a board which in this instance shall act as referee between competitors in conflicting conditions, and between the business elements and the public- and you will have done the country a service. Can we not draft a law based upon the unity of Canada, upon peace, order and good government in Canada, and upon the provision for the regulation of trade and commerce? Do you mean to tell me, sir, an ordinary layman, that there are not legal brains in this house competent to draft a law within the ambit of these three principles to deal with the matter? Let me refer to them-I did last night. The preamble to the British North America Act lays down, as the principle on which the provinces came together, the unity of Canada. If you have a minimum wage law here and a minimum wage law there, and practices in one province that conflict with practices in another, to the extent that dis-
Trade Commission-Mr. Stevens

cord develops between provinces, surely it becomes necessary, it becomes the duty of parliament in the face of that situation to declare that in the interests of the unity of Canada, which is tlhe basis of confederation, thus and so shall be done. Then I come to the next point, peace, order and good government. Will anyone tell me that the practices which have been uncovered, the pitiful wages paid, due to mass buying pressure, and the ruthless action of many institutions in this country in carrying out their trade practices have not been conducive to the destruction of peace, order and good government in this dominion? Will anyone tell me that this country is so quiet to-day that we need have no fear? I pay this tribute to the people of Canada; it has been amazing during these terrible years of depression how well ordered the Canadian people have been, and this is due to their inherent characteristics. But it does not follow that there has not been provocation; the provocation is there. Here we are asking for recognition of the danger to the peace, order and good government of Canada and to have this power invoked as well. The third point is one T have already referred to; it is one to which !I notice the Minister of Trade and Commerce and others pay very little respect or. shall I say, attach little weight, namely, the mandatory power for the regulation of trade and commerce. It is exclusive; it is unrestricted as far as the British North America Act is concerned. But, as I have said in this house on at least two previous occasions, the trouble is that the dominion parliament has never attempted to occupy that federal field. Look over the history of the dominion for the last fifty or sixty years; we have done something with respect to external trade, but so far as internal trade goes, what have we done? Mighty little. And now we find ourselves confronted with an entirely new method of trading, different from what it wras twenty years ago, something never thought of before; yet we are unprepared to meet it by reason of the fact that no use has ever been made of the power conferred upon the dominion parliament. Let us invoke that power. Based on these principles-the unity of Canada; peace, order and good government in this realm; the regulation of trade and commerce and the recognition of undisputed rights-based upon these principles, I ask that the house give power to this commission to formulate rules and practices, to define what unfair practices are, and to enforce the order to cease and [Mr. Stevens.l
desist. I am convinced, in spite of the very learned arguments made by legal gentlemen in this house, that, given the will to do it, this parliament can effectively meet this great emergency, because it is an emergency, which is confronting us in this country and which is so clearly set forth in the pages of this report.


Mir. SAMUEL FACTOR (Toronto West Centre):: As a former member of the price spreads commission I feel it is my duty to say a few words concerning the proposed bill.
I followed with much interest the speech of the hon. member for East Kootenay (Mr. Stevens) and with much of what he said I am in complete agreement, particularly in reference to the concentration in industry. I often wonder, though, and I have had occasion to hear the hon. member a number of times, why he omits in all these addresses to emphasize the fundamental thing concerning the disclosures made in that investigation and the problems raised. I think we can agree that there is no single cause responsible for the distress both of the primary producers and the working people of Canada so great as the loss of our external trade. I have never yet heard the hon. member discuss that problem. I venture to suggest that if all the corporations and the present concentration of industry were disbanded and dissolved and all their wealth distributed among all the people it would not increase our total national wealth. If our external trade remains at its present low level or sinks to lower levels, nothing will help our primary producers and the working people of Canada. It seems strange that in all the speeches I have heard the hon. member deliver he does not recognize this problem. I suppose he does not because he was for a number of years a member of a government which pursued policies which destroyed our trade with the countries of the world.


Some hon. MEMBERS:: Oh, oh.


Samuel Factor: Hon. members perhaps do not like to hear that statement, but the facts speak for themselves. I venture to suggest that if we had continued for the last five years on the same level of trade that we had in 1928 and 1929, we should have had approximately five billion dollars more trade than we had, and one can easily see the effect of that on the prosperity of our primary producers as well as our secondary industries. Hon. members can well realize that with the

Trade Commission-Mr. Factor
loss of our external trade the purchasing power of the primary producers was destroyed, as pointed out by the hon. member for Wey-burn (Mr. Young) in his minority report, to the extent of almost one billion dollars between 1928 and 1934. This loss of purchasing powier was immediately felt by the secondary industries, with the inevitable result of unemployment, under-employment and shocking conditions in employment.
May I also make a second general observation before I follow the argument of the hon. member. This investigation has been called a mass buying investigation, but may I suggest that in some of the shocking conditions of labour that were disclosed therein mass buying played no part at all. I propose to show in a few minutes some of the conditions both of low wages and long hours in industry in which mass buying played no part. I am not prepared to say that mass buying has not developed and in the last five years induced some evils and trade abuses, on the contrary I propose to show that it has, and perhaps we need legislation to remedy those evils. But to blame mass buying or mass merchandising for some of the shocking conditions of the working people or the pitiable plight of the primary producer is putting the cart before the horse.
Beyond these general observations I must agree with certain statements made by the former Minister of Trade and Commerce. Undoubtedly the concentration of industry has been responsible more than anything else for some of the conditions disclosed by the investigation, and for the exploitation, using the word in its economic sense, of weak and unorganized groups, both producers and workers. Let me illustrate the point with one or two examples. Take the tobacco industry. In that industry one company controls seventy per cent of the business of Canada. The hon. member referred to the meat packing industry in which two companies control eighty-five per cent of the business in Canada. In the fruit and vegetable canning industry two companies control, or endeavour to control almost eighty per cent of the business. And so on down the line, even in industries which have not been investigated by the commission, pulp and paper, cement, rubber, rubber footwear, electrical appliances and many others. There has been this concentration of industry in which one or two companies control the production and sometimes the distribution of perhaps seventy to eighty per cent of the commodities, or by acting in unison with other companies or by some arrangement manage to get control of
particular commodities. The result of this concentration in industry has been the creation of mergers and monopolies having great power, which power they have used to the detriment of both the primary producer and the working people.
Let me go a step further and endeavour in a few words to show how these huge corporations through their corporate powers succeeded not only in causing great wrong to society by taking millions of dollars from the innocent investing public, but built up huge financial structures with a rigid overhead, which, when the depression came and business fell away they were unable to maintain except by taking it out of the primary producer and the working people. I have no quarrel with the investment dealer and the promoter, I believe they occupy a legitimate place in the economic scheme, but the unscrupulous promoter, and the incapable o-r dishonest investment dealer have created the situation through which in the last ten to twenty years the public has lost millions of dollars. This concentration in industry and misuse of corporate powers has resulted in the establishment either of monopolies or monopolistic competition. There is no use blaming anything else. If we succeed in removing these monopolies from our national economy we shall have solved a great many of the problems that are facing us.
Let us glance for a moment at the other side of the picture. I am not going to discuss the condition of our primary producers, 1 leave that for members of the commission who- can speak with greater authority, but I should like to say a- few words concerning the shocking conditions of labour that were shown to prevail. For a young country endowed with great natural resources it came to me as a distinct shock to learn of some of the labour conditions that exist; low wages, long hours, deliberate flagrant violation of the present inadequate minimum wage laws and factory inspection laws and generally speaking a grinding and oppressive condition in industry which is a disgrace to a civilized country. We have a labour chapter written in this report of which I, as a Canadian, am not proud. We have got to realize what has been so amply demonstrated, particularly by my distinguished leader, that industry has two arms. There is the capitalist investor and the labour investor. The capitalist investor invests money with which to buy plant, machinery and equipment, materials and the like. The labour investor, on the other hand, invests his health, his energy and sometimes his very life. In the last twenty-



Trade Commission-Mr. Factor
corporations have lost money and have gone through difficult days, we cannot compare their position with that of the man who must work for two or three dollars a week. I am not talking about the unemployed; I am dealing more particularly with the underemployed and those in employment receiving inadequate wages. How can we compare the position of these corporations with those of the small retail man and small merchants who in the last five years have been struggling to make ends meet and to keep body and soul together?
I appeal to every hon. member, irrespective of political affiliation or partisanship, to try at least to help solve some of these problems. We cannot legislate morality in business; I realize that. No law put on the statute books will in any way bring about an adequate remedy for all these business evils, but at least it will be a step in the right direction. It would act as a brake and would help to remove some of the evils and abuses. I believe the men in control of our industrial and commercial structures now realize the problem. Only a few days ago I read a speech delivered by the president of the Ford Motor Company in which he stated that human life is more important than a balance sheet. Even the president of the Imperial Tobacco Company spoke along similar lines. We must come to a realization of the fact that we must give the small business men, the working people and our primary producers a decent chance to enjoy life.
May I conclude by citing something which President Roosevelt said a few days ago to a correspondent who asked him to restate his position on the new deal, following the decision rendered by the supreme court. Here are his words, and I commend them to the attention of the house:
The social objective, I should say, remains what it was, which is to do what any honest government of any country would do; to try to increase the security and the happiness of a larger number of people in all occupations of life and in all parts of the country; to give them more of the good things in life; to give them a greater distribution not only of wealth in the narrow terms but of wealth in the wider terms; to give them places to go in summer-recreation; to give them assurance that they are not going to starve in their old age.


James Lorimer Ilsley: Mr. Speaker, following the hon. member for Toronto West Centre (Mr. Factor) I should like to say a few words on the bill before the house. My line of approach will be roughly to present the point of view of the three members of the price spreads commission who prepared the memorandum of reservations appended to the majority report.

As I stated last night in my observations concerning certain criminal code amendments, the majority report provided for the setting up of three commissions. One of these was the trade and industry commission, another a board of live stock commissioners and the third a fisheries control board. In connection with the two last named boards we disagreed with the majority, believing that they would be either ineffective and superfluous or positively injurious. We did agree with the majority, however, about the setting up of a federal trade and industry commission. We offered our support, believing that there were functions, a half a dozen in number, which such a commission could discharge.
Speaking on the second reading of the bill this afternoon the Minister of Trade and Commerce (Mr. Hanson) enumerated five of those functions, and in a sort of way provision is made for those functions in the bill now before the house. The sixth has been dropped, the reason given being that there is a constitutional difficulty. About that point I may have something to say later. These six functions, subject to what I have to say about price and production agreements, we considered of importance to the Canadian people. First, and to my mind the most important, was the necessity for the better enforcement of t'he Combines Investigation Act. As hon. members are no doubt aware, this act was placed on the statute books in 1923. Of course there had been anti-combine or anti-trust legislation dating from the year 1889, at which time a section of the criminal code, now numbered section 498, was enacted. The original section through the years has to some extent been amended, but section 498 of the code contains substantially the provisions of the original section. After some experience it was found that it was almost impossible to obtain convictions under section 498, unless before launching a prosecution there was set up an investigating body to obtain evidence and to report as to whether or not there was a combine in a particular industry. So in 1910 the first Combines Investigation Act was passed. It remained on the statute books till 1919 when it was repealed. Its place was taken by the Combines and Fair Prices Act of 1919 and the Board of Commerce Act, twin acts placed on the statute books that year. That legislation was declared unconstitutional by the privy council in 1921, and in 1923 the present Combines Investigation Act was passed. It has been called by a good many competent observers the best anti-trust legislation in the world. Under that act there have been hundreds of investigations; there have been many reports declaring that a combine existed

Trade Commission-Mr. Ilsley
in particular industries; there have been prosecutions following the reports, and in every case except one, as I said yesterday, the verdict of the court has been in accordance with the finding of the registrar under the combines act. There is no doubt about this fact, that the existence of a combines investigation act is a fact that is in the minds of everybody engaged in trade or industry in the Dominion of Canada, and to my mind, and in this I understand that all my colleagues on the price spreads commission agree, the Combines Investigation Act is good legislation. No one in this parliament advocates its repeal, although some business men in the country do. It is one of the main measures of protection which the consumers of this country have against monopolistic exploitation. It is therefore very important, Mr. Speaker, that proper machinery be furnished for the enforcement of the act.
With regard to the machinery which exists at present, we were of the opinion, and I am still of the opinion, that it could be improved upon. We think that instead of having a registrar serving under a minister, a branch as it were of a department, the Combines Investigation Act would be more effectively administered and enforced if it were placed in the hands of an independent commission. The registrar is an admirable official, none better in the government, but the conditions under which he has to function hamper him to a great extent.
We have had something to say in this house about publicity. The minister has not made public the reports during the last three or four years. Because there was some little dispute about the facts in connection with publicity I took steps to ascertain what the practice has been in other years. I find in the Labour Gazette of May, 1935, on the first page, a list of the publications of the Department of Labour, and among them are the [DOT]eports published by the commissioners and .he registrar under the Combines Investigation Act. I will leave out the reports of the commissioners, but the reports of the registrar published are five in number: the first was published on June 9, 1925; the second on March 25, 1926; the third on September 6, 1928; the fourth on February 5, 1931, and the fifth on March 4, 1933. That last one was the report of the registrar on the alleged combine of tobacco manufacturers and buyers of raw leaf tobacco in Ontario, which the minister at first refused to produce and did produce only under pressure of the house and because of the circumstances that a by-election was pending in one of the counties in Ontario.
The matter of publicity is therefore important. and we put in our report a very definite recommendation that the reports of the registrar under the Combines Investigation Act should automatically be made public. I think that that provision should be contained in this act instead of section 28, which provides for publicity at the option of the commission. Publicity certainly should be the rule, if and when the opportunity has been given to the persons investigated to be present at the investigation either in person or by counsel.
My first criticism of the bill before the house is that if the enforcement of the Combines Investigation Act, instead of being entrusted to an independent separate commission, is entrusted to the tariff board, I am afraid it is not going to be as well enforced as it has been up to the present time, and I say that very sincerely. The members of the trade and industry commission are to be the members of the present tariff board, and the present registrar under the Combines Investigation Act apparently is left entirely out of the picture. I do not know what will become of the registrar. Certainly I would say that he should be a commissioner. He has had more experience than the others. The others have no experience whatever, and that is one great defect in this legislation. Provision is made for any one of the members of the tariff board to conduct investigations under the Combines Investigation Act. but the one person in this country who has had experience in the conduct of these investigations is the present registrar, who has, within the limitations imposed upon him by circumstances, discharged his duty with great efficiency and distinction. That is my first criticism of the legislation which is before the house.
The second function that we thought this trade commission could effectively discharge for the benefit of the people of this country was that of a bureau of commodity standards. The Financial Post says that a bureau of commodity standards is to be set up as a separate board. Not at all; it was to function as a branch or committee under the supervision of the trade and industry commission. What does that mean? In 1924 we set up a national research council, and it has been examining different commodities to see whether or not they were adulterated, or whether or not they met the requirement of purchasers; but the national research council is primarily a scientific body, and its research is scientific. It is occupied with the scientific rather than with the commercial side, and
Trade Commission-Mr. Ilsley

we considered that it would be very much better for the consumers and for persons in business if they could have a body of men with some commercial contacts, rather than a body with scientific contacts, to establish commodity standards. The evidence was that ' in Great Britain they have established five or six hundred of what they call British standards, and sellers of goods and makers of goods whose products come up to these standards have the privilege of putting upon them the words, or the initials therefor, British Standards, which gives the purchaser some guarantee as to the quality. I am pleased to note that this bill makes provision for Canadian standards, and I think quite a lot can be done along that line. There is a great deal of fraud being practised on purchasers in this country. The most startling evidence given to the commission was on 'that point. Evidence was given that substances were being sold as paint which were hardly paint at all-they would wash off with the rain; lubricating oils were sold which did not meet the requirements of the purchaser in any sense; gasolines were being sold with very widely varying degrees of efficiency, and the grades had no relation to the price at which the gasoline was sold; silk was sold as pure silk which was largely artificial silk and weighting material; putt}'- was being sold with mineral oil in it instead of linseed oil, which caused it to crack and come out shortly after it was put in; anti-freeze and cleaning preparations and soaps were being sold at prices entirely out of line with what was in these articles. It was considered by the commission that much progress could be made in the way of giving the consumer the properties of the article which he was buying; for that reason we brought in a recommendation that a bureau of commodity standards be set up, and so far as I can see that is fairly well provided for in this bill. I have not critically examined the provisions of the bill in this regard, but the principle of the bill, I would say, in that respect is entirely right.
The third function of the board was to act as a securities control board. On that point let me read a brief passage from page 44 of the report:
The machinery outlined above, however, can only come into action after the securities have been issued. It should, therefore, be supplemented by and combined with some machinery which would review the situation before the securities were issued. This leads logically to the formation of an investment or securities board, functioning as a section of the federal trade and industry commission, recommended later in this report. It should cooperate closely with that department of the government responsible for incorporations but should' not, we feel,

be an administrative division of such department. The functions of such a board should be to review the proposed capital structure of all companies incorporated under the dominion act and desiring to issue bonds or stock to the public. In other words the board would pass pn all issues of bonds or stock after thorough investigation. In performing this duty, the board would necessarily give careful consideration to the proper relation that bonds or stock to be issued bear to the company's assets.
We an this side of the house have insisted far some ye-ars that some such board should be established. My right hon. leader stated in 1933:
The Liberal party believes the financial mismanagement of industry is largely responsible for many conditions obtaining to-day.
To prevent exploitation of the public through the sale of watered stocks and worthless securities. it believes an investment control board should be established, with supervision of issues of securities by companies incorporated under federal charters.
These being our convictions we naturally concurred in the recommendations of the price spreads commission, but when I come to consider the bill I find that this federal trade and industry commission is not to function except upon the request of the Secretary of State. Without going further into tihe matter I would say that that provision is entirely inadequate to meet what we had in mind when we made that recommendation and to meet wihat we on this side of the house have had in mind for some years.
The fourth function ,of the commission is the prevention of unfair trade practices. Unfair trade practices can be divided roughly into two classes, those which are ethically unfair and those which are economically unfair. There can be no argument as to the provision of adequate machinery to control ethically unfair trade practices such as short weighing, deceptive packaging, misleading and false advertising, and that sort of thing. I think every hon. member will agree that adequate machinery should be supplied, I believe by the dominion rather than by the provinces, to curtail and prevent ethically unfair trade practices, of which there is a surprisingly large number. There are more of these in existence than I thought possible before I heard the evidence presented to the commission. I am sure that all hon. members will agree to the providing of effective measures foir the curtailment of these practices. It may be that the director of prosecutions may be able to attain this end but we may have to find out mo-re as to how that official is to function and what checks there are to be upon his functioning.
It is very difficult to define what are economically unfair trade practices. The hon.

Trade Commission-Mr. Ilsley
member for East Kootenay (Mr. Stevens) made it very clear to the house this afternoon that theire is great difficulty in defining this type of unfair trade practices. If we needed a further illustration I think it was furnished by the debate last evening which demonstrated the great difficulty of providing proper amendments to tihe criminal code. Attempts have been made in other quarters to curtail what are known as economically unfair trade practices. Since 1924 the federal trade commission of the United States has attempted to deal with these matters and I think we should make some attempt to act within our powers as a parliament to curtail and prevent unfair trade practices. We had a long discussion on this whole matter last evening and I have not the time this afternoon to take it up further.
The fifth function which we recommended for a federal trade commission is what I might call the regulation of monopolies, and I should like to say a word about this. The hon. member for Toronto West Centre (Mr. Factor) has shown the trend towards monopoly and the serious concentration of business in fewer and fewer hands, in the hands of huge corporations. I am thoroughly in accord with all that the hon. member said. No one could listen to the evidence given before the commission, no one could read the reports which were presented to the commission, no one could read the report of the commission itself without realizing that that is true to a tremendous extent in the Dominion of Canada. The packing industry has been mentioned two or three times. In the United States the largest packing company controls only twenty-seven or twenty-eight per cent of the business while in Canada one company controls fifty-nine or sixty per cent of the business. There is a tremendous concentration of control in the tobacco industry, the Imperial Tobacco Company controlling seventy or eighty per cent of the business while two of the largest companies control eighty-five per cent. As the hon. member for Toronto West Centre has said, such monopolies eliminate competition and both primary producers and consumers are undoubtedly put in positions of great disadvantage. Competition is the regulating factor, as the Prime Minister (Mr. Bennett) has said, and when the growth of these monopolies causes the disappearance of competition I am convinced that something must be substituted, that there must be some way provided by which the public can meet these great concentrations of industry on their own ground' and1 get fcr the people
with whom they are dealing some of the advantages which otherwise would be provided by free competition.
Some attempt should be made to bring about that position. We thought that a body should be set up which would have the power to recommend to parliament after careful investigation that certain industries had attained the dimensions of monopolies and should be declared monopolies and' that extraordinary measures should be taken with reference to those industries. They would not exactly be made public utilities, but regulations could be applied similar to those applied to the public utilities. We differed with the majority of the commission on two points. In the first place, our colleagues were of the opinion that the governor in council should have the power to declare these monopolies on the recommendation of the federal trade and industry commission. We disagreed with that because we claimed that the situation could! not possibly be an emergent one. We contended that matters could remain in statu quo for some time. It might be a great advantage to a particular industry to be declared a monopoly because if it once got into the position of a public utility its profits might be more or less guaranteed. Many industries might desire to be classified as monopolies rather than to remain in the competitive field and come under the provisions of the Combines Investigation Act. We thought it a serious thing to allow the status of an industry to be altered by governmental action; we contended that it should be submitted to parliament rather than to the government, that it should be the subject of legislative rather than executive action. That was the first point upon which we differed from our colleagues.
The second point upon which we differed was this:	They were of the opinion that
there might be times when even though competition existed1 to some extent in an industry, even though it could be restored to an industry, nevertheless that industry should be declared a monopoly; but we considered that competition was by all means the most efficient regulating factor and if there was any chance of restoring competition, it should be restored. Those are the two points upon which we differed from our colleagues in connection with monopolies. I would call attention to the fact that this bill contains no provision for the handling of these monopolies. To that extent it is a disappointment to us and it is obviously a disappointment to the hen. member for East Kootenay.
Trade Commission-Mr. Ilsley

This subject is too important to be dealt with in the dying hours of a moribund parliament. I contend it should be left to be dealt with !by a parliament fresh from the people. In my opinion this will have to be dealt with in the near future because it will never do to leave the consuming public open to the power of these embattled monopolies which are gathering up more and more of the business of the country along certain lines. Those are my submissions with regard to the regulation of monopolies.
The sixth function as recommended by the majority report was the authorization of price and production agreements in certain competitive industries. With that recommendation we on this side of the house flatly and decisively disagree. We believe it is thoroughly illogical to confer upon the commission, as its primary function, the prevention of combines and then, further down on the list, to confer on it the power to sanction combines. That is thoroughly illogical and contradictory. I admit that in times of distress and depression you will find highly competitive industries where there seem to be cutthroat competition, waste and chaos. But our contention is that competition is the best protection the public has; and if you authorize price and production agreements between those engaged in any industry, limiting production and fixing prices charged the general public, you will get stagnation in industry, exploitation of the public and monopoly-the very thing which is admitted to be one of the greatest evils we have to contend with. We are most emphatic about that. We believe in the principles of the Combines Investigation Act and do not believe in its nullification by conferring on the trade and industry commission or on the government, on the advice of that commission, the power to sanction combines, monopolistic combinations, when one of the primary functions of the commission should be to prevent combines. I would point out that these attempts have not succeeded where they have been tried. Take the codes in the United States under the NBA. The attempt was made there. I am not familiar with the codes but broadly speaking that was the object-to sanction combines within various industries, allowing them to fix the prices they would charge the public. As everyone knows, prices went up faster than wages and a great many of the codes broke down for that very reason. That is a very large subject and I have not the time nor am I prepared to go into it fully at the 
present time. I do not believe in that provision of the Natural Products Marketing Act which enables the manufacturers of secondary products to enter into these price and production agreements, such as the jam agreement entered into not long ago. I do not believe in that principle at all. There is the dominion marketing board, with power to sanction certain combines, and it would be a very foolish thing to set up a second body to sanction combines under similar circumstances. There would be overlapping jurisdiction which would be farcical. I am therefore thoroughly opposed, as those on this side of the house are, to that section of the act which authorizes the sanctioning of these price and production agreements, section 14. and I want to make that clear on this second reading.
Those are the six functions which the majority had in mind for the commission, and it will be seen from what I have said that we regard the bill as in some respects a disappointment and a failure, though in some other respects we approve of it. Speaking for myself, I think the two great weaknesses are these. In the first place it weakens rather than strengthens the administration of the Combines Investigation Act; and the second great weakness of the bill is that it authorizes the formation of price and production agreements in competitive industries, depriving the public of the benefits of competition and sanctioning what is declared against earlier in the bill.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock. BANK ACT AMENDMENT



PROPOSED REPEAL OF SECTION 138, UNAUTHORIZED ISSUE OF NOTES OR SUBSTITUTES FOR MONEY

[Stage Direction]
Mr. G. G. COOTE (Macleod) moved the second reading of Bill No. 69, to amend the Bank Act.
He said: Mr. Speaker, money is a creation of government, and in Canada under our constitution the federal parliament is given control of the issue of all money. Parliament in its wisdom has given this right to the Bank of Canada and to the chartered banks. So far as the public is concerned we can get money for the transaction of our business only through the chartered banks. Under

Bank Act-Mr. Coote
section 138 of the Bank Act the banking system is given the exclusive right to issue money. That section reads:
(1)	Every person, except a bank to which this act applies, who issues or reissues, makes, draw's or endorses any bill, bond, note, cheque or other instrument, intended to circulate as money, or to be used as a substitute for money, for any amount v-hatsoever, shall incur a penalty of four hundred dollars.
(2)	If any such instrument is made for the payment of a less sum than tw'enty dollars, and is payable either in form or in fact to the bearer thereof, or at sight, on or demand, or at less than thirty daj's thereafter, or is overdue, or is in any way calculated or designed for circulation, or as a substitute for money, the intention to pass the same as money shall be presumed unless such instrument is
[Stage Direction]
(a)	a cheque on some chartered bank paid by the maker directly to his immediate creditor; or
(b)	a promissory note, bill of exchange, bond or other undertaking for the payment of money made or delivered by the maker thereof to his immediate creditor; and
(c)	not designed to circulate as money or as a substitute for money.
The bill which I have introduced asks that section 138 should be deleted. The first objection that I raise to the section is that it is almost impossible for any ordinary person to understand it. The second objection, and I think this is a valid one, is that if certain forms are used the intention to pass them as money, which is a contravention of the act, is to be presumed. That is, any person who is charged under certain clauses of this act with an offence is presumed to be guilty, and the onus is upon him of proving that he is not guilty. It seems to me that proof of violation of the act should rest with the prosecuting authority. I think this is a very bad feature to introduce into the law.
However, my chief reason for introducing the bill is the financial situation of many of our cities and municipalities and also of some provinces. There are many cities in Canada -I do not wish to name them-that have been capitalizing their relief costs for perhaps the last two or three years, and many of them have been borrowing to pay their interest charges. In many cases they have not been keeping up their sinking fund. This debt creating process, it seems to me, must stop some time. Then many municipalities cannot borrow money from the banks to carry on their necessary public services. If not prevented by this section I believe there are many municipalities which oould not only carry on necessary public services but might also collect a lot of taxes which are at present going unpaid, and at the same time effect some public improvements. This section has been invoked in one or two cases at least to stop municipalities from doing this very
thing. Last year when we endeavoured to have section 138 struck out of the act the minister said that there must be some protection for the currency of the country. Of course I would agree with that, but even so I do not see why we should impose a penalty of S400 for the issue of a substitute for money as distinct from w'hat might be termed money itself. If we had an adequate money system in Canada operating at the present time-it may have operated adequately at certain times, but it seems to me it has not done so in the last few years-I would not be introducing the bill. But if the people of a community who have goods and services to exchange with each other have no money and can get none from the banking system, I do not see why we should by law prevent them from providing and using a substitute for money if they can do so.
A good many cities in the United States have made experiments with municipal scrip, and the story of the efforts of these towns has been published in book form by Professor Irving Fisher. In that book he also tells the story of the town of Worgl in Austria where I think half the people were unemployed, and the mayor persuaded the town authorities to issue what was known- as stamped scrip. A stamp in value equal to two per cent of the face value of the scrip itself had to be placed on the scrip once a week. These stamps had to be bought with legal money, so in fifty weeks enough money was secured from the sale of these stamps to retire the scrip in full. In that town they succeeded in putting practically all the unemployed back to work; they built a new town hall and many other improvements, and made a great success of the use of this stamped scrip. That success I believe might be duplicated in some of the cities of Canada. I have talked with some town authorities who said they would like very much to issue a small amount of scrip but they were afraid they would !be found guilty of an infraction of section 138 of the Bank Act, and they could not run the risk of being fined $400 for the carrying out of such an experiment.
It seems to me that the term money as used in this act or as used in the British North America Act, that is currency and coinage and paper money, is undoubtedly within the jurisdiction of this parliament. But such money is only a small percentage of the money which we actually use to-day. In the general acceptance of the term the bulk of our money is in the form of bank deposits and is passed from one person to another by cheque. That naturally raises the question
Bank Act-Mr. Bennett
[Stage Direction]
whether cheques are substitutes for money. When we discussed this matter in the banking committee last year I noted it was the opinion of a good many members of the committee that cheques were not money. If they are not money they must be a substitute for money, and it seems to me that according to the strict interpretation of section 138 many people who are passing cheques around are guilty of an infraction of that section. It is true that if the cheque is for less than $20 there would appear to be an exception; in that case it is not considered to be a substitute for money. But if it is for a larger amount it is so considered, and if the cheque passes through the hands of a third or fourth person, under the terms of this section the party who issues it would be liable to a fine of $400. It may be presumed that it. is his intention to pass it as money, and then it would be necessary for him to prove that it was not his intention so to do.
In conclusion., Mr. Speaker, I should like to repeat that it is this section of the Bank Act which gives the banks a monopoly of all money and credit. I think the introduction of this bill will give all those opposed to the granting of this monopoly to the chartered banks an opportunity to register their objection. I hope the bill will receive at least the careful consideration of the house.
Richard Bedford Bennett: Mr. Speaker, in the absence of the
Minister of Finance (Mr. Rhodes) I desire only to point out first of all that this matter was carefully considered) by the banking and commerce committee last year, and the subject matter of the present discussion was then much debated. The conclusion of the oommittee was that the section should) be incorporated in the Bank Act as it now is.
I cannot say that the practice of bringing to the attention of the house in a succeed^-ing session a measure that was carefully considered less than a year ago and on which a conclusion was reached, has very great merit, nor do I think the hon. gentleman who has just taken his seat (Mr. Ooote) has quite made himself familiar with .the provisions of the new Bank Act and the Bank of Canada Act. The old1 fashioned appeal that was formerly made, that we must vote against the banks that have a monopoly of .the issue of bills, no longer has substance, because we have provided that ultimately the Bank of Canada will be the only issuing bank in the country. Therefore the last argument [Mr. Coote.l
made by my hon. friend was one that might have found1 force and place some years ago but which perhaps cannot be taken too seriously now.
I wonder what would happen in the country if this bill were to be enacted. I wond'er just what would be money. I sent the page out for Palgrave's Dictionary of Political Economy and turned up the word "money" because I recalled that there was a time when oxen were the standard of money; that in other cases iron bars were used as money, and that at other times various substances and commodities passed as money. But according to Palgrave we are thus able to give a full and final definition of money:
-namely, that it is that which serves (1) as the common medium of exchange:	(a)
dispensing with the double coincidence of *wants and' of possessions involved in barter; (b) furnishing a price-current of all the commodities in the market.	(2) As the
standard of deferred payments. To put it in another form, money is that which passes freely from hand to hand, in full payment for goods, in final discharge of indebtedness, being accepted equally without reference to the character or credit of the person tendering it. and without the intention on the part of the person receiving it himself, to consume or enjoy, or otherwise use it than by passing it on, sooner or later in exchange.
I wonder what sort of money we would have in Canada if this bill were to pass. There would1 be scrip at Calgary, scrip at St. Paul, scrip at Red Deer, scrip at Winnipeg and at Regina, and the very essential idea of the word "money" would have perished and vanished. I do not think this bouse desires to have it seriously argued that the enactment of legislation such as this would turn our whole monetary system, such as it is, into a farce; I am sure the hon. gentleman has no such object as that in mind.
For the moment I need say nothing further on that phase of the matter. The hon. member for Macleod (Mr. Coote) does object to the provisions of the act that state that the possession of certain things constitutes a presumption against the person who is in possession of or who tenders certain things as money. There is nothing new in the law in that regard. For example, if a man is walking down the sidewalk and a barrel of flour falls on his head there is presumption- of negligence, and he need not prove it. That is res ipsa loquitur; the thing speaks for itself. In criminal or quasi-criminal cases there are certain things that in themselves constitute a presumption which it is essential that the person who is

Trade Commission-Mr. Kennedy (Winnipeg)
affected should discharge by evidence indicating that the presumption was not warranted. All that is said in this case is that if any such instrument is made for the payment of a less sum than S20, and is payable either in form or in fact to the bearer thereof, or at sight, or on demand, or at less than thirty days thereafter, or is overdue, or is in any way calculated or designed for circulation, or as a substitute for money, the intention to pass the same as money shall be presumed. It is not that the man is presumed to be guilty but that the intention is presumed, and there is a vast difference between a presumption of guilt and a presumption of intention. It is so difficult to prove intentions, however honourable they may be. It is so difficult to prove them even when they are dishonourable, and when the law says there shall be a presumption of intention that is an entirely different thing from asserting that there is a presumption of guilt. All this section says is that certain facts shall constitute a presumption of intention, and that only.
I do not desire to do more than indicate the views of the government with respect to the matter, in the absence of the Minister of Finance. In order that the matter may be presented from his viewpoint, since I understand that he has some views with respect to it, I think I might content myself with merely moving the adjournment of the debate and permitting the matter to end there for the moment.


Alan Webster Neill: Might I ask the Prime Minister a question?


Richard Bedford Bennett: Certainly.


Alan Webster Neill: If this bill should pass would it be possible for every private individual to mint or print his own money?


Richard Bedford Bennett: You see, it is very dangerous for a man who is a lawyer to express an opinion these days, but if I might be permitted to do so I would think it would be somewhat doubtful with respect to the individual. There would be no doubt about it with regard to the aggregation of individuals that might constitute a certain form of corporation, shall we say, whether it be municipal or otherwise. I am inclined to think that if he could get anybody to take it as money, if the printing were nicely done, he might be able for the moment to induce people to accept it as such.
Motion agreed to and debate adjourned.



TRADE AND INDUSTRY COMMISSION

[Stage Direction]
The house resumed consideration of the motion of Mr. Hanson (York-Sunbury) for the second reading of Bill No. 86. to establish a dominion trade and industry commission.
Mr. W. W. KENNEDY (Winnipeg South Centre):: Mr. Speaker, in discussing Bill No. 86, the purpose of which is to set up a dominion trade and industry commission, 1 hope not to detain the house at length but to confine my remarks to one phase of the principle of the bill, reserving until it has reached the committee stage a discussion of the details.
I should like first, however, to make a few observations of a somewhat personal nature. When speaking last night I made certain references to the official attitude of the opposition towards the implementation of the price spreads commission recommendations, and the hon. member for Hants-Kings (Mr. Ilsley) took exception in these words:
But I do not think the hon. member should have imputed the motives he did to those who express sincere objections to some of the recommendations of the price spreads commission.
I should like to state frankly that when I made my reference to the official attitude of the opposition I was referring to the attitude as reflected by the official financial critical critic of that body, namely the hon. member for Shelburne-Yarmouth (Mr. Ralston). So far as the hon. member for Hants-Kings is concerned-and I might speak more freely if he were not in his seat-I would say that I had not that hon. member in mind. I have known him in this house for some years and during that time have formed the highest admiration of his fairness in dealing with all matters, and of his sincerity as well. In addition I had the pleasure of sitting with him as one of a special committee dealing with price spreads and mass buying, and later for a period of six months as a fellow member of the royal commission. I can say that throughout that time his attitude was the very fairest and most helpful. Time and again when futile arguments arose he displayed the rare ability of putting into precise language amendments disposing of the difficulties. I may add that the relations between all members of the committee and the royal commission throughout the whole time were of the most friendly nature and all cooperated in the greatest possible measure. In fact, whatever merit has been accorded the
3532	COMMONS
Trade Commission-Mr. Kennedy (Winnipeg)
report which as chairman I had the privilege of signing, is fully and freely shared by me with all the members of the commission.
I believe it would' be in order for m to say a word or two concerning the other persons who assisted in the preparation of the report. I refer particularly to the secretariat and the economic advisers. Mr. L. B. Pearson of the Department of External affairs acted as secretary, and Messrs. J. M. Boyer and R. A. Cameron as assistant secretaries. If I may ibe permitted to single out Mr. Pearson I would say that he was no ordinary secretary. I believe all members of the commission will join with me in paying the highest possible tribute to the assistance given to the commission and all members of it by Mr. Pearson. We were further assisted by economic advisers in the persons of Doctor W. J. Couper, Professor A. C. Curtis of Queens University, Doctor A. Rive of the Department of External Affairs, Mr. C. S. A. Ritchie of the same department, and other gentlemen whose names do not occur to me at. the moment but who rendered notable service. Apart from them I was tremendously impressed by the calibre of the civil servants who assisted us, those who occupying positions of trust in various departments were consulted from time to time to assist us in matters being studied by the commission. One and* all rendered most valuable service. I could not conclude these observations without acknowledging the great courtesies extended to the committee and the commission by Doctor Beauchesne, Clerk of the House of Commons, and Major Gregg, Sergeant-at-Arms, in making comfortable quarters available for our use.


William Duff: What about the solicitors?


Donald MacBeth Kennedy: I think perhaps the hon. member would agree with me that without any words of mine they have been suitably rewarded. However, now that the subject has been opened I would add that the commission did appreciate the services rendered by counsel.


William Duff: Did you sign their accounts?
Mr. KENNEDY (Winnipeg) We paid their accounts. I may be reprimanded for this, but I should like to make a personal reference to the Prime Minister (Mr. Bennett). As we were sitting as a royal commission it is probably unnecessary for me to intimate that neither the Prime Minister nor any cabinet members interfered in any way, shape or form with our investigations. My only instructions when handed the order in

council by the Prime Minister on October 29 last were words to this effect: "Kennedy, remember, this is a 'royal1 commission, and remember all the term connotes-British justice. It is to be an investigation into the facts. Go as deep as you like, and1 go as wide as you like, but see that the great and small, rich and poor receive even handed justice." And to the best of my ability and with the wholehearted cooperation of the members of the commission we endeavoured to carry out the traditions of a royal commission.
Now I shall direct some observations to the bill. It would seem that the hon. member for Shellburne-Yannouith (Mr. Ralston) is amused. Well, I hope the hon. member will1 follow me in the phase I am about to discuss, and I trust that I may convince him. I refer to the non-inclusion in. the bill now before the house of regulatory and administrative1 powers of the commission, the power not only to determine what are unfair practices but1 the power to issue orders to cease and desist from such practices. To me it is a matter of considerable satisfaction that in the desire to carry out the recommendations of the commission in that regard, as was indicated this afternoon by the Minister of Trade and Comerce (Mr. Hanson), the government in the original draft did include those clauses to which reference was made this afternoon by the hon. member for East Kootenay (Mr. Stevens), namely the powers to which I have referred. As the Minister of Trade and Commerce has told us, they were dropped only after receiving advice from eminent counsel that such procedure was invalid. For that reason they were dropped from the bill.
I am not going .to labour the law, but speaking on the principle of the bill I do wish to refer to that phase of the matter, placing it on record and possibly indulging the fond hope that if what I submit to-night is not the law, to-morrow it may possibly be the law. The Minister of Trade and Commerce and the legal advisers to the government based their claim of absolute invalidity of the powers referred to upon the privy council case commonly known as the Board of Commerce case. I shall1 not discuss the case in detail but shall draw to the attention of the house only two matters in connection with it. The case is reported in Law Times Reports, new series, volume 126, year 1922, at page 290.
We have spent a lot of time this last day or two discussing the question whether a matter is obviously invalid or whether there is merely a question of doubt as to its

Trade Commissionr-Mr. Kennedy (Winnipeg)
validity. Resting the argument of invalidity, as it is rested, upon the Board of Commerce case I draw this t.o the attention of the house, that that case was on appeal from the Supreme Court of Canada, and that six judges of our own supreme court were not so settled in their minds that the powers referred to were invalid. I merely cite the facts as reported :
As the six judges who sat in the supreme court were equally divided in opinion no judgment was rendered. The Chief Justice and Justices Anglin and Migneault considered that the question raised should he answered in the affirmative, 'while Justices Iddington, Duff and Brodeur thought that the first question should be answered in the negative and that therefore the second question did not arise.
Then as to the subject matter of the decision I would draw the attention of the house t.o this fact, that tha.t decision had to do with price fixing, and I submit that that is of some importance in view of the bill we are considering. That judgment I say had to do with price fixing, but in the report of the royal commission on price spreads we have not recommended price fixing; in fact, we found and so declared, that we believe it unsound, and we studiously avoided recommending any such thing.
Referring to the case report, the order in question was to the effect that certain retail dealers in clothing in the city of Ottawa were prohibited from charging as profits on sales more than a certain percentage of cost which was described as being a fair profit. I bring that to the attention of the house. That case was decided in 1921.
Now that very case has been distinguished in the later case to which I referred yesterday and which I shall again cite, the case of the Proprietary Articles Trade Association et al, appellants, and Attorney General for Canada et al, respondents, which was heard by the privy council in 1931 on appeal from the Supreme Court of Canada (Law Reports Appeal Cases, 1931, page 310). Just let me refer briefly to the judgment of Lord Atkin who delivered judgment on behalf of the committee. He states at page 316:
In determining judicially the distribution of legislative powers between the dominion and the provinces made by the two famous sections, 91 and 92 of the British North America Act, two principles have to be observed: first, the accepted canon of construction as to the general effect of the sections must be maintained. This is that the general powers of legislation for the peace, order and good government of Canada are committed to the dominion parliament, though they are subject to the exclusive powers of legislation committed to the provincial legislatures and enumerated in section 92, but-
I particularly draw 'the attention of the house to this qualification:
-but the provincial powers are themselves qualified in respect of subjects enumerated in section 91 as particular instances of general powers assigned to the dominion. Any matter coming within any of those particular classes of subjects is not to be deemed as coming within the class of matters assigned to the provincial legislatures. This almost reproduces the express words of the sections, and this rule is well settled.
The second principle to which I wish later to refer briefly is this:
The second principle to be observed judicially was expressed by the board in 1881, "It will be a wise course ... to decide each case which arises as best they can, without entering more largely upon an interpretation of the statute than is necessary for the decision of the particular question in hand."
I submit that that second principle is of importance because with the passing of time conditions change, and matters that were at one time purely local in their nature become interprovineial, national, and sometimes even international in their nature. So the privy council, I submit, has wisely established the principle that each case shall be decided on its own merits and in the light of the conditions at the time the case comes before them for adjudication.
Then at the bottom of page 326, and I submit that this is a rather important expression of opinion, Lord Atkin says, and here he distinguishes the Board of Commerce case:
The view that Their Lordships have expressed makes it unnecessary to discuss the further ground upon which the legislation has been supported by reference to the power to legislate under section 91, head 2, for "the regulation of trade and commerce."
Again:
Their Lordships merely propose to disassociate themselves from the construction suggested in argument of a passage in the judgment of the Board of Commerce case under which it was contended that the power to "regulate trade and commerce" could be invoked only in furtherance of a general power which parliament possesses independently of it. No such restriction is properly to be inferred from that judgment. The words of the statute must receive their proper construction where they stand as giving an independent authority to parliament over ^ the particular subject matter . . . they desire to guard themselves from being supposed to lay down that the present legislation should not be supported on that ground.
Again:
If then the legislation in question is authorized under one or other of the head's specifically enumerated in section 91 it is not to the purpose to say that it affects property and civil rights in the provinces. Most of the specific subjects in section 91 do affect property and
3534	COMMONS
Trade Commission-Mr. Kennedy (Winnipeg)
civil rights, but so far as the legislation of parliament in pith and substance is operating within the enumerated powers, there is constitutional authority to interfere with property and civil rights.
My position is this, that if this parliament legislates in respect of matters of trade and commerce and such legislation impinges upon property and civil rights, the mere fact of that impingement is not a bar to the validity of the proposed legislation. What is the principle? The principle is this, that inasmuch as the right to legislate in respect of "trade and commerce" is given in section 91, subsection 2, of the British North America Act to the federal parliament, it has the right to legislate in respect of all matters of trade and commerce where such matters affect the general public interest under the general head of peace, order and good government; and if also it impinges on property and civil rights-and let me point out in passing that there is not a single power given under section 91 to the federal parliament which may not conveivablv in one way or another in the course of legislation impinge upon property and civil rights-[DOT] the fact of such impingement is not a barrier to legislation. It is not a denial of validity. The test is this: whether it is a matter of regulating in respect of trade and commerce, in respect of a matter that is not purely local and that does not merely affect contracts between individuals or localities; if it be a matter that affects the general public interest either for the general good, or to the detriment thereof, then the will of the federal parliament must prevail and the rights of the province must stand aside. I submit that that is the psoition.
Why is it that the federal governments have not more vigorously in times past sought to occupy the field of legislation for which I am now contending? I submit that one reason, and one very obvious reason, is this, that it has been hesitant to break neiw ground and to occupy it and to assert its rights federally by reason of political expediency. I am not referring to any particular administration but to the administrations through the past years. So often when the federal government has sought to legislate in respect of matters that in one phase or another affect individuals in the provinces, the cry of "provincial rights" has been raised. Hon. members know full well the potency of such a cry. Any government hesitates to proceed aggressively with legislation when the question of "provincial rights" is raised, and unless it be clear beyond peradventure that they have the right, the tendency has been not to assume an aggressive attitude. But I

say that when the matter concerns the general wellbeing of the people of this country, political expediency should not stand in the way; the government should be courageous enough to occupy the ground which I submit they are entitled to occupy.
Further, even though it be argued, as it has been, that the federal government has not legislative jurisdiction to deal with what are found to be "unfair" trade practices, it may well be that some of these practices will be federal in their nature. Many of the unfair practices to which the price spreads commission's report refers are matters which affect not merely local dealings but interprovincial and sometimes ini ernational trade. I submit that power to deal effectively therewith should be included in the bill before the house. Assuming that the eminent legal opinions given are correct and that there are other unfair practices which fall within the exclusive jurisdiction of the provinces, the federal government could be enabled to deal therewith through enabling legislation by the provinces. I earnestly suggest to the government that they include in this bill a provision to empower the commission to do those things to which I have referred, to deal with unfair trade practices in an effective way and to issue orders to cease and desist, with the proviso that where any such unfair practice is one which is deemed to fall within the exclusive jurisdiction of the provinces the federal government invite enabling legislation by the provinces. I suggest that such an amendment would fulfil the wishes of the members of the price spreads commission and I ask the government to take it seriously into consideration.
If it be that this parliament has no jurisdiction, as it has been argued, to legislate in respect of matters which were unanimously recognized by the commissioners as being unfair, as being bad, as being against the public interest and as being of a nature which ought to be prohibited; if hon. members recognize such practices to be of a category which should be prohibited; if it be that we have not the power to prohibit such practices in an effective way by legislation, there at once arises the question of the necessary amendments to the British North America Act.
I am fully aware that this suggestion at once raises the problem of the rights of minorities. So far as I am concerned I want to make it very plain that I would be the last one to challenge the rights of minorities as guaranteed to them by the pact of confederation. But in the matter of legislating for

Trade Commission-Mr. Kennedy (Peace River)
trade and commerce and in connection with business dealings between citizens of Canada there cannot be any question of minority rights. I submit that we are then face to face with the question of necessary amendments to the British North America Act.
This act has not been handed down to us as were the commandments to Moses. The British North America Act is a very human document, and being human, it is subject to the frailties of humanity. It was built by men who in their day constructed a document to the best of their knowledge and ability which would govern the affairs of the citizens of Canada, having regard to the rights of the individual provinces, having regard to the division of matters among provincial jurisdictions upon the basis of local interests, and giving to the federal government by section 91 control over those matters which were of general interest.
That document was prepared to serve conditions as they existed in 1867-this is 1935; times have changed. What was provincial, yes, even what was parochial in 1867 may well now be interprovincial, national or even international. The proper measure of distance is not in miles, it is the time taken to go from one point to another. What is distance in 1935 as compared to 1867? In point of time, in 1867 the distance between Montreal and Toronto was as great as the distance to-day between Montreal and Vancouver. Matters of business and trade and commerce which were distinctly local in 1867 are no longer local. In 1867 an industry in Montreal could not conceivably compete with an industry in Vancouver or Winnipeg, but to-day industries in every part of Canada compete directly with industries in the other parts. So when you come to deal with unfair competitive trade practices you are dealing with something which touches the whole of Canada and which is not confined to any particular province.
The British North America Act is not like the ark of the covenant upon which no man could lay a hand. It is not like the laws of the Medes and Persians which legend said could not be altered but which in fact have wholly passed away. The British North America Act has been amended, not once, but more than twenty times. Shall we not amend it again in the public interest? Let us remember that the written constitution of Canada should be the " servant " and not the " master " of the people. Let us remember that that constitution is " man-made " and being manmade it can be man-altered. Let us remember that not bricks and mortar, not tall buildings, but its citizens are the ramparts of the nation;
it is in the interests of our citizens that we should legislate.
I commend to the house the words of John Bright: " The nation in every land dwells in the cottage, and unless the light of your constitution can shine there, unless the beneficence of your legislation is there reflected, believe me, gentlemen, you have yet to learn the principles of statesmanship."


Donald MacBeth Kennedy: Mr. Speaker, after the discussion which we had this afternoon on this bill I do not feel I can add very much to what has been said, but there are a few things I should like to bring to the attention of the house. I shall try to be as brief as possible.
In the first place I want to say that I was impressed with the need of some such organization during the investigation by both the parliamentary committee and the royal commission. It is quite easy to set out the difficulties which such an organization will encounter; it is quite easy to argue that it will not be effective in certain ways; it is quite easy to argue that it will meet with difficulties which it will not be able to deal with as effectively as we should wish. But that is true of every organization. The railway board of this country has a very difficult task. We hear it said quite often that the railway rate situation in Canada and in the United States as well is a crazy patchwork which no one can understand, and yet I venture to say that railway rates as fixed in the United States, and railway rates as fixed in this dominion through the railway board, are much more satisfactory and much fairer than they would be without the railway commission here or the interstate commerce commission in the Lhiited States. And so we must approach the whole problem from the standpoint of whether we can expect by setting up a .commission of this kind to improve conditions as they exist at the present time.
Some have pointed to the additional cost of establishing a commission of this kind. But costs are always justified where you provide greater efficiency; the well paid manager is better than the poorly paid manager if he is an efficient man. That is true always, and if there are in the social system abuses which the dominion trade and industry commission can correct, and I believe there are, then the cost is a small matter.
There is no question about the fact that there is a certain amount of regulation of business now. Those who cry against inter-
3536	COMMONS
Trade Commission-Mr. Kennedy (Peace River)
ference with business are actually crying out in favour of the interference that now prevails. I think it was very well established in the evidence that some organizations in this country were able to buy commodities from manufacturers and others at prices that would put the manufacturers out of business unless they got higher prices from someone else. H. G. Wells, in his book, Work, Wealth and Happiness of Mankind, points out that at one time the Standard Oil Company in the United States was able to do that very thing in connection with the railways. Whether it is done deliberately or not, the result is a differential between the price at which the mass buyer gets his commodities and the price at which his competitor obtains his. And so the question arises whether or not the spread is fair. I think it is quite evident, and it was generally agreed by the commission, that the spread was unfair; and the question then came up whether or not we ought to have a deliberate attempt to have regulation through the government. If the mass buyer is in a position to exact unfair discounts, so that the manufacturer or the other party who is selling to him must charge other retailers a higher price relatively, then I think we have something that justifies the government in stepping in. If the regulation is there now, if there is a partial regulation, if it is onesided, I cannot see how we can avoid the responsibility of trying to establish effective and fair regulation in the interests of all classes of the community. Therefore I favour the establishment of a commission for that reason. That is one reason at least.
I wish to refer to the powers that are supposed to be provided in the bill for the federal trade and industry commission, and in this connection I would point to some of the arguments in the minority report as signed by three members of the commission. It is stated in this report that desirable regulation is that of the law of supply and demand. At page 276 there appears the following:
Secondly, in parts of the main report there is a disposition to regard prices as being easily controllable by regulative measures of one sort or another,^ such as marketing schemes, regulation of business practices of large corporations, and control of corporate profits. We have been impressed time and again by the evidence presented before the commission that such regulative measures have, and can have, only a very slight effect relatively upon the principle of supply and demand. Our point may be illustrated by a brief reference to the tobacco and live stock industries.
Then there is a paragraph dealing with the tobacco industry. Briefly, it points nut that because of the rise in the price of tobacco in 
the United States we had a demand for tobacco in Canada, and that this was really what raised the price. I submit however that while there is an element of truth in that statement, there was in the United States a deliberate attempt to deal with production and to raise price levels just as we had in the dominion. I have here a pamphlet entitled Agricultural Adjustment, a .report of the administration of the Agricultural Adjustment Act, M.ay, 1933 to February 1934, issued by the United States Department of Agriculture. At page 74 I find the following:
Reduction of Production
Of the estimated tobacco acreage planted in these districts in 1933, about 12,400 acres-or around 15 per cent-were taken out of production under the terms of the contracts signed by growers. Those who participated in the program took out of production, on the average, about one-third of the tobacco which they planted in 1933. Figures showing the extent of the sign-up and the amount of acreage taken out of production are shown in table Tl.
The plan for adjusting production was announced during the 1933 planting season and many growers, in anticipation of signing contracts, refrained from planting the full intended tobacco acreage. Growers of these types reported on March 1, 1933, intentions to plant 91,200 acres. The acreage harvested in 1933 was about 67.400 acres. This represents a reduction of 23,900 acres, or 26 per cent, from the acreage growers intended to plant in 1933.
The reduction from 1932 was 50,900 acres, or 43 per cent.


Edward James Young: Is that over the whole United States?


Donald MacBeth Kennedy: This is
a report covering the tobacco industry, and this refers to one type of tobacco, cigar tobacco. Now as to flue cured1 tobacco:
In July, 1933, the administration began to formulate plans for a program with respect to flue-cured tobacco.. In its development, all the available facts with respect to production, consumption, and world carry-over were taken into consideration. It early became evident that any plan to increase the price of flue-cured' tobacco must be based upon a control of production, because the production of this commodity in excess of consumption was responsible, in a large measure, for the low-rice paid to the growers. Surplus stocks had egun to accumulate as early as 1929, and by
1932	they were the largest on record. In 1931 the flue-cured crop totalled 665,000,000 pounds, and sold for an average of 8J cents per pound. In 1932 the crop totalled 374.000,000 pounds and sold for an average of 11 -6 cents per pound. On July 1 the 1933 crop was estimated at 591,000.000 pounds, -which was about equal to the estimated annual world consumption of this tobacco. But as the 1933 crop grew toward maturity it became increasingly evident that it would be a large crop, well above the annual consumption. (The December estimate of the
1933	production was 708,000,000 pounds).

Trade Commission-Mr. Kennedy (Peace River)
The result was that an attempt was made to reduce acreage.
A tentative contract was drawn up and offered to the growers, under the terms of which they would agree to reduce their production in 1934 and 1935, as required by the Secretary of Agriculture, by an amount not exceeding thirty per cent of the average of the years 1931, 1932 and 1933. Through the cooperation of farmers, warehousemen, state and county officials, business men and professional men the campaign was rushed to a successful conclusion, and within a week more than ninety per cent of all flue-cured tobacco growers had signed the tentative contract.
Armed with these agreements on the part of farmers to control production, negotiations were immediately begun by the administration with the buying interests to obtain an increase in the prices to be paid for the 1933 crop. It was believed that with a knowledge that the 1934 and 1935 crops would be reduced below the level of consumption, thus liquidating the surplus produced in 1933, the buyers would be willing to enter into an agreement to make a material advance in their prices.
A few sections follow dealing with the agreement, and then it continues:
Following the inauguration of the adjustment program prices materially advanced on the flue-cured' tobacco markets. During the month of November the daily average prices for a number of individual markets frequently exceeded twenty cents per pound. As a result of this price advance it is expected that flue-cured tobacco growers will receive for their 1933 crop on the market about $39,000,000 more than they otherwise would have received. The estimated total value of the 1933 crop is $115,000,000 compared with $44,000,000 for the 1932 crop and $56,000,000 for the 1931 crop.
This tremendous increase in total income from flue-cured tobacco has given a great stimulus to business in the flue-cured area and has brought about renewed hope, enthusiasm and optimism on the part of tobacco growers. Many old debts and mortgages are being paid off. trade in every line has been stimulated, and the flow of commerce in many channels has been increased. All this has worked toward the attainment of the objectives of the Agricultural Adjustment Act by tending to give flue-cured tobacco a purchasing power equivalent to its purchasing power during the base period from August, 1919, to July, 1929.
My point is simply this, that the attempts in Canada to reduce acreage and to market the crop through an organization had an effect similar to the effect -of the same policies in the United States-deliberate interference, if you like, with supply in an attempt to give the producers, who otherwise -could not get a reasonable living out of it something like a fair standard of living. I think we must admit that while the effort in the United States had some effect in Canada, if the policy is fair in -one country and resulted in the raising of prices to a reasonable level, it is proper that we should apply it in another
country and that we should expect the same results. I have dealt before with live stock, and I d'o not think there is any need to a-rgue that. The same policy was followed to some extent in the United States with regard to cattle. It is described in this volume, but I do not think I need read it. My point is that it cannot be argued that the law of supply and demand, as we have used that term, is the only rule that will affect prices, in view of the experiments in the United States -and Canada with regard to primary commodities.
It is said that there are great dangers if we give this federal trade commission power to ratify agreements, when the commission is unanimously of the opinion tha-t wasteful or demoralizing competition exists in a specific industry. Human beings have, of course, a tremendous range of adaptability, but we have no right to expect people to deliver commodities to the markets of the world indefinitely if the price is much below the cost of production. I think every effort made by the Dominion of Canada to raise prices to the primary producer, even if it cost the treasury some money, has been justified, because I do n-ot think this country has any right to expect its primary producers to sell commodities at the ruinous levels at which they stood through 1932. It is in the national interest -as well as a matter of simple justice that some attempt should be made to raise prices. If that is not so, then I submit that minimum wage laws cannot be justified, but I do not think it requires arguing to-day that minimum wage laws are justified; that is generally agreed. If it is fair that farmers and labour should have consideration of that kind why should not the same rule apply to industry? Why should we be afraid to give a commission power, if they find that an industry is selling its product at ruinous levels, to make a recommendation to the governor in council to stabilize prices as suggested in this bill? I will admit that there are dangers. I will admit that there are problems. But I do not know any reason why an industry that has had to pay -its work people less than a living wage simply because the prices of the products were at ruinous levels should not have the right to present its case for assistance towards stabilization. Of course stabilization could be at too high a level, which might be unreasonable and unfair to the public. But I do not think that danger is very great. I would be willing to take the chance, because the hardships that some industries and agriculture and the labouring people of this country have been through in
3538	COMMONS
Trade Commission-Mr. Kennedy (Peace River)
the last four years require definite and specific remedy, and we ought to be willing to take some chance in an attempt to work out something -better.
The argument has been advanced that every attempt to increase prices makes it all the more difficult for the consumer to buy. Well, that just d'ependis on what prices are increased. I believe that when prices are ruinously low to the producer it is just as much a problem a-s when they are ruinously high to the consumer, and1 this commission and every other government agency, so far as it has deliberative power, must aim at prices that* as far as it is possible to ascertain, are fair as between -the producers and the consumers. After all there is no such individual as a consumer or a producer; people are both producers and consumers, and if we can reach prices that are fair as between the two then in my judgment we will reach the best possible solution.
It has been suggested here that every other attempt at regulation should be cast aside and that our chief aim should be a lowering of tariffs to promote foreign competition. As between the various retail merchants of this country, mass buyers and small individual stores, I do not see that the lowering or increasing of the tariff would have a great deal of effect. If it did have an effect probably it would1 fav-our the people who have -been in the most favourable position during these last few years, the mass buyers.
There is just one other thing I should like to say, having listened to the arguments of various witnesses who appeared before the price spreads committee and the commission. If their representations were fair, as I think they were in most cases; if they understood what they were talking about, and1 certainly a great many of the witnesses impressed me as knowing what they were talking about, the problems of trade and industry in Canada appear to me to be such that I do not believe it is too much to ask that another organization be set up in order to deal with them. I do not think the tariff board can take care of the duties they have at the present time and deal effectively with the problems that were presented to the price spreads and mass buying commission, and I believe -the government ought to consider the advisability of establishing a commission separate from the tariff board.


Edward James Young: Mr. Speaker, if I understood the argument of the hon. gentleman who has just taken his seat (Mr. Kennedy, Peace River) it was to this effect, that because the United States govern-

ment, by taking vast sums of money out of the treasury of that country and paying it to the farmers for not growing tobacco, were able to create an artificial scarcity of tobacco in that country and thereby raise the price, it follows that the Canadian marketing act, which we passed in this house a year or more ago, was responsible for the increased price of flue cured tobacco in Ontario last fall.


Donald MacBeth Kennedy: I should
like to say that I did not say that at all.


Edward James Young: My hon. friend says he did
not say that. I hope he repudiates the idea.


Donald MacBeth Kennedy: I do not.


Edward James Young: Then my hon. friend meant it. Now let us see what happened to the price of tobacco in Ontario last season. Prior to that there was a surplus of flue cured tobacco in the hands of the farmers of Ontario, amounting to some ten million pounds. In addition to that, one company, the Imperial Tobacco Company, the year previously had purchased some five -million pounds of tobacco more than its normal requirements. That meant fifteen million pounds of tobacco in Canada more than ordinarily we would require, with a crop coming on. In the fall of 1933 the price fell to about 17 cents a pound, I think, and prospects were that the price would not be very good the next year. The manufacturers and the growers got together and tried to agree on a price; I think they did agree on a price of 27 cents a pound, but some of the manufacturers refused to sign the agreement. Later a scheme was organized under the marketing act and a board was set up. That board set the price of tobacco-and I say this -with all deference to my hon. friend from Shelburne-Yarmouth (Mr. Ralston), who says boards have no right to set prices-by some means or other, for the year, at 24J or 25 cents per pou-nd. That price was agreed upon and all the tobacco was used up; all the tobacco was sold at that price, not only the crop of that year but the carry over from the previous year. To whom was it sold? It was not sold to consumers or manufacturers in Canada. British buyers of tobacco, who ordinarily go to Virginia for their flue cured tobacco, found that they could buy tobacco in Canada for 25 cents per pound while the price for the same tobacco in the United States was 32 cents per pound, so they came to Canada and bought their supplies. That was why there was an advance in the price of tobacco last fall. It was not due to the marketing act; it was due to the artificial scarcity created by the United States government at enormous cost to the United States treasury.

Trade Commission-Mr. Young
Now my hon. friend says that we should use money out of the treasury in order to raise the prices of those commodities that are being sold at a loss in order that all our people should get a fair price for their products.


Donald MacBeth Kennedy: No, I
did not say that.


Edward James Young: My hon. friend left that
impression on my mind. I think he did say that there was justification for taking money out of the treasury in order to increase prices.


Donald MacBeth Kennedy: No, I did not say that.


Edward James Young: Then I will leave it to
Hansard.


Donald MacBeth Kennedy: I said
there was justification for what the United States government did in connection with the control of acreage.


Edward James Young: My hon. friend said there was justification for taking money out of the treasury, anyway. I think my hon. friend said that.


Donald MacBeth Kennedy: I did not say that.


Edward James Young: Then we will forget all about the hon. gentleman and we will start at this point: My contention is that in fixing our price structure in Canada-that is, the prices at which commodities are sold-we should start- with the world prices of our export commodities; that is the price we cannot control, the price the world is willing to pay us for the things we export. Then our policy should1 ibe to bring our domestic prices in line with those export prices. If we do that we put those of our citizens who are engaged in the business of producing commodities for export in a position to buy other commodities in this country. In that way they give employment to those producing those other commodities that w; buy on the same level and it becomes possible to exchange labour, one class with another. But (when you maintain domestic prices at a higher level than export prices you put a large section of our people out of 'the taarket; they cannot buy the products of their fellow citizens and they axe not in a position to exchange their labour for the labour of others, and in consequence other people are idle because they cannot sell the product of their labour. That is what leads to unemployment and distress generally.
This evening I listened to the hon. member for Winnipeg South Centre (Mr. Kennedy), 92582-225
and as he argued I could not help but think of some of the arguments used yesterday in support of Bill No. 73. He contended we ought to pass this legislation because we have power to do so. I do not think we should be so much concerned with the question whether or not we have the power. The first thing we should decide upon is whether or not the legislation is desirable. As he argued in that way I was forcibly reminded of the old saying that no man can safely be entrusted with power except the man who does not want it. When you hear a man arguing that we should exercise power because we have it, then I say he is not a safe man to follow or to be entrusted with power.
Witnesses appearing before the price spreads commission were of all sorts and classes. They came to us with their grievances; we listened to them and then we asked what remedies they had to suggest. In nearly every case the 'suggested remedy was the same. They all1 said, "Eliminate our competitors, and we will be all right." That is all they asked-a monopoly in their own particular lines of business. The stockyards operators ca.me before us and asked us to eliminate the competition of the packing houses and thereby force the farmers to send all their stock to the stockyard, so that in the end the stockyards would have the handling of it. The manufacturers came to us and asked not only monopolistic powers but what they called self-regulation in industry. They asked power to come together and form agreements, and requested that in such agreements they be allowed to determine who may be permitted to enter that business in Canada, at what prices they might sell, how much they might produce, and so on. The small merchants came before us and asked for the elimination of larger competitors. Even the trade unions were heard, and what did they ask? They asked not the right to join any union they wished, but the right to put competing unions out of business. Every person wants monopoly, yet inherent in every man is a distrust of monopoly. We are all afraid of it, though we all feel it would be all right if we were in on it. The distrust of monopolies is well founded; it is based on the experience of the human race and, I might say, on self knowledge. Our experience has been that whenever we are in the grip of a monopoly we suffer for it. In the 'bottom of our hearts we know what we would d'o if we had a monopoly, and that is why we do not want any other person to have one.



Trade Commission-Mr. Young


Mr. LOUCKS:: That is quite a confession.


Edward James Young: Yes, but we are all the same. The majority of the commission do not believe in monopolies, but they have argued in this way: We have a certain number of monopolies, and since we cannot do anything else with them we had better regulate them. That is the effect of the recommendation they made to the government. They recommended that existing monopolies should be sanctioned and regulated. The legislation brought down by the government provides for the sanctioning of monopoly but leaves out the other part, namely the regulation of it. I doubt if a single member of the commission would have signed a recommendation to sanction a monopoly without another provision for the regulating of it.
The objections to monopolies are twofold. First they oppress the consuming public. Having the whole market to themselves and fearing no competitors they charge their own prices, dictate their own terms and become as arrogant as you please. The second objection is that a monopoly always leads to extravagance and inefficiency. Those are the two great objections. No act of parliament can provide against the second effect. The proposal in the recommendations of the commission was for the regulation of monopolies, but all we can regulate in regard to monopolies are their dealings with the public. We may say to a monopoly, "You must pay certain wages; you must work certain hours; you must produce at a certain rate and you must charge certain prices." We might do all that, but no commission will ever be set up competent to go into the facts in connection with a monopoly and determine whether or not the factory in question was run efficiently. Extravagance and inefficiency will grow up, develop and keep on developing so long as a monopoly exists. It is impossible to regulate that feature out of it. The only regulation which will force efficiency upon a monopoly is that of competition. The spur of a competitor will force it to be efficient to a degree a commission or regulation could never attain.
Then, in regard to unfair trade practices, will anybody tell me what is fair and what is unfair in business? This afternoon the hon. member for Hants-Kings (Mr. Ilsley) pointed out that there were two kinds of unfair practices, those which were ethically unfair and those which were economically unfair. We may all decide that which is ethically unfair, but already we have laws against such practices. If those laws are not sufficient, let us make them sufficient. But

when we come down to a determination of what is economically unfair we have an entirely different problem.
Let us go back to a consideration of tobacco. Complaints were made to the commission that the Imperial Tobacco Company were guilty of unfair trade practices in that they were not paying the farmer a sufficient price for tobacco. But that was not the only complaint made against the Imperial Tobacco Company. That was the complaint of the tobacco growers, undoubtedly, but it was not the complaint of the small manufacturer. The small tobacco manufacturers came before us and complained that they could not pay the price the Imperial Tobacco Company was paying. Their complaint was that the price Was too high. Now, who will decide what is fair? Would a commission decide it? Would it not be better to have it decided by economic forces? Is it fair for a man in business to pass on any advantage he has gained from his higher efficiency or for any other reason? On the other hand, would it be unfair for him to pass that advantage on to his customer or to the consuming public? The mass buyer has a certain advantage over the small buyer, that of buying in large quantities. Because of his larger orders and because he pays cash he can buy cheaper than the small buyer. But he is under certain disadvantages, too. Being a mass buyer and operating in a large way he has to be more efficient than the small buyer, and efficiency costs money. He has to maintain a staff of supervisors and efficiency experts to keep all kinds of checks on his employees. That is an expensive procedure. Then, too, he lacks personal contact with his customers, something which the small merchant has and can maintain. There is a class of individual retail merchants of whom the mass buyer is afraid and with whom the mass buyer cannot compete. I refer to the individual merchant who will adopt the practices of chain stores and mass buyers. That is, he will be one who will clean up his premises, handle fresh goods, keep them moving and give as good service to his customers as the larger stores may give. That man, with the advantages I have indicated, plus personal contact with his customers, can back the mass buyer off the map. Not long ago I met a gentleman who told me that for twenty years he had sold shoes right across the road from one of the largest department stores in this country. He said, "If I could have got closer to them, I would have done so." I said, "How did you do it?" He replied, "By personal contact with my customers." He had the advantage of personal contact; the large store had the advantage of

Trade Commission-Mr. Young
a larger organization. I have no doubt that each was passing on to his customers the advantage he gained, and who would say that they were unfair in doing it?
I ask this question: Should a manufacturer be compelled to keep step with his competitors in all things? Or, if he finds a way of improving his methods and of producing and marketing his goods cheaper than any other person, should he not be required to pass on that advantage to the public-or at least should he not be allowed to do it? Let us take the example of a manufacturer who produces, we will say, $2,000 worth of goods in one week, and in the production of those goods he pays out in wages $1,000. Let us suppose that by greater efficiency, by installing new machinery or something of that sort, he can reduce his wage bill to $500. Should he not be allowed to sell his goods to the public $500 cheaper? If not, this is what happens. He dismisses just that many men, turns them out on the street without work and without wages, and puts that $500 in his pocket. The result is that these men are out of work and you have technological unemployment. Now if instead of requiring that man to put that extra profit in his pocket, if you required or even if you permitted him to pass it on to his customers in the form of lower prices, it would mean that 8500 would be left in the pockets of his customers with which they would buy other goods, and the production of these other goods would pay wages to just as many men as were displaced by the labour saving devices he had installed in that factory. Yet this legislation would forbid a man to undersell his competitor simply because he could produce at a price which they could not, and the result would be a greatly increased measure of unemployment.


Mr. BAKER:: From his experience in
manufacturing would the hon. member tell us how a manufacturer could cut down his wage bill from $1,000 to $500 without taking it out of his employees?


Edward James Young: I have just explained that.


Richard Langton Baker: You have not had a large experience in manufacturing.


Edward James Young: Perhaps my hon. friend could tell us whether stocking manufacturers do not sell stockings to-day much cheaper than they did ten years ago.


Richard Langton Baker: You cannot cut down your wages from $1,000 to $500 without taking it right out of your employees.


Edward James Young: It is proposed in this bill, Mr. Speaker, to regulate monopolies. My hon. friend from Hants-Kings said this afternoon that he did not think the Combines Investigation Act would be as well enforced under this legislation as it has been in the past. One big advantage in the enforcement of the Combines Investigation Act-as it has been done in the past has been that when would-be monopolists came to the registrar, and they came repeatedly, and asked, "Can we do this or that under the law as it stands?" he refused to tell them what they could or could not do. He would not encourage them to do a thing and afterwards have them say: Well, you told us we could do it. But this legislation proposes to do that very thing. It proposes to sanction any kind of agreement these people come along with, and in that way we shall encourage them to come along with all sorts of schemes, and you will have more combines than ever. The proper way to regulate monopolies, it seems to me, is by competition. Expose your monopolist to ruthless competition, and if he cannot compete, so much the worse for him; you have broken the monopoly.


Mr. LUCHKOVTOH:: How can the small retailer compete with the monopoly?


Edward James Young: I have just answered that question, if my hon. friend had listened. We found in the investigation that every one of these monopolies had grown up under the shelter of a protective tariff, and without that tariff they could not live. When you have a monopoly producing any commodity in this country, and then you have competition entering the country from some unexpected source, how long is it until that monopoly is agitating for increased tariff protection, for some kind of government action to shut out the competing product?


Richard Langton Baker: Without the tariff there
would be tens of thousands more out of employment than there are to-day.


Mr. IRVINE:: ' How would you prevent competition from leading to monopoly? That is what has happened.


Edward James Young: By competition. No. that is not what has happened. A monopoly is created by eliminating competition. When the tariff is built up around this country it is a simple matter then, with outside competition shut out, for the domestic manufacturers to get together and form an agreement

Trade Commission-Mr. Woodsworth
or a combine or some sort of monopoly. Take down your tariff walls, let competition come in, and see how long that arrangement or combine will last.


Richard Langton Baker: How many more would we have on the dole?


Edward James Young: We should not have as many on the dole. If my hon. friend wants to know the cause of the dole, let him look at the tariff policy of the present government.


James Shaver Woodsworth: Mr. Speaker this trade and
industry commission for which the bill provides is really the means suggested! of exercising government control over industry. I note that in the report of the royal commission on price spreads the methods of public control are enumerated, with brief comments made on each class of control. They are (a) the protection of private economic activity; (b) the promotion of private economic activity; (c) the encouragement of monopoly; (d) licensing; (e) the protection of the public from the excesses of competition; (f) the prohibition of monopoly and maintenance of compulsory competition; (g) government acceptance of monopoly with regulation; (h) government toleration of monopolistic or quasi-monopolistie industrial combinations; (i) public ownership and operation. So far we have heard a good deal about regulation, something further with regard to competition of the very freest kind, but there has been very little said with regard to this latter mode of controlling the situation by public ownership and operation. The report says, if I might read a paragraph, at page 251:
The extreme example of government intervention is where the government engages lirectly in the ownership and operation of business enterprise. Government ownership and operation of postal services, schools, and roads provide some of the oldest examples. In violation of extreme individualistic theories, governments neai'ly everywhere have taken these enterprises out of private hands, sometimes simply because private enterprise could not profitably supply satisfactory service, sometimes because it did not operate to produce maximum social welfare. Public ownership for a variety of reasons-to provide a com-jretitive check on private enterprise, to supplement ineffective regulations of monopoly, to control consumption, to provide revenue-has continued to expand until a world survey of such ownership to-day would include every type of economic activity. In Canada governments are directly engaged in such businesses as railways, steamships, street railways, telegraphs, telephones, radio, electric light and power, water, gas, stockyards, grain elevators, public markets, liquor sales, banking and insurance.

From my standpoint it seems rather unfortunate that the commission should not have given much greater attention to this means of regulation than it has done. For some reason or other, possibly because of the composition of the commission itself, it has chosen the path of regulation. It has rejected uncontrolled competition such as has been suggested by the hon. member for Weybum (Mr. Young) and has chosen the method of state regulation. This bill which is now before us is the government's method for meeting the problem. This means that some of us who do not have very great faith in this method are placed in a rather awkward position when dealing with a bill of this kind. We may possibly vote in favour of it as being a small step in the recognition of the necessity for an ordered arrangement in society, but at the same time we recognize clearly that it is bound to be ineffective. We hear a good deal about regulation and we hear a good deal about unfair practices, but those of us who have in any degree adopted the socialistic analysis of society believe that our system as such is essentially unfair. We cannot hope that by merely regulating such practices we shall arrive at anything like an equitable state of society. Perhaps I could illustrate by refer-ing to the age of chattel slavery. It might have been very well in those days to insist that there should be regulations under which the slaves should not be worked more than twelve or fifteen hours a day, or under which the slaves should be housed somewhat decently; there might have been regulations to prevent the slave owners from whipping their slaves but the fact is that the institution of slavery gradually came to be recognized as economically unsound and ethically unjustifiable. It took a civil war to abolish slavery in the United States. In the West Indies, largely through the efforts of Mr. Wilberforce, slavery as a system was done away with through government action, the slave owners being compensated to a certain extent for the loss of their slaves.
Some of us believe that the present system of capitalism under which a comparatively small number of people own and control the greater part of the production machinery of this country is essentially wrong in its very nature. It is becoming, like slavery, economically unsound and ethically unjustifiable. Under these conditions we cannot believe that petty regulations will solve the problem. The commission to 'be set up may do away with certain of the more gross forms of unfair practices; the amendments to the criminal

Trade Commission-Mr. Woodsworth
code proposed last night may further advance the cause by making actually criminal certain of these unfair practices; I submit that that is all to the good, but it does not touch the vital problem with wdiich we are faced under this system of capitalism.
During the investigations of the committee and later of the commission on price spreads an attack was made particularly on the departmental and chain stores. Very great solicitude was expressed for the smaller merchants.
I confess that I feel a great deal of sympathy for the small business men who are being gradually crowded to the wall. In my judgment they are the victims of that competition which has been lauded so by the hon. member for Weyburn. Competition has been given free rein with the result that the larger merchant and possibly the more efficient or in some cases the more unscrupulous merchant has been able to crowd out his less efficient or more scrupulous opponent.
I would point out that after all the organization of business into larger units has meant an added efficiency, at least up to a certain point. The farmers of western Canada patronize the large departmental stores because they find that these stores give services which they could not receive from the small local dealers. I have lived on the prairies and I know something of conditions from the early pioneer days. I have great sympathy for the local man in the small town who has helped to build up his community, but at the same time I recognize that under the competitive system referred to by the hon. member for Weyburn there are services which cannot very well be provided by the local man. It seems to me that by emphasizing the necessity of keeping the small business alive we are, as it were, trying to turn back the clock.
In a general way I should say that what is happening to-day to the small business man is closely paralleled by what happened to the labouring man one hundred and fifty years ago. I do not know why it is, but in our schools even to-day comparatively little emphasis is laid upon the profound effect of what is known as the industrial revolution which occurred in Great Britain, about a hundred and fifty years ago. Before that time the handscraftsman was supplying the needs of his oiwn immediate neighbours. There was a certain amount of competition between individual workmen. But the factory was set up with its large machinery and the small man could not begin to compete with the larger organization. These small craftsmen had to leave their little village workshops to go to work in the factories, which

meant a complete revolution in the industrial life of Great Britain. I have not the time to outline the economic, the social and the political changes which occurred as a result of that revolution, but I would point out bhat instead of free competition there was organized production; instead of each individual workingman being, as we say, his own boss, he became a wage earner. The owner of the factory determined largely the conditions of work, and owning the tools of production he was able to retain whatever profits were made, the workingman receiving only his wage, large or small. The abominable conditions which existed at that time led gradually to the enactment of the factory acts which ameliorated somewhat the conditions of the labouring man. Later on there was a development of trade unionism which helped materially to better the condition of labour.
In my judgment the business man to-day is very much in the position in which the industrial worker was at the time of the industrial revaluation. We have the organization of industry which is something like a concentration of effort within the walls of a factory. In many ways a large departmental store is like a factory and many of the smaller business men have had to desert their small businesses to work as departmental heads in such concerns as Eaton's. Instead of making their own profits, running their own businesses, they are simply hired men in the large departmental stores. Looking at *things in the large way, it would seem as if this concentration in a comparatively few hands was an almost inevitable development and that the change that is taking place in our merchandising is very closely parallel to the change that took place in industrial life at an earlier period.
To-day we must recognize the large number of people who are living under the wages system. In the price spreads report, in the chapter Labour and Wages, I note o-n page 105 the following statement:
Two-thirds (2.565,000) of the total working population of Canada (3,923,000) are wage-earners. If agriculture, in which over a million people are employed chiefly as proprietors, were eliminated, the proportion would be raised to nearly five-sixths.
That is to say, practically five-sixths of the population are to-day wmrking, not under the free system of competition but under a system in which they are merely wage earners, forming a part of the large industrial organization. All the discussion that we have ad, and practically all the ground that is being covered by this bill, concerns directly at best a very small proportion of the population of
3544	COMMONS
Trade Commission-Mr. Woodsworth
Canada, those people that are still in the stage of small industry, in the small business stage, who control or think they control their own' affairs and are still in the competitive era. But the vast mass of the people to-day are no longer living under conditions of competition; they are wage earners, employees in great concerns in the conduct of which they have very little voice indeed.
A very similar process, although varying somewhat in detail, has taken place in recent years in connection with the farming industry. The farmer is still nominally his own master; he is still nominally a proprietor; but in effect ait least two-thirds of the farmers of the west are so heavily under mortgage that they are practically under the control of the mortgage companies. They work long hours, they have to a considerable extent control over the details of their own work; but the mortgage companies step in and have the first claim on what they produce. That development has gone to such an extent that on a great many farms the mortgage companies and the banks are beginning to dictate the conditions under which even the farmer must carry on 'his work. Certainly when the farmer steps off his farm he is immediately brought into this larger organized sphere. He cannot get his implements unless they pass through a large number of hands, and so he has to deal with a certain monopoly of agricultural implements and all that sort of thing. He cannot bny his household necessities without coming in contact with modem industry with its monopolistic practices. He cannot sell ais grain without coming in contact with the larger world outside. The proposal to establish a wheat board in Canada is simply the recognition of and the response to this new state of affairs which has developed, which means that we can no longer have free competition as between individual farmer and individual farmer, but rather that we must have some sort of control over marketing or processing or whatever it may be. We cannot go. back to the period visualized by one or two members of the house, the old free individualistic society in which our grandfathers lived.
I regret indeed that the committee, owing to the terms of reference, could not make an investigation into t'he larger financial concerns as we have them in Canada. The hon. member for East Kootenay (Mr. Stevens) this afternoon referred to that matter, as he has been referring to it in a number of his more recent public speeches. In my opinion, concentration of finance in the hands of a comparatively small group of people is the most serious

aspect of this present development. In the old days each man performed a whole round of activities for himself; he made his goods, he sold his goods, he financed the transaction. But gradually there has come about specialization with division of work, so that to-day one group of people manufacture goods, a second group do the merchandising in various ways and a third group of people do the financing; and we 'have developed to that stage where instead of the producer being the main factor or the distributor being the most important individual, as has been the case until recent years, the financier is the most important of the three. The producer can produce only as he can secure loans from the financial people, and the distributor can carry on only as he too can secure loans from them; and so today the financial people are in the very heart of the system.


Richard Langton Baker: Is the hon. gentleman's statement quite correct?


James Shaver Woodsworth: I hope so; it is my point of view at any rate.


Richard Langton Baker: There are producers who distribute and finance their own transactions.


James Shaver Woodsworth: I am speaking of
the general tendency, and I hope the hon. member will permit me to advance my argument.


Richard Langton Baker: You are making a statement that is not fair.


James Shaver Woodsworth: It is my opinion.


Richard Langton Baker: Well, it is unfounded.


James Shaver Woodsworth: My opinion is that, looking at the present trend, the financial people occupy the central, dominating position in the whole economic structure; and as the hon. member for East Kootenay remarked today, it is a comparatively small number of people who practically control the. whole situation. I think it must be six or eight years since in this house I placed on Hansard the names of the directors of our banks and other financial institutions and showed how through a system of interlocking directorates a few men control the greater part of the economic life of this country.
Some of us for years past have been urging that the control of finance is essential if we are really to control the other phases of our economic life. I still believe that. I do not think we can get very far until the country itself controls its currency and credit, its financial instruments. So I cannot be very hopeful of the efficacy of this legislation until such time as the state on its own behalf takes over

Trade Commission-Mr. Woodsworlh
eontrol of the currency and credit of this Country. I do not intend to go further into that matter to-night; we in this corner have tried to emphasize that again and again. We may vote for the bill in the hope that it may bring about some amelioration in conditions and may do away with some of the more gross forms of unfair practices. At the same time, since it has not undertaken to control the financial mainspring of our economic life I cannot see that it is likely to solve any of our major problems.
Regulation then from my point of view cannot be effective. The only thing that can be effective is .a change in our existing system. We believe that instead of a system built on the basis of profit we must have a system that is primarily designed, to supply the needs of the people. No other system will prove effective. This proposed; legislation does nothing in regard to such a change of system. It is possible that it will provide machinery which later on may be used by an administration having the social ideal, but we cannot very well hope that it will produce very great results as long as the machinery is in the hands of those who still believe in the profit .motive and in the present capitalistic system.
I know that it is difficult to impress upon Canadians the necessity for a new economic system. We are most of us children of the pioneers. Most of us have a good deal of the old pioneer psychology. Our fathers came to this country several generations ago and carved out for themselves homes in the wilderness; there was work for all who wanted to work, and there were unlimited opportunities for expanding their business affaire. That was the era of individualism, and undoubtedly it developed a great many excellent qualities in the people of that day. But we have passed beyond that stage. One of the major difficulties with us to-day is that, living in this complex state of society, we still adhere to the old traditions. Take our Slogan-"Competition the life of trade"; did we not all write that in our copy books? We were brought up to believe it.


An hon. MEMBER:: Some still believe it.


James Shaver Woodsworth: Yes, a few people who belong to the earlier day still believe it and still venture to say it. But they are anachronisms antique specimens, and we must not bother very much with them. The trouble is there are a good many of them lying around.


Edward James Young: Do you mean lying?


James Shaver Woodsworth: Yes, if you insist on the term, because they necessarily misrepresent the entire situation. We cannot have that free competition when we have these great combinations .that exist to-day. Take the five-sixths of the population to which the price spreads report refers; they know nothing about that free competition. They are simply wage earners taking the wages handed to them, unless they can combine in sufficient strength to force a little more. They know nothing about free competition in production. We .must learn to adapt our policies to the new age in which we live. I wonder if I may give once more an illustration that is a favourite of mine; I feel sure I must have given it in this house before-


Mr. GEARY:: We always like to hear it.


James Shaver Woodsworth: All right. I refer to the traffic regulations we have .to-day. In the old days of the horse and buggy we could drive as we pleased, here, there and yonder. But in our modern cities with their congested traffic it has become absolutely impossible to go as we please. We have our traffic policemen, our traffic regulations, lights and so on, and we have to obey them. I do not see how we can avoid it. Even an individualist of the old school like the hon. member for Weyiburn (Mr. Young) must conform to the traffic regulations.


Edward James Young: But that is no reason why we should travel in a chain gang.


James Shaver Woodsworth: You can talk about a chain gang, but we all remember that in the streets the automobiles wait until the light changes and then almost as in a chain gang go forward together until they are stopped again. I think that is a close parallel to the situation we face in dealing with legislation of this kind. In the old days we had more or less free competition which developed certain qualities in the individual that were good1; it helped to develop the present type of economic life. But it also developed a great many abuses and caused an enormous amount of suffering. Now that accidents have become so frequent and the traffic is so badly congested, surely the time has come that we should in some intelligent way devise regulations that will enable us to get on with the business of the world. That I take it is what we are trying to do to a limited extent by this bill. Gradually we must get rid of that old time pioneer psychology and develop a social psychology, recognizing that we are living in a cooperative world and must therefore act in a cooperative fashion.

Trade Commission-Mr. Woodsworth
There is one other point I should like to mention. I said I felt like voting for this legislation because it is at least an attempt to do something to meet the existing situation. Frankly, I am dreadfully disappointed with the attitude of the Liberal party throughout this entire parliament. They have stood pat, they have refused to give their own solution; they know that the problem is there- if they do not the whole country does-yet they refuse to lift a little finger to help solve that problem. It would seem they have no solution. The only ones among them who are vocal say: Let us go back to the good old days of free competition, laissez-faire and all the rest. But that is not good enough for to-day. So, although I have not any great confidence in the effectiveness of legislation of this kind, I welcome it as at least a move in the right direction.
The fact is that we are facing what the old socialist writers used to call the inherent contradictions in the present capitalistic system. We cannot make it work very much longer. I had an instance of that only the other day, someone writing me in regard to the enforcement of the minimum wage. In trying to enforce the act we are turning a lot of girls out of work, as the employers cannot afford to pay the wage. I can see some ground for the contention that the hon. member for Weyburn brings forward so often, that is the difficulty of enforcing this type of legislation, the ineffectiveness of it. But I differ from him in that, while he wants to go back, I want to go forward. He wants to go back to a system that is outgrown. We cannot go back; the only thing is to go forward. And the Conservative party, contrary to its name, has ventured at least to look forward. I do not think it is looking forward very far; I do not think its proposals are going to get us very far, but at the same time it is saying: We must make some attempt to solve this problem. But in working out its policies it is going to be faced with these "inherent contradictions of the present system." For example, the attempt to do anything towards enforcing fair practices may easily penalize certain more efficient firms. I think probably that would oe its most dangerous effect. That is one of the dangers connected with it. In the United States, to which reference was made earlier this evening, we have had millions and indeed billions of dollars poured out in an effort to make this system work. The effort has been to put purchasing power into the hands of the people. That seemed very essential; I believe it to be so, but so far that effort has not been successful. Instead of raising real wages and 
thus the standard of living of the people, it has succeeded only in putting up prices and creating greater dividends. Whether we like it or not to-day we are faced with fundamental contradictions in the system. Capitalism cannot be made to work very much longer; that is at least my opinion, and that is why I am advocating changes in the system.
It is not that I want to have a regimented population, as a matter of fact, we are regimented to-day by those people in St. James street, in Wall street and other financial centres; we are under their control. I want a cooperative system under which we will be free. Our present system-though collective [DOT]-we do not control; we have an overhead control. What I advocate is a control exercised by the people themselves in a democratic-fashion, a control that will no longer permit a few people to own the very tools by which we live, the machinery through which wealth is produced, but under which that machinery and those tools of production will be under the control of the people themselves.
That is the viewpoint I want to present once more to-night. I do not think it is understood by the majority of our people, but I feel confident that larger numbers are coming to understand. The best we can do for the time being is to seek to interpret these little pieces of legislation as movements in the direction of-indeed a part of-the larger movement which I have tried to outline tonight.
I propose to vote for the bill, though criticizing some of its clauses. I do so in the hope that it may prevent a few of the abuses that now exist and may lead us a little further along the road of reconstruction. Further it may help carry forward our education by showing the people generally how unworkable is any regulative measure under the existing system.


Mr. W. T. LUCAS (Camrose):: Mr. Speaker, I doubt if anything that has happened in the last few yegre has stirred the people of Canada to such an extent as the shocking evidence brought out before the price spreads commission. In the mind of almost everyone there was a general feeling that all was not well, but official evidence was brought out before the commission which leaves no doubt as to the actual conditions that exist. I think it was the hon. member for Hants-Kings (Mr. Usley), speaking this afternoon, who said that it might be well to leave this legislation over to be dealt with by another parliament.


James Lorimer Ilsley: One feature of it only.

Trade Commission-Mr. Lucas


William Thomas Lucas: One feature of it, at any rate.
I think if there is one thing the people of Canada want and expect to-day it is action. We hear a great deal about the communistic propaganda that is being spread throughout the country. If there is anything that will spread communism in Canada it will be our failure to bring about some alleviation of the conditions that were exposed by this investigation. So I think a tremendous responsibility rests upon this parliament to see that speedy action is taken to bring about an improvement of conditions.
Up to the present we have heard a great deal, especially from our legal friends, as to what cannot be done. The question with which the people are concerned, however, is what can be done. The hon. member for East Kootenay (Mr. Stevens), in his very able speech this afternoon, referred to the tremendous monopolies that have been created in Canada in the last several years; he mentioned that 246 mergers took place between 1924 and 1930. I am of opinion that these mergers and monopolies could not have been carried through if it had not been for the fact that these men had the ability to manipulate finance, and if we want to deal with these monopolies I do not think there is any need to argue about the constitution. One thing is sure; this parliament has power to deal with finance, and until we reassert our sovereign power to deal w'ith finance I am afraid we will continue to have monopolies as we have had them in the past. It cannot be said that up to the present governments have materially interfered with business management, so one must conclude that the responsibility for the present chaotic condition rests upon those who dominate the business life of this country.
I want it clearly understood that I am not making a blanket condemnation of all business, because I think it is well understood that the small business man finds himself in just as bad a plight as do the majority of other classes in the country. One hears a great deal these days, especially from opponents of government interference, about private initiative, rugged individualism and the pioneer spirit of our forefathers, and the argument is advanced that these qualities alone are needed to lead us out of our difficulties. It may be true, Mr. Speaker, that these qualities solved the problems of earlier times, the chief one being to provide sufficient to keep the people from starvation, or what is commonly referred to as the problem of scarcity, but that age is past. We no longer live in an
age of scarcity; our great problem to-day is one of abundance. Prior to approximately one hundred years ago, down through all the centuries of time, there was very little advance in the art of greater production and the only agents a man had to assist him in making hi* living were his bare hands, a strong body, a few crude implements, and the animals which he trained. But following the discovery of solar energy and as the knowledge of its use increased, conditions changed rapidly. The main problem of our forefathers was one of scarcity. They were continually faced with the haunting fear of famine and starvation. Then what happened? Why has there been more progress in the art of production in the last one hundred years than there was in all the centuries that went before? In my opinion, Mr. Speaker, that has been so because of the spread of education among the people. Let me point out that it was in 1832. also about one hundred years ago, that the first reform bill was passed in England, that was the beginning of the spread of education to the masses, and it is interesting to note that as education improved and spread more rapidly among the people, tremendous changes have taken place in our productive system until to day the picture is completely changed. Rugged individualism and the pioneering spirit of our forefathers may have solved their problem, but it left us with an entirely different one, namely that of learning how to distribute the abundance we are now able to produce. But surely if our forefathers faced with the haunting spectre of starvation were able to overcome their difficulties, we to-day, freed from that fear, should find it much easier to face the problem which confronts us. Human beings are mainly creatures of habit and custom; and like the small boy with bad habits will not give them up until compelled to do so, and it is only necessity to-day that is compelling us to change our views on many matters; and the struggle is a hard one.
The fact we must realize is that we are living in 1935 and not 1835. In the past great changes have come about only after a bitter fight. In proof of that statement one has but to remember the tremendous struggles which have taken place to secure our religious and political freedom, the abolishing of slavery and so on. But once those rights were secured we would not go back to the old conditions. I believe the biggest fight now confronting the human race is that of gaining our economic freedom. The solid foundation upon which our British
Trade Commission-Mr. Lucas

civilization was founded was that of justice and fair play, and if we are to erect a superstructure in keeping with that foundation a great many changes will have to be madte to curb the greed and avarice of certain predatory interests which threaten to wreck the whole structure.
The tremendous changes which have taken place in our industrial and1 economic life through the growth of the corporation, mainly since the beginning of the twentieth century, have relegated the individual to a secondary position, and no matter how strong may be his private initiative or pioneering spirit he is no match for the soulless corporation which opposes him. It has been the generally accepted idea that shareholders control the management of a company, but mow we learn that to a great extent that is incorrect.
Let me quote one or two paragraphs from the report of the price spreads commission. At page 14 of the report, in that part dealing [DOT]vith the ownership and control of corpora-;ions, we find the following:
The corporation has allowed the development or multiple ownership-that is. an indefinite number of people may own the corporation (and thus its assets) through the minute subdivision of ownership shares. This development has brought about .a distinction between ownership and control.
Under simple conditions, ownership implies the control of the thing owned. The development of the corporation, however, with its multiple shareholders, has made it possible for an individual to own without controlling, and to control without ownng.
Then on the next page we have an analysis of some 145 companies indicating methods of control in Canadian corporations. The summary at page 17 is as follows:
The significance of the results above is further emphasized by the fact that very few directors owned more than one per cent of the voting stock of the companies they directed. In 91 of the 145 companies no directors owned more than one per cent of the voting stock. Of the 101 directors of the other 54 companies (owning more than one per cent of such stock) 60 of them held between 1 and 3 per cent; 25 held between 3 and 10 per cent; 7 between 10 and 20 per cent; 5 between 20 and 30 per cent and 4 above 30 per cent.
So we find that the individual has very little control. As the late Woodrow Wilson once said, all our activities are in the hands of a few dominant men who chill, check and destroy genuine economic freedom. The evidence brought out before the price spreads commission clearly demonstrates this fact.

The truth of it is found when we think of such companies as the Imperial Tobacco Company, Canada Packers Limited, Canadian Canners Limited, The Robert Simpson Company, Limited, The T. Eaton Company Limited and1 many others. Here we find1 managements composed of only a few men drawing huge salaries and bonuses, while the workers and the primary producers eke out a miserable existence. In addition bo that about a million of our citizens have to depend upon charity. Of course the system is satisfactory for those who are in control. Men drawing salaries of $25,000 per year and over and bonuses of $40,000 to $60,000 have surely found Utopia. But is that justice; is it fair play?
Let me now turn to that part of the price spreads commission report dealing with wages paid in the tobacco industry. At page 115 I find the following:	.
The most striking fact revealed by our evidence on the tobacco industry is the combination of low wages and high profits. In 1930, the average annual earnings of the workers on this industry, $662, were the third lowest in the 40 industries for which the Domnion Bureau of Statistics published data. Since that date they have declined to as low as $555.
Then, at a later point I find this statement:
While workers in this company were being paid such low wages, an average of 28 chief executives received in salary and bonuses $616,318 in 1931, $506,982 in 1932 and $421,388 in 1933.
I would say at this point that if there is to be interference in business a maximum should be set as to the salary, including bonuses; which any one person may receive. One thing is certain, that the highly paid executives to whom we have been taught to look up and to consider as supermen have shown no great ability either in preventing or in leading us out of the present collapse. A publication of the Department of Labour indicates that a family budget requires from $800 to $1,000 for food and housing alone. On this basis a family would require from $1,200 to $1,500 to meet the minimum requirements for a decent stam dard of living. When one learns, however, that out of 1,947,771 male wage earners reporting at the last dominion census 1,178,975 or 09-53 per cent reported as receiving less than
S1,000	per year, and that including all male wage earners the average yearly earnings amounted to $927. and for the female wage

Trade Commission-Mr. Lucas
earners only $560, one realizes the seriousness of the situation. Is it any wonder that under these conditions we have poverty and unrest
Earnings
Under SI,000	
8 1,000 to 1,499	
1,500 to 1,499	
2.000	to 2,999	
3.000	to 3.999	
4.000	to 4,999	
5.000	to 9,999	
10.000	to 24.999	
25.000	and over	
Totals	
in Canada? I shall now place on record a table showing the classification of earnings as indicated by the last census reports:
Males	Females
	Per cent		Per cent
Number	of total	Number	of total1,178.975	60.53	437,409	82.77400.781	20.58	71.836	13.60198.577	10.20	14,173	2.68112,527	5.78	4.485	.8533,895	1.74	440	.089,959	.51	62	.0110,982	.55	51	.01145	.10	1	.01145	.01	1,947,771	100.00	528,457	100.00
If lion, members will study that table they will find it very illuminating and it will give them am idea of the small number who are earning sufficient to provide a decent standard of living.
When we come to agriculture, it is even worse. In 1930 the net value of agricultural production in Canada, according to the Dominion Bureau of Statistics, was $758,791,743, and in 1931 it was $538,192,000. Deducting from $758,791,743 the ordinary payments such as taxes, rents, interest on mortgages, repairs and so forth in order to arrive at the farmers' personal income, it is estimated that the amount would be in the neighborhood of $500,000,000 in 1930. In the census year there were 728,623 farms in Canada, so that the average income per farm would be slightly less than $700. This figure would include cash income and the value of products raised on the farm for consumption by the farm population. The farm population other than hired workers was slightly more than three million persons in 1931, so that we have thirty per cent of the Canadian population subsisting on an income of $500,000,000. Those are the figures for 1930, and from that year until 1933 the value of farm production fell tremendously and the farmers' income was reduced by about one-quarter.
There is something terribly wrong with the distribution of our national income when, as disclosed in the income tax returns for 1932, only 203,957 persons out of ten and a half millions, in other words only about two per cent, were able to pay the tax. With all male wage earners getting an average of only $927 per year, female wage earners an average of $560, and with farm income from $500 to $700, and on top of this with 1,250,000 of our population on relief, is it any wonder that conditions are bad?
In the shocking evidence brought out before the price spreads committee we heard of workers getting as low as two and three dollars per week. Here is a clipping from one of our Ottawa newspapers carrying the following headline:
.Skilled men get $3 weekly pay.
Average wage for 26 furniture plants is placed at $9.94.
The article goes on to say:
Weekly wages of $3, $4 "and $5 to skilled workmen were found to-day when the royal commission on mass buying investigated the furniture industry, which centres in Ontaro and Quebec. Boy apprentices were paid) as low as $1.68 ,a week and women received $4, $5 .and $6.
The Ottawa Journal commenting on these facts on June 22, 1934, has this to say in part:
In considering evidence before the Stevens parliamentary committee, all of us should want to be fair. Fairness, however, must work both ways, and it is hard to read of what was told to the committee on Wednesday without indignation-or shame. Consider the following, concerned with the operations of a boot and shoe factory in Quebec:
It has made substantial profits for four years.
The average weekly wage paid women employees in October, 1933, was $8.75.
The average for 172 men was $9.39.
Of the 172 men, 126 were married, with 401 dependents.
Eighty-two men received less than $6 a week.
In one department only two of 55 girls received the minimum wage, and boys received $2.50 and $3 for a week of 52 hours.
Business itself, decent business, can't afford sweated labour. More than that, and more important, Canada can't afford it. Cheapness may be important, may be often desirable. It is not as desirable or as important as the maintenance of Canadian citizens in a condition of human dignity and decency.
Last fall we read in the press a story about twelve hundred miners in Hungary who went down into a mine and refused to come up because of the starvation wages that were
Trade Commission-Mr. Lucas

being paid them. It was reported they were receiving two dollars per week. They decided to die rather than try to live under those conditions. And yet, Mr. Speaker, we have right here in Canada conditions almost as bad. It is enough to make every decent Canadian hang his head in shame. Yet these conditions have been brought about or have come about with highly paid executives in command. I do not say that they are entirely responsible, but they are the men who have been in control, and with no government interference; they have had a free hand. Yet there are those who say: Hands off business and let these terrible conditions continue.
I think it is safe to say that everyone in Canada and indeed in most countries of the world is dependent for his daily happiness not merely upon the protection of his own property rights but also upon some limitation of the property rights of others. There seems to be gradually emerging from generations of trial and error, from hard work and hard thinking, a broad principle which can be soundly applied in the writing of laws needed to protect the public and private interests in business enterprise, the principle that every right carries with it a corresponding obligation, that every freedom carries with it a corresponding servitude. The right to own a cobbler's tools and the freedom to make shoes as and when and where one wished carried with it little social obligation and imposed little servitude. But the right to own the factories that are sufficient and necessary to produce the shoes of a nation and the freedom to control the operation of these factories carries with it a heavy social obligation and a servitude to the nation. No community can long sustain by law the right of any one man or group of men to decide by the wisdom or folly of their arbitrary decisions whether a community shall be well fed, well clothed or well housed, or shall starve and shiver in hovels. Those who seek power must accept obligations, and so as the property under individual control increases, the owner's social responsibility must likewise be increased as a matter of law. Public obligations must be imposed in exact proportion to the public interest. The owner of a ten acre farm or a little business may operate his property, may run his business to suit himself, but the owner of 100,000 acres or a huge factory has power to give a thousand men employment and the opportunity to earn a living, or to deny them that opportunity or grant it only on oppressive terms. The operation of any great business furnishes opportunities for employment to thousands of men, whereby they obtain the wages which are the means 
to life and liberty, and whereby they produce goods to meet the needs of thousands of consumers. Surely the community has a claim against the owner of such a business for a wholesome use of its property rights which is at least as valid as the claim of the owner of the business for a wholesome protection of his property rights by the community.
We are inclined to boast a great deal about the liberties and freedom of our people, but I say without fear of contradiction that the present system has brought about the most insidious form of slavery that has ever existed among the human race. If any man challenges that statement just let him place himself in the position of some of those lowly paid workers, and then he will very soon realize that he has neither liberty nor freedom. When one sees the poverty of the many on the one side, and the affluence of the few on the other, one sometimes wonders at the patience of the workers. I should like to quote briefly from a speech made before the Canadian Club in Ottawa last December by the Hon. W. D. Herridge, Minister to Washington. He said in part:
Are those who are profiting entitled to the same tags of virtue and innocence as those who-are suffering? Are the former beyond all criticism and indeed like sweepstake winners, to be congratulated as the group arbitrarily chosen by providence to be the beneficiaries of a system which just won't work in any other way?
This total disregard for human welfare, this blind grasping for huge profits, belongs to an age which is passing and it cannot pass too soon. We are beginning to realize that we are all in the boat together and profiteers will not be tolerated much longer. They should not be permitted to scuttle the welfare of whole large groups and play havoc with honest business. A great deal has been said about respect for the constitution, and I should' like to quote John Bright as follows:-
I believe there is no permanent greatness to a nation except it be based upon morality. I do not care for military greatness or military renown. I care for the condition of the people among whom I live. There is no man in England who is less likely to speak irreverently of the crown and the monarchy of England than	I	am;	but crowns,	coronets,	mitres,military display, the po-mp of war, wide colonies and a huge empire, are, in my view, all trifles light as air and not worth considering, unless with them you can have a fair share of comfort, contentment and happiness among the great body	of	the	people. The	nation in	everycountry dwells in the cottage: and unless the light	of	your	constitution	can shine	there,unless the beauty of your legislation and the excellence of your statesmanship are impressed there	on	the	feelings and	condition	of the
people, rely upon it you have yet to learn the duties of government.

Trade Commission-Mr. Lucas
We all know that a fair share of happiness and contentment does not exist among the masses of the people. How can it with the wages received by ninety per cent of the people? I should like to make a short quotation from a report presented to the League of Nations, as follows:-
Millions of children are the innocent victims of the world's economic depression.
The general lowering of the standard of living "from which millions of families totally or wholly unemployed have been suffering for a long time past, constitutes a serious danger to public health," states the report presented by the international labour office to the child welfare committee of the league of nations.
And again:
The dangers to which the health of the children of the unemployed are exposed are lack of clothing and bodily care, deterioration of housing conditions and underfeeding.
And again:
As a whole, the information collected by the international labour office shows that the economic crisis has produced almost everywhere such a reduction in conditions of life that there is grave danger that millions of children will not be able to grow up in normal conditions of health.
Every hon. member should be impressed with the realization that many of the rising generation is being undernourished; it is facing a handicap which will possibly never be overcome in this life. These matters should give us grave concern. Why does this condition exist? Is it that we have not the resources, the man power or the plant and equipment to supply all with abundance? Of course not. Our resources have only been scratched, we have over half a million idle men pleading for work and a chance to live. Our plant and equipment is working less than fifty per cent of full time. A headline which appeared in one of the Ottawa papers last winter, commenting on the price spreads report, stated that the Canadian milling plants could supply the entire world.


Edward James Young: That is wrong.


William Thomas Lucas: I was simply quoting a headline which appeared in one of the papers. If the hon. member believes it is not right he can take that up with the newspaper. I am told that if the shoe factories in the United States worked full time for seventeen days they could manufacture sufficient shoes to last the whole nation for one year. It is general knowledge that the productive capacity of our plant and equipment is far beyond the ability of our people to purchase. On the one side we have a tremendous capacity to produce: on the other side we have a tremendous unfilled demand, but there is a barrier between. We have the resources, we have the man power, we have the plant and equipment and we
have the demand, but we have not the purchasing power with which to make the exchange and in my opinion until we deal with this matter our efforts to bring about an improvement will be of little avail.
Surely no one will say that he is satisfied with present conditions. The committee dealing with price spreads considered many of these problems and brought in a report recommending that certain rules should be laid down for the governing of business and that legislation should be introduced to see that the game was played according to those rules. The question is whether we are going to see that that end is brought about, or are we going to continue the unfair rules which exist to-day. It is a onesided game which enables 64,434 persons out of a population of over 10,500,000 to obtain some or all of the luxuries of life while the rest have difficulty in obtaining the necessities. These figures are taken from the income tax returns and show the number paying tax on incomes of S3,000 and over. Business and industry have had a free hand and having failed to make proper rules it then becomes the duty of the state to interfere and endeavour to evolve rules which will be fair and satisfactory to all concerned. But if we are to make these rules we should have a complete understanding of the game.
While I have no criticism to offer of the investigations carried on by the price spreads commission as far as they went-in fact I believe they were restricted by the reference -I claim that they left untouched the most important problem of all, that of finance and its relation to our economic life. I would make this suggestion: No matter which party may be in power after the next election, one of the first things which should be undertaken is a full and complete investigation into our whole- financial system. There is no question about our power to deal with such a matter in this parliament. Last year a group of prominent business men appealed through thie London Times for such an investigation in Great Britain. The London Chamber of Commerce, the Southampton Chamber of Commerce, the British Rotary and other bodies are on record as asking for a change in the financial system of Great Britain. In my humble opinion until something is done to bring the factor of consumption more nearly into balance with our greatly increased factor of production, our efforts to improve conditions will be of little avail. The greatest thing we can do to-day to help industry is to give it a chance to produce. The producer is being strangled simply becouse he cannot sell his goods, the very goods which the

Trade Commission-Mr. Lucas
people would buy if they had incomes large enough to do so. Everywhere people are beginning to realize that there is something wrong with our system of distribution. The fundamental principle of finance is to facilitate the distribution of goods; it superseded the barter system. We all know why we have an agricultural industry; we all know why we have developed an industrial system; we know why we have a transportation system. But why have we built- up a financial system? In my opinion it is simply to facilitate the distribution of goods among the people, and apparently it is not functioning properly. Henry Ford put the situation very well when he said:
Although money is supposed to represent the real wealth of the world, there is always more wealth than there is money and real wealth is often compelled to wait upon money thus leading to that most paradoxical situation, a world filled with wealth but suffering wrant. The poverty of the world is seldom caused by lack of goods but by a money stringency.
We hear a great deal about sound money and one is inclined to ask, what is sound money. I think it reasonable to say that a sound money system is a system that works, a system that makes effective the necessary demands for goods. Our present money system is therefore anything but sound. In this connection I might quote the following extract from the London Times under the heading Money System's Disease:
Money System's Disease The Times (London)
There are millions of decent, hard-working people and their children in, the richest countries in the world, including ours, wTho are living below the poverty-line at this moment. Why? Is it because of scarcity? No. It is because of over-abundance. That is the supreme paradox of our generation. We are producing too many and too much of the commodities that these poor people need, therefore they must go without. The prolonged flood of good things has created a drought.
There is too much corn, too much beef, mutton, bacon, butter, and in order to cure it millions of deserving people have to be kept on half rations. We are turning out too many clothes, too many boots, so little children ir the distressed areas must go in rags and tatters until this overproduction is stopped

of the very things for lack of which they are shivering in this damp climate.
Certainly we in Canada have an abundance of practically everything we need. Our labour is of a high standard; our machinery is of the best; our electrical and other power now developed-and that development is only in its infancy-is equal to one hundred and fifty million slave men ready and willing to do our bidding. No one will say that we have not sufficient transportation; our banks

are efficient and adequate and our retailing equipment is more than adequate. Thus purchasing power in the pockets of the people is the only thing lacking. This can be secured not by using the printing press but by a scientific credit plan to balance consumption more nearly with our production. This can be secured by a national credit account based, hot on a gold reserve but on the country's capacity to produce. Just as slavery lifted the burden of toil from the backs of the free citizens of olden days, so should the power-driven machine do now. The machine is now our slave instead of the human slave as in olden times.


Mr. DEPUTY SPEAKER:: The hon. member has spoken forty minutes.


Richard Langton Baker: May I ask the hon. gentleman a question? He quoted something in which reference was made to children going without shoes, and shivering. I hope there are no such cases in Canada. Certainly there are none that I know of. If there are, they should be reported to the government.


William Thomas Lucas: Unfortunately I had to go to hospital during the past winter and while there I discussed this problem with many of those in authority, and I was told that in the public wards there were very many children and older people as well who came in undernourished. There are many cases in Canada where people are suffering for lack of proper nourishment.
On motion of Mr. Heaps the debate was adjourned.


[Stage Direction]
At eleven o'clock the house adjourned without question put, pursuant to standing order.
Wednesday, June 12, 1935