1935-02-15

[Stage Direction]
Hon. R. J. MANION (Minister of Railways and Canals) moved for leave to introduce Bill No. 20 respecting the appointment of auditors for national railways.
Some hon. MEMBERS:: Explain.


Mr. MANION:: This, Mr. Speaker, is merely the annual appointment of the auditors of the Canadian National Railways, as called for by the act.
Motion agreed to and bill read the first time.


Mr. SPEAKER:: When shall said bill be [DOT]ead a second time?


Mr. DUFF:: Now.


Robert James Manion: I think the bill will have to be printed in English and French before it can be given second reading. I am afraid someone might object if that were not done.



BUSINESS OF THE HOUSE


[Stage Direction]
Right Hon. R. B. BENNETT (Prime
Minister) moved:
That on and after Wednesday the 20th instant to the end of the session, government notices of motions and government orders shall have precedence on Wednesday over all business except questions by members and notices of motions for the production of papers.
He said: As I stated previously, the government is entirely in the hands of the house in 
regard to this motion. If it is the wish of any substantial number that another Wednesday should be made available for private members we are quite prepared to agree.
Hon. ERNEST LAPOINTE (Quebec East):: So far as this part of this side of the house is concerned we do not want to put any obstacles in the way of the Prime Minister taking up all the remaining days of the session.


Mr. J. S. WOODSWORTH (Winnipeg North Centre):: ): Mr. Speaker, we are just as anxious not to put any obstacles in the way, but we would like it very much if there could be another private members' day.


Mr. NEILL:: Hear, hear.


Mr. BENNETT:: Then if I may be permitted to do so I will move that the motion be amended to read the 27th instead of the 20th, so that the 20th will still be available to private members.
Motion as amended agreed to.



MARKETING BOARD-ADVANCES

[Stage Direction]
On the orders of the day:
Hon. ROBERT WEIR (Minister of Agriculture) :: In reply to a question asked yesterday by the hon. member for Weyburn (Mr. Young), based on a telegram he received, I may say that the marketing board has advanced money to organizations in western Canada, with definite conditions attached to the advancing of such money. None of these conditions state that it is for the purpose of promotion.


Mr. STEWART (Edmonton):: What is that?


Some hon. MEMBERS:: Speak out.


Robert Weir: None of these conditions state that it is for the purpose of promotion.


Mr. YOUNG:: Can the money be used for the purpose of promotion?


Robert Weir: It depends on the interpretation of the word "promotion," I think.


Edward James Young: That is not very satisfactory.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the orders of the day:
Robert James Manion: Mr. Speaker, yesterday the hon. member for Vancouver Centre (Mr. Mac-

Grade Crossing Fund
kenzie) asked a question as to the number of applications by the Canadian National Railways for the abandonment of branch lines. The answer is: Twenty-four.



GRADE CROSSING FUND

[Stage Direction]
On the orders of the day:
Robert James Manion: Mr. Speaker, in discussing the resolution of the hon. member for East Toronto (Mr. Church) regarding automobile accidents the hon. member for West Middlesex (Mr. Elliott) asked about the number of grade crossings which had been eliminated through assistance under the grade crossing fund. With the permission of the house I should like to place on Hansard, for the information of all hon. members two brief statements which I shall not read. Statement "A" deals with the operations towards which there were contributions from the railway grade crossing fund, and statement "B" shows the number of improvements carried out between the years 1930 and 1934, inclusive. This statement is not restricted to Drojects which participated in the railway grade crossing fund, but covers all crossing protection arrangements and devices whether participating in the fund or not. If the house is willing I will place these tables on Hansard. They are as follows:



STATEMENT A

[Stage Direction]
From the first day of April, 1909, to the thirty-first day of December, 1934, the board
ordered contributions from the railway grade crossing fund towards the protection of 1,487
crossings, as follows-
By automatic interlocking plants	 14
Closing crossings	 181
Crossings eliminated	 96
Diversion and overhead bridge	 8
Diversion and subway	 6
Diversion to subway	 4
Electric bell	 203
Electric bell and flashlight	 2
Electric bell and wigwag	 454
Electric bell and wigwag and removing
obstructions to view	 7
Easing curve on approach to bridge.. 1
Gates	 125
Gates automatic	 3
Gates electric	 1
Gates and half interlocker	 1
Grade reduction on crossing approaches. 6
Footbridge	 1
Lengthening ringing circuit of bells....	2
Lightning flash signals	 50
Overhead bridges	 90
Pedestrian subways	 2
Shelter (Watchman)	 1
Removing obstructions to view and
reducing grade	 6
Removing obstructions to view	 93
Subways	 118
Tower (Watchman)	 3
Tunnel	 1
Floodlights	 1
Wigwags	1	 7
There were 229 highway diversions constructed which made it possible to close 181 crossings, and eliminate traffic fr*m 96 crossings.

[Stage Direction]
Showing number of Highway Diversions Made; Highway Crossings Closed; Overhead Highways Provided, also Crossing Subways, Wig-Wag and Bell Signals installed under orders of The Board of Railway Commissioners during the years 1930, 1931, 1932, 1933 and 1934.
Highway Highway Crossings
Province	Diversions Closed
British Columbia	24	21Alberta	79	85Saskatchewan	212	245Manitoba	37	69Ontario	54	66Quebec	43	47New Brunswick	2	18Nova Scotia	17	20Prince Edward Island ..	1	1Total	469	572

[Stage Direction]
On the orders of the day:
Mr. F. W. PERRAS (Wright):: Mr. Speaker, I should like to draw the attention of the Minister of Public Works (Mr. Stewart) to a motion for papere standing in my name and passed by the house on February
Overhead Crossing Wig-Wag Bells and Electric
Highway	Subway	Signal Wig-wags BellB	8	0	0	0	01	2	0	1	03	4	0	0	02	3	0	0	037	42	22	180	043	55	2	5	150	0	0	8	80	1	1	7	160	0	0	0	094	107	25	201	394, asking for the production	of	all petitions,letters,	reports of	engineers	and	other documents in the possession of the Department of Public Works and received during the years 1933 and 1934, regarding the proposed expenditure of $7,000 on a public wharf at Aylmer, in the county of Wright. Could the minister tell me when these reports will be tabled.
Mounted Police Act


Hon. H. A. STEWART (Minister of Public Works):: Mr. Speaker, as the hon. member
is probably aware, the number of requests in the current year for reports and returns from the Department of Public Works has been exceedingly high. We have had to employ additional stenographers for the purpose of preparing such reports. I shall make an inquiry and see that th.e information is brought down as early as possible.



UNEMPLOYMENT RELIEF-QUEBEC

[Stage Direction]
On the orders of the day:
Hon. W. A. GORDON (Minister of Labour):: Mr. Speaker, yesterday the hon. member for Laprairie-Napierville (Mr. Dupuis) asked me if I would table a copy of the correspondence which passed between myself and the Premier of Quebec with respect to contributions by the province and the dominion towards direct relief. I desire now to table the correspondence.



ROYAL CANADIAN MOUNTED POLICE


[Stage Direction]
Hon. HUGH GUTHRIE (Minister of Justice) moved the second reading of Bill No. 9, to amend the Royal Canadian Mounted Police Act.
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Smith (Cumberland) in the chair.
On the short title.
Mr. POWER:: Would the minister tell the committee how many men would be affected by this change. I believe on the last occasion the matter was under discussion he said there would be only two or three.


Mr. GUTHRIE:: So far as is known, there are only four.


Charles Gavan Power: Has the minister any objection to naming them?


Hugh Guthrie: I do not know the names of all, but I do know the names of two. One is a man named Bowen, a sergeant, and the other is Jennings, the assistant commissioner. I am told that there may be-it is not certain -two in the west, whose names I do not know.


Charles Gavan Power: Is there any reason why
the principle contained in this bill should not oe extended to the entire civil service? Why do we differentiate?


Hugh Guthrie: We did differentiate in
;be case of the military forces of Canada.


Ernest Lapointe: I know.


Hugh Guthrie: I do not know that I
have any particular objection to extending the measure, but it could not be done in this bill.


Charles Gavan Power: Why are we giving special
treatment to the police,-better treatment than we give to any other branch of the service, with the possible exception of the militia? They are not civil servants, but a good many of them were-


William Duff: In some cases very uncivil.


Charles Gavan Power: I am told that not only are they very uncivil, but in some respects they have been endeavouring to introduce into this country some of the practices which prevail in countries in Europe, and which would not be for the good of this country as a whole.


Ernest Lapointe: I was going to say a
word on this subject when we reached sections 4 and 5 of the bill. I believe this is a continuation of a new policy which seems to militarize the Royal Canadian Mounted Police. During the past three years it seems to have been the custom to consider members of the force as military men. Their years of service in the militia count, and in many other ways they have become to some extent what people would call militaristic. I think it would be a great mistake if that was the spirit that was to prevail in the end. The police force of Canada or of any country should be kept as far away as possible from the military end of the national organization. They should act in quite a different way, but I have heard it said during the last two or three years that military methods were being introduced in the mounted police, and I am certainly not in accord with that.


Hugh Guthrie: Mr. Chairman, in reply
to my hon. friend from Quebec East I entirely agree with him that the force is not a military force, should not be so treated and should not be so considered. It was established as a police force and in order to keep it as a police force it was thought better in the early days to attach it to the Department of Justice rather than to any other department, in order that it might remain purely and simply a police force, and there it is at the present day. I know of no military operation or anything in the nature of a military operation that the force has ever been called upon to perform unless in connection with the northwest rebellion of 1885. The training is police training; the whole

Mounted, Police Act
idea of the training and of the system is to keep the force distinctly a police force. If my hon. friend from Quebec East would mention some of the instances to which he refers I will make inquiry into them.


Charles Gavan Power: Only recently the newspapers carried a report of a complaint that was made by a barrister in Halifax, Nova Scotia, a Mr. Molnnes, who complained very bitterly of the treatment that was meted out to one of the witnesses of the accused, I forget which, in the recent cases involving charges of evasion of the customs laws. My recollection is that very grave charges of undue exercise of third degree methods were made against the officers of the police. I think it might be interesting to the house to know to just what extent the Canadian military forces or the Canadian police are entitled to use third degree methods. Just because they are in effect in other countries, have we decided that we are going to carry on this very un-British practice of persecuting or tormenting people in order to make them confess or make statements to the police which they otherwise would not make? I think it might be informative to the house if the minister would give us a statement as to the authority of the mounted police in matters of that kind.


Hugh Guthrie: I may say in reply to
my hon. friend who has just taken his seat that I would resent just as much as he does, or anyone else would, any insinuation that what are knowm as third degree methods were employed by the police. I have heard statements made and I have made inquiries in regard to specific cases, and I am satisfied that there is no foundation for such charges. The police are instructed otherwise. They are a police force. I am aware that in some parts of the world what are called third degree methods are in vogue and it may be in some municipal forces in Canada, although I do not know that; but positive instructions are issued to the Royal Canadian Mounted Police that no third degree methods are permissible and if any member of the force seeks to practise them I only wish it would be reported.


Charles Gavan Power: Is the minister aware of
the affidavit or statement that was made by a Mr. Russell Mclnnes, a barrister of Halifax, I think, relating to the questioning of a Mrs. Carline.


Hugh Guthrie: I cannot recall the case.


Charles Gavan Power: It was within the last
three weeks.


Hugh Guthrie: Three weeks?


Charles Gavan Power: Three weeks or a month
ago.


Hugh Guthrie: No, but a number of
cases have been brought to my attention during the last four or five years, and after investigation in all these cases I have had to come to the conclusion that the charges were absolutely unfounded.


William Duff: Did the minister see in the
newspapers that the mail of one of the members of parliament in this country had been opened by these so-called mounted policemen?


Hugh Guthrie: No, I have never heard
of that complaint.


Mr. VENIOT:: Mr. Chairman, on the
question of the conduct of the mounted police in the matter of the use of third degree methods, I brought a case to the attention of the Solicitor General last session, I think it was, and the Solicitor General promised to make an investigation. Apparently an investigation was made in an ex parte manner, if I may use the term, and the report was sent in to the department that there was no foundation for the statement. I repeat here to-day that there is foundation, that there was no proper investigation held, and I want now to go one step further.
Another case arose in my town where the mounted police, the same ones I complained of before, put a prisoner, the accused, through the third degree in the worst manner possible. The young man was accused of manslaughter. He was supposed to have been driving at night and to have struck an individual and not to have stopped when the accident took place. The man died and this young man was arrested by the mounted police. He was not put in gaol but taken before the mounted police and questioned. The officers who questioned him were not the ones who took what purported to be his confession, and those officers who questioned him told him that the oar they had examined had Wood on it and that one of the mudguards in front was broken and that a piece of it was found on the road, which was an absolute lie. I was present in court, and one of the mounted police was asked whether he was a party to the questioning. He said no. Then he was asked, "Were you a party to examining this car?" He said yes. Then he was asked, "llf a confrere, a brother policeman of yours, made the statement that there was blood on that oar and that one of the mudguards was
Mounted Police Act

broken, would you say that he told the truth?" "No," he said, "I would say he lied." I was present in the court and heard this. The young man, he was just a young boy of eighteen or nineteen, had gone over that road the night of the accident but said he had never struck anybody so far as he could ascertain. He did in a matter of confession, after this third degree questioning, after he was told there was blood on his car, after he was told the mudguard was broken, say, "I may have struck somebody lying down on the road but I certainly did not knock a man down." While the trial was going on before the supreme court Mr. Justice Le Blanc refused to allow this purported confession to be put in evidence because the policeman who had questioned the prisoner was not the one who was in court and he could not be found, and for that reason the purported confession was not allowed in evidence.
What happened? The jury cleared this young man but the police brought a charge against him for violent and dangerous driving, whatever the term is, before a police magistrate, and this purported confession that he had made to the police was allowed in evidence before the police magistrate and the young man was fined $50 and costs for vicious or violent driving.
I am making this statement on my honour as a member o>f the house. The third degree was applied to that young man, and I do not want to see any more investigations like the one that was held by Captain Salt, who is head of the police of the province. Captain Salt on that occasion came all the way from Fredericton to Bathurst, and he assisted at that inquiry by the police, and then went home. After Captain Salt had gone back to Fredericton the young man was taken before two policemen who had not questioned him but who knew the questions that he had been asked and the answers he gave, and they induced him to make a sort of confession which was used against him. Now if this is going to foe allowed to go on, the worth of the mounted police will be at an end. Their authority will be no longer any good.
Take the case in the province of Quebec to which reference has been made. In that instance there was almost a forced confession, and I do not care what police force was involved in it; I am discussing the question of third degree methods. The supreme court refused the evidence. Now I submit that if the mounted police or any other police force are going to use methods of that kind to get evidence, then bringing the criminals before

the court, you cannot expect to get convictions. No justice of the court, made aware of the circumstances under which such evidence is obtained, is going to allow such confessions to go in. There is a method of obtaining evidence and the police are paid for doing that work; but they are not paid for this third degree business.
Referring to the case mentioned by the hon. member for Quebec South, the Mclnnes case, let me call the attention of the attorney general to another case-and 'perhaps I am out of order in discussing it inasmuch as it is before the courts now for preliminary examination. A lady and her daughter have produced evidence-I saw the affidavit myself -showing that the mounted police went to their house and demanded to know where her husband was. Apparently she did not know at the time, whether he was in the city or not and they demanded that she go to the bank and open the safety deposit box in the name of her husband and herself. She refused, and the policeman who was there, accompanied by another told her that if she did not appear at the bank at 10 o'clock the next morning he would break the box open with an axe. At 10 o'clock the next morning she was there, and under threats she opened the deposit box and the police took out of the box all the papers belonging to these people. When the matter came up before the court the other day in Montreal, and this question of third degree methods was involved, the lawyers prosecuting refused to file the documents taken out of that box, in order to prevent this lady from going on the stand with her daughter and giving evidence. The policemen denied the affair and the court decided that the affidavits would not be taken because the individuals could be produced. The defence offered to produce the individuals and brought them there at two o'clock in the afternoon. In the afternoon at two o'clock the prosecuting attorneys refused to file the papers taken out of the box, so that these ladies could not be put on the stand as witnesses to prove that the mounted police had attempted by third degree methods to procure the documents. I would direct these cases to the attention of the attorney general. I have seen the affidavits in the Montreal case, and I was present in the court and followed the whole proceedings in the case that came up in Bathurst, so that I know that third degree methods have been applied. I would ask therefore for an investigation not by Captain Salt in Fredericton, the head of the mounted police of New Brunswick, but by a person sent from the Department

Mounted Police Act
of Justice in Ottawa, someone who will not play favourites with anyone but will carry out a fair and square investigation of the facts. And I will be prepared to produce witnesses because I do not want an ex parte investigation.


Hugh Guthrie: I should be glad to grant the request of my hon. friend in regard to the New Brunswick case which he has mentioned and which has not been brought to my attention before.


Peter John Veniot: No, I did not bring it to your attention.


Hugh Guthrie: The hon. member makes a complaint as to some confession which was allegedly taken by third degree methods. My idea of third degree methods is that they are methods whereby men are cajoled and threatened and tortured and exhausted, as a result of which statements are obtained from them.


Peter John Veniot: I gave you cases.


Hugh Guthrie: I am satisfied that nothing of the kind has taken place.


Peter John Veniot: I am satisfied it has.


Hugh Guthrie: We have no particulars of it yet. But it is common in every police system in the world, I think, to question witnesses or supposed criminals before they are arrested. It is the method of doing it that is sometimes called the third degree, but the mere fact of questioning transpires, I think, in every important criminal case in this country. If confessions are obtained by threats or promises the court very properly rules them out. The court in New Brunswick, according to my hon. friend's statement, did rule out the confession against this man who was charged, but subsequently when the matter came before the magistrate's court, he was fined $50 for reckless driving or something of the kind. If there is any complaint in regard to that, it cannot be made against the mounted police but against the judiciary or the magistrates of New Brunswick. We do not enforce the criminal laws in any province; the provinces enforce them, and if the magistrate has made a mistake there is recourse and appeal can be taken against his decision under the laws of New Brunswick. So far as I can see, however, no wrong has been done, nor has any injury followed. But to gratify my hon. friend, because he is always very positive in his statements, I will have an investigation made by someone outside the establishment in the province of New Brunswick. I will have it done by someone from Ottawa. I do not know about the Montreal case, and if I
did I would not discuss it now, because it is before the courts. But on the statement that has been made, I see nothing to complain of in the conduct of the mounted police.


Peter John Veniot: Surely the Minister of Justice does not mean to say that there is nothing wrong in the conduct of the mounted police, from the statement I have made. Will he approve of the mounted police lying to an individual-


Hugh Guthrie: No.


Peter John Veniot: -and telling him that there was blood on the car when there was not, telling him the mudguard was broken when it was not, in order to induce that individual to admit that he must have struck the man? He lied to him, misrepresenting the whole situation.


Hugh Guthrie: That is the case I promise to investigate.


Peter John Veniot: Then I will ask the minister this. When the investigation takes place, I will ask him not to have it held until I am at home after the session.


Hugh Guthrie: I will agree to that too.


Peter John Veniot: I ask that because I want to push this thing to the limit.


Hugh Guthrie: And if the hon. member will write me a letter giving names and dates, I shall have the preliminaries prepared, awaiting his return home.


Peter John Veniot: Here is another thing about the conduct of the police. I hold a return from the Department of National Revenue in connection with the seizure of a vessel; I will not discuss that now; I will discuss the question fully when it comes up in the estimates. But I inquired what instructions were given the mounted police in connection, first, with the destruction of the vessel, and secondly, with the destruction of the liquor seized on board. The Department of National Revenue replied that they gave definite instructions for the destruction of the vessel and the destruction of the cargo. I then asked whether instructions were issued by the Department of National Revenue for the disposal of the stores found on board this vessel, and, if so, what those instructions were. The answer is, "No specific instructions." Now I want to know this. If the police received no specific instructions to destroy the stores of the ship, were they justified in taking those stores which had been seized on board the ship and carrying them to a private house of one of the mounted police, whose family were living there, and
Mounted Police Act

who had custody of those stores? They took them without specific instructions to take the ship's stores, consisting of pork, biscuits, flour and other provisions amounting to 8600. They took these stores down to the shore, poured gasoline over them and destroyed them in the presence of hundreds of people who were on relief and who were pleading to get the stores rather than to see them destroyed. The department replied to me that no specific instructions were issued. I want to know whether the mounted police were justified in destroying those stores in that way.


Hugh Guthrie: I would very much prefer if cases of this kind were brought to my attention on the estimates of the mounted police and not on this bill. I would then have the commissioner in front of me and be able to give the information.


Peter John Veniot: I will bring the matter up then. I just wanted to bring it to the attention of the house.


Mr. RALSTON:: May I ask the minister what are the relations between the Department of Justice and the mounted police? Is the mounted police under the instructions and directions of the Department of Justice with regard to instituting prosecutions? My reason for asking the question is this: It sometimes appears as if the mounted police used entirely their own discretion as to what informations they should lay and what prosecutions they should commence, and on inquiry an intimation is given that the Department of Justice has nothing whatever to do with the matter. Is that the situation or does the minister consider himself as having control of the mounted police and as having the mounted police in aid of the civil power as vested in him for the purpose of prosecutions and the enforcement of law?


Hugh Guthrie: Under the statute the Minister of Justice is described as the minister in control of the mounted police; that is the official title. But so far as prosecutions instituted by the mounted police during my term as Minister of Justice are concerned, I have not interfered with those prosecutions. I am referring to prosecutions involving rights of the crown, the revenues of the crown and the like, smuggling cases, all revenue cases. When a prosecution is instituted, it is instituted by an officer of the mounted police and in the vast majority of cases without my knowledge. That is the instruction which the commissioner has in regard to such cases. That pertains particularly to the three provinces of Ontaiio, Quebec and British Columbia 
in which the mounted police has no jurisdiction outside of government cases. But in all the other provinces, under agreements made with the provincial governments, the mounted police does perform the police duties of the whole province, and in those provinces it is more or less under the direction of the attorney general of the province concerned. I am not in any way consulted about the cases in those provinces. But in Ontario, Quebec and British Columbia in revenue cases, the action taken is taken on the initiative of the mounted police itself. Of course in the more important cases I am asked to nominate counsel for the conduct of the proceedings and in the majority of cases that is the first intimation I have that a prosecution is taking place. I have felt that it is not part of my duty to interfere in these prosecutions. I have time and again been requested by very able counsel, by the leading lawyers of this country, to intervene and to give them an opportunity of laying their case before me in order, I suppose, to allay or delay the prosecution or something of that kind, and I have refused to consider the question or to consult with them. Therefore to that extent in revenue cases the action taken is taken by the mounted police; they have control of the proceedings and they are very averse to any interference from any source whatever. Of course there are cases in which they do consult me, but not in regard to initial prosecution; they consult me in regard to the conduct of the case, the lawyers and the like.


Mr. CASGRAIN:: I would like to call attention to an incident which happened in my constituency. On one occasion an officer of the mounted police came there in connection with a man in charge of a vessel. I do not know whether he gave this man instructions to put up his hands, but without any interference or provocation from the man, this mounted police official started to shoot all around. I do not know what took place afterwards, whether the question was taken before the courts and what was decided, but on that occasion the people were making complaints, such as have been made here to-day, that mounted police officers in our part of the country were taking the law into their own hands and administering it in a highhanded fashion. The Department of Justice, under whose administration the mounted police force is, ought to be careful to see that the instructions given to mounted police officers, not only when they are acting in their capacity as mounted police officials but at

Mounted Police Act
other times as well in those districts, are very strict so that similar incidents will not occur again.


Hugh Guthrie: If the hon. member will give me the names involved in the case he has just mentioned, I shall get a full report.


James Layton Ralston: Following up my remarks and the reply made by the Minister of Justice, I am not talking about the matter of conducting prosecutions; what I am speaking of is the control of the minister in reference to instituting prosecutions. From some reports which have come to me, it seems that there have been cases in which the mounted police should refer to someone who understands the legal significance of the situation before the prosecution is actually commenced. In other words a report should be made to the minister in connection with revenue cases or any other cases under the dominion statutes, just as a report is made to the attorney general of a province or the crown prosecutor in a district, so that the attorney general or the crown prosecutor may give instructions and advice as to the person or persons against whom prosecution should be brought. What I am endeavouring to bring home to the minister is the idea that, it seems to me, he should not give up the control which the statute gives him over any part of the duties of the mounted police. He should not give them a blank cheque even to bring prosecutions without reference to him.


Hugh Guthrie: I suppose if the rule as suggested by my hon. friend were adopted, it would apply to all cases. In many cases which one might call the more important ones, I have had occasion to discuss with the commissioner the case itself or perhaps the nature of the prosecution that took place, but I have never interfered with what he thought right to do in prosecuting this, that or the other person. The commissioner has of necessity had to consult in many instances some legal authority and in such cases he has consulted the law officers of my department and in some instances he has discussed the matter with me also. That does not apply to the general run of prosecutions. I suppose hundreds of them take place that I never hear about and no one in the Department of Justice hears about. I received a return to-day that in the last six months there have been forfeitures declared of cars and liquor amounting to $994,000. I never heard of those cases but the prosecutions have taken place. Those are conducted by the mounted police; but if serious matters arise such as the seizure of a
big vessel or a serious breach of the Customs Act. those matters would come to me through either the mounted police or the Department of National Revenue and in such cases we would advise. We do maintain general control of the mounted police, but "minister in control," as I think my predecessor will inform the house too, really means the person to represent the force in parliament, to see that the necessary supply is voted, to obtain any amendments that may be necessary to the law, and to have general charge of the force. So far as the internal economy of the force goes, I do not intermeddle at all. For instance, appointments, promotions and the, like come before me as a matter of form for, confirmation, but I leave these things entirely to the commissioner whom I believe to be, well qualified to manage the force. In legal matters in .more important cases consultations take place, but thousands o*f prosecutions art never heard of by the department.


James Layton Ralston: All I want to impress
upon the minister is that I submit that he should not, and I take it from his statement t-hait he does not, treat- the matter of control which is given by the statute as a purely formal or administrative matter. The police, after all, are like the military, used in aid of the civil power, represented in the person and office of the minister and for them he is responsible to parliament.
While I am on my feet, if I may refer to section 4, since we have discussed it-


Hugh Guthrie: As my hon. friend prefers.


James Layton Ralston: Perhaps my hon. friend
will permit me to refer to sections 4 and 5, the pension sections. Hon. members who have preceded me have spoken of the objection to this legislation on the ground that it seemed to put the police on the basis of a military force. The minister states that the police are not a military force, and of course we know that legally they are not. Nevertheless 1 submit that the explanation that appears on the opposite page would indicate that the police have the idea that they should be treated as on all fours with the permanent military forces of Canada as far as remuneration, pay and allowances are concerned. I submit that the adoption of that principle in connection with the administration of justice in Canada is dangerous, and that it is no sufficient reason for increasing pensions to the Royal Canadian Mounted Police that it happens that such and such a pension may be allowed to the military forces of Canada. The police are a civil force, their pensions are
Mounted Police Act

more properly approximated to the pensions of civil servants. That is the first point.
The second is, I submit that at this time when we are trying to soften a little the blows which the taxpayer is receiving, we should not rush to add further pension allowances or bonuses to the Royal Canadian Mounted Police, particularly when those who would benefit by this provision are men who have entered the service under a contract which did not contain any such provision; in other words that this is a straight bonus added to pay, there is no contractual obligation of any kind, and no moral obligation, I take it, to make these payments. It seems to me that this money can be saved. The Minister of Justice may say that only a few men are involved; that does not make any difference to the principle. I feel that we ought to know, and I ask the minister if he would give us the information or get it, just how many men and how much money are involved in jonnection with this amendment made by sections 4 and 5. I do not think this is the time to make ex gratia payments to members of the Royal Canadian Mounted Police, or anyone else for that matter, in view of the obligations resting upon the country at the present time.


Hugh Guthrie: I inquired this forenoon
as to the number involved, and the commissioner assured me it was four. He gave the names of two and said there would be two in the northwest though he was not so sure of them, but he said that four was the maximum.
This should be borne in mind, that these pensions are not free gifts to these men from the government of Canada. If this bill passes they will only be allowed to count the time served in South Africa in computation of the number oif years service, and they have to pay for all the years that are so added to their service period. The pension plan was originally formed on actuarial computations and was self-supporting. Now I am inclined to think it is not fully self-supporting, neither is the militia pension. Originally the Militia Pension Act was administered on the basis of contributions from the member's and was selfsupporting. It was when I was in the department some fifteen yearn ago, but I am inclined to think it is not self-supporting now. But the four men involved under this bill will have to pay all the arrears before they are entitled to count those years towards pension, and if the treasury of Canada is involved in the matter at all, it will be to a very slight extent. But I assure the hon. member that four is the maximum number of men.


James Layton Ralston: My hon. friend knows
that this amendment would never be suggested if these men have to pay in as much as they get out.


Hugh Guthrie: No, not as much.


James Layton Ralston: Then it is obvious that
there is a grant from the parliament of Canada, or this amendment would not be suggested. I suggest that the minister might well give us a statement showing just how much is involved and what payment would be received by the government on account of it. I presume it is a five per cent deduction for the yeare to be counted under this amendment.


Hugh Guthrie: I think I can furnish that statement to the hon. gentleman.


Mr. REID:: The minister pointed out that British Columbia is one of the provinces that maintain a provincial police force and in that province the Royal Canadian Mounted Police are not in charge. The municipal police and the provincial police there I think are fairly competent. My reason for rising at this time is to draw the attention of the minister to what I call a racket that has been going on in British Columbia in the municipality of Richmond this last year under the Royal Canadian Mounted Police. I think this is a proper time to call the matter to his attention, because if it is allowed to go on it is going to be very serious for the people and residents out in that province. Having had some municipal experience, I fully realize that there are cases in which one has to hire a certain type of person if the object is to catch someone who is selling liquor for instance or otherwise breaking the law. But we had in the municipality of Richmond last year men engaged by the Royal Canadian Mounted Police who deliberately went out and framed people. It was not a case of going out and asking a man if they could get a drink from him, it was a case of going and saying to him, "Would you like to make some money? If so I will provide you with some liquor." If the man fell for this story then in a short time the Royal Canadian Mounted Police came along and picked him up.
Let me lay this case also before the minister: this man has an electrical store in New Westminster. One morning there walked into his store a man with a small radio, saying he would like to exchange it for another radio. After some discussion he took another radio costing a little more and turned in this small radio in exchange. Half an hour later two Royal Canadian Mounted Policemen


Mounted Police Act
walked in and arrested that man for having a radio that was smuggled into the country. Where is that going to land' us if men like these are let loose on the country? In the liquor case also the man was hired by the Royal Canadian Mounted Police, and no action was taken even when it was drawn to the attention of the officers that the man they were engaging was a fugitive from justice in New Zealand and should not be in this country at all. When the police of Richmond endeavoured to get some information they found themselves blocked by the Immigration department officers, who said, No, we cannot give any information because we are a little afraid of the Royal Canadian Mounted Police; if we say or do anything we might come under their displeasure. It seems to me that all a man has to do if he commits some crime is to get hired by the Royal Canadian Mounted Police, and he will be immune. These matters are serious. The municipal police are endeavouring to and do enforce the law, the provincial police the same, and in an efficient manner and I do not think it is the duty of the Royal Canadian Mounted Police to hire men to go through the country and deliberately ask men if they would like to make some money, and if they ask. How? Oh well, we will supply you with a little liquor and the bottles and the labels. This thing has been going on for some considerable time.
I have in my hand a court record. It has to do with a case in which a man was picked up by the municipal police and charged with selling liquor. When he was in the witness box the judge called him a blatant and unrepentant liar, and he was in the employ of the Royal Canadian Mounted Police. As one who has looked into the matter I say that if this thing is not stopped and if men hired by the Royal Canadian Mounted Police can go around the country, frame you and report the matter to the Royal Canadian Mounted Police who come along shortly after and pick you up the lives of people will not be safe. I should like the minister to take serious note of this, also to tell the house if any of the moiety was paid to these men, and what moiety they receive.


Hugh Guthrie: None.
Mr. REilD: I understand from the statements of the men that they were engaged at $150 a month. I realize that perhaps a certain type of individual has to be hired to do this kind of dirty work, but surely we are not going to have the mounted police stoop 92582-55
to engaging men who then deliberately go around doing these things, really encouraging the people to break the law. I have the case of a young man who had left Halifax and was going along one of the roads in British Columbia, destitute not knowing whether he could find work or whether he would be taken into a camp. A man came along and asked him if he would like a lift, and naturally he said he would. During the course of the ride the man asked him if he would like to make a little money. Just imagine asking a destitute man that question; naturally he said he would, so the man said, "I will put you wise to this" and fix you up. So he proposed to supply him with the liquor and the bottles and let him set up for himself, and the boy fell for that proposition. The next day the mounted police picked him up. To me it looks very much like a little racket. Either these men are getting paid for doing this sort of thing or they want to show the great activity of the mounted police in British Columbia. This is a very serious situation, and I want the minister to give an assurance that this will be looked into and investigated and an end put to this kind of thing.


Hugh Guthrie: Again I would suggest that my hon. friend bring up this matter on the estimates rather than on this bill. As I understand it this alleged racket is in the municipality of Richmond?


Thomas Reid: Yes, it was, but it is also being carried on in other parts of the province.


Hugh Guthrie: If my hon. friend will write me a letter or give me something definite to investigate I will be veiy glad to do so. His statement, which I will read in Hansard to-morrow, is very general, and I do not know just where I would start in order to investigate it, except that I could make some investigation in regard to the municipality of Richmond. As to the moiety, there is no moiety that goes to the police. Any rewards, fines or anything of the kind go into a trust fund and the men get nothing themselves.


Thomas Reid: Certainly I will write the minister, but if he wants the information now I ran give him all the details.


Hugh Guthrie: Or if my hon. friend would give me the facts when the estimates are going through I could attend to it then.


Mr. HOWDEN:: It was with a decided sense of regret that I listened to the charges made against the Royal Canadian Mounted Police. No one could have lived in western Canada at about the time of the northwest

Mounted Police Act

rebellion, and since without being thrilled with a certain degree of pride in the old Royal1 Northwest Mounted Police. No finer body of men either physically or mentally was ever gathered together in any part of the British empire, and if they have degenerated through being brought to eastern Canada I thiink it is a great pity and a great shame. I sincerely hope that these charges will be thoroughly investigated and checked up, because it seems a pity that a force of men with such traditions should be exposed to such charges if they are not well founded.


Mr. VALLANCE:: I made a few notes during the course of this discussion with regard to the mounted police, and I wish to associate myself with what has been said by the hon. member for St. Boniface. I have lived in western Canada for twenty-nine years; I know something of the operations of t'he old Royal Northwest Mounted Police, and the cause that suggested itself to me for these changes was the cause that has been suggested by the hon. member for St. Boniface. It must be the influence of eastern Canada, because with the exception of British Columbia we have had no complaints from those provinces where the old Royal Northwest Mounted Police were most active. It was with a great deal of disappointment that I listened to the charges that have been made. 1 hope the minister will investigate these matters in order to see if it is not possible to clear the name of that great body of police.


Mr. YENIOT:: As a member from the
east who has made charges against the Royal Canadian Mounted Police let me pay my tribute to the old force. I have not a word of criticism in regard to the old Royal Northwest Mounted Police; I only wish the spirit that actuated that old force was actuating the force at the present time, especially in the eastern part of Canada. I think the trouble is with the younger recruits, and let me say to my hon. friends from the west that when those recruits are taken into the force they are sent to Winnipeg for training, so perhaps it is the influence of the west that has led them into the wrong path on their return to the east. They are taken west for three or six months to be trained in the enforcement of law, but in spite of everything the force has been invaded by a certain number of unscrupulous individuals who are bringing dishonour upon the Royal Canadian Mounted Police. They are doing that down east, but they are not all eastern recruits; some of them come from the west, as my hon.
I Mr. Howden.]
friends know. Those of whom I have complained, however, are not from the west; I am sorry to say that they are maritime men, and they are not the type of men who should be in the mounted police. I do not want to name anyone here to-day, but I could sit down with the minister privately and give him the names and records of some of these men who are being protected by certain superior officers for reasons of their own.


Thomas Reid: As a western, member who
has made certain charges I do not want anyone to think I am endeavouring to cast any slurs or any discredit on either the old or the present force. My complaint was with regard to the stool pigeons who have been operating in the province of British Columbia.


Charles A. Stewart: I am not
sure that this is the proper place to make the inquiry, but on a number of occasions I have discussed with the minister the question of a few very old mounted policemen who for some reason or other did not have their pensions increased when the general pensions were reviewed. I think there are not more than twelve or fifteen of these old pensioners, and I know this matter has been before the minister for some time.


Hugh Guthrie: It was there before my
time.


Charles A. Stewart: If I am not out of order I would ask the minister now if further consideration has been given their case.


Hugh Guthrie: There is an application
up for consideration at the present time, and I believe similar applications have been made for the last fifteen years. The case they make out is that they were retired when pay and allowances were less than they were when the latest pension regulations were fixed, and consequently their pensions are based upon the pay and allowances which prevailed in their time. If they had been pensioned at a later date their pensions would have been larger. Up to the present time it has not been thought proper to grant their request. We can view it rather sympathetically, perhaps, because of the hard times and the smallness of their pensions, but I do not think they have made out a very strong case for an increase in that regard. They were pensioned according to the pay they received and according to the rates of pension at the time of their retirements. Could we justify an increase in the pension now by reason of the fact that subsequently pay was increased

Mounted Police Act
and the amount contributed to the pension fund was greater than in former days? That is the case.


Charles A. Stewart: My information may be at fault, but the complaint they make to me is that they have not received the same treatment that was accorded men who served perhaps not at exactly the same time or who were retired at the same time, but who subsequently had their pensions increased. The minister's statement is correct; they are receiving pensions comparable with the pay and allowances they received when on service. Their complaint was that others were no more entitled to increases than they were. In other words, they alleged discrimination.


Hugh Guthrie: I do not believe there is any ground for alleging discrimination, but if the hon. member wishes I shall bring the application here and let him read it. I think it is based solely upon the fact that at the time they were pensioned the pension rate was lower and the pay was lower. Subsequently the pay and the rates were increased, and they seem to feel they should be included in it.


Charles A. Stewart: I do not wish to prolong the discussion but is it not a fact that other retirements at a later date have received consideration. Naturally when the pay and allowance were lower the pension would be lower. They complain that their application has not received any consideration.


Hugh Guthrie: I am not aware of that fact but I shall make inquiries. If the hon. member would mention the point when we are discussing estimates I would be glad to give him the information.


Sir EUGENE FISET:: I think the minister is correct in his stand. If we deal with these fifteen cases in connection with the Royal Canadian Mounted Police we will have to deal with numerous cases in the permanent force. I believe the positions are exactly parallel. We cannot apply one principle to one force and not apply it to the other.


Charles A. Stewart: I am not aware as to how far-reaching the application may be. Their contention was, briefly, that while others on a somewhat higher rate of pay had been given consideration, these fifteen cases had been refused. That is the statement which was given to me, and the one I have presented to the minister.
92582-55J


Mr. POULIOT:: Before this discussion is terminated I should like to make a suggestion to the government. We learn from the press that the Royal Canadian Mounted Police will have new quarters involving high expenditures. What I cannot understand, sir, is why the servants are lodged before the masters. The masters are the judges of the Supreme Court of Canada who still have to sit in a former stable. It is a shame to give the judges of the supreme court such poor accommodation, while on the other hand we supply the Royal Canadian Mounted Police with a new building which will cost several millions of dollars.


Mr. McINTOSH:: Where is it?


Jean-François Pouliot: I do not know, but I have heard about it. I suggest to the government that before laying the foundations of a new building for the Royal Canadian Mounted Police there should be a new Supreme Court of Canada.


Hugh Guthrie: Hear, hear.


Jean-François Pouliot: There should be a new building for the judges, and I am sure it would be proper for the Minister of Justice to lay the corner stone of that building, because from his experience as a jurist he is entitled to sit on the bench of the highest tribunal of this country.


An hon. MEMBER:: Is that a prophecy?


Jean-François Pouliot: No, but a suggestion made with the desire that the supreme court judges be given consideration by this government. The Prime Minister is a leading member of the bar. For some time he was president of the Canadian Bar Association, and has always mentioned-except in his new legislation-his high regard for the judiciary. It is probably because the Minister of Justice is the best candidate for the bench that the right hon. gentleman has him sitting to his right.
To conclude, it seems that the government puts la charrue devant les boeufs-the plough before the oxen, when they suggest that there should be a new building for the Royal Canadian Mounted Police before erecting a new supreme court building. Such action has been taken in the United States. This government lacks imagination; it should take this lesson from the great country to the south. A new and imposing building has been erected in Washington for the accommodation of the supreme court judges, and I believe that was a timely expenditure.
Then, further, before we spend money on a Royal Canadian Mounted Police building, the parliamentary library should be made

-/ *
Mounted Police Act
fire proof, a suggestion which has been offered often in this chamber. I cannot understand why the government does not pay more attention to the protection of the real treasures we have in our parliamentary library. I have had the use of the library for a number of years, and I have discovered valuable books which could not be replaced for any sum of money. The government knows that in 1848 the Quebec legislative buildings were destroyed by fire. At that time it was our only parliament-


Some hon. MEMBERS:: Order.


Jean-François Pouliot: Would it be impossible to do that work before building for the Royal Canadian Mounted police? This is the argument which exists-


The CHAIRMAN (Mr. Smith, Cumberland):: I do not think the hon. member's
remarks are relevant to the bill.


Jean-François Pouliot: Is it not relevant to the bill to say that the master should be lodged before the servants, and that the quarters for the servants should be in the master s house? That is why I suggest there should be a new supreme court building before we build an imposing structure for the Royal Canadian Mounted Police. I make the same suggestion with regard to the library, and I hope no one in this government entertains the view of Caliph Omar who had the libraries of Alexandria burned, with the books therein, because he thought no one should read books. I do not Tecall this historical fact to hurt the feelings of my hon. friends in the far corner of the chamber.


Hugh Guthrie: Of course, a discussion
of the building erected for the police is not included in this measure, I will tell the hon. member however that I am very much in accord with his observations, and I shall take good care to supply Hansard to my leader in order that he may read it.
Short title agreed to.
On section 1-Publication in Canada Gazette.
Mr. CAlSGRAIN:	I notice that under
section 1 the purpose is to repeal a section >f the act. On the opposite page I find an explanation, and it is indicated that under the section as it stands at present the regulations made under this part shall be published in the Canada Gazette. I should like to have some explanation as to why the section should be repealed. In my view the publication of such regulations would seem to be important.


Hugh Guthrie: It is purely a matter of
convenience. I am not particularly concerned, but it has been represented to me that there are a great many minor details on which regulations are made, and which could be included in what are known as general orders issued from time to time and circulated among the members of the force. The former provision was that nearly all such regulations had to be published in the Canada Gazette. The proposal now is to allow publication of such details in general orders, so that they may be circulated in that way. These regulations refer almost exclusively to the internal management of the force, and I do not believe they are matters of public concern. However I am indifferent as to. what happens to the section in the bill; it is recommended to me as a matter of convenience.


James Layton Ralston: I would suggest the minister should not press it. It seems to me this is the only provision we have which permits the public to know about the regulations. My hon. friend will remember that the militia orders are published in the Canada Gazette.


Hugh Guthrie: I move that section 1 be stricken out.


[Stage Direction]
Motion agreed to.
On section 2-Trial and punishment.
James Layton Ralston: I should like to ask the minister if he has checked the lettering of the paragraphs referred to in subsection (5).


Hugh Guthrie: I think they are correct; (e) refers to the receiving of a gratuity or bribe; (i) refers to mutinous conduct.


James Layton Ralston: I do not think that is applicable. That is my point. I think it should be (e), (j) and (k).


Hugh Guthrie: Yes, that is right, and I thank my hon. friend for drawing my attention to it. The paragraphs should be (e), (j) and (k), not (e), (i) and (j), Mr. Chairman, and I move that the section be amended accordingly.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 3-Application of penalties.
James Layton Ralston: I would suggest that the same change ought to be made in subsection 2 on the top of page 2 of the bill.

Farm Loan Act


Hugh Guthrie: Yes. I move, Mr. Chairman, that the section be amended to read paragraphs (e), (j) and (k) instead of (e), (i) and (k).


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
James Layton Ralston: Would the minister allow sections 4, 5 and 6 to stand until we get the information in regard to expenditure?


Hugh Guthrie: I have no objection.


James Layton Ralston: And section 7?


Hugh Guthrie: Is there any information required in connection with clause 7?


James Layton Ralston: It is all with regard to pensions, and clause 7 fits in with clause 6;
I am not sure but I think it does.


Hugh Guthrie: Then we will allow sections 4 to 7 inclusive to stand.
Sections 4 to 7 inclusive stand.


Eugène Fiset: When the minister is furnishing the information that has been asked for, would he be kind enough also to give us a list of those who are drawing military pensions under subsection 9 of section 4? It reads:
Time served with the military forces for which a pension has been granted under the provisions of the Militia Pension Act . , , shall not be included.
I take it for granted that these men are drawing their long service pension as well as the pay they are entitled to receive from the force.


Hugh Guthrie: I will get particulars of that also, Mr. Chairman.
Progress reported.



CANADIAN FARM LOAN ACT


[Stage Direction]
Hon. E. N. RHODES (Minister of Finance) moved the second reading of Bill No. 15, to amend the Canadian Farm Loan Act.
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Smith (Cumberland) in the chair.
On the short title.
Mr. HANBURY:: Mr. Chairman, when the resolution preceding this bill was 'before the house, from the acclaim with which it was accepted I was under the impression that I
was attending a meeting of the farmers of Canada rather than a meeting of the House of Commons.
I Should like to refer to some of the remarks that were made by the hon. member for Souris (Mr. Willis) who, if I remember correctly, complained about the difficulty in procuring loans. His complaint was, I think, that the officers of the board either were using too much discretion or that they did not have sufficient authority to loan money in certain areas in the district which he represented. Remarks from members on all sides of the house who supported the resolution on that occasion led me to believe that their impression was that these moneys were not so much to be loaned on an economic and sound basis as they were to be put into the bands of the farmers on a basis which was probably not sufficiently sound to encourage the investment of private capital. The hon. member for Souris in his remarks, critical I may say of the administration of the farm loan board, questioned their judgment, and my impression, from the remarks of other hon. members was that probably it is more a question of government policy whether the farm loan board should loan money in certain areas and as to the conditions under which it should 'be loaned. I would like very much for the minister to state to the house as definitely as he can his opinion as to the soundness that is going to be required ^ loaning of this money. In other words, are-we through this measure going to give money where it is not always economically sound to-loan it? Are we going to put it into the" hands of the farmers of this country as a matter of national policy? While I quite agree that that might be a desirable policy I am not discussing that at the moment, but I think we should know at this time what the policy of the government is going to be and what instructions are to be given to the farm loan board. Are they to take into con* sideration the necessities of the situation in so far as the development of agriculture is concerned, or are they to be a farm loan board, and not a farm gift board? I would like the minister to give us some assurance of what we may expect in this regard.


Mr. RHODES:: Mr. Chairman, the discussion when I moved the resolution and later in committee on the resolution itself covered a wide field, and I thought I had endeavoured to make it clear that the purpose of the board would be to deal with each individual case on its merits, the main purpose and

Farm Loan Act

object being to assist preferably the deserving and worthy farmer; or I might make it stronger than that and say, the farmer who after having received a loan is likely to succeed upon the farm.
The criticism that my hon. friend referred to which came from the hon. member for Souris was applicable to the policy which had been pursued through the provincial board, and my hon. friend will bear in mind that hereafter there will be no provincial boards. But even in the case of the provincial boards, as I understand it there were no areas proscribed. Naturally one would think that a prudent man would scrutinize with extreme care an inquiry for a loan in an area where crop failure had covered a period of years. But I do think that there the long view would have to be taken, and that even in those areas where, covering a period of many years, there had been on the whole good crops, the man himself being a good farmer and a good moral risk, there would be no reason why in a case of that character there should not be a reasonable degree of latitude on the part of the farm loan board. In other words, it goes without saying that the first class risk, the highest class risk in the ordinary course of events would foe taken care of either by individuals or by loan companies in the loaning business. It does not by any means follow that the government must be called upon to take second and third class risks, but I do say that the government would be justified, having in mind the desirability of assisting the farmer and keeping him on the land, in taking a wider measure of risk than would be taken in the case of an individual motivated solely by the desire to invest his money profitably. I do not know whether I have covered the question put by my hon. friend; if not, I shall be glad to endeavour to answer any supplementary questions which he might wish to ask.


Wilfred Hanbury: I thank the minister
for his remarks, and I think we are getting close to the point I wish to have covered. Before I make any further remarks however, I should like the minister to answer this question. Is it the policy of the government that all risks must in the past have been high class risks?


Edgar Nelson Rhodes: I could not answer that
by a direct yes or no. The farm loan board has been in operation a number of years and has endeavoured to conduct its operations prudently. In fact, the criticism has been that it has conducted its operations too prudently; we have heard such criticism in 
the course of this debate. If there is any criticism against the operations of the board it is that they have been too careful in their loaning operations.


Wilfred Hanbury: I am rather anxious to
have this point cleared up, because although the minister stated that the criticism of the hon. member for Souris was with reference to the provincial board, I have a distinct recollection that he did also make some reference to the board as it exists in Ottawa; and I believe he went so far as to suggest that there should be changes and removals. It is for that reason that I should like to have that point cleared up. The minister pointed out to us that in the loaning of money to high class risks, there was probably even to-day private money available for the purpose.


Edgar Nelson Rhodes: For the highest class.


Wilfred Hanbury: Yes; private capital is
available for that to-day. Consequently, if for that highest class risk money is available, then the government will have for their loans the high class or the questionable risk, and I think all members should know definitely, what the policy of the government is to be. If we are making this a farm relief act we should know it; if it is a farm loan act we should know that also. Are we loaning money or relieving farmers? Are we going to make loans on high class risks or are we going to give the board instructions that now they may consider the questionable risk on the basis indicated by the minister, that the value of equity is not to be the only consideration? I think he is justified in taking that view. In the past we have prided ourselves on such a thing as a man establishing credit, and that is something which I think should exist in this measure. But it is absolutely important to the people of Canada to know how this board is going to function. Is it going to function as a distinctly farm loan board or are we to take the question of risks into consideration and to that extent have the act function as a farm relief measure?


Edgar Nelson Rhodes: It goes without saying
that when this act was passed four or five or six years ago the board was established not because the government desired to go into the money lending business but because there was felt to be a need at that time for this type of legislation. I pointed that out in my remarks during the discussion of the resolution.

Farm Loan Act


Mr. GARLAND (Bow River):: And because we have the balance of power.


Edgar Nelson Rhodes: It is intended that the
business should be conducted as a farm loan business and not as a relief undertaking. But at the same time, every hon. member knows quite well that the object in mind with the old government, as it is with this government and would be with any government, the main object in mind was to lend assistance to the agricultural interests who would be denied an opportunity of getting loans were it not for this act. The need has become greater during the last two or three years, for reasons which are obvious. I do not know that I can say anything more. I think the act will have to be administered with a reasonable degree of prudence, but no government would be wise to allow the board to operate in such a negligent way as to throw its money away. Care will have to be exercised; but having in mind the main object, namely, to assist the worthy farmer who is likely to succeed, certainly a reasonable degree of latitude ought to be allowed.


Mr. ROWE:: The remarks of the hon. member for Vancouver Burrard (Mr. Hanbury) give rise to a point in regard to which there may be misapprehension as to the credit of the farmers themselves. Some of the statements made on the resolution before the house the other day, so far as Ontario is concerned at any rate, might seriously impair the chances of the farmers of even securing loans under t'he Canadian Farm Loan Act. I think much can be said in favour of taking into consideration the element of personal credit as well as that of land values, as mentioned. I agree with the hon. minister and appreciate the attitude he has taken. In Ontario we are in an even more difficult position than I indicated the other day-


Wilfred Hanbury: Why bring that up?


William Earl Rowe: Well, the reason I bring it up is the fact that we have had in that province for a period of over twelve years what is known as the Ontario agricultural development board which I think all hon. members will agree has been functioning not especially with a view to relief but for the assistance of the farmers throughout that province during that time. When the government changed last June, as governments often do, we had 900 applications that had been passed, inspected and approved of by the board, mortgages prepared and in many cases registered. For months these farmers waited daily for their
money and 500 more in respect of which inspection fees had been paid, many of the applicants not having had their fees refunded, daily expected results. But the practice of a policy covering a period of twelve years was immediately and completely reversed. I mention that fact at this stage as there might be some misapprehension with regard to the credit of the farmers of Ontario and the soundness of that policy as it had been carried out. I say this for the benefit of those who will be administering this act, so that the chances of the farmers of Ontario to secure loans under this legislation will not be too seriously impaired. Everyone will agree I think that when a policy has been in operation for twelve years, involving a sum of over $50,000,000, so far as farm mortgage loaning is concerned, it is almost entirely removed from private corporations or individuals. The farmers therefore have little recourse other than to apply to the government, which they have been doing.
The other day some statements were made that reflect upon the soundness of that policy and might have an adverse effect upon the continuance of loaning to the farmers. I did not interrupt the hon. member for Fron-tenac-Addington (Mr. Campbell) when he was speaking as there is a time-honoured custom that when an hon. member is making his maiden speech, no matter what ridiculous statements he may make or how excited he may get, we should not interrupt. He made a very spectacular statement; he said:
I want to make it clear to all hon. members that prior to the month of May the interest rate on farm loan mortgages in Ontario stood at six per cent. During the election campaign, in which I had the privilege of taking an active interest-
We are quite aware of that.

it was announced that that rate would' be lowered to five and a half per cent and it was cut to five per cent during the heat of the election.
As a matter of fact, I might inform the hon. member for Frontenac-Addington in all kindness, while his speech was fine in form, it was somewhat ridiculous in fact. The interest rate on loans in Ontario has not been six per cent for almost ten years. Some years ago the late Ferguson government reduced the rate from six to five and a half per cent. During the last session of the Ontario legislature the matter was discussed and debated there on several occasions and prior to the last election the rate was reduced from five and a half to five per cent. Before the heat of the election, as spoken of by
Farm Loan Act

the hon. member, the rate was reduced and became effective at five per cent, as every hon. member from Ontario knows, weeks before the election. In the heat of the election I think it was stated that if the then government were returned, they would reduce the interest rate to a lower figure. Since that time another government has been in power and immediately on assuming office it discontinued that policy entirely. The fourteen hundred farmers to whom I have referred waited daily for some relief, some assurance, something definite to know whether they would be compelled to go to private individuals or mortgage companies in order to secure the money for which they had applied and to accept the loans in connection with which inspections had been made and which the old board had passed.
I do not wish to delay the committee on this bill, but the hon. member for Frontenac-Addington further stated:
When the new provincial government took office they made an investigation to find out just how the agricultural development board stood, and they discovered that some $55,000,000 of the people's money had been loaned throughout Ontario. One unfortunate experience -was that many loans had been made, not for the purpose of allowing a farmer to permit his son to purchase a farm and some new stock and start up in business, or for the farmer to improve his farm, by building a new barn or house, but rather at the instance of influential people, supporters of the late government.
I doubt if there is an hon. member from Ontario who can give one instance where political influence had any bearing. He says further:
That is a serious statement to make.
It is a serious statement to make when he follows it with the further statement that the provincial government have been making loans since. He stated that in November of last year some seventy-two loans were made, amounting to about $140,000. I challenge him to show a single loan that has been made on the initiative of the provincial government, and rather than boasting of the seventy-two loans that he says were made, he should apologize because there are only seventy-two out of one thousand four hundred, nine hundred of which were approved by the board. There are still more than eight hundred farmers whose loans have been approved and who are still waiting for some advance.
The hon. member for West Elgin also made his maiden effort and I did not wish to interrupt him, but his statements were no less

reckless, though his speech was not quite so long as that of the hon. member for Frontenac-Addington. He said:
In reference to that board, what were the conditions the present government found when they assumed office? They found stacks of applications that had been passed' by the Henry government.
This statement is rather conspicuous merely as an insinuation that he had some inside information and it was due to political influence they had been passing the loans. As regards that feature of the matter I wish to point out to the committee that I have secured the last report of the Ontario agricultural development board and the ridiculousness of these statements is shown by the fact that in 1933, the previous year, that board had made seven hundred and forty-two fewer loans than they did in 1932, and for the first eight months of 1934 they loaned $1,600,000 less than they did in 1933, so that the loans that were being made in Ontario were evidently being lessened every year.
Much has been said with reference to the maladministration of the Ontario agricultural development board as an excuse for not helping the farmer, but may I point out that while it has been said that this board has been recklessly handled, they had a surplus in administration costs and carrying charges of $769,458.67, as shown in the report to which I refer. I have failed to see why we should apologize for the actions of the former provincial government in that regard. It was further pointed out by the hon. member for West Elgin (Mr. Mills) that 18,000 Ontario farmers, who were evidently friends of the government, had been loaned $51,000,000 and that if those loans were liquidated to-day, they would not be worth $15,000,000. This is a point I wish to emphasize because it reflects upon the credit of the farmers of Ontario, and upon the soundness of their land holdings and it might impair the possibility of their securing loans from the duly established board under the amended act that is now before the house. I think every hon. member will agree that the statement made by my hon. friend is a ridiculous one. I ask, in all kindness to him is a new member, how he ever reached that figure. There is another time-honoured custom in this house that a member should be careful not to make statements without giving them sound thought and preparation. I see some hon. members smile and after listening to him yesterday I think I know why. If one made throughout Ontario the inspection that would be necessary to be able to make that type of statement, I will leave

Farm Loan Act
it to any hon. member if he would consider that a reasonable assumption, because it is a most ridiculous one. In the first place the Ontario agricultural development board's policy has been for twelve years not to loan more than fifty per cent of the farm value. It is very true, with arrears of interest, that might in years such as those through which we have passed, accumulate an obligation more than fifty per cent. The value in many cases was the value before the war, because inflated values of war time were not taken into very much account by the average inspector. In my local district as in many other parts of Ontario one hundred acre farms were valued at from S8,000 to $12,000 long before the great war. These 18.000 loans in Ontario average only $2,200 each. In exceptional circumstances they might be as high as $4,000. If this is a reasonable assumption then the insinuation seems to be that farms that were originally worth $8,000 in Ontario are to-day only worth $1,800, and farms formerly worth $4,500 are now assumed to be worth $900, and farms formerly worth $2,000 the newly elected hon. member would say are worth only $450. I wish to impress on the committee that the soundness of Ontario farm values is not so badly impaired as is suggested. If $36,000,000 of the $51,000,000 that has been loaned will be lost, as suggested, then it would be our duty not to support the second reading of this bill. In that case our agricultural situation would be next to hopeless. I do not know why that statement should be made other than to justify those who have neglected, inexcusably neglected their obligation at a time that has been very critical for the farmers of Ontario. The policy of securing money from the board has been established and now when appeal is made to private individuals applicants are asked why they do not get it from the government.
I make this statement in an endeavour to show as clearly as I can a true picture of the farm loan situation in Ontario. I wish to urge upon the minister on behalf not only of the farmers of Ontario but those of every part of the country that he should secure money for the farmers, as I feel satisfied he will, at the lowest possible interest rate. I know every hon. member who is interested in agriculture, as we all are, appreciates the fact that the farmers have had a difficult time in recent years and that the prices of many things they have had to buy have not fallen to the same degree as the prices of what they produce, so I think it is necessary for the economic soundness of the country that we should have as low a rate of interest as it is possible for the
government to give in view of the cost of long term bonds, their carrying charges and the necessary reserves.
In Ontario our situation, is a little different, for we have never had the Canadian Farm Loan Act in operation in Ontario. Whether it was owing to the struggle for power or for whatever reason, all parties in Ontario said they were in favour of lower interest rates. The Minister of Agriculture in Ontario not long ago stated emphatically that no matter what rate this government charged under this new Farm Loan Act, the farmers of Ontario will not have to pay more than four per cent, and the balance, if any, will be paid by the province.


An hon. MEMBER:: Hear, hear.


William Earl Rowe: I hear an hon. member say
"Hear, hear," and I am quite in agreement with him; and I am very glad that the farmers of Ontario will in no event have to pay more than four per cent in the future. May I also remind the committee that Ontario has given loans at one per cent less than the Dominion board for some time, and that is all the more justification for the remarks I have made as to the soundness of Ontario agriculture. I have heard the former Minister of Agriculture (Mr. Motherwell) in this house and others say that the risks in Ontario have not been as great as in some other provinces, and probably that is the reason why when the late government was in power and since the Canadian Farm Loan Act was put into effect in 1927, farmers in Ontario enjoyed this one per cent advantage. The Ontario agricultural development board were making loans in Ontario at one per cent less at all times than the dominion government, and for a short time one and a half per cent less. So even if the rate in the future should be left at five per cent the Ontario farmers will still enjoy a one per cent advantage, according to the statement made by the present government of Ontario. I have not too much faith in that government but I must commend them for that statement; I hope they will keep their word. So, whether or not this government see fit to lower their rate below four per cent, which I doubt is possible, I am not particularly concerned about their action, as to the rate of interest, because it Is mot a question of what the farmer in Ontario will have to pay, it is a question of who will have to pay the difference.
I do not wish to keep the committee longer, except to say that I think the farmers of Ontario during the last three or four years have shown what they can accomplish and to emphasize the fact to which I have already
Farm Loan Act

referred that loans have not been increasing as hon. members have said, for we had 742 less in 1933 than in 1932, and they loaned $1,600,000 leas in the first eight months of 1934, although that was prior to an ejection. Therefore I think it is impossible for anyone to claim that loans were made for political purposes, or to doubt the soundness of the agricultural situation in Ontario which by all the signs of the times is at least slightly and gradually improving.


Mr. GERSHAW:: The point I wish to
bring to the attention of the minister has already been mentioned. It is this, that up to the present there certainly have been areas absolutely excluded from any benefit of the farm loan board. The area in which I live is one of them. When a farmer applies to that board for a loan he is told that no loans are being considered in that whole district. They do not ask him what his prospects are, or his assets, or inquire into his ability or anything. I have many letters to that effect. I should like the minister to give us some assurance that these individual cases will be decided on their merits rather than all come under one general rule.


Edgar Nelson Rhodes: I have on a number of
occasions endeavoured to make it very clear that each case would be considered on its individual merits, irrespective of the location of the area. It may be that the hon. member was not in the house on those occasions, and I am very happy indeed to repeat that assurance to him.


Mr. BROWN:: I am glad that the finance
minister has made that statement so clearly and frequently; I think it ought to have been impressed on the house by this time, that in future loans will be considered on their merits. I listened with much interest to the speech of the hon. member for Souris (Mr. Willis), I do not always agree with him but I felt on that occasion that he was stating a very real grievance. The hon. member for Souris represents a district in Manitoba which more than any other perhaps has suffered from the drought. He pointed out, very correctly, that in that district there are large areas which in the past have produced enormous wealth, districts where they have the finest equipment and buildings, and there is no reason why many of those men should be refused a loan. I had a similar grievance, for the matter was brought to my attention that loans were being refused in what was spoken of as the dried-out area. I made a protest myself to

the Manitoba authorities and also to the dominion head office, and I got word from Doctor MacLean that it was not the policy of the central office to rule out the dried-out areas altogether, but rather that cases would be considered on their individual merits. I would like to point out and emphasize the fact that while some of these districts, including part of my own territory, have suffered from drought for the last two years, that is one of the very finest countries under the sun. There is no reason why there should be any discrimination against a section of the country because, for a period of two or three years, there has been drought in that district. There are men with well established and well equipped farms who need just a little help to tide them over. We have all confidence in that country; we believe rain will come again, and that is all we need in order to produce a large amount of wealth in the future. So I say again that I am glad the minister has made the statement that each case will be decided upon its own merits.


Mr. COOTE:: I was very glad to hear the statement of the minister in regard to the point raised by the hon. member for Medicine Hat. Undoubtedly in the past some of the provincial boards have taken the attitude that they would not consider applications from certain areas. I have gone into those areas and found farmers making a decided success. It is true that they were living in so called drought areas, which had been abandoned by a good many farmers, but these men knew how to make a living there; they were making good, and I think in many cases were catching up with their liabilities. So it seemed to me a wrong attitude on the part of a provincial board to practically tell a man that he lived in an area from which they would not even consider applications for loans.
I just want to add at this time, taking into consideration the condition of agriculture and the terrible time it has gone through, the government should make provision for the granting of credit under the farm loan board at a rate of four per cent, with any cost above that assumed by the Dominion of Canada. I am not sure, but perhaps the hon. member for Yancouver-Burrard will object to that. A few moments ago he spoke of first class farm loans, but many loans that were considered first class a few years ago now are far from that. That is due to conditions altogether beyond the control of the farmers. The reason for this condition has been the drop in the price level of the things the farmer produces. It might be

Farm Loan Act
worth while telling this committee once more the drop that has taken place in the cash income of the farmers of Canada. These figures were given in connection with a chart that recently appeared in the monthly letter of one of our Canadian banks. In 1926 the cash income of the farmers of Canada was
8941.000.	000. In 1932 it had fallen to
8396.000.	000, which was only 42 per cent of the 1926 income. It is quite evident that interest could not be paid out of a net income that had been reduced to that extent. In 1928 the income was 81,113,000,000, so there was a drop from 1928 to 1932 of 64 per cent, or in other words the cash income of the farmers of Canada in 1932 was only 36 per cent of the income in 1928.
In reality the solution of the farm credit problem is to restore the price level of farm products. No matter what we may do for the farmers in the way of credit facilities, if we do not do something to raise the price level of farm products we cannot get a satisfactory credit system. At the present time the price level is improving, but as yet it is not at a point which will allow the farmers to carry their present burden of indebtedness. The loan value of our farms is largely determined by the rate of interest charged on farm loans, as the amount of loan that a farm can carry and pay interest on is determined as much by the rate of interest as by the size of the loan. I believe the rate of interest is the important thing for us to consider in connection with this act, and without taking up more of the time of the committee I want to urge on the minister that the government assume any necessary costs of administration and so forth, so that loans may be made under this act at a rate of not more than four per cent per annum.


Mr. GOBEIL:: When the resolution which preceded this bill was under consideration the other evening the hon. member for Laprairie-Napierville (Mr. Dupuis) is reported as having said:
I have tried to find a reason why the government is bringing down this legislation at this late hour. I have asked myself: Is it because they have tried that other legislation called the Farmers' Creditors Arrangement Act which they passed last year, and which as a matter of fact has completely destroyed the credit of the farmer of eastern Canada?
I am reported as having said:
It was all destroyed before that law was passed.
I do not rise to withdraw a single word of that affirmation, but it certainly calls for some explanation which I could not give on that occasion. In the past, and even to-day,
the farming population of Quebec have had the best credit of the whole community. They were considered, as I am sure they are considered to-day, honest as a class. There are exceptions in all classes, but I think they had and still have the reputation of being first class credit risks.
When I made that declaration I wanted to point out that the act referred to by the hon. member had not destroyed the credit of the farmer, but that his credit had been destroyed, so far as that could be done legally, by previous measures passed by the provincial government of Quebec. One of the causes of the impairment of the farmers' credit is the number of preferred debts that in Quebec have precedence over the first mortgage. Being an ordinary layman I cannot speak as a lawyer, but I am told by persons who should know that we have almost twice as many of these preferred debts as any other province in Canada. I should like to enumerate some of them. First there are the legal costs. I suppose they are preferred in every province, but I should like to point out that in Quebec they are certainly not lower and I think probably they are higher than in any other province of the dominion. Funeral costs are preferred before the first mortgage is paid, together with the expenses of the last sickness, and the cost of ploughing and seeding for the current or the last season. Then, it is only fair that the taxes should be paid. The cost of labour, material and the bill of the contractor for any buildings erected on the property or on the farm are paid before the first mortgage is considered and the wages of servants are paid. As hon. members will see, this is a long list of preferred bills which in many cases may take up half the value of the mortgaged property. In this way the credit of the farmer is further decreased. In making these observations I am not being critical; I do not say the measures are no good or do not serve any useful purpose. I simply wish to establish my contention that even before the act to which reference has been made was passed the credit of the farmer was destroyed beyond repair. Certainly his credit was very much decreased when the moratorium on mortgages was passed tow or three years ago by the legislature of the province of Quebec. It was further decreased when legislation was passed exempting from seizure certain stock, implements and cattle-going as high as ten cows-a team of horses and a complete stock of farm implements. I am not criticizing this law, but I do say it had the effect of decreasing or impairing the farmer's credit, when the lending
Farm Loan Act

party was considering lending money on first mortgage. The moratorium is still in effect in the province of Quebec; if interest and taxes are paid, no mortgage can be collected.
Then, there is a further factor which has had something to do with impairing the credit of the farmers, namely the privileges given to different firms selling on terms. As a layman I thought this matter was within the competence of the federal parliament, but after consulting able lawyers I was told it was a matter which had to do with civil rights, and that there could be no doubt where the jurisdiction rested. In my opinion in the last few years probably more than at any other time these privileges have done a great deal to destroy the credit of the farmer. In the province of Quebec companies selling on terms have the privilege of remaining the owners of the property sold. I do not complain about that, but when a purchaser defaults on one or more payments the selling company has the privilege of taking possession of the property. Again I do not find fault. The fault I find is this: The company repossess the article in question, whether it be an automobile or something else, and may proceed to make repairs which cost anywhere from $300 to S500. Then they sail the repossessed article for whatever figure they can get, provided the original purchaser is in fairly good financial condition, although possibly not able to make his payments. Having sold the article they may claim the balance from the original owner. In my opinion this process more than any other factor has been responsible for the impairment of the credit of the farmers. Hon. members are familiar with the tactics of what we term high pressure salesmen, and we realize that the poor farmer who is not accustomed to discussions and arguments is not proof against the sales talk. The salesman ascertains before he visits the farmer if the person he is visiting is financially responsible. In many cases these salesmen have sold to farmers against their will and against their own interests. Hon. members know' how many farm implements, sewing machines and automobiles have been sold to farmers who, when the agent visited them for the first time, had no intention of buying. I say such companies should have to make a choice, when they repossess an article-


The CHAIRMAN (Mr. Stanley):: The
hon. member must confine his observations to a discussion of farm loans.


Samuel Gobeil: I was answering the hon.
member for Laprairie-Napierville. However, I have completed my observations on this

point. The company should either repossess the article and give a full receipt, or they should collect and not repossess. My point is

and this may not be in order, either, although it was discussed by the hon. member for Laprairie-Napierville-that the present measure does not destroy the credit of the farmer, but will serve to reestablish it, to put him on his feet and in a position where he may buy something, because the man from whom he may buy will know he has been reinstated and his financial position is sounder than it had been previously. I believe the legislation will do a great deal tow'ards putting the farmer on his feet.


Edward James Young: Mr. Chairman, I am afraid
I cannot congratulate the minister upon this legislation. Like the unemployment insurance bill and most of the social legislation we hear so much about nowadays, it will have the effect only of raising the hopes of the needy and then dashing them to the ground. The farm loan act was first passed in 1927, and $15,000,000 was placed at its disposal. In seven years of operation the board had loaned only $9,000,000. Last year the amount available to the board was increased to $40,000,000, and I believe at this time they have loaned out $15,000,000. Now we propose to increase the amount available to $90,000,000, and I venture to say w'hen we come back next year less than half of it will have been loaned. It is not the amount of money you have to lend that counts, but the amount that you are willing to lend. How are the loans to be made? On appraisal. Very well, but who is going to benefit by it? Only the very best and the very worst farmers. The farmer who is in such good shape that his debts do not amount to very much will have no trouble in going to the board and getting money at five per cent with which to pay off the debts on which he is now paying seven or eight per cent. In that way they skim off the cream of the mortgage business. On the other hand, the farmer who is in such desperate shape that his creditors have no hope of getting anything out of him anyway will be able to go to his creditors and make this kind of compromise with them. They will say: We will give you a clear receipt for whatever amount you can get out of the farm loan board. They will use every influence they can to get all they can out of the board so that they can get that much of what is owing to them, and then they will leave the board to deal with the worst class of farmers.


Farm Loan Act


Edward Joseph Garland: Why do
you call them the worst class of farmers? I know thousands in that situation who are not the worst class of farmers.


Edward James Young: Just wait until you hear
what I am going to say. The great bulk of the farmers in this country, those who are not in desperate need but who have a chance to make good if they can get sufficient money to allow them to be clear of their other creditors, will not be able to borrow sufficient from the board under this act to enable them to get clear. Being unable to give a first mortgage on their property they will not be able to come under the act at all. So I am afraid, Mr. Chairman, that the act is not going to be of very much benefit to the farmers who are deserving and really need the benefit of its provisions.


Mr. LUCHKOVICH:: I was interested in the remark of the last speaker, that only the best and the worst farmers will benefit by this legislation. Some time ago I asked the Minister of Finance a question which he thought was a hypothetical one. Even if it were, that is the only way we have of eliciting information at this time. But it was not a hypothetical question, because the case is well known, to me of a farmer owning two quarter sections, with about 125 acres under cultivation, and his arrears of taxes amounted to about only $130. This man tried to get a loan and he was told by the board that if his debts were not SI.000 or over he could not get a loan. The question has been asked here to-day whether this is a farm relief act or a farm loan act. I do not know whether it is so that the best class of farmer is going to get a loan under this act, because this farmer I have in mind is one of that class, and he was unable to get a loan. There is a clause in the act which provides that loans are to be made to farmers in good standing. I should like to know whether it is the farmer in good standing or the farmer in desperate straits who is going to get a loan, and so far I have been unable to find out.


Edgar Nelson Rhodes: Mr. Chairman, if my hon. friend will be good enough to let me have in confidence the name of the farmer and the locality it will enable me to make inquiry into the case he mentioned, and I shall make it my business to do so. Otherwise 1 shall not be in a position to give him an answer with respect to that specific case.
One assumes that all farmers, even those in the highest class of risk, are in need, otherwise they would not seek a loan. It is only a question of degree as to how badly they need it, and we cannot refine language in this committee and classify cases. I can only go back to my original statement, which I have made so many times, and say that each individual case must be decided on its individual merits.


Mr. SPENCER:: I should like to support the statement made by the hon. member for Vegreville on behalf of men who I think should be able to get loans but who have been turned down. I have in mind an old man who has a good farm. He put his boys on it and went himself to the city to give his younger children a better education. He bought a house in the city with a mortgage on it, but on account of the serious conditions of the times he is not able to get sufficient return from his farm to pay off the interest on the mortgage or even to pay his taxes. He made application for a loan but was turned down, on the ground I suppose that 'he was not living on the farm. This man has lived on the farm for fifty years, and has made good on it up to recent years. He is really a farmer. The farm is his only means of getting a living, but his application was turned down because he was not actually living on the farm, I suppose, although his boys' are there. I hope the new act will have a clause that will enable such men, even if they are not living on the farm, to get a loan when they are really dependent on the farm. This man is over seventy years of age. He is not in a position to get an old age -pension because of his farm, and for the same reason he cannot go on relief, nor can he get relief from the farm loan board.


Charles A. Stewart: Last year when we were discussing the debt adjustment act we were given the assurance that in many cases where debts were composed there was a strong probability of the debtor being able to rearrange his mortgage indebtedness and thereby be in a position in somes cases to pay off the total of his indebtedness by a new loan secured from the farm loan board. I think I am safe in making the assertion that with at least eighty per cent of our farmers to-day the difficulty is not so much with their floating indebtedness, although that is an important factor, as with the accumulated arrears of interest that are added to the principal of his loan. I must frankly admit that the accumulation of interest added to the
Farm, Loan Act

principal makes the total indebtedness in many cases beyond the actual selling value of the farm at to-day's prices, and the result was of course that no relief could be afforded in such cases by the farm loan board.
I am well aware, too, that the object of the farm loan board at its inception was not so much to lend large sums of money, not even up to the maximum, as to give the small farmer, the one who perhaps had the most difficulty in securing a loan, the opportunity to secure a very moderate loan. I think that policy was fairly well carried out. I believe also that the board did discriminate to some extent where larger loans were required. I am not speaking of loans up to the maximum. But this situation has arisen-I will give a hypothetical case. A debtor makes application to the registrar and gets a substantial reduction in his floating indebtedness, but when it comes to a question of adjustment with the company which holds the mortgage on present day values, there is great reluctance on the part of the farm loan board to lend the money. I am not criticizing that attitude. I admit that if the farm were sold at present day prices it would not perhaps bring the mortgage indebtedness accrued against it. But that resulted in a sort of impasse in our province in which the mortgage companies took the ground that they were not forced to compose the indebtedness unless they were to be paid off. I want to convey to the minister the difficulty of this situation. It usually meant that that loan was not settled but remained in abeyance. What I want to know is this. Have the debt adjustment board authority to force the mortgage company to take a reduction of their loan unless they are in a position to liquidate that loan and pay it off in cash? And even if they are in a position to do so, have the board authority to reduce the indebtedness of the mortgage and accrued interest?


Edgar Nelson Rhodes: The discussion has taken a very wide field, though I do not complain of that. But the question just put by my hon. friend is one that would more properly come up when we are discussing the Farmers' Creditors Arrangement Act. I do not want the hon. gentleman to infer from what I now say that I have no wish to reply to him, but I should not like the scope of this discussion in committee on this bill enlarged to take in the other act, having the whole discussion duplicated on that bill. I shall be happy to give the information, especially as it gives me this opportunity to say that a considerable proportion of the difficulty of which he spoke, 
in the first instance which he gave, will be obviated by the operation of the Farmers' Creditors Arrangement Act.


Charles A. Stewart: Obviated?


Edgar Nelson Rhodes: Yes, obviated. As a
matter of fact we have had under that act numerous settlements which have had the effect of compressing the total indebtedness of the farmer to a very marked extent, and I am very happy to say that while there will be and there are cases where fresh money will be required and possibly, in order to effect a settlement, composing the whole situation for the farmer, there may be instances where the mortgage may have to be taken over. But on the whole there has been a very large percentage of settlements made which have not required new money to be provided by way of farm loans. But in some instances I have in mind fresh capital has been supplied-sometimes by the creditors and in other instances by the vendor of the land, who has been only partially paid. That, however, is by the way; I do not wish to enlarge the discussion on that point at the present moment inasmuch as we shall discuss that phase of the subject under the Farmers' Creditors Arrangement Act. But answering specifically the latter question of the hon. gentleman, it is entirely within the jurisdiction of the board of review under the Farmers' Creditors Arrangement Act to make a binding settlement, which would involve, if in the judgment of that board it were wise to do so, a reduction either of principal or of interest or both.


Mr. GIROUARD:: The minister says that
the board of review has the right to make a binding settlement. When that settlement is made for cash, is there anything in the Canadian Farm Loan Act which obliges the commission to loan according to the binding settlement made?


Edgar Nelson Rhodes: No.


Mr. GOLDING:: I do not want to follow the example set by my hon. friend from Dufferin-Simcoe and bring into this discussion provincial questions and provincial affairs. I think every hon. member from Ontario will agree with me that such a discussion is as useless as it is unwise. The detail in connection with agricultural development loans in the province of Ontario will be discussed at the proper time and in the proper place, and I think that w'e ought to follow the suggestion made by our good friend the minister and by the chairman and discuss the questions that are immediately under review.

Farm Loan Act


Mr. BURY:: I do not notice in the bill
any section under which it is proposed to widen the scope of the act in the definition of those who have a right to make application for a loan. I brought to the attention of the minister, at the time we were discussing the resolution, the case of a man who was either managing his farm while he resided off it, or had rented his farm, or had sold it. I gave the instance of a farmer who had a section farm within three miles of a railway station, within one mile of an elevator, with 475 acres broken, a good house and the farm all fenced; and yet he was unable to get a $3,500 loan on that farm simply because he was not living on it. What I wish to urge on the minister is that the definition of "farmer" should be widened and that there should be brought under the scope of the act men who are not necessarily on the farm, men who are managing their farms through employees while they themselves live in the city. In point of fact, this particular man to whom I refer, who has farmed for forty-seven years, is now paralyzed and has to live in the city. I do not see why as good security cannot be given the farm loan board by a farmer who owns a farm of that kind, who is either farming it through an agent or employee while he lives away from it, or has rented it or even sold it, provided he has a sufficiently large equity and the title is still in his own name. Surely ample security can be given to the farm loan board in a case of that kind. Take the man to whom I have referred. His whole livelihood is derived from that farm, and if it has not already been sold for taxes, it is in danger of being so disposed of. And yet the man can get no relief. The point I am urging on the government is the widening of the definition of "farmer" to include men of that class.


Edgar Nelson Rhodes: I need hardly point out
to my hon. friend that it would be impossible so to frame a definition as to include what will inevitably occur in any law of general application, namely, borderline cases. I need not say to him that to legislate for particular cases is poor law. The definition as contained in this act may not be the correct one. I expressed the other day my view in passing, not having at the time given the matter as much thought as I have since done, that it might be the part of wisdom to use the same definition as that which is used in the Farmers' Creditors Arrangement Act. As a matter of fact, while the definition as contained in the present farm loan act would
appear to be perhaps more restrictive in terms, it will be found in the interpretation clause of the original act:
"Farmer" means any person whose business is that of farming and who owns and occupies a farm, or who proposes to acquire a farm for immediate occupation and cultivation by him.
The question as to how restrictive that definition is will be determined by the manner in which the word "occupies" is interpreted. As a matter of fact the regulations which have been in force under the existing farm loan act are as follows under the heading Eligibility of Applicants for Loans:
17.	In determining the question as to whether or not an applicant is a farmer, the determining factor shall be whether or not farming is his principal occupation. If it is not, the applicant shall not be eligible for a loan.
18.	In determining whether the applicant for a loan is actually engaged in the cultivation of the land offered as security for loan, it will be held that he is if he cultivates his land with his own or with hired labour.
I am informed by the farm loan board that in actual practice the word "occupation" has not been construed to mean that the farmer must actually live in residence upon the land in question; that a distinction has been made between "residence" and "occupation,," and that as a matter of fact in individual cases loans have been, made to farmers whom the board regard as being bona fide upon a piece of land which they construe as being occcupied in a sufficient sense to enable the farmer to qualify for a loan under the farm loan act. Whether that be a proper interpretation of this section or not, I do not profess to be in. a position to give an opinion. There are in the committee many hon. gentlemen who have wide legal experience and whose opinion in that respect would be better than mine. But the farm loan board has so construed the word "occupies" as to enable that class of man to qualify for a loan. Thej have however made a distinct line of demarcation in the case of tenant farmers; they have refused to make loans to them in all cases. I am in the judgment of the committee; when we come to the section in question, if it is thought wise, I am quite content that the definition we use in the Farmers' Creditors Arrangement Act shall be substituted for the definition we have in this one.


George Gibson Coote: Will the minister kindly read
the definition?


Edgar Nelson Rhodes: I read it the other day.
It is:
Farm Loan Act

"Farmer" means a person whose principal occupation consists in farming or the tillage of the soil.


Mr. GEARY:: Is that the regulation?


Edgar Nelson Rhodes: No, it is the definition of "farmer" as contained in the Farmers' Creditors Arrangement Act. I stated, when discussing the resolution on a previous occasion that perhaps that was a wider definition and, if the committee thought wise, I would be content to take that definition and use it in the farm loan act.


Ambrose Upton Gledstanes Bury: Is that the whole of the
definition?


Edgar Nelson Rhodes: Yes. It would appear to
me that that would be capable of a wider interpretation than the section as it now exists in the farm loan act, because there certainly is implied at all events some limitation in that definition which it would not appear to me attaches to the definition I have just read.


Henry Elvins Spencer: If we did make that
change, could a farmer, not living on his farm but farming it, get a loan?


Edgar Nelson Rhodes: Perhaps my hon. friend did not hear me. I said that there are cases where loans have been actually made to persons not actually living on the farm but tilling the soil and farming that piece of land, that being their principal occupation.


Ambrose Upton Gledstanes Bury: I understand from the minister that no loan is given to a tenant farmer. If no loan is given to a tenant farmer, why may not a loan be given to the registered owner of the farm, who has the fee simple, the rent and the reversion? Surely somebody who has the major interest in the land can get a loan.


Mr. BRADETTE:: I hope the minister will give a wider interpretation to the word "farmer." I have in mind more particularly the settlers in the fine rural sections of northern Ontario. They are under the impression that under the interpretation of this act they are not included as farmers. There are thousands of northen Ontario settlers who do not come under the present definition and I believe this act should apply to at least a certain number of them. It is true the land does not belong to them; it is true the title still is vested in the crown. That being crown property, the central government could get a first mortgage on it. The fact remains that in our section-and I believe the same applies also to northern Quebec and certain districts

of the western provinces-a number of settlers cannot graduate from the settler into the farmer class because they have not sufficient money to buy stock and cattle or own sufficient buildings to get their deeds from the province. During the last two years at least I have received hundreds of letters from good bona fide settlers in northern Ontario stating that they regret the fact that they cannot come under this legislation. This is an injustice because this is one of the finest sections of the rural population in the whole country. On a previous occasion I made a very urgent plea to the government to try to include in the word "farmer" or "farming" the settlers of northern Ontario.
A certain quantity of land has been given to settlers in our sections, but for the last six or seven years such loans have not been given as liberally as in the past. If I interpret aright what the minister said a few days ago, it was that this was intended really to help agriculture; that it was the wish of the government that as much money as possible, within reason and in accordance with the laws of economy, should be loaned to the farmers, and surely this should include the settlers of northern Ontario and Quebec who are doing pioneer work in the newer parts of the country.
There are not hundreds but thousands of families who find it impossible to graduate from the settler into the farmer class for the simple reason that they lack not thousands of dollars but only a few hundred dollars. I think very few will be found who will ask more than a maximum of a thousand dollars. In my constituency we have studied this measure very thoroughly; we have held meetings to consider it, but so far we find in it no provision for the settlers of northern Ontario, and I trust the minister will find it possible to include them.
I listened with a good deal of attention to previous speakers who referred to people not actually occupying their farms. I am not in sympathy with the man who has a farm as a hobby or one who is a gentleman farmer to the extent of suggesting he should receive the same attention as the actual tiller of the soil, but I am in sympathy with the settlers who are trying to make a living off the land. I have no advice to give the government as regards the man running a farm as a hobby, but there may be special cases where through infirmity a real farmer is unable to manage his farm himself, and in such a case this act should apply. Speaking generally, unless a man actually resides on his farm I do not believe he should be entitled to any loan from

Canadian and British Insurance
any government. Having been a settler myself in northern Ontario, however, I feel that something must be done for that fine class of people who graduate from the settler to the farmer class.


Edgar Nelson Rhodes: My hon. friend is making a worthy plea for a very worthy class of citizens, but he must bear in mind that we are not dealing with a colonization scheme or a scheme of assistance to colonization. That is not the purpose of this measure, worthy as that purpose may be. Its purpose is to assist farmers, and the moment any individual of whom my hon. friend has spoken can qualify as a farmer there is nothing to prevent him, other things being in order, from securing a loan from the farm loan board.


Joseph-Arthur Bradette: I appreciate the point the minister makes, but would he be good enough to indicate to the committee the line otf demarcation between a farmer and a settler? This is a very important question. In our section we call a man in a colonization section settled on a new holding a farmer, although we all know the land belongs to the crown. The acreage at present on each farm is ninety acres, and the settler has to clear at least ten acres and have a dwelling house and stable or barn before he can get a deed. In hundreds in my own district the people are ready to get their deeds; they have cleared the land and wish to put up a better dwelling, but they have not the capital to do so, and I believe that is where the government should come in. I appreciate what the minister says, that this is not a colonization scheme, but I am speaking of farmers. Only five per cent of these people have graduated from the settler class to the class of farmers, for the reasons I have stated, if it means getting their deed. Will the minister enlighten the committee as to the line of demarcation between settlers and farmers, and whether a farmer actually living on the land will 'be able to benefit under this act?


Edgar Nelson Rhodes: No, Mr. Chairman; if I wanted to get a definition of a farmer I fancy I would have to apply to the Department of Justice. Parliament has said what a farmer is as far as the Canadian Farm Loan Act is concerned. If my hon. friend will look at the definition of "farmer he will find that-
"Farmer" means any person whose business is that of farming and who owns and occupies a farm, or who proposes to acquire a farm for immediate occupation and cultivation by him.
My hon. friend is just as capable of putting an interpretation on that as I am. Neither of us is any further ahead, because the act is administered by the farm loan board and they must be the judges as to whether an applicant comes within the definition of the act which they have to administer.


Joseph-Arthur Bradette: The objection the board will find will be under the word "owns." He has not the title, which is still in the crown, but he is the owner in fact as far as actual habitation and work are concerned.


Edgar Nelson Rhodes: My hon. friend would not suggest that the farm loan board would lend money to a man who does not own a farm?


Joseph-Arthur Bradette: Well, he owns it in a sense; he has the moral right to it. There are farmers in our section that have been on their farms twenty-five years but have not a deed. No one will tell me that anyone could take those farms away from them. They have made improvements. I know the government is sincere in its desire to help agriculture, and there should be some provision to make it possible to help that fine settler population in the newer sections of Canada.


Edgar Nelson Rhodes: It is obvious that we cannot make further progress before six o'clock. It is not proposed to go on with this bill this evening. I therefore move that the committee rise and report progress.
Progress reported.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.



CANADIAN AND BRITISH INSURANCE COMPANIES ACT AMENDMENT

[Stage Direction]
Mr. G. G. COOTE (Macleod) moved the second reading of Bill No. 13, to amend the Canadian and British Insurance Companies Act, 1932.
He said: Mr. Speaker, when the insurance act was amended a couple of years ago section 180 of the old act was not included in the revised act. The purpose of this amendment is to place in the present act the provisions of old section 180. I will not take time to read that whole section; I will simply say that its provisions would make it compulsory for a life insurance company when any premium is due and not paid to apply any cash surrender value which existed under a policy to maintain the policy in force until the whole cash surrender value was exhausted.
[Stage Direction]


Canadian and British Insurance
As the act now stands it is not necessary for the company to maintain the policy in force if the premium is not paid by the policyholder; the policy may be forfeited, and in that case the insured would lose his insurance; in other words the policy would lapse. It seems to me that every policy should be carried in force so long as the cash surrender value is sufficient to cover the premium. Most policies now in existence contain such a clause, but I feel that it should be compulsory for every company carrying on life insurance business to adopt this method. I am told that some companies have made a good deal of money out of this practice of allowing policies to lapse even where there was sufficient cash surrender value to have continued the policies in force. To-day all companies are in competition with each other in the selling of life insurance, and one of the strong talking points used by their agents is the profits earned by the companies. If one should make profits out of the cancellation or the lapsing of policies where there is sufficient cash surrender value to carry them on, no doubt other companies will feel compelled to adopt a similar method so that they will be able to compete in the matter of profits.
Subsection 5 of this bill is new; it is not taken from the old act. This subsection would limit the rate of interest which may be charged by any life insurance company against any advance or policy loan to a maximum of four per cent per annum. I think hon. members will be seized of the importance of this provision when I state the figures showing the money advanced as policy loans. In 1932, which is the last year for which I have the figures, the amount of advances against policies held by life insurance companies reporting to the dominion Department of Insurance was $244,000,000. In 1933 it was $218,000,000; in 1930 it was $188,000,000 and in 1929 it was $159,000,000. I think those figures show the importance of this matter.
I might say a word as to the necessity for this section. In 1921 I had the experience personally of being charged ten per cent per annum by an insurance company on a six months' note which I tendered in payment of a premium. I refused to sign the note and secured the money elsewhere with which to pay the premium. But that shows the rates which have been charged policyholders by certain insurance companies. Just last year I found that I was being charged eight per cent on money which was automatically advanced under the provisions of the policy itself; the premium was being advanced automatically from the cash surrender value of the

policy. That was carried as a loan against the policy and I was being charged a rate of eight per cent per annum. I found that by taking out a loan against the policy and turning it in as payment of the premium due and the premium previously charged against the cash surrender value, the rate was reduced to six per cent, but I think even that rate is excessive. I am told that some companies regularly charge a rate of seven per cent on loans against their policies.
The importance of this matter may be shown in another way. I have here the figures concerning four large companies doing business in Canada. The first company has twenty-four per cent of its interest earning investments in the form of policy loans. The next company has approximately twenty-five per cent, the third about twenty-four per cent and the last company about twenty per cent of its interest earning investments in the form of loans against policies. The investment folio of another company shows city mortgages amounting to $27,000,000, farm mortgages totalling $19,000,000, bonds and debentures amounting to $43,000,000 and policy loans of $28,000,000. So it will be seen that in this case the second largest investment is in policy loans.
I think the rate of even six per cent, which is the lowest of which I have heard, is much too high. The security for these loans is the best in the world; the companies are lending money to their own creditors. There cannot possibly be any loss; there is no risk connected with it. Another reason is that the next best investment of the life insurance companies would be dominion government bonds, and the rate they can now earn from those investments is considerably less than four per cent. I find that the average rate earned in 1923 by two of the largest companies was 4-08 per cent in one case and 4-09 per cent in the other, yet to my personal knowledge one of these companies was charging eight per cent on part of their loans against policies.
I think it advisable that parliament should incorporate in the insurance act a uniform rate that may be charged by these companies. As I said before they are in competition one with the other. They are all trying to make good profits, and if one company charges high rates of interest in order to increase its earnings the other companies naturally will feel that they must do the same in order to compete.
Life insurance surely is carried on for the good of the people, at least it should be carried on in the interests of the people.

Canadian and British Insurance
All our regulation is ostensibly for that purpose, and looking at the matter from that point of view there can be no doubt that this is something which should be regulated by parliament. I earnestly ask this house and the government to accept the bill, and if it is accepted I should be glad to move that it be sent to the banking and commerce committee for further consideration. I think the bill is a feasible one, and I hope it will receive the support of the house.
Edgar Nelson Rhodes: With respect to the provisions contained in subsections 1, 2, 3 and 4 of section 1 of the bill, it is a debatable question whether the proposals made by my hon. friend, notwithstanding the fact that at one time they were contained in the insuraance act, would be as favourable to the insured as the present provisions of the policies of the majority of the companies. If these provisions were inserted in the law it would mean that if a man had a high priced policy, we will say a ten payment life, the loan value applied to the premiums paid would be absorbed with such rapidity that the policy would soon be extinguished, whereas if the insured had the option of accepting a twenty payment life policy or some other class of insurance which would enable him to spread the same amount of money over premiums calling for smaller payments, he would be able to keep his policy alive over a much longer period. However I do not purpose discussing the matter at this stage; I merely make these observations on the point as to whether or not the proposals made would be of benefit to the insured.
It seems to me the question of the interest rate is a technical matter upon which the superintendent of insurance and the parties interested should be heard. So far as I am concerned I am content to accept the suggestion made by the hon. member for Macleod (Mr. Coote) namely that the bill receive second reading on the understanding that it go to the banking and commerce committee where discussion may be had to better advantage than in committee of the whole house. I shall be content to accept that arrangement, but of course without prejudice to the right of hon. members to take exception either to the principle or to the details of the bill.


Hugh Guthrie: Mr. Speaker, before the motion is put I believe I should point out to the hon. member who moved second reading of this bill (Mr. Coote) that my understanding is 92582-56J
that section 180 of the Insurance Act, 1927, which is to be found in the revised statutes, was dropped in the enactment of 1932 because it was considered that the federal parliament had no right or had no legislative authority in such matters.


Edward James Young: Much has happened since then.


Hugh Guthrie: There were some very important decisions after the passage of the original section 180. One of the law officers of the Department of Justice, who has had large experience with insurance legislation and has been closely associated in the insurance cases which have gone before the privy council, has sent me a memorandum which I believe I should place at the disposal of hon. members. The memorandum deals with the question of federal jurisdiction with regard to subsections 1, 2, 3 and 4 of section 1 of the proposed bill. He points out that these subsections may constitute regulations affecting the conduct of the business of insurance, and in those circumstances it is doubtful whether we have any right to deal with them. However, he believes subsection 5, regarding the rate of interest, is w-ithin the jurisdiction of parliament, and his object in sending me the memorandum has been to acquaint the house and the hon. member with the situation.


Henry Elvins Spencer: Mr. Speaker, without detaining the house too long I should like to support the bill presented by the hon. member for Macleod (Mr. Coote), second reading of which he has moved this evening.
During the last five or six years the matter of insurance has become not only one of great importance but one involving considerable risk to people who are prejudiced because of inability to keep up their premiums. In a debate which took place in this house about a year ago it was shown that due to the heavy cost of writing insurance, involving commissions, bonuses and one thing and another, premiums are essentially-and I believe unnecessarily-high. That being so we find that in years of crisis many people have much difficulty in carrying their insurance premiums.
Last year I obtained figures showing the aggregate amount of policies surrendered and dropped in three years. In the province of Alberta alone these policies aggregated a value of 866,000,000, and the figure for the vhole of Canada was well over two billion dollars. I mention this fact because I believe this extraordinary situation has been brought about, verv largelv not only because of the

Foreign Insurance Companies
high cost of premiums but because of the high interest rates charged. I would point out that the higher the rate of interest the insurance companies charge on loans the greater the difficulty in carrying the policy. For these reasons I have much pleasure in seconding the bill presented by the hon. member for Macleod, which recommends that the interest rates be reduced in the manner he has indicated.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the select standing committee on banking and commerce.

[Stage Direction]
Mr. G. G. COOTE (Macleod) moved the second reading of Bill No. 14, to amend the Foreign Insurance Companies Act, 1932.
He said: Mr. Speaker, the provisions of this bill are the same as those of the bill which has just received second reading, with the exception that they apply to foreign companies rather than to Canadian and British companies. I should be glad to have this bill sent to the banking and commerce committee.
May I say, respecting the point raised by the Minister of Justice (Mr. Guthrie) that I have never understood this particular section of the old act conflicted with the powers of parliament. However when the matter is discussed in the banking and commerce committee I am sure the point will be carefully considered, and it may be that the wording of the act could be improved upon. All I wish to do is to protect the policyholder. In the event of there being in his policy a cash surrender value sufficient to carry it, such policy should be carried as long as possible and at a reasonable rate of interest.
Edgar Nelson Rhodes: Mr. Speaker, the observations I made respecting Bill No. 13 apply with equal force to this bill, the provision being precisely the same. Of course the former bill has to do with Canadian and British insurance companies w'hile this one deals with foreign insurance companies.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the select standing committee on banking and commerce.

[Stage Direction]
Mr. THOMAS REID (New Westminster) moved the second reading of Bill No. 17, to amend the Fisheries Act, 1932.
He said:	Mr. Speaker, let me say at the
outset that this is not the first time I have brought this matter to the attention of the

house, but it is the first session I have approached the problem by way of moving an amendment to the Fisheries Act. My reason for moving the amendment at this time is that after careful consideration and investigation into the whole matter of salmon fishing in the Fraser river and the waters adjacent thereto I have come to the conclusion that something will have to be done to protect not only the fishermen of the Fraser river but the great salmon fishing industry itse'lf.
I am sorry that owing to the rules of the house I am unable to place on the records the boundaries as defined in the bill, but I have in my hand a map with the boundaries indicated thereon, and which I shall send over to the minister. The red lines show the Fraser river and the blue lines indicate the area covered in the bill, in connection with which I am asking the house to act. I will send this across to the minister so that he can follow me better as I proceed with my argument.
This question, Mr. Speaker, affects 2,366 gill net fishermen. That is the number of licences issued for the Fraser river for 1934. Actually there are more gill net fishermen engaged than that, because they come in from other parts of the province at certain seasons of the year; and there is also the extra help some use.
For the benefit of the house it is perhaps as well that I should take a minute to explain what purse seining and gill net fishing is. Purse seining is done by means of a large power boat. They go out to fish, and when they sight a school of fish they let down a net and circle the school or as much of it as the seine net allows. The net is about seventy-three feet in depth. When the fish have been circled there are cords that tighten and draw together the bottom of the net, and all the fish within the net are caught as it tightens up just like a purse. The seine is about twelve hundred feet long and, as I said, some spventy-three feet in depth.
In gil'l net fishing, generally speaking, there is one man to a boat, although sometimes he has a helper, a boy or another man. The nets used in these boats in the Fraser river are nine hundred feet long and in the open water twelve hundred feet long, but they are shallow in depth compared with the purse seine, being only some thirty feet deep. Not only is the net shallower, but the size of the mesh is entirely different from that of the purse seine. The mesh of the gill net which is operated by the individual fisherman must be large enough to allow only the head of the salmon to go through. If that were not so they would not catch any fish, whereas the

Fisheries Act
purse seine has a very small mesh so as to catch everything that comes into it. I think that simple explanation will suffice. These two methods of fishing are better understood by those who have given study to the matter, but after this brief explanation I think hon. members will be better able to follow my argument.
May I point out that the fishing industry in this country is one of our most important industries. I should like to put on record a few figures connected with it. The total value of the fisheries for the whole of Canada, that is the landed catch, according to the latest report, amounted in 1933-34 to 827,558,053. I would ask you, Mr. Speaker, and hon. gentlemen to note that the total value of the fisheries in 1929 was $53,500,000, and it dropped last year to $27,558,053. In 1930 the total value of the fish caught was $47,804,216.
As to the number of employees in this industry: according to the records the total number of men employed in the fishing industry, actually fishing with the boats, in 1933-34 was 65,391; employed ashore in canneries and elsewhere there were 13,927 employees, making a total number engaged in the fishing industry cvf 79,328. Invested in the fishing industry is the sum of $40,907,470, of which $24,912,482 is invested in vessels and gear; and invested in canneries is a total of S15,094,988, making a total investment in the industry of $40,907,470. From these figures one can see that the fishing industry of Canada is no mean industry, and I mention that because there is genuine concern throughout the country because we have to-day no minister of fisheries. We had a minister of fisheries in 1930-31, and if I may make this personal reference we were indeed very sorry to lose the present Minister of Finance when he was transferred from his office of Minister of Fisheries to his present portfolio of finance. It is a cause for general complaint and alarm that one of the most important industries in this country has now no minister in charge of its administration. There is an acting minister, it is true, but may I say in all kindness to the present acting Minister of Fisheries (Mr. Stirling), and my remarks apply to his predecessor as acting Minister of Fisheries, that one cannot expect the same results when one is delegated only as an acting minister. At least that is how I believe anyone would feel if he were acting minister only, instead of the minister. The result has been that ever since the Department of Fisheries has been in charge of an acting minister he has had to rely entirely on the reports and recommendations made by his officials. I am frank to say
that in my opinion the officials are practically running the whole fisheries department. No acting minister is given a proper chance to go into all matters connected with the fishing industry and so find out for himself what the actual conditions are. He is only the acting minister, and with all due deference to the present acting minister he has not yet had time to investigate the fishing industry thoroughly and he must therefore rely on what his officials tell him.
There is another complaint I wish to register. There have been no meetings of the fisheries committee except for one session since I have been a member of this house. Very important changes have been made in the regulations by order in council, and may I point out that orders in council have been passed without any previous intimation to the fishermen or to those affected. Drastic changes have been made in the regulations under the Fisheries Act, in many instances simply by order in council. I believe that before an important change is made the matter should come before the fisheries committee, which I believe should be in session every year; but as I have 6aid since I have been here it has been in session only one year; since then everything has been done by order in council.
The area which I am asking to be enclosed by fishery regulations with a view to prohibiting seining therein was previously closed to seining for over fifty years. It was not till 1933 that an order in council was passed'-at a time when the house was sitting, and without any warning being given-opening this area and permitting the purse seine boats to come into it and scoop up the fish. I know the acting minister might have different data from his officials, but the information I have regarding other districts is that seine fishing has been allowed in many areas in British Columbia until it was found that intensive fishing by purse seines depleted those areas. The result was that those operating seine boats, cannery companies and others owning these boats, looked around for new areas in which to fish and utilize their boats. They discovered one such area in the gulf of Georgia in close vicinity to the mouth of. the Fraser river, and so it was opened in 1933 for these purse seine vessels. In that year sixty-five of them were allowed in that area, and last season a total of 103 of these boats were operating there. I maintain that if this is allowed to go on, the great fishing industry of the Fraser river is in grave danger of being
Fisheries Act
[Stage Direction]
not only depleted but eliminated in a few years. I say *hat in all seriousness, because that has been the experience in other areas.
When the area was opened up first, in debating the matter in the house the then acting Minister of Fisheries argued that it was a question of quality. In that area there was a run of a variety known as pinks, which come in every two years. They said it was necessary to allow the seine boats to operate, because the fish deteriorated once they started up the river. Last year it was the late run of sockeye salmon. Nothing was said in 1933 about sockeye salmon, however; it was all quality in that year. As I develop my argument further I intend to show that the opening up of the area was entirely in the interests of the cannerymen and of those who owned the seines. First of all I would call attention to this fact, that away back in 1922 a commission was appointed under the chairmanship of the hon. member for Anti-gonish-Guysborough (Mr. Duff) and I have here a copy of their report. That commission studied the subject thoroughly. It was composed of many members, including some who are still in the house, and one of whom was the hon. member for Nanaimo (Mr. Dickie). Another member was my hon. friend from Comox-Alberni (Mr. Neill). The commission went out to British Columbia to investigate the whole fishing industry, and among other things which they investigated was the question of seine fishing. This is the statement on seine fishing, which we find in the submission of the Duff commisison of 1922. I will quote from it:
We think that an unlimited and widespread use of either purse or drag seines is a sure and quick way of depleting the supplies of salmon. But it was made clear to us that there are places on the coast outside of rivers where gill nets have not as yet been proved to be effective in catching salmon in reasonably large quantities. With this in mind, therefore, we recommend that drag and purse seines be not permitted to be operated for salmon except where their use has been demonstrated to be the only effective and reasonably economic method of catching such fish.
There was the definite statement made by that commission who investigated the matter on the ground. They heard the gill net fishermen, the cannerymen and all other interests, and after due deliberation they recommended that no purse seine fishing be allowed where gill net fishermen can operate. I do not think the acting Minister of Fisheries will take issue with me when I say that the area in which they are now operating could be operated entirely by gill net fishermen, because

for fifty years the gill net fishermen did operate in that area and it was not until 1933 that these others were allowed into the area at all.
That seine fishing is the most destructive form of catching fish, I do not think there can be any doubt whatever; I believe it is even more dangerous than the traps, as someone has said. And as I have pointed out, wherever they have been in operation these areas have been depleted. As regards statements that have been made with respect to the depletion of fish in the Fraser river, I should like to read two reports which I have here, one by the United States department and one by the government of British Columbia. I have a letter from the director of fisheries in the state of Washington, addressed to me in December, 1933, after they had operated that area. He says:
Heavy persecution of the run throughout the season both by American and Canadian fishermen resulted in the pack of about 180,000 cases which was considerably in excess of what should have been packed to guarantee a similar run in 1937.
The other report is supplied by Doctors W. A. and L. S. Clemens, Pacific Biological Station, Nanaimo, British Columbia. I quote:
Fraser River: The prospect for 1935 is very discouraging. In 1931, Mr. J. P. Babcock, after making an inspection of the spawning beds in the Seton, Anderson, Lillooet, Harrison and Shuswap areas and receiving reports of dominion fisheries officers through Major Motherwell for other areas, stated that the total number of sockeye that spawned in the entire river basin was one of the smallest ever recorded. Egg collections at the Pemberton and Pitt lake hatcheries were relatively small.
I quote these two reports to show that intensive fishing by seine, and on the American side by seine and traps, is very detrimental and will have a marked effect on the future of salmon fishing in the Fraser river.
We hear a great deal now about quality and about finding a market for our fish. But let me point out the great catches of salmon which used to be made in the Fraser river and in years when they found no trouble whatever in selling this class of fish. I have not the time to put all the figures on record, but if one cares to go back to the year 1926 he will find that the market value of salmon was then §18,769,605. And as regards the packs of salmon in the Fraser river, in 1913 we had over 2,000,000 cases of salmon packed -fresh fish caught in the Fraser river. To be exact, the figure was 2,409,760. Now it is interesting to watch the drop. In 1933 -I have not before me the figures for 1934-

Fisheries Act
the catch was 178.204 cases, compared with almost 2,500,000 cases in 1913. It was a wonderful industry employing many thousands in those days, with canneries up and down each side of the Fraser river; and at that time the industry was not bothered with anything about quality and regulations.
I mention these facts in an endeavour to prove that the salmon fishing industry is going down, and this latest move by the government in allowing purse seines to operate in this area right in the mouth of the Fraser river, which practically makes it a trap, and in an area where gill net fishermen did operate for fifty years, will result in depleting the salmon there and in the ruination of over two thousand fishermen at present engaged in the industry.
Some areas have been closed this year. A notice has been sent out from Vancouver that certain areas-5, 6 and 7-will be closed owing to the intensive fishing done with purse seines. I could mention other areas but I have taken these in particular. Ten years ago, when the seines first went into the areas which are now being closed, they caught anything from 10,000 to 20,000 per day. Their catch last year was between 1,500 and 2,000. It is no wonder the department, operating from Vancouver, has taken steps to close the area to purse seine fishing, but it is somewhat late. These people have boats and nets, and the department have said, "We will allow them to go into this last area," so they will do the same damage there as they have done elsewhere if seining is not prohibited.
In 1933 we had the word "quality" thrown at us. I wonder what excuse will be offered in regard to this past season. I have made a thorough investigation as far as I have been able to do so, and have endeavoured in every way to ascertain the facts from the fishermen. From all the figures and all the data I can get I am reliably informed that the sockeye salmon are in better condition when they come up the river than they are before they come up. I know there is some question regarding the pinks, and if I have time I shall deal with that later, but I am speaking now of the late run of sockeye salmon that were caught last season. For the information of hon. members I may say that the salmon when they come out of the salt water and first taste the brackish water, stop there and wait in those areas until all food is gone out of their bodies. Then they go upstream and so get harder and harder as they head upstream, with the result that the fish caught further up the river after they have waited for a period in the
open waters are, so experienced fishermen and experts say, of better quality for canning than the late run of sockeye which is caught out in the open. This might not apply to the pink salmon caughit in clear salt waters, but it does apply to the late run of sockeye.
I have not time to go into the matter as fully as I would like because I see my time is passing and I have many things I would like to draw to the attention of the minister. There is a good deal of concern and complaint regarding the inspection board. I was present when the acting minister received in Vancouver a delegation and I think that question was gone into. But when his officials tell him that the canned fish that are condemned or considered to be second quality are those which have been caught by the gill netters, and that all fish of first quality are those which have been caught by the seines, that is untrue because no man can tell after the fish are canned which have been caught by seines and which have been caught by gill netiters, and the word of the cannery companies is not without bias. Might I point this out to the acting minister: I might mention two canneries, otherwise doubt might be cast upon this statement. The Phoenix cannery this last season bought all seine caught fish, and fifty per cent of their fish I believe were classed as second quality. Another, the Glenrose cannery further up the river, took all their fish from the gill net fishermen and that cannery had practically no cases condemned. I just mention those two instances.
Coming to the question of quality, I have before me something that I should like to show to the minister-I do not know that it has been shown to him-and to the house, with regard to what is taking place in connection with the fish inspection board. Many rackets have been revealed in the price spreads committee, but I will indicate a racket participated in by the dominion government; it is so striking I thought I would mention and exhibit it to the house. I have in my hand an empty one-pound salmon tin. When the salmon is first canned they place on the lid the one word "Canada." When the word "Canada" is on the lid, that is supposed to represent number one quality fish. The inspector comes along, and by the way these inspectors are also buyers, because they are brokers-this is a point on which I should like to speak a little later as these government inspectors are also in the market for fish. When they inspect the cases of salmon they may come on a case which in their opinion should not be so marked, but is second quality. What do they do? They compel
Fisheries Act
[Stage Direction]
the cannery to put on another lid on which is marked "second quality." Thus you have second quality, but what do some of the buyers do? They buy a lot of these second quality fish and take off the outer lid so that the tin remains with the word "Canada" on it. The result is that during the past season there has been a- large demand, I understand, from buyers abroad to the brokers in Vancouver for these second quality fish because they can buy them at about half the price; the first tin remains intact with the word "Canada" stamped on it, so that they can sell it in the stores as first quality fish after removing the second quality lid. Talk about a racket! The department knows about this but no steps have yet been taken to stop it. I am not going to develop the argument further, although I should like to say more about the inspection board because I heard a good deal about it. Strangely enough there was a great demand on ithe brokers this year for second quality fish, which can be bought much cheaper than the number one quality.
Charles A. Stewart: How much cheaper?


Thomas Reid: I believe there is a difference of about three or four dollars a case. I thought it well to bring up this point because this practice should be stopped. The whole situation is a farce. I do not know whether the minister has seen this type of tin, but I am sending the whole thing across to him, because it is really 'worth while showing it.


Mr. MOTHERWELL:: Are these inspectors paid employees of the government on full time?


Thomas Reid: The inspectors, while they are appointed by the dominion government, are paid by the cannerymen at the rate of so much a case. The inspection board, so far as payment is concerned, is no charge on the government; the cannerymen pay it. But human nature, being what it is, brokers should not also be government inspectors; that is a situation that should be changed. It is bringing the whole industry under suspicion, because they are receiving orders from abroad, and if they are receiving orders for second quality fish and there is none in the market, well, if they wanted to they could find some, because all they would have to do if they were so disposed-and I am not accusing them-would be to turn down certain cases on inspection. I am not saying that they are doing this; far from it; I have no proof of it, but there :s the possibility.
[Mr. Reid.l
So far as quality is concerned the industry is very much alarmed also at certain statements which have been made, and in addition in regard to closing time of which I shall later speak. But with reference to the quality of the fish and the statement that it is necessary to have the seine boats catch the fish away out in the open before they get up the river, I will first read this: Major Motherwell, the man in charge at Vancouver, attended on September 12 last a Kiwanis club meeting in New Westminster, and he said at that time:
Sixty per cent of the present run of sockeye salmon entering the Fraser river are not in fit condition for canning.
That at least is what he is reported to have said. This information comes from the British Columbian, a paper published by one of our senators and printed in the city of New Westminster. He said that sixty per cent were not fit for canning, and his statement was made on September 12, but about two weeks later the river was opened up and fish were allowed to be caught. The fishermen are asking this very pertinent question: If the fish were not fit for canning on September 12, were they more fit two weeks later? That was the point. That question is a very difficult one to answer because the argument has been advanced by the officials that fish begin to deteriorate at a certain period and therefore they close the area so as to allow spawning and also, they claim, to maintain the quality of the fish. I shall just ask the minister to take note of this matter; I think he heard something about it while he was in Vancouver.
I should like to speak about the exports of sockeye, but as the hon. member for Comox-Alberni has on the order paper a resolution with reference to that matter I shall reserve the remarks I intend to make on that subject, which is very important and has a bearing on this bill. But I invite the minister's attention to the matter of the closing time put into effect on the Fraser river in the 1934 season. Fishing is closed for the week-end to all kinds of fishermen. I should like him to get from his officials an explanation of why the purse seiners were allowed to operate eight hours ahead of the gill netters. They certainly could make a cleanup in the first eight hours, because as is well known to all who know anything about the industry, the opening morning after an area has been closed to allow the fish to go up for spawning is the best time for a catch. The seiners can catch more on a Monday morning than on a Friday morning. The fishing goes down as the week passes; the fish become more scattered and do not school up in such large numbers. I think the

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question why the seine boats were allowed to operate some eight hours more, as they were, is worthy of the minister's attention.
As to the quality, it is a strange thing that the American cannerymen who compete with the Canadians in the markets of Great Britain can pay more for the Canadian caught pinks and late run sockeye fish than the Canadian canners offered. For the late run of sockeye in the Fraser river the United States cannerymen were offering twenty-five cents per fish when our cannerymen in many instances were afraid to take them in case they should be turned down as second quality. Putting those double lids on adds quite an extra amount of expense; first they put on one lid, and then the other. The canneryman was afraid to take a chance, and so this last season, 1934, he was not ready to take the late run of sockeye, and the majority of those fish were taken across the line where the Americans paid an average of 25 cents each for them. Last year when our pink salmon was said to be of little value the Americans were paying fifteen cents for them to the fishermen who took them across the line, when all the Canadian canners were paying was two cents per fish. Yet we are meeting their competition in Great Britain. Someone suggested that is a matter for the attention of the price spreads and mass buying committee, but I suppose it is too late for that now.
I should like the minister to reply. I have many matters that I should like to bring up in this connection. The matter is a very serious one. The whole industry is faced with disaster; many of these men are being forced on relief. The Deputy Minister of Fisheries stated that this past season the fishermen made the best money they ever made, but I deny that statement right now. He quoted figures, but in those figures he included Japanese fishermen who operate their boats the entire twenty-four hours a day. If he takes as the catch of one man that of a boat operated twenty-four hours a day it may well be said he did well. But as for the white fishermen on the Fraser river I dispute the deputy minister's assertion; they did not make as much this year as in past seasons. Besides the loss of late run sockeye, other varieties of fish were picked up by the purse seines and their catches diminished thereby.
As the hour is almost up I must conclude my remarks, but I make this suggestion to the minister. If the attitude of the government is to turn down the bill I suppose I shall have to abide by it, because they have the majority; but I appeal to them at least to let this bill go to the committee, in which case I
would ask in all seriousness that representatives of the fishermen be brought from the Pacific coast to appear before the committee. It is all very well for the cannerymen who have plenty of money to appeal to the acting minister or the deputy minister, but the fishermen are not in that position, so I urge upon the minister that they be brought before the committee if the bill is referred to the committee.


Mr. G. H. PETTIT (Welland):: The hon. member (Mr. Reid) referred to the alarming reduction in the catch and output of fish. Is not the chief factor in that situation the methods and the various kinds of seines and other contraptions used by the American fishermen fishing in the adjacent waters and off that point of land where the fish pass into Canadian waters-


William Duff: Point Roberts.


George Hamilton Pettit: -is that not leaving very few of the sockeye for the Canadian fishermen to take?


Thomas Reid: I should like to discuss that point before the committee, because the hon. member has not the right angle. Categorically I would say no, but I should like to answer it more fully in committee.


George Hamilton Pettit: Would not the real solution of the matter be a treaty between the United States and Canada, assented to by the state of Washington which has certain rights under the terms of it's entry into the union?


Thomas Reid: It might, but only if seines were prohibited. I should be very pleased to answer all such questions before the committee,


Pierre Édouard Blondin: This is not in order; the house is not in committee.



DEPARTMENT OF AGRICULTURE

[Stage Direction]
The house in committee of supply, Mr. Bury in the chair.
Publications, $32,197.60.
Joseph Philippe Baby Casgrain: I notice there is an increase. Would the minister give the reason for it?
Hon. ROBERT WE'IR (Minister of Agriculture) : There has been a reorganization of the branch, consisting chiefly of taking in the extension branch of the experimental farm with the old publications branch. There is an increase in advertising and publicity, $3,300; supplies and material, $2,725; and travelling, $3,000.
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William Richard Motherwell: Does the minister mean, by taking up publications again, that he desires to go on discussing his farm rehabilitation scheme in the western prairies, or would he prefer to do that some other time?
Mr. WElIR (Melfort): That would come better under experimental farms. I took the opportunity of making the announcement the other day, because it could be made either through the press or on the orders of the day; but I thought it would be just as well to make it on the introduction of estimates.


Mr. BOTH WELL:: 1 was not able to hear the minister's answer to the first question. Did he say that appropriations formerly made under other departments are now included in this item, and account for the increase?


Robert Weir: No, a reorganization has taken place in the publications branch, and we hope to centralize all work of this nature. We have included under this item work previously done under the experimental farms branch.
Mr. BOTHWiELL: Is this reorganization going to cost more, or what was the extra amount spent under experimental farms branch?


Robert Weir: No, the cost will be less. The experimental farms 'branch vote previously included part of this item, but this total is lees.


Mr. BOTHWELL:: Last year this vote amounted to $23,039. How much was spent for this purpose under the experimental farms vote?


Robert Weir: I really have not the information at hand in that form, but 1 shall be glad to give the hon. member any information in that connection that I car secure. This item really covers material anu staff for the distribution of publications.


Charles Edward Bothwell: If I understood the minister aright a portion of the money formerly expended by the experimental farms branch will now be expended under this item, but I notice that the experimental farms item is also increased this year, whereas, unless there is some other reason, it should be reduced by the amount included under this item.


Robert Weir: For purposes of administration there is a transfer; less money will be expended by the experimental farms branch in this connection.


John Vallance: I notice that in the estimates for 1934-35 there was a decrease of

$150,354 in the experimental farms vote. This year the increase on the same item amounts to $122,898. The minister is reducing the amount spent for publications under the experimental farms vote and is taking that money out of the reduced vote, though he has not yet made up what he took out last year. Last year there was a decrease of $150,000; this year the increase amounts to only $122,000, but the minister says he is extending the services. How is he doing that?


Robert Weir: There is a consolidation of the work which accounts for the increase in this vote. If I understood the hon. member aright lie said that last year there was a decrease in the experimental farms vote and that this year there is an increase. The increase in that vote, which will be discussed more fully when we come to that item, is due to the extended work of the experimental farm system.


John Vallance: I am not concerned about the increase in the vote this year, but the minister says that the amount formerly expended out of the experimental farms vote for publications now is under this item. Last year there was a decrease of $150,000 in the experimental farm vote. This year the increase amounts to $122,000 still leaving a decrease of about $30,000, yet the minister is proposing to give greater service through the experimental farms vote than he gave prior to 1935. How can he do that?


Robert Weir: Not a greater service in this work; a greater service in other work under the experimental farm vote this year.


Frederick William Gershaw: I should like some information with regard to the distribution of these publications. Are they sent out only upon request by a farmer or someone else interested, or are they sent out by the department to those who might be interested? For instance, there are some valuable publications dealing with irrigation crops. I was wondering if they were sent particularly to people on irrigated farms. Then in connection with the experimental1 ranching stations, which are doing valuable work, I find that a great many ranchers know nothing about the results of the experiments that have been carried out.


Robert Weir: A mailing list is maintained, and in addition the publications are sent out upon request. With such publications are included lists of other publications that are available. Then if a person wishes to send for any others the list is there and he can make his selections. The method of sending out publications without requests has been considered many times in the past, and

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it was felt that there would be a great wastage if they were sent out to others than those sufficiently interested to write for them. If persons do write, however, a list of publications in wdiich they may be particularly interested is sent, and they are invited to mark the ones they would like and return the list. Then their names remain on the mailing list.


Charles Edward Bothwell: In 1932-33 the item for publications amounted to 87,500. In the following year it was $28,231. Last year it dropped to 823.000, but this year it is the highest of which I have record, 832,197.60. The experimental farms vote is also higher this year. I think the minister should give the committee some information as to the publications that are being taken out of the hands of the experimental farms branch and being looked after under this item, with the estimated saving to the experimental farms branch. So far we have not been able to get any explanation of this vote.


Robert Weir: I regret that I do not seem to have been able to make myself clear to the hon. member. He has said that in one year there is an increase and in another year a decrease. This vote may go up or down, depending on the demand for these publications. At the end of one year, due to a lack of requests, there may be left a supply of material which will be taken into consideration in making the estimate for the following year.


Joseph Philippe Baby Casgrain: I should like the minister to give us some information as to the publications that are put out. I have here the annual report of the Department of Agriculture for the year ending March 31, 1934, and at page 65 publications are dealt with. It gives the numbers of the publications issued; 28, 88, 151, 161, 162, and so on. I should like to know what publications are being issued at the present time by the experimental farms branch, what publications in future will not be issued by that branch, and w'hat new publications are to be issued to account for the increase in this item. I think we ought to have that information.


Robert Weir: The money in this rote is not for the printing of publications, but for the distribution of them.


Joseph Philippe Baby Casgrain: Does it cost that much?


Mr.   AVEIR@Melfort: Yes.


Mr. DONNELLY:: The minister has assured us that the cost will be less this year. How can he tell us whether or not it will be less, unless he can tell us how much he will save from the vote for the experimental farms?
Unless we know how much he saves on that which has been included in the experimental farm vote, the committee cannot form any opinion as to what we are saving how it is being saved or where it is being saved.


Robert Weir: The branch has been enlarged this year, and part of the administrative work done by the experimental farm will be done by this branch.


James J. Donnelly: How much?


Robert Weir: We are not in a position to say exactly how much.


James J. Donnelly: Then how can you tell whether or not you are saving money?


Joseph Philippe Baby Casgrain: Surely the minister ought to be able to give us some idea of how many men he will employ, how long they will work, and whether he is going to have a larger number of men employed later on. He must have based his estimate for the increase on certain figures. I understand him to say that the money is for distribution. Will it be paid to new employees? If so, will they be employed by the civil service commission, or simply at the will of the minister or the officials in his department? Since the money is for distribution, I think we are entitled to have this information. I understand the postage or mailing does not cost anything. The expenditure, as I understand it, is to place these pamphlets and documents in envelopes. Who will employ these men? Is it a political move, for an election?


Robert Weir: There are no wages contained in this increase.


Joseph Philippe Baby Casgrain: What is it, then?


Robert Weir: This has to do with the sending out of publications, and so on. The staff of the publications branch is appointed by the civil service commission; but this increase is a matter of-


Joseph Philippe Baby Casgrain: Accountancy?


Robert Weir: No. It is an increase in supplies, materials, expenses and travelling, as I have indicated, and certain extension exhibits which were formerly taken care of in the experimental farm vote.


Joseph Philippe Baby Casgrain: Has the deputy who is assisting the minister the details of the vote? The figures ought to be given to the committee.


Robert Weir: The increase or the total vote?	-
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Joseph Philippe Baby Casgrain: The total vote.


Robert Weir: For this year's vote the figures are as follows:
Advertising and publicity:
Clipping service, $600.
Newspaper advertising and radio, $1,000. Mats for press services, $900.
Photographic and lantern slides, $800. Temporary assistance, $1,497.60.
Supplies and material:
Metal stencils and ribbons, $850.
Mimeograph ink, $800.
Mimeograph stencils. $300.
Mimeograph paper, $8,000.
Printing, $4,500.
Stationery, $750.
Newspaper subscriptions, $100.
Envelopes, $5,500.
Replacement of duplicating machinery, $1,000. Transportation:
Cartage, $1,100.
Postage and express, $1,000.
Transportation and travelling expenses to persons travelling, $3,500.


John Vallance: Now that we have
entered upon a discussion of this matter I think it would be wise to review these expenditures since the time the present Minister of Agriculture took over the administration of the department. Let us see what he has done each year under the item of publications. In 1930-31 we find a vote of $31,000; in 1931-32 there is a vote of $38,000. Then in 1932-33 it is reduced to $7,500. In 1933-34 it is back again to $28,231; we are climbing up. This year it is back to S32,197.60 an amount not far below the $38,000 he asked in 1931-32. I do not doubt the minister's statement of expenditures, but the point which arises in my mind is this: In the year 1932-33 the vote was only $7,500, and I am wondering if anything was done in that year, or was this particular branch of the department allowed to dwindle away to nothing? Is the minister now making an effort to catch up and leave the department in the same condition as that in which he found it?-at least I hope he will leave it.


Robert Weir: The difference is
accounted for by the fact that because of lack of demand supplies have piled up at the end of one year, thereby enabling a cut being made in the estimates. If I remember correctly in the year following the one in which there was a vote of only $7,500 the amount was greatly increased due to the fact that the supplies had been almost exhausted. My information from the officials of the department is that no demand for publications has been refused.


Charles Edward Bothwell: The minister has been good enough to give us the details as to how he expects to spend the vote for which he is 
now asking. We would like further to have the particulars as to how the moneys voted last year were spent.


Robert Weir: I am sorry I have
not the figures for last year before me, but I shall be very glad either to submit them to the committee or to send them to the hon. member seeking the information.


Edward James Young: Mr. Chairman, I have on
my desk a publication outlining the poultry marketing scheme which is to be voted on next week in Saskatchewan and other western provinces. I should like to draw to the attention of the minister the answers to questions which he laid upon the table yesterday. Question 4 was as follows:
What sum of money was advanced by the dominion marketing board for the purpose of promoting the marketing scheme for eggs and poultry in Saskatchewan, and to whom it was advanced?
The answer was "No sum." I objected to that answer because I had in my possession a telegram stating that the pool officials in that province had publicly admitted that they had received $20,000 which they were using to pay some ninety-five speakers who were getting $4 a day and their expenses to go out through the province promoting the scheme. The minister said he would give a better answer to-day, and to-day he told us that some sums of money had been advanced, but not for promotion purposes. When I asked him if the money could be used for promoting this scheme he replied, if I heard him correctly, that it depended on what meaning one would take from the word "promotion". I think he is not treating the house fairly. We have a right to a definite and clear answer to the question, and I trust the minister will give us a full explanation now.


Robert Weir: I hope the hon. member does not wish to be unfair but I think he will agree with me when I finish my statement that he has been unfair. I did not state yesterday that I would give a better answer. The difficulty was that due to a disturbance in the house I could not hear the telegram or the information he read from it, and it was because of that I asked that his question stand as a notice. It was the way the question was worded by the hon. member for Weybum, asking what sum was voted for promoting the scheme that made it impossible to give a direct answer because of the use of the word "promoting." There is no desire on the part of myself or any of my officials to avoid giving information. That would be useless even if we

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desired to do so because all information must be produced and submitted to the house. But the hon. member will appreciate the difficulty in giving a direct answer to a question that has in it a word like the word "promoting."
Money has been advanced by the dominion marketing board to the proponents of this scheme on the basis recommended last year when the bill was before the house, not for the purpose of promoting the scheme in the sense that the word "promoting" is usually used, but rather for the purpose of presenting the scheme to the people. Part of it is being used for that purpose and part of it for organization incidental to the scheme. The reason that made this peculiarly a problem for the dominion marketing board was the amount of misrepresentation that had taken place in the west, particularly by one section of the press. I would have preferred not to make this statement, but rather than give the impression that we were attempting to evade making a statement I have no choice but to say that the amount of misrepresentation in western Canada, particularly by one section of the press, made it impossible for the people in the west to understand the scheme. I happen to, have before me to-night one example of this misrepresentation, and there are many. It is a special dispatch to the Winnipeg Free Press from its staff correspondent, Grant Dexter. The heading is, Announce Changes in Methods of Taking Marketing Plan Vote. It goes on to say:
This plan is radically different from the one agreed to by the dominion marketing board when the sponsors of the scheme were at Ottawa early in January.
Now that is not merely a misrepresentation but an absolute misstatement of the facts. There was only one plan that was approved by the board, but the heading implies that different plans had been approved by the board and that changes had taken place in what some of the western press announced were plans approved by the board.
The problem of the dominion marketing board was this: When I, as minister having charge of the administration of this act, decided that a vote should be taken, the problem was to get a true statement before the people who were to vote upon the scheme. For that purpose copies of the scheme were sent out, and in this case in the same mail with the ballots. The board I believe considered for some time the engaging of a large staff to present the scheme to the people, because it would have taken a large staff to put this scheme before the
people. I may say that I was consulted in that connection, and it was felt that if the board undertook to engage people to do this work there might be those who would try to give the impression that the government, with an election coming on, was selecting political speakers to go round the country and put this scheme before the people. Those who have been in contact with the board know that it is an absolutely non-political body, and it was therefore decided that the best way to put this matter before the people was to advance money to those who were the proponents of the scheme that was approved by the board, with conditions attached that the hire of halls and other out of pocket expenses were to be paid for. It was also set out that any person who wished to oppose the scheme was to be given exactly the same opportunity at meetings as those who were speaking in favour of the scheme. Certainly no criticism can be made that there was anything political about it with reference to the people who have been presenting this scheme, because I understand that those presenting the scheme have included Liberal organizers of quite large districts in the western provinces, the secretaries and high-up officials in the United Farmer organizations, as well as representatives of Conservative, Cooperative Commonwealth Federation, and in fact all political bodies. We have watched the situation as closely as we can, and any criticism that the board has received of statements being made that were not correct has at once been followed by telegrams to those responsible to check up to see if they had been correctly reported where the statements made in one or two instances were not in accordance with the facts, and the answer that we have received from each of these inquiries has been that the statements were not made as reported but that they had been misreported. An accounting is being asked for from the people who have received assistance.
I do not wish to review what I have said except to say that this is one of the problems that has given the board much concern because of misrepresentation. It was not simply a matter of difference of opinion, because no one has any quarrel with people just because of a difference of opinion. It was rather a misstatement of fact which could easily have been found out by those who made the statement to have been a misstatement.
I do wish to impress upon the hon. member for Weyburn that in view of the way his question was worded, had I stated to him
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the amount that had been advanced, my statement would have meant that that amount was advanced solely for the purpose of "promoting" the scheme, and that was not the purpose for which it was advanced. As a matter of fact the hon. member for Weyburn was a bit vexed that he did not receive the answer sooner, and the reason was the difficulty in answering the question as it was put. I shall be glad to send to the hon. member the conditions that were mailed to the people who did receive the money. I had not thought of this matter being brought up to-day although I had some of the information with me this afternoon.


Jean-François Pouliot: We want it right now.


Edward James Young: Nobody has suggested that any political speakers were being hired with this money to go out through the country. It was the minister who mentioned that Liberals and Conservatives were presenting this scheme, and we do not accuse the government of attempting to build up a political machine by this means. The question out there is this. A poultry scheme is put up and some of the poultry raisers of the west are in favour of it and some opposed Nobody knows which party is in the majority. A vote is to be taken next week to find out. The proponents of the scheme, as the minister says, have been advanced moneys out of the public treasury to hire halls and speakers who are going throughout the country laying the scheme before the people and presenting its advantages. But those who are opposing it have no such opportunities. The minister says that they are free to go to the meetings. Yes, at their own expense, and to take whatever time the chairman might allow them, but they are not being advanced money as are the proponents of the scheme. I submit that when that is done by the government you cannot say anything else than that they are advancing money to promote the scheme.


John Vallance: Was it the board that suggested that certain sums be given to this organization, or did the organization appeal to the board through the government asking for certain money?


Robert Weir: The organization appealed to the board asking for money because authority had been provided in the act; and, as hon. members will recall, some discussion had taken place when the act was before the house as to the advisability of including in it provisions to advance money to assist any organization in putting forward schemes submitted by the producers.
[Mr. R. Weir.)


John Vallance: Now that we have that admission, would the minister be betraying any confidence or would he be telling us something that we are not entitled to know, if he informed us exactly how much money was advanced to this organization?


Robert Weir: A sum of money was advanced to each of the three provinces: to Manitoba, $10,000; to Saskatchewan, $20,030 and to Alberta, $20,000.


John Vallance: What were the names of the organizations?


Robert Weir: The cooperative
organizations that sponsored the scheme. The local boards, not yet being corporate bodies, could not receive the money.


John Vallance: The organizations in these three provinces are responsible for holding these meetings and choosing those who are to put the propaganda across?


Robert Weir: The sponsors of the scheme are to present it to the people.
Mr. VALLAiNCE: And they are responsible for the salaries?
Mr% WEIR (Melfort): If there is any salary for local speakers they pay it.


John Vallance: Then there is to be an accounting by this group to the board?


Robert Weir: Yes.


Edward James Young: I understand that those who are opposing the scheme in Saskatchewan have formed a voluntary association to fight it, and I understand also that they requested that they be given a similar grant to present their side of the case to t'he public. Is that so, and if it is, what answer did they receive?


Robert Weir: That is so. at least as regards one organization, the poultry protective association. One difficulty in which the board found themselves in this connection was that unless there was, so to speak, an official body that could state that that was the only money that would be required, it was felt that if they made the advance to this body a thousand requests might be received from other bodies who might indicate that they were in opposition, so that the board would be placed in an impossible position. They felt that the only way they could do what they wished to do-that is to say, to put the matter fairly before the people-was to advance money to those w'ho had undertaken the work, as I have stated before, to place the case before the people. The money is taken out of this advance to

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pay for the charges of these halls, and every person is given an opportunity to make a statement.


Edward James Young: I understand that the
Saskatchewan poultry producers' protective association is the only organization in the province that is opposing the scheme. Has that been submitted to the minister?


Robert Weir: It is a very recent organization, and that I think is the only one from which the board has received an application. But there are other bodies opposing it; for example, the retail merchants association and the larger trade interests as well.


Edward James Young: So that the position is this. The minister has refused a grant to the poultry protective association because it is feared that if they were granted a sum the retail merchants association might ask for a grant and the commercial interests might also make a request. Did this association make any other request besides the request for financial assistance?


Robert Weir: Not as far as I am aware-not this particular association.


Edward James Young: Did they ask for the right to have scrutineers when the ballots were counted?


Robert Weir: Yes.


Edward James Young: Has that been granted?


Robert Weir: No, because neither side will have scrutineers. The whole machinery of taking the ballots and counting them is attended to by the officials of the department, and . no scrutineers will be allowed either the sponsors of the scheme cr those opposing it.


Mr. POUDIOT:: Was there a war-time elections act for hens?


Henry Elvins Spencer: Did the opponents of the scheme have ample opportunity to place their case before the marketing board?


Robert Weir: Yes.


Henry Elvins Spencer: May I ask a second question. Is the Saskatchewan protective association composed of producers or of retailers?


Robert Weir: I do not think
we have any information as to the people who comprise it. It is a recent organization.


Edward James Young: The minister has said that
the opponents of the scheme had ample opportunity to place their objections before the marketing board. Will he tell us when
the scheme was approved and also how soon this association received copies of the scheme which were promised in the letter of January 2? They could not oppose it until they knew what it was.


Robert Weir: The original
scheme was published and had been before the public for months. Notices appeared in the press and it was felt that every opportunity had been given for representation. There had been practically unlimited time and hearings were held, and everything possible was done to receive any objections that had to be made. As a matter of fact, after the hearings had been held, and after I had returned-I had been out of Ottawa-it was felt that there were still those who perhaps did not understand the scheme or who had other objections to raise, and they were asked to come to Ottawa. A session of two days took place, the whole matter being gone into fully. I am of the opinion that these people were satisfied that they had been given every opportunity to present their objections, and everything was done to put the matter before them.


Edward James Young: At this point I ought to
put these questions on the record:
Mr, Young:
1.	Did' the dominion marketing board on January 2nd, write to F. J. G. Cunningham, representative of the Saskatchewan Egg and Poultry Producers Protective Association, to the effect that as soon as the order in council with reference to the marketing scheme for eggs and poultry had been passed the board would furnish him with copies of the approved scheme ?
2.	Were these copies ever forwarded, and if so. on what date?
3.	On what date is the vote on the said scheme to be taken?
The answers are:
Mr. Weir (Melfort):
1.	Yes.
2.	No. No order in council has been passed approving the marketing scheme for eggs and poultry in Saskatchewan.
3.	Fc bruary 16, to February 23, inclusive.
So that this association wrote to the marketing board here asking for copies of the scheme so that they might understand it and be able to decide whether or not they were opposed to it. A letter was sent to them intimating that as soon as the order in council was passed approving the scheme, copies would be forwarded. These copies were never forwarded to them, and these people knew nothing about the matter until notice appeared in the post office stating that the vote would be taken at such and such a time.
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They got into touch with the provincial Minister of Agriculture and asked him whether he had copies of the scheme. He said: no, he had not; he secured copies of them from poultry pool which apparently had copies of the scheme although nobody else had. I want to ask the minister candidly whether he thinks that is giving all interested parties a chance to understand the scheme and place their views before the public?


Robert Weir: First, as regards
the question: Did the dominion board on January 2 write, and so forth, the answer to that was "yes," but the information that was asked for by Mr. F. J. G. Cunningham was whether, as soon as the order in council with reference to the marketing scheme for eggs and poultry had been passed, the board would furnish him with copies of the approved scheme. No order in council has been passed; this scheme has never been submitted for order in council; but it was felt that because notice of it was published in all the press- the press was filled with discussions of it in paper after paper, the time up to which persons might raise objections to the scheme was given-that was enough. It is perhaps regrettable that in the case of this individual a copy of the scheme was not mailed to him personally at the time, but I still maintain that I do not think he in any way suffered from lack of information as to what the scheme was or of ample time within which to submit any objection to it. We cannot yet supply him with a copy of the scheme as passed by order in council.


Edward James Young: I do not think this man
should be referred to as an individual; he was speaking on behalf of a very large association of people who are vitally interested in this matter. I would like to ask another question. The minister said that hearings were held. I presume they were held in Ottawa.


Robert Weir: Yes.


Edward James Young: Did the proponents of the scheme who came down to advance it have their expenses or any portion of them paid out of the public funds?


Robert Weir: No, they did not.


Edward James Young: Will they be able to collect those expenses from any of the moneys advanced recently which the minister referred to a few minutes ago?


Robert Weir: If the scheme is
finally passed and approved, that question may then be given consideration.
[Mr. Young.}


Edward James Young: Then what chance would
these others have had? The minister said that they had ample opportunity to come and make their case heard. Who would pay their expenses?


Robert Weir: They would have
to pay their own expenses.


Edward James Young: Precisely.


John Vallance: I would like to direct another question to the minister. When the hon. member for Weyburn was asking him with regard to taking this vote, the minister said that it would be taken by officials of the department. Are they permanent officials or officials appointed by the government from the department for that purpose?


Robert Weir: Regular officials,
permanent or temporary, but officials on the regular staff not appointed for this work alone.


John Vallance: What particular function are they performing now?


Robert Weir: They are in the
live stock branch, either the poultry division or other divisions. It was felt that they would be the fairest body to handle the vote.


James J. Donnelly: The minister said that $20,000 was sent to Saskatchewan for the poultry pool. In connection with the men who were around the country promoting or talking about this part of the scheme to the poultry producers, are their wages paid out of this $20,000?


Robert Weir: No.


James J. Donnelly: Who pays the wages of these people?


Robert Weir: We do not know. We understand the majority of them are giving their time free.


James J. Donnelly: I understand they are receiving four dollars a day and all expenses.


Robert Weir: Not out of this
money.


James J. Donnelly: The impression in the country is that this is to be taken out of the $20,000. That is why I asked the minister whether their expenses and wages are being taken from the $20,000 for the marketing scheme. Where do they get their wages and expenses?
Mr. WEIR Melfort): They do not get any wages. They do get travelling expenses and also money will be used to pay for halls, and so forth.



IS, 1935

[Stage Direction]
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John Vallance: Under this scheme what percentage of the producers have to vote in favour of it in order to make it operative?


Robert Weir: That is a responsibility that I have to take and it has not been felt advisable to set any definite figure.


Edward James Young: What?


Robert Weir: Not yet. This is the first vote of this kind that has been taken, and when the result has been submitted and considered fully, the responsibility will rest on me to decide whether I think the scheme has been sufficiently supported to warrant putting it into effect, because no scheme could be operative unless it had a very considerable support. During the debate in the committee in the house on this act I stated that I felt there had to be a very considerable majority vote for this scheme, otherwise it would be useless to attempt to enforce it.


Edward James Young: Does that mean that when the ballots are counted, the minister will decide what majority is required?


Robert Weir: Yes.


Mr. TOTZKE:: Will a certain proportion of the producers have to cast their vote at this election before the minister will accept it as a fair vote?


Robert Weir: Substantial support. I am glad the hon. member has raised that question because it reveals one of the difficulties in deciding the matter and the reason why I felt it necessary to have the whole picture before me in order to decide whether the vote was sufficiently representative. Suppose only 8,000 out of all the producers in Canada voted for the scheme and 1,000 voted against it; there might be a question whether enough producers voted in favour of it. I would think not.


Albert Frederick Totzke: That matter has not been decided?


Robert Weir: No.


Peter John Veniot: Since we are on the marketing board and the west has occupied most of the evening, perhaps I may be given a few minutes to discuss the interests of the maritime provinces. I have in my hand the Canada Gazette, extra edition, Ottawa, Friday, January 18, copy of an order in council touching the establishment of the eastern marketing board for potatoes, including Ontario, New Brunswick, Prince Edward Island and Nova Scotia. I find in this order in council under clause 3, subsection (b) :
The scheme has with virtual unanimity been endorsed by forty-eight meetings of producers and dealers held at central points throughout the producing areas of the four provinces.
I claim that the statement "the scheme has with virtual unanimity been endorsed" is a misstatement and should not appear in an order in council unless the minister has had an opportunity of satisfying himself as to its correctness. How many meetings were held in New Brunswick, when, and by whom?


Robert Weir: As a matter of fact we are all out of order in discussing this question for the length of time we have; it does not come under publications. So far as the eastern Canada potato scheme is concerned; it comes under a different category. Each provincial government sent representatives to wait on the dominion marketing board with the sanction of the provincial governments behind them. One of the provisions made in the marketing act is that if representations are made by local boards from different provinces with the sanction of the provincial governments they may be considered as sufficiently representative, although in addition to that certain other representations were made.


Peter John Veniot: What local board?


Robert Weir: I might say in connection with this potato marketing board that when it came into operation the price of potatoes I believe was twenty cents a barrel, and even one of the papers that was most critical of the scheme and of the whole act admitted in its marketing news on at least one occasion that the advance in price had been due to the setting up of the board. I believe the market price of potatoes was fifty cents instead of twenty.


Peter John Veniot: At destination, where they were sold, not at the point of shipment.


Robert Weir: At the same destination


Peter John Veniot: It is fifty-five cents for an eighty pound bag at Montreal, and there is no price fixed at the place of shipment. Your board has fixed no price, therefore you cannot claim the credit. But that is not the point I wish to raise. I shall discuss this more fully under the proper item, but I am asking this question now to give the minister time to get the information so that he can answer it when we come to it again. I feel that the minister cannot answer offhand and I am not pressing for a reply at the moment. But I want to know the number of meetings held in New Brunswick and where they were

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held, showing unanimity of potato growers in New Brunswick in regard to coming under this scheme.


Robert Weir: I shall be glad to get that information for the hon. member. I believe the committee will agree that there has been a fair amount of time spent in the discussion of this subject, which was not really in order, but for which I am as much to blame as anyone else, if not more. I move that we rise and report progress and ask leave to sit again.


William Henry Golding: Before the committee rises I would ask the minister a question. There is $20,000 appropriated to Alberta, $20,000 to Saskatchewan and $10,000 to Manitoba. Has any sum at all been appropriated for Ontario? Or will there be?


Robert Weir: Under similar circumstances, yes.


Jean-François Pouliot: Before the committee rises I regret very much-


Some hon. MEMBERS:: Order.


Jean-François Pouliot: -that the minister has spoken so much about a "scheme," a scheme that smells like rotten eggs. We do not need any scheme; we want a policy, a policy to assist the farmers in the sale of their products. I will not insist upon saying any more about it, because I shall have other opportunities. But I wish to praise the minister for one thing, for the publication of a bulletin setting out the many uses of honey, which was issued after I had mentioned the decrease in home consumption of honey. He directed his staff to write a lot about the different uses of honey, and I congratulate him upon that. I do not say that I congratulate him upon his whole policy, but I think this was a wise move on his part, and that he should publish such pamphlets about every kind of food product grown by the farmers-


Ambrose Upton Gledstanes Bury: I must call the hon. member's attention to the fact that he is out of order.


Jean-François Pouliot: I will not insist. I am sorry that when I praise the minister he will not allow me to do so.
Progress reported.
On motion of Mr. Guthrie the house adjourned at 9.58 p.m.
[Mr. Veniot.l
Monday, February 18, 1935