1936-06-02

[Stage Direction]
On the orders of the day.:
Right Hon.   S@: I notice in the press an item stating
that the government proposes to put out a new loan. Perhaps the Minister of Finance (Mr. Dunning) would like to give the house some particulars-if not to-day, to-morrow-regarding it.
Hon. CHARLES A. DUNNING (Minister of Finance):	I have not the details before
me. They appear by advertisement in the press of Canada to-day. There are three maturities between now and the first of November for which it is designed to give an opportunity for exchange immediately if the holders are willing to take advantage of it; also S20.000.000 of new money is being asked for. Some of the issues maturing are short date, low interest issues, and one, if my memory serves me aright, is $79,000,000 of five per cent securities. The opportunity of exchange is being given on the basis of either four year bonds to yield to the purchaser 1-63 per cent or thirty year bonds to yield approximately 3-30 per cent. The short term issues for which the exchange is being offered are mostly in the hands of the banks, who, of course, require short term issues for their purposes, and it is hoped that they will be largely surrendered for the new short term issue of four year bonds.


Mr. LAWSON:: Would the minister give
the interest rate which is borne by the bonds that are being retired?


Mr. DUNNING:: I am relying upon "my
memory: some are two per cent short term; the largest rate is five per cent, being a loan made in 1931. There is one other, the rate of which I cannot a* the moment state definitely.
DOMINION HOUSING ACT On the orders of the day:


Mr. C. G. MacNEIL (Vancouver North):: Is the Minister of Finance (Mr. Dunning) aware that applicants for loans in British Columbia under the Dominion Housing Act, 1935, are now being advised that loans outside the limits of the city of Vancouver are not permitted by the Department of Finance? If so, is it possible for the minister to encourage the approval of loans in suitable suburban areas, such as West Vancouver?
Hon. CHARLES A. DUNNING (Minister of Finance!: My hon. friend was good enough to speak to me about this matter. After looking into it, I can assure him that there is no departmental regulation which would prevent the granting of loans under the Dominion Housing Act outside the city of Vancouver, or for that matter, anywhere in Canada. The loan companies, of course, are the contributors or lenders of the major portion of the loans, as my hon. friend, who is familiar with the act, will know, and the decision as to whether a loan of their own money shall be made rests with them. At the same time the department is endeavouring, through cooperation with municipal authorities and others interested, together with the loan companies, to ensure the spreading of the benefits of the housing act as widely as possible. Everything the department can do to encourage loans in districts such as that mentioned by my hon. friend is being done and will continue to be done.
LOANS TO FISHERMEN On the orders of the day:
Mr. NORMAN J. M. LOCKHART (Lincoln) : May I ask the Minister of Finance (Mr. Dunning) or the Minister of Agriculture (Mr. Gardiner) if there is any indication that the moneys granted to subsidize or promote the fishing industry throughout the Dominion of Canada will be made available soon. I understand that regulations have not been adopted as yet, and that disposition of the money has been held in abeyance until such time as these regulations are passed by the governor in council. May I ask if that is likely to take place in the very near future so that the fishermen may obtain loans under the provisions of this measure?


Hon. J. E. MICHAUD (Minister of Fisheries) :: In reply I may tell my hon. friend

Employment of Youth

that the matter is still under consideration. Regulations are being worked out and will be made public shortly.
OTTAWA RESTAURANT EMPLOYEES On the orders of the day:


Mr. R. A. PELLETIER (Peace River):: I should like to direct a question to the Minister of Labour (Mr. Rogers). I have been advised that certain restaurants located in the city of Ottawa, whose employees up to the present have enjoyed one day off per week, have advised their employees that, with no increase in wages, they will be required to work seven days a week, with one day off every two weeks. I should like to know whether there are any steps the minister can take to investigate this situation, and, if he finds that such a condition does exist, whether there is anything he can do to remedy matters.
Hon. NORMAN McL. ROGERS (Minister of Labour): I shall be glad to take note of the statement of my hon. friend and have proper inquiries made.



PUBLIC WORKS CONSTRUCTION ACTS

[Stage Direction]
On the orders of the day:
Hon. H. A. STEWART (Leeds):: I should like to ask the Secretary of State (Mr. Rim fret) when I may expect the return ordered on February 20, about which I spoke to him in the house a few weeks ago.


Hon. FERNAND RINFRET (Secretary of State):: I can only say to my hon. friend that I will again direct his question to the attention of the Minister of Public Works (Mr. Cardin), whose department is supplying part of that return.
EMPLOYMENT OF YOUTH On the orders of the day:


Mr. T. L. CHURCH (Broadview) :: I should like to direct a question to the government. Two motions by private members, one by myself and the other by the hon. member for Greenwood (Mr. Massey), having to do with youth employment and reconstruction, were withdrawn on the promise that the government would consider what might be done. What has been the result of these studies; what action is going to be taken? It is nearly the dying days of the session, wo hope, and I should like to ask the government what has become of this study, what has been studied and what is the result.


Mr. SPEAKER:: Order.


Thomas Langton Church: I can bring this up on a motion to go into supply and take up far more time than I am taking up now. I think when a member asks a question, he should have an answer.


Walter Edward Foster: The minister was about to reply to the hon. gentleman.
Hon. NORMAN McL. ROGERS (Minister of Labour): In reply to my hon. friend I may say that provision was made under the national employment commission bill for the creation of an advisory committee which is to include two special committees, one of which is to address itself to the problem of youth employment. The national employment commission has been established, and we are considering with it the personnel of the advisory committee. I can assure the hon. gentleman that the government is by no means indifferent to the importance of the question he has raised, and the whole subject is receiving and will continue to receive careful attention.


Thomas Langton Church: May I say in reply to the minister-


Some hon. MEMBERS:: Order.


Walter Edward Foster: Order.


Thomas Langton Church: The minister talks and chatters at banquets. That is the sort of chatter that has been going all around the country.


Walter Edward Foster: Order.



DEPARTMENT OF MINES AND RESOURCES

[Stage Direction]
Right Hon. W. L. MACKENZIE KING
(Prime Minister) moved that the house go into committee to consider the following proposed resolution:
That it is expedient to provide for a Department of Mines, Resources and Colonization, to comprise the present departments of Interior, of Mines, of Immigration and Colonization, of Indian Affairs and the administration of the Northwest and Yukon Territories, and to provide also for the transfer from time to time to the minister of such existing or subsequently established boards, public bodies or services as may be assigned to him; and to provide further for the employment and transfer of such officers, clerks and employees at present employed in the departments of the government above mentioned as are necessary for the proper conduct of the department.

Department of Mines and Resources
He said:	Mr. Speaker, the object of the
bill to be based on this resolution, is, as indicated by the resolution, to organize in one department of the government, under the direction of a single minister, four existing departments and the several public services related thereto.
The policy of effecting, wherever possible, economies in the public service is one which is an aim of the present administration. The government believes that circumstances not only permit but necessitate, for purposes of efficiency as well as economy, the consolidation into a single department of the various departments mentioned in the resolution. The proposed consolidation is a part of the policy of reducing the cost of government as it existed at the time the present administration assumed office. When my right hon. friend the present leader of the opposition (Mr. Bennett) retired from office the cabinet was composed of twenty-one ministers in all, seventeen of whom were holding portfolios Under the present administration the number of ministers has been reduced to sixteen, fifteen of whom hold portfolios. This reduction has been effected by reducing the number of ministers without portfolio; by placing under the direction of one minister the Department of Railways and Canals and the Department of Marine and by abolishing the office of Solicitor General and assigning the functions of that office to the Attorney General and Minister of Justice.
The present bill will place under the direction of one minister of the crown, to be known as the Minister of Mines, Resources and Colonization, the departments of the Interior, Indian Affairs, Immigration and Colonization and Mines. During the past few years there has been a haphazard assignment-
(At this point Hon. W. E. Rowe, recently elected leader of the Conservative party in Ontario, entered the chamber).
May I pause, Mr. Speaker, personally to extend and to extend on behalf of all hon. members on this side of the house, and I believe with equal assurance on behalf of hon. members in all parts of the house, very warm congratulations to the hon. member for Dufferin-Simcoe (Mr. Rowe) on his having been selected as leader of the Conservative party in the province of Ontario, and upon what his selection for that high and responsible position signifies of the confidence reposed in him by his fellow members of 12739-211 £
the Conservative party. I need scarcely add that I hope and believe there will be no necessity for his occupying the position of premier of the province, at least for a long time to come. I do, however, most sincerely congratulate him, and wish him long continued opportunity of useful public service.
I was saying that there had been in the past a more or less haphazard assignment of portfolios with respect to the different departments which I have mentioned. They will now be brought together into a single department. There was a time when, for a while, they were all under the one minister. Latterly, however, while the Department of the Interior and the Department of Indian Affairs were under the direction of one minister, the Department of Immigration and Colonization and the Department of Mines were under the direction of another minister, who happened also to be the Minister of Labour. There did not seem to be any special reason why the Department of Immigration and Colonization should have been combined with that of Labour, or for that matter why the Department of Mines should have been assigned at one time to one minister and at another, to another. There is, however, a strong reason, because of their related activities, why the Departments of Immigration and Colonization, Indian Affairs, the Interior and Mines should all be brought together into one department.
The present proposed consolidation accords with the policy followed when a Liberal administration was previously in office of consolidating departments the activities of which were correlated. In 1922, the different branches of the public service related to Defence were brought together into one department of National Defence. Previously there had been a Department of Militia and Defence. A separate branch of the public service known as the naval service was under the Minister of Marine and Fisheries. There was also the air service which came under the direction of an air board, a semi-autonomous organization attached to the department of the Secretary of State and later to the militia department. The chairman of the air board was the Minister of Defence. These three branches of the public service were, as I have said, brought in 1922 into a single department known as the Department of National Defence, and have since been administered by tho one minister, the Minister of National Defence.
3308	COMMONS
Department oj Mines and Resources
Similarly there was effected under the late Liberal administration a consolidation of all the revenue departments of the government. That consolidation had been previously begun in 1921 by the bringing together under one minister of the Department of Customs and what at that time was called the Department of Inland Revenue. The new department came to be known as the Department of Customs and Excise. The income tax however, was collected by the Department of Finance, as was also the case with the sales tax. In 1927 there was created the Department of National Revenue, under the direction of one minister, the Minister of National Revenue. The customs, excise, income tax, sales tax and other branches of the service that had to do with the collection of revenue were all brought into the one department of national revenue. There was in 1928 a consolidation of the Departments of Health and soldiers' civil reestablishment into the Department of Pensions and National Health. As hon. members will have observed, the resolution that appears next in order on the order paper provides for the consolidation into one department, to be known as the Department of Transport, of three departments that relate to transport, the Department of Railways and Canals, the Department of Marine, and the civil branch of the aviation service.
The historical sequence of the departments mentioned discloses how their relative importance has changed with the development of the country. A few years ago the Department of the Interior was a very large and important department of the government. It had to do with the administration of lands in the Northwest Territories as then constituted, which at the time of the creation of the department in 1873, comprised all that part of Canada lying west of the great lakes, excepting only the province of British Columbia and the original small province of Manitoba. It continued to have to do with all the crown lands and the development of the natural resources of this area, such as forests, water power and the like, which were under the control of the federal government as well as with land settlement and immigration. But with the creation of the western provinces and the transfer to those provinces of their natural resources, and to British Columbia of the railway belt and the Peace River block, the relative importance of the Department of the Interior became less and less, and it was found possible to carry on the present activities of the department with a staff reduced from 2,500 to approximately nine hundred.

After confederation the administration of Indian Affairs, which previously had been under the management of the several provinces came under the control of the dominion. From that time until 1873 Indian Affairs was attached to the department of the Secretary of State. In 1873 it became associated with the Department of the Interior. That association will continue under the consolidation about to be effected.
From Confederation until 1892 matters relating to Immigration were under the control of the department of Agriculture. From that year till 1917 they formed a branch of the department of the Interior. In the earlier years of this country immigration had an importance much greater federally than it has to-day. What has now become of increasing significance relatively is the work of colonization as between different parts of our own country. It has been felt that that work relates itself very closely to the development of our resources, and might very well be brought under the purview of the minister who has charge of this particular field.
The Department of Mines was created in 1907. From its inception it has been under the minister of some other department of the government. Though a separate and distinct department of government it has never had a minister of its own. However, with time the development of the mining resources of Canada has been such that this industry has come to have a place second to none in importance in the economic activities of the country. The government has felt that the present day relative importance of the industry in relation to the other departments with which it will be associated will be well brought out if in the name of the new department special mention is made of mines as a part of the new organization.
I shall have to leave until the bill itself is introduced an account of the particular organization it seeks to effect. Hon. members will see that to best advantage in the bill itself. At the moment, however, I should like to indicate some of the economies which it is hoped may be effected by this consolidation. It is not possible to do this by way of a definite statement, but in a general way economies will be apparent. In the four departments there are at the present time three deputy ministers and one deputy superintendent general, three assistant deputy ministers and one assistant deputy superintendent general, four legal advisers, two editorial staffs, three publicity staffs, four translation staffs, two architects' offices, four sets of secretarial and stenographic and other staffs, purchasing agents, four officers engaged in accounting for revenue and expendi-

Department oj Mines and Resources
ture, three photographic establishments, three departments in which land business is carried on and four in which surveying is carried on; doctors are employed by two departments; welfare of natives is a concern of two departments, maps are prepared in two departments At the present time there are eighteen branches all told in these four departments. Under the proposed legislation the number of branches will be limited to eight. Another direction in which considerable economy should be effected is in the housing of these various departments. We hope before very long, it will become possible to bring the various units together, into a single building where staffs will be more immediately under the supervision of those who are at the head of the different branches and of the department as a whole. At the present time the four departments are housed in twenty-four buildings throughout Ottawa. More than half of the office space now rented is in privately owned buildings, and the yearly rent exceeds $215,000. The consolidation will reduce the office space required and eliminate the time and expense of communication between the different branches.
The law officers are of the opinion that the Public Service Rearrangement and Transfer of Duties Act is not sufficiently comprehensive to permit of the consolidation of these various departments, and they advise that to achieve that end new legislation is necessary. This, apart from other considerations, is the reason why the government has thought it well to introduce special legislation to effect the amalgamations contemplated.
In conclusion may I add, it is hoped the proposed designation of the new department may serve to emphasize the place it will hold in the national economy. In selecting a title the government has sought to look to the future more than to the past. We have sought not so much to enumerate departments to be administered as to express those activities which are likely to contribute to the future development of the Dominion. By placing mines as the first unit in the designation of the new department, emphasis is being given to the importance the administration attaches to that branch of the public service.
It is thought that the term "resources" is sufficiently comprehensive to cover all the resources of the crown under the control and management of the present Department of the Interior, including the Northwest Territories, the Yukon territory and all Crown lands, and to include all that is being done by the government in the administration of crown lands, forests, water powers, parks, geodetic and geological surveys, and work of the kind. With respect to colonization, emphasis will be given to a greater national
development in which more attention than formerly will be paid to the movement of people within our own country, while permitting sufficient attention to be paid to what may be needed when the time again arrives to encourage immigration. It will, I believe, be agreed by all that the public interest will be well served by bringing into one department of government the^e various public services which require uniform and correlated administration.
Right Hon.   S@: Mr. Speaker, at this stage of the proceedings it would seem unnecessary to say much about the resolution; full discussion will be more appropriate later. May I assure the Prime Minister (Mr. Mackenzie King) that he could not be more anxious than hon. members on this side of the house for economies in the public service, nor can he be more anxious than we were when in office.
In the list of ministers my right hon. friend has included four of us who did not receive salaries, and when he included us I do not think he helped his argument. It is true that he did reduce from seventeen to fifteen the number of ministers with portfolios, and speaking only for myself I would say that he has taken a step in the right direction. We will learn more about the economies effected as time goes on. There was a time when the Prime Minister said he was going to appoint under-secretaries. If he makes those appointments I doubt very much whether he will effect much economy. However the measure has not yet been introduced, and perhaps never will be. I think possibly it will not be introduced but if so we shall have something to say about it when the time comes.
May I suggest that the name of the raw department is too long and cumbersome. It is to be known as the Department of Mines, Resources and Colonization, but I believe the Prime Minister will agree that results are more satisfactory if we have shorter names for departments. Persons who come to Ottawa to interview ministers are not at all likely to remember departments with names as long as the one proposed in this measure. They find difficulty in knowing where to go, and I suggest that the name be shortened.


Mr. MACKENZIE KING:: What is my right hon. friend's suggestion?


Sir GEORGE PERLEY:: I think "Department of Mines and Resources" would be sufficient. The Prime Minister has left out the Departments of the Interior and Indian Affairs, and to those deletions I do not object.


Mr. LAPOINTE (Quebec East):: And Immigration.
3310	COMMONS
Department oj Mines and Resources


George Halsey Perley: Yes; but from
my point of view a short title is better than a long one. I wonder if he could not give the matter further consideration, and whether he would consider it advisable to have the department known as the Department of Mines and Resources.
The proposal is to bring four departments under one minister. As the Prime Minister has said, the Department of the Interior used to do extensive work, but the scope of its operations was narrowed and the size of the department reduced accordingly. Under present conditions it is true that the mines activities will be of greatest importance, and fn my judgment the government is acting properly in having mines mentioned first in the title.
The Prime Minister has stated that the four departments in question are housed in twenty-four buildings, half of which are privately owned. I agree with him entirely when he says that another office building should be erected by the government to house this department. I believe that in renting large numbers of buildings we are making a great mistake. From experience I have learned that even for me, one who has lived in Ottawa all his life, it is difficult to find the particular section of a department with which I may wish to get into communication. For these reasons I am entirely in agreement with the idea of bringing the different departmental branches together in such a way that they may be more easily controlled and supervised, and more closely in touch with the minister in charge.
My right hon. friend has said that the legal department has advised him the general act providing for the transfer of duties from one department to another is not sufficient to effect the desired end. I do not know anything about that phase of the matter, but whether or not it is sufficient I believe he is taking a proper course when he brings in new legislation. In my opinion it would not have been wise to rely on a general act to effect changes of such magnitude as are indicated in this measure.
I believe I have said all that I wish to say at this stage. When we have seen the bill and know more about it we shall be able to discuss it with greater intelligence and understanding. I hope the details of the bill will be such as to commend themselves to hon. members. With these few observations I am content to let the resolution pass so that the bill may be before us and be considered in the regular course, to-morrow or the next day.
Motion agreed to and the house went into committee, Mr. Sanderson in the chair.
[Mr. E. Lapointe. 1


Mr. CAHAN:: Would the Prime Minister feel at liberty to indicate more in detail the nature of the organization which is proposed under the bill?


William Lyon Mackenzie King: I was hoping that the committee would prefer to wait until the bill was introduced before discussing the proposed organization in detail. I might leave it to my colleague the minister who is at present administering the department to say a word or two on this subject, if the committee so desires, as he is more familiar with all the details of the measure.


Mr. CRERAR:: Broadly speaking, Mr. Chairman, the objective is to have one deputy minister and the work of all these departments arranged probably under eight directors. The precise manner of the classification of the work in the existing departments has not yet been completely worked out, and it is possible that we might be able to effect it with seven directorships, and then work through the directorships down.


George Halsey Perley: Does not the bill state how many directors there are to be?


Thomas Alexander Crerar: Yes, not more than eight. I might add what I am sure is perfectly obvious to the committee from the remarks of the Prime Minister in introducing the resolution, that there is to-day in these departments a very considerable amount of duplication. My theory of efficient administration rests largely on the importance of having competent men in the responsible positions, and in the carrying out of the work of reorganization that will be our aim. I feel quite certain from the survey I have been able to make of these departments that a very considerable economy can be effected in the course of time, and probably the efficiency of many branches of the departments increased.
The Prime Minister has touched on one point which to my mind is a very important one. It is extremely difficult to get economy and complete efficiency in administration when the units of your departments are scattered throughout more than a score of office buildings in the city. It makes for loss of time and a lack of actual contact in the direction of affairs, and undoubtedly adds to the expenses of administration.
I shall be very glad, Mr. Chairman, to supply any further details that may be required when the bill is before the committee.


Mr. BARBER:: The soldier settlement board is not mentioned here. Will it come under this new department?

Department oj Mines and Resources


Thomas Alexander Crerar: Yes. The soldier settlement administration, which is a separate administration, will be under the combined department.


Thomas Langton Church: I fail to see, Mr. Chairman, what is going to be effected by this particular measure. True, it may affect some official salaries, but a country with the natural resources of Canada, with our magnificent products of the sea, of the forest, of the soil and of the mine, with our immense water powers, a potential forty-two million of horse-power and only seven million or one-sixth, developed, deserves something -better. I doubt whether this country could have existed through the last five or six years had it been less bountifully endowed with natural resources. But -how have we been conserving and using these natural resources? In the maritime provinces they gave away under successive governments for over thirty-two years the natural resources of the forest, of the soil and of the mine just like Santa Claus handing presents off a Christmas tree. To somebody was given a coal mine, and to somebody else fisheries and timber lands.
What did the Drury government do in the province of Ontario? I see my good friend from Dufferin-Simcoe (Mr. Rowe) is back in the house, and he will alter things, but he will probably not get the opportunity for a year or so. What did the so-called Farmer-Labour government in Ontario do? It gave to Backus, a multi-millionaire, a principality of timber limits half the size of Belgium.
Another thing that is affected in this amalgamation of departments is immigration, which is one of the three great problems of our empire to-day, trade, defence and migration. We are not able to provide work for our own people, let alone bringing in people from continental Europe and all over the world.
Another department that is to be included in this amalgamation is the Department of Mines. Was there ever a country, Mr. Chairman, with the natural resources of Canada that had its natural resources squandered to such an extent? Do you remember the Beauharnois? The Lord never intended the magnificent resources of the river St. Lawrence for the gentlemen on St. James street. He intended those natural resources for all his people. Why have we unemployment in this country to-day? Whenever we have a policy proposed in this house to cure unemployment, we have minister after minister getting up and saying, "I will study the question." Much study on the part of the cabinet I may say is a weariness to the flesh.
I fail to see, Mr. Chairman, what good is going to be effected by this measure, a glorified omnibus department. When everything is put in its pigeonhole-natural resources over here, mines over there-anybody can go to the cupboard and help himself as has been done so far. Immigration? Walk over to the deputy and get a permit. This parliament might as well close up, for all we have done this session for the benefit of the people. I am wondering what we have a parliament for. Our parliament is supposed to do something, and the goverment is supposed to carry out its pledges. What did this government say all over the province of Ontario they would do if they got into power? They were going to conserve our natural resources, but there has been no conservation at all. The question of the natural resources is one of the main issues across the border to-day. It was an issue in our election campaign last fall, and is going to be an issue in the future, and here is the government proposing to hand over our natural resources to a deputy minister and assistant deputy minister, and no doubt there will be a whole retinue of under-secretaries. Just wait till you see the list of undersecretaries. Every private member will be an under-secretary in this new omnibus department under the control of the Minister of the Interior. The hon. gentleman who did so much for the prairies and for the farmers on the prairies in free trade in wheat and grain is now to have delivered over to him a whole kingdom of natural resources. A horse, a horse, my kingdom for a horse! Mr. Backus got a whole kingdom of timber limits given to him, a principality half the size of Belgium, handed to him by the Drury government over the heads of the legislature. Is this parliament going to do something to help conserve our natural resources? I say this country will be bankrupt, Mr. Chairman, if we do not put on the brakes in the handing out of its resources in the way we have been doing. I say here and now that a country less abundantly endowed than Canada could not have existed in the past ten or fifteen years, the way we were handing out our natural resources. There will be economy in respect of a few clerks transferred here and a few deputy ministers transferred there, while one person will be grabbing another Beauharnois, somebody else will be grabbing timber limits, and so on. Under this new department our resources will be a happy hunting ground for American millionaires.
Sir GEORGE PERLE-Y: Will the directors provided for in this bill have access to the minister himself or only through the deputy?
3312	COMMONS
Department nj Mines and Resources


Thomas Alexander Crerar: So long as I have been
in charge of any department it has always been the practice for the head of a branch or a subdepartment to have access to the minister. That I think has always been the practice and it will certainly be the practice here.


George Halsey Perley: I would remind
the minister that in the Department of National Revenue, to which the Prime Minister referred, there are three branches and they have no deputy. These three commissioners have each direct access to the minister and not through anyone else. If that is to	be	the case in this	department I	amwondering why there is a deputy minister at	all.	If the directors	are to be in	thesame position as the commissioners are now in	the	Department of	National Revenue,
what will be the function of the deputy?


Thomas Alexander Crerar: Of course, the two are
not altogether analogous. I have already said to	the	committee that	the legislation	will
provide for not more than eight directors; I think it quite likely that there will be at least seven. The purpose of having a deputy minister is to coordinate all the work; he is in a sense the general manager of the department.


George Halsey Perley: Of all the
branches.


Thomas Alexander Crerar: Of all the branches, yes;
and the work of coordination in a department of that size is very important. In the national revenue department, I understand that the present arrangement obtaining there has worked out very well. However, I have no hesitation, after studying the matter, in recommending that this department should have a deputy minister.


George Halsey Perley: Of course, when the minister says that the position in the national revenue department is not analogous to the position here, I suggest there is much more reason why a deputy might be appointed to that department than to this proposed new department. After all, the Department of National Revenue has three branches all having to do with the collection of revenue, whereas in this new proposed department all the different branches have to do with entirely different subjects not in any way related one to the other. The mines branch and the branch with respect to Indian affairs are not related in any way. It seems to me much more difficult to coordinate seven or eight branches, all of which have to do with different subjects, than to coordinate
, 
the sections of the national revenue department. However, I will wait and see what reasons the minister has for having a different setup in this proposed new department than we have in the national revenue department. I submit that he ought to be able to give us better reasons than he has advanced this afternoon why this plan should be adopted.


William Lyon Mackenzie King: I drew the attention of the house to the organization which was effected in the Department of National Defence. In that department there is one division which has to do with the military forces, another which has to do with the naval service, and a third which has to do with the air force. The three main divisions or branches of the department are coordinated under one deputy minister of National Defence. I believe successive Ministers of National Defence have found that it facilitates the coordinating of the work to have one permanent head who has complete supervision over all parts. It serves to bring the minister himself and the permanent head of the department more immediately into touch with defence as a whole than would be the case if the minister were obliged separately to consult all the heads of branches. When it comes to the special work of any branch of the department, or to special spheres of activity, the minister will certainly wish to see individually the heads of the various branches; but for purposes of general administration, of keeping a survey over large staffs, of preventing duplication of services on the part of clerks and the like, the presence of one deputy head is obviously a great advantage.


George Halsey Perley: Does not the Prime Minister agree that the correlationship between the branches of the Department of National Defence is much closer than it could possibly be between the branches of this department, which covers so many varied fields of activity?


Mr MACKENZIE KING:: I am inclined to think that, as in the case of the Department of National Defence, all branches or divisions have to do with defence, so in this department all branches and divisions have to do in the main with the development of the resources of the country which are under federal control-resources relating to mines, forests, lands, water powers, parks and certain classes of the population. Altogether, it is essentially a department concerned with such of the country's natural resources as are not already assigned to other departments of the government.

Department of Transport
Resolution reported, read the second time and concurred in. Mr. Mackenzie King thereupon moved for leave to introduce Bill No. 79 respecting the Department of Mines, Resources and Colonization.
Motion agreed to and bill read the first time.



DEPARTMENT OF TRANSPORT

[Stage Direction]
Right Hon. W. L. MACKENZIE KING (Prime Minister) moved that the house go into committee to consider the following proposed resolution:
That it is expedient to provide for a Department of Transport to comprise the present Department of Railways and Canals and the Department of Marine and the civil aviation branch of the Department of National Defence, for the organization of the department, and the appointment and transfer of the required officers and staff.
He said: The bill to be founded on this resolution is similar to the bill founded on the resolution which we have just been considering, in that it brings together under the direction of one minister three or more departments or branches of the public service which have hitherto been separately administered. In the present instance the intention is to bring into one department, to be known as the Department of Transport, the existing Departments of Railways and Canals and of Marine and also the civil aviation branch of the Department of National Defence. All of these departments are obviously concerned with transportation. The government believes that the public interest will be better served by having one department concerned with transport in a manner which will enable the minister and his staff to view the transportation problem as a whole, to think in terms of transport facilities and interests as a whole rather than to have them viewed, as is too often the case to-day, as individual services with rival and possibly conflicting interests, jurisdiction and regulation.
As hon. members well know, transportation is of importance in our national life and in foreign trade. There has been constant change in the methods of transport, which has now four important divisions. For a long time transportation by rail was considered of chief importance from a government standpoint. It was considered necessary, Canada being the size it is, to have a separate department to deal all but exclusively with railways. Some of the railways, as government owned, were in fact operated by a department of the government. Water transportation was considered of such importance as also to necessitate the existence of a separate department concerned
specially with marine matters. In addition to transportation by rail and by water, transportation on highways, especially in the individual provinces, has come to have an importance which it did not have before, and to constitute a competitive element with both the railways and waterways. Finally there is transportation by air which is fast coming to be of equal if not in some particulars of greater importance than any of the other forms of transportation. There are the four kinds of transportation, being respectively railways, waterways, highways and airways. It is obviously necessary that the problem of transportation which thus presents itself should if possible be viewed as a whole. It is believed that, by consolidating the departments mentioned in the resolution that great objective will be served, as well as the aims of economy and efficiency, and the better regulation and control of transportation activities generally. The new act will place under common direction, as far as constitutional limits permit, all federal activities concerned with railways, waterways, highways and airways.
As to the selection of the name, here again, as with the department of mines and resources, it has been difficult to decide on a designation that would be as acceptable to some as it is to others. It has seemed to the government that the term "transport" would express better than any other the field we are endeavouring to bring under the purview of a single minister. It was suggested, I think by the right hon. leader of the opposition (Mr. Bennett) that "department of communications" might be a better title than "department of transport." When my right hon. friend came into office I spoke to him about the desirability of some departments being consolidated immediately if they ever were to be consolidated. I think at the time I suggested the wisdom of bringing together into a department of communications the different departments having to do with communication. However, after considering the matter more carefully, it has seemed that "communications" would more properly be related to those services which have to do with the carrying of information, either by postal services or by telegraph or telephone, while "transport" has rather to do with the carrying or transporting of commodities or persons from place to place. It is not possible to draw a sharp line between the two. The radio, for example, might seem to relate more appropriately to communication than to transportation. Radio, for the time being at least, will be one of the services to be included in the Department of Transport. It is desirable to have the radio
Department of Transport
[Stage Direction]
linked up in an effective way with transportation services because of the many agencies it serves so well. The importance of the radio to civil aviation, the meteorological service and the like will be apparent. The government feels the more secure in suggesting the designation "Department of Transport" for the new consolidation in that this is the title which is used in Great Britain for the ministry which has to do with transportation affairs there. In 1919 the act to establish the Ministry of Transport and for purposes connected therewith was passed. A reference to the powers and duties assigned to the Ministry of Transport under the British Act will disclose that they are very similar to those which are being assigned to this new department in Canada.
The financial benefits to be derived from the merging of the Department of Railways and Canals and of Marine are impossible of precise estimate at this stage. Nevertheless, there are bound to be considerable savings. As will foe indicated by the bill itself, there will be a single minister where formerly there were two, and one deputy minister where at the present time there are two. The administrative staff of the Department of Railways and Canals, at Ottawa, inside staff, numbers 88; of the Department of Marine, 256; and of civil aviation, 15, a total of 359. It is intended, of course, to effect such economies as may be possible without injury to the public service, and without unnecessary hardship, and at the same time to increase the efficiency of the service generally. In both respects this will be a gradual development which will require to be carefully worked out.
The set-up of the new Department of Transport, and the reorganization and classification of the staff, will afford opportunity for the coordination of a number of services. It will be possible, for instance, to bring the engineering and drafting forces together so that there may be no overlapping or duplication of engineering activities. This headquarters engineering service and advice will also be available for outside work within the scope of the National Harbours Board, where heretofore local engineering activities have had little or no relation to a general coordinated scheme of development.
In other directions as well there will be definite and distinct advantages. A single purchasing branch will be set up; one legal staff will be sufficient; stenographic services can be pooled and rendered more effective; records arrangements consolidated, systematized and brought up to date. In other words, a more efficient and compact departmental

machine will in due course be evolved with a considerable saving in expenditure and an all-round increase in efficiency.
There are, of course, benefits and advantages not to be measured in dollars and cents. The chief will be as already mentioned those arising from the fact that all matters of transportation within the federal ambit will be under one department and the uniform direction of one minister, who will be able to think in terms of transportation interests as a whole rather than of individual services. Due provision will be made in the new department for the development and expansion of the latest form of transportation- the commercial air services. In addition to the inside service headquarters staff at Ottawa, both the departments of Railways and Canals and of Marine have large outside staffs which,' as they are connected with navigation services, expand in summer and contract in winter. All of these services will come, like the inside service, under the direction of the Ministry of Transport.
I think I may assume that hon. members opposite and in all parts of the house will take towards the present measure the same attitude of general approval which was adopted by my right hon. friend the acting leader of the opposition towards the previous measure, and that the house will welcome a consolidation which obviously makes for better regulation, for control of transportation activities generally as well as for economy in the public service.
Right Hon.   S@: All I wish to say at the moment is that this measure, when it comes before us, will receive our most careful consideration. I hope it will make for economy and for the better administration of the public service. As far as the name is concerned it is a matter of opinion. The Prime Minister (Mr. Mackenzie King) says he has given it careful consideration and in his opinion the title should be "Ministry of Transport." I know that my leader thinks "Ministry of Communications" would be a better name, and he will be here to speak for himself when the bill comes up on a later occasion. On that point I would submit only one thing to the Prime Minister, and that is that "transportation" sounds as if it had something to do with railways. The Canadian National railways are supposed and intended to be administered apart from the government and not by the Minister of Railways.


Charles Hazlitt Cahan: We are changing all that now.

Customs Act


George Halsey Perley: Yes, but the use of the word "transport" would lead people to think it was intended that this department really should have something to do with running the railways, so I think it would be wiser to use the word "communications." That is all I have to say at the moment, but I think the Prime Minister might consider that aspect of the question, since it will surely be brought up for discussion at a later stage.
Motion agreed to and the house went into committee, Mr. Sanderson in the chair.


William Lyon Mackenzie King: In reply to what my right hon. friend said a moment ago as to the designation "transport" suggesting that the department would have something to do with railways, may I point out to the right hon. gentleman that at the present time we have a Department of Railways and Canals, which even more emphatically expressed the relationship of the government to the railways. Under the present consolidation it is not intended to do other than take over such functions with respect to the railways as at present are under the direction of the Minister of Railways and Canals.
Resolution reported, read the second time and concurred in. Mr. Mackenzie King thereupon moved for leave to introduce Bill No. 80, respecting the Department of Transport.
Motion agreed to and bill read the first time.



CUSTOMS ACT AMENDMENT


[Stage Direction]
Hon. J. L. ILSLEY (Minister of National Revenue) moved the second reading of and concurrence in amendments made by the Senate to Bill No. 11, to amend the Customs Act.
Right Hon.   S@: I think the minister might make
some explanation as to these amendments.


Mr. ILSLEY:: I shall be very glad to do
so. Two words are changed, I think. On page 3, line 8, section 6, the word "person" is substituted for the word "party." Then at the top of page 4 there is a change in the arrangement of the words in a sentence, without changing the meaning. As originally framed the sentence read:
Whenever information has been given under oath to any officer alleging conspiracy to defraud the revenue or that goods or things have been unlawfully imported or entered . ..
This has been changed so that the words *"has been given under oath to any officer"
appear after the word "entered" instead of as they appeared originally. The changes made by the senate do not affect the meaning of the bill in any way; they are simply minor changes to improve the draftsmanship.


George Halsey Perley: Are those the
only two amendments?


James Lorimer Ilsley: Yes.


George Halsey Perley: What is the
amendment on page 5?


James Lorimer Ilsley: That is the penalty section, which repeats the section on page 4.


Thomas Langton Church: These amendments by the Senate are not printed, and often they go through without the house knowing what they are. Then later we find that they lead to untold litigation. This is an important bill, and in this instance I think we should not proceed until these amendments have been inserted in the votes and proceedings, so that we may know what they are. These provisions in connection with territorial waters, set out in this bill which has been amended by the Senate, are leading to a great deal of friction, not only on the ocean but on the great lakes as well.


James Lorimer Ilsley: I should like to point out
that there is nothing at all in this bill about territorial waters.


George Halsey Perley: Just on that
point, these Senate amendments are usually printed in the votes and proceedings, and perhaps the minister could tell us when these particular amendments appeared.


James Lorimer Ilsley: In the votes and proceedings of May 7.
Motion agreed to; amendments read the second time and concurred in.



DOMINION FRANCHISE ACT, 1934

[Stage Direction]
Hon. FERNAND RINFRET (Secretary of State) moved that the house go into committee to consider the following proposed resolution:
That it is expedient to introduce a measure
to amend the Dominion Franchise Act, 1934, with respect to by-elections and to make provision for the appointment of enumerators and other' necessary officers and for the preparation and printing of voters lists and other necessary documents.
He said: Mr. Speaker, I do not move this resolution for the purpose of"precipitating a full discussion of the matter but rather for the convenience of the house, in order to enable me to introduce the bill based on the resolution, which is a somewhat voluminous measure.
Franchise Act
[Stage Direction]
As hon. gentlemen will recall, in 1934 a measure was enacted under which lists were to be prepared throughout the dominion, such lists to be subject to annual revision. In the early days of this session the house passed a bill dispensing with the annual revision of the lists for the year 1936, but it was agreed at that time that later on we would introduce a bill to provide for the preparation of special lists in connection with by-elections. I desire to correct at once a wrong impression that has gone abroad in certain newspapers that this resolution and Bill No. 78 which was introduced last Friday have anything to do with the by-election in Victoria. Of course it would not have been possible to provide for the by-election in Victoria, which takes place on Monday, and I desire to add that even if the act of 1934 had not been amended the by-election in Victoria would have been based on the list as it stands at present, revised during the fall of last year. The special committee of the house which has dealt with electoral matters generally has recommended two measures: Bill No. 78, to amend the Dominion Elections Act, 1934, which is already on the order paper, and another bill which must be preceded by a resolution in that it provides for the appointment of enumerators and other necessary officers and for the preparation and printing of voters' lists. This is the bill I wish to introduce, if the house will agree to let this resolution pass at once. The special committee, rather than recommending a special revision of the list for by-elections, has recommended the preparation of new lists for (hat purpose. I commend these recommendations to the house, and I point out that inasmuch as it is now evident that there will not be a new electoral act and a new franchise act this session, and as there is a possibility that even at the next session of parliament the committee would not be prepared to make their full recommendation, it now becomes urgent that we have in the meantime measures to provide for lists in the case of by-elections. That is the purpose of these two bills.
As for the resolution, it is necessary only because of the expenditure involved for the appointment of enumerators and for the printing of forms, et cetera. Perhaps the house will be willing to let the resolution pass-I am sure it meets the desire of every hon. member-and allow me to introduce the bill, which can be considered later.
Motion agreed to and the house went into committee, Mr. Sanderson in the chair.
[Mr. Rinfret.J
Resolution reported, read the second time and concurred in. Mr. Rinfret thereupon moved1 for leave to introduce Bill No. 81, to amend the Dominion Franchise Act (dominion by-elections).
Motion agreed to and bill read the first time.


[Stage Direction]
Hon. T. A. CRERAR (Superintendent General of Indian Affairs) moved the second reading of and concurrence in amendments made by the Senate to Bill No. 4, to amend the Indian Act.
He said: The amendment proposed to this bill in another place simply clarified the drafting of one clause of the bill as first introduced. Section 2 of the bill as originally introduced conferred certain powers upon the Superintendent General of Indian Affairs to bring into effect by proclamation as far as they might affect Indian reserves the laws or regulations existent in any province governing the destruction of insect pests or the spraying of fruit trees and that sort of thing. The amendment we are now considering states a little more clearly the objective to be attained, and I am advised, frees the section from the possibility of misinterpretation. That is really the effect of the amendment. I have discussed the matter with the Minister of Justice and he concurs in the proposed amendment, which describes more accurately the intention of the original bill. I therefore move concurrence.
Mr. STIRLING:: Would the minister give the wording as amended?


George Halsey Perley: Perhaps the
minister will give the date on which it appeared in votes and proceedings.


Thomas Alexander Crerar: It appeared on May 6. In reply to the hon. member for Yale (Mr. Stirling) I should perhaps read section 69 of the Indian Act. It is as follows:
The superintendent general may, from time to time, by public notice, declare that, on and after a day therein named, the laws respecting game in force in the province of Manitoba, Saskatchewan or Alberta, or the territories, or respecting such game as is specified in such notice, shall apply to Indians within the said province or territories, as the case may be, or to Indians in such parts thereof as to him seems expedient.
The amendment suggested in the bill as originally brought down added to the section I have just read the following subsections:
(2) The superintendent general may from time to time by public notice declare that the

Indian Act
regulations in force in any province for preventing the spread of any insect, pest, or disease destructive to vegetation, and all that such regulations may prescribe, shall apply to Indians and Indian reserves within such province or such parts thereof as to him seems expedient.
(3) The superintendent general may from time to time by public notice declare that the laws in force in any province with respect to the rate of speed of motor vehicles and the character of motor traffic on the highways shall apply to Indian reserves within such province or such parts thereof as to him seems expedient.
Under the amendment now proposed section 69 is repealed and the following is substituted as a new section 69:
69. (1) The superintendent general, subject to the approval of the governor in council, may, as in this section provided, make regulations which, upon publication thereof in the Canada Gazette, shall apply with the same force as if the terms of such regulations had been herein enacted.
(2)	The regulations may provide for appropriate penalties, not exceeding, as to imprisonment, three months and not exceeding, as to fine, one hundred dollars, for violation or nonobservance of any provision of any regulation.
(3)	Without restricting the generality of the provisions of subsection one of this section, the regulations may provide, inter alia, for the incorporation by reference, as part of such regulations, of any specific and indicated law or regulation of and in force within any province of Canada, and in particular, and whether or not by way of the incorporation by reference of provincial laws or regulations, such regulations may provide-
(a)	with relation to Indians within the provinces of Manitoba, Saskatchewan or Alberta or within the Territories, as the case may be. or to Indians in such parts of such provinces and Territories as to him seems expedient, that laws either in the same terms as. or in like terms to, or in other terms than, those in force in such provinces and territories, respectively, with relation to game in general or to specific game, shall apply, upon publication thereof in the Canada Gazette, with the same force as if enacted in this act, to such Indians as such regulations shall prescribe;
(b)	for the destruction of noxious weeds and the prevention of the breeding, spreading or prevalence of any insect, pest or disease which may or might be destructive of or injurious to vegetation on Indian reserves;
(c)	governing the speed and operation of vehicles on highways within Indian reserves.
The purpose of this amendment is to make clearer the objects sought in the amendment to section 69 as first introduced to the house, and to make it clear that we are proceeding in a proper and legal fashion.


Grote Stirling: It is quite clear that paragraphs (b) and (c) apply to any province in Canada.


Thomas Alexander Crerar: Yes.


Charles Hazlitt Cahan: The amendment comes from the Senate, and perhaps it would not be expedient to ask for any further amendment at this time. However I should like to direct the attention of the Prime Minister to one consideration. In a country like Canada, where diverse activities have to be dealt with by different departments, it is necessary that regulations be made by some competent authority from time to time. In times past the right hon. gentleman opposite has called attention to the fact that such regulations or by-laws partake of the nature of legislation. Many of them impose penalties and have the force of law, as if enacted by statute. Under the regulations persons may be charged with crime, found guilty and imprisoned. I am entirely in accord with the considerations which the Prime Minister has placed before parliament and the public on previous occasions to the effect that such subsidiary legislation under statutes enacted by parliament should be made by the governor in council and not by an officer of the government. In the present instance the regulations are to be made by the superintendent general. I believe it would be better for us to follow the precedents of the past. The governor in council is the sole legislative body which I for one am prepared to recognize as subsidiary to the legislative functions and authorities of the parliament of Canada. While I do not wish to press the objection, I do not think the superintendent general, even with the approval of the governor in council, should be authorized to make regulations to which penalties are attached, and under which criminal or quasi-criminal proceedings may be taken When departments are drafting bills it would be well to keep that consideration in mind The same objection has been made in the past and I am repeating it now as I am in thorough accord with the policy enunciated from time to time by the Prime Minister.


William Lyon Mackenzie King: Mr. Speaker, may I thank . the hon. member for St. Lawrence-St. George for what he has just said. I believe all members of the government agree with the views he has expressed. The particular clause to which he has referred indicates that there must be approval by the governor in council of any regulation made by the superintendent general. I have no hesitation in saying that, in agreeing to that clause, the superintendent general had in mind the authority the governor in council would most certainly exercise, and that otherwise he would not have allowed the section to appear.
Bank of Canada

I believe the hon. member is entirely correct in the statement that from the point of view of drafting, emphasis ought to be placed upon the governor in council rather than upon any officer of the state, wherever such regulation may affect the freedom, liberty and rights of any individual.
Motion agreed to; amendments read the second time and concurred in.



BANK OF CANADA


[Stage Direction]
The house resumed from Monday, June 1, consideration in committee of the following proposed resolution-Mr. Dunning-Mr. Sanderson in the chair.
That it is expedient to bring in a measure to amend the Bank of Canada Act so as to increase the capital stock of the bank, to provide that certain shares thereof shall be purchased by the Minister of Finance out of the consolidated revenue fund in order to assure ownership of a majority of the shares by the government, to increase the number of directors, and to provide for election and appointment of directors in such manner as to assure voting control of the board by directors appointed by the government.
Mr. J. S. TAYLOR (Nanaimo):: 
Charles Avery Dunning: 
James Samuel Taylor: The authorized capital.


Charles Avery Dunning: 
James Samuel Taylor: I should like to have it read in view of the fact that this refers to 1912, when the Commonwealth bank was established.


Charles Avery Dunning: 
James Samuel Taylor: I do not think I am drawing any incorrect conclusion. The last paragraph I read affects the condition of the bank up to June, 1933, and it is from that statement that I am quoting.


Charles Avery Dunning: 
James Samuel Taylor: 
Charles Avery Dunning: Oh.
Bank oj Canada


James Samuel Taylor: 
Mr. R. S. WHITE (St. Amtoine-West-mount):: As one who is open to reproach from some quarters as being orthodox in money matters I desire to say a few words respecting the resolution now under consideration. I do not intend to touch at all the point made by the hon. member for South York yesterday, namely, the apparent inconsistency of the government in the legislation which it is proposed to have passed. That is a matter which the father of the Liberal party, the Prime Minister of Canada, can settle with his own family. My own view is that the proposal of the government is worthy of commendation, and I for one give it my hearty approval.
I have not been a devotee of a central bank in Canada. Many a time in Montreal I have spoken publicly against the setting up of such an institution. I am not yet convinced that it is required in this country at this time. But I cannot fail to recognize the fact that the parliament of Canada has placed on the statute books a law setting up a central bank, that it is there for good or for ill, and that no hostile words or attitude on my part can in the slightest degree affect the situation. If hon. gentlemen who prate about the importance of complete ownership by the government of a national bank or central bank will reflect for a moment or two, I am satisfied they possess sufficient logical powers to realize that this very resolution, with the bill about to be introduced, gives the government of the country, not absolute ownership, it is true, but absolute control of that bank to as great a degree as if every share in it were the property of the crown. I am satisfied that the view taken by the electors of this country during the last two or three or more years when this matter has been under discussion was that the central bank would be a bank of discount, a bank to which individuals, business firms, commercial corporations could go and borrow money; in other words, a bank that would discharge the ordinary func-

Bank of Canada
tions of a commercial bank. No advantage I can conceive of will accrue or could accrue to the people from the total possession of the share capital by the crown, that will not be extended by the measure now under consideration. I have always thought, and I always will believe, that most grave danger to the financial stability and the credit of this country would be caused if the central bank became a bank of ordinary commercial discount. It is said of Blucher after Waterloo, Mr. Chairman, as you will remember, that when visiting London and looking about, he exclaimed, "What a city to sack!" If we had in this country a central bank under the control-of the government, engaged in the making of loans upon such paper as the manager might think sufficiently secure for the purpose of the loan, well might the politicians supporting the ministry of the day exclaim on the eve of an election, "What a magnificent bank to loot!"
A good deal has been said of a condemnatory character in criticism of our chartered banks. I am not here to defend them or to say other than that they have served this country well. Representations have been made that the chartered banks are or have been sweating the blood out of the people, that they have been making exorbitant profits by high rates of interest. Is it known to hon. gentlemen that the leading bank and the largest in this country, to wit the Bank of Montreal, in its last financial year, 1935. earned a bare four per cent upon the capital investment of the shareholders? I submit that no one can possibly claim that four per cent profit is an exorbitant rate for a bank to earn and pay its shareholders upon their invested capital.
The policy of the banks is said to have caused the debacle of 1929 and subsequent years. If any will take the trouble to look at the figures they will find that the decline in prices and the recession in trade preceded the reduction in loans, and that the revival in trade that has occurred in the last three years-not it is true to a very great extent, yet more or less substantial renewal-has occurred in the face of a further reduction in the commercial loans of the chartered banks. So I contend it is impossible to attribute to the withdrawal of credit by the banks the debacle in business, and certainly it cannot be contended that a revival of trade has been in any way retarded by lack of commercial credit extended by the banks. Certain members of the house, namely the group in the left corner, trot out from time to time, as a convincing argument for something, a statement said to have been made on one occasion 12739-212
by the Right Hon. Reginald McKenna, an eminent public man in Great Britain in his day, and a very prominent banker whose opinion I dare not think is worthy of other than great respect, the statement of Mr. McKenna being that every loan is followed by or coincident with a deposit. A more unfounded statement than that could not possibly be made. I venture to say there is not an hon. member who is unaware of the fact that the proceeds of many loans obtained from banks on the discount of paper are carried out by the borrowers in their pockets, and never appear as deposits at all. Again-[DOT] and see the absurdity of Mr. McKenna's statement-when you borrow from a bank you pay five per cent, six per cent or, as the rate was at one time, seven per cent. Call it five per cent, if you like.


Mr. McGEER:: Why not call it twenty
per cent?


Richard Smeaton White: All right; call it twenty per cent. Is anyone idiot enough to deposit the proceeds of a note, upon which twenty per cent interest has been paid, in a bank that will give him three per cent interest? On its very face the thing is utterly ridiculous. Starting yesterday, as hon. gentlemen know, the rate of interest on deposits in chartered banks was reduced to li per cent, a rate so low as to be unprecedented in this country.
There is no lack of bank funds. Revival of trade is not being halted through lack of credit or money in this country. The difficulty the banks encounter, and have encountered for the last three, four or five years, is a plethora of money for which they can find no profitable use, and that is why the rate of interest on deposits has been reduced to li per cent. If hon. members will look at bank statements of recent months, they will find that the banks have invested in government bonds about a billion and a quarter dollars, obtaining on their investment a low rate of interest. But that is the only use to which they can put their surplus money. As of April 30 of this year, or about a month ago, the chartered banks had $2,157,927,000 of public deposits, and at the same time their commercial loans amounted to only $725,484,000. In other words they had nearly $1,400,000,000 of deposits in excess of their commercial loans. The difficulty, as I have said, is that the banks cannot find borrowers. It is true that there are thousands upon thousands of people in this dominion who are ready to walk into banks, give their notes of hand and take as much money as they can possibly get, but they have no

Bank oj Canada

security to back their notes. It is a trite saying, but it must be remembered that these deposits are not the property of the shareholders of the banks; not a dollar of the deposits is represented by the capital investment of shareholders. The banks are trustees for their depositors, and as trustees the banks must exercise the greatest care and the closest scrutiny in making loans. There is a new cult abroad in the land; I am not sure that I have not heard its echo within these walls. It holds that the borrower, rather than the lender, should determine the security. If credit is required to put this country on its feet in respect of its business-and we are moving forward; let no mistake be made about that-it is in the banks, available. All that is necessary is for the would-be borrower to go there with security that will warrant the trustees of the depositors in advancing the money to him.
I am afraid, Mr. Chairman, that I am to some extent wandering from the subject matter of the resolution. In indicating some of the provisions of the bill to be based upon this resolution the Minister of Finance stated that one of the sections would provide for bilingual currency. Again, personally I approve that. At the present time we have bilingual postage stamps in Canada, though I dioubt whether more than one penson in fifty thousand in this country is aware of that fact. More than eighty years ago we had in the then province of Upper Canada notes issued in both English and French by the commonwealth at Kingston, and no one suffered. If there be a sound objection to the recognition of dual languages in connection with any documents of any kind issued by the government, that objection seems to me to weigh as strongly against bills printed some in French and some in English. We have them circulating to-day pretty much throughout the country. You may get one bill wholly in French; the next time you ask for money from a bank you may be handed a bill wholly in English. The dual bills involve added cost. What practical difference can it make to the individual if the two languages are on the one bill, and a saving made? More than that, how many people are there in this house or in this country who read either the lettering or the wording of the bank note.


Charles Avery Dunning: Just the figures.


Richard Smeaton White: That is all they are concerned with, nothing but the numerals. They want to know whether it is a one or a ten, and they are praying heaven it may be a ten. But beyond the numerals they do not

give a hoot what appears on the bill, as long as they are satisfied that it is a bona fide bank note.
In connection with the setting up of the Bank of Canada, our central bank, it is of the highest consequence that that institution should continue to be a banker's bank and not a public bank. The credit of Canada is high, but it has recently had one or two shocks. Daniel Webster, speaking in the American senate eighty odd years ago in eulogy of that eminent American financier, Alexander Hamilton, one time secretary of the United States treasury, and father, I think, of the banking system as originally founded in the United States, said of Inm, "He laid his hand upon the dead corpse of public credit and it sprang upon its feet." There are dangers in this country through repudiation of contracts, through violation of solemn compacts. Instances have occurred in two provinces. If we are not careful we may find that not provinces only, but even the parliament of Canada, by misguided financial legislation, have laid their hand upon the public credit and the public credit has crumpled under its touch.


René-Antoine Pelletier: Mr. Chairman, it was once my pleasure to tell the hon. member who has just sat down that I would listen very carefully to advice which he might give me from time to time. But I regret to say on this matter I hold views exactly opposite to his. The resolution which is now before the committee is of such great importance to Canada that I feel it my duty to express my views. It is proposed to change the present set-up of the Bank of Canada. There must be a fundamental reason for desiring this change. It is realized that the functions of money affect fundamentally the life of every individual, because individuals must have money in order to survive, since money today means purchasing power, a claim on all and everything. Some say that we are here to govern the country; but that is not enough; it is not a common ground, since others will immediately reply that some of us serve only a portion of the country, namely finance, and attempt to govern the rest. There must be another'reason, more basic than all others, which has brought us here. And there is. Within the breast of every living thing there is a common desire, a desire greater than all else, an instinct, an urge, that compels us to fight to the last breath, to cling to life. It is the desire to survive. A man will rob his neighbour; he will place the blood and flesh of his body in bondage; he

Bank of Canada
will sell his immortal soul; he will grasp the last straw and cling to life until the last gasp. That desire may not always be floating on the surface of man's multitude of emotions where it is constantly in view, but no one will dare to deny that it is there. With this desire uppermost people become uneasy as they see and read of conditions existing not only round them but throughout the world, and all agree that money is the factor which is causing most of the trouble. They see a world filled with the necessities of life that they cannot obtain. Such a representative and reliable body as the London Chamber of Commerce had the following to say about our gold standard. I quote from the Times of Saturday, December 24, 1932, which printed the new monetary policy of the London Chamber of Commerce, and I refer particularly to the part entitled: Gold as a Regulator :	.
It is incredible that in a scientific age the nations should so long have been content to rely upon the fortuitous arrival and disappearance of gold as the regulator to determine when the currency should be expanded or contracted. Not only had this gold movement little if any connection with business activity within the country, but the methods employed to put additional currency into circulation and to withdraw it, were calculated to do the maximum amount of injury to the trade and industry of the country by causing wide fluctuations in the price level. To cause such fluctuations and consequent disorders was in fact a necessary feature of the system. Additional currency was not called out as required by industry and commerce; it suddenly became available owing to a fortuitous acquisition of gold by the Rank of England. As the joint stock banks could find, at that moment, no outlet in industry for the additional credit made available by the broadening of their cash base, it found its way into speculation in the stock and raw material markets. A boom having thus been created in these markets, industry began to feel the benefit of an increased demand for its products. The advances which had, in the first place, been made for speculative purposes, were then withdrawn by the banks in order to finance the industrial boom, so that before this was well under way a slump in stock and raw material markets had begun. This is the phenomenon spoken of as the "trade cycle"-


The CHAIRMAN:: Order.


Mr. GRAY:: What is the hon. gentleman quoting?


Frederick George Sanderson: I was going to ask the hon. member what he is quoting.


René-Antoine Pelletier: I stated at the beginning that I was quoting from a reprint from the London Times Trade and-Engineering supplement dated Saturday, December 24, 1932. I simply want to point out the attitude which
12739-212J
the London Chamber of Commerce took concerning gold as a regulator for currency. 'That attitude has been taken, I might say, not only by the gentlemen referred to by the hon. member for St. Antoine-Westmount (Mr. White), but by the Right Hon. Reginald McKenna. The London Chamber of Commerce certainly includes men whose standing and authority in public life cannot be questioned. However, supposing that these authorities are not sufficient and cannot be accepted by this committee, I have collected other authorities who have had something to say upon our present monetary system. For example, there is James Madison, an eminent American, who said:
We are free to-day, substantially, but the day will come when our republic will be an impossibility because wealth will be concentrated in the hands of a few. A republic cannot stand on bayonets, and when that day comes, when the wealth of the nation will be m the hands of a few, then we must rely on the wisdom of the best elements of the country to readjust the laws of the nation to changed conditions.
Then there is Justice Lurton, a justice of the Supreme Court of the United States from 1910 to 1914, who said:
The power to coin money and regulate the value thereof, and of foreign coin, is a prerogative of sovereignty and a power exclusively vested in the congress of the United States.
Another whom I would like to quote is Salmon P. Chase, and I might say in passing this is not Stuart Chase of whom we have heard recently; it is Salmon P. Chase, Secretary of the Treasury in the United States from 1861 to 1864 and Chief Justice of the United States Supreme Court from 1864 to 1873. He said:
My agency in promoting the passage of the national bank act was the greatest financial mistake of my life. It has built up a monopoly which affects every interest in the country It should be repealed. But before that can be accomplished the people will be arrayed on one side and the banks on the other in a contest such as we have never seen before in this country.
I could go on indefinitely quoting views of many people in public life, or those of practical economists, but that has been done so often that perhaps it may not be necessary at this time. However, for the benefit of certain hon. members with whom I am well acquainted, I should like to quote from one authority which I know they will not dispute. I have before me a book entitled: The Social Order, Its Reconstruction and Perfection, by His Holiness Pope Pius XI. It is a reprint of the Encyclical Quadragesimo Anno and at
Bank oj Canada

page 46 we find the following observations about money:
This power becomes particularly irresistible when exercised by those who, because they hold and control money, are able also to govern credit and determine its allotment, for that reason supplying, so to speak, the lifeblood to the entire economic body, and grasping, as it were, in their hands the very soul of production, so that no one dare breathe against their will.
Then, at page 51, I find the following remedy:
For it is rightly contended that certain forms of property must he reserved to the state, since they carry with them an opportunity of domination too great to be left to private individuals without injury to the community at .large.
I quote these observations because at times the statement has been made that when anything of this kind is brought forward it must be communism or socialism, but that does not hold true in the present instance. As I said before, the authority to which I have referred is beyond question.
The point I wanted to make was that it was bought desirable to bring about monetary reform, and people throughout the world were very uneasy. They began to study matters, and to seek out causes. They tried to determine what the causes might be, and in their studies they ran across articles such as I shall read. A report from China states:
A terrible famine is now sweeping China, news dispatches tell us, and the estimated number of natives dead or facing death ranges from 10,000,000 to 30,000,000. it is appalling to think that number of lives can be wiped out in this age of modern efficiency. But the very dimensions of the disaster in China seem to blunt our appreciation of its gravity.
The final paragraph is as follows:
Whether the situation in China to-day is at all parallel we do not know, but the words of one dispatch at least hint that the famine is not altogether a matter of absence of food. These words are that "starving parents are selling their children to gain money for food." Apparently if you have money you do not have to starve.
Of course that is in China, and hon. members may say that it is a long way from us, and that we would never be subjected to the same conditions. But to show that these difficulties are not those which only we have to face, but are common to the world, I gathered some clippings from various parts of the world to indicate that these conditions exist not only in Canada but elsewhere. This is another article from outside which may be of interest to hon. members. I quote the following from the New Era of Sydney:
Helensburgh, N.S.W. miners will carry their own dead to the local cemetery. The little south coast mining community is impoverished.

Helensburgh -mine once supported 400 coal miners. There have been no earnings for some months, and the question of burial costs has become important. The miners' lodge has decided that a tradesman be commissioned to make coffins for them, as they are required. There will be no hearse; no plumes.


Frederick George Sanderson: Order. I must remind
the hon. member that what he has just been quoting has nothing to do with the resolution under discussion.


René-Antoine Pelletier: I certainly must abide
by your decision. Mr. Chairman, but the question before us has to do with monetaiy reform, and that may be considered in connection with banking. If we are to be prevented from expressing our views on the subject I do not know how we can cooperate in bettering financial conditions in Canada. I noticed yesterday that other hon. members were allowed a great deal of latitude, and I do not believe I should be discriminated against in that respect. However I wish simply to finish the quotation. It reads:
The miners will bear the caskets-


Mr.   CHAIRMAN@: The hon, member must not proceed with the article.


René-Antoine Pelletier: Then it will not be
possible to continue quoting the articles I have before me. The point I wish to make is that I can gather information from around the world, not only from Canada, to show that the money question is at the bottom of our trouble. To come back to our own country, let me say that not long ago conditions in Canada became so bad that the people began to ask questions. The time arrived when they were expected to elect some representatives to the federal House of Commons in order to fight our battle for survival. During the campaign the people were given many promises by the various parties desiring to carry out the will of the people. For example, I have before me a pamphlet used in the provincial campaign, and headed: Alberta's Provincial Liberal Leader. These are some 644 promises contained in the pamphlet and it is hard to locate the one dealing with monetary reform, but here it is:
Usury once in control will wreck any nation.	Until the control of the issue of
currency and credit is restored to government and recognized as its most conspicuous and sacred	responsibility, all talk of the
sovereignty of parliament and of democracy is idle and futile.
Of course that is a Liberal platform. In order to prevent my being accused of bringing provincial matters into the debate I have

Bank of Canada
carefully preserved another pamphlet headed: The Central Bank. It reads:
Where Liberalism stands as against the other political parties. Issued by the National Liberal Federation of Canada, 114 Wellington street, Ottawa.
This pamphlet deals entirely with the central bank, so in reading it I cannot possibly be out of order. After a full discussion of financial policies in Canada I find that the last sentence reads as follows:
Liberalism therefore stands for the public control of the issue of national currency and credit through a properly constituted national central bank that will issue currency and credit not for private gain but in terms of public need.
Of course that is a worthy procedure, and I would be prepared to support anything of the kind at any time.
The resolution before us to-day states:
That it is expedient to bring in a measure to amend the Bank of Canada Act so as to increase the capital stock of the bank, to provide that certain shares thereof shall be purchased by the Minister of Finance out of the consolidated revenue fund in order to assure ownership of a majority of the shares by the government, to increase the number of directors, and to provide for election and appointment of directors in such manner as to assure voting control of the board by directors appointed by the government.
The resolution says nothing at all about the issue of "currency and credit not for private gain but in terms of public need." We know that throughout Canada one of the chief planks of the Liberal platform was the question of monetary reform. Throughout western Canada the utterances of certain members of the Liberal party were held up as an indication of what that party would do for the Canadian people. It has promised to fight international finance, to fight usury and to stop a condition whereby the wages of money are greater than the wages of man. The people placed the present government in office, and at the present time they have no opportunity of telling us how they feel about the matter. They cannot tell us the way they feel about the manner in which their hopes are being smashed. But we can get some idea of what is happening when we read what is written in some publications. In quoting from the Financial Post of March 21, 1936, I do not believe it can be urged that I am quoting from a social credit or communistic authority. It does not hold, represent or speak for radical views, but this is what it has to say:
With the announcement of the government's legislation to "nationalize" the Bank of Canada, all danger or any important change in the existing set-up of this institution evaporates.
The resolution closely follows forecasts made in The Post. The method of liquidating the Liberal party's campaign pledge to be followed is to increase the capital stock of the bank to a point where the government will own a majority of the shares. The present shareholders will not be disturbed and the only difference that will occur in the management will be the addition of government appointed directors.
To all practical purposes, the government's legislation is eye-wash, and it is a safe forecast that opposition groups in parliament who believe in outright nationalization will easily identify it as such.
I hope that members of the Liberal party who campaigned in western Canada on the platform of monetary reform will rise and protest against the government's present method of carrying out the promises which they made. There is the question as it is raised by the Financial Post.
We were criticized not very long ago for saying that there was no such thing as a money power, but as I listened to the Minister of finance when bringing down the resolution, I heard him suggest that a money power certainly does exist, and that this legislation was one of the ways in which he meant to get control of that money power.
What do London financiers think of this proposal of the government? I quote from the Evening Citizen's London News Bureau, a dispatch from London, dated March 23, 1936:
Bankers and financiers in London express no anxiety at Premier Mackenzie King's proposal for state control of Canada's new central bank.
"It should not be assumed," says the financial editor of the Times, expressing the opinion of "The City," to-day, "that government ownership either in Canada or New Zealand will bring about any change of real importance. It is probably true that in neither country has the government any intention of making any revolutionary change in banking or monetary policy."
The Times financial editor, however, sees danger if at a future date a political party -obviously the social credit party is meant- should obtain power to "pursue some dangerous monetary experiment."
So the big financial people, those about whom we heard so much in the Liberal campaign in western Canada, have absolutely nothing to fear, according to their own expressed opinions, from this policy of the government.
The Prime Minister (Mr. Mackenzie King) told us yesterday that he did not promise sweeping reforms to the people of Canada, and yet I hope I shall be allowed to offer him my sympathies for I realize how deeply hurt he must now feel knowing that the people of Canada expected more in the way of monetary reform than he is offering us in this legislation.
Bank of Canada

But if it is out of place for me to offer my sympathies I might be allowed, now that the time is ripe, to offer some constructive suggestions in relation to our attitude towards a central bank. But first it should be noted that monetary reform was before the Canadian people long before the elections of last October. It will be observed from newspaper reports, however, that at the recent convention of the Twentieth Century Liberal Association the subject of monetary reform was conspicuous by its absence. Perhaps that was not the time to talk monetary reform. I assume the time will be three or four years hence.
The social credit group in this house have claimed that the Bank of Canada should, apart from its other functions, be used to perform three things: First, to measure and report upon the national credit; second, to determine the amount of financial credit to be used for the just price discount; and, third, to issue a national dividend. The social credit group has been criticized considerably over the national dividend, and therefore I cannot lose this opportunity to explain to the committee how closely related a national dividend is to the Bank of Canada.
At the outset we say that the primary thing in the mind of every single individual, and of every member of this house, of everyone no matter who or where he is, is the desire to survive, and we know that survival to-day depends upon what we call purchasing power. If we place financial values higher than human values, we are refusing to recognize that inherent right of the individual. It is distasteful to be told that one places financial values above human values, but in the face of what we see we cannot say anything else. We must recognize that life is the primary thing; otherwise we must say that financial values are higher than human values.
What can be so wrong or unreasonable about this proposal and desire to guarantee a certain economic security to individuals? It seems to me that we are sent here for that very purpose, in order to give every individual in Canada a better chance to survive in this battle which they are fighting. It remains, then, only a question of technical details how this is to be done. Let us not lose sight of the main point, which is that we must guarantee to every individual that thing which life itself should be sufficient to guarantee to him.
First of all, we shall have to realize that the old idea of work and wages being sufficient to provide one with purchasing power and a livelihood is something of the past. That may sound humorous to certain hon. members who are laughing at the present time. It is quite easy to laugh when everybody else is laughing,

but it might not be so easy when one is left laughing alone, and that day is certainly coming. It cannot much longer be put off from day to day. We seek to displace that purchasing power which we give out in the form of wages, so we must always recognize that the first claim upon goods is not work or worth or anything else but it is life. Money, after all, should be used simply as a method of distributing goods. Life has the first claim upon money. What is so wrong with proposing to give to all people, regardless of class or any other distinction, this guarantee which will mean economic independence to all our Canadian citizens? After all, economic independence is the one thing which must come. I do not see any reason why, simply because someone possesses money or holds the udiip-hand over us, we should be made the slave of his will or desire in order to obtain that portion of purchasing power which is absolutely necessary in order to survive. Until the day comes when we recognize this claim of the individual as his human right we shall make little progress.
I was glad to see the Minister of Finance, when he brought down this resolution, do one thing which I am sure many people will thank him for. It has been the impression of a great many people in Canada that the Liberal party stood for monetary reform, but now those who expected any advance in monetary reform from the Liberal party will know they cannot expect it from that party, and the field of their search is correspondingly narrowed. They must be indebted to the Minister of Finance.


Charles Avery Dunning: Will my hon. friend permit a question?


René-Antoine Pelletier: Certainly.


Charles Avery Dunning: A few minutes ago my hon. friend made what he called three constructive suggestions. He spoke very quickly and I did not catch their full purport, but I gather they were intended to be suggestions as to how the Bank of Canada as contemplated by this resolution should function. I wish he would develop and explain those three suggestions, showing how they would work and in what manner we should proceed to do in this parliament what he suggests.


René-Antoine Pelletier: If I attempted to develop them and at the same time tried to keep myself to what the resolution proposes I would not get very far because the resolution does not propose very much.


Charles Avery Dunning: 
René-Antoine Pelletier: I will go over them again. The first is to measure and report upon the national credit.


Charles Avery Dunning: What is that?


René-Antoine Pelletier: In passing, I may say that I have on the order paper a resolution which calls for the establishment in Canada of an agency which would measure the productive capacity of the country. That is what I am referring to-to measure and report upon the national credit in relation to the national productive capacity of the dominion as a whole. The second is to determine the amount of financial credit to be used for the just price discount.


Charles Avery Dunning: What is that?


René-Antoine Pelletier: If, after we have determined the total amount of production, it is found that we can consume only 75 per cent of production, we shall then declare a just price discount of 25 per cent in order to reduce the price of goods so that the money in existence can take care of the total amount of production in any one cycle. The third is the issue of the national dividend. I am sure that I shall not have an opportunity of developing the resolution I have on the order paper, and thereby going a long way towards explaining the points I have been making. The references I have given are available to all hon. members. In closing I want to make this point:	Until we recognize that
life js the primary consideration and has a claim upon us before money, I see little hope for improvement in Canada.
At six o'clock the Speaker resumed the chair and the house took recess.
After Recess
The house resumed at eight o'clock.



PRIVATE BILLS


[Stage Direction]
Bill No. 40, respecting the St Lawrence and Adirondack Railway Company-Mr. Chevrier (Stormont).
Bill No. 41, respecting the Ottawa and New York Railway	Company-Mr. Chevrier
(Stormont).

[Stage Direction]
The house again in committee on Bill No. 59, respecting Thousand Islands Bridge Company

Mr. Stewart-Mr. Sanderson in the chair.
On the preamble.
Mr. MACKENZIE (Vancouver):: Consideration of this bill in -committee was postponed at the request of the hon. member for Winnipeg North (Mr. Heaps). He subsequently expressed himself as quite satisfied with regard to the point he raised, and withdrew his objection.


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


[Stage Direction]
Mr. T. L. CHURCH (Broadview) moved the second reading of Bill No. 60, to amend the Criminal Code (trial of young persons).
He said: Mr. Speaker, -this being near the end of the session, five minute speeches from now on would be, I think, in order.
Some hon. MEMBERS:: Hear, hear.


Thomas Langton Church: I hope that it will come by the end of next week. Recommendations on behalf of this bill have been made by judicial officers. The bill relates to the trial of j'oung persons. Under the Juvenile Delinquents Act the parents have to be notified, and the magistrate or the judge has a procedure to go through prior to and after the trial of the delinquents. My proposal is to extend these provisions, the wisdom of which in times like these has been demonstrated, to those under nineteen years of age. As I stated in moving the first reading of this bill, many people who are in trouble- some among the most dangerous criminals we have-are of about that age. The class I have in mind, however, is the high school element that are out of work through no fault of their own, and many of whose parents axe on relief. As a result they go to new Ontario, where, having no references, they cannot get a job. I have before me a letter from a commercial traveller who lives in the riding of the hon. member for Greenwood (Mr. Massey). My correspondent, who is a reputable commercial man, upon a recent trip through' new Ontario visited Sudbury, Kirkland Lake, Timmins and other mining centres. "At Kirkland Lake," he states, "twenty Canadian young men were locked up and given eight days in gaol on vagrancy charges. These boys were only looking for work. And we call this a free country. Let
3328	COMMONS
Criminal Code-Trial of Young Persons
any young Canadian go to one of the ore mining centres and seek work and see what he will get."
Many children who are to-day in factories should be in school, and nearly all the young offenders come from poverty stricken homes, where the father is out of work. They have never had a real chance. Many of them are handicapped since birth through insufficient food and clothing; too often, when the father is on relief, the eldest boy leaves home and goes to new Ontario or other places, and the only charge that can be laid against him is that he cannot get work. Section 238, the vagrancy section of the criminal code, states:
Every one is a loose, idle or disorderly person or vagrant who,-
(a)	not having any visible means of subsistence, is found wandering abroad or lodging in any barn or outhouse, et cetera.
Lads like these are the forgotten element under the constitution.
By this bill I do not intend to place any additional expense upon the public. As I said in moving first reading, in the larger cities there are many bodies such as the Lions Club, the Big Brother movement, the Big Sister movement and so on, all engaged in helping in this work and willing to help still more. Right here in the city of Ottawa we have the Lions Club, which has been helping in this work for some time past. I repeat that the parents or other next of kin should be notified. When these children get into trouble they do not want their parents notified, and in many cases as a result wind up serving a term in gaol, and come out with that stigma attached to them. I do not want to criticize the magistrates, but only a couple of weeks ago two of these young fellows were arrested in New Toronto. They were eighteen years of age, and when the magistrate said, ''Supposing I give you three months in the reformatory," one of them replied, "It doesn't matter to me." The magistrate said: "So you've reached the indifferent stage. I don't wonder at it. Where is your home?" The boys replied that their home originally had been in Winnipeg but that they had been just roaming around for the lost four years. Accepting their statement that they had never been in trouble before, the magistrate gave them ten days each. The only complaint against them was that they were trying to get work, and that is the sort of thing that goes on. Many of these people are sent down without even being heard. It is not the fault of the magistrates; it is the system that is to blame. All I ask is that when the minister considers the amendments to the criminal code he should also consider extending the

provisions of the Juvenile Delinquents Act to those under nineteen years of age, especially those of the high school population. Only the other day at the Union station in Toronto -and I saw this myself when the train was about to leave for Ottawa in the morning- twenty-one of these young people were brought back from new Ontario, some of them were charged with vagrancy and all being brought to the Guelph reformatory because there was no room for them in the gaols in northern Ontario. Their only crime was that they could not find jobs. After checking up on the stories of some of these cases of young people the police often find that they had never been in trouble before, but they simply could not get work.
I do not ask anything out of the way. I believe this problem should be dealt with as it is in England to-day, where many of the prisons have been closed. This problem has been brought about very largely by the depression. I have before me the blue book of the Inspector of Prisons for the province of Ontario which shows that these conditions are largely due to the depression, and when the depression is over no doubt they will vanish. But the state has a duty to give these youths a fair trial, and if they are not represented by counsel there are in the large centres service clubs that could take care of such matters. Many lawyers are doing such work for nothing, and I only ask the minister to look into this matter. If he can give it any attention when the criminal code is being amended I hope he will do so, because I know some of these high school children of the city of Toronto who have got into trouble through no fault of their own; they were only looking for work in new Ontario and other places.


Ernest Lapointe: Mr. Speaker, my hon. friend has suggested that this matter should be considered and a decision rendered before the introduction of the general bill concerning the criminal code, but only this afternoon I heard him complain that we were asking too much when we took time to study things and did not reach decisions. I have reached a decision as far as this bill is concerned; I am compelled to oppose it and to ask that it should not pass.
May I say, Mr. Speaker, that the provisions of the Juvenile Delinquents Act are the result of very careful work and deliberations on the part of the child welfare council, which is composed of philanthropic people all over Canada who are deeply interested in the work. Some of the members of that council are magistrates who have had long experience with regard to

Criminal Code-Trial oj Young Persons
the procedure concerning children. I was minister in charge of the act when it was put through some years ago, after a meeting of that council, and I would hesitate to change some of the important provisions of that act merely because my hon. friend thinks they should be changed. According to this act a child is defined as follows:
"Child" means any boy or girl apparently or actually under the age of sixteen years: provided, that in any province or provinces as to which the governor in council by proclamation has directed or may hereafter direct, "child" means any boy or girl apparently or actually under the age of eighteen years: provided further, that any such proclamation may apply either to boys only or to girls only or to both boys and girls.
Three provinces, British Columbia, Manitoba and Alberta, by resolution of their governments have asked that the governor in council should raise the age to eighteen, so in those provinces when boys or girls under eighteen years of age are arrested they are classed as juvenile delinquents under the act and treated in that special way. This request has not been made by the other provinces; indeed, in at least one province the lieutenant governor in council has asked that there should be no change as far as that province is concerned. Various bodies in some of the provinces have asked that the age should be raised to eighteen, but the federal government has always required that this request should be made by the governmental authorities of the province, by the lieutenant governor in council. So in three of the provinces at least the notices, which my hon. friend would require to be given to the parents, are given as far as children under eighteen years of age are concerned.
My hon. friend wants the provisions of section 10 of the Juvenile Delinquents Act, which requires notice to be given to the parents or to friends of the parents before a juvenile delinquent is tried, to apply to children between the ages of sixteen and nineteen, and in the second place his bill demands that counsel should be appointed by the court to defend such juvenile delinquents. As I have said, with respect to the first provision, in three provinces it would not be needed, because there the age has been raised to eighteen. As far as the other provinces are concerned I believe this would have the effect of delaying the trials of those nineteen years of age or under, especially when there are no relatives in the city or town where they have been arrested and where their trial will be held. If notice should be sent to relatives elsewhere and an investigation should be carried on to find them, I do not think it would be in the
interests of justice or even of the boys themselves that their trial should be delayed as long as would be required for that purpose. When the relatives are in the city where the trial takes place it must be exceptional if they do not know of or are not made acquainted with the troubles in which their children are involved.
I do not agree with the statement of my hon. friend, which is also in the explanatory note attached to his bill, that many young people are being sent to gaol in a mechanical way. I think that is a terrible indictment of Canadian courts, and one that is neither fair nor justified. It is certainly not in accordance with any reports received by the Department of Justice. On the contrary I believe that our judges everywhere take special care when the delinquents who are brought before them are young people. Surely my hon. friend could not substantiate that charge against the courts of Canada, that they are simply throwing away boys and girls, sending them to gaol mechanically without proper trial.
If we are to raise the age under which boys and girls are to be considered as children and come under the provisions of the Juvenile Delinquents Act I think this should be done with the cooperation of the provinces. The provinces are more directly interested in this matter. The age limit as at present set is the limit asked for by the child welfare council, and before any change is made I would like to have their views about it, as well as the views of the provinces.
With regard to the proposal that counsel should be supplied for the defence of juvenile delinquents, and even those who are no longer juvenile but under the age of nineteen, that would constitute a considerable change and, if it were made, surely a demand would follow that this should be done in all cases. If it is the provinces that would have to pay for the defending counsel we should at least consult with them before putting that provision into our statutes. The administration of justice is under provincial jurisdiction. If my hon. friend has in mind that this should be an expense of the dominion government, that might be considered, but I think his bill would be ultra vires as far as that goes because it would be a charge on the treasury of the country and so my hon. friend would have no right to introduce such a bill.
On the whole, in spite of all that is said and suggested in the introduction of this bill, I think Canadian justice is not so bad, and many things that have been said are not
Bank oj Canada

justified. The courts of the country take great care when it comes to the trial of young people. I do not think the change suggested by this bill is necessitated by any condition which exists at the present time. Therefore, as I said, I am sorry, but I do not feel justified in accepting this bill, and I oppose its second reading.
Motion (Mr. Church) negatived on division.



BANK OF CANADA


[Stage Direction]
The house resumed consideration in committee of the proposed resolution with respect to the Bank of Canada-Mr. Dunning-Mr. Sanderson in the ohair.
Gerald Grattan McGeer: Mr. Chairman, before I proceed: to a discussion of the features of the resolution of which I wish to speak, I want to correct some statements that were made this afternoon by the hon. member for St. Antoine-Westmount (Mr. White). If I recall his remarks correctly he suggested, first, that there is an abundance of money available and that there is no shortage of funds for all proper needs of the public. In support of that extraordinary statement he suggested as evidence the fact that there is something over $2,000,000,000 of bank deposits and less than $1,000,000,000 of current loans, and while he did not say so, the inference was left that apparently there are bank deposits available for financing Canadian activities to the extent of roughly $1,500,000,000.
May I place on record the actual facts as at the end of 1935. Our bank deposits consisted of the following items:	Deposits
in foreign countries, $348,000,000; current accounts, that is accounts on which cheques may be drawn every day in the transaction of the commerce of the country and upon which the banks do not pay any interest because they do not treat them as loanable deposits, $568,000,000; time or savings accounts, which are withdrawable only on notice to the banks, and upon which the banks pay interest, $1,445,000,000. As against those savings bank deposits the banks had out current loans of $828,000,000, and in addition to that they had advanced on account of national, provincial, municipal, railway loans and other public securities the sum of $1,175,000,000. Besides that there were call loans outstanding totalling $82,000,000, making a total of investments by the banks in Canada of $2,085,000,000. If we subtract these savings deposits from the amount the banks

had actually invested in that type of security we find that the banks had invested $640,000,000 more than the total of savings deposits.
But that does not tell the whole story. In addition to the $2,085,000,000 invested in the type of loan and security I have mentioned, the other investments of the chartered banks totalled $900,000,000. As a matter of fact, to-day the total volume of our bank credit currency, our bank note currency, our Bank of Canada currency and our metal currency is roughly about 50 per cent below where it would be had the same ratio of advancement been sustained from 1915 to 1935 that had obtained from 1867 to 1915. Since 1918 there has been a steady decrease in the total volume of money available for the Canadian people. The hon. member went a little further and suggested that when Reginald McKenna, not only a banker but a man who for many years was one of the most distinguished chancellors of the exchequer who had ever graced the British House of Commons, said that the banks make deposits by calling bank loans deposits he was talking utter nonsense. Not only has that distinguished statesman and banker in England made that statement, but it is recorded as the unanimous conclusion of the British Macmillan commission, the report of which has been properly described by Sir Josiah Stamp as the outstanding book on modern practical monetary and political economy. Not only have the Macmillan commission confirmed the statement, but similar statements have been made by Carl Snyder possibly one of the most distinguished economists and statisticians in the employ of the federal reserve banking system. It has recently been made definitely by one who graces the high position of chairman of the board of governors of the federal reserve system of the United States, Mr. Marriner Eccles. In addition to that group of distinguished authorities, the facts speak for themselves.
I have pointed out to the committee that to-day there are so-called bank deposits in Canada totalling $2,361,000,000, and deducting the amount of foreign deposits, or deposits in branches of Canadian banks operating abroad, the amount is something over $2,000,000,000. How much money have we in Canada? We have created by law under the Currency Act metal coin to the value of $39,000,000. We have bills issued by the Bank of Canada under the authority of the Bank of Canada Act, amounting to $99,000,000; we have bank bills, issued under the Bank Act by chartered banks, amounting to $135,000,000, and we have foreign currency in the possession of our Canadian banks, totalling $21,000,000. In all, the entire

Bank oj Canada
money wealth of Canada is $294,000,000. If we take that $294,000,000 from the $2,361,000,000 the bankers claim they have on deposit, we have the amount of bank deposits in excess of the total money in issue and in circulation in this dominion.
In other words the bankers have created, in excess of the money that exists in the dominion, bank deposits to a total of $2,067,000,-
000.	How was that money created? It was created by the simple process which modern banking practice has adopted of substituting bank credit created by a bookkeeping system, and issued as money fictitiously called bank deposits-mere statements of accounts which are promises to pay, money which does not exist in the country and which the banker cannot meet if he is ever called upon to meet it. I do not know if anybody else can do that kind of thing without going to the penitentiary. I challenge the government or the Department of Justice to find in our currency or banking legislation a single authority or provision which sanctions the principle that our chartered banks are following, namely that of trading short in money. I am inclined to the opinion

and I speak not only as a member of parliament but as a lawyer who has given some little time and thought to this subject-that this is the greatest unchallenged swindle and vicious exploitation of the egregious principle of trading short that is to be found in any department of the mad activities inspired by the pursuit of profit. I was amused w'hen the hon. member for St. Antoine-Westmount spoke sympathetically about the capacity of banking institutions to earn profits. I have checked the figures and I find that in 1934, on a capital investment of $144,000,000, the banks made an actual profit of $18,000,000 which figures out roughly to 12 per cent-not bad for a depression year. But that was not all. That profit was paid out by the Bank of Montreal at the rate of 8 per cent, a decrease from 1930 when they paid 14 per cent. The other banks ranged from 6 per cent to 12 per cent, but the average stood at about 12 per cent; then they put aside as rest account an amount almost as great. Last year, in 1935, their profits were a little better, and the preliminary dividend paid by the Bank of Montreal in the first quarter of this year, 1936, is, I believe, four per cent, indicating that the depression is not going to put our banks out of business so far as taking care of themselves is concerned, because with that profit and with the reduction in the interest rate on deposits probably we shall see our banks weather the storm.
I am sorry that I was not in the house yesterday to listen to the speech of the hon.
Minister of Finance (Mr. Dunning), but I should like to put part of his statement on the record to interpret what I think this resolution really means. As reported at page 3257 of Hansard, he said:
I should like now to discuss the factors which have led the government to propose amendments to the constitution of the bank providing for a predominant interest by the public in the ownership and also voting control of the bank. In the first place, the fundamental consideration is that the primary function of a central bank is to regulate the volume of currency and credit in use, and this is so vital a national function that it should not be left to the control of private interests. The issue of currency has always been regarded as a prerogative of the crown. It ic true that in all modern countries during the growth and development of banking practice, the use of bank notes, and particularly of cheques drawn against bank deposits, has come largely to supplant in the business world the use of hand to hand currencies. The significance of this amazing development of bank credits as the chief form of purchasing power was not at first perceived, and it is only in comparatively recent times that governmental authorities and monetary experts-and indeed central bankers themselves-have come to realize that the primary function of a central bank was not to make loans to a necessitous government or to provide other banking services but rather to control the volume of credit and currency in the best interests of the economic life of the nation.
Well, if that is the power of the central bank it means that in that bank's authority is the right to control the economic progress of the people of the nation, which means that in that bank is vested control over the government's right to set and maintain an advancing standard of living for the people. The hon. Minister of Finance went on:
But the point is that for the first time in this country we have an institution which is charged with the function of regulating credit and currency, and which therefore will conscientiously and deliberately-


Charles Avery Dunning: Consciously.


Gerald Grattan McGeer: Consciously, not conscientiously. I am glad to have that correction because I am sure they would not do it conscientiously. I do not blame the minister for correcting that slip. He went on:
-and which therefore will consciously and deliberately set influences to work which will affect the price level as well as the level of production, trade and employment. Surely this is too vital a function to leave in the hands of a privately controlled institution.
Well, it has been there for some time, and we know something about the state of the price level and about trade and economic conditions and the state of unemployment in the nation. He went on:
If this function is to be performed at all it should only be by an institution under
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adequate government control. This is my main point, Mr. Chairman; in fact it is the sum and substance of the whole matter.
A little later on, carrying the same line of reasoning right to the issue of national policy, he quoted with approval the expressions of the right hon. the Prime Minister (Mr. Mackenzie King) in this wise:
I am however, discussing the question of control of policy, and I do say that with respect to policies, whether they relate to trade, to shipping, to marketing, to finance, to defence, or to any other phase of a country's economy, those policies, if they are the expression of view of a government representative of the people, should be capable of being carried out without interference from any institution whatever.
Then in the course of the debate, as reported at page 3298 of Hansard, this quotation from the Prime Minister was read':
The Liberal party believes that credit is a public matter, not of interest to bankers only, but of direct concern to the average citizen. It stands for the immediate establishment of a properly constituted national central bank, to perform the functions of rediscount, and the control of currency issue, considered in terms of public need. A central bank is necessary to determine the supply of currency in relation to the domestic, social and industrial requirements of the Canadian people; and also to deal with problems of international commerce and exchange.
And this discussion followed:
Mr. Mackenzie King: What is wrong with that?
Mr. Douglas: There is nothing wrong with it. What we are asking for now is legislation to implement that.
Mr. Dunning: It is before the committee.
If that is true, no one can have any fault to find with the proposed resolution, but I cannot bring myself to believe that the adoption of the principle of a partly privately owned, partly publicly owned, Bank of Canada is in conformity with the declared acknowledgment that the bank controls the economic life of the nation and has the power to regulate its currency and credit, or that it is not vesting in this Bank of Canada a power which will enable it, if it wills, to interfere with the government in matters of national policy.
Let me put the matter to the committee on a plain, simple arithmetical basis. We now meet a situation where it is proposed to continue five million dollars' worth of shareholders in the Bank of Canada. They are to have the right to vote seven votes, through their representatives on the board of directors. The government vests its authority in a governor and deputy governor and gives four of its directors double voting power, or eight votes. Very well. Let us assume that three

of the directors appointed by the government decide to vote with the seven directors representing the shareholders, and who can guarantee in face of the argument presented by the Minister of Railways (Mr. Howe) for the removal of the Canadian National Railway trustees, that the appointees of this government are going to conform with the wishes of the government and that they are not going to conform with the wishes of five million dollars' worth of shareholders?
How far then are we going to carry out the promises that were made, absolutely, not assurances that were given as a mere idle message to the people in the heat of a campaign, but promises that were recorded upon the pages of parliamentary history in the House of Commons by the Liberal party as it made its stand before it went to the last election in its appeal to the electorate? Of course, I feel strongly on this issue. I may have been over-optimistic; I may have been unwarrantably enthusiastic in my conclusion that Liberalism was going to establish, over the oligarchy of money power that long had ruled this and other countries, the supreme sovereignty of parliament and of democracy by restoring to parliament the constitutional right, yes, may I go further and say, the constitutional duty to create the currency and credit media of exchange which were necessary to sustain government and the progress of humanity. I may have been over-optimistic in my belief that the day was going to dawn when Liberalism would usher in an era when mankind in this country would be emancipated from the slavery of debt and from the bondage of usury. And I do not believe that that promise is being fulfilled.
Now, may I say a word by way of reminder, because I want to warn the government and the Liberal party to-day that if I am right in my conclusions as to the way in which the public has interpreted these promises that were made while the government was in opposition, and that were made as a pledge before the election, if they are not fulfilled then it may be that the Liberal party is placing its footsteps on that trail of broken promises which leads not only through the valley of humiliation but down deep into the abysmal depths of eternal oblivion.
Now I may be pardoned if for a moment I refer to a distinguished chancellor of the exchequer who went through the experience of restoring the gold standard money system to Great Britain. When the Right Hon. Winston Churchill, standing in his place as Chancellor of the British Exchequer in 1925, recommended the restoration of the very kind of

Batik of Canada
system which the Bank of Canada Act has adopted, and promised the people of Great Britain the security which it offered, on the assurance that every expert commission and every authoritative source of administration worth listening to had declared for the necessity of returning to the gold standard, he did, of course, enter the valley of oblivion and, in his case, not without very much humiliation, because he bobbed up in the British House of Commons in 1936 with probably one of the most profound acknowledgments of imperfect action, which had been corrected by time, that had ever been made. In 1936 he says:
Great Britain has shaken herself free from the Gladstonian structure and tradition of finance. Now, he said, we are a protectionist nation with a substantial tariff, which we should no doubt raise higher as the years go by. The gold standard was not only dead, but had been relegated for a long period to purgatory. We have no sinking fund except a small fortuitous balance of the last year's surplus. We have dealt with the American debt liability in a manner which nobody would have tolerated in the years when I was chancellor.
A significant feature of Mr. Churchill's address will be found, I think, in the fact that he acknowledges that under the direction of the classical economy and orthodox finance of the nineteenth century his 1925 policy of deflation, which I venture to say is being more or. less carried out by this type of legislation and by our own budget this year, a budget balanced through reduction in public expenditure and increased taxation, brought England to disaster. To save herself she was compelled to resort to managed currency, industrial bonuses, protection of home industry, regulation of trade and commerce, public works and social services; and in fact, on his authority-and no one is in a better position to speak than he is-the way to recovery is to be found, first, in the abandonment of the classical, orthodox school of economy and finance of the Victorian era, and, second, in the adoption of a policy based upon all that has been denounced in the past as unsound. He added this touch, which I think is interesting: After relegating the gold standard and orthodox, classical economists to the place in hell from which they came, and wholly justifying the complete repudiation of the ideas of that classical, orthodox economy and finance, which he formerly championed, he said:
All those rules by which chancellors of every party, except in war time, were rigidly bound, have now been swept away. How former chancellors would stare, if what has been done could all be explained to them, he said, as he blandly referred to himself as "the last orthodox chancellor of the Victorian epoch."
Amidst cheers and laughter he appealed to the committee "to recognize me as the last of the Mohicans."
I am afraid that Mr. Churchill cannot have that privilege, because apparently the effect of the retreats in the Ottawa valley, which I believe was not altogether a land of the Mohicans but rather a land of the Iroquois, has been to produce another chancellor, a chancellor of the Canadian exchequer, who has really stuck solidly by the thing which brought Churchill to disaster in 1925.


Charles Avery Dunning: My hon.	friend	willpermit me to say that I have not at any time advocated what Mr. Churchill did in 1925, which was to return to the old gold Standard. My hon. friend should not accuse me of that. I have never been	guilty	of	it on	any
occasion, for I do not believe it would be a good policy.


Gerald Grattan McGeer: I am glad to have my hon. friend's explanation of	that.


Charles Avery Dunning: It	is not	an	explanation;
it is a straight denial which I expect my hon. friend to accept.


Gerald Grattan McGeer: No, because Churchill
never advocated a return to the old-fashioned gold standard. He put Great Britain upon exactly the same basis that the Bank of Canada Act has placed the Dominion of Canada to-day.


Some hon. MEMBERS:: No, no.


Gerald Grattan McGeer: Read your Bank of Canada Act. Let us see what Churchill said in 1925. I expected this. He said:
During the late administration, late Chancellor of the Exchequer (Mr. Snowden) appointed a committee of experts and high authorities to examine into the question of the amalgamation of the treasury and the Bank of England note issues.
He goes over the list of these experts and says that His Majesty's government intends to follow the report of the committee.
We thus resume our international position as a gold standard country. That is an important event, but I hasten to add a qualification. Returning to the international gold standard does not mean that we are going to issue gold coinage. That is quite unnecessary for the purpose of the gold standard, and is out of the question in present circumstances. It would be an unwarrantable extravagance which our present financial stringency by no means allows us to indulge in. Indeed, I must appeal to all classes in the public interest to continue to use notes and to make no change in the habits and practices they have become used to for the last ten years. The practice of the last ten year's has protected the Bank of England and other banks against any appreciable demand for sovereigns or half sovereigns. But now that we are returning publicly to the gold standard in international matters with a
The Royal Assent

free export gold, I feel that it will be better for us to regularize what has been our practice by legislation. I shall therefore propose to introduce a bill which, among other things, will provide the following:
First. That until otherwise provided by proclamation the Bank of England and treasury notes will be convertible into coin only at the option of the Bank of England.
Secondly. That the right to tender bullion to the mint to be coined shall be confined in the future by law, as it has long been confined in practice, to the Bank of England.
With these qualifications our standard under the Bank of Canada Act is identical.


Charles Avery Dunning: Not at all.
Mr. MeGEER: Parliament has, of course, by legislation suspended, under the sanctions which are contained in the Bank of Canada Act, formerly contained in the Finance Act, the right of people to secure gold without a licence. Parliament has also denied the right to hold gold as a private privilege in Canada. But neither of these rights existed in 1925 or during Mr. Churchill's tenure of office as Chancellor of the Exchequer. The right to export gold was lost in 1914. The right to demand gold was lost in 1914, and no provision was ever brought back that established that right as an inherent privilege.



THE ROYAL ASSENT

[Stage Direction]
A message was delivered by Major A. R. Thompson, Gentleman Usher of the Black Rod, as follows:
Mr. Speaker, His Honour, the deputy of His Excellency the Governor General, desires the immediate attendance of this honourable house in the chamber of the honourable the Senate.
Accordingly, the house went up to the Senate,
And having returned,
Mr. SPEAKER informed the house that the deputy of His Excellency the Governor General had been pleased to give in His Majesty's name the royal assent to the following bills:
An Act for the relief of Birdie Louise Coleman Wilson.
An Act for the relief of Solomon Hyman, otherwise known as Saul or Sam Hyman.
An Act for the relief of Lewis Gould.
An Act for the relief of Hyman Stotland.
An Act to incorporate The Economical Mutual Fire Insurance Company.
An Act respecting The Northern Trusts Company.
An Act to incorporate The Equitable Life Insurance Company of Canada.
An Act respecting The Pension Fund Society of the Bank of Montreal.
An Act for the relief of Pedro Alfonso Baptista.

An Act for the relief of Louise Isabel Sutherland Chaplin.
An Act for the relief of Clara Violetta Dodge Connolly.
An Act for the relief of Marie Consuela Hill Montabone.
An Act for the relief of Lona Marie Vaughan Burnett Gravina.
An Act to amend The Canadian and British Insurance Companies Act, 1932.
An Act to amend the Indian Act.
An Act to amend the Customs Act.
An Act for granting to His Majesty certain sums of money for the public service of the financial year ending the 31st March, 1937. _
An Act for granting to His Majesty certain sums of money for the public service of the financial year ending the 31st March, 1937.


[Stage Direction]
The house resumed consideration, in committee of the proposed resolution with respect to the Bank of Canada-Mr. Dunning-Mr. Sanderson in the chair.
Mr. MeGEER:	The main point the committee is considering is not merely a change in the form of ownership of the stock of the Bank of Canada. That is simply incidental to the establishment of control over the creation and issue of the currency needs of both government and people in the Dominion of Canada. The issue that came up in the last election campaign, and that I think was stressed more than anything else, was a plain and simple one:	Shall parliament
delegate its power to create by law and put into circulation the currency and credit which constitute the media of the exchange needs of both government and people, and issue the currency and credit media of exchange in terms of public need, or shall they be subject to the limitation of being issued in terms of private gain. That issue is fundamental to the establishment of a new era of ordered progress. If we fail to meet our promise to the electors of Canada in that regard we shall fail to fulfil a promise which amounted to a guarantee to bring about a fundamental change in the practical political economy that governed parliament in the past, under which social and economic security disappeared and poverty and destitution became the order of the day after education and science had created circumstances under which we should have looked forward to unbounded progress and prosperity.
I do not know that there is any need to hurry with a matter so fundamentally important to the well-being of future generations. To-day we are carrying a debt load of nine and a half billion dollars created

Bank oj Canada
under the private money system which has persistently issued currency and credit in terms of private gain. If we are going to make a change that is going to save humanity from an appalling calamity, then we as a parliament should take time to give full and mature consideration to this matter. I am going to suggest to the government that it is unfortunate that a measure of such great importance should have been introduced in what are now recognized as the closing days of this session of parliament, and I am going to ask the government to accept the following amendment, which is moved by myself and seconded by the hon. member for Kootenay East (Mr. Stevens):
That this resolution be referred to a select committee of parliament consisting of six members of the senate and seven members of the House of Commons, and that such committee shall be empowered to investigate all matters relating to currency and credit, banking, finance and commerce and to prepare and present to parliament for its consideration at its next sitting a bill that will bring about the establishment of a properly constituted central bank through which shall be performed the functions of rediscount and the control of currency issue in terms of public need, not possible private gain, and through which the supply of currency and credit shall be determined in relation to the domestic, social and industrial requirements of the Canadian people.
Of course I know it is easy to say that in connection with these issues one should appreciate the plight of the government; that public opinion is not prepared for fundamental changes; that there may be difficulties in the Senate and even in the House of Commons. But one thing is certain; it is that the Liberal members of this house and the electorate throughout the Dominion of Canada have a right to know why the fulsome promises made by the then opposition when it opposed this Bank of Canada Act, and made to the electorate in connection with the establishment of a national central bank, properly constituted, that would be publicly owned and publicly operated, are now to be altered to mean a central bank partly owned by the public and partly owned privately, under which a hundred thousand $50 subscribers are given a preferred security at the rate of 44 per cent. By this resolution we tell these shareholders: We do not need your money and we will not let you have a voice in the management of the bank. Therefore all this resolution is doing, so far as the privately owned part of that banking institution is concerned, is creating a preference for a few on a 44 per cent investment basis, and establishing a power and an authority that may be
in a position to frustrate the government in the establishment and maintenance of national policy.
Believing as I sincerely do that this measure does not fulfil the fundamental promise that was made and that this government and the Liberal members of the house were elected to fulfil, I think time for consideration would be advisable, and I am sure that after due and proper consideration a greater change would be brought about in the right of the nation to control the issue of currency and credit than is contemplated in the legislation to be founded on this resolution.
Ernest Lapointe: I do not know whether I should raise a point of order, but I would like to call to your attention, Mr. Chairman, the fact that this resolution is now being considered in committee of the whole. We are not sitting as the house; we are a delegated body of the house. I do not believe that tire committee of the whole, or any committee for that matter, can delegate to another committee any matter which has been sent to it for its consideration.


Mr. STEVENS:: On the point of order; it is quite competent for the house sitting in committee of the whole to make amendments to resolutions or bills. Then the committee of the whole reports to the house, and it is then in the hands of the house to accept or reject the report. That is done constantly. During the last five weeks the Minister of Finance has sat in his seat and handed to his colleagues I venture to say at least twenty-five amendments to resolutions.


Ernest Lapointe: But not appointing another committee.


Henry Herbert Stevens: I am talking about amendments to resolutions.


Ernest Lapointe: I grant that, but that is not the question I raised.


Henry Herbert Stevens: W'hat I have indicated is done constantly. In this committee, sitting as a committee of the whole house, an amendment is offered; it is referred to the house as a whole for adoption or rejection. In my opinion that is in order. Of course it is easy to raise a point of order and laugh the matter off.


Ernest Lapointe: My hon. friend has raised many in his parliamentary career, to my knowledge.


Henry Herbert Stevens: These are serious matters, affecting the interests of this country. The views I hold may be all wroa)g, but that is not the point. The point is: Is this to be a free forum or is it not? I listened last night, as
Bank of Canada

I have done, to the Prime Minister speaking in the most eloquent terms of the freedom and rights of parliament, and I endorse his views on that. But the tendency to raise points of order on everything when, in fact, the control of the whole situation is in the hands of the government, is not upholding the freedom of the house. If the government do not want to accept the amendment, there is a way, the parliamentary way, the recognized way, of deciding the question, and that is to vote down the amendment. The Minister of Justice is an authority on parliamentary procedure, but he cites no rule, gives no authority, simply says that the amendment is out of order, and the chairman is then supposed to rule it out of order.


Some hon. MEMBERS:: Order.


Ernest Lapointe: There is no debate on this.


Henry Herbert Stevens: I am quite in order. I say that this is not sound parliamentary practice. If there is a violation of a rule, let us know what the rule is; let the rule be quoted. A point of order should be based upon a rule. I protest against this method of lightly disposing of amendments which are offered in sincerity. I submit that the amendment is in order.


Gerald Grattan McGeer: The only thing that would have been necessary to meet the point suggested by the Minister of Justice would be to make the resolution read:
That this committee' recommend to the house that the bill be not introduced now but be referred to a committee of parliament.
But I appreciate the suggestion. I have said what I wanted to say about the question. If the government are not disposed to give this matter the consideration that it should receive I am not going to stand on a point of order. I put it forward with a request that the government consider its expediency. Probably the worst thing that could happen would be to have a resolution forced on the government that they were not willing to accept and then have the kind of committee that would bring in the most devastating or disastrous report.
However, what I wanted to do was to place my position on record. That is what I think should be done.


William Lyon Mackenzie King: Mr. Chairman, may I say to the hon. member that if he had really desired the government to give this matter consideration he would have shown to the government the ordinary courtesy which every hon. member usually does when he has in mind bringing forward a motion intended for the consideration of the govern-

ment, namely have said something about it in advance to some member of the government. This amendment has been proposed, at this moment, without any notification, that I am aware of, to a member of the government. The hon. member now says that his great desire is to have the government give the matter very careful consideration. I wonder if hon. members realize that this amendment is a suggestion to refer the question of the constitution of the Bank of Canada away from the consideration of the House of Commons, which it is now receiving to a select committee of parliament to be composed to begin with of six members of the Senate. If hon. members of the House of Commons wish to support a proposal of that kind I think if it is in order they should be given the opportunity.


Some hon. MEMBERS:: Question.


Henry Herbert Stevens: Before the question is
put I wish to say just a very few words. As intimated last night, it is my intention to reserve my full discussion of this matter until a later stage, that is if this amendment is not carried. In the meantime I should like to make a few remarks on the resolution as amended.


William Lyon Mackenzie King: The point of order should be disposed of first.


Henry Herbert Stevens: I beg pardon; I thought it had been disposed of.


Frederick George Sanderson: I think it is a well known principle that the committee of the whole cannot delegate its responsibility or functions to a special committee of the house or to a standing committee of the house. I think the authority, Bourinot's Parliamentary Procedure at page 529, fourth edition, covers that very well.
The committee of the whole have no power to refer a resolution to a special committee. Its functions consist in either reporting the resolution or refusing to report it. Special committees cannot accept references from the committee of the whole. For these reasons I rule the amendment out of order.


Henry Herbert Stevens: Now, Mr. Chairman, we are back on all fours again.


Ernest Lapointe: It is not so light as the hon. member suggested.


Henry Herbert Stevens: I am not suggesting that it is a light matter.


Ernest Lapointe: The hon. member did.

Bank oj Canada


Henry Herbert Stevens: The Minister of Justice a little while ago treated it as a frivolous matter. Now that we are back to the resolution I wish to make a very few observations.
It is frequently stated that the present or existing system of banking and finan/ce, in this instance the Bank of Canada or the general banking system or the financial system of the country, is to all intents and purposes a perfect system. That is, no suggestion of change should be entertained. But I have before me a brochure issued by the bankers' association in 1923, which contains some interesting matter. It will be recalled by the committee that in 1923 or 1924, I have forgotten which year, parliament amended the Bank Act so as to inaugurate a system of inspection of banks, and for the last twelve or thirteen years a system has been in operation which is and for many years has been recognized as a highly successful one. In the utterances of the bankers' association in 1923 I find these words:
Of all the proposed amendments to the Bank Act a system of government inspection will least stand the test of experience elsewhere and of common sense, and the plan is objectionable not from the standpoint of bankers and shareholders but of depositors who would inevitably be lulled into a false sense of security with a resultant demand upon the government when disaster occurs.
I cite that to indicate how futile and foolish is the tendency to pooh-pooh and ridicule any suggestion for change or progress. Here were the bankers who quite seriously, no doubt, declared that the proposal for bank inspection would not stand the test of experience or common sense. I was reminded of our venerable and very much beloved member from St. Antoine-Westmount (Mr. White) who this afternoon described as idiots those who hold that bank loans create bank deposits. He used the expression, "Who is there who would entertain such an idiotic idea?" Well, in the same brochure I find these words:
Nearly all loans are made by credits entered upon the books of the bank, or by cheques or drafts or acceptances, and these pass into the general clearing of the community of which only resulting balances are settled in money.
As far back as 1923 we find the bankers' association giving expression to the very suggestion that some people in this session of parliament regard1 as foolish and idiotic.
As the hon. member for Vancouver-Burrard (Mr. McGeer) so ably disclosed in his observations, it is the creation of credits by the banks which in large measure account for the rise in the deposits. There is nothing fictitious, nothing mysterious about the matter.
A man may go to a bank and borrow $1,000 on his own note of hand. The hon. member for St. Antoine-Westmount said that he might take the money and walk out. That is true; but quite likely he would pay it to some one for goods or services, and in that way the money would immediately return to the bank as deposits. What usually occurs is that the banker simply enters a credit to the individual borrowing, or if he secures his loan by the discounting of paper such as bills of exchange, notes of hand and so on, they are simply entered to his credit in the bank, and cheques issued against them.
I would suggest to the Minister of Finance that we might very well have a new column in bank annual or monthly statements showing the extent to which general deposits are accountable by loans. As a matter of fact a very substantial portion of general bank deposits-I am not speaking of savings deposits -are created in that way. There is no question about it. I remember reading a speech of one of the-


Charles Avery Dunning: I never denied it.


Henry Herbert Stevens: It was denied this afternoon, and ridiculed. We were asked who would be such idiots as to believe it.


Charles Avery Dunning: I thought the hon. member was referring to something I had said.


Henry Herbert Stevens: No; I do not think the minister would make such a statement. I cite that because what I am seeking to impress upon the committee is this: The fact that we are asking for progress and for changes in the law does not indicate any disregard for stability. There is too great a tendency to suggest that any proposal of the kind is an invasion of the stability of our banking or financial system. I do not intend to proceed at greater length this evening, because when the bill is introduced I shall deal with the matter more generally and at greater length.


Thomas Langton Church: Mr. Chairman, as I said a few days ago, it is all very well for us to call this a free parliament, but unless a member is permitted to speak upon a resolution and1 if necessary to divide the house, parliament is not free and shows the need of constitutional and parliamentary reform. The present resolution is just what I would expect from the present government. From Vancouver to Halifax they have expressed different policies concerning the Bank of Canada. We know and have heard what the government's policy was in the Pacific province. A few days ago we heard what it was in Quebec and the maritimes, and notwith-

Bank oj Canada

standing what the Prime Minister may say I can tell the committee what it was in Ontario. In that province the policy of the government was one of straight public ownership; there is no doubt about that. They were going to get money from the bank to build breakwaters and harbours at the city of Toronto and elsewhere. Members of the Senate and House of Commons came to that city and indicated that they were going to use the Bank of Canada not only for ordinary banking purposes but for many other purposes. As I have said, the policy in each province was different. If I were asked my opinion I would say that the last state of the Bank of Canada is going to be worse than the first under this government. To-day the people of Canada are wondering what is going to become of the Bank of Canada. We spent a large amount of money on a royal commission in 1933, but before the bank has been functioning a year we turn the whole thing upside down and go back to where we were. I say, "God save the bank from its friends." In my humble opinion it will be a glorified Home Bank. As I said before, the government has got us into hot water in connection with the British North America Act, and I suggest that it would have been much better to leave the bank alone for a year or two in order to see how it would function.
A royal commission was appointed, but this resolution turns the report upside down. After the report was presented to parliament an act of parliament, being chapter 43 of the statutes of 1934, was enacted. I should like to point out the difference between the functions of the bank as indicated in the statute and the proposed new functions as indicated in the resolution, because they are as far apart as the poles. Yesterday, when it was indicated that the Prime Minister had stood for public ownership, he said that the interpretation was not a proper one, and explained that he wanted control, but not necessarily government ownership.
We have heard a great deal of talk about government control. When and where has it existed in Canada? Has it existed in connection with the railways? When was there a time when we had government control over anything or the tariff or the bankers' association, when has it existed since we have been a country? This resolution interferes with the whole scope of the Macmillan report. The Macmillan commission was appointed on July 31, 1933, to make an exhaustive inquiry as to whether we should have a central bank, and if so, whether it should be publicly or privately owned, or a combination of private and public ownership with the banks having
(Mr. Stevens.]
representation. Of the thirty-six countries that have central banks six countries, and some of the largest, have public ownership the Liberals were to pattern the Bank of Canada after the hydro-electric enterprise in Ontario; that was the shining example which Liberal candidates held up before the people in the last election-it was done here in Ontario-and they said that the Bank of Canada was to be a straight public ownership institution of that sort. Seventeen other countries have a central bank under private ownership. Eight countries have the ownership divided fifty-fifty between private and public ownership. There are a few others, mainly in Latin America, where the bank is partly privately and partly publicly owned, with the chartered banks having representation on the board.
Legislation was enacted on the basis of this Macmillan report. The chairman of the commission was the Right Hon. Lord Macmillan, and the commissioners were Sir Charles Stewart Addis, of London, England, Sir Thomas White, of Toronto, the Hon. J. E. Brownlee, of the province of Alberta, and Mr. Beaudry Leman, of the city of Montreal. As a result of the report of this commission parliament passed the Bank of Canada Act of 1934. The report of the Macmillan commission points out that the functions of a central bank are to regulate credit and currency; to regulate foreign exchange; to mitigate fluctuations in the level of production, trade, employment and prices as far as may be possible within the scope of monetary action, and to give expert financial advice to the government of the day. But what this resolution proposes is the direct opposite of what is proposed in the Macmillan report. The commission points out that the central bank should be a ready source of skilled and impartial financial advice at the disposal of the administration of the day. But this government does not want any technical advice.
This resolution is partly political and partly economic, and in the main, as I see it, it is political. At page 63 the Macmillan report says:
In return for the privileges which the state confers upon it-
That is, upon a central bank.
[DOT]-the bank should use its store of experience in the service of the community without the desire or the need to make profit a primary consideration.
I quote again from page 63:
The regulation of the quantity of credit is effected by the action of the central bank on the reserves of the commercial banks. By in-

Bank oj Canada
creasing or diminishing these reserves, or by increasing the cost of securing them, there is set in motion a process of expansion or contraction through the ordinary channels of banking. A central hank is thus not a competitor with the commercial banks. Its functions are regulatory and indirect.
That was the report of the commission, and the bank was created and opened its doors with a capital of $5,000,000, divided into $50 shares, which were offered for public subscription by the Minister of Finance on September 17, 1934. The offering was largely oversubscribed. The maximum allotment to any one individual or corporation was fifty shares. Shares of the bank may be held only by British subjects ordinarily resident in Canada, or by corporations controlled by British subjects ordinarily resident in Canada. The maximum holding permitted one person is fifty shares.
The bank is authorized to pay cumulative dividends of 4J per cent per annum on its profits, the remaining surplus to be paid, after making provision for bad and doubtful debts, depreciation in assets, pension fund and all such matters that are properly provided for by banks, into the consolidated revenue fund of Canada.
The bank may buy and sell securities of the dominion and the provinces. It may also buy and sell gold and silver, and may deal in foreign exchange.
The bank has assumed liability for dominion notes outstanding and is replacing them with its own notes in denominations of $1, $2, $5, $10, $20, $50, $100, $500 and $1,000. The chartered banks are required to reduce the issue of their own bank notes to 25 per cent of their paid-up capital during the next ten years.
The Bank of Canada must retain a reserve of gold equal to not less than 25 per cent of its total note and deposit liabilities in Canada.
The bank has an obligation to sell gold in the form of bars on demand.
The chartered banks are required to maintain a reserve of not 'less than five per cent of their deposit liabilities within Canada in the form of deposits with and notes of the bank.
The central bank acts as the fiscal agent of the Dominion of Canada and may by agreement act as banker or fiscal agent of any province. The bank must not accept deposits from individuals, and thus cannot compete with the chartered banks in commercial banking fields.
12739-213J
The governor of the bank is its chief executive officer, and he is assisted by a deputy governor and an assistant deputy governor. The first governors were appointed by the government and are as follows: Governor G. F. Towers, and the government were very lucky to get a man of his great ability, integrity and capacity. The deputy governor is J. A. C. Osborne, and the assistant deputy governor, L. P. St-Amour, good men. Subsequent appointments are to be made by the board of directors of the bank subject to the approval of the governor in council.
At the first meeting of the shareholders on January 23, 1935, seven directors were elected for terms to run as follows, one until the third annual general meeting, two until the fourth, two until the fifth, and two until the sixth annual general meeting. Directors must hold at least ten shares of the capital stock of the bank, must be British subjects ordinarily resident in Canada, must not receive remuneration out of public funds in any capacity, and must have no connection with a chartered bank.
There is also an executive committee of the board of directors consisting of the governor, deputy governor, and one member of the board, which must meet once a week. The board itself must meet at least four times a year. The Deputy Minister of Finance is ex-officio a member of the board of directors and of the executive committee, but is without a vote.
The bank commenced business on March 11, 1935, think of it, just a little over a year ago, and has had no time yet to even function. A statement is required of the assets and liabilities of the bank as at the close of business on each Wednesday.
Those are the functions, broadly speaking, of the Bank of Canada, which began to function just a little over a year ago, and it has functioned well, I believe, considering the turmoil and stress which a general election causes all over Canada, and in view of the clamour and agitation there was throughout this country for a change in our banking and monetary system. Our banking system has come down from confederation, down through the dark days of the past five years, and has stood fast against clamour and agitation to change the monetary system. I think the government would have been well advised to give the Bank of Canada one or two more years in which to function, and I believe the people of Canada would prefer that, leaving
Bank of Canada

changes to come about gradually to meet changing conditions in our economic and financial life.
By the resolution now before the committee the government proposes to amend the Bank of Canada Act, and to make it a government ownership institution to the extent of fifty-one per cent. As you know, Mr. Chairman, the Bank of Canada started with a very low capitalization, only S5,000,000, a very small capital indeed, out of which the bank provided for its salaries and kept going. Now the government comes along and says: We are going to go into government ownership, but we are going to have, not one hundred per cent government ownership of the bank as we promised the electors, but only fifty-one per cent. The government says that in this way it will have some control over the Bank of Canada. But what control did it have over the Home Bank? It proposes government ownership to the extent of only fifty-one per cent instead of one hundred per cent. Is there any control over the chartered banks? Let hon. members attend the sittings of the banking and commerce committee and see how much the high court of parliament has to do with the chartered banks and the way they function. The powers of the chartered banks are prescribed by the Bank Act, but the Bank Act is being violated in many spheres of activity.
The Macmillan report at page 98 says that it is not necessary for a central bank to have much capital to start with. This resolution calls for government ownership only in name, and in my opinion it will be found that the directors will be selected in the same way that the employment commission were selected, in the same -way that the railway commission and the members of the tariff board were selected. I remember that ten years ago, when I first came into the house, this matter came up, and Mr. Fielding discussed it. I refer to this because of a remark that was made yesterday. The minister distinctly called the attention of 'the committee to the resolution before the chair, proposing government control to the extent of fifty-one per cent, and he indicated the kind of control. That is a matter which will have to be discussed when the bill is in committee and therefore I shall not refer to it on this occasion.
I shall, however, refer to the statement of the minister that in future there will be bilingual notes instead of some being in English and some in French. I would point out that this upsets the whole practice from confederation to the present time, for Sir John Macdonald,
(Mr. Church.]
Sir Wilfrid Laurier and Mr. Fielding opposed it, and bilingual currency. Why? Because it is inconvenient, and what is more it is not desired by the banking people or by the taxpayers and is against the spirit and letter of the British North America Act. They do not want to have notes of that description going all over the world. I can remember when this matter was discussed in the committee on banking and commerce fourteen years ago. I was not a member of the committee, but in the house I heard section 133 of the British North America Act quoted with reference to the use of French and English in Canada. Are you going to have a note, one side of which will be printed in French and the other in English? The thing would be simply intolerable; it could not be carried out in practice. If French branches of banks in Quebec wished to have some notes in French, a certain number of bills are distributed to the banks as demanded in actual practice but not by statute, for convenience only as now given them, but it has to be left to the good judgment of the banking institutions. This note circulation clause of the Bank of Canada Act is copied from section 60 of the consolidated act of 1934 regarding banks and banking. The principle of that section is copied into the Bank of Canada Act. This matter was not discussed in the election campaign in Ontario because such a change in the note issue in Canada is something which every government since confederation has opposed. Every government in Canada has been opposed to having notes issued in two languages and bilingual currency. I wish to protest against it on behalf of the people whom I represent. I am not speaking for all the people of Ontario but I certainly am speaking for my own constituents. As I say, Sir John A. Macdonald and Sir Wilfrid Laurier and Mr. Fielding as well opposed this proposal in the past. Mr. Fielding, Minister of Finance rose in his place in the banking and -commerce committee and said that the government would not have it; he said that the matter should be left where it was since 1867. When bills printed in French were necessary in practice a few would be printed, he said, but this should not be put into the law. When this provision of the bill comes up in committee I intend to take strong ground against this proposal.
We do not know what is going to become of the Bank of Canada. There is a division among the members supporting the government, and I submit that the resolution ought to be withdrawn and held over until next year. I see there is a suggestion that we

Bank of Canada
should come back in the fall. Well, if the government should leave this matter over for a year, it should be left over until next year or the year after, along with other bills with which the government is not yet ready to deal. It would be better to have a Bank of Canada constituted along the lines suggested by the commission of experts who went into the whole situation and that it be given a five year break, one or two of whom submitted a dissenting report. In years to come there may be necessity for a change, but I do not think that time will come in the next five or ten years. I hope the government will give this resolution further consideration and let it stand over. We know what to expect if this is to be anything like the proposal in connection with the British North America Act; we know what the hon. member for Parkdale (Mr. Spence) said in that regard. I predict the same thing with respect to this resolution, and I am sure the people of Canada will protest against this proposal with regard to bilingual notes. If the proposal were submitted to the people of Ontario the government would not have five members from that province sitting on the treasury benches.


Mr. J. C. LANDERYOU (Calgary East):: The majority of the members of this house as well as the majority of the people of Canada are fully convinced that monetary reform is essential if we are to have a permanent solution of the economic problem. I would point out that the government will be judged, not on the number of shares they happen to own in the central bank but on the policy which they put into operation. The ownership of the central bank will undoubtedly be a step forward, a step that has been a long time coming, and one that is important, inasmuch as it gives the government control over the issue of credit. Just as the people of Canada expected to have control of credit through parliament, the people of the provinces expect to have control of their credit through provincial banks. I realize that, when reforms in our social and economic life are being discussed or attempted to be made, constitutional difficulties may arise, and it is the duty of the provincial governments and the federal government to cooperate to the limit to bring about these necessary reforms. I suggest to the government that they give authority to the provincial governments to have their own banks in order to make available to the people of the provinces the credit necessary to handle purely provincial matters, so that industry may be assisted in the provinces, prices
regulated, and the economic security of the people guaranteed in so far as the provinces are able to guarantee them. I believe that with the government owned central bank and with provineially owned banks in the various provinces cooperating, economic security for the people of Canada can be effected.
Much has been said in favour of 100 per cent ownership of the national bank, and I believe it should be so. I do not think any small percentage of the people should have a special privilege in relation to the credit of the dominion. I do not believe that they would be left out of the picture when we consider the benefits which will accrue to them as well as to all other citizens of Canada from a properly constituted central bank. They would benefit as well as the rest, and I do not feel that they should have any special privileges granted them, such as 44 per cent, in connection with which we might effect a considerable saving.
References have been made to credit-how it has been created and how it should be manipulated, whether the granting of loans creates deposits and the repayment of loans destroys them. We have heard a good deal about this lately. But wherever money is created it should be created in sufficient quantities, I submit, actually to reflect our real ability to create and distribute wealth. We should see that that is the case in the Dominion of Canada. If we do not have sufficient, or if there is too much, that can be regulated. One hon. member suggested this afternoon that there is more credit available than the dominion can possibly use. He mentioned the figure of $1,400,000,000, and he said that there is not sufficient security behind the people who desire money to-day. We believe that there is sufficient security. We believe that the natural resources of the Dominion of Canada and the willingness of people to apply themselves to those natural resources should be sufficient credit. I do not blame men who to-day, under the system of private control of credit, refuse to grant to industry the money necessary for development. Knowing the position of the markets in this country at the present time, I would not condemn the man who would hesitate to invest his capital in the coal mines of western Canada, where we have fourteen per cent of the entire coal deposits of the world, along with many thousands of people without sufficient coal to keep themselves warm in winter time. But because those people have not the purchasing power to buy coal after it is produced, I would not blame anyone for not investing in projects of coal development.
Judges Act Amendment

So this question of credit and of its control is very important. The question whether it should be controlled absolutely by the federal government or whether it should be decentralized to allow the provinces to have control of their own credit for purely provincial matters is one that should be considered, and I am disappointed that the amendment of the hon. member for Vaneouver-Burrard (Mr. McGeer) was not accepted. I believe that the whole matter of money and credit should be discussed, so that there will be no more mystery in the public mind about it. These doctrines and ideas that are circulating in Canada should be thoroughly analyzed and the truth made known to the people, and I feel sure that until that is done these matters will continue to be seriously debated in this house.
Resolution reported, read the second time and concurred in. Mr. Dunning thereupon moved for leave to introduce Bill No. 82, to amend the Bank of Gamadia Act.
Motion agreed to and bill read the first time.



JUDGES ACT AMENDMENT

[Stage Direction]
Hon. ERNEST LAPOINTE (Minister of Justice) moved that the house go into committee to consider the following proposed resolution:
That it is expedient to amend the Judges Act to provide salaries for the Ontario appeal and high court judges as presently constituted; and further provide that when a vacancy occurs in the office of chief justice in appeal the office shall be abolished and the court shall thereafter consist of a chief justice and seven other judges.
George Halsey Perley: Far be it from me to try to interfere with the progress of business, but I think it would be better to suspend consideration of this resolution until the leader of the opposition (Mr. Bennett) is in the house, as he understands much more about it than any of the rest of us.


Ernest Lapointe: If my right hon. friend will allow the resolution to go into committee, I will move that the committee rise until the leader of the opposition is back.


George Halsey Perley: Certainly.
Motion agreed to and the house went into committee, Mr. Sanderson in the chair.


Ernest Lapointe: Does my right hon. friend wish that this should be post-

poned? It is merely to give effect to a law of Ontario constituting the courts of Ontario.


George Halsey Perley: If the hon. minister would be good enough to do that.


Ernest Lapointe: Very well.
Progress reported.



SPECIAL WAR REVENUE ACT

[Stage Direction]
Hon. CHARLES A. DUNNING (Minister of Finance) moved the second reading of Bill No. 76, to amend the Special War Revenue Act.
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Sanderson in the chair.
Section 1 agreed to.
On section 2-Definitions, et cetera.
James Earl Lawson: I should like to ask the minister a question applying to this bill generally, if this is the time to do it. Is this a consolidation?


James Lorimer Ilsley: No.


James Earl Lawson: Merely the amendments of this year?


James Lorimer Ilsley: That is right.


Charles Avery Dunning: There are very few administrative changes. In the main they are the resolutions which passed the committee of ways and means consequent on the budget. My hon. friend remembers the procedure.


James Earl Lawson: It seems to me that there
are a good many more provisions in this bill than were covered by the resolutions which came before the committee of ways and means.


Charles Avery Dunning: Very few. It takes quite a large bill to cover the resolutions.


Grote Stirling: Turning the pages over
rather rapidly, I am confused as between sections 2 and 3. Has part VII, on page 2 of the bill, been before the committee of ways and means?


James Lorimer Ilsley: Section 2 of the bill is the
amendment of the whole of part VII.


Charles Avery Dunning: Carried by the committee of ways and means.


Grote Stirling: All that new material
on page 2?


Charles Avery Dunning: Yes.

Special War Revenue Act


James Lorimer Ilsley: Section 2 begins at the
bottom of page 1, carries over on to page 2 and includes page 3 and part of page 4.


George Halsey Perley: I should like to ask in a general way if this bill follows the resolutions passed in committee of ways and means.


Charles Avery Dunning: Yes, it does, and where administrative changes are being made they will be indicated by the minister as we reach them. The only exceptions to the ways and means resolutions are a few minor administrative changes which will be indicated by the Minister of National Revenue as we go along.


George Halsey Perley: Quite so. Then
this section 2, with regard to stock taxes and so on, is exactly as it was passed by the committee of ways and means?


Charles Avery Dunning: Yes.


James Earl Lawson: I am sorry if I appear to
be dense, but I have no recollection of any change having been made in the transfer tax on bonds, stocks and share certificates in the committee of ways and means this year.


Charles Avery Dunning: My hon. friend will
remember that in the budget speech and subsequently in committee of ways and means I referred to a means of taxing a group of companies-I forget the official description of the group-having a type of interest which did not come within the definitions previously contained in the act. That is the only change in this section.


James Earl Lawson: So really we are not changing the rates of the transfer tax but merely making a change to clarify some situation which was not clarified under the previous act?


Charles Avery Dunning: Quite right, and to do so it was necessary to rewrite the whole section.


[Stage Direction]
Section agreed to.
Sections 3 and 4 agreed to.
On section 5-Consumption or sales tax of eight per cent.
James Earl Lawson: The only change there is
to substitute the eight per cent sales tax for the six per cent?
M'r. DUNNING:	And the proviso on the
next page, which is indicated by the black line and which was covered in the resolution.


[Stage Direction]
Section agreed to.
Section 6 agreed to.
On section 7-Licensee to give security.
Charles Avery Dunning: That is an administrative change.


James Lorimer Ilsley: The explanation of this
change is as follows:	Licensed wholesalers
are permitted to purchase and import merchandise without the payment of sales tax, and they account for the tax at the time of the sale. However, several such licensed wholesalers have failed and the guarantors who have supplied security for the payment of the sales tax have claimed that the security given under the former section did not extend to the liquidator or trustee. The result has been that the department has been unable to collect the taxes due on the values as provided under the act. The present section is for the purpose of requiring that the security be extended to cover the operations of the trustee or liquidator, in order to protect the revenues.
The explanation of subsection 3 is this: In view of the increase in the rate of sales tax in 1932 and again at the present time, it is considered that the security of $15,000 is not enough in some cases, and this change is to provide greater security for payment of the tax.


James Earl Lawson: As a result of this amendment will the government secure any greater priority for their tax in any case of bankruptcy or liquidation to which it applies than they already have under the Bankruptcy Act?


James Lorimer Ilsley: No.


James Earl Lawson: You have the same priority, but this provides for security for the tax itself?


James Lorimer Ilsley: Yes.


[Stage Direction]
Section agreed to.
On section 8-Regulations.
James Lorimer Ilsley: This is an administrative
change. There are certain declarations required in connection with refund claims and the like, as well as those required on the returns made by taxpayers. It has been held that the previous authority in the act was not broad enough to cover the different declarations required. This resulted in taxpayers being put to the expense and inconvenience of making declarations before notaries public and commissioners for taking oaths. This amendment is to enable departmental officers to administer such oaths and declarations where possible.
Special War Revenue Act


James Earl Lawson: As a lawyer I suggest to
the minister that there is a danger in that unless he is very careful as to who are authorized to administer such oaths.


[Stage Direction]
Section agreed to.
On section 9-Monthly returns of taxable sales.
James Lorimer Ilsley: This is an administrative
change, but it is very minor. Certain words are being left out because of the enactment of the previous section. They are no longer necessary.


[Stage Direction]
Section agreed to.
On section 10-Procedure.
James Lorimer Ilsley: This is an administrative
change. This section is designed to make it incumbent upon persons who receive assignments of book debts or trade papers, which include sales tax, to pay the amount of such tax to the public revenues. In the past there has .been no authority in the act to collect the tax in such cases, and if the taxpayer were in a precarious financial position or about to go into liquidation the amounts represented by the tax were collected by the person holding the collateral for his own account, and became a non-collectable account as far as the public revenues were xmcemed.


Mr. FACTOR:: Does that include banks
is well ?	.


James Lorimer Ilsley: Yes.


[Stage Direction]
Section agreed to.
On section 11-Additional penalties.
James Lorimer Ilsley: This is also an administrative change. It has been found that in some cases taxpayers were judgment proof and continued operating in business without accounting for the tax for which they were liable, often selling their goods below the prices of their competitors. While penalties have been imposed upon them, such penalties, like the taxes, are uncollectable. This section is designed to impose terms of imprisonment in lieu of the payment of penalties. This is deemed necessary to deal with certain extraordinary cases.


[Stage Direction]
Section agreed to.
On section 12-Officers who may make inquiry.
Mr. ILSLEY':	It occasionally becomes
necessary for inquiries to be made on short notice, and by naming certain officers in the

act as commissioners for the purpose of part I of the Inquiries Act it is considered that time can be saved and possibly moneys recovered which might be lost if the inquiry were delayed.
Section agreed to.
On section 13-Action against officers in the exercise of their duties.
James Lorimer Ilsley: This section is not new in the revenue statutes. It is designed to protect officers in the performance of their duties in connection with the collection of the public revenues, and is merely extending to this act the principle of protection of such officers that is already in the Customs Act and the Excise Act.


[Stage Direction]
Section agreed to.
On section 14-French version corrected.
James Lorimer Ilsley: This is merely a change in the French version.


[Stage Direction]
Section agreed to.
On section 15-Schedule I amended.
Charles Avery Dunning: A ways and means item entirely.


[Stage Direction]
Section agreed to.
On section 16-Schedule II amended.
George Halsey Perley: There is a part at the bottom of page 10 on which we ought to have some explanation. That is not in the ways and means resolution?


Charles Avery Dunning: Oh, yes, absolutely. It is the automobile item. It is new so far as this act is concerned, but the new part inserted is the part carried in committee of ways and means relating to automobiles.


[Stage Direction]
Section agreed to.
On section 17'-Schedule III repealed and reenacted.
Charles Avery Dunning: This is the schedule of exemptions.


George Halsey Perley: This is all following the ways and means resolution?


Charles Avery Dunning: It is a rewriting of all the exemptions, including those provided for in this year's ways and means resolutions, and with no other change.


[Stage Direction]
Section agreed to.

Special War Revenue Act
On section 18-Schedule V repealed and reenacted.
Charles Avery Dunning: Exactly the same explanation.


George Halsey Perley: Has the minister explained the administrative changes?


Charles Avery Dunning: Each one as it came.


[Stage Direction]
Section agreed to.
Sections 19 and 20 agreed to.
On the preamble.
Grote Stirling: Will a consolidation of this special War Revenue Act be printed forthwith?


James Lorimer Ilsley: It is consolidated every year, that is for office use and for the use of members. I hold in my hand the 1934 consolidation, but I think there is a 1935 one. It is not reenacted; we do not put another act through.


Grote Stirling: But it will be a complete consolidation of the Special War Revenue Act as amended?


James Lorimer Ilsley: Yes.


Grote Stirling: It is so inconvenient having the last year's one and having to look up all these amendments. Will the minister see that the members receive a copy?


James Lorimer Ilsley: I certainly shall. I have had the same trouble.


James Earl Lawson: Referring to clause 17, which covers the exemptions, I notice there is nothing to indicate any additions made to the exemptions this year. Am I overlooking them? My recollection is that were were one or two additions to the exemptions.


Charles Avery Dunning: Yes, there were.


James Lorimer Ilsley: In schedule III there are a few changes. They are not black-marked.


James Earl Lawson: Could the minister indicate them by reference to the numbers of paragraphs?


Charles Avery Dunning: The hon. member can get them out of the votes and proceedings.


James Lorimer Ilsley: On page 12 at the end of the third complete paragraph, will be found these words:
Crushed stone or crushed gravel to be used exclusively in the building or maintenance of provincial, county, municipal or township roads.
The word "municipal" was added. Then at the beginning of the last paragraph the words

Liver extract for use exclusively in the treatment of anaemia.
-are added. On page 13, line 5 the words-
Printing paper and printing ink for use exclusively in producing quarterly, bi-monthly, monthly and semi-monthly magazines and weekly literary papers unbound.
-are added. Then, towards the bottom of page 13, just above the title, "Goods enumerated in customs tariff items,'1 these words have been added as an additional paragraph:
Materials, not to include lubricating or fuel oils or plant equipment, consumed in the process of the manufacture or production of taxable goods.
On page 17, in tariff item 695b, there have been added the words beginning "handmade drawings"; that whole paragraph has been added.
Further down on the same page item 696a has been added. And at the top of page 18 the $100 exemption section has been added. Those are the words that have been added.


Hugh Alexander Stewart: Before the committee rises, would the minister be good enough to return to page 7 of the bill, the section in which a penalty is imposed:
And in default of payment of the said penalties, to imprisonment for a term of not less than three months and not more than twelve months.
It says that this is applicable to taxes imposed by parts IV to XIII inclusive. Could the minister tell U3 in a general way what those taxes are?


James Lorimer Ilsley: They are all the excise taxes imposed under the Special War Revenue Act.


Hugh Alexander Stewart: Then it means that a person in default of payment of any excise taxes may be imprisoned?


James Lorimer Ilsley: Yes.


Hugh Alexander Stewart: That is a new penalty, is it not?


James Earl Lawson: It is adopting a new
principle, imprisonment for debt, surely.


Hugh Alexander Stewart: I do not recall that that was discussed.


Charles Avery Dunning: Only in extraordinary cases, of course.


Hugh Alexander Stewart: Are we now going to impose a penalty of a term of imprisonment upon any person who neglects to pay taxes he owes to the Dominion of Canada?


James Lorimer Ilsley: There are other similar sections in the act. For instance, under section 118, everyone who wilfully attempts in any manner to evade or defeat-


George Halsey Perley: Oh, that is quite different-wilful attempts to evade.
Special War Revenue Act


Hugh Alexander Stewart: The section reads:
Every person who, being thereto liable, neglects, omits or refuses to pay any tax imposed by Parts IV to XIII inclusive, of this act, in addition to any other penalty to which be is subject for any such offence, shall be liable on summary conviction, to a penalty of not less than fifty dollars and not exceeding one thousand dollars and to a further penalty equal to double the amount of the tax properly payable, and in default of payment of the said' penalties, to imprisonment for a term of not less than three months and not more than twelve months.
The part that is added is that in default of payment of the penalty, imprisonment is imposed. We did not discuss that matter thoroughly in committee of the whole, if it was discussed at all. It is well to understand what we are doing, namely that any person in default of payment of income tax, in addition to a penalty which may be imposed upon him for non-payment of the tax-
Mr. iLSLEY: No, not income tax.


Hugh Alexander Stewart: I was asking that.


James Lorimer Ilsley: I was referring to the Special War Revenue Act.


Hugh Alexander Stewart: Does it refer to sales tax and excise tax?


James Lorimer Ilsley: Yes.


Hugh Alexander Stewart: Any other taxes? What about the stamp tax?


James Lorimer Ilsley: Yes; I counted twenty-eight of them.


Mr. NEILL:: Is there any precedent for this in other legislation?


James Lorimer Ilsley: After due consideration I am inclined to believe that the provision is severe, and if there is going to be any dispute I shall not press it further.


Charles Avery Dunning: It will be deleted, and the subsequent sections renumbered.


James Lorimer Ilsley: May I point out that the deletion will not do away with the possibility of imprisonment, because by the section as it stands a defaulting taxpayer is subject to penalty on summary conviction of a sum not less than $50 and not exceeding $1,000. There is a provision in the criminal code whereby imprisonment may be imposed to enforce a penalty.


Alan Webster Neill: That is under the criminal code.


Hugh Alexander Stewart: And a different matter altogether.


James Lorimer Ilsley: If any hon. member thinks imprisonment cannot be imposed upon a person refusing to pay a fine imposed by the preceding part of the section, he is under a misapprehension.


Alan Webster Neill: Is not the minister referring to an offence under the criminal code?


James Lorimer Ilsley: They would be prosecutions under part XV of the criminal code.


James Earl Lawson: How could there be prosecutions under the criminal code for breach of the-Special War Revenue Act?


James Lorimer Ilsley: The whole procedure is
under the code. If I am not greatly mistaken, an information is laid. It is all set out under part XV.


James Earl Lawson: The procedure as to how one proceeds in order to charge a subject before a court is set out in the criminal code, but one could not be said to be prosecuted for an offence under the code when, as a matter of fact, he is 'being tried to ascertain whether or not he is guilty of a breach of the Special War Revenue Act, or some provision of it.


Hugh Alexander Stewart: It seems to me that in order to render a person liable to imprisonment there would have to be a special prosecution under a provision of the criminal code. In the present instance it would seem inevitably to follow that if there is a default and a conviction the magistrate would be bound to impose imprisonment.


James Lorimer Ilsley: I move:
That section 11 of the bill be deleted and the subsequent sections renumbered.


[Stage Direction]
Motion agreed to.
George Halsey Perley: Section 12 seems to involve an administrative change. Have all other administrative changes been explained and discussed?


Charles Avery Dunning: Yes.


James Earl Lawson: Section 11 having been struck out, if the ministers of the crown wish to be consistent they must observe that that portion of section 2 which is numbered 62 provides a penalty more drastic than the one which has been struck out. Under section 11 imprisonment became applicable only when a person convicted refused to pay the fine, but under the section I have indicated, subsection 3, a person is liable on summary conviction to a penalty not exceeding $500 and not less than $50, or to imprisonment

Special War Revenue Act
for any term not exceeding six months and not less than one month, or to both fine and imprisonment. The additional words are underlined at the top of page 4 of the bill.


James Lorimer Ilsley: The penalty in this instance is for failure to maintain books and records. Before the change was made there was a penalty for refusing to produce books, but no penalty for refusing to keep them, which was ridiculous and inconsistent. Subsection 3 is brought in line with subsection 2.


James Earl Lawson: If the minister gives consideration to the matter I am sure he will agree there is a difference. If a man is in business and an inspector from the government comes along and says, "You owe the government money; you have books, and we want those books to find out how much you owe," and the man replies, "I refuse to give them to you," he has committed a wilful misdemeanour. On the other hand, I have known men in this country who did quite a large amount of business without actually keeping books, and they did not keep books in some cases not because of any ulterior motive or purpose. It is the government's responsibility if they want to make this an offence punishable by imprisonment, but I can only say that it strikes me as being a very unusual attitude for a Liberal government, judging by what I have heard of them in the past.


Mr. JACOBS:: Do you expect them to be any better than your government?


Frederick George Sanderson: Shall the preamble
carry?


James Earl Lawson: You have not carried section 20, Mr. Chairman.


Frederick George Sanderson: Yes.


Charles Avery Dunning: Yes, that was carried.


James Earl Lawson: I can only say this to the minister, that if he takes that attitude, then the next time that a purely administrative bill comes before us we shall see that it does not carry if we have to stay on our feet all night until we get the information we require. Someone called "carried" to section 20. The chairman may have said "carried," and1-


Frederick George Sanderson: The chairman did say "carried," and no member of the committee objected.


James Earl Lawson: Then I can only request you, Mr. Chairman, not to go so rapidly, because I had in mind something I wanted to ask on section 20.


Charles Avery Dunning: I was not desiring to stop discussion at all; I was simply pointing out that to revert to a section which was carried some time ago would be out of order.


James Earl Lawson: It is out of order, I quite agree.


Charles Avery Dunning: Section 20, which is really a formal section of the bill was called "carried," but if it is desired to hold it we 9hall do so.


James Earl Lawson: I want to ask for just one piece of information.


Charles Avery Dunning: By all means.


James Earl Lawson: Section 20 provides that section 4 of this bill shall be deemed to have come into force on the first dlay of June, 1936. The other sections of the bill, I assume, come into effect either on the date the bill receives royal assent or on the date the Finance minister read the budget.


Charles Avery Dunning: The previous section deals with that.


James Earl Lawson: Why is section 4 different from the others?


James Lorimer Ilsley: It deals with two classes of persons, commercial artists and packers of olives, and it was not deemed just to make the provisions with respect to them retroactive.


James Earl Lawson: Is there some reason for that?


Frederick George Sanderson: Shall the preamble carry?


George Halsey Perley: We are trying to make headway with the bill, and you must give us a little leeway, Mr. Chairman, or we shall discuss it in some form or another. Regarding the penalty for failure to maintain records, which is dealt with on page 4 of the bill, I. listened to the explanation of the minister, and what I dislike about this provision is that the man would be liable to imprisonment although he had not wilfully done anything. Subsection 3 of section 62, at the top of page 4 provides that if any person liable to maintain records and books of account fails to maintain them, the minister may assess the tax payable by such person and the tax so assessed shall be deemed to be due and payable forthwith; then, further, if the man does not pay the tax he has to go to gaol. I think something should be inserted there to show that the man has wilfully done something.


James Lorimer Ilsley: The gaol sentence is not for refusing to pay his tax.
Special War Revenue Act


George Halsey Perley: That is the way I read the subsection.


James Lorimer Ilsley: I respectfully differ from the hon. gentleman. It says:
If any person liable to maintain records and books of account for the purposes of this part has, in the opinion of the minister, failed to maintain adequate records and books of account, the minister may assess the tax payable by such person under this part, and the taxes so assessed shall be deemed to be due and payable forthwith. Such person shall also be liable on summary conviction to a penalty not exceeding five hundred dollars and not less than fifty dollars-


George Halsey Perley: A summary conviction for what?


James Lorimer Ilsley: For not maintaining the
records and books which he was liable to maintain.


George Halsey Perley: Quite so. I know plenty of people who carry on quite a lot of business and never keep any books. It would take a good while to bring this new rule into force, and does the minister think that a man who offends in ignorance, not wilfully, should not only be assessed by the minister but also be liable to imprisonment? I do not think he does.


James Earl Lawson: I would point out that
the subsection provides:
If any person liable to maintain records and books of account for the purposes of this part has, in the opinion of the minister-
Then here is the gravamen-has what?
-failed to maintain adequate records and books of account.
If he has failed' to do so in the opinion of the minister, the minister may assess the tax payable. So, according to this section, the Minister of National Revenue determines whether the man is guilty of the offence of not keeping adequate books, and if the minister, not the courts, decides against him, the man becomes guilty of an offence, and of an offence which is punishable by imprisonment. I only say that if the government wants to pass that kind of legislation, it is on their doorstep.


James Lorimer Ilsley: The language objected to by the hon. gentleman is not new.


James Earl Lawson: The prison penalty is new.


James Lorimer Ilsley: That is new.


James Earl Lawson: That is the whole gravamen.
[Mr. Ilsley.l


James Lorimer Ilsley: There must be some penalty imposed upon persons who will not keep books they are required to keep.


George Halsey Perley: May I suggest to the minister that the present law as it stands is quite sufficient in its penalties, because the minister has power to assess the tax payable, and the minister can assess it as he thinks best.


James Lorimer Ilsley: But if there are no books, he has nothing to go on. That is the very trouble. How can our auditor tell how much is due if he goes to one of these establishments and there are no books? There may be thousands of dollars due. Without books we do not know, and the man can snap his fingers at the department. We have no sanctions.


James Earl Lawson: Oh, no, he cannot, because the Minister of National Revenue may then impose an arbitrary assessment, and under the law the taxpayer becomes liable to pay that arbitrary assessment no matter how unreasonable it may be, unless he oan produce books and satisfy the minister that his arbitrary assessment should be reduced. That is the v-hole idea of arbitrary assessments in income tax and everything else with which the minister has to deal.


George Halsey Perley: I suggest that the minister might drop this last provision the same as he did in the other section, and let the bill go through in that way.


James Lorimer Ilsley: I cannot agree to that. It is unreasonable to expect it. Just think of the position my hon. friends are in. They suggest that we make an arbitrary assessment, which might be a most unjust assessment, which is the most undesirable thing that can be suggested. There is no power, under this section, to make an arbitrary assessment. The minister may assess the taxes that are due, but if he has nothing to go on, what can he do?
Mr. LAWSON; All his predecessors in office have made assessments. As a matter of fact, the routine is that the minister never sees or hears about them because these income tax assessments are made by the income tax commissioner and go out under the minister's signature, and if the taxpayer does not like it he has the right of appeal to the minister. But the minister seldom hears of these cases until they come before him in the form of an appeal. Always the minister has had the

'Questions
power to make an assessment. I put in the word "arbitrary" to indicate that it might be an assessment not based upon any particular calculation. By this act not only can the minister make an assessment where, in his opinion, he thinks adequate records and books have not been kept, but he can go further and take action whereby the man can be put into gaol. Surely the exercise of that discretion should be in the courts, and not in the minister.


Frederick George Sanderson: Shall the preamble carry?


George Halsey Perley: Has the minister given this provision his personal consideration? Is he prepared to insist himself that this shall go through or has this just come down to him from the officers of the department?


James Lorimer Ilsley: I have given it some consideration; I have given it further consideration to-night, listening to the discussion, and certainly I have not been convinced that the provision should be withdrawn. I cannot agree to that. I agreed, however, to withdraw the other one.
Preamble stands.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned without question put, pursuant to standing order.
Wednesday, June 3, 1936