1937-03-12

[Stage Direction]
On the order for motions:
Hon. ERNEST LAPOINTE (Acting Prime Minister):: Mr. Speaker, with the consent of the house I should like to move a motion which appears in to-day's votes and proceedings providing for sittings of the house on Wednesday evenings. I understand the whips have conferred about this matter, but if there should be any objection I shall not press the motion.
Right Hon, R. B. BENNETT (Leader of the Opposition) :	I think perhaps if the
motion was made operative as of Wednesday the twenty-fourth instead of Wednesday the seventeenth, it would be all right, I happen to know that engagements have been made for Wednesday the seventeenth which it would be difficult to break.


Ernest Lapointe: Then I move:
That on Wednesday the 24th of March next and all subsequent Wednesdays until the end of the session the sittings shall in every respect be under the same rules provided for other days.
Motion agreed: to.



CRIMINAL CODE


[Stage Direction]
Mr. J. S. WOODSWORTH (Winnipeg North Centre) moved for leave to introduce Bill No. 62, to amend the criminal code.

Grain Marketing
Some hon. MEMBERS:: Explain.


Mr. WOODSWORTH:: The purpose of this bill is to prevent employers from refusing to employ, or from dismissing employees, or conspiring with others therefor for the reason that they are members of a trade union. As it is lawful for workmen or employees to form themselves into trade unions and to bargain collectively, as a matter of public policy it should be unlawful for employers to seek, by overt acts or intimidation, threats or conspiracy, to prevent them from belonging to such trade unions.


Ernest Lapointe: Increasing the number of crimes.
Motion agreed to and bill read the first time.



PRIVATE BILLS


[Stage Direction]
Bill No. 59, for the relief of Eva Schiller Lightstone.-Mr. Heaps.
Bill No. 60, for the relief of Ruth Jessica Kimpton Shiells-Mr. Jacobs.
Bill No. 61, for the relief of Grace Ellen Doris Newman.-Mr. Lennard.


[Stage Direction]
Hon. CHARLES A. DUNNING (Minister
of Finance) moved that the house go into committee at the next sitting to consider the following proposed resolution:
That it is expedient to bring in a measure to authorize the provision of moneys to meet expenditures made and indebtedness incurred by the Canadian National Railways Company during the calendar year 1937, to provide for the refunding of certain maturing financial obligations and to authorize the guarantee of securities to be issued by the said company to an aggregate amount of $30,721,709.
He said: His Excellency the Governor General, having been made acquainted with the subject matter of this resolution, recommends it to the favourable consideration of the house.
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mr. H. C. GREEN (Vancouver South):: Mr. Speaker, yesterday, in answer to a question I had placed on the order paper, the Minister of Transport (Mr. Howe) disclosed that the National Harbours Board
has ceased to operate the fire-boat "Pluvius" in Vancouver harbour. This means that the water-front is now without fire protection except from the shore, and a fire starting on the water-front might lead to a great disaster. What steps are being taken by the National Harbours Board to provide fire-boat protection for the Vancouver water-front? I understand that the minister, whom I saw last night, is out of the city to-day, but I would ask that an answer be given as quickly as possible.


Ernest Lapointe: I will draw the attention of the Minister of Transport to the question of the hon. member.



GRAIN MARKETING


[Stage Direction]
On the orders of the day:
Hon. J. G. GARDINER (Minister of Agriculture) :: Before the orders of the day are proceeded with, I wish to take just a moment to deal with the telegram which was read to the house yesterday by the leader of the opposition (Mr. Bennett). The telegram was as follows:
Newspapers report Hon. Gardiner's statement in Commons in defence of wheat board selling policy wherein he said McFarland estimated crop four hundred millions on June 24. Please insist on my behalf that Mr. Gardiner gives direct authority for that statement. I never informed any newspaper man of my opinion of prospective	crop	at that	or any
other time and no one had authority to make any statement for me. It was obvious before the end of June that all hope for a crop had been destroyed.
I had on my desk the other evening while I was speaking the authority for the statement I made, but owing to the fact that we have a forty-minute rule I thought I could state it in a shorter	time than it	wouldtake to read it from	the	authority,	and Istated the fact as it	was	reported	in the
press on June 24 last. I have now before me the same authority which I had the other night. It is a Canadian Press report which appeared in the Montreal Gazette, and in that report this is stated:
Lethbridge, -Alberta, June 24.-John T. McFarland, of Calgary, former head of the Dominion Wheat Board, expects a good wheat crop this year.
Then in quotation marks:
"As far as one could forecast at the moment it looks like a 400,000,000 bushel crop," he said here.
Grain Marketing

I brought that item with me because in June last, when I was going west at the end of the session, I had read in a western paper the same statement with a little added to it. In the Manitoba Free Press of June 24, 1936, is this article:
"J. McFarland sets new wheat crop at 400,000,000 bushels."
That is the heading.
Lethbridge, Alberta, June 24.-A 400,000,000 bushel wheat crop for Canada this year was the prediction of John I. McFarland, of Calgary, former head of the federal wheat board, who visited here following an inspection of southern Alberta grain lands.
Then in quotation marks:
"As far as one could forecast at the moment," said Mr. McFarland, "it looks like a 400,000,000 bushel crop."
After the reading of the telegram yesterday I had other papers examined, and I find that this statement went right across Canada. More particularly, it appeared on June 24 in the Calgary Herald, which is the newspaper of the city in which Mr. McFarland lives. I quote:
Lethbridge, June 24.-A 400,000,000 bushel wheat crop for Canada this year was the prediction of John I. McFarland, of Calgary, former head of the federal wheat board, who visited here following an inspection of southern Alberta grain lands.
"As far as one could forecast at the moment." said Mr. McFarland, "it looks like a 400,000,000 bushel crop."
Then I had examined yesterday the records of the paper at Lethbridge, where Mr. McFarland was assumed to have made the statement, and I find his picture on the front page alongside of the article, which reads like this:
McFarland is impressed with south Alberta crops.
That is the heading. Next:
Sees chance for Canada harvesting 400,000,000 bushels this year.
Optimistic over western crop conditions, John I. McFarland of Calgary, well known Canadian grain man and former manager of the central selling agency for Canadian wheat, was a weekend visitor in Lethbridge and district. Mr. McFarland has important business interests in this city and expressed his gratification at the good showing these are making.
Mr. McFarland said he was impressed with the evidence of good times in Lethbridge and surrounding farm areas. "Lethbridge is one of the most thriving cities in western Canada," he said.
With A. G. Baalim and others, Mr. McFarland saw southern Alberta's fast growing wheat and beet crop and he was delighted with what he saw. Speaking of the Canadian wheat crop, Mr. McFarland said as far as one could forecast at the moment it looks like a 400.000,000 bushel crop. He did not comment on wheat prices.
I may add that when I was in the old country last July I was confronted with this

statement when I was discussing grain matters on the floor of the Baltic exchange, on the floor of the corn exchange in Liverpool and in the offices of grain men in different parts of London, and I was interviewed by newspapers with regard to the condition of the crop. I find that there appeared in the Ottawa Citizen a Canadian Press report sent from London under date of July 28, in which this statement appears:
The Daily Mail also quotes the ministry-
That is the British ministry.
-as saying: "It seems at present that Canada, the source of our main supply, likely will have a good crop with conditions there mainly favourable."
Nevertheless, Canadian Minister of Agriculture Gardiner is reported by the Daily Express as saying: "The latest information is not cheerful. Drought has reduced the crop nearly fifty per cent."
These are my authorities, Mr. Speaker, for the statement that I made. I wish to add that, if Mr. McFarland did not make the statement, in view of the fact that it appeared all across this country and also appeared in Great Britain, where our wheat is being sold, he should have denied it about the twenty-fifth of June last and not this year after the statement was again repeated in this house. To my knowledge it has been quoted at least a score of times across Canada, and never before have I heard it denied. My own opinion is that statements of that kind at that time had more influence upon any keeping down of the price that might have been brought about during July than any sales of wheat that were made in that month.


Right Hon. R. B. BENNETT (Leader of the Opposition):: Mr. Speaker, I placed upon Hansard yesterday a telegram which I had received from Mr. McFarland, and I desire to express to the minister my thanks for the full and ample way in which he has dealt with that telegram and for the reasons he has given for the statement he made. The fact that it was issued by the Canadian Press would in itself ensure that it would have publicity wherever the connections of the Canadian Press went. Personally I know nothing of it. Until to-day I had not heard the statement to which reference has been made, and I have had no communication beyond the telegram itself. But I felt that in fairness to one who had served this country and was a friend of mine I should put his denial upon the record. The answer that has been given to the inquiry made by Mr. McFarland is a very full one. The only criticism I have to offer is that the privileges of this parliament were utilized to make deductions which I think are hardly warranted under the rules.

Sockeye Salmon Fisheries


Mr. POULIOT:: Will the leader of the opposition (Mr. Bennett) be good enough to table the original of the McFarland telegram which he quoted yesterday if it has not already been destroyed?



IMPERIAL CONFERENCE


[Stage Direction]
On the orders of the day:
Mr. THOMAS VIEN (Outremont):: I wish to call the attention of the government to articles that appeared in the press last night with reference to the agenda of the forthcoming imperial conference, and also to the fact that this agenda was published in London and in the dominion capitals at the same time. I note in the same article that empire defence is foremost on the agenda. I would ask the acting leader of the house (Mr. Lapointe) whether it is the intention of the government to table this agenda for the information of members.


Richard Bedford Bennett: I believe the Prime Minister said he would.
Hon. ERNEST LAPOINTE (Minister of Justice) The hon. member kindly sent me notice of his intention to bring up this question to-day. The announcement of the agenda in the House of Commons in London yesterday was appropriate, because the conference is meeting in London on the invitation of the government of the United Kingdom. This announcement was made at 3.45 p.m. London time, which is 10.45 p.m. here, and as the press was to have it at the same time that it was tabled in the House of Commons it was arranged that at 10.45 the agenda should be communicated to the press in the various dominions. I notice that on other occasions the agenda has not been tabled in the house, but in accordance with my hon. friend's request I have had copies prepared and am now laying them on the table of the house.
With regard to the matter of defence, I see that on the agenda of the imperial conference of 1926 the very same words appeared in an item of the conference-"foreign policy and defence." The same is true of the conference of 1930. The placing as usual on the agenda of this subject of foreign affairs and defence means that there will be ddscusison and consideration and that information will be given regarding the matter. I need not remind the house, however, that the parliament of Canada is the only authority on matters of defence when they concern this country, and that any recommendation that may be made by the imperial conference on the subject will be of
no effect unless and until submitted to and approved by the parliament of Canada.
* Right Hon. R. B. BENNETT (Leader of the Opposition): I think the Minister of Justice (Mr. Lapointe) will recall that I asked the Prime Minister (Mr. Mackenzie King) a question about the production of the agenda before this house should rise, and I understood him to say that he would look into the matter. The truth is that on some occasions the agenda has not been completed at the time of prorogation and therefore has not been laid on the table. I think the government is to be commended for having laid the agenda before the house, thus enabling the house as a whole to have an understanding of the problems with which the governments of the dominions and the United Kingdom will have to deal. For myself and those associated with me I thank the minister for having made that possible, and probably it might be desirable, as my hon. friend from St. Lawrence-St. George (Mr. Ca'han) suggests, to have it incorporated in the votes and proceedings of to-day so that it may be available to all.



SOCKEYE SALMON FISHERIES


[Stage Direction]
On the orders of the day:
Mr. A. W. NEILL (Comox-AIberni):: The Minister of Justice (Mr. Lapointe) was kind enough to say that he would make a statement with respect to the Fraser river Sockeye salmon treaty.


Ernest Lapointe: Yes. The question raised by my hon. friend the other day relates to a convention which was signed by the United States and Canada in 1930 with respect to the sockeye salmon fisheries in British Columbia in international waters. This convention was approved by the parliament of Canada in 1930. The senate of the United States consented to the ratification of the convention only in June, 1936, adding certain conditions to the ratification.


Richard Bedford Bennett: Reservations.


Ernest Lapointe: Reservations; they call them understandings. As the Prime Minister (Mr. Mackenzie King) said the other day in answer to my hon. friend, it was not considered here that these reservations were of sufficient importance to deter Canada from acceding to the treaty as it had been approved by the house in 1930,
Sockeye Salmon Fisheries

but were merely matters of administration, interpretation of the convention and so forth. I am pleased to say that the ratification has not yet taken place, and as my hon. friend is of the opinion that these reservations are important, and as my right hon. friend the leader of the opposition (Mr. Bennett), has agreed with the view taken by the hon. member for Comox-Alberni (Mr. Neill), I have given instructions that a resolution be placed on the order paper for the approval by the house of these reservations before ratification takes place.


Richard Bedford Bennett: I suppose it is within the memory of some hon. members of the house that the treaty was originally negotiated some time prior to 1930 and certain objections were taken which, while the then government thought they were not very sound, enabled them to negotiate a new treaty. A new treaty was negotiated in 1829-1930 and it was the late government-the government of the now Prime Minister-that asked this house to ratify the treaty in 1930 before the general elections. I then suggested that when 11,000,000 people are negotiating with 125,000,000 or 130,000,00 people, it is desirable to have them ratify in their senate before we do so; for that relieves us of a goodi deal of difficulty. For five years we endeavoured to have the treaty ratified by the United States senate, and the president did in fact submit it on more than one occasion. The result is that now we have the ratification of three of the United States reservations-the United States used to call them reservations, but to-day in this treaty they are spoken of as understandings. It will be recalled that when the treaty of Versailles was before the United States senate they spoke of the conditions which they imposed upon it as reservations, and numbered them. For my part I cannot see very much difference between the reservations, now called understandings, imposed upon the sockeye salmon treaty and those of a similar character in connection with the treaty of Versailles. I desire again to thank the government for having placed upon the order paper a resolution looking to the ratification of these reservations or conditons or understandings; for frankly, as I read the original treaty and the understandings or reservations I think they cannot be read together into an intelligible whole, that one of the reservations negatives a provision of the treaty. However, it may be that after listening to the lucid explanations of the minister and the government I shall be able to revise that opinion. But it is because of

the difficulty I have in reconciling the understandings or reservations with the terms of the original treaty that I was anxious that the matter should not be disposed of by ratification in a formal sense until such time as parliament had had an opportunity to deal with it. I think the government have taken the eminently proper course in permitting the House of Commons, which , originally gave its approval to the treaty, to consider now whether it is disposed to give approval to these understandings or reservations.



IMPERIAL DEFENCE COMMITTEE

[Stage Direction]
On the orders of the day:
Mr. CAMERON R. McINTOSH (North Battleford): Before the orders of the day are proceeded with, Mr. Speaker, I should like to direct a question to the acting leader of of the government (Mr. Lapointe). The question is based upon a Canadian Press dispatch appearing upon page 10 of the Montreal Gazette, dated March 12, 1937, and reporting a debate in the parliament of the United Kingdom that occurred on March 11. The report states:
Lord Stanley, parliamentary secretary for the admiralty, said the dominions were being kept in the closest touch, through their representatives at meetings of the committee of imperial defence.
May I ask the acting leader of the government what statement he has to make by way of reply to that report?
Ernest Lapointe: Mr. Speaker, Canada is not a member of that committee on imperial defence and does not sit on it. I presume Lord Stanley had reference to New Zealand and Australia, which I understand take part in the proceedings of the committee.



THE BUDGET


[Stage Direction]
On the order:
Resuming debate on the motion of the Minister of Finance that Mr. Speaker do now leave the chair for the house to resolve itself into committee of ways of means (subject to the instruction given by this house on February 25. 1937).
Richard Bedford Bennett: Before this order is proceeded with I have to make a few observations, lest there be any misunderstanding in connection with the matter. It will be recalled that, in an endeavour to expedite the business of the house, without comment or discussion a reso-

Canada-United Kingdom Trade Agreement
lution was moved by the Minister of Finance (Mr. Dunning) on February 25, 1937, as follows:
That it be an instruction to the committee of ways and means that they have power to consider the terms of the trade agreement entered into on the 23rd day of February, 1937, between the government of Canada and the government of the United Kingdom together with the modifications in the customs tariff therein mentioned and to report to this house on the whole agreement prior to the introduction of a bill respecting the said agreement.
This resolution was introduced into the house on the authority of a notice of motion given by the Prime Minister (Mr. Mackenzie King) on February 23, the day on which the treaty was executed. It was adopted without question or discussion, with the view that we were doing something to expedite the business of the house. In other words, if hon. members are interested in comparing this with what took place in connection with the United States agreement last year they will find that if we proceed as contemplated we shall have saved a great deal of discussion-in my judgment futile discussion-because it is not the manner in which we have discussed trade agreements with other countries. I notice for instance that on February 13 of last year, on the motion of the Prime Minister, we set up the committee of ways and means, and then on February 21 the Prime Minister submitted a statement of the tariff changes resulting from the Canada-United States trade agreement signed at Washington November 15, 1935. That was followed by a notice to this effect:
Resolved, that it is expedient that parliament do approve of the trade agreement entered into at Washington on the 15th day of November, 1935, between His Majesty's government in the Dominion of Canada and the government of the United States of America, and that this house do approve of the same, subject to the legislation required in order to give effect to the provisions thereof.
This resolution was moved by the Prime Minister, seconded by the Minister of Finance, on February 25 of last year. The debate proceeded for a long time-it is reported again on March 6, for instance-and we have a further report of it; finally the resolution is adopted and a bill framed upon it, as will be found in Hansard of March 19, indicating that the whole subject matter was then placed before the house, including the schedules and the terms of the articles themselves, which constituted the agreement. That was discussed in committee as I say for some time until finally the resolution was passed and a bill framed upon a further resolution providing for the ratification of the agreement and the introduction of the bill. The house then divided upon
the resolution as such and a division was taken upon the acceptance or rejection of it.
The other day I spoke to the clerk of the house with respect to the terms of the resolution, because there was nothing on the order paper that indicated that this instruction had been given. Thereupon I noticed the next day in the order paper we had these words:
. . . subject to the instruction given by this house on February 25, 1937.
If, for instance, by voting against the resolution it is suggested that one votes against the agreement between the United Kingdom and Canada, obviously that would be a highly improper thing. I propose to vote for the agreement and not against it, as I indicated the other day. Those associated with me have criticisms to offer with respect to some of the details, but as far as the agreement is concerned we propose to follow the course which we followed in 1932 and support the agreement. That is the reason I put the parallel paragraphs upon the record.
I am sure the government would not endeavour, however innocently, to deceive those of us who sit to the left of the Speaker, but the effect might be-and I have heard it whispered about that it was intended it should be-because of the addition of these words, " subject to the instruction given by this house," that by voting against the budget we vote against the agreement. It is perfectly clear that that must be cleared up, or we cannot vote at all. We are not, in an effort to expedite the business of the house, going to be put in the impossible position of its being said that in voting against the budget we have-voted against this agreement. I cannot suppose that any such thought was in the mind of the Minister of Finance. I think he was good enough to thank us for having helped him to expedite the business.
One of two things must now be considered. One would be that the vote on the agreement be deferred until such time as the motion is made by the government for ratification. As far as my present knowledge goes there is but one member of the house who will vote against it; there will therefore be no recorded vote. Or, secondly, the motion as it now stands could be taken as carried without division, and then on the next motion made by the Minister of Finance, that the Speaker do now leave the chair and the house resolve itself into committee of ways and means, we can take the vote against the budget. That is one way to deal with it. I mention this because of what is,
I trust, merely an idle rumour, that there was in the minds of hon. members opposite the thought that they were placing us in an embarrassing position.
1724	COMMONS
Canada-United Kingdom Trade Agreement


Ernest Lapointe: Oh no; my right hon. friend is wrong.


Richard Bedford Bennett: Well, at times the urbanity of the Minister of Justice embarrasses me. At any rate, Mr. Speaker, I thought it my duty to bring this matter to the attention of the house at once so that there should be no possible opportunity for misunderstanding in connection with it.
Hon. CHARLES A. DUNNING (Minister of Finance): I can assure my right hon. friend at once that no thought of trickery was intended-


Richard Bedford Bennett: I did not use the word trickery.


Mr. DUNNING:: The sole object was to endeavour to expedite consideration of the trade agreement. I spoke to my right hon. friend before determining to make the Canada-United Kingdom trade agreement a part of the budget itself, and he was kind enough subsequently, to agree to facilitate the manner of discussion. The question arises very largely because of the addition of those words to the resolution now before the house. In that connection I am bound to say that the government was not consulted in regard to their being added. I did not know how they came to be added. If they were deleted, quite obviously it would be the ordinary resolution for the Speaker to leave the chair for the house to go into committee of ways and means, and the point therefore would not arise.
As far as the government is concerned of course it is presenting the budget as a whole and in this motion now under discussion is asking that the house, by approving the motion that the Speaker leave the chair and the house resolve itself into committee of ways and means, approve the budget. That never means that every member so voting approves of everything in the budget; that is quite clear. Individual members of the house on both sides, I am quite sure, will take full advantage of the liberty which is theirs in committee of ways and means to criticize individual proposals in the budget, each of which will be dealt with subsequently in the appropriate manner. That is to say, there must be a bill founded upon the resolutions of the committee of ways and means with respect to each separate matter dealt with in the budget, under the various statutes, there will have to be a bill to approve specifically the trade agreement-


Richard Bedford Bennett: Quite so.


Charles Avery Dunning: -and I presume, though I would not like to be absolutely certain, that there will not be a motion of ratification, although it occurs to me that the second reading of a bill approving of a treaty or agreement is itself a motion for ratification.


Richard Bedford Bennett: Quite so.


Charles Avery Dunning: That might be the occasion of recording the approval or disapproval of the members of the house with regard to the principles of the agreement as a separate part of the budget. In the same manner amendments are made to the Special War Revenue Act, to the customs tariff and other matters contained in the budget and dealt with by separate bills. It has happened in my experience, and I am sure in the experience of my right hon. friend, that members have voted for the budget but against the second reading of certain individual bills founded upon the budget resolutions. That, I take it, can occur on this occasion, but in asking that the discussion be facilitated there was no thought whatever of putting anyone in the house in an embarrassing position in relation to the agreement.


Richard Bedford Bennett: With your permission, Mr. Speaker, I should like to make the observation that the terms of the motion that was agreed upon are very important:
On motion of Mr. Dunning, it was resolved that it be an instruction to the committee of ways and means that they have power to consider the terms of the trade agreement entered into on the 23rd day of February, 1937, between the government of Canada and the government of the United Kingdom together with the modifications in the customs tariff therein mentioned and to report to this house on the whole agreement prior to the introduction of a bill respecting the said agreement.
That involves three things: (1) That the agreement is considered by the committee of ways and means; (2) that a report is made to the house, and (3) that a bill is founded upon it. In fairness to the clerk at the table I should say that I spoke to him at the table pointing out that there was nothing on the record that indicated that this was to be dealt with, and next day I noticed that these words were added. In view of the statement made by the minister I think it would simplify matters if, with the consent of the house, the words were deleted and the matter considered as having been on the order paper continuously, that the instruction had been unanimously agreed upon and given to the committee of ways and means.


Charles Avery Dunning: Agreed.

The Budget-Mr. Clark (Sunbury)


Richard Bedford Bennett: Then as I understand it, Mr. Speaker, the clerk is to eliminate those words from the motion as it now appears, with the consent of the house.


Mr. SPEAKER:: Yes.


[Stage Direction]
The house resumed from Thursday, March 11, consideration of the motion of Hon. Charles A. Dunning (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means.
Mr. W. G. CLARK (York-Sunbury):: Mr. Speaker, at adjournment last evening I was referring to the Farmers' Creditors Arrangement Act of 1934, which, as far New Brunswick is concerned, is an iniquitous law. The hon. member for Royal (Mr. Brooks) tried to make it appear that I was taking up this matter because of personal losses. It is true that my company has lost thousands of dollars through this act, but that would not trouble me if any good resulted.. I am speaking, however, for many tradesmen and a host of reliable farmers.
One cannot dissociate oneself from experience, and my experience has been that in many of these cases advantage has been taken of the act to aid dishonesty and increase unreliability. I mentioned that in my opinion the government should not make loans. Under the Farmers' Creditors Arrangement Act debtors may get clear without a cent of cost, and when it is so easy at first why should they bother about their debts thereafter? Here is a sample proposal made under this act:
T propose to retire my obligations both secured and unsecured by apportioning amongst my creditors the annual sum of $200 for a period of ten years with interest on interestbearing claims at the rate of five per centum per annum.
Included in this farmer's statement of debts amounting to some $5,000 is an amount of SI ,895 owing the Canadian Farm Loan Board, which I take it means the government of this dominion. This man proposes to pay only $200 per year on his debts for the next ten years. Here is another farmer, with liabilities of some $13,000. He says:
I propose to ask for an extension of time of fpur years without payments on account of my indebtedness, in order that I may have an opportunity of improving my land and effecting repairs to the buildings on the farm.
At the expiration of the four-year period I propose to convene a meeting of my creditors to consider my situation at that time.
I have many other similar proposals with which I need not trouble the house at present. I only wish to point out that this legislation has made it too easy for some people to get clear of paying their debts, and has deprived creditors of their security.
With reference to unemployment I desire to say only this:	Unemployment can be cured
by the adoption of policies that will restore true value to farm lands and to the products of our fisheries. Then with the return of complete confidence on the part of all classes in our country there will be active business, prosperity, good wages, and contentment for all.


Mrs. MARTHA LOUISE BLACK (Yukon):: Mr. Speaker, the Minister of Finance (Mr. Dunning) occupies a most difficult position. He must provide the actual moneys to be paid out for pressing needs, and he must look to the future in order to provide the staggering amount required to pay the interest on those moneys. No matter whether we agree with his policies or not, we all realize that he lives in an atmosphere of horrible anxiety, and is weighed down by enormous responsibility. I believe that all hon. members, irrespective of party lines, will acknowledge that under the circumstances the minister has done the very best possible.
Returning to my constituency last summer I was anxious to find out how some of my Liberal supporters would take the fact that I voted against the trade agreement with the United States. I spoke to one of our very dear friends, a hide-bound Liberal, if there is such an article, who had supported me because of a great favour the previous member for the Yukon had done him. I said, "What did you think of the stand I took?" His reply was, "Oh, I don't know; it all works out the same way in the end. Dunning put on an eight per cent sales tax, and after all what you loses on the swings you gains on the roundabouts."
The isolation of the Yukon will make whatever remarks I have quite different from any of the speeches of other hon. members. We are separated by a land belonging to another nation. We are separated from Canada by seas, mountains and rivers. Since I have sat in the gallery and in the house, in those years from 1921 to the present, I have heard hon. members one after another cast little slurs on the Yukon, with its small population, which they said was always coming to the government asking for money. It was only a few days ago that the hon. member for Pictou (Mr. McCulloch) asked what the government of the Yukon had cost in 1935 and 1936 in-
The Budget-Mrs. Black

elusive. He also asked for information about the population. The answer he received was that the moneys for all expenditures by the federal government during 1935 and 1936 inclusive amounted to $568,081.54. The population of the Yukon on June 1, 193.1, according to the last census, was 4.230. It is probably the same at the present time.
I ask the government and hon. members if it would not be just as fair to ask for information as to what value the Yukon has been to Canada. From 1898 to 1936 inclusive the Yukon has produced in gold alone $193,578,489. From 1925 to 1936 the production of silver in the Yukon territory has amounted to $11,195,090; there is no record of silver production prior to that time. I believe a moderate estimate would put previous production at $1,000,000. The production of lead from 1925 to 1936 amounted to $2,312,772, and prior to that time amounted to possibly $125,000. Customs duties collected on imports entered for consumption in the Yukon territory, from 1898 to 1936 inclusive, totalled $7,262,994.41. Then we must not forget for one moment the great market the Yukon territory has afforded Canadian goods. Millions of dollars have come to Canada from the Yukon every year. The Canadian packers, wholesale firms and machine manufacturers have benefited. From 1898 to 1936 the expenditures of the Department of the Interior in the Yukon territory amounted to $11,489,883. Other expenditures made by the government for the Yukon territory include those for public works, post offices, justice, Indians, telegraph lines-there has always been injustice in connection with that item, because much of the cost was charged to the Yukon when it should have been charged to British Columbia-miscellaneous expenses and mounted police. From 1898 to 1936 expenditures on these items totalled $20,895,649. These, added to the expenditures by the Department of the Interior, make a grand total of the cost of the Yukon to Canada of $32,385,532. I would ask in all reason if we have not returned that amount of money, in view of the fact that we have produced almost $225,000,000. I should say that was very good interest for the government of Canada.
It is said that Seward, Secretary of State under Lincoln, who purchased Alaska from Russia for the United States for the sum of $7,200,000, died of a broken heart because of the ridicule heaped upon him. Alaska was called Seward's icebox and Seward's folly, and yet we all know that within recent years that territory of Alaska in one year alone returned to the United States as much as
[Mrs, Black.]
$120,000,000. Hon. members must try to realize the significance of the fact that the Yukon, a much smaller territory of only 200.000 square miles, in less than forty years has produced at least $225,000,000, and I believe I am safe in saying that the land has not yet been scratched. That amount seems to me somewhat more than a fair return on the national expenditure of $32,385,532. The return is almost $200,000,000 greater than the expenditure. From the first rush in 1898 the Yukon has never asked for mercy, but has asked only justice in all things. When Lord Byng. as His Excellency the Governor General, came to the Yukon, after he had visited the various mining camps, he said to the then member, "Captain Black, I believe you represent the only truly socialistic community in the British Empire to-day," to which the member replied, "No, we are not socialists up here." "On the contrary," was His Excellency's reply, "you are ideal socialists. You have no very rich; you have no very poor; you have no social distinction. Both the men and the women must work, or go without. You take care of your sick and aged, if they have no means of their own." That, of course, is true.
It is in this connection that I want to speak about the old age pensions as they are applied to the Yukon. Many of our men and women have been in that country for from thirty to forty-five years and have not at the present time sufficient to keep them in their old age. Some of them had money and went through it, while others worked steadily almost beyond human endurance for that length of time and- yet have not sufficient to take care of their old age. The local government gives these people $20 a month. It is not called, a pension; it is referred to as a dole, which is a most offensive thing to every self-respecting man and woman. No matter how poor we may be, we all have a right to honest pride. The great majority of these men and women have worked hard while in the Yukon. They receive this $20 a month in the form of a dole and, unless they are absolutely helpless, under the conditions that prevail there they are able to live even on that small amount. Wood can be had for the cutting, there are fish in our waters and game in our woods; there are plenty of moose and caribou, and during the summer months our gardens produce almost anything that anyone might want. Then there is a great spirit of comradeship and generosity among Yukoners which I do not think can be equalled- anywhere else in the wide world. I have lived

The Budget-Mrs. Black
in the Yukon since 1898 and I cannot recall having met half a dozen truly mean men or women.
Many of our people who are entitled to old age pensions would like to go outside where they could be near relatives and friends. At present they are forced to remain in the Yukon because they are deprived of this dole when they leave the country. I contend that the dominion government should pay the whole cost of pensions for these people. If a man or woman lives for five years in British Columbia, after spending twenty-five or thirty years in the Yukon, he or she can obtain only 85 per month, an amount hardly sufficient for even an old person to live on. The government pays the whole cost of these pensions in the Northwest Territories, and if the same could be done in the Yukon it would help our people greatly. They could1 then go outside where they would be more c omfortable, where they would be close to relatives or friends and be able to enjoy some of the amenities of outside life. Sections 1, 2 and 3 of chapter 156 of the revised statutes of Canada give to the residents of the Northwest Territories the right to receive a pension from the dominion government, and I ask this government to consider giving the same right to Yukoners. These men and. women have worked hard and have been a credit not only to the Yukon .but to Canada as a whole. I ask the government to give the same consideration to the people in the Yukon as is given to residents of the Northwest Territories.
Once again I must refer to the superannuation paid to civil servants in the Yukon. The superannuation act was changed by the government in office prior to 1930, and this change has been continued down to the present time. When the government announced through an order in council that Messrs. George MacLean and George Mackenzie, former gold commissioner and acting commissioner in the Yukon, were being paid superannuation on their combined salaries and living allowances, I looked for the same justice to be shown the other civil servants in the Yukon. For years the following civil servants have been contributing on both their salaries and living allowances:
Interior department: Messrs. .Teckell, Grant, Burton, Faulkner and Gillespie.
Justice department: Mr. Blankman.
Customs department: Mr. Betts.
Public works department: Mr. Wyness.
The above list does not include any post office employees, the three officials in the White Horse customs or the eight or ten men who have been retired from the various de-31111-109
partments. It is on record that these members of the government service have paid into the superannuation fund on the basis of salaries and living allowances. Section 2 of the Civil Service Superannuation Act provides as follows:
(1) "salary" of a contributor means the regular salary paid in respect of his service, together with the value of living and residential allowances but does not include allowance or payment for overtime or other extra allowance or pay or any gratuity.
It will be seen by this section that the government promised the payment of superannuation on both salary and living allowance and the employees paid accordingly into the fund. For some time the government retired employees on this basis. Later when certain civil servants from the Yukon and the Northwest Territories were brought down they realized that they would be retired only on their regular salaries. Accordingly they made application to the government for a return of the money they had paid into the fund1 on their living allowances, which application was granted. I think all hon. members will agree that by that act rank injustice was done to those civil servants who remained in the service in the Yukon and the Northwest Territories. Members of the service who for years had been paying on both living allowances and salaries, on retirement, either compulsory or voluntary, found to their consternation and, despair that the government had betrayed' its trust. In many cases incomes were reduced below the actual cost of living necessities. We would have the same thing in a widow going to an insurance company for the $5,000 or $50,000 of insurance for which her husband had paid and being told by the company that as they could not afford to pay all that had been paid for, she would receive only half. That is just what is being done to the civil servants in the Yukon. The Yukon civil servants made their payments when they were due, but the government, in order to make a few friends, changed the act over night and1 has failed to meet its obligations. I am asking only for justice for these men and women who have worked so hard in the north.
Labour organizers are beginning to work among the workmen of Canada, and it behooves the leaders among the employers as well as those among the employees to meet each other on a footing of reason and equity. The fight that is going on in the United States between the leaders Green and Lewis for control of the powerful labour organizations under one head is already finding a repercussion in this country and in my own land to the north. When one realizes that many

The Budget-Mrs. Black

of the labour unions in Canada are so closely bound with those of the United States that before making any settlements regarding policy permission must be given by union headquarters in the United States, the time has come when thoughtful men and women must ask, "Whither are we drifting?" Would it not seem strange to ask Italy or Germany or Russia for permission to carry on our business? As an integral part of the British Empire, would it not be more sensible to have an imperial labour organization?
Times are changing; they have changed. Laws accepted as a matter of course to-day would have been revolutionary fifty years ago. The same will be true of development in another half century.
For a number of years in the north my closest associates and best friends have been the working men and women of that country. At one time I myself cooked for sixteen men, baked bread for as many more, and did all of the work with the assistance of my twelve year old son, baking time off on Saturday afternoons to have candy pulls or other parties for the boys in the Sunday school class I taught at the Forks.	I	know whatwork is;	I know what luxury	is.	Hard work
never hurt anyone, given good health.
My heart goes out to the women who at the present time must watch their children deprived of the necessities of life. I know that in addressing hon. members of this house I	am talking to	many	who have children of	their own; in	a special	degree they
must realize their responsibility for the wellbeing of our children and our grandchildren. The Minister of Labour (Mr. Rogers) understands as well as if not better than any member of this house the dangers and anxieties of our present situation.
On the whole, labour conditions in the Yukon have been fairly good. Hitherto we have been free from the strikes that trouble the outside world, but this spring, to my shocked surprise, a strike occurred in the silver district. At first a "sit-down" strike was intended, but better counsels prevailed. One mounted policeman visited the camp: he said, "Boys, this is, after all, private property; I think you had better go down to Mayo"; and the boys moved off. I am told that the citizens of that town, the strikers' committee, and the mounted police communicated with the present acting commissioner asking that he order the government liquor shop be closed during the period of the strike. These requests were either ignored or refused-I shall be very careful to obtain exact information upon my return to the Yukon in the

spring. But to the credit of the strikers, they themselves organized a committee to see that there was no disregard of the decencies of life. I believe that the mining company met practically all of the demands of the workers, at least sufficient of them so that the men went back to work. Can anyone in this part of the country or in the United States imagine a strike of several hundred men carried through with absolutely no rowdyism in spite of the fact that there was only one police officer in the entire district? I wonder how many people in this part of Canada appreciate what the Royal Canadian Mounted Police have done in the isolated districts of our great country? Surely high tribute must be paid to the strike committee and the men generally, and also to the lone member of the mounted police who represented the federal authority.
Governments must move with the times, and learn to face new conditions. For the first time in the history of the Yukon I have come to realize that we must meet labour conditions such as exist all over the world. Fortunately we have had almost invariably strict observance of law and order. I have known one mounted policeman to go among a milling mob of several thousand men, including "bad men," as we call them, from the south of the line in Alaska, and step up to one of these men and say, "Boys, I don't think you want those guns with you here. You won't have any use for them. We don't have any use for them." In the early days the mounted policeman was never armed, but no harm was done; men who were known in Alaska as bad men readily gave up their guns. This they did not because of fear of that stripling, not because of the way they expected law and order to be executed in the Yukon, but because everyone in that country knew that the entire force of the Canadian government was back of that one lone mounted policeman. We thank our justice department, we thank our governments-no matter under what regime-for the execution of law and order in the north. True, many times in the early days the police protected the unjust as well as the just, but after all these things work out in the long run.
In closing, Mr. Speaker, may I say that, my remarks are wholly inadequate to the love I bear for that great north land. From the bottom of my heart I thank every member of the government and every member in this house-the Prime Minister (Mr. Mackenzie King), the leader of the opposition (Mr. Bennett), and the Minister of Justice

The Budgets-Mr. Rowe (Athabaska)
(Mr. Lapointe), and every private member- for the great kindness and consideration that they have shown me in the last few weeks.


Mr. P. J. ROWE (Athabaska):: During the past few days the house has listened to a great deal of destructive criticism of the government. Much of it is fully justified, but a surfeit of that kind of thing, unless accompanied by helpful and constructive criticism, leaves one cold. It leaves me cold for the reason that sometimes the stone throwers live in fragile glass houses. I am fully aware of the value of a vigorous and well informed opposition. In the words of Gladstone, given a strong overwhelming majority with a weak and ineffective opposition, you can corrupt a government of angels. I believe that is so, and yet it seems to me that the evils of the party caucus system outweigh the good points. I would express my appreciation and commendation of the revolts against that system which have been staged in three Canadian legislatures within the last few days. Naturally, of course, I do not want to be interpreted as criticizing or condemning any individual; but this system, which subordinates free and untrammelled thinking, is an evil that must be ended. In view of the circumstances surrounding my own case within the last few days I ask the indulgence of the house to make that remark before beginning an analysis of the budget. I am tired of this never-ending squabble between the ins and the outs under our parliamentary system, the ins of course enjoying all the benefits and spoils of office and the outs everlastingly trying to take their place in order that they may enjoy these benefits. Our objective here should be the creation of an informed, enlightened, intelligent public opinion which in my opinion would unquestionably support a sturdy, individual open-mindedness on the part of the members. I commend and support the remarks of the hon. member for Kootenay East (Mr. Stevens) the other day in which he deplored this situation.
There is something else I should like to refer to. As one of the new members I feel appreciative of the detachment, impartiality and courtesy extended by all members of the house, particularly the government members, when some of us have to indulge in destructive criticism. I believe we all here have on these questions an open mind, a mind which has tried to rid itself of prejudices and prepossessions and tried to understand and evaluate the good in every one of the conflicting economic philosophies that are presented to this house, a mind that is susceptible to new truths, a mind that can forget and live down opinions and put opinions beneath
31111-109i
it. I believe that type of mind, with the council form of government which I am advocating, would ensure greater progress in parliamentary government. And it is just as well to remark that instead of thinking too much about the next election in our policies we should give some thought to the next generation; and instead of thinking in a calculating way about what the country can do for us, we should sometimes think about what we can do for the country. A man should also try to be careful to distinguish between his honours and his honour. There again I do not wish to be misunderstood; I merely lay that down as a general principle.
We of the Anglo-Saxon and the Latin races have an especially precious heritage to guard and keep inviolate against the assaults and encroachments of dictatorships both political and economic. The thousand year old struggle of the Anglo-Saxon race and the French race for freedom, magna charts, trial by jury, freedom of assembly, of the press and of religion, and the secret ballot will have been in vain if we permit much longer the subjection of the world's real fruitfulness to the will of a purely instrumental mechanism, the money system. The fantastic veto, which the political leaders who acquiesce in, agree to and accept this present money system, are placing upon life, the frustration of everyone and the denial of the inalienable and legitimate aspirations of our young people, is becoming dangerously close to a matter of life and death.
I wonder if the unemployed, over a million in this country, who are unemployed because of the policies of sound money governments, can look with the same degree of detachment, impartiality and freedom from prejudice and passion and fear that we can when we come to study these questions. And this very directly links up with the budget. Every four or five years in Canada under our present democratic parliamentary system we have an election. My grandfather and my father used to tell me about it and they used to describe it in this way. It was really a kind of circus and we all dressed up and went to it, and while the political balloon was going up into the heavens and our eyes were fixed upon it some adroit gentlemen were picking our pockets through the device of watered stock, monopolistic control and all that sort of thing. That brings us to the conclusion that preelection pledges are made primarily and specifically for the purpose of getting into office, and once we get into office the science of successful government seems to consist in trying to convince everybody that nothing can be done about anything. That is the layman's point of

The Budget-Mr. Rowe (Athabaska)
view, because we have the result of the system of our budgeting bearing fruit in a million and a quarter of honest, decent, good citizens compelled to endure the heart-breaking degradation of public charity in the form of the dole and unemployment relief. It is therefore an inescapable fact that the fruits of the system are the result of the methods emplo3'ed in handling the production and distribution of the country.
I will now discuss the farmers under the present budgeting system, and I merely point out that a system based as the present one is upon privilege and power is distorted and strained in every direction by inequalities which arise out of the system itself. The unjust property laws and regulations placing in the hands of irresponsible persons who neither toil nor spin the power of life and death, power over the destiny of those who toil unceasingly for small returns, pathetically inadequate returns-such a system, I say, to refer once more to Gladstone's saying, would "corrupt a government of angels". I do not want this government to seek refuge or find consolation in the comparison. I am merely attempting to prove that this government is trying to perform a hopeless and impossible task. Think for a moment of the plight of the farmers in this country. The only purchasing power they have is the proceeds of the sale of their products-grain, fruit, vegetables, hides and wool-and the prices they receive for their production are fixed by the vagaries of chance and the weather in countries beyond the seas where they have to compete in world markets. Farmers therefore have no say whatever about the price that they shall receive, except as they begin to develop cooperative organizations which will in some measure protect them and guarantee an adequate return for the services which they render in the production of indispensable necessaries which we of other classes consume from day to day.
On the other hand when the farmer comes to buy, every single thing that he buys is likewise produced in a market beyond his control. When he buys machinery and clothing and shoes and furniture and building material the price is dictated by people who simply say to him: that is what it is going to cost you, and that is all there is to it. Is it then any wonder that in the absence of any regulatory control of these things we find the farmers flat on their backs in this and every country which operates under that system? Actually it means that the farmers and the workers and the fishermen who produce our goods are regarded as a means
[Mr. P, J. Rowe.J
to an end, which end is the enrichment of those who own and control and exploit them. The harder they work, the more skill and energy they put into their efforts, the poorer they must become. It is a fallacy to say, as the Minister of Labour (Mr. Rogers) said in this house a little while ago, that consumption and purchasing power are determined entirely by production. That is not true. Year after year when we had good crops in this country and other countries, down went the price. A good crop is a calamity, and the harder we work and the more skill and energy we put into our undertakings the poorer we must become.
In spite of our vaunted humanity and Christianity and our glorious empire upon which the sun never sets, the vast majority of our people live in the shadow of a nameless terror, while the privileged few riot in unimaginable luxury. The submerged masses live in a famished world, a world in which they have always toiled- for small returns. They go to bed at night haunted by terrible nightmare dreams of penniless old age, and wake in the morning often pursued by the gaunt wolf of hunger and harassed by a thousand fears and worries over rent, food and clothes, possible sickness with no one to care for the children, and- not enough insurance to protect the family in case of sudden and always ignominious death.
Let us not be deceived by signs of a false prosperity, if we can speak of prosperity while over a million of our people are on relief. This country is now experiencing a slightly increased activity, due in part to the swing of the boom and depression pendulum, the replacement of depleted stocks consequent upon the years of depression, and in part to the enormous increase in the manufacture of armaments and munitions of war, the preparation of a rich harvest for death's sickle, the way of annihilation for multitudes of the humble and nameless of earth's children. This is all being done on borrowed, debt-creating and debt-increasing money and credit, and as sure as to-morrow's sunrise the day of judgment will come in higher taxes and lowered standards of living when we come to pay off the money hucksters, gamblers and belt-tighteners of the money system.
Can the government prevent all this? Certainly it can. It can at once take control of the issue of currency and>
credit, it can restore to parliament its sovereignty, which has been usurped by the chartered banks of this country. That was the mandate upon which this government was elected to office. Why has it not been carried out?
Then we -have this gold business. To me it is simply idiotic to talk about gold as wealth.

The Budget-Mr. Rowe (Athabaska)
Gold is not wealth. It cannot be eaten, it cannot be worn, it cannot be used to heat houses; all the energy employed in the production of gold is wasted energy. That is equally true of the production of armaments. If we would consider for a moment the diversion of that wasted energy into the beneficent channels of production of clothing and shoes and furniture and building material, what a difference it would) make I
I want to review rapidly and briefly what I believe to be constructive suggestions for the assistance of the government in next year's program. I appreciate that this year's program is pretty well defined and that nothing I can say now will have much effect on the policies of the government. But I want to present the point of view of the common people with respect to what the policies of this government seem to be for this year-people who are unemployed and who realize that their unemployment is no fault of their own, no fault of the fertility of the soil; people who are willing to go to work on the idle Land and in the idle factories, producing wealth for themselves and their children. It seems to me if you were to bring in from the streets an unemployed man who sees all that, and who is keenly aware of the attainable possibilities of a planned economy in which is envisaged the maximum application of engineering energy to the production of wealth and its equitable distribution among the producing classes, he would say this, probably with a great deal more bitterness than I say it. I say it with bitterness against the system, not against the government of course. This is true of any government that pretends to defend and1 acquiesce in and operate a system of this kind. I have already said that a government of angels could not do any better, because the system is in reverse-it works backwards. We must say that the government has done nothing for the common people of this country, unless it is to shatter for all time their faith in party politics, in government, and in God' and man.
The first thing I want to condemn is the restoration of the reduction in the indemnity to members and senators. When the low bracketed income people who are rendering indispensable services for our daily well-being witness the spectacle of a group of well-paid people with the power to do it increasing their own salaries while there is a very palpable and evident lack of equity in the distribution of the national income, when the former are compelled to try to balance their personal budgets on a pathetically inadequate income, I say it is an exhibition of un-Christian savagery. Again, to any member of the government or of this house who might be inclined to resent that, I say I do not mean it in a personal sense. But it is wrong and unmoral and un-Christian, and I protest against it.
We had, then, the wage demands of the railway men, which were refused, and we have speculators making millions out of wheat at the expense of the debt burdened farmers. We have the increase in the price of bread. We have enabled loan companies and banks to charge usurious rates of interest on housing loans. We have filled the pockets of armament and munitions racketeers, placing one of them, Arthur B. Purvis, of the du Pont dynasty, at the head of an employment commission which in my opinion is utterly useless. We have ruined the building industry by allowing the prices of base metals to climb to impossible and heartbreaking heights, affecting plumbing, heating and wiring. The reason for that, of course, was clearly stated by the hon. member for Kootenay Bast the other day; it is the result of the export of material to meet the demands of countries which are building up war defences. We have failed to bring back the value of the dollar. We have allowed millions of feet of lumber and other building material to be shipped out of this country while large numbers of our people are living in uninhabitable shacks.
Indeed, Mr. Speaker, we are even boasting about our increased foreign trade, while we have allowed hundreds of millions of dollars' worth of living necessities to be shipped out of this country at a time when our own people are in dire need of these things. I must repeat that the present faulty financial system which fails effectively to develop a home market-which could be done by the issue and control of debt free consumer credit -gives rise not only to the shocking abnormalities I have just mentioned but, by causing needless poverty at home, creates war and international anarchy abroad. Most if not all of the moral diseases of modern society are due to the abnormal conditions under which people past and present have been compelled to live, and of necessity the cure is the removal of the cause. There is one major cause; that is, poverty. Remove want and the fear of want and you automatically dry up the poison-breeding springs of vice and misery and make both tyranny and anarchy impossible. A free, happy and contented people is a peaceful, sober and law-abiding people. When we take the proper, intelligent, scientific steps to remove forever the causes of poverty from our land there will be no more talk of "subversive ele-
[732	COMMONS
The Budget-Mr. Rowe (Athabaska)
ment-s" from within, because "subversive elements" are caused by two things, poverty and injustice, and those two things alone.
There is no physical reason for poverty in this country to-day. We have vast resources in Canada. With regard to my own riding, a few days ago a competent engineer gave me the estimate that the Athabaska tar sand area contains approximately seventy-five hundred billion gallons of oil, or enough to furnish the entire world at the present rate of consumption for 1,800 years. We live in a country that has concentrated within its borders a greater body of vital natural resources than any other land on earth, and I say there is no physical reason for poverty here. The sole reason at present is that we have failed to implement a sound, sane and rational scientific control of the production, distribution and exchange of wealth within the country. The problem of production has been solved; the problem of distribution alone remains, and that is a money problem. Since the dawning of the era of economic plenty, which was ushered in with mass machine production in the nineteenth century, the financial system has operated haltingly and with periodic breakdowns, vet scientific control of the financial system is the only means by which we can benefit from power machine production. The only way to do this is to apply engineering principles to finance. This is the constructive suggestion I wish to offer to the government. I suggest that scientific control of the mechanism of money constitutes the most significant contribution which this or any other government could possibly *make in this power age of mass production and potential plenty, but the time is very short; there is none to lose. If we are to win in this race between ordered planning and immanent chaos we must act quickly.
In looking over the budget I can find very little reason for congratulation. No attempt has been made to survey the capital assets of Canada, either actual or potential. There is no balance sheet showing what we have in the way of wealth, or what standard of living would be possible for our people if we were to put our machinery to work creating goods and services. We have but a summary and list of our debts and expenditures for the coming year, with the amount required to meet these expenditures and the service charges on the debts. Then on the other hand we have a survey of the possible taxation that can be heaped on an already overburdened people.
The present system of finance takes care of production only. It must be adapted to

take care of consumption as well. May I suggest to the government that they take the first constructive step by appointing a potential products capacity commission to make a survey similar to the one conducted by Mr. Harold Loeb in the United States two years ago. I should like to refer to my remarks in this house on March 10 of last year, concerning this question. I want to quote again, as I did on that occasion, from the foreword, written by Mr. Stuart Chase, the eminent industrial engineer and chartered public accountant, to a book called Plan of Plenty, published by the Viking Press, New York. He used these words:
This study is destined, I believe, to have historical importance. It has furnished comprehensive statistical proof for a possible era of abundance; proof which has long been wanted. It gives the lie to the scarcity men, the hucksters, gamblers, and financial jugglers who once promised the end of poverty, and who now, their system in reverse, foretell an America of industrial serfs, peasants, and belt-tighteners, into a bleak and undated future. Where are you going to get the money? they cry. If the abundance men can carry the findings of the National Survey to every hamlet in the land, there will be in the end no question of where the money is coming from. Americans will not be content to idle in semistarvation because the rules of an antiquated money game demand it, when they know that the good things of life are theirs for the taking-and, mind you, the working. An income of $4,400 a year in sound goods and services is not affluence, but it looks like paradise to most families in this country to-day. And it is only a beginning; only the first indication of what the power age can do for mankind, if once it be given an opportunity genuinely to serve mankind.
May I suggest to the Minister of Finance that we have a scientifically controlled means of rectifying our national accounts so that they will present a true picture of the facts of production. Then if we follow this up by financing consumption we make our home market fully effective; we abolish poverty and by the same token we abolish war, because we abolish the necessity of fighting for foreign markets. Remember the words of the late King George V at the opening of the economic conference in London in 1932:
It must not be beyond the power of man to utilize the vast resources of the world to ensure the material progress of civilization.
It is not beyond the power of man, and it is not beyond the power of this government. If this government wants to stay in office indefinitely I suggest that it should turn its attention to this problem, and deal with it along these lines. As far as I am concerned the government is entirely welcome to remain in office. I do not know that I

The Budget-Mr. Maybank
have any particular ambition to remain in parliament, because once we develop the proper scientific system of handling governments and the control of production, then I think parliamentary and civil service jobs will be the least desirable, because you have to please so many people. I am suggesting a plan. We call it social credit. It does not matter what you call it, so long as its engineering and scientific principles are recognized and applied. We must not only apply them but translate them into action 'by effective legislation and enforcement.
As I said in the house last year-and I shall quote my words on this occasion:
If Canada would exhibit before the eyes of all mankind the spectacle of a great people liberating themselves from financial and economic bondage in this way, there is not a government on earth that could resist the demand of its own people, that a similar thing be done for them.
In other words, one example would be worth a thousand sermons. I do not believe that Canada can participate effectively in the entanglements of other countries, but I do believe we can make a significant contribution at this critical point in human history by giving an example to the world of a people deliberately planning the creation of wealth and its distribution, so as to put an end to these maladjustments of poverty and war. The only way we can pay our debt to the pioneers and trail blazers of the past is to assert, not only by words but by effective deeds, that the earth and the fullness thereof belongs to the living. Are we going to pay that debt by handing on to those who follow us across the years a better, happier world than the one we had left to us? The choice is ours.
In conclusion, Mr. Speaker, I have been thinking a great deal about the position of this country in relation to the rest of civilization. It seems to me that a civilization founded upon tyranny and injustice has no more right to continue than had the civilizations of Babylon, Nineveh, Rome and Greece. Indeed, a traveller from Mars standing among the ruins of ancient cities and empires, and seeing on every hand the fallen pillars of prostrate walls reminiscent of ancient glory, must ask the question-and this question must be asked by our own civilization- "Why did these cities fall; why did these empires crumble?" The ghost of the past or, if you like, the wisdom of the ages, answers, "These cities, these palaces and these temples, upon the ruins of which you stand, were founded upon tyranny and built upon injustice. The hands that built them were unpaid. The backs that bore the burdens also
bore the marks of the slave-drivers' lash. Those civilizations were destroyed as this civilization will be destroyed because they bought and sold the bodies and souls of men, women and children." And if there is any lesson to be gained from history, and any challenge to us in this generation, it is that no nation or no institution founded upon slavery or injustice can expect to survive.


Mr. DUFFUS:: Mr. Speaker, I did not wish to interrupt the hon. member when he was speaking, but if I understood him correctly he said that the increase in salaries and in indemnities of members was unmoral. I should like to ask him if it is his intention to accept the increased indemnity?


Percy John Rowe: If the house would give me permission to answer the question, I should be very glad to do so. I said that, and I meant it. In answer to the query as to whether I shall accept the increase I say that I will, and I intend to use it in disseminating information among the people of Canada with respect to the infamies of this system.


Mr. RALPH MAYBANK (Winnipeg South Centre):: Mr. Speaker, perhaps I might first, in addressing the house in the budget debate, congratulate the hon. member for Athabaska (Mr. Rowe) both upon the manner of his speech and upon one expression which I noted as he went along. When he came to what I fancy would be called his peroration, and quoted his peroration of last year-had he been here earlier there might have been others to quote-I could not help envying both his facility of speech and his flair for phrase making. In all sincerity I congratulate the hon. member upon his presentation this afternoon. I must be frank to say that in so doing I refer more to the form than to the matter of his speech.
I commend to the house the hon. member's approval-and he spoke, I thought, somewhat feelingly-of the tolerant attitude which he stated had always been shown both by the official opposition and those sitting on the government benches with reference not merely to himself but to other members of his party. I agree that there has been a tolerant and kindly attitude shown by the house. I am glad of it, and I am glad to be numbered among those so described by the hon. member who has just taken his seat. He may think we have been more tolerant than the members even of his own party. So far as I am concerned, I know that I can disagree at any time I like with my party on a matter
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of principle; so long as I do not get angry enough to walk out, I am pretty confident they will not throw me out.
I wonder, however, if the hon. member would permit me to suggest that upon further consideration he must agree he was wrong in saying that one of the difficulties in Canada is that there are too many people without those things which we are in the main exporting. All hon. members will agree that there is too much misery in the country, but surely the hon. member for Athabaska cannot contend that the fundamental difficulty is that we have not enough wheat, nor indeed unreasonable distribution so far as we need wheat for consumption- and so with practically all other products we export.
The hon. member spoke about certain economic philosophies. He no doubt is aware that the economic philosophy which we in this section of the house are endeavouring from time to time to put before parliament is the exchange of surpluses, in order that we may get more of the things we lack and in that way help to relieve misery; it is not an endeavour to load upon the backs of our people more wheat, more copper, more nickel, more pigs, more hides, and so forth. Surely that is a sound economic philosophy. But no philosophy can be expected to better conditions overnight. I think he ought to remember that ours is a philosophy in contradistinction to his own, which is essentially, as he said, a distribution or diffusion of the monetary unit of the country, which he wrongly described as purchasing power.


Percy John Rowe: May I ask the hon. member a question, because I am interested in his analysis? Is the economic philosophy he is now advocating producing good results?


Ralph Maybank: I am glad the hon. gentleman has asked that helpful question. I shall first give my answer, and then during the course of my speech I shall give reasons for my answer. My answer is: Yes, it is producing results. The exchange of our surpluses is improving conditions, but I am just as impatient as the hon. member over the fact that the improvement is not as rapid as I should desire. The only difference between us is that possibly I have better control over myself -and am still able to think even though I am impatient.
I should like to join with others in offering my congratulations to the Minister of Finance (Mr. Dunning) upon the picture he has presented- this year of the country's affairs. Last year he presented a rather sombre
(Mr. Maybank.]
picture, but we had hope at that time that changed1 policies would bring about an improvement. We were faced with the necessity of having to pay a thousand million dollars, or thereabouts, of new diebt put upon, us during five years of rule by the present opposition. The minister's statement this year has shown that our hopes at that time were justified. The minister apologized for the length of his speech, but in order to offset that he said he would try to offer something of a cheery nature. The house, I think, will never weary of long speeches from him provided he can make as many cheerful statements as he did in his presentation this year.
There are two general observations I should like to make with respect to the budget. There will be perhaps a sequel to one of my statements later on in my remarks, while the sequel to the other will appear in the budget of next year. The minister forecasts the probability of a deficit next year of not more than $35,000,000. He hopes that our revenues will come to within that amount of meeting our expenditures. I am inclined to think that he may perhaps be puling the composite leg of this house. I have a feeling that he is perpetrating a gentle joke upon us. He predicted a deficit of $100,000,000 last year, and when I realize how much he bettered that, I cannot but think that he is now playing a little joke when he says that he expects a deficit of not more than $35,000,000 next year. I fancy he expects to do better than that.
The minister would have done much better this year had it not been for what might be called certain acts of God,-a legal phrase with a blasphemous smack about it, but sanctioned by usage. I refer particularly to the drought in western Canada. I suspect that the minister is holding back some good news now in order to give it to us next year. A Scotch member of this house referred to the minister as being a Sassenach but that he had a good deal of the canny Scot about him. Needless to say that Scotchman thought he was paying a compliment to the minister in attributing to him the qualities of a canny Scot. I said to him I thought he was trying to take some credit to his own race, and then I walked away from him as quickly as I could.
I think the whole country is gratified with the announcement that the improvement is such that there is no necessity for new taxes. We sometimes forget that when increases are announced in the budget they are really taxes which are spread over the whole country. Likewise, when reductions are announced, there is a proportionate tax reduction. I think

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the present budget, with its treaty appendage, is notable for its tax reductions. This is what I was referring to when I said I hoped to give a sequel to one of my statements later on this afternoon. It must be gratifying to all to see the manner in which the patient is recovering under gentle, beneficent Liberal rule and the application of Liberal doctrines. Our trade has advanced more rapidly than the trade of the rest of the world. The improvement last year for the rest of the world was about eight per cent, whereas Canada's trade improved twenty per cent. The fact that we came up to fourth place as an exporting country was doubtless due in large part to our policy of selling wheat for export rather than continuing the silly system of hoarding it in elevators and paying storage tolls.
The deficit this year is S19.000.000 greater than it might have been because of the return of certain moneys to the farmers of western Canada. There has been a writing off of certain debts of Manitoba and Saskatchewan upon the condition that the benefit be passed on to the farmers. This is an act of far-sighted governmental administration and will benefit all Canada. As a representative from the prairies I think it behooves me to express my gratification.
As a general justification of this policy of the government I should like to present to the house a picture of the disaster which has overtaken the prairies during the last five years. Such a picture has been given to the house in one way or another many times, but there is no harm in presenting it again. I hold in my hand a graph which was prepared by Mr. Mitchell Sharp, of the Sanford Evans Statistical Service, for the Actimist, the organ of the junior board of trade of Winnipeg. The story of the disaster which overtook the prairies is indeed startling. Agricultural wealth in the year 1928-29 is shown in the chart as having a value of $528254,010. The following year it had dropped to $380,131,404. The next year there was a further decrease to $212,761,271. The next year another decrease took place to $158,179,522. The following year, 1932-33, there was a slight increase to $159,717,822. The next year another increase occurred, bringing the value up to $159,820,270. The next year, 1934-35, it increased to $197,139,780. In 1935-36 it had increased further to $201,431,932. But it will be seen that even though there has been an improvement in the last two or three years, the fact remains that for every dollar obtained from this source to-day, over two dollars was obtained at the beginning of the period to which I have referred. The mineral development of the country has not been such as to
act in any way as a counterpoise for this dead loss in agricultural wealth.
During that same period, as I think everyone knows, the dollar has been sweating off some of its value. In the light of the tremendous losses to the country as a whole, the fall in government revenue can be easily appreciated. I make these remarks with a view to again expressing gratification, as one representative from the prairies, at the action of the government in respect to this remitted debt of $19,000,000. In spite of the hard times that have befallen that part of Canada in recent years, the prairie mind is both buoyant and optimistic. The west will prosper again and will become once more- and gladly so-the mainstay of Montreal, Toronto and other eastern cities.
A heavy attack has been made since the commencement of this parliament upon the Minister of Finance (Mr. Dunning) by the apostles of what is sometimes called soft money. The minister thinks, no doubt, that he has confounded his critics. I do not know about that. I should be inclined to wait for the reply of my genial though passionate friend from Rosthern (Mr. Tucker), and of the redoubtable member for Vancouver-Burrard (Mr. McGeer) before being sure about that.
Arising out of this budget presentation there is a wage question to be considered. I wish to say a word or two upon the theory of hard versus soft money, because I think it has a close bearing upon the general wage question. My own opposition to what may be called the soft money theory does not arise from any horror through contemplating the fate of the assignats of France, nor the chaos that resulted in the United States at the time of the greenback issue, nor the confiscation in Germany which followed the inflation of the mark, nor yet the Russian ruble orgy. After all, our advocates of soft money argue for what they call controlled inflation, with emphasis upon the adjective. I do not think any person can deny that there might be merit in a controlled inflation. It would be bound to have certain benefits. One of those benefits-perhaps the one which is chiefly spoken about-is that it would make it more easy to pay debts. The value of the dollar would be less in relation to goods, and therefore it would not be so difficult to pay debts contracted some time ago. My disinclination to fall in with that doctrine does not arise from a consideration of various money debacles which have occurred in the world, but rather because I regard it as a scheme to cut wages and other income payments. When in this way we depreciate
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money ten per cent for t'he purpose of making it, shall we say, ten per cent easier to pay debts, we at the same time cut all wages and salaries in the same degree. The old age pension, instead of being twenty dollars, is immediately cut to eighteen dollars. Every war-earned pension is automatically reduced ten per cent. The insurance which people are keeping up for themselves or their loved ones is reduced ten per cent. Even the aid we are now endeavouring to work out for the blind would have ten per cent less value in terms of purchasing power than we now expect. Such schemes are frankly experimental. I am opposed to experimenting in this way with the wages and salaries of our people and with the pittances granted to the blind and the infirm. To my mind those who advocate action of this kind should be required to make out an overwhelmingly compelling case.
It was a surprise to me to learn of the civil service salary restoration at this time; I had not expected it until next year-which shows what a poor forecaster I would be. Nevertheless I am very pleased, as I believe every hon. member must be, that it has been made. The payment of full salaries will have beneficial effects for the country at large out of proportion to the actual amount thus restored, because the esprit de corps of the service will be improved by more than a mere five per cent. When the government reduced wages it gave a lead to industry in wage cutting; that, I think, is within the memory of us all. I trust that this action by the government will be a counter-signal to all employers of labour, and I hope the government will do all in its power to urge restoration of wage cuts whenever the opportunity occurs, and particularly in industries which have not yet done justice to their 'workers in this regard.
I notice by the newspapers that the government is acting even now, as it should, as mediator in the railway wages dispute, consequent upon the strike vote which the employees have taken. I believe that at the moment majority opinion in the country is against the men on this wage issue, believing that the men should1 wait a while. Frankly, I am not in accord with that opinion, whether or not it is the sentiment of the majority. The railway men see that profits everywhere are increasing; the fact was referred to in accents of satisfaction by the Minister of Finance. They see themselves doing work for a wage seventeen per cent below that paid to other men doing the same class of work. They know that the railways, both the publicly, and the privately owned one have

paid their bond coupons without regard to whether enough money has been earned to meet that obligation; and they feel tha-t their wages ought to be just as much a charge upon the industry as the bondholder is. I confess that I see much justice in their position. If the employers will take the risk of restoring the wage reduction, putting it up to the men to make all possible savings and eliminate wastage, I believe that sufficient money for the restoration of these wages can probably be found.
May I point out that a very large proportion of the work of the railways is done without supervision. Has anyone ever stopped to think how much loss there would be on a railway if a three per cent slowing up of trains were to be effected? That ought to bring home the fact that when there is esprit de corps among the men in this particular industry you will probably have a prosperous industry; and no doubt the converse of that is true. You cannot have a good spirit in labour when there is a sense of injustice, and in all its mediation I would urge upon the government to keep this concept in mind.
I have spoken once or twice, once anyway, about the effect of the shrunken dollar. May I give my authority for the statement? The Labour Gazette for January indicates an upward trend in prices and a downward trend in the dollar. At the beginning of 1933 the wholesale price index was 67-2, and at the end of 1936 it was 85-1, a difference of nearly 18 points. True, this is not the last nor only criterion in estimating the dollar value, but it is important, and no one will dispute the fact that the wage-earner's dollar, and everyone else's dollar for that matter, has been losing some of its purchasing value in recent years. In considering the question of wages that is something that should be kept in mind.
A proper appreciation of the trade agreement which has been brought down in the budget cannot be had until we study it in committee, but enough can be seen to show that this is a great forward step in the direction of trading sanity. It is not inappropriate to refer to the agreement which the new one replaces, in view of the fact that there is much desk-thumping on the part of the present opposition when any supposed benefits of the former agreement are referred to. I do not suppose that anyone would deny that some benefits resulted from the old agreement, nor do I think anyone would have been disposed to deny that at the time

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that agreement was negotiated. However, it is not at all clear that the benefits are such as are claimed.
Mr. H. V. Hodson, writing in the last bank letter of Lloyds, makes a significant statement. On page 69 of that letter he has a table which I am not going to ask to have placed on Hansard without reading it, and it would not be convenient to read the whole table. I shall therefore give the comments of Mr. Hodson himself upon his own table. At the bottom of page 69 he observes:
An inspection of this table points to several facts as outstanding. First of all, the most sudden and remarkable change of all, the rise in the empire's share of United Kingdom imports, took place chiefly between 1931 and 1932, and therefore is to be ascribed far more t9 the protective tariff itself and the depreciation of sterling than to anything that happened at the Ottawa conference.
Perhaps I should guard myself by pointing out that the protective tariff he there refers to is the protective tariff of Great Britain, which was adopted without any reference to and indeed long before the time of the Ottawa agreement. Again on page 69 there is this comment which I commend to the house:
Unfortunately it is next to impossible to tell from the statistics which of them was dominant in the actual effects of Ottawa; for the figures are influenced by a great many other factors, some of which, like world recovery and the rise of prices, are far more powerful than any adjustment of tariffs in the commonwealth whether upward or downward. The consequences of Ottawa cannot be isolated from the consequences of currency realignments, changing price levels, the pursuit of self-sufficiency by foreign countries, and other outside forces.
Consequently it would appear that the benefits of that trade agreement have probably been grossly overstated. In any event it ought to be perfectly clear to any reasonable person that they have been considerably less than they should have been had the agreement been negotiated in a different fashion. We have still in our memories Baldwin's plea that we should give preferences not by building fences against other people, but rather by levelling them down in respect of ourselves. That plea fell on deaf ears at that time. All the handicaps of 1930, and others, were left against the British. We simply said, " We will treat others worse that we treat you, and that ought to make you feel better." There was no positive, independent benefit to the Englishman with whom we were dealing, nor was there any benefit to the Canadian consumer. There was no lessening of tariff taxation at that time so far as the Canadian consumer was concerned. Not only that, but it is within the memory of all of us that Britain signed the agreement under duress; she felt
she had to sign it. It did not do us any good to force an agreement of that kind. All the journals of England witness to the fact that people who endeavour to deal in that way never do themselves any good. Neither in the case of individuals nor in the case of nations does it do any good to try to drive hard bargains and to overreach. As a matter of fact our endeavour to overreach at that time reacted on us in the psychological way I have been trying to point out, and we never obtained the benefits that we should have had. The present method is different. We have on the one hand actual reductions in favour of those with whom we are dealing, the exporters of the old country, and on the other hand actual benefits in the way of tax reductions for the Canadian consumer.
There are about this new agreement several things which I fancy it would be just as well to point out at this time. In the first place I am struck by the amount of the reductions. I have not had an opportunity to make all the arithmetical calculations I should like to in connection with reductions in duty, but I have gone through the first twelve pages of the schedule and the results are indeed gratifying. I find several 100 per cent reductions, a good many 50 per cent reductions, and many of 33, 25, 16 and 11 per cent. I believe 11 per cent is the least. This is a large tax reduction, aside from everything else. True, not everyone gets the benefit of each one of these reductions, but in view of the fact that all or practically all of the articles in the schedule I am discussing are important in the daily lives of the Canadian people, the general effect of this agreement is an important lowering of taxes for every man and woman in Canada. A few specific items will make this plain. One or two have perhaps been mentioned already, but I took from some newspaper this statement regarding 329 pounds of woollens. I did not rely entirely upon the newspaper report but checked it up myself with the schedule as it was and as it is. On a shipment of 329 pounds of woollens having a value of $114, the buyer was mulcted to the amount of $78; that now is reduced by $20. Woollen socks worth $8 were levied upon to the amount of $5.54; that is reduced by over 50 per cent. Practically all housewives -and their husbands of course, since the housewife would1 be buying the socks for him -will benefit by that 50 per cent reduction. I take from the Winnipeg Free Press of Saturday, February 27, a sentence which will indicate to the house the importance of these reductions:
Woven dress linens bearing 25 per cent minus 10 per cent plus 3 cents a pound, an
1738 '
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effective duty of from 30 to 40 per cent, depending on price and quality, are now to come in free of duty. Fabrics of cotton with cut weft pile, wholly of cotton, or of cotton and artificial silk, formerly taxed 15 per cent and 30 per cent, depending on the composition, now enter at 5 per cent.
Now sir, in many items the tariff is still quite high and for the textile industry ample. We hear a great deal from time to time about the forgotten, man, but no one seems to say anything about the forgotten woman. Perhaps the finance minister has discovered her, because there is a great deal in this budget of benefit to the housewife. Perhaps it would be as well if the husbands of the country did not find this out too soon-perhaps I should have said nothing about it-so as to allow the housewives, the forgotten women, to get along somewhat more easily for two or three months on their budgetary allowances before their husbands find out about it and cut the allowances, to buy for themselves perhaps razors and fishing tackle and things of that sort, which also come in cheaper under the agreement.
The dropping of article 11 will, I think, be admitted by most people to be a good thing. That must have looked to the Englishman l-ike a trick clause. He expected to have a chance to be heard by the tariff board and in that way get redress from unfavourable rulings previously handed down. But, of course, he little realized the kind of tariff board which had been rigged up against him, or the lead given to departmental officials. These people seem to have developed a doctrine of import prohibition. They do not think of the consumer last, they simply do not think of him at all. The sooner there is some brooming done in regard to the tariff board, and some readjustment of the officials in the Department of National Revenue, the better it will be not merely for this government but for all concerned. I have not forgotten the nefarious inside job of tariff jacking attempted last summer when officials tried to make loggers and farmers pay from $200 to $300 more than they ought to pay for tractor tires, until they were forced' by public opinion to return to their earlier and truer judgments.
Another thing. In examining the schedules you realize what a pampered child of government paternalism is the textile industry. Its protection was indeed prodigious, amazing; one wonders that any person could ever have thought that such a protection could last- S75 carpet carrying $33 protection; hose to the value of $7 protected by a tax of $3.26. That, of course, meant that a woman paid $1.50 for a dollar's worth of hose, if these are the right prices for hose-other hon. gentlemen 
will know more about that than I do. At any rate they will agree that when a pair of hose is worth a dollar no woman, and no man buying them for her, should be called upon to pay $150. I think the hon. member for Rosthern (Mr. Tucker) drew the attention of the house a few days ago to a tax of $1.81 on an auto rug having a value of $2.92.
The reductions, of course, are excellent. I do not propose to discuss the evidence given before the Turgeon textile commission or the report that may perhaps be made, but I hope that when the report comes down we shall be able to go forward and make still greater cuts in the textile items. I recall, for instance-of course, this does not exist now- a tariff of $153 on a 25 cent article.
Mr. SPEAKER; Order. I am sorry to interrupt the hon. gentleman, but he has exhausted his time.


Ralph Maybank: May I ask the indulgence of the house to present this short argument?


Walter Edward Foster: With the unanimous consent of the house.


Some hon. MEMBERS:: Go ahead.


Ralph Maybank: I thank you, sir, and
the house, for this privilege. It is patent that the benefits of protection have not been passed along to the textile employees, and that furnishes a striking example of the futility of trying to improve the standard of living of the worker by giving protection to the employer. I have worked out a few examples relative to protection and wages which I should like to place before the house.
In 1930, before the change of government, a pound of yarn worth 31-5 cents had a wage content of 8'02 cents; that is the wage that had to be paid in making a pound of yarn. The protection at that time to the industry in relation to that one pound of yarn worth 31-5 cents amounted to 4-09 cents, which is close to half of the whole wage bill. In October, 1930, by which time we had a change of government, two changes had come about. First the wage content had decreased, doubtless from causes internal to the industry itself. The wage content was only 6-6 cents, but the protection at that time on a pound of yarn, was 8-2 cents. In other words we, the people of Canada, were paying the whole wage bill of the industry and 25 per cent more. The industry was on relief, but on a magnificent scale. As I say, we not only paid the wage bill of the industry; we paid an additional 25 per cent for profits to the employers. That, it would seem to me,

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is a demonstration of the futility of endeavouring to improve the wage standards of workers by giving protection to employers.
There is perhaps a great deal more that might be said on this phase of the subject, directly related to such remarks as I have made so far. I am appreciative, however, of the fact that a concession has been granted to permit me to present this aspect of my argument, and I do not desire to trespass further upon the time of the house.


James Shaver Woodsworth: Mr. Speaker, let me say that I heartily agree with the latter part of the speech of the hon. member for Winnipeg South Centre (Mr. Maybank). Undoubtedly protection of an industry is no guarantee that the worker in that industry will be protected.
According to the rules governing this debate we cannot offer an alternative to the proposals of the government. A subamendment must be strictly an amendment to the amendment, and no other amendment is admissible. However, I should like to criticize certain features of the budget. Some are good, of course; some are bad. In determining which way we should vote we have to ask ourselves whether the budget is generally satisfactory and whether it is moving in the right direction. An unusual feature is the inclusion of the trade agreement between Canada and the United Kingdom. To-day we were told that this agreement will be presented in the form of a bill, so we propose to study the agreement and vote on it on its own merits.
In this connection, I should like to compliment the hon. member for Ontario (Mr. Moore) upon having brought before the house some of the fundamental considerations which should guide us in judging an agreement of this character. With two points raised by the hon. member I heartily agree; first in his objection to tariffs being made by way of treaty, and second that this agreement looks in the direction of economic imperialism. I take it that imperialism is simply an extension of the protective system into the international field.
I looked over the debate which took place in 1932 in connection with the first agreement, and I may say that at that time our group took a position somewhat similar to that outlined in this connection by the hon. member for Ontario. I quoted a passage by Sir Arthur Salter, a passage which had been quoted by the then leader of the opposition, the present Prime Minister (Mr. Mackenzie King). Sir Arthur Salter said:
The world as a whole will either move toward a system in which each country can exchange the products which it is best qualified to produce for those in respect of which other
countries have corresponding advantages, or it will move toward an organization, national, imperial or regional, in which each unit will pursue the idea of self-sufficiency, with their standard of living poorer for the loss of world trade. ... We shall move as a whole to a world order in which each national unit will be a unit in the general commonwealth, or to a system of closed and, it may be feared, increasingly hostile units which will add immensely and incalculably to the risk of further wars.
Then at page 428 of Hansard for that year I commented as follows:
I submit that the conference is a move in the direction of an organization, national, imperial or regional; that we are still pursuing the ideal of self-sufficiency, and that, in the words of Sir Arthur Salter, this will inevitably involve lower standards of living and it will develop hostile groups with undoubtedly war at the end of the road. Who can read history and believe there can be a continued increase of tariff walls and of alliances such as we are making without these leading inevitably to war?
And a little later, referring to freer trade relations:
This agreement is not a step in that direction. It is a step backwards, towards less free intercourse between Canada and other nations. No one will doubt this. The Prime Minister himself said in his Calgary speech:
"Nations outside of the empire would be asked to pay some tribute for the privilege of trading within the empire."
Then I concluded with these words:
We are not voting against every particular item in it; let no one make that statement. We are forced to say yes or no, and looking at the matter in a large way, from a Canadian standpoint, we must say no; looking at the matter from the international standpoint, we must say no.
At that time the Liberals in the house stood solidly with us and voted with us. I wonder why to-day the Liberals are taking an altogether different position. The Liberal government brings forward an agreement not very different from that which we all denounced in 1932. There are two, or perhaps three questions I should like to have answered. Have the Liberals changed their minds? Has the agreement worked so well that they have been converted to the: Conservative policy? I think we have a right to expect an answer to that question. Again: Is this agreement sufficiently * different from the former as to indicate a getting away from the policy of protection and the policy of imperialism? I have not heard that question answered, and I think we have a right to an answer. Or are we in such a tight corner in our international affairs that Canada must adopt a second-best policy whether we like it or not? I think the government should be frank with us and tell us exactly why a policy similar

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to that which was denounced by the Liberals in 1932 should now be put forward as their policy.
Let me point out that in the budget the sales tax and sugar tax remain. Further, in spite of the revelations of conditions existing in the textile industry, there is no very material lowering of the tariff. Those conditions are known to exist, although a report has not yet been presented. Further, there is no increase in the higher brackets of income tax. I think under those circumstances the government can hardly expect independent members to vote in favour of the budget.
I have considerable sympathy with the Minister of Finance. There is no doubt that he must raise large revenues. We all do, or at least should recognize that fact. That means heavier taxation. The question is: By what method shall he raise the revenues, and upon whom must the taxes fall? He has said that the budget offers "greater cheer." I submit that it may offer greater cheer to certain industrialists and financial operators, but that it does not offer much cheer to the great body of the people in Canada. Let me quote the minister:
An obvious indicator of the general state of our economic health is the volume of dividend distributions by corporations. It is gratifying to report therefore, that reliable estimates of profits for the past year were the highest since 1930, and reveal an increase of more than thirteen per cent over the 1935 total.
And again:
Profits are the mainspring of economic activity in the system under which we operate.
Undoubtedly that is altogether too true. But he goes on to say:
Increasing profits therefore are the best augury for increasing employment.
And the minister nods his head in approval. Personally I do not think that anything like that conclusion follows.


Charles Avery Dunning: Would the hon. member admit the converse, that decreasing profits are an augury of decreasing employment?


James Shaver Woodsworth: We are not discussing the converse; we are discussing the statement of the minister, and I am quite sure he is sufficient of a logician not to think that because the converse is not true, that therefore his statement is true.
Let me illustrate the situation which exists. I turn to some of the figures given before the price spreads commission. Let us take tobacco, for instance. Dividends rose from a usual rate of 7 per cent to 10J per cent in 1933. In the three depression years, 28 executive officials were paid a total of $1,500,000. The company's own figure is understood to be

$1,146,923.65. On the other hand, we find that in six united cigar stores the total wages dropped from $4,600 in 1931 to $2,900 in 1933.
Or, if you like, let us turn to meat packing. Since the merger in Canada, Canada Packers made a yearly profit at the Toronto plant of $900,000. On the other hand, from 1927 to 1933 over 1,600 employees were let out. By 1933 the wages had fallen by 16-9 per cent and the average annual wage in the packing plants was $933.
Turn again, if you will, to the canning industry. In 1933, when the lowest price in five years was paid for tomatoes, the company gave a bonus to certain stockholders, largely its own officers and directors. In the depression years the profits of the American Can Company rose from 9-0 per cent on sales in 1931 to 21-1 per cent in 1933.
Turning to the investigation into milk we find the investigating committee discovered that in 1932, while prices paid the farmers for milk had been reduced, dairy company profits as a whole had been maintained at pre-depression levels.	In the opinion of
the committee, profits in some cases were even greater than those shown on company balance sheets. Items listed as "depreciation reserves" and "bad debts," it was thought, were sometimes merely disguises to cover hidden profits. But the milk prices did not reflect the dividends paid.
Let us look at conditions in connection with agricultural implements. From 1927 to 1929 the four large companies made profits of $16,000,000. That did not mean that higher wages were paid.
Let us turn to merchandising. The commission learned that chain stores had weathered the depression in fine shape. Between 1929 and 1933. six large chains increased gross profits from $11,840,935 to $14,421,416, and net profits from $1,568,845 to $1,730.592. Dividends paid increased from $823,690 to $1.243,597-all on net sales which fell from $64,182,714 to $62,616,029.
In the year preceding that in which the investigation took place, the net profits of the Woolworth Company amounted to SI,-960,959, or 21-95 per cent of the cost of goods sold. Dividends paid annually on the basis of $5 per share amounted to $3,750. What about the wages. Fifteen men averaged S7.34 and 120 women $6.78 for a full week's work. Another organization paid 194 grocery clerks from $4.50 to $25.00 for a sixty-one-hour week, and 110 women clerks $7 to $15 for forty-eight hours work, with an average wage for men of $10.69 and for women $10.85. Delivery boys worked sixty-

Industrial Loan and Finance
six hours for SI .50. Employees of a grocery and fruit chain worked from sixty-five and a half to eighty-four and a half hours per week. A married man was employed as a dish washer at S6 a week and his meals, and a girl as a waitress for S10 and1 meals.
I give these figures because they refute the statement of the Minister of Finance that increasing profits are the best augury for increasing employment. There seems to be no connection between large profits and wages or large profits and employment. In a number of the cases I have set out, all the profits went to the country south of the boundary line.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.



PRIVATE BILLS


[Stage Direction]
Bill No. 24, for the relief of Joseph Neilson Blackloek.-Mr. Plaxton.
Bill No. 25, for the relief of Francis Hector Walker.-Mr. Hyndman.
Bill No. 26, for the relief of William Edward Connor.-Mr. Jacobs.
Bill No. 27, for the relief of Annie Nemchek Cohen.-Mr. Jacobs.
Bill No. 28, for the relief of James Gordon Ross.-Mr. Jacobs.
Bill No. 29, for the relief of Florence Anna Iverson Salberg (without amendment).-Mr. Jacobs.
Bill No. 36, for the relief of Charles Marsh Doxsey.-Mr. Walsh.
Bill No. 37, for the relief of Phyllis Stan-ners Kitchin, otherwise known as Judith Stan-ners Kitchin.-Mr. Walsh.
Bill No. 38, for the relief of Ivy Jackson Beaulne.-Mr. Jacobs.
Bill No. 39, for the relief of Charlotte Opal Moore Norton.-Mr. Jacobs.
Bill No. 40. for the relief of Mildred Tan-nenbaum Sufrin.-Mr. Jacobs.

[Stage Direction]
Mr. THOMAS VIEN (Outremont) moved the second reading of Bill No. 57, respecting Industrial Loan and Finance Corporation.
Walter Edward Foster: Is it the pleasure of the house to adopt the motion?


James Shaver Woodsworth: No.
Hon. CHARLES A. DUNNING (Minister of Finance): With reference to this bill and
the one which follows it, my own views with respect to small loan bills have not changed since one year ago. I must, however, recognize that the bills now before the house-* my remarks on the one will in some respects apply to both-differ from bills previously presented in that they purport to have the effect of reducing the rate of interest which the companies are at present allowed to charge under their existing acts. I say they purport to do that. The bills have been examined with some care by the banking and commerce committee of the Senate, and I think that we are warranted in at least allowing an examination of these two bills by the banking and commerce committee of this house. Personally I should be content if the second readings were given without prejudice to the ultimate fate of the bills, which could then be referred to the banking and commerce committee for examination and report; for as I have stated, the companies concerned are already in existence and are permitted by existing law to charge a higher rate of interest than seems to be contemplated by the bills. We might, therefore, at least examine them in committee where interested parties both for and against may be heard.


Mr. HEAPS:: May I ask the minister, did he not last year promise to consider legislation under which all such companies would be brought, and has the government or the Department of Finance taken any action along this line?


Charles Avery Dunning: I am sorry I omitted to mention that matter. A year ago that was the intention of the government. A considerable amount of work has been done departmentally, but not such as would lead us as yet to any satisfactory conclusion on the matter. In the meantime I am bound to say that the volume of demand for this type of small loan appears to have grown rather than lessened; in fact, I believe I am correct in saying that one of our chartered banks is now making such loans upon terms considerably more favourable to the borrower than are contemplated in any of the statutes now existing incorporating companies for the purpose. From the best information available, however, I do not believe that the experience of that chartered bank is yet sufficient to enable us to base intelligent conclusions upon it. Certainly such examination as we have been able to make departmentally during the year does not point the way to positive conclusions as to the character of such general legislation as I had in mind a year ago, and which. I may say to the hon. member, I still have in mind if a basis can be arrived at which will enable
Industrial Loan and Finance

people needing this kind of accommodation to get it upon less extortionate terms as I regard them, than now prevail.


Mr. THORSON:: May I ask the minister a question?


Charles Avery Dunning: It is the second reading, Mr. Speaker.


Joseph Thorarinn Thorson: A moment ago the minister said that the bills now before the house apparently reduce the rate of interest which these corporations now are actually charging. Would the minister explain what he meant by "apparently"?


Charles Avery Dunning: Of course, Mr. Speaker, that is one of the reasons why a committee examination is desirable. It is rather too complex for me to enter into at the moment. That I have my doubts was indicated by the language I used.


Joseph Thorarinn Thorson: That is why I asked.


Charles Avery Dunning: At least in the case of one of the bills.


Hon. H. H. STEVENS (Kootenay East):: Mr. Speaker, it has been suggested publicly, and I heard it elaborated last year before the committee of the other house, that these bills are designed especially to benefit small deserving borrowers; and around these bills and that other bill which was introduced a year ago but was dropped there has been spread, shall I say, a sort of halo of righteousness. I have given this subject study over a great many years. One of the first things I did twenty-six years ago when I came into the house was to bring up the subject of extortionate rates of interest; and I did so on several occasions. If parliament passes these bills in their present form, or entertains a general bill of this character that permits a rate of interest around two per cent per month, parliament, in my opinion, will be putting its sanction upon extortion, or as the minister says, upon extortionate rates of interest. Borrowers from this class of money lending concerns are the most needy people in the country.


Charles Avery Dunning: That is right.


Henry Herbert Stevens: They are the people least able to pay high rates of interest. It cannot be contended that the risk is such that these companies must charge a high rate of interest, because they are particularly careful, I notice, to exact from borrowers the most ample security they can get in the way of endorsements, besides assuring themselves that the borrowers have lucrative occupations.
TMr. Dunning.]
Another thing I very definitely object to, and some years ago I brought it to the attention of the finance department, is that some of these companies issue literature in which they wisely advertise that they are operating under dominion government sanction. The impression of the average citizen, particularly women and others who contemplate borrowing from these institutions, is that they are in some way or other allied to the government. It is not so-


Charles Avery Dunning: I agree so thoroughly in that regard with the hon. member that just a few months ago, upon one of these advertisements coming to my attention, I instructed the superintendent to take it up with the parties concerned and have it stopped. Whether the effort has been entirely successful I cannot say. The companies can at least announce, as my hon. friend says, that they are incorporated by special act of the parliament of Canada. They can and do say that, and of course we cannot object, because it is a simple fact.


Henry Herbert Stevens: They go further than that.


Charles Avery Dunning: They do.


Thomas Vien: My hon. friend will allow me to point out that when he was in the cabinet a public bill was introduced in parliament to enact that the maximum to be charged by these small loan companies would be two and a half per cent per month; this bill purports to reduce the rate to two per cent, and the other bill, to two and a quarter per cent.


Henry Herbert Stevens: I am no more in favour of this than I was of the other.


Thomas Vien: Except that my hon. friend says we are sanctioning the principle. It has been sanctioned by parliament long ago.


Henry Herbert Stevens: In my opinion it is time
we withdrew the sanction. As far as the hon. gentleman's interruption is concerned, for the twenty-six years I have been in parliament this thing has been going on to a greater or less extent, varying from time to time, and it is all wrong. It is time parliament took into consideration the erection of a loaning body that would take care of this class of loans. As a matter of fact, in the great majority of cases they ought not to get the loan. That may be misinterpreted, it may be misunderstood; but those who know the business know perfectly well that in the majority of cases, at any rate in nearly half of them, they should not get the loan at all. Some of the most pitiful stories may be told of the way in which corporations of this kind are exploiting not

Industrial Loan and Finance
only the needs but the bad habits and difficulties some people get into by having this resource available to them.


Mr. MACDONALD (Brantford):: Why
should not the poor man have an opportunity to borrow money when the rich man has?


Henry Herbert Stevens: Here is an illustration of what I warned the house against ten seconds ago. If a highly intelligent gentleman like the hon. member who interrupts me misunderstands what I said, it demonstrates how careful one has to be. If he will do me the courtesy to read what I said about ten seconds ago. he will get the answer to his question. Certainly poor people have a right to borrow money; but poor people have a right to borrow at a rate of interest that they can bear, and not at two per cent a month. I am trying to point out that by passing this type of legislation we are surrounding institutions of this kind with an air of sanctity that does not belong to them. That is my objection to this class of legislation, and personally I should like to see parliament turn thumbs down on all bills of this kind. I am as well aware as any member of the house of all the arguments that can be made in support of the bill- the difficulty of controlling small loans, the cost, and all that sort of thing-but I still believe that it is within the common sense of members to devise a law that would give protection to the poorer borrower, much better than is given either in the general interest act or in these special bills. Personally I will vote against this bill, just as I have always voted against divorce bills, on general principles. I am against the thing, absolutely.


James Shaver Woodsworth: The minister has suggested that if these bills passed the second reading they could then go to the committee without prejudice. Personally I object to that way of doing business. We are here deciding on a principle, and we should not allow these bills to be proceeded with if the principle on which they are founded is unsound. Last year, with reference to certain bills very similar to these-


Charles Avery Dunning: No, different.


James Shaver Woodsworth: -the minister said:
We can only look forward to dealing with the situation effectively at another session, in the meantime preventing the further spread of the evil by refusing to pass bills incorporating more companies to do business along these lines. Certainly the house, having been unwilling to pass Bill No. 86, cannot consistently vote for the one now under consideration.
That will be found at page 3552 of Hansard, 1936. Now if that was true last year, when there had been a very general discussion and the house had refused to pass the bills then before it, if is just as true to-day when another set of bills are before us, very similar to the ones we dealt with then.


Charles Avery Dunning: On a point of order, Mr. Speaker, I am sure my hon. friend does not intentionally misrepresent me. I was dealing last year with bills to incorporate new companies. The bills now before us are amending bills with respect to companies that are doing business at this moment and will continue to do business unless this house repeal their charters. I mentioned a moment ago that the only reason I suggested that they should go to the committee was that they purport to reduce the amount of interest which these existing companies are now charging and may charge under their charters. That is quite a different thing.


James Shaver Woodsworth: It is somewhat different but the principle is the same.


Charles Avery Dunning: No, it is different.


James Shaver Woodsworth: I think it is the same. In the explanatory note to one of these bills it is stated that:
the reason for this amendment is that the company, though originally incorporated in 1928 and still locally managed and staffed by Canadians, was acquired in January, 1933, by and is now virtually a wholly owned subsidiary of Household Finance Corporation, incorporated under the laws of the state of Delaware.


Richard Bedford Bennett: Whose charter is also before us.


James Shaver Woodsworth: Yes; but why should we seek to give some vested interest to what is virtually a new corporation?


Charles Avery Dunning: Oh no.


James Shaver Woodsworth: It is the old corporation but now, although managed and staffed by Canadians, it is virtually a wholly owned subsidiary of Household Finance Corporation, incorporated under the laws of the state of Delaware. If we in this house have made 'mistakes in the past-and I think we have-in giving charters to corporations of this kind, we should do nothing further to give any sort of vested interest to any of those now operating or allow any of them to have what may become more or less of a monopoly of this kind of business.
I believe it was brought out last year, and again before the committee in another place, that there were large fees charged and' two per cent a month, which means nothing but extortion on the part of these companies and



Industrial Loan and Finance
a very great hardship for poor people. I cannot see where the pressure comes from that induces any member to advocate the perpetuation of this kind of thing, and I hope that right now on the second reading the house will refuse to allow these measures to go any further.
I should have been glad if the minister could, have introduced at this session legislation which would lead to the repeal of all charters of this kind. As I said last year, I should hope that before any further bills of this kind are allowed to become law we should do something definite, as the hon. member for Kootenay East (Mr. Stevens) has suggested, to provide some means by which the poorer people might obtain credit. I call attention to the wonderful growth of the credit unions in certain sections of Quebec and the maritime provinces. The department might do something to encourage that kind of organization.


Charles Avery Dunning: The caisse populaire?


James Shaver Woodsworth: Yes. I do hope that the house will refuse to give second reading to these bills.


Mr. PAUL MARTIN (Essex East):: I am glad that the hon. member for Winnipeg North Centre (Mr. Woodsworth) has referred to the credit unions. I have given this whole problem a good deal of study, particularly from the point of view of the credit unions, and especially those in the maritime provinces operating under the auspices of St. Francis Xavier university. The credit union as it is known in the maritime provinces, as it is known under Mr. Desjardins' auspices in the province of Quebec, should be studied. These credit unions effectually operate where there is a certain amount of homogeneity, which is not possible in the case of companies operating as I believe these companies contemplate operating and are operating in localities where there are all sorts of people and all sorts of occupations.
I know nothing about these two bills, but I do know something about the problem of borrowing from the loan companies. I have particularly in mind those companies which advertise in the Toronto and Montreal papers. I cannot say I have seen any advertising in the Windsor Daily Star, but I know there are companies operating in that city charging as high as 200, 300 and in one case I know as high as 600 per cent. The way companies of that sort can be eliminated' is not by an emotional appeal, but by a clear examination of this whole problem.
I would like to have seen general legislation, but the Minister of Finance (Mr. 
Dunning) has given the reasons why that is not possible this year. I am glad to know he still hopes it will be possible before long. In the meantime the whole problem requires consideration, and this house cannot escape its responsibility. We at least should set in motion the banking and commerce committee to make an exhaustive survey of this whole problem. It is true it was dealt with :by a committee of the Senate, but I suggest, with great deference to that body, that possibly our point of view may not be theirs. I for one am anxious to eliminate loan companies operating without restriction and imposing an excessive burden of interest. It seems to me that one very effective way of eliminating them is by giving the kind of regulation which we can give.
I inquired the other day from the department of the superintendent, of insurance about the character of outstanding obligations in these respects. If this matter is allowed to drop without a thorough examination there will be a number of people in the province of Ontario who will suffer. I understand there are some 30,000 outstanding loans in respect of one of these companies alone. I do not know whether the company is charging a high rate or a low rate, but having in mind that there is a market for this kind of loan, and as a considerable number of people have been affected, I should like as a member of this house an opportunity to examine in the committee the superintendent of insurance, whose job it is to supervise these things, and to get from him his point of view, and information which it is not possible to get in this house. I want to see a complete and thorough examination of this whole matter, and at once.


Mr. R. J. DEACHMAN (Huron North):: A young man came to me a few days ago wanting to borrow $41. I thanked him for the compliment. He had purchased a bill of goods in this city amounting to $120, and he owed $41 and was behind in his payments and they were pressing him. But they offered to carry on, letting him pay it off at the rate of $5 a month, providing he would renew the contract for $61. That is, he owed them $41, and they wanted him to promise to pay $61 at $5 a month. I do not know how much of that sort of thing there is going on in this city, but that instance suggests that there ought to be some provision for loans to these people on fair terms. So I rise to support the suggestion of the previous speaker that this be referred to the committee on banking and commerce, so that some examination may be made of it. It would have been much better for that young man to pay 2 per cent a month, because as I figure it the proposed rate which

Industrial Loan and Finance
these gentlemen were offering was 75 per cent a year. If this bill went to the banking and commerce committee it would give members a chance to examine it. They need not decide in favour of this company; they might decide upon some broader course of action based upon future legislation. Something ought to be done because whatever evils there may be in the present system there are perhaps greater evils in the charges which are made in connection with instalment sales and transactions of that kind.


Mr. DANIEL McIVOR (Fort William):: Would it not be possible to have before the committee to give evidence one of those who have had to pay 24 or 30 per cent or have lost their goods? If I were asked now to vote on this bill I would vote it sky-high because of experiences of which I have knowledge. I have read the speeches in the Senate, and the Senate are not whole-heartedly in favour of the bill, and hope that the commons will defeat it. I think the whole thing should be thoroughly examined. There is no risk in bringing it back into this house. Sharks of this type should not be tolerated and allowed to take advantage of men who are cornered, as some are who have to avail themselves of small loans.


Richard Bedford Bennett: I quite appreciate and
sympathize with the position of the Minister of Finance (Mr. Dunning). It was my unpleasant lot to occupy somewhat the same position with respect to somewhat similar measures. These measures were submitted to the house between 1930 and 1935, and we endeavoured to do something towards providing a general code to govern the operations of these loan companies.


An hon. MEMBER:: It was 1934.


Richard Bedford Bennett: Yes, I say between 1930 and 1935; I was not sure of the date. The library contains a number of volumes, notably the report of the Russell Sage Foundation, dealing with the problem of these small loans. From what I was able to learn, the history of them is certainly not creditable and not desirable to have continued. The Minister of Finance however is in the same position to-night as I was then. One of his own supporters has proposed a measure, and the minister does not want to kill it. He says he is opposed to it, says it is reprehensible, but like all party chiefs he desires that his supporter ^hall not be annoyed by any action taken by the government, and therefore he proposes to send it to the banking and commerce committee. Well, I speak
31111-lioj
from a wealth of experience when I say that it should not be done. It is putting the imprimatur of our approval upon a principle to which I believe we are opposed. If the minister had not expressed himself so strongly-


Charles Avery Dunning: I thought I was moderate.


Richard Bedford Bennett: The minister says his language was moderate, but he denounced the measure as reprehensible. What stronger language he could have used may be left to the imagination rather than the memory. At any rate the position is this: the Finance Minister of Canada asks us to do something which he condemns.


Charles Avery Dunning: No.


Richard Bedford Bennett: He asks us to give second reading to a measure which he condemns as reprehensible. If that is not asking us to do something which he condemns I cannot understand the value of language as a medium to express thought. To send the bill to a committee in view of the minister's opinion that this is undesirable legislation, is to compromise with the principle which he asserts. I do think we should not do it.
I am not going to traverse the matter tonight. One of these bills provides for 1J per cent a month, another for 2 per cent, and one of them says the experience has been that they hadi a reduction in gross revenue from 2-45 to less than 2-25 per cent. We have three rates in the bills before the house. One rate is per cent per month, another is 2 per cent per month, and the third is 21 per cent per month. According to one of these bills we find that this business has become so attractive that we are asked' to increase the capital of one company to the enormous sum of $5,000,000. It is a corporation owned in Delaware, with a present capital of half a million dollars. Now we are asked to increase that capital to $5,000,000, to be put out in loans that cannot exceed $500 each.
I must say that when I came in here I was somewhat hesitant as to what view I should take about the matter. Having heard;, however, the minister who is charged with the conduct of the financial affairs of this country denounce the principle, I cannot bring myself so to depart from his advice, his wisdom, and his experience as to attack the feeling which I must confess any man situated as he is probably would have: We will not annoy our supporter and follower who has moved the bill, so we will just send it to the committee on banking and commerce. In the closing days of this session, having regard to the time now at our disposal, there will be no opportunity to
Industrial Loan and Finance

consider the matter in all its bearings, or to study that close analysis made of the whole situation which we could find by going to the library andi getting the report of the Russell Sage foundation.
Under these circumstances I think we should, let these companies worry along with the powers and capital they now have. We will have done them no harm, and they will realize that this parliament proposes to. pass general legislation that will be effective, I trust, in regulating their operations.


Ernest Lapointe: If this were a public bill, Mr. Speaker, I would agree with my right hon. friend (Mr. Bennett) and would be disposed to vote against the second reading. I am under the impression, however, and I believe I am right, that voting for the second reading of a private bill does not mean approval of the principle of the bill. There is a difference between a public bill and a private bill in this respect. Sending this bill to a committee will merely have the effect of permitting members of the house to receive the report of that committee as to the reasons for the introduction of these bills, which do not seem to be approved by many members of the house. The principle seems to be abhorrent to many hon. members. By sending the -bill to a committee we will permit consideration of the very mattere which were discussed a few moments ago by my hon. friend from Essex East (Mr. Martin). I know that has been done on other occasions. The second reading of a private bill has been voted in order that it might be sent to a committee, without approving or in any way committing ourselves to the principle of the bill. As far as I am concerned I absolutely reserve my right to vote against the bill if the report of the committee justifies me in doing so.


Thomas Vien: Mr. Speaker, I should like to point out to the house-


Walter Edward Foster: I would direct the attention of hon. members to the fact that if the hon. member for Outremont (Mr. Vien) speaks now he will close the debate.


Mr. MACDONALD (Brantford City):: If this bill is not sent to the committee, will this company, and the other company dealt with in the next bill, automatically pass out of existence?


Charles Avery Dunning: No, they will continue as they now are.


Thomas Vien: I can tell my hon. friend that they will continue to charge 2i per cent in-

terest under the general legislation now on the statute books. These bills tend to reduce the rate and to change the basis of their operations.


James Shaver Woodsworth: They could reduce the rate if they wished to do so.


Mr. ROBERT FAIR (Battle River):: 

THE BUDGET


[Stage Direction]
The house resumed consideration of the motion of Hon. Charles A. Dunning (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means.
James Shaver Woodsworth: Mr. Speaker, when the house took recess at six o'clock I was passing some criticisms on certain passages in the speech of the Minister of Finance (Mr. Dunning). I had suggested that contrary to his statement, increasing profits did not necessarily involve increasing employment.
In referring to certain industrial activities the minister emphasized the increase in forest products and in mining. May I suggest to him that the increase in lumbering activities and pulpwood production does not necessarily involve anything of great value to Canada, because according to the methods on which logging is now carried on there is no replacement of our timber resources.
Only a few evenings ago, in connection with another debate the hon. member for Davenport (Mr. MacNicol) told us of the very successful precautionary measures against floods being instituted in certain parts of the United States. I am sure all hon. members appreciate the benefits of that kind of work, but in this country we are passing through the stage where we are denuding our hillsides. If this goes on much longer undoubtedly it will mean floods in this country, as it has meant floods in the country to the south of us. Now is the time when floods may be effectively prevented, and at the same time our forest wealth conserved. Further, I think we must recognize that the great stimulus which has been given to mining has been in connection with those metals required mainly for war purposes, such as nickel and copper, and in connection with gold, which occupies a peculiar position in our economy. I have wondered why the minister cannot see his way clear to tax more heavily the minerals being produced in this country. I am informed that in South Africa the larger mines pay almost
fifty per cent of their profits into government revenues. I cannot for the life of me see why a very small proportion of our people should be able to make huge.profits out of the war preparations and war scares of Europe. Some of us would like to see the government take over the monopoly of production of these essential war materials. Failing that, it seems to me that the least the government could do would be to place a heavy tax upon the profits being made in this way. If we must spend public money for war preparations, that money should come out of the industries which are making huge profits out of the war scare.
Gold occupies a very curious position in our economy. To a certain extent it is the measure of everything else. It is because of that unique position that it. is necessary for the government to treat it in a special way. Under these circumstances I cannot see why this country as a whole should not benefit directly from our gold production.
Referring to the proposed royal commission to investigate dominion-provincial financial relations, the minister said:
That decision followed investigations which demonstrated what had long been recognized as a fundamental weakness in the allocation of financial powers and responsibilities to the provincial governments by the fathers of confederation seventy years ago.
I should like to ask: Why ignore the tremendous problem of unemployment, the great problem of public health, the pressing problem of housing and the urgent problem of education? All these problems are not being solved to-day, largely because of the position in which our provinces and municipalities find themselves under the existing interpretation of the British North America Act.


Charles Avery Dunning: Is my hon. friend suggesting that those problems are not being considered? They are all included in "and responsibilities." That is precisely the point my hon. friend is making.


James Shaver Woodsworth: I understand that this commission will be charged with the investigation of the situation existing in connection with provincial jurisdiction and federal jurisdiction.


Charles Avery Dunning: Jurisdiction, no; but responsibilities. They are all included in that. Jurisdiction is a different thing. The provinces now have certain responsibilities, and we have been told by the privy council just what they are. It will be within the purview of the commission to review the responsibilities which the governmental bodies, dominion and provincial, are under by virtue of the constitution.

The Budget-Mr. Woodsworth


James Shaver Woodsworth: I suggest that in practice it will be difficult to do the one without doing the other.


Charles Avery Dunning: A bit difficult, that is right.


James Shaver Woodsworth: I do not know whether the inference can be taken from the decisions of the judicial committee of the privy council that unemployment is a provincial matter, but supposing it is, what will be done? What is needed to-day is some rearrangement, not only of the responsibilities but of the jurisdictions of the dominion and the provinces.


Charles Avery Dunning: That is involved in what I suggested.


James Shaver Woodsworth: I want to impress upon the minister the absolute necessity of this commission being charged with wider duties. The commission should not have to confine itself narrowly to financial relationships.


Charles Avery Dunning: Quite.


James Shaver Woodsworth: Then the commission could perform valuable functions.


Charles Avery Dunning: It would be useless otherwise.


James Shaver Woodsworth: Practically so. Let me turn to another matter. In criticizing monetary fallacies the minister said:
Fundamentally our need is an increase in our aggregate national income-an increase in material wealth, not a different yardstick by which to measure it.
In making that statement the minister ignores the fact that because of the inflation and deflation which has taken place during the last few years tens of millions of dollars have been transferred from one set of pockets into another. The yardstick is a very important matter and it cannot be ignored, even although some of us cannot agree with all the policies put forth by certain monetary reform groups. The hon. member for Winnipeg South Centre (Mr. Maybank) suggested this afternoon that the wages of our railway workers should be restored. He also mentioned that the dollar had shrunk in value. I think that is true. He denounced soft money, and so on, but he did not apparently recognize the relationship between real wages and monetary control. After all, the dollar as it is to-day does vary from time to time. I think we ought not to fail to recognize that fact. But aside from monetary control I suggest to the minister that fundamentally our problem is not so much an increase in our aggregate national income, much as that is to be de-

sired, as a just system of distribution. I am convinced that if that took place there would follow a release of productive energies.
According to the Canada Year Book of 1936 the total value of the productive activities of the Canadian people in 1933 was $3,340,000,000. How is that distributed? Some indication is given by the income tax returns. According to the year book of 1935, income tax payers receiving under $2,000 per year numbered 85,385, and paid a tax of $950,120. Taxpayers receiving from $2,000 to $3,000 numbered 41,918, and paid total taxes of $938,923. Going to the other end of the table, we find that those receiving from $10,000 to $15,000 numbered 2,815, and paid a total income tax of $2,402,696. Those receiving $15,000 and over numbered 259, and paid a total income tax of S6,458,127. I recognize that a different rate applies to those in the higher income brackets, but nevertheless it is astounding how few people are able to pay an income tax of any large amount. A footnote in the Canada Year Book states that the reports are presented in a way "to conceal net income and identity of taxpayers." I cannot see why people who are receiving such large incomes should be so much afraid of having their identity disclosed, nor why governments should pander to that fear. It seems to me that we should know or have at least an approximate idea of what the incomes of these large income taxpayers really are.
The fact is that the vast majority of Canadians are too poor to pay income tax. This is said to be largely an agricultural country, but agrarians who pay income taxes number only 416-an astounding situation!- and pay only $824,083. On the other hand, those who come under the class "financial" number 11,673 and' pay $6,379,503-thus clearly demonstrating that in Canada we are witnessing a widening breach between those who labour and those who live on other people's labour; and unfortunately the budget does not seem calculated to lessen that breach very much.
Let me suggest to the minister and: to the house that the gaining of wealth is not necessarily an indication of ability. Sometimes it is largely a matter of chance. Often it is merely an indication of cunning and greed and heartlessness. May I suggest to him that the opportunities to make money are very largely dependent upon the artificial arrangements of our national economy; for example, our tariffs, the protection of corporations, and such matters. As indicated in this budget, the government is doing very little to check this tendency. The sales tax remains unaltered, although it bears very

The Budget-Mr. Woodsworth
heavily on- the masses of the people, and the income tax also remains unaltered, although it does not take as much as should be taken from those who are wealthy.
Speaking of unemployment and invention and technical improvement, the minister said:
As it indicates an increased efficiency in the productive mechanism, its results are not to be deplored. Its ill effects are temporary; in the Jong run it increases employment by cheapening production and expanding consumer purchasing power.
I am not at all sure that those statements, for many years accepted by economists, are to-day endorsed by some of the very best economists. The minister however says that this development is not to be deplored1. Looking down from Olympian heights upon the struggling masses, he may be so aloof from the petty worries of the ordinary man that he can utter such a sentiment. Can it be forgotten that over a million people are unemployed to-d-ay? Surely at least the immediate results are to be deplored. The minister says the ill effects are temporary. Well, that is not very much consolation to the million-odd people who are under relief, or to the 400,000 odd who are out of work.


Charles Avery Dunning: A moment ago you said a "million."


James Shaver Woodsworth: Under relief.


Charles Avery Dunning: You said, a million unemployed.


James Shaver Woodsworth: If I said so I correct it. I should have said, in- the first statement, "under relief," and I said just now that there were 400,000 unemployed. The minister suggests that -these ill effects -are very temporary. I suggest that to a doctor, symptoms-


Charles Avery Dunning: I think you inserted the word "very." I do not think I used the word "very."


James Shaver Woodsworth: That the ill effects were temporary.


Charles Avery Dunning: You said "very temporary."


James Shaver Woodsworth: The minister said:
Its ill effects are temporary; in the long run it increases employment by cheapening production.


Charles Avery Dunning: That is right.


James Shaver Woodsworth: Well, I do not think we can take very great consolation out of the fact that in the course of the next twenty, thirty, forty or fifty years these effects will have passed. We are dealing with things as they are to-day, and under
these circumstances it seems to me that this budget should contain some cheer for those who are unemployed or under relief. Again, the -minister says:
It is probably true that a hard core of unemployment and relief will always remain.
And he added that some may become permanently unemployable.
The depression will leave ns with a new problem which will demand new methods of treatment from the appropriate authorities.
Here, again, the solution is left indefinite. Who are the "appropriate authorities"? Certainly in the last year the government has been trying to shift very largely the responsibility for the unemployed from the federal government to provinces and municipalities who are ill -prepared to care for it. Again- and I criticize these statements because I believe that very often we take for granted the truth of a great many of these general statements,-the minister calls special attention to the expansion of our foreign trade. Canada has -moved from fifth to fourth place among the nations of the world. I should like to ask the minister whether that fact is in itself very significant. What are we doing with our huge exports? Paying debts; very largely paying debts. The -minister himself says that we have had a total credit balance o-f $617,000,000. This, to -use his own words-
-gave Canada an ample supply of foreign exchange funds with which to meet interest and dividend payments to foreign creditors as well as other invisible debit items in our balance of payments, and at the same time enabled us to effect a very substantial reduction in our net capital indebtedness abroad.


Charles Avery Dunning: That is the point. We paid off debt.


James Shaver Woodsworth: Yes, quite so. There are two or three things we do

pay interest, pay dividends, and pay debt.


Joseph Thorarinn Thorson: And -pay for imports, necessary imports too.


James Shaver Woodsworth: Yes, but this is the credit balance over and above the payment for imports to which, I think, reference is being made. That is where our balance goes. It is of tremendous significance that Canada has to pay such huge debts, such huge interest, such huge dividends when at the same time many of our own people are unemployed and their families are suffering.


Charles Avery Dunning: My hon. friend will recognize that it was a good thing for Canadians to pay off outright last year something like $145,000,000 which they owed abroad. At least they will not have to pay interest on that much any -more.

mo
The Budget-Mr. Woodsworth


James Shaver Woodsworth: It is a good thing in itself. It is not a good thing when it had to be done at the cost it has involved to tens of thousands of homes in this country.


Charles Avery Dunning: But it is not the government that I am speaking of.


James Shaver Woodsworth: Well, I am speaking of the government.


Charles Avery Dunning: The S145,000,000 was paid off by the Canadian people.


James Shaver Woodsworth: Quite so-under arrangements that have been established by the government.


Charles Avery Dunning: No, no.


James Shaver Woodsworth: We try to get decent amounts paid to the unemployed; we try to get decent wages for employed people; we try to get adopted various schemes that will raise a little higher the standards of living of our people, and had those standards been raised a little we should not have been able to pay off so large an amount of our debts; I think that is true.
Let me turn to another matter which perhaps throws some sidelight on our foreign investments. A few weeks ago a labour deputation from Cuba came to see me. Unfortunately I have not been able to check the statements they made, because our bureau of statistics can give very little detailed information with regard to foreign investments; but according to this delegation almost a hundred million dollars are invested by Canadian interests in Cuba. The delegation made this statement:
The Royal Bank of Canada controls more than eleven sugar mills through the Sugar Plantation Operating Company; the Bank of Nova Scotia controls three sugar mills and the Canadian Bank of Commerce controls Central Covadonga sugar mill.
Canada is the fifth buyer of Cuban sugar; the United States, Great Britain, France and Belgium are first in importation in order as set above.
Although there is a law setting a minimum wage of 80 cents per eight hours, due to the help given by the army to the large sugar interests, they pay only 25 to 40 cents per day of eleven or twelve hours and labour cannot protest.
Workers are paid chiefly in vouchers and script money good only at the company general store, with prices 10 to 20 per cent above prevailing prices in nearby towns.
The military dictatorship has continuously increased its stranglehold on the Cuban people with the help of powerful United States, British and Canadian financial interests who use him as a tool to force labour and others to work for practically nothing.


Charles Avery Dunning: What is the hon. gentleman quoting from?
[Mr. DunningJ


James Shaver Woodsworth: I am quoting from a memorandum which was presented to me by a delegation of Cuban labour people.


Charles Avery Dunning: Cuban?


James Shaver Woodsworth: Cuban, yes. I am
giving this as a side light on our foreign investments and what they may really involve. We have -Canadian banks chartered primarily to do business in this country but doing business abroad. Not only have we low standards of living in Canada, but if this statement is at all correct, Canadian institutions are assisting in keeping down the poorer people of other countries as well.


Charles Avery Dunning: Has the hon. gentleman
verified those statements?


James Shaver Woodsworth: If the minister had been following closely he would have observed that I said I had not had an opportunity to check carefully the financial side of this matter, since our own bureau of statistics had no accurate information with regard to the details of foreign investment. I suggest that the Minister of Finance ought to have control over investments made outside Canada.


Mr. DEPUTY SPEAKER:: I do not want to interrupt the hon. gentleman, but his time is up.


James Shaver Woodsworth: May I have two
or three minutes longer?


Frederick George Sanderson: With the unanimous consent of the house.


Some hon. MEMBERS:: Go on.
Mr. WOODSW'ORTH:	My time was split
at six o'clock. I want to call attention briefly to one or two other matters involved in the budget speech. Our revenue from all tax sources will amount to $384,618,000. May I point out that this amounts to nearly $35 per head, or $175 per family of five. Our sales tax. now the largest single source of government revenues, amounts to $115,500,000, which is about $10 per head or $50 per family of five; and undoubtedly it falls most heavily on the ordinary people of the country-and all this in addition to monopoly exactions and tariff robbery. I wish I had time to discuss some of the hidden profits of the textile firms, but I do not suppose I should be permitted to do that until we have the actual report of the commission.
Our public debt charges amount to 26'23 per cent of our expenditures, debt charges due very largely to the war. War pensions amount to 10'22 per cent; national defence 4-36 per

The Budget-Mr. Needham
cent. In other words we have a total, on account of the last war or prospective war, of 40-81 per cent of our expendtiures.


Charles Avery Dunning: I did not say that.


James Shaver Woodsworth: No, the minister
did not say that, but I am saying it. I think I am correct; I hope I am. In addition to this we have under the estimates for public works, votes for armouries and so on, and grants to provinces for relief. What I should like to point out is that a very large proportion of the amount which we expend in Canada to-day does not go to any service to the public but rather in payment of debts. Our net debt is $3,993,495,000.
I will abruptly conclude, thanking the house for its courtesy in extending my time.


Mr. JOSEPH NEEDHAM (The Battle-fords) :: I am sure, Mr. Speaker, that by now you are thinking that everything that should be said on the budget has been or ought to have been said, and that induces me to be as brief as possible in order to comply with the wish to bring the debate to a close.
In every session there are two items that are of particular interest to the citizens of this dominion. One is the speech from the throne, which gives an outline of the measures that will be presented to parliament, and the other is the budget, which gives us a financial statement showing the success or otherwise of the past year and the estimated revenue of the year upon which we are entering.
Many things have been said both for and against the budget and I shall touch on only a few that have impressed me. Much has been said about the sales tax. I have not the least doubt that thousands of our people were expecting a little relief from this tax, and I would point out to the minister that on this side of the Rocky mountains there is a province that has a sales tax, the manner of enforcing which I wish the dominion would copy. I wish the dominion government would do as that province does in connection w-ith the sales tax. With each purchase that is made the amount of the tax must be registered on the sales slip so that the purchaser knows exactly what he is paying in the form of sales tax. If that were done in connection with the dominion tax, the feeling towards the tax would be far different from what it is at the present time. People would see red quite often. But, hidden as it is in the cost price, the tax is apt to be less impressive.
The minister in the budget speech, at page 1214, deplored the low commercial loans that were being issued. Looking up the Year Book I find that in 1935 commercial loans
amounted to $878,748,000; I find also that $915,076,000 was loaned to governments; and I ask this question: What must be the opinion of the people when more money is being loaned to government for government purposes than is loaned for the commerce of the country? That seems to me a very serious situation. The minister's statement to which I referred reads:
Our banking system currently finds itself with ample reserves for the accommodation of commercial borrowers. While the volume of commercial loans is abnormally low, there have recently been indications of growth, and a moderate increase is expected during the present year. Contrary to the prevailing belief in some quarters, the banks will heartily welcome the opportunity thus provided to invest their funds at somewhat higher rates than have recently been available on gilt edged securities.
I wonder what are gilt-edged securities at the present time. There has been a great change in the last twenty-five or thirty years in that regard. It used to be that a borrower's moral character counted largely when it came to getting a line of credit or a loan at the bank. If he had collateral security, that was considered good; if he had real estate, that was considered gilt-edged. But to-day it is not so. If he has a life insurance policy in good standing, that is what is demanded to-day. But if it is not in good standing it is not accepted.
The minister in his budget speech said:
Real estate taxes are high, for instance, because relief costs are high; relief costs are high because unemployment is heavy; and unemployment is heavy, to an important extent, because the building industry is inactive.
I want briefly to analyse the home improvement plan, which is offered as a means of stimulating the building industry. There is no doubt that thousands upon thousands of homes need improving and enlarging. But we are also forced to acknowledge that there are thousands and thousands of homes being lost to the owners. If the tax sales in both rural and urban municipalities had been enforced in the last few years it is estimated that in many places over 50 per cent of the homes and property would be in the hands of the municipalities. That is a very serious situation. Thomas Jefferson said:
If the American people ever allow private banks to control the issue of currency, first by inflation and then by deflation, the banks and corporations which -will grow up around them will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered.
That statement is just as applicable to Canada as to the United States. I have

The Budget-Mr. Needham
been very much discouraged the last year or two in going about and finding people renting the houses in which they were bom, and not renting them from their parents either. So this home improvement plan seems to me to be just another attempt to patch up for a little longer the present system. I do not believe it can succeed, with an interest rate of 6-3 per cent. How can a person who cannot save out of his earnings sufficient to repair and improve his home pay for it with interest added? It does not seem to me to be common sense. Besides, prices are going up. I got two letters this week, one from a lumber merchant who tells me there have been two raises already in the last six months, and one from a hardware merchant telling of the large increase there is at the present time in hardware, which is largely used in the repair of homes. I understand that next week there is to be held in this city a conference of the mayors of the various cities, so no doubt we shall hear something then about the condition of the people in the different communities.
Speaking of municipalities I see from the figures of the bureau of statistics that in 1919 the municipal debt of the dominion totalled 8729,000,000. In 1929 it was 81,193,000,000, an increase of S46,000,000 a year. From 1932 to 1934 showed an increase of over
850,000,000 per year, with 1934 showing an increase of 870.000,000 over 1933. Bearing out what I was saying in regard to the condition of the municipalities, the North Battle-ford paper dated last October states that Canada's municipal debt has increased during the last fourteen years by 8484,259.000 or an average of 69 per cent. The Financial Post recently compiled a table of the total of municipal bonds in default, which shows to what extent Canadian cities have been unable to meet their financial obligations. Ontario showed $98,000,000 defaulting, out of a total of 8494,000,000; Quebec $15,000,000 actually ,in default, and more in doubt; Manitoba 812,000,000 in default, out of a total of $92,000,000; Saskatchewan S4.000.000, out of $46,000,000; Alberta 85,000,000, out of $76,000,000 and British Columbia 812,000,000, out of $129,000,000. So it does not seem a very hopeful course to load up the citizens of these municipalities with additional debt.
There is one other very serious feature in connection with this home improvement plan, and that is that it will enslave a lot of our citizens who have so far escaped. I have in mind particularly the wage earner. Heretofore he has not been in a position to borrow because of not having the necessary security,

but now a special arrangement is being made whereby he can be brought into circumstances which have caused so many to lose their homes and their holdings.
I turn to the question of debt and interest. The budget -last year reported the national debt at 83,008,000,000 and this year the addition is estimated at 887,395,000, which makes a total of $3,095,395,000. The estimated interest charge on this debt for the coming year is $137,405,000. That is a tremendous burden of added debt to pay. Interest is the big millstone around the necks of the Canadian people at the present time. Take the figure of the national debt, and then add up the interest that has been paid on the national debt from the very first, and you will see that the two just about balance. In other words, taking the interest that has been paid since confederation, and adding to it the national debt at that time, it will be found that we have paid just about the same amount in interest up to the present time.
To me that indicates two things which I do not think anyone can dispute. The first is this:	Had there been no interest there
would have been no national debt, and you can apply the same statement to provincial and municipal debts as well. The other point is that we are going into debt annually by the amount of the interest we owe to financial institutions. If anyone can dispute those two facts I hope they will do so, but the figures are there. So you see where we are going with this added national debt, which means added interest; and the accumulation goes on.
If I had time I should like to show this house that in the final analysis, under our present system, interest cannot be paid. In the seventeenth century the world debt increased by 47 per cent. In the eighteenth century it increased by 466 per cent, and in the nineteenth century by 12,000 per cent. Still it goes on; still we hope to get out of this difficulty under the same system that got this dominion into it. If you attempted to apply that principle to business I do not think you would find anyone who would accept it. Last year the Minister of Labour (Mr. Rogers) stated that in the previous five years the dominion government had paid
8200.000.	000 for relief purposes. That is a staggering amount, but if you will look up the figures you will see that in the same five years we paid 8638,500,000 in interest. That did not impress us so much as paying
8200.000.	000 for relief.
I think the thing that most impressed me last session was a statement by the hon. member for Vancouver-Burrard (Mr. McGeer),

The Budget-Mr. Needham
in which he showed this house that for some reason or other our coin and currency issue at the present time is only 50 per cent of what it would have been if the rate of advancement from 1915 to 1935 had continued in the same ratio that prevailed from confederation up to 1915. That seemed to me a very serious state of affairs. I should like to know what is the power behind the throne that can so regulate our coin and currency issue as to interfere with its normal growth. To me these are very serious matters.
I suppose all the activities of life can be said to be directed' to three things, and I have not the least hesitation in saying that it is the concern of the government to recognize those three things. They are production, consumption and distribution:. Taking a bird's eye view of the activities of the world, what would we see? We would see people ploughing and sowing and reaping and mowing; people struggling down in mines; people going out to sea, and all the other everyday activities that go on the world over. Then if we could come a little closer we would see the anxiety, the worry and the strain shown by the people, and if we were to ask the reason the only answer would be; That we may live; that we may be enabled to consume. So we acknowledge the right of people to live the best possible life according to the tme in which they live, and it is the duty of every citizen to live the highest possible type of life. It is also our bounden duty and privilege-and we all want to do it-to create conditions under which succeeding generations may have a higher type of life than we had. Look how parents strive and deny themselves the necessities of life in order that their children may have a better chance than they had. So I say one of our principal tasks is to look after the consumption needs of the people.
Some time ago an investigation was made in the United States with regard to money, and I should like to place before the house a table showing the relationship between coin and currency in circulation, per capita, and bank deposits, also per capita:
Coin and	Bank
Year	currency	deposits1834	
$ 5 24	$ 7 111860	
9	76	9	851880	
13	93	44	301900	
17	10	111	571915	
18	56	218	481930	
29	76	485	57
You will notice, Mr. Speaker, how the one has increased in relation to the other. I cannot understand, and I hope the minister will enlighten me as to why the government should hold down the issue of coin and currency in order to force, shall I say, people to bank money which as a rule they can only secure by borrowing. Why that is, I do not know. There is a reason why the banks can withdraw money from circulation and cause deflation or inflation, as the case may be. But we never hear anything about inflation, if it is a bank credit that is issued. On the other hand, when one talks about the government issuing currency, it is called inflation.
May I point out one thing? I said that interest could not be paid. It can be paid if there be put into circulation, without debt attached to it, the amount of interest that has to be paid each year. And so I say that all economic questions should be studied from the standpoint of the consumer, for the consumer's interests are those of the human race, and in the long run the consumer will be master.
So there is nothing -wrong with consumption. Production should be divided into three parts -machines, equipment or plant, and production by hand. Then you have labour with which to operate, supervise and maintain that plant, and you have raw material to use in your production. In the system of production there have been great changes in the last fifty years. In early history there was no doubt what production was for, because it was consumed almost as soon as it was produced. Conditions to-day, however, are different. The idea now is that production is for money, and production and consumption have become divided. The labour end of production is playing a lesser and lesser part as time goes on, because to a great extent the machine is taking the place of the worker. Something will have to be done whereby the machine which takes the work from the worker, and produces the wealth the worker would otherwise produce, must provide for the worker who has been deprived of the opportunity of producing that wealth.
There is a somewhat different problem in connection with raw material, and in some countries the problem is serious. In Canada we are most fortunate in having an abundance of raw materials, and for the benefit of succeeding generations we should be careful how the raw material is distributed. So I say, Mr. Speaker, there is nothing wrong with production, and there is nothing wrong with consumption.
But when we come to distribution, we find the greatest problem. This was emphasized again and again during the debate. Here is where we come up against what connects consumption with production, the final link between them. The purpose of all production is consumption; there is no doubt about that.

The Budget-Mr. Needham
If production and services were purchasing power, there would be no poverty in Canada; but it is the lack of this purchasing power which is the reason for many factories standing idle, and for goods being piled up, and people on relief. As I said a little while ago, this purchasing power can be withdrawn, and to a great extent between 1930 and 1934 it was withdrawn.
We listened this afternoon to an address by the hon. member for Yukon (Mrs. Black) in which she pointed to the tremendous wealth which the Yukon has produced, and the expenditures which had been incurred in that territory. But when she referred to the condition of the people there we had cause to wonder where that wealth had gone. And the same with province after province; what are we going to do about it?
I find that in 1934 Tasmania appointed a committee of their legislature to inquire into and report on subjects which I shall set out in a moment or two. These are matters we should consider. We ought to be familiar with what steps are being taken in other places to solve this serious problem. If we took the time to find out what others are trying to do, and followed the success or otherwise with which they had met, we would have a guide. The committee were to report on the following:
(1)	Whether the people are being prevented by any removable banking or financial circumstances, factor, law or condition from possessing, consuming or utilizing and enjoying the increase of wealth, or the actual increase of production over the last thirty years. And if so, the cause, and what steps should be taken to remedy it.
(2)	All matters and things pertaining and incident thereto.
The committee held meetings, examined witnesses and found that there had been great increases in actual production. They found that this increase had come with machines and fewer workers; that displaced workers were left without incomes, and that those working had lower purchasing power than in 1907; that small retailers and firms were driven out of business, and were taken over by monopolies closely identified with banks and financial institutions.
The committee's findings are as follows:
That the people are being prevented from possessing, consuming, utilizing and enjoying the increase of wealth or the increase of production over the last thirty years; that the cause of this shortage of purchasing power in the hands of the people can be effectively remedied only by,-
1.	Restoring to the sovereign community of effective control over money in all its forces;
2.	To establishment by parliament of machin-

ery which would secure regular equation between the community's production and the community's purchasing power.
That is one problem upon which we need to concentrate. We must find the equation between production and consumption. The report of the committee continues:
The opinion of the committee is that the government should control all forms of money and equality of production and purchasing power. This should be attained and maintained right through.
That is what was promised during the last election campaign in Canada. I am going to make an appeal to the Minister of Finance, because I can remember when thirty years ago west, east, and north from the homestead at Willowbrook he electrified the whole countiyside with his ideas on conditions as they then existed, and his predictions of what would come if those conditions and that system continued. He stated then that it was the duty of the federal government never to allow a shortage of legal tender money to exist; that if such a policy was permitted, debts would accumulate that never could be paid, and interest would eat up the new wealth faster than it could be created; that we would be poorer in the next twenty-five years than we were at that time. He has the chance now to make good his contention of years ago. I want to assure him that I am behind him to the utmost of my ability in every move he may make for the welfare of the citizens of this country.


Mr. G. T. PURDY (Colchester-Hants):: Mr. Speaker, twice have I listened to the hon. Minister of Finance (Mr. Dunning) deliver his budget speech, and twice have I gone away filled with pride and thankfulness that in 1935 the Hon. Mr. Dunning was prevailed upon to reenter public life. We of the mari-times are proud that he chose a maritime riding for his seat. Again history repeats itself

a wise man comes from the east.
I voted against the amendment of the right hon. leader of the opposition (Mr. Bennett) not solely because I was true to my leader and to my party, but because I felt that it ill became the party of which the right hon. gentleman is the leader to try at this early date to embarrass this government regarding a problem which the last administration tried to solve for five years, only to leave it in far worse shape than they found it, and particularly when it has been clearly demonstrated that the present government is making substantial headway in its endeavours.

The Budget-Mr. Purdy
If a further amendment had been introduced against the government's wheat policy, I would have opposed it because I feel that in this matter the government is acting in the best interests of the taxpayers of Canada. When friends to my left try to make political capital out of this matter in their particular sections of the country they show little appreciation of what Canada has done and is doing for the west. It seems to me that this move is in bad taste, and my suggestion is that their short-sighted policy will have repercussions even in their own districts.
The other night the hon. member for Royal (Mr. Brooks) took occasion to refer to the Canada-United States trade agreement. He gave certain figures in connection with exports from the maritime provinces, and his conclusion seemed to be that the agreement had been of no use to the people of the maritimes. I have before me a table showing the exports of twenty-four of the principal items dealt with in the agreement for the years 1935 and 1936. I find that the value of the total exports of these twenty-four items in 1935 was $1,933,429. In 1936 the exports had increased to $3,796,885, or almost double. Yet the hon. member dares to say that an increase in trade of that proportion is of no benefit to the maritime provinces. Apparently he looked up what he had said a year ago and realized that he would have to show that he was right at that time, when he said that such a trade agreement would be of no benefit to us. I place the figures on Hansard and he can read for himself.
The hon. member claimed that the increase which has taken place in the exports of lumber to Great Britain from the maritime provinces since 1933 was due to the Ottawa agreements. I should like to place on Hansard certain figures I obtained from the Bank of Canada showing the average price in Montreal of the pound sterling for the years 1932 to 1936 inclusive. These are as follows:
1932		$3-9801
1933		 4-6073
1934		 4-9891
1935		 4-9267
1936		 4-9745
If the hon. member will note the increase in the average price of the pound sterling, he will see that the largest increase occurred at the same time as the increase in our exports of lumber. The increase in the price of the pound sterling between 1932 and 1933 was equivalent to from $4 to $5 per thousand feet of lumber. While our lumber operators could not operate at a price of $15 per thousand feet alongside the ship, they could operate at a price of $19 or $20. The increase in
the price of the pound sterling was the reason for the increase in the exports of lumber from the maritime provinces. If my hon. friend can show me that the Ottawa agreements were responsible for the rise in the value of the pound sterling, or if he can show me that those agreements were responsible for the increased demand in Great Britain for our lumber, which has become quite marked during the last few years, I will agree with him that those agreements are all he said they were. Otherwise, I shall have to disagree.
I had intended to ask hon. members to bear with me while I attempted to change the trend of the discussion from the drought areas of the west to what I would term the forgotten areas of the east. However, as my time is limited I shall have to consign that part of my remarks to that place where so many good speeches have been consigned. While a large number of our population are engaged in fishing, lumbering and manufacturing, yet we have a large acreage of good farming land and with the same density of population as Sweden, a country very similar in climatic conditions and products, we could maintain on our land a population of approximately 1,000,000. To-day our farming population is somewhere around 230,000. I contend that in Nova Scotia we should have a forward policy to encourage the growing of more of our grains ait home. In passing, I should like to quote a statement published by the experimental farm at Nappan, as follows:
By utilizing home-grown feeds to a large extent, as outlined above, the cash outlay in rearing dairy heifers is kept at a minimum and the intelligent feeder can develop them properly to producing age at a minimum of expense.
I shall not deal further with agricultural problems this evening, but will confine myself to putting on Hansard certain facts and figures about our position. I should like to show what we have contributed to confederation and what we are doing to maintain our place in the dominion.
At the time of confederation our per capita national wealth was reported to be the highest of any of the four provinces which entered confederation. However, for the purposes of our argument I will say that it was equal. Yet in 1932, while the average per capita wealth of Canada was $2,413, that of Nova Scotia stood at $1,514, the lowest of any of the provinces. In spite of that fact, however, let me put on record the cost of unemployment relief of the Dominion of Canada as a whole, and to Nova Scotia, for the years 1930-1936 inclusive. In 1930-31 the
The Budget-Mr. Purdy



WAYS AND MEANS


[Stage Direction]
The house in committee of ways and means, Mr. Sanderson in the chair.
Progress reported.
On motion of Mr. Lapointe (Quebec East) the house adjourned at 10.25 p.m.
Monday, March 15, 1937