1938-03-22

SHOP CARDS REGISTRATION


[Stage Direction]
On the orders of the day:
Hon. C. H. CAHAN (St. Lawrence-St. George):: May I ask the Minister of Justice (Mr. Lapointe) whether he has yet obtained the opinion of the officers of his department with regard to Bill No. 22, an act respecting the registration of shop cards by labour unions, as to whether the proposed act is intra vires of the parliament of Canada?


Right Hon. ERNEST LAPOINTE (Minister of Justice):: Yes, I have, and I am going to hand the document over to my hon. friend the Secretary of State (Mr. Rinfret).


Charles Hazlitt Cahan: Has the minister any objection to telling us the purport of it?


Ernest Lapointe: The
opinion is that the act is valid.



DUTCH ONIONS


[Stage Direction]
On the orders of the day:
Mr. F. C. BETTS (London):: I should like to ask the Minister of National Revenue (Mr. Ilsley) a question of which I gave him notice a few minutes ago by telephone, not having had an opportunity to advise him earlier.
The American market is flooded at the present time with Dutch sets of onions which are being offered in this country at a cent and a half a pound. The cost in Canada is six cents a pound. I would ask the minister whether, having regard to the fact that this particular crop has a value in western Ontario alone of some $200,000, the government is

Japanese Immigration
prepared to impose the dumping duty, as was done in 1931, by adding four and a half cents a pound to the invoice cost?


Hon. J. L. ILSLEY (Minister of National Revenue):: An application somewhat similar to my hon. friend's request was made by the Canadian Seed Trade Association very recently and I can only say to my hon. friend, what was said to them, that the department has asked the Department of Agriculture for a report as to surplus stocks now in Canada. When that information is received the application will be given consideration.


Frederick Cronyn Betts: May I ask another question turning upon the last one. Does the minister appreciate that this is a matter in which very speedy action will have to be taken if any result is to ibe achieved?


Some hon. MEMBERS:: Order.



POWELL AND UNWIN CASES


[Stage Direction]
On the orders of the day:
Mr. J. H. BLACKMORE (Lethbridge):: Many hon. members of this house and hundreds of thousands of Canadians outside rejoiced last evening when it was announced that at six o'clock Mr. J. H. Unwin was released from the penitentiary. The department's delicacy in choosing a time after the polls were closed and before the results could be known was noted and appreciated. I beg the minister's permission to bring to his notice the name of G. F. Powell, who was a fellow sufferer with Mr. Unwin, and to point out that Mr. Powell is a British subject, a citizen of Great Britain, our motherland; that he is here upon the invitation of the people of the British province called Alberta; that his record prior to his coming to Canada was without blemish, and that his freedom is much desired by millions both here and overseas. I respectfully ask the Minister of Justice (Mr. Lapointe) if he could give us some encouragement touching the case of Mr. Powell.


Ernest Lapointe: Mr. Speaker, the case of Mr. Powell will of course be dealt with on its merits, and independently of the case of Mr. Unwin. As my hon. friend knows, his sentence was for a longer period, six months, while the sentence on Mr. Unwin, by the same judge, was for three months. I may assure my hon. friend, however, that all his representations are being fully considered. I should like if possible to meet his views,
but of course any action taken must in the first place serve the ends of justice.



MARIEVAL, SASIC, HALFBREEDS DISTRESS OF PEOPLE IN DISTRICT NORTH OF BROADVIEW AND TRIBUTARY TO CROOKED LAKE INDIAN RESERVE

[Stage Direction]
On the orders of the day:
Mr. E. E. PERLEY (Qu'Appelle):: I
should like to direct a question to the Minister of Mines and Resources (Mr. Crerar). It is based on a report that I have received setting out the unfortunate situation facing the halfbreeds of the Marieval district north of Broadview and tributary to the Crooked Lake reserve. The report states that these people have no land and no prospect of employment. Such relief as they have been receiving will be cut off at the end of March, and they claim that they are now facing starvation. Has the minister been made acquainted with this situation, and will he have an investigation made and action taken?


Hon. T. A. CRERAR (Minister of Mines and Resources):: I have no information on
the question which the hon. member has raised. I might remind him that the halfbreeds are not a responsibility of the federal government. They are wholly separate from and outside the federal government's obligation to Indians, and are in the same category as any other class of citizens who may be in need.



JAPANESE IMMIGRATION


[Stage Direction]
On the orders of the day:
Mr. A. W. NEILL (Comox-Alberni) r Might I ask a question of the Prime Minister (Mr. Mackenzie King)? I am sorry I have not under my hand the appropriate Hansard, but no doubt the matter is within his knowledge. Some weeks ago, in answer to a question from, I think, the hon. member for Vancouver South (Mr. Green) he announced the setting up of two bodies, one a board of review and the other a committee, in connection with the oriental situation in British Columbia^ We have had an announcement of the personnel of the British Columbia body. I should! like to ask now whether the Prime Minister can give us the names of what I think he called the interdepartmental committee that was to be appointed here, and whether he can tell us when they will be appointed.
Right Hon. W. L. MACKENZIE KING (Prime Minister):: The interdepartmental com-
Electric Power Export

mittee was appointed some time ago, in fact before the board of review, as it is termed, was appointed. It is composed of officials of different departments of the government. I may happen to miss one or two in enumerating them, 'but as I recall at the moment there is on the board a member of each of the following departments:	External Affairs,
Mines and Resources, National Revenue, National Defence, Justice, Labour, Trade and Commerce. The gentlemen who represent these different departments are officers of the departments who are most familiar with the questions which the interdepartmental committee has to consider.


Mr. NEILL:: The Prime Minister is not prepared to give their names?


William Lyon Mackenzie King: If my hon. friend had told me he was going to ask this question I should have been very pleased to give the names. I shall do so to-morrow, if that is his wish.



ELECTRIC POWER


[Stage Direction]
The house resumed from Thursday, March 17, consideration in committee of Bill No. 21, to amend the Electricity and Fluid Exportation Act-Mr. Mackenzie King-Sir Eugene Fiset in the chair.
Section 3 agreed to.
On section 4-On export of power.
Ernest Lapointe: That section 4 be amended by adding the following subsection:
(4) Every such private act shall, unless it is otherwise expressly provided therein, be read and construed as including provisions that,
(a)	the quantity of power to be exported thereunder shall, notwithstanding any provision therein fixing the quantity of power to be exported, be always limited to the surplus power in excess of that required for distribution for use in Canada;
(b)	the power exported shall not be sold [DOT]outside of Canada at a price less than the price of power produced and sold under substantially similar conditions for use in Canada;
(c)	the said private act may be repealed by proclamation of the governor in council, at any time, upon such notice as the governor in council shall prescribe, or, if the governor in council is satisfied that the conditions imposed by paragraph (a) or (b) of this subsection are not being complied with, without notice.


Mr. BENNETT:: All licences for the export of power granted prior to the passing of this bill will expire each year on March 31, whereas power which might be disposed of under a

private act would be for a term fixed by the private act. I should think that in all conscience this bill should provide that every private bill shall be subject to the control which we now exercise, namely, that the licence shall expire on the thirty-first day of March. The private bill should be based upon the same principle as that which has governed us heretofore in granting such permission to export power. The other evening the Prime Minister brought forward the Canadian Power Company case as indicating a licence to export power. I confess that at that moment I was not aware of the fact that this was the present Ontario Power Company, but that private act did not contain in any part of it a provision for the export of power. It merely provided that they could carry the wires across the bridge and connect them up; in no place in that act did it say that any power was to be exported. So far as I have been able to find out, nowhere in the Canadian statutes is there any private act that authorizes the export of power.
In support of that position all you have to do is look at the white book, where you will see that this very company has had to take out its annual licence, and the footnote indicates that the rights of the old Canadian Power Company under chapter 120 of the statutes of 1887 were acquired by the Ontario Power Company, the rights of that company in turn being acquired by the hydro-electric commission. As I say, the provisions of that statute did not contain a single reference to the export of power, but they did contemplate the connecting up of the Canadian company with the American company, and it provided that they might make an arrangement to work the said electric light or other power jointly. But they were very careful not to say anything about the export of power.
Should we not maintain a measure of uniformity in connection with this matter? Here are the licences for the export of power, at pages 97 and 98 of the white book. Those licences, as I say, are allowed to run for only a year and expire, I repeat, on March 31, as I understand it. But they are renewable in the terms of the licences, in the absence of any understanding or event that might make it undesirable so to do. I put this point to the Minister of Justice. Yesterday the United States declared that they do not desire to import power from Canada. That relieves this situation very greatly. So far as this bill is concerned it can have no bearing in relation to the United States, and I do not know of any other country to which we would export power. Under the circum-

Electric Power Export
stances is it desirable to have one statute under which licences expire on the 31st day of March in each year and, assuming that conditions changed, another set of exports or sales in connection with which the term is fixed by private acts? I think not. I strenuously object to the export of a part of Canada being provided for in a private act brought in by a private member. The very theory itself is contrary to our system of government; that is, that a private member should introduce a private act by petition under which a part of this dominion may be exported out of this country, fixing in the terms of his bill-not the general act-the provision as to how long this is to be done.


Ernest Lapointe: It is parliament that does that.


Richard Bedford Bennett: Of course parliament
passes every private act.


Ernest Lapointe: It is not a private member who will decide on that.


Richard Bedford Bennett: But the private member introduces the measure and indicates to the house his idea as to what should be done; and that bill, as it is presented to the house, necessarily will contain a statement as to the period of time during which that power can be exported. If it is important that we should have these other provisions in what you might call a regulated plan, then is it not more important still that we should have a period of time fixed within which these exports can be carried on, especially having regard to the observations made by the utilities board of New York, and the order in council passed in 1914 against the acquisition of vested rights in connection with any such exports? It may be purely academic now in view of the dispatch from the United States, but obviously should not the standard be set in the enabling statute and not in the private act?
I mention that because, I repeat, in the act as it will leave this house we shall have provided that the sales now authorized shall be renewed only from year to year, unless, in view of the dispatch from the United States indicating that they do not desire to import power from Canada, these licences will not be renewed. In any case it is distinctly provided that there is no acquisition of a right by reason of the licences now in existence. I say this in no contentious or controversial sense, but I do think that in order to prevent the possibility of a vested right being acquired under any private act fixing a period of time during which power may be exported, it would be desirable in the enabling statute, if I might call this such, not only to provide what we
have provided with respect to surplus power, the price at which it can ibe sold, and the punishment or penalty or sanction, if I may use the word, for disregard of the terms of the private act-loss of the right to export; we should do also what we do in the Bank Act or the Railway Act or the Trust Companies Act or any of the other acts which deal with the essential point of the period of time, and indicate in the standard enabling act, which this will now become, the period during which the export could take place. For, as I say, on the one hand we will have a licence and on the other a private act, both authorizing the export of power. One will be for the term fixed by the private act and the other will be for the term fixed by the enabling statute, which makes it clear beyond peradventure that no vested rights are being acquired and that on the 31st day of March in each year there must be a termination of the right to export; and that a new right arises only as it is confirmed by the renewal of the licence, or, in the case of a private act, as might be thought desirable by reason of there being no controversy as to surplus power or price or as to the performance by the selling company of all the obligations placed upon it by the statute.


Ernest Lapointe: Of course the suggestions made by my right hon. friend relate rather to a question of policy. I may say that the three alternatives have been considered in the preparation of the bill, namely the one which is now before the house, leaving it to parliament to fix the number of years during which this permission to export will be granted, but with subsection (c) of section 4, which allows the governor in council to repeal it at any time.


Richard Bedford Bennett: Upon giving notice.


Ernest Lapointe: Upon giving notice, because of course private interests may be affected, and it is only fair that notice should be given.


Richard Bedford Bennett: There is no objection to that.


Ernest Lapointe: But if a repeal is being made because of the failure of the grantees to act according to the provisions of the bill, then it will be without notice- namely, if it exports power which is not surplus power, or if it charges a lower price in a foreign country than is charged to a Canadian consumer.
Perhaps I should read subsection (c) again:
The said private act may be repealed by proclamation of the governor in council at any time upon such notice as the governor in
Electric Power Export

council shall prescribe, or, if the governor in council is satisfied that the conditions imposed by paragraph (a) or (b) -
That is, the surplus of power and the price to be charged-
-of this subsection are not being complied with, without notice.
As it is, we leave to parliament the discretion as to the number of years during which the bill will be in force.
Then we considered another alternative, which would have been adding another paragraph, namely paragraph (d), in these words:
Subject to the provisions of paragraph (c) in this subsection-
The one I have just read-
-the said private act shall remain in force for a period of five years from the date of the commencement thereof.
This would have fixed the time limit. After five years the law would have disappeared altogether. Then we considered another alternative, the one which my right hon. friend opposite seems to favour-if I may have his attention.


Richard Bedford Bennett: I am listening carefully.


Ernest Lapointe: It would be paragraph (d) and in these words:
Subject to the provisions of paragraph (c) of this subsection the said private act shall remain in force for a period of one year from the date of the commencement thereof, but may be extended from year to year by proclamation of the governor in council for four yearly periods of one year each, but not so that the said act shall in any case remain in force for more than five years from the date of the commencement thereof.
There again it would be limited to five years, renewable by proclamation every year.
But as I have said, this is rather a question of policy. I must say-and I think I am right in saying this-that the government is not linked with any one of those methods, and if the committee favours the suggestion of my right hon. friend opposite I think we would be quite willing to require the new proclamation every year to keep the act in force for a certain number of years.


Richard Bedford Bennett: The white book indicates that in 1907 licences were issued to the Canadian Niagara Power Company of Niagara Falls, Ontario. It is stated that the transmission line crosses the boundary at or near Fort Erie and Niagara Falls, Ontario, the licence for firm power starting in 1908 with 39,165 kilowatts and rising to 45,000 kilowatts in 1938. Then there is a note which says:

These companies were under the control of the electric power controller for these years, and licences were not issued by this department. The amounts shown are those recommended by the power controller.
Then for the same company, and with the same statement as to transmission line, dealing with surplus returnable on demand, the licence was issued in 1925, eighteen years later, and began to operate in 1926 with 20,000 kilowatts.
Then we turn to page 98, and we find mention of the Ontario Power Company of Niagara Falls, Ontario. It is stated that the transmission line crossed the boundary at or near Niagara Falls, Ontario. The date of the original licence was November 9, 1907. That was for firm power, beginning with 45,000 kilowatts, and is still for that amount, although at one time it rose to 60,000 kilowatts, and then fell to 37,300 kilowatts in two years. Note (a) is as follows:
This company was under the control of the electric power controller for these years and licence was not issued by this department.
That was during the period of the war, in the years 1918 and 1919. Then, note (b) states:
The Electrical Development Company and The Ontario Power Company were purchased by the Hydro-Electric Power Commission, and a licence equal to the sum of the licences of these two companies was obtained by the Hydro-Electric Power Commission.
That is one for 80,000 kilowatts, the first licence having been issued in 1925. It has now, in 1938, fallen to 45,000 kilowatts, and the Hydro-Electric Power Commission of Ontario, at another spot near Queenston, has the right this year to export 80,000 kilowatts.
These are the two relevant licences in the province of Ontario. Of course, there is a licence in New Brunswick for 2,500 kilowatts; there is another one for 2,500 kilowatts, and there is one in Ontario, at Fort Frances, for 5,500 kilowatts. The point I should like to make is that under the terms of licences the hydro commission now has, it can export its power only for one year, the licence expiring on the 31st day of March in each year. There is no right of renewal, qua right, but it is renewed if the power is not required, and the company has conformed to all the requirements of the department.
Now comes the next point: If you grant a licence for five years, not stating how to divide it up, you have created a vested right, unless you add another paragraph, such as I suggested the other day, that no renewal of licence or any other act shall create a vested interest under this act. That, I believe, is important in view of what was said-and even

Electric Power Export
in the dispatch which we had yesterday, there was the same thing. What are the grounds upon which the Secretary of State of the United States has placed his refusal? He says: "We do not desire to import power into the United States". First of all he refers to the protection of his power market. That is number one. Then, as number two, he refers to the undesirability of importing power from a foreign country, and thirdly, he casually mentioned the question of defence. On those three grounds the matter is put, and the opinion of Attorney General McReynolds is used as a basis, since the repeal of the Burton Act.
Now we are going to have the same hydroelectric commission apply for a private act in this parliament?-for they are the only applicants at the present time for the export of power. That private act may contain a provision for a term of years. But the licences they will have at Queenston and Niagara Falls will expire on the 31st day of March in each year, so that no vested right can arise, we have made it so clear as to be beyond the possibility of doubt. If, however, we pursue the course suggested in connection with a private act, what we have done-whatever language we may use, if we use a term of years at all, unless we negative it by express language-is to create a vested right.


Ernest Lapointe: In favour of whom?


Richard Bedford Bennett: In favour of the hydroelectric commission.


Mr. EULER:: We reserve the right to
cancel at the end of another year.


Richard Bedford Bennett: The Minister of Trade and Commerce (Mr. Euler) grasps at once the point I am desiring to make, that is, that the licence has to be uniform. The private act, which is a licence, should conform, so far as uniformity is concerned, to the licence which is being maintained by this statute. Remember, this statute maintains the licence feature. There must be no misunderstanding about that. The language of the section was redrawn the other evening to make it clearer. At Queenston there is the question of 80,000 kilowatts and at Niagara Falls, 45,000 kilowatts; in both cases the licences expire on March 31 of each year. But you have another licence in the form of a private act, so called, which authorizes the export, we will say for the sake of argument, of 50,000 kilowatts over a period of years. That is a creation of a vested right. In order that there may be uniformity we should see that the right to export power under this private act shall expire on March
31 in each year, but may be renewed, by the governor in council if you like, from year to year, just as the main act now says with respect to Queenston and Niagara Falls power.
We would thus have uniformity at Fort Frances, in Maine, at Niagara Falls and at Kingston. All would be in the same position. We now have the anomaly of having a private act authorizing for a period the export of power from this country without having the safeguards that are established by the general statute. I am not saying this in any captious sense, because so far as I am concerned the matter is of complete indifference. I am putting it forward in the public interest. There should be uniformity, and the Minister of Justice has indicated that two or three alternatives were considered. All I suggest is that you combine the three of them. First, you would provide for no period at all. The private act should make it clear that no period is being contemplated, the same as is now the case with Niagara Falls power. Remember we are dealing with exactly the same people. The only applicants we have before us are those who have the licence for the power at Queenston and Niagara Falls. Let us give them their licences in the same terms. They have not complained; they have been satisfied,
Then there are the two provisions that have been added, namely, one with respect to surplus power and price, which I think is admirable, and one with respect to the right to repeal the statute by proclamation. That is such a vast extension of the power of the governor in council that I could hardly see my learned and right hon. friend, the Minister of Justice, make the statement without choking, having regard to his attitude in times past with respect to the abuse of power by the governor in council.


Ernest Lapointe: We have it already.


Richard Bedford Bennett: It was against that that the Prime Minister the other day quoted the authqrity of Sir Robert Borden and others to the effect that it was a terrible thing to contemplate the possibility of the governor in council doing it.


Ernest Lapointe: We have too much power now.


Richard Bedford Bennett: We are suggesting that
it might be dealt with in this way. In any system of responsible government some power must be given to the executive to deal with certain phases of the matter. I think you could meet the situation with a combination of the three. First, provide that any
Electric Power Export

authority to export power under any private act shall expire on March 31 in each year. Second, such right may be renewed from year to year, just as we have it in the principal statute. Third, nothing in this contained shall confer any right. All these the minister has in his mind in the provisions he has added. There is not one suggestion not contained in the combination of his three. If you combine the three of them, everything is there. Possibly I am a little stronger on the question of the acquisition of a vested right and the exact language, but if you combine the three I submit you have everything. It is in the public interest to maintain uniformity in all grants to export, whether they be for the company at Queenston, which is the same company, or the one at Niagara Falls or here.
That is the point I desired to make. I do not know whether I have made it plain, but I wanted to clear up beyond any per-adventure the statement to which reference was made the other evening, that the Canadian Power Company statute does confer any right to export. On the contrary, it does not. What is more, they had to take out a licence and they have taken out a licence. The statute changing the name to the Ontario Power Company was chapter 105 of 1899, and that company was acquired by the hydro electric commission. The commission has taken out a licence from year to year. That is all I desire to say. Perhaps I could crystallize it into a really clear statement, but I think the point is quite apparent to the Minister of Justice.


Mr. STEWART:: The record shows clearly that notwithstanding the fact that licences have been issued annually, and that they contain restrictions and provisions for cancellation, after having been in force for years, there has grown up in the United States the contention, notwithstanding all this, that vested rights may be acquired. If we pass an act of parliament and say that power may be exported for five years instead of one, surely we will be giving that contention just five times the weight which it has under the existing statute. That is the serious matter in this whole proposition. We should guard in every way against the possibility of the contention arising that there is a vested right. This should be done to prevent any international difficulty. It does seem to me that uniformity should exist in connection with these licences, and the course outlined by my leader provides for this. It would not require much change in the drafting of the amendment to secure this result, and I think it is most desirable.


Mr. SLAGHT:: Mr. Chairman, I should like to discuss the provisions of this section very shortly before it is passed and call to the attention of the committee some matters which I think will -be helpful in determining in just what way we should leave section 4, when viewed in the light of the amendments and the original draft.
Hon. members will recall that the section provides, first, that in future power exportation can be had only by an applicant coming to parliament with a private bill instead of as heretofore; second, that there must accompany the application an order in council from the exporting province-in the case of the hydro commission it would be Ontario-and where the power is generated wholly or in part in another province, there shall be also an order in council from the generating province. It is the intention of this amendment, I think quite properly, to see to it that both such provinces shall first express their approval of authorization to any private person, corporation or public utility to export power. I desire to align myself with the idea put forward by the leader of the opposition, (Mr. Bennett) namely, that we should provide if possible that, once by private act parliament has authorized a new and further export of power, thereafter there should be power by annual licence to continue and renew the export which parliament has once approved. It would be folly to ask any proposed exporter to come back year by year to parliament for a private bill to continue exportation. The proposed amendment sees fit to preserve by order in council the right to renew all existing licences. I venture to suggest that the existing licences when originally issued were not examined as to their possibilities for good or evil with anything like the pains that any application for a right to export power, coming forward by way of private bill, would now receive. As I understood the suggestion of the leader of the opposition, it was that after parliament had warranted an exportation, and only for one year, thereafter such exportation shall be in the same plight as the licences at present existing.


Richard Bedford Bennett: That is my suggestion.


Arthur Graeme Slaght: Personally I am fully in accord with that.
In view of the communications received yesterday and the great bearing they have on the matter before the house it is necessary to look a little more closely into the provisions of section 4. The views of the president of the United States on a subject of international importance such as the export of power should

Electric Power Export
receive from us in this parliament the utmost consideration and respect. To my mind we should so treat the position that he takes- knowing, as he says, that in the form of the bill now before us the matter was under consideration by this parliament, which means that he has undoubtedly studied or had reported to him the purport of our bill and the debate which has taken place in the last two weeks, with the observations of the learned gentleman opposite, as to which I shall have a word to say in a moment. Having confided to us his reasons of state for indicating that he would not permit the importation of power regardless of whether we in this country authorized its export, I say that those observations and those reasons must receive the utmost consideration from this parliament.
May I be permitted a personal word which, I believe, has a bearing and will assist in the solution of the problem as to what we should do with section 4 and the appropriate other sections that follow? It is this. The president of the United States, and the secretary of state, Mr. Cordell Hull, who join in the communications received and tabled last night, are in my humble opinion the best friends that Canada has in the United States of America. I believe the history of the last six months has shown to anyone who has followed it that their policy of the good neighbour and of good-will towards this country-and I will not pause here to review the various incidents, such as the visit of Lord Tweedsmuir to Washington, the visit of Mr. Cordell Hull to Ottawa and Toronto, the Chicago speech of the president, and all the history of the last six months, in which the Prime Minister of Canada has played no unimportant part-these things have done more to cement in this critical time the friendly relationships between Great Britain and the commonwealth of nations in the British Empire and the Unites States of America than any series of incidents since confederation. That perhaps is an added reason why we should deal most carefully with legislation for the export of power.
Since the first application early in January by the hydro commission of Ontario, backed as it was by the premier of Ontario, for leave to export power, there has been a deliberate and organized effort by the Conservative party of Ontario and the Conservative federal party to kill the application. Why do I make that observation? An hon. member suggests that he is of easy mind now; the matter has no significance, and so on. But the hon. member for Dufferin-Simcoe (Mr. Rowe), who I am very sorry to observe is not here
to-day, and who is the remote-control and absentee-leader of the Ontario Conservative party, opened the attack upon the hydro application for the export of power in a speech which he made to the Parkdale Women's Conservative Association in Toronto on the evening of January 19 last, some two months ago. He vigorously denounced the hydro application which had been lately made for the export of power, and gave reasons for his opposition; and he has been consistent in his denunciation ever since. Whether the ladies of the Parkdale Women's Conservative Association fully appreciated the effect of his denunciation it is not for me to suggest.
Then we have the leader of the opposition making, in his speech several weeks ago on the address in reply, another bitter and perhaps back-handed attack upon the export of surplus power by the hydro commission. The absentee leader of the Ontario party, the hon. member for Dufferin-Simcoe, followed it up in a speech in Lambton during the present by-election, on March 7. If he is correctly reported, he again condemned hydro in their application for the export of power and made certain very choice and delicate observations with regard to the premier of Ontario and his entire cabinet because they favoured the export of power. Hon. members had the opportunity of listening the other day to a very refined and eloquent speech by the hon. member for Dufferin-Simcoe. It was something like the Lambton speech but not quite so loose-tongued as his platform utterances, because, if correctly reported, in his Petrolia speech of March 7 he said of the Ontario general election last October 6:
I have lost too many heats in horse races to make apologies. We did not have speed enough to keep up with that caravan of racketeers, but there is another day coming.
In other words, the premier of Ontario, who dared to export 110,000 horsepower of surplus power, power that would otherwise run over the dam, is the leader and head of a caravan . of racketeers. I am afraid the hon. gentleman forgets that very recently the people of the province had an opportunity to choose between his distinguished self and him whom he indicts as the head of a caravan of racketeers-and they chose the latter by an overwhelming majority. However, I must not get away from my subject.


Miss MACPHAIL:: Electors sometimes
make mistakes.


Arthur Graeme Slaght: The bon. member is quite right; I believe the electors made a great mistake in 1930, for instance, if the hon. member will cast her mind back to that year.
Electric Power Export

But let me continue. After we had this, as I term it, deliberate cabal between the party in Ontario or the remnants of it and the gallant little band of thirty-eight comprising the federal Conservative party, what further evidence is there that they made up their minds to kill the application of -the hydro from Ontario?


Mr. HEAPS:: Were there any Liberals who opposed the deal?


Arthur Graeme Slaght: I have not yet heard of any Liberals who would be opposed to the deal, but there may be. Perhaps the hon. member has information that I am not possessed of.


Agnes Campbell Macphail: Are there any Liberals having anything to do with the export of power?


Arthur Graeme Slaght: Yes, madam.
Some hon. MEMBERS. Oh, oh.


Arthur Graeme Slaght: The hon. member will pardon me; I did not say that in any light vein. But answering the hon. member, if the question has any application, and I do not see that it has, I understand her to invite me to state whether any Liberals had anything to do with the export of power.


Agnes Campbell Macphail: But don't go back to Sir Wilfrid.


Arthur Graeme Slaght: Perhaps she does not like an illustrious illustration, such as Sir Wilfrid Laurier, who had to do for a long period of years with the export of power under seventeen different licences year after year. The Prime Minister of Canada, in his former governments, also had to do with the export of power year after year; and, if I may complete the idea the hon. member perhaps has in her mind, the Right Hon. Sir Robert Borden in his day, the Right Hon. Arthur Meighen in his regime, and the present leader of the opposition in his five years, all endorsed the principle of the export of surplus power to the United States. The leader of the opposition, the hon. member for Leeds, the former Minister of Trade and Commerce, to whom I have to say a word-I am sorry he is not here to-day-all sat for five years, in which time they issued seventy-five licences for the export of power to the United States. Yet, if you believed what you hear on the hustings, and some of the indictments delivered in the debate on this subject, you would think that the principle of the export of power was something new for this parliament to consider. I wonder what the leader of the opposition was thinking when he voted in council, along with the gentlemen I have

named, to license seven different corporations year after year for the export of power. In those five years they exported at least 300,000 horsepower annually, or 1,500,000 horsepower in that period. That is what they exported to the United States. Were they concerned at that time? Did their investigation of those applications lead them to believe that there would be a revolution in the United States if they exported power under these annual licences? Certainly not. We find whipped up for the first time in the last two months, both in the country and in this house, an absolute attack by a cabal, as I put it, against the export of power because, in my humble view, the applicant for the export of power was the young premier of the province of Ontario, who, in the election of 1935, travelled from ocean to ocean and took a prominent part in turning these gentlemen out of office and walking them across the floor to the opposition where they now sit. And for no other reason that I can find in examining their speeches. There was no difference between the proposed hydro application, not a jot of difference, and the seventy-five applications for the export of power which by order in council they approved of.


Richard Bedford Bennett: One must correct a misstatement. There were no applications granted; there was nothing but the renewal of existing licences.


Arthur Graeme Slaght: Quite so.


Richard Bedford Bennett: Let us get it straight.


Arthur Graeme Slaght: If my right hon. friend believed that the renewal was wrong or evil, that it had all the evils that might attach to his condemnation of this present hydro application, is he the type of man to have renewed the licences? I give him credit for being otherwise. If he believed that they were wrong and ought to be stopped, he would have stopped them. But he did not stop them because he believed that they were proper renewals, that the United States should have the right to buy that power, and that the various provinces of Canada that desired to export surplus power should have the right to exchange it for American dollars.
There has been a good deal of misapprehension about the facts connected with the export of power for thirty years. May I correct one or two of them. We have exported power under twenty-eight different licences for thirty years, consistently and continuously, and increasing up to some ten or twelve years ago when it remained practically stationary. During that thirty years we discontinued the export of power that had been previously

Electric Power Export
going on under eleven different licences. There was no revolution in the United States when we discontinued that export. There were none of the terrible consequences that hon. members on the other side have portrayed with regard to the hydro applications. No; because it was recognized and has been down to the present time that the export of power from this country should proceed.
In connection with the hydro application, after investigating the matter, I undertook to sponsor the proposal to the extent of having the bill introduced as a private measure when the legislation so required. I looked into it and believed on the facts presented to me that it was proper so to do. Orders in council have been passed by the provinces of Quebec and Ontario reciting solemnly that the power which it is proposed to export is purely surplus power not needed in either of those provinces. The hydro commission of Ontario is a quasipublic body; let me remind hon. gentlemen opposite of that. This is not a case of a private corporation coming forward for gain to fatten the pockets of its shareholders, and seeking to export this power for the purpose. The hydro commission, if you will examine the statute that created it, is the trustee for the municipalities and the people of Ontario, and the commission has no right to make a dollar's worth of profit out of any power that it generates and exports. Its duty is to generate power for the industrial needs of our people.


Agnes Campbell Macphail: And the agricultural too.


Arthur Graeme Slaght: I was coming to that. My hon. friend and I are in accord in these matters. Its duty is also to generate power for the agricultural interests of the provinces, interests whom I have the honour to represent in my district of Parry Sound. I am sure my hon. friend will not think that I am forgetting them. We must ask ourselves this question: Who was the applicant? As far as I am concerned, having undertaken, on the facts and the position as it then was, to sponsor and present to parliament for their consideration the application of hydro to export power, after analysing the reasons given by the president of the United States in the white paper given to us this morning, and in view of the definite statement that he does not desire more power imported into the United States, I cannot see that hydro could present in this house at this session in the present state of affairs a private bill applying for the export of power. I think all hon. members will agree with me on that. It would be an act of international discourtesy
now for the parliament of Canada to authorize the Ontario Hydro-Electric Power Commission to export 110,000 horsepower to the United States, immediately after reading a most dignified and courteous communication from the president of the United States that in the interests of his country he feels regretfully compelled to say to us that he could not now tolerate any increase in the export of power from Canada to that country. So let that point be made clear.
But I want to deal for a moment with some very vigorous denunciations, intended no doubt for me as the likely sponsor of a private bill, which fell from the lips of hon. members on the other side. It was said to be preposterous that by a private bill any member of parliament should have the right to decide the terms-the hon. member almost said "decide"

under which a private applicant should have the right to export power. Hon. members may not all know that the present head of the Ontario Hydro-Electric Power Commission is Doctor Thomas Hogg, who, I regret to say, is very ill just now. When he was appointed to the chairmanship of that great commission, which has assets of $500,000,000, the press of this country and the right thinking people by almost unanimous acclaim said that Doctor Hogg was a worthy chairman for the Ontario Hydro. He was appointed to office as an engineer for the commission under Sir James Whitney, the leader and colleague of my friend the hon. member for Dufferin-Simcoe of those days. All the higher engineers in the hydro organization-Mr. Jeffries, Mr. Dibblee, and three or four others who have had great engineering problems to deal with for hydro-were appointed by Conservative regimes. Doctor Hogg was elevated to the position of chairman by the Hepburn administration, and the premier of Ontario was commended by practically all members of both political parties for having made a non-political appointment.


Abraham Albert Heaps: He is a private ownership man, is he not?


Arthur Graeme Slaght: My hon. friend says so; I would not have thought it. My hon. friend's voice is a voice in the wilderness, the first in or out of the house. Let me point out that the first white paper published makes it clear that that non^political chairman-my friend may call him what he likes as to public ownership or otherwise, although I think it is quite unfair to Doctor Hogg-


Abraham Albert Heaps: Not in the least.


Arthur Graeme Slaght: That non-political chairman, in his report to the premier of Ontario,
Electric Power Export

said that there was an undoubted surplus of power which Ontario could not possibly use and that it was in the interest of the commission and of the two million people in Ontario to obtain permission to export. What should we have thought of a premier or cabinet in Ontario which, their skilled engineers having made that report, did nothing to secure the right to export that surplus power and bring 1,500,000 United States dollars into Canada for power which otherwise would be running over the dam and absolutely wasted?
I have reviewed briefly the vicious attack that was made in an attempt to kill the bill, and I was about to deal with the criticism that a private act is all wrong because there would be a great lobby; and that there was a great lobby behind this bill. The hon. member for Kootenay East (Mr. Stevens) was shocked at the idea of the lobby. As he put it, it was going to be almost irresistible to him; he would hardly be able to hold back. Let me say that since I undertook to sponsor this bill I have not asked a single hon. member amongst my friends on the other side or on this side, not a single member of the House of Commons, either to support or to vote for the hydro bill. One did not need to, because until the receipt of these documents last night the case for the export of power under the private bill which I intended to present was so strong, so impregnable, that in my view no hon. member who had the interest of his country at heart would have dared to refuse his consent.


Mr. THORSON:: Will the hon. member
speak for himself in that respect?


Arthur Graeme Slaght: Very well; I accept my
hon. friend's suggestion. I am only indicating my view as to the strength of the case for the export of power. I hope the committee did not understand that I had any view as to how my friend might or might not vote when he heard the facts.
Two or three hon. gentlemen on the other side of the house said they were utterly opposed to this export of power by hydro. They did not want to hear the facts, they could prejudge the case. They were "agin it." I should have thought they might have waited to hear the facts presented.


Agnes Campbell Macphail: Mr. Roosevelt did not wait, did he?


Arthur Graeme Slaght: Will the hon. member
consider what her question implies? Mr. Roosevelt had a very different problem to consider on behalf of his country from that

which We have to consider on behalf of Canada in the present application. Surely if the hon. member has read his statement she will realize that he made that very clean He said he was entirely sympathetic with the desire of the province of Ontario and the Dominion of Canada to seek a market in the United States for surplus power. That is the attitude Mr. Roosevelt took, after learning of the conditions here to such an extent as he did learn them. He made it amply clear that his attitude was based On an entirely different point of view, namely, consideration of the best interests of the United States.


Abraham Albert Heaps: If the facts regarding the
export of power were so irresistible, why did not the government grant the right to export?


Arthur Graeme Slaght: There is a perfect answer
to that, if the committee will permit me to state it. The matter was given some consideration when the hon. member for Leeds (Mr. Stewart) brought forward a bill. It was then determined, not that Canada should never export more power; but the bill passed this house unanimously, and only by accident, I am told, did not pass the senate. I do not know whether my friend was here then; I think that he was not-


Some hon. MEMBERS:: Yes.


Arthur Graeme Slaght: Was his voice raised then
in regard to the principle of having parliament deal with the export of power in future rather than continue the principle of having it dealt with by order in council? If he sat silent, as he does now, he gave tacit consent then. If I understand his psychology, had this government accepted either the Montreal Light, Heat & Power application or the subsequent ones from the Cedar Rapids Company or the hydro commission, and dealt with them by order in council, my hon. friend could not have got on his feet quickly enough to indict them for going back on the principle that this house had the sole right of control.
With regard to this bugaboo of a lobby, I think I owe it to the Ontario Hydro to call attention to the fact that they are a quasipublic corporation with no right to spend any money on any lobby. Their accounts are regularly audited. There has been no lobby that I know of for this bill. My friend the leader of the opposition dealt with that matter. I must confess-you may believe it or not-that I do not know the details of lobbies, but I venture to think that -the right hon. gentleman does.


Mr. SPENCE:: You look innocent.

Electric Power Export


Arthur Graeme Slaght: I hope I am not unfair if I suggest that for the many years he sat as a director of the Canadian Pacific Railway Company-


Richard Bedford Bennett: Entirely mistaken; he was never on the board.


Arthur Graeme Slaght: Then I withdraw.


Richard Bedford Bennett: Wrong again.


Arthur Graeme Slaght: Then as a gentleman who was zealous about the interests of that great corporation in the halls of parliament-


Richard Bedford Bennett: Then that statement
should be withdrawn.


Some hon. MEMBERS:: Oh, oh.


Richard Bedford Bennett: It is all very well to laugh.


Charles Hazlitt Cahan: That statement was entirely untrue.


Richard Bedford Bennett: I do not hold, nor have I held since 1926 or 1927, any interest, direct or indirect, in any Canadian Pacific security; and I never have, in this house or elsewhere, promoted the interests of that corporation beyond my public duty.


Arthur Graeme Slaght: Let me accept entirely the statement made by the right hon. gentleman and express regret that I was misinformed as to the facts.


Charles Hazlitt Cahan: I rise to a point of order. We have had an address now for a long time, exceeding the forty minutes I think, directed to a hypothetical private bill which the hon. gentleman announces, for the first time as far as I am aware, that he had intended to introduce, and which he states now he will not introduce. That the hon. gentleman intended to introduce a private bill was not known, I fancy, to a very great number on this side of the house. Why, I suggest, should the hon. gentleman be allowed to discuss a private bill which is not in existence, which is not now before the house and which seems to exist only in the imagination of the hon. gentleman?


Arthur Graeme Slaght: May I direct the hon. gentleman's attention to the fact that in committee I am speaking to section 4 of this bill. That section contains various amendments which have been regarded by nearly every hon. member who has spoken as possibly applicable to an expected private bill from hydro, and I am using the illustration with regard to that expected private bill to be introduced later by hydro only, as a guide to hon. members of this committee in connection with circumstances which may arise next year or the year after. It will provide
some light, I hope, which will enable them to bring in now a general bill properly amended.
Before I leave the lobbying matter, Mr. Chairman, I think I have made it clear that this was a bugaboo raised as part of the scheme to kill the hydro bill. The leader of the opposition is very sensitive as to the possibility of some members of the house being affected by a lobby. I do not know whether anybody in bad grace-and certainly if it was done it was behind my back-has offered him a chocolate bar or a glass of ovaltine as an inducement to vote for the bill; or has offered the hon. gentleman who represents Kootenay East a rosy-cheeked Okanagan valley apple or a street car ticket to induce him to vote for the bill. Surely these hon. gentlemen have done a disservice to the whole house and the hon. members of the house by having it go out across Canada that there is a vigorous, vicious, evil lobby. Surely the sergeant at arms should be invoked to throw the lobbyists out of the corridors, if they are there. I submit that the whole thing was a red herring, nothing more and nothing less.
There is one point in regard to which I do not think information has been brought forward by anyone, and which is, and I think will be in the future, an important factor in determining whether or not it is safe to export power. It is in connection with the interruptions of power that have occurred in the past; and I am going to give an example going back only to last year. The power which we have been exporting under these licences, which hon. gentlemen opposite renewed for five years, has been interrupted time and again by mere telephone calls across the river from Niagara Falls, stating that they will have to turn off the power for given periods and for certain quantities. No revolution occurred. I have secured extracts from the log books, and without going into great detail let me tell the committee what they disclose. Seven days were chosen at random, from December 2 to December 9, 1937. I believe that power goes over on Sundays as well as week days. In the fifteenth hour, the thirty-second minute, Queenston No. 4 unit-I am quoting exactly from the log book-at the request of hydro reduced the export of surplus power from 75,000 kilowatts to 31,000 kilowatts for a period of time. On the very same day at another point the Toronto Power Company No. 1 unit, at request, reduced the export from 31.000 kilowatts to 23,000 kilowatts at another point. On the same day the Ontario Power Company No. 1 unit, at the request of the Canadian company, reduced their export from 23,000 kilowatts to 15,000 kilowatts. The Canadian
Electric Power Export

Niagara company's units Nos. 9 and 10 reduced their export of 15,000 kilowatts to zero. So the record goes. I am not going to read any more of these extracts, but that is what was done when peak loads came along and power was desired both in Canada and the United States. I am credibly informed that the procedure was simply this: the operator on the Canadian side simply called up the purchasers' operator on the United States side and said, "We are sorry; we have to cut off these quantities of power," and they acquiesced. There was no revolution; no army marched across the bridge to turn the power on again.


Mr. EDWARDS:: That is hardly a cancellation. It is simply an interruption.


Arthur Graeme Slaght: I quite appreciate that,
and there is a vast difference, I grant my hon. friend, between a cancellation for all time and an interruption. That would take us into a discussion of the five different types of power, and I am sure the committee would not have patience with me if I attempted to go into that. My hon. friend is quite right, however, in calling attention to that point.


Mr. MacNICOL:: Would the hon. member give us the selling price per horsepower of the interruptable power that was cut off?


Arthur Graeme Slaght: I am sorry; I cannot. I could secure that information for my hon. friend in a few hours, I think, if it were pertinent and he desired it. That, however, is the history with regard to that bugaboo that you dare not sell any power across the line because if you had to take it back, either for good or by means of interruptions for a while, relations would be created which should not be brought about.
I had intended to make other observations, Mr. Chairman, but I fancy that I have made clear the view I hold as to the campaign that was put on against this Hydro exportation of power, and the reason for it. With regard to some of the old guard sitting across the house from me I would have expected that, because they bound themselves to that banner of their party of which they were so proud, but of which I hope they are now so ashamed, "No truck or trade with the Yankees." They are running true to form when they desire to prevent the sale of Canadian commodities to what in those days they styled the Yankees. I would not expect anything else from a gentleman whose idea of trading between nations was based not upon a policy of good will, if I am not unfair in putting it that way; not upon a policy of sititng down together and negotiating agreements and contracts, but whose slogan so far as trading
[Mr. Slaght.J
with your neighbour was concerned was wrapped up in that celebrated phrase, "Blast Canada's way into the markets of the world."


The ACTING CHAIRMAN (Sir Eugene Fiset):: Order. The hon. gentleman's time
has expired.


Some hon. MEMBERS:: No.


William Lyon Mackenzie King: We are in
committee.


Richard Bedford Bennett: The time in committee is also forty minutes.


Arthur Graeme Slaght: I shall be glad to bow to
the chairman's ruling.


Eugène Fiset: I have allowed forty minutes, even with interruptions.


Mr. RINFRET:: There is a rule in committee that every time a question is put to an hon. member, his time commences anew.


Richard Bedford Bennett: No.


Louis Édouard Fernand Rinfret: There has been an exchange of questions.


Some hon. MEMBERS:: Go on.


Arthur Graeme Slaght: I will conclude in a couple
of minutes.


Louis Édouard Fernand Rinfret: He can speak.


Arthur Graeme Slaght: I do not wish to go on too long.


Richard Bedford Bennett: There is no doubt about it: The rule is that a member may speak for forty minutes in .committee, but he may resume his speech after someone has spoken in between.


Abraham Albert Heaps: So long as someone has
spoken.


Arthur Graeme Slaght: I did not catch the observation of the right hon. gentleman.


William Lyon Mackenzie King: The hon. gentleman is now free to continue; he has the floor.


Richard Bedford Bennett: The rules in committee are made light of; the Prime Minister must not say that. The rule in committee is that forty minutes is all the time the hon. member may have. I raised a question of order, and the Prime Minister suggests that since I have spoken therefore he could go on and have another forty minutes. That is absurd.


Ernest Lapointe: The hon. member for Winnipeg North interjected a few words.


Richard Bedford Bennett: He asked a question.


Ernest Lapointe: And the chairman had to sit down and rise again.

Electric Power Export


William Lyon Mackenzie King: Perhaps I may say a few words, and so have the rules complied with.


Richard Bedford Bennett: No, he will lose the floor then. He loses the floor, and then I might take it.


William Lyon Mackenzie King: The hon. member may conclude by coming on later.


Richard Bedford Bennett: Yes, I said that.


William Lyon Mackenzie King: And I purpose giving him that opportunity.


Richard Bedford Bennett: That is what I did. A question of order arises. Let us realize-


William Lyon Mackenzie King: It is not a
question of order.


Richard Bedford Bennett: The rules are made not for one or two but for the whole house. The question of order is that he must not exceed forty minutes. If he exceeds forty minutes he must sit down, and someone else may make a speech. Then he may go on for another forty minutes. The chairman has to catch his eye before that of someone else-[DOT] probably half a dozen may speak in between. The right hon. gentleman has the same right as anybody else to raise a point of order, but he has not a right to make an address on the other man's speech.


William Lyon Mackenzie King: It is not a
question of order.


Mr. STIRLING:: He is still on his feet.


William Lyon Mackenzie King: I think he is
sitting down.


Grote Stirling: He tried to be.


Richard Bedford Bennett: He cannot go on now,
necessarily.


William Lyon Mackenzie King: Does my right hon. friend say he cannot go on?


Richard Bedford Bennett: I say he cannot go on,
after the chairman has called his attention to the fact that his forty minutes are up.


William Lyon Mackenzie King: No; I am
going on, at the present time.


Richard Bedford Bennett: And the hon. gentleman has to take his seat, which he has just done.


William Lyon Mackenzie King: What I wish
to say-and had intended to say before the hon. member for Parry Sound started to speak-was that hon. members opposite, led by my right hon. friend the leader of the opposition, devoted most of the time, in their discussion of the present section, to indicating what provisions should be contained, in order to deal with any later application for 51952-100
a private bill by the Ontario hydro-electric commission. I should like to repeat that this bill was not drafted in relation to an application by the Ontario hydro-electric commission, but owes its origin to the two applications which had come from the province of Quebec. I thought I had made that point clear, when I spoke on the second reading of the bill.	The application with
which the government was confronted, at the time it had to reach a decision as to whether or not it would grant a licence by order in council or require approval of parliament, was that of the Montreal Light, Heat and Power Company made in the spring of last year, and renewed in the summer, for the right to export power to the United States.
In replying to that application, the administration directed the attention of the applicants to the fact that on previous occasions parliament had expressed its view to the effect that future applications should be reviewed by parliament, and indicated that the government would not consider any application until the whole question had been discussed in parliament. After that application was made, another was submitted by Aluminium Limited. The same reply was made by the administration, with respect to the second application.
In both instances attention was drawn to previous discussions which had taken place in parliament. Then later the government received an application on behalf of the Ontario hydro-electric commission, and in answer to that application attention was drawn to the replies which had been made to the two previous applications, which replies were to the effect that the matter would not be considered until parliament reviewed the whole question of the export of power.


Richard Bedford Bennett: They withdrew their
applications.


William Lyon Mackenzie King: They withdrew them, yes. But that was the genesis of this particular bill-a bill framed along the lines of the one introduced some years ago by the hon. member for Leeds, which received favourable consideration in this house in 1928, and passed unanimously in 1929. I believe it is a mistake to discuss in connection with this general bill, a possible application which may be considered later on in the form of a private bill.


Charles Hazlitt Cahan: Hear, hear.


Hugh Alexander Stewart: You have been doing it for half an hour.

Electric Power Export


William Lyon Mackenzie King: My hon. friend says " Hear, hear "; that is the line his leader took this afternoon.


Charles Hazlitt Cahan: No.


William Lyon Mackenzie King: Yes-I beg the hon. member's pardon. However, the point I wish to make is that the bill before us is a general one which relates to applications for the right to export power which may be made at any time from any part of Canada. It is not a bill relating only to an application which may come from Ontario, respecting the hydroelectric commission. It is a bill which will pertain equally to applications which may come from Manitoba, British Columbia, New Brunswick or any other province, and which may be made at any time in the future.
What we are therefore immediately concerned with is the framing of a measure which will serve as a guide to those who may apply in the future for the right to export power, and to set out certain provisions a private bill should contain if its sponsors expect it to be approved by the parliament of Canada. The reason why the restrictive conditions were not included in the general bill is not that the government hoped to have more freedom in granting an applicant but, on the contrary, it was because the government desired to give to parliament the freedom to insert in a private bill any provision it might wish. It did seem to the administration a little inconsistent to say, on the one hand, " We will leave to parliament the whole question of granting an application, in the form of a private bill," and at the same time not leave parliament free to insert in the private bill any provision it might wish to insert.
It would be assumed, I believe, that a private bill would designate the number of years for which the right to export would be granted. That would be one of the first provisions which would be considered. In some cases it might be a bill to permit the export of power for one or two years. To name five years definitely as a period beyond which no private bill should continue in force might, on the face of it, appear to be an invitation to applicants to make applications for bills which in all cases would have a duration of five years. Similarly, the necessity of the government renewing a licence from year to year was a provision which, it was assumed by the administration, parliament itself would insert in a private bill, if it was thought that such provision were necessary and desirable.
That is the reason why these provisions, in detail, were not set forth in the bill, as originally presented. Where parliament gives

certain power to the governor in council and leaves the final word with that body, there is a special reason for restricting and limiting the governor in council with respect to time and with respect to other provisions of which account should be taken. If it will help to effect unanimity with respect to the present measure, I see no reason why the committee should not accept the provision mentioned by the right hon. Minister of Justice. It is one which the government has considered and which it was prepared to bring before the committee for its consideration if there appeared to be a desire to have it presented. I shall ask the minister later on to move the amendment he has proposed. We now have three subsections, (a), (b) and (c), and the following is proposed by the hon. Minister of Justice as a new subsection (d):
Subject to the provisions of paragraph (c) of this subsection, the said private act shall remain in force for a period of one year from the date of the commencement thereof, but may be extended from year to year by proclamation of the governor in council for four further periods of one year each, but not so that the said act shall in any case remain in force for more than five years from the date of the commencement thereof.


Arthur Graeme Slaght: It seems to me that the proposed additional amendment solves the difficulty that existed before and should meet with the unanimous approval of the committee. Some gentlemen questioned whether the Ontario hydro application would have passed. That is in the realm of speculation and nobody can say. However, in order to afford a guide in the future, should there be a change of policy on the part of the executive of the United States-a thing quite possible and thinkable in these days when changes occur so fast-may I suggest that practically every province of Canada is to-day enjoying a revenue from the United States dollars which come into Canada to pay for the export of surplus power. I refuse to believe that hon. gentlemen from British Columbia, New Brunswick, Manitoba and Quebec, each of which provinces is enjoying revenue from the export of surplus power, will join in the cabal of the other side to prohibit Ontario from having the right to export power which the engineers state is undoubtedly surplus.
The executive of the United States has observed that we in Canada have great undeveloped natural power resources, while in the eastern states particularly the power resources are practically all exhausted, inasmuch as they have all been brought into development at the present time. Let us keep that in mind, in endeavouring to get an enactment of section 4 which looks towards the future in a broad

Electric Power Export
way. I should like to give in that respect some figures which I obtained from page 387 of the Canada Year Book for 1936. These figures indicate the available and developed water power in Canada by provinces, as of January, 1936. The two most important provinces in this respect are, first, Quebec, and next, Ontario, I shall not give the figures for the other provinces as those who are interested further may go to the Canada Year Book for them. The figures for Quebec show that the available 24-hour power at 80 per cent efficiency is 8,459,000 horse power at the ordinary minimum flow, and 13,064,000 at the ordinary six months' flow. The total turbine installation as of that date was 3,853,320 horse power. In the case of Ontario, the available power at 80 per cent efficiency, at ordinary minimum flow, was 5,330,000 horse power; at ordinary six months' flow, 6,940,000 horse power, while the turbine installation totalled 2,560,155 horse power.
We may look forward to an influx of United States, British and other capital to help to develop the undeveloped water power across Canada. Therefore we must be careful not to declare for future generations and not to put upon the records of parliament any false notions of economy as to the desirability, if at any time it be found desirable, of inviting capital to develop further these great natural resources. These times of stress, which have been noted before in the house, are peculiarly the time when we should fall in with the views of the president of the United States. I believe in him sufficiently to assume that if conditions change and if it is thought desirable to indicate to Canada a different policy, he will do so; for I am sure it is his desire, as it is and always has been the Liberal policy, to promote good will, the attitude of the good neighbour, and friendly and kindly relations between the two countries.


Charles Hazlitt Cahan: I commend the Prime Minister for bringing this discussion back to a consideration of the merits of the bill now before the committee. The hon. member for Parry Sound certainly has made one of the most provocative speeches I have ever heard in this chamber since I became a member. If I had not too much respect for myself, for the Prime Minister, for the leader of the opposition and for other hon. members, I would retaliate in phrases which would be quite as sharp and poignant as those which he has attempted to toss across the floor of the chamber this afternoon. It was not commendable for the hon. gentleman; it reflected no credit upon him that he should assume to fling across the chamber the epithets which he did this afternoon. If he persists in that 51052-XOOi
course he will not hereafter find his membership in this house as pleasant and agreeable as it has been during the present and the two previous sessions. So far as I am concerned, I have heard of no cabal on either side of the house against the Ontario government or the Ontario Hydro Electric Power Commission. If such a cabal exists, either on the government side or on this side, it certainly has not been mentioned in any of the private discussions which I have had with colleagues on both sides with regard to the merits of this bill.
When the Prime Minister introduced the bill I accepted it as an effort on the part of the government, after due and careful consideration, to amend the statute of 1907, the Electricity and Fluid Exportation Act, and to provide that parliament might give an unbiased consideration to any future application for the export of power. The fact that the hon. member for Parry Sound intended to introduce some special measure in this case was not mentioned to me and was not known by me, and I did not take any observations on the possibility of a private bill being brought before the house to be a reflection upon the premier of Ontario, or upon the commission which my hon. friend represents, or to refer to the prospective introduction of a bill by the hon. member. I have tried to consider this matter not solely from the point of view of Ontario, because Ontario's interests are not so well known to me; I was also considering it from the point of view of other provinces, such as Quebec, which now have and will have in future large quantities of hydro-electric power for exportation, if the hydro-electric diversions which now exist and others which are in contemplation in those provinces are brought to completion.
In all his discussions with myself and my colleagues the leader of the opposition has always sought to ascertain what, in our opinion, would be fair and proper provisions to suggest by way of amendment to the bill now before the committee, not with a view to precluding hydro-electric development in Ontario, not with the view of placing obstacles in the way of the premier of Ontario and his government, or in the way of the hydroelectric commission of Ontario, but with a view to ascertaining and, if possible, enacting provisions which would apply to all possible applications for the export of power in the immediate future.
To suggest that this law which we now place on the statute books will be like the laws of the Medes and Persians, never to be amended or modified, is nonsense. That there
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is any such intention in the mind of the Prime Minister, it would be, I think, nonsensical to assert. We are dealing to the best of our intelligence with conditions at present existing in order to frame a general law under which the export of power in future may be carried on with the full approval not only of this house but of both houses of parliament. In that purpose I concur. Therefore, when the bill came before the house and amendments were suggested, we on this side suggested certain amendments which, in conversation among ourselves, had occurred to us, and from a desire solely to assist in drafting a bill which would commend itself to the great majority of this house. In discussing this bill I think we might just as well leave Ontario, as Ontario, and the interests of the hydro-electric of Ontario, out of consideration.
The suggestions which were made as to possible caballing for private ends remain, because whenever private acts are applied for, which grant or propose to grant special rights or privileges to certain sections of the country or to certain groups of individuals, there is always a tendency to caballing and lobbying. Such remarks as were made on this side of the house apply, I am sure, to that prospective condition of affairs and had no application to the hon. member for Parry Sound or to the interests which he represents in this particular debate. Therefore I suggest to the committee that we should accept the declaration of the Prime Minister as to his intentions in introducing this bill and his reasons for proposing certain amendments to the bill, and then, without further consideration of the provocative statements made by the hon. member for Parry Sound, we should give our full attention and apply the best of our intelligence and experience to the modification of this bill so that it may meet with the full approval of the great majority of members on both sides. That is the only aim which I have in view.


Abraham Albert Heaps: I wish to say just a word or two in reply to the extraordinary speech to which we listened this afternoon. I do not mind any hon. member making a speech, and I realize that perhaps one of the hardest things any prospective speaker has to endure is to have a speech which has been kept, so to speak, in cold storage for many months. Some day he wants to deliver it, and probably this afternoon we have had an example of the speech that has to be delivered, this being the only opportunity to present it. But probably it would have been better had it never been delivered. It is not pleasant to have statements made in this chamber which have a sinister reference to other hon.

members, and such statements should not be made unless they can be backed up by absolute proof. When the hon. member for Parry Sound used the word "cabal," I thought I would send to the parliamentary library for the Encyclopedia Britannica and see what the word really meant. This is what I find:
Cabal:	A private organization * or party
engaged in secret intrigues and applied also to the intrigues themselves.
I have been in this chamber during the whole time that this measure has been before the house, and I know of no secret intrigues that have been carried on. Now and again I have spoken to hon. members with reference to this bill. I know some Liberal members who are very much opposed to the measure, and probably, if a private bill carrying out the intents and purposes of the legislation now under consideration came before us, they would vote against it. But as to any member who had it in his mind to vote against such a bill being accused of doing something that is against all rhyme and reason, I cannot understand language of that kind being used in connection with such a matter.
The hon. member wanted to know what Liberals were opposed to this measure. He does not need to go outside Ontario to discover that. In the provincial house there is the hon. member for Bellwoods, the former attorney general, who probably knows as much as any man in Ontario about hydro affairs. I do not think it can be said that Mr. Roebuck, M.L.A. for Bellwoods, is in favour of the proposals that were enunciated here this afternoon by the hon. member for Parry Sound. I believe we have all heard within the last few days the statements in which Mr. Arthur Roebuck has scathingly denounced the whole of these proposals, and there is in those proposals a good deal which deserves, probably, close consideration by hon. members. If members are not prepared to scrutinize very closely the matters contained in a proposed law, they are not carrying out the duties they were sent here to perform. As a member of the house, who has not as yet given any expression of opinion which way I shall vote, I resent the implication that if I were to vote against the proposal to export power I should be part of a "cabal" in this chamber opposed to the Ontario government. I am not taking my orders from Ontario. I am not prepared, as the expression goes, to be a Charlie McCarthy for anyone. If I have opinions to express I am going to express them according to the light in which I see them, and I am not to be intimidated by statements made in this chamber by any other hon. member.

Electric Power Export
The hon. member who spoke so vehemently this afternoon was extremely anxious to throw innuendoes against other hon. members. Will he tell us that he was not within recent times closely associated with some of these private power interests in the province of Quebec. We know it; and yet he is so free with his own statements thrown across the floor of the house. I am not holding this against him in the least, but when he makes such statements he should be careful to have behind him the necessary accuracy.
I am prompted to say a word or two in this debate not because I want to discuss the merits or demerits of the bill with respect to the export of power; but when I made a statement in reference to the appointment of Doctor Hogg to the position of chairman of the hydro commission, I did so because I know something about Doctor Hogg's actions and his associations. It is common knowledge, and if I had time, if I had known that the hon. member was going to raise the question, I could have brought forward facts to prove that Doctor Hogg has been closely associated with private power interests in Canada. He has been their consulting engineer on many occasions, having made reports to private corporations on the question of private or public ownership, when the one or the other had to be brought into question.
I do not think this discussion is in order. The Chairman has shown a great deal of latitude in allowing this question to be discussed in committee, and I do not know where the debate will end. I would have been more content to discuss the clause introduced this afternoon and to keep strictly within the terms of section 4, and the amendment introduced by the Prime Minister, with which I am in agreement. Perhaps it offers more control to the governor in council and to parliament than we formerly had. because under the provisions as they stand it might be difficult to get a clear-cut interpretation. There might be a question of conflicting jurisdiction. My main purpose now, however, is to protest vigorously against the sort of speech that we have been compelled to listen to this afternoon.


Mr. HAMILTON:: It is not my desire to speak provocatively or with acrimony, and, indeed, I did not intend to speak at all at this time. However, I wish to discuss some of the safeguards that are contemplated in section 4 of this bill and in the amendment. But before I do so, I should like to make one or two observations. After listening to the hon. member for Winnipeg North I recall that not
so very long ago he made certain remarks as to how members on this side of the house were kept in line on government measures. If I remember rightly-and I am speaking from recollection-the hon. gentleman suggested that they were to be kept in line by having a judgeship, or a senatorship, or something of that land held dangling before them. I recall also the remarks made the other night with regard to the lobby that had been carried on in connection with, strange to say, a private bill which was not before the house. At the time I resented those remarks and I felt grateful to the Minister of Justice for stating that, in his opinion, those on this side could be trusted to use their good judgment and their common sense in connection with a matter of this kind. I thank him for that statement.
I think I am entitled to say here that throughout this whole discussion of the bill before us, and of any contemplated private bill which may be brought in, no living soul except members of the house-not the hon. member who spoke a short while ago, the member for Parry Sound-has ever asked me, or suggested directly or indirectly anything about what I would do in connection with the export of power from Ontario. Perhaps I have not the ability to carry out my determination; I gather from the remarks of my hon. friend opposite that nobody over here has. The only one who has that ability is the hon. member for Winnipeg North. I did wish, however, to see what the safeguards were that were being put around the private bill which was to be brought in.
Coming now to section 4, as I understand it, the safeguards which are being provided are to take care of the vital interests of this nation. Safeguards, I agree, are essential. My home town is one that has grown up by. and has been associated with, * hydro-electric energy, where the water from lake Superior falls to the lake Huron level; and our whole history has been closely linked with water power development. I mention this to illustrate some particulars in which I believe there should be safeguards in a bill such as the one we have before us. Every few years increased power has been required, and I have seen personally the effect of the development of industry on the surplus power available, pressing upon those owning the power to use their influence and make contacts so as to bring in industries which would make use of that power.
There are two essentials in regard to which there should be safeguards. In the first place there should be a definite determination and
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incentive to use all power and to find uses for it in the dominion and particularly in the locality where the power is developed. Different standards have to be considered, depending upon the question whether the control is by private interests seeking profit or by public or quasi-public ownership bodies whose duty and trust are to the people at large. There is a distinct difference there.
In Sault Ste. Marie we have a public utilities commission which has been operating for years. The chairman has the absolute confidence of the people of Sault Ste. Marie, and the other members of the commission are similarly trusted. I mention this because it touches closely some considerations that have been brought forward in the house in connection with the bill now before us, although referable to the anticipated private bill in connection with the export of power from Ontario. There we have this situation. They are under obligation to take from a private power company an extra block of power; but it is optional; they do not have to pay for it until they take it. That power company have to carry that extra power and it is a dead loss to them unless they can make use of it. They have off-peak power, surplus power, a portion of which they have to supply to the city on demand, and having no use for it now they supply it for use under the boilers of the paper industry in Sault Ste. Marie. They supply at least a portion of that power. If the public utility commission had to take that power and pay for it, they would be in a similar position to the hydroelectric commission, in that they would have to pay for power for which they had no use. In view of the desire expressed by some hon. members to see that surplus power is kept for Canadian use, I would have every confidence that the chairman of that commission would do everything possible to develop uses for that power in and around that community first, and I would be content to allow them to export any remaining surplus across the line at Sault Ste. Marie, under the safeguards contemplated by this bill.
Another point on which I wish to touch for a moment is the danger of setting up vested interests in the United States with a right to look to a continuation of the supply of power. In the supplementary white paper the memorandum attached to the letter of the Secretary of State refers to the danger of United States industries becoming dependent upon imported power, and indicating what it would mean if the supply were cancelled. They would have to revert hastily to additional steam plant construction for base load power. I confess that to my mind this has been a serious danger. But in no
(Mr. Hamilton.]
provocative or acrimonious sense I want to read a statement which goes back to 1911. I was not very old then, but I carry forward even now some recollection of what was then said to be a very serious threat if we dealt with the United States of America. I want to follow that thought for a moment, because I think safeguards on that point are important. I quote from page 173 of the Canadian Annual Review, 1911, some remarks of the then Mr. R. L. Borden with reference to the 1911 election and the contemplated reciprocity agreement:
If we attempt the experiment of linking arms with our gigantic neighbour he will have something to say about the unlinking. Already we hear the astonishing suggestion that as congress has ratified this agreement Canada dare not refuse to do it. Against the vested interests of hundreds of millions, against the tremendous power and influence of gigantic trusts, in the face of the delicate and difficult international conditions created by the treaty, and confronted with a threatened dislocation of business infinitely greater than that which brought our government to its knees last year, Canada would be as capable of withdrawing, without consent, from this agreement as the fly from the spider's web.
That was in 1911, and I have heard here in the last two weeks some arguments that concerned me as those did then. But since 1911 we have changed our viewpoint as to the danger of trade entanglements or alliances or treaties with the United States, and the successors of the party which then took that extreme view, were in 1934 and 1935 seeking to bring about a trade agreement with the United States.


Richard Bedford Bennett: Having first made the empire trade agreements.


Henry Sidney Hamilton: The point at issue in 1911 was the danger of trade moving in volume north and south, the danger that once we had entered into an agreement we would not be able to break it without creating international difficulty, the same argument that is advanced now. And I understand the reason why the right hon. leader of the opposition in 1934 did not make an agreement with the United States was that he could not make those channels deeper than they were and more binding than the United States was willing to make them, in other words, increasing the very danger which in 1911 we were warned against.
I wish to give as an illustration a situation which is of vital importance not only to my constituency but to Canada, in which the identical argument would apply. This is an iron and steel age. Practically our whole civilized life is based on iron and steel. Yet not one pound of iron ore, upon which that

Electric Power Export
great industry is dependent, is mined in Canada. The ore which comes into central Canada comes from the United States of America, from resources which are not inexhaustible, which are being depleted rather speedily. The hon. member for Davenport a year or two ago pointed out in this house that very danger. It is a very real one. To-day we in this country are utterly dependent for raw material for that great basic industry upon our neighbours across the line, whose resources of iron ore are being depleted with some speed. I confess I cannot see a great difference between the menace that confronts us if the United States should suddenly terminate those supplies and that which would arise if we were exporting hydroelectric energy to the United States and suddenly terminated that supply. As the memorandum to which I have referred suggests, what they would have to do would be to . resort to steam plants for their power. Similarly we would have to import ore from other countries, and probably pay more for it, as they would possibly have to pay more for power produced by coal burnt under boilers if that were necessary. I do not wish to detract at all from the seriousness of this question, but I do not think it applies with any greater seriousness to the export of hydro-electric energy than to other commodities which are exported.
The other day the hon. member for Davenport dealt with the diversion of water from the great lakes. To my mind that is on a different basis from hydro-electric energy, as in that case the United States have the physical control of .that diversion, which they have not in connection with hydro-electric energy going into their country.


John Ritchie MacNicol: May I correct my hon. friend? At Niagara Falls the diversion of water is for the generation of electricity for export to the United States.


Henry Sidney Hamilton: My understanding is that the hon. member referred to the Chicago drainage canal-


John Ritchie MacNicol: Exactly.


Henry Sidney Hamilton: -and referred to others, and as I followed him his contention was that the United States were actually taking water for purposes for which they were not entitled to take it.


John Ritchie MacNicol: Exactly.


Henry Sidney Hamilton: Well, in Chicago at any rate the taking of that water is controlled by physical means situated in the United States, and the only way we could stop them would
be in some way to control their physical conduct, or that which they do in a material sense.


John Ritchie MacNicol: I tried to point out that at Chicago, where for many years they have diverted 10,000 cubic feet per second, half of that water belonged to Canada, and that if we could use that additional 5,000 cubic feet per second at Niagara Falls we would develop an additional 150,000 horse power of electricity at Queenston.


Henry Sidney Hamilton: I fully appreciate that, but we cannot stop the water going into the Chicago drainage canal because we have no physical control over it. I am not an electrician and do not profess to have much technical knowledge of electricity; but in connection with electricity I assume we could cut the wires or in other ways stop the exportation, which we cannot do in reference to the water being diverted at Chicago. So I do not think the illustration is altogether valid as an argument against allowing the exportation of hydroelectric energy.
In connection with section 4 we have the parliament of Canada or the governor in council acting for the people and having the say as to whether or not exports shall continue. Then we have other public utility bodies equally responsible to the people they represent. In my town they are responsible, among others, to the men and women out of work, to the people of that city, which is seeking for additional industries which would relieve the unemployment now prevailing. We should so surround our exportations that we do not make any misrepresentations or misleading statements. When dealing with a great nation at present on such friendly terms with Canada, in the words of the president can we not deal with them as neighbours; can we not make with that country an agreement such as an individual would make with his neighbour? It seems to me that at this time, when there is so .much suspicion and distrust, we should have faith and confidence in the relations that exist between nations. I may be talking foolishly and childishly, not as a man of the world; yet I am prepared to make these statements in any event. It is important that we should live up to the high standard of national and international conduct which is nowhere better exemplified than on the North American continent, where it has been an example to the world. So I think if we take care of these very real conditions that must be considered, with all the provisions that are embodied in this measure we shall be safeguarding the national interests of this dominion.
Electric Power Export


Mr. LAWSON:: Mr. Chairman, while I
appreciate the wisdom of the suggestion of the hon. member for St. Lawrence-St. George, I simply cannot allow to go unchallenged the statement of the hon. member for Parry Sound to the effect that the Conservative party in this house was predisposed or had agreed to oppose the exportation of power from Canada. Coming from Ontario, and the particular district which I represent, I cannot allow such a statement to be made without a reply. So far as I am concerned- and I am sure I express the views of all my colleagues in the house-we have had a sincere desire to see this general bill dealing with the exportation of electric power so drafted that the interests of all parties in this country would be safeguarded, irrespective of whether the applicant for permission to export electric power should be the hydroelectric commission, or any quasi-public ownership enterprise, or a private concern.
I am willing to give a good deal more weight to the views and opinion of the hon. member for Parry Sound on the subject of remote control leadership than I am to his attitude towards the federal Conservative party. No member in this house is in a better position to have a knowledge of remote control leadership than the hon. member for Parry Sound. If we could believe the press of Ontario, for two years prior to 1934 the hon. gentleman was the constant companion of a remote control Liberal leader in Ontario, the present premier of that province.
The hon. member for Parry Sound says that one would think the export of power was something new. Oh, no, it is not. It is because of the expei'ience we have had with the resultant effects of the export of power that individual members of this party and the Conservative party in this house have been endeavouring to see that amendments were included in the bill now before us. It is because we have learned that renewals are not precedents, as the hon. gentleman would seem to think, for the granting of new applications. It is because we have learned from experience that once an application is granted, unless it is surrounded with the strictest terms, a vested right is created, and you must have an excellent reason for refusing the renewal because of the international complications which arise therefrom. It is because of our experiences at Massena and in regard to the Chicago drainage canal and the export of power at Niagara Falls, which were detailed by the hon. member for Daven-
port, that we have learned that care must be exercised in granting new licences for the export of power from Canada.
May I say to the hon. member for Parry Sound that as far as I am concerned, and as far as most of the members of the Conservative party in this house to my knowledge are concerned, if the hon. gentleman or any other hon. member introduces a private bill now or in the future providing for the export of power from this country he will find that we will consider that problem not from the point of view of whether it is the Hydro-Electric Power Commission of Ontario. not from the point of view of whether it is a private corporation, but from the point of view of what is in the national interests of the people of Canada as a whole. That and none other will be the governing factor.


Richard Bedford Bennett: We have had the
pleasure-and such apparently it was to many hon. members opposite-of listening to a high class speech by the hon. member for Parry Sound. He spoke in such slighting terms of the language used by the hon. member for Dufferin-Simcoe that one would have expected that at least he would use what might be called language consistent with the amenities of civilized society. But it was ovaltine, a chocolate bar, and street-car tickets; this from a member of the legal profession, who gave a learned opinion in connection with the MacLaren bond issue, and who rises in his place in this house as an exemplar of. all that is fit and proper in the conduct of public business. That is his language. That is the language of one who asserts himself as a leader of the bar in his province. I believe he is now-well, I am reminded that he was-a bencher of the law society of Ontario. The language he used here to-day is as I have indicated-and he holds himself up now to this house as an example. One would expect at least that the language used would not be of the kind he condemns. But he has seen fit to condemn in one breath and to approve in the other, using himself the language to which I have referred. I am accustomed to abuse; that is nothing new. There is, of course, an old saying that when you have a bad case you should abuse the attorney on the opposite side. I make no complaint about that; but I do make this complaint-not on behalf of myself, for I have not complained personally-that those who set themselves up as examples and condemn in such vigorous terms the language said to have been used by the hon. member

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for Dufferin-Simcoe should not themselves sink to what they describe as an improper level, by using the language we have heard.
Something has been said about a lobby. I spoke about the dangers of lobbies with respect to private legislation. I in no sense indicated that any member of this house was lobbying. I spoke of what I said in parliament-I believe it was during the second session in which I enjoyed a place in it-at a time when the Right Hon. Arthur Meighen, Mr. W. F. Nickle and I on the last day of the session joined in as vigorous a denouncement as we were capable of making of the lobby that was carried on in respect to the Bank Act. We were not in any sense denouncing the lobby of members of the house by members of the house-far from it. We were pointing out that systematic lobbies were being maintained by members of the legal profession on behalf of great interests concerned; that they were buttonholing members in the corridors and suggesting that they give support to this measure, to that clause or that paragraph of a bill.
What is more, we did something to end it. Every private bill is a conflict of interest against usage. Everyone knows that a private bill is an effort to have a majority of the members of parliament make an exception in favour of an interest. Whether it be a divorce bill or any other measure, it matters not; it is the interest that is the controlling factor. I pointed that out the other day, as I did twenty-five years ago in this chamber, when we denounced the practice of interests concerned employing a high type of lawyers who were buttonholing and lobbying members of parliament to support their views.
I read in the paper the other day that the Ontario government had engaged the services of two Ottawa lawyers for the purpose of lobbying their interests here. The presence of one of them in the debate in this house during the progress of the bill has always been apparent. There is no questioning the fact that lobbying has been discussed in every democratic parliament of the world, and the danger of it is apparent to every man who believes that democracy could be set aside lightly by efforts such as that. If hon. members refer to Hansard they will find what was said with respect to lobbying on the occasion I have mentioned. No one suggested that any member was lobbying any other member. It was for the first time indicated to the house that the hon. member for Parry Sound was to have charge of the private bill, and he suggests that some fellow member was endeavouring to lobby me with a glass of ovaltine or a chocolate bar,
and the hon. member for Kootenay East with a street-car ticket. To that level has debate descended this afternoon.
Whatever else may be said with respect to the note received yesterday, and laid before the house, at least it vindicates the position taken by some of us with respect to this legislation. At page 13 of the white paper laid on the table to-day, the Secretary of State for the United States uses these words:
It is well known that successive governments in Canada have been traditionally reluctant to permit the long term exportation of power to the United States. The principal reasons underlying this policy were concisely stated in a letter, recently made public, from the premier of Ontario to the Minister of Trade and Commerce at Ottawa. The objections, as therein stated, were as follows:
1.	That the exportation of power results in the establishment in the United States of dependent communities or industries.
2.	That irrespective of the terms of the agreement under which export delivery is made, the commitments become irrevocable; that is, the deliveries cannot be suspended or terminated at any later date without giving rise to international complications and being regarded as an unfriendly act.
3.	That the export of power enables industries, which otherwise would establish themselves or branches thereof in Canada, to handle their Canadian business from factories located in the United States.
It must be clear to all who have given thought to the problem that those reasons which have in the past made the exportation of power undesirable from the point of view of Canada have made the importation of power undesirable from the point of view of the United States. In the case of the latter, a broad policy of national defence is also involved. On this aspect of the question, it is perhaps sufficient merely to say that many of the industries most necessary to the life of a nation in times of national emergency require very large and uninterrupted supplies of power. The fact that the government of the United States anticipates no such emergency does not relieve it of the responsibility of taking the possibility into account.
And then follows this:
While sympathizing with the desires of Ontario and Quebec, the government of the United States considers that its primary obligation is to view the problem in terms of protection for the general power market in the United States and for those American industries which might become dependent upon imported supplies of power. In this connection, it may be pointed out that if the Northeastern power market in the United States were to become dependent for any considerable portion of its power supply upon withdrawable imports, it would be faced with the constant danger of having to revert hastily to additional steam plant construction for base load power.
In the circumstances, the government of the United States believes that it would be failing to discharge its proper obligations if it were to give its consent to the importation of hydroelectric power, even on a temporary basis,
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without simultaneously providing for the development of an alternative and equally economical domestic supply to be available when the imported power was withdrawn.
There is a concise statement of the considered policy of the United States of America, not only with respect to electric power, but also with respect to every matter that affects its national well-being, namely the protection of United States interests and industries.
When I heard the hon. member for Parry Sound speak of the tremendous friendliness of the United States for Canada, I could not but remember that only a few months ago, in 1935, this dominion signed a trade agreement with the United States, and that within a few months thereafter a revenue tax of three cents a pound was placed upon animal fats, thereby destroying the lard industry in this country, so far as price was concerned. Why? Because they were carrying out the policies that Mr. Secretary Hull has now enunciated in this note to the Dominion of Canada. During the past few weeks there passed the House of Representatives a bill that places against Canadian pork products a duty of six cents a pound. This is a prohibitive duty, and if it goes into effect it will prevent the sending of a single pound of pork products into the United States. That bill is now pending before the United States senate. Mr. Secretary Hull believes it to be the first duty of every government to care for its own people and its own country. He has indicated in no fulsome flattery and in no platitudinous discussion that that is so. He is a realist and his government is realistic. It considers the first duty of government is to care for the material, spiritual, and, shall I say the social well-being of its people.
I should like to remind the committee that the first comprehensive proposals made to the United States of America for a trading agreement came, not from a Liberal government but from a Conservative government. I say this now so that there may be no misunderstanding about it. The Conservative party never was the author of the statement, "No more trade or truck with the Yankees." Who was it said that? I ask the hon. member for Parry Sound who was the author of that?


Arthur Graeme Slaght: The bill-boards of this country were plastered with it.


Richard Bedford Bennett: Whose bill-boards?


An hon. MEMBER:: Your bill-boards.


Richard Bedford Bennett: The question is answered; the bill-boards were the authors.


Arthur Graeme Slaght: Somebody paid for the billboards.
[Mr. Bennett.!


Richard Bedford Bennett: I am bound to say that information founded on bill-boards would be a little difficult to follow, having regard to the ones we saw in 1935 and the relations between the federal administration and the provinces. But this we do know; it is a matter of distinct record that Sir Wilfrid Laurier said, "No more joumeyings to Washington." It was after the great gathering presided over by Lord Herschell had ceased its duties at Washington without results that Sir Wilfrid Laurier said, "No more journeyings to Washington." The hon. member for Al-goma West has asked a question. Let me tell him that no proposal was made by the Conservative government for trading with the United States until we had concluded trade agreements within the empire. Why? Because we knew that in Great Britain there existed a stable market for our agricultural products. We knew that there we would not have the fluctuations in policy brought about by the changing tariff views of the one party as compared with the other. We know now that to-day we have republican tariff in the United States of America. We know that it is the highest tariff in the history of the United States. We know that the president can negotiate trade agreements only if goods now dutiable are not made free and the tariff is not reduced by more than fifty per cent. To-day the average ad valorem tariff of the United States is nearer fifty per cent than forty per cent. If you include the specific duties, the average is sixty per cent. Half of sixty per cent is thirty per cent, so that the only tariff we can secure from our great neighbours is one of thirty per cent, and that is called a low tariff.


An hon. MEMBER:: Clause 4.


Richard Bedford Bennett: Yes, clause 4. I thought you would call clause 4 as it would deny me the right to answer the allegations made this afternoon by the last speaker and by the hon. member for Parry Sound.
I want to go a step further. The long tirade, partly abuse and partly argument, made this afternoon Iby the hon. member for Parry Sound, was to the effect that a man who would even think that the export of power should be opposed must have an unsettled mind. His contention was practically that no sane man would think of opposing it. His argument was so complete that even the hon. member for Selkirk must fall in and support those views. All you had to do was merely listen and the matter was complete. I wonder if the hon. gentleman knows anything of the policy of the Liberal

Electric Power Export
party in that regard. Does he know what their policy was as declared in this house in 1928? Does he know that when a measure was introduced .by the hon. member for Leeds providing that parliament should have control over this matter, the government accepted the measure and it was passed unanimously? As was pointed out very properly by the Prime Minister, the premier of Ontario sat there.


Mr. DUNNING:: Over here.


Richard Bedford Bennett: He sat on both sides of the house, with the government at one time, and with the opposition at the other. He was not a member of the opposition in 1928; he sat on the government side. So far as the record shows, he gave his approval to the measure introduced by the hon. member for Leeds. Listen to the language of the hon. member who was put up to speak for the government of Canada, the Hon. Charles Stewart, then Minister of the Interior. These are his words:
Mr. Speaker, the government is taking no exception to this bill. It does not make any drastic change, but I think the sponsor has in mind that in eases where new developments spring up, and there is a possibility of a certain portion of the power being exported, the company or individual promoting the measure shall come to parliament and obtain a private bill for that purpose. With that suggestion, the government has no quarrel; indeed I think I may say on behalf of the government that we will go even a step further. It is in our opinion desirable that the exportation of electricity be absolutely prohibited; it is too valuable an asset for us to permit it to leave our country. Although we may be at some disadvantage from a climatic point of view we have this very valuable asset which to some extent offsets that condition, and it is important that we should retain it within the boundaries of our own country.
Those were not the words of the Conservative party; they are the words of the spokesman of the right hon. gentleman who now leads the government. That hon. gentleman spoke for the government when he said they would go even a step further than the hon. member for Leeds. He said:
It is in our opinion desirable that the exportation of electricity be absolutely prohibited,
That is to be found on page 453 of Hansard of February 14, 1928. I wonder if the hon. member for Parry Sound knows what was the declared policy of his party. If he did, then he has been indicating by his speech this afternoon that all those who hold the opposite view are ill-informed, ill-advised and have an improper appreciation of the situation. As Mr. Secretary Hull points out, all governments have been opposed to long term contracts for power. It may well be that over
the dam goes water which might be converted into electricity that might be sold, but the reasons which actuated the government in 1928 to make the statement that was made on its behalf are just as cogent and powerful to-day as they ever have been in the history of this confederation.
As to the other point which was made, namely, that we renewed the licences which had been granted, of course we renewed them. It is true that the leader of the government found some of those licences in operation when he came into office. The record of them will be found on pages 97, 98 and 99 of the white book. It is true that those licences have been renewed. It is true that during the five years we were in office we renewed them, always on the representations made by the province of Ontario that they should not be destroyed.
Let us look for a moment at what I conceive still to be necessary to insert into clause 4, that is the provisions of the licence itself. Let us see under what conditions power is now exported. I believe the Minister of Justice will agree with me that it is highly desirable that there should be at least some uniformity. I quite appreciate the point made by the Prime Minister that this bill does not refer to the hydro-electric alone; it is to deal with all companies that at any time in the future may make applications.
The licence will be found at page 95 of the white book. Let us look at the application for it. I submit that the language of the licence should be the language of the general conditions of the enabling act so that the experience we have derived from the past we should be able to utilize in the future. This is the language set out at page 95, No. 52:
Licence Number	is hereby granted
to the	doing business at
in the county of	and province
of	to export or to sell for export
from Canada during the fiscal year ending 31st March, 19	, electrical energy at a rate
not to exceed at any time during continuance of the licence,	kilowatts, provided:
(a)	That momentary indications in excess of the authorized quantity, due to short circuits, grounds, etc., will not be considered as violations of this licence, and
(b)	That the maximum demand or peak of load curves, will not be considered as a violation of the licence when such peak does not exceed twenty-five per centum of the quantity herein stated, and does not continue above the licensed rate for a longer period than one hour at any time, and for not more than two hours altogether in any twenty-four hours.
This licence being only for one year, licensees must not enter into any contract which they will not be able to carry out if this licence is not renewed, or if the Electricity and Fluid Exportation Act or the regulations made thereunder are changed.
15S8
Electric Power Export

This licence is subject to the statutes of Canada, now in force, or hereafter to be enacted and also to the provisions of the regulations regarding electrical power, &c., approved by the governor general in council on the 4th day of November, 1907, and to any regulations which may hereafter be made, which statutes and regulations are made conditions hereof.
Every contract made under this licence shall contain a clause or clauses expressly setting forth that it is made by virtue of this licence, which is subject to the Electricity and Fluid Exportation Act and any amendments that may be made to it, and also is subject to the regulations made or which may be made by the governor general in council regarding, the same; and every contract made under this licence shall have attached thereto a copy of this licence and of the Electricity and Fluid Exportation Act, and of the regulations approved by the governor general in council on the 4th day of November, 1907.
This licence, if renewed, shall be subject to the terms and conditions of such regulations as may be made from time to time, either by statute or the governor general in council.
That is signed by the deputy minister and countersigned by the director, and dated.
I suggest to the Minister of Justice and to the Prime Minister as well that this legislation would conform to what I conceive to be the general principles that underlie such legislation if the general terms of the existing licence were incorporated in the language of the general conditions to be observed; for, having swept out the licence by statute and having substituted for it a private act, it is highly desirable, I think, that we should see that any private act which may hereafter be enacted shall be subject to the provisions, among others, which I have just read.
I congratulate the government upon two of the conditions which they impose. I think the condition which deals with price is an admirable one. I think the condition which deals with surplus is also most admirable. I would only suggest that when the Minister of Justice is considering the terms of the amendment which he has read, it might be well to make it clear that the conditions imposed by the licence shall be the conditions which will apply to any private act.
The Prime Minister very properly used the argument, why not depend upon the private act? But the reason we should not depend upon the private act is that the terms of the licence which will be obtained by those companies whose licences are to be renewed from time to time contain these provisions, and they are part of the general conditions that govern the whole situation. Therefore the general bill, namely the enabling act, should contain like conditions. I suggest that because I regard one or two of them as being tremendously important. There is, for instance, the one that deals with the 
question of making no contract for the sale of power except the copy of the private act be attached to the contract. That brings home to anyone who acquires power the situation, so that a vested right may not be obtained.
I mention this, Mr. Chairman, without going further into the matter, because I should like to make it abundantly clear that, in opposing the general position in respect to power export there was nothing in it that had to do in any way, shape or form with immediate conditions; there was no effort to arouse animosity against the government of Ontario. To suggest that thirty-eight or thirty-nine persons were so powerful as to be able to effect this purpose does violence to my understanding of the weight of the thirty-eight persons. To suggest that it can be done involves, in my judgment, the negation of the very theory upon which government by majority rests. But we have followed the traditional policy of this party; we have followed the traditional policy of the Liberal party as declared in this house, the unanimous view, as the Prime Minister was at pains to point out the other day, as expressed on more than one occasion; and it was for that reason that we are opposed to the export of power. I submit that beyond all peradventure, if the amendments which have been suggested, amplified by the one that was just read, being, as I submit with deference, broadened so as to cover the conditions to which I refer, were passed, we would then in the enabling act have indicated to all the general conditions which will govern hereafter the granting of a private act; and, more, we would have maintained that position which the Prime Minister took in 1928, the position which was taken by the late administration, and the position which has been taken by the government of to-day; for there has been no departure that I know of or that any other hon. member has heard of that changes the general attitude of mind of successive governments towards the question of long term export of power. This was the Liberal principle declared time after time in Ontario and elsewhere in Canada.
But it is not necessary to go that far. All one needs to do is to take the statement made on behalf of the government of the day in February, 1928. By that we have stood. If in doing so we have created a cabal; if by doing so we have trodden upon the toes of a new Liberal policy of which we were not advised; if there is a new one in the offing of which we have no knowledge, yet indeed we can say with the greatest consistency that we have maintained the unani-

Japanese Immigration
mous expression of the people of this country through their representatives in parliament assembled, that we were all opposed to the export of power except in emergency conditions which are provided for in this bill, and that long term sales of power were objectionable to the Canadian people for the reasons given by Mr. Hull as regards its importation to his country.
At six o'clock the Speaker resumed the chair and the house took recess.
After Recess
The house resumed at eight o'clock.



PRIVATE BILLS


[Stage Direction]
Bill No. 41, for the relief of Alice Cecile Pinder Hartt.-Mr. Jacobs.
Bill No. 42, for the relief of Ruby May Foster Ryder.-Mr. Emmerson.
Bill No. 43, for the relief of Ethel Sadie Davidson Case.-Mr. White.
Bill No. 44, for the relief of Ray Simon Stern.-Mr. Jacobs.
Bill No. 45, for the relief of Norma Adelaide MacKenzie Hird.-Mr. Walsh.
Bill No. 46, for the relief of Mabel Marjorie Thompson Maynes.-Mr. Emmerson.
Bill No. 47, for the relief of Walter Edward Gorham.-Mr. White.
Bill No. 48, for the relief of Margaret Anne Eddie Bender.-Mr. Walsh.
Bill No. 49, for the relief of Kathryn Chronis Briggs.-Mr. Walsh.
Bill No. 50, for the relief of Vera May Levis Holloway.-Mr. Jacobs.
Bill No. 51, for the relief of Robert Andrew Young.-Mr. Walsh.


[Stage Direction]
The house resumed from Friday, March 11, consideration of the motion of Mr. Neill for the second reading of Bill No. 11, respecting Japanese immigration.
Mr. J. G. TURGEON (Cariboo):: It is with a sense of deep responsibility that I rise tonight to take part in this debate. I am quite aware that British parliamentary custom has decided that the whips of the two parties should take very little part in debate. While I am simply deputy whip and act only on occasion, nevertheless I do from time to time take the place of the chief government whip,

and therefore I recognize that responsibility in rising to discuss this bill to-night. Were it not for the circumstances surrounding the particular measure now before the house I would not be on my feet. It is my intention to make as sure as I can that no word of mine shall hurt the feelings of any member of this house, and I trust also that nothing will be said which will be even provocative.
There are several matters deeply related to the question under discussion in connection with the two bills that have been introduced purporting to amend the Immigration Act and the Chinese Immigration Act, but I do not intend to deal with these related questions. Rather I shall confine myself to questions embedded in the measures themselves.
The question brought before us by the hon. member for Comox-Alberni (Mr. Neill) is one of deep significance to the province of British Columbia. It is one which, if left unaltered in its present status, will soon be of vital concern to the dominion as a whole. I know the people of western Canada fairly well, and there is one thing that the people of British Columbia require of their public men more perhaps than any other attribute. It is that when any deep and embarrassing question arises, the people of that province shall know where their representatives stand, and out of deference to and in appreciation of that feeling on the part of the people of British Columbia, I state at this point that if these two bills before the house are forced to the conclusion of a vote, I shall vote against the second reading of both. Having so declared myself, I shall later on take the extreme liberty, with whatever force is at my command, of recommending to the proposer of these bills, the hon. member for Comox-Alberni, that in the interests of British Columbia, in the interests of the very object which he has in mind and for which he has been working in and out of parliament for fifteen years or more, he withdraw them so that in the circumstances in which parliament finds itself at the present time it will not be necessary to vote the bills down.


Alan Webster Neill: I rise to a point of order. Is the hon. member in order in discussing a bill which is not before the house? He should confine himself to Bill No. 11, and not discuss a bill which is not at the moment up for second reading.


James Gray Turgeon: I do not wish to get into any altercation with the hon. gentleman over a question of order, but the only difference between the two bills is that one purports to amend the Chinese Immigration Act and the other purports to amend the Immigration Act.
Japanese Immigration

It is not possible properly to discuss, from the standpoint of British Columbians, the question of the exclusion of Japanese, through any instrument whatever, without discussing everything that arises from immigration and, therefore, from the policies adopted by this parliament to conduct and to regulate immigration.
As I was saying, I intend to suggest to the hon. member that in the very interests of the object he has in mind these bills should not be pressed to a vote during this session. Later on, I shall give my reasons for that suggestion. It is my intention also to show to the best of my ability why I think it is absolutely necessary for me, coming from British Columbia and having a sense of the responsibility that rests upon a member of this house, to vote against the bill on this occasion. Further I intend as well as I can, and even at the expense of repeating some of the arguments that have been made, to put forward some of the reasons why I believe that sooner or later action must be taken to bring about that which these bills purport to accomplish. That action must of necessity be taken.
Two results have followed from the discussion that has taken place upon the hon. member's motion. One is that this government has already set up machinery which we sincerely hope will bring to light in what degree, if any, illegal entries have been made from Asiatic countries, with particular reference perhaps to the race mentioned in Bill No. 11. There has been set up-or rather enlarged, for I understand it was set up previously-another investigating committee which will act more or less in conjunction with the board of review that is dealing entirely with illegal entrance and the steps necessary to be taken immediately to stop it, but the interdepartmental committee acting in conjunction with that board will inquire, I take it, into the whole question of Asiatic immigration.


Mr. GREEN:: May I ask the hon. member a question? Has there been any change since the announcement made by the Prime Minister on March 7? He was asked by the leader of the opposition about these boards of inquiry, and his answer was, as reported at page 1066 of Hansard:
Mr. Mackenzie King:	The board has been
appointed to deal with the subject of illegal entries-
Mr. Bennett: Only?
Mr. Mackenzie King: Only, yes.
Then he goes on to say:
However, I would assume that in any inquiry directed to illegal entries much information that was incidental thereto would be ascertained.

Is the hon. member suggesting that there is to be another board, or that this board is to go further than the statement of the Prime Minister indicated?


James Gray Turgeon: I do not want to be unkind to the hon. member, for whom I have great personal regard; but if he paid more attention to the answers given by ministers of the crown he would not have had to ask me that question, because he will find on Hansard an answer to his own question, where the Prime Minister said that this interdepartmental committee was set up and is separate entirely from the board of review, whose function is confined to the question of illegal entry. This interdepartmental committee I take it has upon it representatives not only of the Department of Immigration but of the Department of Labour and the Department of National Defence. Perhaps one should not say that too loudly, but these two departments are represented on that committee, which is inquiring into every question relating to oriental immigration into Canada, which, of course, means largely into British Columbia.	.
A second benefit has resulted from the introduction of this bill by the hon. member for Comox-Alberni. Oftentimes the position of British Columbia in the general scheme of things Canadian is misunderstood. For long years the position of that far western province with respect to all questions relating to immigration has been misunderstood. But I take it from this debate, and especially from the words used by the Prime Minister (Mr. Mackenzie King) and other ministers, as well as by the leader of the opposition (Mr. Bennett), that now our position is better understood than it has been at any previous time in the history of this question.
What is the situation? I have before me two orders in council passed under authority of the Immigration Act. One is P.C. 2115 dated September 16, 1930, which puts a prohibition upon the entry into Canada, except of course with certain exceptions, of immigrants from Asiatic countries, though it clearly sets out that it is not concerned and does not deal with any Asiatic nation with which Canada has a treaty or convention. Then there is another order in council, which was referred to the other night, P.C. 695, dated March 21, 1931, and amended April 23. 1937. This order in council deals with steps taken to prohibit immigration of any kind into Canada, again with certain exceptions. The exceptions are: Those who come from Great Britain with sufficient funds to maintain themselves until they have opportunity to secure employment; those who come from

Japanese Immigration
the United States with sufficient funds, and agriculturists with sufficient funds to go into the business of farming. In this order in council there is also a proviso as regards immigrants as defined in paragraph 2, that is, those entering from the United States, and immigrants as defined in paragraph 4, that is, agriculturists who have sufficient means to farm in Canada: " Provided that these are destined for settlement in a province which has not signified its disapproval of such immigration." There is a clear recognition of the principle that, largely because of conditions in Canada to-day, persons to be admitted to this country must be destined for a province which has not signified objection to their entry.
I do not need to point out that immigrants from Asiatic countries who come to Canada come only to British Columbia. The general principle underlying these prohibitions is this, that because of the situation in which labour finds itself, because of the competition with which those who are farming may be faced, because of general competition in labour or in other means of gaining a livelihood in Canada, it is not right to permit immigrants to enter the country. Yet we find that immigration from Asiatic countries is concentrated in British Columbia and is of such a kind that it utterly displaces all other labour with which it comes in contact. That is a situation which cannot be denied and to which I call attention on behalf of British Columbia.
Ordinarily immigration is stopped because of its effect on labour and those engaged in production. In British Columbia we find two results from the immigration policies of Canada. One is that in those parts of the province in which Asiatic settlement is concentrated labour is ousted, farm values lowered very materially, and rural credit lessened and in some places destroyed. What else do we find as a result of the general immigration policies of Canada? My eyes are turned now to that great area of country running from Vancouver north clear through the centre of British Columbia for practically a thousand miles, a country containing the richest mineral section imaginable, from which untold millions of dollars have been taken, but which as yet in many places has been hardly touched and is still open for exploration. In that country we find seven or eight settlements, many of them isolated, several of them finding it impossible to maintain contact with each other because of lack of transportation. In that country there is everything to support a larger population- diversified farming, cattle, hogs, wheat and everything one can think of. It extends both
east and west of the mountains. It is traversed by the great valley of the Fraser river and all its tributaries, and from east to west it is crossed by the Peace river waterway, with all its tributaries. Yet we find that because of lack of population that country is not in a position to support itself. It has over seven hundred miles of Canadian National railway lines, owned by the government of Canada. In another direction it is crossed by 450 miles of the Pacific Great Eastern railway, which is owned by the province of British Columbia. Every mile of railway line within that area is owned by the taxpayers; yet because it is without immigrants who should be going in there, the railways are unable to operate except at a terrific loss, though they are running through one of the richest parts of Canada.
The situation is this:	British Columbia,
surfeited on the one hand with Asiatic immigration, is crying and demanding that steps be taken at the earliest possible moment to see what can be done with the government of Great Britain in order to bring to this portion of the province immigrants properly directed, properly financed, properly organized and carefully selected. The province wants them. Only yesterday at Victoria the city of Prince George presented to the Rowell commission a submission in connection with immigration from the British Isles, and that plea for British immigration is not divorced from the question of oriental immigration. During the last few months a new and, if you wish, strange doctrine in international relations has been proclaimed by some great states. The doctrine is that parent states are responsible for the welfare and entitled to direct the destiny of strong minorities of their people who live in foreign states. It is true that up to the present time this refers only to states contiguous to what are called the parent states; but in the western part of Canada we have an Asiatic people migrating to British Columbia, with nothing between Canada and the country from which these people come except the Pacific ocean. With the transportation facilities of to-day the Pacific ocean is hardly a greater barrier than an ordinary boundary line between nations.
I do not point out these things simply that the government should take cognizance of them because, as I said in the beginning, I realize that already cognizance has been taken of the situation in British Columbia. Having said so much, however, may I just take a few minutes more to state why I cannot vote for this bill. I realize the importance of the measure brought into the house
Japanese Immigration

by the hon. member for Comox-Alberni, and I should like to read some remarks made during the course of this debate by the leader of the opposition, for whom it goes without saying I have the highest respect. Mind you, these words were spoken by the right hon. gentleman, who was quite aware of the. responsibility that attached to him through his past experience as Prime Minister and Minister of External Affairs, and who knows the delicate touch with which questions of this kind must be handled even in times of peace. The right hon. gentleman said:
On the other hand, not for a moment would I pass the bill in its present forai. Without placing a time limit as to when it should come into force, or providing that it should become effective by proclamation, I think we would be courting a very serious situation indeed, and one which we could not contemplate at this particular moment, having regard to our earnest desire to keep our own country out of the conflict in Asia.
These are not idle words; they are the words of the leader of the opposition who, as I said, was speaking from the depths of experience. Later on he said:
Therefore, while I should like to commend the hon. member who introduced the measure to the house, and hope that the government are prepared to accept the principle of it, I am one of those who, accepting that measure and believing strongly in it, would not for a moment urge its passing in its present form, as I believe it would be a very dangerous thing for us to do at this time.
I know there are men around me who feel that it is perhaps an exaggeration to point out the difficulties and embarrassments which might arise by reason of any action taken in connection with the exclusion of an Asiatic race from our country, but here are the words of the right hon. gentleman, who says not only that such action is dangerous but that it should not be taken if we are really earnest in our desii'e to keep this country out of the conflict which is now raging in the orient.
In the last twelve or fifteen years we have gone very far in our relations with the British Empire. We have taken such steps and have declared ourselves from time to time in such manner that the Statute of Westminster of a few years ago was, after all, only a manifestation of that great development which has taken place in Canada. But this I ask the hon. member for Comox-Alberni and those newspapers in British Columbia which have been commenting rather bitterly upon the hesitancy shown by parliament in passing this measure: While it is right that we should become masters in our own home; while it is right that in matters relating to defence

we should cut ourselves off from external influence; while undoubtedly it is right that we should decide that our destiny along the pathway of the world should be cleaved only by ourselves, have we reached the time when we can forget what has been the relationship in the past between this country and the British Empire? Have we reached the time when we can pay no attention to the call of kinship? The Prime Minister pointed out, in words that must be heeded by anyone who heard or read them, that in Japan there is a deliberate effort designed to break down the friendly relations which in the past have existed between Japan and the British Empire. If there were in Canada, or in any part of the world, some fiendish mind which wished to make certain that if anything were to happen by way of a world conflagration Canada should be in it, is there anything that such a fiendish mind could conceive which would be more likely to attain its objective than so to arrange matters that the one final spark which brought about a world crisis should be an overt act on the part of Canada, committed by this parliament?
The hon. member for Comox-Alberni, having been satisfied, as he must be, with the discussion which has taken place, and filled, as I know he is, with the desire to relieve British Columbia of its Asiatic problem; realizing that if the suggestions of the leader of the opposition were taken-and the hon. member agreed to accept them the other night-that nothing could be done in any event within a year and a half or two years; that in that time Canada will have gone ahead with a reconsideration of its whole immigration problem, and that she may be making extra relations with the British Isles concerning immigration under which, without offence being given, there might be an exclusion of Asiatics; and once more stating that I must vote against this measure if it comes to a vote, thereby showing the hon. member that I am not trying to save myself from embarrassment, with all the sincerity of which I am capable and with all the powers at my command, I ask him in the interests of British Columbia, in the interests of Canada and of all which he has at heart-a better, safer and wiser settlement of the Asiatic problem of British Columbia-seriously to consider the withdrawal of his bills.


Thomas Alexander Crerar: Mr. Speaker, when the Prime Minister (Mr. Mackenzie King) stated a few weeks ago, when the hon. member for Comox-Alberni (Mr. Neill) first brought his bill before the house, that it was one of the most important measures parliament would have

Japanese Immigration
to consider-particularly at this juncture in world affairs-he stated a fact which I believe appeals to the reason and judgment of every hon. member.
There is no doubt that the question on the Pacific coast is one of deep and vital concern. We have evidence of that in the restrained but definite speeches made by members from that province, and we see it also in the concern exhibited in Vancouver and on the Pacific coast generally in relation to this whole problem. I think, however, if we are to reach a sound decision on the merits of the bill we are now considering, it is necessary to take stock of all that would be implied in the house passing the measure.
The Japanese immigration question first became one of concern a great many years ago. Hon. members will recall that in 1894 the United Kingdom of Great Britain and Ireland entered into a treaty, known as the United Kingdom-Japanese treaty, with the Kingdom of Japan. Canada gave adherence to that treaty. One of its provisions stated that the subjects of each party to the agreement should have full liberty to enter, travel or reside in any part of the dominions and possessions of the other. It was the freedom given in that provision which in the first instance led to the heavy Japanese immigration to the Pacific coast. To such an extent had that immigration increased that in the three years from 1905 to 1907 upwards of 12,000 Japanese came to Canada. Even then the matter was one of considerable concern to the Canadian people. The treaty I mentioned a moment ago, to which Canada had given adherence, was still in effect. It was that situation which led to the mission of the late Hon. Rodolphe Lemieux to Japan in 1907 to discuss with the Japanese government the question of limiting Japanese immigration to this country.
I should like to repeat that which was pointed out by the Prime Minister, namely that the Japanese government acted in a wholly reasonable manner at that time. An arrangement was reached by which Japanese immigration to Canada was limited to about 500 persons a year, and that arrangement, as was stated by the hon. member for Comox-Alberni, remained in effect until after the termination of the treaty, which took place, as I now recall, in 1921.
The so-called gentleman's agreement negotiated by Hon. Mr. Lemieux continued in effect. It is quite true the matter was dis-51952-101
cussed in parliament in 1922 or 1923. In 1928 further representations were made to the Japanese government and further reductions in the migration to Canada were effected, bringing the number to 150 a year. I think it is only fair to say that the Japanese government have lived up to the gentleman's agreement of 1907 and the later understanding of 1928.


Alan Webster Neill: No.


Thomas Alexander Crerar: I do not think that can be effectively combated.


Alan Webster Neill: Certainly it can.


Thomas Alexander Crerar: In no year since 1928 has the immigration from Japan, under the terms of that arrangement, reached 150. The Prime Minister stated on a former occasion that in the last five years under that arrangement the average has been eighty-one persons admitted to Canada.


Richard Bedford Bennett: That is the registered number. The illicit number was larger than that.


Thomas Alexander Crerar: Under the agreement it was true that additional numbers of Japanese came to Canada, but they were entitled to come as Canadian citizens. I do not think even the hon. member for Comox-Alberni would deny a Canadian citizen, even if he were of Japanese nationality, the right of entrance to Canada.


Alan Webster Neill: I would when they were especially exempted under the agreement.


Thomas Alexander Crerar: The total number of
Japanese who came to Canada from September 1, 1928, when the later understanding became effective, to December 31, 1937, all categories, was 1,330. Of those who were entitled to come under the agreement the number was 995. Of those outside the agreement there were 335. As I have said, those in the latter category were persons who, under our law, were Canadian citizens and had the right to come to this country. The hon. member for Comox-Alberni shakes his head, but I am stating the facts.


Alan Webster Neill: No.


Thomas Alexander Crerar: I have before me a tabulation taken from departmental figures, giving the numbers by males, females, and children under the agreement and outside the agreement who came to Canada during the period I have just mentioned. I think this information will prove useful to hon. members, and with the consent of the house I shall place it on Hansard. It is as follows:

Japanese Immigration

Japanese Immigration
Under
agreement
Sept.	, 1928 to March 31, 1929.	*M. 37	F. 43	c. 20Fiscal	year 1929-30	
" 1930-31	69	46	19It	50	53	24tt	" 1931-32	57	57	21"	" 1932-33	30	47	17((	" 1933-34	46	40	13tt	" 1934-35	38	25	11tt	" 1935-36	24	34	10tt	" 1936-37	24	42	14tt	" 1937-38 (9 months).	22	44	18Outside	Total	agreement	immigration	I. F.	C.	*M.	F.	C.	4 14	5	41	57	25	123. 37	21	69	83	40	192. 53	24	50	106	48	204. 42	18	57	99	39	195. 16	5	30	63	22	115. 3	3	46	43	16	105. 15	3	38	40	14	92. 15	24	49	10	83. 19	i	24	61	18	103. 24	10	22	68	28	118Totals	
397 431	167	4 238 93	401 669 260	1,330
* Males-Females-Children.
A feeling exists on the Pacific coast that a considerable number of Japanese have entered Canada illegally. The illegal entry of immigrants is not a new thing. We are dealing with it every day in the immigration branch, particularly at the present time with the disturbed condition in Europe. No doubt some Japanese have entered Canada illegally, but I am quite sure that the number is not so great as the hon. member for Comox-/Iberni thinks it to be. It must be remembered that if anyone has entered illegally, he is subject to deportation.
When speaking to his bill the hon. member said that he did not intend it to deal with any except those who would come in under the gentleman's agreement. While no doubt a problem is created in British Columbia because of the Japanese population, I understood my hon. friend to say that he did not intend his legislation to touch those Japanese already in the country; that it would apply simply to the Japanese the present exclusion which is applied to Chinese. The problem of illegal entry was recognized by the government before the hon. member brought in his bill. An interdepartmental committee was set up, as alluded to by the Prime Minister (Mr. Mackenzie King) which studied this question. Certain conclusions were arrived at among which was the one that we should deal only with those Japanese who might be in Canada illegally. When I was on the Pacific coast last summer, I was told that there were hundreds of Japanese who had entered the country illegally, and my hon. friend seems to harbour the same * thought. As a result of the work of this interdepartmental committee, a board of review was established this week in Vancouver. This board is made up of Doctor Keenleyside of the Department of External Affairs, Mr. Taylor, Superintendent of Immigration on the Pacific coast, and Inspector Fish of the Royal Canadian Mounted Police.

Every one on the Pacific coast who has a suspicion, or any knowledge, that a Japanese is in the country illegally, has been invited to present his information to the board, either personally or in writing. Any statement made to the board will be fully examined, and any Japanese found to be in Canada illegally will be deported. At the same time, it is only right to say that the Japanese who are legally in Canada will not be disturbed by the work of this board of review.


Alan Webster Neill: The minister said that the interdepartmental committee had been established before I brought down my bill; but in replying to some hon. member on this side, I believe it was the leader of the opposition (Mr. Bennett), the Prime Minister (Mr. Mackenzie King) said that it was his intention to have an interdepartmental committee and a board of review set up. As that statement was made after the bill was brought down, how can the minister reconcile it with the one he makes now?


Thomas Alexander Crerar: This was a matter of discussion between the Department of External Affairs and the immigration branch and one or two other departments. However, that point is not so important. The fact is that the committee was set up and the board of review is now sitting to discharge the duties I mentioned a moment ago.
The bill advocated by my hon. friend provides for straight exclusion. It applies to the Japanese the legislation now applying to the Chinese. In this respect I should like to quote again the statement made the other evening by the Prime Minister. It must be remembered that the Chinese and Japanese have a long civilization behind them. The other evening the hon. member for Comox-Alberni said that the reason the Chinese were dissatisfied with the action taken by Canada was because they felt they were discriminated against as compared with the Japanese. The

Japanese Immigration
inference to be drawn from the hon. member's remarks was that if the Japanese were put in the same position as the Chinese, this objection on the part of the Chinese would largely disappear. But that is not the case. The Prime Minister cited some evidence the other evening. A few years ago I had an opportunity of having a long discussion with an eminent Chinese gentleman, a man who, in his knowledge of languages, of history and of philosophy, stands in the front ranks in China. He was a man of great ability, and we discussed this particular question. He did not raise objection to the fact that we did not wish to have Chinese in Canada, but he did object to the manner in which we had gone about effecting this.
My hon. friend proposes to apply the same method to the Japanese. You cannot affront a proud people in this way. The hon. member smiles, but let me read to him what the Prime Minister stated the other night. In 1924 the United States did just about what the hon. member now proposes to do, and this action was a matter of representation by the Japanese government to the United States government. Let me quote from a communication addressed by the Japanese ambassador in Washington to Mr. Hughes, who was then Secretary of State. I quote:
To Japan the question is not one of expediency but of principle. To her the mere fact that a few hundreds or thousands of her nationals will or will not be admitted to the dominions of other countries is immaterial, so long as no question of national susceptibilities is involved. The important question is whether Japan as a nation is or is not entitled to the proper respect and consideration of other nations. In other words, the Japanese government asks of the United States government simply that proper consideration ordinarily given by one nation to the self-respect of another, which after all forms the basis of amicable international intercourse throughout the civilized world.


Alan Webster Neill: And what happened?


Thomas Alexander Crerar: It does not matter what happened.


Alan Webster Neill: Nothing.


Thomas Alexander Crerar: With the present state of the world, with suspicion running so high, with the tension among nations which now exists, the hon. member comes and asks this parliament to administer that sort of rebuke to the Japanese government. What for? In order that we may be able to deal with an average of eighty Japanese annually in the last five years. I submit that is not a reasonable request to make of this house.
I know the hon. member feels strongly upon this subject; but may I say this, and in doing so I am merely repeating what the leader of 51952-101^
the opposition (Mr. Bennett) said the other night: The government of Canada to-day is probably, if I may say so, a better judge of whether this is a proper time to take action of this kind or not than is any private person. The judgment of the government is that this is not the proper time; that such action would but add another flame to what is going on in the world at the present time. In view of that fact alone, I believe the hon. member would do a service to this country if he withdrew his bill.


Mr. T. L. CHURCH (Broadview):: I shall take only a moment in order not to delay action by the house, as I wish to see a vote on this question to-night. There is a great deal of sympathy in Ontario for the people of British Columbia regarding oriental immigration. This is not only a domestic problem ; it is also imperial and it is international. On this question the people of Canada, I believe, think the same as those of New Zealand and Australia, that the time has come when this country should be a white man's country and further oriental immigration should be prohibited. We talk about gentlemen's agreements. Why in the world, when nobody pays any attention to treaties or pacts, should we expect that they are going to pay any attention to a gentleman's agreement? The people of the two industrial provinces are three thousand miles away from British Columbia; but I was out there in 1927 and I saw the way in which the oriental people are permeating every branch of business-lumbering, mining, and retail stores; these activities have been almost taken away from white men in that province, with the result that business men and the younger people who are coming from the schools and universities are finding it hard to make a living.
I would not say one word to offend Japan; far from it. I think the greatest mistake ever made was when, at Washington, to please the people of the United States we parted from the Japanese alliance. The British Empire never made a greater mistake. The mother country kept good order in the far east, and she arranged immigration policies so that New Zealand and Australia have remained white men's countries; there are no Japanese there. The same is largely true of the United States. Yet to please the people of the United States we parted from the Anglo-Japanese alliance. I think the government would be taking a step in the right direction if it adopted this measure. We want to see Canada as a whole, like the provinces of Ontario and Quebec, maintained as a white man's country.
Japanese Immigration

I congratulate the members from British Columbia upon their attitude. I believe their views on this question are those of the people of Canada. I am sorry that the old alliance was broken, and I can only hope that the government will not mistake any longer the babble of the pacifists for the voice of the Canadian people in either national or international affairs, and particularly in regard to this great domestic problem. Something must be done. Gentlemen's agreements are mere scraps of paper. Last year 101 Japanese came in and nearly all have stayed in British Columbia. In the case of the Chinese, sixty per cent remained in British Columbia and the rest have moved across Canada. The time has come when we shall not be violating any agreement if we take the action that has been proposed. What Great Britain has done with Japan for Australia and New Zealand can be done for the people of Canada. Japan has obtained room for expansion; she now has Manchuria and part of China; no longer does she need Canada for her surplus population.
I congratulate the mover of the bill. I hope it will be supported by every hon. member, because I believe the unanimous wish of the Canadian people is that in future Canada, like New Zealand and Australia, shall be a white man's country.


Some hon. MEMBERS:: Question.


Alan Webster Neill: The hon. member for Nanaimo (Mr. Taylor) has the floor, but if he is not going to speak-


Mr. TAYLOR (Nanaimo):: I merely wished to ask a question, but it is almost nine o'clock.


Mr. SPEAKER:: I draw to the attention of the hon. member that if he speaks now he closes the debate.


Richard Bedford Bennett: I think this bill should pass. I believe this country should not-


William Lyon Mackenzie King: The right hon. gentleman has spoken already.


Richard Bedford Bennett: No; I have not spoken on this.


William Lyon Mackenzie King: Yes.


Some hon. MEMBERS:: Question.


Alan Webster Neill: Mr. Speaker-


Some hon. MEMBERS:: Question.


Alan Webster Neill: When I get order, Mr. Speaker, I shall address myself to the subject. There is only a minute and a half left, and while it would not take long to answer the arguments advanced this evening, I do

not think I can do so in a minute and a half. I would be obliged if you would call it nine o'clock.


Some hon. MEMBERS:: No.


Alan Webster Neill: All right. I shall deal in the minute and a half that is left with the remarks of the hon. member for Cariboo (Mr. Turgeon). He said' that some of the British Columbia papers had been commenting bitterly on this bill. There he was wrong. What the British Columbia papers were commenting bitterly upon was the failure of the government to pass the bill-a totally different matter.


An hon. MEMBER:: Let us vote on the bill now.


Alan Webster Neill: The hon. member talks about machinery being set up, and the Minister of Mines and Resources (Mr. Crerar) gave a flat contradiction to the Prime Minister (Mr. Mackenzie King) on that point.


Thomas Alexander Crerar: Nonsense.


Alan Webster Neill: The hon. member for Cariboo talks about machinery being set up. There have been three men-a policeman, an immigration agent, and a man from Ottawa. Does any hon. member suppose that the policeman and the immigration agent will condemn themselves by saying that they have let men in illegally? Of course not; they will smooth the matter over. Does anyone think I would condemn myself and say, "I am sorry; I am an immigration agent, but I have allowed people to come in illegally." It is a farce from the beginning. Of course I would let them look at the books and go down and show them the wharves, and they would be quite happy. The policeman would convince them that nothing had been done illegally in his department, and the immigration agent would do the same. It would not be human nature to do otherwise. Is that the kind of committee that we are going to trust to decide whether people have been coming in illegally or not? Mr. Speaker, it is nine o'clock.



ELECTRIC POWER


[Stage Direction]
The house resumed consideration in committee of Bill No. 21, to amend the Electricity and Fluid Exportation Act-Mr. Mackenzie King-Sir Eugene Fiset in the chair.
Ernest Lapointe: I move to add to section 4, subsection (4) paragraph (d) which I believe meets the suggestions which have been advanced, as far as can be done in a legal clause.

Electric Power Export
(d) Subject to the provisions of paragraph (c) of this subsection, the said private act shall remain in force for a period of one year from the date of the commencement thereof but may be extended from year to year by proclamation of the governor in council for four further periods of one year each but not so that the said act shall in any case remain in force for more than five years from the date of the commencement thereof, nor shall the said private act operate to vest in any person any right to export power after the expiration or repeal of the said private act.
The hon. member for Leeds said that in fixing a period of five years we seemed to, intimate that the power extended for five years, but I believe if we read the subsection carefully we shall see that, instead of extending, it limits the power of the governor in council to extend the private bill. The power is from year to year but not beyond five years. It is rather a limitation than an extension. The other part has the effect of declaring to the world that the act shall not operate to vest in any person any right to export power after the expiration or repeal of the private act.
While I am on my feet I should like to submit another amendment which comes at the beginning of the section. It reads:
That section four be amended by inserting at the beginning of the section, before the word "section,'' the following words:
"Subject as hereinafter in this act provided."


Richard Bedford Bennett: I think the amendment proposed is as reasonable as might be expected under the circumstances, except that it might be well to expand the last two lines, because the vested right might be a right with respect to something other than the mere export of power. For instance, he might claim damages; and as I suggested the other day, he should not - acquire a vested right either to export power or for any other purpose; that is to say, he should have no right of action by reason of his allegation of vested right. That is the only suggestion I have to make.


Abraham Albert Heaps: With regard to paragraph (b) of subsection 4, which deals with the question of the price at which power should be exported, if power under any proposed bill is exported from Ontario, such power being owned by the provincial government, how is the price going to be fixed, and who will be the authority to determine whether the price at which the power is exported is a proper one in the circumstances? I can understand how easy it would be for two experts to be at cross-purposes on the question of a reasonable price and I am wondering who will determine that question.


Ernest Lapointe: Under the amendment as drafted it will be the governor
in council, and in my opinion the governor in council should be the authority to decide on the matter. Of course, the governor in council will have the advice of any expert or engineers whom they see fit to employ.


Abraham Albert Heaps: I quite appreciate the fact that in the case of power being exported the government would obtain the advice of experts; but suppose there were a difference between the experts appointed by the provincial authorities and the experts advising the governor in council. Who is going to be the final authority?


Ernest Lapointe: We are
the deciding authority.


Abraham Albert Heaps: That is definite?


Ernest Lapointe: Yes.


Richard Bedford Bennett: Might it not be well
to say "renewed" instead of "extended"?


Ernest Lapointe: Yes, except that it is not exactly like a licence. It is an act of parliament.


Richard Bedford Bennett: "Extended" is good, but I thought that possibly in view of the language used in connection with the others, "renewed" might be better.


Charles Hazlitt Cahan: Is this a proposed amendment to section 3?


Ernest Lapointe: No, section 4.


Charles Hazlitt Cahan: What becomes then of the
amendment which the Prime Minister proposed?


Eugène Fiset: They are all being considered together.


Ernest Lapointe: This adds another subsection.


[Stage Direction]
Amendment agreed to.
Eugène Fiset: The Minister of Justice further
moves that section 4 be amended by inserting at the beginning of the section, before the word "section," the words "Subject as hereinafter in this act provided." Shall the amendment carry?


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 5-Temporary licences.
Ernest Lapointe: I wish
. to offer the same amendment here, that immediately after the number "5" at the begin-
Electric Power Export

ning of the section, and before the word "section," the following words be added: "Subject as hereinafter in this act provided."


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 6-Licence to construct or place wires or pipes.
Charles Hazlitt Cahan: In the prior debate I suggested an amendment to this section, and I now beg leave to move that section 6 be struck out and that the following be inserted in lieu thereof:
6. Section 8 of the said act is repealed and the following substituted therefor:
8. (1) All transmission lines or lines of wire or other conductors for the exportation of power and all pipe lines and other like contrivances for the exportation of fluid, from any place in Canada to any place outside of Canada, are hereby declared to be works for the general advantage of Canada.
(2)	Subject to any regulation of the governor in council in that behalf, the governor in council may grant licences for the construction, placing or laying of any transmission line or line of wire or other conductor for the exportation of power, or of any pipe line or other like contrivance for the exportation of fluid.
(3)	No person shall, without a licence, construct or place in position any transmission line or line of wire or other conductor or contrivance for the exportation of power or any pipe line or other like contrivance for the exportation of fluid.
I do not know whether the government have any objection to this proposed amendment?


Ernest Lapointe: I think
we have.


Charles Hazlitt Cahan: They have had time for full consideration of it. My personal opinion was that without a declaration that transmission lines or lines of wire or other conductors for the exportation of power, and all pipe lines and other like contrivances for the exportation of fluid from any place in Canada to any place outside of Canada are works for the general advantage of Canada, this parliament would be deprived of jurisdiction over such lines, and any regulation made with respect to such lines, as was provided in subsection 2 of section 6 of the bill, would be invalid. I quite understand that this is declaring works to be constructed in future to be works for the general advantage of Canada, but I think it advisable for parliament to make that declaration. And with all respect I think such a declaration is within the competence of parliament. There are a number of cases to which one might refer, but I do not intend to refer to them to-night. We have made a similar declaration in the Railway Act. Parliament has declared that lines of railway

which come in contact with lines which are already lines for the general advantage of Canada thereby become lines for the general advantage of Canada. That is a declaration relating to works to be constructed in the future, and I think that if the one is valid, the proposed declaration is also valid.


Ernest Lapointe: The
Department of Justice advises against the amendment proposed by my hon. friend. Of course, as he knows, this section 6 merely proposes to change the place where what was already in the old act will be found in the future. There is no change at all except to place the section in another part of the bill. Since 1907 this has been the law of Canada, and it has never been challenged.
That is only to initiate what I have to say. Section 92 of the British North America Act, item 10, which gives jurisdiction to provincial legislatures, reads as follows:
10. Local works and undertakings other than such as are of the following classes:
These are the exceptions:
a. Lines of steam or other ships, railways, canals, telegraphs, and other works and undertakings connecting the province with any other or others of the provinces, or extending beyond the limits of the province:
This is the item on which we base our contention that it is within the jurisdiction of the parliament of Canada. In the case of Hewson v. Ontario Power Company, 36 Supreme Court Reports, page 596, the question was as to the validity of a dominion incorporating act which gave power to the company to connect its wires with the wires of an electricity company in the United States. It was held that the subject matter of the charter was obviously not a local one, and that therefore it was valid by reason of this item 10a of section 92. This has always been the view of the Department of Justice. I find that on November 14, 1933, the deputy minister of justice, with the concurrence of the minister, the Hon. Mr. Guthrie, advised the deputy minister of the interior that the power works and appurtenant transmission lines constructed by the Calgary Power Company constituted, by reason of the manner in which they are interconnected and operated for the distribution of power, works and undertakings connecting the province of Alberta with other provinces and therefore are subject to the exclusive legislative authority of the dominion parliament in virtue of the combined operation of section 91, item 29, and section 92, item 10a of the British North America Act.


Richard Bedford Bennett: That is, that they extended their lines into Saskatchewan.

Electric Power Export


Ernest Lapointe: Yes. Of course to accept the amendment offered by my hon. friend would imply a doubt as to the validity not only of what has been in the law with regard to the export of power since 1907, but in many other enactments which are the law of the country at the present time. This we are not willing to do. In addition to that, if the amendment of my hon. friend is needed; if it would remove any doubt as to the jurisdiction of the parliament of Canada in the matter, we submit that it should be done in the private bills when they come, and not in this public bill.
My hon. friend has referred to the section in the Railway Act which purports to give jurisdiction by saying that certain railways are for the general advantage of Canada. But that very section has been submitted to the courts, and in the case of Luscar Collieries Limited v. McDonald et al, reported in 1925 Supreme Court Reports, page 460, the majority of the court found that this section is invalid.


Charles Hazlitt Cahan: Which section?


Ernest Lapointe: That section in the Railway Act to which my. hon. friend has referred. This declaration that works for the general advantage of Canada would come under paragraph c. of item 10 of section 92, which reads:
(c) Such works as, although wholly situate within the province, are before or after their execution declared by the parliament of Canada to be for the general advantage of Canada or for the advantage of two or more of the provinces.
The majority of the supreme court found that this paragraph could not be used in a general way to cover general works in the future which are not specified. It applies to works already executed or to be executed, and which are especially defined and described. Here is what Mr. Justice Duff said, at page 476:
The grounds on which it can be argued that section 6 (c) of the Railway Act does not constitute a valid declaration within section 92, 10(c) of the British North America Act, can be very concisely stated. The object of this provision, it is said, was not to enable the dominion to take away jurisdiction from the provinces in respect of a given class of potential works; works, that is to say, which are not in existence, which may never come into existence, and the execution of which is not in contemplation; the purpose of the provision is rather to enable the dominion to assume control over specific existing works, or works the execution of which is in contemplation. The control intended to be vested in the dominion is the control over the execution of the work and over the executed work. If a
declaration in respect of all works comprised within a generic description be competent, the necessary consequence would appear to be that, with regard to the class of works designated by the description, provincial jurisdiction would be excluded, although dominion jurisdiction might never be exercised, and although no work answering the description should ever come into existence. In support of this view it may be said that the purport of the declaration authorized appears to be that the work which is the subject of it either is an existing work, beneficial to the country as a whole, or is such a work as ought to be executed, or, at all events, is to be executed, in the interests	of	the	country	as awhole. An affirmation in general terms, for example, an affirmation that all railways owned or operated hereafter by dominion company are works which ought to be or will be executed, as beneficial	to	the	country	as a
whole, would be almost, if not quite, meaningless. and could hardly have been contemplated as the basis of jurisdiction.
This was the finding of the majority of the supreme court. I think the declaration, suggested by my hon. friend would be quite in place in a private bill authorizing the export of power, say	by	the	hydro-electriccommission of Ontario, at a certain place. But the work has to be either executed or contemplated, and while this amendment is really generic in its scope, I submit that we would do better not	to	enact it in	connection with this bill.


Charles Hazlitt Cahan: In reply to the right hon. gentleman, in the first place I submit that the opinion of Mr. Justice Duff in the case cited is rather in support of the contention I now make instead of being against it. In the act as it stands at present there is section 8, that is, in the Electricity and Fluid Exportation Act, chapter 54 of the revised statutes of Canada, 1927. It is there. Although it is there, Bind has been there since 1907, the government of Canada has not attempted to test its validity. Its enforcement has been generally disregarded. I have in mind one licence which I obtained myself, and the extension into the United States was made under such a licence.


Ernest Lapointe: Is my hon. friend sure of his ground in making that assertion? My information is that this has been granted by licence many times.


Charles Hazlitt Cahan: I think it has never been enforced. It is true that there has been regulation as to the place at which the line crosses the boundary, and, in some instances, some regulation as to the crossing of the boundary, but that is not the full purport of the new subsection 2 of section 6 of this bill. Let me read this new subsection:
No person shall, without a licence, construct or place in position any line of wire or other
Electric Power Export

conductor or contrivance for the exportation of power or any pipe line or other like contrivance for the exportation of fluid.
That is a line for the exportation, of power. That means the line from the generating station or the power station or the transformer station through the province to the boundary and crossing the boundary, and it is that line, mentioned in the new subsection 2 of the bill, over which the government should have supervision and power of regulation. That provision is not within the power of parliament unless that line is previously declared to be a line for the general advantage of Canada.
My next point is in connection with section 8 of the existing act, which is subsection 3 as it now stands in my amendment, which states:
_ Subject to any regulations of the governor in council in that behalf, the governor in council may grant licences for the construction, placing or laying of any line of wire or other conductor for the exportation of power, or of any pipe line or other like contrivance for the exportation of fluid.
That section is also in the act at present; subsection 3 of my amendment is taken from the present act. The section in the present act states that without a licence no person shall construct or place in position any transmission line, and so on, and that implies that by granting a licence this parliament acquires legislative jurisdiction over the construction or placing in position of any such line. I suggest that parliament has no such legislative jurisdiction, except a declaration be made such as that proposed in the first subsection of this amendment.
The right hon. gentleman, in reading the opinion of Mr. Justice Duff, stated correctly that Mr. Justice Duff held that the construction of the line under section 92 (10) of the British North America Act applied only where the construction of a line was in contemplation. I submit that with regard to these transmission lines for the export of electrical energy, each and every one of them is in contemplation when this general act is passed, and that therefore the very fact that such lines are in contemplation, the very fact that the government assumes that it has the power of regulation with respect to those lines, shows that it is contemplated by this bill that such line or lines is or are about to be constructed. If the right hon. gentleman will assure us that, as long as he is Minister of Justice, in every private bill which is brought before the house a clause will be inserted to the effect that such line or lines as may be necessary to carry out the purposes of that private bill, for the exportation of electrical energy, shall be declared 
to be for the general advantage of Canada, the same purpose I have in mind undoubtedly will be served. But undoubtedly ministers of government change; others may hereafter sit in their seats. I trust that it will be a long time before there is any change concerning my right hon. friend, unless someone from this side of the house moves over there and holds the portfolio of the right hon. gentleman; but I think it would be advisable, even as a reminder, and it would have no ill effect, to insert a subsection such as the one I now propose in this amendment. If inserted in this bill, for greater caution, it will not serve to invalidate any other act on the statute books of Canada.


Ernest Lapointe: It could imply throwing doubts on other statutes.


Charles Hazlitt Cahan: Sometimes i-t would be well, even if it were to throw a doubt upon the validity of prior legislation, that parliament, as in many cases similar, should make such legislation clear beyond all reasonable doubt, even though in some cases the change might be used as an argument by expert counsel. But I cannot conceive that, in dealing with a new matter such as this, in new legislation with regard to the export of power, and in placing such export within the jurisdiction of parliament, any reasonable precautions which we may now take would throw any doubt upon prior legislation.
Furthermore subsection 1 of section 8, as I have proposed it, will apply to all lines established for the exportation of power. It will not raise any doubt with regard to the application of the prior enactment, because the prior enactment will no longer be applicable even to lines already established. When once subsection 1 is enacted by parliament, it will apply to all lines in existence or in contemplation for the exportation of power. So that it is not a sufficient objection, I submit, to say that, simply because we are making section 8 clear now, it might be used by expert counsel as suggesting that prior legislation was invalid or defective. However, I do not intend to press the matter further. I have moved the amendment, and I was hoping the government would feel free to accept it.


Richard Bedford Bennett: There is in one of our statutes a clause dealing with a matter similar to this in which the language, if I remember correctly, is something like the following: "For greater certainty, but without derogating from the right of parliament to enact this legislation, it is hereby declared," and so on. I am not quite sure, but I believe those are the words.

Electric Power Export


Ernest Lapointe: I am informed it is in the grain act.


Richard Bedford Bennett: Is that where it is? I recalled the words, but I could not place my hand upon them.


Ernest Lapointe: Yes. Of course the hon. member for St. Lawrence-St. George says that if he were sure his amendment would be inserted in every private bill which passes parliament, his purpose would be achieved.


Charles Hazlitt Cahan: Quite so; it would be.


Ernest Lapointe: Yes. We are of the opinion that this is the only way in which the enactment would be valid and legal. Surely it would make it doubly sure when parliament has the authority. Any promoter or corporation-hydro-electric, or any other one-which would apply to parliament for a law granting them, power, for its own security would insert such a clause in the bill. Even if I were to cease to be Minister of Justice, I would see to it that this clause was inserted.


Charles Hazlitt Cahan: Would the minister permit me to reply to that?


Ernest Lapointe: Yes.


Charles Hazlitt Cahan: Simply this, that instead of inserting this proposed amendment, the promoters of a private bill might assume that subsection 2 of section 6 of the bill has no force or effect, unless the work is declared to be for the general advantage of Canada. And having no force or effect they would simply disregard it, and certainly would not seek to impose upon themselves further regulation by the governor in council.


Eugène Fiset: Mr. Cahan moves-


Charles Hazlitt Cahan: In view of the attitude taken by the Minister of Justice and in view of the fact that he has given assurance that he would regard the insertion of this special clause, subsection 1 which I propose, as a proper clause to be inserted in respect of any special line specially authorized by private bill, and having brought the matter to the notice of parliament, I respectfully ask leave to withdraw my proposed amendment.
Amendment withdrawn.


Hugh Alexander Stewart: May I trouble you, Mr. Chairman, to read the provisions of the section as to the price to be charged for power. I find at page 89 of the white paper, among the regulations respecting the export of electrical energy, on January 29, 1929, based on the authority of the order in council of November 4, 1907, the following:
8. Where a supply of electrical energy, gas or fluid is provided in any part of Canada by the contractor for export and home consumption, then the price charged to any person or company in Canada by the contractor shall not exceed the prices at which electrical energy, gas or fluid is sold by the contractor for export in like quantities under similar circumstances.
I take it that the provisions of the bill are almost identical with that. Mr. Chairman, will you read the subsection so that we may be sure?


Ernest Lapointe: Is my hon, friend coming back to section 4?


Hugh Alexander Stewart: I do not want to reopen the matter, but I just wanted to be sure. It concerns the price to be charged.


Mr. LAPOINTE (Quebce East):: It is paragraph (b) of subsection 4 of section 4.


Eugène Fiset: This paragraph reads:
The power exported shall not be sold outside of Canada at a price less than the price of power produced and sold under substantially similar conditions for use in Canada.


Hugh Alexander Stewart: It is the same, but put the other way around.


Richard Bedford Bennett: There is a little difference between them. It is the same contractor in the regulation, and it does not necessarily mean the same contract here. That is the only point.


[Stage Direction]
Section agreed to.
Sections 7 and 8 agreed to.
On section 9-Existing licences.
Mr. FINN:: Mr. Chairman, if I am in order I should like to make a few general observations with reference to the bill as a whole and to the objections that have been raised by hon. gentlemen opposite. I can well remember last year or 1935 when the leader of the Cooperative Commonwealth Federation was talking in reference to Beauharnois. He suggested that that undertaking be made a public utility and operated under government control. The right hon. leader of the opposition stated at the time- I hope I am quoting him correctly-that the parliament of Canada had no jurisdiction over the rivers and streams in the various provinces except those that were navigable waters, but it did have power to grant or to refuse licences for the export of power. The hon. member for St. Lawrence-St. George has said that the frailties and faults of previous legislation should be avoided, but the question is whether the frailties and faults were in the amendment which he has withdrawn and not in this legislation.
Electric Power Export

I went to Toronto and had a conference with Premier Hepburn, but I did not go until I had spoken to the Prime Minister. I felt it was my duty to do that as a follower and supporter of his. He told me that he had absolutely no objection to my doing this. I pointed out to him that in Nova Scotia we had had considerable difficulty in connection with the hydro-electric development and with the Nova Scotia Tramways and Power Company in contradistinction to the Halifax Tramways Company. The latter corporation has a net capitalization of $2,000,000 as compared with the capitalization of $13,500,000 of the Nova Scotia Tramways and Power Company. Sufficient power has been developed at St. Margaret bay to run the trams, to light the city of Halifax and for domestic and industrial purposes at no cost to the city.
I felt that personal contact was the best means of ascertaining the position that one should take on a grave issue such as is involved in a private bill to enable Ontario to export its excess power to the United States. I may say that the premier of Ontario was open and above board, and he stated that the contract which he desired to make was a yearly one for a period not exceeding five years. He expected that by means of this contract some $14,000,000 could be made for the province, and he felt it to be his duty as premier to seek to export this surplus power. I felt then as I feel to-night, that if any industry, whether it be manufacturing or otherwise, produces more than the people of Canada can consume, there should be no law to prevent them from exporting their surplus to any country under the sun. I cannot understand why a fine distinction should be drawn between these two types of industry. My personal view is that Ontario should be permitted to export its surplus power to the United States or to any other country.
Last evening the Prime Minister tabled some correspondence in connection with something that is not yet in being. The only forgiving part of the documents tabled is the last letter written by Secretary of State, Mr. Cordell Hull, at the instance of President Roosevelt. That letter is dated March 17, a day on which everyone is convivial and more ready to forgive and forget. The government of the United States took that particular day on which to write to our representative at Washington, Sir Herbert Marler, the document which has been placed on the desk of every hon. member of this house. There is in that document something which seems to be foreign to the relationship that has existed between that great country and Canada. It speaks of the importation of

electrical energy from all foreign countries and Canada, a next door neighbour, part of the Anglo-Saxon race, and not foreign in the finer and the more noble sense of what we conceive to be the relationship which has existed in the past. Second, the president of the United States, through his Secretary of State, Mr. Cordell Hull, anticipated legislation being passed by this parliament, and plainly tells us, in cold, calm, black type, "You can pass any legislation you like, but you cannot put that power into my country," the United States, "unless you agree on the development of the deep waterway and making Fort William and Port Arthur the point of departure, passing the great city of Montreal and the city of Quebec as great shipping centres." Thank heaven, there is not a question that the maritimes are interested in that particular phase, although, speaking for myself and repeating the opinion of representative bodies, I believe the people of Nova Scotia are of the opinion that that development would be harmful to the Canadian ports.
I have a great respect for the president of the United States as well as for his Secretary of State, who is an outstanding statesman and a gentleman. Nevertheless, although they are 125 millions of people and we are only 11 millions, we have as much right in this parliament to express our opinion as to what we should do as they have to tell us what we should not do because if we do it we cannot "get by." It is like a sentry-go. The sentry stands at the gate and unless you have the pass word you cannot get in. Unless you have the password from the United States, electrical energy from Canada cannot go into that country, except under one condition, namely the development of the waterway, the development of the St. Lawrence to thirty feet, the deepening of the Welland canal- which has been done-and utilization by mutual understanding and by a distribution of the cost between the United States and Canada.
But let us not forget it is in contemplation -and I have this from those who know- that eventually through lake Erie a canal shall be built to the Hudson river and the shipping shall go down to the city of New York. Thereby our Canadian trade, which should go through Canadian ports, will be diverted through United States channels to United States ports, to the loss of our people who work on the waterfront, and our stevedores, and those whom they support, their wives and their children. Therefore I say that the legislation should stand or fall on its own merits, and without reference to these

Electric Power Export
absolutely dogmatic statements, spoken ex cathedra, that, "you shall not pass unless you do what we desire you to do, namely, carry out what we hope to get through congress, making a great waterway down the St. Lawrence river for the purpose of having ocean-going ships come up to Port Arthur and Fort William, to the neglect of the ports that are intervening on the great St. Lawrence river."
These, as I see them, are the facts. If I am wrong, hon. members can draw my attention either now or later to any mistake. I am always open to conviction, even to that which was said to me to-day that perhaps, instead of coming in at the door behind me, one of these days I might be coming in at the door opposite, and I said, "Well, if conditions changed I might be coming in at that door when I should have been coming in at this door." But that is just by the way I see no reason why I should change the door, and I see no great reason why the people of Canada should change the door either.
Under these conditions I would, if a private bill were introduced, vote to give Ontario the right to export its surplus power. I see in the press to-day a statement by the hon. member who resigned his seat in this house to become the leader of the Conservative party in Ontario, who "Rowe-d" himself from here to the capital of that province, there to sit as the leader of the Conservative party, with the design of later becoming premier. He rowed himself there; he rowed himself back, and he rowed himself into this house through the graciousness of the Prime Minister, the members of the government and others supporting the government, who gave him a seat in this house by acclamation. He goes back to Ontario and tells the people there that Mr. Hepburn does not represent anything, that he is a hydro-electric acrobat. If there is any greater acrobat than the hon. member, who is up there performing some acrobatic feats, and who is going to meet defeat, I should like to know what his recipe is, because some time, a hundred years from now, it might be that the Liberal party would need to use it, when we who are here have all gone and with us, our senses and knowledge of things on earth; we shall be in the-


Ernest Lapointe: Kingdom of heaven.


Robert Emmett Finn: No, I would not say, Mr. Chairman, in the kingdom of heaven, but I was going to say, up in the world of Marie Corelli.


An hon. MEMBER:: Where is she?


An hon. MEMBER:: Put it in French.


Robert Emmett Finn: Some hon. gentleman says, "Put that in French." If he desires it put in French and he will write it down, I shall try to pronounce it, and if I am wrong in my pronunciation I shall take my seat.
The final point is this, that if we hope to keep the provinces of Canada together in their great confederacy, we must of necessity preserve local autonomy as well as the stronger legislative right of the parliament of Canada over matters of general concern. Matters that are set out in section 92 belong to the provinces, and the powers set out in section 91 are specifically within the jurisdiction of the parliament of Canada; in the words of the leader of the opposition, "for greater certainty" it is in the British North America Act, in section 91, that all powers which are not within the purview of and set out in section 92 shall remain and be in the parliament of Canada. There we find the residuum of power in the federal government and in the government of the country-the government of to-day and of the future, which I believe will be the present government.
I desired to say what I have said only because I had an opportunity of discussing the matter with the premier of Ontario and I felt that, having done so if I sat in my seat and said nothing he would think I was like the young man of sixteen about to die. He ascended the scaffold; they put the black cap on his head and the noose around his neck, and the sheriff said to him, "Have you anything to say before we spring the trap?" He said, "Yes, I have. I am sixteen years old and about to die. So soon I am done for, I wonder what I was begun for." So let Mr. Rowe row himself back.


Ernest Lapointe: I move:
That section 9 be struck out and that the following be substituted therefor:
9. That the said act is further amended by inserting, after section 10 thereof, the following:
11. Nothing in this act contained shall affect any licence existing at the date of the commencement of the Electricity and Fluid Exportation Act Amendment Act, 1938. and every such licence may, notwithstanding the repeal of any of the provisions of this act by the said Electricity and Fluid Exportation Act Amendment Act, 1938, be renewed from time to time or revoked by the governor in council in the like manner and circumstances and with the like result and subject to the like terms and conditions as if such provisions had not been repealed but remained in force.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Bill reponted.
[Stage Direction]
Use oj Canada's Financial Resources
[Stage Direction]
use of Canada's financial resources for

[Stage Direction]
The house resumed from Monday, March 14, consideration of the motion of Mr. Dunning for committee of supply, and the amendment thereto of Mr. Blackmore.
Richard Bedford Bennett: When the house adjourned
on March 14, I was directing attention to certain matters in the absence of the Minister of Finance (Mr. Dunning), and as I understand that some doubt has arisen as to the correctness of the observations which I made, I desire to point out just what the facts are, reading from the weekly report of the Bank of Canada.	.
On the 30th day of April, 1936, the weekly report was in form C of the statute creating the bank, and under the title, "Advances to provincial governments," there appears the sum of $2,000,000 total of such advances. The same continues in the issue of May 6, May 13. May 20, May 27; and on May 30 the amount is increased to $3,000,000 under item 4, subclause (b), provincial governments, $3,000,000, total, $3,000,000. That is on May 30. It continued to be $3,000,000 for the weeks ending Wednesday, June 3, June 10, June 17, with an advance of $300,000 on the last date also to chartered banks. It continued at $3,000,000, on June 24, June 30, July 8, July 15, July 22, July 29, July 31, August 5, August 12, August 19, August 26, August 31, being for the month. On September 2, being for the week ending on that Wednesday, it was still $3,000,000; on September 9, $3,000,000; on September 16, $3,000,000; on September 23, $3,000,000; on September 30, $3,000,000; on October 7, $3,000,000; on October 14, $3,000,000; on October 21, $3,000,000; and on October 28, $3,000,000. On October 31, being the monthly statement, the amount under item 4, provincial governments, is reduced to $1,000,000, and for the first time, for the week ending Wednesday, the 28t.h, it appears in an amended form. The reserves in sterling and United States dollars are combined into one amount, and the investments of dominion and provincial governments' short term securities are combined, and likewise with respect to dominion and provincial securities under (b). These are combined for the first time in the report of October 28, 1936. On October 31 the advances to provincial governments are reduced to $1,000,000. On November 4 the amount is still $1,000,000, and on November 10 and November 18 and November 25 it is still $1,000,000. In the monthly statement of the end of

November, 1936, that $1,000,000 disappears, since which time the form of C is, as I have indicated, amended by combining the reserves in sterling and United States dollars under one heading, and the investments in dominion and provincial short term and long term securities under one heading. The increase in dominion and provincial securities does not indicate whether or not it was brought about by the payment off of the $3,000,000 advances to provinces, but it does indicate an increase of that $1,000,000.
I desire to protest against the change of form in the Bank of Canada statement, the weekly statement and the monthly statement. We all know why the form was made as it was. It will be recalled that when the commission investigated the necessity for a central bank in Canada, one of our leading gentlemen of wide financial experience pointed out that there were grave dangers in permitting the purchase of sterling and United States exchange without some limitation being imposed upon the exercise of that right. Everyone in this country, be he banker or otherwise, looking at the form of statement which we appended to the Bank Act, could ascertain exactly at the end of each week how much was held in United States funds. He could know also the exact amount held in sterling. To-day the two are combined, and it is no longer possible for either banker or other individual to ascertain how the sum total of these two exchanges is made up.


James Lorimer Ilsley: Why should it be?


Richard Bedford Bennett: Just for the reason that it was provided in schedule C in order that anyone looking at it could know how much was in sterling and how much in United States funds.


Charles Avery Dunning: What public interest would be served toy that?


Richard Bedford Bennett: The public interest of knowing exactly how the funds of this bank are being utilized.


Charles Avery Dunning: That is not a public interest.


Richard Bedford Bennett: As was pointed out by Sir Thomas White when he made his dissenting report, the reason is that the public, which now owns the majority of this bank's shares, that I as an individual might know, to what extent sterling exchange was being acquired and to what extent United States exchange was being acquired by this bank for its reserves. I have a right to know that. Any man in this country has a right to know

Use of Canada's Financial Resources
it, because we have put our guarantee behind the deposits of the banks. The banks protested against leaving to the discretion of one or two men the acquisition of reserves either in sterling or in United States dollars for the purpose of creating the reserves which have the purpose indicated the other evening by the hon. .member for Rosthern (Mr. Tucker) Now we are told that these two must be combined. I should like to know the reason why they are combined.


James Lorimer Ilsley: I can tell my right hon. friend.


Richard Bedford Bennett: Well, I suppose, in due season we shall learn, because the government for some reason made the change.
We come now to the next point. The government still left the form as to. advances to the dominion government and provincial governments and chartered and savings banks as it was in schedule C of the original act. But when we come to deal with investments, the very difficulty which I pointed out has arisen, namely, including in investments dominion and provincial securities, short term and long term, a combination of the two without making it possible for any man to know what became of that $3,000,000 of advances to the provinces. Has not every citizen of this country, every person in every province of this dominion, the right to know why $3,000,000 is advanced to one province or two provinces,	and	other	provinces	are refusedadvances? How otherwise will he know it? Is that not the very purpose for which schedule C was provided, namely, that there should be a clear, distinct severance of the advances made under the item of investments for dominion government short term securities? They stood by themselves as item (a). Then we had (b), provincial government short term securities;	(c),	other	dominion	governmentsecurities;	(d),	other	provincial	governmentsecurities; (e), United Kingdom, other British dominions	or	United States securities of
maturities exceeding three months.
That has now been modified by order in council, and the form no longer enables me or any other member of this house or any member of the public to ascertain what sum has .been invested by the bank in the different classes of these securities, namely, short term dominion, short term provincial, long term dominion and long term provincial. That, I submit, is at variance with the very principles which underlie the maintenance of this bank. I want to make it clear that it is just such things as that which brought about the criticism of central banks. We are now
just starting with a central bank; it is desirable that we should not get into a position where criticism of a kind that has -been waged against some banks should be made against us. One of the important matters in connection with this legislation was that schedule C attached to the act made clear exactly what investments were made in the securities of provinces and the dominion, either short or long term.
I come now to another matter which should be considered. The other evening I pointed out that in dealing with the question of this bank there was a phase of it of which I wished to speak when the Minister of Finance was present. On July 5, 1935, we provided for the establishment of an exchange fund. Great criticism was waged against the government of the day because we provided that, when the gold in the hands of the banks or the dominion was realized, any profit should accrue to the dominion, after making provision for the foreign obligations of the banks at their branches in various parts of the world. The Minister of Finance finally arranged with the banks that forty per cent of their gold reserves should be kept by the banks for the purpose of providing for their foreign obligations; but sixty per cent of the gold held by the banks, as well as all the gold held by the Minister of Finance, passed into the hands of the Bank of Canada. Under the Exchange Fund Act, passed July 5, 1935, we provided that this gold should be converted at the then market price, and that the Minister of Finance should derive the benfit from the revaluation of that gold at the higher price. That, in fact, was done. In order that there may be no difficulty with respect to that, I direct attention to the language used by the governor of the bank at its annual meeting, so that we may have a clear appreciation of the fact that by legislation which we enacted in 1935, this country made a profit of $63,000,000 on its gold. At page 6 of the report of the governor of the bank to the first annual meeting, on February 25, 1936, we find these words:
Tlie largest item on the asset side of our balance sheet is gold, valued at $180,509,342. When we commenced operations we acquired gold to the value of $106,584,355, of which $69,455,439 came from the dominion government and $37,128,916 from the chartered banks. Settlement for this gold was effected on the basis of the statutory value of $20.67 an ounce. Subsequently, the Exchange Fund Act required us to value the gold at the current market price. The resultant profit of about $73,500,000 did not accrue to the Bank of Canada. Section 30 of the Bank of Canada Act had provided that any profits on gold transferred to the bank would pertain to the dominion government, but it gave the governor in council power to allow the chartered banks
1606	COMMONS
Use of Canada's Financial Resources
to receive the profit on gold transferred by them, to the extent that sneh gold was deemed to have been held against liabilities elsewhere than in Canada. The governor in council determined that 40 per cent of the banks' gold had been so held, and as a result the chartered banks received $10,475,114. The balance of the profit, namely, $63,006,382, was credited to the exchange fund of the dominion government, and future profits or losses on gold held by us will be credited or debited to that account.
It should be noted that the valuation at which gold is entered on our balance sheet represents the amount which should be obtained in Canada if the gold were to be shipped to London or New York on the date of the statement. In other words, we apply the realizable value instead of an arbitrary one, and are not restricted to the price prevailing in any one particular market.
The point is that the report of the governor indicates that we made a profit of $63,000,000, and that future profits or losses on gold held by us will be credited or debited to that account. But last year I asked the government whether an order in council had been passed bringing section 6 of the Exchange Fund Act into force, and the answer was no. Section 6 of that act reads as follows:
6.	(1) For the purpose of endeavouring to control the external value of the Canadian monetary unit or of cheeking undue fluctuations in its exchange value the minister may directly or through such agencies as he may designate cause any balances in the special account to be invested in
(a)	gold;
(b)	foreign exchange as defined in section twenty-six, subsection two (b) of the Bank of Canada Act; and
(c)	balances with any bank in London or New York designated by the Minister of Finance.
(2)	Gold or other investments purchased under the provisions of the preceding subsection may be resold on instructions from the minister.
(3)	This section shall not come into force until a date to be fixed by proclamation of the governor in council published in the Canada Gazette.
Then section 7 provides:
7.	The minister may from time to time cause any portion of the balances in the special account to be employed by the Bank of Canada in the purchase of securities of or guaranteed by the Dominion of Canada. In the exercise of the powers conferred by this section the minister is authorized to make such arrangements as in his opinion will conduce to the immediate availability of the funds employed as aforesaid. The proceeds of all sales of investments made under the authority of this act, and all earnings and interest accruing thereon, shall be paid into the special account and shall be available for the purposes of the account.
Then there is provision for winding up the account. What I should like the minister

to make clear is what if anything has been done with respect to that account. An order in council had not been passed last session, and so far as I know there is nothing in the Gazette which would indicate that it had been passed since.


Charles Avery Dunning: It has not been passed.


Richard Bedford Bennett: It has not been passed. Therefore the account, with the credit of $63,000,000 to the receiver general or the Minister of Finance, still stands. It occurs to me, having regard to the language that is used in the statute, that we have a right to some explanation as to the availability of the $63,000,000 which accrued to our credit with respect to the transactions in gold.


Charles Avery Dunning: It is available.


Richard Bedford Bennett: I assumed that it would be available, naturally. It should be, at any rate.


Charles Avery Dunning: You asked the question.


Richard Bedford Bennett: Surely, but I think it should have been available without the question having been asked.


Charles Avery Dunning: Then why ask it?


Richard Bedford Bennett: Because it has not been available; that is the reason. The real fa/ct is that so far as we are concerned, a profit of $63,000,000 accrued by reason of the late administration taking what some of our friends thought was an unfair proceeding, namely, taking over the gold from the chartered banks. The reason for doing so was obvious and did not require any discussion. The banks never were authorized to be dealers in gold. They were authorized to hold gold as reserves against their note issue, and when we took over the responsibility the reserves that they held for their notes passed into our hands. We made a profit of $73,000,000, of which $10,000,000 went to the banks on their external business, leaving a net profit of about $63,000,000 on what we took over from the banks and what was in the Department of Finance.
All I suggest to the Minister of Finance is that we should have a clear indication of what has been done under that Exchange Fund Act, with respect to which I remember that the Minister of National Defence (Mr. Mackenzie), who was then the leading authority upon monetary matters, made some pertinent observations. It has a very direct bearing upon what was said by the hon. member for Rosthern and others in this house during the current session; for it meant that we had $63,000,000 available for the purposes of this country, any purpose that might be thought desirable in view of the fact that the

Use oj Canada's Financial Resources
government at no time thought it necessary to utilize the money for the exchange stabilization fund. Of course I am not unmindful of the fact that a former Minister of Finance, Sir Thomas White, indicated that in his opinion stabilization operations should not be undertaken, and the Minister of Finance tells me that they never have been undertaken.


Charles Avery Dunning: I am not agreeing with Sir Thomas White.


Richard Bedford Bennett: I do not suggest that.


Charles Avery Dunning: As yet there has been no occasion to use the fund for the purpose.


Richard Bedford Bennett: I shall make it perfectly fair and say that no proclamation has been issued by the governor in council putting the act into force, and that in the opinion of the minister no occasion has arisen for the utilization of any stabilization exchange fund.
I desire now to direct attention to what I conceive to be a statement which may be very harmful, and I cannot think that the minister really meant it in the terms he used the other evening. I want to quote his exact words, in order that there may be no misunderstanding as to my correctly stating his position. I am now looking at page 1151 of Hansard. Dealing with the question of the 8350,000,000, the minister said:
An increase of say $350,000,000 in chartered bank holdings of Bank of Canada notes would increase their cash reserves from the present figure of about $250,000,000 to $600,000,000, and their cash ratio from about ten per cent to roughly twenty-one per cent.
The sponsor of the suggestion contends that no inflation is intended or would result by thus increasing bank cash, so long as the gold cover of the Bank of Canada did not fall below the twenty-five per cent minimum. This factor, however, is not a test of inflation. If the banks use their increased cash in the normal way, as a basis for the extension of roughly ten times as much in loans to the public, or for the acquisition of ten times as much in investments, bank deposits would expand by approximately an equal amount until the cash ratio was brought down again to approximately ten per cent. This would mean an increase in bank deposits from the present level of about $2,387,000,000 to something like $6,000,000,000, or more than 2-6 times the level of December 31, 1929. Am I merely old fashioned or orthodox when I say that this would mean a colossal measure of inflation?
I doubt if any observation more serious than that has been made by any responsible minister for a very long time. The other evening the Minister of Finance suggested seriously to the thouse that an increase in deposits of $350,000,000 would increase the loans by ten times that amount, namely three and a half billion dollars, and he adds the three and a half billion to the $2,800,000,000
and makes a total of over $6,000,000,000. It
is just such talk as this, Mr. Speaker, that causes difficulty in this country. It is just because the uninformed in this country have believed that which is not so, that we have the condition we now have.


James Lorimer Ilsley: May I ask a question? Has my right hon. friend not confused reserves with deposits? I listened attentively to him and what he said now was that the minister had said that an increase in deposits of $350,000,000 would lead to the result stated. It was not deposits at all; it was cash reserves.


Mr BENNETT:: I am reading the exact language used by the minister the other evening.


Charles Avery Dunning: Cash reserves.


Richard Bedford Bennett: Just a minute. He says:
If the banks use their increased cash in the normal way, as a basis for the extension of roughly ten times as much in loans to the public-


Charles Avery Dunning: "Their increased cash."


Richard Bedford Bennett: Hold on; that is $350,000,000 deposit.


Charles Avery Dunning: No, no.


Richard Bedford Bennett: -or for the acquisition of ten times as much in investments, bank deposits-
Note "bank deposits." '


James Lorimer Ilsley: Yes.


Richard Bedford Bennett: -wpuld expand by approximately an equal amount until the cash ratio was brought down again to approximately ten per cent.
And now follow the words:
This would mean an increase in bank deposits from the present level of about $2,387,000,000 to something like $6,000,000,000.


James Lorimer Ilsley: That is all right.


Richard Bedford Bennett: "All right?" It is the most monstrous nonsense ever put upon a record. What is more, if the Minister of National Revenue knows anything about it, he would admit it at once The idea of saying that the increase of deposits of $350,000,000-


Charles Avery Dunning: I did not say that.


Richard Bedford Bennett: I am reading exactly what was said.


Charles Avery Dunning: My right hon. friend is repeatedly missing the initial sentence which he himself read. That sentence spoke of-


Richard Bedford Bennett: I have no right to be interrupted when I am reading the language used by the minister.
1608	COMMONS
Use of Canada's Financial Resources


Charles Avery Dunning: I object to being deliberately misquoted.


Richard Bedford Bennett: The hon. gentleman will have to withdraw that. There is no deliberate misrepresentation. I have read from this record.


Charles Avery Dunning: I am asking my right hon. friend to read the words.


Richard Bedford Bennett: And I have done so


Charles Avery Dunning: And he has conveniently omitted the important words.


Richard Bedford Bennett: I did not do any such thing. What is more, I will read them again; let there be no misunderstanding:
If the banks use their increased cash

That is the deposit of $350,000,000-


James Lorimer Ilsley: No, the reserves.


Charles Avery Dunning: What about the previous words my right hon. friend read? He read them once; now he is omitting to read them.


Richard Bedford Bennett: Mr. Speaker, surely I
might be permitted to rely upon the language of the Minister of Finance in his delightful essay. I shall read it.-
An increase of, say, $350,000,000 in chartered bank holdings of Bank of Canada notes-


Charles Avery Dunning: Exactly.


James Lorimer Ilsley: That is, reserves.


Richard Bedford Bennett: That is not reserves, for that purpose.
An increase of, say, $350,000,000 in chartered bank holdings of Bank of Canada notes-
I shall finish, if I am given the opportunity.

would increase their cash reserves from the present figure of about $250,000,000 to $600,000,000, and their cash ratio from about ten per cent to roughly twenty-one per cent.


James Lorimer Ilsley: That is it, exactly.


Richard Bedford Bennett: But that is not what I
am dealing with. I now come to the next paragraph.
The sponsor of the suggestion contends that no inflation is intended or would result by thus increasing bank cash-
"By thus increasing bank cash"-note that.


Charles Avery Dunning: Yes.


Richard Bedford Bennett: -so long as the gold cover of the Bank of Canada did not fall below the twenty-five per cent minimum-
That is $150,000,000, being twenty-five per cent of $600,000,000.
This factor, however


And here are the words:
-is not a test of inflation. If the banks use tljeir increased cash in the normal way, as a basis for the extension of roughly ten times as much in loans-


Charles Avery Dunning: Yes.


Richard Bedford Bennett: Mark you, ten times as
much in loans. That is, $3,500,000,000, as the minister himself points out on the
succeeding page.
-to the public, or for the acquisition of ten times as much in investments, bank deposits would expand by approximately an equal amount-


Charles Avery Dunning: Yes.


Richard Bedford Bennett: Is that not absurd?


James Lorimer Ilsley: Equal to the loans. The
deposits will increase-


Richard Bedford Bennett: But the loans, he says,
will be ten [times $350,000,000, or $3,500,000,000.
Listen:
This would mean an increase in bank deposits from the present level of about $2,387,000,000 to something like $6,000,000,000, or more than 2-6 times the level of December 31, 1929. Am I merely old fashioned or orthodox when I say that this would mean a colossal measure of inflation?
There is the language of the minister.


Charles Avery Dunning: And that is right. I still stand by every word of it.


Richard Bedford Bennett: The hon. gentleman might be compelled to, I should think.


Charles Avery Dunning: If I made a mistake I
would admit it. I am willing to have it pointed out.


Richard Bedford Bennett: And I am going to
point it out. The language used by the minister is:
Bank deposits will expand by approximately an equal amount-
That is, $350,000,000, and that there would be a credit expansion of $3,500,000,000. Now, everywhere in this country men have been going to and fro telling the people: " All you have to do is to have deposits, and the banks can lend ten times that much money."


James Lorimer Ilsley: No.


Richard Bedford Bennett: That is what has been
going on all over Canada.


James Lorimer Ilsley: Reserves.


Richard Bedford Bennett: Ten times the amount- that is what the minister said.


Charles Avery Dunning: He did not; no, he did
not.

Use of Canada's Financial Resources


Richard Bedford Bennett: Let us read it; let us
have no misunderstanding. He will not deny what is written here.


Charles Avery Dunning: Exactly.


Richard Bedford Bennett: This would mean an increase in bank deposits from the present level of about $2,387,000,000 to something like $6,000,000,000. If the banks used their increased cash in the normal way, as a basis for the extension of roughly ten times as much in loans to the public, or for the acquisition of ten times as much in investments, bank deposits would expand by approximately an equal amount-


Charles Avery Dunning: Yes.


Richard Bedford Bennett: -until the cash ratio was brought down-
That is, the deposits, enabling ten times that loan to be made.


Charles Avery Dunning: No, no, no.


Richard Bedford Bennett: Here are the words.


Charles Avery Dunning: The cash made it possible, not the deposits.


Richard Bedford Bennett: The language of the
Minister of National Revenue was that loans create deposits. That is exactly what he said. Of course I do not know what he meant.


James Lorimer Ilsley: I did not say that, but it
is true.


Some hon. MEMBERS:: Oh, oh.


Richard Bedford Bennett: I am quite accustomed
to hon. members laughing. That does not answer the question at all. There is the statement respecting " ten times," and what is more, the statement that bank deposits would expand by approximately an equal amount.


Charles Avery Dunning: Yes.


Richard Bedford Bennett: That is, following the next figure, $3,500,000,000 which added to $2,387,000,000 would make something like $6,000,000,000.


Charles Avery Dunning: Yes.


Richard Bedford Bennett: And now there follows
the observation of the Minister of National Revenue that every loan creates a deposit. Mr. McKenna, in one of his annual statements, said that every loan creates a deposit. That is true only to the extent to which the deposit may not either in whole or in part be withdrawn from the bank. That is, to the extent to which cash may be carried about or withdrawn and placed in a safety deposit box or elsewhere, that statement is not true. I may go to a bank to-51962-102
day and ask for a loan of a thousand dollars, and the bank may grant the loan. It places to my credit $1,000. Therefore a loan has created a deposit. But if I put $500 of it in my pocket, it has not created a loan for other than $500 because until such time as it again reaches a deposit in some institution, it is not a loan creating a deposit. That is so simple, it seems to me, as not to require any argument.
But let us see how far we may carry that statement. In days gone by I have heard it a great many times in this chamber from one of my friends who sat to my left, but who is not now in the house. I refer to Mr. Spencer. I wonder how many members of this house recall the story of the Merchants Bank of Canada, which negatives the whole statement that has thus been made. I wonder if they remember that the Merchants Bank of Canada was apparently one of the strong institutions of this country. It had a paid up capital of $10,500,000, with a rest fund of $9,450,000. It had a dividend rate of twelve per cent and the notes in circulation totalled $13,239,700. Deposits payable on demand totalled $38,345,152; those payable after notice, $88,087,635, and deposits elsewhere than in Canada, $3,204,602. The total liabilities of the institution were $161,507,349. On the asset side there was over $4,000,000 in gold, dominion notes amounting to $5,500,000 and $530,000 as security of its notes. There was $3,500,000 deposited in the central gold reserve, while dominion government and provincial government securities amounted to $14,000,000. Canadian municipal securities and British, foreign and colonial securities were valued at over $8,700,000, while railway and other bonds and debentures amounted to over $5,000,000. Call and short loans in Canada, not exceeding thirty days, amounted to over $7,000,000, while call and short loans outside Canada totalled over $4,700,000. Current loans and discounts in Canada amounted to $102,857,000, while those outside Canada totalled $1,110,000. Loans to provincial governments amounted to $205,000, and to cities, towns, municipalities and school districts, $3,800,000. The total assets were $182,004,625.
That was the condition of the bank as reported for November 30, in the Gazette of that year. On December 31 it was apparent that the deposits of the bank were falling away, and at that time we had to accept a very great responsibility. The Merchants Bank of Canada was failing. I use this illustration to bring home to my hon. friend this fact notwithstanding all that has been said and may be said, one fact remains us a



EDITION

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1010	COMMONS
Use of Canada's Financial Resources
grim reality about this business of banking. Here was this institution with its deposits, time and demand; with its loans; with its gold and with its securities, and there is the report as it stood at the end of November. At the end of December there had begun a shrinkage of deposits, and before the end of that month it is known to hon. gentlemen that the government of the day had to take the responsibility of either seeing the bank fail or permitting the Bank of Montreal to save it. I wonder if the efforts made by the Bank of Montreal to save the Ontario bank are known to hon. members of this house? I wonder if they appreciate the circumstances under which that was done? If the statement as indicated in the speech of the minister may be relied upon, this bank never should have failed.
Charles Avery Dunning: My statement had nothing to do with an individual bank; it referred to the whole chartered banking system in relation to the central bank. My right hon. friend knows that.


Richard Bedford Bennett: I am dealing with exactly what the minister said applied to the banks about which he knows something. I refer to the Ontario bank; I refer to the Merchants Bank of Canada; I refer to the Northern Crown bank; I refer to the Union bank. Why did these banks fail? Why were they taken over by other institutions? That is the grim reality which we are now placing before the people of this country and which has not been placed before them in the statement. It is not sufficient to talk about every loan creating a deposit; for if every loan created a deposit, the Merchants Bank of Canada would have had deposits to meet anything.


Charles Avery Dunning: If my right hon. friend will permit me?


Richard Bedford Bennett: Permit me to finish what I am doing.


Charles Avery Dunning: I did not say that with reference to any single bank.


Richard Bedford Bennett: I am talking about the realities of this situation. Unfortunately or fortunately I have been through many of these experiences in my time. I have been a director of a bank, and I know something of the reasons why many of our chartered banks have been absorbed. People talk about amalgamation; but I can tell the house that the government of that day had to take the responsibility of permitting the Merchants bank to be acquired by the Bank of Montreal or we would have had one of the most 
amazing spectacles that could have been witnessed in this country. We would have had a situation that would have beggared description. Here was a bank with assets amounting to nearly $200,000,000, and there was this vast accumulation of cheques on Saturday which would be presented on Monday and which the bank could not pay.


Charles Avery Dunning: Had not enough quick assets to meet them.


Richard Bedford Bennett: Quite. What happened to the Union bank? Does anyone suggest that the iRoyal bank wanted to take over the Union bank? They were asked to do that by the government of the country.


Charles Avery Dunning: And the Weyburn
Security bank.


Richard Bedford Bennett: That was taken over by the Imperial bank for the same reason. There was also the Northern Crown bank. We had this situation developing which I think every hon. member should understand clearly. When you go about and make the observation that every loan creates a deposit when there are not sufficient deposits to pay every cheque that comes in, you are inducing the people to have an entirely erroneous understanding of the whole situation. I use this illustration to indicate that when unfortunately loans have been frozen beyond the ability of the bank to produce the money to pay, then my deposit has passed from it. That is what I want to make clear. I want to make it clear that this statement so often made by so many people is misleading. Sometimes they think they are well informed, but they forget that the grim realities of the situation are these: Unless a bank is in a position to meet the cheque which is presented by its depositor, the bank is insolvent. It does not make any difference how much it has in loans, it must be able to pay your cheque. That is what it must be able to do because your cheque is payable on demand, unless you have a time deposit.


James Lorimer Ilsley: The right hon. gentleman is talking as though deposits were an asset of a bank when they are in fact a liability.


Richard Bedford Bennett: I have not suggested that they are anything else.


James Lorimer Ilsley: You are basing your whole argument on that fallacy.


Richard Bedford Bennett: I am not doing any such thing. If the hon. gentleman cannot follow me, it is not my fault. The statement is made that every loan creates a deposit, and a loan is an asset.
MARCH 22, 1938	icn
Use oj Canada's Financial Resources


Charles Avery Dunning: With regard to the banking system that statement is broadly true, but it may not be true with regard to an individual bank.


Richard Bedford Bennett: If it is not true with regard to an individual bank, it is not true with regard to the banking system. In other words, the Minister of Finance puts forth this strange doctrine, that this is true with respect to the system but it cannot be applied to the elements which go to make up the system.


Charles Avery Dunning: That is quite true.


Richard Bedford Bennett: It is not true.


Charles Avery Dunning: Where did the money go that was withdrawn from the Merchants bank by the depositors?


Richard Bedford Bennett: It was in loans that created deposits, and the loans were frozen. They were unable to pay the claims made against them and there was a decrease in deposits.


Charles Avery Dunning: My right hon. friend has misunderstood my question.


Richard Bedford Bennett: The deposits in the bank decreased only a reasonable amount. I have them beside me. The loans on December 31-[DOT]


Charles Avery Dunning: It is the deposits you want.


Richard Bedford Bennett: I am taking the loans now. Please permit me to do one thing. The loans in Canada on December 31, 1921, were $91,000,000, while in the month before they were as I read, $102,857,000. Call and short loans outside Canada were $4,700,000, and they had fallen to $3,900,000; call and short loans in Canada, that is loans on demand, were practically $5,596,000 as against the $7,000,000 that existed at the end of the preceding month. In so far as the deposits are concerned, this was the story. Deposits payable on demand at the end of November amounted to $38,000,000. Demand deposits had fallen to $35,800,000-not a very large amount.


Charles Avery Dunning: At what date?


Richard Bedford Bennett: The next month. And deposits payable after notice at the end of November, amounted to $88,000,000; they had fallen to $76,000,000 in December. The result was that, with just that small variation of $15,000,000, because of the nature of the loans the bank was unable to carry on.
I could multiply these instances if it were thought desirable, but I mention this for the purpose of trying in my own poor way to remove from the minds of some of our friends the thought that money is made merely by lending it. Every hon. member knows that 51952-1021
in western Canada people go about and make the statement that all you have to do is to make loans enough and your deposits will be large enough to do anything with them.


An hon. MEMBER:: You cannot do it personally, in your own business


Richard Bedford Bennett: Of course not. That is the position to which I desire to direct attention. I do not do this for the purpose of finding fault; I am trying to induce the minister to remedy what I conceive to be a misapprehension on the part of many people with respect to that matter. Unconsciously, and not with any intention at all, the statement made at the pages to which I have referred was calculated to and did leave an erroneous impression on the minds of those who read it. I do not mean-


Charles Avery Dunning: Mr. Speaker, I object to the word "calculated." It is not calculated to leave an erroneous impression.


Richard Bedford Bennett: How about "deliberate"?


Charles Avery Dunning: I withdrew it.


Richard Bedford Bennett: No; the hon. gentleman did not.


Charles Avery Dunning: Well, I do now. I think I did.


Richard Bedford Bennett: Once more, how evil it is to think of things that are not done. I say, "had the effect." When I use the word 'calculated," do not think for a minute I suggest that the minister calculated it. I used the word in its proper sense-was calculated to and did leave an erroneous impression on the minds of those who read it. That, I think, is the proper and correct use and intention of the word.


Charles Avery Dunning: I object to it.


Richard Bedford Bennett: If there is any doubt about it, I shall put it in this way-had the effect of leaving that impression on the minds of those who read it.


Alan Webster Neill: Was likely to.


Richard Bedford Bennett: The hon. member for Comox-Alberni (Mr. Neill), with that fine and nice distinction with which he uses words, suggests that I should say "likely to," and I am quite content to do so.
I should particularly like, before I turn to another matter, to leave on the minds of my friends to the left this clear impression, that banks do not make money in that sense, nor do they make credit, unless they have real deposits with which to make it. That is the fact.

Use of Canada's Financial Resources


Charles Avery Dunning: That is what I said.
Cash. It started with cash, Bank of Canada cash.


Richard Bedford Bennett: The hon. gentleman may change his words as much as he pleases. I have read them.


Charles Avery Dunning: No; I am quoting them. Cash.


Richard Bedford Bennett: I quote them also. So
they must have a kaleidoscopic way of appearing; they appear one way to me and another way to him.


Charles Avery Dunning: Perhaps that is a fair
way to put it.


Richard Bedford Bennett: Let us turn to another
point, the question of the negotiation of $35,000,000, to which the minister referred. At page 11145 of Hansard he said:
However, no action was taken until about the close of this deflationary period, in November, 1932.
Mr. Bennett: And the exchange situation was the cause.
Mr. Dunning: Yes. I shall give my right hon. friend credit, if he will have patience.
Mr. Bennett: I am not concerned with that.
Mr. Dunning: -when my right hon. friend persuaded the chartered banks to issue $35,000,000 under the Finance Act in order to relieve the cash shortage which had developed and which threatened to become more acute. I am not inclined to criticize my right hon. friend for the action he then took, certainly not for his general objectives. My real criticism would be directed rather against the tardiness of and perhaps also the lack of vigour in his measures. I realize, of course, that the machinery which was available to his hand was inadequate and cumbersome, and that any bold and aggressive measures would have been bound to meet the strongest possible resistance from the orthodox financial world.
I am going to direct attention to the language in that regard of the governor of the Bank of Canada. I mentioned a matter which I think the house should always keep in mind when dealing with this problem, that is, that we are different from Australia, for instance, whose only creditors were Great Britain and themselves. We found ourselves owing vast sums of money to the United States of America, they being in fact our principal creditor, if you take into account loans to corporations, private and public, to our state, and to the provinces and municipalities. We also owed large sums in England. On the one hand you had the exchange with respect to the pound sterling, and on the other hand the difficulties in connection with exchange with the United States of America. The Minister of Finance suggests that there was a certain measure of tardiness with respect to the action that was taken. May

I remind the house that in 1932, when the empire agreements were being considered, the Liberal party voted to tie the dollar to the pound. They voted as a body to that effect. We resisted that; for to tie the dollar to the pound at that time would have done incalculable harm to this country, in view of what happened afterwards. We had on the one hand to pursue a course which would not raise exchange to any higher point than it had risen with the United States, where we had payments to make at that time in gold or its equivalent; and we had on the other hand to maintain our exchange position with Great Britain, Great Britain herself being in a most difficult position with respect to exchange. What did we do? We pursued the middle course, and we maintained so far as possible for our dollar a value that lay in between the pound on the one hand and the United States dollar on the other. Hon. members must know of the attention given to that matter by the Bank of Canada, which had to consider it on more than one occasion. I shall content myself with reading these words from page 13 of the first report of the Bank of Canada:
The Canadian dollar has exhibited a remarkable tendency, when not at parity with the pound or United States dollar, to take up an intermediate position. Obviously, in the long run, the purchasing power of our dollar must approximate that of the United States dollar and the pound sterling, or there would be a marked divergence in exchange rates. From the point of view of short term movements, it is probable that the large volume of United States and United Kingdom investments in Canada, and the existence of so many Canadian bonds payable in two or three currencies- a feature of our financial economy which is not found to an important degree in any other country-have had a tendency to restrict fluctuations in our exchange rate. A discount on the Canadian dollar in the United States encourages purchases of Canadian securities; a premium encourages selling; and the situation vis a vis the United Kingdom is the same.
One must add to this statement by pointing out that relative price levels in the security markets of the three countries, and the degree of confidence in our position, are important factors in security transactions.
So that we have the authority of the Bank of Canada for the position which we took. But I think it well in this particular to point out that exchange rates in the United States rose to the very high figure of 25 per cent, and at one time higher still. In other words the Canadian dollar was worth only seventy-five cents, and at one time a little less. Confronted with that position, we dared not anticipate and take the action which we took in 1934; for to do so would have been ruinous to the confidence which we must

Questions


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restore in the United States to save our creditAt eleven o'clock the house adjourned,
in that market. Gradually, what did we have to do? We had to restrict imports so as to build up in that market a currency balance which would enable us to push our dollar up to as near parity as possible and restore public confidence in our securities. That we did, and it was a difficult process. That we did also in the United Kingdom, and that, too, was a difficult process. I should like to point out, lest there be misunderstanding on that score, just what did happen with respect to that matter, because it must be within the knowledge of hon. members that we had not only a difficult task, but a task which was a legacy from the former administration. The Minister of Finance must know exactly what the trend of the trade was when he left office. He knew that an adverse debt balance had been created in this country. He knew that we had this terrific responsibility with respect to interest charges on our obligations, private and public, as well as municipal in the markets of New York, and he knew also our position in Great Britain.
I have here a report issued by the statisticians of this country giving the story during all those years of what you might call the estimated British and foreign capital invested in capital investments abroad as at December 31, 1937, and preceding years, showing the slow progress that we made in being able to restore our credit position both in London and in New York.
without question put, pursuant to standing order.
Wednesday, March 23, 1938