1939-04-11

[Stage Direction]
Right Hon. ERNEST LAPOINTE (Minister of Justice) moved for leave to introduce Bill No. 90, to amend the criminal code.
He said: This is the annual bill to make certain amendments to the criminal code, many of which are usually sought by the attorneys general of the provinces. This year many sections having to do with military affairs will be amended by inserting the words "air" and "airman," because when these sections were enacted there was no air force. These amendments will put the air force in the same class as the other branches of the militia. The hon. member for Winnipeg North Centre (Mr. Woodsworth) is not in the house, but I am introducing an amendment which will meet, as far as that is possible, what he had in mind in his proposed amendment to the criminal code concerning intimidation and efforts to prevent working people from joining labour unions.
Motion agreed to and bill read the first time.


[Stage Direction]
Right Hon. ERNEST LAPOINTE (Minister of Justice) moved for leave to introduce Bill No. 91, respecting the Chief Justice of Canada.
He said: Mr. Speaker, the purpose of this bill is to provide that the present Chief Justice of Canada may continue to hold this office for a period of three years after the 7th day of January, 1940. I will give the reasons on the second reading.
Motion agreed to and bill read the first time.


[Stage Direction]
Bill No. 77, for the relief of Constance Lillian Talbot Mais Pocock.-Mr. White.
Bill No. 78, for the relief of Edith Cecilia Shaw Mayne.-Mr. Walsh.
Bill No. 79, for the relief of Leslie William Bond.-Mr. Walsh.
Wednesday Evening Sittings


Right Hon. W. L. MACKENZIE KING (Prime Minister) moved:: That on Wednesday, the 12th of April, 1939, and all subsequent Wednesdays until the end of the session, the sittings shall in every respect be under the same rules provided for other days.
Mr. ANGUS MaoINNIS (Vancouver East): Mr. Speaker, I think this small group will have to oppose the motion at the present time. It is a motion which comes at some time during each session, but I have never known it to come as early in the session as it has this year. In previous years it has come when the business of the session is near the end, or when the end of the session is in sight. There is no indication at the present time that the business of the session is nearing its end. There is plenty of business on the order paper. The budget is yet to be brought down, and there may be some new legislation.
Speaking for this small group, may I say that we particularly feel the need of Wednesday evenings. Being a small group in the house I suppose we may have to work harder than other larger groups, certain members of which may specialize on certain work.


Mr. LAPOINTE (Quebec East):: What
about us?


Mr. MacINNIS:: I think hon. members
opposite will appreciate what I say. I have looked over the records for the last three years and have found that in 1938 we sat on two Wednesday evenings, in 1937 on two, and in 1936 on one. It seems to me that even if we sit to-morrow evening the business of the house is likely to carry on for another four or five weeks. For these reasons I think the Prime Minister should not press the motion.


Hon. R. J. MANION (Leader of the Opposition):: Mr. Speaker, I rise to oppose the motion in a general way, and on a little different ground, although I should not like to oppose it to the extent of voting against it. At the present time we are sitting here four days of the week from three o'clock in the afternoon until eleven o'clock at night, and on Wednesdays we sit until sax o'clock. Shortly the proposal will be made that we sit in the mornings, and with that I personally have no particular quarrel. But I doubt whether by sitting here five evenings in the week we accomplish a bit more than we do by sitting four evenings. The reason I say that is this, I think it is not physically advisable that hon. members should be sitting here, as we shall be sitting shortly, from [Mr. E. Lapointe. I
eleven o'clock in the morning until eleven o'clock at night, and do it five days of the week. It does not give us time to recuperate to a certain extent from the long hours, and it puts the whole house in an irritable mood which is much more inclined to delay work than to advance it.
I do not wish in any way to delay the work of the house; in fact I am in favour of hurrying it along. At the same time I do not think Wednesday evening sittings as early in the session as this, having in mind the comparison made by the hon. member to my left, are going to help us along. I believe the matter might be held up another week before putting the motion into effect. I am really of the opinion-and perhaps I am speaking more medically than anything else -that we shall accomplish more by sitting four nights of the week than we would by sitting five.


William Lyon Mackenzie King: I may say to my hon. friend that I am quite prepared to accept his opinions from the medical point of view, even if I do not always see my way to accept them from the political point of view. However-


Robert James Manion: You will be shortly.


William Lyon Mackenzie King: However, probably we shall all get along better if we agree upon a week hence, instead of this Wednesday, and I hope this will be satisfactory to the house.
May I say to the hon. member who has spoken on behalf of the group in the far corner of the house that his figures and mine are somewhat different. I find that in 1937 the house opened on January 14 and that Wednesday evenings were taken away on March 24. That was after a much shorter time than we are asking this year. There were three Wednesday sittings of the house after that date before the end of the session. This year, as will be recalled, the house met on January 12. It met earlier this year than it has in most other years. For that reason we had thought of taking Wednesday evenings a little sooner.
Perhaps it will help to bring about unanimity if I amend my motion to read:
That on Wednesday, the 19th of April, 1939, and all subsequent Wednesdays until the end of the session, the sittings shall in every respect be under the same rules provided for other days.
I think I may say, without any exception being taken to the observation, that no one appreciates Wednesday evenings more than do the members of the government. The only reason we are asking the house to sit Wednesday evenings is that we believe that

Toronto Post Office Building
in. the end it will the better suit the convenience of the house if at this stage we get on with the work as rapidly as possible.
Motion as amended agreed to.



LIVE STOCK AND POULTRY


[Stage Direction]
Hon. J. G. GARDINER (Minister of Agriculture) moved that the house go into committee at the next sitting to consider the following proposed resolution:
That it is expedient to introduce an act to provide a new measure of supervision oyer stockyards and stockyard operations; and with respect to the grading, inspection and branding or marketing of live stock and live stock products; also to give legislative authority for the continued enforcement of the government program respecting the conditions under which live poultry may be produced and sold in Canada. The bill also makes provision for the appointment of officers necessary for the proper carrying out of the provisions thereof.
He said; His Excellency the Governor General, having been made acquainted with the subject matter of this resolution, recommends it to the favourable consideration of the house.
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mr. DAVID SPENCE (Parkdale):: Mr. Speaker, I have a question I wish to ask the Prime Minister (Mr. Mackenzie King) or any other competent minister-and we have many of them. The Minister of Public Works (Mr. Cardin) to-day, as usual, is not in his seat. He has been away for a considerable time.


Some hon. MEMBERS:: Order.


David Spence: I hope he is enjoying it.


Mr. SPEAKER:: I do not think the hon. member is fair in his reference to the Minister of Public Works.


David Spence: I apologize, if I have said anything to hurt the hon. member's feelings. I am speaking in the interest of the city of Toronto, part of which I represent. Last year we put through a vote in the house for $150,000 to start the building of the terminal post office. Since that time the secretary of the Department of Public Works has sent out an order asking the contractors to return their specifications. That must mean something. I see no revote of $150,000, nor do I see an item in the estimates of the department to
carry on the work. The city of Toronto has depended on the building going up, because in preparing its estimates it figured that this building would take care of a number on relief.


An hon. MEMBER:: What is the question?


Walter Edward Foster: I believe this is a question which might go on the order paper.


David Spence: I cannot ask the question until I am permitted to explain it. I know a lot of people have been doing it the same way as I am doing it.


Walter Edward Foster: The hon. member will state his question. It would appear that it is one which does not come properly on the orders of the day, but might better be put when the estimates for the Department of Public Works are before the committee and the minister will be here to reply.


David Spence: I wish to know if the government has abandoned altogether the idea of erecting this building.	'


Ernest Lapointe: The question has been asked.


Hon. FERNAND RINFRET (Secretary of State):: As Acting Minister of Public Works I can assure my hon. friend that the matter is still under consideration, and the project has not been abandoned. I expect my colleague to be here to-morrow, and possibly he can give a fuller reply.


David Spence: That is what you said over a week ago.


Louis Édouard Fernand Rinfret: The question was put only the day before the adjournment for the Easter recess.


Mr. H. G. CLARKE (Rosedale):: Mr. Speaker, the hon. member for Parkdale (Mr. Spence) has put fairly well the question I was going to ask. However, I should like to go a little farther and ask this: As there is no revote, will a further supplementary estimate be brought down to cover this matter?


Walter Edward Foster: That is not a proper question to put on the orders of the day. It involves a question of policy which should be decided by the minister or Iby the government.



LOAN OF $750,000,000 TO MEET LOANS OR OBLIGATIONS, TO PURCHASE UNMATURED SECURITIES, AND FOR GENERAL PURPOSES

[Stage Direction]
Hon. CHARLES A. DUNNING (Minister of Finance) moved that the house go into
Loan of W50,000,000
[Stage Direction]
committee to consider the following proposed resolution:
That the governor in council be authorized to raise by way of loan under the Consolidated Revenue and Audit Act, 1931, an amount not to exceed in the whole the sum of seven hundred and fifty million dollars for paying or redeeming the whole or any portion of loans or obligations of Canada, and also for purchasing and withdrawing from circulation unmatured securities of Canada, and for public works and general purposes.
Motion agreed to and the house went into committee, Mr. Sanderson in the chair.
Mr. J. C. LANDERYOU (Calgary East):: Mr. Chairman, nothing affects the economic welfare of our country more than our money policy. We have contended that our monetary system must reflect the country's collective ability to produce and distribute goods and services for the people of Canada. The borrowing of this $750,000,000 will affect every man, woman and child living in Canada to-day, and it will affect also the lives of every man, woman and child who may live in Canada in the years to come. We maintain that our monetary system must be corrected if civilization is to progress. Every time we make a proposal the Minister of Finance (Mr. Dunning) raises the issue of inflation, but I should like to refer to a statement by the minister as reported on page 1527 of Hansard of March 3, 1939, as follows:
My hon. friends deny on all occasions that they advocate inflation, but they propose resolutions similar in terms to the one we now have before us, which does mean the issue of currency by the Bank of Canada to the extent of from $500,000,000 to $750,000,000 more currency than is now outstanding, which would mean an increase in the total currency available in thip country of from two and a half to four and a half times. Now, my hon. friend says he does not advocate inflation.
I say once more that we do not advocate inflation. It is well to remember that the provincial debt, the municipal debt and the national debt are all increasing. In 1912 the net debt of Canada was $339,919,461. In 1913 it was $314,301,625 and in 1914, $335,996,850. At that time the debt was approximately equal to the amount of currency available in the country, tout to-day our debt is atoout eighteen times greater than the amount of currency in circulation. Our provincial debt in 1925 was $813,400,000, about five times greater than all the currency available in circulation. By 1935 this had risen to $1,622,100,000, or albout ten times greater than all the currency available in circulation. In 1926 the municipal debt was $1,050,206,121, or six times greater than all the currency in circulation. By 1935 this had risen to $1,452,850,565 or nine times greater than all the currency in circulation. So our total

municipal, provincial and federal debt is many times greater than all the currency available in circulation.
Considering the tremendous inflation which has occurred in the debt of the country, it is hardly right to say that the issue of $600,000,000 would be inflation. I suggested that the government should issue $600,000,000. This issue would be without cost to the government, apart from the cost of printing. But what was the answer of the Minister of Finance? His answer was in these words:
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-four 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 a 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.
If instead of issuing bonds and having the bankers create credit out of nothing, as we have done in the past, the government would issue $600,000,000, under our present banking laws it would mean inflation. If the banks were permitted to take $600,000,000 worth of cash and expand credit ten to one, it would mean an increase of $6,000,000,000 in the credit of this country. That is provided there were borrowers who would be prepared to take the money. Our banks cannot always get rid of their surplus credit, and this would depend upon whether or not there were borrowers ready to borrow from the banks. At the present time it must be remembered that our banks have only ten per cent cash reserve. Time and time again the government have said that they have control of the issue of currency and credit day by day, week by week and month by month. If the government takes action and forces the banks to increase their cash reserves, takes action to prevent the banks from inflating credit, then there would not be one dollar's worth of credit expansion in this country. The Minister of Finance knows that full well.


Mr. DUNNING:: I take no exception to my hon. friend advancing his own argument, but I must protest when he states that I agree with it. I do not.


John Charles Landeryou: I should like to ask the minister what is wrong with that. I shall ask him this question.

Loan oj $750,000,000


Mr. MICHAUD:: There is nothing right about it.


Mr. LANDER  YOU@: At the moment there are approximately $2,000,000,000 of bank deposits in this country, while the cash reserves amount to only 8300,000,000. If there was a run on the banks what would happen? The banks would not have the cash to meet their obligations.


Charles Avery Dunning: That is not correct.


John Charles Landeryou: It is correct the way the law is at the moment. The banks have not the cash to meet their deposit liabilities.


Charles Avery Dunning: Lest the Canadian people gather from m.y hon friend's remark that there is some uncertainty regarding their deposits in the chartered banks, I wish to say that the statement made carries with it a wholly wrong inference. There is no ground for the belief that any Canadian chartered bank cannot meet the demands of its depositors, under the Canadian law as it now stands. I cannot make that statement too strong. My hon. friend is quite wrong if he tries to convey to the public of Canada that there is not maximum safety with regard to the obligations of the Canadian chartered banks to their depositors.


John Charles Landeryou: I did not say that the banks did not have assets behind their deposits. No one is questioning that. They have over $1,400,000,000 worth of municipal, provincial and federal securities as assets behind their liabilities to their depositors. They have plenty of assets-I am not questioning that; but all they have in actual cash to meet their liabilities does not total more than $300,000,000. The question I ask the Minister of Finance is this: If there was a run on the banks in Canada, as there was in the United States a few years ago, and in England in 1914, would our banks under the present laws have the cash to pay off the depositors?


Charles Avery Dunning: The Canadian banks
under the present laws would positively be able to secure the cash to meet immediately the demands of their depositors.


John Charles Landeryou: They would be able to raise it; I do not question that.


Charles Avery Dunning: No, secure it.


John Charles Landeryou: How would they secure it? By going to the dominion government and asking them to print the money.


Charles Avery Dunning: No, no.


John Charles Landeryou: Could they secure the cash without a suspension of the gold clause?


Charles Avery Dunning: Positively yes. But, Mr. Chairman, I do not want to take the time of this committee once more, as I have on three different occasions when my hon. friend and his associates have cross-examined me, to go into an elaborate discussion of the basis of our banking laws and banking system. I tried to meet that demand and to save the time of the house by moving in the house that the report of the Bank of Canada be referred to the banking and commerce committee, to the end that all members of the house who desired it might in the banking committee have the privilege of cross-questioning not only myself, if they wanted me, but also the officers of the bank and the officers of the department. No one can say that there has not been ample opportunity in the house this session for the ventilation of views on the question of monetary policy. I do not propose this afternoon again to go into detailed technical argument, as I did before, on this question, because it is being carried on very effectively in another and more appropriate place. I rise only when my hon. friend makes a statement which at a critical time like this might possibly weaken the confidence of the Canadian people who have their money on deposit in Canadian banks. There are four million depositors, and I am very much more concerned about them than about my hon. friend's argument. That is the only reason I rise, when he attempts to put forward the idea that there is some lack of security with respect to the deposits of the Canadian people in the chartered banks. In my opinion the Canadian banking system as now operated through the control exercised by the central bank, is in a more secure position in relation to its depositors than it has ever been before in the whole history of Canada.


John Charles Landeryou: I do not question that, and I am very glad to hear the minister say it. While there are over four million depositors in Canadian banks, the lion's share of the deposits belongs to a very small percentage of the total number of depositors. I read the other day a statement by a bank in relation to these deposits, as follows:
There were on October 31,	1935, over
4,600,000 depositors in the chartered banks, with deposits aggregating $2,090,508,000, representing an average of about $450 for each account.
That is a very nice way of presenting it- giving total deposits of over $2,000,000,000, and the number of depositors as over four million, with an average deposit of $450. But it does not work out that way. My average is not $450, and the average of over three million depositors is not $450, but a good deal less than that. In fact, 4,290,695 depositors
Loan oj $750,000,000

having on deposit the sum of $501,881,610 were grouped as having on deposit less than $1,000, or an average of about $117 for each account. There were 302,743 depositors having on deposit $598,611,600, grouped as having between $1,000 and $5,000. There were 41,815 depositors having on deposit $376,319,432, grouped as having between $5,000 and $25,000. There were only 4,402 depositors having on deposit $199,461,844, grouped as having between $25,000 and $100,000 and 1,223 depositors having on deposit $407,229,739, grouped as having over $100,000. In other words approximately 71 per cent of the depositors owned 76 per cent of the deposits; and 92f per cent of the depositors had an average of $117 on deposit, or 24 per cent of the total deposits.


Charles Avery Dunning: Will my hon. friend give his authority?


John Charles Landeryou: Page 910, Currency and Banking, Canada Year Book, 1936.


Charles Avery Dunning: What Currency and Banking?


John Charles Landeryou: Canada Year Book,
1936.	I have the figures for the other years, and they are approximately the same year after year.
When I asked the Minister of Finance just what limit he woidd place on the ability of Canada to carry the debt burden, just how far we could go, just what was our capacity to pay, the minister had this to say-and I shall quote from Hansard because I do not want it said that I misquoted him. I asked this question:
Just how much further can we go in piling up our national debt?
The Minister of Finance answered:
All history show's ns that nothing shifts more rapidly or more unexpectedly than people s ability to carry their communal, financial and economic burdens. All through history we have had the Jeremiahs telling each succeeding generation that the end was coming, there was no hope, the load was too heavy, and so forth. Yet each succeeding generation has evolved methods of carrying that load or of adjusting it. Any dogmatizing by myself or anyone else as to what can or will be done in the future in relation to the debt creating or debt carrying capacity of a people would be merely the wildest of speculation.


Charles Avery Dunning: Hear, hear.


John Charles Landeryou: "Hear, hear," the minister says. But those are not the words he used some time ago. Let me refer to another statement which he made, as reported at page 86 of the Canadian Annual Review:
Later, in an interview with the press Mr. Dunning emphatically stated that his chief concern was to preserve intact the credit of the dominion and that political considerations were entirely absent from the communications

with the Aberhart government. He added that the existing total of western provincial borrowings was about $114,000,000 and that ability to pay back rather than ability to borrow was the real test to be applied in future requests from the provinces for aid in their financing.
In the one instance he sets a limit of $114,000,000, and he says it is ability to pay back, and not ability to borrow, that determines whether they should get the money. But look at the municipal debt in this country. I believe there is $114,000,000 of municipal obligations in default in Ontario alone. What is the total amount in default in all the municipalities? The Montreal Gazette of Wednesday, February 26, 1939, says, under the heading " Province is fast losing its financial autonomy ":
"The errors of an unwise financial policy have always been fatal to every government in the history of civilization." These stirring words should be chiselled into two marble monuments and one placed before the city hall at Montreal and the other before the entrance to the House of Commons, parliament buildings, Ottawa, Canada.
The paper prints circles showing the amount of debt of the city of Montreal, and the percentages. It says that the present total bonded debt of all rural municipalities is $558,736,888.
This circle presents the most tragic^ picture in the financial, economic and constitutional history of the province of Quebec. The farming communities of our province are mostly dominated and subjugated by crushing debts imposed upon them by the politicians of the federal governments at Ottawa. The share of the rural municipalities in the federal government debt, on a per capita of population basis, represents SI-06 per cent of the aggregate rural debts amounting to $558,736,088.
Montreal, the largest circle in the centre of this chart, shows a total bonded debt of $666,194.049.
The city's share of the federal government debt, on a per capita of population basis, represents 41*84 per cent of the aggregate bonded debts of $666,194,049. The city s own debt of $278,207,378 represents 41*76 per cent of the aggregate debt; the city's share of the debt of the government of the province of Quebec, amounting to $55,159,475, represents only 8*28 per cent; the debt of all the schools of the city of Montreal represents 8*12 per cent. The above amounts and percentages have increased considerably since the year 1936. All amounts given in the above chart are taken from official returns of the fiscal year 1936.
This illustrates the crushing weight of the tremendous burden of debt which is being piled up by this federal government. The mayors of the dominion are meeting now to discuss their problems-


Charles Avery Dunning: I now must rise to a
point of order. The resolution before the committee relates to the borrowing of money by the federal government for federal purposes. With respect to a general discussion

Loan of $750,000,000
of debt I have raised no objection, but if my hon. friend is going to import into this discussion a detailed analysis of the municipal debt situation of Canada, over which, under our constitution, no government of Canada has ever yet exercised control, and is going on from that into the general debt question, I submit that it bears no relationship to the borrowing of $750,000,000 by this dominion. The discussion ought to be kept to the borrowing of $750,000,000 by this dominion for dominion purposes.


Mr. PELLETIER:: Would the Minister
of Finance tell us whether or not the $750,000,000 means an increase in the debt of this country?


Charles Avery Dunning: I have answered that
question before, and I am now addressing myself to a point of order in respect to the remarks of the hon. member for Calgary East.


John Charles Landeryou: I wish to say-


The CHAIRMAN:: Order.


John Charles Landeryou: I just want to speak
to the point of order. The borrowing of $750,000,000 will have a vital effect upon every man, woman and child in this country. The borrowing of this sum will at least maintain, if it does not increase, the present debt structure. In my opinion there is a method of reducing this debt burden without causing inflation, and with beneficial effects upon municipal and provincial finances.


Mr. BLACKMORE:: On the point of
order, if the debt structure of the Dominion of Canada and the provinces and the municipalities does not have a direct bearing on the proposal to borrow another $750,000,000, I should like to know what on earth does have a bearing on 'it. What would one discuss in order to be in order?


Charles Avery Dunning: If I might develop a
little further the point of order, there is nothing to prevent a discussion, in the proper place and at the proper time, of the matters to which the hon. member for Calgary East is referring. My hon. friends have been allowed a very wide latitude on this resolution. They have taken up more time on it than 1 think was necessary to make their point. Really it was left over to give them the opportunity to move an amendment. Their views are very well understood. The matters to which my hon. friend the leader of the Social Credit group now refers are proper subjects for discussion in the budget debate, wherein all kinds of financial questions are dealt with. The present debate concerns itself with the authority to be given to the government, to bor-71492-168
row $750,000,000 to meet maturing obligations of the dominion and to meet such sums as may be voted from time to time by parliament in excess of the revenue of the country. I submit that the discussion should be confined to the resolution and not be allowed to develop, as my hon. friend is developing it, into the kind of debate which under the rules of this house can take place only on the budget. I submit to the common sense of the committee that we should not have a general budget debate on every single financial resolution which comes before the house. It seems to me that the whole purpose of parliament is being set at naught and our rules are being set at naught if we allow that kind of thing.


John Charles Landeryou: I have no intention of going outside the rules of order or of breaking any rule. I will address myself to some of the statements which were made by the Minister of Finance in the discussion of this resolution. He says that the house generally understands our proposals. May I say that he does not in the least understand our proposals.


Charles Avery Dunning: I beg my hon. friend's pardon; if I said that the house understood my hon. friend's proposals, or that I did, I was quite wrong. What I should have said is that it was not for lack of continuous presentation by my hon. friend and his associates that we do not understand them. That is not his fault. He has attempted to get them into our somewhat obtuse minds. But I venture to say that outside of his own group, and even within it, there is not as yet a very clear understanding of what it is all about.


John Charles Landeryou: I will refer to the statement made by the Minister of Finance as it appears on page 1528 of Hansard of March 3, 1939:
Mr. Dunning: At any rate, in order to carry out my hon. friend's ideas logically, taxation ought to be abolished altogether; because if you can safely print unlimited sums of money, and the government has the power to do so, why not print enough instead of bothering to tax people?
Well, we never suggested anything like that. He goes on to say:
For Canada to embark on uncontrolled inflation of credit or currency or both, would in my opinion be national suicide.
I agree with him, and we never suggested that. What did we suggest? We suggested that the government issue $600,000,000 worth of money. That is what we suggested, and it was suggested by many of his own col-

Loan of $750,000,000

leagues. The printing and issuing of $600,000,000 worth of currency will, in the minister's opinion, cause inflation, but the borrowing of $600,000,000 will not create inflation. If this $600,000,000 were issued by the government it would go out to the people who now have the bonds; the government would secure the bonds and reduce Canada's national debt by $600,000,000 and the interest charges thereon, so reducing the usury-and no one protested to a greater extent against usury than did the Prime Minister himself. The $600,000,000 would be deposited in the banks by these people, if they did not keep it in their pockets. Then, according to the Minister of Finance, that $600,000,000 would be a basis for the expansion of credit on the part of the banks; but surely, if the government has control over the issue of money and credit, it can so regulate money and credit that the banks cannot inflate credit to the tune of $6,000,000,000, or to any extent. By amendments of existing legislation, or the passing of new legislation, the banks can be easily prevented from extending unlimited credit, and all that will have been done will be to increase the reserves of cash in the commercial banks.


Charles Avery Dunning: Would my hon. friend permit me a question? He there implies that the money would be deposited in the chartered banks. That is understood?


John Charles Landeryou: I said, not necessarily. People could keep it in their pockets, but if they did not do so, logically it would go to the banks.


Charles Avery Dunning: Does my hon. friend suggest that the banks could possibly pay any interest on that money if they had to hold the whole of it in their possession, physically, as money in order to be able to meet the demands of their depositors?


John Charles Landeryou: I did not quite get that question. Will the minister repeat it?


Charles Avery Dunning: I will try again. My hon. friend suggests that, $600,000,000 worth of currency being printed and being paid out presumably for various government purposes, people naturally would not carry around that $600,000,000 in the form of bills in their pockets.


John Charles Landeryou: That is right.


Charles Avery Dunning: They would want to put it in the chartered banks.


John Charles Landeryou: That is right.


Charles Avery Dunning: That is right so far. My hon. friend suggests that the chartered banks should not be allowed to base credit upon those

deposits. Therefore he must mean that the banks would have to keep physically in their cash tills $600,000,000. Does he now suggest that the banks under those circumstances could possibly pay any interest on deposits?


John Charles Landeryou: I do not say they would be in a position to pay interest on deposits; they are under no obligation to do so.


Charles Avery Dunning: Let me go one step further. If they would not be in a position to pay interest on deposits-


John Charles Landeryou: Possibly not at the moment.


Charles Avery Dunning: -then I suggest they would be entitled to some payment for their services to the depositors under those circumstances.


John Charles Landeryou: What right have
depositors to any interest on their money? For the banks do not use the deposits anyway. The banks were giving about 2J per cent to 3 per cent interest at one time. They were not forced to give it and they arbitrarily reduced the interest to li per cent. It averages 1 per cent. Now, some three million depositors have an average of $117 in the bank. One per cent is the average that is paid to them, and that is paid only on the minimum amount of the deposit during the three months in which interest is paid. That is not a very large sum of money. I know that the three millions who have deposits in the banks would not miss the little bit of interest they get. I am not suggesting that the banks could not pay it at the moment. I am not suggesting that.


Charles Avery Dunning: How could they possibly earn it if they took the bills in and had tc keep the bills in their tills in order to make payment at any time?


John Charles Landeryou: They could lend the money on a dollar for dollar basis. There is nothing remarkable about that. It simply means $600,000,000 more in their cash reserves. It would not cause inflation, which the minister is afraid of. He raised that issue and now that I say it would not cause inflation he says they would not be able to pay interest on their deposits. We are not considering that. I am simply stating that it would not cause inflation, as the minister knows.


Charles Avery Dunning: I do not know that. I know exactly the opposite to that.


John Charles Landeryou: Permit me to make another statement in regard to inflation. So much wheat is raised in western Canada every year and it takes so many freight cars to move that wheat to the market. To suggest that we should have more oars than are needed, considering the velocity of cir-

Loan oj $750,000,000
culation, to move that wheat, would be foolish. You need only a certain number of cars considering velocity of circulation. We recognize that in Canada there is a shortage of purchasing power and we urge the government to issue, not unlimited quantities of printed money, but sufficient money or credit to enable Canada, to produce to the utmost of her ability the goods and services required and to distribute them to the people. It is not a matter of having unlimited supplies of money, as in Russia or other countries where inflation was experienced. At the moment I am thinking of those countries where the people stood in the stares with pockets bulging with money, but those people could not buy anything. Why? Because their world trade had been cut off by war and revolution. Their money had been sabotaged by revolution and there were no goods in the country.


Mr. McLEAN (Melfort):: The money was no good.


John Charles Landeryou: Yes; I agree with the hon. member. But here we have hundreds of thousands of people going into our stores with no money in their pockets while the shelves are laden with goods. We suggest that the government have our monetary system reflect our ability to produce and distribute goods and services needed in the country. The national income is going down while the national debt is increasing. The national income dropped SI,123,000,000 to $1,125,000,000 from 1927 to 1937. Our ability to pay does not keep pace with the increase in the debt. Theoretically speaking, the national income can be measured by national production, but to-day we are not using our idle labour and the materials required to increase production. Our workers are unemployed, our materials are unused, our factories are running part time. That is why the national income is lower. We must increase the national income if we want to decrease debt and taxation. I
I wish to move an amendment to the resolution. The amendment reads:
That the following words be inserted after the figures 1931, "and by the issue of currency by the government of Canada"; and that the following words be added at the end of the motion "provided that the amount required for public works and general purposes be met by the said issue of currency."
The resolution as amended will read:
That the governor in council be authorized to raise by way of loan under the Consolidated Revenue and Audit Act, 1931, and by the issue of currency by the government of Canada an amount not to exceed in the whole the sum of Seven hundred and fifty million dollars for paying or redeeming the whole or any portion of loans or obligations of Canada, and also
71492-168i
for purchasing and withdrawing from circulation unmatured securities of Canada, and for public works and general purposes, provided that the amount required for public works and general purposes be met by the said issue of currency.
Neither the amendment I moved the other day nor the amendment I now propose is part of a social credit scheme; it is simply a proposal recognizing that something must be done about the tremendous debt burden that the country is now carrying. It simply means that whatever funds the government intends to spend on public works and for general purposes shall be raised "by the said issue of currency." It may amount to $100,000,000. Under the present scheme, as I understand it, the government intends to borrow the money by selling bonds or securities. Those bonds and securities are issued against the word of the people of Canada. We ask the government to raise in the same way, the amount required, against the word or the credit of the people of Canada. And this money would be spent in the same way as money would be spent if derived from the sale of securities.
I do not fear that this proposal, if adopted, would give rise to inflation. I simply say that it would be a step in the right direction, fulfilling the Liberal promise to issue money and credit in terms of public need. There is need now for public works and the money that will be expended is for that purpose. If proper steps are taken to ensure adequate control over the issue of credit, there will be no danger of inflation.
I have asked the minister many questions, and before the committee rises I should like to know exactly what we borrowed the money for when it was originally obtained, and how much interest has been paid on it since we borrowed it. I should like the minister to give us a complete review of the $750,000,000. We do not know how much will be spent on public works and for general purposes.


Mr. GLADSTONE:: May I ask the hon. member a question? Will he discuss the effect of his amendment, in its practical operation, on (1) the value of bonds involved; (2) the value of home property in the city; (3) the cost of foodstuffs to the consumer; (4) the cost of manufactured products-for instance, the price of iron and steel.


John Charles Landeryou: My hon. friend wants to know what would be the effect of issuing $175,000,000 worth of bonds. Before I can really answer that question intelligently I should like the Minister of Finance to tell us just how much money is involved in connection with public works and general purposes.
Loan of 5750,000,000


Charles Avery Dunning: Mr. Chairman, I do not think I should be asked to give over and over again information which I have already placed upon Hansard as fully as our present basis of information will permit. I do not want to seem discourteous to the committee, but my hon. friend can find in the record of these discussions, in which he himself took part, the information he now seeks. I have it before me, but I do not think it fair that one member should have the right to take up the time of the house asking the same questions over and over again and eliciting the same information.


John Charles Landeryou: Then the sum is over $100,000,000 and less than $200,000,000; just what it is I cannot say. The hon. member wants to know what will be the effect of issuing say $150,000,000 worth of bonds upon the value of homes, upon the price of steel and upon the values of bonds and securities. Is that it?


Robert William Gladstone: And upon the cost of living.


John Charles Landeryou: I shall deal with that in a moment. Here is the effect of the present financial system upon home owners, as it operates in the United States. I quote from the proceedings before the committee on banking and currency of the House of Representatives on bill H. R. 7188 at page 561, where it is stated that 47'3 per cent of all the homes built in the United States from 1920 to 1937 went through mortgage foreclosure. Under the present system in Canada many thousands of people have lost their homes and farms through mortgage foreclosures. In regard to the prices of commodities under the present system, half the farmers of this country are bankrupt. My hon. friend to my left says ninety-five per cent of the farmers are bankrupt.


Some hon. MEMBERS:: Oh, no.


John Charles Landeryou: Then what is the percentage?


Frederick George Sanderson: Order. I must inform the hon. member that he has spoken for forty minutes.


John Charles Landeryou: Well, Mr. Chairman, I am answering a question which has been directed to me. Now may I say just a word to my hon. friend in relation to the effect of the prices on bonds. No doubt he is . familiar with order in council P.C. 2693, under which the government fixed the price of bonds. Let me read it:
Whereas the acting Minister of Finance reports that, owing to the existing general depression, but more particularly the recent
rMr. Landeryou.]
international monetary developments, quotations have been recorded in the security markets for many1 high grade government securities which would not seem to be normal or reasonable quotations, or such as might serve as a proper indication of the intrinsic value -thereof, having regard to the fact that t-he security behind these obligations has undergone no fundamental change-
I do not accept that as being a correct statement of fact. The value of the bonds is based upon the word of the people to pay, and in the final analysis their word is simply their ability to pay.


An hon. MEMBER:: And their willingness.


John Charles Landeryou: But to-day their ability to pay is less than it ever was because of the decline in the national income. Their willingness to pay may be just as great as it ever was, but there was a decline in the value of these bonds and the government came to the
rescue.
And whereas the chartered banks are required, under the provisions of the Bank Act, to show investment securities in their monthly ana annual financial statements at not m excess of market values;
And whereas representations have been made by the inspector general of banks that it is in the public interest that a reasonably stable basis of valuation be determined for such high grade securities;
And whereas section 4 of chapter 58 or the statutes of 1931 provides that His Excellency the Governor General in council shall have tun power to make all such orders and regulations as may be deemed necessary or desirable tor, among other things, maintaining peace, order and good government throughout Canada,
Therefore His Excellency the Governor General in council is pleased,-on the recommendation of the acting Minister of Finance and under the authority of section 4 of chapter 58 of the statutes of 1931 aforesaid, and of all other powers and -authorities in that behalf, -to order and it is hereby ordered as follows: -
1. That for the purposes of the return provided under section 112 of the Bank Act and schedule "G" thereto, -and the annual report as directed by section 53 of the same act, the chartered banks of Canada shall, until this order is amended or rescinded, value the securities owned prior to the 31st day August, 1931, at not more -than the book value, or the current market prices thereof on the exchanges at the close of business on the 31st day of August, 1931, whichever may be the less, and the securities -acquired since the 31st day of August, 1931, at not more -than the cost price thereof.


Frederick George Sanderson: Order. I must remind the hon. member that he has exceeded his time very considerably.


John Charles Landeryou: plete the answer- The CHAIRMAN:
I just want to com-
Order.


Mr. ILSLEY:: I wish to raise a point of
order on the amendment to the resolution proposed by the hon. gentleman who has just

Loan of $750,000,000
taken his seat. The amendment appears to substitute a scheme for the scheme proposed by the resolution. At page 546 of May, 13th edition, I find the following:
An amendment proposing to substitute for the resolution an argumentative justification for the refusal of that demand is out of order, as are also amendments proposed with a view to substituting an alternative scheme to that proposed with the royal recommendation.
I submit that the amendment proposed by the hon. member comes within that prohibition. This is an alternative scheme and is not covered by the royal recommendation. But it seems to me that the amendment is out 'of order on another ground entirely. The amendment proposes that the governor in council be authorized to raise by way of loan under the Consolidated Revenue and Audit Act, 1931, and by the issue of currency by the government of Canada an amount not to exceed-and so on. It is proposed that the resolution be amended at the end by a proviso which reads:
-provided that the amount required for public works and general purposes be met by the said issue of currency.	.
Under existing legislation the governor in council has no power whatever to issue currency; that power is vested by law in the Bank of Canada. This resolution would attempt to confer upon the governor in council power to commit an illegal act under the law as it now stands. Therefore I submit that it is out of order on that ground.


John Charles Landeryou: Speaking to the
point of order-


Frederick George Sanderson: This amendment has not been read from the chair, and in order to keep the record straight I think that should be done. The resolution, with the proposed amendment, would read:
That the governor in council be authorized to raise by way of loan under the Consolidated Revenue and Audit Act, 1931, and by the issue of currency by the government of Canada an amount not to exceed in the whole the sum of seven hundred and fifty million dollars for paying or redeeming the whole or any portion of loans or obligations of Canada, and also for purchasing and withdrawing from circulation unmatured securities of Canada, and for public works and general purposes, provided that the amount required for public works and general purposes be met by the said issue of currency.


Angus MacInnis: I should like to say a word on the point of order, and in doing so I should not like the committee to assume that I am agreeing with everything that was said by the hon. member for Calgary East when he was on his feet. I do not think the first point raised by the Minister of National Revenue is well taken. This is not an alternative scheme that has been proposed
by the hon. member for Calgary East. He is merely proposing a certain division of the resolution, the amount that shall be borrowed and the amount that shall be issued in currency for public works. Whatever may be the import of the second point of order raised by the minister, I do not think the first one is well taken.


Charles Avery Dunning: On the point of order,
there is no doubt that by the amendment a different scheme for raising the money is contemplated. On the second point, though, I do suggest the seriousness of attempting completely to reverse the whole policy of parliament in relation to banking, by taking back from the Bank of Canada the statutory power which has been conferred upon it of issuing currency, and again vesting it in the governor in council. I cannot pursue it on the basis of discussing a point of order, but it does seem to me to be extraordinary if our rules should permit an amendment of this kind to have the effect of amending the fundamental law of the country. Just by the incidental addition of some words to the resolution now before the committee we would completely reverse the whole basis of one of our most important economic laws. I cannot put my finger on the rule which covers the point, but I am sure there is one.


John Charles Landeryou: The amendment contains the words, "by the issue of currency by the government of Canada." The government of Canada must give the Bank of Canada the right to issue the currency in question. The Bank of Canada is an instrument created by parliament, and it is through the instructions of the government which is in office that they pursue a policy. I do not believe thfeir policy has been any different from that which has ever been pursued, but-


Charles Avery Dunning: That is because you do
not know anything about it.


John Charles Landeryou: Probably so, but I
can judge by results. I do not see why the objection should be raised to substituting the government of Canada for the Bank of Canada, because after all, as the minister says, it is the government of Canada which issues instructions to the bank.


Charles Avery Dunning: No.


John Charles Landeryou: Parliament issues instructions.


Charles Avery Dunning: No.


John Charles Landeryou: The governor in
council instructs it.
Loan of $760,000,000


Charles Avery Dunning: No. My hon. friend
should read the Bank of Canada Act, and he would there find set out by parliament the power conferred upon the Bank of Canada.


Mr. JAQUES:: I was assured last session
by the Minister of Finance that the house has absolute control over the issue of currency and credit.


Charles Avery Dunning: No doubt about it.


Norman Jaques: Then if that is true cannot parliament order the central bank to issue currency and credit?


Charles Avery Dunning: Yes, surely.


Norman Jaques: Well, what are we reversing? Or is the Bank of Canada to instruct the house?


Charles Avery Dunning: No.


Norman Jaques: That is the way it would
seem.


Charles Avery Dunning: No. I presume the discussion should continue on the point of order, and my hon. friend will forgive me if I do not go farther into that matter. There is no question at all as to the power of this parliament to-morrow, if it so wishes, to repeal the Bank of Canada Act, or to amend it in any particular. But when parliament decides to do either of those things it will proceed by the direct method of dealing with the Bank of Canada Act, and it will not seek by a back-door method, in an amendment relating to an entirely different matter, to upset a complete system which is now operating by the will of parliament.


René-Antoine Pelletier: Speaking to the point of order, I do not think the position taken by the Minister of Finance is well taken. The point of order is not to decide whether or not parliament is going to do a certain thing. It is this: is or is not the amendment in order? Any argument which the Minister of Finance may have as to the desirability of doing a certain thing has nothing to do with the point of order before the chair. I would refer particularly to citation 551 in Beauchesne's Parliamentary Rules and Forms, which states:
551. It is a fundamental principle that no resolution or amendment to increase a charge upon the people can be moved with the Speaker in the chair; it must be initiated in committee by a minister acting on behalf of the crown.
All that has been done. Then, citation 553 states:
553. When it appeared from the debate that an amendment proposed to a resolution reported

from the committee of ways and means would increase the charge, the Speaker ruled the amendment out of order.
There is no attempt in this case to increase the charge or to reduce it in any way. Then, citation 555 reads:
555. No increase can be considered either of an existing, or of a new or temporary tax for the service of the year, except on the initiative of a minister acting on behalf of the crown.
I submit for your consideration that the question is not whether the Minister of Finance considers it advisable to give back to or take away certain privileges from the Bank of Canada, but rather whether or not the amendment is in order, according to the rule. Any other argument is beside the point, I submit.


Some hon. MEMBERS:: Question.


Frederick George Sanderson: The point of order taken by the Minister of National Revenue (Mr. Usley) is in my opinion well taken. I quote from May, page 546:
An amendment proposing to substitute for the resolution an argumentative justification for the refusal of that demand is out of order, as are also amendments proposed with a view to substituting an alternative scheme to that proposed with the royal recommendation.
I am of opinion that the proposed amendment would in effect be an amendment to the bank act, and I therefore rule it out of order.


René-Antoine Pelletier: With all deference, and with no personal reflection, I should like to appeal from your decision.


Some hon. MEMBERS:: Order.


Mr. HEAPS:: I should like to discuss the motion, if I may.


Some hon. MEMBERS:: Order.
Mr. Speaker resumed the chair and the chairman of the committee made the following report:
During the debate on a resolution to raise by way of loan under the Consolidated Revenue and Audit Act, 1931, an amount not to exceed $750,000,000 for paying and redeeming certain loans and purchasing unmatured securities, Mr. Landeryou moved in amendment that part of the loan be raised by the issue of currency by the government of Canada.
The chairman ruled the amendment out of order on the ground that it was proposed with a view to substituting an alternative scheme to that proposed with the governor general's recommendation.
Whereupon Mr. Pelletier appealed from the ruling.


Mr. VICTOR QUELCH (Acadia):: Mr. Chairman, the last time I was speaking on this resolution I was dealing, when my time expired, with the question of the more effective control of credit. Now I rise to propose an amendment, and whilst on my feet I shall carry on with the subject where I left off.


Charles Avery Dunning: Will the hon. member permit me? In order to facilitate the business of the house it is the custom, when an amendment is to be proposed, for the mover to send
a copy of the amendment to the interested minister as much in advance as possible in order that it may be studied. My hon. friend has just indicated that he intends to move an amendment. I wish he would do me the courtesy of sending me a copy of it.


Victor Quelch: I would have sent the minister a copy before, but we did not anticipate that the amendment moved by the hon. member for Calgary East (Mr. Landeryou) would be ruled out of order. I have changed the wording so that the amendment will now read, " the Bank of Canada," to comply with the rules of the house.
I wish first to deal with some remarks that were made by the Minister of Finance regarding myself when he last spoke on this subject. It is a strange thing that it is only necessary to suggest in this house the issue of money by the government for the Minister of Finance to become positively delirious on the question. He immediately starts seeing things. He conjures up the spectacle of printing presses running day and night and inundating the country under a deluge of paper money. When he speaks on the subject he invariably turns and faces his followers, and with arms upraised conjures up the bogy of inflation. He sees the snakes of inflation creeping and crawling into every comer of this dominion and choking the people. But when on that subject he always fails to tell the house of the insidious disease of deflation, a disease that is slowly but surely rotting away the very productive life of the country, leaving in its wake idle mines, deserted farms, factories running only part time, thousands and thousands of unemployed-leaving in its wake distress and poverty from one end of Canada to the other. It is a strange thing that, when orthodox gentlemen attack monetary reform proposals, they invariably resort to the weapon of attempted ridicule or misrepresentation. The Minister of Finance was no exception to the rule. When I spoke, the minister asked me various questions, and 1 answered them, but when the minister spoke he refused to answer one single question of mine. Why? For the simple reason that the minister was engaged in the unprofitable occupation of putting up straw men and knocking them down, and when you are engaged in such a proceeding it is not safe to answer questions, otherwise you are likely to have the ground knocked from under your feet. When I say that the minister engaged in misrepresentation I think I should have been justified had I used the word "deliberate" misrepresentation.


Charles Avery Dunning: On a point of order, my hon. friend cannot attribute deliberate mis-
Loan oj $750,000,000

representation to me or to any other hon. member. I would ask that that be withdrawn.


Victor Quelch: I did not say that the minister was guilty of deliberate misrepresentation; I said that I thought I should have been justified had I said that. But I did not go to that limit.


Some hon. MEMBERS:: Oh, no.


Victor Quelch: I will leave Hansard to prove whether I said that or not.


An hon. MEMBER:: It is the same thing.


Victor Quelch: It certainly is not the same thing.


Frederick George Sanderson: Order. The point of order taken by the Minister of Finance is, I think, well taken. I ask the hon. member who has the floor to withdraw.


Victor Quelch: I withdraw the word
"deliberate." I shall now quote Hansard as to exactly what I said and the minister said. T refer to page 1528. The Minister of Finance 13 speaking:	.
At any rate, in order to carry out my hon. friend's ideas logically, taxation ought to be abolished altogether; because if you can safely print unlimited sums of money, and the government has power to do so, why not print enough?
The minister is suggesting that I had advocated the issue-I do not care whether the word "issue" or the word "printing" be used- of an unlimited sum of money. Now, exactly what did I say? I refer to page 1517 of Hansard, where I dealt with the matter. At the bottom of the page:
Now, we fully realize that there is a well-defined limit-
Mind you, there is a well-defined limit.

to the amount of money that can be issued in any period, and so long as it does not go beyond that limit there need not be any fear **f inflation.
The minister heard that statement, because he asked the question:
What is the limit?
I replied:
The limit is the amount of money necessary to make the great physical demand of the people effective against the production of the country; that is to say, if you have on the one hand goods unsold and on the other hand people requiring those goods, you can give them enough money to buy those goods without any possible danger of inflation.
The minister suggests that I advocated the issue of unlimited sums of money, yet I definitely stated that the amount of money was limited. The minister asked me what that limit was, and I defined it. What
fMr. Dunning.]
justification is there for suggesting that I had advocated the issue of unlimited sums of money?
I will refer to two or three other statements the minister made which I will not say are deliberate misrepresentations but which show that he did not understand the point that I was endeavouring to make at the time. I refer to page 1527. The minister stated:
I gathered from him that all taxation is to be abolished, that it is wrong for governments to tax.
Evidently he gathered that impression from what I said on page 1649, where I referred to the fact that owing to certain practices which are inherent within the system, industry is not able to create an effective demand for its own production, and therefore I advocated the issuing of money debt free to make up the deficiency. The minister asked me to define what I meant by "debt free money", and I told him. I went on to say:
Under our proposals, if at any time too much money was in circulation, it would be taken out of circulation, either by taxation or through the price discount factor. But this is the point we make: that that money would not be taken out for the purpose of providing revenue for the government. It would be taken out in order to avoid inflation.
I can see where the minister might have got a mistaken impression. I was speaking extemporaneously, and I should have used the word "additional". If I had used the words "additional revenue" he would not have jumped to that conclusion. I should be opposed at this time to the idea of abolishing all taxation. I make that statement for this reason. We recognize that at the present time we have poverty, due largely to two facts: maldistribution of wealth, and a total deficiency of purchasing power to distribute wealth. In order to cover the first point, evidently you must have taxation to bring about a fairer distribution. But taxation will not cure the other condition, and for that purpose you must have an issue of new money.
On page 1528 the minister is reported as having said:
I asked my hon. friend from Acadia when he was speaking a question or two that brought out this view from the Social Credit party: that they recognize that such a policy would involve too much money getting into circulation, too great a possibility thereby of the evils of inflation. . . .
I do not admit for one moment that our proposals would bring about inflation. Again I refer to page 1649, as I take it that my statement on that page is what gave him that impression. I had stated, be it noted, that if there was too much money in circulation

Loan of V50,000,000
it could be withdrawn by taxation or through the just price factor, but I am not suggesting that our proposals would bring about a condition where there would be too mucn money in circulation. For example, if you had any monetary reform government in power, whether Social Credit or not, the aim would be to raise the standard of living up to the full capacity of the country to supply it, that is, to try to bring about an equilibrium between consumption and production. It stands to reason that if such a condition were brought about, and then some major calamity such as drought, devastating fires in industrial centres, blights in orchards, bad luck in the fishing industry, were to hit the country, during that period there would be a falling off of production. If before that time you had established a balance between production and consumption, undoubtedly, after any of these calamities had afflicted the country, production would be reduced, there would be excess demand against that production, and it would be necessary to withdraw some of that surplus demand. But the reason for withdrawing it would not be to provide additional revenue, but to establish an equilibrium between consumption and production.


Charles Avery Dunning: I so understood it. I did not misrepresent my hon. friend.


Victor Quelch: The minister said that I had said we would do away with all taxation.


Charles Avery Dunning: I gathered that that was inherent in the pLn.


Victor Quelch: I am glad that the minister makes that point clear.


Charles Avery Dunning: I think I should make the point that my hon. friend recognized, as do all people, including Major Douglas, who propose carefully thought out schemes for issuing money to supply economic need, that in any such scheme there would be grave danger of excess currency in existence at any time, thus tending to inflation; and practically all of them subscribe to the view which I understood my hon. friend to express, that in order to provide against such a situation there would have to be means of taxing the excess currency out of existence, if excess were determined to have occurred. That is all I said, and all I intended to convey, and in so doing I was quoting most of those whom I call monetary reactionaries, but whom my hon. friends describe as monetary reformers.


Victor Quelch: So far as social credit proposals are concerned, I will touch very lightly on the point as to how we would bring about that eauilibrium.
If effective demand were only ninety per cent of production, we would propose a ten per cent discount in operation to restore that balance, and if production were to fall off by five per cent the discount would be reduced by five per cent in order to restore the balance. On the other hand, if production were to fall off by fifteen per cent the ten per cent discount would disappear entirely, and you would have a discount in reverse, in other words, a five per cent sales tax. I think the minister would admit that that would be fair. Everybody in the country would contribute to the relief of that national calamity by standing his share of the loss.
At page 1528 of Hansard, the minister is reported as follows:
The assumption inherent in the thinking of so many, that the government can issue money and have it perform its function, and by and by, when it comes back to the Bank of Canada, it can be destroyed without hurting anyone, is all nonsense, because the last man who held that bill and paid it into the Bank of Canada would be entitled to one dollar's worth of value from the Bank of Canada for it.
I agree with that statement, and that in itself is the greatest condemnation of the present system. But our proposal is entirely different, because I simply suggest that it might be necessary to tax it back if there was too much money in circulation, that is if there was excess demand against production. And in the event of a major calamity, where production fell off, there might be a discount in reverse. Everybody would share in the loss, and that would be perfectly equitable.


Charles Avery Dunning: In arriving at the datum point of 90 per cent of consumption to 100 per cent of production, I have never yet clearly understood how my hon. friends would propose to deal with that factor, which is much more important in practice than volume of currency, namely, velocity of circulation. I cannot- understand how there could be at a given time a compilation of statistics which could accurately reflect immediately the velocity of circulation, which as I say is much more important in practice than its gross volume. Even if we had arrived at statistical perfection, which my hon. friends assume first of all, I cannot see how in the world the velocity factor would be reflected, which is really what millions of people are themselves doing with the currency they hold. Given the most perfect statistical machine, I do not see how you could get a sufficiently immediate appreciation of the velocity factor to be able to work out your elaborate just price, and discount and taxing-back provisions. The whole population would be working for the government in order to figure it out.

Loan oj $730,000,000


Mr. MacNICOL:: Impossible.


Victor Quelch: The very actions of the people would determine that factor. If they were spending money faster there would be greater demand, and if they were spending less money the demand would fall off. I am discussing the Douglas proposal, but in the Goldsborough bill in the United States it was slightly different. In the Douglas proposal it is suggested that there should be a commission to investigate the relationship between demand and supply over a given period, say for the past three months. If demand were only seventy-five per cent of supply during that period, then during the next three months the discount would be twenty-five per cent. If velocity stepped up and there were an increased demand at the end of the next three months, if demand were, say, ninety per cent of supply, then there would be a discount of only ten per cent. If demand had stepped up to such an extent that it was approaching the point of excess over supply, then you might actually have in operation a sales tax of one, two, or three per cent, whatever might be necessary to restore the balance.


Charles Avery Dunning: I did not make my question clear. I do not want to take up the hon. member's time, but I am anxious that his point of view be got before the people. My hon. friend speaks of effective demand. Can I not make it clear that there might be a stepping up of twenty-five per cent even in the effective demand without involving the necessity of issuing more currency? There might be an increase in effective demand for goods and services through an increased velocity of existing currency. In fact, that has occurred repeatedly in our economic history and I am sure it will again. To tie up the three factors of, first, effective demand immediately ascertained-and incidentally I do not believe that the commission which it is expected would report in three months would report as a matter of fact inside three years, from what I know of that sort of method-with the velocity with which the currency circulates, in relation to the third factor of volume of currency actually in existence, and to maintain a continuous and complete check upon these three factors, sufficiently immediate in its application to meet conditions as they are, is to propose a complexity of machinery which no one who has anything to do with matters of this kind believes could work at all, and which would undoubtedly require an army to operate.


Victor Quelch: I have discussed this matter with quite a number of chartered accountants in the old country and they expressed the
rVfr. Quelch.]
opinion that a good deal of the information is already	available	in	the form of
returns, although perhaps it might be necessary to have the information filed more frequently. I agree that when you change a system of this kind you cannot tell exactly what the human element will do. It might result in a complete change of habits, with increasing demand, but another practice would change, that is there would be a greatly accelerated production to take care of that increased demand. For if the government intimated that its policy in the future would be to raise effective demand up to the full capacity of industry to produce, you would have the greatest expansion of industry ever witnessed in this country, and that expansion would be carried out on a sound basis because it would be followed by increased demand.
At the start it would be necessary perhaps to make the discount small, below the figure required to create a balance, until you found what the reactions of the people would be. But as the people realized that the scheme was working satisfactorily and continued to save or to spend as they had done in the past, you could gradually get the system down to a stable basis. Personally I cannot see any difficulty as far as the commission is concerned, and as I say, I have discussed the question with many chartered accountants.
May I go on now to the subject I was going to discuss when my time expired on the last occasion I spoke on the matter. The amendment which the hon. member for Calgary East moved, and the one which I shall move, a similar amendment, except for the use of "Bank of Canada" instead of government, in order to overcome the difficulty which the minister raised, propose the issue of money to meet certain public expenditures. As the hon. member for Calgary East said, that is not a social credit proposal. It is something, however, which can be advocated under our philosophy. It is a proposal supported by the majority of monetary reformers. The hon. member for Rosthern last year proposed practically the same thing, and when he did so the Minister of Finance pointed out that there would be a danger, if that money were issued, of the chartered banks expanding loans up to ten times the amount of money issued, which would cause inflation. To me, that statement is in itself absolute proof that we have not effective control over the issue of credit on the part of the chartered banks. On several occasions in this house I have urged that we should obtain absolute, effective control over the chartered banks by what is termed a 100 per

Loan of $750,000fi00
cent money system, and I was glad to hear the hon. member for Rosthem, when last he spoke, advocate the same thing. In other words, the chartered banks would be compelled to increase their cash reserves up to 100 per cent of their demand deposits. The Bank Act would be amended to compel the banks to increase cash reserves up to 100 per cent of demand deposits, and so that they would not have to start calling in loans, the government would buy from the chartered banks a sufficient number of government securities now held by them to provide that backing. The immediate result would be a great reduction in the interestbearing debt of the dominion. It would not result in inflation because there would not be a single new dollar in circulation. The money so issued would have to be held by the chartered banks in reserve against their liabilities. We would have a more effective control over the issue of credit, and the danger of booms and depressions would be greatly mitigated. Money repaid to the chartered banks could be immediately reloaned by the banks, but if those banks desired to increase the totality of money in circulation the only way they could do it would be by borrowing from the Bank of Canada. Thus instead of the government borrowing from the chartered banks you would have the reverse; the chartered banks would borrow from the government through the Bank of Canada, as I maintain they should.
The minister shakes his head. Some people may say this is just one of the haywire ideas of the Social Credit group, but I would point out that this is advocated by some leading economists and bankers to-day, and the number is steadily growing. I remember many years ago reading a book by Professor Soddy entitled Wealth, Virtual Wealth, and Debt, in which he advocated this very thing. Later I remember reading a book by Marshall Hattersley, who also advocated this scheme. A few years later I read a book by Professor Irving Fisher entitled One Hundred Per Cent Money, in which this same thing was advocated. Probably Professor Fisher is pne of the leading exponents of this proposal. Then I was much interested to receive a circular from Babsons, dated March 20, 1939, on the back of which appears a program for monetary reform; and I find that Babsons are now advocating the 100 per cent money system. So a person cannot just shrug his shoulders and disregard this proposal.


Charles Avery Dunning: What is the 100 per
cent money system?


Victor Quelch: The proposal is to compel
chartered banks to increase their cash re-71492-169^
sources up to 100 per cent of the demand deposits.


Charles Avery Dunning: My hon. friend has
marshalled in support of the words he now uses Babson and other authorities. I do not think they have advocated what he has set forth, and I do not think it is fair for him to claim their support.


Victor Quelch: I can read their words, and my hon. friend will have to accept them whether he likes it or not. Just in case the minister might raise this very point I brought with me a leaf from the book One Hundred Per Cent Money by Professor Irving Fisher.


Charles Avery Dunning: Oh, surely; you can quote Fisher.


Victor Quelch: If the minister does not like Fisher I have these other proposals from Babson:
The simplest method of making the transition from fractional to 100 per cent reserves would be to authorize the monetary authority to lend, without interest, sufficient cash (federal reserve notes, credit, United States notes, or other lawful money) to every bank or other agency carrying demand deposits to make the reserve of each bank equal to its demand deposits on a specified ddte.


Charles Avery Dunning: "Lend" them.


Victor Quelch: We were all agreed that the government could lend money to the chartered banks; but when we owe the chartered banks money would it not be better to buy up the bonds we have with those banks? We have bonds with the chartered banks. Why lend money when we could buy up those bonds? Professor Fisher used the word " lend," and he also used the expression "buy up the bonds." They mean the same thing; it is just quibbling to say there is any difference. If the minister wishes I will read the proposal of Professor Fisher as set out at page 8 of his book; perhaps it gives the proposal in clearer language than I have used. We use the word " government " instead of " Bank of Canada " because it is perhaps a technical point as to whether or not a bank can issue money debt free. Personally I do not believe a bank can do that; there is bound to be a debt. Therefore we have said the government could issue money through the Bank of Canada. It will foe noticed that Irving Fisher and these other authorities advocate a currency commission to issue money to the banks. Under this proposal the chartered banks would not be able to create money; they would be only able to lend money, which would foe issued to them by the Bank of Canada. The quotation from Professor Irving Fisher is as follows:
Let the government, through an especially created "currency commission" turn into oash
Loan of $750,000/000

enough of the assets of every commercial bank to increase the cash reserve of each bank up to 100 per cent of its cheeking deposits. In other words, let the government buy-
Notice those words.
- (or lend money on) -
Exactly the words used by Babson.
-some of the bonds, notes, or other assets of the bank with money (in practice, this could be mostly credit on the books of the commission, as very little tangible money would be called for-less even than at present, so long as the currency commission stood ready to supply it on request) especially issued through the currency commission. Then all check book mone.v would have actual money-pocketbook money behind it.
This new money (commission currency, or United States notes), would merely give an all cash backing for the cheeking deposits and medium of the country. A bank which previously had $100,000,000 of deposits subject to check with only $10,000,000 of cash behind them (along with $90,000,000 in securities) would send these $90,000,000 of securities to the currency commission in return for $90,000,000 more cash, thus bringing its total cash reserve up to $100,000,000 or 100 per cent of the deposits.
After this substitution of actual money for securities had been completed, the bank would be required to maintain permanently a cash reserve of 100 per cent against its demand deposits. In other words, the demand deposits would literally be deposits, consisting of cash held in trust for the depositor.
Thus, the new money would, in effect, be tied up by the 100 per cent reserve requirement.


Charles Avery Dunning: Will my hon. friend now explain how Irving Fisher provides for that bank to be able to lend any money?


Victor Quelch: I did not bring the book
with me, but he goes on and points out that when the people repaid their loans, immediately the banks could relend a similar amount, because they would have the cash reserve behind it; but if the chartered banks desired to expand the totality of their loans they could do so only by borrowing from the Bank of Canada, in this case, we will say at a nominal rate of interest. The chartered banks would then make their legitimate profit out of the difference between the interest rate paid to the Bank of Canada and the interest rate they collected from their borrowers. They could expand their money only with the consent of the Bank of Canada. Then you would not have the Minister of Finance saying in this house, "We cannot issue this money for fear the chartered banks will expand their loans," for they could not do it. They could do it only by borrowing money from the Bank of Canada.
In the opening pages of Professor Fisher's book, One Hundred Per Cent Money, he quotes some two or three pages of prominent economists and bankers in the United States
fMr. Qiielrh.l
who support the 100 per cent money system. So one cannot lightly dismiss this proposal and say the banks could not borrow money under it. Is it likely that bankers themselves would support the plan if they considered it unworkable? Among the names of the bankers mentioned are Robert Hemphill, former credit manager of the Federal Reserve Bank, and George Le Blanc, formerly vice-president of the Equitable Trust Company; and then follows a long list of names of other bankers to support the idea.


Charles Avery Dunning: "Formerly."


Victor Quelch: Not all of them. Hemphill still has a job. Perhaps he has seen the light. You know, in the ranks of social creditors to-day in Alberta we have many, many bankers. .


Mr. MARTIN:: Bank managers?


Victor Quelch: Former bank managers;
now they are taking jobs as treasury branch managers. The minister would say that under this system the banks would not make any profit, but they would still make their interest on their outstanding loans; and if they wanted to expand their loans they would make their profit in the difference between the interest they had to pay the Bank of Canada and the interest they charged their borrowers. The minister branded the issue of debt free money as crude inflation. I should like to ask the minister his policy; I am sure he would admit that it is undoubtedly deflationary.


Charles Avery Dunning: No, positively not.


Victor Quelch: Then the minister will
admit that as a result of his policy we have deflation.


Charles Avery Dunning: I will not admit it; I will state exactly the opposite. The facts and figures of our currency and credit expansion since 1935 are on record; I stated them last year and my hon. friend has read them. It is absolutely untrue to say that either the policy or the result of the policy of this government has (been deflationary. It has been an expansionist, easy money policy, but kept under very careful control and having due regard to the volume of business, the volume of credit and the volume of need in all aspects of Canadian economic life. I do not intend my hon. friend to get away with the statement, which he himself does not believe, that our policy is one of deflation.


Victor Quelch: Well, Mr. Chairman, I said if the minister could not accept that statement at least he would have to accept the statement that as a result of the government's policy we still have deflation in this country. There is no question about that.

Loan of $750,000flOO


Charles Avery Dunning: No; not at all.


Victor Quelch: Then I will go on to prove it. What is inflation? It depends on the relationship between the total amount of desired goods available for distribution and the effective demand against those goods. Unquestionably if you have $10,000,000 worth of goods and a demand for only $5,000,000 worth, you have deflation. I will come back to conditions as they exist to-day.


Charles Avery Dunning: I do not agree with my hon. friend's definition of inflation.


Victor Quelch: I did not give it as a definition. I said that inflation depends upon that relationship. It must depend upon the relationship between money and goods. The minister himself has said it depends not upon the relationship between paper money and gold, but upon whether or not the money is more than the amount necessary to distribute the goods and services within the country. If you have not enough money, you have deflation; if you have too much, you have inflation. The minister agrees with that statement. I could quote where at page 1531 of Hansard he agreed.


Charles Avery Dunning: Quote what I did say.


Victor Quelch: The hon. member for Lethbridge (Mr. Blackmore) said this:
The minute you get more money in circulation, let me repeat, than enough to do the work of distributing goods and services which are abroad in a country to be distributed, then you have inflation, and not a minute before.
And the Minister of Finance said, "That is correct." Then, when you have not enough money to move goods and services, you have deflation.
Let us take a look at the picture of conditions as they exist in Canada. First of all, we have a great productive plant working only to a small percentage of capacity. We have farms deserted, mines idle, factories running at only part-time capacity. We have great resources which have been barely tapped, great reserves which can be multiplied many times over. We have a great surplus of unused labour, in the form of unemployed. We have a favourable balance of payments amounting to $185,000,000-I believe that is the correct figure. Then on the other hand we have over a million people on the verge of destitution.
On the one hand we have the ability to make a vast amount of goods available for distribution, and on the other hand there are thousands of people destitute desiring those goods. In other words, the effective demand of the people is deflated to such an extent that they cannot purchase the goods available for distribution. I will certainly leave it to
the people of Canada to say whether or not that is a condition of deflation. The minister is busy; I should like him to have replied as to whether or not he believes that is a state of deflation, whether or not it is as a result of his policy. Certainly we had deflation before the government took office, and we still are suffering from it to-day, in spite of any action this government may have taken.
I believe I used a conservative figure when I said that a million people were on the verge of destitution. I have in my hand a pamphlet sent me by the Canadian Welfare Council, and I find in it these words:
Your community welfare; a problem every citizen must face. Consider these figures: 1,750,000 men, women and children-one-sixth of our population-dependent annually on some form of social aid. (Exclusive of all care to pensioners or veterans.)
In this "forgotten" sixth we find-


Charles Avery Dunning: On a point of order, there is on the order paper now a resolution in the name of the Minister of Labour under which any question relating to relief may be discussed. I say further that while I do not object generally to the observations of the hon. member, I must say that his speech is in the' nature of an address on the budget rather than observations on a specific monetary resolution.


Victor Quelch: I shall not quote the figures, then.


Frederick George Sanderson: The point of order taken by the Minister of Finance is well taken.


John Horne Blackmore: Speaking to the point of order, one of the signs of deflation is unemployment.


Charles Avery Dunning: Mr. Chairman, we are not discussing deflation. That is nowhere contained in the resolution before the committee. The question is simply this:	Is it
in order on any financial resolution, which has as its object the raising or spending of money, to develop the whole range of monetary discussion, on each and every occasion? What are our rales for?


John Horne Blackmore: We have not done that.


Victor Quelch: We are moving an amendment which asks that money be issued. The charge is made that that will cause inflation. Our defence is that it will not cause inflation, and we are developing our point to prove to our satisfaction and the satisfaction of the committee-and if not, at least to the satisfaction of the people of Canada-that it can be done without causing inflation.
267t>
Loan of $750,000,000


Frederick George Sanderson: Will the hon. member be good enough to read his amendment? He has not moved it yet.


Victor Quelch: I was going to move it later, but I shall do so now. I move in amendment:
That the following words be inserted after the figures "1931": "and by the issue of currency by the Bank of Canada"; and the following words be added at the end of the motion, "Provided that the amount required for public works and general purposes be met by the said issue of currency."


James Lorimer Ilsley: Mr. Chairman, I raise the same objection, substantially, as I raised before. I say further that the amendment is out of order on the ground of absurdity. It is absurd to move that the government of Canada be authorized to issue currency by the Bank of Canada. It is a motion that A be authorized to issue currency by the hands of B. It is a physical and legal impossibility and absurdity. For that and other reasons I mentioned before I submit that the amendment is not in order.


Victor Quelch: Surely you can issue money through somebody.


Frederick George Sanderson: The hon. member for Acadia (Mr. Quelch) has moved an amendment. I believe the point of order taken by the Minister of National Revenue is well taken. I cannot see any difference between the amendment proposed some time ago, in respect to the ruling on which there was an appeal to the house, and the one now moved. Each substitutes an alternative scheme to that proposed in the governor general's recommendation. In my opinion the amendment is out of order.


René-Antoine Pelletier: Referring to your ruling on the point of order-


Frederick George Sanderson: The ruling has been made.


Victor Quelch: Mr. Chairman, it seems to me very hard to be in order when you discuss the subject of money in this house.


Some hon. MEMBERS:: Hear, hear.


Victor Quelch: It is the most important question before the people to-day, and yet on every possible opportunity when we get up to discuss this question we are ruled out of order.


Charles Avery Dunning: On a point of order, that statement is a reflection on the House of Commons.


John Horne Blackmore: It should be made.


Charles Avery Dunning: No group of members in the house has had a wider opportunity to discuss its theories-and when I say this I am in the judgment of hon. members in all parties -than hon. members in the corner, one of whom has just spoken. If they are out of order according to the rules of the house, then like all the rest of us they will be ruled out of order. But I think in order to get along with something we had better come back at this some other day. I am advised there are still a number of speeches from hon. members in that corner of the house, and that they intend to talk, if the rules of the house permit them to do so. The responsibility for continuing to talk, as long as they are in order is on themselves, and I know they are prepared to take that responsibility. I move that the committee rise-


Mr. STEVENS:: The minister raised another point of order.


Charles Avery Dunning: It was settled.


Henry Herbert Stevens: But he raised another one. On the last point of order raised by the minister, I should like to make one or two comments. The observations of the hon. member for Acadia (Mr. Quelch) might leave the impression that because one agreed with the ruling of the chair one also agreed entirely with the minister's resolution. To justify my own position, speaking for .myself alone, may I first point out the rules say that an amendment must not raise any question which by the rules of the house can be raised only after a distinct motion, after notice. Citation 548 says this:
Before clauses in a bill can be considered which apply the consolidated fund or money to be voted by parliament as a guarantee for sums to be raised, paid or borrowed for any purpose, such clauses must receive the preliminary authority of a committee resolution founded upon the recommendation of the crown.
My hon. friends will realize that any resolution of the kind which has been proposed this afternoon must come to this house with a recommendation by the crown. That is the point, and that is why I have taken the stand I do. I should not like the suggestion made a moment ago by my hon. friends to go unchallenged, that anyone who takes a different view from the one they are expressing is, therefore, opposed to anything in the nature of monetary reform.
Progress reported.

Farmers' Creditors Arrangement Act



FARMERS' CREDITORS


[Stage Direction]
Hon. CHARLES A. DUNNING (Minister of Finance) moved the second reading of Bill No. 86, to amend the Farmers' Creditors Arrangement Act, 1934.
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Sanderson in the c'hair.
On section 1-Termination in provinces other than Manitoba, Saskatchewan and Alberta.
Charles Avery Dunning: When the resolution preceding this bill was going through the house the other day, I recited the circumstances attendant upon the amendment a year ago of the Farmers' Creditors Arrangement Act. Hon. members will remember that the Senate did not agree with the House of Commons on that occasion. Following the disagreement a conference was held under the rules governing such disagreements, and I do not think it is too much to say that the compromise finally agreed upon was not fully satisfactory to the House of Commons. In the interval we have had strong representations from the province of Manitoba-I believe I am correct in saying that the representations from the legislature of that province were unanimous-asking that the act be amended to place Manitoba in the same position as Saskatchewan and Alberta were placed in by the existing arrangement. This bill has as its object the complying with that request. For one, I sincerely trust that the other house will view the matter rather more favourably this year.


Mr. WEIR:: There was general disappointment following the action taken last year by the Senate with respect to the amendment proposed by this house to the Farmers' Creditors Arrangement Act. So far as the farmers are concerned, I do not think Manitoba is any better off than any other province in which the act still operates. Therefore, it was felt to be unjust and unfair that this act should be discontinued in this province. The legislature of the province of Manitoba was particularly interested in this matter from another angle. That province is attempting to meet a similar condition by what is termed a land court. I understand that representations have been made to this government to have legislation passed which will be necessary to make the provincial legislation effective. However, it is not thought that this object is possible
of accomplishment in the near future, and consequently there is a general desire to have this act continued until such time as the other legislation can be put into shape. I do not know the number of applications now before the board of review, which of course will be continued, but I do know that in going about the province one hears continuously the statement made that the act should be continued. I am satisfied that in the future there will be just as many cases to be dealt with as there have been in the past. So far as I am personally concerned, and I think the same can be said for other members from Manitoba, I am grateful that we are now being placed in the same position as the other prairie provinces with respect to this particular legislation. I trust this bill will meet with favourable consideration when it goes to the other house.


René-Antoine Pelletier: The explanatory note reads:
No proposal shall be received in either of the provinces of Manitoba and British Columbia later than, the thirtieth day of June. 1939.
It is a well know fact that the purpose of this legislation is to provide for the settlement and arrangement of debts between farmers and their creditors. Inasmuch as a definite date is provided in the act beyond which no proposal can be made, does not the Minister of Finance (Mr. Dunning) consider that this section of the act is analogous to the limitation of actions act. If that is the case, how can this section be included in the act? What difference is there between the limitation of actions which is included in a bill of this kind, and the act proposed by the provincial legislation purporting to do the same thing?


Charles Avery Dunning: My hon. friend will not succeed in dragging me into a constitutional discussion of limitation of actions. The object of this legislation is not what he states; the object of this legislation is to continue the operation of the Farmers' Creditors Arrangement Act in the province of Manitoba after June next. The legislation of last year limited its operation to June 1 next, and the object of this bill is to extend it beyond that date.


William Gilbert Weir: With no limitation.


René-Antoine Pelletier: Is not that a limitation of action?


Victor Quelch: When we are discussing an amendment to an act I understand it is in order to discuss the whole act. If so, I should like to refer to the fact that we all realize that those farmers who went under the act prior to 1936 did not get the same sympathetic consideration as is now given by the board of

Farmers' Creditors Arrangement Act
review. Many farmers have found themselves in the position where they cannot possibly carry out the agreements. In view of the fact that we have a very critical condition in agriculture-


Charles Avery Dunning: I hate to keep bringing up points of order with respect to my hon. friends, but I think I am correct in stating that the discussion must be confined to the proposal in this bill inasmuch as it is concrete in character and has for its object the extending of the provisions of the act in the province beyond the date which was formerly the terminal date. I do not think my hon. friend would be in order in proposing an amendment or discussing other features of the existing legislation.


Frederick George Sanderson: In my opinion the point of order raised by the Minister of Finance (Mr. Dunning) is well taken.


Victor Quelch: I shall bring it up on the estimates.


Charles Avery Dunning: That is right.


Mr. DOUGLAS (Weyburn):: How many
applications were made to the board of review in Manitoba during the past fiscal year?


Charles Avery Dunning: I have not that information before me. However, I can tell my hon. friend that I did satisfy myself, apart from the general representations which were made, that the number of applications coming in gave support to the representations which had been made by members from Manitoba and by the legislature of the province.


Thomas Clement (Tommy) Douglas: It would
appear that interest in the act is being sustained and use made of the act in Manitoba as well as in Saskatchewan and Alberta.


Charles Avery Dunning: Yes. I think it fair to say there is possibly more vocal opposition to it in Manitoba than in either of the other two provinces. I hear more by way of protest of the kind to which I referred in the discussion a year ago from Manitoba than from the other two provinces, but nothing which convinces me that this would not be a desirable thing to do. In fact, it will be remembered that the proposal I first made to this house a year ago was to have what is here provided for with respect to Manitoba, Saskatchewan and Alberta applied to all the provinces, and the compromise ultimately reached was because of objection in the upper house to the course then proposed. I think this bill will probably undo an injury which would be inflicted by last year's legislation as it finally passed this parliament going into effect so far as Manitoba is concerned.


Thomas Clement (Tommy) Douglas: Have similar representations been made from British Columbia, or is there not the same desire there for the legislation?


Charles Avery Dunning: There have been no such representations.


William Gilbert Weir: I think it is well that the
minister made the observation he did a moment ago because we all recall that when this legislation was before the house for amendment last year, the proposal from the government then was to have the act continued in its application to Manitoba as it is now continued in Alberta and Saskatchewan. A change was made when the bill reached the upper house. It was not the government's intention at that time to have the act discontinued for Manitoba in June of this year. While unfortunately some criticism of the government's action has come from Manitoba, I do not think it is fair criticism because in view of the action taken by the senate, we had to compromise in order to have the legislation passed at all.
I have just one question to ask of the minister. Is it a fact that all soldier settlement board cases where compromises are made are dealt with under this legislation?


Mr. CRERAR:: So far as soldiers under
the Soldier Settlement Act are concerned, throughout Canada they all come under the Farmers' Creditors Arrangement Act.


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


[Stage Direction]
Hon. C. D. HOWE (Minister of Transport) moved the second reading of Bill No. 80, respecting the Canadian National Railway Compan3'', the Ontario and Quebec Railway Company, the Canadian Pacific Railway Company and the Toronto Terminals Railway Company.
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Sanderson in the chair.
On section 1-Conveyances ratified and confirmed.
Mr. HOWE:: Mr. Chairman, this bill is to clear some technical difficulties in connection with the title to the land now owned and used by the Toronto Terminal Railway Company. In 1904 a disastrous fire occurred in the locality

Railway Services-Toronto Terminals
of the former Grand Trunk station in Toronto. Following the fire the Grand Trunk Railway acquired certain land in the burnt area for extension of its terminal. In 1906 the Toronto Terminal Railway Company was formed to build the terminal, and the company entered into an agreement with the Grand Trunk Railway and the Canadian Pacific Railway, under the terms of which agreement the Grand Trunk and the Canadian Pacific were to turn over such of their lands in the city of Toronto as the terminal company might require. The lands were duly turned over, and the terminal was built, as we all know; but although the railways have made every effort to satisfy the solicitors for the terminal company as to delivery of a clear title to the land occupied by the terminal, certain technical difficulties have made it impossible to do so.
One piece of land turned over by the Grand Trunk Railway was British ordnance land, and although a deed had been sent to Britain for execution, it now appears that the deed was never executed. In the meantime the British ordnance land had become Canadian ordnance land, and no proper deed of this property to the Grand Trunk Railway had ever been issued although the Grand Trunk had been enjoying uninterrupted possession of the land for some eighty years.
Similarly, part of the land to be conveyed by the Grand Trunk Railway is subject to an old undischarged mortgage of the Grand Trunk Railway Company. The solicitors report that it is quite clear that under the terms of the settlement between the dominion government and the Grand Trunk Railway this land is the property of the Canadian National Railways, but in order to give clear title acceptable to the terminal company it is necessary for parliament to confirm the opinion of the railways that these mortgage rights have been extinguished.
I may add that in the event of the solicitors being mistaken and the former Grand Trunk shareholders having an equity in this land, which the solicitors feel sure they do not have, the bill provides for arbitration as between the Grand Trunk shareholders and the government through which the Grand Trunk shareholders may obtain from the courts any compensation that they can show is due them.
The third parcel of land is a matter between the Canadian Pacific Railway and the Toronto Terminal Company. In the title of the land turned over by the Canadian Pacific Railway there is a flaw which is not particularly serious, but even though slight, it is considered desirable to clear the matter up as a part of this bill.
This bill was requested by the president of the Canadian National Railways and the
president of the Canadian Pacific Railway Company in a letter to myself signed by them jointly. The passage of this legislation will enable the Toronto Terminal Company to obtain a clear title to this property and to disburse certain moneys that are due the two railway companies on account of land which the}' turned over for the terminal project.


Mr. STEWART:: Might I ask the minister if there is any land involved in this other than what was ordnance land or land owned by the company? The point I have in mind is the question of jurisdiction dealing with property and civil rights, and such is entirely within the jurisdiction of a province unless the land has been vested in, we will say, the crown in the right of the dominion, or possibly in the Canadian Pacific Railway or the Canadian National Railways, in which event I am not sure that provincial legislation will be required to deal with the land of either of those corporations or with ordnance lands. Has consideration been given to the necessity of getting provincial legislation in the same sense as the dominion legislation, because of the fact that we are dealing with property within a province, land which is within the jurisdiction of a province? I am inclined to think, if we were dealing only with ordnance lands or land that was vested in either of the two railway companies I have mentioned, that point might not arise. Is there any other land than land which was, at the time the transfers were made, under the control of, or vested in, or supposed to be vested in, either of these two companies? If we are seeking to vest land the title to which remains in some private individual or some corporation other than these two, I think there may be some question for consideration.


Clarence Decatur Howe: There are three parcels of land involved. The first is ordnance land to which everyone supposed the Grand Trunk Railway had title; the railway had been using it for a great many years; I think there is no doubt about that. The second is land which was owned for many years by the Grand Trunk Railway but was subject to an undischarged mortgage of a junior security. The settlement between the Grand Trunk and the government, in the opinion of solicitors, vested that land in the crown.


Hugh Alexander Stewart: Subject to that encumbrance.


Clarence Decatur Howe: Subject to that undischarged mortgage, which is believed to have been extinguished by the terms of acquisition. The third parcel of land is one which has been owned by a subsidiary of the Canadian Pacific Railway, namely the Ontario and Quebec
208O	COMMONS
Railway Services-Toronto Terminals
Railway Company, which is fully owned by the Canadian Pacific Railway, and that land is- therefore railway land. Outside these three parcels no property whatever is involved.


Hugh Alexander Stewart: The only question of doubt which the minister raises in my mind is that we are dealing with an encumbrance upon this property which is held by a corporation or, we will say, by an individual, and I question very much if this parliament has the right to extinguish a mortgage which I may hold upon property belonging to the Canadian National or the Canadian Pacific. Has there been any objection or protest from any source against this legislation?


Clarence Decatur Howe: There has been no protest whatever. I am informed by both the departmental solicitor and the solicitors of the two railways that it is purely a technical matter, that no private interest is involved. Of course the Canadian government acquired the Grand Trunk Railway under terms that determined the position of all its outstanding mortgages. In addition, a provision is made in this bill that if any damage in law can be shown, compensation may be paid as determined by arbitration. So there is an additional safeguard. The solicitors of both railways and our departmental solicitor say that this legislation is entirely within the jurisdiction of parliament and that no interest is damaged.


Henry Herbert Stevens: Although I may be pretty much alone in this respect, I rise to express the view that the legal rights of the Grand Trunk shareholders have not yet been properly satisfied. When I sought, last year, to discuss the matter in the house, it was ruled out on the ground that it was sub judice. That may be the case now-I do not think it is-[DOT] but I understood the minister to say that if any such claim existed it was protected in this part of clause 1:
Provided that any person or corporation that but for this act would be entitled to a claim against any of the said lands or interests by reason of any such trust, restriction, security, charge, mortgage or encumbrance or otherwise may assert a claim, for compensation against the company conveying the said lands or interests respectively and such compensation shall be fixed by arbitration under the arbitration provisions of the Railway Act.
I gather from the minister that he argues that this adequately guards against a possible legislating away by parliament of any claim the shareholders may have. I am not a lawyer, nor am I sufficiently versed in law to pass on the effectiveness of this proviso, but I express a layman's view to the effect that I do not believe this proviso would protect those interests.


Paul Joseph James Martin: It does not touch them.


Henry Herbert Stevens: I rise at this time merely to make the statement that in my opinion the shareholders of the Grand Trunk have not been properly treated. I am not going to argue that proposition now, although I may take an opportunity later on to do so. In my view they have valid claims, and their claims are against the assets of the old Grand Trunk, which is involved in this legislation. As I believe that their existing valid claims have not been satisfied, I suggest that any legislation which may affect those claims should be enacted with our eyes open.


Clarence Decatur Howe: The last action of the
Grand Trunk shareholders, an action for damages which was permitted under the decision of the privy council some two years ago, was recently passed upon by the supreme court of Ontario, which found that no damages were payable. As far as I know, there is no action of the Grand Trunk shareholders before the courts at the present time.


Henry Herbert Stevens: But the action referred to byr the minister was by the third preferred or the junior shareholders, not by the senior first and second preferred. As the question of the matter being sub judice has been removed, would the minister agree to have a discussion of this matter at some time during this session?


Clarence Decatur Howe: I believe it could be appropriately discussed on the estimates, and I shall have the proper adviser here in the hope that I can discuss the matter intelligently.


Henry Herbert Stevens: In order that the minister may be prepared, let me say that my presentation will be based largely upon the position of the first and second preferred shareholders, who originally were bondholders. My argument will be founded upon that part of the claim.


Mr. MARSHALL:: Is this company, the
Toronto Terminals Railway Company, simply a holding company of the Canadian National Railway? I notice that Mr. Hungerford is one of the signers on behalf of the Toronto Terminals Railway Company.


Clarence Decatur Howe: It is the company which
owns the Toronto terminals, but it is owned in turn as to fifty per cent by the Canadian National Railways and as to fifty per cent by the Canadian Pacific Railway. I am not sure that those proportions are exactly correct, but the company is wholly owned by the two railways.

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René-Antoine Pelletier: The purpose of this bill is to ratify and confirm three conveyances of certain lands to the Toronto Terminals Railway Company. Why was it necessary to introduce a bill for the purpose, and at whose request has this bill been introduced? Usually an indenture between parties is of legal value before a court of law. Why is it necessary to have an act of parliament in this case?


Clarence Decatur Howe: The reason is that the Grand Trunk Railway contracted with the terminal company to turn over certain property to it. The Canadian National, successor to the Grand Trunk, was unable to carry out the agreement on account of the fact that the Grand Trunk Railway had never obtained proper title to the property in question. It had owned and used it for years but had never . secured proper title for the reason that when it acquired the property it obtained it as British ordnance land. It did not obtain from the crown of Great Britain proper title which it could turn over to the terminal company. The second parcel is subject to an undischarged mortgage, the interest in which had passed to the Canadian government through purchase of the Grand Trunk railway. The case of the Canadian Pacific Railway is similar.


James Alexander Marshall: Are all the lands upon which we have union stations in the same holding company?


Clarence Decatur Howe: The Toronto Terminals Railway Company is not a holding company; it definitely owns all property of the Toronto Terminals Railway Company. The holding companies would be the Canadian National Railways and the Canadian Pacific Railway, because they hold the stock of the terminal company. The situation differs with regard to terminal stations. Sometimes one railway owns a terminal and leases to the other the use of it, as in Regina. In the present case the two railways formed a company jointly owned, which in itself would acquire property and build terminals. There are bonds of the Toronto Terminals Railway Company in the hands of the public to-day.


Hugh Alexander Stewart: Approaching the matter from an entirely different point of view from that of the hon. member for Kootenay East, and not having in mind the same subject, I still think that if any person or corporation has on this land a mortgage which cannot be discharged this parliament cannot deal with that at all; and this provision, which provides for such a person being compensated under the provisions of the Railway Act, is equally not binding. H you cannot deal with the land; if you cannot deal with the rights, even though the provision you offer may be a reasonable
one, you cannot bind them to the acceptance of it. I do not think the matter is serious. Any claims there are may have been barred by the statute of limitations. That is one point which arises, but I do not think it is of serious importance.


Clarence Decatur Howe: As a layman I am bound by the law officers of the crown. The Department of Justice declares that this is within the jurisdiction of parliament. The solicitors of both railways agree that it is the proper thing to do, and our departmental solicitor agrees with them.


Hugh Alexander Stewart: Lawyers, like doctors, sometimes disagree.


[Stage Direction]
Section agreed to.
Schedules A, B and C agreed to.
Bill reported, read the third time and passed.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


[Stage Direction]
The house resumed from Tuesday, March 21, consideration of the motion of Mr. J. S. Woodsworth (Winnipeg North Centre) for the second reading of Bill No. 6, to amend the criminal code.
Mr. W. R. MACDONALD (Brantford City):: Mr. Speaker, the bill under consideration at the present time would, if enacted, make it an offence for an employer to dismiss an employee merely because that employee belonged to a trade union. Brantford has many distinctions, among them being the fact that it is one of the most highly industrialized cities in the Dominion of Canada. I shall not take up the time of this house by enumerating the many and varied industries of that city, but with so many manufacturing concerns it is natural that our population should be made up to a very large extent of working people employed in these factories. They are the finest people in the world. The so-called working class of Brantford are industrious, law-abiding, patriotic, home-loving citizens. They are neither greedy nor grasping, but on the contrary are generous and fair-minded. To a great extent the same may be said of the employers of labour in that city, and as a result there have been very few strikes, lockouts or other labour troubles in
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our fair city. Cooperation and a spirit of tolerance prevail among both employees and employers, with resulting harmony, peace and goodwill.
The working men and women have their own organizations. Some belong to trade unions; some belong to local associations, often organized among and limited to the employees of a particular factory. These organizations, I am reliably informed, are not only approved but in many instances encouraged by the employers. The workers committee acts as a connecting link between the workers and the management and interprets to each the viewpoint of the other. To my mind these labour organizations are doing a splendid service and should be encouraged, and this house should be eager to adopt any legislation which will improve their efficiency and do away with any discrimination.
I have given careful study and consideration to this bill, and I can say that it has my whole-hearted support. I was delighted to hear the right hon. Minister of Justice (Mr. Lapointe) state this afternoon that he is introducing an amendment to the criminal code to make effective the legislation proposed in this bill, the purpose of which is clearly set out in the explanatory note. As I stated in opening my remarks, this legislation, if enacted, will prevent employers from refusing to employ or from dismissing employees, or from conspiring with others therefor, for the reason that the employees are members of a trade union. The explanatory note adds:
As it is lawful for workmen or employees to form themselves into trade unions and to bargain collectively, it should, as a matter of public policy, be unlawful for employers to seek by overt acts or intimidation, threats or conspiracy to prevent them from belonging to such trade unions.
Two questions are involved in this bill. The first is the matter of the principle of the bill. Do we approve or disapprove the principle it sets out? The second question is one of jurisdiction. In other words, the whole matter might be summarized in this way: Should we approve the principle of the bill and, if we do, is it possible for us to deal with the matter under the jurisdiction granted to us under the terms of heading No. 27 of section 91 of the British North America Act? I will try, first, to show that the principle involved is sound and, second, that it is within our competence to deal with this legislation; and I may add as a corollary that even if there is a doubt, the act should be placed upon the statute TMr. W. R. Macdonald.]
books in order that it might be referred to the courts so that its validity might be determined.
This legislation was first introduced into the house in 1936. At that time it was not opposition to the principle of the bill that prevented its adoption; it did not pass because it was introduced so late in the session. Last year the bill was introduced again as Bill No. 4, and the opposition to it developed on constitutional grounds rather than otherwise. As a matter of fact, there seems to be little objection, either within or without the house, to the principle of the bill. A labour union, as everyone knows, is a permanent institution of men organized for their own protection and for the betterment of conditions of their contract of work. These unions have been recognized by both federal and provincial law. I * believe it is important that this point should be recognized before any privileges or rights are claimed for them. The federal Trade Unions Act defines "trade union" to mean:
-such combination, whether temporary or permanent, for regulating the relations between workmen and masters, or for imposing restrictive conditions on the conduct of any trade or business, as would, but for this act, have been deemed to be an unlawful combination by reason of some one or more of its purposes being in restraint of trade.
The Trade Unions Act itself is very careful not to invade provincial jurisdiction in regard to agreements and other matters. For instance, section 3 of the Trade Unions Act states in part as follows:
This act shall not affect
(b) any agreement between an employer and those employed by him as to such employment.
There is no doubt that such agreements do not fall within the jurisdiction of the federal parliament but come under the heading of property and civil rights under section 92 of the British North America Act. There is no inclination or desire to encroach in any way upon provincial rights. On the other hand, there also exist in the provinces trade and labour union acts which deal more extensively with the same subject, and there never has been any difficulty as to the extent of jurisdiction in civil matters. Further, the provincial laws provide for collective agreements and contracts respecting working conditions entered into between representatives of labour unions and representatives of employers or an employer himself. In addition, the provincial authorities may generally order that any such collective labour agreements respecting any trade or industry shall also bind all employees and employers in a stated region within the

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province, that is, if it does not interfere with federal legislation such as the Conciliation and Labour Act.
Now, to continue with the rights of members of trade unions which are recognized by law, it is admitted that they have the right to strike, just as much as employers have the right of lockout. In the Industrial Disputes Investigation Act "strike" is defined as follows:
"Strike" or "to go on strike," without limiting the nature of its meaning, means the cessation.of work by a body of employees acting in combination, or a concerted refusal or a refusal under a common understanding of any number of employees to continue to work for an employer, in consequence of a dispute, done as a means of compelling their employer, or to aid other employees in compelling their employer, to accept terms of employment.
The word "dispute" is defined as:
. . . any difference between an employer and one or more of his employees, as to matters or things affecting or relating to work done or to be done by him or them, or as to the privileges, rights and duties of employers or employees, not involving any such violation thereof as constitutes an indictable offence. . . .
And so on. Certain strikes have been declared to be illegal by our criminal code. If there is anything that interferes with contracts, property or civil rights, above all things it is a strike. Nevertheless the criminal code by section 590 states:
No prosecution shall be maintainable against any person for conspiracy in refusing to work with or for any employer or workman, or for doing any act or causing any act to be done for the purpose of a trade combination, unless such act is an offence punishable by statute.
Section 499 of the code provides for a certain number of cases where it is an offence punishable on indictment or on summary conviction to go on strike, if thereby one wilfully breaks a contract, with danger to life or property, or a contract connected with a supply of power, light,, gas or water, or relating to the mails, and so on.
I do not think it is necessary to insist any further on this point, because there is no doubt that both provincially and federally labour has the right to organize itself as labour or trade unions, and to act as such within certain limits prescribed by law. Although they have the right to organize as labour unions, the criminal code makes it a crime for them to go beyond certain limits. For instance, although men may strike, they would not have the right, in so doing, to intimidate other people, to use violence, to follow people from place to place, to deprive others of the use of their tools, or to beset or watch the houses of others.
The purpose of the bill is that the criminal code should deal with employers in the same manner as it deals with employees. The law has given certain rights. These rights have been limited on the one hand, but if they are to exist at all they should be guaranteed and protected. If employees on strike are not permitted to use violence or to intimidate co-workers or their employers, I submit that employers should not be permitted to seek by intimidation, threat of loss of employment, to prevent men from doing what they have a perfect right to do-which is all that is asked by this bill.
This brings us to the constitutional aspect of the question. I do not intend to deal at length with this point, because I am quite willing to admit that the constitutional right of parliament to enact such legislation has been put in doubt iby some of the constitutional authorities in this house. On the other hand, I am sure that we could find in the house just as great a number of lawyers who would be willing to argue as to the constitutionality of section 502A as proposed to be inserted in the code iby section 1 of the bill.
I am conversant with the decisions of the privy council and of our supreme court with respect to the restricted power of this parliament as to the creation of new crimes. For instance, in the judgment in The Toronto Electric Commissioners v. Snider and the Attorneys-General of Canada and of Ontario, delivered by Viscount Haldane on January 20, 1925, the learned lord referred to the decision of the board wherein has been laid down the interpretation of section 91, head 27, of the British North America Act. He recalled that in the Reciprocal Insurers case, Mr. Justice Duff, of our own court, stated definitely the true interpretation in delivering the judgment of the judicial committee where, summing up' the effect of the series of previous decisions relating to the point, he said:
In accordance with the principle inherent in these decisions their lordships think it is no longer open to dispute that the parliament of Canada cannot, by purporting to create penal sanctions under section 91, head 27, appropriate to itself exclusively a field of jurisdiction in which, apart from such a procedure, it could exert no legal authority, and that if, when examined as a whole, legislation in form criminal is found, in aspects and for purposes exclusively within the provincial sphere, to deal with matters committed to the provinces, it cannot be upheld as valid.
In the earlier Board of Commerce case (1922, Appeal Cases 191) the principle to be applied was laid down in the same way. It was pointed out that the dominion had exclusive legislative power to create new crimes "*where the subject matter is one which, by its very nature, belongs to the domain of

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criminal jurisprudence." But "it is quite another thing, first to attempt to interfere with a class of subject committed exclusively to the provincial legislature, and then to justify this by enacting ancillary provisions, designated as new phrases of dominion criminal law, which require a title to so interfere as the basis of their application."
On the other hand, in the recent reference to the privy council with respect to section 498A of the criminal code, their lordships said:
The only limitation on the plenary power of the dominion to determine what shall or shall not be criminal is the condition that parliament shall not, in the guise of enacting criminal legislation in truth and in substance, encroach on any of the classes of subjects enumerated in section 92. It is no objection that it does in fact affect them. In a genuine attempt to amend the criminal law it may obviously affect previous existing civil rights.
And further:
In the present case there seems to be no reason for supposing that the dominion is using the criminal law as a pretence or pretext or that the legislation is in pith and substance in any way interfering with civil rights in the province.
Let us for a minute turn our attention to section 498A of the criminal code. What does it state? It says:
Every person engaged in trade or commerce or industry is guilty of an indictable offence and liable to a penalty who is a party to any transaction of sale which discriminates against competitors of the purchaser in that any discount, rebate or allowance is granted to the purchaser over and above any discount, rebate or allowance available at the time of such transaction to the competitors in respect of a sale of goods of like quality and quantity.
Surely if that is not interfering with contracts and freedom of contract and if it is not, according to the privy council, an invasion of civil rights, could not the same be said of an amendment the purpose of which is to prevent employers from seeking by overt acts, intimidation, threats or conspiracy, to prevent free men from doing what they have a perfect right to do? I submit that there is nothing wrong in se in granting to one purchaser a lower price than is granted to another prospective purchaser. On the other hand, it is wrong in se to threaten or to intimidate the same person when he is acting within his rights. If it is possible under the criminal code to create a crime and an offence out of the first act, then there is ten times as much justification for doing so in the second case. It is one thing to interfere with civil rights, such as the right to contract, and thus invade provincial legislation, but this proposed legislation does not invade the right of free contract and civil rights within the province. On the contrary, we are confirming that right 
when we make it a crime for anyone to prevent these same rights from being properly exercised.
It is my civil right to join a labour association. If anyone should seek by intimidation or threat to prevent me from exercising such a right there could be no doubt that this would be an offence, because the person doing so would be interfering with the liberty of the subject, one of the great rights granted in 1215 to Anglo-Saxon people by the Magna Charta, from which all our rights are derived. This cannot be said to be legislation in form criminal for purposes exclusively within the provincial sphere. I submit respectfully that this bill does not deal in any way with the matters committed to the provinces. As stated in the Board of Commerce case in 1922, the dominion has exclusive legislative power to create new crimes where the subject matter is one which by its very nature belongs in the domain of criminal jurisprudence. Certainly this is what is being done by this bill. There is no attempt to interfere in any way with that class of subject committed exclusively to the provincial legislatures. Any reasoning by which their lordships were able to uphold the validity of section 498A of the criminal code applies with even greater force with respect to the validity of the section which it is proposed by this bill to insert in the criminal code.
I should like to conclude by repeating the practical suggestion which was made last year by the then leader of the opposition, the Right Hon. Mr. Bennett, and which was quoted some time ago in this house by the hon. member for Winnipeg' North Centre (Mr. Woodsworth). The Right Hon. Mr. Bennett said:
If we have the strongest reason in the world for believing a statute to be valid, we should place it on the statute books and ask that it be referred to the court so that its validity may be determined. That is the method prescribed by law for that purpose.
I feel that the principle of this bill should be endorsed by this house, either in its present form or in the form in which the right hon. the Minister of Justice proposes to deal with the matter. For the reasons stated, I shall support the bill.


Mr. J. G. ROSS (Moose Jaw):: Mr. Speaker, I do not intend to take up the time of the house in discussing this matter. I desire only to state that I am in entire agreement with this amendment. I hope, when the Minister of Justice (Mr. Lapointe) brings down his amendments to the criminal code, he will incorporate among them this amendment and make it part of our criminal law. I believe

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it is right that this house should enact this legislation, and I hope this will ibe done at this session.


John Ritchie MacNicol: Mr. Speaker, it is not my intention to speak for more than a few minutes. First, I should like to congratulate the hon. member for Brantford City (Mr. Macdonald) upon the fair way in which he dealt with the subject matter of this bill and upon his excellent presentation. About thirty-five years ago I was a member of a trade union, and I continued my membership for some years. The company with which I was connected at that time employed between three and four thousand men, and they were insistent that their employees should be trade unionists. As I remember, they would not engage a man who was not a member of a trade union. Their experience was that the trade unionist was a thoroughly trained man, whether he was a machinist or a member of any other craft. The company realized that if they engaged trade unionists they would be certain of having capable and competent employees.
I am surprised to learn that to-day there are apparently employers who refuse to employ trade unionists or who dismiss men because they are members of a union. Certainly this should not be allowed. I am certain, however, that the vast majority of employers are more partial to trade unionists than they are to those who are not members of such unions. I am not referring to the employer who employs only a small number of men because I am not so familiar with that phase of industry. I do know, however, that the large employers realize that most of the improvements which have been brought about in working conditions, most of the increased efficiency in their plants and the freedom of their employees from injury, are the result of what the trade unions have done. The system of inspecting plants in order to ascertain that machines are properly guarded to prevent the loss of fingers or hands was instigated by the trade unions. Some years ago the health of workmen was endangered by dust or fumes of one kind or another, but all this has been changed. To-day in well regulated plants there is no possibility of injury to health from these causes. All these improvements have been brought about by the efforts of earnest men who were at the head of our trade unions. They have beseeched and urged employers to improve working conditions and provide safeguards. Where they were not successful, they were able to persuade their representatives in parliament to enact laws to that end.
I am in accord with the principle of this bill. I certainly would be opposed to the
dismissal of an employee or the non-employment of a worker because he happened to belong to a trade union. I cannot comprehend any large plant working against their own interests by such intimidations or threats. I cannot understand such a large organization working against the interests of its workers by doing the things referred to in this bill. My experience has been-and I have been associated not recently but some years ago with large numbers of workers- that anything that was done for the benefit of the worker in the plant resulted in more production, which was of great benefit to the firm itself. I have always felt that and do to-day, so that with the general principle of this bill I am glad to say I am in happy accord.


Robert James Manion: Mr. Speaker, it seems somewhat like beating a dead horse for anybody to discuss this bill at all now, but at the same time I made a few notes on my copy of the bill when it was introduced some two months ago by the hon. member for Winnipeg North Centre (Mr. Woodsworth), and I intended to support the bill when I got an opportunity. But the Minister of Justice (Mr. Lapointe) to-day, if I understood him aright, has pretty well covered the subject by saying that the object of this bill will be achieved by an amendment to the criminal code which he is going to introduce.


Ernest Lapointe: I am going to include this bill in the amendment after modifying it in such a way that it will run the gauntlet of the courts.


Robert James Manion: Yes. In other words, the minister says, as governments sometimes do, that there is a good deal of justice in the bill introduced by a private member, and he is going to adopt it as his own. I have no criticism to make of that because it is the way of all governments.


Ernest Lapointe: I have been asked to do it.


Robert James Manion: One could, of course, allow the hon. member to carry his bill through as an amendment to the criminal code.


Ernest Lapointe: He came to see me to ask for it.


Robert James Manion: In any event the principle of the bill is apparently going to be covered by an amendment to be brought in by the minister. The reason I was struck, when the bill was introduced, with the necessity of saying a few words in support of it was that I was shocked to think that in any large way

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at all such a thing as this bill seeks to prevent should take place in Canada. I cannot imagine that it often happens in this dominion that an employer of labour would consider dismissing an employee because he belonged to a trade union. After all, unionization has been recognized for the last seventy years or thereabouts. It is true that prior to that time in England unionization was not permitted as it is to-day. Indeed, it was a crime even in that very far advanced nation, to advocate the unionization of employees. One of the great advantages which democracies have over dictatorships is that we have this freedom of association and the right to collective bargaining and the unionization of workers which do not exist to-day in countries like Germany, Italy and Russia. The right of workers to organize, associate together and bargain collectively which the democracies still possess is an advantage over anything of which the dictator countries can boast.
I do not need to take up any more of the time of the house. It is sufficient to say that I am entirely in sympathy with the principle of this bill, and having listened to the debate and heard the views of various speakers from different sections of the house, I imagine that the minister will not introduce this session a measure that will be more unanimously approved than the amendment he proposes to bring in to the criminal code to cover this bill.


Angus MacInnis: Mr. Speaker, after the statement made by the Minister of Justice (Mr. Lapointe) this evening, I do not know whether it is necessary to say anything further on this bill. The minister may think some of us in this group are rather a bad lot, but I wish to let him know that, long before I ever came into this house, I had come to regard him with a great deal of esteem, and that was largely because of the reports I heard of him from the hon. member for AVinnipeg North Centre (Mr. AVoodsworth), who is not in his seat this evening. I am sure that the hon. member for AVinnipeg North Centre will be greatly pleased that the minister has seen his way clear to bringing in a measure to give effect to the principle that the hon. member has been advocating for so long, and I trust that the bill will meet all the requirements.
There is one matter on which I should like to say a word, a matter on which I have had a great many communications, so that I desire to put some of them on record. AVe have had in British Columbia at all events-and I have no doubt it is the same in some of the other provinces-what is called a black list; that is,
TMr. Manion.l
workers would be dismissed, by one employer for trade union activities, and then other employers would be notified, so that it became quite impossible for these workers to get employment. I remember that this matter was brought to the attention of the house in 1935 by the member for Comox-Alberni (Mr. Neill) who gave what I think was a very fair illustration of how the black list worked in British Columbia. Since Bill No. 5 was introduced, I have received quite a number of communications in regard to the operation of the black list, and all these complaints are accompanied by affidavits. I shall take the time to read one only, but it is typical of all the others. This is an affidavit that was made by Charles Kingsley. It reads:
I, Charles Kingsley, of the AVest Hotel, 444 Carrall street, in the city of Vancouver, in the province of British Columbia, make oath and say as follows:
1.	I have read the annexed statement which is signed by myself, and the same is true and accurate in every respect.
2.	I am the Charles Kingsley therein mentioned.
This affidavit was sworn before a notary public in and for the province of British Columbia. The statement of Charles Kingsley reads as follows:
I have worked in the woods in British Columbia since 1920 as a logger and have never been discharged for inefficiency or other cause except as mentioned below.
Between February and May 1934 I was active in the loggers' strike being in charge of the union relief for married strikers.
Following the strike I went back to work in Camp 4 of the Alberni Pacific Lumber Company, and remained on the job for a period of about four weeks. At that time approximately one hundred (100) men, all members of the union, were laid off. including myself. No reason was given for this lay-off but the camp continued operating with other employees. I am therefore of the opinion that the lay-off was directed against the union.
Since that time I have filled out the required application form at the loggers' agency (commonly known as Black's agency)-
By the way, that name .Black's Agency, indicates how this form of discrimination has come to be known in British Columbia as the black list.
Mr. MAYHEAAL AVould the hon. member mind telling me the date of the affidavit?


Angus MacInnis: I shall be very glad to. It says:
Sworn before me at the city of Vancouver, B.C., this 31st day of January, 1939.
The statement continues:
Since that time I have filled out the required application form at the loggers' agency (commonly known as Black's agency), 876 Hornby street, but although my application has been

Criminal Code-Trade Unions
on file for nearly five years I have not secured a job through the said agency. I have had many interviews with the agency and have never been able to secure from it other than vague statements as to the reason for my being unable to secure employment and I firmly believe that because of my union activity I am a victim of the "black-list system," particularly as I never had trouble in securing work before the 1934 strike.
In order to attempt to secure a position for myself, I have written to Hon. G. S. Pearson, Minister of Labour, on July 13, 1936, and February 28, 1938, calling attention to the situation above outlined, and asking for help. The replies which the minister sent me are attached to and form a part of this statement, and from his letter dated February 24, 1938, I gather that he too regards my employment through any agency of the loggers' association an impossibility, since he advised me to get work with some logging company outside the said association.
Then there are the letters from George S. Pearson, minister of labour of British Columbia.
Charles Kingsley, Esquire,
% West hotel, 440 Carrall street,
Vancouver, B.C.
Victoria, July 30, 1936.
Dear Sir:
I have received a reply from the B.C. Loggers' Association secretary and he states they have absolutely nothing against you, but that there has been a very great surplus of labour in the class in which you work and on this account they have not been able to offer you a position. However, he intimates that if you apply further they will try to find something for you as soon as possible. My suggestion is that you again make application to the loggers' association agency.
Yours very truly,
Geo. S. Pearson,
Minister.
In a later letter, dated February 24, 1938, writing to Mr. Kingsley again Mr. Pearson said:
Dear Sir:
I have your letter dated February 28th in which you complain of your inability to get work through the loggers' association.
It is rather difficult for me to help you in this matter as I cannot dictate to employers as to whom they should employ.
I understand, however, that the loggers' association employs less than half of the loggers that are employed in British Columbia, and that there are two other agencies who act for other logging companies.
I would suggest that you go down to the employment service of Canada and have a talk with Mr. Mitchell or Mr. McVety and see if they can help you in getting work with some logging company outside of the association.
Yours very truly,
Geo. S. Pearson,
Minister.
That affidavit, which is only.one of many that I have received, gives a fairly clear indication, I believe, of how the black list operates
in British Columbia. Last year, when I spoke in support of a bill similar to this one, I said that I was in favour of the recognition of trades unions, that I felt that proper recognition of trades unions by employers was not only necessary for the smooth operation of industry, but also necessary if there is to be any reality to what we call our democratic system of government. We cannot educate people, open up their minds and quicken their intelligences, and then expect that they are going to be satisfied to be treated like cattle in the positions which they occupy in industry. Because they are men they will insist upon asserting their rights in taking some part in the direction of the industries in which they work. I have in mind a statement made by Mr. Justice McIntosh, whom the government of British Columbia have had occasion to call in during the past few years in connection with a number of labour disputes. I believe I mentioned last year that, in his report on the dispute between the Burns Packing company and its employees, he stated that he felt satisfied the trouble would never have started if the company had been accustomed to dealing with their employees as trade unionists, and if the union officials had been experienced representatives. A great deal of the difficulty which developed, he said, was due to the lack of experience of the management in dealing with their employees on a trades union basis, and so far as the employees were concerned, to a lack of appreciation of their responsibility which goes with a properly organized trade union. The loggers' union of British Columbia can supply any number of instances of the operation of the black list in that province.
In closing, I wish to commend the Minister of Justice for the step he has taken in this very important matter.


Mr. H. B. McKINNON (Kenora-Rainy River):: I wish to congratulate the Minister of Justice (Mr. Lapointe) upon having seen his way clear to take up this bill and make a government measure of it. Unquestionably, organized labour in Canada has contributed a very great deal to the economic life of our country, and it has rendered good service on a number of occasions when intimidation has been used against men for being members of a labour organization. I have belonged to organized labour all my working days, but fortunately I have belonged to one of the railroad brotherhoods, and we have been dealing with men who for a good many years have been doing business with organized labour and appreciate what it means to be able to make contracts so that they will know

Criminal Code-Trade Unions
what their expenses on operations are going to be for a considerable time in advance. I do not propose to take up any more time; I just wanted to state that I am in entire accord with this bill, because I feel it is going to fill a need which has been long felt in this country.


Mr. J. A. MARSH (Hamilton West):: I would not delay the passage of this bill; rather I would do everything in my power to push it along; so what I have to say will take only a moment.
The principle of the bill is sound. I am glad to see that there is such unanimity of expression in its favour from many speakers in the house. We owe to trades unionism in this country much that is of value for the security of our working men. There has always been a question in my mind regarding the criminality of the act under one clause in particular. That clause, I see, has been changed somewhat, and perhaps it may be further changed when the Minister of Justice (Mr. Lapointe) brings in the government bill. Nevertheless I realize that heavy fines may not achieve the purpose for which this bill is created, and if infraction of the act must be made a criminal offence in order to put teeth into the law I am quite in favour of it.
As regards the black-list tactics which were mentioned by the hon. member for Vancouver East (Mr. Maclnnis), some time ago I made inquiries in the city of Hamilton, and I found that employers of labour, far from being anxious to make use of the black list, were anxious to treat with the trades unions and do everything possible to keep satisfied workmen in their plants.
I am heartily in accord with the bill and I shall certainly support it.


Mr. A. B. DAMUDE (Welland):: I want to take this opportunity of adding my support to the bill and expressing my agreement with the attitude of the Minister of Justice (Mr. Lapointe). Having the honour to represent the constituency of Welland, in which there is a great diversification of industry, including almost every kind of occupation, I find that generally this bill meets with the approval of labour in my riding. Therefore I am pleased to support the bill. I concur in the remarks made by the hon. member for Brantford City (Mr. Macdonald), and I am also in accord with the remarks of the hon. member for Davenport (Mr. MacNicol), which seem to me very much to the point.


Abraham Albert Heaps: I am pleased indeed at the unanimity with which the bill sponsored by the hon. member for Winnipeg North Centre (Mr. Woodsworth)

has been supported. It shows the advance that this house is making in connection with matters affecting trade unions. I was more than pleased to hear the announcement of the Minister of Justice (Mr. Lapointe) this afternoon when he said he would incorporate in the criminal code the principle of the bill. In view of that fact, it would be almost out of place for me this evening to discuss this bill I would far sooner speak to the question when the Minister of Justice brings in his amendments to the criminal code. I therefore move the adjournment of the debate.
Motion agreed to and debate adjourned. ROYAL SEALS



ISSUE OP BOYAL INSTRUMENTS AND ORDERS AND REGULATIONS WITH RESPECT THEREOF

[Stage Direction]
Right Hon. ERNEST LAPOINTE (Minister of Justice) moved the second reading of Bill No. 76, to make provision for the sealing of royal instruments.
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Sanderson in the chair.
Sections 1 and 2 agreed to.
On section 3-Issue of royal instruments.
Mr. MacNEIL. Will the minister explain the purpose of this section?
Ernest Lapointe: As the explanatory note indicates, this is the operating provision of the act. The necessity for this section arises more particularly from the prospective visit of His Majesty the King. During his majesty's presence in Canada, it would not be possible, under existing laws and practice, to issue royal instruments in relation to Canadian matters under the great seal or the signet of the United Kingdom. His majesty may be called upon to issue such instruments during the period of his visit in Canada-that is, for Canadian matters-and section 8 makes provision for the passing of such instruments under the great seal of Canada.


[Stage Direction]
Section agreed to.
On section 4-Orders and regulations.
Ernest Lapointe: Section
l is to enable permanent provision to be made for subjecting Canadian transactions involving the use of the royal seal, in form as well as in substance, to the direct control and responsibility of Canadian ministers. As it is to-day, shere is no statute governing the matter; it is under convention. When the use of the

Royal Seals
royal seal is necessitated on instruments, treaties, for instance, it is done on the recommendation of a Secretary of State in the United Kingdom, but at the request of a dominion minister, and it is usually countersigned by a responsible Canadian minister. But it is not done under statute; it is merely convention. This will have the effect of making the substance and the form agree. It may be done in the same way but under order in council of Canada, always subject to the approval of His Majesty the King. This is merely enabling legislation to make the present situation agree with the constitutional development of Canada.


Paul Joseph James Martin: Will the minister say
whether the legislation now before the committee is based upon any existing legislation in any of the other dominions of the British commonwealth ?


Ernest Lapointe: The Irish Tree State did the same thing in 1931, but without legislation. The Irish foreign minister simply went to Buckingham palace with a seal and his majesty accepted it, but it was not done under legislation. I do not know that any legislation has been enacted in the Irish Free State. It was done by convention and accepted by his majesty. In the Union of South Africa, however, there is legislation.


Mr. MacNEIL:: In what respect does this
alter the practice in connection with the signing of treaties, for example?


Ernest Lapointe: The
present arrangements may continue, but they will continue under order in council of Canada. The grand seal of the realm may still be used, but it will be under the authority of the Canadian parliament. Section 3 authorizes the use of the great seal of Canada but it will be when the king is in Canada. The great seal of Canada will be kept here, and of course, we shall have to follow the present arrangements over there, but it will be done under this legislation instead of according to usage and conventions as it is to-day.


Mr. STIRLING:: Am I right in supposing that the first part of the 'bill is necessitated by the presence of his majesty in Canada this year?


Ernest Lapointe: Yes.


Grote Stirling: And the second part is for the purpose of regularizing what has hitherto been done by custom or convention?


Ernest Lapointe: Exactly.


Grote Stirling: Will it affect in any way the granting of royal assent? Will it change the method of procedure in that regard?


Ernest Lapointe: No.


Grote Stirling: Or with regard to instruments such as the one under which the right hon. gentleman himself holds office, does it affect that sort of document?


Ernest Lapointe: When the great seal is to foe used-the great seal of the realm is the name now; it was formerly the great seal of the United Kingdom

it is done by a warrant which is issued by some responsible minister in Great Britain, and of course at the request of a Canadian minister. It is a matter of procedure which has been adopted, but it might be changed if it were thought that matters might be facilitated under some other arrangement. But that would be done under section 4 by order in council. I think the present arrangement is working well. This is merely to give authority to do it.


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

[Stage Direction]
Hon. W. D. EULER (Minister of Trade and
Commerce) moved the second reading of Bill No. 81, to provide for the supervision and regulation of trading in grain futures.
Mr. E. E. PERLEY (Qu'Appelle):: I desire to make a few observations in connection with this measure, which I would say has been badly needed for many years in western Canada. Some control over the operations of the Winnipeg clearing house and the Winnipeg grain exchange is absolutely necessary. I believe if this legislation had been in force last fall, even in its present form, it would have saved this government and the people of Canada many millions of dollars; for, if I am correctly informed, certain large selling operations by the big international firms took place on the exchange shortly after the announcement of the government's policy with respect to the eighty cent fixed price and the selling of grain, which had a depressing effect on the market. Had a supervisor been in charge, I think there is no doubt that he would have prohibited much of the selling that took place. I believe it is agreed by all concerned that during the last twenty-five years the free and uncontrolled operation of the Winnipeg grain exchange has cost the producers of western Canada many millions of
Grain Futures-Mr. Perley

dollars. In my opinion it is doubtful if the exchange would 'be necessary at all if we had a proper wheat board and a board using the powers granted to it.
I am not going to take very long, but for a few moments I should like to examine some of the evidence heard by the Turgeon commission, since this bill is based upon a recommendation contained in the report of that commission. I have devoted quite a considerable time to the study and review of some of that evidence. Perhaps not very many members of this house realize that the evidence given before that commission covers some fourteen or fifteen thousand pages. The report deals with some of the evidence, but it is an almost impossible task to make a careful study of all the evidence presented, as I am sure all hon. members will appreciate. However, I have gone through the index of the evidence and made some notes in regard to points that I think are of importance.
The commission went overseas and heard the evidence of some buyers in regard to what they thought would happen if the Winnipeg futures market were closed, and I should like to give a few quotations in that regard. A number of witnesses were asked by the commissioner and the counsel who accompanied him overseas what if any difficulty they would anticipate to the producers of western Canada if the Winnipeg futures market were closed. At page 10372, David Muir, of Glasgow, manager of the Scottish Cooperative Wholesale Society, said he saw no difficulty if the Winnipeg futures market were closed. Mr. Bracey, buyer for the English C.W.S., which is also a wholesale society of Liverpool, at page 10492 said the advantage would be all to the producer if the Winnipeg market were closed. At page 10446 Mr. Snodgrass, a Glasgow miller, said:
If it disappeared (that is, the Winnipeg market) I would not like to say that we could not get on quite well without it.
The evidence of some of the members of the Glasgow Corn Association was taken. At page 10392 one of them said that if the Winnipeg futures market were closed there would be one less market to watch. I do not think it necessary to take the time to quote many of the additional, similar statements that were made; that is the evidence of overseas buyers as to what they thought would be the result if the market were closed.
I should like now to give the house some information in regard to the extent to which overseas buyers use the Winnipeg market for hedging purposes. I find that the general consensus of opinion expressed in the evidence given by millers and merchants in the

countries visited by the commission was that they used the Winnipeg market for hedging purposes only occasionally. One witness said that apart from the three big English millers practically no hedging at all was done by the United Kingdom miller. Then on the continent Alphonse Van Kan, president of the Belgian Millers' Association, at page 10684 said that speaking as a miller he hedged very little. Another gentleman, Mr. Van Lompa, a Belgian miller, at page 10703 said:
We have never used the option market in respect to a single bushel in our existence.
Those are buyers and millers on the continent and in the United Kingdom. Then at page 10496 a man by the name of McFayden, connected with the Scottish wholesale society of Liverpool, said he could not see the necessity at all for dealing in options on the Winnipeg market. We have another by Mr. Stuych, broker at Antwerp who, at page 10778 of the evidence said he seldom hedges when he buys, depending upon his view of the market. Then, Pillman of the British National Millers' Association states at page 9682 that his firm never had to hedge in fifty years of operation. Another man, Jordan, a French miller, states that he neither buys nor sells on the Winnipeg futures market.
These are a few quotations I have compiled from the evidence, and I give them here just to show that so far as the Winnipeg futures market is concerned the evidence is conclusive that it would not adversely affect the producer in western Canada, if it were closed, and also to show that the buyers that we are depending on in Great Britain and Europe do not use it for hedging, to any great amount.
Let me give the house briefly some idea of the volume of trading, and then I want hon. members to ask themselves if they think it is necessary. I might mention that the compilation of this information was a heavy task. When I visited the sessional papers office and took occasion to go through some of the evidence, I asked the man in charge how many hon. members had been in his office and had asked to see and to review the evidence. He said there had been only three, and he named the Right Hon. R. B. Bennett, a Liberal member from Saskatchewan and myself. He said the Liberal member looked at the volume of stuff, turned over a few pages and said, "Well, this is quite a job." Then, on turning over some more pages, he made the further remark, "I do not think it would be parliamentary"-and that was the only time he visited the office or interested himself in the matter. I might say further the

Grain Futures-Mr. Perley
leader of the opposition also looked it over and discussed it. He realized what a task it would be to get anything out of it, and made only one visit to the office.
I was more interested, and I have compiled a few notes. Part of the evidence made reference to the commission headed by Sir Josiah Stamp. At page 49 of the evidence before that commission there was reference to the volume of trading on the Winnipeg market. They took the year 1929 as a normal crop year. The crop in that year was 304,000,000 bushels. First, may I point out there was evidence to the effect that buying and selling hedges on the Winnipeg market are seldom equal; in fact, they are far from being equal.
Evidence was given as to the records of Mr. McFarland's trading in one year. There were records of the pools' trading, and those records showed that of the 184,000,000 bushels traded in, 175,000,000 were buying hedges by McFarland, or under his operations. So that the selling hedges, making up the balance, were out of proportion to the buying hedges.
I .now come to the volume of trading in 1929. I would recall to the minds of hon. members that 1929 was a year when there was practically a collapse in our markets. There was a collapse in the markets of the world, so far as the sale of our wheat was concerned. That was the year when the pools were in difficulties. Records show that of the wheat taken over by McFarland when he undertook operations of stabilization in which he undertook to sell the surplus wheat then accumulated, forty-seven per cent was held by the grain trade and fifty-three per cent by the pools. That year has been taken as an average, however, and, as I pointed out before, that was a year in which prices practically collapsed.
The point I wish to make is that when the grain exchange was in full operation, it could not take care of the situation and did not function properly. We take the year 1929 with its crop of 304.000,000 bushels. The average traded on the Winnipeg grain exchange from May 1, 1929, to March 31, 1931, was 23,488,000 bushels daily. The highest trading in one day was 38,000.000 bushels, and over the whole period the average was 24,000,000 bushels daily. In 1929 there were 300 trading days. The total traded in, bought and sold, amounted to 7,200,000,000 bushels, made up as I shall describe. Of the crop of 304,000,000 bushels the pool handled, unhedged, 121,000,000 bushels. The amount retained for seed and feed was 50,000,000 bushels. I think that was a little short. The hedgeable grain stood at 133.000,000 bushels. The carryover of the pools'
share of the crop, unhedged, was 91,000,000 bushels, and the hedgeable carryover in the grain trade was 48,000,000 bushels, leaving a total of 43,000,000 bushels of the carryover to be hedged. Or, in other words, there was a total of 176,000,000 bushels of cash grain actually to go through the exchanges on the open market, and to be hedged.
As I said a moment ago, the volume of trading was 7,200,000,000 bushels; in other words, they bought and sold the crop forty-one times. The point I wish to make is this: Does anyone think it is necessary to permit an organization to proceed in that way, especially when in the year they did that amount of trading there was a collapse in the markets and there was no effort on their part to keep the price up? Do hon. members think it is necessary that we permit such an organization to carry on?
I should like now to review the report of Mr. Justice Turgeon, and to point out a few advantages I believe a Canadian wheat board operating exclusively might have. I would not say they would have 100 per cent control; but if with the assistance of the bill we are now considering there were a tightening up on the market, and the board were properly functioning, they would be almost in control to operate 100 per cent. They would always hold prices at competitive values. It could instantly meet price cutting. It could tend to reduce fluctuation in prices. It could negotiate with foreign semi-governmental bodies where centralized buying and quota restrictions are now to be found. It could best handle things in an emergency. This is evidenced by the report of the Turgeon commission. Such a board could assist in the development of a national agricultural policy. I believe this government is making some little effort toward that end. The board could protect the producers of western Canada. These producers generally are satisfied with the act, and if the board were properly operating, they would also be satisfied with it. The board could do one more important thing. It could be a real competitor to the large international firms which are now working on the exchange and which have much greater control than many of us realize. I am informed that last fall the "big three" played a very important part in the selling operations which depressed the price.
Mr. Justice Turgeon reported that the board was the only system which could function properly in an emergency. It was stated in the report that the open market cannot function properly in an emergency. The commissioner has admitted in his report that the board is the only agency which is best adapted

Grain Futures-Mr. Perley
to act in an emergency. The commissioner admits that a government agency is best under the present haphazard method of negotiating with countries where centralized or partly centralized buying is in vogue. There is no argument against that. Evidence is given at page 9996 by Australian witnesses that international agreements might be necessary within the next five years. I think we shall have to have some international arrangement in connection with the marketing if we continue to produce as we have produced, and the Australians think that will come within the next five years.
Mr. Abrahams, an old country buyer, stated at page 10576 that the grain trade has changed completely in the various countries, that importation is not allowed in many countries except under special licence. He stated that in Italy and Germany there is no longer free trade in wheat, and that the trade in various countries is entirely in the hands of the governments. Mr. Smith of the Winnipeg grain exchange, who is also president of one of the large exporting companies, stated at page 3034 that they sell to government agencies. The same witness stated at page 3088 that the Italians bought wheat under government supervision only. Hon. members must remember that this is one of our principal Canadian exporters. He stated at page 3089 that Holland has a government agency in New York through which they have to operate. Here is the evidence that a government agency can deal more adequately with the situation.
I do not think there is any question that the Canadian Wheat Board Act must stand. More power should be given to the board to permit them to become exporters of wheat. In view of the evidence which we have had and the difficult period that is ahead of us-this is declared to be an emergency year-I think we should consider the question of a grain exchange or no grain exchange. That is something which it might be well for this parliament to consider. In the last twenty years or so we have had seventeen inquiries into the grain business. Many of them have not been of much value. There has been no inquiry into the operations of the exchange such as I should like to have. Hon. members will recall that back in 1936, when the Turgeon commission was set up, the Right Hon. R. B. Bennett and I made a plea to the Minister of Trade and Commerce (Mr. Euler) to see to it that the commission made a thorough inquiry into the operations of the grain exchange in Winnipeg. I have in my hand some of the correspondence which occurred following that request made in the

house. I have letters between the Minister of Trade and Commerce and myself, between the Minister of Trade and Commerce and Mr. Ralston who was counsel for the commission, between the minister and the commissioner and between the minister and Mr. Bennett. This correspondence goes to show that there was no intention of making an inquiry into the grain trade such as was made into the textile business.
This inquiry should not have been conducted by members of the legal fraternity; it should have been carried on by men selected by industry or from the busines world. Then we would not have had the legal battles which occurred many times during the sessions of this commission. I think the public is weary of royal commissions made up of a lot of legal talent and surrounded with a lot of legal red tape. I sat in on a few of the sessions of this commission, and on two or three occasions I heard the lawyers arguing as to whether questions were in order and so on. It was just a legal battle. I suggest that hon. members look at this report. On one page they will see a list of the counsel connected with this commission. There were some twenty or more lawyers connected in one way or another with this inquiry, although not all were on the government payroll. Had they all been paid at the rate at which one or two of them were, the inquiry would have cost us a fortune. Twenty-one lawyers representing different interests in western Canada followed the commission. We provided for the cost of this commission last year, but I think it would be interesting if we knew the total amount that had been paid in legal fees to the twenty odd lawyers who followed this commission across Canada.
I said at the outset of my remarks that I thought this bill was something which we should have had many years ago. To-day is practically the first time I have seen this bill.
I notice it provides for a supervisor, and apparently not too much power is to be given to him.
I would prefer if we had had a comptroller with the power to stop trading in futures at any moment. Apparently it is the intention of the minister to give that power to the supervisor, and I should like to see it made very plain that this supervisor will have sufficient authority to stop trading at any time, and certainly to prohibit selling such as we are led to believe went on last fall. I do not know whether the bill is to go to a committee, but I suggest that it should because it deals with a very important matter. This evening I have set out some of the facts which were disclosed in the evidence given before the

Grain Futures-Mr. Hay hurst
Turgeon commission, but there is much more information worthy of consideration to be found in this evidence which is now in the sessional papers office.
I appreciate the fact that a great many members of this house are not conversant with western conditions, and I hardly think one can get an intelligent decision on the merits of the bill in committee of the whole because it involves consideration of the intricacies of a complicated and very important institution. I would ask the minister just how far, for instance, he took into consideration the rules and regulations of the Chicago board of trade and the provisions of the Commodity Exchange Act by which the Chicago board of trade operates, and how far he is endeavouring in this measure to follow the rules and regulations governing trading by that organization. There is no doubt in my mind that if sufficient powers of control were given to the supervisor he could prevent the manipulation of corners and squeezes, as they are called. That is something which certainly should not be permitted, and could be prevented with proper control.
In conclusion, there are one or two suggestions I should like to make if the bill goes to a committee. I would ask the committee and the Minister of Trade and Commerce to give serious consideration to making the port of Vancouver and the port of Churchill points of delivery for all transactions implemented on the Winnipeg exchange. I think there is a strong discrimination being exercised against these two ports. The members from western Canada I think will agree with me that if we can do anything to facilitate the getting of business for the port of Churchill it is our business to do it. For certain months of the year that port should be made a point of delivery for all future contracts.
I do not wish to take further time in discussing the bill. I would suggest that the minister allow it to go to a committee, possibly the committee on agriculture, where some other important measures affecting western wheat growers and producers, such as trading in grain, and other matters are to be considered, because I think this bill could be more intelligently reviewed there. With all respect for the members of the house, very few but western members have any knowledge of what goes on in the institution for which it is now proposed to appoint a supervisor with powers of control. The very fact that it is considered necessary to appoint a supervisor for this clearing house is an evidence of its great importance, and I think the members from western Canada would be the ones best fitted to consider this measure in detail in a committee.
I have here the Commodity Exchange Act under which the Chicago board of trade is operating, and it is a very long and complicated act. I have already asked the minister how far he and his officers considered this act when drafting this bill. There are very many provisions in this act and rules and regulations governing trading on the Chicago board of trade that we should take into consideration. While I leave it to the best judgment of the minister, I do feel that this is one measure upon which we can profitably spend some little time and that we can consider it best in the committee on agriculture. We cannot give it the consideration it deserves in committee of the whole.


Mr. WILLIAM HAYHURST (Vegreville):: Mr. Speaker, listening to the hon. member for Qu'Appelle (Mr. Perley), I thought probably I should say a few words on this bill. Most of the members from western Canada know that the people who lose money on the market are the very ones who can least afford to do so. From my own training I am perhaps in a position to speak on this question because my people have been millers for generations back in the old country. In the old land the Liverpool corn exchange and other corn exchanges are not used to the same extent as the Winnipeg grain exchange or the Chicago grain exchange for purposes of pure speculation or gambling. The hon. member for Qu'Appelle says that men bought futures and then were squeezed. I would call that unprincipled manipulation. I have observed rye being quoted in some years on the Winnipeg exchange at a higher price than wheat, and yet we all know that the intrinsic value of rye is not as high as that of wheat, but the price is sent up probably because of a corner in that commodity at that particular time.
From my experience I would say that we should have a 100 per cent wheat board, and I should like to read what the Turgeon commission said in that regard:
For all these reasons (and notwithstanding the adverse considerations to which I have referred in relation to government boards) I do not feel that I can suggest the immediate dissolution of the Canadian wheat board.
I understand another bill is coming in which will bring about a 100 per cent wheat board. The Turgeon report continues:
There is a strong possibility that conditions may develop which will require a measure of assistance in the marketing of the coming crop, and I do not know, of course, how long these conditions may continue after the final chapter of this report is written. In the meantime I can think of nothing better to suggest than that the board be maintained to meet any situation which may arise.
2G94

Grain Futures-Mr. Hay hurst
As I said in my opening remarks, the people who lose money trading on the exchange are the ones who can ill afford to lose it. Why do they lose money? Because gambling has an appeal and it is perhaps the spirit of sportsmanship within us all that tempts people to' take a chance on the market. We know that the great break in the stock exchange in 1929 was caused mostly by the thousands, yes millions of people in north America who were trading on margin on the stock exchange. People trade on the grain exchange on margin, and the fluctuations in the market are such that the margins can be very quickly wiped out and people lose their all. The judgment of the general public is usually poor. When the Minister of Pensions (Mr. Power), speaking on the elections act said that you cannot take away judgment I thought of members of parliament receiving demands from different sections of their community for this, that or the other thing. One section of the community might demand the abolition of the grain exchange, and another section might say no, we want it, because we want to gamble on the exchange. I believe, Mr. Speaker, that we should use our best judgment in whatever position we are placed; but the judgment of the public is usually poor; the element of chance makes a great appeal to them, and they will take a fling on the grain exchange to make some easy money. I see my friends of the Cooperative Commonwealth Federation are smiling, but really that is one of the great causes of the maldistribution of wealth. If we are to have a better distribution of wealth we must have in this country a system which will remove some of the causes of maldistribution, including gambling on the grain exchange.
Last summer, while I was in Great Britain, I observed that most of the millers buy their wheat on sample from the Liverpool shipping houses, and the transportation system over there is so different from what it used to be that the grain exchanges do not function as they formerly did. I am sure that this applies also to this country. Millers send their trucks right down to the boats, very frequently wheat taken from these ships is transported by road as far as Carlisle, on the borders of Scotland; it never gets on a train in passing from a boat to the mill, but is sold on sample at so much a ton, whether it be Argentine or Canadian or Australian wheat.
So to-day we are living under different conditions from those of the past. It has been said that everybody who speaks on this subject must have had his fingers burned. I 
do not think that is entirely true, but certainly we often have to learn from experience. Unfortunately the experience from which many have to learn is an experience of losses from which it is not they who suffer but those who are dependent upon them. So, if we wish to remove one definite blight upon society, I plead with this house to eliminate the waste of speculation in grain futures and so do something to raise the standard of living of our people.


Hon. W. D. EULER (Minister of Trade and Commerce):: I am afraid that I cannot follow entirely the remarks, especially the critical remarks, made by the hon. member for Qu'Appelle (Mr. Perley). At the beginning of his speech he said that he thought this legislation should have been in force a good many years ago, and apparently he approves it. At the same time, if I understood him aright, he expressed the opinion that there should not be any grain exchange at all, that there should be no dealing in futures on the grain exchange. Also he criticizes, perhaps more by inference than directly, the operations of the wheat board.
While strictly speaking, perhaps, the wheat board does not come into this discussion, I might say that it acted in accordance with the policy of the government with regard to the disposal of wheat. The government does not concur in the view the hon. member expressed some time ago. When it was brought to my attention, I believe I mentioned to him personally, that if he were in control of the wheat board he would have held the wheat back and consequently have obtained a higher price. I would merely say in passing that if my hon. friend had been in charge of the wheat board and had acted as he says he would have done, he would have been acting directly contrary to the provisions of the Wheat Board Act.


Ernest Edward Perley: Will the minister allow
me? My criticism was not so much of the operations of the board so far as using the exchange is concerned. What I said was that if this act had been in force they would not have allowed selling operations which, following the government's selling policy, had a depressing effect.


William Daum Euler: Just a word with regard to the suggestion of the hon. member for Qu'Appelle that this bill should be referred to the committee on agriculture or some other suitable committee. It is not the intention of the government to do that, not from any desire, I can assure the committee, of suppressing debate or of not giving sufficient

Grain Futures-Mr. Euler
opportunity of discussing the 'bill, but because, at least in my opinion, there was no demand for such action and up to this time there has not been any demand that the bill should go to a committee other than the committee of the whole. I felt that since the bill follows out practically in their entirety the recommendations of the commissioner, Mr. Justice Turgeon, there is no real ground for believing that it is of a contentious nature. After all, the commissioner has reported in favour of an open market, that the wheat should ibe sold through the regular exchange at Winnipeg. He also suggests that the futures market should be continued. If we wished to accept his recommendation, it merely became a question of seeing to it that such abuses as have occurred in the exchange should be controlled in the manner in which the commissioner suggests. If the issue is to be whether the exchange shall or shall not be allowed to continue, it seems to me that we should be repudiating entirely the report of the commissioner, and certainly the government is hot prepared to do that.
' The hon. member who spoke last made some criticism of the practice of gambling, as he calls the buying and selling of futures. I know a great many people are opposed to that sort of thing. At the same time it must be remembered that one could call a great many transactions in business by the same term. A man buys a piece of property not because he expects to use it but (because he wants to get a higher price for it. He buys stocks; probably, he is sorry that he did so.


William Hayhurst: I was thinking more along the line of fortunes made without any effort on the part of the persons who gain them.


William Daum Euler: Well, that applies to a good many of the fellows who buy and sell stocks. They buy them to-day and sell them the day after to-morrow when they have gone up. Without actually contributing anything, they make money out of the transaction, or perchance they lose.


William Hayhurst: The minister would
advocate buying all stocks outright, would he not?


William Daum Euler: When I have a little money I do that.


Joseph Enoil Michaud: Provided one has the
money to do it.


William Daum Euler: I do not think the question is whether we shall have an exchange or not; it is a matter of the regulation of the exchange. I shall not quote at any length from the report 71492-170
of the commissioner, because I assume that most hon. members have read it, but here are his words, at page 182:
In proceeding now to state the opinion I have formed regarding a marketing method for Canadian wheat, I shall first deal with the problem on the basis of normal conditions existing at home and abroad, that is conditions which do not call for action of an unusual nature involving a departure, more or less temporary, from settled and approved business practices.
And this is the sentence to which I would call attention:
Our policy should then be the continuation of the futures trading market at Winnipeg and the encouragement of the building up of producers' cooperative marketing societies, organized and conducted in a manner approaching in so far as practicable, the organization and business methods of the Australian pools. . . .
I shall not quote further at that particular point. After reviewing still further some of the considerations which determined his decision, the commissioner says:
Having regard to these considerations, I am convinced, from all the knowledge I have been able to acquire on the subject, that the futures trading system, despite its imperfections, is the one best qualified to look after the interests of our producers, at home and abroad.
Again he says:
It cannot be doubted that the closing of the Winnipeg exchange would greatly increase the volume of futures trading in our wheat in other markets, and the volume of speculation along with it. It is true that the Winnipeg market has not always been a fully satisfactory one. It has sometimes been out of line through causes which I have examined and which should be avoided in the future. Nevertheless I cannot help but feel that its closing would have a depressing effect upon our marketing, and would merely help to build up other markets without any corresponding advantage to ourselves. This was the effect of the prohibition, in 1896, of futures trading in Berlin.
Then he gives the experience of that exchange in Berlin. Sir Josiah Stamp submitted a report in connection with this very matter to which I have referred. At page 66 of his report he says:
The prohibition of business in options and futures (in Berlin) continued to paralyse business by making an effective insurance against loss extremely difficult, and at all events very expensive, because foreign markets such as New York and Chicago had to be resorted to.
And then he made this comment:
The produce exchange and dealing in options were shortly afterwards reopened.
Then he said that if the exchange were abolished altogether the only possible remedy would be the formation of a compulsory

Grain Futures

wheat board. I know very well that many of our western friends are in favour of a compulsory wheat board, but there are also a great many people in the west who are just as much opposed to it.


An hon. MEMBER:: The opposition is in the minority.


William Daum Euler: That is a matter of opinion which could not be proved. At any rate the commissioner makes this statement with reference to a wheat board. At the bottom of page 184 he says:
The demand made before me for the abolition of futures trading in Canada was always accompanied by a further demand for the creation by the government of a permanent national wheat board, whose duty it would be to take over the whole of our wheat crop each year and to market it both at home and abroad . . .
This proposal of a compulsory government board has preoccupied me more than anything else since the beginning of this inquiry. It was asked for by nearly all the farmers' organizations, and by a great many of the individual farmers, who appeared before me. It is a naturally attractive proposal at first blush, particularly after the many hard years our people have gone through. The idea of government support to marketing undoubtedly produces a sense of relief and security, and insufficient consideration is often given to the effect of such a policy on overseas importers. On the other hand, however, the feeling on the subject is by no means unanimous. Many fanners prefer to do their own marketing, and resent a compulsory taking over of their crop by a government board or any other organization. very few, I believe (if any), object to the operation of the present non-compulsory board created under the act of 1935.
I call attention especially to this.
Whatever attractions a compulsory government board may present at first sight, its practicability, in my opinion, will not stand analysis, either from the point of view of overseas markets or that of domestic conditions.
Then he quotes an authority who, I think, ought to appeal to my hon. friends opposite, particularly the hon. member for Qu'Appelle.
The situation at home would also be disadvantageous to the producer, in my opinion. This opinion is held by many whose experience qualifies them to express well-considered views. Mr. John I. McFarland, who gave so much of his time and his ability to handling stabilization and who was the first chief commissioner of the Canadian Wheat Board, did not favour the closing of the Winnipeg exchange, nor did Mr. J. R. Murray, -who succeeded Mr. McFarland as chief commissioner.
Perhaps I have read enough to indicate that it was the very definite opinion of the commissioner, as stated in his report, that the Winnipeg exchange should remain open. He makes the suggestion embodied in the bill as to what supervision should be adopted in connection with the Winnipeg grain exchange, but I do not think it is necessary to read that.

What is given on the second page of the bill in the explanatory note is practically what the commissioner himself suggests.
My hon. friend objects to the wording "supervisor." I do not know exactly what official he would appoint. He mentioned some other name, but whether he would suggest that the supervisor should have any other duty than those given the official named in the bill, I was not able to gather.
I do not know that I can add anything further except to say that the bill is brought in as a direct recommendation of the commissioner who was appointed by parliament in 1936. The hon. member for Qu'Appelle made some criticism of the nature of the investigation undertaken by the commissioner. I would remind him that the report which recommended to parliament the appointment of a royal commission was the unanimous report of that committee of which he was himself a member.


Ernest Edward Perley: I cannot exactly agree with that. There was really a minority report, because the second paragraph of the report indicates that the committee was not really unanimous and the suggestion was made accordingly that the matter should be referred to a commission.


Walter Edward Foster: Order. The hon. member has already spoken.
Motion agreed to and the house went into committee, Mr. Sanderson in the chair.
Section 1 agreed to.
On section 2-Definitions.


Henry Herbert Stevens: Have these definitions
been checked by reference to the authorities who constantly use the terms defined? For example, there is "cash grain." Is that the accepted term? If not, in what respect do these definitions vary from the terms in use?


William Daum Euler: The terms used in the bill were carefully reviewed by people in Winnipeg who are conversant with the grain business and also by Mr. Varcoe of the justice department.


[Stage Direction]
Section agreed to.
On section 3-Board of grain commissioners.
Ernest Edward Perley: Has the minister considered giving the board of grain commissioners full control of the clearing house operations?


William Daum Euler: The hon. member will find it in the bill.


Ernest Edward Perley: I am referring to the supervising of the trade and so on.

Grain Futures


William Daum Euler: I do not know what my hon. friend means by giving them complete control. It is not the purpose of the bill to interfere with the day-to-day transactions. It is merely to supervise operations, and should anything take place that is regarded as prejudicial to the interests of the grain trade, they have the power to intervene. That is as far as we are supposed to go.


Ernest Edward Perley: How far will the board have power to go with respect to rules and regulations?


William Daum Euler: I can answer that question when we come to the section covering it.


William Hayhurst: Who are the members of the board?


William Daum Euler: There are three members: Mr. Ramsay, the chairman; Mr. Hamilton, and Doctor MacGibbon.


[Stage Direction]
Section agreed to.
On section 4-Supervisor.
Robert James Manion: Subsection 1 provides that the governor in council may appoint a qualified person to be the supervisor, and that the supervisor shall be an officer of the board, shall hold office during pleasure and shall receive such salary as may be fixed by the governor in council. It does not even say "on the recommendation of the board of grain commissioners." Should not this supervisor be recommended by the board? It seems to me that would be better than to leave it to the governor in council. On whose recommendation will the governor in council act?


William Daum Euler: Of course the governor in
council must take the responsibility for the appointment in any event.


Robert James Manion: I appreciate that, but if
they put the responsibility on the board of grain commissioners they would be on pretty solid ground. Supposing they chose to appoint someone whom the board- of grain commissioners did not approve. It seems to me the board which is possessed of such great powers, even to the extent of supervising trading on the Winnipeg grain exchange, should have the duty of recommending this man. I am not going to argue the point, but that seems to me the logical procedure. By whom is this person to be recommended? I think the minister would be protecting himself and the government by making it compulsory for the board of grain commissioners to recommend the supervisor.


[Stage Direction]
Section agreed to.
7X492-170J
On section 5-Regulations.
Abraham Albert Heaps: I must confess that I do
not know very much about the grain business or the growing of grain, so it is merely in order to obtain some information that I ask this question. Is it the intention under this bill to supervise transactions on the Winnipeg grain exchange only? Are there not other exchanges in other parts of Canada where business in grain is transacted?


William Daum Euler: Not in the same way; and
there is provision that if in future there should be such exchanges, they will be subject to this bill just as the Winnipeg grain exchange is.	'


Henry Herbert Stevens: Under this section we
have the powers of the board outlined. Has any question been raised by interested parties as to the extent of these powers? They are extremely broad, and they are not defined in the bill, which says:
The board may, subject to the approval of the governor in council, make regulations not inconsistent with this act-
Then it enumerates the classifications of those regulations, but the bill itself does not outline the principles that should restrain the board. It seems to me that under this section they might pass almost any regulation they wished.


William Daum Euler: But their regulations are
subject to the approval of the governor in council.


Henry Herbert Stevens: Yes, but that is not legislative control. To put it bluntly, this might be used as a powerful political weapon. It is open to that. It might be used as a regimenting instrument. I am not saying that is the intention, but I am pointing out that in my opinion the bill itself should lay down the principles the board must follow. As it is at the present time, this has no meaning or force, because the board may make almost any regulations it wishes, subject to the approval of the governor in council.


William Daum Euler: With all due deference to my hon. friend I would think that the principles were pretty well laid down here. I think my hon. friend will also admit, from his experience in the framing of statutes, that in most statutes provision is made to permit the minister to frame regulations under which the work shall be carried on. That is precisely what is being done here. As to just what the regulations may be, I cannot say; nor would I say that it would be proper-perhaps it would not be improper-to put the regulations themselves into the statute. I do not think my hon. friend would suggest that.
Grain Futures


Henry Herbert Stevens: No. Let me illustrate what I mean. This section reads:
(X) The board may, subject to the approval of the governor in council, make regulations not inconsistent with this act,-
(b) requiring the Winnipeg grain exchange and the Winnipeg Grain and Produce Exchange Clearing Association Limited and the members of each of the said associations to keep such records relating to trading in grain futures on the Winnipeg grain exchange as are specified by such regulations-*
Just follow that language; the board may make regulations not inconsistent with the act, such as are specified iby such regulations. That is the language. The bill does not lay down the basis of the regulations in respect of this matter.


William Daum Euler: It says " to keep records."


Henry Herbert Stevens: But the regulation may call for any class of records at all. There should be some limitation to which the board should be subject, or there should be some broad principles laid down. I know what they are driving at here, but this bill does not give the faintest intimation of it. They may call upon these people to produce records of any kind.


Thomas Alexander Crerar: If I may interrupt, they are only empowered to call for records dealing with trading in grain futures.


Henry Herbert Stevens: Certainly; but as the Minister of Mines and Resources knows very well from his experience, that covers practically all the dealings of the members of the grain exchange.


Thomas Alexander Crerar: In grain futures.


Henry Herbert Stevens: Which touches virtually all the business of most of their members. This does not indicate the class of records or the limitation beyond which the board may not go. I am not going to labour the point, but I think it is .my duty to indicate that the bill does not lay down principles which will guide the board, but rather gives the board wide-open power to call for any records or any class of records they may desire.


William Daum Euler: I would submit to the committee and to my hon. friend that the principle is laid down when it is stated that the board may demand that records ibe kept. As to the extent or minuteness to which those records may be asked for, that is a matter of regulation. I think in all legislation of this kind, where you empower an organization or a government body to carry on certain duties, you must have some confidence that they are going to exercise a certain degree of common sense. If they did not, I should imagine any government would think they were not fit for

the job and would find someone else to do it.
I do think the principle is laid down when you say they shall keep records. I would submit that it would not be proper to include in the bill in great detail exactly what sort of records should be kept.


John Gordon Ross: This bill is really the result of a recommendation by a committee of this house that a royal grain commission be appointed. A few moments ago the hon. member for Qu'Appelle said that 'the report of the committee was not unanimous I was a member of the subcommittee that drew up that report; the then right hon. leader of the opposition, Mr. Bennett, was another member, and we were in complete agreement as to the report that was made to the main committee. That main committee recommended the setting up of a royal commission to go into many different features of the grain trade, and I think the grain trade was thoroughly covered by the commission that was appointed.
This bill simply places upon the Winnipeg grain exchange a supervisor to watch the transactions of the traders and to see, if possible, that no action is taken by the traders on that exchange that is disadvantageous to the producers or handlers of grain throughout this country. In dealing with grain matters in this house over a great many years we have found it pretty hard to frame any measure tight enough to hold the traders in grain, so I do not think the hon. member for Kootenay East need worry about putting through a bill giving too many powers to a supervisor or to the board under which he works.
We have had at times to use acts other than the grain act to try to control the handling of grain in Canada. This supervisor is properly put under the board of grain commissioners who handle the regulation of the whole grain trade of Canada, and he should have the right to look into all the records of the traders in grain on the Winnipeg grain exchange. They should be made, as under this measure, to keep proper records of all their trading, so that through the board of grain commissioners and the supervisor, the government, when necessaiy, can control the trading on that grain exchange. I do not think it is necessary to send the bill to the committee on agriculture. There is only one purpose behind the bill, namely, that of placing a supervisor over the Winnipeg grain exchange to watch over the transactions gone into by grain traders, and to see that no trading of any kind takes place which will take advantage of the producer in the handling of grain as it goes on the market.

Grain Futures


Ernest Edward Perley: In reply to the hon. member may I say I think we can settle once and for all the matter with respect to unanimity in connection with the report. I believe the Minister of Trade and Commerce was chairman of that committee. The hon. member will recall the report of the subcommittee as it was first brought in. Although I have not the report before me, still I can recollect the main paragraph. It was stated first of all that while there was a short interest on December 13, I believe it was, on the Winnipeg grain exchange, no evidence was produced which would warrant the conclusion that the shorts had been protected by the board. That was the way it read. The subcommittee was asked to consider that matter. It will be recalled that the Right Hon. R. B. Bennett, who was a member of the committee, and one or two others including myself, objected to stopping there. The report was more or less a compromise. As it now stands, it is a negative-positive report. We agreed to it, but it must be remembered that it contained the words that as the committee found it impracticable to get conclusive evidence on the point as to whether or not shorts were protected, they suggested that it be referred to a commission.


William Daum Euler: That was unanimous.


Ernest Edward Perley: Yes, but I point out to this committee that it was a compromise.


Malcolm McLean: All unanimous reports must be a compromise.


Ernest Edward Perley: But I must say it was a compromise report, even at that.


Frederick George Sanderson: Shall section 5 carry?


Ernest Edward Perley: No. I have in mind regulations which I believe might come under paragraph (el of section 5. I would suggest there should be some provisions whereby the supervisor could make public or would publish at the close of any session during the calendar year the exact standing in the clearing house of shorts and longs, possibly of some of the traders over a certain limit.


William Daum Euler: I think he has the power to do that under the bill.


Ernest Edward Perley: He should have power to make known the exact position at the close of each session.


William Daum Euler: I do not suppose he would be precluded. He can do it by regulation.


Ernest Edward Perley: I think that is an important point, and it should be embodied in the bill under paragraph (e) or (f). Paragraph (f) does not go as far as I should like
the supervisor to go. I think he should have power to publish at the close of each session during the calendar year, if he so desires, the exact standings as to shorts and longs and hedges in the clearing house.


William Daum Euler: The supervisor would not have that power in any event; he only makes investigations. It is the board that would have to take action. However, I do not see anything in the bill which would preclude the board from publishing the information to which the hon. member refers, if they thought it well to do so. I do not think it should be included definitely as a command or instruction which they must carry out.


Henry Herbert Stevens: I would point out to the minister that probably he is wrong there. That is why I was saying a moment ago that it would be better to indicate in the measure the general lines the regulation should take. Then that creates a power. Making a regulation is simply giving effect to legislative powers. There is no legislative power given here to publish a daily record of longs and shorts, such as the hon. member for Qu'Appelle has mentioned. And I question if the mere right to make regulations confers that power. We should have had the Minister of Justice or some other of the legal advisers in the government to give an opinion on the point.


William Daum Euler: May I interrupt the hon. member. Would he look at paragraph (f).


Henry Herbert Stevens: I have seen it.


William Daum Euler: It states:
(f) providing for the publication by the board of information and statistics relating to the marketing of grain.


Henry Herbert Stevens: But "information and
statistics relating to the marketing of grain" would not authorize or empower this board to force a private operator to disclose his private business. I venture to say no court would uphold the board in endeavouring, as the bill now stands, to force such trader to do so. Statistics and information regarding marketing embody only the normal information given the public from day to day. I refer to the price of grain, the unloadings, the amounts in elevators and all that sort of thing. It refers to the regular written statistics.


William Daum Euler: He must give particulars of his transactions in grain futures, and that is open to inspection of the supervisor.


Henry Herbert Stevens: I shall not labour the
point. But I emphasize again it would be better if the bill indicated clearly the general
Grain Futures

lines of information and the general powers the board should exercise, and upon which it would base its regulations.


John Gordon Ross: On that point may I say that I believe under this measure the board have power to do all that it is necessary to do. When the hon. member says that they should have power to show the open interest, the longs and shorts on the market, may I say that ordinarily that is published by the trade. One can get that information with respect to the Chicago market. I have got it for years; it is published every day in the newspapers. But when you come to showing the amount of open interest, either long or short, that any individual has, then surely if you are going to operate a government grain board under the act you do not want published the figures showing the amount of grain that board has, or the amount of grain they are dealing in on any day. That is one of the things you must, if possible, keep from the trade. I do not think we should put things into the measure, without very serious consideration as to what effect they would have. I think the bill is properly drawn, and that wide enough powers are given to the board and the supervisor to get the information necessary for him to have to supervise the exchange.


Ernest Edward Perley: I do not think that under
paragraph (f) the supervisor has the power we think he should have. We are led to believe that last fall there was a selling pressure on the market. Very much more was being sold every day than there was cash wheat or wheat that was being delivered to the interior elevators throughout the west.


William Daum Euler: Selling pressure by whom?


Ernest Edward Perley: By the "big three," international grain firms.


John Gordon Ross: When did they buy it back?


Ernest Edward Perley: Maybe they have not bought it back yet, and are depending on getting wheat from the board. Probably they got a great deal of wheat in December to fill their contracts. If the supervisor at the close of each session had power to make public the short and long interest; if, as I said when speaking earlier this evening, the buying and selling hedges had been balanced, and if it was apparent that there was a very great majority of sales, over and above purchases,
I think-


John Gordon Ross: How can there
be a sale without a buyer?


Ernest Edward Perley: A man may sell without having cash wheat to deliver on the option.


John Gordon Ross: Somebody has to take up the contract to buy.


Ernest Edward Perley: Somebody else has to take the contract for the wheat. There is short selling by operators. True enough, someone has to buy the option, but they sold wheat when they never had any cash wheat to deliver, expecting to get it from the board.


Thomas Alexander Crerar: Who bought it?


Ernest Edward Perley: Possibly the minister bought some on speculation, possibly myself or others.


Mr. ROBICHAUD:: I believe section 5 confers the powers asked for by the hon. member foi Qu'Appelle (Mr. Perley). Paragraphs (b), (c) and (f) must be taken together. Paragraph (b) requires the Winnipeg grain exchange to keep records of trading in grain futures. Paragraph (c) requires the grain exchange to furnish to the board or to the supervisor the information specified in the regulations relating to grain futures. Paragraph (f) provides for the publication of such information by the board. In my opinion these three paragraphs grant the powers requested by the hon. member.


Ernest Edward Perley: Is there anything under
section 5 which would give the supervisor power to regulate the amount of hedging which could be carried on as against cash wheat? Is there anything which provides that a member of the exchange cannot sell, say more than two or three times the amount of cash wheat?


William Daum Euler: I think my hon. friend will find that in section 8.


[Stage Direction]
Section agreed to.
Sections 6 and 7 agreed to.
On section 8-Powers of board.
William Daum Euler: Paragraph (b) reads:
Fix the maximum amount of any kind of grain which any person may in a single session of the Winnipeg grain exchange or any other period of time commit himself by means of grain futures to accept or deliver.


Ernest Edward Perley: Has the minister any idea what maximum amount will be fixed, or will he make any recommendation to the supervisor?


William Daum Euler: My answer must be, no.


[Stage Direction]
Section agreed to.
Sections 9 to 17 inclusive agreed to.
[Stage Direction]
Supply-National Health
On section 18-Coming into force.
Ernest Edward Perley: Has any request been received by the minister from members of the grain exchange, from the grain dealers' association, from the pool organizations, from the provincial governments or from any other body in western Canada that this bill should be considered by a committee?


William Daum Euler: I have no recollection of that. If there had been, I certainly would have given it consideration. So far as the members of the grain exchange are concerned, we discussed this with them and they were pretty well satisfied with the bill as it now stands.


Henry Herbert Stevens: Can the minister give any intimation when it is intended to proclaim the measure?


William Daum Euler: I am afraid I cannot give any definite date.


Henry Herbert Stevens: What is the purpose of waiting for proclamation? Why not let it go into force upon royal assent being given?


William Daum Euler: Possibly	because of the
operations of the wheat board. They are members of the exchange.


[Stage Direction]
Section agreed to.
Bill reported.
Mr. EULER moved the third reading of the bill.
Ernest Edward Perley: I think it was an important question that the hon. member for Kootenay East (Mr. Stevens) put to the minister. He asked that some definite date should be set when this bill would come into force. I do not think it would be out of place to suggest that it come into force in the very near future.
Motion agreed to and bill read the third time and passed.

The house in committee of supply, Mr. Sanderson in the chair.
DEPARTMENT OF PENSIONS AND NATIONAL HEALTH Health branch.
245. Food and drugs, $166,880.


Charles Grant MacNeil: Have any steps been taken to establish a standard of purity for flour by regulation of the department?


Hon. C. G. POWER (Minister of Pensions and National Health):: In January of this
year an order in council was passed reading as follows:
His Excellency the Governor General in council, on the recommendation of the Minister of Pensions and National Health, is pleased to
amend the regulations under the Food and Drugs Act made by order in council of the 16th August, 1934	(P.C. 123/1852), as amended,
and they are hereby further amended by inserting immediately after subsection 2 of section VIII-grain products-the following subsection, to be numbered 2A:-
2A. Flour shall be the fine, clean sound product made by the milling of wheat and shall contain not more than thirteen and five-tenths parts (13-5) per cent of moisture, not less than one and twenty-five hundredths parts (1-25) per cent of organic nitrogen, not more than one part (1) per cent of ash, and not more than five-tenths of one part (0-5) per cent of fibre, with or without the addition of non-injurious ingredients for modifying the colour or baking qualities; provided that, in the case of the addition of non-injurious ingredients, there shall be stated clearly and conspicuously upon the labels of all packages containing flour so modified, "This flour contains improvers."
The order in council to which objection was taken last year has been modified to cover labeling where non-injurious ingredients other than those specified in the definition are added to flour.


Charles Grant MacNeil: Has the department taken any action to classify improvers? For instance, is it now possible to use potassium bromate?


Charles Gavan Power: It is labeled now.


Charles Grant MacNeil: May I ask the policy of
the department with respect to bleaching or colouring agents?


Charles Gavan Power: There is a definition stating what shall go into flour, and if anything else is used they must say "improvers added."


Abraham Albert Heaps: Is Canadian flour sent abroad containing these ingredients to which reference has just been made?


Charles Gavan Power: Not without labeling.


Abraham Albert Heaps: Do we send adulterated flour abroad?


Charles Gavan Power: No. We do not send
adulterated flour anywhere. My hon. friend and some others have been very anxious to spread abroad and in Canada the idea that we have been adulterating flour. We have not been adulterating flour at any time, and the hon. gentlemen who have got into the habit of saying that, are not doing any good either to Canada or to themselves. They are far from the truth in the first place.


Charles Grant MacNeil: But it is possible, according to the return, on the evidence given by the officers of the minister's own department, to achieve the same results by the proper blending of grains, such as the introduction of No. 1 northern. By permitting the use of synthetic improvers in Canadian flours for export abroad, we are damaging our export
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trade and encouraging among the millers in Great Britain and France a practice that hitherto has been frowned upon by health authorities in Great Britain and other European countries. Why not establish definite standards of purity for Canadian flour to encourage millers abroad to use larger quantities of No. 1?


Charles Gavan Power: Why does not my hon. friend read carefully or state accurately the documents which we brought down for him? He knows very well that we produced everything we had in the department, something I believe no other minister ever did, confidential documents, reports from our own officers and everything else, in order that he might have all the facts and not go about, making the statements he did make all summer. In England they do permit the use of improvers, and my hon. friend knows it if he read the file at all. I took the trouble to inquire from the Department of Trade and Commerce whether the use of improvers would have any injurious effect on No. 1 flour, and the officers of the Department of Trade and Commerce and of the wheat board said no. So why should my hon. friend state in this chamber something that is absolutely contrary to the facts as set out in the file?


Charles Grant MacNeil: I still submit that the file shows clearljr that in Great Britain the health authorities are bringing pressure to bear on the trade to adopt wherever possible physical rather than chemical processes to improve the quality of flour. It was pointed out that the results sought could be achieved by the proper blending of grains in Canada and by allowing the flour to mature in storage.


Charles Gavan Power: In Great Britain they have the right to add improvers to flour. That is all stated in the file. So why should my hon. friend come here and tell us differently?


Charles Grant MacNeil: I am not disputing that statement, but I do say that the health authorities in Great Britain brought pressure to bear on the trade, and that is shown on the file.


Charles Gavan Power: That is not what the hon. member said in the first place.


Charles Grant MacNeil: It is exactly. I did not say that it was prohibited in Great Britain, but in certain European countries it is prohibited. The health authorities in Great Britain have indicated that the government there was giving leadership to the trade, and encouraging in every way possible the development of a fine quality of flour by physical rather than by chemical processes.


Charles Gavan Power: And permitting the use of improvers in the flour.


Charles Grant MacNeil: I am not saying they are prohibited, but I say that it would be well in Canada as a matter of policy to encourage the blending of grains and the maturing of flour in storage, to get the finest quality of flour by the use of physical rather than chemical processes.


[Stage Direction]
Item agreed to.
Health branch.
2-iB. Opium and narcotic drugs, $50,780.
James Alexander Marshall: There is no increase in this particular vote, but if we take into consideration item 473 in the supplementaries, which deals with the same subject, there is an increase of $15,000. Would the minister kindly give an explanation?


Charles Gavan Power: That has to do with legal fees in cases where there have been prosecutions.


Abraham Albert Heaps: Does this item deal with the administration of the Opium and Narcotic Drugs Act?


Mr. POWDER:: Yes.


Abraham Albert Heaps: Have the prosecutions which have been taking place had the effect of diminishing the illegal sale of these drugs in Canada, and, if so, to what extent?


Charles Gavan Power: I can give some statistics with regard to cocaine, morphine and heroin. Imports covering the years from 1919 to 1937 inclusive have been-I will not read them all-for the fiscal year 1919, 12,333 ounces of cocaine, 30,087 ounces of morphine, and 34,262 pounds of crude opium.. Importations in 1937 of cocaine were 2,364 ounces; morphine, 5,295 ounces; and crude opium, 720 pounds, representing a very considerable drop since 1919. I notice that 1919 seems to be an exceptional year presumably because our sources of supply were cut of to some extent during the war, and supplies were made up, I assume. But take 1930. Importations of cocaine in that year amounted to 2,011 ounces, compared with 2,364 ounces in 1937; importations of morphine were 6,861 ounces as against 5,200 ounces odd in 1937, and importations of crude opium in 1930 were 1,012 pounds as against 720 pounds in 1937.


Abraham Albert Heaps: But those are legal importations, are they not?


Charles Gavan Power: Yes.


Abraham Albert Heaps: What I am concerned with is the illicit traffic.

Supply-National Health


Charles Gavan Power: I can give.the convictions.


Abraham Albert Heaps: For the last two years.


Charles Gavan Power: In 1935 the convictions were 163; in 1936, 168; and in 1937, 161.


Abraham Albert Heaps: Was there any large seizure of these drugs by the department?


Charles Gavan Power: Yes; we are making seizures all the time, but occasionally we run up against a fairly extensive conspiracy, and when that is cleaned up it settles the thing for the time being in that particular locality. Of course, there is a great deal of profit in the illegal selling of drugs, and there is always somebody trying to earn this profit, but we have been fairly successful in our efforts to stop the use of morphine, cocaine and heroin. Their use illegally has decreased considerably over a period of years.


Charles Grant MacNeil: What progress has been made in achieving uniformity of regulations in all the provinces with regard to the sale of habit-forming drugs?


Charles Gavan Power: I imagine that my hon.
friend is speaking of codeine.


Charles Grant MacNeil: Codeine and the phenobarbitol preparations.


Charles Gavan Power: They are under provincial
regulation. In so far as codeine is concerned, it is available to the public by prescription only in Ontario, Manitoba, Saskatchewan, Alberta and British Columbia, and we have some hope that very shortly in Quebec it will be available only by prescription. The same legislation covers the barbitols.


Charles Grant MacNeil: In what province is a
prescription required for phenobarbitol preparations?


Charles Gavan Power: The same five provinces.


[Stage Direction]
Item agreed to.
Health branch.
2J/9. Laboratory of hygiene, $101,545.
Abraham Albert Heaps: There is a big increase under this item. Perhaps the minister would be good enough to explain the cause.


Charles Gavan Power: To a considerable extent
the increase is on account of the fact that we have enlarged the scope of our work in the laboratory of hygiene. Among other things a new laboratory has been opened at Kamloops for epidemiological service in Rocky mountain spotted fever and in sylvatic plague. This is to provide additional equipment out there which will cost something like $16,000. The Rockefeller Institute has subscribed $4,000 to the provinces of Alberta and British Col-71492-171
umbia, and that money is being applied to this work. Field work is required in connection with plague-carrying fleas on field rodents. It is a pretty big job and has to be done very carefully. We have to have extra men out there, and we must also send out from the animal house here a large number of guinea-pigs to be used for test purposes. As a matter of fact, $6,000 extra is required in material and supplies for feed for guinea-pigs and for the transportation of these animals to Kamloops.


[Stage Direction]
Item agreed to.
Health branch.
250. Immigration medical inspection, $97,028.
William Hayhurst: Are all immigrants
medically inspected?


Charles Gavan Power: Yes. They are inspected
before they leave the country of origin.


Abraham Albert Heaps: In view of the fact that
there is quite a decrease in this amount, where are the inspectors now stationed?


Charles Gavan Power: At the present time, over
in Europe, we have two in London; one in Paris, Doctor Duplessis; one in Antwerp, Doctor Audet, and one at Hamburg, Doctor Savoie.


Abraham Albert Heaps: Is that the total service?


Charles Gavan Power: I think so. There are five. In the United. Kingdom we use the panel doctors for examinations, on a fee basis.


Abraham Albert Heaps: What is the total number of medical inspectors provided for in this vote?


Charles Gavan Power: At the present time the overseas men are five and in this country we have one full time and one part time at Halifax, one at Saint John, two at Quebec, one full time and one part time at Montreal, and one part time at Vancouver.


[Stage Direction]
Item agreed to.
Health branch.
255. Treatment of sick mariners, $167,790.
James Alexander Marshall: What is the reason for the decrease in this vote?


Charles Gavan Power: I am afraid we shall have
to increase it. It is made up for in supple-mentaries. We thought we could do with less money, but we find that we cannot.


James Alexander Marshall: I was wondering about it because there is shown in the supplemen-taries, under item 474, an increase of $20,000, and I did not understand why there should be a decrease in one case and an increase in the other.

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Charles Gavan Power: We had to increase it.


[Stage Direction]
Item agreed to.
Health branch.
257.	Medical investigations, $36,655.
William Hayhurst: What are these medical investigations which the department is carrying out?


Charles Gavan Power: This provides for the general expenses and salaries of doctors and staffs engaged in the medical investigation of civil servants relative to approval of sick leave, and final medical board when they are recommended for retirement on account of ill health. Recently the civil service commission has been sending us all their men who have been appointed.


James Alexander Marshall: Is this a new branch which is being set up?


Charles Gavan Power: Yes.


[Stage Direction]
Item agreed to.
Health branch.
258.	Venereal diseases, $50,000.
Thomas Clement (Tommy) Douglas: What is being done in this branch? Is it mainly research work?


Charles Gavan Power: No. This provides for the distribution of arsenicals to the provinces. It was instituted last year. In order to assist the provinces in their work we distributed arsenicals to the provinces to the extent of $50,000.
Mr. DOUGLAS. (Weyburn): Any preventive work is being done largely by the provincial departments of health?


Charles Gavan Power: Our epidemiological branch is doing a great deal of work along those lines, in the way of publicity, of study, and of assisting the provinces, but the actual clinical work is done by the provinces, we supplying the medicines.


[Stage Direction]
Item agreed to.
Miscellaneous grants.
262. Health League of Canada, $5,000.
James Alexander Marshall: Is any stipulation
attached to these grants which are given? What are the grants given for?


Charles Gavan Power: We receive an audited report. Most of these organizations spend the money in the way (hey think best.


James Alexander Marshall: Is the money spent for offices, salaries of officers or for research work?


Charles Gavan Power: It goes into their general fund and is spent for publicity, for the work they do, for organizing meetings, and so on.


[Stage Direction]
Item agreed to.
'Mr. Marshall.]
Miscellaneous grants.
266.	Montreal Association for the Blind, $4,050.
Thomas Clement (Tommy) Douglas: Why is this allowance made to this association?


Charles Gavan Power: They are not associated with the Canadian Institute for the Blind. This is a French organization.


[Stage Direction]
Item agreed to.
Miscellaneous grants.
267.	Canadian Tuberculosis Association, $20,250.
Mr. MaeNICOL: How much of these grants goes into salaries at head offices, and what proportion of the money is used for doing work in the field ?
Charles Gavan Power: I do not think all of them receive assistance from the provinces, but I cannot say offhand. The Canadian Tuberculosis Association does a great deal of good work all over Canada, and this $20,000 would hardly come near meeting the expenses of the association. I assume it goes into the general fund.
Mr. MaeNICOL: A good many of them have tag days.


Charles Gavan Power: Yes; that is purely local.
Mr. MaeNICOL: Does the department look carefully over every return sent in with regard to these organizations? I am not opposing any of them; in fact, I am in favour of all of them; but often it is found that too much of the money goes into salaries at head offices.


Charles Gavan Power: We have a member of our staff on many of these boards. These associations do excellent work, and we see to it that our money is not wasted, but we do not tell them just what they should do.
Mr. MaeNICOL: I am not finding fault.


Charles Gavan Power: I understand.


Mr. McCANN:: What progress is being made by the publicity and health education branch in work formerly done by private organizations? I understood, when the publicity and health branch was first instituted, that the policy of the department was gradually to build up a branch along that line to take over the work formerly done by private organizations which were receiving subsidies from the government. I should like to know what progress is being made in that direction?


Charles Gavan Power: We are doing a great deal more work in publicity and advertising than

Questions
was formerly done by the department, and we believe we are completely covering the work which we took over from any voluntary organization.


[Stage Direction]
Item agreed to.
DEPARTMENT OP TRANSPORT Marine service.
J/2J/. Maintenance and repairs to wharves, $7,500.	'
Charles Grant MacNeil: Does this deal with the maintenance of small wharves apart from * those under the harbours board?


Clarence Decatur Howe: This deals with the maintenance of small wharves operated under the Harbours and Piers Act. It covers all wharves except harbours board wharves and one or two other wharves that are operated under a separate act.


Charles Grant MacNeil: I should like to know the results of the minister's investigations. I have brought to his attention several matters with regard to wharfingers at small wharves along the coast of British Columbia. The imposition of top wharfage tolls has meant a great inconvenience to members of the community who must depend upon these wharves as providing the only communication with the outside world. Returns have been tabled this session indicating that wharfingers have been appointed at some wharves and not at others a short distance away. There is discrimination. Apparently there has been complete absence of control by the department over many of these wharves. As a result of personal investigation I find that in many instances fishermen who are supposed to be exempt from wharfage tolls are charged fifty cents for a tie-up when in distress. That is contrary to the provisions of the act and is a grave abuse which should be checked by the department. I have brought a number of these matters to the attention of the department in the hope of having them investigated. What exactly is the procedure in respect to auditing receipts of top wharfage tolls at these wharves?


Mr.   IIOWE@: These wharves are operated under the Harbours and Piers Act. The wharves are built under the Department of Public Works, and after they are built they are turned over to the transport department, which had nothing to say about the necessity for building them. We are the people who operate the wharves under the act, which makes it mandatory for us to appoint wharfingers and collect tolls. The public works department are the good fellows and we are
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the enemies in those particular parts of the country. It is eleven o'clock and perhaps we can continue this item the next time.
Item stands.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Wednesday, April 12, 1939