1939-02-14

PRINTING OF PARLIAMENT

Right Hon. W. L. MACKENZIE KING (Prime Minister) moved:: That a message be sent to the Senate to acquaint their honours that this house will unite with them in the formation of a joint committee of both houses on the subject of 
the printing of parliament, and that the members of the standing committee on printing, viz., Messieurs Barry, Bertrand (Laurier), Casselman, Chevrier, Damude, Davidson, Denis, Douglas (Weyburn), Dussault, Elliott (Kin-dersley), Esling, Evans, Ferron, Fleming, Fournier (Maisonneuve-Rosemount), Gauthier, Green, Hansell, Hurtubise, Hushion, Jean, Kirk, Lapointe (Matapedia-Matane), Leduc, Lennard, Little, Maclnnis, MacKinnon (Edmonton West), MacLean (Prince), McGregor, McIntosh, McKenzie (Lambton-Kent), McNevin (Victoria, Ont.), Marsh, Marshall, Mills, Moore, Mullins, Mulock, Mutch, Pinard, Purdy, Reid, Ross (St. Paul's), Ross (Middlesex East), Rutherford, St-Pere, Taylor (Nanaimo), Thompson, Tucker, Tustin, Veniot, Weir and Winkler will act as members on the part of this house, on the said joint committee on the printing of parliament.


[Stage Direction]
Motion agreed to.

William Lyon Mackenzie King: That a message be sent to the Senate to acquaint their honours that this house has appointed the Hon. the Speaker and Messieurs Ahearn, Blackmore, Blair, Blanchette, Bonnier, Bothwell, Bouchard, Bradette, Brasset, Cameron (Hastings South), Casselman, Clark (York-Sunbury), Duffus, Emmerson, Fournier (Maisonneuve-Rosemount), Grant, Green, Hamilton, Hyndman, Johnston (Lake Centre), Kuhl, Lennard, Maclnnis, MacKinnon (Edmonton West), MacLean (Cape Breton North-Victoria), MacLennan, MacNeil, Macphail (Miss), Mc-Callum, Mallette, Martin, Moore, Mutch, Parent (Quebec West and South), Parent (Terrebonne), Raymond, Reid, Rennie, Ross (St. Paul's), St-Pere, Spence, Walsh, Winkler and Young, a committee to assist His Honour the Speaker in the direction of the library of parliament, so far as the interests of the House of Commons are concerned, and to act on behalf of the House of Commons as members of a joint committee of both houses on the library.


[Stage Direction]
Motion agreed to.


Mr. T. L. CHURCH (Broadview):: 

TRADE AGREEMENTS


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Right Hon. W. L. MACKENZIE KING (Prime Minister) moved that the house go into committee to consider the following proposed resolution:
That it is expedient that parliament do approve of the trade agreement entered into at Washington on the 17th day of November, 1938, between Canada and the United States of America, and that this house do approve of the same, subject to the legislation required in order to give effect to the provisions thereof.
He said: Mr. Speaker, the trade agreement between Canada and the United States which was signed at Washington on November 17, 1938, was placed on the table at the opening of the session so that hon. members have had copies of it before them since that time. Incidentally I might remark that a month has elapsed since parliament opened.
Before proceeding to discuss the resolution I might say a word about the procedure the government is following in this matter. As hon. members will see, the resolution asks for approval of the agreement, but it implies that the agreement itself will be subject to further consideration by the house and that legislation will be introduced later to give effect to its provisions.
The purpose of the resolution is primarily to permit of debate dealing with questions of general policy raised by the agreement between Canada and the United States. If and when the resolution is adopted, the Minister of Finance (Mr. Dunning) will then ask that the house resolve itself into committee of ways and means to consider the agreement in detail and report on it. This will include, of course, the schedules which are attached to the agreement and which contain what is proposed in the way of changes of the tariff, the committee of ways and means being the committee of the whole house which has to do with all matters pertaining to the imposition and remission of taxation. This motion, I might say, is required under standing order 60 of the House of Commons. When the committee of ways and means has reported to His Honour the Speaker, a bill based on the resolution reported from the committee will then be introduced giving legal effect to the agreement. The bill will necessarily go through all stages in this house and in the other house, including again a consideration of its schedules in the committee of the whole. I mention all this
lest there might be in the minds of any hon. members an impression that the government have taken upon themselves to do by executive authority what properly belongs to parliament itself. Nothing has been done by the administration with respect to the agreement which binds parliament to it, apart from such action as can quite properly be taken under general legislation already enacted by parliament.
It is true that the duties which are being reduced under the agreement, so far as Canada is concerned, have been reduced by order of the governor in council, but that order has been passed under authority of legislation enacted by parliament in the session of 1931 when hon. gentlemen opposite were in office. At that time the government of the day led by the Right Hon. Mr. Bennett introduced an amendment to the customs tariff providing that where any country was able to obtain from another country reductions on Canadian products this country might make a compensating reduction. The words "reduction on Canadian products" were amended later, in 1935 I think it was, to read "concessions"; so that the customs tariff now contains a clause which permits the governor in council, wherever a concession is given by another country to this country, to grant by order of the governor in council a compensating concession.
So that there may be no doubt as to the accuracy of what I have just said, I shall read the section of the statute which deals with the matter. Section 11 of chapter 30 of the statutes of 1931 reads:
The governor in council may by order in council make such reductions of duties on goods imported into Canada from any other country or countries as may be deemed reasonable by way of compensation for reductions on Canadian products granted by any such country or countries.
In 1935 this section was amended by the following resolution in the budget:
Resolved, that the aforesaid customs tariff be further amended by deleting from section 11 thereof, the words "reductions on Canadian products" and by substituting in lieu thereof the word " concessions."
It is apparent, I hope, that any power which the present governor in council has exercised with respect to the reduction of duties has been taken under that general legislation.
One other matter that might occasion concern in the minds of some is the fact that certain modification in preferences has been made in the agreement between Canada and the United Kingdom. It may be thought that this action should not have been taken
Canada-UJS. Trade Agreement
[Stage Direction]
without the authority of parliament in the first instance. Here I would draw the attention of the house to the terms of that agreement.
The Canada-United Kingdom agreement has a provision which enables the parties, after conference, to modify the agreement in any particulars which may be of mutual advantage. I might say that the hon. member for St. Lawrence-St. George (Mr. Cahan) and the government of which he was a member were glad to avail themselves of that provision in the Canada-United Kingdom agreement of 1932 in order to obtain certain modifications in the preferences which had been granted to the United Kingdom in this country for the purpose of working out the agreement which at that time he was negotiating between Canada and France. Thus Canada was the first to ask the British government to permit it to take advantage of that clause in its agreement to modify an existing agreement. This fact placed the present government in a position where it would not have been at all easy to object when the British government itself asked this government to make such modifications in the existing agreement as would enable it to negotiate an agreement between the United States and Great Britain. I mention these points in advance so as to remove any doubts in the minds of hon. members that the government has proceeded in any particular beyond its immediate authority, or has taken from parliament any power with respect to the approval of this agreement in complete form before it actually becomes law.
Hon. members may ask, if this parliament should refuse to approve the agreement, what would happen to the numerous reductions that have already been made in the customs tariff. Well, what would happen would be that the reductions would cease to exist and that we should go back to the tariff schedule as it was on the first of January of this year, and the same would be true as respects concessions made to Canada by the United States. All that meanwhile will have happened is that for a period of a few weeks there will have been a reduction of duties both in the United States and in Canada on the articles specified in the schedules.
As I have said, after the committee have reported there will then be a further opportunity for hon. members to discuss any of the details of the agreement. I would point out, however, that it will probably expedite discussion and business generally if, when the schedules are before the committee of ways and means, they are examined very thoroughly, 
and the debatable points with respect to them discussed as far as possible at that time. Then, after the bill itself giving the effect of law to the agreement has been introduced, while there will be still another opportunity to discuss the schedules, hon. members will probably not feel the necessity so to do at that time. What I wish to make perfectly clear is that before members of the House of Commons are asked to give their final approval to the agreement, they will have had full opportunity to decide for themselves upon the merits of the tariff changes.
I mention this point because the government's procedure in this matter is different from the procedure of the government that was in office in 1932 when we had the Canada-United Kingdom agreement before us. It will be recalled that at that time the opposition of the day took strong exception to the course adopted by the then prime minister in asking the house in the first instance to accept the agreement in toto and then later to discuss the schedules attached thereto. In other words we were being asked to approve of an enactment which would put the agreement into force without knowing what the effect of the changes in the tariff were going to be. A different procedure was adopted in England in respect of the same agreement. All details of the tariff schedules were' discussed in committee of ways and means before the bill itself giving legislative effect to the changes was considered by the British house. We are following at this time, as we did when we had the agreement of 1935 before us, the practice followed at Westminster.
As to the agreement itself, in a word, considering it in relation to the agreement of 1935, it constitutes an implementing of the pledge with respect to tariffs and trade which was given by the Liberal party to the country at the time of the last general election. While by itself it is not a complete implementing of that pledge, combined with the 1935 agreement and other changes in the tariff and its administration made by the present government, it carries out faithfully the undertaking then given by this party to the electorate of Canada. May I recall to hon. members the statement of Liberal policy with respect to tariffs as it was set forth by myself when in opposition in this House of Commons on February 27, 1933. In a statement of Liberal policy with respect to a number of outstanding problems there was one which had special reference to the liberation of external trade. In that statement, which was kept to the fore throughout the general elections of 1935 the Liberal party set forth its belief that trade was the basis of industrial and commercial development, and

Canada-U.S. Trade Agreement
that what Canada needed was trade. Canada's need of trade was emphasized because of the fact that trade means increased production, increased consumption, increased distribution, increased transportation, increased employment, increase in the standard of living and consequently increased prosperity. The statement of Liberal policy went on to say:
The Liberal party will promote trade with all nations and negotiate trade agreements with any countries willing to trade with Canada on a reciprocal basis.
I shall not mention this aftemon other trade agreements that we have made while we have been in office, but the agreements with the United States of 1935 and of 1938 taken together are the outstanding trade agreements with a country that was prepared to trade with us on a reciprocal basis.
A further statement was that:
The Liberal party will abolish the extravagant increases in the tariff made by the present administration-
That referred of course to the Conservative administration which was in office at the time the statement appeared and was being quoted.
-which have had the effect of strangling trade, exploiting consumers and robbing the railways of business.
I have examined with some care the effects of the tariff changes that have been made by this administration since we came into office in October, 1935, the changes with respect to the British preference and with respect to the duties upon commodities coming into Canada from other countries. Briefly summarizing the whole position it may be said that the trade agreements completed since the accession of the present administration to office have effected a major reconstruction of the Canadian tariff. The rates of duty chargeable under the British preferential tariff on United Kingdom goods are on an average lower than they have ever been before, and the rates chargeable on United States goods have been reduced in two stages to a level that on most commodities is below that effective when the Liberals were last in power in 1930.
I think, Mr. Speaker, that is all I need say at the moment about the general effect of the tariff changes which we have brought about in one parliament. I doubt very much whether careful examination of the records of previous parliaments would disclose that in any two or even any three parliaments combined there was the extent of tariff reconstruction downwards and lessening of taxes on trade comparable to those which have been made by the present administration in the course of this one parliament.
May I next draw the attention of the house to the fact that reciprocal agreements with the United States have been sought by most administrations in Canada since confederation. There had been one agreement prior to confederation, which had shown the advantages of reciprocal trade with the United States, but that agreement ended in 1866, the year before confederation came into being. Since confederation there have been repeated efforts on the part of different administrations to effect reciprocal trade agreements with the United States. It is, I think, significant and worthy of note that the only successful attempts at negotiation were effected by previous Liberal administrations. The first of these resulted in the signing of a trade agreement between Canada and the United States during the administration of the late Alexander Mackenzie. That agreement was signed at Washington by the late Hon. George Brown for Canada and by Mr. Hamilton Fish for the United States, but the United States senate did not accept the agreement, and as a consequence those negotiations came to naught.
Then we had the all important agreement reached by the late Right Hon. Sir Wilfrid Laurier and his administration in 1911, a very far-reaching agreement of reciprocity in natural products between this country and the United States. I need not review in any detail what took place at that time in order to make clear why this agreement was defeated. On that occasion responsibility for the defeat did not rest with the United States. I recall the discussions quite well, for I was a member of Sir Wilfrid Laurier's administration at the time. The arrangement then reached was not a treaty to run for a number of years. It was felt that if a treaty were entered into for a number of years the opposition of the day would immediately say that we had bound ourselves irrevocably to the United States and that on this score the agreement might be defeated. The course adopted to avoid that sort of criticism was to provide that each country' should enact its own legislation as agreed upon with respect to tariff changes; and that when each government had carried out its side of the arrangement, the terms of the agreement would thereby and then become operative and remain in effect as long as both countries believed it to be to their mutual advantage.
The United States passed the necessary legislation to admit Canadian products entry to the American market. When announcement of the agreement was made by the late Right Hon. Mr. Fielding in this House of Commons its members were as enthusiastic concerning it as any house of commons possibly could be.
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But, as hon. members will recall, in that year Sir Wilfrid Laurier was obliged to attend an imperial conference in London, and during his absence there was formed in this country a group opposed to the agreement. The Conservative party of the day took it upon themselves to create an issue in the campaign which had nothing to do with the merits of the agreement from an economic point of view. They changed the nature of the discussion altogether and raised a political issue of loyalty to the British crown; they asked whether Canada was to continue to be a part of the British empire or whether Canada was to be annexed to the United States.
Mr. STEWART:: And a good many Liberals helped them.


William Lyon Mackenzie King: In the Liberal party of that day, there unfortunately were some whose views on this question, for reasons best known to themselves, came to differ from the views of the party generally, but there never was any question as to the position of the Liberal party of Canada itself with respect to the reciprocity agreement of 1911.
As I have said, when the agreement was introduced there was general enthusiasm on both sides of the house; but when it became apparent that it would be possible to make a political football out of what was a great economic reform the temptation of possible political success became too strong for hon. gentlemen opposite, and in the House of Commons after Sir Wilfrid Laurier's return the enactment of the necessary legislation was deliberately obstructed. The obstruction became so persistent that Sir Wilfrid Laurier dissolved parliament and went to the country on the agreement itself, the Liberal party staking its entire fate upon this great reform; more in the way of freedom of trade between Canada and the United States.
I remember very well hearing Sir Wilfrid Laurier say at that time that it would probably be at least a quarter of a century before another opportunity would come to Canada successfully to negotiate a reciprocal agreement with the United States. Sir Wilfrid pointed out what was all too true, namely that seldom in the history of the United States and Canada have governments been in office at the same time in both countries each of which was favourable to the lowering of tariffs. At that time there was in the United States a government that favoured the lowering of tariffs. In large part it was due to this fact that the Liberal administration of the day was able to make an agreement with the administration then in office in the United States.

Well it took about twenty-five years, almost to the year, to bring about that combination of circumstances again, with administrations in power in both countries sympathetic to a reduction of duties on products and other commodities passing across the international frontier. In the United States they have a government which has pioneered in its effort to bring about a reduction in trade restrictions, not only with its neighbours but with countries in all parts of the world. No man is more outstanding in world history to-day as a great reformer in the matter of the furtherance of trade between nations than Hon. Cordell Hull, Secretary of State of the United States. His example and his services to the world in this particular during this period of its trials, I think, are unparalleled by those of any other individual in his own or in any other country. Mr. Hull has believed and as consistently stated that the world was heading towards a condition of inevitable strife and war if the different countries continued to develop theories of economic nationalism and base their legislation upon those theories, becoming more and more nationalistic, more and more isolationist, and obliged in order to satisfy their peoples to resort, as a consequence of their restricted trade, to measures which were anything but in their real interest. For years past he has seen and pointed out to the different countries of the world that restrictions upon trade leading to increasing economic nationalism or economic imperialism were certain sooner or later to bring this world to destruction, and he has fought hard and valiantly to rectify the situation.
When the previous administration in this country-the late Conservative administration -were in office they had an opportunity to join with Mr. Hull and the United States government in effecting a measure of reform in the matter of greater freedom of trade between this country and the United States. The president had been given special powers by congress to reduce duties and by executive action to effect reciprocal agreements without the necessity of such agreements being submitted to congress for approval. There were certain limitations placed upon the powers given to the president. He was not authorized to reduce any duties by more than fifty per cent. He was not authorized to make an agreement for a period longer than three years, except with the understanding that it would continue thereafter subject to six months notice. But within these and certain other limits he had full authority to make reciprocal agreements with other countries. The late Conservative administration began negotiations

Canada-UjS. Trade Agreement
with the United States for a trade agreement, and I should like to draw attention to the objective which they saw at the time as a part of the wisdom of successful negotiation. According to the correspondence which took place with the United States, they felt that a trade agreement would be mutually advantageous to both countries; but they went further and stated very clearly that they believed a trade agreement between Canada and the United States would have great international significance as well and might even be of service to the world. And may I say that they had all the advantages which the present administration has had in the personnel of those in the public service, skilled in negotiation, to help them in working out the details of an agreement.
Here may I pause to join in what was said by several other hon. members in the course of the debate on the address. I doubt whether any country has been more fortunate than Canada has been in the loyal, able, efficient and highly skilled service which has been rendered by members of the public service who assisted the ministry in negotiating the trade agreements at Washington. I do not think it is possible to commend these services too highly. In that statement I would include not only their services to Canada but may I say, along with their own negotiators, to the United States, because the benefits secured under these agreements are mutual. I would go further and include services rendered not only to Canada and the United States, but the United Kingdom and other countries as well. I do not believe a greater service could have been rendered by any three men at this time to the countries I have mentioned than has been rendered by Mr. Wilgress, Mr. McKinnon and Mr Robertson, the three able members of our public service who have had most to do with studying all implications and working out all details in the negotiation of the Canada-United States agreements.
As I have said, hon. members opposite had the services as we have had of these able men. They had before them, as a result of negotiations which ran over the greater part of one or two years, all the information and all the particulars necessary to enable them exactly to decide what benefits they could obtain and what advantages to Canada might accrue, were they to enter into an agreement with the United States. But as hon, members who sat in the parliament of that day will remember, we could never get any information from the prime minister of the day as to the progress of the negotiations. We could get no information as to how the administration was getting along. We were told that they were busily
71492-57 J
engaged-but nothing more. Parliament prorogued in July without obtaining any information as to the extent to which negotiations between Canada and the United States were likely to be successful.
During the campaign of 1935, which took place in September and October, the correspondence that had taken place in the previous year was made public for the first time. The correspondence went a long way towards disclosing what might be possible by way of advantage to Canadian producers, and of advantage also to Canadian consumers, were a trade agreement effected between the two countries. However, in the campaign no definite commitments were made by the Conservative party of the day. All they did was to exhibit to the electors what was alleged to be the course of negotiation up to that time.
I have in my hand the correspondence which took place between the government of that day and the United States government, as set out in an exchange of notes between Mr. W. D. Herridge, the then minister from Canada to the United States and Mr. Cordell Hull, the Secretary of State for the United States. Perhaps this would be as good a moment as any to see from what point of view the negotiations were approached, because it serves to throw additional light on the value of what has been effected since that time.
The first communication which set out the position of the then government of Canada was dated at Washington, November 14, 1934. It is signed by Mr. W. D. Herridge and is addressed to the Hon. Cordell Hull, Secretary of State for the United States, at Washington, D.C. In that note the minister of the day said:
You will recall that when the Prime Minister of Canada visited Washington in April, 1933-
That was the Right Hon. R. B. Bennett-
-at the invitation of the president of the United States, the development of trade between the two countries was sympathetically discussed.
It is interesting to note that that was as long ago as April, 1933. It was September of 1935 before this correspondence was given to the Canadian public. But as early as April of 1933 the President of the United States himself had approached the Canadian government with a view to seeing if it might not be possible to work out an agreement of reciprocal advantage.
On April 29, 1933, Mr. Roosevelt and Mr. Bennett issued a joint statement at the end of their conversations, which concluded as follows: "We have also discussed the problems
Canada-U.S. Trade Agreement

peculiar to the United States and Canada. We have agreed to begin a search for means to increase the exchange of commodities between our two countries, and thereby promote not only economic betterment on the north American continent, but also the general improvement of world conditions.
Why was it that that very laudable aim was never in fact carried out or attained? The answer can be given in little more than a word. In that day there were in the government of hon. members opposite exactly what we see in the opposition before us at the present time-two wings of a party, the first of which was inclined slightly towards more in the way of freedom of trade. My. hon. friend the leader of the opposition (Mr. Manion), I should hope, would have been one of that number having been strongly of that point of view at one time, and the hon. member for Leeds (Mr. Stewart) who, speaking the other day, pointed out that he thought his party had always favoured something more in the way of freedom of trade, and was rather favourable to a reciprocal trade agreement, would I hope have been another. But if we look across the aisle to where he sits we come to the hon. member for St. Lawrence-St. George (Mr. Cahan)- and, remember, he too was a member of the administration of that day. These three gentlemen were members of the same administration, an administration which had to do with the question of negotiating a trade agreement between Canada and the United States. What was the nature of the remarks of the hon. member for St. Lawrence-St. George respecting a trade agreement with the United States, when he spoke in a previous debate of the present session? The hon. member has a number of pet aversions. I believe perhaps one of the strongest is his dislike of the United States, and particularly in those matters which relate to trade. He said in the house, and has said repeatedly outside of it, that there is no use in Canada trading with the United States, because we will always get the worst of it; in some way or another there is, he believes, an influence at work in Washington which makes it impossible for Canadians to protect themselves in the matter of their own interests.


Mr. CAHAN:: No such words were ever said by me.


William Lyon Mackenzie King: Not those very words, but that was the intent and meaning of what my hon. friend said.


Charles Hazlitt Cahan: And no such intent and meaning. I think Canadians, if they are of the proper calibre, can protect themselves in any situation.


William Lyon Mackenzie King: I might go over the entire number. However all I wish to point out is that there were several other hon. members in the cabinet of that day who held much the same view as my hon. friend from St. Lawrence-St. George held then, and holds now, and has always held. I remember that the late Mr. Ryckman was one, and there were several others. I believe I could without much difficulty go over the ministry of the day and point out just how many would be absolutely opposed to any agreement with the United States and how many might be inclined to favour one.
Well, with a ministry divided in that way it is no wonder that the prime minister of the day was unable to enunciate any policy whatever.


Mr. MANION:: Would the right hon. gentleman, after he finishes our side, describe the differences on his own?


William Lyon Mackenzie King: "The differences on his own" are all reconciled, if I may say so. I might point out to the hon. member- well, I cannot say there was not one, although I am not certain at the moment there was, but certainly there was not more than one who did not wholeheartedly support the agreement we made with the United States in 1935. And that statement applies to a parliamentary party larger in numbers than any party which has ever sat in this House of Commons. As far therefore as the unity of the party is com cemed, it has been pretty well illustrated. I believe my hon. friends will find at this time that ninety-nine per cent, if not one hundred per cent-I rather hope for one hundred per cent-of the party in this House of Commons will support the present agreement. I hope I have made myself clear as far as the solidarity of the party is concerned.
What I want however, to point out to my hon. friends opposite is that when it came to negotiating with the United States for a reciprocal trade agreement there was no division in the present Liberal cabinet over the attitude to be taken. We were a solid unit by way of standing together for the terms of the agreement which we were successful in negotiating and securing. The cabinet was as one, and that is why we succeeded where hon. gentlemen failed. As a party, we stood as a united force throughout the campaign in favouring a trade agreement with the United States. We made that profession throughout the campaign and later when a cabinet was formed to carry out the party's policies we who were its members lived up to our professions.
I remember very well that when this correspondence was published in some parts of

Canada-UTrade Agreement
Canada, it was not much referred to by speakers on the government side, although in others attention was drawn to the basis on which the government were negotiating. It was pointed out to the electorate in localities where it was thought the appeal would be effective, what better opportunities there would be to sell cattle in the United States, fish in the United States and lumber in the United States. It was pointed out that as authorized by the tariff act, there could be a reduction of fifty per cent on a specified number of natural products, including lumber, fish, potatoes, milk and cream, live cattle, a number of other agricultural products and several minerals, both metallic and nonmetallic. The communication from which I quote was dated November 14, 1934. The election was not until October 14, 1935, but throughout that year nothing was given to this parliament when it was in session.


Hugh Alexander Stewart: Would the Prime Minister allow me to ask him a question, just to keep the record clear? Could he give the house the date upon which the president was authorized to negotiate on the terms as agreed to by congress? I think it was in 1934.


William Lyon Mackenzie King: I have just
pointed out that it was on April 29, 1933, that Mr. Roosevelt and Mr. Bennett issued a joint statement as follows:
We have agreed to begin a search for means to increase the exchange of commodities between our two countries, and thereby promote not only economic betterment on the north American continent, but also the general improvement of world conditions.


Hugh Alexander Stewart: I am asking for the
date upon which the president received authority from congress to negotiate an agreement similar to the one negotiated in 1935. I believe it was in 1934.


William Lyon Mackenzie King: It was in
1934.


Hugh Alexander Stewart: Yes. In August, I think.


William Lyon Mackenzie King: There was
plenty of time for the government of the day to have made an agreement if they had been united and of that mind and purpose.


Hugh Alexander Stewart: They had it pretty
nearly closed.


William Lyon Mackenzie King: I may say in passing that it was stated at a previous session by the former leader of the opposition that this correspondence had been laid on the table of the house before the house adjourned in 1934. I questioned that statement at the
time. I have since asked the clerk of the house if the correspondence was laid on the table and I have been informed that it was not. Certainly I have no recollection of its having been tabled, nor has anyone else. The campaign opened early in July, 1935. Parliament was dissolved on August 14, 1935, but it was not until September 9, 1935, that a press release of the correspondence was sent all over Canada for publication in the newspapers. It had been kept in storage for election purposes almost for a year. That release contained the correspondence which I have been quoting to the house. One letter to Mr. Cordell Hull was dated November 14, 1934; another letter from Mr. Hull was dated December 27, 1934, and the final communication was dated January 4, 1935. As my colleague points out, all that was pursuant to the authority which the president had to seek to negotiate an agreement with this country.
It is important to keep in mind that the entire correspondence was not given to the press until September 9, 1935, though it was all in existence on January 4, 1935. This parliament had no knowledge of it while the house was in session, but it was used throughout the final weeks of the campaign to imply, where it was likely to serve the purpose, that if the Conservative party were returned to power they would be prepared to go ahead with negoti-tions for what was in effect a reciprocity agreement. Others knew what to believe. I think it is perfectly clear that if the Conservative party of the day had been returned to power they would have been just as much divided after they came back as they were before. True to tradition, the protectionist interests of the government would have governed and we would have had no reciprocity agreement whatever.


Robert James Manion: May I just interject for a moment? So far as I recall, and I think I recall very well, there was no division in the council of Right Hon. Mr. Bennett.


William Lyon Mackenzie King: If there was no division, then it was because it was pretty well understood among themselves that they would not put any agreement into force before the date of the election, and that during the election they would make no promise to do it after.


Mr. SPENCE:: Because they did not like the agreement.


William Lyon Mackenzie King: They did not like it, but we did. We took it and carried it through. The Tory party of Canada for years has never liked the idea of an agreement
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with the United States. Whenever that party occupies the treasury benches the public may look in vain for anything in the nature of an agreement ever coming into force. That was why with its willingness to negotiate it was possible for the present administration to effect an agreement in such quick order. I remember saying during the campaign that if the Liberal party were returned to power I believed that with the readiness of the United States to negotiate a reciprocal agreement, with what I knew to be the desire of the Liberal party in Canada to negotiate an agreement, we could effect an agreement in three weeks. We effected it inside of three weeks, for the very reason that we liked it. I may say to my hon. friends opposite that the country liked it. The country likes what has been done up to the present, and the country likes what we are doing to-day.


Mr. PERLEY:: Time will tell about that.


William Lyon Mackenzie King: Time will tell about it?-no; let me tell about it right away. Hon. gentlemen opposite have been saying much about public opinion and of what the electorate thinks of these trade agreements. Fortunately we have a record of what the electorate thinks. The electorate has had excellent opportunities of considering the trade policies of both political parties over a period of a good many years. The trade agreement between the former Conservative government and Great Britain was affected in 1932. We who were of the opposition of the day took exception to many phases of that agreement on the score that in some particulars it was heading in the wrong direction. One was this. Preferences were not granted in that agreement by lowering the rate effective against the other parts of. the empire which were receiving the preference. They were effected by putting up the rates as against all other countries. That was the great change in the method of granting preferences which came during the time that Mr. Bennett was in office. Our friends opposite talk about their being the ones who instituted preference. What they did was to institute an entirely new plan of raising tariffs under the guise of granting a preference. The preference owes its origin to Sir Wilfrid Laurier's administration in 1896. It was the Liberal administration of that day which was the first to grant to Britain and to other parts of the British empire a certain preference, and it did so by reducing the existing duties on their goods coming into Canada. It was the other administration, that of Mr. Bennett, which subsequently changed that method.


Robert James Manion: And got some return. fMr. Mackenzie King.]


William Lyon Mackenzie King: Well, we will see what the public thought of the return they got. I am coming to that now. From the time of the 1932 conference on there was a series of by-elections-quite a number-in this country at which the trade policies of the two parties were discussed, the Conservative party defending its policies with respect to higher tariffs, the Liberal party opposing them and taking the position I have cited here as having been given to this house by myself in a statement in 1933. From the time the conference of 1932 took place until the general elections of 1935 there were altogether seventeen vacancies which should have called for by-elections. As I have just said, in those by-elections which did take place the trade policies of the two parties were very fully discussed. What was the showing as the result of the vacancies and consequent by-elections of that period? As a matter of fact, for some time prior to the general elections of 1935 the Conservative party had given up fighting byelections altogether; they had made up their minds that there was no use in trying to appeal to public opinion any longer on the score of tariffs; for they would be beaten every time. There were seventeen vacancies altogether and they allowed seven of these to remain. But what happened in the by-elections which did take place? There were by-elections in the following constituencies: Huron South; Yamaska; Restigouche-Madawaska; Mackenzie, Saskatchewan; Oxford South; Toronto East; York North; Frontenac-Addington ; Elgin West; Kenora-Rainy River,-in all, ten by-elections. In those ten by-elections the Liberals held the five seats which they had previously had and gained four. The one and only seat which was held by the Conservative party was retained by a minority of votes. That was the position in ten by-elections, nine of them carried by the Liberals on their policies, and the one which was retained by my hon. friends opposite was secured by the hon. member for Toronto East (Mr. Church) in a three cornered contest by a minority of votes.


An hon. MEMBER:: As a result of the depression.


William Lyon Mackenzie King: What was there in addition? As I say, they began to see what the public were thinking of their trade policies. Vacancies then occurred in the following constituencies-and what is doubly interesting about this is that in only one of these constituencies was the previous member a Liberal: Halifax; Long Lake; St. Denis; Algoma East; St John-Albert; Montmagny, and Simcoe East; seven vacancies, and not one of them
brought to a test of public opinion by the party then in power. In other words, out ol seventeen vacancies occurring in this House of Commons between the conference of 193S and the general elections the Conservative party did not carry a single one except one by minority vote. That is how their trade policies and and their effects were viewed in the eyes of the people of this country.
Let us come to the present position. Since this present government came into office there have been, over a corresponding period of three years not seventeen, but twenty-five by-elections. By-elections have occurred in the following constituencies:	Assiniboia;
Queen's, Prince Edward Island; Portneuf, Antigonish-Guysborough; Victoria, British Columbia; Wright, Quebec; Gloucester: Ottawa East; Bonaventure; Hamilton West, Renfrew North; Cape Breton North-Victoria; Dufferin-Simcoe; Frontenae-Addington; Victoria, British Columbia; Lotbiniere; St. Henry; St. John-Albert; Argenteuil; East Edmonton; Queen's, Prince Edward Island; Brandon; Cartier; London; Waterloo South. What was the result of those by-elections?
In six out of the twenty-five the Conservative party retained the constituency they had previously held. In one our social credit friends held their own. In eighteen the Liberals carried the constituency. In sixteen constituencies we held our own, and in two we made gains from the party opposite. With what result? With the result that while_ we had 178 of a following when we came into office-the largest following any government in Canada had ever had-we have to-day a following of 180 in this parliament, out of a total number of 245 and there was not a single vacancy when parliament reassembled at the beginning of this, its fourth session. The vacancy which has since taken place is the one which has been created by the recent resignation of the former leader of the Conservative party. Every seat in this house was filled when parliament met at the beginning of the fourth session, and we began this fourth session of parliament, with an increase in the government following of two seats above the number we had when parliament first met.
What has taken place in the period during which these by-elections were held? The people of this country had before them as an outstanding achievement of the present administration the trade agreement with the United States which was effected by this government immediately after coming into office in 1935. That agreement has been the subject of debate everywhere. And may I point out-as hon. members opposite know only too well-that in the city of Victoria,
14, 1939	903
Canada-UJ5. Trade Agreement
where this government carried the seat from the Conservative party, the then leader of the Conservative party went all the way from Halifax to Victoria to fight the issue of the trade agreement with the United States.


Mr. McGREGOR:: Who went up to
Waterloo?


William Lyon Mackenzie King: My hon.
friend will have to answer that. I did not go myself; I can tell him that. And what has happened since my hon. friend has become the new leader of his party? He has had his hand in some of these by-elections. One of them was in Brandon. There again the question of the 1935 trade agreement with the United States was a main subject of discussion at the time.


Robert James Manion: Oh, no.


William Lyon Mackenzie King: Oh, yes, it was, and it was known that there was to be another agreement to come along very shortly which would increase the benefits which had been derived under the previous agreements. The result was, as I have said, that in each of these two constituencies, Victoria and Brandon, the Conservative party lost the seat to the Liberal administration. I think the record of the by-elections speaks to hon. gentlemen opposite more eloquently than any words could possibly do, as to how the electorate of this country feel about the trade agreements which have been made with the United States, and which, as I have said, have been the main subject of discussion in at any rate most of these by-elections.
If the public have taken the view they have of the present administration it has certainly been in large part, because of the obvious benefits which have been derived by Canada from the government's trade policies, and from some of the other policies of the government. Hon. gentlemen opposite have been making the most of the difficult times we are in. They are times that are difficult the world over. They are less difficult in Canada, I believe, than in any other country in the world. What they might have been but for some of the reforms already effected by the present administration, I hesitate to say. If we had had no trade agreements, with the benefits which they have afforded to producers and the benefits they have given the consumers, in this period of difficult times, the situation for Canada would have been infinitely worse than it is.
Hon. members point to the falling off of trade in a particular year. The only way to view an agreement of this kind at all properly is to take its results over a period of years.
Canada-U.S. Trade Agreement

Everyone knows that last year there was a great recession in the United States. Everyone knows that there has been a great depression in our Canadian west, that that part of the country has been suffering from severe drought. These two factors alone account for what there has been in the way of a falling off of trade. Surely hon. gentlemen will not say that the recession in the United States or the drought in western Canada was due to the Canada-United Kingdom agreement which was made in 1932. No more were they due to the trade agreement of 1935. Misfortunes of this kind, are of a character which no country of itself has been able to prevent.
I have not time to-day to run over the advantages that accrued to producers and consumers under the first agreement, the agreement of 1935, but I wish to give now to this house some of the advantages which are certain to accrue to the producers and consumers of this country as a result of the agreement which we have before us at the present time, the 1938 agreement. I shall run over these as quickly as I can, but I think it is important that in considering this resolution the house and the country should know to what extent producers, and also consumers, who make up the whole population of Canada, are likely to benefit by the present agreement.
The criticism has been made that we have given certain concessions, and there will be an effort in the course of this debate to stir up sectional feelings because in some particular locality some one commodity may, to appearances at least, have been affected. Well, I wonder how any agreement could be made between countries unless there were some concessions on both sides. It all depends upon the extent of the concessions. It is true that Canada gave up certain preferences in the British market in order that the United Kingdom might make an agreement with the United States, an agreement which she could not have effected but for this action on our part. But if hon. members will examine the agreement they will find that we have received ample compensatory advantages in the United States and in the British market as a result of these concessions, and they will find also that in their effect upon any locality or industry the general result of the two agreements vastly outweighs any adverse effect that could possibly come in consequence of the agreement.
Let me cite some of the advantages. I venture to say that hon. members, though fMr. Mackenzie King.]
they are familiar in a general way with the terms of the agreement, will be surprised at their extent.
First let me say the leader of the opposition the other day took exception to a press release given out at the time that the agreement was negotiated at Washington; he called it propaganda and ballyhoo. I say to the hon. gentleman that if no release had been given out he would have been the first to complain that the government, instead of making known to the people of Canada the exact truth with respect to this particular agreement, had placed no facts before the public, and we would have been told that we did not understand the new democracy, which demands the fullest information with regard to everything that is done. I am going to place a' copv of the press release on the table of the house and shall ask the clerk to see that copies which are available are distributed to every member in this house and in the senate so that hon. members may judge for themselves whether this is a statement of fact or ballyhoo and propaganda.


Robert James Manion: A mixture of both.


William Lyon Mackenzie King: My hon. friend will be able to take his part out of the mixture and others will take theirs. He is welcome to the ballyhoo.


Robert James Manion: The ballyhoo was not meant for me but for the public.


William Lyon Mackenzie King: If my hon. friend will tell the house when he comes to it, the part that is ballyhoo, we shall thank him for so doing. What I wish to point out is that both in the United States and in Great Britain the same course was followed. The government of the United States issued a press release, a release two or three times the length of the one I have placed on the table of this house, which gave in detail a statement of the agreement from the government's point of view. In Great Britain a press release was issued with respect to the agreement between the United States and Great Britain. In an agreement affecting some 700 or more commodities, it would be extraordinary if something in the form of a press release were not needed.


Charles Hazlitt Cahan: Could the Prime Minister furnish a copy of the press release at Washington? It would be interesting for hon. members to read it also.


William Lyon Mackenzie King: I thought from what my hon. friend said the other day that he had read it and was quoting from it. so surely there is no need to give him one.

Canada-LS. Trade Agreement


Charles Hazlitt Cahan: But you might furnish it to the house as a counter-irritant.


William Lyon Mackenzie King: Let me now discuss some of the benefits that come from the present agreement, so far as the Canadian producer is concerned. The Canadian producer in every part of the dominion will share in the benefits resulting from the agreement. For example, in the maritime provinces, the concessions with respect to fish will be found of the greatest benefit. Here I must emphasize again the fact that all that I am now setting forth in the way of benefit is in addition to what has already been obtained under the agreement of 1935. The benefits of the latter agreement remain in toto. The benefits I am speaking of now will be added to those of the 1935 agreement when this agreement is passed. I have already mentioned the concessions on fish. The reductions of United States duties on potatoes will be particularly appreciated in New Brunswick, and the fox farmers of Prince Edward Island will gain from the concession on silver fox furs. The producers of Quebec will gain from the reductions in the duties on maple products, on salted codfish, cream, milk, hay, buckwheat, certain types of paper, salmon and lumber. The producers of Ontario will benefit from the reductions on lumber, cattle and calves, cheese, bacon and pork, barley, clover and grass seeds, fresh water fish, paper, nickel, ferro-alloys, leather, and various manufactures of wood. The farmers of the prairies will gain from the maximum reduction of fifty per cent in the United States duty on heavy cattle and the enlargement of the tariff quota on this type of cattle, as well as through the concessions on horses, swine and pork, poultry, feed wheat, barley, oats and rye, feeds of various kind, and fresh water fish. British Columbia will be particularly benefited by the concessions with respect to forest products but will also gain from the concessions on salmon, halibut, fresh cod, sperm oil, zinc, cadmium, firebrick and limestone. Let me speak of a further advantage which will come under this agreement. Any advantage that i3 gained by Britain, for example, in her treaty with the United States will accrue to Canada under the most favoured nation exchange arrangement, which is part of the agreement.
Hon. members opposite have sometimes taken exception to the part of the agreement relating to most favoured nation treatment being accorded other countries. That principle was agreed to by their party when they were negotiating with the United States. Let me 71492-58
read what appeared in the actual exchange of communications which formed the basis of all subsequent negotiations:
The mutual concession of tariff treatment as favourable as that accorded to any other foreign country;
Perhaps I had better read what precedes that. This is Mr. Herridge speaking on behalf of Mr. Bennett and his administration:
I am authorized to put forward the following outline as a suitable basis for the negotiation of a trade agreement.
And the second feature is this:
The mutual concession of tariff treatment as favourable as that accorded to any other foreign country; this means that Canada would extend to the United States its intermediate tariff, involving reductions from the present rates of duty on some 700 items, including both natural and manufactured products, together with a number of further reductions below the intermediate tariff rates through the extension to the United . States of concessions made by Canada in trade conventions with foreign countries.
In other words, the most favoured nation principle was to be embodied in any agreement the previous administration might have found it possible to make. In addition to the benefits which we receive under our own agreement, we receive other concessions under the Anglo-United States agreement, which are extended to us under the most favoured nation clause. The chief commodities on which we receive concessions in this indirect way are books, manufactures of artificial abrasives, various types of leathers, boots and shoes, tobacco pipes, dressed furs, kippered herrings, biscuits, jellies, jams and marmalades, ginger ale, amorphous graphite and pig iron.
Now let us take the benefits to different industries in the country. Agricultural products on which we receive direct concessions include live cattle, swine, pork and bacon, cream, milk and cheese, poultry and eggs, horses, honey, barley, oats, buckwheat and feed wheat, mill feeds, mixed feeds and screenings, blueberries, strawberries and other berries, apples and cider, clover and grass seeds, potatoes, turnips, hay, maple products and silver fox skins.
Fisheiy products of almost every kind are conceded admission to the United States markets on more favourable terms. The most important concessions are those received on fish of the cod family-cod, haddock, hake, pollock and cusk, but valuable concessions have also been received on salmon, halibut, swordfish, mackerel, herring, fresh water fish generally, sturgeon and shellfish.
Forestry products receive concessions on lumber, shingles and many other manu-

Canada-U.S. Trade Agreement

trade agreement of modern times, that between the United States and the United Kingdom. I do not stand here and make an unsupported claim for the party I represent that we helped make possible this agreement between Great Britain and the United States. The United Kingdom was the first to acknowledge the service rendered by Canada in that particular. The United States has done the same. During the course of the debate on the address I placed on Hansard a communication which I had received at Washington the day the trade agreements between Canada and the United States and the United Kingdom and the United States were signed. That communication thanked the Canadian government, in the name of the British government, for having made possible the agreement which was concluded by them at that time.
I want to emphasize the international significance of these agreements, because now we have to consider not merely the two agreements Canada has made with the United States, but the two agreements that are conspicuously before the world to-day, namely the agreement between Canada and the United States and the agreement between the United States and the United Kingdom. Those agreements are inseparable in the sense that neither could have been effected without the other. It is important to remember that it would not have been possible for us to have extended our own agreement beyond a certain time, except with the good will of the United States. Let it not be forgotten that the first agreement we made with the United States was for three years, subject to termination after that period by either party on six months' notice. Those three years were up on January 1 of this year. We also have a trade agreement with Great Britain, which expires next year. As far as those two agreements are concerned, notice in regard to one could have been given last year, and in regard to the other the agreement with Great Britain, notice of termination might be given this year, to become effective next year. I now ask: Where would this country be in the matter of its future trade if it had not sought to be accommodating when asked to cooperate and had not lent its good offices to those two great countries, who are our principal customers, and to whom we look, so far as trade is concerned, more than to all the other countries of the world combined? Where would we have been if we had not played the part which Canada, above all others, has an opportunity to play in this world to-day, namely that of interpreter, between those two great countries, and so cMr. Mackenzie King.]
far as possible a conciliator of their differences? I say one of the greatest achievements any government has ever had to its credit is that of having been able to play a part in bringing about a new situation in trade relations between such a great group of nations as Great Britain, the United States and Canada; and, as my hon. friend the Minister of Finance (Mr. Dunning) has just said to me, not only a leading part but a decisive one.
May I point out that before these negotiations took place the democratic countries of the old world were so concerned about the situation in Europe that England and France together asked the then premier of Belgium, Mr. Paul van Zeeland, if he would not undertake a commission to investigate and report on the possibility of persuading the great nations that for the good of the world in general they should seek to remove some of those restrictions on trade which were making for economic nationalism, an economic nationalism which many believed was bringing the world closer and closer to war. Mr. van Zeeland undertook that commission. It was an inquiry into the possibility of obtaining a general reduction of quotas and other obstacles to international trade. He was recently in Ottawa, where he spoke to a number of us with regard to these matters. At that time he said, as he has said publicly in the United States and elsewhere, that there had in the recent past been no contribution made to a solution of the problems of our day that he could think of that was comparable to that which had its outcome in these trade agreements between the United States, the United Kingdom and Canada. His report on international economic reconstruction, which was published by the Carnegie Endowment for International Peace, is quite lengthy. I will not take time to read more than one paragraph. It was written before the United Kingdom-United States agreement had been negotiated:
In the present state of affairs, the negotiation of bilateral commercial agreements, based on the most favoured nation clause, remains one of the most efficacious methods for reducing tariff barriers. ... No one would underestimate the effect which would be produced- either directly, in its reaction on _ the two national communities concerned, or indirectly, in its repercussion on the whole rvorld, by the conclusion, in a spirit of international collaboration, of a commercial agreement covering the wide range, between the two great Anglo-Saxon communities.
That was what Mr. van Zeeland reported as the result of his inquiries in different countries, that one could not overestimate the

Canadar-U.S. Trade Agreement
advantages to the whole world of an agreement of that character between those two great English-speaking communities could such be obtained. And what Mr. van Zeeland regarded as desirable is exactly what has now been done in an effort to produce a more satisfactory international situation. The Anglo-United States trade agreement could not have been concluded without the negotiation of the Canada-United States agreement and the acceptance by Canada of some modifications in the empire preferential system. Surely we can afford to view with pride a contribution, however slight, to so great an end!
May I now give, as coming with perhaps greater authority than words spoken by me personally at this moment, the expression to the world of the views of the governments concerned in these transactions, with regard to their international significance. On November 17, as hon. members will recall, the Canada-United States agreement and the United Kingdom-United States agreement were signed at Washington on the same day and at the same time. The representatives of the three countries were asked by the president of the United States to speak on that occasion and were thereby afforded an opportunity to indicate what in the opinion of these governments was the international significance of the agreements. If the house will pardon me I shall place first on the record a part of what I said on that occasion on behalf of the government of Canada, as expressing our conviction and what I believe is the conviction of the people of Canada with respect to the international significance of the agreements. I said:
On the earlier occasion-
Referring to the agreement of 1935-
[DOT]-I also expressed the view that the benefits of our agreement would not be confined to trade. They have not been so confined. It is no exaggeration, but the simple truth, to say that the relations between the United States and Canada have never been happier than in the three years that have elapsed since November, 1935.
To-day's ceremony, has, fortunately, an even broader significance than that of three years ago. We have also just witnessed the conclusion of a far reaching agreement between the United States and the United Kingdom. There will be in Canada genuine satisfaction that in facing the problems of to-day the two countries, with whose fortunes those of Canada are so closely linked have effectively strengthened the friendly relations which have long prevailed between them.
It must be increasingly apparent that the stability of the civilization we cherish depends more than ever on the friendly association of the great English speaking nations of the old world and the new.
That statement is unquestionably true, and it is a very significant statement.
We cannot but be impressed by the fact that the occasion of our coming together to-day has been, in part at least, determined by the willingness of the sister nations of the British Commonwealth to facilitate a trade agreement between the United Kingdom and the United States. Our satisfaction at the conclusion of these long and arduous negotiations is all the greater because the agreements which have been reached are in no sense exclusive. Indeed their effects will be to remove many obstacles from channels of world trade. Their benefits will extend far beyond the limits of the three countries immediately concerned.
We cannot too earnestly hope that they will provide to other countries an example of the mutual advantages which flow from the broadening of trade relations not only in the realm of material well-being, but in the wider sphere of human understanding and good will.
I wish now to give to the house, in regard to the international significance of the agreements as viewed by the United States, the words of Mr. Cordell Hull, Secretary of State for the United States. I believe it would be impossible to cite any person whose words are more deserving of careful thought and consideration at this time. Mr. Hull said:
The two documents are of historic significance. Not only do they provide an instrument for an expansion of valuable commerce between the countries concerned, but they constitute an expression of determination on the part of three of the world's largest commercial nations to maintain and strengthen a sound and healthy basis of international trade. The conclusion of the two agreements is a fortvard stride of surpassing importance in the direction of a firm establishment of non-discriminatory treat-ment_ as the foundation of international trade relations.
These agreements furnish concrete and powerful support for a future trend of world developments along the lines of increasing understanding and cooperation among nations; of peace built upon order under law; of expanding international trade based upon fair dealing; upon equality of commercial treatment; and upon stability of those business conditions which ar j necessary if private enterprise is to flourish and thus to enhance the economic prosperity of each nation. Through the conclusion of these agreements, our three nations have given a new vitality to the basic principles of a civilized world order, the acceptance and application of which are indispensible to economic well-being and social security within nations, to peaceful relations between nations, and, therefore, to the continued advancement and progress of mankind.
I wish now to quote the words of the British ambassador, speaking in the name of the British government:
I wish to join with the Secretary of State in the expression of deep satisfaction at the conclusion of these agreements. The agreement which we have just signed relates firstly to the trade between the United Kingdom and the United States of America. It also relates
Canada-U.S. Trade Agreement

to the trade of the United States with Newfoundland and the numerous territories which constitute the British colonial empire. We are glad that at this same moment the Dominion of Canada has signed a new trade agreement with the United States based on those principles which govern our own. And we gratefully acknowledge the contributions made by the dominions and India in order to facilitate the conclusion of our agreement.
As it is, the extent and variety of the trade covered are very great.
And then in conclusion:
On this sound and healthy basis trade will be facilitated, the prosnerity of our peoples increased, and the arts of peace encouraged. I share fully the sentiments expressed by the Secretary of State as to the promise for improvement in relations among nations which rows out of international negotiations of the ind which have been so happily concluded between our two countries.
May I supplement the words of the British ambassador by these words which appear in a cable which came to me as Prime Minister of Canada from the Secretary of State for Dominion Affairs in London, and which was received at Washington at the time of the signing of the agreements:
On occasion of to-day's signature United Kingdom-United States trade agreement I should like to express again to Canadian government cordial appreciation of their readiness to facilitate our agreement with the United States by consenting to such modifications of their rights under their existing trade agreement with the United Kingdom as were necessary to enable it to be concluded. It is our confident hope that agreement now signed together with complementary agreement between Canada and the United States which is being signed at same time will assist substantially in reducing barriers to trade and will thereby prove a real contribution to world appeasement.
In the opinion of this administration, we in Canada, because of our democratic and peaceful outlook upon world affairs and also because of our position as one of the world's largest traders with much to gain from the extension of world trade, were bound both ey our sentiments and by our economic interests, to join with the two larger Englishspeaking democracies in promoting a policy of Anglo-Saxon friendship and of international goodwill. A policy of national selfsufficiency is out of the question for Canada which is peculiarly in need of international trade because of its enormous production of primary commodities and its relatively small population. Thus we cannot, like some other countries, pursue a policy of producing all that we consume and consuming all that we produce. Our whole economy, the prosperity of our vast wheat areas, our mines and forests and fisheries, and our far-flung transportation systems, are based upon the continuance of international exchange of goods on a

great and growing scale. The restriction of international exchanges involves a declining standard of living, as the totalitarian nations have found to their cost. The increase of international exchange of goods involves a rising standard of living, not for ourselves alone, but for all peoples that are ready to join with us in removing the obstacles which at present obstruct the free course of international trade.
Canada, then, on both political and economic grounds, is committed to a policy of peace and goodwill, and of freer exchange with countries which will meet us half way. More especially are we committed to such a policy in dealing with the countries with which there can be no question of the disturbance of good political relations, particularly the countries included within the British empire, together with the United States. Nearly nine-tenths of all our international trade is already conducted with the British empire and the United States, and a considerable part of the remainder with the smaller democratic countries of Europe. Indeed, if it had not been for our empire and continental relationships, we should, as I have already said, have fared much worse than we actually did during the great depression.
So far as greater freedom of trade is concerned, we are always willing to add to these countries, other countries prepared to trade with us on a reciprocal basis, whether they be countries whose policies are guided by the same democratic ideas, such as France, the Scandinavian countries, Holland and Belgium, or countries with domestic policies differing from our own. We do not regret that such countries may derive some incidental benefit from the operation of the agreements recently concluded. We feel that if we take rather more of their products, they will take more of ours.
It is to be remembered also that the agreements command the full support of the other chief countries of the British commonwealth. In the old days it used to be claimed by some that in matters of trade Canada had a choice between the United Kingdom or the United States. Now we have chosen both. Our trade agreement with the United States has the full approval of the United Kingdom, and our preferential trade agreements with the United Kingdom and other empire countries have the full assent of the United States. We have made the best of both worlds, and have assisted the United Kingdom in securing freer access to the markets of the United States. Once again we have played the part of reconciling and interpreting the two great Englishspeaking nations to each other. The making of these agreements, especially when the world

Canada-UJS. Trade Agreement
situation is so precarious as it unfortunately is, is an achievement of superlative importance, which will have its repercussions throughout the world in the next generation. In the present, each of us sleeps more safely in his bed because of the rapprochement between the world's two greatest democracies, a rapprochement that could not have been effected without the assent and the cooperation of Canada. If this administration were to end to-morrow, it would have its honourable place in world history on this score alone. That is the broad fact of the present situation. Like Canning, we have done our indispensable part to call into existence a "new world to redress the balance of the old."
It has been truly said that economic insecurity and depression are major causes of internal disorders and of international friction and economic warfare that sometimes develop into military warfare. Such insecurity and depression are frequently caused by excessive trade obstacles that prevent citizens of one country from exchanging products with the citizens of other countries. Removing excessive trade barriers, and thus permitting a greater exchange of goods to contribute to economic prosperity and security, is clearly a means of avoiding some of the deep-rooted causes of military warfare.
The trade agreements concluded between Canada and the United States, and Great Britain and the United States constitute the one outstanding contribution of our times toward economic disarmament. As such, they have immeasurably helped to create a basic situation more favourable to peaceful relations between nations. Let us say in conclusion, the agreements are proof of the feasibility of working out fair and friendly adjustments in the economic field which lessen the friction of conflicting interests and remove the risks of international misunderstanding. They represent the attainment of an objective in substantially reduced barriers to trade, toward which the commercial policy of the present administration has been steadily directed. It is deeply gratifying to the government that in our efforts to ensure, over a longer period of time, the advantages of wider markets to producers, and the advantages to consumers secured in the trade agreement of 1935, we were able, in a still wider arena, to further not only the ends of commerce and trade but the all important ends of international goodwill. No more important contribution toward a new order of relations between nations has been made at this critical period in the affairs of the world.


Robert James Manion: Mr. Speaker, I shall take only five or ten minutes to-day, because it is understood, following the custom with regard to trade treaties, that there shall be an adjournment for a few days. The Prime Minister (Mr. Mackenzie King) mentioned this last evening.
I have listened with a good deal of interest to the speech of the Prime Minister, particularly to the last part. The first part of his speech was largely a political stump speech in which he brought out the story of the by-elections held during the past three or four years. Naturally he picked out those which were favourable. He made a very good story of it and I have no quarrel with it. If I wished I could deal with a couple of byelections, such as the one at St. Henri, which certainly did not depend upon the' trade treaty, and the one at Waterloo South, which did. However, I do not intend to waste the time of the house on those matters;
I shall endeavour to speak entirely on the merits and demerits of the trade agreement.
The right hon. gentleman's peroration was largely oratorical, as is usual when he makes a speech of this kind. It was very well done, but I find myself just a little puzzled as to bow he could get so enthusiastic over the peace which has been brought about between Canada and the United States. I think all hon. members of this house, and Canadians outside the house whose memories go back a number of years-my good old friend to my ri^ht can take his memory back perhaps fifty or sixty years-can remember many afterdinner speeches referring to the three thousand mile boundary line between Canada and the United States without a gun or fort of any kind on either side. So many speeches of this kind were delivered that most people reached the stage where they were sick and tired of listening to any mention of this three thousand miles of undefended frontier". They were not sick and tired of the magnificent example which Canada and the United States has given to the world, but they were a little tired of listening to all this talk about it.
Going back into history, I cannot recall any time since 1812 when there has been any difficulty between Canada and the United States. This treaty, therefore, did not do much to bring about peace between Canada and the United States. So far as Great Britain is concerned I can remember an incident that occurred in 1913 when travelling by boat from Los Angeles to Vancouver and
Canada-US. Trade Agreement

Victoria, I was in a group of Americans. As Canadians and Americans are very much alike, they took me to be a United States citizen and talked quite freely in my presence. At that time there was some little difficulty between the United States and Japan, the former having passed certain laws in connection with properties in California which were not pleasant to the Japanese. I well remember how pleased I was at the attitude of the Americans. They said that if there was any difficulty between the United States and Japan they knew they could count absolutely on the friendship of the United Kingdom.
I can remember pleasant relations springing up between the United Kingdom and the United States. It is quite true that the delightful relations which have existed between Canada and the United States for a hundred years did not exist between the United Kingdom and the United States much before the beginning of this century. But for the last thirty-five years at least there has been no indication of any trouble between the United Kingdom and the United States. An American senator said some years ago that the thought of war between the United States and Great Britain was absolutely repugnant to the people of the United States.
I mention this because it is the attitude that has existed for many long years. I do not want to puncture the bubble the right hon. gentleman has been blowing, but at the same time I do not think it is necessary to get quite so excited about the marvellous peace treaty which has been negotiated by the right hon. gentleman to keep the United States and Canada and the United States and Great Britain from going to war.
I do not intend to go on any longer to-day. There is nothing unusual or unfair in what I am proposing as to adjournment of the debate. When the empire trade agreements were introduced by Mr. Bennett on October 12, 1932, the right hon. gentleman who is now Prime Minister was then leader of the opposition, and he took an adjournment of five days from October 12 to October 17. When the Canada-United States treaty of 1935 was introduced on February 25, 1936, the leader of the opposition of that time, Mr. Bennett, took an adjournment of three days. I am going to suggest that, with the consent of the right hon. gentleman, the government and the house, we be given the same adjournment that Mr. Bennett got at that time, namely three days, instead of the five as in 1932, in which
	.
event the debate would be continued on Friday next. With that suggestion I move the adjournment of the debate.


William Lyon Mackenzie King: May I say at once to my hon. friend, as I said last night, that whatever would most oblige him the government will be happy to afford. This debate, then, will continue on Friday.


Robert James Manion: Unless the Prime Minister would prefer it to go over to the beginning of next week.


William Lyon Mackenzie King: No.


Robert James Manion: Whichever will suit him.
Motion (Mr. Manion) agreed to and debate adjourned.



BUSINESS OF THE HOUSE


William Lyon Mackenzie King: That on and after Wednesday the 15th February next to the end of the session, government notices of motions and government orders shall have precedence on Wednesdays over all business except introduction of bills, questions by members and notices of motions for the production of papers.


Mr. J. S. WOODSWORTH (Winnipeg North Centre):: I hope the government will not press this motion. So far the private members have had no opportunity whatever of introducing any of their resolutions. It may be said that there has been a debate upon the Bren gun matter which has taken considerable time, on a motion introduced by a private member. On the other hand the government itself was prepared to refer that matter to the public accounts committee, and hon. members on the government side took their full share in the debate. I cannot see, therefore, that private members can be accused of delaying the ordinary business.
It seems to me there is a danger that this house will be enabled to consider merely government business. The supporters of the government, who are in the vast majority, seem to be content, largely, to let the government bring forward whatever measure it pleases; we in the opposition are reduced to the position of simply criticizing what the government brings forward, and when the government does not bring forward a great deal we are in rather a hopeless situation. There are certain matters which we believe are of great interest to our constituents, and which we should like to discuss. I do not think that at this stage of the

Precedence for Government Business
session we should have Wednesdays taken from us. I ask that the government do not press this motion.


Robert James Manion: I support the remarks of the hon. member (Mr. Woodsworth) who has just taken his seat. As a matter of fact I do not suppose the Prime Minister (Mr.	Mackenzie King)
expected that his motion would carry to-day. It is my recollection that all governments, when first they make this motion, expect it to carry with effect about two weeks later than the day they originally propose.


An hon. MEMBER:: No.


Robert James Manion: That has been my experience in the many sessions I have sat here. At any rate I think the hon. gentleman who has just spoken has very good grounds for saying that, owing not to the fault of the government but to other circumstances, private members have been crowded off the board. I support him and ask the Prime Minister to postpone the motion a little longer.


Mr. J. H. BLACKMORE (Lethbridge):: I support the stand of the leader of the Cooperative Commonwealth Federation (Mr. Woodsworth). It seems to me there is developing in Canada the attitude that when people express the opinions of their particular constituencies they are wasting a good deal of time. All we need to do is to remember from what the word "parliament'' is derived, and it will begin to set us right along this line. All we need to do is to remember that there are two or three nations which have completely dispensed with the disagreeable necessity of having people talk politically at all, and we can see the direction in which, probably, we are going. I have no desire to see any of the time of parliament or of the country used in vain, but for centuries it has been the policy of British peoples to allow all the people to have their say.
Since I have come into this house, and since the group with which I am associated have come here, we have studiously avoided taking part in discussions to which we felt we could make no worthwhile contribution. It has been evident, I believe, to all who have willed to notice it, that we have contributed very little to this Bren gun confab. That is in accordance with our policy. Speaking for my own group, we came here with a message to deliver, and the day will come, sir, when it will be realized that the message this group came to deliver is a message which should have been listened to long ago. For the day will come when it will be realized that here-[DOT]


Some hon. MEMBERS:: Order.


John Horne Blackmore: -lies the solution of the difficulty. Probably, Mr. Speaker, I am out of order.


Mr. SPEAKER:: The hon. member must
keep to the motion before the house.


John Horne Blackmore: We just wish to
back up the stand-of the two hon. members who have spoken, to the effect that we should not be denied the privilege of using private members' day.


Mr. A. W. NEILL (Comox-Alberni):: I
wish to add my voice to the protest which has been made by those opposing this motion -which is just another instance of the everpresent and continual attrition which is taking away the rights of private members, which are really the rights of the common people, to express themselves. The actions and privileges of private members are sufficiently curtailed now, and hardly a session passes without an attempt further to curtail them. One of the most important privileges the private member, as representing the common people, possesses is the right of bringing in resolutions and having them debated and possibly voted on. At least that used to be one of the privileges, but it is being restricted more and more. I often wonder why the government- all governments, whichever happens to be in power-are so much against this; because it is the best way for them to hear and to get an insight into the wishes of the people, and that government is always wisest and most successful which keeps its ear to the ground and informs itself of the wishes of the people and keeps a little bit ahead of public opinion.
For our own protection, and largely for the protection of the larger parties in the house, we framed a lot of what we call standing orders-quite a big volume; there are 130 of them-and they are very strictly and rigidly enforced as regards the rights of the two major parties. But when it comes to the rights of the groups and of individuals it is quite a different matter. No rule can be amended affecting the rights of the two major parties in the house on the conduct of public business without having a committee of the house, which generally has to be unanimous, to agree on the change. But anything in connection with the rights of private members can be done by a mere vote in the house any day, upon the leader of the government giving two days' notice.
There used to be no limit upon the length of speeches of hon. members in the house.
9i4	COMMONS
Precedence for Government Business
That was changed and the time was confined to forty minutes. It is a very severe restriction.


An hon. MEMBER:: Too long.


Alan Webster Neill: We have a standing rule, number 15, which lays down very strictly the program for the complete week. It defines what shall be taken up on Monday, on Tuesday, and so on, and that procedure is very strictly adhered to. There would be a nice fuss if there was any proposal to deviate from it without unanimous consent. But in connection with this matter, the right of private members to bring in resolutions, it does not need general consent at all. The program as laid down provides that Monday shall be devoted to the introduction of private members' resolutions. Wednesday is only a half day and private members have Thursday for the first four weeks. But that is only a trick of language, because as a matter of fact it is not four weeks, but only three weeks. The first Thursday cannot be counted because private members cannot discuss any resolutions on that day. Why not be honest and call it three weeks? That was thought reasonable at one time and perhaps it was then, but the gradual increase in the number of groups suggests that greater opportunity should be afforded for private members to debate matters in which they are interested. After a time the government moves that one of the days allotted to private members each week be discontinued, and a little later another day is taken away. This means blocking discussion.
Before last session I placed a notice on the order paper at least six weeks prior to the meeting of the house. Under ordinary conditions, in any company or public board, notice of that length of time would be sufficient to get a motion heard; but although I placed my motion on the order paper six weeks before the house met it had only reached the top of the list, about to come on for discussion, when the Prime Minister rose and moved that all further private members' days be taken away. This year I thought I would make sure and I therefore placed a resolution on the order paper three weeks after the close of the house. That surely was plenty of time. On July 25 I sent the notice in. Now I am second on the list and my resolution may or may not be heard. I do not think it will be. And twenty-five members with resolutions below mine cannot possibly be heard. Thursdays we have already lost because we debated the speech from the throne and the Bren gun for three weeks. But we discussed the speech from the throne on the motion of the Prime

Minister that it should take precedence, though he was well aware that in that way we were going to be deprived of three or four Mondays and Wednesdays. In the British Columbia legislature it is the custom-it is very frequently done, at any rate-to have a member or two speak on the address and then adjourn that debate and go on to some other public business on the order paper. But that was not done here; it never is, and in that way private members' days are taken away and they have no opportunity to discuss resolutions in which they are interested. The Prime Minister is now taking away one of the private members' days before we have had, even for one day, the opportunity to which we are entitled. This is the first time it has ever happened. We have not had a private members' day so far this session, and now, as the scripture says, the government is taking away the semblance of the privilege-"that which he seemeth to have." That is not democracy.
We have heard before, and I am sure the Prime Minister will tell us again, that there are a number of other opportunities available to us. One of these is the occasion when estimates are in committee of the whole. We are told that we can then deal with any subject in which we are interested. But that is limited by the fact that in committee there is a strict rule which provides that speeches in committee of the whole must be relevant to the item or clause under discussion. I have been caught in that way before. It may easily be that there will be no item in the estimates under which some particular subject which hon. members would like to discuss might properly be taken up, so that that outlet is closed. The other alternative is the time-honoured one, "Oh well, you can always discuss it on the motion to go into supply," that being the occasion on which under the old British tradition, members 'are allowed to voice grievances before granting supply. The answer is this. It is a well-known fact, indeed, it is one of the rules, that an amendment to the motion to go into supply constitutes a vote of want of confidence in the government. Can anyone expect therefore that members elected to support the government will take such a step when it might mean the defeat of the government? Still less can you expect the government to extend sympathetic consideration, let alone taking sympathetic action, on a resolution framed in such a way that, if carried, it would mean their own defeat.
That is why I say that we should not be deprived of these opportunities to introduce resolutions for discussion. Very often a resolution is brought in and defeated and on another

Precedence lor Government Business
occasion it is brought up again. The government hear what is going on and the people of the country become educated in the idea that is advocated and express their views privately to the government. Subsequently it may be brought forward in a more acceptable form and one or other of the parties adopts it as their policy. It is therefore educative and useful.
It may be said that a good part of the session has already gone and we have done nothing. But the address in reply to the speech from the throne is a part of the government's business. Apart from custom, there is no law that makes it incumbent upon the government, when they have little or no business of their own, to adjourn the house. They might go on to private resolutions. But they never do; instead they adjourn the house. There have been two Friday evenings that we could have made use of in the discussion of private members' resolutions, but on both occasions the house was adjourned.


Mr. DUNNING:: By unanimous desire.


Alan Webster Neill: We had not got into estimates, though that was not through any fault of the government; but the fact remains that the house was adjourned, and therefore two occasions were lost to private members. It will not do the slightest good to protest because the government have a majority and they can make up their mind to do these things, but I add my protest to those that have come from the other groups against having private members' days taken away so early in the session.


Thomas Langton Church: The motion of the Prime Minister (Mr. Mackenzie King) must be considered in conjunction with the larger question of reorganizing the rules of procedure of the house. Private members' privileges are being taken away every year. I have a motion on the order paper and I have no objection to letting it go this year in order to get on with the business, because all these motions might be considered under the estimates; but we have a parliamentary constitution and we have rules, and yet private members have few or no privileges. Some ten years ago and almost every year since I introduced a motion which would have remedied the present situation, and in the last four years I have discussed the subject matter of that motion, namely, the revision of the rules of the house, together with constitutional reform, parliamentary reform, cabinet reform and law reform. It took three hundred years for parliamentary government to attain its present control over the budget and the executive, and in the struggle there was bloodshed. When
parties cannot agree there is always trouble. The constitutional changes that have been brought about in the motherland have not come about without a great deal of sacrifice, and where two sides could not agree there was trouble, as in the case of the general strike in 1926 when troops were sent to the docks.
My proposal is that we should set up a committee to study the question of our rules and procedure, and of parliamentary, constitutional, cabinet and law reform, and reform in other directions. We have no control over the constitution or the exchequer at the present time. We are simply conducting post mortem examinations. For example, this afternoon we have been hearing something about an international trade treaty that was passed over the heads of parliament, and of industry and labour. I do not refer in any spirit of criticism to what the Prime Minister (Mr. Mackenzie King) has said, or done because I believe he did at heart what he believes to be right. But, I repeat, we should have a committee on law reform and on House of Commons reform to bring our proceedings up to date. On the order paper there are many bills having to do with the criminal code, bills embodying amendments which private members think should be made. Some of these are proposed by the leader of the Cooperative Commonwealth Federation, and some by other hon. members, and in my opinion there should be a standing committee on legal bills and estimates to which these questions could be referred. There are a number of standing committees to-day. I have been a member of one committee that has not met in years, the public accounts committee. We should revise our ways of doing business and adopt the municipalities' plan of dealing with estimates. The heads of departments sit around a table with a committee and strike off thousands here and there, or perhaps half a million. The deductions are made by all with the officials present as a guide, and-


Walter Edward Foster: I think the hon. member
is wandering from the subject matter of the motion. The motion is to take away Wednesday as a private members' day.


Thomas Langton Church: I accept that ruling, sir;
it is quite correct. But I say that this question of private members' days and the motions of private members on the order paper should be referred to some committee of the house, and the rules and regulations should be amended.


William Lyon Mackenzie King: A good deal has been
said on this motion with respect to the rights of private members. Odd as it may seem, I
916	COMMONS
Precedence jor Government Business
think something ought to be said as to the rights of the government. I must say in reply to hon. members opposite that I have most in mind at this moment what I think the people of this country will expect ine to say. In the first place may I point out that it is over a month since this parliament assembled. In that time the government has not been able, until to-day, to bring forward a single government measure. That has not been the fault of the government but has been due to the fact that the entire time has been occupied by private members speaking in the debate on the address in reply to the speech from the throne and on the motions with respect to the Bren gun contract. It has been due to another fact, namely that while the government have sought in a courteous way to secure the cooperation of hon. members opposite in expediting business we have had no cooperation, but opposition. The hon. member for Comox-Alberni (Mr. Neill) has spoken about the adjournments which have taken place on Friday evenings. I asked hon. gentlemen opposite early in the week if they would not allow us to go into supply in one of the departments that we might have a chance under the rules to take up supply on Fridays, as is customary in this house. Hon. members know that for years past, in fact for all time, it has been a general custom of this house to reserve at least part of Fridays for discussion in committee of supply. But though the request was repeated later on we were refused that opportunity. That is one of the reasons why we did not sit on Friday night.


Robert James Manion: You could have brought
up your other business.


Mr. STEVENS:: Half a dozen resolutions.


William Lyon Mackenzie King: Supply was
the important business.


Robert James Manion: So are the others, or
they should not be on the order paper.


William Lyon Mackenzie King: My hon. friend knows very well which is the most important business. Getting on with supply is one of the major obligations of a government. At the end of the session there is an outcry if the government have a great deal of supply left. I do not know whether hon. gentlemen opposite are framing their program in such a way that that may be the position when we get towards the end of this session, but if it is the position it will be entirely their own fault, not the fault of the government.


Henry Herbert Stevens: That is not fair.


William Lyon Mackenzie King: It is perfectly true. We have not had opportunity thus far to get into supply at all.


Henry Herbert Stevens: That is not correct. At any time the government, with its huge majority, could have adjourned any debate and gone on with any business.


William Lyon Mackenzie King: We could not have adjourned the debate on the address in reply, because a motion was carried by this house that it should have precedence over everything else. And I ask hon. members what would have been said of the government if we had, as suggested, adjourned the Bren gun debate.


Henry Herbert Stevens: You did adjourn it.


William Lyon Mackenzie King: However, I am not anxious to get into any controversy or argument; I am simply stating the plain facts. I ask myself, what do the people of this country expect the government to do? Do they expect the government to be governed by private members, or by its own appreciation of the necessity of doing the business of this country?


Henry Herbert Stevens: To be governed by parliament.


William Lyon Mackenzie King: We have been sent here for the purpose of carrying on the business of this country. The business of the country is not primarily private members' motions, it is the business which the government brings forward.
I come to what the hon. member for Lethbridge (Mr. Blackmore) said, because I agree that this whole situation has a much larger significance than appears in this resolution. He said to-day that many assemblies in the world have been swept out of existence because the people thought they had become incapable of carrying on the business of government. That was his statement. There are a great many people in this country who are busily at work trying to develop a similar agitation against democratic government. I could direct his attention without much difficulty to agitation in some quarters to have it appear that this country is without leaders, that parliament is incapable of carrying on business and that we should have something different. It would be very easy to have the people content to slip into the fascist method of doing business should the country be given the impression that the government, because of the time taken up by private members, has no opportunity to go ahead with the business of the country.

Precedence for Government Business
The hon. member for Winnipeg North Centre (Mr. Woodsworth) says they have been denied four private members' days this session. We have been denied, by the discussions that have taken place in this house, nine government days.


Mr. HEAPS:: That is not quite correct.


William Lyon Mackenzie King: That is perfectly true. Look at the rules of the house which provide certain days for government business. We have not been able to touch government business on those days set apart as government days. Nine days have gone, some at least of which we should have had for government business.


Robert James Manion: Was not the Bren gun matter government business?


William Lyon Mackenzie King: It is not government business at all.


Robert James Manion: It should not have been.


William Lyon Mackenzie King: An hon. member made a motion to refer the Bren gun contract to the public accounts committee. The government accepted that motion, and the motion should have carried then and the matter sent immediately to the public accounts committee. The time for the discussion, under the rules of the house, would be when the report of the committee came back. Hon. gentlemen would have had all the time they wished at that time to discuss the matter. No one knows that better than my hon. friend.


Robert James Manion: No, I do not know any such thing. The time to discuss it was the present time, if we desired to discuss it. That report was the result of a thorough investigation.


William Lyon Mackenzie King: After voting twice against the motion, my hon. friends turned around and supported the motion.


Robert James Manion: I did not vote against it. I voted for our own amendment, that is all.


William Lyon Mackenzie King: Each house manages its own affairs. It is part of my obligation, and I do it in no critical way, but from a sense of duty, to point out some of the circumstances governing this situation, which are responsible for the rules of the house being what they are. The rules of the house are to protect all hon. members, and by following them carefully and literally we shall get along much further with both private and public business. What I wish to make perfectly plain at this moment is that the government have been sent here by the people of Canada to carry on the business of the country, and the first duty of parliament is to get on with that business, no matter what anyone may say or wish. When private members, whether through resolutions or any other circumstances whatever, occupy the entire time of parliament so that it is impossible for the government to get on with a single measure, then I say the time has come for the government to take such action as is necessary and imperative to see that it can get ahead with the public business.
I have no desire to be arbitrary in this matter. If it will assist in restoring a sense of cooperation at the present time I have no objection to changing the date in this resolution from the fifteenth to the twenty-second. I think, however, that is as far as we should go at the present time. Monday still remains for a consideration of private members' resolutions. I have before me a record of the number of Wednesdays that elapsed in other sessions before the government took over that day, and I find several years in which there were only four. The record is as follows:
Days
1931..
1932..
1933..
1935.	.
1936.	.
4
5 3


William Lyon Mackenzie King: Another thing I wish to point out. There are two houses of this parliament, the Senate and the House of Commons. The cost of carrying on the work of parliament relates to both houses. Now thus far this session the senate, through no fault of the government, has had no legislation at all from this house. We have been unable to send any legislation across to the other house. They are adjourning again, waiting for legislation from this side. Private members' resolutions do not go to the other house.


Robert James Manion: Why not start a little business over there as well as here?
And so it goes.


Alan Webster Neill: But in no ease has Wednesday been taken away before we ever had a single day's discussion.


William Lyon Mackenzie King: I have not gone through Hansard to see, as my hon. friend will probably understand. But may I point out that when the government does get on with its own business there is opportunity at those times, as has been pointed out. for private members to discuss many of the matters contained in their own resolutions, matters which are of great nublic
Precedence

for Government Business
concern. There is nothing which restricts private members from debating every question of government business.
My hon. friend speaks of the number of resolutions and says many of them will not be reached. When we find difficulty in discovering a proper procedure under our own rules we very often go, in fact it is one of the rules that we should go to the parliament at Westminster and see what procedure is followed there. What is done at Westminster with regard to private members' resolutions? Do they try to run through all that appear on the order paper and debate every resolution? They do not. They have a ballot; a limited number of resolutions are selected by ballot, and those are the only ones permitted to be taken up. If the rules and practices at Westminster were studied you would see wherein the present administration has been, if anything, more than lax in not insisting before this on the right of the government to get under way with its own business. It is not with any desire to curtail the opportunities of private members that I am asking the house to accept this resolution with the date amended to the twenty-second; it is simply because I know only too well that before this parliament ends every hon. member will be anxious enough to get through with government business as rapidly as possible.


Henry Herbert Stevens: I certainly must correct the Prime Minister (Mr. Mackenzie King) in some of his statements. Let me say to him at once that I do not object very seriously to the practice of taking away Wednesday some time after the session has moved along and an opportunity has been given for the discussion of private members' measures, and later in the session taking away Monday, as is usual. But in the present instance I do not think the right hon. gentleman has been quite reasonable in his attitude.
In regard to last Friday, the government had on the order paper a bill regarding pensions, one with respect to fisheries, a resolution concerning the granting of $100,000 to the city of Ottawa, a resolution regarding the penitentiaries commission, a resolution concerning technical education, and I think also the resolution regarding the national film board. These were all before us on the order paper; they were reached; any one of them might have been called. The Minister of Pensions and National Health (Mr. Power) had his bill under consideration for some considerable time and then the discussion was adjourned because of questions that were put to him from his own side as well as 
from this side of the house. The minister, I think quite properly, let certain clauses stand, but there was no obstruction or difficulty; substantial progress was made. Then the resolution of the Minister of Finance (Mr. Dunning) with regard to authority to appropriate $750,000,000 was discussed and adjourned by the government. We could have gone on with that if the government had wished so to do. All these measures were there to be gone on with, last Friday.


Robert James Manion: The government was not
ready.


Henry Herbert Stevens: Not only that; in other
years I have seen it happen in the early part of the session, when the government business was not ready, that we would go right through the order paper to private members' resolutions. The Prime Minister repeatedly said that the government had been prevented from getting on with its own business. Control of the house is always in the hands of the government, and from my recollection that was never more so than it is to-day, having regard to the government's huge majority. The Prime Minister asks what we would have thought if they had suggested adjourning the debate on the address after passing the resolution at the commencement of the session that it should take precedence over all other business. That is the regular resolution, but it was not necessary. Four or five years ago we debated the speech from the throne over a period of weeks but as an ordinary item on the order paper, without a resolution establishing precedence.


William Lyon Mackenzie King: Did my hon.
friend approve of that?


Henry Herbert Stevens: I did not; generally
speaking I prefer the present method. But there was nothing at any time to hinder adjournment of the debate by the government for the purpose of taking up any other matter. Certainly there was nothing to hinder adjournment of the Bren gun discussion at any time and the taking up of other orders of business. I want to make it abundantly clear that on Friday night the government were not prepared to go on with their business and that so far as we were concerned, there were five or six items which could have been proceeded with. We were quite willing to go on. In fairness to the Minister of Justice (Mr. Lapointe) I must add that I believe there was a sort of understanding on Friday between the whips that the house should adjourn at six o'clock.
Now that the Prime Minister takes the attitude he does I think we should make it perfectly clear that had any such wish been

Royal Visit
expressed by the government we would have been quite willing to proceed with the business. My hon. leader was not here but I know that my colleagues and myself would have gladly agreed to go on. I am not reproaching the government for what it did, but I do say the Prime Minister is not treating the house fairly in seeking to lay the onus for all this on the shoulders of those who sit on this side of the house, because there was an abundance of government measures to proceed with had they so desired.
As to the suggestion that we are to have supply backed up until the end of the session, once again that is in the hands of the government. During the coming months they may do as they wish in connection with supply; and to say, after the house has been sitting for four or five weeks, that there is any question about the discussion of supply is drawing a pretty wild bow.
I suggest to the Prime Minister that it is not reasonable to ask this. He has consented to let the motion stand for a week. I think it would be quite proper to question it even then, because under the rules there is plenty of opportunity for government business to be proceeded with.


Thomas Langton Church: Mr. Speaker-


Walter Edward Foster: The hon. gentleman has
already spoken on the motion.


Thomas Langton Church: I have just a brief question. Would the right hon. gentleman kindly give consideration later to the various suggestions advanced to-day with regard to the appointment of a small committee to revise the rules of the house concerning these matters and the functions of private members. As Edmund Burke says, "a private member is the connecting link between the government of the day and the electorate, and when he ceases to function, parliament is at an end."


William Lyon Mackenzie King: I shall be glad to consider the suggestion made, and also to see what Edmund Burke says.
Motion as amended agreed to, on division.



ROYAL VISIT TO CANADA


[Stage Direction]
On the orders of the day:
Thomas Langton Church: Mr. Speaker, I should like to ask a question of the Postmaster General (Mr. McLarty) of which I gave notice yesterday. My question is with reference to the visit of their majesties,
and with reference to certain publications which appear on news stands and reading rooms throughout the country. I refer directly to Scribner's magazine of February 11. particularly to page 16, a copy of which I gave to the Postmaster General yesterday. In that publication there is a statement that our king is a usurper, that he was a weak personality and only on probation, and that he is not the legal occupant of the throne. The article makes use of many other epithets which I know every Canadian would resent. Further, the text of the article was sent to Canada in a dispatch of a United States newspaper group, and was published in many Canadian daily papers.
Under the rules of the House of Commons no member may speak disrespectfully of his majesty or of any member of the royal family; yet periodicals, which have been commented on in England, are circulating here. Scribner's went farther in this article and published a lot of pictures from the Chicago Tribune-a mere invention.


Walter Edward Foster: Order. I would ask the
hon. member to put the question directly to the minister.


Thomas Langton Church: I should like to give the
name of the author of the article. His name is Joseph Israel II, a publicist agent, with offices in the Empire State building, New York City. I would ask the Postmaster General to look into these articles and to prohibit them throughout Canada, as has been done in England. The king is beloved, and in time will equal his father in real qualities as a ruler.


William Lyon Mackenzie King: May I answer the hon. member? The Postmaster General (Mr. McLarty) was in the house a moment ago, but is not in his seat at the present time. I shall direct his attention both to the question and to the speech of the hon. member.



REPORTED INVESTIGATIONS BY MOUNTED POLICE RESPECTING PAST CANDIDATES FOR PUBLIC ( FFICES

[Stage Direction]
On the orders of the day.
Mr. J.S. WOODSWORTH (Winnipeg North Centre): In this evening's Ottawa Journal appears a news item which is rather perturbing, as follows:
Special representatives of the R.C.M.P. are engaged in various parts of the country where the king and queen will visit checking up persons who have run for public offices in recent years, according to information given to the Journal. It is believed the purpose is to
Bren Gun Contract
[Stage Direction]
be posted on certain candidates whose election speeches and activities indicated view's of an extremely radical tendency.
Some hon. MEMBERS:: Oh, oh.


James Shaver Woodsworth: Hon. members laugh, but I suggest there is something here which is rather serious. I can quite understand that their majesties' persons must be protected, but this does not seem to relate to that. I am asking the government if instructions have been given to check up people because of their political views, and especially people who in the past have run for public office. I cannot quite understand it, and I think we ought to have a statement.


Right Hon. ERNEST LAPOINTE (Minister of Justice):: Mr. Speaker, I suppose I shall take the remarks of the hon. member as a notice of motion, and will inquire about what is at the bottom of it. I can assure him however that he will not be among those over whom supervision will be exercised.



BREN MACHINE GUN CONTRACT


[Stage Direction]
On the orders of the day:
Robert James Manion: Mr. Speaker, I should like to ask a question of the Minister of Justice (Mr. Lapointe). In view of the Bren gun contract debate, which concluded last evening, and in view of the statement of the costs of the inquiry as being, up to February 1, about $15,000, is it true, as stated in the Ottawa Journal of this morning, that L. A. Forsyth, K.C., of Montreal, one of the assistant government counsel in the inquiry, has submitted an account at the rate of $200 per day and expenses, amounting to $10,000?


Ernest Lapointe: I will make the same answer to the hon. member.



REQUEST FOR TABLING OF CABLEGRAMS REFERRED TO IN DEBATE

[Stage Direction]
On the orders of the day:
Charles Hazlitt Cahan: Mr. Speaker, I should like to ask the Prime Minister (Mr. Mackenzie King) if he will have laid on the table of the house the originals or copies of the two cablegrams which were read last night by the hon. member for Selkirk (Mr. Thorson).


William Lyon Mackenzie King: Mr. Speaker, I am afraid

the hon. member has not in mind just what was read. It was not a cable. I think the document to which the hon. member refers was a statement prepared by the deputy minister of national defence.


Charles Hazlitt Cahan: No; I had in mind those
referred to and quoted at page 892 of Hansard. One was a reply from the war office on a certain day, and then apparently there was another reply from the war office on another day. Both are quoted, but only in one instance is the date given. The documents are not placed before us so that we can understand their relationship to other documents exhibited before the commission of inquiry.


William Lyon Mackenzie King: May I say
to the hon. member that all the documents were placed on the table, and the ones he refers to must be among the number. They are exhibits.


Charles Avery Dunning: They are exhibits of the inquiry.


Charles Hazlitt Cahan: They do not purport to be exhibits.


Charles Avery Dunning: Yes, certainly; they are
numbered in each case.



LABOUR DISPUTES


[Stage Direction]
On the orders of the day:
Mr. M. J. COLDWELL (Rosetown-Big-gar):: Mr. Speaker, may I put a question,
of which I gave notice, to the Minister of Labour (Mr. Rogers), and in his absence to the government? In view of the strike of the employees of the Dominion Tire Company on February 8, which was joined yesterday by the employees of the Merchants Rubber Company, both of Kitchener, Ontario, I desire to ask the government whether they have been requested to use their good offices to negotiate in this matter, or have offered to mediate, and if so what replies have been made or received?


William Lyon Mackenzie King: I am afraid I cannot
answer the question at this time. The Minister of Labour (Mr. Rogers) is not now in the house. No doubt he will be able to give the hon. member an answer to-morrow.

______________________________SeedGrain-Mr. Doughs (Weyburn)
german allegiance



DIPLOMATIC ASPECTS OF APPEAL TO CANADIAN CITIZENS FOR RELIEF ASSISTANCE

[Stage Direction]
On the orders of the day:
Mr C. G. MacNEIL (Vancouver North):: 'll. Speaker, I should like to know if the house is aware that an appeal for the German national winter relief fund has been issued by the German consulate in Vancouver to Canadians of German origin, urging them to give tangible proofs of their unity with the homeland, and their support of the reunification of Austria and the Sudetenland with the German Reich. If so, does the government intend to deal with this action as a violation of diplomatic privileges?


William Lyon Mackenzie King: Mr. Speaker, I shall have to look into the question of the hon. member to see what is involved or implied before making a reply.



DISTRIBUTION OF SEED GRAIN IN WESTERN PROVINCES-STATEMENT OF MR. T. C. DOUGLAS

[Stage Direction]
Hon. CHARLES A. DUNNING (Minister ot hinance) moved that the house go into committee of supply.
Mr. T. C. DOUGLAS (Weyburn) Mr. Speaker, before you leave the chair I desire to bring up a matter which is of vital importance not only to the people I represent but also to thousands of others who live in the drought areas of western Canada. I have no wish whatsoever to hold up supply, and I shall take only a few minutes to present to the house what I believe to be a matter of urgent public importance. I refer to the need for relief seed in those areas of western Canada where, because of drought, rust and grasshoppers, the farmers will not have sufficient seed to sow their crops this spring.
I am aware of the fact that the distribution of seed comes within the jurisdiction of the provincial governments. But I am also aware of the fact that during the past two years this parliament has passed a seed grain bill placing a federal guarantee behind loans for the purchase of seed in western Canada. Parliament has thus indicated its interest and its responsibility in the matter.
On January 27 of this year, as reported at page 380 of Hansard, the hon. member for Qu Appelle (Mr. Perley) asked a question of the government with respect to its intention
in this matter for the present year. The Minister of Finance (Mr. Dunning) replied that no request had come to him for assistance in connection with the financing of seed grain purchases. I do not think the provincial governments, and especially the government of Saskatchewan, will be able to finance relief seed this spring, without federal assistance. I cannot but think that the Minister of Agriculture (Mr. Gardiner) has already discussed this matter with the western provincial governments. He must have some policy in mind regarding this important subject. It is because I should like to have him enunciate that policy at this time that I bring the matter to the attention of the house.
There are only three matters I should like to place before the government, the first of which concerns the urgent need for governmental assistance in connection with procuring seed for the farmers in the drought area this coming spring. It is a well known fact that the provincial governments, and particularly the government of Saskatchewan, are not themselves in a position to finance relief seed. Unless assistance is forthcoming from the federal government farmers either will have to procure their own seed, which means that many of them will not have seed, or will be compelled to go to the loan and mortgage companies for financing, a procedure which in my opinion would be a disaster in the extreme.
Last year a municipal secretary treasurer in my constituency showed me a note which had been sent to him by a mortgage company for a certain farmer to sign and return, for seed which they had supplied. The farmer signed the note at the rate of $1.70 per bushel for seed which he received at a time when wheat could be procured at the elevator for 74 cents per bushel.
Mr. ROSS (Moose Jaw):: What kind of wheat?


Mr. DOUGLAS (Weyburn):: I am quite prepared to admit that it was probablv better wheat. It was Thatcher seed.


John Gordon Ross: I sold it for $2 a bushel last year.
. Mr. DOUGLAS (Weyburn): I am not interested in what the hon. member sold it for. I am simply pointing out that last fall this man received an average of 54 cents per bushel for his crop. In other words, he had to bring back about three bushels for every bushel he had received. If the farmer is to be dependent upon the loan and mortgage companies for financing spring seed
922	COMMONS
Seed Grain-Mr. Douglas (Weybum)___
he will be left open to victimization and exploitation. I think the farmers of western Canada should be told now whether or not any action will be taken, either by this government in cooperation with the provincial governments, or by this government alone, to see that they have seed for the coming spring.
Secondly, I wish to impress upon the government the need for haste in supplying the farmer with seed. Last year on March 11, a resolution was placed on the order paper giving advance notice of a seed grain bill.
On March 21 it was withdrawn from the order paper, and on March 23 it was reintroduced. The matter was debated on March 25, and was finally passed with senate amendments on April 4, fully a month after the farmers should have had the seed on their farms.
I am not saying this in any spirit of criticism; the thing has passed and there is no use in rehashing the matter, but I would remind the government that to all our requests for haste last year we were met constantly with the reply that the seed was at strategic points and could be given out on a few days' notice. We know now that in some districts the distribution was three or four weeks late. In one town in my own constituency the seed was distributed as late as May 8. Many farmers who lost their crops through rust and grasshoppers are absolutely convinced that they would have had some crop had they received their seed three or four weeks earlier. Let me draw to the attention of the government, particularly of the Minister of Agriculture (Mr. Gardiner), the fact that in six weeks from now the farmers will be getting ready for seeding and in eight weeks they will be on the land in some districts in Saskatchewan. At this time a declaration of policy ought to be made by persons in responsible positions.
The third matter I wish to place before the government is that facilities should be set up to enable farmers who have seed of a non-rust-resistant variety to exchange it for seed of a rust-resistant variety. Last fall it was stated repeatedly in western Canada that Thatcher wheat was being held throughout the west so that practically all farmers would be able to get it this spring. I hope that is so. If it is so, the Minister of Agriculture or the Minister of Finance ought to tell the people what facilities will be available, and how soon. Prompt action is necessary in this regard. If grasshoppers and rust are to be the menaces this summer that they were last summer it is very necessary that the farmers 
who have not rust-resistant seed should be able to exchange it on a bushel for bushel basis.
I urge the minister to make a statement to-day which will relieve the anxiety of the people in the drought areas of western Canada. All kinds of rumours are flying around. People write to tell me that they are sure they are not going to get seed. People are hearing different stories and they are not sure of the policy of the government. For instance. I came across the following statement in the Western Producer of February 2, 1939:
No Provision for Seed Yet
Taggart Charges Farmers did not Make Effort to Repay '38 Seed "There were too many farmers last fall who paid everyone else from their harvests and leit the rural municipality and the government holding the bag on seed gram loans.
"This year the municipality should let the individual know it is up to him to scratch up his own seed," said the Hon. J. G. Taggart, minister of agriculture, to the convention delegates of the central rural municipalities association meeting at Regina last -week. Out ot $18 000.000 loaned in Saskatchewan for seed, of which only $3,500,000 was not guaranteed by the dominion, farmers repaid only about $250,000," he said.
"So far," he added, "no arrangements ;have been made for 1939 seed grain financing.
That statement has caused widespread dismay among many farmers m my constituency, as well as in the surrounding constituencies. These farmers have not the seed necessary to put in a crop this year. Seeding is close at hand and many of these people are destitute. Their only hope of economic recovery is to obtain seed. With the prospects of _ a half decent crop they may be able to regain some measure of economic security.
I ask the government three questions. First, are they going to make provision for seed? Second, can there be some haste in the supplying of that seed so that it will be out in time? Third, will there be facilities to enable farmers to exchange non-rust-resistant varieties of seed for rust-resistant varieties, possibly on a reasonable basis such as bushel for bushel? I hope the government will make a statement through the Minister of Agriculture and assure the people of western Canada that this parliament and this government have not washed their hands of the matter, but are prepared to accept the responsibility which is really theirs of seeing that people who through no fault of their own have no seed will be given the necessary seed to enable them to rehabilitate themselves during the coming year.
At six o'clock the house took recess.

Central Finance Corporation
After Recess
The house resumed at eight o'clock. PRIVATE BILLS



QUEBEC RAILWAY, LIGHT AND TOWER COMPANY

[Stage Direction]
Mr. CHARLES PARENT (Quebec West and South) moved the second reading of Bill No. 8, respecting the Quebec Railway, Light and Power Company.
Some hon. MEMBERS:: Explain.
Mr. CHARLES PARENT (Quebec West and South) moved the second reading of bill 8, an Act respecting The Quebec Railway, Light and Power Company
He said: (Translation) Mr. Speaker, the object of this bill is to clarify section 8 of chapter 59 of the Statutes of 1895 by adding thereto subsection 2, authorizing the company, among other things, to operate auto buses in the territory which it now serves.
Although I am of opinion that section 8 of chapter 59 of the Statutes of 1895 does empower the company to operate auto buses, some lawyers consider that the clause is not sufficiently explicit and that it would be well to clarify it by specifying the powers granted to the company, as is done in the bill.


Hon. C. D. HOWE (Minister of Transport) (Text):: I know of no objection to this bill, and my officers have none. In view of the fact that it is of public interest I am willing that the bill should be read a second time and referred to the standing committee on railways, canals and telegraph lines.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the committee on railways, canals and telegraph lines.

[Stage Direction]
Mr. V . G. MACDONALD (Brantford City) moved the second reading of Bill No. 20, respecting Central Finance Corporation and to change its name to Household Finance Corporation.
Thomas Langton Church: With reference to this bill, I should like to point out to the hon. member who moved the second reading that the principle involved in it was considered last session by the committee on banking and commerce. They made a report to this house, and the Minister of National Revenue (Mr. Ilsley) introduced a bill of a general character which would govern these private companies' bills and regulate their rates to two per cent per month. This general bill was read the first time and laid
over. I should like to ask the minister whether he intends to introduce that bill again, and what is the present policy of the government this session regarding these small loan companies. In these times of depression the people cannot pay the high rates of interest charged by these companies. They have no credit with the banks because they have no security, with the result that small industrial workers are compelled to go to these loan companies, to pay fabulous sums of money, and often have to borrow from friends and relatives to help pay the Shylock interest rates on their loans.
I have received several hundred communications or ballots about an address made the other night on the radio by a fine citizen of Toronto, asking what we, as private members, are going to do about over-government and over-taxation and to help conditions for the workers. Other members must have received dozens of similar letters. Some of them are from the very people who are affected by these companies, and who have been forced out of their homes through the foreclosure of mortgages. I have seen the operations of one or two of these companies in the city I come from, and I am astonished that they come to this parliament to get charters and franchises and are given power to lend money on chattel mortgages, bills of sale and lien notes.
Not. by the wildest stretch of the imagination can these particular private bills of 1927, 1928 and 1929 be considered to be for the general advantage of Canada or within federal jurisdiction. Yet they come to this parliament, and they have got so many bills passed regarding this type of loan that I wonder what the provinces are doing, whether we have such a thing as property and civil rights in the provinces to give them control over this class of business. I should like to hear from the government what is to be its policy this session as to the general bill of 1938, which as I understand will provide some control as to rates over these companies when they are incorporated. Two per cent per month would be a universal rate, but an exoibitant one, when we consider how much money is hoarded in Canada, drawing no interest.
This matter was considered by the committee on banking and commerce of the senate, and a very valuable report was made last session by our own banking and commerce committee after a large number of prominent financial experts from the United States and elsewhere had gone most thoroughly into the matter. This bill might very well stand on the order paper until the government lays
Central Finance Corporation

down what is to be the policy regarding a general bill. Will the general bill of 1938 cover all these companies or not?
As regards this bill No. 20. I can assure the hon. member for Brantford City (Mr. Macdonald) that, on account of my respect and esteem for him personally, I should like his bill to go through without any opposition as far as I am concerned, but I cannot see my way clear to support the second reading until the general principle has been laid down, because for twelve years I have opposed all these small loan companies and their rates and methods.
This bill is intended to change the name of the corporation to Household Finance Corporation. Of course they want to change the name. This company has been doing business right in the city I come from. I know of some of the loans which have been made to industrial workers there, and well they might want to change their names-these shark loan companies which are charging such a huge rate of interest. After the very conclusive evidence given by various experts, the time has come for Canada to stop granting any more of these charters, to cancel some of them, and to send these people to the provinces where they properly belong to get whatever charters the provinces will give them.
I may say so far as this particular bill goes that I was in the house when this company got the franchise, and I opposed the franchise. The term "shark loan company" was first applied by me in the discussion of that particular incorporation, which was away back in 1928 or 1929. We were then in opposition, and the opposition took very strong grounds against bills of this kind. It was charged by our late leader that these were matters concerning provincial rights, inasmuch as no doubt they have up here such influence as to take their charter out of the jurisdiction of the Interest Act and of the Loan Companies Act and of the Usury Act. These companies have taken themselves out of the limits of those three general statutes in order to come under federal jurisdiction, and have created a law unto themselves to charge anything they like; they are under no restrictions at all.
I can see no good reason why this bill should be read a second time. I wish to know from the Minister of National Revenue if he is going to introduce his bill of last session, which was recommended almost unanimously to the house by the committee on banking and commerce. If so, when will the bill be introduced, and will it provide some regulation of these companies?
I see that the Minister of Justice (Mr. Lapointe) is here to-night. I am glad to see

him here. For much of the time since I entered the house in 1921 he has been presiding most ably over the justice department, and in common with every other hon. member I wish to congratulate him on the thirty-fifth anniversary of his outstanding services to his. fellow man. He has been a wise custodian of public rights and of legislation for the benefit of the working people of this country, and is a statesman beloved by all. While the Minister of Justice is not supposed to give, as a minister, legal opinions to the house, I submit that since he is leading the government to-night, he ought to let us know what will be done with the report of the banking and commerce committee last session regarding the small loan companies, and whether some restrictions will check these small loans to workers.
Hon. J. L. ILSLEY (Minister of National Revenue); In the first place I should like to point out that this is a matter for the Department of Finance rather than for the Department of National Revenue. In the second place, I think it is usual for the government's policy on these matters to be announced from time to time as and when the occasion requires, and I am afraid I cannot give the hon. gentleman any further and better answer than that to-night-that the policy of the government in regard to this matter will be announced in due course. The immediate necessity is to decide what to do with this particular bill, and I understand that the sponsor of the bill is moving that it be referred to the banking and commerce committee, as is usual with measures of this kind.


Major James William Coldwell: This is a private bill dealing with only one company. Last year we had a number of these bills before the banking and commerce committee, and it was fairly well understood at the time that that committee would consider the principles underlying such bills and report to the House of Commons with a view to general legislation. I believe that there are evils in this small loan business which should be eliminated by this parliament and I am still of the opinion, as I was last year and the year before, that we should not now deal singly and separately with bills of this sort, but should again deal with the principle of the matter and endeavour to arrive at general legislation with regard to companies of this type. For that reason I am going to oppose this particular bill, though I would say that from the evidence produced before the committee there are companies in Canada which are not doing business in the manner

Central Finance Corporation
in which this company is; and while perhaps in opposing a bill with respect to a company which may be giving better service than most of the other companies, one may be doing something that appears to be discriminatory, nevertheless I hold that the principle is greater than the individual case and that we should try at the outset of this session to arrive at some general legislation dealing with all the small loan companies subject to our jurisdiction, adopting a principle upon which such general legislation can be based. For the reason I have stated, I am opposed to the bill.


Mr. VITAL MALLETTE (Jacques Cartier) (Translation):: Mr. Speaker, the committee on banking and commerce, of which I am a member, studied all these bills last year as well as in 1937. The house is aware that following prolonged deliberations and a careful study of the question the committee intended to ask the Minister of Finance (Mr. Dunning) to bring in a general bill applicable to this company as to all similar ones.
On those occasions we were chiefly preoccupied with the rights of the provinces, for among the experts heard by the committee were representatives of Ontario, of Quebec, of Alberta and also, I believe, of one of the maritime provinces. The committee was unanimous in wishing to safeguard provincial rights. In fact that is what prolonged the discussions of last year. I therefore endorse the views of the two hon. members who preceded me, particularly my hon. friend from Rosetown-Biggar (Mr. Coldwell) who is one of the most active members of the committee. Like him, I think we should either send the bill to the committee on banking and commerce or hold it until the Minister of Finance brings in a bill of general application.


Mr. THOMAS REID (New Westminster):: I am opposed to the principle of the bill, but if it goes to a committee there is one thing which I think should be given serious consideration, and that is the advertisement that appears in newspapers and street cars under the name of this finance corporation, in which they say to the public something like this: "By special authority, rates of interest set by the dominion parliament." That is really saying to the public, "We have special authority to charge the rates we are charging, and therefore you are perfectly safe in doing business with us."
I do not believe that any company doing business as this company is should be allowed,
shall I say, to mislead the people in that way. My own view regarding these corporations is that instead of throwing a lifebuoy to people in times of stress they are really casting upon them an added weight which makes them sink deeper in the mire. It does not lift them out. I am voicing my protest against this legislation as I did last year.


Mr. VICTOR QUELCH (Acadia):: We in this group are absolutely opposed to the bill. The rate of two per cent per month is exorbitant. We realize, of course, that that includes service charges, but we do not think that this parliament has the right to legislate with respect to service charges. That is a matter for the provincial legislature. Our view is therefore that if the government wish to pass further legislation they should enact that the rate of interest shall be, say, ten per cent per annum, and leave it to the provinces to cover the question of service charges. For that reason we are opposed to the bill.


Henry Herbert Stevens: I think the government should disclose its attitude towards this class of legislation. It is unfair to turn down this bill and the other one of the same type which is on the order paper, in the absence of some declaration to the house as to the policy of the government towards legislation of this sort.
It is known in this chamber that I have opposed this sort of legislation for many years -not that I oppose the requests of this and other companies, but I am opposed to the principle of establishing a rate of twenty-four or twenty-seven per cent per annum for loans, putting the imprimatur of parliament upon that rate. I have taken that position for twenty-seven years. The first time I expressed that view was in 1912 when I sought an amendment to the Interest Act and what was called the Money Lenders Act at that time, and I have consistently taken the same position ever since.
This, I believe, is the fourth session that this and similar companies have been before parliament, but during the last two or three years, particularly last year, there has been a disposition on the part of the government to introduce general legislation covering the matter, and this company and the other company mentioned in Bill No. 21 held back for a certain time in the expectation that the general law would pass. Had the general law passed, they were not so particular except for a change of name or something of that kind; but some of these bills have been prepared so that they may have this power to charge two per cent per month in the absence of general legislation.
Central Finance Corporation

I suggest that the government ought to come forward frankly and say whether or not they are going to introduce again the legislation which was the result of two sessions of hearings before the banking and commerce committee of this house and also in one year before the banking committee of another place. The government should frankly declare its position on the matter.
There are two classes of borrowers that patronize this sort of loan company-and these companies themselves so inform me. There is what I would call the class A borrower, whom I shall describe in a moment, and this embraces the larger number. There is also the class B borrower, the smaller class. The class A borrower is the salaried person or some person with a known and fixed income, who temporarily has suffered reverse through illness in the family or perhaps some serious operations that call for extraordinary expenditure-the sort of person who the company knows is good. That class of borrower must pay the two per cent per month which really is applicable only to the second class. The second class comprises those who find themselves in difficulties through improvidence or carelessness, or, as often happens, probably through playing the race track or the stock market. It is not fair that the class A borrowers, who they know are good, with whom the records and evidence showed there was only a fraction of one per cent loss, a fraction so small that we were all surprised at it, should be penalized because there is a larger risk on the more improvident and careless borrowers whom I have included in class B.
For that reason I have taken the stand that we need in Canada facilities to enable the bona fide salaried man, with an assured income, a position and good character, to get money in cases of emergency on much easier terms, say seven per cent or something of the kind. It is true that one of the banks has already started a personal loan department. I believe that the government-I say this to the government as an institution, and not in any critical sense-might very well call in the bankers and see if they would not take up that line of business as a part of their duty to the country. I know they do not wish to do it, because it is small business, not very profitable, it may be; and perhaps they consider it a little beneath their dignity. But there ought to be provided in the urban districts the kind of legislation that we have in the rural credits act. Unfortunately the rural credits act, passed I believe in 1925, does not function, I think through lack of administrative interest in it on the part of this and previous governments. But this class
[Mr. Stevens.)
of legislation, properly enforced, and with the support and interest of the government, might very well become an extremely useful form of assistance to needy borrowers.
Having said that much I want to make it clear that in spite of all my opposition to these measures, which at times has been definite and perhaps heated, I do not think parliament should just crowd them out or refuse to consider them. In justice and fairness we must listen to the requests of any body of people who are within the law. These people are within the law. They are within their right in coming to parliament, and I am not going to oppose the second reading of these bills. But I want to place on record my attitude and views in connection with this matter and to urge upon the government that either before these bills have second reading or before they are finally disposed of we have the assurance that the government will during this session introduce such public measures as may be necessary to deal with this very important question.


Mr. DANIEL McIVOR (Fort William):: These bills are a pair of twins, and each year they have been up I have registered my opposition to them. I have been one of those who advocated the lowering of interest rates and urged that the dominion government take the lead in that respect. We have now pretty well got that, and I do not see how we can open the other door and allow private corporations or any particular group of people to charge interest at the rates these people expect to get. I know a man who this summer paid $500, all but $40, for a piano, and he was not able to raise that $40, so he lost his piano and his money, with merely the promise that perhaps he would get a better rate next time. I have nothing but contempt for a corporation which, finding a man up against it in his endeavour to hold property of some kind, professes to be his friend and lends him money at a rate of interest that it is impossible for him to pay. That is selfishness run wild.
I have been asked why I was so strongly opposed to these corporations. It is because I have seen these people completely up against it and unable to pay the piper that I determined that if I ever got the opportunity I would hit this thing as hard as I could. If this bill goes to the committee it is all right, but if it is to go through now I shall oppose it as strongly as I can.


Mr. R. W. GRAY (Lambton West):: Bills similar to this, as pointed out by the hon. member for Kootenay East (Mr. Stevens), have been considered by the banking and commerce committee for a number of years.

,	Central Finance Corporation
Some years ago I opposed the granting of a charter, but if I understand aright the bill now introduced by the hon. member for Brantford City (Mr. Macdonald), the rate of interest provided therein is as was recommended last year by the committee on banking and commerce. Whether or not there is general legislation introduced this year dealing with the matter, these people for the last two years have come in good faith to this parliament, presented their bills and given their evidence before the committee, and it seems to me that no harm can be done in allowing the bill to go again to the banking and commerce committee.
I agree with the hon. member for Kootenay East that the time has come when general legislation should be introduced covering matters of this kind. There is a great deal to be said for legislation covering all these small loan companies. At the same time I believe it would be a mistake to defeat this bill on the motion for second reading. The bill has been presented in the form approved by the committee, and surely no harm can be done in allowing it to be referred; it can be decided in the committee whether it will be proceeded with or whether general legislation shall supersede it.


Mr. YOUNG:: If this bill went to the
committee would there be new evidence submitted this year beyond what was given last year?


Ross Wilfred Gray: I cannot say. I doubt if
much evidence could be submitted beyond what was given last year.


James Shaver Woodsworth: I think we all recognize
that it is on the motion for second reading that the principle of a bill is decided upon, not in committee; that is where the details are supposed to be dealt with. I believe it is two years since the government promised us that we should have general legislation on this matter. Only this afternoon the Prime Minister (Mr. Mackenzie King) was urging upon the house the responsibility of the government for carrying forward the affairs of the country. In this instance the government is distinctly responsible. And while, as my colleague behind me has said, I do not like voting against a particular measure in order to stop the general practice to which objection is taken, I see no other way of stopping it than by opposing it at this stage. The responsibility then is not upon the house; it is fairly placed upon the government, and they can bring down their general legislation.
It is all very well to say that this company has come in good faith to parliament; of course it has. Any group of men can come to parliament with various proposals, but it is for the house to say whether or not the principle underlying them is good. I do not see what else we can do at this stage than oppose the principle of the bill. We hope that before very long the government will introduce general legislation covering this matter.


Ernest Lapointe: I hesitate to speak on this question, as the minister in charge of this branch of government business is the Minister of Finance (Mr. Dunning) who to-night is unavoidably absent. I may however remind the house that if this bill is defeated the situation will remain as it is to-day. If I remember correctly, when a similar bill was discussed last year it was pointed out that whatever may be the demerits of the carrying on of business by such corporations, if this bill be adopted it will constitute a great improvement on the present condition. I am not a member of the banking and commerce committee and I do not know what took place there last year. I do remember that when the bill came back it could not be put through because time did not permit. I agree largely with the hon. member for Kootenay East (Mr. Stevens). I am opposed to anybody, corporation or individual, charging an exorbitant rate of interest. I am free to confess that in my early years I was a victim of that sort of thing. But I do not see what harm would be done by again sending this bill to the committee, if it is really an improvement on the present situation. There it can be discussed and the Minister of Finance (Mr. Dunning) can be heard as to whether or not there will be a general act introduced covering this field of activity. As to that I am not in a position to make any statement on the part of the government.
Under the circumstances I would vote to send the bill to the committee, without binding myself to support it if it is reported back to the house, particularly should it have the effect of making permanent a situation to which we all object.


Mr. D. A. McNIVEN (Regina City):: I am opposed to this bill in principle. I believe the original mistake was made some years ago when these companies were incorporated and given special rights beyond the provisions of the Money-Lenders Act. It is very true that these two bills have been before the banking and commerce committee for the last two sessions, but it does not reflect very much credit upon us as a parliament that at this
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Central Finance Corporation

session we should be asked, by way either of special or of general legislation, to authorize a rate of interest of two per cent per month. If that is the only message we have for the people of Canada we cannot seriously complain if the people say it is too bad for us.
During the discussion last year we heard a great deal about the Russell Sage Foundation in the United States, which I understand is a very estimable institution and which has done a great deal of good work. But the remedies suggested by that foundation have not rectified the situation in the United States, and, that being the case, we can hardly expect them to meet with greater success here. I think we might well go to the banking institutions, which for a long period of years have received many concessions from the people of this country, and say that they should give greater consideration to this kind of business. I agree with the hon. member for Kootenay East (Mr. Stevens) that the banks do not care to handle this business, but I believe our banking institutions could not make a greater contribution to the solution of the problems that confront us than by catering to and serving the people who ordinarily would be customers of institutions of this kind. I believe our banks are prepared now, as they have never been prepared in the past, for business of this kind. In the last three years they have lent some $24,000,000 under the home improvement plan at a discount rate of 31 per cent, and I understand that so far the losses have been less than one per cent. I was talking with a banker who had lent a very considerable sum of money under this plan, and he expressed surprise that the business had turned out so satisfactorily. Not a single loan was in arrears; not a single dollar had been lost, and he said, " We of the banking profession are overlooking a very profitable field for investment. If we did cater to that field we would have a profitable outlet for funds that we have difficulty in investing at the present time."
I noticed also that in the deliberations last year, as the hon. member for Kootenay East mentioned, there was an attempt to distinguish between the kinds of borrowers. There was likewise an attempt to distinguish between the companies doing this business, with one referring to another as money sharks and loan sharks. For the life of me I cannot see any distinguishing feature between companies that charge 24 per cent or more. There is a remedy in the Money-Lenders Act, where interest rates are specified. If some detail is lacking in that act at present let us put teeth into that statute and meet the situation by

prosecuting those who are profiting through the difficulties in which unfortunate people find themselves.
Mr. KARL K. HOMUTH (Waterloo South): Mr. Speaker, it seems quite obvious that there is a great deal of opposition to this bill. There is no doubt, as the leader of the Cooperative Commonwealth Federation party has said, that if we send this bill to the banking and commerce committee we will adopt the principle. If there is one thing in which I believe the people of this country feel the government should give some lead it is this question of the curtailment of the interest that these companies charge. For three or four years the newspapers have been full of the discussion which has taken place both in the banking and commerce committee and in this house. I suggest that this bill be held up in order to permit the government to bring in some measure that will cure these evils. Or the banking and commerce committee might take up the question and recommend suitable legislation to the house. Surely we cannot pass this bill again and endorse the principle of usury which is practised throughout this country.
Mr. J. T. THORSON (Selkirk). A year ago I spoke on a bill which was introduced respecting this company. The subject had been carefully studied by the standing committee on banking and commerce, which was very greatly divided in its opinions. The objection which I raised a year ago, and which I repeat now, was that if we passed this bill authorizing a monthly charge of two per cent, we would do so under our authority to deal with interest rates. We have by the Money-Lenders Act set a maximum rate of interest of twelve per cent per annum, and it would be a mistake on the part of this parliament to give its imprimatur to a higher rate of interest than that. The objection which I took a year ago was to the lumping of the total charge. I suggested that we might, in the general legislation which was before us, require that the rate of interest, as such, should be stated; that it should not exceed the rate of interest now set forth in the Money-Lenders Act, and that the balance of the charge, other than interest, might be left to the provincial jurisdiction.
This of course is a bill amending the charter of a dominion corporation, and the objection which I have to the bill in its present form is that it lumps the interest part of the charge with that part of the charge which is not interest. That, Mr. Speaker, is in my opinion

Central Finance Corporation
objectionable. The rate of interest should be specified as not exceeding the rate now set by the Money-Lenders Act.
As the bill stands I shall feel it my duty to vote against the motion for second reading.


Mr. J. S. TAYLOR (Nanaimo):: Mr. Speaker, I feel that the government should entertain this whole question very seriously, and bring down legislation for discussion in the house. It seems to me that we have no right to stand at the back of those who would leech on the misfortunes of our people, and that is what these bills amounts to.
The suggestion of the hon. member for Kootenay East (Mr. Stevens) is very timely, and I find myself quite in agreement with the idea that the chartered banks could take this duty upon themselves. They may want to be high-brow about their work, but they are the manipulators of the currency and credit of this country. They are allowed to conduct their business as such, and this is directly one part of that feature of their work. It seems to me that in time to come if we are to leave the chartered banks in their present positions we shall ask them to undertake a great deal more work, not less, on behalf of the people.
I am definitely opposed to the principle of these bills.
Mr. A. MacG. YOUNG (Saskatoon): Mr. Speaker, last year when this or a similar bill was before the house it was sent to the committee on banking and commerce, where I understand it was given a great deal of consideration. I doubt whether if it went there this year any new facts could be elicited either for or against the bill, and it seems to me almost like a waste of time to send it to the committee again this year. No doubt there are persons who require or desire loans, in a small way, and who are prepared to pay a rate of interest higher than the banks charge. But so far as I am concerned I am definitely opposed to high rates of interest anywhere.
When this country pays above two per cent interest, I think it is too high. When the provinces pay a little more than that, perhaps, I think it is too high. When we are called upon by our banks to pay six, seven or eight per cent, I think it is too high. But when we are asked to pay two per cent per month-well, Mr. Speaker, I just simply cannot support any bill which follows a principle of that kind. I intend to vote against the motion for second reading.


Mr. NORMAN JAQUES (Wetaskiwin):: Mr. Speaker, as a member of the committee on banking and commerce it was my duty to spend a good many days listening to the evidence concerning these small loan companies. I hold no brief for them; I have never had to use them, and I hope I never will. But there are one or two points I should like to draw to the attention of the house.
I do not think it is quite fair to put down the rate of interest at twenty-four per cent per year. A man borrows $50 for a month, we will say, and at the end of the month he pays it back, the transaction having cost him one dollar. For thirty years I was in the habit of borrowing money from the banks, while carrying out my business as a farmer. I never paid	less	than	eight per	cent peryear, and in	the	very	nature of	things Inever could pay back in less than eight months. So	that	any	money I	borrowed
from the bank cost me six per cent, because I could not pay it back in less time.
There is this further point to consider: These small loan companies lend their own money, or money which first of all they have to borrow. The bank does not do that; it creates what	it loans,	and the	procedure
costs it nothing. It creates costless credit, and I think that is an important point for consideration.
Then, there is this further matter for consideration: When a small loan company forecloses on a client, in the nature of things it is a public exhibition. The security is put out on the street for all the neighbours to see. When a bank forecloses it is a silent, secret process. Not even a man's wife may know that her husband's security has been foreclosed. As a matter of fact the bank already has the security in its safe, and all that happens is that it stays in the safe and does not come out.
As I have said, I hold no brief for the small loan companies. But I was struck during the time I spent in the committee on banking and commerce with the treatment which these companies received. One might think that in a sense they were criminals. Of course a loan shark is a criminal, but I do not think we can say that a company conducting business at the rate of two per cent per month is committing a crime. However they received no respect whatsoever, while on the other hand the banks receive all the respect in the world.

Central Finance Corporation

I do not think that is fair. I believe that for every man who has been foreclosed and put out of business by a small loan company there are a hundred who have been put out of business and had their security foreclosed by our banks. That is all I wish to say on the subject, but I thought it my duty to bring these few points to the attention of the house.
I repeat that I have no brief whatever for the small loan company. I never have used one, and I hope I never will have to.


Mr. W. R. MACDONALD (Brantford City):: Mr. Speaker, first I should like to
express my appreciation of the very kind remarks made by the hon. member for Broadview (Mr. Church) about myself. I may say that I hold him in the highest regard and esteem. He was mayor of the city of Toronto for a number of years, I believe it was eight, during which time he gained the respect of the people of that city. Subsequently he was elected to this house, where he has gained the respect and admiration of all members. I am pleased to know that he will not support this bill for personal reasons. Far be it from me to want any hon. member, no matter how kindly he may feel toward me personally, to vote for any measure merely for personal reasons.
The hon. member for Broadview and other hon. members referred to the loan shark. In presenting this bill to the house for second reading I cannot express too strongly how I feel toward the loan shark. These people have been bleeding those who could not afford to pay. They have taken the small pittances of many working men, women and girls in order to swell their own coffers. I think all hon. members will agree with me when I say that something must be done to curb the activities of the loan shark. One hon. member has said, I believe it was the hon. member for Waterloo South (Mr. Homuth), that during this last year the newspapers have been demanding action by this government in connection with the curbing of loan sharks. As he and other hon. members know, last year the banking and commerce committee was requested specifically to deal with this matter. Numerous hearings were held and many witnesses were called from various provinces and from different states of the republic to the south. I have not the report before me, but I recall that a representative of the attorney general's office of Alberta, I believe it was the deputy attorney

general, appeared before the committee to advocate that the loan shark evil be curbed.
To-night the hon. member for Wetaskiwin (Mr. Jaques) stated that in his opinion some of these loan companies were not as bad as other so-called respectable institutions. He contended that they were less drastic in their methods than some of our financial institutions. Whether this evil is in the form of a great financial institution, a chartered loan company or an individual, it must be curbed. These activities cannot be allowed to continue. The newspapers of the country, led by that great national paper the Globe and Mail, have advocated in the strongest terms that action should be taken immediately by parliament. I recall reading an editorial in that paper toward the end of last session advocating that action be taken immediately, and that if it were too late, then the government should bring in a bill at the next session.
Numerous speakers this evening have said that legislation should be brought down by the government. We are in the early days of the session and I agree that legislation should be brought down covering not only loan companies that come here for their charters, but those which receive charters from the various provinces. The legislation should control all companies and individuals.
I hope my position in this matter will be understood. I want to control the rates of interest charged and to prevent excessive rates and unscrupulous methods being followed by individuals and corporations. Hon. members will remember that last spring a number of prosecutions took place in the Toronto courts. Certain individuals and companies were accused of charging not two per cent per month, but, if my memory serves me correctly, ninety-seven per cent per month. Evidence was presented last year to the committee on banking and commerce that exorbitant rates of more than one thousand per cent had been charged.


An hon. MEMBER:: Shame.


William Ross Macdonald: No wonder an hon. member says "shame." I join with him in saying "shame." That is the sort of practice which should be curbed. The incorporation of this company will be one method of preventing the charging of excessive rates of interest. It is one method of controlling the rates charged and the various activities of these companies.

Seed Grain-Mr. Perley



DISTRIBUTION OF SEED GRAIN IN WESTERN PROVINCES-STATEMENT OF MR. T. C. DOUGLAS

[Stage Direction]
The house resumed consideration of the motion of Mr. Dunning for committee of supply.
Ernest Edward Perley: Mr. Speaker, when the house rose at six o'clock I was about to associate myself with the hon. member for Weyburn (Mr. Douglas) in his request that the government should make a statement with respect to the distribution of seed grain in those areas in the west which happen to require it for the spring seeding. The hon. member recited to the house what had taken place last year when the bill to provide seed grain was before the house, and how we facilitated the passing of the measure. Hon. members will recall that when the house was in committee I was asking the Minister of Finance (Mr. Dunning) for certain information. The minister suggested that we should discontinue asking for information and facilitate the passing of the bill. We were told that we would later have an opportunity of getting the necessary information.
Although we facilitated the passing of that bill in good time, there was delay, as referred to by the hon. member for Weyburn, in the distribution of seed in some parts of Saskatchewan. I know of districts where seed was not delivered until after May 10. When it was not rust-resistant wheat that was seeded it was affected by the rust and subjected to the grasshopper infestation.


Donald Alexander McNiven: May 10 is a good time.


Ernest Edward Perley: It was very late for last year. At Easter time when we were home, seeding conditions were good and wheat should have been in the ground. It is estimated by those who are in a position to estimate that the loss sustained by the province, and producers in particular, owing to the lateness of the seeding, amounted to thirty to forty million dollars. The question is already agitating the minds of the western farmer; for we know that in many places it has been taken up at conventions and other gatherings of farmers. I have here a report in the Regina Daily Star of January 31:
Outlook for Provision of Seed Grain Gloomy.
No plans yet but late Announcement may be made.	.
Every bit of evidence on the question that can be picked up around the parliament buildings-
In Regina.
-points to a tough year for the Saskatchewan farmer who faces the coming crop season without seed.
71492-59J
Official statements on any plans for the distribution of relief seed the government may have in mind are singularly lacking. Honourable J. G. Taggart, minister of agriculture, from his seat on the floor of the legislative assembly room has bluntly stated the government is not in a position to make an announcement.
A little earlier than that, on January 26, is a report in the same paper of a request for early distribution of seed grain. The report is as follows:
Directors of the Saskatchewan Association of Rural Municipalities, headed by J. J. McGurran, secretary, met members of the government Wednesday to discuss resolutions passed at a recent meeting in Regina.
The directors asked the government to "immediately evolve" a policy of seed distribution, with provision for early delivery, with the price on a parity with market prices, plus "reasonable" distribution cost; that rust-resisting types be distributed at the same price the wheat board sells to millers, grades considered.
That shows, Mr. Speaker, that the farmers of the west are concerned and anxious, especially when what took place last year is fresh in their memories.
I might also remind hon. members that on January 27 of this year I asked the Minister of Finance if the government was giving any consideration to this matter and if representations had been made to them by the provincial government or any others in the west with respect to it; and on page 380 of Hansard the Minister of Finance stated that no request of which he had any knowledge had come to the government. In respect to that I was informed about January 15 or 16, by a member of a delegation that was in Ottawa meeting with the government, though not on this matter, that they believed that the Saskatchewan government had made a request for assistance in the amount of three and a half million dollars towards guaranteeing the banks, the province and the municipalities for distribution of seed this spring. I believe that my informant was a responsible person, and in a position to know; for he is associated with one of the largest grainhandling concerns in western Canada. The amount he mentioned would, I think, be adequate. It is about half of what was required last year for wheat alone. The present price at Fort William is about sixty-five cents as compared with $1.45 last year, and when one also considers that the area is not nearly as great this year, that amount should certainly be adequate.


Mr. GARDINER:: That is not half of what they had last year.


Ernest Edward Perley: For wheat, I think.
Seed Grain-Mr. Perley


James Garfield Gardiner: They had twenty-one million dollars last year.


Ernest Edward Perley: Yes, but that was for all grains.


James Garfield Gardiner: Most of it was for wheat.


Ernest Edward Perley: Well, I believe that the minister, who knows as well as I do the area which requires assistance this year, will agree that at the present price three and a half million dollars would be ample. I think farmers would be very well pleased if they heard that this government is prepared to guarantee that amount.
I think we should have had a report with respect to the distribution last year and who was responsible for the delay. We know that the provincial government and the wheat board have said that they were not responsible, and I have no doubt this government will make the same answer. Certainly the municipalities were not to blame, because they had their estimates in in good time, and it is due to this house and to western Canada to know where the responsibility lies.
Last year, speaking on this matter, I made the statement with respect to price that the wheat could have been delivered at SI.10 per bushel. I am still of that opinion. I followed the conversion of the option into the cash grain, and I was not refuted in my argument, which I think proved to be correct, that wheat could have been delivered to the farmer at SI.10.
I am very much disappointed with the price at which seed oats and barley were delivered last year. I regard 674 cents to the farmer as very unreasonable. A lot of the oats required for seed were imported from the United States at a time when the market in the United States was 304 cents for May oats, 42 cents for cash oats, and in the spring of the year the option never got above 33 cents. Allowing for the freight to North Portal and the further freight to the interior of the province where the oats were required, they could have been delivered at around 56 cents. It has never been satisfactorily explained why the charge to the farmer was 674 cents.
It seems to me that this year wheat should be delivered as the hon. member for Wey-burn has stated, on an exchange of bushel for bushel, a bushel of non rust-resisting wheat for a bushel of rust-resisting wheat. That is only fair, especially when we consider what the farmer paid last year. Certainly if the farmer is not in a position to exchange, and has to purchase, it should be delivered to him at the going price on the Winnipeg exchange.
{Mr. Perley.]
Taking the cash wheat at Fort William at 65 cents, that would net the farmer at the initial point about 55 to 60 cents, which would include the freight and the cost of distribution.


James Garfield Gardiner: Freight both ways?


Ernest Edward Perley: No, not at all. The minister knows I did not mean that. He knows enough about the business to understand I am referring to freight from one point in the province to the point where it is required.


James Garfield Gardiner: May I just point out, in order not to have the matter misrepresented, that if you want seed grain in a locality there is in all probability no seed there; there is no wheat there; and if the wheat is shipped to a central elevator and then shipped back to another elevator you have freight both ways on it.


Ernest Edward Perley: The minister knows quite well, I think, what I was saying and the interpretation to put on the language I was using. The cost of wheat at the elevator in which it is at the present time and what the board has paid for it would be 80 cents. The board is selling that wheat to the trade at 65 cents Fort William. When you take off the freight to Fort William and the cost of commission and so on, it would be about 50 cents in the interior where it is at the present time. Then add to that the freight which is required to take it from the place where it now is in the interior to the place where it is required for seed. I will allow 10 cents for that, 5 cents for distribution costs, and 50 cents, which is more than adequate, as the initial price, and we have 65 cent wheat. 1 think it is the duty of this government to see that the distribution this spring takes place at a fair and reasonable price to the producer requiring that seed.
The minister should also be very careful to see that the cost of the coarse grain seed shall be fair and reasonable. Oats have been delivered in the northern parts of the province at the elevators at from 11 to 15 cents a bushel, and of course there would be storage and cost of shipping from one point in the interior to the Other point requiring the product. I submit the government should see to it that the oats this year are delivered at not more than 30 cents a bushel, instead of at 67 cents as happened last year.
I do not think it is necessary to delay the house at this time. The minister is well acquainted with the facts and he should be prepared to make a statement and to introduce the necessary bill as soon as possible. Considering the experience of last spring,

Seed Grain-Mr. Gardiner
more questions will be asked and more information will be required than was the case last year. With the experience of last year, and knowing what happened as regards delay and cost and so on, I suggest that this government should undertake the supervision and distribution as well as the control of price and deliveries this year. The hon. member for Weyburn indicated the importance of the matter and I think the position of the western producer at the present time should receive serious consideration. He is very much concerned because this is the 14th of February and it takes quite a time to distribute the seed and clean it. The farmers should know where they stand and what will be done. When the bill comes before the house I shall be pleased to do all I can to facilitate its passage, and I trust that we shall receive a reasonable amount of information regarding the matter.


James Garfield Gardiner: The question of seed grain and
seed grain supplies for the different provinces has been under consideration from year to year, at least ever since I have been in public life. It was one of the standing questions in 1914 and has been in quite a number of years from that date down to the present time. Last year I had applications from every province in Canada except Nova Scotia and British Columbia for assistance from the federal government in order to provide seed grain. When these applications came from Quebec, Ontario, Prince Edward Island and other provinces we gave the same answer to all-that the provision of seed grain to farmers in the different provinces of Canada has always been looked upon as a provincial responsibility and has always been taken care of by the provincial governments. The matter of financing has occasionally been assisted in by the federal government, but as regards the distribution of seed grain and the responsibility for securing seed grain for farmers, the provincial governments have taken care of that from one end of Canada to the other.
The question of seed grain is an annual problem in the province of Quebec, for example. As I understand it, year after year the government of Quebec has to go to Alberta or somewhere else in western Canada and purchase seed oats and have it shipped to the province of Quebec where it is distributed to the farmers, the cost being, I presume, charged to the farmers. On a number of occasions we have assisted in financing the provision of seed in the three western provinces, perhaps to a greater degree in Saskatchewan than in any other province, and last year
we were required to supply more in the way of finances in order to take care of the seed grain situation in that province than in any previous year. There had to be found, in order to purchase seed and pay for its distribution last year, the sum of 821,000,000. Between $1,000,000 and $2,000,000 of that amount was provided by mortgage companies; about $18,000,000 was provided by municipalities. They borrowed the amount from the banks. About $3,500,000 was guaranteed by the province without any federal guarantee, and the other $14,500,000 was guaranteed by the government of Canada.
I believe it was the hon. member for Weyburn (Mr. Douglas) who said that the minister of agriculture of Saskatchewan, in a statement recently, said that only $250,000 of that amount was collected back last year. I think that is approximately correct so that there is still outstanding on the lands of Saskatchewan, as a result of loans made last year for seed grain, something in the neighbourhood of $21,000,000, in addition to all that had been lent in the years preceding that in order to provide seed grain.
It will be seen, therefore, that this is not a matter that can be considered lightly; it is not a question that we are asked to consider for the first time; and it is not a matter about which the farmers of Saskatchewan have to my knowledge been making any considerable complaint. I do not believe there are any considerable number of fa'mers in Saskatchewan, or Alberta, or Manitoba, who do not realize that somebody, somewhere, has been putting forth a sustained effort in order to make it possible for them to reseed their lands from year to year. There are no farmers in Canada who appreciate more thoroughly what has been done by the peopl of all Canada, and particularly what was done last year by the people of all Canada, in order to make possible the seeding of the land than the farmers of Saskatchewan.
In regard to the distribution of the seed, I do not think that any government ever undertook a task so great, of a similar nature, as the task that was undertaken last year by the government of Saskatchewan in the distribution of $21,000,000 worth of seed to the farmers of that province, and I can only say that if the worst that any hon. member of this house can say in discussing the matter now is that some farmer did not get seed until May 8th or 10th there is not very much reason for criticism with respect to the distribution of that seed. I venture to say that there is just about as much wheat seeded around the 10th of May in the average year in Saskatchewan as is seeded about any date.
Seed Grain-Mr. Gardiner

If the seed was available by the 8th or 10th of May to all the farmers of Saskatchewan then the task was very much more efficiently carried out than I myself thought it was.
There is another way of looking at it. Had there been anything in the way of neglect on the part of the government or of anyone who was associated with the distribution of this seed grain, if one were to examine the records, one would expect to find that the acreage seeded last year was very much lower than otherwise would have been the case. But when we examine the record of the acreage seeded in Saskatchewan last year we find that it was only slightly below that of the previous year-less than one million acres below the previous year and less than one million acres below the previous ten year average. So I do not think any considerable criticism can be made with regard to the distribution of seed last year.
Coming to the present year I may point out that before November 21 last, the government of Saskatchewan made a very thorough survey of the situation existing in that province, and they indicated to the government of Canada the production of wheat per acre in the different municipalities. At the same time they called the attention of the farmers of Saskatchewan to the necessity of providing themselves with their own seed as far as possible for the coming spring. I should go back even further than that. Earlier than November the government of Saskatchewan came to this government and asked for assistance to keep the farmers through this winter. They said they would require $9,000,000 to buy food and clothing for the farmers of the province and their families who were without crops last year, and also to provide some feed grain in areas where there was none. The government of Canada made that money available to Saskatchewan, and at the time it was made available the provincial government made an announcement to the people of Saskatchewan. They said: The federal government have provided us with funds with which to maintain the farmers throughout the winter. It will be absolutely unnecessary for any farmer, in order to keep himself through the winter, to sell any of his seed grain. And because we are going to provide the wherewithal to live through the winter and feed the live stock we expect every farmer who had a crop of two or three or four bushels to the acre as a result of last year's seeding to retain that grain in his bins in order to be able to seed his crop this spring. I know from the few letters I am receiving to-day from the different parts of Saskatchewan as compared with what we
IMr. Gardiner.]
received in previous years that the great majority-I would say 99 per cent of the farmers of Saskatchewan-have carried out these instructions and have the seed grain, if they grew it last year.


Thomas Clement (Tommy) Douglas: What about those who have not?


James Garfield Gardiner: I do not intend to say anything to-night, and I hope no other member will say anything, that would tend to undo any of the good work that was done by the government of Saskatchewan in seeing to it that that seed grain was kept in the bins until next spring. We can argue ourselves black in the face as to the cost of wheat laid down at an elevator, but anyone who ever had anything to do with them knows that elevator companies-and the pools are no exception-do what every other business concern does. When they buy grain at a certain point and that grain is supposed to go to Fort William-and if it went there it would have to be shipped back to any locality to provide seed-nine times out of ten the farmer has to pay a considerable part of the costs on the grain both ways, no matter where it was loaded or was unloaded.
And there is another thing to be considered. On grain for export, either east or west, there is a special freight rate. But there are no special rates for shipping grain north and south across Saskatchewan. If you ship grain from Melfort in northern Saskatchewan to the southern part of the province it costs practically as much in many instances as it would to ship it all the way from the centre of Saskatchewan to the seaboard. In view of those facts it is impossible to stand up here and try to figure what the price of grain is going to be, delivered to a farmer, after it has once been in an elevator. Any man who has had any practical experience knows that he cannot speak in generalities about the cost. So what the government of Saskatchewan is saying to the farmers of Saskatchewan to-day is this: You can get that seed grain cheaper than anyone else. In spite of what has been said to-night I venture to say that there is not one farm in Saskatchewan to-day that is more than twenty or twenty-five miles away from seed grain, and I think I know the province fairly well; I have driven over it all.


Thomas Clement (Tommy) Douglas: What can
they use for money? The seed may be procurable, but they need some assistance in financing.


James Garfield Gardiner: The farmers in Saskatchewan are like farmers anywhere else. I know that as far as the farmers in the

Seed Grain-Mr. Coldwell
community in which I live are concerned, if there are farmers who have seed grain their neighbours are not going to have a great deal of difficulty in getting it and getting it into the ground, unless someone starts to do something that in the end will make the cost a great deal more than it would be if done in a spirit of cooperation. By stirring up too much discussion of this question at this time we are not helping the farmers of Saskatchewan, but are making it more costly for them to get the seed grain that they are going to require to seed their crops.
Past experience has shown that few if any farmers in Saskatchewan have ever gone without seed grain, and that they get the seed grain most cheaply when they are able to obtain it without its being put in elevators and taken out again. It will be found that if and when and where this seed grain is required there will be no serious difficulty experienced in getting it. On the other hand I hope that no one, provincially, municipally or otherwise, is doing anything which will leave the impression that seed grain is to be supplied this spring no matter what anyone may do with the grain he had last fall. I think seed grain will be found for those who are in absolute need of it. Some way or other money will be found to pay for it, but the announcement of definite methods for going out to get say $3,500,000 worth of seed grain at the present time to be distributed in Saskatchewan or anywhere else is not going to help the farmers; and it would cost this government, or someone in Canada, perhaps the provincial government or the municipalities, a great deal more than to proceed as the provincial government is proceeding to-day. We are fully informed regarding the situation in Saskatchewan, and the Saskatchewan government is fully informed. The farmers also are pretty fully informed regarding the situation, as some of the quotations from the press have indicated. If we allow the matter to be dealt with by the province it will be handled just as effectively as it has always been, and the acreage which should be seeded to wheat in Saskatchewan this year will be seeded, as it has been in the past.


Ernest Edward Perley: Before the minister sits
down perhaps he will permit me to ask two or three questions. He says there is not a farmer in Saskatchewan who is not within twenty-five miles of a supply of seed grain. Does he say that seed is all of a rust-resistant variety?


James Garfield Gardiner: No, I would not say
that is rust-resistant wheat. There is not
rust-resistant wheat enough to seed all the farms in western Canada this year. And of course there are some people who would not seed rust-resistant varieties of wheat that some others are seeding at the present time. There are some farmers who would not sow particular kinds of wheat about which there is a great deal of discussion. After all, we get rust about once in ten years on an average, and there are some people who will sow varieties of wheat that are not called rust-resistant because of the higher yields they get with what they consider better varieties.


Ernest Edward Perley: Can the minister give us
any information as to who is holding the great bulk of the Thatcher wheat that is available for seed? Is it in the hands of elevator companies or of the wheat board?


Walter Edward Foster: Order. I would remind
the hon. member that we are not in committee. This is not the proper time for questions of this kind.


Major James William Coldwell: I do not think anyone in this chamber desires to make things more difficult either for the minister and his department or for the farmers of western Canada than it is going to be in the near future. But I do think that to-night the minister has placed rather an optimistic picture before us. He says he is sure there are farmers who will have seed available for their neighbours who lack it, but it seems to me the difficulty is that unquestionably there were many thousands of acres last year that were seeded to marquis wheat on which no crops were cut, and where much of the wheat that was cut was of very low grade and probably very poor germinative quality. Consequently in those areas, if farmers are to be able to seed their land and look forward to the reaping of a crop, better seed will have to be provided than is in their immediate vicinity. The minister said he did not believe there was sufficient rust-resistant wheat in the province or the provinces to meet all the needs. I think that is probably true, but I believe there is at least a very large amount, which may cover a greater acreage than I have personal knowledge about at the moment. The minister ought to be, and I expect he is, much better informed than I am on that particular score.
Reference was made to the fact that collections on account of the seed that was supplied last year and in previous years were very bad. I think that is true, and the reason, of course, is the condition of the country, the poor crops, the series of crop failures, the low grades and the insufficient price. I know many
Seed Grain-Mr. Coldwell

members of parliament from eastern constituencies think the eighty cent price adopted by the government this year provided an amount sufficient to meet the requirements of the wheat producer. Well, I do not propose to go into that question to-night, because on the estimates and elsewhere we will have opportunities to take up that aspect of the problem. I would say, however, that if hon. members will read the very interesting report of the proceedings of the conference on markets for western farm products, which I believe was circulated to all members by the Manitoba government, they will find a very authoritative analysis of the cost of producing a bushel of wheat in western Canada on various types of land and various sizes of farms over average periods of years. They will see that according to Professor Hope, who made the analysis- and whose figures were not disputed even by representatives of the grain exchange who were there-the Saskatchewan farmer required an average farm price of approximately ninety cents a bushel. The eighty cent price is on the basis of Fort William, and from that you must subtract fifteen, sixteen, eighteen or more cents a bushel to see what the farmer actually gets.


James Garfield Gardiner: That was on the poorest type of land.


Major James William Coldwell: On average land, I think, according to Professor Hope.


James Garfield Gardiner: It was forty-three cents on the best land.


Major James William Coldwell: I mention that because it has been said to-night that the collections for the seed grain last year have been very poor. I am going to hazard the guess that they are going to be low in the future also, if the price of wheat remains where it is at present.
With regard to the particular matter discussed by the hon. member for Weyburn (Mr. Douglas), the hon. member for Qu'Appelle (Mr. Perley) and the minister, the minister said he had no complaints and no considerable number of applications.


James Garfield Gardiner: I did not say no complaints.


Major James William Coldwell: Few complaints. I wrote "no complaints" in my notes.


James Garfield Gardiner: Few as compared with other years.


Major James William Coldwell: But there have been some complaints, and I am going to suggest that there will likely be a number of applications, particularly because of the fact that the
(Mr. Coldwell.]
farmers are anxious to obtain varieties of wheat that will resist rust. During the debate on the address in reply to the speech from the throne I read into the record a resolution that I believe has been passed by a number of municipalities. If the hon. member for Swift Current (Mr. Bothwell) were in his seat I would tell him, since he asked the question, that I have found out where that resolution was drafted. It was in the rural municipality office of Vanscoy, just a few miles west of Saskatoon, which happens to be in my own constituency, though I knew nothing whatever about the matter.
I think one should say that the Saskatchewan farmers are appreciative of what has been, done for them in the past. But I would also emphasize the fact that last year in my constituency many of the farmers did not get their grain until about the 7th or 8th and up to the 10th of May. I think the minister will remember that I sent across to him wires from one or two points about that time or a little earlier. Last year the season was such that early seeding was the type the farmer wanted to do, and I think that accounted for some of the dissatisfaction.
Then we speak of the seeding last year, and the amount of it. I believe one of the principal reasons why much land was seeded last year was the failure of the year before. A great deal of land was ready for crop but, as I said at the outset, many thousands of acres of marquis and other varieties of wheat that were not rust-resistant were not cut last autumn, and the farmers who did not cut that grain will have no seed this spring. Those who had seed may have kept it, but those who had no crop have no money and can procure no seed. I do not know what information the minister may have, but in all probability a larger number of farmers than we think are in that position. And I regret to say this, that to my knowledge some of the . farmers who were instructed to keep the seed in the bin, when they were pressed to meet their expenses or to meet bills and other obligations, unfortunately in many instances did part with the grain which they should have kept. But we have to bear in mind that they were under pressure not only from their creditors but from their families, many of whom lacked those things which are necessary to face a severe western winter.
So I say this problem ought to be discussed in the house in the way in which it is now being discussed. No one wishes to embarrass the government or the minister, but we do want the assurance that the matter is under consideration. In the light of the statement quoted by the hon. member for Weyburn, that

Seed Grain-Mr. Quelch
of the minister of agriculture for Saskatchewan, I believe it was necessary that the matter be discussed here to-night. As I say, many of the farmers who did have some grain sold it to meet their running expenses and some of their obligations. As the hon. member for Weyburn has reminded me, even if they did keep seed for themselves, in all probability they did not keep sufficient to supply their neighbours also.
After the years of depression, of crop failures and of economic difficulties, during which this parliament has had to guarantee heavy loans for western farmers-$8,200,000 for the provinces of Alberta and Saskatchewan in 1937, and $16,400,000 or thereabouts in 1938-it is hardly to be expected that in one single year, namely this year, we should go down to relatively nothing at all. Many of the areas which have been affected in previous years are affected again. I think the minister's own constituency is probably one of the constituencies most seriously affected.


James Garfield Gardiner: It is the worst.


Major James William Coldwell: I think it is one of the worst.


James Garfield Gardiner: It is not " one of the worst"; it is the worst.


Major James William Coldwell: Well, if it is not the worst, it is very close to it. I imagine the hon. member for Wood Mountain (Mr. Donnelly), the hon. member for Weyburn and the minister himself may have a little argument as to which of the constituencies is the worst.


James Garfield Gardiner: No argument.


Major James William Coldwell: But I am simply supporting the suggestion made by the hon. member for Weyburn that the matter be kept in mind by the house and the minister. We shall be interested to learn just what the government proposes to do if and when applications for assistance are made from the governments of Alberta and Saskatchewan.


Victor Quelch: Mr. Speaker, I should like to associate myself with the remarks made by the hon. member for Weyburn (Mr. Douglas). Rust, of course, is not generally speaking a major problem in Alberta, although last year heavy losses were sustained in the eastern part of the province, due mainly to late seeding. Therefore I hope if there are any supplies of rust-resistant wheat available that the minister may be able to follow the suggestion of the hon. member for Weyburn and make it available to farmers on a bushel exchange basis.


James Garfield Gardiner: I think I should make the matter clear, in order to avoid any misunderstanding. The hon. member is appealing to the wrong minister. It is the minister of . agriculture in Alberta to whom he should be appealing. We have nothing to do with that matter, from here.


Victor Quelch: But in view of the fact that the wheat board buys all the wheat, surely they must have large supplies of rust-resistant wheat on hand. Therefore it would be a matter of cooperation between the provincial minister of agriculture and the federal minister.


James Garfield Gardiner: The provincial minister of agriculture can buy all the grain he can pay for from the grain board, just the same as anybody else buys it. We have nothing to do with that at all.


Victor Quelch: Provided they can finance it. And if the farmer has to buy it the cost would be considerably higher than if the exchange could be made on a bushel for bushel basis. When it is bought from the elevator there is an extra charge.
I wish to refer to the agreement between the provincial and federal governments last year regarding seed grain loans. The provincial government agreed to see that the maximum amount obtainable from borrowers was collected and paid into the proper account of the municipality. In view of that fact it seems very strange that the Minister of Agriculture (Mr. Gardiner), speaking at Hanna in my constituency, deemed it advisable to criticize the government of Alberta for endeavouring to make the farmers pay back their seed grain loans. And it seems strange, too, that he should stress the fact that that was not being done in Saskatchewan. It seems strange to me that any cabinet minister should go into a province and criticize the provincial government for endeavouring to meet the terms of an agreement which has been made between that government and the federal government.
As a matter of fact his criticism was not sound because in the province of Alberta the farmers were only requested to repay their loans provided that they had threshed at least 800 bushels.


James Garfield Gardiner: I am sure the hon. member does not wish to misquote what was said at that meeting. At the meeting I said that the federal government had no responsibility for making collections and that at that stage the provincial government was responsible for making them. First the municipality guaranteed the account, and they had to collect.

Seed Grain-Mr. Needham

If they could not collect, the provincial government had guaranteed the account, and they would collect. If the provincial government was not able to collect and pay, then we came into the picture. I certainly said to that audience that when we came into the picture we would collect, if the others had not collected.


Victor Quelch: But it goes beyond that. May I read this from the agreement:
The province shall cause each ^municipality and the minister of municipal affairs to collect all amounts due by farmers in respect of seed grain and other supplies distributed .to farmers in connection with seeding operations during the spring of 1938 and to pay the amounts so collected to the appropriate chartered banks, and to this end the province shall appoint a number of inspectors adequate in the opinion of the Minister of Finance-
That is the federal minister.
-to see that the maximum amounts collectable from borrowers are collected and paid into the proper account of the municipality.
They were compelled to do :t, Mr. Speaker. Therefore, in order to comply with the federal agreement, they had to collect the maximum amount.


James Garfield Gardiner: Certainly.


Victor Quelch: It is strange that the minister should criticize the provincial government for endeavouring to carry out an agreement which had been signed by both the provincial and the federal government.


James Garfield Gardiner: In order to have the record straight, may I say this. I did not criticize, but we were being criticized for having collected these accounts, or trying to collect them. I explained that the time had not yet come for this government to collect them. I said that the government which was then trying to collect them was probably the municipal government, that if it got beyond that it would be the provincial government, and that if the provincial and municipal governments did not collect we would eventually have to do so. But I explained we were not in the field collecting, because it had not yet become our responsibility to do so.


Victor Quelch: It is unfortunate that the-


Walter Edward Foster: Order. The discussion cannot go on in this way, because the house is not in committee. Hon. members are making two or three speeches, and under the rules they are not permitted to do so.


James Garfield Gardiner: I was at fault, Mr. Speaker. I should have said that I was rising to speak to a question of privilege in order to correct a statement which had been made.


Mr. JOSEPH NEEDHAM (The Battle-fords) :: Mr. Speaker, it is not my intention to speak at length, nor shall I attempt to cover the ground other hon. members have already covered respecting the situation in Saskatchewan. There are one or two matters, however, which I wish to mention. In the last few years the situation in the northern part of the province has been getting more serious from year to year. There was practically no rust-resistant wheat in my constituency. There were one or two patches, the seed for which was sent in by the mortgage companies from their own farms. I have two patches in mind where rust-resistant seed was sown. In each case marquis wheat was sown on either side, and even with just the stubble showing, where rust-resistant had been sown the stubble was bright as a dollar whereas the other was quite black and had very little yield. As a consequence of this, that particular district is in far worse financial shape than it ever was before.
Perhaps the severest criticism to be heard in my district is of the attitude of the government in setting the price of wheat f.o.b. Fort William. Many think that that is unfair to the farmers. I do not know what the rate would be from eastern Manitoba to Fort William, but in my constituency it is 24i cents. There is a distinct penalty placed upon those living in that part of the country.


Mr. LEADER:: It is fifteen cents from
the eastern part of Manitoba.


Joseph Needham: These men have to pay a penalty because they happened to homestead there.


Mr. McLEAN (Melfort):: Probably it is worth more to live there.


Joseph Needham: This is something I want to present to the government. I hope that in setting the price of wheat they will deal fairly with all the parties concerned. We had several intimations from the minister to-night that this is a matter primarily for the provinces. I should like the minister to make a statement of the services rendered by the dominion Department of Agriculture which could not be rendered by the departments of the various provinces. This question of where the responsibility rests is becoming more difficult of definition year by year. There is an increasing number of farmers who are convinced that there is a duplication as between the federal Department of Agriculture and the provinces. This belief is becoming more widespread year by year. We will soon be taking up the estimates and after looking

Supply-Agriculture-Administration
through them I must say that with the exception of a few items, I cannot see anything that is not handled already by the provincial governments.
The question is being asked as to what plan the departments of agriculture, both federal and provincial, have to further the welfare of agriculture in this dominion. Is the minister working towards the objective of bettering the condition of agriculture? The following statement by Great Britain's minister of agriculture appeared the other day in the Western Producer:
The objective for agriculture. Sir Reginald says, should be to secure a level of prices for farm products that will enable the farmer to conduct his operations in a scientific and efficient manner, to pay wages for his help that correspond to wages received by other skilled labour and to earn for himself a reasonable standard of living. That is the objective he set before the farmers of the empire.
The federal Department of Agriculture in cooperation with the provinces should map out a plan with that definite objective in view. This question has been raised ever since confederation, ever since the departments were formed. The condition of agriculture, both in the east and in the west, is such that some plan with a definite objective should be worked out. I feel like saying that I hesitate to give my approval to voting over nine and a half millions for the Department of Agriculture unless I am satisfied that that department is rendering a special service that warrants this expenditure. After all, if the dominion meets its obligations that money must be drawn from the provinces. The question in my mind is whether those estimates should be prevented from passing and the money left in the provinces. The question is whether the provinces could not administer this vote to better advantage.


[Stage Direction]
Motion agreed to. and the house went into committee of supply, Mr. Sanderson in the chair.

[Stage Direction]
Administration service-
1. Departmental administration, $120,005.
Mr. SENN:: Mr. Chairman, as I understand it, this item raises the whole question of the activities of the Department of Agriculture, the manner in which they are conducted and the organization of the department. Some two years ago the announcement was made in the columns of the press that certain changes were to be made in the organization of the Department of Agriculture. Later on the minister was asked what those changes were to be and he requested that the answer should be allowed to wait
71492-60 i
until a certain item came up. Unfortunately that item did not come up in that year until the dying days of the session, and nothing was heard of the changes which were to be brought about. Last year the question was again asked as to the changes which were to be made and the additions to the service, if any, and the minister did make a short statement. In my opinion that statement was neither satisfactory nor at all complete. I ask the minister to give the committee and the country a real explanation of the change that has been made in the department, particularly through the introduction of a marketing branch, and some idea as to how it is being conducted and generally how the reorganization has been effected.


James Garfield Gardiner: I think if my hon. friend will read the discussions at about this same stage last session he will find that the hon. member who is now asking the question asked it then, and an explanation was then given. I doubt very much whether I can add to it, but I am quite prepared to repeat it.
The set-up of the estimates this year indicates the intention of those of us who advocated and carried through the reorganization of the department. As I explained last year, in the estimates the items were put in the opposite way round to that which would indicate the intention of those who brought the reorganization about. This year the items appear in their natural sequence: administration service, science service, experimental farms, production service, and marketing service; and I think one has only to read those headings in order to realize that that is the natural set-up for an agriculture department. The first activity in connection with agricultural work is to make scientific investigations, not only as to what is being done in this country but as to what is being done under similar conditions in other countries, then to apply the results of that investigation on our experimental farms, and to carry that experimental work to its logical conclusion.
To illustrate, we may take the matter which was under discussion a few moments ago, that of work on rust-resistant wheat. First, certain investigations are carried out in connection with the research laboratories, not only on our farms and associated with our farm work, but also in connection with the research service generally. Then we take the results of that scientific work and apply it in the production of crops on the experimental farms. After we have produced the grain up to a certain standard and have classified it, we let

Supply-Agriculture-Administration
it out to individual farmers to multiply it. When the grain is multiplied we distribute it in two or three bushel allotments to farmers all over the western provinces, and those men by the end of one season have their own seed produced on their own farms from the distribution which is made.
That is the early stage of the work. One could apply a similar explanation in connection with the development of live stock, poultry, fruit activities, and other pursuits related to agriculture.
Then with the experience we have gained through these scientific investigations and the experimental work, we go out through the country to try to promote production. It is in the promotion of production that we have the greatest degree of assistance from the provinces. Something has been said with regard to the overlapping of our work. There is no overlapping in the scientific work. There is cooperation. We carry on activities in both scientific and experimental work in cooper

ation with the provinces, at their universities and their agricultural colleges, and we cooperate with them in the production service. The very fact that we distribute rust-resistant wheat is in itself cooperation with the provinces in the matter of production. The fact that we send overseas and purchase sires for the horse industry or the cattle industry or the sheep industry or the swine industry, assists in production generally throughout the country.
Having produced the product which we think is suited to certain markets, we try to promote the sale of that product in those markets. The larger part of the production of our farms is sold, as all hon. members know, in the Dominion of Canada. There are only three products of which we sell the greater part outside of Canada: apples, a little over 50 per cent; cheese, about 66 per cent; and wheat, about 68 per cent, the greater part being sold in Great Britain.
Our marketing activities in so far as the Department of Agriculture is concerned are largely in Canada. We have a certain set-up in the old country, headed by Mr. Allen, who was sent over there last year, and who previously had been associated with the agricultural college in Saskatchewan. He heads up the service there in attempting to find out what types of live stock, for example, will best suit the market in the old country; what forms for the making up of cheese, for example, best suit that market; and determining, too, what types of fruits please that market best. This information is passed back here, and then

we utilize the different sen-ices to try to produce the kind of products which will best suit, those markets, and utilize the marketing set-up to assist in selling them.
I would say'that the difference between this set-up and the organization we had before is this. We emphasized live stock; we emphasized in another branch seeds of different kinds; we emphasized poultry in another branch; and these branches and many others were headed up by commissioners. We emphasized production and improvement in these different lines rather than what we are stressing to-day through the form of organization which is now in operation. To-day the things we emphasize are scientific investigation, experimentation, production, and marketing.


Mark Cecil Senn: I thank the minister for his explanation of what is taking place in the department, so far as it has gone. However, these activities were largely carried on under the former organization. What I am trying to get at is this: where to go in the department when one wants certain information, or where any particular matter which one wishes to take up should be dealt with. Not so very long ago I heard a gentleman say that he came to Ottawa on some matter which had to do with poultry, and after telephoning here and there throughout the department he finally wound up in the seed branch, where he found the particular section of the department with which he wanted to deal. That is a difficulty which, as I see it, results from the lack of information which the minister has given up to the present. If you pick up the report of the minister for the last year you will find that the headings are just the same as they were previously. There is a live stock branch, a seed branch, a fruit branch, and so on down the line, with no difference or no discrimination because of the new set-up within the department.


James Garfield Gardiner: It is just the same as it was last year.


Mark Cecil Senn: I know it is the same. That is what we are complaining about. There should be some change. For instance, if you pick up the departmental directory you do not know to whom to appeal for any information you want within the department. Repeatedly I have called up one branch of the department and have been told, "Well, this is not the part of the department which deals with the matter at the present time." They refer me to somebody else; I speak to somebody else and find I am again in the wrong pew. That has happened repeatedly, not only to myself but to a good many other people. If

Supply-Agriculture-Administration
the minister has made these changes it is necessary that he change the directory and revise his report so that when we come to deal with these matters we shall know with whom we are to deal and where we are to go to present anything we have to present to any branch of the department. That is the question I am asking the minister. What has been done in this respect? We want to be able to approach matters intelligently when we wish to deal with the department.


James Garfield Gardiner: The set-up this year is exactly the same as it was when the estimates went through a year ago.


Mark Cecil Senn: But we had the same difficulty a year ago.


James Garfield Gardiner: The telephone directory is being reprinted at the present time and when that is through it will be simpler.


Mr. BROOKS:: Following up what my hon. friend (Mr. Senn) has said, a good deal of useful literature is circulated by the Department of Agriculture, but when you want to get information and you telephone the confederation building you are told that you must go to some other building in the city, to some particular branch of agriculture, in order to get the information. The whole tiling should be revamped so that when we get these requests-and I receive hundreds of them-they can be intelligently dealt with and the necessary information secured and passed on.


Mr. HAYHURST:: With regard to salaries, the details of which are to be found on page 51, it would seem that the private secretary has been added to the staff.


James Garfield Gardiner: The explanation is that they have to be on the staff a certain length of time before they are permanent. He is drawing the same salary and is the same individual, but he is now on the permanent staff.


Major James William Coldwell: In view of the situation that is developing with regard to wheat, will the minister make a statement on the policy of the government in relation to the problem of wheat marketing, the attitude of the government towards the world conference, and allied matters, or shall we discuss these problems under these estimates? Is the minister prepared to indicate now whether or not he can make that statement?


James Garfield Gardiner: These matters do not come under agriculture but under the Department of Trade and Commerce. The whole wheat question, the administration of the grain act, is under that department.


Major James William Coldwell: I am aware of that, but. the Minister of Agriculture, of course, is the minister who has charge of the acreage problem, the provision of seed and all matters which have to do with the growing of crops. The supplying of the money for the seed may be under the Minister of Finance rather than the Minister of Agriculture; I realize that. But the Minister of Agriculture is probably, at least from the point of view of those of us who come from the part of the country from which he comes, the one who might be able to discuss the matter from the standpoint of the wheat producer and give the committee,, if I may say so without seeming in any way derogatory of the Minister of Trade and Commerce, a better picture of the situation than perhaps could be given by any other minister. Can we have a discussion on these questions in the near future?


James Garfield Gardiner: If I were to undertake to discuss the matter at the moment I should be completely out of order.


Major James William Coldwell: I know that.


James Garfield Gardiner: I hope to get my estimates through some time, and if I were to go so far astray as to discuss a matter of that kind under this item I should be giving a bad example.


Major James William Coldwell: I did not ask that.
I asked if some opportunity would be given at an early day, apart from the estimates, for the minister to make a statement regarding the wheat situation and the government's policy. I simply wanted to know when we might have such a statement either from the minister himself or from some other member of the government.


James Garfield Gardiner: There are private members' resolutions on the subject that will be reached sooner or later, and there are other occasions on which the matter can be discussed when the estimates of the Department of Trade and Commerce are up, for example.
I am not in a position to say when the matter will be discussed; it depends when these resolutions come along.


Mark Cecil Senn: When the minister made his first statement he referred to the fact that an agricultural commissioner had been appointed in Great Britain, a Mr. Allen. I remember distinctly when the minister made that announcement in the house last year. He stated that this gentleman's work was largely to supply information to the Department of Agriculture. During the year he has no doubt made a number of reports to the department as to what has been going on in
942	COMMONS
Supply-Agriculture-Administration
Great Britain. There was some argument last year as to the Shaw report and what it contained, the recommendations made, the conditions of trade over there and the activities of the Department of Trade and Commerce under the commissioner. Is the minister prepared to table the correspondence or the reports that have been made by the commissioner who was over there? It would greatly facilitate discussion when we come to consider marketing services under the department.


James Garfield Gardiner: It would be quite a
volume of correspondence. I do not know that there is any objection to bringing it down and making it available to the house, but it is in the form of letters that are coming in continuously from his office to the department here, and it has to do with such matters as the experiment we are now carrying on in connection with the sale of beef in Great Britain, which is a veiy interesting experiment, and other matters of that kind. All the information that is contained in the correspondence could be put in such a form as to be more helpful to members of the committee than it would be if the letters themselves were simply brought down. When we come to consider the estimates for marketing services, we might have available the reports on these different matters and have them produced at that time.


Mark Cecil Senn: But that is what we should
like to have at the present time. We should like to have the information sent by the commissioner to the Department of Agriculture. As the minister states, the experiment that is taking place in the shipment of chilled beef is important, and the committee is entitled to information.


James Garfield Gardiner: With all due respect
I do not think we should be in order in discussing that under this item. That should be discussed under marketing.


Mark Cecil Senn: I am not asking that it be
discussed at the moment, but the minister mentioned that Mr. Allen had been appointed and sent over there, and for the sake of facilitating matters I am asking that he bring down those letters for the information they contain. It would probably help in getting the estimates through, because without it we might ask a lot of questions which otherwise would be unnecessary.


Alfred Johnson Brooks: We have heard the statement made that there is overlapping between the provincial departments of agriculture and the federal department. Where is the division of responsibility, and what officers would
(Mr. Senn.]
be responsible for the liaison between the federal Department of Agriculture and the different provincial departments?


James Garfield Gardiner: There has been a committee acting for some years to carry on discussions between the different provincial departments and this department to avoid overlapping. The last gathering for general discussion I think was about two or two and a half years ago. At that time it was decided that there was no serious overlapping between the federal and the provincial departments of agriculture, and no additions to the activities of this department have since been made which would result in further overlapping than there was then.
The provincial departments carry on in connection with agriculture in much the same way as they do in connection with other provincial activities-taking care of educational matters for example. We have no educational institutions of the type of the provincial agricultural colleges and schools. All that type of work is done by the provinces. But the general experimental work on experimental farms is done by the federal department. In the production services a greater proportion of the work is carried on by the provinces than by the dominion. In matters such as the grading of farm products there would be overlapping but for the fact that most of the provinces have appointed our inspectors as provincial inspectors in order to do much of the grading work that is done within the provinces. We have and can enforce grades for interprovincial and export trade, but we are not able to enforce those grades within the provinces themselves. In that case the provinces enact legislation setting up the same grading system as we have, and then they ask our men to become their appointees and enforce the same grading services within the province. There is no overlapping in personnel, their work is done by men who are maintained by the federal government.


Alfred Johnson Brooks: Have the federal or the
local departments most to do with marketing?


James Garfield Gardiner: We have the most to
do with the marketing end. All grading services come under that. We do the work, but some of the legislation is provided by the provinces.


Donald Alexander McNiven: The minister indicated
that one of the branches of his department was scientific. Is any work being conducted through the minister's department or through the national research council to find other uses for wheat? What I have in mind is something similar to what is being done with

Supply-Agriculture-Administration
the soya bean and the investigations of Doctor Carver to find new uses for the peanut. Is anything of that kind being done so far as wheat is concerned by the Department of Agriculture?


James Garfield Gardiner: Taking the soya bean
as an example we are carrying on experiments in its breeding and production in order to suit it to different climatic conditions. But research work with regard to uses of the soya bean is carried on by the research council.


Donald Alexander McNiven: Under what department
is that?


James Garfield Gardiner: That is under trade
and commerce, but reports are made to the Department of Agriculture.


Mr. GRAYDON:: I notice that a resolution which is on the order paper and may come before the house this session has to do with a system of dominion scholarships, a proposal which was very ably sponsored last year by the hon. member for Essex East (Mr. Martin). Mention is made in the resolution of assistance in securing adequate academic training to enable young men and women to take their proper place as thoroughly trained leaders in industrial, professional and public life. Assistance is suggested for those who are unable to complete their courses in the various agricultural colleges of the dominion. In view of the large number of people who have taken a keen interest in the matter of scholarships, has the minister or his department given any consideration to the question whether or not assistance should be given by the Department of Agriculture in this connection?


James Garfield Gardiner: As I said a while ago,
education is under provincial control; we do not directly enter that field. But we do take into the service men who have benefited from scholarships, and from time to time promising young men who, we think, would be helpful in the service in years to come we send to the universities to instruct students and to work with those who are further advanced in certain lines; then we bring them back to the department in order to make use of their services. In that sense we assist them, because we pay their salaries while they are at the universities. But we have not put up scholarships.


Alfred Johnson Brooks: In connection with education I notice that at the different experimental farms throughout Canada young men are attending short courses, sometimes for four or five weeks. Forty or fifty men are attending
such a course at Fredericton. They are splendid courses and much valuable instruction is given. What arrangement is made with the local government for the payment of the expenses of these students who attend classes at the federal experimental stations?


James Garfield Gardiner: We do not pay anything towards the expenses of the students. I understand that some provinces contribute towards the expenses of the students. But wherever we have men available we supply personnel to the provincial authorities for teaching these students, and pay them while they are doing it. And we supply our facilities at the different farms.


Gordon Graydon: In Ontario are any of these instructors taking part under dominion supervision in the various short courses conducted in the different counties?


James Garfield Gardiner: There are some, but we are not in a position to cover the whole province. They go to Kemptville and from there to other places to assist, but we cannot cover all the classes conducted in the different counties.


Gordon Graydon: I believe very few educational activities, as far as young farmers are concerned, really bring about better results than the short courses conducted from time to time in the various counties of our province. Not only do they provide a type of education which is very necessary but in addition, from my experience over the last several years, they bring about a most remarkable advancement in community spirit as well. Over the years one can notice the general improvement which eventually comes to agriculture as a whole by virtue of the short courses that are given. I would suggest to the minister that any assistance he might be able to give in this work through cooperation by the federal department would be well worth while as far as the agricultural life of our dominion is concerned.


Mr. WOOD:: I am interested in this discussion with regard to rural education, and I have listened carefully to the remarks of hon. gentlemen opposite. But for some time I have taken the view that there is great danger of overlapping our activities, and I feel that the minister would not be well advised to endeavour to go into the educational field which is so well looked after by the Ontario department of agriculture.
I was also interested in the remarks of the hon. member for Haldimand (Mr. Senn) who was concerned as to where he could get certain information. That is one field in which the Ontario department has had very considerable

Supply-Agriculture-Administration
success. Anyone can go into the branch offices of the department and find racks of bulletins containing all the information that may be desired. I do not think it is the duty of the federal department to establish an information bureau especially for the members of parliament; that is not particularly our business. When we go home for week-ends we can go to the branch office and get any information we want.
I believe we spend a great deal of money unnecessarily because of the overlapping of these services. I sometimes question the advisability of maintaining a central experimental farm here in Ottawa when we have such splendid farms in each province. I sometimes wonder if that money could not be spent better in other directions. I do not claim to be an authority on the subject, but this is one of the things that come into the mind of the average farmer to make him wonder whether we are getting the best possible value for the money we spend. The government is asked to do so many things. A question was raised this evening in connection with supplying seed wheat, and as an Ontario farmer I marvel at the ability of our western men-whom I always look upon as masters of brilliant intellect-to be spoon-fed, as I think the hon. member for Parkdale put it a couple of years ago. No doubt that was how he came to coin the phrase. They expect the government to supply them with seed wheat. Down in Ontario we try to make our own effort, and I think the minister is to be commended on attempting to bring out a little self-reliance in some of these people, even though they may have to drive twenty-five miles. If they cannot afford to buy rust-resistant wheat why not do as I have to do when I want some new variety? I buy a bushel or two and sow it, and then I have my seed for next year. I have no money to spend extravagantly. If I want a team of horses I generally sell the S200 horse and buy $50 colts, and I think if the farmers in the west would do something like that they would not have so many difficulties.
I want to come back to the question of education. I hope the minister will not be induced, by the very able speech of the hon. member for Peel (Mr. Graydon), to duplicate the educational activities which are so well administered by the province. I am quite a believer in the school of experience. So far as scholarships are concerned, I am doubtful whether any service could be rendered in that way. Not long ago my attention was drawn to the type of men who are at the head of the United States Steel Corporation and the Standard Oil Company. Of course this is a little

outside agriculture, but they are two of the largest concerns on the north American continent. I noticed that the men at the head of those two firms were poor boys, raised on farms and having the benefit of only a very limited public school education. That would seem to prove that there is something in the atmosphere of the farm which, if properly applied, brings out the ability that is in a man. True, he must be able to develop his mental capacity, but I am not so sure that we derive any substantial results from some of these scholarships, which by the way are very expensive; I am not sure that those who have benefited have really made any important contribution to the nation as a result of these expenditures.
These are just some thoughts I have picked up from my association with men living in my own atmosphere, but I think they are worth considering. Let me say once more that I hope the minister will not be lured, by the fine speeches of those opposite, into broadening out into a wider sphere when I think perhaps we have too much duplication already.


Mr. LOCKHART:: I would suggest that if any of the friends of my hon. friend try to get a position in the civil service in connection with agriculture he will see how far they get without a scholarship.


George Ernest Wood: I always sympathize with anyone who applies to the civil service commission or the government for a position. It is one of the last places I would want to work, and really I do not advise any of my friends to apply for government jobs.


Mark Cecil Senn: I should like to take this
opportunity of thanking my colleague and neighbour the member for Brant (Mr. Wood) for telling me just where I can get all the information that may be required in connection with agriculture throughout the dominion. I had thought, of course, that certain information could be better obtained from the federal department than could be found in the archives or publications of any particular province.
I have been surprised at the scope of this discussion, having in mind what the minister said a few moments ago when I was trying to get him to lay certain papers on the table. He said that request was rather wide of the mark in discussion of this particular item, but since then we have gone considerably further afield. The minister chose to ignore what I thought was a very reasonable request, that this information should be tabled, but I am going to make another appeal to him. After all, this gentleman is

Supply-National Revenue-Customs
a paid official of the government; public money is expended in paying his salary and expenses, and I think the information he sends back to the Department of Agriculture should be made available to parliament. If there is anything that is confidential, that is a different matter, but I do not see why there should be anything confidential in a public servant,giving information to his minister or to the department which he is serving. I make one more appeal to the minister to allow that correspondence and information to be placed on the table for the use of members of this house, because I think it will assist him in getting his estimates through.


James Garfield Gardiner: I hope the hon. member did not think I was ignoring the matter.
I simply stated that it was departmental correspondence. I do not know that it would be of any particular use to the house in its present form. I have no objection to its being brought down, which might be done through an order for return; or I can bring it down and lay it on the table when we discuss the matter again. However, I do think it would be very much more useful if, before bringing it down, we put the information in some sort of shape that would make it more easily understood. I do not think anyone would want to go through a file of departmental letters written back and forth, but if they are wanted I can bring them down.


Mark Cecil Senn: I have no desire to embarrass the minister or to find out anything that is at all confidential. On the other hand the very remarks which might be most important might be left out of any report that was made. What the minister might consider unimportant other members of the committee might regard as important. I am making what I think is a reasonable request when I ask that the information be tabled.


[Stage Direction]
Item agreed to.

[Stage Direction]
Customs and excise divisions-
218. General administration, $972,135.
Hon. J. L. ILSLEY (Minister of National Revenue):: Mr. Chairman, I desire only that the item be called; there is really no time for any discussion on it to-night. I would ask that it stand.


Hugh Alexander Stewart: Mr. Chairman, I would refer hon. members to a statement made last night at the adjournment hour, when the Prime Minister was asked about the business for to-day. The right hon. gentleman said:
Mr. Mackenzie King:	To-morrow we shall
take up the resolution with respect to the trade agreement between Canada and the United States. I understand there is a desire not to proceed with the debate to-morrow in which event we would go on with supply, and take the estimates for the Department of Agriculture, Public Works or National Revenue.
That is open to the interpretation of taking only one department. I have no objection to taking two, but I do not think we ought to go into more than two.


John Gordon Ross: Did he say " or " or " and"?


Hugh Alexander Stewart: "Or."


An hon. MEMBER:: " Or " means " and."


Hugh Alexander Stewart: It does not mean " and," in that connection.


John Gordon Ross: Did the Prime Minister say " the Department of National Revenue, the Department of Agriculture or the Department of Public Works "?


Hugh Alexander Stewart: He said ".... take the estimates for the Department of Agriculture, Public Works or National Revenue." That means one department, if it means anything.


An hon. MEMBER:: Two.


Hugh Alexander Stewart: We have admitted two.


John Gordon Ross: What is the matter with three?


Hugh Alexander Stewart: I think two is enough.


Mr. LAWSON:: We can easily stop it by discussing the item which has just been called.


Hugh Alexander Stewart: We ought to go into two departments, according to the understanding, and no more. That is enough to keep us going.


Malcolm McLean: Is there a desire on the part of the acting leader of the opposition to take four departments to-night?


Hugh Alexander Stewart: I do not think that question requires an answer at all. If the hon. member was listening he would know I said that the Prime Minister's statement meant one department. Why should I say four departments?


Malcolm McLean: It seems so foolish, when the department is available and when members are willing, that the hon. member who is acting as leader of the opposition should try to delay those departments getting into supply.


The CHAIRMAN:: Item 292.
946	COMMONS
Supply-National Revenue-Customs


Hugh Alexander Stewart: What is that?


Frederick George Sanderson: Public works, page 31 of the estimates.


James Earl Lawson: We have not disposed of item 218 yet?


Frederick George Sanderson: Item 218 was to stand.


Hugh Alexander Stewart: Are we going to follow out the understanding, or are we going to violate it? There is no desire to hold up the business, but the two departments taken will meet the requirements of the government to have something to deal with and something to discuss.


Ernest Lapointe: If the hon. member thinks there is a breach of any understanding, we certainly will not proceed. But really I do not see why we should not go into those departments, in order to be ready to go on with them when the time comes. No hon. member is losing any privilege or any right by permitting that. But if the hon. member insists-


James Earl Lawson: We are losing the opportunity of discussing matters we want to discuss on going into supply.


James Lorimer Ilsley: Do I understand, then, that the Department of National Revenue is before the committee, and that item 218 has been called?


James Earl Lawson: Yes.


James Lorimer Ilsley: And the question is whether items may be called in the Department of Public Works.


Hugh Alexander Stewart: Yes.


James Lorimer Ilsley: I presume the Prime Minister thought he had intimated that he wanted to go into the three departments named, but I do not know.


Frederick George Sanderson: Item 292.


Hugh Alexander Stewart: Mr. Chairman, I renew my objection to the taking up of item 292, and say we should go back to the item in the Department of National Revenue. Surely these two departments will furnish ample material for discussion.


Ernest Lapointe: All right, then.


Frederick George Sanderson: Did the minister call another item in the Department of National Revenue?


James Lorimer Ilsley: No.


James Earl Lawson: The minister can go back to item 218.
{The Chairman.]


James Lorimer Ilsley: We can discuss item 218, then, if hon. members wish.


Some hon. MEMBERS:: Carried.


James Earl Lawson: Will the minister be good enough to make an explanation of this item? There seems to be some change in the classification of appraisers-either that, or there is a large increase in salaries. About one-third of the way down on page 138 there are items of S4,000, $16,000 and $19,000, in round figures, in the estimates for 1939-40. Then there is an item of $10,260 in the estimates for 193839, which does not appear in the figures for the ensuing year. Do those relate to the same subject matter?


James Lorimer Ilsley: Yes; there has been a reclassification, which means that there are fewer customs reviewing appraisers, and therefore a decrease under that item. There are more dominion customs appraisers, and therefore an increase under those items. Unless there is some offsetting decrease elsewhere, which at the moment I do not see, there has been apparently a net increase.


James Earl Lawson: Apparently the increase is in the neighbourhood of $30,000. That seems extraordinary in one year, by a mere reclassification, unless there are a great many more appraisers.


James Lorimer Ilsley: The number is increased, as indicated in the first column on the page under the figures 1939-40.


James Earl Lawson: Apparently there is an increase up to thirteen or fourteen, whereas previously there were only three. What is the reason for the increase?


James Lorimer Ilsley: There have been some
transfers from other classifications. For instance, lower down on the page there is a decrease of seventeen customs reviewing appraisers, grade 1. That is about three-quarters of the way down the page.


James Earl Lawson: But right above that there is an increase of eight, again.


James Lorimer Ilsley: There the balance is the other way.


James Earl Lawson: And an increase of sixteen in the next item below that.


James Lorimer Ilsley: One would have to go
through all the items to see whether or not there had been a net increase.


James Earl Lawson: Has not the minister available a memorandum showing the reason for these changes in classification, what the result has been, and how much more money it is costing the taxpayers?

Supply-National Revenue-Customs


John Gordon Ross: It is not costing us more.


James Lorimer Ilsley: There has been an increase in salaries for the appraisers branch. The authorized compensation for 1938-39 was $151,965.


James Earl Lawson: That is for appraisers only?


James Lorimer Ilsley: That is in the appraisers' branch. The estimated compensation for 1939-40 is $172,535. Part of that is accounted for by statutory increases which amount to $5,370.


James Earl Lawson: That would leave about $15,000 for new employees?


James Lorimer Ilsley: That is it.


James Earl Lawson: How many new appraisers have been created-on balance, I mean?


James Lorimer Ilsley: The $15,000 would not be entirely for new employees. There are increases in salaries.


James Earl Lawson: I deducted the statutory increases.


James Lorimer Ilsley: There are increases that are not statutory, due to reclassification of positions.


James Earl Lawson: Could the minister tell me, on balance, how many more appraisers it is proposed to have for 1939-10?


James Lorimer Ilsley: If the hon. gentleman wants that exactly-


James Earl Lawson: Approximately.


James Lorimer Ilsley: Approximately there is no change.


James Earl Lawson: There may have been one or two appointments, but nothing beyond that?


James Lorimer Ilsley: That sums up the situation.


James Earl Lawson: I understand appraisers are not appointed by the civil service commission.


James Lorimer Ilsley: Yes, they are.


James Earl Lawson: Do they not come under the national revenue act?


James Lorimer Ilsley: They do. but I do not exercise my powers under that act. The civil service commission appoints them all.


Mr. MARSHALL:: Has there been any general reduction in staff throughout the whole department?


James Lorimer Ilsley: This item may be a little misleading. There has been a transfer of quite a number of officers from national
revenue to trade and commerce. The statistical branch has been moved from national revenue to trade and commerce.


Major James William Coldwell: I think the minister is to be complimented upon not using his powers under the national revenue act. There is another matter I should like to discuss under this item. I should like to know who is responsible for the issuance of regulations in connection with appraisals, and so on, particularly in connection with the hundred dollar tourist exemption. Last year I drew the attention of the minister to the regulations that had been issued. For example, if automobile tires were on the wheels of a car they were dutiable, and if clothing was being worn it was dutiable. At that time the minister made a statement and I believe he read the regulation. As I recall it, the regulation is that an article can be brought in under this exemption if contained within baggage. I am sorry I did not bring the particular Hansard down with me, but as I remember it the resolution of parliament was that this exemption should include articles included in baggage. There is a distinct difference between "contained within" and "included in." An article might be shipped by rail and be included in, but not contained within, baggage. It seems to me that what has occurred in connection with this particular item is a gradual increase in the restrictions which has to a large extent eliminated the intention of parliament.


James Lorimer Ilsley: No.


Major James William Coldwell: The minister says "no," but I put this before him so that he can clear it up. I note that the balance as between Canada and the United States is greatly in favour of Canada. American tourists buy much more in Canada than Canadian tourists buy in the United States.


James Lorimer Ilsley: I do not know, because there are no statistics to show.


Major James William Coldwell: There are estimates.


James Lorimer Ilsley: I have never seen any estimates of what the Americans buy here under the hundred dollar exemption.


Major James William Coldwell: I have seen them from time to time. I think it is quite logical one should make such an estimate, because more Americans enter Canada to buy woollen goods, chinaware and other things. When Canadians from western Canada cross the border into the United States, very often they have no money with which to purchase goods in that country.


James Lorimer Ilsley: There is a greater variety of goods purchased in the United States.
Trade Agreements-Policy


Major James William Coldwell: I just wanted to bring this to the attention of the minister. I notice that the United States regulations have been tightened up to meet ours. Not long ago an American tourist could enter this country, remain a few hours to purchase goods, and then go back. To-day he must remain forty-eight hours, the same as Canadians have to remain in the United States.


James Lorimer Ilsley: We did not tighten up ours.


Major James William Coldwell: I am pointing out these things because I believe the intention of parliament was one thing and the regulations are another. I notice it is close to eleven o'clock, and I shall discuss this matter at another time. In spite of the fact that we talk about lowering the barriers against goods coming into this country, the method of appraising for duty purposes retains at all times about the same amount of protection as when we had a relatively higher tariff. I think that that is correct in many instances, although not in all.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Wednesday, February 15, 1939