1941-02-20

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)

Mr. REID:: 1.	Under what Canadian company or department of government was the captured German merchantman Weser placed after her capture and arrival in British Columbia ports?
2.	Was the captured ship given a complete examination as to her seaworthy condition or any possible damage to her engines or other machinery?
3.	Were the engines, machinery or hull found to be damaged? If so, to what extent?
4.	Who was entrusted with such examination and what were the names and qualifications of the men who actually made the survey?
5.	Was any estimate made of the repairs required, and, if so, what was the total estimated sum of all repairs considered necessary?
6.	Were tenders called for such repairs?
7.	What company or companies were given the work of repairing this ship?
8.	What was the total cost of all repairs carried out, including engines, machinery and hull?


Mr. HOWE:: 1.	The Canadian Government Merchant Marine, Limited.
2.	Yes.
3.	The hull was not damaged, but was very badly covered with marine growth of hard substances. Engines and machinery, when opened up, disclosed defects to the extent of about 75 per cent; consequently repairs were necessary.
4.	Mr. William Adie, a first-class engineer with British Board of Trade certificates, and with over twenty years' service with Canadian National Steamships, was placed as engineer in charge of the work and as acting superintending engineer of the company.
Captain H. S. Hilton, a master mariner with over twenty years' service with Canadian National Steamships.
The above two gentlemen represented the company.
A representative of the Canadian Steamship Inspection branch of the Department of Transport and a representative of Lloyds Registry of Shipping.
5.	In view of the fact that the ship had been in southern waters for a long time, and that it was absolutely necessary that it should be classed in accordance with the Canadian government regulations as well as any commercial society for classification, it was necessary to open up for their inspection the engines, and all other machinery, including refrigerating machinery, tanks, steering gear, etc., to ascertain the actual internal and physical condition of the vessel.
For this work, and for such renewals and repairs as were apparent at the time, tenders were called, the successful tenderers being Messrs. Yarrows, Limited, of Victoria, B.C., who were given the work.
As the opening up of the various parts progressed, it was found that additional repairs and renewals were absolutely necessary, and to have endeavoured to secure prices on this work would have meant that as each individual
Aircraft Production

item disclosed itself a new call for tenders would have been required, which was not practicable, and, as is common practice under such conditions, the work was carried out by Messrs. Yarrows, Limited, the ship being at their plant and all opened up.
6.	Tenders were called for as referred to in answer to No. 5.
7.	Messrs. Yarrows, Limited, Victoria, B.C.
8.	Actual repairs, $106,544.


QUESTION PASSED AS ORDER FOR RETURN
Mr. REID:: 1.	How many appeals for reduction in freight rates have been made to the board of transport commissioners by British Columbia since 1925 and up to the present time?
2.	How many of these appeals have been granted?
3.	What number of appeals have been heard by the board of transport commissioners from January 1, 1940, to January 31, 1941, from the province of British Columbia, asking for a reduction in freight rates?
4.	How many of these have been granted?
5.	How many requests or appeals have been made to the board of transport commissioners or board of railway commissioners by the Canadian National and Canadian Pacific railways, since 1925 up to the present time, for an increase in tariff tolls?
6.	How many of these have been allowed or granted?
7.	What was the total cost of travelling allowances of the board of railway commissioners during the period from January 1, 1940, to January 31, 1941, and what amount was incurred by each commissioner?


AIRCRAFT PRODUCTION
[Stage Direction]
On the orders of the day:
Hon. R. B. HANSON (Leader of the Opposition):: Mr. Speaker, I rise for the purpose of requesting from the Minister of Munitions and Supply (Mr. Howe) a public statement with respect to a matter of vital public importance, namely, the present unsatisfactory state of aircraft production in Canada, and particularly with respect to the alleged failure of the wholly government-owned corporation, Federal Aircraft Limited, to function.
I make this request at this stage and in this manner, rather than in the form of a motion for the adjournment of the house to discuss this definite matter of urgent public importance, on the ground that we have no wish in the world to embarrass the govern-

ment's war-time production plans. There has, however, been so much delay in the production of aircraft that it is quite apparent that the government's announced programme, made on several occasions and as long ago as nine months, has been a complete failure.
Federal Aircraft Limited was set up by the minister as a government owned corporation-


Mr. HOWTE:: Order. Is my hon. friend making a speech on the orders of the day?


Richard Burpee Hanson: I am making a statement, and I think it is open to me to do so.


Clarence Decatur Howe: Is it in order for me to continue the debate?


Richard Burpee Hanson: I would ask the minister to give some consideration to what I have to say, and to use his own judgment. I do not expect him to make a complete statement at all to-day. I am doing it in this manner because I am advised that I can do it in this way, and I ask the minister and the house to hear me.


Clarence Decatur Howe: Well, Mr. Speaker, my hon. friend has made his request already; he is now making a speech.


Richard Burpee Hanson: I am pointing out what the position is, if I may be permitted to do so. No reflection on the minister or on the government is intended. That matter is too important for anything of the sort. Unless I am ruled out of order I intend to proceed.


Mr. SPEAKER:: I have already on a former occasion dealt with the matter of questions on the order of the day. I take it that questions will be asked with sufficient detail to give the minister who is addressed an understanding of the subject matter dealt with, but no expression of opinion should be given by the hon. member who asks the question. I rather think the hon. leader of the opposition (Mr. Hanson) is giving expression to an opinion.


Richard Burpee Hanson: Then with the leave of the house I ask to be allowed to continue, and if I am not I shall give the statement to the press.


Some hon. MEMBERS:: Oh, oh.


Richard Burpee Hanson: Why the laughter? It has not gone to the press yet, but it will go.


Mr. MACKENZIE KING:: I am sure there is every disposition on the part of all hon. members in the house to give my hon. friend as much latitude as may be necessary to allow him to fulfil any function of the leader of

Aircraft Production
the opposition. But there is a procedure which this House of Commons follows and which my hon. friend knows as well as any member of the House. I think on reflection he will agree that His Honour the Speaker has given a right interpretation of the procedure to be followed at this time.
As far as giving anything to the press is concerned my hon. friend is of course at perfect liberty to do that, but I might remind him of what he frequently says to me, that it is desirable in connection with public matters likely to come up for discussion in parliament to have them so far as possible brought up in parliament in the first instance.


Richard Burpee Hanson: I agree with that, that is why I am bringing it up here. I understand, then, that I am not to be allowed to proceed further?


Mr. LAPOINTE (Quebec East):: Ask the question.


Georges Parent: If the hon. leader of the opposition has some further question to ask of the minister, of course he is entitled to ask it. All that I ruled was that no expression of opinion should be given.


Richard Burpee Hanson: I am proposing to make, in addition to what I have already said, a statement of fact. I believe I am fully within the rule. And I wind up by asking the minister to give to the house a full, complete and true statement of .the position. I think I am within the rules, but I certainly bow to Your Honour's ruling if you think I am not.


Georges Parent: I think the statement
already made covers fully what the hon. member requires of the minister.


Clarence Decatur Howe: In reply to the question of my hon. friend I shall be very glad to give shortly the complete statement for which he asks.


Richard Burpee Hanson: Do I understand that I am absolutely barred from completing my statement of fact? If Your Honour rules that I am, of course that is the end of the matter to-day.


Ernest Lapointe: First, Mr. Speaker, I call your attention and that of my hon. friend .to his very last words. He says he wants to complete his statement of fact. That is not the purpose of asking questions in the house. The rules are very clear; the purpose is not to convey information, but to ask for information. It will be for the Minister of Munitions and Supply to give the facts after my hon. friend has asked his question.


Some hon. MEMBERS:: Hear, hear.
Mr.	HANSON	(York-Sunbury):	Mr. Speaker, if we are to have that exhibition of the steam roller-


Some hon. MEMBERS:: Order.


Ernest Lapointe: Who is
the exhibitor?
Mr.	HANSON	(York-Sunbury):	I	now
desire under standing order 31 to move the adjournment of the house for the purpose of discussing a definite matter of urgent public importance.
Mr.	MACKENZIE KING:	May	I	ask
my hon. friend if he has already presented to Mr. Speaker the matter of urgent public importance which he wishes discussed?
Mr.	HANSON	(York-Sunbury):	No, I
have not. If it has to go through the regular procedure it is clear that I cannot go on at this stage and at this sitting, but there will be another time when I can go on. I chose, as I stated in my opening, to put the matter in this form as a question on the orders of the day rather than to move the adjournment of the house. If I am barred, of course I shall have to stop. But I am telling the house and the country-


Some hon. MEMBERS:: Oh, oh.


Richard Burpee Hanson: -that they will not have heard the last of this.


An hon. MEMBER:: Cheap 1


Ernest Lapointe: Again,
Mr. Speaker, we call your attention to those words of my hon. friend. He says he will have another occasion, and it is exactly because he will have another occasion that he has no right to move the adjournment of the house on a matter which he claims to be urgent, the more so since my hon. friend has already spoken on that very question in the fairly lengthy speech he made yesterday in the course of the debate which is now proceeding in the house.


Georges Parent: Standing order No. 31
provides that:
(1)	Leave to make a motion for the adjournment of the house (when made for the purpose of discussing a definite matter of urgent public importance) must be asked after the ordinary daily routine of business (standing order 15) has been concluded and before notices of motions or orders of the day are entered upon.
(2)	The member desiring to make such a motion rises in his place, asks leave to move the adjournment of the house for the purpose of discussing a definite matter of urgent public importance, and states the matter.
(3)	He then hands a written statement of the matter proposed to be discussed to the Speaker,
854	COMMONS
Canada's Representation at Washington
who, if he thinks it in order and of urgent public importance, reads it out and asks whether the member has the leave of the house.
If the hon. leader of the opposition gives me a written statement of the matter that he proposes to lay before the house so that I may decide upon it, I will deal with it.


Richard Burpee Hanson: I suppose I should be glad to do that, Your Honour.


Georges Parent: This is rather a lengthy
statement, but I think the gist of it has already been indicated to the house by the leader of the opposition. He has stated himself that he can have opportunity to discuss this at a later date. I rule that it is not a matter of such urgent public importance that it cannot be dealt with at another time, and therefore I cannot accede to the hon. member's request.


EXTERNAL AFFAIRS
[Stage Direction]
Canada's representation at Washington
On the orders of the day:
Richard Burpee Hanson: There is another matter which I should like to draw to the attention of the Prime Minister (Mr. Mackenzie King) and the house, namely, a Canadian Press dispatch from Brantford, Ontario, appearing in last evening's Ottawa Journal, in which Mr. John MacCormac, Washington correspondent of the New York Times, is reported to have stated that "Ottawa had 'muzzled' Canada's official representatives 'to the benefit of the American isolationists rather than the interventionists' ",
The whole article is, I believe, of sufficient importance that it should be read to the house, but probably objection will be taken to that.
The charge here made is a very serious one, particularly when made by such a well-qualified observer, and should be dealt with immediately. There is grave unrest in the country with regard to Canada's representation in the United States; the position should be clarified at the earliest possible moment, and I invite the Prime Minister to do so.
If I am permitted I should like to read the article; perhaps it has not come to the attention of the Prime Minister.


William Lyon Mackenzie King: What is the question my hon. friend is asking me?


Richard Burpee Hanson: The question is, what is the position of Canada's representation at Washington at the present moment, having regard to the statements of this journalist? I quote:

John MacCormac, Washington correspondent of the New York Times, said in an interview here to-day that "the Dominion of Canada is in a position to play an important part as an intermediary between the United States and Great Britain, but she is very strikingly not doing it."
Former Ottawa correspondent of the Times, Mr. MacCormac said Canada is not using her great influence in Washington on behalf of Great Britain. "Canada is . . . preserving a deep and impenetrable silence at the very time when future relations between the two halves of the English-speaking world are being determined by debate over the lend-lease bill."
He said isolationists in the United States were making a talking point of that part of Canadian policy by which the statement of Britain's dollar resources in America did not include Canada's holdings. Most needed in Washington was not more Canadian representation but a change in Canadian policy. He said Ottawa had "muzzled" Canada's official representatives "to the benefit of the American isolationists rather than the interventionists."
I ask the Prime Minister, as Minister of External Affaire, what he is going to do about a position like that.


Mr. POULIOT:: The journalist is irresponsible.


William Lyon Mackenzie King: In speaking on Monday I thought I made a very frank, clear and comprehensive statement about the position of Canada at Washington, and I would refer my hon. friend the leader of the opposition to the statement I made at that time as an answer to the question he has just asked. I would say further that I was anxious to proceed this week with the estimates of the Department of External Affairs in order that I might enlarge upon some of the subjects referred to. As my hon. friend knows, I have postponed the consideration of external affaire only in order to accommodate the house. Those estimates will, I assume, be coming up for consideration on Monday next. Perhaps then if need be I may be in a position to answer further questions.


[Stage Direction]
REFERENCE TO ARTICLE IN RECENT ISSUE OF "liberty" MAGAZINE
On the orders of the day:
Hon. IAN A. MACKENZIE (Minister of Pensions and National Health): In view of the practice of quoting editorials I should like to direct a question to the leader of the opposition (Mr. Hanson) based upon an article which appeared in the February 15 issue of Liberty magazine, written by Mr. Grattan O'Leary, which contains these words:
Mr. R. B. Hanson, Conservative leader, is a well meaning man. He lacks experience; lacks

War Appropriation-Mr. Church
help; has no good fighting lieutenants; is without a research staff to keep him informed.
I should like to ask my hon. friend if that is true.


[Stage Direction]
On. the orders of the day:
Mr. G. S. WHITE (Hastings-Peterborough):: I notice in the press that registrars and officials from thirteen military districts across Canada have held a meeting in Ottawa with regard to the revision of the rules and regulations in connection with the four months compulsory training plan. I should like to ask the Minister of National War Services (Mr. Gardiner) if these rules and regulations will be submitted to this house for consideration before they are adopted.


Hon. J. G. GARDINER (Minister of National War Services):: As I understand it, under the legislation itself and pursuant to an understanding entered into last session, as soon as these regulations are enacted they will be placed on the table of the house.
Mr. WHITE; That is the point. Will they come before the house for discussion before they are enacted?


James Garfield Gardiner: No. The legislation provides that they are adopted by order in council, and they will be tabled here when passed.



WAR APPROPRIATION BILL


[Stage Direction]
The house resumed from Wednesday, February 19, consideration of a motion of Mr. Ilsley that the house go into committee on a resolution to provide sums not exceeding $1,300,000,000 for the year ending March 31, 1942, for the carrying out of measures consequent upon the existence of a state of war.
Mr. T. L. CHURCH (Broadview):: I respectfully suggest to the government that some notice should be taken of the handwriting on the wall, of the feeling throughout the country, the expressions appearing in the press and elsewhere, and that consideration should be given to uniting all parties in the country and in the house so that we may have a real wartime national government. I think the party system is one luxury we can do without during this war; there has been altogether too much of it. A great many people think the government is conducting a Liberal war, and that our war effort is not being carried on in the
non-partisan way it should be. There is some element of truth in that suggestion, I am afraid. I believe in the principle of confederation, each for all and all for each, which is the old Cornish battle cry.
Now the government is proposing a salvage campaign. I have been a consistent supporter of this proposal. On June 5 of last year I moved for a return in connection with the export of pig iron, scrap iron and copper to Germany, Russia, Japan and Italy, and I also proposed a campaign to gather up all the available scrap material in the country. That suggestion was taken up by the street department of Toronto, which realized a large sum of money through the collection of waste material. I do not wish to minimize the importance of this work, but I think t'he government are just three years too late. Some further very valuable suggestions along these lines were offered last Saturday by Mrs. C. D. Howe in an interview at Port Arthur, when she spoke about the importance of not wasting things in Canada during war time.
The revelation of the strength and skill of the German forces in their occupation of Norway, Holland, and Belgium, shocked the people of this country and the United States. And I can say this, that it was the collapse of Belgium and France which gave the people the urge to do their duty in the war. On the Atlantic and the Pacific, Canada is protecting America's shores; troops have been established there, and air force zones have been set up. Why should not the United States, as it is helping Great Britain, ' assist Canada to finance the war, in connection with munitions and other matters? As I read the lease-lend bill, the debates so far which have taken place on it, and its interpretation by the attorney general of the United States, it seems to me the government might consider obtaining a loan in the United States at an interest rate of two-thirds of one per cent. That was the figure at which the former minister of finance said moneys could be borrowed. I believe a large loan could be secured at a very low rate of interest, notwithstanding any difficulties presented by the exchange situation, which could be eliminated by a conference. In that way, too, we might go far towards eliminating the small and petty annoyances set up by the foreign exchange situation.
In the old days in Canada everyone owned a house, a small property, a farm, or a garden with some flowers. We have been slow in Canada to see how the rights respecting private property have been taken away from us. To such an extent has this taken place that the people of Canada have, in a measure, become a proletarian people. As I said before,

War Appropriation-Mr. Church
if the government needs money it must, no doubt, take the easiest way of securing it in ordeT to finance the war. But what I do object to is the way they are doing it. In my opinion the government should charge 70 per cent of this war expenditure, if of primary importance -not secondary-to capital, and about 30 per cent to income.
Industry cannot continue any longer to carry the burdens, restraints and artificial barriers which are placed upon it by a score of boards. I do not know how business men can continue to conduct their operations or businesses with all the boards which have been appointed in this country. We have state socialism, all along the line-a totalitarian state. Nobody wants to conduct a business, because of the artificial barriers and burdens placed on wholesalers and retailers by the proposed measure and by the proposals to conscript industry and wealth.
The municipalities are starved to death by federal and provincial powers grabbing their revenues, and the time is coming when they will have no money with which to carry out some of their functions. There was established by the British North America Act overgovemment and overtaxation through a duplicate municipal system, resulting in a triple-header system of taxation, with dominion, provincial and municipal budgets. The government of the day comes along with a scarecrow programme, saying to the provinces and the municipalities, "We will take this tax and that tax from you. We will impose this regulation and that regulation, and take this and that away from you." The result is that the municipalities are starved and the taxes are unloaded on real estate. The municipalities cannot continue their work. There is a proposal to reconstruct industry, trade and commerce and our financial institutions in war time, and to conscript industry and wealth. If we do, we will kill our war effort, because the two industrial provinces which pay eighty per cent of the taxation do not believe in such a system.
Another matter the minister would do well to look into is the duplication of our railways. Why could not something be done in that regard to eliminate wastage, as has been done in Great Britain and in the United States? It is one luxury which we should not have. The minister is trying to get money from the taxpayers and from business men. There is no more money to pay taxes; heavy taxes are killing them. The small man in the industrial centres cannot live.
Great Britain has always protected- Canada; she has never failed. Even to-day we owe to her our freedom from invasion. There is a great deal of talk in Canada to-day, but let

me say that Canada is not going to be talked out of the British empire. Canada will -have to be fought out of the empire.
I was surprised at the remark made yesterday by the hon. member for Selkirk (Mr. Thorson); it ill becomes him to sneer at those in the house or out of it who are standing behind the war effort. The hon. member has preached pacifism and isolationism in this house, and as late as March of 1939 he suggested that we follow a state of neutrality. I opposed his view in that regard-he is a respected gentleman and I do not wish to criticize him too severely. It was he who went to the assembly of the League of Nations only a few months before Munich, and it ill becomes -him to sneer at those in this house and out of it who saw this disaster coming and urged- upon the House of Commons and the country that we rearm and support the mother country all along the line. Had that been done, we would not have this resolution before us to-day-a resolution which involves the appropriation of over a billion dollars, being part of a total which will amount to three billions before we shall have finished.
I hope the minister will consider methods of reducing expenditures. We could eliminate a great deal of waste. For instance, the League of Nations has cost $4,500,000, and one gentleman said upon his return from meetings of the league that it was the most wonderful joy ride in the world. They come back here saturated with it. They get the virus in their systems, and throw it all over the country.
That is what is the matter with this country. The pacifists caused this war. There are many unnecessary expenditures. For instance, we spend money on useless legations. Why do we need a legation at Dublin? Why do we have to have a man who sits at a table with a representative of Germany? Moreover, Eire is not even a British dominion; it is neutral, and a republic. Why do we make expenditures of that kind?
There is one point on which I congratulate the minister, and that is the action of the press in explaining Canada's three billion dollar budget, because that is what the whole thing amounts to. I am sure the minister and the government must be pleased with the way the public press has put the appropriation bill before the public.
This is what has been said by Mr. Arthur Mann, who was at one time editor of the Yorkshire Post:
The press is in a double sense an intermediary between the government and the public. It both provides a channel by which ministers can keep the electorate informed of their activities, and it also serves as a kind of barometer, from

War Appropriation-Mr. Roebuck
which the government can gauge the feeling of the country. A press subject to official pressure will give a wholly false impression of public opinion. The correspondence columns of a great newspaper should indicate to the government what people are thinking, provided that the letters published are a true reflection of the letters received. A journal which refuses to publish letters in disagreement with its editorial policy is failing in its duty. In this connection the establishment of the ministry of information by the present government betrayed, in its original form, a lack of confidence in the ability of the press to fulfil its proper functions. The ministry was designed to act as a link between the government and the country, supplying the public with information and keeping the government in touch with popular feeling. Both these tasks lie within the province of the press and, if it has not always succeeded in performing the second satisfactorily it is perhaps the fault of those who would interfere with its independence.
We have set up here an information bureau, but it is a bureau which has no information, and might well be eliminated. In this connection I would like to pay tribute to the press of Canada for the manner in which they have handled the news of the past few months, particularly to that great newspaper, the Evening Telegram of Toronto, whose campaign to aid British war victims was such a notable success. The work of that newspaper has been of great assistance to those in authority, and to those who are carrying on war services. It is a work which in this hour has cheered the hearts of the people in the mother country.
The measure before the house raises the whole question of our contribution toward the campaign on land, on the sea and in the air. The defence of the realm at a time like this is of the utmost importance; all other matters are unimportant and secondary. The war is Canada's first and only problem. No one knows in what position our country may be at the end of this year. The people of Canada have been too complacent.
As there will be another opportunity for me to say something in this regard, and as other members will no doubt wish to speak, I shall take little more of the time of the house. I believe the minister himself appreciates what we owe to the British fleet. Were it not for the protection that the British fleet provides for the United States and Canada, the amount involved in this war appropriation budget would be considerably greater. As a prominent theologian, Doctor Percy Dearmer, said, the people of Canada will do their duty in the war. Referring to the empire, this gentleman said that Englishmen know the truth, that they feel in their bones the conviction that we owe all that we are to the reformation. From the moment that the reformation parliament of the sixteenth century got to work,
England, which had been a remote little island at the edge of Europe, leaped up and became a great nation, a pioneer of religious freedom and political liberty, and there came the great blaze of Elizabethan literature and the flow of modem philosophy and science from which there has been no setback. The English bible is a bond of unity to all throughout the world who speak the English tongue.
Canada is not going to be talked out of the British empire; Canada will have to be fought out of the British empire. We can rejoice in the fact that what we have to-day in this country in the way of freedom we owe to the mother country. I only hope that the government will give heed to the handwriting on the wall, will do its duty and give Canada a real war administration. I realize that hard work is being done by the Prime Minister (Mr. Mackenzie King), his other ministers, the leader of the opposition (Mr. Hanson) and the leaders of the other groups to my left. I know what they have done to help the house transact its business. I believe it is the hearty desire of every hon. member that the war should be carried on to a conclusion. The only reason for recriminations and references to the past is to stir up action at the present time. After all is said, criticism is the tonic which urges governments to action.


Mr. A. W. ROEBUCK (Trinity):: Mr. Speaker, each one of the speakers on the other side of the house appears to be adopting the plan of closing his remarks with a call for a real war administration. The suggestion is being made again this session, as it has been in the past, that certain members of the administration should resign in order that other strong men may be brought in in their places. That was the closing suggestion of the hon. member for Broadview (Mr. Church). There is something to be said for any proposal to strengthen anything. The problem of life is to gather strength, and if there is an opportunity to strengthen the government, let us strengthen it. No matter how good it is now, if we can make it better, let us do so.
However, I should like to see the members of the opposition demonstrate the bona fides of their suggestion. During the last session of the house someone said that if the government required strengthening, the opposition certainly required it much more. If it is proposed that members of the government resign in order that mythical men from the outside may come in, the opposition is in a position to demonstrate its bona fides by certain of its members resigning in order that these great men may be brought in in their places. This would show that hon. members opposite really mean what they are saying.

War Appropriation-Mr. Roebuck
We would then have a chance to look over these men, and if they measured up, we might do something about it. But as long as hon. gentlemen opposite keep their seats and advise us to resign, they can hardly expect that we will take their advice very seriously.
The hon. member for Broadview suggested that something should be done in connection with the amalgamation of our railroads. Evidently the hon. member has not yet discovered that the only reason put forward in the past for amalgamation is no longer true. This year our national railway will operate for the first time without a nominal deficit. It has not had a real deficit for years, but this year-


An hon. MEMBER:: What?


Arthur Wentworth Roebuck: Some hon. member says "what?" Our national railway has not had a deficit for some considerable time. It has paid its operating expenses and has had a balance year after year for many years. The deficit which my hon. friends opposite talk about is caused by its inability to pay the interest on the accumulated debts of the privately-owned railroads which were combined into the national system, debts which had accumulated since confederation. At the present moment the Canadian National Railways is actually paying the interest on these debts, as well as its operating expenses.
I submit that our railways are of great advantage to this country. Canada would not be the country she is were it not for our railways. Amalgamation should be carried out only on the basis of necessity, and that necessity has now passed. There should be no further proposals to amalgamate.
We are here this afternoon to discuss the important proposals made by the Minister of Finance (Mr. Usley). Mark Twain, the famous humorist, in his book The Innocents Abroad, gives a list of adjectives which should be used when polite people are looking at a great picture, and suggests that a knowledge of these adjectives should be considered as part of a gentleman's educational equipment. There are fashions in phrases- very much so. There has developed in this house, and from the newspapers it would seem that there has developed also in the country, the fashion of talking about this war appropriation in extravagant 'terms. I have heard with regard to it such adjectives as "staggering," "stupendous," "astronomical," and so forth. A billion dollars is quite a sizeable amount, even if one disregards the $300,000,000 annex. It is more than the people of Canada have ever before been asked 'to advance. It dwarfs the figures of the last war. Yesterday the hon. member for York-Sunbury (Mr. TMr. Roebuck.]
Hanson) figured out that it meant $250 per head for the population of Canada. He said that we were prepared to carry through even if it took our last dollar. That is heroic, and I am glad to see that kind of resolution being shown by hon. members opposite and on this side of the house, but it will not 'take our last dollar. I am inclined to deprecate the extravagance of language which is being applied to this appropriation. It will not take our last dollar, and I do not like to see phrases used which seem to suggest the possibility of failure on our part.
The amount mentioned in the resolution is a very large sum, but it is not a sum beyond the capacity of the people of Canada to pay. With all due respect to those who seem to be nervous at the moment, in my judgment it is not a sum which should strike terror into the hearts of our financial leaders. It seems to me that the nervousness over this proposed appropriation arises from the fact that we are talking in terms of money instead of in terms of goods produced. That is why fear grips the hearts of many people and why we are wondering whether this effort will be successful.
Nearly all of us in this house lived through the last war and have vivid memories of the conditions which prevailed then. Most members will recall how Canada during that war emerged out of a period of severe depression into one of very great activity. The depression of 1914 lasted for some time into the war; then it mysteriously disappeared and Canada went to work. Yes, we did go to work. Hon. gentlemen will remember how we shipped goods across the sea to the utmost capacity of the ships that sailed the oceans. The bottleneck rvas not the producing power of our factories in Canada and the United States; it was the capacity of available shipping to carry the goods across the sea. We are talking now about borrowing money, but we did not borrow the things that we shipped to France to be boiled down in the cauldron of war in the struggle of 1914-18. We made them. We brought forward from the past scarcely a pound of food or a pound of wool. We certainly borrowed not one pound of powder from the future. We made these things from hand to mouth at the time and shipped them across the sea in greater quantities than Canada had ever produced or shipped them before. And this point I would like hon. gentlemen to note that while we were producing more than ever before and destroying at a rate that would have astonished us in years gone by, our working people were better fed, better clothed, better housed, and had more loose change in their pockets, than they ever had had in the years before or have had since. What is the explanation

War Appropriation-Mr. Roebuck
of that anomaly? It lies in the fact that prior to the depression of 1914 the producing power of the Canadian people was lying idle, and it has been half idle ever since. Even to-day it is partly idle.
The Minister of Finance (Mr. Usley) has estimated the national income of the Dominion of Canada at five and a half billions of dollars, but that estimate is made during a period when Canada is partly idle, notwithstanding the expenditures that have been and are being made and the demand for our production. We are spending on war services, roughly three million dollars a day, the equivalent of S3 per day in wages of a million men; and yet the Minister of Labour (Mr. McLarty) in a recent statement declared that even to-day in Canada quite a number of thousands of employable people are still unemployed. The figure he gave-I am not sure of the exact amount, but it was a fairly big figure-did not include the men who have no work to do but have not registered at any relief office or done anything to call themselves to the attention of the authorities-those who are just getting by. Nor did it include, of course, those who are only half employed-and their number is legion. Nor did it include those who are unproductively employed. Nobody could count these classes I have named. It is quite impossible to get statistics with regard to them, but my thought is that if they could be counted [DOT]they would number in the thousands. If under these conditions the national income at the present moment is to be estimated at five and a half billions of dollars, I suggest that if more favourable industrial economic conditions could be brought about and our population put to work, there would be no difficulty at all in adding another couple of billions of dollars to our total production.


Mr. ILSLEY:: If the hon. gentleman will permit me, just to keep the record straight, the estimated national income for the next fiscal year is $5,300,000,000, not $5,500,000,000, and that contemplates the employment of, I think, two or three hundred thousand more persons who are not employed to-day.


Arthur Wentworth Roebuck: I thank the minister for that further information, but I do not think it destroys the logic of my remarks. The minister's estimate is based on next year's production and includes the employment of quite a large additional number of men. But I am satisfied that even when these things have been accomplished, when this estimate has been justified in fact, the producing power of the Canadian people will not even then be anything like exhausted.
I have heard it stated, and I think it is probably true, that one factory, a large one
in the city of Toronto, could make all the tires that are required for all the cars in the whole Dominion of Canada, and the others fight for their position in the sun rather than their producing position. And so with many other lines of production. If we called for production and let the producers free so that they could produce to their maximum, the producing power of the Dominion of Canada would be almost unlimited. Of course it is not unlimited, but it is very, very great. I deprecate, sir, the continuous talk about tightening our belts. I do not like that phrase. In my judgment it is a mistaken phrase, because what little we could gain by penury in the household, by saving and stinting, would be much less than would be gained by a little more endeavour in the matter of production. Instead of choosing the watchword of save and stint and spare, we should adopt the watchword of produce and then produce again and more production. Let it be noted that in order to get a maximum of production in our society, or any society like ours, your men and women must be well fed, well clothed and well housed. Your maximum results must not be achieved by economies where economies are not in order now. You can do far more by the very reverse.
According to figures which were produced in the house yesterday afternoon, already there has been a considerable improvement in Canada's producing power. The preliminary figures for 1940 indicate that Canada's national income was $554,600,000 higher than that of 1939. That is to say, although many people thought that we were working to our limit in 1939, the actual fact is that the production of 1940 was over half a billion dollars greater than the production of 1939. The national income per capita in 1940 is set tentatively at $402, as compared with $357 for the previous year. The production of the Canadian people has increased approximately $50 per capita in this past year-indicating, I suggest to the house, that a further increase of our producing power is by no means out of the question.
One would naturally ask, how can such better conditions be brought about? I do not know that I am prepared to act the Solon in that regard, but I think I can see some things we should not do. I can say how not to do it, if I cannot say very explicitly just how to do it. One of the things which I think this country as well as its rulers should ponder is that if you are to get a maximum of production from your people you must avoid to the very extent of your ability restrictive legislation. In order to obtain maximum producing power your producers must be free. Let me illustrate-perhaps not very well-

War Appropriation-Mr. Roebuck
what I have in mind. When this war broke out the first thing we did, apparently thinking it necessary, was to restrict the travel conditions between ourselves and the United States. So did the United States; they thought they had to tighten up travel conditions from their country to ours. So we went on, on both sides of the line, to a system of passports and visas, exchange regulations and departmental interference, and we succeeded in tightening up- there is no doubt about that-so much so that we checked business as between the two great and neighbouring countries and went some distance towards ruining our tourist trade by too much restraint. I point this out because I want to emphasize the fact that restrictive legislation is a two-edged sword which cuts in both directions and is likely to destroy more than is gained by it.
Let me give another illustration. Canada has had some very sad experiences in high protective tariffs. We had the experimentation of the Bennett regime.


Mr. MacNICOL:: The best the country ever had.


Arthur Wentworth Roebuck: Well, the hon. gentleman must have been a beneficiary of Mr. Bennett's tariffs, but most of those who paid do not feel that way about it. The high tariffs of the Bennett regime were restrictive legislation carried to an extreme, and this destroyed a very large amount of the business and producing power of the Canadian people. Yet when we entered this war the first thing we did was to increase our tariff by ten per cent and abolish the free list. I am not saying we should not have done that, but I realize what its effect was. It might have been inevitable. It might have been necessary. But let us look at it and look it plainly in the face. We abolish the free list; we cut down our trade with our neighbours, and I am under t'he impression, Mr. Speaker, that we seriously decreased the producing power of our people.
The importance of trade restriction is, of course, very great. We have discussed it in this house for many years. It has been a subject of debate ever since I was a boy at school. But, almost equal to the evil effects of too high a restrictive tariff you get those deadly interferences with industry itself within the country-such, for instance, as the boards of control, and these individual controllers who boss industry in our country at the moment. Whether or not they have axes to grind I do not know, but I do know that you cannot have maximum production among business men and manufacturers and farmers and other producers while you attempt to interfere with and boss them and direct their efforts.

My point is that if the Canadian people are to produce as I hope and expect and confidently anticipate they will during this coming year, the country and t'he government should realize that, to the extent of our ability in view of the war conditions under which we work, they should be left free.
Almost as important as free men and their ability to go to work is the putting to work of our natural resources. Both should go to work. Both must go to work if we are going to carry this load in ease and comfort. Let me give an illustration, not from our own community but from across the water-that is always safer, because you do not tread on any local toes. I hold in my hand a document entitled "Bulletins from Britain." It is published by the British Library of Information. It quotes Mr. Robert Hudson, Minister of Agriculture, who, it says, has just told the story of the successful efforts to revive agriculture in the homeland. It says:
For a period of 20 years, after a brief revival in the last war, half the agricultural land in Britain has suffered a steady deterioration. . . . Over large areas fields were used merely as exercising grounds, the cattle on them being fed on imported foodstuffs; whole districts, once fertile and employing 40 men on every thousand acres, were without a single ploughman; staffs were cut down, drainage and hedges neglected, buildings allowed to fall into disrepair. . . .
The government has made a survey of the entire problem, established agricultural committees in each county to visit every farm and determine what grass fields are suitable for ploughing.
Already between three and four million acres have been ploughed, land that had been "lost" for centuries has been made fertile again.
This is not a new statement of fact: I have seen it from other sources, but this is from the Minister of Agriculture of Great Britain. One thing in the statement that strikes me is the utter waste, in the days that have gone by of the three or four million acres now ploughed, and another is the resolution which the British government is demonstrating in bringing these acres back into production. I am wondering how many lost acres there may be in the Dominion of Canada, how many natural resources such as these in England are lying fallow and unused; whether it would not be in order for the government of this country to make a survey of our natural resources and see that they too shall go to work. Not that they should necessarily be ploughed, because that applies to agricultural land alone; but of all our natural resources, those of the towns, those of the countryside, those of the forest and mining areas, how many are half used or not used at all, and how many should be used at this time when producing power is a term which everyone should use as a slogan?

War Appropriation-Mr. Green
The hon. member for Broadview (Mr. Church), in his speech yesterday, made this statement:
Canada is a country with unlimited natural resources, an abundance of raw materials, a balance of idle labour and capital and the technical resources which can be drawn upon to increase production.
There are times when I do not agree with the hon. member for Broadview, but it seems to me that there he has stated a truth which is vital when we are carrying on a war of production. These natural resources in the hands of a free people are the implements of war which may win the present contest with the German dictator. It has been said, and I think truly, that this war will be won by an attitude of mind. It is clear that the burdens of the war, great as they are and will be, will not be carried indefinitely by the Canadian people any more than any other people unless they are carried with the enthusiasm inspired by a cause. Just the keeping of the German wolf from our door, just holding the Maginot line of democracy-static, is not good enough. We must do more than that. If democracy would be militant it must be on the march, not standing still or holding a Maginot line. It is a mistake to think that our reforms and reform efforts can stand idle and fallow until after the war has been won. With the close of the war will come disillusionment and frustration and the problems of the post-war period. It is a mistake to turn our minds from all social and economic reforms and let them lie fallow until the war has ended. It is positively necessary, that we show to our own population and to the world that freedom has more to give to the individual than has Hitler, and that we hold before our eyes the goal of free men, the vision of a better and kinder and more prolific world in which to five. There is no better time than now for considering some of the things, upon the road to which we have already travelled a certain distance.
At the first session of this parliament we enacted an unemployment insurance measure. It was a grand measure, one of the finest pieces of progressive legislation that has been enacted since the Labour department was first organized. It met with almost no opposition. It will in all probability bring a very great deal of humanitarian good. But why pause? If we are a democracy fighting for the right to improve our social conditions, this is not the time to pause. In the Sirois report was a recommendation for unemployment insurance. But there was a further recommendation that the dominion government should have the constitutional right to enact laws for minimum wages and maximum hours, and
to set the age for employment. Why should we not use this occasion to clear away the constitutional obstructions in the way of our passing a minimum wage law applicable to all Canada? Why should we not clear the way for the enactment of a maximum hours law, at this time when everybody is busy and such laws are in the people's minds? Why should we not now give ourselves the right to set the age of employment? Why should we not demonstrate to the people whom we are asking to support this great war effort that we, the democratic House of Commons of Canada, are interested in their social welfare and that we are on the march? Democracy no longer static; democracy moving forward!
There is a certain challenge, Mr. Speaker, in this war resolution. There is a challenge to us to meet this demand which for the present is for $1,300,000,000 to meet it with both courage and intelligence-courage to face the task which is now presented to the Canadian people and intelligence to carry out that task successfully.
There are three thoughts I would like to leave with hon. members in closing these remarks. The first is that more important than almost everything, certainly everything economic, is the positive necessity of winning this war. I need not elaborate that statement; it would be futile to argue it, but first and foremost the requirement placed upon the shoulders of all of us is to win this war. Secondly, to defeat the armies of slavery we must preserve the freedom of action of our own people; freedom to produce-elbow room, if you like-and therefore freedom to fight. The third thought I have partly expressed already. If democracy is truly to win this war, democracy must strike its tents; it must be on the march. It must march in freedom to a better freedom. It cannot be static. We must march forward with our heads up and our banners flying if we are to carry our people with us triumphantly through the difficulties of this war. This, Mr. Speaker, is a war in which victory must be won by the heart as well as by the head and the hand.


Mr. H. C. GREEN (Vancouver South):: Mr. Speaker, earlier this afternoon the house seemed to be sailing into somewhat stormy seas. However, the winds-and I use that word advisedly-have now subsided and we are in smooth waters once more. Under such favourable conditions I hope to place before you to-day one proposal which I believe would be of great help at the present time. I should like to give my reasons for this proposal rather carefully and deliberately and perhaps not as briefly as I might do in other circumstances.

War Appropriation-Mr. Green
As hon. members know, the resolution, under debate precedes an appropriation bill which will provide $1,300,000,000 for war purposes during the next fiscal year which ends March 31, 1942, and the Minister of Finance (Mr. Ilsley) stated that even this sum might not be sufficient. This amounts to over three and one-half million dollars a day. But the minister went on to warn us that he would require $400,000,000 for the repatriation of Canadian government securities held in the United Kingdom, the money to be spent in financing United Kingdom purchases in Canada. This means more than an additional one million dollars a day for the period of the next fiscal year. Then the minister went on to warn us further-and he was quite right in doing so-that we would require $433,000,000 for dominion non-war expenditures, which again means over one million dollars a day. This makes a total of over five and one-half million dollars a day to be paid by way of taxes or loans to the Canadian government by the Canadian people. Then, as a final blow, the minister said that the provinces and municipalities will require from the Canadian people another $575,000,000. All this constitutes a very, very severe test for the Canadian people. It means sacrifices, great sacrifices; it means a lowering, and probably a drastic lowering, of the standard of living of our people.
So much for the situation here at home. Now let us look abroad. A few weeks ago Hitler and Mussolini held a conference; they seem to be holding more conferences now that things are not going quite so well for them. From this conference there came to the peoples of the world, and in particular to the people of the British empire, this message: "The world stands on the brink of historic events. We will bring the British empire to destruction in 1941." Let there be no mistake about what we face, we who belong to the British empire. Just four days ago, when the house reassembled, our own Prime Minister (Mr. Mackenzie King) warned us most clearly and quite properly of probable German and Japanese attacks. Then he used these words, which appear at page 809 of Hansard: In the present circumstances it is more than ever necessary to steel our hearts and minds to the magnitude of the effort, and of the sacrifice, that will be demanded of us over a considerable period of time and, in a special measure, throughout the next few months.
There can be no doubt whatever that the Canadian people are about to go through a very, very severe testing time, probably the most severe in the history of Canada. I hasten to say that I believe Canada will come safely through that test and will emerge

a finer nation, principally because of the courage, the faith and the good sense of Canadian men and women. But nothing would be of greater help to the Canadian people than that we, their representatives, chosen less than a year ago, should so carry on that they may have the utmost confidence in the Canadian parliament. Far more confidence in parliament is necessary now than in peace time. Our problem in this House of Commons, and the problem of the ministry, is to gain the complete confidence of the Canadian people.
We have just returned from our constituencies. I have just returned from the Pacific coast. We have been in touch with the people we represent; we have been in touch with the nation, and I doubt whether any member of this house would deny that at the moment neither the House of Commons nor the ministry enjoys the complete confidence of the people. Certainly they do not enjoy any more than the confidence which normally would be felt in a peace-time government; and that, Mr. Speaker, is not enough under present conditions.


Mr. MUTCH:: It is not true, either.


Howard Charles Green: It may not be in your riding, but I am doubtful.


Mr. BRADETTE:: It is not in mine, either.


Howard Charles Green: Why should that be? I believe that the private members who, after all, are the back-bone of this house, are striving to give the type of leadership required, and I know they are capable of doing it. But we are so organized here, we have been handed down such a parliamentary organization, that it is very difficult to gain the complete confidence of our people at this time. They, the Canadian people, realize the awful crisis facing them. The Minister of Finance put it clearly when he said on Tuesday, as reported at page 824 of Hansard:
We are asking the house for this appropriation because we recognize the fact that propably this will be the most critical year in the history of civilization.
Yes, "in the history of civilization"-and he is quite correct. Our people realize the situation; they realize they are facing a crisis. They know it, because they are sending away their sons, their husbands, their brothers and sweethearts. And, saddest of all, children are sending away their fathers.
The Canadian people have always been somewhat distrustful of political parties, as such-and of all shades. That includes the Conservative party, to which I belong, as well as the other parties represented in the house.

War Appropriation-Mr. Green
In my opinion, the people are fearful that party polities and party welfare-not restricted to any one party, let me emphasize-are influencing or are apt to influence the deliberations and decisions made in the house. That distrust is deepened by each partisan speech made in the house. Every time a dog fight between parties takes place in this chamber, that distrust deepens. We just about had one this afternoon. It is confirmed time and again in British Columbia, and I have no doubt in the other provinces of Canada by the actions and the talk of the government hangers-on. Probably we would have the same condition if the Conservative party or any other one party were in power.
I do not blame the ministry. I blame the hangers-on, who are out across the country. I am afraid it is impossible, under our present organization, to shake them off. There is no enthusiasm for action taken by this ministry to-day. There will not be enthusiasm, unless some change is made right here in Ottawa. It may be difficult for the ministry sitting here in Ottawa to realize the truth of that statement. Ottawa is a very poor place in which to get a realization of what is going on in other parts of the country. But that situation, in my honest opinion, does exist to-day, and I have reached the conclusion that with the house organized on a strictly party basis, as it now is, it is quite impossible to increase the confidence of the Canadian people either in the ministry or in the house, and that there is far more likelihood of there being a decrease in such confidence, as time goes on.
The Canadian people are sound in believing that in a crisis of this kind the House of Commons should not be carrying on the business of this country on a political partisan basis because in this war, as everyone in the house knows, there is no real issue between the parties. We have one aim. We have a common aim: To win the war, and to win it just as quickly and with as little suffering as possible.
Further, each member in the house knows that if we do not win the war there will be no further need to worry about parties or parliaments; for they, along with all other democratic institutions, will have been liquidated, and the freedom of the individual Canadian will be a thing of the past.
We have moved into a new world, a tougher world, and we must meet these new conditions with a new type of parliament. Great Britain did it, but did it only under compulsion and in the face of imminent invasion. The time has now come for Canada to do the same thing. I implore members of the house to realize that fact. It should 'be done quickly,
before the blitzkrieg comes. We know a blitzkrieg is coming. The Prime Minister has told us; we have been told by others, and it is only reasonable to expect that it will come. The change will have to be made then. I ask the house and the people of Canada: Why wait? Let us do it now so that we will be organized to meet this thing which is rushing up to strike us.
There are different ways of changing the methods of the House of Commons. There are different ways of adapting them to meet the rapidly changing world conditions. I do not pretend to have the only way or even the best way. But I would ask hon. members to consider the whole position, and to think of ways by which we can bring our Canadian parliament up to date.
I propose that the Prime Minister form a "victory" ministry-I repeat, a "victory" ministry, in which the members of each party in the house, Liberal, Conservative, Cooperative Commonwealth Federation and Social Credit, would have direct representation. The Prime Minister had the right idea when, on September 12, 1939, during the first war session-over seventeen months ago-he made this statement, as reported at page 157 of Hansard:
So far as I am concerned I look upon myself to-day, with all due humility, much more as the leader of all parties in this country united in an effort to do what we can to preserve and defend the liberties of mankind.
Those were noble words. I was inspired by them, and I think every other hon. member present on that occasion was so inspired. In my opinion, the Prime Minister meant what he said. Obviously, at that time he thought it would be possible for the ministry of the day to obtain the united and whole-hearted support of the Canadian people, despite the fact that it remained a strictly one-party ministry. For the sake of Canada I 'hoped he was right. But events have proved that it was a case of expecting too much. Happenings in this chamber this afternoon have proved' that fact. We need not go any farther back than to-day's sitting of the house. It is now clear that enthusiastic and wholehearted support cannot be obtained' from our people for a House of Commons or a ministry organized as is the present one.
I propose, further, that such "victory ministry" should invite suggestions and constructive criticism from all private members in the house. In other words, let us make this a real parliament. Let us make it a gathering of the representatives of our people. To-day Liberal private members cannot readily suggest or criticize in the house. In practice, they are confined to suggestions in caucus, a secret meeting. They are deprived of the



S64 COMMONS

[Stage Direction]
War Appropriation-Mr. Green
unrestricted liberty of placing their views before parliament, and thereby, before the people of Canada.
Mr. TURGEON:: Nonsense.


Howard Charles Green: Not entirely, perhaps; but
everyone who is honest with himself must admit our procedure here is such that it is very difficult for a private member on the government side of the house, no matter which party might form the government, to express his opinion in the chamber. We have to consider things as they are to-day, not as they were five years ago or fifty years ago. Our present situation is that in this nineteenth parliament about two-thirds of our membership are forced to be silent.


Mr TURGEON:: That is not so.


Howard Charles Green: It means, too, that about
two-thirds of the ability of the l:?use cannot be put to full use. I have said two-thirds of the ability of the house; perhaps it is more than that. I do not think so, but it is at least two-thirds of the ability of this house. And it means something still more serious. Two-thirds of the people of Canada are unable to have their views made known in this Canadian House of Commons under our present set-up.
Someone may say that if these proposals are followed, there will be an end to criticism. I suggest that if they are followed, the country need have no fear whatever of there being a lack of effective criticism in this house.
In conclusion, may I say that I realize to the full that changes of this type are difficult to make, difficult for the government, for the official opposition and for the other opposition parties. But I do throw out the challenge to hon. members. I believe that if we change our way of carrying on the government of this nation, we can gain and retain the complete confidence of the nation, just as that great man, the Right Hon. Winston Churchill has done in Great Britain. We have been elected since the war started; we have been elected to lead our people through this war, and I am convinced it can be done most efficiently by making the changes I have mentioned. And I am convinced that the effect upon the war effort of the nation and upon the spirits of our people would be astounding.


Mr. GORDON GRAYDON (Peel):: 

War Appropriation-Air. Oraydon
absence of any amount required for the Canadian National Railways, which so far as this government is concerned may be regarded as an accident, the reduction is only one per cent. Surely the Minister of Finance did not have in mind that kind of drastic change in the habits and modes of life of the people of Canada, because I can tell him that there are in Canada, and in my riding particularly-and I was glad to hear a member to my left say something about this-working men who in their factories, in the war savings campaign, have regularly subscribed to the extent of one hundred per cent of the personnel.
In many factories the entire payroll of employees has pledged its support, and that means much more than one or even four per cent of their wages. Contrast that with a [DOT]reduction of only four per cent in the estimates. I was hoping, and I say this in no spirit of carping criticism, that the government would in the estimates themselves give some kind of leadership to the people of Canada as an example of what the government expected of the average citizen in furtherance of our war effort, many of whom are contributing from their own pockets a much larger percentage than one or even four per cent of their weekly incomes.
Turning to another subject, the problem of agriculture is more clearly before the minds of the people of Canada to-day than it has been in the last fifty years of Canadian history. There must be many members of the house who know what the ordinary man is saying about agriculture to-day. Yet we have sat in the house from Monday, when the session was resumed, until Thursday, and not a word has been said by the government as to what it proposes to do to solve the agricultural problems of Canada as a whole. Where are the members of this house? Where is the government? Where is the Minister of Agriculture (Mr. Gardiner)? Have they nothing to say on a problem that looms so large in Canadian economy as agriculture? But, you may say, this is purely a domestic peace-time problem. I deny that with all the emphassis at my command. Perhaps at one stage in our history agriculture may have been regarded as a domestic and peace-time problem, but to-day, whether you recognize it or not, the whole industry of agriculture is tied up with the efficiency of our war effort. Surely the government have not forgotten that not more than two or three weeks ago there were meetings of agriculturists interested in all branches of agriculture in this dominion who, by resolution and otherwise, pleaded with the government for some real approach to a solution of the problems not only of western agriculture but of eastern agriculture as well. Those resolu-

[DOT]tions must have been forwarded to the government and considered in cabinet council. Surely the government must know that there is not a moment to be lost in dealing with the present-day problems of Canadian agriculture.
I wanted to say to the Minister of Agriculture, who I am exceedingly sorry is not in his seat-and on that account I may curtail what I had intended to say-that it is time we had a full-time dominion minister of agriculture. I am not suggesting for a moment that if the government believe the present Minister of Agriculture is good enough, he should not be left there. But at least give him a chance to give his undivided attention to agriculture, rather than dividing his attention between two portfolios in time of war. Either the ministry of national war services should not have been set up as a separate ministry, or else it is of sufficient importance to require a separate minister. A full-time minister of agriculture is one of the things that agriculturists all over the dominion are demanding of the government.
I know personally something about the situation of agriculture. The Minister of Agriculture was kind enough to say that by no stretch of the imagination could I be called a farmer. I retorted in kind during the last session, and I repeat it now. But at the same time I will take a back seat to no one in this house in my interest in agriculture and in my endeavour to do something for the agriculturist in my section and in every part of this dominion. First, he receives low prices for his produce; second, he pays high prices for the things he has to buy. Further, there is [DOT]to-day available very little farm help which is really good. The scarcity of farm help is not a matter of wages; it is difficult to get farm help even if the highest rate of wages prevailing at the time on the farm is offered.
In view of this disparity between receipts and payments, the problem of farm help and wages, and the general situation as regards farming, it is not much to be wondered at that there was an uproar from one end of Canada to the other when, not so long ago, the dominion government decided to peg the price of butter. It may be all very well to argue that from a technical point of view there was some justification for pegging the price of butter; but the average farmer believes, and I am inclined to think he is right, that if you are going to put a ceiling on the price of one of the major products of the farm, there is no reason under the sun why he cannot properly ask that the prices of the commodities he has to buy, which are going up in price, should also be pegged to a ceiling. That applies to everything he has to buy, from his fertilizers to his concentrates; yes, and his

War Appropriation-Mr. Gray don
groceries and meats are going up without any limit. The situation has become so serious- I often wonder whether we realize how serious it is-that certain provinces of the dominion have had to step into the breach because the dominion government would not do so. Surely we should have some kind of leadership which would not leave the whole problem of dominion agriculture to the provinces alone.
I make this suggestion to the government, although I think it should have come from the government, and I am amazed that they did not put it forward as soon as they came into this house last Monday. In view of the seriousness of the agricultural problem, affecting as it does the whole nature and extent of our war effort in Canada and our help to Britain, a select special committee on agriculture of the House of Commons should be formed by the government and the whole matter brought before that committee, in order to see whether some solution cannot be found of one of Canada's major problems. I hope this constructive suggestion will be adopted.
Since we left here last December there has been a conference.


Mr. HOMUTH:: Just the start of one.


Gordon Graydon: The hon. member for
Waterloo South (Mr. Homuth) says they just got started. I did not happen to be here when the conference was going on. I read something about it, and I was not very much astonished that it did not go further. One of the newspapers referred to the Sirois report as "the dominion government's baby." I am not going to discuss that point because I have no knowledge of it; but if it was the dominion government's baby it did not have a very good start in life. First of all, both its parents were Liberals. In addition, it was brought into being in a Liberal household, and tended and nursed by Liberal doctors. During its frail life it showed signs of an early demise, until it met a violent death at the hands of another Liberal in its own household. More than that, when finally the baby was buried there was a private Liberal funeral; none of the neighbours were invited in. The only difference between the private funeral in this case and an ordinary private funeral is, that the neighbours had to be brought in to pay part of the bill, and it amounted to over half a million dollars. With regard to the Sirois report, whether it was good or bad, there was a lamentable lack of leadership as far as the Liberal party, dominion and provincial, were concerned.
At the end of this conference-and this is the only reason why I have brought up the matter-the Minister of Finance (Mr. Ilsley) made some sort of threat. It may not have been exactly a threat, but in any event it 14873-551
looked suspiciously like one at the time. Maybe he felt justified in making it, but I think he should not have lost too much time in clarifying his meaning. At the end of the conference he made the statement that there was a possibility, in view of the report not having been adopted or any agreement reached upon its provisions, of an invasion, in some directions, of provincial fields of taxation.
It seems to -me that the minister owes it to parliament to clarify as quickly as possible what he really meant by "an invasion of provincial fields of taxation."
Another angle I want to touch upon while I am speaking about the failure of leadership on the part of the government, is the matter of taking the census in Canada. It has been mentioned before, and I do not want to labour the subject. But I should like to point out what I regard as a cogent consideration. If the census is a peace-time affair, I think we should not have it at all; but if it is a wartime measure, then by all means let it be done on a non-partisan basis. Unless my recollection is entirely wrong, I remember the Prime Minister rising in his place and saying, in one of his blazes of oratory-and it was an excellent speech-that as regards the war effort of Canada, there would never be the slightest flavour of partisanship as far as he was concerned. I believe he even dared his own supporters-and as I recollect it, some of them accepted the challenge-to banish partisanship as long as he was head of the government. Well, we do not object if it so happens that all the best men for cabinet timber belong to the Liberal party. Let them carry on the war and war-time activities. I am not going to object to that. But when it comes to the question of a war-time measure such as the census-and it must be so regarded or it surely would not be carried on-let us have it on a non-partisan basis, the same as in national registration.
Let me at this point bring up this business of national registration. Many people are wondering about it. I remember the Prime Minister, when the national resources mobilization bill was brought in, saying in this house- I thought he overdid the point a little-"I would to God that we had power tonight to deal with the matters which this bill envisages." Well, the power was given him on that June night. In August that registration was taken. I believe a good job was made of it, and I am making no objection at all to that. The difficulty is that it has been used for one thing and one thing only, which is to separate men of twenty-one to twenty-four years old from the rest of the population and bring them into the thirty-day training camps. I believe we expected more than that from

War Appropriation-Mr. Graydon
the government. I do not think there is one hon. member who did not expect we would get more than that. I thought we were at last going to mobilize everything in Canada for this war effort. Yet I see it will be April 1 before they have counted the cards down here in one of the buildings that they have for that purpose. That is not good enough leadership in time of war. We may put up with these things in time of peace, but I suggest that if we are ever going to win this war we must adopt a different scheme and different strategy.
Then I heard the hon. member for Broadview (Mr. Church) make some reference to the bureau of information. I do not know who gets out the information supplied by that bureau; I do not know anyone connected with it. Some of the information the bureau sends out may be good stuff; some of it is important; but as the hon. member for Broadview said, there is a lot more bureau than there is information. I just picked up this morning my bulletin from the Department of Munitions and Supply. Is this an example of the leadership we are to expect in this war? It is dated Ottawa, February 15; we did not get it too early, but the news of February 15 may still be important. It reads:
Apparently some 147,000 hens are valiantly at work in the national service striving to meet the daily needs of the forces, according to an announcement made to-day by the Department of Munitions and Supply, which stated that 8,818,896 eggs were purchased during the last quarter.
It may be all right to mobilize the hens after we get the rest of our resources mobilized, but we should put some other first things first. I suggest that the government look into the whole matter of this bureau of information and other departments of government and see whether we cannot have more of our material resources mobilized and put in shape for our war effort before we bother with the lowly hen, who is going to lay eggs anyway regardless of the bureau of information. I see the hon. member for Halton (Mr. Cleaver) looking interested; he has some hens that are even as good as those we have in Peel.
I am sorry the Minister of Trade and Commerce (Mr. MacKinnon) is not in his seat this afternoon. I know he is a busy man; he will be excused by everyone. But not very long ago he conducted a trade mission to south America. The resolution of the Minister of Finance indicates that this $1,300,000,000 is required for many things, including the extension of trade. Without further delay we should have some real report from the minister as to the success of that mission to south America.

I have seen many criticisms with regard to the mission and the way in which it was carried out, and more particularly in one of the financial papers to the effect that one great south American country did not receive the same treatment so far as trade concessions were concerned as was received by Argentina and Brazil. I think the minister should without any delay acquaint this house and the country at large with what we may expect in the days ahead by way of trade with our great south American neighbours.
I close my rambling remarks this afternoon by simply making this suggestion to the government. After all, whether we are ordinary citizens or members of parliament, there is not one of us whose heart does not bleed for the sufferings and privations endured and the cruelties inflicted upon the people in the motherland. Those people who are going through those hardships are not strangers; they are our own people. It is not of the men in the armed forces that we think entirely; they are prepared for hardships and sacrifice, but it is the women and children, the aged and infirm who have had to bear the brunt of the damage and hardship and such ruthlessness as we never thought in years gone by would be possible at the hands of a neighbouring state. While at the moment we are safe and secure on these shores, in all our deliberations and in all our war activities and legislation, let us bear in mind that our first aim should be to do all we can for those men and women over there who are holding the front line for freedom and righteousness and Christianity. Our job is to back them up to-day as never before.
O, how the words of the Prime Minister of Great Britain ring in the ears of every Canadian 1 Speaking of the tremendous achievements of the Royal Air Force last September, he said:
Never in the realm of human conflict was so much owed by so many to so few.
So, whether we be government men or opposition men or to whatever group we belong, let us stand together as Canadians and Britishers in this great combat and take as our watchword the words of that great leader of the British people when he said:
We shall go on to the end.


Mr. J. H. BLACKMORE (Lethbridge):: It seems to me that before this debate closes, there are one or two things more which need to be said. I should like to commend the Minister of Finance (Mr. Ilsley) for the work he has done up to the present time. Under the system of finance which he is following, I would: say he is doing a good job; he is holding prices steady; he is holding

War Appropriation-Mr. Blackmore
interest rates down; he is finding a good deal of money for Canada's war effort, and as far as I can judge, he is building up our war effort rather satisfactorily.
It must, however, be apparent to everyone in Canada-and that the minister should frankly acknowledge-that this great sum of money is not going to be taken from the people entirely by taxation or by borrowing from the people's savings, but that a very large percentage of this great levy is going to be obtained by the direct creation of new money.


James Lorimer Ilsley: I do not agree with that
at all.


John Horne Blackmore: The minister thinks
that will not be the situation. Then he is very optimistic. I submit that, long before this war is even at its climax, every thinking person in this country is going to confess and freely acknowledge that money is being created. Even the leader of the opposition (Mr. Hanson) yesterday, as I shall show later on by quotations from his remarks, inferentially and by implication acknowledged that money is being created.
The one great fault we have to find with the minister's outlook on the situation is that apparently he takes the attitude that all the money which is going to be used for financing this war, not only this year but perhaps five years from to-day, must be raised either by taxation from the people's earnings or by borrowing from the people's savings.
I think the time has come when we should define this matter quite honestly. I believe the very best and most orthodox minds, to use the terminology of the minister, are beginning to reason in some such way as this: Two billion dollars this year; two and a half billion dollars next year; three billion dollars the year after! Where in the world is the money coming from, and how in the world is Canada going to pay back this money? I believe the minister is very close to a climax, a crisis; for I have heard several times already, from rather responsible people, this reaction, that they are never going to get their money back. They are afraid there is going to be inflation, and they are alarmed because of various other considerations. I wish to make it quite clear right now that the people of my movement, the social credit movement, are just as enthusiastic about winning this war and just as determined to win the war, as any other people; but they believe the time is coming, in this age of abundance, since our opponents are fighting the war on the basis of goods and resources, when we also must begin to fight on the basis of goods and resources.


James Lorimer Ilsley: Which we are doing.


John Horne Blackmore: That is very fine;
I am glad to hear it. The trouble is that when the minister makes that statement, he puts himself, I believe, in a very inconsistent position.


James Lorimer Ilsley: How?


John Horne Blackmore: I think I may be able to show that in a little while.
I should now like to turn to the remarks of the leader of the opposition yesterday in order to indicate the general confusion that seems to be abroad in the land. I have considerable respect for the leader of the opposition. I think he does about as well as he could, having nothing but orthodox financial principles on which to base his reasoning, so when I quote his words I do not wish anyone to suppose that I am seriously condemning him. At page 832 of Hansard he first used the word "inflation" when he said:
It is assumed that inflation in any form is definitely barred, notwithstanding what some people may have said recently, and to that decision I am not, at the moment at least, taking any exception.
Here let me say definitely, once and for all, that the social credit movement is not standing for inflation in any sense of the word. If the Liberal party, the Conservative party and the Cooperative Commonwealth Federation would just take that simple fact from me, who should know, then we would avoid a great deal of aimless, confusing discussion in future and would be able to devote our attention to the real question at issue, which is, what is inflation? Then the hon. gentleman went on to say:
Inflation as a means of financing this enormous programme at this time would, in my opinion, be a false move.
I entirely agree with that statement. I would be one of the last men in Canada to advocate inflation in any sense of the word. Certainly it would be destructive. But there is some confusion as to the real meaning of the word "inflation", and it is with that confusion that I propose to occupy myself for a few moments. The leader of the opposition went on to say:
Later on, when other sources have dried up, we may have to come to a measure of inflation, but we have not yet reached that point.
I think the hon. member for Acadia (Mr. Quelch) made reference to that statement. To the monetary reformer, to the social crediter, the statement of the leader of the opposition as contained in those words is very, very foolish. You may expand money with a measure of safety while our resources of men and material are not yet fully used,

War Appropriation-Mr. Blackmore
but by and by, in the course of the war effort, when our resources are being fully used, any expansion of money except that which is most carefully managed is likely to produce ill effects. The fact is that if there is going to be an expansion of money, which I take it the leader of the opposition had in mind, the time for that expansion is in the early stages of the war in order to build up the productive and consumptive power of the country to a level which will enable it to stand the strain and the shocks which are to come.
I should now like to quote another short passage from the speech of the leader of the opposition, appearing at page 834 of Hansard:
Every time a bank subscribes to a government loan additional deposits are created, and that increases the total volume of purchasing power available. It is from this multiplication of purchasing power that the danger of inflation chiefly arises.
I submit to hon. members that in this second passage the leader of the opposition must have been using the word "inflation" with a meaning different from that with which he used it in the first quotation. In the second instance I take it-he may correct me if he sees fit-that he meant a rise in price, a surplus of purchasing power beyond the goods and services which exist in the country, whereas in the first instance apparently he meant the issue of money, because he said this was the wrong time for inflation. If he meant a rise in price, it is well for him to bear in mind that such a rise has already commenced in Canada, and consequently there is a measure of inflation at this moment. I think the leader of the opposition will realize that there is some inconsistency as between those two statements; and again may I assure him that I have no desire to find fault. I am very anxious that we all get to understand just exactly what is in each other's mind; for the members of this house and the people of this country do not disagree as to the winning of this war. Some of us think we can do better by one particular device; others do not agree. But perhaps it will be found that these monetary reformers have something of great value, something to which the country is going to be forced-and perhaps at a time when it might not be able to adjust itself to any measure which might be adopted.
May I read another passage from the speech of the leader of the opposition as reported at page 835 of Hansard:
It is apparent, I think, that in a new country like Canada, where there is not nearly as much invested or accumulated wealth as there is in Great Britain, where we have always been considered a borrowing country, our effort cannot be comparable with theirs.

May I interject the remark that to a monetary reformer that is sheer nonsense. I think I shall show from words uttered in our banking and commerce committee by the governor of the Bank of Canada that it is sheer nonsense; for this good man apparently looks upon wealth as being money saved up and invested. As a matter of fact, real wealth is productive power, or actual goods and services ready to be used, whether in the war effort or for the consumption of the people. Again there is confusion in the way in which the leader of the opposition expresses himself. To continue with his remarks:
And on that basis I suggest that no one can take great objection to the amount which the Minister of Finance is asking the country to vote.
With that I entirely agree. I am not finding any fault with the amount asked by the minister. I am really surprised that he has asked for so little. But if I were looking at the matter as the leader of the opposition appears to be looking at it, I would be alarmed at the amount, because I would say, "Where in the world is he going to get the money?" As a matter of fact, what I do say is this: There are great deposits of iron, vast resources of coal, tremendous stretches of forest wealth, almost limitless productive power with respect to all kinds of food. And, as the hon. member for Trinity (Mr. Roebuck) stated so well in his speech, all I am concerned about is whether we can manage our economy so that we can put to work those vast resources producing the very kind of goods we are going to need, not only to support a high standard of living for our people and our armies but to support the war effort by way of machines.
When I look at Canada from that angle I have no anxiety at all about the amount. May I read one more passage from the speech of the leader of the opposition:
I have taken the view that there should be no dollar sign on our war effort.
If it were parliamentary I would stop at this point and ask this question: What on earth does that mean? If the leader of the opposition has said that he puts no dollar sign on the war effort, then he must not be thinking of Canada's war effort in terms of dollars. Yet, only a few passages earlier in his speech, he was talking about the amount of effort Canada should put forth as being in some way governed by the amount of money saved up. I submit that there is no consistency between the two points of view.
Then he continues:
I know there is a limit to our capacity to pay.
Once more the leader of the opposition is taking the stand that our effort is going to be governed by our money. What I think he

War Appropriation-Mr. Blackmore
should have said was this: "I know there is a limit to our capacity to produce. Our war effort is to be limited only by our capacity to produce." Then he continues:
I do not attempt to define that limit-
Nor do I, may I say.
-but, having regard to the issue at stake, 1 am sure that whatever is needed within that limitation will be provided by the Canadian people, no matter what the cost or the sacrifice.
We all agree with him. I -would, hewever, be inclined to agree with the hon. member for Trinity when he says that all this talk about sacrifice is needless. If we can produce enough food, clothing and shelter to support the population of Canada comfortably and happily, and at the same time support the men in the field and aid Great Britain in supporting others who are fighting for the empire, without detracting from our production of such things as motor cars, aeroplanes and munitions, then certainly there is no conceivable reason for any sacrifice. Possibly that sounds strange.


Mr. MARSHALL:: It is common sense, though.


John Horne Blackmore: Let me illustrate, by referring to butter. If we had to take men out of munitions factories to milk cows, to care for them or to make butter, then obviously the amount of butter we would have would be in a measure obtained at the sacrifice of a certain amount of effective war effort. If we had to take men out of the fighting lines or keep men out of the forces so that they could milk cows, then we could say that we could not give our people all the butter they need, and still make our maximum war effort. But when we approach the matter from the other angle, when once we pay a fair price for butter in Canada-let us say 40 cents, for example-and we take away restrictions, so well described by the hon. member for Trinity, we will find great numbers of women in homes who will encourage their sons to keep two or three cows, and to make butter to supplement the family income. As a result of that, we will bring into production an almost incalculable amount of human effort.


James Lorimer Ilsley: Would there not be a limit to the productive capacity of the country?


John Horne Blackmore: Yes.


James Lorimer Ilsley: The more you devote to civilian demands, the less of that limit is available for war assistance or war effort. Is that not correct?


John Horne Blackmore: It might possibly be.


James Lorimer Ilsley: That is the whole story, is it not?


John Horne Blackmore: Let us keep to butter-


Mr. JACKMAN:: Take steel.


John Horne Blackmore: We will take steel later.
Mr. ILSLEY': Take the whole picture, though.


John Horne Blackmore: Yes, but we must start on the whole picture by doing one part of it.


James Lorimer Ilsley: If there is a limit to the productive capacity of the country, and it has to be divided between war effort and satisfaction of civilian demand, then any curtailment of that satisfaction of civilian demand leaves a larger amount available for the war effort, and thereby increases that war effort.


John Horne Blackmore: That is correct, but I wonder whether the minister is overlooking the fact that, no matter how we tried, we would not be able to get that extra work which that woman would be able to do to register in terms of creating motor cars or armoured cars. But we could get that effort to register in terms of creating butter if we could provide a price which would enable her to produce it at a remunerative figure. As I see it-and I say this to the minister in all sincerity-I believe there is a serious tendency to overlook a vast amount of productive capacity which is available throughout the country, not only in the matter of producing butter, but in producing eggs, meats and many other commodities. We, by burdensome taxation, are making it impossible for people to produce profitably or to buy; there is less market for the production; thus we have created a bottle-neck that prevents this great amount of expanding production and consumption which could accomplish a satisfying standard of living in Canada without detracting in any way from the country's war effort.
I should like to refer to one or two authorities in support of what I have to say. I honestly believe that the line of thought which I am following will be some day acceptable to the minister, but my concern is that he should accept it before matters go too far. I should like to refer to what was said by Mr. Towers when he appeared before the banking and commerce committee which sat in 1939. I quote:
Q. -so far as war is concerned, to defend the integrity of the nation there will be no difficulty in raising the means of financing whatever those requirements may be.
Mr. Towers:	The limit of the possibilities
depends on men and materials.
I should like to draw that statement particularly to the attention of the leader of the opposition. Stress is placed upon men and

War Appropriation-Mr. Blackmore
materials, and I assume that the word "men" also means women and children. I quote again from the proceedings of the committee:
Q. -and where you have an abundance of men and materials you have no difficulty, under our present banking system, in putting forth the medium of exchange that is necessary to put the men and materials to work in defence of the realm?
Mr. Towers: That is right.
Now this I think needs to be said, where the men and materials are, then the money can be created with which to put those materials and people to work. After that, the taxing base of the country will be greater, as has been proved already in this first year of war. The experience in the war has been that when money has come forth and has been invested or spent, it has increased the income of the nation by increasing goods, services and the production of the nation. The same thing will apply to the production of butter and other consumer goods if those goods can be sold and consumed in the country. I should like to turn to the bank of Nova Scotia's monthly review of October, 1939, entitled "Economics of War, No. 1":
Financial outlays are no more than an outward sign of the inner reality.
In this case I take it that the inner reality is really our great coalfields, our mines, our people, and other resources.
The true measure of a country's ability to prepare for or to wage war is the degree to which it can enlarge and redirect its productive capacity to this end. So long as there are unused resources of labour and capital and so long as peace-time resources may be diverted to war purposes without reducing living standards below a minimum subsistence, it is feasible for a nation to increase its war-time capacity and to find the necesary financial means.
I am sure the minister agrees entirely with those words, but I should like to give an illustration. I know of several farms in my constituency which produced great quantities of milk, butter, eggs, pork and beef during the last war, but which to-day are producing practically nothing but wheat. The result is that the people living on those farms are more or less idle during the winter. When they are asked why they do not produce hogs, eggs or other products they will reply that it does not pay. They contend that, by producing such commodities, they would be worse off than they are at the present moment. I think that is sufficient evidence that what I am saying is sound. These people should be producing milk, cream and the like in this war. In the last war many of these farmers were rising at five o'clock in the morning, whereas to-day they get up around eight o'clock during the winter. Previously they 
worked until ten o'clock at night, whereas to-day their work is finished at eight o'clock. We are losing that extra time and energy because we have not adequately adjusted prices and have not adequately encouraged production. The whole matter has a vital effect upon this question which we are discussing, inflation and the expansion of money.
The all-important matter is the question of inflation. What is inflation? The minister made a statement which I am sure he thought was entirely sound after Mr. Hepburn had made his remarks about new money. Over the radio we hear much talk about inflation. I am assuming and I hope that that talk is sincere. But there were the wildest aberrations from the fact in some of those statements. Evidently these were due to a misunderstanding of the true meaning of the word "inflation". I should like to Tead the definition of inflation given in Webster's dictionary, the second edition. It is:
Disproportionate and relatively sharp and sudden increase in the quantity of money or credit, or both, relative to the amount of exchange business. Such increase may come as a result of unexpected additions to the supply of precious metals as in the period following the Spanish conquests, in central and South America or the period following the opening up of large nevy gold deposits; or it may come in times of business activity by expansion of credit through the banks; or it may come in times of financial difficulty by governmental issues of paper money without adequate metallic reserve and without provisions for conversion into standard metallic money on demand.
Since that definition was written, the minister will realize that things have taken place with respect to our money which make that last statement absurd. It goes on:
In accordance with the law of the quantity theory of money, inflation always produces a rise in the price level.
AVe can safely say that there is no inflation without a rise in the price level. In a country as well ordered as the minister, to his credit, is managing to have this country ordered, where people are not allowed to manipulate prices to suit themselves, the price level is going to depend upon the supply of goods and services available, and there will not be a rise in the price of a commodity unless there is a scarcity of that commodity. The result is that the important consideration to the government must be to see to it that there is a sufficient supply of all commodities which we are likely to use, so that at any time, no matter what the strain may be as a result of buying by the people, there will be enough of those commodities to supply all that the people want to consume.
I should like to give another practical definition of inflation which I have given

War Appropriation-Mr. Fraser (Peterborough)
before. It is from Governor Mariner Stoddart Eccles of the United States federal reserve system. I quote from "Basic Principles of Constitutional Money" by Etta M. Russell:
On March 21, 1939, Governor Eccles, of the board of governors of the federal reserve system, gave a very clear definition, in testimony given before a committee in the United States senate. In answer to the question by the chairman- "What do you call currency inflation?" Mr. Eccles replied, "To me it would mean where the supply of money, bank deposits and currency, in the hands of those who spend that money, is greater than a country's ability to produce the goods for the market. It would be a condition of overemployment, a condition of inability to produce the goods so that the supply of money in the hands of those who spend it, is in excess of a country's ability to supply the demands."
This definition and explanation should be read and reread in the light of present conditions.
In other words, he points out that inflation comes as a result of having more money in circulation than there are goods and services, which is exactly the contention I have made.
May I read a statement which the Right Hon. Reginald McKenna made in a speech delivered before his shareholders in January, 1940, a little more than a year ago. He said:
Inflation, if it comes, will be due to the growth of consumption, civil and military together, beyond our capacity to produce. The military demand must be satisfied, and in the long run, if no other means can be found to bring the total demand for goods within the limit of production, inflation, with its accompaniment of rising prices, sets in as an automatic check on civilian consumption.
I think those definitions show clearly what inflation is. It would be greatly to the benefit of this country if from this time forward the Minister of Finance, the governor of the Bank of Canada, the leader of the opposition and every other responsible public man in this country used the word "inflation" only with that meaning. We then would be ready for progressive thought, and the people would not be alarmed if they should happen to hear that the government had created and put into circulation 8500,000,000, for example, possibly in assuring fair prices for butter or pork or wheat.
Once more I am going to make the plea that the government take steps to see to it that there is adequate production. Before the adjournment of the house in December last, I showed how our dairying industry was being allowed to be destroyed; and within a very short time I hope to present to the house some figures with regard to our dairying industry which I believe will astound some hon. members. At the present time we are allowing dairy cows to be exported from this country, at the very time when we need additional milk production in order to supply the cheese and the butter which Great Britain needs. That is an extremely serious matter.
14873-56	revised
We are allowing the price of other commodities to go too low, with the result that we are likely to discourage people from -increasing their productive powers, their breeding stock and the like.
This country can create money and can spend it in considerable amounts safely, without inflation in any sense of t'he word.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Mr. G. K. FRASER (Peterborough West):: Mr. Speaker, I am going to be very brief because I feel, as I believe every other hon. member, and every loyal citizen of Canada feel, that this motion must pass, that the people of Canada are willing and ready to pay all the taxes that are imposed upon them, and to subscribe to war loans and war savings certificates. It seems, however, that it would not be right for us to allow this motion, asking for moneys amounting to more than three times the -total national debt before the war of 1914, to go through without some debate.
As I have said, our people are quite willing to accept this motion and what -it entails, on the understanding that every dollar spent in the war effort shall be so applied that the nation receives a dollar's value for a dollar spent. They are not getting dollar for dollar value now, because there are too many go-betweens, too many sub-contractors, too many other things which I will not mention here but which will come up when we are in committee of the whole.
The people also feel that, as all are being taxed, this war effort should be on a nonpolitical basis, and not on a political basis such as we have to-day. I have before me a clipping from the Peterborough Examiner of February 13, 1941, in which Alderman Elliott of Lindsay charges that politics were being played in Lindsay. There was, he said, evidence of it at the dominion arsenal. That is holding up the war savings campaign at the present time. One man said to me, "Do you think I am going to give money in the war savings campaign, for these war savings certificates, when my son cannot get a job because he is not a Liberal?"


Some hon. MEMBERS:: Oh, oh!


Gordon Knapman Fraser: That is an honest fact. I have letters on my desk to that effect. It is patronage of the worst kind. I do not say that it is happening in every riding. The hon. member for Peel (Mr. Graydon) tells me that in his riding the defeated candidate is working hand in hand with him and there is no patronage.



EDITION

[Stage Direction]
874	COMMONS
War Appropriation

Mr. Fraser (Peterborough)
As regards this war savings campaign, the people of Canada are looking to us here in the House of Commons to set them an example. What I am about to say will not, I know, meet with the approval of some hon. members; but I suggest that the Minister of Finance (Mr. Ilsley) should give instructions that 10 per cent of the salary or indemnity of *anyone who receives 83,000 or more shall be paid in war savings certificates.
An hon. MEMBER:: Oh!


Gordon Knapman Fraser: Yes, I heard the "Oh". We should set an example. And these certificates should be non-transferable except in case of death. I believe that in the last war everyone took a reduction of 10 per cent. The least we can do is to subscribe 10 per cent to the war savings certificates. If hon. members could show7 that they had already subscribed, the minister should, of course, make a corresponding allowance; but the certificates should be in such form as to be non-transferable, so that the holders wrould have to hang on to them for the seven and a half years. A contribution of that kind would more than put the war savings campaign over the top. I think the Minister of Finance will agree with me in that respect. We have too much soft living in this country. In Germany, for the last ten or eleven years, the people have had to work; they have been given work; they have been told what to do. Here in Canada the white-collared class and other classes up and down the line have had it pretty soft. Now, regardless of who we are, w7e must get down to earth, and dig in.
At the present time, when our boys and young men are called to the training camps they are examined first of all by an outside doctor who receives for that examination one dollar per man. But when they go to the training camp they are also examined by the doctors there. Those doctors do not receive one dollar for examining them; but they receive their pay, perhaps as majors, possibly as colonels, plus dependents' allowances. If 180,000 boys are to be trained during the year, it will mean a saving to this country of 8180,000 if this dollar fee is abolished. I am quite sure that the outside doctors would be glad to have it cut out, because in most instances those boys appear for examination when doctors are at their busiest. Those examinations interfere with their regular practice, and, as hon. members know, during the past winter there has been a great deal of flu and other sickness and the doctors have been busy.
To refer again to the matter of savings, we have been asked not to spend United States dollars; but if you go into any fruit,

vegetable or grocery store in the country, you will find on the counters United States cabbages and carrots, with Canadian carrots and cabbages alongside. The Canadian farmer, because these United States vegetables are admitted to our markets, is unable to sell his cabbages and his carrots. Right there, it seems to me, the Minister of Agriculture (Mr. Gardiner) has taken another fall. He has fallen down many times before; on pork-we will not go into that-he has slipped on butter, and I think he is still sliding. The hon. member for Peel said there should be some change in that department. The minister should be either Minister of Agriculture, or Minister of National War Services, or Minister of Garbage Collection, because that is what he is asking hon. members to be. In a letter he sent out he asked us to look after the collection of household bones. What he means by "household bones" I do not know, unless he was referring to family skeletons in some people's closets. He also mentioned, at the close of his letter, the collection of dead animals. Yes! Dead animals I But owing to the fact that the minister has two jobs he is not handling either the one or the other properly. In most places the people who are collecting this scrap metal, etcetera, are unable to get decent prices for what they collect and many are giving up in disgust. I know one society that was offered 85 a ton for scrap paper, another 85.50, another 86, another 86.50, another 87 and another 87.50.


Mr. McCULLOCH:: Who will give me $8?


Gordon Knapman Fraser: Well, S8 would be nearer the price they should get. But we should have proper prices set. They could be set in the different municipalities, and that will have to be done before there will be proper collection of this scrap. In the orders of the day for February 18, there are seven and a half pages of printed matter, and seven pages blank. Why does the minister not start collecting this scrap right here? He should start saving here in Ottawa, and set an example.
The public information bureau has been mentioned. To-day I received a letter from one of the outstanding newspaper men in Canada. I am not going to read it all, but he says:
The stuff is invariably old and uninteresting and never or seldom fit for the columns of a newspaper.
From an editorial on the same matter in the Peterborough Examiner of Wednesday, February 19, I read the following:
So in all it looks as though publicity business is costing about $350,000 per year.
The chief trouble with all this publicity effort is that it is based on the apparent belief that

War Appropriation-Mr. Maclnnis
newspapers all over the country want to receive such material as these publicity men select. They merely come across some items which they consider interesting and away they go-postage free. We do not believe this office is much different from other daily and weekly places of publication, and our experience is that we seldom find reason for making use of this material from Ottawa.
Newspapers have their own representatives in the press gallery; they are senior men and well trained. The Canadian Press keeps a staff there, so there is no lack of news coming from Ottawa. In addition to that there is the daily copy of House of Commons debates and Senate debates, and they arrive regularly when parliament is in session, and they record every spoken word.
Back of all this publicity effort is a lack of understanding of the position of the newspaper. These departments at Ottawa pay for the gathering of such material as they desire to have distributed, pay for office space and equipment, and yet they work on the expectation that the newspaper has space to give away to print things which would not interest their readers. If parliament understood the small extent to which this material is being used it would probably have a better chance to see that much of it can be put down to nothing else than plain waste of effort and public funds.


Ernest Lapointe: This reading is a waste of money too.


Richard Burpee Hanson: Oh, we all read.


Gordon Knapman Fraser: Most of it goes into the wastepaper basket without even the envelope being opened.
In the training camps they have small stoves used for heating the hutments, and men are detailed to look after these stoves. But no instructions are given them how to look after the stoves. Therefore, since the camps have been in operation, thousands of tons of coal have been wasted. I know that for a fact, because I have had three coal men from different parts of Canada tell me of the wastage in these camps. This coal is going to waste when we have needy people throughout the country who would be only too glad to have even a scuttleful of that same coal.
In closing, let me say that when this government stops political interference throughout the country and gets down to business on a non-political basis, it will have absolutely no trouble about having every loyal man, woman and child throughout Canada subscribe and give everything they have to put our war effort over.


Mr. SOPER:: Would the hon. member answer a question? Will he be kind enough to tell us where in Canada to-day a wholesaler could buy a carload of Canadian cabbage?


Gordon Knapman Fraser: Yes; I know a farmer in Peterborough who has, I believe, a carload of Canadian cabbage.


Bert H. Soper: I should be glad to have his name sent over.


Mr. ANGUS MacINNIS (Vancouver East):: This is the largest appropriation bill ever to come before this parliament. I have no desire, and I am sure no member of this house has any desire, to deny the government the sum required, and more whenever it becomes necessary. But we are concerned with two things: first, that the money be raised in the most equitable ways possible, that is, in ways which will tend as closely as possible to equality of sacrifice; and, second, that future generations shall not be burdened with the cost of the war.
This war is not being waged with money; it is being fought with material things and human energy and human blood. When the war is finished, it will have been paid for in the only way all wars are paid for, in the human blood and energy expended in fighting it. The debt we are paying on account of the last war and the debt we will continue to pay on account of this war, if we are not careful, for no one knows how long, will be the tribute demanded by the people who own the resources of this country which are necessary to the conduct of the war. If we have the resources, the technical skill and the human labour required, we can always find the necessary money without paying tribute for bringing into operation these factors I have just mentioned.
Our proposal, therefore, as stated yesterday by the leader of this group, is that those who have available the money needed for this purpose should be compelled to place it at the disposal of this nation without interest, just as we have compelled the youth of this nation to prepare to defend the country, whether or not they feel like doing it. The Cooperative Commonwealth Federation has always insisted that as the first step in the organization of our economic life the government will have to take over the ownership and control of our financial institutions in order that the monetary system may be properly used, without the restrictions placed upon it by the profit motive, to finance production; and that also includes war production.
Yesterday the hon. member for Acadia (Mr. Quelch) referred to a statement by the leader of this group. His words are to be found at page 843 of Hansard:
The leader in this house of the Cooperative Commonwealth Federation made a statement with which I do not agree, when he said that when we nationalized the Bank of Canada it served to bring about a better relationship between production and money. In view of the fact that from 1935 to 1939 we had in the neighbourhood of half a million people unemployed, I cannot see how anyone can claim that the Bank of Canada maintained a correct


Mr. QUELCH:: Might I ask the hon. member to explain exactly what would be the difference between credit issued by the Bank of Canada and currency? A deposit in the Bank of Canada is legal tender.


Angus MacInnis: I may have something to say on that point a little later.
"'Mr. Maclnnis.]
I should like to quote a little more of Mr. Nash's statement. He said:
I want to dispel if I possibly can the illusion which still exists in the minds of some people that we can create unlimited amounts of credit from the reserve bank without any effect on the economy of this country. ... If, then, we do take the savings from those who have too much, or those with normal incomes who try to save, as some do, then to the extent that those savings are used by the government for the war effort or for civil activities they cannot have any ill effect on the ordinary economy of the dominion. But if we take from the reserve bank large sums of money and just throw the money into the purchasing pool without getting commodities in reurn then vre will damage the economy of this country to a greater extent than it has ever been damaged before, and in addition we will cause untold hardship and suffering to a very large section of the community including wage and salary earners and those on small fixed incomes -whose welfare and protection is the government's first and foremost responsibility. Unless new7 money creates new goods the people are penalized and not benefited by its creation. If the new money results in the production of new goods it is all to the good.
Perhaps I can answer the question asked by the hon. member for Acadia by pointing out that war-time economy is different from normal economy. As the Minister of Finance (Mr. Usley) said the other day, probably half our total production this year will be nonconsumable goods. They are not capital goods, either. In war production we are distributing purchasing power for twice the amount of goods that are ordinarily produced and used for consumption. In other words, a proportion of the people are put to the production of war materials. A lesser number than normally are put to the production of consumers' goods. We have purchasing power put in circulation by these two groups of people to buy the smaller amount of consumers' goods, and consequently prices will rise.
Therefore I am convinced that the more new money is issued, under these circumstances at least, the more we would have drastically to tax that money back, unless we were going to have inflation on a terrific scale. That is all I wish to say on that point. I believe there are people in my own group who are more competent to discuss this subject, although the approach I have made to it appears to me reasonable.


Victor Quelch: The hon. member has asked a question. I wonder whether he would permit me to reply to him?


Georges Parent: Order. Permission must
be obtained -from the hon. member who is speaking.


Victor Quelch: I should like to know
whether he wishes me to answer.

War Appropriation-Mr. Maclnnis


Angus MacInnis: I did not ask the hon.
member a question. I said I did not understand what he meant. It is just possible that if he took time to answer me I would not, even then, understand what he meant. But that may not be his fault. I admit that the fault may be mine. If, however, it is my fault, I must point out that I am not the only one who feels that way.
I should like now to say a few words respecting the sale of war savings certificates. I am not objecting to the principle of raising war funds in this way. I am convinced that the ultimate objective of the promotion of the sale of those certificates is not, in fact, the raising of funds. I imagine that the purpose is to take money out of ordinary consumptive channels, and under present circumstances that may be desirable. But I do say that those who are pushing the campaign must be very careful, and for several reasons.
I know a great deal of high pressure salesmanship is being used to compel people to buy these certificates, people who cannot afford to buy them, people on low incomes, or whose incomes are already far below the point required to maintain a decent standard of living. I suggest that we are not helping the war effort when we compel such people to subscribe to anything which will lower still further their standard of living.
There is another class of people, wage-earners, who may be receiving incomes which leave a small margin for savings. In some establishments the employees are compelled to subscribe. This applies particularly where the workers are not organized. The management calls in the staff, and they are absolutely forced to subscribe to these war savings certificates. I say that this is wrong. If compulsion is to be applied in the financing of this war, or in the making of loans to conduct the war, then that compulsion should begin with those who have the most. As we need more and more, we may have to take from those who have little. For these reasons I object most strenuously to permitting any employer of labour to bring before him his employees, people who cannot refuse to buy, on peril of dismissal, and telling them they must buy these certificates.
There is still another class, namely, those who for a long period of time have been unemployed. It is admitted that there are such people, because we are told many have found employment since the war began. Those people should not be compelled or even asked to subscribe to or to buy war savings certificates. During their long period of unemployment their household goods, personal goods, clothing and other necessities harve been depleted, and they should be allowed a considerable time to make up their requirements.


Gordon Graydon: Of course, many of them are anxious to do something.


Angus MacInnis: That would be their business; but I am talking about those who are being coerced to do something they do not want to do, and I strenuously object to coercion.
The moment we begin to deal with working people there seems to be an inevitable tendency at the first opportunity to resort to coercion. It is even more striking when we realize that the government shies away from any degree of compulsion when it is dealing with people who have money. Under the National Resources Mobilization Act human beings, most of them members of the working class, have been conscripted, or at least compelled to take periods of military training. Wealth has not been touched-although the act gives equal power to the government to conscript it.
In the financing of this war, employees and other workers should not be called upon each month to give up a certain proportion of their already too meagre wages, while huge sums of money lie idle in the banks of Canada to the credit of individuals.
Speaking on Tuesday, the Minister of Finance said this, as reported at page 824 of Hansard:
I pause, Mr. Speaker, to let the meaning of this programme and these amounts sink in. Probably none of us can realize the true significance of passing over to governments on the average hajf of our individual income; or, to put it another way, devoting half the labour and productive facilities of the country to war and other governmental work. When it is remembered that a large part of our population is now at such a level of living standards that it can bear very little of the increased burdens which Canadians as a whole must bear, the burden on the remaining part of the population becomes recognized as all the more staggering.
I cannot see why the burden placed upon this favoured section of the population should be staggering; that is, if it is not considered already to be staggering on those referred to previously, those who are getting incomes so low that they can be taxed but very little. Under these circumstances I do not think we can have anything approaching equality of sacrifice unless we adopt the proposals which were made the other day by the leader of this group. He suggested that we should establish a maximum income and take everything above that. If a maximum income were established, we would be more or less upon an equal basis. That income would be sufficient to provide the ordinary necessities of life-we would just have to forgo the luxuries. Surely that need not be such a terrible thing for anyone to contemplate.

War Appropriation-Mr. Maclnnis
I should like to draw attention to one other point which was impressed upon me by the action taken a week or so ago by the Department of Labour when they gave out the information that this government would no longer assume its share of unemployment relief. I shall not say anything further about this, but I think it is absolutely necessary in a time of war that the social services of the country should be maintained. Personally I think it is necessary psychologically for the winning of the war. Speaking over the radio, I think it was last Sunday evening, Ernest Bevin said that it would be almost impossible for the people of Great Britain to carry on were it not for the social services which had been created and developed during the years.
There are certain people with a very low standard of living-people who are least able to help themselves-such as old people who are living on pensions. Their pittance is worth even less than it was, due to the rise in the cost of living.	We guarantee the manufacturer a certain return upon his capital; after some agitation the industrial worker has had it recognized that his wages should bear some relation to the cost of living, and I suggest to the government that it should show its humanitarianism and concern for the welfare of the people by making similar adjustments in old age pensions. I was struck by a statement made on December 29, 1940, by the greatest American, I think, of all times, President Roosevelt. He said:	_
I would ask no one to defend a democracy which in turn would not defend everyone in the nation against want and privation. The strength of this nation shall not be diluted by the failure of the government to protect the economic well-being of its citizens.
I think the government of Canada should say the same. We -have the resources; and even though we are at war, if those resources are properly organized, if the necessary production is carried on to supply the needs of the people without the restrictions imposed by the profit motive, everyone can have a reasonable and even a decent standard of living in the normal essentials of life. If I understand correctly what the people have in mind, they believe that we are fighting this war not only to defeat Hitlerism, but to destroy forever the social and economic system which creates Hitlers. If we want the whole-hearted support of the Canadian people in this struggle, we must give them some earnest manifestation of our determination to do that very 'thing.
I was interested, as were probably many other hon. members, in hearing Sir Norman Angell speak on Sunday evening. During his talk he pointed out time and again that if

we did not remove the conditions which have impeded our efforts during the last twenty years, the conditions which were responsible for the last war as well as for the present one, it would be useless to go to the expense and sacrifice necessary to defeat Hitler; that other Hitlers would arise. I say to the government that if they want the support of the people to a greater extent than they are getting it to-day, they will have to concern themselves with the social welfare of the people, even though we are at war.
When one discusses the war with people, the almost invariable question is asked: What guarantees does the government give that we shall not have to go back after the war to those conditions which existed from 1930 to 1939 when our young men were deteriorating because they had no work, when they were being driven like cattle here and there? These are pertinent questions, and I plead with the government to give thought to them as a part of our war effort.


Mr. NORMAN JAQUES (Wetaskiwin):: Mr. Speaker, I shall make only a few general remarks. The word "sacrifice" has been used frequently during this debate. I am sure that the people of Canada are more than willing to make every sacrifice that is necessary for the winning of this war, but I think they realize, perhaps more than some hon. members, that sacrifices which are not necessary do not help in the war and may prove positive handicaps. I think one of the sacrifices which members of the house might make-and if they do not make it voluntarily they will, I believe, be forced to make it before we see the end of this war-is some of their ideas of what they are pleased to call sound, orthodox finance. Let me quote briefly from a recent article in the London Times. Nobody, I think, will accuse the London Times of being at all radical; yet it had this to say, referring to the changes caused by the war:
These changes call for readjustments as drastic as Uio.se which are demanded by the invention of tanks and planes. In military matters the French general staff enjoyed a prestige similar to that of our own authorities on finance. They, and the whole allied cause with them, have paid a cruel penalty for failure to adjust their thinking to the changed conditions. A hidebound persistence in methods and doctrines which may have been sound fifty years ago may easily prove as costly in the financial field as in the field of actual war. It might not lose the war, it would certainly lose the peace.
After admitting that a fundamental cause of the war was the efforts of Germany to secure foreign markets in order to strengthen her finances when her competitors were forced by their own debts to adopt a similar course, the Times continues:

War Appropriation-Mr. Jaques
It is not too early to be working out ways of dealing with the problems which will arise when once again all the participants in this war will be driven by the pressure of accumulated debt to seek to sell abroad at any price while none will be willing or able to buy.
It is for that reason that we in this group have made the remarks we have, and we shall continue to make them during this session because, Mr. Speaker, we must not only win this war but win the peace to follow. We won the last war; but most certainly we lost the peace, and it is not too much to say that this war is a result of our failure to use our victory in the last war to make a victorious peace.
Much has been heard of inflation; but neither the minister, in my opinion, nor the majority of the members of the house have come clean, if I might use a slang expression, on this question of inflation. After the abortive dominion-provincial conference, when Mr. Hepburn suggested an expansion of the currency, which I neither condemn nor praise, immediately the press was filled with talk of inflation, rubber money, and so on and so forth; but I have yet to see one paper or hear one minister, for that matter, or any member of the house say one word of condemnation of the policy of deflation from which we have suffered more or less since the last war. Let me quote from the Monetary Times, which no one will accuse of being radical or social credit. In its edition of January 25 last, in an article on Laval and Flandin, it says:
Flandin had become Prime Minister in November, 1934, after the faill of Donmergue. In his programme speech he declared: "Deflation in France is practically at an end. I reject any economic and financial policy that would tend to pauperize the labouring classes of France".
It was not so easy to carry out such a policy. The Banque de France refused to rediscount treasury bills. Flandin wanted to cover the budget deficit by short-term borrowing in order to keep out of the capital market, in the hope that interest rates in the capital market would go down and thus stimulate private investment. The banque's attitude was most embarrassing.
So Flandin dismissed Moret, the governor of the banque, and appointed Tannery. All went well for a while and might have gone well for a long time if banking interests had not spread the rumour that Flandin intended devaluation of the franc, and that his policy must lead to devaluation anyway. It was in vain that in refutation of those rumours Flandin announced that gold coins would be minted. The public became very nervous and confidence fell very low.
De Wendel, the great captain of French heavy industry and the most influential regent of the Banque de France, publicly outlined a deflationary policy, and implied that the franc would collapse if Flandin did not adopt his programme. . . . Flandin asked for plenary powers to carry out de Wendel's programme, but the chamber was irritated and overthrew him.
Laval became his successor. He earlier had learned a profound lesson from the banque. . . .
One point particularly is well worth remembering to-day, because attempts of the same kind are still being made in certain countries. Following the demands of the banque, Laval decreed deflation of unheard of severity. Above all, he cut down the extraordinary budget to the ridiculous amount of six billion francs, then about 300 million dollars. The extraordinary budget included the expenditures for armaments. This happened in 1935, one of the five years in which Hitler spent, all told, 40,000,000,000 dollars on armaments.
When we are reminded, as we were this afternoon, of Mr. Churchill's statement that "never was so much owed by so many to so few," one of the main reasons for that situation was the policy of deflation which was enforced by the banks, and I might say that this was true in Great Britain and true also in Canada. That is the reason why one Spitfire still has to face from twenty to thirty Messerschmitts. It was not that we lacked the men or the materials or the skill to build aeroplanes. It was because of the deflationary policy imposed by the banks and by international finance, and we cannot realize the truth of the matter until we realize that one fact.
Nor is the end yet. We have had nothing but deflation all these years, and now in war time we are still promised the same thing. Speaking at the annual meeting of the shareholders of the Dominion bank this winter, Mr. Carlisle, the president, said that generations following us will labour under the debts now being accumulated and that there is only one remedy-drastic economy. In other words, tighter belts. He says that our hope lies in greater exports and in internationalism. Then he goes on to say: How can we best bring about this better state of affairs? And his answer is, by reducing the number of governments and by revising the franchise so that the unfit and the unworthy shall not have equal rights with those who work and produce and pay. Beyond question there is everywhere a drive for what they call fewer governments, a concentration and centralization of power.
Well, I say this, that if we want that sort of thing; if we want, as many people in Canada to-day openly advocate, a union of governments under one world control, what are we fighting Hitler for, because that is exactly what he wants? I say, too, that a year ago last September I did not from my place vote to involve the people of this country in a war for the purpose of destroying the sovereignty of this country and the sovereignty of the British empire. I did it to preserve those things, not to destroy them.
Of this I am sure, that democracy as we have known it and orthodox finance cannot both survive this war. From what I hear and

War Appropriation-Mr. Jaques
from what I read, I think it is pretty plain that with a great many people it is not the intention that democracy shall survive. I see no indication in government circles, or among those in authority, of any admission that they have made mistakes in the past. All I have heard is that those who propose a change in our financial system-and I might say their numbers are growing every day-are ridiculed and opposed, and even accused of making subversive statements.
But, as I said, orthodox finance and democracy as we have known it cannot both survive this war, and I think all the signs point to the fact that those in control intend that, whatever else may be destroyed, orthodox finance shall survive.
With regard to control of prices, I should like to call the minister's attention to the fact that in Great Britain to-day and for a considerable time past-I do not know whether it started at the beginning of the war, but certainly it has gone on for some time-the government is compensating the retailer for selling below cost certain articles, I suppose articles of necessity. In other words, they are using the just price or the compensated price, which social crediters have advocated for the past twenty years. That is one way of preventing rising prices and at the same time not handicapping business by the retailers being involved in loss. If that is being done in Great Britain, I do not see why it cannot be done in Canada.
If I understood the minister aright this afternoon, when the hon. member for Lethbridge (Mr. Blackmore) was speaking, the minister said or implied that there was no gap between the money raised by taxes and by borrowing, and the actual expenditure on war. If that is so, all I can say is that we cannot be making our greatest effort, because the gap in Great Britain is in the neighbourhood of one thousand million pounds a year; that is, the credit which is issued for the war is one thousand million pounds over and above what is collected in taxation and borrowing.
I should like to say once more that our object in this corner in criticizing orthodox methods of financing the war is not in any way to attempt to handicap the government. But, as the Times has said, although these methods may not lose the war, most certainly they will lose the peace.


Mr. A. R. ADAMSON (York West):: Mr. Speaker, I had not intended to speak on this resolution to-night, but there has been so much talk about inflation, deflation and other related matters that I think I should say a few words on this one billion three hundred million dollar appropriation.
HMr. Jaques.]
Inflation is no new thing. It has been going on in this country, and, in fact, all over the world, since the end of the last war. It has been going on rapidly since 1934. There is nothing extraordinary about inflation if it is controlled as it has been and as it will be. If you want an index of the inflation which has been going on in north America, look at the public debt of the United States, which has risen from $25 billion until the last appropriation bill, which allowed $65 billion. In that period there has occurred almost a threefold inflation in the United States. The standard of living in that country has not appreciably decreased, although the public debt or possibility of debt has increased over three times since the wild inflationary boom, which was known as the stock market boom, in 1929.
We are going through a period of inflation, just as surely as we sit here to-night. There are three ways of meeting the expenditure, of providing this money. The first is by taxation; the second is by borrowing, and the third is by expanding currency. The latter two methods are really inflationary. Every new bond, every new war savings certificate which is issued is a promise to pay back by the dominion government. It is just as much a promise to pay as the dollar bill issued by the Bank of Canada. They are both promises to pay. The government pays interest on the bond; every coupon is new money and therefore inflationary. War savings certificates are not due for seven and a half years; they are delayed inflation, but they are inflationary just the same.
I am dealing now with the borrowing machinery that the Minister of Finance has set up. First, I take the war savings certificates. There is apparently some hesitancy on the part of the people of this country in buying these certificates. In Toronto, where we have in the metropolitan district one-tenth of the population of Canada, we have set ourselves, so I understand by the thermometer at the city hall, to obtain, by the end of this month, 200,000 pledges to buy war savings certificates regularly. In the first half of the month we reached a little over one-quarter of our objective. That, I believe, is symptomatic of the country. There must be a reason for that, and the reasons I suggest are three.
First, there is the lack of inspiration by the government of Canada. There is no driving force; there is no Churchill, no Roosevelt to inspire this country as Britain and the United States are inspired. Second, there is a lack of information. We have endeavoured to get the government to give us specific information as to precisely what is being done. It is my belief, and I think that of those who sit round

War Appropriation-Mr. Adamson
me, that if the people of Canada knew what is going on they would be more willing to support their government. There is no disgrace in having a failure in production of war materials, but there is great disgrace in not admitting that we have failed in production along certain lines. The third reason is psychological. There is to-day a feeling in Canada that the government is not exercising the greatest economy, or all the economy it might. With your permission, Mr. Speaker, I am going to ask the Minister of Finance (Mr. Ilsley) a straight question, and resume my seat in order that he may answer. Is it true that in Canada to-day cabinet ministers are allowed and receive the sum of $2,000 a year for a motor car?


Mr. MACDONALD (Brantford City):: Read the estimates.


Agar Rodney Adamson: The minister indicates
that that is so. I am glad to get the minister's admission; I thought the item was in the estimates. The people of Canada also know that. They say: Here are cabinet ministers each drawing $2,000 a year for a motor car. Most people consider that very excessive. I fully realize that the saving of $30,000 or $32,000 or $34,000, if this item were struck out of the estimates, would be a comparatively small matter. But what is important is that it would show the man in the factory who is asked to give up one hour, two hours, three hours, or half a day's pay every week, that the government are willing to economize for this war effort right in the highest tribunal in the land.
Mr.	MACDONALD	(Brantford	City):
Who is asking anyone to give up half a day's pay?


Agar Rodney Adamson: The workers in several
industries in my riding have been asked to give up	half a day's pay.
Mr.	MACDONALD	(Brantford	City):
For war savings certificates.


Agar Rodney Adamson: Exactly.
Mr.	MACDONALD	(Brantford	City):
Does the hon. member know that the cabinet ministers are buying war savings certificates?


Agar Rodney Adamson: But they are also receiving $2,000 a year for a motor car. And the public in Canada do not consider that justified, whether the hon. member does or not.
Mr.	MACDONALD	(Brantford	City):
The hon. member asked-


Agar Rodney Adamson: Mr. Speaker, I have the floor. The hon. gentleman can speak afterwards.


William Ross Macdonald: I
understood the hon. member was asking me a question.


Agar Rodney Adamson: I am not; I was not
addressing the hon. member.
On occasions I find myself in the position of driving on his majesty's business in Canada, using my own motor car. I find that the system in general use throughout this country is to pay six cents a mile to a man using his own motor car on the government service.


Mr. CRUICKSHANK:: May I ask the
hon. member a question?


Agar Rodney Adamson: I ask the hon. gentleman to be seated. I have the floor. I am interested to see that this discussion has awakened so much interest.


William Ross Macdonald: Will the hon. member tell us whether he is in the army himself?


Richard Burpee Hanson: That is
not a proper question.


Georges Parent: Order. The hon. member has said that he does not desire to have his speech interrupted.


William Ross Macdonald: He should not cast aspersions on other hon. members.


Agar Rodney Adamson: If I have cast an aspersion on any hon. member, I am very soriy. The hon. member must have an extremely thin skin. I am dealing with a question of psychology, and suggesting that the ministers give up this $2,000 for the good of the country.


George Alexander Cruickshank: What about the
leader of the opposition?


Agar Rodney Adamson: Yes; I would even
suggest that.
The second method of borrowing this money is by the sale of bonds. Since the tremendous increase in the income tax, people in the bond buying class have found themselves having difficulty to pay their income tax; and when the time comes for the next war loan some time during the summer, the minister is going to find that this reservoir of bond buyers, these people who would normally buy bonds, have no surplus available for bonds, they are up against it paying their income tax. I suggest to the minister that when he puts out the next war loan, some system must be arranged so that not only are they good collateral at the bank, as all Dominion of Canada bonds are, but that they can be bought on the instalment plan without interest

War Appropriation-Mr. Adamson
in order to allow those who wish to borrow to help this war effort, to do so without incurring extra liability.
There is also this other condition; the minister suggested that this $1,300,000,000 might not be enough by some 20 per cent to meet the cost of this year's expenditures. There is also the repatriation of Canadian securities held in Britain which, while it is not a direct charge, nevertheless adds to the burden. The minister has also suggested that new forms of taxation might have to be employed; during the conference on the Sirois report he mentioned that extra succession duties might have to be levied. I submit to this house that to-day anyone with money is being frightened into holding on to it rather than encouraged to lend it to the government, and I submit to the minister that this is a very serious situation and may prove to be a difficult problem when the new war loan is issued, because it must go over. These are matters that will have to be thought about first.
If the first two methods of raising this money fail, there is a third method, that of currency expansion. I hope we do not have to employ that method, but that should not prevent us from thinking about it. We hope we will not be bombed; we hope we will not have air raids; but while we have these hopes, we must be prepared for whatever may happen. There are two or three methods of currency expansion. The normal manner, the orthodox way if you like, is by increasing the price of gold. Another way is by lowering the peg on the only hard currency left in the world to-day, the United States dollar. Both these methods are possible. There is also the third method, which led Germany and other European countries after the last war down the primrose path to ruin; that is, definite increase of currency without control. I am sure no minister of finance would consider such a method in this country.
I should now like to say a word with regard to war production. There is no doubt that there has been a certain amount of bogging down in connection with a great number of items. I do not think this has been due to the cause most commonly ascribed. I do not believe the principal cause has been political juggling, political patronage or political malfeasance, even though I know patronage lists are still in existence. I believe this has been caused by the maladministration of government departments. Since the war started, some of the ablest business men in Canada have come to Ottawa, prepared to do a job. One by one they have gone back home, unable to do the job they came here

to carry out. There must be a reason for that. I suggest to you, Mr. Speaker, that the reason is that these men were not given the free hand they should have been given. They were proscribed by considerations of departmental red tape and by other considerations of a pre-war, single party administration.
Beaverbrook in England, Knudsen and Stet-tinus in the United States, were told by Churchill and Roosevelt, "You are responsible to me for the production of these goods." Churchill said to Beaverbrook, "Go on and produce aircraft. I don't care what you have to do to produce them, but produce aircraft." As a result, aircraft were produced. Undoubtedly mistakes were made and waste occurred, but such things are not important at present; it is the aircraft we want. Knudsen and Stettinus in the United States had the very greatest trouble in producing the Allison engine, and only succeeded because they employed the most drastic methods. They were criticized, but the administration of President Roosevelt was big enough to withstand that criticism. Roosevelt said, "As long as I am convinced that you are doing everything in your power to produce these machines of war, you will have my backing." That, I submit, should be and must be the attitude of this administration.
In conclusion, Mr. Speaker, I suggest that there is one way, and only one way, to get on with the production of war materials. Responsibility for that production must be delegated to the man producing them. He must have an absolutely free hand and must not be tied up by departmental red tape. Then these men who come here to offer their services will be able to do the job of which they are capable.


Mr. A. M. NICHOLSON (Mackenzie):: I feel obliged, Mr. Speaker, to make a few remarks in connection with this measure, which without doubt is one of the most important matters ever to be brought before a Canadian parliament. I am not opposing the amount of money that is proposed to be voted under this legislation. I agree with the words of the Minister of Finance (Mr. Ilsley) who, speaking in this house on July 30 last, said:
See that Canada does her utmost-on the land, on the sea and in the air-and the cost, in so far as money can meet it, will be gladly and proudly paid.
I should like also to repeat the words of the present Minister of National Defence (Mr. Ralston), speaking along the same line on June 24 last:
I need hardly say that our war effort is not in any sense to be limited by any such financial

War Appropriation-Mr. Nicholson
calculations or by what we can comfortably accomplish. We must make the maximum effort of which this country is capable. Financial provision can be made and will be made for whatever it is physically possible for us to produce or to procure in the way of war services, supplies and materials. The limits of our effort are not fiscal. If there are any such limits they are physical, mental and moral-by that I mean the physical limits of our resources and the mental and moral capacity of Canadians to bear burdens and make sacrifices.
I believe the then Minister of Finance, the present Minister of National Defence, presented very fairly the tremendous issues at stake, and I believe every dollar necessary to cany on the war to a successful conclusion must be made available in the present emergency.
I believe, however, it is very important .that the Canadian taxpayers be assured that the money raised is going to be spent fairly, and that all people in Canada should be required to make their fair contribution of the sacrifice. I feel that in many parts of Canada the war effort of the government has not the wholehearted support of Canadians, and that this condition has been brought about for various reasons. I have in my hand a copy of an editorial which appeared in the Saskatoon Star-Phoenix of December 14, 1940. They quote, as follows, the words of the right hon. gentleman who leads a party in another house:
I do not exaggerate at all when I say that I have had business men by the dozen tell me that they are leaning on their oars; they have nothing to work for. They say, "We might just as well take it a little easier now, for we are only working for taxes anyway."
Those are very dangerous sentiments for any man in public life to express in Canada to-day. I agree with the suggestion contained in this editorial that it is quite possible the defence of Canada regulations should be amended to deal with these dozens of individuals who are resting on their oars because they feel that under the present available contract terms they have nothing to work for.
We have had considerable discussion in the house respecting terms of contracts. Here is a copy of Canadian Business for December, 1940, which contains information that, so far, has not been placed before us in the house. This issue contains an article by Leslie Roberts, headed, "Is There a War-Contracts Pork Barrel?" The article sets out in detail information as to how supplies are bought in Ottawa. No. 6 reads as follows:
Contracts are liable to continuous audit, and figures may be revised to keep the manufacturer within his ten per cent profit zone.
Then, in the body of the article I read:
Normally such a job should be produced for so much, allowing for the producer's legal margin of profit, which is ten per cent.
With one group of Canadians in a position where it is taken for granted that they should have a legal margin of profit of 10 per cent, and a very large group of Canadians who are making tremendous sacrifices without any hope or desire for profit, you cannot have a strong and united Canadian people.
May I at this point make a few observations about a very large number of Canadians who feel they are not receiving the consideration they deserve. As a matter of fact, Mr. Winston Churchill, speaking in the British House of Commons last fall, had this to say about them:
We shall do our best to encourage the building up of reserves of food all over the world, so that there will always be held before the eyes of the people of Europe, including-I say it deliberately-the German and Austrian peoples, the certainty that the shattering of nazi power will bring them all immediate food, freedom and peace.
Canada has a very important function to perform along the very lines outlined by the Prime Minister of Great Britain. We can produce enormous supplies of food, and the time will come when those supplies of food on hand in Canada will be an important factor in obtaining peace terms to our liking. But in the meantime we cannot expect two million farmers in Canada, two million people who depend directly on farming for their livelihood, to continue under prevailing conditions.
Hon. members may have thought that during the last session some of us from the prairie provinces spoke from a narrow and provincial point of view. I suggest that developments within the last few weeks have made it clear to all Canadians that the problems of agriculture are national, and that they are neither provincial nor local. I saw in the Toronto Globe and Mail of February 12, a dispatch reporting a speech by the Hon. W. L. Houck, Vice-Chairman of the Ontario Hydro Commission, and minister without portfolio in the Hepburn administration. Speaking at a ploughmen's convention, he is reported to have said:
"I say without fear of contradiction that the Minister of Agriculture betrayed the agricultural classes and left them to work out their own problems against insurmountable odds without any assistance from the department at Ottawa." Mr. Houck charged that the federal minister joined in a nation-wide conspiracy to keep the price of farm products at a point below what it cost to produce them. If others are guaranteed the standard of living, then the farmer must receive the same treatment. No type of man engaged in any industry wants to do more in the war effort than the farmer. He will do his part and do it willingly, hut he cannot go on with prices paid at less than the cost of production.
884	COMMONS
War Appropriation-Mr. Nicholson
I notice that the Minister of Agriculture (Mr. Gardiner) bearded the lion in his den by attending in London a meeting of indignant Ontario farmers. The London Free Press dispatch states that Mr. McEwing, the member of the legislative assembly for the constituency of North Wellington, asked if the federal government would recognize that pork was being produced at a loss, and would be prepared to give the producer the same consideration industry was receiving. The minister replied he was unable to say what the attitude of his government would be.
I must confess I was embarrassed to learn from the newspaper report that a minister of this house in a public meeting should have had to listen to some of the comments recorded in the press. One indignant farmer asked, after the minister had indicated that he owned a farm near London, whether he owned a pair of overalls. It would seem to me that comments of that kind would indicate that we have a great deal of dissatisfaction among a loyal group of people in Canada who are prepared to make every reasonable sacrifice.
This appropriation of 81,300,000,000 should include sufficient funds to carry on agriculture efficiently, so that it may fulfil its proper place in the economy of Canada.
Just one more reference, to indicate that my observation need not be confined to Saskatchewan or even to Ontario. At the conference which ended so suddenly last month, Mr. Bracken spoke concerning the position of agriculture. The report of his speech, as it appears at page 31 of the report of the plenary session held on January 14, 1941, contains the following:
But what is the situation facing agriculture? In the west we harvested last year one of the largest wheat crops in our history. When it is all sold it will have brought to the farmers a little more than half as much as each of several smaller crops before the depression, and not until the end of next July will farmers have received payment for the last of it. That crop brought the producers a little over 50 cents per bushel on the farm. During the last war, such a crop would have moved readily overseas and farmers would have received in some years three or four times the present market price per bushel. Even in the post-war period before the depression the farm price paid was more than twice the present price. It is now suggested in certain quarters that only a portion of our next year's crop be allowed to find a market through the ordinary channels.
And again:
Since the war started, there has been a worsening of the farmer's market condition for certain of his major commodities, with some improvement and limited possibilities for certain other products. Disparities between the rising cost of goods the farmer buys and the fixed

prices for certain of the products he sells are perpetuating a most difficult situation and giving rise to protest and unrest, the causes for which in war time at least we should by all means seek to alleviate or avoid.
With the evidence coming from such a wide field, I submit that the government should consider its responsibility to agriculture in the present crisis. If there are men engaged in agriculture whose services could be used to better advantage in industry, now is the time for the government to give us that information. I am sure that hon. members from all parts of Canada have had farmers appealing to them for information and instruction as to where they might make their greatest contribution in the present crisis. Until the government states that there are too many people on our farms, until it intimates that it intends to move large groups of agricultural workers to industry, I am sure we shall have a great deal of discontent.
The announcement has been made that relief is to be cut off in the near future. This will add greatly to the unrest which exists in many parts of Canada. If I might refer again to Saskatchewan, I think I can say that hon. members realize that the problems facing that province are not the result of carelessness on the part of the people, but rather they are due to a national calamity and national policies. We have large surpluses of many commodities, and now the government announces that it intends to embark upon a policy of cutting off food from large numbers of our citizens. I submit that if the policy as announced is carried out, a large number of people in Saskatchewan will find it impossible to secure the food they require in their daily lives. I have in my hand a copy of a speech delivered by Mr. Perkins, president of the federal surplus commodities corporation in the United States. He shows how we in Canada might dispose of much of our surpluses. The information available indicates that we have a large group in Canada who are not consuming enough food. If we are to maintain a standard of life which will ensure that certain people will be able to make their greatest contribution in our war effort, those people should have sufficient food. This report states:
According to this study, the 14 per cent of our families with the lowest incomes, that is, families receiving $312 on the average, are spending only slightly more than $1 per person per week for food (actually, in order to keep going, they spend about 50 per cent more for all purposes than they earned-some merchant got stuck for part of the difference).
And again:
In other words, this tells us that people with incomes of under $500 a year have about five

War Appropriation-Mr. Nicholson
cents per person per meal to spend for food. Families getting an income of $100 a month have around ten cents per person per meal for food. The market for our farmers is doubled, so far as this group is concerned.
And further down:
What is this potential low-income market like? Evidently these underprivileged people can and will spend more money for food if they have an opportunity. Does this mean that they pay higher prices for better food, or do they actually seek more food? The answer is that they do both. We know that low-income people are eating about half as much as they want. They will buy more food and greater varieties of it, if they have the opportunity.
Another paragraph, which I should like to direct to the attention of the house, reads:
We probably shall hear more and more, during the next few years, about solving our surplus agricultural problems by feeding and clothing the destitute peoples of other continents, particularly those ravaged by war. I hestitate to mention that charity should begin at home, because I agree that it should not end there. The present situation in Finland, for example, has pulled at our national heart-strings. I should like to suggest, however, that before we look at this problem of human hunger through a telescope, that we look at it through a microscope right here in our own country, and remember the millions of youngsters we are pumping into our own society every year on five cents a meal. Innocent victims of malnutrition make mighty poor citizens.
Of course, Mr. Perkins was speaking of conditions in the United States, but similar words might be used to describe conditions in Canada. Unfortunately we have no statistics available to enable us to draw the conclusions which have been reached by Mr. Perkins. I urge the government to see that sufficient funds are set aside out of this appropriation to secure for agriculture a net return which will enable the farmer, not to become a profiteer but to meet his obligations, pay his -taxes and have a decent standard of living.
Considerable work has been done in western Canada in recent months to show the spread between the prices received by the farmer for the goods he has to sell and the prices paid by -him for -the goods he has to buy. I should like to give the house particulars showing the difference between the price of a binder to-day and the price a number of years ago. In 1913, the material in a binder cost $45.56; the labour, $11.97; the overhead, $17.96; experimental work, 34 cents; freight, $17.80; agent's commission, $30.45, and there was a gross margin of $42.94. The cash price at Regina was $167.02. A farmer could buy that binder in that year for 261 bushels of wheat. In 1936, the material cost was $71.06; labour, 822.62; overhead, $33.93; experimental, $2.55; freight, $26.08; agent's commission, $45.50; gross margin, $79.26. The cash price at Regina was $281, equivalent to 319 bushels
of wheat. Last- year, in order to buy the same binder the farmer had to pay 637 bushels of wheat. I am quoting from "Why a Farm Machinery Cooperative", published by the Canadian Cooperative Implements Limited. This significant paragraph appears at the bottom of page 4:
It is obvious that the farming industry in western Canada is facing a crisis. If a decent standard of living is to be achieved on western farms something must be done to remove the wide spread between the price of things which the farmer has to sell and the cost of things which he has to buy.
I feel that this is the point which western farmers have been trying to make during all these years. On my way to Ottawa I noticed in one of the -papers that the estate left by the late president of the Massey-Harris company amounted to -over three-quarters of a million dollars. It is quite apparent that making farm machinery is a much more profitable business than operating that machinery on a western farm. The hon. member for Rosedale (Mr. Jackman) draws my attention to the fact that the gentleman who passed away had other interests. No doubt he had, but I think the fact remains that the manufacture of farm implements has been quite profitable in Canada.
Let me say a few words about labour. As I said earlier in my remarks, a great many farmers in Canada feel that the most important thing now, is to see that the war is won, that Hitler is defeated. Many of these men do not want to waste gasoline operating their tractors in the spring months if the producing of more food is going -to add to Canada's problems and is not going to help in our war effort. Many farmers on marginal lands across Canada -have been facing the necessity of applying for relief. These men are anxious to get off their farms because they feel, and I think rightly so, that they can make a greater contribution in industry. Last summer, a national registration was taken, and the Minister of National War Services (Mr. Gardiner) wrote a letter to the members of the Saskatchewan legislature under date of July 27. One paragraph reads:
It is absolutely essential for the national welfare, that this registration be as complete as possible. We hope to be able to help the Canadian people by means of the information gathered-to direct those presently unemployed to employment, and to aid those who are employed in obtaining more gainful employment. One of the chief objectives of this national registration is to help the younger generation and to secure information with respect to the aged, the sick and the incapacitated. In general terms, we want to be able to see the whole picture of the location and position of the people who live in this country.
That paragraph outlined a worthwhile objective ; and feeling sure that the necessary
886	COMMONS
War Appropriation-Mr. Nicholson
machinery was 'being set up to carry out this very thing, I wrote to the associate deputy minister in November on behalf of a returned soldier who has been farming on sub-marginal land and who had appealed to me. My letter read:
Mr. 
, who is forty-six years of age and
a returned soldier with wife and two children, is anxious to place his services at the disposal of the country in any capacity. He advises me that he is a mechanical draftsman and has had considerable experience with the Grand Forks Gas and Electric Light Company in North Dakota. He also states that he has done drawings for the patent office in Ottawa on several occasions, and is anxious to be of as great assistance as possible during the present crisis.
The deputy minister wrote in reply:
There should be some place in the war industries of the nation where the services of this man could be used to advantage.
I noted in the public press, yesterday, a statement by Mr. F. H. Avery of' the Department of Labour for the province of Ontario, Parliament Buildings, Toronto, that his department was engaged in Ontario in finding where employees were needed and locating such employees. He said that there was already very considerable in the way of shortage.
Might I suggest that you, in turn, advise
Mr. 
 to communicate directly with Mr. Avery, giving him all his qualifications, and asking him to place him.
I anticipated that what did actually happen would happen, and rather than annoy my friend, who lives quite a long distance from regular mail service, I took the responsibility of doing the writing myself. I set out his qualifications in a letter to Mr. Avery, who advised me, in view of the fact that this man. was living in Saskatchewan, that the Ontario authorities were not encouraging men to come east and that I had better try one of the western offices. So then I wrote to Winnipeg, and they replied that, since this man was living in Saskatchewan, it would be well to take up the matter of his employment with Regina. I then took the matter up with Regina. But in Saskatchewan there are no war industries of any consequence where a man with his qualifications could find employment; so the merry-go-round went on, and the man is still awaiting information that will enable him to serve in a useful capacity in the present crisis.
I have heard some hon. gentlemen opposite sometimes say, when we were speaking here of conditions in other parts of Canada, that if men wanted to work they could find work. I have spoken to some of these hon. members privately and asked them: Can you place in some war industry in your constituency a well qualified man, or men who are willing to come to Ontario or Quebec from Saskatchewan, young men who are able and 
willing to work in any capacity? I have not been able to discover any place in Ontario which is willing to encourage men to come from Saskatchewan to find employment. I feel, Mr. Speaker, that by this time, the minister having written this letter on July 27 last, some machinery should have been set up whereby people such as the man of whom I have spoken could1 be placed in employment somewhere in Canada where they could make their contribution in the greatest struggle in human history. I submit that the government would do well to consider first its responsibility to agriculture, and, second, its responsibility to the large number of men in Canada who are anxious to get into industry at this time in order that they may make a greater contribution to our war effort than they are now making.
Motion (Mr. Ilsley) agreed to and the house went into committee, Mr. Fournier (Hull) in the chair.


Richard Burpee Hanson: 
James Lorimer Ilsley: Mr. Chairman, no part of the amount that has been spent under the War Appropriation Act of 1940 has been allocated specifically to the purposes set out in paragraph 1, which is the same as a corresponding paragraph in the War Appropriation Act of 1940.


Richard Burpee Hanson: Nothing
was spent this present year?


James Lorimer Ilsley: No; no sum has been
specifically allocated to that. There have been sums spent in nearly every department of government, but they are fairly small sums. The main expenditures have been, and needless to say will be, in the three defence departments and the Department of Munitions and Supply. But there are certain expenditures which are due to the war, and we try to be very careful not to allow any expenditures to be made under the War Appropriation Act which are not properly made under that act, but to allow only those which are due to the war and are really war expenditures. But war expenditures are made in nearly all if not all the departments of government. That is the best information I can give the hon. gentleman in answer to his question, but I cannot tell him what expenditures are made under 1	(c) or under the corresponding
subparagraph of last year's War Appropriation Act.
I am not aware of anything having been done in the way of providing for insurance or indemnity against war risk. There has been some discussion of it, and some suggestions made that something like that should be done, but I am not aware that anything yet has been done.


Richard Burpee Hanson: If that is so, why is it necessary to keep this in-if the government has not any programme? What the minister says is quite true. I presume this statement, "Other departments, $18,540,000," which is included in the $538,804,000 tabulation on the first column of page 822 of Hansard of February 18, does apply to every other department. Who decides, may I ask, whether a particular expenditure is a war expenditure or not, because the distribution of these amounts may make a very great deal of difference?


James Lorimer Ilsley: Yes.


Richard Burpee Hanson: I do not mean to say that it will make a great deal of difference to the sum total of the expenditure, but it will make a great deal of difference as to whether it is true war expenditure or
whether it is peace-time expenditure made and charged to the war. That is a very important function, and I wonder who attends to the distribution of that, and how it is done. Does the Department of Finance do that? Does the comptroller of the treasury have anything to do with that? Is it the auditor general, or who? I thought the hon. gentleman might dig into these details with a great deal of profit.


James Lorimer Ilsley: Yes. That is done by the governor in council either directly or through the instrumentality of the treasury board. The applications are made to treasury board for allotments or approval of draft estimates to be charged against the War Appropriation Act. The matter is considered, and a decision is made as to whether it is properly chargeable ' against the WTar Appropriation Act.


Richard Burpee Hanson: Is it left to the decision of the treasury board itself, or is there any system of expert accounting advice-I will put it that way-as to what is and what is not so chargeable? I am not an accountant, and I assume the minister is not either, but I know that there are standard accounting systems in respect of different classes of industrial, public utility and commercial operations, and that accounting has grown to such a fine point that to-day an expert in this line is able to direct and tell public utility corporations and so forth just what the proper practice is. Has advice of that nature been sought and obtained, or is it left to treasury board, which, as the minister knows, is a sub-committee of the cabinet, presided over by himself, and with a secretary-a very competent secretary,
I think, if it is the same man who used to be there? Is any one of these gentlemen who sit on treasury board competent to say, from expert experience and advice, what should be allocated to war and what is a peace expenditure? Let us have the low-down on that, if I may use that expression.


James Lorimer Ilsley: The treasury board as such assumes that responsibility unless, as I have said, it is taken by council itself. In some instances, council takes it itself directly; but treasury board has the advice of its experienced officials.


Richard Burpee Hanson: Are they competent to give the advice, and is it sought and taken, or is there any occasion on which their advice is rejected?


James Lorimer Ilsley: I cannot remember any
instance when their advice was rejected. But it is not their responsibility; it is the responsibility of treasury board itself.
War Appropriation Bill


Richard Burpee Hanson: I agree
with that. I want to know what the practice is?


James Lorimer Ilsley: The practice is for treasury board itself to decide, and if they make a mistake they are answerable for it. But I can give the hon. gentleman, perhaps, some border-line instances, if he wants me to take up time in doing it.


Richard Burpee Hanson: I think
this is a very illuminating discussion. At least I hope it is.


James Lorimer Ilsley: I am afraid I am rather encouraging questioning on it by the line I am taking.


Richard Burpee Hanson: That is
the very thing we should be doing here.


James Lorimer Ilsley: For instance, in respect to the Post Office Department, it might be argued that the additional expenditure due to greatly enlarged carriage of mail for troops overseas is an expenditure which is chargeable to the war appropriation, or it might be arguable that it is not, that it is merely an expansion of the peace-time activity which must come.


Richard Burpee Hanson: What has been the decision?


James Lorimer Ilsley: I think the decision has
been pretty much to put it in the peace-time expenditures. There is a considerable increase in the Post Office Department estimates this year. The hon. gentleman may notice that it is nearly 82,000,000. A great deal of it is caused by an expansion of work on account of war conditions; nevertheless it has been put in peace-time expenditure.


Richard Burpee Hanson: I suppose occasionally there is a conflict between one department and another. Does the Post Office Department put up a fight to have the additional expenditures charged up to war?


James Lorimer Ilsley: Oh, no.


Richard Burpee Hanson: I can
imagine the Postmaster General (Mr. Mulock), with his sword unsheathed, or what-not, fighting to have this burden taken off his shoulders so that he -may have a better report to present to the country, and without such a big deficit or whatever it may be. But I am not very serious about that. What I do want to know is, what is the rationale of the whole thing? The minister has given us a borderline case. I suggest to him that the proper course to pursue would be to have an expert decide this and advise the treasury board. Is there such an expert in the Department of Finance?


James Lorimer Ilsley: There is none in the world, that I know of.


Richard Burpee Hanson: I tried to intimate that there are expert accountants in various lines of business activity whose advice might be very useful to treasury board in a case of this kind. As a matter of fact, the minister has a lot of brain-trusters surrounding him. I do not know whether or not he has enough there to take care of this class of work. My fear is that there may be charged to war account a good deal of money *that ought to be charged to peace-time activities. I should like to be reassured on that point. That is a very proper feeling for me to have in the interests of the public, because I do not see very many people, especially in some departments having regard to war expenditure, who are trying to save much to the taxpayers.


James Lorimer Ilsley: What is the question?


Mr. HANSON (York-Sunbuiy):: Should
there not be a system set up officially charged with the responsibility of advising the treasury board as to what is what?


James Lorimer Ilsley: I think the treasury board is adequately and sufficiently advised; I do not think they require any more advisers on this point. I volunteer this information to the hon. gentleman, which again perhaps is not wise, that he should have a copy, as perhaps he has already, of an order in council that was passed last October or November, if I remember correctly, after a great deal of consideration, setting out the procedure to be followed in the approval of draft estimates and subsequent allotments.


Richard Burpee Hanson: The
allocation?


James Lorimer Ilsley: Yes, out of the money voted by the War Appropriation Act. If the hon. gentleman thinks a great deal of thought has not been given to that, he is wrong.


Richard Burpee Hanson: I am not suggesting anything of the sort; I am just asking for information.


James Lorimer Ilsley: There is a long and very carefully worked out order in council which sets out the procedure, but that does not do *away with the necessity of judgment being exercised at some point as to whether certain items should be paid out of the war appropriation or not.


Richard Burpee Hanson: That is
a very interesting statement. I confess at once that I cannot possibly read all the orders in council that have been passed by

War Appropriation Bill
this government, some thousands in the course of the year. No human being could undertake to do it. I should be glad if the minister would have a copy of that order in council sent to me. It might have been useful if he could have read it to us here to-night. But the statement that the matter has been given great consideration is reassuring. Of course I have always felt that the treasury board is a safeguard to the public. I know in the days when I was on the treasury board we sharpened our pencils and went at it, and we always felt, after a treasury board meeting, that we had earned a good day's pay by savings to the country. I hope my hon. friend and his colleagues feel the same satisfaction that we used to feel when we cut down a Buick car to a Ford for some militia officer; for in peace time I always found that the higher the rank of the officer, the more expensive car he wanted; usually we limited them to Fords.


Mr. POWER:: Your colleague sitting alongside you (Mr. Stirling) did not appreciate your efforts.


Richard Burpee Hanson: He was
not there then. I am glad to hear the minister give that assurance as to the safeguards being observed with respect to the proper allocation of these moneys. My fear was-he has to a degree dissipated it-that items which should be charged to peace-time activities might be charged to war account.


John Ritchie MacNicol: Can the minister give
the committee details of how the amount of $1,300 million was arrived at?


James Lorimer Ilsley: Yes. For national defence
the estimate is $1,261,226,524. I am afraid I shall have to revise that. There has just been an adjustment made in one of these figures, so I shall leave it to my colleague the Minister of National Defence for Air (Mr. Power) to give the exact figures, if he has them.
The army figure is 8666,574,659: naval services, $181 million; and air service, $421 million odd, with a credit of about $40 million expected to be recovered from other commonwealth governments. Those are the main items. My colleague the Minister of National Defence for Air says that the amount expected to be recovered from other commonwealth governments is not $40 million but $35 million.


Mr. DOUGLAS (Weyburn):: Does that
include the commonwealth air training plan?


James Lorimer Ilsley: Yes, everything. Those are
the three services, the three defence departments. Then, through the Department of
Munitions and Supply, it is expected that about $180 million will be expended; and through other departments, about $32 million.


Karl Kenneth Homuth: Does the $180 million for munitions and supply include the new buildings that were constructed?


James Lorimer Ilsley: Yes. Then there are some other minor expenditures which I am afraid I cannot give accurately at the moment. As I said in my speech, the total of the estimates that have been submitted will come to perhaps $150 million over the $1,300 million. But the figures I have given will substantially cover the sum of $1,450 million that I mentioned.


John Ritchie MacNicol: Have all the amounts
that go to make up this $1,300 million been definitely figured out to arrive at a definite amount?


James Lorimer Ilsley: Oh, yes. Of course the hon. member will realize that this is not like estimating peace-time expenditure, where rather close estimates can be made. There are so many uncertain factors involved in these estimates that they may be very wide of the mark. The figure for the army, for example, is made up of the estimated cost of various programmes allowing for a certain percentage of wastage. There is an enormous amount of detail; but after the figures are arrived at, various qualifying factors come in.


John Ritchie MacNicol: This is more or less like a blank cheque.


Clarence Decatur Howe: How many shells are you going to shoot? That is the main thing.


James Lorimer Ilsley: I gave at least three factors of uncertainty. There is the question of wastage, the amount of ammunition used-that depends on the nature of the warfare that develops-there is the question, how much of this amount for the Department of Munitions and Supply will be recovered; that is, how much duplication there will be? There is also the question of deliveries, which to a considerable extent will depend upon the promptness with which parts, principally machine tools, can be obtained from the United States, from which country it is necessary to import them.


John Ritchie MacNicol: When the minister was speaking to this motion he said:
In view of these various uncertainties I thought it preferable not to ask at this time for the total of the estimates which have been submitted.
At the time I thought the amount was more or less uncertain; that is why I have been trying to get a break-down of this amount of
War Appropriation Bill

$1,300,000,000, which certainly is a very large sum of money. Having in mind the fact that at bhe time of the great war gold was valued at $20.67 per ounce, whereas to-day it is $35 in New York and $38.50 here, could the minister tell us what this $1,300,000,000 would have amounted to at the time of the great war, bearing in mind the difference in the price of gold? In the last analysis, it seems to me that to-day $1,300,000,000 is not such a large sum of money, having in mind the value of gold at the time of the great war compared with to-day.


James Lorimer Ilsley: I feel sure that it would be greater than at the end of the last war. That would not depend upon the value of gold; it would depend upon the price level, and it is my impression that the price level at the end of the last war was considerably' higher than it is to-day.


John Ritchie MacNicol: I was thinking of it in reference to the price of gold during the great war.


James Lorimer Ilsley: I do not think that has
anything to do with the matter.


Mr. DIEFENBAKER:: I should like to ask the minister a question arising out of the statement he made, as reported at page 823 of Hansard, with regard to advances of money being made by the Department of Munitions and Supply' in order to assist private corporations in the construction of necessary plants and equipment. The minister said:
Large sums of money' have been advanced, and additional sums will be advanced, to contractors to pay7 for adding to their plants or to build new ones. Additional sums will be advanced to provide working capital.
Does that mean that there has been any departure from the scheme that has been in operation during the past year, under which advances were made only for the purpose of assisting in the construction of plants?


James Lorimer Ilsley: Some sums have already been advanced for working capital.


John George Diefenbaker: What is the total of the advances made during the past year for this purpose?


Clarence Decatur Howe: Advances for working capital are made only in the case of government owned plants. There have been perhaps three or four instances in which money has been advanced to private contractors for working capital, but that has always been under the direction of a trusteeship. They have been accountable advances to help contractors carry on contracts that were too large for their financial position; that is, contracts which they could not finance through their banks. In those instances we have appointed

one or two trustees, as the case might be, to watch the expenditure of this money and to recover it. I believe all such advances have been recovered, and I doubt whether at the moment there are outstanding any capital advances to private contractors.


John George Diefenbaker: What is the anticipated amount that the Department of Munitions and Supply will advance to private contractors during the current year?


Clarence Decatur Howe: I know of no plan for advancing working capital to private contractors during the current year. As I have said, we have made such advances in four or five instances. I know an advance was made in one instance to an aircraft company to finance the purchase of materials until they could deliver their planes, and I know of two or three other instances of that nature. As I stated, moneys so advanced have been under the direction of a trusteeship. The money has been turned over to the trustees to advance to the company, and to recover from the company. It is my impression that all those transactions have been closed; that is, the working capital has been paid back to the government, and none is outstanding at the moment.


John George Diefenbaker: The question I am asking is, how much was advanced during the past year and what is the anticipated amount of such advances for this year? During the course of his remarks the Minister of Finance made this statement:
. . . additional sums will be advanced to contractors to pay for adding to their plants or to build new ones.
I am asking two questions based upon that statement. First, what was the amount of the advances made last year? Second, what is the amount of the anticipated advances for the current year?


Clarence Decatur Howe: Capital assistance, funds
expended in creating new facilities, to wholly owned government companies totalled $16,703,000 up to January 31, 1941, and capital assistance to private companies amounted to $42,297,000 up to the same date. Those are all capital advances for the construction of new facilities; there is no working capital shown in this statement. As I have said, it is my impression that at the moment there are no outstanding working capital advances to private companies.


John George Diefenbaker: Then do I understand that advances to private companies for the construction of new facilities have not been all repaid?

W ar Appropriation Bill


Clarence Decatur Howe: Of course not. Some of the facilities covered by such advances are still under construction. The ownership of the facilities, however, rests with the government.


Richard Burpee Hanson: That is
your security.


Clarence Decatur Howe: That is the security, and only after the war is over will the advances be liquidated.


Mr. COLDWELL:: I was just going to ask a question along those lines. What is the arrangement with regard to the retirement of these advances? The minister states that the crown owns these facilities; I take that to be the fact.


Clarence Decatur Howe: That is correct.


Major James William Coldwell: Is any provision made for the depreciation of these extensions? If so, over what minimum and maximum periods does this depreciation run? I am asking this question quite deliberately, because I have heard it stated that in these contracts in some instances there is a very short period of depreciation, under which the ownership will pass from the crown to the original owners of the factory in a very short time. I should like to have that point cleared up; that is in connection with the privately owned plants.


Clarence Decatur Howe: It is difficult to recall all
the types of contracts we have. Of course, under the ordinary practice, where a plant has been built at public expense for a private owner, the private owner operates that plant for the government, sells the material at cost and receives a management fee for managing the plant. In that case no question of depreciation is involved. The government owns the plant and owns the product of the plant. That is true also if it is a British government plant, as many of them are; and it also holds true if the product is partly for the Canadian and partly for the British government, as happens in many instances.
I am tr3'ing to cast my mind around to see if we have any instances of the kind to which my hon. friend has referred. In some instances we install specialized machinery for a particular type of production in a privately owned plant. But there again the machinery remains the property of the crown. The price of the product is adjusted, having in mind the fact that the machinery is owned by the crown; and there is no provision that the ownership in the machinery passes to the private company. At least I can think of none. At the end of the war we own our machinery. We have been getting the advantage of owning the machinery by the adjustment in the price of the product. In other
words, no depreciation factor has been involved in the price to us. Whether or not there is a contract outstanding which does provide for depreciation, I cannot say. I do not recall any at the present time, but I shall be pleased to inquire.


Major James William Coldwell: I wanted to know if it was a general practice. If the minister cannot recall any examples, I suppose we may conclude it is not a practice.


Clarence Decatur Howe: No, it is not a practice.


John Ritchie MacNicol: I should like to ask a
few questions in connection with the purchase of machinery. I was in western Ontario last week, and while there I heard a story. I do not know whether there is any truth in it, but the fact is it had to do with the purchase of machinery from a company in the United States. I do not wish to mention the name of the man who gave me the information, nor do I say it is true. He told me, however, that he had inquired from a machine company in the United States respecting the purchase of a certain machine, and that he had been quoted a price. But, upon making an attempt to buy it, he received orders to make the purchase through, I presume, one of the companies set up by the government-


Clarence Decatur Howe: The Citadel Merchandising Company Limited.


John Ritchie MacNicol: [DOT]-to buy machinery.
When the machine arrived, having come in a roundabout way, it was said it was priced much higher than it would have been had it been bought direct. Is such a condition possible?


Clarence Decatur Howe: All machinery to be paid for by the government is purchased through the Citadel Merchandising Company Limited, so that we may take advantage of mass buying, and so that the government can itself supervise the purchase of machinery.


Richard Burpee Hanson: That is the government's own company.


Clarence Decatur Howe: Yes. The president of the company is Mr. Thomas Arnold, and the directors are L. J. Belnap, C. E. Gravel, J. E. Johnson, president of the, Canada Cement company, and F. K. Morrow of Toronto.


Karl Kenneth Homuth: How many of them have ever had experience?


Clarence Decatur Howe: I believe Mr. Belnap has been in the machinery business all his life, as has Mr. Arnold.


John Ritchie MacNicol: Manufacturing?


Clarence Decatur Howe: No, handling.
War Appropriation Bill


John Ritchie MacNicol: A jobber?


Clarence Decatur Howe: Handling machine tools. Mr. Belnap at one time was a partner in a firm in Montreal which dealt in machine tools. Later he became president and general manager of the Worthington Pump company of New York, one of the largest tool companies in the country.


Richard Burpee Hanson: Absolutely.


Clarence Decatur Howe: Is the hon. gentleman a
shareholder?


Richard Burpee Hanson: No, but I know the company.


Clarence Decatur Howe: Mr. Thomas Arnold has dealt in machine tools most of his life. Mr. J. E. Johnson, president of the Canada Cement company, is one of the greatest users of machine tools, and Mr. Morrow is a man whose business judgment is respected throughout Canada. I know these men meet at least once a week, and I am told that on occasions they meet at least two or three [DOT]times a week. I have great confidence in the work they have done in an exceedingly difficult field.
I might say that the machine tool problem is the bottle-neck of the war effort in England, Canada and the United States; and I believe the Citadel Merchandising Company Limited have obtained deliveries of machine tools for Canadian production which place us in a rather fortunate position as compared with either Great Britain or the United States.


John Ritchie MacNicol: I am not saying there is anything wrong, nor am I casting any reflections upon any subsidiary of the government; but I should like to know if the condition I have described is possible. For the convenience of the minister I shall repeat what happened. A party inquired in the United States for a price on a large machine, a type with which I am thoroughly familiar. He could not buy it, although he had been quoted a price for which he could buy it. Apparently he had to buy it through some subsidiary company, or some company handling machinery for the government. On receiving the machine from the company he found it cost him more money. Is that possible? If the government has set up some company to act as a purchaser of machines, should a machine cost more when it is purchased through the government's company than if it were purchased direct from the manufacturer in the United States? I believe in this instance the person had to purchase it through the subsidiary of the government. In my judgment, the machine should not cost

[DOT]more to .the Canadian purchaser if he purchased it through a government channel than if he purchased it direct from the manufacturer.
Is it possible that in this particular instance the machine could have cost the Canadian purchaser more than the price at which he could have bought it direct? I do not say that such a thing did take place; but the gentleman told me that that was what happened. He was not charging anybody at the time, but was just wondering what kind of business was being done.


Clarence Decatur Howe: I think it is the duty of a member of parliament, if he hears a charge of that kind, to get particulars, supply them to the department and let us check up. I would say it is impossible that that could have happened.


John Ritchie MacNicol: I am glad to hear that.


Clarence Decatur Howe: I believe the Citadel company is securing tools economically, even in the type of market in which they have been buying in the last year.


Richard Burpee Hanson: That was the intention of setting up the company, was it not?


Clarence Decatur Howe: Yes, certainly. Obviously, we could not have private manufacturers going out and making their own transactions in connection with machine tools, when the government will own and pay for them. That would be quite impossible. We must have a central authority through which orders are placed, and which will take the responsibility of stamping with the government's stamp, and protecting the ownership in the tools. We believe the company is operated efficiently, but if anyone brings us evidence that it is not so operated, we shall be glad to examine the situation and see that it is straightened out.
I believe, however, that, instead of passing on rumours of that kind, it would be the duty of a member of parliament to get the particulars of such a transaction, and turn them in to the Department of Munitions and Supply. That is the only way of which I know whereby we could check transactions of that kind. I believe rumours should be stopped immediately by asking for the exact details.


John Ritchie MacNicol: I am glad to get the minister's explanation. When the story was told to me, I asked the gentleman if I might use his name, but he said, "Oh, no, do not do anything like that."


Clarence Decatur Howe: I suggest to my hon. friend that under the circumstances it is not wise to spread a rumoured transaction of that kind all over the newspapers of Canada.

War Appropriation Bill


John Ritchie MacNicol: I have heard quite a good deal of talk along that line, and I am within my rights to ask for the minister's assurance that such is not possible. If he says it is not, then I am satisfied that the rumour is not correct.
One further question: A few days ago I visited a large plant to which a large addition is being erected. I presume the money to build that addition is being advanced by the government.


Clarence Decatur Howe: What plant was that?


John Ritchie MacNicol: Are contracts for such
additions let by the government or by the company for whom the addition is being erected?


Clarence Decatur Howe: Sometimes one way and sometimes the other, but the details of the contract are always subject to the approval of our construction branch. The plans and specifications are approved by that branch, and it supervises the expenditures. Sometimes tenders are called for by the company itself, especially when a contractor may have a specialized knowledge of the layout required. In such a case, however, the plans and specifications are approved by the government. The prices received are submitted to the government, and the selection of the contractor is made by the company with the joint approval of the government.


Victor Quelch: Would the minister give a resume of the government's action in connection with borrowings since the declaration of war? First, I should like to know the amounts which have been borrowed from the chartered banks, the dates of maturities, the interest rates, the percentage of the loans used for refunding and the percentage used for current expenditure. I should like to know also the extent to which deposits were expended as a result of those borrowings. If possible, I should like the minister to state what the government action will be with regard to the repayment of these loans. Will it be done by further borrowings from the chartered banks, or will it be done by the payment of legal tender? I noticed a statement in the paper that these loans by the chartered banks were to be repaid by legal tender. Is that to be done, or will there be further borrowings from the chartered banks?


James Lorimer Ilsley: I cannot give that information to-night because that will require the preparation of a careful statement.


Victor Quelch: Will the minister give that during the course of the debate?


James Lorimer Ilsley: I can if it is the wish of the committee that this resolution should remain
in committee past eleven o'clock. I can give that when the committee meets again, or it could be given on the bill.


Victor Quelch: Would the minister include in his statement information with regard to borrowings by bonds and by savings certificates?


James Lorimer Ilsley: I will give what information is available. I am not just sure that I can give all that information, but I will give what I can.


Mr. ROSS (Souris):: Will any of this
appropriation be used for the Department of National War Services and, if so, what amount?


James Lorimer Ilsley: The estimate submitted for the Department of National War Services is $1,948,252.


James Arthur Ross: Is that the total
expenditure?


James Lorimer Ilsley: That is the estimate of the amount to be taken out of this appropriation for the Department of National War Services.


Richard Burpee Hanson: Why should
we not have a break-down of the estimates for these different departments?


James Arthur Ross: Will that amount take care of the department for the whole year, or will there be something later on?


James Lorimer Ilsley: If this were a peace-time estimate, it would be all that the Department of National War Services could get without a governor general's warrant or another vote, but under the War Appropriations Act that is not the situation. If it is desired, we could give a break-down of that amount, but there would be nothing final about it. The final amount might be more or less.


Richard Burpee Hanson: Subject to this order in council.


John George Diefenbaker: According to the
Minister of Munitions and Supply, advances to these private companies during' the past year amounted to $42,297,000. I should like to know from the minister how much it is anticipated will be advanced during the next fiscal year. I should like to know the largest amount advanced to any one company last year, and the name of that company.


James Lorimer Ilsley: The hon. member's questions are on Hansard, and I shall have to get that information.


Alexander Malcolm Nicholson: Last year we passed
a vote calling for the expenditure of $700,000,000. Could the minister break down that vote to show how much was expended under the four paragraphs of this resolution?
War Appropriation Bill


James Lorimer Ilsley: No, I could not. That vote was not allocated to the four paragraphs.


Mr. BLACK (Cumberland):: Where can
an hon. member obtain a statement of expenditures on specific undertakings, such as Federal Aircraft or the Debert military development?


Charles Gavan Power: With regard to the airport
and military camp at Debert, if the hon. member will ask a question I shall endeavour to get the information. I would have particulars as to expenditures but not as to payments made. Usually the payment is made some time after the expenditure.


Percy Chapman Black: This was
originally an emergency landing field but it has been developed into a large military camp. Where shall we be able to get the total expenditures made on that camp?


Charles Gavan Power: The Department of National Defence would have that.


Percy Chapman Black: Will it
appear in some return submitted to parliament, or shall we have to ask for information with regard to each one of these undertakings?


Richard Burpee Hanson: If the
question is asked here, the information should be given, provided the minister has it available.


Charles Gavan Power: We shall be only too glad
to give any information asked for. Eventually this would appear in the public accounts, but it might be hard to find the information in connection with a military camp like the one at Debert. I do not know whether there are, but it is quite possible that there have been roads constructed in connection with this camp and there might be a dozen different items throughout the public accounts. It would take one who was accustomed to perusing the public accounts to find everything relating to the Debert military camp. If my hon. friend wants the expenditures to date, there would be no trick in getting them.


Percy Chapman Black: I should like
the total expenditures and the total commitments made with regard to the Debert military camp and airport. Would the Minister of Finance advise the committee the practice with regard to payments? I have had a number of complaints, and I know the minister has had many more, in connection with delay in the payment of accounts. Sometimes these commitments involve the total capital or the total credit of a company.


James Lorimer Ilsley: The comptroller of the
treasury must verify the facts, and when the facts are verified the account is paid. What

the specific steps are that are taken for the purpose of verifying the account, I cannot say at the moment, but I can get that information if it is of interest to the hon. gentleman. It is a matter of detail.


Richard Burpee Hanson: The principles are laid down in the statute, are they not?


James Lorimer Ilsley: Yes, I think so.


Karl Kenneth Homuth: Months and months have gone by after the delivery of goods, but firms have received no payment yet, and they have been very much embarrassed. The banks will no longer advance them money, and that is a very serious matter for some of them. I cannot understand why, two or three or four months after the goods have been delivered, no payment has yet been made.


James Lorimer Ilsley: There is often a reason which is not the fault of the comptroller's staff. Sometimes delays may take place because the comptroller's staff is understaffed or something of that kind. There has been a continuous increase in the number of appointments of accountants, auditors, clerks and others working for the comptroller of the treasury, trying to keep up with the great increase in the work of the office. I know that in many instances it has not been the fault of the comptroller or the fault of his staff that delays have taken place.


John Ritchie MacNicol: I should like to ask the Minister of Munitions and Supply one more question. If company "A" desires to buy a steel shearing machine, must it obtain permission to buy that machine from the Citadel company vphich has been set up by the government and to which the minister has referred?


Clarence Decatur Howe: If company "A" is buying a shearing machine with its own money, it does not need to refer to Citadel at all, except of course at the present time, to buy a tool from the United States, there must be a clearance from the United States government. As my hon. friend knows, the export of machines is by special permit, and usually in such a case Citadel is asked to get the release, but Citadel does not handle the account in any way if it is a transaction between two private firms.


Richard Burpee Hanson: In other words, Citadel is given priority.


Clarence Decatur Howe: Yes. Usually as a matter of convenience, priority is obtained through Citadel, which keeps its own officer in Washington for that purpose. In that way it may

Railway Act-Rates on Grain
be interested in the transaction, although the money is paid direct from one company to the other.


John Ritchie MacNicol: Citadel does not direct company "A" to the company from which it must buy the machine?


Mr. STIRLING:: Nor is Citadel buying machines for private firms?


Clarence Decatur Howe: No. Perhaps I had better qualify that. Citadel buys machines which the government will own, and which it sometimes installs for a private plant. My hon. friend will understand that we sometimes equip a private plant to do work for the government, but the tools will remain the property of the government.


Richard Burpee Hanson: I -would ask the Minister of Finance to bring down to-morrow or as soon as convenient a statement of the expenditures and commitments up to the latest date for which the information is conveniently available with regard to the cost of the thirty-day training plan. I was in communication with the Minister of National Defence (Mr. Ralston) about the matter and he undertook to get me these figures, but they have not yet been made available.


Charles Gavan Power: They will certainly be available to-morrow. I saw the letter here to-night.


Richard Burpee Hanson: I would think they are available and I would like them spread on the record, with the breakdown, if the department has it, showing the amount that was allocated for the scheme out of the 1940 appropriation to be spent (a) by National Defence, and (b) by War Services; also how far the activities of War Services go, and the expenditure in that respect before these men are handed over to National Defence for training. My understanding is that under the present practice War Services calls the men up, pays for their preliminary medical examination and gives them their transportation, all of which of course is charged up to this vote. Then, at the training centre these men are delivered over to National Defence, and from then on the expense in respect of these men is for the account of National Defence until they are paid off, when they are re-delivered, so to speak, to War Services, which transports them back to their homes. I think that is the modus operandi. The deputy minister of war services gave me an item, on request, but it did not include expenses for transportation either way, on the theory that the bills had not come in. I can hardly understand that. I am not doubting his word for a moment, but these men were called up in October.


Charles Gavan Power: I am not sure about their transportation home. I imagine they would go home at the expense of National Defence. I am not clear on that, but certainly War Services pays transportation to the camp.


Richard Burpee Hanson: If the minister, who knows much more about the matter than I do, says that the men return home at the expense of National Defence-


Charles Gavan Power: I think so.


Richard Burpee Hanson: -then that should be included.
This appropriation includes the cost of housing, the hutments. I should like to have the break-down of the cash expended for that purpose up to the end of January, if that is available. That may be too recent a date, but certainly the expenditure up to December 31 last, and the commitments up to that date, should be available. I should like to have the amount of the appropriation for that purpose and the amount out of that appropriation still available to be paid, in as full detail as possible. I am sure they have that information at the department, and we would like to [DOT]have it as a basis for further questioning. As it is now nearly eleven o'clock, I would suggest to the minister that we rise and report progress.
Progress reported.
On motion of Mr. Lapointe (Quebec East) the house adjourned at 10.58 p.m.
Friday, February 21, 1941.