1941-06-09

Mr. BRADETTE:: Mr. Speaker, on the
occasion of the celebration of the king's birthday-


Right Hon. W. L. MACKENZIE KING (Prime Minister):: I am sorry to interrupt my hon. friend, but 1 think we each had the same thought in our minds. As hon. members are aware, to-day has been fixed by proclamation for the observance in Canada of His Majesty's birthday. The anniversary of His Majesty's birthday does not actually come until December 14, but it is being celebrated in Great Britain on Thursday the 12th of this month. However, to-day being fixed for the observance in Canada, I take it it will be the wish of all hon. members that we begin to-day's proceedings with the singing of the national anthem. I suggest accordingly.
Whereupon the members of the house rose and sang God Save the King.



INCOME WAR TAX ACT


William Lyon Mackenzie King: May I be permitted to
add to the file partly tabled a day or two ago some additional correspondence which has passed between the premier of Ontario and myself.



WAR EXPENDITURES


[Stage Direction]
Mr. J. T. THORSON (Selkirk) moved that the third report of the special committee on war expenditures presented to the house on June 4, be now concurred in.
Hon. R. B. HANSON (Leader of the Opposition):: I understood that there was
to be some discussion on this. It is my understanding that the work of one of the subcommittees is not quite complete. If it would be agreeable to the chairman or the members it would be a matter of great convenience if this discussion could be postponed until to-morrow.


Mr. THORSON:: I am quite agreeable to that.
Motion stands.



DEFENCE OF CANADA REGULATIONS


Hon. J. E. MICHAUD (Minister of Fisheries) moved:: That the fourth and final report of a special committee on the defence of Canada regulations, presented to the house on the 4th instant, be now concurred in.
He said: Since very little of this report has been brought to the attention of the public it might be appropriate to say a few words by way of explanation.
As hon. members of this house know, the defence of Canada regulations are issued under the authority of the War Measures Act for the protection of the realm and the safety of the state, for the efficient prosecution of the war, and to protect Canada and her people from the activities of the enemy. The responsibility for administration of these regulations rests with the government and has been entrusted to the heads of various departments: the Minister of Justice, the Secretary of State, the Minister of National Defence, and, in some respects, the Minister of Transport. The regulations provide for protection against those who would give themselves to espionage activities or acts likely to assist the enemy.
The reasons for these regulations have been given to the public on many occasions; and of course, being rules passed during war time, in their nature and operation they are restrictive of the general liberties of the subject. Because of that fact, in some quarters they have not been altogether accepted, and in many instances have been criticized. The regulations were passed the day following the declaration of war, and have been in force ever since. During the last session a committee was appointed which studied the regulations and recommended certain amendments which were thought desirable in view of existing circumstances. Again this year,

Defence of Canada Regulations
on March 4, the house appointed a committee to look further into the regulations and report to the house as to what it might be advisable to suggest to His Excellency the Governor General by way of amendment. The committee held twenty-four meetings; a subcommittee was appointed, and the final report of the committee was made on June 4, appearing in Votes and Proceedings of that date.
The principal recommendations contained in that report were made for the purpose of giving the assurance that the administration of such regulations would afford full protection to those who might be affected by them; but before the final report was made an interim report was presented on April 3, containing suggested amendments to rules 26A, 26B and 37A, which amendments were accepted immediately by his excellency and at once implemented. The effect of these amendments was that persons who are nationals of and who were born in Czechoslovakia should be excluded from the categoiy of enemy aliens. The report was concurred in and adopted by the house.
During the course of its deliberations the committee was fortunate in having appear before it Mr. Alexander Patterson, his majesty's commissioner of prisons for Great Britain, who happened to be in Canada in connection with the internees sent to this country from Britain and who gave your committee valuable information as to the manner in which similar regulations were administered in Great Britain.
Your committee has recommended important amendments to regulation 15. If hon. members will refer to the defence of Canada regulations they will find that regulation 15 reads:
The Secretary of State of Canada may make provision by order for preventing or restricting the publication in Canada of matters as to which he is satisfied that the publication, or, as the case may be, the unrestricted publication, thereof would or might be prejudicial to the safety of the state or the efficient prosecution of the war, and an order under this paragraph may contain such incidental and supplementary provisions as may appear to the Secretary of State to be necessary or expedient for the purposes of the order including provisions for securing that documents, pictorial representations, photographs or cinematograph films shall, before publication, be submitted or exhibited to such authority or person as may be specified in such order.
The Secretary of State is entrusted with the duty and obligation of prohibiting the publication of pamphlets or other documentary propaganda which may be subversive, and he 
has the responsibility of declaring that such publications or newspapers are carrying on subversive activities. Some people, however, think this power might be subject to abuse; that it is altogether too much power to be given to one person, and that there is danger that such power might be used-not by the present incumbent of the office, but by possible successors-to restrict the publication of documents which could not be considered subversive. Therefore the committee has considered it advisable to recommend that the Secretary of State be authorized to call in someone to pass upon his orders when those concerned felt justified in appealing from his decision.
If the report of the committee is adopted, the following will be added to regulation 15:
(3)	Any person against whom an order is made under this section may take objection to such order to. a committee appointed by the Minister of Justice to consist of a person who holds or has held high judicial office.
(4)	When objection is taken, the functions of such committee shall be to consider and make recommendations to the Secretary of State with respect to any objections against such order which are duly made to the committee by the person to whom such order relates.
(5)	Notice of objection shall be made to the Secretary of State within fourteen days from the date of service of the order in question, which order shall contain a provision notifying the person of his right to make objection and shall refer to the publication or publications in respect of which the order has been made.
(6)	On receipt of any such notice of objection, the Secretary of State shall forthwith notify such committee who shall make arrangements for the hearing of such objection.
In the event of the adoption of these recommendations the person or persons affected by the suppression of publications would have the right to object to the order of the Secretary of State, such objection to be heard by a person occupying or having occupied high judicial office. His report would be made to the Secretary of State.
A further recommendation of some importance suggests the repeal of regulation 22, and the substitution of another section. Hon. members are no doubt aware that section 21 provides for the detention of persons who are believed to be carrying on subversive activities. This regulation applies to British subjects, and the onus is placed upon the Minister of Justice of dealing with the liberty of such persons. Strong exception has been taken to the procedure which has heretofore been followed in dealing with these persons. Some critics have gone so far as to say that no such person should be arrested, detained or interned, without first having been tried as

Dejence of Canada Regulations
to the justification for such detention. The committee has found that in the past, while there has been no abuse in the administration of these regulations, there might have been some justification in the minds of some people for apprehension as to t'he safety of persons who might have been detained without just cause. The committee recommends therefore slight changes in procedure, so that assurance may be given to the public that those who are detained will have full opportunity of appealing from the detention order made by the Minister of Justice. Under the amendment they may have their cases reviewed, and are given the opportunity to offer evidence in support of their contentions.
Heretofore an appeal from an order of detention was made to a committee of one, and it was stipulated that such person must hold high judicial office. It has been claimed that this provision is not wide enough, and that the tribunal hearing an appeal should consist of more than one person. The committee recommends therefore that it consist of three persons, the chairman being a person holding or having held high judicial office.


Richard Burpee Hanson: No; the word "high" has been eliminated.


Joseph Enoil Michaud: Yes, that is correct. The expression "high judicial office" applies only to regulation 15. In regulation 22 the word "high" has been eliminated, and the chairman may now be a person holding judicial office.
Perhaps it would be well if I were to place on record the regulation suggested in substitution for the present regulation 22. The committee recommends:
That regulation 22 be repealed and that the following regulation, to be numbered 22, be substituted therefor:
22. (1) Any person aggrieved by the making of an order against him under the powers conferred by the last preceding regulation may make his objection to an advisory committee as provided in this regulation.
(2)	For the purpose of this regulation the Minister of Justice shall appoint one or more advisory committees, each to consist of three persons, to consider and make recommendations to him with respect to any objections against an order made under the last preceding regulation. The number of committees appointed shall, in the opinion of the Minister of Justice, be adequate to deal promptly with the oases arising in the different parts of Canada.
(3)	The chairman of each committee shall be nominated by the Minister of Justice and shall be a person who holds or has held judicial office.
(4)	As soon as possible after detention under an order made under the provisions of the last preceding regulations, the person agninst whom the order is made shall in every case be informed
of the general grounds on which he is detained and notice of his detention shall, where possible and not contrary to the public interest, be given to his family or such person as he may request.
(5)	It shall be the duty of the Minister of Justice to secure that every person detained as aforesaid is informed of his right to make an objection under this regulation.
(6)	A person desiring to make an objection shall deliver to the person having his custody a written notice of objection, signed by the objector, within thirty days from the date of such detention or such further time as the Minister of Justice in his discretion may allow, and a true copy of such notice shall forthwith be forwarded by the person aforesaid to the Minister of Justice for transmission to the chairman of a committee.
(7)	The chairman on receipt of such notice of objection shall give such directions as may be convenient and necessary for the prompt and just disposition of the objection.
(8)	It shall be the duty of the chairman to inform the objector within a reasonable time before the hearing of the grounds on which the order has been made against him, and, in order to enable him to present his case, to furnish him with as full particulars of the reasons for such order as in the opinion of the chairman the circumstances permit, and such particulars shall be further supplemented by the committee at the hearing by giving the objector all such further particulars as it shall deem necessary and advisable.
(9)	The objector may be represented by counsel, solicitor or agent.
(10)	The hearing may take place at ,any place and it may be adjourned from time to time as the committee shall determine. The Minister of Justice shall cause to be put before the committee all the information about such person available to the minister except such as is not in the public interest to disclose.
(11)	Where the Minister of Justice has referred a recommendation of an advisory committee to the commissioner of the Royal Canadian Mounted Police in order that the latter may have an opportunity of putting such further material as he may desire before the minister, the commissioner shall submit such material within a delay of fifteen days or such further time as the minister may allow.
(12)	The chairman or any member of a committee may administer oaths, and a committee may receive and accept such evidence and information on oath, affidavit or otherwise as m its discretion it may deem fit and proper.
(13)	A committee shall have all the powers and authority of a commissioner appointed under part I of the Inquiries Act, chapter 99 of the Revised Statutes of Canada, 1927.
(14)	The Minister of Justice may make further rules as to the manner in which objections against an order ,as aforesaid may be made and 'disposed of.
(15)	The committee shall consider and make recommendations on any matter arising under these regulations which may be referred to it by the Minister of Justice.
These are the main recommendations made to the house by the committee in connection with regulations 15 and 22.
365S
Defence of Canada Regulations

A minor amendment is suggested to regulation 39, which has to do with the spreading of reports or the making of statements prejudicial to the public interest or the carrying on of the war. A recommendation is made in respect to persons who "aot in a manner prejudicial" to his majesty or who .nterferes with the success of his majesty's forces. A recommendation is made in connection with regulation 58, covering the forfeiture of articles seized by the police and providing that forfeiture and destruction of such articles may be ordered by the Attorney General of Canada or the attorney general of any province.
A recommendation is made that internees be segregated according to their classification. A recommendation is made 'hat internees be given the privilege of receiving visitors provided that it is not against the public interest. The committee also recommends that before a person is taken to a detention camp he should be detained in the gaol or other place of confinement nearest to his place of residence.
It is hoped that these recommendations will be accepted by the house. It is true that in some respects they would seem to change the condition of affairs which has hitherto existed. The committee recommends that the chairman of each committee shall be a person who holds or has held judicial office. It has been brought to our attention that in Great Britain all the members of the committees are laymen and that it might be possible that a superior court judge or a judge of the high court would find it difficult at times to preside permanently.
I move that the report of the committee be adopted.


Mr. GREEN:: What did the committee find with regard to naturalization and deportation?


Joseph Enoil Michaud: The committee did not have much time to go into those matters, but studied them sufficiently to be able to report that it would appear that the naturalization and immigration laws would not need to be amended at the present time, because they are not being used to any considerable extent. Before the war is over, however, it is possible that they may have to be revised.
The committee recommends:
Your committee has received some evidence and has investigated these two important subjects in part only and, notwithstanding the fact that your committee has held a great many meetings, including on occasions two meetings a day. the limited time at our command has made it impossible to devote the time to these subjects which they require in order to enable a proper report to be made to the house.

Your committee therefore respectfully begs to recommend that at the next session of the house the law relating to naturalization and deportation and matters incidental thereto be the subject matter of a reference to a committee of the house.
The committee felt that the law with respect to naturalization will have to be amended, in respect to procedure if not in principle. The same is true with respect to the law having to do with immigration and deportation. In view of changing conditions and the possible influx of immigration after the war, the committee thought it might be well that a committee of the house should be set up at the next session, or later if necessary, to study these two subjects exclusively.


Howard Charles Green: That would be separate from any committee studying the defence of Canada regulations?


Joseph Enoil Michaud: The report recommended that another committee of the house be chosen to study these two subjects.


Howard Charles Green: You have in mind a committee to deal with naturalization and deportation alone?


Joseph Enoil Michaud: Yes, a separate committee.


Mr. M. J. COLD WELL (Rosetown-Biggar):: Mr. Speaker, the report which has just been presented by the chairman of the special committee on the defence of Canada regulations is the result of a careful and prolonged inquiry extending virtually over two sessions, because many of the members of the committee this year were members of the committee which sat in the previous session. During that time the committee held some fifty meetings, besides numerous sittings of its subcommittee; and incidentally I was a member of both the main committee and the subcommittee.
It appears to me that differences of opinion regarding the regulations and their administration are due to fundamental differences in approach. Some take the view that the regulations and final decisions should be administrative matters. Whilst the majority in both years took that view, a minority was of the opinion that the procedure should more nearly approximate a judicial procedure, and that at least the final decisions ought not to be left to the minister and his advisers. Because what I may call the administrative view prevailed, to that extent I was not able to approve the report.
But the main recommendations in the report do meet with my approval, and if carried out I believe they will do much to remove important objections to the present

Defence of Canada Regulations
procedure. I strongly urge upon the government the adoption of the recommendation affecting regulations 21 and 22.
Since regulation 21 as it originally stood is a serious departure from the normal course of court procedure and traditional British justice, every effort should be made to minimize the dangers to justice inherent in the regulation. This becomes I think more important and necessary since the passage of orders in council such as the one which was announced last Friday, P.C. 4061, bringing the coal mining industry under the regulations.


Richard Burpee Hanson: What
section 'brings them under the regulations?


Thomas Miller Bell: Order in council 4061 brings the coal mining industry under the defence of Canada regulation section 2 (d) by declaring it to be an essential service. It seems to me that an order in council affecting an industry in which organization is going on and has in some respects been established might have been considered in the house when we were discussing labour questions, as we were last week, and should not have been brought before the public simply by order in council. The use of the regulations against men engaged in the organization of even illegal strikes will in my opinion play directly into the hands of some whose real purpose may be to cause internal strife.
I regret that the committee could not adopt the proposal for an inquiry by a committee of three persons before a detention order was actually made. I should say in fairness, however, that evidence furnished to the committee showed that with proper safeguards the powers of preventive detention conferred upon the government under section 21 are necessary for the safety of the state. But unfortunately cases have arisen which indicate that in some instances the powers may not have been wisely used. The detention of Doctor Levine of Toronto, for example, after he had served his gaol sentence, and the arrest of Jaimes A. Murphy whilst engaged in negotiations with the Canadian Broadcasting Corporation on behalf of a group of its employees, have given rise to suspicion and uneasiness, and at least these two cases should be referred at the earliest possible day, for immediate investigation, to the committee which is recommended under the new section 22. If this is done under the proposed new section, appeals will [DOT]be heard under conditions which will in my opinion ensure a fairer hearing than has hitherto been possible under the practice which has prevailed. Consequently I am strongly in favour of the immediate adoption of regulation 22 as recommended by the committee. Advisory committees of three
persons presided over by a judge, provided that they are sufficiently numerous to deal promptly with objections, are in line with suggestions that we have made in the House of Commons and which have been urged by many organizations all across the country.
The new regulations, it will be noted, also require the chairman of the committee to furnish the accused with as full particulars of the charge as circumstances permit, and further obligate the committee at the hearing to supplement the particulars by giving all such further information as the committee shall deem necessary and advisable. This, it seems to me, is an important step in advance of the regulations as they have stood up to the present time. The accused, as the chairman indicated, may be represented by counsel; the hearing may be adjourned to give further opportunity of the production of evidence, and the minister is obliged to give the committee all information available about the person which it is in the public interest to disclose. I do not like that proviso, for it seems to me that a committee of the type contemplated ought to be as carefully chosen and as trustworthy as the civil servants who have access to all the information and who advise the minister regarding these cases. I do not think that judges and other persons who have the confidence of the minister to a sufficient extent to be appointed to these committees, should be denied any information that may assist them in obtaining a comprehensive and accurate view of the case.
Section 22 is also improved by suggesting that when the minister refers the committee's recommendation to the commissioner of the mounted police he shall submit within a period of fifteen days any further material he desires to submit. I think this should do much to obviate the danger of delay in final decisions, which delays, of course, have been a cause of dissatisfaction and suspicion.
The committee, I am glad to say, also recommended improvements in the procedure under regulation 39, dealing with organizations, publications, and so forth, banned under the regulations by order in council. I wish the words "or likely" to do something were eliminated from the regulations where they appear. In my opinion the interpretation placed upon them in some cases, particularly in the early part of the war, caused suffering and hardship and gave rise to suspicion of the regulations and their purpose generally. Apart from that, the recommendation that publishers of banned publications be given a right of appeal to a committee consisting of a person who has held or holds high judicial office will tend to a better administration of that regulation.
Defence of Canada Regulations

I strongly urge the adoption by the government of section 7 and 8 of the report. It has seemed to me that regulations regarding the writing of letters to their families and receiving visits from them ought not to be the same for interned British subjects as for prisoners of war. Under proper supervision, there should be no difficulty in liberalizing present internment regulations for Canadian citizens.
I am glad in somewhat the same connection to support whole-heartedly the recommendation which was made, and adopted by the house, to remove citizens of Czechoslovakia from the category of enemy aliens. I think that that was a matter of justice which was somewhat delayed.
While, for reasons which I think I have indicated, I did not support the adoption of the report when it was before the committee, I believe that its adoption by the house is a step in the right direction, as a return to more democratic procedure; and I hope that next session a committee will recommend still further modifications towards the restoration of the rule of law. In any event the present report indicates a desire to maintain more of our elementary democratic rights than has been evidenced since the outbreak of war. Tn common with others of the democratic, faith, I believe that we must be vigilant to see that reactionary forces do not succeed in destroying democracy at home whilst we are engaged in a struggle for democracy abroad; and every step towards the suppression of legitimate labour organizations, of the publication of proper comment on the activities of the government, and so on, plays into the hands of those who have the same general fundamental point of view as Hitler and those who support him.
Nor, may I say, on the other hand, must we allow our vigilance for British freedom to be imposed upon and used by subversive elements who pay lip-service to democracy in order to destroy the very basis of freedom in this country. We must guard against the would-be Hitlers and the would-be Stalins in our midst, for in regard to democracy and freedom, their objective is the same-its destruction. The unholy alliance between the forces of nazism and communism must be recognized and opposed. A United States writer coined a neat and, it seems to me, an appropriate name for their activities, which he described as communazism. In that regard, I might add, the economic agreements between Hitler and Stalin make Russia the economic ally of nazi Germany. Thus, Russia now has a stake in a German victory, a fact clearly emphasized by Russia's non-aggression

pact with a ruthless Japanese imperialism murderously invading China and threatening freedom in the far east.
In this country, communists and their sympathizers whisper that the masses of our people would be no worse off under Hitler; and that, of course, is dangerously false and subversive propaganda. Actually, people who believe in political and economic democracy have a tremendous stake in the outcome of this war; for upon it depend our economic progress .and our freedom. Wherever Hitler has gone, people's cooperatives, trades unionism, religious freedom, and all the freedoms have disappeared. Conditions were and are bad in our democratic countries, but they are infinitely better than those in Germany and German-controlled territories, and I hope that our people who are being subjected to the type of propaganda I have just mentioned will bear constantly that fact in mind. Here, men and women of diverse views may organize and agitate to achieve their objectives, but in the communazi totalitarian countries those who oppose the dictators are slaughtered, or imprisoned without any trial or appeal, or are forced to flee for refuge to the democratic countries. The fate of social democrats, trade union leaders, and leaders in the cooperative movement in the countries overrun by Hitler bears tragic witness to this. The very fact that in this house we can discuss, criticize, and try to amend-yes, and succeed in amending-the defence of Canada regulations gives the lie to the communazi propaganda in favour of a peace which would be a Hitler victory.
To say, as some are doing, that this is another imperialist war fought for economic and financial reasons, just another attempt to fasten the Chains of international finance upon the world which ought to be opposed, is of course also a propaganda to undermine our determination to see this thing through. If that were so, we in this group, at least, would be opposing this war as vigorously as we criticized preparations for such a war when powerful interests in our own commonwealth were building up Hitler and Mussolini and seeking an understanding with them.


Richard Burpee Hanson: What
interests?


Thomas Miller Bell: What interests?


Richard Burpee Hanson: What
interests in this commonwealth?


Thomas Miller Bell: I would say that Mr. Chamberlain and M. Daladier, representing certain economic and social interests in Great Britain and in France, endeavoured at all

Dejence oj Canada Regulations
times, in the years prior to the war and right up to Munich, to come to an arrangement with Hitler. We need-


Richard Burpee Hanson: That is quite a different proposition. It is a very strong statement the hon. gentleman has made, that we were building up Hitlerism.


Thomas Miller Bell: I would say that those who were endeavouring to come to some arrangement with Hitler, were lending money to Hitler and were trying to promote an agreement with him, certainly were building up Hitler and Hitlerism throughout the world.


Joseph-Arthur Bradette: Hoping for peace.


Mr. DUPUIS:: Because Hitler said that he wanted to fight Russia.


Thomas Miller Bell: The hon. member says, "because Hitler said he wanted to fight Russia." That, I think, is perfectly true. But now what do we find? We find that Hitler and Russia are in alliance and in agreement, and we face totalitarian powers both of whom would destroy our democratic institutions if ever they got the opportunity. That is what I meant when I said there were interests which were building up Hitler. May I say to the leader of the opposition that, but for the storm of protest that Munich caused, largely led by the labour and social democratic leaders in Great Britain and France, a firm stand would not have been taken later on against Germany and we might have been in a more serious situation than we are now. As to this present war being a war promoted for economic and imperialistic interests in the economic sense of the word "imperialistic", I would say that this is the first time in British history at least that the people of Britain forced a large portion of their government to take a stand in opposition to the interests which they, some members of the government themselves,, favoured.
Mr. MACDONALD,(Kingston City): What about the last great war?


Thomas Miller Bell: I am not going into
that, but anybody who knows the history of the last war, and particularly Mr. Lloyd George's own statements both prior to and after the war, knows well that the underlying causes of that war were not the same as the underlying causes of this war. And that, may I tell the Minister of National Defence for Naval Affairs (Mr. Macdonald), is the reason why there are many thousands of people, almost millions of people, some of whom are now in the British government and in other governments of our commonwealth, who are supporting this war but who in the last war spent at least a portion of the war period in
concentration camps. They recognized the fundamental difference between the causes of the great war and the causes of the present war. The vote last week of the British Labour party clearly indicates that, when 99 per cent of the membership of that great organization stood behind the war, whereas regarding the first great war that party was seriously split, split almost down the middle, as history clearly shows.


Mr. MACDONALD (Kingston City):: May I ask my hon. friend-	.


Mr. SPEAKER:: Order. May. I point
out to the hon. member that we are dealing with the defence of Canada regulations. I do not think the house would be justified in entering now into a debate on the causes of the last war or this war.


Thomas Miller Bell: I am sorry I transgressed the rules of the house, but I was invited to do so by certain questions that were asked.


Richard Burpee Hanson: The
questions were provoked by deliberate statements of the hon. gentleman, with which at least I am not in accord.


Thomas Miller Bell: The leader of the
opposition is quite entitled to differ from any statements which I made. I am not expecting that he will be in accord with them.
In my opinion a great deal of educational work should be undertaken by the government and by members of this house in order to meet various sorts of propaganda that are now being carried on to undermine our war effort If this were done instead of having to use regulations of the type that we are now discussing I believe we should find that the people; understanding what this war is about and the motives of many of those

not all-who are opposing our war effort, would realize that their activities are not in the interests of Canada.
In this connection I would say that nothing would do more to increase courage and unity in this nation than a declaration by this parliament that when the war is over the country will use every power it possesses to see that every Canadian receives a square deal and has opportunity for a decent living. That would do more than the regulations which we are now discussing to unify this nation and to suppress subversive activities. Unless we do that, in spite of these regulations we shall find that discontent may grow and spread across our country. I know perfectly well that the communnazi organization of which I spoke is busy among our farmers in the west endeavouring to organize

Defence of Canada Regulations
meetings with seemingly innocent names and innocent people in order that later they may control and dominate them and use them for their own purposes. The same thing applies in the ranks of labour.


Richard Burpee Hanson: If the hon. member will allow me a question; if as he says he has knowledge of these activities, has he communicated that knowledge to the proper authorities in Canada?


Thomas Miller Bell: The proper authorities know what is going on, although it is not-


Richard Burpee Hanson: That is not the point of my question. Has the hon. member communicated that knowledge to them?


Thomas Miller Bell: It is not my function as a member of parliament to act as a special agent for the government. But where I have direct knowledge of sabotage or anything of the kind I shall deem it my duty to inform the government.
The stirring up of discontent at this time could not be successful unless conditions were present which make for its success. So that in carrying out these regulations the government should endeavour to distinguish at all times between legitimate discontent with regard to bad conditions and the promotion of discontent for ulterior motives. That is why we have always contended that there should be a complete and fair hearing for every person accused under the defence of Canada regulations. Since the report of the committee does go some way towards giving a fair hearing and a proper trial, that recommendation in the committee's report is to be welcomed. We must during this war vindicate and glorify our democratic institutions; anything which tends to undermine the confidence in our democratic institutions is subversive, whether that undermining is done consciously or unconsciously, by those in power or by those who are suffering under depressed conditions.
The work of the committee was worth while. We had different points of view represented, but I think at all times every member of the committee gave the opposing point of view full and sympathetic consideration. I was glad to be a member of such a committee. While there were differences in our approach to the problem, which of course coloured the report-for a report must always be a majority decision-yet I am thoroughly convinced that if the main recommendations now made are put into effect something will be done to liberalize the administration of the defence of Canada regulations.
[Mr. Coldwell.3


Mr. A. H. BENCE (Saskatoon City):: Mr.. Speaker, as a member of this committee I should like to say a few words in connection with the report, but first I want to express my appreciation of the fact that as one of the newer members of this house I was permitted to take part in the deliberations of a committee dealing with such an important matter as the liberty of the subject. I think I can safely say that all members of the committee approached this matter with one paramount consideration in mind, namely, that the safety of the state must come first, and that the ordinary processes of criminal law, whereby a man is deemed to be innocent until proved guilty beyond any reasonable doubt in the mind of the tribunal sitting on his case, must at least for the duration of the war in connection with these cases go by the board. We are dealing with a ruthless enemy. We cannot afford to take chances, and if there is any reasonable doubt as to the loyalty of an individual, it is up to him to dispel that doubt or be subject to imprisonment or at least close observation.
The safety of the state is the first consideration; yet we must not lose sight of the fact that we are tampering with the long-cherished and dearly-won rights and liberties of the subject, and with due regard to the safety of the state we must jealously and carefully guard those rights and liberties. The rights and liberties of the subject as we understand them in a properly constituted democracy must not be limited any more than is actually and militarily necessitated by the circumstances. Certain circumstances require drastic action; but when we do interfere with these democratic rights and liberties we must not do so lightly, and, as I say, we must curtail them only to the extent actually necessary for the safety of the state. I am fearful-and of course I am expressing my individual opinion only-lest we allow these rights and liberties to be taken away from us without proper thought and without a proper realization of what we are giving up; lest we should accept too readily statements that certain regulations are required for the safety of the state without carefully examining the underlying reasons for those assertions. I suggest that we must guard against any glossing over of the possibility of injustice with the thought that, after all, these regulations are only for the duration of the war; for I suggest that we in this house must realize that it is up to us to decide what is necessary and appropriate at this time. We cannot absolve ourselves of the responsibility that is ours when we introduce regulations such as these; we must accept that responsibility and realize that if any injustices result from the regulations we as

Defence of Canada Regulations
members of the House of Commons are responsible for such injustices because we are the ones who are interfering with the rights and liberties of the subject.
In examining the effects of the regulations I sincerely suggest that each member of the house try to put himself in the position of one against whom an order has been made under the provisions of section 21, and consider the position he would be in and whether he would then believe that he had a reasonable chance of obtaining justice. In our consideration of this matter we may be inclined to be too easily influenced by the thought, "Oh, it cannot happen to us." That, Mr. Speaker, may have been just the thought that passed through the minds of some of those who are to-day in internment camps. I am not suggesting for a moment that we have not a fair-minded man in the person of the Minister of Justice (Mr. Lapointe). I believe he is eminently fair-minded. I am not suggesting for a moment that he has not fair-minded men as his advisers; but he might not always have them, and it is dangerous to adopt the principle that even though some of our laws do not protect the individual as completely as they might, we can depend upon the fair-mindedness of those in charge of the administration of those laws. I suggest to you, sir, that this is a dangerous principle to adopt because we must guard against even the ultraloyal and over-zealous official, and against the possibility of a narrow-minded one. I am sorry to say that I believe there are persons in this country to-day who cannot help feeling that anyone who advocates a change in the status quo is a dangerous radical, and we must guard against the possibility of putting too much power into the hands of such individuals. I say, too, that we must be very careful to avoid the possibility of the public having ground for thinking that there is an avenue open for the introduction of political persuasion or influence. In a nutshell what I am trying to say is that we must, if we possibly can, avoid regulations which reveal bureaucratic or undemocratic tendencies.
Your committee spent a great deal of time considering these regulations; so much so, as was pointed out by the Minister of Fisheries (Mr. Michaud) whom we were privileged to have as chairman of the committee, that we were unable to pay very much attention to the questions of naturalization and deportation. Consequently it has been recommended that a special committee be authorized at the next session of parliament to deal with these subjects.
As to the details of the recommendations, I think I can say that there was fairly general agreement; but so far as the principles involved are concerned I for one could not
agree to the retention of certain provisions of the regulations as they previously stood, and which, since they are not excluded by the amendments, are still there. I cannot concur in the policy of continuing to have the final and complete responsibility in the hands of the Minister of Justice and his advisers. Under the regulations as amended the internee is given the right to object to his internment. There is a certain time limit within which he must make his objection, and then he is given certain of the facts for the purpose of allowing him to prepare his case. Under the amendment these facts may be amplified at the hearing before the advisory committee, which is a tribunal of three under the amended regulations. The regulations provide certain other safeguards and procedure in connection with such hearings, which I need not discuss at the moment, but the suggested amendments contain a very significant provision, which I submit is fundamental, and which is contained in paragraph 10 of regulation 22, as amended by paragraph 2 of the report, which reads:
The Minister of Justice shall cause to be put before the committee all the information about such person available to the minister except such as is not in the public interest to disclose.
In other words, this committee of three is not to have all the evidence available against an internee and, consequently what is likely to happen is this. The evidence will be passed upon by the committee. The committee will decide that there is not sufficient to have the man kept in an internment camp, and will recommend accordingly. The matter is then referred1 to the Minister of Justice through his advisers. Further evidence is furnished to him, and, as a result of that further evidence, he determines that the man should be kept incarcerated. To the bewilderment of those who do not know the man, despite the fact that the committee of three set up under the regulations has recommended his release, the minister, on information not available to that committee, determines that the person in question should be kept in an internment camp. I suggest therefore that even under these regulations as amended the committee has no responsibility.
I know it will be pointed out that in a recent report placed before the house the minister accepted all the recommendations of the committee. That is true. But it must be remembered that in a report tabled some time ago, out of twenty-five recommendations for release the minister refused to accept nine.
I suggest first of all that if the committee is going to deal with this matter in a responsible manner it is entitled to have all the evidence. It is a responsible committee and

Defence of Canada Regulations
could hear evidence in secret. There would be no necessity to have the internee present when evidence which might be prejudicial, if it leaked out, was made available. I do suggest however that unless the committee has the whole of the evidence, the set-up is useless, because we would have built up a structure which turned out to be a hollow shell. The tribunal is not yet to have all the evidence, consequently it cannot possibly give a decision in accordance with all the facts.
In addition to placing before the committee all the evidence available, I suggest it should have the final responsibility, at least in respect of cases concerning which the committee makes a unanimous finding. It may be that where there is not unanimous opinion in the committee, and consequently a doubt, final decision should be made by the minister. I suggest however, always having in mind the thought that the committee would receive all the evidence, that in cases in which the committee is unanimous in respect of a man's release, its recommendation should be taken as mandatory.
In connection with the original internment under section 21, I suggest that more formal procedure should be adopted. There should be a committee of three, such as has been suggested this morning, which would examine the evidence and advise the minister before an order is actually made. We must realize that once a man has been interned under the provisions of section 21, despite his innocence and his subsequent release a stigma attaches to him which renders it very difficult for him to reestablish himself in civil life. I believe examples could be cited to substantiate the statement I make, namely, that a man has the greatest difficulty in reestablishing himself in civil life once he has spent any time at all in an internment camp. Many people, following such internment, are inclined to believe that if he served some time in such a camp, despite his subsequent release there must have been some good reason for his internment.
Generally speaking it may be true to say that we are following the procedure as laid down in England. We have often boasted of our own autonomy, and in this instance I suggest it is up to us to adopt our own procedure, and to do it on our own responsibility. It is not necessary for us blindly to accept the procedure as laid down in England, because the situation over there is entirely different. They are in the front line of battle. I believe it can be said with safety that the regulations in England to-day have engendered much unfavourable comment on the part of responsible persons. Injustices and inequities have arisen in great numbers, and I believe that

before long-this is my personal reaction from what I have read-we shall find that the whole principle upon which the regulations in Great Britain are founded will be changed.


Mr. E. G. HANSELL (Macleod):: Mr. Speaker, as a member of this year's committee on the defence of Canada regulations I should like to make one or two observations. May I say first that the work of the committee itself was an extreme pleasure. It was one of the most harmonious committees on which I have had the privilege of serving in the past few years. While there were some details concerning which lion, members differed, such differences were indicated in a happy spirit.
In passing may I pay tribute to the management of the committee under its worthy chairman, the Minister of Fisheries (Mr. Michaud). If in Canada there has been any criticism of the defence of Canada regulations, I believe it may be said that at least some of such criticism has been based upon a lack of understanding. Serving on that committee I learned many things I had not known before, and it occurred to me that if the people of Canada were permitted to learn some of the points which were brought to rny attention, it would be in the public interest. For instance, one of the criticisms levelled against the regulations is that there has been extreme delay between the picking up of a suspect and the taking of the examination. We had some reason to believe that at one time there was justification for that criticism. When the facts in that connection were known they set our minds at rest, at least'to some extent. The public should recognize that perhaps for the most part the delay was due to the fact that when war broke out, and when later Italy entered the war, it was only natural to expect a general rounding up of suspects, and that many would be taken into custody for fear that they might be a danger to the state. When several hundred men have to be examined, of necessity there must be some delay. But this condition should not arise at the present time. Hordes of suspects are not now being picked up; it is only the occasional one now and again. During the past year and a half since the war broke out the public have periodically become extremely concerned about this or that situation. I can remember when Germany began to invade the lowlands, when she invaded Norway, when fifth column activities were brought to our attention as they had never been before. The natural impression the public got was that the same thing might happen here, and it might in some degree; but I do not think everyone with a foreign name should have

Defence of Canada Regulations
been suspected. The result was almost tantamount to public hysteria. Complaints were made to the police, and I think the evidence will show that instead of having too many suspects, their biggest job was to weed out the complaints for which there was no foundation.
One particular case was brought to my attention. A young clergyman came from the United States to take over a charge in this country. He was of Dutch origin, some few generations back, and spelled his name with a "van". Because that was pronounced "von" and he happened to have a motion picture camera with him, the whole community became startled. This particular town happened to contain a number of grain elevators. The young clergyman had never seen such huge storage elevators before. He took some pictures, and it was soon noised around that he was carrying on fifth-column activities. Considerable damage was done to the reputation of the man, to the community and to the work he was carrying on.
The public should realize that it has some responsibility in this regard. It is all right for the leader of the opposition (Mr. Hanson) to say, as he said a few moments ago to the hon. member for Rosetown-Biggar (Mr. Coldwell), that the authorities should be informed. I admit that if anyone is in possession of information he should inform the authorities, but I do not think people should run off to the police simply because they are suspicious. That is not the right spirit to have in a country. Instead of people being calmed, the tendency is to rouse them and that is not good.
We are taught from childhood that one of the axioms of British justice is that a man shall be deemed to be innocent until he has been proven guilty. I believe that is still the rule in the administration of our criminal law. It would be well for the public to realize that the picture changes a little bit when a nation finds itself in a state of war, and espionage or fifth-column activities are likely to be extant in the country. At such times men are picked up not necessarily because they are guilty of this or that, but because they are regarded as being dangerous to the state. The order becomes reversed; the procedure is not carried on through the ordinary judicial channels. The hearing which is held is not necessarily a trial; it is more in the nature of an examination-not to prove that a man did this or that or said this or that, but to satisfy the authorities that he is a safe man to be at large, that he is not a danger to the state. If he is regarded as a danger to the state,
of necessity he must be confined. I think it would be well for the people of this country to recognize this.
Last year when I was speaking on this matter I said that it might be possible for those who are administering the defence of Canada regulations to make psychological mistakes. As someone has said, we are fighting a psychological war, and this principle enters into the administration of the defence of Canada regulations in a time of war. There is a very strong psychological principle of which the government must be aware. Personally I deplore the emphasis being placed upon the picking up of a suspect on some flimsy piece of would-be evidence while perhaps there are things taking place in the country which are far more dangerous to public thinking. I am not so sure that we did the right thing in outlawing Jehovah's Witnesses. I am not so sure that we did the right thing in outlawing Technocracy. I am not expressing my deliberate opinion, but I am saying that I am not so certain that these two organizations are a tremendous danger to the stafe. At lease the authorities should be very careful how they administer the defence of Canada regulations in respect to those two organizations. Perhaps I do not know all that I should know about them, but what I have in mind is this, that there are things happening in Canada, and, I would go so far as to include perhaps certain policies which the government itself holds, which psychologically are a greater danger to public thinking than the distribution of perhaps some more or less harmless literature by these two organizations or even by others.
Perhaps one may wonder what I have in .mind. Of course I know that the government has the answers to all these criticisms, but whether the answers are satisfactory to other members of the house or satisfactory to the public	of	Canada; I	do	not	know. Forinstance, we had brought up in the house the other	day	the matter	of	the	shipment ofwheat	in	sacks from	Canada	in Japanesebottoms, the destination of which was supposed	to	be stomewhere	in China. The
government may have its answer to that, but J am saying this, that whatever answer it gives I do not believe it has satisfied the .people of Canada, If there is anything we desire to maintain in all of Canada it is complete unity and complete loyalty. Here we are carrying on a recruiting campaign and ,a campaign to raise the victory loan, and this thing coming into the picture right now is causing dissension.
You may say, what has this to do with the defence of Canada regulations. I answer just this. An individual may be picked up somewhere in Canada for distributing a pamphlet.

Defence of Canada Regulations
The whole community becomes aroused. Yet on that very same day they read in the press a report to the effect that Canadian wheat is perhaps being shipped to the axis powers. That is extremely bad. While I am on this point may I suggest that there are others besides members of parliament, and those [DOT] who are administering the defence of Canada regulations who have a responsibility in the matter of the unity of Canada and the loyalty of its people.
Here is the front page of one of Canada's leading daily papers.


Mr. JOHNSTON (Bow River):: What
paper is it?


Ernest George Hansell: The Calgary Herald.


Charles Edward Johnston: Did you
say leading paper? Leading what?


Ernest George Hansell: When I said "leading," I
had in mind one of our largest and most widely circulated papers. On the front page in very large headlines spread across two columns-I do not know what point type it is, but you could read it about a mile away-


Vincent Dupuis: What is the date?


Ernest George Hansell: Thursday, June 5, and
this article is captioned in big letters, "Alberta Grain For Nazis?" There is a question mark after the headline. It is really a question that is asked, but people read the headline without seeing the question mark. The intent behind a heading of that kind is very obvious to some of us, that the paper is attempting to brand the Alberta government as pro-nazi.


Richard Burpee Hanson: What
paper is that?


Ernest George Hansell: The Calgary Daily Herald. I do not know whether it was Alberta grain or not. What difference does it make where the grain was grown?


Charles Edward Johnston: Who is
responsible for the shipment?


Ernest George Hansell: That is the point. The
article goes on to tell the story, but we all know that people do not read all the details in an article. This government is responsible for shipments that go out of Canada, and when we see things like that happening while the authorities may be fiddling around-perhaps I should not use that term-while the authorities may be picking up a bit of a suspect here because he was heard to say something over there, I say that sort of thing is not good for Canada. That is what I mean when I say we are in danger of making great psychological blunders in connection with this whole matter.


Charles Edward Johnston: What will the Minister of Justice do about it?


Ernest George Hansell: I do not know what he .
can do about it.


Charles Edward Johnston: I know
what he should do.


Ernest George Hansell: I am arguing that that
sort of thing is not something that happens just once a year. It is the sort of thing that goes on all the time in certain parts of this country, and it is the sort of thing that causes disunity. It is the sort of thing that retards proper patriotism. It is the sort of thing that causes people to question their loyalty to Canada, people who want to be loyal. It is the sort of thing that plants seeds of doubt in their minds.
As the hon. member for Acadia remarks, it raises in the minds of the people a question as to the sincerity of the government in its war effort. That must be recognized, although I personally do not question its sincerity. In view of the state the country was in when the war broke out, and of what has had to be done on short order, I am not going to suggest that any other government could have done better. If any blame is to be attributed to our lack of preparation it will have to be focused upon the statesmanship of this country during the past fifteen or twenty years. It is there that the trouble lies, not necessarily in the present set-up. I shall have more to say upon that topic, which is not relevant to the defence of Canada regulations, upon some other occasion.
I was dealing with the psychological effect of these regulations as regards our war effort.
I do not suppose that at present we are shipping scrap metal to Japan; I could not prove either that we are or that we are not. But certainly we were doing so not very long ago. Now we are going out in pursuance of our salvage campaign and asking people to contribute their scrap metal. Certain farmers who have a good deal of scrap metal have commented to me along this line: "It is all very well to ask for scrap metal now, but it is a known fact that hundreds of thousands of tons were shipped to the axis powers or to Japan prior to the war, and perhaps since the war." Such things have a tremendous effect on public opinion. If we are to achieve a total war effort in this country, it will pay the government and other hon. members to be very careful, even in the minutest detail, of the way in which we carry it on, and of the effect of the defence of Canada regulations upon the mind of the people and their relation to our entire war effort.

Defence of Canada Regulations
Personally I am in favour of the adoption of this report. The recommendations contained therein are an improvement upon what we had before. I believe that the Minister of Justice has been unduly blamed for a number of things which, even though he may be responsible for them, must be viewed in the light of the fact that he is in a position which has been imposed upon him, and it is not altogether a happy one. In my opinion he has done his work exceptionally well. I can take no other attitude, not because of any compulsion upon me, but because it is my conviction that he desires to act fairly in the administration of the regulations for which he is responsible.
May I specifically call attention to the recommendation for the continuance of the work of this committee or of a similar body during the next session, and for a further and more detailed investigation with regard to naturalization, and regulations relating to the deportation of those who have come under the odium of the defence of Canada regulations.
At one o'clock the house took recess.
The house resumed at three o'clock.


Mr. BROOKE CLAXTON (St. Lawrence-St. George):: Previous speakers in this debate have all emphasized the importance of this matter, and, in my submission, quite properly so, because it concerns two subjects of the utmost importance to all of us at this time, namely, the safety of the state, and the liberty of the subject. Wrapped up in those two subjects is the whole reason why we are fighting this war, and in their relation lies the difference between ourselves and the system for which we are fighting, and the system of nazi Germany.
The subject is important for another reason. It is not only necessary that laws should be just; it is equally necessary that they should be recognized as just. Owing partly to the fact that this subject has not been discussed very much in parliament there has grown up a considerable amount of misunderstanding and misapprehension about the defence of Canada regulations and the way in which they operate. The best way to clear up that misapprehension and convey understanding and confidence is by debate in this house. It is interesting to note that in the British house, despite their natural preoccupation with the war, this subject is probably more fully discussed than any other single subject outside the conduct of
the war itself, and that in Britain parliamentary concurrence is required in every change made in the regulations.
The defence of Canada regulations are designed to promote the safety of Canada. We are in a war for survival, and it is impossible to overestimate or exaggerate the great seriousness of the situation in which we and our allies find ourselves. We know that the enemy has used every means in every country to accomplish his fell designs. We have seen the long roll of countries that have been pulled down to slavery by ruthless aggression and propaganda and fifth-column activities- Austria, Memel, Danzig, Poland, Norway, Denmark, Holland, Belgium, France, Roumania, Bulgaria, Hungary, Yugoslavia, Greece. We have seen what happened there, and we do not intend that it shall happen here.
The defence of Canada regulations are as much designed to defend us in what we are doing in this country as are the munitions of war with which we arm our troops. They are a fighting weapon, and for that purpose they are being used. Unless Canada is kept free, the freedom of Canadians is not worth anything.
I intend to deal principally with regulations 21 and 22. Regulation 21 provides that the Minister of Justice, if satisfied that with a view to preventing any particular person from acting in any manner prejudicial to the public safety or the safety of the state it is necessary so to do, may issue an order for his detention. The words "acting in any manner prejudicial to the public safety or the safety of the state" are abstract, but if we substitute for them "the safety of Canada," the place in which we live, the place we love, then the people of Canada would recognize more the purpose and need of the regulations.
Detention is not ordered by reason of the commission of any offence. It is not a criminal proceeding; it is purely precautionary and preventive. The purpose of the regulation is to render harmless any person who might reasonably be suspected of plotting to cause harm to the state. Some critics of the regulations suggest that we should "be tough," that we should lock them all up. But who is to tell who "they" are that we should lock up? That is the purpose of the regulations and of the procedure.	_
Other critics of the regulations say that the procedure should be judicial, that the whole thing should be assimilated to a trial before a court. But the great mass of the people, and surely all hon. members, recognize that the prime purpose of the regulation is to protect the safety of the state, the safety of Canada,

Defence of Canada Regulations
the defence of Canada; and it is of paramount importance that that purpose should come first in all our considerations.
Second, it is the responsibility of the government of Canada to take all means that may be necessary to secure the safety of the state. That responsibility rests squarely on the shoulders of the government, and the government cannot divest itself of this responsibility by turning it over to any court. No Minister of Justice would feel obliged to follow the recommendations of anyone else. The responsibility falls upon the government; the government must have power to discharge the responsibility, and that of necessity involves that the final discretion as to who should be detained must rest with the Minister of Justice. I suppose everyone here recognizes that no one would b more pleased than the Minister of Justice himself to be relieved of that responsibility-


Mr. LAPOINTE (Quebec East):: Hear, hear.


Brooke Claxton: -but I do not think he will willingly acquiesce in being relieved, and I do not think this house or this country would wish to see him relieved of it.
In the third place, in the very nature of things this procedure cannot be judicial. It is not concerned with a judicial operation. It is concerned w'ith taking such steps as may be necessary, and taking them just as fast as may be necessary, to see that no harm is done to the state, to Canada, through a person being allowed to remain at liberty.


Richard Burpee Hanson: If the hon. member will allow a question, does he not think that the matter of a review by the minister is. the exercise of a judicial function and not a ministerial function?


Brooke Claxton: Of necessity it must be administrative, but he will naturally exercise that function with discretion and in as judicial a manner as he possibly can.
I submit that the procedure cannot be completely judicial. Also that by reason of the very character of the whole operation and the purpose of the regulations there are some matters that cannot be disclosed to any court or to any body. The identity of informers, the sources of information must be kept back by the minister and his officers when they feel that it would not be in the public interest to disclose such sources of information, because once the source is disclosed it is no longer available for the purposes for which it might be used.
I submit, therefore, Mr. Speaker, that there are three principles to which we should subscribe. First comes the paramount consideration of the safety and defence of Canada.
[Mr. Claxton.J
Then comes the responsibility of the government, and third, the fact that of necessity the matter cannot be dealt with in a completely judicial manner.
These things having been said, we come to a matter of the utmost importance; that is, that we should do everything in our power to secure to every individual his liberty and to see to it that no man is detained longer than is absolutely necessary to achieve the primary purpose I have mentioned. That is so for a very important reason. This is not only a war for the survival of nations; it is a war for the survival of ideas and ideals. How we are to fight the war depends on morale as much as anything else, and morale to a great extent is wrapped up with this question of individual liberty, with our fighting as free men and not as slaves. Dorothy Thompson put this magnificently in commenting on the president's speech last month, when she said:
And then he sat down with us and said, it seemed, "I know you want to know how things are-well, they are like this."
And .listening, we knew they are like this. Just exactly like this. When he stopped speaking, we -were quiet, and then suddenly we felt happy.-happy and free.
That is the function of free speech. To make people more free. To take shackles off their minds and off their wills; to bring light into their intelligences, understanding into their hearts, and to put marrow into their bones.
In those words she put the case for freedom, and it works. Freedom is the most important thing in the world, the breath of life, the source of all security, the means of all progress. To assert that liberty is dead is the same thing as saying that life itself is dead. So much is this so that every person speaking of our war and what we are fighting for says we are fighting for freedom. The words have been repeated over and over again, until somehow they are beginning to lose their force with some of us and are coming to be just words. It is important that we should put the words into acts, that we should act them as we go along and show that we believe freedom is important by pursuing freedom as a way of life to-day, as well as a goal of war and the fruit of victory. We must convince our workers that our interest in democracy begins at home.
Then, too, we must differentiate just as much as possible between ourselves and the enemy we are fighting. We can beat them with more democracy, not less; with more freedom and not more naziness. When we say "he should be shut up"; when we raise a race cry of any kind; when we speak about leadership as though it is some divine principle, then we are playing Hitler's game, we are showing that we also are a little hitlerized.

Defence of Canada Regulations
We have to make our democracy fight for us, and we have to fight with it as we go along. This is important in Canada by reason of our alien population, with some 800,000 people of German descent and 140,000 of Italian descent. It is of the utmost importance that we should show these people, the vast majority of whom are completely loyal, that they were right in leaving the old land and coming to this country; that they were right in staking their future here; that this is the place where they can be free to work out their lives in cooperation with us and have the protection of our laws.
Then we must observe free ways because of the effect on neutral countries. Sometimes in the United States we see some of the enemies of our cause, as well as others who sincerely believe in isolation, stoutly maintaining that if the United States goes to war she loses her freedom. We in Canada have shown that this is not so, and we should continue to show it.
There is the effect of our freedom on the enemy himself. Every time we bring about any curtailment of individual liberty Hitler uses that fact in his propaganda machine. Ultimately the break-down of the enemy will be brought about by the recognition by his people that in ours they can find a very much better way of life than in any nazi system.
A further point is that repression and suppression create fear and lack of confidence. We should not repress our friends; we should suppress Hitler. There is also the question of the possible misuse of arbitrary power. I think everyone is agreed, as all the representations made to our committee agreed, that we have no reason to fear this under the present Minister of Justice. They seemed to suggest that under some other minister, who might be one of the bon. gentlemen sitting opposite, there might be some such cause for fear, but there is always the possibility of abuse in any restrictions on liberty; and the 'best safeguard against such abuse is liberty itself and the freedom to criticize and speak one's own mind.
Throughout the war we have done everything in our power to keep our money worth exactly what it was when we went into the war. By avoiding inflation We have done our utmost to preserve material values. We should also do our utmost to preserve spiritual values, because they are what we are fighting for.
I, think that in considering the regulations and the representations that were made our committee was moved by consideration such as I have described to the house. That is, the committee had in mind the paramount necessity of safeguarding the security of Canada
and then of doing everything not inconsistent with that end to safeguard the liberty of the individual. And i't is fair to say that in our deliberations, as well as in the submissions made to us, there was shown a very wide feeling that, generally speaking, the regulations were being fairly administered, without very great hardship. It was shown that they were necessary, but that naturally everything possible should be done to safeguard the rights of the individual, once the security of the state had been obtained.
The representations regarding regulation 22 really came under five heads. First, it was suggested that if possible we should have some formal proceeding before the alien was interned. I confess I should have liked to see that done, had it been possible to work out something acceptable to the committee. I spent a great deal of time trying to draft something, and I am sure other hon. members did likewise, and we found that we could not do it. It is an exceedingly difficult problem. There is also this to be said, that if this proceeding were mandatory on the minister it might prevent his taking the action we would want him to take without delay. And if it is not mandatory, but rather discretionary, then it would add nothing to the present situation. In that connection I personally express the hope that the minister may find it possible to seek the advice of three persons appointed by himself in all cases when detention is recommended instead of just in respect of persons of enemy origin.
The second complaint was that the detained persons did not have sufficient particulars put before them to enable them to make their defence. We found that the particulars were often very brief, and it will be seen that in the suggested regulation 22, the adoption of which is recommended, there is provision for the fullest possible particulars not inconsistent with the public interest.
Third, complaints were made on grounds of delay. We found that there had been delays, but that they had arisen almost of necessity from the fact that last June and July large numbers of people of Italian origin were apprehended in a hurry. That had to be done, and some time was required in which to dispose of their cases. Provisions will be found in the suggested regulations which have for their purpose the cutting down of delays.
Fourth, it has been suggested by the hon. member for Saskatoon City (Mr. Bence) that all evidence available to the minister should be put before the committee. I believe it is the view of the majority of members that that is not possible in every case, and that it

Defence of Canada Regulations
is not in the public interest to disclose all the evidence or all the sources of information the minister may have.
Finally, it is suggested-and it was repeated a few minutes ago in the question of the leader of the opposition (Mr. Hanson)-that the minister should have to follow the advice of the advisory committee.


Richard Burpee Hanson: That is not what I said. I was asking the hon. member if he did not think that with respect to the review of decisions the minister's function was judicial and not purely ministerial. That was the point I was trying to make.


Brooke Claxton: I shall attempt to answer the leader of the opposition on that point. I would submit to him this case: The advisory committee brings in a report recommending release. The minister has available to him information from a secret source which he did not feel at liberty to put before the committee. He may then exercise his discretion, and, notwithstanding the recommendations, refuse to accept the advice of the advisory committee.


Richard Burpee Hanson: Then why
have an advisory committee at all?


Brooke Claxton: Because the advisory committee is of the utmost assistance in dealing with the vast majority of cases. The number of cases in which the minister has refused to follow the advice of the advisory committee is exceedingly small. I believe I am correct when I say that it is considerably under twenty since the outbreak of the war. And even in those cases I understand the minister keeps the facts dontinually under review. They come up again and again. The minister in these cases has exercised his discretion and has not ordered the immediate release of the aliens.
In the report submitted to the house a new regulation 22 has been suggested for adoption by the governor in council. It describes in much greater detail than before the suggested lines of procedure, a procedure which is much more liberal than that now followed in Great Britain. The procedure we had before was somewhat similar to that followed in Great Britain. That which we hope the government will introduce in consequence of this report is fairer, and provides ampler safeguards and a better chance to the detained person than the procedure we had before, or that followed in Great Britain.
I would draw to the attention of the house the fact that while criticizing the report in part, hon. members who have spoken previously have all agreed that it represents a [Mr. Claitoo-i
substantial improvement on the situation which existed before. I believe that is the view of every fair-minded person who reads the report. And it does not in any single particular reduce the safety of Canada. From that point of view it leaves the position exactly as it was. But it does add safeguards to the procedure which already exists.	>
In addition to the defence of Canada regulations we have the provisions of the criminal code and the Treachery Act. There is ample power in Canada to deal with subversive elements and subversive activities That is shown by the fact that since the beginning of the war, so far as I know, there has been no single act of sabotage in Canada traceable to enemy origin. That does not mean that we may not have such acts; it does not mean that we should become over-confident or complacent, but it does mean that we have taken the measures necessary to safeguard Canada during this time of war, and that they have been effective.
In addition to such measures, however, may I point out to the house that far more effective than any repressive means is the loyalty of the Canadian people, the morale of the Canadian people. All the persons who have been prosecuted for so-called beer-parlour offences under regulation 39 may have done less harm to recruiting in Canada than a single newspaper editorial. We cannot deal with newspaper editorials by regulation. No one would wish us to. But we can secure the cooperation of the editor and the Canadian people, through every possible means. We can strengthen our pride in Canada and its achievements. We can strengthen our sense of individual responsibility, and our confidence in our institutions. We can strengthen our belief in victory and should be able to hope that after victory we shall have a better world. What kind of world are we fighting for? We are not fighting for a world in which, after the war, we shall have another depression. This is found in "Canada Fights." We are fighting for-

a world in which a nation would not be called upon to go to war every fifteen or twenty years; a world in which wheat and other agricultural commodities, together with the product of forest and mine, could he sold at a price that would enable the producer to live in reasonable comfort and to educate his children; a world in which every adult able and willing to work would have employment, and in which our present liberties of thought, speech and religion would be maintained.
I suggest that those are war aims to which every party in this house, every hon. member in this house can subscribe. These, or similar aims, should be proclaimed throughout the land as the reason why we are fighting. We are not fighting just to keep the status quo, to

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retain our membership in good clubs, to keep our money; we are fighting a far more desperate struggle than that, and we are going to be able to put our utmost into it only if we have some such aim, only if we can show that we can plan a better world than Hitler, only if we can create a common goal of living and give life a new meaning. These are practical considerations to-day, the kind of thing that the Canadian people can be told again and again. The text for the telling might well be taken from I Corinthians, chapter 14, the eighth verse:
For if the trumpet give an uncertain sound, who shall prepare himself to the battle?
Every agency in Canada can strengthen our pride, our confidence, our belief, our faith and our fortitude to endure united until victory and peace are won. With this kind of feeling in the land there will not be much need for defence of Canada regulations.
To-day in Montreal we hear two different kinds of rumours about recruiting. These are being spread about to create racial feeling among the English and the French. People who hear these rumours should stop them because there is not a particle of truth in them. Every hon. member has heard rumours which are spread irresponsibly. We are having a black-out in Montreal to-night, and I suggest that we should have a black-out of rumours and a black-out of unfounded criticism for the next three or four weeks. We would then see what effect it would have upon the war loan, upon recruiting and upon the feelings of the whole country. I remember during the last war in France toward the middle of July, 1918, an order was issued calling upon the troops of the Canadian corps to stop repeating rumours which had been spreading like wildfire. That order was effective and the spirit of the troops changed within a week or two. We then moved down to Amiens and started the battle which ended the war. I suggest that the same kind of thing should be done to-day by the Canadian people.
We should remember that we are the democrats who are going to show that democracy is the best system, not Shakespeare, not Milton, not Burke, not Washington and not Lincoln, We are the ones who have to show that we can fight through to victory. This building is a monument which reminds us of other hard days through which we fought to victory:
Read how free men throughout this land kept faith in the hour of trial and in the day of battle, remembering the traditions they had been taught, counting life nothing without liberty.


Mr. H. B. McKINNON (Kenora-Rainy River):: Mr. Speaker, I had not intended taking part in this debate, but as I was one of the original members of the committee which was set up last year, and also of the subcommittee, I feel called upon to make a few observations. As the hon. member for St. Lawrence-St. George (Mr. Claxton) has said both last year and this year the members of the committee were highly pleased with the work of the committee. I thought that last year we had a perfect committee, but this year's committee was at least as good. Every member was seized of the importance and seriousness of the job he had to do. In this respect I must pay tribute to the Minister of Justice (Mr. Lapointe). He is doing a job which he d~>s not like any more than any of us liked the work we had to do on this committee. But no other course can be followed. We must have laws and the final say as to the administration of the laws and regulations and the security of our country must be with the Minister of Justice. I cannot think of any way in which the government can be relieved of its responsibility in connection with the security of the country.
Mention has been made of the fact that there has not been one act of sabotage in Canada which could be traced to enemy agents. I attribute that to the defence of Canada regulations and a very efficient Royal Canadian Mounted Police. The mounted police have done a job which would be a credit to any police force. This year the regulations have been liberalized to quite a considerable extent and with few exceptions the recommendations made by the committee have been unanimous. The differences which did exist were not very great.
I wish to pay a tribute to the previous speakers who I think have stated the case clearly and in a worthwhile manner. As I see it, the difficulty has been in deciding how far the rights of the individual should be restricted in order to protect the security of the state. By amending the regulations we have demonstrated to the Canadian people that we appreciated their point of view in the exceptions they took to certain of the regulations. In the main we have modified the provisions which they felt were obnoxious.
Comment has been made throughout the country about the interning of labour leaders. I for one am quite willing to take the word of the Minister of Justice that these men were interned not because they were labour leaders but because they were communists. I am positive that no labour leader need have the slightest fear about carrying on his legitimate

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duties; he need have no fear about any action which the Minister of Justice might take under the defence of Canada regulations.
The previous speakers have covered the ground thoroughly and I wish to pay tribute to them. If we should find from experience that these regulations should be further liberalized or tightened up, time and events will show and we shall have another opportunity next year to iron out any difficulties that we may have with them between now and then.


Mr. D. KING HAZEN (St. John-Albert):: Mr. Speaker, I was one of the members of the special committee that was appointed to consider and review the defence of Canada regulations. I voted in favour of the recommendations that were made by that committee. Its report speaks for itself, and as practically all, but not quite all, the members who have taken part in this debate have expressed themselves in favour of these recommendations, there is very little I wish to say at the present time.
While some changes have been recommended in the report, they do not materially alter the regulations now in force. Having listened to the evidence that was taken by the committee, and compared the regulations with the recommendations that have been made, I am of the opinion that all the recommendations are of a minor nature and that there has been no deviation from the principles which have been followed in the past. The recommendations, if adopted, may improve, but perhaps only to a very slight extent, the regulations as they stand at present. There will not be, and perhaps there is no need for, any substantial improvement. The recommendations will neither alter the underlying principles on which the regulations are based, nor weaken their effectiveness.
The most important recommendation has to do with regulation 22. The recommendation provides that when an internee objects to being interned his objection will be heard by a committee of three. This committee is to be appointed by the Minister of Justice (Mr. Lapointe) and is to consist of a judge and two other persons. The committee at the present time consists of one person, a judge of a high court. The advisory committee-and you will note that in the regulations it is called an advisory committee-has very limited powers. It has the right to take evidence and to hear the objections made by the person who is interned, and after taking this evidence it advises or makes a recommendation to the minister. It has no greater power than that. The minister does not have to accept its recommendation. The

minister may if he sees fit act on its recommendation, but if he does not see fit, the person may remain interned.
The important principle underlying this regulation is the principle, if I may express it crudely or roughly, of government responsibility. The government is responsible for the conduct of this war, and these regulations are a part, and not an unimportant part, of our war effort. Responsibility for the enforcement of these regulations must in my opinion rest with the government, just as much as carrying on the rest of our war effort is the government's responsibility. Under these regulations great power is placed in the hands of the Minister of Justice as a member of the government, and the final responsibility rests with the government.
It has been suggested that this power be taken out of the hands of the Minister of Justice and that a judicial tribunal be set up in place of the advisory committee. The judicial tribunal would consider objections raised by the internee, would hold a form of trial and take evidence, and its decision would be final-or rather some people have suggested that it should be final only if the decision of the judicial committee was unanimous, otherwise the final decision should rest with the Minister of Justice. But the responsibility for the administration of the regulations would be in this judicial committee, not in the government, and there would be no appeal from its decision.
In my opinion the responsibility for the enforcement and administration of these regulations must rest with the government. It is on that principle that this recommendation has been made to the house, a recommendation with which I concur.


Mr. DANIEL McIVOR (Fort William):: Mr. Speaker, just a brief word. I happen to be one of those who vigorously opposed retaining ini the criminal code section 98, and I would oppose it to-day, 'because it certainly denies the right of the individual to a fair trial. The defence of Canada regulations, amendments to which we are now considering, did n'ot suit me any too well either, but I must say that I welcome the improvements which have been recommended by the special committee. I am well pleased with its work ,and its report, and, like the hon. member for Kenora-Rainy River (Mr. McKinnon), I say that if the amended regulations are found not to work out well in practice, the committee can go to work again next year and amend them again. The members of the committee are to be commended for the time they have given to their work and the intelligent service they have rendered. I heartily

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welcome the report, because with the adoption of these recommendations it seems to me that the individual will have more of a right 'to an honest trial before he can be whisked away.


Richard Burpee Hanson: Mr. Speaker, it would I think be presumptuous if I were t'o make any extended remarks on this report at this late stage of the session. If one were disposed to think that we are endeavouring to close the session he would not get very much evidence of it from the extended debate which has taken place on this resolution, and perhaps I should not rise at all. On both occasions in the last session when this matter was under review I expressed the opinion that the paramount principle underlying this system of handling subversive elements in the community is the safety of the state. The second is that the government has the responsibility. The only question that has ever been in my mind has been the method employed and we may have had and I suppose still will have very divergent views with regard to what is the best method. I do not think there is much difference of opinion on the two questions of principle to which I have alluded.
I do not intend to go seriatim through the various recommendations of the committee. Some of them are of importance and some of them are not. There are just one or two observations which I would like to make, however, anterior to a short review of the recommendations; they arise out of the remarks made this morning by the hon. member for Rosetown-Biggar (Mr. Coldwell), in which he chastised all those who had anything to do with the conditions in pre-war Europe, even mentioning the name of Mr. Neville Chamberlain.
It is all very well, after the event, to condemn Mr. Chamberlain or to condemn Munich, but I venture to say that there are millions of people on this continent and in England who welcomed Munich and the declaration of Munich, based as it was on the fundamental principle that nations are expected to respect their word of honour. Mr. Chamberlain was not the first man-and I suggest that, as long as Hitler lives and carries on, he will not be the last one-to be deceived by the word of that dictator. I am astonished that the hon. member for Rosetown-Biggar should have found fault with the regime existent in England prior to the declaration of war, because I recall that it is not so many years ago that his leader visited soviet Russia and was received with open arms by the soviet government. Let that not be forgotten in Canada.


Georges Parent: Order. I do not think the leader of the opposition is in order in discussing this part of the speech of the hon. member for Rosetown-Biggar. The statements which that hon. member made with regard to causes prior to the last war and those which preceded the present war were hardly relevant to the matters now under discussion. I do hope that the leader of the opposition -


Richard Burpee Hanson: I bow
immediately, Mr. Speaker, to your ruling. I may say that I had concluded all the observations I desired to make in that connection, and I shall now proceed with the speech I had intended to make.
The main feature of the report is the clearer definition of the procedure to be followed by a detained person in presenting objections to his detention. I think that that is a constructive part of the report. In that respect it will not, I assume, meet with the approval of all those who have taken objection to what has been termed the rather peremptory procedure at present existing, but in my view, having analysed the recommendations as best I may, and, I may remark, cursorily, the report constitutes a considerable advance in that regard.
To my mind there are two main features of the report, in which the following principles are adopted.
In the first place, immediately a person is detained he is not whirled away into an internment camp. There are cases, of course, in which that might be justified. There are cases in which, I believe, it has been demonstrated that it is amply justified. I recall to mind what occurred in the dying days of the sitting of this house in August last, and I have yet to hear anybody condemn what took place here and what took place out of this house. To-day it is proposed that any detained person shall be kept in a local gaol under similar conditions to a person awaiting trial, until his objection has been disposed of or until he indicates that he proposes to make no objection. That, I think, is an advance; it is fair and just, and I approve it.
The second principle incorporated in the recommendations is that as soon as possible a person detained is to be informed of the general grounds on which he is detained, and notice of his detention is to be given to hia family, where possible and not contrary to the public interest. It is difficult to conceive of a condition where it would not be in the public interest to inform a man's family of the fact of his detention, I do not go any farther than that, but the fact that a man has been detained should, as a matter of course, be communicated to his family.

Defence of Canada Regulations
Otherwise a person so detained would be held incommunicado; and I suggest that there would be ground for serious objection thereto. As to the reasons for his detention, that is another matter.
The report goes on to indicate that an objection to detention may be filed within thirty days. That is to say, a person detained has a right to demand a hearing, and the matter is then referred to an advisory committee.
Fourth, the Minister of Justice is empowered to appoint one or more advisory committees, to consist of three persons, the chairman of which must hold or have held judicial office. The only departure there is that, instead of being referred to one person who holds or has held high judicial position, it is to be referred to a committee of three, one of whom is occupying or has occupied a judicial position. I am wondering why the word "high" has been eliminated from the recommendation. This is an important matter. The liberty of the subject is involved, and under the laws of Canada, only high court judges deal with questions arising out of th application for writ of habeas corpus. We have in the jurisdiction of New Brunswick, with which I am familiar, another procedure, not based on the issue of the writ itself, but on what is termed an order of the nature of a habeas corpus the jurisdiction under which may be exercised by a county court judge. But under this recommendation it would be possible for a police or stipendiary magistrate to be appointed the chairman of the advisory committee. I suggest to the Minister of Justice (Mr. Lapointe) that that is not good enough. Where the liberty of the subject is involved, the chairman of the committee should be a person holding or Who has held a high judicial position. There is no reason why that should not be. It has been the practice in the past, and I recommend to the right hon. gentleman that he follow that practice in the future.
The fifth recommendation is, as I understand it, that the chairman shall be required to inform the objector within a reasonable time before hearing of the grounds on which he is held and to furnish him with particulars of the reason for his detention as, in the opinion of the chairman, circumstances permit. That is to say, the chairman is required to inform the accused-if I may use that term
of the nature of the charge against him. This is common British justice, and should be done, and as fully as possible, so that there may be sufficient opportunity of defence. It is I think impossible to have what we understand in criminal law as full right of

defence in cases of this kind, but there should be as much right of defence and of answer as the circumstances permit.
Then it is provided that at the hearing "such particulars shall be further supplemented by giving the objector, all such further particulars as the committee shall deem necessary and advisable." Of course that leaves the discretion in the committee. Why it is restricted to what the committee deem advisable has not so far developed, unless it be from the remarks delivered in the course of his address this afternoon by the hon. member for St. Lawrence-St. George (Mr. Claxton) that there may be occasions when it is not in the public interest that this should be done. Conceivably that is true. No one has suggested a concrete illustration, but I am willing in the interests of the paramount principle to have it restricted that far. But I point out that this is not full right of defence.
Then the next move forward, if I may so term it, is that the objector may be represented by counsel. I do not recall what has been the practice in the past. I had thought there was the right to be represented by counsel. It seems to me, however, that if heretofore that right has not been given, this is an extension of a principle which all of us can support.
A new provision is made whereby a person objecting to a censorship order of the Secretary of State may lodge his protest with a committee appointed by the Minister of Justice, such committee to consist of a person who holds or has held high judicial office. Hon. gentlemen will observe that the principle of granting a hearing before a committee and the retention of the status of a high judicial officer is maintained here, whereas it is not maintained in the case of detained persons. I am at a loss to know why there is the distinction in this case, which is of much less importance than in the former case to which I alluded a little earlier. Here you are dealing with a censorship order made by the Secretary of State; there you are dealing with the liberty of the individual himself. It seems to me that if in one case you have a high judicial officer carrying out this function, there is that much more reason why you should have a high judicial officer presiding in the other case. I recommend that to the Minister of Justice. Why two separate types of committee should be contemplated I am not aware, but I do suggest that in the second case, where there is objection to a censorship order from the Secretary of State, one person is quite sufficient, because in that case where he is sitting alone the person must be one who holds or has held high judicial office.

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A committee of one person who holds or has held high judicial office reviews the censorship order. I have pointed out what appears to be an anomaly, and I conceive that my duty in that regard has been accomplished.
Then it is to be noted that under regulation 21 (3) the Minister of Justice is required at the beginning of each session of parliament and each four weeks thereafter during the session to make a report to parliament showing, among other things, the number of cases in which he has refused to follow the advice of an advisory committee. I suggest that in so doing the minister is exercising a judicial function, notwithstanding the statement to the contrary by the hon. member for St. Lawrence-St. George, and that this is not a mere ministerial duty that the minister is performing. If it is exercised on this basis there can of course be no objection to the minister reviewing the proceedings, and in so doing he must exercise a judicial function. If it is merely an administrative matter, of course he does not look beyond the evidence that has been submitted to the advisory committee.	Presumably he may have other
evidence, but in considering that other evidence he is exercising a judicial function. Of course this may be a mere academic discussion and not worth while at the moment, but I submit there is a clear distinction and the distinction should be recognized.
If the Minister of Justice under regulation 21 (3) is required to make a report to parliament, why should not the Secretary of State in the case of a censorship order be required to make a similar report with respect to the number of instances in which he has refused to follow the advice of the proposed new committee which is to hear objections against censorship orders? I suggest that to my hon. friend the Secretary of State. And also that there should be incorporated in the new regulations setting up this new committee on censorship the provision that there should be a report to parliament in those cases just as in the cases of detained persons by the Minister of Justice. It seems to me that if parliament is to know the number in the one case it should know the number in the other. And in the case of the censorship order parliament should know what the causes are and why orders have been made. There is no reason in the world similar to that which I really believe applies to the other case of which the minister spoke on one former occasion, that is the high interest of the state. I commend that suggestion to the Secretary of State.
Then there is a third recommendation, which has not been alluded to to-day and which may not be of paramount importance, namely 14873-232}
that consideration be given to segregating in separate places of detention the different classes of persons detained under regulation 21. Presumably enemy aliens, communists, national unity party members and so forth are referred to. What are the implications of this recommendation? I really do not understand the effect of it. There should be some elucidation.
Another matter the committee recommends is that the Minister of Justice give consideration to the advisability of making a regulation under which the sale of ammunition for pistols and revolvers shall be prohibited until the purchaser has produced his registration certificate for the pistol or revolver. This is an excellent recommendation. It would assist the police in checking up on the registration of fireams. Doubtless there are many firearms in this country of which the police know nothing.
Then the committee recommends that for the duration of the war a special committee of the house should be appointed at each session to consider and review the defence of Canada regulations. I hope the government will adopt this suggestion.
The committee has performed from the beginning a useful function. The work of the committee has been carried on, I believe, with thoroughness. An exchange of views by intelligent men around a committee table free from publicity, where men can speak their thoughts, will I believe in the end evolve the very best possible system.
It is a matter of regret to me that the committee found that it could not deal at this session with the question of the laws relating to naturalization and deportation. There are many aspects of the law relating to naturalization and deportation which require careful study and scrutiny, and I hope that next session such an opportunity will be provided. If it is considered that the work of the committee on the regulations themselves is too great and too heavy, then it would be worth while giving consideration to the setting up of a separate special committee. One of the things this committee could do, one of the matters to which the minister referred in moving concurrence in this report, and something which, in my judgment, could be done with great advantage, would be to study whether the provisions of the Immigration Act as it now exists are adequate to deal with what probably will be a very 1 arge number of applications for entry into Canada when the war concludes. It is all very well to visualize this country as an asylum for the oppressed. We are willing to aid and succour those who are oppressed, but we have made mistakes in our immigration policy in the past; the government and everyone else knows

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that. I think we must continue to have regulated entry into this country after the war; otherwise we might find ourselves in a plight which to-day we would not appreciate.


Ernest Lapointe: Mr. Speaker, like the leader of the opposition (Mr. Hanson), I do not wish to delay the adoption of this report, but I think I owe it to the house and more particularly to the members who served on this committee to say at least a few words in appreciation of their work. I desire to express not only my congratulations but also my thanks, and the thanks of the house, to the members of this special committee for the work they have done and for the study and attention they have given to that work. I do not think I should speak on the various recommendations which have been made, and which have been discussed during the course of this debate, except to say that I will see to it that these recommendations are immediately incorporated in the defence of Canada regulations and that those matters which are recommended to the consideration of the government are given that consideration.
What I wish to say is rather on the general aspect of the question, which is a very difficult one. As I have stated already in connection with this matter, there are two schools of thought as to what should be done, which schools differ materially. At the beginning of hostilities those who wanted to intern the largest possible number of persons who might be suspected were rather in the majority; the demand was for the internment of many people, and the blame or criticism was that too many were left at liberty. A little later there was a reversal in the trend of public opinion, and the criticism was that there were too many people interned, that civil liberty was endangered. To-day the two schools are still working, and I am continually receiving complaints of the most contradictory nature. For instance, members of the civil liberty league write me that we are much too strict in keeping people interned who might be released. At the same time I am in receipt of resolutions adopted by various branches of the Canadian Legion stating that too many interned people have been released, that sufficient care is not being exercised, and that this is a dangerous condition. I have also received letters and resolutions with regard to labour leaders who have been interned. Of course there are no labour leaders interned as such, but only those who secured admission to labour unions while more particularly concerned about the propagation of communist doctrines. At the same time I am in receipt of requests that some of the labour organizers,

particularly those coming from the country to our south, should be treated as disturbing influences in our country, and that strict action should be taken with regard to them.
To show hon. members how different the views are, last week I received a letter from a gentleman protesting violently against certain speeches and writings of another gentleman, and blaming me and the government for not interning him as an enemy to the security of the state at this time. At the very moment I was reading this letter a report was submitted to me by the police suggesting that it might be advisable to intern the gentleman who had written me the letter, for being an agitator and an enemy of the state.


Richard Burpee Hanson: It would be interesting to know who were these gentlemen.


Ernest Lapointe: Of course I cannot give the names, but perhaps the gentleman who wrote me the letter will be able to identify himself.
I desire to repeat what I have stated already in this house, particularly in answer to the criticism that some of the internees are not given a fair trial, as in criminal cases. These men are not interned as a punitive measure, as though they had committed some crime. If that were the situation, before they could be convicted and sentenced there would have to be complete evidence; there would have to be a fair trial, and they would have to be given the benefit of the doubt. This, however, is not a punitive action; it is a preventive action, for the safety of the state. It is the action of a nation at war, that has to protect itself against any possibility of people doing something which might harm or injure the war effort of the nation. That is why keeping the final discretion in the Minister of Justice is, I believe, the only thing that could be done, and that is where I differ from my good friend the hon. member for Saskatoon City (Mr. Bence) who made a fine speech to-day on this matter. I do not think it would be advisable to place upon a judge the responsibility of deciding whether or not a man who might be dangerous to the safety of the state during a war should be interned. It is more a matter of public safety and public policy. After all, as the hon. member for St. John-Albert (Mr. Hazen) has said, it is the government which is responsible for the safety of the state. This is a serious and disagreeable responsibility, but it cannot be avoided.
On certain occasions I have worried a good deal about what should be done. If the judge, after having heard witnesses, consisting of the

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family of the interned man, and some others, comes to the conclusion .that the man is not a serious danger and should be released, and if the men responsible for order, the officers of the Royal Canadian Mounted Police, and especially those whom I trust and in whose judgment I have confidence, tell me on their responsibility that they do not wish to be held responsible for what that man could do if he were left at liberty; then, if I order the release of such a man, and a month or two after such release a serious act of sabotage is committed, resulting in loss of life, and if such activities can be traced to the man in question, who would be responsible? I would be. The government would be. The judge, for whose judgment I would have the greatest respect, would not be the one who would be blamed. No; the Minister of Justice would be blamed. The government would be blamed. And it is not only a question of blame, but the feeling that in some degree my country might suffer because that man is free.
That is why in some instances I could not bring my mind to an acceptance of recommendations for release. However disagreeable it may be, I believe I am more completely fulfilling my duty to Canada when I keep such a man inside.
I believe the recommendation for a committee of three instead of a committee of one is a good one. The leader of the opposition has said that he cannot see why the word "high" has been eliminated, when referring to persons having high judicial functions. I have a case in mind. This has to do with a gentleman who has been a county court judge in a great province. I believe, in fact, that he has headed the judges in his district, and he has now retired. That judge was an authority on criminal matters. He is in good health, and could do good work. In my opinion he should not be eliminated simply because a county court or district court judge is not. considered as one holding a high judicial position. As a matter of fact, the man I have in mind is a good deal more qualified than most of the judges of the higher courts.
There again, however, the responsibility will be ours not to appoint anybody who would not be qualified to occupy the position. It has been stated quite frequently that public opinion in Canada is strongly opposed to the defence of Canada regulations. We have had a demonstration quite recently which indicates that that is not so. A by-election was held in Edmonton East. A gentleman journeyed from Toronto to Edmonton to offer himself as a candidate opposed to the defence of Canada regulations. In his campaign he was helped by the hon. member for North Battle-ford (Mrs. Nielsen), who travelled to Edmonton to attack the regulations. The hon.
member said even that the Minister of Justice (Mr. Lapointe) was worse than Hitler. She said that he was a worse dictator than Hitler, because he could do anything. Well, it appears that the electors of Edmonton East believed that I could be safely trusted to do better than Hitler, so far as the matter of dictatorship is concerned, and neither Mr. MacLeod nor the hon. member for North Battleford had great success in their attack upon the defence of Canada regulations.
I should not like to close without expressing an appreciation of those whose work I am in the best position to judge. I pay tribute to the Royal Canadian Mounted Police, the devotion of all its members and the satisfactory results of their work. At no time have I had to make complaint either as to their ability or as to the conscientious manner in which they have acted in the execution of their duties. When this war is over-and I hope it will be before too many years, and we shall have achieved victory-I believe the people of Canada will have reason to be grateful to the Royal Canadian Mounted Police for the way in which they have done their work in keeping order in Canada.


Mr. CLARENCE GILLIS (Cape Breton South):: Mr. Speaker, I shall take only a few minutes in what I have to say. When the hon. member for Rosetown-Biggar (Mr. Cold-well) , who represented this group on the committee, spoke this morning, he made a clear statement of our position in the matter.
I should like to put the leader of the opposition (Mr. Hanson) right about a remark he made which is not in accordance with the facts. He referred to the leader of this group, the hon. member for Winnipeg North Centre ,(Mr. Woodsworth), as having made a trip to Russia. The hon. member made that trip on his own; he was not a guest of the soviet government, and to the best of my knowledge he was not received with open arms. Therefore the insinuation or implication contained in the remark of the leader of the opposition is not relevant at this time.
I listened with a great deal of interest to the hon. member for St. Lawrence-St. George (Mr. Claxton). I think he stated the case very well. We realize that the defence of Canada regulations are necessary at this time. Our complaint is in connection with the administration. We consider that the changes suggested by the committee which scrutinized these regulations will be beneficial. I have a good deal of confidence in the Minister of Justice (Mr. Lapointe). If he had complete jurisdiction, I am sure that he would see that justice was done. What I am concerned about, however, is the fact that a certain

Defence of Canada Regulations
amount of jurisdiction is delegated to the provinces. I am not so confident as to how that power will 'be used.
I represent a coal mining constituency, and I should like to refer briefly to an order in council which was passed on June 6, 1941. I think there is an ulterior motive in the passing of this order in council at this time. The Montreal Gazette of June 6 states:
Civil authorities administering the defence of Canada regulations were given far-reaching powers to prevent slowing up or unauthorized stoppage of coal mine production by an order in council adopted to-day and announced by J. McG. Stewart, coal administrator.
Further on it states:
They said the order is aimed at agitators, small groups who might create a partial stoppage of production based on trivial causes, and all illegal interference with production.
Personally I do not like the phrasing of that statement which apparently was issued1 by authority of the coal administrator. I find it hard to understand why an order in council like that should be passed on a day when this house was discussing matters pertaining to labour, a bill to change the conciliation machinery and make it more workable.


Richard Burpee Hanson: At least it should have been announced here.


Clarence Gillis: I agree that coal should be produced, but I am wondering whether this order in council will be enforced equitably. It is stated that the Object of the order in council is to prevent the slowing down of operations or illegal strikes. I think that order in council was inspired from Nova Scotia. During the past month there have been some troubles in that section of the country. My only knowledge is the press, and consequently I cannot state specifically what the causes were, but I do know that 99 per cent of the trouble in that section of the country is due to the fact that the local management has practically no authority to settle grievances. The industry in Nova Scotia suffers from absentee management. Grievances pile up, and agreements or customs which have been established over a period of years are abrogated overnight. This causes discontent, and there is built up in the minds of the men a feeling that the legitimate agencies they have established are not workable. They get the run-around in all directions. The result is a stoppage of work or a slowing down of production. The morale of the men is broken; they have no incentive to produce 100 per cent.
I should like to know if an investigation will be held to see who is responsible for any illegal stoppage or sit-down strike before this order in council is applied. I know the industry in Nova Scotia and I know the management. There is no more unjust organi-

zation existing in Canada to-day; there is no organization that is manipulated in more slime or in as insidious a way as this corporation. I am afraid that many men will be placed in a position where they cannot defend themselves. I wish to make this statement so that the Minister of Justice will hear it. I am not content to leave any situation that might arise in the province in the hands of the provincial attorney general. The provincial political organization and the coal companies have mutual interests; they work together, and I do not say that for political reasons. Before any action is taken to place anyone in an internment camp, the reasons why such action is taken should be given. As the hon. member for St. Lawrence-St. George has said, democracy is not an abstract principle; it is a living thing that is reflected in the lives of the people. If we are not practising it, there is not much use in our talking about it.
I should like to ask the Minister of Labour (Mr. McLarty) and the Minister of Justice if this order in council will be applied to the mining companies of British Columbia. In that province men are working only two or three days a week. Will it be applied to Alberta where mines are closed down and miners must seek relief? That is sabotage of the industry. If there is to be a shortage of coal; if there is to be a famine sufficiently serious to warrant the government in taking action under this order in council, then I think it should be applied to those industries which are not functioning. A mine closed down in River Hebert, Nova Scotia, throwing 150 men out of work. The Minister of Publio Works (Mr. Cardin) stated that there would be sufficient orders from the Canadian National Railways, the principal customer of this mine, to warrant the continuation of operations. Other mines are idle. A similar situation exists in Inverness county. If this order in council is to mean anything, it should work both ways. If it is not to be applied to those sections where mines are idle because it is not sufficiently profitable to carry on operations, it should not be applied to those sections where it is profitable to operate. Before it is applied, there should be an examination of the reasons why a stoppage has occurred, and the cause should be determined. I am prepared to state here that in 99 per cent of the cases, if an impartial examination were made, the cause would be found to be not the men but the fact that they are placed in their present position through unjust manipulation by people who are not concerned about the war or production other than what it means to them in dollars and cents.


[Stage Direction]
Motion agreed to.

Labour Conditions

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
PUBLIC INFORMATION-"o CANADA" PAMPHLET

Douglas King Hazen: . 1. Has the office of customs and excise in Richibucto, Kent county, New Brunswick, been closed?
2.	If so, for what reason?
3.	Is it the intention to reopen this office, and when?
4.	If this office is still in operation, what are the names of the officers and their respective salaries?
5.	By whom were such officers recommended?


Mr. GIBSON:: .
1.	Yes. December 1, 1940.
2.	In the interests of economy, as revenue collected was very small and as the customs and excise business, with the exception of entering and clearing foreign-going vessels, could be transacted without undue inconvenience at other centres.
3.	No.
4.	and 5. When the office was closed the usual practice was followed and Mr. J. T. Vautour, the postmaster, was employed to enter and clear foreign-going vessels, with remunex-ation at the rate of fifty cents for each entry or clearance.


ROYAL CANADIAN MOUNTED POLICE-JAMES MOON
Mr. BLACK (Cumberland):: 1.	Was James Moon employed as a constable in the Royal Canadian Mounted Police?
2.	If so, how long was he employed?
3.	Was he a single or a married man?
4.	Was he dismissed from the force?
5.	If so, for what reason?


Mr. LAPOINTE (Quebec East):: 1.	Yes.
2.	From October 30, 1933, to January 22, 1941.
3.	He was alleged to be single but it was discovered he had married without permission on July 24, 1936.
4.	He was discharged on January 22, 1941, as being unsuitable having married without the consent of the commissioner.
5.	Answered by No. 4.


QUESTION PASSED AS ORDER FOR RETURN
Mr. GREEN:: 1.	What are the working hours set for civil servants and temporary civilian clerks employed in the naval stations, army headquarters or air force stations in Canada?
2.	What statutory holidays are observed by these clerical staffs?
3.	What annual leave is given to temporary civilian clerks so employed?
4.	On any of such staffs are there some temporary clerks paid at an hourly rate of fifty (50) cents per hour or thereabouts, and others at a rate of sixty dollars ($60) per month, or thereabouts, although both are doing the same work ?
5.	If so, why is there this difference in rating?


LABOUR CONDITIONS
[Stage Direction]
On the orders of the day:
Mr. J. R. MacNICOL (Davenport):: Mr. Speaker, I want to read two short sentences from the Toronto Telegram of Saturday last, June 7, and then ask the Minister of Labour a question. I have advised the minister that I was going to ask this question and I am sure that he will be able to give me an answer which will be satisfactory.
The article in the Toronto Telegram is headed: "G.E. Strikers Hear Warning Acts Illegal. Delegates report McLarty declined assurance conciliation board action would be speeded up." The article goes on:
Canadian General Electric Company employees from Wal'd street and Lansdowne avenue plants, now on the fourth day of their "holiday", are
Gristed Wheat

going to remain on strike despite Ottawa's warning they return to work or be liable to arrest.
About 650 strikers unanimously reaffirmed their decision by a standing vote at a mass meeting held in the Polish National Hall, Queen street and Dovercourt road to-day. There are about 850 on strike.
Before asking my question I may say that over the week-end I met by chance a number of the strikers on the street, and in conversation with them it occurred to me that there should be some way of settling the strike promptly. They really want to get back to work. I did not enter into the causes of the dispute, because I am sure the labour department has that matter in hand. I would like to ask the minister what is the procedure of the department on being informed that a strike is in the offing-because the department must know beforehand that a strike is perhaps likely to take place. What action in such circumstances does the department usually take to prevent a strike?


Hon. N. A. McLARTY (Minister of Labour):: Mr. Speaker, in every case in
which the department is advised that a labour dispute has arisen or is likely to arise, a conciliation officer of the department is sent to carry on negotiations. The men are advised, if a strike is apprehended, that a strike would be illegal, and that if there are grievances which should be righted they should make application under the Industrial Disputes Investigation Act. In this particular instance, however, a strike was called very suddenly without any knowledge of the Department of Labour that there was any difficulty whatever. The men and women simply walked out. Immediately this happened a conciliation officer was sent to the plant. He endeavoured to conciliate and suggested that the men and women should return to work. This they refused to do, and have refused ever since, and so far as my information goes they are still out.
On Friday evening I met a delegation of the workers of the Canadian General Electric plants in Toronto, who are now engaged in an illegal strike. I advised them that they should return to work and that when they had put themselves within the law they would have the same rights as any other employees in war industries in Canada to apply for a board of conciliation under the Industrial Disputes Investigation Act. They advised that they were holding a meeting on Saturday morning, and on Saturday afternoon I was advised that they had decided at the meeting not to return to work. I immediately wired
[Mr. MacNicol.1
them stating that unless they returned to work by Monday at noon, I would turn the matter over to the Department of Justice.
I have been advised that they have not returned to work and have consequently arranged to advise the law officers of the crown as to the circumstances in connection with the matter and asked them to take such action as they deem most appropriate under such circumstances for the enforcement of the law.
Mr. MaeINNIS:	Are these employees
organized?


Norman Alexander McLarty: I cannot answer that
question definitely, because some of them claim they are and some claim they are not.


STRIKE OF HOSIERY WORKERS IN SCHOFIELD PLANT AT OSHAWA
[Stage Direction]
On the orders of the day:
Mr. KARL K. HOMUTH (Waterloo South): May I ask the Minister of Labour if he has yet received any report from the two boards investigating the Oshawa textile strike?
Norman Alexander McLarty: No, not as yet.


REPRESENTATIONS OF SASKATCHEWAN FLOTJR
[Stage Direction]
On the orders of the day:
Mr. J. G. DIEFENBAKER (Lake Centre):: Mr. Speaker, I wish to read a telegram which I have already shown to the Minister of Trade and Commerce, and to base a question thereon further to the question I directed to him on Friday last. The telegram in part reads as follows:
Prince Albert, Saskatchewan.
June 6.
John G. Diefenbaker, K.C.,
House of Commons,
Ottawa.
Objection is against ruling of quota delivery point. For instance, a farmer declares his quota delivery point, say White Star or Davis or Crutwell dependent where farm located.
These places are all within a radius of fifteen miles of Prince Albert:
Once delivery point declared farmer can deliver to no other. Thus he is automatically barred from delivering wheat to grist at any mill unless^ fortunate to have a mill in his delivery point. This is the joker in the new regulation and Minister of Trade and Commerce well knows this. The big mills have made sure of that. Flour is being rapidly advanced in price by big mills. On basis of wheat board wheat price August 1, 1941, crop four and a half bushels of wheat for gristing one bag flour is equal to $2.34. Big mills flour is now

Supply-Trade-Canada Grain Act
retailing $2.90 to $3.20 per sack. -Suggest
you demand that any farmers quota delivery permit book be acceptable at any and all mills for purpose of gristing. Farmer could have 5,000 bushels wheat on farm and no money and prohibited from securing flour for wheat and even if he has a little money must pay from sixty cents to one dollar more for flour than he should to say nothing of using cash much needed for other urgent necessities. No question the regulations are aimed to destroy local mills and create big mill monopoly.
In view of what is stated in the telegram based on the regulations which were announced on Friday, will the minister advise whether the regulations of the wheat board will be altered in order to allow the farmers to grist their wheat into flour at any flour mill even though located elsewhere than at the delivery point named in the permit, in order that the farmer whose delivery point has no local flour mill may be assured of the right to secure flour at a lower price than fifty to sixty cents per hundred, which otherwise would be the case?


Hon. J. A. MacKINNON (Minister of Trade and Commerce):: Mr. Speaker, the
hon. member was good enough to show me the telegram upon which he based his question.
I do not think it sufficiently important to refer to that part of the telegram which rather suggests that the regulations are out to hurt the small miller and help the big miller. Those observations are just so much nonsense.


John George Diefenbaker: That is what the secretary of the flour millers' association says.


James Angus MacKinnon: I
am glad, however, to advise the hon. member that the wheat board are dealing with this question and are hopeful of introducing regulations which will permit the handling of wheat for gristing in the method suggested.


NICKEL AND COPPER
[Stage Direction]
On the orders of the day:
John Ritchie MacNicol: Over the week-end in Toronto many people in my riding were greatly exercised over the alleged wheat shipment to Japan. In the course of conversation they asked also whether nickel and copper are being shipped to Japan. Would the Minister of Trade and Commerce please advise?


James Angus MacKinnon: I am very sure that I am correct in saying that no shipments, outside of the wheat referred to in this house in the discussion in the last day or two, are being made to Japan.



LABOUR DEPARTMENT ACT


[Stage Direction]
Hon.N.A. McLARTY (Minister of Labour) moved the second reading of Bill No. 100, to amend the Labour Department Act.
Motion agreed to, bill read the second time, considered in committee, reported, read the third time and' passed.
[Stage Direction]
The house in committee of supply, Mr. Fournier (Hull) in the chair.

[Stage Direction]
Canada Grain Act.
31/9. Administration, $104,648.50.
James Angus MacKinnon: Mr. Chairman, I should like to deal at this time with a number of points raised by the hon. member for Qu'Appelle (Mr. Perley) in his speech on this item on Friday last.
In the first place, the hon. member has complained that he cannot get a detailed account of the board's operations from the annual report issued by the Canadian wheat board on January 11, 1941. I am astonished at this, because the report contains a complete and detailed statement of the board's operations up to July 31, 1940.
For example, the hon. member has asked what the liability is in connection with the 42 million bushels of wheat 'carried in country elevators or in transit on July 31, 1940, for the account of the board. He has already answered his own question by quoting from the annual report, exhibit A, that the liability amounted to $28,927,925. I might add that this amount has been reduced to a very small figure, as most of the 1939 wheat has been forwarded to terminal positions.
With regard to the hon. member's request for evidence that the British authorities requested that the grain exchange should remain open, I placed on Hansard in 1940, at page 2360, this evidence with regard to the previous* sale, or to the sale of 100 million bushels of wheat last year. I should like to quote now from a cable received on May 9, 1941, from the cereals import branch of the United Kingdom ministry of food, with regard to the 120 million bushels sale.


Richard Burpee Hanson: To whom? To the minister?

3682	COMMONS
Supply-Trade-Canada Grain Act


James Angus MacKinnon: To the wheat board. A copy of the telegram was sent to cne through the Department of External Affairs.


Mr. PERLEY:: Who is the representative of the cereals import branch on the Winnipeg market?


James Angus MacKinnon: There is no representative. I have repeatedly answered a similar question by the hon. member for Qu'Appelle. The ceTeala import committee have no representative in Canada. I quote from the telegram.
Cereals of course must be assured that the market remains open.
"Cereals" means the cereals import branch of the United Kingdom ministry of food.


Thomas Miller Bell: If they are not purchasing on the Winnipeg exchange why should they require the exchange to remain open? Is it because1 they .think that that sets the price?


James Angus MacKinnon: The cereals import committee purchase their cash wheat on the exchange through well-known Winnipeg firms of brokers.


Ernest Edward Perley: Does the minister mean to say that they have not someone there operating for them?


James Angus MacKinnon: I can only repeat the answer I have given before. They have not.


Richard Burpee Hanson: On the theory that all the wheat goes to the wheat board, as contemplated by the act, why does the cereals import committee not buy direct from the wheat board, because that is the underlying principle of the Wheat Board Act, that they shall handle all the cash wheat? I know the act provides that the machinery shall be kept open. That was a consideration given to opposition members in the house of that day for concurring in that principle of the bill- But that was not in war time; that was in peace time, and to-day the same condition does not exist. So far as I am concerned, I wish to know what the true legal position is. The minister stated what the operating position is.


James Angus MacKinnon: I suggest that the hon. member allow me to continue. He is anticipating something that I intend to place on the record. I shall be glad to answer any questions when I have finished this.


Ernest Edward Perley: The minister is replying to a statement which I made, and I think one question would be proper here. He has stated, that the British cereals import committee buy through, or give an order to buy cash grain to a member of the exchange. How does the board know, when it is on the open market, that whoever got that order is placing it for the British cereals import committee?


James Angus MacKinnon: I am informed that they do not know.


Ernest Edward Perley: Then the board when selling the wheat do not know where it is going?


James Angus MacKinnon: We are getting into rather technical matters concerning the handling of wheat sales. I am informed that the cereals import committee purchases futures from the wheat board-


Ernest Edward Perley: That is the opposite to what the minister said a minute ago.


James Angus MacKinnon: -and buy the cash grain from the exporters.


Ernest Edward Perley: Then the board exchanges the option, and they have not sold any wheat. That is the effect of it.


James Angus MacKinnon: I am informed that that is not so.


Ernest Edward Perley: That is the way it operates.


James Angus MacKinnon: The wheat goes out of the country on the basis of the sale.


Ernest Edward Perley: Then the board takes an option, gets the cash wheat, takes an option and sells the wheat. They have not sold any wheat.


James Angus MacKinnon: The hon. member also referred to the price paid by the British Ministry of Food to the Canadian wheat board for the recent purchase of 120,000,000 bushels of wheat futures. He claimed that Liverpool is advertising the price and that it is also disclosed in certain publications of the dominion bureau of statistics. His claim is incorrect. The so-called "Liverpool wheat offers" published daily by Broom-hall and reprinted in the "Monthly Review of the Wheat Situation" are all based upon seaboard offers of exporters, which are in turn based upon the open market futures price at Winnipeg plus freight, 'handling and other charges from the lake head to the seaboard position. Since these prices are based upon the open market price and not upon the

Supply-Trade

Canada Grain Act
price at which the futures were sold by the Canadian wheat board' to the British Ministry of Food, they cannot and do not indicate the price of the wheat board sale.
Regarding the customs export quantities and values of wheat, which are published monthly by the dominion bureau of statistics and which the hon. member for Qu'Appelle also claims to be indicative of the wheat board's sale price to the United Kingdom, I would state that these figures are simply the declared values shown on the export entries required for wheat shipments from the exporter or shipper, and the declared values are f.o.b. port of exit from Canada. These ports include Fort William-Port Arthur for shipments in transit to overseas destinations via the United States and Montreal and other St. Lawrence ports, as well as the Canadian maritime ports. Consequently the combined average valuation of wheat shipments from all these ports of exit from Canada cannot be related back to the open market prices, upon which the wheat export sales were based in the first instance. Neither can they be related to the wheat board's sale price to the British Ministry of Food, which in turn varies from the open market level. Therefore the hon. member's claim that the sale price is indicated in published sources is quite incorrect.


Ernest Edward Perley: I was quoting from the minister's own bulletin. It gave the number of bushels and the price in Canadian dollars, and it figures to 85 cents; the minister's own department stated that.


Mr. ROSS (Moose Jaw):: But the hon. member did not understand what it meant; that is all.


James Angus MacKinnon: The hon. member for Qu'Appelle also referred to the budget resolutions under the heading "indirect liabilities", and asked certain questions with regard to the relations between the board and the Winnipeg Grain and Produce Exchange Clearing Association Limited. I table herewith the guarantee given to the clearing association by the Canadian wheat board, as follows:
His Excellency the Governor General in Council, on the recommendation of the Prime Minister and in the exercise of the powers conferred by the Canadian Wheat Board Act, 1935, is pleased to authorize and doth hereby authorize the Minister of Finance on behalf of the government of the Dominion of Canada to guarantee due payment of all such sum or sums as may be or become payable to the Winnipeg Grain and Produce Exchange Clearing Association, Limited, by the said Canadian wheat board in respect of its obligations as a member of such association.
His Excellency in Council on the same recommendation is further pleased to order and doth hereby order and direct that the said guarantee shall be in the following form, or one to like effect;
"In consideration of the Winnipeg Grain and Produce Exchange Clearing Association, Limited (hereinafter called 'the association'), permitting transactions and trades in grain made by the Canadian wheat board (hereinafter called 'the member') to be cleared through the association pursuant to the association's by-laws, rules and regulations, and in consideration of the association carrying an account with the member in connection with such transactions and trades, I, the undersigned, do hereby guarantee to the association the due payment of all sums of money which are now or shall at any time hereafter be owing to the association by the said member, whether the same shall be owing upon any open line of trades carried by the association for the said member, or for any liability contracted by the association on account of the said member, or upon any cheques, bills or notes given by the said member to the association.
Dated at Ottawa, this 30th day of December, 1935."
The usual practice of the clearing association in dealing with the grain companies is to stipulate that they may carry a certain maximum quantity of futures, based upon their financial standing, without requiring the deposit of any original margins. If this quantity is exceeded, origii al margin must be deposited for the entire quantity of futures held by the company concerned. In the case of the Canadian wheat board, operating under the guarantee of the government, the clearing association waived all requirements with regard to original margins. The wheat board has no margins with the clearing association, so that when the hon. member inquires whether the guaranteed liability of the wheat 'board in the clearing association has an influence on the government's decision to keep the grain exchange open, he is completely misunderstanding the situation, since there are no margin deposits.


Ernest Edward Perley: Then may I ask why-


James Angus MacKinnon: May I just finish this portion. Such a guarantee could have no influence on the matter or on the government's decision with regard to the Winnipeg grain exchange.
The daily "margin deposits" referred to in the budget resolutions merely bring the valuation of the wheat board's holdings into line with the day-to-day changes in the market prices and accordingly vary from day to day. Sometimes the clearing association issues a cheque to the board, and at other times a payment to the clearing association by the board is necessary. Therefore my answer to

Supply-Trade-Canada Grain Act
the hon. member is that since the board did not put up margins with the clearing association, and also since the clearing association is independent of the Winnipeg grain exchange, the margin requirements cannot influence the government's decision as to whether the Winnipeg grain exchange should operate or not. There is no basis whatever for the hon. member's claim that the government could be influenced by this to keep the market open.


Ernest Edward Perley: If the board guarantees an account for the brokers who are operating for the board in the clearing house and are not putting up any margin by the board itself, why is it necessary for the government to keep the exchange open because they could not trade in that way?


James Angus MacKinnon: I am informed that the government guarantees the board's account. But the board does not guarantee any brokers' accounts.


Ernest Edward Perley: Will the minister allow me to have a copy of the statement he is giving, and then he can make his statement without interruption. But without seeing the statement we cannot follow this.


James Angus MacKinnon: Yes; I shall gladly send over a copy.
The hon. member for Qu'Appelle also inquires with regard to the financing of the Canadian wheat board. The government guarantees advances to the Canadian wheat board by a stated amount adjustable to the board's requirements for each season. The board then borrows from the banks against warehouse receipts. The interest rate of three per 'cent is arranged for between the board and the banks, after consultation with the Department of Finance.
The stocks of wheat held by the elevator companies for the account of the board in country elevators or in transit to terminal elevators are financed by the elevator companies. The board allows them an interest rate of 44 per cent, which is the same rate that the elevator companies are required to pay the banks from whom they borrow the money. The interest rate is higher on country elevator stocks because of the cost involved in wide distribution of small sums in the country, and because of the greater risk involved where no warehouse receipts are available as collateral.
The hon. member for Qu'Appelle has asked for information as to what he describes as "guaranteed accounts of the brokers." There are no such accounts. The hon. member has been misinformed on this point also. The

hon. gentleman is further misinformed when he says that the regulations bring coarse grains under the operation of the board. The provision to which he refers merely gives the board power to regulate the deliveries of coarse grains if such regulation should be necessary in 1941-42 in making the most effective use of available storage. The wheat board is not empowered to buy or handle coarse grains.
I have already mentioned that the Canadian wheat board publishes a complete and detailed annual report. The report for the crop year 1939-40 was issued last January, and the report for the crop year 1940-41 will be issued early in 1942. The board is also under continuous audit, and weekly reports of the auditors are forwarded to the government from Winnipeg as required under the act. In addition to these reports, the wheat sub-committee of the cabinet is in frequent consultation with the members of the Canadian wheat board. Hon. members will appreciate the necessity for such close cooperation in these times when the task of the board is, to say the least, not a light one, and new problems are arising from day to day.
I think, therefore, in view of these facts, that such statements as those of the hon. member for Qu'Appelle do not help the situation. If he could give one specific instance or make one definite charge as to why the operations of the wheat board will not bear the light of day, I would be glad to recommend that he be given a chance to substantiate his statements. From his remarks of last Friday it seems to me that he was just making general statements, without any precise knowledge of the grain business.
The hon. member for Qu'Appelle quoted a telegram dated July 18, 1940, signed by a number of the elevator companies, offering to place their elevator systems at the disposal of the government for the duration of the war, provided that the government guarantee a return of 6 per cent on their capital investment. The hon. member asks why this offer was not accepted. The offer did receive consideration by the government last July. The decision then reached was that it would be more economical for the government to continue to have the elevator companies operate their own facilities on the basis of handling contracts entered into with them.
The hon. member has referred to the difficulty which certain shippers and other grain handling interests might have in making delivery of wheat at Fort William-Port Arthur against their futures contracts, and left the

Supply-Trade-Canada Grain Act
impression that there was something new and unusual about such a situation. It should be obvious to the hon. member that the futures trading system is patterned to prevent such a return of out-of-position wheat, rather than to cause it. A shipper should not be penalized simply because he has protected himself in the usual way by hedging his purchases of cash wheat by the sale of an equivalent amount of wheat futures, some of which may be held by the board. The hon. member knows that one purpose of such transactions in the futures market is to enable the shipper to put wheat east of Fort William into export position, and keep his position hedged by the sale of futures. If this practice were not followed, then the intention of the act and the purpose of the board would be defeated in that shippers and exporters would not move wheat into position for overseas sale.
The hon. member seems to find something reprehensible in the fact that the shippers, grain interests and millers cannot make delivery of their wheat at Fort William. If the wheat board should insist that delivery be made it would mean that they would be engineering a vast corner, which would be entirely contrary to the act and would defeat our whole purpose of encouraging shipments and full use of eastern storage facilities. In this connection another consideration arises, which the hon. member mentioned. The shippers and millers would not be able to move wheat into position for overseas shipment or for grinding in Canada unless they receive a fair carrying charge from the futures market to offset their storage and interest costs. In this way the financing of the grain is looked after while it is in transit and in process of manufacture. Nothing should be done to hinder the free movement of wheat in these times of surplus.
I should like to refer briefly to the hon. gentleman's allegation that shipments of wheat to north China were made by the Continental Grain company, the Leval company, and the Bunge company. I wish to state unequivocally that the shipments are being made by the Canada Grain Company, Limited, of Vancouver, of which Mr. Robert McKee is managing director. Mr. McKee is a former president of the Vancouver board of trade, a reputable citizen, an experienced grain exporter, a member of the advisory committee of the wheat board appointed by the Bennett government in the fall of 1935, and has been and, so far as I know, still is a stalwart supporter of the Conservative party. Yesterday I received a telegram from Vancouver which I had planned to read to the house, but I do not wish to labour this matter beyond the
extent necessary. As a matter of fact, I believe the leader of the opposition has received a similar telegram from Mr. Ladner of Vancouver, commenting on the sale of wheat that has been under discussion.


Thomas Miller Bell: Who is Mr. Ladner?


James Angus MacKinnon: Mr. Leon J. Ladner.


Mr. MACKENZIE (Vancouver Centre):: A former member for Vancouver South.


James Angus MacKinnon: He was formerly a member of this house, and,
I believe, is associated with Mr. McKee in the Canada Grain company.


Charles Edward Johnston: Could the minister put that telegram on Hansard'!


James Angus MacKinnon: I will read the telegram.


Richard Burpee Hanson: Which
telegram is the minister reading; his own?


James Angus MacKinnon: Is the hon. member suggesting that I sent a telegram?


Richard Burpee Hanson: No; but is the minister reading the telegram to himself or the telegram to me?


James Angus MacKinnon: It is the telegram to myself. I might add that I think considerable credit is due Mr. Ladner for endeavouring to set us right on the matter of this wheat shipment. The telegram reads
Phoned Hanson to-night about Perley's incorrect statement in house as reported here regarding shipment garnet wheat by Canada Grain Export Company to north China, and as requested by Hanson I wired him correct factB asking him to make appropriate statement in house in justice ,to your government, our company and directors. I gave him full statement and your government's adamant refusal to my request for export licence which at that time I thought very unfair unless welfare Canada or Britain was adversely affected, because sale was in Canada's interest. I think Hanson now understands situation.
In the same connection, just this afternoon I received a telegram signed by the Bunge North-American Grain Corporation, addressed to me as Minister of Trade and Commerce and dated New York, June 9, reading as follows:
We have received from Winnipeg newspaper clippings of statements made by Mr. Perley, a member of your House of Commons. The statements made by this gentleman as referring to-our organization are absolutely false. The last wheat we shipped to the orient went to Shanghai February 11, steamer Illinois, buyer Foh Sing

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flour mills, and since then have consistently refused further business in either Canadian or United States grain. We ask you to please put these facts before the House of Commons.
Bunge North-Ameriean Grain Corporation.
I should like also to refer to a statement made by the hon. member for Rosetown-Biggar with respect to certain operators on the Winnipeg grain exchange.


Thomas Miller Bell: That was a question;
not a statement.


James Angus MacKinnon: Yes. I believe the hon. member refers in this connection to the brokers. The original Canadian Wheat Board Act, 1935, section 8 (i) passed by the Bennett administration, reads as follows:
In selling and disposing of wheat as by this act provided, to utilize and employ without discrimination such marketing agencies, including commission merchants, brokers, elevator men, exporters and other persons engaged in or operating facilities for the selling and handling oi wheat, as the board in its discretion may determine.
This has not been amended in the revisions of 1939 or 1940. The wheat board, therefore, consider it is required to use the facilities of the trade including the brokers, and it does so. This practice has always been followed by the wheat board, of paying brokerage, the amount of which varies in accordance with the volume of business transacted by the board. During the stabilization operations of the previous government the same principle was followed of paying brokerage on cash grain sales and on the selling and spreading of wheat futures.
I think, therefore, that the hon. member has cast a rather unfavourable light on the situation in describing this practice as one of "assisting a number of grain operators on the grain exchange on a relief basis."


Thomas Miller Bell: That is the view the farmers have.


James Angus MacKinnon: I may add I have been informed that in the United Kingdom where the grain markets have been closed for the duration of the war, the government has recognized the principle of compensating grain brokers for the loss of their occupations and business during the war. In this way they hope to maintain the machinery of the trade so that it may become operative again at the end of the war.
Then, dealing with recent shipments of grain to China, and claims of the hon. member for Qu'Appelle in this connection, I wish to register my objection to the hon. member's rather offensive references to the Jewish people and the Jewish firms-


Richard Burpee Hanson: Is that
necessary?	[DOT]


James Angus MacKinnon: -especially at this very serious time.
I should like to refer to the comment by the hon. member for Qu'Appelle regarding the lack of opportunity to discuss the wheat situation generally earlier in the session. My recollection is that the wheat situation has been thoroughly discussed throughout this session, but it just happens that that discussion has taken place	very	largely	on	theestimates of my colleague the Minister of Agriculture. I wish to	state	frankly	that ithad been my intention to	submit	a	newCanadian Wheat Board Act to take the place of the present one, because we thbught it better to proceed in that way than to have voluminous amendments. We had proceeded to the point where the bill was almost ready for submission to the	house when	it	was
realized that the time required in the house to pass the bill would conflict definitely with the seeding operations under the government's wheat legislation for this year. Therefore it was decided for the time at least to proceed with the amendment to the Canadian Wheat Board Act by order in council. This was done.


John George Diefenbaker: Would the minister clarify some points with which he apparently forgot to deal, when he was referring to the hon. member for Qu'Appelle? Will he tell the committee the source of the wheat shipped to the orient? Did it come from the wheat board with the permission of the government? Under what circumstances did the Canada Grain Export company purchase this wheat? Then, this further question necessarily arises out of the statement allegedly made by Mr. Ladner to the effect that the sale was in Canada's interest. What is "Canada's interest" in the sale of this wheat? What is the meaning of that phrase? Was that Mr. Ladner's expression, or was it the expression of the minister?


James Angus MacKinnon: Of course it was purely Mr. Ladner's expression. I did not intend to read the telegram, until I was asked to do so. However I did read it, word for word.


John George Diefenbaker: But that does not answer my question. Where did that wheat come from? Was it wheat transferred to this exporting company from the wheat board? When did the Minister of Trade and Commerce agree to the export of wheat, if at all? When did the Minister of Trade and Commerce first become aware of the fact that the

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wheat was going to be exported? Finally, in what way would the export of this wheat be to Canada's interest?
Mr. MaeKINNON (Edmonton West): I can only repeat: I made no statement that the sale was in Canada's interest. I merely quoted the telegram.


An hon. MEMBER:: Was the sale in
Canada's interest?
Mr. MaeKINNON (Edmonton West): I am not answering a question of that kind at the present time. I do not consider it relevant. Certainly I do not propose to enter into a discussion as to whether or not a statement made in Mr. Ladner's telegram is approved by me. I merely gave the committee the telegram submitted by Mr. Ladner. In connection with the wheat, my understanding is that the wheat in question was bought by brokers in the usual way.


John George Diefenbaker: What is that?
Mr. MaeKINNON (Edmonton West): The hon. member asks what way that would be. It was bought in the usual way by the Canada Grain Export company from the wheat board.


Richard Burpee Hanson: "The
usual way"-when the wheat board sold that wheat, did they know it was going to be exported to Japan?
Mr. MaeKINNON (Edmonton West): No.


Richard Burpee Hanson: They did not know its destination?
Mr. MaeKINNON (Edmonton West): No; I am infomed that they did not know its destination.


Ernest Edward Perley: What brokers did the wheat board use? It was bought in the pit.
Mr. MaeKINNON (Edmonton West): The wheat in question was bought at Vancouver by the Canada Grain Export company from the Vancouver office of the Canadian wheat board.


John George Diefenbaker: On what date?
Mr. MaeKINNON (Edmonton West): I have not the date here.


John George Diefenbaker: I still have not received an answer to my questions as to whether the government granted an export licence to the Canadian exporting company, when that licence was granted and whether the circumstances were placed before the minister before it was granted.
Mr. MaeKINNON (Edmonton West): The Canada Grain Export company pressed for permission through representatives to make the sale to which reference has been made.


Ernest Edward Perley: When?
Mr. MaeKINNON (Edmonton West): I cannot give the exact time.


Richard Burpee Hanson: Was it not prior to the time the permit system was brought into force?
Mr. MaeKINNON (Edmonton West): Yes;
I was just coming to that. They asked for permission to make this sale, and we refused. This was before the permit system was brought into force. They wanted to make sure that they would be able to get wheat to conclude the sale; therefore they asked us, and we told them that we would do nothing to assist them. Afterwards the permit system was put into force, and since then a permit _was issued for the sale of a certain quantity of wheat in order to fill out a firm transaction that had been completed between the Canadian exporting company and their agents.


Richard Burpee Hanson: The minister said that before they made their commitments for the wheat they inquired of the government if they would be permitted to buy the wheat and export it, and the minister said that that was refused at first. There must have been something done afterwards because they bought the wheat from the wheat board before the permit system was put into effect.
Mr. MaeKINNON (Edmonton West): No.


Richard Burpee Hanson: The permit was refused, and then that attitude was relaxed by the government or by the department. That is the fact. I got that from Mr. Ladner over the telephone on Saturday night. Let us get the facts straight.
Mr. MaeKINNON (Edmonton West): If 1 correctly understand the statement of the leader of the opposition, it does not conflict in any way with the statement that has been made.


Richard Burpee Hanson: I think it does.
Mr. MaeKINNON (Edmonton West): I do not see it that way.


Richard Burpee Hanson: When you read it you will see it.


Mr. CASSELMAN:: In other words, it looks shady from the beginning.
Mr. MaeKINNON (Edmonton West): I am informed that the Canada Grain Export company bought the wheat from the board and applied for a permit to enable them to be sure-they first asked the government if it would permit the sale so that there would be no possible chance of their falling down in delivery.

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Richard Burpee Hanson: What was the answer to that?


James Angus MacKinnon: A
refusal.


Richard Burpee Hanson: A refusal. Then what happened?


James Angus MacKinnon: The permit system was introduced. I am not sure whether the hon. gentleman knows it or not, but it is not in the public interest to explain at this time just why permits were granted for this firm sale that had been arranged after the export permit system was introduced.


Richard Burpee Hanson: The reason is apparent; the heat was put on by Tokyo. Make no mistake about it; that is where the pressure came from, and the government yielded.	.


James Angus MacKinnon: That is certainly not my information.


Richard Burpee Hanson: I think the minister will find that that is so.


John George Diefenbaker: Are we to understand that on a date which has not been given, this company asked for permission to enter into an arrangement whereby it could sell export wheat to Japan, and that the attitude taken then by the government was that it would not consent thereto; that this was prior to the time when an export licence was necessary; that later on the government changed its mind and consented to this company exporting wheat? If that is the position of affairs as outlined by the minister, it is different from the explanation given the other day by the Prime Minister. The Prime Minister is reported on page 3531 of Hansard as having said:
I might particularize a little in reference to that statement.
He was referring to a statement given to the Canadian Press.
Orders had been placed on the part of Japan for the wheat in question before any export permit requirements respecting wheat shipments had come into force in Canada. Shipments were actually stopped at the time because of export permit requirements coming at that moment into force, but on careful consideration of the whole matter it was felt that as the order had been placed before this requirement came into force, those particular shipments should be allowed to proceed. That course, I may add, is in accord with international usage.


Mr. GARDINER:: That is exactly what is stated now.


John George Diefenbaker: The situation is altogether different according to the explanation given by the minister. His explanation is that the Canadian exporting company

endeavoured to ascertain from the government, before export licences were required, whether it would be allowed to enter into an arrangement or contract with certain oriental interests for the sale of wheat. The minister has just pointed out that the reason why this company took this precaution was that it wanted to be assured before it purchased the wheat that the market it had been able to establish would not be lost on account of any action on the part of the government. Then the minister went on to say that after that request was turned down, further representations were made, and thereafter a permit was given.


Mr. HQMUTH:: They were pressed for it.


John George Diefenbaker: That pressure was brought to bear, apparently not from Japan but from elsewhere, and in consequence of that pressure an export permit was granted. I should like the minister to explain the divergence in. the statement made the other day by the Prime Minister and the explanation the minister now gives. I should like to know also the price per bushel paid to the wheat board by the exporting company and the price received by that company under the contract with the orient. That information must be in the possession of the government.


James Angus MacKinnon: I am told it is not.


John George Diefenbaker: What manner of thing is this? The government did not make the sale; the government turned the sale over to a private corporation. From the telegram that passed between the minister and the gentleman named a while ago, I would infer that this company was not engaged. in this transaction for philanthropic reasons. Surely before the permit was granted, the government would want to know what price was going to be paid by these Japanese interests for the wheat. Surely in view of the losses which have been suffered by the wheat board the government, if it was going to permit the transaction, would itself make the contract with Japan and make for the people of Canada any profit which was available. I am absolutely opposed to the transaction; but if there is any justification for it, why place it in the hands of a private corporation? What is the justification? What is the explanation?
The minister has said that the permit covered a certain number of bushels. How many bushels of wheat did the permit cover? Does the shipment made at this date complete the deliveries under that permit, or is any further shipment of wheat to be made to Japan or elsewhere in the orient? Finally, why is no

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explanation given for this wheat being shipped in bags? Was there any justification for the statement made by the hon. member for Qu'Appelle, that the reason for the bags was to make transshipment possible after the arrival of that wheat in'Asia? These are matters the people of Canada want to know in detail. They want to know the full transaction as it is and will not be satisfied with telegrams received from outside the house from interested parties. They want an explanation by the minister on whose authority the permit was granted.


James Angus MacKinnon: The government would not know at what price cash wheat was being sold between a private company and the purchaser.


Ernest Edward Perley: What price did the board receive?


James Angus MacKinnon: I can get that information. I am ready and willing to give all information that is sought for in an honest attempt to get proper information regarding this transaction.


Richard Burpee Hanson: Is the
minister imputing motives to the hon. member for Qu'Appelle? If he is he had better take that back immediately.


James Angus MacKinnon: I would personally much sooner subject myself to criticism from the opposition for failure to answer questions that they ask than give information which I may have on this question and which I believe, and others believe, it is not in the public interest to go into fully at this time.


Mr. MacINNIS:: It seems too bad that this discussion should have developed into such a fiasco in this committee because, after all, it is a serious matter. I think, however, that the explanation of the transaction should have been left to the Secretary of State for External Affairs, where I think it belongs. There are certain reasons why this permit was granted, and I think the Minister of Trade and Commerce would have been well within his province to have said that he was leaving the matter to the Secretary of State for External Affairs. The Secretary of State for External Affairs should, in my opinion, take the leaders of the other parties in the house into his confidence with respect to this transaction and make an explanation which, whether they agreed with the shipment or not, would, I think, convince them that possibly there was nothing else in the circumstances to do.


James Angus MacKinnon: I understand-perhaps I am incorrect-that hon. gentlemen opposite are pretty well informed with regard to all the circumstances surrounding this particular wheat shipment.


Richard Burpee Hanson: That is not correct so far as the leader of the opposition is concerned. I knew nothing about it until on or about the 5th of June when I first heard about this transaction. The Prime Minister in no way communicated with me other than what he said in reply to the inquiry I made on the 5th of June for information. That was the first time I heard of this transaction.


@Acting Chair(man)? of Committees of the Whole: Order. The hon. member for Vancouver East (Mr. Mac-Innis) has the floor.


Richard Burpee Hanson: I am
sorry; I thought he had finished.


Angus MacInnis: The Minister of Trade and Commerce in answer to a question whether there were other shipments going to Japan besides wheat, whether any metals, such as nickel or copper, were being shipped, stated that this shipment of wheat was the only commodity going to Japan. I would ask the minister whether any lumber is being shipped to Japan at the present time?


James Angus MacKinnon: The export permits are concentrated in the Department of Trade and Commerce at the present time. I know of no permits having been issued for other commodities than wheat. I shall make inquiries just to confirm that, but I am sure I am correct.


Richard Burpee Hanson: Just on the point as to what the Prime Minister said, if hon. members will look at page 3532 of Hansard they will find that I made inquiry, and the Prime Minister then made his statement. With that statement I was a bit puzzled because I could not understand how any private firm could make a commitment of this kind without obtaining the wheat from the wheat board. I went on to say:
Mr. Hanson (York-Sunbury):	I may be
incorrectly informed, but my understanding of the situation is that no one can ship wheat without the consent of the wheat board or without obtaining the wheat from the board. This is a large transaction, involving half a million bushels. The wTheat board must be in the picture somewhere.
Mr. Mackenzie King: My information is that it is not.
I have no doubt that the Prime Minister made that statement in absolute good faith. I would not suggest anything else. But the information given to me was wrong. The

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wheat board was in the picture. Canadian wheat is going to Japan, and I say that is wrong, no matter who ships it.


James Angus MacKinnon: Just following that up, I wish to say that I gave the information to the Prime Minister that the Canadian wheat board had nothing to do with the sale of wheat to Japan.


Richard Burpee Hanson: That is a question of interpretation.


John Gordon Ross: Certain hon. members do not seem to understand how a private corporation can get wheat to-day from the wheat board and have it in position to ship.


Ernest Edward Perley: To Japan.


John Gordon Ross: That is a different matter altogether. As I understand the operations of the wheat board to-day, they are willing to sell cash wheat to any exporter. He moves that wheat into position on the seaboard where it can be sold by him to an importer of any other country in the world provided that the government of Canada permits that wheat to be shipped to that country. The wheat that Great Britain buys in Canada is handled in identically the same way. It is sold to exporters, and these exporters move it into position in order that the wheat will be in a position to ship when they get bids from the cereals import board. That is why they use the futures market in the handling of grain.
As regards this wheat which was sold, we all know, I think, that there were important circumstances by reason of which a permit for shipment was given. We should know, too, that our sister dominion of Australia has been continuously selling wheat to Japan, and also to northern China, where this wheat is going. The hon. member for Qu'Appelle stated that because it was shipped in bags it would be transported through China to some enemy country. That is not a proper supposition, because in northern China there are many small mills, and in order to distribute this wheat to those mills it was loaded in bags at Vancouver and shipped to China.


Charles Edward Johnston: And
shipped in Japanese boats.


John Gordon Ross: Yes, it was shipped in Japanese boats. I am not questioning that part at all. Apparently a permit was given to ship wheat to northern China in Japanese boats, and the government must assume responsibility for that. But so far as the private corporation getting this wheat from the wheat board is concerned, the wheat board are willing at all

times, as I understand it, to sell any amount of wheat to any Canadian exporters who will pay for it, and they move it on into position and make their own deal with the importers in other countries. The wheat board, of course, would know at what price the company bought from them, but they have no way of knowing what it was sold for.


Ernest Edward Perley: They could have, though.


John Gordon Ross: I do not think so. It was sold, no doubt, in competition with Australian and Argentine wheat.


Ernest Edward Perley: Surely the wheat board should know.


John Gordon Ross: Offers are made for wheat in this country by importers in the other countries. How would the wheat board know what the importers were offered?


Ernest Edward Perley: It seems to me they
should.


John Gordon Ross: That may seem so to the hon. member, but not to me.


Ernest Edward Perley: Why, then, did the
minister put out this stuff to show that Liverpool is offering wheat at this price at the seaboard, which is fifteen or twenty cents more than the farmer is getting?


John Gordon Ross: Those are offers by wheat exporters.


Ernest Edward Perley: Pardon me; those are
not offers made to Canadian exporters. It says. "Liverpool offers".


John Gordon Ross: Yes. Offers
made to Liverpool of wheat.


Ernest Edward Perley: By Liverpool, for wheat.


John Gordon Ross: No-.


Ernest Edward Perley: Yes, that is what it says.


John Gordon Ross: As a matter of
fact, the Liverpool exchange is not operating. They are not offers from the Liverpool exchange. These offers come from Fort William, from Montreal, from Boston, from New York, and from other seaboard points, so far as that goes, and my hon. friend was trying to figure out the price of wheat sold by the Canadian wheat board by saying, "Here are the amounts of these offers." That is one way he was going to figure it out. Another way he was going to figure it out was, that the customs figures show so much wheat sold at a certain price. [DOT]


Ernest Edward Perley: The minister's statement said that.

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John Gordon Ross: Yes; it showed so much wheat sold at a certain price and therefore that is the price which the wheat board got from the cereals import branch for wheat. I may tell my hon. friend that he has not the faintest chance of finding out from any of those figures.


Ernest Edward Perley: How does the hon. member know?


John Gordon Ross: I do not set myself up as an expert, like my hon. friend.


Ernest Edward Perley: I do not set myself up
as an expert.


John Gordon Ross: But I think
I know the way wheat is handled.


Ernest Edward Perley: The hon. member ought
to, from the experience he has had.


John Gordon Ross: As I understand it, our wheat board sell a certain amount of wheat to the cereals import board on future delivery, not through the exchange; but they agree to sell at a price to the cereals import board, and after that has been done, the cereals import board at times asks for delivery of that wheat.


Ernest Edward Perley: Where?


John Gordon Ross: Montreal, Saint John, Halifax, Quebec-any of our ports. In the meantime the wheat board has sold to the ordinary exporters in Canada a certain amount of wheat which they have moved into position so that it can be delivered; and in selling that wheat-I think this is common knowledge-they sell it for cash, and the exporter sells back a future to the wheat board. The wheat is put in position, and then the cereals import board deals with the exporter of wheat, makes its price, and buys the cash wheat from the exporter. That is the seaboard price about which the hon. member is speaking.


Ernest Edward Perley: What does the board do
with the option in May?


John Gordon Ross: The option is then traded back by the cereals import board.


Ernest Edward Perley: By brokers?


John Gordon Ross: It does not
matter whom it is by; it is traded back by the cereals import board to take up the short option of the exporter.


Ernest Edward Perley: And on the option they
bought, this broker may deliver in the next two or three months, or whatever future month it is?


John Gordon Ross: I beg the hon.
member's pardon?


Ernest Edward Perley: I say that, on that option the board bought, the clearing house may deliver that cash wheat on it in the future month they bought?


John Gordon Ross: No.


Ernest Edward Perley: Well, it has to be traded
through the clearing house, has it not?


John Gordon Ross: It is traded by
the cereals board back through to shut out that option, and the net result is, no matter what price they paid at the seaboard, nobody knows what price the cereals import board paid the Canadian wheat board for that wheat. That is the reason why you cannot find it out though. You may keep on trying.


Ernest Edward Perley: I am just taking the minister's statement for it, when he said it was sold for considerably over the market price.


James Angus MacKinnon: Mr. Chairman, I made no such statement.


Ernest Edward Perley: That is the statement. I
believe that Hansard will bear it out.


John Gordon Ross: I think the
statement was made with regard to the 100 million bushels sold a year ago; it was not made with regard to this 120 million bushels.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.


John Gordon Ross: When the committee took recess I was endeavouring to explain the operations of the sale of wheat to the British cereals import board. I was also endeavouring to answer some of the points raised by the hon. member for Qu'Appelle.
The next point he raised was with regard to the interest paid by the board to companies purchasing grain at the country elevators. That is part of the contract which is made in connection with the handling of wheat between the grain company and the board. It is at a higher rate of interest, I would think, than that at which the government could borrow money. But that grain is at the risk of the elevator companies with regard to grade and weight until such time as it is delivered at the terminals. If any loss comes to them it is the gram companies that lose, not the wheat board. The wheat board guarantee the amount of money paid, a fixed


Ernest Edward Perley: Will the hon. member give the dividends these companies have paid within the last year, and what they are earning now from the board in connection with the storage of grain?


John Gordon Ross: According to this survey, they have not paid1 any dividends on any of their issues in the last year.


Ernest Edward Perley: In 1940-41?


John Gordon Ross: This is the 1940 survey of securities, and according to this there have been no dividends paid at all. My hon. friend has suggested that because this offer was made, the government should have taken over firms that apparently have not been able t-o earn dividends for ten years or more, and pay them 6 per cent on their invested1 capital. The hon. gentleman seems

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to think that these companies have been making a great deal of money under the present arrangement, and now he wishes to give them in addition a guarantee of 6 per cent on their total invested capital for the duration of the war.


Thomas Miller Bell: I did not hear for which year the survey was made. Was it 1940, and would that be for 1939 dividends?


John Gordon Ross: Up to 1940. This is the 1940 survey, the latest I could get, and I obtained these figures just to-day.


Thomas Miller Bell: That would be issued in June of last year?


John Gordon Ross: In 1940. In any event the situation is that for ten years or more no dividends were paid. Everyone knows that in 1937 and 1938 these companies of whom my hon. friend speaks had huge deficits; not only did they not pay dividends, but they had deficits. In a year like 1937 that was bound to be the situation; yet the suggestion is made that for the duration of the war we take over these companies and guarantee them 6 per cent. We might have another year, or more than one year, like 1937 before this war is over. In that event this government, if it adopted this suggestion, would be loaded with a tremendous charge over and above the expense it has to bear to-day in handling the grain business of this country.


Ernest Edward Perley: If the hon. gentleman will look up the record he will see that I suggested that the government take over the whole elevator system for the handling of grain.


John Gordon Ross: My hon. friend read the telegram from these companies containing their offer, and said he would like to know why the offer was not accepted.


Ernest Edward Perley: Is that a suggestion that the government should accept it? I asked why they did not do so.


John Gordon Ross: My hon. friend can quibble about it if he wishes, but I think anyone who understands English will understand what he intended to say. Then the hon. gentleman, who has been talking about rackets, suggested a real one. He suggested that because the wheat board had complete jurisdiction over the handling of wheat in this country, so that no one can ship a car or put a bushel in an elevator or move wheat from one elevator to another without permission from the board, and that because in the ordinary course of handling wheat futures have been used, the wheat board should take the position that it had an absolute, strangling
monopoly on the grain trade and should use that power to corner the grain and put these people in a false position.


Ernest Edward Perley: The hon. member is drawing on his own imagination.


John Gordon Ross: No, I am not; that is exactly the suggestion of my hon. friend as it appears at page 3651 of Hansard. Then the hon. gentleman said that the policy adopted by the board for the coming season had not met with the approval of western producers. The policy of the board is an act passed by this house, which has been in effect for some time. We here are responsible for what the board is doing. We are responsible for the fact that the board is handling futures. We are responsible for the fact that the board is handling wheat through the ordinary channels; we have directed them to do so by an act of this house, and they can do nothing else.
During the discussion the other evening a point was brought out by the hon. member for Acadia, I believe, in connection with the order in council, which he thought contained a new provision giving certain rights to landlords, mortgage companies and others which they did not possess a year ago. I believe that is correct. Last year nothing of the kind was necessary, because there was no restricted delivery; we were taking the whole crop. Some provision must now be made to protect these people during this crop year, but I do not believe the method followed in the order in council is the proper way to handle this problem. I do not think the landlord or the mortgage company should have the right to receive a portion of the first wheat to be delivered, and I believe some change should be made in order that the farmer may have a chance to pay his harvesting expenses before any share of the crop goes to the landlord, mortgage company and so forth.
There is another point, which I do not think the hon. member for Qu'Appelle dealt with, in connection with the amount of wheat the farmers of western Canada can deliver this year. We have said that the farmers of Canada will be allowed to deliver only some 230,000,000 bushels of the 1941 crop, which works out at about 222,000,000 bushels for western Canada. We have said also that a certificate will be given the farmer for his protection in case the wheat is finally sold for a higher price. Having limited the number of bushels the farmer can sell this year; having set up the remainder of the wheat as a reserve to be held during the war and sold as needed, we are placing ourselves as farmers in this position. We are allowing the government to say, "We will take only 230,000,000

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bushels of your wheat this year, and if we should sell more wheat than that, it will come from the reserve." Under those circumstances I think it only fair to assume that the interim certificate should be worth something this year; and that whatever is obtained from the sale of this wheat from the first of the crop year until the 230,000,000 bushels is sold, less the actual cost of selling that wheat, should go to the farmer. It belongs to him; it is his wheat that is being sold. When the quantity is limited, then he should be given all we can get out of it. I may want to ask some questions later on. If the hon. member wishes to ask me any further questions, I shall be pleased to answer them.


Ernest Edward Perley: I do not think the hon. member for Moose Jaw has made a very great contribution to the discussion. He tried to help the minister out before six o'clock, and in my opinion he got farther into the mire, and much more confused.
I should like to state briefly my position with respect to the matter which was under discussion this afternoon. I believe the minister went out of his way to criticize me. I am ready to substantiate anything I have said. Nothing has been said this afternoon to clear up the situation.
With respect to the deal I would say that on the afternoon of the 6th I had a telephone call from western Canada-much farther west than Winnipeg-in which it was stated that a copy of the Calgary Herald, which I now hold in my hand, was in the air mail addressed to me. They wished that I would see it and bring it to the attention of parliament as soon as possible. It so happened that I was waiting in my room at that time expecting the house to go into committee to consider the minister's estimates. I would state further that while I was in my room I received a long-distance telephone call from Winnipeg, in which it was pointed out that there was a good deal of excitement concerning the statement that had been made the day before, namely the 5th, in answer to the question asked by the leader of the opposition.
I wish to assure the committee that I had no motive other than the very best in mentioning the matter in the speech I made. I ' had nothing but the best intention.- The matter had come to my attention during that afternoon not more than half an hour before I spoke. I would ask the government who it was that first brought this matter to their attention. Will they table the correspondence or the telegrams with respect to this shipment of wheat from Vancouver on Japanese account?
I have in my hand the Calgary Herald of June 5, the headline of which states:
Alberta grain for nazis? Japanese vessel loads at coast; reich supply moves via Siberia.
And the text of which is as follows:
Is Canadian wheat, specifically Alberta-grown wheat held in coast terminals and owned by the Canadian wheat board, reaching Germany through Japan? This represents a figurative but worrying question mark dangling before the grain trade and appearing, by coincidence, almost simultaneously with Associated Press reports from Tokyo (June 3), to the effect that foodstuffs- are flowing into Germany via Japan and the trans-Siberian railway at the rate of 1,500 tons daily.
Without offering any comment, grain circles here state they know the wheat is being loaded from Vancouver. Ottawa agrees with this. Over the week-end, between 3,000 and 4,000 tons, ordered ten days ago

Ten days ago, it says here, by a certain firm.
-by a large firm of Japanese importers, went into a Japanese freighter. Shanghai is given as the destination.
In this regard inquiries at Ottawa brought word from the deputy minister of trade and commerce that "we have satisfactory assurances the wheat will not get to Germany".
Then it goes on:
At the same time, it was stated the cargo is destined for north China, for the purpose of feeding people there. Vladivostok, hundreds of miles north of Shanghai, is the terminus.of the trans-Siberian railway.
Apart from the initial order, three other Japanese freighters are at Vancouver ready to load wheat, while the first boat takes on additional mixed cargo at New Westminster.
Available information indicates the wheat was ordered out of the Midland Pacific terminal at Vancouver, but this is denied by John Whittle, company representative there.
Calgary offices of the company explained they had no knowledge of the situation, as -any order issued by the Canadian wheat board at Vancouver would not be brought to their attention.
Then in conclusion:
Exactly what grades are loaded and on order has not been stated, but the first has been sacked and presumably others will be similarly handled.
I received the telephone call pointing out that this article was in the mail addressed to me, and I believe I received it in sufficient time to bring it to the attention of the house. However, I did not do so. I wish, however, to refer to the other telephone message, and in that connection I quote from the note I took of the telephone message, and which I have before me now. My note is to the effect that certain Canadian firms, giving their names-and I named the firms-stated that they would have nothing to do with that deal of supplying any firms with grain consigned to Japan. In good faith I brought that matter to the attention of the house.
IMr. J. G. RossJ

Supply-Trade-Canada Grain Act
Some discussion has taken place on the point this afternoon, and I do not know whether or not it has been cleared up. There has been some confusion respecting the board's position. They certainly held wheat out there. We do not know. The transaction started in February, and was not completed until May. I know by the way they act, and from the description of their operations given by the hon. member for Moose Jaw, that they certainly deal in futures, or have their brokers or agents deal for them. This deal must have been put through the pit, and therefore I do not believe that the statement made this afternoon by the minister clears up the matter.
The minister made an attack against me this afternoon, and I should like to answer him at this time. I would ask him, first, what assurance the government had that the Canada Grain Export company in Vancouver was not acting on behalf of some international firm. Is there any definite assurance that they were not? Apart altogether from the question as to who operated for the board, that is a difficult question to answer. Has the government any knowledge, or would it care to make a statement respecting other Canadian firms I have mentioned who have refused to have anything to do with such deals in connection with wheat going out from the Pacific coast, which may go through to Japan? Was the government informed that this grain was to be shipped in bags? We should have an answer from the minister on that point, because it was indicated that it was going somewhere. As I have pointed out, it was going to a Siberian terminal, after being transhipped at Shanghai.
Then, did the government know that Japanese bottoms were on the way to Vancouver early in May to take this wheat? I suggest that the minister through his advisers should inform us as to what brokers acted for the board in connection with this deal. As I say, it began in February and was completed in May.
This afternoon the minister referred to a telegram he had received from Bunge North-American Grain corporation. In that telegram it was pointed out that the only shipment they had made recently was made on February 11. Where did they get their wheat on that date to ship from Canada?
Then, the minister made reference to Jewish firms-that is the way they have been described. With respect to these firms- they are termed the big three; his officers will know what I mean-I should like to inquire just how much Canadian wheat has
been delivered to them in the last two years by the wheat board for export. It might be interesting to know if they have shipped anything in the last twenty months. Reference has been made to the telegram from Mr. Ladner, and the statement that he was a supporter of the Conservative party is apart altogether from the question. So far as I am concerned, I do not care who he is or what he is or what party he supports. If I think any firm is doing anything of the kind to which reference has been made, I am prepared to oppose it, or bring the matter before this committee. I do not care whom he is supporting; that has nothing to do with this question.
The minister tried to answer some of the questions to which I referred, but I do not think he did it very satisfactorily. I referred to the liability to the agents, and I wanted to know what it was. A statement was tabled in January, 1940. My reference to it was as plain as the king's English could make it- what is it now, the guarantee to the agents of the board? That is what I wish to know, namely, the liability referred to in this report. Reference was made to the appendix to the resolution with respect to that guarantee. I was justified in bringing that to the attention of the committee. It distinctly says on page 48 of the report that there is an outstanding guarantee. The minister tried to indicate how the board was operating. I wish to know if those guarantees are guarantees of the accounts of brokers, and I wish to know what brokers. He says that the board are not dealing in options, and consequently they must have brokers trading for them in options. They are buying and selling, and the trades have to be completed. We should like to know how much this guarantee is at the present time.
There has been a reference to price, and we have had the statement of the hon. member for Moose Jaw with respect to this price matter. I do not think there should be any great secrecy about it. The minister, when he has reported these sales from time to time, has given the committee the impression -in the case of one sale in particular he said it was considerably over the then market price or the 70 cent fixed price. I got the impression that it was the same with respect to the 120,000,000 bushels. However, I will take the minister's statement that it was not. The hon. member for Moose Jaw tried to clear the matter up this afternoon, but I think he was a little confused. I will read the statement put out in the bulletin of May 17:
The export of wheat in April amounted to 20,322,400 bushels at a value of $17,393,126 or an average of 85-6 cents per bushel.

Supply-Trade-Canada Grain Act
That is at the point of shipment, I presume the eastern terminals. That is as plain as the king's English can make it. The interpretation I place upon it is that there were
20,000,000 bushels of wheat sold for $17,000,000, which works out at 85 cents a bushel. This afternoon the minister said he did not know who represents the cereals import committee. The board has brokers dealing with the representatives of the cereals import committee, and therefore the board should know with whom the brokers they employ are dealing. If they do not, how do they know that the wheat their brokers or their agents are selling in the pit is going to Britain? I do not think the statement of the minister cleared that up at all. The hon. member for Moose Jaw in referring to shipments made the statement that in Australia there is no embargo. They are still shipping a very small amount. I have the figures. He did not then refer to the United States, although he did so this evening. The price in the United States is the restriction. Those who want wheat come to Canada *because it costs too much in the United States.
With respect to the sale of 120,000,000 bushels that the minister announced a little while ago, he said that that would go over the year for the period ending May, 1942. He should tell us whether or not the futures were sold, because he stated it was futures. Then we need to know what brokers were employed. Certainly one broker would not handle the whole transaction. It would be very apparent on whose account it was. We should have a list of the brokers used, how much brokerage was paid, what fees were paid and when they were paid. I do not think it would be divulging any great secret if we had the price.


John Gordon Ross: Does the hon.
member think there were brokers in that?


Ernest Edward Perley: The minister can answer
the question. He said that they sold futures, and he has stated here that although they have a membership the board did not sell futures; they employed somebody to do it. Therefore I would presume that they would employ brokers to do it. A deal in futures would have to be cleared through the exchange.


John Gordon Ross: We sold future
deliveries of 120,000,000 bushels direct to England.


Ernest Edward Perley: Futures.


John Gordon Ross: Guaranteed to
deliver.


Ernest Edward Perley: It is futures, he said.


James Garfield Gardiner: A period of months.


Ernest Edward Perley: We want to know in what
months. If it was traded through the grain exchange, they would have to deal in certain months.


John Gordon Ross: It was not
traded through the Winnipeg grain exchange.


Ernest Edward Perley: Answer me this then. The hon. member for Moose Jaw seems to be taking the position of being the mouthpiece for the minister. There is a statement in this report that the board is holding a certain amount of this 570,000,000 bushels in cash wheat and futures. What about that?


John Gordon Ross: That could be
true; what of it?


Ernest Edward Perley: I am asking the hon.
member. He says they have not any futures.


John Gordon Ross: I did not say
anything of the kind. I said that the board had sold for future delivery 120,000,000 bushels of wheat to the cereals import committee. I did not say that they sold it as futures on the Winnipeg grain exchange; I said that they contracted for future delivery of 120,000,000 bushels of wheat.


Ernest Edward Perley: They did not use brokers?


John Gordon Ross: No.


Ernest Edward Perley: Supply-Trade-Canada Grain Act
the farmers but to the country. It is not sufficient to give us a detailed statement only once a year.
With respect to coarse grains, the regulations are to all intents and purposes the law, and I think they will be carried out this fall. Coarse grains are being brought under the operation of the board, and I think a definite price, a minimum price at least, should be fixed for barley and oats. If they cannot take delivery, the farmers should know exactly why they cannot, because I know the farmers are willing to do their part. It seems to me that we are going to have an overabundance of coarse grains this year as a result of the policy of the Minister of Agriculture to reduce wheat acreage and bonus land seeded to coarse grains. We should have some definite information with respect to that.
The hon. member for Moose Jaw has made one or two references to the risk. I have answered that. He also referred to the nine firms which offered their facilities for the duration of the war. I think, before this year is out, the government will realize that the amount involved will be $500,000,000, and I venture the prediction that before the end of October they will be in a frame of mind to think that they should have taken over the whole physical handling of the wheat. It would save several million dollars in storage charges.
We should also have a statement from the minister as to the terminal at Port Arthur leased to McCabe Bros, and the one rented to the United Grain Growers at Vancouver. How much have McCabe Bros, earned from their elevator at Port Arthur in the last six months, and how much have the United Grain Growers earned from the government elevator at Vancouver? How much has the board paid to these two firms? The minister should also give us a statement with respect to the government-owned elevators, stating the exact position with regard to them.	.


Mr. DONNELLY:: In reply to the hon.
member who has just spoken (Mr. Perley), I should like to answer a few of the questions he has asked. First of all, I will take the last point he brought up, and this is the second time he has referred to the elevator at Port Arthur rented to McCabe Bros. The hon. member for Rosetown-Biggar also referred to that the other evening. I remember being in Fort William some years ago and speaking to the gentleman who is in charge of our internal storage elevators. At that time he told me he was losing money in this elevator at Port Arthur on account of the fact that the grain act was changed in 1929 and that, instead of being able to mix the different grades", they

had, from then on, to keep them separate. Then, he said, "We have an export grade, and we also have a grade that we buy by. The grade that we buy by is what we call the standard grade, and the grade that we sell by is called the 75-25-seventy-five of the average run of No. 1 northern as it comes in, and 25 per cent of the standard grade, which is the lowest sample that one can get out of that grade-with the result that the export grade is much higher than the standard grade." The result is that this elevator, the government having no elevators out in the country, would get only what might be called the mistakes in grading. If a sample of wheat was graded No. 1 northern, although, to look at it, it was only No. 2, the elevator company would decide that "that is no use to us; we will ship that to the government terminal at Port Arthur." That went down all through the grades, and the result was that this elevator was getting only the lowest which could pass that grade, and when they shipped the grain out they were unable to maintain their grades, and lost money. This happened after the grain act was changed in 1929.
The result was that, during the regime of Mr. Bennett, he concluded that if the government were going to lose money by operating the elevator, they might as well rent it. Therefore they called for tenders and rented it to McCabe Bros. From 1931 or 1932 it was rented continually at the same rate. The lease expired, I believe, in 1938, before the war broke out, and the government renewed the lease. That, of course, was a piece of good fortune for McCabe Bros., because since the outbreak of the war, grain storage space has been at a premium. But what is the government to be expected to do? Is it expected to break its contract and cancel the lease just because McCabe Bros, are making money out of it? I do not believe that anyone would seriously ask the government to cancel a contract which was made in good faith before the war began, merely because the lessees are making money out of it.


Mr. ROSS (Calgary East):: When does that lease expire?


James J. Donnelly: I am told that it goes for six years.
It may be that some changes are necessary to which I shall refer later, and which might offset some of the profits which grain storage firms are making. But I contend that this particular contract was a legitimate one, entered into at a time when no great amount of money was to be made out of the operation of terminal elevators. It is pretty far-fetched

Supply-Trade-Canada Grain Act
to ask the government now to cancel its contract in order to prevent these people from making money.
One other matter which has been mentioned, and to which I wish briefly to refer, is the demand for the closing of the grain exchange. I listened to the debate the other night, and everyone who rose in his place in this chamber said that we must close the grain exchange. I am not a champion of the exchange, but I have been growing grain for the last thirty-six or thirty-seven years, and during the whole of that time I have been hearing the cry, "Close the grain exchange; they are a lot of rascals down there in Winnipeg." It has long been a favourite pastime to call for the closing of the exchange, much as one hears people talking about the "big shots," the financial interests which are supposed to have the country by the throat, and the predatory banking interests. It is always a favourite sport to talk about these things. Yet I have never heard a man give a convincing reason why the grain exchange should be closed.


Ernest Edward Perley: Did the Turgeon commission not say that it should be closed?


James J. Donnelly: Never mind the Turgeon commission. The hon. member may give me any reason he can think of when his turn comes. I can give him some reasons against closing it. I have one right in my hand. Here I have two tickets for wheat sold in May. One lot of wheat was sold to the board, from whom I got 55} cents. Here is another ticket for wheat I sold to the grain exchange, and for which I got 57J cents.


Richard Burpee Hanson: Were both sold at the same time?


James J. Donnelly: It is going to take a lot of talk to make me believe that the exchange has not played a useful part.


Richard Burpee Hanson: Were both lots of wheat sold on the same date?


James J. Donnelly: The sales were about a week apart.


Mr. QUELCH:: Did the hon. member get a participation receipt from the grain exchange?


James J. Donnelly: No, I did not, but I have had a lot of them, and the hon. member can have them if he will give me one-half of the difference between what I received on those two transactions. There is, in fact, 2} cents difference; if the hon. member will give me one cent a bushel, I will let him have them all. As I have said, it would take a lot of talking to persuade me that the grain exchange
has not played a useful part, and I believe that my opinion is held by every other farmer in western Canada who is dealing in or selling wheat when he obtains that advantage by trading through the grain exchange.
Another consideration which occurs to me is this. If at the present time you close down the grain exchange, what are you going to do with your coarse grains? Where are you going to sell your flax, barley and rye? Presumably you will have to appoint a board to take them over. We shall have to have some facilities to handle these coarse grains if the exchange is closed.
There is no doubt that the grain exchange has played a useful part in the past. It has kept down the spread between cash wheat delivered at Fort William, and street wheat. Without it, the man buying wheat out in the country would have to purchase it on his own gamble. What is it going to be worth when it gets to Fort William if you do not have a grain exchange to sell the wheat for you? You must have some organization of that kind so as to narrow the spread. If you do not have it, what would be the result? Well, you buy wheat to-day, and I might not be able to get it to Fort William for two months. At the end of that time the price of wheat might be down twenty cents, and I would have to take the difference in the spread between cash wheat and spot wheat down in Fort William. Anybody who has looked into the matter knows that in this connection the grain exchange has played a useful part in the past.
Not only that. If a committee such as the hon. member for Qu'Appelle wants is set up, and it calls before it some of the members of the grain exchange, I believe it will be found that the board has been using the exchange to keep down storage costs. Mr. McFarland handled the problem in that way; he dealt in futures; and these people have to deal in futures sometimes in order to reduce the cost of storage in our terminals. There is no doubt about that.


Ernest Edward Perley: The minister said that they do not.


James J. Donnelly: Well, you will find that they do deal in futures in a certain amount.
I wish to refer to another matter, namely storage charges. Last year, when speaking in this chamber, I said, referring to storage charges, that the elevator companies would be making this year, at the then level of storage charges, somewhere in the neighbourhood of $50,000,000, and that the farmers

Supply-Trade-Canada Grain Act
were going to get 50 cents a bushel for 400,000,000 bushels, which would be something like $200,000,000. The hon. member for Rosetown-Biggar the other night said he thought my figure was exaggerated. The Minister of Agriculture in speaking here not very long ago, referred to the fact that the government had expected to have
570,000,000 bushels of wheat in storage at the end of July, and said it would cost the government $50,000,000 just to store that wheat, and there are many other charges besides storage when you take in wheat. Besides that, there are 230,000,000 bushels of wheat to go through the elevators this year, because we are going to take 230,000,000 bushels.
The farmers are going to pay a certain amount; they pay it when they sell their wheat on the street, for the weighing, grading, elevating, loading in cars and shipping. Not only that, but there is also the elevating of this wheat at the terminal elevators. There is the cleaning of the wheat, and what is made from drying and work of that kind. Therefore it is easy to see that this year there will be between $60,000,000 and $65,000,000 made by these people; there is no doubt about that. I still maintain that although we reduced the storage charges last year from one-thirtieth of a cent to one-forty-fifth of a cent a day, we did not reduce them enough; we should have reduced them still further This one cent we spoke of last year for selling our wheat is a charge which should not be allowed; it should be cut down considerably; it is entirely too much. That is the reason why one hears throughout the country to-day the cry going up, "Close the grain exchange." From whom? It was started by the elevator companies. Why? Because the elevator companies get that one cent for selling the wheat which formerly went to the grain exchange. All they do for it is to make out your participating ticket when you go in, and send that off. It is true that it might be a good thing for the wheat board to open up a sales department and take over all the selling of wheat. But I cannot see any reason why, at the present time when farmers are living from hand to mouth and making sacrifices, and are down at a low ebb and asked to curtail their production, the grain trade should not be asked to reduce some of their charges.
The chief complaint we heard the other night was as to the price of wheat. All said that the price was too low. Being a farmer myself, of course I should like to see it much higher. I should like to see it just as high as does any other hon. member; you cannot make me mad by raising the price of wheat. There seems, however, to be a misconception

as to what we are getting for our wheat. Some said they wanted 85 cents; some, 95 cents; let us see what we are getting and what we are going to get as wheat growers. First,. we have 70 cents guaranteed as a minimum payment.	*


Mr. NICHOLSON:: At Fort William.


James J. Donnelly: Yes, and then we get a. participating certificate with which I shall deal in a moment. Then the government says,. "You must cut your acreage so that you have only 65 per cenit of last year's, and on that basis the production will be about 230,000,000 bushels." And they said, "To the people who cut down their acreage by sowing coarse grains or grass or by summer-fallowing, we will give $35,000,000 in the way of assistance." If you divide $35,000,000 into 230,000,000 bushels, that means fifteen cents a bushel. Anyone who lives up to what the government ask them to do will get another fifteen cents a bushel. The scheme has this advantage, that whether you get wheat or not, whether you have a poor crop or not, whether you are frozen out or the grasshoppers eat you out or you are dried out, if you reduce your acreage as you are asked to do, you will get an average of fifteen cents a bushel on the average yield whether you have an average yield or not. That makes 85 cents a bushel.


Richard Burpee Hanson: Does it not cost something to get that?


James J. Donnelly: You will have to summer-fallow and sow coarse grains anyway.


An hon. MEMBER:: Not that much.


James J. Donnelly: Perhaps not. Then the government say also, "There are certain parts of Saskatchewan that have been having no crop for some years, and we are going to help these people to whom nature has been unkind by drought or grasshoppers or hail or some other condition." Accordingly they have what is called prairie farm assistance or the acreage bonus. That has been provided; it cost in one year, I think something like $12,000,000; in another year, $8,000,000 or $9,000,000. If it averages about $10,000,000, that means another five cents a bushel given to wheat growers in western Canada on account of the failure of the wheat crop. That is given, not to the man who has a lot of wheat, but to the man who has no wheat; it is paid on an acreage basis. That brings it to 90 cents a bushel.
We come now to the last, namely, our participating certificates. We are told that this year it will be different from last, that on August 1 we are to have a cut-off; that all the wheat we get up to that date will be considered a government responsibility and

Supply-Trade-Canada Grain Act
put on one side, and that, from that on, all the wheat that comes in will be dealt with as this year's crop. In other words, all the money we get for wheat after August 1 will be on this 230,000,000 bushels, that is to be kept distinct and separate. If the price of 86 cents mentioned by the hon. member for *Qu'Appelle is anything like accurate-and we know that 50,000,000 bushels anyway is going to be sold at 85 cents because it is going to be sold at 70 cents plus the processing tax- and if we have another 120,000,000 bushels, as the hon. member for Qu'Appelle said, sold for 86 cents, our total should be 75 cents anyway.


Richard Burpee Hanson: But the fifteen cents does not go to the farmer.


James J. Donnelly: It goes to the board for
the wheat.


Richard Burpee Hanson: But the farmer does not get it.


James J. Donnelly: Well, it should go to the farmer.


Richard Burpee Hanson: If it does, let us know about it.


James J. Donnelly: With all these things, the participating certificates should bring somewhere in the neighbourhood of five cents a bushel; and if they bring anywhere near what the hon. member for Qu'Appelle said, 86 or 86J cents. Therefore we get somewhere about 95 cents. What, then, is all the cry about not getting enough for the wheat? These are all plain facts, and out government has said that this year's wheat is to be kept separate. All wheat delivered after August 1 is bo be counted as this year's crop; when we have delivered the 230,000,000 bushels, a settlement will be made with regard to whatever we get for it, and the participating certificates will be paid. That is what we are expecting will be done.


Alfred Henry Bence: Is that what the government said?


James J. Donnelly: I understand so.


Alfred Henry Bence: I hope that is right.


James J. Donnelly: That is what I understand is to be done. Hon. members will have to ask the minister for a more definite statement, but that was what was referred to by the hon. member for Moose Jaw. The hon. member for Qu'Appelle referred to it also. I refer to it again as part of the price we are to get for our wheat. Therefore we should get for the 230,000,000 bushels in the neighbourhood of 95 cents a bushel. It should not foe given just to the man who happens to have wheat. We must remember that at one
time we had a bonus of five cents a bushel on wheat, and many of us went up and down the country saying this was altogether wrong, although it was following the words of the scripture that to him that hath shall be given. We condemned the government of that time for that policy; and I say it is right that this bonus or assistance should be given to those who have poor crops, damaged crops or no crops, instead of on a bushelage basis. I believe the present system is far better than the system which was followed at that time.
There may be other questions that will arise in connection with this wheat problem. For example, there is the question of setting up a selling agency to take over this wheat; perhaps that might be a good thing to do. I am not going to say, but I think it should be investigated because some of these charges for the handling of wheat are altogether too high.


Mr. WEIR:: The vote we are considering this evening has to do with the administration of the Canada Grain Act, which is administered by the board of grain commissioners. That act has to do with the grading, weighing, inspection and general handling of grain, and the operation of government elevators. Up to the present I have heard no complaint with respect to the administration of the Canada Grain Act; nor have I heard any complaint with regard to the way in which the wheat board, which is under the same minister, has carried out government policy. I think most of those who have followed the situation closely will agree that during the last two years, and particularly during the last year, the wheat board has done a splendid job under most difficult circumstances. In bringing down this estimate the minister has permitted a discussion of both *the Canada Grain Act under the board of grain commissioners and the operation of the Canadian wheat board. Perhaps that is all to the good, since these matters are pretty well correlated, and we can obtain information as to both the administrative and the marketing ends at the same time.
Now that the mystery surrounding the shipment of wheat from Vancouver to north China has been cleared up, perhaps we can go ahead and deal with two or three other matters, but in this connection I think it only fair and reasonable to say that so far as this transaction was concerned, the wheat board as such was quite within its rights in what it did. As a matter of fact, if the wheat board had received an offer from anyone, suggesting a price satisfactory to them, and had not acted on that offer, they could have been criticized from the opposite point of view. I contend that the destination of the wheat

Supply-Trade-Canada Grain Act
was a matter of government policy, and not a matter about which the wheat board should be concerned. The wheat board's job is to sell wheat, and it is for the government to say whether it will prevent such wheat from being shipped to certain countries.
This estimate provides an opportunity to discuss the question of the cost of handling wheat, which is a matter giving concern to a great many farmers; and, since the government has a part in the financing of the wheat, the matter concerns the government as well. I am bound to say that there is a general feeling in the country that in comparison with the value of the product, the handling charges are too high. I am not going to make the statement that they can and must be reduced. In a recent publication issued by the Department of Trade and Commerce I saw a statement of the cost of handling grain through the elevators in the Argentine. I am not going to refer to those costs, because I do not know the services rendered by the grain companies of the Argentine compared with the services rendered by our own companies. The grain companies are under certain definite obligations with regard to guaranteeing weight and grade, and as to financial responsibility; and from the statement concerning the Argentine I do not know that the same conditions apply there.
I think it should be pointed out that it is the job of the wheat board to market wheat, and in consequence the board is obliged to provide facilities for handling that wheat. Up to the present time the board in its wisdom has decided to use existing facilities and to make agreements with the elevator companies for the handling of the grain. This practice has been followed since the wheat board has been in operation. Therefore the matter comes down to a question of the sort of deal the wheat board can make with the elevator companies. I think it is safe to assume that the board has endeavoured at all times to make the best possible deal, because it would be entirely in its own interests, in the interests of the government and in the interests of those marketing the grain, that it should do so.
In connection with the rates for handling grain there is another feature which perhaps a good many people have overlooked. The board of grain commissioners, which administers the Canada Grain Act, each year holds a public session at which the handling charges for grain are reviewed, and at which anyone interested can attend and make representations with respect to any particular costs or charges made in connection with grain. At these meetings, of course, the trade is always represented; the wheat pools are always represented, and I suppose the milling interests

and others concerned with the marketing of grain are represented as well. I happen to know that at the meeting held last year every grain company represented pressed strongly for the continuation of the prevailing rate for the storage of grain.


Richard Burpee Hanson: That was
one-thirtieth cent?


William Gilbert Weir: It was one-thirtieth of a cent a bushel a day. The only protest against that charge was made by members from western Canada supporting this government. We made representations against continuing the same storage charge, and the result of those representations may be noted in the fact that the charge was reduced from one-thirtieth to one-forty-fifth of a cent a day. With all due respect to the hon. member for Qu'Appelle, while it is all very well, and quite proper, for him to discuss in this house the question of handling charges and so forth, I would suggest that he also has the right to make representations at the meeting called for that purpose by the board of grain commissioners.
One other feature in connection with the handling of grain is also of importance. A few moments ago I mentioned that the board was required to make agreements for the handling of grain and that no' doubt it endeavoured to make the best deal possible. Last year, when our storage problem became so acute; when we were wondering where we were going to get storage to house the grain coming on the market, the grain trade would not commit itself to the construction of any additional storage, either temporary or permanent, unless and until it received from the government some concession with regard to taxation. In view of this circumstance, surely it must be agreed that the wheat board accomplished a great deal in its agreement with the elevator companies.
Just here I might refer to the construction of elevator annexes that has been continued this year. I think it was a mistake to continue that programme. I know that certain elevator companies went out on their own behalf in an attempt to build a quantity of additional, temporary storage space throughout the country. I do not know who was responsible for putting a check on ' that procedure, but I understand it has been stopped, and I believe that was a proper procedure to follow. So far as additional space is concerned, if it has to be acquired my contention is that the assistance might much more properly be given in connection with the building of granaries on the farms, or something of that kind. I believe it is only fair to say that our farmers are deserving

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of a good deal more credit than has been given to them for the manner in which they housed last year's huge crop of wheat. The farmers of western Canada, who ordinarily have been accustomed to delivering their grain in the early fall months of the year, must have at some time or another held in storage on their farms upward of 200,000,000 to 225,000,000 bushels of wheat, in addition to coarse grains. No one thought there was that much storage space on the farms of western Canada. It may not have been good space-I know of houses, cellars, and all sorts of structures which were filled with grain- nevertheless it was space which could be used.
Here is another interesting point. Despite our anxiety in connection with the delivery of grain, the wheat board had available storage space in country elevators to the extent of about 50,000,000 bushels, with another 40,000,000 to 50,000,000 bushels of storage space in terminal buildings where grain could have been tucked away. Therefore had it been absolutely necessary to move some grain, that space would have been available.
Another feature which has been overlooked in connection with the handling of last year's crop is the amount of grain that was actually handled. The board, from the August to November period, took delivery of
243,000.000 bushels of wheat, in addition to coarse grains. That figure was exceeded only once in the last ten years, and that was in the year before, when a larger quantity of wheat was delivered in that fall period. I believe the wheat board is deserving of credit for the manner in which it made provision for the handling of last year's wheat crop.
Just at this point, however, I should like to refer to another feature, namely the date on which farm storage payments should be made. As I read the record, payment for farm storage by the wheat board started from November 1, last. The implied understanding of the act was that the farmer should be paid a rate of storage comparable with that paid the elevator companies. If that is so, I believe we are not being quite fair to the farmer if we are not going to begin paying storage until November 1. In my opinion it should be started at least by September 1.
I should like to refer in greater detail to the marketing of last year's crop. May I say to the minister and to the wheat board that the quota system has generally been considered satisfactory. It was the only policy which could have been carried out last fall with any degree of fairness. I have been
surprised by the manner in which business men generally have looked upon this system of delivery. By and large they wish to see it continued. They believe it is a much better policy for the farmer and for their own business to have the payments on wheat spread out over the year, rather than have the lot coming in at one time.
It is true that at the beginning of the last harvest marketing period there was a good deal of apprehension as to the condition which would probably exist because of the low delivery of wheat. Let me say that I believe the policy, as it finally worked out last fall, cannot be severely criticized. Once the minister made his statement last November, that the wheat board would accept all of this year's crop during the crop year, the credit situation was entirely relieved. Any man who was credit-worthy-I shall use that expression-had little or no difficulty in securing a loan from the bank, which in turn he paid later, the storage charge being quite sufficient to pay the interest.
That relieved the situation, so far as Manitoba was concerned, and I am bound to say I have not heard any serious complaints from any area in which there was a crop. Of course where there was no crop, or a very light one, the situation was somewhat critical. The same will happen this year with respect to the 230,000,000 bushels. The government has said that it will take the wheat during the crop year. Therefore it is a gilt-edged security, and any man who wishes to borrow on his wheat may do so.
The hon. member for Qu'Appelle referred to marketing in the United States. I contend that, apart from the price factor, our policy in Canada is not greatly unlike that of the United States. We have set up an initial price. Because of the government's statement that it will take the wheat during the crop year, credit facilities with recognized lending concerns are available for those who desire or who require to borrow money to carry on their operations.
I should like to say a word respecting the grain exchange, of which mention has been made frequently. By the way, I am reminded by one of my colleagues that the amount of wheat United States farmers are able to deliver is limited, as it is in Canada. So far as the farmer or the government is concerned, I do not think it makes a particle of difference whether the grain exchange is closed or not.


Victor Quelch: What is the price the United States farmer gets? Is it not $1.24?


William Gilbert Weir: I do not know just what it is to-day.

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The CHAIRMAN:: May I point out to
hon. members that if they wish to ask questions they should first rise in their places. It is against the rules for an hon. member to ask a question while remaining seated.


William Gilbert Weir: I was going to refer to the matter of the closing of the Winnipeg grain exchange. As I said earlier, I do not think it makes any difference whether it is closed or not. So far as this country is concerned, it might as well be closed. However, as pointed out by the hon. member for Wood Mountain, we would still have the problem of marketing our coarse grains, and some machinery is necessary for that purpose. Why should we concern ourselves about a matter of this kind when practically the only purchaser of wheat we have requests that the exchange remain open? It is not doing us any harm, and therefore let us forget about any talk of closing it.
I should like to refer to another matter discussed this afternoon by hon. members, namely, the policy of the government respecting the marketing of this year's crop. The government has declared that it will take only
230,000,000 bushels. I wish to endorse the suggestion made by hon. members this evening, that all earnings acquired by this wheat be credited to that 230,000,000 bushels. If the supposition of the hon. member for Qu'Appelle is correct, and if the wheat has been sold to Great Britain at either a slightly or a substantially higher price than the initial payment of the board, then that money should be earmarked for this 230,000,000 bushels. Likewise the processing tax levied on wheat consumed in this country should receive similar treatment. I hope the minister will not overlook this factor, and will see that representations are made to the government at the proper time and in the proper place.
For a few moments I should like to refer to the regulations recently passed by order in council concerning the operations of the wheat board. I refer particularly to regulation No. 17 which, as I interpret it, sets out that the landlord shall be entitled to his share of the crop delivered. If a man is renting a farm, my interpretation of this regulation is that the board is under some obligation to see that the landlord gets his one-third. I think this is entirely unnecessary, and it will cause a great deal of trouble and misunderstanding. I would say to the board that they might better get rid of that regulation and let each individual look after his own affairs according to the

agreement arrived at between landlord and tenant. Regulation No. 22 deals with the description of land, and it reads:
No person shall apply or deliver any grain on his quotas from any land other than that described in his permit. Such description shall be a correct representation of the lands owned, rented or otherwise held and farmed by the producer taking the declaration, and the producer shall ascertain that no other person entitled to proceeds of the farm has taken out a permit for such lands.
That is putting too heavy a responsibility upon the individual. After all, the wheat board has a job to do, and it should be its responsibility to see that there is no duplication of certificates.
Regulation No. 28 has to do with a man shipping grain over the platform. As I understand this regulation, a man who ships a carload of grain over the platform is obliged to forward his permit with the car to the wheat board. Having sent in that permit, he cannot deliver any more grain until he gets it back. Surely there is a difficulty there that should be recognized. A man may have a large acreage and be threshing upwards of a carload of wheat a day. He could not afford to stop and wait until his permit came back after being sent into Winnipeg. I just wanted to point out these features with respect to the regulations. I think they deserve further consideration, particularly the one with respect to the landlord and tenant shares.
Some days ago an announcement was made with respect to a proposed wheat conference to be called by the United States, to which Canada would be invited. I should like to advance this thought to the government. Having regard to the particular interest of western Canada in the marketing of wheat, I think consideration should be given to having representatives of our provincial governments attend the conference. After all, those provinces are most vitally concerned, and in my judgment it would be to the government's advantage to see that they are made conversant with any undertaking that may be proceeded with in a conference of this kind.
I come now to a matter which I have discussed briefly in this house on other occasions, namely, the finding of new industrial uses for wheat and other agricultural products. A report has recently been published setting out the far-reaching accomplishments in this regard. I think the time is coming when we must face the possibility of utilizing wheat for other purposes. This report is entitled, "Industrial Utilization of Farm Products" and is published by the North-West line elevators' association. I commend a reading of it to hon. members. At this time we are

Supply-Trade-Canada Grain Act
considering whether we shall be able to continue with the unrestricted use of gasoline. If certain of our farm products could be turned into industrial alcohol, this would relieve the other situation to a certain extent. There is a wide field of inquiry which could be carried on, not only in western Canada but throughout all Canada Ways should be found of utilizing to better advantage the product of this great industry whose future is in jeopardy on account of conditions that exist.
I do not know whose job it would be to undertake something of this kind. The minister has under his control the national research council, the board of grain commissioners and the wheat board. Any or all of these bodies should be encouraged or advised to take up this work. I suppose it will be said that the wheat board as such has a job to do in connection with the mechanics of the marketing of wheat. The board of grain commissioners is responsible for the administration of the Canada Grain Act as it affects not only the actions of the wheat board, but the grain trade as a whole. Perhaps we could load an additional responsibility upon the board of grain commissioners; perhaps we could delegate to them the job of attempting to find new markets for wheat. We should be exploring all opportunities of trade so far as it is humanly possible to do so.
In connection with the problem of wheat we have the board of grain commissioners; we have the Canadian wheat board; we have the Prairie Farm Rehabilitation Act; we have the Prairie Farm Assistance Act, and now we have the reduction programme. I think the country expects, and I feel sure our farmers expect that the services of these various organizations, all designed fundamentally for the same thing, should be utilized in the closest cooperation and collaboration. If there is any way of bringing these groups together so that they may all work toward the same end, it is most desirable that this should be done.
Finally, I come back to what I said earlier. The duty of the wheat board is to market our wheat, and we hope they will make as good an arrangement with the elevator companies and other interests for the handling of the grain as it is possible to make. We hope they will be able to get the costs of that job down to as reasonable a figure as possible.
I repeat that I think farm storage should be paid as from September 1 instead of from November 1. I repeat that the full amount realized from the sale of this year's crop should be credited to the amount of wheat that the wheat board is going to take this year. I contend that the wheat board and 14873-234
the board of grain commissioners should continue unrelenting efforts to find new markets for our wheat as well as to study new industrial uses for wheat and other farm products.


Victor Quelch: When I spoke last Friday night it was just a few minutes before eleven o'clock, and therefore my remarks were brief. I shall be brief again to-night because there has already been quite a full discussion regarding the whole question of the marketing of wheat. I should, however, like to make reference again to-night to the question of our exports of wheat and to one or two sections in order in council P.C. 3849. The hon. member for Macdonald, when he spoke just now, said that we should not criticize the wheat board with regard to the shipment of wheat to Japan. I agree. The government must take full responsibility for that action because it is a question of government policy. This morning I, along with some other hon. members, received a couple of extracts from the Calgary Herald of June 6, and in these extracts the question was asked whether or not the wheat being shipped to Japan was going to Germany. Up to the present time we have received no answer from the government that is in any way satisfactoiy. The bald fact is that at the present time we are shipping a certain amount of wheat to Japan, and according to the Ottawa Citizen, Japan is shipping 150,000 tons of food a day to Germany. Therefore I think we can take it for granted that a certain amount of this wheat shipped from Canada is undoubtedly going to Germany to-day.
In addition, we find that in March of this year the United States shipped 1,000,000 barrels of crude petroleum to Japan, and last year, 11,500,000 barrels. It also shipped to Japan 230,000,000 pounds of copper. But are we in a position to criticize the United States for that action? The United States is not at war. We are. Yet we to-day are shipping wheat, indirectly I would say, to Germany. Just so long as we continue to take action of that kind, I do not consider that we are in a sound position to ask the people to make a supreme effort in this war.
The Calgary Herald suggests that our policy to-day towards Japan is an appeasement policy. Well, we had an appeasement policy towards Germany from 1935 to 1939, and look at the mess it landed us in! In my opinion the position is nothing more or less than a form of blackmail, and the more you give in to blackmail, the more you are blackmailed. I would say that these demands upon us by Japan will increase the more we give in to



Supply-Trade-Canada Grain Act
them, and the more we ship, the more we shall have to ship. Eventually war. will come, and Japan will be in just that much better position to fight against us than she is to-day.
I wish to refer to order in council P.C. 3849, section 17. I referred to it on Friday night, but I will just read part of the section again:
Whenever a quota of the grain produced on any land becomes deliverable, any producer entitled to a definite share of the crop as landlord, vendor or mortgagee, shall be entitled to have delivered in his name a share of such quota proportionate to such person's said interest in the grain, and shall have equal rights of delivery accorded to producers under the act. . . .
I pointed out that under that section of the order in council the farmer can be compelled out of the first quota of five bushels to deliver a certain percentage to the mortgage company or to the landlord, as the case may be. The question was asked, whether I was not aware that the provincial government last year stepped in to safeguard the first five bushels to the farmer. But at that time this order in council had not been passed. Had it been passed, the provincial government would not have been able to take that action. Now, with this order in council in force, the provincial government will not be able to take the same action this year that it took last year, and the result will be that the farmer will be compelled1 to split up that first quota. Therefore I would suggest that if you want to leave this section in-and the hon. member for Moose Jaw pointed out why it was necessary perhaps to have a section of this kind in the order in council-we should add a subsection at the end of section 17 with words to this effect: "Notwithstanding anything contained in the preceding section the provincial governments shall have the right to determine how much, if any, of the first five bushels delivered1 by the farmer shall be delivered to parties entitled to a definite share of the crop." I think that would take care of the situation. The section would still be left in there to make sure that the farmer would deliver a certain portion of the whole quota to the mortgage company or to the landlord; and if that section were not in there, the farmer could sell his whole quota and take the whole proceeds, and then tell the mortgage company or the landlord that his wheat was in the granary. That is, I presume, the reason why that section is there.
There is a question I wish to ask the minister. He is not here at the moment, but I will put my question and his advisers sitting before him will perhaps refer it to him on his return to the chamber. I understand that the definition of 1940 wheat acreage is the

same for the sale of wheat as it is under the summer-fallow bonus plan; that is, as defined under P.C. 3231. That being the situation, I cannot quite understand the wheat board's ruling to-day. Let me explain. I had a letter from a farmer the other day to the effect that he had 245 acres under cultivation. He had fifty acres of wheat last year, and fifty acres of wheat in 1939, and he asked me how much wheat he could sow in 1941. I stated that if he had fifty acres in 1940, and fifty acres in 1939, the amount of wheat he could sell this year would be based1 on sixty-five per cent of fifty. At the same time he had written to the Minister of Agriculture, and the Minister of Agriculture had told him to write to the wheat board. He wrote to the wheat board, and the wheat board told him that he could sell wheat from the whole fifty acres; that it would not be sixty-five per cent of the fifty. I cannot find in the order in council anything supporting that view. According to the order in council he could only sell wheat produced off sixty-five per cent of the fifty. Can the minister explain how the wheat board arrived at that decision? I am not quarrelling with it at all because, when a man has only fifty acres of wheat, I think he should be allowed to sell the fifty. I was just wondering how the board had that amount of latitude. If a farmer had seventy acres in wheat could he sell the full seventy instead of sixty-five per cent of the seventy; or if he had eighty acres in wheat, would he be able to sell wheat off the full eighty or only off sixty-five per cent of the eighty? How high can the acreage go before the sixty-five per cent is applied? Can the minister answer that question? I cannot find it answered anywhere in the order in council.


James Angus MacKinnon: I am very sorry, Mr. Chairman, that I was called out of the chamber for a few minutes in the midst of the remarks of my hon. friend, but I think I have caught the drift of his question. I am quite sure that circular No. 200 issued by the Canadian wheat board-


Victor Quelch: What order in council is that?


James Angus MacKinnon: It is a circular issued to the trade by the Canadian wheat board.


Victor Quelch: Does that set aside order in council P.C. 3231 which defines the 1940 wheat acreage? I understand that that is the last order in council defining wheat acreage in 1940, and it certainly does not give any latitude of that kind. I want it understood that I am not objecting to that ruling,

Supply-Trade-Canada Grain Act
but I am wondering under what section in the regulations the board obtains these discretionary powers.


James Angus MacKinnon: These instructions are issued under the authority of the Canadian wheat board, the regulations being determined by them under which the quota deliveries will be set. It has nothing to do with order in council P.C. 3231. They are the regulations setting out the procedure in the handling of the wheat crop of this year.


Victor Quelch: Am I to understand, then, that the 1940 wheat acreage as defined under the regulations of the Department of Agriculture is different from that as defined under the regulations of the Department of Trade and Commerce? You have two different terms, apparently, for wheat acreage, one by the Department of Agriculture and one by the Department of Trade and Commerce.


James Angus MacKinnon: It has been suggested, Mr. Chairman, that I place on Hansard, circular No. 195 of the Canadian Wheat Board:
The Canadian wheat board to-day made the following announcement:
On April 15 the Canadian wheat board issued a statement to the effect that the dominion government had authorized the board to restrict wheat marketings in 1941-42 to a total of 230 million bushels, which means about 223 million bushels for the western provinces. Wheat producers in the western provinces will be permitted to base their deliveries of wheat in 1941-42 on 65 per cent of their 1940 wheat acreage. This restriction will also apply to certain regions of British Columbia, such as the Peace River district, Creston, Wynndel, Vanderhoof, Armstrong and Kamloops.
In connection with implementing this policy, the Canadian wheat board announces the following decisions of special interest to wheat producers throughout the western provinces.
1.	Producers who seeded no wheat in 1940.
There are some farmers in the western provinces who, for one reason or another, did not seed any wheat in 1940 and therefore did not have 1940-41 delivery permits. Such farmers who desire to seed and deliver wheat in 1941 should make application to the board at their earliest convenience. Their cases will be considered, and if warranted, delivery quotas will be arranged for 1941-42. All applications must be made to the board prior to May 31, 1941.
That date has now been extended to the end of June.
In his application the producer should give the legal description of his land and state his total farm acreage, the number of acres in coarse grains, summer-fallow, etc., and the delivery point to be used in 1941-42.
2.	Producers who seeded an abnormally small
proportion of their land to wheat in 1940.
There are some individual farmers who in 1940 had, for one reason or another, abnormally 14873-2341
small wheat acreages. In these cases the Canadian wheat board will, on application of the producers concerned, review their wheat acreage position before establishing their delivery quotas for 1941-42. In making such an application each wheat producer must show that his 1940 acreage was substantially lower than his wheat acreage in 1939, and lower than the acreage which he Usually sows to wheat. These applications for a review of 1940 wheat acreages must be in the hands of the board as soon as possible, and no applications will be received after May 31, 1941. Upon receipt of application, forms will be mailed to the producer upon which his case can be stated.
That date also has been extended to June 30.


Victor Quelch: I believe that that statement is already on Hansard.


James Angus MacKinnon: I
do not think it is. The other statement, No. 200, is, I believe, on Hansard.


Alexander Malcolm Nicholson: I believe it is in
Hansard of May 2.


Mr. MacKINNON (Edmonton West):: 3.	Producers who seeded an abnormally large proportion of their land to wheat in 1940.
An examination of 1940 permits issued by the Canadian wheat board shows that in most districts throughout the west, a few producers had abnormally high wheat acreages in 1940, compared with their total farm acreage. In so far as these wheat acreages are substantially higher than usual for the farms concerned, the Canadian wheat board will, in establishing 1941-42 delivery quotas for these farmers, make such adjustments in their 1940 acreage figures as will bring them into line with their usual practice and into line with their district as a whole. This means that wheat producers who unduly expanded their wheat acreage in 1940 will have their 1941-42 delivery quotas established on the basis of wheat produced on 65 per cent of their usual wheat acreage, and in arriving at the adjustment which will be made in these exceptionally large wheat acreages in 1940, the board will consider the practice of the other farms in the district, as reported to us.
As an example, a relatively few farmers in the western provinces had over 90 per cent of their total farm area in wheat in 1940. It would be obviously unfair to the great majority of wheat producers to extend delivery quotas to these few farmers based upon wheat produced on 65 per cent of 1940 acreages. In these cases delivery quotas in 1941-42 will be based upon 65 per cent of their usual wheat acreage and the average percentage of the farm land sown to wheat in 1940 in the district concerned.
The Canadian wheat board has adopted the foregoing policies in respect to the basis of 1941-42 wheat quotas in the interests of a fair distribution of quotas among wheat producers in 1941-42. The object is to adjust some of the wide variations from usual practice that occurred in 1940 wheat seeding.


Ernest Edward Perley: What date is that?


James Angus MacKinnon: That is April 28, 1941.

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Victor Quelch: These regulations do not change the case to which I referred. They state that where there is a large difference between the 1939 and 1940 acreages, a change can be made. But I cited a case where the acreages in 1940 and 1939 were approximately the same, but in both cases they were only a very small percentage of the total cultivated acreage. Under order in council P.C. 3231, as I understand it, there will be no way of allowing that man to increase his wheat acreage. I believe that was referred to by the Minister of Agriculture, who pointed out that it was not the desire to have wheat acreage increased, and that if in the past the farmer had been sowing only a small amount of wheat, it was not intended to allow him to sow a greater amount. In this case the man wrote to me and he wrote to the Minister of Agricvdture. The minister referred him to the wheat board. I interpreted the act to him, and I got a letter back from him telling me that the wheat board had interpreted it much more generously than I had.


James Garfield Gardiner: The regulations, you mean.


Victor Quelch: The regulations, yes. I interpreted them as they are. The wheat board, apparently, introduced a new idea, an idea which I think should be there. I believe that the wheat board and the Minister of Agriculture should have the power to allow the man to increase his wheat acreage where the amount in crop in 1939 and 1940 was only a small percentage of the total cultivated acreage. There is, however, nothing in the regulations that allows for that to be done, and I am still wondering how the wheat board were able to do it.


James Angus MacKinnon: If the hon. gentleman will give me the name of the farmer and the particulars, I shall be glad to have the wheat board go into the matter and deal with it and advise.


Victor Quelch: That is not the point.
The wheat board did give a good interpretation; they allowed the man to sow the full acreage. But what I want to know is, what is to be the policy in the future? Are farmers who in 1939 and 1940 sowed only a small percentage of their cultivated acreage to wheat to be allowed to sow the same amount, or to sow or market only 65 per cent? I would suggest that it might be a good thing to introduce an amendment so that the same amount could be sowed. Apparently the wheat board are doing it.


James Garfield Gardiner: No.
fMr. J. A. MacKinnon.]


Victor Quelch: In this case they are,
because I have a letter from the man saying that the wheat board told him he could sow the whole. His name is Othen of Benton Station, Alberta. He wrote to the Minister of Agriculture, and the Minister of Agriculture referred him to the wheat board; then I got a letter back a few days later telling me I was not interpreting the act in as liberal a way as the wheat board. I am interpreting it as it is, not as I should like it to be.


James Angus MacKinnon: What are that man's initials?


Victor Quelch: I do not know, but he is
the only Othen there.


Charles Edward Johnston: Would the minister say that the regulations would apply always?


James Angus MacKinnon: There are cases where the wheat board uses its discretion in the particular circumstances.


Victor Quelch: That is, they are not
bound definitely by the regulations?


James Angus MacKinnon: No.


Victor Quelch: That is what I said the
other day. I had three orders in council, thought I was up to date, and then I found that another had been passed. Now we find that even though we have all the orders in council we are not up to date, that the board are changing the regulations, so that members of parliament cannot be in a position to go out and tell the farmers what has actually been done. It is not a pleasant thing to give an answer and then be shown a letter from the wheat board saying that you are wrong, when you know you are right. In this case I am not criticizing the wheat board for their interpretation, but I say that the regulations should be changed to give the wheat board full power to do that without going outside the regulations.


Mr. WRIGHT:: The argument which has
just taken place bears out the contention we made earlier in the session that these matters should have been placed before a committee of the house and the regulations threshed out and brought back to the house in some kind of permanent form so that they could be explained to the people. These regulations came down before the Easter recess; we had two sets of regulations; we went home for the Easter recess and were asked to explain these regulations to the farmers. We did explain them as they were at that time; we came back, and immediately on reaching here we found that a new set of regulations had been issued which changed in some respects

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those we had before. It leaves hon. members in an awkward position and does not make a good impression in the country as to our ability here when we go home and tell our people a certain thing and a few days later find these regulations changed. A committee of the house should have been set up, composed of members from agricultural constituencies who understand these matters, and the regulations should have been thoroughly discussed before being given publicity. That would save a great deal of confusion in the country.
One of the greatest difficulties with the farmers in the west is that they do not understand what is taking place; neither the government nor the wheat board has taken the trouble to explain these matters to them.
This afternoon the hon. member for Wood Mountain propounded something which I never heard before, that it is the grain companies who were opposed to the grain exchange. I have been in western Canada for many years; I have attended the meetings of farm organizations for years, and they have been passing resolutions asking for the abolition of the grain exchange. I never heard of the grain companies passing resolutions to that effect. But if the grain exchange is necessary at this time-and the wheat board evidently believe it is or they would not be keeping it in operation-then I think the wheat board should give an explanation to the farmers of the west as to why it is necessary.
When a farmer delivers a thousand bushels of wheat to the elevator company, he is paid for it. The elevator company put it in store; they may deliver it to the wheat board in the course of a few days or, it may be, a few months. In the meantime they pay insurance on it, and when they deliver it to the wheat board they are paid for it by the wheat board plus per cent interest for the time their money has been in use. Then the wheat belongs to the wheat board. Up to that point it has not touched the grain exchange; the handling companies to-day do not use the grain exchange. I think that is correct?


James Angus MacKinnon: That is correct.


Percy Ellis Wright: From then on, the wheat board should give an explanation to the farmers of western Canada as to what happens to that wheat. The farmer in western Canada understands that that wheat is sold by the wheat board to the import board in the old country. It is sold in the form of futures. Then, in order to have that wheat moved to the seaboard, it is necessary for the export
companies to buy that grain from the wheat board through the grain exchange in order finally to deliver it to the importers in Great Britain.
If a full explanation were given of the exact procedure in that matter, it might clear up a great deal of difficulty in the minds of the farmers of western Canada. Until that is done, until they understand the exact procedure, they are going to be suspicious of what is taking place. I believe the government would be well advised to do that.
With regard to the marketing of coarse grains, they are to-day marketed through the grain exchange. The farmers of western Canada received last year in November and December an average of 31 cents for oats and 42 cents for barley. This spring in April and May those grains were selling at 38 cents for oats and about 53 cents for barley. On barley that is a difference of 11 cents, which is more than the carrying charges. Immediately there is suspicion in the mind of the farmer that someone is making money out of his grain, and until the wheat board come out and show the farmer exactly what is taking place, that suspicion will remain. At this time, when it is necessary in Canada to have a 100 per cent war effort and to keep people in the right frame of mind, it would be a good thing if that suspicion in the minds of western farmers could be removed. It is going to be difficult to do; a real explanation will have to be given, because the firm belief in the minds of, I think, 75 to 85 per cent of the farmers of western Canada is that the grain exchange is making money out of them.
The hon. member for Wood Mountain produced a certificate showing that the grain exchange made an extra two or three cents a bushel on certain grades, and on some grades as much as five to seven cents at this time. I can assure him, however, that even if that is so, the suspicion is still in the minds of the western farmers that the grain exchange is there at their expense, and their expense only; and if the board can justify the use of the grain exchange at this time, they should do so, and remove that suspicion.
I take particular exception to one of the regulations issued by the Minister of Trade and Commerce in connection with the marketing of grain; that is section 17, which reads:
Whenever a quota of the grain produced on any land becomes deliverable, any producer entitled to a definite share of the crop as landlord, vendor or mortgagee, shall be entitled to have delivered in his name a share of such quota proportionate to such person's said interest in the grain, and shall have equal rights of delivery accorded to producers under the act, and for such purpose the permit holder shall

Supply-Trade-Canada Grain Act
make the permit available, but the enforcement of this provision shall be the direct concern and responsibility of the interested parties themselves and no legal obligation shall devolve on the board in respect thereto.
This fall we are going to have a limited area from which we can deliver grain. Last fall we could deliver from whatever area we had in crop at the time, and even last year a great many farmers found it difficult to finance. This year they are going to be forced by this regulation to deliver one-third of the crop, in most instances, to the mortgagee or landlord. This is going to make it difficult for them to pay their expenses. Last year, and I think again this year, the provincial legislature required the farmer to pay his threshing bill, his taxes, his seed grain, and so forth; to keep enough to put in the crop next spring, and enough to provide for his family until next year. He cannot possibly do that under the terms of this order in council; and, since this has been passed under the War Measures Act, I suppose it will supersede provincial legislation. In that event, I do not know just what will be the position this fall of the average farmer in Saskatchewan, and I believe the minister should give serious consideration to withdrawing this requirement before deliveries commence. I agree that the landlord is justified in expecting a share of the crop, but I think he might very well wait at least until after the first delivery has been made, because the farmer will require all the proceeds from that delivery to meet his expenses.
I also believe we should have some regulation with regard to the price of coarse grains this fall. I quoted figures a few minutes ago to show how prices of oats and barley had increased between last fall and this spring. This year, with a larger acreage in coarse grains, the market will be even more depressed than it was last fall; and unless the government steps in and does something with regard to a minimum price for these grains, the farmer will find himself unable to market enough wheat, to pay - his operating expenses. If he markets these coarse grains, it will be on a glutted market, and he will obtain a price which in many instances will not meet the cost of harvesting and threshing. Therefore I believe the minister should give serious consideration to the establishment of a minimum price on coarse grains this fall. Certainly the price of 70 cents a bushel for wheat this year is not going to give the farmer anything on which to come and go.
The hon. member for Wood Mountain has shown that we can obtain 95 cents for our wheat this fall, I think he said, if we follow the wishes of the Minister of Agriculture. While that may be so in some exceptional

cases, I am sure that will not be generally the case in western Canada. Take a man who had 150 acres in wheat last year. This year, according to the regulations, he will be able to market wheat from only 100 acres, and from that 100 acres he will be able to market only an average of twelve bushels to the acre. That will give him 1,200 bushels which, at 50 cents a bushel, will give him a cash return of $600. If he is in a fairly good section of Saskatchewan, he can grow that 1,200 bushels of wheat on perhaps forty acres, at thirty bushels to the acre. That will leave him 110 acres for summer-fallow which, at $4 an acre, will give him a bonus of $440, making a total return of $1,040 for his wheat. That works out at 86 or 87 cents a bushel. Last year he threshed 4,500 bushels of wheat on his 150 acres, which he sold at 50 cents a bushel, giving him an income of $2,250. This year his income will be reduced1 to $1,040, and in order to obtain that sum of money he will have to summer-fallow an additional 110 acres. Therefore, when we say he is obtaining 85 cents a bushel for his wheat, we are not telling the whole story. The fact is that his expenses are going to eat up a very large part of that 85 cents. For the thirty-two years from 1908 to 1939 inclusive, the price of wheat to the western farmer has averaged 90 cents a bushel at point of delivery. We have now reduced that figure to 50 cents a bushel, which is entirely inadequate to meet his requirements.
This morning, in speaking on the defence of Canada regulations, the hon. member for St. Lawrence-St. George told us what he said his party believed were some of the post-war aims of the country. Among those aims was the establishment of better prices for agricultural products. If that is the policy of the government, they should set an example now by giving better prices. The people will have much more confidence in what the government will do after the war if they take a step in this direction now. The government of the United States has done something along this line; and while we may not be able to go as far as they have gone, still I think we should at least make some move in that direction, in order to show the people of western Canada and the farmers of this country generally that we believe in, and are willing to act on, what we are talking about.


Mr. CHURCH:: This item provides $104,648.50 for the administration of the Canada Grain Act. We have had some sixteen or seventeen inquiries into the production and marketing of grain, and when the grain board was appointed it was said that there would be no more politics in the administration of this great asset. We had an opportunity, both before and after the war

Supply-Trade-Canada Grain Act
started, to do something in this matter. I suggested in the house in 1937 and 1938 that the government should establish food reservoirs and grain reservoirs in England.
I suggested that the surplus crop carryover of one or two years should be moved to England and stored there for emergency purposes. However, my suggestion was not acted upon. The result is that war is now upon us, and the wheat remains in our own country, a glut upon the world's market.
Three years ago I urged upon the government that it should confer with the then secretary of agriculture in the United States, Hon. H. A. Wallace, as to the orderly marketing of grain on this continent and adopt a war policy. While there was not an actual war at that time, it was well known that it was coming and that the grain situation in this country and the world over was in a most precarious condition.
I would point out that I supported my leader's bill in 1935 for the nationalization of grain. It is a great pity that that measure was not passed as it was drafted, and in the form in which it received first and second readings. When it returned from committee one could scarcely recognize it. One of the main necessities in the creation of the wheat board was to get rid of the middleman. He flourishes now just as ever, like the green bay tree, both on the prairies and elsewhere.
Everyone in Canada is interested in the grain trade. We are concerned with the future of that great industry, and we are interested in those people who are the dirt farmers and who have had a very hard time of it. However, it is the middleman who has caused all the trouble, and he is still doing business at his old stand. One of the things which should be done immediately is the closing of the Winnipeg grain exchange, and the elimination of dealing in futures. What is the use in dealing with futures on the grain exchange when we know nothing of the future of our country, or the war, or the outcome of it, or to whom Canada may in the end belong. The war is our first concern.
In connection with one of the votes we discussed grain for about three weeks; it is again under discussion in a new form, under this vote, and much the same ground is again being gone over. Although realizing that hon. members to my left are keenly interested in the subject, I would point out that there are other important matters. If Hitler comes, there will be no grain board. He will take the grain, and everything else, and that will be the end of this country.
What are we doing about it? The people of Canada are not yet wide awake to the grave dangers we are now facing on the Atlantic, and in other theatres of war, and more time should be given as to where we now stand.
Since November 20 of last year I have been endeavouring to have two small matters attended to, namely soldiers' insurance and railway fares. Yet this house has never given it a minute or a thought while we look for recruits. We do not seem to be able to get a minute of time to discuss those problems. Instead of a Hitler war, one would think it was a grain war in which Canada is now engaged. Certainly the government of the day has a difficult problem on its hands, and its manner of handling it has not been altogether successful. The first thing the grain board must do is to get rid of the middleman. Then they must close up the grain exchange at Winnipeg, stop all trading in futures and take over most of the elevators with huge profits. There should be an endeavour to arrange with Washington the orderly marketing of wheat, and we must find a solution of not only production but marketing.
Efforts along that line have been made in the United States. We had a chance to bring about provisions for orderly marketing with them two years ago, but I am afraid we have been too late, as has occurred so often. I cannot understand why the grain board is not alive to the situation, and how it would not be aware that grain is going to alien enemies. In May, 1940, I received a return in the house showing the amount of pig iron, scrap iron, nickel, copper and other base metals which went to Germany, Japan, Italy, and yet another potential enemy country. The amounts involved were very large, and showed we were aiding the axis powers both directly and indirectly.
Germany managed to acquire an Atlantic fleet, something which she never had before, as a result of this and of the United States Neutrality Act, with the result that the grain trade was starved for lack of shipping space. I protest against permitting grain shipments to go to Japan through China, because we know Japan will get the whole of it and China nothing, just as unoccupied France had its food stolen by Germany. Certainly drastic action is needed to prevent our grain from reaching Japan. I might, in passing, refer to an article which appeared in a great newspaper called France. This article appeared on January 8, 1941, and while I shall not read it I might point out that it describes what happened to food which was intended for unoccupied France. The article describes

Supply-Trade-Canada Grain Act
how 262 trainloads of food intended for unoccupied France, passed right through to Berlin. The same thing happens to grain which is supposed to go to China, but which passes through to Japan. The Chinese will never see it. Why does Canada do these things while our Victory loan campaign is on?
I believe the country should take a stand on this question. Are we to have no control over shipments of grain to axis powers as we had none over our scrap iron and pig iron? The farmers on the prairies will never get any relief so long as the wheat problem is in politics. It has been in politics as long as I have known it. Since confederation, matters connected with wheat have been inquired into seventeen times by boards, and since I have been in this chamber there have been twelve such inquiries. Yet the grain grower has yet to get the best of it, or fair play.
The people of this country will wake up one day when they find out that the real debates among the people's representatives in the House of Commons are being conducted in secret with no reports. They will have something to say not only about publicity handed out by government agencies and publicity boards but about the stand taken by some of the newspapers. I know of one great newspaper which spent about $35,000 to investigate the grain industry in 1923, 1924 and 1925. The result was that they brought about some reforms in the wheat situation and the export of hard wheat, and their efforts led to the Turgeon commission.
The people in the prairie provinces have been fooled for a great many years. They have been told that the wheat growing industry was a north and south free trade industry rather than an east and west industry, one which would serve the markets of the world. The result has been that they have allowed the middleman to take much more than his share. I know the government has a difficult proposition on its hands. I must, however, point out that while the House of Commons is willing to take four weeks to discuss grain problems, an hon. member cannot get four hours to discuss the war. Is this a Hitler war or a grain war? So far as I can see, it is the former.


Alexander Malcolm Nicholson: I cannot permit this item to pass without making a few observations. I realize that hon. members representing agricultural constituencies have occupied a good deal of the time of the committee, but, judging by our accomplishments in debate, I think we might have saved ourselves the effort. A short time ago the Minister of Finance made certain changes which cost the treasury of Canada about $10,000,000. He

made those changes without protest from any hon. members. However, although hon. members representing agricultural constituencies have time and again appealed1 to the ministers concerned to give more favourable consideration to agriculture, our appeals seem to have fallen on deaf ears.
I listened this evening to the hon. member for Wood Mountain. His observations would leave the impression that he was an excellent medical doctor, but would not convince one that he is a mathematician or that he derives . his livelihood from the sale of wheat. I rather expected he would proceed to include the indemnity he will receive this year, and then make the computation that in selling a thousand bushels of wheat, and including his $4,000 indemnity, he would be receiving $5 a bushel for his wheat. If all farmers could include other items of income we would no doubt have a different picture. The fact remains, however, that the price to the farmer is 50 cents a bushel for the average grade at the average shipping point. I suggest that it is not fair to include payments the farmer will Jcceive this year for wheat he is not going to grow, or to include in his income payments available under the Prairie Farm Assistance Act. That is a fund to which contributions are made by the farmer as a result of having 1 per cent deducted from his grain cheques. The price the average farmer is still receiving is 50 cents a bushel for average grades at average shipping points.
As the hon. member for Melfort pointed out, this price is quite inadequate, having consideration for the cost of living and the amount of money available in other quarters in Canada. Two years ago the question of finding more money for agriculture was one which a great many people might have been worried about; but we are now spending possibly over $4,000,000 a day on our war effort, and there is no reason under the sun why we could not spend an additional amount each day to see that those engaged in the important war effort of producing food should receive their cost of production. It was the Minister of Munitions and Supply (Mr. Howe) who said some time ago that it was not conceivable that people should be asked to produce at a loss. If it is not conceivable that men in industry should be asked to produce at a loss, it should follow that those engaged in producing food should not be asked to produce at a loss.
This vote provides $104,000, and the first item under it is the chief commissioner, Canada Grain Act, $12,000. Then there are two commissioners at $10,000 each and four assistant commissioners at $7,500 each. I have no doubt that these men are well qualified in

Supply-Trade-Canada Grain Act
their respective fields, but an industry which is paying to its primary producers only 50 cents a bushel has no business paying to those who are administering some phases of the industry salaries ranging from S7,500 to $12,000. If those who are responsible for formulating agricultural policy had to change places with those who produce our foodstuffs and make a living from selling wheat at 50 cents a bushel with the cost of production as high as we have it at the present time, they would soon make many radical changes in the agricultural policies of Canada. Those who are advising the minister should consider finding ways and means of seeing that the initial price to the farmer for 1941 is increased above that which is proposed.
There has been a good deal of discussion regarding the Winnipeg grain exchange, and the hon. member for Wood Mountain has said that he has heard no good reason why the exchange should be closed. I suggest that he travel through that area of Winnipeg where those who have made fortunes on the grain exchange live and compare their environment with that of those who produce wheat on the farms. He would then see a good reason why the exchange should be closed. I am not at all impressed by the answer given by the minister this year as well as last that it is the desire of our customers across the ocean that this market should be kept open. I cannot see what purpose is being served that warrants this expenditure of time and labour. I am sure that the men engaged in making a living round the Winnipeg grain exchange are well trained, and I feel sure they could make a more valuable contribution to our war effort than they are now making. The time has come when every able-bodied person in Canada should be making his maximum contribution in the field where he is most needed. The operations of the grain exchange at this particular stage do not warrant the tremendous outlay of material and capital necessary to maintain that institution.
Some mention was made by the minister of the complaint of the hon. member for Rosetown-Biggar about the generous relief provided for certain brokers. My understanding of what the minister said is that they were simply carrying out the terms of the Canadian Wheat Board Act. Section 8, paragraph (i) reads:
8. It shall be the duty of the board:-
(i)	in selling and disposing of wheat as by this act provided, to utilize and employ without discrimination such marketing agencies, including commission merchants, brokers, elevator men, exporters and other persons engaged in or operating facilities for the selling and handling of wheat, as the board in its discretion may determine;
(j)	to offer continuously wheat for sale in the markets of the world through the established channels: Provided that the board may, if in its opinion any existing agencies are not operating satisfactorily, take such steps as it deems expedient to establish, utilize and employ its own or other marketing agencies or channels.
The question was raised by the hon. member for Wood Mountain as to the difficulty there might be. in connection with the marketing of oats and barley and other coarse grains if the exchange should be closed. Section 14 of the act provides as follows:
The governor in council may approve of the provisions of this act being made applicable to oats, barley, rye or flax produced in the provinces of Manitoba, Saskatchewan, Alberta and British Columbia, if the board recommends that such approval be given, whereupon the provisions of this act shall mutatis mutandis apply to such kind of grain as they apply to wheat.
The machinery is already there to look after the marketing of wheat- and coarse grains in western Canada. In view of the present critical condition in agriculture the minister should not delay any longer in seeing that the suggestions made by the hon. member for Melfort and others, that -the grain exchange should be closed for the duration of the war, should foe carried out. I have here the minutes of the fifth annual meeting of the Canadian Federation of Agriculture. Some of this material has 'been drawn to the attention of the minister before, and I urge that he consider carefully the opinions of this national organization. They recommend:
That because of the restricted deliveries and in order to maintain the income of the western farm home, steps should be taken to increase the initial payment for wheat delivered in the crop year of 1941.
I am not going to suggest the price that should be fixed, except that it be a parity price. It has been said in the committee and throughout the country that farmers can get by with fairly low prices, and 40 cents a bushel has been mentioned. On large mechanized farms where the land and equipment are free from debt it has been shown that they can operate without going into further debt, but there is one important consideration that has been lost sight of. In the past many farmers operating large holdings have been able to go into the nearby towns and cities and engage seasonal labour for a few weeks. With that seasonal labour they have been able to operate combines and tractors.


Thomas Vien: I am sure the hon. gentleman will see how far afield he has gone from the item before the committee. The question of hiring men and operating tractors
and the price of wheat has nothing -to do with the item -under discussion. During the greater part of the evening I -have tolerated such discussion, but there has been a great deal of it



Supply-Trade-Canada Grain Act
which was not relevant. But the hon. member is now much beyond any latitude allowed previous speakers.


Alexander Malcolm Nicholson: I am not the first one who has discussed the price of wheat.


James Angus MacKinnon: I think it was arranged that hon. members should have very wide latitude under this item.


Thomas Vien: Was the extent of the latitude defined?


James Angus MacKinnon: It was very broad.


Alexander Malcolm Nicholson: I think the understanding was that the questions which have been discussed this evening should be permissible. I do not see any items in the minister's estimates that would cover them.


Thomas Vien: I was not here this
afternoon. So long as the minister states that there was an agreement, I am quite satisfied.


Alexander Malcolm Nicholson: Thank you. I appreciate your ruling.
I was pointing out that farmers who have been able to operate large holdings with up-to-date equipment have been able to take advantage of cheap labour over short periods, but those who have been available to them to operate combines and tractors over a few weeks in the summer months have gone back to the cities and towns and lived on relief for the remainder of the year. The price available to the farmer for the production of his commodity should be higher to enable those engaged in farming operations to maintain a decent livelihood during the entire year. The price proposed of 70 cents a bushel, Fort William basis, was quite inadequate in peace time, and now with rising costs of production, and with farmers and others restricted so drastically, I think the minister should give immediate consideration to increasing the price of 70 cents.
I should like to draw to his attention the recommendation of the Canadian Federation of Agriculture:
That until such time as the price of wheat reaches and is maintained at a level commensurate with the price of those things that enter into the cost of producing wheat, a processing tax of not less than fifty cents a bushel be placed on all wheat milled for domestic consumption. The revenue from such tax to be added to the aggregate price received for the wheat marketed and to be available for the purpose of increasing the initial payment to the farmer.
I know some members of the house are concerned about increasing the cost of bread. Bread is a necessity of life and should be
[The Chairman.]
kept down to a low figure, but the price which the farmer gets for the wheat that enters into bread is much too low when one considers the price the baker receives. The price of bread is altogether out of line with the prices of a great many other commodities that one buys in a store. I think a 50-cent processing tax for wheat used in domestic consumption is one which the minister should consider carefully.
Here is another recommendation of the Canadian Federation of Agriculture:
It is anticipated that at the end of the current crop year all existing grain storage facilities will be filled. We believe that these surpluses of bread grains may become an important factor in our war effort and that in the meantime they should be regarded as a reserve which will ensure a constant supply of wheat to Great Britain in the event of possible crop failure in the course of the war, and also be available to meet the needs of the people of Europe when the war has been won.
This objective should not be realized entirely by the farmers themselves, because it concerns the entire people of Canada that these supplies should be carried and be available when needed by Great Britain,
The next suggestion of the Canadian Federation of Agriculture which I should like to commend to the minister is this:
We recommend that the dominion government be asked to provide financial assistance to farmers for the construction of adequate farm storage facilities to enable the farmer to adjust his deliveries in accordance with the system outlined above.
In the United States in peace time they have given very generous assistance in providing farm storage, and what has been done in the United States in peace time should certainly be done in Canada in war time. The large payments made to elevator companies for storing the grain will amount to large sums of money during the war period, and it is only fair that the farmers should be given some of the financial assistance given to these large corporations so that the farmers can store grain on their farms. The next recommendation is:
We recommend that the dominion government authorize the Canadian wheat board to make cash advances against that portion of the 1941 wheat crop which the farmer may deliver under the arrangement outlined above during the crop year 1941-42.
Again, in this connection, might I mention that in the United States they have made advances to the farmers on some twelve commodities which are stored on the farm. With the elevator storage facilities we are going to have available in Canada this year, the government should lose no time in announcing that a cash advance will

Supply-Trade-Canada Grain Act
be made to the farmers for the grain stored on the farm. I know there are certain difficulties in administering a scheme of this sort, but I believe it will be found that the grain handling companies in the west this fall will be very glad to cooperate with the department in arranging the details of such a scheme. It will be found that deliveries to the elevator companies will be restricted and that elevator agents will have a great deal of spare time on their hands, and I would suggest to the minister that he enlist the cooperation of all the well-known grain handling concerns with a view to having them inspect the grain on the farm, determine whether the granary facilities are suitable enough, determine the grade, and then make arrangements for an advance of at least a portion of the initial price so that the farmers will be able to get some cash to meet their taxes, store bills, and other pressing obligations which they will have to meet this fall.
The hon. member for Macdonald mentioned that farmers with good credit had little difficulty in getting advances from the banks last fall. But the situation is more serious this year, and in a great many parts of western Canada the banks have pulled up stakes because branches were losing money and have gone where there is better fishing. The result is that many farmers find themselves miles and miles away from a bank, and they are quite unknown to bankers at a distance and are unable to get any line of credit. It would be very easy for the minister and his department to make arrangements with the elevator companies to inspect the granaries, which, of course, would have to be up to standard, and have them determine the grades, and the elevator companies would assume the responsibility of seeing that the terms of the agreement were carried out because they would have an interest in the delivery of the grain. Insurance would have to be provided to make sure that the government would not lose as a result of theft or destruction of the stocks of grain by fire. At any rate I would urge that the minister give careful consideration to this last recommendation which was endorsed by the Canadian Federation of Agriculture.
In conclusion, I would again urge the Minister of Trade and Commerce, in cooperation with the Minister of Agriculture, to see that money is made available in some way or another so that those who are performing a very useful service in producing the food necessary in Canada and for Great Britain are able to get the cost of production necessary to give them a decent standard of living.
14873-235J


Ernest Edward Perley: I have one or two questions I want answered by the minister. I asked a few this afternoon, and his answers did not satisfy me. We have, however, learned something to-night. We have learned that we have a critical situation, what might be termed an emergency. We have learned that the board cannot do without the grain exchange. I am just wondering what the board will do if the grain exchange decides to close of its own accord. Just what would the board do in that event? I should like to have that question answered because it is a possibility. While the hon. member for Wood Mountain was speaking, a letter delivered by air mail was put into my hands. I have it in my pocket now, and it states that the members of the exchange are definitely anxious that it should close and they would like to have a little more information with respect to the request from Britain that they should remain open. This letter states that they are under the impression that the board had asked Britain to make that request.


James Garfield Gardiner: Who writes the letter?


Ernest Edward Perley: That is all right. I do not have to mention that.


James Garfield Gardiner: It does not mean much unless we know who writes it.


Ernest Edward Perley: Much has been said this evening with respect to the regulations. I am not going to take time to go into that now, but the minister might tell us if the last one, dated May 30, is the final one. Can we tell the farmers when we go back home that that is the one under which the board is going to operate with respect to the 1941 crop?
I wish to make this statement. There is no justification for the board to pay eight cents a year, representing the present rate per bushel, on grain stored in annexes in western Canada. We know the cost of these annexes, how they are operated, and that some of them are earning over 75 per cent on their cost and will earn it again next year; and neither this board nor this government are justified at this time, when we have a war on our hands, in paying out about $25,000,000 more for storage on the grain than they should pay. By order in council they should cut the rate, if they are going to allow these operations to continue, to not more than 2i cents a bushel a year on grain stored in the annexes. That will save this country $21,000,000 and will not do an injustice to anybody.
I asked the minister certain questions. He has ignored them, and I want them answered.
I want to know, did he have any knowledge that certain Canadian exporters refused to

Supply-Trade-Canada Grain Act
have anything to do with that deal or with any deal which would probably mean that grain would be going elsewhere than to Britain-especially, to Japan?
I want to know what brokers were used in this deal.
I want to know how much of the 575,000,000 bushels is now carried in options and how much is in cash grain?
If the minister wants to answer these questions one by one as I go along, it may facilitate getting the item through. I am going to have an answer to each one of these questions. I have asked those four to start with.


Thomas Vien: Shall the item carry?


Ernest Edward Perley: No, it will not. I am
going to have answers to those questions.


Thomas Vien: No hon. member can
say, "I want an answer." An hon. member can put a question, and if the minister does not reply to the satisfaction of the hon. member the remedy remains in his hands; he may vote the item down if he can. But no hon. member can challenge the house or the committee by saying, "I want an answer." Also, I have already drawn the attention of the committee to the rule which prohibits tedious repetitions of the same question.
Mr. MacKINNON (Edmonton West); I think the hon. member has been repeating his questions pretty much.


Ernest Edward Perley: Not at all. They have
not been answered.


James Angus MacKinnon: I have tried to give the answers to the best of my ability. The hon. member is now asking if I had any information regarding Canadian exporters refusing to have anything to do with a shipment of wheat which was being treated in a similar way to the wheat we have had under discussion here-for possible shipment to Japan. I have not any such information.
The hon. member asks what brokers were used. I have stated before, and repeat again, that no brokers were used in connection with that sale.
The hon. member asks how much of the supposed or the probable carryover at the end of this crop year is cash wheat and how much is under option. I am sorry I have not the information and am unable to give it at this time.
If there was another question, Mr. Chairman, I missed it.


Ernest Edward Perley: I asked this afternoon a
question with respect to the deal which is pending with regard to changing the July into

the October future; wheat was sold for delivery on the July option and could not be delivered, owing to the facilities at Fort William being such that they could not take it. Is there a deal pending in this respect?


James Angus MacKinnon: I am informed that it is considered inadvisable to give any further information on that point at this time.


Ernest Edward Perley: The minister will admit that there is a deal?


James Angus MacKinnon: No, no, not at all, Mr. Chairman.


Thomas Vien: Shall the item carry?


Victor Quelch: Will the minister say
whether he is giving any consideration to changing section 17 so as to guarantee that the first quota for the farmer shall be protected?


James Angus MacKinnon: The matter is a very difficult one, from whatever viewpoint it is regarded. I can say definitely, Mr. Chairman, that it is receiving the very serious consideration of the wheat board and the government.


Victor Quelch: I suggested an additional subsection to take care of that matter, as the minister will find reported in Hansard to-morrow.


Mr PERLEY:: Does the minister intend to keep the 1941 crop absolutely separate, and not mix it with the crops of 1940 and 1939?


James Angus MacKinnon: That is a matter of government policy, to which consideration is being given.


Ernest Edward Perley: Will the minister tell us how much storage has been paid on grain stored in annexes, also to companies which have terminal elevators rented or leased from the government, let us say, during the last six months?	-


James Angus MacKinnon: It is obvious that, without any notice of such questions, I could not have that information available at this time.


Ernest Edward Perley: Then, is the minister prepared to state that there will be no further regulations by order in council?


James Angus MacKinnon: I would not undertake to state that there would be no further regulations at all. If it is found advisable, in the interests of the wheat grower of western Canada and for the sake of equity, that there should be, the government will give the matter consideration, and, it may be, bring in further regulations.

Special War Revenue Act


Ernest Edward Perley: One other question. Will the minister consider cutting the storage rates on grain in annexes?


James Angus MacKinnon: Does the hon. member mean, at the head of the lakes?


Ernest Edward Perley: No; in the country annexes.


James Angus MacKinnon: It would be very easy to say that the government will give consideration to it, but I do not propose to put it off in that way. I do not think I would care to make any comment at this time on a leading question like that.


Mr. EDWARDS:: May I ask one question directed to order in council P.C. 3849, section 27:
No permit shall be issued for a shipping point without a licensed country elevator.
One of the situations I was confronted with in this regard was that a number of farmers told me that there was no way in which they could make $25 or $30 more easily than to load a carload of their own wheat, thereby saving the elevator company's charges. Do I understand by this regulation that .that is precluded, that a farmer cannot get a permit to load over a platform unless there is an elevator at that point? In other words, if there should happen to be a siding on my farm, I cannot have a car spotted there and load my wheat if I so desire? Is that the purport and intent of that regulation?


James Angus MacKinnon: I am informed that loading over a platform is not precluded. I want to get this question answered, hoping that the item may go through. The reason why the man is signed up to an elevator point is so that the Canadian wheat board will have a record of the yield in the district.


Alfred Henry Bence: There is one question I want to ask regarding advances on wheat stored on the farms. It has reference to the long negotiations that took place last year between the minister and the wheat board and the elevator companies. I ask the question because the point may come up this year.
Last year the minister gave a statement to the press that the elevator companies had refused to agree to a plan for advancing loans on the security of farm-stored grain with a limited federal guarantee. What was the suggested limited federal guarantee?


James Angus MacKinnon: I am sorry I do not place the hon. gentleman's reference.


Alfred Henry Bence: The minister will recall the prolonged negotiations which took place. He
stayed in Ottawa a considerable time after the house adjourned in August, and negotiations went on between the elevator companies, the wheat board and the banks. Some kind of proposition was worked out; one, I think, was suggested by the provincial governments. Then he made the statement that the plan could not be worked out because the elevator companies refused to agree to the limited federal guarantee that was offered. I wish to find out how far the government and the wheat board had gone in the way of guaranteeing to the banks advances on wheat stored on the farms.


James Angus MacKinnon: It was found on investigation that it was not necessary to give a guarantee, even limited.
Progress reported.
It being five minutes after eleven o'clock, the house adjourned, without question put, pursuant to standing order.
Tuesday, June 10, 1941.