1942-03-19

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

Mr. HANSON (York-Sunbury):: 1.	What is the value of the property of all kinds held by the custodian in respect to interned persons?
2.	Is there an advisory committee to the custodian of enemy property?
3.	If so, what are the names of the members of such committee; when were they appointed, and by whom were they appointed?
4.	What salary, allowance, fee or other emolument, including travelling expenses, is paid to each member of the advisory committee; and vvhat is the total amount paid to each member since his appointment?


Mr. McLARTY:: 1.	The value of property of all kinds (including life insurance) held by the custodian in respect to interned persons is $1,185,797.73.
2.	No, but from October, 1939, to March, 1940, the Hon. Mr. Justice W. M. Martin of the court of appeal of Saskatchewan acted as special adviser. Mr. Justice Martin was paid
an allowance of $15 a day, when absent from his home in connection with this special duty, and actual travelling expenses. The total amount paid to him was living allowance (126 days at $15 per day), $1,890; travelling expenses, $366.35; total, S2,256.35.
3.	See answer to 2. Mr. Justice Martin was asked to serve as special adviser by acting custodian, the Right Hon. Ernest Lapointe.
4.	Answered by No. 2.


SASKATCHEWAN EMERGENCY LANDING FIELDS
Mr. PERLEY:: Will the emergency landing fields at Mooso-min, Broadview, Wolseley and Indian Head, Saskatchewan, be further developed?


Mr. HOWE:: This is a matter dealing with the future, and it would be very hard to answer yes or no. We might decide in 1945 that we would make some addition; so I suggest that it be dropped.


Ernest Edward Perley: Nothing in the near future, then? .


Clarence Decatur Howe: I cannot say.


UNEMPLOYMENT INSURANCE
Mr. ESLING :: 1.	Since the Unemployment Insurance Act became operative on July 1, 1941, how much has been placed in the consolidated revenue fund as a result of contributions under this act by employees, employers and the government?
2.	How much of this money has been invested by the government and in what securities?
3.	As at December 31,	1941, how many
employees came under the operation of the Unemployment Insurance Act?
4.	In the event of an employee enlisting before having made the 180 payments which entitle' him to benefit, is there a refund of payments to the employee and the employer?


Mr. McLARTY:: 1.	Gross combined employers' and employees' contributions, $31,964,958.79; government's contribution, $6,389,431.91; total, $38,354,390.70.
2.	The cost price of the invested principal at present held for the fund (invested entirely in Dominion of Canada bonds), $38,031,177.51.
3.	Up to December 31, 1941, approximately
2,200.000	books had been issued to persons working in insured employment.
4.	No.


RADIO BROADCASTING
Mr. ROY:: 1.	Does Madame Pierre F. Casgrain broadcast over the C.B.G. for the Department of National Defence or for the war services of the Department of Finance?
2.	If so, what sums has she been paid for such services since the 1st of January, 1941. to date?
143S
Questions


Mr. RALSTON:: Mr. Speaker, so far as the Department, of National Defence is concerned the answer to the first question is no, and the answer to the second is, none.


Mr. ROY:: 1.	Is Madame Pierre Casgrain in charge of, or does she take part in any of the broadcasting programmes of the C.B.C.?
2.	If so, (a) what is the nature of these programmes; (b) what remuneration does she receive for each one; (c) how much has been paid to her by the C.B.C. for all services from January 1, 1941, to date?


Mr. THORSON:: 1.	Yes.
2.	(a) (i) "Femina", a 30-minute weekly programme devoted to women's interests.
(ii) News of women's activities-15 minutes five times a week.
(b)	Nil.
(c)	Nil.
assistance to medical students joining


H.M. FORCES
Mr. CHURCH:: 1.	What action has the government taken regarding the application made by the medical faculties of Canadian universities for some direct assistance to those medical students who are entering the medical branches of His Majesty's forces?
2.	AVhat representations have been made, by whom and for how many students?


James Layton Ralston: I should like to make a verbal answer to this question, because it gives me an opportunity to make a statement with regard to the question of policy in assisting medical students who intend to enlist in the armed services. With regard to part 1 of the question, it is estimated that the armed services will, during the ensuipg fiscal year, require probably 800 medical officers, of which 50 will be needed by the navy, 600 by the army and 150 by the air force. As a matter of fact the army could take on almost at once probably 150 medical officers; and the air force, I am informed, probably 75 to 100. These requirements are being brought to the attention of the medical profession throughout Canada and the Canadian Medical Association is cooperating by sending out a questionnaire to all members of the profession.
I come now to the direct answer to my hon. friend's question. In order to assist in increasing the future supply of medical officers for the armed forces the medical services of the navy, army and air are cooperating in a scheme designed to aid worthy students of medicine who propose to enlist. This arrangement is the result of a thorough study of the medical needs of the armed forces, and has been proposed after consultation with the

medical faculties of the universities throughout Canada. Briefly the scheme is as follows.
The universities will be asked to accelerate their courses, while maintaining the same standard of training, by reducing the normal summer vacation periods to a minimum. In this way a student will be able to cover his full course in a considerably shorter period. By this acceleration of courses students will be debarred from earning in the long summer _ vacation. The plan is designed to make up for this loss of income. It is proposed that the armed services will enlist students at any time during the two final years before they qualify for a licence to practice. They will thus, during this period, become members of the armed forces and will then be granted leave with pay and subsistence allowance which will enable them to complete their courses and to obtain a licence to practise.
This assistance to medical students who intend to join the armed forces will be supplemented by the Department of Labour, in cooperation with the provincial governments, by extending the present system of scholarships. These scholarships, up to a maximum of perhaps $300 per year, will also be open to other worthy students who because of the acceleration of the courses will be deprived of the opportunity to earn during what would be the normal vacation period.
The students who will be eligible for these scholarships will be those who are in need of such assistance, who possess good academic standing and who give satisfactory assurance toN serve in the national war effort in the capacity in which they have been trained.
There will also be some expenditure involved in connection with additional costs to universities on account of the accelerated courses.
The Department of Labour is now in correspondence with the provincial governments with a view to enlisting their cooperation in implementing this extended plan. I may say the provincial governments, or at least some of them, have already cooperated in connection with the plan for scholarships, which is already in force.
In the result, medical students who intend to join the armed forces will, after the first year, receive assistance from the Department of Labour, in cooperation with the provincial governments, by way of scholarships, during the earlier years of their courses, and during the last two years they will receive pay and subsistence allowance as duly enlisted members of the armed forces.
That is the answer to the first part of the question. The second part of the question is:
What representations have been made, by whom and for how many students?

Alaska Highway
I would point out that we have received representations from Doctor Cody, the university of Toronto; Doctor James, of McGill university; Doctor Harvey Agnew, of the Canadian Medical Association; Mr. Edward B. Campbell, Chairman of the Canadian Association of Medical Students and Internes, of the university of Toronto; Doctor J. C. Meakins, of McGill university; Doctor Stanley C. Best, of the Medical Society, university of Toronto; Mr. Robert T. Noble, of the College of Physicians and Surgeons of Ontario, and Doctor Deadman, of Hamilton. There may have been other representations, but those are all that have been called to my attention.



QUESTIONS PASSED AS ORDERS FOR RETURNS


[Stage Direction]
Mr. O'BRIEN:
1.	What are the contemplated total requirements of, (a) copper, (b) brass, (c) aluminum, needed for the new Canadian National Railway depot at Montreal?
2.	Is the new Canadian National Railway depot at Montreal to have authorization releasing copper for the roof?
3.	If so, in what quantity?

Mr. DIEFENBAKER:: 1.	What is the location of and the capacity of each of the interior or terminal grain elevators owned or otherwise controlled by the government of Canada whether in Canada or the United States?
2.	Which of said elevators have been leased to private corporations or individuals?
3.	What was the actual amount paid by each to the government as rental by each of the lessees thereof during the years (a) 1940, and (b) 1941?
4.	What is the amount paid to each of the said lessees for wheat or other grain storage during each of the said years by, (a) the government of Canada directly or indirectly; (b) the Canadian wheat board?


DOLLAR-A-YEAR MEN
Mr. ROY:: 1.	How many one dollar-a-year men are actually in the employment of the government?
2.	What are their names, qualifications and addresses, and on what date was each one appointed?
3.	For what firm or companies did each one work before entering the service of the government ?
4.	Which of them still work for these firms or companies?
5.	Have any of such firms or companies received contracts from the government?
6.	If so, on what date or dates and for what amount in each case?



WAR APPROPRIATION BILL


[Stage Direction]
Hon. J. L. ILSLEY (Minister of Finance) moved that the house go into committee at the next sitting to consider the following resolution:
Resolved, that it is expedient to introduce a measure to provide that a sum not exceeding $500,000,000 be granted to his majesty towards defraying any expenses or making any advances or loans that may be incurred or granted by or under the authority of the governor in council during the year ending the thirty-first-day of March, 1943, for the purposes and subject to the terms, conditions and limitations set out in the resolution to provide that sums not exceeding $2,000,000,000 be granted to his majesty, which resolution was referred to the committee of the whole on the 17th of March, 1942; and being one-fourth of the said amount of $2,000,000,000.
He said: His Excellency the Governor General, having been, made acquainted with the subject matter of this resolution, recommends it to the consideration of the house.
Motion agreed to.


Right Hon. W. L. MACKENZIE KING (Prime Minister) moved:: That the name of Mr. Ross (St. Paul's) be substituted for that of Mr. Bence on the select committee on radio broadcasting.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mr. J. R. MacNICOL (Davenport):: Mr. Speaker, I Should like to ask the Prime Minister if he is now in a position to answer the question I asked on the sixth instant about the Alaska highway. In the agreement between the United States and Canada tabled yesterday there is no answer to that question. I should like to ask the Prime Minister how the road from Edmonton, on the south, is to reach Fort St. John. There is only one bridge across the Peace river, and that is at the town of Peace River. Is the road to go over that bridge?


William Lyon Mackenzie King: Mr. Speaker, I must
apologize to my hon. friend, because I quite forgot about his question. However I shall look into the matter. I do noit know whether or not I shall be able to enlighten him, but I shall get the best information I can.
Privilege-Mr. Fauteux



PRIVILEGE-MR. FAUTEUX REFERENCE TO STATEMENT OF MR. LACOMBE IN DEBATE ON MARCH 16

Mr. GASPARD FAUTEUX (St. Mary):: Mr. Speaker, on March 16 the hon. member for Laval-Two Mountains (Mr. Lacombe) made a statement in the House of Commons against which I wish to protest. With your permission I shall read the statement as it appears on page 1322 of Hansard:
The people will understand now why the government of Quebec, placed as is the federal administration under the thumb of high finance, has mobilized its millionaire friends, its election parasites, its vote "telegraphers" from Montreal and Quebec to steal the recent Quebec East and Montreal-St. Mary contests.
I think, Mr. Speaker, -


Some hon. MEMBERS:: Order.


Mr. SPEAKER:: I understand the hon. member to say he was rising to a question of privilege either with respect to himself or to the house.


An hon. MEMBER:: He is the hon. member for St. Mary.


Georges Parent: So far as the hon. member has gone, I have not noticed any question of privilege. Of course I do not know what he will read subsequently.


Gaspard Fauteux: The hon. member for Laval-Two Mountains has said the election in Montreal-St. Mary riding was stolen. As the representative of that constituency I am keenly interested.


Mr. LACOMBE:: Mr. Speaker-


Some hon. MEMBERS:: Sit down.


Liguori Lacombe: I rise to a point of order.


An hon. MEMBER:: There is no point of order.


Liguori Lacombe: I rise to a point of order.


Some hon. MEMBERS:: No.


Liguori Lacombe: Mr. Speaker, standing order 36 is as follows:
If anything shall come in question touching the conduct of any member, or his election, or his right to hold his seat, he may make a statement and shall withdraw during the time the matter is in debate.
I ask the hon. member to withdraw during the time the matter is in debate.


An hon. MEMBER:: He has not made a statement.


Liguori Lacombe: He has made a statement.


Georges Parent: The hon. member can hardily withdraw before he has made a statement. The hon. member will please continue.


Liguori Lacombe: I rise to a point of order. The hon. member has made a statement.


Georges Parent: 1 did not hear what the hon. member said.


Gaspard Fauteux: I said that the declaration and the accusation of the hon. member for Laval-Two Mountains are absolutely unjustified. He is accusing the provincial Liberal party of having stolen the election in St. Mary, when he should know, as everybody in my constituency knows, that I did not have any help from the Liberal organization of Montreal.


Some hon. MEMBERS:: Order.


Georges Parent: Order. I would ask the hon. member not to introduce controversial matters into a denial of statements that have been made by the hon. member for Laval-Two Mountains. He is entitled to deny any statement that was made by the hon. member for Laval-Two Mountains, but he is not entitled to enter into an argument to justify his statement.


Gaspard Fauteux: I am referring to the speech of the hon. member for Laval-Two Mountains in which he said that the election was stolen in my county. It is very disagreeable to be obliged to talk about this matter, but I believe it is my duty to justify myself as well as my electors. I believe if the hon. member for Laval-Two Mountains knew the facts he would be the first one to say that this statement is unjustified.


Liguori Lacombe: Absolutely, no.


Gaspard Fauteux: Only last Monday Mr. Periard went to the Liberal organization in Montreal and offered his services-


Liguori Lacombe: I rise to a point of order.


Georges Parent: Order, please.


Liguori Lacombe: I ask that the hon.
member-


An hon. MEMBER:: Too late.


Some hon. MEMBERS:: Order.


Liguori Lacombe: -withdraw immediately.


Georges Parent: Order. I understand that the hon. member has completed his statement on the question of privilege. There is no debate upon a question of privilege. The matter is now closed.


Liguori Lacombe: 
Georges Parent: Order. The hon. member need not withdraw. There is no debate on this matter.


Liguori Lacombe: I want to make a debate on this question raised by the hon. member.


Georges Parent: I ask the hon. member to take his seat. The hon. member for St. Mary is entitled to make a statement on the question of privilege and he has done so. There is no debate.


Mr. HANSELL:: I rise to a point of order. Standing order 36-


An hon. MEMBER:: Too late.


Ernest George Hansell: It is not too late; I have the floor. Standing order 36 reads:
If anything shall come in question touching the conduct of any member,-
I claim that the member has risen on a question of privilege which is involved in the term, "if anything shall come in question touching the conduct of any member." The standing order continues:
-or his election, or his right to hold his seat, he may make a statement-
Which the hon. gentleman has done-
-and then shall withdraw during the time the matter is in debate.


Georges Parent: The hon. member is
referring to the rules of the house which deal with the conduct of an hon. member. There is nothing before the house regarding the conduct of the hon. member; there is only the question of privilege in regard to an election that was held in Montreal.


Liguori Lacombe: I rise to a point of order. It is not only the conduct of the hon. member, but the conduct of this election.


Some hon. MEMBERS:: Order.


Georges Parent: The hon. member cannot raise a point of order on a point of order. The point of order has been taken already and it has been ruled upon; therefore that is the end of it.	[DOT]



INQUIRY OF THE MINISTRY


[Stage Direction]
On the orders of the day:
Mr. W. J. WARD (Dauphin):: I should like to direct a question to the Secretary of State (Mr. McLarty), which is based upon a resolution which I have received from the Roblin branch of the Canadian legion. The resolution reads-


Some hon. MEMBERS:: Order.


Georges Parent: I assume that the question the hon. member is now proposing to ask is the same as the question that I ruled out of order yesterday, stating that it would have to be placed upon the Older paper. Is that not so?


William John Ward: Yes.


Georges Parent: I cannot allow it to be asked to-day.


William John Ward: On a question of privilege. After all, this question-


Some hon. MEMBERS:: Order.


Georges Parent: Yesterday I asked the hon. member if he could say that this was a matter affecting the privileges of the house, and he said he could not. The hon. member now informs me that he is endeavouring to ask, on a point of privilege, the same question that I ruled out of order yesterday. The position now is the same as it was then, and the hon. member should not proceed with the matter on the orders of the day.



WAR APPROPRIATION


[Stage Direction]
The house resumed from Wednesday, March 18, consideration of the motion of Mr. Usley that the house go into committee on a resolution to provide for granting to His Majesty sums not exceeding $1,000,000,000 to assist in enabling the government of the United Kingdom to defray expenditures incurred in Canada for war purposes, and to provide for a loan to the government of the United Kingdom of $700,000,000 without interest.
Mr. VICTOR QUELCH (Acadia):: Mr. Speaker, just before adjournment yesterday I was pointing out that this group was wholeheartedly behind the proposal to give to Great Britain one billion dollars' worth of goods. Moreover, I urged that this should be carried further so that there might be an agreement between the allied nations under which their total resources would be put into a common pool for a united effort without incurring debt as between themselves. I justified this proposal on moral grounds, and I stressed the fact that to carry it out in the most equitable way possible it would be essential for each one of these nations to maintain its production at a maximum level, to curtail all non-essential services and to be satisfied to endure a standard of living no more than sufficient to ensure its people a state of health and efficiency.
This proposal is merely an extension to an international basis of what we have been

War Appropriation-Mr. Quelch
advocating on a national basis. We have urged in the past, and we still urge to-day, that the dominion government should be given the, credit to finance its war expenditures without incurring debt, and to drain off any surplus purchasing power through taxation rather than by the sale of bonds.
Under the proposal before the house we are giving to Britain a credit of one billion dollars to buy Canadian goods, but to-day we are not draining off the total amount of purchasing power by taxation but are using to a large extent public issues of bonds. However, we realize that the government is not supporting this proposal on moral grounds.
Under the present system the repayment of large war debts embarrasses both the creditor nation and the impoverished debtor nation. What appears to be worrying the Minister of Finance is how if we become a great creditor nation will the people of Canada be able to buy the goods accepted in payment of war debts. It never seems to enter the minister's head that the people of Canada could be given a credit to buy these goods in just exactly the same way as we are making a credit available to Britain for this billion dollars' worth of goods. Under a balanced economy, one in which the physical demand of the people was made effective against the total production of the country, this would be no problem. As a matter of fact it would be regarded as a great blessing. It would be merely a question of making the physical demand of the people effective against the production of the country. This might be done, if there were unemployed, by instituting large-scale public works projects, by increasing the amount of old age pensions, and by paying pensions to people who were physically incapacitated. Or, on the other hand, it could be accomplished by putting into operation a price discount on the sale of goods in exactly the same way as to-day we apply the sales tax for the opposite purpose.
While we support the principle of giving these goods to Britain we are not in accord with all the provisions of this resolution. I shall leave clauses 2 and 3 of the resolution to discuss at the committee stage, but I want now to refer to clause 4, which reads:
4. That the governor in council be empowered to raise by way of loan under the provisions of the Consolidated Revenue and Audit Act, 1931, such sum or sums of money not exceeding in the whole the sum of one thousand million dollars ($1,000,000,000) as may be required for the purpose of defraying the expenditures and making the purchases referred to herein, the principal and interest of any such loan to be a charge upon and payable out of the consolidated revenue fund.

We are opposed to the general principle of that clause. We believe in the principle of financing the war without incurring debt. We believe, and the minister himself has admitted time and again in this house, that the real cost of a war is met while the war is being fought, met by the loss of lives and the destruction of property and war materials. We cannot see why, if the real cost of the war is met during the war, we should allow any financial costs to be left to be paid afterwards. In other words, we are saying that we want to have the right to consume goods during the war but we also want the right to issue claims against future generations for the payment of these goods. We maintain today, and we have maintained consistently since the declaration of war, that if people can go through the war maintaining a decent standard of living and come out of it no worse off than they were at the start, they should consider themselves indeed lucky. It would be advisable, no doubt, to allow the purchase of a limited number of interest-free war savings certificates so that people may be allowed to put aside a certain amount of money to take care of certain eventualities; in other words, put aside a little for a rainy day. Therefore we urge again that to the extent that taxation and the sale of interest-free war savings certificates fail to meet the government's expenditures the services of the Bank of Canada should be utilized. When I say that, I do not use the expression "interest-free", because it makes little or no difference what the rate of interest in that case would be, because all profits of the Bank of Canada come back to the people and therefore the interest charges also come back after all expenses are met. I maintain that under such a proposal there would actually be far less danger of inflation than under the present method, because the Minister of Finance has admitted that fundamentally the main reason for taxation and the sale of bonds is to curtail the spending of the people, to withdraw money from circulation.
What actually happens when bonds are sold? You may see high-pressure salesmen persuading people to buy bonds who in reality are not in a position to buy them, and the result is that within a short space of time a certain number of these bonds are resold to the chartered banks. When these bonds are sold to the banks, the banks create the money with which to buy them, so that the very purpose which the government is trying to accomplish by selling bonds is defeated by the chartered banks in creating that new money.
Not only that, but in the 1941 victory loan campaign $135,000,000 was created by the chartered banks for the purpose of lending

War Appropriation-Mr. Michaud
to people to buy bonds. There you have, on the one hand, the government selling bonds in order to withdraw money from circulation, and on the other hand, you have the chartered banks creating $135,000,000 of new money with which to buy those bonds, thereby defeating the very thing the government is trying to do. As time goes on, undoubtedly more and more of these bonds will be sold to the chartered banks, which in effect will be inflationary.
On the other hand, if you were financing this war on a true pay-as-you-go basis, withdrawing all surplus purchasing power from circulation by taxation, it would not be possible for the chartered banks to expand the amount of money in circulation by the purchase of bonds from the people.
In closing, I should like to say that we do appreciate the fact that step by step the government is being compelled1 to recognize the soundness of so many of the things which we have been advocating in the past. For instance, consistently from 1935 to 1939 we propounded the principle that anything that is physically possible and desirable should be made financially possible. To-day nobody would dispute that principle, which was ridiculed time and again during those five years. To-day, however, the government never misses an opportunity of emphasizing the fact that no financial restrictions of any kind whatsoever shall be allowed to impede our war effort. I only hope for the benefit of the people of Canada as a whole that the government will continue that policy after the war and tell the people then that no financial restrictions of any kind whatsoever shall be allowed to impede our peace effort. But already, I am afraid, we are being told by people in high places that when the war ends the screws will be put on and people must be prepared to tighten their belts and cash in on their war savings certificates to provide the money to take them through the depression which many people seem to think s inevitable after the war.
Another thing we advocated time and again was that when there is a condition of unemployment it is possible to have a creation of money for the purpose of providing full employment by a further expansion of the production of the country; and again we were invariably met with the cry of "inflation". But the very first declaration of the Minister of Finance, then acting minister of finance, in this house when he was discussing the war policy was that there would be monetary expansion for the purpose of providing employment and expanding our resources. If it is sound to have monetary expansion for the
purpose of providing full employment in order to develop the resources of the nation at war, surely it should be just as sound to do the same thing in peace, in order to raise the standards of living of the people.
Another point. When we advocated monetary reform in the past we were often accused of supporting something of an inflationary nature. However we always stressed the need for price control. I dealt with this last session. The minister himself ridiculed in past years the idea of price control; yet to-day we have it.
Lastly, as to making goods available to Britain without debt, let me assure the minister that we in this corner will be only too pleased to cooperate with him at any time he finds it necessary or desirable to do those things which we have been advocating consistently in the past.


Hon. J. E. MICHAUD (Minister of Fisheries) :: Mr. Speaker, may I crave your indulgence for a few moments in order to keep the record straight and, also to alleviate the worry of the leader of the opposition (Mr. Hanson) about the security of Britain because of a statement which I am reported as having made in the city of Quebec on February 7 last. The outburst of the hon. gentleman yesterday does not worry me a bit; in fact, it amuses me. I have known him for many years, and know that he is given to periodic attempts at making purges in his opponents' political camps. In fact I recall that two years ago he started on a rampage to purge the Liberal party of the Prime Minister (Mr. Mackenzie King), and started the campaign with the slogan, "King must go." He carried it on for a while in the House of Commons, but he woke up one morning to find out that he was the one to go and that he himself had been purged of the leadership of his party. I am not at all worried about the purge which he attempted yesterday, but I want to keep the record straight, and I think that the house and, indeed, the hon. gentleman, is entitled to the explanation he asked of me.
The statement I made in Quebec was reported by the Canadian Press on February 9, and was made on the Saturday evening previous, the seventh. The statement, as reported and as placed on Hansard yesterday is, so far as I can recall, as accurate a translation as could be made of the words which I used while speaking in the French language. However, they must be taken with the context of the whole speech. I do not accept the interpretation placed upon them by the leader of the opposition. What I did say was this:
We will have furnished enough provisions and arms by that time to pay off all debts that Canada owed to British capital.

War Appropriation-Mr. Michaud
If the house recalls the elaborate and clear statement made yesterday by the Minister of Finance, and reapproaches them in the light of the statements made on January 26 by the Prime Minister with regard to our lease-give proposals to Great Britain, I believe it will be agreed that they justify the conclusion which I drew from these proposals when I was trying to explain them to the electors of Quebec. At this particular meeting I was trying to justify this so-called gift to Britain and the financial proposals which had been made public by the Prime Minister just a few days previously, and to show that they would be not only in the interests of Britain, but in the interests of Canada, of Canadians, and of my listeners.
These proposals were not popular, not merely in that district but among very loyal people in Ontario and all the provinces of Canada.


Mr. HANSON (York-Sunbury):: Who?


Joseph Enoil Michaud: Oh, well, "who"! Among many people, because of the misunderstandings to which the leader of the opposition referred yesterday, and which were so important that the Royal bank review of March had to make reference to these misconceptions which appear to have arisen concerning the policy of the government. I had, as most other hon. members have had, to explain privately the nature of these proposals to various individuals. I had also to explain them publicly and to refute arguments in opposition to them which had been made to me, not only in Ottawa but in many places in Canada, and which were repeated in this campaign. They were to the effect that the government was ruining Canada, w^as making the country bankrupt by giving $1,000,000,000 to Britain; that it was ridiculous to assert that it was a good transaction for this country, and that the money was not needed by Britain in view of the fact that shortly after this proposal was made Britain turned around and offered to China a loan equal to half the amount which we were giving to Britain. These are the arguments which I was trying to contradict, explain and refute when I drew in my own language the conclusions to which my hon. friend objects.
I stated also, as far as I can recollect, that as a result of these proposals and these transactions, Britain would be owing to Canada alone as much money as the British capitalists had invested in Canada. I think that will be the consequence or the result of the transaction. And, putting it in my own way, I said that that would mean the financial independence of Canada from British capital.
I never said or intended to say that it meant the political independence of Canada.


Richard Burpee Hanson: I never said that you did.


Joseph Enoil Michaud: It had no reference to the moral obligations of Canada towards Britain. I used the words "financial independence" to designate the relation in which Canada would be towards British investors in this country after this financial arrangement had been concluded.
Mr. DIEFENBAIvER: What is the amount of their investment in Canada?


Mr. ILSLEY:: There is a complete equality, just as my hon. friend says, so far as dollar obligations are concerned: $700,000,000 will be owed by Canada to Great Britain and $700,000,000 by Great Britain to Canada.


Richard Burpee Hanson: To the rescue.


Joseph Enoil Michaud: I would not dare use that word for fear I might be attacked for disloyalty, but this is the fact. Now I continue my argument. I said that Canada being independent financially it followed that she would be independent economically. I never said or intended to say that our economic relations with Britain would thereupon cease and discontinue for the future. I meant that it was a logical consequence of the fact of our being economically or financially independent, as I understood it. I said that would be the consequence of the financial proposals. I presume it would be another logical consequence that we should be free to find markets where we wished. Is it not a fact that being financially, economically independent one of another we would be free to enter into relations with and find markets in Britain or to do so wherever we might wish?


An hon. MEMBER:: Have we not that right now?


Joseph Enoil Michaud: I never claimed that we had not that right, but we shall be freer to make such arrangements. I would refer the house to what the Minister of Finance (Mr. Ilsley) said yesterday, as reported at page 1420 of Hansard, beginning with the last paragraph at the bottom of the left hand corner:
The continuance of these purchases and expenditures, however, involves a continuance of the huge deficit of the sterling area in its balance of payments with Canada which must be financed (very largely at least, perhaps wholly) by Canada itself. We have realized for some time that the accumulation of sterling balances which, as I have explained, was the most important method of financing this deficit, was appropriate only as an interim or transitional form of financial assistance. It involved the growing up of what was nominally a demand liability by Britain to Canada, the future of

War Appropriation-Mr. Michaud
which was bound to involve uncertainties, particularly as the amount grew far beyond anything which could be repaid by Britain in Canadian dollars except perhaps over a very long period of time. Moreover, the indefinite growth of this obligation, if permitted to continue for years, would have led to the existence after the war of what would be in effect a huge and unmanageable war debt owed by Britain to Canada.
I am sure that hon. members can recall the grave international problems and difficulties which arose in the nineteen-twenties and nineteen-thirties from the huge international war debts which had grown up during and immediately following the last great war. Here it is necessary to emphasize the distinction between a domestic debt and an international debt. Domestic debts involve payments between one person and another in the same country and give rise to no problems of currency and exchange. International debts, on the other hand, can be settled only by the transfer of goods and services from the debtor country to the creditor country. Such transfers can be made, only if and to the extent that the creditor country is prepared to accept goods and services from the debtor country for not only principal repayments but also annual interest charges. In other words, the creditor country must be prepared to see an increase in its imports or a decrease in its exports, or both. Experience has shown that countries will accept these payments in the form of imports only to a limited extent on balance, if at all. To do so, of course, exposes their producers to more intense competition from abroad and the excess of imports serves as a deflationary influence which appears to be unwelcome in normal peace times. On the other hand, the inability of debtor nations to make payment when the creditor nation will not readily accept imported goods and services in payment, is bound to lead to international misunderstandings and frictions. Consequently, there is a practical limit to the amount of international debt which can be satisfactorily carried and repaid, particularly when such debt arises from the economically wasteful processes of war. The experiences of the last twenty-five years are too well known for me to labour this point at greater length.
It is to avoid this situation that the lease-give proposals have been made to Britain and have been accepted. What are the implications of these proposals? They imply that we shall have balanced our indebtedness; that each country will owe to the other as much as the other owes; that there will be no accumulated debt in sterling or accumulated credit in sterling to our account in London so as to compel us, to obligate us to accept in payment goods which might come into conflict and competition with similar goods manufactured in our country. My hon. friend saw that point yesterday and clearly elaborated on it, and in this regard we are agreed. That was why I concluded my argument on the occasion I spoke in Quebec by saying that we should have to avoid purchasing, or that we should no longer have to import, from Britain, things
that our own workmen can produce. I meant that instead of making a loan to Britain of so many million dollars in sterling for certain goods, munitions of war, supplies, foodstuffs and so on, instead of asking them to make a deposit of sterling to our credit in London to that extent, we would be better off if we made a free gift of these goods, not being obligated after the war, during the period of post-war construction, to accept goods in payment- and this for the reasons mentioned by those who have already spoken.
The leader of the opposition at page 1427 of Hansard, expressed his misapprehension of what might happen if we had to take merchandise in payment of indebtedness to us which had accumulated on the part of Britain. He said:
The effect of the two operations is not greatly dissimilar for the time being at least. In neither case are we sending actual money.
That is perfectly true, as we are trying to get the Canadian people to understand. We are not sending one billion dollars in dollars to Britain when we make this gift. The money remains in Canada and we are sending goods, munitions, supplies, foodstuffs and so on. The leader of the opposition continues:
It is retained in Canada and gives employment to Canadians. But, as the minister has pointed out, the real difference will be apparent in the post-war period when the problem of final settlement of all war debts will arise.
And later on:
Of course I agree that it depends on what kind of goods they are. We must visualize the acceptance of some goods

I am willing to go with the minister that far.
I agree with that; but what I said at Quebec was that after this war we must try to avoid, as far as possible, accepting from other countries goods that can be manufactured in this country, in order that we may give employment to our returned1 soldiers and our workmen who are now employed in war industries.


Richard Burpee Hanson: My hon. friend's leader called that economic nationalism during the 1935 election campaign.


Joseph Enoil Michaud: Yes. That was a long time ago; since then many things have changed, as many more things will change. Many philosophies and policies will change when the time comes to settle for what is going on in the present conflict.
I have no apology to make and no excuse to offer for what I said. I had before me, as all hon. members had and as the people of this county, had, the Atlantic charter which was signed by Right Hon. Winston Churchill
1446	^	COMMONS
War Appropriation-Mr. Michaud
and President Franklin Roosevelt on August 14, 1941. The fourth paragraph of that charter reads:
They will endeavour, with due respect for their existing obligations, to further the enjoyment by all states, great or small, victor or vanquished, of access, on equal terms, to the trade and to the raw materials of the world which are needed for their economic prosperity.
' I might also support my statement by the text of the lend-lease pact, signed on February 23, 1942, and also to support the conclusions I drew in the closing portion of my remarks at Quebec city. First let me read part of the first paragraph of the preamble of the lease-lend pact:
Whereas the governments of the United States of America and the United Kingdom of Great Britain and Northern Ireland declare that they are engaged in a cooperative undertaking, together with every other nation or people of like mind, to the end of laying the bases of a just and enduring world peace securing order under law to themselves and all nations . . .
Then I go on to article VII:
In the final determination of the benefits to be provided to the United States of America by the government of the United Kingdom in return for aid furnished under the act of Congress of March 11, 1941, the terms and conditions thereof shall be such as not to burden commerce between the two countries, but to promote advantageous economic relations between them and the betterment of world-wide economic relations. To that end they shall include provision for agreed action by the United States of America and the United Kingdom, open to participation by all other countries of like mind, directed to the expansion, by appropriate international and domestic measures, of production, employment and the exchange and consumption of goods, which are the material foundations of the liberty and welfare of all peoples; to the elimination of all forms of discriminatory treatment in international commerce, and to the reduction of tariffs and other barriers; and, in general, to the attainment of the economic objectives set forth in the joint declaration made on August 12, 1941, by the president of the United States of America and the prime minister of the United Kingdom.
I submit, therefore, Mr. Speaker, that I was amply justified in making the statement I did make on the occasion in question; and I think the leader of the opposition was not at all justified in trying to have me "sacked" from the government for making it. Knowing the hon. gentleman as I do, I anticipate that it was not the security of Britain with which he was concerned yesterday so much as the electors down in New Brunswick.


Mr. HANSON (York-Sunbuiy):: Both.


Joseph Enoil Michaud: I think more particularly the electors in New Brunswick. But if it was his intention to impugn or cast any reflection 
upon my loyalty or patriotism, I must say that I have no lesson to learn from him in loyalty, and I will take none. I think that should suffice for the time being. I have always made it my purpose, more particularly during this war, to serve as best I could; and my loyalty is just as real, just as complete and at times just as heart-burning as his. It may not always be as Pharisaical as his; nevertheless it is as real and sincere.


Mr. ROSS (Souris):: If the minister would permit a question, he was reported in the same press dispatch to have said that the Prime Minister was endeavouring to find a happy medium whereby we could prosecute the war at the present time. How about that?


Joseph Enoil Michaud: I never made any such statement.


James Arthur Ross: It was so reported in the press at the time.


Joseph Enoil Michaud: Then if it was so reported, that portion of the report was not accurate. The other was.


Richard Burpee Hanson: I wonder if it is in order to call me a pharisee. I am not particular myself, but -in order to keep the record straight-especially with reference to the agitation of the Minister of National Defence (Mr. Ralston)-I must rise now to a point of order and privilege and ask that this remark be stricken from the record. I am not a pharisee.


Georges Parent: I entirely agree, and I think the remark should be withdrawn.


Joseph Enoil Michaud: I withdraw the word, and substitute "ostentatious" or "vociferous," whichever word is acceptable to the hon. gentleman.
Now, by way of conclusion, I wish to repeat what I have said privately and1 publicly, outside this house, that this proposal of a gift of a billion dollars' worth of munitions, war supplies and foodstuffs to Britain is simply a contribution by Canada to the general war effort, which we should be proud to make and proud to foe able to make, under the present circumstances. Not only will it react to the benefit of our senior partner, Great Britain; it will react to the benefit of Canada herself; and we should have no apology to make and no excuse to offer for this so-called gift. The proposition should be accepted unanimously by all concerned, on all sides of the house, representing all shades of opinion.

War Appropriation-Mr. Church


Mr. T. L. CHURCH (Broadview):: Mr. Speaker, I was pleased to see introduced the resolution standing in the name of the Minister of Finance (Mr. Ilsley) respecting the gift to Great Britain. That is one of the most creditable acts, as far as the government is concerned, since the war started. During the last few years before the war when w.e relied on status and all that, hardly a single member in the front government benches appeared to believe in the British empire.
The resolution refers to the war, and certainly the war overshadows every other subject. Nothing else matters to-day, notwithstanding the fact that we have many domestic problems which have had consideration for almost forty days since the beginning of this session. But those domestic matters amount to nothing; if the war is not won, life will not be worth living in this country.
The resolution is divided into four paragraphs. In my opinion primary matters should come first, and for the remainder of the session we should have a war session. That is what has happened in England. Anyone who will read the English daily Hansard will find that from the first to the last of their sessions the discussions have related entirely to war matters. While in England they have many gigantic domestic problems, problems connected with rehabilitation and matters of that kind, the government over there realizes that those matters must wait until after the war.
Notwithstanding what has been said this afternoon by the Minister of Fisheries (Mr. Michaud), on trade and commerce and markets, Canadians know the truth, and they know in their very bones that everything we have in this country in the way of defence, freedom, civilization and liberty we owe to the mother country and to no other agency. We threw away our defences and our friends, with the result that when war broke out we were back to where we were in 1812, in a condition of complete dependence on the mother country for all the protection, security and freedom we enjoy to-day. The hour has now come when the people of Canada and other parts of the empire must decide one great question. They must decide whether Canada will resume its place as one of the senior partners in the empire, and as a senior dominion supporting the mother country in its fight for freedom and salvation of religion and of the world, or whether we shall be content to be blotted out for all time, and content to permit our empire and all it has stood for through the ages to fall, as have other empires in the past. We read about
what happened in the days of Greece and Rome, and we must ask ourselves whether we are content to wither away. Heaven forfend that this empire should ever pass away like that, because it is before the world to-day as one of the main, last bulwarks of Christianity, freedom and liberty.
I say this because we must remember that parliamentary institutions were firmly established, for all time after the first meeting of the Reformation parliament. Then two little islands at the edge of Europe leaped up and became a great nation, a pioneer in freedom and civilization and liberty, the world over, with the right to worship God as one pleased. The great growth which has taken place from those days of Elizabeth; the inventions of medicine and science; the development of art and the glory of Elizabethan literature-the growth of all these things was phenomenal. The English bible was translated into many languages the world over. Great Britain became the pioneer, the protector of the weak, as she spread the principle of freedom throughout the world. The new world in America owes her a debt of gratitude they can never repay before God. Since this war began, she stands clearly as the trustee for a better world.
The first paragraph of the resolution deals with the billion dollar belated gift, as it is called, to the mother country. The second paragraph refers to the $700,000,000 Great Britain has now spent on war in many ways in Canada, and provides an exchange rate for refunding at $4.45 to the pound sterling. This sum is to be without interest until the end of the war. The third paragraph gives the governor in council power to purchase some unmatured securities and for the repatriation and refunding of these securities. A guarantee is given, and in my view this is a most commendable form of financial aid to the mother country. The fourth paragraph deals with the financing of the billion dollar gift, and makes provision for the payment of any expenditures on interest.
In his speech the minister referred to that paragraph in the speech from the throne which states:
You will also be asked, as an integral part of Canada's direct war effort, to approve a contribution to Britain of vast quantities of munitions, foodstuffs and supplies.
In the second paragraph of the resolution the means have been provided, The sum of $700,000,000 for war purposes owed in Canada is mentioned and the rate is given and this debt taken care of. There is a further stipulation that there shall be no interest until

War Appropriation-Mr. Church
after the termination of the war, and this debt also, I hope, will in time be cancelled as a second gift-it is long overdue.
I was keenly interested in the question raised the other night by the hon. member for Temiscouata (Mr. Pouliot) with respect to the failure of the government of the day to give the country proper information respecting the public war expenditures and the public accounts. That information has been given in the mother country in detail daily to parliament. Over there they have a committee on national expenditures. It meets during the greater part of the year, and through its efforts all expenditures are coordinated, and a huge reduction in capital and maintenance charges made, and a check on every cent spent.
I said back in 1938 that Canada should establish food reservoirs then in the old country to take care of our exportable wheat surplus, something which would have given the mother country, when war broke out, a great advantage and reservoirs there for Canadian canned goods, cheese and other foods and textiles. However, nothing was done about my suggestion, frequently made before the war. The other day my leader referred to what the Hon. H. A. Wallace, Vice-President of the United States, and former secretary of agriculture, had to say in connection with pooling allied food reserves.
The history of courage in this war has been gloriously rewritten on land, on sea and in the air by the wonderful youth of Canada, on active service the world over and on the seven seas, many of whom raced to England to enlist. If we look at the cause and effect in connection with this resolution, we see at once a need for greater coordination and cooperation with Great Britain in new methods of production and man-power to aid her. A billion dollars is said to be a large sum of money, but when in finance you get away up in the sky and in the clouds in figures like that they become so staggering that the larger the sum the less likelihood there is that it will be well spent or that there will be any drastic control over it.
We are entitled to more real information. We are entitled to know the long-range war policy of the government, because since the war started Canada has been given less information than has any other dominion. Certainly we are given less information than are the people of Great Britain. Democracy in Canada cannot be saved by refusing to face facts and by refusing to tell the people the truth, the whole truth, and nothing but the truth about our war effort. As I said here on March 21, 1939, before the war, if the people of Canada and

the other dominions are not given the facts; if they are allowed to know only as much as their rulers will permit them to know, then those people are embarking on a course fraught with a financial condition leading in some instances, as it will in Canada, to bankruptcy.
I believe in the wisdom of telling the people the great danger and peril at our very door and gate. In future let us tell them the truth, the whole truth and nothing but the truth about the whole war and about the danger on the Atlantic and Pacific seaboards, and the real facts, building up from the worst of these facts.
Yesterday some reference was made to our sister industrial province of Quebec. I believe one of the desires and the will of the people of Canada from coast to coast is that sooner or later, before the war is over, that great country of France may rise again and be restored to her place for freedom in all history. She was our great ally in the last war, and 4,000 sons of Toronto, who helped to defend her in the last war, are buried there, sleeping their last sleep until the resurrection morning. I hope enough support will be given against the axis powers to restore that great land to the glory it enjoyed in the past history of the world as one of the great democracies.
We in Canada should be a united country from coast to coast. Wolfe and Montcalm lie buried together at Quebec, and the inscription on their monument attests the unity of the races in this country, as described in the motto on their memorials on the Plains of Abraham. Britain and France in the last war fought for a better world and for a better fate than has befallen them. I have always believed in the principles of confederation since I have been in this house-of the old Cornish battle cry of "each for all and all for each." There is no use in our thinking that this is going to be an easy victory. We have no divine right to victory. This is going to be a most difficult, hard and heavy task and we should face that fact before it is too late. Facts are facts, and we should take our lessons from the past. So far we have lost the war and almost every battle; we have had no successes except some in Libya, and one or two others.
The money to be voted by this resolution will help in a small way to restore confidence in the mother country as to what the dominions are doing to aid her in her hour of greatest peril. One thing that makes the vast expenditures under this resolution necessary is the fact that after the great war Great Britain and France, the two great democracies, threw away their defences. Not only did they

War Appropriation-Mr. Church
throw away their defences, they threw away their friends. These two leading nations listened to the pacifists and those who pleaded that there should be friendship for Germany, that country which has put 20,000,000 men, by beastly war and savage mechanism, under the sod of Europe in the last three generations. These two great nations, Britain and France, disarmed at great cost, thus causing this war, and now this resolution is necessary in order to help the mother country to save the world and civilization. If the truth were told, Munich was necessary. As I said in the house last year, Munich was necessary because the two great democracies, Great Britain and France, were obliged to buy an armistice on terms which were humiliating because together or singly, Britain and France were in a helpless state and even they were no match for the greatest aggressor of all history, Germany.
That was not Hitler's fault. I suggest that it was the fault of Great Britain because she listened to the babble of the pacifists and decided to disarm, urged on to do so by Canada and the United States. I should like to give all praise to the Prime Minister of Great Britain, Mr. Churchill, who spoke in this chamber only a little over three months ago, with you, sir, presiding so ably. As he said himself the other day, he considers himself a servant of the House of Commons, a child of the House of Commons. If he is a child of the House of Commons, then he is a child who is beloved and respected the world over for what he has done in this emergency after Dunkirk, although he is being blamed to-day because there have been some reverses, as war always brings. History shows that the great Prime Minister Pitt and Napoleon also had reverses. You must expect reverses if you go to war, but Britain and her brave and faithful allies will yet smash the axis powers.
However, something should be done by the government of the day on a greater production effort in Canada. Lord Beaverbrook is to come to Washington shortly. As I said the other day, he is a native of Maple, Ontario, although he lived in the maritime provinces nearly all the time he spent in this country. He is a great Canadian, and I think his services and those of Viscount Bennett should be used by this dominion at home and abroad in a total war effort. When Lord Beaverbrook comes to Washington he should be consulted by the Department of Munitions and Supply and come to Ottawa to help us about our production. I think I am fair enough to admit that the government should be given a great deal of credit for what they have done since the war started, especially as they did not believe in war or armaments and all that kind of thing. They believed, with the
pacifists, in the League of Nations, disarmament, the Monroe doctrine, the Kellogg and Locarno pacts, collective security and all those pacifist things. It cannot be expected that we would be able to develop an army in a year or so. While our production has been fairly good, it should be three times as large as it is and we shall not have a total war effort until that point is reached.
We are told that our production is to improve, but it may be too late. Hitler seeks to capture the future with what he is doing at the present time. We hope to win the war, but do the opposite by talking of what we will do in 1943. If we are going to do anything about production, we shall have to improve things all along the line. I ask the Minister of Munitions and Supply (Mr. Howe) to bring down a white paper to show us what has been done in the way of production so far, and the long range policy one is out in Britain. We are told that our war production is two or three times as large as that of the last war, but that kind of thing does not mean anything. I submit that the services of Lord Beaverbrook should be sought in this vaster production effort. He should be asked to come to Canada to give us the benefit of his experience. I hope the government will invite him to come here when he arrives in Washington-he was to be here with Mr. Churchill but was sick-and I have no doubt that he will be ready to give this country every assistance.
Shipbuilding should be our first priority. As I pointed out here, two years before the war started, Great Britain had 2,000 fewer ships than she had in 1914, and yet there were 5,000,000 more mouths to feed. Great Britain must import 94 per cent of her foodstuffs and nearly all her raw materials. We made a mistake in the imperial conference of 1937 by not joining New Zealand and Australia in a vast, gigantic empire shipbuilding policy. In 1936, 1937, 1938 and 1939 I urged an empire shipbuilding policy and the opening up of all our old shipbuilding plants to build ships to carry necessary food, munitions, wheat and other supplies to the old land.
I believe that our production has been tremendously increased since the last war. Mr. Churchill told the British House of Commons that Great Britain's production was twice that of the United States. The United States to-day is somewhat in the position of Great Britain after Dunkirk. They were not ready, they were not prepared. Great Britain is doing a wonderful work; her production is going ahead by leaps and bounds. Mr. Churchill has said that England's production is four times greater than it was in 1917.

War Appropriation-Mr. Church
We are told that ours is twice what it was in the war of 1914. We might as well say, for all the good it will do, that it is a hundred times greater than it . was during the Boer war, or a thousand times greater than it was during the battle of Hastings.
Before the war started I contended that there were too many in this house with the Geneva type of mind. Pretty nearly all those on the government benches were of that type of mind, as were nearly all the members of nearly all the parties here. They all believed in such shams as the league, and collective security, which is only collective security for the world with an armed Britain. The Minister of Finance and the minister with the high sounding title, the Minister of National War Services, went over to see the Geneva sittings as Canada's delegates, before the war, and they came back thoroughly imbued with the Geneva idea and lack of vision not to have seen the folly of it all. We thought we could do without an army and a navy and retain our freedom, but how under the rise of Hitler in Germany from 1935 was civilization to be maintained without being armed? Take the example of the great disaster in the Pacific. We let Australia down by not supporting her at the imperial conference of 1937. We should have made a grant to the Singapore base for Pacific protection and adopted the Jellicoe report which called for a vast empire shipbuilding policy, for a naval policy, for the training of 5,000 cadets for the navy in Canada and a naval college, and for the building up of a merchant marine, all urged in 1937 by me. In answer to all the pacifists in and out of this house, I say now to them, quoting from Jeremiah, chapter 37, verse 19:
Where are now your prophets which prophesied unto you, saying, The king of Babylon shall not come against you, nor against this land?
As we see how close the axis powers now are to our front door on the Atlantic and Pacific, and the war came in September, 1939.
I am not one of those who both in and out of this house preached such pacifism. Hon. gentlemen before the war were entitled to their pacifist views, and while I have criticized pacifism, the whole world was imbued with that idea for years before the war, and especially the democracies, one of which. France, it is too bad to say, went down and out. But I would say this, that if I was one of those who had changed their views on pacifism after the war broke out, I would far rather have come to the House of Commons and sat on the penitent bench and said that such views brought the world to this terror and disaster, and that I had made a grave mistake. I would not now go around Canada, 
posing as a super-patriot as some of them have been doing. It has taken two months for us to have one word of discussion in the house on our war effort in connection with this resolution to provide money and munitions and food for the mother country. It was the pacifists who caused the war; there is no doubt about that. But for them we would never have had this war and the dislocation and awful disaster of the whole world, and dear knows, no one knows as yet who is going to win the war-nobody knows that fact yet. We had the idea preached to the youth of Canada in schools, state colleges and universities that the profession of arms was demoralizing. The pacifists held that war was wrong, that it was wrong to take life in the defence of one's country; but as a matter of fact they in their taxes were prepared to pay others to join the army and go out and fight when war came and do that very killing act. They did not propose to go to war themselves-oh, no. When war came they would stay home and preach pacifism and say, "now, soldiers, get to the war". Ruskin, himself a man of peace, has spoken about war, and its results in this passage from "The Crown of Wild Olive":
When I tell you that war is the foundation of all arts, I mean that it is the foundation of all the high virtues and faculties of men. It is very strange to me to discover this; and very dreadful, but I saw it to be quite an undeniable fact. The common notion that peace and the virtues of civil life flourish together, I found to be wholly untenable. Peace and the vices of civil life only flourish together. We talk of peace and learning, and of peace and plenty, and of peace and civilization, but I found those were not the words which the muse of history coupled together: that on her lips the words were-peace and sensuality-peace and. selfishness-peace and death. I found, in brief, that all great nations learned their truth of word, and strength of thought in war; that they were nourished in war and wasted by peace; trained by war and betrayed by peace, in a word, that they were born in war and expired in peace.
War in my opinion, Mr. Speaker, will never be abolished in any country of the world until men learn to do their duty to their neighbours much better than they have done in the past. When they do that, war will cease.
There is nothing said in this resolution about two or three matters I want to mention, and one is shipping. How are we going to get these supplies and munitions across the Atlantic ocean? Our great shipping losses have been outlined by Mr. Churchill in the British House of Commons. It is deplorable that the British empire should have suffered the loss of these empire bases off Ireland. It has resulted in the loss of the lives of our brave soldiers and seamen and an awful tonnage. If we had not had these bases in the last war we should have

War Appropriation-Mr. Church
lost that war, and in view of their importance I urge upon the government that something be done to acquire them now or force their acquisition at once.
We are spending nearly $4,000,000 a day on the war, and yet there is hardly one item of war expenditure in the public accounts. Part of that $4,000,000 is being spent by all the various outside bureaucratic control boards and commissions. Does the auditor general audit the accounts of each of these boards in detail? No. Then what check or audit is there upon them, and by whom, as they spend money like water, uncontrolled. Will the government consider the appointment of a select committee of the house on national expenditure, as they have done in Britain? The committee in Britain has done a great deal of good. But the committee on war expenditure here, on which $25,000 was spent, did not find out anything because the first motion they passed was that they should not inquire into past expenditures. They reported here and their report is in the archives. Sooner or later the House of Commons will have to see that they recover at once control over every cent of these huge expenditures.
This resolution also shows the necessity for an empire war cabinet. The war is now all over the Pacific, north and south. Japan is roaming around 15,000 miles there and has the absolute command of the sea. She has submarines which can cross the Pacific without refueling. If you had a million men, as Mr. Churchill said, you could do nothing at all in the Pacific because Japan is moving around all these islands in the Pacific, north and south, and around Australia like a circus and nobody knows which will be attacked next. So I urge upon the government that something be done about a war cabinet to get a united war control and union and empire cooperation at once.
In England a civil war was fought for nearly one hundred years before parliament acquired control of public expenditures, but in this country we lost that control as soon as the war started. These outside boards and commissions can spend what money they like. A bureaucratic form of government has been set up and some 25,000 orders in council have been passed-and parliament meeting here exercises no control over public expenditure. You can hardly find an item in the public accounts that relates to the ivar. Parliamentary control is a myth. The public accounts committee should be meeting, and should be broadened into a committee on national expenditure as they have in England, which has saved the taxpayers millions of pounds by coordinating expenditures. Such a committee should go into details of all ministers' expenditures such.
for instance, as the rates of pay of soldiers. They are most inequitable, and that question should certainly come before such a committee at once, and rates of pay be adjusted. In Great Britain the audit committee has effected great economies, and it would be a great help to the Minister of Finance here to have such a committee examine into government expenditure and apply the big stick of retrenchment. In my opinion the minister is taking too much money out of the taxpayers' pockets, and a large amount is going to be expended under this resolution in refunding operations. Half of the war expenditure does not help beat Hitler at all. Most of the expenditures under the other $2,000,000,000 resolution have already been made and all we can do is to conduct a post mortem on the one or two larger resolutions. We just sit here like a lot of coroners or undertakers inquiring into what has been done in the past, expenditures made over which we had no control and cannot reduce a dollar. Bureaucrats have issued countless orders and spent a huge amount of money to be provided by the taxpayers without parliament having any control over the expenditure or even knowing one iota about them. It is a farce. In my opinion this House of Commons will be open to criticism by history and it will be held up as a reproach to Canada and to this parliament that we sat here and exercised no control over expenditure whatever, if we do not at once take action along that line to force a showdown on it.
Let us not be unmindful of our great heritage as the senior dominion. We have neglected to take the simple precaution of training the youth of Canada to defend their country on land and sea and in the air, which is the first principle of preservation of any democratic country.
I charge the lack of support in 1937 of these things to the account of the government. At the imperial conference the government did nothing in behalf of the tie that binds Canada to the rest of the empire, namely the British navy and merchant marine. We did nothing to promote the building of ships or the putting of the merchant marine on a proper basis.
The authors of the empire trade agreements in 1930-32 conferred a great benefit on this country. Britain has always been our best customer. Other customers come and go but she stays on forever. I have read Hansard since the war started, and, except for the text of this one resolution now before the chair, I have yet to discover in it an iota of praise to the mother country for all she has done for us. She has saved us in Canada from the axis powers and has enabled the vast majority of

War Appropriation

Mr. Church
our youth to proceed with their daily avocations and indulge in their amusements and soprts as though there was no war at all. I am not objecting to their doing so, but their first duty is to their country, and they will live to regret what they are doing. What I object to is that our country is not half appreciative enough to the motherland for the British fleet and the Royal Air Force, but for which we would have been invaded long ago, and the enemy would have come up the St. Lawrence, through the maritimes, the central provinces, the prairies and the west and arrived on the Pacific coast. Not only Canada, but all America owes Britain a debt of gratitude that they can never repay. It is too bad that the Anglophobia so frequently expressed from outside in the press and on the radio is still as before the war, allowed to continue and function. Nothing has done more to kill recruiting.
By this vote we can thank the mother country for giving us, before and during this war, freedom of speech, freedom of religion, freedom of thought, freedom from fear, from famine and from battle, and also from the immediate murder and sudden death which the axis powers would have caused us. We do not half show our appreciation of all this. If Canadians would only stop, halt, listen and think, they would know that but for Britain we would have endured, for nearly two and a half years past, the mechanized hordes of the axis powers with all their savagery, brutality and tyranny. They would have swept through Canada and enslaved us, and we would have had to endure the same treatment as the small countries and larger ones of Europe-the concentration camps, the loudspeaker, the spies, the tramping of feet, the sergeant-major, the gestapo, the whips, the spirit of barbarism, brutality and savagery. But for Britain we on this continent would have been compelled to endure these experiences long ago, while Canada fails to awake and has a policy of everything as usual.
In my opinion there have been too many big stick methods in connection with the government's effort. They use a lot of controllers. The air we breathe is about the only thing that is not under control. These controllers are continually making speeches and radio addresses threatening the tightening of belts, employing other big-stick material, and fastening upon us three or four times as many regulations as they have in Great Britain.
As I understand it, all of us in this house are outright in favour of the war; but I do not think it is fair for any group in this chamber or outside it to use the war for the purpose of discussing their socialistic proposals on domestic questions-the function of money, the basis of credit and that kind of thing.

Surely we can wait until the war is over before taking up these matters. Personally I believe in certain economic conservative principles; I do not favour socialist leadership or the creation of a great national payroll, nor do I believe, with the present peril confronting us, the prosecution of the war should be used to put over all sorts of socialist doctrines, to change the functions of money and alter the basis of trade although I believe in sound money brought up to date for changed conditions. I believe in the right to hold private property. I believe that, even after war, the principle of private ownership will prevail- a principle so strongly held in the days of Macdonald and Laurier, when everybody owned some private property; it might have been only a cow, a small mill, a little store, a small farm or a little shop or industry of some kind. We have been slow to see how all this is passing away in Canada and how the people are becoming proletarians. But I strongly favour the postponement of discussions on these matters until after the war. The right of a small, independent business man to hold private property is derived from nature, not from man, and the state has no right to abolish it, but only to regulate its use. Parliament should abolish half these bureaucrats and not competitive business.
I believe that the Conservative party derives its strongest support from the working classes. We have received the votes of working men and trades unionists, because we believe in protecting industry, the farmer, and labour, and in preserving our own work for our own workmen, our own markets for our own products.
I suggest that a bill be introduced in this house similar to one which passed the British House of Commons on February 17 of this year, to restore pre-war trade practices so that business will know where it stands and can function as formerly. It seems to me that our present policy in Canada now is, "never were there so many who knew so little about so much." That is bureaucratic control for you. That is the principle on which these boards and their controllers are acting. We should beware of this hidden agency of aggression before it is too late; it is one of the things we are fighting against in this war, and the extension of this system not only adds to the burdens of the minister in financing the war but will handicap him when it is over, and ruin all competitive business, great and small, with so many artificial barriers and burdens.
It is a staggering reflection that, for all the blue books and statements relating to parliamentary government and returns, and our public accounts, nobody knows from day to

War Appropriation-Mr. Martin
day how many bureaucrats are carried on. the public payrolls or what they are costing the country. When hon. members ask questions they cannot obtain such information, because the figures are not there, and the treasury cannot give them because they don't know as it is done over their heads. The figures given here to-day are wrong for to-morrow. It is too bad that so much money has been spent over the heads of the taxpayers and their representatives in the House of Commons, who have no say or control.
In conclusion, I suggest that a committee on public accounts should be appointed. I should like to see a levelling up of existing inequalities in the pay of our fighting men on land, on the sea and in the air. I believe that if all hon. members had copies of the rates of pay and allowances and realized the inequalities which are shown in them, there would be a sensation. I hope something will be done to remedy this state of things, and force an immediate inquiry into the pay and allowances of our officers and especially the rank and file of our men and also the women's army.


Mr. PAUL MARTIN (Essex East):: In rising to make a few observations, I think that the house will agree, after hearing the speech of the Minister of Fisheries (Mr. Michaud) this afternoon, that he was yesterday put by the leader of the opposition (Mr. Hanson) in an unfair light. The leader of the opposition took certain isolated sentences from a speech made by the minister in the city of Quebec and did not relate those observations to the context or to what the minister had in mind. This proposal cannot be looked upon in a narrow sense. It is one which requires a good bit of explanation, particularly in certain sections of Canada- not only in one-and that is exactly what the Minister of Fisheries was trying to do-to indicate, in quarters where there has already been expressed some opposition to this measure, the reasons for it. I think that, having in mind that there was really a common interest between the minister and the leader of the opposition, on reflection the latter might be prepared to regard the minister's contribution as one that deserves commendation, and not the censure which he gave it. Because the fact is that in many parts of Canada the man on the street, as well as the magnates of finance, have expressed some doubt about the wisdom of this proposal, largely because it has not been viewed in its proper perspective.
What is the proposal which the Minister of Finance (Mr. Ilsley) has sought to embody in this resolution? It is to provide Britain with an opportunity of meeting her scarcity or shortage of Canadian dollars by supplying,
without charge or obligation, munitions of war, raw materials and foodstuffs up to the value of $1,000,000,000. As the leader of the opposition said yesterday, there is involved no transfer of money but simply a transfer of goods. How anyone, in the light of the situation in the world to-day, when our smugness of a former day must be dissipated, could oppose this measure, I say frankly I fail to understand-not simply because this is a gift to Britain, not simply because we are giving financial assistance to Britain in a common cause, though that in itself would be a reason for supporting it, but because in view of our experience during the last twenty years, this, since the occurrence of the present war, is the first real statesmanlike endeavour to meet the whole problem of international debt and international obligation.
Every member of this house will recall the period between 1921 and 1928 when the debtor nations found themselves in the ridiculous position of paying back their debts with money which they acquired by way of loans from their creditors; how Germany was able to pay her reparations, thanks to huge extensions of credit by the United States, her main creditor; how Britain, who received moneys by way of reparations from Germany, was able to pay part of her obligation to the United States out of money which she received from Germany, which in turn had come from the United States. That ridiculous tripartite arrangement provoked every man who had given any serious thought to these problems to consider the necessity of putting the whole problem of international debt in its proper perspective. The exclusive policy of certain countries in the period between 1921 and 1928, which refused to have these obligations paid in terms of goods and services, let alone in terms of currency, created a situation which led to that dismal period between 1930 and 1935.
I for one am therefore prepared to support this proposal on two grounds: First, because if we are going to win this war it will be necessary for all of us to look upon this matter in the light of a common obligation, in the light of the need of pooling our resources and the abandonment of our national and sectional interests; secondly, because the Minister of Finance in this proposal has given leadership not only to our own country but to all the nations of the world and in particular to those who will hold a creditor position when the war is over. That is one aspect of the problem. It seems to me, however, that the problem has another serious aspect. This is' assistance to Britain; but Britain is not our only ally. The war has now reached many fronts, and if we are truly the arsenal of democracy, sharing that position

War Appropriation-Mr. Martin
with Britain and the United States, there comes into mind the whole question of priorities in war production and its distribution. Is this aid to go to only one quarter? Is everything we produce to go to Britain alone? Is it simply to go to Britain and Russia? How can we, in view of the fact that we are a Pacific power as well as an Atlantic power, ignore our obligations to our sister dominion, Australia, who at this time is faced with perhaps a nearer danger than any other country in the world?
We know what the news is in the press to-dajr. I do not comment on its merits because I do not know what the merits are, except that I think someone in this house should refer to it. We have the cry from Australia as expressed in one of the leading publications of that country, in the Sydney Daily Telegraph of yesterday:
Whoever is responsible for the allocation of Canada's war output has lost his sense of values. Nobody has suggested that Australia should be given priority. Britain must have the best share of all production; Russia, India, Egypt and China must have a good share. But the flow of production should be dictated by the urgency of the situation in the various war theatres. ... A London Times statement, that the Pacific battle is a race between American reinforcements to Australia and the Japanese advance ignores the fact that Canada is also a Pacific country. Australians simply will not understand why a Pacific country and a sister dominion should be sending nineteen times more war material to Egypt than to Australia. You would imagine that Canada would put first things first. The United States is wholeheartedly committed to making Australia a major base for operations against Japan. She is doing so because she knows that the west coast of America would be wide open to attack if Australia fell. The west coast means Canada. Australia's defeat would mean the end of the British empire in the Pacific. That is why Canada's export figures for February do not make sense.
That is Australia. To that observation the Minister of Munitions and Supply (Mr. Howe) is reported as saying that the allocation of materials which go from this country and from the United States is supervised by Britain herself. I have no quarrel with that. A war is not run from a barber shop or even from the House of Commons, 'but I do say it is important that there should be some expression of opinion which would give some encouragement to Australia, that this country is determined, in so far as it can, to effect the distribution of the materials of war produced in Canada, consistent with what those in charge regard as in the best interests of our cause.
Yesterday the leader of the opposition related this whole problem of international 
obligations after the war to the kind of world that we were going to have after the war was over, and there resulted in consequence the observation of the leader of the Cooperative Commonwealth Federation party (Mr. Coldwell), in this house, that we had to take account of the future in the light first of all of our mistakes in the past and of what was, he said, the undoubted demand of the vast majority of citizens throughout the world at the present time. He was opposed to the system of free enterprise. He regarded the future as envisaging, if it was to have any sort of order at all, something on a socialistic basis, and the leader of the opposition urged that we should have a system of free enterprise. Then one speaker from the Social Credit party attacked the government because the chairman of the reconstruction committee had expressed the view that the purpose for which we are fighting was to preserve the gold standard, or something of that sort. It is important for someone on this side to express an individual view at any rate, and that I propose to try to do.
In the first place, I think, throwing aside party differences-and that is what I seek to do to-day-and looking at the world from the point of view of the exigencies that will present themselves, we must all be prepared to admit that we are in a transition. I am not so sure that I could accept the doctrinaire attitude of the leader of the Cooperative Commonwealth Federation party, and have a readymade formula for everything that might arise. Nor am I prepared to accept the view of the leader of the opposition that in the world to come we can go on in the laissez-faire manner that we followed in the nineteenth and the early part of the twentieth century. General Smuts, who may be regarded as having some special qualification to speak on these matters; said, in 1941:
Intercourse between the nations will be free, and commerce, economics and finance will be freed from all hampering restrictions and obstructions. As between man and man there shall be social justice; as between nation and nation, there shall be a rule of law, the absence of force and violence, and the maintenance of peace.
Then there was the significant statement of the British foreign secretary, made one month later when commenting on a statement along similar lines by Mr. Cordell Hull. He said:
Institutions and arrangements of international finance must be so set up that they lend aid to essential enterprise and continuous development of all countries and permit payment through the process of trade consonant with the welfare of all countries.

War Appropriation-Mr. Martin
Just to make the record complete, the Prime Minister of this country, speaking at the lord mayor's luncheon in his honour, said:
A new world order cannot be worked out at some given moment and reduced to writing at a conference table. It is not a matter of parchments and of seals. That was one of the mistaken beliefs at the end of the last war.
The hon. member for Acadia (Mr. Quelch), I think it was, criticized the government because of the observations of Doctor James, chairman of the reconstruction committee. I think along with that criticism should be taken the observations of the Minister of Pensions and National Health (Mr. Mackenzie), who, speaking in Toronto in October, 1941, along the line taken by Smuts, Eden and our own Prime Minister, said:
We shall have to develop a kind of government and a kind of economic system that rules out unemployment. No other can survive. Security for the masses . . . must be the first essential of our post-war world.
So when the hon. gentleman talks about this government trying to defend a system that shows so much evidence of imperfection, he is hardly indicting this government fairly or, I was almost going to say, honourably.
What about the future? This whole problem with which we are dealing to-day, trying to adjust the difficulties of debtor and creditor nations in the light of events and circumstances that will, it is hoped, improve the economic condition of the world, will not be met by labels. Hon. gentlemen opposite may say that the world of to-morrow will be socialistic. I must say that I envy them the ability to be comfortable as to the complete adequacy of the point of view which they espouse. But the world of to-morrow possibly will be neither fully capitalistic nor fully socialistic. Surely the system of controls we set up during the period of depression, and elaborated upon during the war, is here to stay, at least for a long time.
I am not saying that the hon. gentleman opposite espouses the doctrine of communism, but I cannot think that communism any longer will have a large group of followers who will support the view that that philosophy is an alternative to war or imperialism. No; if we are to avoid disaster after the war; if we are to avoid the disturbance of national and international economics, strict supervision by the war-time control method over raw materials, foreign trade, foreign exchange, shipping and so on will have to be maintained, along the line of the arrangements that now prevail between the United Kingdom and the United States, and between the United States and Canada. If, for
instance, Canada and the United States are able to cooperate during the war in the matter of control of shipping, exports and imports, raw material supply and the use of balance of payments, it should not be impossible to maintain this type of collaboration after the cease-fire signal is given.
Yesterday the leader of the Cooperative Commonwealth Federation party, commenting on what he said was the lack of appreciation of this problem by the leader of the opposition-and I thought he was a little unfair in that regard-said the time had come when we had to plan our internal economy, when we had to plan the economies of all nations on an international basis. But we in Canada have done that very thing. Our system of price controls; our system of controlling wages, together with the other types of control that we have set up in this country, I venture to suggest represent almost as complete a form of planned economy as one could get in any part of the world. But the great danger is that if you allow that type of planning to proceed on a basis of absolute rigidity, without allowing for some competition between a measure of collectivism and a system of free enterprise, for instance, you will have the very sort of evils which have resulted from totalitarianism itself. So what is required with regard to this whole problem is, I think, not a doctrinaire attitude; not a definite conviction that we have the formula that will solve all these problems; but, first, a recognition that the old order is gone; second, a recognition that laissez-faire capitalism will no longer play the role it has assumed in other days, and that these problems must be dealt with realistically, not on the basis of an idealism which may be desired but which, I venture to suggest, cannot readily be achieved.
To summarize, in so far as guaranteeing a measure of social security is concerned, I would say this. Many of the forms of administrative controls which have become part of the job of government will have to be maintained. Thus far these controls have embraced national economies alone. They will have to receive a wider application. The system of licensing, of banning, of imports and exports; the regulation of exchange rates-all these are among the methods by which these controls have operated; and the greater the control, the greater and more extensive the planning. As I have said, the Canadian price and wage control policy; the control of production; the control of raw and material supplies, and other controls, have given us the type of planning which hon. gentlemen opposite have been urging for years; but now that it is here they refuse to recognize it.

War Appropriation

Mr. Martin


Mr. DOUGLAS (Weyburn):: Planning in whose interests?


Mr. GILLIS:: Nice planning at Kirkland Lake by the labour department.


Paul Joseph James Martin: I have tried to deal with this matter as objectively as possible, but I do not want what I have said to be misinterpreted. With regard to what my hon. friend has said about management and labour, there is no point in not disclosing my views on that matter. I have no hesitation at all in saying that collective bargaining is the proper technique by which problems of management and labour should be dealt with. I would go even further than the government has gone in recognizing the desirability of making effective, even by compulsion, a system of collective bargaining. I say that in order that hon. gentlemen may not in Hansard, for others to read, give the impression that I have overlooked the importance of that problem.
The policy of control; the policy with regard to the intervention of the state in these matters, undoubtedly is one that at least charts the course by which the whole problem suggested by this resolution introduced by the Minister of Finance will be dealt with.
There is nothing further to add, except to say this, that it seems to me there is an obligation on the part of members of this house to look upon the proposal in its true light. We are making a gift, true, but a gift which will enure to our benefit just as much as it will to that of the recipients. Second, it is a forward act in respect of the whole problem of debt adjustment which will face the world when this conflict is over.
I say we must be realistic. I know my own views in these matters have undergone definite * changes. But the world is in flames; we can no longer be satisfied with sectional or national interest. Our resources must become the resources of our allies if we are going to bring together that kind of control, for instance, envisaged yesterday in Great Britain by Sir William Beveridge. That is the spirit in which this resolution should be faced. For one, I look upon, the day that is to come not as a day of judgment but as a day of opportunity.


Mr. J. J. KINLEY (Queens-Lunenburg):: War Appropriation-Mr. Kinley
been telling us what is going to happen in the future. The leader of the Cooperative Commonwealth Federation party (Mr. Cold-well) told us about the social evil that was going on and that in the end we would likely have state socialism. What a time this is to tell that to the people! Imagine telling people in travail, people who are in anguish under their burdens, that there is something radically wrong with their country! It seems to me it is like telling a man who is about to enter the ring to fight that he is all wrong. It seems to me we should wait until the war is over before we try to cause dissension or disturbance among our people who do not believe alike on many of these questions that are brought up at the present time.
I am not fearful of the future as long as we have an intelligent and well thought out programme. I am willing to trust the Canadian people in the future as I have trusted them in the past. I know our country was a good country in the past; I know it is a better country now, and I know it will be far better in the future. The leader of the Cooperative Commonwealth Federation thinks he has solved the problem when he says that state socialism is coming.


Mr. COLDWELL:: Who said that?


John James Kinley: I said that my hon. friend said that.


Major James William Coldwell: I said nothing of the kind.


John James Kinley: The hon. member said to call it state socialism, if you liked.


Major James William Coldwell: No, I did not.


John James Kinley: I think that is what the hon. member meant. The leader of the opposition says that we must hold on to the past to a certain extent. I think we should hold on to what is good, but I think the party he represents are holding on too much to the past. I recall years ago, when reciprocity was proposed in this country, a very prominent gentleman made a speech which left an impression upon my mind1 as a boy. He said that the fishermen's bounty would be imperilled if they did not vote against reciprocity. I remember someone telling me that that was symbolical of the Conservative party, that they always told you that you were going to lose something unless you voted for Conservative principles. I do not believe in the philosophy of either my hon. friend to my extreme left or the leader of the opposition. I know that Liberalism is a marching force, always advancing, never satisfied and never arriving. That is the way the world has progressed in the past, and that is the

way the world will progress in the future. People will go on; they will get better; they will never be satisfied, and they will never arrive at the place where they think it best to sit and rest.
I believe that when the war is over, the people will demand certain things. We are told that this is a land of freedom, but that we shall have to put that freedom on the shelf for the period of the war. We are told that we are being governed by order in council, and there is criticism because that is being done in war time. I do not think any orders in council have been passed that have hurt this country very much. If they did, the government quickly took notice of them. I think we shall actually be benefited by the restrictions that are being put in force. Adversity never killed a nation, but luxury and ease are the things that destroy nations. I believe the people will come out of this war stronger and better, more stream-lined, better able to face the future than they ever were before.
I think one thing the people will ask for after this war is individual freedom. They will want to go back to the old magna charta. They will want a return of the liberty of the subject and freedom of action which were infringed upon for the purposes of this war. The liberty of the subject is the most precious treasure in the hands of a free people. The people will want to be freed from many restrictions. They will want to have liberty of action and freedom of effort. I believe that will be the clarion call of the people of this country; that will be the call put forward when this war is over.
I hear a great deal about the capitalistic system. I do not think the capitalistic system is perfect; but it functions, and it functions at a serious time in the history of the world. I also think it is being cleansed. True, it is being cleansed by war, but the fact remains, notwithstanding the talk against it, that the capitalistic system has served its purpose for hundreds of years.


An hon. MEMBER:: How?


John James Kinley: I do not think it is the use of the capitalistic system that has done any harm, but its abuse, I believe, has done some harm. I have, however, not yet seen anything proposed by my hon. friends to my left which I would be willing to adopt in the place of a proper capitalistic system in this country.
We also hear a great deal about capital and labour. I have had to do with both capital and labour in a small degree in my time, having been associated with both, and in my long experience in the legislature of

War Appropriation-Mr. Lacombe
Nova Scotia and since I came here I have heard a lot about the problems of capital and labour. I do not think capital and labour should be divided into two distinct opposing camps. I think they should be in the same camp together. I think our cooperative effort should not be a class cooperative effort but a cooperative effort by capital and labour, capital representing the savings of the past, and labour representing the efforts of the present. I would not say to this house that we should adopt some socialistic scheme or present some theory as to what capital and labour should do. I would suggest something practicable. I would go to the statute books of Canada and look up the Companies' Act, governing the operation of companies, and I would say that by that law you should elect your directors, part by capital and part by labour. The Prime Minister of this country enunciated that theory many years ago in his book "Industry and Humanity", in which he said there were three parties interested in all industry-the community, capital and labour. Let the community be interested to the extent of making the laws governing business, and let capital and labour be interested together, sitting round a common table in their own right, each doing its part in cooperating to cany on industry, and each having its share. Then all parties will know what is going on, and all will have their rights. None will be exploited either by the leaders of capitalism on the one hand or by the leaders of the trades unions on the other. The majority representing both labour and capital, I believe, would be willing to accept and try that plan, and it would represent a splendid step forward in industry for the future.
I interjected when the leader of the opposition was speaking yesterday on temperance on which subject he made some rather good remarks. I suggested: "Don't you think that is right?" when he said that the governments of Nova Scotia and New Brunswick had restricted the sale of liquor. I regard drink as one of the big enemies. I believe that we cannot drink our way to victory. In the congested parts of Canada there is too much drinking among certain classes but I think we can depend upon the Cromwell qualities of the Minister of National Defence (Mr. Ralston) to see to it that our war effort is kept as clean as possible. Conditions on the train on which I was travelling six months ago were not so good, but the last several times I have been to the maritime provinces I confess that conditions were greatly improved. I think the members of this house might even set the example of turning down our glasses until the end of the war. That
would be a challenge to all our people in Canada. It would save our bodies and save our money, and would undoubtedly be in the best interests of our war effort.


Mr. McIVOR:: If I may ask the hon. member a question, to give a lead to the members of the house, will he turn his own glass down?


John James Kinley: I will, but I do not think I need to.
With regard to our future I still believe in the driving force of private initiative. I believe it is proper and right that there should be the incentive of fair personal gain in business and that we should resolve to accept those common obligations which fall upon the whole people of this country.
In closing, may I recall for the benefit of us all, a verse that struck me from Lowell's "The Present Crisis" which the Prime Minister quoted at the beginning of the war, and *which could be applied and is being thought of all over this country:
Careless seems the great Avenger; history's pages but record
One death-grapple in the darkness 'twixt old systems and the Word;
Truth forever on the scaffold, Wrong forever on the throne,-*
Yet that scaffold sways the future, and, behind the dim unknowm,
Standeth God within the shadow, keeping watch above his own.


Liguori Lacombe: Mr. Speaker, while protests reach us from all parts of Canada against this anti-national and anti-Canadian measure, the government is ready to give Great Britain an enormous sum of money, a step which is detrimental to Canada's defence. I have no words properly to describe this bill, which is the most nefarious, the most imperialistic and the most damaging of any ever submitted to this house.
I fail to understand why, in these hard times, when Australia is grievously threatened, we should neglect our country's defence and sacrifice a 'billion dollars worth of our natural resources. Instead of denying ourselves to such an extent, let us save what there is still time to save in Canada: our homes, families, parishes, cities, which are all living cells of our country. At this tremendously serious hour of our national life, will the Canadian parliament thoughtlessly endorse a policy which is bound to spell our ruin? Where are our gallant airmen, our best-trained soldiers, our courageous sailors? Where are our shells, our tanks, our guns and our machine guns? Overseas is not the proper place to keep our munitions, our armies and our material and human resources. They should be accumu-

War Appropriation-Mr. Lacombe
Iated here, at home, on our own shores. The defence of Canada should be our first and foremost concern. We shall never cease to contend that our own defence is our first responsibility. Our country, our children, our homes, our families, our villages and cities, these make up the sacred inheritance for which we shall fight our enemies on every inch of ground, even unto the supreme sacrifice, the laying down of our lives.
On September 9, 1939, with the support of the hon. member for Quebec-Montmorency (Mr. LaCroix), I fought with all my strength against our participation in the present conflict. Always supported by my hon. and worthy colleague, I then moved a motion of want of confidence and an amendment to the address, in which I opposed Canadian participation in foreign wars.


Mr. DUPUIS:: I suppose this is why the hon. member suggests, in his party's platform, that our soldiers be paid $4 a day.


Liguori Lacombe: I am willing to do it when it is a question of defending our own country and I may say to the hon. member for Chambly-Rouville (Mr. Dupuis) that we should be generous to our soldiers who do not get an adequate pay compared to industrial war workers. They are forfeiting their future and laying down their lives for their country and therefore they are entitled at least to a reasonable remuneration. I hope this is the last time the hon. member interrupts me.


Vincent Dupuis: In 1939, you were referring to the defence of Canada?


Liguori Lacombe: I have always been favourable to the defence of our own country; but I have always opposed militia and defence appropriations as long as our legislation remained unamended, because I foresaw the abyss into which we are sinking further every day.
The government requests parliament to vote a thousand million dollars for England. Another thousand million dollars after all the billions sent overseas in the form of food, munitions of war, troop transports, aeroplanes, ships, guns and tanks! In what a disastrous imperialistic policy our government, still so lull of promise only recently, has now become entangled! How loathsome is this violation of sacred pledges and solemn promises! What has become of the programme of moderate, voluntary and free participation heretofore advocated? It has been torn and thrown into the laps of the war-mongers who prosper on the flesh and blood of our sons. fMr. Lacombe.]


Vincent Dupuis: It is still voluntary and free.


Liguori Lacombe: What a disgusting reversal of policy the plebiscite exemplifies!


Vincent Dupuis: What about the reversal of policy on the part of the hon. member for Laval-Two Mountains?


Liguori Lacombe: How sorry the plight of our dear country and its people who see agriculture dying slowly but surely in Chambly-Rouville and everywhere-agriculture which is our first line of defence! What a strange idea of patriotism has a government which sacrifices the natural and human resources of the country upon the altar of military and financial imperialism! No, things must not, they cannot come to such a pass, and the hon. member who is constantly interrupting me will soon share my views on the matter.


Vincent Dupuis: What about the imperialism of the Canadian party with the oath it demands?


Liguori Lacombe: As was said by our gracious queen herself, God save Canada! God preserve our country from the effects of this anti-national and anti-Canadian bill. God preserve it from a measure steeped in imperialism! Those who vote this staggering sum shall have to answer before their country for a frightful error as well as for the deadly consequences of a deed which future generations and history will denounce. We have made enough sacrifices, Mr. Speaker. We have made too many. The government have neglected the defence of Canada in favour of an unprecedented and unbounded participation.


Vincent Dupuis: Would the hon. member permit me a question?


Liguori Lacombe: Certainly.


Vincent Dupuis: While delivering his speech, will he make us the favour of reading the resolution itself?


Liguori Lacombe: Mr. Speaker, I am not bound to read the resolution, and I do not need the help of the hon. member for Chambly-Rouville in delivering my speech.
Alongside the Prime Minister (Mr. Mackenzie King) and his colleagues, I have, during twenty years of public life, condemned as strongly as I could our participation in the last war. To-day, in the interests of our national defence, I say that this measure weakens and even dishonours Canada. I assert with all the energy at my command that it should at once be withdrawn or repudiated by a majority of the members of parliament.

War Appropriation-Mr. Castleden
(Text) Mr. Speaker, I quote from the newspaper, the Canadian Tribune, of March 21, 1942, the following infamous article, with the headline, "Who are the Enemies of National Unity?" This article was sent to me by a good Canadian citizen, Mr. Joseph O'Connor, who lives at 43 Gledhill avenue, Toronto. He wrote me as follows:
Dear Mr. Lacombe:
As a long-standing admirer of your truly Canadian viewpoint as expressed in the House of Commons, I would like to draw your attention to the enclosed scurrilous clipping taken from the Canadian Tribune of March 21. This appeared in an article headed, "Who are the Enemies of National Unity?"
This article reads in part as follows:
Firstly, that the plebiscite, besides offering a marvellous opportunity to the great democratic forces to make it a mighty demonstration for total war national unity, also offers to the pro-fascist and the quisling "home fronters" the protection and the immunity they need to carry on their vicious agitation. Thus, in Quebec, the Boucliard-Bourassa-Lacombe gang, who quite reasonably may be considered to have plans for a spurious "French-Canadian freedom" approaching that of U Saw's for Burma or Bose's for India,-
The article continues-and I want to ask the hon. member for Chambly-Rouville (Mr. Dupuis) to listen to this very important part:
In fact, it is quite clear that Mackenzie King's reliance on the Quebec M.P.'s to maintain his party government causes him to tolerate and give comfort to the isolationist views of the Lapointe group-for while Ernest Lapointe has passed away his spirit still marches on under the flag of Vichy and Mr. Cardin is the flag-bearer in the cabinet.
What a shame, Mr. Speaker! What a lie! As far as the Canadian party is concerned, I will draw the attention of the house to paragraph 20 of its manifesto:
Finally, respectful of the laws of its country, faithful and loyal to His Majesty the King of Canada, the Canadian party, in these difficult times, appeals to all who believe in the survival of Canada by the defence of our country in the first place, by the protection of our coasts, of our open cities, of our men, women and children. It invites in its ranks Canadians of all races and creeds. At this critical moment, it is the supreme call which the country in danger delivers to its men, to its women, to its children, to its worthy soldiers who were born in its midst and who should grow and fight for the defence of the Canadian soil and the salvation of Canada in the first place. Now that the country is at war and engaged in the conflict, we must undergo the consequences and defend our Canadian territory before all. The Canadian party, loyal and faithful to His Majesty the King, has a passionate desire to see the victory of our arms and of our allies, not by compulsory military service for overseas, but by voluntary enlistment which, according to. the very words of the Prime Minister of Great Britain, the Honourable Winston Churchill, produces "a magnificent war effort".
*44561-934



RAILWAYS AND SHIPPING


Hon. P. J. A. CARDIN (Minister of Transport) :: Mr. Speaker, may I ask the unanimous consent of the house to revert to the order "motions" so that I may lay on the table the reports of the Canadian National Railways, in which members on all sides of the house are concerned. These reports are those of the Canadian National system, the Canadian National West Indies Steamships, the Canadian National Railways Security Trust, and also the report of George A. Touche and Company, auditors of the Canadian National Railways system.
The house having reverted to the order for motions:


Pierre-Joseph-Arthur Cardin: I now table these reports.


Richard Burpee Hanson: Will these reports be distributed to members immediately?


Pierre-Joseph-Arthur Cardin: I understand they are already being distributed.



WAR APPROPRIATION


[Stage Direction]
The house resumed consideration of the motion of Mr. Ilsley that the house go into committee on a resolution to provide for granting to his majesty sums not exceeding $1,000,000,000 to assist in enabling the government of the United Kingdom to defray expenditures incurred in Canada for war purposes, and to provide for a loan to the government of the United Kingdom of $700,000,000 without interest.
Mr. G. H. CASTLEDEN (Yorkton):: By
means of the bill which will be founded upon the resolution now before the house, Canada will purchase $1,000 million worth of goods of various kinds, equipment, raw materials, supplies of foodstuffs, and so on, for Great Britain. All parts of Canada are, I believe, agreed upon this and in favour of this gift, and my purpose in rising at this time is only to point out one thing. I wish to direct to the attention of the house the fact that the purchase price which is. to be paid for these various commodities is; with one exception, to be a cost-plus price. I must express regret at this time that the house has not more details with regard to the quantity of materials available and the respective unit costs of these commodities which we are going to purchase. To get Canada into the production of equipment and supplies we found it

War Appropriation-Mr. Castleden
necessary last year to grant over $100,000,000 to assist various companies in getting into production.
Everyone who realizes that this war will be won or lost on the production lines of the industries of the different countries at war is in favour of the granting of these amounts. We had to get production at all costs, and apparently it is going to be at all costs. Canada was not ready to produce when the war broke out, and all this capital that was required to extend the facilities of production was needed. Canada had to change rapidly from peace-time to wartime production. The thing I want to point out is that practically in every instance costs of production were guaranteed to these companies. Not only were they guaranteed costs of production, but overhead, labour costs, costs of raw materials were taken into account. In practically every instance there were cost-plus contracts, which meant that those engaged in production received cost-plus profit.
It is unnecessary for me to refer to the strike which industry engaged in when it refused to carry out production until it received that consideration. The point is that hundreds of millions of bushels of wheat will be included in this gift, and this is one item in connection with which the producer will not receive even his cost. There is no question about cost-plus. Resolutions that have passed through the house indicate that the price of wheat per bushel will be 90 cents at Fort William, which means that the average farmer will get about 70 cents on the farm. Those who know anything about cost of production, those whose business it is to study and do research work in connection with production costs, agree that the cost is well over a dollar on the farm. It appears to me only logical that if we are to make this gift to Britain, we should do as is done in connection with other commodities that have been supplied, and cost should be guaranteed. Otherwise the farmers can only feel this about it: Canada is making a gift; all the taxpayers are paying their share towards that gift; but those who do the producing, so far as wheat is concerned, will not get their cost. The farmer will bear his share of taxation in the making of this gift; but as regards the one commodity in which he is concerned, and by means of which he is trying to make a livelihood, he is to receive only 70 cents a bushel on the farm for his wheat, whereas wheat costs from $1.10 to $1.20 a bushel to produce. This means that for every bushel of wheat included in the gift to Britain the farmer is making an additional contribution of from 40 to SO cents.
At six o'clock the house took recess.
IMr. Castleden.]
After Recess
The house resumed at eight o'clock.


George Hugh Castleden: Mr. Speaker, before the dinner recess we were dealing with the subject of a gift of a $1,000 million to Great Britain. In that connection we were observing that since the gift was coming from all of Canada, and since all the people were sharing, through taxation, in the giving of that bounty to Great Britain at this time of need, all by whom the goods were produced should be treated alike. If the manufacturer of the equipment, the guns, the tanks, the motor transport equipment; if the processor of foodstuffs, the producer of armaments and so on were to be paid their cost-plus price for the goods which are to be bought by this billion dollars; if the natural resources and raw materials which are to be sent over are to be paid for on the same basis, then we pointed out that it was only just and fair that those producing the wheat, of which probably several hundred million bushels will be purchased, should receive at least the cost of their production. Those people are not asking for cost-plus contracts. They merely ask that in time of need they be paid their cost. It is not just that this discrimination should exist. The state should be as a man of honour. I would urge that in arriving at the price to be paid for the wheat that is to be included in this gift, those in authority should see to it that the producer gets a fair and just deal. Only in this way can some measure of fairness exist.


Mr. H. R. JACKMAN (Rosedale):: Mr. Speaker, since the fall of France the flow of munitions and foodstuffs to Great Britain has been going on in ever increasing amounts. It has now come to the point, however, where as a result of those shipments Great Britain is no longer able to pay with Canadian dollars. She has turned over to Canada $250,000,000 in gold, $400,000,000 in Canadian government and government-guaranteed securities and over $100,000,000 in securities and capital receipts. Indeed, Great Britain has searched so deeply for Canadian dollars that she has taken even the small estates, or interests in the estates, which have been left to people in Britain by their relatives in Canada, and given those people sterling in order that she might get the dollars to send to Canada.
In addition to those amounts, and in order to balance the accounts to a recent date, Canada now proposes to make a loan to Great Britain of $700,000,000. This loan will be offset by British-held, private Canadian securities. It will amount to a collateral loan.

War Appropriation-Mr. Jack'man
This 1700,000,000 will be loaned without interest as long as the war continues. The Minister of Finance (Mr. Ilsley) said, however, that this $700,000,000 in Canadian securities would give Great Britain a continuing interest in Canadian prosperity. That is hardly to be called a continuing interest, I suggest, for it simply amounts to pledging as collateral the $700,000,000 of Canadian securities against a loan of a similar amount. The point is most amply proved when the minister says that if any securities are withdrawn from this pledge, then the proceeds must go to the reduction of the dollar loan itself. In addition to that amount, a further $295,000,000 in Canadian government and government-guaranteed securities is now to be taken over by Canada from Great Britain. After that, Great Britain will have no Canadian dollar securities whatever.
It is, therefore, proposed to this house that in order not to interfere with or prejudice the carrying on of the fight against tyranny, Canada shall grant to Great Britain a contribution of $1,000,000,000 for the purchase of raw materials, foodstuffs and munitions of war in Canada.
I support this resolution as far as it goes. We must send to Great Britain all the essential war requirements that we can possibly ship to the other side. As the Minister of Finance so well said, outside this house:
Finance, of course, is in second place-it is a matter of ways and means. Finance must serve as a smooth running mechanism to expedite rather than retard our progress in mobilizing our physical resources.
One aspect of this measure which appeals to me, and which I am sure will appeal to members of this house, is that it gives the lie once and for all to those carping critics who once said that Canada was insisting on the payment of cash on the barrel-head; that we were unlike the United States, and were not granting as favourable terms to Great Britain as did our great neighbour to the south. It is true that the provisions of the resolution make for a settlement up to the present time; but coinciding with this measure is a proposal to make a contribution of a billion dollars to Great Britain, which for the most part will look after her requirements from Canada for the coming year. This proposed measure goes further than the lease-lend act. Prior to the passing of the lease-lend legislation in the United States, that country took from Great Britain all her American investments. Indeed, they even took from Great Britain her branch plants in the United States. 1 do not for a moment suggest that this was the desire of the administration of the United
States; but it was prior to the entry of that country into the war, and there were certain factions in the United States which had to be appeased, so this course of action had to be followed.
But we in Canada, notwithstanding our closer relationship, and the fact that we were a fighting partner in a common cause, have done almost as much. Whether or not it was a fair policy for us to have pursued, I do not care at this moment to say. Later on, I hope to develop considerations which may affect the judgment of this house. If there is critiscism to offer as to the dealings between Canada and Great Britain, and as to whether or not we have been sufficiently generous, I think the criticism has reference to the general standard of financial morality between partners fighting in a common cause, rather than reference to the actions of this country. Our actions cannot be viewed in quite the same light as those of the United States, because we have been a full-fledged partner from the very beginning of this conflict. This conflict has now proved to have been just as much that of the United States as it has been that of Canada. We can, I believe, assure ourselves that Canada's treatment has been at least as fair as that of the United States because we must also consider the fact that we have been a fighting partner from the beginning, and have had very heavy expenses to bear on that account. But we have arrived at the position now where Great Britain cannot pay Canada further amounts in Canadian dollars. She cannot pay for * further shipments of goods from Canada to Great Britain. She has no Canadian dollars, and Canadian dollars are the only kind of currency acceptable to us. Sterling notes are of no use at the corner grocery store, and Great Britain has not any more Canadian dollars with which to pay us.
We must not forget, sir, that Great Britain made payments to Canada in Canadian dollars, even prior to the outbreak of the war, for armament orders she had placed in this country. She had even sent money over here for the building of armament plants. We are prone to criticize the war preparation of the United Nations for their meagreness, but let it not be forgotten that even in 1936 there were contracts placed by Great Britain for shells in Canada. On Saturday last a delegation of members from this house visited a shellmaking plant, where shells were first made for British account as long ago as 1936; and those shells were paid for by Great Britain with Canadian dollars.
Our government, however, has very wisely said that since it is impossible for Great Britain to pay now, it is perhaps unwise for

War Appropriation-Mr. Jackman
us to run up a large book debt from Great Britain to Canada. There may even be difficulty in the future in being able to collect if we did allow that debt to run up, because *of her own staggering burden of war expenditures. It is also unwise to attempt collection because if in the future Great Britain has Canadian dollars through trading with Canada or with other countries with which to pay us, there will be Canadian wheat and other Canadian products which we shall want to sell to her. Also the bad effect of war debts after the last great war should provide a -warning to all. The attempt of a creditor mation after that war to collect war debts led to the stifling of international trade, and the seeds of the depression of the nineteen-thirties were sown. It is better for us to wipe the slate clean of inter-allied war debts. It is less than mercy; it is hardly more than ordinary justice.
I do not wish to dilate here on the effect of this billion dollar credit to Great Britain on our own economy, but I should like to point out that this money is spent in Canada. It results in the speeding up of our industrial, our mining and, in some respects, our agricultural industries. These industries for the most part have reached levels which have never heretofore been reached in this country. Unemployment has been abolished, and while sacrifices have been many, the general economic level of the masses of our people is higher than it has been in a decade.
Hon. members may wonder why it ii that Great Britain cannot pay with Canadian dollars for further shipments of goods from this country. May I point out that Great Britain gets Canadian dollars only, first, from the sale of Canadian investments which she may have held prior to the war and, second, from the sale of British goods in this country which we are willing to purchase. We have taken all the Canadian dollar investments Great Britain has.
For some time Great Britain endeavoured to export goods not only to Canada but to the United States and to other countries, so that she would be able to pay for her necessary war imports. It was a valiant attempt, but it was impossible because of the exigencies of war. Finally that attempt had to be mainly .abandoned. The pressure on her own industries making war materials and certain aspects [DOT]of lease-lend regulations prevented the exporting by Great Britain of finished products which contained a like material to that which Great Britain received under lease-lend arrangements. So the slogan, "Britain delivers the goods," had to take a very secondary place.
(Mr. Jackman.]
May I point out, sir, just what the loss of trade channels and trade connections means to a little island of 46,000,000 inhabitants whose economic livelihood is vitally dependent upon foreign trade. That great asset of Great Britain is for the time being gone. All her energies, and particularly her industrial energies, are devoted to the manufacture of the weapons of war. She cannot export in order to raise funds with which to pay other united nations. If Great Britain is to make her fullest contribution to the joint cause, then we must help to provide the tools.
I am sure it is not the wish of any Canadian to contribute less than he can to the joint effort. Let me give here a comparison of our per capita contribution with that of Great Britain. Once again it is necessary to refer to dollars as a form of measurement. In Great Britain the per capita expenditure yearly amounts to $512. If one calculates that on a per family basis, he will get some idea of the kind of sacrifice that country is now going through. In Canada our per capita expenditure yearly is $261, almost precisely one-half. We in this country, therefore, are not sacrificing to help a partner who is not waging a full-out war effort.
Many Canadians-and I do not wish to labour this point, because there may be some who will differ from my point of view-feel that this billion dollar gift is only a partial discharge of a debt to Great Britain, a debt long overdue. I shall not mention here the expense to the taxpayer of Great Britain in years gone by in connection with the building of fortifications in Canada, going back to the time of the building of the citadel at Quebec, the general garrisoning of this country or, in more recent times, the protection afforded to Canada as the fifth trading nation in the world by the Royal Navy. It is enough to say that we are now engaged in a common struggle, with common and utmost sacrifice demanded from all.
May I present to the house another angle which we should bear in mind in discussing this measure. If the war had followed a different course from that which it has followed, it might have been that the Japanese would have obtained a foothold on our Pacific coast. There was nothing but the Royal Navy to prevent it. We should then have realized what a full-out war effort meant. We should have had havoc and devastation wrought upon our cities and our people. If Canada were battling the Japanese, then Great Britain would have kept the supply lines flowing from that country to Canada, rather than from the west to the east. We should have found British troops fighting at our side wherever the enemy was *>
be found. We should have been receiving

War Appropriation-Mr. O'Brien
supplies from Great Britain in untold quantity. The question would then have arisen: how can we pay for these supplies? If Great Britain had followed the same course as Canada, such investments as Canadians had in Great Britain would have been stripped from her. Then, instead of a gift of one billion dollars' worth of armaments, we should have had a gift from Great Britain of many billions of dollars worth of armaments. To-day Great Britain is spending over $23,000,000,000 a year on the war. The extent of our obligation could be measured thereby. This gift of ours will amount to just about one-twenty-third the total cost of the war this year to Great Britain.
I hope, therefore, that we can form some true perspective of what this contribution to Great Britain really is. It is only because Great Britain has held the enemy at bay that Canada has not been overrun and probably receiving much larger defence gifts from Great Britain. As the Prime Minister (Mr. Mackenzie King) said during the special session of 1939, as reported on page 22 of Hansard:
There is no portion of the globe which any nation would be likely to covet more than this Dominion of Canada. There is no other portion of the earth's surface that contains such wealth as lies buried here. Nowhere are there such stretches of territory capable of feeding for generations to come not hundreds of thousands but millions of people.
If Great Britain and the other united nations had come to the rescue of Canada, as they surely would, how could we in Canada ever have repaid the debt? If we are to believe the suggestions made by many members from the Pacific coast, there is still not only a possibility but a probability that our coast will be invaded by the Japanese. Canada may yet become a battle ground against the Japanese. Then we shall be receiving aid from Great Britain if it is possible to get it here, and indeed it may be. It may well behoove us now to do unto others as we would have them do unto us.
Last November a delegation of six members of this parliament visited Great Britain. Everywhere they went they received the thanks of the British people for what Canada had done. Again the people of Britain will thank Canada for this generous contribution, because it is a generous expression of partnership in the struggle against tyranny. When we were there, I invariably said that we had not come to receive the thanks of the people of Great Britain but rather to extend to them our gratitude and our appreciation for fighting so bravely and so well and for holding the
enemy at bay, an enemy which was poised for attack only twenty-four miles from the coast of Britain.
Behind this measure is the expectation that the people of Canada will provide one billion dollars' worth of war supplies to Great Britain and the fighting fronts, but this army of one billion dollars is only a yardstick. Once again, it measures only part of the labour, foodstuffs, raw materials and tools of war which we shall send across the oceans. In addition, there is our own notable contribution to the navy, the army and the air force, both at home and abroad. The proceeds of this gift, however, will be carried by _ the sailors, soldiers and airmen of Great Britain one lap farther along the road-the most dangerous lap of all-until they are delivered on Hitler's doorstep. This time, to use a term every Canadian housewife understands, instead of c.o.d., or cash on delivery, it will be victory on delivery.
Mr. J. LEONARD O'BRIEN (Northumberland, N.B.): Mr. Speaker, since May, 1940, when I first took my seat in this house as the member for the constituency of Northumberland, New Brunswick, I have endeavoured to refrain from taking up much of the time of the house. One reason for this is that because of war conditions, virtually all discussion here pertained to war, and very little legislation which is closely associated with the civilian needs of the general public has passed through the house. I have also refrained from taking up the time of the house because of a feeling of futility and frustration, and I think this feeling must be uppermost in the minds of other members of this house. The membership of this house is virtually a board of directors of the Dominion of Canada, and the government is the management. Therefore, irrespective of party affiliations, when the smoke of. battle has cleared away and we are assembled in this chamber to represent our constituencies, it is our duty to see that legislation which will be of benefit to the rank and file of the people of Canada is brought forward. As I said a moment ago, while the somewhat technical legislation which has passed through this house is undoubtedly quite necessary because of the war, it has, of necessity, been of an abstract nature, considering civilian affairs, certainly to anyone engaged in business and giving employment. Because of this atmosphere I have found it difficult to contribute anything, and I only did so if and when I believed that my contribution might be of some use. I am sorry to say that in view of the circumstances that developed, very little attention

War Appropriation-Mr. O'Brien
has been paid to the suggestions I have made, which perhaps is regrettable. I believe other members are in much the same position.
During the month of September it was my privilege to go to Great Britain by bomber with the leader of the opposition (Mr. Hanson) and his party. As one must do in such circumstances, I had to leave the things of life in which I was interested, for taking off across the Atlantic in a bomber establishes a line of demarcation in one's life. What I saw in Great Britain certainly created a very deep impression. During one of the days when our official routine was not too pressing I visited Oxford, that old seat of learning, and I sat in the enclosed garden in Christ Church college. I knew that at that spot a delightful fantasy of childhood had been developed when a don, sitting in one of the upper windows, saw a child playing in the garden below and then and there conceived and wrote "Alice in Wonderland." I never believed that in real life I would experience the weird adventures of Alice in Wonderland, but I am afraid that since coming to this House of Commons I have been involuntarily an Alice in Wonderland, and I think most other hon. members have been also. Alice met strange creatures, the Mad Hatter, the March Hare and the Dormouse, chatting among themselves, apparently making sense to themselves, but to Alice it seemed sheer nonsense. So much of that which I see happening makes me believe that I am passing through the rather weird experience of Alice in Wonderland.
I come now to the resolution before the house. Its purpose and objective is so worthy that little argument is required in support of it. I have, however, somewhat of a personal pride in making reference to it. I hope that it is at long last an indication that the everpresent dollar sign is to be torn from the union jack. In November, 1939, approximately two months after the declaration of war, I was but a private citizen in New Brunswick; but knowing something of our trade relations with Britain through actual contact, I wrote to the then Minister of Finance and suggested that Canada would have to extend to Britain enormous credits because of the purchases Britain was required to make in Canada, and particularly because Canada was perhaps the only country within the empire not then hooked to sterling currency, which meant, of course, that every item purchased in Canada cost the people of Britain a premium. I shall not weary the house by reading into the record my letter to the then Minister of Finance, but I shall quote a paragraph or two of his reply 
to give the sense which I wished to convey. My letter to him was dated November 6, 1939, and the minister's reply was dated December 11, 1939. The first paragraph of his reply reads:
I have just now been able to consider your long letter of November 6 in which you suggest that for the purpose of exports to the United Kingdom the exchange rate between the pound and the Canadian dollar should be taken as par, and that this government should advance the dollars involved and hold the sterling in London until it returns to par after the war.
Here is another interesting paragraph from that letter:
In regard to the specific suggestion you make that we should advance the equivalent in Canadian dollars at par for pounds received by exporters and then hold these pounds until at some future date they are worth par, I must point out two great difficulties. First, to hold sterling in this way would involve in essence gambling on future exchanges and-
I want the house particularly to note this:
-would expose the dominion to dangers of loss in case sterling did not return to power.
That was the attitude in December, 1939. The letter went on:
Secondly, it would add greatly to our already heavy financial burdens to have to borrow Canadian dollars with which to pay the exporters under your suggested plan. Because the war will require all the funds we can spare, it would not be wise to divert money to the purpose you suggest, even though there were no danger of loss involved in it.
That letter, I rather believed, was to tell me that my idea was almost fantastic. Although I wrote on November 6, and the minister replied on December 11, 1939, I have here a clipping, a Canadian press dispatch from London, England, dated November 27, 1939, which reads in part:
The Financial Xeics to-day urged establishment of empire exchange control, emphasizing the need for uniformity in the entire system of exchange regulations throughout the empire.
"Since self-governing dominions can hardly allow us to dictate how they should use sterling funds, it is clear that waste is avoidable only by the establishment of an imperial exchange committee to agree on a common policy," the paper said in an editorial. "This would have to concern itself with more than mere exchange regulations."
On this momentous occasion in the history of this parliament when we are at long last voting this money freely as our contribution toward beleaguered Britain, I feel some little satisfaction if not pride in having suggested to the government at that time, some two months after the war broke out, that such a policy should be inaugurated. It might lead one to believe that the government might, if it could and only would, listen to other members of the house, coming as we do from the Atlantic to the Pacific, who in some small

War Appropriation-Mr. O'Brien
way might make some contribution which would accrue to the benefit of Canada generally.
As I said a few minutes ago, it was my privilege to visit Great Britain last year. One does not go through such an experience, walk through bomb-smashed London and see countless thousands of human beings huddled beneath the surface of the earth in subways and bomb shelters, fearful of breathing the air above; one does not stand as we did on the white cliffs of Dover and peer dimly through the fog towards that unhappy land of France, without returning to Canada with a sense of the dreadful position in which we of this generation find ourselves. Nothing I saw in Britain surprised me, nothing shocked me. It was upon my return to Canada that I can truly say I was shocked and amazed. If I might add a personal note by way of emphasis, I should like to say that so deeply was I impressed with the gravity of the situation and the lethargy of Canada that on awakening every morning for some days, and passing from sleep to wakefulness, involuntarily the thought came into my mind how impossible it was apparently to make the people of Canada realize how grave the situation was. That condition went on for some little time until I analysed it.
I point that out to show that whilst I may have come home perhaps with the frame of mind of an alarmist, that state of mind was very real, nevertheless, and events since have, I think, justified it. I am fearful that in Canada there is a great lack of appreciation of the gravity of our danger. There is something most mysterious abroad in this land, yet the Canadian people are a pioneering people and have always been able to cope with great difficulties and always ready, when the occasion arises, to face the issue. But after travelling across Canada as I did last year, and meeting all sorts of people with very different ideas, and then going to Britain and returning, I must confess that I wras amazed and greatly disturbed.
Just after the fall of Hong Kong and Singapore we were told that, immediately prior to the capitulation of these two strongholds, cocktail drinking was the order of the day. That, sir, is a shocking thing, if it is true. If it is not true, it may, I think, at least be taken figuratively. I submit that not only has there been cocktail drinking in Hong Kong and Singapore, there is cocktail drinking in Sydney, Halifax, Saint John, Moncton, the constituency of Northumberland, New Brunswick; Montreal, Quebec, Toronto, Winnipeg, Regina, Saskatoon, Vancouver, and Victoria; and there is cocktail
drinking in Ottawa, not, sir, alcoholic cocktails but rather mental cocktails. That, sir, is what Canada has been suffering from ever since the war broke out. These mental cocktails have been dished out here in Ottawa in the largest cocktail shaker, possibly in the world. The world is suffering the shocks of a terrible war, and I submit that the people of Canada have reached the point where they do not want any more mental cocktails; they want real, hard, satisfying food, in the guise of plain truth. They are entitled to it.
Before I close, may I remind the house that Tennyson said something about this state of mind when he wrote his "Lotos-Eaters". I would advise hon. members to read that piece of prophetic poetry:
Let us alone. Time driveth onward fast,
And in a little while our lips are dumb.
Let us alone.
That has been the policy-let us alone.
What pleasure can we have To war with evil? Is there any peace In ever climbing up the climbing wave?
All things have rest, and ripen toward the grave.
I submit, Mr. Speaker, that our condition in Canada is exactly described in the lethargy of the lotos-eaters; we are all drinkers of mental cocktails.
Three hundred years before Christ a Greek philosopher wrote into one of his plays these words:
And tell of Time, what gifts for thee he bears, What griefs and wonders in the winding years.
Countless years before the Greek philosopher wrote these words, other humans had asked themselves, consciously or subconsciously, the same question. Since Anno Domini' I, countless human beings all over the world have asked this question and, even this very night, are asking themselves the same question.
Another great writer wrote into one of his plays these fateful words:
To-morrow, and to-morrow, and to-morrow Creeps in this petty pace from day to day,
To the last syllable of recorded time;
And all our yesterdays have lighted fools The way to dusty death.
I suggest that hon. members ask themselves the question which was asked three centuries before Christ. It is as fresh and fateful to-day as it ever was. I would urge them to ask themselves that question at once. To-morrow may be too late.


Mr. D. G. ROSS (St. Paul's):: I have only a few words to say this evening; but may I begin by mentioning this, that never have I felt more pride in anybody than I have in my desk-mate (Mr. O'Brien) who has just taken his seat. The address he made this

1468	COMMONS
War Apprporiation-Mr. Ross (St. Paul's)
evening will stand out in the annals of parliamentary speeches in Canada; in its character and the manner of its delivery it is comparable with any of the orations of Sir John A. Macdonald, Sir Wilfrid Laurier, Sir Robert Borden, and my leader. He made some reference to the Mad Hatter. As a matter of fact we have quite a number of mad hatters around the House of Commons. Indeed, if it were our fate to be here long enough, we might all be mad hatters before we got through, especially if we had to listen continually to "wheat, wheat, wheat."
The previous speaker also mentioned that we have in this House of Commons an impressive array of brain-power. To my mind one of the difficulties in this regard' is that there is practically no outlet for the brains of the private member. Sometimes one is overcome with a sense of futility. But let it be remembered that there is one job we have to do to-day, and that is, get on with the war, put whatever efforts we have into it, and see that everything is done which can be done.
We hear much talk about democracy. We are not a democracy to-day in Canada. Everybody knows it. Parliament is overlooked all the time. What we really are is a socialistic bureaucracy; hon. gentlemen on the other side are the bosses, we are the people who follow in line, and that is all there is to it. That is all we can do. There is no democracy about it; our voices are disregarded.
Take, for instance, the way in which companies are formed by order in council. I shall not stop to make an enumeration of them; but let me ask, what would happen if I wanted to form a company? I would have to follow the regular procedure all the way down the line. Do you think I could go in and see my hon. friend the Minister of Pensions and National Health (Mr. Mackenzie, Vancouver Centre)-


Mr. MACKENZIE (Vancouver Centre):: Always.


Douglas Gooderham Ross: - and say, "Look here, can I get this company put through by order in council, just as a favour?" Not a chance in the world.


Ian Alistair Mackenzie: That is not correct.


Douglas Gooderham Ross: I speak, of course, with no thought of offence.
Coming to the next matter, I am frank to say that it makes me mad when I think of the appropriation referred to in this resolution for the benefit of Great Britain being called a gift. A gift! I believe every hon. member should be ashamed of the term. It is no more than the payment of a debt which is long, long

overdue. Let us record it as such. Then, perhaps, the people of Great Britain will have more confidence in the people of Canada than they have had occasion to be in recent days.
I do not underrate what we are doing. Our war effort in a great many ways is marvellous. Our manufacturers are doing a wonderful job; our fighting men are among the best. But all we are doing is just giving those who are defending themselves and us the munitions to fight with, and if we did not have these fellows over there to do the fighting for us we would not only have to make these gifts, but have to find the extra men to fight as well.
On July 1, 1938, my honoured leader Mr. Bennett brought up in the House of Commons the matter of the request of the British government to train air pilots in this country. There was quite a debate. The Prime Minister (Mr. Mackenzie King) said at that time that there were no commitments-that was that. Not only that, but he said that there had been no requests from the British government. Let me take the house back to July 1, 1938, when the Prime Minister said, as reported at page 4527 of Hansard:
I can only repeat what I have said time and again, namely, that there are no commitments of any kind on the part of this government with respect to any war in which the United Kingdom may be engaged.
That is that. Again, the Prime Minister said, as reported at page 4529:
My reference was with regard to the idea of having the imperial air force set up a flying school somewhere in Canada, to train their flying pilots; in short, a military station to be put down in Canada, owned, maintained and operated by the imperial government for imperial purposes.
What a change has taken place since then! If hon. gentlemen have read the words of Mr. Bevin in his book, they will recall that he says that at the imperial conference of 1937 each individual member of the commonwealth of nations pledged itself to look after its own defence but not to be involved in any war in which Great Britain might be involved. No, we did not pledge that; but at the same time Great Britain pledged herself to defend every single member of the commonwealth of nations if it should be attacked for any reason whatever. Do you think, Mr. Speaker, that if the people of Great Britain had known about that at that time they would have stood for it? Is it not a very small thing that we are doing at the present time in this gift of a billion dollars-that is all it is. What does it amount to? It amounts to this-the repayment of a debt which we should have been paying for years, of about $50,000,000 a year over the last twenty years. That is all it amounts to-$85 for every person in Canada

War Appropriation-Mr. Pouliot
Is it enough? When we think of that billion dollars spent in this country, let us ask ourselves, what does it do. It creates work for our people in Canada. It is high time we did even more than we are doing so that the rest of the democracies will not think that Canada, as it has been so aptly put by some hon. members in this house, will benefit like nobody's business from the war. Let us make the situation clear, Mr. Speaker, so that the people of the democracies will know that Canada is not profiteering from this war.
Mr. JEAN-FRANCOIS POULIOT (Temis-couata): I do not intend to speak at great length, but the inspiration of the last two speeches we have heard is different from mine. Of course, it is a long time since I read the story of "Alice in Wonderland", and I cannot conceive how the hon. member for St. Paul's (Mr. Ross) could compare our hon. colleague (Mr. O'Brien), so far as speaking is concerned, with Sir John Macdonald, Cicero, Demosthenes, Sir Wilfrid Laurier, and the leader of the opposition (Mr. Hanson). I respect the views of others, and although I would not follow the same path I admit that they are entitled to express such views, however extraordinary they may appear to anyone of ordinary understanding.
This is, of course, an important debate. As I said before, the discussion of war finance cannot be a matter of sentiment; it must be a matter of argument and reasoning, just the same as the conduct of the war itself. That great soldier, Marshal Foch, used to say that what was necessary in warfare was common sense. I suggest that what is necessary in war finance is common sense also. I make no pun on that.
My specialty is the reading of things that are very dull and that nobody else reads; but in making a comparison between certain things that are published at different times it is possible for one to know exactly what is going on, and the first document from which I shall quote is the pronunciamento of the 200 citizens of Toronto as published in the press of January 12 and 13, entitled "Total War Now". In this document it was stated:
This is no time for a referendum. The responsibility rests squarely on parliament.
It continues:.
There is only one way to meet total war-by total effort-that is to mobilize all our manpower and material resources under a plan of universal compulsory selective service. Those who can serve best on the farms must work on the farms. Those who can serve best in the factories must work in the factories. And those best fitted to serve in the armed forces must be trained, equipped, and available for service in Canada or overseas anywhere at
44561-94j
any time. That is the only way that our farms, our factories and our armed forces can wage total war. No half measures are consistent with national honour.
That document was an inspiration for another, an official document which was read by His Excellency the Governor General in the senate at the opening of this session, the speech from the throne. The inspiration for the speech from the throne was evidently the pronunciamento of the 200 people from Toronto, only with the difference that this document from Toronto does not mention a plebiscite, while a plebiscite is mentioned in the speech from the throne. Therefore there was a ransom for the plebiscite and the postponement of conscription; and in my humble view that ransom was precisely the gift of a billion dollars to Great Britain, which is the matter we are now discussing. In my humble view, sir, if there had been no pronunciamento by the 200 important men of Toronto, there would have been no plebiscite mentioned in the speech from the throne and we would not have an item of legislation such as this before us. Of course, sir, you may feel a little incredulous about it, but I am sure this is exactly what the historians will write fifty years from now.
Then, Mr. Speaker, statements of the utmost importance were made on January 26 by my revered leader, the Right Hon. Prime Minister (Mr. Mackenzie King). Since they have been referred to by the Minister of Finance (Mr. Ilsley), I hope you will not object if I read about half a page of Hansard of that date. It may not be strictly within the rules, but it is the best possible expose of the policy of the government, especially with regard to a grant of such magnitude to Great Britain. The first matter is the one mentioned in the second place by the Prime Minister.


Georges Parent: Order. The hon. member is familiar with the rules of the house, which do not permit of a quotation from any speech that has been delivered during the present session. Only the other day I had occasion to direct the attention of another hon. member to that rule, and I hope the hon. gentleman now speaking will observe it also.


Mr. POULIOT:: I agree with you absolutely, sir, and I am in the hands of the house. But that was the only time the matter was referred to other than in the speech from the throne. Moreover, the amount of a billion dollars was not mentioned in the speech from the throne; it was first announced by the Prime Minister on the occasion to which I have referred. If I read this excerpt from the speech of the right hon. gentleman, theore-

War Appropriation-Mr. Pouliot
tically I shall not be within the rules of the house as they now stand; I admit and confess that. On the other hand, it is the only way in which I can present my argument on the matter. However, sir, it is not necessary to *quote the text. We may refer to a previous *debate without quoting the text of the words that were used. I need not read them; I shut the book. I have enough respect for the Chair not to argue on the matter, but I said what I did in order to show Your Honour two things: in the first place, that I am more or less familiar with the rules of the house, and in the second place, that I have high respect for Your Honour.
What is the situation? It is that with a previous payment of $400,000,000 and a future payment of $265,000,000, we are supposed to clear up all our debts to Great Britain. That is the first point. The second point is that at the present time Canada has securities to the amount of $700,000,000 in Canadian money held in Great Britain; and Canada's proposal is that the proceeds of the sale of all such securities held by citizens of Great Britain and sold outside Great Britain are to be deducted from the total of $700,000,000; also that the proceeds of the repayment of all Canadian securities held in Great Britain shall be deducted from that amount, and the interest on it will not be paid during the war. In other words, to summarize the situation, we were told that after we pay $265,000,000 for the purchase of securities or bonds, we shall owe nothing to Great Britain, that all our debts will be paid. Then we shall see to it that the sum owing us will be reduced by the sale of our securities held in other lands, or I presume in this land, and also there is a gift of the interest on that amount of $700,000,000. What the rate of interest is I *do not know; but if the rate is 5 per cent, that gift amounts to $35,000,000 per annum. Then, after that is done, we are to give ammunition, machinery, food and many kinds of products to Great Britain to the extent of a billion dollars-not a billion according to the English banking system, which would be a million times a million, but to the extent of $1,000,000,000 in value. I am not going to split hairs, as bankers do when they speak of certain technical banking matters. I want to know only one thing: is that policy economically sound?
Coming to the elaborate speech delivered by my good friend the Minister of Finance last night, I have to reconstruct and reconstitute part of his speech with the figures he gave to the house. I was reminded of the great time when my hon. friend the leader of the opposition (Mr. Hanson) was Minister

of Trade and Commerce in the Bennett government, at a time when we were compiling and comparing statistics. I pay him this tribute, that he was a very good Minister of Trade and Commerce, and had his leader been a better man he would have made a success of his department. But in England they are telling Mr. iBennett his facts so well that I shall not discuss him further now.
The Minister of Finance has mentioned Canadian exports to Great Britain per annum, and he gave the figures for 1940 and 1941. He did not, however, mention the imports for those two years. To find that figure I had to add together Canadian exports to the United Kingdom and other parts of the British empire during 1940 and 1941, and then subtract from that the deficit between our exports and imports in order to learn the value of the imports from the United Kingdom and other parts of the British empire to Canada in those years.
Of course the minister gave the figure for 1939. He stated that our imports in that year were valued at $188,000,000. In 1940, after that mathematical operation, it was found that our imports were valued at $249,000,000, or an increase of $61,000,000 over the preceding year; and in 1941 they were $279,000,000, or an increase of $91,000,000 over 1039. Those figures show some progress.
But there is another point to consider, one which 1 do not understand. I must say that I find it marvellous. I remember that some time after the completion of the first year of the war I read an article in one of the Ottawa papers to the effect that the difference in British exports to the whole world in the whole year was either $1,500,000 or $15,000,000. The meaning was that the year after the war shipments made by Great Britain to all countries of the world were only that much smaller than they had been in the previous year of peace.
The tariff has been changed to enable Great Britain to send us more manufactured goods. We are making more munitions in Canada. It is all right to make more munitions for our allies; I am all for it. But if munitions plants in Great Britain are in danger on account of bombardments, I suggest there is another risk to be considered, namely the risk of crossing the ocean. A much greater quantity of ammunition has been lost through the torpedoing of ships than through the bombardment of munitions factories in England. There is the risk of transportation, and there is the additional embarrassment of distance. I cannot understand why most of the munitions for Great Britain are not manufactured in Great Britain itself. Why are they manufactured so far

War Appropriation-Mr. Pouliot
away? Of course conditions are somewhat different for aeroplanes, although some are manufactured in England.
These are matters concerning which I am open-minded. I do not change my views simply because Mr. So-and-so has other views. I wish those who think differently to be good enough to reason with me, and to give me their argument as to why it is better for Great Britain to manufacture commercial goods in that country during the war and ship them overseas, and then have most of her munitions made in Canada and the United States, thereby running the risk of crossing the ocean. That is one point. I have been in England, and I know many English people. I have some good Scotch friends; I have some good English friends, and I have some good Irish and Welsh friends. I have the deepest admiration for the British people, but I wonder whether those who have the responsibility of governing over there now, with the exception perhaps of Mr. Churchill, are worthy of the British people. I made an exception of Mr. Churchill.


An hon. MEMBER:: Who are you to judge?


John Ritchie MacNicol: The Hon. Ernest Bevin is doing a good job.


Jean-François Pouliot: That is the opinion of my hon. friend, and it is a respectable one.


An hon. MEMBER:: What about Sir
Stafford Cripps?


Jean-François Pouliot: Stafford Cripps gave them hell-excuse me, sir-he spoke roughly. I have not been there for a few years; but Sir Stafford Cripps is there; Mr. Eden is there; Mr. Morrison is there, and even Mr. Bevin is there, to whom the hon. member for Davenport (Mr. MacNicol) referred. They have not been tender in their language to their fellow citizens. They have not used pink-tea expressions in order to tell them what they thought at times. Are we to kneel down in a humble way to express our admiration to any one? No. Moreover, it might not be tolerated in Britain. They have freedom of expression. I would remind the house of what was said by Mr. Gegood, a labour man from Northern Ireland, about Lord Halifax. His remarks passed the British censor; they passed the United States censor and were published in the New York Times. This has reference to the Rio Tinto incident which was discussed widely in the press of the world and especially that of the United States. I have here PM of February 17 which contains an article about this similar to the one which appeared in the New York Times. They refer to the way in which Sir Samuel Hoare and
others acted. The article is entitled "Rio Tinto Output went to Axis", and the other headings are:
British Tory Scheme for Helping Franco.
Would Ship Him Mining Machinery Despite United Nations' Needs.
That was a dispatch from Mr. I. F. Stone,, who is no isolationist. I wonder whether we shall not be misjudged in Great Britain if we pass legislation like this? Never in the history of the world have we seen a free nation, a nation not vanquished, paying tribute of this kind. It is the same amount that was paid by defeated France after the Franco-Prussian war. In French we call it "cinq milliards,,r because one franc is only one-fifth of a dollar. We are making a billion dollar gift-Either Britain is able to pay now, or she is not. If she is able to pay, I am sure that she will honour her obligations. If she is not able to pay now, she may give a promise of payment which, when the war is over, will enable Canada to discuss the settlement of all these matters, not as a nation whose benefactions are forgotten, but as a nation which is in certain respects a creditor nation.
The feeling in Canada is one of sacrifice, and financial legislation of this kind is not inspiring. We should not look upon this war as though we had lost it. I disagree fully with the statement made the other day by the Minister of Labour (Mr. Mitchell) that if we win this war, it will be only by a miracle.. My deep conviction is that that was an; erroneous statement of a man who had been working too long hours that day. It should not be permissible for a minister of the crown of any country at war to state in parliament that the war will be won only by a miracle even if he adds that miracles may happen. Imagine the encouragement that was given to our enemies when they read that statement by a minister of the crown of Canada!


Mr. JOHNSTON (Bow River):: You want to get your head out of the sand, too.


Jean-François Pouliot: I do not understand my hon. friend, except when he is right. I will confess that I never understand him. He is-too bright. I give him credit for that, and it is social credit; it is more than a $25 promise that was never kept. Although I am concerned and worried, I am not fearful about the-result. My only fear is that the logical consequence of legislation of this kind will be that it will attain an altogether different purpose from that intended by its sponsor. You remember the Boston tea party. The Boston tea party was the cause of rupture between New England and old England. It was a matter of taxation. It is very dangerous to play with finance as some college professors

War Appropriation-Mr. Pouliot
do. My fear is that if we cannot meet our tremendous obligations of this kind, Canada will inevitably fall into the hands of the United States of America, and then my hon. friends who foresee in this legislation a bright future for Great Britain would be very sorry if it meant the turning over of Canada to the United States. We have a mission on this continent, we Canadians of all origins and of all faiths, provided that we stand together and provided that we first consider Canada as our country-and I want Canada to remain British. We are all ready to make sacrifices to help Great Britain, and I am sure that if the Canadian government continue their policy of giving all possible aid to Great Britain, but on the same conditions as before, with an acknowledgment of debt for what we have done, we shall be more respected by the British people over there. I know them well enough to say that. Furthermore, it would save a lot of difficulty when the time comes for us to dictate peace.
I am sure, sir, that you are not scandalized by my language because you know that, after the last war, by virtue of the Versailles treaty this country of ours did not get any of the enemy's possessions while all the other dominions were given colonies which had belonged to other nations. South Africa and Australia both got enemy territory. Here at the gate to our country, in the gulf of the St. Lawrence, lies the island of Newfoundland, and there is also Labrador, on which Canada is erecting immense defence works. Why did our government not discuss the matter with the British government and tell them: "We are ready to defend Newfoundland, we are ready to defend Labrador; we have sent men to the north to Greenland and to Iceland, and all we ask in return is to be given a preference over the United States in the possession of any British territory. That has been done by Australia, a country whose name is applauded every time it is mentioned. It has been done by the loyal citizens of South Africa; it has been done by the loyal citizens of New Zealand. Even over that little island of Nauru in the middle of the Pacific ocean from which most *of the German fertilizer used to come, New Zealand or Australia has been given a mandate. So it was given to another British dominion. But we have got nothing. I hope that this government will show more pride when they discuss these matters with other nations.
I find it illogical to hear so much said about the statute of Westminster when there are perhaps one hundred thousand statutes of Westminster to be found in any parliamentary library. The statute of Westminster was
{Mr. Pouliot.]
supposed to give this dominion autonomous rights, and yet on the other hand we are doing everything that is asked for by one of our allies. We have to do all we can to help our allies in this war, but there is one thing we must not fail to consider. We must not destroy British citizenship in this country in the future by doing more than we can afford. We have no right to do that. The desire of the Canadian people is to remain under the British crown, as we are now, and when our soldiers deliberately and voluntarily go overseas they go there to defend the King of Canada. It is time, sir, to think of Canada as our own country, to consider first the interests of Canada, and therefore to see that legislation submitted to the house is submitted, not as a matter of sentiment, which is very dangerous, but purely as a matter of reason and patriotism.
Before closing, I have just one other reference to make. It is impossible to get complete trade statistics in Canada. You may see a big book, that is the "Canada Year Book." It is full of straw. The real information about trade is not in it. Here in my hand I hold a condensed statistical record of the trade of Canada. It was sent to me last summer, marked confidential. This is the first time that datum on trade was considered confidential. Of course, it may be said that it is not in the public interest during the war to inform the public about shipments of arms and munitions, and so forth. I agree, but the manufactured goods we receive from England are mostly commercial goods, and I cannot see why on earth it is impossible for us to secure full information on the matter.
When I said that we should not consider financial matters as if we were to lose the war, what I meant was this: It is impossible to think of destroying the fortunes of the citizens of Canada during war time so that they are all beggars after the war is over. We cannot afford to lose our trade during this war. We have the example of Great Britain. Great Britain continues her trade. There are advertisements in the press all the time to that effect: "Britain delivers the goods." Britain gives us a great example.


Georges Parent: I am sorry to have to inform the hon. gentleman that his time is up.


John Ritchie MacNicol: Mr. Speaker, when I first heard or read that the government contemplated contributing a billion dollars to the old country in the form of goods to carry on the war, I felt elated; and when the minister introduced his resolution I was proud of being a Canadian, because at last this country is taking a big and generous step toward assisting the old land, without expecting

War Appropriation-Mr. MacNicol
any return. I congratulate the minister upon bringing in this resolution. I might add that I am proud to represent a constituency in a city which contributed, in the recent war loan campaign, well on to one-fourth of the $900,000,000 which was raised, and I am no less proud to come from a riding which manufactures, perhaps to a larger extent than any other, munitions and equipment.
I am not going to take up much time. I believe that the shorter the speeches in a debate of this nature, the more credit we shall reflect upon ourselves and our country. The minister referred to the volume of trade between Canada and Great Britain and between Great Britain and Canada. Reading over his figures, I could not but feel that after the war we shall have to try to balance such figures as those, indicating as they do that Canada purchases so little from the old land in comparison with what they buy from us. I believe the minister said that in the year 1938 we bought from Great Britain $113,000,000 worth of goods and exported goods to her of the value of $331,000,000. That is not a fair balance of trade; and I trust that when the war is over, when we send our ships to the old country laden with materials produced in Canada, they will bring back a no less quantity of material produced in Great Britain. A fair exchange is always desirable; when it is lopsided it is always unsatisfactory. That is particularly the the case when during the same year we imported from our cousins to the south-of whom I want to speak in the kindest manner; to-day they are showing themselves to be brothers rather than cousins, by the way they are taking part in the great conflict in which we are so vitally interested-$424,000,000 worth of goods, and shipped them only $339,000,000.
The minister referred with pride-and I agree with him-to the vast quantity of munitions which we have sent to Great Britain. We have also forwarded large quantities to Egypt, South Africa and Australia. I have seen many train loads of war munitions, destined for these countries, shipped from my end of the city of Toronto. For that achievement Canada and Canadian manufacturers and the workmen in these factories deserve unstinted praise. I am told that one-half the shells which are being fired by the allies to-day, whether made in Canada, Great Britain, Egypt, South Africa or Australia, are made by machines that were built in Canada. That is a great tribute to Canadian ingenuity. I often regret that the government did not take to heart at the time something which, may I humbly mention, I said to them after my last trip to the old country and various European states, where I had gone particularly to make a survey of industry, and visited a great many factories. On
more than one occasion I met British industrialists who were about to make large additions to their plants, anticipating as they did the war and the probable construction of new plants or additions for making munitions of war. Some wished that they could build those plants elsewhere, and I discussed with a number of them the desirability of putting up the additions in Canada. When I returned here I suggested that some arrangement might be made whereby they could erect their new plants in Canada and ship the plant equipment from and their products to the old country without duty charges either way. Not only would it have been of great value in the prosecution of the war, because branches moved to this country would not have been destroyed, but it would have been a great thing for Canada, and would have preserved to old country investors the value of whatever investments they made in building their plants here. But, as some other hon. members have pointed out, no suggestion by a private member is given any consideration at any time, particularly if he is on the opposition side.
Anyway, I am proud of what Canadian industrialists and Canadian workmen have done in producing munitions and shipping them to all parts of the empire.
In his speech yesterday the minister said, as reported in Hansard, page 1418:
We cannot make the tanks, the anti-aircraft guns, the mechanized equipment of all sorts which wre have supplied to our British allies, entirely out of our own domestic resources.
But we should have been in a position to make a larger percentage of these munitions in Canadian plants than we are doing. Not that w'e are not doing very well, but we could have been in a better position had the government-although I am not criticizing it-been seized with the great value of producing these things in Canada. I a-m sorry to say that the government in the past has shown itself too anxious to purchase various commodities, particularly manufactured equipment, outside Canada than in Canada. We should have been and could have been in a better position to produce more munitions and in greater variety than we are doing.
The iron and steel business is one with which I was associated. The minister has heard me say before that the government should make every effort to encourage the production of iron ore, of which, of the high grade and low grade, we have an inexhaustible supply. We could have done that because like Great Britain, and just as much as Germany almost, we anticipated the war. We saw it coming but were not just in a position to do our full share in the production of war munitions, which consist for the most part of mechanized

War Appropriation-Mr. MacNicol
equipment manufactured largely from steel and iron. I would ask what the government is doing right now to increase the production of iron and steel in Canada. Are we to-day doing on lake Superior what our cousins to the south are doing on lake Superior, clearing the ice from Michipicoten harbour so that Algoma iron can be loaded there and shipped to the steel mills of Sault Ste. Marie? I do not know what we are doing, but I know they are doing it in the United States. They have their ice-breakers on lake Superior breaking ice so that they can start what they predict will be the largest shipment of iron ore by lake transport in the world's history. They are planning to ship this year one hundred million tons of iron ore to the steel plants in eastern states. They are at it right now, and if we are not at it we should be. We ought to be up and doing. We ought to be prepared to expedite production, because, after all, the war cannot be won without the production of necessary mechanized war equipment. That is more necessary almost than anything else.
The same applies to other industries as well.
I have said before, and I say again, that we have imported iron and steel products to too great a value. I have been fighting for years, ever since I have been here, for the development of the Canadian iron and steel industry to bring it to a much greater position than it holds to-day. I can hardly picture this country continuing to purchase such vast quantities in tonnage and in dollar value of iron and steel equipment from outside Canada, principally from the United States. X am not opposed to trading with the United States. Like everyone else I have a very warm feeling for our cousins to the south because of the way in *which they have shown themselves as friends of ours and of the empire in the present conflict. But I am Canadian first, and I am for production in Canada. I am convinced that more could be done if the government had a proper conception of the industry, of the value of the iron and steel industry, or if there were' more in the government who had a thorough knowledge of the industiy in a practical way.
I do not mean such knowledge as is acquired by walking through a factory. I am amused to hear tales as a result of walking through factories. It is as if I walked through a lawyer's office and called myself a lawyer in consequence, or if I posed as a doctor as a result of a visit to a doctor's office. The business of the production of iron and steel is something that a man learns after many years of hard knocks in that school and in the operation of plants and machinery.


James Lorimer Ilsley: There has been a great increase in steel making capacity with government assistance.


John Ritchie MacNicol: I have said that, but it could be a great deal larger, and I could have made it a great deal larger. I know where the raw material is, and I know how plants could be built and put into operation. The minister spoke of both iron and steel and that is Why I am discussing the subject. He also spoke of coal and oil. Canada has within its borders, I am told-and I see this by statistics-one-fifth of the world's coal resources, at least the known resources; and yet we are importing well on to $30,000,000 to $40,000,000 worth of coal yearly. That money has to be sent out of the country. Would it not be better to use a considerable portion of that money in buying larger quantities of Nova Scotian coal, larger quantities of Alberta and Saskatchewan coal? We would keep the money in the country and would be debtors to one another and not to outsiders. I hope, therefore, that during this year, and as long as the war lasts, the government-and they will receive a good deal of commendation if they do this-will encourage buying coal in Canada from Canadian coal .producers in much larger quantities.
I believe we are producing about one-half of the coal we use; but why should we not produce three-quarters of it and save that money for Canadians? The same thing applies to oil. Later on, I am going to make a speech on oil. I am one of those who believe that Canada should be an exporter instead of an importer of oil; yet in 1938 we imported approximately $50,000,000 worth of oil and its products, and this year I venture to say it will be nearer $75,000,000. I make this statement-and I am prepared to defend it against anyone who is willing to stand on a platform with me-that a large proportion of that oil could be produced in Canada, and it should be. I shall not say anything further on that point at the moment. When the minister referred to coal, iron and steel, and oil, it gave me an opportunity to say something about these commodities.
I am told, though I hope it is not true, that the government has in contemplation either abolishing or, at any rate, making inoperative the housing act which has rendered such excellent service in Canada during the last few years. If the housing act is repealed, a great number of people in my riding, and in other ridings as well, will be thrown out of work. It will affect carpenters and other tradesmen who are connected with building. The government wants the steel that enters into the production of equipment for munitions, but on the other hand men must have suitable habitations and their houses must be properly equipped. Let me give a case in point. Recently I had to buy for some of my buildings several ordinary 30-gallon galvanized

War Appropriation-Mr. MacNicol
iron, boilers. It seemed as difficult to get these galvanized iron boilers as to move the Bank of Toronto from King and Bay streets to the corner of King and Yonge streets. I hope the government will take steps to see to it that the average householder, or the ordinary small builder putting up homes for our working men, is not handicapped through inability to get repairs or new equipment for houses which the common people, the ordinary householders, must live in. When I say the common people, I class myself as one of them.
There are two other items which I wish to discuss for a moment before I am through. Let me refer briefly to the first of these items, the Alaska highway. It seems to me the government has fallen down in making preparations to assist in building or to permit our United States cousins to build a very necessary military war road. I am all for it. The government knew-because it was contemplated for a quite a while-what the situation was with regard to that road; and what did they do to make it possible for contractors or others to send materials to Fort St. John?
As far as I know, little was done. There is only one bridge across the great Peace river, and that is at the town of Peace River.
The banks along that river are high, averaging 900 feet in height. At the moment I am told that traffic going from Dawson Creek north to Fort St. John, some twenty-five miles away, more or less, has to go down off the plateau, be ferried over the river, and up onto the plateau again on the north side. Had the government been alive to what it must have known would come to pass, namely the construction of that road, surely the road could have been projected on from the terminus on the north side of the river to Rose Prairie, which is some twelve miles or more north of Fort St. John. The cost to the United States contractors is going to be heavy and, in addition, there will be great delay in having to ferry equipment across the river instead of having it cross by bridge. That is just an aside, something the government should have considered if it had looked ahead to what had to take place.
I shall conclude with one further reference, a matter to which my leader referred the other evening very briefly and which, I know, will be referred to a great deal more later on. I believe this matter was introduced last session by the hon. member for Temiscouata (Mr. Pouliot), and supported at that time by myself. I want to protest just as strongly as I can against whoever is responsible for cutting out the printing of the public accounts as fully as formerly. In past years I, for one, carefully searched the public accounts, and
on many occasions was able to obtain interesting and valuable information from the government by asking questions with regard to items I found therein. As published heretofore, I always looked upon the public accounts as the watchdog of the Canadian treasury, because many hon. members searched those accounts very carefully.
I should like to mention only one item to show what this means. Some years ago a yacht was purchased by the government. I am not speaking of this in a political way. It is immaterial whether it was the present government or the past government; this is what often prevails-perhaps too frequently -and what can be discovered by searching the public accounts. This yacht was purchased in 1934 for SI,510. Between 1934 and 1939, inclusive, the public accounts revealed that repairs to that yacht had cost this country $6,884.32, or more than four times the original cost; that gasoline and oil to operate the yacht, only during the summer and only for occasional use, had cost $2,215. It is items such as this that members of parliament like to dig into, in order to urge the government to cut out waste. This is my closing word, that in whatever the government does during this war, when the public are so willing to contribute money generously and on the other hand are so anxious that every dollar be spent legitimately and without waste, it is imperative that members of parliament be given every opportunity to scrutinize every expenditure made by the government.


Ernest George Hansell: Mr. Speaker, I rise to make just a few observations in connection with the resolution under discussion. I must say that I do not see how anyone could oppose a measure that would provide a billion dollars' worth of credit to the people of Great Britain, who for over two years have experienced the hardship and suffering of war. They are a people with great fortitude and, I believe, great faith in the other nations of the British commonwealth. It is only right and proper that we should come to their assistance in times like these, by measures such as those proposed by this resolution.
I do not speak to this resolution as an expert on monetary technique. I do not consider myself such. I am like many others, a mere student, one who has a desire to learn. As I think of this measure in that way, I may get something of a cue from the minister's speech in introducing this resolution in the house, as it appears at page 1421 of Hansard for March 18. He said:
In essence, the proposals are simple and straightforward; but because of the number
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War Appropriation-Mr. Hansell
and nature of the various transactions involved, and perhaps also because they deal in part with matters of exchange, which is a mystery to many persons, the details and perhaps the bill itself may appear complicated to many members of the house.
I was particularly interested in that remark, because I think we have reason to realize that this matter of money, not only internally but externally, as it is related to transactions between one country and another, is sadly misunderstood. It is a subject that does seem to be mysterious; it is a subject that somehow or another has been kept in the dark for a good many years. I recall on one occasion talking to a certain gentleman who, I think, would be regarded as an intellectual; at least he had graduated from a university and had taken some post-graduate work. In talking to him on the subject of money, I asked if he would answer one question; that was, where money came from, how it came into existence. He replied, "Well, of course, if I have a field of wheat out here, that is money." I said, "Do you mean that dollar bills grow on the ends of the stalks?" "Oh," he said, "no, no, no, no, no." Then I said "Well, what do you mean? I asked you where money came from." The only answer he had was, "Well, well, well, well, well." I have asked more than one person the same question, and I have discovered that some people who are quite intellectual and bright have not understood and have not' solved some of the rudiments of this matter known as finance or money.
I was coming east on the train not so long ago and happened to be in the same seat with a man from-well, I will not say where he was from, but he voted for one of the ministers on the government side of the house. When he learned who I was, of course we talked a little bit about politics, and I discovered he was a very good Liberal. He went out of the coach, returned a few minutes later, sat down and said, "Well, Mr. Hansell, tell me: Where is Mr. Aberhart going to get his money from?" So I said to him, "Well, now, Mr. So-and-so, if you will tell me where Mr. Usley gets his from, I think I would1 be in a better position to tell you where Mr. Aberhart would get his." Well, he began to stumble and stew and sweat a little bit, and spit a little bit, and then I began to explain a very few simple things to him. I said, "You see, Mr. So-and-so, it is not social credit you do not understand; it is not Mr. Aberhart's money you do not understand; it is Mr. Ilsley's money you do not understand."
I am quite certain there may be very similar conceptions with respect to a resolution such as this-and, mark you, I have pref-
aced my remarks to-night with a commendation of the government's action in granting to Great Britain this gift of a billion dollars. I think this gift should be made. I am in favour of the resolution. But there are some things upon which perhaps some light should be thrown. The minister has said1 that this is a gift to Great Britain. I wish to compliment him upon his speech in introducing the measure, because it was a good speech. It is couched in nice language; it is clever, and I do not think he misses the mark. But sometimes there is a great danger when one deals in generalities. Sometimes people are past masters of that. I am not accusing the minister on that score, but I must say that when he talks about this gift to Great Britain he uses these words, as they are reported at page 1421 of Hansard,-.
In order to prevent the further rapid accumulation of sterling balances, the government believed that the best course to follow was to make an outright gift to Britain of the foodstuffs, raw materials, planes, tanks, guns and other war supplies which we would send to her, up to the value of $1,000 million.
That is a very carefully worded statement. Then, further down the page we find this:
... I have referred to earlier as the Canadian dollar deficit of the sterling area. This deficit of course arises almost entirely from Britain's requirements for foodstuffs, raw materials, munitions and other war supplies purchased here, so that the proposed gift will, in effect,-
That is a very clever phrase. ,
-take the form of these war supplies.
The gift is spoken of in general terms, and I believe the people assume that it is in reality a gift of foodstuffs, guns, tanks, aeroplanes and war munitions to the British people. What I am asking is this: If it is a gift to the British people of foodstuffs, and so forth, and so on, will the British people receive those foodstuffs free of charge? That is a question which perhaps has not dawned upon many people. The fact of the matter is that the British people will not get those foodstuffs without paying for them.
When I make that statement there may appear to be some confusion of terms. Let me put it in another way: We shall suppose that this billion dollars' worth of goods is sent to Great Britain in 1942. They are all stamped "Made in Canada, 1942". On every can we shall suppose the words, "Made in Canada, 1942", are placed; on every side of bacon, "Produced in Canada, 1942"; on every sack of flour, "Milled in Canada in 1942". This, we say, is a gift to Great Britain.
I have a mother and father living in Great Britain. Am I to expect that my mother

War Appropriation-Mr, Hansell
and father will receive as a gift so many sacks of flour, so many sides of bacon, so many cans of foodstuffs, so much clothing?


Mr. GRANT:: No.


Ernest George Hansell: My hon. friend over here says no. Then, how is it a gift? That is a question which should be answered. I believe I know the answer, and if my answer is not correct the minister can correct it- for I confessed a while ago that I am only a student, perhaps only an infant, in the study of these matters. There is much that I do not know, and sometimes the mystery seems to me to become a little darker, the further I get into it.
I should like the minister to throw some light on that. We say it is a gift of foodstuffs; and yet when the British people come to get it, they have to pay so much in pounds, shillings, or pence, or whatever the price may be. The fact of the matter is that this billion dollar gift has to be financed from somewhere. Our farmers are going to raise hogs to produce bacon. They are going to grow wheat. They are going to produce the foodstuffs to be canned and sent over there.
I use foodstuffs only as an illustration. They are not going to do that for nothing; they are going to be paid for them. The British people who buy those things in their own localities are also going to pay for them.


Mr. McCANN:: What about giving it to
the army?


Ernest George Hansell: It does not make any difference, technically. I am only using this as an illustration. If it is given to the army, then the British government pays for it, which means that in the end the people have to pay. My hon. friend is only a student.


Thomas Vincent Grant: The British government does not pay for it at all.


Ernest George Hansell: Here is an hon. member who says that the British government does not pay for it. Two Liberals disagree. Perhaps my hon. friend over here has not reached the stage of being a student. Let us go on. The fact of the matter is that we are raising in Canada by way of loan a total of one billion dollars from our own institutions. That billion dollars will pay our farmers, our manufacturers or whoever produced the goods. They are shipped to Great Britain and Great Britain is not charged for them. But the British people pay for them just the same. The result is that the British government has one billion dollars more in their treasury.


James Joseph McCann: That is what constitutes the gift.


Ernest George Hansell: That is what constitutes the gift, and I have nothing to say against it.
I am not opposing that. I am simply pointing out that we are raising a billion dollars here to pay our farmers and our manufacturers; we are going into debt to the extent of one billion dollars. The point is that we have taken one billion dollars' worth of debt that Great Britain would otherwise have owed us, and we have converted it into internal debt in Canada which the Canadian people here owe to the banks or whoever create the credit.


James Lorimer Ilsley: Let me correct that right now. Do not let that idea get abroad at all. The internal debt of Canada will be no larger as a result of this transaction than it otherwise would be. If we were to sell this to Great Britain and take sterling in pay for it, we would have to borrow the billion dollars that my hon. friend speaks about from the Canadian people and take the money and pay the Canadian producers for the goods. But in that event we would send the goods to Great Britain and we would take sterling in return for them. So W'e are not converting a debt from Great Britain into an internal debt in Canada which otherwise would not exist. The internal debt in Canada will not be one dollar larger because we are doing this, nor will the taxes in Canada be one dollar greater than if we were not doing this. I ask my hon. friend to make that clear. I think he understands what I am saying. I want him to make that clear before he goes any further. We are not transferring international debt from Great Britain into internal debt in Canada and thereby saddling our people with a billion dollars of debt which otherwise would not exist. That is not so at all.


Ernest George Hansell: I thank the minister for correcting me where I was perhaps wrong in my technical language. I think, however, I am right in saying that there will be no billion dollars of British collateral standing against this?


James Lorimer Ilsley: That is correct.


Ernest George Hansell: Our debt will be increased, but it would have been anyway if we had shipped the goods.


Harry Rutherford Jackman: The fulfilment of a total war creates a debt.


Ernest George Hansell: I am being instructed from all directions by the Conservative party.


Richard Burpee Hanson: You may learn something yet.


Ernest George Hansell: I do not think they have corrected anything I have said, although the minister corrected my technical errors. I
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War Appropriation-Mr. Hansell
go a step further and perhaps the minister will correct my technical language here if I am in error. I have not spoken a great deal about the technicalities of our money philosophy because there are other men more capable of doing that. I usually spend my time in speaking on other bills and relieve these men so that they can devote their time to the monetary technique. But 1 have, had to meet these things because of my position in this small party. You meet men every day who ask about these technical subjects.
The point I want to make now is in reference to the prices that will be paid for these goods which are being produced in Canada. Some of these goods will be raised at a loss, especially those produced by the agricultural industry. I do not know how that can be remedied, but I am sure that this billion dollars' worth of credit will not be created at a loss. That is something that is worth considering. These farmers who will be raising these foodstuffs have taxes to pay and other things to buy into the bargain. As they put in their crops or as they attempt to raise their hogs they find they need a line of credit, I have nothing against these institutions. We do not talk against the banks. People get queer, screwy ideas about what we talk about. We have to have money and we have to have credit; the thing is that our banking institutions are doing for us what the government perhaps could do for themselves.
These farmers go to the purveyors of credit and say that they would like to borrow some money in order to produce these goods which are eventually going to Great Britain. They get their loans, but they will have to pay interest. The banking institutions are not going to lose money on these loans. Interest rates will be 4, 5, 6 or 7 per cent; I do not know how much they will want to charge the farmers. So these farmens raise their hogs, wheat or other products and, when they are sold, they find that if they get any profit, it is just a bare profit. I doubt if there is any profit when costs of operation are taken into account. Anyway the financial institutions have advanced the loan and are paid their interest. But they also create the billion dollars and they get interest on that, too. What I am saying is that there should be some responsibility placed upon the financial institutions with respect to this gift to Great Britain. This credit is created at the stroke of a pen; let us make no mistake about that. So I say that they should bear some responsibility with respect to the billion dollar gift to Great Britain.


Harry Rutherford Jackman: What would you suggest?


Ernest George Hansell: That is all right; but as a matter of fact, Mr. Speaker, the negative in any debate is not to suggest.


James Lorimer Ilsley: Yes, but-


Ernest George Hansell: It is all right to say, "yes, but."


James Lorimer Ilsley: Yes, but this is positive.


Ernest George Hansell: We have been here since 1936 and have been propounding and suggesting all along. People have laughed at and ridiculed. our suggestions, but we find that eventually the government goes behind a corner and gets into a huddle and says: "I guess we shall have to do this," do in part what we have been suggesting, because circumstances sometimes force them to do that very thing. We are not seeking to tell the government how to run the country. But we do wish to point out certain things where we think we can be of assistance. I am not opposing this measure.
Reverting to what I was saying about financial institutions bearing some responsibility in this matter, may I refer to the speech made by the hon. member for Essex East (Mr. Martin) this afternoon. He complimented the Minister of Finance and the government, and rightly so, I think, upon giving by this measure what he said was leadership to the world, to those who will hold a primary creditor position after the war. I have no criticism to make of that statement. I think the government is giving some lead in one respect. All that the hon. member for Essex East meant by giving leadership was giving leadership in the cancellation, shall we say, of certain debts owed to Canada by other nations, which might have to be done in any event after the war. That is all right. But where the government is giving more of a lead to other nations is in another part of this resolution, in clause 2, where the government is permitting the $700 million part of the British debt to remain at a standstill, without interest, for the duration of the war. I commend the government for that action. I should like to go so far as to say that perhaps that is what should be done with all foreign obligations throughout all the democratic countries which are fighting together in this war.
There is, however, one matter I would bring to the attention of the Minister of Finance in connection with clause 4 of the resolution, where provision is being made for the borrowing of one billion dollars. On that we are going to pay interest. Would it not be feasible to propose that since this billion dollars of increased debt in Canada is created by our own financial institutions, it should at least be created free of interest? We are taking the

War Appropriation-Mr. Hansell
responsibility of allowing $700 million of British debt to stand without interest to the British people for the duration, but we are asking our own people to pay interest on the billion dollar debt that we are creating for the purpose of giving a billion dollars' worth of goods to Britain. It seems to me, therefore, that the logical thing to suggest is to delete the words ""and interest" from that clause. I do not see why the minister will not do that. I feel that I or somebody else should propose an amendment accordingly to clause 4, perhaps when we are in committee. The minister might do it himself, but I do not think he will.
I do not know what interest will be charged on this one billion dollars, but if the rate were 2 per cent, the interest would amount to $20 million a year. Therefore the Canadian people are going to be, not only in debt to the tune of one billion dollars but, if the rate is 2 per cent, in debt, too, for an additional $20 million of interest every year, and, if the interest is compounded, it will be even more. Why could our own financial institutions in Canada not say: "We will service this at one-half of one per cent, or whatever it may take, and we will create the money without interest."
I am not saying, without debt.


Richard Burpee Hanson: If I may ask a question, if I pay $10,000 a year life insurance premium to the Canada Life and they lend it to the government, what is going to happen to the profits on that $10,000 which I invest in a Canada Life policy? I am to shoulder the burden, not the institution.


Mr. NOSEWORTHY:: Why should you get any profit on your $10,000?


Richard Burpee Hanson: Did the bon. member never hear of the sanctity of a contract made before the war?


Ernest George Hansell: I do not want other gentlemen to take up all of my time, but I would answer the leader of the opposition in this way. Perhaps I have been dealing with this billion dollars as a billion dollars of created credit. It may not all be created; I realize that. All I say is that interest should not be charged upon the credit that is created. My hon. friend, even though he be the leader of the opposition, makes no distinction at all between the investment of money which the insurance companies already have and the creation of fresh credit with the stroke of a pen by the purveyors of credit, by those institutions to which parliament has given the right to create credit. There is all the difference in the world between the two. I do not create any money; my hon. friend does not create any money, nor does any
insurance company or any mortgage company. But the banks do create money; that is their function, and I say that when credit is created for the purpose of. servicing a gift to Britain it should be created free of interest charges. Surely that is not asking too much.
I wish to deal with just one other phase of the speech made by the hon. member for Essex East this afternoon. He did not conclude his speech without referring to what the hon. member for Acadia (Mr. Quelch) had said in respect to the seven-man committee of the government which is now working on post-war reconstruction. In referring to that he said that the hon. member for Acadia was entirely unfair to bring into his speech the fact that Doctor James, the principal of McGill university, who heads the seven-man committee, was of a gold mentality, had been advising the government, and perhaps as an adviser to the government had been advising them along lines that he himself supports- this same gentleman having been sent by the government to Great Britain to consult on post-war reconstruction. The member for Essex East said that the hon. member for Acadia was unfair, and he asked why the hon. member for Acadia did not bring in, ^ for instance, the remarks which the Minister of Pensions and National Health (Mr. Mackenzie) made in Toronto.
I should like to deal with that for just a moment, because I assert that there is no essential difference between the remarks made by the Minister of Pensions and National Health, at Toronto or at any other time, and any remarks which Doctor James has made, in connection with post-war reconstruction. Or I will put it in this way: There is not a single, solitary sentence which the Minister of Pensions and National Health has ever uttered on this subject which Doctor James could not support wholeheartedly; he could say "amen to anything the minister said. It seems to me that the hon. member for Essex East was unfair in the observation he made. Doctor James, as chairman of the seven-man committee on post-war construction, is an adviser to the government. I might say in passing that I am still waiting for the minister to say what is the policy of the government in respect to post-war reconstruction. He has not said anything yet. Bringing down bills for soldier reestablishment is not the thing for which this country is primarily looking. It is good in its place; we have nothing to say against such measures; but we are looking for something more.


Olof Hanson: Looking for $25 a month.

War Appropriation-Mr. Hansell	*


Ernest George Hansell: You know, it is the strangest thing in the world


Charles Edward Johnston: That a man will wake out of his sleep to make such remarks.


Ernest George Hansell: I ask my hon. friend, is there anything so mysterious about being able to pay the people of Canada $25 a month? He seems to think there is.


Olof Hanson: Why don't you pay it?


Ernest George Hansell: Let me tell my hon. friend over there who pounds his desk when he speaks, that the government of Canada are spending enough money to-day for things to blow into the air, to pay every adult citizen in Canada a dividend of $75 a month.


An hon. MEMBER:: Oh!


Ernest George Hansell: Well, figure it out for yourself.


Charles Edward Johnston: It is too much arithmetic for them.


Mr. GARDINER:: We are spending that money to keep them from getting blown into the air.


Ernest George Hansell: I am saying that is what they are doing. They are getting the money to blow into the air. To say that they could not get the same amount of money to feed the people is so illogical that I think the hon. member must have been awakened, not only out of sleep but out of a dream. I suggest to him that he go -back to sleep and finish his dream. Perhaps he will dream how that can be done.


Olof Hanson: If I pound my desk more than I speak, the reason is that I know my limitations, and I believe in not taking up time by talking nonsense.


Ernest George Hansell: I was referring to the hon. member for Skeena as the one who apparently woke out of his sleep.


Charles Edward Johnston: The one was pounding his ear and the other was pounding his desk.


Ernest George Hansell: I do not mind these interruptions. I must say that Hansard reads a little better when there is not a solid mass of type to read.
I have here an article entitled "To-day and To-morrow", which is an address broadcast from Ottawa by the Minister of Pensions and National Health; it was published in the Labour Review of October, 1941. The minister was talking of things as they exist to-day and 
things as they must exist after the war. I am going to read a few excerpts for the benefit of the hon. member for Essex East.


Mr. DEPUTY SPEAKER:: I must draw the attention of the hon. gentleman to the fact that his time is up.


Ernest George Hansell: I have nearly finished, Mr. Speaker.


Thomas Vien: The hon. gentleman can continue only with the unanimous consent of the house. Has he the unanimous consent of the house?


James Lorimer Ilsley: I have had to do this before, and it is a disagreeable thing to do, but I must say that it is all out of proportion for lengthy speeches to be made at times like these on a debate such as this. I think that the forty-minute rule ought to be observed by everyone.


Thomas Vien: The hon. member's time is up.


Ernest George Hansell: Thank you, Mr. Speaker. I regret that the minister made that last remark. We can discuss the resolution in its committee stage, and I am quite willing to accommodate the minister. I must say, however, that other hon. members have wasted more time than I did. I shall discuss the question later.


Mr. J. H. BLACKMORE (Lethbridge):: Mr. Speaker, inasmuch as it is so near eleven o'clock, I wonder whether we may call it eleven o'clock.


Some hon. MEMBERS:: No.


Some hon. MEMBERS:: Yes.


Thomas Vien: With unanimous consent it can be done, but I do not assume that the hon. gentleman has unanimous consent.


John Horne Blackmore: All right, Mr. Speaker.
In the first place, members of my group and of the organization I represent throughout Canada will favour this gift of a billion dollars; but the cost of this gift is far too great. To judge from the puerile remarks which four or five hon. members have been throwing about the chamber with respect to "twenty-five dollars", I suppose they will never come to realize that this cost is too high until the first thousand years after they are dead; but the cost of this gift is far too great. The minister is making the Canadian people pay double this billion dollars. A good many persons, even in this chamber, do not realize it.

War Appropriation-Mr. Blackmore
In the first place, the Canadian people, in blood and sweat and tears and struggle and effort, are paying the billion dollars. When they produce the beef and the cheese and the wheat they are paying the billion dollars. That is the first thought. The minister himself, in the first days of the parliament, when war was declared, made some statements which indicated that he saw what was going to be the true nature of the effort of Canada. I refer to Hansard of September 12, 1939, page 138, where the minister says:
Whatever such offsets may be, it is important to emphasize that, as I have already said, the real costs of war must come out of current production, out of the goods and services produced during the war.
The Canadian people, in producing those goods, either have paid that cost or are going to pay it in goods. Therefore they pay it once. Then on top of that they are called on to pay for it again, financially, in the form of a debt. The minister will correct me if I am wrong here; I am anxious to get this exactly right. He will tell me this: Is Canada going to be a billion dollars further in debt because she makes this gift to Britain?


James Lorimer Ilsley: No.


John Horne Blackmore: Then how is Canada
going to buy the goods she is giving to Britain?


James Lorimer Ilsley: Everyone wants Canada to
buy the goods anyway. It would be unthinkable not to produce the goods and buy the goods and supply them to Britain. Every person in this country wants Canada to continue to do that, and if Canada does that, Canada will be in debt for the money with which to pay for the goods, to the extent that they are to be paid for out of borrowed money. Therefore this transaction does not increase the indebtedness of the government to the Canadian people by one dollar.


John Horne Blackmore: But this fact is very
essential, that the Canadian people have paid for this billion dollars' worth of goods, or will pay for them-


James Lorimer Ilsley: Right.


John Horne Blackmore: -either with money
raised by taxation or with money raised by borrowing?


James Lorimer Ilsley: Yes.


John Horne Blackmore: That is the point.
It means that the Canadian people have paid financially for these goods which we are to
give away. That is the important point. It means that we are a billion dollars further in debt by reason of the transaction.


James Lorimer Ilsley: No, not by any means.


John Horne Blackmore: Well, if the country
is to buy a billion dollars' worth of goods and raise the money with which to pay for them, surely the country has incurred an obligation by reason of the purchase of those goods.


James Lorimer Ilsley: Not by reason of this transaction, though. They would have made the goods and the government would have bought the goods in any event. This transaction has nothing to do with that. It is not by virtue of this transaction that the government is buying the goods. This country is putting forward its maximum war effort, producing all the goods it can for carrying on the war. This does not increase the war effort of Canada. If it did, it would be a good thing, but it does not because we are doing our maximum, the most we can, anyway. This transaction does not increase the production of the Canadian people or the amount that the government of Canada pays the Canadian people. They would have paid that without this transaction. They would have paid just as much without this transaction. The only effect of the transaction is that it alters the post-war settlement; we shall not be owed as much by Great Britain afterwards as we would be without this transaction.


John Horne Blackmore: The simple fact of the matter is that the Canadian government has added to its obligations a billion dollars by the time it has given these goods to Great Britain.


James Lorimer Ilsley: By the time they got the goods, by the time the goods were produced, they would have added that much-not as a result of this transaction at all.


John Horne Blackmore: If the Canadian government lets Great Britain have $100,000,000 worth of wheat, the Canadian government raises $100,000,000 and buys wheat, w-hich means that the Canadian government adds to its indebtedness.


James Lorimer Ilsley: Not by virtue of giving the wheat. They are buying the wheat anyway. They are buying the wheat and whether they give it away or sell it, or whatever they do with it, it is not the terms on which the wheat is disposed of that make any difference whatever in the obligation of the Canadian government to the Canadian people-in the debt of the Canadian government. It makes no difference at all, not to the extent of a dollar.
1482	COMMONS
War Appropriation-Mr. Blackmore


John Horne Blackmore: I do not think there is any misunderstanding between the minister and me. The important fact for the Canadian people to get is that Canada as a government is paying in good Canadian money for the whole of this billion dollars, and she is raising the money with which to pay for the goods, either by taxation or by borrowing-


James Lorimer Ilsley: Exactly.


John Horne Blackmore: -and in this case it is by borrowing.


James Lorimer Ilsley: No; it is not by borrowing necessarily. It is by taxation and borrowing. No one can allocate our borrowing to this transaction. The hon. member who preceded the hon. member now speaking talked about it as if we were borrowing the whole amount for this. He might as well have said that we were raising it all by taxation. One cannot say it is borrowed money rather than taxes that goes to pay for these particular goods. As a matter of fact, our tax revenues will very greatly exceed this billion dollars, and one might very well say that we were not borrowing a dollar to go into this. One might as truthfully say that as to say that all the money going into this is money that is borrowed.


Ernest George Hansell: I did correct myself.


John Horne Blackmore: So the Canadian government is taxing one-half of the money it is now spending on everything-war and current expenses and loans and gifts-and it is raising the rest by borrowing?


James Lorimer Ilsley: It is taxing a great deal more than half.


John Horne Blackmore: On over-all expenditures of government?


James Lorimer Ilsley: It takes not very far from half if the assistance to Great Britain is included with our non-war expenditures and our war expenditures during the present fiscal year. But our tax revenues, our total revenues, which are a little higher than tax revenues-because they include post office revenues and certain miscellaneous revenues -are enough this year, or almost exactly enough, to cover our total direct war expenditure-not including our assistance to Britain, or non-war expenditures, but the total direct war expenditure of Canada, which has been met entirely, or is being met entirely, this year out of revenue.


John Horne Blackmore: We would be safe in saying, then, that practically one-half of this billion dollars is being raised by taxation, and one-half by borrowing. If we take it proportionately we are spending this year

about $3,000,000,000 for all expenditures- well, say, $3,500,000,000-of which virtually one-half is to be raised by taxation.


James Lorimer Ilsley: I do not know.


John Horne Blackmore: Well, roughly speaking.


James Lorimer Ilsley: I shall have an estimate of that in the budget.
Mr, BLACKMORE:	Roughly speaking,
that would be true?


James Lorimer Ilsley: I do not know what our taxation will be.


John Horne Blackmore: I will go so far as to say that from the evidence adduced so far in the discussions in the house that is the general conclusion that we can draw- that we are raising by taxation one-half of the money it is costing us to carry on, and the other half is becoming a debt against the Canadian people.
On motion of Mr. Blackmore the debate was adjourned.
It being two minutes after eleven o'clock, the house adjourned, without question put, pursuant to standing order.
Friday, March 20, 1942