1942-03-18

[Stage Direction]
First report of standing committee on agriculture and colonization.-Mr. Weir.

[Stage Direction]
MR. LACOMBE-ARTICLE PUBLISHED IN "i.'aCTION
catholique" on march 17
Mr. LIGUORI LACOMBE (Laval-Two Mountains) (Translation):: Mr. Speaker, on a question of privilege, I wish to state that on March 17, 1942, L'Action Catholique published the following remarks about me:
While behaving like a choir-boy, Mr. Lacombe uses coarse language. . . .
Yesterday he said, without turning a hair, that the Quebec East electors had allowed themselves to be bribed wholesale because they did not vote for the Canadian party.
Mr. Speaker, I submit that this item is a pure fabrication. The hired scribe of L'Action Catholique would deserve to be summoned to the bar of the House of Commons to answer for his wanton attack against me and the Canadian party.
Mr. Lorenzo Pare would like to shelter under a racial cloak the alleged hero whose defence he takes. What he writes about me is a tissue of lies. The ineptitudes of that scribe are beneath my contempt.
Since it has allowed such foul statements to be published in its columns, I ask the readers of L'Action Catholique to return that paper to its editor, after having struck out the word "Catholique", which those people should no longer be permitted to besmirch. The fact that they are drawing money from the provincial treasury is their own concern. They are at liberty to wallow in the black ink of Mr. Godbout's printing contracts. Let them change the name of their paper or cease to publish it, because that is imperative in the best interests of religion and country. How shameful for a

Questions oj Privilege
paper bearing such a great name to ridicule the choir-boys who are both the adornment and the pride of our places of worship!


Some hon. MEMBERS:: Order.


Liguori Lacombe: How can a paper which bears such a great name attack a member who has for years stood up in this parliament in defence of our religion and our creed against the attacks of the Reverend Shields and the breakers of the Sabbath. What a servile attitude! What a disgrace!



MR. RALSTON-REFERENCE TO STATEMENT OF THE LEADER OF THE OPPOSITION IN DEBATE ON MARCH 17

Hon. J. L. RALSTON (Minister of National Defence):: Mr. Speaker, I rise to a question
of privilege. Yesterday afternoon when I was out of the house the leader of the opposition (Mr. Hanson) naade this statement, as reported at page 1372 of Hansard:
How different was the position in 1935 when the legislation was set up.
He was speaking of the wheat bill. He went on to say:
The present Minister of National Defence, then the mouthpiece for the grain exchange and the other big interests from Winnipeg-


Mr. HANSON (York-Sunbury):: Was this not all gone into last night? Can it be done a second time? Two questions of privilege on the same matter?


James Layton Ralston: My hon. friend is extremely agitated;-


Richard Burpee Hanson: Not a bit.


James Layton Ralston: -he was not so agitated when I called him at his room last night and advised him that I was going to speak of this in the house. I call on my hon. friend to withdraw unequivocally that statement. I unequivocally denied it and my hon. friend knows perfectly well it is untrue. I ask him to withdraw it.


Richard Burpee Hanson: I will certainly deny that I knew it was untrue. If the statement is unparliamentary I will withdraw it. If he was not the mouthpiece of the big interests then he was the ally of the big interests.


James Layton Ralston: I am asking that my hon. friend unequivocally withdraw that statement. I deny equally that I was the ally of the big interests. I want to say to my hon. friend that if there was anything wrong in connection with the legislation which was introduced and supported at that time by my associates and myself, his government, which commanded a very large majority in this house, could very readily have voted it down. Instead of that, the then prime minister, his leader, accepted those suggestions, put them in a bill and passed the bill, and further my hon. friend stated yesterday that what was proposed was "quite proper and was quite properly agreed to, and that was done."


Richard Burpee Hanson: Why make a speech about it?


James Layton Ralston: I am not making a speech; I am stating to my hon. friend that the statement that I was the ally of the big interests or that I was the mouthpiece of the big interests are both equally and unequivocally false.


Richard Burpee Hanson: If the statement is unparliamentary I withdraw it.


James Layton Ralston: I ask my hon. friend to
withdraw the statement unequivocally.


Richard Burpee Hanson: Does your Honour rule that I have to withdraw that statement?


Mr. SPEAKER:: A specific denial has been made of the statement, and I think it should be withdrawn.


Richard Burpee Hanson: I bow to
your ruling and withdraw it.



MR. POL'LIOT-REFERENCE TO STATEMENT OF MR. RALSTON ON MARCH 5

[Stage Direction]
Mr. JEAN-FRANCOIS POULIOT (Temisoouata): Mr. Speaker, I rise to a question of privilege, and I shall proceed by referring to some exhibits. Exhibit P-1 is the French text of a letter which I read in the house on March 2, and which is transcribed at page 953 of Hansard. I hold in my hand the very copy that was sent to Hansard, in which there is reference to "F. Lieutenant, Mr. Wisseman," though I learned afterwards that the real name was W'iseman. Exhibit P-2 is a copy of Hansard for March 2, in which I note something wrong in the translation of that letter. The translation does not mention that "F. Lieutenant Wisseman" was "F. Lieutenant." He is only called "Lieutenant Wisseman." Exhibit P-3 is a copy of Hansard of March 5 at which time, on the orders of the day, the Minister of National Defence (Mr. Ralston) referred to my statement, which I have already mentioned, in these words, at page 1049:
During the course of that same speech the hon. member read a letter from some young man at a training camp at Brantford, complaining that he had been subjected to some persecution on account of speaking French, and that in the course of an altercation which
Questions oj Privilege
[Stage Direction]
occurred he was arrested and put into the guard room. I have had a report from the training camp at Brantford, and the information I get is that a check of the guard reports reveals that only two men were confined in the guard room over the week-end of February 1, 1942, which was the date referred to, these being two drunks. Neither of these men was a French-Canadian. Inquiries made of all concerned reveal no knowledge of any such fracas as that described. There is no officer at this training centre by name of Lieutenant Wisserr.an, which is the name of the officer referred to by the hon. member in his speech.
There are many other exhibits which I cannot produce just now. They are copies of the five o'clock editions of the local newspapers on March 5, and the morning editions of March 6, in which the statement made by the minister in the house was quoted under big headlines. But on March 4, before the minister made his reference in the house, Mr. Malcolm MacLean, one of the assistants to the Minister of National Defence for Air (Mr. Power), telephoned and asked for a copy of the letter, which I sent him. Then I received from the air department a report which was altogether different from that received from the Department of National Defence. All the facts I mentioned in the house were substantiated in the report that was sent to me by Mr. MacLean.
I congratulate the Minister of National Defence for Air on having transferred the man who lodged the complaint to another camp in the province of Quebec. But my first point is this. We have such difficulty in getting information at times, especially from the Department of National Defence, that when hon. members ask for definite information they should be given accurate information. My second point is that during this war all five war ministers are jointly responsible for all war departments, and no minister can give information of the kind given by the Minister of National Defence unless he obtains complete information beforehand. There are two camps in Brantford, one under the Department of National Defence and the other under the Department of National Defence for Air. My submission is that it was not right for the Minister of National Defence to answer the question as he did without first looking at the text of the letter I read, which was correctly quoted during the course of my speech as reported in Hansard, and second without knowing whether the complaint was about any camp in Brantford. Therefore, sir, I protest very strongly about it, and I hope such a thing will not occur again in future.
James Layton Ralston: Mr. Speaker, if my hon. friend will look at his statement at page 1046 of Hansard he will see that he was referring
[Mr. Pouliot.l
to the handicap which he said sometimes existed with regard to French-Canadians in the army. He says, "French-Canadians are often handicapped in the army," and then he goes on, "Here is a letter that I will read." He speaks of the letter being in French, and then reads it. I saw a translation of the letter; I knew it was with regard to the army, and I made this statement. I made no inquiries whatever with regard to whether or not there was a training camp at Brantford under the Department of National Defence for Air; and I had no knowledge of there being any officer by the name of Wiseman there. I made the statement with regard to the army; and I think my hon. friend will realize that I and my colleagues are associated as members of the government, just the same as I am associated with my hon. friend the Minister of Munitions and Supply, and every other minister. Each minister must answer with regard to matters which may arise concerning his own jurisdiction, and I must say that I dissent from the suggestion that before answering a question with regard to the army I have to consult my hon. friend the Minister of National Defence for Air or the Minister of National Defence for Naval Services to find out if some particular incident occurred in connection with those sendees.


Mr. POULIOT:: Once more I was right.



ALASKA HIGHWAY


[Stage Direction]
Right Hon. W. L. MACKENZIE KING (Prime Minister); Mr. Speaker, on March 6 I announced the conclusion of an agreement with the United States under the terms of which the United States government had offered to construct and provide for the wartime maintenance of a road from Fort St. John in northern British Columbia to Alaska. I added that this offer had been accepted and that its terms would shortly be set forth in an exchange of notes to be made public. The exchange of notes was made this morning between the United States minister and myself, and I now table copies in English and French of those notes. I would ask the consent of the house to have the notes printed in the Votes and Proceedings of to-day.
Richard Burpee Hanson: Is there any correspondence other than that to which the Prime Minister has now referred?


Mr. MACKENZIE KING:: That is the only correspondence I am at liberty to table at the present time. However I shall see if there is anything else that might be laid on the table.

Questions



CANADIAN ARMED FORCES


William Lyon Mackenzie King: Mr. Speaker, I should like to make an announcement with respect to unity of command between the different services on the Atlantic and Pacific coasts.
The war committee of the cabinet have approved a unanimous recommendation from the chiefs of staff that the following measures be implemented at once with a view to establishing unity of command as between the three Canadian services in respect of the defence of the west coast of Canada, the east coast of Canada and Newfoundland:
(a)	The senior member of the joint service committee on the west and east coasts to be designated as commander-in-chief, west coast defences and east coast defences respectively.
(b)	The primary function of the commander-in-chief will be to coordinate the preparation and execution of the defence plans of the three services in respect of such forces as may be allotted to his command by the chiefs of the respective services. He will in consultation with the senior commanders of the other services, allocate tasks to the three services and coordinate the combined effort.
(c)	The commander-in-chief will exercise strategic direction of all three services and tactical command of his own service. He will not exercise tactical command in respect of any service other than his own. To ensure closer tactical coordination, the operations rooms of the three sen-ices on both coasts ire being combined.
(d)	The senior member of the joint service committee in Newfoundland will be designated, in respect of the three Canadian services, as commanding Newfoundland, defences. His functions in respect to Newfoundland will be the same as those kid down above for com-manders-in-chief, west or east coast defences.


Richard Burpee Hanson: Now that the Prime Minister has made that announcement may I say that it is quite in conformity with what the hon. member for Vancouver South (Mr. Green) has advocated-and I do not intend to forestall him. However I should like to commend the Prime Minister for making the announcement in parliament rather than having members of parliament read it in the public press.


Mr. GREEN:: Could the Prime Minister tell the house what particular officers will be in command as a result of this change?


William Lyon Mackenzie King: On the Pacific coast I believe it will be Major-General Alexander, who is at the present time the
senior officer. On the Atlantic coast it will be Major-General Elkins, and in Newfoundland Major-General Page.


Mr. CHURCH:: Would the Prime Minister be good enough to tell the house what military value this road will have?


William Lyon Mackenzie King: I was speaking about the military command. Is my hon. friend speaking about the Alaska highway? Perhaps he would refer his question to the hon. member who sits immediately behind him.



ORDER IN COUNCIL SETTING UP CANADIAN WOOL BOARD LIMITED

Hon. J. L. ILSLEY (Minister of Finance):: Mr. Speaker, in compliance with the request of the hon. member for Waterloo South (Mr. Homuth) I lay on the table copy of an order in council setting up the Canadian Wool Board Limited, and the copy of a press release of the wartime prices and trade board in reference to the Canadian wool board.



QUESTIONS

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

Mr. WRIGHT:: 1.	What is the total estimated cost to the government of erecting and equipping the magnesium plant located near Haley station, Ontario?
2.	In whose name are the patents on the extraction process to be used there registered?
3.	Is the plant government owned?
4.	Will it be operated by government direction as a government project?
5.	If not, what company or companies are to operate same and on what basis?


Mr. HOWE:: 1.	The total estimated cost to the government of erecting and equipping the magnesium plant, known as Wartime Metals Corporation, located near Haley's Corners, Ontario, is $2,675,000 for a plant to produce 10 tons of magnesium per day, and if this is increased to 20 tons output per day a preliminary estimate indicates a total cost of approximately $6,000,000.
2.	The applications for patents were made in the name of the inventor, Dr. L. M. Pidgeon, according to the rules of the national research council, and in due course will be assigned to Dominion Magnesium Limited.
3.	The plant will be government owned.
4.	The government is entering into an agreement with Dominion Magnesium Limited, whereby the plant of Wartime Metals Corporai m
Questions

tiou will be managed and operated by Dominion Magnesium Limited for and on behalf of his majesty until the cessation of hostilities, without fee or profit, and after the cessation of hostilities if so required by his majesty, upon mutually satisfactory terms then to be agreed upon.
5.	Answered by 4.


* CUSTODIAN OF ENEMY PROPERTY
Mr. HANSON (York-Sunbury):: 1.	What is the total value of the property of all kinds in the control of the custodian of enemy property?
2.	What is the value of the property of all kinds of which title or possession has been taken by the custodian from nationals of each of the enemy or enemy-occupied countries?
3.	What is the value of the property of all kinds held by the custodian in respect to interned persons?
4.	Is there an advisory committee to the custodian of enemy property?
5.	If so, what are the names of the members of such committee; when were they appointed, and by whom were they appointed?
6.	What salary, allowance, fee or other emolument, including travelling expenses, is paid to each member of the advisory committee; and what is the total amount paid to each member since his appointment?
Mr. HANSON (York-Sunbury); I have had some communication, with the Secretary of State (Mr. McLarty) with regard to this question, and I would suggest that questions 1 and 2 be deleted, with the privilege of returning to them at a later date, if it should seem desirable to do so. Perhaps questions 3, 4, 5 and 6, which are rather innocuous, might be answered.


Mr. McLARTY:: That is agreeable.


Georges Parent: Nos. 1 and 2 are dropped; Nos. 3, 4, 5 and 6 stand.


Mr. POWER:: Pass the others as being
innocuous.


Richard Burpee Hanson: They are;
I know the answers now to all but No. 3.


ROYAL CANADIAN MOUNTED POLICE
Mr. DIEFENBAKER:: 1.	How many men have been taken on the strength of the Royal Canadian Mounted Police since the outbreak of war?
2.	By provinces give particulars of (a) numbers enlisting, (b) numbers of those between
20 and 24 years of age inclusive?
Mr. ST. LAURENT:
1. 1,505, made up as follows:
Recruits	 1,256
Reengaged ex-members_____	249
Total	 1,505

In addition to the foregoing, 4,199 ex-service men have been engaged as special constable guards for the protection of vulnerable points and various public utilities across the dominion since the outbreak of war, but during the same period 2,740 of these have been discharged.
There were also 85 men engaged as ordinary special constables for duty as dog-drivers, artisans, cooks, etc., but during the same period, 98 of that class of employee were discharged.
2-	(a) Numbers (b) Number
enlisting by between ages
	Provinces	of 20-24 inclusive
P.E.I	8	4Nova Scotia ...	69	45New Brunswick.	28	19Quebec 	157	107Ontario	431	240Mantoba 	184	112Saskatchewan ..	276	179Alberta 	256	148British Columbia	96	42Totals 	1,505	896


PLEBISCITE-RAYMOND RANGER
Mr. LACOMBE:: 1.	Does Mr. Raymond Ranger, registrar for division No. 4, Montreal, hold the position of returning officer for the county of Jacques Cartier in connection with the taking of the coming plebiscite?
2.	If so, why does he hold both positions?


Mr. McLARTY:: 1.	Mr. Raymond Ranger is holding the position of returning officer for the electoral district of Jacques Cartier under section eight of the Dominion Elections Act, 1938, but has been granted leave of absence as returning officer and will not act as such at the pending plebiscite.
2.	Answered in No. 1.


* YUKON AIRPORTS
Mr. BLACK (Yukon):: 1.	What amount of public funds has been expended to date by Canada in building and improving each airport at Edmonton, Grande Prairie, Dawson Creek, Fort St. John, Fort Nelson, Watson Lake, Whitehorse?
2.	Are any of said airports completed, if so, which of them?


Charles Gavan Power: With reference to question No. 27, I suggest it would not be in the public interest to give this information. These aerodromes form part of the air defence of Canada, and, indeed, of the American con-

Questions as Orders for Returns
tinent, and to give this information would permit the enemy to make an intelligent guess, to say the least, as to the size of the airports, the extent of accommodation for aircraft and their tactical use in connection with defence. I would be willing to send my hon. friend any information privately.


Georges Parent: Answered.


Mr. BLACK (Yukon):: With all due respect to the minister, I do not think the reason he has given for not answering the question is well founded, but if it will embarrass him I *withdraw the question.


Charles Gavan Power: It would not embarrass the minister, but it might embarrass the defence of Canada. I will give all the information that is desired if the house insists on it, but I doubt if it will.


JAPANESE MINISTER AND CONSULAR OFFICIALS IN CANADA
Mr. REID:: What steps have been taken by the government regarding the return to Japan of the Japanese minister in Canada, and likewise the return of all Japanese consuls and officials resident in Canada?


William Lyon Mackenzie King: The question of return to Japan of the Japanese diplomatic and consular officials resident in Canada is a counterpart of the question of return to Canada of the Canadian diplomatic and other officials resident in Japan and Japanese occupied territory in the far east. Their repatriation is also bound up with a general plan of exchange of United Kingdom and United States officials and officials of other allied countries. The consideration and discussion of conditions of exchange, under this general plan, by the allied governments concerned has been the subject matter of much correspondence between themselves and, through the representatives of their respective protecting powers, with Japan. Much progress has been made with a view to reaching a satisfactory agreement and to completing the necessary arrangements. The Canadian government has kept closely in touch with the situation, through consultation with the United Kingdom and the United States governments and through the government of Argentina, our protecting power in Japan and in conversations with the consul general of Spain in charge of Japanese interests in Canada. It may be added that, concurrently, consideration is also being given to the exchange of nationals who have no official status.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. DOUGLAS (Weybum):: 1.	What price was received for the used crank case oil from the Saskatchewan air training fields during the calendar year 1941?
2.	How many gallons were sold and at what price per gallon?
3.	Who purchased this oil?
4.	Has any attempt been made to salvage used crank case oil?
5.	If so, what would be the approximate cost per gallon?


R.C.A.F.-OFFICERS
Mr. WINKLER:: 1.	How many officers of the permanent force of the Royal Canadian Air Force are now serving in Canada, and how many overseas?
2.	What .are their names, what rank was held, what pay and allowance was received by each one of those in pre-war service on September 1, 1939?
3.	What rank, total pay and allowances, including staff pay, flying pay and special allowances on account of dependents, are now being received?
4.	How many of these permanent officers are employed at headquarters staff, Ottawa, and headquarters staff of various commands?


BAGOTVILLE, QUE., AIRPORT
Mr. LACOMBE:: 1.	Did Mr. Francois Leduc render professional services to the Department of Munitions and Supply in connection with the airport at Bagotville, Quebec?
2.	If so, upon what date and what has he been paid for such services?
3.	Did Mr. Leduc render professional services to the Department of Munitions and Supply during the years 1939, 1940, 1941 and 1942?
4.	If so, when, for what purpose and how much was paid him in each instance?
5.	What is the total amount paid to date to Mr. Leduc by the government for professional services?


DOCTOR T. H. HOGG
Mr. HAZEN:: 1.	Was Doctor T. H. Hogg, chairman of the Hydro Electric Power Commission of Ontario, retained by the Mines and Resources department, or any other dominion authority, in connection with the construction of power plants by the Calgary Power Company on the Bow river, Alberta, during the period 1928-31 or at any other time?
2.	What was the total amount paid to Doctor Hogg for professional services and expenses in connection with the power development of the Calgary Power Company on the Bow river?
3.	Were fees paid by the department to Doctor Hogg reimbursed to the dominion government by the Calgary Power Company or any other private person, firm or corporation?

Questions as Orders for Returns
4.	What was Doctor Hogg's title and position with the Hydro Electric Power Commission of Ontario in 1928-31?
5.	During the last ten years had Doctor Hogg been in receipt of any payments by any departments of the dominion government for professional services and expenses in connection with the St. Lawrence waterway project?
6.	What is the total amount paid Doctor Hogg to January 1, 1942, in connection with the St. Lawrence waterway?



CIVIL SERVICE


Mr. SHAW:: 1.	How many clerks have been engaged by the civil service commission since January 1, 1941, (a) grade 1, (b) grade 2, (c) grade 3?
2.	How many of those so engaged have resigned since January 1, 1941?
3.	How many grade 1 clerks engaged since January 1, 1941, have been promoted to grade 2 standing, and how many from grade 2 to grade 3?
4.	How many clerks engaged since January 1, 1941, have been reduced from grade 2 or grade 3 to a lower standing?
5.	Have statutory increases in salary been granted to all clerks who have performed at least one year of satisfactory service?
6.	If not, how many have been granted such increase ?



PRAIRIE FARM ASSISTANCE


Mr. PERLEY:: What has been the total cost to March 1, 1942, of the administration in the province of Saskatchewan of, (a) the Prairie Farm Rehabilitation Act, (b) the wheat acreage reduction bonus, (c) prairie farm income bonus, (d) Prairie Farm Assistance Act?



PUBLIC DEBT

Mr. REID:: 1.	What was the total debt of the dominion government at the end of each of the years, 1939, 1940, 1941?
2.	What amounts of money have been raised by the Canadian government since September, 1939, and up to the end of the 1942 victory loan Irive, by way of, (a) bonds, (b) war savings certificates?
3.	What was the total debt of the provinces and municipalities at the end of each of the above years?



AIRPORTS IN CANADA, NEWFOUNDLAND, LABRADOR AND GREENLAND

Mr. BLACK (Cumberland):: 1.	How many airports in Canada, Newfoundland, Labrador and Greenland were constructed by or received assistance from the government?
2.	Where are they located?
3.	What has been the cost of, (a) the land, (b) the grading, (c) the drainage, (d) water supply, (e) roads leading to the airports, (f) paving runways, (g) erecting buildings, (h) equipping and fitting each airport?
[Mr. Hazen.l
4.	What has been the total cost of each airport?
5.	Have any other governments made contributions to such airports?
6.	If so, what amount for each airport?


Charles Gavan Power: There are three types of aerodromes, every one of which has been constructed by or has received assistance from the government. The first type, which I have mentioned and which forms part of the defensive system of Canada, is such that I do not believe it would be in the public interest to give information in connection therewith. Second, there are aerodromes for the use of the Royal Air Force transferred schools. I have had specific requests from the British government not to give information with respect to these. Third, there is the type of aerodrome constructed under the joint air training plan. I have been warned also not to give information about these, but since I have given so much about them I am quite willing to meet my hon. friend's request with regard to the general air training aerodromes only.


Mr. BLACK (Cumberland):: That will be satisfactory. I do not wish the minister to disclose information not in the public interest.


Charles Gavan Power: Order for return.



HALIFAX MILITARY CONTRACTS-LEO J. MCISAAC

Mr. BLACK (Cumberland):: 1.	Has Leo J. Mclsaac a contract at Halifax, with the government, to supply men and trucks for work on or around government property, such as the Wellington barracks, military hospital, south barracks. M.D. No. 6 headquarters, customs and federal buildings, or on defence projects, since September, 1939?
2.	If so, what is the nature of the contract?
3.	What are the rates of pay under the contract ?
4.	Does Mclsaac receive a salary for supervising the work? If so, how much has he been paid?
5.	If he is not on salary, how much has he been paid?
6.	What check is made of the work done under this contract?



MOTIONS FOR PAPERS


Mr. McGREGOR:: For a copy of all letters, telegrams, reports, memoranda or other documents in the possession of the government relating to various charges of theft, conspiracy to defraud and similar offences in respect of supplies for Valeartier camp, from 9th day of September, 1939, to date.


James Layton Ralston: I spoke of this the other day, and since then I wrote to my hon. friend telling him that I had from the judge

Labour Conditions
advocate general a statement to the effect that he considered it would not be in the public interest to bring down these papers at this time. The production of these papers would disclose information which should not be disclosed in view of the fact that an investigation is being conducted by the Royal Canadian Mounted Police. Therefore I ask my hon. friend to drop the resolution.


Richard Burpee Hanson: I think it
might be withdrawn.
Motion dropped.
BRADINO's BREWERIES PROPERTY, OTTAWA


Mr. DIEFENBAKER:: For a copy of all orders in council, treasury board minutes, letters, telegrams, memoranda of conversations, and all other memoranda, reports or documents, dated since the 1st day of January, 1936, relating to the acquisition by the government of the property of Brading's Breweries Limited, on Wellington street, in the city of Ottawa.



DALY BUILDING, OTTAWA-HEATING EQUIPMENT

Mr. ESLING:: For a return showing, (1) the date on which the oil-burning equipment for the heating of the Daly building was installed; (2) the cost of this oil-burning equipment; (3) the consumption of oil in this plant from October 1, 1940, to December 31, 1941; (4) the nearest government steam-heating plant to the Daly building.



WAR RISK INSURANCE


[Stage Direction]
On the orders of the day;
Mr. D. G. ROSS (St. Paul's):: I should like to direct a question to the Minister of Finance. AVben may we expect some information in connection with property damage war risk insurance?
Hon. J. I,. ILSLEY (Minister of Finance); I expect to introduce a bill before the Easter recess.



WAR EXPENDITURES COMMITTEE

[Stage Direction]
On the orders of the day:
Mr. M. J. COLD WELL (Rosetown-Biggar):: I should like to ask the Prime Minister when it is proposed to set up the war expenditures committee.


William Lyon Mackenzie King: I might say to my hon. friend that a day or two ago I was conferring with the leader of the opposition (Mr. Hanson) with respect to this matter. There has been some delay in receiving from the opposite
side the names of those who are to be members of this committee, and we were to have a conference concerning the matter before I made a final announcement. I am prepared to have the conference any time that will suit the convenience of my hon. friend. The committee will be set up very shortly.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. CLARENCE GILLIS (Cape Breton South):: Before the orders of the day are proceeded with I should like to address a question to the acting Minister of Labour, if there is one in the house. I endeavoured to secure this information from the Department of Labour before deciding to ask the question here, but I was not successful. My question arises out of a telegram received from union officials in Kirkland Lake, copies of which were sent to the Prime Minister and the Minister of Labour.


Georges Parent: While I do not know the question the hon. member intends to ask, the form he has used in presenting it suggests to me that it should be placed upon the order paper.


Clarence Gillis: My question is-


Some hon. MEMBERS:: Order.
Mr. HANSON (York-Sunbury)-: The hon. member might be allowed to state his question.


Georges Parent: I would be glad to hear the question before deciding.


Clarence Gillis: The telegram sets out that a thousand men are idle as the result of the dispute in Kirkland Lake. Up until last Friday, the 13th, the unions were carrying them on relief, but they had to terminate this relief last week, not being able to carry on.


Georges Parent: I think the form of the question is such that it should be placed upon the order paper.


Clarence Gillis: In my opinion this matter is urgent. I endeavoured to get the information in another way, but could not.


Some hon. MEMBERS:: Order.


Clarence Gillis: Have the government any
plans?


Some hon. MEMBERS:: Order.


Georges Parent: Order. I have ruled
already that the question should be placed upon the order paper. From what the hon. member has just said it is apparent that this question has been under discussion for several
Labour Conditions

days at least; therefore the question of urgency cannot apply. The hon. member should place it upon the order paper.


Clarence Gillis: These people will starve in the meantime.



UNEMPLOYED EX-SERVICEMEN AT KIRKLAND LAKE

[Stage Direction]
On the orders of the day:
Mrs. DORISE W. NIELSEN (North Battleford): Mr. Speaker, I should like to address a question to the Minister of Pensions and National Health. Is he aware of the fact that there are roughly thirty-nine exservice men, some of them with two boys in the army at the present time, who have worked in the mines for as long as from one to eighteen years and who are now being denied employment at Kirkland Lake? If so, does he intend to do anything to help them?
Hon. IAN A. MACKENZIE (Minister of Pensions and National Health): Mr. Speaker, I am not aware of the matter referred to by my hon. friend. I received no notice of the question she intended to ask this afternoon.


[Stage Direction]
On the orders of the day:
Mr. W. J. WARD (Dauphin):: Mr. Speaker, before the orders of the day are called, I wish to bring before the house a matter referring not particularly to the government but to the house at large. I have in my hand a resolution received from-


Some hon. MEMBERS:: Order.


Georges Parent: I would say that it would hardly be proper to place a resolution before the house on the orders of the day.


William John Ward: This is something which could not be placed on the order paper; the question is not in that form.


Georges Parent: If it cannot be placed on the order paper, I cannot see how the question can be asked on the orders of the day.


Mr. MACKENZIE (Vancouver):: I understand that the hon. member is raising a question affecting the privileges of this house; is that correct?


William John Ward: Mr. Speaker-


Some hon. MEMBERS:: Order.


Georges Parent: If the hon. member will say on his responsibility that this is a matter affecting the privileges of the house, then of course he may proceed.


William John Ward: I cannot say that it is, Mr. Speaker.


Richard Burpee Hanson: The argument of the Minister of Pensions was wasted on the desert air.



VEGETABLE PRODUCTS


[Stage Direction]
On the orders of the day:
Mr. JEAN-FRANQOIS POULIOT (Temis-couata): Mr. Speaker, I hold in my hand two orders in council, P.C.9228, of December 6, and P.C. 1/1656, of March 3, by virtue of which an expenditure of over $380,000 is provided for in respect of dehydrated vegetable products.
Georges Parent: Is this a question of privilege the hon. member is raising?


Jean-François Pouliot: No, sir, it is just a question.
I talked to Your Honour about it. Since it is provided .by these orders in council that one plant in British Columbia, two in Ontario and two in the maritime provinces will benefit by their provisions, I would ask the Minister of Agriculture if it is not the intention of the government to extend the same advantages to the city of Montreal, where is located the largest refrigeration plant in Canada.


Georges Parent: Order. This question
should be placed on the order paper.



WAR APPROPRIATION


[Stage Direction]
Hon. J. L. ILSLEY (Minister of Finance) moved that the house go into committee to consider the following resolution:
Resolved, that it is expedient to introduce a measure to provide:-
1. That sums not exceeding one thousand million dollars ($1,000,000,000) be granted to his majesty towards defraying the expenditures that may be incurred during the present war for the purpose of enabling the government of the United Kingdom to purchase in Canada aircraft, tanks, mechanical transport vehicles, guns, ammunition and other munitions of war, foodstuffs, raw materials and any other commodities and supplies essentia] to the conduct of the war and the maintenance of the people of the United Kingdom, and to assist in

War Appropriation-Mr. Ilsley
enabling the government of the United Kingdom to defray other expenditures incurred in Canada for war purposes.
2.	That the Minister of Finance may be empowered to accept from the government of the United Kingdom an obligation of the said government in such form and subject to such terms and conditions as the governor in council may determine for a sum of seven hundred million dollars ($700,000,000) in exchange for an equivalent amount, at an exchange rate of $4.45 to the pound sterling, of deposits in pounds sterling held in banks in the United Kingdom, the said obligation of the government of the United Kingdom not to bear interest until the termination of the war.
3.	That the governor in council be empowered to make provision for the purchase of any or all unmatured securities or obligations of or guaranteed, either as to principal or interest or both or as to dividends, by the Dominion of Canada or of or guaranteed either as to principal or interest or both by the Canadian National Railways, which are now or may hereafter be held by the government of the United Kingdom.
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.
He said:	Mr. Speaker, I propose to make
a statement to the house on this resolution while Your Honour is in the chair. It was my intention to read the resolution, but it will shorten the time I have in which to make my remarks if I simply refer members of the house to it.
The purpose of the resolution is to secure authority to introduce a bill to implement the proposal for a revision of our financial relations with Britain which was outlined by the Prime Minister (Mr. Mackenzie King) in his address on the speech from the throne on January 26.
Before explaining the major provisions of the resolution and of the bill which will follow, I think it would be desirable for me to give a brief historical review of our financial relationships with the United Kingdom and the rest of the sterling area since the outbreak of war. By doing so, it will be possible for me not only to explain the methods which have been followed from time to time but also to give to the house the necessary statistical information to show the magnitude of the problem which has had to be met and the extent to which different forms of assistance have been relied upon.
As the house is aware, the British requirements of Canadian dollars to make payment for their large purchases of munitions and war implements, foodstuffs, minerals and other products have greatly exceeded the amount of Canadian dollars they have realized through their exports to Canada, through their receipts of interest and dividends and through other ordinary commercial transactions between the two countries. Even before the war, the British balance of payments with Canada resulted in a deficit of Canadian dollars. In 1939, for example-and the figures for that year were not materially different from those for 1938- our exports to the United Kingdom amounted to 1331 million, while our imports were only $113 million, leaving a British merchandise deficit with Canada of $218 million. The rest of the empire, too, exported to us less than they purchased from us; in 1939 our exports were $104 million and our imports $75 million. The empire as a whole, therefore, had a net merchandise deficit of $247 million with Canada in 1939.
The extent to which our industry and our agriculture have contributed toward furnishing our British allies with the sinews of war, in the form of foodstuffs and primary products as well as war implements of all types, is strikingly illustrated in the remarkable rise in our exports in 1940 and 1941. To the United Kingdom alone our shipments increased from $331 million in 1939 to $532 million in 1940 and $702 million in 1941. To the rest of the British empire, including Egypt, our shipments rose from $104 million in 1939 to $157 million in 1940 and $300 million in 1941.1 mention Egypt especially because it is now no secret that the mechanized equipment used in the Libya campaigns was to a very considerable extent produced by Canadian workmen in Canadian factories.
Our imports from the empire have been well sustained and the policy of the government has been to encourage them. But notwithstanding some increase in our imports, the empire as a whole had an aggregate merchandise deficit with Canada of $445 million in 1940 and $723 million in 1941.
Nor does this empire deficit of nearly $1,200 million on trade account in the past two years tell the whole story. In addition, large sums have been required for expenditures not reflected in the trade statistics. The most important of these have been the British capital investments in war plants in Canada, amounting at the end of 1941 to $238 million, and British expenditures in connection with
War Appropriation-Mr. Ilsley
[Stage Direction]
air training activities in Canada. In addition, of course, there have been other expenses, such as for freight and storage, connected with the movement of goods within Canada.
Without going into exhaustive details, I may inform the house that after making allowance for all the sterling area's receipts of Canadian dollars of a current or ordinary nature-such as the proceeds of exports, interest and dividend receipts, shipping receipts and Canadian governmental expenditures in sterling incurred in connection with the maintenance of our troops in the United Kingdom-the sterling area's net deficit of Canadian dollars from the outbreak of war until the end of February, 1942, amounted to approximately 81,770 million.
This deficit has been financed in three ways. In increasing order of importance they are: gold payments from the United Kingdom to Canada; redemption or purchase, mainly in advance of maturity, of Canadian security obligations held in the United Kingdom; and the accumulation of sterling balances held by the foreign exchange control board on deposit in London.
Gold payments by the United Kingdom have amounted to 8250,000,000 over this whole period. As the house is aware, the last payment was received in December, 1940, and since that time the whole of the sterling area deficit has been financed by Canada out of its own resources. Over the period as a whole gold payments have covered less than 15 per cent of the sterling area deficit in Canada.
Not only have gold payments by the United Kingdom been kept to relatively modest proportions, but every ounce of gold we obtained from the United Kingdom was. promptly converted into United States funds and used to pay for United States goods needed to complete war orders for the United Kingdom. We cannot make the tanks, the anti-aircraft guns, the mechanized equipment of all sorts which we have supplied to our British allies, entirely out of our own domestic resources. We must purchase in the United States steel, machinery and machine tools, and coal and oil to drive the huge industrial plant which we have created and are still creating. For those things we must pay United States dollars. Exact statistics are not available, but there can be no doubt whatever that the amounts we have paid out in United States exchange in connection with British war orders in Canada are very greatly in excess of the amount of hard currency settlement received from the United Kingdom.
Our war production has, in fact, involved us in very heavy expenditures of American

dollars in the United States. Until December, 1940, the United Kingdom shared with us the burden of providing the necessary hard currency. Since then we have taken the whole burden on our own shoulders. The burden has not been a light one, in spite of the measures agreed upon at Hyde Park last April between the Prime Minister and President Roosevelt, which were calculated in part to alleviate our United States exchange difficulties.
I warned the house in introducing the budget last April that the need for United States exchange conservation had not passed; and lest anyone should think that the Hyde Park agreement has solved our United States dollar exchange problem, I should like to say that our official reserves of gold and United States dollars fell by S142,000,000, United States dollars, in 1941. Moreover, although the outlook is far from clear, it must be recognized that, failing remedial action, we appear to be faced with another sizable loss of reserves this year. Our United States dollar position is, therefore, still a major cause of concern. I stress this point because our United States dollar problem and our need of foreign exchange control are in part a direct consequence of our assistance to Great Britain, and it seems to me that at this time, when we are proposing to open a new chapter in our financial relations, the record regarding the past should be made quite clear.
Richard Burpee Hanson: The minister referred to the export of gold and the repatriation of unmatured Canadian securities. Did he mean all classes of unmatured Canadian securities, or only government or government-guaranteed? I do not think he was specific.


James Lorimer Ilsley: I shall make that very clear just a little later on.


Richard Burpee Hanson: I am sorry.


James Lorimer Ilsley: I shall state exactly what has been brought back.
Reverting now to the method by which the sterling area's deficit of Canadian dollars was financed up to the end of February, 1942, I come to the second method, namely, redemption or purchase, mainly in advance of maturity, of Canadian debts owing in the United Kingdom. This falls into two parts, official governmental repatriation, and private repatriation. The former is by far of greater importance, amounting as it does to over $400,000,000, while the private repatriation of capital amounts to nearly $125,000,000.

.	War Appropriation-Mr. Ilsley


Richard Burpee Hanson: That is, so far, liquidated. But that does not begin to cover the whole field over there, does it?


James Lorimer Ilsley: Those are the ones that have been brought back.


Richard Burpee Hanson: Well,
liquidated. That is what I mean-brought back or repatriated.


James Lorimer Ilsley: There have been four separate repatriations by the government of its own direct or guaranteed securities to date, apart from the new proposed repatriation of about $295,000,000 to which I shall refer later. The first of these, the 3i per cent dominion government loan of 1930/50, was announced in October, 1939, and was to an amount of over $90,000,000; the 4 per cent dominion government loan of 1940/60, the repatriation of which was announced in June, 1940, yielded $75,000,000; the third repatriation, that of the government-guaranteed Grand Trunk railway 4 per cent perpetual consolidated debenture stock, announced in October, 1940, yielded $105,000,000; and the fourth, the repatriation of the 4 per cent dominion government loan of 1953/58, the 3i per cent dominion government loan of 1958/63, announced in August, 1941, had to the end of February, 1942, yielded $130,000,000.
Through these transactions, the government has used up a fair proportion of the sterling accumulated by the foreign exchange control board in London.


Richard Burpee Hanson: What is the total of these figures?


James Lorimer Ilsley: That is $400,000,000 for the repatriation of government and railway securities. As I have explained to the house on a previous occasion, the principal way in which the British requirements of Canadian dollars have been met since December, 1940, has been through the foreign exchange control board buying sterling from the British exchange control authorities for Canadian dollars. By thus purchasing the sterling, Canadian dollars are made available to the British government for its purchases and other expenditures in Canada. The sterling purchased by us has been held on deposit in British banks to the credit of our foreign exchange control board, which of course acts as the agent of the government in these matters. These are the sterling balances to which I have made frequent references in the past, and the whole process has been popularly called the accumulation of sterling balances.
The amount of sterling held by the foreign exchange control board on deposit in London
has, of course, been reduced through the sale of sterling from time to time to the dominion government to purchase from the United Kingdom treasury the repatriated securities. After allowing for these and all other sales of sterling, including substantial sums used by the dominion government in maintaining our forces overseas, Canada's net accumulation of sterling balances from the outbreak of war to the end of February, 1942, has amounted to $992,000,000.
To summarize this part of my statement, the sterling area's deficit of Canadian dollars up to the end of February 1942 amounted to approximately $1,770,000,000, of which $250,000,000 was financed by the United Kingdom; nearly $125,000,000 was privately financed by discharge of private Canadian debts to the United Kingdom, including certain sales in the Canadian market of securities vested by the British treasury, and $1,400,000,000 directly financed by the dominion government-about $400,000,000 through repatriation of securities and nearly $1,000,000,000 through the accumulation of sterling balances in London.


Thomas Miller Bell: Could the minister give us any idea of what the total British investment in Canada, of all kinds, was and is at the present time?	.


James Lorimer Ilsley: I have not the accurate figures, but there are Canadian dollar securities still owned in the United Kingdom having an approximate value of $700 million. Also there are certain sterling securities on or in Canadian property and enterprises which may have a value of something like $300 million. That is all as far as we know that is left.


Thomas Miller Bell: About a billion dollars.


James Lorimer Ilsley: Yes, and a distinction must be drawn between sterling securities and dollar securities; the difference is substantial from our point of view. The value of the dollar securities held by residents of the United Kingdom on properties or in enterprises in Canada is approximately $700 million, the amount of the dollar obligations being provided for by this bill.
In order to assist the house in studying the development of the sterling area's deficit of Canadian dollars and the vaiying methods by which it has been financed, I am placing on Hansard a table summarizing the most relevant data available. The information is shown for three separate periods: (1) September 15, 1939, to March 31, 1940; (2) the fiscal year 1940-41; and (3) the fiscal year 1941-42. The figures for the current financial year involve an estimate for the month of March and are therefore tentative:

War Appropriation-Mr. llsley



STERLING AREA'S CASH DEFICIENCY OF CANADIAN DOLLARS

[Stage Direction]
(in millions of dollars)
-	Sept. 15, 1939, to Mar. 31, 1940	Fiscal Year 1940-41	Fiscal Year 1941-42 (Estimate)	Sept. 15, 1939, to Mar. 31, 1942 (Estimate)$	$	$	$1-Net cash deficiency	127	668	1,075	1,870of which- 2-Total financed by United Kingdom through	sale of gold to Canada	12	238	0	2503-Total financed by Canada	115	430	1,075	1,620(a) by governmental financing:-	(i) accumulation of Sterling	16	189\	1,029	1,494(ii) official repatriation of securities	88	172/	(b) by private repatriation of securities, gifts,	etc	11	69	46	126
The most striking feature of this table is, of course, the enormous magnitude of the recent Canadian dollar requirements of the sterling area. Its net cash deficiency, which amounted to $127 million from September, 1939, to the close of that fiscal year, rose to $668 million in the next fiscal year and it is estimated that it will approximate $1,075 million in the fiscal year now drawing to a close. Since December, 1940, the whole deficiency has been financed by Canada and practically the entire financing task has naturally fallen on the dominion government. We now estimate, it will be noted, that during the current fiscal year our own cash requirements for financing British war expenditures in Canada will be approximately of $1,029 million.
It is obvious that Britain's (and the sterling area's) purchases of foodstuffs, raw materials, munitions and war supplies in Canadia must continue, and probably increase. Canada has, indeed become an arsenal of democracy-after the United States and Britain the most important arsenal of democracy. The production of war supplies, including foodstuffs and war materials, and their supply to our allies, constitute one of the most important contributions which Canada can make to the winning of the war-to our own defence and security as well as to that of our allies. It would be unthinkable that any shortage of Canadian dollars should make it impossible, let us say, for Britain to secure from Canada the munitions and supplies necessary to equip and maintain her armed forces fighting on the front line, and the foodstuffs necessary to feed her gallant people. It was with this conviction that the Canadian government long ago advised the British Prime Minister that

the United Kingdom could continue to buy in Canada all essential supplies that could be procured and transported without any fear of her shortage of dollars-that somehow or another we would see that the Canadian dollars were made available. I believe that all Canadians approved the assurance thus given to the government of the United Kingdom. The enormous purchases and expenditures made in Canada by Britain and the rest of the sterling area have, of course, been an important factor in the expansion of production, employment and national income in this country.
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 which was bound to involve uncertainties, particularly as the amount grew far beyond anything which could be repaid by Britain ia 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

War Appropriation-Mr. llsley
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.
With these considerations in mind, and believing that it was the desire of the Canadian people to do their utmost to contribute to the success of the common cause, the government felt that Canada should not continue to accumulate these financial claims against Britain at the rapid rate at which these claims have accumulated in the past twelve months. We believed that the existing shortterm and relatively informal interim obligations in the form of sterling balances, should be converted into a formal long-term loan, to the extent to which they could not immediately be used to redeem or purchase dominion government or Canadian National railway bonds owned by British investors. This would clarify the existing situation and remove any uncertainty as to the disposition of the large amounts of sterling balances which have been standing to Canada's credit in London. This, of course, would not result in any change in
the balance of indebtedness between Canada and Britain, but would be merely a change in form, with some offsetting of one claim against another.
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. Of course, we shall continue to receive some goods and sendees from Britain which will automatically make available to her a certain supply of Canadian dollars or otherwise reduce her deficit with us. In other words, she will have receipts arising out of her ordinary exports to Canada, the shipping and insurance services she renders, interest and dividends on certain Canadian securities which will still be held by British investors, and the expenditures which we shall be required to make on our own armed forces in Britain.
Thus funds received in the normal way will meet part of the cost of British purchases and expenditures in Canada, and the $1,000 million dollar gift will be used in meeting the remainder of Britain's bills here; that is, in meeting what 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, take the form of these war supplies.
The explanation I have just given has been in very general terms. Perhaps I can make the matter clearer to the house if I now attempt to explain the more important provisions of the bill which this resolution seeks authority to introduce. In essence, the proposals are simple and straightforward; but because of the number 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.
Let me state first that to-day the dominion is holding sterling balances to the value of approximately $1,070,000,000, at the current mid-rate of exchange, namely $4,45 to the pound sterling. By the time the bill has been enacted this amount will be somewhat larger, but it will, I think, conduce to clarity in our discussions if we take to-day's figures of our sterling holdings as the basis of our discussions. Sections 4 and 5 of the bill will provide in effect that approximately $1,000 million worth of these balances may be used for two
[Stage Direction]
War Appropriation-Mr. Ilsley
purposes: first, an amount equivalent to $700 million will be transferred back to the British government in exchange for a British government obligation to pay $700 million Canadian dollars; and, second, a further amount will be used to purchase Dominion of Canada or Canadian National railway securities formerly held by British investors, but recently vested by the British government. The first of these provisions, it will be noted, merely provides for the conversion of sterling balances into a Canadian dollar obligation of the British government. This obligation will be non-interest bearing until the termination of the war, and thereafter the two governments will agree as to the rate of interest and other terms that will be applicable from that time forward. It has also been proposed to the British government, and they have agreed, that the funds arising from any redemption or repayment during the war of Canadian securities owned in Britain will be applied to the reduction of the loan-
Richard Burpee Hanson: That is. the $700,000,000?


James Lorimer Ilsley: Yes-as well as the proceeds of any sales to persons outside the United Kingdom of Canadian dollar securities now owned by residents of the United Kingdom. This will automatically result in a reduction of Britain's debt to Canada, at the same time that Canadian debts to Britain are reduced by the types of transaction I have mentioned. [DOT] The second provision involves simply another case of what I have called an official repatriation operation. This time we shall repatriate all the remaining dominion government and Canadian National railway securities still held in Britain, which are estimated to have a value of approximately $295 million. In this connection I may point out that these securities have been vested at the current market prices prevailing just before the public announcement of the proposals, namely on January 26 of this year.
It will be noted that these two provisions will use up nearly all the sterling balances standing to our credit at the time the bill will become law. I shall refer a little later to what we intend to do with the remaining amount of the sterling balances standing to our credit.
So much for the refinancing of past transactions which is to be accomplished by sections 4 and 5 of the bill. The main provision, of course, relates to the future, and is found in section 3 of the bill, which simply empowers the Minister of Finance, subject to regulations to be made by the governor in council, to pay to the British government lMr. Ilsley.]
out of the consolidated revenue fund sums of money up to an aggregate of $1,000 million to enable the British government to purchase in Canada foodstuffs, raw materials, munitions and other war supplies, and to defray other expenses incurred in Canada arising out of the war. Under the regulations to be approved, the Minister of Finance may make payments or advances from time to time upon his being satisfied that the amount thereof is necessary to make the said purchases and defray the said expenditures.
I can now say that it is our purpose, and the bill will so provide, that any sterling balances which are not required for the current operations of the foreign exchange control board after the provisions of sections 4 and 5 of the bill already referred to have been carried out, will be transferred to Britain and the dpllar equivalent thereof will be charged to this appropriation of $1,000 million. In this way all the sterling balances except those necessary for the current working purposes of the foreign exchange control board will be used up, and the gift will, in effect, begin sometime early this month, earlier than to-day. Until the exact amount of the securities to be repatriated has been determined it will be impossible to say what will be the amount of this excess sterling which will be handled in this way, but if our estimate of $295 million, representing the value of the securities to be repatriated, is correct, it will probably be of the order of $70 or $80 million.
The figure of a $1,000 million, representing the maximum amount of the gift to be provided for, was selected as being roughly the amount that would be necessary to meet the requirements of about a year's operations, on the basis of recent experience. If $70 or $80 million, as I have just estimated, is to be expended from the appropriation during the present fiscal year, the amount available for the new fiscal year will, of course, be $920 or $930 million. This should provide sufficient funds to take care of Britain's dollar deficit until sometime early in 1943. The house will,
I am sure, appreciate the difficulty of making a more precise estimate at this time. When the various sections of the bill are under consideration in committee of the whole, I shall be able to explain the various transactions which will be necessary with the foreign exchange control board to convert sterling balances into a Canadian dollar obligation of the British government, and to repatriate the dominion and Canadian National railway securities, but I believe that any attempt to explain these matters now might be needlessly confusing. I need only add that the bill will

War Appropriation-Mr. Ilsley
include the usual provisions found in any Canadian National railway financing and guarantee act enabling the government to make temporary loans to the Canadian National Railway Company in order to enable it to purchase its own securities, and that the concluding section of the bill will authorize the borrowing of moneys for the purposes of the bill up to an amount not exceeding $1,000 million.
When the repatriation operation has been completed and Britain has given its $700 million obligation to Canada in exchange for an equivalent amount of sterling balances, the balance of international indebtedness between Britain and Canada will remain on a reasonable and manageable basis. Britain will no longer hold any direct obligations of the Dominion of Canada or any securities of the Canadian National railway system, but she will continue to hold a considerable range of other Canadian securities and assets which will give her a continuing interest in Canadian prosperity. Included in these securities will be obligations expressed in Canadian dollars which I understand will amount in aggregate to roughly the same figure as the $700 million which Britain will owe to Canada in the form of the loan now proposed. That is the information I gave the hon. member for Rosetown-Biggar (Mr. Coldwell) a few moments ago. In addition, of course, Britain will hold a moderate amount of sterling obligations of Canadian debtors of various types other than dominion and the Canadian National Railways. The hon. gentleman asked me how much those were, or I undertook to tell him how much they were, and I said $300 million. I do not know, but we think it is in the neighbourhood of $300 million.


Richard Burpee Hanson: I saw a newspaper report which mentioned $1,200 million, but I do not know whether that is true.


James Lorimer Ilsley: Oh, it could not be, in Canadian sterling obligations. *
I believe the house will agree that it is highly desirable that Britain should continue to have a financial interest in Canada and that Canada should continue to have a financial interest in Britain, rather than that we should attempt to cancel off all Canadian obligations to Britain against obligations to Canada. The mutual financial interest which will remain is bound to strengthen the other economic ties -between the two countries which have been of such great value to each in the past and will continue to be of great value in the future. The fact that both countries will now be creditors in relation
to one another as well as debtors reflects the developing economic maturity of Canada. Perhaps I should add that this developing maturity should carry with it a growing sense of responsibility-responsibility among other things to accept imports from abroad in substantial volume as a normal course of events.
The arrangements which are proposed in this resolution and which I have outlined, I hope in sufficient detail, will enable us to continue to implement the pledge we gave to Britain last year that she could continue to purchase what she needed in Canada for war purposes up to the limit of our capacity, and that we would see to it that the dollars she required for this purpose were made available. That pledge, and these new arrangements, are further instances of the way in which we are not allowing financial considerations to limit or interfere with our war effort either in regard to our own forces or in regard to the assistance we are giving to Britain. We are making finance adjust itself to the hard realities of the unlimited demands of war.
I should also mention that the arrangements proposed in this resolution do not alter the amount of money we must raise in Canada for war purposes. That is determined by the scope of our effort and not by the method of settling the accounts. Whether we lend the money to Britain, or give the goods to her, we must continue to find the funds to pay Canadian farmers, fishermen, lumbermen, miners and munitions workers who produce the goods. All that is really in question in this resolution, and the bill which will follow it is the means by which the accounts are to be settled-who is to be charged for them and what form the international balance sheet will take. Of course, these matters will be of importance in post-war times, and it is my belief that the plan now proposed is best calculated to satisfy our post-war needs and conditions.
I need not emphasize that the bill which this resolution precedes is one of first importance, and, indeed, one without real precedent. Its purpose is to enable Canada to make the fullest and most effective use of its material resources by feeding and equipping the people and armed forces of Britain in order that they may be able with us to win their fight and our fight against a ruthless and powerful foe who threatens to make this year, 1942, the most critical year in the history of civilization. The free and unconditional gift from the people of Canada to the people of Britain will express emphatically the will of the Canadian people to do everything in their power to help achieve victory and thus assure their survival and ours.
1424	COMMONS
War Appropriation-Mr. Hanson (York-Sunbury)


Richard Burpee Hanson: Mr. Speaker, the statement just made by the Minister of Finance (Mr. Ilsley) is one that is full of interest for all loyal Canadians who are anxious to see a total war effort by Canada. A little later in the course of the brief remarks I have to make I hope I shall be able to produce other convincing reasons for supporting the resolution aside from those of a more or less economic nature to which the minister has referred, although indeed in the latter part of his remarks he did give voice to sentiments similar to my own.
Before entering upon a brief discussion of the resolution I should like to be informed by the minister as to the important reasons to which he made reference last night for wanting this bill passed before the Easter vacation. I had hoped that in his statement to-day he might clarify the statement he made last night, as reported at page 1403 of Hansard. He said then that he dreaded the possibility of arriving at Friday of next week with the bill founded on this resolution not having gone through. I say that at a later stage he should tell us exactly his reason for saying that. He has also told us that he expects the resolution to be fully debated at this stage, and I hope that it will be.
If I understood the minister's statement last night, and his statement of to-day, the pro-posed bill does not relate exclusively to the next fiscal year; it will provide continuing statutory authority not related to that particular year, but which will run into the following year. And for the small portion at least relating to the balance of sterling accumulated over there it will relate perhaps to this fiscal year. But it does not seem to me that with the amount unascertained., and being relatively small, there can be any great reason for haste.


James Lorimer Ilsley: It is $70,000,000 or $80,000,000.


Richard Burpee Hanson: What is
$70,000,000 or $80,000,000 between friends in this war, and the way this government has been spending? It is a mere bagatelle. In days gone by it would have amounted to something. In that connection may I say this-and I had intended to say it at a later stage-that there is much sound truth in what the hon. member for Temiscouata (Mr. Pouliot) said last night about the government's system of accounting to parliament and the people for these expenditures. When the minister's peace-time estimates are before the committee I hope hon. members will be free to express their opinion upon the methods adopted and the form in which the public accounts are

now presented to the people. To my mind they are not satisfactory. I am not speaking about huge expenditures, but about the ordinary expenditures of the country. Even if it costs money, if we are to let the people have a little daylight on the details of expenditures now being made, I believe we will have to revert to some other method.
So that my first inquiry of the minister under this resolution is this:	Why the need for
haste? No reasons he gave last night, and so far as I can see no reason he gave to-day, constitute a justification for haste or for putting the bill through before the Easter vacation. It can of course relate back to transactions which may have occurred during this present month, but for the most part the expenditure of the billion dollars will relate to the future, not to the past.
The proposal contained in this resolution, the details of which are not before us and will not be until we see the bill, implement the pledge contained in the speech from the throne wherein it was indicated that parliament would 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.
This was further elaborated upon in the speech of the Prime Minister in the debate on the address in reply.
The proposal as I understand it-the minister has made it quite clear to-day, and I congratulate him upon the clarity of his statement-covers much more than the allocation of a billion dollars for the purposes indicated. It encompasses not only that large appropriation of money, but also a second proposal which empowers the Minister of Finance to accept from the government of Great Britain $700,000,000 in terms of Canadian dollars to balance the existing indebtedness of the United Kingdom to Canada for expenditures heretofore incurred by Canada for Great Britain in connection with the war, and without interest, and until the termination of the war. The technical part of the operation has been explained to us in part. If elaboration is needed of the whole operation or of the technicalities of the operation,
I am sure that this will be made plain to us after we have had time to study the minister's statement. I am sure the minister will be glad to do that.
Then it covers the third proposal enumerated in the Prime Minister's statement, and more elaborately set out now in the minister's statement. This enables the government to purchase from the government of Britain certain unmatured securities or obligations,

War Appropriation-Mr. Hanson (York-Sunbury)
direct or indirect, of the government of Canada. That, of course, constitutes a continuation of the policy heretofore pursued, which was, I think, a natural policy for this or any other government to have pursued in the circumstances. I refer to the repatriation of our own debt. As the minister has indicated, there will be a continuation of the position of both debtor and creditor as between the two countries which will give each one an economic interest in the other. Of course that is important, but it is not the whole position.
I should like to point out in this connection that the government's proposal as such does not encompass the repatriation by this government of securities heretofore issued by Canadian corporations. I am not making any complaint about that; I presume it is a matter of arrangement between the government and those who seek to sell them in the Canadian market. There are certain misconceptions abroad with regard to this situation. I have heard the statement that the government are buying securities of distilleries and the like, bringing them back here and selling them to the country. I should like to clear the government of any charge of the kind. It does not cover that position at all. I think the minister should clear up this situation and make the position absolutely clear. I had some correspondence with the department about it, and I was reassured and reaffirmed in my own opinion. These stories are being loosely told throughout the country, and these things ought not to be.


Thomas Reid: Likewise about the Canadian
Pacific Railway.


Richard Burpee Hanson: All these corporations. One story that reached me was with regard to the secruities of the liquor interests of Canada held in the United Kingdom. I have even heard the government charged with supporting the liquor business, and I had to come to their rescue. The minister comes from the Annapolis valley, and his religious beliefs being what they are I am sure that he would not tolerate for a moment anything of that sort. I do not want to appear to be frivolous in the matter. These are misconceptions which the minister should clear up if he finds it is necessary to do so, as I think it is. However, that is merely by way of passing.


Mr. ROWE:: Clear up the liquor business itself.


Richard Burpee Hanson: There are two opinions about that. There is no doubt that there is grave anxiety about that position
in certain parts of Canada, and one result has been that the liquor control boards in the provinces down by the sea have had to reduce very materially their sales. I have no doubt the minister has had an earful about that long before this, as I have had.


Mr. KINLEY:: Do you not think that that is right?


Richard Burpee Hanson: I certainly do; there is no question about where I stand. At this point I should like to ask the minister if any consideration has been given by this government to the repatriation by this government, or by provincial or municipal governments with the assistance of this government, of securities heretofore issued by provincial and municipal governments and held in Great Britain. I believe there are such, but I have never heard that any of them have been repatriated.


James Lorimer Ilsley: No.


Richard Burpee Hanson: It occurs to me that there must be such securities, heretofore marketed in Great Britain, which are now held by the British government under its policy of marshalling foreign and dominion securities.
The fourth power sought and introduced in the resolution is an enabling power. This follows the usual practice and calls for no particular comment at this stage.
I should like to express the hope and wish that this measure will receive the unanimous support of this house and of the country. We should get behind the minister and the [DOT] government in this measure. The proposal before us is much more than a gesture; it is a tangible recognition of an obligation, the payment of which is long past due by Canada. Make no mistake about that. For generations before this war began Britain has been guarding our sea lanes and our trade routes and providing protection for our very existence, all without any cost to us. It has always been a matter of great regret to me that we have accepted this protection, in most cases without even an acknowledgment. We have accepted help and protection of inestimable value without, to our shame be it said, ever contributing a single dollar or a single man. That was before the war.
Since the war began Britain has been defending Canada on the seven seas and in every theatre of war. Our proposed contribution to Britain does not begin to measure up to the value of Britain's contribution to Canada in this war. I should like to emphasize that. I am not seeking for a minute to minimize what Canada has done for herself,
1426	COMMONS
War Appropriation-Mr. Hanson (York-Sunbury)
but without Britain's contribution in this war we would be another Norway or Denmark. The minister and the Prime Minister talk about the contribution by the government of Canada. That is not the correct designation. This is a contribution by the Canadian people and not by the government of Canada. I think that should be emphasized. I do not wish to be misinterpreted, neither do I wish to derogate from the credit due to the government for the proposal. But it should never be forgotten that this splendid contribution is first and foremost the contribution of the Canadian people. It is an expression of gratitude for services rendered, for value received, both before and since the war began.
An additional justification for this proposal, if any be needed, is to be found in the lease-lend policy of the United States. That policy and the operations under it long before the United States entered the war have been of great value to Britain in her defence, and in the defence of the world. I would go so far as to say, in the defence of the United States. It has been of great value to our gallant allies, the Russians. If one will recall the recent speech of Lord Halifax in connection with this and other matters he will realize the ramifications of the whole lease-lend policy. As I understand it, Britain has given to Russia in the form of certain equipment even more than she has received from the United' States. I suggest to this House of Commons and to the people of Canada that we can hardly be less generous to Great Britain than has the United States, having regard to our comparable resources. We have not the resources that the United States have, or as many of them.
There is a further important reason why we should make this grant. In peace time Great Britain has been our best customer for food products. The minister gave figures to-day to show the adverse balance of trade against Great Britain in recent years since the war began. That has been true for many years. The principal item making up that balance of trade has been food and food products from Canada, and in a more limited degree, and this is particularly true of our coast provinces east and west, our forest products.


Thomas Reid: And fish.


Richard Burpee Hanson: And fish. Since the war began Great Britain has been practically our only customer for food products. The United States have taken certain quotas of beef cattle and the like, but by and large Britain has been our best customer for food products over a long period of years.

Then there is the post-war period; where shall we look then but to Britain again for an outlet for a substantial part of our food products? Someone will say, the continent of Europe. Well, the peoples of Europe will have to be fed, but I doubt very much whether . they will be able to pay for it. All these are to me at least compelling reasons why all loyal Canadians should and will support this grant.
I wish now to refer to a matter that may not be received with as much satisfaction as what I have just said. I desire to call the attention of the house and of the Minister of Finance to a speech reputed to have been made by his colleague the Minister of Fisheries (Mr. Michaud) on February 7 last at a political rally during the by-election campaign in Quebec East, in the course of which, as reported by the Canadian Press, a reliable organization, the minister made the strange and in my view unwarranted and uncalled-for declaration that by March, 1943, Canada would be financially and economically free from Britain. He is further reported to have said, and I am now quoting his remarks as they appear in the press report:
We will have furnished enough provisions and arms by that time to pay off all debts that Canada owed to British capital.
The report goes on:
Being financially and economically free from Britain will mean, Mr. Michaud said, we shall be free to find markets where we wish. We shall no longer have to import from Britain things that our own workers can produce.
Frankly, Mr. Speaker, I was astonished when I read that press report. Just what did the minister mean? Are we not free and have we not always been free to find markets for our products whenever and wherever we wished?


Mr. MARTIN:: Did not the minister deny that?


Richard Burpee Hanson: I do not know. I never heard it denied. He should come in and deny it now if it never occurred. Then perhaps we should have some further investigation into the matter.


Paul Joseph James Martin: My recollection is that he did deny it.


Richard Burpee Hanson: I never heard it. I should have called attention to it long ago. I blame myself for not having done so.


Paul Joseph James Martin: The hon. gentleman did.


Richard Burpee Hanson: I referred to it just in passing. I did not elaborate on it as I am doing now. I do not recall this

War Appropriation-Mr. Hanson (York-Sunbury)
statement ever having been denied in this house; I am speaking subject to correction. What did the minister mean by "being financially and economically free from Britain?" Since when have we been in bondage financially and economically to Britain, and since when have we been bound to import from Britain things that our own workers can produce? I frame these questions on the allegations as reported in the press. All this was being said at a time when Britain was fighting our battles on land and sea and in the air-and said to win a by-election; a miserable performance if ever there was one.


Mr. MacNICOL:: Like the machine gun matter.


Richard Burpee Hanson: Yes, like the machine gun matter. What kind of mentality does a minister of the crown possess who would at this of all times give expression to such a view? I hope the Minister of Finance will repudiate it. In the present position he owes it to himself, he owes it to the government of which he is a member, and he owes it to Canada and to all Canadians to repudiate such views. I do not for a moment suggest that the Minister of Fisheries was expressing the views of the government or expounding government policies. I should be astonished beyond measure if that were so. But I have never seen anywhere that the Prime Minister has repudiated these views or utterances of the minister, as reported in a reputable press agency of this country, and I call upon the Minister of Finance and the government to repudiate them. I call to mind a somewhat similar situation in the time of Sir Wilfrid Laurier when the Hon. J. Israel Tarte, taking advantage of Sir Wilfrid's absence from the country to attend a conference overseas, went about Canada enunciating doctrines at variance, on paper at least, although not in reality, with government policy. What happened to him? Well, he was just sacked-that is what happened to him, and that is what ought to happen to the Minister of Fisheries if he said what is reported is true.
In the Royal Bank review of March, reference is made to what is termed a "misunderstanding" which appears to have arisen about this proposal of the government, a misunderstanding which I personally had not been aware of, since I had not seen any adverse criticism of the proposal or any evidence of a misunderstanding. 1 made some inquiries and I presume there may be such by the man on the street who is questioning this transaction, who may think that if we give a billion dollars to Britain we shall have just that much less to spend in Canada. But as I understand it, and as the minister I think has made abundantly clear this afternoon, that is not the proposal. The government is asking the Canadian people, through parliament, to make provision for meeting Britain's shortage of Canadian dollars by supplying, free of charge and without obligation, to Britain, not money, but munitions of war, raw materials and foodstuffs, up to a total amount of one billion dollars.
We must realize that these munitions, raw materials and foodstuffs are in fact part of our own defence. The term "one billion dollars" is only a convenient way of expressing the total of these munitions, raw materials and foodstuffs which we shall send overseas. That money, the public should understand, will all be spent in Canada, for wages and salaries, raw materials, company earnings, and what not. Much of it, I venture to think, will find its way back into the public treasury and into the coffers of the provinces and municipalities in the form of taxation. So that perhaps it is not quite as much as at first it would appear. That, of course, is just an incidence of the expenditure.
In the first two years of this war we shipped to Britain goods, supplies, and munitions of war in excess of one billion dollars. Payment was made by Britain in several ways, the three most important being (a) shipments of gold to Canada; (b) shipments of goods exported to Canada, and certain services, shipping and the like, the collection of interest and dividends, which are usually termed services, I think; and (c) the repatriation of Canadian government and government guaranteed securities.
But a large portion of it, as stated here this afternoon in exact terms, is supplied, as I understand it, by Canada by lending the money to Britain with the resulting accumulation of sterling by Canada. The effect of the two operations is not greatly dissimilar, for the time being at least. In neither case are we sending actual money. 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. I think it is reasonably certain that, if the war goes on long enough-and it looks as though it would- Britain will not be able to pay her debit *balances to us. Presumably her only means of payment would be in gold, goods and services. Payment in gold is most unlikely, I think, from now on. I doubt if She will have any to send us; for doubtless her gold will be exhausted by requirements in other quarters. I doubt if we shall want the gold) anyway,

1428	COMMONS
War Appropriation-Mr. Hanson (York- Sunbury)
except to use it in the way the minister has indicated the gold has already been used, namely, for shipment out of the country in exchange for commodities in the United States. If we accept payment in goods, is that going to affect our post-war economy? This is a question which we must look squarely in the face.


Paul Joseph James Martin: It depends on what kind of goods they are.


Richard Burpee Hanson: 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 the minister that far. Rut just how far can we go, having regard to the preservation of our own economy? I know there are Utopians who think that we are going to have the millenium with regard to trade after the war, and they interpret the Atlantic charter as the first step towards utopia. Let me again point out what I mentioned here a short time ago, that a very high authority in Britain, at the time we were over there, charged with this question of rehabilitation, and discussing .this very matter with us, told us definitely, referring to the Atlantic charter, that when the time came every country would have its own interpretation of that charter. That is the situation which we must visualize.
I return to my previous question: how is it going to affect our post-war economy? I ask it only for the purpose of stimulating thought, because we must have some thought for the future. At that time we shall be endeavouring to transform our war economy into a peace-time programme of employment for our own people-I mean our returned soldiers and sailors and our civilian population. That is the duty which will be cast upon the doorstep of this or some other government. We might as well ask ourselves right here, are we going to accept goods from Germany made under starvation conditions, perhaps on a fourteen-hour day basis-because that is what may happen if the German nation survives- ini competition with goods produced by Canadian workmen? I leave the matter there.


Mr. FRASER (Peterborough West):: We did, after the last war.


Richard Burpee Hanson: Well, if we did after the last war, perhaps we can profit and benefit by experience. I am not going to take any decided position, because possibly I shall not have any responsibility in regard to it. But I ask the hon. member for Brantford City (Mr. Macdonald), in whose town are being manufactured certain goods with which these imports might come into competition. I ask the hon. member for Essex East (Mr. Martii ) 
who also lives in a community whose products may be in competition with those of the war-torn nations of Europe, nations which will want to live after this war is over, which will probably have to buy our food, and which may be producing under economic conditions and living standards which no Canadian would want to tolerate for himself or his people. At the moment I do not know the solution of the problem, nor do I attempt to give any.
I talked to a great industrialist in Canada about this problem not many months ago. We were speaking about the prospects of exports of Canadian-manufactured goods-not food products-and he said that he saw no daylight in the outlook for sales of our industrial products, which would meet immediate competition from continental Europe.


Thomas Reid: Some industrialists are getting ready right now for that very fight.


Richard Burpee Hanson: We ought to take some long view in this matter. Certainly industrialists do not visualize any great happiness in connection with the export of industrial production from this country or the United States, countries whose standard of living is relatively high, in competition with countries in which there is bound to be a very low standard of living after the war. Of course if we are to have a system of communism-I do not use that word in its political sense-if we are to have a socialistic state where all will be at the same level, the Canadian workman may look forward to being dragged down to that level, not carried up to a higher standard. When peace comes we shall be faced with the problem of transforming our war economy to a peace-time programme of employment for our returned soldiers, sailors and airmen and for our civilian population theretofore employed in war work; and of reestablishing our industries on a peace-time basis, and of building up our domestic markets for consumer goods and finding markets abroad for our farm products and for such portions of our industrial output as we have available for export.
We do not want, I agree, to see a repetition of the position which obtained after the last great war, when international balances grew to dimensions which could not be dealt with, and when moratoria had to be declared. I should like to state this, however, that Great Britain certainly took care of her debt to Canada, and without any pressure at all.
This gift of one billion dollars, not in cash but in kind, and in the manner indicated by the minister-details of which we shall examine

War Appropriation-Mr. Coldwell
further when the bill is before the committee of the whole-is not only a great contribution to the winning of the war but it will, I believe, be some contribution to the winning of peace.


Thomas Miller Bell: I wish to say just a few words this afternoon, for I think it is necessary to read very carefully the remarks of the Minister of Finance (Mr. llsley) in introducing this resolution this afternoon before making any extended comment upon what he has said.
I want first of all to congratulate him upon the clarity with which the statement was made, and to say that as I listened to him I thought it was one of the most interesting and probably most significant statements that has ever been made in this house. I say that because I think there was for the first time a clear recognition that, after all, all the economic obligations among nations are settled by exchanges of goods and services, and that while figures in the ledger may signify some things, money as we have known it does not enter into the transaction at all. Consequently we have to think, at the present time and in the post-war years, in terms of goods and services not money.
Speaking on behalf of the group with which I am associated, I want to say that we support this gift to Great Britain. We are, however, under no illusions. Had we had any illusions as to the idealism that seemed to lie behind this gift, I think the words of the leader of the opposition (Mr. Hanson) this afternoon will have torn them all from us. We are making this gift not only because we want to do something to assist in maintaining the morale of Great Britain and the winning of the war, but because under a capitalist economy we dare not allow our best customer to get into our debt. In other words, we have the paradox of capitalistic society outlined very clearly this afternoon, and we need not be hypocritical in thinking we are doing this entirely from altruistic motives. We are not.
I once heard a former leader of the opposition-I refer to the Right Hon. R. B. Bennett -say that when negotiating with the representatives of British business it was well to remember that they are quite hard-boiled. I was born over there; I lived there the first twenty-one years of my life; I know something of them, and I know the history of the country in which I was bom. I thoroughly agree with what Viscount Bennett said when he was leader of the opposition. I think that by the same token we should view this matter realistically and not obscure the real issues that are behind this gift by all kinds of platitudinous statements about our obligations and our patriotism.
One reason why I support this gift is that I want to see assistance given to the hard-pressed British people. When I was over there last autumn I saw something of their difficulties, some of their privations. But at the same time I want to keep clearly in my mind that in this parliament I represent the Canadian people, or a fraction of them, and I want to view this matter realistically from the Canadian point of view.
The Minister of Finance said in the course of his remarks that if we make this gift and do not receive securities from Great Britain by way of repatriation, it will give her a continuing interest in Canadian prosperity. That is a fairly realistic statement, and I agree with it, that so long as interest and dividends continue to flow from Canada to Great Britain, so long will certain people in Great Britain be interested in commercial relationships with us. But it is precisely that kind of thing which, after the war, I should like to see removed from our relationship with Great Britain, and removed from the world, for that is neither more nor less than hard-boiled economic imperialism. If we are going to consider these matters from the point of view of hard-boiled commercial economics, then we should try to view the whole picture in its proper setting.
I must confess I was surprised this afternoon when, in reply to a question which I asked, the Minister of Finance indicated that to-day the holdings of British investors in this country have been reduced to approximately $1,000 million.


James Lorimer Ilsley: I may be wrong in that, sterling; that is the result of'my inquiries.


Thomas Miller Bell: Well, as the leader of the opposition said, when we are discussing balances, what are seventy, or eighty or a hundred millions between friends? I was surprised, I must confess, to hear that the amount had been reduced so substantially. I brought down with me this afternoon a copy of the "Canadian Balance of International Payments", published in 1939. Speaking again in round figures, I find that in 1937, the last year recorded here, the balance of British investments in Canada was approximately $2,500 million. Therefore, since the war broke out, the amount has been reduced by approximately $1,500 million. I am glad that that reduction has been made, for while these interest and dividend payments are made to Great Britain, they go to only a very small class in Britain who own the securities upon which they are paid.


Paul Joseph James Martin: All that is involved is a change of ownership.

War Appropriation-Mr. Coldwell


Thomas Miller Bell: The goods and services which are exported from this country are the product of the toil and labour of the Canadian people, and consequently there is a lien, if you will, upon the labour of the Canadian people from outside this country.


Paul Joseph James Martin: That is economic
nationalism.


Thomas Miller Bell: It is nothing of the kind.


Paul Joseph James Martin: It is the worst type of it.


Thomas Miller Bell: Nothing of the kind. If economic nationalism means that the people of a nation are going to own their own resources, utilize them for the raising of their own standards of living and the satisfaction of their own needs, both national and international, then of course that is economic nationalism. But if the only basis of trade between nations is going to be between some great creditor nation and a large number of debtor nations, then we have most of the nations in the world held in slavery to one nation. That is the antithesis of freedom, the antithesis of liberalism and the antithesis of the right kind of human relationships.
At this point I should like to ask the minister to tell the house-not now, but at some future time-just what our economic position is in relation to the United States and what effect the war is having upon that relationship.


Paul Joseph James Martin: What about Canadian
investments abroad, in other countries?


Thomas Miller Bell: If nations in which we have made investments can, by the production of goods and services, pay them off, then to that extent those nations are or should be better off internally.


Richard Burpee Hanson: No more free enterprise.


Thomas Miller Bell: "No more free enterprise," someone murmurs. That is analogous to the statement made earlier this afternoon, that socialism meant a dead level of equality. Well, of course, anyone who makes that statement is crassly ignorant of modern conditions.


Richard Burpee Hanson: Mr. Speaker, I object to the use of the words "crassly ignorant," and ask that they be withdrawn.


Georges Parent: If the reference by the hon. member was to the leader of the opposition, I would ask that the remark be withdrawn.


Thomas Miller Bell: I will withdraw the word "crassly".


Richard Burpee Hanson: That is not good enough. The hon. gentleman should not attribute ignorance to me or any other hon. member.


Thomas Miller Bell: I will say this, then, that the hon. gentleman appeared to me to be ignorant of modern conditions.


Mr. ROSS (Souris):: I think that should be withdrawn too.


Thomas Miller Bell: I need not withdraw that, because I am giving my opinion of the statement of the leader of the opposition; and I am not going to withdraw a warranted expression of opinion. To-day we have nations at war. We have Germany, which prostituted some of the features of socialism and called it national socialism; and even a prostituted socialism built up an economy which is causing us great trouble to-day. On the other hand, we have another nation with another theory called communism, which built up its form of socialism under conditions with which I profoundly disagree; but the basis was planning. The basis was the control and utilization of the economic resources and labour of those nations. To-day, whether we like it or not, we have to admit that they did a remarkable job in a short space of time. The challenge to us in the democratic countries is that if we are to survive under our democratic institutions, we must plan our internal economies so that men and women may live, produce, increase their standards of living after the war, and carry through the great war effort in which we are at present engaged.
But I was rather deflected from what I intended to say. I said1 I was surprised at the amount of securities already repatriated in Canada. In 1937, as I understood it, government securities including dominion, provincial and municipal securities, held in Great Britain amounted to $514,000,000; railway securities to $1,065,000,000, and manufacturing, mining and other securities to $1,105,000,000.


Thomas Reid: Are the interest payments given?


Thomas Miller Bell: They are given, but I did not note them. On the other hand, Canadian investments in Great Britain amounted to approximately $41,000,000, or an amount almost negligible when considering the large sums with which we are dealing to-day. I was particularly interested in a break-down of some of these figures. Referring to page 25 of the document I mentioned previously, and using the last available figures for 1936, we find that bonds and debentures totalled some $841,000,000, less the estimated purchase back of $100,600,000, or a net of $140,500,000. That $841,000,000 was made up as follows: Canadian

War Appropriation-Mr. Coldwell
National Railways, guaranteed, $406,000,000; Canadian National Railways, not guaranteed, $107,000,000, or a total of $513,000,000. Canadian Pacific railway securities held in Great Britain were as follows; common stock, $175,000,000; preferred stock, $133,000,000, or a total of $308,000,000, and, in addition, debentures $288,000,000. That, as I say, was several years ago.
To-day the minister said that up to the end of 1941 we had already repatriated approximately $400,000,000 of securities, and that $295,000,000, or thereabouts, would be repatriated this year. In addition, if I heard him aright and got it down correctly, some private securities have been repatriated, amounting probably to another $125,000,000. Therefore the total repatriated up to date, and intended to be repatriated this year, will amount to $820,000,000. I want to get this quite clear, so that I understand it. The amount, therefore, that has been repatriated will be about $400,000,000. Was the $125,000,000 repatriated before the end of 1941? I was not quite clear on that.


James Lorimer Ilsley: Yes, up to the present.


Thomas Miller Bell: So the additional amount for this year will be $295,000,000?


James Lorimer Ilsley: That is right.


Thomas Miller Bell: As I understand it, the Canadian Pacific railway stocks held in Great Britain, to the par value of about $308,000,000, and the debentures of the same company, amounting to some $288,000,000, or a total of about $596,600,000, have not been repatriated and are not being repatriated now?


James Lorimer Ilsley: That is correct.


Thomas Miller Bell: The Canadian National obligations will have been repatriated at the end of the coming year?


James Lorimer Ilsley: Yes.


Thomas Miller Bell: I am not suggesting that this should be done in connection with this $1,000 million, but when we come to make a settlement, having made this gift, why not also consider the repatriation of the Canadian Pacific securities? Further, what is happening to these repatriated securities? What percentage of them is being held by the government; what percentage sold? If they are sold, all we are doing is replacing one set of investors with another set of investors. True, our own investors in this country will then own the repatriated securities, and henceforth interest payments will be made to people in Canada. But what we are actually doing is substituting the Canadian investor for the British investor and,
as the minister and the leader of the opposition both recognized, there may be some disadvantage in that from the point of view of trade and commerce, under our present economic structure.
I should like to see more of these securities, particularly of industries like-if and when we repatriate them-International Nickel, some of our power corporations and the Canadian Pacific Railway, held by the government, so that we might have a controlling interest in some of these organizations when the war ends. In the post-war years we are going to face serious problems of rehabilitation, and if we are to face them realistically, the control of some of our great resources and some of our great industries may be of fundamental interest to us. Therefore I should like to see a policy worked out in connection with repatriation plans whereby we would hold at least some of the securities so that we may have some determining voice in the control of Canadian industry when this war ends.
In conclusion, I should like to express this point of view once more-I felt it when I was in Great Britain; and others to whom I have listened since I came back, notably Mr. Brockington and others over the radio, have expressed the same opinion-that in Great Britain this is not only a war; it is something more than a war. It is the precursor of great social and economic change.
Only a few days ago I received a letter from a young man in Great Britain whom I met there, a young man who had been a member of a large elected body on which he sat as a Conservative. I sent over to him some of our literature, and the only criticism he made of that literature was this, that we were not going as far in our economic and social proposals as some of the younger men with whom he was associated in Great Britain were prepared and were determined to go.


Mr. JACKMAN:: Conservatives.


Thomas Miller Bell: Yes, at present in the Conservative party, it is true. But they will have to leave the Conservative party in Great Britain, as others have had to do, before they are able to make any progress whatsoever; for to-day, I may tell my hon. friend, in my opinion the break-down we are seeing in the British empire is largely the result of blind, Tory policies pursued by reactionary governments of Great Britain.


Some hon. MEMBERS:: Hear, hear.


Richard Burpee Hanson: The
applause is from across the floor; there is the Tory party to-day.

War Appropriation-Mr. Coldwell


Thomas Miller Bell: I did not refer to my hon. friends to the right as Tories. I referred to the Tories of Great Britain. But I am quite convinced of this, that our hon. friends to the right of Mr. Speaker are so close to the wall on the right that it is useless for our Conservative friends who sit to the left of Mr. Speaker to try to get between them and that wall; make no mistake about that.
But we have not yet apprehended aright what is going on. If we apprehend aright, we shall see that in our own country after this war we shall have to follow the world trend, and that world trend will be ever more and more in the direction of greater public control, public ownership-socialization, if you like the 'word better-


John Ritchie MacNicol: Certainly not the way the government is operating its manufacturing plants.


Thomas Miller Bell: I do not think any government can operate a manufacturing plant; no government would ever attempt to do it. But the government of Canada could, as any other government can, hire just the same type of technicians, just the same brain, and they would act with even greater enthusiasm to carry on in the interests of the people rather than in the interests of the exploitation of the people. So I say that that does not frighten me a little bit.
I am very glad that this gift is being made. But let us view it realistically. We are prepared to give this to the British people, and we hope they will get it. We hope the British people will benefit from this, and not a few people in Great Britain. W'e hope that in the making of this gift it will ultimately benefit the people of Canada, too, not a few people in Canada-because otherwise the obligation which this involves may mean that there will be still $1,000 million worth of claims on the labour of the Canadian people for a very long time to come.


Mr. VICTOR QUELCH (Acadia):: Mr. Speaker, in his speech the minister raised a number of interesting points which will no doubt raise many questions in the minds of hon. members. Those questions will have to be left over to the committee stage.
I agree with the hon. member for Rosetown-Biggar (Mr. Coldwell) in his criticism of some of the statements made by the leader of the opposition (Mr. Hanson). It is intolerable to feel that to-day we are fighting for a continuation of conditions such as existed in this country before the war, conditions which apparently the leader of the opposition feels must exist again at the end of this war. We have been told by the Prime Minister (Mr. Mackenzie
TMr. R. B. Hanson.]
King) and by other members of the government that there will be a new social order at the end of the war. But judging from the statements made by the ministers themselves and by the leader of the opposition, it is quite evident they do not really believe there will be any fundamental change in future policies.
At the very outset I wish to say that the members of this group are whole-heartedly behind the government in the proposal to give to Great Britain outright a billion dollars' worth of goods. We feel that this should be regarded merely as a start of a new policy as between allied nations. It involves of course a completely new principle, and I am going to deal with that from two different angles. First I shall discuss the moral, and then the economic side.	'
Speaking first about the moral side, I think we will all agree that to-day there is only one real issue before this and every other one of the Allied Nations, and that is to defeat the enemy wherever he may be found, whether it be in Europe, in Asia, in Australia or in New Zealand. If we do not meet and defeat the enemy in those places we will eventually have to meet and defeat him on the North American continent. It is very important that the people of this country as a whole should meet that fact face to face, and more realistically. Unfortunately many people in this country still think that we can sit back on our doorsteps and wait for the enemy to appear. Let us constantly keep before our minds this allimportant fact, that the battle in Russia to-day is our battle, that the conflict raging in the Dutch East Indies is our conflict, and the same is true of Burma, China, Africa, wherever the enemy may be found. Let us realize this before we have to add America to the list.
I think it is apparent to everyone that the allies should cast every ounce of their strength against the enemy at this time. In order that this may be done it is very necessary that we should mobilize our maximum strength. I do not think we have done it up to the present time. I think I can show shortly that we in this country are a long way from having done that, and the same can be said of every one of our allies, including Britain. We should reduce all non-essential services down to the very minimum. We shall have to foe content to maintain a standard of living just barely sufficient to guarantee that our people can be maintained in a state of health and efficiency.
In my opinion the total available resources of all the allies should be pooled for a united effort under a united command. No matter where the battle may be, no matter in what part of this world we may have to fight, the total resources of all the allies should be avail-

War Appropriation-Mr. Quelch
able to a united command. This united command should be able to throw these total resources into the conflict disregarding completely who owned them before they were turned over. For example, let us assume that the united effort of Great Britain represents eight units; that of Canada four units; that of the United States ten units, and Russia twelve units. I am not suggesting for one moment that these figures represent a true comparison, I am just using them as examples. AH these units should be made available for a common effort against the enemy.
Would the United States be justified in saying that they are only prepared to put into that common pool eight of their units, but would sell the other two to any one of the more pressed nations? Apparently the minister thinks that there might be some justification for that, because he says we are giving a billion dollars to Great Britain and are having to find foreign exchange to buy from the United States. Personally I can see no justification for giving a billion dollars' worth of goods to Great Britain, on the one hand and, on the other hand, having to buy from the United States. This is just as much the war of the United States as it is the war of Canada, of Britain or of Russia. I cannot see any possible excuse for buying, on the one *hand and giving on the other. We should do everything in our power to convince the United States that this is just as much their war as it is ours, and therefore that they should be prepared to give to the common pool instead of lending.
As I was saying, at the present time apparently some people in Canada feel that we should give only one of our units and should lend or sell the rest. Again I say that the same thing that I referred to with regards to U.S.A. applies to Canada. I am reminded of an example which was drawn to my attention. Two men, one large and one small, were standing with their backs to the wall facing the enemy. The large man said to the small man, "I can fight a great deal better than you; I am going to put one of my hands behind my back and fight just with the other so we can put forth an equal effort. However, I will sell you the use of that arm in order that we can put up a better fight." Surely he should realize that unless he uses both arms, he as well as the other man will be licked. It is essential that he use both arms, whether or not he is able to sell them.
There should be no loans or sales as between the allied nations. Furthermore, at the end of the war, when the time comes for rehabilitating the devastated areas of the allies, that work should be done on the same basis, without loans or debts. If at the present time
better use can be made of our tanks in Great Britain, then those tanks should be given to Great Britain. If at the present time better use can be made of our tanks in Russia, then those tanks should be given to Russia. In order that such a proposal may be carried out in an equitable way it is essential that eveiy one of these nations should maintain their production at its maximum level and reduce non-essential services and be satisfied with a moderate standard of living. It would not be fair for one nation to say that it is going to have "business as usual" while the other nations cut down their expenditures to the very minimum. There must be an equality of sacrifice to the greatest degree possible.
Are we in Canada maintaining our production at the present time at its maximum level? I shall take one of the primary industries, that of agriculture. I know enough about agriculture to know that our production can be extended tremendously in many lines, such as poultry, hogs, honey, cheese, and so on. This can be done if the people are assured that they will get a price equal to the cost of production, and if the necessary organization is put into operation to produce this result. Unfortunately in this country to-day we are still thinking in terms of jobs instead of maximum production. Instead of organizing our production to its maximum, in order to provide jobs for people we are willing to allow certain non-essential services to continue. I have an important example of this before me which I should like to give to the house. I have before me a copy of the Financial Post of February 21. I should like to quote from page 17 to show how far some people are from understanding the real problem that faces this country. I quote:
Gold Fights for Canada
Canada's story is typical of that of other united nations. For Canada, gold provides:
1.	Foreign exchange-about $205 millions in 1941, equal to one-fourth of all the U.S. dollars provided by Canadian exports in that year, one-ninth of all Canada's exports.
I shall take one section of this at a time. If the United States were willing to let us have goods on the same basis as that on which we are giving them to England, it would not be necessary to export gold to the United States. That gold does not help the war effort of the United States in one single degree. If the United States are really interested in winning this war, would it not be better for them to say that they do not need this gold, that we should put our 32,000 miners, most of them skilled labourers, to work in war industries in order to expand our war effort? Paragraph 2 reads:

War Appropriation-Mr. Quelch
2. Taxes on approximately $60 millions of wages and salaries; on the $21 millions of supplies purchased; on the $94 millions left for direct taxes on mining profits, depreciation and dividends; on the personal income gained from roughly $50 millions paid in dividends by purely gold mining companies.
If those same men were put to work in war industries, would not the government be getting taxation from those war industries? Taxation derived from gold mining is no more valuable to the government than the same amount of taxation derived from war industries.
Paragraph 3 is the funniest part of it all. I cannot imagine that any person would be guilty at a time like this of making such a foolish statement. It reads:
3.	A living-for 32,000 miners, their families and the communities built up to serve them. Rough estimate of the total number supported by the gold mines has been placed at over
200,000	Canadians.
This publication contends that we should continue gold mining in order to provide jobs for 32,000 men; yet we are told in this house day after day that our production has reached its maximum capacity because we have not the skilled labour available. These men are mostly skilled machinists and miners; they are the type of men that are needed greatly to-day in our war effort. But apparently those with the gold mentality would rather go on mining gold, would rather keep these men working at some non-essential service that might handicap our war effort. I defy the minister or any one in this house to show me how these men are helping the united war effort of the allies in any degree whatsoever. If you leave the United States out of the war, yes, that might make it necessary for us to buy from them with gold. But with the United States in the war, you cannot say that gold helps in the slightest degree.
Paragraph 4 deals with morale. It says:
Gold production maintains the morale of the civilians.
To what extent would the morale of the people of this country be hurt if we stopped producing gold? On the contrary it would be raised considerably, because the people would realize that the government was waking up and at last cutting down on non-essential services. But the Financial Post says that gold production builds up the morale of the people.	Yes-the people who are getting
dividends from the gold mines. That is all that the Financial Post worries about

the shareholders. It goes on to say :
Many of those serving the miners could not find other jobs and would become reliefees instead of taxpayers if it were not for the steady production of the gold mines.

If these men were put into war industry they would not be out of work or -on relief. But is the government really interested in planning war production at this time? Do the words of the Minister of Munitions and Supply (Mr. Howe) and of the Minister of Labour (Mr. Mitchell) mean nothing when they say that we are short of skilled labour? One wyould almost be led to believe so.
I want to refer briefly to a statement made by the hon. member for Cochrane (Mr. Bradette). I am sure -lie was perfectly sincere in what he said and I am not going to attack him on that basis. But I would point out that some of his arguments were not very sound. What he said was spoken in another debate during the present session and I cannot read it, but I shall briefly summarize some of his points. He asks us not to allow 65,000 people to be thrown out of employment by stopping the production of gold. I do not know where he got that 65,000. I thought it was around 60,000, but I wrote to the bureau of statistics and they assured me that the total number of men in all classes of the gold mining industry would not number more than between 32,000 and 33,000, with the exception of prospectors. But we w-ill use the hon. member's own figure of 65,000, because he -may include in that number the men who are providing food for the -miners. He said that he was not discussing the gold standard. He did not want to get into that argument. But what possible justification- can there be for supporting the production of gold unless at the same time you are prepared to support the gold standard? He urged that these men at work in the gold mines be not thrown out of work but be put on essential services. We are not urging that they be thrown out of work. There would be no sense in that. We are asking that the production of gold be stopped to release these men for essential services. The hon. -member for Cochrane seems to -think that we want to throw them out of work.
He also contended that if men should be kept on farms when there is a surplus of wheat, surely, therefore, gold mining should not be discontinued. He seemed to think we were inconsistent in wanting to keep men on the farms producing wheat not needed now, and at the same time condemning the gold mining industry. There again I point out that the number of men required to produce wheat is comparatively small. The part of agriculture that requires -the greatest proportion of labour is not the raising of wheat, but live stock and dairying, the products of which are very much needed to-day. One man may be running a one-section grain farm,

War Appropriation-Mr. Quelch
with an additional man to help at the harvest. My boy has been running a one and a quarter section farm, running the combine and engine himself, and the only help he has is a man to haul the grain away.


Paul Joseph James Martin: He is doing better than his dad.


Victor Quelch: He has better machinery than I had. On the other hand, just as soon as he started to go into live stock he had to have additional help. It is that which takes men for the farm. In the days of the old threshing machine we needed a lot of labour. It required ten men on a threshing gang. But to-day one man can handle what took ten men before the advent of modern machinery. Of course some members may say: If that is so, it cannot cost much to raise wheat. I do not want to leave that impression. It costs a great deal of money to buy that type of machinery, and the depreciation on it is very heavy indeed. That is where the money goes, to machinery companies, instead of to labour.
Another point. Even if the wheat is not urgently required, and I admit that it is not urgently required to-day, we realize that it is necessary to build up great reserves of wheat for the future. But even if it were not urgently required, that wheat at least is not harmful to anyone. No one would suggest that. On the other hand, large accumulations of gold are harmful because they give rise to an ever-growing demand on the part of certain people in high places that the country should go back to the gold standard. It would be a bold man who would say that the gold standard has not done tremendous harm to nations in the past.
I noticed a statement in a paper recently that gave me a great deal of concern. I raised the matter in the house this session, at page 60 of Hansard, as follows:
On January 21, 1942, there appeared in the Edmonton Journal an account of the scheme to be submitted to the Rio conference. Section 2 of the proposal, as outlined in the article reads:
"Creation of a free international exchange currency to facilitate flow of goods and prevent delay in transactions. It would be on a gold basis and in addition to the American nations, Great Britain, China, the Netherlands, India and all British dominions would enter into the agreement. A pool of allied gold holdings would be created. The Latin American countries would agree to peg their national currencies into the free international exchange currency."
I asked the Prime Minister whether or not Canada had any commitments, and he said that Canada had not any commitments, and that there has not been any correspondence on this matter. He did not state whether there
had been any discussions. I am satisfied that there have been discussions; there cannot be any doubt about that. I cannot believe that a statement such as the one I have just read would be submitted to the conference unless there was some foundation for it, and the statement says definitely, "Great Britain and all British dominions." Would that statement be made without any foundation? So that while the Prime Minister's statement that there has been no correspondence may be correct, I maintain that undoubtedly there have been discussions, if not on the part of the Prime Minister himself, at least by men in official positions. I shall refer to one of these gentlemen. I have here a copy of National Money News, published by the League for Economic Democracy. In its issue of January 15 at page 3, this item appears:
Doctor James going to Britain to discuss post-war plans.
Ottawa, January 13 (CP).-Doctor F. Cyril James, principal and vice-chancellor of McGill University, will go to Britain shortly to consult United Kingdom authorities on post-war reconstruction, officials at the Department of Pensions and National Health said to-day. Doctor James is chairman of the seven-man committee on reconstruction which acts as advisory committee to the federal cabinet.
Undoubtedly Doctor James has a definite official position in connection with post-war reconstruction. The dispatch goes on to quote from a statement that appeared in the Toronto Daily Star, which I have taken pains to verify, and here is the statement from the Toronto Daily Star of September 17, 1940:
That was an interesting speech to the American bar association at - Philadelphia by Doctor F. Cyril James, principal of McGill. The gold question, he declared, must be considered as a problem of social and political philosophy rather than one of pure monetary theory. If you believe in national isolation and autarchy, he said, the present gold policy of the United States is perhaps the most stupendous piece of folly in history. But if you believe in democratic capitalism and some kind of world economic order, it may be regarded as the most constructive contribution now being made, in any part of the world, to the future welfare of the United States and all mankind.
Doctor James used to be professor of finance at the Wharton school of finance and commerce at the university of Pennsylvania and is therefore an authority. He declared that the United States gold holdings-
This is the interesting point.
-now exceeding $21,000,000,000, were at stake in the war-
In other words, we are fighting to maintain the value of the $21,000,000,000 of gold holdings in the United States.



War Appropriation-Mr. Quelch
*-and that their value would depend on who won. A British victory meant continuance of gold as the monetary medium-
Mind you, this man, I take it, is speaking on behalf of the government. He is chairman of this seven-man committee. Otherwise he is talking out of turn.
-whereas a German victor}', as Doctor Funk himself recently made bluntly clear, would mean the setting up of regional autarchies in which gold would be useless except for economic decoration. Another definite reason, if any were required, for Canadians doing their utmost, in war loans and everything else, for the defeat of Germany! One of our greatest industries is gold mining and, to protect our economic order as well as our country and our homes, victory must be assured.
The whole speech is in defence of gold. He is chairman of this committee on post-war reconstruction. Therefore I do not doubt for one minute that there have been discussions. Maybe he is responsible for the statement made at the Rio conference.


Mr. DOUGLAS (Weyburn):: It is reconstruction on a gold basis.


Victor Quelch: Yes, it is reconstruction on a gold basis. I do not think there is any doubt of that. Anyone who reads the Financial Post to-day knows that they are continually harping on the fact that we shall be back to the gold standard after the war.


Ian Alistair Mackenzie: Oh, no.


Victor Quelch: The minister may shake
his head, but Doctor James is of the very definite opinion that that is the thing we are fighting for to-day.


Ian Alistair Mackenzie: I can tell the hon. member that Doctor James is not running the policies of this government.


Victor Quelch: But he is chairman of the seven-man committee, acting in an advisory capacity to the government. It says so here. I suggest that it is high time the government got new advisers if they do not approve his advice. Why keep a man to advise you if you do not agree with his advice?


Richard Burpee Hanson: It may be window-dressing on the part of the government.


Victor Quelch: If so, it is a very objectionable type of window-dressing, and not the kind of thing which is going to create the morale so necessary to the people of this country, or instil the will to victory.


An hon. MEMBER:: It is time to clean house.


Victor Quelch: Most definitely so.


Paul Joseph James Martin: He represents one point of view on a committee which includes many points of view.


Thomas Clement (Tommy) Douglas: But all representing the government point of view.


Victor Quelch: I hope his point of view is only his own, but if the government have one man on the committee who represents that viewpoint, there is every reason to suppose that there are also others of the same opinion.


An hon. MEMBER:: The government
cannot control a man's speeches.


Victor Quelch: If he, the chairman, was appointed by the dominion government, I think the government should have some control. A statement of that kind will be detrimental to the war effort. If the people get the idea that they are fighting to maintain our gold reserves and the interests of shareholders in gold mines, it is not going to have any good effect.


Paul Joseph James Martin: Let us call it a McGill university indiscretion.


Victor Quelch: That is a very mild term.
There are many non-essential services, but I think this is the most glaring example of one which can be done away with without causing privation to anybody. Until we are rid of this kind of service I believe our war effort will fall far short of what it should be.
Another business which is in the same category is the liquor traffic. Does any one believe to-day that we could not very well ration liquor?


John Ritchie MacNicol: It depends on the man's capacity.


Victor Quelch: Would the hon. member suggest that if we rationed it, he would be any worse off physically than when he is allowed to drink an unlimited amount?


John Ritchie MacNicol: I do not drink. I am a teetotaller.


Victor Quelch: I would suggest, joking apart, it would not hurt anyone for the duration of the war to be limited to, say a bottle of whisky a year.


An hon. MEMBER:: A week!


An hon. MEMBER:: A day!


Victor Quelch: I understand some member to say that in British Columbia it has been reduced to one bottle a day. Perhaps the Minister of Pensions and National Health (Mr. Mackenzie) can give us some information in that regard.

Questions


Mr. DEPUTY SPEAKER:: Order.


Victor Quelch: I do not want anyone to say that I advocate that the rum issue to the troops should be done away with. I do not suggest that for a moment. When men undergo what they have to undergo, a drop of rum makes a very great difference, at a time such as stand-to in the morning. But I do not believe that people in civil life need to be able to buy bottle after bottle week in and week out, and if their supply were curtailed severely it would mean not only a saving of labour but, I believe, an increase in efficiency. Last week-end I was in Montreal, and although I was there only one night I saw three brawls in the streets. They were caused by drunks, and when the policemen came up they just sat in their car and watched the fight. I am not casting any aspersions at Montreal; I do not doubt that similar scenes are taking place in many other cities.
We not only let down our allies but are false to ourselves when we do not put forward the maximum effort of which we are capable.
On motion of Mr. Quelch the debate was adj ourned.


[Stage Direction]
At six o'clock the house adjourned, without question put, pursuant to standing order.
Thursday, March 19, 1942