1943-06-14

Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, on June 8,
I stated, in reply to a question by the leader of the opposition (Mr. Graydon), that I would table the report of the united and associated nations conference on food and agriculture as soon as it was available, and that, at the same time, I would make a brief general statement on the work of the conference and the programme for future action. I now table the report as approved on June 3, under the designation: Final Act.
The food conference was held at Hot Springs, Virginia. Its sessions opened on May 18, and were concluded on June 3. It was the first general conference of the united nations. That in itself gives the conference an historic significance. While the conference met in time of war, it was not concerned with the prosecution of the war. It had to do with one of the problems which demand solution if, after the termination of hostilities, the world is to enjoy enduring peace. Its purpose was to assist in freeing the peoples of the world from want, once the axis powers have been defeated. The conference was an act of faith in the continuing solidarity of the united nations.
The fact that the subject matter of the conference was food and agriculture is evidence of a determination to make a fundamental approach to the solution of post-war problems. No subject could have been more suitable for exploration. The production of food is the most important of man's economic activities. Its absorbs the energies of more men and women than all other economic pursuits combined.
A consideration of the problems falls naturally into three parts: the objectives in quantity and quality tn be set in the consumption of food; the production of foodstuffs to meet consumption needs; the better distribution of the produce of agriculture and of fisheries.
The conference recognized that there had never been enough food produced in the world to maintain the health of all its peoples. The development of the science of nutrition has added greatly to the knowledge of the kinds of food needed to maintain health and efficiency. The nutrition experts who were gathered at the conference set the goals for the achievement of better standards of health, and indicated various measures which might be taken to that end, particularly the provisions of protective and other nutritionally desirable foods. The problem to be faced was stated by the conference to be that of ensuring the production of the necessary food and having it made available to the consumer. The primary emphasis in all the studies made by

Food Conference
the nutrition experts, and the basic conclusion of the conference itself was that the production of food must be increased if freedom from want is to be achieved.
The conference gave attention to methods of increasing the supiply of food by such means as raising the efficiency of production, the employment of additional land and labour, the conservation of resources,, and the advantages to be derived, in certain cases, from international specialization.
The largest market for the produce of agriculture lies amongst the tillers of the soil. Producers of food are also important consumers of other goods as well as of their own produce. It was recognized by the conference that the general welfare would be promoted by ensuring to the producers of food a reasonable return for their labour. The conference therefore considered special measures to increase the purchasing power of agriculturists generally, and, particularly, the purchasing power of the less advanced and less favoured peoples.
A second main conclusion of the conference was that the expansion of agricultural production must be part of the expansion of the whole world economy. It was recognized that if markets are to be opened for an expanded food production, and if people are to be able to buy the food which they need, poverty must be made to disappear. The increasing of industrial production, the provision of full employment, the prevention of exploitation, the development of social legislation, the orderly management of currencies and investments, the fostering of international trade through the reduction of trade barriers, were seen to be problems to be considered if the purposes of the conference on food and agriculture were to be realized. These studies lay outside the scope of the conference and call for separate consideration, which some of them are already receiving.
The conference was primarily concerned with agriculture, but it did not overlook the value, as foodstuffs, of fish and marine products. It recognized the importance of fish in the economy of many countries. It recommended that the general conclusions which it had reached, wherever appropriate, should apply to fish and marine products.
In its deliberations, the conference had to take account of the special world conditions under which it was meeting. There were two questions of great importance which did not come within its terms of reference. The first concerns the production of food and its distribution in wartime, which is a task for

agencies already in existence. The second is the question of relief, on an international scale, which is to be the subject of a conference at an early date.
The conference's study of the problems of food and agriculture was partly concerned with the intermediate period between the present, and the time when the long-term goals of the conference could be actively pursued and achieved.
Countries which are free from the tyranny of the invader are already able to take steps towards the attainment of the goals set at the conference. As other countries are liberated, they, too, can strive towards these goals. The immediate aim must be the abolition of hunger as a first step towards freedom from want. During the transition period which will follow the cessation of hostilities in particular areas, measures will have to be taken to meet the special circumstances caused by the war. Long-term goals will have to be kept firmly in mind so that temporary expedients will not result in permanent maladjustments.
Throughout its deliberations, the conference recognized the primary responsibility of each nation to ensure that its own people are fully employed, and that they have the means of procuring the food needed for a healthy life. The conference also agreed that only through active cooperation with other nations can the fullest prosperity of each nation be secured.
The final act of the conference, the result of its deliberations, comprises a declaration and some thirty resolutions. In the first resolution, the conference recommends that all nations represented should set out in a formal declaration their individual obligation to their own people, and to one another, to collaborate in raising the levels of nutrition and standards of living of their peoples, and in improving the efficient production and distribution of agricultural products. It also recommends that they report to one another on the progress achieved. Other resolutions contain statements of principles and recommendations of policy for the short-term and the long-term period. The resolutions also dealt with the opening up of undeveloped areas suitable for settlement and food production, the fostering of desirable changes in the pattern of production designed to give greater emphasis to protective foods; the provision of agricultural credit; the advancement of cooperative societies, and the improvement of marketing facilities. I need scarcely assure the house that all these recommendations will receive detailed study by the government.
To facilitate collaboration among nations in this field of endeavour, the conference

Agriculture Committee Report
recommended that a permanent international organization on food and agriculture be established. It suggested that each government represented at the conference appoint a representative to an interim commission, the duty of which would be to carry out the recommendations of the conference and to prepare a specific plan for a permanent international organization on food and agriculture. The conference invited the President of the United States of America to arrange for the establishment of this interim commission, and for the calling of an early meeting.
In recommending the functions of the proposed permanent organization, the conference followed closely the comprehensive agenda which had been fixed for its own deliberations. It also urged the interim commission to give consideration to the question of providing for membership in the permanent organization of countries not represented at the conference. It recommended as well the association of the permanent organization with other institutions, which already exist, or which may be set up later, in the field of food and agriculture, and in related scientific, economic and other fields.
President Roosevelt in his speech to the delegates on Monday last, described the conference as "epoch making". He willingly accepted the recommendation that, as President of the United States, he should call together the proposed interim commission.
The president associated himself with the declaration of the conference that every nation should assume the responsibility, in collaboration with others, of providing adequate food for its own people. I am prepared to make at once a similar declaration on behalf of Canada.
In conclusion, I should like to mention among other of the promising results of the first united nations conference, the friendly spirit which inspired its deliberations, the earnestness with which the delegates worked together toward worthy ends, and the unanimity with which their decisions were reached. .
Mr. Speaker, I should ask that copies of the Final Act be provided to members of the house, and would move, seconded by Mr. Crerar:
That 700 copies in English and 300 copies in French of the Final Act of the united nations conference on food and agriculture, laid on the table this day, be printed forthwith, and that standing order 64 in relation thereto be suspended.
At first glance, it would seem that seven hundred copies in English and three hundred in French of the Final Act may not be as large a number as would be desired. I am informed however that something in the nature of an abridged popular statement which will serve all immediate purposes will shortly be available, and I think this would be a sufficient number, therefore, of copies of the Final Act in its formal shape to be obtained.


Mr. GORDON GRAYDON (Leader of the Opposition):: In the statement he has just made, the Prime Minister speaks of a projected conference with respect to relief, which I take it is relief of the stricken countries that have been victims of the axis aggression, and has nothing to do with domestic relief,-of which, I hope, we have seen the last in our time. Would the Prime Minister inform the house whether this conference on relief will be separate from the meetings of the interim commission of which he spoke, and which will be headed by the President of the United States?


William Lyon Mackenzie King: Yes, it will be
separate.


[Stage Direction]
Motion agreed to.


Mr. W. G. WEIR (Macdonald) moved:: That the second report of standing committee on agriculture and colonization, presented to the house on Friday, June 11, 1943, be now concurred in.
Mr. MARK C. SENN (Haldimand): Before this motion passes I should like to raise one question which was raised in the committee. This report provides for the calling, in order to get information, of certain boards which have to do with the Department of Agriculture and foodstuffs generally, and there was some question in the committee as to whether, if these matters were referred to the committee on agriculture, it would preclude any examination or discussion of the estimates of the Minister of Agriculture, either civil or under the war appropriation bill. I am perfectly satisfied and in fact glad to have this matter referred to the committee if it does not preclude such discussion. On the other hand it would be too bad if the minister's estimates were not to be discussed until this matter was finally disposed of by the committee.
Questions


Hon. J. G. GARDINER (Minister of Agriculture):: As I understand the recommendations of the committee,, they are that certain boards which deal with the expenditure of money having to do with the marketing of products during the war period are to be called before the committee, and my understanding is that this will not interfere in any way with the discussion of the estimates here in the house.


[Stage Direction]
Motion agreed to.


[Stage Direction]
Mr. THOMAS REID (New Westminster) moved the first reading of Bill No. 109 (from the senate) to incorporate Bethel Full Gospel Assembly.
Gordon Graydon: I would ask the hon. member to give a full explanation of this bill.


Mr. REID:: I should be glad to give a full explanation if we had time, but probably that would take all afternoon. I shall give a short resume, however, of what it means, and perhaps that will suffice until the bill comes before the committee. Those asking for the incorporation of the church have their headquarters in Vancouver. They are part of a sect whose headquarters are located in the state of Tennessee, which state is well known to all hon. members of this house. They have been in existence for some forty years. Their teachings are those of the new testament; their beliefs are similar to those of the Baptists. They desire incorporation in order to administer the affairs of the church, including real property. Their object is the dissemination of the gospel in all languages, the ordination of ministers and missionaries, the establishment of schools; and as a Presbyterian I am pleased to help the church along.
Motion agreed to and bill read the first time.



QUESTIONS

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

Mr. BENCE:: 1.	How much money has been spent by the government on alterations, and/or additions to the Saskatchewan Motors Company building in the city of Regina, which has been rented for the purposes of the Department of Agriculture?
2.	Does the government supply its own fuel and janitor services for the said building?


Mr. FOURNIER (Hull):: 
Mr. REID:: 1.	What department of government is responsible for the recommendations made to His Majesty the King, of those who are deemed worthy of recognition in the king's birthday honour list?
2.	From what department, or from whom is advice obtained for the names submitted to the government ?


William Lyon Mackenzie King: The conferring of awards and decorations by His Majesty the King is an exercise of the royal prerogative. In respect to the exercise of, this prerogative in relation to Canadians, His Majesty's Canadian government accept full constitutional responsibility. The responsibility of making recommendations in respect to such matters is not a responsibility which His Majesty's Canadian government delegates to any department of government.


MOBILIZATION ACT-REJECTIONS ON MEDICAL GROUNDS
Mr. DIEFENBAKER:: How many men, by military districts, heretofore rejected on medical grounds, have been reexamined since the 31st of October, 1942, and of these, how many have been called for service under the National Resources Mobilization Act?


Mr. MITCHELL:: Part 1	[DOT]Re-examined	
	Men	By
	Found	Medical
	Unfit by	Revision
Administrative	Private	Board andDivisions	Physician	Found Fit"A" London, Ont. ...	3,744	1.471"B" Toronto, Ont. ..	9,000	4,212"C" Kingston, Ont. .	5,891	2,179"D" Port Arthur, Ont.	302	176"E" Montreal, P.Q. .	12,661	5,906"F" Quebec, P.Q. ...	6,787	2,235"G" Halifax, N.S. ..	987	453"H" Saint John, N.B.	683	285"I" Charlottetown,	P.E.I	160	51"J" Winnipeg, Man.	808	544"K" Vancouver, B.C.	2,325	1,074"M" Regina, Sask. ..	134	54"N" Edmonton, Alta.	1,057	542Total 	44,539	19,182
Questions as Orders for Returns
* In the re-examinations conducted by the medical revision board 5,676 men, previously found fit by the private physicians, were reexamined owing to doubt regarding previous medical category. Some of these were found fit but these cases are not segregated for statistical purposes.
Part 2
19,182 men-as shown above, were called for service under the National Resources Mobilization Act with the exception of those who were granted postponements or whose cases are pending.


WARTIME HOUSING LIMITED
Mr. NICHOLSON:: 1.	What salary was paid to Victor T. Goggin when he was first appointed general manager of Wartime Housing Limited?
2.	Was his salary increased to $12,000 a year?
If so, when?
3.	What is the total amount he has been paid for salary and expenses since his appointment?


Mr. CHEVRIER:: 1. $10,000.
2.	Yes-July 1, 1942.
3.	Salary, $24,047.80; expenses, $7,058.64.


MAGNESIUM-WILDMAN PROCESS
Mr. KNOWLES:: 1.	Have reports been made to the government concerning the Wildman process for the production of magnesium? If so, what department is in possession of these reports?
2.	What companies in Canada are engaged in the production of magnesium?
3.	Does the government own and/or control any plants engaged in the production of magnesium?
4.	Has the government, since the outbreak of the present war, given any capital assistance to any companies engaged in the production of magnesium?
5.	Who owns the Magnesium Company of Canada, Limited?


Mr. CHEVRIER:: 1.	(a) Yes. (b) The Departments of Mines and Resources and Munitions and Supply.
2.	Dominion Magnesium Company, Limited.
3.	Yes.
4.	No.
Note-The government owns the magnesium plant at Haley, Ontario, which was built and is operated by the Dominion Magnesium Company, Limited, without fee or profit.
5.	The department has no knowledge or record of the Magnesium Company of Canada.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. REID:: 1.	Has a price ceiling been placed on vegetables by the wartime prices and trade board?
2.	If so, on what date, and upon what vegetables ?
3.	What ceiling price has been fixed on each kind or variety of vegetables?
4.	Is the ceiling price the same throughout Canada?
5.	If not, what are the ceiling prices on each variety of vegetables in the different districts or provinces?


Mr. ILSLEY:: Return tabled.


ST. LAWRENCE RIVER NAVIGATION
Mr. LACOMBE:: 1.	Has the government taken the necessary steps for the protection of convoys on the St. Lawrence river?
2.	Of the total number of vessels operating in the St. Lawrence river during the last navigation season, what percentage in tonnage was sunk?
3.	What was the average number, per week or month, of naval vessels which came up the St. Lawrence river last season?
4.	What was the average number during the years 1939, 1940, 1941, and 1942?
5.	Have the Canadian Pacific and the Canadian National Railways benefited greatly in their transportation as a result of the limitations of navigation on the St. Lawrence river?
6.	If so, what has been the net revenue of each of these companies during the years 1939, 1940, 1941, 1942, and 1943?


LOANS TO CANADIAN PACIFIC RAILWAY COMPANY
Mr. SHAW:: 1.	Have any loans been made to the Canadian Pacific Railway Company by the Canadian government during the past twenty years?
2.	Upon what dates were such loans made, and at what rates of interest?
3.	Upon what dates were interest and principal payments made by the said railway company to the Canadian government? What was the actual amount of each such payment?
4.	What is the total amount of, (a) principal; (b) interest, which the Canadian Pacific Railway Company owes to the Canadian government at the present date?


UNEMPLOYMENT INSURANCE COMMISSION- BRITISH COLUMBIA OFFICES
Mr. BLACKMORE:: 1.	How many of the persons appointed to the seventeen permanent positions filled by the civil

Questions as Orders for Returns
service commission in the British Columbia offices of the unemployment insurance commission, were born in British Columbia?
2.	What was the birthplace of each of the others?
3.	How many of the aforementioned seventeen were transferred from eastern Canada to British Columbia to fill those seventeen positions?
4.	Did the federal government treasury pay the cost of their transportation to British Columbia? If so, what was the total cost of transferring each of them and their effects?
5.	Why were the positions not given to the people in whose province the offices were to operate, and why was it necessary to transfer any from the east to fill positions in British Columbia?
6.	What is the name and salary of the director or acting director of information and publicity, unemployment insurance commission; what are his duties, and how many of a staff are unde, his jurisdiction?



WARTIME HOUSING LIMITED-HULL, QUE.

Mr. NICHOLSON:: In connection with war-time houses in Hull, Quebec.
1.	When was the contract for the first 100 houses let?
2.	When were these houses to be completed according to the contract?
3.	On what date was the first of the houses occupied by a tenant?
4.	On what date were all of the first 100 occupied?
5.	What was the cost per unit for construction and painting?
6.	WThat was the cost per unit for services?
7.	What was the cost per unit for each of the additional fifty houses for construction and painting?
8.	What was the cost for services per unit?
9.	What was the total capital cost for constructing the 150 houses, providing all the streets, sewers, landscaping, and administrative costs?
10.	1111131 is the total amount spent on repairs since the houses have been completed?
11.	How many coal and wood sheds have been built in connection with the Hull development?
12.	How- many feet of lumber are there in each shed?
13.	What was the average cost per shed?



MR. JUSTICE MCTAGUE-PAYMENTS FOR SALARY AND EXPENSES

Mr. NOSEWORTHY:: What salary and what expenses is Justice McTague receiving at the present time, (a) as a judge; (b) as chairman of the war labour board; (c) as chairman of the wartime depreciation board; (d) as serving in any other capacity as a government official?



NATIONAL STEEL CAR CORPORATION- MALTON PLANT

Mr. NOSEWORTHY:: 1.	What was the total amount paid by the government of Canada, and/or the British government, for the production of airplanes, parts, and other war equipment, at the Malton plant of the National Steel Car prior to expropriation?
2.	What was the total amount due to the company on account of production at the time of expropriation?
3.	What w-as the total number of planes of all types built or assembled at the plant before expropriation?
4.	What was the number of each type built or assembled at the plant before expropriation?
5.	What was the amount paid the company by the government following expropriation for, (a) land; (b) waterworks system; (c) buildings; (d) machinery and equipment; (e) accounts receivable; (f) inventories of raw materials; (g) w-orks in process; (h) finished parts and machines of all kinds; (i) sundry assets [give break-down); (j) claims for fees or profits on work performed or in process?
6.	What is the amount collected by the government to date on accounts receivable taken over from the company?



MOTIONS FOR PAPERS


Mr. STOKES:: For a copy of all letters, telegrams, and other communications, which passed between Goldwin Smith, formerly assistant to C. F. Needham, assistant director civilian, national selective service, and the Minister of Labour, deputy minister of labour, or any official of the department, relating to his resignation or transfer to another department of government.



FALCONBRIDGE NICKEL COMPANY-NORWAY REFINERY

Mr. COLD WELL:: For a copy of all communications between J. Gordon Hardy, president of the Falconbridge Nickel Company, and the Prime Minister or any department of government, concerning Mr. Hardy's statement, as president of the company, and relating to the company's Norwegian plant, made in Toronto on April 21, 1943.



INTERNMENTS-CAMILLIEN HOUDE

Mr. ROY (for Mr. Lacombe):: For a copy of all letters, telegrams, correspondence, memoranda, evidence, reports and other documents in the possession of the Department of Justice, concerning the appeal of Mr. Camillien Houde, heard on the 28th May, 1943, by an advisory board at Fredericton.
Mr. ST. LAURENT: Mr. Speaker, the hon. member is not in his seat, and as I feel it necessary to oppose this motion I would ask that it stand until he is present.
Motion stands.
fMr. Blackmore.]

Labour Conditions



NATIONAL WAR FINANCE COMMITTEE MEETINGS

Joseph Sasseville Roy: For a copy of the minutes and report of the meetings of the national finance Committee, which took place in Ottawa on December 9, 1936, and the following days, under the chairmanship of the Minister of Finance.


James Lorimer Ilsley: Mr. Speaker, exactly the same observations apply to this motion.
Motion stands.



INNISFAIL, ALTA., RURAL MAIL ROUTE NO. 3

Mr. SHAW:: For a copy of all letters, telegrams and other documents passing between the Post Office Department and any official thereof, and any individual or group of individuals, since October 1, 1942, relating to the mail delivery service in connection with rural route No. 3, Innisfail, Alberta.



ST. JAMES-WINNIPEG AIRPORT COMMISSION- STEVENSON FIELD-RAILWAY EXTENSION

Mr. KNOWLES:: For a copy of all representations made to the government by the St. James-Winnipeg airport commission, as indicated in sessional paper No. 382, of June 8, 1943; also for a copy of all replies made by the government, or any department or branch thereof, to the above representations; also for a copy of all communications, documents and memoranda in the possession of the government, or any department or branch thereof, relating to the question of rerouting the Souris branch of the Canadian Pacific Railway in order to permit a northward extension of Stevenson field, at Winnipeg.


Mr. RALSTON:: Mr. Speaker, if this order is passed I should like it understood that it is subject to reservation as to documents in the nature of confidential reports made by departmental officers to the heads of branches.



MILITARY SERVICE-POSTPONEMENTS FOR FARMERS

Joseph Sasseville Roy: For a copy of all correspondence, telegrams, and other documents, dated during the twelvemonth period to June 10, 1943, in possession of the government, regarding the postponement from military service of those engaged in the farm industry.


Humphrey Mitchell: In connection with this motion I would point out that there are thousands upon thousands of letters involved, and that it means going into all the different departments looking for letters Which in any way deal with the subject matter referred to. It would be almost a physical impossibility to complete this return, and I suggest that it be dropped from the order paper.


Mr. SPEAKER:: The hon. member is not in his seat; shall we say it stands?
Motion stands.



MILITARY SERVICE-PERMANENT LEAVE FOR FARMERS

Joseph Sasseville Roy: For a copy of all correspondence, telegrams, memoranda, and other documents exchanged, from June 21, 1940, to the present date, between the premier of the province of Quebec, and the ministers of the federal government, asking for the permanent leave of farmers, farmers' sons and farm employees from army service.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Gordon Graydon: Mr. Speaker, will the Minister of Labour kindly amplify his statement made last night with respect to the proposed movement of 1,000 farm workers from the prairies to Ontario for temporary farm wTork this summer, and explain particularly why such workers will be obliged to bear any part of their transportation costs?


Humphrey Mitchell: Mr. Speaker; owing to the
advance in farm work in Saskatchewan it has been possible to make an arrangement whereby workers will be brought east to [DOT] Ontario to help out during an urgent period. They will be assigned to farms mainly in central and southwestern Ontario.
To begin with the movement will be of about 500 men and the maximum transfer will be 1,000 men. The dominion government will pay transportation costs easterly but will require workers to pay a small amount of the return trip westerly.
It is expected these western men will stay in Ontario about two months, but certainly they will be back on the prairies in time for the western harvest. No man will be recruited in the west whose absence would interfere with farm production there. I hope we shall have completed arrangements for this transfer of farm labour within the next ten days as the help is needed in Ontario now.
W. W. Dawson, supervisor of farm labour requirements for Saskatchewan and director of the dominion-provincial farm labour programme for that province, has advised

Labour Conditions
that because of the good work of "win the war" municipal committees there actually will be men to spare from Saskatchewan farms from now until harvest time. On May 28 he wrote a report to one of my officials, and I quote this paragraph:
You will certainly hear from us if we get stuck for help, but in the meantime I think it is safe to say that we have the farm labour problem under control in the province, and it is my expectation that within te,n days we will have more men than we know what to do with.


Gordon Graydon: In the slack season?


Humphrey Mitchell: Yes, that is obvious.


Thomas Miller Bell: Who says that?


Humphrey Mitchell: Dawson. I read that passage because it has a western tinge to it.


Mr. COLDWELL:: I do not know what it means.


Humphrey Mitchell: I will say it is the way practical people deal with a practical problem. Put it that way.
It is for this reason that we are seeking men from Saskatchewan. On Saturday afternoon an official of the labour department called the minister of agriculture of Manitoba by telephone in order to advise him of the plan for bringing some men east from Saskatchewan. The Minister of Agriculture was out of the city but the whole matter was placed before the deputy minister of agriculture, Mr. J. H. Evans. Mr. Evans said that the matter would be fully discussed at a special meeting of the dominion-provincial committee on farm labour to see what possibility there might be to participate in the plan so far as Manitoba is concerned. This meeting will be held to-morrow morning, June 15, and Mr. Evans will advise us immediately as to the conclusions of that meeting.
The deputy minister of agriculture for Alberta, Mr. O. 8. Longman, who is also chairman of the dominion-provincial committee on farm labour, has been advised of the plan. Because of the distance of Alberta from Ontario no specific request has been made for sending Alberta farmers east. It was however pointed out to Mr. Longman that word has been received from British Columbia of a very serious shortage of help to put up hay in the interior. If there were some men from Alberta who might be spared for five or six weeks between now and harvest time, Mr. Longman was asked to consider the possibility of organizing some movement into this area of British Columbia.
With reference to the particular point raised by the leader of the opposition (Mr. 
Graydon) we decided to require part payment of transportation costs in order to ensure the bona fides -of the men wishing to come east. Our experience in the past has been that when free transportation is offered there are some who simply go along for the trip and make themselves scarce on arrival. The requirement that part of the transportation be paid is an undertaking each man will sign before he leaves for the east. It is not expected that in each case the charge will be more than five dollars.


Gordon Graydon: Has this been done
through the offices of national selective service, or is it being done outside that department?


Humphrey Mitchell: It is being done through
the instrumentality of the Department of Labour, which embraces national selective service. As I said the other afternoon, we are not responsible for the weather. The fact that we were ahead in the west and backward in the east prompted us to make this transfer, so as to assist Ontario farmers at this time.


Mr. ROSS (Souris):: Does the minister
say he had no definite word from Manitoba on this matter


Humphrey Mitchell: I think I said that. I said there was to be a meeting to-morrow morning. I will know to-morrow.


James Arthur Ross: I have a press release dated June 12 from the area from which these men would be taken. It states that possibly some men will be taken from Manitoba in the transfer of western farm labour for Ontario. This suggested movement is hardly in keeping with the facts as cited by the Minister of Agriculture in discussing agricultural labour, as reported at page 2898 of Hansard for May 21. He placed on the record an extract from an article published in the United States indicating that one man should be exempt for agriculture for every sixteen war units, as set out. I know many farmers in southern Manitoba who are operating alone two or three times that number of units, and who cannot now obtain help in haying operations.


Mr. BENCE:: Can the minister tell us how selective service is going to ensure that the men being taken from Saskatchewan will be returned?


Humphrey Mitchell: I will have the complete record.


Alfred Henry Bence: Will permission to go into industrial plants be refused to these men?


Humphrey Mitchell: Absolutely.

Redistribution



SHIPYARDS IN LOWER ST. LAWRENCE AREA- QUESTION OF APPOINTMENT OF CONTROLLER

[Stage Direction]
On the orders of the day:
Mr. MAURICE BOURGET (Levis):: I
should like to direct a question to the Minister of Munitions and Supply. Is it the intention of the government to place a controller in charge of the shipbuilding yards in the lower Quebec area?


Hon. C. D. HOWE (Minister of Munitions and Supply):: Consideration is being given to the question which my hon. friend has brought up. I hope within the next two or three days to be able to make a definite announcement as to the government's plans for shipyards in the lower St. Lawrence area. I might mention that there is some labour unrest in that area, perhaps not without cause, and I should like to express the hope that no action will be taken by labour in that area until after the government plans have been announced.



GASOLINE


[Stage Direction]
On the orders of the day:
Mr. E. E. PERLEY (Qu'Appelle):: Mr. Speaker, I should like to ask a question of the Minister of Munitions and Supply, under whose jurisdiction comes the matter of fuel administration. My question is prompted by an article appearing in the Regina Leader-Post of June 11. It states that Melford J. Ball, of Weyburn, has invented a new carburrettor which will effect a great saving in gasoline.


Some hon. MEMBERS:: Oh, oh.
Mr. PERLEY": Some hon. members are laughing, but this is a matter of such great importance that I trust the minister will give it careful consideration. The report says that this young man has invented-and I shall quote it-


Thomas Vien: Not only is the hon. member's question out of order, but I would point out that he will be in a position to ask the question when the minister is before the committee.


Ernest Edward Perley: This is a matter of vital importance and should be dealt with immediately. This young man has invented a carburettor, and I should like the house to hear what the article says. I think you will agree, Mr. Speaker, when you have heard it, that it is of vital importance and should be considered.


Thomas Vien: I point out that a report from a newspaper cannot be read in order to base a question on a statement which the hon. member cannot guarantee as correct. It seems to me this is a matter which could be taken up in committee.


Ernest Edward Perley: I shall put my question in another way, then. Has the Minister of Munitions and Supply learned of the invention of a new carburettor by a young man in Weyburn, Saskatchewan. Associated in the development has been a mechanic stationed with the Royal Air Force at Weyburn. It is reported that tests show the standard car would save fifty per cent gasoline.
Hon. C.. D. HOWE (Minister of Munitions and Supply):	I have not heard of this
invention. I may say,' however, that we have a war inventions board in Canada which is prepared to examine very fully any invention sent to it. If the hon. member will have the invention sent to the war inventions board I am sure it will receive careful consideration.



REDISTRIBUTION


[Stage Direction]
On the orders of the day:
William Lyon Mackenzie King: Mr. Speaker, I should like to make a statement to the house with respect to the subject of redistribution which has been mentioned on one or two previous occasions. The statement has a bearing upon the length of time it may take parliament to conclude the work of the present session. On more than one occasion my colleagues and I have given anxious consideration to the problems involved in undertaking, during the war, the work of readjustment of the representation in the House of Commons. I need not remind hon. members who have had a long experience in the house that the process of redistribution may give rise to sharp and even acrimonious differences. The government is desirous, as I know the house and the country are, to avoid, in war time, occasions for political differences and controversy, whenever such differences can be avoided without prejudice to the national war effort or to the effective functioning of our free parliamentary institutions.
We are particularly anxious to prevent differences that might be avoided arising at a time when hostilities, in which our own Canadian forces may be engaged, are at an acute stage. From now on until the close of the war it will at no time be possible to predict what the actual situation may be. We may

Redistribution

be certain, however, that until victory over the axis powers is finally achieved, the situation will become increasingly intense. Apart altogether from future possibilities, circumstances arising out of the war have occasioned special difficulties in respect to redistribution during the continuance of hostilities.
In the first place, the census of 1941, on which the redistribution would have to be based, was taken after Canada had been at war for almost two years. In that period, enlistments in the armed forces, migrations from province to province occasioned by the establishment of war industries, and other shifts of population directly attributable to war-time conditions, had abnormally added to the numbers in some provinces and decreased those in others. In the two years that have elapsed since the census was taken, war-time movements of population have continued and may even have intensified. It may be questioned therefore whether a redistribution based upon the situation in 1941 would conform at all closely to the actual situation which would prevail when the time came to hold a general election. There is another important circumstance of w'hich I am sure all members of the house will wish to take account. Redistribution involves not merely the readjustment of the representation of the provinces, but also the delimitation of the electoral divisions within all or nearly all of the provinces.
I need not remind hon. members that a considerable number of our fellow members are absent on active service in the armed forces and that some of them are overseas. Redistribution, affecting, as it inevitably would, the boundaries of a great many constituencies, would be a matter of immediate concern to them, and a matter on which their right to express their views should, if at all possible, be preserved. These considerations have caused the government to conclude that it does not now seem desirable that readjustment of representation on the basis of the census of 1941 should have to be made during the continuance of the hostilities in which Canada is now engaged, and that an amendment to the British North America Act should be sought in order to permit of the postponement of redistribution.
My colleague the Minister of Justice will at an early date introduce the appropriate resolution in this house. A similar resolution will be introduced in the other house. I believe that the course the government is

recommending will, upon careful consideration, commend itself to members of all parties in the house, as I am sure it will to the people of Canada generally. It will be recognized that the government is seeking to have done only what is in the national interest at a time of war, and that by limiting the effect of the action proposed to the period of hostilities in which Canada is now engaged there will be no occasion for the slightest apprehension that any fundamental constitutional rights will be affected.



CANADIAN ARMY


[Stage Direction]
On the orders of the day:
Mr. W. C. MACDONALD (Parliamentary Assistant to the Minister of National Defence):: The hon. member for York-Sunbury (Mr. Hanson) asked some questions on May 27 and June 7 with reference to the disturbances at Camp Sussex, New Brunswick, which I should now like to answer.
1.	A military course of inquiry was assembled, evidence was heard and findings were made by the court.
2.	An inquest was held by the civil authorities. The coroner's jury found that Private D. M. Bennett died as the result of a wound from a -303 service bullet fired by an unidentified person. The jury added a recommendation to the effect that a further investigation be made by the attorney-general's department. This investigation is proceeding.
3.	The civil authorities have requested the military authorities to take no further steps until the civil investigation is completed.
4.	A soldier, Rifleman J. P. Bidegare, has been arrested by the civil authorities and charged with attempt to do grievous bodily harm contrary to the provisions of section 273 of the criminal code.
5.	Both the Dufferin and Haldimand battalion and the Voltigeurs de Quebec are still in Canada but in different military districts.



WAR APPROPRIATION BILL


[Stage Direction]
The house resumed from Friday, June 11, consideration in committee of a resolution to grant to his majesty certain sums of money for the carrying out of measures consequent upon the existence of a state of war-Mr. Ilsley-Mr. Bradette in the Chair.

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[Stage Direction]
1.	Additions and extensions to plants, $195,000,000.
John George Diefenbaker: Mr. Chairman, I listened this afternoon to the Prime Minister (Mr. Mackenzie King) announcing to the house the attitude which he felt should characterize hon. members of this house during war time, and I could not help but think that if we all were to adopt the standards suggested by him considerable improvement would take place, not only in the debates in this parliament but in the contribution that each and all of us are endeavouring to make. I feel that the duty of an opposition in approaching a discussion of the various matters under the war appropriation measure, should be divided in two parts: one, to give credit when credit is due, and the other, fearlessly to point out shortcomings or deficiencies to the end that Canada's war effort may reach a point of maximization at the earliest possible time.
As I listened to the recital of the Minister of Munitions and Supply (Mr. Howe) on Friday last, I could not help following with great interest and with great pride, what he had to say for without regard to political party the members of this house are Canadians first and foremost, and all will experience pride in the production record of Canadian war industry as revealed by him. It means an economic revolution in Canada has taken place in the transformation of Canada into one of the great industrial nations of the world. It represents a change of attitude and a change of emphasis, with each of the united nations concentrating on the production of that which they can most conveniently produce. It represents the beginning of the culmination of the results of the combined production and resources board which was set up in November, 1942. The duties of the board were defined as follows:
The board shall combine the production programmes of the United States, the United Kingdom and Canada, into a single integrated programme adjusted to the strategic requirements of the war as indicated to the board by the combined chiefs of staff and to all relevant production factors. In this connection the board shall take account of the need for maximum utilization of the productive resources available to the United States, the British commonwealth of nations and the united nations, the need to reduce demands on shipping to a minimum, and the essential needs of the civilian populations.
Canada's production record in the past year, and I speak as one who ini the past
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has been, most critical, is a tribute to what private initiative and private enterprise can do in this country with state collaboration. During the last few months tremendous, drastic and far-reaching changes have taken place in production, and they are indicated in the estimates placed before the house by the minister. Canada in company with the other united nations has adopted the uniform principle of producing offensive weapons instead of defensive weapons. The blueprint of victory consists in taking the offensive. Besides the production of ordinary munitions Canada will concentrate on the production of certain types of aircraft, nine in number, particularly Lancaster bombers and Mosquito bombers, and on fighting naval vessels and on cargo vessels. There has been a change in ground production, due in large measure I am informed to the experience of our troops at Dieppe and in Africa during recent months. I am not going into the question of manpower to-day, but the change in ground production will mean either unemployment for many thousands of men in Canada or the hoarding by industry of men until changed conditions make them, employable unless action is taken and immediately by selective service authorities to the end that these men be placed in their proper positions.
Women have made a great contribution in munitions production, but they are not as yet being used to the extent that they are in Great Britain and the United States of America in industry. Recently a number of members of this house had an opportunity to visit the city of Buffalo and to see there in operation two of the greatest aircraft plants in the United States producing fighting planes. From information secured there I can tell the house, and what I say now will be confirmed by those who were present on that visit, that some fifty-two per cent of the employees in one of these great factories are women. We in Canada will have to increase the number of women in industry if the man-power requirements of the army, the navy and the air force and of industry are to be supplied.
In the past, in 1940, 1941 and 1942, Canada as a member of the united nations found out that valour without production would not win victory. The experience of recent days in Africa and of very recent days in the islands of the Mediterranean has shown the necessity for ever-increasing air power on the part of the united nations. There are many to-day who will contend that, having regard to the
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vast destruction being wrought each night in the great industrial cities of the Ruhr and other parts of Germany, the united nations should devote themselves almost exclusively to developing great air power; that overwhelming air power can and will bring Germany and the other axis nations to their knees.
When I offer words of criticism, as I shall shortly, they will be directed to only one or two matters and my colleagues will devote themselves to other phases in connection with, production. The record in the production of cargo-carrying ships is one in which this opposition takes pride, as the idea was first forcefully brought before this house, by the hon. member for Vancouver South (Mr. Green), and the hon. member for Cumberland (Mr. Black). We take pride in the production of tanks and the contribution they have made in Russia, and we also recall that when one of the members on this side of the house first suggested that tanks could and should be built in Canada-I refer to the hon. member for Parkdale (Mr. Bruce), and I have his actual words here-the attitude taken by the government was that it could not be done.


Clarence Decatur Howe: That statement has been made several times. Will the hon. member read the words where the government said it could not be done? The government had been working on tanks for months before it was mentioned here.


John George Diefenbaker: I will give the words.


Clarence Decatur Howe: Never mind the oratory-give us the words.


John George Diefenbaker: There is a peculiar trait in the minister-as long as you praise him he is perfectly satisfied, but once you offer constructive criticism immediately he becomes aroused. I will give him the quotation later.


Clarence Decatur Howe: Why not now?


John George Diefenbaker: In effect, the minister ridiculed the idea, and five days later one of the departments of information announced that Canada was going ahead very shortly with the production of 300 tanks. No doubt the only objection the minister had at that time, knowing as he must have known that Canada was going to go ahead with the production of tanks, was that the suggestion had come from the opposition before he himself had made the announcement.
I think that we have justifiable pride in what has been done in that it does show one

thing that cannot too often be accentuated in this country and among democracies, and that is that democracies do function when challenged by danger. They are slow to begin operations but when once the people of democracies appreciate that they are fighting for the survival of freedom great results ensue. The results in the united nations are such that within less than four years they are to-day producing more war supplies than the axis nations, who started seven or nine years prior to the war to produce. The united nations have caught up with them in the interval since the beginning of the war and have now passed them.
A tribute should be paid to the Canadian industrialists and to labour for their partnership in this great work. There is not a man or woman in Canada to-day who, in the production record as outlined by the minister, has not a sense of pride in the fact that, through their contributions to victory loans and their actual labour in our factories, and through the leadership in trade unions and the cooperation of industry itself and industrialists, outstanding results have been achieved. They all have pride in their participation in this partnership of patriotic production, which will pay dividends in assured victory for our armed forces of the united nations.
Labour in Canada has a record of which it might well be proud. When I was in Buffalo I was told that a recent survey had taken place in the United States in regard to the question of, shall I call it, unjustifiable absenteeism, absenteeism that is not justified by necessity. In eight of the greatest cities of the United States, industrial centres, the rate of absenteeism was found to be from five to-fifteen per cent with an average of around nine per cent compared with two per cent prior to the war. Translated into production that represents tremendous figures in potential output. Here in Canada, according to the best figures I have been able to secure, *we find that in spite of the fact that there is heavy taxation on all those engaged in labour and that therefore some may be poorer if they work six days in the week than if they work four, absenteeism during the past year has been less than the low rate of two per cent in the United States prior to the W'ar. That tells its own story and clearly proves that labour in Canada in general appreciates everything that this war is being fought for; it appreciates what it means to labour as to all others.

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I think it is a matter of pride to all Canadians that while wages are maintained in the main as of October, 1941, and that across the line in the United States wages are immeasurably greater, in munitions and war production the men and women of this country have continued, regardless of their feelings with regard to the wages they receive, to contribute to the great work that they have done in the production of this nation.
We want the minister to be able to place before the house the record of the numbers of men who will be out of work in each industry by changes that are being made. What transfers are being made in consequence now and what will be made? We also want to know the plans the government have to prevent anyone in industry from hoarding employees against the day when production has been resumed in that particular industry.
I come now to a question on which I think the government must give particulars, that of capital advances and assistance to private companies, and the matter of the continuance of government corporations after the war. Last year and the year before I asked the minister what were the plans and what was intended to be done and what disposal is to be made of these plants after the war. After almost four years of war, the answer given in past years will not be accepted as sufficient to-day. The general answer given then was to the effect that no plans had been made and no decision arrived at. When I look at the record and find that Canada has advanced by way of capital assistance to private corporations the sum of $821,000,000 as of December last and that 335 private companies have received capital assistance, having regard to the expenditure that has been made in this direction and the vast developments that have taken place, the building of tremendous factories and the installation of machinery that has run into literally hundreds of millions of dollars, I feel that the people of Canada have a right to know now what the government's plan is for the disposal of these industries after the war.
So far as I have been able to find out, all that has been done in this connection has been to provide optional purchase clauses in some, but very few, of the government agreements with private corporations. In a return, No. 298 of May 21, 1943, answers are given to questions asked by the hon. member for Rosetown-Biggar (Mr. Coldwell). The hon. member asked the following question: Are there any optional purchase clauses contained in government agreements with private corporations in connection with government investments in any industry or plant? The list is given there. There is a number of agreements, with Defence Industries Limited, Consolidated Mining and Smelting Company Limited, Alberta Nitrogen Company, Electric Reduction Company of Canada Limited, Canada Wire and Cable Company, Anaconda American Brass Limited, Nichols Chemical Company Limited, Electric Steels Limited, Chemical Construction Corporation and Welland Chemical Works Limited, Shawinigan Chemicals Limited, Macdonald Chemicals Limited, Naugatuck Chemicals Limited. Defence Industries Limited has received capital advances of about $109,000,000, and these other companies have received capital advances totalling, according to approximate figuring, about $170,000,000. In these agreements there is not the definiteness there should be. The general provision relative to the disposal of plants seems to be, as indicated in relation to Defence Industries Limited, that the government shall give the company a sixty-day option to purchase the plant or any part thereof at a price it is willing to accept from any other party; if the offer is not accepted, the government is free to sell the plant to any other party at a price not less than that offered to Defence Industries Limited. These terms are not clear; indeed they are so wide open that the government is left in a position where a sale far below the proper and fair price could be made. The criticism that I have heard and which I am bringing before the minister is based on the fact that the government now is not making arrangements to protect the interests of the people of Canada after the war for the tremendous amounts they have expended in war industry. I believe the time has come, in view of the large expenditure which will be made this year, estimated at $195,000,000, in additions to and extensions of plants, that we in western Canada have the right to share in the industrialization which is taking place.
I will cite as an example the province of Saskatchewan. We could have tanneries established there, but our hide production is shipped out of the province to be manufactured. We are in a position to manufacture glycerine and glue, yet only a few months ago an arrangement was made whereby we would ship the bones out of Saskatchewan to the United States of America, where they are manufactured into one or other of these components. I do not want to become parochial, but I must again bring to the minister's attention the fact that,
War Appropriation-Supplies

according to the most reliable figures I have been able to obtain, of the vast sum of $800,000,000 dispensed by way of capital assistance, Saskatchewan has received less than $1,000,000. There is no justification for that. The hon. member for Saskatoon City (Mr. Bence) has dealt with the question of establishing a flax processing plant in western Canada and plants for the production of synthetic rubber. Factories could and should be established in various parts of Canada to provide when the war is over a backlog for the unemployment which may otherwise take place. It is a notoriously well-known fact that man-power does not move freely back and forth across the dominion where work is available, and seeks employment as near home as it can.
The following inquiries were directed to the Minister of Munitions and Supply, reference sessional paper 231-C, March 29, 1943: "In each province, what is the total amount of capital assistance given?. What is the total volume of all orders given by the Department of Munitions and Supply (a) to all Canadian industry and (b) in each province?" The answer, which I do not accept because ordinary addition will bring out the necessary facts, is that "it is impossible to give a money break-down by provinces that will properly reveal the extent to which each province is participating in war orders made possible by capital assistance or by the operation of crown companies or by ordinary award of contracts". With all due respect, I say that that statement does not represent the facts. The only reason I can suggest why the minister failed to give an answer showing what each province has received compared with what other provinces received, is that the record was anything but favourable to governmental planning. The United States today, passing through a similar condition to our own here in Canada, realizing that when the war is over she will own or be interested in factories valued at many thousands of millions of dollars, is engaged in a survey with a view of ascertaining what plans can be and should be made now for the disposal of these plants after the war. I do not know what the figures are for Canada; I have endeavoured to secure them but I have been unable to do so; but in the United States, when the war is over, the government will own 96 per cent of the new shipbuilding industries; 93 per cent of the new aircraft industries; 71 per cent of the new iron and steel plants, and 64 per cent of the electrical equipment factories. No doubt a similar situation obtains in this country. fMr. Diefenbaker.]
We in parliament have a right to a declaration this session on this problem. Will these industrial undertakings be leased, or will they be sold to private enterprise, subject to the necessary controls to assure that monopolistic enterprise shall not thereby be built up? On the other side of the picture is socialization or state operation. What is the plan of the government? Shall it be private enterprise, with the government having something to do with management? Shall it be private enterprise without any control? Or will the government continue after the war to operate some of the government-owned or war-financed plants manufacturing commodities which are as necessary in time of peace as they are in time of war? I think that in the distribution of these plants after the war, division among the different "enter-preneurs" should be made on proper terms and with the design of promoting competition. If there is one argument we hear to-day more than another it is that when the war is over the government will be in a position to turn over these plants to its friends, and to discriminate in their disposal or dispersion. That sort of argument can be and must be answered now. In the interests of post-war employment and for the good of our people as a whole a decision and a plan must be evolved now.
So far as this party is concerned its policy has been enunciated by its leader, Mr. John Bracken, and it is simply this. "While paying a tribute to what private enterprise has done and can do, and recognizing that it has been a mainspring of world progress throughout the generations, we hold that it does not and must not be allowed to mean the rampage of uncontrolled greed. Prosperity comes from production, production from enterprise, largely private enterprise. It is when enterprise fails that prosperity disappears." So far as the government of the United States is concerned there is some suggestion to-day that cooperation between industry and labour will continue when the war is over, but cooperation between industry and the government must never be substituted for competition. To-day Britain is facing this problem; and though the minister may laugh the fact remains that this is one problem which must be faced now.


Clarence Decatur Howe: I should like my hon. friend to withdraw that remark, because I was not laughing at anything the hon. gentleman said; it was at a comment made behind me.


John George Diefenbaker: Very well; I am quite prepared to accept that.

War Appropriation-Supplies


Clarence Decatur Howe: I do not like that to appear in my hon. friend's speech, because I was not laughing at anything he said.


John George Diefenbaker: I am trying to offer a serious suggestion to the minister, and I find that he usually accepts suggestions made in that way.
I have dealt with this matter at some length, and my time is nearly up. I am not going into the details of the plan for the demobilization of industry, or to offer any suggestions in that regard, but plans for this demobilization must be made now, and if I may I would suggest that the government must take into consideration the following points:
1.	A determination of the basis upon which sale or disposition shall be made.
2.	A government plan now for the conversion of these war-time industries to peacetime economy and production.
3.	A determination now as to which plants will be continued after the war for standby purposes.
4. A plan now of assistance to small industries after the war by way of loans to stimulate the change from the war-time to peace-time economy, coupled with technical advice as to the most appropriate use of their facilities in peace-time production.
We have many large industries in Canada, but in the main the backbone of our industry is the small enterprise. I have the exact figures on my desk, though I do not see them at the moment; as nearly as I remember them, however, there are only 172 industries in Canada employing more than 500 men, while there are 24,600 employing less than 500 men. There should be a guarantee that private enterprise of the small business type will receive a fair and reasonable share of the available facilities, to the end that *competition will be engendered and control of the great industries that have been *established during the war or have increased in importance since the beginning of the war shall not fall into the hands of cartels or monopoly groups. In that connection I would point out that the national planning board of the United States of America has suggested that so far as certain great industries are concerned, producing such crucial commodities as magnesium, aluminum, aircraft and the like, consideration should be given to the extension of a joint private and governmental partnership in those industries, necessary as they are to peace as to war economy.
That in general is the information I should like to secure from the minis^r in connection with this phase of his estimates. I should like to know what further extensions of existing companies are planned for this coming year. I should like to know why the provinces which up to the present time have not received any appreciable share of industry should not have an opportunity to build up some of the industrial life that is to be found in other parts of Canada, through the development of power where that power is available, in the province of Saskatchewan for an example.
In the few moments still at my disposal I want to refer to one other matter, though I shall deal with it at greater length later on;
I have reference to the production of aircraft in this country. I have before me the various speeches in this connection made by the minister, together with the reports he has given during the last three years, and all I can say is that the hopes expressed in regard to aircraft production have not been fulfilled. I go back to 1940 and find the same hopeful expressions in regard to the production of aircraft that we hear to-day, and it was the same in 1941 and 1942. On October 3, 1941, Mr. Bell, the controller, during the course of a speech, said that at that time Canada was producing more aircraft per week than in a whole year before the war, but he did not say what year he was talking about. The production before the war was shown by the minister on May 22, 1940, to have been very small. If increasing aircraft production is necessary, as apparently it is; if the war production of Germany can be reduced by seventeen per cent in three months through air attack, should not Canada now embark upon an ever-extending campaign for the production of aircraft? The record in this connection is such, I think, that an explanation is required from the minister in regard to what happened at the Malton plant when it was operated by National Steel Car. Last year and the year before it was held up as an example of efficiency in production. The people of Canada have a right to know how much money was put into that plant and what was the cost in man hours of the production of each type of aeroplane. Apparently the de Havilland plant in production of Mosquito bombers has revealed weaknesses, though members of this house have no knowledge of what happened, except that a government controller was put in charge in place of the former management. What is the production now of de Havilland Mosquitos-and1 I know
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one must always ask that question subject to security neefas. The hon. Mr. Davis said two months ago in Australia that Canada was producing five Mosquito planes per day.


Mr. JOHNSTON (Bow River):: Where did he get his information?


John George Diefenbaker: According to the minister, speaking on November 30, 1942, before the Canadian club at Toronto, we find this:
We are now in production with de Havilland Mosquitos, recognized as the world's fastest and most efficient plane. We have planned production of five planes per day of this type.
Having regard to the fact that information as to production was given in Australia, I would ask the minister to tell the house and the country how many of these planes were built and delivered as of March 31, 1943.
There has been a great deal of criticism of these two plants. Every hon. member who has at all interested himself in the production of aircraft has heard criticism. We hear that man-power has not been utilized properly, that men have been held back from doing more work than was required at the time. There was wastefulness and inefficiency in the operations of these plants. Changes have taken place. The Malton plant has been taken over by the government. The de Havilland plant is now in charge of a controller appointed by the government.


The CHAIRMAN:: The hon. member has spoken for forty minutes.


John George Diefenbaker: May I finish just this sentence?


Clarence Decatur Howe: Yes; finish your statement.


John George Diefenbaker: How many manhours were required to produce Mosquito bombers at these plants, compared with the plants in the United States? Having regard to the many months of preliminary work preparatory to the production of Mosquito bombers-and I am informed this was some eleven months, speaking of course subject to correction-what was the cost, in wages alone, of the men employed in this plant during the period they have been engaged in the production of Mosquito bombers?
I think when the whole story of aircraft production is told, it will be found that immediate and drastic action is necessary. We are not producing the engines, although in 1940 the minister indicated that engines would be produced. In his statement of May 22, 1940, he said:
Aeroplane engines are not manufactured in Canada, and are at present the limiting factor in the further development of our aircraft 
industry. Extensive study has been given to obtaining a source of aeroplane engines within Canada, and negotiations are proceeding for the establishment in Canada of a large plant for the manufacture of aeroplane engines.
In his address the other day the minister paid a fine tribute to Canadian labour and Canadian industry when he said, in effect, that we could produce anything in Canada, and that the war had proven the truth of his statement. At page 3556 we find these words:
Never again will there be any doubt that Canada can manufacture anything that can be manufactured elsewhere.
We talk about the manufacturing of planes, that the number produced to-day amounts to about 8,000, and that the number being produced each month is about 320. Yet the fact is that when the minister gave his report a year ago, production in that respect was greater than it is to-day.


Clarence Decatur Howe: In numbers, yes.


John George Diefenbaker: Yes. On May 14, 1942, the minister said:
In the matter of aircraft, our production is now stepped up to about 400 planes a month, and we have plants that are not in production.
. . . we have now reduced our production to nine types of planes, and the plants are cleaning up old orders and concentrating on one type of production for each plant with accordingly improved results.


Clarence Decatur Howe: May I say to my hon. friend that there would be forty times the number of man-hours in the production of a Lancaster bomber that there would be in the production of a Fleet trainer. That is the reason for the smaller number of planes. But the tonnage of planes goes steadily higher.


John George Diefenbaker: The same condition prevailed in 1942. Then we had nine different types of planes, and we have the same nine to-day.


Clarence Decatur Howe: But we were cleaning up our orders on smaller planes.


John George Diefenbaker: The fact remains that in May, 1942, we had concentrated production on nine planes, the same number as we are concentrating on to-day. The monthly production is eighty planes less than it was a year ago. That reduction requires an explanation from the minister.
May I thank the committee for allowing me these extra few words. In conclusion, may I say that at this time we in the House of Commons want information, and very full information, as to the reasons why we are not to-day producing aeroplane engines in preparation for the post-war period. We can do it-that was admitted by the minister when he paid tribute to Canada's workmen. We want

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to know, too, what happened in connection with the Malton plant, and what happened in connection with the de Havilland plant. We want a full and complete statement on these plants, because there are rumours around which require to be answered.


Thomas Reid: Mr. Chairman, those of us who listened to the speech of the Minister of Munitions and Supply (Mr. Howe) on Friday last, and others who have since read his speech in Hansard, must have come to the conclusion that the record of achievement by the minister as it appears in Hansard is one of which every one of us can be proud. Before the war, in certain countries Canada had been looked upon as an agricultural land. To-day such is not the case, because Canada now ranks among the foremost nations of the world as an industrial producer. Some considerable credit is due the minister, and I was pleased indeed when at the opening of his remarks the hon. member for Lake Centre (Mr. Diefenbaker) paid his respects to the record, to the minister and to the men who have helped to produce guns, tanks and all the implements of war we are to-day producing.
I have not always seen eye to eye with the Minister of Munitions and Supply. We have had our differences. But I have never had any doubt that he was the best man this country could have obtained for the job. I think every hon. member will agree with that statement. If there are those who would not agree, I challenge them to name anyone in Canada who could better his record. The minister has had a job to do. I have differed with him, as have other hon. members from the eastern and western provinces, particularly those from British Columbia. We have differed with him in the matter of the centralization of industry in the two central provinces. As I say, we realize that the minister had a job to do, that he had to produce these articles of war, but I am just wondering if after the war the eastern and western provinces, particularly British Columbia, will have any opportunity to develop industries. It may well be that by that time we might be over-industrialized in certain lines of endeavour.
I am not going to deal with a great number of matters this afternoon, but there is one thing I should like to bring to the attention of the committee and of the Minister of Munitions and Supply. I refer to the production of steel in British Columbia. I may say right here that I do not approach this subject as one who is ignorant of the facts. I am one of the few members of the house who have had practical and successful 72537-229
experience in the manufacture and production of both steel and iron. As the minister pointed out, we are producing in Canada at the present time some 3,000,000 tons of steel. We are importing 2,000,000 tons, with the possibility that we shall have to import
500,000	tons additional this year. I wonder how many hon. members realize that practically all the ore needed to make the
3,000,000 tons produced in Canada comes from the United States? The steel plants in Nova Scotia bring in ore from Brazil or Newfoundland, but the great steel plants in Ontario get their ore from the lake Superior region, from the Mesaba range. I was surprised to read the other day that there is only visible a ten years' supply in the open pits of the Mesaba range, and which furnish eighty-five per cent of the iron ore used in the United States and practically all that used by the steel plants in Ontario. There are other supplies of ore in the Mesaba range but they will have to go deeper for it, perhaps go into the mining of iron ore.
There is, however, plenty of iron ore in Canada. I am not particularly familiar with the iron ore deposits in the eastern provinces, but I have made some little study of those in British Columbia. I say without fear of successful contradiction that the iron ores of British Columbia contain a higher iron content than any other ore in the world. The Mesaba range ores contain only as high as fifty-one per cent iron, but those of British Columbia run as high as seventy per cent iron content. These ores are also low in the impurities, especially phosphorus and sulphur which are usually found in iron ore. There is also in British Columbia an abundance of coal and limestone. Over the years some forty-eight engineers have reported on more than thirty-two properties containing iron ore. All these properties are on tidewater. The question then arises: Why is it that no development has taken place in British Columbia or that no practical effort has been made to develop the iron ores of that province, as well as to do more in the way of developing the iron ores in other parts of Canada?
The fight which British Columbia has put up for the manufacture of steel in that province has been one of thirty years or more duration. It is most interesting to note that last year a special committee was set up by the United States senate, called the Truman committee. Sworn evidence was given before this committee that the Morgan-United States Steel corporation interests were behind the blocking of any move to develop steel production in British Columbia.

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We have always suspected that the hands of Morgan and the United States Steel corporation were behind this, but here we, for the first time, have sworn testimony. It is interesting to note that the United States Steel corporation and the Morgan interests were present at that committee but as yet no rebuttal has been made to the sworn statements of Mr. Landahl of Seattle.
It may be asked why I am bringing up the question of steel production at this time. I do it for two reasons. First, I want to direct the attention of the minister and the committee to the reasons why the efforts put forth by the people of British Columbia and the western states have been thwarted. Second, there is a principle at stake. We have been living and are still living in the days of cartels and combines. To my mind this matter is so serious that I deem it my duty as a member to get up in my place this afternoon and ask that note be made of the statements made before the United States senate committee in August, 1942. Those statements were most damaging and should receive some consideration and investigation by the government of this country. I am not going to deal with all the proposals which have been put forward by British Columbia since the war began in connection with the erection of an electric furnace to melt our surplus steel scrap. We were promised that this would be done, and at one time actually thought it was to be an accomplished fact. The promise has recently been made by the minister that he will help to further this project, so that I shall not refer to the matter other than to say that it is rather strange that when the announcement appeared in the press two weeks ago that certain public-spirited men of Vancouver were coming to Ottawa to place the matter before the Minister of Munitions and Supply, the agent of the Morgan-United States Steel corporation interests was in the city and the chief agent of the corporation in Vancouver also appeared in Ottawa. That may have been only a coincidence, but to me it was a most remarkable coincidence. I may be a little suspicious, but I do not think they were here for their health. They were here, I believe, to watch and to continue blocking if they could any effort toward the establishment of a steel-making industry in British Columbia.
I have not the time this afternoon to read all the evidence given before the Truman committee, but I would advise hon. members to get a copy of this evidence and read it carefully, particularly the statements given

under oath about the iron ores of British Columbia. They will find in this evidence details of the fight that has gone on over a twenty-five year period. However, I should like to read one letter which I think will explain quite briefly some of the evidence which had been submitted. This is from Senator Thomas Voyce to Senator Lewis Schwellenbaeh, and it reads:
Dear Senator: I regret it was impossible to arrange a meeting between you and the men here who have charge of efforts to build a blast furnace on the Pacific coast.
The next best I can do is to write you and try to give you a view of this particular situation and bring about the action necessary, to place our situation before the President in Washington; he is in my judgment the only one able to assist the Pacific coast.
I enclose a memorandum giving a few details of the proposed industrial development.
When you read the memorandum and report enclosed, you will say-"if that is correct, why has no blast furnace been built on the Pacific coast" and that was what I was so anxious to go over with you.
I wanted you to know that since 1912 the Morgan-U.S. Steel Corporation groups have held the entire Pacific coast under control, ruining those that attempted to build a blast furnace on the Pacific coast, reaching into every source, issuing government pamphlets covering iron ores, coking coals, et cetera, stopping publishing favouring such, stopping newspapers from mentioning this development a second time, doing everything that power-frenzied men with unlimited cash generally do-first under the leadership of Judge Gary, and since his death merely as ordinary routine.
Instead of sending an ordinary engineer, it would be best to send a G man engineer; only one such could cope with the machinations of the Morgan-U.S. Steel Corporation groups, that are constantly in operation to prevent us on the Pacific coast from making use of our iron ores, coals, et cetera.
That is a very important letter because it deals not only with the iron ores of the western districts of the United States but with the iron ores of British Columbia which it was intended to use when a steel smelting plant could be developed in Washington, Oregon or California.
I also want to put on record a further statement. This is by Mr. Landahl, who appeared before that committee:
Every time an M.P. or someone of importance starts to press for iron and steel production in British Columbia, the local fifth column says -"let us have an (another) examination of our iron ore resources."
I want to point out here that again and again we have had examinations and reports on orr iron ores, one conflicting with the other and these conflicting reports have to

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quite an extent been engendered by those opposed to the establishment of a steel plant on the Pacific coast. I continue the quotation:
For forty-three years there have been almost annual "examinations of the iron ore resources of the province of British Columbia." Numerous reports have been expensively printed by the governments.
Then he gives the names of the engineers who have made these reports and goes on to say:
Forty-eight mining engineers of fine repute, most of them, over one every year for forty-three years, and nobody stops this dreadful betrayal of the people.
Beginning of the year 1941, owing to the war, an agitation was on for starting pig iron production and the dominion and B.C. governments were moved to "have an (another) examination of our resources." Arthur G. McKee and Co. of Cleveland was engaged-did the -work

handed in report August 20, 1941. The report is marked as printed in 1941.
Copies of this report can now be obtained, but for some considerable time the report was prevented from being printed. I continue the quotation:
Latter part of May I was east and met an engineer that had been in B.C. when the McKee examination was under way. He showed me the report. I went through the same and asked-
Q. Where did you get all these wrong figures from?
A. From Doctor Walker and Mr. Wilkinson.
By the way, Mr. Wilkinson is agent in Vancouver for the United States Steel corporation. The quotation continues:
Q. Wilkinson, who is he?
A. He owns the Morrison Nail Works.
Q. Who took the McKee Company to Wilkinson?
A. Doctor Walker did (Walker is Deputy Minister of Mines).
Wilkinson is the mainland agent for the U.S.S. Corporation-He led the fight against the British Ironmasters in 1922-26.
While we avoided the Morgan-U.S. Steel Corporation, their emissaries ambushed us in every quarter and stopped every source we negotiated with from carrying out their undertakings. Briefly we found that-
(a)	They controlled all private finance in the United States.
(b)	They could influence in their favour all other finance, governmental and private, here and all other countries.
(c)	Only one man in the world ever successfully challenged their supremacy, and that was President Franklin D. Roosevelt.
When the matter was drawn to the President's attention last fall he obtained permission for the erection of a steel plant on the Pacific coast. And where do you think, Mr. Chairman, that steel plant is being built? Away down in the orange groves of California, where the steel interests realize that it must,
from its very location, disappear after this war is over. But at least President Franklin D. Roosevelt got action.
To my mind, Mr. Chairman, this matter is extremely serious. I know that the minister may tell us that man-power is short or that he is getting enough steel from the United States and Canada to fill the requirements, but there is no doubt, and I say this without fear of successful contradiction, that if the government had heeded the advice of the members from British Columbia in 1939 and 1940 that steel plant would have been in operation to-day in British Columbia and would certainly have been a great contributing factor in the building of more ships in Canada and in making available more steel.
I do not know whether I am right in saying this or not. But I feel it is pertinent to say at this time that even when the matter was put up by members of parliament from British Columbia in Ottawa last fall they were told by Mr. Kilbourn, the steel controller, that British Columbia did not have the ghost of a chance for a steel plant-did not have the ghost of a chance. So we found it all along the way. Every time we put up the proposition our efforts were thwarted. We were told that steel could be got elsewhere more cheaply than in British Columbia, and that after the war there would be an over-supply of steel. But, Mr. Chairman, the whole Pacific coast market is open there. During this war we have been transporting steel scrap from British Columbia across to the east at a cost of $15 per ton for freight and then bringing it back to British Columbia at $25 per ton freight, and in the face of the fact that British Columbia has an abundance of iron ores, ores with the highest iron content anywhere in the world, and has likewise available ample supplies of coal, and mountains of lime, all of which are on the seaboard.
I pointed out when I started, Mr. Chairman, that I had two objects in view. One was to bring this serious matter to the attention of the house and of the minister, and the other was to endeavour if I could in my small way to help break down the opposition outside this house who up to the present time have been able to thwart the people of British Columbia in developing its natural resources and in developing industries within that province. There is a principle at stake. While I know that it has been attempted unsuccessfully by other corporations, it is my opinion that if this steel cartel could be broken down so that we in British Columbia would be allowed to develop our iron ores, it might be the means of helping us also to break down
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other cartels which have been thwarting our advancement, and this must be done if we in British Columbia are to continue our onward march of progress in that province.
I might mention a serious matter that came to my attention the other day, which has to do with cartels but perhaps has nothing directly to do with steel. A canning manufacturer in New Westminster, who has built up a wonderful business, was approached some weeks ago by certain interests who wanted to buy that business. He told them it was not for sale. They offered him a wonderful price and he said, "No; it is my life's work, an industry I have built up by my own initiative." He was told by these men who approached him, "All right; keep it, but if we can we will put you out of business." That is extremely serious.
Mr. HOWE; That is a very serious charge, and the hon. member must give full particulars, the names of all parties, so that steps can be taken.
Mr. REID; I will tell the minister what I will do, to be fair. I will give him the names in confidence.


Clarence Decatur Howe: Not in confidence; give me the names.


Thomas Reid: I will give the minister the name of the man who was approached.


Clarence Decatur Howe: And the name of the man who approached him, I think.


Thomas Reid: I will try to find that out. I did not hear the name of the man who approached him, but I was very much impressed by the statement because it did not come from an irresponsible person, and I brought it in here to show that there are certain interests in this country who are determined that certain provinces, either east or west, will not progress or have certain industries. As the minister knows, I have stood in my place, as was my duty, and pointed out the danger of centralization of industries in the country. It is not the easiest thing to stand against the government or the minister, and I am not blaming the minister for this matter of steel because it has been going on for thirty or thirty-five years. But he has men outside in his department who are not giving him right advice, or if they are giving him advice it is negative: do not allow British Columbia to develop; they do not need it.
I felt I was carrying out the trust given me by the people of New Westminster in rising in my place and in my humble way bringing 'the matter to the attention of the minister and of the house in the hope that it might do (Mr. Reid.]
some good in helping to break down, if possible, these outside of governments themselves who up to the present time have controlled' to quite an extent the industrial life of this and other countries.


Thomas Miller Bell: I am sure that hon. members will forgive me if I do not follow their arguments through. I have listened with interest to the hon. member for New Westminster (Mr. Reid). I read the United States evidence to which he referred, and I heard the evidence given here last autumn. I believe he was thoroughly justified in bringing before the committee the question of the manufacture of steel on the Pacific coast of Canada.
The statement which the minister made on Friday was of an extremely creditable achievement. I think the whole house will agree with that assertion. It indicates what industrial planning, even when it is taken, if I may say so, rather unwillingly and under pressure, can do for a nation. Of the various phases of the minister's statement, members of our party in this house will have something to say subsequently. Taken as a whole, the record indicates what this country can do when it has a well-defined purpose in view.


Mr. McIVOR:: And leadership.


Major James William Coldwell: Substantial advances on purchase contracts of critical and strategic materials have been made to China and Russia, and in connection with purchases in some Latin-American countries.
May 13, 1941, OPM requested that the initial contract be doubled. This was concluded at the same price. The company ashed for an advance of $25,000,000 against this contract, and a loan for this amount was made to it by the Export-Import Bank at three per cent interest.
In negotiating contracts with the Aluminum Company of America to build and operate aluminum plants in the United States for our account, we secured a reduction from Alcoa-
The Aluminum Company of America.
-in the price of aluminum in the United States from 17 cents to 15 cents per pound, thereby saving the government a great many millions of dollars.
I want to draw attention particularly to this paragraph:
After getting the reduced price from Alcoa, we asked the Aluminum Company of Canada to reduce their price from 17 cents to 15 cents, notwithstanding we had contracted to pay 17 cents. The company was reluctant to reduce the price since they were getting 17 cents from the British and Canadian governments. However, we finally prevailed upon them to reduce the price to 15 cents on 80 per cent of the shipments. To get this reduction in price, we waived the interest on the advances, and made a reduction in the amortization requirements. The reduction from 17 cents to 15 cents saved Metals Reserve Company $16,000,000, while only $2,500.000 was waived in interest. This revision of the previous contracts provided for an increase in our purchases of aluminum from Canada to
1.000.	000.000 pounds.
February 23, 1942, we were requested by WPB to increase the purchase of Canadian aluminum by an additional 370,000,000 pounds. These purchases were made at the reduced price schedule. The latter contracts also provided for advances against deliveries.
Total loans and advances to date in connection with all purchase contracts aggregate $68,500,000, and repayments have been $15,919,477. Total amount of aluminum contracted for is 1,370,000,000 pounds, and deliveries to date have been
368.000.	000 pounds.
, The contracts made provision for a fixed basis of cancellation on any part of the aluminum that we might determine not to buy.
Metals Reserve Company has had no control over the expenditure of the loans and advances, that is. whether they were to be used for working capital, plant, expansion, or otherwise.
Sincerely yours,
Jesse H. Jones, Secretary of Commerce.


Clarence Decatur Howe: Will the hon. member table that letter?


Major James William Coldwell: That letter is tabled.


Mr. MACKENZIE (Vancouver Centre):: Is that a copy?


Major James William Coldwell: It is a copy. But the contents of the letter have been cheeked. When I returned to Ottawa and read again the minister's speech made on March 23,
[Mr. Coldwell.l
I thought perhaps I or the stenographer who copied the letter had made a mistake in the date, and consequently 1 telegraphed Washington to have a check made of the date of the letter. I received this reply:
Re your telegram this morning offices Jesse Jones and Senator Truman both confirm March 24 1943 date on Jones letter.


Clarence Decatur Howe: May I interrupt for a
minute? That letter is not inconsistent with what I said in the house. I was not aware of the arrangement with the Jesse Jones agency-the Metals Reserve Company, I believe it is called-because it did not pass through the Department of Munitions and Supply. It was a contract between the Metals Reserve Company and the Aluminum Company of Canada Limited. The first intimation I had of it was an intimation from a United States source that a price of 15 cents has been contracted for with the United States agency. I immediately advised the Aluminum Company of Canada that the price to Canada and the price to Great Britain would also be 15 cents, and that was accepted and the contracts were revised accordingly. The fact that the Metals Reserve corporation did not make a price of 15 cents for their total purchase is news to me. But what I intended to say was that existing contracts between the Aluminum Company of Canada and Britain-in the meantime the British government had appointed me their agent to deal with aluminum matters-were revised on a 15 cents basis converted into Canadian funds.


Major James William Coldwell: Well, it will be noted that the Aluminum Company of Canada was reluctant to reduce the price from 17 to 15 cents to the United States government because they were getting 17 cents from the British and Canadian governments.


Clarence Decatur Howe: Yes; but may I say that
there is a vast difference in the relative positions. The new plants in the United States were built with funds furnished by the United States government and are owned by that government, whereas the Aluminum Company of Canada were making metal in plants which they themselves owned.


Major James William Coldwell: I shall have something to say about that in a few minutes, but I would draw the minister's attention to this, that 15 cents and 17 cents a pound were the exact prices originally agreed upon among members of the international cartel which was formed in 1931. That is the cartel known as Alliance Limited, a cartel which, by the way, included Farbenindustrie of Germany

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until 1942. Indeed, as far as the parent company of Aluminum of Canada is concerned, namely, Aluminium Limited, so far as I know it has not been dissolved; that is, the cartel of which Farbenindustrie was a part.
On May 14 I also drew attention to the fact that the prospectus of the company referred to what was termed a reduction in the base selling price of aluminum, and I noticed that the minister used the same words in March.
I concluded that there must be some provision for some price other than the base price. I understand that some four contracts were made between the Metals Reserve Corporation and the Aluminum Company of Canada, and of course these contracts have been referred to on the floor of congress; references will be found at page 1943 of the congressional appendix, by Hon. John M. Coffee. I understand that these contracts contain what is known in the United States, and sometimes in Canada too, as an escalator clause, which provides that in the event of certain costs, including wages, raw material, transportation or insurance increasing, the price shall be advanced proportionately and accordingly. So that there is another price than the one mentioned in the contract. In other words, the price referred to in the prospectus as the base price of fifteen cents or seventeen cents, as the case may be, is only a base price, the actual price may be higher. Whether even the minimum price of fifteen cents is fair and reasonable is a matter to which I wish to draw the attention of this committee.
In the meantime I am going to ask the minister to tell the committee, when he has something to say, what are the actual prices per pound we have paid and are paying for aluminum, now and since the outbreak of the war. In the course of an investigation into the operations of the Aluminum Company of America, and in a brief submitted to the courts on behalf of the United States government, references are made to the cost of producing commercial ingots at Arvida in the year 1937. Not only will you find the reference there; it will be found also in the annual report of the company for 1937 or 1938, when Mr. E. K. Davis, president of Aluminium Limited, made the statement that they were selling some aluminum at thirteen cents a pound and that this gave Aluminum of Canada a profit of four cents a pound, giving a cost at that time, estimated in that way, of nine cents a pound; and it was admitted by the company before the United States courts that in that year, with a relatively small production, with the equipment then installed and including in the price the profits made by the
subsidiary companies in the production of bauxite, power and so forth, the Arvida plant was producing commercial ingots at a price of 8-93 cents a pound. To-day the new aluminum plant, with the latest, most modern and most efficient machinery, producing, as the minister told us on Friday, six times as much aluminum as in 1939, still charges fifteen cents and seventeen cents a pound as a base price.


Mr. MacNICOL:: That is a profit of 100 per cent.


Major James William Coldwell: With the vastly increased production and the more modern equipment, Aluminium Limited at its subsidiary's Arvida plant should produce the metal at a much lower figure than in 1937. Let me repeat that the prices set by the corporation and agreed to by the government are the prices set in 1931 by the international cartel, Alliance Limited. Again let me remark that if the sister company, the Aluminum Company of America, with higher labour costs and more expensive power, can produce the metal and maintain its very high profits, as it has done and is doing, on the basis of fifteen cents a pound, then obviously the Aluminum Company of Canada is able to produce and sell aluminum to the Canadian, United States, Australian and other united nations governments at a price considerably less than that at which the United States company can sell to the government of that country.
I say the united nations are being sold down the Saguenay river by these agreements; that while our people are called upon to sacrifice, and while Canadian boys are giving their lives in a great cause, this giant corporation is receiving profits and properties which will enable it after the war to maintain a monopoly which will dominate electric power resources and the production of aluminum on the American continent and to a large extent throughout the world. This is a serious condition, and I intend to prove these statements this afternoon, if I have time.
To understand the effect of the government's policy in regard to the aluminum companies it is necessary to delve into their history and to trace, as briefly as possible, the steps by which they have secured their stranglehold both on aluminum and on the nations. I shall take the Aluminum Company of America first, because it was originally the parent of all the companies affiliated with Aluminium Limited. It can be shown that this has been a highly profitable monopoly for many years. An analysis of the financial history of this corporation reveals the enormous profits made by the owners. In 1905 the original capital, including not only cash but
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stock issued in payment for patents, amounted to not more than $3,121,600. Thirty years later, in 1935, the original investment, without the investment of another cent raised from themselves or from the public, gave the owners assets in Alcoa and its creature, Aluminium Limited, totalling $167,500,000. By 1942 those assets had jumped to over $350,000,000 for Aluminium Limited alone. In the twenty-five years from 1911 to 1935 the profits available for securities representing the original investment of $3,121,600 totalled $240,000,000, indicating an annual return of 282 per cent. Out of this some $81,274,000 was paid in cash dividends, representing a cash return of 100 per cent per year paid on the original investment. Imagine what will be the vast increase in the assets of the corporation as a result of the accelerated depreciation now being granted by Canada 1 This enormous accumulation of wealth, representing mainly gains derived from monopoly power and privileged access to valuable hydro-electric resources, has been concentrated in the hands of a mere handful of people. There has been no wide diffusion of ownership of aluminum shares, some ninety per cent of the stock being held by directors and members of their families.
It is to this company that the governments of Canada, the United States, Great Britain and Australia are giving millions of dollars over and above the real value of the aluminum during the course of the present war. That is what the agreements really do.
The lifelong policy of the aluminum corporation has been to maintain high prices for its product, the effect of which has been to restrict its use. General Motors, for example, abandoned its use years ago on account of Alcoa's arbitrary price-fixing policy. The Ford Motor Company about the same time turned to steel in order to escape the monopoly stranglehold. Other companies followed the same path. On the eve of the expiration of its original patents, in 1906 and 1909, it entered upon a plan to secure control of raw materials which might be used by any possible competitor. It secured agreements with three of its most profitable competitors not to supply bauxite to other producers or manufacture aluminum for periods of forty and fifty years. It undertook to tie up the principal waterpower companies in North America so that no competitor could obtain electric power for the manufacture of aluminum. This it succeeded in doing.
For example, on August 14, 1899, Alcoa entered into a contract with the Shawinigan Water and Power Company of Shawinigan Falls, Quebec, Canada, for the supply of 
power. Like its other contracts for power, this contract contained a restrictive covenant by which the power company agreed that it would not use its power for the manufacture of aluminum, or sell power to any manufacturer of aluminum other than Alcoa. Section 12 of the contract provided:
In consideration of t, e agreement by Aluminum Company of America that the power generated by the water privileges granted by this contract shall be used for tile purpose of the manufacture of aluminum and such purposes as may be incidental thereto, and for lighting and heating the premises of said second party and for no other purposes, the Shawinigan Water and Power Company of Shawinigan Falls, Quebec, Canada, agrees that it will not furnish water or water-power to any other person, corporation or organization engaged in the business of manufacturing aluminum and further that said Shawinigan Water and Power Company itself will not use water or waterpower for or in connection with the business of manufacturing aluminum during the continuance of this contract, or of any renewal thereof, it being the true intent and meaning hereof that with respect to the manufacture of aluminum the rights to be granted and conveyed unto the Aluminum Company of America shall be sole and exclusive.
Section 16 of the contract gave to this restrictive covenant the status of a covenant running with the land of the power company. The contract was to continue for a period of ten years, subject to successive renewals for periods of ten years. Subsequent contracts renewed this covenant, and it is still in effect. Contracts of exactly similar sort were made with Niagara and other power corporations, so that eventually Alcoa controlled power everywhere along the St. Lawrence in Canada and the United States. One might properly remark that Canada's Combines Investigation Act is a dead letter, so far as these giant monopolies are concerned.
As early as 1896 Alcoa entered into an agreement with its only competitor, a Swiss company, to divide the world markets between them. But by 1901 French and British companies had made their appearance so that it became necessary to enlarge the cartel. In order to get around the United States Sherman anti-trust law, the Alcoa formed a Canadian subsidiary, the Northern Aluminum Company, and from that day to this it has endeavoured to circumvent United States laws with respect to trusts and cartels by using Canadian corporations.
From 1919 to 1925, George D. Haskell, president of the Baush Machine Tool company, endeavoured to find ways and means of manufacturing his own aluminum. He got in touch with James B. Duke, the owner of the power plant and water power on the Saguenay river. As soon as Arthur Vining Davis, the president and financial genius of
[DOT] .

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the Aluminum Company of America, heard of it, he saw Duke and negotiated a merger with him whereby Duke became a partner and one of seven directors with the ownership of fifteen per cent of the common stock and one-ninth of the preferred stock. Duke had paid $1,000,000 for the Saguenay power sites which the province of Quebec had alienated for $40,000. The market value of the stock which Duke received for the Shipshaw or lower Saguenay site was approximately $40,000,000. He retained the upper site which Duke-Price Power had already developed.
Duke died in 1925, and in 1926 Alcoa acquired 53i per cent control of the Duke-Price Power Company which owned the upper development and immediately entered into a fifty year contract with it to take 100,000 horse-power at a total cost of $60,000,000.
By these measures all contemplated competition was eliminated.
I do not propose to go into the methods by which bauxite deposits were acquired in the United States, British Guiana, Dutch Guiana and elsewhere. Suffice it to say that similar, methods were followed, and successfully.
An interesting sidelight of the character of the economic barons into whose hands the government's policies are delivering Canada, is shown by the manner in which they succeeded in obtaining a large block of shares willed by Charles M. Hall, the inventor of the process, to the American Missionary Society. Within a few months of acquiring the stock from the beneficiaries at $5 a share, it was selling at $79 a share. The earnings on this stock that year, 1925, was $13.22 a share. Davis acquired over
61.000	of these shares for himself, and some
49.000	of them went to Duke in part payment of the power site.
Meantime in 1924 the Northern Aluminum Company, the subsidiary of the Aluminum Company of America, had become known as the Aluminum Company of Canada. Its business had expanded into the making of aluminum wire and sheet and it owned bauxite deposits in British Guiana. With the acquisition of the Duke-Price Power Company it changed the name of the Duke-Price Power to the Saguenay Power Company Limited and entered, as I have said, into the fifty-year contract to take power at a total cost of $60,000,000. This contract was guaranteed by Alcoa.
Now the stage was all set for the creation of a world cartel into which Alcoa could not enter on account of the United States antitrust laws. It remembered that in 1912 the United States Department of Justice had ordered the dissolution of the agreement with
the Swiss company. But it also remembered that through its subsidiary, the _ Northern Aluminum Company, it had entered into agreements designed to control sales outside the United States. As a result it succeeded at once, in 1912, in raising the price of aluminum in the United States from 17 cents a pound to 26-46 cents a pound. After the world war it entered into various informal agreements and understandings to restrict competition and maintain high prices. As can be established from the records, between 1921 and 1927, it supplemented these agreements by acquiring producing facilities in the home markets of foreign producers, notably Norwegian.
In 1928, the directors of Aluminum Company of America decided that they were sufficiently strong to dominate the world. Because the Sherman anti-trust law made their own entry into a world cartel dangerous, they decided to form a new company under Canadian law. Thus they created Aluminium Limited and at once transferred to it thirty-three of its foreign subsidiaries, including the Aluminum Company of Canada. How closely these companies remain one is shown by the ownership of stock in them. The latest report I have been able to secure, that of 1938, shows that 81 per cent of Alcoa stock is held by the ' people who also hold 83-93 per cent of the stock of Aluminium Limited which now became the parent company of the Aluminum Company of Canada, which it owns fully, and thirty-two other companies outside the United States. It is of the parent company, Aluminium Limited, that our minister at Washington, Mr. Leighton McCarthy, is a vice-president and director at the present time.


Clarence Decatur Howe: No.


Major James William Coldwell: Yes, excuse me.


Clarence Decatur Howe: Not at the present time.


Major James William Coldwell: Unless he has resigned in the last three weeks.


Clarence Decatur Howe: He resigned last February.


Major James William Coldwell: That was from the
Aluminum Company of Canada. I asked Mr. McCarthy when I was in Washington three weeks ago the direct question as to whether or not it was true that he was a vice-president and director of the parent company, which I had miscalled the Aluminum Company of the United States, but which I should have called Aluminium Limited, and Mr. McCarthy's reply was this: "Yes, I am a director of Aluminium Limited, and I am intending to remain a director of that company."


Stanley Howard Knowles: And vice-president.
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Thomas Miller Bell: 
Clarence Decatur Howe: To what agreement does my hon. friend refer?


Major James William Coldwell: The general agreement with the Aluminum Company for the expansion of their plant, for increasing their electric power, the agreements regarding depreciation allowance, the price of aluminum-the several agreements.
To argue that because Sir Stafford Cripps or someone else expressed appreciation of the
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quality and quantity of their product, the contracts and agreements are sound is to deceive oneself and the country. I have no doubt their product is good. I have no doubt the quantity is satisfactory. I have no doubt that the material is vital, but I am not overlooking the fact that they dictated their own terms. Look again at the letter written by Mr. Jesse Jones on March 24 last.


Gordon Graydon: What year?


Major James William Coldwell: This year, 1943. He says:
We asked the Aluminum Company of Canada to reduce their price from 17 cents to 15 cents, notwithstanding we had contracted to pay 17 cents. The company was reluctant to reduce the price since they were getting 17 cents from the British and Canadian governments.
Nothing in this to merit any thanks from Britain or from Canada. -On the contrary, it seems clear they were out to get all the traffic would bear, while Canadian boys died across the seas and our people at home worked and saved to prosecute the war.
But there is another and, in the long run, a more serious aspect to this situation. I have shown, I think conclusively, that we are dealing with a group of industrial barons whose chief aim has been to make money and obtain world-wide power. Yet it is to this organization the several governments have given, or advanced, over $300,000,000 in one form or another during this war. It is easily the greatest financial grab ever pulled off in the history of Canada.
Cost-free new aluminum facilities, and the power plant at Shipshaw will do two things: (1) enable them to control more effectively than ever the light metal industry of the world and (2) undersell publicly-owned power in the northeastern part of North America.
I have shown the interest of the Aluminum companies in electric power at various stages of their development. From the evidence, there can be no doubt whatsoever that the effective control of power and power development was a weapon used to prevent the establishment of rival companies. Thus their complete control and war-time development of the whole of the power resources of the Saguenay river are ominous from that point of view.
In spite of various attempts on the part of the Hydro Electric Commission of Ontario to obtain international agreements for the development of the St. Lawrence, nothing has been done. The dominant interest in the St. Lawrence area has been and is-including Beauhamois-the Aluminum Company, whose agents have endeavoured at all times to
l Mr. Coldwell.]
block public power development on the river. But this phase will be dealt with by one of my colleagues.


Joseph-Arthur Bradette: The hon. member has spoken for fifty minutes.


Thomas Miller Bell: I should like to finish if I may, Mr. Chairman.
Some hon. MEAIBERS: Go ahead.


Major James William Coldwell: I do not propose now to deal with the labour aspects of this company's activities. They can be dealt with at another time. Suffice it to say, such relations have often been both scandalous and inhuman. Alen in the pot room rarely last long amid the poisonous fumes, and the labour turnover in that part of the plant is appalling. Cheap labour, cheap power and high monopoly prices for their product have brought the Aluminum interests untold wealth and economic power.
Now I think I have proved what I intended to prove:
1.	That the price we are paying for aluminum is a monopoly price,, substantially set by the world cartel in 1931, and out of line with the actual cost of production.
2.	That the information given to this house on March 23 was not in accordance with the true facts, because, as the minister now points out, he did not know what the facts were.
3.	The minister also denied that the $68,500,000 was an advance, a balance of which might be cancelled and the Aluminum Company thereby relieved of the balance.
Air. HOW'E: I did not say it was not advanced but it was not for the Shipshaw development. It was advanced to build pot rooms for making the aluminum.


Major James William Coldwell: The minister will find that he said that it could not be cancelled.


Clarence Decatur Howe: The cost of the pot rooms cannot be cancelled. The other can.


Major James William Coldwell: I was going to draw attention to the letter of Mr. Jones in which he says that the contracts make provision for a fixed basis of cancellation.


Air. MacINNIS:: Is it Jesse Jones or Jesse James?


Major James William Coldwell: Jesse Jones. To go on with my point:
4.	The minister stated that all aluminum produced in Canada is sold at the same price whoever buys it. Mr. Jones' letter states that.

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there are two base prices, fifteen and seventeen cents. I would ask the minister to tell us the prices actually paid.
5.	The electric power development, which was paid for by the government in large measure, in fact wholly if you take the deal as a whole, menaces the future of publicly-owned hydro electric enterprise.
I am asking if the minister will table all the contracts made with the company on behalf of the Canadian, British, Australian and United States governments so that we may see what is in them.
I have placed the facts before the committee without invective, I am certain without exaggeration, and I know without misrepresentation. These are the facts as I have accumulated them. I have got them first hand from first-hand sources. I have no doubt that there are certain people who know the people I visited when I was in Washington and know the offices where I got my information. I assure the committee that my information is authentic and gathered from those who were able to give me the information. I ask, is there an hon. member who will dare now to rise in his place and say that the deal with this giant unit of an international cartel is not, without exaggeration, a grave danger to the country and a public scandal?
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.


Clarence Decatur Howe: The hon. member for Rosetown-Biggar (Mr. Coldwell) made certain remarks about the aluminum contracts, for which he suggests the department has been responsible. I wish to say just a few words in that regard, and I will give the facts asked for at a later sitting.
I think we will all agree with regard to the importance of aluminum in this war. We know that, at the time the first contract was being made, the women of Britain were delivering up their pots and pans, in order that aeroplanes might be manufactured to save the battle of Britain. I am happy to say that Canada was able to make a very substantial contribution of aluminum at that time. Had we not been able to do so, I think it is possible that the battle of Britain, instead of being won, might have been lost. We know the importance of aluminum to-day.
Without aluminum the manufacture of combat aircraft is impossible. We know that Canada's tremendous contribution of aluminum has made possible the great expansion in the production of aeroplanes, not only in Britain and in the United States, but in this country as well. That I think has been of very great importance to the war effort, and therefore no one in this chamber will disagree with me when I say that Canada was in duty bound to provide all the aluminum it could, and to take every step that could be taken to that end.
With that premise, we can examine the aluminum contracts. Let me say that the Department of Munitions and Supply has been fighting one battle and one battle only, namely, the battle against the axis. It has not been fighting a battle against trusts and combines. It has not been fighting a battle for one industry as against another, or for one province as against another. It has been trying to mobilize the industrial resources of Canada for the most effective battle against the axis.	_	_ _
We have heard in great deail that Aluminium Limited, the parent company of the Aluminum Company of Canada, is a combine. I daresay that is true. It has been a combine^ for a great many years, and I presume it is a combine to-day. But whether it is a combine or not, the government has not had time to take up a war against any combine, even though it were inclined to do so. As I say, we have been fighting one war, namely the war against the axis, and we have mobilized Canadian industry, as it was at the outbreak of war, for the purpose of fighting the axis. As a matter of fact, we have tried not to use the excuse of the war for changing the competitive position of any industry in Canada. Every industry has been treated exactly the same as any other. If any industry has come to the Department of Munitions and Supply and said, "We are capable of producing more of any article required for war than we are doing at present; these are our plans for doing so," we have examined the proposal very carefully, and if it could be fitted into the pattern being followed by the department for expansion we have encouraged that industry to expand.
We have done that for every industry. We have not singled out a few industries and said, "We will expand you, but your competitor will have to stay as he is." Any industry that has had the desire and the ambition and courage to expand to meet war needs has been encouraged to do so by my department, and perhaps financially assisted to do so.

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Stanley Howard Knowles: May I remind the minister that there is no competitor in this case?


Clarence Decatur Howe: Quite so, and there never was a competitor as far as Canada is concerned.


Daniel (Dan) McIvor: If you had not this aluminum, what would be the result in the production of equipment?


Clarence Decatur Howe: There would be no aeroplanes, or fewer aeroplanes. As to the dealings of the Department of Munitions and Supply, it has been pointed out that Alcoa, the Aluminum Company of America, was the original company on this continent manufacturing aluminum. It has been pointed out that the Aluminum Company of Canada was organized as part of the Aluminum Company of America. It has also been pointed out that at a certain stage in the development of the aluminum company, the parent company was established in Canada, and that the Aluminum Company of Canada and certain foreign companies manufacturing aluminum were combined under the aegis of Aluminium Limited. There is no question about that.
I might point out that in farming Aluminium Limited as a Canadian company, subject to Canadian laws, and transferring the Canadian holdings of Alcoa to Canada and placing that company under Canadian law, a step in advance was taken as far as Canada is concerned. I think we will agree that any company that is Canadian, subject to Canadian law, is a better citizen of Canada than a company "which is merely a branch of a United States company; obviously a company having its head office in another country is not subject to Canadian law to the same extent. However, I may say that so far as I could follow the remarks of the hon. member before the dinner recess, he was quoting from evidence produced by Thurman Arnold in his investigation of the Aluminum Company of America.
Thurman Arnold of course had a great reputation as a trust-buster or of a breaker of combines. Mr. Arnold, as special prosecutor for the government of the United States, conducted a case against the Aluminum Company of America which was in the courts of the United States for more than three years. I am sorry I have ndt refreshed my memory about the details of the prosecution, but I recall that over 300 charges were brought against the Aluminum Company of America. After an exhaustive inquiry which covered three years, and reams of evidence, the court gave its decision, finding the Aluminum Company of America not guilty on every charge laid by the United States government. So 
much for the charge that the Aluminum company is a trust and in combine illegally with the aluminum companies throughout the world. I simply state that for what it is worth, but once again I say that the Department of Munitions and Supply has not been conducting a war against combines. It has taken industry as it found it, has tried to get the greatest production possible out of industry, and its purpose is to leave industry in exactly the same competitive position as at the outbreak of war. After the war, under normal conditions, if any government desires to proceed against Aluminium Limited, or against Aluminum Company of Canada as a combine, that will be perfectly in order, but I think every hon. member will agree with me, that we should not use the excuse of war to do something that we cannot appropriately do in peace time, as far as attacking the competitive position of any industry in Canada is concerned.
As to the purchase of aluminum, the first transactions between Britain and the Aluminum Company of Canada were carried out without Canadian intervention. The Ministry of Aircraft Production had, and still has, a representative in the United States. It was that representative of the Minister of Aircraft Production who conducted the negotiations with the Aluminum Company of Canada which led to the first British contract. The United States contracts were worked out by the Metals Reserve Corporation, or whatever is the appropriate agency of the United States government, direct with the aluminum company. I have never seen the United States contracts and have not a copy of them. It was news to me that those contracts mentioned two prices. I know that the price change in the United States took place while the contracts were under negotiation. When the first United States contract was drawn, the price of aluminum in the United States was seventeen cents a pound, and the first contract between the United States and the Aluminum Company of Canada mentioned a price of seventeen cents a pound. While a second contract was being negotiated the price of aluminum was revised in the United States, owing I think largely to the fact that the United States government had paid for the building of plants which manufacture aluminum in that country, and had demanded a reduction in price on that account. In any event, at that stage the base price in the United States was reduced to fifteen cents. By that time I had been appointed the agent of the British government in its aluminum transactions. I immediately demanded a reduction in the price of aluminum to Canada and to Britain, to correspond with

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the reduction to the United States. That demand was granted, and prices were revised accordingly to Britain, Australia and Canada.
Canada, for her own purposes, has not required expanded facilities. We were entitled to the facilities which were in Canada when the war broke out, and to date we have not required more aluminum than those original facilities would provide. Therefore Canada has not contracted with the Aluminum Company of Canada for additional ingot capacity.
We have been told repeatedly that Canada has financed this expansion with its own funds. That is not true; we have provided no money whatever to the aluminum company for expansion.


Mr. BLACKMORE:: Would the minister permit a question?


Clarence Decatur Howe: Yes.


John Horne Blackmore: What expansion has he in mind when he says "this expansion"?


Clarence Decatur Howe: Every expansion. Everything that the aluminum company has built in Canada since the war began.


John Horne Blackmore: I was just trying to gather what the minister meant. I understood him to say that they did not need to expand-


Clarence Decatur Howe: -to supply the Canadian
demand.


John Horne Blackmore: That there was already sufficient expansion?


Clarence Decatur Howe: They have expanded vastly,
of course, to supply the demand from the United States and from Britain.
We have provided a certain accelerated depreciation. I will divide that into two stages. One is the special depreciation for the expansion required to fill the United States order for aluminum. The United States order was placed with the knowledge that no facilities existed in Canada to fill the order, and that these facilities must be constructed, and constructed as part of the price of the aluminum which would go to the United States. The contract was drawn with the understanding that a loan would be made by the United States sufficient to pay for the pot rooms and other manufacturing facilities, needed to turn out the aluminum required by the United States within the time mentioned in the contract.


Thomas Miller Bell: May I ask the minister a question?


Clarence Decatur Howe: Yes.


Thomas Miller Bell: Was there any restriction in fact regarding that loan? It could be used for anything?


Clarence Decatur Howe: I think there were no restrictions placed on the use of that loan. That, of course, is a matter between the United States and the aluminum company; but the amount was the amount required to pay for the pot rooms, and alumina plants and all other facilities which are required to manufacture aluminum in ingot form.
That contract could have been written differently. It could have been written that the aluminum would be purchased for ten cents, and the equivalent of five cents could have been paid the aluminum company as capital to create the facilities which would manufacture aluminum. In that event there would have been the investment in Canada of so many dollars in capital facilities, which of course would not have 'been taxable, and there would have been the sale of aluminum to the United States at 10 cents a pound, the profits on which would have been taxable. Had the transaction been framed in that way there would have been no criticism whatever in this house. That type of investment in Canada has been going on for many years, and has been very welcome as a source of capital for industrial purposes in this country.


Stanley Howard Knowles: Does the minister feel
that there would have been profits at ten cents a pound?


Clarence Decatur Howe: I will cover that presently. You are all set to make a speech; let me continue mine. That would not have been as valuable a transaction for Canada as the present transaction. It probably would, indeed it must, have taken that form had we refused to allow accelerated depreciation on that part of the purchase price which went into fixed capital. The difference would have been this: Had the deal been organized in that way, the Aluminum Company of Canada would own an asset which they would have been allowed to depreciate over the'years; as it is, they own an asset which is fully depreciated. In other words, any dollar of earnings that comes from that asset is taxable as income by the Canadian government.
Let me point out to hon. gentlemen^ that, when anyone invests money in building a manufacturing plant or any other industrial enterprise, he has an obligation from the state that that capital will be returned to him over the years as depreciation. That is a very valuable concession granted him by the state. If you look over the balance sheets of industrial companies, you will find that each year
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there is a deduction before taxation of perhaps five or six per cent of the original capital in the form of depreciation. Through accelerated depreciation, the new aluminum facilities will exhaust all rights to depreciation. That write-off can never occur in the future. Therefore, as I say, any earnings which will be made by the aluminum company from these facilities will be taxable in full. So that when we compare the deal which my hon. friend would say would be quite proper-that is, that five cents a pound would be paid by the United States as capital invested in Canada, and the aluminum sold at ten cents a pound- the position of Canada would have been vastly worse as far as taxable income is concerned than is the present situation.
We come now to Shipshaw. I noticed that my hon. friend did not make this mistake in his discussion this afternoon, but in the United States it has been stated definitely that the money which paid for the Shipshaw development was loaned to the aluminum company by the United States. As a matter of fact, the Shipshaw transaction was worked out well before the United States became a purchaser of aluminum in Canada. It was quite obvious that we would be very short of power for war purposes in the Quebec area. The Aluminum Company of Canada, as I have said before, had partly completed development at Shipshaw on which there had been spent some $35,000,000 and which was producing some 200,000 horsepower. Before the war it was estimated that the expenditure of another $35,000,000 or perhaps $38,000,000 would complete the development and provide a potential one million horsepower at that location.


John Ritchie MacNicol: Over a, period of time.


Clarence Decatur Howe: Well, as fast as it could be built. It is not finished yet; they are adding new turbines right along; but the dam was there; the construction was there for a million horsepower, and by May of next year the project will be producing a million horsepower. The potential horsepower was needed. It has been suggested that this development was carried out to block the St. Lawrence development. Let me remind hon. members that Canada is committed to the St. Lawrence development; that it has agreed with the United States to proceed with that development, and the St. Lawrence development was blocked not in Canada but in the United States. An exchange of notes took place which put us definitely on record as being willing and anxious to proceed with the St. Lawrence development. Had an agreement been completed, perhaps we would not have 
been anxious to proceed with Shipshaw; but not having the St. Lawrence development, we could not win the war with its help. We had to have a development that would give results, and therefore we encouraged the Shipshaw development. It has been suggested that we allowed an accelerated depreciation on the entire cost of the Shipshaw development. We did not; we allowed accelerated depreciation on sixty per cent of the cost.


Thomas Miller Bell: I think I said that.


Clarence Decatur Howe: Perhaps so. That percentage was worked out very carefully. Construction costs were soaring at the time. The cost of turbines, which had to come largely from the United States, had more than doubled when the agreement was made. It was obvious that labour was becoming more difficult to obtain, and we were pressing the aluminum company to do the job in half the time they had intended to take when their estimate was made up. After going very carefully into all the factors and studying the question for months-we had engineers studying the possibilities-we decided that if we were to ask the aluminum company to carry out that expansion in war time, in a period of high prices, we were justified in reducing the charges on the plant to forty per cent of the cost, allowing the other sixty per cent to be written off by the company out of war-time profits. That transaction, as I say, was a Canadian transaction; the United States had nothing to do with it. The transaction had been concluded before the sale of aluminum to the United States took place, and the Shipshaw development should not be involved in any way with the transaction that has been under discussion here this afternoon and evening.
There was some other phase of my hon. friend's discussion with which I intended to deal. I will say this, that the Aluminum Company of Canada have carried out their contracts to the letter. They have delivered every pound of aluminum they have contracted to deliver, at the time for which the aluminum was promised. They have shown tremendous courage, taking on great liabilities, in carrying out the expansion that has been required by the united nations for their war programmes. It has been suggested here that the earning power of the aluminum company has been expanded enormously. If that is so, I suggest that it should be reflected in the market price of the shares of the company. Those shares now are exactly the same shares the company had outstanding before the war; they are bought and sold freely on the Montreal stock

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exchange. Perhaps the fairest value of any security is its current quotation on the stock exchange.


Major James William Coldwell: What were they last year? They were 65.


Clarence Decatur Howe: True. What were they in 1939? They were 140. They are about 120 to-day, but before any war expansion took place they sold at 140 and kept around that level fairly consistently. Since the expansion has taken place, the shares have dropped steadily, until about a year ago. In recent months there has been buying that has brought them up to the present price which, as I say, is about 120. I had occasion to look up the price range; I am sorry I have not the figures here, but I would say simply that those who sell at 120 evidently think the company has less earning power to-day than it had in 1939, while those who buy at 120 probably think it is nearly as good as it was in 1939. But there is no class of buyer who seems to believe that these shares should be bought in large blocks at this time, at rising prices.
Therefore, in discussing the relations of the Department of Munitions and Supply with the Aluminum Company of Canada, I think I can say that the aluminum company have given value for anything that has been invested in this country by other governments. They have sold aluminum at the cheapest price at which it has been sold by any country. Incidentally I may say that the aluminum company in England is selling its aluminum at some seven or eight cents more than the price at which it is being sold in Montreal to-day. I think that is all I have to say at the moment; I shall look over Hansard and perhaps amplify my remarks to-morrow.


Angus MacInnis: What is the actual price Canada is paying for aluminum?


Clarence Decatur Howe: The base price for aluminum to-day is fifteen cents, which may be increased or decreased according to increases or decreases in the cost of wages, transportation and power. The big item in which the cost has advanced is transportation. In the old days bauxite was brought in ships from British Guiana to Ha Ha bay on the Saguenay, and the cost of transportation was very low. To-day it is brought from British Guiana to an island in the Caribbean; there it is transhipped and brought to any United States port from New Orleans to New York. There it is transhipped by rail, and pays rail freight to the Saguenay. That, of course, has added enormously to the transportation costs.


Angus MacInnis: Would the minister give the adjustment?


Clarence Decatur Howe: I can give the last adjustment. The last adjustment was about two cents over the base price. It is the same to all p0wers-to the United States, Canada and England. I will find the effect of the escalator clause in each of the years to which it has been adjusted. It is fixed by Price, Waterhouse and Company, who have been appointed referees for all buying countries, as to the actual differential between the base cost and the present day cost. I might say that the price of power has gone down, the price of wages has gone up slightly, and the price of transportation has gone up enormously.


Stanley Howard Knowles: When the minister said that later on he would give the facts asked for by the hon. member for Rosetown-Biggar, did he mean he would table the contracts?


Clarence Decatur Howe: Certainly, such contracts as I have. I have not the first British contract, I never had it. I have not the United States contracts.


Stanley Howard Knowles: The minister will table the British contract?


Clarence Decatur Howe: I cannot do that; we are under agreement with the British government not to do so. I will table any Canadian contract I have.


John Ritchie MacNicol: Mr. Chairman, the hon. member for Lake Centre (Mr. Diefenbaker) made an excellent speech in connection with the general productivity of industry under the supervision of the Minister of Munitions and Supply. The hon. member for New Westminster (Mr. Reid) gave the committee an informative address in relation to iron and steel production. The hon. member for Rosetown-Biggar (Mr. Coldwell) delivered another informative address on the subject of aluminum, a subject concerning which the minister has spoken for the last half hour.
For the next half hour I shall speak on the subject of oil. Before commencing any detailed discussion I would point out to the minister that while in his opinion it is not the business of the government at the present time to take up questions in connection with combines, the United States government does. They have had exhaustive inquiries and investigations by senate committees into the supply of both rubber and oil. And from what the hon. member for Rosetown-Biggar has said I presume they have had an exhaustive inquiry into the production of aluminum. I believe it is this government's business-any government's business-to see that the people are not exploited. I am not saying that they
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are. I am going to wait until other arguments are offered along the lines of those given to-day. But I maintain it is the government's business, in spite of the war to prevent the exploitation of the Canadian people.
As I said on April 14, 1943, I was greatly depressed by the minister's speech on the subject of oil. I had built my hopes on the belief that the time was not far distant when Canada would be independent of any outside sources of oil, both economically and defensively; I had built up that belief in my mind from the exhaustive reports issued by the government's engineers. But I must confess I do not believe the minister-well, I will not say that I do not believe-rather, I have not been convinced that the minister himself is in favour of Canada's becoming independent, in the matter of oil production.
The hon. member for Rosetown-Biggar said that the price of aluminum is much too high. I am convinced that prices of oil and gasoline are altogether too high if, as is said by the engineers of the Department of Mines and Resources, we have-as they have shown -inexhaustible raw tar-sand resources from which to produce oil.
On February 18, 1942, the hon. member for Bow River (Mr. Johnston) asked a question respecting the production of oil from tar sands. On that occasion the minister said:
lit indicates, however-
Referring to a report the minister had.
-that the location of the sands and the possibility of development is too remote to be of any great use in this war.
The war has been going on now for almost four years. We were in bad shape during the first year. What have we done since? What single thing have we done to relieve the oil shortage situation in this country? So far as I can see, extremely little has been done.
When on April 14 the minister opened his speech he said something I did not like, one, two, three:
There seems to be an erroneous idea in the minds of many regarding these tar sands. Whether these ideas are due to propaganda, supported by wishful thinking, I do not know.
It is neither propaganda nor wishful thinking upon which I base my arguments in connection with oil production. I base what I say upon thousands-no, I will not say thousands-but upon many miles of hard travel and survey, far into the Athabaska area. I have surveyed, myself, the tar sands there, and have carried out those surveys in the company of some of the greatest oil geologists in the world. One of them is very close to the top in Washington, and anything I have said

about tar sands and the possibilities of the production of oil has been 'based (1) on the reports issued by the government itself-and in my judgment, the Department of Mines and Resources has some of the ablest engineers in America, barring none, so far as understanding the development of oil from tar sands is concerned-(2) on reports of the United States bureau of mines, and the opinions of some of their best engineers and (3) my own observations, in company with engineers who travelled through that area. So that anything I say is not based on wishful thinking or propaganda. So far as I am concerned I am above propaganda. Others may speak for themselves, but I have long been convinced that the time has come for Canada to have a national oil policy, first, to make herself economically independent of any outside sources of oil supply and, second, to make us independent defensively.
What position are we in? If we were attacked by one of even the small nations, a nation which would have command of the air and oil supplies, we would be helpless. And we will continue to be so unless we wake up to the production of oil in Canada in a big way. There is no other way to save our people from the constant threat of lower gasoline rations, the constant threat to the owners of domestic oil-burner equipment, and the constant threat to our defence position.
I have already thanked the minister for sending investigators. However, I would not have sent the same investigators-and it will be understood I have nothing whatever to say against them. They were fine men, but I would have sent engineers from the Department of Mines and Resources. They were by far the better qualified.


Clarence Decatur Howe: They were up there, too.


John Ritchie MacNicol: They had surveyed the
area for thirty years, and they had drilled holes by the hundreds. Doctor S. C. Ells had traversed over two thousand miles through that area, drawing base lines. He has investigated numerous outcroppings, and had tested the sands in many places. In my judgment there is no better authority on tar sands than Doctor Ells.


Clarence Decatur Howe: Doctor Ells was in charge of the work there.


John Ritchie MacNicol: I was there, and I know
how little Doctor Ells had to do. I was there, and I make my own investigations. The engineers had been there for one month when I arrived, and up to that time as far as I know, they had little contact with Doctor Ells. If

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the minister says they did have, then perhaps a parliamentary investigation will show just how little Doctor Ells had to do in carrying on the investigation of the tar sands area last summer.
I want to make statements which are based only on what I have seen with my own eyes and what I know from my own investigations.
I am not much for hearsay. I accept Doctor S. C. Ells' statement. In 1936 he made a statement to a mining engineering convention in Edmonton when he said that after exhaustive inquiry over many years it was his judgment that there were over 500 million barrels of oil available from the tar sands by open-cut method. This is mining that can be carried on *without too much trouble by removing the amount of top soil or none at all, and then [DOT]excavating the tar sand.


Clarence Decatur Howe: After 1936 a mill was built [DOT]costing around a million dollars and used to [DOT]develop this oil.


John Ritchie MacNicol: I am coming to that.


Clarence Decatur Howe: In 1942 the government tried to accelerate the inquiry. My hon. friend was in the house from 1930 to 1935.


John Ritchie MacNicol: I am coming to that.
That is what Doctor Ells said in 1936. Then last year he wrote an article for the June issue of the Canadian National Geographic magazine in which he stated that after further investigation, that would be between 1936 and 1942, he believed that a billion barrels of oil could be extracted by the open-cut method. The report presented by the minister is based on a six months investigation. I believe that during the first month of this investigation the proper equipment was not at hand to bore holes. Later on they used, I believe, Doctor Ells' equipment. The report submitted on April 14. 1943, stated in effect that approxi-mateb' 40 million barrels of oil were available by the open-cut method at Steep Bank and on the Horse river. Forty million barrels is a mere bagatelle to what should be there if the reports issued by the Department of Mines and Resources after thirty years investigation are correct. They should be correct. The Department of Mines and Resources should not send out reports based on thirty years investigation that are not correct. I, for one, believe them to be correct. I believe that there is a vast quantity of oil up there. As Doctor Ells says, there are a billion barrels which could be taken out by the open-cut method. And if some engineer should come along with an in situ method of extracting oil in those oil-sand areas where there is considerable top soil, Doctor Ells says that another
hundred billion barrels could be obtained. Surely someone will come along some day with a method which will save this country from being dependent on other countries for its supply of oil. With the proper method we would have available a hundred billion barrels, in addition to the billion barrels which Doctor Ells says can be taken out by the open-cut mothod. Doctor Ells is backed up by the mines and resources department engineers. I have talked to a number of them who have carried on investigations out there.
I made two trips to the Fort McMurray tar-sands area in 1941. On the first trip they were having difficulty with the mining. The sands were planed off with a revolving planer, and every now and then the knives of this planer would strike against a nodule, a round, heavy hard lump of the tar sand, and would break off. On the second trip they had adopted the powder-blasting method, and when I was there last summer, my third visit, they were still using this method and were finding it quite satisfactory. The report tabled by the minister states that as far as mining is concerned, it is very satisfactory. They have overcome one of the difficulties suggested by the minister.
Another argument against the development of the tar sands was that the extraction method is not satisfactory. As I said before, the engineers sent up last summer were good men, but I do not think they were there long enough to be able to make a report equal to that -made by the mines and resources department after thirty years. But even they stated that the method employed to separate the bitumen from the sand in the Abasand plant was satisfactory. We were told that two things were not satisfactory: First, mining -they say it is; second, the separation method-they say it is.
If these two things are satisfactory, and if the mines and resources department statement that there are inexhaustible quantities of oil in these sands is correct, I should like to know why the minister then fired the company which had been operating this plant. This company had done the pioneering work for the last few years; they had suffered everything but death in trying to keep the plant in operation. There may have been a shortage of money, and I presume there was or else they would have had a better plant. I should like to know why they were fired. The hon. member for Rosetown-Biggar has been talking about a combine. Whom did the minister send up there to produce oil? He did not send outside engineers; oh, no. He sent members of the Canadian Oil company. He made the president of the Canadian Oil company the president of the

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reorganized Abasand company. He made the vice-president and general manager of the Canadian Oil company the vice-president and general manager of the Abasand company. Two of the directors of the reorganized Abasand company are directors of the Canadian Oil company.
We want to get out of the hands of the big fellows. We want oil produced in this country and we want it produced at the right price. We have long paid too much for our oil; we have long paid far too much for our gasoline. I have nothing to say against these men, but I would feel more confident if the oil companies did not have a thing to do with the development of oil from these tar sands. I would much rather see this carried on by people who are not personally interested in oil.


Clarence Decatur Howe: Is my hon. friend suggesting that the Canadian Oil company is a great international cartel or anything of that sort? It is one of our smaller companies.
Mr. MaeNICOL: I do not suggest that, but I should like to know who are behind the Canadian Oil company. Are they connected with any other oil company?


Clarence Decatur Howe: Not that I know of.


John Ritchie MacNicol: Are they associated with Imperial Oil?


Clarence Decatur Howe: No.


John Ritchie MacNicol: Are the same men not associated with Imperial Oil? Are they associated with Standard Oil?


Clarence Decatur Howe: No.


John Ritchie MacNicol: It will be interesting to find out with whom they are associated. I have no fault to find with them, because they are fine men; but, as I say, I would be better pleased if the Canadian Oil company or any other company producing oil from wells did not have anything to do with the production of oil from these sands. I do not know much about the Abasand people. I met the president only twice and I have not seen him for most of a year, nor have I had any communication from him in that time. What I want to see is oil produced in this country.
I want to see this country released from being dependent upon any other country for its oil. We are told by the mines and resources department that the oil is there, and I take their word for it.
I am not going to say that the method of separation used by Abasand is perfect because I do not know enough about it. On the other hand I have made an exhaustive inquiry into oil, and I was extremely interested in reading 
the report of the United States senate investigating committee into the connection of the Standard Oil company with the production of rubber in Germany. I recommend every hon. member to read thoroughly this report. It tells all about the oil business, too. But I am perhaps a little ahead of my story and I will come back to that later.
The minister said at the conclusion of his remarks on April 14 that every known system had been tried. Let me quote his exact words, from page 2)153 of Hansard:
Every known process has been tried, and to-day I think the fact is that no satisfactory process either for mining the tar sands or for extracting the oil in an economical way has been wholly perfected.
I w'ould ask the minister if the Freeman process has been tried. Prior to 1935-36 the government of the day in Canada, or somebody acting for it, after consultation with Freeman, who is a great engineer and expert in the extraction of oil from low-grade coals and so forth, sent a lot of tar sands to London, where they were tested. I have the Freeman report in my hand. It is signed by himself and says in part:
The actual Freeman extraction method produced a total yield of 36-07 gallons per ton.
That is, from the tar sands which were-shipped over to England.
It goes on:
The oil lends itself easily to refining-
We have been told that it did not.
-and by the transformation refining method would produce motor spirit, lamp oil, lubricating bases and pitch.
That is out of the tar sands, from which he had extracted 36-07 gallons per ton. The-report goes on:
The above sands are surface sands but at a depth of thirty feet and more would in all probability produce as high as 75 gallons of excellent oil per ton by the extraction method.
I have the full story of the Freeman system here and have made careful inquiry into it.
1 should like to know later on if that system has been tried out. If not, then all known systems have not been tried.
I would ask further if the Blumner hydio-genization system was tried. The United States senate report gives an illuminating description of the wrhole oil business. From my studies I gather that in the early twenties a great engineer, Doctor Bergius, whose record I have here, invented the hydrogenization system. He was apparently not able to bring it to the point of operating in a commercial plant, but the great Doctor Blumner perfected the hydrogenization system to work in a commercial plant. Then the great German company I.G.

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Farbenindustrie purchased Blumner patents and plant and proceeded to produce oil from coal. Doctor Blumner then, in collaboration with Doctor Fischer brought out his own Blumner process, which I presume he concluded was an improvement on the system which the Farbenindustrie was using. So far as I can understand, it was what I may call an improved Doctor Blumner process which the German government took over to use in the production of oil for Germany. When the war broke out, Germany was producing less than nine million barrels of oil a year, but they took over the Doctor Blumner process for extracting oil from coal by the hydro-genization method. When war broke out, it was thought that Germany would not be able to get enough gasoline for her war machine, but to-day Germany is producing 150 million barrels of gasoline a year aind1 since they conquered that part of Russia in the Donets Basin, they have built another plant there and are producing over ten million barrels a year there. If Germany can do it, why cannot we? Why should we be constantly threatened with having to throw out our domestic oil-burners which I understand would cost the country not less than fifty million dollars, including the coal-burning equipment that would have to be installed, and we cannot get the coal. If we have the oil resources we should have been producing the oil before this. As I said before, the oil controller has done a good job, but had we appointed an oil producer we could perhaps have dispensed with the services of the oil controller and got all the oil and gasoline for all our needs.
Someone asks what is hydrogenization. Mr. R. T. Haslam, a very great chemist with the Standard Oil company, described it in a very neat way. I quote from his evidence before the United States senate committee, at page 5040:
I want to explain just briefly and simply what hydrogenization is. In principle the process is simple; in practice it is complex.
I have here a lump of coal (exhibiting). I have in this bottle hydrogen (exhibiting). I could show' that it is hydrogen by touching a match to it. If there is no air in it it burns like the Hindenburg burned over Lakehurst, with a tough flame. If there happens to be a little air in it, it explodes. So therefore I will not demonstrate it to you.
The problem is how to get those tv'o together and combined chemically so that when v'e get through we have petroleum in this bottle (indicating). We convert a solid to a liquid. It is a matter of putting coal here (illustrating) plus hydrogen, and coming out with petroleum oil. That is done in complicated apparatus at a pressure of 3,500 pounds per square inch, at a temperature red hot, around 900 degrees Fahrenheit, and in the presence of hydrogen gas.
As I understand it, the hydrogen is introduced and acts as a catalyst and breaks down the molecules of oil in the coal. The oil is separated: from the coal, after the moisture has first been taken out of the coal. The place of the water is filled with other oil. The other oil is then recovered, too, and used over and over again. In his speech on April 14 the minister said the hydrogenization system would cost twelve million dollars. That is a small item. The minister has been doing a big job in many lines industrially, a marvellous job, and I know he could do just as big a job in the oil business if he would.
I appeal to him to go the limit in trying to produce oil in this country. If we cannot produce ample oil from the tar sands-but I believe wre can-we can produce oil from coal. We have lots of coal in Nova Scotia and Saskatchewan and mountains of it in Alberta, from which we could produce all the oil that is required. If we have the will to produce the oil we can lift this country out of the position we are in now and be defensively and economically independent so far as oil is concerned, instead of being under this constant threat of a shortage.
The government could put up a pilot plant and demonstrate that oil can be extracted from coal. All these systems, the Freeman, the Blumner and the I. G. Farbenindustrie extract oil from coal, but they can extract oil from tar-sand bitumen, too.
Doctor Thau was one of the greatest oil engineers in Germany. The German government appointed him to look into the Blumner process, and I have here a copy of his report in which he gives a description of this process. I will quote a paragraph:
Coal in the pulverized state, is mixed with about an equal quantity of oil with high boiling point, and the mixture after having passed through a heat exchanger is under elevated pressure forced through this set of six retorts in a series at comparatively high rate of velocity. The retorts are connected to each other by a pipe leading from the outlet at the top of one of the retorts to the bottom inlet of the next. These connecting pipes are passed vertically through the heated brick setting to prevent a loss of heat of the fuel in its way from one retort to the next.
This report to the German government, I am informed, was the basis upon which they accepted the process to produce oil, and the fact that they are producing 150 million barrels a year speaks volumes in his favour. I would support the minister to the limit if he would introduce a bill, asking for whatever sum of money he might consider necessary for the purpose of putting up a hydrogenization plant in Canada to produce oil either from our coal or from our tar sands or from our torbanites or from our hydro carbons of any kind.
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Clarence Decatur Howe: I appreciate that very much, and it would help me a great deal if I were a little surer of the future of the Progressive Conservative party, and that my hon. friend will be in the house to support me.


John Ritchie MacNicol: So far as I am concerned. I am not talking politics. This is no time to talk politics, and I am a Canadian above everything else.


Clarence Decatur Howe: I know that'. I simply wanted to be sure that you could be in the house.


John Ritchie MacNicol: There is nothing in politics for me. I am here to help my country in every way I possibly can, and when I believe that I have ceased to render some service to the country by my presence here I will quit the job. As I say, there is nothing in it for me, and in fact I would be better off away from here; but I want to help the country. I say, therefore, that I would support the minister if he would bring in a measure that would assist us in producing oil in a big way in Canada. Look at the situation in which we find ourselves to-day. We are purchasing eighty-five per cent of our oil requirements and paying perhaps $10,000,000 a year in exchange. Should we not try to get ourselves out of that trap if we possibly can? If we could produce oil and gasoline on a large scale we would get our gas at a much lower rate and our citizens would have oil to bum in their furnaces. If our gasoline ration goes any lower and if Canadians are compelled to take out their oil-burners in that event-I am not blaming the minister-someone	will be
responsible. Why not let us act upon the reports we have received from our own Department of Mines and Resources, who have been investigating the situation for the last thirty years? In that department we have had some of the best engineers in this field; they have studied the question of oil production, and on the basis of their investigations we are given to understand that our requirements could be satisfied. The minister said that a hydrogenization mill could be put up for $12,000,000 to produce 20,000 barrels a day. If you put up 4 mills that would be around $50,000,000 and that would give you another
60,000	barrels a day. That would make us, together with what is now produced, independent of any other country, both economically and from the point of view of defence.
Something was said about sulphur. In this connection I was alarmed at some of the remarks the minister made because I thought I knew a little about chemistry and the question of desulphurization. He said, with regard to the question of desulphurizing oil obtained

from bitumen and tar sands, that a percentage-of sulphur remained after the process. I had always believed that a wash sulphuric acid" and caustic soda would desulphurize anything that contained sulphur, and for this reason I wrote to one of the great companies of the United States with a view to obtaining some information on the subject. I got in touch with the Phillips Petroleum company. They did not stipulate that I should not quote from their letter and I do not think it would do any harm. The letter is not marked con* fidential. They say:
Although the sulphur in the crude oil as extracted from the oil sands may be as high as 5 per cent, it seems unlikely that there would be more than a few tenths of one per cent in the lighter products, such as motor fuel, manufactured from the oil. High sulphur content in the heavier products, such as asphalt or fuel oil, is of little importance.
The circulars enclosed tell about the process w'hich they use for extracting sulphur from crude oil. I learned also from a number of oil companies that a great many varieties of crude oil contain sulphur. So that the sulphur content is not as serious a problem as it appears to be.
Let me say this in conclusion, Mr. Chairman. In connection with any investigations I have made with regard to oil or anything else and which I have submitted to this house I have had no other object before me than the desire to render some service to my native-land. I have always tried to do that to the best of my ability. As I said at the commencement of my remarks, I have believed, and I still believe, that we have in Alberta a product which we should develop and of which we should avail ourselves. The Turner valley produces 8,000,000 barrels; and if we take all the wells in Canada, including the Turner valley, we have a production of from 10,000,000' to 12,000.000 barrels a year. This means that we must import from 80,000,000 to 90,000,000' barrels more. It is the duty of Canadians, therefore, to make every effort to find somewhere in Canada sufficient oil to make up the difference between what is now produced and what is required; and if we cannot get it from oil wells, of which there are thousands throughout the country, there is no reason why we should not get it from the source I have already indicated. The average oil field produces 9,000 barrels per acre, whereas, according to Doctor Ells, the tar sands contain
70,000	barrels per acre. I suggest to the minister that he should send up some men from the Department of Mines and Resources to investigate and report to him, and on that basis he could bring in a bill for the erection of hydrogenization plants. The minister knows

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a great deal more about this than I do, certainly more than anyone else in the House of Commons does, and I think he will agree with me that we could produce not less than
75,000,000 barrels a year in addition to what is produced by the oil companies, if Mines and Resources estimates are correct. It would not hurt the oil companies, and on the other hand it would save the country and enable the Canadian people to obtain their oil and gas at a lower price than they pay to-day.
I hope that the minister will not take this as offered in the way of criticism. I am speaking as one business man to another, because I realize what a difficult task he has and that he cannot possibly know everything that is going on in the huge department over which he has charge. There are hundreds of details to be looked after and, frankly, I do not see how he does it. Indeed, I hope that it does not break him down. There is no reason whatever, however, so far as I can see, why we cannot lift this country into a state of independence so far as oil is concerned, when you consider that we have ample coal in Nova Scotia, and supplies elsewhere. We have lots of coal in Alberta and Saskatchewan, and it is claimed that there are large deposits of lignite coal in northern Ontario. But before going into the production of oil from coal by hydro-genization, let us try to produce what we can from the tar sands and so do something to lift the province of Alberta out of the depression it has been in. We cannot help our western provinces too much. If Alberta has oil in her tar sands, here is a golden opportunity to put that great province on its feet in supplying Canada with all this additional oil and gasoline from its resources.


Clarence Decatur Howe: I thank my hon. friend for his very helpful and cooperative speech. I would point out that we are trying our best to get some accurate information on the possibilities of tar sands as a source of oil. As my hon. friend says, the area has been under investigation for thirty years. Some years ago a private enterprise undertook commercial development and spent perhaps a million dollars in carrying out that development. Nevertheless last year, when we hoped to complete our investigation, we found that in the whole season not sufficient oil was produced from the tar sands to give us a sample on which to work out the refinery run. Our purpose in sending in a new management, or a partly new management-because the old directors are still associated with the company-was to give a more practical turn to the operations in that field. The reason that the Canadian Oil company was
chosen is that it is a purely Canadian company and the one oil company I know of that believes in the future of the tar sands. I think you must choose an agency which has confidence that a worthwhile result will emerge, and the Canadian Oil company have that confidence. I sincerely hope that before the current season passes we shall have complete operation on the product; we shall then know whether hydrogenation is necessary. It is an expensive process and it may not be necessary. I think by the end of this season we shall know whether it is necessary or not, and what the prospects are for developing the tar sands on a commercial scale.


Stanley Howard Knowles: Members of this group are deeply interested in the subject which was discussed just now by the hon. member for Davenport, but this evening I should like to carry on with the discussion concerning aluminum, which was brought to the attention of the committee this afternoon by the hon. member for Rosetownr-Biggar.
Before I take up the thread of this discussion, may I occupy a minute in adding my tribute to those which have been expressed by other members to the phenomenal progress this country has been making on the industrial front, as indicated so well in the report made on Friday afternoon by the Minister of Munitions and Supply. There were a number of statements he made which we would like to underline, particularly that statement toward the close of his address wherein he pointed out that never again can it be said that it is impossible to produce in Canada anything which can be produced anywhere in the world. I hoped at that moment that he would add a further sentence-I am sure he would agree with this sentiment- namely, that it surely has been demonstrated that if it is possible in time of war for us to produce the things we .need in this kind of emergency, it is equally possible to produce the things we need in time of peace.
This evening the Minister of Munitions and Supply spoke briefly in reply to the address which was made before six o'clock by the leader of this group. Again, as on previous occasions when this matter has been before the house, a good deal was said about the importance of aluminum in the waging and winning of the war. We have said before, and I want to repeat it now, that we agree wholeheartedly with that statement of fact, and we in this group rejoice that it is possible for us in this country to make so effective a contribution toward the winning of the war as it is ours to make, by producing so large a portion of the aluminum needed by the
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united nations. But I insist once again, Mr. Chairman, that this does not justify policies which are against the best interests of the people of Canada, and it does not justify paying-to put it bluntly-too high a price.
When the minister was speaking this evening, it was, I believe, the hon. member for Fort William who interrupted him to ask just what would have happened if we had not produced aluminum in the quantities in which it has been produced in Canada. The interruption, I take it, was designed to emphasize the importance of producing aluminum in this country.. Again I say we agree. Equally we would assert the importance of the producing of food. Likewise we assert the importance of producing the materials of war, and the importance of the contribution made by our men who go into the armed services. But in none of these cases does the government simply sit back and pay the price which those who are offering their services or are producing food or munitions of war ask, or, shall I say, demand. But it is our contention that in the case of aluminum you have not only a Canadian monopoly but a world cartel literally demanding, not only of this government but of the governments of all the united nations, that they pay the cartel's price for material so badly needed in this time of war.
The minister made frequent references to the fact that it is not the intention of the government to which he belongs to seek to change the competitive position of any company in Canada while the war is on. I already drew his attention to the fact that that remark is hardly relevant as far as aluminum is concerned, in view of the fact that with respect to aluminum there is no competition in Canada, or, for that matter, anywhere in the world.
The minister emphasized, and repeated1 it two or three times, that it was not the intention of the present*government to use the war as an excuse to battle combines. I want to make it perfectly clear that we of this group are not to be put in the position of wanting to use the war to advance any particular position that we may hold, though let me not be interpreted for one moment as veering from our absolute opposition to combines of this kind. I do wish to point out to the minister that the position he takes means this, that the aluminum interests are being allowed to use the war as an excuse immeasurably to strengthen their position, and that is what we vigorously oppose. We feel the government is falling down on the job in not being more vigilant in this matter.
I find myself called upon frequently to refer to one of the newspapers in the city from

which I come, the Winnipeg Free Press. In its issue of June 9 appeared another in a long succession of editorials on this matter, most of which was devoted to defending the government and the aluminum company, and to attacking the Cooperative Commonwealth Federation with respect to its charges against the deal. Toward the end of the editorial, however, I found two or three sentences which I should like to quote:
The aluminum company is of course a great international trust. As such it should be watched with vigilance, for we have learned from experience that international trusts can and often do pursue policies which run counter to public interest.
Then, as though to justify the lack of vigilance after suggesting that there should be vigilance, the Free Press adds:
At the moment, however, the aluminum company is doing a tremendous production job in the interests of victory.
Our contention is that this company, in the light of its past record, is more interested in maintaining its control over aluminum as a world monopoly; and that the government, in taking the plausible position enunciated by the minister to-night of not using the war as an excuse to battle against combines, is in effect giving the aluminum interests an opportunity to use the war to strengthen their position.
During the course of his remarks this evening the minister had something to say about the fact that the Aluminum Company of America had changed its set-up a bit, with the result that the former Canadian properties of Alcoa are now under the control of a Canadian company. The minister suggested that it was better to have these under a Canadian company which was under the jurisdiction of Canadian laws, and so on. There are several comments I should like to make in reply to that suggestion; I shall make one or two of them at this moment, and the others will come out as I proceed. First, I should like to point out that Aluminium Limited, which is the parent company and which, according to the prospectus of the Aluminum Company of Canada, owns 100 per cent of the shares of the Canadian company, has nine directors. I note that of these directors four reside in Canada and five in the United States. The principal officers of the company are the president and six vice-presidents. Of these seven officers two reside in Canada and five in the United States. In 1928, when Aluminium Limited was set up, the stock issued at that time was turned over in its entirety to the holders of shares in the Aluminum Company of America, in the purchase of the property of the Aluminum Company of Canada. This means that at that time the ownership of Aluminium Limited,

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which in turn owns 100 per cent of the Aluminum Company of Canada, was identical with the ownership of the Aluminum Company of America. I believe the figures I am about to read were placed on the record this afternoon, but perhaps they should be repeated. As late as 1937 the holders of 81-53 per cent of Alcoa stock-Alcoa, as we all know now, being the short name for the Aluminum Company of America-held 83-93 per cent of the stock of Aluminium Limited.
Now I should like to say a word about the profits of Aluminium Limited, the parent company of the Aluminum Company of Canada. The figures I wish to give are taken from the consolidated statement of profit and loss of Aluminium Limited as published in a report made by that company to the Montreal stock
1.	Gross profit	 $21,674,187
2.	Executive salaries (parent and
fully-owned subsidiary companies)	   451,432
3.	Provision for Canadian income
and excess profits taxes...	2,602,397
4.	Provision for income and excess
profits taxes other than Canadian	 1,931,962
5.	Provision for depreciation and
depletion	 3,651,529
6.	Net Profit for the year transferred to earned surplus..	11,384,268
7.	Totals of amounts in items 5
and 6 above	 15,035,797
I should* 1 2 3 4 5 6 7 1 like to make some comment in connection with the. figures I have just given. First, as one might expect, the gross profits mount steadily through the years under consideration. Second, one notices that the executive salaries took a slight drop from 1938 to 1939, but that since then they have been increasing steadily, although, so far as wages are concerned, it is difficult to get such increases.


Clarence Decatur Howe: Would my hon. friend reject
the idea that there may be more personnel in the executive, in view of the expansion?


Stanley Howard Knowles: That is possible. I would be glad if that information might 'be supplied.


Clarence Decatur Howe: I do not think it can; but I
make that suggestion.


Stanley Howard Knowles: The next is Canadian
income and excess profits tax. It will be noticed, when one studies the table, that these increased through the years 1938, 1939, 1940
exchange on December 16, 1942. For each of the years 1938, 1939, 1940 and 1941 the figures I am about to give are as they appear in the company's report. I should like to offer a word of explanation in connection with the figures I will give for 1942. For that year the company's report gives figures only for the nine months ending September 30. In the table I am about to give, the figures for that portion of 1942 have been divided by three and multiplied by four so as to give the approximate totals for the year, in order that a proper comparison may be made with previous years. I believe it would be of interest to members of this house to have some of the important figures out of this report, and I
am going Hansard,:	to take time	to read these	figures into1939 $31,375,757	1940 $43,264,219	1941 $72,635,494	1942 $89,842,600434,343	493,750	641,656	(not listed)3,754,051	10,239,227	12,296,489	10,827,3964,296,260	11,871,324	15,676,229	20,457,0163,771,926	4,392,404	23,338,647	40,994,25215,846,384	10,698,156	15,489,951	15,876,53219,618,310	15,090,660	38,828,598	56,870,784
and 1941, but that the amount set aside by the company for 1942 drops considerably from what it was in 1941.
However, the next item deals with provision for income and excess profits taxes, other than Canadian-taxes which Aluminium Limited has to pay to other governments, because many of its subsidiaries are operating in other countries. These taxes show a steady increase from less than $2,000,000 in 1938 to $20,000,000 in 1942.
I am sure hon. members will find it interesting to make a comparison, and to note that the Canadian treasury was to get less in 1942 than in 1941, but that other governments were getting from Aluminium Limited a steadily increasing amount of taxes.
The next item deals with the provision for depreciation and depletion. In view of the fact that this matter has been already discussed at some length, we would expect it to mount steadily, and such is the case.
Then, when hon. members look at item 6 they will discover that even after all of these

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items are taken into consideration-greatly increased depreciation and greatly increased taxes to governments other than Canadian- there is still left over for the year 1942 an amount of net profit, transferred by the company to its earned surplus, which is the largest in the entire history of the company.


An hon. MEMBER:: Would the hon. member place on the record the net earnings of the Canadian company from 1938 to 1942?


Stanley Howard Knowles: Item 6 in the table I have just given contains the information the hon. member asks for, namely, the earnings after all taxes have been paid and after depreciation allowances had been set aside, for each of the years 1938 to 1942. I have not added those figures together, but that can be done from the table.


Clarence Decatur Howe: This is in respect of Aluminium Limited, the parent company.


Stanley Howard Knowles: Yes, the parent company.


Clarence Decatur Howe: The consolidated earnings of the British company, the British Guiana company and all other associated companies.


Major James William Coldwell: Which owns fully the
Aluminum Company of Canada.


Stanley Howard Knowles: The prospectus of the
Aluminum Company of Canada is substantially the same. The figures in most cases are a little less, but only a little less, because the Aluminum Company of Canada is the major holding of Aluminium Limited. The same story holds-gross profits increasing, and income and excess profits taxes increasing until 1941, and then dropping in 1942. But net profits that can be transferred to earned surplus steadily increase, and reach an all-time high in 1942.
I should like to say a few words about those profits under a slightly different heading. When one deals in figures involving so many millions, they become confusing. In fact, even the figures I shall give now may be difficult for most of us to grasp. However, perhaps it will be easier for us to understand from these figures what these huge profits mean to certain individuals.
I find from the report which Aluminium Limited made to the Montreal stock exchange in December, 1942, that there were then in existence 744,410 shares of Aluminium Limited. These were held by 2,358 shareholders. Some might argue that that number shows a fair amount of diffusion. To some of us even that number is very small.
However, I find that in item 17 appearing at page 9 of the report there is a partial breakdown of the holding of these 744,410 shares.

This item shows that seventy-four people hold 1,000 or more shares each. The aggregate of the shares held by those seventy-four people is 574,295. This means that those seventy-four people hold an average of 7,774 khares each. On those shares in each of the years 1941 and 1942, according to page 2 of the same report, a dividend of $10 each was paid,. That means that in 1942-dealing with one year-seventy-four people netted out of the operations of Aluminium Limited-the Canadian company -$77,740 each.
That figure is somewhat smaller than the million dollar figures with which we were dealing a moment ago. But it hits some of us with a great deal more force. This war is being fought largely in the air. Young men are being called upon to fly planes, in which aluminum figures so largely, to risk their lives, while those who happen to be connected with the process of producing aluminum-they are not doing the actual work-made in the course of 1942 an average of $77,740 each. When on a former occasion something was said about these profits the Minister of Munitions and Supply interjected-I believe the hon. member for Rosetown-Biggar was speaking at the time-to ask upon what capital investment these huge profits were being made.
As a matter of fact, the dividends being paid on the Shares of Aluminium Limited invite an examination as to where they have all come from. We discover that of the 744,410 shares, the first twenty were bought at $25 each. Then there was a block of nearly 500,000-I shall not bother with giving the exact figures-which were turned over to the Aluminum Company of America for the purchase of the properties of the Aluminum Company of Canada. Those shares were given to the then holders of Alcoa stock in the proportion of one share for each three held. The other shares that were issued to make up the total of 744,410 shares-they are all listed on this report which I hold in my hand-were either given or sold only to shareholders of record, on some established basis.
I am not sure whether the hon. member for Rosetown-Biggar gave the figures this afternoon, but it has been pointed out already that the holdings of Alcoa stock have grown tremendously. A man who invested $100 in 1904 would have over $8,700 worth of stock in 1926 without the investment of an additional dollar. It is to these people that these shares were given or sold, so that I suggest that it is proper to say that the $10 per share which was given was, in many cases, nothing but a gift. This goes on year in and year out; these individuals are making that kind of profit out of our war effort.

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A study of the reports issued by the Aluminum Company of Canada and Aluminium Limited made me realize that this is a fit study for examination by the treasury board. I recall the debate we had some time ago with respect to section 32A of the Income War Tax Act. This company is having to pay increased taxes to other governments, but it has managed to reduce the taxes which it pays to this government, and it struck me that its returns might well be the subject of an investigation by the treasury board under the provisions of section 32A of the Income War Tax Act. Accordingly I asked whether such an investigation had been carried out, and the answer given to me on May 31, which appears on page 3209 of Hansard, was that at no time since January 1, 1938, had the treasury board reviewed the income tax or excess profits tax returns of either the Aluminum Company of Canada or Aluminium Limited.
A moment ago the Minister of Munitions and Supply pointed out that I was dealing with Aluminium Limited rather than the Aluminum Company of Canada and suggested that the figures I was giving were larger on that account. I replied that they were slightly larger because Aluminium Limited includes many other companies, but that its major concern is the Aluminum Company of Canada. So far as profits are concerned, this company represents eighty or ninety per cent of its holdings. However, I think hon. members should know that this octopus that we have in our midst, Aluminium Limited, either controls or has an interest in a very wide range of companies all over the world.
I fear that I would overrun my time if I put this table on the record, but I should like to make a short reference to it. A list of the subsidiary and other companies of Aluminium Limited is to be found on pages six and seven of the report to which I have referred. I find that Aluminium Limited either owns outright or has an interest in thirty-seven companies; it owns outright twenty-three of them, it has more than fifty per cent control in five, and an interest in nine. These companies are listed under a number of headings, such as mining, transportation, power, aluminum production, aluminum fabrication and "various." Under "various" is to be found financial management, engineering management and research, correspondents in the United States, holding companies and so on. These companies are located all over the world, in British Guiana, Newfoundland, Canada, the United Kingdom, India, Sweden, Australia, Switzerland, Argentina and Brazil. I believe I have named all the countries; a number of them are repeated.
I rose in my place to-night to state definitely that in our view the government is permitting this company to make terrific gains out of this war. We do not accept as an answer to our argument the minister's statement that the government is not prepared to use the war as an excuse for trying to break up combines. I repeat that by its failure to be vigilant, as the Free Press has suggested, it is allowing this company to make increasing profits in terms of dollars and cents and also in terms of increased plant and capital equipment which it will have for use after the war in two fields, aluminum and power. When you read the prospectus of the Aluminum Company of Canada andi the material contained in the report of Aluminium Limited you find no suggestion that they are not going to make profits after the war. What they state is that those of their officers who have pinned their faith to aluminum for years are now being supported by the results, and they point out that in the years to come these are really valuable lines to be in. We contend that the policies of the government have resulted in this country and other countries who are buying aluminum from these interests actually helping them to get these plants for use after the war.


Mr. CRERAR:: A moment ago the hon. member stated that the present government was permitting this aluminum company to make terrific gains out of the war. Does the hon. member wish us to infer from his remarks that the government should have stepped in and, for instance, prevented the arrangement between the British company and the aluminum company for supplies of aluminum, or prevented the United States from going to the aluminum company to purchase its aluminum? What action should the government have taken to have prevented that?


Stanley Howard Knowles: There is on our statute books the National Resources Mobilization Act. There are powers under that act to conscript men, to conscript wealth and to conscript industry. When members of this group, before I was in the house, argued that the conscription of wealth and industry should come first, the government insisted that at any rate it had the power to enforce it whenever it considered it desirable. I would suggest that if the government was aware of the history of the aluminium interests through these forty years-and if it was not, that in itself is reprehensible-it should have stepped in and taken over the operation of these properties for the duration of the war, under the authority of the National Resources Mobilization Act.
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Thomas Alexander Crerar: Assuming that the government had stepped in and expropriated or taken over the whole enterprise of the Aluminum Company of Canada on the Saguenay river, what would it have done for raw material? All the raw material that is converted into aluminum in the plant on the Saguenay comes from another country, and we do not and could not control that by any expropriation proceedings.


Stanley Howard Knowles: The answer I make to that is, first, that the raw material comes from Newfoundland and from British and Dutch Guiana, all of which countries are part of or under the united nations.


Thomas Alexander Crerar: But we do not control them.


Thomas Miller Bell: I rise to a point of order, Mr. Chairman. Is the hon. member for Winnipeg North Centre making a speech or the Minister of Mines and Resources? The minister can make his speech afterwards, I take it.


Thomas Alexander Crerar: The hon. member for Rose-town-Biggar does not need to be quite so touchy on this question.


Major James William Coldwell: I am not touchy; it is you.


Thomas Alexander Crerar: The hon. member for Winnipeg North Centre offers strong criticism of the government because it did not do a certain thing. I think I am quite within my rights in asking him how he proposes we should have done it. I ask him how he would have done it.


Stanley Howard Knowles: I take it that the minister has admitted that the aluminum interests had the government on the spot, so that the company could say to the government: This is the world price and you must pay it. And the government agreed to it.


Clarence Decatur Howe: The government was not on the spot, because the government has had very few dealings with the aluminum company.


Major James William Coldwell: The government was in the wringer.


Stanley Howard Knowles: Some day we should be given the full story of who has been handling this business. When we start to bring these things out, the Minister of Munitions and Supply says: The government was not dealing with this deal. But these deals are pretty big. They affect not only the price which this government has to pay for aluminum, but the price which every one of the united nations has to pay for it.


Angus MacInnis: A little While ago we were told that it was a Canadian company under Canadian control.


Stanley Howard Knowles: It should be brought under Canadian control, and because these deals will also affect the whole set-up after the war I submit that the government was remiss in not concerning itself with deals of this size. It emphasizes our feeling that not only are these interests using Canada as a sanctuary, where they come as refugees from the laws of the United States, but they pull the wool over the eyes of this government. They have been in this game for forty years. The story was given this afternoon, and I confess that I was startled to read the amazement on the face of hon. members opposite, including those in the government, as the story was unfolded. The Aluminum Company of America came here in 1889 and made a contract with the Shawinigan Water and Power Company, and later in 1902 incorporated the Northern Aluminum Company which acquired the properties purchased by Alcoa as a result of that contract in 1889. It not only set up the Northern Aluminum Company to operate the properties which it had bought from the Shawinigan Water and Power Company, but used the Northern Aluminum Company as a tool to effect the earlier cartel arrangements. Finally, after the Duke situation in 1925, the company was renamed the Aluminum Company of Canada and Alcoa continued to use a Canadian company to influence the world cartel, until in 1928 the Aluminum Company of America found that it was no longer possible to operate through subsidiaries but had to set up a wholly independent company.
The ACTING CHAIRMAN (Mr. Ross, Calgary East)1:	The hon. member's time is
up.


Stanley Howard Knowles: I should just like to
finish my sentence and say that in 1928 Aluminium Limited was set up, legally and technically, as an independent company. That is the problem the United States government is up against in the courts. Aluminium Limited's president is the brother of the president of the Aluminum Company of America. Aluminium Limited participated in the forming of the Alliance Aluminium Com-pagnie, which was incorporated in Switzerland, and then proceeded to operate as a world cartel. If my time were not up, I would add to the evidence that has already been produced in the committee, letters and telegrams which show that Aluminium Limited was in effect the instrument and the tool of the Aluminum

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Company of America, guaranteeing to the other aluminum companies that Alcoa would not interfere in their operations and in turn guaranteeing to Alcoa that the other companies would not interfere with theirs.
Another story I should like to have told-


@Acting Chair(man)? of Committees of the Whole: (Mr. Ross,
Calgary East): The hon. member's time is up.


Thomas Miller Bell: Mr. Chairman, may I
raise a point of order? Technically I doubt whether the hon. member's time is up, because the Minister of Mines and Resources made a speech in the middle of my hon. friend's speech, and I believe he can go on for another forty minutes after the minister sat down. That is the technical point I raise.


The ACTING CHAIRMAN (Mr. Ross, Calgary East):: The hon. member commenced his speech at 9.15 p.m., and has spoken for more than forty minutes.


Major James William Coldwell: I point out, Mr. Chairman, that we are in committee and a prolonged interruption is, I take it, a speech.


Clarence Decatur Howe: I think the committee has
pretty well agreed that we would like to hear the rest of the speech.


George Henry Ross: Has the hon. member unanimous consent?


Some hon. MEMBERS:: Yes.


Stanley Howard Knowles: I will not take up further time. I have given a few quotations in support of our contention, and what all members of the house really recognize, namely, that we are dealing with a great international trust which has had forty years in this game and which apparently has been able to pull the wool over the eyes of the government and get them to assist it in carrying on this kind of conspiracy. I object to the government not having exercised the vigilance, in the face of this 40-year story, which even the Winnipeg Free Press would say ought to be exercised.


Mr. HANSELL:: Perhaps I might for a moment or two move to an entirely different subject, but one which I think is of great importance, although the minister may not at this particular moment think so. It is the business of the Minister of Munitions and Supply to turn out the necessary war materials. Perhaps he could be described as the czar of Canadian industry or Canadian war-time industry. There was a time when we were urging upon him to speed up production of war materials. We do not hear that so much now, because I imagine that the man-power situation has pretty well reached the peak of its productive capacity. That being the situation, we are living in a state where everyone is employed; in fact, we have a man-power problem.
I wish to put this to the minister and I should like him to say something about it. I do not want it to be regarded as being off the subject, because it is a tremendously important matter. I doubt whether there is anyone in Canada Who knows the industrial set-up of the entire nation better than does the Minister of Munitions and Supply. At any rate, I do not think an}-one should know it any better than he does. He should have his finger on the pulse of the whole industrial set-up of Canada to-day. I wish to know, therefore, whether the minister or his department or the government has made any sort of industrial survey with a view to passing to the peace-time functioning of industry.
The minister may say that that is not his business, that his business is to turn out war materials. I know that, and I am quite conscious of the fact that he is perhaps trying his best to do that. I am not criticizing his department; nevertheless, if, when peace comes, the minister is in the same seat he now occupies, we want to know what will be done then. It might very well be said that it may be a long time before peace is declared, but we do not know. It may be sooner than we expect, and the minister who is now in

charge of the entire productive capacity of Canada-we may as well say that-should have at his finger-tips all that the government is going to do or that he is going to do if he is sitting in his seat at the time peace is declared. There is no use in waiting until the problem is upon us. I am not now talking of post-war reconstruction; I am speaking of that short transitional period when there is a change-over from the industrial set-up of Canada producing munitions of war to some industrial set-up changing over to the production of peace-time goods. There is no use in waiting until the problem is upon us and1 then closing our eyes and trusting to luck. The government has done that too often in the past, as, for example, in the national coal emergency. But this problem will face us, as certainly as we are sitting here to-night, and we must be ready for it. Someone has said that the difference between a politician and a statesman is, that a politician works and looks forward to the next election, while a statesman works and looks forward to the next generation. I should like to know what the government are doing in the way of working and looking forward to that transitional change-over in the industrial set-up of Canada.


Clarence Decatur Howe: In reply to the question, I may say that a thorough study has been made of each industry to see what can be done. It will depend a good deal on how much warning we get of the end of hostilities. If the war were to collapse to-day, I do not know that we could avoid a certain lag in the change-over of industry; retooling and reorganization take time. But a study has been made; we have expert opinions of the postwar value of every plant the government owns, which is a large part of the industrial capacity of this country; we know the direction that conversion should take, and we only hope we shall have sufficient notice so that it can be done gradually.


Alfred Henry Bence: Two matters which were dealt with by the minister on Friday are of the utmost importance to this country, and both materials are in what is called short supply; I refer to petroleum and rubber. The matter of petroleum was dealt with earlier in the evening by the hon. member for Davenport in what I thought was an admirable address. I should like to say a few words now in connection with certain aspects of the rubber problem, and may I remark in the first place that it seems peculiar that that very scarce product, petroleum, is being used and used exclusively in this country for the manufacture of the equally scarce and important product, rubber.

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There is a great question mark in the minds of many people with reference to this matter, particularly by reason of the feeling that the refusal to adopt means other than petroleum for the production of synthetic rubber is not motivated entirely by unselfish considerations. I hasten to say that I am not a scientist and I know nothing about the technical side of this matter, but there are a number of questions in my mind and in the minds of the public which, I believe, should be answered by the minister.
It may be that the administration itself does not know as much about the solution of this problem as it might do. It may be, and there is evidence to indicate that this conclusion is justified that it has merely pursued a policy of follow-the-leader and has adopted certain suggestions which were made by those across the line. To me it is significant that the government-owned corporation known as the Polymer corporation, which is going to operate a number of plants at the city of Sarnia, is almost entirely manned by persons who have been borrowed either from the natural rubber companies or from the oil companies of this country.
Petroleum is very scarce. That statement is almost axiomatic. The truth of it is evidenced by the fact that we have to put up a system of rigid rationing. This was also admitted by the minister in the house on Friday when he warned the people that in the near future rationing might have to be even more drastically curtailed. It has been stated on a number of occasions that the oil reserves of this country are by no means unlimited. It is stated, indeed, that at the present rate of depletion, and with no greater oil reserves than at present, within a period of approximately fourteen years no oil will be left on this continent. That is a very serious condition, and) it is another indication to me that those who are in control of the production of synthetic rubber on this continent are not much concerned about establishing an industry which will be maintained more or less in perpetuity; for, if they believed that the production of synthetic rubber was to continue on this continent, they would set themselves to look for a product which is in abundance and cannot possibly be exhausted within the short period of fourteen or fifteen years to which I have referred.
I confess to the feeling that these interests do not want to make the production of synthetic rubber on this continent a permanent affair, and in substantiation of that statement I propose before I conclude my remarks to quote the statements of a number of well-known persons whose opinions are regarded as fairly reliable. However, before referring
to some of these statements may I observe that the attitude of the administration since the beginning of the war, as was pointed out by the speaker who immediately preceded me, has been to regard any question of supply on a day-to-day basis without any regard for the long-term point of view. It seems to me the time is past to guide our policies on the principle of the proverb that we should not cross our bridges before we come to them, because in many instances it is necessary to plan a long time ahead in order to find the most efficient and economical method of producing a product over a period of years. To adopt a rubber production programme which must necessarily be curtailed in a few years seems to me the height of economic folly. My criticism to-day in that respect is the same as I have voiced in this chamber in the past, a criticism which I first placed before the house over two and a half years ago, when I asserted that the administration has entirely missed the boat as far as taking advantage of its opportunities to develop this country economically is concerned, and that it has failed to understand the necessity of adopting processes which not only will produce something to-day, but will go on producing it tomorrow or in the years to come. I suggest that the administration should take us completely into its confidence in connection with this matter of the production of synthetic rubber, and let us know what its plans are, not only for the immediate future but for years to come.
Recently the city council of my own city and the city council of North Battleford passed a resolution, which was sent to the government, urging the establishment of factories in Saskatchewan for the production of alcohol from grain for the manufacture of synthetic rubber. They received a reply from Mr. Bennett, who is executive assistant of the department. I have not had an opportunity to obtain a copy of the letter, but according to a press item he advised the city council of Saskatoon that the production of rubber from petroleum was the most practical process under present conditions. He went on to state that facilities for the production of synthetic rubber had been established at Sarnia, Ontario. So far as I am concerned I am not prepared to accept that statement without question. What I want is a complete explanation as to the manner in which this judgment was arrived at; the evidence that was furnished; the persons who were consulted and their connections, and how conclusive in the minds of the administration that judgment was. I might point out that considerable work has been done in the United States in the production
363S
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of synthetic rubber from agricultural products, and I should like to know what investigation was made by the administration with respect to the efficacy of that method rather than the use of petroleum. I would also point out that from what I have been able to glean from various statements and documents in my possession, it would appear that as far as the continent of Europe is concerned, all the available information points to the fact that the great bulk of the synthetic rubber produced there is made, from agricultural products.
Recently', to try and obtain some information in this connection, I asked the administration what was the total stock of natural rubber in Canada. The answer I received was that crude natural rubber is a critical war commodity and that it was not in the public interest to answer this question. I am not entirely sure that this is not in the public interest to answer, but it may be. It does seem to me, however, that more information is given the public of this country than is accorded to members of parliament. I do not know why that should be so; possibly it is because members are in a position to ask follow-up questions which are pertinent to the matters dealt with, whereas the public has pretty well to accept what is given to it. In that respect I would point out that the public of this country have been advised that synthetic rubber factories are being set up in Canada and that the first of these will be capable of producing the needs of the armed forces by September, 1943. Then, according to information given to the public in a little booklet called "The Industrial Front," dated July 1, 1942, it would appear that the rubber in this country at that time was being used to the extent of eighty-five per cent to meet the needs of the armed forces. The disposition of the rubber is shown at page 96 of this booklet, as follows:
Per cent
Tires and tubes of all types for the
army	 74.4
Truck and bus tires for essential transportation	 3-25
Footwear for armed forces and essential
civilian needs	 2-9
Belting and other mechanical goods for
defence and essential industry	 2-5
Aeroplane tires and tubes	 2-25
Wire and cable	 2-0
Motor vehicle parts for army vehicles and to maintain essential transportation	 2-0
Tank parts	 1-8
Protective clothing, including anti-gas
gloves and respirators	 1-8
Retreading and repair of materials for
essential transportation	 1-2
Fire hose	 0-7
Miscellaneous items, none of which comprise more than 0-5 per cent	 5-2

That makes a total of 100 per cent. Apparently the public of this country can be given the information that by September of this year sufficient rubber will be on hand to meet the needs of the armed forces, so that to me, from this information, it would seem that we do not have to worry a great deal about that phase of the matter. But I should like to know the plan of the administration with respect to the production of synthetic rubber for Other purposes, covering the fifteen per cent I have mentioned as being allotted to civilian needs and matters of that kind. If one plant in the city of Sarnia will produce that much rubber, what steps are being taken by the administration with respect to the production of more rubber? What is its plan in connection with an endeavour to obtain rubber from a product which will produce synthetic rubber to-day, tomorrow and perhaps fifty years from now, instead of from a product which may not be in existence at that time? Is it the intention of the government to go on and expand? How many plants does it propose to put up in the, city of Sarnia? Does it propose to do anything in regard to the production of rubber from agricultural supplies?
I might point out that the reason given by some persons for the fact that we have not gone into the production of synthetic rubber from agricultural supplies, and that we have not established plants for this purpose in western Canada, is that the material has not been available for the construction of such plants. It may be that we are short of such material, but I notice that there was sufficient material for an industial alcohol plant at Thorold, Ontario, which is under construction at the present time, though we are producing more than enough alcohol to meet the needs of this country and, according to information given the house a short time ago, are exporting some alcohol to the United States.
In the resolution to which I have referred there is a statement which to me seems very striking, and significant of the interest that appears to be taken in this subject by those who have control of the situation in the United States. This is the statement:
That Wm. J. Hale, research consultant for the Dow Chemical Company, speaking to the annual dinner of the Minnesota bankers' conference in February, 1943, as reported by the Chicago Tribune, stated that there was in existence an unpublieized reciprocal trade treaty with South American countries providing for the destruction of all United States synthetic rubber plants after the conclusion of the war;
Mr. Hale is also authority for the statement that all successful synthetic rubber formulas are based on alcohol (Germany having 38 plants) made from farm products, providing 3-8 pounds of rubber for a gallon of alcohol;

Mr. Hale predicted that the Japanese, when driven out of Malaya and the Dutch East Indies would destroy all the rubber plantations, thus making continuation of the synthetic rubber industry in the United States imperative;
Then I heard some interesting information the other day, given by Mr. D. G. MacKenzie, who is probably known to members of this house. He was formerly minister of agriculture of Manitoba and is at present chief commissioner of the board of grain commissioners and chairman of the agriculture subcommittee of the James advisory committee to the cabinet. He has some significant statements to make in connection with this whole matter. In giving his evidence before the committee on reconstruction and reestablishment, set up by this house, among other things he said:
One of the difficulties that we have in trying to finalize our thinking on this problem arises from the differences of opinion that are emanating from the United States. What I say must be taken only as personal opinion, but there is evidence of a tremendous struggle going on in the United States to-day as between the petroleum interests on the one hand and perhaps the distilleries and farm block on the other hand in the matter of using cereal grains for the production of alcohol. I cannot help but feel behind that dispute or struggle-and it is a very intense one-there is a desire on the part of these respective interests to be in a position to control the market when the war is over.
Then, in answer to the question as to whether he agreed with Dorothy Thompson he said:
I have not seen any statement she has made so I cannot say whether I do or do not but I do feel definitely that there will be a very large synthetic rubber industry established over there that they now say will be competitive with natural rubber. The demands for rubber after the war may be so great as to make it possible that there will be need for both synthetic and natural rubber. These interests are looking forward and are anxious to be in a position to control production and marketing of these products when the war is over. On the other hand, as I stated last night. I was in New York a couple of weeks ago talking to two very eminent citizens there who made this very interesting statement. They said that on the basis of present known resources of petroleum and on the basis of present known consumption of petroleum their resources would not likely last more than fourteen years; so that these same interests are looking forward to that time when stocks of natural petroleum will be exhausted and other sources of supply will have to be developed.
He said, in effect-and I shall give the exact quotation later-that petroleum and oil interests were strongly entrenched and had all necessary technical knowledge to cope with problems immediately any question developed, but that on the other hand, unfortunately, agricultural interests were not as well equipped. 72537-231
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He felt that if they were, great assistance could be given to that industry. In that connection he said, as reported at page 428:
The problem we are faced with in trying to work out these problems and in studying them is this: I have discussed this matter with scientists in Canada associated with some of our research foundations and with the National Research Council and so on, and we have not got in Canada anywhere a chemical engineer .associated with agriculture, at least to my knowledge, with any idea of costs. These men whom I speak of, who are associated with research organizations, will tell us that they have the processes. There is no question about that, it can be done; but I have not been able to get any of them who will express an opinion as to costs in terms of commercial production.
He was referring to large-scale production.
Then, I have here what I believe is further substantiation of my assertion that there seems to be a great struggle going on in connection with the production of this very valuable commodity. In this, of course, I am not referring only to Canada. A report dated May 13 in the Western Producer, and headed "Alcohol Rubber is Shelved by Big Interests", is as follows:
The five alcohol synthetic rubber distilleries approved only recently by the United States war production board have been "laid on the shelf." John Carson, Washington representative of the Co-operative League of the United States, summarizes the alcohol synthetic rubber scrap in which two cooperatives were involved as follows:
This story is so incredible, even in these days when the dollar-a-year men direct a goodly part of the WPB machine, that sections of the picture must be revealed again:
1. The rubber story first began to smell when charges were made that great financial interests, particularly the Duteh-British-Ameri-ean interests, which owned the rubber plantations in the Dutch East Indies, were determined to prevent the development of synthetic rubber which might cheapen rubber and threaten the money invested in the natural rubber plantations in the postwar period.
2.	The Standard Oil I.G. Farben cartel of Germany story added to the smell when the secret agreements within that international trust were exposed.
3.	The smell became so threatening President Roosevelt created the Baruch committee to investigate and the committee recommended the development of alcohol synthetic rubber as well as oil synthetic rubber and the establishment of a rubber czar. Jeffers was appointed and given complete authority over rubber production, but not over the alcohol production programme.
4.	Independents began to apply for approval of their applications to build alcohol distilleries. The senate committee recommended that a great number of small distilleries be established throughout the grain growing areas. WPB, however, ignored all the recommendations of the sen-ate and approved the construction of three large distilleries. Independent distilleries were ignored, their applications forgotten.
5.	Evidence of the determination of some hidden power to prevent the development of an

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adequate alcohol programme forced Jeffers to join in raising questions and WPB was compelled to show new interest in alcohol rubber.
6.	WPB appropriated $100,000 to survey the applications and projects proposed, largely by independent groups, including^ cooperatives; 116 projects were surveyed by engineers, and finally, only about a month ago, five projects were approved.
7.	In one month, the army and navy and WPB developed a "new situation" where these five projects were "not needed."
Then this matter was brought very forcibly to the attention of the public in this country only recently by that well known columnist Dorothy Thompson when she said this in an article contained in the Western Press:
There will be attempts to reduce this struggle to the question: Should we have more or less synthetic rubber. That is not the question. We need vast quantities of synthetic rubber. We also need vast quantities of high octane gas.
Behind this dilemma is just one basic cause: the collusion of the oil interests, through the octupus of pressures which they have organized through government departments, to keep the manufacture of synthetic rubber, the so-called Buna-S in their own hands with the same exclusiveness as the production of aviation gas.
And again:
Prom the day that the war cut us off from natural rubber, there has been a controversy between oil and grain as a basis for synthetic rubber. The oil companies., who had bought the rubber process from the German chemical trust leaped into the game with their formidable pressure power. The chemists who favoured rubber from grain, had nothing but reason on their side.
The Russians, who have been making synthetic rubber for years, used grain and offered us their formula, but it was neglected. There was the so-called Polish process which is also based on grain, so that evidently rubber can be made from grain. Mr. Jeffers knows it. Mr. Nelson knows it. But grain has not had a look-in.
It would appear that Mr. Donald Nelson, himself, who is chairman of war production in Washington believes-or did believe last year, in any event-that the United States had adopted a wrong attitude with respect to the matter of the production of synthetic rubber. He apparently felt that too much emphasis had been placed upon the production of that commodity from petroleum, rather than from alcohol and grain. This is his statement, under date of July 6, 1942:
There is certain evidence which I can introduce to you that immediately we started surveying every one of these propositions to make alcohol out of grain, with Publicker, with Seagrams-we started with Doctor Weizmann, a man in whom I have great confidence-I talked to him last Thursday-I think he could tell you the complete story to-day after a full and complete investigation-he will be here Wednesday, if you would like to see him. To-day, after talking with him, I am convinced that if I were starting that programme over I would start with

60 per cent from alcohol from grain and 40 per cent petroleum. That would be my judgment, viewing it to-day, from what I know of the picture.
I think the attitude, as I understand it, of the administration was pretty well set out in an article appearing in the Western Press under the name of Mr. Craik, and dated May 1, 1943. This is what he says:
But, the way things are at present, there is believed to be little possibility of the construction of further synthetic rubber plants in the west or anywhere else in Canada. The hardheaded men in the Department of Munitions and Supplies admit quite frankly that their main concern is winning the war. They wanted synthetic rubber, quickly, and, with petroleum readily available at Sarnia, and the example of United States in manufacturing rubber from petroleum they decided to go ahead on this basis.
They believe that the Sarnia plant will produce sufficient rubber for essential wartime needs, by which they mean military needs, and that is all they are interested in at present.
I might interject there that in view of the statements which have been given to the public to the effect that sufficient synthetic rubber will be available from the Sarnia plant in September of this year, for the purposes of the armed forces, the administration should be extending its programme so that other essential needs may be met.
Mr. Craik goes on in his article to say:
All this is not to say, of course, that the ease for synthetic rubber plants in western Canada is closed. Men closely connected with investigations into the industrial uses of agricultural products believe that, if the war stretches out over a few more years, it may become necessary to make more synthetic rubber to meet the increasing demands. Then, they say, the logical thing to do would be to build the plants in western Canada. They also point out that, if the war becomes unduly lengthened, petroleum supplies would tend to become shorter than ever, while the probability is there would still be great reserves of wheat.
According to what the minister said the other day, petroleum supplies are getting shorter. Mr. Craik goes on to say:
All this points to wheat as the product from *which rubber will be made, provided greater need arises in the future.
I refer to these statements and make these quotations in order to indicate to the committee and the minister that there is a feeling of great suspicion in the minds of many people in this country in connection with the production of synthetic rubber. It seems to me that in order to clarify the situation the minister should make a complete statement. I urgently suggest to him that he consider this matter, not from the short-time point of view but from the long-time point

War Appropriation-Supplies
of view, as was referred to by the hon. member for Macleod who preceded me and who discussed industrial matters generally.
We are going to have tremendous problems on our hands at the conclusion of the war, and we should take advantage of every opportunity to combine the solution of matters which will arise during the war with the solution of problems which will arise after the war. This feeling which is abroad should not go unanswered. The agricultural interests in western Canada consider that they have not a chance against strongly entrenched industry as represented by the oil and natural rubber concerns unless there is intervention by the government in some way. Here was a case where the government was putting up the money to provide a wholly government-owned corporation; they had complete control of the situation, and I suggest that they should have attempted to take advantage of the situation in a way that would have solved some of these other problems. We have a grave suspicion that the administration has missed the boat in connection with the possible solution of some of our post-war difficulties.


Mr. GERSHAW:: Mr. Chairman, I should like to pay a tribute to the Minister of Munitions and Supply and to his staff for the magnificent production record they have. Many men in the department are giving of their experience and abilities freely and are making a great contribution. There are times when materials are required urgently, and to meet these demands requires business experience of the highest order. I feel that if the same energy and thought were put into the solution of our post-war problems as have been put into the solution of these production problems, the people of Canada will need have no fear for the future.
Among the duties carried out by the department, as I understand it, is the locating of air schools, air fields and things of that kind. This is done by the technical officers of the department, and it is often quite difficult to follow their line of reasoning and understand why these airports are located where they are. Unfortunately some of them have been built in locations where there was no water; others have been placed in windy localities where the climate was rigorous, where the snow was deep and where flying hours were limited. Southern Alberta has a wonderful climate, it has clear visibility and mild weather. Places like Bas-sano, Empress and Bow Island have railroad connections, water and all the other conditions favourable for the location of schools and industries of this kind; yet they have been overlooked.
72537-231 i
One service flying training school has been located in the district and it has been. eminently successful. They have been able to put in longer flying hours there than in any other place in the dominion, The climatic conditions have been right; the visibility has been good, and the nature of the terrain is perfect. It is a matter of considerable pride that the school located at Medicine Hat stands out prominently among all the schools of Canada. It has the efficiency flying flag at present, and the officers are the very best.


Major James William Coldwell: I should like to ask the
minister one or two questions under this item. Could he give us a break-down of the item?


Clarence Decatur Howe: I had the books here before dinner, but I have left them in the office. I can answer that to-morrow. Part of this is a carryover from commitments made in the last fiscal year, and it covers also plants in contemplation as well as facilities that we expect to expand.


Major James William Coldwell: Would that be in connection with chemicals mainly?


Clarence Decatur Howe: Yes. The rubber plant at Sarnia represents a $40,000,000 expenditure, and it was not 50 per cent paid for at the close of the fiscal year. Other chemical plants are in process of expansion. As types change, there is a need for retooling. The putting out of a new type gun or a new shell involves expenditures, and these have been estimated by the various departmental heads and are included in the figure.


Major James William Coldwell: Does the minister's department have any responsibility for the building and operation of the pilot plant which is experimenting with the production of synthetic rubber from alcohol, or is that under the national research council.


Clarence Decatur Howe: The national research council are doing certain work on the manufacture of alcohol from grains, and the department has made an exhaustive study of the relative merits of synthetic rubber based on grain alcohol and synthetic rubber made from a petroleum base. It came to the conclusion that as a long-range situation the part of wisdom was to use petroleum as a base. The use of grain instead of petroleum would involve a very low price for the grain. Wheat is a" food and is entitled to a higher value as a food than it can have industrially. For example, to-day alcohol is being made from wheat, whereas in normal times it would be made from molasses at perhaps one-third the cost. To base a huge enterprise such as the synthetic rubber plant at Sarnia, which will cost in the neighbourhood of
War Appropriation-Supplies

$40,000,000, on cereals-wheat is used in the manufacture of alcohol only on account of transportation difficulties in connection with obtaining cheaper materials-to base such a plant on a temporary situation, on a war situation, did not seem the part of wisdom.
I shall be glad at the next sitting to give the committee a statement on the synthetic rubber situation and the reasons which led the government to base the manufacture of synthetic rubber on petroleum rather than on wheat. I shall give some detail. I was rather interested in the call I had from a committee of the Saskatchewan wheat pool which had visited a number of authorities in the United States and practically all the laboratories there, as well as obtaining such information as they could in Canada. That was an independent investigation made by people who could logically be expected to favour wheat as a basis for rubber rather than petroleum, and in my discussion with them I concluded that they had reached the same decision as had been reached by my officials, that to base the future of wheat on its use in industry would be very unfortunate for wheat. However, I have a statement prepared and I shall be very glad to give it at the next sitting.


Thomas Miller Bell: I am pleased to hear the minister say that he will give a complete statement on the subject to-morrow. One of the reasons why those of us from the prairies are so much interested in the production of rubber from grain is the fact that we have such huge surpluses of grain at the present time and we look into the future with something of misgivings. We know perfectly well that Britain has increased her cereal crops to a tremendous degree during the war, and we know that it is the intention of the British government to continue the production of grain on as great a scale as possible after the
war,	for obvious reasons, one being that she will no longer be the creditor nation that she was before the war and consequently will have to feed herself to a greater extent than before the war.
I appreciate the point of view that the members of the wheat pool may have. I do not know exactly' what their viewpoint
was,	but it was indicated to some extent by the minister when he said that it would1 be unsafe to predicate the future of the wheat grower upon the manufacture of synthetic rubber. But the point we have in mind is these tremendous surpluses that we now have

on the prairies. While there is every prospect of their being reduced to some extent owing to conditions in the United States, nevertheless we are likely to be faced with a considerable amount of wheat in this country at least until the war is over. When I was in Washington the other day the Vice-iPresident told me that if transportation1 could be arranged, even now very much of our western wheat would be used over there, that it was very largely the question of transportation that was bothersome. Consequently, temporarily at least, while we may see some alleviation of the difficulty which we have faced during the past several years, I am rather looking to the future beyond the two years, we will say, after the war. If Britain continues to grow wheat and the Argentine republic has surpluses of wheat; if Australia has surpluses stored up on account of the war -her stock is disappearing to some extent through the United States armed forces in Australia-we want to find uses for our grain that will give some security for the future, some guarantee that the grain will be used.
I do not know whether the minister read an article a short time ago by Miss Dorothy Thompson-I read it but I have not it with me-in which she contended that the making of synthetic rubber from an alcohol base derived from grain was thoroughly feasible, but that it had been blocked by the oil companies who were interested in carrying on experiments and the production of synthetic rubber from petroleum. As was well said by the hon. member for Davenport this afternoon, it is a dangerous position to get into to allow this great new synthetic rubber industry to be controlled by the oil industry, which in turn is very largely a monopoly. We all know the extensive and numerous ramifications of the Standard Oil company, associated with its own company in this country, Imperial Oil, and none of us likes to see this great new industry of synthetic rubber left wholly under the control of the great oil companies. There are only two or three of them-Standard Oil and Royal Dutch Shell practically divide the world between them. But if we could see synthetic rubber madq from alcohol-we do not have to look to grain exclusively, for there are other sources of alcohol; the minister mentioned the cutting off of the supply of molasses-it would change the whole picture. We can make alcohol from all kinds of other vegetable products. Various trees, for instance, are potential sources of alcohol.

Labour Conditions
I am glad the minister intends to make a statement on the subject to-morrow, because it is a very live one in our part of Canada, the west, and those of us in the house should be fully informed as to the whys and wherefores of making synthetic rubber from petroleum rather than from alcohol. Most of us would prefer to see alcohol used as the base rather than petroleum, which is in the hands of a great petroleum trust.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Tuesday, June 15, 1943