1943-06-15

[Stage Direction]
On the orders of the day:
Mr. P. C. BLACK (Cumberland):: I wish to direct a question to the Minister of National Revenue. May I ask whether the time can be extended beyond June 30 for the filing of income tax returns for 1942, more particularly under T-l general? It is pointed out to me by chartered accountants and business firms that in many cases it will be impossible for them to file their returns by that date and they contend that they should not be subjected to penalties or excessive interest charges. There have been changes in tax legislation and delays in the printing of the legislation and forms, which have been only recently distributed. Moreover, the staffs of chartered accountants and the offices of business concerns have been depleted by enlistments and by the transference of men to government work, and these have been replaced by inexperienced help. In addition to that, the work has greatly increased and many of these firms of chartered accountants find it impossible to make up their returns as of June 30.


Hon. C. W. G. GIBSON (Minister of National Revenue):: The hon. member was good enough to give me notice of his question. Income tax returns which are due on June 30 are the individual returns, and the returns of corporations whose years ended on December 31. While amendments to the act delayed the production of the 1942 income tax forms,
taxpayers have had six months in which to determine their 1942 incomes, and the forms have been available since early this month. There still remain over two weeks in which to file these returns.
I realize that some congestion exists in the offices of chartered accountants, who have numerous returns to prepare, but in view of the large number of taxpayers who will be filing returns, and the millions of dollars payable this month, it is not considered advisable to postpone the collection of this large sum by a general extension of time.



MUNITIONS AND SUPPLY


[Stage Direction]
On the orders of the day:
Hon. C. D. HOWE (Minister of Munitions and Supply):: I wish to correct certain information given this morning in the two Ottawa morning papers referring to return No. 257, subject, armchairs, chesterfield suites, sofas, et cetera, tabled yesterday in the House of Commons. Both articles implied that the chesterfields and other equipment purchased by the department were for its own use, whereas the returns specifically stated that the department merely acted as purchasing agent for the three armed services in buying the equipment referred to. The Department of Public Works purchases all such equipment used by the Department of Munitions and Supply, and since the inception of the department has supplied the Department of Munitions and Supply with: 991 armchairs of every kind; no chesterfields; six sofas and lounges.


LABOUR CONDITIONS
[Stage Direction]
On the orders of the day:
Hon. H. A. BRUCE (Parkdale):: I direct the government's attention to a news item appearing in to-day's papers. It describes a Mr. Arthur Williams as organizer for the Canadian congress of labour and he is reported to have suggested Ontario-wide trade union action to suppress striking employees in war plants at Galt. What action does the government propose to take in the circumstances under the defence of Canada regulations?


Mr. SPEAKER:: That is a question that should be put on the order paper.
War Appropriation-Supplies



WAR APPROPRIATION BILL


[Stage Direction]
The house resumed from Monday, June 14, 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.

[Stage Direction]
1. Additions and extensions to plants, $195,000,000.
['We will prosecute immediately. Progress reported.']
Mr. LIONEL CHEVRIER (Parliamentary Assistant to the Minister of Munitions and Supply):: Mr. Chairman, I should like to discuss briefly this afternoon a subject which I believe is of some importance in the consideration of the war appropriation resolution so far as it concerns the Department of Munitions and Supply; that is, the purchasing policy of the department. For a moment I want to consider the method adopted in the department to reduce costs and to control profit margins. I should like to discuss briefly the contracting policy of the department, the manner in which contracts are awarded, the various kinds of contracts, the controls exercised over them, some of the conservation methods that have been adopted by the direc-tors-general and the consequent reduction in prices of many of the commodities and instruments of war purchased by the department. These are all matters which have been discussed in the house from time to time, and I should like to show that the job of the department is to get the maximum possible value for the taxpayer's dollar, which involves not only seeing that profits are fair and reasonable bu't that costs are driven down in every possible way.
The chief job of the Department of Munitions and Supply is that of procurement for the army, the navy and the air force of Canada, the United Kingdom and the united nations. Its first job is to procure as quickly as possible those things which may be required from time to time. In the first years of the war the department was criticized because it was not producing fast enough. Now that production is here the main criticism seems to be that we are producing too fast and that the programme is costing far too much. I should like to examine that charge in the light of methods adopted by the department and the procedure followed to reduce costs and curtail profit margins. Before going into that subject, however, there are three points which I believe deserve the attention of the committee. The first point is that Canada, has never
TMr. Speaker.]
been a manufacturer of military, naval or aircraft stores. We had not made a single gun in this country prior to the war. Certainly we had never made a tank, and for somt twenty-five years prior to the war I do not believe we had produced a merchant shipping vessel. It is true that we had made son*' commercial planes but we had never made a combat plane, and I am sure hon. members will agree that there is all the difference in the world between a commercial and a combat plane.


Mr. HANSON (York-Sunbury):: We had
built commercial shipping.


Lionel Chevrier: My suggestion was that within a period of twenty-five years prior to the war we had not produced cargo or merchant shipping vessels. I was going on to say that the department was faced with this position, that it had to purchase a huge quantity of military stores never before made in this country. It would go to a manufacturer and ask him to make these articles. The manufacturer, not having made them before, was faced with the difficulty of not being able to submit a price. Very often he would say to the officers of the department, "Do you know what it is going to cost?" The answer from us was no, because we had no further information than he had in regard to costs. Therefore it became necessary to negotiate on the subject of prices, and the difficulty resulted from the fact that the contractor not only had not made these implements of war previously but did not know the price to quote, any more than the department knew it.
The second point I wish to bring to the attention of the committee is that all those who have given this subject any thought have come to the conclusion that the most desirable kind of contract that could be negotiated, under those circumstances was the fixed, price contract, in which the contractor undertakes to furnish to the department a fixed number of articles at so many cents or so many dollars. That is the ordinary contract that everyone was accustomed to in peace time. Obviously it has many advantages, because the contractor takes all the risks. Then the third/ point arose, but how are you going to negotiate safely fixed price contracts upon stores that not only have never been made in this country before but concerning the prices of which neither the department nor the contractor had the slightest idea?
That was the fundamental problem of munitions and supply in connection with the purchasing of a great deal of the military stores that it required from time to time. The department therefore had to establish a policy

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and set up a technique. Briefly summed up, this is what was evolved. Wherever possible the competitive price system is used as the best method of finding the most efficient contractor. The department thinks that the cheapest production, both from the point of view of cost as well as the point of view of profits, can be obtained through the negotiation of short term contracts on a fixed price basis. However, the success of contracts of this kind depends entirely upon the ability of the department to obtain full, accurate and up to date knowledge of the costs of the contractor. Where this is not possible and cannot be obtained, as in the case of tanks and certain guns which have as many as 2,400 parts, the department has had to work out variations and modifications of the fixed price contract.
Here let me note that four-sevenths, in point of number, of all the contracts awarded by the Department of Munitions and Supply have been on the fixed price basis.
Though some criticize the tender system, the department adheres to the view that if we can get real competition between two or more concerns we are likely to get low prices on the first order and still lower prices on subsequent orders. Practically all purchases of foodstuffs, barracks stores, supplies, clothing and equipment of that kind have been purchased on the tender system. Obviously, however, the tender system will not work out when applied to the purchase of equipment mostly technical in character, which has never been produced in this country before. The department therefore hit upon the expedient of the cost audit. It allowed the manufacturer a reasonable fee for his work, with the understanding that at the earliest possible date it would examine his costs and revise his price as his costs might warrant.
Contracts, as a general rule, and in a broad way, which are awarded in the department may be divided into two parts, those awarded to independent contractors and those negotiated by so-called agents. The independent contracts may in turn be subdivided into five parts the first of which is the fixed price contract, about which I have been speaking; the next is the ceiling price contract, about which I shall have something to say in a moment. It is the contract which has to do generally speaking with the purchase of mechanical transport. Then there is the unit fee contract used generally in the purchase of guns. Again, we have another division called the target price; and finally the cost plus percentage. This is of course the least desirable kind of contract. But there are some instances when resort must be had to it, as for instance the case of overhaul of
aircraft, and repair contracts for aircraft. But it is only in exceptional circumstances that resort is had to that kind of contract.
Contracts entered into by so-called agents may also be subdivided into two parts, those negotiated by government-owned companies, and those negotiated by privately owned companies on a management fee basis. Government-owned companies may be either operating companies, such as Small Arms Limited, or supervising companies, such as Allied War Supplies Limited. And the management fee contract may be on a unit basis, a monthly basis or a yearly basis.
These are the general divisions of contracts in the department. There are other contracts of an exceptional nature to which I make no reference here. Where the contractor is able to give us a fixed price, which we have reason to believe is fairly close to the right price we negotiate with him what is called a ceiling price contract. This means that the contractor's costs will be audited when the job is done, and he will be paid the actual audited costs, plus a fee, or a percentage on costs. In no case will the cost plus profit exceed the ceiling agreed upon. If on audit it is found that the ceiling price exceeds the actual cost plus the agreed profit, the contractor must adjust his price and return the excess he has been paid. This is what is called the ceiling price contract. It is subject to revision downward only.
Another type of arrangement in lieu of fixed price negotiations had to be found in the case where a reputable manufacturer was unable to submit any reasonable estimate of his costs, and was willing to work for a settled period without any fixed price. In such case it was our policy to allow the contractor his actual audited costs, plus a fee of so many dollars or cents for each unit of output which passed inspection. Sometimes the changing character of the contract necessitated a percentage rather than a fee. However, as I said a moment ago we have used the percentage on cost arrangement only as a last resort, and where it was quite impossible to estimate the duration or the difficulties of the job.
A word about the unit fee. This arrangement has a definite bearing on speed of production. The sooner the manufacturer gets his first unit out, the sooner he begins to earn something for his operation. The more units he produces, the higher are his earnings. The unit fee method has had much to do with the speeding up of production and the reduction of costs.
The question is sometimes asked: How can the cost plus fee arrangement lead to low
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costs? Where is the incentive? The answer is that you do not speed production without a more efficient use of mam-power. And where you reduce the number of man-hours required for a certain job, you also reduce its costs. So that the incentive to speed also creates an incentive to cost reduction.
At the start of a programme the manufacturer usually gets a large number of employees around him, in order to speed up production. Gradually he will find this to be somewhat cumbersome, and will always reduce the number of his employees later on, as the programme advances, in order to obtain more efficiency. This inevitably will lead to lower costs.
Still another method for creating incentive for cost reduction, where a fixed price cannot be established at the beginning of a programme, is the target price contract. The target price is something for the contractor to shoot at. It is really a trial run on the preliminary part of the programme. If the contractor gets under the target he will get a profit. If he goes over the target he will be penalized. Under this plan the contractor agrees to accept the target price for the first five or ten per cent of the amount of his contract. If after an audit it is found that the actual cost is the same as the target, the contractor gets a profit of five per cent of the target. If the contractor's costs exceed the target his profit is reduced by twenty-five per cent of the excess over and above the target. Should his actual costs be less than the target, he gets a bonus of twenty-five per cent of the saving. On this type of contract frequent audits are made sometimes as often as every three months.
So that we finally arrive at the position where it is possible to negotiate with the contractor a fixed price contract. I should like to point out, Mr. Chairman, that all these various modifications of the fixed price contract, such as the target price, the ceiling price and the unit fee arrangement are temporary arrangements being used by the department pending the day when it will be possible to negotiate contracts on a fixed price basis.
One of the great difficulties about establishing fixed prices is the frequent change in the design of equipment while it is in production. There is no known way of determining the efficiency of war equipment, except by use in combat. We find we must ask our contractors to make frequent changes in the design of equipment. Had it not been for these modifications and variations of the fixed price contract, production would certainly never have attained the peak it has attained 
to-day. The best proof of the wisdom of our policy is that to-day there exists in the department a group of war contractors who are definitely cost conscious. Their interest in cost reduction is second only to their interest in production.
I should like now to pass on to the checks or controls which are exercised in the department over contracts of a cost-plus nature. These are three in number: First, the treasury cost accountant; second, the representatives of Munitions and Supply, and third, the directors-general of the various programmes.
The cost accountant is an official of the Department of Finance. He is attached to the treasury branch of that department, and he works hand in hand with the Department of Munitions and Supply. There are hundreds of these cost accountants scattered throughout war industries in the country. Their job is to find out what costs are, and to supervise those costs. These men operate in accordance with a strict formula. For the information of the committee I should like to table the costing memorandum of the Department of Munitions and Supply, known as No. 433. This memorandum sets out in detail the items which may be charged as items of cost and those which may not be. I can assure you that there is no provision for donations, entertainment expenses, advertising expenses, bank interest and the like. If hon. members are interested in this costing memorandum and will read it, they will find there in great detail all the items which may or which may not be charged as cost items.
The cost accountant does not confine himself in his investigation to what the books show. He inquires into matters such as scrap losses, quantities and costs of materials, use of man-hours and things of that kind which are not normally shown on a company's books. He tries by a spot investigation to make sure that the company's payroll is genuine and has not been padded. He tries to bring into relief all substantial or unreasonable salary increases or bonuses which may not appear on the surface. He segregates and isolates expenses incidental to the development of a programme and which are not likely to recur in its advanced stages. He aims to tell the department the story of what is going on in the industry with reference to cost; he tries to tell the department not only the cost during the first period of production but also the cost after production is well under way. Where such costs are obtained the department is then in position to negotiate fixed price contracts.

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The representatives of Munitions and Supply are experienced officials of the department -who operate in the large war industries, particularly those on a cost plus fee basis. It is the responsibility of these men to help the industry increase production and reduce costs. They are also required to report all cases of inefficient or uneconomical operation. The directors-general of production supervise and direct all programmes. With their associates and assistants they combine the best production and technical experience that is available in the country.
For some time past the production departments under the direction of the coordinator of production have begun a campaign of conservation, the object of which is to help the contractors conserve machine tools, manhours and materials of a critical nature. When this campaign was exhibited in Toronto in October last year it was estimated that at that time it had saved the country some $155,000,000. The estimate to-day would unquestionably be much higher. This exhibit of conservation projects was afterwards moved from Toronto and may now be seen in Montreal. If there are some hon. members who have not seen this exhibit I would suggest to them that they could profitably spend the time necessary to go to see it. It is now at 1155 Bishop street, Montreal. I am informed by one of the directors of this branch that some time next week the exhibit will be moved to Ottawa, where it may be seen.
I should like to give to the committee four or five examples taken from this conservation project which I believe will speak volumes for what has been done in the campaign, (a) First, I should like to refer to what has been accomplished in -connection with the body of the Bren gun. This body is made from a steel forging, and after certain experiments it was found possible to redesign the forging dies so that it would be nearer to the finished Shape. This resulted in a saving of 1,200,000 pounds of stainless steel and a large amount of chrome, which is scarce. Owing to the improved shape, 10,000 man-hours have been saved in the machining of this one part. A value of $125,000 may safely be put upon the saving in connection with this one item.
(b) The small catch for the Bren gun magazine was originally built up with welding rod and then machined to shape. It was found possible to accomplish the same purpose by three press operations, and the result has been a saving of 198,000 pounds of welding rod, and $39,000 worth of oxygen and acetylene. The saving in labour has been 515,000 hours and ten
machine tools have been eliminated. The value of this conservation project is about $329,000. (c) The bipod assembly on the Boys anti-tank rifle was redesigned to be made from a malleable iron casting instead of from a steel forging, steel tubing and bar stock. The annual saving here has been estimated at 771,600 pounds of steel forgings, and forging capacity is very tight; 72,000 pounds of seamless steel tubing, which is scarce and has to be imported; 164,500 pounds of bar steel; 477,600 hours of labour and 77 machine tools. We can value this project at $1,780,000.
(d) The fuse for the 25-pounder shell was originally machined from brass bar stock. Brass calls for copper, which is extremely critical. The fuse was re-engineered to be made from zinc die castings. This resulted in saving 44,000,000 pounds of brass. At the same'time 816,000 hours of labour were saved annually and fifteen machine tools were eliminated from this operation. This conservation project can be valued at over $6,500,000. (e) I should like to select one example from several hundred successful changes which have been made in the universal carrier. The track sprocket was originally rough flame cut from steel plate and partly finish machined all over. Now the sprocket is made from centrifugally cast steel and the only machining necessary is the boring of the. hole for the shaft and the drilling of a few small holes. The annual saving in plate stock is nearly 9,000,000 pounds; 725,000 hours of labour have been saved, and the total saving can be valued at $1,700,000.
(/) Not all the ingenuity of this campaign has been directed toward war stores. Here is a case concerning the packing of motor vehicles for overseas shipment. A change was made in the manufacturing of the truck, which made closer packing possible. A study of the building of the boxes as to use of lumber and nails was made. This resulted in a large saving of shipping space, as well as a saving of 3,635 freight cars, over $2,000,000 worth of nails and lumber, and over $1,000,000 in labour. I would point out that no one can put a value on the shipping space which was saved.
The technical and financial press has been awake to the significance of this great conservation movement which is rapidly assuming the aspect of a crusade and it has spread the news of the accomplishments throughout Canadian industry. All these examples of savings were selected from a group of over 500 reported to the department some months ago. To them must be added over 350 more itemp reported in recent months.
All this information naturally raises the question of what has happened to prices in relation thereto. In addition to the greater
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production that has been made possible through the conservation of the resources of the united nations, what additional value have the Canadian people been getting for the dollars they have paid in taxes or invested in war bonds? The news here is also good, and again I would ask the house to bear with me while I quote several examples of reductions in prices, as follows:
No. 119 fuze-price reduced from $3.05 to 65 cents.
100-round Bren magazine-price reduced from $38.58 to $18.
2-	inch trench mortar-price reduced from $120.48 to $80.
3-	inch trench mortar-price reduced from $345.65 to $236.
Universal carrier-price reduced from $3,825 to $2,900.
2-inch bomb thrower-price reduced from $81.81 to $67.05.
Gun
barrels	Forging	Machining3-7 A.A	$1,650 to	$1,733 to$900	$37540 M.M	
$187.20 to	$460.53 to$160	$183.402-pdr	$178.50 to

I am advised by the munitions contracts branch that the quarterly review of fixed prices on ammunition components for the second quarter of 1943, as compared with the first quarter, indicates a total over-all saving of $2^ million.
Gratifying as these results are, they do not permit of any complacency. Critical shortages still face us. The. need for the most frugal use of man-power still exists.
One most encouraging feature of to-day's picture is the earnest participation of the workers themselves in making their labour more fruitful. "Employee suggestion plans'' are being installed in plants throughout Canada. Canadian workers, stimulated by fair systems of recognition and rewards, have turned in thousands of usable ideas. Many are small in importance by themselves, but when multiplied by the thousand, they assume gigantic proportions. It is too early to try to make any estimate of the total savings which will be made by Canadian workmen, but here is a sample from one industry only which will indicate the possibilities. In this one industry during the period from August 22, 1942, to April 3, 1943, no fewer than 4,512 suggestions were received from the workers, of which 460 have been accepted and put into production, and over 1,200 have yet to be studied. In that industry the workers have been awarded $21,352.65 for their suggestions.

I would like to say a word now, if I may about renegotiation. Notwithstanding the precautions taken by the department to reduce costs and curtail profit margins, occasionally there develops a case where the profit on a fixed price contract is an inordinate one. This may develop where large volumes of material or equipment of a certain kind have to be obtained. When this occurs the department takes the view that the contractor in *war time should be content to give the taxpayer the greater part of the benefit of the improved techniques, rather than retain them for himself.
While the department appreciates the principle of the sanctity of contracts entered into between itself and its contractors, still it realizes that in war time there is a responsibility placed upon the minister to protect the taxpayers' money. For this reason, where it is shown that profits are unreasonable, the department renegotiates contracts, first, voluntarily, and then on a compulsory basis if need be. The powers in this regard conferred upon the minister, are to be found in clause 13, subsection 4, of the bill which was passed by the house some weeks ago. The subsection reads as follows:
Renegotiate contract price.
(4) If the minister is satisfied, upon an examination of the accounts and records of a person who has entered into a munitions contract, that the contract price paid and payable to such person contains an unreasonable profit, he may direct such person to renegotiate the contract price and may direct that there be withheld from such person any amount of the contract price which in the opinion of the minister represents an unreasonable profit, and may direct such person to pay to the Receiver General of Canada forthwith any amount which such person has received which in the opinion of the minister represents an unreasonable profit.
Then again, there is the control exercised over war profits by the corporation income tax and the excess profit tax. Following the budget of the year 1942, a company would1 pay at least 40 per cent of total profits as a corporation tax and an excess profit tax of 10 per cent of the net income, or 100 per cent of the excess profit over the average for the standard period. No change has been made with reference to these taxes in the budget which was brought down this year. Under existing tax laws no corporation can earn, after tax, a greater amount that seventy per cent of its pre-war standard profit.
It will be seen therefore, Mr. Chairman, from what I have been saying that the job of munitions supply may be subdivided into three parts, which in order of importance are: (1) to secure the required output in the minimum of

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time; (2) to secure all benefits of modern production and cost reduction technique; and (3) to keep profits under strict control.
* I do not pretend, Mr. Chairman, that we have attained one hundred per cent efficiency in all these, but all in all we are doing a good job in spending the taxpayers' money.
Mr. HA'NSON (York Sunbury): You are spending enough money all right.


Lionel Chevrier: There is no doubt of that, but my contention is that we are doing a good job in spending that money and we are trying to negotiate contracts on a proper, sound and businesslike basis. We are maintaining a close check on costs and profits through the audit system, and we are seeking to improve manufacturing technique by daily contact between our production officials and our contractors.
I should like to quote here what some people who do not live in this country think of our system, and I say this, that notwithstanding the criticism which may from time to time have been levelled against the control of war profits in Canada our system is more efficient than that at the present time obtaining in the United States. I should like to quote from an article which appeared in the "University of Pennsylvania Law Review/' It is from the pen of James R. Withrow, Jr. Mr. Withrow is a graduate of Cornell university and a member of the New York Bar. He wrote an article entitled "The Control of War Profits in the United States and Canada." He came to Canada and spent some time here studying the methods which we adopted, in order to compare them with those exercised in the United States. In this rather lengthy article he goes into the manner in which the country to the south handles costs and profit margins as compared with the manner which we adopted, and he concludes in this fashion: I quote two sentences from his concluding paragraphs:
Canada's method of controlling war profits is to negotiate contracts carefully and for a short period of time, and to provide wherever possible, an incentive to the manufacturer to reduce his costs. The tax laws are left to take care of the rest. . . .
And the concluding sentence:
Certainly Canada's policy of awarding war contracts for short terms and subject to continuous scientific cost inspection, and thereafter relying on high corporate and excess profits taxes, seems better adapted to eliminate war profits without any discouragement of production than the procedures which have been followed in the United States.
Canadians might well be proud of the fact that, after almost four years of war, with an unprecedented outlay of public funds,
there have been few charges of graft and almost no accusations of improper use of war moneys. In the few cases where waste and dishonesty have been discovered, the department has acted quickly and effectively.
The department is most anxious to maintain its reputation for honesty and efficiency. That it has done so in the face of many obstacles is due not only to the checks and controls which I have been speaking of, but particularly to the high calibre of the men who administer the war programme.


Mr. GRAYDON:: I rise to take part in this phase of the committee's discussions in order to deal with two points only, and those at not very great length.
The Minister of Munitions and Supply, in his statement to the house the other day, pictured the development of a department which, judging by the buildings it occupies in Ottawa alone, seems to be almost an empire in itself. I take it that his statement was intended as a tribute to the energy, the capacity and the determination of Canadians in industry and in labour circles so far as the prosecution of our war effort to a successful issue is concerned. Sometimes we tend to divide ourselves into sections in our attitude to the war effort. That is a mistake. All Canada-every one of us-is in this effort; and, assuming the minister desired to express his commendation of those who are engaged in the production of materials of war, I would endorse that expression. I would, however, point out that since the administrative end of the department has developed into this huge empire, perhaps some criticism of a constructive nature may properly be directed to the minister in charge and to the government.
So far as industrial production goes, the government has adopted the policy of employer and employee production committees sometimes known as labour-management production committees. Their objective, of course, is increased production. The government, being committed to the encouragement of employer and employee production committees throughout the industries of the nation, must accept some criticism in view of the fact that it has not set an example by applying this principle in the administrative branch of the Department of Munitions and Supply. I mentioned this in a previous discussion without enlarging on it. Members of parliament have had placed in their hands a chart displaying the structure of the minister's department. Most of us who are interested in labour are concerned to find that, in the whole of this giant administrative

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organization, the closest if not the only approach to labour cooperation is represented by the appointment held by Doctor Goldenberg, the liaison officer with the Department of Labour.
I am in hearty agreement with the policy and purpose of employer-employee production committees. We have too long ignored the fact that if we are to go places in production in any line, we must have a partnership of industry and labour. One of the best places where the government could realize, this objective is right in the top strata of the Department of Munitions and Supply itself.
I would pay my tribute at this time to the industrialists who have given of their time and energies and abilities to the work over which the minister has jurisdiction. My criticism in no way constitutes a reflection on anyone, whether he be in labour or industry, who is giving of his best. It stems from the fact that in this departmental empire, labour has not its proper place and is not enabled to take its proper part. Hon. members know that in Great Britain organized labour has become a major partner in the national effort. We all admire the attitude of British labour and its accomplishments during the war. To use a phrase frequently employed by the Minister of Labour when the history of the war-time endeavour of Great Britain is written, the contribution of British labour will stand out in bold relief.
I would therefore urge upon the minister, with all the earnestness at my command, and believing that we who have been champions of labour in this house and outside it for *many years may properly make this suggestion, that he take labour into fuller partnership in the work of his department. The complaint is made not only with respect to the Department of Munitions but with respect to other departments of government as well, that agriculture and labour, embracing as they do two great producing elements of our country, have not, during this period of war, been taken sufficiently into the partnership so as to ensure the most vigorous and effective prosecution of the war.
I come to another point. Now that we have read so much and heard so much about making the world safe for democracy, to most of us who have not during the past been associated with major business enterprises, but have been ordinary common people trying to get along, making the world safe for democracy means at the same time making it safe for the common man. That is one of the things which we are prone to forget; because if the world is to remain safe for democracy it must

be a world in which the little man has his place and his proper share of the opportunities of life. I lay that down as the premise of what I am about to say.
I have always felt that those who represent the bigger interests in this country and in other countries as well are able to speak for themselves. It can properly be said that they have not been exactly inarticulate in the years that are past. But it is the duty of those who represent the people in this parliament, as it is the duty of those who represent the people in other legislative assemblies throughout the world, to raise our voices on behalf of the little man; because very often his voice cannot otherwise be heard.
Yesterday we saw an amazing performance, at least so far as I was concerned. Looking on it as one who was attempting to gauge the position of those who were contending one way or the other, I could not help thinking that in the statement given by the Minister of Munitions and Supply there was a certain helplessness with regard to his position and that of the government. I am not going to attach a lot of blame to the Minister of Munitions and Supply particularly. I simply wish to attack a system which leaves him in a position of helplessness such as his words themselves would indicate on an occasion of this kind. Surely in Canada we have not yet reached the stage where a government need suffer from creeping paralysis in relation to international combinations with which it has sometimes to come in contact and with which it has to deal.
It is true, with respect to the contract as to which there was so much discussion yesterday and last night, that there are four nations involved, namely, Great Britain, the United States, Australia and Canada. It may be argued one way and then another with regard to the price which was paid for the product of these plants. But whatever may have been the underlying factor in the matter of price, I think it must have been made abundantly clear that at least the company involved was not losing anything in the transaction. Moreover, it seemed to me that the minister himself was not too sure that the actual price itself was the price that he would have placed upon the product. Rather, he left the impression that the price was set and that the governments of these four nations acquiesced and bought the product at a figure, not that they had thought was the proper one, but one that was set by an international combination.
Perhaps the government may be able to argue that from the point of view of selfish

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nationalism Canada might conceivably get a better deal out of the transaction than the other three. That is not a sufficient answer. It is not a sufficient answer to say that the Minister of Finance will be able to hold his pail and get some of the milk out of the whole arrangement by way of taxation. There is a broader and much more comprehensive picture.
Millions of working people in Canada, and the men and women on 750,000 farms, are trying to find for themselves a field for private initative and private enterprise and for free enterprise itself. When the minister speaks as he did about his first job being to fight this war, no one will disagree on that point. But when he speaks of fighting the war and not fighting international combines, it seems to me that this might perhaps be a proper statement to make if the minister at the beginning had been able to assure the committee that while the war was being fought the same international combines were not fighting a battle against the common people themselves. Then it becomes a question not of attack but of defence, and I wish to draw that to the minister's attention, because while we are fighting this war we must be careful that there are no interests, international or otherwise, that are attacking either economically or financially the common people, whether they be working men, farmers, or members of other sections of the community.
Of course mention was made of other interests than that which occupied most of the attention of the committee yesterday. I shall not deal with them except to say that it does indicate, I think, a condition of affairs bo which the declaration of the Progressive Conservative party, which met in Winnipeg last December, is pertinent. The party at that convention found it desirable and1 necessary, in the national interest, to make this public declaration which I wish to put on the record:
Every person able and willing to work must be assured of gainful occupation with sufficient means to maintain a home and family. The objective is full employment at fair wages under progressively improving standards. We oppose relief as a substitute for work. For the achievement of this objective-
And now I come to the point which I wish particularly to emphasize.
For the achievement of that objective-full employment at fair wages under progressively improving standards

and for the welfare and development of society, we strongly advocate the strengthening of the basic Canadian tradition of individual initiative and individual enterprise and opportunity, and the freeing of economic activities from bureaucratic controls. Government authority, however, should be maintained and exercised wherever necessary to. protect
primary producers, workers and consumers from exploitation through such abuses as price-fixing combines, monopolies and patent cartels. To those ends we believe that government should seek to create conditions under which the maximum volume of employment and the maximum national income may be assured through the initiative and enterprise of the people themselves.
Having in mind the desires of those who wish to follow the doctrine of individual initiative and free enterprise, which is in the interests of the people generally, in my opinion international combinations and cartels constitute one of the principal impediments to the achievement of this objective by the little man, whether he be in business, on the farm, in other primary occupations, in the workshop, in the plant or in the factory. Therefore these combinations, it seems to m,e, may well be the enemy of the ordinary man, and for that reason I raise my voice this afternoon in respect to this matter.
More than that; while it may be said that our friends to the left are very voluble in their criticism of this particular company, I suggest that while it is always necessary to arouse public opinion in regard to matters which need correction, it is equally important, if not more so, that the solution should be brought forward at the same time that the difficulty is outlined. I do not say this in any small, critical way of the group which brought up this matter yesterday, but I do believe that free enterprise and individual initiative never can find their true place in a world order in which monopolistic combinations exist; nor do I think that place can be found in a world order in which socialism is rampant. So as far as this party is concerned, our desire is expressed in the words which I read from the policy embodied in the convention platform, and I think that is one thing upon which the people of Canada will be generally agreed.
I should like to say a word in reference to the remarks of the hon. member for Stormont (Mr. Chevrier), who is the parliamentary assistant to the Minister of Munitions and Supply and who spoke this afternoon. The hon. member made it abundantly clear that as far as his department is concerned the problem of the renegotiation or adjustment of contracts could be dealt with on a voluntary basis; but he took care to indicate that the department would not hesitate to deal with these matters by compulsory methods in connection with contracts which they considered to be unfair, and he pointed out that the act gave the department power to proceed in this way. Following that statement I have a suggestion to offer in regard to the contract which has been under discussion. In the first place it seems
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to me, as I think it must seem to the government and the minister, that this is a contract which in the interests of the Canadian people as well as the interests of the united nations should be reviewed and renegotiated. There is no reason in the world why Canada should not take the lead with respect to the whole question of international combinations. I do not think this country wants to take a back seat, in comparison with other countries in the world, in exercising initiative with respect to the formation of a new order when this war is over. I like to think that this nation will be in the front line when it comes to worldwide reform, as we want to see this country in the front with respect to domestic reform.
Having that definitely in mind, together with the information that is available in respect to international combinations throughout the world, it seems to me that this country should at once take the lead in setting up an international body which would go into the whole question of these combinations; because, from the minister's own statement, this country would seem helpless to do it alone. Perhaps some will say we should have a royal commission to look into the allegations that have been made with respect to this company, and I would be in favour of that; I put myself on record in that respect now. But I think more than a royal commission in Canada is required; I think we need a commission having power to cover the whole gamut of the united nations. Since this war began we have gone a long way in bringing together representatives of the various nations to discuss different subjects. We have had a conference on the question of food, for instance, and there are other matters which are the prospective subjects of further conferences of the kind. But if we are to clear away the underbrush which may bar the pathway to peace in the years following this war we must undertake some of the hard things as well as some of the easier things, and I think Canada ought now to take the initiative in the formation of an international body which will see to it that in the years to come, whether we are at peace or at war, no group of people other than governments will be able to exercise almost super-governmental powers. I believe the representatives of the people must have control when this war is over. If that is not to be so, we should know it now. If our boys are not to have fought in vain for this democracy which we have envisaged, then we must make some move to be sure that our democracy is not simply a hollow sham when the crisis actually arrives. I suggest that not only in Canada but throughout the united

nations, as the representatives of the ordinary people in our own nation and perhaps also in an indirect way representing a cross-section of those in other nations, we have a right in time of war as in time of peace to see to it that these international combines and cartels are in our hands and that we are not in theirs. That seems to be at least a reasonable position for us to take in times like these.
I have no desire to attempt to arouse or inflame public opinion or to engender bitterness throughout our nation in time of war; that would be a despicable position for anyone to take, but I am serious about this matter, because as one of the representatives of the people I am alarmed at the situation in which we may find ourselves when this war is over unless we take some measures now. The united nations have shown in other respects that they can cooperate in a time of war, and that they can cooperate in their discussion of post-war problems. This looks to me like one of the major post-war problems we shall have to face.
In conclusion I suggest that the minister consider at once the question of appointing a royal commission to deal with all matters affecting this company, and other companies which may be similarly involved in worldwide international ramifications, which on the surface at least would seem to be inimical to the best interests of the ordinary man or woman. I would ask that he consider the whole question of such a royal commission, and that as a member of the government he, with the Prime Minister, should take the initiative in investigating the international arrangements and agreements under which a body such as that to which I referred a few minutes ago might be set up in the interests of a continuation of democracy and freedom in the years which lie ahead. Having made those investigations, I suggest that a move be made ait once toward renegotiating the contract in the light of what will then actually be found.
I make these observations with as much earnestness as any I have made since I entered public life, because I feel keenly and deeply that we as a parliament are not taking the steps necessary to ensure the kind of democracy that the fighting forces of Canada and of other countries who are engaged in the war effort will expect. I believe we are not taking the steps or providing the measures from which a true and a full democracy, a democracy which will make the world safe for the common man, and give him freedom of opportunity when the war is over, may be developed.

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Clarence Decatur Howe: Mr. Chairman, the house
leader of the Progressive Conservative party has made an eloquent speech by using the device of setting up a straw man and then proceeding to demolish it. He has asked me one or two questions, and I should like to ask him one. If he found that one company was making all the aluminum that was made by the allied countries at the outbreak of the war, or prior to the outbreak of the war, would he refuse to do business with it at a time when the production of aluminum meant the salvation of the British empire, for the reason that the interests of that company were spread over more than one country?
The production of aluminum' is necessarily a business that involves more than one country. It is impossible to manufacture aluminum out of the resources of Canada alone. The principal raw material is bauxite, which comes from British Guiana. There has been an intense search in other areas for bauxite, but only a very small' and low-grade bauxite deposit has been found in the western United States. It is being used with the south American bauxite to the extent that it can be used with that product, in order to relieve the hazardous procedure of bringing bauxite from British Guiana through the submarine infested Caribbean to Canada. It has been found, however, that it is impossible to do without a large proportion of south American 'bauxite in the manufacture of Canadian aluminum. The next most important ingredient is cryolite, which comes from Greenland. Without that cryolite the manufacture of aluminum by present processes is impossible. Another ingredient in a form suited to the manufacturing of aluminum is found in Newfoundland-, and must be brought from Newfoundland to Canada to be used in our production.
I have mentioned only three of the chief elements which must come to Canada from other countries. There are other ingredients which are brought in, and necessarily so. From the outset Canada offers for the manufacture of aluminum from within Canada, first, hydroelectric power, which is essential, and second, efficient labour. The hydro-electric power and the efficient labour have resulted in the great industry on the Saguenay river. The use of the water powers which generate hydro-electric power does not involve any depletion of Canada's resources. Water has been flowing over the cliffs of the Saguenay for many hundreds of years, and will continue to do so, whether or not it is developed into w-ater power.
So far as labour is concerned, the second resource supplied by Canada, I would say that through the industry on the Saguenay a great community has been built where no community existed before the coming of the Aluminum company. It would be well worth the time of any hon. member to take a trip through the Saguenay country, and the lake St. John country, and see the homes and the agricultural development which has resulted from the activities of the Aluminum' company in that area. I believe it will be exceedingly difficult to say that the operations of the Aluminum company within Canada 'have left Canada a poorer nation, or one lower in the social scale than it would have been had that industry not located here.
A fallacy has been built up that huge profits are being made out of the war by the Aluminum company. I think if the last three ciphers can be struck off the capital invested in Canada by the Aluminum company through the years, and the last three ciphers struck from the gross and net profits of that company, it will be found that the returns both as to gross and- net profits are reasonable in proportion to the invested capital. If that is not so, and when we can stop making demands on the Aluminum company for new capital facilities and new expansion in Canada, in British Guiana and in other countries where operations of direct concern to the Canadian production are taking place, then I think we can go to the Aluminum company and ask for a renegotiation of the contract. But unless we find that there is an excessive profit, as measured by a percentage of capital invested in the enterprise, there is no purpose in the Department of Munitions and Supply attempting to force a renegotiated price.
The price of aluminum is one of the few prices which have been reduced in the war years. Someone has said that aluminum was being sold at a lower price in 1911. I wish that same gentleman would tell me of some other article that was not sold at a lower price in 1911 than it is being sold in this year 1943. Aluminum is distinctive I believe, through the fact that while it has been expanding its production enormously, building new capital facilities for the purpose, and building a great power development, the price has been lower in each year of this war than it was in the preceding year.
My hon. friend has set up another straw man when he says that the Aluminum company is not subject to the laws of Canada. I should like him to tell me upon what he bases that information. Aluminium Limited is a creature of the Dominion of Canada.


Gordon Graydon: I did not say that.


Clarence Decatur Howe: The hon. member said that he wanted an international commission to deal with a subject that could not be dealt with by the Canadian government.
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Gordon Graydon: I know the minister
does not want to misinterpret my remarks. The reason I suggested an international commission, as the minister well knows, was the indication by the minister of his helplessness with respect to the whole question of international combinations. I was dealing with international cartels when I suggested that there should be an international commission. I was leaving the minister a loophole, but he seems to have got himself more involved.


Clarence Decatur Howe: I suggested no difficulty in dealing with the situation. I understand that Aluminium Limited owns all the plants which are now producing aluminum for the allied nations,, except those in the United States. The whole position outside the United States can be dealt with right here in Canada.


Gordon Graydon: Have we full power to deal with the question of international combinations?


Clarence Decatur Howe: Quite.


Gordon Graydon: Our responsibility then becomes that much greater.


Clarence Decatur Howe: The ownership of .properties in other countries does not create an international cartel. Is the Singer Sewing Machine company an international cartel? It owns a plant in almost every country in the world. So far as I know, that company is subject to the laws of the United States, just as Aluminium Limited is subject to the laws of Canada. There is no need of an international commission to deal with Aluminium Limited or with the Aluminum Company of Canada- they are both subject to the laws of Canada. Their properties within the dominion are subject to the jurisdiction of the federal government in the case of real property and to the jurisdiction of the provincial governments in the case of water powers.


Gordon Graydon: Why was it necessary to conduct a prosecution of this company under the Sherman anti-trust laws of the United States?


Clarence Decatur Howe: This company was never prosecuted under the Sherman act of the United States; the company prosecuted was Alcoa, the Aluminum Company of America.
I was definite in my statement and said that that company was prosecuted by the country in which it has its head office. H the government of Canada wishes to start a similar prosecution against either Aluminium Limited or the Aluminum Company,of Canada, that is a matter wholly within its jurisdiction. These companies are domiciled in Canada, and are subject in every way to Canadian law.


Mr. COLD WELL:: Aluminium Limited was established here to escape the United States laws.


Clarence Decatur Howe: Nevertheless it is established here, and it is subject to Canadian laws and to Canadian courts.


Leslie Gordon Bell: Quite right.


Clarence Decatur Howe: I am discussing the subject matter of the speech by the leader in the House of Commons of the great Progressive Conservative party. He seems to be leading his party into strange doctrines.


Mr. MACKENZIE (Vancouver Centre):: He even quoted the Winnipeg convention.


Mr. HANSON (York-Silnbury):: It would be well if my hon. friend would digest it.


Clarence Decatur Howe: We are getting it bit by bit and piece by piece.


Ian Alistair Mackenzie: Bits and pieces.


Clarence Decatur Howe: The need for aluminum has not passed, it has not lessened; as a matter of fact it is greater to-day than it has ever been. We were approached not so many months ago and asked whether we could further enlarge the production of aluminum in Canada, and we were obliged to say that we had reached our limit in that regard. The result is that an expansion is taking place in the United States, and necessarily so, to meet war requirements. I may be entirely in error, but my judgment is that it is better at this time to concentrate on obtaining aluminum to build aeroplanes to win the war -I think it would be utter madness to start a battle between the government of Canada and our Canadian producer of aluminum. The leader in this house of the Progressive Conservative party apparently would stop the war to start a prosecution.


Some hon. MEMBERS:: Oh, oh.


Gordon Graydon: Mr. Chairman, on a point of order. I have given the minister considerable leeway with respect to the statements he has made but-[DOT]


Mr. ROSS (Moose Jaw):: Very kind.


Gordon Graydon: The hon. member who has interrupted is usually quite courteous, but this seems to be one exception. In attempting to reach heights of rhetoric this afternoon the minister has built up a straw man of his own. He has done what he accused me of doing. He now says that I as leader of the opposition have suggested that we should stop the war in order to prosecute somebody under the combines act. I think the minister should

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withdraw that statement. I know he did not *make it intentionally, otherwise it might be more difficult to handle. I know he never thought for a moment that I said that. I did not suggest it, by inference, by implication or otherwise.


Clarence Decatur Howe: I know my hon. friend did not suggest that we should stop the war. I may be mistaken, and I wish he would correct me if I am, but I think he did suggest that there should be an immediate prosecution of the Aluminum company under the combines act.


Gordon Graydon: I did not say that either.


Clarence Decatur Howe: What did the hon. member say? I will read it to-morrow in Hansard.


Gordon Graydon: The minister may not have been paying as close attention to what I was saying as he usually does. I suggested that in view of the allegations which have been made in connection with this company a royal commission should be appointed to inquire into these international cartels and to find out whether this company actually formed part of such a cartel. In addition there should be a renegotiation of the contract in the light of the circumstances which have been brought to light. I went a little further and suggested that as this was an international situation, Canada should give a lead and set up an international body which would attempt to solve some of the difficulties which have been mentioned in this debate.


Clarence Decatur Howe: In reply to my hon. friend's suggestion, may I say that I have pointed out that Aluminium Limited owns plants in a number of countries, and necessarily so if it is going to obtain the various products that go to making finished aluminum here in Canada. I know it to be a fact that the personnel of Aluminium Limited comprise all the men who are experienced in the art of making aluminum. This happens to be the only company that is making aluminum in this country. As one who must provide aluminum for our war effort, I would not want to take the responsibility of taking the attention of the executives of Aluminium Limited from their task of making aluminum. I would not want to place them in the witness box at this time to tell about their pre-war business dealings.


An hon. MEMBER:: Another Bren gun inquiry.


Clarence Decatur Howe: I do not think this is the time for that kind of investigation. Aluminium Limited will be here after the war. If at that time it is felt that their proceedings were improper, they can be investigated.. The
Aluminum company, along with other citizens of Canada, have done their utmost to meet the requirements of the allies in the field in which they are expert. I have said it before and I say it again, that they have stretched their resources to the utmost in order to do a job in the winning of the war. It only needed a suggestion to be made that we must have more aluminum, that we believed that they were capable of doing more, to have them increase their production. There has been a singleness of purpose in the conduct of their business which I think could be taken as an example by any other industry in this country. As I say, this department is aware of their operating position; their company accounts are an open book; a firm of auditors audits the books, and the results of those audits are known to the department of munitions.


Mr. COLDWELL:: What is the firm?


Clarence Decatur Howe: Price, Waterhouse and Company.


Major James William Coldwell: Is not that the firm of audiors usually employed by the corporation itself?


Clarence Decatur Howe: I think so, but it is a responsible firm of auditors which operates in every British country and in the United States as well. Audits are made of the accounts of the company, the expenditures are known to the government, and we do not believe that the profits are excessive. If a few ciphers could be struck off the figures, and they were compared with the accounts of any other company doing business in this war, it would be found, I think, that the gross and net profits of this company are not excessive.


Mr. JOHNSTON (Bow River):: Have our own cost accountants investigated the cost of producing this product-investigated, for instance, the cost of labour and materials?


Clarence Decatur Howe: We have all the cost accountants we can get, but if we put them all on that operation it would take the rest of the war perhaps'' to follow through.


Charles Edward Johnston: Could not our own cost accountants check over the figures?


Clarence Decatur Howe: I am quite prepared to take the cost accounting of Price, Waterhouse and Company. I think most business concerns in the world have done that at one time or another, and I am prepared to do it. I think their cost accounting is to be relied on. The reason we have not renegotiated the Aluminum company contracts is that we have seen no necessity for doing so from the figures

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that have passed through our hands. I am very happy about the operations of the Aluminum Company of Canada in this war, and I wish to say so at this time.


Mr. BLACKMORE:: Mr. Chairman, the
whole discussion up to the present time has been very interesting to me and highly instructive. I have enjoyed every moment of it. I enjoyed the speech of the leader of the Progressive Conservative party. I enjoyed too the reference he made to the fine spirit of optimism which prevailed in the convention out in Winnipeg, as a result of which his party proposes to find jobs for everyone. But I do wish that somewhere, somehow the party had taken pains to indicate the technique by which they are going to find those jobs.


An hon. MEMBER:: Hear, hear-as in
1930!


John Horne Blackmore: That technique was altogether missing. If I have failed to see it I hope that one of my Progressive Conservative friends will call around and give me the authorities on the matter. I should like to know where they propose to find markets, and how they propose to guarantee markets, and how they propose to guarantee prices. I am going to tell the Progressive Conservatives here and now that unless they can find adequate markets for the production of Canadian industry they cannot put men to work, because work depends primarily and naturally upon work in industry, and industry depends upon the amount of goods that industry can sell. If industries cannot sell goods they cannot run, and if they cannot run they cannot employ men. Once the Progressive Conservatives get that thoroughly embedded in their thinking they will really begin to be progressive.


An hon. MEMBER:: And the Liberals too.


John Horne Blackmore: And the Liberals too will have something to look forward to. But where are they going to get the money to increase the purchasing power of the people to enable the people to purchase the goods which industry stands ready to produce? Are they going to raise it by taxation and by borrowing? If they are, then I might as well tell them they can give up now and save themselves a whole lot of trouble in a fruitless search. If they cannot find enough money to put into the hands of the people to give the people purchasing power with which to purchase the production of industry, which production industry is finding a market for now in this war, they will have fewer markets, less production and less work. The laws governing these facts are as irrevocable as the laws

of the Medes and Persians, only more so. I just thought that I should like to say that in respect to the Progressive Conservatives. I have no quarrel with them. I am just earnestly trying to find a solution, because I have sons and daughters and grandsons and granddaughters growing up in this country and I should like to see matters so arranged before I die that there is a chance for them all to find work if they want to work and make a living and build homes. But I have not found anything coming from the Progressive Conservatives or from the Liberals which has indicated how this is to be achieved.
With respect to the monopolies referred to by the leader of the opposition and by the hon. member for Rosetown-Biggar, I had not intended to refer to them, but inasmuch as they have been brought up I shall do so. How do monopolies develop in this country? How can they be controlled? Why is it that we do not now control monopolies? Is it that we do not possess the power to make laws, or is it that we do not possess the power of money over these monopolies? The answer to the second question is yes. We can make the laws all right in this country, and we can have the courts enforce them, but up to the present time we have not established unchallengeable control over money. We do not find ourselves able to control private industry-and money is the secret. I should like to know what the leader of the Progressive Conservatives would do in order to control these great monopolies after his international commission had discovered them.
I wish to turn for a minute or two to the remarks of the hon. member for Rosetown-Biggar and to give him just an idea of how I reacted to his excellent speech. I think that last night he did the finest job he ever did in parliament. It was splendid, ably delivered. I enjoyed listening to him. He told us all about the evil which exists, but he did not indicate how he himself would solve the problem which was presented by that evil.


Leslie Gordon Bell: Give me time. I had
not enough time last night.


John Horne Blackmore: I am going to be
listening when he gives his solution. I am greatly looking forward to it. I would say this in a general way. If the state took over that great aluminum company; if the state owned it, the state would build up a much greater bureaucracy than now exists and would find much greater difficulty in picking out and placing in the key positions the efficient men that private industries are able to get. Then the government, burdened down with the

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possession not only of the aluminum companies but of all the other companies which now form a most imposing and formidable array, would find themselves at a loss to know where to get the money to run them all.
There is another thought which came to me while the hon. member was speaking. He seemed to dislike the idea of international control. I agree with him one hundred per cent; I do too, but it seems to me, unless I am quite wrong, that I have heard the hon. member for Rosetown-Biggar speak with great fervour this session of having supranational governments in this world.


Major James William Coldwell: No.


John Horne Blackmore: I am glad I was mistaken, but I had the impression when I was reasoning with the hon. member for Essex East and the hon. member for St. Lawrence-St. George about their proposals to have a supranational government, and again later in the discussion over the SandWell case, that the hon. member for Rosetown-Biggar indicated a considerable amount of sympathy for this supranational idea.


Mr. MARTIN:: He is learning.


John Horne Blackmore: If there was a supranational government established, it would control not only our aluminum but every other industry; it would control all the business of this country and everything else in this country. We should be unable to establish any kind of control over it-which is a very serious matter and which has much importance in connection with the fine remarks of the leader of the Progressive Conservatives. I want to point out to him that I am not opposing but agreeing entirely with his remarks about democracy. If Canada cannot be mistress in her own home and) her own house, she cannot have democracy.


Gordon Graydon: I must have been right on that occasion.


John Horne Blackmore: Oh, the hon. member is right; everything he said was right. I am only finding fault with the things he left unsaid, and they are very important.
I wish to turn now for a few moments to the minister's remarks. I thought he gave a statement which impressed the whole country. I do not know when there has been a more striking and more valuable speech delivered in this chamber. I fancy that Canadians generally could hardly believe that their youthful Canada, which not long ago was called playfully "Jack Canuck", was capable of such
tremendous and varied production. The minister went so far as to use the following words, as reported in Hansard, page 3556:
Never again will there be any doubt that Canada can manufacture anything that can be manufactured elsewhere.
Every drop of Canadian blood in my body just leaped, every drop of British blood in me just raced with joy, when I read that. If Canada can produce anything that can be produced anywhere, is there any reason why Canada oannot stand completely independent and have absolute democracy and be completely mistress in her own home? None whatever; only the failure of Canadians to know how to manage the whole situation. I thought, when the minister gave his imposing array of accomplishments, what a triumph for individual enterprise! That much of the production has been a result of government cooperation we will grant, but in the main, by and large, it has been the result of private enterprise. There was no need of taking away private control, of socialization and all that kind of thing, in order to get production-and production is primarily what we need in any country in order that we may have a high standard of living.
Now, if Canada can produce the things she needs-and I am sure she can; scientific progress is proving ever more conclusively that she can-is there any reason why she should not do it? I have contended in this house ever since I came here that Canada should be producing her own sugar, and should have done so; and one of the gravest errors this government made was the failure to provide for the manufacture of Canada's complete sugar supply. I say that that will stand as a reflection on the government and as evidence, to the end of time, wherever it is known, of their lack of wisdom and judgment. We should produce our requirements of everything else that we can produce. If we produce what we can consume we can be more and more self-sufficient. And why not?
In the course of the debate on this three billion dollar war appropriation we have had a long talking time. If I remember correctly, we commenced the discussion of this appropriation on May 13. I have listened with great interest and thoughtfulness to most of the speeches which 'have been delivered, and I have asked myself this question, "Is this speech a 'wasting of time?" And I must confess that it is next to impossible to say of any speech which I have heard in the house that it has been wasting time. It has been good; and yet we have used much time, time that we needed for other things. Now we hear talk and read
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in the newspaper rumours about closing up in the middle of July. I do not know of anything that could strike consternation into the people of Canada more surely than if they understood all that this house has to take care of this year and it is then reported that the house would rush and scramble and tear in order to get through in the middle of July, or would leave undone the things it ought to do because it has not time to deal with them. The middle of July is just one month away. I say that to deal adequately with the various problems which this house is in duty bound to take care of between now and the middle of July is utterly impossible.	.
In a general way I would say that parliament must somehow reform itself. I do not know just how it should be done; I am not prepared to make a suggestion now; but certainly parliament must bring itself up to date. Ox-cart ideas and horse and buggy methods are not good enough for this streamlined high-powered age, and our achievement this year has clearly shown it. Parliament has clung too long to out of date ideas and antiquated methods. Parliament has shown thereby a dangerous lack of vision, and "where there is no vision the people perish." Both democracy and the people are in grave danger at the present moment of perishing-not in Canada alone, but on the American continent. Dangers are lurking on every hand, both within the nation and without. We members of parliament must be exceedingly vigilant and resourceful if we are to be equal to the demands made upon us in this day and generation.
This is the eighty-ninth day of the fourth session of the nineteenth parliament. In the main, hon. members have spoken freely; that is, we have free speech. But on the whole they have failed to achieve their desired objectives [DOT]-and I would include in that expression every member in the house. All I need to do is to refer to the old age pension question as an example. I think there is not an hon. member who does not want the aged people to receive $30 a month and receive it right away-not only the ones who are now receiving pensions, but everyone who has arrived at sixty years of age. Why are the members not able to attain their desire? There is something radically wrong; that simple little illustration proves it beyond the shadow of a doubt. When not only the whole of the people of Canada want a thing but all members of parliament want it, and we call this country a democracy, and still we cannot get it, then surely something is wrong. Where could I find more complete jutsification for the remarks I have just made? In other words, ideas and 
methods which we have had in this house up to the.present time as a whole have just not got us anywhere; they have not got us where we know we ought to be.
It is not so much that hon. members do not have freedom of speech, but that somehow they lack wisdom to use that freedom of speech effectively by translating it into action. True, we have prosecuted world war number two with a gratifying measure of success. But with the great underlying causes which brought on that war, this parliament has not once come to grips-not once-in all the seven years I have been here. I maintain that that, again, is a condemnation of this house, somehow, somewhere. This parliament ought to ascertain without further delay the causes which brought on this war. Surely they are to be found, and surely hon. members will agree about them when they are found. This parliament should face the facts fairly and fearlessly. It ought to find means of removing these causes once and for all, and it should seek to do so diligently and systematically, without passion or prejudice. The members now sitting here ought to see to it that every possible effort is made to remove the causes of war. Failure to ascertain the causes of this war, failure to find the remedy, and neglect to apply that remedy, will mean that this parliament will become guilty of criminal negligence in the highest degree and will stand condemned before generations yet to come. And the members now sitting here, in this year of Our Lord 1943, will betray their trust, will betray the people who elected them, will betray the boys and girls who fight, will betray the millions of workers who toil, will betray the babes in the people's homes, and the generations yet unborn. This parliament cannot escape responsibility. Its duty is to act now in the coming months of 1943.
There are several important matters that this House of Commons should deal with itself. Members will ask, how are we to do it? If the members of all parties, in an honest, straightforward endeavour, tried to do it they could do it; perhaps not in this house, but in this city, in this building. The great question is, Do we want to do it? The greater question is, Are we going to be honourable enough to do it? For example, we could determine as a group of members outside the house entirely, and independently of party lines, that we will find the truth and the whole truth and act upon it at once. We do not agree on it among ourselves in parliament, but outside, in the main, we do. What is the matter? We could appoint non-partisan committees to find the truth; and we could hear the truth in secret

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sessions if needs be; and then, if we unitedly insisted, suitable action could be taken and we could get results in this house, this year.
Among the problems that could and should be considered and dealt with, with satisfying thoroughness, the following might be listed: First, the treaty of peace. In the last war we fought right through, and no one seemed to have any idea what kind of peace we were to have. All we heard was that we were fighting to make the world safe for democracy and fighting a war to end wars; but just as we find to-day, not a person seemed to trouble himself about the question, how are we to do it? No one seems ever to trouble now about that question,-how is it to be done?
We should know what Canada's war aims are. I challenge any hon. member to rise in his place or to tell me outside that he knows what Canada's war aims are. Is that not a sad state of affairs? Then we should know what the various proposals are that are made in secret dispatches. Unquestionably it has been mentioned that certain proposals have been made. Why should we not know what they are? We are the members of parliament elected by the sovereign people of Canada in a democratic election. What an insult to our intelligence that we are forbidden to know these things! We should know them and should know exactly the difficulties in the way.
The hon. member for Rosetown-Biggar did the country a service yesterday when he exposed) this aluminum company and gave the details. No matter whether there is anything wrong that cannot be righted; he gave us the truth and we ought to know the truth. We ought to know what the truth is in regard to all these, things-such truths as the following one, for instance, which has astonished me! Somebody from Canada went around in 1937 and committed Canada to the undertaking that she would not increase her sugar beet acreage, that she would not do anything to increase it. No one in this parliament knew about that. That man made an agreement which has injured the people of this country incalculably during this war. Who was he and who told* him he could go and do it, and why was it that this country, which never heard about it, was bound by the agreement? And there must be many other agreements similar to that. This house should know them, every one of them.
We ought to know what is involved in the united nations' idea. Listen to the words as they are pronounced over the radio-united
nations. Well, now, what is involved in these united nations? We ought to know in detail so that everyone might understand. What are the proposals of these men who are working behind the scenes? How was it that at the Hot Springs conference Roosevelt tethered the press a safe distance from the conference? How was it that Morgenthau was so much annoyed when it leaked out in London that he had an international currency stabilization programme? Why was that? Am I to be told that the members of this house, in this responsible position, in this great country of ours with all its future before it, are not entitled to know these things? Have we lost the independence and courage of our fathers, that independence and courage which made magna charta a possibility? Are we afraid to be worthy to hold the positions we now occupy? We ought to know what is involved in this food conference. Every once in a while, through some speech made in some room in the Chateau Laurier or some assembly room of the House of Commons, some little thing leaks out that indicates that a good many things are contemplated with which members of this house do not agree, and yet it is all done in the dark somewhere, with the press tethered away -the press and parliament tethered. It is not in the public interest that we should know! We are immature, a species of glorified moron, I presume!


Mr. BENCE:: Not glorified.


John Horne Blackmore: Not even glorified. We ought to know what is involved in the Atlantic charter. There has been talk, profuse talk about the Atlantic charter-how we are to guarantee freedom from want and freedom from fear-with never a word about how it is to be done, who is to pay the cost of it, where the money is to come from. Never a word. I submit, Mr. Chairman, that is a most singular state of affairs. I want to know whether the members of this house, particularly in the Liberal party, intend to submit to that kind of thing. I wonder if they are sufficiently docile lambs to take that all the time lying down, all of them.


Mr. HANSELL:: I think they are.


John Horne Blackmore: We ought to know what share Canada is to contribute to this guarantee of freedom from want. Are we to have a mutual aid bill perpetuated through the years? If we are, how big will it be; will it be a billion dollars or two billion dollars, or will it be more; what do we intend to supply through that mutual aid bill, and how is it to be financed? I am surprised that I have never
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seen that question asked and answered in the press of our land; that is something which astonishes me. Canada certainly ought to know what her share in this glorious enterprise is to be; if she is to participate. Are we to have a lease-lend for Canada? Is the United States to be able to perpetuate the lease-lend arrangement for twenty, thirty or forty years; is her lease-lend arrangement to depend upon the particular administration that happens to be in power, so that if by chance everything should be operating nicely under President Roosevelt and he should be eliminated from the scene in time, the lease-lend arrangement will be cancelled, and the people who thought they were guaranteed against want will find themselves at loose ends, as they were before the present war? Is that to be the arrangement; and, if so, are we, as members of this house, to submit to anything as insecure as that? Yet I do not see any evidence that we are to learn the truth about it; I say we ought to learn the truth before we leave this house.
The other day I read a statement by President Roosevelt, and I have read1 two or three similar statements, to the effect that the first thing to be done is for each nation to set its own house in order. With that I completely agree. Surely we ought to set our own house in order, but we cannot do that unless we have certain powers. We must have unchallengeable control of our currency and credit, of our production and of our price structure; we must have complete control of our own markets within our own country. If we cannot have these powers we cannot set our house in order. Yet practically all the supranational government schemes propose to take away from us each and every one of those powers, in greater or less degree, so far as I have read accounts of them. Every single hon. member should understand that fully. We could use the empire parliamentary association. Far be it from me to cast any reflection upon the empire parliamentary association, but I must say that I have been deeply disappointed in the amount of real learning we have obtained from that association. I do not see why we should not bring it really to life. I do not see why we should not arrange study clubs in which we might hear the truth from all sides, instead of having a lecture by some-I was going to say "emaciated"-relic of the League of Nations, who comes and tells us his idea and goes his way, making place for someone else to come along and tell us the same thing at another time. I am becoming entirely fed up when I think that all the speeches over the radio, all the speeches in these clubs and that sort of thing are along the same line, and all strangely resemble the propaganda which Sir 
William Beveridge apparently was sent or brought to this country to carry on. I am suspicious in the highest degree. I would say that not only should we learn through the empire parliamentary association or through some other dependable means, but we should -be able to take our knowledge to the remotest parts of Canada, to every constituency, so that the people may share it.
I think it is time this house faced up squarely to the problem of what we intend to do about our national debt after this war is over. I have gathered the impression that hon. members just look upon this as a very touchy question and steer clear of it as something they would rather not face. Are we not aware that the boys and girls who are now fighting our war and who will sit in this chamber twenty years from now will have to face this problem, that they will not be able to leave it alone? What sort of people are we, who are supposed to be taking care of their interests, when we are so neglectful of this vital matter?
It is also time we know what we intend to do about the unemployment situation after this war. I read the other day that it was estimated by rather responsible men in the United States that shortly after the conclusion of the war there would be twenty million unemployed in that country. If the number of unemployed in Canada is in relation to that figure, is it not high time every member of this house was exercising himself with the deepest concern in regard to this matter? How are we to handle our tax structure? I am positively alarmed when I talk with people who are in the grip of the tyrannical tax structure which has been imposed upon the people of this country; it is merciless, implacable, immovable, inescapable, crushing, devastating, disheartening; it is a horrible thing, but there is no evidence whatever that it will be relaxed in any degree at all after this war is over. Yet we members sit here supinely doing nothing about it, only piling up the debt so that the structure may bear upon the people with even greater severity.
Another important matter that must be considered in connection with this debate, and one which I thought of raising several times, is the question of what we shall do with our armed forces after the war is over. As the minister for naval services was talking about his superb navy, the thought ran through my mind: Are we to have that superb navy after the war, and is everyone in Canada to be taught that it is necessary? Will parliament cheerfully vote the supply, year after year, to support that navy, or shall we have people here like those bewildered creatures who sat

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here in 1937 and moved that every estimate be reduced to $1, who kept up their propaganda until they fooled the people of Canada into believing that we did not need any defences? That is important to know, whether we are to have a strong navy, a strong army and a strong air force after the war, because if we are to have a strong navy and army we will build for permanence. Not only will we construct the buildings; we will build the concept in the minds of the people, so that they will know, and they will be careful not to send to this parliament people who do not know that we must have a good strong army, navy and air force to be able to defend ourselves. Are we to have strong defence forces, or are they to fall into decay?
Then let us go on and ask ourselves this question not only with respect to Canada but with respect to the British commonwealth. During the period following the Napoleonic wars until the outbreak of the first great war the world witnessed one of the most peaceful eras in its history. There may have been many small wars, but there was nothing like the conflagration that burnt out at the beginning and at the end of that century. Why was that? Those who are fairly well informed tell me that there was established what is know as the pax Britannica, the British peace, because -the British people were strong enough to maintain peace. Are we now prepared to build up a British commonwealth organization, a cooperative arrangement, as a result of which we can have once more something similar to a pax Britannica? That is something that has worked successfully already. We ought to know about -this possibility, but as a whole we do not know a thing about it. We have not done any constructive thinking or talking on it in this house.
Then the matter of social security ought to be taken care of by -this house. We have heard the Beveridge scheme. By the confession of Sir William Beveridge himself, if I gathered it aright, his scheme is impossible and useless unless two things are guaranteed: first, full employment; second, a stable and equitable price structure. If we could guarantee employment and a stable and equitable price structure in Canada we would need no Beveridge plan. The big problem facing this house and this country is how to establish complete employment and a stable and equitable price structure throughout the country. That was the problem facing the Progressive Conservatives when they met. Strange that so many people overlook these things! Strange that so many of these newspapers which watch with almost malignant
scrutiny the words of members -of this house, in order to pounce upon them and write offensive editorials about them, have not noticed the discrepancy in the Beveridge report, and commented upon it! Never a word! Is there a mutual agreement to leave these things alone?
Another matter which ought to be taken up before the house continues its deliberations for another week is that of the sufferers who are at present enduring hardships that are a disgrace to the country.. I have already referred to the old age pensioners. Let me now refer to the war veterans of the last war, and the widows of war veterans. They are now growing old and are rapidly diminishing in number, but they still suffer cruelly, while the representatives they have sent to Ottawa somehow or another seem to forget them-seem to forget everything, except to talk.
Perhaps the most imminent danger which confronts us at the present time is the idea of supranational government, to which I have already referred. Its advocates and their disciples always urge that supra-national government will prevent war, but they never show how it will be done. I say supranational government may try to prevent war, but it will render universal rebellion inevitable-rebellion with civil strife and bloodshed and famine over the fair stretches of Canada and the United States.
Every scheme of supranational government I have read about-and I have read all I could get my hands on-embodies international control of credit and currency. There is much talk about the control of production, the lowering of tariff barriers and other restrictions to trade. Somehow or another the men who talk about world problems do not take the trouble to point out why tariff restrictions are erected by weak nations, and why they impose exchange control. These men rarely explain that nations imposing trade restrictions do so in an- endeavour to improve their economy, because they fall behind in the -contest for trade, and therefore have an adverse trade balance. And of course the advocates of supranational government never talk about the existence of such a cause. They never mention the remedy except in most general terms-beautiful, high-sounding words, which, somehow or another seem to mesmerize many people.
Supranational government can be avoided with -all its dangers. May I read -a statement which hon. members will find in the Ottawa Citizen of January 11, 1943, on the back page under the heading "Plan For Permanent Peace." This is a criticism of a book by
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Doctor Hans Heymann. Strange how so many of these German names get into the books having to do with this supranational plan. It is an astonishing thing; I cannot quite understand it. It reminds me very much of those international financiers. The article quoted from the London Chamber oj Commerce Journal explains that the idea conveyed by the whole book is of a world bank. "But Doctor Heymann is a financial expert and all his ideas on post-war reconstruction find their inevitable culmination in a 'huge new international banking mechanism'-a world bank to create money and credit." . . . "While nations may agree to some limitation of their sovereignty in respect of their external affairs, any proposal which involves interference with-much less control of-their internal affairs, as Doctor Heymann's scheme does, would mean the abandonment of the most important of President Roosevelt's four freedoms, freedom from fear. Currency and credit are the master keys to the economic and social life of any community, and for a nation to be asked to hand those keys to a clique of international bankers is calculated to strike terror into the hearts of millions who are facing death to preserve their right to manage their own affairs."


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


John Horne Blackmore: I shall take another occasion to finish my speech, in case hon. members do not wish to hear the rest of it now.


Mr. NOSEWORTHY:: I was surprised this afternoon at the complacency and confidence with which the minister came to the defence of the aluminum interests, and the complacency with which he passed over the suggestion that the situation warranted an investigation of some kind. I was surprised furthermore yesterday by the readiness of the Minister of Mines and Resources (Mr. Crerar) to admit the inability of the government to deal with this international cartel.
Hon. members who spoke on this subject yesterday dealt with the international side of aluminum development, and the monopolistic control which had been effected in the development of aluminum. There is another monopoly which to my mind is far more serious to the people of Canada than that affecting aluminum. I refer to the monopoly of electric power which this great company has attained in Canada. I am confident there is not an hon. member in the house, regardless of his political affiliations, regardless of what he thinks of private ownership versus public ownership, who does not recognize the danger 
to public interests and the danger to industr" in this country that lies in permitting any monopoly of our water power. That power is the very lifeblood of industry, and any monopolistic enterprise which can gain control of the right to develop power from the water that flows in our rivers has gained a stranglehold on the very industry of our country.
I doubt that there is an hon. member who is not convinced that any monopoly by any privately-owned company of the sole right to develop power from our rivers, and to distribute that power, is inimical to the public interests of our country.
In his speech yesterday the minister said:
It has been suggested that this development-
He was speaking of Shipshaw.
[DOT]-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.
I am not as confident as the minister of the truth of the statement that the St. Lawrence development was blocked not in Canada but in the United States. I want to show to the committee this afternoon that the recent development of Shipshaw marks the successful culmination of a long series of attempts on the part of the aluminum interests to perfect an international pool of power which would not only keep competing aluminum companies out of the field, but would render the state of New York and the provinces of Ontario and Quebec almost entirely dependent on power from their development in Quebec, for their supply of the very lifeblood of modern' civilization.
This battle for power control and for the establishment of an international pool of power has been carried on for more than twenty years by lobbying, by litigation, by the organization of holding companies and trusts, and by every means that such a powerful corporation could use. For more than twenty years the aluminum interests have sought, first, to get control of the St. Lawrence water project; second, failing that, to obstruct its development as a publicly-owned enterprise and, third, to carry out in the meantime a policy of encirclement, whereby it could get control of all other available power and thereby preempt the power market. By successfully obstructing the development of the St. Lawrence project the aluminum interests have rendered it necessary for New York state, the province of Ontario and the province of Quebec to enter into contracts with private companies, practically every one of

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which is tied up directly or indirectly with the aluminum interests. In this connection let me quote the periodical PM of May 23, 1943. An article, dated Washington, reads:
The Shipshaw power project on the Saguenay river in Quebec was envisioned by Aluminum Company of America (Alcoa) as far back as 1925 as a means of preventing public development of the St. Lawrence.
Documents and testimony on file in the federal district court here in the government's antitrust suit against Alcoa disclose that:
Alcoa bought the Saguenay river power sites, including Shipshaw, from the Duke-Price interests in 1925 and 1926, after it learned that they had planned to use this power to manufacture aluminum in Quebec in competition with Alcoa.
So anxious was Alcoa to prevent this that it paid $40,000,000 for these power sites, then largely undeveloped. The province of Quebec had sold these sites a quarter century earlier for $40,000.
On the eve of the purchase in 1925, Arthur V. Davis, chairman and directing genius of Alcoa, sent Alcoa's chief hydraulic engineer, James W. Rickey, to make a survey of the Saguenay properties.
Rickey at that time outlined the possibilities of the Shipshaw power development, a second "Boulder Dam," construction of which has now been financed for Alcoa by the American, Canadian, British and Australian governments.
Alcoa's chief engineer saw Shipshaw's huge power possibilities as a means of so "encircling" the St. Lawrence project that it could be developed only on Alcoa's terms or by Alcoa.
The plan was to use Shipshaw power to "sew up" these areas in which St. Lawrence power would have to be sold: Montreal, Ontario, upstate New York.
It was hoped thereby not only to prevent public development of the St. Lawrence, by preempting the markets for its power, but also to block further public power projects by Ontario's great publicly owned hydro electric.
_ In pursuance of this grand strategy, Alcoa in July, 1925, acquired the Chute 5 Caron and Shipshaw sites; and in May, 1926, the rest of the Saguenay power sites and properties.
Conferences looking toward disposal of this power, when developed, were held by Leighton G. McCarthy, then Alcoa's Canadian counsel now Canada's minister to Washington, with two key Canadian figures.


Clarence Decatur Howe: On a point of order, may I ask my hon. friend what he is reading from?


Joseph William Noseworthy: I said I was reading from PM of Sunday, May 23.


Clarence Decatur Howe: Is it an editorial?


Joseph William Noseworthy: It is an article by I. E. Stone, dated Washington.


Clarence Decatur Howe: Mr. Chairman, is that in
order?


Joseph-Arthur Bradette: I believe in committee of the whole it is permissible to quote articles.


Clarence Decatur Howe: I do not wish to argue with the Chairman on the point of order, but I think it is out of order to read an editorial bearing on the debate.


Major James William Coldwell: Mr. Chairman, I realize that you have given your ruling, but may I say to the Minister of Munitions and Supply that it is only editorial comment on the activities of the government or of a member of the house that is against the rules of the house. The hon. member is simply reading an article from a newspaper, not an editorial, which does not reflect upon the House of Commons or upon any member thereof.


Joseph William Noseworthy: The article continues:
One was Mackenzie King, then Prime Minister, as he now is again, and Sir Adam Beck, then head of Ontario hydro electric.


Lionel Chevrier: Mr. Chairman, on the point of order, citation 183 reads:
When a complaint is made of a newspaper, the newspaper itself must be produced, in order that the paragraphs complained of may be read.
As I understand it, the hon. member is reading from an article with appeared in PM. I believe he is reading the Whole article, which appears to me to be objectionable. As the leader of the Cooperative Commonwealth Federation has said, he can read passages of an editorial and comment upon them, but I submit with deference that he cannot do what he is doing now.


Major James William Coldwell: He has the paper there.


Joseph William Noseworthy: I have the paper. I am reading only selected passages which have a bearing on -the point I am attempting to make.


Joseph-Arthur Bradette: I have no doubt that in committee of the whole an hon. member has the right to quote an editorial, even in toto, as long as he gives the source of his information and makes the statement upon his responsibility as a member of the house.


Mr. MacINNIS:: The point raised by the hon. member for Stormont (Mr. Chevrier) has no relevancy at all. A newspaper is not being complained of. The hon. member for York South (Mr. Noseworthy) is merely reading from a paper, after having identified it.


Joseph William Noseworthy: The article continues :
The basic strategy for these moves is outlined in a ten-page letter and report which Rickey sent on February 25, 1925, to Arthur V. Davis, then vacationing in Palm Beach.
"If this scheme could be put through," Rickey reported to his chief, "decision regarding the St. Lawrence development is of secondary importance, but when agreement is finally reached we would occupy a very strong and strategic position."
The very nature of the St. Lawrence poweT and waterway project lends itself to the purposes which the aluminum company have set

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out to achieve. The project requires the ratification of agreements in which five governments are involved. For twenty years the company has been able to provide obstructions to the project by working through one or more of these governments and committees or boards set up to work out the agreements. Let us review a few of the high lights of the tactics they have used to achieve their full purpose of securing, first, control of St. Lawrence power; second, the obstruction of the development of St. Lawrence power by government and, third, the gaining of control of other available sources of power. I shall not weary the committee with the long and involved story of how since the beginning of this century the aluminum interests have persistently and successfully gained control of the production and distribution of electric power in the Niagara and St. Lawrence areas or the details of the story of their obstructing the development of power by public ownership. I shall touch on only a few of the high lights.
The company later known as the Aluminum Company of America was first organized in the state of Pennsylvania in 1889. Its name was changed in 1907 to the Aluminum Company of America. In that year it set up a holding company, in which it held 100 per cent of the capital stock, for the purpose of securing power sites. It became interested in the Niagara power when that power was first converted from hydraulic power to hydro-electric at the turn of the century. It then entered into an agreement with the Niagara Falls Power company by which it attached its own generators to the company's plant and by which that company agreed not to sell power to any other company producing aluminum. It has from that time to this been the largest purchaser of power from the Niagara Falls Power company.
Let me give one little incident. That company, so closely associated with aluminum has fought through the courts of the United States for years to get authority to divert the entire United States share of power at Niagara Falls. It has carried on litigation over the years to secure that diversion and was only finally stopped by judgment given in the United States court of appeals on December 2, 1942.
At the time the company's name was changed to the Aluminum Company of America back in 1907, it organized a company known as the Long Sault Development company-again a company entirely owned by Aluminum-for the purpose of damming the St. Lawrence at the Long Sault rapids. It got so far as to get legislation through the New York legislature, and then applied in 1907, and in 1909, 1911, and

1912 to get legislation through the congress of the United States. Canada was drawn into the picture, and the matter came several times before the Canadian government and the International Joint Commission. In all the discussions there were three men who were prominent, and whose names have been prominent right down through the years in connection with Aluminum's control of water power. They were: Leighton McCarthy, K.C., counsel at that time for the Long Sault Development company and the St. Lawrence Power company; T. W. Rickey, engineer for the Aluminum Company of America; and Arthur Y. Davis, president of Aluminum. That enterprise, that attempt to dam the St. Lawrence, was only blocked after years of litigation when the United States court of appeals in 1913 supported the repeal of the 1907 legislation. I should just like to read what Governor Alfred Smith of New York State had to say when speaking on this subject on February 1, 1926, as reported in the fifth annual report of the Power Authority of the State of New York for the year ended December 31, 1935. Governor Smith said:
The two great sources of hydro-electric energy are at Niagara falls and on the St. Lawrence river. Corporations eager to get control of these water powers have been working on the project for years. As far back as 1907, by special charter, the right to develop the St. Lawrence river was granted to the Long Sault Development Company, which special charter was repealed by the legislature of 1913. In no way discouraged during all the years that have passed, private corporations still have their eye on the great power possibilities of the St. Lawrence river. ... If both of these sources of supply fall into the hands of private companies, the possibility for future state development will be lost forever.
Arthur V. White, reporting to the Canadian Commission of Conservation in 1913, had this to say at page 13 of his report:
Back of the activities to secure control of all the water-power development, power transmission and other rights and privileges at, and in the vicinity of, the Long Sault rapids is the Aluminum Company of America, commonly known as the Aluminum Trust. Connected with the Aluminum company is the St. Lawrence Securities Company, a holding company through which provision was made for an issue of $1,550,000 of stock to provide funds:
"for the actual cost of improvements of the canal and other property of the St. Lawrence River Power Company, or the development of any water rights along the Little Sault owned or controlled."
The St. Lawrence Securities Company-
That was a holding company for Aluminum, and in which Aluminum held 100 per cent
of the stock.

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The St. Lawrence Securities Company holds securities in the following United States companies:
St. Lawrence County Electric and Water Company
The St. Lawrence Water Company
The Massena Electric Light and Power Company
The St. Lawrence Transmission Company
The St. Lawrence River Power Company, and
The Long Sault Development Company.
Upon the Canadian side of the river the Aluminum Company of America and the St. Lawrence River Power Company (of New York state), either directly or indirectly, control the St. Lawrence Power Company and the St. Lawrence Power Transmission Company. The Stormont Electric Light and Power Company- the distributing agent for the St. Lawrence Power Company-and the Cornwall Street Railway, Light and Power Company, are both controlled by the Sun Life Assurance Company of Montreal.
In the year 1920 the Ontario hydro electric commission became vitally interested in developing St. Lawrence power.


Mr. MacNICOL:: I had hoped that my hon. friend would refer to the fact that the International Joint Commission had during the last war granted the Aluminum company the right to erect a barrier across the river, and they have never been able to get them to remove that barrier since that time.


Joseph William Noseworthy: Thank you. The Ontario Hydro Electric Commission became very much interested in 1920 in developing St. Lawrence power. Sir Adam Beck realized at that time that if Ontario's needs for power were to be met by publicly-owned plants it would be necessary to begin the development of the St. Lawrence power project before the Niagara power project was operated to its capacity. In 1921 the Ontario hydro electric commission submitted to the International Joint Commission an elaborate statement and an engineering report respecting the proposal to develop the St. Lawrence waterways. At the time the commission went on record as being in favour of proceeding with the development of the international section of the river first. That policy is in strange contrast with the policy adopted by the Ontario hydro electric commission some years later, after the Aluminum company had done their lobbying, as I shall show later in this speech.
Following this application in 1921, the Ontario hydro electric commission formally applied to the Canadian government for approval of its plans for the initial step in a two-stage development of the international section of the St. Lawrence river. Before making this formal request, in July, 1924, a delegation from more than 350 Ontario municipalities requested the dominion government
72537-232J
for early approval of the commission's plans. Unfortunately for the publicly-owned hydro system of Ontario, the aluminum interests at that time, in 1921 and 1922, had very influential friends at court in New York state. The governor of the day and the legislature of New York at the time were much more favourably inclined to private enterprise than to a publicly-owned enterprise. Legislation was granted permitting the Aluminum company and other companies to lease state-owned power sites for a long period of years, and between 1921 and 1926 application was made for twenty-two of those leases. A company owned outright by the Aluminum company was just on the point of getting its lease when Governor Alfred Smith was elected on the platform of a publicly-owned St. Lawrence system and was able to veto the lease which was just about to be issued to the Aluminum company's subsidiary. At the same time, in 1921, the Aluminum company joined forces with the General Electric Company and the du Pont interests, and they organized what was known as the Frontier Corporation. The Aluminum company maintained a controlling interest in that corporation. That corporation controlled all the privately-owned rights to power on the United States side of the St. Lawrence together with subsidiaries on the Canadian side at Niagara and Cornwall. I can give the committee the purpose of that corporation as it was given at an investigation held by order of the United States senate and reported in their document No. 72:
The Frontier Corporation was organized for the purpose of acquiring from Aluminum Co. of America, E. I. du Pont de Nemours & Co., and General Electric Co. certain lands, water rights, water privileges, and flowage rights on the St. Lawrence river in the towns of Massena, Louisville, and Waddington, N.Y.
It also acquired certain maps, surveys, and engineering data concerning the development of hydro-electric power along the St. Lawrence river.
It also acquired all of the issued outstanding capital stock of St. Lawrence Power Company, Ltd., an operating utility in Canada. It also acquired all of the authorizations to dam the St. Lawrence river, which might be granted to the Louisville Power Corporation or St. Lawrence Transmission Co., that company now being called the St. Lawrence Valley Power Corporation.
I have already indicated that the Aluminum company controlled the Frontier Corporation. That corporation was particularly interested in watching every move made by the Ontario hydro electric commission. This interest is evidenced by the activities of the corporation's legal counsel in Canada, Mr. Leighton McCarthy, throughout the years 1922 to 1926. During an inquiry which was held before the
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Federal Trade Commission at Washington in 1934 there was presented to that commission certain accounts rendered by Mr. McCarthy to the Frontier Corporation. These were presented as exhibits. They were his accounts for his services performed in the interests of the corporation in Canada. They show clearly the Aluminum company's interest in Ontario hydro.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.


Joseph William Noseworthy: When the committee rose at six o'clock, I was at the point of putting on the record a number of accounts rendered by Leighton McCarthy, K.C. to the Frontier corporation as evidence of that corporation's interest.in Ontario hydro.
The first of these accounts covers the period from October, 1921 to May 31, 1922, and is itemized as follows:
Fee to Mr. Leighton McCarthy, K.C., generally representing interests of corporation in Canada (including attendance before the International Joint Commission, interview with members of Canadian government and senate and Sir Adam Beck and reporting thereon. . . .
And further on:
Procuring statutes and regulations re water power and water privileges, forwarding same to Mr. Rickey, perusing and considering special report from Mr. Rickey regarding the meeting of International Joint Commission at Washington, preparing special report on the Canadian situation before the formation of Frontier Corporation.
The second covers the period from June 1, 1922 to May 31, 1923, and is itemized as follows:
Fee to Mr. Leighton McCarthy, K.C.. generally representing interests of corporation in Canada, including special interviews with members of Canadian government, Senate, House of Commons, Sir Adam Beck, and reporting thereon. . . .


Clarence Decatur Howe: Mr. Chairman, I suggest to you that this discussion is entirely out of order. The item under consideration is additions and extensions to plants, and not one dollar of the item has anything to do with the Aluminum Company of Canada. We never paid for extension of plant of the Aluminum Company of Canada. We simply had nothing to do with water powers, either the St. Lawrence or any other. So far as this item is concerned, we have paid not a dollar in assistance in the building of waterpower developments. I ask you, Mr. Chairman, if this discussion is relevant to the item?


Mr. KNOWLES:: On the point of order may I remind you, Mr. Chairman, that when the Minister of Munitions and Supply introduced this matter on Friday, in the very able review which he gave, he made reference to the expansion of the aluminum facilities and referred to it as the largest that he had, and he also made reference to the enlargement of water-power facilities at Shipshaw. In view of his reference to these two phases of industrial development, I submit that this discussion is in order.


Joseph-Arthur Bradette: It can readily be understood that sometimes, in the consideration of estimates of this kind, where such large amounts are involved, it is almost impossible for members to confine themselves strictly to a particular item. I must take the same view, with regard to this item, that I took with reference to item 1, in the estimates respectively of the army, the navy and the air force, and I think the committee will agree with me that when the discussion of this first item is concluded hon. members should remain within the limits of the item that happens to be under discussion at the time.


Joseph William Noseworthy: The third account covers the period from June 1, 1923, to May 31, 1924. Among other items is this:
Fee in Montreal on January 20 and 21 and conference with Messrs. Bishop, Keefer, Rickey, et cetera, fee on interviews with the Honourable Mr. Mackenzie King and members of his government discussing, fee on interviews with members of government of province of Ontario, fee on special interviews with Mr. Gaby, discussing, visit of representatives of municipalities to Ottawa.
The fourth period is from January 1, 1924, to May 31, 1925.


Clarence Decatur Howe: Mr. Chairman, I feel I must
challenge your ruling on that point. The hon. member is discussing the Ontario Hydro Electric Commission and accounts rendered by the firm of McCarthy and McCarthy in connection therewith. I suggest that this is so remote from the item before us that I must challenge your ruling.


Mr. NICHOLSON:: Mr. Chairman, you
have given your ruling in this matter. You ruled that the hon. member for York South was in order and that ruling settles it.


Clarence Decatur Howe: I appeal from your ruling,
Mr. Chairman.


Lionel Chevrier: May I say a word in
connection with this. We have been adhering, as I understand it, to standing order 58, with which the Chair is quite familiar. It states that speeches in committee of the whole must

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be strictly relevant to the item or clause under discussion. This has not been a discussion of extension to aluminum plants, but has been a discussion of the history of aluminum, the history of the St. Lawrence waterways, in so far as aluminum may or may not be concerned, and it is entirely out of order under that standing order.


Joseph William Noseworthy: Speaking on the
point of order, at the beginning of my speech I referred to the statement made by the minister yesterday and intimated that I intended to show that the minister was speaking without full knowledge of the subject.


Joseph-Arthur Bradette: On the point of order,
if I understood correctly, it was agreed that a general discussion would be allowed on the first item of each of the three departments with which we have already dealt, and I think the same latitude should be allowed under this item. If, however, hon. members attempt to discuss irrelevant matters on other items we shall have nothing but confusion. In considering the estimates of the departments already dealt with, constructive and general criticism was allowed at the beginning, and perhaps the committee would find it convenient to follow that practice under this item. I am sure, however, that no member of the committee would like this discussion to continue indefinitely, and most speakers this afternoon and yesterday would have been out of order on item 1, if the rule were strictly applied. The committee seemed satisfied to allow the discussion to be fairly general on the first item, but again I would ask that the debate be confined to the item before us. I would ask the committee to be tolerant for a little while longer on account of the freedom given to previous speakers in dealing with the Department of Munitions and Supply.


Clarence Decatur Howe: Do you put a time limit on your tolerance, Mr. Chairman?


Joseph William Noseworthy: Continuing this same item-


Mr. DONNELLY:: I should like to know what the hon. member is reading from.


Joseph William Noseworthy: I am reading from evidence submitted to the chairman of the federal trade commission, in an investigation of Niagara-Hudson Power Corporation, and aluminum, paper No. 72, presented to the United States senate.


Joseph-Arthur Bradette: The hon. gentleman has now spoken for over forty minutes.


Joseph William Noseworthy: Taking into consideration the interruptions, Mr. Chairman?


Joseph-Arthur Bradette: I have made allowance for the interruptions. The hon. gentleman was supposed to have until five minutes after eight, and I allowed him to continue until thirteen minutes after eight.


Mr. CHURCH:: I wish to take only a few moments, because I have very little except constructive criticism to offer. I do wish, however, after having consulted the Speaker and the Clerk, to direct attention to statements made in an article appearing in the weekly newspaper known as the Montreal Standard last Sunday by one Austin Cross, headed "Conservative Slam at the Navy Seen as an Obstacle." I believe this is the same gentleman who wrote a book attacking the present Minister of Munitions and Supply and almost every other member of the cabinet, notwithstanding the fact that there is a war on. I was surprised to find this book in the library, in view of the statements it contains about members of the cabinet and of parliament. I have no quarrel whatever with the newspapers; as I said during the transportation fight in 1920 and 1921, you can never answer a newspaper because it always has the last word.
I did not raise this question on a motion to go into supply because that would prevent the minister from going on with his work, and personally I should like to see the house close by the end of the month, but I am only a private member. Any time I have spoken it has been at the request of the whip, though in addition I have asked a few questions. Of the matters I have brought up in the house, ninety-five per cent have been in an endeavour to secure better care, comfort and treatment for the members of his majesty's forces in this country. This article to which I have referred is grossly libelous, false, and malicious, and not for the public benefit. I have never criticized his majesty's forces at any time. Why should I criticize them? I have been working with them all my life, and I have a great number of friends in the army, navy and air force in both wars. As chairman of the Toronto harbour board I was a friend of the masters and mates' association on the great lakes when the working people on those boats and the merchant marine had far fewer friends than they have to-day. I object to this sort of scurrilous criticism, which is not criticism at all. This reporter gives a garbled account and no report at all of what happened in this chamber. Fair reports of the proceedings here are privileged, and rightly so; they may criti-size members of parliament as they wish, but cannot libel them. This was an unprovoked attack on me. I complain that the report of what I said was garbled, that this is not a fair report and no report at all, and that it has
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caused me a great deal of damage in that it has advertised me as public enemy No. 1 of the men who are serving with such courage on land, on sea and, in the air, when I have served so faithfully our forces all these years.
Then in the Montreal Star of last Thursday the same columnist added insult to injury, when he said that the house witnessed the resumption of an exchange between myself and one of the ministers, and again accused me of attacking the navy. I said, "How could I attack the Canadian navy when in 1926 to 1928 there was no navy to attack?" I was referring to the peace-time strength of the navy, in 1926, and I was not the only one to criticize it. This very newspaper was one of the chief critics of the policy of the government of that day which was throwing away our defences, especially the navy to which we owe so much. I am not going to fire off a rifle to attack a mosquito, but I am not going to put up with this sort of thing any longer. I am a Conservative; I have never been anything else, but I was a progressive Conservative long before that name was adopted by my party. I told my leader why I could not go to Winnipeg, and he was satisfied with my reason. Since the beginning of the war we have had an honourable agreement among the parties of this house that the war is to be paramount and that politics should be put on the khelf for the duration. That is what I have been faithfully doing. I have not thought about being a Conservative; the issue is too sacred and grave for that, with our men overseas rewriting such a glorious history of courage. The matter is too serious for us to be fighting among ourselves like cats and dogs for pure party advantage. That is about all 1 have to say in this connection. Mr. Harold Ickes, one of the members of Mr. Roosevelt's administration has called columnists like this gentleman calumnists, and that is exactly what he is. He has double-crossed both parties; he is crosseyed; he has double-crossed* almost every minister on the front benches to-day; he has attacked the Prime Minister, the three ministers of defence, the Minister of Munitions and Supply, and others. I do not care anything about him, and I am sorry I have paid so much attention to him.
There are one or two matters I wish to bring before the committee, though not in any critical spirit because, as you know, since the war started I have given independent support to the government as long as we had a total war effort ; but what is meant by a total war effort' is something else again. I have been a consistent supporter of free enterprise in this country. The stand taken this afternoon by the leader of the opposition is all right. He I Mr. Church.]
stated that the Aluminum company is part of an international cartel, and that the government seems more or less helpless to do anything about world combinations of this kind. Then he went on to say that some international commission should be set up to deal with cartels and combines, so that the worker, the farmer and the small business man could be protected, and international rates and regulations established. That is all right as far as it goes; I have no objection to that policy, but I can say that I do not believe in all this international business. What was it Mr. Benes said here the other day: "I want to return to my own country." When the war is over there still will be independent nations, because patriotism is the cement that holds nations together. The people of the countries of Europe that have been overrun by the axis will want to return and rebuild their owm countries. There will always be nations; there will always be international trade, and I do not believe there is much use in sending a lot of college professors to Washington to talk about international debts, international exchange and so on. There will always be nations as long as time lasts.
I have referred to these matters on previous occasions. I was one of the pioneers in the hydro-electric development of Ontario, with many of our late leaders in this province, Sir James Whitney and Sir Adam Beck. We were blackguarded up and down the province; we were called amateur anarchists by one of the newspapers, but we took all the private franchises out of the counties of York, Ontario and Peel, and eventually all over the province. This was a people's movement for cheap light and power for all the people, and the leaders were not all of one party. I know of three or four hon. gentlemen across the chamber who were heads of municipalities and who took a great deal of interest then in this movement. This war is altogether different from the last one. I have a great deal of sympathy with hon. members to my left in what they say in some respects about public ownership of light, power and transportation. But we have to consider Quebec's own constitution, and the decision of the privy council. The province gave -its water power to private enterprise, and a few yeans ago what is known in the Saguenay river as the Shipshaw deal, and spent $35,000,000 in developing it. Already in a great many ways the government has taken the responsibility for this aluminum transaction as a war measure.
As I said on February 25, 1943, when speaking about private enterprise, I believe the first thing to do after the war is to encourage private initiative and free enterprise. True it

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is, that this will have to be brought up to date. I believe that when the soldiers come home they will want the rights that men enjoyed in the days of Macdonald and Laurier, when everybody owned some property. It might be a cow; it might be a small mill or a country store, or a horse and waggon, but it was property of some kind. We have been slow to see that, with the right of acquiring private property denied to them, the people of Canada became proletarian. Their liberty passed away; it will have to be restored. I believe in private initiative. I believe that the right to possess private property is derived from nature and not from man, and that the state has no business to abolish it, but can only regulate its use.
Those are my views, and they are honest views. I believe that would be the view of the soldiers when they come home. In my opinion you can have all the planning you like, but neither victory nor any kind of planning will ever bring about the millennium. In a debate last January in the British House of Commons, Admiral Southby quoted the language of Strube, who has immortalized "The Little Man" who saved England in this war. He goes on to refer to the little man who saved England, saved them in the raids over London, and at Dieppe and at Dunkirk. "The little man" personifies the spirit of the mother country, the spirit of free enterprise and freedom of both retailers and wholesalers. The said little man who is the embodiment of British common sense and sanity to beat Hitler and Mussolini will be quite at home to defeat bureaucracy.
We have been slow in this House of Commons in not sooner opposing giving up our control over water power for war-time purposes. I do not blame the minister altogether for this particular stand he has taken. I have known him as long as anyone has known him. I knew him when he was a civil engineer. I have had a great deal of respect for him, because I know he was an expert in his business. When he came to this house he was not a politician.
We on this side of the house have forgotten that we have been politicians. The opposition has given the government splendid, independent war support, if for a total war. I am only one of the humble members of the opposition, but I have been here for a long time now and I have yet to change my views on this question. I believe that "the little man" who saved England, as Strube has said:
We who in the ashes dwell
Want no planned and ordered hell;
Fight no war to be policed
When the bombs and fires have ceased.
Life's too precious far to give
For any freedom but to live.
The mother country was built up on free enterprise. That is what made this empire. We came into being by the sea, and we cannot exist without the sea. Our first duty is to the mother country. I do not know about international agreements, because we were told by Mr. Churchill that we had made certain international agreements, and that Canada was a party to them. So was New Zealand, so was Australia, and so were other dominions. I do not know whether the government can tell us what those international agreements are, or what international settlements are to come.
I believe in the public ownership of the water powers of this country. It should be owned by the people, and developed for the benefit of the people in all the provinces joined together at confederation. When I first entered the house I asked for a national hydroelectric policy. We have in this country
42,000.000 horse-power in the aggregate. Of that amount only about 7,000,000 horse-power has been developed, part of it only seasonal. That water power belongs to the people. That is what the late Theodore Roosevelt believed in, and what the present President of the United States believed in, when he was governor of the state of New York.
The first duty of the yes-men in Germany is to find out what the fuehrer wants and then to make the planets dance to his desires. Yes-men are not all astrologers; it is a pity they are not. They would be better for it. They exist in all classes of society and in all communities, and their mark everywhere is the dread of freedom. These authoritarian governments-Germany, Italy and Japan-exist only by reason of yes-men and nodders. When a leader emerges he is acclaimed by them and he drives the country to ruin to their resounding cheers. No opposition is possible in the dictator-ridden countries. That is true, but the evolution of tyranny in Germany, Italy and Japan is possible only because of those who were ready to surrender to usurpation, and one fuehrer, duce, or what-not dictator. Saddled, they cannot be unseated without a general upset and by force and revolution. In Canada we can speak our minds.
There are one or two observations I should like to make about this particular deal. There has been no Gallup poll in connection with it. This Gallup poll is one of the most mischievous institutions this country ever had. We have evidence of it every day in the week. We did not have this Gallup poll in the days of our fight for cheap light and power in Ontario. This was copied from A1 Smith of New York, who twenty years ago called a straw vote. Where is the censorship to-day, especially with the parliamentary association
meeting here in Canada? Where is the censor
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to-day, when this Gallup poll is on and we are allowing all this talk about forty-nine per cent being for the mother country and twenty-one per cent in favour of joining the United States. I say that is wrong. We didi not have that poll in the days to which I refer.
While I do not altogether like this particular transaction, and a lot of things done in the name of war, I do not like surrendering any further power to our beloved' allies of Russia and the United States. They say that we should forget all about the empire, and that we do not owe anything to the empire. In answer to that, I say that we are allied to two very powerful friends, two very powerful allies-Russia and the United States. They may not be imperial in the sense that they want more territory. That remains to be seen. But they are imperial in the sense that they want a larger share in the peace and as world powers and a better state of affairs when this war is over. And when it is over they will have something to say about the peace terms, and without our empire we will be lost.
I hope the minister will have due regard to this fact, that the surrender of our military and political initiative and of our resources to our friends in the United States is one of the vital mistakes we have made in this war, and brought about by the absolutely criminal defenceless position of this country when war came, because that is what it was. Not one party alone is to blame. All parties almost aided disarmament. We threw away our defences and our friends, with the result that when war broke out we had to start all over again. Let us remember that the United States need Great Britain the same as Great Britain needs the United States. It is not Great Britain's fight alone; it is America's fight as well. We are allies and friends. The people of the United States need us as much as we need them. We are allies, and we must see this thing through together.
I have 'been much displeased with some of what I have read of t'he record of the proceedings at Washington. These are the words of Lord Haig in the most critical days of the war of 1918, which is our motto now.
The safety of our homes and the freedom of mankind depend on each one of us at this critical moment being of good cheer. The British empire will win in the end. People's thoughts on war should not be distracted by secondary matters to a total war.
I was going to ask the Minister of Munitions and Supply one or two matters about this particular transaction on the Saguenay river, and about the settlement of war contracts after the war. This is a very large country. One of the vital mistakes we made

was that at the close of the last war hundreds of thousands of men and women who had been working in war work, and men who had been overseas were out of jobs. We should not make the same mistake this time.
This matter has been referred to in Washington, in an article in the March, 1943, issue of the National City Bank Review. It speaks of the dislocation of business and of working capital, and the cost of unemployment. Let us not forget the millions of workers in the munitions plants. In addition to them, there are those who are at war and who will come home. It goes on:
For there is involved the question whether the industries will be able to take up peacetime work quickly after their war work is over, or whether their working capital will be frozen in war production and its release subject to interminable delays and litigation.
This concerns a great many people. It concerns the possibly twenty million persons who will be working in the war industries, most of whom will need peace time jobs after war production is suspended. It concerns the millions in the armed forces who will be back looking for work after peace is restored. It concerns all who sell to the industries now producing war products, and all who will be looking for a market among their workers.
The producers of automobiles, radios, farm machinery and consumers' durable goods generally, who have converted wholly or in large part to production of a different kind than they normally carry on, will be particularly affected.
Reference is made to the dislocation of business that will occur, especially in Canada where production to-day is ten times what it was in the last war. It is also suggested that there should be a standard form of contract regarding payment. It continues:
Promulgation of such a code during the rvar w-ould prevent confusion and avert friction after the war. Necessarily the code would be on general lines, for except as to the elements of cost there can be no one method of keeping books which can fit the character and provisions of all contracts or be equally acceptable to everyone concerned. Nevertheless, it would seem practicable to set forth principles which would make it feasible for the government to approve the method of bookkeeping that a contractor is following, or to tell him what method he should follow on a specific contract.
The hope is expressed that we shall not have a repetition of what happenedi after the last war, when it took years and years to settle up. It is proposed that there should be an immediate part payment made on account. I commend these suggestions to the minister. I am a public ownership man and I have never faltered in that belief. I do not know everything about this deal, but I think it is a bad one. I am sorry the people of Quebec did not long ago adopt the principles which I thought they would, of taking over the water powers of the province for the benefit of the people. I would refer hon. members to what happened

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years ago in connection with the Beauhamois deal and the proposed give-away of all the water powers in the Ottawa valley in 1927, which I opposed. This happened, and the opposition opposed it and won in 1927, and it went on for many weeks.
I have a great deal of sympathy with what in some ways hon. gentlemen to the left say. I have always been a supporter of public ownership. The government of the dhy will have to take the responsibility for this contract as a war measure to defeat Hitler. The minister probably cannot give us all the information we should like to have about it and about the international agreements which have been made, no doubt, with our allies regarding this work, but we can all rejoice in the fact that although in Munitions and Supply we made a slow start, the work which has been done since the war got under way is commendable and is a splendid chapter on the whole. No doubt mistakes have been made. I remember about three years before the war, in 1937, I suggested that a national registry should be madte of all wholesale and retail plants in the country to find out what each one could do. I was sure that war was coming. I suggested in 1938 that food reservoirs be set up in the old country and that there should be a survey of labour, a survey of water power, a survey of all large and small industrial plants and a survey of shipbuilding plants.
I hope before the minister finishes that he will have something to say about this fifty-mile limitation on bus travel by soldiers. The minister comes from a soldiering family and I do hope he will be able to make some change in this rule. When we took over the street railways in Toronto we had a clause inserted in the act which gave the city power to go into the operation of buses. This has proved a great help to the counities surrounding Toronto as well as the rest of Ontario. The people would not be able to get to the munitions plants if it were not for these buses. There should be some change in this rule, especially for the buses operating out of Oamp Borden. Last Sunday we had a bad storm and many of these soldiers were dumped off at a town eleven miles from Barrie and had to walk in.
Some consideration should be given to the need for the extension of certain health and essential public utilities, such as sewers, water supply and that kind of thing; the necessary steel should be released. Something should also be done in connection with housing. I have seen some of the effects of bad housing in the city of Toronto, and I appeal to the minister to do something to relieve the people of the great burden they are carrying.
In conclusion, may I repeat a quotation from Lord Perry I gave before, as follows:
The industrial revolution made it possible for any man to work his own way from poverty and illiteracy to a commanding position in both industry and the state. Richard Cobden is an outstanding example-the son of a Sussex farm labourer who became a great Lancashire manufacturer and a great statesman. William Cobbett is another example. In fact, industry and commerce during the nineteenth century produced such men not by the hundreds but by the thousands-careful, frugal men, hard of head and often hard of heart, but notable for two qualities above all others, diligence and self-reliance.
These men were self trained into habits of clear commercial thinking, quick and bold decisions, personal responsibility and individual initiative. It was no easy school. Those who lacked the necessary application or the necessary drive had short shrift. The age was kindly only to those who satisfied its needs.
We do not want a repetition of what happened after the Napoleonic and other wars, as outlined in the "History of England," by T. H. Green, Lord Shaftsbury and other historians. We do not want similar conditions to occur in our cities and towns and on our farms. I commend the hon. gentlemen to my left for the part they have taken in this movement. It follows the many reforms which have been brought about in Ontario by the Conservatives with regard to cheap power. I have referred to some of these to-day and there are others. I have grave doubt whether the state has been adequately protected in this Shipshaw deal, but it has been recommended by the minister and by the government, and they will have to take the responsibility. No doubt some of the terms are improvident.
I had a similar experience in connection with the Chippawa deal in the last war when that great plant was a blessing to Canada. It was said at one time in the last war that Ontario was supplying one-half the munitions for the mother country and the allies, and this was possible only because we had cheap power. The water powers of this country should belong to the people. I have great sympathy with the minister who has recommended this particular transaction. I realize that when the deal was consummated there was a grave situation existing. It was predicted after the fall of France that the British empire was done.
I have spoken to-night because I have been attacked. Never on any occasion have I been anything but a friend of the men and women, and the dependents of the men and women who are serving in this war. Yet this attack has been made in this newspaper, and I am being advertised all over Canada as enemy No. 1 of the men in the services. I have

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always fought their battles since I have been a member. I want hon. members to know that I have found this house to be a place of much kindness. I have known most of the members for many years and I know they have done splendid work. Some of the best men we have came up here through the municipalities, and when brickbats are thrown at members of parliament it is simply an effort to prevent us from doing our duties as members.


Mrs. NIELSEN:: I believe it will be in order under this item to discuss the question of the moneys expended by the government or by the minister and his department in connection with the making of industrial alcohol. I know the minister has promised to make a statement on this question, but I should like to say a little about it and to ask a few questions before that statement is made.
Without doubt the people of western Canada are greatly concerned, and rightly so, about this matter, because they consider that not only have we during this present war emergency conducted our affairs in a way which has not been to our greatest advantage, but that in the spending of moneys for the production of industrial alcohol the future of western Canada has been neglected. From various bodies in western Canada resolutions have been coming in possibly to other western members as well as myself showing the amount of interest which the people of the west are displaying in this question. It is said by certain people that the making of industrial alcohol and synthetic rubber from our large surplus stocks of wheat is a much better way of producing synthetic rubber than from petroleum. I think, when the minister makes his statement, it should be a very full and comprehensive one. I think he should place before the committee the detailed figures that were submitted to him, and let us know from what sources these figures were obtained so that we might be satisfied as to the correctness of the decisions made in this matter. Of course the minister will readily understand that there are very few members of the house who are competent to speak on these technical matters. I certainly am not, and therefore in matters of this kind we are obliged to go to sources which we believe are informed.
Like many other western people, I have been reading a pamphlet recently written by one of our young Canadian scientists, a man from the city of Winnipeg, Mr. Dyson Carter, M.Sc., A.C.I.C., F.C.G.S., registered professional engineer and research consulting science correspondent. The pamphlet he has called, "So that Man may Prosper", and in

this pamphlet he gives many facts and figures in substantiation of the claim that it would have been a better thing for Canada both in the war emergency and for the future if we had built distilleries and used our surplus stocks of wheat for the production of industrial alcohol and synthetic rubber. He makes the statement:
To produce from petroleum the butadiene required to make 200,000 tons of Buna rubber per year requires equipment costing $650,000,000.
But, he says:
To get butadiene from wheat is quite a different chemical problem, a far simpler one, requiring far less complicated equipment. This is summed up in the fact that to produce from wheat the butadiene required to make 200,000 tons of Buna rubber per year requires equipment costing only $30,000,000.
He also states that to assemble and build the plants, first of all the distilleries for processing the grain, would take roughly only about eight months, but that to build a plant and assemble machinery for the process which uses petroleum as a base takes at least eighteen months or a little longer. Therefore, from the point of view of the war emergency, his argument is that it would have been advisable for us to have built distilleries to use grain.
It is, I believe, a significant fact also that one of the united nations which has made a marvellous contribution in this war, a nation which has unlimited quantities of petroleum and could have used that as a base, if it were advantageous to do so, has nevertheless thought it necessary and expedient to use large quantities of grain for making industrial alcohol. That country, of course, is the Soviet Union. It is, I believe, a well-known fact that engineers and research men from the Soviet Union offered their services at one time to the United States government and offered to give all the information and help necessary to enable the United States to proceed with this process themselves. But the United States had as its advisers some dollar-a-year men who were connected with the great oil corporations and these men prevented the Russian research men from coming to the United States and giving their assistance.
It would be a good thing, I think, if the minister would give some indication whether we in this country were offered any help by any other country on this question and whether we appealed to any other country for suggestions and help when we knew that this process was being used elsewhere.
It is perhaps something which the general public does not know very well, but it should know, that these giant oil corporations in the United States which have subsidiaries in this country, Standard Oil particularly, were guilty

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of the most treasonable act of which any corporation or group of men could have been guilty, in that in the year 1939 they sold secret processes which were theirs to the enemy. Of course, at that time the United States was not actually at war with Germany or Italy; nevertheless it must have been known that in the world-wide conflict which was beginning the United States would ultimately become involved, and the fact could not have been ignored by the controllers of these oil companies that they were betraying a trust which was very definitely in their hands in the interests of the people of the United States. The members of the house know only too well the name which is given to women who for various reasons are forced to sell their bodies, but we have not yet coined a term that is fit to be applied to corporations or groups that sell to the enemy secrets, things which are of value and benefit to the people of their own country, for the sake of acquiring personal power and prestige. "Traitors" is too mild a term to apply to them. To call them "financial prostitutes" would perhaps in some degree be giving them their proper title. The same oil corporations which sold the secrets to Germany and Italy refused to sell the same secrets to their own United States government until that government forced them to do so.
Possibly it is also known that it was only when the United States government set up the Baruch committee and the committee's findings were made known that the government of the United States realized to what a degree the dollar-a-year men who were responsible to the oil companies had been in control of the whole war production of that government.
In the pamphlet to which I have referred, Mr. Dyson Carter has outlined in some degree the findings of that Baruch report. He says on page 16 that the Baruch report "stressed that the new grain alcohol plants, and the factories for making the alcohol into butadiene, and the factories for making butadiene into synthetic rubber, should and must be built in the graingrowing areas, in the farm lands" (of the United States).
Some hon. members may say what does this matter so far as we are concerned? This matter is of importance to us on account of the similarity between the two nations, because of the similarity of our needs, the similarity of our sources of supply both of oil and of wheat.
One of our own Canadian correspondents, Chester Bloom, reported from Washington:
Reading between the lines, it is apparent the Baruch committee agreed with congressional criticisms that the big oil companies were at-72537-233}
tempting to establish synthetic rubber monopolies after the war, by preventing production of synthetics from grain.
Mr. Carter goes on to outline under headings what he believes to be the final conclusions to which we are able to come. He says:
1.	With all natural rubber sources seized by the Japs, the united nations had to start manufacturing synthetic rubber immediately, on a vast scale.
2.	Butadiene will be the principal substance used in making this rubber.
3.	Butadiene can be made from petroleum and grain.
4.	The Russians who have unlimited petroleum, have for years been making high quality synthetic rubber with alcohol from farm crops, and not using petroleum.
5.	Secretary of Agriculture Wickard has strongly recommended that America should make rubber on a large scale from farm crops.
6.	The petroleum trust killed this recommendation, even though American-Canadian rubber plans were getting nowhere very quickly.
7.	Mr. Thurman Arnold had made sensational exposures of how Standard Oil had given secret rubber processes to Germany, Italy and Japan, but refused to give the processes to United States companies.
8.	Baruch revealed that the oil trust had planned to get a monopoly on synthetic rubber production.
9.	Baruch recommended a colossal expansion of alcohol plants, and plants to make synthetic rubber from the alcohol, all these factories to be built in the grain-growing regions.
Finally, the United States is now putting the Baruch report into practice.
In the same way, Mr. Chairman, I would suggest that we in this country must understand more thoroughly than we do at present why our own government has proceeded along the lines which it has followed. At the present time we are using precious supplies of oil as the base for the making of synthetic rubber, while on the prairies there lie millions of bushels of wheat, and because our farmers are not able to dispose of their wheat they, in many instances, lack the cash which is necessary for them to cany on their farming operations, and to some extent we as a nation have suffered on that account.
Mr. Carter goes on a little later, at page 20 of his pamphlet, to give some idea of more recent discoveries which make it even more necessary that wheat should be used. I quote again from this pamphlet:
In Iowa State College laboratories Dr. L. A. Underkofler, Dr. Ellis I. Fulmer and a Chinese scientist Dr. Lu Chen Hao, have discovered how to eliminate the use of malt in producing
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alcohol. Instead of malt they use a special "mold," similar to the kind of mold that makes bread spoil. Details of the mold and the method of using it cannot be released at this time, because the process is of vital military importance to the united nations.
Why is the process important? For the reason that the mold method gives from 100,000,000 bushels of wheat at least 25,000,000 more gallons of alcohol than are obtained from the same quantity of wheat by means of the standard malt-yeast process. . . .
The Seagram Company (known in Canada mostly for the liquor it manufactures, but familiar to chemists as one of the world's largest producers of industrial alcohol) has announced that its famous Russian-American scientist, Dr. Paul J. Kolachov, has perfected a revolutionary new system of fermenting mash. The new process is continuous. Instead of fermenting the mash in enormous batches, the Kolachov apparatus carries out the process continuously. . . .
Chemical engineers are well acquainted with this method applied to industrial processes. Thus in the continuous fermentation process for making alcohol, the time required for complete fermentation is reduced from 50 hours to only 5 hours. In effect this makes one piece of apparatus do the work of ten. The cost of erecting large-scale equipment is thus drastically reduced, and the cost of production of alcohol considerably lowered. The new method is therefore expected to have a very favourable effect upon the future manufacture of industrial alcohol from wheat. . . .
When wheat is fermented to make alcohol, naturally a large quantity of fermented mash is left behind. Most of the starch in the wheat has been removed from this material, in the form of alcohol. The remaining mash is thus rich in wheat proteins. And1 proteins are the food substances that build muscle-meat-in cattle and chickens. . . .
When large-scale grain alcohol plants are established in the farm lands, the farmers will have a source of feed of the highest quality. This feed will be a by-product of the alcohol industry. In this way the cost of raising beef cattle, sheep, hogs and poultry will be sharply reduced. There will be a large and dependable source of supply of the feed. And the feed will be one of the finest known to science. This combination of advantages will place the wheat farmer in a very much better position for carrying on mixed farming, a matter of vital concern in post-war Canada.
When our people in western Canada read of these things, they realize that vast horizons would open out to them if only they were in the position to establish the basis, which is the industrial alcohol, for many of the new industrial uses to which it could be put. I have noticed during this debate that a number of members have paid high tribute to the boys in the armed forces. I do mot disagree with that. There have not been any tributes paid to the boys which they do not deserve; none are high enough, none good enough for them. But I submit that if some hon. members were a little more alert in guarding the interests of these same boys when they return and

have to take up their ordinary occupations in this country, many of them as farmers, it would be a great advantage. I feel sure that every one of these boys would rather know that this government and this parliament had looked after their interests in this particular matter and made it possible for them to know that a livelihood would be waiting for them when they come back. When all is said and done, I believe that all members in this house, no matter on which side they sit, are agreed that in the future we need to decentralize our industries rather than keep them centralized to the degree they are in eastern Canada. Eastern Canada is well developed. If we had these grain alcohol plants on the prairies, besides the fact that, as Mr. Carter has pointed out, they could have been built more quickly and would have been in operation sooner, they would1 have used something of which we have a surplus, rather than using oil, which is scarce. It is possible that this would have formed the basis of other industries after the war is over.
Mr. Carter admits, I believe, that actually to use molasses as a base for industrial alcohol is cheaper than to use wheat and grains, but he goes on to say that were distilleries built in western Canada, and the other subsidiary industries, such as plastics and other things, developed, the lessened cost of transportation and the increase of industry from these subsidiary industries would automatically help to lower the cost. He states very definitely- and again I quote from his report-at page 24; that industrial alcohol is needed not just as a war measure but for various industries of the future. He says:
Alcohol is vital to the production of solvents, cleaners, varnishes, paints, lacquers, shellac, rayon, radio and electrical equipment, plastics, gasoline, food products and flavours, artificial leather, dyes, moving picture film, linoleum, ink, glue, rubber goods, cosmetics, perfumes, medical necessities such as antiseptics, anaesthetics and drugs, and explosives for both war and peace time.
Our farmers are beginning to realize that if they had in western Canada, as a base for many of these new industries, the alcohol which is needed, we could utilize straw, which as a rule, year after year, has been burned and has gone up in smoke on the prairies. Greater uses could be made of the soya bean, and industrial uses could be found for milk products, for the dandelion, and for such waste agricultural products as corncob and oat hulls. Not long ago, Mr. Mackenzie, chairman of the board of grain commissioners and chairman of the government agricultural subcommittee on reconstruction, stated before one of the com-

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mdttees of the house that in his opinion many new industries could be started if we could go ahead with the government's assistance in the building of plants for the making of industrial alcohol from wheat. But the farmers had no one to .put up their case. They could not actually submit to the government specific figures with regard to costs, and so on.
I do feel that the minister needs to give us a full and detailed account of all that occurred before he and the government made up their minds to go ahead as they have done. It seems, according to certain opinions that have been given, that the use of oil as a base is more expensive and it takes longer to produce and to build the plants, and it uses oil which is needed in time of war emergency. Besides that, the government has neglected to take into consideration the question of the rehabilitation of the west from the point of view of its future prosperity.
I would ask the minister to give us in his report some idea of how long it will be before these plants that are now being erected) in Sarnia will pass out of government control. Will he let us know the sums of money which will have been expended by this government and to what degree they will pass into the hands of oil companies? Has the government any guarantee of what future use the oil companies intend to make of these plants after the war is over? These are questions that ought to be cleared up, because the people of the west at the present time feel that not only in a war emergency has a wrong course been taken by the government but the whole future prosperity of western Canada has been pushed into the background in the consideration of these estimates.


Clarence Decatur Howe: I would be glad to make a statement on the rubber situation at this time, but if there is to be further discussion it can wait.


Mr. ROSS (Souris):: I was going to make a slight reference to that question, and I shall not take up much time. First of all, in my opinion the statement of the minister last Friday certainly indicated that a big job of production had been accomplished, and in that respect the minister and the industrialists are to be congratulated. *
Following the observations of the previous speaker, I well remember, during the first session of this parliament in the fall of 1940, when the hon. member for Victoria-Carleton spoke on this matter, he placed on Hansard a formula with regard to the manufacture of grain alcohol and synthetic rubber. This has got beyond the experimental stage, and in this
regard I agree with the remarks of the previous speaker. Something should be done to develop the scheme in western Canada. Indeed, the time is long past.
The attitude of the government toward industry and agriculture has been very different throughout our war effort. Apart from capital assistance, industry has produced on a cost-plus basis during this war, and owing to this fact industry has paid a greater rate of wages and this has attracted many of the more efficient farm workers to these centres.
I wish to raise two or three questions, one with respect to farm implements in so far as the minister's department is concerned, and another with respect to the reclamation of used lubricating oil. The hon. member for New Westminster yesterday spoke about the steel monopoly and the agitation that had been carried on against development in his province, and I think he was on sound ground in the arguments he advanced. I have a word or two to say with regard to the allocation of steel for the manufacture of farm implements under the controller. Recently from twenty-five to thirty-five per cent of the 1940 production has been allocated. In the second place, farm implement factories were directed to manufacture vehicles for the armed forces. I am sure no fault could be found with that, although much of this military equipment has been piled up along the railway sidings for the past few months, some of it deteriorated, some of it becoming obsolete-because everyone knows how rapidly models change. While this has been taking place, the farmers have been unable to purchase modern machinery, either for the field or for dairying, and that is true throughout the country. At auction sales, used farm machinery has been selling above the price of new articles in various parts of the dominion.
There has been a distinct lack of planning in production and in the allocation of steel in Canada. If these vehicles were needed for the armed forces, some department has fallen down, perhaps through lack of the necessary water transportation. If that is not the reason, then a greater percentage of steel should have been allocated for the manufacture of farm implements, because the farmers are labouring under great difficulties at the present time.
At the commencement of the war there were
53,000	farm tractors in Great Britain and today they have 120,000. In Canada this year the new tractors supplied will number 5,000, which is less than one-third of the supply we had last year. Most people realize that the acreage under cultivation in this country today is three times that of Great Britain; yet
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Angus MacInnis: There is not very much I have to say in this discussion, but there are one or two matters to which I should like to draw attention. Before doing so, however, I wish to say a word in regard to a point raised by the leader of the opposition this afternoon. He referred, I think in terms of approval, to the speeches made yesterday by the hon. member for Rosetown-Biggar and the hon. member for Winnipeg North Centre, but he wanted to know what was our solution; what could be done about it. Well, surely a great party like the Progressive Conservatives, who have come out with a new programme for the Dominion of Canada, should not be at a loss as to what could and should be done in a case of this kind. I see no difficulty as to what should be done. If the resources of Canada have been alienated without due recompense to the people of Canada then those resources should be returned to the people of Canada. I remember in 1932, when the former leader of the Conservative party, who was at that time Prime Minister, introduced in this house the bill setting up a publicly-owned radio system, he said there was not a public man in Canada-

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I am just quoting from memory now-who did not regret that the natural resources of this country had been given away by those who were supposed to act as trustees of the people's property; and given away, he said, without adequate return. If that has been done, and I think there was sufficient evidence placed on record yesterday to prove that it was done; if the people of Canada are being exploited to-day, when we are engaged in a world struggle in which everyone is supposed to sacrifice, some even to the extent of giving their lives-I say, if the property of the people of Canada has been given away without a pro,per return to the people, surely no government should have any compunction about returning that property to its rightful owners.
I also remember in 1931 when the group then sitting on this side of the house-the group, I might say, out of which the present Cooperative Commonwealth Federation developed-brought to the attention of parliament another scandal. I remember hearing Mr. Bennett say that the government of Canada could take over the Beauharnois project as a work in the interests of the Canadian people, but that was never done.. The special interests, who have always been held in such tender regard by governments in this country, were too strong to allow the appropriate action to be taken in the circumstances. So that if any government to-day wishes to do something for the people of Canada, it has all the power necessary; all that is required is the will.
I have no hesitation in associating myself with the other hon. members who have already congratulated the minister upon the inspiring report on war production which he presented to this committee last Friday. Without doubt the minister has made a good job of organizing the material factors in our war industries.


Mr. DUPUIS:: Hear, hear.


Angus MacInnis: All right; I agree. But
having said that, I must say that when the Minister of Munitions and Supply comes to deal with the human element in those industries he falls down completely. There are so many cases in point that I have no trouble in showing what has been done, because of the attitude of the minister and his department toward the human factor in industry. It was clearly demonstrated in 1941 in the case of the National Steel Car employees, and it was further demonstrated in the case of the Arvida workers in the same year. In the latter case the workers, suffering under the most terrible conditions, revolted and went
on strike; the only sympathy they got from the minister was an order in council enabling the government to send the military in to put them down. A royal commission appointed by the government exonerated the Arvida workers from any subversive intent and brought attention to the terrible conditions under which they had to work, and which still exist. There was no apology made to those employees. That order in council is still in force, with the government having the power to use troops at any time it may consider necessary. I will say this, that if troops ever go to Arvida they will go there to subdue the workers, and not to return to the people of Canada the property that has been improperly taken from them.


An hon. MEMBER:: Hear hear.


Vincent Dupuis: A lonely applauder.


Angus MacInnis: Some day it may be
bigger; do not worry about it. I am not worrying at all, because I have been in the house too long to pay much attention to applause. It is pretty much the same as at a football match. Each side applauds its own men. It is a rather childish thing, in a way; but I suppose people who have no other way of expressing themselves, should not be denied such a little consolation.
Then, I could refer to the long struggle for union recognition in the plants of various crown companies. The latest case, about which I wish to say a few words, is about the shutting down for several days of the Boeing Aircraft plant at Vancouver. All of these cases show the ineptness, I may say, of the Minister of Munitions and Supply, when he comes to deal with the human factor in industry. And I wish to say that if we do not find ways and means of bringing the workers in industry into active cooperation with the other factors in production, we are not going to get much out of this war, even if we win it-which seems much more likely now than it did a year ago.


Mr. CRUICKSHANK:: What do you mean
by "even if we win it?"


Angus MacInnis: Yes, even if we win it, although it seems more likely now. It is not yet in the bag, if my hon. friend will allow me to say so.


George Alexander Cruickshank: By heaven, we
think it is in the bag, whether you do or not.


Angus MacInnis: All right. Even great
minds may differ, you know.


George Alexander Cruickshank: You and I will not agree then.
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Angus MacInnis: Perhaps we never did-[DOT]
and I am not particularly anxious that we should.
The difficulty with the minister is that he does not seem to realize that workers are human, and that they want to be treated as human beings, and not like so many packages of labour power which can be put into industry, in the same manner as steel or brick or mortar or things of that kind.
The stoppage of work, or the shutting down of the Boeing Aircraft plant in Vancouver, was inexcusable. It was entirely owing to the dictatorial attitude of the minister and his director-general of aircraft production. I want to say here and now that it was not a strike; it was a lockout. It was a lockout by the government, at a time when the government was saying that we needed aeroplanes more than anything else. Canadian Pacific Air Lines, which had a plant close to the Boeing plant, had agreed many months before that the employees should have rest periods. They refrained from putting these rest periods into effect-at the request of the government, I think, or the request of the Department of Munitions and Supply-because the government felt that to put the system into effect in a plant situated so close to the Boeing plant would cause dissatisfaction in that plant. When the Canadian Pacific Air Lines moved their plant to the new place at Queensborough they put the rest periods into effect. It was agreed upon between the company and the employees. As a matter of fact, I have been told by the employees that in all these disputes there was at all times the best of understanding between the employees and the companies concerned.


Clarence Decatur Howe: May I straighten the record with respect to Canadian Pacific Air Lines. They took over part of the operation of Boeing. When they took it over they entered into an agreement with the Department of Munitions and Supply that the labour agreement which applied to the Boeing employees would be maintained holus-bolus between the Canadian Pacific Air Lines and its employees, and that there would be no variation between the two agreements. It was a written agreement with Canadian Pacific Air Lines, which was violated by Canadian Pacific Air Lines.


Angus MacInnis: It was not while they
were at the plant.


Clarence Decatur Howe: But the agreement had not
been abrogated.


Angus MacInnis: My understanding of it
is that they were told that as soon as they moved to the new plant at Queensborough there would be no objection to it.


Clarence Decatur Howe: They were told in violation of an agreement between Canadian Pacific Air Lines and the Department of Munitions and Supply. The employees were innocent parties, but Canadian Pacific Air Lines were not.


Angus MacInnis: In any event, that is what the employees were told. This is what I wish to draw attention to:	In 1942 Mr. Bell was
on the west coast, and he was approached in connection with wages and working conditions at the Boeing plant. He told the employees that he could not do anything, and that they would have to take the matter up with the Department of Labour. But the moment that this rest period went into effect at the Canadian Pacific Air Lines plant, it did not take Mr. Bell long to take action and put a stop to the .rest periods.


Clarence Decatur Howe: Had the employees taken
that up with the Department of Labour?


Angus MacInnis: Well, I imagined they had. They had been in negotiation with the Department of Labour from April, 1942.


Mr. MITCHELL:: I think I know of what I speak, and-


Angus MacInnis: Well, I do not just like that.


Humphrey Mitchell: To keep the record
straight-


Alexander Malcolm Nicholson: I cannot hear you.


Humphrey Mitchell: Perhaps if you could it would not make much difference.


Alexander Malcolm Nicholson: It would not matter; no.


Humphrey Mitchell: What happened was that before we had an opportunity to settle it there was a strike. There is no doubt about that. You can call it a lockout, or whatever you wish, but actually there was a strike. We were told that if the thing was not settled by ten o'clock on Wednesday or Thursday morning there would be a walkout, and that is what happened. You can call it a lockout, if you wish; but actually the employees walked out on strike.


Angus MacInnis: That is not the case, at all. The Minister of Munitions and Supply gave an order to close down the plant. It is quite true that the employees took fifteen-minute rest periods, and then-[DOT]


Clarence Decatur Howe: Six times in twenty-four hours.

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Angus MacInnis: And when they did, the Department, of Munitions and Supply gave the order to close down the plant. And the plant was closed down for several days. The men went back and shortly afterward an agreement was entered into. While this did not give them exactly what they wanted, it went part of the way and rest periods or smoking periods were granted.


Humphrey Mitchell: They went back on the advice of their own officers.


Angus MacInnis: Quite true, I know that very well because I was in close association with them. I sent the minister a telegram in connection with it, which was signed by the hon. member for Winnipeg North Centre (Mr. Knowles) and myself. I have reams of reports on it right here, but I just wish to draw attention to these things. If the Minister of Labour were wise in the matter, he would not begin at this time making apologies for what had taken place because if he-


Humphrey Mitchell: The Minister of Labour is not making any apologies, and he does not have to when it comes to the settlement of the Boeing strike. The Department of Labour did everything possible in carrying out the normal procedure of industrial negotiations. Probably my hon. friend has not had so much to do with these matters in the last few years, but the thing was settled when they came here. If my hon. friend can justify a six hour and twenty minute day before the bar of public opinion in the middle of the war, he can have that privilege.


Angus MacInnis: I am not justifying anything.


Humphrey Mitchell: No?


Angus MacInnis: I am not even justifying the attitude of the Department of Labour. Am I to understand now that-


Humphrey Mitchell: You are turning a sharp corner; that is all it is.


Angus MacInnis: Am I to understand now that the Minister of Labour does not agree with the settlement made between the Canadian Pacific Air Lines, the Boeing company and their employees, that he is opposed to these rest periods? I am glad to have that on the record.


Humphrey Mitchell: I want to say to my hon. friend'-


Angus MacInnis: Will the minister please sit down. We shall have something to say on these matters next week, but just now I am talking.


Humphrey Mitchell: On a point of order, I want to throw' that back in the teeth of my hon. friend.


Angus MacInnis: That is not a point of order. If you have a point of order, address it to the Chair.


Humphrey Mitchell: I want to say to you, Mr. Chairman, that I throw that back in the teeth of my hon. friend. He is putting words in my mouth which I never uttered.


Angus MacInnis: What did the Minister of Labour say? He asked if I could justify a six hour and forty minute-


Humphrey Mitchell: Six hour and twenty-minutes.


Angus MacInnis: A six hour and twenty minute day in war time. Evidently he does not justify it; he is opposed to it. I am saying that it is time that the workers knew the attitude of the minister in these matters.


Humphrey Mitchell: And the truth.


Angus MacInnis: And the truth of it. I am telling you the truth and because I am, it hurts.


An hon. MEMBER:: And the boys overseas.


Angus MacInnis: They would like to know who ordered the shut-down of the plant, and they know it.


Mr. EVANS:: Do you agree with them taking rest periods?


Angus MacInnis: They have rest periods now.


George Alexander Cruickshank: Do you agree with it?


Angus MacInnis: Certainly.


Clarence Decatur Howe: They have no rest periods now.


Angus MacInnis: What are the periods?


Clarence Decatur Howe: They are allowed to smoke for ten minutes, but they keep on working.


Angus MacInnis: That is pretty much what they wanted. They are allowed to smoke for five or ten minutes, depending upon what part of the plant they are working in. Those are the only rest periods the men asked for.
I should like to draw attention to another matter the minister referred to in his speech to the committee on Friday. Referring to the government arsenal at Quebec, he said that this plant was a model for its type of production, both in efficiency of operation and in the quality and quantity of its production.
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I am glad to hear that the government arsenal at Quebec is so efficient, but there is a good deal to be desired there in the way of labour relations with the management of the plant. A delegation came to Ottawa representing the arsenal workers about two weeks ago to put their case before the national war labour board. They are certainly not satisfied with the conditions prevailing in that plant. The government and the minister may be satisfied with the efficiency of the plant, but if that efficiency is attained by means of bad labour conditions and low wages, it is too great a price to pay, so far as the employees and the people of Canada are concerned.


George Alexander Cruickshank: Are the wages low in comparison with those paid at the Boeing plant?


Angus MacInnis: I am away past that.


George Alexander Cruickshank: Are they?


Angus MacInnis: When you catch up I will answer the question.


George Alexander Cruickshank: You do not want to answer it.


Angus MacInnis: Surely something could be done to remove some of the grievances of these employees in this government plant. I submit that a public employer should be a model employer in the wages that are paid and the working conditions that prevail. I was informed by the arsenal employees that they have poorer working conditions than the employees of the United Kingdom inspection board, who work side by side with them in the same building. This is another case of rest periods. The United Kingdom inspection board employees have rest periods, while the employees of the Canadian government, working side by side with them in the same building, have no rest periods. That does not make for good feelings and good relations in the industry and I suggest to the minister that he give some consideration to improving the working conditions in that plant.
Replying yesterday to the hon. member for Rosatown-Biggar (Mr. Coldwell), the minister said that he was fighting a battle against the axis and not against trusts and combines. I may not be quoting his exact words, but I think that is the sense of what he said. I suggest to him that he should not overlook the fact that trusts and combines, inequality as between nation and nation, as between class and class, as between individual and individual, are the root cause of the conflict in which we are engaged to-day. Every effort, even when we are engaged in a war, that can be made to obviate these conditions, should be made.
fMr. Maclnnis.]
On another occasion in the house I referred to the speech made in Toronto by the Prime Minister (Mr. Mackenzie King) when he was addressing the convention of the American Federation of Labor in October last. He read a long passage from William James, a beautiful passage. Then he said this:
Will this war not determine whether we are to go on, in the future, as we have too largely in the past, ever seeking to emphasize the differences between nations and between individuals, or whether "men's lives are to be levelled up as well as levelled down-levelled up in their common inner meaning, levelled down in their outer gloriousness and show!"


Mir. McIVOR:: Hear, hear.


Angus MacInnis: "Hear, hear" yes, but fine words butter no parsnips. Here are these workers in Quebec who work side by side with other employees in the same plaint under poorer conditions, and I say that we should keep in mind that these men, even if they are workers, are still men, with all the hopes and aspirations of human beings. Let me say in conclusion that we cannot educate men and women and put the light of life in their souls, and then treat them as mere serfs or as bits of material no better than the raw materials that enter into production.


Ernest George Hansell: The other day when the estimates of the Minister of National Defence were up for discussion I asked a few questions which were not completely answered, and perhaps the Minister of Munitions and Supply can cover the ground a little more thoroughly. I was asking questions with respect to the salvaging of materials after the work on a plant or building had been completed. My understanding is that contracts for the erection of buildings are made out and signed, and that there is no salvaging so far as the government is concerned of any materials that may be left over, that any left-over materials are sold perhaps by the contractor, who may get whatever he can out of them, and that the country gets no benefit from the sale. If that be so, I would ask the minister what check is made of materials going into new buildings and what check is made of the materials that may be left over when a job is completed. I know for a fact that in the building of a certain air training school vast quantities of materials were left over, mostly lumber, and they were not salvaged so far as any government salvaging is concerned.


Clarence Decatur Howe: May I ask my hon. friend a question? I think he asked for a return on that matter, and if I remember the contract, it was a lump sum contract, and the materials belonged to the contractor. Is that the contract?

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Ernest George Hansell: That perhaps is so, but I did not find that answer in the return.


Clarence Decatur Howe: I may be wrong. I was just asking my hon. friend if that was the situation.


Ernest George Hansell: I have the impression that that was the situation, because I know there was nothing salvaged out of it by the government. That was the reason for my question: What check is made of materials entering into these buildings, and what check is made of the materials that may be left over?
While I am on this point I want to mention a grievance. I trust that it will not be considered too small to mention. I know that when we are spending billions of dollars, a few dollars sink into insignificance, but to the people of a community they are not insignificant and there is a principle involved in this matter that I wish to mention.
The property that was bought for this particular school, the Vulcan air training school had upon it a very fine farm dwelling. I say very fine, meaning very fine as farm dwellings go. There was also a very fine barn on the property. On two occasions tenders were advertised, putting these buildings up for sale. The first time they were advertised the contractors persuaded the government to put off the sale because they could use the buildings and the barn. Accordingly the sale was put off. Later, tenders were advertised again. I discovered that some bids were made on this dwelling and on this barn. It may not appear from these bids that the value of these buildings was very great, but of course they had to be moved, and there would be some expenses in moving them, and so forth. I will deal with the barn first. Five offers were [DOT]made for this bam ranging from $80 to $251.50. It was a good-sized substantial barn, thirty-two by forty, and the height is given as 136 feet, but it could not be that high; I think that should be thirty-six feet high. The bam had two rows of stalls with wooden floors. The stalls were not of any consequence but the materials were. The posts were six by eight. When I called for the return I discovered that while these buildings were put up for sale, they were not eventually sold. The last letter that closes the incident was written by T. Earl Walker, Acting General Purchasing Agent, to the Salvage Officer, treasury office, Ottawa. It is dated August 31, 1942, and reads as follows:
Dear Sir:
With reference to the matter of the disposal of a barn at Vulcan aerodrome, I am to advise you the department is in receipt of a radiotelegram, requesting cancellation of sale of this building as the R.C.A.F. No. 4 have decided to retain the building for their own use.
I should like someone to go out to that air training school and see if he can discover where the bam is. It just is not there. What happened? Well, we had these five bids as well as other verbal bids, and this is where the rub comes; this is where the principle is involved. This occurred last fall, when farmers could not get one board of lumber in town; it was not there. They needed lumber to provide extra storage facilities for their grain, and they bid on this bam because with a little support it would have made an excellent granary. What happened to the barn? In spite of the offers which were made, someone in authority sent two or three tractors on the field, threw a cable around the barn, then threw another cable around it, and one tractor drew one cable, the other tractor drew the other cable, and they simply pulled the barn to pieces. You could go into the corner of the field and find a pile of wrecked lumber. When one gentleman was telling me this story he said, "You know the tracks which these big barn doors run on? You cannot buy one of them at Eaton's for less than twenty-five or thirty dollars, but go over in the corner of the field and you will find nothing left of the tracks but a piece of twisted steel." I am not discussing this incident now from the point of view of saving money as much as on the principle that that sort of thing should not go on.
What do we find in this letter here? We find that the school had "decided to retain the building for their own use."
Well now, about the house. I drove past that air training school, and there was a fine house twenty-four feet by twenty-six feet, with the addition of a twenty-four feet by fourteen feet lean-to. It had four bedrooms, and it was electrically wired, although the wire was put in after the house was built. Offers were received for the purchase of this house, although they did not ran very high. I know one woman who wanted to buy it and move it into town to use it for her business. She was going to set up a laundry. Here was an air training school which was to accommodate from fourteen hundred to two thousand men. The population of the town almost doubled. Housing conditions were acute. Young men coming in with their wives could not even rent a room. Some of their young wives had to go to a hotel and pay more for accommodation there than their husbands were earning as airmen, leading aircraftmen, and so forth. As I drove past the school and looked at the house standing there, I said to myself, "I won-deT why somebody does not buy that place and move it into town. It could be remodelled into perhaps four apartments." People there
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could not even remodel their own apartments because the lumber was not to be had. About three days afterwards I passed the same spot and the building was gone. I said to myself, "Somebody must have bought that and moved it." But I knew it could not have been moved into town because the moving; of a building like that into town would have been big news. What had happened? They did the same with that farm residence as they did with the barn.


John Ritchie MacNicol: Pulled it to pieces?


Ernest George Hansell: Yes, pulled it to pieces.
And I have to add that they did not put men
on it to take it apart in order to retain the lumber. Airports do not need to do these things; they have a priority in the purchase of lumber. They could not have done it in the time. The building was wrecked in the same way that the bam was demolished. When I called for a return, nothing was said about this building, so that to make sure of my facts and not to unduly embarrass the government I put a subsequent question on the order paper asking for what purpose that building was now being used, and1 this is the answer: "The residence and barn in question are no longer existing." Of course I knew that. "On request of No. 4 training command headquarters the residence was retained from sale by the Department of Transport and salvaged for lumber." Well, I would suggest that they did not get half a dozen boards out of it for lumber. It may have been chopped up for firewood. "The bam was disposed of by the Department of Transport. These buildings were hazards to flight."


John Ritchie MacNicol: Probably the bam they "disposed of" was tom to pieces.


Ernest George Hansell: Of course, that is the way they disposed of it. Here was a dwelling which people needed, and bids were made on it; and here was a bam that the farmers needed and bids were made on it-both destroyed. I know it is not the money question which is important. I understand that when a minister's department is dealing in billions of dollars a bid of two or three hundred dollars is only a drop in the ocean; but imagine the feelings of the people of the community when they cannot buy lumber to store their grain, when housing conditions are so bad, and two substantial buildings are torn to pieces! That is my complaint, Mr. Chairman; I simply lay it before you.
While I am on this matter might I say one other thing, and I want the minister to answer the question or give us some light on it. It seems that when engineers are sent out to

locate a piece of territory for the building of an air training school, or anything else, they should have in mind at least one fundamental, namely, that there should be an adequate water supply. Even when I was a boy scout we were told that the first thing to think of when you went to pitch your tent was whether there was any drinking water nearby. I do not believe that these engineers were even good boy scouts, because when they went out and pitched their tent they did not make certain that there was a drinking water supply at 'hand. I suppose that since that school was built they have drilled dozens of holes within close proximity to the school to see if they could find enough water to supply the staff and the students. Eventually they concluded that they would have to pipe the water some distance; I do not know how far, but I believe it is anywhere from seven to nine miles. You see what it means. It means wastage of man-power and material, all because somebody made a mistake in not making certain that there was an adequate water supply there before they built.
How do these things happen? I could excuse it if this were the first air training school that had been built, because they had to do things in a hurry, and. even then I doubt whether it would be reasonably excusable. But this air training school has been built only recently, having been open for only about a year. Can the minister throw some light on that? What is his explanation? I am told that this is not an isolated case. It is a case I know of, because I have driven past the place time and again, and what is more, they were digging ditches and laying pipes. I did not get out to see what kind of pipes they were, because it was in winter time. They were putting in pipes, but it does not matter whether they were clay or steel pipes. The minister might say whether they were steel pipes that were being put in. We need steel for other purposes and not to fix up engineers' blunders. Moreover, it takes machinery to dig ditches and it takes man-power as well. Somebody is responsible for that and should be taken to task for making a blunder of that kind, if it is as serious as I think it is. I have another question to ask on a different subject, but perhaps the minister could throw some light on that.


Clarence Decatur Howe: At Vulcan airport sufficient
water was obtained in the immediate vicinity in the sandstone formation at a depth of approximately 125 feet. The first analyses of this water indicated that it was of approved quality for general use, but after

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continuous pumping the quality became poorer and! poorer, owing chiefly to sodium sulphate in the sandstone. The quality deteriorated to such an extent that it was unfit for human consumption. Arrangements were completed with the various well-drillers for test drilling, and drilling continued for a period of time, gradually getting further away from the site. The final result was that a sufficient supply of potable water was located six miles from the airport. The construction of the supply main from this source is now practically completed.
The question of water, and pure water, on the prairies, is not a new one. Ever since the railways were built through that country they have been fighting the water problem. It is all very well to say that an engineer going there and test drilling for water and finding it at a depth of 125 feet should have known that continuous pumping would result in a deterioration of the quality of the water. As a matter of fact, he did not, and I do not know how he could have been expected to know it. I think the engineers of the Department of Transport have done a marvellous job in locating so many airports in the prairies, so well distributed across those provinces, in every one of which water has been a major engineering problem, and it is remarkable that they have made so few mistakes. Vulcan was one of them. Fortunately, by exploring the vicinity of the site, they did find ample quantities of good water within six miles. It is rather expensive to find water, but it was found, and the water situation has been straightened out. It may be bad engineering in my hon. friend's opinion, but I can tell him that if the engineers of the department had wanted to play safe with the water situation, there are many parts of Saskatchewan, Alberta and Manitoba that would have had no airports and no training schools to-day. But we distributed the airports as well as we could. We certainly took the water situation into account, but if we had wished to play safe from the start in this regard, the airport map in the west would have been different from what it is to-day.


Ernest George Hansell: All I say in reply to
the -minister's remarks is this. Farmers have been living around that country a good many years, and I do not think that any of them have died yet from drinking the water. The town of Vulcan has a population of 700 or a thousand, all used to their well water.


Clarence Decatur Howe: What is the population of the air training school?


Ernest George Hansell: About 1,400 I believe. I am inclined to think the water is about the same
kind all through that country, and I do not believe that any citizen has died yet. Be that as it may, I will take the minister's answer. Will he answer one other question? He failed to say what kind of pipes are being used in piping that water a distance of six miles.


Clarence Decatur Howe: I shall be glad to obtain the information.


Ernest George Hansell: He did not say anything about the house and barn, but they are demolished. He was not there, but my friends were. I spoke with men who saw it done. So that -that is all there is to the bam and the house.


Mr. GILLIS:: I wish to discuss for a few minutes with the minister a matter which I think he considers of urgent importance as indicated in his statement to the house when making the presentation for his department. He said at that time that coal was one of our most pressing supply problems. Consumption has increased by more than forty-five per cent since the outbreak of war, and he goes on to set out a statement which clearly indicates that he recognizes the seriousness of that problem and its relationship to the general war production.
I am not going to be critical to-night, but I want to point out to the minister the problem as I know it and as it relates to fuel in Nova Scotia. I shall not attempt to discuss the situation in either British Columbia or Alberta, because I am not familiar with it. The major part of our coal comes from Nova Scotia, and in the light of that statement by the minister, showing that he recognizes the necessity for increasing production generally across the country, I hope that something will be done; otherwise there will be during the next year a serious domestic problem in the matter of fuel.
I am pleased that -this matter has been placed under the Department of Munitions and Supply. My experience with the minister has been that he likes to get things done, and his report to the committee indicates that he has done a very successful job in the organization of the industry generally in Canada. I know that since 1940 this matter of fuel and the fuel policy has been discussed in season and out of season in this house, by myself and by others, and it has been handled by many different departments. Labour had it, and it went to the Department of Finance. Various controls were set up, and much assistance given to industry, from the operators' point of view, by way of cash from the treasury. But the fuel situation in Canada indicates that assistance of that kind- does not
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increase production. That is the position to-day. There are fifteen orders in council that provide subsidies for the movement of coal across the country, and there have been several more with regard to controls that have been set up for emergency purposes since the outbreak of war. Personally I cannot see that very much has been done to date to increase production in the country or to take care of that problem. I think the problem so far as Nova Scotia is concerned is much more serious than the minister realizes, and also much more serious than is realized by those who head his war emergency production board. I believe the government is directly concerned in the matter in view of the assistance it has given and the financial obligations it has undertaken in connection with the industry, as indicated in this return, which is sessional paper 145E dated Monday, May 24, 1943.
According to this return the government has paid out some 84,850,000 in freight subventions and so on. In addition, assistance has been provided to meet part of the cost-of-living bonus paid to coal-mining employees, in the amount of approximately $7,000,000. Assistance has been provided to enable operators to pay certain wage scale adjustments authorized by the national war labour board, to the extent of approximately $500,000 per annum. Production and development subsidies are provided by the emergency coal production board to enable existing operations to be maintained and, where possible, to enlarge the production from existing mines, or to develop new operations. The estimated cost of this assistance for the fiscal year 194344 is about $6,500,000. So that the government has accepted financial responsibility to a considerable extent in connection with the coal-mining industry of Canada. Along those lines I think it has done a good job, but I am sceptical of the machinery that has been set up to bring about that increase in production; I think there are factors entering into it with which this board is not familiar. I am not so sure that they will be able to increase production in the mines of Nova Scotia by releasing men from the army and turning them back to coal mining, or by taking them from other industries and putting them back into the coal mines of Nova Scotia. The entire operation in that province is such that it is doubtful whether production can be increased to any appreciable extent without making new openings, and it takes a considerable time to develop new openings to the point where coal is produced. That will not help us out next winter; and if there is an immediate shortage and a serious situation, [Mr. Gillis.l
as was indicated in the minister's statement, then I think other steps will be necessary in order to obtain that production.
There are certain factors which militate against the whole situation so far as Nova Scotia is concerned. I have made it my business to get some figures in this connection, and I have gone into the matter with the reconstruction committee and other bodies for months past, in an endeavour to show them exactly what is the situation. I am not going to go all over the matter, but I wish to point out to the minister that the vice-president of Dominion Iron, Steel and Coal was here recently, and we discussed' this whole matter with him. He tried to make the point that the drop in production resulted from the men leaving the various collieries. I questioned him on the basis of the figures I have here, which were obtained from his own offices and which are fairly well up to date, going up to December, 1942. Take the Dominion Coal company, for example, which is the largest operating company in Nova Scotia. The number of men employed by that company in 1938 was 9,500, and at that time they were turning out 19,000 tons of coal a day. In 1942 the number of men employed had dropped to 8,000, and the production to 12,000 tons a day. That much production has been lost in the collieries of the Dominion Coal company; and all the men who have left the employ of that company have not enlisted. I took the vice-president of that company over the trail, colliery by colliery. I pointed out to him where No. 11 colliery, for example, had 950 men on the payroll in 1938, while to-day only half as many are employed. They did not leave their jobs there to go into the armed forces. There has been a constant fight to keep that colliery open for the last four or five years. It is folding up; it is practically worked out, and if the war stopped to-morrow we could not put these men back at work there.
That is one point. Then there is the reserve colliery of this company, which is now closed down. It employed some 450 men. There was a development at No. 25 colliery, which employed a few of those men; only recently that colliery was flooded, and work there is stopped. In 1938 there were 700 men producing coal in that colliery; it is out of production to-day and that production cannot be replaced. Then you could go along to No. 2 colliery, which a couple of years ago was producing 4,500 tons of coal per day. Now the production in that colliery is down to practically 1,000 tons per day, for the reason that the colliery is worked out. It is a pillar operation to-day; they are backing up on it,

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and you are not going to put any -more men in there when the war is over. You might be able to shove in a few to-morrow and push up your production a little, but not to anything like the extent that is necessary according to the statement made by the minister. All the collieries of the Dominion Coal company are in that position; they are old operations; they are long hauls, and they are on the wane. Coal mining in Nova Scotia, so faT as Dominion Coal is concerned, is folding up, and I do not want the illusion built up in the mind of the minister that by passing along these subsidies to the operating companies the problem will be solved, or that by taking men from the army and from other industries and putting them back in these mines the necessary production will be achieved.
I think the solution in that regard can be found only in new openings. I emphasized that point in 1940 and 1941; I pointed to the developing crisis in fuel and outlined the steps which I thought were necessary. Had those steps been taken at that time, we would have had producing mines now, but it will take some time to develop any new mines now. The same situation exists in the Nova Scotia Steel and Coal company, or the old Sydney collieries. It also exists right through that province, and what I am trying tOi prove to the minister now is that throwing subventions into the laps of the operating companies will not solve the problem of fuel production. Do not make any mistake about that.
There is another matter I should like to bring to the minister's attention, and I want to place responsibility for this problem where it belongs. I mentioned a moment ago that No. 25 colliery was opened in 1938 or 1939, which absorbed about 250 of the men who had been employed in the reserve colliery. That mine is flooded to-day; they brought another old mine into it. That was on account of faulty engineering on the part of the Dominion Iron, Steel and Coal company. I remember distinctly when they were talking of opening that No. 25 mine, just a few years ago. The men who lived in that district, who knew mining from a practical point of view, and the executive board of the mine workers fought with the coal company to develop their new slope, and to tap the old mine from the top and pump it out. In that way they would have obtained immediate production by routing quite a number of men into the old colliery, getting coal from that colliery while they were developing the new slope and tapping another section of it. They emphasized the fact that the mine should be tapped at the top and pumped out; otherwise there was a chance of running into it and flooding the new
development. That is exactly what happened. Two men lost their lives in that operation. And it is owing to the stupidity of the engineers of the Dominion Iron, Steel and1 Coal company; because the men knew better, and made a fight for it. You have lost all the production you had in that particular mine. I do not know how soon it will be over. It will have to be completely pumped' out.
You also have a fire in the largest producing colliery of the Dominion Iron, Steel and Coal company. I refer to No. 12 colliery at New Waterford. I wish to place the responsibility for that fire directly at the door of the Dominion Iron, Steel and Coal company. It was caused by a long wall belt. It was a rubber belt which ran through these workings for some 1,500 feet. The men had been emphasizing continually for the past year that that section should be cleaned out, and that the belt should be free. Reports were written on it. Had attention been paid to the reports of the safety committee which travels through the mines every three months, the results would have been different. Had they been listened to with respect to cleaning up that section, and freeing the belt, the fire would not have happened. Two more men lost their lives in that colliery. There is now a fire at that point, which is displacing some 1,100 men.
I am sometimes a little bit sceptical as to whether certain operators do not accept all the financial assistance the government will put in their way, and at the same time use everyone with whom they come in contact as sales agents, while they make their money-by subventions or in some other way.
There is a loss of production in two collieries which can be placed at the door of the Dominion Iron, Steel and Coal company. It is owing to faulty engineering, and to neglect through not keeping that section of the workings, with a belt running through, free and clear. Had it been kept clear, the fire would not have happened. That has been a matter of controversy for some time. We hope that before this matter is closed the provincial government and the mine workers will place the responsibility where it belongs-and we know who is responsible. There has been a loss of four lives, and a serious crippling of an industry which is now essential. It is to be hoped that something will be done about the matter.
We have that problem to contend with, and I want the Minister of Munitions and Supply to understand it, because it now comes directly under his department. As I said before, I think he tries to get things done, and I believe he will do so in this instance.
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That is the gloomy side of the picture; that is the actual situation. I would strongly urge the minister that he immediately take into consideration the matter of setting up some kind of organization similar to that in Great Britain. We know that when in 1917 Great Britain had a fuel crisis she had to take things over. She gave to men employed in the industry, and who knew the problem of production from the practical point of view, some responsibilities on the boards administering the order in council. That was done in order to have increased production. I shall not go into that matter in detail. She has had to do it again, during this war. That was done in July, 1942. At that time the British government set up a board composed fifty per cent of operators and fifty per cent of the men themselves. They are working together, and the matter of profit is subordinated to the interests of the state.
Then, Great Britain l\as stepped a little farther. She has declared that all mineral developments after July, 1942, in that country will be under government ownership and operation. Collieries are still operating and producing on a government-management plan. The important thing is to get the men in who understand the problem from the practical viewpoint, men who can give some practical advice as to how coal is to be produced. After three years of experimentation in the matter of assistance and subsidies, and things like that, surely we have arrived at the point where we have conclusive evidence that procedure of that kind does not solve the problem of production.
There are other factors which militate against the best results. I discussed this matter earlier with the Minister .of Munitions and Supply. Provided production on the island of Cape Breton were increased tomorrow-and that is where one finds the major coal production in Nova Scotia-provided it were increased by 100 per cent, it could not be taken off the island.


An hon. MEMBER:: Why?


Clarence Gillis: For the simple reason that the minister has not the shipping facilities. Secondly, it cannot be moved by rail because at the strait of Canso there is a definite stop-lock in getting across that strait. Only so many cars can be taken across per day.


Clarence Decatur Howe: I am very much interested in this. But I would say to my hon. friend that if he will give me the ways and means of stepping up production, producing another three or four millions or more tons in Cape 
Breton, I will take full responsibility for moving it from there, even if I have to put our entire merchant fleet on the job.


Clarence Gillis: I am glad to hear the
minister say that.


Clarence Decatur Howe: We will provide labour to that extent.


Clarence Gillis: And I believe the minister w'ould do it. But at the same time, in the interests of Canada to-day, and definitely in the interests of post-war production, the building of a bridge or causeway across the strait of Canso is something which should be undertaken. However, I shall not go into that matter now. That is something which is before the committee on reconstruction. A lot of cold water has been poured on the idea by the engineers of the Department of Public Works, and by the representatives of the Canadian National Railways. I have reports on it which evidently they have not seen.


Clarence Decatur Howe: Before we leave the other subject; as I have said, I am very much interested in the views of the hon. member, because I realize he knows a great deal about mining on the island of Cape Breton and I know nothing about it whatsoever. What would be his suggestion for getting another two or three million tons of coal out of that country in the next twelve months?


Clarence Gillis: I am not so sure the minister could get that within the next twelve months. As I said before, I do not see any solution in the operating collieries. They are old. You cannot step up production in those collieries to any great extent. The only chance of getting additional supplies of coal from the island of Cape Breton is to make new openings. As the minister knows, it takes some time to drift a slope or sink a shaft or tap a coal seam, before the product can be taken out. If a drive is put on, it might be done in seven or eight months. Openings might be made in certain places from which production could be obtained. Perhaps it could be obtained within six months.
For example, here is one proposal contained in a letter from a man in the town of Inverness. This man, Mr. J. H. Henderson, is thoroughly familiar with coal mining, and particularly mining in the county of Inverness. The mine there is producing very little. It is old, and is to-day operated by the government. For some time it was operated as a relief project. Mr. Henderson says this:
There is lots of coal in Inverness yet. and a little money and good management will yet

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put Inverness producing 500 tons a day without any difficulty. And as to the quality of the coal for domestic purposes, you know there is nothing better in Nova Scotia.
It is really a crime how this mine has been worked here. The sinking was down to 13 level when Mr. MeOoll came here, with a face of coal seven feet of the very best coal Inverness ever produced, and there was every evidence that the seam would flatten just as the late Norman McKenzie said it would. Of course the haul was long, but that could easily be overcome.
If I bad the money and a free hand I would have Inverness producing 500 tons of coal a day in six months, and a thousand tons in two years.
Wish you could prevail upon the emergency coal producing board to investigate and I am sure they would be encouraged.
I know this man, and he is familiar with coal production. He knows that area and that particular mine. There is a chance that with the expenditure of a little money, and with someone to take responsibility, the minister might get out as much as 400 or 500 tons a day, in six months.
Here is another one. On the north side of Sydney harbour is a mine known as the Jubilee mine. In the late twenties this mine was fully equipped and a million dollar bankhead was built. The people from that particular area are urging the reopening of this colliery. The equipment is there and I think this mine could be made to produce in a very short time. The minister should examine into this and perhaps he will find that he can get production even more quickly than I anticipate. The bankhead was never used; perhaps it was another investment made to keep wages from the miners.
I have suggested on one or two occasions that there is coal at Thorburn in Pictou county. This is one of the best seams of coal to be found, and people who reside in that area tell me that production could be had very shortly. The hon. member for Pictou (Mr. McCulloch) probably knows of this operation and he could give the committee more information. But they claim that the slope there taps a good seam of coal, and perhaps production could be commenced in three or four months. In the Port Morien area on Cape Breton island is a good seam of coal which is close to the surface. If there is an emergency, you could go in there and make an opening and get production quite quickly. There is a small opening in the field a few miles out of Port Morien which produces 100 or 150 tons a day. This is capable of enlargement and it could possibly turn out 400 tons a day. At the present time they are handicapped by a lack of transportation facilities. The coal is taken out in trucks some seven or eight miles, and the road is in very bad condition. They have no power available,
which retards their surface operations to some extent. Representations have been made to certain authorities, particularly in the provincial government, to have this road fixed up and to provide additional power so that the operations can be increased. It is a small operation now, but production could be stepped up and you could get some relief immediately.
These suggestions should be investigated immediately and something should be done. Again I want to emphasize to the minister that if he hopes to get the full cooperation of the men in any of these undertakings, he must recognize the fact, as was mentioned to-night by the hon. member for Vancouver East (Mr. Maclnnis), that he is dealing with human beings. The coal miner's life is a miserable one, and in the past he has had little encouragement to buckle down and cooperate with anyone. The reverse has been the case; he has been the goat every time. It would be well to examine into what has been done in Great Britain. Perhaps a board of the type set up there, with regional representatives right on the spot, could be set up here. The men could be given some responsibility in connection with production. They must be shown that you are prepared to cooperate with them. They will go all the way with you if that is done. It is no good just paying a subsidy to the operator and expecting the fellow who produces the coal to slave and sweat without getting anything in return except the knowledge that he is helping out in an emergency, an emergency which was largely created by the people who have made money in the past.
There should be an incentive to the men in the collieries to produce more coal. If this is to be done, there should be a check-up on the income tax arrangements. Just prior to the Easter recess I discussed this matter with the Minister of Finance (Mr. Usley) and pointed out that on the basis of a forty-eight hour week, when a man is asked to work an extra one or two shifts it puts him in a higher income bracket. Then the whole thing is levelled back on his total weekly earnings, and the result is that while he has worked overtime to produce an extra sixteen or twenty tons of coal, he does not get anything; the whole thing is taken up in the income tax.
My suggestion was that either this overtime should be tax free or the tax on the overtime earnings should be worked out separately. These men are not objecting to being taxed on their forty-eight hour week, but a man feels that if he stays out to-night and punishes himself to the extent of working an extra
War Appropriation-Supplies

shift or two-they do not want to do it, but they do it because there is an emergency-he should be exempt from paying the tax on those earnings, or at least they should not go back over his total weekly earnings. The thing is absolutely unfair. This applies not only to mining but to practically every industry. Men and women everywhere are adopting this attitude.


John Ritchie MacNicol: Is not that one of the reasons for absenteeism?


Clarence Gillis: I would not call it absenteeism ; it is simply a lack of incentive. In many cases these men lose money when they work overtime.
Another thing to be considered is the physical factor. The hours underground are too long. It is almost a physical impossibility to work a six-day week underground, and then follow with a five-night week. When you do that for three or four months you find you are getting pretty draggy and are feeling the need of a few hours rest. It should be recognized that people working under those conditions are entitled to a two weeks' vacation each year. That would give them something to look forward to. They have nothing to look forward to now. Every official, the man who merely checks up and travels the mine, who is not twisting his spine at the end of a shovel, gets a two weeks' vacation every year, but there is no vacation for the man who slaves and sweats. If the man in industry, particularly the man in coal mining, knew that he could look forward to a vacation for himself and his family, that there was something for which he could save and enjoy, there would be less absenteeism. When there is nothing to look forward to, you have more men taking time off during the week-ends.


John Ritchie MacNicol: They are certainly entitled to two weeks with pay.


Clarence Gillis: Certainly they are. If you
are going to try to get production, you must give the men responsibilities and recognize the fact that they are human beings. You must Check the hours of work and go into the question of vacations with pay. You must also probe the possibilities of industrial medicine. I called this matter to the attention of the ^Minister of Pensions and National Health and asked him to look into it. The Canadian Car and Foundry company, Montreal, have done wonderful work in this field. They have a doctor who specializes, and they have certain arrangements with their employees. I am told that absenteeism has been cut fifty per cent by this system of industrial medicine. It

has proved beneficial. This is another matter the minister should look into. I urge him to check the social conditions under which miners are working if he wants greater production.
I rose to make these few remarks, because in the past this business of getting production in the coal mines has been very much a matter of wishful thinking. You have been placing your faith completely in people who in my opinion have done a very bad job of organizing the fuel industry in Canada. There is too much absenteeism, on the part of management. Take the Nova Scotia coal industry, for example. Every decision that has to be made is made in Montreal. The local manager, who knows the mine, knows the employees and knows the operation, whenever a grievance comes up cannot make a decision. It passes through his hands and travels all the way to Montreal if it is a matter of any importance, and after the head office in Montreal have taken two or three weeks fiddling with something they know nothing about, you have trouble on your hands. That machinery is too cumbersome. I would give the mine manager in the local colliery responsibility to deal with the employees in the mines and settle small matters on the spot. These small matters develop into major grievances if they are allowed to drag on for weeks and months awaiting a decision by someone in Montreal, and that has happened many times in the past. Things that could have been settled promptly by the mine manager go to Montreal and are allowed to drag on, and in the meantime the men get tired of waiting for a decision and a colliery stops working here to-day, and another one there to-morrow, on account of this absentee management. If you want to get production you will have to set up regional boards as they have them in Britain, and put on those boards men who know the operation of the mine, competent coal officials who work underground and have grown up with the industry. I have a lot of respect for those fellows. They know their job, but as it is now, they cannot exercise responsibility because grievances have to be referred to Montreal. I would also have on the board some of the miners themselves who know how to get production. Other things that slow up production are a lack of compressed air, a shortage of timber, a shortage of machinery. All these things enter into production. The last time I was home I travelled the local unions and heard man after man discuss these matters and point out these things which militate against production, and which could be cured in fifteen minutes if only someone took hold and went after them.

War Appropriation-Supplies
The minister likes to get things done. He is an engineer and is used to getting things done. If he -will take hold of this realistically and work dosely with the men and check up at once on whatever is slowing up production, I think production can be increased to a great extent in Nova Scotia.


John Ritchie MacNicol: Several days ago there was a question asked with reference to the water supply for Mossbank, Saskatchewan, where there is an airfield and aerodromes. The minister whose estimates were before the committee at the time said that the question did not come within his department but under Munitions and Supply. As I understand it, the water supply of Mossbank is supplied from Moose Jaw.


Clarence Decatur Howe: No.


John Ritchie MacNicol: Where from then?


Clarence Decatur Howe: From Johnston lake, seven and a half miles away.


John Ritchie MacNicol: The understanding was that water wras to be pumped from the Saskatchewan river a distance of some seventy miles to Moose Jaw and that the airport was to be supplied from Moose Jaw. One of the reasons why that piping and pumping was done, I understand, was to supply Mossbank. That is not correct?


Clarence Decatur Howe: No. At the Mossbank site water was obtained, by drilling within one and a quarter miles of the site, but it was so highly mineralized that it was unfit for human consumption and it was necessary to continue test drilling, gradually getting farther and farther away from the aerodrome. An adequate supply of potable w'ater was obtained near Johnston lake some seven and a half miles away. This supply was developed by the drilling of a permanent well, the installation of pumping equipment and the construction of a seven and a half mile wood stave pipeline to the airport, and the airport has been supplied from this source since the fall of 1941.


Mr. STIRLING:: I had hoped that the minister would reply to the request of the hon. member for Lake Centre for his views as a member of the government with regard to the closing up of the crown companies when the time arises. I wanted in connection with that to make this suggestion to the minister, that he would take into account the fact that several of these crown companies are engaged in operations which bring them into competition with existing industry. There was a variety of reasons why the crown companies were set up. Sometimes they were to produce
commodities which Canadian industry was not at that time able to provide. One reason was that certain machinery required in retooling was available only from the United States and the priority list made it difficult to obtain that machinery.
But there are two or three of these crown companies which it appears to me are busy with the production of munitions and tools and instruments which can in ordinary times be manufactured by Canadian industry. Now that the minister has explained the changes that have had to take place in production-a sufficiency of this article has been accumulated, and there will be less of that made and more of this made-it seems to me that the time is arriving when these Canadian industries which have built up their factories, and their reputations as well, in the building of certain lines of endeavour will have competition such as it is not advisable, I suggest, for them to have.


Clarence Decatur Howe: Would my hon. friend give me one or two examples? I cannot think of a crown company in that position.


Grote Stirling: I am thinking of the Citadel, and Machine Tools, and Research Enterprises Limited1. It appears to me that all these three I have mentioned-there may be others-were brought into being largely to create materials which Canadian industry was capable of creating except under that particular stress of war. It is quite true that some of these things were to be manufactured in secret. There were secret devices which had to be manufactured in secret, and the government may very likely have had excellent reasons for not assisting these Canadian industries to expand to cope with this business. But now we are changing-over production, and the time will shortly arrive when these Canadian industries will find themselves in competition with crown companies, and I ask that the minister in replying to the suggestions of the hon. member for Lake Centre, should bear that point in mind.
Another remark I wanted to make was with regard to the capital assistance given to private companies. In the auditor general's report we have a considerable list of the moneys which have been given to various private companies, and there are described to us the two methods by which this arrangement is carried out. One method is to advance amounts monthly to satisfy the company's estimated requirements. The company submits estimates, which are certified by the treasury officials, and the estimates include a fee, usually a fixed amount. The list in the auditor general's report refers to that fee, but I notice that in the list there are very few
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instances in which the fee is referred to at all; and what we do not know, and what the public most certainly does not know, is how that fixed amount is arrived at. I listened with interest this afternoon to the hon. member for Stormont, and I think that he has gone farther in explaining some of these' matters than yet has been the case. I am of opinion that it is a great pity that not until this month of 1943 have these explanations been given, because it is all to the advantage of the war effort that the people of Canada should have explained to them how such matters as the fee and how it is arrived at are arranged for.
That applies also to the third matter which I wanted once more to draw attention to, namely the cost-plus contract. I shall read to-morrow the remarks of the hon. member for Stormont, who dealt to an extent with that matter. When the minister last referred to this question-it has been up at least three times in this house before-he gave an interesting illustration of what happens in the manufacture of a rifle, when he explained bow a fixed amount was arrived at, in compensation, shall I say, to the manufacturer of that rifle, and then he explained how from time to time that arrangement is reconsidered and perhaps adjustments take place in the fixed amount. But what I have never been able to understand is how the government, how the minister applies that method to some of the very difficult contracts which have had to be undertaken. I remember that on one occasion I asked him whether that method also applied to the case of a contractor who was building a building or creating some wrork such as, for instance, building a camp. In my own neighbourhood there is a training camp. It was built by contract. It was extended by contract. Some months later, just across the main road, a brigade camp was built. It was extended. It was extended a second time. And I know perfectly well that the local public have it in for the government all the time because they say that all that was done by cost plus contract. Now the minister has explained that in few oases can he remember a cost-plus contract of the type that the public usually understand by the words "cost plus". He has described how the cost plus a fixed amount is the method usually employed. But what I cannot understand is how the case of a camp covering a pretty considerable quantity of territory, with a considerable number of divergent buildings, which is begun, and then increased, can come under that fixed fee.
JMr. Stirling.]
In one part of the brigade camp work ceased altogether for a matter of weeks, or it may have been months, in the late summer and fall. It was said that material was short. Great pressure was brought to bear where it was necessary, and just before a particularly severe winter came material was forthcoming and I believe that those camp buildings were finished. But in the work which you arrange with a contractor to do there are serious expenses incurred if delay takes place whether on account of lack of material or for any other cause; and I should like the minister to explain a great deal more fully than he yet has done, in an understandable way for the public, how these fees, these fixed amounts, are arrived at. In that case a contractor is given the contract and his head office is many miles, perhaps hundreds of miles, away. He has to bring machinery; he has to bring certain of his people and a good deal of equipment. Freight is incurred to bring ail that in. Is that something which goes into the fixed amount calculation? And what else is there that goes into the fixed amount calculation? Obviously, recompense to the contractor for his overhead and his services. That must all go in. But what a carping public is always ready to seize on, I think, is the opportunity, in calculating that fee, in calculating that fixed amount, to make a good deal of profit which it probably is not the intention of the government should be made.
At the time of the last victory loan it was commonly said all around that interior of British Columbia that it was in these camps that the money on construction was wasted, and I am persuaded that it had its effect on the contributions put up by the individuals in that loan. Whether that is the situation or not, it seems to me that a synopsis, perhaps, of what the hon. member for Stormont said to-day could well be produced and then spread all across Canada for the people to get into their understanding how these calculations are made.


Lionel Chevrier: Will the hon, gentleman tell the committee the name of the camp?


Grote Stirling: Vernon.


John Ritchie MacNicol: I should like to know something about how contracts are let for the construction of buildings, and whether, after a contract is let, anyone, associated with the contractor or otherwise, can take away materials which are shipped to the contract for the job on hand. For instance last night I was called on the telphone and told by a workman who appears to be working around

Public Accounts
the John Inglis Company in Toronto that a certain building has been erected there- whether that is so or not I do not know -and that this one and that one are carting away lumber, nails and other materials. Is that possible if the whole contract belongs to the government? It is quite possible, I suppose, if the government has let the contract and the contractor has the right to move anything he likes; but if all material belongs to the government, can anyone take it away easily? Has the department any knowledge or reports of material placed on jobs for the government being stolen or taken away without the right to take it away?


Clarence Decatur Howe: I have carefully noted the various questions that have been asked, and I would be very glad to reply to them at a convenient time. Perhaps I can bring the situation up to date at three o'clock to-morrow, at the beginning of the sitting, and then make a fresh start with other inquiries. I will, of course, reply at that time to my hon. friend's question. The answer depends entirely upon whether the contract has been placed as a lump-sum contract with a responsible contractor. In that case the payment for the completed structure is a lump-sum amount and the disposal of the material is a matter for the contractor. He undertakes to supply the material and the labour and furnish the building according to specifications, and the government undertakes to pay him a certain lump-sum amount for doing so. I am under the impression, without having reviewed the situation recently, that all the buildings of John Inglis have been lump-sum contracts, in which case the contractor is responsible to his own pocket-book for the material he puts on the job. I am not sure of that, but I will get the facts to-morrow and look into it. There are two or three types of contracts, and it is hard to discuss contracts generally without knowing the particular one about which information is requested. Most of the contracts are unit price contracts which are in effect lump-sum contracts where the contractor is responsible for furnishing his own material and carrying out the work on a measurement basis, and there are other contracts, the cost plus fixed fee-


John Ritchie MacNicol: In the case of the cost-plus contract anyone stealing material-


Clarence Decatur Howe: -is stealing government
material.


John Ritchie MacNicol: That would be theft.


Clarence Decatur Howe: Yes.


John Ritchie MacNicol: And if particulars are
given the minister of a theft of that kind-


Clarence Decatur Howe: We will prosecute immediately. Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Wednesday, June 16, 1943