1943-03-31

STANDING COMMITTEES


[Stage Direction]
Mr. J. P. HOWDEN (St. Boniface)
presented the first report of standing committee on railways and shipping owned, operated and controlled by the government, and moved that the report be concurred in.
Motion agreed to.

[Stage Direction]
Mr. W. A. FRASER (Northumberland,
Ont.) presented the first report of standing committee on public accounts, and moved that the report be concurred in.
Motion agreed to.

Hon. J. L. ILSLEY (Minister of Finance):: Mr. Speaker, I should like to take this opportunity to advise the house that, after a careful review of all elements in the problem, we have reached the conclusion that it will be necessary to introduce meat rationing in Canada at an early day.
Canada is normally a meat exporting nation, and during the past three and a half years we have greatly increased our exports of meat products as one part of our contribution to the united prosecution of the war.
During the past year the total production of meats in this country has been even greater than in previous years. Notwithstanding considerable increases in our exports we had available for domestic consumption in 1942 supplies of meat which were approximately equal to the supplies available in 1941. Increased incomes, increased spending power on the part of large sections of the community, however, have resulted in an increased demand for meat, with the result that during the past eight or nine months spasmodic distribution shortages of meat have occurred in several parts of the country. These shortages have occurred chiefly in large urban areas in central Canada and in those parts of the country where local production is less than local supply.
It is estimated that the total civilian meat consumption in Canada in 1941 averaged 2-5
Meat Rationing

pounds per person per week. In 1942 the per capita consumption was about the same, but the increased desire and ability to purchase meat resulted in apparent shortages. In 1943 the domestic supply, after allowing for existing export commitments, will be no greater than in 1942 and may be somewhat less, while the potential consumer demand is almost certain to be greater. With an increased potential demand, and a stationary or decreased supply, there are bound to be serious difficulties of equitable distribution, and the spasmodic distribution shortages of 1942 would become chronic shortages over considerable parts of the country. This consideration alone would constitute a sufficient justification for meat rationing.
There is, however, another reason for rationing, and that is the necessity of maintaining an adequate flow of supplies overseas, where the members of our forces, as well as our allies who are in the front line of battle, must be fed.
There is an advisory committee on nutrition to the foods administration, which consists of the following members: Dr. E. W. McHenry, School of Hygiene, university of Toronto; Dr.
D.	L. Thomson, Department of Biochemistry, McGill - university; Dr. J. Harry Ebbs, Pmdi-atric Research Foundation, Toronto; Dr. L. B. Pett, Director of Nutrition Services, Department of Pensions and National Health, Ottawa; Wing Commander F. F. Tisdall, Hospital for Sick Children, Toronto.
I wish to quote this committee as follows:
After careful examination , of the various nutritional implications of meat rationing, the advisory committee on nutrition to the foods administration has reached the following conclusion:
"A ration allowance of twTo pounds of meat, plus customary and available amounts of milk, eggs, cheese, fish and poultry, gives more protein from animal sources to satisfy nutritional requirements than is required for a person of any occupation."
The advisory committee on nutrition is unanimously^ of the opinion that differential meat rationing, on the basis of occupation, is unnecessary from the viewpoint of nutrition.
The wartime prices and trade board proposes, with the government's approval, to establish a weekly ration for all persons at approximately two pounds.
Prospective supply statistics on meat are in their nature not as accurate as we would like to have, but it is estimated that after taking care of our present bacon contract, and the requirements of our armed forces and such priority needs as the Red Cross, ships' stores and certain special war projects, there will remain after rationing, a balance to augment the supplies now being sent overseas. These

additional supplies are needed because of an unavoidable reduction in shipments from other sources, and will be used, not to increase the-British ration of meat, but only to assist in. maintaining it at its present low level.
In brief, the proposed meat rationing plan-will result in a moderate reduction in the total consumption of meat in Canada, but will still allow a quantity of meat which is-safely above the minimum nutritional requirements of an active adult male worker. It will result in a more equitable distribution of supplies and will make it possible to increase the quantities which we can make available for shipment overseas.
I do not propose to go into details of the rationing plan, except to say that after consultation the wartime prices and trade board has been authorized to proceed with the necessary planning as quickly as possible. Accordingly, the details are now being worked out by the wartime prices and trade board, and the plan of rationing to be adopted, together with the effective date, will be announced by the board as soon as the programme is ready. I can, however, indicate one or two points which have been decided:
1.	It is proposed that the plan go into operation early in May.
2.	It is not proposed to put burdensome, restrictions on the slaughter of live stock by farmers for their own use and consumption. We shall appeal most earnestly, however, to all farmers who slaughter their own meat to live well within the spirit of the ration. In order to control the supply of meat entering into the channels of trade, there will be restrictions on the right of farmers and of other persons to slaughter for sale.
3.	To conserve meat supplies and to avoid discrimination against those who do not make frequent use of restaurants, it is proposed to establish meatless days in all restaurants, hotels and public eating places. This will, of course, be in addition to the usual restrictions on supplies to such establishments that go with all forms of rationing.
4. Steps will be taken to see that those who hold space in private cold-storage lockers are not allowed to use such space to evade rationing or to secure any special advantage in obtaining meat supplies.
It is expected the wartime prices and trade board will be ready to give full details of the meat rationing plan within the next two weeks. This will give sufficient time to the public and the trade to familiarize themselves with the details of the plan and thus contribute to the smooth functioning of the ration.

Meat Rationing
In conclusion I want to emphasize that meat rationing in a country like Canada is a difficult and complicated task. It will be made less difficult with the wholehearted cooperation of all groups in the community. We have had that in a large measure in the past and we confidently count upon it in the future. We attach a great deal of importance to the success of meat rationing, and I should like to say that once the programme is introduced a very serious view will be taken of any attempts as fraudulent practices, which might lead toward the development of "black markets".


Mr. GORDON GRAYDON (Leader of the Opposition):: May I ask the minister, just to familiarize the house with one particular point, whether other announcements of rationing programmes were made as far ahead as this one?


James Lorimer Ilsley: No, none of them were. It
has always been our view that to announce ahead of time the rationing of anything that could be hoarded was a wrong practice, and that has been very carefully avoided. The announcements have been left to the last possible moment. But it is difficult, if not impossible, to hoard meat. Moreover, the preparations that must be made will of themselves make the intentions of the government public and give rise to rumours, perhaps unfounded, as to what is intended to be done. Therefore it was considered desirable in this instance to announce to the house, well in advance, the intentions of the government and of the board with regard to rationing. In the United States they have not been nearly as careful as we have been in leaving their announcements to the last moment. On a great many commodities they have announced rationing well ahead1 of time, where we would not do it.


Hon. R. B. HANSON (York-Sunbury):: May I ask the minister, in the interests of clarification, this question? As I heard it, I understood him to say meat, not beef, would be rationed.


James Lorimer Ilsley: Meat.


Richard Burpee Hanson: That
means all meats?


James Lorimer Ilsley: No, not all meats.


Richard Burpee Hanson: Does it
mean beef and beef products, veal, lamb, pork, poultry-


James Lorimer Ilsley: Not poultry.


Mr. HANSON (York-Sunbuiy):: And of
course not fish?


James Lorimer Ilsley: No.


Richard Burpee Hanson: It means
meats-everything that comps under meat?


James Lorimer Ilsley: Not all meats.


Richard Burpee Hanson: What are
the exceptions?


James Lorimer Ilsley: Butchers' offals. That is an important classification of meat.


Richard Burpee Hanson: Not to
me. It is just offal.


Mr. HARRY LEADER (Portage la Prairie):: Mr. Speaker, as a cattleman, having been engaged in that business all my life, would it be in order for me to offer a few suggestions at this time? It will not take long.


James Lorimer Ilsley: No one suggestion takes long, but I do not think we should drift into a debate on this question.


Harry Leader: I do not intend to enter
into a debate. It is just a suggestion I have to offer, Mr. Speaker, and I think it is worth while. I am directing this not to the Minister of Finance but to the Minister of Agriculture (Mr. Gardiner) who I know will sympathize with me.


Mr. SPEAKER:: I am afraid I could hardly allow the hon. gentleman to raise another question. The minister has made a statement and some explanations have been asked with regard to it, which I think were entirely proper. But to introduce some other subject I think would not be in order.


Harry Leader: Well, I will ask a question, with your permission.


Mr. RALSTON:: May I point out that the statement was made on the order for motions. If my hon. friend has a question which can properly be asked on the orders of the day would it not be better to regularize the procedure by asking it then?



INQUIRY AS TO CONTINUANCE OP RATIONING PLAN

Mr. J. H. LECLERC (Shefford):: Since we are discussing rationing, may I ask whether it is the intention of the government to continue the rationing of butter this summer, in view of the fact that the creameries are opening up now with quite a large increase of production? Some of them have an abundant supply of butter.


James Lorimer Ilsley: I know of no intention to abandon the rationing of butter.
Wheat Board



CANADIAN WHEAT BOARD


[Stage Direction]
Mr. ROBERT FAIR (Battle River) moved for leave to introduce bill No. 55, to amend the Canadian Wheat Board Act, 1935.
Some hon. MEMBERS:: Explain.


Mr. FAIR:: This bill is designed to eliminate the prevalent practice of the Canadian wheat board of paying commissions to agents in connection with the sale of wheat, and to free the board to conduct its sale operations without engaging and p^ing for such unnecessary service.
Motion agreed to and bill read the first time.



QUESTIONS

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

Mr. DIEFENBAKER:: 1.	Are L. R. Lougheed, Violet Russell, and James F. Archibald, now or have they been in the past year in the employ of the oil control branch in the province of Ontario?
2.	If so, in -what capacity?
3.	'What salary or remuneration is received by each?


Mr. HOWE:: 1.	No.
2 and 3. Answered by No. 1.


OLD AGE PENSIONS-MANITOBA
Mr. KNOWLES:: 1.	Has the government of Manitoba, through its premier or any other official, asked this government to pay a supplementary amount of $3.75 per pensioner, to enable the payment of old age and blind pensions up to a maximum of $25 per month, in the province of Manitoba?
2.	If so, by whom was such request made, and on what date or dates?
3.	If such request has been made, what was the answer of the government?


Mr. ILSLEY:: 1.	The answer to a somewhat similar question to be found on page 1525 of Hansard confirmed that the government of Manitoba had asked this government to make supplementary provision to enable the payment of old age pensions up to a maximum of $25 per month in the province of Manitoba. The specific request was that the government of Canada should amend the Old Age Pensions Act in such a way as to provide that the maximum pension paid to aged and blind persons should

be increased from $240 to $300 per year, subject to reduction by the amount of the income of the pensioner in excess of $125 per year.
2.	The request was made on behalf of the government of the province of Manitoba by the Hon. James McLenaghen, attorney general of Manitoba, on May 13, 1942.
3.	In replying to the request on May 28, 1942, the Minister of Finance, after referring to the increased financial burden which would be thrown on the provinces by the adoption of the proposed amendment and the difficulties which this would create and the opposition it would arouse in the case of those provinces not in a strong financial position, stated that "the dominion would not be justified in making changes in the act which would place virtual compulsion upon provincial governments to increase their expenditure for old age pensions" but that "if the government of the province of Manitoba wishes to provide supplemental allowances for pensioners, we are prepared to amend the regulations so that they may do so without bringing about a reduction in the amount payable by the dominion." On January 20, 1943, the attorney general of Manitoba advised the Minister of Finance that the government of Manitoba had decided to pay a supplemental allowance of $1.25 per month to those persons in Manitoba who are entitled to the old age and blind persons pension and asked the dominion to make this possible by an appropriate amendment to the regulations. Under an order in council dated February 17, 1943 (P.C. 17/1280), the dominion government amended the old age pensions regulations to permit the province of Manitoba to pay a supplemental allowance to old age pensioners.


MILITARY SERVICE
Mr. MATTHEWS:: 1.	How many men in each province of Canada have been granted postponement of military training since the outbreak of war on the grounds of conscientious objection?
2.	Where, how, and in what numbers are those men engaged at the present time?
3.	What provision, if any, is being made for their employment along other lines when their
work on present projects will completed?	have been


Mr. MITCHELL:: 1. "A" 		
"B" 		
"C" 		
"D" 		
Ontario (Total) 		.... 1,309

Questions
"E"	 27
"F"	 _
Quebec (Total)	 27
"G" Nova Scotia	 12
"H" New Brunswick	 6
"I" Prince Edward Island	 5
"J" Manitoba	 1,222
"K" British Columbia	 572
"M" Saskatchewan	 289
"N" Alberta	 132
Total	 3,574
Table shows figures from October 9, 1940, up to and including February 26, 1943.
2.	As of December 31, 1942-1,212 of which 366 were on leave and 51 had been discharged -balance of 795 men engaged in alternative service work at that date.
Banff National Park (3 camps): Spray River, Healy Creek, Castle Mountain. Total unmber of men engaged in these camps, 109.
Jasper National Park, Maligne Road. Total number of men engaged in this camp, 24.
Kootenay National Park, Mile 16 and Mile 21, Banff-Windermere highway. Total number of men engaged in this camp, 98.
Riding Mountain National Park, Wasa-gaming (closed at December 31, 1942).
Prince Albert National Park, Waskesiu. Total number of men engaged in this camp, 16.
Kananaskis forest experiment stations, Seebe, Alberta. Total number of men engaged in this camp, 45.
Petawawa forest experiment stations, Chalk River, Ont. Total number of men engaged in this camp, 41.
Montreal River (Ontario). Total number of men engaged in this camp, 140.
Lac la Rongot (Northern Sask.) (Was not operated in 1942).
British Columbia Forest Service-on mainland: Green Timbers (GT-1), Mount Seymour Haney (GT-4), Powell River (GT-6), Vedder Crossing (GT-3) (closed). On Vancouver Island: Koksilah (C-3), Hill 60 (C-l), Cowi-chan (C-2), Timberlands (C-7), Horn Lake (Q-6), Loveland Lake (Q-7), Bowzer (Q-5), Campbell Lake (Q-3), Menzies' Bay (Q-2), Quinsam (Q-l), Salmon River (Q-8), Kelsey Bay. Total number of men engaged in these camps, 322.
" These men are engaged in forest protection, removal of fire hazard conditions, improvement of existing fire trails and roads, construction of fire lookouts and accessory buildings, fire-fighting and training for firefighting, salvaging fire-killed timber, production of mine props for coal mining industry, cutting of fuelwood, sawmill operations, production of lumber for disposal of timber controller, preparation of land for reforestation, forest planting control of forest insect depredations, construction of tourist facilities, forest surveys, compilation and research, scaling of timber produced for war purposes, nature work and highway construction."
3.	Most of the work in which these men are engaged will continue for some time to come. However, there is under consideration an arrangement whereby conscientious objectors will be used for farm labour and other work of national importance.



MUNITIONS AND SUPPLY-E. G. HIRST-MORALE BUILDING CAMPAIGN


Mr. POULIOT:: 1.	Who are the inspectors of the unemployment insurance commission, (a) for the province of Quebec, (b) for each of the other provinces?


Mr. MITCHELL:: 1.	(a) Guay, M., Sladen, R. V., Barker, W. H., Sims, R. H., Mireault, J., Lamarre, N. G., Guertin, M., Tellier, G., Bellemare, C., O'Reilly, F., Shepard, S., Langevin, J. I., Mayer, C. S., Parke, A. A., Holly, T. M., Guilbault, A. A., Boisvert, R., Brunelle, J., Poitras, L. E., Boivin, A., Daoust, H., Foisy,
Questions


SELECTIVE SERVICE-RAILWAY EMPLOYMENT
Mr. POULIOT:: X. What class of railway employment is considered essential by the national selective service board?
2.	Is this classification accepted by the army?


Mr. MITCHELL:: 1.	Every class has the right to apply for postponement. No class as such is exempt, but special consideration is given to operating and maintenance.
2.	The army is not asked to accept or refuse this classification. The D.O's.C. representative has a right to make representations to the board.


Jean-François Pouliot: I rise to a question of privilege. According to practice in this house, when two departments are involved in the answer to a question, that answer is given not by one of the ministers concerned but by the Secretary of State, in behalf of all departments. This question involves at least two and perhaps four departments, the Department of Labour on the ohe hand, and on the other hand the army, meaning by that the three branches of the army. Therefore the answer that has been given to part two of this question is irregular, because the Minister of Labour has no authority to give it. I want the answer to be given at the next sitting by the Secretary of State in behalf of the Minister of Labour and the other ministers concerned.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. HAZEN:: 1.	Did the Department of Public Works purchase rugs for government offices in 1942 and 1943?

Questions
2.	If so, (a) how many did it purchase; (b) from whom did it purchase them; (c) what size were they, and what make; (d) how much did it pay for each of them; (e) where is each rug at present located?



R.C.N.V.R. RECRUITING STATIONS-COMMANDING OFFICERS

[Stage Direction]
Mr. MacIvINNON (Kootenay East):
1.	Who are the commanding officers of the various R.C.N.V.R. recruiting stations in Canada?
2.	What is the rank of each?
3.	What is paid in the case of each for, (a) pay, (b) dependents' allowance, (c) living out allowance?
Mr. MACDONALD (Kingston City); Return tabled.

Mr. BLACKMORE:: 1.	What was the average price per pound paid to the producer in Canada for wool in each of the years 1939, 1940, 1941 and 1942?
2.	What is the average price to be paid for the 1943 clip?
3.	What was the average price paid in the period 1934 to 1939?
4.	What authority fixes the price of wool to the Canadian producer?
5.	By whom are such prices recommended?
1942 VICTORY LOAN



LOTBINIEBE AND NICOLET-YAMASKA

Mr. DUBOIS:: 1.	What was the cost of the last victory loan campaign (1942) in the counties of Lotbiniere and Nicolet-Yamaska?
2.	What sums were paid in each county respectively for advertising, commissions, salaries, hotel expenses, travel and public meetings?



WARTIME HOUSING LIMITED-CATERING CONCESSIONAIRES

[Stage Direction]
Mr. FRASER (Peterborough West);
1.	What are the names or firm names of the concessionaires catering to the different wartime housing staff houses in Canada as mentioned in sessional paper 122E?
2.	On what terms are they allowed the use of the staff houses?
3.	Do they pay for (a) breakage and repairs to equipment, (b) wages of the dining room and kitchen staff?
4.	What revenue has wartime housing received for each staff house?
5.	What is the monthly revenue from each staff house by departments?

Mr. DIEFENBAKER:: 1.	Have instructions been given by the Department of Labour to the various national services boards that men called up who are in medical categories lower than A1 and A2 are to be allowed to return to their homes?
2.	If so, when did this change of policy take place?
3.	How many men enrolled under the National Resources Mobilization Act are in lower categories than A2?



SUBSIDIES ON AGRICULTURAL PRODUCTS

Mr. STIRLING:: 1.	On what agricultural products whether im-. ported or produced in Canada has the government undertaken to pay subsidies?
2.	What were the dates of the commencement of such payment?
3.	At what rates are such subsidies?
4.	To whom are such subsidies paid?
5.	What guarantee has the recipient of the continuance of such subsidies?



NATIONAL STEEL CAR COMPANY-MALTON PLANT

Mr. NOSEWORTHY:: 1.	Had this government given any financial assistance to the National Steel Car Company for the building, extension or equipment of that company's plant at Malton prior to the government's expropriation of the plant? If so, in what amounts, on what dates, for what purposes and on what terms was such assistance given ?
2.	Had the British government provided any machinery or equipment for this plant prior to time of expropriation? If so, what is the value of the machinery so provided?
3.	By whom is the new machinery installed since expropriation being paid for?
4.	By whom is the building program being financed since expropriation?
5.	What capital expenditure has this government made on building and equipment for this plant since expropriating it?
6.	What are the terms and conditions of expropriation made to date with the National Steel Car Company, with regard to this plant and its equipment?



DEPARTMENTAL INSPECTORS

Mr. POULIOT:: 1.	How many inspectors are there in each branch of each department?
2.	What is their total number?



PROCEDURE IN QUESTIONS PASSED AS ORDERS FOR RETURNS

["That is what happens when three or four thousand people go on the\n\t'\nrampage. We have all the machinery necessary to achieve results, given the proper degree of patience. We have the kind of machinery that is talked about in the United States, machinery which provides for a waiting period. No one needs to resort to the strike weapon in order to obtain justice. I think that is a true statement."]
Richard Burpee Hanson: Before you pass, Mr. Speaker, to the next order of business I should like to know why the question of the hon. member for St. John-Albert (Mr. Hazen) with regard to rugs for government offices has been made an order for return, when it applies to only one minister and one department. Is the minister afraid to have an answer to that question go on Hansard, or why is it not answered by the minister in a straightforward way instead of having it buried as an order for return?


James Layton Ralston: My hon. friend has a habit of bursting out on these occasions-


Richard Burpee Hanson: The heavy artillery is called up!


James Layton Ralston: -and I want to say to him that his remarks are quite uncalled for. The question asked is with regard to the purchase
Procedure in Questions

of rugs in the year 1942 and 1943, how many were purchased, from whom, what size they were and what make, how much was paid for each, and where each is at present located. That means a list of all the dealers from whom rugs were bought, the size and make of each, how much each cost and where each is at present located. I think my hon. friend is entirely out of order in objecting to its being made an order for return, and I submit this was just made an opportunity to make a gibe without very much ground for it.


Richard Burpee Hanson: I rise to a question of privilege. Under a ruling made by Your Honour-


Some hon. MEMBERS:: Oh, oh.


Richard Burpee Hanson: All right; we will have this battle out right now. I feel in pretty good shape to-day and I am not afraid. Under a ruling made by Your Honour yesterday in relation to a statement made by the hon. member for Moose Jaw (Mr. Ross) with reference to the hon. member for Wey-bum (Mr. Douglas) that he had imputed motives to him, I suggest that the Minister of National Defence who has come to the rescue of his colleague, has imputed to me motives that are improper, in the suggestion that I only took this opportunity to have a gibe at somebody. I suggest that the minister be asked to retract that statement.


Mr. FOURNIER (Hull):: Mr. Speaker-


Richard Burpee Hanson: On a point of order, I want a ruling from the chair.


Alphonse Fournier: What is it, a question of privilege or a point of order?


Richard Burpee Hanson: It is both a question of privilege and a point of order.


Jean-François Pouliot: If it is a point of order I have a right to speak on it; and, sir, believe it or not, but on this occasion I find it my duty to rise in defence of the Minister of National Defence. I listened carefully to his remarks, and there was absolutely nothing in what he said that could be offensive to the hon. gentleman, with the possible exception of those two words, that he was considering himself a self-made martyr. Well, that is praise; Gandhi is put to shame by him. Now that I see a smile on the face of the hon. member for York-Sunbury (Mr. Hanson), perhaps the tempest in the teapot is over.


Richard Burpee Hanson: I do ask the Minister of National Defence to withdraw the statement that I took this opportunity only in order to have a gibe at somebody.


Thomas Vien: I regret very much that such a remark should be passed across the

floor of this house. I take it that in judging a point of order raised by an hon. member in regard to something he alleges to be offensive, the broad principle might be applied that an offensive remark would be something no gentleman would say to another. If you consider it on that ground, then the statement made by the minister might conceivably fall within that category. He implied that the hon. member for Y'ork-Sunbury (Mr. Hanson) was asking a question with no desire for information but simply for some ulterior motive of his own. That is a suggestion which might well be taken as covered by the word "gibe" and I think the minister should withdraw.


James Layton Ralston: I bow to your ruling, Mr. Speaker; if the tempest is over I withdraw the statement.


Mr. MACKENZIE (Vancouver Centre):: On a point of order I direct your attention, Mr. Speaker, to the fact that in rising to make his remarks the hon. member for York-Sunbury said the Minister of Public Works (Mr. Fournier) had not answered the question in a straightforward fashion. I think that remark should be withdrawn as well.


Richard Burpee Hanson: I shall be happy to do so.


Alphonse Fournier: Now that the incident seems to be closed, perhaps I may have a chance to say one word. The exleader of the opposition said I did not wish to answer this question because I was afraid to. Well, as yet I have not been afraid since I have been with the public works department, and I hope I may never be afraid to discuss what takes place in that department. As to this rug question, which has been dragged around in the press and in the house on the orders of the day, in the six months I have been with the department I do not believe we have purchased more than six or seven rugs, with the exception of those bought for the hostel, and those were approved by Colonel Thompson. Now we are asked for a list of rugs purchased and where those rugs are now located. In five minutes I could get the answers to all questions except the last one, but in order to ascertain where the rugs are now located we have to obtain the information from the different departments for which they were purchased. The moment I receive that report you may be sure I will not be afraid to give the information in the house. Perhaps the hon. member for York-Sunbury thinks I can be easily frightened. Let him try it during this session, and we shall see.

Labour Conditions



[Stage Direction]
On the orders of the day:
Gordon Graydon: I am in receipt of a telegram
to-day from the president of aeronautical lodge No. 717, Malton, International Association of Machinists, which indicates that this union has made a strong protest against the lay-off of 400 employees in the Victory aircraft plant at Malton, Ontario. The wire also indicates that the company has declared that a further lay-off is imminent. The president of the union believes that a serious crisis is imminent, and has asked that an immediate investigation be held to prevent a possible tie-up in aircraft production at the plant. Will the Minister of Munitions and Supply assure the house that he will take such steps at once as may be necessary to avert the crisis mentioned in the wire which I have received?


Hon. C. D. HOWE (Minister of Munitions and Supply):: I may say that I received a
similar wire. We wired back referring the president of the lodge to a section in an agreement between the lodge and1 the aircraft company, the ink on which is hardly dry, which reads as follows:
Disputes arising from this agreement or from any other cause and affecting any employee or group of employees covered by this agreement shall be settled in meetings arranged between the management and shop committee of the local lodge.
My information is that the president of the union had refused to discuss this matter with the management, as provided by the agreement. I am afraid that we will have to take the position that the agreement applies to both parties; so that I suggest to the hon. member as the leader of a great party that to make the matter a political issue at this stage is not wise.


Gordon Graydon: May I reply to the minister, who has suggested that I made this a political issue? The words "political issue" were used in the house yesterday afternoon. May I assure him-and I am sure .on reflection he will realize this-that very few hon. members have taken political advantage as little as the present leader of the opposition in the house has during the seven years he has been a member of parliament. If at times he may have seemed to have done so, that was not the intention. I am quite sure that on reflection the minister will wish to withdraw that remark with respect to myself.
I raised this question affecting a number of men who happened to be in my own constituency. This is the first time I have referred the matter of this plant to the minister. It did seem to me, not only from a telegram, but also from information gained from a personal source, that this was a matter of great importance. I do not know the terms of the agreement the minister has now brought into the discussion, and I ask that he withdraw the imputation he made that I am playing politics. I want to say further that I do not make any apology for standing in my place in the House of Commons and defending, where I can, the working man of Canada. I want the minister to take my word that I had no intention of making a political issue of the matter.


Clarence Decatur Howe: I of course agree to take my hon. friend's word. But I do suggest that in this particular case the government has worked with the management of the plant, and has spent days in an effort to straighten out a situation which has been unsatisfactory from the time the plant was started. I do suggest to the leader of the opposition that when difficulties occur between the management of a government-owned plant and its employees, it does not help the situation to raise the matter in the house. To do so destroys the proportions. It is a very common habit, I know; but I would ask hon. members in all parts of the house to refrain from doing so. I assure them it is not helping the government in straightening out such matters.


MONTREAL TRAMWAYS STRIKE
[Stage Direction]
On the orders of the day:
Mr. JEAN-FRANCOIS POULIOT (Temis-couata): I should like to ask the Minister of Labour if he will tell the house whether any agreement has been made, with the help of Doctor Goldenberg, with regard to the tramways strike in Montreal.
Humphrey Mitchell: Mr. Speaker, I should like to tell the house I have been informed that the strike of employees of the Montreal Tramways company has ended. Early to-day word was received from Doctor Carl Goldenberg, who was appointed as a commissioner under the Industrial Disputes Investigation Act to deal with the strike, that he had been successful in his efforts to bring the parties together. It is reported to me that a satisfactory agreement has been reached as a result of which the men have returned to work. I understand it will take a day to restore normal conditions.
The Department of Labour has not yet received information of the terms of the settlement. However, I think it is sufficient for
Labour Conditions

now that the house should know that the striking employees and company management have got together, and there has been a resumption of tramway and bus services.


Mr. J. R. MacNICOL (Davenport):: I should like to ask the minister a question with reference to the Montreal strike. I am glad to hear that it is settled. If I had held off my visit to Montreal until to-day I should not have had to walk three miles as I had to do yesterday. Was any approach made to the minister's department before this strike was called? I have always understood that there was ample machinery available in the department which could be used before a strike is called, and that the minister or his department would take steps to prevent a strike being called. If no approach was. made to the Department of Labour, I should like to know why not. What means has the department available to stop strikes like this taking place and interrupting our war production?


Humphrey Mitchell: If my hon. friend will read Hansard of yesterday he will find that every effort was made by my department to prevent this strike. I said on a previous occasion and I still believe that since the war broke out there has not been a strike called which was more unnecessary than the one that took place in the city of Montreal. May I say further that I have no respect for anyone who would take advantage of the adversity of this country at the present time to win an industrial dispute illegally. While you can never tell what a group of human beings will do under a given set of circumstances, I believe that if the formula which was submitted by myself on Sunday to all the parties to the dispute in Montreal had been complied with, there would not have been a strike and we could have overcome these difficulties by the normal use of the machinery available in the Department of Labour. Let me say to those who say that we have no labour policy that the machinery provided by the Industrial Disputes Investigation Act stands, I think, without a peer in any of the united nations.


Richard Burpee Hanson: But it does not prevent strikes.


Humphrey Mitchell: My hon. friend says that you cannot prevent strikes.


Richard Burpee Hanson: I said that it does not prevent them.


Humphrey Mitchell: I should like to see him sitting in the lonely seat I sometimes occupy.


Richard Burpee Hanson: I would not do it, not for a million dollars.


Humphrey Mitchell: That is what happens when three or four thousand people go on the
	'
rampage. We have all the machinery necessary to achieve results, given the proper degree of patience. We have the kind of machinery that is talked about in the United States, machinery which provides for a waiting period. No one needs to resort to the strike weapon in order to obtain justice. I think that is a true statement.



PRIVILEGE-MR. DIEFENBAKER OIL CONTROL-EMPLOYEES IN ONTARIO BRANCH

[Stage Direction]
On the orders of the day:
Mr. J. G. DIEFENBAKER (Lake Centre):: I rise to a question of privilege, and in doing so I hope I shall be able to restore kindly feeling in the house. The following question appeared in my name on to-day's order paper:
1.	Are L. R. Lougheed, Violet Russell, and James F. Archibald, now or have they been in the past year in the employ of the Oil Control Branch in the province of Ontario?
2.	If so, in what capacity?
3.	What salary or remuneration is received by each?
The answer to the first question is no, and the answer to the second and third is, "Answered by No. 1."
The Joy Oil Company Limited was prosecuted in Toronto for alleged offences committed in August, 1942. On that occasion certain witnesses gave evidence respecting the infringement of oil control regulations of Canada. J. C. McRuer, K.C., appeared for the crown, and James F. Archibald gave evidence as follows, under oath, upon examination by Mr. McRuer:
James F. Archibald, sworn, examined by Mr. McRuer:
Q. Mr. Archibald, on the 14th of August last were you engaged in conducting an investigation on behalf of the oil controller for Canada?
A. I was.
That was on August 14, 1942. The evidence continues:
Q. As part of your duties did you go to the premises of the Joy Oil Company on Fleet street?
A. Yes, I did.
So far as Lawrence B. Lougheed is concerned, I find1 this in his evidence, as reported at page 36, upon examination by Mr. McRuer:
Q. Mr. Lougheed, on August 14th last you were employed to do some special investigation by the oil controller of Canada?
A. Yes, sir.
Q. And you were working under his direction?
A. Yes.
I point out that in the prosecution of the case with respect to the oil control regulations,, both these men, being examined by crown counsel, stated they were employed by the oil

Beef
control branch. I would' now ask the Minister of Munitions and Supply to eSplain how it is that the answer I received1 to-day is that these two men are not, nor have they been in the last year, employed by the oil controller.


Clarence Decatur Howe: This question was sent in the
ordinary routine to the oil control branch, and it was answered by that branch. I would remind my hon. friend that he attacked the Minister of Labour (Mr. Mitchell) for giving him the wrong information, and I have not yet heard him apologize, although I think it was admitted that the information given was not wrong. I suggest that could be the case in the present instance.


John George Diefenbaker: All I have to say
is. as was stated by me the other day, that the information I had as to the existence of other letters was a statement to such effect made by the hon. member for York-Sunbury (Mr. Hanson). To-day it is based on perfectly clear sworn evidence.


Humphrey Mitchell: May I say I do not think the hon. member was altogether fair with me. The return I made was an honest and a true return.


John George Diefenbaker: Absolutely.
Mr..HANSON (York-Sunbury): The fault, if any, was mine.



CONFERENCE TO CONSIDER POST-WAR PROBLEMS -CANADIAN PARTICIPATION

[Stage Direction]
On the orders of the day :
Mr. M. J. COLD WELL (Rosetown-Biggar):: Mr. Speaker, in view of the announcement from Washington to-day that a conference will be held in the United States on April 27 to consider long range post-war food problems, wilt the government inform the house if Canada is to participate and, if so, how and by whom this country will be represented, and give such other information as parliament is entitled to receive?


James Layton Ralston: I shall take note of my hon. friend's question and refer it to the Prime Minister (Mr. Mackenzie King). It will be dealt with by the Department of External Affairs.



FEEDING TO 800 POUNDS OR BETTER OF VEAL CALVES OF BEEF ANCESTRY AND TYPE

[Stage Direction]
On the orders of the day:
Harry Leader: I should like to ask a question of the Minister of Agriculture in connection with the providing of more and better beef for Canada. I should like to say that the suggestion I have to make has the support of the province of Manitoba. Last fall I sent a suggestion to the wartime prices and trade board, but apparently they were not in favour of adopting it. In view of the fact that many thousands of veal calves of beef ancestry and type are now slaughtered when at two hundred pounds in weight, would the Minister of Agriculture consider adopting the policy of feeding these calves for baby beef until they reach a weight of eight hundred pounds or better?


Hon. J. G. GARDINER (Minister of Agriculture) :: The policy of the department has been to encourage the feeding of as many calves as possible to greater weights, but the fact is that by far the greater number of veal calves which are slaughtered in this country are not beef varieties, but dairy varieties. If the department were to say that these were not to be slaughtered as veal, they would be slaughtered the day they were born, or at least a large percentage of them. There is some doubt as to whether we should be helping the food situation by declaring that calves should not under any conditions be killed for veal.


Harry Leader: The department in Manitoba states that 50 per cent of the veal calves now being slaughtered are of the beef type.


James Garfield Gardiner: That is in Manitoba.



CANADIAN FORCES


[Stage Direction]
On the orders of the day:
Mr. G. S. WHITE (Hastings-Peterborough):: The Department of National Defence announced yesterday that rail troop units will be formed in Canada. As this is a new and important departure in army set-up, perhaps the minister would be good enough to make a statement to the house.


James Layton Ralston: My hon. friend sent word to my office that he was going to ask this question. I did not know that he had seen the press statement. There is nothing I can add to the

Supply-Business of the House
press statement except to say two things. First, the number of men involved will be less than one thousand. I do not want to have the idea get abroad among the men in the armed services that thousands of men will be required for this service. Second, we have the fullest cooperation of the two railways.


George Stanley White: Is this unit being formed for service in Canada or overseas?


James Layton Ralston: Overseas. That was stated in the dispatch.



MILITARY SERVICE


[Stage Direction]
On the orders of the day:
Mr. LIGUORI LACOMBE (Laval-Two Mountains):: I should like to ask a question of the Minister of National Defence, which follows upon the remarks made by the Minister of Finance (Mr. Ilsley) a few moments ago in connection with rationing. Will the government take the necessary steps to prevent the rationing of farm hands by the calling up of farmers for military training and keeping them in military camps?


James Layton Ralston: The policy of the government with regard to man-power is well known. If any change is made in that policy, it will be announced.

The house in committee of supply, Mr. Bradette in the chair.


James Layton Ralston: Item 70.


Olof Hanson: This is not in accordance with the arrangement made last night when it was understood that we were to go on with the supplementaries and take up item 416. Item 417 and the other items were passed. What my hon. friend is trying to do now is to slip in two or three departments that have not been in before. That is not going to happen so far as I am concerned. It is not in accordance with the arrangement that was made.


James Layton Ralston: I think it was announced last night. I say to my hon. friend that I will not even take the trouble to aSk the Chair to rule whether a charge of "slipping in" estimates is parliamentary or not. All I wish to say is that it is characteristic of the attitude which the hon. gentleman has assumed in this committee. There is no attempt to "slip in" anything. It was suggested that two departments would be called in order that we might be able to go on with them when we were in supply. The intention was just to take a [Mr. Ralston.)
moment to call the two items and immediately go on wit!? the further supplementary estimates.


Richard Burpee Hanson: After that little lecture, may I suggest to the minister
that he read Hansard, at page 1715:
Mr. Graydon: What will be the business tomorrow?
Mr. Ralston:	To-morrow we shall proceed
with the further supplementary estimates.
That is the first order of business. The minister continued:
We hope to call the two other departments, Fisheries and Public Works, and if we finish those we shall proceed with the budget resolutions.
I respectfully suggest to him that the plain meaning of that is that we shall go on with the supplementary estimates first; if we finish those we shall take two items, one in Fisheries and one in Public Works, and then we shall go on to the budget resolutions. That is the undertaking.


James Layton Ralston: I say to my hon. friend that no such meaning can be drawn from it. I stated what the business was. The fact that it was stated in a particular order does not mean that we are proceeding in that way. If the committee has any particular objection to the calling of these two items, I shall be glad to consider it. My hon. friend tells us to-day that he is in great shape.


Richard Burpee Hanson: I said that I was feeling fit.


James Layton Ralston: He must be, if he is able to take on three members over here at once.


Richard Burpee Hanson: To be
exact, three members like the Minister of Public Works.


James Layton Ralston: I suggest that we call these items and go on with the business which was to be taken up.


Leslie Gordon Bell: Mr. Chairman, I wish to support the hon. member for York-Sunbury in this matter.


Richard Burpee Hanson: There was an undertaking.


Leslie Gordon Bell: Last night there was an understanding that the supplementary estimates were to be dealt with first, and then that two departments might be called. I suggest this, that the calling of departments and opening up a number of departments may quite conceivably interfere with the privileges of hon. members in bringing matters of importance before the House of Commons. The Prime Minister (Mr. Mackenzie King), in

Supply-Business of the House
taking away private members1 days, stated that there would be many opportunities for hon. members to deal with matters affecting their constituencies and the country generally when the house went into supply. On Thursdays and Fridays the house can go into supply automatically and discuss the estimates of the departments already called. This means of course that, if all the departments or a number of departments are called, the estimates are left to the end of the week, and then there is no opportunity in this session of parliament, because we are deprived of private members' days, for hon. members to raise matters of importance.
I am not forgetting that early in the session my colleague, the hon. member for Weyburn (Mr. Douglas) intended to raise a matter of debt, and something of an understanding was reached that the following Monday the house would go into supply so that the matter might be raised. We did not go into supply until Monday of this week. The result was that the discussion of a problem which intimately affects western Canada consumed two days, and then last night we were in a tremendous rush.
I think that the government would be well advised to take into consideration the rights of private members, and that the government having taken from us the right of private members to move motions on private members' days, we should be allowed to retain the right to bring matters of importance forward when the house goes into supply.
It will be said that this is not being denied the house, but we know perfectly well that we find during the session that the estimates are usually relegated to Thursday and Friday, which means that we have no such opportunity, if a number of departments have already been called.
I am therefore suggesting that we carry out the understanding arrived at last night and that we proceed with the further supplementary estimates. Then we can see as a house whether we should call new departments after we have concluded the further supplementary estimates.


Gordon Graydon: Perhaps I may clarify the situation a little. At the conclusion of business last night it was, I believe, the understanding of all hon. members, or at least most of them -certainly it was mine-that the urgency with respect to the further supplementary estimates was acute, so acute that the Minister of Finance asked us to adopt a procedure which is very seldom asked for, and which was somewhat grudgingly given; but because civil
servants' pay was involved, and on that ground alone, hon. members were disposed to make some concession. It certainly was my understanding, and I think it must have been the understanding of most hon. members, that the urgency of the further supplementary estimates was so great that they would be the first thing to be handled this afternoon by way of business. The then acting leader of the government, namely, the Minister of National Defence, stated:
To-morrow we shall proceed with the further supplementary estimates. We hope to call the two other departments, Fisheries and Public Works, and if we finish those we shall proceed with the budget resolutions.
This means that after they are finished, the budget resolutions come on, not the further supplementary estimates. I do not want to quibble about this, because after all there is no point in it, but I did ask the acting leader of the government this question:
Mr. Graydon:	Will more than one item be
called in Fisheries and Public Works?
My object in asking the question was to learn whether or not Public Works and Fisheries would simply go in and then come out; and what the then acting leader of the government then said was, "Yes". It may be that he did not intend so to state; but I went on that assumption, having in mind the fact which I worked out in one pattern, namely, that the further supplementary estimates were to be dealt with first; the several items in these would be passed, and then of course we would take up the budget resolutions. I would ask the minister, having in mind the fact that last night we gave up many of our rights with respect to the question of the passing of these items, for reasons which were then given, that the further supplementary estimates be now proceeded with, because if the urgency was as great as we understood it to be, they should be gone on with. If there was not such urgency, we should not have been asked to do what we did last night.


James Layton Ralston: All I wish to say is this. First, with regard to the report in Hansard, I am sony I did not notice the report. I thought my hon. friend asked, "Is there only one item to be called?" and I said, "Yes"; and I think I gave a clear impression that it was simply for the purpose, as my hon. friend says, of going in and coming out. I assure the committee that had I known that these items would take one-fourth of the time we have taken in discussing them, I would not have called them now. I called them simply in order to get them out of

Supply-Business oj the House

the way. The hon. member for York-Sunbury suggests that they were slipped in. There was no idea of "slipping in". Just as soon as I came into the chamber I sent a note to the three leaders of the groups in this house to inform them that these items would be called. I am wholly in the hands of the committee, and I do not propose to delay my colleague the Minister of Finance an instant in connection with these items. May I say that we have these items called in order that the estimates of the respective departments may be taken up on Thursday and Friday so that the house may have business to go on with and so that the desire of hon. members that the estimates be dealt with early may be met. There are thirteen departments which are not yet in.


Leslie Gordon Bell: There are two open now.


James Layton Ralston: And we do it for that
purpose. I do not think the rights of private members have been curtailed very much with regard to going into supply. We have had a debate for two days, and the Minister of Finance had to wait until nearly eleven o'clock last night before the further supplementary estimates came on. What I resented was my hon. friend's suggestion that these departments were being slipped in. I especially mentioned them last night and I did not think it would make the slightest difference because I thought it would take only about two minutes before we reached the supplemen-taries. But I have no objection to acceding to my hon. friend's request and going on with the further supplementary estimates and allowing this item to stand.


Mr. CHURCH:: Mr. Chairman, it is just
as well that the principle which has been brought before the committee by private members be cleared up. Last session the same matter came up. In the dying hours of the session several millions of dollars of estimates were voted in two or three hours. Some of the departments had never been before the committee at all before the last few days of the session. Down to the middle of July not one dollar of the estimates had been discussed in committee, and we sat here from January until July. I do not want the same thing to happen this session. If the opposition is to have no control over expenditure, parliamentary government is at an end. Private members' days have been abolished. Matters brought up by private members which in other sessions before the war would be referred to committees have been left lying on the order paper. The opposition will have to take the stand that they will refuse supply unless they

have a reasonable opportunity to bring before the house and the committee questions affecting control of expenditures. I brought this matter up last session. I wrote the auditor general, and I found that the auditor general has not much effective control over the ordinary estimates and cannot veto any of them or any of the supplementaries which are before the committee to-day. It is the comptroller of the treasury, not the auditor general, who has control over three billion dollars of war appropriation expenditures. So long as expenditures are within the four corners of the five or six subsections of the appropriation bill, they are legal. The auditor general has no control over the appropriation bill, although some departments have their own auditors.
In my opinion, a private member should be allowed more reasonable latitude on the orders of the day, as in England on war matters. The opposition has given the government pretty good support ever since the war started. We have passed ordinary and some appropriation war expenditures which were introduced sometimes without any notice. But the opposition has a function to perform. It took one hundred years of strife in England for parliament to get control over expenditures. We have lost that to-day so far as any check over expenditures is concerned.
I agree with the hon. member for York-Sunbury that there is a great deal of information which we have not been given. We cannot get the facts. We ask questions, but we cannot get information. Questions put on the order paper are made orders for returns and then a month or two later some member of the house will ask the same question and be answered by a minister, while the return which was ordered to be brought down months before is ignored. Our labour legislation will have to be brought up to date. If we are going to change our system we shall have to change our rules, too. The most important thing we have in Canada to-day is parliamentary, cabinet, constitutional and law reform, and the opposition must have control over expenditures and regain our lost control.


Mr. HANSELL:: This group has always tried to facilitate the business of this house. It is seldom that we take part in any sort of wrangle, but I wish to say that we support the hon. member for York-Sunbury and the hon. member for Rosetown-Biggar in their contention. The fact of the matter is that not only are private members' days taken away this session, but they have been taken away from us ever since the start of the war, and that is a long time. The only opportunity

Supply

Finance
we have now of discussing important matters is on a motion to go into supply. We have a small opposition in this house compared with most parliaments; nevertheless the opposition in this house represents a very large section of thought in Canada. We have had resolutions placed upon the order paper every session since the war began, and have never had an opportunity of discussing them. That being the case, I say that we should have as much opportunity as possible of being able to bring before the house at the proper time our thoughts, suggestions and complaints.
One other matter. It is all very well to talk about being able to carry on business on Thursday and Friday, but that does not altogether follow, in respect of going into supply. There are committees working which could bring in reports from time to time. We have spent a good many hours in this house in discussing other matters that have not been introduced by private members; yet when a private member desires to discuss something, time always seems to be limited. We in this group join with other hon. members who have made a protest.
Item stands.



DEPARTMENT OF FINANCE

[Stage Direction]
1,16. Royal Canadian Mint, including the Dominion of Canada assay office-further amount required, $16,630.
Jean-François Pouliot: Mr. Chairman, I have a few questions to ask of the Minister of Finance. The Royal Canadian Mint was at first under British management, and members of parliament received each year a report of the mint's operations. Some years ago, however, at the time Mr. Dunning was Minister of Finance, the mint was transferred to Canada. We had then the same deputy minister of finance that we have now, and the mint ceased to publish any reports. I asked Mr. Dunning if there was any report and he sent me one. It was covered with dust and went back some time ago. I would ask the Minister of Finance to be kind enough to tell the committee why there are no more reports from the mint to members of parliament, and in the second place why there is no report on the gold reserve, if any, that we now have.


James Lorimer Ilsley: I am informed that there is a report on the mint, published annually. With regard to the gold reserve, I do not know much about it. Is that the reserve of gold held by the foreign exchange control board?


Jean-François Pouliot: Yes.


James Lorimer Ilsley: I do not think a report on that is published. I think it is regarded as
72537-109}
not in the public interest to publish the holdings of the foreign exchange control board in, gold or foreign securities.


Jean-François Pouliot: I have not the correspondence at hand, but I remember distinctly that when Mr. Dunning was Minister of Finance and after the mint was transferred to Canada he told me that no more reports were published and furnished to the members. The minister may have a report sent to him, but he may have had it prepared himself.


James Lorimer Ilsley: I have here the copy that was sent to the printer, Royal Canadian Mint,, report for the calendar year 1942. I believe copies were tabled. I am confirmed in that..


Jean-François Pouliot: I thank the minister for his answer. It is true to the British tradition.. I do not see why there should be any objection to giving us some information with regard to the gold reserve.
Another point that I cannot understand fs that Canadian bank notes are issued by the Bank of Canada with the guarantee of the Bank of Canada, and on the other hand the gold reserve is held by an altogether different organization. It seems to me the reserve should be in the hands of the guarantor. I leave it at that. I would have much more to say, but since the time is short I will give an opportunity to the minister to answer questions that may be put to him by other hon. members. I am surprised that my hon. friends-, of the New Democracy group, the former-Social Credit group, have not waited for this: item to express their theories about coinage-and currency. Of course coinage and currency-come from the mint, and this would be the-very best item for them to expound their theories on, to explain how they could give us cheap money.
To conclude what I have to say and leave the floor to the hon. gentlemen of the New Democracy group, I would tell the minister that I am in the very best possible disposition with regard to him and highly appreciate the work he does. When at times I mention some individual I have no grudge-against anybody, but I find that the system is; wrong. For the very same reason I complained' in the past about a certain financial group of which the former premier of Quebec was a member, and we had other representatives of the same group here in this house. I objected to those people on behalf of the Canadian-people and on behalf of the man on the street.
I conclude by telling my hon. friends who. are kind enough to listen to me that no reform will be possible in monetary matters so long: as the same staff is kept in the Department.
Supply-Finance

of Finance and other subsidiary positions. So long as they are there with their procrastinated ideas, no useful reform will be possible. We shall have other opportunities to discuss the matter. I leave it at that for the moment, but I wanted to make it clear at this time in the session.


Richard Burpee Hanson: First, I -desire to suggest that the little unpleasantness between the Minister of National Defence and myself a little while ago was due, I think, to a misapprehension on his part, or shall I say sto a distinct understanding in my mind as to what the undertaking was between the Minister of Finance and the leader of the opposition, referred to in Hansard immediately preceding the statement made by the minister, which will be found in the first column of page 1715, which I believe he will agree was an undertaking given that the first order of business to-day would be the supplementary - estimates. If the words "trying to slip something in", or whatever words I used are offensive to the minister, I shall be glad to withdraw them. As a matter of fact, however, I did think, in the parlance of the street, that the minister was trying to put over a fast- one, having regard to what was said previously. Having said that, I think we can forget about it.
Next, I wish to ask the Minister of Finance a question with respect to the modus operandi *of making payments on the basis of a resolution passed here last night. I do not understand that the mere passing of a resolution upon which a bill is to be based which would later become law would legalize a payment until the bill is passed. The most it could do I should think-I am speaking just on general principles-would be on the theory that, the resolution having been passed, it would be an obligation on the House of Commons to pass the succeeding bill. If that be so, I do not think there was quite the urgency that the minister suggested yesterday, because it is only the enactment of the bill that can make the payments legal. Perhaps the minister would tell me just what the technical position is.


James Lorimer Ilsley: The hon. gentleman is right. I was in a difficult position last night, because this is the 31st of the month, and it is customary and very desirable that certain payments be made to-day. If those items had gone over until to-day it is quite obvious that I could not get my bill through to-night 

very likely we shall not get the items through this afternoon, although I hope we shall-because I knew there was to be considerable discussion on some of the items.

True, it is legally correct to say that until the bill is passed there is no statutory authority for the payment.


Richard Burpee Hanson: No legal authority.


James Lorimer Ilsley: I would prefer to say that there is not statutory authority, and perhaps I should go so far as to say there is not legal authority for the payments. On the other hand, once the House of Commons passes an item, we know we are safe in making that payment, for the bill is retroactive.


Richard Burpee Hanson: That is a commitment.


James Lorimer Ilsley: Yes, it is a commitment, and it is difficult to imagine anything happening to these items after that, at any stage either in this house or in the other chamber. On one or two occasions in previous years when I have been in a corner of that kind I have instructed the comptroller of the treasury to pay once the matter was passed upon by the House of Commons, but I want that stage reached before I direct that public money be paid, I did not explain that fully last night, and I did use the word "legally"; I said I did not like to do anything irregular or illegal. Strictly speaking, there is not the legal authority to pay to-day; yet the payments are being made. The alternative would be not to allow the payments to be made until this goes through, and I knew it would not be through until to-might at the earliest, and perhaps later than that.


Richard Burpee Hanson: That
clarifies the position. I was thinking it over after I had gone home last evening, and I came to the same conclusion. That is about all I have to say on- that point.
Ostensibly we are dealing with item Jfl6, concerning the royal mint. I have no observations to make in that regard, but I wish to ask the minister about the principles underlying the application of item 477, which has to do with the cost of living bonuses. I understand this is to provide the civil service with cost of living bonuses based on the index of the cost of living in Canada, and that it is payable in certain lower brackets of the service. Will the minister put on record briefly what is the position; who get this bonus; the basis of payment, and the allocation? Is that done arbitrarily by the treasury board on the basis of the vote, or how is the treasury board given authority to make the allocation? Is there parliamentary direction for that? It would not be in a statute, as far as I know, and the

Supply-Finance
only place it might be is in the, vote, in either the main estimates or the sup-plementaries.
Then, could the minister tell us what is the total of the cost of living bonus not only with respect to the government service but in regard to other services in Canada that are paying the bonus? Could the minister give us some estimate of how many millions or hundreds of millions of dollars are being paid out in cost of living bonuses? As I understand it, the object of the policy of the administration is to keep down inflation. Payment of the cost of living bonus is a direct inflationary measure. I agree that there are compensating or off-setting measures, such as the increased cost of living, but all these extra payments are in the nature of inflation. It may be that I am all wrong in my reasoning; perhaps I have no grounds for the theory I have in mind that all these things are inflationary in character and that the cost of living bonus paid by the government to the civil service, the cost of living bonus paid by employers throughout the land, plus the subsidies paid by the government through the wartime prices and trade board together form one of the most inflationary elements in our economy. Would the minister care to tell the house what is the position in terms of dollars and cents, or just how much this extra spending has amounted to?


James Lorimer Ilsley: I have no estimates here. I think I could get an estimate of the amount being paid in cost-of-living bonuses, but it would be only approximate-


Richard Burpee Hanson: I realize that.


James Lorimer Ilsley: -because these bonuses cover different periods for different employers. Some employers pay cost-of-living bonuses based on the rise in the cost of living since 1939. Others pay on the basis of the rise in the cost of living since October, 1941, which has been very slight, while others pay on the basis of the rise since some intermediate date, generally the date of the last basic wage increase. I do not know just what particulars or how many particulars the hon. gentleman wants, and I will have to speak in a general way because I have no figures before me.
When we introduced our price ceiling policy in October, 1941, and our wage stabilization policy which took effect on November 15, 1941, we did a drastic thing as far as both prices and wages were concerned. When we said to wage-earners that they should not get increases in their basic wage rates unless they could qualify for them under special provisions
of the wages order, we thought we ought to give them a guarantee that they should not be penalized if we failed either wholly or partly in our attempt to freeze prices. Accordingly it was provided that there should be a compulsory cost-of-living bonus based on the increase in the cost of living after October,
1941.	As a matter of fact, despite our best efforts the cost of living did rise 2-4 points by July, 1942, and therefore compulsory cost-of-living bonuses came into operation for all employers of Canada, based on that rise. The great majority of the bonuses are twenty-five cents per point per week, which means sixty cents a week at the present rate. That was over and above the cost-of-living bonuses paid prior to that, and many were paid before that; it was the rule rather than the exception in large industries. I might add that since July,
1942,	the cost of living has declined. At present, according to the last monthly report of the bureau of statistics, it is only 1-4 points above October, 1941; and if that condition continues, it will result in a reduction in the cost-of-living bonuses. It may or may not continue; that remains to be seen.
So far as the civil servants are concerned, they had no basic increases in their pay after the outbreak of war, and in the summer of 1941, when the cost of living was rising very rapidly, from one to two points a month, it became apparent that considerations of justice demanded that some recognition be made of that fact in the case of the lower-paid civil servants. Consequently an order in council was passed providing for the payment to civil servants getting less than $2,100 a year or $175 a month, of cost-of-living bonuses based on an 11 point increase, or an 11 per cent increase, which was the increase in July, 1941, over August, 1939. It was provided in the order in council that there would be no adjustment until the cost of living rose by five points. It did rise five points by July, 1942; so that there was an adjustment upward of the cost-of-living bonuses of these lower-paid civil servants. The result was, if I remember correctly, that they were paid on a 17 per cent basis, rather than 11 per cent. Those are the cost-of-living bonuses paid to those civil servants to-day.
There is a provision that a cost-of-living bonus shall not increase the salary of a civil servant beyond $2,100. That is to say, if a civil servant is in receipt of a salary of $2,000, and the 17 per cent cost-of-living bonus brings it to $2,150 or $2,200, he does not get that extra $100. It just goes up to $2,100. Otherwise at that $2,100 point an injustice would arise.
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There is of course an inflationary effect arising from cost-of-living bonuses. When we pay any money to any section of the public which spends its money, or when we pay subsidies to any group of producers or importers, those payments are, to that extent, inflationary in their effect. Money will be spent which would not be spent by those people, had they not received it from the government. There *can be no doubt about that.
On the other hand we have taken the view that it is much better to stabilize the cost of living by subsidies than it is to let it rise, because a rise in the cost of living, which would result in wage increases, if there were no cost-of-living bonuses, would start us into an inflationary spiral which would have a much greater inflationary effect than that of merely adding to purchasing power in the community. It would be possible to add to the purchasing power of the community without putting any [DOT]upward pressure on price levels if, for example, we could take it all back in the form of taxes, or in savings. As hon. members know, we do that to the extent we can. But there is nothing a person can do if price increases take place, wage increases take place, and as a result of wage increases more price increases, step by step, increasing in rapidity until the whole price level is out of control. That is the present situation in many countries, and has caused a pretty bad situation. That is the reason why we are so anxious to stabilize prices, and why we do not like price increases and wage increases. We think the whole performance is prejudicial to the country as a whole, and to every class of people in it.


Robert Fair: Mr. Chairman-


The CHAIRMAN:: I saw the hon. member for Vancouver-Burrard (Mr. McGeer). Before we go further I would ask that the committee be patient with me because, in committee, we have no list of speakers, and I can only do my best to be impartial to all.


Mr. McGEER:: In rising to support vote
416, for the sum of $16,630, requested by the minister, and dealing with the Royal Canadian Mint, including the Dominion of Canada assay [DOT]office, I take advantage of this opportunity to draw the attention of the government and the committee to the importance of the mint. Not only is it important to our political economy generally, but it has great bearing -on much that is important in the industrial life of our country.
As we have been going along we have been *entertaining some strange ideas with respect to money. On more than one occasion I have

dared to suggest the time has come when the government must assume the responsibility for maintaining the issue of the supply of a medium of exchange, and that it must guard, protect, maintain and regulate its circulation so that government can finance its administrative responsibilities, and so that people living in a collective society may secure from the use of the medium of exchange of the nation the greatest measure of assistance in, distributing among themselves those goods and services they are capable of developing for human use.
We have departed very far from some of the fundamentals of the sound use of sane money. I have been accused-if my hon. friend wishes to say anything, then let him come into the house and take his place; but he should not interrupt me from behind the curtain. That is the height of discourtesy.


Richard Burpee Hanson: I beg the hon. member's pardon. I was talking to an hon. gentleman, possibly in too loud a voice. I did not wish to be discourteous to the hon. member.


Gerald Grattan McGeer: I had some experience with the hon. member when he was chairman of the banking and commerce committee in 1934, and I happen to know something about the kind of courtesy he extended to me then.
What I wish to bring to the attention of the Minister of Finance, the government and my colleagues in parliament is that we are plunging along, exercising a capacity to spend money we never believed we possessed. Back in the hard days of 1933-yes, back in the days of 1931 and 1932-


Leslie Gordon Bell: And 1938.


Gerald Grattan McGeer: and, as my hon. friend says, 1938, there was no money to put people to work, despite the fact that they were desperately in need of employment, and in the midst of a million jobs crying to be done. To-day under the pressure of war we have learned that in one year we can spend $5,500,000,000 upon activities which result, not in productive enterprise, with security for the money spent, but in the unfortunate and disastrous consequences of the destruction of war.
I want now to refer to the mint, because I wish to draw the attention of my colleagues in parliament to the need of getting back to sane finance in the creation and issue of money. I have been told that we who advocate the use of national currency are funny-money men. Yet how funny is the money of a nation

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that was not available in times of dire depression, in times of universal want, and is available in abundance in times of war.
When we look at the records of the mint some surprising features develop. I direct the attention of the Minister of Finance to the table which appears on page 808 of the Year Book of 1942. He will notice that in 1933 the worst year of the depression the silver coins issued by the mint amounted to $155,000. If he will check the figures for 1941 he will find that this figure had risen from $155,000 to $3,534,000. Back in 1934 I drew attention to the fact that the coining of money was one of the most profitable enterprises of the government, and that that was why it should forever remain the most guarded and protected prerogative of democracy, as it was in the days of kings the most respected and safeguarded prerogative right of kingly authority. In the creation of money under our act we provide that three hundred and sixty grains of silver minted into a certain form has one hundred cents of money value. Copper and a little bit of other metals which have no value at all, minted in a certain way, have ten mills or one cent of value. Let me quote my observations with regard to the point that governments create money out of their power to enact laws. I said:
When, for example, a government passes a law which says that fifty grains of copper, tin and zinc minted in a certain way constitutes l/100ths of a dollar or one cent, the government creates money out of nothing but its power to pass laws, the money value of fifty grains of copper, tin and zinc being infinitesimal. The market value of the metal in the one cent coin has nothing whatever to do with the money value that the coinage law gives to the metal when it is developed and issued as a one cent coin.
Similarly is this so when the government creates a silver dollar. When the government declares by law that 371 grains of silver in the United States or 360 grains of silver, 8/10ths fine, in Canada, minted in a certain way, shall have a money value of 100 cents or $1.00, the government creates silver money by passing a law.
Everyone knows that there are 480 grains of silver in an ounce, and that the price of silver per ounce has fallen to as low as 26 cents. Even at its present governmentally-fixed price of 50 cents an ounce, the silver content in a silver dollar is worth roughly 38 cents.
If 3C0 grains of silver were worth on the market 100 cents, silver would have a value just under $1.30 an ounce. Therefore, the government, by declaring the weight of the metal in a silver dollar to be roughly three-fourths of an ounce, and by fixing the price of silver at 50 cents, creates with every silver dollar minted 62 cents of money value out of nothing but its power to pass laws.
Mind you, sir, when you take twenty-eight cents worth of silver and at a nominal cost mint it into a dollar of Canadian legal tender,
the mint is making a profit of sixty-two cents on every dollar that it coins. Back in the days when I was advocating the recognition by the government of this simple fact, I suggested that now that we had moved into the realm of paper money and bank deposits, our mint should mint, print and issue all metal and paper currency. If you can take twenty-eight cents worth of silver, coin it into a Canadian dollar and make sixty-two cents on the operation, what profit will you make when you take a bit of pulp, convert it into paper and print it into a dollar bill? The cost of printing a paper dollar is infinitesimal compared with the cost of minting a silver coin. Yet we in parliament, the guardians of the people's interests, the protectors of the public domain, give to our chartered banks the power to print and issue and use as their buying power, paper dollars.
There is another suggestion that I wish to make. With governments that borrow, as with individuals, the payment of the debt is always a remote contingency, while the expenditure of the proceeds of the loan is often an immediate happiness. I do not suggest that that affects the Minister of Finance of to-day. Realizing the debt load that we are accumulating, I say to my colleagues: If you wish to look forward to the peace-time period with any hope of enjoying in a peaceful way the fruits of the tremendous sacrifices that are being made in this war, some better method of financing and meeting unpayable debts must be discovered and developed as an improvement over anything that has been in use before.
During this war, in these days of terrific events, we are moving along wholly unconscious of the Niagara falls of debt that may be before us.
Let me come now to the changes that are taking place. Even the greatest and most important changes in the world of economic life, in the world of human affairs, have approached almost unnoticed and come into being without our realizing that they are here. When we fought to establish the Bank of Canada as a publicly-owned institution my colleagues will remember that back in the days of 1934 there was just a little handful of members in the Liberal opposition who were in favour of a publicly-owned Bank of Canada. The election was carried on, and I believed that as Liberals we had gone to the country with a declaration that we would establish the Bank of Canada as a publicly-owned institution. When I came to Ottawa in 1936 I found that I was wrong in that conclusion. But despite strong opposition we amended the act in 1938, making the Bank of Canada a publicly-owned institution.
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First, but fifty-one per cent of the capital stock of the Bank of Canada was taken by the government. In 1938, however, we won the victory by making that institution wholly the property of the people of Canada. Is there any banker, any Tory, or any reactionary to-day who would dare to think of undoing that great reform?


Mr. HOMUTH:: Or is there any Liberal?


Gerald Grattan McGeer: We were the men who did it over Bennett's opposition. Wte have still a great job to do. That job is to make the Bank of Canada function not only as a bankers' bank but as a people's bank as well; and I have no hesitation, in declaring that that is one of the jobs which Liberalism has to do, and which I know is going to be done.
We are issuing a great deal of money to-day. Yet we ask, should our paper money be printed by a private corporation known as a bank-note company? The time has come, and I bring this to the attention of the minister, to establish the mint as the source of issue of all paper currency to be circulated in the dominion. I would go further; I would make the mint the printing house for all the bonds and public securities which are issued by governments in Canada. Yes, I would go even further than that; I would make it the issuer of the ration books as well. Knowledge has come to us of the organized efforts of countries opposed to our scheme of government, and of some of those who were looking to the day of the clash at arms now raging, who had set up all the machinery and had it in operation before the war began, to print United States and Canadian currency. The problem now is not merely one of dealing with local criminal counterfeiters; the problem is also one of dealing with organized counterfeiting maintained with all the. power which enemy government financial organizations have to develop counterfeit currency. In the wreck of one German plane which was knocked down while flying over France during the early stages of the war, millions of counterfeit francs were found. In the matter of security against counterfeiting of currency it is essential in my opinion that all bank notes should be issued in their original form through such an institution as our well established mint, with all the safeguards and protections that can be afforded.
There is another matter I would like to draw to the attention of hon. members. We are told time and time again that the government cannot afford this or that. Take, for instance, old age pensions. Many still hold the view that old age pensions are a menace to the development of thrift. But is there any man sitting in this chamber to-day who believes
(Mr. McGeer.]
that we are doing all we can do and should do when we maintain an old age pension system which keeps 170,000 aged Canadians who have reached seventy years in pauperism and living on a pittance of $20 a month? You say to me that we are issuing all the coins that are needed, all the coins we can use, all the copper and silver and all the dollar bills which our trade can use. But you need have no doubt of the fact that if we would issue old age pension payments in silver dollars which cost only twenty-eight cents each, or in paper dollars which cost less than one cent each, every old age pensioner will gladly receive and use that form of national currency and every merchant with whom he deals will be glad to accept it. The talk, that that form of payment of old age pension being inflationary can no longer stand. That argument can never be advanced again, because in this war we have demonstrated that we can control inflation, not of two or three hundred million dollars of government expenditures, but even when the expenditures of government for war purposes rise, as they have risen, from an estimate of $100 million in 1939 to $5,000 million in 1943. Never again let any man, in face of the proof of the power which we know modem government possesses to control inflation, deny to the aged of Canada in the eventide of their lives the decent old age pension which the Canadian government has the power to create and to give without imposing any extra burden upon the taxpayers of the land, on the ground that it will cause inflation.
I come to another phase. In 1933 our mint issued $155,000 of silver money. The issue has risen until to-day it is probably over $4 million. Well, why did we not coin the silver reserves in 1933 and use the money to put some people to work, maintaining the air force, maintaining the navy, maintaining our defences, if you will? These are questions which hon. members who are voting this country into debt by the billions might well consider, in the hope that a way of financing the war will be found which will help us to come out victorious without being overwhelmed with a debt load which will involve *us in the inaction and depression from which we suffered after the last war. It was not inflation, Mr. Chairman, which caused the post-war depression; it was the deflation which came as the result in part of the endeavour on the part of government to liquidate the debts of the war.
When I speak of money, let me point this out. You know that when you go to government officials in the tax department they will

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not accept a sack of potatoes or a bag of wheat in payment of taxes, they want money, and quite rightly so. But when a government itself demands payment of taxes in money the government must see to it that the circulation of money is maintained and comes [DOT] through proper channels into the possession of the citizen, with which he as a taxpayer can meet his obligations to the government.
My hon. friend says, no doubt, that we want sound money. Let us agree upon that. But when we talk of sound money let us recognize that national currency provided by the constitution of Canada, the issue of which is a constitutional responsibility of parliament, a money that has the backing of the resources of the entire nation, must be a sounder money than a substitute for money that is issued by a monopoly of bankers whose stock in trade is the credit of the nation, whose business is debt and whose profit comes from interest. Yes, they say, you have to keep our banking system sound. But we have to keep our nation sound as well, and a nation overloaded with unpayable debts can never be any sounder than an individual overloaded with unpayable debts. You may say that our national income has risen. True. But national incomes rise and fall, while a debt load once fastened upon a nation goes on forever.
There are just one or two things I would like to say about gold and the part the mint plays in that matter. I have never believed that gold should be used as a reserve for domestic currency. I have never believed that it was wise for a government to restrict its power to issue national currency by an arbitrary factor such as reserves of the gold standard. But I have always recognized that gold has an established and irreplaceable function in the world of international trade.
I do not want to be guilty, Mr. Chairman, of the bad taste of quoting my own book, although many of the things I have said in it are coming true. I should like for a moment, however, to direct members of the house to the conclusions I long held about gold, just as I directed their attention to the conclusions I hold about nationalizing the merchant banking system, to which I am opposed, because I hold the same views on gold to-day. Back in 1934 I wrote in the "Conquest of Poverty":
Gold and silver should be used as the means of settling international trade and credit balances. No gold whatever and no appreciable amount of silver should be used as domestic or the basis for domestic currency. Both should be recognized as the means of advancing international trade for it should be recognized that they are established by custom as the effective means of settling overlapping balances between nations.
As international trade increases the need for gold and silver for that purpose will become increasingly expanded. That need will grow more rapidly than will the production of those metals. Gold and silver should be revalued at once; gold should be raised to $50 an ounce and its gradual increase to $100 an ounce should be recognized as a possible necessity. Silver should be raised on a parity with gold, that is to $3.35 an ounce, and its increase to $6.70 an ounce should also be accepted as a possible requirement of the not too distant future.
Now I appreciate that to the conservative mind this proposed revaluation of gold and silver may appear to be extravagant, but they should not forget that the increase in the value of gold from $20 to $40 an ounce has failed lamentably to bring about the increases in international trade and debt settlements that were anticipated, nor should it be forgotten that the increase in the price of silver from 26 cents to 50 cents an ounce had little or no effect as a factor in increasing world trade.
It should also be remembered that the New Deal includes an honest and sincere desire to improve the lot of the people of -Europe, Russia and the millions that are barely existing in China, Manchuria, Japan, India and Africa. Gold and silver should be treated as the international currency that will permit the trading nations of the world to lend assistance to establish world peace by aiding in the conquest of world poverty.
As proof of the continuing value of gold as international money let me recall that when Soviet Russia was at the lowest point in her standing among world nations and in the realm of international affairs the Soviet government was able to purchase in every capitalistic nation any machinery and equipment for sale with gold as the medium of exchange. The Soviet representatives came to Canada and took our engineers; the men from our mines- and not only mining engineers but mine bosses and mine superintendents-and entered into contracts to take them to Russia to develop Soviet production. The only reason the Soviet government of that day could do it was that gold was an international money, and her payments of wages and salaries for services rendered were made under gold contracts payable in London and New York. I offer that as an illustration of my belief that in the years following the war, in the great reconstruction period that must come to pass if peace is to prevail, gold and gold-producing nations, silver and silver-producing nations-and Canada produces both gold and silver-will have a field of service that is wider and more valuable than it has ever had before.
Now what is the real attitude of sound money bankers and orthodox financiers to gold? Following their advice, we shipped gold out of this country as though it were just an ordinary commodity. Let me give the house the figures as to gold exports from thiB

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nation, shipped out as non-monetary gold on a commodity basis. From 1930 to 1941 we shipped out gold valued as follows:
1930 			 $ 43,453,601
1931 			 58.093,396
1932 			 71,479,373
1933 			 84,350,237
1934 			 102,536,553
1935 			 115,595,279
1936 			 131,293,421
1937 			 143,326,493
1938 			 166,205,990
1939 			 184,115,951
1940 			 204.479,083
1941 			 206,040,026
Total 			 $1,510,809,303
Yet this is Canada's international money. This, the one thing that is recognized as money the world over, and we shipped it out like an ordinary commodity to the extent of $1,510,000,000 in the ten years preceding the war. Let any banker stand up and say now that it would not have been the part of wisdom to accumulate that gold in our own Canadian mint in order to have it on the day when we needed international money to serve the needs of war. What would the position of the Dominion of Canada have been if we had had the gold we shipped away in our possession the day that war was declared? What- will our position be in the future if we continue to treat our gold not as international money, but as a mere commodity such as wheat or lumber or any other perishable consumer goods? Is not now the time to consider that important question? Oh, yes, my friends say, but we had to meet our international debts; we had not any other means of settling them. Such was the pre-war attitude, but we shall always be in that position if we fail to manage our international trade and control the movements of our international currencies, credits and investments. The powers of regulation that have come into being under the pressure of the war disclose to us many of the fallacies under which we have suffered in the past. And if wTe as Liberals and as representatives of the people of Canada fail to recognize and to put into effect the lessons we have learned then, we shall fail in taking advantage of the opportunities the experience of the war is offering to us now.
I would commend to every hon. member an article which appears in the Globe and Mail, published at Toronto, of Wednesday, March 31. It is headed:
Keynes' Plan Uses Gold, Reverses his 1942 Ideas, Bids for Lower Pound.
The article states:
Dr. Melchior Palyi, noted economist, says reasonable proposals are endangered by fantastic inflation now in United States.

The article is written by one of the best financial editors in Canada, Mr. Wellington Jeffers. He says:
Dr. Melchior Palyi, who was in Toronto yesterday, is an American citizen of international reputation and experience as an economist, a man who was in pre-Hitler days adviser to Germany's central bank and chief economist of the Deutsche Bank, the largest European institution. He is now a research economist with the University of Chicago, sees merit in Lord Keynes' plan for an international clearing union, for a bancor as an international currency unit geared to gold and also great difficulties ahead.
Further he says:
Although the plan of Lord Keynes for a postwar international clearing union (as described in a cable from London in the Globe and Mail of March 29) is not entirely clear in all particulars, two things do stand out:
First, it proposes a basis for an agreement for mutual stabilization between the United Kingdom and the United States governments, and that means in practice American support of the pound;
Second, the new international bank currency, the bancor, is to be based on gold, though not inflexibly.
Time does not permit me to refer to all that is in the article, but if hon. members want to get a picture of post-war possibilities of disagreement and conflict, this article will give them something to think about.


Joseph-Arthur Bradette: I have to inform the hon. member that he has spoken for forty minutes.


Gerald Grattan McGeer: 
Mr. ESLING:: The reply to the hon. member for Vancouver-Burrard must properly rest with the Minister of Finance. I want to get back to the cost-of-living bonus, because representations have been made to the government from a number of industrial organizations, and particularly from munitions workers, which clearly indicate a contradiction in connection with the bonus. The Labour Gazette, which is the official organ of the Department of Labour, in April, 1941, stated that in order that the standard of living for workers might be maintained in the face of rising costs due to war conditions a cost-of-living bonus might properly be applied. And in August, 1942, the cost-of-living bonus for munitions workers was fixed at sixty-one cents a day on the basis of a six-day week. That amounted to $190 a year. That is for such a worker in a munitions plant. But by reason of the fact that the cost-of-living bonus is included in one's taxable income, that bonus of sixty-one cents a day is reduced to from thirty-eight to forty-two cents according to the man's dependents or other exemptions; this applies to a munitions worker with a wage just over $1,800 a year.
Of course any thought of the minister changing that phase of the tax at this session is out of the question, because it would upset the entire budget. But perhaps it may be considered for the next session, because it is a direct contradiction of the government's policy as stated in (he Labour Gazette and as stated by the government in fixing the bonus.
We are now on special supplementary estimates for last session; and there are estimates and supplementary estimates down for this session. It is to be hoped that in the interests of the good name of this House of Commons these estimates will not be delayed until the dying days of the session, as they were last year. The passing of the estimates last year was clearly a disgrace to this House of Commons. Why, all the estimates were put through in about three days. The estimates of the Department of Labour totalling some $18,000,000 were put through in forty-five minutes. Those of the Department of Agri-
72537-110}	'
culture were more contentious; they took four and a half hours. Then we came to the Department of Transport and the Department of Public Works, $16,000,000 in the one case and $12,000,000 in the other; they went through in one hour. The estimates of the Department of Mines and Resources, amounting to $11,000,000, went through in two hours and a half. Those of the Department of National Revenue, amounting to some $16,000,000, and of the Post Office Department, some $45,000,000. were passed in less than one hour each. Surely the last session of parliament was the most wasteful anyone could contemplate. We sat here for 123 days, practically one-third of which was taken up with the discussion of the speech from the throne as it referred to the plebiscite, and the resolutions and bills relating thereto. Our one hope now is that the government will bring down these estimates early enough so that private members may have an opportunity to discuss them, as they are entitled to do.


Robert Fair: On another occasion I raised
my small weak voice in behalf of the low-paid workers all across Canada in connection with the recent increase in the price of beverages. This is only a small, five-cent item, but I think people will realize that even the low-paid workers have to eat three times a day, and that as a result this five-cent increase will cost them no less than $55 a year. Not many days ago the Minister of Finance told us that we should not bring up these contentious matters. He told us we had a cost-of-living index.


James Lorimer Ilsley: May I ask the hon. member what item he is speaking to? Under the arrangement made last night he has the right to speak to items 416, 417, 421, 422, 423, 424, 425, 426, 427, 420 and 430, but I am anxious that the remarks of hon. members should be relevant to one of these items, and I think they should state with what item they are dealing, so that we may not drift into a general debate.


Robert Fair: I am speaking in connection
with item 417, which has to do with the cost-of-living bonus. I hope I have the right to speak on it, because I do not want to be out of order. On March 22. as reported at page-142S of Hansard, the minister had this to say t
Someone might say: You have a cost of living index which you are holding up before us; but is your cost of living index a true index? That matter has been most carefully investigated. A pamphlet entitled, "Is the Cost of' Living Index Phony" has been issued by the-wartime prices and trade board, and in that pamphlet they have shown that upon the most careful investigation it is a true index of prices. It is a much truer index of prices than would
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be indicated if we had a different system which allowed prices to go up all-round the articles in the index. But by our ceiling policy we keep prices down over the whole field, and we have a true cost of living index.
I maintain that if we are to have a true cost of living index, it must reflect the cost of meals, because meals are necessarily included in the cost of living. On March 22 a return was tabled in reply to some questions I had asked. Paragraph 9 of that order read:
Wifi the increase in the cost of meals be reflected in the cost of living index?
I think that was a proper question under the circumstances, and the reply was:
The index reflects only the changes in prices of foods purchased for home consumption.
If you can eat at home it is all very fine, and a number of hon. members do eat at home most of the time. But we have many people who are not privileged to do so, people who have been compelled to leave home, as I was years ago. I remember the first job I got, at a time when jobs were scarce and help was plentiful. I went to work at $9 a week and it cost me $5.50 for room and board. That was my start when I landed in New York, and many people all across Canada to-day are in the same position. They have to eat, and when prices increase they are all affected in exactly the same way. So that I say we have not a true cost-of-living index. If the minister insists that the board continue to permit this increase in the cost of beverages, then I say the government and industry should pay a cost-of-living bonus to equalize that extra cost in the restaurants as well as in the homes.
I have had a number of small voices all across Canada telling me that I was putting forward the [DOT] case of the low-paid worker. The last letter of that kind I received contained a clipping from PM of March 18, headed, "Dandy Idea" and reading:
Many restaurant owners won't admit that butter rationing has increased their profits. Kosoff's restaurant, on West 43rd street, east of Times square, brags about it, and with reason. For on its menus it carries a box stating that it had gathered surplus of $1,000 through reduced butter costs, and had contributed that sum to a number of war relief outfits. Rosoff's also gives service men a ten per cent reduction on their checks.
That is just one of the samples I have been getting. In some restaurants they have [DOT]changed Hungarian goulash to Irish stew and [DOT]raised the price, though they have not changed the dish. In connection with stews and the material going into them, the minister reminded us that the cost of beef to the restaurants had been increased considerably.

If that is so, that increase should have been reflected all the way down to the producer, but I have not noticed any such increased prices being paid. So that I am wondering what the wartime prices and trade board has been doing, to permit an increase in one place without having it extended all along the line.
I do not think it is necessary to say very much more at this time, but on behalf of the low-paid workers I would ask that something be done toward having the old price reestablished, or else that the wartime prices and trade board see to it that the cost of living bonus is increased to meet the increase in the cost of living of those who eat in restaurants.


Karl Kenneth Homuth: Before the minister replies to the hon. member for Vancouver-Burrard, as he undoubtedly will, since the hon. member made some rather startling observations, I would suggest that one thing the minister should answer is the statement made by the hon. member in regard to the Bank of Canada, when he said: "Another job we Liberals have to do is to make this a people's bank, not a bankers' bank, and I know it is going to be done." Was this said with the approval and consent of the minister, and is that the policy of the government? I think the house should1 have an answer to that. Too often a member of parliament will rise in his place and enunciate a policy Which may suit his section of the country, or himself, but which is repudiated in other parts of the country. Very often in those circumstances we find a discrepancy of policy which is not in the best interests of the country. We ought to have a definite answer as to whether this is the government's policy.


James Lorimer Ilsley: The hon. member for Vancouver-Burrard was speaking on his own behalf, not on behalf of the government. I did not understand his statement in the same way as did the hon. member for Waterloo South. I took it as an expression of confidence that his views would commend themselves to the government, when the time came-and that is all.


Richard Burpee Hanson: He said he knew it was going to be done.


James Lorimer Ilsley: I think I have said what he meant.


Gerald Grattan McGeer: What did I say I knew was going to be done?


James Lorimer Ilsley: The hon. member for Vancouver-Burrard has just now entered the chamber, so that perhaps I might be permitted

Supply-Finance
to say what has occurred. The hon. member for Waterloo South has asked me if the statement of the hon. member for Vancouver-Burrard to the effect that the Bank Act would be revised and that the Bank of Canada, which is now a bankers' bank, would become a people's bank, was a statement of government policy, and if it was made on behalf of the government, or whether it had no authority. I have replied by saying that it was made by the hon. member -for Vancouver-Burrard on his own behalf, and not on behalf of the government, and that I did not take his statement as meaning anything other than that he had confidence that his views would commend themselves at the proper time to those in authority.


Gerald Grattan McGeer: I am very hopeful.


Richard Burpee Hanson: That is
what you call pressure politics.


James Lorimer Ilsley: No; I did not take it that
way at all. As a matter of fact, while my views and those of the government on matters of finance are very different from those of the hon. member for Vancouver-Burrard, I have appreciated his attitude during the war. With his considerable ability as a parliamentary speaker, if he were to attack and had continued vigorously to attack the policy of the government, it would have been embarrassing and prejudicial in the conduct of our loan campaigns, and the carrying out of our policies of taxation. While he has these views he has shown a great measure of restraint in the tone of his address to-day. It was simply the tone which one would use with a view to keeping one's position on record, in the hope that at the proper time it might be favourably considered.
As I have said, I differ from him. I do not think the printing of money is the proper way in which to finance a war. To-day the hon. member advocated that the mint should be turned to that purpose. If we wish to print money we have another mint in which we could do it, namely, the Bank of Canada. The borrowing of money from the Bank of Canada has exactly the same effect as the printing of it at the Royal Canadian Mint. The mint does not print money; it makes coins.


Gerald Grattan McGeer: I was talking about the physical part of it. The bank note company is the private corporation making notes.


James Lorimer Ilsley: There is nothing new either in the hon. member's position or in mine, and I do not desire to revive old controversies, or to enter into old discussions. For the purposes of the record perhaps I should reiterate my position, that I think it is highly undesirable
to finance a war, or indeed anything else, by the heavy printing of government money, either by borrowing from the Bank of Canada or by direct printing operations. And while the drawback of the system we follow is that it results in the creation of a heavy internal debt, it is my belief that that is by far the lesser of the two evils.
I do not like of course to see the debt of this country piling up. But I do feel it can go a great deal further without seriously interfering with our ability to service it. I say that because the interest rate is coming down steadily. It is now about 2-6 per cent, or around 2J per cent; and the addition of very considerable sums to our debt do not increase1 interest charges very much. When one compares the interest charges with the total amount we have to raise, although we could not say they are a drop in the bucket, yet we can say they are very, very small indeed. It i my belief that the system we are following is considerably the better of the two. If we were to follow the other system I do not know how we could prevent the tremendous volume of money which would be in existence in the country from creating an uncontrollable price rise, a runaway inflation.
The hon. member was good enough to say that we had proved that we could control inflation. I wish I was just as sure as he is that we can, over a long period of time. We-have a bitter fight every day in our efforts-to do so. And we could not, if we did not tax. as severely as we do, and go to such tremen- ' dous lengths to siphon back the purchasing power of the people by borrowing from them.
If we did not do that we could not begin to make our price ceiling stick at all.
In other words, we have to borrow large sums from the people, and we must pay them interest in order to induce them to save. That is why we have to pile up interest charges. We are not doing it for fun. We are not doing it because we like doing it, but because we are engaged in a terrible war. Some of the things we have to do would not be done in s perfectly planned utopia, under ideal conditions. I do not wish to enter into the discussion at greater length. The hon. member for Vancouver-Burrard has been considerate1 and moderate in what he has said this afternoon, and I am trying to be the same.
In our fourth victory loan we are going to ask the people of Canada for a very large sum of money. I do not want them to think that we do not know what we are doing, or that we are off on the wrong foot, and that the whole thing is needless or unnecessary. The method we are following is the one followed in Great Britain, in the United States, and in other
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British dominions and, in my view, it is the better one. That is all I can say on the point.


Mr. MacINNIS:: Do all civil servants or all government employees under a certain salary range receive the cost-of-living bonus?


James Lorimer Ilsley: All public servants-what we call civil servants-receive the cost-of-living bonus if they are in receipt of less than $2,100 a year, or $175 a month. I cannot think of any exceptions.
(Mr. MacINNIS: An exception was brought ;to my attention, in connection with the employees in the office of the custodian of enemy property in Vancouver. It was pointed out to me that they are not receiving the cost-of-living bonus. While I have not had an opportunity of verifying my information, I should like the minister to look into it. I see no reason why these government employees should not be placed on the same basis as others.


Richard Burpee Hanson: I should
like to give the details of the case of a wife of a civil servant who in order to help out in the effort went into the service. She gets only $50 a month as a grade one civil servant. I have given the details of this case to the chairman of the civil service commission. She went in as a grade one stenographer and .has lately been transferred to a branch in matronal defence where she is in charge of six operators of machines. She is quite .capable and was to get an increase in her grade, but she was told that she would have to wait until after six months. That time has expired and she has not received her increase, the theory being that there is a new ruling, either already in effect or to be put into effect, that no increases can be granted until she has been there a year. I believe there are cases where the cost of living bonus has not been paid. The whole thing is in the hands of the treasury board and I shall not pursue it any further.
Another matter was brought to my attention recently which will come up under item 1$'2, "Annuities Act-further amount required, $3,500." I will put the facts of this matter on the record so that the minister and the Minister of Labour may be able to answer to-morrow. I do not expect an answer today. It has been reported that the annuities branch is to be taken from the Department of Labour, which has handled it for over twenty years, and passed over to the Department of Finance. My recollection is that the annuities branch was formerly under the Post Office Department, but was passed over to . the Department of Labour about twenty years ; {Mr. Ilsley.]
ago because it was considered that the latter department was more interested in the social security programme than was the Post Office Department:
Since 1908, when the annuities system was first established and put into operation, fathered I believe by Sir Richard Cartwright, approximately $200,000,000 have been raised at a cost of one and a fraction per cent, apart from interest on the funds. Last year the annuities branch did $20,000,000 worth of business. With due respect to the hon. member for Vancouver-Burrard (Mr. McGreer), these annuities have been looked upon as the small people's savings bank. If sufficient support is continued to be given by the government, it is estimated that the annual income might be raised to $100,000,000. We are talking about social security, but if this branch is to be scrapped as has been suggested-


James Lorimer Ilsley: Who suggested it?


Richard Burpee Hanson: Before I am through I intend to ask the minister if it is to be scrapped.


James Lorimer Ilsley: Has anyone suggested that it was to be scrapped?


Richard Burpee Hanson: That is the report, that it is being transferred to the Department of Finance.


James Lorimer Ilsley: To be scrapped?


Richard Burpee Hanson: And at a later stage, may be scrapped. I suggest to the minister that there should be some undertaking given, not only that the branch will be carried on but that it will be extended. This constitutes a fine economy in the lives of many people; it represents a great saving and it ought to be protected. There may be good reasons why the branch should be transferred to the Department of Finance, but as yet I am not aware of them. It has been suggested to me further that there is in contemplation a reduction of the four per cent interest on annuities to three per cent, which will make it practically impossible for annuities to be sold to the people of Canada who have available to them war savings certificates and bonds which may be cashed at will. I wonder if the insurance companies have made any representations to the minister and the department.


James Lorimer Ilsley: Apparently somebody has given the hon. gentleman some material from which he is reading-


Richard Burpee Hanson: I have a memorandum.


James Lorimer Ilsley: -in order to stop something they fear. Why does the hon. gentleman say

Right Hon. Anthony Eden
that it will be impossible to sell annuities to the people of Canada if the rate is three per cent? I do not know of any plan to reduce the rate to three per cent, but I should like to know why the hon. gentleman is interjecting a highly tendentious statement into his memorandum, or perhaps somebody has done it for him.


Richard Burpee Hanson: If the rate is reduced from four to three per cent you will not sell any annuities because the people can put their money into war bonds which will be more readily available for resale. That is the theory I have in mind. Then there is no tax on war certificates. I should like to have an undertaking from the minister, first, that there is no contemplated transfer of this branch to the Department of Finance, or, if so, that he give us the reason why it is being done; second, that there is no intention on the part of the government to scrap this system of savings-one of my regrets is that I did not avail myself of it years ago-third, that there will be no tinkering with this matter in the interests of the insurance companies, because we all know that the insurance companies cannot handle these annuities as cheaply as can the government. That is what I say, and perhaps the minister will give some attention to it.


James Lorimer Ilsley: The hon. gentleman has said quite a lot; he has been making statements in the form of questions.


Richard Burpee Hanson: Interrogatories.


James Lorimer Ilsley: I am not in position to make any statement on that. I am under the impression that some consideration has been given to the terms of annuity contracts and the department by which they should be administered. When the decision is arrived at, it will be announced. Before that is done, I cannot make any statement about it.


Richard Burpee Hanson: Can the minister say that the system of government annuities is to be maintained? Such a statement will be reassuring to many people.


James Lorimer Ilsley: That is like asking me whether the Department of Finance is to be maintained. I do not know of any plan, nor have I heard of any suggestion that the sale of government annuities is to be abandoned.


Richard Burpee Hanson: Then the minister has something to learn.
Item stands.
Progress reported.


[Stage Direction]
At six o'clock the house adjourned, without question put, pursuant to standing order.
Thursday, April 1, 1943