1944-03-10

[Stage Direction]
Mr. J. J. McCANN (Renfrew South) presented the first report of the special committee on radio broadcasting, and moved that the report be concurred in.
Motion agreed to.


Hon. J. G. GARDINER (Minister of Agriculture) :: Some days ago the hon. member
for Fraser Valley (Mr. Cruickshank) asked me
Privilege-Mr. Mackenzie King

to state at the earliest possible moment the subsidies paid on tomatoes, com, peas and beans. The subsidies for this year will be as follows:
Per ton
Tomatoes	
$0	00Corn	
4	00Peas (shelled weight)	
10	00Peas (straw weight)	
2	00Green or waxed beans	
V	50
Those are the same subsidies as were paid last year, with the exception of -tomatoes, where it has been increased $3 per ton-.


Mr. CRUICKSHANK:: Following the answers given by the Minister of Agriculture I would like to ask, first, is there any demand this year for an extra supply of beans, corn and peas for Great Britain, and, second, is it the opinion of the government that there are sufficient food supplies on hand to meet the coming invasion ,and other demands?


Some hon. MEMBERS:: Order.



PRIVILEGE-MR. MACKENZIE KING ST. LAWRENCE SUGAR REFINING COMPANY- REFERENCE TO STATEMENT OF MR. BLACKMORE

[Stage Direction]
On the orders of the day:
Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, I rise to a question of privilege. This is a question of privilege which goes far beyond any personal consideration and which in my opinion is a matter of the privileges of parliament itself. Speaking in this house on Tuesday night last the hon. member for Lethbridge, the leader of the Social Credit group (Mr. Blackmore), made a statement, the general effect of which was that the government in dealing with the war time supply of sugar had taken a course which was detrimental to the public interest and this because of some "relationship existing, between the government" and an alleged "great sugar combine" and between "the government" and what he termed "the head of this corporation, one John W. McConnell." The statement to which I refer will be found in Hansard of Tuesday, March 7, at page 1278 and is as follows:
I believe that quantity and price have been affected, not so much by the circumstances of war, as by the fact that prior to the war and also during the war the production and sale of sugar have been manipulated by a sugar trust or combine, and that one of the dominating units in this trust has been the St. Lawrence Sugar Refining Company.
fMr. Gardiner.]
And again:
I suppose hon. members would be surprised to know that since the war broke out, men came into this city and went to see responsible officials in the dominion government and offered to bring into Canada three sugar factories, and they were refused the concessions which they needed in order to give them a chance to establish sugar factories to produce sugar in this country. The men in charge of the government chose rather to let the Canadian people go short than risk an abundance of sugar-an abundance which they dreaded.
Then elsewhere:
I am going to ask questions which I believe ought to be answered. What is the relationship existing between the government and this great sugar combine, and between the government and the head of this corporation, one John W. McConnell? Why has the government condoned this manipulation in the sugar industry? It would allay considerable suspicion in this house and throughout the country if the Prime Minister (Mr. Mackenzie King) would rise and categorically state that the Liberal party has never received, directly or indirectly, from the St. Lawrence Sugar Refining Company, from J. W. McConnell, or from anyone representing either or both of these, or any other Canadian sugar interest any contribution of money for the campaign funds of the Liberal party.
I resent very strongly the insinuations and implications which these words carry with them and which, broadly construed, are a reflection upon all political parties, and upon all governments. They are equivalent to saying that because contributions are made to campaign funds of political parties, the government that may be in office or returned to office is, because of contributions made to the campaign fund of the party to which its members belong, to be regarded as unworthy of holding a public trust, and the ministers of the crown as violating the oaths by which they are sworn to office. Such an insinuation is a reflection upon the honour and the integrity of every member of this house, and upon no one does it reflect more immediately than upon the hon. member who has thus disclosed with what judgment he judges the political conduct of others.
Except in the inferences which the hon. member seeks to have drawn from it, this question of campaign funds is not pertinent. What is pertinent, and what, as I have said, I resent very deeply, and so far as the Liberal party is concerned, deny most emphatically is the suggestion that the present government of Canada or any member of it would betray its trust at the instigation of any corporation, any special interest, or any individual. I believe the representatives of all other

Privilege-Mr. Mackenzie King
parties in this house should, and on reflection will, equally resent and repudiate suggestions of this character. It is irresponsible and unwarranted utterances such as these, both inside and outside the house, which tend to destroy the faith of the people alike in government and parliament, and this at a time when faith in democratic institutions was never more needed than to-day.
What are the facts about sugar? They will show that the hon. member for Lethbridge was as wrong in his alleged facts as he was in his innuendoes. As hon. members know, at the very beginning of the war the government acted promptly and drastically to control the distribution and price of sugar, a control which has operated so effectively that available supplies have been fairly distributed and the price kept at a level about one-third of what it was at a comparable period in the last war. If, as alleged, the government had wished to assist the sugar refiners, all it had to do was to stay its hand, and allow those interests to reap the benefits of the enhanced prices which would inevitably have followed.
And what in fact has been the attitude of Mr. John W. McConnell? As long ago as April 10, 1939, I received the following letter from Mr. McConnell:
St. Lawrence Sugar Refineries Limited Dominion Express Building
Montreal, 10th April, 1939.
Personal.
Rt. Hon. W. L. Mackenzie King,
Prime Minister of Canada,
Ottawa, Ont.
Dear Mr. King:
In the event of war-which heaven forbid- Canadian industry must cooperate to the limit with the government, particularly where essential food supplies are involved.
Having this in mind, I wish now to assure you that the plant of the St. Lawrence Sugar Refineries will be placed unreservedly at the disposal of the government.
With kindest regards,
Yours sincerely,
J. W. McConnell,
President.
My reply to Mr. McConnell reads as follows:
Office of the Prime Minister Canada
Ottawa, April 14, 1939.
Personal.
J. W. McConnell, Esq.,
President,
St. Lawrence Sugar Refineries, Ltd.,
Dominion Express Building,
Montreal, Que.
Dear Mr. McConnell:
I wish to acknowledge and thank you for your personal letter to me of April the 10th, in which you state that in the event of war the plant of
the St. Lawrence Sugar Refineries will be placed unreservedly at the disposal of the government.
I also wish to express my appreciation of the spirit which prompted you to give this assurance. While we all trust that such a tragic event may not come to pass, it is encouraging to the government to have, in these uncertain days, such a prompt evidence of willingness to cooperate, should the need arise.
With kind regards,
Yours very sincerely,
W. L. Mackenzie King.
When subsequently war broke out and it became apparent that sugar prices might rise suddenly, Mr. McConnell's patriotic offer to turn over to the government the sugar corporation in wl'.ieh he had an interest was not accepted only because the control arrangements promptly instituted by the government served an equal purpose without disturbing efficient management.
At a very critical stage of the early months of the war, Mr. McConnell's firm, in common with sugar refineries elsewhere in Canada, cooperated fully with the government in supplying an abnormal war demand for sugar. This cooperation placed very heavy extra demands upon both plant and shipping facilities. It was carried out without any financial benefit beyond the payment of pre-war prices for the sugar involved. Since the office of sugar controller was established in October, 1939, the St. Lawrence Sugar Refineries have been subject to the regulations as to prices and materials which apply to all sugar refineries. The industry as a whole has given loyal cooperation to the government throughout the war, and it is to be regretted that any attempt should have been made from this house to create a contrary impression.
In the ways I have mentioned and in numerous other ways, Mr. McConnell, time and again, has demonstrated his whole-hearted devotion to Canada's war effort. In my opinion his readiness to place the interests of Canada ahead of his own business interests has not been surpassed by any citizen.
I notice also on page 1278 of Hansard that after an interjection by the hon. member for Weyburn, the hon. member for Letbridge said that he would be equally relieved to receive an absolute assurance from myself that Canada Packers had made no contribution to the Liberal party's campaign funds. All that I have said as to the insinuations, implications and innuendoes of the hon. member's reference to Mr. McConnell and the sugar refineries applies with equal emphasis to this part of the hon. member's remarks.


Mr. BLACKMORE:: Mr. Speaker, I have only this to say. The sugar question is not finished with yet in this session of parliament.
Aluminum



GRANBY MINING CORPORATION

William Lyon Mackenzie King: Mr. Speaker, the hon. member for Rosetown-Biggar (Mr. Coldwell), suggested yesterday that during a debate "in this house in April, 1940" the government admitted approving the Granby exports, and it was on that that he based his statement of May 20, 1940. I might say to my hon. friend that the house was not sitting in April, 1940. The session opened on May 16, only four days before the hon. member's statement. There was at no time any admission of government approval of the contract between the Canadian and Japanese companies. The only approval that enters into the question is that which might be implied in the issuance of export permits. I find that permits were required for the export of metals from Canada to any destination as from September 20, 1939. Their issuance, in so far as the Granby case is concerned, ceased on October 8, 1940. This was fourteen months before the war with Japan.
I might add that among the documents tabled on the Granby Mining Corporation there is a letter dated September 4, 1940, from myself to the President of the Canadian Legion, British Empire Service League, which explains in detail the export control policy of the government.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. CLARENCE GILLIS (Cape Breton South):: Mr. Speaker, may I be permitted to address a question to the Minister of Munitions and Supply? It arises out of a telegram received from the secretary-treasurer of the mine workers' union in Nova Scotia setting out that the employees of the Indian Cove Coal Company have been idle for the past week. My information is that this company's output is largely taken by the Canadian National Railways. Can the minister explain to the house why this mine should be idle at the present time?


Hon. C. D. HOWE (Minister of Munitions and Supply):: Mr. Speaker, my hon. friend gave me notice of this question, and I have the information. I am told by the coal controller that there is no slow-down at the Indian Cove Coal mine for lack of railway orders, but rather that it arises from the difficulty of obtaining railway cars. Apparently there has been a bad blizzard in that district, and the railway company has not been able to move any equipment.



ALUMINUM


[Stage Direction]
On the orders of the day :
Clarence Decatur Howe: In reply to a question asked yesterday on the orders of the day by the leader of the opposition (Mr. Graydon) I promised to give the house a copy of a communication received from the Aluminum Company of Canada, Limited, with reference to a reduction in the price of aluminum ingot affecting deliveries under the contract with the Metal Reserve Corporation of the United States, and deliveries under the contract with the government of the United Kingdom.
I now produce a copy of a telegram received under date of November 1, 1943, from Mr. R. E. Powell, president of the Aluminum Company of Canada, Limited, in which advice is given of these reductions; also copy of a letter received in reply to that telegram, and a letter received under date of January 15, 1944, from Mr. P. S. White, assistant to the president of the Aluminum Company of Canada, Limited, in which advice is given that amendments of the contract price in the contract with the government of the United Kingdom will also apply to the contract with the government of the Commonwealth of Australia.
These reductions were made possible by the fact that the main construction programme is finally complete, and the company is now in a position to operate at maximum capacity.
(Telegram and letters follow):
Montreal, Que., Nov. 1. 1943
Hon. C. D. Howe,
Minister of Munitions and Supply,
Parliament Buildings, Ottawa.
Effective to-day all shipments crude aluminum to Metals Reserve Company will be billed at fifteen cents per pound U.S. currency instead of eighty per cent at fifteen cents and twenty per cent at seventeen cents. Also effective to-day all shipments of crude aluminum to the United Kingdom will be billed at fifteen and one-half cents Canadian currency instead of sixteen cents. Foregoing refers to base prices.
R. E. Powell.
November 2, 1943
Dear Mr. Powell,
I have your wire of November 1 as follows: "Effective to-day all shipments crude aluminum to Metals Reserve Company will be billed at fifteen cents per pound U.S. currency instead of eighty per cent at fifteen cents and twenty per cent at seventeen cents. Also effective to-day all shipments of crude aluminum to the United Kingdom will be billed at fifteen and one-half cents Canadian currency instead of sixteen cents. Foregoing refers to base prices."

Social Security
Although your wire does not mention a reduction in price to Australia I assume that metal to Australia will be billed at fifteen and one-half cents, Canadian currency, also. Please advise me about this.
This voluntary reduction in base price on British and (I hope) Australian contracts is greatly appreciated by myself as agent for these two governments. I am cabling the British government to-day, and I am sure that the news will be well received.
Please permit me to express the appreciation of the Canadian government for the spirit with which transactions in which we are interested have been carried out on the part of your company.
Yours sincerely,
C.	D. Howe.
R. E. Powell, Esq.,
President,
Aluminum Company of Canada, Limited, Montreal, Que.
Aluminum Company of Canada, Limited 1700 Sun Life Building, Montreal,
15th January, 1944.
Hon. C. D. Howe,
Minister of Munitions and Supply,
Department of Munitions and Supply,
No. 1 Building,
Ottawa, Canada.
Dear Mr. Howe:-
In our letter of 3rd November 1943 we advised you that, as soon as some administrative details were settled, we would give effect to the reductions in base price in our metal contract with Australia corresponding to the reductions given to the United Kingdom.
We can now advise you that an amendment to our contract with the government of the Commonwealth of Australia, dated 24th July 1941, is being submitted to your department. The amendment extends to the Australians the price reductions given to the British in 1943, that is, the Australian base price will be 17 cents Canadian per pound from 1st January to 31st October 1943 and 16i cents Canadian per pound from 1st November 1943 until 31st December 1944 or until the 183rd day after the cessation of hostilities between Australia and Germany, whichever shall be the later.
Yours very truly,
Aluminum Company of Canada, Ltd. Paul S. White, Assistant to the President.



INCOME TAX


[Stage Direction]
On the orders of the day:
Mr. G. K. FRASER (Peterborough West):: Mr. Speaker, I should like to ask a question of the Minister of National Revenue. Yesterday's issue of the Montreal Star had this to say:
The national war finance committee in charge of the sixth victory loan campaign next month is most prominent among many who have made representations to the government-


Some hon. MEMBERS:: Order.


Gordon Knapman Fraser: Then my question is this: is the final date of payment and the filing of returns for the 1943 inbome tax to be April 30, 1944, or will extra time be given for taxpayers to file their returns?


Hon. C. W. G. GIBSON (Minister of National Revenue):: The final date for filing returns is set out in the statute. For individuals it is April 30, 1944, and no extension is contemplated.



PRICES AND TRADE BOARD


[Stage Direction]
On the orders of the day:
Mr. GORDON GRAYDON (Leader of the Opposition):: Mr. Speaker, I should like to
ask a question of the Minister of Finance, and at the same time to extend to him a welcome back to the house. Perhaps the minister will not be in a position to answer my question to-day, because I had not an opportunity to give him notice of it. I should like him, if he would, to give consideration to a matter which involves a veteran of this war, Mr. John Foster, of Oakville, Ontario, who up to the present time has been denied the opportunity of getting a licence from the wartime prices and trade board for the operation of a business in that town.


Some hon. MEMBERS:: Order.


Gordon Graydon: I am asking the minister to give this matter his consideration, in view of the fact that it has become a public issue in the press of to-day.


Hon. J. L. ILSLEY (Minister of Finance):: I shall look into the case, ascertain the facts, and inform my hon. friend of the considerations involved.


Mr. ROEBUCK:: I have ten cases I should like to ask the minister to look into.



SOCIAL SECURITY


[Stage Direction]
On the orders of the day:
Mr. MAXIME RAYMOND (Beauharnois-Laprairie):: Mr. Speaker, at the last session
the special committee on social security made
Industrial Development Bank

a report to the house in which there were several recommendations, one of which read as follows:
That the government review the existing regulations governing old age pensions, pensions for the blind, and war veterans' allowances, and consider the advisability of adjusting the eligibility age to a lower level and of increasing the amount of pension.
Is it the intention of the government to give effect to this recommendation?



INDUSTRIAL DEVELOPMENT BANK


[Stage Direction]
The house resumed from Tuesday, March 7, consideration of the motion of the Minister of Finance for the second reading of Bill No. 7, to incorporate the industrial development bank.
Mr. J. G. DIEFENBAKER (Lake Centre):: 
Clarence Decatur Howe: Talk to the Minister of Finance; it is his bill.


John George Diefenbaker: -and in respect to which members have the right to have his hearing. This matter deals with his department and he might very well endeavour to follow the suggestions offered by the party in opposition.


Clarence Decatur Howe: The few remarks of the hon. gentleman at the outset were so wholly fictitious that I did not think it worth while listening to the rest. He said that small industries had been discriminated against. I am prepared to give statistics to show that small industries have been made into big industries, and therefore there are no longer any small industries.


John George Diefenbaker: There have been occasions in the past when the minister has made a similar comment upon statements I have made but which turned out to be correct. The statistics I am about to quote do not come from the Department of Munitions and Supply; they were issued by the Dominion Bureau of Statistics.
Having indicated in general the situation in this regard, I wish now to deal in detail with the matter. So far as the minister's department is concerned, the attitude since the beginning of the war has been to neglect smaller industries, even though they could have contributed to the war effort, and to give orders in the main to the greater industries. If this bill represents a changed attitude in that regard, all I have to say is that with the approach of an election the government now wishes to place itself in the position of being able to say to the small industries:

Industrial Development Bank
We will now give you the chance which thus far has not been given to you during this period of war.
I realize that the difficulties of the transition period between war and peace will be greater than those of the transition period between peace and war. I commend to the membership of the house one of the finest reports that has been issued on the subject of peace and war and the adjustment policy in the United States. I refer to the report by Bernard M. Baruch and John M. Hancock, which deals, among other matters with postwar adjustments and with the question of financing small corporations. I quote:
It is an easier task to convert from peace to war than from war to peace. With the coming of war a sort of totalitarianism is asserted. The government tells each business what it is to contribute to the war programme -just what it has to make and where it is to get the stuff out of which to make it. Patriotism exercises a strong compulsion. With peace, the opposite becomes true. Each has the right to make what he pleases. Governmental direction and aid disappear. The markets become free and each individual is dependent upon his vision, his courage, his resourcefulness and his energy. Everyone has the privilege of building up, but no one has the right to pull down.
To return to the point I was making a little while ago; I had pointed out that the trend to which I referred, that of disregarding small industry, is clearly evidenced by the figures which I have from the Bureau of Statistics. They show that in 1940 the production of companies, 15,478 in number, producing under 825,000, was $138,000,000, in round figures; between $25,000 and $50,000 the production of 2,954 companies was $104.000,000. Taking the great corporations, which the minister said did not receive a preference, I find that there were 677 corporations in Canada producing between $5,000,000 and $10,000,000, and producing over $5,000,000 there were 123 corporations. In 1943 the trend towards the great corporations had been accentuated. In 1941, while the companies producing under $25,000 per annum sold a total of $121,000,000 worth, those between $25,000 and $50,000 sold $116,000,000 worth, the companies producing between $1,000,000 and $5,000,000 sold $1,755,000,000 worth, and those over $5,000,000, 198 in number, sold $2,459,000,000 worth.
This has been the trend throughout Canada, and the bill now before the house will not stop it. The small entrepreneur in Canada has been at the mercy of the various boards set up by government. The proposed legislation will not be of particular benefit to the small business man, or enable the returned
soldier to establish himself in business, unless the type of business in which he may engage is widened.
As the bill now provides, the only businesses that can be assisted are manufacturing concerns, or enterprises engaged in processing, power development, and the like. The statement to which I have referred, giving the viewpoint of the United States and the recommendation with regard to small business, is of particular application to Canada. It states that small business is:
The broad backbone of enterprise, that as production controls are relaxed particular care should be taken to protect the competitive positions of small business as far as practicable within the needs of the war. Cancellations of war contracts can be guided to permit the earliest releasing of small concerns which can convert back to peace-time production; also certain nuisance production controls involving only a limited amount of resources which press heavily on small concerns can be relaxed sooner than broader production controls.
The Baruch report, which is of profound interest to Canada, has recommended that so far as small industiy is concerned, restricted and curtailed as it has been during the war in the switch from war-time to peace-time reduction, cash should be available to renovate plants and to tide over existing companies to permit other businesses to do things by which civilian goods can be produced. Under this bill loans can be made only to corporations engaged in manufacturing, and to power companies. It does not cover many other small concerns to which soldiers returning to the country will wish to devote themselves. Agriculture is not included. Agriculture, we are told, will be included in a subsequent bill,,, but as it stands to-day, the hope that this bill will to any great extent contribute to the establishment of businesses by returning soldiers is unjustified.
The recommendations in the United States are that so far as war production is concerned the lending authorities should be restricted t.o the Smaller War Plants Corporation. For permanent risks which the banks cannot assume, the federal banking system should be given authority to make industrial loans.
One other matter that I think should be considered by the government at this time is the whole question of taxation. No one objects to taxation in time of war. No one resists the veiy high taxes which we have for corporations, for individuals and for all; but when peace comes, in order to build up industrial development, those who intend to engage in industry should have some indication now from the government as to the policy it intends to adopt in the transition period.
Industrial Development Bank

In the United States the Baruch report states that taxes have not been too high for war time; if anything they have been too low. That is admitted, but it is pointed out two of the first problems that must be faced in the period of transition to peace is the encouragement of new industry and the determent of monopoly, both of which can be effectuated by the removal of excessively high taxes. It recommends that the government of the United States should indicate now the nature of its taxation plans; for unless taxation is to be reduced in a measure when the war is over, the returning soldier desiring to enter small enterprise will find himself unable to pay off any loans he may have negotiated; in the words of the report, "he will be chained like a galley slave to a loan he can never repay." Our whole tax system should be part and parcel of the picture of rehabilitation after the war. We have heard nothing at all about the plans of the government. There are wrongs in the present taxation system, and one of them is this: it allows officials in the tax department a discretionary power which is contrary to the principles of parliamentary government. We had an example yesterday of how a board acts toward the representatives of the people. Yesterday the hon. member for Lambton-Kent (Mr. MacKenzie) asked a question, as reported at page 1297 of Hansard, with regard to the present remuneration of certain individuals in the employ of the Canadian Broadcasting Corporation. The answer given by the minister was:
This information has not been made public in the past, as it was not deemed in the public interest to do so.
This shows the attitude of some boards and some controllers. It shows a' disregard of the rights of parliament. Would an answer to this question with regard to salaries hurt the war effort? Could there be anything in it that would be beneficial to the enemy? Time and time again we are told in this house that we cannot get information because the government or the board set up by the government takes refuge behind the statement: "It is not in the public interest."
The time has come when there should be a declaration of policy on the part of the government with regard to small businesses. We do not know what the post-war picture will be. We do not know what the plans of the government are. They give them to us haphazardly, in piecemeal and indefinite fashion. They place before the house a bill with regard to loans, but do they give us the picture? Do they say what they are going to do to assist small industry to reconvert after the war? According to the Baruch report in the United 
States the first consideration of the government should be the early release of small industrial plants from war production in order to encourage small industry. That recommendation applies particularly to industries that can be readily converted, and where there are cancellations of industrial production, smaller enterprises should be permitted to return to production first. There is not an hon. member in this house who has any conception of what the plan is of the minister. If he has a plan, so far it has not been placed before the people.
During the past four years the prairie provinces, and to a lesser degree the maritime provinces, have been discriminated against or deliberately ignored in the development of war industry. There has been a tremendous exodus of people from the western provinces, many of whom will desire to return. This proposed legislation, if it is to be effective, must be made effective now. It must be more than a scheme to da-ngle before the eyes of those who desire to go into industry. It must have teeth in it. When I see the situation in the three western provinces, the failure of the government to develop industry there during war time as it should have been developed, I fear for the future in the post-war period with respect to the use to which moneys will be placed by this corporation. My own province of Saskatchewan produces twelve million bushels of flax. The sunflower seed crop is nine million pounds. The oilcake derived therefrom is required for our stock by our dairy men. AVhile our province produces fifty per cent of the flax crop in the prairie provinces, and requires this cake for protein supplement, the production has gone ahead in other provinces and the live stock producers in Saskatchewan have to pay top prices.
The hon. member for Moose Jaw (Mr. Ross) has been particularly advanced in his ideas in this regard and has pressed his ideas on the government. There are hon. members on both sides of the house who have done the same thing, but for some reason the western provinces have not received consideration in the matter of war development and war plants. Two plants have been set up in the last two years in the east to process oilseed, one in Hamilton and the other in Toronto. I should like to ask the minister under whose control this matter comes while the war is on. What is the government going to do to assure that a fair portion of the moneys available for small enterprise under this measure will be available in the maritime provinces and in the prairie provinces?
If Canadian economy is to be built up on the basis of Canadian unity, an effort must be made now to bring about decentralization of

Industrial Development Bank
industry. True, some of our western provinces have not the same facilities, but each province should, according to availability of raw products, be given an opportunity to build up a diversification in industry. That is of the essence of the rebuilding planned in the United States. The national resources planning board in the United States have been viewing the situation that confronts the people there, and their report sets out the whole position in a very few words. I quote:
One of the aims of post-war conversion should be to achieve a better regional distribution of manufacturing activity. The desifabfi'ty greater industrial decentralization has long been apparent. There is considerable room for such decentralization despite the opposing advantages of regional specialization. Manufacturing activity could bring to agricultural regions a higher income, and a more balanced and diversified economy. In many instances, decentralization would reduce cross-hauling of raw materials and manufactured goods, and thereby considerably reduce distribution costs. In addition to such economic and social gains, there would be important advantages for our future national defence.
Before this bill goes to the committee the government should give us a picture of what it intends to do with reference to the decentralization of industry in this country. We are trying to assure ourselves now that there shall not be unemployment after the war. Pious expressions of hope without action will be ineffectual. The transition to peace will be difficult-more difficult, as I have already said, than was the transition from peace to war. I hope this legislation works. It can be made to work, but not, as I see it, on the basis of the generalities set forth in the bill as presented.
This type of legislation is a novelty in Canada, though it is not new in the United States. Just because it is new some people may oppose it. I have always believed that political parties, no less than individuals, must not worship the past; their membership must not suffer from neophobia, the fear of new things. Everything must be tested, not on the basis of its tradition or its novelty but on the basis of whether or not it will be workable. To that end I suggest, in order to assure that little enterprises across Canada shall receive consideration, that certain steps should be taken in connection with this measure.
In the first place we must assure that the small amount which is to be available, $75,000,000 to $100,000,000, is not distributed in large amounts to a few great corporations, thereby rendering small enterprises unable to obtain their fair share. If this legislation is designed in the main to support the small enterprise, then I suggest that some sort of
limitation or restriction should be imposed upon the amount that may be lent by this organization, as was suggested the other evening in the able speech of the hon. member for Queens-Lunenburg (Mr. Kinley). In the second place, to guard against any suggestion of political interference in connection with the various branches which are to be set up, loans should not be made without the approval of the central board of directors.
There should be some further restrictions. We are actually giving a number of individuals carte blanche to expend money, and this bill does not contain any provision limiting the powers of the board so far as loans are concerned. Private banks are limited; trust companies are limited. They lend the money of their shareholders. Is there any reason why similar limitations and controls should not be imposed upon the lending powers of a government institution? Otherwise, as I say, parliament will be giving this organization a blank cheque for the disbursement of the people's money.
I come now to the next and larger phase, that having to do with the war effort and rehabilitation scheme as a whole. As I see it, this bill brings into focus and sharp relief the whole question of the shift after the war to peace-time production. It is designed to make the road of reconversion easier. But what is the plan of the government? No one has ever heard it. We get it piecemeal; we get one act now and another act again. The time has come when this country should have placed before it the master plan which the government no doubt has and which will deal with such important matters as the unwinding of the war machine, the disposal of government owned or financed war plants, the cancellation of war contracts, and the allotment now to various industries of the production of civilian goods.
With reference to these matters this house and the country know little. In the United States a plan already is being evolved and placed before congress. Contract termination is the first step. The time has come, I believe, when the membership of this house and the country should be informed as to what production is to be cancelled this year, what industries are to be closed out, and what is to be done with such industries. In the United States, according to reliable information, the producers of ammunition, small arms, tanks and tank parts, as well as other munitions of war, have achieved such production as to necessitate the cancellation of any further orders. In that country a uniform cancellation clause has been established. If that has
Industrial Development Bank

been done in Canada, no one knows about it. The war assets corporation has been set up, another of the corporations independent of parliament. I have no objection to the setting up of corporations when they are to carry out the plans and decisions of the representatives of the people, but I believe we in this house have a right to full discussion of this subject, to have placed before us the government point of view with respect to rehabilitation in industry after the war, to the end that hon. members may be permitted to discharge their responsibility of placing before the government and the country the views of a large portion of our people.
I have been asked, where is the plan? This bill is not the plan; it is just one segment of the entire picture. We as members of this house, business people, those engaged in small enterprises, the men overseas who intend to return and establish small industries-all have a right to know the plan of the government. It may not be complete in detail, but it can be a comprehensive plan the details of which may be filled in subsequently. I repeat, what is being done in Canada? Is there a uniform cancellation system? Has a body been set up similar to the body in the United States, where some two hundred government contract officers are studying the whole question and will later go throughout the country advising industry as to how production may be reduced in one line and increased in others? I ask, does the government intend now to stop the freezing of small industries so far as the men returning from overseas are concerned? Those men are coming back now in small numbers. May they establish themselves in industry? May they open country stores? May they go into the types of business they followed before the war? Oh, no. That privilege should be guaranteed to them. They should be given permission by parliament; the wartime prices and trade board should immediately relax the freezing order in relation to the establishment of industries as applied to the ex-service men.
When there is a lessening in any branch of war production, I should like to know if the government has decided what civilian commodities will be produced and what businesses are to be taken out from the freezing order, in order that employment may be maintained. Has the government a plan as to what civilian production will come first? What of the surplus of army goods, the stocks of food on hand to-day, and so on? All these are parts of the whole picture, without which none of us can intelligently discuss the post-war problem as affecting industry, or the question of advancing money to assist industry. When the 
transition period comes and we return to the production of civilian goods, new machinery will be required, repairs will be needed, plant alterations will be necessary, and so on. Is it not about time the Minister of Munitions and Supply and those associated with him, and the Minister of Finance, advised the country whether in the reestablishment of these business enterprises such expenditures will be deducted in arriving at net income for taxation purposes?
There are other phases of this matter that could be dealt with, but they can be covered when we are taking up the different sections of the bill. I ask the minister or his parliamentary assistant to place before this house and the country something of the picture, something of the plan. Sometimes I wonder whether there is a plan. To-day there is this piece of legislation; to-morrow there is another. No one can put together this bits-and-pieces post-war programme. I should like to see it reconstructed by those in authority, to the end that business may know its position and, above all, that the men and women returning from overseas service may not be denied, as they are to-day, the opportunity to go into small enterprises but will be given the opportunity to do so, and that the money to be made available under this bill shall be devoted mainly to the assistance of small enterprises.


Mr. VICTOR QUELCH (Acadia):: Mr. Speaker, I have read this measure with a great deal of interest, but the more I study it, the harder I find it to understand just exactly its purpose. I have listened to the statements of various members of this house. Some hon.- members have suggested that the purpose of the measure is to salvage investments of the chartered banks which have gone sour. Others have suggested that it is to take on business wffiich is too risky for the chartered banks to handle. The minister himself has suggested that its purpose is to fill in the gap that cannot be filled by the chartered banks.
We have no idea of what will be the rate of interest charged by this bank, neither do we know whether it will secure its funds from the Bank of Canada or by the sale of bonds to the public. We do not know what rate of interest those bonds will bear. In other words, it is a kind of pig in a poke; it is quite a bit like a blind .date. You do not know what you are going tc get, you do not know w-hether you will like it when you get it, and you do not know whether you will be able to discard it after you have it.

Industrial Development Bank
When we consider the expansion that has taken place during the war, an expansion which has increased the national income from around $4 billion to $8J or $9 billion, I doubt very much if this measure will be able to play a very important part. I doubt still more whether there will be any need for such a measure after the war. This measure provides a fund of only SlOO million, and, according to the parliamentary assistant to the Minister of Finance, the money will be lent out chiefly for long term purposes.


Mr. ABBOTT:: Medium and long.


Victor Quelch: Medium and long. The result will be you will not have a rapidly revolving fund and the amount of business the bank will be able to do will not be very great. When you think of a $9 billion economy it will be merely a drop in the bucket.
As I understand it, the bonds of this bank are not to be guaranteed by the government, but I think the minister will agree with me when I say that the government could not possibly allow this bank to go by default. If there were any danger of this bank going by default the government would have to be prepared to come to its assistance. On the other hand., as these bonds are not guaranteed by the government they will have to bear a higher rate of interest than dominion bonds. As the government will have to back them in the event of the bank getting into trouble, it seems to me they should take steps to see that the rate of interest to be paid is no higher than that paid on dominion bonds. Otherwise you will be compelling industry to pay unnecessarily high rates of interest.
The minister has stated that it is not intended that this bank shall compete with the chartered banks. Perhaps that is one reason why this bank is not to be a bank of issue. In other words, it is being shackled so that it cannot compete with the chartered banks. It is not a question of whether it wishes to compete; it is being placed in such a position that it cannot compete even though it desired to d,o so. Perhaps that is the reason why the bonds will likely be sold to the public or to the chartered banks rather than to the Bank of Canada. It seems to me that the government are deliberately creating a set-up which will bring about higher rates of interest on industrial loans.
The parliamentary assistant has stated that this bank is needed to fill a gap. I should like to quote what he said about that gap. On page 1059 of Hansard he is reported as follows:
The chartered banks are one source, of credit for industrial enterprises. But since the liabilities of these banks are mostly in the form of deposits withdrawable on demand or short notice, it has ahvays been thought desirable that they should keep their assets in rather liquid form-easily realizable in case of need.
And again:
For the reason I have just mentioned, the chartered banks for the most part have made short term loans to industry-loans which in the ordinary course of business can be paid off in full at least once a year. Accordingly, they have been most important as a source of working capital for industry rather than as suppliers of long term funds which might only be repaid over a period of several years.
And again:
It is to fill this gap in our financial structure and to ensure that adequate financing is forthcoming for desirable projects that the government proposes to establish the Industrial Development Bank.
That would seem to be a desirable objective, but unfortunately the resources of this bank are going to be limited and it is doubtful whether it will be in a position adequately to fill the gap. It seems to me that if there are gaps, and undoubtedly there are, then the first, step w'e should take is to amend the Bank Act in such a way that these may be filled. We could very well let this measure stand until the Bank Act has been revised. When that has been done, and we have found out what gaps are left still to be filled, there would then be plenty of time for the government to bring down a measure to provide for the filling of them.
I want to consider briefly the situation referred to by the parliamentary assistant. I quote again from page 1059 as follows:
But since the liabilities of these banks are mostly in the form of deposits withdrawable on demand or short notice, it has always been thought desirable that they should keep their assets in rather liquid form.
In other words, it might be said that the chartered banks are lending something which they do not in reality possess. Because the chartered banks are able to create loans at the ratio of ten to one against their cash reserves, they are not in a very sound position to make long term loans. If there was a run upon the banks they would be in the unfortunate position of being able to pay only approximately ten cents on the dollar. Naturally they try to remain in as liquid a position as possible.
On previous occasions in this house we have discussed this matter. Members of this group and of other parties in the house have suggested that it might be well worth while for the government to consider making amendments to the Bank Act along the line of the
Industrial Development Bank

one hundred per cent system. I think the minister is familiar with the proposal as suggested by Professor Soddy and later taken up by Professor Irving Fisher and later endorsed by Babson's Incorporated. Briefly the proposal is to amend the Bank Act so that the chartered banks will be compelled to maintain one hundred per cent cash reserves to the full amount of their demand deposit liabilities. If that were done, the banks would be in a position at all times to satisfy any demand against their demand deposits. The proposal is that the government should buy from the chartered banks a sufficient quantity of government securities to provide the legal tender backing required on that basis. The Minister of Finance has on several occasions opposed such a suggestion on the ground that it would be, in other words, a tax on the profits of the chartered banks. But there is an alternative to that proposal by which the banks would not be in any way penalized. That proposal is made by Babson's. It is a slight modification of the suggestions made by Professor Irving Fisher and Professor Soddy. I should like to quote briefly from Babson's Reports dated March 20, 1939, in regard to this proposal. I shall quote only paragraphs 7 and 10. Paragraph 7 reads:
In order that our monetary policy may be made to conform to the new standard and become the means of attaining a high degree of prosperity and stability, legislation should be enacted, embodying the following features: (a) there should be constituted a "monetary authority" clothed with carefully defined powers oyer our monetary system, also control of the circulating medium.
And paragraph 10:
The simplest method for making transition from the fractional to one hundred per cent reserves would be to authorize the monetary authority to lend, without interest, sufficient cash (federal reserve notes, credit, United States notes, or other lawful money) to every bank or other agency carrying demand deposits to make the reserve of each bank equal to its demand deposits on a specified date.
If that recommendation were carried out rather than the proposal by Professor Irving Fisher, it could not be charged that you would be taxing the profits of the chartered banks, because instead of buying up the bonds held by the chartered banks and thereby depriving them of the interest thereon, you would lend to them as collateral legal tender without interest against their holdings of government securities, and if there were a run on the chartered banks they, would then be in the position of being able to meet all demands one hundred per cent. Moreover, it would be a great help to the government, because there would be no danger of inflation. The 
government would be in the position of issuing national money wtihout any danger of the chartered banks using the money issued by the government as a basis for expanding their loans in the ratio of ten to one. The charge has been made repeatedly in this house by the Minister of Finance and the former minister of finance who have refused to issue new money on the ground that it would create inflation. But this proposal would take care of that danger.
Some people object to the one hundred per cent idea on the ground, with a good deal of justification perhaps, that while the one hundred per cent system would prevent the banks from inflating the money in circulation, it would not, on the other hand, prevent the chartered banks from curtailing the issue of money, and therefore they say that other steps would have to be taken. I do not think it is quite fair to make that charge unless it has been proven. In other words, the government in power might decide to adopt the one hundred per cent system. They would seek the cooperation of the chartered banks and if they were unable to obtain the cooperation of the chartered banks they could adopt the alternative of nationalizing the whole banking system.
It is interesting to note this fact, that in New Zealand there is a government that was pledged to nationalize the chartered banks. That government has been in power for eight or nine years, and yet it has not nationalized the banking system of that country. It has been suggested that the reason why the banks have not been nationalized in New Zealand is that the government has never been able to get hold of enough money to buy the capital stock of the banks. But if the banks were nationalized, all that the government would be required to do would be to write a cheque against the bank itself to pay for the capital stock.
Some may say that that would be inflation. But remember, the capital stock of those banks is always readily saleable and if people wanted to obtain money for their bank stoek they could obtain it readily. The fact that the people have not sold their bank stock shows that they do not want the cash, but rather an investment. If the banks in New Zealand were nationalized I do not believe one need worry that the people on receipt of money in payment of their bank stock would at once go out to buy other goods and thereby cause inflation. Rather they would immediately look for another forth of investment. I just mention that fact to show that even though a nationalized banking system may

Industrial Development Bank
seem very desirable, as it seemed desirable in New Zealand, yet in spite of the fact that a farmer-labour government has been in power in New Zealand for about nine years they have never taken the step of nationalizing the banks there. They figure that they can control the banking system without nationalization. One can argue all one likes about the proposal, but it would be necessary to wait and see just what sort of cooperation you would obtain from the banks. If you could obtain the desired cooperation, there would be nothing to gain by nationalization so long as you had the one hundred per cent system in operation. On the other hand if they refused to cooperate, immediate steps could be taken to take them over.
As I understand it, the Bank Act is to be revised some time during tne session. There will be plenty of opportunity therefore to investigate the Bank Act and its operations. If there are any gaps which the Bank Act does not fill, surely that will be the time to bring forward the necessary amendments in order to fill the gaps. If we find that we cannot fill the gaps by amendments, surely that will be the time for the government to bring down a measure to take care of the situation. Therefore, Mr. Speaker, I move, seconded by the hon. member for Lethbridge (Mr. Blackmore), the following motion:
That this bill, No. 7, be not now read a second time but that the second reading be postponed until after the Bank Act shall have been reviewed and by parliament revised.


Mr. MACKENZIE (Vancouver Centre):: Mr. Speaker, I rise to a point of order, although I am not asking Your Honour to rule upon it now. Beauchesne's Third Edition, Speakers' Decisions, page 495, says:
The house resumed the adjourned debate on the proposed motion of Mr. Manion: That the Bill No. 37 (Letter A of the Senate), intituled: "An Act respecting the Canadian National Railways and to provide for cooperation with the Canadian Pacific Railway System, and for other purposes," be now read the second time, and the proposed motion of Mr. Mackenzie King in amendment thereto:
That all the words after "That" to the end of the question be left out in order to insert the following instead thereof: "the second reading of this Bill be postponed until this house have declared that nothing therein shall be taken to authorize any amalgamation of the Canadian National Railways with the Canadian Pacific Company; or to divest parliament of its rights; or to take from the House of Commons its primary duty to control expenditures of public moneys and the taxes required to meet the same; and that the provisions of said bill shall be read in the light of this declaration, and be construed so as to conform therewith, and that in so far as any of its provisions may be inconsistent therewith they shall be amended accordingly,
"and that the adoption of this amendment by this house shall constitute the declaration of its intention and purposes as set forth herein."
Mr. Speaker: There is in our journals one precedent of an amendment moved on the second reading of a bill which proposed that 'further consideration of the bill be deferred until the Tariff Bill has been disposed of.
It was a declaration of principle covering not only the second reading, but also the third reading and the final adoption of the bill, and it was moved, as a disapproval of the measure.
But the present amendment is different inasmuch as it proposes a postponement of the second reading pending a definite declaration of the house.
It does not purport to be adverse to the bill, but it makes suggestions for adding to its provisions by amendments which can only be moved after the adoption of the second reading.
May at page 390 says:
And the quotation is found at page 496. Then Mr. Speaker continued:
As this amendment has not the effect of disagreeing with the principle of the bill, it does not come within the class of amendments referred to by May.
"The allegation that nothing in the bill should be taken to divest parliament of its rights or to take from the house its primary duty to control expenditures is a declaration of general principles which can be moved as a reason for not agreeing to the second reading of a bill dealing with the constitutional rights of parliament, but which is beyond the scope of, and therefore irrelevant, to the present bill. May says at page 391 that the principle of relevancy in an amendment governs every such proposed resolution."
At page 391, May says further:
"Such an amendment may not deal with the provisions of the bill upon which it is moved nor anticipate amendments thereto which may be moved in committee."
The words "nothing therein shall be taken to authorize any amalgamation of the Canadian National Railways with the Canadian Pacific Company" anticipates an amendment w-hieh may be moved in committee.
The propostion that the bill shall be read in the light of certain declarations and be construed in a certain manner, and that its provisions shall be amended accordingly is in the nature of an instruction to the committee which cannot be moved as an amendment to the second reading.
For these reasons, the amendment is out of order.
See May 15th edition, page 391; Bourinot, page 509; Redlich, Vol. 3, page 89.
From this decision Mr. Mackenzie King appealed to the house.
And the question being put by Mr. Speaker: Shall the ruling of the Chair he sustained?- it was decided in the affirmative.
Debates, House of Commons, 1932-33, vol. 3, pages 2895-6.
Journals, House of Commons, vol. 71, pages 297, 298, 299.
I would ask Your Honour to give consideration to the arguments advanced at that time.
Industrial Development Bank


John Horne Blackmore: Mr. Speaker, it seems to me that the cases cited by the Minister of Pensions and National Health (Mr. Mackenzie) are not analogous to the situation we have here confronting us in respect of the present amendment. My submission is that the present amendment is completely in order.


Mr. SPEAKER:: I shall deal with that matter a little later. An amendment has been moved to the main motion, and the debate should now take place upon the amendment. I shall deal with it later. Is the house ready for the question?


Mr. H. C. GREEN (Vancouver South):: Mr. Speaker, this bill setting up an industrial development bank is a very important one. I believe it may be of great help to Canada at the present time, and also that it may be of much assistance in dealing with our post-war problems, which, as all hon. members must know, will be very difficult ones. There are several thoughts, however, which I should like to express in connection with the bill, and which I would place before the ministry and before hon. members in the hope that they will be of some help to the banking and commerce committee when it considers the bill section by section, and will also be of some help to hon. members when the bill returns from that committee.
It does seem to me that this bank might easily become a political one. It could be used for political purposes. I am not for a moment suggesting that that would be done, but it is a thought which should be kept in mind not only by the present government, but more particularly by members of my own party, the Progressive Conservative party. I say that because I believe that they are the people who will have to administer this measure in the very near future.


Some hon. MEMBERS:: Oh, oh.


Howard Charles Green: I mean that, and I would ask hon. members in my own party to keep that thought seriously in mind.


Gordon Graydon: The hon. member never said anything truer in his life. .


Howard Charles Green: It would be a great tragedy if this bank were to be handled in a political fashion, or if it were to be dragged into politics. One effect would be that immediately the Bank of Canada, an organization which thus far has been kept clear of that, would be dragged into the political arena. The effect of having this new bank mixed up in politics might very well seriously under-
mine our democratic system of government. I hope therefore that it will never become a political instrument.
The next thought is that the bank should work very closely with the people in the different provinces and localities in Canada. I do not believe it would do that, as at present constituted.


Thomas Vien: May I ask the hon. member to resume his seat while I deal with the amendment? I have listened to the argument of the Minister of Pensions and National Health respecting the decision given on March 10, 1933, by the Hon. Mr. Black, now the member for Yukon. The amendment then moved was dealing with the second reading of the bill, but it also referred to the provisions of the bill, and amendments thereto. That is not competent on second reading. In other words, it is not Competent to deal with the provisions of a bill on second reading.
The amendment at that time was:
That all the words after "that" to the end of the question be left out in order to insert the following instead thereof: "the second reading of this bill be postponed until this house have declared that nothing therein shall be taken to authorize any amalgamation of the Canadian National Railways with the Canadian Pacific Company; or to divest parliament of its lights; or to take from the house of commons its primary duty to control expenditures of public moneys and the taxes required to meet the same; and that the provisions of said bill shall be read in the light of this declaration, and be construed so as to conform therewith, and that in so far as any of its provisions may be inconsistent therewith they shall be amended accordingly."
That was dealing with the provisions of the bill, and that is not competent on second reading.
I have here an amendment moved on June 18, 1917, which shows that the second reading of a bill may be postponed until a certain event takes place, and in connection therewith I find at page 361 of the Journals of the House of Commons for that year:
Sir Robert Borden moved, seconded by Sir George Foster, that the bill, No. 75, respecting military service, be now read the second time.
Sir Wilfrid Laurier moved in amendment thereto, seconded by Mr. Oliver, that all the words after "that" in the said motion be struck out and the following substituted therefor:
"the further consideration of this bill be deferred until the principle thereof has, by means of a referendum, been submitted to and approved of by the electors of Canada."
And a debate arising thereupon, the said debate was. on motion of Mr. Morrison, seconded by Mr. Barnard, adjourned.
No exception was taken to the amendment. The amendment now before us is:

Industrial Development Bank
That this bill No. 7 be not now read a second time, but that the second reading be postponed until after the Bank Act shall have been reviewed and by this parliament revised.
I am of opinion that that is on all fours with the amendment moved by Sir Wilfrid Laurier for the postponement of the bill before the house in 1917.
Then, at page 228 of Beauchesne's Third Edition we find this, in paragraph 657:
It is also competent to a member who desires to place on record any special reasons for not agreeing to the second reading of a bill, to move as an amendment to the question, a resolution declaratory of some principle adverse to, or differing from, the principles, policy, or provisions of the bill, or expressing opinions as to any circumstances connected with its introduction, or prosecution; or otherwise opposed to its progress; or seeking further information in relation to the bill by committees, commissioners, the production of papers or other evidence or the opinion of judges.
In my judgment this amendment could be covered by the words, "or otherwise opposed to its progress," meaning that there will be a delay until such time as mentioned in the amendment, namely, after the Bank Act shall have been reviewed and by this parliament revised.
I am of opinion therefore that the amendment is in order, and that the debate may now take place and will be confined solely to the amendment. In consequence I may have restricted the hon. gentleman in his remarks. He was speaking at the moment to the motion and I have now held that the amendment is in order. The debate must therefore be addressed solely to the amendment. If the hon. member wishes to speak to the amendment he may do so, but if he prefers to make his remarks on the motion he can wait until the amendment is disposed of.
Mr. GREEN; If the amendment is voted down, Mr. Speaker, am I free to continue my remarks on the motion?


Thomas Vien: Quite. There is of course a principle involved. The hon. member having spoken, there was an interruption in the proceedings of the house. But when I point out that I interrupted him for the purpose of dealing with the amendment, the house will, I take it, recognize his right to speak on the motion. Is the house ready for the question?


Gordon Graydon: I have no desire at this time to inject myself into the debate, but I would point out that the effect of the amendment, if it were carried, would be to delay the bill or to prevent its disposition at all this session. Changes may have to be made
in the bill, but we in this party feel that at least it should be sent to the banking and commerce committee, as the parliamentary assistant has suggested. This, of course, would not be possible if the amendment were agreed to. Our view is that after the bill has come out of that committee, and before its third reading, there may be reasons why it should be considered in conjunction with the revision of the Bank Act, but at present we are of the opinion that it would perhaps be tantamount to delaying the progress of the bill and preventing the endorsement of its principle. For that reason we shall vote against the amendment.


Howard Charles Green: When Your Honour stopped	
me in my remarks to make a ruling on the amendment that had been moved by the hon. member for Acadia (Mr. Queleh), I had just begun to place before the ministry and the members of the house my second thought with regard to the industrial development bank bill. In order that this bank may do its best work, in order that it may be effective, it is vital that it should work closely with the people in the various provinces and localities in Canada. That I believe it cannot do under the present provisions. The bill provides for branch offices, but I take it there will be comparatively few of those offices in Canada, and they will be in the larger cities only. The bill provides also that the members shall all be directors of the Bank of Canada. In other words, it is to be an entirely Bank-of-Canada-run organization.
I think it is of the greatest importance not only that the bank should have local contacts with the people out in the communities, but also that it should have their advice and the support and enthusiasm of the Canadian people from coast to coast; therefore I suggest that provision should be made for an advisory board in each province. There should certainly be an advisory board set up in each province, and in the more thickly populated provinces it might be necessary to have more than one. I suggest that these boards should include representatives, if possible, of all the parties. They should not be restricted to men who support the government that may be in office for the time being. In British Columbia we have what is known as a rehabilitation council, which was set up by the provincial government. It is made up of members of all parties in the local legislature. They have gone around the province between sessions

asking for representations from the citizens in the different centres with regard to the problem of rehabilitation, asking what industries could best be established in the different towns, thereby creating interest in the postwar period and in ways of building up the different communities. I believe that provision should be made for advice of that kind to be available to the industrial development bank.
Then it is of the greatest importance that there should be representatives of labour on such advisory boards. After all, with labour this question of small enterprises and the building up of new industries is a matter of bread and butter, and I think they will be far more vitally interested in the bill than any other group of people in Canada. So that if the government sees fit to provide for advisory boards or some similar organizations I suggest that representatives of labour should be included. I also believe that the bank should adopt a deliberate policy of dispersing industry into the towns of Canada, of spreading industry out and not letting it become any more concentrated than is absolutely necessary. That is the second thought.
My third thought is this. The bill refers to the building of ships as an industrial enterprise. We all know that during the war shipbuilding has become a huge industry in British Columbia, Ontario, Quebec, New Brunswick and Nova Scotia, and that around the shipbuilding industry, or really as part of it, dozens of small, satellite industries have grown up, small shops which provide parts and equipment for ships, and so on. I know in Vancouver there are dozens of these small industries which would come under the provisions of the bill, and the industrial development bank should be of great help to them. But they are entirely dependent on shipbuilding itself; they are dependent entirely on whether or not shipbuilding is to be continued in Canada after the war. The shipbuilding industry will require more than a loan, and I do not believe that this bank by itself will be able to maintain that industry in operation. Some further steps will have to be taken by the government. Personally I believe that if we are to continue to build ships in Canada after the war direct help will have to be given by the government, perhaps by way of subsidies or by way of orders for ships.
At the present time there is the greatest uncertainty as to what Canada's policy is to be in regard to shipbuilding after the war, and in regard to the question of a merchant marine. Is Canada to continue to build ships? Is she

Industrial Development Bank
to have a merchant marine, or is she not? These questions remain to be settled, and the government should make an early announcement of policy. Such an announcement would be of great help. Mind you, I hope that the announcement will be to the effect that the government considers shipbuilding and a merchant marine necessary to Canada, but we have had two diverse opinions expressed by ministers of the crown. For example, I have here press clippings dated Toronto, December 13, 1943, in which the Minister of Munitions and Supply (Mr. Howe) is quoted as saying that he-
. . . called on Canadians to-day to avoid postwar planning based on public works and the dole and set forth as his alternatives nine objectives aimed at making this nation of twelve million persons "the happiest people on God's green earth "
Then the minister set out those objectives, and number four was:
Provide a merchant marine worthy of the dominion's export position.
Just two weeks later, however, his colleague the Minister of Transport (Mr. Michaud), who really is the man who would have to do with the merchant marine after the war, had something different to say here in Ottawa; apparently there was a failure to get together on this question. He said:
I see no future in Canada going into the shipping business on a big scale after the war.
. . . Some of the ships might well be used to develop trade between Canada and the West Indies and South America-but to enter competition for trade across the Atlantic and Pacific would be a big undertaking.
Then the press dispatch goes on:
Mr. Michaud said that if the Canadian government entered into general merchant business it would be in competition with old steamship companies that have world-wide organizations.
If a ship takes a cargo to a port, it has to have an agent there to get a cargo for the trip back.
He went on thoroughly to scuttle his colleague's policy, announced two weeks before:
Freighters from Norway and Greece are operated by private companies with years of experience behind them and they are likely to resume operations after the war, he said. The wages paid by these foreign companies to their crews are much below Canadian scales.
British steamship companies are preparing service to resume on regular schedules and they will be much faster than the ships Canada has, said Mr. Michaud.
In that last remark perhaps the minister really did refer to something worthy of note; that is, we are not building any of these fast ships, while Great Britain and the United States are, and I think Canada should be
building at least some of them. In any event, there is the contradiction; and this question of shipbuilding is so vital to Canada, or certainly to the provinces on either coast, that I urge the government to make an announcement at an early date. I urge the government not to allow the shipping industry to fold up or die out, but on the contrary to see to it that this industry is maintained after the war. If that is done it will mean the survival of these satellite industries, and then the industrial development bank will be able to help them to carry on.
The same situation exists in connection with other industries. I need quote only one as an example, and I refer to housing. There are many small enterprises in Canada which depend for their existence upon the construction of homes. It would be helpful if the government would make an early announcement of policy in regard to housing. I hope that announcement will be to the effect that the Canadian people are to be rehoused. At the present time that situation is very serious, indeed far more serious than members of the ministry realize. In many cities families have to live in garrets, in basement suites or perhaps in garages. This has an effect upon the war effort, because it lowers the morale of the people who have to live in those places; it is having a serious effect upon the health of our people and has an effect also upon the men who come back from overseas and find that they must live under such conditions. It makes it just that much more difficult for a man returning to this country to enter into the spirit of things in Canada and settle back into his civilian pursuit. Therefore I suggest that an announcement on the general question of housing should be made at an early date.
Finally there are three other points in connection with this bill which I suggest the parliamentary assistant should make clear when he closes the debate. The first is whether or not the bill is intended to cover the processing of metals. I notice that it does not refer to the mining industry. In other words, no direct help can be given by the bank to the mining industry, but I should like to know whether help could be given for the establishment of a steel rolling mill, let us say.


Douglas Charles Abbott: Yes, that comes within the bill.


Howard Charles Green: That is definite. Also will the bank have power to help to set up a steel and iron industry? Section 2 of the bill refers to the generating or distributing of electricity. It would be interesting to know whether the bank will have power to help municipalities in putting in electrical plants.
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The bill does not make that clear. I take it that a private company could be given assistance, but I suggest that the legislation should be wide enough to enable the bank to assist municipalities in setting up power plants or other power systems.
I should like to know whether or not the bill is wide enough to enable the bank to help cooperative organizations. It refers to loans to persons and I take it that the provisions are wide enough to cover cooperatives. We should be told whether or not such is the case. In post-war years there will be a great development along cooperative lines, and we should know whether this bank will be able to help in that development.
I support the bill because I believe, as referred to in. the preamble, it can be made a most effective instrument for maintaining not only a high level of national income, but also a high level of employment. I certainly hope such will be the case.


Mr. A. R. ADAMSON (York West):: Mr. Speaker, there are just one or two things I should like to mention about this industrial development bank. I do not think anyone can take exception to the fostering of small industry after the war and perhaps the government is to be commended for introducing this bill. However, the sums mentioned are so small that they will hardly prove effective as a means of reestablishing small business in Canada after the war. I know of one new enterprise in my district which would take up more than the entire sum mentioned in the bill. This is merely a token bill which sets up a brand new principle, namely, the principle of the government going into the industrial banking business. That may or may not be a satisfactory solution. It may be that the chartered banks have shown that they are incapable of supplying credit to small industry, or the government may think they are incapable of doing this. That is the problem which face:! the government.
The government has introduced in this bill a principle which I think more than any other was the cause of the disruption and failure of the banks in the United States under the federal banking system. I refer to the fact that loans may be made on mortgages. This is an entirely new principle in Canadian banking. Up to now we have had mortgage companies, trust companies and finance companies, but banls have not been permitted to lend money on mortgages. This is something the government should carefully inquire into. I suggest that an examination of what happened with farm loans in Ontario during the

past ten or fifteen years would prove of value. I think it will be found that a tremendous number of those loans went bad. I mention this as one of the dangers which confront the government in connection with this measure.
The next danger is the fact that there is no mention of a limit on individual loans. A loan is made to an individual to permit him to start in business. He does not make a profit the first year; he has a loss, and he may have a. loss for the second, third and fourth years, as is quite usual with new businesses. What will happen? Who is to decide whether that loan is to be renewed? A small industry may start up and provide employment and it may or may not have a chance of success. But because it has been financed with government money, the government must continue to pay the shot in order to keep the industry going. That is one of the dangers in the socialization of all banking-you bring your banks into the arena of politics.
The other night the hon. member for Rose-town-Biggar (Mr. Coldwell) referred to the question of taxation. Let me give an illustration. Two young men who have been in the army or air force decide to start up a new business, let us say the making of mouse-traps. They go to the bank and the bank consults its-


Douglas Charles Abbott: Mouse-trap expert.


Agar Rodney Adamson: -mouse-trap expert, which we will say is a firm of reliable exterminators in Toronto. They say there are no more rats left, but there are plenty of mice left to exterminate. These men go into the mousetrap business and the world builds a nice path to the door of their factory. They start making a very special mouse-trap which kills the mouse,' plays a few bars of Chopin's funeral march, throws the dead mouse over the neighbour's fence and resets itself. This trap becomes popular and they make a profit out of their business, but at the end of the first year what do they find? As there was no base rate for their company they are subject to excess profits and corporation profits taxes, and all their profits are taken by the government. Unless the government is prepared to repeal the excess profits tax you are not going to get anybody to start up new businesses. In fact these two men will probably go into the business of breeding mice in order to show their irritation with the government.
Then there is the question of the development of our natural resources. The hon. member for Rosetown-Biggar told us that the concentration of the mining industry is more

Industrial Development Bank
and more in the large companies. This bank, it is said, is not going to help in any way the financing of mining or prospecting, or any similar development. The taxation problem for the mining industry has been such that the large companies have been the only ones that have been able to afford to go into the exploration business. What usually happens is that a syndicate or a small group of prospectors starting out with a property would do some trenching and a little diamond drill work, which shows perhaps that they have a few assays which warrant spending a little more money. There is a trace of gold. Accordingly they go out and raise a few more thousand dollars. Then further drilling shows that they have discovered a commercial ore body. But because they are a group of only four or five individuals they have not the money to sink a shaft and provide the milling and crushing equipment required to go ahead and develop the property. So they sell it to a mining company or else form a company. They are taxed with the exploration profit they make on that property, therefore naturally the small prospector is handicapped and tied. He is discouraged in every way from going into the mining business. This is a serious matter because, up to recent years when the present taxation system came into effect, the majority of our mines were discovered by the individual or by a small group of prospectors. But today we have made it almost impossible by our taxation system to allow the individual prospector or the small group to operate.
In passing, let me say that if there is any industry that would1 pull us out of the postwar reconstruction difficulties it is the mining industry. No matter what sort of world we are going to live in after the war we shall have need of metal, both precious and base, and there is no country so bountifully endowed with metals as is Canada. We are milling to-day at the rate of approximately a hundred thousand tons a day. It takes on the average three men to mine a ton of ore; the man in the mine, the man servicing, and the man providing the equipment. As a rough empirical rule one can say that three men get direct employment out of every ton of ore milled. If we can double our production, which is feasible if we remove the restrictions, our untold mining capacity would provide work in the next five years after the war for 600,000 men directly employed in the mining industry. That, I believe, is not any dream but a practical possibility. But we are not going to do it unless we have new properties discovered, and I look with disfavour on the fact that it is specifically stated 100-86
that this industrial bank is not going to aid the mining industry. I believe that the prospecting syndicates are one of the most useful means of providing employment immediately after the war is over.
Again, Mr. Chairman, it is specifically stated that this industrial bank is not interested in housing. In the city of Toronto there is a housing plan which may take a hundred million dollars or more to bring it into effect- the actual cost has not been estimated at the present time. The building industry is the key industry of this country. It is the barometer of our prosperity and of our depressions. The building industry is not only the barometer; it is the key. There are, it has been estimated by Mr. Mathers, president of the Builders' association, 450,000 men actively engaged in the building industry of Canada in normal times. Most of the building industry has been in the hands of the small builder. In many ways that has perhaps been uneconomical. Nevertheless that has been (he system in Canada. One of the greatest costs in housing has been the price that the small builder and the man who is buying or building a house have had to pay for money, and I say that consideration should be given to including in this bill the provision of credit for the small builder. That is an omission in the bill which should be repaired.


Douglas Charles Abbott: If my hon. friend will allow me, I mentioned in my opening statement that the government was giving consideration to and would be proposing measures to provide similar credit facilities for agriculture and housing.


Agar Rodney Adamson: I thank the hon. gentleman. But it is not mentioned in the bill, and I want to emphasize to the parliamentary assistant that that is very much one of the omissions in the bill.


Douglas Charles Abbott: I made it very clear in my opening statement (hat consideration was being given to other measures.


Gordon Graydon: That was an afterthought, after the speech from the throne.


Ian Alistair Mackenzie: We have forethought. *


Agar Rodney Adamson: Finally I have this suggestion to make to the parliamentary assistant. The majority of the medium-sized industries in this country at the present time, because of the fact that they have come through a depression period, and the further fact that they are now paying almost one hundred per cent excess profits, practically all their profits, to the government, are not going to find them-



Industrial Development Bank
selves at the end of the war in a position to provide the necessary replacements to their plants and modernize their equipment to enter the new post-war type of trade. They are going to find their treasuries virtually depleted. But when the physical fighting ceases-the actual political declaration of peace may not be for some years-and the need for the munitions industry to work at its tremendous pitch comes to an end, I suggest that there be a tax holiday for business, to allow them to build up a surplus in order to re-tool and retrench, so that they may enter into the competitive world in which we shall find ourselves after the war.
They will see ahead of them years in which they will be faced with tremendous tax burdens. They will see, too, an almost immediate cessation of war business. What would be their reaction? They would say, "We are going to be bankrupt if we continue at the present rate, because we are faced with heavy payrolls and heavy overhead. We are going to be stuck with a tremendous taxation at the end' of the next fiscal period." One thing we must avoid at the end of the war is the condition which was found at the end of the last war. In other words, when industry stopped production the men who had been working were immediately discharged, with the result that unemployment at once became a problem.
I say to the parliamentary assistant that unless industry sees a possibility of continuing, its first instinct is to do exactly what was done after the last war. After this war it will be only that much worse, because taxation is so much higher. There are some exceptions, of course, but the majority of industries have not been able to build up sinking funds or reserve funds which would allow them to go into competitive business, re-tool, establish an export market, and do the hundred and one different things which business must do in a competitive market.
We must remember that during the war there has been very little competition. The government has said, "We will buy from you all you can make." After the war we shall be in a world in which there is competition, and business will have to say, "We will make what we can sell." That is the difference in the psychologies of peace and war, and unless the government recognizes the difference we shall find business men saying, "I do not know what we can make." They may say, "Let us wait for six months, to see what the world looks like. At the end of that time we may either close the plant, or run on a skeleton staff."

That is one of the dangers, and one of the conditions this bank should help to prevent. It can be a success, however, only if there is some change in respect of corporation taxes and excess profit taxes after the war. No one minds paying taxes in a time of war. All are fighting with their last drop of blood, because we have to beat the hun. But when the war ends, a different world will emerge.
I am in favour of the bill, as far as it goes. It contains several dangerous provisions, and may lead directly to inflation; but, so far as it goes, in its small way I believe if it is controlled it will prove a step in the right direction.


Mr. T. C. DOUGLAS (Weyburn):: Mr. Speaker, I had not intended taking part in this debate, because the financial proposals of this group were well stated before the house by our leader, the hon. member for Rosetown-Biggar (Mr. Coldwell). However, I am prompted to take part in the debate because of a statement made the other evening by the hon. member for Rosthern (Mr. Tucker). His statement is to be found at page 1286 of Hansard, as follows:
It is quite true that in certain places the C.C.F. say that they do not intend to take over control of some particular industry, and in other places they say they do. In British Columbia they stated, for example, that their programme is actually to take control of farmland as in Russia.
We are now changed, apparently, from being national socialists to communists, depending on what part of the country one comes from, and what is the most unpopular group in a particular constituency. I challenged the statement of the hon. member at the time, and the hon. member for Rosthern said he was quoting from the Vancouver Sun. I was not calling in question the hon. member's integrity. I know the quotation from the Vancouver Sun which he had in mind. I was, however, calling in question the authenticity of the source of his information. If the hon. member for Rosthern had taken the trouble to verify, or to attempt to verify the source of his information, I doubt very much if he would have made the statement he did make. I say that because the quotation in question from the Vancouver Sun has on numerous occasions been publicly repudiated.
I have in my hand a copy of the C.C.F. News for January 20, 1944, containing a signed article by Frank J. McKenzie, British Columbia provincial secretary of the C.C.F. organization in that province. I wish to read only part of it, so that the situation may be clear

Industrial Development Bank
to hon. members. This article is headed "Misrepresentation of Farm Policy Repeated by Papers across Canada", and states:
The C.C.F. has found it necessary to complain about false press reports with growing frequency during the past year. An example of the effect of false reporting is to be found in the case of a report published by the Vancouver Sun on the British Columbia provincial C.C.F. convention of April, 1943. It is being quoted from one end of Canada to the other.
At frequent intervals since the publication of the Sun report, various spokesmen of the C.C.F. in British Columbia have found it necessary to explain that the provincial platform of the British Columbia section of the C.C.F. does not contain this plank: "Collective agriculture by the institution of methods of collective farming, such as have featured Soviet Russia's system."
The latest example of this to come to the attention of the writer is a statement by Captain W. R. Tucker, M.P. for Rosthern, at Saskatoon, as reported by the Saskatoon Star-Phoenix, January 11, 1944: "In British Columbia the farmers were swinging against the C.C.F. except in labour districts. As a factor in this swing in British Columbia, he quoted the second plank in the platform of that party in the coast province as calling for the collectivization of farms, as in Russia." There can be no doubt that Captain Tucker is relying either upon the April 19 issue of the Vancouver Sun or upon some other journal which relied upon the Sun as an authority.
Shortly after the publication of that report by the Sun the British Columbia provincial secretary wrote to that paper the letter reproduced below. The Sun published the letter, but, unfortunately, the damage was done.
Here is the letter to the Sun:
Editor, Vancouver Sun:
Sir: I would be glad if you would publish this letter by way of correcting a misrepresentation of the C.C.F., for which you are, I believe, in part responsible.
On your front page of April 19 you said: "The C.C.F. policy for British Columbia, as outlined in a statement by the party convention, will ..." Then you set out seven "planks", from which I quote the following: "2. Collective agriculture by the institution of methods of collective farming, such as have featured Soviet Russia's system." This statement -was not true.


Mr. TUCKER:: That is not the end of the quotation. My hon. friend pretends to quote from the Vancouver Sun but he has not quoted the whole of paragraph 2.


Mr. DOUGLAS (Weybum):: Mr. Speaker,
I am quoting-


Walter Adam Tucker: I am challenging my hon.
friend to do the same thing he asked me to do, to get the paper and quote from it, not from some letter or some alleged quotation. I suggest, Mr. Speaker, that he is not correctly quoting from the Vancouver Sun.


Thomas Clement (Tommy) Douglas: I am not
claiming to quote from the Vancouver Sun.
100-86J


Walter Adam Tucker: Yes, you are.


James Lester Douglas: I am claiming to quote from an article by the. secretary of the C.C.F. party in British Columbia, an open letter which was sent to the Vancouver Sun, in the course of which-


Walter Adam Tucker: I rise to a point of order. The hon. member is reading a letter in which the writer purports to be quoting frpm the Vancouver Sun. Now, if the hon. member is not taking the responsibility for the correctness of that quotation in the letter in question he should not read it in the house . I submit to you, Mr. Speaker, that he cannot claim that he is not quoting from the Vancouver Sun by saying that he is reading from, a letter which purports to be quoting from the Vancouver Sun. That is hearsay twice removed and I object to that sort of thing.


Thomas Clement (Tommy) Douglas: I am not
claiming to quote from, the Vancouver Sun at all. I am quoting from a letter which appeared in the Vancouver Sun.


Mr. DEPUTY SPEAKER:: Is the hon. member speaking to the point of order?


Thomas Clement (Tommy) Douglas: There is no
point of order.


Joseph-Arthur Bradette: A point of order has been raised by the hon. member for Rosthern. (Mr. Tucker).	.


Thomas Clement (Tommy) Douglas: My point, Mr. Speaker, is that I am not quoting from the Vancouver Sun. I am quoting from a letter sent to the Vancouver Sun which denies a statement which appeared in. the Vancouver Sun, and I have the right to place it on the record. I intend to do so.


Joseph-Arthur Bradette: The hon, member for Rosthern objects to the fact that the letter written by the secretary of the C.C.F. party in British Columbia has not been quoted in its entirety by the hon. member who is now speaking. I rule that the whole letter should be put on the record.


James Lester Douglas: I shall be glad to put it all on. The letter reads:
Moreover, it was not confirmed in any way by the accompanying story of your correspondent, James Dyer.
On June 11, the Calgary Herald, dealing editorially with a visit to that city by the C.C.F. leader, Harold Winch, said that one of the "planks" of the C.C.F. platform was "collective agriculture by the institution of methods of collective farming, such as have featured Soviet Russia's system." The Calgary Herald did not acknowledge the Vancouver Sun as the authority for this statement, but it is obvious that your report of April 19 was quoted.
Industrial Development Bank

Citing this false report, the Calgary Herald said: "The C.C.F. party uses the term of cooperative farms, but what is meant is cooperative farms established on the Russian model, in which the state will possess ownership and the farmers work as hirelings."
During the recent Revelstoke byelection the Coalition reprinted the Calgary Herald editorial and distributed it at Revelstoke in an endeavour to dissuade the people of Revelstoke from voting C.C.F.
The truth is that the provincial policy statement adopted by the recent C.C.F. convention said this: "Cooperative farms in these lines and in those areas where they will lower production cost must be encouraged, and production costs of such cooperative farms will become a yardstick by which to set the price level."
The letter is signed by F. J. MacKenzie, British Columbia secretary of the C.C.F. The point I want to make is that the hon. member for Rosthern, the Minister of Pensions and National Health (Mr. Mackenzie), and the leader of the opposition (Mr. Graydon), all said the other night that they could bring clippings to the house. I believe the minister was going to bring fifty.


An hon. MEMBER:: He will bring them if he said so.


Thomas Clement (Tommy) Douglas: He said a great many things. However, the amazing thing is that these three gentlemen are lawyers and any one of them must know that they would not be allowed to go into court and produce as evidence a newspaper clipping of something that was alleged to have been said or that was alleged to be the stand of a political party. If any one of these gentlemen wants to find out what the C.C.F. policy on agriculture is, all he has to do is to secure a copy of the C.C.F. programme-*


Gordon Graydon: It is a little more difficult than that.


Thomas Clement (Tommy) Douglas: -and to quote from it accurately instead of quoting from a distortion of the truth such as one might find in some newspaper articles. I have here-


Walter Adam Tucker: My hon. friend says that we should look for their platform. Where is their platform?


Thomas Clement (Tommy) Douglas: If the hon. member for Rosthern is so anxious to know what the programme of the C.C.F. is, he will have no difficulty in finding out. I shall be glad to give him a copy at any time. I have in my hand the C.C.F. programme for British Columbia, which is the programme to which he referred, and which was passed at the convention in question in April, 1943. Here is 
the entire section on agriculture, and I invite the hon. member for Rosthern and the other hon. gentlemen who are influenced by what they read in the Vancouver Sun, without taking the trouble to verify what they read, to examine this programme and see if they can find anywhere in it any statement suggesting collectivized farming.


Mr. McGEER:: I rise to a point of order. I do not wish to interrupt my hon. friend, but we are on the industrial development bank, and I believe that the house will agree that banking problems are complex and difficult enough in themselves, so that if we are going to mix in with that difficulty the policy of the C.C.F. and its relation to the land policy of the Soviet Union, I am afraid we shall lose sight of the bank bill altogether.


Thomas Clement (Tommy) Douglas: I agree that the question of the collectivization of land is not relevant to the industrial development bank, but I would point out that it was just as irrelevant last Tuesday evening.


Gerald Grattan McGeer: Two wrongs do not make a right.


Thomas Clement (Tommy) Douglas: The hon. member for Rosthern was allowed to place on
the record a statement which is not in accordance with the facts, and I claim the right-


Walter Adam Tucker: My statement was that they were reported to be in favour of collectivized farm land as in Russia and my hon. friend, as I understood him, denied that they were so reported. I have sought over and over again to show that what I stated was correct, namely, that they were so reported. The hon. member is trying to wriggle out of it by saying that the report was not correct.


Joseph-Arthur Bradette: There is no doubt that the debate at the present moment is quite removed from the bill under consideration. Though agriculture might be discussed under a bill of this description, I would ask the hon. member to stay within the confines of legitimate discussion allowed on the second reading of this bill.


Thomas Clement (Tommy) Douglas: I shall be glad to abide by your ruling, Mr. Speaker, but I must insist that, in view of the fact that the hon. member has made the charge, I should give to the house the agricultural plank of the British Columbia C.C.F. organization. It is found on page eighteen of a pamphlet published by the British Columbia section of

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the Cooperative Commonwealth Federation. This policy was adopted at the annual convention held last April. It reads as follows:
The agricultural policy to be pursued by a C.C.F. government will have two objectives: (1) to ensure to the farming population security of tenure, the amenities of modern life, and an income which wrill enable them to live at a standard at least equivalent to that of the urban population; (2) to ensure an ample supply of good quality food at prices which will enable every British Columbian family to purchase an adequate diet. In order to accomplish these two purposes a C.C.F. government must devise means to:
1.	Facilitate increased production per capita of farm population, as the farmers' income is not only determined by price but also by quality and quantity produced and marketed.
2.	Stimulate increased domestic consumption.
3.	Eliminate all unnecessary handling charges between producer and consumer.
4.	Set the prices to be paid the farmer for his product.
5.	Encourage production of new crops for industrial purposes.
In all such measures to aid farmers and consumers a C.C.F. government will work in cooperation and consultation with farmers' organizations and the principle of collective bargaining, as already recognized in workers' trades unions, will be applied to all farmers' problems.
Production will be stimulated by increasing returns to the farmer but hand in hand with this must go encouragement to increasingly efficient methods of production. Provision will be made for the resettlement of those now on uneconomic farm lands.
I draw attention to the use of the next sentence, as it is the sentence upon which the article in the Vancouver Sun was apparently based.
Cooperative farms in those lines and in those areas where they will lower production costs must be encouraged, and production costs of such cooperative farms will become a yardstick by which to set the price level. Domestic consumption will be increased as government-sponsored enterprises distribute increased purchasing power. Owing to the constitutional inability to fix prices in the manner of the resent wartime prices and trade board, it will e necessary, in order to ensure adequate returns to the farmer, to constitute the provincial government as the sole first purchaser and wholesaler of agricultural produce. Only by the creation of such a government monopoly will it be possible to control imports into the province or to eliminate those interests which now divert such a large part of the consumer's dollar to private gain. The precedent for such action has been set by the Liquor Control Act.
While it may not be feasible to set up the organization to take over all lines of agricultural produce simultaneously it will be necessary to proceed as rapidly as possible. First steps in this direction will be taken in the field of dairy, poultry, fruit and vegetable products, but the ultimate success of measures to improve conditions in the dairying and poultry branches will depend on bringing the milling and distribution of grains and mill-feeds under public ownership. Marketing, buying and processing cooperative associations and credit unions will be assisted and encouraged by the government by means of legislation and education.
While recognizing that it will take time-


Gerald Grattan McGeer: Now, Mr. Speaker, I am perfectly willing to withdraw that-


James Lester Douglas: May I
continue?
-to develop the machinery for handling all lines of agricultural produce, the goal of the C.C.F. government-


Gerald Grattan McGeer: I rise to a point of order. I raised a point of order, Mr. Speaker, and in view of1 what was said it seemed to me that your ruling was quite correct. But we are [DOT] going altogether outside the field of the policy on the ownership of farms and we are dealing with something entirely different. If that is to go on then I suppose it will be necessary to answer it. Surely that type of argument has no place in the debate upon the industrial development bank?


Clarence Gillis: You should have ruled it out
last Tuesday night.


Gerald Grattan McGeer: I am quite willing to concede that the question which was raised with regard to the policy on the ownership of land should be dealt with, but this is going much beyond that. I think the hon. member will concede that.


Clarence Gillis: He is only answering it.


Gerald Grattan McGeer: He is going into the whole
policy.


Joseph-Arthur Bradette: The only reason why I allowed the hon. member for Weybum (Mr. Douglas) to put some parts of the C.CJF. platform on Hansard is that a question was asked by the hon. member for Rosthern (Mr. Tucker), which I thought he should answer. I hope that it is properly answered.


Ian Alistair Mackenzie: I rise to a point of order. Seeing that Your Honour has allowed latitude on this specific issue raised by the hon. member with regard to collective ownership of land, the statements made will be replied to, and I trust the same latitude will be given to the hon. member to reply as was given to the hon. member for Weybum.


Mr. MacINNIS:: On a point of order, Mr. Speaker, if you rule that the horn member for Weyburn cannot continue, then you cannot rule that somebody else can continue later on in this debate. Either the hon. member for Weyburn continues with what he has to
Irtdustrial Development Bank

put on the record or, if he has to discontinue, then no further mention can be made of the matter in this debate.


Gordon Graydon: May I say that I do not think anybody in the house will object to the hon. member for Weyburn having a certain amount of latitude, but it seems to me that he is reading a good part of a book into the record.


Angus MacInnis: A good programme.


Gordon Graydon: It may be he is not able to condense his farm programme into any better shape than that.


Angus MacInnis: The hon. member for Rosthern condensed it.


Gordon Graydon: I am not talking about farmers. If there is anybody in the house who is far away from the farm it is the hon. member who has just spoken. I wish to say that I feel the house does not want to confine the hon. member too rigidly, but I hope we are at the last chapter and the last verse at the moment. If that is the case probably he shAuld continue.


Mr. SLAGHT:: Do as Mr. Bracken did, hire a hall.


Joseph-Arthur Bradette: I notice the intent of the house is not to curtail discussion.


Gordon Graydon: He did not go to the senate to do it.


Joseph-Arthur Bradette: The reason why I allowed the hon. member to put his programme on -the record was that a direct question was put by the hon. member for Rosthern (Mr. Tucker). I believe it has been fairly answered by the hon. member for Wey-bum (Mr. Douglas) and I believe we should now continue with the bill and motion before the house.


Thomas Clement (Tommy) Douglas: Do I gather from your ruling that I must desist from reading the remainder of this pamphlet?


Gordon Graydon: How much have you?


Joseph-Arthur Bradette: The hon. member for Weyburn should desist now because he has properly answered the hon. member for Rosthern.
Mr. DOUGLAS (Weyburn) I I agree with that. The answer has been properly given. I think I have shown conclusively that the newspaper-item referred to by the hon. member for Rosthern and by some other hon. members was not based on actual fact, and (Mr. Maclnnis.]
was not based on the C.C.F. farm programme, most of which I have placed on the record.
I wish to say just a word or two about the industrial development bank. The main criticism I have of the bill is that it cannot be much more than a political gesture in dealing with the post-war problem of maintaining full employment and preventing the deflation which may take place unless adequate measures are taken to maintain a steady flow of currency and credit after the war. The $25,000,000 capitalization, with $75,000,000 to be raised by the sales of bonds and debentures, making a total of $100,000,000 in an economy which at the present time is producing in the neighbourhood of $9,000,000,000 in goods and services is, of course, infinitesimal. Furthermore, if this money is to be lent out on longterm credit there will be no very high velocity in the rotation of this money, and consequently it seems to me that it will meet the problem about as adequately as feeding a peanut to an elephant. It will be entirely on a penny-ante basis. I have the feeling that this whole bill is in much the same class as the National Housing Act and many other pieces of legislation that the government has brought down, namely, political gestures. In principle one can only approve them, but in their scope and in the number of people who will be beneficially affected by them they are so limited as to be almost of little or no value.
I was surprised in listening to the hon. member for York-Sunbury (Mr. Hanson), who led off the debate for the Progressive Conservative party, to find that, in spite of all the talk about maintaining full employment which the leader of the opposition has indulged in, as has also Mr. Bracken, the hon. member said, as reported at page 1265 of Hansard:
As soon as the war is over, government' borrowing and government spending will cease, and the national income is bound to go down to a low level.


Gordon Graydon: You and Harold Winch do
not always agree, either.


Thomas Clement (Tommy) Douglas: Am I to take it from that remark that the leader of the opposition does not agree with the statement made by the hon. member who led off the debate for the official opposition?


Gordon Graydon: The hon. member had better read the whole context.


Thomas Clement (Tommy) Douglas: I have read the important part of the paragraph. The leader of the opposition has not taken part in the debate as yet, and he can read the rest of it if he thinks it has any bearing..

Industrial Development Bank
What I want to point out is that it seems to me that the debate up to this point has reflected fairly clearly the points of view of the different parties in this house in reference to banking and finance. The hon. member for York-Sunbury (Mr. Hanson) expressed the opinion that the function of this bank can be carried out much better by private enterprise. To him this is a measure of socialism. The hon. member for Lethbridge (Mr. Blackmore), believes that the control of the issue of currency and credit can be best secured by strategy, as he said, rather than by ownership of the banking system. We in this group, I think, have made it abundantly clear that from our point of view there can be no effective harnessing of the banking, facilities of this country to our economy in the post-war period unless the government is prepared, first, to assume complete ownership and control of the chartered banks and, second, to set up a national financial policy which would make the bank now being proposed in this bill part of a national investment bank. Coming as I do from an agricultural constituency and an agricultural province, I am particularly concerned that a bank such as is now proposed should be made available to the farming community. It has been said that an agricultural bank is under consideration. Well, of course it has been under consideration since 1919, when I believe Mr. Motherwell moved it in the Liberal convention of that year. That is a lot of consideration, but I should like to see some legislation.


Douglas Charles Abbott: In my opening remarks on moving second reading I said, as reported at page 1058 of Hansard :
In considering Llie present hill I hope that hon. members will keep in mind that in due course the government -will be proposing other measures designed to provide financial assistance in other fields of activity such as agriculture and housing.


Thomas Clement (Tommy) Douglas: Then I would ask the hon. gentleman, will that be during this
session?


Douglas Charles Abbott: Yes.


Thomas Clement (Tommy) Douglas: There is no
indication of it in the speech from the throne, but we are very glad that the government has finally made up its mind on, this score.
'Mr. MacNICOL:	It is the old story; live
horse and you'll eat grass.


Thomas Clement (Tommy) Douglas: May I suggest to the parliamentary assistant that when this legislation with regard to an agricultural bank is brought down it seems to me it should do
two things. It should make it possible for farmers across Canada to refinance their mortgages at lower rates of interest. Second, it should make available to farmers' cooperative organizations sums of money for the carrying on of consumers' and producers' cooperatives. Already in western Canada the .farmers are deeply interested not only in the sale of their own produce but also in the development of industries for the use of agricultural products. I know that some of the cooperatives already have made a thorough investigation into the cost of going into the manufacture of grain alcohol, synthetic rubber, plastics and so on. They have had correspondence and conferences with engineers and chemists in the United States who have already done a considerable amount of work along these lines. I know that even now some of these cooperatives are prepared to spend fairly large sums of money in opening up new industries in western Canada along the lines I have suggested, and either under an agricultural bank or under this measure-


Douglas Charles Abbott: The facilities of this bank
would be available to an enterprise such as my hon. friend has indicated.


Thomas Clement (Tommy) Douglas: That is fine,
but I am afraid $100,000,000 will not go very far when you begin to spread it out over all the enterprises of Canada.


Douglas Charles Abbott: It is still a lot of money,
or at least it used to be.


Thomas Clement (Tommy) Douglas: It is a good deal of money, but only a fraction of what we have spent already in building factories in Canada. We have spent some $800,000,000 putting up government factories, and when you come to spread $100,000,000 over the country it does not seem to me it will give us in Saskatchewan a very large share. I would hope that the cooperative organizations would be able to borrow considerable sums of money in order to develop industries that would be of assistance not only to western Canada generally but to the agricultural population in particular.
In closing, Mr. Speaker, all I wish to say is that during this war we have built up the Canadian economy from a national income of some five and a half billion dollars in 1939 to a national income of nearly nine billion dollars. It seems to me that after this war the test will be whether or not we are to go through a period of deflation and drop back to a national income of five or five and a half billion dollars. If we do that we shall go back to having a large percentage of our people once more unemployed and on relief, producing farm, commodities at depressed .prices. Or we can do
Industrial Development Bank

the other thing; we can harness the financial institutions of this country and use them for the twofold purpose of financing so as to provide full employment to produce the greatest amount of goods possible, and financing consumption to enable the people of Canada to have the necessary purchasing power to buy either the goods we produce ourselves or those goods we get in exchange for the goods which we sell to other countries.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Mr. J. GORDON ROSS (Moose Jaw):: Mr. Speaker, at six o'clock the hon. member for Weyburn (Mr. Douglas) had just taken his seat after spending a good many minutes in discussing a statement which had been made by the hon. member for Rosthem (Mr. Tucker). As I remember it, the statement of the hon. member for Rosthern was that he had read in the Vancouver Sun the platform of the Cooperative Commonwealth Federation party in British Columbia. The hon. member for Weyburn-


Thomas Clement (Tommy) Douglas: May we get this straight now.


An hon. MEMBER:: Sit down.


Thomas Clement (Tommy) Douglas: You cannot tell me to sit down. Mr. Speaker can tell me to sit down, but not you.


John Gordon Ross: Has the hon. gentleman asked you for the floor, Mr. Speaker?


Thomas Clement (Tommy) Douglas: Mr. Speaker. I rise to a point of order. While I was speaking you asked me to desist from discussing agriculture because it did not properly come within the scope of the bill, but you gave me permission to reply to the statement which had been made by the hon. member for Rosthem. Do we now understand that the subject is again open? If it is, will other members of this group and of other groups be allowed to continue the discussion?


Ian Alistair Mackenzie: Mr. Speaker, on the point of order, may I reiterate the point that I raised this afternoon? The hon. member for Weyburn was given an opportunity to discuss the question of the public ownership of land raised by the hon. member for Rosthern, but he then went along to discuss other points. I understood we were to be permitted to answer all the points raised by the hon. member with regard to public ownership.
(Mr. T. C. Douglas.]


Thomas Clement (Tommy) Douglas: Your Honour asked me to desist from reading into the record certain evidence which I wished to read, and I did so. Am I to understand now that this is to be opened for general discussion?


John Gordon Ross: On the point of older. I may say the hon. member was discussing the ownership of land, and he then went on to discuss many other matters.


Mr. REID:: What is the point of order?


Joseph-Arthur Bradette: The point of order was raised primarily this afternoon by the hon. member for Vancouver-Burrard (Mr. McGeer) in connection with what had been said by the hon. member for Weyburn (Mr. Douglas). I gave a ruling that matters concerning agriculture could be discussed under the present bill. I have not seen a copy of the transcript, but the hon. member will see my words in Hansard to-morrow, which will corroborate what I have just said. Later on, another point of order was raised by the hon. member for Rosthern (Mr. Tucker) to the effect that the letter being quoted by the hon. member for Weyburn was not being put on Hansard in toto. Then the hon. member for Weyburn put the letter on Hansard. It was then contended that the hon. member for Weyburn was getting away from the matters covered by the bill, that he was putting the whole C.C.F. platform before the house. That is the only objection I dealt with at the time, asking him to abstain from such a discussion. I do not think we can keep away from agriculture in discussing a bill of this nature because that is one of our primary industries.


Thomas Clement (Tommy) Douglas: Are we to understand that it will be permissible for hon. members of this group to reply?


Joseph-Arthur Bradette: I did not hear the question put by the hon. member for Weyburn.


Thomas Clement (Tommy) Douglas: Are we to understand that hon. members of this group will be allowed to discuss the matter contained in the Vancouver Sun and the whole question of the ownership of land?


Thomas Reid: It will be in order for us to correct it if it is wrong.


Ian Alistair Mackenzie: That is what they are trying to deny.


Thomas Clement (Tommy) Douglas: We are just trying to straighten out some of the lies in British Columbia.


Joseph-Arthur Bradette: Order. Members of the House of Commons must realize that a certain latitude should be granted in

Industrial Development Bank
discussing the second reading of this bill. At the same time, under the rules we should keep within the limits of the bill. I repeat that agriculture must necessarily come under the bill.


Angus MacInnis: On the point of order, we are now dealing with the industrial development bank bill, and the matter of agriculture was interjected into the debate by the hon. member for Rosthern. I understood to-day from the parliamentary assistant to the Minister of Finance who introduced the bill that there is to be another bill in connection with agriculture. That would be the time to discuss matters concerning agriculture. I should like to' draw Your Honour's attention particularly to the point that was made this afternoon. The hon. member for Weyburn desisted from discussing the point that had been raised the other evening. He stopped in the middle of a paragraph on the understanding that that was not a matter for discussion. However, if Your Honour wants to change that, it is all right with us, but we are not going to be stopped when the discussion comes up again.


Ian Alistair Mackenzie: On the point of order; the situation this afternoon was precise and clear.


Angus MacInnis: I stated it clearly.


Ian Alistair Mackenzie: I do not agree with my hon. friend. The undisputed statement of the hon. member for Rosthern was called into the question.


Thomas Clement (Tommy) Douglas: No.


Ian Alistair Mackenzie: My hon. friend was allowed thirty minutes to read the most puerile nonsense I have ever heard in my life, the platform of the C.C.F. in British Columbia. We have the right to reply to these animadversions of the hon. member for Weyburn; we have as much right as any dictatorial minority in this house.


Thomas Clement (Tommy) Douglas: That is the most puerile nonsense this house has heard in a long time.


John Gordon Ross: Apparently none of the C.C.F. party wants this matter discussed, and I do not blame them a bit for not wanting to have the land socialization policy of the C.C.F. discussed in this house. As I started to say a few moments ago, I have here a copy of the paper in question, and I am going to put on the record exactly what is in this paper. This is the Vancouver 100-87
Sun of Monday, April 19, 1943. The main
heading in large type is "C.C.F. adopts Policy of 'All-Out' Socialism."


Mr. HOMUTH:: They have changed it since then.


John Gordon Ross: The next heading is, "Seven Plank Platform," and then under that heading we find:
The C.C.F. policy for British Columbia, as outlined in a statement by the party convention, will:
1.	Institute social ownership of public utilities and develop power and industrial enterprises to the exclusion, wherever feasible, of private enterprise.
2.	Collectivize agriculture by the institution of methods of collective farming such as have featured Soviet Russia's system, and by the creation of a provincial government monopoly in the purchase, processing and wholesaling of farm products, both those grown here and those imported.
That is the quotation the hon. member for Rosthern was speaking of.


George Alexander Cruickshank: Does it mention votes for the Japs?


John Gordon Ross: I do not see anything of that.
The hon. member for Weyburn states that the quotation I have read was not supposed to be the policy of the C.C.F. in British Columbia.


Thomas Clement (Tommy) Douglas: The people at the convention say that it was not.


John Gordon Ross: Apparently it got into the papers some way or another, and there was no objection taken to any other plank that is in here.


Thomas Clement (Tommy) Douglas: It is a Liberal newspaper.


John Gordon Ross: The C.C.F. are noted throughout Canada for their ideas on socialization; they talk of it all the time, but they are finding that in the farming sections of Canada socialization of land does not go very well and they are trying to get away from it.


Mr. COLDWELL:: We never said it.


John Gordon Ross: You did when you were leader of the Independent Farmer Labour party in Saskatchewan.


Major James William Coldwell: I deny that.


John Gordon Ross: I was in Saskatchewan long before either of my hon. friends and I have followed politics a little more closely than they have over a long period of years.

Industrial Development Bank


Thomas Clement (Tommy) Douglas: And your hands are dirtier too.


John Gordon Ross: No, they are not.


Joseph-Arthur Bradette: I ask hon.
members to address the Chair even when they are making interruptions or asking questions. There must be a certain order and decorum maintained in the parliament of Canada.


John Gordon Ross: I ask the hon. member for Weyburn to withdraw the remark he just made about dirty hands.


Thomas Clement (Tommy) Douglas: If I have offended the susceptibilities of the hon. member I shall be glad to withdraw it.


John Gordon Ross: The real question is whether the C.C.F. party in Canada believe in the socialization of land and natural resources. That is the question they are trying to get away from.


Thomas Reid: They are afraid to face it.


John Gordon Ross: They have put out literature at different times, and one of their books, or at least one that they use is called "Social Planning in Canada". On page 283 of this book I find this:
Interest on capital and rent on land should be maintained in socialized production as a necessary accounting device, but they will no longer accrue to private individuals as income.
If that is not taking land, I should like to know what it is.


Mr. COLD  WELL@: Who is the author of that book?
Mr. ROSS (Moose Jaw)': My hon. friend knows better than I.
Mr. MACKENZIE (Vancouver Centre) Where the government was farmer-labour.


John Gordon Ross: At page 259 of the same file I find this:
There is no suggestion of wholesale expropriation of present farmers, but no more land would be handed over to private owners in the future.
The former leader of the C.C.F. party in this house, a man I knew well and thought, a great deal of, the Reverend J. S. Woodsworth, used to speak of socializing all things in this country, and he believed in that policy sincerely. He was discussing the subject in this house at one time. I was not here then, but I remember reading the report of his speech, which I find in Hansard of March 2, 1932, at page 730. While discussing the socialization of land he referred to the United Farmers of Saskatchewan. This is part of the farmers' group in Saskatchewan that joined my hon. 
friend's Independent-Labour-Farmer group. This is what Mr. Woodsworth had to say at
that time:
I find that the united farmers of that province

That was Saskatchewan.
-have adopted a provincial economy policy to the effect that .... all land and resources now" privately owned be nationalized as rapidly as opportunity will permit.
He went on to quote from a report presented at the last convention of the United Farmers of Saskatchewan, as follows:
A community free from the domination of irresponsible financial and economic power, in which all social means of production and distribution, including land, are socially owned and controlled either by voluntarily organized groups of producers and consumers .... or by public corporations responsible to the people's elected representatives.
In the same speech he went on to show that some of the Manitoba farmers were also in favour of socialization of farm land, and in the same speech he quoted from the minutes of the last annual convention of the United Farmers of Manitoba held in Brandon in November, 1931, as follows:
.... we recognize that social ownership and cooperative production, for use, is the only sound economic system.
Resolved that with a view to security of land tenure this annual convention of the United Farmers of Manitoba adopt the principle of nationalization of land.
The other night in this house there was a bit of an argument between the hon. member for Rosetown-Biggar (Mr. Coldwell) and the Minister of National War Services (Mr. LaFleche), during which the member for Rosetown-Biggar rose to points of order, and' fiinally, a day or so later he rose in his place in the house on the orders of the day and spoke to a question of privilege. That was on February 28, 1944, as reported in Hansard at page 912. After discussing whether national socialism in Canada was the same thing as national socialism in other parts of the world, which the hon. member for Rosetown-Biggar denied, he said:
Mr. Speaker, I contend that we are at war with national socialism in Germany, and to endeavour to attack any party in this country as being a national socialist movement is to accuse that party of disloyalty to this country and falsely to imply a position which is not borne out by the facts. May I say that this movement-
I take it that he means the C.C.F., and' the hon. member nods his head.
May I say that this movement in its philosophy and outlook is exactly the same as the labour and socialist parties of Great Britain, Australia, New Zealand and other countries.

Industrial Development Bank


Mr. MacNICOL:: Nothing whatever like Great Britain's.


John Gordon Ross: I do not think the hon. member for Rosetown-Biggar will deny that he said that they believed in the same thing.


Major James William Coldwell: The same philosophy.


John Gordon Ross: Let us take a look at what they have done in Great Britain. Here is an extract from a resolution passed by the British Trades Union Congress at their 74th meeting in September, 1942, dealing with post-war planning in Britain:
Congress demands that within such a policy (of post-war reconstruction) provision shall be made for:
(a)	The compulsory acquisition of land by the nation;
(b)	The national ownership and control of all the means of production and distribution.
Later, on December 6, 1943, the Canadian Press carried this cable:
Acquisition by the state of all agricultural land in Britain as rapily as possible, with the state to provide for its management, was asked by the Labour party in a statement of policy for the future use of land and development of agriculture.


Joseph-Arthur Bradette: Order. If I may be allowed, Beauchesne's Parliamentary Rules and Forms, Third Edition, citation 656, refers to matters that can properly be discussed on the second reading of a bill. I know that in the discussion of a bill of this kind considerable latitude must be allowed, but this afternoon I ruled against the hon. member for Weyburn for putting forward the policies of the C.C.F. as contained in a pamphlet. I must also ask the hon. member for Moose Jaw to remain within the orbit of the discussion, which cannot include political party platforms.


Ian Alistair Mackenzie: May I suggest to you, sir, that the very essence of this measure is a combination of public support and government support of private enterprise, and I suggest that the hon. member for Moose Jaw has every right to discuss on the second reading of the bill all the implications of public ownership and private enterprise.


Angus MacInnis: This just goes to show where a ruling such as was made gets this house. We are supposed to be discussing the industrial development bank of Canada, but instead of discussing it my hon. friend is discussing a much more important programme to him, the programme of the C.C.F, and things of that sort.
100-87i


Ian Alistair Mackenzie: I think the hon. member for Moose Jaw should be permitted to make a complete reply to the animadversions of the hon. member for Weyburn.


Major James William Coldwell: Then we also in this group reserve our right to make a complete reply to the hon. member for Moose Jaw.


Joseph-Arthur Bradette: The question just raisedi shows the difficulties, but I have made my decision and I ask hon. members to abide by it. On the second reading of the bill hon. members should' not discuss the merits or dements of different parties.


John Gordon Ross: I have been stopped in the middle, as was the hon. member for Weyburn this afternoon. I have not even finished my last quotation. I am discussing one point, namely the nationalization or socialization of land. My hon. friend covered that completely.


Thomas Clement (Tommy) Douglas: I did not; I was still on it.


Ian Alistair Mackenzie: Yes, he did.


Thomas Reid: All we ask is fairness.


John Gordon Ross: I mentioned that I had an extract from a resolution unanimously adopted by the labour party of Great Britain ,in May, 1942. It is as follows:
The conference therefore calls for the national ownership of agricultural land to enable its full utliziation by the development of a planned system of agricultural production.
Now, this whole trouble started because my hon. friend wants to get away from the fact that they believe in the socialization of land.


Ian Alistair Mackenzie: The double shuffle.


John Gordon Ross: There are Teasons for that, too.


Thomas Clement (Tommy) Douglas: Just keep to the facts.


John Gordon Ross: There are reasons for that, too; and one particular reason is that the hon. member for Weyburn is expecting an election in Saskatchewan.


Major James William Coldwell: He is not the only one.


John Gordon Ross: He hates to have anything said about their past policy in regard to land. These hon. gentlemen have endeavoured to form a political party in which they have taken together labour and farmers.


An hon. MEMBER:: It has done pretty well.
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John Gordon Ross: And they say they have done pretty well. They may have done pretty well for labour, but they have not done pretty well for the farmer.


John Ritchie MacNicol: And they have done less for labour.


John Gordon Ross: I do not know what they have done for labour, if anything. But I know that what the farmer wants and what the labourer wants are not the same thing, at all.


An hon. MEMBER:: Are they not?


John Gordon Ross: The farmer is a capitalist.


Major James William Coldwell: What do you try to represent?


John Gordon Ross: I try to represent both farmer and labourer, because they are all Canadian citizens.


Gordon Graydon: You must be Mr. Look-ing-Both-Ways.


John Gordon Ross: No, 1 am not. I am not trying to fool both of them, like my hon. friends are.


Thomas Clement (Tommy) Douglas: You are trying, but not succeeding.


John Gordon Ross: I am not trying. And I want to tell my hon. friend another thing: he has a great deal of ambition. That is a laudable thing, I will admit. I have been in the house for a long time, and when I speak now I speak my mind, not thinking at all of where the chips will fly, politically. I want to tell my hon. friend it is almost twenty years ago that I started into politics, running for this House of Commons.


Karl Kenneth Homuth: You are still just an infant at it.


John Gordon Ross: I have not cared a little whether I ever come in here again, and I do not care now. If my constituents, or the Liberal party in my constituency wish to select another candidate for the coming election, I will do my best to elect him. On the other hand, if the Liberal party in my constituency think I can do better in the election than anyone else, then I am willing to run again. But if I were to consult my own feelings in the matter I would be glad to get out of the game right now.


An hon. MEMBER:: What has this to do with the bill?


John Gordon Ross: I have no ambition; I am not looking for anything, like my
(Mr. J. G. Ross.]
hon. friend. I intend to say ini this house what I believe to be right, and if I run again my constituents will be willing to make their decision on what I have to say. I am not trying [DOT]to run around and say that I do not believe in something I said I believed in ten years ago. I am still the same as when I came to this House of Commons.


Angus MacInnis: You have not learned
anything.


John Gordon Ross: I have learned
what a lot of demagogues there are in parts of this country. I have seen the type of politics now being played in Canada by my hon. friends, and I thank God the Liberal party never played politics in that way.


Thomas Clement (Tommy) Douglas: This is funnier than you realize.


John Gordon Ross: The hon. member is quite humorous himself. Then, the hon. member for Vancouver South-


Howard Charles Green: Be careful.


John Gordon Ross: -for Vancouver East (Mr. Maclnnis) I should say, had something to say at one time at a convention at Regina. In the Regina manifesto of that time, namely 1933, they agreed that all natural resources and distribution-and everything else -should be socialized. But there were farmers in that meeting who did not agree with that. My hon. friend made a speech there, at that time. This was on July 20, 1933, and what he had to say then shows that the farmer and labour men in the C.C.F. party were not in agreement at that time. This is what he says:
If the farmer wants a cooperative commonwealth in which everything is socialized but himself, he better have a cooperative commonwealth of his own.
I agree with him one hundred per cent on that.


Angus MacInnis: I should like to ask my hon. friend where he got that quotation.


An hon. MEMBER:: You cannot take it.


Angus MacInnis: Where did he get the
quotation?


John Gordon Ross: It was reported in the Regina Leader-Post of July 20, 1933.


Angus MacInnis: That is not an authority.


John Gordon Ross: That was published in Regina at that time. My hon. friend seems to think every newspaper misquotes. It is a terrible thing when you get to that state of mind.
Then, in connection with this matter of public, private or social ownership there is a new book now out.

Industrial Development Bank


Karl Kenneth Homuth: How much does that
cost?


John Gordon Ross: One dollar each.


John Ritchie MacNicol: Too much.


John Gordon Ross: It is called
"Make This Your Canada." In this book there is an appendix.


John Ritchie MacNicol: The appendix was not
taken out.


John Gordon Ross: It is part of the Regina manifesto of 1933.


Ian Alistair Mackenzie: Take out the appendix.


Gordon Graydon: Is that an acute appendix?


John Gordon Ross: At page 199 we find this:
When private profit is the main stimulus to economic effort, our society oscillates between periods of feverish prosperity in which the main benefits go to speculators and profiteers, and of catastrophic depression, in which the common man's normal state of insecurity and hardship is accentuated. We believe that these evils can be removed only in a planned and socialized economy in which our natural resources and the principal means of production and distribution are owned, controlled and operated by the people.
In that he means by a government of the C.C.F. party.


Ian Alistair Mackenzie: Socialization of land.


John Gordon Ross: And in the last few lines of the appendix we find this:
No C.C.F. government will rest content until it has eradicated capitalism and put into operation the full programme of socialized planning which will lead to the establishment in Canada of the Cooperative Commonwealth.
I said a minute ago that I am a farmer. All farmers are capitalists. And my hon. friends say they will eradicate all capitalists. Thereby they will eradicate all farmers; I am sure of that.
They became excited when the hon. member for Rosthern began to speak about this matter the other day. But they fought an election campaign in Saskatchewan in 1934 when, I believe, the hon. member for Rose-town-Biggar (Mr. Coldwell) predicted, as he is predicting to-day, that his party would be the government of the province, with forty-two seats-just like that. Well, he did not get in, and neither did his party. Then they tried it again in 1938. They were going to have forty-two seats again. But he did not get in, and neither did his party.


James Lester Douglas: We tried last August, and did pretty well.


John Gordon Ross: The hon. member is taking over, and he is going to try. No doubt before the election comes he will predict the number of seats they will take. As a matter of fact, according to them, it is in the bag. Let me tell my hon. friend that he will never be premier of Saskatchewan. The people of Saskatchewan have far too much common sense ever to listen to a policy of the kind which my hon. friend is advocating. The people of that province do not believe in the socialization of land, whereas the C.C.F. does, and they know it, and my hon. friends will never get anywhere with their socialization in Canada, especially in Saskatchewan.


Thomas Clement (Tommy) Douglas: You ought to have mentioned the bank at least once.


Mr. A. J. BROOKS (Royal):: It is not my intention to-night to discuss the C.C.F. policy, nor do I intend to take up much time in the consideration of this bill. In the few days that I have been in the house I have not had an opportunity of reading the bill and of looking into each of its provisions. However, I was quite intrigued with the preamble and particularly the clause which states that it is desirable to establish an industrial development bank to promote the economic welfare of Canada.
In discussing this bill to-night I hope I shall be pardoned if I dwell more particularly on that part of Canada from which I come, the maritime provinces. If industrial development is needed anywhere in this dominion I feel that it is and has been needed in the little provinces down by . the sea. We have been more or less neglected for a good many years,
The hon. member for Lake Centre (Mr. Diefenbaker) this afternoon discussed the matter of our war economy and showed how the maritime provinces and other parts of Canada have been neglected while in the central provinces most of the war contracts have been filled. That is something which we cannot change at the present time, nor would it be well for us to undertake to do so at this late date. However, our hope is that this condition, which has existed and which exists at the present time, will not continue in the future.
I am going to discuss this bill from the point of view of our post-war economy, and in doing so I would call attention to the prewar economy of Canada. There is no doubt that after the war is over we shall have to go back to a certain degree to conditions such as they were in 1938, the year before the war. At that time the two provinces of Ontario and

Industrial Development Bank
Quebec had over eighty per cent of the industry in the dominion. There was $2,696,000,000 invested in the manufacturing industry in those provinces. We are told that this was due to geography, that it was due to the great water-power resources in these two great provinces and to the nearness to large markets in Canada and the United States. In British Columbia there was 6.8 per cent of the industry of Canada; in Manitoba, 3-9 per cent; in the provinces of New Brunswick, Nova Scotia, Prince Edward Island, Saskatchewan and Alberta there was less than 9 per cent of all the industry in the whole dominion; and we in the maritime provinces had less than 4 per cent. I call attention to this fact and express the hope that this condition will not prevail in the years to come.
What has been the result of this unbalanced economy in our provinces? If the house will bear with me for a few minutes, I would like to show from the census report of 1931 what really has been the result of this unbalanced economy as far as our provinces are concerned, and I think I can best do this by comparing the population of different constituencies in the maritime provinces fifty years ago with the population in the year 1931, the latest census report I could obtain at this time; there is not much difference in 1941:
Prince Edward Island:
1881	1931
Kings	
26,433	19,147Prince	
34,347	31,500Queens	
48,111	37,391
Next I turn to the province of Nova Scotia. I am not going to take all the counties, but what was true in some was true in most:
1881	1931
Annapolis	
20,598	16,297Antigonish	
18,090	10,073
Take New Brunswick, my own province, and take first my own county of Kings:
1881	1931
Kings	
25,617	19,807Queens	
14,017	11,219
Queens is also a part of my own constituency. I could go on to show the condition in the counties of Albert, St. John, Victoria, Kent and most of the other counties in New Brunswick and in the other maritime provinces, which have all suffered the same fate. What is the reason? I contend that the reason has been the unbalanced economy we have had in Canada, and I think I can truthfully say the unfair treatment which we in the maritime provinces have received. Where [Ur. Brooks.]
have our men been going? Any member from the maritime provinces will agree with me when I say that there are more of our people in the New England states than there are in our provinces at the present time. Take the cities of Saint John and Halifax. I am sure we all listened with pride yesterday to the Minister of National Defence for Naval Services (Mr. Macdonald) when he told us of the splendid exploits of our navy during this great war. He could also have spoken of the work that was done during the last war by the British navy and the small navy that we had developed. But I should like to ask hon. members what parts of Canada, what seaports of this great dominion, have played the most important part in Canada's war effort. They will agree with me that it has been the old cities of Saint John and Halifax. I wonder what would have been the result in this war, as far as providing Britain with supplies is concerned, if we had not had those open ports of Saint John and Halifax to supply the life-line to Great Britain. Have they increased in population? Have they increased in industries to the same extent as have other parts of Canada? Anyone who looks at the record of our census of fifty years ago will see that the city of Saint John had almost the same population then as it has to-day. It is true that the city of Halifax has had some considerable increase in population during these war years, but neither city has increased in any proportion like other industrial cities of Canada. Are those cities which have played such a brilliant part in this great war to go back to the same conditions after the war is over? Are they to be, as Kipling said of Tommy Atkins, "heroes" while war is on, but "forgotten by the people they served" after war is over. I make this appeal, Mr. Speaker, because I believe that if any section deserves, as this bill states, to have promoted the economic welfare of the country, it is the section of Canada from which I come.	<
Take, for instance, our young men. Someone made an appeal this afternoon for the young men who are returning from the War. What are our young men to return to in the maritime provinces? Are they to return home and remain there for but a short time and then have to go across the border or to western Canada or to some other place away from their homes because there has been no proper economy established in our own provinces? I do not know whether this bill will satisfy the purpose. Frankly I do not think it will. It speaks of a hundred million dollars. Why, that is a mere pittance as far

Industrial Development Bank
as the great necessities in this dominion are concerned. I do not know that our own banks cannot supply the great need. I have a great respect for the banking institutions of the Dominion of Canada. They are considered and have proved to be one of the finest banking systems to be found anywhere in the world. If this bill will help I am all for it. It has been characterized as a feeble step. I trust that it is a feeble step in the right direction. I hope that if it will bring any economic security to Canada, we in the maritime provinces will receive a fair and just share of that economy, something to which we have been entitled for many years and which is many years overdue.


Gerald Grattan McGeer: Mr. Speaker, in rising to-night to address a few remarks to the second reading of this bill I am going to take the privilege of drawing to your attention the fact that I believe this is the most important measure that has been introduced in the House of Commons since the introduction of the Bank of Canada bill in 1934, with the possible exception of the introduction of the bill in 1938 under which the Bank of Canada became a publicly owned national institution of Canada.
When that bill was introduced I felt and said that it was one of the greatest reforms that had ever gone through parliament since the days of the Canadian federation. The bill that we are now discussing is the first step in laying the foundations for the financing of the peace that is yet to be won. Upon the action of this parliament, the course that it follows and defines and the policies that it develops with regard to financing the post-war period, will depend in no small measure whether, after victory in war, we are to have victory in peace.
In introducing the bill the distinguished parliamentary assistant to the Minister of Finance (Mr. Abbott) indicated that it was part of a programme required to maintain employment and national income after the war at a higher level. It is to finance such industrial activity as will support and sustain a national income and full employment that this bill is designed to help. The other day in the house I drew attention to a warning by the governor of the Bank of Canada to the government, to parliament, and, I take it, to the people of Canada, of the seriousness of the problem that we face in maintaining high employment and a high level of national income in the future. Let me repeat this statement which is found at page 12 of his annual report:
After the war, some of those who are now employed will voluntarily withdraw from the working force, and the armed services may be maintained at a level considerably above their pre-war strength. It seems likely, however, that at least 4,700,000 workers will be available for employment in civilian jobs, or at least
1,500,000	more than the number employed in that sector of the economy at the present time. A working force of this size, at present rates of efficiency, will be able to produce a vastly greater volume of civilian goods and services than Canada has ever known before . . . and capital development will be necessary if this output is going to be fully absorbed and high employment maintained.
A vastly increased volume of consumption will also be required. Mr. Towers points out that the key to this problem, as to many others, lies chiefly in the maintenance of a high level of employment and income.
My first query on this legislation is: Is that the kind of job that we want to associate with the Bank of Canada? Let me draw this to the attention of the house: The new industrial bank proposed by this legislation is a part of the Bank of Canada. In my opinion it is stretching rather a long bow even to say it is a subsidiary corporation of the Bank of Canada. The Bank of Canada supplies the capital for the corporation, and exactly the same governor and board of directors are in control of both banks. Governor Towers is to be the head of this industrial development bank. I question the' wisdom of having this kind of work associated with the Bank of Canada because of the special duties and responsibilities which the Bank of Canada has to fulfil. Let me draw attention. to the Macmillan report upon which our Bank of Canada was founded. At page 62 of that report these questions were asked:
To what extent and through what organization should the volume of credit and of currency be regulated?
That means the medium of exchange for every person, every corporation and every activity in the whole Dominion of Canada:
On what body should lie the priniary responsibility for maintaining the external stability of the country's currency?
To what institution may the government of the day most suitably turn for informed and impartial advice on matters of financial policy?
The answer given was a central bank; and the answer given by this parliament, by the Liberal party and the Liberal government, was a nationally owned central bank, which is our Bank of Canada to-day. Now let me give the house a little further insight into what the Macmillian commission defined as the duties and responsibilities of the Bank of Canada:
Industrial Development Bank

A central bank is at the same time an instrument and a force. As an instrument it is the means by which the state-which must necessarily retain ultimate sovereignty in matters affecting the currency-can give effect to the national policy. As a force the central bank has certain powers in its keeping which can be used to achieve the ends of national policy. Clearly these powers are of differing efficacy according to the aim of the policy. A central bank cannot be expected to influence directly the price of a particular commodity. It is even not desirable that a central bank should be specifically charged with any responsibility for the general price level of a country. There are many factors, of varying nature, which combine to influence that level, and a central bank, working as it does purely in the monetary sphere, cannot be expected to have complete control, though it may well have a measure of influence. If it attempted to exercise any drastic control it would have to wield powers far beyond those which any body other than the sovereign authority would be entitled to exercise. It is manifest, however, that the regulation of the volume of credit is an important factor in influencing the level of economic activity and therefore of prices and this is one of the cardinal tasks of a central bank. In the absence of a central bank it is a task the fulfilment of which is either left to chance, or performed inadequately by other agencies. The regulation of the quantity of credit is effected by the action of the central bank on the reserves of the commercial banks. By increasing or diminishing these reserves, or by increasing the cost of securing them, there is set in motion a process of expansion or contraction through the ordinary channels of banking. A central bank is thus not a competitor with the commercial banks. Its functions are regulatory and indirect.
Do hon. members realize how far away from that sound appreciation of the work and responsibilities of a central bank you go when you set up a bank, right within the bosom of the Bank of Canada, and. use Bank of Canada money, Bank of Canada prestige and Bank of Canada authority to go into competition with the commercial banks which you are supposed to regulate through your national central bank? So that there may be no dioubt about that, let me quote what was said by the hon. member for St. Antoine-Westmount (Mr. Abbott) in moving the second reading of the bill. I refer to page 1059 of Hansard for March 2, 1944:
As to the 'bill itself, it is proposed that the bank will be a subsidiary corporation of the Bank of Canada having a board of fifteen directors composed of the members of the board of directors and the assistant deputy governor of the Bank of Canada, with the governor of the Bank of Canada as president. The capital stock of the bank is to be $25 millions all to be subscribed by the Bank of Canada, with $10 millions or more to be paid up at the time this act comes into effect.
I cannot believe that those responsible for this legislation have ever considered how completely this change in banking policy disrupts [Mr. McGeer.J
the whole policy, the independence and the power of the Bank of Canada itself. Surely that must be a question with which every member of the government and every member of this house is deeply concerned. Can anyone conceive of the governor of the Bank of Canada regulating the banks, stabilizing the price level as far as he can by the regulation of the volume of credit, and then going into the business of financing Canadian industry, in competition with the banks that he is supposed to control and regulate? That is something I hope will be given full consideration in the banking and commerce committee when this bill gets there.
The objectives of this bill are excellent; but is this the best way, the sound way to achieve them? I do not think it is. W^e have an example across the boundary line to the south of us in the Reconstruction Finance Corporation, which operates not as a bank, not as part of the federal reserve system of the United States, but as an independent agency of gov- ' emment doing a job not in creating capital and developing industry alone but in meeting, in a particular and general way as an agency of the government of the United States, the economic needs of the whole nation. Yes, I will recommend to the banking and commerce committee, when this bill is under consideration, that it be abandoned and that a reconstruction finance corporation or an institution along similar lines be substituted in its place.
The next point I wish to make is this: Does this bill conform to Liberal policy? To us on this side of the house that should be a grave and proper question for consideration, because we have great reason to be proud of the Liberal financial policy so far as it has gone. We have good reason to want to preserve and protect it. Let me recall it to you, Mr. Speaker, as it was laid down in this house in the days when the Liberal party was in opposition and when the Bank of Canada bill was introduced by the Conservative party. On June 21, 1934, the present Minister of National Defence (Mr. Ralston), who was then the recognized authority of the Liberal party in the realm of finance, denounced the Bank of Canada as created by the Bennett government on the ground that it abrogated the sovereign rights of the dominion. In his opposition to the bill he said:
The control of credit and currency is the biggest and most important public utility in the economic activities of the Dominion of Canada. I submit, Mr. Chairman, that the Prime Minister and those who have drafted the Bank of Canada bill have forgotten for the moment that after all this (the issue and control of national currency and national credit) is a state function.

Industrial Development Bank
And again:
I repeat that this (the Bank of Canada) is a public utility of the greatest magnitude and importance and the citizens of Canada should not relinquish control of its administration to any group of private citizens.
Our distinguished Prime Minister (Mr. Mackenzie King) who was then leader of the [DOT] opposition, supported the attitude of the present Minister of National Defence with this statement on June 27, 1934, as reported at page 4362 of Hansard of that date:
The Liberal party believes that credit is a public matter, not of interest to bankers only, but of direct concern to the average citizen.
It stands for the immediate establishment of a properly constituted national central bank, to perform the functions of rediscount, and the control of currency issue, considered in- terms of public need. A central bank if necessary to determine the supply of currency in relation to the domestic, social and industrial requirements of the Canadian people; and also to deal with the problems of international commerce and exchange.
I desire to direct special attention to these words: "A properly constituted national central bank."
Also: To perform the functions of rediscount, and the control of currency issue, considered in terms of public need.
Note "in terms of public need" not possible private gain.	,
It will be said that because the Bank of Canada owns all the stock of the industrial development bank, it is publicly owned. So far as that goes that is all right. But when you come to the stock in trade which this bank must have to operate, when you come to its capital finance, you find something very different. I fear that with this bill we are going back to where we were in 1936 when we said we would only make fifty-one per cent of the stock publicly owned and forty-nine per cent privately owned. I opposed that bill quite bitterly because I believed that a partly privately owned and partly publicly owned bank was worse than a privately owned bank.
How are you going to finance this bank? The Bank of Canada is going to put $10,- -000,000, possibly another $15,000,000, of Bank of Canada cash and then you are going to sell bonds.


Douglas Charles Abbott: Perhaps to the Bank of Canada.


Gerald Grattan McGeer: My hon. friend from
Montreal says "perhaps". There is no "perhaps" about this proposition as far as I am concerned. Let us assume that we exercise the power that is there and sell bonds in the open market. We then change this industrial development bank from a publicly owned
national utility into a partly publicly owned and partly privately owned investment corporation. Mr. Towers cannot function with his board of directors, using borrowed money from bondholders which is not guaranteed by the government, unless he respects the trust that that obligation imposes upon him to protect that private capital. Yes, we are turning the clock back, not forward.
Now let me come to those words "in terms of public need, not possible private gain." When we issue Bank of Canada stock or Bank of Canada cash to pay for the stock it can be said that we give to the industrial development bank about the cheapest kind of money any bank can get. But it is not quite as cheap as the kind of money the chartered banks get. When we give, as we do under our law, the power to the chartered banks to multiply their cash reserves by ten, we give them the power to create lending capital finance in their own bookkeeping system. Let me ask: Why can we not give to this national utility the cheapest kind of money available, money that has proven its value because our bank deposit money has financed us through this war? If you want to issue currency and credit in terms of public need, not private gain, in order to help small industry, surely you want to help them at the lowest possible rate of interest and the least cost. When you give this corporation the power to borrow in the open market you must intend that that corporation is going to borrow.
I contend that on two distinct grounds this bill violates Liberal policy. First, it is not giving money for use in this development bank in terms of public need, not private gain. Through the whole picture of the sale of bonds to raise the capital finance of this corporation appears the principle of private gain. What price are you going to get for industrial development bank bonds not guaranteed by the government? Surely not a better price than government bonds themselves. Possibly considerably more because there is another factor that cannot be overlooked. You are going to lend money only on things that nobody else will touch. I think this a weird conception of the kind of expansion and extension that we should add to the Bank of Canada.
I come now to another feature. If, sir, you *will read Mr. Towers' annual report for 1943 I think you will agree with me that he correctly envisages the situation that we all know very well. After the last war we went through the post-war boom and the postwar depression, and what did we find? After the last war we had an accumulation of


Mr. McIVOR:: And our rural mail carriers.


Gerald Grattan McGeer: Yes. We must go through our whole social structure giving the people the means of living as they should live and an appreciation of the fact that buying power helps to keep Canadian industry on the move and Canada a going concern moving forward.
There is the problem. Of course it is large, but it is nothing as compared with the problem we faced in 1939, and met with such magnificent success. Canadians have good reason to be proud of the magnificent war effort they have put forward under the leadership of this government. Their pride is not an idle thing. Properly appreciated, it gives to them the assurance that they can go forward into the peace, gleaning from their own nation's resources and their own industrial power a wealth they never dreamed they possessed. You will never get it out of St. James street or Bay street. You must get it out of this parliament, and this is the start.
There is just one other question I offer for the consideration of the house and of the banking and commerce committee. This bank could never succeed. In the first place, the only kind of loan it is going to make is one that nobody else will touch.


Douglas Charles Abbott: Read section 15.


Gerald Grattan McGeer: Well, just let me quote my hon. friend, and see if my statement is any broader than his. Here is what he says, as reported at page 1059 of Hansard:
This industrial development must be financed. Undoubtedly the cash resources of industry, including refundable taxes, have risen in recent years and will be used to finance part of the expenditures I have just mentioned. But industry's own resources may be far short of the total amount of financing required. It is therefore in the national interest to ensure that such additional financing as may he necessary and desirable will be available to industrial enterprises.
And again at page 1060 the parliamentary assistant has this to say:
I want to make it clear that this bank is intended to supplement the activities of existing lending agencies rather than to displace them. If the credit requirements of a business are of such a nature that they can he obtained from a chartered bank or in the investment market, rvell and good.
. But if they cannot be obtained there, then the industrial development bank is supposed to come into the breach.
Can we imagine the governor of the Bank of Canada meeting a supplicant who has this to say, "I went to the Bank of Montreal, but
they turned me down. I went to all the other chartered banks, and they turned me down.
I went to all the investment brokers and they turned me down."


Douglas Charles Abbott: Too small.


Gerald Grattan McGeer: Well, all right-"I went
to the shark loan companies and they turned me down"-because nothing is too small for them. Why, do hon. members know that the Canadian Bank of Commerce makes personal loans to anyone who will come in and borrow from them to-day?


Douglas Charles Abbott: For ten years?


Gerald Grattan McGeer: For any length of time
they will take them.


Douglas Charles Abbott: No, no.


Gerald Grattan McGeer: My hon. friend says no.
Well, do not make any mistake about it, that if you can get your money from any other place you are not supposed to go to this bank. That is abundantly clear in the sections of the bill.


Douglas Charles Abbott: At reasonable rates.


Gerald Grattan McGeer: At reasonable rates, yes. But on what grounds do you assume that, with the enormous volume of currency, credit and capital available, if you have a sane proposition anyone cannot get reasonable rates? And if that is so, are those chartered banks entitled to hold their charters any longer?
Let me carry a little farther my explanation of what the Canadian Bank of Commerce is doing. My hon. friend says that it does not lend small amounts for ten years?


Douglas Charles Abbott: No.


Gerald Grattan McGeer: I happen to know of some small accounts that have been there longer than that.


Douglas Charles Abbott: That may be, but I know of no Canadian bank which lends money on a ten-year loan. They may be stuck for ten years, but they do not lend it for ten years.


Gerald Grattan McGeer: That may be true. I do not believe Mr. Towers is outside of that category. But how could Mr. Towers lend where all the others refuse, even on a longterm proposition? What kind of example would he set? Mr. Towers is a banker, an orthodox banker.


An hon. MEMBER:: A good banker.


Gerald Grattan McGeer: A good banker; that may be true. And if that is true, from my understanding of the term "good banker" then I say, "Heaven help the industrial development of the Dominion of Canada."
Industrial Development Bank

There is one other feature. To this bank we issue Bank of Canada bills, and we also issue bonds. But let us for the moment assume that we do not issue bonds, and that we float the bank, as was suggested by the hon. member who introduced second reading, by the issue of $100,000,000 of Bank of Canada cash. That $100,000,000 is going to be spent; it will find its way into the chartered banks and, under our law, they will have power to expand that $100,000,000 of Bank of Canada cash into $2,000,000,000 of bank deposits. Here we have what the Minister of Finance (Mr. Ilsley) has repudiated as inflation of the kind that would blow the lid off. Either you are going to move against Liberal principles and against Liberal policy, or you are going to move into a dangerous condition of inflation.
I think it is well that this bill should go to the committee on banking and commerce. What I am saying to-night is an indication of the stand I propose to take when the bill is before that committee. From the very beginning we should have with us the report of the Bank of Canada for 1943, and I do not think the committee should undertake to deal finally with any measure of this kind until all the financial measures of the government are before the banking and commerce committee, so that we may come back to parliament with a full and complete report.
Let me, in closing, say that this is a year of great decisions. No group in any parliament of any nation has a greater opportunity to do something really worth while than the men who are privileged to sit, let us hope, on the eve of a united nations victory, in the parliament of Canada.


Mr. E. E. PERLEY (Qu'Appelle):: Mr. Speaker, when the house met at eight o'clock the hon. member for Moose Jaw (Mr. Ross) took the floor.


An hon. MEMBER:: We are getting back to Saskatchewan.


Ernest Edward Perley: sideration will be given to that. When these men return I do not think they should have to get down on their kness for a permit to establish themselves in any line of business, in storekeeping or anything else. Many of the men will go back to businesses with which they had some connection in western Canada before they went to the war. Due consideration should be given to these men to reestablish themselves. If necessary, small companies should be organized and receive assistance.
Section 5 of the bill sets out who the officers shall be. I believe we should have more detail. Of course, we may get that information in committee. The governor of the Bank of Canada, the deputy governor and his assistant will be directors. I believe we should know the other directors before the bill goes to the committee. I should like to know if a shareholder or a director of any of those companies can be on the board of directors of this bank. That is something that has not been answered and I think it should be.
I would suggest further that some pressure should be brought to bear on the chartered banks to induce them to fulfil their duty with regard to financing small industries and producers in the west, if you like. That is important.
In closing, may I say I do not think it is necessary to hold up the measure at this time. There has been a general discussion. Many points have been brought forward. I happen to be a member of the banking and commerce committee to which this bill will be sent. I look forward to a complete statement being made when it comes before that committee, much more so than we have had in this house, with respect to how the whole plan is to work out, who will be responsible and who will be on the board of directors, other than the three names given in the bill. That is important. I hope that agriculture will have some representation on the board. I am waiting with interest to get more detail on the bill when it comes before the committee.


Angus MacInnis: I did not anticipate when this measure was brought before the house that it would lead to so long a debate as we have had. I thought at the time that when the leaders of the various groups had indicated their attitude toward the bill it could then go to the banking and commerce committee and that we could dissect it there and get all the information required. However, I am not sorry that the debate has taken place and continued as it has. Some of what we have heard has been very informative, and, some not at all relative.

I agree with hon. member for Van-couver-Burrard (Mr. McGeer) that the bill is an exceedingly important one. It is
important because credit and finance will of necessity be an important part of our peace economy, as it has been an important part of cur war economy. But the bill is important for another reason. It is the first of the measures mentioned in the speech from the throne that has been brought to the floor of the house in a concrete form. If the bill as it now stands is any criterion of what the other measures mentioned in the speech from the throne are to be like, then I think my first impression of the speech was correct, that the proposals in it were put there for windowdressing.
I think several things should be clear to members of the house by this time. We have gone through two periods that should have, if we are capable of learning or capable of understanding, taught us something. Since the last war we had the period from 1929 to 1939 which can be described as the depression of plenty, and we have had nearly five years of war. Despite the fact that about one and three-quarter millions of our most productive workers are taken out of production, the Canadian people have lived better during the past five years than they have in any other time in history. Surely those facts should make us think and think to some purpose. If the period from 1929 to 1939 has taught us anything it is that so-called free enterprise has demonstrated its inability to feed, clothe, house and educate the people of this country at anything like a decent standard. On the other hand, five years of war have demonstrated that we can produce and distribute as long as we have three things:	material,
machines and labour, and, of course, the will to use them. Purchasing power accrues from the operation of these factors, and the government of the day should be prepared to give us something at this time that would hold out to the people of Canada more hope than they can get out of this bill.
During this debate we have heard- a good deal about socialism and- free enterprise, but I believe one thing is definitely accepted today: that is, that no one, I do not care whether he is an employer, a business man, a banker or anyone else, expects private enterprise to give full employment and a high standard of living when this war is over. Every statement I have seen so far says, in effect: leave it to free enterprise, and to the extent that free enterprise cannot provide full employment, then the government will step in. That is another way of saying, leave the cream to the skim milk. The only question, there-

Industrial Development Bank
fore, that faces us now is when and to what extent the government should intervene; and Let me say again that if this measure is any criterion of what we may expect from the rest of the government's programme, the speech from the throne was indeed a barren one.
When the hon. member for Lake Centre (Mr. Dicfenbaker) spoke this afternoon he said that the bill would not give assistance to small business, though that is said to be one of its purposes. I am' afraid it is going to be extremely difficult to contrive any sort of scheme that will enable small business to continue side by side with monopoly and big business. In a competitive system the strong always survive and the weak always go under. That is the law of competition, and as long as we accept competition we must accept its law. The process that has gone on between big business and small business, if you like, the process of the elimination of small business, has been steady and relentless since the time the handicraft workers were deprived of their livelihood and driven into the factories by the new power machines. The same process is still going on to-day.
I should like to give a few examples to show what has happened in our own time, during the life time of everyone here. I will begin with the chartered banks. In 1911 we had twenty-eight chartered banks in Canada with total assets of $1,390,000,000. In 1942 we had ten banks, but with total assets of $4,008,000,000. Since 1911 the number of chartered banks has decreased by eighteen, but the assets of the ten remaining banks are almost four times greater than the assets of the twenty-eight banks rvere in 1911.
What has happened in the banking business has happened all the way down through our industries. Let me give a few more examples. The figures I am about to quote are taken from the report of the royal commission on price spreads and mass buying, which sat in 1934 and 1935. According to that report, in 1933 there were 127 tobacco firms in Canada. One of these firms, the Imperial Tobacco company, controlled seventy per cent of the business while another, the Macdonald Tobacco company, controlled the greater part of the remaining thirty per cent. This is what the commission found with regard to the Imperial Tobacco company; this is what happens to small business when big business is in control. The volume of sales during the depression was maintained by beating out competitors; prices were maintained by what the commission termed "oppressive tactics and unethical methods." Here are some of the ways in which competition was eliminated: (1) Refusal to sell to dealers who cut prices; (2) Forced

on them written contracts to maintain prices of tobacco supplied by all firms; (3) Offered ten per cent discount to certain retailers to buy directly, thus eliminating the wholesaler and increasing control; (4) Insisted on preference in display advertising over other firms, and intimidating dealers. May I point out again that this was the finding of a commission composed of members of this house, the chairman of which in the latter stages, if I am not mistaken, was the hon. member for York-Sunbury (Mr. Hanson).
Then we come to meat packing. With the exception of bread perhaps no article of food goes into so many homes as meat. In the twenty-five years prior to 1933, through merger and consolidation, the meat packing industry came under the control of very big business companies. In 1933 the two largest, Canada Packers Limited and Swift Canadian Company Limited, did eighty-five per cent of the business. Canada Packers, the largest, is a typical example of this sort of monopoly. It results from the merger of four packing concerns in 1927. In 1934 Canada Packers controlled seven creameries, six packing plants, twenty branch houses, two cold storage plants, one wool pulling plant, three canning plants and three fertilizer plants. In view of this, may I say again that those who hope to resurrect small , business and keep it in competition with such monopolies as these are surely optimistic. I could go down through the list: furniture, oil, milling, baking and a score of other businesses, and .the story would be the same.
I wish those people who call us socialists would stop calling names for a little while and read history. They would then understand that it is not people like myself and those behind me who are bringing socialism to Canada; it is the unrelenting development of the economic means of production. I want to make it quite clear that we are socialists. We do not deny it, we are proud of it, and in the not too distant future we are going to be in a very large and worthy company. I have not the time to go into it to-night, but if we would give a little thought to what is happening in various parts of the world to-day we would realize that our hope of victory in this war is based to a large extent upon the building of socialism in the occupied countries of Europe. The united nations as a whole are not doing that and, consequently while we are winning the war in a military sense, we are losing it in a political sense. This does not come within the scope of this debate, but there is a story there that could be told.
Industrial Development Bank

We are told of the benefits that the world has derived from free enterprise over a period of years. No one denies that. But it is of no consequence now. What we are concerned about is what can it do for us to-day and what it is going to do for us to-morrow. If there were any further proof required of the correctness of the direction in which the C.C.F. is going, it is given by this bill which has been reluctantly brought into this house by a government which opposes its very principle.
When he was speaking the other day the hon. member for York-Sunbury (Mr. Hanson) said that the bill was semi-socialistic. Whether it is "semi" or more than that is not material; it is in that direction. The hon. member for York-Sunbury thought that since it did not go far enough this group would reject it. As I have said, we are socialists, but we are not the "socialism or nothing" variety some are accusing us of being. These same people, however, a few weeks ago were accusing us of not being socialists at all.
When I contemplate the accusations hurled at us in the debates that have taken place in this house during the past few weeks, I am reminded of a story the late Clarence Darrow, the famous criminal lawyer, tells on himself. He was going to debate the question, "Has life any meaning?" When he started to prepare for his talk he got his pad of paper, his pencil and he began to think. The first name that occurred to him was that of William Jennings Bryan, and he wrote, "No". I do not want to mention names, particularly when hon. members are not in the house, but when I think of some of the speeches made in this house I also am compelled to say, "No, life has no meaning".
We are told that the good old capitalist system has worked well down through the years. Possibly it has. The old Ford car worked pretty well when it was new, but eventually it became worn out. A brochure came to my desk the other day entitled, "The foundations of national well-being". The author is John L. McDougall, and there is something in it that I believe is of great significance. I do not agree altogether with Mr. McDougall, but facts are facts and when we meet them they must be recognized. On page 17 he gives the populations of the chief English-speaking countries, Great Britain, the United States, Canada and Australia in the years 1801, 1861 and 1931. Taking the United States and Canada we find that in 1801 the population of the United States was 5,300,000 in round figures, and that of Canada, 250,000. In 1861 the population of the United States had increased to 31,400,000 and that of Canada to

3,200,000. In 1931 the population of the United States had increased to 131,700,000 and that of Canada to 10,400,000. That was in the heyday of capitalism. Not only were we able to take care of the natural increase in population here, but we were taking people by the million from every part of Europe. The population of Europe itself was increasing during the same time. From 1801 to 1931 the population of Great Britain increased from 10,500,000 to 44,800,000, and the same thing was happening all over the world. On the American continent capitalism kept expanding by moving the frontier farther and farther west. When we filled up one area we moved cur frontier farther west. But at the beginning of the twentieth century we had reached the end of the frontier and, from that time on, capitalism, instead of expanding, has been contracting. Population, instead of increasing rapidly, has been increasing very slowly, and in some parts of the world where it was increasing fast it has stopped growing altogether. These are facts the import of which we should try to understand. It is because there are no further outlets for new investments that capitalism, so-called free enterprise, has come to a standstill and can no longer feed, clothe and shelter the people, although there is an abundance of the wherewithal to do that. Let me tell my hon. friends opposite and my hon. friends to my right that these are the facts with which we are confronted, and our economic system must be so reorganized that we can produce and distribute for peace in the same manner as we produce and distribute for war.
I draw this to the attention of the house. When we were training our men for the armed services we found the money to give them all the training that was required. We found the money to give them all the clothing, all the food and all the tools and equipment- everything they needed. We did all that without any great difficulty because we had a national objective-the winning of the war. We can continue to do it so long as we have that common national objective. But the moment a man is let out of the armed services, then in greater or less degree his troubles begin. Surely it is as important that we should plan to clothe, shelter, train and educate a man for peace as it is to educate and train him for war. Why can we not do it? Because we are divided as to the way in which it can be done. We are divided as to the objectives to be attained. So long as we have contradictory objectives; so long as some persist in saying that the only way in which our economy can be carried on is to allow certain individuals to make a profit out of
13S5

Industrial Development Bank
feeding, clothing, housing and educating the rest, it will be difficult, yes, impossible to plan.
Let me, in conclusion, say something to those who are opposed to socialism and to the socialization of the means of production. We live by getting access to the means of production, to those things that produce food, clothing, shelter and the other things we must have in our everyday life. Which is the better way, to leave those things in the hands of a few irresponsible people, or to put them in the hands of those who are responsible to the people and to parliament? That is your choice and you have no other.


Mr. KUHL:: Oh, yes, you have.


Angus MacInnis: My hon. friend says that we have, that you can leave the means of production in the hands of a few people and through the magic of money distribute goods and services to all the people.


Walter Frederick Kuhl: I want production, not the
means.


Angus MacInnis: If you want production you must also have the means. The two must go together.


Walter Frederick Kuhl: No, I am sorry-


Angus MacInnis: I have not time to argue such silly questions.


Walter Frederick Kuhl: You cannot dispute it.


Angus MacInnis: I dispute it right now, but I have not the time to argue it. Make your own speech when I have finished. I say that if we have the control of the means of production no one can take away from us the fruits of our labour. The purchasing power of individuals as well as the purchasing power of nations are the goods and services that we produce. But if I work for B and he takes one-third of all I produce and gives me the other two-thirds, or if he takes two-thirds and leaves me but one-third, and does that with one hundred thousand people, then B will have more goods and services than he can consume. It may appear an easy way to issue money and buy those things from him. But let me tell you that when you create unrestricted plenty you have destroyed the profit system deader than a door-nail.
Just one other word. I would ask the opponents of socialism, which particular project among all those that have already been socialized would they like to turn back to private enterprise? Would they hand over the Canadian National Railways to the Canadian Pacific Railway? Would they hand over the Ontario hydro electric system to a
private company? Would they hand over in any part of Canada anything that has been brought under public control? They certainly would not. Just to show hon. gentlemen that the trend is in the other direction, let me show what is taking place in a province that certainly is not socialistic, at least not yet, but it is on the way; do not forget it. I have an item here that appeared in the Montreal Gazette of February 26, 1944. It is the report of an interview by the Montreal board of trade with the government of Quebec protesting against its intention to expropriate the Montreal Light, Heat and Power Company. The board of trade statement quotes from the speech from the throne delivered at the opening of the Quebec legislature as follows:
A thorough study of the distribution of electricity has demonstrated that reforms are urgently needed to provide the citizens of this province with electricity upon the favourable conditions offered elsewhere by state-owned enterprises. The setting up of a provincial hydro is the only solution for the problem of lower rates and rural electrification. You will be asked to pass an act for that purpose and the bill will provide, in particular, for the nationalization of the electric system and the distribution system which supplies the metropolis.
Well, are my hon. friends going to call Mr. Godbout a socialist?


Walter Adam Tucker: He wants to take steps to prevent the electrical system in Quebec being taxed as it is now by the federal government. It is a private company.


Angus MacInnis: Yes, it is a private company.


Walter Adam Tucker: And the Ontario hydro electric is not subject to taxation by the federal government.


Angus MacInnis: Does my hon. friend say that the Ontario hydro does not contribute as much, without taxation, as the Montreal Light, Heat and Power does with taxation?
It pays the taxes in the lower rates provided.


Walter Adam Tucker: That benefits Ontario. Mr. Godbout wants to get a similar benefit for the people of Quebec.


Angus MacInnis: And he can get the benefit only by nationalizing the Montreal Light, Heat and Power Company. That is the very point I want to make, and I am glad that at last it has dawned on my hon. friend. If he wishes to oppose public ownership, that is all right with me, but I would suggest that he

Industrial Development Bank
is on the losing side. However, public ownership in all phases of our industrial life is coming.
At the moment we are discussing the extension of public ownership to another section of our banking system. My hon. friend has given his approval. To-morrow and the to-morrows that are to follow will see more and more of these measures, and they will pass the House of Commons because there is only one alternative to their not passing. We cannot stop progress. We cannot stop expansion. If we try to stop progress we do so at the peril of a social explosion that may do the thing quicker than some of us might like to have it done.


Arthur Graeme Slaght: Mr. Speaker, this bill and the principles it involves, as well as some of the details, require most minute examination by parliament. In my judgment their discussion involves, and is unalterably intertwined with the consideration which at this session parliament will be called upon to give to three other financial measures, namely the amendment of the Bank Act, the amendment of the Bank of Canada Act and the mutual aid bill, all of which are yet to be introduced.
Some features of this measure have caused me grave concern. I do not propose to discuss them to-night, but rise simply to say that when the bill is before the committee on banking and commerce, of which I am a member, I shall desire then to bring about the fullest discussion of those principles and details which, as the bill now stands, cause me concern. Therefore, having made that clear, so that there may be no misunderstanding as to my being a party to sending this measure forward, with second reading, to that committee, I shall have no further observations to make at the present time.


Gordon Graydon: Mr. Speaker, I have a few observations to make in connection with the second reading of the bill to establish the industrial development bank. Perhaps what I have to say will make some small contribution in connection with the discussion surrounding the establishment of this institution. So far as the bank is concerned, and the proposal to set it up, I believe we .might as well first discuss the question of the government's position prior to the outbreak of war.
As has been described not only in this, but in other debates, with the failure of enterprise to function fully, the consequent lowering of national income coupled1 with a lowered degree of employment actually created a situation which governments in the past failed, I believe,

to meet. The solution then proposed was one only experimental in character. It was experimental because situations had not developed before to serve as illustrations which would help governments in solving the problem. Instead of reaching down to the root of the problem, that of maintaining a high level of national income and that measure of full employment so necessary for national prosperity, we adopted experimentally a different scheme altogether, namely that of putting people on relief and on the dole, or of attempting artificially to raise our level of employment by a scheme of public works and undertakings.
When war broke out, the whole picture was changed. As some hon. members have pointed out, and quite properly so, with the change of conditions from a peace-time to a war-time economy we found that with a great national objective in mind our nation was able within a short time to raise and to keep on raising our national income. That has been so to a point where we find it has now reached almost nine billions of dollars, and where with some very few exceptions we have attained a position of a high scale of employment. I must say, however, that in reaching a high scale of employment we must not forget that some
700,000	of our men and women are in uniform and are now outside the employment stream, so far as this nation is concerned. But when the war is over, it seems to me that if we expect to go forward and take our place among the nations of the world we cannot return to a system of public works of a palliative nature, nor shall or can this nation survive if it returns to a system of dole or relief. Those are issues which I believe are in the minds of Canadians generally.
There never was a time when there was a more vigorous determination that this nation shall have an expanding economy at the close of the war. What we have been able to master in the war-time period we must be able to master in the period of peace as well Having that definitely in mind, I think this particular measure to establish an industrial development bank, feeble perhaps as the attempt is, is commendable. I am not going to try to-night to justify all the provisions of the bill which is before us. I have heard, as the house has heard, many powerful criticisms of the bill; nevertheless, we have to make some change in connection with our economy for the peace-time period and the period of transition.
I submit, therefore, that it is the bounden duty of hon. members to support the principle of the bill at least for the purpose of having it referred to the banking and commerce committee so that a close scrutiny of the whole

Industrial Development Bank
problem may be made there with the help of the evidence that will be called. Moreover, as regards the industrial development bank, however necessary it may be to strengthen its provisions, I think it may be said that if the principle of the bill 'is to be opposed, then we as an opposition and as members of the house generally, if we say to the government in a war-time period that we do not like the provisions of the bill, have the responsibility of indicating some alternatives to the measure. That is the patriotic, the proper view to take of the bill.
I find great difficulty, members of the government are finding great difficulty, and members to my left are finding great difficulty in subscribing to many of the provisions of the bill; but fortunately the government has undertaken to have it referred to the standing committee on banking and commerce. There, I hope, many of the principles involved in the bill, many of its provisions, will be gone into thoroughly so that the bill may emerge from the committee much stronger and more powerful than it appears to be on second reading.
I say to the government and to the parliamentary assistant who is piloting this piece of legislation, that one of the things that disturb me a little in connection with the bill is the idea of too much duplication of banking arrangements and banking facilities in Canada. Frankly, I realize that perhaps the chartered banks of the country are not able to loan on long terms; nevertheless, as regards our intermediary credit, and as far as long-term credit is concerned, for the purposes which the bill contemplates, it seems to me that this suggestion at least may be offered. I do not, like some of our hon. friends in various parts of the house, pose as a financial expert. I speak strictly as a layman.


Ian Alistair Mackenzie: Hear, hear.


Gordon Graydon: If the minister of pensions is going to take part in the debate I hope that he will be modest enough to acknowledge himself also a layman in this matter, though I have heard him in previous sessions when he has posed as a little better than that.


Ian Alistair Mackenzie: Oh, no.


Gordon Graydon: With respect to the
credit situation, I Would like the banking and commerce' committee to consider the possibility if it can be done, of utilizing the banking institutions we have from the point of view of government guarantees under arrangements similar to those in connection with the National Housing Act and the home improvement legislation, on a widening and more comprehensive scale. That may not be feasible; perhaps it is not the proper solution; but at least I suggest that before we embark upon a wholesale scheme of duplication we should give this point careful consideration. We see the possibility of the establishment of branches all over. Canada, and before costly duplication is undertaken we should consider carefully whether, by way of government guarantees or in some other way, a plan for utilizing the facilities now available might not be properly and practicably worked out in the interests of greater credit.
I support the bill as far as its principle is concerned, in the meantime. The banking and commerce committee will have an opportunity of dealing with such matters as I have suggested, with respect to full employment, maximum production and a high level of national income. Where private enterprise, or free enterprise if you will, fails to provide that full employment, that expanding production and high national income, then in our opinion the state must underwrite this nation's prosperity; and in so far as the bill tends to that end we are in support of the principle. It is unthinkable that we should reach the transition period from war to peace, and then the period of peace itself, without having some agency that will be able to pump into our financial, industrial and economic structure new life so that the stream may go on when unemployment will no longer be known.
There are people who say that this is a bad-debt bank. Well, I would not be at all surprised if there were many bad debts as far as this bank is concerned; but while, in my opinion, bad debts must be kept to the very minimum and care must be exercised in connection with the whole lending structure of the bank, I suggest that bad debts are not nearly as. important a consideration to the nation as keeping our people all at work at good wages and under proper working conditions. We have gone a long way in our progressive thought along the whole economic front.
In connection with the various matters that have been brought before the house to-night and throughout the course of the debate, we have heard ft good deal about monetary reform, and in connection with all .those questions that have to do with banking and money there have come proposals from various quarters in the house. This nation has done an excellent job in demonstrating that we can reach a position of maximum production. The problem in this country to-day is not
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Mr. KNOWLES:: I believe there are one or two others who would like to speak, and I understand the parliamentary assistant to the Minister of Finance wishes an opportunity to close the debate. Therefore I move the adjournment of the debate.
Motion agreed to and debate adjourned.
On motion of Mr. Mackenzie (Vancouver Centre) the house adjourned at 10.55 p.m.
Wartime Wages Control

Monday, March 13, 1944