1944-03-07

[Stage Direction]
On the order for motions:
Mr. S. H. KNOWLES (Winnipeg North Centre):: Mr. Speaker, yesterday by leave of the house I introduced Bill No. 9, to amend the Judges Act in reference to the salaries of certain judges on attaining the age of seventy. This morning I received, as did other hon. members, a printed copy of what "purported to be my bill, but on looking inside I found that there had been printed in error a proposed amendment to the Exchequer Court Act which bears no relation to the contents of my bill; I understand that this is a government measure which is to be brought down at a later date. I hope some day to have the privilege of introducing legislation on the government side of the house, but I must disclaim any responsibility for this bill.


Mr. SPEAKER:: I was informed this morning that a mistake had been made in regard to the hon. member's bill, which was put out for distribution in error. That error is being corrected, and the copy of the hon. member's bill will be in the post office to-day.



CONSIDERATION IN COMMITTEE OF REPORT OF SPECIAL COMMITTEE ON REVISION OF STANDING ORDERS

Right Hon. W. L. MACKENZIE KING (Prime Minister):: basic principles of parliamentary procedure ought not to be encouraged. There were no standing orders relating to public business in the United Kingdom House of Commons until 1707, and there were only three from 1715 to 1821-over a century. There are 95 to-day. We have 81, besides 10 dealing with the staff and 28 governing the library of parliament. Your committee is aware that members of this house are reluctant to impose restrictions on their freedom and independence, and that any attempt to translate, procedure into precise rules will deprive them of the very quality which render them adaptable to new and varying conditions, or unusual combinations of circumstances, and might have the effect of restricting rather than safeguarding their privileges.
The following amendments to the standing orders are recommended:
Standing order 9 reads:
Upon a division, the yeas and nays shall not be entered upon the minutes, unless demanded by five members.
Proposed amendment: That the following be added:
And every member present in the chamber when the question is finally put by Mr. Speaker shall be obliged to vote, and if he does not vote Mr. Speaker shall call upon him to, vote and his name shall be recorded accordingly. If he persists in not voting he may be named by Mr. Speaker for having violated a standing order of the house.
There never was any standing order governing this matter in the Canadian House of Commons. The practice for many years was that a member who remained seated during a division was often required by the Speaker to declare on what side he voted. If he persisted in not voting, neither the house nor the Speaker had authority to penalize him. In 1906, the United Kingdom house passed its standing order 29 which relieves members of the obligation to vote; and our house seemed to have been so influenced by this new practice that our speakers have hesitated to demand that all members present when the question is put are bound to vote. The procedure was not uniform, which was not fair to members who are entitled to know what are their rights in a matter of this kind. Under the new standing order, a member who may have objections to vote one way or the other shall not be forced to do so against his will as he will be free to stay out of the chamber when division takes place.
Section (1) of standing order 12 reads:
Mr. Speaker shall _ preserve order and decorum, and shall decide questions of order, subject to an appeal to the house without debate. In explaining a point of order or practice, he shall state the standing order or authority applicable to the case.
Proposed amendment:	That the following be
added after the word "debate" in the fourth line:
provided no division shall take place thereon unless demanded by twenty members.
Under the , present procedure, when Mr. Speaker has given a decision, any member may rise and say:, "I appeal from your decision." The question is then put on that appeal, and if five members rise, a division has to take place. This amendment provides that, in the future, the house will only divide on the appeal if a division is demanded by twenty members.
[DOT] 
Section (3) of standing order 31 relating to the motion to adjourn the house for the purpose of discussing a definite matter of urgent public importance reads:
He (the member) then hands a written statement of the matter proposed to be discussed to Mr. Speaker, who, if he thinks it in order, and of urgent public importance, reads it out and asks whether the member has the leave of the house. If objection is taken, Mr. Speaker requests those members who support the motion to rise in their places and, if more than twenty members rise accordingly, Mr. Speaker calls 'upon the member who has asked for leave.
Proposed amendment to be added as subsection (g) of section (6):
There shall be no appeal from Mr. Speaker's decision as to the urgency of discussing the matter mentioned in the written statement submitted to him by the member who proposes to move the adjournment of the house.
The object of this amendment is to bring the rule in conformity with the present practice of the house and several Speaker's decisions which have been invariably sustained. The theory is now accepted that the Speaker in declaring that there is no urgency to debate the matter brought to the attention of the house does not rule on a point of order. He takes the responsibility of deciding whether or not the question proposed to be discussed is of such national importance that it should be given precedence over the appointed proceedings of the house.
Standing order 37 reads:
No member except the Prime Minister and the leader of the opposition, or a minister moving a government order and the member speaking in reply immediately after such minister, or a member making a motion of "no confidence" in the government and a minister replying thereto, shall speak for more than forty minutes at a time in any debate.
Proposed amendment:	That the following
be added as section (2):
Provided always that in the committees of the whole, supply or ways and means, no member shall speak more than once on a particular motion, clause or item under consideration, and not more than twenty minutes continuously, but his right to ask questions relating to the subject-matter of the said motion, clause or item under consideration shall not be thereby restricted.
When Mr. Speaker is in the chair, a member can only speak once, but there is no limit to the times of speaking when the house is in committee. Under the present rule, a member may make two or three forty-minute speeches during a sitting of the committee which does not last longer than, three hours at a time. This amendment provides for a more equitable apportionment of time and allows more members to take part in the discussions.
Section (2) of standing order 40 reads:
Mr. Speaker or the chairman, after having called the attention of the house, or of the committee, to the conduct of a member who persists in irrelevance, may direct him to discontinue his speech, and if the member still continues to speak. Mr. Speaker shall name him, or. if in committee, the chairman shall report him to the house.

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Proposed amendment:	That the following
words be inserted after the word "irrelevance": "or tedious repetition".
Your committee hopes that this addition will meet with the general approval of the house.
Section (2) of standing order 43 reads:
A reply shall be allowed to a member who has moved a substantive motion, but not to the mover of an amendment, the previous question or an instruction to a committee.
Proposed amendment:	That the following be
inserted after the word "motion": "or the second reading of a bill, and to a minister of the crown who has introduced a government measure". The amended section will read:
A reply shall be allowed to a member who has moved a substantive motion, or the second reading of a bill, and to a minister of the crown who has introduced a government measure, but not to the mover of an amendment, the previous question or an instruction to a committee.
In recent years, the ministers have had to obtain leave or unanimous consent in order to answer criticism and as no objection was ever taken to this course, the house may now regulate the practice by adopting this new rule.
Standing order 44 regulates questions placed on the order paper, but does not deal with questions addressed to ministers on the orders of the day being called.
The committee proposes that the following be added as section (5) of this standing order:
A question of urgent character may be addressed orally to a minister on the orders of the day being called, provided a copy thereof has been. delivered to the minister and to the clerk of the house at least one hour before the meeting of the house. Such a question shall not be prefaced by the reading of telegrams, newspaper extracts, letters or preambles of any kind. The answer shall be oral and may be immediately followed by supplementary questions limited to three in number, without debate or comment, for the elucidation of the information given by the minister.
The custom of asking questions before the orders of the day are proceeded with has taken such a development that it is now part of our parliamentary practice. It is neither possible nor advisable to do away with it. As it seems to meet the wishes of the majority of members, the house may adopt this amendment so that the Speaker will in future be guided^ by a standing order when members' rights in this connection are challenged.
Standing order 49 reads:
Only one amendment and one subamendment may be made to a motion for Mr. Speaker to leave the chair for the house to go into committee of supply or ways and means.
Proposed amendment:	"That the following
words be inserted after the word 'motion': 'for the Address in Reply to the Speech from the Throne'", so that the standing order will read:
Only one amendment and one subamendment may be made to the motion for the address in reply to the speech from the 100-79
throne and to the motion for the Speaker to leave the chair for the house to go into committee of supply or ways and means.
The debate on the address in reply to the speech from the throne covers the whole ground of administration and is repeated when the budget is brought down. This debate has been abolished in the House of Assembly of South Africa where the following standing order is now in force: "Mr. Speaker shall report to this house the governor general's speech, and there shall be no debate on such report".
Your committee felt that the house could not abolish this debate, but it realized that the scope of discussion was so wide and the question of relevancy almost nonexistent on this particular occasion that the freedom of speech of every member, party or group would be fully preserved by limiting the number of amendments in the same way as on the motion for committee of supply. These two motions are in the same category, namely, they furnish occasions for airing grievances and making suggestions to the government.
Standing order 60 reads:
If any motion be made in the house for any public aid or charge upon the people, the consideration and debate thereof may not be presently entered upon, but shall be adjourned till such further day as the house thinks fit to appoint; and then it shall ibe referred to a committee of the whole house, before any resolution or vote of the house do pass thereupon.
Proposed amendment: That the following be added at the end after the word "thereupon": provided that if the aid or charge is to be a subsidy provision of a bill to be later introduced, the motion creating it shall be considered without the house resolving itself into committee.
Your committee has reached the conclusion that there is an immense advantage in informing the members of parliament as to the nature of a money bill upon the committee stage of the discussion. The obligation to refer a resolution to the committee of the whole is one of the traditional rules of British parliaments, and though it may sometimes seem superfluous, there may be occasions when it will prevent obnoxious legislation. There can be no question of abolishing this part of our procedure, but there is no doubt in our minds that the committee stage can be avoided when the charge created by a bill is a subsidiary feature such as the payment of a staff or travelling expenses, the bill should be introduced without the formality of a resolution and the committee stage.
Standing order 75 reads:
Every public bill shall be read twice in the house before commital or amendment.
Proposed amendment: That the following be added at the end of this standing order:
with the exception of divorce bills passed in the Senate which shall be referred to the standing committee on private bills as soon as received from that house.
Under this new rule, divorce bills will come before the house only once. They will be thoroughly considered in the committee on private bills prior to being submitted to the



Rides of the House
house. They are now mentioned three times before their second reading: first, when the message is read from the Senate; secondly, on first reading and thirdly on second reading. The object of the new rule is to avoid this unnecessary procedure.
Your committee is of the opinion that divorce by legislation should not take place to such an extent that bills seeking it sometimes fill many pages of the order paper. The matter is not one that can be settled by standing orders. The whole question should be given full consideration with a view to eliminating divorce bills from parliament, and your committee strongly recommends that this be done as soon as conveniently possible.
On Friday, the 25th of February last, speaking on behalf of your commitee, I asked members who may desire to place their views on procedure before your committee to write to me or the clerk of the house and I stated that their letters would be given every consideration. No suggestions have been received.
Your committee does not recommend radical changes in the rules of the house, but it believes that practices,^ which have been followed for - years by unanimous consent, ought to be permitted by standing orders. It is only by a process of evolution that the rules can be materially altered.


Mr. GLEN:: Mr. Chairman, the committee appointed by the house to assist the Speaker in the revision of the rules consisted of Messrs. Mackenzie (Vancouver Centre), St. Laurent, Hanson (York-Sunbury), Black (Yukon), Mc-Ilraith, McGarry, Fauteux, Golding, Maybank, Maclnnis and Quelch. All of these hon. gentlemen are experienced parliamentarians with intimate knowledge of the needs and requirements of this house. In addition we had the benefit of the advice and the great experience of the Clerk of the House, Doctor Beauchesne.
In their deliberations the committee addressed themselves to the question of maintaining the prestige of the House of Commons, and while they have not made many changes they have recognized certain features of our parliamentary life which through custom have become part of our jurisprudence, and have endeavoured to embody in the rules amendments which they feel are necessary. The committee took cognizance of and carefully considered general criticism of the proceedings of parliament, and on page 146 of Votes and Proceedings of March 3, last, they gave effect to their viewpoint by stating
Your committee, in the performance of the important duty assigned to it by the house, has taken into account the existence of general criticism of parliament both by members and representative citizens. It has fully realized that much is expected of the House of Commons where the views of the people are finding expression and where industrial and economic conditions are demanding parliamentary attention and solution. The main question before the committee was whether procedure 
should be amended so that the house may be able to do more legislative work in the time at its disposal and increase its efficiency as a critical and controlling assembly. Criticisms of parliament seem to have been inadequately considered in relation to the -whole structure of parliament, the necessary party system and the complex situation created by a war which is now in its fifth year.
These criticisms arise from opinions concerning the functions of parliament which are often based upon such misconceptions as the view that parliament is primarily a board of directors with the members of the cabinet as its executive staff, and that members, instead of endeavouring to reconcile as much as possible all ^ the elements of public opinion, which is difficult in our diversified country, should rigidly consider every question on its own exclusive merits. Such however is not the true function of a legislative body composed of 245 members elected to discuss the management of public affairs. Debates may sometimes be lengthy but they bring home to the administration the advisability or unpopularity of a particular line of policy, and they must be heard because democratic government rests upon public opinion. Parliament is the assembly of representatives elected by the people where great issues are debated, or should be debated; it is not primarily a body of ahditors charged with the inspection of departmental accounts. Freedom of speech is one of the inalienable privileges of members of the House of Commons. It is in truth the privilege of their constituents and it is secured to members not for their personal benefit but to enable them to discharge the functions of their office. Without it, the essence of the country's liberty does not exist.
Hon. members will notice in the report that a paramount thought in the minds of the members of the committee was to see that the rights of minorities were not impaired. On page 147 of Votes and Proceedings of March 3, last, the committee has stated this principle in exact language:
Your committee, in all its deliberations, has kept in mind the importance of not impairing the rights of minorities. Two fundamental principles govern the procedure of the house. They are, that the government shall, so long as it can maintain a majority, be able to secure such legal powers as it considers necessary for administration, and that minorities, however small, shall be able to criticize that administration. Standing orders must protect them, and it is all the more important that they be founded on right and justice because they are merely resolutions of the house which can be swept away by a majority vote. Your committee is of the firm opinion that these rights cannot be alienated even if the house, in maintaining them, may protract sessions and lay itself open to severe criticism.
Some considerable criticism has been offered from time to time in the press and elsewhere regarding the consideration of estimates. The committee very carefully considered this mat-

Rules oj the House
ter and, the right of that criticism, but came to the conclusions as stated in the said page 147 of Votes and Proceedings, as follows:
The suggestion that estimates should be referred to standing or select committees has been given earnest consideration and carefully reviewed. It strikes at the root of ministerial responsibility and it divests members of the privilege of criticizing from the floor of the house without advice, suggestion or influence of any kind, all departmental expenditures submitted by the government. No proposals subversive of this settled rule of action can be safely embodied in any scheme for securing closer parliamentary control. One of the objections to this proposal is that if all the estimates are referred to a standing or select committee the motion for the speaker to leave the chair shall be abolished, which means fewer opportunities for private members to move amendments setting forth grievances or expressing want of confidence in the government. The procedure required to keep this privilege unimpaired would reduce the efficiency of the committee's functions and it would be so involved as to be misunderstood and hard to enforce. Certain estimates may be occasionally referred to a select committee in order to ascertain facts which the house desires to know, but this pra'ctice should be adopted guardedly and only in very special circumstances. Your committee does not think it would be advisable to change the present system and it believes that the elasticity of the present rules makes it possible to apply them in new situations from time to time. We, however, desire to submit that considerable time could be saved if the committee of supply sat oftener in the early part of the session. We therefore recommend that, when the yearly estimates have been brought down, one day a week be set aside for consideration of supply. If this is done, the house is not likely to find itself under the necessity of passing a great part of the estimates in the dying days of the session.
It has been widely suggested that protracted debates should not be encouraged. The committee was fully aware of this defect in our procedure but did not feel it should further curtail debate, because after all there are a number of standing orders which, if exercised, can prevent undue debate. They are standing order 39, the rule with regard to closure; standing order 55, which provides for the previous question; standing order 48, which states *that when a question is under debate, a motion can be made to amend it, postpone it to a day certain, for the previous question, for reading orders of the day, proceeding to another order, to adjourn debate or to adjourn the house; standing order 38, respecting undebatable motions, including adjournment motions, decided without debate or amendment; standing order 49, stating that only one amendment and one subamendment may be made on a motion for Mr. Speaker to leave the chair to go into supply or ways and means.
The committee did however think that some amendments should be made with regard to
the speech from the throne and also to the proceedings when the house is in committee, and these matters will be discussed when the amendments are before this committee.


Mr. HANSON (York-Sunbury):: Mr. Chairman, the Prime Minister (Mr. Mackenzie King) made it quite clear-and I thank him for it-that this is to be a free discussion. I hope hon. members will take full advantage of the opportunity now presented to them to investigate the various matters dealt with in this report, and all allied subjects which may commend themselves to their consideration.
It is not often the rules of the house are revised. The last occasion was in 1927, now some seventeen years ago. While I had the honour and privilege to serve on that committee, I do not pretend to be an expert on rules or procedure. I am afraid that in a busy life I have not taken advantage of the opportunities which might have been mine to study such matters. And yet they are important. I am surprised that the general invitation extended by Mr. Speaker to hon. members, to make representations to the committee respecting improvements which in their opinion might be made, was not taken advantage of, either orally or in writing. I understand that not a single representation was made to the committee by any member, outside the members of the committee,
' although ample opportunity was afforded for so doing, and an invitation was extended to them to appear in person if necessary. That rather indicates-I do not say this in any carping spirit of criticism-indifference on the part of hon. members.
Why was this committee set up? I venture to suggest that there are two reasons. First there was the criticism from outside, particularly from the press, which in days gone by had been directed at the proceedings of the House of Commons. In parenthesis may I say that I held the view, which I may hold alone, that a good deal of that criticism was uninformed. I say this is no spirit of bitterness or revenge because of the criticism which had been levelled at the house. So far as I am concerned I have endeavoured in season and out of season to uphold the dignity of *this parliament so that it may commend itself to the people of Canada as the highest court of the people.
Why are rules of parliament set up? The first reason is that there may be an orderly conduct of the public business. This is fundamental, just as it is in connection with the affairs of any other deliberative assembly or any joint stock company. There must be 100-7Qi
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rules to govern not only the internal operations of a company but the procedure at its meetings. If you will read history you will see that for generations the mother of parliaments has had rules of procedure governing the course of public business. One fundamental right we have gained after a long struggle is that which is extended to minorities in order to protect them against the machinations or the power of governments. Any revision of rules which would take away from the minorities any of the rights which have been extracted from parliaments over a long period of years would not make for good government in this country. The very essence of democracy is the right of opposing parties to criticize and expose weaknesses, and if possible, by means of cross-examination or other arts to which resort may be had, to arrive at the truth. Any infringement of the powers and privileges which have been thus set up over a long period of years, both in the mother of parliaments and in Canada since confederation, yes and in the assemblies preceding confederation, would be a weakening of democracy itself.
The order of reference to the special committee was quite wide-that the standing orders be revised with a view to simplifying, accelerating and expediting business. I should like to pay a tribute to the members of this, committee. There was not a single attempt made to abrogate or abridge the rights of minorities. I have never served on a committee where there was a better spirit of cooperation. We approached the matter objectively and there was a unanimous desire to improve conditions. On several occasions when the committee was meeting I wished I could say the same about all committees of the house. There was an entire absence of partisanship or of attempts to put something over. We were all seeking a way to do well that which we had been appointed to do, and I think we have arrived at some sane conclusions.
May I say that the conclusions of the committee were by no means unanimous. I could not follow Mr. Speaker in his remarks, but my understanding is that while there was a difference of opinion, there was the view that the report represented a good cross-section of the opinion of the committee. Anyone was left free to criticize any particular item he might desire to criticize.
I	think one of the reasons this committee was set up was the criticism throughout the country that there were too many speeches and that speeches were too long. I remember that this was the chief item of consideration by the committee set up in 1927. The recommendation of that committee for a forty-
minute limitation on speeches was accepted by this house, but so far as my observation goes it did not have the effect of correcting what was then alleged to be an evil. I do not sympathize very much with the view that per se a long speech is an evil. If we took that as a standard, the Prime Minister -would stand1 convicted over and above every one of us. It is what is in a speech that counts.


William Lyon Mackenzie King: Hear, hear.


Richard Burpee Hanson: I think
we all agree with that statement of general principle. I hope the Prime Minister will agree with the facetious remark I have just made that he of all men has made the longest speeches in this house that I have ever heard. Some of them may have been good, and some of them may have been bad.


William Lyon Mackenzie King: My hon. friend has made the worst.


Richard Burpee Hanson: That may be true. One is always the poorest judge of his own efforts, and we shall have to leave that question to posterity. I was a little more generous in my reference to the Prime Minister's efforts. I said that some of them were good and I will say that some of them were exceedingly bad. However, that is only in passing.
The limitation of forty minutes did not bring about the results which the committee of that day and the House of Commons thought would be brought about. Therefore the matter was again considered by the committee which has now reported. I am bound to say that the consensus was that the cutting of speeches down to thirty minutes-there were exceptions to this point of view-would be an abridgement of the rights of private members. Personally I could not bring myself to agree to that abridgement. Private members have only two or three occasions during the session when they can make what is termed a set speech for the benefit of their constituents. I remember discussing this very matter one day with an old parliamentarian, Mr. D. D. McKenzie, who was very friendly to me when I first came to this house. He said to me, "Every member of the House of Commons who has anything to say ought to make one good reasoned speech a year and send it out to his constituents to let them know that he is there." I thought that was sound advice, and for a number of years I followed it. This brings us to a consideration of how long a man who only makes one speech in a session should be allowed to speak. If he has anything to say, if he has any ideas to

Rules of the House
present, he cannot present them, in less than forty minutes, and11 am opposed to any further abridgement of that time. But when it comes to speaking in committee-I am looking particularly at some members opposite, and commend this especially to them-I think there should be an abridgement of speeches. Under the present rule members can speak forty minutes in committee and cover a wide field, and if they are interrupted, or something intervenes, they can go on and make another forty-minute speech. That is repetitious and tiresome, and the special committee was. unanimously of the opinion that a limitation should be put on speeches in committee of the whole. Therefore we have recommended, and I concur fully in the recommendation that speeches in committee shall be limited to twenty minutes on any particular clause or item-I think that is the term used in the report-and that there shall be full opportunity of questioning.
I am not going through the report seriatim. I have indicated certain general views, and Mr. Speaker in the course of his remarks has pointed out what I think very many members and most of the press, if I may be rash enough to admonish them on this point, feel- that there are many opportunities in the hands of the administration and of the house itself to restrict debate. The trouble is that the remedies that are readily available are not called into operation. There is the closure. How many times has the closure been used in this house? What brought about the provision for closure? Obstruction-filibustering -that was the only reason. Something had to be done to stop it, and the closure was introduced. I was not here at the time, but I have read about it. Fortunately we do not have much obstruction nowadays, and perhaps it is not necessary to use the closure. But there is another medium, and that is the medium of consultation and cooperation between groups in the house, which would have the same effect. I commend to the party leaders and to the party whips the use of the voluntary system, which after all is a pretty good system if you can get it to work, and it can be made to work if we see things with sweet reasonableness.
Mr. Speaker has enumerated all the other methods that may be resorted to for restricting debate. We have, in fact, everything in Canada, so far as I can see, that they have in the mother of parliaments for restricting debate excepting the guillotine, and I am not sure that we have not something reasonably approaching the guillotine. I am not-going to go into details in these matters.
There is one part of the report with which I am not in accord, and that is that the Speaker should be the sole judge of the question of urgency. I believe that I am in a minority in the committee on that point. It was stated in the committee that the Speaker's decisions are never overruled. That I think is true in general, but I do remember one historic occasion on which the Speaker's [DOT] decision was overruled. On the question of urgency it seems to me that we are limiting the rights of private members if we put into effect the proposed amendment to the rules. But I am not going to argue the point at length; I shall not repeat the arguments that were made in the committee. There are other members of this committee who understand the position, and I shall leave the matter to them.
There is just one other point I want to discuss. With the exception of the question of the Speaker being the sole judge of urgency,
I am in favour of the report of the committee andi intend to vote for it, though how I shall be able to reserve my vote on that one point is not quite clear. I suppose we shall have to accept or reject the report in whole, or move to strike out a particular part, but if we cannot amend a particualr part I shall have to vote for the whole report.
The question of parliament dealing with divorce bills is the other question to which I wanted to refer. It is a matter of procedure. But any attempt merely to shorten the method of procedure with respect to divorce bills is not dealing with the root of, I will not say, an evil, but a situation which confronts this house. I take the broad view that no divorce bills should be brought into parliament at all, that divorce should be exclusively referred to the courts, and I am going to say that that is a matter of public policy in which I think the government should give a lead. I know it is a delicate question. I am not going to hurt the religious sensibilities of anybody.
I believe in the principle of divorce. I believe that there is such a thing as unholy wedlock, and it may develop into unholy deadlock. That is not original with me. Mr. A. P. Herbert wrote a novel on that which I commend to the Prime Minister as good reading for relaxation. If he will only read that book it might convert him to the point of view I am trying to set forth, if he is opposed to it.


Mr. GRAYDON:: It might encourage him to get married.


Richard Burpee Hanson: That is hopeless at his time of life. It is only old
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widowers who get married at his time of life. Perhaps they have more courage than discretion.
But let us be serious about this question of divorce. The recommendation with respect to procedure on divorce bills is the best that the committee could evolve, having regard to the limited length of time we devoted to a discussion of the subject. I support that recommendation and I ask hon. members of the house to support it, but it is not dealing with the problem as it ought to be dealt with.
This is the suggestion I make to the government. Get this vexed question of divorce, out of the arena of parliamentary government. Get it out of the Senate and get it out of the House of Commons. Let us set up a division of the Exchequer Court of Canada, a division which will be clothed with jurisdiction to deal with divorce. We can do this, and then let us relegate the whole question of divorce to the courts, where it ought to be, just as we have referred the question of contested elections to the courts. It will not take away from us our right to deal with the question of divorce by legislation. Neither have we by referring contested elections to the courts robbed parliament of its jurisdiction to deal with that subject. Parliament right down through the ages has decided that questions of the kind which involve judicial discretion and that sort of thing can best be dealt with by the courts. My recommendation to the Prime Minister and to the government and to the members of the house, and may I say with the utmost candour to those who perhaps differ with me as to the ethical or religious aspects involved, that I believe the proper course for them to support would be to get this vexed question out of parliament and into the hands of a judicial body which will approach it fully qualified by education and by administrative experience and by knowledge of the law and of procedure to deal with it in a judicial manner. I commend that to the whole house. Let us not pussyfoot with this question any longer. Let us have an expression of opinion, if you like, although I am not inviting extensive debate; let us try to do something constructive in the matter and get this question off the order paper once and for all.


Mr. MacINNIS:: I understand that the various recommendations made by the committee will be discussed in the order in which they were made and will be decided by a vote of this committee. I do not therefore think it is necessary to take very much time in a general discussion. To do so, I think, would be to act contrary to the

purpose for which the committee was set up. I wish to associate myself with the hon. member for York-Sunbury (Mr. Hanson) in what he said about the committee. I was very glad to find that all its members, regardless of what party or group they belonged, were equally determined that the rights of the minorities should be maintained. In that connection, I think, we also recognized that the minority rights were not rights of groups only, but were rights of individuals. As has been very well put into the report by those who drafted it- Votes and Proceedings page 147:
It is in truth the privilege of their constituents and it is secured to members not for their personal benefit but to enable them to discharge the functions of their office.
That is the spirit in which the committee approached its work. There may be a feeling, possibly a justifiable one, that the committee did not go sufficiently deep into the rules of procedure and bring in a fuller report-that is, a report proposing changes which would expedite the business of the house to the extent that we think it should be expedited. But the committee felt that we were dealing with the subject at an abnormal time. This is a time of war, when ordinary parliamentary procedure is, necessarily, upset, and we grant to the government, because of the necessities of the times, many powers which would not be given to it in ordinary times. I believe that when we return again to normal conditions a similar committee should be set up to go more fully into the rules.
There is another point which the committee had in mind. While we tried to maintain and were anxious to maintain the rights of minorities, we realized that there is such a thing as the rights of the majority; that the government, after what might be considered sufficient time has been given to debate any matter, must have resources to curtail debate and get on with the business which has been entrusted to it by the country.
The hon. member for York-Sunbury referred to the necessity of preserving the dignity of the House of Commons. I think we are all agreed on that. But after all, the people of the country want something more than dignity; they expect parliament to do business, and I believe business can be done just as well in a dignified as in an undignified way. But let us not lose sight of the fact that the people of the country to-day have come very close to parliament. When parliamentary institutions were in process of growth, parliament had very little to do with the everyday life of the people. Parliament was a Sort of policeman; it arranged for granting the ruling monarch money to run the country, and concerned itself with a limited range of things of that kind. But to-day

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parliament is concerned with the everyday life of the people in an intimate way, and all are agreed that in future it will be more concerned with that than it has been in the past or is even to-day.
If we are to be successful in carrying on with our democratic institutions, something more than standing orders and rules will be necessary. Democracy in the ultimate depends on self-discipline, and I believe we can promote that' practice here in the House of Commons. The government of the day could facilitate and speed the work of the house and obtain cooperation from the opposition by approaching the opposition in a spirit of cooperation, but it will have to be done in such a way as to satisfy the opposition that the government has nothing "up its sleeve," as the saying is. I am satisfied that if the opposition is approached in this way a great deal can be accomplished. Perhaps the reason I lean so definitely in that direction is that I myself am a cooperative person; I hate to be driven, but I respond quickly to cooperation, and I find that that is also true of the people with whom I am associated.
There are one or two recommendations with which I do not fully agree, and I shall have something to say on those as they come up, so that I will not at this point take any further time of the committee.


Mr. QUELCH:: As one who sat on the committee I should like to say that I appreciated the expeditious way in which, under the able chairmanship of Mr. Speaker, it concluded its sittings. I suppose some hon. members will feel that the committee did not go far enough, and I do not doubt that a good deal of criticism in that regard will be heard from people outside the house. On the other hand there will doubtless be many hon. members who believe that the report goes too far.
I believe we all agree it is desirable that measures be introduced with a view to expediting the business of the house. We have all been aware that business has on occasions dragged on day after day without anything really worth while being accomplished. On the other hand we all agree that the rights and privileges of individual members and of minorities must be guarded jealously. So that when you try to expedite the business of the house without infringing upon the rights of individual members or minorities, you face a difficult problem. These points were plainly in the minds of the committee during its sittings.
As I understand that the different sections will be taken one at a time, I will conclude by saying that, generally speaking, I am in full accord with the report.


Mr. LACOMBE:: I want to make a few remarks concerning the amendment proposed to the parliamentary rules and forms of the House of Commons. It was a real pleasure and satisfaction for me and my colleagues to hear a few moments ago the speech delivered by His Honour the Speaker. Elected to this house in 1925, I remember that His Honour was at that time, as he has been at all times, one of the best debaters in this house. Mr. Speaker is now speaking with the same eloquence.
(Translation):	Generally speaking, the
proposed amendments to the Rules of the House are excellent. However, I am bound to oppose one of them, for it is detrimental to the rights and privileges of members of this house. Why should the support of twenty members, instead of five as heretofore, be necessary in the future to force a vote on a decision of the hon. Speaker? This is a harsh proposition which should not go through. Thus, when a minority group numbers less than 20 members, it will be impossible for them to force a vote without the support of members from other groups with political tenets inconsistent with their own. In most cases it will be absolutely impossible. Such a measure would deprive the representatives of the people of the freedom of speech to which they are entitled in moving amendments to government policies. Indeed, what would be the use of moving such amendments if those members are deprived of the privilege of forcing a vote on a decision of the hon. Speaker, due to conditions which render the taking of a vote an impossibility?
I am not finding fault with the other proposed amendments. On the contrary, they will result in shortening the debate, especially in connection with the estimates. Mr. Chairman, measures should have been adopted long ago to curb the abuses that have been so common at every session of parliament, when the estimates are before the house. I have seen members repeatedly taking part in the debate on a single item, making the same utterances ten and even fifteen times over. At last, the government realize the futility of such goings on, which unduly lengthen the sessions of parliament.
I shall close my remarks by a few words on the divorce bills. The * committee entrusted with the revision of the Rules of the House have recommended some amendments which would render the adoption of divorce bills more difficult. I congratulate them for it. I shall go further and state that divorce bills should not be submitted either to the house or
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to a committee of the house. When such bills apply to Roman Catholics or when one of the parties is a Catholic, the bills should simply be dropped.
The civil code of the province of Quebec contains measures entitling the interested parties to apply to the courts of the province for an action in separation from bed and board or a decree of invalidity in certain special cases. Therefore, I wonder why the federal government does not adopt an act to refer Catholic husbands and wives to our courts, where they could avail themselves of French civil laws. Besides, the Roman Catholic dogmas hold that marriage is indissoluble and that its bonds can be severed only by the death of one of the parties. The federal government, when adopting divorce bills concerning Catholic married couples residing in the province of Quebec, not only transgresses against the civil code of that province, but also violates Canon law and the precepts of the Catholic faith.
One further remark, Mr. Chairman. The granting of these divorce bills, like a cancerous growth, eats into the very life of society, of which the family is the living cell. Divorce is one of the worst evils of our days. It should once for all be banished from civilization. It is a disgrace for both parents and children. The government is contemplating the implementation of a complete programme of social legislation. Will they allow divorce to keep on eating away at the very heart of1 society, the family? We claim to be fighting for civilization and still we adopt divorce bills worthy of Zulus and of the most backward tribes of the universe. Why not, once for all, close the doors of parliament against these divorce bills which have done us and are still doing us so much harm? Thus we would protect parents against themselves and children against the deplorable errors of their elders. This is a social as well as a national duty. The government must not and cannot avoid the issue. On behalf of family, society and civilization, I urge that divorce, this canker of society and the home, be prohibited.


Mr. BLACK (Yukon):: I have had the pleasure and honour of serving on two committees while a member of this house, which committees were set up to consider the rules and standing orders of the house. As the hon. member for York^unbury (Mr. Hanson) said, he was on the committee in 1927 and I [Mr. Lacombe.j
had the honour of being on that same committee. The late Speaker Lemieux was chairman of that committee, as our Speaker to-day is chairman of the committee which has brought in this report.
I do not think any member of the committee would pretend to ask the house to accept the report as a complete solution of all the problems that arise from time to time in procedure in this House of Commons, but I hope the house generally will feel that some improvement is offered by the report in this respect.
I do not propose to go into the report in detail, but I would refer to two or three of the proposed amendments. For instance, standing order 37 now Teads:
No member, except the Prime Minister and the leader of the opposition, or a minister moving a government order and the member speaking in reply immediately after such minister, or a member making a motion of "no. confidence" in the government and a minister replying thereto, shall speak for more than forty minutes at a time in any debate.
That forty-minute limitation applies not only when the Speaker is in the chair but in committee as well. As has been pointed out by previous speakers, any member in committee of the whole can make as many forty minute speeches as he likes, and, the afternoon session lasting only three hours, two or three members can take up the whole time of the house. It is with a view to improving that condition that this amendment is offered as section 2 of standing order 37, in these words:
Provided always that in committees of the whole, supply or ways and means, no member shall speak more than once on a particular motion, clause or item under consideration, and not more than twenty minutes continuously, but his right to ask questions relating to the subject matter of the said motion, clause or item under consideration shall not be thereby restricted.
To some extent that does cut down the time that a member may take up in committee, but I do not think it takes away any substantial rights that he may enjoy as a private member of the house.
The proposed amendment to section 2 of standing order 43 in effect adds to the rights of a minister of the crown as the rules now stand. That section reads:
A reply shall be allowed to a member who has moved a substantive motion, but not to the mover of an amendment, the previous question or an instruction to a committee.

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It ia now proposed that the following words be added:
... or the second reading of a bill, and to a minister of the crown who has introduced a government measure.
Once a minister has introduced a government measure, criticism or commendation is offered, and it seemed to the committee only right that the minister should have the privilege of replying to all that had been said regarding that measure, though under the rules as they are constituted at present he has not that right.
Then a recommendation is made in regard to questions asked on the orders of the day, which I know have been a source of worry, shall I say, to all Speakers of this house. The committee did not see fit to curtail the right of hon. members to ask questions of ministers on the orders of the day, and in that I heartily concur; but following the British practice it was thought that the procedure might be improved, and the committee has proposed that the following be added as section 5 of standing order 44:
A question of urgent character may he addressed orally to a minister on the orders of the day being called, provided a copy thereof has been delivered to the minister and to the Clerk of the House at least one hour before the meeting of the house. Such a question shall not be prefaced by the reading of telegrams, newspaper extracts, letters or preambles of any kind. The answer shall be oral and may be immediately followed by supplementary questions limited to three in number, without debate or comment, for the elucidation of the information given by the minister.
I hope the government will approve this recommendation, and that it will meet with the support of hon. members of the house.


Mr. ROY:: Mr. Chairman, at the moment I do not intend to comment on the recommendations that have been presented by this committee. Rather I should like to direct attention to another recommendation which in my opinion would be very desirable but which the committee has not seen fit to. include in its report. Citation 314 under standing order 41 reads:
It is a rule in both houses of parliament that a member must address the house orally, and not read from a written, previously prepared speech, for the reason that "if the practice of reading speeches should prevail, members might read speeches that were written by other people, and the time of the house be taken up in considering the arguments of persons who were not deserving of their attention."
It has been the custom of a great many hoa. members of this house to read their speeches, though roughly and freely; and when no objection has been taken Mr. Speaker has allowed
them to continue to do so. Unfortunately, however, some of those who usually read their own speeches would object to other hon. members being given the same privilege. In. my view this situation should be settled, and I had hoped that the committee might recommend that standing order 41 be done away with altogether, or on the other hand that the rule be applied strictly to all hon-. members of the house.


Mr. REID:: Mr. Chairman, it is some seventeen years since the rules of the house were last amended. I have been a member of the house since 1930, and before we go on to deal with the individual recommendations I should like to say a word or two in general. First, in reference to the remarks of the hon. member for York-Sunbury (Mr. Hanson), it is my opinion that hon. members did not send in suggestions to the special committee because we all realized that the committee was composed of members experienced in the rules of procedure; and speaking for myself, I felt that I could not make any suggestion of which the members of the special committee would not have personal knowledge already. As the hon. member for York-Sunbury was speaking, however, I noted his reference to the support he gave to the proposal that in committee of the' whole members should be limited to twenty minutes. If my timing was accurate the hon. member took a little over twenty minutes this afternoon, which indicates to me at least that we should be very careful not to change these rules too quickly .because in so doing perhaps we may shut off an hon. member who has something really worth while to say.
The hon. member for Vancouver East (Mr. Maclnnis) pointed out that we are at war, that certain changes are necessary during war time, and that after the war is over we might go back to the old rules. Well, Mr. Chairman, I -am not as sanguine as the hon. member "is in that regard, because every change that has been made in the past in regard to the rules has remained in effect. The fact that it is some seventeen years since the rules have been changed shows at least how reluctant we are to alter the rules which have to do with the conduct of the House of Commons. Very few hon. members have made a study of the rules, but I think most of us have at least a sense of what they should be, realizing that after all we have an important position to uphold and that we should set an example in decorum and good behaviour.
The hon. member for Gaspe (Mr. Roy) had a word to say with regard to the reading of speeches. I trust that what I am about
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to say will not be taken as a reflection upon the present Speaker or upon any hon. member of this house, because that is not my intention; but the reading of speeches has been a very sore point, shall I say, with many members of parliament. I am one of those who take the position that while there is a duty imposed upon members of this house to uphold the rules, there is also a duty upon those who conduct the proceedings of the house or the committee. The duties of members of the house are well expressed in the report brought down, where it is stated that-
Rules are not sufficient to preserve freedom of speech and to uphold the dignity of the House of Commons. Standing orders depend for their success upon the prevalence of good will amongst all members who have to -work under them. The house must rely on the forbearance of its members and on the general acquiescence in the enforcement by the Speaker of the rule -which requires that members should strictly confine themselves to matters immediately pertinent to the subject of debate.
That is all very true. When I first came to the House of Commons, like most new members I felt rather timid and on that occasion attempted to read my speech. But I had a difficult time in getting through, because one hon. member on the government side-we were sitting in opposition at the time-drew Mr. Speaker's attention to the fact that I w^as reading my speech; and the then Speaker, the present hon. member for Yukon (Mr. Black), rose I believe something like five times in an endeavour to have me desist from reading my speech. I shall not forget the example set for me on that occasion. It was a good lesson to me. I had come to the chamber with my speech fully written out, as a new member of the house. Had I been stopped on that occasion from reading I must confess the speech might not have been delivered. Perhaps it does not matter now whether it was delivered or not. The fact is that I was stopped. I did feel it keenly when, after that, I saw other hon. members deliberately reading their speeches. No member with any great sense of feeling likes to rise in his place and draw Mr. Speaker's attention to the fact that another hon. member is reading his speech. I did not do it then, although I might well have done it; and had I wanted to get back at members on the government side, I had reason to do it. I personally object to the reading of speeches; it is a dangerous procedure which has grown up in our House of Commons. I say at once that a well-read speech, if it is a good one, is much better than one which is not well delivered and may not contain as much good material, but 
it is better that the member express his own thoughts. After all however we had better be careful that we do not countenance the thoughts and mind of someone outside the house. It is the easiest thing in the world for individuals belonging to any party, or for independents or the members of any group, to have speeches deliberately written for them and handed to them when they are entering the house. It is very easy to read those speeches. I do not say this in any spirit of criticism, but I do believe we are drifting toward the American system, where members may hand in a whole speech. One of them, I believe, handed in the whole Book of Isaiah.


Gordon Graydon: That would be at least better than the speeches.


Thomas Reid: I offer that as an illustration to show to what extent the reading of speeches has progressed across the boundary line, and how we are drifting in that direction. As was pointed out by the then Right Hon. R. B. Bennett, it is not a good thing to introduce the 246th member into the house, when there are only 245 places.
I shall leave that part of my remarks by saying this, that I for one believe that the rules should be strictly enforced on everyone alike. I believe that in that event every hon. member will not object, believing that the rules offer ample assurance that every one of us may speak, no matter on which side of the house he may sit. All hon. members realize that we must have rules in the house, just the same as does a ratepayers' association, if it is to run its own show with decency and decorum. We would have bedlam and confusion on many occasions if half a dozen hon. members were trying to speak without having the rules brought into effect.
May I now return to one of the provisions in the suggested rules to which I think I shall have to take exception at the proper time. I refer to the suggested rule that a member may speak only once for twenty minutes continuously when the house is in committee of supply or ways and means. If that means that an hon. member may sf>eak only once on an item, whether it be for five minutes or twenty minutes, and that following that his right is only that of asking questions, I must oppose it. I would ask hon. members to give serious consideration to this suggestion. If it means something other than I have described, the wording is not clear. I shall not read the paragraph now, because we shall reach it later in the debate. I would view with alarm, however, any curtailment of the rights of members.

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I know that at times we refer to what takes place in Great Britain. But after all, the people of Great Britain are different from us. Their philosophy goes back hundreds of years and, more or less, they are all the same kind of people. On the other hand we are a new country to which people have come from all other countries of the world.
There are some who hold the view which I deprecate, that ability to speak is the sole indication of ability. I contend that is not always so, because many I have heard who have ability to speak had nothing much left of ability after they had spoken. We are living in days of public speaking. Every man in public life to-day must be able to hold forth. I remember a certain person being referred to as a Moses who would lead the people out of the wilderness. I said to the person who had made the reference, "I wonder . if you have read Holy Writ." You will find that when the man Moses was chosen to lead the children of Israel out of the wilderness his first remark to the Lord was, "0 my Lord,
I am not a speaker." The Lord in reply said, "I am not looking for a speaker; I am looking for a leader. We will get someone else to speak." All leaders in those days were chosen as such, but to-day our philosophy is different, and I do not know that it is all for the better.
I shall take these amendments into consideration, but I am afraid I shall have to vote against the limitation respecting the twenty-minute speech, if it means that a member cannot speak more than once on one item. Suppose a member is speaking on a certain item, and someone across the floor makes observations which should be answered; if the original speaker is confined to twenty minutes and has already used that time, he is denied the right to reply. Certainly I am not in favour of that, and I would ask hon. members to be careful how they vote when that amendment is before them.


Mr. POULIOT:: Mr. Chairman,, I pay
tribute to Mr. Speaker and to his predecessor, who is now one of our esteemed colleagues in the house, the hon. member for Yukon (Mr. Black), and to all 'hon. members of the committee for the work they have done. I pay tribute, too, to hon. members who have already spoken in a non-partisan spirit.
I have read the report carefully, and it reminds me of a remark once made to me by a learned theologian, a holy man who had listened to a sermon delivered by a young clergyman. I noticed the theologian was walking in the corridor and counting on his fingers. Afterwards I said to him, "Did you pray during the sermon?" He said, "No, I was
counting the heresies." If we read the preamble of the report we find there are many statements which stare at each other and put us under the obligation of accepting the report, not with a grain but with a pail of salt.	[DOT]
The first sentence reads:
Your committee, in the performance of the important duty assigned to it by the house, has taken into account the existence of general criticism of parliament both by members and representative citizens.
Whoever heard of general criticism of parliament, even by the press? There have been some tycoons who have tried to impose their views upon parliament, who have tried to discredit the work of members of parliament, but that is all. I should like the members of the press gallery to change places with us some day and let us pass judgment upon their work. I think they would find it pretty hard to do what hon. members are doing, not only for their constituents but for the Canadian people at large.
My first observation is that this report has been actuated by fear-fear of the yellow press and of certain club men who know nothing about what is going on in parliament but who pass judgment upon us while smoking long cigars between drinks of Scotch and soda. I deny most emphatically that there has been a general criticism of parliament, especially by members of parliament. For a member to do that would be for him to prove himself unfaithful to his colleagues. He would be forgetting the work that they are actually doing in this house for the Canadian people. If there has been criticism by representative citizens, it has been by only a handful of men who do not know what they are talking about.
The report goes on:
It has been fully realized that much is expected of the House of Commons where the views of the people are finding expression and where industrial and economic conditions are demanding parliamentary attention and solution.
Mark you, those are the words of an optimist. When have we been able to solve industrial and economic problems? We are called here simply to vote money and impose taxation. That is the only thing we have done since the beginning of the war. The report goes on:
The main question before the committee was whether procedure should be amended so that the house may be able to do more legislative work in the time at its disposal and increase its efficiency as a critical and controlling assembly.
We must read between the lines. In the first place, it is not the business of hon. members to initiate legislation; that is the duty of
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the government. A private member may introduce legislation, but it never gets beyond the second reading. Private members cannot be blamed if the legislation is not satisfactory. This part of the report is a reflection upon the kind of legislation that has been brought before the house by the government. It cannot be otherwise, because we are precluded from bringing in legislation. I quote again:
-and increase its efficiency as a critical and controlling assembly.
Note those words, "controlling assembly." That means the controlling of accounts, but we have no accounts. How can we control accounts that we do not have? Year after year I have insisted upon the reestablishment of the old system of accounting, and where did I get any support? I received some support from two of my friends in the Conservative party, the hon. member for Broadview (Mr. Church) and the hon. member for Davenport (Mr. MacNicol). I also received some encouragement from the hon. member for Lethbridge (Mr. Blackmore), the leader of the New Democracy group. I admit that the former leader of the opposition agreed' with me and with the other hon. members whom I have mentioned already, but he said we should wait until after the war to see to>
it. He admitted that the complaint was well-founded but thought it would be in the public interest to wait until after the war when we could discuss the whole thing.
There was a third point of view expressed by a member of the Conservative party. It was put forth by one of the members from Toronto who said that I was playing Hitler's game when I was doing some work for my own constituents and for the Canadian people. I was simply asking for information. That statement was made in plain language by one of the members from Toronto whom I would name if he were in his seat at the present time. It is pretty hard to be doing something in this house for the Canadian people and then be treated in that way by one of my colleagues. There is something lacking in this report. It should contain a provision to permit you to call to order any member who accuses any one of his colleagues of doing something to help the enemy when he is just trying to defend his own people. The report continues:
_ Criticisms of parliament seem to have been inadequately considered in relation to the whole structure of parliament, the necessary party system and the complex situation created by a war which is now in its fifth year.
And later on:
Parliament is the assembly of representatives elected by the people where great issues are 
debated, or should be debated; it is not primarily a body of auditors charged with the inspection of departmental accounts.
Two of those statements contradict each other. One states that the House of Commons is a controlling assembly and the other states that we are not a body of auditors. How is it possible to reconcile those two statements? I have referred to the attempts I have made to have proper public accounts and a proper report by the auditor general brought before us. Every cent expended by the treasury should be accounted for. What do we get? Practically nothing. The right of audit, which is the right of parliament has been taken over by the Department of Finance, by the comptroller of the treasury. The Minister of Finance alone has the right to approve the payment of items voted for any department. He is empowered with the right to audit those payments. The office of the auditor general has become just a mockery. I quote:
Freedom of speech is one of the inalienable privileges of members of the House of Commons. It is in truth the privilege of their constituents-
That is false. It is true to a certain extent, but it is not complete. We are not here only to represent our constituents. We are here, each one of us, to represent the Canadian people at large. And how does it work? It is very easy to understand. We are passing legislation that applies to every citizen of this country. Therefore a member of parliament does not represent only his constituents. A member of parliament, every one of us, down to the last man on the last row just as much as the Prime Minister and the leader of the opposition, represents the whole Canadian people at large. The report goes on:
The present procedure was devised to reflect the freedom of all the members of the house, but we must realize that in wartime parliament is bound to divest itself of some of its prerogatives in order to strengthen the government's power.
I am against it. I am against it for a very simple reason. It is that the power of the government is entirely different from the power of parliament. The power of the government, according to the British North America Act, is an executive power, and the power of parliament is a legislative power. The power of government is executive, the duty of the privy council being to execute the legislation passed by parliament. Therefore the suggestion in the report is contrary to the spirit of the constitution. I do not see how we can delegate our legislative powers to the government, although the thing is done. I know very well that the courts will support

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our one-man legislation passed by controllers of every description on account of the war. Nevertheless it is legally unsound. We cannot so delegate our powers as a parliament. By virtue of the constitution the government has the right to execute the legislative authority. But there is an old principle that is known by everybody. It is an old Latin axiom which is part of the Roman law. It is known not only to lawyers but to every man with the slightest touch of education. It is delegatus non potest delegare-a delegate cannot delegate again. But this is what has been done. We have so much external legislation passed at the present time, passed outside of parliament, in every war department, that it is impossible for any single member to read and check it all. There is no student of law to-day in any university who could pass an examination on constitutional or administrative law, taking into account all the orders that have been passed by dollar-a-year men.
There is something in this report that I do not understand at all. It says:
The principle of majority rule is a constitutional convention upon which all British parliamentary government is built but this must collapse in proportion as the principle of the protection of minorities begins to decay.
There are some philosophical considerations, and then we come to another contradictory statement in the report:
Your committee, in all its deliberations, has kept in mind the importance of not impairing the rights of minorities.
For otherwise, the principle of the protection of minorities "begins to decay", to use the words of the report. It goes on:
Two fundamental principles govern the procedure of the house. They are, that the government shall, so long as it can maintain a majority, be able to secure such legal flowers as it considers necessary for administration

That again is wrong, for the reasons I have already mentioned. My contention is that we cannot transfer any legal powers to the government. It goes on:
-and that minorities, however small, shall be able to criticize that administration. Standing orders must protect them, and it is all the more important that they be founded on right and justice-
Why?
-because they are merely resolutions of the house which can be swept away by a majority vote.
Is it not absurd, Mr. Chairman? The standing orders must be founded on right and justice, it says, because they are merely resolutions of the house which can be swept away
by a majority vote. That is why they are founded on right and justice. Again, the report says:
Your committee is of the firm opinion that these rights cannot be alienated even if the house, in maintaining them, may protract sessions and lay itself open to severe criticism.
They are ready to accept criticism now.
Fourteen recommendations are made by the committee. The first one is that one day a week be devoted to supply. Most of our time here, when we are not busy passing tax legislation, is devoted to a discussion of the estimates of the war departments. We have had twenty-six sitting days since the beginning of the session. The address was voted on the eleventh day, and from then on the house has considered only war estimates.
The second recommendation has to do with the suggestion of the allotment of a certain number of days for debates, with a view to saving time. The report says:
Our recommendation is that, when there is reason to believe that debate will be protracted, parties and groups recognized in the house shall confer and make arrangements either for allot-' ting days or laying any plan for saving time whilst protecting freedom of speech for every representative of the people who sits in this house.
It is doubtful how that would work. Theoretically the right of speech is the right of every hon. member, but a large number of members never exercise that right, and never will even with a change in the rules.
The third point mentioned by the committee was not a recommendation but an observation that war business has priority, and therefore government business has priority over private members' bills. Well, nobody will quarrel with that.
There is mention of the standing orders, and that there are 95 in the English house today. Once a member of the New Zealand parliament remarked to me, "What is the use of bothering about the rules of the house? There .are none." In fact, parliamentary practice is the common law of parliament; and parliamentary practice, which is based on the rulings of the Speakers, being a composite picture of all their rulings, is the best commentary on the standing orders.
We now come to the matter of compulsory voting. Why should we be forced to vote? Sometimes a member will not agree with either of two contradictory propositions. For a long time it has been the practice to allow members the freedom of voting or not voting when Mr. Speaker was in the house. I remember that on one occasion, when some hon. members refrained from voting, they had to leave the chamber when the matter was dis-
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cussed afterwards, but they were told that they were right, that nothing could force them to vote. I am against compulsion. If an hon. member is present and is dissatisfied with any proposal emanating from the government or from any private member, I do not see why he should be told to go out of the chamber, to go behind, the curtain, to hide himself, instead of exercising his right to remain here and not to vote. *
Then as to the appeal from Mr. Speaker's ruling, it is now proposed1 that the house shall divide only if division is demanded by twenty members. This is in, contradiction of the proposal for compulsqry voting. There is the further proposal that there shall be no appeal from Mr. Speaker's ruling. My object is not at all to cast any reflection on the ' wisdom of Mr. Speaker, but it is of the utmost importance to have the votes recorded in this house. Sometimes members speak in one way in the house and speak differently before their constituents. It is a very good thing that they should be on record as to, what they think is the best policy to follow. It should be an easy procedure to appeal from Mr. Speaker's ruling-not to cast any aspersion on his wisdom, which I recognize and to which I pay tribute, but just to, show where hon. members stand on matters of public interest.
Then there is the proposed amendment of standing order 37, relating to the number of times a member may speak in committee. As all hon. members enjoy the same rights, I do not see why any difference should be made between the right of any one and any other. In all fairness, what is good- for one hon. member, even though he be a cabinet minister, should be good for any other hon. member. Why should there be any exception to, the rule governing the time for speeches? I will go, further. If the length of a speech were curtailed to ten minutes to each member, I should have no objection, provided that cabinet ministers and private members were treated alike. I do not see why there should be any objection to that. Moreover,
I recognize that when we go into committee it is largely to ask questions of the minister in charge of the department concerned. It is said that there will be no restriction on the right of any hon. member to ask questions. But then we should come to an understanding that, when a member has a series of questions to ask a minister, nobody shall intervene to change the course of the interrogator; the member should be able during five, ten or twenty minutes to go on asking questions. But it is not so long ago-this was not under the present chairman, but one of his 
predecessors-that I was told from the Chair that when we were in committee we were there to make speeches, not to ask questions. I suffered very much at the time, and I got some experience which it is hard to forget.
Then there is something in the report about "tedious repetition". Well, this is governed by the law of relativity; it is dependent upon who is in the chair. I admire your patience, sir; I admire that of Mr. Speaker; but there have been sometimes in the chair gentlemen who were greedy for plums and who were ready to find everything tedious which was keeping the plum away. I respect very highly, sir, your wisdom and that of Mr. Speaker. But what happened in the past may happen in the future, and if we do not suffer from it now, other hon. members may suffer from it in the future, and it is our duty to protect them as best we can.	.
Then there is the matter of an amendment to a motion. I have just noted the fifth and the seventh recommendations-no appeal from Mr. Speaker's decision, but on the other hand, compulsory voting. How do they work together? It is most contradictory; it is illogical. On the one hand the report recommends compulsory voting, and afterwards it says that it is a bad thing because we shall not vote to appeal from Mr. Speaker's ruling. How many people composed that report without talking to each other before passing it over? It cannot work. If one thing is good, the other is bad. If compulsory voting is accepted there should also be an easy appeal from Mr. Speaker's ruling.
Then there is a reference to the fact that South Africa has abolished the debate on the address in reply to the speech from the throne. That is their business. Here an opportunity is given to members of all parties to express their views at the beginning of the session, to lay before the house the complaints of their constituents, and to say whether their constituents are satisfied or dissatisfied. That is their business and it is a very good thing because it gives the government a bird's-eye view of the Canadian people.
The question is not whether a member shall be able to make a speech that can be printed at the printing bureau and sent to his constituents as a masterpiece that will be translated two thousand years hence. That is not the question. The point is that a member comes here and informs the government and his colleagues of what has been going on, to his knowledge, since the last time parliament was assembled.
There is a proposed amendment, with regard to resolutions or votes in the house,

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that the procedure shall be simplified. When we have resolutions for the expenditure of money amounting to billions of dollars they are worthy of consideration, and it is precisely those men who complain about us in the yellow press, who complain about members who do their duty in this house, who complain afterwards about taxes. Well, we discuss the cause of taxation and it seems to me that in dqbate the cause deserves as much consideration' as the effect.
There is a recommendation concerning divorce bills. I object to the discussion of divorce bills in this house and also very strongly to their publication in the statute books, and the sooner parliament gets rid of divorce legislation the better.
Before closing my remarks I should like to quote from the report of 1925 on the rules of the house. The second paragraph of the preliminary note reads:
Your committee has adhered to the principle that the greatest freedom be allowed the house in both its debates and proceedings. Factors tending to restrict liberty have been eliminated. The tendency has been to restrict the number of rules and reduce them to a minimum, with the object that only absolutely necessary rules be enforced, so that the house will be more particularly guided by the general principles followed in British legislative assemblies and familiar to parliamentarians in Great Britain and the self-governing dominions.
That is a very fine statement of what should be the application of the standing orders in this house. There should be no atmosphere in this house. Of course, it is impossible to prevent it by standing orders; but how many times has not cowardice been imputed to members just because they were doing their duty in the House of Commons? It will be recalled that many times members of the government have risen in protest when complaints have been made against civil servants who were usurping the rights of parliament, who were more powerful than the Prime Minister, who had a salary that was twice that of the Prime Minister, men who were considered indispensable and untouchable, not in the Hindu sense of the word, but in the sense that it is impossible to criticize them, that they are high above criticism. I did criticize them, however, when the former government was in power, and I deny anyone the right to prevent me from doing so at any time.
Let me say this to the government, as a Liberal member of old standing who is true to the principles that he has preached since he went into politics years ago, which he preached at a meeting at which Sir Wilfrid Laurier was present and also in numerous other campaigns, on the side of the Prime Minister and on the
side of the late Mr. Lapointe and other members of the Liberal party: I believe in liberty, and I believe in liberty for all.


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


William Lyon Mackenzie King: The select
committee whose report we are considering at the moment was appointed to assist His Honour the Speaker in revising the - standing orders with a view to simplifying, accelerating, and expediting the business of the house. I think the time has come in this debate when this committee of the house might well consider how it can accelerate and expedite the final disposition of the report.
Mr. HANSON (York-Sunbury).:	There
should be free discussion first.


William Lyon Mackenzie King: As I said at * the outset, it is of course wholly for the committee to decide what it wishes to do. So far as the government is concerned there is no desire in any way to restrict or to direct the discussion, but I imagine hon. members generally have been asking themselves just how the debate should be conducted from now on, and what procedure should be finally adopted in reaching a conclusion.
If we look at the report, it appears to be divided into two main parts. The first is in the nature of general observations on matters pertaining to procedure, and I should think also some of the considerations that have governed the members of the committee in reaching the conclusions they have with respect to the proposed amendments. The second, the concluding part of the report, which begins at page 149 of Votes and Proceedings of March 3, 1944, sets out specific amendments to the standing orders which the committee recommends should be adopted.
We might well assume, I think, that so far as the first half of the report is concerned, if I may so designate it, hon. members should not be committed too literally to all the statements which it sets forth, or to all its observations. They are general in nature, and in voting for or against the adoption of the report, if we are expected so to do, we might well, I think, be allowed to have certain mental reservations with regard to the adoption of all that appears there. I mention that because I see, for example, at page 147:
The suggestion that estimates should be referred to standing or select committees has been given earnest consideration and carefully reviewed. It strikes at the root of ministerial responsibility . . .
I cannot accept that as a correct statement. For years estimates have been referred to
[Mr. Pouliot.3
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special committees at Westminster, and the parliament at Westminster is as careful in observing ministerial responsibility as any parliament in the world. Something may have been in the minds of the hon. members responsible for that statement which is not' apparent on the face of it, but if I were to support tlie report as a whole, as I intend to do, I should not like it to be asserted at some future time that this House of Commons had virtually determined that the reference of estimates to select committees would be striking at the root of ministerial responsibility and therefore should not be permitted. I had hoped very much that the committee might have found it possible to endorse the reference to a committee not of all estimates but at least of certain of them, while, of course, safeguarding the right of every hon. member to criticize the estimates in whole or in part when they came back to the house tor discussion. That has not been done, however, and I would not like to have it for' a moment assumed that it was not done because the committee 'was seeking to preserve some ministerial responsibility, which would have been lost if any such recommendation had been made.
The committee has laboured, I believe, under two handicaps, if I may so describe them. One has already been mentioned. It is, that the committee has been considering the revision of the rules in a time of war. I recall saying to the house last session that I doubted the wisdom of attempting any extended revision of the rules in time of war, when conditions were abnormal and the house had to give to the government certain rights which would not be expected at other times. For that reason it did not seem to me, at that time, advisable to appoint a committee. However, the desire for such a committee continued to be expressed and after giving the matter further consideration it was decided this year to have a committee appointed. Such limitations as we find in its report are due, in part at least, I believe, to the circumstance that the committee has been conscious of the fact that in revising the rules in time of war it should proceed very cautiously in order not to infringe in any way upon rights which hon. members certainly would wish preserved at all times as fully as possible. The other handicap, if I may so style it, has been the known wish that the committee should make its report at an early stage of the session; in other words, just as soon as possible. My hon. friend the leader of the opposition spoke of that when the committee was appointed; he said he hoped the committee would bring
'Mr. Mackenzie King.]
down its report very soon, and certainly not at the end of the session. I believe the committee should be thanked for having kept in mind the desire of the house to have it bring down its report as early as possible, and should be congratulated upon having brought its report before us within the space of a single month. If I may, I should like to take advantage of this moment to express to the members of the committee and to His Honour the Speaker, I may say I think on behalf of all hon. members of the house, the thanks of hon. members for the care and consideration they have shown in dealing with the revision of the rules, and in presenting their suggested amendments at so early a stage of the session.
The fact that hon. members did not make representations to the committee, though invited to do so, which has been mentioned already, is I think explained by what I have just mentioned. The minds of hon. members are concerned with a consideration of the great issues which are before the country and the world at the present time. The matter of the amendment of the rules of the House of Commons does not assume the importance that it would at some other time. However, the committee has submitted recommendations, some ten in all. Personally I am prepared to support the committee's suggested amendments. As one who has been in parliament for a considerable time, and has carefully observed procedure in this house, I might say that I believe the older members, if I may so express it-not necessarily in years but in time of service-will see the wisdom of the amendments that have been suggested by the committee in the reserved and cautious manner in -which they are phrased. I would suggest that at this stage the committee might take up the amendments one by one; hnve the Chairman call them and let us vote upon them. Then, after they have been accepted or rejected, in whole or in part the report as amended, if it is amended, or as a whole if the amendments should all carry, might if deemed necessary be voted upon.
That is all I care to say at the moment. I believe we should adopt some definite procedure in the further consideration of the report, and I offer these suggestions, not as coming from the government but as coming from one member of the house, in regard to the manner in which the contents of the report may be dealt with more rapidly than might otherwise be the case, and that we may take up without the delay that might otherwise occur, other matters that are of great concern.

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Mr. NEILL:: I am sorry I was called outside and was not able to listen to the debate on this report, with the exception of the remarks of the first two speakers and a portion of those of the Prime Minister. I shall have to do the best I can with my own preconceived ideas, and later on see in Hansard what were the views of other hon. members.
This report is presented to us in rather unusual form. Generally a committee report begins by setting out the members of the committee and the reference. That is not ' done in this case; this report plunges into the middle of things without making any previous references at all. It does not even say what was the subject of the reference to it. We are not told how many meetings were held or what witnesses were called; we are left in total ignorance in that regard. The Prime Minister said that ten amendments were proposed, but there are also some five or six other recommendations of a negative nature that is, recommending that something be not done, so that we may take it that in all there were some fifteen or twenty recommendations. The Prime Minister suggested that we should take up these proposed amendments one by one and adopt or amend or reject them, but I doubt that we can do this; the very wording of the report forbids it. The committee does not say, "We recommend one or two or three amendments." The amendments are not put in separate paragraphs;-we have a series of vague generalities, with an occasional definite recommendation, followed by an expression of the general views of the committee on the subject. We would be in a queer position indeed if the Chairman wanted to refer to a particular recommendation and I said, "Well, I want to move an amendment to that recommendation, which you will find about the middle of the third page, starting in the fourth paragraph and ending in the fifth," but really not beginning or ending anywhere. I do not think the report is in a form that permits us definitely to discuss it. We cannot tell whether there are ten or twenty recommendations; the report is in a sort of conversational style, so to speak.


William Lyon Mackenzie King: May I ask if my hon. friend has noticed the first line on page 149, which reads, " The following amendments to the standing orders are recommended," and then they are set forth one by one. It is that portion of the report which I suggested we might consider.


Alan Webster Neill: Yes, so far as the page and paragraph the Prime Minister mentions, that is correct. But there is a lot more which is not important at all, and you have to dig for them in one paragraph or two paragraphs of
verbiage which do not contain any recommendations of themselves.' You do not know where you are.
It seems to me that we must accept or reject the report in whole or in part. And that means giving great power to whoever-and it is not indicated who-shall have power to make these revisions.


William Lyon Mackenzie King: May I interrupt the hon. member for a moment. I am sorry to interrupt him, but I noticed that he came in while I was speaking. Before he came in I had touched on the very matter he has now mentioned. I had said that the first part of the report was very general, and that I thought we should not, in voting on the report, be regarded as committing ourselves too literally to anything which appeared in that part. I stated that in my opinion it was mostly in the nature of observations and a discussion of certain considerations. But I pointed out that the amendments were specific, and suggested if we were going to continue considering the report, and make headway with it, we could perhaps make more rapid headway from now on by taking up the amendments.


Alan Webster Neill: I am gratified to find, from what the Prime Minister has said, that my views are so entirely agreed with by him. I agree that the first part of the report is a series of generalities, and to some extent that criticism may be made of the latter part as well. But I took the report as a whole.
We are now going to give to someone the power which will amend these rules, and they will be there for a very long time-because it takes many years before they are revised again. Of late years there has grown up in the southeast corner of the vineyard a little group of political Adullamites who own allegiance to no one. We might call them groups, or political groups, groups having quite a few different classifications. There are independents, semi-independents, and so on, including myself. I see my long-enjoyed title of being the only independent in the House of Commons has been wrested from me, and I find I have come to the day when there are many other and different sorts of independents. But I would like to tell them that their rights as individuals are at stake to-day, and if they do not fight for their rights to-day they will be in a sorry state by and by.
Not one of those hon. gentlemen was on this committee. Yet if we listen to them, and take their word for it, they represent a great many people. But the committee was composed of people who were thoroughly safe, men who could be depended upon to do the right thing, and to do nothing outrageous. You hon.
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gentlemen in the lefthand corner are left entirely out of the picture-and so was I. And we shall all suffer alike.
While I am on this subject may I suggest to hon. members opposite that they are in power to-day with a huge majority, and they can pass these amendments quite easily. They will get all the advantages which will accrue to the government of the day. But the day will come when they will not be over there. They will be over here, and they will be faced with what they are doing this afternoon. They will pay for it, when they find themselves on this side of the house. Remember that things do turn round, and if you play fast and loose with the privileges of individuals to-day you are likely to endanger your own safety as a party later on.
Let me quote one sentence out of the beginning of this report, which the Prime Minister damns with faint praise:
Your committee, in all its deliberations, has kept in mind the importance of not impairing the rights of minorities.
It has, has it? Well, if they have kept that in their minds, it is still in their minds, for there is very little evidence of it in this report.
However, I must hurry on to the next point dealt with. I agree with that portion of the report which says that the house should not send the estimates to a special committee. But I see the remedy they suggest is that we should limit speeches to twenty minutes in committee, and only one speech.


An hon. MEMBER:: On each item. '


Alan Webster Neill: Yes, once on any particular
item. They also recommend that when the yearly estimates are brought down, one day a week should be set aside for consideration of supply. I shall deal with that suggestion. That sounds pretty good.. But if hon. members will remember, after the war is over we will go back to ordinary routine, which includes only three hours on Wednesday. It might so happen that if the government did not wish to have the estimates discussed at any great length, they could happen to pick Wednesday for that day on which there would be full discussion.
Then the report says, and I call the attention of the committee to what they say:
We therefore recommend that, when the yearly estimates have been brought down, one day a week be set aside for consideration of supply.
But what guarantee is there that they will be brought down before the last week, or before the closing of the session? Then we are still in the same position.
What about the twenty-minute rule? Well, I am up in my room, or some other hon. mem-

ber may be up in his room-we cannot always be here-and the bell rings. I hurry down to the chamber. I do not know what it is all about. I turn to my right to a man who happens to be a good Liberal, of his sort, and I say to him, "What is going on?" He says, "This is a vote just coming on." "Which way should I vote?" "Why, vote Liberal, and you will be quite all right."
But perhaps I am doubtful-although he is an important member. Because of my doubt I turn to my left, to a man who is a bigoted Tory'-the hon. and highly respected member for Haldimand (Mr. Senn)-and I say to him, "A vote is just going to be taken, how shall I vote?" "Good heavens, Neill, there is only one thing to do; vote with us." And I have to vote. If I do not vote I am placed in a position of the greatest disgrace which can befall a member of parliament. I am named-and that means a terrific disgrace-one which I have never been able to fathom, exactly. But it is a bad thing indeed. I do not know anything worse in parliamentary procedure. I have to vote either yes or no.
Where is the necessity for this? Who asked for this? Away back in the local house of British Columbia many years ago I believe there was a ruling that one might please himself, but if he did not vote his name would be writen down as having voted against the proposal, with the idea that one must be a moss-back, and did not want any change. That was the idea.
When I first came to this house a certain rule was in force. I have seen it in operation against our lady member of that time, Miss Macphail. She was told she would have to vote one way or the other. She did vote, with her accustomed grace, but not with very great willingness. That procedure went on for a while. Then some man began digging around the rules, and the British practice was looked up. That is always held out as an example to us. As I say, the procedure there was looked up and it was found that their procedure was the other way round. In the days of the then Speaker, the Hon. Mr. Lemieux, that position was allowed. And it is still allowed, namely, that one does not have to vote unless he likes.
Not very long ago I, myself, was glad to take advantage of it. I had heard the evidence on both sides, and when the vote came I sat in my seat and did not vote either yes or no, because I did not believe either side was putting forward a satisfactory case. I have forgotten the details now, but I know that at the time I felt I was thoroughly justified

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in exercising my privilege of not expressing myself on a matter, the arguments supporting neither sides of which appealed to me.
There has been no trouble all these years with that ruling in force. Why dig it up now? Why compel us now, when we are getting new ideas in the house, new groups which have to sit back where they cannot hear what is going on. Yet you are going to compel them to vote yes or no. We all know what the acoustic qualities of this chamber are. There was, in my opinion, no need to introduce a suggestion of this kind.
I was going to say something about the twenty-minute limit on speeches. Well, that sounds pretty easy, too-twenty minutes on one subject. That sounds as though it would be sufficient to talk on one subject, because in committee one can say a great deal in that time on one subject only. But let us see how it works: A man has some grievance about something or another, and he rises in his place and airs his views before the minister. He holds the minister up to ridicule, obloquy or reproach, or perhaps he may eulogize the minister. Anyway he shoots off whatever he has to say. The minister, knowing the situation, just sits tight. He does not do anything -and that fellow's chance is gone, because he cannot speak again. He cannot rise again, because he has already spoken. The minister, or the man of whom he is complaining, has only to sit tight, and this member has no chance to say any more.
I recall an occasion not long ago which, to my mind, is a good illustration of the need to keep the rule we now have. I can recall one occasion when an hon. member had spoken upon some subject to which he had patently . given considerable thought. It was a matter requiring an extended illustration, so to speak, but when he reached the end of his forty minutes he was told that he must sit down. He did so reluctantly, and then the Prime Minister with his usual gracious manner rose in his place and said it was a pity to choke off this man and he hoped the few words he was saying would serve as a break in order that the hon. gentleman would be allowed to go on for another forty minutes. There are occasions when it is advisable to allow a member to take more than forty minutes especially when we know that all the minister has to do, if he so desires, is to sit tight and he need not give any explanation. If at all possible I would vote against that particular amendment, although I do not say that I will vote against them all because I realize that some are quite necessary.
The recommendation in connection with the length of debates reads as follows:
Our recommendation is that, when there is reason to -believe that debate will be protracted, parties and groups recognized in the house-
Just put that in your pipe-"recognized".
-shall confer and make arrangements either for allotting days or laying any plan for saving time whilst protecting freedom of speech for every representative of the people who sits in this house.
Where are the groups in the far corner going to get representation when this conferring takes place? They are not recognized as groups. They are put of the picture, and so am I. We used to have some rights. I certainly will vote against this proposal.
The next recommendation has to do with private members' days. With the exception of the newer members, we all remember when we used to have certain days at the beginning of the session when we could debate any resolution on any subject. Those days have been taken away during the war because of the necessity, put forward by the government, of getting on with the war business. I agreed to that. I would still vote, although very reluctantly, for that because I know how it would go. The committee decided that they had better not monkey with that, so to speak; they say that perhaps this had better wait until normal conditions return before private members' places in the house can be fully considered.
When that principle was introduced I knew that we would pay for it, and we. are now going to pay for it. The question of whether this privilege is to be restored will be discussed later on. We accepted the statement of the government in good faith that when this right was taken away it would be returned immediately the war had ceased to be. Now it is proposed to wait until normal times to reconsider these rights. They are just going to consider whether we are to get our rights back when it was solemnly pledged at the time they were taken away that they would be returned immediately the war was over. This is just an illustration of giving a man an inch and having him take a good deal more.
At the present time five members can bring about a vote to appeal from the Speaker's ruling, but it is now suggested that this number be raised to twenty members. I understood that this committee was devoting itself to the liberty of the subject and the retention of our private rights. Perhaps five is too small a number, but surely the smaller groups have a right to express themselves in
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the house by means of a vote. Although the vote may be against them they have shown to the people the feeling that exists in the house and they have been able to discover how many members are willing to support them. I think these votes should be permitted provided they are not carried to absurd lengths. I certainly would object to making it twenty members because that would be reducing the liberty of the minorities.
I cannot understand how the highly respected members who made up this committee stood for the passing of the next amendment. They and those who come after them will regret it for many years to come. Under this new rule the right would be given to the Speaker to decide whether or not a matter was of urgent public importance, and that decision would npt be appealable. If the Speaker is to be allowed to make that decision without the right of appeal, what is to become of the very basis of democracy about which we have talked so much? The Speaker may or may not be informed about the subject. Many things come up about which the Speaker cannot be fully informed, and he might be giving a perfectly fair and honest decision when he ruled that the matter was' not of urgent public importance. Hon. members who come from the section of the country affected by the condition complained about are the ones who know. There may be some question of seals in British Columbia which eastern men would know nothing about. We all have our particular problems; we know how urgent they are.
This right is to be taken away and the Speaker is to be given the right to say, "I do not consider the matter as being of urgent public importance." I have the greatest admiration for our Speaker, but there have been occasions-some of the older members will remember them-when the government was in a desperate position, when every vote counted. I heard of one case where a train was chartered at a cost of about $1,200 in order to bring in only three votes. Human nature is human nature, and when the fate of a government is hanging it is quite possible that the Speaker might be tempted to lean a little and to say, "I do not think this is a matter of public urgency," and thus save the government. This right of appeal to the house has been our practice ever since confederation and I would rather vote against the whole thing if this amendment is to be included.
It may be said that I am exaggerating because this amendment does not abolish the right of a member to move the adjournment of the house in order to discuss a matter of 
urgent public importance. But it must be remembered that such a motion always comes from the left of the Speaker. It is an effort to direct attention to some grievance to which the government may be indifferent. It is always a member on the left of the Speaker who moves the adjournment of the house, and after this there will never be a chance to move the adjournment because an indifferent Speaker will always say, "I rule that the matter is not of sufficient importance."
There is another paragraph in the report, which says:
Your committee does not recommend radical changes in the rules of the house.
I think they have recommended some very radical changes, and I entirely endorse the idea expressed by the Prime Minister that we should vote on the recommendations one by one, but we cannot do that in the form in which they are now. It would be like playing a game with peas on the table. You could not tell which pea was which. I suggest that the debate be adjourned-I do not move it-so that the recommendations may be put in concrete shape and numbered, and then let us pass on them one by one.
There is one thing more I should like to say. This committee, which was composed of some of the brainiest lawyers and some of the most experienced parliamentarians of the house, sat I do not know how long, but they missed the very crux of the thing on which they should have made recommendations, a thing which has been a sore spot in our political life ever since we have had a history, namely, the question of the government's being defeated and having to resign because of an adverse vote in the house. I do not know whether it was in France, but I know that in New Zealand and in Australia, and I have seen it in the house at Victoria, where the * government had a very small majority and they said: We are not going to abide by this foolish custom of resigning if the government is defeated on some trifling motion such as, should we adjourn at five or six o'clock; we are not going to throw the country into a turmoil because the government happens to be defeated on a vote because one member happened to go out to get his hair cut; we will not pay any attention to that and resign because we were defeated unless the resolution on which we were defeated contains the words, "and this house has no confidence in the government."
For many years it was the invariable custom for a government to carry on after a defeat until the Prime Minister had met the house-it might be a week or a month later-the leader of the opposition would then move that the

Rules oj the House
house had no confidence in the government, and until that was done the government never felt it necessary to resign. But as it is now, if the government happens to have only a small majority in the house, which is a good thing for the country, although perhaps not so good for the politicians, if the government gets defeated on some trifling matter-it might be no more important than whether we should adjourn at five or six o'clock to-morrow night- if the government is defeated because of some member getting his hair cut or breaking his pair, it is heralded all over the country, "Government suffers defeat in the house." It might be over the most trifling thing. It might be over some clause in a bill, whether we should put in "six weeks" instead of "two months", or a trifle of that kind. Surely we older members know what a curse that has been to good government in Canada. I put it to the conscience of everybody here if we have not many a time had to vote for something we did not wish to vote for because we felt that it would be worse to see the government defeated. But never a man spoke in the committee on this important question. That would have been a practical thing to talk about. I am sorry that the committee did not recommend that the government should not be defeated unless the words of the resolution contained the precise expression, "This house has no confidence in the government." Would that not be a good thing for Canada? Of course it would, and we all know it in our hearts, although we may not have the courage to say so. That was the most important thing of all which the committee failed to discuss. I think we should adjourn this debate, get the amendments put in definite and concrete form, and then to-morrow vote upon them separately, instead of having to go hog-wild and swallow a whole lot of stuff we do not want at all. The Prime Minister has hinted at that, and my suggestion is, to make it more practicable, that we have the recommendations printed in concrete form and numbered so that we can vote on each one separately.


Mr. CHURCH:: The work which has been done by the special committee on the rules of the house will do a great deal to restore confidence in and the prestige of parliament throughout the country.
I wish to compliment the chairman of the committee, His Honour the Speaker, who in the discharge of his duties here since the war started has been most fair to all parties in the house. I should also like to compliment the Clerk of the House upon the splendid work he has done for parliamentary institutions since he has held his present office. I
also wish to compliment the member for York-Sunbury, who acted for the opposition on the committee.
After all is said and done, Mr. Chairman, our parliamentary institution and its efficiency justify the high praise which the Prime Minister of Great Britain, Mr. Churchill, bestowed upon parliamentary institutions in the mother country and throughout the empire. The position of a private member has not changed very much since Edmund Burke's days. The private member is in effect the connecting link between the government of the day and the electorate, and when he fails to function, all parliamentary government is at an end. The private member has been referred to in the committee's report, which I am glad to see follows the splendid endorsa-tion given by Mr. Churchill as to the necessity for a declaration of rights, much along the line of Edmund Burke's famous statement of the functions of a member.
I am sorry that the committee recommends that supplementary questions be limited to three. We have now, when you take in all the parties, below the gangway, six or seven or eight leaders in this house. Yet the committee recommends that only three supplementary questions can be asked. That does not give much opportunity to criticize and cross-examine and find out the truth about war matters. I would like to have seen more latitude allowed in supplementary questions. If hon. members will examine the British Hansard they will find several pages of questions asked directly bearing on the war. Ninety-nine per cent of the questions asked there are about the war and its conduct. This is what helped to improve the conduct of the war in January, 1942. In the debate on the address there was a lengthy criticism lasting for six or seven days on the conduct of the war on the land, on sea and in the air, with the result that reforms were introduced and adopted by the government.
After all, criticism is a tonic which stirs a government to action. Criticism that is founded on facts, and not on political bias, stimulates the efficient conduct of public business. I hope the committee's recommendation will prove to be a start in the right direction. It was private members in 1927, 1929 and 1930 who prevented three important bills from going through as they were presented. One was a bill to give away the water powers on Georgian bay and in the Ottawa valley to a particular interest, and it was due on account of the united opposition and criticism of the official opposition that that project was defeated. Otherwise all the water powers in
Rides of the House

the Georgian bay and along the Ottawa valley would have been given away at that time. Secondly, regarding the extension of an insurance company bill, which the privy council decided that parliament had not the power to enact, if the recommendations of the opposition on common stock investments had been adopted, large sums of money would have been saved to policyholders in the companies in respect of investments lost in common stocks extraterritorially. The same applies to the Bell Telephone company, when a $75,000,000 increase of stock, mostly of water, was put in the bill, mo^t of it affecting Ontario; criticism by private members at that time did a great deal to preserve public rights. Each of these very important bills gravely affected the taxpayers.
When all is said and done, this is the only forum in which the man in the street can get his grievances remedied. We should assert the rights and privileges of parliament along the lines I have indicated. The prestige of parliament during the present war has been materially diminished because of the way in which parliament has surrendered its rights, powers and privileges to control bodies and the like, with the result that parliament has to them abrogated all its rights and privileges.
In my opinion the resolution which the committee considered did not go far enough. In the session of 1926-27 I wanted to have a committee appointed to deal with constitutional, parliamentary, cabinet and law reforms. The subject was debated for several days.
Take constitutional reforms. Why should there be all this difference of opinion between the federal authority and the provinces? Surely there must be some way of getting together on a number of matters which are most important to our domestic economy. The duty of the opposition is as far as possible to support in a war the government of the day, and the government has received pretty good support from the opposition, including private members, since the war started. I wish to see the business of the house conducted with dispatch and efficiency and shortened as much as is reasonably possible.
With regard to parliamentary reform, how is it that we have in another part of this building, in another place, one branch of parliament which is away pretty nearly the whole session? Surely there is some way of achieving a reform such as was accomplished fifteen years ago in England between the two wars, whereby the House of Lords was reformed and the efficiency of the British parliament increased. Something should be done in this session along that line. If we are to have a second chamber 
it should carry out its functions and help the House of Commons and the government in transacting the country's business.
The last two matters, with which I will not deal at this time, are cabinet reform and law reform.
I wish to compliment the committee upon the good work it has been doing, and I hope its task on the other matters I mentioned is not finished. There is much more which can be done in the directions to which I have referred, and I hope it will be undertaken in the recess of parliament. The committee has acted promptly and fulfilled the functions assigned to it, but many other matters might have been considered. I believe the report will commend itself to the wisdom and judgment of the country, and do something to restore the prestige of parliament, which has been waning for reasons which I have already mentioned.


James Allison Glen: The debate has taken much longer than I anticipated it would, and it is necessary that something be done with regard to the report. The recommendations are made in a form which enables them to be put to the committee and discussed separately; but it will not be possible to do so this evening. I therefore suggest that the committee report progress and ask leave to sit again on another day, when, if the committee so desires, we may deal with the amendments which are printed on pages 149 to 152 of Votes and Proceedings.
Progress reported.



GRANBY MINING CORPORATION


[Stage Direction]
On the orders of the day:
Mr. M. J. COLD WELL (Rosetown-Biggar):: Before the orders of the day are called, I should like to direct a question to the Secretary of State. Yesterday a return was tabled to a motion for:
A copy of all orders in council, correspondence and other documents relating to contracts made between the Granby Mining Corporation, of Princeton, British Columbia, and Japanese interests, together with a copy of such contracts submitted to the government from time to time for its consideration or approval.
The return contains some correspondence, beginning October 22, 1940, with the Japanese minister to Canada and others, and I find, in the first letter of the Japanese minister, this statement:
The import of copper into Japan has been conducted by a Japanese rirm under a three-year contract signed in July, 1937, with the Granby Consolidated Mining and Smelting Com-

Granby Mining Corporation
pany of British Columbia for its entire output of about 5,000 tons monthly, playing no small part in the economic relations between Japan and the dominion. In the spring of this year this contract was renewed with the approval of the Canadian government.	.
I can find in this return no document relating to the contract or giving the approval of our government.


William Lyon Mackenzie King: I cannot at the moment recall the correspondence, but I believe that somewhere there is a communication which states that that assertion is incorrect, that there was no approval by the government of any contract. If my hon. friend reads farther on in the correspondence-


Thomas Miller Bell: I have read it through.


William Lyon Mackenzie King: I am speaking from memory, but my impression is that the government had nothing at all to do with approving the contract; which was a private transaction. I believe that is stated somewhere in the same correspondence. Whether it has been brought down or not I cannot say.


Thomas Miller Bell: I raised it in the house in 1940 and my understanding then was that it was stated the government had given its approval.


William Lyon Mackenzie King: I do not
think so.


Thomas Miller Bell: I was just looking for
that, I may say.


Gordon Graydon: I am not aware of the circumstances surrounding the basis of the question, but I take it from what the hon. member for Rosetown-Biggar says, that there was a contract between a Canadian corporation and the government of Japan. Surely our government would not have anything to do with approving a contract of that kind in a war-time period. I was wondering what the circumstances were.


Thomas Miller Bell: Not between the Canadian government and Japan but between a Canadian company and a Japanese concern. I understand they had to get the approval of our government, certainly after September, 1939.


William Lyon Mackenzie King: My hon. friend will recall that Japan was not an enemy of ours until two years after the European war was started. As far as Japan was concerned, it was neutral until the war had been on for more than two years. I shall be happy to call the attention of the officials of the Department of External Affairs to what my hon. friend has said and see that a clear statement it made to the house on the point.


Gordon Graydon: The Prime Minister
might also give consideration to the question of government policy covering a period which perhaps is a long way off now, but which at the same time has to do with this whole question of selling materials to neutrals of certain types. It is one that has caused no end of concern to the Canadian people. It is one that ought to receive some consideration.


William Lyon Mackenzie King: Very careful consideration was given to that particular matter, consideration which involved not merely the government of Canada but other governments as well, and our policy was based on a consideration of general policy after consultation with the governments immediately affected. That is all I can say at the moment.


Gordon Graydon: We have to be careful as a nation to make sure, that we are not supplying materials of war in an interim period like that to those who may be our enemies in the future. I realize that it is a difficult situation but it should receive consideration.


Stanley Howard Knowles: May I ask the Prime Minister, at
the same time that he is looking into this situation, if he will have the Department of External Affairs or the appropriate department look into the stories that have been given currency south of the line to the effect that we are shipping war materials to Spain at the present time.


William Lyon Mackenzie King: Stories to what effect? I did not hear.


Stanley Howard Knowles: Stories to the effect that Canada is shipping war materials to Spain at the present time. I am merely asking the Prime Minister to have the matter looked into.


Thomas Miller Bell: It has been given over the radio in the United States.


William Lyon Mackenzie King: I shall have the matter looked into, but it is a little difficult for the government to take up the many rumours that are in circulation at a time of war. Any concrete question-and I may take what my hon. friend has stated as sufficient for that purpose-can be answered; but I should not like it to be assumed that the Department of External Affairs must take account of general stories and rumours.


Stanley Howard Knowles: Except that a statement of that kind given such a wide hearing over the radio is very serious. .

Industrial Development Bank



NORTHWEST FIELD FORCE (1885) QUESTIONS AS TO PENSIONS OR OTHER ALLOWANCES

[Stage Direction]
On the orders of the day:
["We called two items on Monday afternoon to give an opportunity for amendments or discussion according to the desire of any group in the house.\nProgress reported.\nOn motion of Mr. Ralston the house adjourned at 10:55 p.m. until Thursday, at three o'clock p.m., pursuant to special order made Monday, February 21, 1944.\nThursday, March 9, 1944"]
Thomas Langton Church: I should like to ask the Minister of Pensions and National Health (Mr. Mackenzie) a question. I have received a great many communications with reference to some form of relief for the northwest field force. I suggest that the minister give about half an hour on going into supply some day to a consideration of the question.


Thomas Vien: That question should not be asked on the orders of the day.



[Stage Direction]
On the orders of the day:
Gordon Graydon: I did mot give the Prime Minister notice of the question I am about to ask and it is perhaps unfair to ask it now, but I suggest that the house ought to be acquainted at the earliest possible time with the progress that has been made in the recognition of the new government of the Argentine. The process of change of government, as appears by the press, would indicate that there have been some changes of a rather major kind there, and we ought to know as a parliament what progress has been made so far as the recognition or non-recognition of the present regime is concerned.


William Lyon Mackenzie King: I will give a statement on Thursday.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


INDUSTRIAL DEVELOPMENT BANK
[Stage Direction]
The house_ resumed from Thursday, March 2, consideration of the motion of Mr. Ilsley for the second reading of Bill No. 7, to incorporate the Industrial Development Bank.
Richard Burpee Hanson: Mr. Speaker, I had just concluded a few preliminary remarks on this bill when the debate was adjourned the other day. What I have to say to-night will be, I hope, entirely

objective and perhaps constructive. I shall have some criticism of the undertaking to offer, and will endeavour to express the hope that the promoters of the ideas underlying this measure will not be frustrated in their aims and objectives if the policy outlined by this bill is put into effect.
I should like to say, and I do so with a good deal of candour as well as kindness, that I was greatly disappointed at the remarks of the parliamentary assistant to the Minister of Finance (Mr. Abbott) in introducing the bill. This is a new principle in the financial structure of Canada; new to him, new to me, new to the country, and I think the house and the country were entitled to a good deal more information than we were given by the hon. gentleman. In particular I suggest to him that he failed to show affirmatively and with a reasonable degree of effective logic that there is a substantial need for such an institution as the proposed industrial development bank. Of course in the post-war period a great deal will depend upon what is the tax structure of this country; a great deal will depend upon the other measures envisioned in the speech from the throne and incidentally referred to by the hon. gentleman as the programme which the government conceive will meet the problems of unemployment or rather, shall I say, the problems of full employment in the post-war period. This is but one chapter, and I suggest that if we are to have full employment in the post-war period we shall require a very much larger picture than has been painted by the hon. gentleman with respect to this bill. Concurrent with this measure, in the course of the next few days the revised Bank Act will be brought diown; and I suggest to the hon. gentleman, to the house and to the country that it would have been the part of wisdom to have these two measures brought down together in order that we might have seen the full picture and the full measure of the government's proposals, if they have any, with respect to the vexed questions of currency and credit and, shall I say-and I mention it with bated breath-what is sometimes termed monetary reform.
So that I say to the hon. gentleman that I was rather disappointed at the meagre and sketchy outline he gave in connection with this measure. He stated that the proposed bank would not compete with the chartered banks. In one respect that is quite true; the bill prohibits this bank from accepting deposits. Its resources will depend upon the subscribed and paid-up capital stock, which will come from the funds of the Bank of Canada;

Industrial Development Bank
and if we may judge from the report of that bank, which we have received, and from the statements we read from time to time, the funds that will go to subscribe for the capital stock of this bank will come from the deposits of the chartered banks in the Bank of Canada. Then there is provision for the issue of the bank's own securities, in the ratio of three to ' one having regard to the paid-up capital and the reserve. The total picture, if there is a great need, is not one of very great vision. I estimate that possibly $100000,000 in all will be available for all the functions of this bank; and in a country with the national income of eigfcit or nine or more billion dollars a year that is not a very large gap to fill. If it is to be effective, that is but the proverbial drop in the bucket.
What is the need? The need is said to be that of an intermediate credit which is not filled by the chartered banks, by the mortgage companies or by the investment bond houses. I do not know what is in the minds of the managers of the chartered banks or of these other institutions, but I have very grave doubts whether this bank will not infringe upon the functions of these institutions. I would assume that it would be a substantial detriment to the investment banking houses of this country if it is to have any scope in the financial economy of Canada. Of course with respect to both these classes of lenders, the chartered banks and the investment houses, the proof of the pudding will be in the eating, and only time will tell. Therefore I revert to njy earlier suggestion, that if this is only a part of a larger scheme we should have the whole scheme before us at one time, so that the house may be enabled to judge as to the sufficiency of the whole scheme to provide full employment in the post-war period.
The preamble to the bill expresses the pious thought that it is desirable to establish this bank to promote the economic welfare of Canada by increasing the effectiveness of monetary action through ensuring the availability of credit to industrial enterprises. What does the hon. gentleman mean by "the effectiveness of monetary action"? That is the first question which naturally arises in my mind, but we are left entirely in the dark. I imagine that our hon. friends in the far corner will have something to say in regard to that problem. Then the preamble continues:
. . . through ensuring the availability of credit to industrial enterprises which may reasonably be expected to prove successful if a high level of national income and employment is maintained. . . .
I pause here to make this suggestion, that if there is such a high level of national in-100-80
come in this country, no such bank is necessary; private enterprise will take care of the whole position.


Mr. MACKENZIE (Vancouver Centre):: It never did before.


Richard Burpee Hanson: But we did not have a national income as high as this; we never had it, and I suggest again what I have suggested on more than one occasion in this house, that the national income of this country to-day is a fictitious national income based on government borrowings and government spending for non-essentials. 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.


Ian Alistair Mackenzie: No, ho.


Richard Burpee Hanson: Well, the hon. member says, "No, no." I wonder how much he knows about what is in the womb of the future, any more than the rest of us?


Mr. ROSS (Souris):: The government will find it tougher going then.


Ian Alistair Mackenzie: Thanks for telling us we shall be here.


Richard Burpee Hanson: My only fear is they will not be there to take the gaff when it comes. I do not wish to get into any political discussion, but how much better would it have been for us if hon. members opposite had been returned to power in 1930, and they had had to take the gaff of the depression- a depression which they created with policies of their own making, so far as Canada is concerned?


Ian Alistair Mackenzie: Better for the country, all right.


Richard Burpee Hanson: Would it have been better for the country?


Ian Alistair Mackenzie: It would have been.


Richard Burpee Hanson: I do not think so. They would have had the grief we had, and I am sorry they did not have it.


Ian Alistair Mackenzie: Well, at least the hon. member is frank.


Richard Burpee Hanson: I certainly am; I am always honest. The preamble states: "If a high level of national income and employment is maintained". By doing what? It states, "by supplementing the activities of other lenders and by providing capital assistance to industry with particular consideration to the financing problems of small enterprises".

Industrial Development Bank

There is one thing in that preamble which brings some aid and comfort to me, namely, the recognition of the principle of private enterprise. I mention that for the benefit of my hon. friends to my immediate left, who are always saying, with a good many members on the other side, that private enterprise has failed. I suggest that nothing of the sort is true, and that the truth lies half way between the two extremes. That is my view of this economic problem. It does recognize the principle of private enterprise, and for that I give thus much thanks.
How does it propose to supplement? It proposes to supplement the efforts, energies and resources of private enterprise by what I term a drop in the bucket. Either this scheme is sound, or it is not sound. If it is sound, then I say this enterprise is not big enough, if it is the proper way to supplement private enterprise.
But I suggest to hon. members and to the country that there is a huge amount of money available in Canada for enterprise and industry. One has only to look at the huge volume of money on deposit in the chartered banks and elsewhere in the dominion to know there is a very large fund available for immediate use in Canada. And they just cannot use it. Why? Because of the war policy of this government. They have throttled private industry. They will defend that on the theory that war necessities are paramount-and there is an element of truth in that. I make this submission in all seriousness to the government and to the financial hierarchy behind them, which is the godfather of this idea- not the government; make no mistake about that. I submit in all seriousness to the godfather of this idea that the time has come, and is long past due, when the economy of this country should be changed so as to secure from private industry the necessary production that we must have in Canada if we are to have employment-full employment.
We have not full employment in Canada to-day. War factories are being closed. There has been an attempt-I suggest it has been an honest attempt; I am not questioning the motives behind the government's action-to transfer these men. But the fact remains that men are being let out of industry, and that we are not speeding up the production of consumer goods in this country which, I suggest, we might have.
Let me illustrate. Just prior to the Christmas holidays I had a conversation with a plumber in my town. He said to me, "Mr. Hanson, will you tell me where I can buy some clothes to keep my children warm?" I questioned him, and he said that there was not available a

single garment of underwear to keep his little children warm. At the same time I understood that the clothing factories in this country had manufactured greatcoats for the army so that there was a surplus close to 300,000 on hand that the army did not need.


Mr. RALSTON:: Did my hon. friend verify that?


Richard Burpee Hanson: No; I cannot verify it, because the government will not tell me, but I do know-


James Layton Ralston: My hon. friend has never asked for it.
Mr. HANSON (York-Sunbury); There is a large element of truth in what I say.


James Layton Ralston: I can say to my hon. friend that the army has ordered greatcoats in accordance with the needs of the army, and the reserves which are required. I can say to my hon. friend, further, that that is why they have been ordered.


Richard Burpee Hanson: I am drawing a comparison between what I was told with respect to the need for consumer goods. Of course I do not know of my own knowledge, and I do not think the minister knows either.


James Layton Ralston: I know that.


Richard Burpee Hanson: As a matter of fact, one of the first things this government ought to do, if it has not already done so, is to arrange for the production of consumer goods in this country, not only because the civilian population needs those goods, but because it will keep the wheels of industry turning, and maintain the national income.
I wish to say a word about the question of taxation. There would be no need of an institution of this kind had it not been for the severe and aggressive taxation of industry by the government in its war financing policy. How can industry prepare for the post-war period when they are not allowed to build up reserves for the replacement of machinery, and all those things so absolutely essential? They just cannot do it. It is because of that shortterm policy, and because of that lack of action, that this sort of resort to semi-socialism is required. I sas'- that because that is what it is. This bill will bring aid and comfort to our socialist friends; make no mistake about that. They are the avowed proponents of the nationalization of the banks of this country. That may be a good policy, I do not know; but I am opposed to it, at least until such time as I am shown. This is a step toward it. It will not satisfy them, and I venture to say

Industrial Development Bank
they will reject it on the theory that it is not even half a loaf, as far as they are concerned. But I do suggest to hon. members opposite, and to many of them who think in an orthodox fashion as I do, that this is a measure of socialism.
Nevertheless, as far as I am concerned, having regard to the auspices under which this bank is to be managed, and having regard to the parentage of the infant, I am not very fearful; because, if there ever was a conservatively-operated institution in this country, it is the Bank of Canada, I know that that will find a reecho from the reverse point of view from some hon. members opposite, and that we shall hear a lot more about it when the Bank Act is under review.
What is the need? The parliamentary assistant did not tell us what the need was.


Mr. ABBOTT:: Yes, I did.


Richard Burpee Hanson: No; he
did not tell us in concrete terms what the need was. He said there was a gap between the two. I suggest that the gap is not as wide as he says-if, indeed, he suggested any dimensions at all. The banks to-day have a plethora of money which they are willing to lend to business.


An hon. MEMBER:: Lend it for ten years?


Richard Burpee Hanson: The banks to-day are willing to advance money, not only for working capital, as they always have done, but for capital expenditures, provided the term is not too long and the hazard is not too great.


Some hon. MEMBERS:: Oh, oh.


Richard Burpee Hanson: What is
the position? The banks of this country lend the money of the depositors. This bank, when it is formed and put into operation, will lend the money of its stockholders who, after all, are the people of Canada, because the Canadian people own the Bank of Canada and it will be public funds that will go into the shares of this bank. That may not be technically or legally true, but the fact is that it is public money. If there is a need; if there is a gap and there is no other institution to fill that gap, then I suggest to the hon. member that it is a part of progress to fill the gap. But he did not make out a case that there was a gap.
On the other hand, there is a large volume of money which is always ready to take the risk of business. Who is there who has not had a stake in this country built up by the utilization and risk of money of his own? Business men are always willing to take a risk 100-80i
if the hazard is not too great and the returns are commensurate. If we cannot have that sort of thing, then private enterprise is at an end. Private enterprise is just as virile to-day except for the cold hand of government policy which makes it impossible for private enterprise to proceed and expand under the present * war financial system. The system may be right or wrong, but the effect is as I suggest.
I do not want to labour the case from that point of view, but I do say that there should be a revamping in the immediate future, or near the conclusion of the war period, of the government taxation policy. Business should be able to learn at as early a date as possible what the position is to be. To my mind there are certain objections to the present system of corporate taxation. As far as I am aware this is the only country which has double taxation of the fruits of industry. I can remember when Mr. Euler was Minister of National Revenue under a government led by the right hon. gentleman who now leads this government. At that time this double taxation of corporate earnings was introduced. The system was condemned from this side of the house. There was an admission that it was double taxation, but there has never been any rectification.
I suggest that if we had not embarked upon that system in days gone by but had followed the system in vogue in England, where there is no corporate taxation but where profits of the fruits of industry are taxed in the hands of the recipients, there would have been just as much revenue obtained as has been obtained under this hardship of double taxation. I do not know, but it is probably too late to rectify that policy. The fact is that it constitutes a blot on our taxation system and is a detriment to the investment of new capital in the country.
According to the prospectus of the hon. member, assistance is limited to capital assistance. That is to say, it is not to be available for working capital. Of course, the hon. member will agree with me when I say that that would be unnecessary with respect to big industry. If these industries were operating under a proper tax system it would be possible for them to establish resources whereby they could finance themselves. There then remains the problem of assistance to smaller industries.


Mr. HANSON (Skeena):: May I ask the hon. member a question?


Richard Burpee Hanson: The hon. member may ask it but I do not undertake to answer it because I may not be able.
Industrial Development Bank


Olof Hanson: A small corporation can get working capital from the banks, but it has been my experience that such a business cannot get anything for expansion. Even if the money were available from the banks, the rate of interest would be so high that it would be no good. The large corporations do not need this assistance, but the [DOT] small ones do.


Richard Burpee Hanson: The large corporations need assistance if they are going to expand on capital account, but they get it by the use of another method, by the issue of bonds or preferred stock, or sometimes by the issue of common stock. I happen to be a director of a public utility which has neither bonds nor preferred shares. It finances entirely with common stock. As we expand on capital account the banks lend us money to cover the capital expenditure, and when that gets large enough we refund it by issuing common stock. That is a common method, and it is probably the simplest and cheapest that I know of to obtain capital funds. Then there are the other methods to which I have referred.
As my namesake and colleague says, it is quite true that small industry cannot operate as advantageously as large industry. The assets are smaller, and as a rule the management is not-I was going to say not as good -perhaps quite as efficient, and at all events they have not the credit. In local communities if the small industry has credit there is always a chance to get capital interested. Where credit is good there is always the chance to get the banks interested. The banks would not want to make a permanent capital investment because they' refuse to grant frozen loans since they do not wish to tie up their capital too long, but if an industry is prosperous, if it has credit, if there are character and ability behind the management, then I suggest that there is no great difficulty in expanding and getting new capital. It is the companies which are not in this class, companies which cannot raise , capital on their own ability, that may find themselves in urgent need of assistance.
Where does that bring us? That brings us to the point where government funds are to be utilized for capital investment in and capital expansion of concerns which cannot raise money on their own. That means big risks. The risk rises in ratio to the amount of the loan as against the equity in a concern. If the loan is large enough and the equity is small enough, what do we find? We find that this bank is in business. It cannot avoid

being in business. It must take over, first, the direction of the business and, second, if success is not attained, the management of the business. So that we shall have the possibility -I do not say probability-of this bank engaging in business with other private industry. I put this question to the hon. member: Is it the intention that the government shall lend money through this agency to private industry in competition with private enterprise? I should like to have that position cleared up. I should like the public to know that in effect government subsidies-this may not be the true description

are to be put into private enterprise, lame duck enterprise if you will, because this does not visualize new industry-


Douglas Charles Abbott: Oh, yes, it does.


Richard Burpee Hanson: Is this bank to put public funds into new industry in competition with private industry?


Douglas Charles Abbott: Where private industry has no private funds; that is the whole point.


Richard Burpee Hanson: The private industry that is successful will have private funds. My hon. friend makes that statement, but he does not substantiate it. He does not know any more about this than I do.


Some hon. MEMBERS:: Hear, hear.


Richard Burpee Hanson: I do not pretend to be an expert, and after listening to him last week I am sure he is not.


Douglas Charles Abbott: My hon. friend is too kind.


Richard Burpee Hanson: I do not mean to be sarcastic, but I do suggest that we are both lawyers. We are not bankers or economists; we are speaking from our own experience which is rather limited when it comes to the question of business. Perhaps my experience is as great as his, and I suggest it is perhaps a little greater. I have been connected in an executive way with business. However, I did not rise to say that and I do not want to rebuke the hon. member too often, but I do wish to say that his mere ipse dixit proves nothing. He has answered my question immediately, that government funds are to be put into private industry to compete with private industry in existence at present.


Douglas Charles Abbott: That is not what I said.


Richard Burpee Hanson: I asked the hon. member and that is what I understood him to say. If I misunderstood, I stand corrected.

Industrial Development Bank


Douglas Charles Abbott: I said that the funds of this bank would be lent to small and medium industry where private industry is not providing these loans. That is all I said.


Richard Burpee Hanson: I asked a further question. I asked, are the funds of this bank to be lent to new industry? I followed that up by asking, are the funds of this bank to be lent to new industry which will come into competition with industry in existence at present? I understood the hon. member to answer that question in the affirmative.


Douglas Charles Abbott: Any new industry will presumably come into competition with existing industry.


Richard Burpee Hanson: Not necessarily. This country has put $48,000,000 into a synthetic rubber plant in Sarnia. That is a new industry and a new plant, and it is the ann6unced intention of the government that that industry should carry on after the war. That will depend upon the circumstances as they exist after the war in relation to the supply of raw materials. If the natural product ever comes back again from the east or from South America, I do not see how an industry making synthetic rubber can compete with the natural product. But that is all in the future. Is it intended that this bank shall be used to finance the taking over of war factories? Is that not the whole basis of this bill? The minister of mines shakes his head. I venture to say that he does not know anything about it at all. But that is the information I have.


Ian Alistair Mackenzie: The only one wise man in this assembly.


Richard Burpee Hanson: I do not pretend to be wise.


Ian Alistair Mackenzie: Daniel come to judgment!


Richard Burpee Hanson: I put it in the form of an interrogatory. Is it the intention to use the facilities of this bank to set up new factories and to assist them in the acquisition of war factories?


Douglas Charles Abbott: Not as far as I am aware.


Richard Burpee Hanson: It may well be that there will be a lot of war factories of this country on the bargain counter pretty soon. Some will not be able to stand on their legs. They have been built so rapidly that they will not be able to stand the stress of weather. Take the factory that was built out
of green lumber near "Winnipeg. I heard the story out there. That was done under the stress of war and I am not blaming anybody for it. Necessity is the excuse. But we have a huge volume of money in this country taken from the people in taxes and in loans invested in war industry. Are those industries to be financed by this bank or to be taken over? I put that question to the parliamentary assistant and perhaps he will answer it when he comes to reply', as I believe he has a right to reply.
There are various ether aspects with which I should like to deal shortly. I am in favour of decentralizing business in Canada. I regret more than I can say that there has been allowed to grow up in this country a system of amalgamations of industry which are centralized in central Canada to the detriment of the extremities of the dominion, particularly that part of it from which I come.


Ian Alistair Mackenzie: Ours too.


Thomas Reid: Hear, hear.


Richard Burpee Hanson: To the
detriment of all other parts of the country. If by the operations of this bank we can assist in the decentralization of industry I give it all the blessings I am capable of giving. It may do a lot of good in that respect. I have always thought that the progress of amalgamation of industry in this country was against sound public policy. I have recognized too, I have been obliged to recognize, that one of the chief factors in the amalgamation of industry in Canada was geography. You cannot beat geography. Take the cotton textile business in this country; review its history. I recall away back in the 1880's, when I was a little boy, there were established in New Brunswick no fewer than four cotton mills, all established by private capital. One of them is closed, and the other three are in the hands of a large textile company in central Canada. What was the reason for that? Principally geography. They were manufacturing raw materials that were not indigenous to this country. That may have been a mistake to start with. They had to haul the raw material from New Orleans into New Brunswick and haul the finished product into Ontario and Quebec where the density of population was, with the result that transportation costs throttled in a large measure that type of industry.
Geography is something one cannot get over. An honest attempt was made by this government in the 1920's to overcome in a degree the handicap of geography by the introduction of the Maritimes Freight Rates Act. That
1270 .
Industrial Development Bank

has been a help in maintaining such industries as we have to-day. But it has been only a palliative. So that if this bank will have the effect, first, of decentralizing industry, which I am rather doubtful-at all events I express the hope that it may do that-and if it will have the effect of stimulating new industry, then I am going to bless it and wash it Godspeed. But from what we have seen, and from what we have heard from the parliamentary assistant I have faint hopes that such will be the effects. Therefore I ask him and the members on the treasury benches to lay the whole plan of the government before us for full employment in Canada. This is only a piecemeal effort. Give us at the same time what the taxation policy of this country is to be, because that is vital to industry. If you take the returns of industry you will see that to-day it is bearing the great weight of taxation. I know' there are Canadian people who think industry is making millions because they are subscribing millions to victory bonds. Nothing could be more fallacious. Out of what are the subscriptions for victory bonds coming which these industries are subscribing for to-day? I say with certainty that they are coming out of the proceeds of depleted inventories, inventories that cannot be recouped because of the labour situation. The best illustration I know of is the paper companies. Look how the wood piles of the paper companies are depleted. Their inventories have been turned into cash, and the cash in turn has been invested in victory bonds. But when labour is available those bonds must be sold because they are part of the working capital of these companies.
Therefore, in conclusion, I say that to complete the picture we should have not only this feeble step but the government's whole plan laid before us, and I invite the parliamentary assistant to give it to us. In the meantime I am not going to condemn this bill. I am going to adopt an attitude of wait and see.


Thomas Miller Bell: Mr. Speaker, I do not propose to follow the hon. member for York-Sunbury (Mr. Hanson) in his argument because I have no doubt that the hon, member responsible for the bill will have something to say to him in reply. I just point this out, that we have heard from him to-night a plea for relief of taxation in the midst of a war in which the people of this country are being called upon to make considerable sacrifices both in men and in resources for the prosecution of the war. But we are told that, if given an opportunity, business is always ready to take a risk. My mind goes back to the period from 1930 to 1939, when there were risks and there were money and resources, but business could not cope with the

situation which we then faced. I say to my hon. friend that as far as we are concerned we welcome the introduction of this measure as a step in the right direction. I would agree with the hon. member for York-Sunbury to this extent, that it is indeed a feeble step, but it is a step. A publicly-owned institution of this description is an' attempt, at least, to do something in the way of financing the development of this country by means of a public institution. It is not, in our opinion, adequate to ensure the volume of capital which will be necessary after the war for the promotion of socially desirable industries and for socially desirable purposes. In any event, whatever policy is followed by this industrial bank if and when it is established, it needs to be paralleled by a central bank and a national policy to maintain two things, full employment and adequate purchasing power to distribute the products of industry. In our view, as we have so often said, national ownership and control of the entire banking and financial system is necessary to meet our present problems and solve the problems of the post-war period. But this bank, compared with the matter of the bank charters which we shall be discussing in a few days, in all probability, because the time has now come when we shall have an opportunity of reviewing the bank charters, can be discussed only as a relatively minor measure, for that is what it is. However, we welcome it as a step toward the establishment in this country of a national investment, monetary and credit policy.
There are, however, some criticisms of the bill which I think we should make immediately. First of all, the measure is ambiguous in some respects. We should be sure, before we give it final approval, that the facilities of this industrial bank which we are to set up under this bill will be available not only to what we might call private industry but to cooperative societies which wish to enter into any industrial undertaking, or to any municipal or public enterprise of any sort which wishes to undertake some public industrial or worth-while development of a public nature. Second, we think it should have been accompanied by a measure to establish an agricultural bank in this country. After all, agriculture is a primary and basic industry, and for many years the political parties have been advocating at one time or another the establishment of an agricultural bank. Now we are told that such a measure is under consideration, and I hope that it will be introduced in the near future, so that it may accompany this proposed industrial bank in the statutes of Canada.

Industrial Development Bank
There is another industry which, I think, ought to receive some consideration but which, as far as I can see, is omitted from this bill; I refer to the mining industry-. As I understand it, under existing legislation certain taxation rebates are made for certain works in connection with mining. But it appears to me that the only people who can take advantage of those rebates are the large mining companies, simply because the smaller ones are not in a position to make the kind of profit which enables them to secure the rebates of taxation which will permit them to do the necessary development work. I have always felt that in this country the mining industry is being concentrated into a very few hands; that not more than twenty-five or thirty individuals exercise any real control over the industry; and that the prospectors who do the spade work and discover the resources are, often, those who reap the least reward from the undertakings, which they make possible.
It seems too, and in this I agree with the hon. member for York-Sunbury, that this industrial bank may be used merely to assist risky and unprofitable ventures. That should be very carefully guarded against in the administration of this institution, because it would seem-again-that the profitable and more certain ventures will still be taken care of by private lending institutions.
In spite of the demand we hear frequently in this house and across the dominion to give private enterprise another chance, this bill actually removes from the operations of private enterprise any risk whatsoever, or at any rate minimizes it to a veiy great extent. In other words, the argument so often used that we must compensate private enterprise for the risk will, when this institution is functioning, be no longer available to those who are in favour of the complete control of this country by private enterprise. The risk is being minimized, perhaps even removed, and the public are asked to assume that risk which it is said pertains to private enterprise.
Then, it does not begin to lay the foundations for the solution of unemployment, for the provision of full employment. As has already been said, $100,000,000 for industry is an exceedingly small amount in these days. We shall find that we still have unemployment and idle resources-idle, not because there will be after the war, or is even now, a scarcity of savings, but merely because once again industry will be unable to distribute the products of industry. Profit, and not
human need, is the stimulus for production in normal times. One thing the war has taught us, I believe, is that the need of the nation ought to supersede private gain, and that when we are at war we can plan to meet the great public need-far greater-we shall have to meet when we are at peace.
Thus, as I have already said, while the bill is useful in many respects, it is in my opinion quite inadequate. What we need to promote industrial development and to assist purchasing power of the people of this country is a national investment authority together with a planned monetary and credit system, designed to do two things, to produce goods and to distribute them, thus eliminating poverty and raising the standards of living by intelligent and well-defined steps. I said a moment ago that such a policy has been demonstrated as a prime necessity during the war period, and there is no reason why we should not carry the valuable experience that we have had during the war into the peace-time period that will follow. Of course, I do not intend to-night to discuss banking policy under this bill. It does not properly arise under the bill. We shall have an opportunity to discuss banking and monetary policy more particularly when the Bank Act is before the house for revision. Investment policy, however, does arise for the primary purpose of the measure as I see it is to ensure the availability of certain forms of credit-not all forms-to fill a gap to certain types of industry, as we were told when the bill was introduced.
At the moment there are certain main sources to which we look for investment funds. There are the very large accumulations of money in the hands of insurance and trust companies. Then we have the savings of other corporate bodies and the personal savings of the people, and we have of course the undistributed profits of industry. And these undistributed profits, even though we are taxing them in war time, are reaching very sizable amounts.
The private direction of these amounts available to the public and to industry cannot meet the needs of the time. In 1929 there were great accumulations of savings, of investment funds, in the hands of institutions, corporations and individuals; and yet, with all that was available at that time, we entered upon the most devastating period of depression in the history of this country. And then, when we have only private direction of investment, we often have the misdirection of investment funds into all kinds of luxury trades or even into very wasteful expansion. We have
Industrial Development Bank

seen in our day and generation the oil companies adopting the policy of a filling station on nearly every corner, and we have witnessed the overcapitalization of other Canadian industries, such as, for example, newsprint before the depression and before the war. These overdevelopments were costly to the community, and they are more costly because, associated with this form of investment, we have a most wasteful system of securing and placing the funds-investment brokers, syndicates, stock exchanges. Incidentally, that machinery is very largely kept in existence by the public authorities themselves, by governments, federal, provincial and municipal, who go into the market and use the machinery, paying commissions and maintaining the system in order to get the necessary funds for desirable public purposes.
I say that this form of investment control, in the hands of increasingly richer corporations and institutions, is dangerous to the public good. We have heard to-night criticisms of the concentration of wealth and power in certain areas of Canada. We who come from other parts of Canada realize how much truth there is in that criticism. But there is tremendous concentration of wealth in the hands of a few corporations in this country. It is all very well to say that when the war is over we shall deal with some of the great monopolistic corporations that have arisen in our midst; but it is much easier to say that than to break up the great concentrations of power once they have slipped from our control. At the present time we have a great concentration of financial power in a few hands, and I should like to see the government introduce a bill with much wider power than this, so that we might direct investment, not into wasteful channels, into luxury goods, but into housing, into the development of our resources, into the provision of full employment, into the building up of the kind of Canada that most of us believe we could build if we really tried.
The present form of uncontrolled investment results, too, in dangerous fluctuations in our economy. We see a great expansion of credit, investment and so on in a period of inflation, of so-called prosperity; then comes a period of depression, and we have a serious deflation of investment and money. Hence this industrial bank, though we regard it as an inadequate step, is a step perhaps toward something bigger, setting up eventually a national investment board which can direct the savings of our people, of our nation, of our public institutions, as well as of our private citizens into proper socially desirable

channels. But most of all we need this instrument for the purpose of a planned investment, as I have already said, for the securing of maximum employment and to improve generally the economic, cultural and social levels of our people.
A national investment bank instead of a little industrial bank of this description should be incorporated at the present time as a part of our national banking system. . Thus we should have power to use our own national bank of issue more completely than we are able to use it so far. There is no reason why a national investment bank, associated with the national Bank of Canada, the bank of issue, should not in times of deflation, in times of economic recession, issue for capital expansion interest-free money for public undertakings of a desirable sort. Then, if we did strike a period of inflation, that would be the time to get surplus money from the people by borrowing it from them. We should use the financial instrument we now have in order to control our economic structure and our economy in the manner in which it should be controlled in the public interest. Therefore, instead of a bill of this description, which may be merely a prop to private industry, we should have something that would be another real instrument of national policy. That, of course, would mean an institution with much greater capital, with much wider powers than the institution we are discussing to-night.
In the meantime, until we have such an institution, I would suggest to the government that steps should1 be taken to control investment now and in the post-war period so that capital may be guided and directed into socially desirable channels, not to be used wastefully but to raise the levels of our own people. In other words, instead of speculative investment, which is not the proper term; instead of speculation, to put it more correctly, by boards of directors irresponsible in the sense that they are responsible only to their own shareholders, investment should be controlled and directed by an authority set up by and responsible to this parliament or, in other words, respons:ble to the representatives of the people of Canada as a whole. In my opinion such a policy would cheapen the overhead of industrial organizations and assist the community in very many ways.
Therefore, in our opinion the present measure falls short of what should be done at this time; and I say "at this time" advisedly, because while I do not share the view that we could afford, at this critical time, to consider departing from the manufacture of munitions of war and supplies needed by the army

Industrial Development Bank
and navy, yet the time will come when we shall have to consider the provision of consumer goods for the Canadian people in larger quantities. So that I say we should be planning what we should do in those circumstances; we should be laying the foundations now. As I have said, in my opinion this institution to a very large extent destroys the argument that is so often heard in this chamber in favour of so-called free enterprise. It goes some distance in removing the risks for which the public are supposed to pay those who are engaged in free enterprise. As I say, this bill removes their risks, but they will still retain their profits. However, it is a step toward something which I hope will be more beneficial to the Canadian people when we are ready to expand its functions. Therefore we shall support the principle of the bill, and when it is in committee we shall have more to say, in the hope that we may yet widen the scope of the measure in the directions I have indicated.


Mr. J. H. BLACKMORE (Lethbridge):: Mr. Speaker, the principle of this bill is to ensure the availability of credit to industrial enterprises. What is the purpose of the bill? Those who advocate it maintain that it is one of the government's devices for maintaining full employment. If the purpose of this bill is to maintain full employment I must tell the government frankly that they have put the cart before the horse. If this bill is to bring about full employment and guarantee its maintenance it should be entitled something like this: "A bill to ensure availability of money or credit to consumers to enable -them to purchase *the goods which private enterprise stands ready and willing to produce."
What is the haunting fear of private enterprise from coast to coast in Canada, and in fact all over the American- continent? Is it that private enterprise will not be able to produce, that it will not be able to obtain money with which to produce? Not by any means; what private enterprise is worrying about is whether it is going to sell its goods after the war. If private enterprise can sell its goods after the war, private enterprise will employ the people of Canada, just as private enterprise can employ the people of Canada during the war, when the markets are provided by the government purchasing all the goods for use in the war. What is the worry of the farmer, the mining companies, the lumber companies, the milling companies, the factories manufacturing sugar, clothing, shoes, washing machines or anything else? Is it that they will not be able to get money to produce or to expand their capital equipment? Not by 100-81
any means; all -they are afraid of is that they are not going to be able to sell. I have talked with them by the score and they all agree. Therefore, Mr. Speaker, as I have indicated we should be considering ways and means of providing additional purchasing power, not necessarily ways and means of providing additional production. As I have contended on the floor of this house, and as I believe people are coming more and more to recognize, such purchasing power can be provided by the creation and use of debt-free money issued scientifically into the stream of purchasing power in prices, wages, dividends and through other means.
Just to establish my point let us turn to the depression years. What was the cause of unemployment in Canada during the great depression? Was it the fact that people were unable to produce? Was it the fact that industry was unable to obtain money with which to produce? Or was it the fact that industry was unable to sell? Did we suffer from lack of production, or was it overproduction, which of course was underconsumption? If that does not completely establish my thesis I fail to see how it could be established. What caused our trouble during the depths of the depression? We had 750.000 unemployed, more or less; we had 1,250,000 on relief; agriculture was impoverished; labour was living at bare existence levels, and through all we were decreasing and destroying the purchasing power which industry needed in order to be able to sell its goods. Well, if we are going to establish employment in this country we must attack the problem in the right way.
Let us turn to the United States for a few moments and examine the economy of that great nation during the year 1935. What caused unemployment in the United States? Was it inability on the part of industry to produce goods? Not by any means; United States industry, according to Harold Loeb's "Chart of Plenty", stood ready in 1935 to produce enough goods and services to supply every family in the United States with $4,400 worth a year. Were the industries unwilling to produce, I ask my C.C.F. friends? Not by any means. Were they unwilling to sell? Not by any means. Let us get these things straight. I have even heard of some Liberals across the way who apparently have been listening to the socialists and who have begun to be afflicted with the foolish idea that the thing which caused our trouble during the. depression was that industry, for some unaccountable reason, would not produce or would not sell. The difficulty was that they could not sell at a price which would enable them

Industrial Development Bank

to carry on. That was all. What was the situation in the United States, with this capacity to produce $4,400 worth of goods and services for every family in that country during the year 1935? They had between eleven and thirteen million unemployed and about
23,500.000	on relief. Instead of every family in the United States being able to obtain $4,400 worth of goods, only twenty-one out of every 100 people were able to obtain the goods necessary for a bare subsistence, at a decent standard of living.
What was the cause of that trouble? What would have been the remedy? More production? Well, how anyone can get logic out of the contention that it would be more production passes my understanding. If it was more production, then why was it that the President of the United States was causing cotton to be ploughed under, cattle and swine to be shot and thrown into the rivers to go to sea, oranges to be destroyed? It it was a lack of production, then why was all that nonsense going on?
It was a shortage of purchasing power. What we need to be prepared for when this war closes is to supplement the stream of purchasing power in the hands of the people. Will capital expansion provide purchasing power? Some people maintain it will. I maintain it will to a certain extent, but it will not adequately. Where our difficulty lies is in this fact, that machines are displacing men. Consequently many men are no longer able to earn wages as a result of production. At the same time that machines are displacing men, those machines are greatly increasing productive capacity, and produce a vast surplus of goods which, with the present source of income available to human beings, they are unable to purchase.
There is a shortage of purchasing power. Let no one delude himself into thinking that capital expansion will provide the purchasing power necessary to distribute the goods within Canada. If he does, then heaven help the country, if he happens to be in a responsible position, and is in power. Because he will plunge the dominion into a depression worse than the one we had before.
We will grant that a certain kind of capital expenditures might assist. For example, money spent in building vast irrigation projects, vast *reforestry projects, and great road projects, which would supplement the purchasing power in the hands - of the people may, in some degree, provide a remedy. It would do so because it would supply purchasing power without increasing the goods available. But

ordinary capital construction, for instance, in shoe factories or for the purchase of mining equipment and that sort of thing simply will not solve the problem of purchasing power.
Let us examine the bill for a few moments. The declared objective is to help overcome unemployment by providing loans to industry. Will it accomplish that objective? There are certain specific stipulations in the bill, of which this is one:
The bank may establish branches or employ agents in any part of Canada.
Then, No. 2 the bank is to ensure:-*
. . . the availability of credit to industrial enterprises which may reasonably be expected to prove successful, if a high level of national income and employment is maintained.
The hon. member for York-Sunbury (Mr. Hanson) I thought discussed that aspect of the bill with considerable effectiveness and success, and therefore it will be unnecessary for me to deal with it.
Then, No. 3:-
The bank may (a) lend or guarantee loans of money to
(i) a person engaged in or about to.engage in an industrial enterprise in Canada.
Then, No. 4:	An industrial enterprise
means:-
A business in which the manufacture, processing or refrigeration of goods, wares and merchandise or the building of ships or vessels or the generating or distributing of electricity is carried on.
These provisions would indicate that the bill has a rather wide measure of usefulness. But there are certain provisos attached to those stipulations which tend in a large degree to nullify the possible effectiveness of the measures to which I have already referred. May I refer to one of these provisos. It states:
.	.	. which may reasonably be expected to
prove successful if a high level of national income and employment is maintained.
May I ask this: By whom may it be reasonably expected? Who is to do the expecting? In other words, how are we to be sure that men who are qualified for credit will be able to obtain such credit? I wonder if the province, through a government agency, or through any other agency, has anything to do with deciding whether or not a company is going to obtain a loan. If the province has no voice at all in this matter, then there will be room for gross discrimination against certain provinces of the dominion.
Will the community concerned have anything to do with deciding who is worthy of a loan, or whether a business is to be classed

Industrial Development Dank
as successful? Who will decide with respect to this matter of success in business? Is allowance to be made for the general economic value to the community, the area, the province or the section generally, in which the industry is supposed to be located? Is allowance to be made for economic value to the community, for example, through employment, markets, aid to other industries, or revenue production?
May I refer to one question which is in the news at this time. It is reported that Ontario is proposing to increase the subsidy on beet sugar production. Why is Ontario proposing to do that? Because Ontario considers the beet sugar industry to be of sufficient value to the economy of Ontario to justify an expenditure, of public money in the subsidizing of that industry.
Is this board which will be approached by industries with requests for loans to be influenced in any degree by the value of the industry, by the value of that industry to the locality in which it is proposed to locate that industry? If it is not, we probably may have a wrong definition of the word "success".
Who is to judge what constitutes a high level of national income? Is this to be the president of the Bank of Canada, or who is it to be? There may be considerable disagreement between the board governing the bank, and the ordinary man on the street, with regard to that matter.
Now then, supposing employment is falling off, instead of being maintained at a high level; is this bill not proposed to be a remedy for unemployment? What conceivable value can the bill have if, at the very time unemployment is setting in, the bank refuses to make loans because there is no possibility of national income and employment being maintained at a high level? It seems to me the sponsors of the bill need to give attention to consistency in their stand.
Then, again, what if national income is falling off? Is it not the purpose of this bill to supplement the national standard of income? And if men who are managing the bank say, as soon .as national income begins to fall, that it will be unsound for the bank to make loans, then obviously there is inconsistency again. The application of this proviso means that as soon as a slump begins, credit from the bank ceases to be available. Let us suppose, for example, that two or three years after the close of the war a slump should set in. Would the bank immediately cease to make loans? Or would those loans be available only for the very strong business? In other words, would they 100-81i
be available only for big business, business which ordinarily is considered to be able to stand on its own feet, without any additional assistance?
If any of the possibilities I have indicated should materialize, the whole purpose of this bank bill would be completely defeated. It would be null and void and useless, as far as the purpose for which it is purported to be designed is concerned. It looks to me, Mr. Speaker, as though this bill is a measure which, when weighed in the balance, will be found wanting, for the purposes for which it is supposed to have been designed. It looks to me as though, under the impact of stern realities, this bank will prove to be unsubstantial, and unequal to its responsibilities.
May I consider the bill from another angle? There is a place into which such a bank could fit. There is a function which it could profitably perform in Canada. Here are some of the possibilities. It could control the banking policy of Canada. We hear a great deal from our socialistic friends, for whom I have high regard, to the effect that it would be impossible to control the banking system of Canada, unless the government owned that system. I challenge that stand, categorically. A bank of the kind we are considering could be used to control the banking policy, even although it were no larger than this bank at the present time. We are proving this in Alberta by the use of our treasury branches. The treasury branch is a relatively weak institution financially, but it has a strong influence upon the financial activities of the province.


Mr. DOUGLAS (Weyburn):: How would you prevent a bank from calling in its credit and thereby causing deflation if you did not own it?


John Horne Blackmore: If it became unsound for the banks to lend, would the government have the banks lend at a loss? For example, if the government owned the Bank of Montreal and it became dangerous for it to lend money, if there were a danger they might lose if they did lend it, would the government have that bank lend at a loss?


Thomas Clement (Tommy) Douglas: If your economy were planned it would not be at a loss.


John Horne Blackmore: That is the important point, the planning of your economy. How would you plan your economy? I maintain you should do it by putting purchasing power in the hands of your people sufficient to enable them to buy your products. There would then
Industrial Development Bank

be no danger of a loss to the banks and the banks would not hesitate to lend money. I believe all hon. members will see that stand is sound and logical.
In direct anstver to my hon. friend's question I would say that if the banks persisted in refusing to lend money, then the thing for the government to do would be to develop an institution of the sort under discussion to dimensions large enough that it could lend adequately. There is no doubt that the government could. This bank is to be provided with $25,000,000 in the form of paid-up capital. That amount could just as easily be $250,000,000. The money will all be created by the Bank of Canada and will cost the Bank of Canada nothing, or it could be so created. Consequently this bank could be expanded by order in council to the point wrhere it would be able to lend all the money necessary in any area of Canada while the banks recovered from their panic.
But the object would not be to have the government go into the banking business. It would be merely to create a corrective to bring the banks into line. Certainly our banks exist to lend money. If they found the government was taking over the lending business I should think they would become concerned about it at an early date and go in and do some lending themselves. We are finding that that is what is actually occurring in Alberta. It must be borne in mind that money can be created debt free. I do not suppose anyone in this chamber will gainsay that. Money can be created regardless of gold. A government can thus be economically and financially free. Let us face that fact realistically and honestly and progressively.
Currency could be created and lent at perhaps one per cent, and credit could be created and lent at perhaps one-quarter of one per cent. If this bank were made a bank of issue, with sufficient support b.y the Bank of Canada, there is no reason why it could not lend credit for working capital, and perhaps currency for fixed capital purposes. This bank could thus be used to control interest rates charged by the chartered banks. The government could control interest rates simply by lowering interest rates on money coming out of this bank. The banks would then have to bring down their interest rates to conform with the interest rates charged by the government-owned institution.
The government could control the availability of loans. If there were men in the community who were worthy of credit but to whom for one reason or another the banks would not provide credit, they could be given
fMr. Blackmore.]
assistance. The bankers would thus be brought into line in a very short time. We have proved that already in many communities in Alberta. For some reason or another banks refuse to lend to certain types of industry in certain areas. A government agency of this kind could lend money to these industries and thus make sure that no discrimination existed. I have in my hand the submission of the government of New Brunswick to the Rowell-Sirois commission in which they complain bitterly of the credit policy in existence in Canada. I believe I will take the time to read a passage which appears on page 49 as follows:
In this connection it is well that the commission should bear in mind that the Canadian banks have been centralized in Ontario and Quebec. Prior to confederation and for some years afterwards we had our own banking institutions in this province and our people were able to obtain money for the encouragement of industry here.
The head office of these banking institutions were removed, after confederation, to Montreal and Toronto where they were situated more immediately in touch with the financial interests by which they were controlled.
The result has been that industries in New Brunswick have not been able to obtain financial assistance in cases where such assistance would enable our local industries to compete with those in the provinces of Ontario and Quebec.
Pertinent cases may be cited where local industries in this province have been destroyed because of the difficulty of financing and we submit that finances have been withheld as local industries might come into competition with similar industries in the last mentioned provinces.
There has been almost untold suffering throughout seven of the provinces because of the application of that particular principle. That difficulty of discrimination against provinces could be overcome entirely by the government using a bank of this kind. The bankers could be brought into line in the matter of lending to industries no matter in what province they happened to be.
A bank of this sort could control the economy of Canada. We hear a great deal about the decentralizing of industry. Both the hon. members who preceded me referred to the centralizing of industry in Ontario and Quebec and pointed out that it was a bad thing for the Dominion of Canada. Industry should be decentralized and spread out among all the provinces.
A bank of this sort could decentralize industry and render the various provinces of Canada more or less self-sufficient. This would be of great assistance to the maritime and the western provinces. One of the reasons why we in Alberta, Saskttchewan and other prov-

Industrial Development Bank
inces go into debt to the institutions in Ontario and Quebec is the fact that we have not developed sufficient industry. The result is that our people are only primary producers. They are penalized by the low prices they receive and by the high prices they must pay for the products they need. Then they have to pay railroad transportation both ways, and they pay interest upon the money involved in both transactions. If there were an industrial development in each of those provinces it would overcome the tendency of one province to go into debt to another.
A bank of this sort could render Canada self-sufficient to a much greater degree. She would not be obliged to import more than was necessary from abroad. May I point out once more that a bank of this sort can control the banking policy of the Dominion of Canada, doing it by strategic means rather than by ownership. It is not necessary for the government to own the banks in order to control them; control could be exercised by strategic means.
This question must be asked concerning this bank: will these possibilities be realized by this bank? Will interest rates be brought down, and will loans be made available equitably with a view to the greatest good to the greatest number of Canadians? Will industry be decentralized? Will the various provinces be made economically self-sufficient? Will Canada be rendered self-sufficient? Will the banking system be rendered obedient to the government? Will it be made to work for abundance for all, or for scarcity, so that a few may have great profits and power? These are the questions we have to ask ourselves in considering this bill. I fear very much that the answer to every one of these questions is not going to be "yes."
I wonder if the facts which have been adduced already in this debate do not strengthen the suspicion that this bill is nothing but political window-dressing, that it is nothing but a clever device designed to trick the Canadian people into thinking that the King government really mean? to do something to remedy the ill of unemployment, that it does know what to do and that it does have the power to do something effective? I am afjaid that the answer to that must be "yes." It is simply window-dressing. We have had examples of this before in the history of this country. When the Prime Minister spoke of currency and credit in terms of public need in 1935 he led people in the west to think he meant what he said. Then he came into the house a few years later and explained to us very simply that he meant by currency and credit in terms
of public need exactly what we had at the time he spoke. In other words, he had contemplated no change whatsoever. This kind of clever trickery coming from the Liberal party the people of Canada have to be on guard against.
This same man told the people that there would be a -war against the money power waged on the floor of the new parliament. I have been here ever since that parliament convened, and the only war against the money power waged by the Liberal party has been a war for the money power and against those who were trying to control the money power. Never once have 1 seen the government adopt a single measure which would challenge the position of any money power.
Take another example of trickery; we were told that if we had government ownership of the Bank of Canada it would do wonders for us. I ask this question: Did government ownership of the Bank of Canada make any change whatsoever in the banking policy of Canada? Not a bit. I submit to my socialist friends that government ownership of banking institutions without a change in policy will accomplish nothing whatsoever in the interests of the country. But a change of policy, even with private ownership of the banks, will.


Thomas Clement (Tommy) Douglas: If the banks will let you.


John Horne Blackmore: They will let you. I am not condemning your proposals for government ownership of the banks. I say that it has great possibilities. With a change of policy the Bank of Canada could operate for the great benefit of the people of Canada.


Mr. NOSEWORTHY:: If the C.C.F. were in power.


John Horne Blackmore: They would be hog-tied just the same as the Liberals because they would not understand what to do. Unless they understood the principle of debt-free money, they would not understand what to do.


Joseph William Noseworthy: We had better come to Social Credit for advice then.


John Horne Blackmore: You had better do so now.
What did the Bank of Canada do? Did it give employment to Canadians? Did it raise wages? Did it equalize prices? Did it lower taxes? Did it reduce duties? Did it lower interest rates? Did it make more money available to the rank and file of the Canadian people? Did it develop Canadian economy? Did it decentralize industry? Not at all. Did it do any of the things which were necessary in the Canadian economy to make life more
Industrial Development Bank

livable in this country? None of them was dong even with a government-owned bank. Have we grounds for hoping that this new bank will do any better? We have only too little. If we are to solve the problems confronting us we must use means altogether different from those of which this new bank is an example.
I hold the view that if democracy is to prevail in Canada after the war is won, the government must take fundamental action to change the economic system of Canada from the present system of scarcity into a system of total use of Canada's resources.
The government's task is both a profound and an immensely urgent one. If it is not discharged before the war is won we shall betray our boys fighting on every battle front.
The government has presented a programme of reform. As I have already said, in face of the needs of the Canadian people, the programme is meaningless, just as meaningless as this bill is. It promises much. It can accomplish very little under the present set-up. The reason is that only total use of resources can give the Canadian people the prosperity to which they are entitled, and the fact is that the men behind the government of Canada will not permit the adoption of total use of resources because they believe that only scarcity can pay high profits. And to those concealed advisers and directors of the Liberal party, high profits for them come before prosperity for the people, even if the people should be our boys returning from risking their lives on the battlefield.
To-day there is ample evidence before parliament to prove that the doctrine of scarcity dominates the economy of Canada. Let me give the house one or two examples. Take the meat situation. Hon. members have followed for the last six weeks the development of the meat situation in Canada. Can one conceive of a situation being more pathetically and tragically bungled than- the meat situation in this country? What was the reason? It was simply that the Liberal government does not dare to liberate the productive capacity of Canada, because it fears abundance. It believes only in scarcity at home. Would a bank like this new one that is proposed in any w7ay relieve a situation of that sort? The bank might merely assist the farmers to produce more beef, and the Liberals would be all the more terrified.
Take the sugar situation. I believe solemnly that there has been no need of scarcity of sugar in Canada during this war, or for the years immediately preceding the war, nor has (here been any reason or justification for the
[Mr. Blackmore.J
high prices of sugar which have prevailed. Evidence which I adduced the other night proved conclusively the soundness of my position. 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. I ask would a bank such as the one we are now considering in any way remedy that situation? Not by any means. How could it? There are plenty of companies that stand ready to finance new sugar refineries to produce beet sugar in this country. Do they need assistance from a bank such as this? Not by any means. All they need is markets. All they need is the go-ahead signal.


Joseph William Noseworthy: There are plenty of sugar markets now.


John Horne Blackmore: They cannot get the machinery now. 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.
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.


Thomas Clement (Tommy) Douglas: That will be a $64 question.


John Horne Blackmore: We would be equally relieved to receive an absolute assurance from the Prime Minister that Canada Packers has made no contribution to the Liberal party's campaign funds.

Industrial Development Bank


Thomas Vien: Order. The hon. member is now introducing something that is not within the purview of this bill.


John Horne Blackmore: I am dealing, Mr. Speaker, with the possibility of this bank affecting the economic situation in Canada.


Thomas Vien: I understood that the hon. member was referring to campaign funds.


John Horne Blackmore: All I am seeking to do is to show how the government can allow scarcity to control in this country.


Thomas Vien: I would ask the hon. member to desist from his references to campaign funds.


John Horne Blackmore: I will desist from that kind of discussion.
I have given one or two examples of the way in which the economy of this country might be influenced and controlled. I have illustrated the way in which huge concerns exercise their influence. I might have added that if it were known whether or not these big concerns which I have referred to have contributed liberally to war loans and if the government feared to disoblige them lest they should desist from lending, it would help us to understand who it is that controls this government and how the control is exercised.
Now may I say to the government that they would escape from all such pernicious controlling influences if they would adopt a sane and sound financial system, one that reflected the facts of the Canadian economy, for no concerns in this country would be able to gain or exercise control over a government which was free to issue money in relation to goods and services such as the people could produce.
May I conclude with both a warning to the government and an appeal? Once more I warn the government that scarcity must give way to .abundance before this war is won; otherwise we shall betray our fighting men. I tell the government solemnly that to-day it should be ashamed to face those boys already coming home from the battlefields. If this government does nothing more than it is doing now, it will be afraid to face our conquering soldiers when the war is won. I say this because upon its performance right up to this date all the government is able to guarantee our soldiers is a return to unemployment and poverty. They are coming home right now to unemployment and poverty, and the trend to such-thousands of them- and nothing is done to alleviate the situation; that is, nothing substantial.
Here is my appeal. I have said that the people of this country have a right to the
total use of their resources. That means maximum consumable production and equitable distribution of that production, distribution by consumption. I defy any man in this house to rise in his place and state that the people are not entitled to this right. I defy any man to say that the people would not have this right if parliament were free to get it for them. Then let us set parliament free. Let the government renounce its hidden bosses and take up the cause of the people. If it does so it will find loyally behind it the membership of this house without regard to party. Then Canada, both French and English-speaking, will give leadership to the English-speaking peoples of the world.
This is a great and holy cause in which we can all serve, this cause of democracy, of freedom from want and fear. Therefore, if the government continues subject'to direction by the hidden hands which have thus far guided it, I appeal to all those patriots in the Liberal party to renounce their party subservience and to join with free men outside the Liberal party to set the people free, and to give a chance to the boys who come home from overseas, and to the parents and loved ones and friends who have saved and served and sacrificed to send them over there.


Mr. J. J. KINLEY (Queens-Lunenburg):: As I see it, the principle of this bill is to promote the economic welfare of Canada by the establishment of an industrial welfare bank, to be set lip according to the provisions of this bill which is now before the house for second reading. With its purpose I agree. I listened with some interest to the speech of my fellow-maritimer the hon. member for York-Sunbury (Mr. Hanson). While he made his usual interesting and critical statements, I could not discover whether he was for or against the bill. The hon. member for Rosetown-Biggar (Mr. Coldwell) expressed support of the bill. I listened with some interest to the leader of the Social Credit party (Mr. Blackmore), and while I believe in his earnestness and his sincerity, it seems to me the way he suggests is too easy a road for this cruel world through which we are going.


John Horne Blackmore: So we shall go on suffering, eh?


John James Kinley: I want at the outset to say .that I am in favour of sustaining the chartered banks of this country, because I believe they are well controlled and efficiently handled and that they do a splendid service to the people of Canada. Not only do they serve this country, but they operate abroad, and the banking houses of Canada are sentinels in
Industrial Development Bank

foreign countries for Canada's export trade. Wherever I see exports I believe there must be merit, and in order that a country may be a successful exporter to another country there must be strength and workmanship. The superiority which our banking system has maintained for many years will, I believe, stand us in good stead in the years to come, when our export trade will be a big feature in the development of our economic future.
_The Canadian banks are in the vanguard to be factors for our export trade, so that it would not do unduly to interfere with or weaken them. At the same time there is no reason why we should not make an experiment and have an industrial bank as a part of our industrial equipment. We believe in competition and free enterprise, and we must keep abreast of the needs of the time. I trust there is no intention to close the road to any development; rather open it wider to meet the exceptional needs of reconstruction, at this serious period of our history, when all economic forces should be intelligently brought into play. "The government has many statutory provisions whereby special financial consideration is given to our citizens, and it may be that these should be coordinated through a bank. The experiment is worth-while making.
We hear each day a lot of criticism of Canada's war-time effort. Strange to say, most of the praise comes from outside our country. Only to-day I saw in the paper an enthusiastic account of Canada's war effort by a United States commentator, who made the statement that in two years, while Canada's price ceiling had risen two per cent, that of the United States, on the same basis of calculation, had risen fourteen per cent.
The hon. member for York-Sunbury criticized the war effort in speaking of the principle of this bank. Why he had to do that I do not know. I believe that we are progressing in so far as monetary ma-tters'are concerned and that we are keeping up with the needs of the time.
Every one of us, either by reading or by personal experience, remembers the last war. We recall that the money for the conduct of that w'ar was borrowed, whereas in this war we are paying fifty per cent of the cost as we go. During the last war victory bonds were issued bearing 5J per cent interest. This time no such interest is paid. In addition to that, tax-free bonds were sold to the people and there was very little criticism about it at that time. Furthermore, there was no restriction on the accumulation of wealth. Wealth accumulated during the last war; tax-free bonds made it easy for the affluent to pay their taxes, and the percentage paid for borrowing money

was an amount that we would not consider at all in this period of our history. So that we are making progress. While my hon. friend criticizes the action of this government, I believe the statement of the Bank of Canada, which has been presented to this house, shows that in finance Canada has made a splendid and most efficient effort. The statement of that bank, if one considers it calmly, reads like a romance in finance. I think the $15,000,000 profit it has brought to the exchequer of Canada shows that while some people opposed that institution when it was formed, it has a splendid record and engenders enthusiasm and confidence in the Canadian people to go on to other efforts.
The chartered banks of Canada are controlled by law and their activities are in the nature of a revolving cycle; circulation is in and out and it is vital to the success of the country. Frozen loans are avoided wherever possible, because the banks, in the very nature of things, must be kept liquid; they must be able to face the clearing house. Certain business is prohibited. The details appear in section 151 of the Bank Act. Certaain business of a static nature is prevented. This to a degree is the difference between our banks and the banks of the United States. It will be recalled that -the banks of Canada survived the crisis of the last decade while -the banks of the United States met disaster. One factor causing the American difficulties was longterm business. This is the field where present-day conditions seem to show the need, and an- industrial welfare bank is eminently designed for that purpose.
Under section 15 of the act, with respect to business and powers, the bank is enabled to lend or guarantee loans of money to an industrial enterprise, including loans on real or personal property. This is now done largely by trust companies and individuals. . I would say that the bank has some of the characteristics of a bank and nearly all the powers of a trust company, and it is intended to assume some of the functions of both.
I am disappointed that the interpretation section, wherein industry is defined, includes the building of ships but not the operating of ships. It is my opinion that after the war there will be plenty of ships, and the question will be, what are we going to do with them? That will be an important question. There are 80,000 men now in the Canadian navy and 44,498 in the merchant marine. Many of these men will want to continue at sea. I often meet naval officers, especially those of the Royal Canadian Naval Reserve, whose

Industrial Development Bank
ambition is to be part owner of a ship after the war and sail her in the merchant marine trade.
The United States built a number of ships and found them too slow, and now they are building victory ships so as to be in the forefront of the mercantile marine enterprise. It may be that we should build faster ships for the period after the war. In my opinion some provision should be made so that the men on the sea in this war who have great responsibilities in the navy may be able to continue in their calling, and I hope they will get help from their country in order that ships may be operated in. the serious days of reconstruction.
In the prohibited business category in our Bank Act ships are included, and there is also fishermen's floating property along the Atlantic and Pacific coasts. Everyone fights shy of lending money on floating property and there is a need which this bank can supply if we so decide in committee. I find that the bill calls for ownership and management by the Bank of Canada. I doubt if this is advisable. It looks too much like a state-controlled monopoly. Erroneously, people have the idea that freedom is embodied in government ownership. Carried to excess, I think it means dictatorship. Competition breeds freedom, initiative and efficiency. I think we all admit that the Canadian National railway service in Canada is better because we have the Canadian Pacific railway, and I recall that Canadian Steamships is an interlocked directorate with Canadian National railways. Well, we lost most of our Canadian ships. It is hard to serve two masters, and in my opinion too much concentration of power in any arm of government is detrimental to the liberty of the subject.
This parliament has had two set-ups of the Bank of Canada. First, this government had a fifty-fifty set-up. whereby the people of Canada owned half the stock and the government the other half. This brought to the Bank of Canada the opinions of men all over the country who were interested in industry. They were elected by the shareholders and we knew what was going on. They had an annual meeting where they had to face the shareholders. It was claimed that the government must own the stock of the Bank of Canada completely to make it effective, because it must supply funds according to public needs, and the act was changed. Will anybody tell you that a person who owns fifty per cent of the stock in any company does not to all intents and purposes control that company? The government controlled that concern, but
they had the advantage of the cooperation of the Canadian public, and while it cost some money in the way of dividends, that could have been controlled.
I noticed one day in the Chateau Laurier, coming down the elevator, a sign on the board: "Annual breakfast of the Bank of Canada." It seems to me that government control is hardly control by the people in its fullest meaning as it was in the original set-up.
It is argued that economies will be effected under this new set-up, but the bill provides that the directors of the proposed bank are to be paid, and they will have an entire managing staff; so why not give them some authority and let the bank stand on its own feet? Let it be strong in its own right. We are told that when we create a company we create another person in law; so let this person be strong. I believe the directors of this bank should be independent of the Bank of Canada;
I think that would be eminently in the interests of the public. For want of a better word I would say that the powers of the Bank of Canada over the banking system of this country are almost judicial. The preamble of the Bank of Canada Act is quite comprehensive; it states that the bank is to regulate currency and credit in the best interests of the economic life of the nation. In section 2 of that act it is provided that the bank shall not, except as authorized by the act, engage m or have an interest in any trade or business. Evidently that provision is to be overcome by forming another company with the same ownership and management.
I am not criticizing, Mr. Speaker; I am only comparing. I note that the proposed bank does not come under the provisions of the Bank Act. That act is for the protection of the people. Under this bill there is no ceiling on business charges. I do not know that this is a serious matter, because they wifi be obliged to be liberal in their dealings in order to carry out the purposes of this bill. We are told that this bank is to help small industries, but there is no ceiling on the amount it can lend to any one company. It seems to me that if we say a bank is intended to help small industries fill the gap that exists in the present lending system, in order to meet the needs of the people, there should be a ceiling so that we may be sure only the small industries wifi be assisted. It may be said that this bank will bring uneconomic forces into play in industry. Well, if we have good management it will be like any other bank, and it is only reasonable to suppose that the management of this bank will see to it that its business is conducted on sound lines. I think I would trust them in that connection.

Industrial Development Bank

and I do not think vve need have any great fear about hurting the chartered banks. They are very strong. Banking in Canada has been remarkably free from competition in the last decade; the banks have cooperated well with each other. In the light of our experience, Mr. Speaker; in the light of the needs of the future, I believe the setting up of this bank is in the public interest.


Thomas Langton Church: Mr. Speaker, the motion before the Chair is for the second reading of the bill to incorporate the industrial development bank. On second reading we may discuss the principle of the bill but not the various clauses. The preamble and the interpretation section describe (he functions of .the proposed bank. Coming from an industrial province and an industrial city, I would hold up both hands in favour of this bill if I thought small industries in this country were going to get any relief from the intolerable artificial burdens and barriers and restraints of trade which have been imposed on small industries by this government since the beginning of the war. Under the control system of Mr. Donald Gordon and his associates on the wartime prices and trade board, $115,000,000 has been the cost of the various bonuses, subventions, subsidies and all that sort of thing, and who is going to pay for them? After all is said and done, in our economy the small industrial man has been the forgotten agency ever since this system of bonuses and subventions was started. I remember when the Farmers' Creditors Arrangement Act was brought in by the former government for the purpose of giving relief to the dirt farmers on the land. In 1935 it was extended to cover fishermen. At that time I contended that relief of this kind should be extended to small industries and to industrial workers throughout the country, but nothing was done. Then came the war, and the government of the day imposed the control system which I have indicated.
The parliamentary assistant to the Minister of Finance (Mr. Abbott) gave a lucid description of the functions of the proposed bank. The hon. gentleman has had a great deal of training, which should equip him for promotion. He stated that one of the functions of the bank would be to prepare the way. Well, they have been a long time preparing the way for the small industries of this country, who have been the forgotten members of our economic state since this war started. This measure is designed to bring about a high level of employment and national income after the war, and according to the preamble the measure is designed to promote
fMr. Kinley.]
the economic welfare of Canada by supplementing the activities of other lenders and by providing capital assistance to industry, with particular consideration to the financing of small enterprises. Then the interpretation clause defines an industrial enterprise. The provisions of this bill are contained in some thirty-four paragraphs; the parliamentary assistant gave a detailed explanation of the scope and object of the legislation. It would appear that the bank has power to guarantee loans, to acquire stock and bonds, and so on, and the bank is given power to lend money to both new and existing industrial enterprises. I should like to find out whether this measure will enable the small business man, who has had to obtain a loan from a shark loan company, to get on his feet again, and transfer to this new bank. Will those who have had to borrow money be helped under this measure? Many of our small industries have had to close up under the present control system.
The proposed bill is a Santa Claus bill. It will be a bank of faith, hope and charity, if it is proposed to aid the small industrial owner. Will the proposed bill enable him to have an account taken with respect to these shark loan companies which are charging him 2 per cent a month and more? Will it enable the small industrial proprietor to go to the subsidiary bank of the government or the Bank of Canada and seek funds from this subsidiary bank of the Bank of Canada in the manner indicated? I say there should be equality of treatment.
The parliamentary assistant said:
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 be obtained from a chartered bank or in the investment market, well and good. On the other hand, if such sources are not available then the industrial development bank will consider applications to assist projects which appear to be economically sound. The industrial development bank is not being set up to finance enterprises which are obviously doomed to end in failure. It would not be in the public interest to subsidize uneconomic activities in this concealed manner. On the other hand if the industrial development bank is to fill the gap I have described, it must operate on the assumption that there will be on the average a relatively high level of economic activity. .	.	. The government
believes that the existence of the industrial development bank will be of particular value to small business which has laboured under a certain handicap in obtaining medium and longterm capital. These small industrial establishments are an essential part of our economy, an important source of employment and production, one which we must not overlook when planning to maintain a high level of employment and income in this country after the war.

Industrial Development Bank
If that is so, namely, that they are an important part of our economy as far as employment is concerned after the war, then it has taken the government of the day nearly five years of war to find it out.
As I say, if this bill is going to give any help to those small industries, then I hold up both hands for it. But when I examine what the facts are I believe that in some respects this is a political bill. In other respects it might turn out to be a Santa Claus bill. Then, it may turn out to be that the industrial owners will not get the same privileges that the farmers, the fishermen and others have received under similar state-aid bills.
In the first place, I think the government in this instance has got the cart before the horse. First of all, it should announce to the house that it is going to remove some of the artificial barriers and burdens in restraint of trade which have been placed upon industry since the beginning of the war. Second, it should announce what its policy is to curb the shark loan companies, those companies which are charging more than two per cent a month. It should also announce what it is going to do about reducing taxation. Many of our industries have found that they have been driven to the wall by the barriers and heavy burdens of taxation.
In addition to that, I find that in England they are preparing for the period following the war. They are taking steps to protect small industry. Over there they have what they call a pre-war trade practices act, to put industry back to where it was before the war. We should have the same kind of bill adapted to our circumstances in Canada.
Perhaps I might point out some of the things which will have to be decided. I believe some of those young gentlemen who are popularly known as the brain trust or theorists who are behind the finance department, those men who have been the framers of the bill, as I see it, have not yet had any practical training in any competitive business. Yet we find them imposing in an unrestricted fashion these artificial burdens and barriers on business. Before the government creates this subsidiary bank it should make some announcement of policy. What is its policy going to be with respect to the proposal of one leftist party to take over the banks and the insurance companies? In my opinion, an election should clear the air and we should first decide whether or riot we are to have a totalitarian state, because if we are to have that there will be no such thing as private industry or private enterprise, or any large industry or small industry in Canada. That is one of the first things which will have to be decided.
We must decide, further, if we are to have tariffs. I know of no businessman to-day, either in large or small industry, who will invest a dollar in the expansion of his industry until he knows what the electors of Canada will do with the proposal to create a totalitarian state, a state in which the banks and insurance companies will be taken over.
In Ontario, during the term of office of the Drury government in 1923, a proposal was made along the lines of free trade with our competitors and destruction of industry. During the four or five years that government was in office not a business man in Ontario would invest one dollar in any industry. The result was that many industries were driven to the wall.
A decision will have to be made on what is to be done about preferential tariffs, which are guaranteed by article 4 of the Atlantic charter. What is to be done about that? What is to be done with preferential and favoured nation agreements. And, by the way,
I should like to get some attention from the ministry for a short time. For the past three years I have been asking the Minister of Munitions and Supply (Mr. Howe) what is to become of industry after the war. I should like very much to have their attention, particularly that of the Minister of Munitions and Supply. It is not often I address a question to him, and I do so now in all seriousness. In the sessions of 1941, 1942 and 1943 I proposed that the minister should make an announcement as to what he is going to do, when the war ends, with large and small industries in Canada working on war contracts with the government. It took many years after the last war before business could convert from a war-time to a peace-time economy. Money was not advanced under the Bank Act, and business was tied up, causing widespread unemployment. I presume this bill will be sent to a committee, but before it goes we should have some announcement from the government as to its policy on the matters I have raised, and a statement as to how much money it will release. I suggest that it should be up to fifty per cent, and that there should be some standard form of accounting taken immediately in ail industries, so that when the time comes for a cessation of hostilities business men who could not get advances from the chartered banks on a standard plan might get it through some government policy ahead, instead of having to wait three or four years or, as happened after the last war, sometimes ten or fifteen years, to get some help and settlement of accounts here.
Industrial Development Bank

In my opinion small industry has been done to death by controls, subcontrols, artificial burdens and barriers put upon them by the wartime prices and trade board. Many of them have, had to close up, because they could not get the labour or deliveries of parts of machinery. They were the victims of the system.	.
We find that this proposed bank contracts itself out of the Bank Act. Provision is made in the bill with respect to loans on real estate. A coach and four has been driven by some of the larger chartered banks as to real estate clean through section 82 of the Bank Act. Not by the widest stretch of imagination can it be said that, any chartered bank in Canada to-day has power to go into commercial real estate. I should like to have the attention of some of the members of the treasury board who are here this evening, because they are responsible for the present violation of section 82 of the Bank Act which has enabled these banks to go into commercial real estate. The government are writing into this industrial development bank bill the same power given to the chartered banks, I believe by sections 22 and 23. Section S2 of the Bank Act reads:
No bank shall hold any real or immovable property, howsoever acquired, except such as is required for its own use, for any period exceeding seven years from the date of the acquisition thereof, or any extension of such period as in this section provided, and such property shall be absolutely sold or disposed of, within such period or extended period, as the ease may be, so that the bank shall no longer retain any interest therein unless by way of security.
They were not to go into commercial real estate except for the purchase of buildings necessary for their business. The section continues:
2.	The treasury board may direct that the time for the sale or disposal of any such real or immovable property shall be extended for a further period or periods, not to exceed five years.
3.	The whole period during which the bank may so hold such property under the foregoing provisions of this section shall not exceed twelve years from the date of the acquisition thereof.
4'. Any real or immovable property, not required by the bank for its own use, held by the bank for a longer period than authorized by the foregoing provisions of this section shall be liable to be forfeited to His Majesty for the use of the Dominion of Canada: provided that
(a)	no such forfeiture shall take effect until the expiration of at least six calendar months after notice in writing to the bank by the minister of the intention of His Majesty to claim the forfeiture; and
(b)	the bank may, notwithstanding such
notice, before the forfeiture is effected sell or dispose of the property free from liability to forfeiture.	y

5. The provisions of this section shall apply to any real or immovable property heretofore acquired by the bank and held by it at the time of the coming into force of this act.
Notwithstanding all the provisions contained in the Bank Act for inspection and auditing and all that sort of thing, we had the failure of the Home bank and the Farmers' bank. What is to happen in connection with this industrial development bank? I do not want to throw cold wrater on the idea because I want to see a real bank that will give relief directly and indirectly to the small industries of this country to put them on their feet. They have been the forgotten agencies and we shall have to have some declaration of policy from the government on the various matters I have mentioned. Until that is done I do not think we can express an opinion on the functions or *the objects or the proposals in connection with this industrial development bank.
There are one or two other matters I should like to raise in connection with this bill. What is to be done with the loans already arranged for with different small shark loan companies set up by the Department of Finance, which are charging over two per cent a month? Are the small industries to be given the same privileges which were granted under the Farmers' Creditors Arrangement Act to farmers and fishermen? Are these loans to be taken over by the industrial development bank? I know many small industries in my city have been driven by war and controls to the wall; there are three or four in my own industrial riding. There has been no retrenchment in taxation and I do not know how the business man is to continue with the present state of affairs.
When dealing with another matter I referred to a visit made by Mr. Morgenthau, the treasurer of the United States, to Italy. He saw some of the soldiers over there who had had individual small businesses before they enlisted. They wanted to know if in addition to suffering in flesh and blood they were to be asked, when they returned, to pay for the war as well. They wanted to know if they were to get back their small businesses. Something should be done to provide relief for these small businesses. I cannot see anything in this bill that will protect the soldier who had a small individual business and who left it in the care of his wife or some other relative. They should be able to apply to the bank for relief.
The minister is not here this evening, but his parliamentary assistant has described the bill. This country was built up largely by our industries and since confederation they have paid a large share of the taxes. They have had little or no protection from the

Industrial Development Bank
controls and artificial barriers which have been imposed since the war started. I hope that when this bill goes to the committee the small men-I am here to represent the small retailer and business man-will be able to get some relief which he is not getting to-day.


Mr. W. A. TUCKER (Rosthern):: Mr. Speaker, I am sure that there will be general agreement with the purpose of this bill as expressed in the preamble, which states:
Whereas it is desirable to establish an industrial development bank to promote the economic welfare of Canada by increasing the effectiveness of monetary action through ensuring the availability of credit to industrial enterprises which may reasonably be expected to prove successful if a high level of national income and employment is maintained, by supplementing the activities of other lenders and by providing capital assistance to industry with particular consideration to the financing problems of small enterprises.
The bill proposes the setting up of an institution which is to be owned and controlled by the Bank of Canada and which may lend or guarantee loans to any industrial enterprise. As I understand it, capital will be supplied to the extent of $25,000,000 by the Bank of Canada, and a further $75,000,000 will be provided by permitting the industrial bank to borrow money on bonds or debentures. There is a provision that when the reserve is built up to the extent of another $25,000,000 from profits, the bank can borrow on bonds and debentures a further $75,000,000. The extent of the capital at present available, however. would be $100,000,000.
I should think one of the main purposes of the bank would be to assist those returning from overseas to get established in small businesses. I believe it will be acknowledged that one of the difficulties encountered by anyone starting up in business who has to borrow money on long term is the interest burden. It seems to me that the rate of interest to be charged should not exceed three or three and one half per cent. That brings up one of the features of the bill which I submit should be reconsidered, and I hope the banking and commerce committee will reconsider it.
Once the $25,000,000 advanced by the Bank of Canada is used up, the remaining money will have to be obtained, under the set-up proposed by this bill, by selling bonds or debentures. Those bonds or debentures, in order to meet a ready market would have to bear interest, I suppose, of around 4^ or 5 per cent. Mr. Towers, the governor of the Bank of Canada, in giving evidence before the banking and commerce committee in 1939 estimated that it cost two per cent of the assets of the chartered banks to do business.
Assuming that the cost of doing business by this bank would be in the same proportion

it might be higher because it would not be business on the same scale as the chartered banks to begin with-they would have to lend money at around seven per cent. They could not possibly hope to lend money at less than six per cent, and I submit that in order to help small businesses provision should be made for them borrowing money for a long term at not more than 3i per cent. In order to make that possible two things could be done. In fact, both I submit should be done. One is to permit the bank to receive deposits on which it would not have to pay more than 1 or 1-J per cent. The other would be to permit the bank to make use of the rediscount privileges which the chartered banks now have. In other words, it should have the right to take its bonds and rediscount them with the Bank of Canada at the present rediscount rate of li per cent and, if the rate were lowered, at the going rediscount rate.
The chartered banks have consistently taken the stand that if they are not permitted to make loans or to purchase government securities to the extent of ten dollars for every one dollar of their cash reserves, they cannot extend credit at the present rate of interest which they have to charge, which in many cases is six and seven per cent. I submit that if the chartered banks have to charge six and seven per cent with the privilege of accepting deposits and having the rediscount privilege, this new bank without such privileges would have to charge even more. The industrial development bank should be allowed to accept deposits the same as any chartered bank and have the same rediscount privileges. To deprive it of those privileges would be to force it to charge a higher rate of interest than it should if it is to carry out the function for which it is being set up.
As to the bill itself, I naturally will support it because I think it is a definite step in the right direction. It has been said that the bill does not go far enough. I remember when this government came into office in 1936 it found in existence a Bank of Canada which was owned and controlled by private interests, and it brought in a bill whereby it took control of the Bank of Canada but left the private interests owning the same number of shares in the Bank of Canada that they owned before and left them with representation on the board of directors. In other words, the private interests were left with a substantial ownership of shares in the Bank of Canada and a substantial share of control of the bank. It was suggested at that time that because the
Industrial Development Bank

government had not introduced a bill to establish one hundred per cent ownership and control by the public of the Bank of Canada we should vote against the bill, but my attitude at that time was this. I was not going to vote against a step in the right direction just because it did not go as far as I should have liked it to go.
My attitude in regard to this bill is the same. I do not think enough capital is provided to do the work, but that can be remedied as more and more capital is acquired. I do not think the bill provides for getting the capital at a low enough cost. That should be remedied in the banking and commerce committee; if it is not remedied in that committee it will become very plain in the actual operations of the bank that it should be done, and it will be done at any rate when the bank has had a chance to operate for a short time.
I certainly am pleased that it is proposed to introduce a bill to provide for cheaper long-term credit to the farming industry. Anyone who has watched the development of the farming industry in western' Canada will, I think, agree with me when I say that one of the great difficulties of that industry has been the fact that the farmers have had to pay seven and eight, and nine per cent on mortgage loans. Had those loans borne interest at around three per cent, then pay-[DOT] ment of eight per cent over a period of less than twenty years would have paid the loans off. But what happened was that in fairly prosperous years the farmers paid the eight per cent and were unable to cut down the principal of the loans, and that when times got a little worse they found the loans too heavy to carry, and the fact that they had to pay interest on these loans cut down their standard of living to a very low level. So that I think it is all important that steps be taken to lower the cost of money to the farming industry.
It is also very important that the agricultural bank when set up will have the right to accept deposits and have the right of rediscount so that it will get its money at least as cheaply as the chartered banks get theirs. If it gets its money as cheaply under the rediscount privilege at 1 t per cent, and assuming that it takes two per cent to do business it could lend money at 3| per cent to farmers to improve their homes and buildings, to get implements, to electrify their homes, and perhaps get better breeding stock.
A bill like that I hope is in the mind of the government and will be enacted this session 
It has been suggested that all of the government's programme should be put before the house at once. But my answer to that Would be that such a programme has to be put before the house step by step. It can all be considered in the banking and commerce committee as a whole, unless the committee decides that it wants to report each item separately.
There is one thing on which I feel I should make some comment. The hon. member for Rosetown-Biggar (Mr. Coldwell) availed himself of this opportunity once more to indicate, as I took it, that if the government took control of industry in this country there would be no difficulty at all. He referred to the period from 1933 to 1939 and spoke of the difficulty of getting private capital to invest in industry during that period, and he suggested, as I understood it, that if his party came into power and took control of all industry in the country-


Mr. CASTLEDEN:: Nobody has any such intention.


Walter Adam Tucker: I can only speak as I understood the hon. member. It is quite true that in certain places the C.CiF. 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 it is stated, for example, that their programme is actually to take control of farm land as in Russia.


Thomas Clement (Tommy) Douglas: Would the hon. member quote that.


Walter Adam Tucker: I can quote it but I have not it on my desk. I would ask the hon.
member this: Do the C.C.F. members in this house say that that is not the programme of the C.C.F. in British Columbia, or in Ontario? If they say it is not the programme, then I will sit down and hear them deny it. But I read the Vancouver Sun. It stated that the programme of the party in regard to farm lands was-I forget the exact wording, but "as in Russia" was used. That is enough for me.
I would like to have the C.C.F. members say whether their supporters in British Columbia have or have not adopted that as their programme.


Thomas Clement (Tommy) Douglas: Does the hon. member want an answer?


Walter Adam Tucker: Yes


Gordon Graydon: Be careful.

Industrial Development Bank


Thomas Clement (Tommy) Douglas: The hon.
member has quoted something from a newspaper without having the paper here. The
C.C.F. have no policy-


Some hon. MEMBERS:: Hear, hear.


Mr. MacNICOL:: Well, that is good news.


Mr. FRASER (Peterborough West):: Truer words have never been spoken.


Thomas Clement (Tommy) Douglas: That is vociferous without being funny. The C.C.F. have no policy in any province-


Some hon. MEMBERS:: Hear, hear.


Some hon. MEMBERS:: Oh, oh.


Thomas Vien: Order.


Thomas Clement (Tommy) Douglas: That is rather characteristic of people who will hardly wait to get an answer. The hon. member wants an answer. The answer is that the C.C.F. have no policy in any province advocating the collectivization of land as in Russia, or anj^where else; and if the hon. member wants to discuss that he ought at least to bring a copy of the C.C.F. programme with him and quote from it, rather than depend on his memory of what is stated in the Vancouver Sun.


Ian Alistair Mackenzie: I will bring about fifty extracts next Thursday to this house to prove that what the hon. member for Rosthern (Mr. Tucker) said is correct.	.


Thomas Clement (Tommy) Douglas: I wish the minister would do so.


Gordon Graydon: I do not think that would help very much, but I would like to bring some myself.


Stanley Howard Knowles: And I do not think that will help much, either.


Walter Adam Tucker: I take it that the hon. member for Weyburn says that that is not the programme. He takes the responsibility for saying that that is not the programme arid that his friends in British Columbia did not use the words "as in Russia," meaning collectivization of farm lands as in Russia. I gather that the hon. member is rising and undertaking to correct me and say that that is not so. I wonder if that is the case, that he undertakes to make that statement?


Thomas Clement (Tommy) Douglas: The hon.
member for Rosthern is asking me to contradict something which he himself is not definite about. He says, "something to that effect." Now will he make a definite statement? I am quite prepared to contradict it;
I will say most definitely that the C.C.F. in no province in Canada have at any time advocated the collectivization of land as in Russia or anywhere else. I state that most categorically.


Gordon Knapman Fraser: (Peterborough West): Your leader in British Columbia said that.


Thomas Clement (Tommy) Douglas: Not at all.


Gordon Knapman Fraser: He absolutely did.


Mr. MITCHELL:: And the socialization of industry.


Walter Adam Tucker: I am quite satisfied. The hon. member has now stated that their party in British Columbia did not say that they are going to do the same to farm lands in British Columbia as was done in Russia. I intend, Mr. Speaker, to bring the actual statement before parliament at the very earliest possible date; in fact, if I could adjourn this debate now I would bring the statement and present it during this debate. Indeed, in view of the fact that the hon. member has undertaken to make that categorical statement I ask leave to adjourn this debate so that I can present the proof to him right in the course of this debate. I move the adjournment of this debate.


Gordon Graydon: Mr. Speaker, surely we are not going to reach the position in this house where an argument between two hon. members justifies the adjournment of an important debate like this.


Thomas Vien: The hon. member has made the motion. I shall have to put it to the house. Those in favour will please say "yea". Those against will please say "nay".


Some hon. MEMBERS:: Yea.


Some hon. MEMBERS:: Nay.


Thomas Vien: In my opinion the "nays" have it.


Walter Adam Tucker: Mr. Speaker, as I was saying when interrupted by the hon. member for AVeyburn, the Cooperative Commonwealth Federation suggest that if they take control of all industry in this country and ownership of all the means of wealth production in the country, they would have no difficulty in regard to handling the situation in Canada. I would say in that regard that, whether the state owns and controls industry or whether it does not, if we have not the markets to export the vast surpluses of food products, metal products and wood products which we produce, there will be great difficulty in handling the industrial and economic set-up,
Industrial Development Bank

and the fact that it is owned by the government will make it no easier to meet the situation than if it is handled by private industry. It seems to me that in advocating that a group of politicians should control the industrial set-up, instead of having it controlled by the people who are used to it, and without meeting the problem of markets, the C.C.F. are taking for granted that the Canadian people have very short memories and very little understanding as to how these things do actually operate.
Another matter which has been mentioned, and which I think is of importance, is the decentralization of industry. I have felt for some time that banking policy shows more unwillingness to extend credit to industries in the maritimes and in western Canada than to industries in Ontario and Quebec. I suggested some years ago that there should be some means whereby anyone who had a good proposition and was denied credit to develop it should have a right of appeal to some body which would have in mind the interest of the country as a whole. It is true that to-day the banks, in extending credit, consider only banking interests, and it is time that there should be some control over them in the extending of credit, so that, should they allow the interests of the banks too much weight as contrasted with the best interests of the country, there should be some public authority able to intervene.
We have a board of grain commissioners. It is suggested that we have a board of live stock commissioners. I submit that in handling a public franchise as important as public credit there should be an authority to which people or, indeed, communities, could appeal if they did not think they were getting a square deal. I suggest that, if we retain our present banking system substantially as it is, there should be a board of bank commissioners to which people could appeal if they did net get a square deal with respect to the extension of credits.
As to the necessity for providing for cheap long-term credit, I would give an example. One of the things we need badly in western Canada is mills to crush flax and oil-bearing seeds, which we grow. It would save the cost of shipping them east, and it would retain to us the by-products which we can obtain from crushing these plants. As I understand it, there is great difficulty in getting credit to set up these oil-crushing plants because, most bank directors being stationed in the eastern and central part of Canada, they know only the set-up in their own areas and are less inclined to advance credit to industries on the prairies

or in the maritimes. This bank, I assume, will enable people who want to set up such oilcrushing plants to get the necessary credit. It comes down to this, and I am quite frank to say so, that the banks to-day operate the most valuable franchise which this country has given to any group of people, and that franchise must be operated in the interests of the people of Canada; otherwise either they will have to be controlled or, as the other alternative, the franchise will be taken away from them. As a Liberal I believe it would be much better to control the banking system in the best interests of the country, rather than put it in the hands of politicians to operate under the control of a government.
I am quite satisfied, Mr. Speaker, that my hon. friends of the C.C.F. party, when they take the attitude that the government should control everything, are proposing a policy whereby ultimately the government would be so powerful that political liberty would become a fiction. I have no doubt that if a government got control of the entire economic activity of the country our political rights would go. I suggest, therefore, that the solution consists in steps such as this by which, to the extent required, we may improve our economic system so that it shall meet the needs of the time without transferring to the hands of a government the ownership and control of industry except as absolutely required by the needs of the time as developments occur.
On motion of Mr. Diefenbaker the debate was adjourned.

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


DEPARTMENT OP MINES AND RESOURCES
[Stage Direction]
122. Departmental administration, $152,565.
Item stands.

[Stage Direction]
338. Departmental administration, $151,500.
Item stands.
Gordon Graydon: May I say to the acting leader of the government that we have now put into supply nine departments one of which, I believe, national defence civil estimates, has been concluded and passed. I would caution the government that while wre are prepared to facilitate the work of the administration as far as possible, we are now reaching the point where perhaps they are straining matters a little to ask us for the moment to enter into any more departments as they are now doing. There are now nine departments in supply and that gives the government plenty of room to operate in, so that before any further move

Privilege-Mr. Tucker
is made the government ought to consider the suggestion I have offered.


Ian Alistair Mackenzie: Speaking on my own behalf only, may I say definitely that there is no restriction on the rights of the government. There is no power on the part of the opposition to prevent the government from going into supply. There is no obligation either of rule or of procedure to prevent the government from calling any items of supply that may be entered into.


Gordon Graydon: The minister cannot mean that in the manner in which he says it.


Ian Alistair Mackenzie: I certainly do.


Gordon Graydon: After all, we are willing that the government should get into supply in each of these cases, but if the government invites an amendment each time it asks for supply, then of course we shall be inclined to oblige them with an amendment.


Ian Alistair Mackenzie: We called two items on Monday afternoon to give an opportunity for amendments or discussion according to the desire of any group in the house.
Progress reported.
On motion of Mr. Ralston the house adjourned at 10:55 p.m. until Thursday, at three o'clock p.m., pursuant to special order made Monday, February 21, 1944.
Thursday, March 9, 1944