1944-06-23

Mr. SPEAKER:: I have the honour to inform the house that I have received the resignation of Maurice Gingues, Esquire, as member for the electoral district of Sherbrooke. I have accordingly issued my warrant to the chief electoral officer to make out a new writ of election for the said electoral district.



REPORTS OF COMMITTEES


[Stage Direction]
Mr. W. G. WEIR (Macdonald) presented the first report of the standing committee on agriculture and colonization and moved that the report be concurred in.
Motion agreed to.

[Stage Direction]
Fourth report of standing committee on miscellaneous private bills.-Mr. Picard.

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

Mr. BENCE:: What was the cost value of the obsolete stationery and printing recovered as salvage from the equipment depots of the R.C.A.F., in each of the provinces of Manitoba, Saskatchewan, and Alberta, during the twelve-month period from May 1, 1943, to May 1, 1944?


Mr. MACMILLAN:: No obsolete stationery was recovered as salvage. Certain recovery from forms and maintenance schedules was effected: (a) by reduction of such forms to scratch pads; (b) through equipment depots as salvage paper. The total original cost of material (forms, schedules, etc.) so used was:
No. 7 equipment depot, Winnipeg, Man., $2,630.42; No. 11 equipment depot, Calgary, Alta., $1,689.60. Total, $4,320.02. There is no equipment depot in Saskatchewan.


WARTIME PRICES AND TRADE BOARD-ONTARIO TRUCK DIVISION, BILINGUAL EMPLOYEES
Mr. GAUTHIER:: 1.	What are the centres or districts of Ontario which have the services of bilingual employees in the wartime prices and trade board, truck division?
2.	What are the names of such employees and the locations of their offices?


Mr. ABBOTT:: 1 and 2. Centres in Ontario-Name of Employee.
Ottawa-Regional office, 69 Rideau St., Mrs. E. Beament, Mr. A. Renton, W. V. Kidd, L. G. Belanger, J. H. Lafreniere, E. D. Drouin, J. H. Pepin, F. Chevalier.
Cornwall-Local office, 113A Pitt St., Mr. J. R. Poirier, R. A. Poirier, M. G. Bergeron, J. A. Villeneuve, J. D. Asselin, C. Leger, J. M. St. Laurent, Y. M. Pommier.
Windsor-Local office, Canada building, F. P. Bouteiller.
North Bay-Regional office, 169 Main St., L. Lamoureux, Miss R. Thomas.
Cochrane-Local office, King George Hotel, J. M. Gauthier, J. A. Brouillard, Mrs. E. Oulette.
Kirkland Lake-Local office, Roberge Bldg., L. E. Charette.
Timmins-Local office, Ostrosser Bldg., Mrs. L. Thorburn, Miss W. Martin.
Sudbury-Local office, Northern Ontario Bldg., L. Huneault, A. Lamoureux.


STRAIT OF CANSO FERRY
Mr. McGARRY:: 1.	What is the annual cost of the railway operations of the Strait of Canso ferry?
2.	What is the cost of operating the ferry steamers, including maintenance, repairs of all kinds, and all operating costs?
3.	What is the cost of switching engines on both sides, as well as the upkeep of the roundhouse, and all the equipment necessary for the operation carried on on both sides of the Strait of Canso?
4.	What is the cost of freight haulage per ton mile from Sydney to Halifax. Sydney to Truro, and Sydney to Moncton, and the total tonnage hauled?
5.	What would be the estimated cost of freight haulage with a bridge across the Strait of Canso, a new Toad alignment from Sydney to the strait, and from Sydney to Moncton, with grades reduced to possibly seven-tenths?
Questions


Mr. MICHAUD:: 1.	These costs are not segregated in the railway's accounts and are therefore not available.
2.	8212,000 for the year 1943.
3.	See answer to question No. 1.
4.	With regard to the first part of this question, the information is not available in form requested. The total tons of freight handled tver the line from Sydney to Point Tupper iboth directions) for the year 1943, was about 2,500,000 tons, which quantity, however, is much above the average over a period of years.
5.	It is not considered practicable to make a useful estimate as the cost of freight hauling depends on many more factors than the gradient of the lines.
With reference to questions 1, 3 and 4, the preparation of the information called for would entail a tremendous amount of clerical work in segregating the required items from the general operating and financial statistics of the railways. This work has not been undertaken on account of the lack of qualified staff due to war conditions.
veterans' land act


Mr. FAIR:: 1.	Up to the present time, -how many parcels of land have been purchased in each province for account of Veterans' Land Act?
2.	On how many parcels in each province has the board secured an option?
3.	How many of these parcels are equipped with habitable buildings?
4.	What is the price per acre paid or agreed on in each province for land, (a) with buildings; (b) without buildings?
5.	Have any commissions been -paid ,to individuals or other agencies for securing those lands?
6.	If so, at what rate, to whom paid, and what amount was paid to each?
7.	Will those commissions -be included in the price charged to the settler in each case?


Mr. FAIR:: I would ask that this question be dropped.
Question dropped.


CONSCIENTIOUS OBJECTORS-FARM WORK- DROUGHT BONUS
Mr. BRYCE:: 1.	Can the party operating a -farm, owned -by a conscientious objector now in camp, receive drought bonus?
2.	If not, why?
[Mr. McGarry.l


Mr. GARDINER:: 1.	If otherwise eligible under the Prairie Farm Assistance Act and regulations, the fact that the farm of which he is the operator is owned by a conscientious objector does not render a farmer ineligible for the award.
2.	Answered by No. 1.


FIBRE BOARD USED IN MANUFACTURE OF CHEESE BOXES
Mr. FRASER (Peterborough West):: 1.	Is a subsidy being paid on fibre board used in the manufacture of cheese boxes?
2.	If so, how much is the subsidy per box?
3.	What is the -total amount of the subsidy to date?
4.	Is there a -subsidy being paid for elm veneer when used in the manufacture of cheese boxes ?
5.	If so, how much is the subsidy?
6.	What is the total amount of subsidy paid to date?
7.	In addition to the subsidy paid on materials used in the manufacture of cheese boxes, is there any subsidy paid on cheese -boxes?
8.	If so, what is the amount of -the subsidy paid to date?


Mr. ABBOTT:: 
PRODUCTION OF ALCOHOL FOR FUEL
Mr. BLACKMORE:: 1.	What additional factories were established in Canada for the production of alcohol for fuel in Canada during each of the years 1940, 1941, 1942 and 1943?
2.	How much alcohol for fuel was produced in Canada during each of the years 1940, 1941, 1942 and 1943?


Mr. HOWE:: 1.	None.
2.	None.


WARTIME PRICES AND TRADE BOARD-PRICES TO RETAILERS-TRANSPORTATION
Mr. ISNOR:: 1.	What is the distance in railway miles from Toronto to Winnipeg; from Toronto to Halifax, Nova Scotia; from Toronto to Sydney, Nova Scotia?
2.	Because of transportation charges, what additional amount is allowed to retailers in the city of Winnipeg and west therefrom by the wartime prices and trade board under the provisions of orders No. 143 and No. 214?
3.	Is the same allowance granted to Halifax and Sydney merchants?
4.	If not, why not?


Mr. ABBOTT:: 1.	The distance by railway from Toronto to Winnipeg is 1,207 miles, C.N.R., and 1,231 miles C.P.R. from Toronto to Halifax, N.S.; -1,175 miles, C.N.R. and 1,099 miles C.P.R; from Toronto to Sydney, N.S.-1,337 miles C.N.R.
2.	The majority of price fixations under the provisions of order No. 214 are established on an f.o.b. manufacturer's plant or shipping point basis, sales tax extra, to which wholesalers and retailers may add transportation charges .and sales tax paid by them, if not included in the manufacturer's price. To this aggregate cost may be added a markup no greater than the markup customarily obtained by such wholesalers or retailers in pricing the same or their most nearly comparable line of merchandise during
the basic period from September 15, 1941 to October 11, 1941. Provision is usually made in the price fixations for an over-riding maximum mark-up, which may not be exceeded.
Where it is a custom of the trade, principally in foodstuffs, prices to retailers may be fixed by zones. These are delivered prices, sales tax paid, and reflect transportation and other costs, to which the wholesaler or retailer may add his customary mark-up as outlined above.
The same general principles are followed in fixing prices under the powers contained in order No. 143.
3.	Because of the difference in mileage it follows that the permitted addition for transportation charges to merchants in Halifax and Sydney would not necessarily be the same as in Winnipeg, but would be the actual transportation charges paid by the merchant.
4.	Answered by No. 3.


WOMEN WAR WORKERS' RESIDENCE, KINGSTON
Mr. AYLESWORTH:: 1.	Did the government build a women war workers' residence in Kingston?
2.	If so, when was it built and what did it cost?
3.	What is the total accommodation?
4.	What was the cost of equipping the building ?
5.	How many chesterfields are in the building?
6.	What did they cost?
7.	What are the names of the staff?
8.	What are their salaries?
9.	Is there an advisory committee to the staff?
10.	If so, of whom does it consist?
11.	Do they receive any remuneration and if so, how much?
12.	How many women were in residence during each month of the past year?
13.	Where did they work?
14.	What was the average length of residence?
15.	How many women were in residence on June 1, 1944?
16.	Are they all working in war work?
17.	If not, what do they do?
18.	What is the total cost of operating the residence to June 1, 1944?


Mr. HOWE:: 1.	Yes.
2.	Completed about October, 1943. Cost of building only, $257,432.32.
3.	422.
4.	$71,867.43.
5.	44.
6.	$2,017.40.
Questions

7 and 8.	Semi-monthly-
Name	salary
James Halliday	 $82 06
Alice Thompson	 89 56
Joyce Vey	 46 71
Edith Lamarraerx	 46 71
Mildred Murray	 72 56
Marion Wheeler	 55 44
Dorothy Abbott	 55 44
Winnifred Clarke	 55 44
Harriet Stewart	 55 44
Adoma Carlin	 46 71
Bessie Wilsin	 27 30
Amelia Parker	 33 74
Elizabeth Tracey	 33 74
Margaret Kirkpatrick	 33 74
Rose Caduc	 33 74
Eva Buchanan	 33 74
Ethel Wilde	 33 74
Juamta Nichols	 33 74
Agnes Merrick	 33 74
Marie Belanger	 33 74
Clara Edwards	 31 14
Robert McEwen	 57 06
George Orr	 51 90
Charles O'Neill	 57 06
David Hopkins	 77 06
Eraser Stensen	 64 56
Norman Biggar	 50 00
9.	Yes, there is an advisory committee covering all Kingston operations.
10.	The advisory committee consists of the
following:	Mr. Grant MacLachlan, acting
chairman; Mr. S. Frayn; Mr. George Bawden.
11.	No remuneration is paid to the members of the advisory committee.
12.
Month
October 30, 1943 .. November 27, 1943 December 25, 1943 January 29, 1944 . February 26, 1944 . March 25, 1944 ...
April 29, 1944 __
May 27, 1944 .... June 17, 1944 ...
No. in residence .	31
. 190 . 211 . 231 . 206 . 201 . 200 . 228 .	154
13.	Aluminum Company of Canada; Nylon workers; shipyard workers; locomotive workers; Monarch Battery; headquarters staff; W.R.C.N.S.; nurses.
The staff and others not designated.
14.	Information not readily obtainable.
15.	166.
16.	As of June 10, 1944, approximately 90 per cent were war workers or in war services.
17.	As of June 10, 1944, the break-down of occupancy is as follows: Aluminum Company of Canada, 43; nylon workers, 16; shipyard

workers, 6; locomotive workers, 2; Monarch, Battery, 1; W.R.C.N.S., 1; headquarters staff, 2; nurses, navy, 57; staff, 13; others not designated, 16.


IS. $25,831.38. QUESTION PASSED AS ORDER FOR RETURN CROWN COMPANIES
Mr. POULIOT:: What crown companies have been incorporated, (a) by statute; (b) by order in council?


FAMILY ALLOWANCES
[Stage Direction]
Right Hon. W. L. MACKENZIE KING (Prime Minister) moved that the house go into committee at the next sitting to consider the following resolution:
That in order to ensure a greater measure of well-being to the children of the nation and to help gain for them a closer approach to equality of opportunity, it is expedient to introduce a measure to provide:
1.	That family allowances, effective as from the first day of July, 1945, be paid in respect of each child in Canada under sixteen years of age, in accordance with the following scale:
in respect of a child less than six years old, five dollars per month;
in respect of a child six or more years old but less than ten years old, six dollars per month;
in respect of a child ten or more years old but less than thirteen years old, seven dollars per month;
in respect of a child thirteen or more years old but less than sixteen years old, eight dollars per month;
Provided that the above rates shall be reduced; by one dollar per month in respect of the fifth child;
by two dollars per month in respect of the sixth child and seventh child; and
by three dollars per month in respect of the eighth child and any additional child or children;
2.	That the reduction in tax under the Income War Tax Act allowable to a taxpayer by reason of a child shall be reduced by an appropriate amount based upon the family allowances payable under the said measure;
3.	That the amounts required under the said measure be paid out of unappropriated moneys in the consolidated revenue fund.
4.	That the expenses necessary for the administration of the proposed act be paid out of the moneys appropriated by parliament for such purpose.
He said: His Excellency the Governor General, having been made acquainted with the subject matter of this resolution, recommends it to the consideration of the house.
Motion agreed to.

Prisoners oj War

[Stage Direction]
On the orders of the day:
Mr. GORDON GRAYDON (Leader of the Opposition):: Mr. Speaker, I desire to ask a question of the parliamentary assistant to the Minister of National Defence for Air. Will he give the house full information with respect to the recently reported incidents at Valleyfield?


Cyrus Macmillan: Mr. Speaker, I thank the hon.
member for giving notice of his question. The A.O.C. of No. 3 training command reports that two men, one service and one civilian, were involved in a scuffle at 22:30 hours on the night of June 19 and were taken into protective custody by the local police. Subsequently a number of air force personnel appeared before the city gaol and requested the release of Sergeant Primeau, the airman involved, to which request the chief of police complied.
The full details of this are not entirely clear, but it appears that during the scuffle in the vicinity of the gaol a policeman received a blow, presumably from the fist of one of the service personnel present. His injuries, if any, were of a very minor nature and no hospitalization or medical treatment was necessary.
A court of inquiry was established ,and meanwhile all personnel, with the exception of a few who are living out, have been confined to barracks. The morning after the disturbance the usual route march was held, but these have been suspended by the A.O.C. in order not to excite any demonstrations. The A.O.C. stated that the newspaper reports were greatly exaggerated and that he has had conferences with the city manager and chief of police at Valleyfield, who are satisfied that everything possible is being done so that no further disturbances need be anticipated1. He has assured the civic authorities that any service personnel involved would be made available upon their request.	,
The A.O.C. has detailed two of the command legal officers to conduct the inquiry, and when the proceedings are received full details will be available and will be forwarded to air headquarters as quickly as possible. Squadron Leader Chopin was acting as commanding officer dtiring the absence of Wing Commander Cronyn on temporary duty. The latter has now returned to his station. There has apparently been a satisfactory end of the trouble, and there has been no further disturbance.


PRISONERS OF WAR
[Stage Direction]
On the orders of the day:
Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, I should like to make a statement respecting relief supplies to prisoners of war and internees in the far east.
On June 5 I promised the hon. member for New Westminster (Mr. Reid) that I would make a statement about efforts which are being made to improve the position of prisoners of war in the far east.
In January last I outlined the attempts which had been made by the Canadian government and the Canadian Red Cross Society in collaboration with other allied governments and Red Cross societies, to establish a regular service for the sending of food, clothing and medicines to our nationals in the far east. For over two years now, continuous efforts have been made by the governments and Red Cross societies of the British commonwealth and the United States to secure Japanese agreement to the regular transmission of relief supplies. In spite of repeated disappointments, and rejection by the Japanese government of one proposal after another, we have persevered in our efforts. So far, only supplies carried by the exchange vessel Gripsholm and by the British exchange vessels during the course of civilian repatriation movements have reached allied nationals in Japanese and Japanese controlled territory. All possible supplies were carried by these ships, but the amount was pitifully small in relation to the needs of the thousands of prisoners of war and civilians in the far east.
In December of last year representatives of the British, American and Canadian Red Cross societies meeting in Washington appealed to the Japanese Red Cross to use their influence with the Japanese government and to offer advice and suggestions, with a view to establishing a regular service for relief supplies. More recently, through the agency of the Swiss government, the governments of the British commonwealth countries proposed to the Japanese government a plan for the regular shipment of food and medicines in both directions on a neutral ship under the auspices of the International Committee of the Red Cross and manned by a neutral crew plying regularly between an agreed allied port and a port on the perimeter of Japanese-controlled territory. This proposal is similar to one originally made by the Canadian government in 1942 but dropped then because other proposals seemed more likely to be accepted.
Prisoners oj War

The current plan provides that a 'second ship shall be placed at the disposal of the Japanese government to pick up the supplies at the entrepot and carry them to points where they are needed. This second neutral ship might be manned by a Japanese crew.
As yet no reply has been received from the Japanese government to this proposal, which was submitted to them by the Swiss government on May 8.
Some time ago, limited stocks of food, clothing and medical supplies were shipped jointly by the Canadian and American Red Cross societies to Vladivostok for onward transmission to allied prisoners of war and internees in Japanese hands. The Soviet government agreed to hold these supplies until an agreement was reached with the Japanese authorities for their movement and there are now fifteen hundred tons of relief goods stored in Vladivostok. On May 10 the United States government received a communication from the Japanese government, offering to send a ship to a Soviet port at regular intervals to pick up the relief supplies already stored at Vladivostok, as well as additional shipments of relief and mail which would be sent subsequently to Soviet territory. The Soviet government was consulted and they have indicated their willingness to have the stocks loaded on a Japanese ship at a convenient port near Vladivostok, or alternatively to send the supplies over land to be delivered to the Japanese authorities at a convenient border railroad station. The Soviet government has also offered the facilities of an equally accessible port, to which future shipments of supplies and mail may be sent. The Soviet proposals have been communicated to the Japanese government, and it is hoped that a regular service for relief supplies and mail for distribution to allied nationals in Japanese custody may be established.
All relief supplies sent to the far east under any of these plans would be pooled, that is, would be made available to Canadian and other commonwealth prisoners of war and internees, as well as to those of the United States and the Netherlands.
I wish to make it clear that the Swiss government as protecting power for Canadian and other British commonwealth interests in Japan is the official channel through which all formal approaches to the Japanese government are made. I have already, more than once, spoken of the gratitude we owe the Swiss for their untiring efforts on behalf of our prisoners and civilians in enemy hands. The cooperation of the Soviet government has been requested in this instance in view of the desirability of establishing a depot on

the pacific coast of the U.S.S.R. to which relief supplies can be forwarded and where they can be stored pending onward shipment to Japanese territory. The Canadian government, in common with the other interested governments, are deeply grateful to the Soviet government for their ready cooperation and willing assistance.


DEFENCE OF CANADA REGULATIONS
[Stage Direction]
On the orders of the day:
Mr. FRED ROSE (Cartier):: Mr. Speaker,
in view of the statement made by an hon. member from the other place, reported in to-day's issue of the Montreal Gazette, with regard to the existence of a secret organization plotting to create a separate corporative state within the province of Quebec and parts of Ontario, will the Minister of Justice make a statement in the house, either to-day or in the near future, outlining steps his department will take to investigate the charges made?
Hon. L. S. ST. LAURENT (Minister of Justice): I might suggest to the hon. member that if he would put his question on the order paper without reference to any debate in the other place I could answer it without trespassing upon standing order 41 of this house.


Thomas Vien: The hon. member should
place his question on the order paper.


WHEAT BOARD
[Stage Direction]
On the orders of the day:
Mr. J. G. DIEFENBAKER (Lake Centre):: I desire to ask a question of the Minister of Trade and Commerce, arising out of a press item to the effect that for the first time in its history the wheat board has appointed a representative in Washington. Is the minister prepared to give a statement with regard to this change? Will he indicate also whether the reports appearing in some of the United States papers, to the effect that arrangements have been made whereby after the war the United States will buy a larger amount of Canadian wheat than anticipated, are correct?


Hon. J. A. MacKINNON (Minister of Trade and Commerce):: I am grateful to the hon. member for Lake Centre for giving me notice of his intention to ask these questions.
In answer to the first question, the Canadian wheat board has two principal considerations

Wheat Board
in appointing a representative in Washington. The first is that over the past eighteen months the United States has been purchasing very substantial quantities of feed grains from Canada, including wheat. For example, during the 1943-44 crop year to date the United States has imported 144,000,000 bushels of wheat, 62,000,000 bushels of oats, nearly 28,000,000 bushels of barley, nearly 9,000,000 bushels of rye and over 10,000,000 bushels of flaxseed. Altogether in the calendar year 1944 it is anticipated that the United States will import 170,000,000 bushels of Canadian wheat, in addition to what coarse grains are above our own requirements. Since the purchasing arrangements on wheat and the transportation on all grains have to be arranged between the Washington authorities and the Canadian wheat board, it will obviously be of advantage to the board to have a representative in Washington to serve as liaison between the board and the responsible Washington officials.
The second consideration is that Canada is an active participant in the operations of the combined food board, the cereals committee of which is bringing the grain supplies and requirements of the allied nations under international allocation. The cereals committee of the combined food board has been functioning since January of this year, with Mr. George Mclvor, chief commissioner of the Canadian wheat board, serving as its chairman. Since it is impossible for Mr. Mclvor to devote more than a small portion of his time to the work of this committee in Washington, the board's representative in Washington will be in a position to participate in the operations of the committee from day to day.
I might add that Mr. W. C. McNamara, who has been appointed to this position, has been associated with the Saskatchewan Pool Elevators Limited in Regina since 1924. More than two years ago he was lent to the Canadian wheat board and was in charge of the transportation department of the board. He has therefore been directly in touch with the transportation arrangements on the feed grain supplies which have already been moved to the United States.
I am sorry I am not in a position to-day to give the hon. member any information as to the supplies of wheat the United States may wish to buy in Canada next year. At the present time there does not appear to be any signs of a diminution in the demand from the United States.


GASOLINE
[Stage Direction]
On the orders of the day:
Mr. J. H. BLACKMORE (Lethbridge):: In [DOT] view of the statement made by the Minister of Munitions and Supply on gasoline supply on Tuesday, June 20, is the government in the market to purchase any quantity of 80-octane and other grades of aviation gasoline from otheTs than the refineries?


Hon. C. D. HOWE (Minister of Munitions and Supply):: It is the practice of the government to purchase its requirements of gasoline from refineries in Canada, which have either purchased the crude oil from Canadian sources, or have obtained petroleum from sources abroad which was brought into Canada through the agency of the oil controller. I know of no supplies in Canada that are not in the hands of refineries. If my hon. friend can show his wares and tell us where the gasoline is, we shall be very glad to buy it. I think I have some knowledge of the source referred to in his question, and if my hon. friend knew as much about it as I do, he would not be asking the question.


STATEMENT ON SUPPLIES FOR CANNING
[Stage Direction]
On the orders of the day:
Hon. J. L. ILSLEY (Minister of Finance):: I was asked a question by the hon. member for Haldimand (Mr. Senn) on Tuesday last about sugar for canning, and I promised to make a statement to-day. I dislike reading these long statements on the orders of the day, but I do not think there is any remedy for it.


Gordon Graydon: It is important.


James Lorimer Ilsley: maximum of twenty-five pounds of sugar per person available for canning purposes (only five pounds of which could be used for preserving jams, jellies and marmalade), ten pounds of this quantity being available through two coupons in each ration book and the remaining fifteen pounds being obtained [DOT] by application to local ration boards, indicating the quantities of fruits and preserves to be canned. Under this scheme United States consumers took up an average of only thirteen pounds of canning sugar per capita, and only approximately forty-five per cent of consumers made application for canning sugar beyond the ten pounds obtainable by ration book coupons.
Our experience in Canada was markedly different. In 1943 consumers were required to apply to their local ration boards for their full supply of canning sugar. While the wartime prices and trade board had anticipated that perhaps thirty-five per cent of tha population would make application, in actual fact eighty-four per cent of all consumers applied for an average of approximately twenty-three pounds of canning sugar per person. As this amount was just over double the amount of sugar which Canada had allocated for canning purposes or had previously used for this purpose, the solution which had to be adopted was to distribute through local ration boards an average amount of 11-3 pounds per applicant, the actual distribution of this amount in each district being left somewhat to the discretion of the local ration board to permit adjustment to local conditions. In addition, the introduction of the preserves ration in September made available, through the sugar alternative of the preserves ration, a maximum of an extra four pounds of sugar during the last four months of 1943, thus making it likely that consumers in Canada obtained on the average the thirteen pounds of sugar for canning which was the average in the United States.
Officials in the two countries are inclined to feel that the different results obtained in the two countries on the basis of somewhat similar policies are probably largely due to the fact that in many of the larger American cities an important section of the population does little or no home canning, with the result that on the average the supply of sugar for home canning has to be more widely distributed in Canada than in the United States. In any event, the experience of the United States authorities was such as to justify them in adopting for 1944 a policy very similar to that they had used in 1943. The only amendments made were those of detail; for example, only one coupon was included in ration books

to cover the acquisition of five pounds of canning sugar, application being required for the remaining twenty pounds this year as opposed to fifteen pounds last year, while consumers were relieved from the necessity of indicating this year in their applications how much fruit and preserves they proposed to put up. In addition, the five-pound restriction on sugar for jams, jellies and marmalade, a limitation which was never in effect in Canada, was removed. It should be noted that, although consumers may receive a maximum of twenty pounds of canning sugar on application, it lies within the discretion of local ration boards to reduce the amounts requested, and should, for instance, our own experience of last year be duplicated in the United States this year, this would become inevitable on a wide scale.
In Canada, on the other hand, our experience obviously indicated that a plan of this sort would be impracticable. Accordingly, it was decided to combine a standard allotment of ten pounds of canning sugar per consumer, to be available through special coupons in ration books, with a provision for supplementary quantities of sugar obtainable through the sugar alternative of the preserves coupon. This plan has the important advantage of providing the flexibility which is so desirable as between individual households, and of establishing an extremely equitable basis of distribution in that those households whose practice it is to do more home canning, and to purchase less in the way of commercially packed preserves, are able to do so by converting preserves coupons into sugar.
It is fully expected, in light of past experience, that this plan of dealing with the extremely difficult problem of canning sugar will prove to be satisfactory. Accordingly, and in view of the fact that there is no discrimination between Canadian consumers on one hand and American consumers on the other in the total amount of sugar being made available to them, there is no intention of amending the canning sugar distribution plans already announced.


RECONSTRUCTION
[Stage Direction]
The house resumed from Tuesday, June 20, consideration of the motion of Mr. Mackenzie King for the second reading of Bill No. 82, to establish a Department of Reconstruction.
Mr. BROOKE CLAXTON (St. Lawrence-St. George) :: Mr. Speaker, at this time our thoughts are overseas with the Canadian forces

Department of Reconstruction
who are fighting in a way that is worthy of their country and their cause. We look forward to the day when they will return, and we recognize that the very best welcome we can give them when they do return is that every one of them shall have employment in a job that will use his capacities to the full. The purpose of the department which this bill is to set up is to assist in creating opportunities for such employment, as well as to assist in coordinating the whole work of reconstruction.
I would have thought that such a bill introduced at this time might have received not only the support of all members but their support in speeches which did not raise political considerations. But on Tuesday night, when the debate began, there were one or two remarks made to which I think I should refer.
I refer particularly to remarks made by the leader of the Cooperative Commonwealth Federation in his speech in the house on Tuesday night. Towards the end of that speech he spoke as though he and his party wanted to see one single plan of reconstruction for the whole country. He spoke as though reconstruction was a tangible problem dealing with something concrete that could be dealt with in a single plan. He said at the end of his speech:
X was thinking of a plan for the whole country. A plan for all Canada would he more fitting than that.
Vv'e undoubtedly need plans for reconstruction, but no single plan will meet the needs of the Canadian people, of the Canadian provinces, of the Canadian municipalities, of Canadian industry, of Canadian agriculture, and of the government of the country as a whole. What we need is a complex of plans which will meet those needs. And we need more than that, We need an attitude towards the whole problem of reconstruction. We are not going to solve the problem by setting down a hard-and-fast blueprint, because we do not know what the conditions will be that we shall have to meet. We do not know when the war will end. We do not know how long the war against Japan will last, and naturally until we know those things we cannot set down the hard-and-fast lines of a plan. The whole problem is so complex and complicated that what is needed is a very flexible and resilient arrangement of devices, ideas and plans which will be ready to deal with the whole problem or with any part of the problem as it presents itself.
On that account we must regard the problem as complicated and difficult, and we are not going to meet it by saying that it is easy. We can provide full employment for all the people
of Canada and provide a maximum of income, but not by wishful thinking. It is not going to be met in that way. It can be met, but it is not going to be met by doing nothing about it, and it is the purpose of this department to coordinate the activities that must be carried on to do what is necessary when it is necessary to meet the problem.
Equally we cannot meet this problem by crying blue ruin and disaster, or by saying that after the war we are not going to have full employment, or that we are not going to be able to do this and that; and that, Mr. Speaker, is the attitude taken to a very considerable degree by the gentlemen opposite in the southwest comer.


John Horne Blackmore: Whom do you mean?


Brooke Claxton: Most of the members of the Social Credit party and the members of the C.C.F.


John Horne Blackmore: That is entirely false. The hon. member has no right to make a remark of that kind at all, Mr. Speaker.


Brooke Claxton: I can refer the hon. member to his own questions put in the course of debate at pages 3987, 3996 and 4015 of Hansard, which show just that attitude. As for the C.C.F., I had proposed to make a very brief reference to a speech made in the course of the Saskatchewan campaign by the leader of the C.C.F. party in that province, now the Premier of Saskatchewan.


John Horne Blackmore: I challenge the hon. member to support his statement with respect to the Social Credit party.


Brooke Claxton: I have given the references.


John Horne Blackmore: I ask the minister to read the questions to show that he has the right to draw the conclusions he has drawn. I challenge him to do it.


Brooke Claxton: The hon. member can read them as well as I.


John Horne Blackmore: The hon. member has made a statement, and I challenge him to support it by reading what I said.


Brooke Claxton: The passage I wish to read from the speech of Mr. Douglas in a radio talk given in Regina is the following:
Liberal speakers are telling you how much better off you are. How many boys' lives has it cost to get $1.20 a bushel for wheat? My friends, it is not your economic position to-day that should determine your actions. Remember what you have come through before the war and what you will be called upon to go through after the war. I do not agree with those who claim that the farmer and worker are well off to-day-if I had time I could show- you that the real beneficiaries of this war-time prosperity
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are the meat packers, heavy industry and financial institutions. The only difference the war has made is that the farmer can sell his produce and the worker can get a job. Every thinking person knows that -under our system of free enterprise unemployment and low prices will follow the end of the war as night follows day.


Mr. COLDWELL:: What is wrong with that? Was not that our previous experience?


Mr. REID:: The prophecy might be wrong. That is what is wrong with it. Have you no hope?


Major James William Coldwell: That is what happened after the last war when the Liberals were in power.


Thomas Reid: That is the guff you have been giving the public.


Thomas Vien: Order. I hope hon. mem bers will realize that we are in the House of Commons.


Thomas Reid: Some of them don't.


Mr. MARTIN:: Some of them from Saskatchewan don't.


Major James William Coldwell: If you want to re-fight the Saskatchewan election, all right,


Mr. GARDINER:: We will re-fight it four years from now.


Thomas Vien: I must ask hon. members to bear in mind that the hon. member who is addressing the house is entitled to speak without interruption.


Brooke Claxton: Mr. Speaker, I can
answer the leader of the C.C.F. In putting forward the case for his party, in Saskatchewan and elsewhere, he and .his supporters do not look at the situation of Canada as it is to-day, in 1944; that would not suit their book; that is too good. They look back to 1932-


Major James William Coldwell: Why not?


Brooke Claxton: -and they do so because they were not in power in 1932; therefore, they argue, they should be in power in 1945 or some other time; whereas I suggest to my hon. friend that it would be just as logical to contend that because the Liberal party were not in power in 1932 they should be in power for ever and a day. The plain fact is that references to 1932 have about as much relation to the situation in 1944 and the future as references would have to a period before the last war.


Major James William Coldwell: What about 1938 and
1939?


Brooke Claxton: There was a very great
change between 1938 and 1939 and 1932, as my hon. friend knows.


Mr. COLDW ELL:: A million people were
on relief.


Brooke Claxton: I would like to contrast this statement made by Mr. Douglas in the Regina election with the statement made a year before to the Trades and Labour Congress of Canada at Quebec city by the Minister of Finance (Mr. Ilsley) on the first of September, 1943. In that statement the Minister of Finance said this:
We have learned very much and developed a long way in Canada during the past four years of war. We have completed to a large degree our transition to an industrial nation. Our manufacturing capacity has been increased ri^ Pe*'laPs 50 per cent in these few years. Hundreds of thousands of Canadians have acqmi ed new skills and learned to manage modern machinery. Our workers have demonstrated that they can produce-quickly and efficiently-many types of .products which formerly we thought we had to get from Britain or the States. We have succeded in more than doubling our industrial production. We have discovered far greater reserves of productive capacity and ability than I believe any of us realized before the war.


Major James William Coldwell: Did we not have enough capacity in 1933 and 1934?


Brooke Claxton: My hon. friend, as I
said, is living in the past. He refers continuously to the depression of 1932, 1933 and 1934.


Major James William Coldwell: And 1939.


Brooke Claxton: That is the attitude of
the party to which I referred. The people and the government of Canada had about as much to do with the depression as the man in the moon. That depression was created by a world depression.


Mr. SENN:: Hear, hear. That is a new
story.


Thomas Reid: No country did any better.


Thomas Vien: Order.


Brooke Claxton: The Minister of Finance went on:
During the war, our economic controls and our financial and productive efforts have had to be directed to the destruction of the enemy We have had to restrict our general standard ot living, while protecting that of those near the minimum, in order that we could attain the highest possible standard of fighting. When the war is over, however, we must and will I believe, turn our economic management, our newly found productive power, and our financial

Department of Reconstruction
capacity to the improvement of the Canadian standard of living. It is then that we shall reap the fruits of the peace we .have secured and of the experience we have gained.


John Horne Blackmore: How? Not a word about how it is to be done.


Mr. NOSEWORTHY:: The same promises were made in 1939.


Thomas Vien: Order.
Mr. McDonald (Pontiac): The school teachers are showing a good example!


Thomas Vien: I must again call attention to the fact that this is not a private debate between hon. members of various parties. The horn, member for St. Lawrence-St. George (Mr. Claxton) has the floor, and he is entitled to speak without interruption unless he is willing that questions should be put to him.
I must ask hon. members on all sides of the house to observe that rule.


Brooke Claxton: I believe that I have
never interrupted anyone in the house, but I have always been willing to answer questions.
With regard to the question of the hon. member for Lethbridge, he has put that question three times in this debate; it has been answered three times; he has put it constantly to the house, and I do not think I should take up my time now in answering it any further. But I hope that my speech as it goes along will be an answer which he can accept, if he wishes.
The Minister of Finance in the speech which I have cited, referred to the objects at which we should aim and the paths we should take. I wish I had time to read extensively from this speech; it is magnificent. He ended with these words:
What I wish to emphasize to_ you to-day however is not the detailed direction in which we must advance, but rather that we must advance with the same vigour and energy after the war that we are now using in the war itself. We must pursue better housing with the same effort and effectiveness that we are devoting now to price control. We must conceive and carry out social insurance with the same boldness and thoroughness with which we have raised the income tax for war purposes. We must have the same courage and faith in financing useful peace-time development as we have had to apply in financing the war. We must retain the confidence that we have gained in the war, and shake off for ever the frustration which fell upon us in the 1930's.
I ask hon. members to contrast those two statements-the statement of Mr. Douglas, in which he said how many boys' lives it cost to get SI .20 a bushel for wheat, and referred to the certainty of unemployment under the present system, and the statement of the
Minister of Finance, in which he lays down aims and purposes and points the way that will be taken to achieve those aims. He, probably more than any man in Canada outside the Prime Minister himself, is by his service to the country demonstrating his capacity to carry out what he says he will do.
We are not going back after this war to 1939 or to 1932. We are not going back to any previous period. We are going forward on the basis of where we are at the end of the war, on the basis of 1944, 1945, 1946- whenever the war ends. I should like to call to the attention of hon. members that that starting point which we will have at the end of the war is a very different place and will find us in a very different situation from where we were even at the beginning of the war, and still less in 1932. The war has had an enormous effect on our productive capacity and on our skills. A country which can produce over 500 naval vessels and 200 ten thousand-ton boats, or 80,000 units of artillery and 10,000 planes, is a nation of considerable industrial capacity.
The London Economist, the leading British business paper, wrote:
Canada will emerge from the war one of the great industrial nations. She will be able to produce fifty per cent more iron and steel, five times as much aluminum, quantities of magnesium, tungsten, mercury and chromium. Her hydro-electric power capacity wrill be twenty per cent higher. She will have great shipyards, aeroplane factories, explosive and chemical plants, a synthetic rubber plant, armament factories, machine tool industries, instrument laboratories which were not here before the war. About one billion dollars has been spent in four years in additions to plant and equipment. There is a new industrial army of skilled men and women workers. A new tradition and a rich experience have been acquired.
What does this mean to people who are going to want jobs after the war? It means that provided we use these new capacities and these new skills we can produce jobs for everyone, jobs at wages that have never been known before.
Our position has improved in many other directions. Take wages, already the average weekly pay cheque of people engaged in manufacturing has gone up by almost fifty per cent. The national income has been doubled; about ninety per cent of the people of Canada are better off than *ver before; the external debt has been reduced; dividends have been reduced; salaries have been reduced, but wages income and security have gone up. The same thing is true of the position of the farmers. Despite a twenty-four per cent decrease in the number of people on the farms,
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the farmers of Canada are producing more than twice what they are doing before and they are getting twice as much as they got in 1939 for their produce. Agricultural production has doubled. The real purchasing power of the great majority of families in Canada is much higher than it has ever been, and to-day there are half a million more bank accounts than there were in 1939. Over seven million life insurance policies are in force, and three million Canadians bought war bonds in the last loan. The savings of individual men and women have increased by nearly four billions since the war.


An hon. MEMBER:: That is war time.


Brooke Claxton: Yes. But we are not going
to go back to the pre-war condition and stop everything just because my hon. friend says we are going to.
Now we can compare this situation with what it was in the last war. In the last war a few rich people became richer and poor people became poorer. That the exact contrary is true now is owing to the policies of the government and the support of the people of Canada during this war. In addition, there have been immense social gains in Canada owing to the way the war has been run. There has been a much better and fairer distribution of the national income, and there has been, in addition, unemployment insurance. To-day we heard read the notice to introduce a resolution to provide for family allowances on a scale not known in any other country in tihe world. That is part of the programme, and it is not a programme that will be put off until some far distant date. It is being carried out now while the war is on. My hon. friends can talk about the post-war period, but we are going to do in the way of social reform in Canada during the war the things that hon. gentlemen opposite talk about as part of their programme for the post-war period. We are going to begin the period of reconstruction very much better off not only than Canada has ever been before but probably better off than any other country in the world. We shall have greater natural resources. The record of achievement in the war, by our soldiers, workmen, industrialists, and farmers, is one that will make us proud to carry on after the war in the same splendid fashion as during hostilities.
The war has brought a change in the Canadian spirit, and that is something that we should recognize. No longer shall we be willing to face anything like the 1930's. We will not stand it, and there is no reason why we should. My friends opposite have fMr. Claxton.]
not a prerogative of that kind of talk, because nobody is going to stand it, and nobody is going to have, to stand it. It is not going to happen.
In this kind of discussion, very frequently, there creep in comparisons with the situation in other countries. As I said the other day in this house, it is unwise to make such comparisons unless for the purpose of emulation; but when these comparisons are made in a discussion of this kind invariably the person making the comparison picks out one single thing in respect of which some other country is better off and Canada has to match the best in the world. Well, usually Canada can match the best in all the world. But when we come to New Zealand particularly, a country for which I have the highest regard and where I have a great number of friends, I would suggest to my friends opposite that when they make comparisons they be fair and compare not only the scheme of social insurance, which is excellent in that country and which leads the world-there is no doubt about that-but also the standard of living, the standard of wages, national income, the burden of debt per . capita and the rate of interest that is payable on the debt of New Zealand. They should also compare the climates, soils and geographical situations of the two countries. If we are going to make comparisons, let us make a fair comparison and see where we stand and where they stand.
We cannot match every country with regard to everything, but we can say that there are few countries in the world which have so much of what is best as Canada has; and I ask my hon. friends, when they discuss the post-war situation here in comparison with other countries, to ask themselves frankly and honestly what country can offer more, where in the world can a young man such as any of our boys who are returning from overseas find better prospects for the future than in Canada?
We are going forward on the basis of where we shall be at the end of the war and not on the basis of where we were in 1932, and to do that we shall require a set of arrangements similar to, though not the same as, those that are necessary to conduct the war. The same kind of foresight, the same kind of cooperation, the same kind of coordination as are necessary in the conduct of the war will be needed for the mobilization of the resources of Canada, human and material, in the post-war period.
The problem of reconstruction has been usually considered under three heads. First is the rehabilitation and demobilization of the armed forces. On that, Canada's record is said by impartial observers to be the best in the world. We are said to have the most complete and comprehensive programme of

Department of Reconstruction
any in the world, a programme already working, not one to be carried out in the future, and that will improve steadily as discoveries and suggestions are made to that end.
But as I said in the opening of my remarks, the soldier's best welcome home is a job, and so the biggest part of our work in preparing for the post-war period must be to provide for industrial reconversion, and the provision of means of gainful employment for all our people who are willing and able to work.
This is going to be the greatest of all combined operations, and the new department will have the job of examining all plans and reports that have been made in order to provide maximum production, maximum employment, maximum income and maximum security. The department will look over all projects for public works and housing and fit them into a programme which can be put into action where it is necessary. It will involve close cooperation with industry, labour and the primary producers. It will involve the development of new industries, the extension of improvements gained during the war, the application of research, and the encouragement of initiative. The work already done in this field has been described by the Prime Minister. I have had an opportunity of examining it personally, and I can testify to the amount and the quality of the work of planning that has been done by the various interdepartmental committees that have been looking into this subject. ' That work will find its ultimate expression in government policy.
First comes the conversion of industry itself. Whether that industry be conducted by private enterprise or be publicly owned, the problems will be very much the same, and this question is receiving continuous consideration to-day under various heads, some of which I might mention.
Aids to production and cost reduction; tax and tariff reforms; expanded research; promotion of improved production and distribution methods; cheap credit, under which would come the Industrial Development bank, the National Housing Act, the agricultural credit bank, the central mortgage bank, amendments to the Bank Act, and the policies of the Bank of Canada; checks on inflation-because it is just as important in this post-war period that we do not let prices run away with us as it is to-day, and it may be more difficult then, so that we must consider what kind of controls will be needed to check inflation and distribute commodities in scarce supply. I should think the policy of this party, as opposed to that of some of the other parties, is to have the minimum amount of control necessary to do the job. Then there are improvements in
labour efficiency; expanded employment service; increased vocational and technical training facilities; effective grievance, arbitration and conciliation machinery, and the development and extension into the peace-time period of labour-management committees.
Then we come to the second main class of subjects receiving continuous consideration at the present time: the promotion and stabilization of markets. Under this come expanded foreign trade promotion services, which include reorganized trade commission service, machinery for greater coordination of departments and outside interests concerned with foreign trade; export credits-an export credit bill has been announced in the speech from the throne-and other similar subjects. To increase domestic consumption, which is part of the problem, we have the guaranteed floor prices announced in the speech from the throne; monetary policy; subsidies of various kinds as, for example, the subsidies to provide for guaranteed floor prices.
As part of the programme to increase consuming power and expand markets for Canadian goods, we have the social security programme, including the measure of which notice was given to-day, the family allowance legislation. This is a great step forward in the equalization and fair distribution of income, and at the same time a great humanitarian measure to provide a basic minimum for the family with children. It is one of the greatest and most daring financial and economic measures ever put forward in a democracy to increase the consuming and purchasing power of the whole community.
There is another class of subjects, Mr. Speaker, which must be considered and which is receiving continuous consideration; that is, the avoidance of obstacles to business. This means the removal of discriminatory and discouraging taxation, of the fear of direct governmental competition in various fields and, of course, measures to eliminate the domination of markets by cartels and monopolies.
All these matters are receiving consideration in various levels of the government departments to-day. The policies have been announced in the speech from the throne, and they will be amplified in good time, and in sufficient time.
From the field of industry, whether conducted privately or by public corporations, we come to the field of public improvements. This field usually holds first place in the minds of the people, and various parliamentary committees have given the matter a great
Department oj Reconstruction

deal of consideration. On Tuesday of this week the hon. member for Davenport (Mr. MacNicol) made a very interesting and constructive speech on this subject. This field may, if everything works out for the best, prove to be the least important in the long run, because if the economic and financial policies of the government are effective, and if we have a reasonable amount of international trade after the war, we will find that the programme of public improvements will not need to be nearly as extensive as some people now feel or fear. However, public improvements will be needed, and plans are being prepared. I can assure hon. members that hundreds of plans are now ready or in process of preparation, and the provinces and municipalities are similarly at work. What is required is that the work be coordinated, and then that questions of priority be settled.
All this great complex of questions involved in restoring our economy from a war-time to a peace-time basis can be carried out only with the united cooperation and good will of the Canadian people. It can also be carried out only by the cooperation of the dominion and the provinces, and for that purpose the dominion government has called a conference with the provinces, to be held just as soon as the convenience of all can be met. The purpose of that conference, and the attitude of the dominion at the conference, will be just this: that the ten governments concerned will sit down around a table to see what the postwar needs of the Canadian people are, how those needs can be met, and who can best do each part of the job.


Mr. JAQUES:: The blind leading the blind.


Brooke Claxton: Well, the work already achieved in this field, as indicated in the Prime Minister's speech, would hardly indicate any great degree of blindness. I should think the reputation Canada has won for herself in the other countries of the world in the fields of economic and financial policy during the war, and the record of the Canadian people, would indicate that our policies will stand comparison with those of any other country in the world, and that they have led most other countries.
This conference between the dominion and the provinces will be of the utmost importance to the future of the people of Canada. I think it must be evident from the attitude taken so far by the dominion and the members of the government that the conference will not be entered into with any thought of endeavouring merely to secure the transfer of constitutional and financial power by one side or the other. The conference aims to see
fMr. Claxton.]
what is best for the people of Canada, how their needs can be met and who can best meet them; and if, as I expect, the provinces meet the dominion in that spirit, we can look forward to a satisfactory arrangement to deal with all these questions.
We cannot anticipate everything that lies ahead, but we can do a great deal. I can assure hon. members and the country at large that from what I have seen of the work of the economic advisory committee, of the various inter-departmental committees, and of the committee in preparation for the dominion-provincial conference, these questions, which are of the utmost concern to all members, to all people in Canada and to our boys and girls in the armed forces, are receiving consideration every day of the week by about as able a group of servants any people or any government in the world can boast.
We can help them. Various parliamentary committees have been of enormous help, as have also the voluntary associations, committees and agencies of different kinds which have forwarded briefs. There are literally hundreds of plans for post-war reconstruction and development available. It will be the task of the new minister to coordinate all those activities and to draw them together in what I have described as the greatest combined operation-next to the war-in the history of the people of Canada. I am confident we can meet the challenge in a way which will justify the opportunities given to us by our being privileged to live in this great and glorious country.


Mr. A. J. BROOKS (Royal):: Mr. Speaker, I followed with much interest the speech of the hon. member who has just taken his seat. I shall not discuss any of his arguments, but I was amused when at the outset of his speech he appeared to banter across the floor with members of the Cooperative Commonwealth Federation party. It has occurred to me that there might be considerable jealousy between the government and the C.C.F. We have always been told that the C.C.F. was the party of the left, and that they were travelling on the left side of the road. If we follow the legislation offered by the present government for some time past it seems to me the public might be justified in concluding that the government is jockeying with the C.C.F. for this particular position.
An hon. member who spoke a few days ago said that the Liberal party was following the middle of the road. As all hon. members know, that is a dangerous position. However, they may have been on the right side of the road at one time and crossed over to the middle. At the moment however they are

Department of Reconstruction
now crowding the ditch on the left side of the road, and if we can believe indications I am satisfied they will soon be in the ditch.
It is not my intention to analyse the bill at length. Opportunity will be afforded in committee, when the bill is considered section by section; so that I shall content myself with making a few remarks in respect of its general application.
I am sure all hon. members approve the government's action in setting up a Department of Reconstruction. It is a necessity; and any government in power at the present time would have had to follow a similar procedure. Not only is it a necessity in Canada, but in this war-tom world I am satisfied every country will have to set up departments of reconstruction, or take other steps to build up their worn-out industries.
A few days ago the Prime Minister (Mr Mackenzie King) said that he had no idea how long the war in Europe would last. He also said that when the war was over it would be necessary for us to operate against Japan. I believe that all hon. members will agree heartily with those statements. He pointed out, however, that reconstruction, because of its tremendous implications, could not be left until the close of the war. We know as a matter of fact that many men have already been demobilized in Canada. Those men must be rehabilitated in civil life, and we must also make our plans so that we can look after the men who are coming home, look after those who are engaged in the manufacture of munitions, and in general look after the problems of the country in years to come.
Some speakers have pointed out that the responsibility rests with all governing bodies, and with that statement I agree. Our federal government, our municipal governments, even governments of towns and villages, including all the individuals of which they are composed, are interested in matters of reconstruction, and all must bear their share of the responsibility.
As the last speaker (Mr. Claxton) said, we are fortunate in Canada in having great natural resources. No party, of course, can claim credit for those resources; they are our great, God-given heritage. But it is up to our government and to us as individuals to see that those resources are used to the very best advantage. We have great agricultural lands, extending from one end of Canada to the other, and capable of yielding abundant crops of all kinds. We have great mineral deposits in the far north capable of producing untold wealth. Our waters teem with fish, and we have more than three-quarters of a million square miles of productive forest lands. In
addition to these we have harnessed much of our water-power for the production of electrical energy, and there is great potential capacity still unharnessed. Nature has indeed been more than kind to us, and if, as other hon. members have said, any country can formulate policies for reconstruction and the employment of its people, certainly that country should be Canada.
But it is not enough to possess these great resources. We shall benefit from them only as we learn to develop them directing what is necessary of the finished products to our own use, and trading the surplus in other parts of the world.
When he spoke the other day the Prime
Minister said:
We shall do well, I believe, -to bear in mind that prosperity is indivisible. It is not something which one nation can have and enjoy by itself; it is something that has to be shared. We shall have to come to see that we are members one of another and that no nation liveth unto itself.
That is a statement with which all can agree; there can be no prosperity in the world unless every nation is prosperous. I believe one hon. member has said that in point of air travel we are within sixty hours of any other spot on the face of the earth. No doubt that time will be still further contracted as the aeroplane becomes faster and faster, and as time goes on. As no nation can be prosperous unless all other nations are prosperous, so in Canada no part can be prosperous unless every other section prospers. We can go farther and say that no industry can be prosperous unless other industries prosper, and that no city or town can prosper unless the people throughout the country and in the farming districts also prosper.
I believe I may be pardoned if in my brief observations this afternoon I refer to some of the problems facing the people in the maritime provinces. I would ask hon. members to consider some of our primary industries, and how a process of reconstruction may be applied to them. Let us first consider the fishing industry. Some of us live by the sea, and many of our people are engaged in that great industry, one which is widely diversified. In the maritime provinces we have over 2,000 miles of coast line, and there are many thousands of square miles in which fishing operations are conducted. Over thirty thousand fishermen are employed in the industry. They, with their families, constitute about one-sixth of the population in the maritime provinces.
We have many varieties of edible fish. I think it can be truthfully said that the finest fish anywhere in the world are caught in the waters in and around the three maritime
Department oj Reconstruction

provinces. About seventy-nine per cent in value of the catch in those provinces is taken not by the offshore fishermen, as they are called, but by the inshore fishermen. That means they are caught by the individual fisherman, and it becomes the livelihood of the small man, or the man who goes out in his own boat and does his own fishing and does not depend upon trawlers or some other larger means of catching fish.
From 1923 to 1939 the fishing industry in those provinces was in a very poor condition. It was in a state of depression. The average earnings of a fisherman were estimated at that time to be $244 per year, not including operating expenses. The situation became so bad that, as hon. members will remember, one of the great daily papers of the maritime provinces, the Halifax Herald, decided to make an investigation. They sent one of the members of the press gallery here, Mrs. Tufts, to investigate the situation. I think that all hon. members are familiar with the excellent report that was made by Mrs. Tufts. In 1932 the price of fish to the fishermen was one cent per pound. I do not think any more need be said to call the attention of the house to the deplorable conditions affecting any group of men who would have to accept a price like that. In 1939 it had risen to one and three-quarter cents a pound.
The hon. member for Charlotte (Mr. Hill) said on Tuesday last that a floor had been put under the price of fish. That is true, but it was done by the price control board as a war measure. What I wish to emphasize to the house is that after the war in the reconstruction period a floor price must also be put under the price of fish if the fishing industry is to be maintained in those small provinces.
A number of other things were recommended by the fishermen of the maritime provinces in the brief which was submitted to the reconstruction committee. I wish to support in every way possible these recommendations. One of them was that freezing plants and cold storage plants be located at strategic points along the coasts of the different provinces. If that were done it would be of great benefit -and I might point out that it could well become a public utility. The fishermen have suffered in the past because of a lack of many facilities for catching, freezing and marketing of their fish. There is no reason why, in the days of reconstruction, this great body of our inhabitants should not receive the consideration which has been withheld from them so long.
There is also the matter of transportation. I am not going to deal with these points particularly, but I should like to bring them to

the attention of the house. These fish are perishable, as everyone knows, and facilities for transporting them must be provided so that they may get to the different markets in good condition. I do not know whether it is feasible or not, but it seems to me that aeroplanes could be utilized for that purpose. We read of thousands of men being transported to France in great air liners. It is possible in fhe days to come that the fishing industry can be greatly helped by exporting fish from the maritime provinces by aeroplane to the different markets in Canada. It may also be possible to do it by glider plane, in order that the people of the central provinces and other parts of Canada may have the benefit of the fresh fish of the maritimes.
One of the other great resources of our country is our forests. More than ninety per cent of the forest areas are owned by the crown. By that I do not mean to say they are owned by the Dominion of Canada, but they are owned in the right of the provinces and the dominion. This great asset has been greatly neglected in the past. When I came back from overseas after the last war someone pointed out to me the terrible waste in the forests of our land. I also had the opportunity, as did most men who were overseas, of visiting the forests of England and France, and of making a comparison between the care given them in Europe and in Canada. The lack of care that we have given them in Canada is something that would, I am sure, appal hon. gentlemen. I have walked through the forests in England and in France. You would not find in those forests a small piece of wood the size of your finger. Everything is conserved and gathered up. Underbrush is cleared away. The forests are protected in every way. In this country we have been most neglectful. It is still true that for every hundred thousand feet of timber cut an additional forty thousand feet is lost through fire. Insects and disease destroy another large portion. There has been and still is waste everywhere in the forests of this country. In the past-this has been debated before in this house, but since it is so important I see no harm in again calling attention to it-the dominion parliament has not taken a vital interest in the matter. It has not realized the great asset we have in the forests of the country. I contend that in the reconstruction period no finer work could be done by the reconstruction department now being set up than the conservation, protection and care of the great forests of Canada.
In my own province we depend largely on the forests. Over eighty per cent of the twenty-eight thousand square miles of New

Department of Reconstruction
Brunswick is still unsettled. It is made up of forest and woodlands to a great extent: For the year 1943 the estimated value of the forest products of New Brunswick totalled $56,000,000. This figure included the value of 300,000,000 board feet of sawn lumber; 823,000 cords of pulpwood used in the six pulp and paper mills in the province; 464,000 cords sold outside, and nearly a million cords of firewood-a product of great importance in the present national fuel emergency. Therefore everyone can see what a valuable asset the forests are not only to Canada, but to the small provinces, and to New Brunswick in particular.
I have read the report of the subcommittee on agricultural policy. I do not intend this afternoon to make any extended remarks -with regard to it, but I agree in large measure with all the recommendations that have been made. I suggest that when the department is set up the recommendations of the committee on agricultural policy be implemented.
In New Brunswick we are interested not *only in fishing and forestry as primary industries. Agriculture is a great industry. Any one who has visited New Brunswick and has gone down the Saint John river must have realized that it is one of the finest farming districts of Canada. He would also find the same splendid farms up the Kennebecasis river, over through the Annapolis valley, and in other parts of Nova Scotia and in practically all of Prince Edward Island. Close .attention must be paid by the reconstruction *committee to the position of the farmers in the three maritime provinces. To-day our farms can produce. During the war we have produced, with a limited number of men to work on the farms, far more agricultural products than we did in pre-war days. To give hon. gentlemen an idea of our production, in 1942 and 1943 we had the largest crops in the history of the province; and they were produced, I would point out, with many thousands of our young men overseas, with worn-out machinery, and with the people at home having to work very long hours. Our production of butter was 7,000,000 pounds in 1942, an increase of forty per cent; and I am very proud to say that in my home town *of Sussex there is a butter factory which produced more butter in one month in 1943 -than any other butter factory in the whole Dominion of Canada. But we have our handicaps and they constitute one of the problems which must be considered by the reconstruction committee.
One of the handicaps of the farmers of the maritime provinces has been high freight
rates, and another the lack of markets. The question of freight rates has been discussed in this house on a good many occasions, and it would not be fair for me to take up time in dealing with it now. But it is a question that should engage the attention of the reconstruction committee, because high freight rates have a detrimental effect upon the provinces down by the sea. The cost of feed, for instance in New Brunswick is much higher than it is in Ontario, Quebec and the western provinces, with the result that the farmers of the maritimes who wish to raise hogs start under a severe handicap and it is impossible for them to compete in the bacon market in England with farmers from other parts. The same thing applies to fertilizer, which all farmers now use. We in the maritime provinces pay about one dollar per ton more for certain types of fertilizer than do the farmers in Quebec and other provinces. These are conditions, Mr. Speaker, which I contend must be corrected if we are to have the people in all parts of this dominion treated in the same manner, as I feel it is only just and right they should be treated.
Speaking of transportation, I do not think it is out of the way to bring to the attention of the house a transportation project which is not new so far as New Brunswick and Nova Scotia are concerned, and not new so far as the federal government is concerned. I refer to the Chignecto canal. The construction of a canal between New Brunswick and Nova Scotia was first thought of nearly three hundred years ago, when the French government was in control of Acadia, as it was then called; the French governor in 1686 recommended it to the French government as an undertaking which should be carried out at that time. He said that the Northumberland strait should be connected up with the bay of Fundy. .Representations have been repeatedly made over a long period of years to the federal government that this canal should be constructed, because, it was pointed out, it would be of great benefit to the people in that part of the dominion. But in spite of the fact that, not millions, but hundreds of millions of dollars have been spent on the building of canals in other parts of this dominion, we have never been able to get what I believe to be this very necessary Chignecto canal, which -would be a tremendous asset to us in that part of the country.
To show some of the advantages there would be in constructing this canal, I point out that the distance between Charlottetown and Saint John over the route that we have to travel at the present time is 488 miles; if the Chignecto canal were cut, the distance would be 144
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miles. From Dalhousie to Saint John is now 720 miles; via the Chignecto canal it would 360 miles. From Pictou to Saint John is now 4S0 miles; via the Chignecto canal it would be 170 miles. From Montreal to Saint John is now 1.379 miles; via the Chignecto canal it would be 1,104 miles. From Montreal to Windsor, Nova Scotia, is now 1,250 miles; via the Chignecto canal it would be 820 miles. From Montreal to Hillsborough, New Brunswick, is now 1,235 miles; via the Chignecto canal it would be 760 miles. The saving in mileage and in the cost of transportation between the centres of upper Canada and the maritimes would be very great. The construction of this canal would be of benefit not only to our primary producers in the maritime provinces but also in reducing the cost of goods that we have to purchase from other parts of Canada. Besides, in these times when we are speaking of public works that must be carried on in order to provide employment when our men come back from overseas, I would point out that no public work could be carried on which would be of more benefit to the people of the maritime provinces and give better employment to the returned men than this construction. It would help all the industries of the maritime provinces. It would help our fishing industry; it would help our farmers and our manufacturers, and be of benefit to the people generally.
There is not much that I can say, Mr. Speaker, about the industries of the maritime provinces, because we have so very few of them. We have suffered much from a lack of industries in the past.


Gordon Graydon: You should have more
industries.


Alfred Johnson Brooks: We have heard that for a long time. It is true that we should have more, and I believe that we will have more. Some seventy-five years ago we did have good industries in the maritime provinces, industries in nearly every city and town, but then the tendency towards centralization began and our industries were moved to Montreal, Toronto, Hamilton and other large centres in the central provinces. When I spoke in the house in the month of March last I pointed out what a detrimental effect this moving away of our industries has had on the economic position of Nova Scotia, New Brunswick and Prince Edward Island. It meant the draining away of our people in the maritime provinces. There are more people to-day in the New England states who are descendants of people in the maritime provinces than there are in our own province. Why? Because we have not large industries in the maritime provinces

to keep them there. And so, Mr. Speaker, when this new department is functioning I trust that it will consider well the decentralization of industry and take steps to provide more industries for the small provinces down by the sea.
We are told that one reason we have not more industries in the maritime provinces is that we have not electric power. That possibly has been true during this war. But no great effort has been made by the dominion government to provide electric power for the maritimes. The project is now being mooted- I am not an engineer and cannot speak as to its feasibility-of the development of the Petitcodiac river in Westmorland county in New Brunswick. From what I have heard I should think it is a practicable proposition. If the Petitcodiac river were developed it would mean the electrification of the farms of practically all Prince Edward Island. It would mean the electrification of farms and industry in the southern part of New Brunswick. It would mean electrification and the providing of power to industry in other sections of Nova Scotia. This, I contend, must commend itself very seriously to any government or department which is set up to deal with reconstruction.
Perhaps it has taken this great war to awaken Canadians to the responsibility which one section of the country has to another. We in the maritimes have entertained thousands of young men from all parts of Canada. Men from western Canada have been amazed at the beauty of our scenery, the fertility of our soil, and the great potentialities which our section of Canada possesses. I believe that with the information they have obtained, when the war is over our requirements will receive more sympathetic attention than they have had in the past. What is true of the men coming from the west is true also of the regiments who have gone from the east to western Canada; they are getting an idea of the problems which face western people. I believe that this increase and exchange of knowledge will have splendid results; it will lead to better understanding and a more united Canada.
I notice that section 6, which defines the powers of the minister, states:
The minister, to enable him to perform the duties imposed upon him by this act, may:
(c)	consult with representatives of primary producers, industry, science and labour upon any question connected with reconstruction.
That is all to the good. He also has the power to-
(d)	establish committees or boards and use existing organizations and agencies to assist him in carrying out the purposes of this act.

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I trust that on these committees and boards all sections of this country, all political parties and various forms of industry will be represented. The problem is so big that every section, every view, every opinion should be well canvassed and considered, so that no part of the country shall be left unrepresented and all parts shall receive the attention to which they are entitled.


Mr. A. G. SLAGHT (Parry Sound):: This is a bill which no hon. member can afford to oppose. It is an effort to set up now a department of reconstruction in order that when we pass from war to peace-which we all hope will be soon, and which, on the deliverance of the Prime Minister of Great Britain not long ago, we have good reason to hope may not be long deferred-the problems which may then arise will find us prepared.
Before I deal with two or three phases of the matter I wish to recall some of the statements made by the Prime Minister (Mr. Mackenzie King) in introducing this bill, two days ago. He pointed out that the new department will be primarily concerned with economic reconstruction, and with that observation I fully agree. The reform of our economic policy, in my view, stands at the threshold of all our future efforts for reconstruction. He also indicated that almost every department of government will have some special work to do. That also is very true. But you can forget the efforts of the other departments of government if you do not provide them, through the finance department, with the necessary means to carry out a policy of reconstruction.
The Prime Minister intimated that the new minister's duties will be carried out in cooperation with his colleagues of other government departments, and I suggest to the house that the first and second and third steps to seek cooperation in his plans will be from the finance department.
We have been told that an advisory committee on economic policy, under Mr. W. C. Clark, have been studying this problem since January 23, 1941; and the Prime Minister told us also:
There have been discussions on economic matters.
I quote him exactly, from Hansard, page 3986:
I cannot say how successful they may be.
He further told the house, as reported on page 3988:
I do not think my hon. friend need fear about the increase of the public debt or taxation to accomplish these things. ... I believe the
nation can go ahead with the great work of construction and reconstruction and at the same time reduce its taxation and reduce its debt.	.
That is bold and hopeful and optimistic language, and I desire to endorse that hopeful prediction of the future. I do not think I can give my viewpoint as to how it shall be done better than to quote his own language, as reported in Hansard in 1933, reiterated in 1934, when he said, with regard to the necessary economic policy of this country, as reported in Hansard of that year at page 4365:
Once a nation parts with the control of its currency and credit it matters not who makes the nation's laws. Usury, once in control, will wreck any nation. Until the control of the issue of currency and credit is restored to government and recognized as its most conspicuous and sacred responsibility, all talk of the sovereignty of .parliament and of democracy is idle and futile.
In 1933, the Prime Minister, as reported in Hansard of that year at page 2511, uttered this great policy, enunciated on behalf of the Liberal party who constitute the government of to-day:
The Liberal party belfeves that credit is a public matter, not of interest to .bankers only, -but of direct concern to the average citizen. It stands for the immediate establishment of a properly constituted national central bank to perform the functions of rediscount, and the control of currency issue, considered in terms of public need. A central bank is necessary to determine the supply of currency in relation to the domestic, social and industrial requirements of the Canadian people and also to deal with the problems of international commerce and exchange.
I desire to direct special attention to these words:
. . . a properly constituted national central bank to perform the functions of rediscount, and the control of currency issue, considered in terms of public need.
Note "in terms of .public need", not possible private gain.
I am compelled to believe that that splendid enunciation of policy has been carried out in part, but in part only. We have since then established a wholly owned national bank, the Bank of Canada. But I ask the members of this house whether we have taken steps to see that the control of currency, and the issue of currency, has been made on the credit of the nation in accordance with public need, or whether, on the contrary, it passed over into private hands, the hands of the chartered or private bankers of the country.
Let me make this suggestion, and I make my suggestions in a desire to be helpful to the Prime Minister and to the government and to lay before parliament what I believe to be the duty of this parliament at this session, here
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and now, and not to be left to the hands of a minister of reconstruction and his staff one or two years from now, no matter how eminent or industrious he may be. The minister under this bill has not a chance in the world to carry out the high purpose of the Prime Minister unless we in this parliament give him, at this session in this parliament and not at some time in the dim, distant future, the economic power to do so. I wish to make some suggestions which I regard as essential if this bill is truly to serve the Canadian people. The chart to be followed has been laid down in the language I have read to the house, but if we have put it into effect only in part, now is the time to round it out, to complete it at this session of parliament, in order that the relief we all desire the people to have may become an accomplished fact.
I have very strong views, Mr. Speaker, which I have not attempted to secrete, with regard to the subject of taxation and public borrowing, which the Prime Minister has placed before the house as one of the objectives to be accomplished by this new department. Let me say that our first consideration must never be lost sight of in this parliament. There must be no slackening in our war effort. There must be no legislation, no economic policy laid down which could in the slightest way prevent our country from seeing to it that our army and our allies have Canada at their back 100 per cent, to the fullest possible degree in the prosecution of this war, until unconditional surrender is forced upon our enemies. But having full regard to that, sir, we can and should look forward now, with quickening vision, because that is what this bill purports to do, to the reduction of taxation particularly as it affects the farmer, the lumberman, the settler, the fisherman, the industrial workers and those who through no fault of their own have the most difficulty in the struggle for existence. Let me give the house some details of the specific relief which I advocate putting into effect now, and which I have pressed upon the government, and desire in the most friendly way to continue to press upon the government and upon parliament, upon every member of this house.
It is time to sink some political differences and lend oursedtves to this grave and difficult problem of reconstruction. That is what this bill lays the foundation, or purports to lay the foundation, to do. I suggest to you, Mr. Speaker, and to my fellow members that this parliament should reduce at once the taxation on unmarried men and women in the lowest brackets by raising the exemption from $660 a year to $1,200 a year, so that no man or
[Mr. Slaghto
woman who earns less than $100 a month should pay any income tax at all. They will continue to pay the sales tax; they will continue to pay the amusement tax; they will continue to pay a multiplicity of other indirect taxes on everything they eat and buy and wear and attempt to put into their houses. That will mean a los of revenue, through personal income tax, of $32 million and no more, but it will bring relief to 300,000 Canadian men and women. Second, I suggest that it is the duty of parliament to increase the exemptions for married people from the present $1,200 a year to $1,800 a year, so that no married person shall be called upon to pay income tax at all unless they receive at least $150 a month. That will mean a relief, on the basis of last year's collections, to 650,000 people, and it will create a loss of revenue to the treasury of only $55 million.
The result of these two changes will be to free altogether from income tax 950,000 Canadians who are least able to pay, whose struggle to make ends meet is the most difficult, and most of whose taxes are taken from them, before they ever reach their pockets, by their employers under the rigid method now in vogue known as deduction at the source. The total loss in revenue by giving a breathing spell to 950,000 of our people is therefore only $87 million out of a total revenue, taxed and borrowed, of five and a half billion dollars to be spent this year by a country of eleven and a half million people.
It is my belief that in times of heavy taxation those best able to pay should be called upon before we hit those least able to pay, and through no fault of their own. I further contend that we should reduce the present rate of personal income tax on everybody's taxes by a reduction of twenty-five per cent, or one quarter of the present personal income tax. By so doing we would incur a further loss in revenue of $220 million, being one quarter of the present total taxes collected from personal income last year. I go farther and insist, so far as my voice can insist, that the excess profits tax, which is paralyzing the small business man and which is going far to strangle all business in Canada, should be reduced at once by twenty-five percent, and that in the first year after the war a further reduction of another twenty-five per cent at least should be made. That means a further loss in revenue of $137,500,000. Those versed in arithmetic who may have followed me will find that I have indicated a policy which will mean a total loss of revenue, from the four items I have described, of $434,500,000, and you, Mr. Speaker, may very properly ask, "How shall we make that up if we do give our

Department of Reconstruction
anything about money, but I do know that the municipalities in British Columbia cannot possibly take their proper share in the reconstruction programme unless they get assistance from the federal treasury.
Another thing in which I do not agree with the Prime Minister is that he has not much fear, as I understood him the other day, of the immediate six months following the peace. Personally I think that the first six months following the peace are going to present a very serious problem. Possibly I am looking at it from the soldier's point of view. I do not think you are going to be able to keep the men in the army after the war. The men will look after that themselves. The desire of every soldier will be to get home as quickly as he can and to get out of uniform, with the possible exception of the air force. These men are going to be thrown on to the labour market immediately after peace is declared. They will have a certain amount of deferred pay, which was an excellent idea on the part of the department, and a certain amount of savings. But I hope that every young soldier coming back from the war will not make the same mistake that I made and that the Prime Minister and the Minister of Pensions and National Health (Mr. Mackenzie) made. I waited twenty years after the war before I got married. I hope these young soldiers will get married immediately, but I do not know how far their savings will carry them if they get married unless we have concrete plans ready for their employment when they return. So far as I know, no concrete plans have been made by the government and no blue-prints prepared to put these men to work immediately after peace is declared. If peace were declared next week, the federal government, so far as I know, has no plans complete as yet to put these men and women immediately to work. We have had a wonderful reconstruction committee which has studied and submitted various plans.
I will tell you how we do it in British Columbia. The government of the day in British Columbia set up a committee, not of the government, but of the legislature, and that committee toured every little district in the province and got ideas from the Canadian Legion, from boards of trade, women's institutes, municipalities, and every other organization they could think of, as well as from individuals. I want to tell you that I am proud of the fact that I come from the province of British Columbia because within one week after peace is declared the British Columbia government can call for contracts for $10,000,000 worth of constructive work. That is a wonderful record. I want hon.
gentlemen to mark that. I do not know how it is in the other provinces, and I am not criticizing them. So far as I know the federal government has no plans ready with which they can proceed to put men to work immediately after peace is declared. They have suggested various ideas-public buildings, waterways, railway expansion, and so on. But I repeat that British Columbia, through its Department of Public Works and other departments, has blueprints already prepared and estimates already made so that within one week after peace is declared they can call for tenders of $10,000,090 of constructive work. I think that that is the attitude which the federal government should adopt. I may be wrong; the federal government may have its plans ready, but if they are ready, this house has never been told about any concrete plans.
There is another matter. But first I had better continue with the Prime Minister, because there are some other things on which I do not agree with him, and if you are going to disagree I think it is a good idea to disagree from the top down, starting with your leader. I am not going to speak in a sobbing voice and then stab him in the back unless I decide to move across the floor o<n the same day.
One thing in which I am particularly interested so far as the soldiers are concerned is farming. I should like to quote what was said by the chairman of the reconstruction committee, the man who I think is most intimately connected with the reconstruction programme next to the Prime Minister himself. We are very glad that he comes from British Columbia. He and his committee have done an excellent job, and I am sorry that the chairman is not here to-day. He happens to be in hospital, and I know that I speak for every member when I wish him a speedy recovery. I quote in part what he said with respect to food at page 3994 of Hansard of June 20 of this year:
In this respect we welcome the conclusion arising from the united nations food conference that never again-
I repeat that.
-that never again will food :be destroyed simply because people have not enough money to buy it.
That is from the chairman of the reconstruction committee. I point that out because I want to speak of it in connection with the Veterans' Land Act. Coming from the chairman of the committee it may be presumed that he was speaking for the government. What notice are we giving to the boys overseas with respect to this matter at the present time? Are we telling them that we in this parliament are not going to permit the

Department oj Reconstruction

destruction of food in this country? Hon. members will recall that the great president of the country to the south made [DOT] probably the only mistake he has ever made in his leadership when he allowed brood sows to be destroyed. Brazil also destroyed coffee. Here we state through the chairman of the reconstruction committee that never again will food be destroyed simply for lack of money. Actually what do we find in Canada to-day? We in parliament are not supreme. What is going on in Manitoba? I quote this from the Winnipeg Tribune:	"Growers plough under
Manitoba Strawberries." I quote this because the soldiers of Manitoba will scarcely think us sincere in our plans for reconstruction, particularly as regards agriculture, when they see that we permit a few bureaucrats to allow this sort of thing to go on. There is a picture in this same paper of strawberries being ploughed under by a tractor, and under the picture is this:
Goodbye, Strawberries: Strawberry growers near Winnipeg are ploughing under their strawberries, as Aleida Daman, 18, daughter of Peter Daman, St. Vital grower, is doing in this picture. The prices 'board set too low a ceiling for berries, they say, and growers see no sense in paying labour $4.50 a day to keep the bushes in shape.
That must be an extensive piece of ground to have a tractor ploughing under this food. This paper is going to the soldiers of Manitoba who are over there in Italy and on the shores of France. Yet at the same time we are telling them we shall never let the lack of money cause the destruction of food. It will take more explanation from the government than I have heard yet to convince the boys over there that that policy is being carried out when they see food being destroyed in this way.
The reason I refer to this matter particularly is that in British Columbia we have some 750 Japanese farms which were all producing berry farms before we seized them-no, we did not seize them; we were too generous; we bought them out. We are holding these farms for soldiers when they come back. What will our soldiers in Italy or on the shores of France think of our Veterans' Land Act when in British Columbia out of 171 farms 121 have been allowed to go to wrack and ruin, and the people on the remainder axe producing at a loss to-day simply because of the dictates of the almighty dollar, orthodox finance and the war prices board?
We estimate that we have over 300,000 acres of land now surveyed and available, and on which soil analyses have been taken. The provincial government are prepared to grant

a million acres of land to the men who are coming back. But all we are going to allow a man who wants to go on the land is $4,800 to buy a farm and $1,200 for the purchase of stock to equip that farm. I took the trouble to inquire of every organization in the riding which I represent, and they agree without exception that the figure is, to say the least, conservative. It will cost at least $175 an acre to purchase land; the average tax amounts to $4 an acre; yet we expect a man to settle on a farm, raise a family, clothe and educate them, with no more capital than $4,800 for his land and $1,200 for his stock and equipment. I know that many hon. members are not farmers, but there is no need to be a farmer to know that you cannot possibly buy enough stock and equipment for $1,200 to run a farm, repay the capital, pay taxes, feed and clothe a family. It simply cannot be done; yet that is what we are holding out to these returning soldiers under the Veterans' Land Act. Go to any soldier organization that I know of, and the first thing you will find them discussing is this particular bill, which they regard as almost entirely unsatisfactory and inappropriate to the needs of the present day and age. Yet we send literature to the soldiers telling them how muah we are going to do for them.
I disagree with an hon. member from one of the Montreal ridings who expressed the opinion yesterday that there is not much hope of placing many of our returning veterans on the land. Land has always been and always will be a safeguard in our economy. I believe there is a tremendous opportunity to put men back on the land. We cannot continue all these factories, no matter what they desire to manufacture; but we can produce in the vast expanses of Canada to an unlimited extent if agriculture is given parity prices. I admit that I might find it difficult to give a correct definition of that term, but I believe that parity prices must be provided for in legislation as applicable to farm products. Every bit of legislation the government has brought forward-and we are proud of what has been done-affects the farmer. He is absolutely dependent upon what the floor price is; and if the floor price is to be set, not by members of parliament representing all parts of Canada and all the political parties, but by some economist in the Bank of Canada or a small town lawyer on some of these boards, you axe not going to get real parity prices, I can assure you of that.
The original definition of parity prices is to be found in the United States Agricultural Adjustment Act of 1933, the object of which was " to establish prices to farmers at a level

Department oj Reconstruction
that would give agricultural commodities purchasing power with respect to articles farmers buy equivalent to the purchasing power of agricultural commodities in the base period." That is not in effect in Canada to-day. Anyone familiar with agriculture knows that it is not in effect. Of course agriculture is on a sounder basis than it was in previous years. With the general prosperity enjoyed in Canada at the present time it is bound to be, but what the farmer fears more than anything else is that there will be a collapse of these prices. We have the assurance in the speech from the throne that floor prices will be set, but what I am particularly interested in is, who is going to set them? If it is we in parliament who are to set them, I shall not be worried so much, but if they are to be set by a board with no knowledge of conditions across Canada, and particularly of local conditions, it is a totally different matter. It has been demonstrated in the past as far as the agricultural policy of the government is concerned that agricultural conditions all over the country are taken into consideration, and rightly so. For years other parts of Canada carried Saskatchewan and other provinces during their_ misfortunes, and no one objected to that. But this illustrates the fact that conditions vary across Canada and that they must be taken into consideration in setting floor prices. In many cases in the past that has not been done. I again insist that I do not care what kind of veterans' land act is brought in or what amendments are made; it is absolutely impossible for the veterans to go on these farms unless they are guaranteed a reasonable and fair price for the commodities they produce.
In connection with the farm problem I wish briefly to revert to the subject of money. Speaking in the house on June 20, the Prime Minister is reported in Hansard, page 3986, as saying in part:
Later, as forecast in the speech from the throne, there will be some tax modifications to encourage industrial conversion, and also there will be an expansion of research.
I have no particular quarrel with this proposal. If industries are not allowed to build up again, are not permitted to prepare to convert their plants to peace-time activities, we cannot put men back to work. But I do want to insist that agriculture must have exactly the same treatment. For years farmers had to do without new equipment, not only because it was not available, but because in any event they did not have the money with which to buy it. Even in the last prosperous two or three years what money they did have has been used to pay off debt, not to buy new
100-258J
equipment. Therefore the farmer is entitled to exactly the same consideration in any adjustments respecting income tax.
I hope that the budget is not quite completed. I happen to have my office on the fifth floor, and as the Minister of Finance (Mr. Usley) is located on the same floor, there is a continuous stream going and coming. I wish they would come in to me for advice in preparing the budget. I was quite flattered about something which happened yesterday. My office is in about the centre of the block. One of the most popular and esteemed members of the cabinet has his office on the fourth floor immediately below mine. Inadvertently yesterday he opened the door of my office and walked in, and he said, "Goodness, I must have opened the wrong door." I said, "No, it is all right." I will not tell you his name; it begins with a C. Coming events cast their shadows before; it may be that he came in to look over my office before I move down to his. Seriously, I hope the Prime Minister takes into consideration this important fact that agriculture is just as much entitled as any other industry to money for reconversion. The farmer is in the same position as the industrialist. He needs new binders, new tractors, other new equipment, and he should have the same consideration in so far as income tax is concerned.
There is one thing to which, I think, not enough attention has been paid. I want to congratulate the leader of the opposition (Mr. Graydon), who made, I thought, an excellent address yesterday. Particularly I would like to compliment the hon. member for York South (Mr. Noseworthy), who, I believe, is the only member who in the course of this discussion has touched on education, although it is a factor in reconstruction which affects the entire dominion and one in which, I think, we all should be interested. His speech last evening was very fair and very constructive. It is not often, possibly, that I can say that. I wish I could say the same for the leader of his party, who goes around and makes strange statements, probably for vote-catching purposes, about what he thinks the soldiers want. If anybody stops to think, he will know that what the expression "the Canada he left" means is that the soldier wants to get back to the Canada he left, to peace-loving Canada, and particularly, his mother's cooking. The speech of the hon. member for York South, however, was helpful, and I congratulate him, and also the hon. member for Cape Breton South (Mr. Gillis), who is always interesting.
I do not want to take any more time, except to impress upon the government that we in
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British Columbia will not be satisfied with a dollars and cents approach to this matter. After the announcement made by the Prime Minister to-day I do not know how any member of this house or anybody else in Canada can think in terms of dollars and cents about what is to be given as a matter of right to Canadian men and women coming back from the war. Money must never be allowed to stand in the way of what we are going to do for those men and women, and I urge upon the government that representation of the soldiers and of the women serving in the forces should be considered in the setting up of these boards under the reconstruction department-above all, the women. Little has been said about the way in which we are going to deal with the women coming back to civilian life from the army and from war industry. That will be one of the greatest problems we shall have to tackle. Money will not always provide the solution so far as the women are concerned. With money you can always find work for men, but you cannot always find suitable work for women, no matter how much money you may have. I suggest therefore that the government would be well advised in the setting up of these boards to consider the representation of the women in the armed services. The government might take representatives from the women's institutes and from those serving in the armed forces, as well as representatives who will look after the interests of the men in the army.
I am a party member, but I say that if the government sincerely wishes this department to be a success, politics in any form must be kept out of it. If anything is to be kept out of the department it is politics. Irrespective of party we should initiate a programme that has been planned for the good of all and not for the advantage of the few.


Mr. HUGHES CLEAVER (Halton):: Before addressing a few remarks to the points I intended to cover in this debate, I hope my hon. friend who just preceded me (Mr. Cruickshank) will not take offence if I attempt to give him the other side of the story in regard to the Veterans' Land Act. I wish to suggest seriously to him that he should add up the over-alj benefits which the new Veterans' Land Act proposes to give to the returned man who might wish to go farming. If he does so, perhaps he will revise his views in this connection. If he will add up all the benefits, he will find that the dominion government is making a cash grant substantially close to S3,000 to every Canadian veteran
TMr. Cruickshank.]
who wants to go farming under the Veterans' Land Act.
Before discussing that, I might add that any boy who will make a good farmer will in my opinion be entirely successful if he starts with S3,000 cash assistance and when the balance of his liability carries interest at a rate of only 3^ per cent. In adding up these benefits we find the veterans' initial responsibility is to pay $480 down in cash. The government, on the other hand, makes a cash contribution of $2,320 of the purchase price, $1,120 on account of the farm and $1,200 for implements, in addition to supplying the finances. That is made up in this way. As regards stock and implements, if the farmer is successful he pays nothing for the stock and implements; that is $1,200 of the amount I have referred to. The criticism is that $1,200 is not an adequate amount to equip a farm with stock and implements. Well, I suggest that it was never the intention that $1,200 should fully equip a farm with stock and implements. The intention, as I understood it, was that it would supply a suitable foundation stock; it would supply the initial bare needs for implements, and the farmer would go on from there. In addition to these amounts, it is well recognized that farm income does not come in monthly, and so provision has been made, for the first year, for monthly payments where necessary to the farmer to maintain him. The single man will receive something like $44 a month and the married man $68, while the married man with children will receive additional allowances for the children. Adding all these benefits together, we have a total of at least $3,000 for one man if he wants to go farming, and1 I repeat that many farmers in this country, reasonably prosperous, think they do very well by their sons in setting them up in farming if they make a contribution anything like that.
There may be some reason for criticism on the score that the benefits that accrue with respect to a farm costing not more than $4,800 are not adequate. Another clause in the act, which is quite elastic, provides that if a farmer wishes to buy a farm in excess of that amount he is permitted to do so but he must finance the balance himself.
I am coming to the one and only criticism I have-and I would not dream of criticizing such an act without offering what in my opinion is a helpful suggestion. I think that in some parts of the country farms are at such a price that $4,800 would not buy a good up-to-date productive farm. In that event I think the amount should be increased, but I would correspondingly increase the mortgage

Department oj Reconstruction
liability at 3i per cent which the veteran assumes. With that one minor amendment,
I think the act would work well, and that is the only complaint I have received from veterans' associations in my riding with respect to the act.
In rising to take part in this debate on the second reading of the bill to provide for the setting up of a department charged with the sole responsibility of post-war reconstruction,
I do so simply to emphasize one problem which I think we shall be facing in the postwar period, and one which I think should be given a No. 1 priority. The general field has been ably covered and I do not intend to spend much time in that regard. While I agree that Canada's post-war prosperity is in part dependent upon the extent to which we are able to assist in achieving world-wide recovery, and while I agree that Canada must assume her full responsibility in that regard, and fully realize that in so far as we do have world-wide recovery Canada as a trading nation will participate in the benefits which flow therefrom, yet I feel just as strongly that living conditions in Canada also depend upon the way in which we treat our own local domestic problems. If our national income, whether large or small, is equitably distributed among the different classes of the' population, then we shall achieve a proper distribution of goods. I do not think that happened during the depression, but I will not take time now to discuss the causes.
To be permanently prosperous I believe the country must maintain a standard of living on a par with its ability to produce goods. I think that is axiomatic, but there is just one "if," namely, if a country produces goods in excess of its own needs, in order to maintain this high standard of living I am talking about markets must be found for the excess.
As to the production surplus over and above our own consumption needs, which amounts in round figures to one-third of our total production, we should of course exchange that surplus for goods of other countries which we can use. If by foreign trade we are able to do this, we achieve our maximum prosperity. If we cannot do this by foreign trade, I suggest that under the best of management we would only reach two-thirds of our maximum prosperity. If we do not take the necessary steps to dispose of that unexportable surplus and to prevent the endless distress which follows, such as falling prices and the like, we can get into a lot of trouble. Therefore I suggest, Mr. Speaker, that until world recovery takes place to the point where we shall be able to dispose of the exportable surplus we have three options. We can either
give that exportable surplus away to needy nations; we can stop producing it, or we can store it up at fixed prices hoping to be able to sell it in the future. I do not know of any better illustration of what I am talking about than our exportable surplus of wheat.
The problem I have just outlined is one that should be studied very carefully in this country. On the one hand I do not think that we should accept the defeatist attitude and say that we have to wait until general world recovery comes about; nor on the other hand do I think we should fail to assume our responsibilities in the matter of helping to assist general world recovery. As I said a moment ago, I am not going to discuss to-day the general problem but there is one concrete matter that I should like to bring to the attention of the government and of the hon. members of this house. It is a post-war problem which I think will merit a No. 1 priority. We have an acute shortage of houses in this country. Estimates differ, but reliable sources agree that when this war is over we shall have a shortage of over three hundred thousand houses. It is only right and proper that in time of war, with its consequent shortage of labour and materials, we should try to get along with the housing accommodation we have. We have struggled to do that, Mr. Speaker. By rental controls and the like we have done our best to get by the present emergency without any needless expenditure of either labour or materials on the building of houses. While we have been quite correct in' postponing house building to meet the needs of war yet in the long run I suggest it is going to turn out to our advantage, because during the immediate post-war period this postponed consumer demand for houses will have to be met, and it will put thousands of men to work.
At the moment we can reasonably hope that the end of the war is not in the too far distant future, and I think we should immediately complete plans for post-war house building. I should like to urge that pilot or key organizations be set up now, which can be quickly expanded when the war is over, to support, and direct house building schemes. In adopting this plan of postponing the supplying of our housing needs until the war is over we have of necessity caused some real distress. To-day many people are living under almost unbearable housing conditions. To some extent this has been the cause of increasing crime, ill-health and the like. In addition to those who are in actual distress, thousands of families are daily living under the threat that their houses will be sold over their heads and they will have to move, not knowing where they will go. People cheerfully and willingly
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sndure that sort of thing during war time. But 1 suggest to you, Mr. Speaker, that the minute this war is over the Canadian people will demand-they have a right to demand-that their proper housing needs be met.
In addition to the acute housing problem which exists at the present time, when thousands of our service men return they will marry and want homes of their own. In addition to giving the housing problem the rating which I believe it deserves, namely, No. 1 priority, I should like to urge that the government sponsor a campaign for every man to own his own home. I do not know of any better time to start than now, when we have such an acute shortage. I should like to urge that credit facilities be made available for this need on a sound business basis. The advantages of home ownership and the disadvantages of tenant occupancy are so apparent that I do not need to labour the point. In these days we hear many discussions of the relative merits of our capitalistic system and socialism. So far as I am concerned the major complaint that I have in regard to the capitalistic system is that we have too few capitalists. I would urge that every man in this country own his own home; every man should become a capitalist. This proposal is not a dream impossible of fulfilment. It is a scheme which if undertaken as a national programme could be quite easily attained in a very short time. To-day many men have to pay rent for their housing accommodation. Is there any man in this country who would not rather pay the same monthly payments on a house which he will eventually own?
Let me say something as to the down payment. We all know that practically everyone in this country is accumulating savings which I suggest in most instances will be sufficient to take care of the ten per cent down payment at the end of the war. To those who have not been able to acquire the compulsory saving as a down payment I suggest that the new amendment to the Bank Act will meet then-difficulties. The banks are going to enter actively the field of small loans repayable on a monthly basis at a reasonable rate of interest. A man desiring to own his own home would be able to acquire his down payment from, that source.
In the National Housing Act we have a well-tried instrument at hand. We do not need to create anything new to get on with this programme. Do hon. members know that since 1937, under the National Housing Act, we have built something over 25,000 houses? They are practically all owner-occupied; and while the government has participated to the extent of a twenty-five per cent contribution

toward the cost of those houses, the act was so well thought out and has been so efficiently managed that our losses to date on the
25,000	houses are less than $5,000, or twenty cents per house,. I suggest that the present act should be used for this purpose-with some amendments, or streamlined if you like-in order to bring those advantages within the reach of every working man in the country.
My first suggestion is in regard to interest rates. Interest rates should be reduced to 4i per cent, and to 4 per cent if possible. As all hon. members know, money is now available in the Dominion of Canada-that is longterm borrowing-at 3 per cent, or less. Let us take the government's contribution of 25 per cent, and figure it on a 3 per cent basis. Let us allow the loan companies 5 per cent on their 75 per cent loan content, and we have a resulting interest rate of 4^ per cent.
I suggest if we are to adopt a large building programme the lending institutions of the country may not have sufficient money to finance it on that basis, and that perhaps the government should enter the field on a 50 per cent basis with 3 per cent money. In this event, allowing the loan companies 5 per cent on their 50 per cent content, the interest rate would automatically fall to 4 per cent. With the interest rate at 4i per cent-and the Minister of Finance has announced in advance that that is what is going to happen

the monthly payments for these houses, under which a man actually acquires eventual ownership, are today less than the normal rental for houses of that type. With a possibility of a further one-half per cent reduction, one can see what the effect would be in connection with monthly payments.
Coming to the second recommendation, in connection with the repayment of loans, I know something about these houses built under the National Housing Act. They are well-built. I say without fear of successful contradiction that homes built under the National Housing Act standards have a useful owner-occupancy lifetime of at least forty years. I therefore suggest and urge that the amortization period should be increased from twenty to at least thirty years. That again will assist in bringing down the amounts of monthly payments. The Minister of Finance has already announced that that proposal is under discussion, and that some progress will be made. I would urge as strongly as I can that thirty years should be the minimum, where an owner requires that time to pay for his home.
My next suggested change is a new one. In the mind of each of these home owners is the constant dread, the constant worry hanging

Department oj Reconstruction
over his head that something may happen, possibly through illness or accident, as a result of which the breadwinner would lose his life and the widow would be left with an unbearable mortgage load. If this is to be a nation-wide scheme for every man to own his own home, then I say that in the event of his death the mortgage should be paid off and the widow should be presented with the house free from encumbrances; and that this should be paid out of an insurance fund. I am told that this type of term insurance could be acquired at moderate cost, not exceeding one dollar per home per month.
,My next suggestion deals with restraint in respect of alienation. Very serious thought should be given to this matter. So far as I am concerned, the owner of a house should be placed in the position where he could not, through bad business judgment or in any other way, lose his house. I would have the house in such a position that it will not be subject to execution levies. In addition, I think it might be wise to prevent the owner himself from selling his house, or possibly it would be well in the event of sale to freeze the selling price, or set it apart to be used only for the purchase of another house. That is only my own thought on the subject, but I offer it for what it is worth.
These five suggestions will in my opinion make the act workable and bring it within the reach of every working man in Canada. However we could not possibly succeed in reaching a point where every man would own his own home unless we were to provide for the use of existing houses already built. I suggest that an additional part be added to the housing act to make these second-hand houses, if I may so describe them, available for exactly the same purposes and on quite the same terms. I concede at once that the amortization period should not be so long-that is, it should not exceed the life of the house. In addition, money should be made available by borrowing, repayable in monthly payments, just as under Part I of the act, to provide for necessary permanent repairs and permanent alterations to bring the existing houses up to modern condition.
If those things are done, and a nation-wide campaign is instituted, it would be almost impossible to estimate the amount of human happiness and human satisfaction which might flow therefrom.
I have commented on the urgency for the need for housing. I have commented, too, on the benefits, peace of mind and human happiness which would flow from such a plan. I have one other reason why in my opinion
housing should receive priority in connection with post-war reconstruction, and it is this: The labour content of every medium sized house is at least eighty per cent. Some members may question that percentage, but when I refer to labour content I am not referring only to the labour expended in the building of the house. I include the indirect labour- the labour content that goes into the manufacture of frames, doors, lumber, flooring, plaster, hardware, plumbing, and everything else used in construction. If one computes all that in the labour content he will reach at least eighty per cent labour content in a medium sized home. I do not know of any type of construction in which the labour content is as great. For that reason therefore I say that is one of the post-war schemes we should first adopt.
There is another feature in connection with labour content, and it is this: I do not know of any construction work in which the labour content would be so diversified, and spread out over the entire country. One might say it would be spread throughout all branches of industry. Benefits would accrue to all parts of the country.
For all these reasons I urge as strongly as I can that the present is not one day too soon to make plans and to complete the organization for the financing and the supplying of materials for the new houses we so urgently need.


Mr. R. W. MAYHEW (Victoria, B.C.):: Mr. Speaker, I do not apologize for taking part in this debate in connection with the establishment of a Department of Reconstruction. I agree entirely with the hon. member for Essex East (Mr. Martin), who has said that this matter is next in importance to that of winning the war or prosecuting the war. Had I not said anything I am afraid I would have been apologizing to myself for some considerable time. I suppose when I finish my speech I will still be apologizing to myself because of having fallen far short of what I would have liked to say in the short time at my disposal and with my limited ability.
I have been interested in this matter from almost the start of the war. So far as I know the first committee on rehabilitation set up in Canada was one set up in British Columbia by the British Columbia branch of the Canadian Manufacturers' association. I happened to be chairman of that branch at the time. I believe that committee is still functioning and considering plans for rehabilitation and reconstruction. I remember one statement that I made at the annual meeting. I impressed upon all the manufacturers of
Department of Reconstruction

British Columbia the necessity of watching their plants very closely in order that they should not run down. I emphasized the fact that obsolescence was a detriment not only +o the particular plant but to the province As a whole.
I took another step at that time in an effort to enlarge the knowledge of this subject, both in the province and throughout Canada, but this was a somewhat disappointing experience. I offered an award for the best essay on postwar rehabilitation to be written by any undergraduate in Canada. This offer was made directly to the James committee when it was first formed, and it was also passed along to the Minister of Pensions and National Health (Mr. Mackenzie) who received it very warmly. However, the universities did not seem to rise to the occasion and give this suggestion the leadership which I thought it should have received. Instead of announcing this award to their students at the close of the year, they announced it when the college term opened, and the result was that only a few participated because they had only some three or four weeks to prepare their essays.
I would be quite prepared to continue this offer for the duration of the war. I think if it had been done we would have had a young people who were more enlightened on this subject. There are many young people reaching the time of life when they might make an active study of these matters, but they have not had the opportunity. If they are prepared to make full use of my offer I am prepared to renew it at this time.
I regretted that the statement was made in the house that this department was being set up to fill a temporary need only. I think that is a mistake. It should be a department for the development of Canada not only in the transition period from war to peace but for the many years to come. The department should be available for as long as it is necessary, and I am sure that that will be for the lifetime of Canada. There is so much in this country that is yet untouched. There are tremendous possibilities for development, and I cannot see anything better than to have an all-time department. This should not be a department with just a minister, a deputy minister and a few assistants; it should be a department with a minister, a deputy minister and a staff sufficiently large that its members could be selected from all parts of Canada, thus bringing together the necessary knowledge for this particular sphere of development.
The other day we heard a splendid speech by the hon. member for Athabaska (Mr. Dechene). He told us a little-no one could

tell us all-of that great northland of which we know so little. There are over a million square miles filled with every kind of natural resource, such as minerals, forests, fisheries and oil. I am sure it will take some time fully to develop this particular district.
Speaking a few days ago the Prime Minister (Mr. Mackenzie King) mentioned another possible field of development. He referred to the creating of Ottawa as a federal district, and the possibilities of beautifying the nation's capital. He told us how it was hoped to make the other bank of the Ottawa river in Hull a thing of beauty. There should not only be a physical development of Canada; we should have cultural development as well. There are many cities besides Ottawa where similar projects could be carried out. I am one who believes that it is not a waste of money to develop cultural things. Would anyone say that money has been wasted in the construction of this grand building we are in at the present time? We could actually do with much less in the way of a building. We could talk just as much, although there might be a greater fire risk. But will anyone say that it has been a waste of money? Will anyone say that what was done on Elgin street a few years ago was a waste of money? I definitely say that it was not. We could take every city in Canada and try to make it a city beautiful as well as a city useful.
Any schoolboy will tell you that we must develop our industries to their maximum. These things are so obvious that they scarcely need mention. But the others are things which we have been overlooking. It is a change of mind that we want towards our development. Take, for instance, the city of Winnipeg, or Saskatoon,- Regina, Edmonton, Vancouver; or take my own city, the city of Victoria. I do not think there is a more beautiful spot in Canada than Victoria, and regardless of what anyone else says, it is the playground and will remain the playground of Canada so far as climate is concerned. The nation could spend in the city of Victoria many millions of dollars which would be of tremendous advantage not only to the people of the city of Victoria but to the rest of Canada who would be glad to get away from the winters you have in the east. People are coming into the city of Victoria from all directions, both summer and winter. It is the only place where you can have really warm salt water bathing practically the year round. By the expenditure of a few hundred thousand dollars you could make it not only a national but an international playground to the great advantage of us all. I had no intention of

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bringing forward the claims of my own city for development. I use it just as an illustration of the possibilities that we have in Canada for just such projects.


Mr. KUHL:: But we need to know where the money is coming from.


Robert Wellington Mayhew: Where the money is coming from? The Prime Minister told us the other day, and I think he is right, that the money will come for the things which the people are interested in and desire to have.


Walter Frederick Kuhl: They were interested before the war too.


Robert Wellington Mayhew: We listened to the hon. member speaking the other night, and if I remember rightly he implied that it was humiliating to work.


Walter Frederick Kuhl: I did not say any such thing.


Mr. CRUICKSHANK:: He has never
tried it.


Robert Wellington Mayhew: If the hon. member did not say it, he implied it.


Walter Frederick Kuhl: I said that compulsory work was humiliating. I did not say voluntary, but compulsory.


Robert Wellington Mayhew: The Lord made it compulsory because He told us that we must earn our bread by the sweat of our brow. Personally I do not think you can build character in a people or in a .nation unless they- have work to do.


Walter Frederick Kuhl: Voluntary work.


Robert Wellington Mayhew: Work is the fibre of achievement that makes a nation great, and you cannot have the fibre of achievement unless you have something to do and are willing to do it, That is what my hon. friend lacks.


Walter Frederick Kuhl: No.


Robert Wellington Mayhew: I was saying, Mr. Speaker, that I am anxious to see these developments take place; I emphasize this because there is not time to deal with the others, and I want if possible to get this point across.
I believe that we have to have full employment. I do not believe you can have half of your people employed and the other half unemployed. Someone has said that no man is free unless all are free, and I do not think we can be busy to the best advantage unless we are all busy. I think we could all be busy in the future.
In the programme which should be undertaken the matter of tempo enters. Some say that the tempo should be increased just as soon as the boys come home from overseas.
1Ml-259	.
Personally I do not think so. I believe that there will be sufficient work, more than sufficient work, for the first two or three and possibly four years after the war is over. It will be in the subsequent period that we may have to move in and find work for people to do; but this nation I think will do these things I have mentioned because they are in the end self-supporting. I want to emphasize , that.
I do not think you should bring the boys home from overseas and put them to work and at the same time leave the boys that are at home without work to do, because when one man is idle, somebody else is not fully employed. Only when all are employed can all be fully employed.
I am going to make four suggestions, and then I shall conclude.
First I think the name ''Reconstruction" is a misnomer. It has come out of its association with rehabilitation. It is national construction, national planning on a long and broad scale which in my opinion is required. Rehabilitation is an entirely different matter.
I do not say that they are separable, because you cannot have rehabilitation without reconstruction. But title reconstruction would mean that this country has been partly destroyed or that we intend to destroy it and rebuild it. There is nothing of the kind. We are to build on what we have. It is a gradual development on the basis of our imagination, and, I hope, of our courage, because I know that our ability to do it is there. I suggest that the name of this department be changed.
I suggest, too, that it be made a permanent department. I suggest that it have a large personnel, not a small one; that that large personnel be selected from all parts of Canada, and that in their planning they look towards developing not only the ribbon that runs across Canada from the Atlantic to the Pacific, but Canada as a whole.
I suggest also that the minister, whoever he may be, be appointed now. I do not think it is too early. The formation of this branch of government is very timely, and the minister should be appointed now for this reason. He would be able to sit in on and give a lead to the banking and commerce committee, because finance is going to come into the programme of reconstruction, and his advice and assistance in planning for the reorganization, if that is to take place, should be of some assistance both to him and to us.
I suggest that this department be not just another department of government, but that it be "the" department of government, because upon it depends the full work of our people; on the full work of our people depends our

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national income, and on. our national income depends whether or not we can carry on with our social legislation. This department is the heart and the backbone of Canada itself in action.


Thomas Reid: Mr. Speaker, most allied nations have been laying plans during the past three or four years for post-war planning and rehabilitation; but I say to you as emphatically as I can, in view of statements which are being made outside the House of Commons, that no country among the allied nations is so far ahead in plans for rehabilitation as is Canada under the present government. That statement cannot be successfully refuted. I am sorry that the leader of the Cooperative Commonwealth Federation is not in his seat this afternoon, because I intended at this time to deal with one or two statements he has made; however I will defer until later most of the things I have in mind. I think it is most unfair for an hon. member, especially one who is the leader of a party, to make statements throughout the country which, I say, are not true. For instance, he is quoted as having said a short time ago that two million jobs would have to be found for service men returning to civilian life in Canada after the war, and that not a single plan has been devised by the dominion government to meet that situation. In that utterance there are two gross misstatements of fact. The first one is that two million jobs jvill be needed for service men. There are not over eight hundred thousand men and women in the armed forces of Canada, and to assert publicly that two million jobs will be required for them is a kind of mathematics which is beyond me. I rather thought that people in the country from which I come knew something about mathematics and education.


Mr. GILLIS:: Will the hon. member permit a question?


Thomas Reid: Yes.


Clarence Gillis: Where did he get this statement which he alleges the leader of the C.C.F. made?


Thomas Reid: I am glad that the hon. member for Cape Breton South asked that question. For every utterance I have made in the House of Commons I have been careful to have proof. The statement I have referred to is reported in the Leader-Post of Wednesday, June 14; and may I say to the hon. member who interrupted-


Mr. MITCHELL:: The Leader-Post of
Regina?
[Mr. Mayhew.}


Thomas Reid: Of Regina; yes.


Clarence Gillis: It is ridiculous on the face of it.


Thomas Reid: The hon. member may say it is ridiculous, but may I say that there is something in this connection which is very strange. I do not know much about how the C.C.F. act in other provinces, but in British Columbia, from which I come, I know something of their actions, and before this session is over I shall deal with a good deal of what has gone on there. Any time that any paper in British Columbia has reported some statement against the C.C.F. or any of their leaders they rush to contradict it, but I have never seen any contradiction of this report. Are they carrying on some other policy in Saskatchewan and not repudiating things they object to?


Clarence Gillis: It is so obviously ridiculous.


Thomas Reid: I do not see how the hon. member is in a position to deny it. I might say to him, just hold your horses a little while.


Clarence Gillis: Well-


Thomas Reid: Mr. Speaker, have I to take care of myself?


George Alexander Cruickshank: You can do it.


Thomas Reid: Because if I have to, of course it is all right with me.


Clarence Gillis: If you want to make such statements, it is up to yourself.


Thomas Reid: Some statements have been made during this debate, either in the speeches or in cross-fire conversations across the floor of the house, particularly by members of the C.C.F., regarding the years of depression, 1930 to 1939. Speakers of the Cooperative Commonwealth Federation group have gibed at both the Conservative and the Liberal parties with reference to the great amount of unemployment during those years. I have been frank to admit wherever I have gone that there was a great deal of unemployment at that time, but I do not understand the reasoning of those who remind us of it, or why Canada in particular should be singled out and our form of democratic government denounced because we were not able to solve the problem during those years. No country in the world, I care not what form of government it had, solved the problem. Oh, yes; someone is going to say that all were working fully in Russia, that they were fully occupied in Germany and Italy and Japan. But if all those countries had their people at work, it was simply because they were getting ready for war. We are not a warlike country. The facts are that no country in the world solved the

Department of Reconstruction
problem of unemployment during those years- neither Russia nor Germany, Italy nor Japan. Yet members of the C.C.F. go up and down the country saying that we must have a new form of democratic government, that the old parties have failed, because from 1930 to 1939 they did not solve unemployment.
The thought has just entered my mind, and it is something I have long wanted to say in this house, that I have been astonished at the attitude of a number of those who, have come to Canada from other lands and who, had they stayed in the lands they came from, would probably not have owned very much; yet with all the possible things that God could give them in this great land, they have gone around denouncing the government of Canada.
I remind the house, and it seems to me a strange and significant fact, that during the years of depression, and when we were hearing so much of the progress of Russia, although
60,000	persons made application to the Canadian government to be taken back to Great Britain, no applications so far as I can learn were made by any who came from the countries of continental Europe to be returned to the country of their origin or birth.
I say, Mr. Speaker, let us have some pride in our land. When one looks over the membership of this house and recalls that some thirty-one hon. members were born outside this country and came to it from nine different countries, it seems reasonable to ask whether there is any other land which has provided the same opportunities as this great country has provided to those who have come here from abroad. One quality in the Russian people which we might well emulate is their great love of country.
While I am not suggesting that this government should adopt the policies of militarily-minded states, it is my opinion that following the conclusion of this war we shall not allow ourselves for many, many years to revert to the condition of unpreparedness in which we found ourselves prior to 1939.
One thing we all admire about Prime Minister Churchill is the great frankness of his statements. It is a splendid thing to be frank. When he was speaking in the British House of Commons on post-war rehabilitation someone reminded him that after the last war British shipowners had bought German merchant ships at a cost of little or nothing. He replied that that was perfectly true, but, he said, "We won't make that mistake again, though I expect," he said, "being human, we shall make other mistakes." I recall that because we too admit frankly, at least I do, that we did make a mistake in 1930 to 1939. But we are not going to repeat
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that mistake; and when anyone goes through this country endeavouring to persuade the people that a new heaven or a new earth will come about if only some new type of democratic government is given an opportunity, I warn the public to be very careful before they take such statements too literally.
It is only of late that members of the C.C.F. party have admitted that trade may be at all a significant factor. Like most parties, they are keeping their ear to the ground too and moving along as they think the people want them to, so that they do not differ from any of the older parties in that political regard. That, after all, is democracy.
I do not know what the future will bring forth, but if past history has been any guide to us at all it shows us this. To me at least it has proved that the nations that have gone out to trade, and to trade freely, have been the nations which have given most of this world's goods to their people, while the nations who have lived unto or within themselves have been the nations which have given the least of this world's goods to their people. That has been the history of mankind from the days of Adam to the present time, and it is my opinion that the same thing will hold good for many years to come. We must therefore pay greater attention to international trade.
This country is adapted to produce great quantities of grain, lumber, fish and agricultural products which could never be consumed at home unless we trebled our population, even though we were provided with twice the amount of food we consume at the present time. I find that the Liberal party is in pretty good company, because at the international labour conference held in Philadelphia in May last the following statement was made with regard to trade, enunciating the fact that we must take note of what is taking place in other lands:
The war against want requires to be carried on with unrelenting vigour within each nation, and by continuous and concerted international effort in which the representatives of workers and employers, enjoying equal status with those of governments, join with them in free discussions and democratic decision with a view to the promotion of the common welfare.
And this is what I ask you to note particularly. This is an outstanding resolution:
Poverty anywhere constitutes a danger to prosperity everywhere.
That is the point of view held by those of the Liberal party who are looking to the furtherance of trade, believing that we cannot remain in our shell or live unto ourselves and hope to prosper. Isolation, sir, is as dead to-day
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as the great wall of China. When one realizes that it takes only about sixty hours to travel completely round the globe, one realizes how close countries are to one another and that we must pay greater attention to the prosperity and well-being of other countries as well as the .prosperity and well-being of our own. When we think of the brotherhood of man, we must realize that this brotherhood was not intended to be confined within the borders of any one country.
In British Columbia for many years, emanating from those belonging to the C.C.F. and emanating as well from members of the C.C.F. party in this house, there have come public utterances upholding the Dominion, of New Zealand. The other day an hon. member pointed out, in answer to an interruption, that the general picture of welfare in this country was ahead of that of New Zealand. I have gone into this matter a little, and these are some of the things I find. Take the debt charges in New Zealand, for instance-and I have the debt charge translated into dollars so as to make it comparable with that of our own country. The public debt charge of this country is on an average $6S0 per head, while in New Zealand it is $1,010. Take interest charges. We have heard a great deal about interest charges and debt-free money, but there again we are still ahead of New Zealand. Interest charges in Canada amount to 2-90 per cent- and I understand even that has been reduced -whereas in New Zealand the interest charges are 3-42 per cent. We have heard a great deal about the load of debt on the Canadian people. Well, the load of interest debt in Canada works out at something like $14.65 per head, whereas in New Zealand the load of debt is $28.75. I have given the interest charges they are paying on loans, and I have given the public debt. Now, coming to taxation, this may interest hon. members. I have not time to go into it fully, but I shall be pleased on another occasion to elaborate on these matters individually. The single man in New Zealand earning $700 pays something like $53. In Canada it works out at $26, with $13 refundable. The married man with two children earning $1,500 per annum pays in Canada $49.50, with $24 refundable. In New Zealand he pays $154. This information I have obtained from the New Zealand Year Book.


Clarence Gillis: But you are only quoting
half of it.


Thomas Reid: I am giving the full details on interest and debt, and I shall be glad to discuss the entire New Zealand situation with any hon. member of the house, because the picture gets better as it goes on.


Clarence Gillis: It is not fair to put half of it on the record.


Thomas Reid: That is the old way of putting something across, by rising and making such statements. You are putting that in my speech; it is very cutely done but you are all wrong. It is a habit you have had for a number of years, and I would ask you to keep your seat and possess your soul in patience. I can discuss it with you in committee.


Clarence Gillis: You are insulting a sister
dominion.


Thomas Reid: I resent that. I am not insulting anyone. I am putting these facts before the house only for one purpose. It has been held up to the people of this country by the C.C.F. that if we adopted a government similar to that in New Zealand all the good things people hope for would be bestowed on the Canadian people. I am not bringing this forward for any other purpose than to answer my hon. friend. I do not wish to introduce division between sister dominions, but it is said so often by members of the C.C.F., both in British Columbia and here, that I am impelled to correct their statements and keep the record right and true. When it comes to taxation, it would appear tihat they soak the workers there. We in Canada place the burden of taxation where we believe it can best be borne. For in the matter of income tax they pay more in New Zealand until the sum of $10,000 per annum is reached, and thereafter it gets less, whereas in Canada it increases very greatly indeed. I could quote bond, interest too, which is less in Canada. .In regard to New Zealand's financial position I doubt, Mr. Speaker, had it not been for the help of Great Britain during the war, whether she would have been in as good a financial position to-day as her books would seem to indicate.
With regard to Canada and rehabilitation, may I say without fear of successful contradiction that the provision we have made for our service men is not bettered or equalled by any other country of the allied nations. There is only one thing that I believe New Zealand has done a little better than we, and that is with regard to the matter of clothing allowance. I hope that will be adjusted in Canada before very long. In the matter of treatment, pensions and hospitalization for service men, I know of no country which is doing more than we are. In saying that I do oot want to leave the impression that we have finished or reached the ultimate in the treatment of our service men and women. I am

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merely stating the fact. If anyone has any statement to make to the contrary I shall be glad to hear it.
British Columbia is taking quite a part in the work of rehabilitation. The government of that province set up a committee composed of representatives of all parties in the assembly. The report of that committee emphasized the matter of finance. The hon. member for Fraser Valley (Mr. Cruickshank) in his speech this afternoon touched on the subject of municipal finances. While I realize that no definite projects can be outlined at the moment, the general plans are, however, outlined, and the government of the day should as soon as possible let the cities and municipalities know what their position will be in regard to loans. If the municipalities could obtain loans at cost, say, three-quarters of one per cent, I feel sure that every city and municipality would immediately set to work to outline post-war works. Remember, Mr. Speaker, that a great deal of the burden of rehabilitation will fall on these cities and municipalities, because when a man is seeking relief, and sometimes when he is seeking employment, the first place to which he goes is the municipal council. In every recommendation presented on behalf of the government of British Columbia that one point was brought out.
I am not going to weary the house because this document is too voluminous for me to place on Hansard, but I wish to read one of the recommendations that was put before the dominion government. It is as follows:
No information seems to be available as to what procedure will be followed by the dominion government in allocating proportions of cost under any of the rehabilitation programmes where they operate to the benefit of municipalities. Naturally a programme involving one and a half million dollars is entirely beyond the capacity of most cities.
Then further:
Your committee appeared before the provincial government rehabilitation committee early this yeaT-
That was 1943.
-presented .their report, and entered into a discussion regarding some of the proposals, especially regarding the method of financing post-war schemes. We feel that until the question of finances 'has been settled, the whole work of all post-war committees has been futile. The provincial committee themselves have not a solution, as they in turn await the decision of the federal government on this point.
Therefore I urge upon the Prime Minister and the government the necessity of arriving at a decision as soon as practicable, and so that the municipalities, cities and provincial governments be informed as to what help they
may expect from the dominion government and what rates of interest will be charged for loans.
I would make one other proposal to the Prime Minister and to the government. Before the programme of rehabilitation starts, steps should be taken with regard to the debts owing the dominion government by provincial governments. I was looking over this matter before I came down to the chamber this afternoon, and I was surprised to find that according to the last auditor general's report the provincial governments owed the dominion government something like $313,309,016-and by the way, Saskatchewan did very well in that respect because that province was lent a considerable sum of money, according to the record; they owe the government $79,828,017. As one looks over the staggering amounts one realizes that that is one of the things that should be taken up at either the forthcoming dominion-provincial conference or as soon as possible thereafter, to see if some means can be devised for clearing up those debts which hang like a cloud over the provincial governments. The provincial governments in turn have lent large sums of money to municipalities, and those debts also hang like a cloud over the municipalities.
In his speech of yesterday afternoon the hon. member for Royal (Mr. Brooks) made some reference to the fisheries. I am not going extensively into the matter of fisheries this afternoon, but in looking through the recommendations and statements made by the government I notice that fisheries have been mentioned as one form of rehabilitation. May I point out to you, Mr. Speaker, that in so far as British Columbia is concerned I doubt whether we can take many more men into the fishing industries. We may be able to take more men, women and youths into the canning factories, but I doubt whether we can place or take care of any more men as fishermen. I say that for this reason: the quantity of fish in our waters is, after all, limited, and the more men put into the industry the smaller the return will be for the individual fisherman. However, there is one branch of the fishing industry into which we could place more men. I refer to the halibut fisheries. Under the 'provisions of the international halibut treaty the yearly allotment of the United States and Canada is something like fifty million pounds. We have never been able to take more than one-third of our share. The United States fishermen have been able to take the larger part, up to three-quarters of the amount" allotted. They can do that because they have larger and better fishing vessels which can go
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farther afield. They are better fitted' to withstand the rough seas one or two hundred miles off our shore. Canada is bearing fifty per cent of the cost of the halibut fishery commission. Is there any reason why our fishermen should not be encouraged to take their fifty per cent of the allotment?
Since 1939 some ninety large fishing vessels have been taken from the fishing industry in British Columbia for military purposes. These boats, or better ones, should be put back for the specific purpose of fishing for halibut. Everything that it is possible to do should be done to enable our fishermen to compete with United States fishermen on the halibut banks. When the Japanese were taken out of British Columbia and the fishing licences were curtailed in 1941, it was stated that the fishing industry would suffer. It may interest the house to hear actual figures, and to know what the results have been since the Japanese left the fishing industry.
There were 1,337 Japanese fishing vessels taken over from the Japanese, and sold, the money being held to the credit of the individuals concerned. In 1941 there was a total of 13,602 fishing licences in all issued in British Columbia. Of that number the Japanese held 2,080, or 15-4 per cent. In 1942-43 the number of fishing licences increased until, at the last issue, they amounted, to 15,379, an increase of 1,777. The actual picture is that 3,857 more fishermen have entered into the fishing industry since the Japanese left British Columbia. I would ask this very practical question of the C.C.F. In their rehabilitation programme will they allow the Japanese to return to the fishing industry of British Columbia? I would like to have that luestion answered. My stand is that they jhould not come back. The fishermen of British Columbia, however, should be told. They should be told whether if the C.C.F. were elected to power the Japanese would be allowed to come back into the fishing industry, because at the present time, with 15,379 licences issued, there is not a decent living for many more.


Clarence Gillis: The hon. member said a moment ago that the British Columbia legislature had instituted a reconstruction committee report, of all parties?


Thomas Reid: Yes.


Clarence Gillis: Did they make a recommendation?


Thomas Reid: In the book I have before me, they might have; but in the report I have not seen it. I want to be fair, and say that they might have. However, I have not seen

any. In the report of the post-war rehabilitation council, the members of which are named, I could not find any recommendation regarding fishermen.


Clarence Gillis: That is the body which should make a decision, because it is a British Columbia matter.


Thomas Reid: The issuing of licences is not a British Columbia matter. It is not the provincial government which will make the decision; it is the people of British Columbia who will make it when the proper time comes. However, I want a statement in that connection, because I do not want the people to be misled. When they vote they should know what they are voting for.
I see my time is going on, and I shall proceed with my closing observations. In connection with rehabilitation I would say that first consideration must be given our fighting men; for without their sacrifice no rehabilitation or social security would be possible for us. While plans are being laid now to rehabilitate the men and women in our active forces after the war, and likewise to provide employment and other social measures for our citizens generally, much more thought will have to be given to world conditions than has been given to them by our people. Social security cannot be assured us unless we can be assured of a reasonable and lasting peace following the end of this war; and there can be no national security in a policy of isolation. One of the great problems facing the allies now, aside from the winning of the war, is how we can prevent another blood bath in the future; for the winning of the war may not bring peace.
For the past few years statements have been made throughout Canada about the danger of winning the war and losing the peace. While what is meant by losing the peace is open to many interpretations, to my mind one danger facing us is that owing to careless thinking on our part, or to not thinking at all, we may lose what freedom there is left. To many people, thinking is hard work. History can show many examples of peoples who have lost their liberty because they were too lazy to think out for themselves the problems that all free peoples must solve if they are to continue free. To my mind dangerous fires are being lighted in the minds of the people these days, fires which may Hare up and consume us before we fully realize what it is all about.
Underneath a lot of the loose talk uttered to-day the real issue is not readily seen. That real issue is not so much economic as it is philosophic. The real issue is whether we

Department of Reconstruction
should trust to the state supreme power over our lives. Never let us forget that our fathers found out long ago that complete power over our lives could not be trusted to anyone, 'no matter how wise or how virtuous a king or even a government might be. Men preferred to live their own lives; and so there was devised a society with power of its own to resist the government. If ever the state obtains complete mastery of our lives, freedom will be gone for ever. Once a single power, whether the state, the capitalist, the labour unions or any other group, undertakes to run our lives according to a certain plan and to guarantee by that plan to produce certain results, then it can brook no interference; for if the plan fails the rulers lose either their jobs or their lives.
It must not be inferred from what I say in this regard that I am advocating that we must not have new rules to prevent greed and the exploitation of the great masses of our people. New rules will have to be provided-yes, and enforced-so as to ensure a fuller and better life for all our citizens. In doing so, however, let us be very careful that we do not throw away for a mess of pottage the most cherished jewel of all, namely our individual freedom. The right to live one's own life, the right of free speech, the right to worship God in our own way-all these are a heritage which to me is priceless, and can never be compensated for by material things alone. It is as true to-day as when spoken by Christ, when he said, "Man shall not live by bread alone."


Mr. G. G. McGEER (Vancouver-Burrard):: Mr. Speaker, I rise to say a few words to-day in the debate on this bill, because I believe it brings into focus the culmination of a long series of events since the turn of the century. This happens to-be the first time any government in Canada has assumed the responsibility of setting up a department of economic direction.
The powers in the bill, which are to be vested in the minister and which are being delegated by parliament to the governor in council, vest in the new ministry a power over the economic well-being of individuals in Canada which, in itself, would have caused a revolution only a few years ago. Just what the exercise of those powers may be will be for history to disclose. But I think the acceptance of the provision for the wide powers extended to the ministry indicates that the government is well conversant not only with the seriousness of the problems which lie ahead, but also with the enormous difficulties which will attend their solution.
I for one hold the firm conviction that Canada is well provided to meet with success the post-war period, notwithstanding my belief
that the difficulties will be just as great anc just as costly as have been the problems of sustaining the economy of the nation through this period of war. There is no chart to guide us now as there was no chart to guide us when we embarked on the war in 1939.
I think some facts stand out, and here are what I consider the general broad conceptions of the main problem. Gainful employment will have to be provided for some five million Canadians, two million of whom are now engaged in the fighting services and in war industry. We have a public debt already of S14 billion, and -upon any reasonable basis of estimation this will be rising for some time to a figure much larger than that. Already we have $11 billion of national federal debt, $2 billion of provincial debt and $1 billion of municipal debt.
Do not make any mistake about the condition of our provinces and municipalities. Representatives of both have appeared before the reconstruction committee. The Hon. Mr. Garson, Premier of Manitoba, pointed out in great detail that that province will have revenues wholly inadequate to provide for a greatly expanded programme of expenditure. I am confident that while every province has gleaned something from deferred maintenance during the war and from war revenues, there is not one which under its existing revenue powers has the financial resources to hope to make up in the post-war period the deferred maintenance that has accumulated during the war years.
Those who are interested in Mr. Garson's views will find them in the evidence of the reconstruction and reestablishment committee, No. 19, page 486, June 2, 1942. On November 27, 1943, representatives of the mayors' federation of Canada appeared before the committee and stated:
The financial resources of the municipalities are wholly inadequate for any large scale postwar public works programme such as probably will be required.
That was not so after the last war. At the close of the last war the provincial and municipal governments embarked, not only upon a programme of making up deferred maintenance but upon a progressive programme of general expansion. On the other hand, the dominion government curtailed expenditures and moved toward a programme of balanced budgets with the objective of reducing the national debt.
Many people ask, and with some justification, "Are we going to move from this war into a period of illusionary prosperity and then collapse into a condition of hopeless inactivity?" There was never anything wrong with the wealth of Canada from 1930 to 1939, but
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there was something wrong with the machinery that maintained in circulation the economic power of the collective society of the people of Canada. We were told after the last war, "You have spent your money; the war has caused this debt; you have to tighten your belt and meet your obligations." No one can find much fault with that kind of honest theorizing.
Unfortunately, however, when the government stopped spending the country lost the power to expand, and all of a sudden the complete collapse of the economic structure took place. I should like to draw to the attention of the government and the minister some facts which are indicative that the financing of this war has followed closely the pattern of the financing of the last war. There are some details which vary greatly, but let me direct attention to the fact that in 1941 our total bank deposits were $1,052 million, while in 1918 they were $1,942 million. We increased our bank deposits by $842 million.
What have we done in this war? In 1938 our bank deposits were $2,498 million, and in April, 1943, they had risen to $5,297 million. Do not make any mistake about what that means. It means that the debt claim currency of this country, which was the cause of the trouble after the last war, has shown a proportionately larger increase during this war than it did in the last. That is not national currency circulating as a servant of the people; that is not currency issued in terms of public need; that is debt claim currency which is not spent into circulation as an operating medium of exchange but lent into circulation as a debt claim upon the nation to provide a monopoly. Make no mistake about what that means. If that is not changed, this system of frustrating every effort of progress, breaking down every power to move forward, all the plans, yes, all the sacrifices of this war will have been in vain.
Let me refer to another similarity. We have gone through this before and1 we are going through it again. Do not think for one moment that we. on this continent will be given any special dispensation. What will permit us to escape the consequences which have befallen the people of Europe if we make the mistakes the people of Europe have made? In 1914 our public debt load was $335 million. By 1918 it had risen to $1,191 million, an increase of $S66 million. But let me give the increase in the debt load since 1939. In 1939 we owed a debt of $4,693,000,000. On December 31, 1943, it had increased to $11,300,000,000. The increase in the federal debt in 1918 was $866,000,000, and to-day it is already $6,609,-

000,000. That debt must be serviced. Our interest charges have risen, although the rate has beeen cut, from $169,000,000 to. $304,000,000. Our interest charges at the close of the last war were less than a hundred million dollars, and yet we heard those responsible for the government of Canadian cities, those responsible for the government of our provinces and those responsible for our federal government declaring throughout the whole of the period from 1920 to 1929 that the crippling power, the all-evading restricting force upon Canadian democracy in all its services to the people lay in the fact that there were fixed charges that could not be reduced; it lay in the fact that the debt load had increased' to the point where nothing could be done without deficit budgeting, which is against sound, practical, financial economy.
What is the solution of that problem today, for it is not going to solve itself, and the men of to-morrow in our cities, in our provincial governments and in this parliament cannot escape finding a solution of this problem. I have listened) to a great many ministers of finance. But I have never heard one minister of finance who approved deficit financing. I have never heard a responsible public man declare that a nation or a province or a city or an individual could go on and maintain its or his economic security by pyramiding an ever-increasing load of interest-bearing debt. There is plenty of evidence to prove that that debt load is a menace to-day.
You see, Mr. Speaker, it is all very well to say to the people: Your debts must be paid. The moment you start regimenting your people or imposing upon them a burden of taxation, you face one of two things. You face open revolt and repudiation of the government, and at the same time you face the line of diminishing returns. We are already at that point in Canada.
I support heartily what I thought was a splendid presentation of the situation by the hon. member for Parry Sound (Mr. Slaght) the other evening. But men say: How can you reduce taxation and increase public services? How can you call upon the government to cut down its levy of taxes on the people and1 to extend its expending power to provide services and improvements which the people are demanding? And we come to that easy phrase, You cannot get something for nothing. That on the face of it seems to be reasonable. But certainly under the existing system of issuing the medium of exchange, not in terms of public need, but in terms of private gain, through a toll-gate of interest imposed by

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private monopoly, you cannot escape the disaster of overwhelming and' unpayable debt.
What is there in the way of solution? There was a time when men believed that the medium of exchange available to the people depended on the amount of money metal they could dig out of the ground. When the cycle of trade depression came around, unless you could discover a gold mine in California or Australia or perhaps the Cariboo, poverty would have to remain. As late as 1930 I heard the then- Prime Minister, of this country declare that gold is an asset necessary to our credit and that without our gold reserves our money would be valueless.
What has happened to that theory? It has gone, and gold has not lost its value. Gold plays a great part, as well as silver, in our international world to-day, and it probably will continue to play that part. But make no mistake about it, we have been released forever from the restricting powers of gold upon the volume of our internal currency, and to-day The Bank of Canada dollar, printed with a printing press upon a piece of paper, has behind it the integrity of the government, the resources of the entire nation and the intelligence of the Canadian people.
We have a means of creating a medium of exchange and putting it into circulation without accumulating an ever-increasing burden of debt. I just want to go back a little while, because what I am preaching is not new. I came to Ottawa many years ago and I laid before the banking' and commerce committee of 1934 these proposals:
The successful operation of the New Deal for humanity proposed -by the Liberal party necessitates the establishment of the administrative foundations which X outlined to the hanking and commerce committee on May 1, 1934, namely:
(1)	A national banking system controlling the issue of all currency and monetization and issue of credit transferable by cheque.
(2)	A department of taxation empowered-;to prevent excessive accumulation of currency and credit in issue;
(3)	A department of economy for the regulation and control of all internal trade, commerce and credit;
(4)	A department of -foreign trade for the development, control and regulation of international trade, commerce, currency and credit.
This plan does not involve the socialization of private finance or the wiping out of the legitimate business of the merchant banker. It can and should be confined -to the national administration of currency and public credit devoted to the financing of all public enterprise and the maintenance of an adequate stream of consumers' buying power. Under this plan the national government, working in cooperation with the provincial and municipal authorities throughout the dominion can eliminate the
disastrous costs which the private money system now imposes upon the financing of all public enterprise. We can eliminate unemployment, reestablish a rising standard of living, and advance our internal and external trade. Education may continue to iron out the social and economic inequalities which unfortunately persist. Steps to secure a greater measure of equity in the distribution of wealth may be undertaken with greater hope of success. Government will be able to function more effectively in maintaining a fairer balance between the city, agricultural and industrial communities. We do not assume t-hat the Dominion of Canada can maintain economic independence, but we do say that under this plan the government of the dominion will be able to maintain, in cooperation with -those nations who are willing and anxious to trade with us, a measure of economic security that has never been enjoyed in the past.
How much of that plan has been put in effect since 1934? All of it in some degree. The only thing lacking to give the government of Canada to-day power which every democratic government should have is the power to issue currency through its own national institution as the spending power of government.
I asserted at that time that we could not go on indifferent at the head of national government under our constitution to the financial needs and taxation powers and responsibilities of provincial and municipal governments. We found ourselves in those years in the junior branches of government hopelessly without the means of financing undertakings which would have eliminated much of the unemployment in our cities. School-teachers went unpaid. May I say that there is a great group of people throughout our national economy to-day who are underpaid, who are not receiving adequate compensation for the increase in the cost of living, or for the positions which they hold in our social and economic life, or for the services they render to the community at large.
If we are to have a peaceful period of secure progress after the war we have to meet some other problems. After the last war the number of airmen returning was comparatively small as compared with the numbers that will return in the uniform of the Royal Canadian Air Force after this war. The training they have secured and the record they have written in the skies entitle them, yes, entitle them all, to a place in the social order and economic life which will be worthy of the place they now hold. They will rightly demand a place in a nation enjoying a high state of progressive prosperity and they will not be satisfied with anything less. The men and women who will return in the uniform
Department of Reconstruction

of Canada's navy are highly trained. They nave held an important place. Do you think they are going to be willing to return to be mere hewers of wood and drawers of water? Are they to return to a life in which they may be told to-day that they can have a job and to-morrow that it is not available? So it is with the men and women of our army. They are trained to be leaders in the great forces of mechanized power. Do you think the problem of reestablishing the demobilized forces will be in any respect similar to what it was after the last war? Go through any of your modern factories; look at the people engaged there. The surroundings, the work they are doing, the wages they are receiving, are industrial conditions of the highest standards. Do you think for a moment that they will return to a standard of living such as obtained in Canada from 1930 to 1939? They will not do so. They will not be satisfied to accept it.
How then can this problem be faced? It certainly cannot be faced under the present debt claim system. It cannot be faced under a system of taxation which has already passed the line of diminishing returns and is destroying private enterprise


John Horne Blackmore: And human life.


Gerald Grattan McGeer: and private initiative. There is not any question about that.
Here is a new standard to be developed, an enormous debt to be reduced, and a condition of taxation which has already gone beyond the limits of reasonable acceptance.
That brings me to what I rose to speak on to-day, the problem of changing our banking and monetary system so that it will conform to a new order. Can we do that? Yes, Mr. Speaker, I believe we can, but I believe that it involves fundamental changes in our whole banking law. I believe that on the changes which are made in this regard depends more than anything else the success with which we shall be able to assume and fulfil the responsibilities which lie before us.
The Bank of Canada as at present formed has the power to finance our federal government by a straight issue of national currency, but it has no power to take deposits and no power to take advantage of deposits as a means of obtaining the benefit of a circulating currency or of controlling the circulation of currency. Those amendments are necessary.
A further amendment of the banking iaw is required to compel the Bank of Canada to be the financing authority for all public enterprise and to stop the chartered banks from issuing currency in the form of bank deposits as a 
substitute for Canadian money. They should be empowered to lend their own deposits and to lend their own capital; but to leave with them the power to issue a bank deposit debt claim as a substitute for currency, as a substitute for the Canadian medium of exchange, and to compel all Canadian governments and the Canadian people to be dependent upon that type of medium of exchange, is to leave us at the mercy of a private monopoly. It is because we have depended upon that kind of thing in the past that we have suffered both from inflation and from deflation, and so long as the present system continues we shall find that recurring condition, inescapable. But, you say, how is that going to help our provincial and municipal governments? I would suggest that the time has come when we should have associated with the Bank of Canada a bank in each of the provinces of the dominion, a bank which will have close association with provincial and municipal governments, working in conjunction with each other and in conjunction with the federal bank, that is, the Bank of Canada, so as to be able to provide whatever finances are necessary to sustain the provincial and municipal economy.
Would such a system as that involve us in an inflationary condition? I do not think it would; but I am sure of one thing, that it would be possible under that system to avoid the disaster of inflation in the future. We have always suffered from deflation. We have never suffered from inflation. It was the deflation in 1921 that caused the disaster; it was the deflation in 1930 that caused the disaster. Where was there ever any inflationary condition from which the people of Canada have suffered? We have never had any means available to us to lift the people out of depression other than by piling up a new load of interest-bearing debt. We have never suffered from inflation and we never shall under the present system; but we shall invariably suffer from deflation, and that is what has happened in the past.
Should a government be provided with adequate means of financing a progressive rate in the standard of living? We are told in this house to-day that the problem of financing old age pensions is something which should be carried on by the provincial governments, and because we say that the cost will be too great a burden upon our national finances we leave the old age pensioners to struggle along on a miserable pittance. Take the burden of taxation as it moves across the under-strata in every class of society, taxed below a decent standard of living to-day. The power to avoid that kind of thing is the power that modern democratic government must take

The Royal Assent
unto itself, and it must take it to itself through a sound and correct amendment of our currency laws.
We in Canada can look forward to an enormous expansion. We have a young country, the development of which is barely touched. Remarkable as it may seem, as yet we have not a single trans-Canada motor highway across the dominion. You can start at the eastern boundary line and go right through to the shores of Vancouver island, and in every part of the dominion there are millions of jobs crying to be done. Let me point out just one. Technical training is one of the great opportunities in Canada. We have built up during the war, around the national research council, a great organization that has made a splendid contribution to the war programme. Is there not an opportunity to take our national research council as it is to-day and consolidate it into a great technical training and scientific research training school to be applied to the development of our Canadian resources? There is one extension to our educational system that can be closely related to the whole development of our resources in line with the new age that is approaching. That is only one example. But none of these things will be available to us in all their full value if they are to be frustrated by a continuing and progressive load of unpayable debt with its burden of taxation and its ultimate burden of stagnation and repudiation.


THE ROYAL ASSENT
[Stage Direction]
A message was delivered by Major A. R. Thompson, Gentleman Usher of the Black Rod, as follows:
Mr. Speaker. His Honour, the deputy of His Excellency the Governor General, desires the immediate attendance of this honourable house in the chamber of the honourable the Senate.
Accordingly, the house went up to the Senate.
And having returned.
Mr. SPEAKER informed the house that the deputy of His Excellency the Governor General had been pleased to give in His Majesty's name the royal assent to the following bills.
An Act for the relief of Julia Menard Mills.
An Act for the relief of Vera Esteri Seppala Vuorimies.	.	.	,,	, ,
An Act for the relief of Violet Magdalen Johnson Overall.
An Act for the relief of Edna Lyall Burgess Lambert.	_ „
An Act for the relief of Barbara Hellen Smith Dodds.	, _	.
An Act for the relief of Ellen Margaret Doris Sheehan Decary.
An Act for the relief of Kathleen 0 Raw Major.
An Act for the relief of Vernon Oswald Marquez.	.
An Act for the relief of Wilson Allan Martin. An Act for the relief of Victoria May Larkin Kirkcaldy.	_	.
An Act for the relief of Nellie Blinkhorn Cowie.	_
An Act for the relief of Milliam Mace.
An Act for the relief of Pauline Hislop Ralph. An Act for the relief of Ethel Mary Moffatt Shaw.	,
An Act for the relief of Alfreda Elsie Hatch Carpenter.	„ _	, ,	_	,
An Act for the relief of Rachel Segal Kaparofsky.	.
An Act tor the relief of Paul Lapointe.
An Act for the relief of Vera Grace Percy
Moore.
All Act for the relief of Jean Fernand Georges Robitaille.
An Act for the relief of Marie Stella Gisele Payette MacRae.
An Act for the relief of Horace Henry Chapman.
An Act for the relief of Florence Berger Bassin.
An Act for the relief of Roland Edouard
Levert.
An Act for the relief of William Cowie.
An Act for the relief of Nita Marjorie Ham-merich Ward.
An Act for the relief of Margaret Kirsen Brown MacRae.
An Act for the relief of Margaretha Bernhard Cronauer.
An Act for the relief of Henry Rattigan.
An Act for the relief of Margaret Millar Short.
An Act for the relief of Mary Annesley Iverson.
An Act for the relief of Annie Drewniak Sonberg.
An Act for the relief of Celia Zlatkes Azeff.
An Act for the relief of Louisa O'Tool Shelley.
An Act for the relief of Miriam Schwartz Silcoff.	.
An Act respecting Gore District Mutual Fire Insurance Company.
An Act to incorporate Wesleyan Methodist Church of America in Canada.
An Act respecting a certain patent application of Claude H. Peters.
An Act respecting The New Brunswick Railway Company.
An Act for the relief of Theodore Zalopany.
An Act for the relief of Thelma Alice Warren
Whittet.	_
An Act for the relief of Ethel Sangster Muir.
An Act for the relief of Kiril John Christo.
An Act for the relief of Helaine Ethel Leopold Lax.
An	Act	for	the	relief	of	Cecil Benjamin
Pomeroy.	.
An Act for the relief of Paul Sanson White.
An Act for the relief of Mary Hope Beers Ross.
An Act for the relief of Wasyl Usypchuk, otherwise known as William Usypchuk.
An	Act	for	the	relief	of	Walter Stanley
Spencer.
An	Act	for	the	relief	of	Emma Gertrude
Groves Morris.
An Act for the relief of Gertrude Margaret Amy Ogilvie.
An Act for the relief of Myrtle Josephine Teel Odell.	,,	.	.	,An	Act	for	the	relief	of	Marjorie Helen
Parker Leduc.
[Stage Direction]
The Royal Assent
[Stage Direction]
An	Act	for	the	reIief	of	Margaret Derrv
Kirby.
An	Act	for	the	relief	of	George Thomas
Bragger.
An	Act	for	the	relief	of	Freda Watson
JN orman Daniels.
A" for the relief of Iris Mabel Dash Wilkinson.
An	Act	for	the	relief	of	Thomas Henry
Dwyer.
An	Act	for	the	relief	of	Elsie Margaret
Ormandy Henderson.
All	Act	for	the	relief	of	Arthur Charles
Duffy.
An Act for the relief of Kathleen Edna Ellis Wainwright.
An Act for the relief of Diana Lenore Carsley Tenenhouse.
An Act for the relief of Charlotte Muriel Wright.
An Act for the relief of Sarah Carmichael Hay Johnston.
An Act for the relief of Margaret Georgina Isabel Townsend Mansfield.
An Act for the relief of Pasquale Di Guglielmo.
An Act for the relief of Theodora B. Ostlund Fruitier.
An	Act	for	the	relief	of	Erna	Warthold
Langlois.
An	Act	for	the	relief	of	Ruth	Steinwold
Lauer.
An	Act	for	the	relief	of	George Hodgson
Fisher.
An	Act	for	the	relief	of	Molly	Gurevitch
Gladman.
An Act to incorporate Fundy Air Lines.
An Act to incorporate The Executive Board of The Canada Conference of The Evangelical Lutheran Augustana Synod of North America.
An Act to authorize the provision of moneys to meet certain capital expenditures made and capital indebtedness incurred by the Canadian National Railways System during the calendar year 1944, and to authorize the guarantee by His Majesty of certain securities to be issued by tlie Canadian National Railway Company.
An Act to amend The War Appropriation (United Nations Mutual Aid) Act, 1943, and for granting to His Majesty aid for the purposes of the said Act.
An Act for granting to His Majesty aid for National Defence and Security.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.

[Stage Direction]
The house resumed consideration of the motion of Mr. Mackenzie King for the second reading of bill No. 82, to establish a Department of Reconstruction.
Mr. E. G. HANSELL (Macleod):: Mr. Speaker, I have no desire to detain the house any longer than is necessary for me to make

a few remarks on this bill to set up a Department of Reconstruction. At the outset may I say that I do not believe I have ever before experienced such a tense house as I experienced this afternoon, when the Prime Minister (Mr. Mackenzie King) gave his official statement respecting some of our men who were among those who had been shot in Germany as they attempted to escape. Every heart here seemed to be hushed as we thought of it. I may say, too, that I think all hon. members agree with the Prime Minister when he says that such action should not be allowed to go by without punishment eventually being meted out to those who are responsible.' I trust, too, that that punishment will be a penalty to fit the crime.
Some of us have boys in this war; some of us have lost sons in this war; some of us have sons who are prisoners of war, while others have sons who are facing the enemy on the seas, on the battle field and in the skies. Those brave lads who were shot gave up their lives for their country, and I trust that their sacrifice shall not have been in vain.
If the present administration are sincere in setting up this new Department of Reconstruction and at the present time I have no reason to believe they are otherwise-and if they put their hands to the task and really attempt to bring about a new order in Canada which will give all men their security, and at the same time retain for all men their individual freedom, they will then have done something worthy of the sacrifices made by those young men.	.
The term "reconstruction" is something of a misnomer in Canada, because it appears to me that one cannot reconstruct something that is not broken down. So far as Canada is concerned-and the Prime Minister recognized this in his speech on the bill the other day-we have suffered no bombings. Our entire country is still intact. Our industries have already been built up. It will be a matter of transferring Canada from a war-time industrial nation to a peace-time nation. So far as reconstruction is concerned, I must say that I do not see what there is to reconstruct.
I believe, however, there is a great job we need to do. When I think of reconstruction I am wondering if the Prime Minister and his government are not a little bit behind the times. I can recall when as early as 1935 a certain well-honoured gentleman arose in this country and, recognizing that some reconstruction had to be done in those days of depression, brought into existence what was known as a reconstruction party. I believe that was the time when we had need to recognize that something was wrong in Canada. That was the

Department of Reconstruction
time when this government, the one now in office, should have set its hand to the task of making Canada what it ought to have been.
I know a good deal of reference has been made in this debate to the past. Hon. members, particularly those on the government side, have said, "Oh, well, that is all in the past; we do not want to know about that. We want to know about the future." But I am at a loss to know, and particularly as I analysed the speech of the Prime Minister, what there is he hopes to get in the future that he could not have had in the past. There must be some reason for reconstruction.
The strange thing about it is-and I suppose it is quite explainable-that there have come from all quarters of the country, and I suppose from other countries which have found themselves in similar circumstances, the recognition of a need for reconstruction. We have boards of trade; we have chambers of commerce; we have industrialists; we have committees of the House of Commons and of the government. Why are there all these demands for reconstruction? I think I can say they have their background in the experience of the past.
While I am talking about the many plans offered for reconstruction, may I, in passing, call the government's attention' to a little book I hold in my 'hand, a book of only seventy-three pages, entitled, "A Report on Post-AVar Reconstruction Policies," and issued by the post-war policy committee of the Vancouver board of trade. I do not know if the government's attention has been brought to this book, but I would say that I have read it diligently and I declare that of all the voluminous reports I have read with respect to reconstruction I have never discovered anything containing such valuable information as does this small book. It was not issued by the Social Credit government of Alberta. It was not issued by the Social Credit party of Canada. It was not issued by the Social Credit group in the House of Commons. Rather, it was issued by a committee appointed by the Vancouver board of trade, and it does something that many post-war reconstruction reports have not done, in that it analyses the reasons for our trouble. It shows the defects that exist in our present economic and political system. It diagnoses the trouble and then prescribes the remedy. Before the submission concludes, a series of resolutions is presented for consideration. I state this in passing, because I am certain that the committee who worked hard and long on this problem-for they must have done so-have submitted something that I believe will solve Canada's problems in the post-war period.
Many reconstruction submissions which I have read dealt with certain things that Canada might do, what could be built and so on. Submissions have been made, especially to the reconstruction committee of parliament, as to the roads that could be built, the number of bridges that could be constructed, the number of irrigation schemes and what-not that could be carried out. The report of the Vancouver board of trade says nothing about that, it simply asks a fundamental question, how are you going to do these things? This report deals with a question which I have failed to see answered in any other submissions I have read so far.
I remarked a little while ago that it is strange that there are so many reports being submitted. I think the reason is to be found in the history of the past number of years, perhaps the last ten or fifteen. We all recognize that there was something wrong with what is termed to-day to be the hungry thirties. We all saw ourselves pass from a period of depression into a period of apparent prosperity. I do not know that Canada has ever had such financial prosperity as she has to-day.
People are now saying the obvious thing- it has been asked hundreds of times-"You could not find the money for peace, but you can now find it for war." I do not believe that any government from this day on will be able to offer the excuse that they do not know from -where they can get the money. If ever the question arises again, surely the people of Canada will be wise enough to know that that answer or that excuse will not hold.
There is one little observation I should like to make right here. There seems to be the unanswerable question of why we had such a period of poverty in the midst of plenty. I have never heard any politician answer that; I have never seen an answer by any professors of the old school of economics. The fact of the matter is that the bygone, orthodox financial expert has not yet answered that one question. The Prime Minister has not answered it. Upon analysing his speech I believe I can come to the conclusion that successful reconstruction depends upon whether or not we can sell our goods abroad. If my logic serves me as I think it should, my other conclusion is that the only reason why we had a depression then was that we could not sell our goods abroad. I am not making that statement; that is the conclusion I come to from what the Prime Minister seems to have said the other day. I do not believe that is the reason at all. I believe the only reason why
Department of Reconstruction

we had those hungry thirties, the only reason why we lived in poverty when abundance abounded, was that the government refused to adjust its monetary policy in order that the goods that were available could be distributed adequately to the people of this country.
It always seems strange to me that apparently we have sufficient brains in Canada to tackle almost every problem except the one of finance. The other night Lieutenant Commander Todd gave members of the House of Commons a lecture on the invasion. I could not help feeling at the time that behind that huge fleet, that huge army and that huge air force were the brains that so strategically managed the whole campaign as to have it meet with the success it did. I thought of the genius that must have been behind it all. I think it is one of the greatest wonders of history. Yet we know that this genius is not confined to those who hold the rank of admiral, general or air marshal. Surely there is some intelligence in Canada. Are we to admit that we can solve every other problem but that of the distribution of our goods and services to bring our country to a place where it will have the highest standard of living possible in this world? Surely no one will deny that we have the genius for that. Surely it must be somewhere. Surely that problem is not beyond solution.
I should like to refer to Hansard of June 20 when the Prime Minister spoke on this debate, and analyse one or two of the remarks he made and attempt to point out some of the matters which I think need a little criticism and some others which need a little clarification. As reported at page 3980 of Hansard the Prime Minister recognizes that there is an aspect of reconstruction which might be termed economic reconstruction. In referring to this type of reconstruction he said:
That has to do largely with the transforming of industry from making war supplies to making goods for human consumption and with restoring and increasing the capital equipment of the nation, together with the provision of employment for those who are being transferred from the one activity to the-other. It is in connection with this economic reconstruction that the new Department of Reconstruction of the federal government will be primarily concerned.
The only reference of the Prime Minister to economic reconstruction is in connection with the transference over to a peace-time industry that will supply goods for human consumption. There is one thing sadly lacking in what I would term to be a description of economic reconstruction. Surely, if there is anything that needs to be reconstructed in order to get a vast amount of peace-time goods to our people, it is our financial arrangement which

has never been able to do it. We have had the goods; we have the railways; we have the trucks and we have been able to get the goods right up to the retailer, but we have never been able to get them from the retailer to the larders and parlours and bedrooms of our homes. That is one thing that has been lacking in our economic system. If economic reconstruction is to mean anything, it must solve that one vital problem.
The Prime Minister is at the head of the present government, and surely what he says should be taken as having some authority as far as the Liberal administration is concerned. In all that speech there was not a single solitary stand taken or statement made as to what economic change must take place-actual economic change-actual change in monetary or fiscal policy-not a single suggestion.
I go along a little farther and here, at the top of page 3981 of Hansard the Prime Minister is dealing with markets, and repeating what he said a few days ago:
Markets must be found and retained for our greatly increased food production unless we are not to face an agricultural depression.
Then farther on he says:
First and foremost-
I want you, Mr. Speaker, to get those words.
First and foremost there is the obligation to ensure the establishment of what may be most effective in the way of world organization for peace.
Then, after saying that this comes under the Department of External Affairs he says:
Probably more than any other single question requiring attention in the post-war period will be the securing of wider markets and the extension of trade.
That may sound very well and good to the man who may not be thoroughly alert. But let me ask this question. Suppose this country is not able to gain the foreign markets that we require in order to sell our surplus goods- and no one is so foolish as to believe that every other country in the world will not be looking for the same thing, so that it will be the same old story over and over again and we shall find that foreign markets will not solve our problems for they never have before, not in this modern age, and I do not believe they ever will again-suppose we are unable to get the foreign markets we require, then what? There is absolutely no answer, Mr. Speaker. I repeat, then what? No answer.


John Horne Blackmore: From the Prime
Minister.


Ernest George Hansell: My hon. friend the member for Lethbridge says that there is no answer

Department oj Reconstruction
from the Prime Minitser. Of course, we in this group have the answer; never worry about that.


John Horne Blackmore: They will find that out after a while.


An hon. MEMBER:: When?


John Horne Blackmore: When you have
bumped your heads a little more.


Ernest George Hansell: As some one has said, if people have to suffer in the post-war world, if they have not suffered enough already, it is their God-given right to suffer more. But we do not want them to. We believe that there is a solution of this problem and that that solution is not to be found in foreign markets. I am not saying that we do not want foreign trade, but I say that there is much ado made about this foreign trade business. It seems strange, does it not, that we have to feed the world before we ourselves can eat? But that seems to be the philosophy held by a lot of people who talk so much about foreign trade.
The Prime Minister in his speech also made considerable mention of cooperation by the provinces with the federal government. I shall read this one passage from his speech as reported at page 3981 of Hansard, where he said:
In times of peace, on the other hand, rve have to strive, in carrying out any policy, to get the good will and effective cooperation of every province, as well as carrying out our own work. I hope and believe, as a result of what has happened during the past five years, and of the cooperation which the federal government has had in large measure from the provincial governments, that following conferences still to be held between the provinces and ourselves we shall be able to work out some means whereby we can, in the period after the war, secure still greater cooperation for the benefit of all.
I do not know whether I am right in reading between the lines there, but I should like to make sure to-night that the Prime Minister is not putting the responsibility for this whole post-war picture on the shoulders of the provinces. I hope he has not in mind here that if one or two provinces refuse to accept his proposals at the forthcoming dominion-provincial conference he will turn around and say: We will see what the country has to say about this. That would be an extremely good excuse for bringing the representatives of the provinces here. I trust that the Prime Minister has no such motive.
I wish to say this in connection with provincial governments. The more that power is taken away from provincial governments and put into the hands of a powerful central government, the more is power taken away
from the people. Let that be stated in unequivocal terms. The fact of the matter is that you get nearer to the people when you get out to their local governments. The more that provincial governments take responsibility away from the municipal governments, the more is power taken out of the hands of the people. I say this, too. When the hon. member for Essex East (Mr. Martin) the other night brought into the picture the Rowell-Sirois report which one or two provinces refused to accept, the tenor of his argument was that there was no cooperation. Well, why not? Simply because the Rowell-Sirois report to all intents and purposes would have placed more power in the hands of a centralized government and taken it away from the hands of the people, and one or two provinces would not bow down to that sort of thing. The strange thing about the Rowell-Sirois report, which in the end would have established more centralized power and more centralized control, is that it had every banker and every chamber of commerce behind it, and they sent out their literature and arguments to the various boards of trade which did not know what it was all about and which followed in father's footsteps. All the big chain newspapers were for the Rowell-Sirois report and all the big industrialists and, without mentioning any names, a good many politicians were also for it. I say that if this government at the forthcoming dominion-provincial conference attempts to take power away from the provinces, this group is going to stand by the provinces in their argument to retain their power for the reason that their power is more abundantly the people's power.
Let me ask this question. I do not suppose I shall get an answer but it does not make any difference. The central government, namely the government here at Ottawa, have complete control of our monetary system; at any rate they are supposed to have; no other government has it. Am I to be told that this government will not receive the cooperation of the provincial governments if it says to them, "We will see that you get all the money necessary to make financially possible what is physically possible and desirable in your province"? If the government said that, does anybody believe that the provinces would not cooperate? Certainly they would; there is no doubt about that. It is all a question of whether the dominion government is willing- I a.m not going to say "able"-to make financially possible that which is physically possible.
The other evening, while the Prime Minister was speaking, the hon. member for Lethbridge (Mr. Blackmore) interrupted him-
Department of Reconstruction

rightly so, I believe-by asking him where he was to get the money; was he to get it without increasing our debt? I am not going to enter at this time into all the Prime Minister's argument; but I ask him if, some time when he goes home and cannot sleep very well at night, he will turn to page 3987 of Hansard and analyse his answer. He went all the way round but he never touched the question. Finally he wound up his explanation by talking about a man having a family and, of course, he would need a home, and of course the home would have to be furnished, and so on. But is that a new condition which has suddenly come upon the scene of this world's economy? It seems to me that that has always been the case. Was it not so in the hungry thirties; was it not even so in the days of those two renowned people known as Adam and Eve? Is this part of a new idea? Is this part of the new order? I should like him to read what he said. I quote from Hansard, at page 3988:
That is the way progress is made, through demands which arise from conditions of peace and prosperity;-
Let me ask him, how can a man make a demand if he has not the money? I know the Prime Minister has studied this subject, and I am positive he knows there is never enough money coming out of industry to buy back all the goods it produces. The Prime Minister continued:
-and where you get demands of the kind which lead to the fuller employment of labour I do not think my hon. friend need fear about the increase of the public debt or taxation. . . .
Imagine that! The only answer is, "My hon. friend does not need to fear." Well, I say to-night that here is one who does fear that if we are not going to change our monetary policy, if we leave it to business, to industry- all well and good in its place-to sell its goods when people have not got the money to buy goods, we shall go back once again into the hungry thirties. But, oh no, the answer is. "Don't fear, my boy, don't fear; everything is all right; everything is going to be under control."
One other thing I should like to say here.
I do not know whether the Prime Minister intended this as a promise or not, but he said, as reported at page 3988 of Hansard:
* * I believe the nation can go ahead with the great work of construction and reconstruction and at the same time reduce its taxation and reduce its debt.
He added:
That at least is what I would hope to do if this government is in office when that period comes.
I do not know whether that is an election promise, but I am going to mark that page for reference when I come back here in the postwar period-and I shall come back.


Humphrey Mitchell: The hon. member is just bragging now.


Ernest George Hansell: I say that I shall be here if the Prime Minister is.


Mr. CASTLEDEN:: You are working together, eh?


Mr. GRANT:: Do you intend to turn
Liberal?


Mr. JOHNSTON (Bow River):: Who will? I have not found any in my part of the country; there are no such animals out there.


Ernest George Hansell: Since I wish to refer to one or two other things and I have only a minute or two to spare, I must hurry along.
As I have looked over these speeches I declare that the speech made by the hon. member for Jasper-Edson (Mr. Kuhl) has not yet been answered by his critics. Two or three hon. members have referred to it, but they have not given him an answer. What did the hon. member for Essex East say? I turn to page 4015 of Hansard-.
I am satisfied that no longer will our people go and receive a dole without at the same time receiving work for which they will be remunerated. Our people will not want to subscribe to the doctrine of the hon. member for Jasper-Edson.
The hon. member for Jasper-Edison never advocated any relief roll or what was commonly known in the relief days as a " dole."' What he recommended was a reduction in the hours of labour and a national dividend to make up the purchasing power which was always lacking to buy back our production. When the hon. member for Essex East assumes to say what " our people will not want," is he speaking for our people? How does he know? He must be one of those three tailors of Tooley Street whose manifesto began, "We, the people of England." I want hon. members to get the logic of this:
Our people believe in the dignity of work They do not want to be idle.
Who said they want to be idle?


Thomas Vincent Grant: The hon. member for Jasper-Edson (Mr. Kuhl).


Ernest George Hansell: He never did. What we believe, and what the hon. member for Jasper-Edson said, is that work by compulsion from anyone at the top is something which takes away man's freedom, and that with the advent

Department of Reconstruction
of technological skill the hours of labour could be reduced by scientific methods to four hours a day. The hon. member for Brant (Mr. Wood) asked, " How would I milk all my cows in four hours?" Can you imagine the logic of that?


George Hugh Castleden: How does he do it now?


Ernest George Hansell: If he wants to work more than four hours that is his affair. We do not care if he pulls-


Some hon. MEMBERS:: Oh, oh.


Ernest George Hansell: I am sure hon. members do not mind if he milks cows all night if he wants to. We are not going to object to it.


George Hugh Castleden: Five hundred pulls for one cent.


Ernest George Hansell: I see that my time is
exhausted.


Some hon. MEMBERS:: Go ahead.


Ernest George Hansell: I was only going to say this, that anything that is done to the people of Canada by compulsion from anyone else at all is the absolute antithesis of a Christian democracy. When man was created he was endowed with freedom of will to choose; and every satanic system which has been brought about since the old boy entered upon the stage has contained1 some device to take that freedom away from him.


Charles Edward Johnston: Even the Liberal party.


Ernest George Hansell: The only way to retain
that freedom among men is for them to be able to choose to work at the work they want to do, and to be free to refuse work if conditions are undesirable. The man himself should be able to decide that, and if he wants to turn his talent to the writing of a concerto or the painting of a picture, then he should be free to do so. Compulsion brought to bear upon anyone by any other person is satanic. If it is natural compulsion it is different; but if it is compulsion exercised by any human individual over another it is satanic and I care not whether it is done by Liberals, Progressive Conservatives, the C.C.F. or Tim Buckism. If it is done it is satanic. A glorious Christian democracy is that which gives mankind the blessings the Creator has bestowed upon them and at the same time gives them absolute freedom. I thank you, Mr. Speaker, for your patience.


Norman Jaques: I
should like to associate myself with the ideas expressed by the speaker who has just taken
his seat (Mr. Hansell) and with the observations of the hon. member for Jasper-Edson (Mr. Kuhl). I have listened to this debate and to the other discussions on reconstruction and to what is called the new order, and all that it amounts to, so far as I can see, is that everybody is to be put to work. If there is anything new in work, I do not know what it is. Surely work is the oldest order in the world. But when the state undertakes to put everyone to work that is new; it is state socialism, and it does not matter whether it originates on that side of the house or in that corner of the house. It is state socialism just the same and you are all going the same road.
The hon. member for Essex East (Mr. Martin), referring to the hon. member for Jasper-Edson, made this statement:
Our people will not want to subscribe to the doctrine of the hon. member for Jasper-Edson.
. . . Our people believe in the dignity of work.
Exactly. Well, is there any dignity in slavery? Is there any dignity in work performed by a man who is compelled to work, unless from natural causes? If there is, then surely slavery was the noblest institution we have witnessed, and the slave was the noblest of mankind. We know, however, it is not so. Natural dictatorship and the struggle against it is an ennobling thing; nobody denies that. But the Almighty, or Providence, has permitted mankind through science and so forth, to make it possible to lift the burden of a struggle for mere existence from the backs of mankind. And when human beings step in and presume to take the place of the Almighty and to say to men, "You shall work or starve," that is dictatorship and it does not matter whether it is called Liberalism, Progressive-Conservatism, C.C.F.ism or Tim Buckism. It is all the same and it all originates from the same idea, or philosophy. What differentiates not only our group but our movement throughout the world, particularly in the British empire, the movement known as social credit? It is this. We believe in voluntary effort. We believe that the time has come when it is no longer necessary to impose a struggle upon everyone for the bare necessities of life. That has been solved. Struggle there must be, but the struggle should be lifted to a higher plane than the mere struggle for existence. We have always advocated dividends for all and that has been ridiculed. First of all, the question was raised, where would the money come from? Well, at the present time over fifty per cent of the production of this country and of our allies is being given-I say given because it is given in the form of munitions-to Germany
Department oj Reconstruction

and our other enemies. That is a national or if you prefer, an international dividend. We ask nothing in exchange. As a consequence of that, even though the cream of the nation is either in uniform or in munition factories, while essential retail goods and the necessities of life are being produced by the very young and the very old, in spite of that fact, and that we are giving away over fifty per cent of our production, right out of the country, the present standard of living in Canada is higher t-han ever before.
I know there are certain inconveniences and restrictions, but I think I am right in saying that, if you average Canada right through, the present standard of living is higher than it ever was before. Certainly it is a great deal higher than it was for the ten years preceding the war. The reason for that is surely obvious. The problem of marketing has been solved. There is no trouble about marketing and therefore there is no trouble about producing. And if you solve the problem of consumption you automatically solve the problem of production. I might say, in passing, that the paying of a dividend is not new. Not only is the idea of it not new, but as an actual fact it is not new. I have here a book entitled, "Monetary Experiments", by Richard A. Lester, and in a foreword by Professor Kemmerer the following appears:
This study is one of a series being published under the auspices of the international finance section of the Department of Economics and oocial Institutions in Princeton university.
This book is published under the auspices of the university of Princeton, and in the chapter headed, "Social Dividend in Maryland", I read:
When Maryland first issued paper money in 1/33 most of it was given away-a certain sum to each inhabitant over fifteen years of age. This was done in order that the'paper money might be "the more useful to the inhabitants" and its circulation might be "as speedy and diffusive as possible." The legislature hoped means remove the difficulties under which the inhabitants had long laboured." In a sense this was a sort of "social dividend" similar to that advocated by Major C. H. Douglas in his books on social credit.
At the end of the chapter there are a few words which sum up the experiment, and they are as follows:
From his detailed study of forty-five years of money in Maryland, Professor Gould concludes: "Considering the peculiar benefits to grain and tobacco culture, the conveniences offered to trade, and the faithful redemption of every shilling at face value, it is hardly too much to say that this was the most successful *paper money issued by any of the colonies."
It can be seen that the national dividend is not even new; this was done before and it
fMr. Jaques.]
was a great success. To those who, like the hon. member for Essex East and others, have been so fond of saying that it would demoralize and pauperize the people, I would say that it was the recipients of that dividend who a few years afterwards fought and won the war of independence.
I shall now quote a few lines from Douglas himself. He has this to say on state socialism:
State socialism is based on the premise that, firstly, the control of policy is resident in administration, and, secondly, that it is possible to "socially" control administration, and thirdly, that the state should be able to supply economic pressure to the individual: whereas X suggest to you that the control of policy is resident in credit, and its financial derivations, of which money is one, while administration is a technical and expert matter not susceptible of .being socialized, and, lastly, that the only possible method by which the highest civilization can be reached is to make it impossible for either the state or any other body to apply economic pressure to any individual.
That is the reason for the dividend. It should be obvious to any thinking person that the world is coming to the parting of the ways. People speak of a new order. We believe in a new order. A new order should mean individual freedom. After centuries of struggle we have won political freedom but the world has not yet won individual economic freedom. The only offer that I have any knowledge of from any other movement but our own is this: People are being offered economic security at the price of individual freedom. That is what they are being offered. That is what they were offered and received in Germany, Russia and Italy. That is what they are being offered to-day not only in Canada but throughout the British empire. The so-called new order is state socialism. It is based, not on individual freedom as it should be, but on collective security at the price of individual freedom.
Quite recently the hon. member for Jasper-Edson was criticized for a statement he made about the leisure state. We well know that there is no room for a leisure state in war time. That is one of the reasons why war is hell. There is no leisure. But surely after the war is over and when the worst of the damage of the war and the waste of war have been repaired we should look to the ideal of a new order, and that should be toward a leisure state and not a work state ; that is, work for the sake of working. Major Douglas has this to say on that subject:
The more the maintenance of life can be shifted from the backs of men on to the backs of machines, the more important it is to find a creative outlet for the human energy released, and the more certain is it that a considerable portion of this energy will, without compulsion.

Department oj Reconstruction
be devoted to the improvement of the industrial machines. That is to say, that if a practical policy based on these considerations be pursued there will be a fall in the man-hours required for routine or operating work, and a consequent rise in the man-hours available for design and research work. The industrial machine is a lever continuously being lengthened by progress which enables the burden of Atlas to be lifted with ever-increasing ease. As the number of men required to work the lever decreases, so the number of men set free to lengthen it increases.
I shall read one more quotation from Major Douglas on the leisure state. It is as follows:
If w-e assume that the constant effort to reduce the amount of labour per unit of production are justified, and we recognize the unquestionable fact that the genuine consumption capacity of the individual is limited, we must recognize that the world, whether consciously or not, is working towards the leisure state. The production system under this conception would be required to produce those goods and services which the consumer desires of it with a minimum and probably decreasing amount or human labour. Production, and still more the activities which are commonly referred to as business, would of necessity cease to -be the major interest of life and would, as has happened to so many biological activities, be relegated to a position of minor importance.
This movement of social credit is a great deal more than a mere method of finance. Monetary reform is not enough. Social credit is a philosophy of life, and the financial part of it is merely the means to gain the ends of the policy. The basic philosophy of social credit is freedom for the individual. ^ There are only two methods of production in the world-there can only be two-compulsion and persuasion. So far, the world has been more or less under persuasion. If there has been compulsion it has been imposed by Providence, by God or by Nature, whichever you prefer. But that has been overcome, and now we are threatened with production by compulsion-a compulsion imposed, not by nature, but by individuals who have assumed powers which, rightly, belong only to the Almighty. That is, in my opinion, the essence of all dictatorships.
We propose that everybody should be guaranteed-every man, woman and child-at least the necessities of life, whether they work or not. I do not mean to say that this would apply, of course, in war time and probably for some time after the war; but it is an ideal to guide us. All work would be voluntary, and that would be a noble thing. As I said before, I see nothing noble in being compelled by the state to work at a task which one must accept or starve. That condition is all right when it is imposed by nature. But that condition we have overcome ; the problem is no longer one of production. As every speaker has said, consciously or otherwise, the problem is to market, to sell, if you like, or to distribute what we now can produce in such large quantities.
Therefore there is no longer any reason why all work should not be put on a voluntary basis. We could begin, of course, by lowering the age for pensions, and increasing the amounts. Perhaps we could raise the age for the education of youth. We could shorten the working time at both ends. The ideal should be toward a leisure state, with work freely done and not imposed by a dictator.
I hope hon. members will not deliberately distort what is said by members in this group.
I suppose there is not a member in the house who has a family who does not regard it as his duty-and rightly so-to leave his family as financially independent as possible. I am sure that would be the first care and the first instinct of every father and mother in the house. If that is right, then surely that is the very best thing we can desire for our own children. Therefore, in the long run, it must be the very best thing for all children, and all people.
Of course it has never been possible, so long as the world was in a state of real scarcity. But in this day and age, when as a result of the war we shall have immensely increased our powers of production, the problem will not be one of production but, as has been said so often, one of markets. Some say that we shall have to give away to foreign countries a great portion of our production, through a favourable balance of trade and foreign lending-which is the same thing as giving.
I believe that charity begins at home; and if it is necessary-and I am sure it is-to give away part of our production, because there is no other way of getting rid of it, then I contend that we should set a good example in our own country and pay ourselves some dividends. If we did that, it would not be long before the world would follow our example.


Mr. D. KING HAZEN (St. John-Albert):: Mr. Speaker, the word "reconstruction" is given a wide meaning in the interpretation section of the bill. It includes every undertaking by dominion, provincial or municipal authority or by any corporation or other person that may contribute to the reorganization of industry, in order to provide maximum production and full employment during and following the change-over from war-time production of industry to peace-time production.
I should like to take the opportunity this definition affords me to bring to the attention of the house very briefly a matter which I
Department of .Reconstruction

believe is of importance, if some of our reconstruction and interprovincial problems are to be considered and dealt with intelligently. It has to do with the lack of reliable information available respecting trade between the provinces.
If I were to ask the bureau of statistics for figures showing the trade between New Brunswick and Saskatchewan, or between any one province and any other province, the information would not be available. The bureau of statistics does not have such information. It seems to me it is important that such records should be kept, if we are to have a true picture of interprovincial business. Unless we have those records, it is impossible intelligently to study and discuss some of the economic problems and reconstruction problems which will arise after the war. Until such information is available we shall be travelling in the dark, and it will be impossible for us to obtain a true picture of Canada's interprovincial business. I am informed that this information could be obtained by the bureau of statistics and that it would not be difficult to obtain, although it would involve an additional expenditure of about $10,000 a year.
On April 7, 1926, the governor in council appointed Sir Andrew Rae Duncan, the Hon. W. B. Wallace, then judge of the county court of district No. 1, in the province of Nova Scotia, and Professor Cyrus Macmillan, Master of Arts and Doctor of Philosophy of McGill university, to be commissioners under the Inquiries Act for the purpose of conducting an inquiry into the conditions and claims of the people of the maritime provinces and to make such specific recommendations as in the opinion of the commissioners would result in affording relief from the conditions complained of. Mr. F. Maclure Sclanders, commissioner of the Saint John board of trade, acted as secretary of the commission.
The commission's report is dated September 23, 1926, and in it the commissioners urged that a system of statistics should be made regularly available from as early a date as possible on the1 trade of the maritime provinces with other provinces and with foreign markets as well. Section 39 of the report deals with this matter, and I should like to read the first and third paragraphs thereof. The first paragraph reads:
We have had brought before us the lack of any comprehensive measurement of the trade of the maritime provinces with other provinces and with foreign markets. We were ourselves disappointed not to be able to pursue investigations on trade matters along lines which such statistics would have enabled us to do. We found on inquiry at the dominion bureau of [Mr. Hazen.l
statistics that consideration had been given some time ago to this very subject but, mainly through lack of organization in the statistics relating to certain phases of transportation, it was not possible to proceed with the plans that had been formulated. We strongly urge that these difficulties should be overcome, -as they can be, and that on this phase of internal trade a system of statistics should be made regularly available from as early a date -as possible.
The third paragraph reads:
With regard to -the general function of the bureau of statistics, we venture to draw attention to the .importance of providing a comprehensive statistical organization in a country situated as is Canada with a -series of provinces differing often in economic outlook. Very considerable progress has already been made in this direction, but we feel the bureau could be increased in efficiency by being given improved facilities for the kind of organization it is necessary to develop as an independent central agency covering the activities of all departments -from the statistical side.
It has been, suggested that the reason why this recommendation was not put into force was that representatives in the house from Ontario and Quebec objected because it would show the trade among the -provinces to be in their favour. I do not consider that is the real reason, because I have always found members of the house from Ontario and Quebec ready and willing to give a sympathetic hearing to the other provinces in order to endeavour to find a solution of their difficulties.
Until statistics on this trade are obtainable we shall be travelling in the dark. It is not possible for us to obtain a true picture of our interprovincial affairs or to make an intelligent study of them until these figures are made available to us. I ask the government to implement this provision of the Duncan report and to take steps to see that statistics of trade between the different provinces are made available.
Mr. A. R. ADAMSON 1 (York-West): Mr. Speaker, I have listened with a great deal of interest to this debate with regard to the setting up of a Department of Reconstruction. The more I have heard, the more it has become apparent to me that reconstruction is largely an engineering problem. I happen to be an engineer, and -perhaps I can take some of the time of the house to express a few views which are diametrically opposed to some of those expressed by my hon. friends to my extreme left.
The definition of an engineer has been given as a man who can do something for a dollar which it would cost two or three dollars to have done by somebody else. If an engineer is given enough time, enough money and enough men he can do practically anything. Chauncey Depew has said that, given those

Department oj Reconstruction
three things, he could build a railroad to the north pole. Many of the plans that have been discussed in this house and have received publicity in the public press more or less fall into the category of building a railroad to the north pole. They seem to be very fine in debate and they look all right on paper; but having lived all over the world, having made my living in several countries besides Canada, perhaps I may be excused when I say that a great deal of what has been said is impracticable.
I am going to deal directly with the financial set-up, which has been mentioned in this house at considerable length. If we look at the beginning of chaos in the world we shall see that the first inevitable step toward this war started with the so-called managed currencies. We have the statement of Sir John Anderson in England that the beginning of Great Britain's chaos was with the adoption of the gold standard. That, I submit, is wholly inaccurate. With all due respect to Sir John Anderson, I take issue with him. England returned to the gold standard on the basis of the pre-war price of $20.67 an ounce, with a tremendously inflated currency and a tremendously inflated national debt. To say that that was a return to the gold standard is technically correct, but actually it was a return to an exchange standard between paper currency and metal which could not work because the paper was so tremendously inflated. That is the situation with regard to the adoption of the gold standard in England. Let us see what happened.
Despite everything that has been said, we in this country depend, whether anybody likes it or not, for our prosperity upon international trade, and when the war is over we shall depend for our prosperity a great deal more upon international trade. One fundamental about international trade, particularly forward trade, is that the buyer and the seller can deal in a standard whose value will remain constant when the contract is carried out. Throughout the centuries that has been the fundamental rule of success in international trade. Nothing has altered; nothing will alter.
We see that to-day we have a managed currency. All currencies are managed, fictitiously managed, with relation to the price of gold. In the United States they will purchase gold but not sell it at $35 an ounce, but on the free gold market both in Alexandria and in Bombay gold to-day sells for somewhat over $70 an ounce. The house may consider this an academic question but it is far from it. It means that the great bulk of the people with whom we shall have to trade, the great centres of population which are in the orient still have
hard currencies. They believe and throughout years of bitter strife they have found it true that gold is the one thing they can trust to and to-day, despite the fact that large sums of United States currency are circulating in the orient through the American troops, United States currency is at a very great discount and the Americans have had to resort, so I understand, to two types of currency known as the blue seal and the yellow seal.
The pound sterling is an internal currency except in the controlled parts of the sterling block to-day. Its value outside England is extremely variable. Special invasion currency was issued for the attack in Normandy. I mention this because the United States dollar and the pound sterling are to-day, in the minds of the great centres of population in the orient, losing their intrinsic value because they are not convertible into a metallic base. Those are the facts. We may or may not like them. But all history shows that experiment after experiment has been made in fiat money from the time of Marcus Aurelius right down to the present day and it has inevitably brought chaos.
I mention this, Mr. Speaker, because I have lived in two countries where managed currency led to inflation, where I saw great poverty and tremendous distress caused by the printing press. One of those countries was Germany and the other Brazil. One of them after the last war was poverty-stricken; or the Germans said they were. The other country was Brazil, rich in natural resources. Both suffered from inflation, and the people, the workers, w'ere the ones who suffered. I want to make that very clear because I have experienced inflation in those two countries and I know what it means.
It is said that the Americans have or had a hoard of gold which would never be of any use to them. But in the last three months the United States treasury has lost in the neighbourhood of $166,000,000 of gold for external purposes, and that despite the imports and the purchases she has made from Canada and other gold-producing countries which sell to the United States. Furthermore, their gold currency coverage which was over ninety per cent a year ago has dropped to slightly over sixty per cent and it may now be less than that. That is what is happening to the American gold. The American gold is one of the most useful assets the United States has ever had, as was our gold at the beginning of the war, as was admitted by Mr. Graham Towers, who said that Canada's gold saved Canada's bacon in the first year of the war.
Department of Reconstruction

We talk about divorcing ourselves from managed currency and having the printed dollar. If I thought it would work, I would advocate it.


John Horne Blackmore: Is it working in Canada? There is not a dollar of gold behind our money.


Mr. ADAMSON:: We have no international payments at the present time. I have experienced personally the results of the printing press and because of this bitter experience I am speaking in this house to-night.


Walter Frederick Kuhl: The printing presses ran wild in the countries you are speaking of.


Agar Rodney Adamson: I have seen the printing press start off quietly with just a little inflation. I saw this happen in Brazil. It did not run wild. It happened first with regard to the sale of some securities to build a railway. They found it was easy, and they liked it. It started off quietly, but then in a little while the milreis dropped from thirty-two cents to about six cents and no government could stop its descent. Unemployment became a serious problem and poverty, strikes and eventually a revolution followed the resort to the printing press. I saw that; I experienced it, and it is because I saw it happen in a rich country like Brazil, a country full of natural resources, that I am speaking here to-night. It is one of the most dangerous philosophies that we could accept here in Canada.


Walter Frederick Kuhl: There is such a thing as the right amount.


Agar Rodney Adamson: They thought they were going to have the right amount. Everybody thinks they are going to get the right amount, but I have yet to know of a case where they stopped at the right point.


Norman Jaques: Well, you could not fight a war on that principle; at any rate you could not win a war on it.


Agar Rodney Adamson: I have brought this up, as I said before, because this debate has taken a turn toward finance. As an engineer I have seen what happens to my profession; I have seen what happens to construction, housing and the like when the people of the country lose faith in the currency of their country; and they will lose faith again just as soon as we begin to print money without security. Bad money drives out good.


Walter Frederick Kuhl: You see what happened under
deflation.


Agar Rodney Adamson: That is the issue which faces us to-day. In considering all these plans, excellent though most of them are, we

must remember that our future depends upon the development of the natural resources of this country and the increase of our trade. We cannot live by any specious theory of finance. That was not the way by which the pioneers of Canada built up this country'; and we are to-day, because of the peculiar idea that we can live on the state, headed either for state socialism or chaos.
Mr. HARRY R. JACKMAN (Rosedale): Mr. Speaker, in rising to support the bill by which the Department of Reconstruction will be set up, I cannot be certain, nor do I suppose any hon. member can be absolutely certain whether it will have any great usefulness. It may result in merely a fact-collection agency; and its usefulness or otherwise cannot be foretold in advance of the events which will follow upon victory in this war.
Nevertheless, this Department of Reconstruction may perform a useful purpose, and with that possibility in view I am glad to support it and to advance certain suggestions to which I think the Prime Minister (Mr. Mackenzie King) might give consideration.
It may well be that when victory is assured to us we shall find that our job will not be to provide work for people; on the other hand it may be a job for the government to put a damper on an incipient boom. We have, stored up in the hands of the people, a tremendous amount of savings, much of which cannot be spent at the present time because there are not civilian goods on which to spend them, and we shall see what will be the result, when the war is over, of this great unleashed amount of money which is available for consumer goods. It is, however, well to be in readiness in case there is unemployment and it is necessary to stimulate production and consumption in this country, and it may, therefore, be that the Department of Reconstruction will have a useful and important purpose to serve. In any event, the readjustment and rehabilitation will not be automatic, even if the natural demand for workers is sufficient to absorb all those who are willing to offer their services in the industrial and agricultural and mining fields of this country. However, that natural demand, if it is sufficiently great to absorb them all, is not likely to be facilitated or expedited by the setting up of this department. There is bound to be a time lag between the rehabilitation and the demobilization of the men and women from our forces and from our industries before they are placed in civilian goods industries.
As I understand it, it is not the policy of the present government to create jobs, either through public works or other expenditures

Department oj Reconstruction
of public moneys, if the natural working of the economic system is sufficient to give our people employment. One does not know whether the ministry of reconstruction will become a. mere repository and exchange of information having to do with jobs, or whether it may have a general overriding power over other departments of the government which are specifically charged with carrying on certain projects. It will undoubtedly face a delicate position, because it will have a great deal to do, if it does have any function to perform at all, with other departments of the government and also with departments of provincial governments.
For example, the Department of Reconstruction would undoubtedly know about the amount of money and the amount of manpower involved in government projects of one kind or another. It would also likely know of the amount of money and manpower involved in the major private undertakings throughout the country. But I do not see how it could possibly know of the millions of private projects which will be undertaken by our citizens, whether they be the building of homes or the purchase of durable articles. That information, which is of the greatest importance, cannot be known or even estimated with any reasonable degree of accuracy by a department of reconstruction, and to some extent, perhaps to a very large extent, that deficiency will vitiate the work of the department itself. How is the department to know how individuals are going to spend their money? Will they spend it on homes or on autos, on taking out a new insurance policy or on a vacation, or will they, because of lack of confidence in the immediate future after the war, decide to hold whatever cash or victory bonds they have and refuse to spend their savings and thus take that money out of circulation?
What I should like to emphasize particularly is that the government should indicate what is to be the driving or motivating force in our workaday life in the post-war period, what is to be the machinery which, as they say makes the clock tick. Are we to have government direction and regimentation, being told what to do and unwilling to do more than our assigned tasks because there is no reward or incentive to do more than the minimum? Or are we to operate as free men under rules and regulations which are imposed by the government but which will guarantee opportunity and fairness to all our people? The answer to that problem strikes at the great question which confronts us all, as to whether we are to have a socialist state
in Canada, or whether we shall operate under the system of free enterprise and individual initiative.
To-day the market is provided by the government for all our agricultural and industrial production. The government pays the whole bill and provides the incentive through paying whatever is necessary to produce the goods. There is little regard to cost, as we see by the evidence in the war expenditures committee, where some shipyards produce a 10,000-ton freighter at one price and others at a higher price. The important thing in fighting a war is to get production. Costs mean little and profits or earnings less. You must produce the goods in order to win the war, and whatever consequences fall in the wake of that must be considered in the later period and not while the fighting is going on.
Fortunately, the financial and economic system has been strong enough to stand the strain to date, and although we live and learn, speaking in terms perhaps of years, we do not know how much longer the system can stand the strain which is at present imposed upon it with the steadily mounting debt and the charges and other regulations attendant thereon. If we do not have a regimented, totalitarian state, then we shall have a free economy where every man will be his own master, able to choose the vocation or job which he wishes. May I point out particularly to the house that the greatest stumbling block to a return to the system of free economy is the present taxation and fiscal policy of the country. No better means could have been devised to bring about a socialist state than the present taxation policies of Canada, and if they are continued there is no question that free enterprise and initiative will expire.
At the outbreak of the war, taxation was used as the instrument to stifle civilian production, which was literally choked off. Certainly there should not be an increase in civilian production brought to the market to any greater extent than will enable our people to live in a reasonable degree of comfort. Certainly there should be no increase in standards. Wages were stabilized in civilian industries but certainly not in war plants, where workers were doing jobs at higher rates and war plants were attracting workers from ordinary fields of industry. We have only to look at the aircraft industry to find a typical example of the process. That was all to the good. But the reverse situation will obtain in the post-war period. No longer do we want to strangle civilian production. On the contrary, we want to cancel all war production and to turn all our man-power to production
Department of Reconstruction

for civilian use. We shall turn from production to kill to production to live. It is, therefore, logical that we should reverse the process which we adopted at the outbreak of the war whereby we raised taxes to prohibitive levels, particularly on business, and to a large extent on individuals also.
Unless that is done, initiative and the motivating force which we have always had in a system of free economy will be lost to us and we shall lose that freedom which so many of us prize. At the present time the minimum tax on business is forty per cent; if that business earns more than the average earnings during the 1936-1939 period, the tax is 100 per cent; then whatever is left after that may be distributed to the shareholders, and they are taxed in their particular brackets at anywhere from thirty per cent to ninety-eight per cent. So that it does not take more than simple arithmetic to realize that there is no possible incentive for one to engage in business or to expand, or even for an individual who is not in business or corporation brackets to earn more money, because the brackets are so high that it is not worth the extra effort.
We find that not only in the upper brackets, whether they are connected with the war effort or not, is it no longer profitable to do this, but workers in the factories do not find it profitable to work the sixth day because that puts them in the higher brackets for the whole week's wages and there is so little left of the sixth day's wages that it is not worth while working. The consequence is that the nation loses production, and the Department of National Revenue -loses what it might otherwise have obtained had the taxation been more reasonable.
It may be that such a system is necessary- I will not say that it is, but this is not the place to debate the question-during a period of war, but certainly during peace time and during the great conversion period after the war we must not have such conditions obtaining. There is nothing more important for the Prime Minister to announce than the government's intention with regard to post-war taxation; for the power to tax is the power to destroy, and that is what is happening as far as civilian production, particularly new production, is concerned. And rightly so, at the present time, because we have a war to carry on and we do not want more goods for civilian use. But companies as well as individuals must know whether they will be compensated for the risk they have to undertake and the enterprise and management they must contribute in the post-war period, and particularly is this so of new businesses.

Some government officials have left the impression that it would be their recommendation that taxes after the war should be substantially reduced. We are all aware that the treasury will need revenue in the post-war period, but it would be foolish to kill the goose that lays the golden eggs. People must know where they stand in the matter of taxation. While the question is important to all, it is of the greatest importance to those who are engaged in business to provide leadership through which jobs are created. Canadian citizens not government departments are going to do the major planning in this country, and it is time to think now of the deciding factor of post-war taxation; otherwise there is no use in having government commissions and boards and other public bodies set up to decide how much work can be created, how many jobs can be provided, how much capital expansion there may be. What we need is a clear chart so that business will know whether it can undertake new things and whether there is sufficient incentive for them, because unless there is some compensation for the risk involved there is not likely to be much go ahead; the green light is not likely to come on as far as business is concerned.
It is not necessary to bring to the attention of the house this fact, that not only does a nation perish without vision but that without leadership the nation is lost. We must, therefore, provide a chart whereby leaders in business and industry can guide their future plans, and a fair and equitable taxation policy applicable to the post-war period should be announced immediately. Let us know what our ascertainable post-war expenditures are likely to be. Let us know the over-all picture of social welfare costs. Inasmuch as it is in our power to provide it, let us give the people what they want and what they need. But it is also our duty to tell-them what the cost is and how that cost is to be borne by our people. Reconstruction means reemployment and job creation. That is what the people want, not doles and hand-outs, even if it is their own money. Let us provide a fair day's wage for a fair day's work. Public ownership may well be desirable in some instances, but where there is room for competition and development let not the government become a limiting monopoly. For example, in the air transport field we find the present government-excluding any likely competition even when the whole world is our oyster and there is plenty of room for not only the government line but for a number of competitors in what is likely to prove one of the greatest and fastest expanding fields of transportation.

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anything about money, but I do know that the municipalities in British Columbia cannot possibly take their proper share in the reconstruction programme unless they get assistance from the federal treasury.
Another thing in which I do not agree with the Prime Minister is that he has not much fear, as I understood him the other day, of the immediate six months following the peace. Personally I think that the first six months following the peace are going to present a very serious problem. Possibly I am looking at it from the soldier's point of view. I do not think you are going to be able to keep the men in the army after the war. The men will look after that themselves. The desire of every soldier will be to get home as quickly as he can and to get out of uniform, with thfe possible exception of the air force. These men are going to be thrown on to the labour market immediately after peace is declared. They will have a certain amount of deferred pay, which was an excellent idea on the part of the department, and a certain amount of savings. But I hope that every young soldier coming back from the war will not make the same mistake that I made and that the Prime Minister and the Minister of Pensions and National Health (Mr. Mackenzie) made. I waited twenty years after the war before I got married. I hope these young soldiers will get married immediately, but I do not know how far their savings will carry them if they get married unless we have concrete plans ready for their employment when they return. So far as I know, no concrete plans have been made by the government and no blue-prints prepared to put these men to work immediately after peace is declared. If peace were declared next week, the federal government, so far as I know, has no plans complete as yet to put these men and women immediately to work. We have had a wonderful reconstruction committee which has studied and submitted various plans.
I will tell you how we do it in British Columbia. The government of the day in British Columbia set up a committee, not of the government, but of the legislature, and that committee toured every little district in the province and got ideas from the Canadian Legion, from boards of trade, women's institutes, municipalities, and every other organization they could think of, as well as from individuals. I want to tell you that I am proud of the fact that I come from the province of British Columbia because within one week after peace is declared the British Columbia government can call for contracts for $10,000,000 worth of constructive work. That is a wonderful record. I want hon.
gentlemen to mark that. I do not know how it is in the other provinces, and I am not criticizing them. So far as I know the federal government has no plans ready with which they can proceed to put men to work immediately after peace is declared. They have suggested various ideas-public buildings, waterways, railway expansion, and so on. But I repeat that British Columbia, through its Department of Public Works and other departments, has blueprints already prepared and estimates already made so that within one week after peace is declared they can call for tenders of $10,000,000 of constructive work. I think that that is the attitude which the federal government should adopt. I may be wrong; the federal government may have its plans ready, but if they are ready, this house has never been told about any concrete plans.
There is another matter. But first I had better continue with the Prime Minister, because there are some other things on which I do not agree with him, and if you are going to disagree I think it is a good idea' to disagree from the top down, starting with your leader. I am not going to speak in a sobbing voice and then stab him in the back unless I decide to move across the floor on the same day.
One thing in which I am particularly interested so far as the soldiers are concerned is farming. I should like to quote what was said by the chairman of the reconstruction committee, the man who I think is most intimately connected with the reconstruction programme next to the Prime Minister himself. We are very glad that he comes from British Columbia. He and his committee have done an excellent job, and I am sorry that the chairman is not here to-day. He happens to be in hospital, and I know that I speak for every member when I wish him a speedy recovery. I quote in part what he said with respect to food at page 3994 of Hansard of June 20 of this year:
In this respect we welcome the conclusion arising from the united nations food conference that never again-
I repeat that.
-that never again will food ;be destroyed simply because people have not enough money to.buy it.
That is from the chairman of the reconstruction committee. I point that out because I want to speak of it in connection with the Veterans' Land Act. Coming from the chairman of the committee it may be presumed that he was speaking for the government. What notice are we giving to the boys overseas with respect to this matter at the present time? Are we telling them that we in this parliament are not going to permit the

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destruction of food in this country? Hon. members will recall that the great president of the country to the south made probably the only mistake he has ever made in his leadership when he allowed brood sows to be destroyed. Brazil also destroyed coffee. Here we state through the chairman of the reconstruction committee that never again will food be destroyed simply for lack of money. Actually what do we find in Canada to-day? We in parliament are not supreme. What is going on in Manitoba? I quote this from the Winnipeg Tribune:	"Growers plough under
Manitoba Strawberries." I quote this because the soldiers of Manitoba will scarcely think us sincere in our plans for reconstruction, particularly as regards agriculture, when they see that we permit a few bureaucrats to allow this sort of thing to go on. There is a picture in this same paper of strawberries being ploughed under by a tractor, and under the picture is this:
Goodbye, Strawberries: Strawberry growers near Winnipeg are ploughing under their strawberries, as Aleida Daman, 18, daughter of Peter Daman, St. Vital grower, is doing in this picture. The prices board set too low a ceiling for berries, they say, and growers see no sense in paying labour $4.50 a day to keep the bushes in shape.
That must be an extensive piece of ground to have a tractor ploughing under this food. This paper is going to the soldiers of Manitoba who are over there in Italy and on the shores of France. Yet at the same time we are telling them we shall never let the lack of money cause the destruction of food. It will take more explanation from the government than I have heard yet to convince the boys over there that that policy is being carried out when they see food being destroyed in this way.
The reason I refer to this matter particularly is that in British Columbia we have some 750 Japanese farms which were all producing berry farms before we seized them-no, we did not seize them; we were too generous; we bought them out. We are holding these farms for soldiers when they come back. What will our soldiers in Italy or on the shores of France think of our Veterans' Land Act when in British Columbia out of 171 farms 121 have been allowed to go to wrack and ruin, and the people on the remainder axe producing at a loss to-day simply because of the dictates of the almighty dollar, orthodox finance and the war prices board?
We estimate that we have over 300,000 acres of land now surveyed and available, and on which soil analyses have been taken. The provincial government are prepared to grant

a million acres of land to the men who are coming back. But all we are going to allow a man who wants to go on the land is $4,800 to buy a farm and $1,200 for the purchase of stock to equip that farm. I took the trouble to inquire of every organization in the riding which I represent, and they agree without exception that the figure is, to say the least, conservative. It will cost at least $175 an acre to purchase land; the average tax amounts to $4 an acre; yet we expect a man to settle on a farm, raise a family, clothe and educate them, with no more capital than $4,800 for his land and $1,200 for his stock and equipment. I know that many hon. members are not farmers, but there is no need to be a farmer to know that you cannot possibly buy enough stock and equipment for $1,200 to run a farm, repay the capital, pay taxes, feed and clothe a family. It simply cannot be done; yet that is what we are holding out to these returning soldiers under the Veterans' Land Act. Go to any soldier organization that I know of, and the first thing you will find them discussing is this particular bill, which they regard as almost entirely unsatisfactory and inappropriate to the needs of the present day and age. Yet we send literature to the soldiers telling them how much we are going to do for them.
I disagree with an hon. member from one of the Montreal ridings who expressed the opinion yesterday that there is not much hope of placing many of our returning veterans on the land. Land has always been and always will be a safeguard in our economy. I believe there is a tremendous opportunity to put men back on the land. We cannot continue all these factories, no matter what they desire to manufacture; but we can produce in the vast expanses of Canada to an unlimited extent if agriculture is given parity prices. I admit that I might find it difficult to give a correct definition of that term, but I believe that parity prices .must be provided for in legislation as applicable to farm products. Every bit of legislation the government has brought forward-and we are proud of what has been done-affects the farmer. He is absolutely dependent upon what the floor price is; and if the floor price is to be set, not by members of parliament representing all parts of Canada and all the political parties, but by some economist in the Bank of Canada or a small town lawyer on some of these boards, you are not going to get real parity prices, I can assure you of that.
The original definition of parity prices is to be found in the United States Agricultural Adjustment Act of 1933, the object of which was " to establish prices to farmers at a level

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that would give agricultural commodities purchasing power with respect to articles farmers buy equivalent to the purchasing power of agricultural commodities in the base period." That is not in effect in Canada to-day. Anyone familiar with agriculture knows that it is not in effect. Of course agriculture is on a sounder basis than it was in previous years. With the general prosperity enjoyed in Canada at the present time it is bound to be, but what the farmer fears more than anything else is that there will be a collapse of these prices. We have the assurance in the speech from the throne that floor prices will be set, but what I am particularly interested in is, who is going to set them? If it is we in parliament who are to set them, I shall not be worried so much, but if they are to be set by a board with no knowledge of conditions across Canada, and particularly of local conditions, it is a totally different matter. It has been demonstrated in the past as far as the agricultural policy of the government is concerned that agricultural conditions all over the country are taken into consideration, and rightly so. For years other parts of Canada carried Saskatchewan and other provinces during their misfortunes, and no one objected to that. But this illustrates the fact that conditions vary across Canada and that they must be taken into consideration in setting floor prices. In many cases in the past that has not been done. I again insist that I do not care what kind of veterans' land act is brought in or what amendments are made; it is absolutely impossible for the veterans to go on these farms unless they are guaranteed a reasonable and fair price for the commodities they produce.
In connection with the farm problem I wish briefly to revert to the subject of money. Speaking in the house on June 20, the Prime Minister is reported in Hansard, page 3986, as saying in part:
Later, as forecast in the speech from the throne, there will be some tax modifications to encourage industrial conversion, and also there will be an expansion of research.
I have no particular quarrel with this proposal. If industries are not allowed to build up again, are not permitted to prepare to convert their plants to peace-time activities, we cannot put men back to work. But I do want to insist that agriculture must have exactly the same treatment. For years farmers had to do without new equipment, not only because it was not available, but because in any event they did not have the money with which to buy it. Even in the last prosperous two or three years what money they did have has been used to pay off debt, not to buy new
100-258J
equipment. Therefore the farmer is entitled to exactly the same consideration in any adjustments respecting income tax.
I hope that the budget is not quite completed. I happen to have my office on the fifth floor, and as the Minister of Finance (Mr. Usley) is located on the same floor, there is a continuous stream going and coming. I wish they would come in to me for advice in preparing the budget. I was quite flattered about something which happened yesterday. My office is in about the centre of the block. One of the most popular and esteemed members of the cabinet has his office on the fourth floor immediately below mine. Inadvertently yesterday he opened the door of my office and walked in, and he said, "Goodness, I must have opened the wrong door." I said, "No, it is all right." I will not tell you his name; it begins with a C. Coming events cast their shadows before; it may be that he came in to look over my office before I move down to his. Seriously, I hope the Prime Minister takes into consideration this important fact that agriculture is just as much entitled as any other industry to money for reconversion. The farmer is in the same position as the industrialist'. He needs new binders, new tractors, other new equipment, and he should have the same consideration in so far as income tax is concerned.
There is one thing to which, I think, not enough attention has been paid. I want to congratulate the leader of the opposition (Mr. Gray don), who made, I thought, an excellent address yesterday. Particularly I would like to compliment the hon. member for York South (Mr. Noseworthy), who, I believe, is the only member who in the course of this discussion has touched on education, although it is a factor in reconstruction which affects the entire dominion and one in which, I think, we all should be interested. His speech last evening was very fair and very constructive. It is not often, possibly, that I can say that. I wish I could say the same for the leader of his party, who goes around and makes strange statements, probably for vote-catching purposes, about what he thinks the soldiers want. If anybody stops to think, he will know that what the expression "the Canada he left" means is that the soldier wants to get back-to the Canada he left, to peace-loving Canada, and particularly, his mother's cooking. The speech of the hon. member for York South, however, was helpful, and I congratulate him, and also the hon. member for Cape Breton South (Mr. Gillis), who is always interesting.
I do not want to take any more time, except to impress upon the government that we in
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British Columbia will not be satisfied with a dollars and cents approach to this matter. After the announcement made by the Prime Minister to-day I do not know how any member of this house or anybody else in Canada can think in terms of dollars and cents about what is to be given as a matter of right to Canadian men and women coming back from the war. Money must never be allowed to stand in the way of what we are going to do for those men and women, and I urge upon the government that representation of the soldiers and of the women serving in the forces should be considered in the setting up of these boards under the reconstruction department-above all, the women. Little has been said about the way in which we are going to deal with the women coming back to civilian life from the army and from war industry. That will be one of the greatest problems we shall have to tackle. Money will not always provide the solution so far as the women are concerned. With money you can always find work for men, but you cannot always find suitable work for women, no matter how much money you may have. I suggest therefore that the government would be well advised in the setting up of these boards to consider the representation of the women in the armed services. The government might take representatives from the women's institutes and from those serving in the armed forces, as well as representatives who will look after the interests of the men in the army.
I am a party member, but I say that if the government sincerely wishes this department to be a success, politics in any form must be kept out of it. If anything is to be kept out of the department it is politics. Irrespective of party we should initiate a programme that has been planned for the good of all and not for the advantage of the few.


Hughes Cleaver: Before addressing a few remarks to the points I intended to cover in this debate, I hope my hon. friend who just preceded me (Mr. Cruickshank) will not take offence if I attempt to give him the other side of the story in regard to the Veterans' Land Act. I wish to suggest seriously to him that he should add up the over-all benefits which the new Veterans' Land Act proposes to give to the returned man who might wish to go farming. If he does so, perhaps he will revise his views in this connection. If he will add up all the benefits, he will find that the dominion government is making a cash grant substantially close to $3,000 to every Canadian veteran fMr. Cruickshank.]
who. wants to go farming under the Veterans' Land Act.
Before discussing that, I might add that any boy who will make a good farmer will in my opinion be entirely successful if he starts with $3,000 cash assistance and when the balance of his liability carries interest at a rate of only 3^ per cent. In adding up these benefits we find the veterans' initial responsibility is to pay $480 down in cash. The government, on the other hand, makes a cash contribution of $2,320 of the purchase price, $1,120 on account of the farm and $1,200 for implements, in addition to supplying the finances. That is made up in this way. As regards stock and implements, if the fanner is successful he pays nothing for the stock and implements; that is $1,200 of the amount I have referred to. The criticism is that $1,200 is not an adequate amount to equip a farm with stock and implements. Well, I suggest that it was never the intention that $1,200 should fully equip a farm with stock and implements. The intention, as I understood it, was that it would supply a suitable foundation stock; it would supply the initial bare needs for implements, and the farmer would go on from there. In addition to these amounts, it is well recognized that farm income does not come in monthly, and so provision has been made, for the first year, for monthly payments where necessary to the farmer to maintain him. The single man will receive something like $44 a month and the married man $68, while the married man with children will receive additional allowances for the children. Adding all these benefits together, we have a total of at least $3,000 for one man if he wants to go farming, and I repeat that many farmers in this country, reasonably prosperous, think they do very well by their sons in setting them up in farming if they make a contribution anything like that.
There may be some reason for criticism on the score that the benefits that accrue with respect to a farm costing not more than $4,800 are not adequate. Another clause in the act, which is quite elastic, provides that if a farmer wishes to buy a farm in excess of that amount he is permitted to do so but he must finance the balance himself.
I am coming to the one and only criticism I have-and I would not dream of criticizing such an act without offering what in my opinion is a helpful suggestion. I think that in some parts of the country farms are at such a price that $4,800 would not buy a good up-to-date productive farm.' In that event I think the amount should be increased, but I would correspondingly increase the mortgage

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liability at 34 [DOT] per cent which the veteran assumes. With that one minor amendment,
I think the act would work well, and that is the only complaint I have received from veterans' associations in my riding with respect to the act.
In rising to take part in this debate on the second reading of the bill to provide for the setting up of a department charged with the sole responsibility of post-war reconstruction,
I do so simply to emphasize one problem which I think we shall be facing in the postwar period, and one which I think should be given a No. 1 priority. The general field has been ably covered and I do not intend to spend much time in that regard. While I agree that Canada's post-war prosperity is in part dependent upon the extent to which we are able to assist in achieving world-wide recovery, and while I agree that Canada must assume her full responsibility in that regard, and fully realize that in so far as we do have world-wide recoveiy Canada as a trading nation will participate in the benefits which flow therefrom, yet I feel just as strongly that living conditions in Canada also depend upon the way in which we treat our own local domestic problems. If our national income, whether large or small, is equitably distributed among the different classes of the population, then we shall achieve a proper distribution of goods. I do not think that happened during the depression, but I will not take time now to discuss the causes.
To be permanently prosperous I believe the country must maintain a standard of living on a par with its ability to produce goods. I think that is axiomatic, but there is just one "if," namely, if a country produces goods in excess of its own needs, in order to maintain this high standard of living I am talking about markets must be found for the excess.
As to the production surplus over and above our own consumption needs, which amounts in round figures to one-third of our total production, we should of course exchange that surplus for goods of other countries which we can use. If by foreign trade we are able to do this, we achieve our maximum prosperity. If we cannot do this by foreign trade, I suggest that under the best of management we would only reach two-thirds of our maximum . prosperity. If we do not take the necessary steps to dispose of that unexportable surplus a.nd to prevent the endless distress which follows, such as falling prices and the like, we can get into a lot of trouble. Therefore I suggest, Mr. Speaker, that until world recovery takes place to the point where we shall be able to dispose of the exportable surplus we have three options. We can either
give that exportable surplus away to needy nations; we can stop producing it, or we can store it up at fixed prices hoping to be able to sell it in the future. I do not know of any better illustration of what I am talking about than our exportable surplus of wheat.
The problem I have just outlined is one that should be studied very carefully in this country. On the one hand I do not think that we should accept the defeatist attitude and say that we have to wait until general world recovery comes about; nor on the other hand do I think we should fail to assume our responsibilities in the matter of helping to assist general world recovery. As I sard a moment ago, I am not going to discuss to-day the general problem but there is one concrete matter that I should like to bring to the attention of the government and of the - hon. members of this house. It is a post-war problem which I think will merit a No. 1 priority. We have an acute shortage of, houses in this country. Estimates differ, but reliable sources agree that when this war is over we shall have a shortage of over three hundred thousand houses. It is only right and proper that in time of war, with its consequent shortage of labour and materials, we sho'dd Ty to get along with the housing accommodation we have. We have struggled to do that, Mr. Speaker. By rental controls and the like we have done our best to get by the present emergency without any needless expenditure of either labour or materials on the building of houses. While we have been quite correct in postponing house building to meet the needs of war yet in the long run I suggest it is going to turn out to our advantage, because during the immediate post-war period this postponed consumer demand for houses will have to be met, and it will put thousands of men to work.
At the moment we can reasonably hope that the end of the war is not in the too far distant future, and I think we should immediately complete plans for post-war house building. I should like to urge that pilot or key organizations be set up now, which can be quickly expanded when the war is over, to support, and direct house building schemes. In adopting this plan of postponing the supplying of our housing needs until the war is over we have of necessity caused some real distress. To-day many people are living under almost unbearable housing conditions. To some extent this has been the cause of increasing crime, ill-health and the like. In addition to those who are in actual distress, thousands of families are daily living under the threat that their houses will be Sold over their heads and they will have to move, not knowing where they will go. People cheerfully and willingly
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sndure that sort of thing during war time. But 1 suggest to you, Mr. Speaker, that the minute this war is over the Canadian people will demand-they have a right to demand-that their proper housing needs be met.
In addition to the acute housing problem which exists at the present time, when thousands of our service men return they will marry and want homes of their own. In addition to giving the housing problem the rating which I believe it deserves, namely, No. 1 priority, I should like to urge that the government sponsor a campaign for every man to own his own home. I do not know of any better time to start than now, when we have such an acute shortage. I should like to urge that credit facilities be made available for this need on a sound business basis. The advantages of home ownership and the disadvantages of tenant occupancy are so apparent that I do not need to labour the point. In these days we hear many discussions of the relative merits of our capitalistic system and socialism. So far as I am concerned the major complaint that I have in regard to the capitalistic system is that we have too few capitalists. I would urge that every man in this country own his own home; every man should become a capitalist. This proposal is not a dream impossible of fulfilment. It is a scheme which if undertaken as a national programme could be quite easily attained in a very short time. To-day many men have to pay rent for their housing accommodation. Is there any man in this country who would not rather pay the same monthly payments on a house which he will eventually own?
Let me say something as to the down payment. We all know that practically everyone in this country is accumulating savings which I suggest in most instances will be sufficient to take care of the ten per cent down payment at the end of the war. To those who have no! been able to acquire the compulsory saving as a down payment I suggest that the new amendment to the Bank Act will meet their difficulties. The banks are going to enter actively the field of small loans repayable on a monthly basis at a reasonable rate of interest. A man desiring to own his own home would be able to acquire his down payment from, that source.
In the National Housing Act we have a well-tried instrument at hand. We do not need to create anything new to get on with this programme. Do hon. members know that since 1937, under the National Housing Act, we have built something over 25,000 houses? They are practically all owner-occupied; and while the government has participated to the extent of a twenty-five per cent contribution
(Mr. Cleaver.]
toward the cost of those houses, the act was so well thought out and has been so efficiently managed that our losses to date on the
25,000	houses are less than $5,000, or twenty cents per house. I suggest that the present act should be used for this purpose-with some amendments, or streamlined if you like-in order to bring those advantages within the reach of every working man in the country.
My first suggestion is in regard to interest rates. Interest rates should be reduced to 4| per cent, and to 4 per cent if possible. As all hon. members know, money is now available in the Dominion of Canada-that is longterm borrowing-at 3 per cent, or less. Let us take the government's contribution of 25 per cent, and figure it on a 3 per cent basis. Let us allow the loan companies 5 per cent on their 75 per cent loan content, and we have a resulting interest rate of 4| per cent. [DOT]
I suggest if we are to adopt a large building programme the lending institutions of the country may not have sufficient money to finance it on that basis, and that perhaps the government should enter the field on a 50 per cent basis with 3 per cent money. In this event, allowing the loan companies 5 per cent on their 50 per cent content, the interest rate would automatically fall to 4 per cent. With the interest rate at 4J per cent-and the Minister of Finance has announced in advance that that is what is going to happen-the monthly payments for these houses, under which a man actually acquires eventual ownership, are today less than the normal rental for houses of that type. With a possibility of a further one-half per cent reduction, one can see what the effect would be in connection with monthly payments.	[DOT]
Coming to the second recommendation, in connection with the repayment of loans, I know something about these houses built under the National Housing Act. They are well-built. I say without fear of successful contradiction that homes built under the National Housing Act standards have a useful owner-occupancy lifetime of at least forty years. I therefore suggest and urge that the amortization period should be increased from twenty to at least thirty years. That again will assist in bringing down the amounts of monthly payments. The Minister of Finance has already announced that that proposal is under discussion, and that some progress will be made. I would urge as strongly as I can that thirty years should be the minimum, where an owner requires that time to pay for his home.
My next suggested change is a new one. In the mind of each of these home owners is the constant dread, the constant worry hanging

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over his head that something may happen, possibly through illness or accident, as a result of which the breadwinner would lose his life and the widow would be left with an unbearable mortgage load. If this is to be a nation-wide scheme for every man to own his own home, then I say that in the event of his death the mortgage should be paid off and the widow should be presented with the house free from encumbrances; and that this should be paid out of an insurance fund. I am told that this type of term insurance could be acquired at moderate cost, not exceeding one dollar per home per month.
*My next suggestion deals with restraint in respect of alienation. Very serious thought should be given to this matter. So far as I am concerned, the owner of a house should be placed in the position where he could not, through bad business judgment or in any other way, lose his house. I would have the house in such a position that it will not be subject to execution levies. In addition, I think it might be wise to prevent the owner himself from selling his house, or possibly it would be well in the event of sale to freeze the selling price, or set it apart to be used only for the purchase of another house. That is only my own thought on the subject, but I offer it for what it is worth.
These five suggestions will in my opinion make the act workable and bring it within the reach of every working man in Canada. However we could not possibly succeed in reaching a point where every man would own his own home unless we were to provide for the use of existing houses already built. I suggest that an additional part be added to the housing act to make these second-hand houses, if I may so describe them, available for exactly the same purposes and on quite the same terms. I concede at once that the amortization period should not be so long-that is, it should not exceed the life of the house. In addition, money should be made available by borrowing, repayable in monthly payments, just as under Part I of the aot, to provide for necessary permanent repairs and permanent alterations to bring the existing houses up to modern condition.
If those things are done, and a nation-wide campaign is instituted, it would be almost impossible to estimate the amount of human happiness and human satisfaction which might flow therefrom.
I have commented on the urgency for the need for housing. I have commented, too, on the benefits, peace of mind and human happiness which would flow from such a plan. I have one other reason why in my opinion
housing should receive priority in connection with post-war reconstruction, and it is this: The labour content of every medium sized house is at least eighty per cent. Some members may question that percentage, but when I refer to labour content I am not referring only to the labour expended in the building of the house. I include the indirect labour- the labour content that goes into the manufacture of frames, doors, lumber, flooring, plaster, hardware, plumbing, and everything else used in construction. If one computes all that in the labour content he will reach at least eighty per cent labour content in a medium sized home. I do not know of any type of construction in which the labour content is as great. For that reason therefore I say that is one of the post-war schemes we should first adopt.
There is another feature in connection with labour content, and it is this: I do not know of any construction work in which the labour content would be so diversified, and spread out over the entire country. One might say it would be spread throughout all branches of industry. Benefits would accrue to all parts of the country.
For all these reasons I urge as strongly as I can that the present is not one day too soon to make plans and to complete the organization for the financing and the supplying of materials for the new houses we so urgently need.


Robert Wellington Mayhew: Mr. Speaker, I do not apologize for taking part in this debate in connection with the establishment of a Department of Reconstruction. I agree entirely with the hon. member for Essex East (Mr. Martin), who has said that this matter is next in importance to that of winning the war or prosecuting the war. Had I not said anything I am afraid I would have been apologizing to myself for some considerable time. I suppose when I finish my speech I will still be apologizing to myself because of having fallen far short of what I would have liked to say 'in the short time at my disposal and with my limited ability.
I have been interested in this matter from almost the start of the war. So far as I know the first committee on rehabilitation set up in Canada was one set up in British Columbia by the British Columbia branch of the Canadian Manufacturers' association. I happened to be chairman of that branch at the time. I believe that committee is still functioning and considering plans for rehabilitation and reconstruction. I remember one statement that I made at the annual meeting. I impressed upon all the manufacturers of
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British Columbia the necessity of watching their plants very closely in order that they should not run down. I emphasized the fact that obsolescence was a detriment not only *o the particular plant but to the province as a whole.
I took another step at that time in an effort to enlarge the knowledge of this subject, both in the province and throughout Canada, but this was a somewhat disappointing experience. I offered an award for the best essay on postwar rehabilitation to be written by any undergraduate in Canada. This offer was made directly to the James committee when it was first formed, and it was also passed along to the Minister of Pensions and National Health (Mr. Mackenzie) who received it very warmly. However, the universities did not seem to rise to the occasion and give this suggestion the leadership which I thought it should have received. Instead of announcing this award to their students at the close of the year, they announced it when the college term opened, and the result was that only a few participated because they had only some three or four weeks to prepare their essays.
I would be quite prepared to continue this offer for the duration of the war. I think if it had been done we would have had a young people who were more enlightened on this subject. There are many young people reaching the time of life when they might make an active study of these matters, but they have not had the opportunity. If they are prepared to make full use of my offer I am prepared to renew it at this time.
I regretted that the statement was made in the house that this department was being set up to fill a temporary need only. I think that is a mistake. It should be a department for the development of Canada not only in the transition period from war to peace but for the many years to come. The department should be available for as long as it is necessary, and I am sure that that will be for the lifetime of Canada. There is so much in this country that is yet untouched. There are tremendous possibilities for development, and I cannot see anything better than to have an all-time department. This should not be a department with just a minister, a deputy minister and a few assistants; it should be a department with a minister, a deputy minister and a staff sufficiently large that its members could be selected from all parts of Canada, thus bringing together the necessary knowledge for this particular sphere of development.
The other day we heard a splendid speech by the hon. member for Athabaska (Mr. Dechene). He told us a little-no one could

tell us all-of that great northland of which we know so little. There are over a million square miles filled with every kind of natural resource, such as minerals, forests, fisheries and oil. I am sure it will take some time fully to develop this particular district.
Speaking a few days ago the Prime Minister (Mr. Mackenzie King) mentioned another possible field of development. He referred to the creating of Ottawa as a federal district, and the possibilities of beautifying the nation's capital. He told us how it was hoped to make the other bank of the Ottawa river in Hull a thing of beauty. There should not only be a physical development of Canada; we should have cultural development as well. There are many cities besides Ottawa where similar projects could be carried out. I am one who believes that it is not a waste of money to develop cultural things. Would anyone say that money has been wasted in the construction of this grand building we are in at the present time? We could actually do with much less in the way of a building. We could talk just as much, although there might be a greater fire risk. But will anyone say that it has been a waste of money? Will anyone say that what was done on Elgin street a few years ago was a waste of money? I definitely say that it was not. We could take every city in Canada and try to make it a city beautiful as well as a city useful.
Any schoolboy will tell you that we must develop our industries to their maximum. These things are so obvious that they scarcely need mention. But the others are things which we have been overlooking. It is a change of mind that we want towards our development. Take, for instance, the city of Winnipeg, or Saskatoon, Regina, Edmonton, Vancouver; or take my own city, the city of Victoria. I do not think there is a more beautiful spot in Canada than Victoria, and regardless of what anyone else says, it is the playground and will remain the playground of Canada so far as climate is concerned. The nation could spend in the city of Victoria many millions of dollars which would be of tremendous advantage not only to the people of the city of Victoria but to the rest of Canada who would be glad to get away from the winters you have in the east. People are coming into the city of Victoria from all directions, both summer and winter. It is the only place where you can have really warm salt water bathing practically the year round. By the expenditure of a few hundred thousand dollars you could make it not only a national but an international playground to the great advantage of us all. I had no intention of

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bringing forward the claims of my own city for development. I use it just as an illustration of the possibilities that we have in Canada for just such projects.


Walter Frederick Kuhl: But we need to know where the money is coming from.


Robert Wellington Mayhew: Where the money is coming from? The Prime Minister told us the other day, and I think he is right, that the money will come for the things which the people are interested in and desire to have.


Walter Frederick Kuhl: They were interested before the war too.


Robert Wellington Mayhew: We listened to the hon. member speaking the other night, and if I remember rightly he implied that it was humiliating to work.


Walter Frederick Kuhl: I did not say any such thing.


George Alexander Cruickshank: He has never
tried it.


Robert Wellington Mayhew: If the hon. member did not say it, he implied it.


Walter Frederick Kuhl: I said that compulsory work was humiliating. I did not say voluntary, but compulsory.


Robert Wellington Mayhew: The Lord made it compulsory because He told us that we must earn our bread by the sweat of our brow. Personally I do not think you can build character in a people or in a .nation unless they have work to do.


Walter Frederick Kuhl: Voluntary work.


Robert Wellington Mayhew: Work is the fibre of achievement that makes a nation great, and you cannot have the fibre of achievement unless you have something to do and are willing to do it. That is what my hon. friend lacks.


Walter Frederick Kuhl: No.


Robert Wellington Mayhew: I was saying, Mr. Speaker, that I am anxious to see these developments take place; I emphasize this because there is not time to deal with the others, and I want if possible to get this point across.
I believe that we have to have full employment. I do not believe you can have half of your people employed and the other half unemployed. Someone has said that no man is free unless all are free, and I do not think we can be busy to the best advantage unless we are all busy. I think we could all be busy in ihe future.
In the programme which should be undertaken the matter of tempo enters. Some say that the tempo should be increased just as soon as the boys come home from overseas.
inft-259
Personally I do not think so. I believe that there will be sufficient work, more than sufficient work, for the first two or three and possibly four years after the war is over. It will be in the subsequent period that we may have to move in and find work for people to do; but this nation I think will do these things I have mentioned because they are in the end self-supporting. I want to emphasize that.
I do not think you should bring the boys home from overseas and put them to work and at the same time leave the boys that are at home without work to do, because when one man is idle, somebody else is not fully employed. Only when all are employed can all be fully employed.
I am going to make four suggestions, and then I shall conclude.
First I think the name ''Reconstruction" is a misnomer. It has come out of its association with rehabilitation. It is national construction, national planning on a long and broad scale which in my opinion is required. Rehabilitation is an entirely different matter.
I do not say that they are separable, because you cannot have rehabilitation without reconstruction. But title reconstruction would mean that this country has been, partly destroyed or that we intend to destroy it and rebuild it. There is nothing of the kind. We are to build on what we have. It is a gradual development on the basis of our imagination, and, I hope, of our courage, because I know that our ability to do it is there. I suggest that the name of this department be changed.
I suggest, too, that it be made a permanent department. I suggest that it have a large personnel, not a small one; that that large personnel be selected from all parts of Canada, and that in their planning they look towards developing not only the ribbon that runs across Canada from the Atlantic to the Pacific, but Canada as a whole.
I suggest also that the minister, whoever he may be, be appointed now. I do not think it is too early. The formation of this branch of government is very timely, and the minis

ter should be appointed now for this reason. He would be able to sit in on and give a lead to the banking and commerce committee, because finance is going to come into the programme of reconstruction, and his advice and assistance in planning for the reorganization, if that is to take place, should be of some assistance both to him and to us.
I suggest that this department be not just another department of government, but that it be "the" department of government, because upon it depends the full work of our people; on the full work of our people depends our

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national income, and on our national income depends whether or not we can carry on with our social legislation. This department is the heart and the backbone of Canada itself in action.


Thomas Reid: Mr. Speaker, most allied nations have been laying plans during the past three or four years for post-war planning and rehabilitation; but I say to you as emphatically as I can, in view of statements which are being made outside the House of Commons, that no country among the allied nations is so far ahead in plans for rehabilitation as is Canada under the present government. That statement cannot be successfully refuted. I am sorry that the leader of the Cooperative Commonwealth Federation is not in his seat this afternoon, because I intended at this time to deal with one or two statements he has made; however I will defer until later most of the things I have in mind. I think it is most unfair for an hon. member, especially one who is the leader of a party, to make statements throughout the country which, I say, are not true. For instance, he is quoted as having said a short time ago that two million jobs would have to be found for service men returning to civilian life in Canada after the war, and that not a single plan has been devised by the dominion government to meet that situation. In that utterance there are two gross misstatements of fact. The first one is that two million jobs will be needed for service men. There are not over eight hundred thousand men and women in the armed forces of Canada, and to assert publicly that two million jobs will be required for them is a kind of mathematics which is beyond me. I rather thought that people in the country from which I come knew something about mathematics and education.


Clarence Gillis: Will the hon. member permit a question?


Thomas Reid: Yes.
' Mr. GILLIS: Where did he get this statement which he alleges the leader of the C.C.F. made?


Thomas Reid: I am glad that the hon. member for Cape Breton South asked that question. For every utterance I have made in the House of Commons I have been careful to have proof. The statement I have referred to is reported in the Leader-Post of Wednesday, June 14; and may I say to the hon. member who interrupted-


Humphrey Mitchell: The Leader-Post of
Regina?


Thomas Reid: Of Regina; yes.


Clarence Gillis: It is ridiculous on the face of it.


Thomas Reid: The hon. member may say it is ridiculous, but may I say that there is something in this connection which is very strange. I do not know much about how the C.C.F. act in other provinces, but in British Columbia, from which I come, I know something of their actions, and before this session is over I shall deal with a good deal of what has gone on there. Any time that any paper in British Columbia has reported some statement against the C.C.F. or any of their leaders they rush to contradict it, but I have never seen any contradiction of this report. Are they carrying on some other policy in Saskatchewan and not repudiating things they object to?


Clarence Gillis: It is so obviously ridiculous.


Thomas Reid: I do not see how the hon. member is in a position to deny it. I might say to him, just hold your horses a little while.


Clarence Gillis: Well-


Thomas Reid: Mr. Speaker, have I to take care of myself?


George Alexander Cruickshank: You can do it,


Thomas Reid: Because if I have to, of course it is all right with me.


Clarence Gillis: If you want to make such statements, it is up to yourself.


Thomas Reid: Some statements have been made during this debate, either in the speeches or in cross-fire conversations across the floor of the house, particularly by members of the C.C.F., regarding the years of depression, 1930 to 1939. Speakers of the Cooperative Commonwealth Federation group have gibed at both the Conservative and the Liberal parties with reference to the great amount of unemployment during those years. I have been frank to admit wherever I have gone that there was a great deal of unemployment at that time, but I do not understand the reasoning of those who remind us of it, or why Canada in particular should be singled out and our form of democratic government denounced because we were not able to solve the problem during those years. No country in the world, I care not what form of government it had, solved the problem. Oh, yes; someone is going to say that all were working fully in Russia, that they were fully occupied in Germany and Italy and Japan. But if all those countries had their people at work, it was simply because they were getting ready for war. We are not a warlike country. The facts are that no country in the world solved the

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problem of unemployment during those years- neither Russia nor Germany, Italy nor Japan. Yet members of the C.C.F. go up and down the country saying that we must have a new form of democratic government, that the old parties have failed, because from 1930 to 1939 they did not solve unemployment.
The thought has just entered my mind, and it is something I have long wanted to say in this house, that I have been astonished at the attitude of a number of those who, have come to Canada from other lands and who, had they stayed in the lands they came from, would probably not have owned very much; yet with all the possible things that God could give them in this great land, they have gone around denouncing the government of Canada. I remind the house, and it seems to me a strange and significant fact, that during the years of depression, and when we were hearing so much of the progress of Russia, although
60,000	persons made application to the Canadian government to be taken back to Great Britain, no applications so far as I can learn were made by any who came from the countries of continental Europe to be returned to the country of their origin or birth.
I say, Mr. Speaker, let us have some pride in our land. When one looks over the membership of this house and recalls that some thirty-one hon. members were born outside this country and came to it from nine different countries, it seems reasonable to ask whether there is any other land which has provided the same opportunities as this great country has provided to those who have come here from abroad. One quality in the Russian people which we might well emulate is their great love of country.
While I am not suggesting that this government should adopt the policies of militarily-minded states, it is my opinion that following the conclusion of this war we shall not allow ourselves for many, many years to revert to the condition of unpreparedness in which we found ourselves prior to 1939.
One thing we all admire about Prime Minister Churchill is the great frankness of his statements. It is a splendid thing to be frank. When he was speaking in the British House of Commons on post-war rehabilitation someone reminded him that after the last war British shipowners had bought German merchant ships at a cost of little or nothing. He replied that that was perfectly true, but, he said, "We won't make that mistake again, though I expect," he said, "being human, we shall make other mistakes." I recall that because we too admit frankly, at least I do, that we did make a mistake in 1930 to 1939. But we are not going to repeat
that mistake; and when anyone goes through this country endeavouring t'o persuade the people that a new heaven or a new earth will come about if only some new type of democratic government is given an opportunity, I warn the public to be very careful before they take such statements too literally.
It is only of late that members of the C.C.F. party have admitted that trade may be at all a significant factor. Like most parties, they are keeping their ear to the ground too and moving along as they think the people want them to, so that they do not differ from any of the older parties in that political regard. That, after all, is democracy. I do not know what the future will bring forth, but if past history has been any guide to us at all it shows us this. To me at least it has proved that the nations that have gone out to trade, and to trade freely, have been the nations which have given most of this world's goods to their people, while the nations who have lived unto or within themselves have been the nations which have given the least of this world's goods to their people. That has been the history of mankind from the days of Adam to the present time, and it is my opinion that the same thing will hold good for many years to come. We must therefore pay greater attention to international trade.
This country is adapted to produce great quantities of grain, lumber, fish and agricultural products which could never be consumed at home unless we trebled our population, even though we were provided with twice the amount of food we consume at the present time. I find that the Liberal party is in pretty good company, because at the international labour conference held in Philadelphia in May last the following statement was made with regard to trade, enunciating the fact that we must take note of what is taking place in other lands:
The war against want requires to be carried on with unrelenting vigour within each nation, and by continuous and concerted international effort in which the representatives of workers and employers, enjoying equal status with those of governments, join with them in free discussions and democratic decision with a view to the promotion of the common welfare.
And this is what I ask you to note particularly. This is an outstanding resolution:
Poverty anywhere constitutes a danger to prosperity everywhere.
That is the point of view held by those of the Liberal party who are looking to the furtherance of trade, believing that we cannot remain in our shell or live unto ourselves and hope to prosper. Isolation, sir, is as dead to-day
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as the great wall of China. When one realizes that it takes only about sixty hours to travel completely round the globe, one realizes how close countries are to Qne another and that we must pay greater attention to the prosperity and well-being of other countries as well as the prosperity and well-being of our own. When we think of the brotherhood of man, we must realize that this brotherhood was not intended to be confined within the borders of any one country.
In British Columbia for many years, emanating from those belonging to the C.C.F. and emanating as well from members of the C.C.F. party in this house, there have come public utterances upholding the Dominion of New Zealand. The other day an hon. member pointed out, in answer to an interruption, that the general picture of welfare in this country was ahead of that of New Zealand. I have gone into this matter a little, and these are some of the things I find. Take the debt charges in New Zealand, for instance-and I have the debt charge translated into dollars so as to make it comparable with that of our own country. The public debt charge of this country is on an average $6S0 per head, while in New Zealand it is $1,010. Take interest charges. We have heard a great deal about interest charges and debt-free money, but there again we are still ahead of New Zealand. Interest charges in Canada amount to 2-90 per cent- and I understand even that has been reduced -whereas in New Zealand the interest charges are 3-42 per cent. We have heard a great deal about the load of debt on the Canadian people. Well, the load of interest debt in Canada works out at something like $14.65 per head, whereas in New Zealand the load of debt is $28.75. I have given the interest charges they are paying on loans, and I have given the public debt. Now, coming to taxation, this may interest hon. members. I have not time to go into it fully, but I shall be pleased on another occasion to elaborate on these matters individually. The single man in New Zealand earning $700 pays something like $53. In Canada it works out at $26, with $13 refundable. The married man with two children earning $1,500 per annum pays in Canada $49.50, with $24 refundable. In New Zealand he pays $154. This information I have obtained from the New Zealand Fear Book.


Clarence Gillis: But you are only quoting
half of it.


Thomas Reid: I am giving the full details on interest and debt, and I shall be glad to discuss the entire New Zealand situation with any hon. member of the house, because the picture gets better as it goes on.


Clarence Gillis: It is not fair to put half of
it on the record.


Thomas Reid: That is the old way of putting something across, by rising and making such statements. You are putting that in my speech; it is very cutely done but you are all wrong. It is a habit you have had for a number of years, and I would ask you to keep your seat and possess your soul in patience. I can discuss it with you in committee.


Clarence Gillis: You are insulting a sister
dominion.


Thomas Reid: I resent that. I am not insulting anyone. I am putting these facts before the house only for one purpose. It has been held up to the people of this country by the C.C.F. that if we adopted a government similar to that in New Zealand all the good things people hope for would be bestowed on the Canadian people. I am not bringing this forward for any other purpose than to answer my hon. friend. I do not wish to introduce division between sister dominions, but it is said so often by members of the C.C.F., both in British Columbia and here, that I am impelled to correct their statements and keep the record right and true. When it comes to taxation, it would appear that they soak the workers there. We in Canada place the burden of taxation where we believe it can best be borne. For in the matter of income tax they pay more in New Zealand until the sum of $10,000 per annum is reached, and thereafter it gets less, whereas in Canada it increases very greatly indeed. I could quote bond interest too, which is less in Canada. In regard to New Zealand's financial position I doubt, Mr. Speaker, had it not been for the help of Great Britain during the war, whether she would have been in as good a financial position to-day as her books would seem to indicate.
With regard to Canada and rehabilitation, may I say without fear of successful contradiction that the provision we have made for our service men is not bettered or equalled by any other country of the allied nations. There is only one thing that I believe New Zealand has done a little better than we, and that is with regard to the matter of clothing allowance. I hope that will be adjusted in Canada before very long. In the matter of treatment, pensions and hospitalization for service men, I know of no country which is doing more than we are. In saying that I do iaot want to leave the impression that we have finished or reached the ultimate in the treatment of our service men and women. I am

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merely stating the fact. If anyone has any statement to make to the contrary I shall be glad to hear it.
British Columbia is taking quite a part in the work of rehabilitation. The government of that province set up a committee composed of representatives of all parties in the assembly. The report of that committee emphasized the matter of finance. The hon. member for Fraser Valley (Mr. Cruiekshank) in his speech this afternoon touched on the subject of municipal finances. While I realize that no definite projects can be outlined at the moment, the general plans are, however, outlined, and the government of the day should as soon as possible let the cities and municipalities know what their position will be in regard to loans. If the municipalities could obtain loans at cost, say, three-quarters of one per cent, I feel sure that every city and municipality would immediately set to work to outline post-war works. Remember, Mr. Speaker, that a great deal of the burden of rehabilitation will fall on these cities and municipalities, because when a man is seeking relief, and sometimes when he is seeking employment, the first place to which he goes is the municipal council. In every recommendation presented on behalf of the government of British Columbia that one point was brought out.
I am not going to weary the house because this document is too voluminous for me to place on Hansard, but I wish to read one of the recommendations that was put before the dominion government. It is as follows:
No information seems to be available as to what procedure will be followed by the dominion government in allocating proportions of cost under any of the rehabilitation programmes where they operate to the benefit of municipalities. Naturally a programme involving one and a half million dollars is entirely beyond the capacity of most cities.
Then further:
Your committee appeared before the provincial government rehabilitation committee early this year-
That was 1943.
-presented their report, and entered into a discussion regarding some of the proposals, especially regarding the method of financing post-war schemes. We feel that until the question of finances has been settled, the whole work of all post-war committees has been futile. The provincial committee themselves have not a solution, as they in turn await the decision of the federal government on this point.
Therefore I urge upon the Prime Minister and the government the necessity of arriving at a decision as soon as practicable, and so that the municipalities, cities and provincial governments be informed as to what help they
may expect from the dominion government and what rates of interest will be charged for loans.
I would make one other proposal to the Prime Minister and to the government. Before the programme of rehabilitation starts, steps should be taken with regard to the debts owing the dominion government by provincial governments. I was looking over this matter before I came down to the chamber this afternoon, and I was surprised to find that according to the last auditor general's report the provincial governments owed the dominion government something like $313,309,016-and by the way, Saskatchewan did very well in that respect because that province was lent a considerable sum of money, according to the record; they owe the government $79,828,017. As one looks over the staggering amounts one realizes that that is one of the things that should be taken up at either the forthcoming dominion-provincial conference or as soon as possible thereafter, to see if some means can be devised for clearing up those debts which hang like a cloud over the provincial governments. The provincial governments in turn have lent large sums of money to municipalities, and those debts also hang like a cloud over the municipalities.
In his speech of yesterday afternoon the hon. member for Royal (Mr. Brooks) made some reference to the fisheries. I am not going extensively into the matter of fisheries this afternoon, but in looking through the recommendations and statements made by the government I notice that fisheries have been mentioned as one form of rehabilitation. May I point out to you, Mr. Speaker, that in so far as British Columbia is concerned I doubt whether we can take many more men into the fishing industries. We may be able to take more men, women and youths into the canning factories, but I doubt whether we can place or take care of any more men as fishermen. I say that for this reason: the quantity of fish in our waters is, after all, limited, and the more men put into the industry the smaller the return will be for the individual fisherman. However, there is one branch of the fishing industry into which we could place more men. I refer to the halibut fisheries. Under the provisions of the international halibut treaty the yearly allotment of the United States and Canada is something like fifty million pounds. We have never been able to take more than one-third of our share. The United States fishermen have been able to take the larger part, up to three-quarters of the amount allotted. They can do that because they have larger and better fishing vessels which can go
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farther afield. They are better fitted to withstand the rough seas one or two hundred miles off our shore. Canada is bearing fifty per cent of the cost of the halibut fishery commission. Is there any reason why our fishermen should not be encouraged to take their fifty per cent of the allotment?
Since 1939 some ninety large fishing vessels have been taken from the fishing industry in British Columbia for military purposes. These boats, or better ones, should be put back for the specific purpose of fishing for halibut. Everything that it is possible to do should be done to enable our fishermen to compete with United States fishermen on the halibut banks. When the Japanese were taken out of British Columbia and the fishing licences were curtailed in 1941, it was stated that the fishing industry would suffer. It may interest the house to hear actual figures, and to know what the results have been since the Japanese left the fishing industry.
There were 1,337 Japanese fishing vessels taken over from the Japanese, and sold, the money being held to the credit of the individuals concerned. In 1941 there was a total of 13,602 fishing licences in all issued in British Columbia. Of that number the Japanese held 2,080, or 15-4 per cent. In 1942-43 the number of fishing licences increased until, at the last issue, they amounted to 15,379, an increase of 1,777. The actual picture is that 3,857 more fishermen have entered into the fishing industry since the Japanese left British Columbia. I would ask this very practical question of the C.C.F. In their rehabilitation programme will they allow the Japanese to return to the fishing industry of British Columbia? I would like to have that luestion answered. My stand is that they should not come back. The fishermen of British Columbia, however, should be told. They should be told whether if the C.C.F. were elected to power the Japanese would be allowed to come back into the fishing industry, because at the present time, with 15,379 licences issued, there is not a decent living for many more.


Clarence Gillis: The hon. member said a moment ago that the British Columbia legislature had instituted a reconstruction committee report, of all parties?


Thomas Reid: Yes.


Clarence Gillis: Did they make a recommendation?


Thomas Reid: In the book I have before me, they might have; but in the report I have not seen it. I want to be fair, and say that they might have. However, I have not seen

any. In the report of the post-war rehabilitation council, the members of which are named, I could not find any recommendation regarding fishermen.


Clarence Gillis: That is the body which should make a decision, because it is a British Columbia matter.


Thomas Reid: The issuing of licences is not a British Columbia matter. It is not the provincial government which will make the decision; it is the people of British Columbia who will make it when the proper time comes. However, I want a statement in that connection, because I do not want the people to be misled. When they vote they should know what they are voting for.
I see my time is going on, and I shall proceed with my closing observations. In connection with rehabilitation I would say that first consideration must be given our fighting men; for without their sacrifice no rehabilitation or social security would be possible for us. While plans are being laid now to rehabilitate the men and women in our active forces after the war, and likewise to provide employment and other social measures for our citizens generally, much more thought will have to be given to world conditions than has been given to them by our people. Social security cannot be assured us unless we can be assured of a reasonable and lasting peace following the end of this war; and there can be no national security in a policy of isolation. One of the great problems facing the allies now, aside from the w'inning of the war, is how we can prevent another blood bath in the future; for the winning of the war may not bring peace.
For the past few years statements have been made throughout Canada about the danger of winning the war and losing the peace. While what is meant by losing the peace is open to many interpretations, to my mind one danger facing us is that owing to careless thinking on our part, or to not thinking at all, we may lose what freedom there is left. To many people, thinking is hard work. History can show many examples of peoples who have lost their liberty because they were too lazy to think out for themselves the problems that all free peoples must solve if they are to continue free. To my mind dangerous fires are being lighted in the minds of the people these days, fires w'hich may flare up and consume us before we fully realize what it is all about.
Underneath a lot of the loose talk uttered to-day the real issue is not readily seen. That real issue is not so much economic as it is philosophic. The real issue is whether we

Department oj Reconstruction
should trust to the state supreme power over our lives. Never let us forget that our fathers found out long ago that complete power over our lives could not be trusted to anyone, no matter how wise or how virtuous a king or even a government might be. Men preferred to live their own lives; and so there was devised a society with power of its own to resist the government. If ever the state obtains complete mastery of our lives, freedom will be gone for ever. Once a single power, whether the state, the capitalist, the labour unions or any other group, undertakes to run our lives according to a certain plan and to guarantee by that plan to produce certain results, then it can brook no interference; for if the plan fails the rulers lose either their jobs or their lives.
It must not be inferred from what I say in this regard that I am advocating that we must not have new rules to prevent greed and the exploitation of the great masses of our people. New rules will have to be provided-yes, and enforced-so as to ensure a fuller and better life for all our citizens. In doing so, however, let us be very careful that we do not throw away for a mess of pottage the most cherished jewel of all, namely our individual freedom. The right to live one's own life, the right of free speech, the right to worship God in our own way-all these are a heritage which to me is priceless, and can never be compensated for by material things alone. It is as true to-day as when spoken by Christ, when he said, "Man shall not live by bread alone."


Gerald Grattan McGeer: Mr. Speaker, I rise to say a few words to-day in the debate on this bill, because I believe it brings into focus the culmination of a long series of events since the turn of the century. This happens to be the first time any government in Canada has assumed the responsibility of setting up a department of economic direction.
The powers in the bill, which are to be vested in the minister and which are being delegated by parliament to the governor in council, vest in the new ministry a power over the economic well-being of individuals in Canada which, in itself, would have caused a revolution only a few years ago. Just what the exercise of those powers may be will be for history to disclose. But I think the acceptance of the provision for the wide powers extended to the ministry indicates that the government is well conversant not only with the seriousness of the problems which lie ahead, but also with the enormous difficulties which will attend their solution.
I for one hold the firm conviction that Canada is well provided to meet with success the post-war period, notwithstanding my belief
that the difficulties will be just as great anc just as costly as have been the problems ol sustaining the economy of the nation through this period of war. There is no chart to guide us now as there was no chart to guide us when we embarked on the war in 1939.
I think some facts stand out, and here are what I consider the general broad conceptions of the main problem. Gainful employment will have to be provided for some five million Canadians, two million of whom are now engaged in the fighting services and in war industry. We have a public debt already of $14 billion, and upon any reasonable basis of estimation this will be rising for some time to a figure much larger than that. Already we have $11 billion of national federal debt, $2 billion of provincial debt and $1 billion of municipal debt.
Do not make any mistake about the condition of our provinces and municipalities. Representatives of both have appeared before the reconstruction committee. The Hon. Mr. Garson, Premier of Manitoba, pointed out in great detail that that province will have revenues wholly inadequate to provide for a greatly expanded programme of expenditure. I am confident that while every province has gleaned something from deferred maintenance during the war and from war revenues, there is not one which under its existing revenue powers has the financial resources to hope to make up in the post-war period the deferred maintenance that has accumulated during the war years.
Those who are interested in Mr. Garson's views will find them in the evidence of the reconstruction and reestablishment committee, No. 19, page 486, June 2, 1942. On November 27, 1943, representatives of the mayors' federation of Canada appeared before the committee and stated:
The financial resources of the municipalities are wholly inadequate for any large scale postwar public works programme such as probably will be required.
That was not so after the last war. At the close of the last war the provincial and municipal governments embarked, not only upon a programme of making up deferred maintenance but upon a progressive programme of general expansion. On the other hand, the dominion government curtailed expenditures and moved toward a programme of balanced budgets with the objective of reducing the national debt.
Many people ask, and with some justification, "Are we going to move from this war into a period of illusionary prosperity and then collapse into a condition of hopeless inactivity?" There was never anything wrong with the wealth of Canada from 1930 to 1939, but
Department of Reconstruction

there was something wrong with the machinery that maintained in circulation the economic power of the collective society of the people of Canada. We were told after the last war, "You have spent your money; the war has caused this debt; you have to tighten your belt and meet your obligations." No one can find much fault with that kind of honest theorizing.
Unfortunately, however, when the government stopped spending the country lost the power to expand, and all of a sudden the complete collapse of the economic structure took place. I should like to draw to the attention of the government and the minister some facts which are indicative that the financing of this war has followed closely the pattern of the financing of the last war. ' There are some details which vary greatly, but let me direct attention to the fact that in 1941 our total bank deposits were $1,052 million, while in 1918 they were $1,942 million. We increased our bank deposits by SS42 million.
What have we done in this war? In 1938 our bank deposits were $2,498 million, and in April, 1943, they had risen to $5,297 million. Do not make any mistake about what that means. It means that the debt claim currency of this country, which was the cause of the trouble after the last war, has shown a proportionately larger increase during this war than it did in the last. That is not national currency circulating as a servant of the people; that is not currency issued in terms of public need; that is debt claim currency which is not spent into circulation as an operating medium of exchange but lent into circulation as a debt claim upon the nation to provide a monopoly. Make no mistake about what that means. If that is not changed, this system of frustrating every effort of progress, breaking down every power to move forward, all the plans, yes, all the sacrifices of this war will have been in vain.
Let me refer to another similarity. We have gone through this before and we are going through it again. Do not think for one moment that we on this continent will be given any special dispensation. What will permit us to escape the consequences which have befallen the people of Europe if we make the mistakes the people of Europe have made? In 1914 our public debt load was $335 million. By 1918 it had risen to $1,191 million, an increase of $S66 million. But let me give the increase in the debt load since 1939. In 1939 we owed a debt of $4,693,000,000. On December 31, 1943, it had increased to $11,300,000,000. The increase in the federal debt in 1918 was $866,000,000, and to-day it is already $6,609,-

000,000. That debt must be serviced. Our interest charges have risen, although the rate has beeen cut, from $169,000,000 to- $304,000,000. Our interest charges at the close of the last war were less than a hundred million dollars, and yet we heard those responsible for the government of Canadian cities, those responsible for the government of our provinces and those responsible for our federal government declaring throughout the whole of the period from 1920 to 1929 that the crippling power, the all-evading restricting force upon Canadian democracy in all its services to the people lay in the fact that there were fixed charges that could not be reduced; it lay in the fact that the debt load had increased to the point where nothing could be done without deficit budgeting, which is against sound, practical, financial economy.
What is the solution of that problem today, for it is not going to solve itself, and the men of to-morrow in our cities, in our provincial governments and in this parliament cannot escape finding a solution of this problem. I have listened to a great many ministers of finance. But I have never heard one minister of finance who approved deficit financing. I have never heard a responsible public man declare that a nation or a province or a city or an individual could go on and maintain its or his economic security by pyramiding an ever-increasing load of interest-bearing debt. There is plenty of evidence to prove that that debt load is a menace to-day.
You, see, Mr. Speaker, it is all very well to say to the people: Your debts must be paid. The moment you start regimenting your people or imposing upon them a burden of taxation, you face one of two things. You face open revolt and repudiation of the government, and at the same time you face the line of diminishing returns. We are already at that point in Canada.
I support heartily what I thought was a splendid presentation of the situation by the hon. member for Parry Sound (Mr. Slaght) the other evening. But men say: How can you reduce taxation and increase public services? How can you call upon the government to cut down its levy of taxes on the people and to extend its expending power to providte services and improvements which the people are demanding? And we come to that easy phrase, You cannot get something for nothing. That on the face of it seems to be reasonable. But certainly under the existing system of issuing the medium of exchange, not in terms of public need, but in terms of private gain, through a toll-gate of interest imposed by

Department of Reconstruction
private monopoly, you cannot escape the disaster of overwhelming and unpayable debt.
What is there in the way of solution? There was a time when men believed that the medium of exchange available to the people deipended on the amount of money metal they could' dig out of the ground. When the cycle of trade depression came around, unless you could discover a gold mine in California or Australia or perhaps the Cariboo, poverty would have to remain. As late as 1930 I heard the then- Prime Minister, of this country declare that gold is an asset necessary to our credit and that without our gold reserves our money would be valueless.
What has happened to that theory? It has gone, and gold has not lost its value. Gold plays a great part, as well as silver, in our international world to-day, and it probably will continue to play that part. But make no mistake about it, we have been released forever from the restricting powers of gold upon the volume of our internal currency, and to-day The Bank of Canada dollar, printed with a printing press upon a piece of paper, has behind it the integrity of the government, the resources of the entire nation and the intelligence of the Canadian people.
We have a means of creating a medium of exchange and putting it into circulation without accumulating an ever-increasing burden of debt. I just want to go back a little while, because what I am preaching is not new. I came to Ottawa many years ago and I laid before the banking and commerce committee of 1934 these proposals:
The successful operation of the New Deal for humanity proposed by the Liberal party necessitates the establishment of the administrative foundations which I outlined to the banking and commerce committee on May 1, 1934, namely:
(1)	A national banking system controlling the issue of all currency and monetization and issue of credit transferable by cheque.
(2)	A department of taxation empowered to prevent excessive accumulation of currency and credit in issue;
(3)	A department of economy for the regulation and control of all internal trade, commerce and credit;
(4)	A department of foreign trade for the development, control and regulation of international trade, commerce, currency and credit.
This plan does not involve the socialization of private finance or the wiping out of the legitimate business of the merchant banker. It can and should be confined to the national administration of currency and public credit devoted to the financing of all public enterprise and the maintenance of an adequate stream of consumers' buying power. Under this plan the national government, working in cooperation with the provincial and municipal authorities throughout the dominion can eliminate the
disastrous costs which the private money system now imposes upon the financing of all public enterprise. We can eliminate unemployment, reestablish a rising standard of living, and advance our internal and external trade. Education may continue to iron out the social and economic inequalities which unfortunately persist. Steps to secure a greater measure of equity in the distribution of wealth may be undertaken with greater hope of success. Government will be able to function more effectively in maintaining a fairer balance between the city, agricultural and industrial communities. We do not assume that the Dominion of Canada can maintain economic independence, but we do say that under this plan the government of the dominion will be able to maintain, in cooperation with those nations who are willing and anxious to trade with us, a measure of economic security that has never been enjoyed in the past.
How much of that plan has been put in effect since 1934? All of it in some degree. The only thing lacking to give the government of Canada to-day power which every democratic government should have is the power to issue currency through its own national institution as the spending power of government.
I asserted at that time that we could not go on indifferent at the head of national government under our constitution to the financial needs and taxation powers and responsibilities of provincial and municipal governments. We found ourselves in those years in the junior branches of government hopelessly without the means of financing undertakings which would have eliminated much of the unemployment in our cities. School-teachers went unpaid. May I say that there is a great group of people throughout our national economy to-day who are underpaid, who are not receiving adequate compensation for the increase in the cost of living, or for the positions which they hold in our social and economic life, or for the services they render to the community at large.
If we are to have a peaceful period of secure progress after the war we have to meet some other problems. After the last war the number of airmen returning was comparatively small as compared with the numbers that will return in the uniform of the Royal Canadian Air Force after this war. The training they have secured and the record they have written in the skies entitle them, yes, entitle them all, to a place in the social order and economic life which will be worthy of the place they now hold. They will rightly demand a place in a nation enjoying a high state of progressive prosperity and they will not be satisfied with anything less. The men and women who will return in the uniform
Department oj Reconstruction

of Canada's navy are highly trained. They nave held an important place. Do you think they are going to be willing to return to be mere hewers of wood and drawers of water? Are they to return to a life in which they may be told to-day that they can have a job and to-morrow that it is not available? So it is with the men and women of our army. They are trained to be leaders in the great forces of mechanized power. Do you think the problem of reestablishing the demobilized forces will be in any respect similar to what it was after the last war? Go through any of your modern factories; look at the people engaged there. The surroundings, the work they are doing, the wages they are receiving, are industrial conditions of the highest standards. Do you think for a moment that they will return to a standard of living such as obtained in Canada from 1930 to 1939? They will not do so. They will not be satisfied to accept it.
How then can this problem be faced? It certainly cannot be faced under the present debt claim system. It cannot be faced under a system of taxation which has already passed the line of diminishing returns and is destroying private enterprise-


John Horne Blackmore: And human life.


Gerald Grattan McGeer: 
THE ROYAL ASSENT
[Stage Direction]
A message was delivered by Major A. R. Thompson, Gentleman Usher of the Black Rod, as follows:
Mr. Speaker, His Honour, the deputy of His Excellency the Governor General, desires the immediate attendance of this honourable house in the chamber of the honourable the Senate.
Accordingly, the house went up to the Senate.
And having returned.
Mr. SPEAKER informed the house that the deputy of His Excellency the Governor General had been pleased to give in His Majesty's name the royal assent to the following bills:
An Act for the relief of Julia Menard Mills.
An Act for the relief of Vera Esteri Seppala Vuorimies.	.
An Act for the relief of Violet Magdalen Johnson Overall.
An Act for the relief of Edna Lyall Burgess Lambert.	,	„	...An Act for the relief of Barbara Hellen Smith Dodds.	,,	_	.An Act for the relief of Ellen Margaret Dons Sheehan Decary.	. „ ,,
An Act for the relief of Kathleen 0 Raw Major.
An Act for the relief of Vernon Oswald Marquez.
An Act for the relief of Wilson Allan Martin. An Act for the relief of Victoria May Larkin Kirkcaldy.
An Act for the relief of Nellie Blinkhorn Cowie.
An Act for the relief of Milliam Mace.
An Act for the relief of Pauline Hislop Ralph. An Act for the relief of Ethel Mary Molfatt Shaw.
An Act for the relief of Alfreda Elsie Hatch Carpenter.
An Act for the relief of Rachel Segal Kaparofsky.
An Act for the relief of Paul Lapointe.
An Act for the relief of Vera Grace Percy Moore.
An Act for the relief of Jean Fernand Georges Robitaille.
An Act for the relief of Marie Stella Gisele Payette MacRae.
An Act for the relief of Horace Henry Chapman.
An Act for the relief of Florence Berger Bassin.
An Act for the relief of Roland Edouard Levert.
An Act for the relief of William Cowie.
An Act for the relief of Nita Marjorie Ham-merich Ward.
An Act for the relief of Margaret Kirsen Brown MacRae.
An Act for the relief of Margaretha Bernhard Cronauer.
An Act for the relief of Henry Rattigan.
An Act for the relief of Margaret Millar Short.
An Act for the relief of Mary Annesley Iverson.
An Act for the relief of Annie Drewniak Sonberg.
An Act for the relief of Celia Zlatkes Azeff. An Act for the relief of Louisa O'Tool Shelley. An Act for the relief of Miriam Schwartz Silcoff.
An Act respecting Gore District Mutual Fire Insurance Company.
An Act to incorporate Wesleyan Methodist Church of America in Canada.
An Act respecting a certain patent application of Claude II. Peters.
An Act respecting The New Brunswick Railway Company.
An Act for the relief of Theodore Zalopany. An Act for the relief of Thelma Alice Warren Whittet.
An Act for the relief of Ethel Sangster Muir. An Act for the relief of Kiril John Christo. An Act for the relief of Helaine Ethel Leopold Lax.
An Act for the relief of Cecil Benjamin Pomeroy.
An Act for the relief of Paul Sanson White. An Act for the relief of Mary Hope Beers Ross. '
An Act for the relief of Wasyl Usypchuk, otherwise known as William Usypchuk.
An Act for the relief of Walter Stanley Spencer.
An Act for the relief of Emma Gertrude Groves Morris.
An Act for the relief of Gertrude Margaret Amy Ogilvie.
An Act for the relief of Myrtle Josephine Teel Odell.	,
An Act for the relief of Marjorie Helen Parker Leduc.
The Royal Assent
[Stage Direction]
An	Act	for	the	relief	of	Margaret Derry
Kirby.
An	Act	for	the	relief	of	George Thomas
Bragger.
An Act for the relief of Freda Watson Norman Daniels.
An Act for the relief of Iris Mabel Dash Wilkinson.
An	Act	for	the	relief	of	Thomas Henry
Dwyer.
An	Act	for	the	relief	of	Elsie Margaret
Ormandy Henderson.
An	Act	for	the	relief	of	Arthur Charles
Duffy.
An Act for the relief of Kathleen Edna Ellis Wainwright.
* An Act for the relief of Diana Lenore Carsley Tenenhouse.
An Act for the relief of Charlotte Muriel Wright.
An Act for the relief of Sarah Carmichael Hay Johnston.
An Act for the relief of Margaret Georgina Isabel Townsend Mansfield.
An Act for the relief of Pasquale Di Guglielmo.
An Act for the relief of Theodora B. Ostlund Fruitier.
An Act for the relief of Erna Warthold Langlois.
An Act for the relief of Ruth Steinwold Lauer.
An Act for the relief of George Hodgson Fisher.
An Act for the relief of Molly Gurevitch Gladman.
An Act to incorporate Fundy Air Lines.
An Act to incorporate The Executive Board of The Canada Conference of The Evangelical Lutheran Augustana Synod of North America.
An Act to authorize the provision of moneys to meet certain capital expenditures made and capital indebtedness incurred by the Canadian National Railways System during the calendar year 1944, and to authorize the guarantee by His Majesty of certain securities to be issued by the Canadian National Railway Company.
An Act to amend The War Appropriation (United Nations Mutual Aid) Act, 1943, and for granting to His Majesty aid for the purposes of the said Act.
An Act for granting to His Majesty aid for National Defence and Security.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock. RECONSTRUCTION

[Stage Direction]
The house resumed consideration of the motion of Mr. Mackenzie King for the second reading of bill No. 82, to establish a Department of Reconstruction.
Ernest George Hansell: Mr. Speaker, I have no desire to detain the house any longer than is necessary for me to make

a few remarks on this bill to set up a Department of Reconstruction. At the outset may I say that I do not believe I have ever before experienced such a tense house as I experienced this afternoon, when the Prime Minister (Mr. Mackenzie King) gave his official statement respecting some of our men who were among those who had been shot in Germany as they attempted to escape. Every heart here seemed to be hushed as we thought of it. I may say, too, that I think all hon. members agree with the Prime Minister when he says that such action should not be allowed to go by without punishment eventually- being meted out to those who are responsible. I trust, too, that that punishment will be a penalty to fit the crime.
Some of us have boys in this war; some of us have lost sons in this war; some of us have sons who are prisoners of war, while others have sons who are facing the enemy on the seas, on the battle field and in the skies. Those brave lads who were shot gave up their lives for their country, and I trust that their sacrifice shall not have been in vain.
If the present administration are sincere in setting up this new Department of Reconstruction-and at the present time I have no reason to believe they are otherwise-and if they put their hands to the task and really attempt to bring about a new order in Canada which will give all men their security, and at the same time retain for all men their individual freedom, they will then have done something worthy of the sacrifices made by those young men.
The term "reconstruction" is Something of a misnomer in Canada, because it appears to me that one cannot reconstruct something that is not broken down. So far as Canada is concerned-and the Prime Minister recognized'this in his speech on the bill the other day-we have suffered no bombings. Our entire country is still intact. Our industries have already been built up. It will be a matter of transferring Canada from a war-time industrial nation to a peace-time nation. So far as reconstruction is concerned, I must say that I do not see what there is to reconstruct.	_
I believe, however, there is a great job we need to do. When I think of reconstruction I am wondering if the Prime Minister and his government are not a little bit behind the times. I can recall when as early as 1935 a certain well-honoured gentleman arose in this country and, recognizing that some reconstruction hadi to be done in those days of depression, brought into existence what was known as a reconstruction party. I believe that was the time when we had need to recognize that something was wrong in Canada. That was the

Department of Reconstruction
time when1 this government, the one now in office, should have set its hand to the task of making Canada what it ought to have been.
I know a good deal of reference has been made in this debate to the past. Hon. members, particularly those on the government side, have said, "Oh, well, that is all in the past; we do not want to know about that. We want to know about the future." But I am at a loss to know, and particularly as I analysed the speech of the Prime Minister, what there is he hopes to get in the future that he could not have had in the past. There must be some reason for reconstruction.
The strange thing about it is-and I suppose it is quite explainable-that there have come from all quarters of the country, and I suppose from other countries which have found themselves in similar circumstances, the recognition of a need for reconstruction. We have boards of trade; we have chambers of commerce; we have industrialists; we have committees of the House of Commons and of the government. Why are there all these demands for reconstruction!? I think I can say they have their background in the experience of the past.
While I am talking about the. many plans offered for reconstruction, may I, in passing, call the government's attention to a little book I hold in my hand, a book of only seventy-three pages, entitled, "A Report on Post-War Reconstruction Policies," and issued by the post-war policy committee of the Vancouver board of trade. I do not know if the government's attention has been brought to this book, but I would say that I have read it diligently and I declare that of all the voluminous reports I have read with respect to reconstruction I have never discovered anything containing such valuable information as does this small book. It was not issued by the Social Credit government of Alberta. It -was not issued by the Social Credit party of Canada. It was not issued by the Social Credit group in the House of Commons. Rather, it was issued by a committee appointed by the Vancouver board of trade, and it does something that many post-war reconstruction reports have not done, in that it analyses the reasons for our trouble. It shows the defects [DOT] that exist in our present economic and political system. It diagnoses the trouble and then prescribes the remedy. Before the submission concludes, a series of resolutions is presented for consideration. I state this in passing, because I am certain that the committee who worked hard and long on this problem-for they must have done so-have submitted something that I believe will solve Canada's problems in the post-war period.
Many reconstruction submissions which I have read dealt with certain things that Canada might do, what could be built and so on. Submissions have been made, especially to the reconstruction committee of parliament, as to the roads that could be built, the number of bridges that could be constructed, the number of irrigation schemes and what-not that could be carried out. The report of the Vancouver board of trade says ' nothing about that, it simply asks a fundamental question, how are you going to do these things? This report deals with a question which I have failed to see answered in any other submissions I have read so far.
I remarked a little while ago that it is strange that there are so many reports being submitted. I think the reason is to be found in the history of the past number of years, perhaps the last ten or fifteen. We all recognize that there was something wrong with what is termed to-day to be the hungry thirties. We all saw ourselves pass from a period of depression into a period of apparent prosperity. I do not know that Canada has ever had such financial prosperity as she has to-day.
People are now saying the obvious thing- it has been asked hundreds of times-"You could not find the money for peace, but you can now find it for war." I do not believe that any government from this day on will be able to offer the excuse that they do not Iqjow from where they can get the money. If ever the question arises again, surely the people of Canada will be wise enough to know that that answer or that excuse will not hold.
There is one little observation I should like to make right here. There seems to be the unanswerable question of why we had such a period of poverty in the midst of plenty. I have never heard any politician answer that; I have never seen an answer by any professors of the old school of economics. The fact of the matter is that the bygone, orthodox financial expert has not yet answered that one question. The Prime Minister has not answered it. Upon analysing his speech I believe I can come to the conclusion that successful reconstruction depends upon whether or not we can sell our goods abroad. If my logic serves me as I think it should, my other conclusion is that the only reason why we had a depression then was that we could not sell our goods abroad. I am not making that statement; that is the conclusion I come to from what the Prime Minister seems to have said the other day. I do not believe that is the reason at all. I believe the only reason why
Department of Reconstruction

we had those hungry thirties, the only reason why we lived in poverty when abundance abounded, was that the government refused to adjust its monetary policy in order that the goods that were available could be distributed adequately to the people of this country.
It always seems strange to me that apparently we have sufficient brains in Canada to tackle almost every problem except the one of finance. The other night Lieutenant Commander Todd gave members of the House of Commons a lecture on the invasion. I could not help feeling at the time that behind that huge fleet, that huge army and that huge air force were the brains that so strategically managed the whole campaign as to have it meet with the success it did. I thought of the genius that must have been behind it all. I think it is one of the greatest wonders of history. Yet we know that this genius is not confined to those who hold the rank of admiral, general or air marshal. Surely there is some intelligence in Canada. Are we to admit that we can solve every other problem but that of the distribution of our goods and services to bring our country to a place where it will have the highest standard of living possible in this world? Surely no one will deny that we have the genius for that. Surely it must be somewhere. Surely that problem is not beyond solution.
I should like to refer to Hansard of June 20 when the Prime Minister spoke on this debate, and analyse one or two of the remarks he made and attempt to point out some of the matters which I think need a little criticism and some others which need a little clarification. As reported at page 3980 of Hansard the Prime Minister recognizes that there is an aspect of reconstruction which might be termed economic reconstruction. In referring to this type of reconstruction he said:
That has to do largely with the transforming of industry from malcing war supplies to making goods for human consumption and with restoring and increasing the capital equipment of the nation, together with the provision of employment for those who are being transferred from the one activity to the other. It is in connection with this economic reconstruction that the new Department of Reconstruction of the federal government will be primarily concerned.
The only reference of the Prime Minister to economic reconstruction is in connection with the transference over to a peace-time industry that will supply goods for human consumption. There is one thing sadly lacking in what I would term to be a description of economic reconstruction. Surely, if there is anything that needs to be reconstructed in order to get a vast amount of peace-time goods to our people, it is our financial arrangement which

has never been able to do it. We have had the goods; we have the railways; we have the trucks and we have been able to get the goods right up to the retailer, but we have never been able to get them from the retailer to the larders and parlours and bedrooms of our homes. That is one thing that has been lacking in our economic system. If economic reconstruction is to mean anything, it must solve that one vital problem.
The Prime Minister is at the head of the present government, and surely what he says should be taken as having some authority as far as the Liberal administration is concerned. In all that speech there was not a single solitary stand taken or statement made as to what economic change must take place-actual economic change-actual change in monetary or fiscal policy-not a single suggestion.
I go along a little farther and here, at the top of page 3981 of Hansard the Prime Minister is dealing with markets, and repeating what he said a few days ago:
Markets must be found and retained for our greatly increased food production unless we are not to face an agricultural depression.
Then farther on he says:
First and foremost-
I want you, Mr. Speaker, to get those words.
First and foremost there is the obligation to ensure the establishment of what may be most effective in the way of world organization for peace.
Then, after saying that this comes under the Department of External Affairs he says:
Probably more than any other single question requiring attention in the post-war period will be the securing of wider markets and the extension of trade.
That may sound very well and good to the man who may not be thoroughly alert. But let me ask this question. Suppose this country is not able to gain the foreign markets that we require in order to sell our surplus goods- and no one is so foolish as to believe that every' other country in the world will not be looking for the same thing, so that it will be the same old story over and over again and we shall find that foreign markets will not solve our problems for they never have before, not in this modern age, and I do not believe they ever will again-suppose we are unable to get the foreign markets we require, then what? There is absolutely no answer, Mr. Speaker. I repeat, then what? No answer.


John Horne Blackmore: From the Prime
Minister.


Ernest George Hansell: My hon. friend the member for Lethbridge says that there is no answer

Department oj Reconstruction
from the Prime Minitser. Of course, we in this group have the answer; never worry about that.


John Horne Blackmore: They will find that out after a while.


An hon. MEMBER:: When?


John Horne Blackmore: When you have
bumped your heads a little more.


Ernest George Hansell: As some one has said, if people have to suffer in the post-war world, if they have not suffered enough already, it is their God-given right to suffer more. But we do not want them to. We believe that there is a solution of this problem and that that solution is not to be found in foreign markets. I am not saying that we do not want foreign trade, but I say that there is much ado made about this foreign trade business. It seems strange, does it not, that we have to feed the world before we ourselves can eat? But that seems to be the philosophy held by a lot of people who talk so much about foreign trade.
The Prime Minister in his speech also made considerable mention of cooperation by the provinces with the federal government. I shall read this one passage from his speech as reported at page 3981 of Hansard, where he said:
In times of peace, on the other hand, we have to strive, in carrying out any policy, to get the good will and effective cooperation of every province, as well as carrying out our own work. I hope and. believe, as a result of what has happened during the past five years, and of the cooperation which the federal government has had in large measure from the provincial governments, that following conferences still to be held between the provinces and ourselves we shall be able to work out some means whereby we can, in the period after the war, secure still greater cooperation for the benefit of all.
I do not know whether I am right in reading between the lines there, but I should like to make sure to-night that the Prime Minister is not putting the responsibility for this whole post-war picture on the shoulders of the provinces. I hope he has not in mind here that if one or two provinces refuse to accept his proposals at the forthcoming dominion-provincial conference he will turn around and say: We will see what the country has to say about this. That would be an extremely good excuse for bringing the representatives of the provinces here.' I trust that the Prime Minister has no such motive.
I wish to say this in connection with provincial governments. The more that power is taken away from provincial governments and put into the hands of a powerful central government, the more is power taken away
from the people. Let that be stated in unequivocal terms. The fact of the matter is that you get nearer to the people when you get out to their local governments. The more that provincial governments take responsibility away from the municipal governments, the more is power taken out of the hands of the people. I say this, too. When the hon. member for Essex East (Mr. Martin) the other night brought into the picture the Rowell-Sirois report which one or two provinces refused to accept, the tenor of his argument was that there was no cooperation. Well, why not? Simply because the Rowell-Sirois report to all intents and purposes would have placed more power in the hands of a centralized government and taken it away from the hands of the people, and one or two provinces would not bow down to that sort of thing. The strange thing about the Rowell-Sirois report, which in the end would have established more centralized power and more centralized control, is that it had every banker and every chamber of commerce behind it, and they sent out their literature and arguments to the various boards of trade which did not know what it was all about and which followed in father's footsteps. All the big chain newspapers were for the Rowell-Sirois report and all the big industrialists and, without mentioning any names, a good many politicians were also for it. I say that if this government at the forthcoming dominion-provincial conference attempts to take power away from the provinces, this group is going to stand by the provinces in their argument to retain their power for the reason that their power is more abundantly the people's power.
Let me ask this question. I do not suppose I shall get an answer but it does not make any difference. The central government, namely the government here at Ottawa, have complete control of our monetary system; at any rate they are supposed to have; no other government has it. Am I to be told that this government will not receive the cooperation of the provincial governments if it says to them, "We will see that you get all the money necessary to make financially possible what is physically possible and desirable in your province"? If the government said that, does anybody believe that the provinces would not cooperate? Certainly they would; there is no doubt about that. It is all a question of whether the dominion government is willing- I am not going to say "able"-to make financially possible that which is physically possible.
The other evening, while the Prime Minister was speaking, the hon. member for Lethbridge (Mr. Blackmore) interrupted him-

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rightly so, I believe-by asking him where he was to get the money; was he to get it without increasing our debt? I am not going to enter at this time into all the Prime Minister's argument; but I ask him if, some time when he goes home and cannot sleep very well at night, he will turn to page 3987 of Hansard and analyse his answer. He went all the way round but he never touched the question. Finally he wound up his explanation by talking about a man having a family and, of course, he would need a home, and of course the home would have to be furnished, and so on. But is that a new condition which has suddenly come upon the scene of this world's economy? It seems to me that that has always been the case. Was it not so in the hungry thirties; was it not even so in the days of those two renowned people known as Adam and Eve? Is this part of a new idea? Is this part of the new order? I should like him to read what he said. I quote from Hansard, at page 3988:
That is the way progress is made, through demands which arise from conditions of peace and prosperity;-
Let me ask him, how can a man make a demand if he has not the money? I know the Prime Minister has studied this subject, and I am positive he knows there is never enough money coming out of industry to buy back all the goods it produces. The Prime Minister continued:
-and where you get demands of the kind which lead to the fuller employment of labour I do not think my hon. friend need fear about the increase of the public debt or taxation. . . .
Imagine that! The only answer is, "My hon. friend does not need to fear." Well, I say to-night that here is one who does fear that if we are not going to change our monetary policy, if we leave it to business, to industry-all well and good in its place-to sell its goods when people have not got the money to buy goods, we shall go back once again into the hungry thirties. But, oh no, the answer is. "Don't fear, my boy, don't fear; everything is all right; everything is going to be under control."
One other thing I should like to say here. I do not know whether the Prime Minister intended this as a promise or not, but he said, as reported at page 3988 of Hansard:
. . . I believe the nation can go ahead with the great work of construction and reconstruction and at the same time reduce its taxation and reduce its debt.
He added:
That at least is what I would hope to do if this government is in office when that period comes.

I do not know whether that is an election promise, but I am going to mark that page for reference when I come back here in the postwar period-and I shall come back.


Humphrey Mitchell: The hon. member is just bragging now.


Ernest George Hansell: I say that I shall be here if the Prime Minister is.


George Hugh Castleden: You are working together, eh?


Thomas Vincent Grant: Do you intend to turn
Liberal?


Charles Edward Johnston: Who will? I have not found any in my part of the country; there are no such animals out there.


Ernest George Hansell: Since I wish to refer to one or two other things and I have only a minute or two to spare, I must hurry along.
As I have looked over these speeches I declare that the speech made by the hon. member for Jasper-Edson (Mr. Kuhl) has not yet been answered by his critics. Two or three hon. members have referred to it, but they have not given him an answer. What did the hon. member for Essex East say? I turn to page 4015 of Hansard:
I am satisfied that no longer will our people go and receive a dole without at the same time receiving work for which they will be remunerated. Our people will not ivant to subscribe to the doctrine of the hon. member for Jasper-Edson.	.
The hon. member for Jasper-Edson never advocated any relief roll or what was commonly known in the relief days as a " dole." What he recommended was a reduction in the hours of labour and a national dividend to make up the purchasing power which was always lacking to buy back our production. When the hon. member for Essex East assumes to say what " our people will not want," is he speaking for our people? How does he know? He must be one of those three tailors of Tooley Street whose manifesto began, "We, the people of England." I want hon. members to get the logic of this:
Our people believe in the dignity of work They do not want to be idle.
WTho said they want to be idle?


Thomas Vincent Grant: The hon. member for Jasper-EdSon (Mr. Kuhl).


Ernest George Hansell: He never did. What we believe, and what the hon. member for Jasper-Edson said, is that work by compulsion from anyone at the top is something which takes away man's freedom, and that with the advent

Department of Reconstruction
of technological skill the hours of labour could be reduced by scientific methods to four hours a day. The hon. member for 'Brant (Mr. Wood) asked, "How would I milk all my cows in four hours?" Can you imagine the logic of that?


George Hugh Castleden: How does he do it now?


Ernest George Hansell: If he wants to work more than four hours that is his affair. We do not care if he pulls-


Some hon. MEMBERS:: Oh, oh.


Ernest George Hansell: I am sure hon. members do not mind if he milks cows all night if he wants to. We are not going to object to it.


George Hugh Castleden: Five hundred pulls for one cent.


Ernest George Hansell: I see that my time is
exhausted.


Some hon. MEMBERS:: Go ahead.


Ernest George Hansell: I was only going to say this, that anything that is done to the people of Canada by compulsion from anyone else at all is the absolute antithesis of a Christian democracy. When man was created he was endowed with freedom of will to choose; and every satanic system which has been brought about since the old boy entered upon the stage has contained' some device to take that freedom away from him.


Charles Edward Johnston: Even the Liberal party.


Ernest George Hansell: The only way to retain
that freedom among men is for them to be able to choose to work at the work they want to do, and to be free to* refuse work if conditions are undesirable. The man himself should be able to decide that, and if he wants to turn his talent to the writing of a concerto or the painting of a picture, then he should be free to do so. Compulsion brought to bear upon anyone by any other person is satanic. If it is natural compulsion it is different; but' if it is compulsion exercised by any human individual over another it is satanic and I care not whether it is done by Liberals, Progressive Conservatives, the C.C.F. or Tim Buckism. If it is done it is satanic. A glorious Christian democracy is that which gives mankind the blessings the Creator has bestowed upon them and at the same time gives them absolute freedom. I thank you, Mr. Speaker, for your patience.


Norman Jaques: I should like to associate myself with the ideas expressed by the speaker who has just taken
his seat (Mr. Hansell) and with the observations of the hon. member for Jasper-Edson (Mr. Kuhl). I have listened to this debate and to the other discussions on reconstruction and to what is called the new order, and all that it amounts to, so far as I can see, is that everybody is to be put to work. If there is anything new in work, I do not know what it is. Surely work is the oldest order in the world. But when the state undertakes to put everyone to work that is new; it is state socialism, and it does not matter whether it originates on that side of the house or in that corner of the house. It is state socialism just the same and you are all going the same road.	.
The hon. member for Essex East (Mr. Martin), referring to the hon. member for Jasper-Edson, made this statement:
Our people will not want to subscribe bo the doctrine of the hon. member for Jasper-Edson.
. . . Our people believe in the dignity of work.
Exactly. Well, is there any dignity in slavery? ' Is there any dignity in work performed by a man who is compelled to work, unless from natural causes? If there is, then surely slavery was the noblest institution we have witnessed, and the slave was the noblest of mankind. We know, however, it is not so. Natural dictatorship and the struggle against it is an ennobling thing; nobody denies that. But the Almighty, or Providence, has permitted mankind through science and so forth, to make it possible to lift the burden of a struggle for mere existence from the backs of mankind. And when human beings step in and presume to take the place of the Almighty and to say to men, "You shall work or starve," that is dictatorship and it does not matter whether it is called Liberalism, Progressive-Conservatism, C.C.F.ism or Tim Buckism. It is all the same and it all originates from the same idea, or philosophy. What differentiates not only our group but our movement throughout the world, particularly in the British empire, the movement known as social credit? It is this. We believe in voluntary effort. We believe that the time has come when it is no longer necessary to impose a struggle upon everyone for the bare necessities of life. That has been solved. Struggle there must be, but the struggle should be lifted to a higher plane than the mere struggle for existence. We have always advocated dividends for all and that has been ridiculed. First of all, the question was raised, where would the money come from? Well, at the present time over fifty per cent of the production of this country and of our allies is being given-I say given because it is given in the form of munitions-to Germany
Department oj Reconstruction

and our other enemies. That is a national or if you prefer, an international dividend. We ask nothing in exchange. As a consequence of that, even though the cream of the nation is either in uniform or in munition factories, while essential retail goods and the necessities of life are being produced by the very young and the very old, in spite of that fact, and that we are giving away over fifty per cent of our production, right out of the country, the present standard of living in Canada is higher than ever before.
I know there are certain inconveniences and restrictions, but I think I am right in saying that, if you average Canada right through, the present standard of living is higher than it ever was before. Certainly it is a great deal higher than it was for the ten years preceding the war. The reason for that is surely obvious. The problem of marketing has been solved. There is no trouble about marketing and therefore there is no trouble about producing. And if you solve the problem of' consumption you automatically solve the problem of production. I might say, in passing, that the paying of a dividend is not new. Not only is the idea of it not new, but as an actual fact it is not new. I have here a book entitled, "Monetary Experiments", by Richard A. Lester, and in a foreword by Professor Kemmerer the following appears:
This study is_ one of a series being published under the auspices of the international finance section of the Department of Economics and Social Institutions in Princeton university.
This book is published under the auspices of the university of Princeton, and in the chapter headed, "Social Dividend in Maryland", I read:
^When Maryland first issued paper money in 1733 most of it was given away-a certain sum to each inhabitant over fifteen years of age. This was done in order that the paper money might be "the more useful to the inhabitants" and its circulation might be "as speedy and diffusive as possible." The legislature hoped by this means "to remove the difficulties under which the inhabitants had long laboured." In a sense this was a sort of "social dividend" similar to that advocated by Major C. H. Douglas in his books on social credit.
At the end of the chapter there are a few words which sum up the experiment, and they are as follows:
From his detailed study of forty-five years of money in Maryland, Professor Gould concludes: "Considering the peculiar benefits to grain and tobacco culture, the conveniences offered to trade, and the faithful redemption of every shilling at face value, it is hardly too much to say that this was the most successful paper money issued by any of the colonies."
It can be seen that the national dividend is not even new; this was done before and it
fMr. Jaques.]
was a great success. To those who, like the hon. member for Essex East and others, have been so fond of saying that it would demoralize and pauperize the people, I would say that it was the recipients of that dividend who a few years afterwards fought and won the war of independence.
I shall now quote a few lines from Douglas himself. He has this to say on state socialism:
State socialism is based on the premise that, firstly, the control of policy is resident in administration, and, secondly, that it is possible to "socially" control administration, and thirdly, that the state should be able to supply economic pressure to the individual; whereas I suggest to you that the control of policy is resident in credit, and its financial derivations, of which money is one, while administration is a technical and expert matter not susceptible of being socialized, and, lastly, that the only possible method by which the highest civilization can be reached is to make it impossible for either the state or any other body to apply economic pressure to any individual.
That is tbe reason for the dividend. *It should be obvious to any thinking person that the world is coming to the parting of the ways. People speak of a new order. We believe in a new order. A new order should mean individual freedom. After centuries of struggle we have won political freedom but the world has not yet won individual economic freedom. The only offer that I have any knowledge of from any other movement but our own is this: People are being offered economic security at the price of individual freedom. That is what they are being offered. That is what they were offered and received in Germany, Russia and Italy. That is what they are being offered to-day not only in Canada but throughout the British empire. The so-called new order is state socialism. It is based, not on individual freedom as it should be, but on collective security at the price of individual freedom.
Quite recently the hon. member for Jasper-Edson was criticized for a statement he made about the leisure state. We well know that there is no room for a leisure state in war time. That is one of the reasons why war is hell. There is no leisure. But surely after the war is over and when the worst of the damage of the war and the waste of war have been repaired we should look to the ideal of a new order, and that should be toward a leisure state and not a work state; that is, work for the sake of working. Major Douglas has this to say on that subject:
The more the maintenance of life can be shifted from the backs of men on to the backs of machines, the more important it is to find a creative outlet for the human energy released, and the more certain is it that a considerable portion of this energy will, without compulsion,

Department oj Reconstruction
be devoted to the improvement of the industrial machines. That is to say, that if a practical policy based on these considerations be pursued there will be a fall in the man-hours required for routine or operating work, and a consequent rise in the man-hours available for design and research work. The industrial machine is a lever continuously being lengthened by progress which enables the burden of Atlas to be lifted with ever-increasing ease. As the number of men required to work the lever decreases, so the number of men set free to lengthen it increases.
I shall read one more quotation from Major Douglas on the leisure state. It is as follows:
If we assume that the constant effort to reduce the amount of labour per unit of production are justified, and we recognize the unquestionable fact that the genuine consumption capacity of the individual is limited, we _must recognize that the world, whether consciously or not, is working towards the leisure state. The production system under this conception would be required to produce those goods and services which the consumer desires of it with a minimum and probably decreasing amount of human labour. Production, and still more the activities which are commonly referred to as business, would of necessity cease to be the major interest of life and would, as has happened to so many biological activities, be relegated to a position of minor importance.
This movement of social credit is a great deal more than a mere method of finance. Monetary reform is not enough. Social credit is a philosophy of life, and the financial part of it is merely the means to gain the ends of the policy. The basic philosophy of social credit is freedom for the individual.
There are only two methods of production in the world-there can only be two-compulsion and persuasion. So far, the world has been more or less under persuasion. If there has been compulsion it has been imposed by Providence, by God or by Nature, whichever you prefer. But that has been overcome, and now we are threatened with production by compulsion-a compulsion imposed, not by nature, but by individuals who have assumed powers which, rightly, belong only to the Almighty. That is, in my opinion, the essence of all dictatorships.
We propose that everybody should be guaranteed-every man, woman and child-at least the necessities of life, whether they work or not. I do not mean to say that this would apply, of course, in war time and probably for some time after the war; but it is an ideal to guide us. All work would be voluntary, and that would be a noble thing. As I said before, I see nothing noble in being compelled by the state to work at a task which one must accept or starve. That condition is all right when it is imposed by nature. But that condition we have overcome; the problem is no longer one of production. As every speaker has said, consciously or otherwise, the problem is to market, to sell, if you like, or to distribute what we now can produce in such large quantities.
Therefore there is no longer any reason why all work should not be put on a voluntary basis. We could begin, of course, by lowering the age for pensions, and increasing the amounts. Perhaps we could raise the age for the education of youth. We could shorten the working time at both ends. The ideal should be toward a leisure state, with work freely done and not imposed by a dictator.
I hope hon. members will not deliberately distort what is said by members in this group.
I suppose there is not a member in the house who has a family who does not regard it as his duty-and rightly so-to leave his family as financially independent as possible. I am sure that would be the first care and the first instinct of every father and mother in the house. If that is right, then surely that is the very best thing we can desire for our own children. Therefore, in the long run, it must be the very best thing for all children, and all people.
Of course it has never been possible, 60 long as the world was in a state of real scarcity. But in this day and age, when as a result of the war we shall have immensely increased our powers of production, the problem will not be one of production but, as has been said so often, one of markets. Some say that we shall have to give away to foreign countries a great portion of our production, through a favourable balance of trade and foreign lending-which is the same thing as giving.
I believe that charity begins at home; and if it is necessary-and I am sure it is-to give away part of our production, because there is no other way of getting rid of it, then I contend that we should set a good example in our own country and pay ourselves some dividends. If we did that, it would not be long before the world would follow our example.


Douglas King Hazen: Mr. Speaker, the word "reconstruction" is given a wide meaning in the interpretation section of the bill. It includes every undertaking by dominion, provincial or municipal authority or by any corporation or other person that may contribute to the reorganization of industry, in order to provide maximum production and full employment during and following the change-over from war-time production of industry to peace-time production.
I should like to take the opportunity this definition affords me to bring to the attention of the house very briefly a matter which I
Department of Reconstruction

believe is of importance, if some of our reconstruction and interprovincial problems are to be considered and dealt with intelligently. It has to do with the lack of reliable information available respecting trade between the provinces.
If I were to ask the bureau of statistics for figures showing the trade between New Brunswick and Saskatchewan, or between any one province and any other province, the information would not be available. The bureau of statistics does not have such information. It seems to me it is important that such records should be kept, if we are to have a true picture of interprovincial business. Unless we have those records, it is impossible intelligently to study and discuss some of the economic problems and reconstruction problems which will arise after the war. Until such information is available we shall be travelling in the dark, and it will be impossible for us to obtain a true picture of Canada's interprovincial business. I am informed that this information could be obtained by the bureau of statistics and that it would not be difficult to obtain, although it would involve an additional expenditure of about $10,000 a year.
On April 7, 1926, the governor in council appointed Sir Andrew Rae Duncan, the Hon. W. B. Wallace, then judge of the county court of district No. 1, in the province of Nova Scotia, and Professor Cyrus Macmillan, Master of Arts and Doctor of Philosophy of McGill university, to be commissioners under the Inquiries Act for the purpose of conducting an inquiry into the conditions and claims of the people of the maritime provinces and to make such specific recommendations as in the opinion of the commissioners would result in affording relief from the conditions complained of. Mr. F. Maclure Sclanders, commissioner of the Saint John board of trade, acted as secretary of the commission.
The commission's report is dated September 23, 1926, and in it the commissioners urged that a system of statistics should be made regularly available from as early a date as possible on the trade of the maritime provinces with other provinces and with foreign markets as well. Section 39 of the report deals with this matter, and I should like to read the first and third paragraphs thereof. The first paragraph reads:
We have had brought before us the lack of any comprehensive measurement of the trade of the maritime provinces with other provinces and with foreign markets. We were ourselves disappointed not to be able to pursue investigations on trade matters along lines which such statistics would have enabled us to do. We found on inquiry at the dominion bureau of

statistics that consideration had been given some time ago to this very subject but, mainly through lack of organization in the statistics relating to certain phases of transportation, it was not possible to proceed with the plans that had been formulated. We strongly urge that these difficulties should be overcome, as they can be, and that on this phase of internal trade a system of statistics should be made regularly available from as early a date as possible.
The third paragraph reads:
With regard to the general function of the bureau of statistics, we venture to draw attention to the importance of providing a comprehensive statistical organization in a country situated as is Canada with a series of provinces differing often in economic outlook. Very considerable progress has already been made in this direction, but we feel the bureau could be increased in efficiency by being given improved facilities for the kind of organization it is necessary to develop as an independent central agency covering the activities of all departments from the statistical side.
It has been suggested that the reason why this recommendation was not put into force was that representatives in the house from Ontario and Quebec objected because it would show the trade among the provinces to be in their favour. I do not consider that is the real reason, because I have always found members of the house from Ontario and Quebec ready and willing to give a sympathetic hearing to the other provinces in order to endeavour to find a solution of their difficulties.
Until statistics on this trade are obtainable we shall be travelling in the dark. It is not possible for us to obtain a true picture of our interprovincial affairs or to make an intelligent study of them until these figures are made available to us. I ask the government to implement this provision of the Duncan report and to take steps to see that statistics of trade between the different provinces are made available.


Agar Rodney Adamson: Mr. Speaker, I have listened with a great deal of interest to this debate with regard to the setting up of a Department of Reconstruction. The more I have heard, the more it has become apparent to me that reconstruction is largely an engineering problem. I happen to be an engineer, and perhaps I can take some of the time of the house to express a few views which are diametrically opposed to some of those expressed by my hon. friends to my extreme left.
The definition of an engineer has been given as a man who can do something for a dollar which it would cost two or three dollars to have done by somebody else. If an engineer is given enough time, enough money and enough men he can do practically anything. Chauncey Depew has said that, given those

Department oj Reconstruction
three things, he could build a railroad to the north pole. Many of the plans that have been discussed in this house and have received publicity in the public press more or less fall into the category of building a railroad to the north pole. They seem to be very fine in debate and they look all right on paper; but having lived all over the world, having made my living in several countries besides Canada, perhaps I may be excused when I say that a great deal of what has been said is impracticable.
I am going to deal directly with the financial set-up, which has been mentioned in this house at considerable length. If we look at the beginning of chaos in the world we shall see that the first inevitable step toward this war -started with the so-called managed currencies. We have the statement of Sir John Anderson in England that the beginning of Great Britain's chaos was with the adoption of the gold standard. That, I submit, is wholly inaccurate. With all due respect to Sir John Anderson, I take issue with him. England returned to the gold standard on the basis of the pre-war price of $20.67 an ounce, with a tremendously inflated currency and a tremendously inflated national debt. To say that that was a return to the gold standard is technically correct, but actually it was a return to an exchange standard between paper currency and metal which could not work because the paper was so tremendously inflated. That is the situation with regard to the adoption of the gold standard in England. Let us see what happened.
Despite everything that has been said, we in this country depend, whether anybody likes it or not, for our prosperity upon international trade, and when the war is over we shall depend for our prosperity a great deal more upon international trade. One fundamental about international trade, particularly forward trade, is that the buyer and the seller can deal in a standard whose value will remain ' constant when the contract is carried out. Throughout the centuries that has been the fundamental rule of success in international trade. Nothing has altered; nothing will alter.
We see that to-day we have a managed currency. All currencies are managed, fictitiously managed, with relation to the price of gold. In the United States they will purchase gold but not sell it at $35 an ounce, but on the free gold market both in Alexandria and in Bombay gold to-day sells for somewhat over $70 an ounce. The house may consider this an academic question but it is far from it. It means that the great bulk of the people with whom we shall have to trade, the great centres of population which are in the orient still have
hard currencies. They believe and throughout years of bitter strife they have found it true that gold is the one thing they can trust to and to-day, despite the fact that large sums of United States currency are circulating in the orient through the American troops, United States currency is at a very great discount and the Americans have had to resort, so I understand, to two types of currency known as the blue seal and the yellow seal.
The pound sterling is an internal currency except in the controlled parts of the sterling block to-day. Its value outside England is extremely variable. Special invasion currency was issued for the attack in Normandy. I mention this because the United States dollar and the pound sterling are to-day, in the minds of the great centres of population in the orient, losing their intrinsic value because they are not convertible into a metallic base. Those are the facts. We may or may not like them. But all history shows that experiment after experiment has been made in fiat money from the time of Marcus Aurelius right down to the present day and it has inevitably brought chaos.
I mention this, Mr. Speaker, because I have lived in two countries where managed currency led to inflation, where I saw great poverty and tremendous distress caused by the printing press. One of those countries was Germany and the other Brazil. One of them after the last war was poverty-stricken; or the Germans said they were. The other country was Brazil, rich in natural resources. Both suffered from inflation, and the people, the workers, were the ones who suffered. I want to make that very clear because I have experienced inflation in those two countries and I know what it means.
It is said that the Americans have or had a hoard of gold which would never be of any use to them. But in the last three months the United States treasury has lost in the neighbourhood of $166,000,000 of gold for external purposes, and that despite the imports and the purchases she has made from Canada and other gold-producing countries which sell to the United States. Furthermore, their gold currency coverage which was over ninety per cent a year ago has dropped to slightly over sixty per cent and it may now be less than that. That is what is happening to the American gold. The American gold is one of the most useful assets the United States has ever had, as was our gold at the beginning of the war, as was admitted by Mr. Graham Towers, who said that Canada's gold saved Canada's bacon in the first year of the war.
Department of Reconstruction

We talk about divorcing ourselves from managed currency and having the printed dollar. If I thought it would work, I would advocate it.


John Horne Blackmore: Is it working in Canada? There is not a dollar of gold behind our money.


Agar Rodney Adamson: We have no international payments at the present time. I have experienced personally the results of the printing press and because of this bitter experience I am speaking in this house to-night.


Walter Frederick Kuhl: The printing presses ran wild in the countries you are speaking of.


Agar Rodney Adamson: I have seen the printing press start off quietly with just a little inflation. I saw this happen in Brazil. It did not run wild. It happened first with regard to the sale of some securities to build a railway. They found it was easy, and they liked it. It started off quietly, but then in a little while the milreis dropped from thirty-two cents to about six cents and no government could stop its descent. Unemployment became a serious problem and poverty, strikes and eventually a revolution followed the resort to the printing press. I saw that; I experienced it, and it is because I saw it happen in a rich country like Brazil, a country full of natural resources, that I am speaking here to-night. It is one of the most dangerous philosophies that we could accept here in Canada.


Walter Frederick Kuhl: There is'such a thing as the right amount.


Agar Rodney Adamson: They thought they were going to have the right amount. Everybody thinks they are going to get the right amount, but I have yet to know of a case where they stopped at the right point.


Norman Jaques: Well, you could not fight a war on that principle; at any rate you could not win a war on it.


Agar Rodney Adamson: I have brought this up, as I said before, because this debate has taken a turn toward finance. As an engineer I have seen what happens to my profession; I have seen what happens to construction, housing and the like when the people of the country lose faith in the currency of their country; and they will lose faith again just as soon as we begin to print money without security. Bad money drives out good.


Walter Frederick Kuhl: You see what happened under deflation.


Agar Rodney Adamson: That is the issue which faces us to-day. In considering all these plans, excellent though most of them are, we

must remember that our future depends upon the development of the natural resources of this country and the increase of our trade. We cannot live by any specious theory of finance. That was not the way by which the pioneers of Canada built up this country; and we are to-day, because of the peculiar idea that we can live on the state, headed either for state socialism or chaos.
Mr. HARRY R. JACKMAN (Rosedale): Mr. Speaker, in rising to support the bill by which the Department of Reconstruction will be set up, I cannot be certain, nor do I suppose any hon. member can be absolutely certain whether it will have any great usefulness. It may result in merely a fact-collection agency; and its usefulness or otherwise cannot be foretold in advance of the events which will follow upon victory in this war.
Nevertheless, this Department of Reconstruction may perform a useful purpose, and with that possibility in view I am glad to support it and to advance certain suggestions to which I think the Prime Minister (Mr. Mackenzie King) might give consideration.
It may well be that when victory is assured to us we shall find that our job will not be to provide work for people; on the other hand it may be a job for the government to put a damper on an incipient boom. We have, stored up in the hands of the people, a tremendous amount of savings, much of which cannot be spent at the present time because there are not civilian goods on which to spend them, and we shall see what will be the result, when the war is over, of this great unleashed amount of money which is available for consumer goods. It is, however, well to be in readiness in case there is unemployment and it is necessary to stimulate production and consumption in this country, and it may, therefore, be that the Department of Reconstruction will have a useful and important purpose to serve. In any event, the readjustment and rehabilitation will not be automatic, even if the natural demand for workers is sufficient to absorb all those who are willing to offer their services in the industrial, and agricultural and mining fields of this country. However, that natural demand, if it is sufficiently great to absorb them all, is not likely to be facilitated or expedited by the setting up of this department. There is bound to be a time lag between the rehabilitation and the demobilization of the men and women from our forces and from our industries before they are placed in civilian goods industries.
As I understand it, it is not the policy of the present government to create jobs, either through public works or other expenditures

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of public moneys, if the natural working of the economic system is sufficient to give our people employment. One does not know whether the ministry of reconstruction will become a mere repository and exchange of information having to do with jobs, or whether it may have a general overriding power over other departments of the government which are specifically charged with carrying on certain projects. It will undoubtedly face a delicate position, because it will have a great deal to do, if it does have any function to perform at all, with other departments of the government and also with departments of provincial governments.
For example, the Department of Reconstruction would undoubtedly know about the amount of money and the amount of manpower involved in government projects of one kind or another. It would also likely know of the amount of money and manpower involved in the major private undertakings throughout the country. But I do not see how it could possibly know of the millions of private projects which will be undertaken by our citizens, whether they be the building of homes or the purchase of durable articles. That information, which is of the greatest importance, cannot be known or even estimated with any reasonable degree of accuracy by a department of reconstruction, and to some extent, perhaps to a very large extent, that deficiency will vitiate the work of the department itself. How is the department to know how individuals are going to spend their money? Will they spend it on homes or on autos, on taking out a new insurance policy or on a vacation, or will they, because of lack of confidence in the immediate future after the war, decide to hold whatever cash or victory bonds they have and refuse to spend their savings and thus take that money out of circulation?
What I should like to emphasize particularly is that the government should indicate what is to be the driving or motivating force in our workaday life in the post-war period, what is to be the machinery which, as they say makes the clock tick. Are we to have government direction and regimentation, being told what to do and unwilling to do more than our assigned tasks because there is no reward or incentive to do more than the minimum? Or are we to operate as free men under rules and regulations which are imposed by the government but which will guarantee opportunity and fairness to all our people? The answer to that problem strikes at the great question which confronts us all, as to whether we are to have a socialist state
in Canada, or whether we shall operate under the system of free enterprise and individual initiative.
To-day the market is provided by the government for all our agricultural and industrial production. The government pays the whole bill and provides the incentive through paying whatever is necessary to produce the goods. There is little regard to cost, as we see by the evidence in the war expenditures committee, where some shipyards produce a 10,000-ton freighter at one price and others at a higher price. The important thing in fighting a war is to get production. Costs mean little and profits or earnings less. You must produce the goods in order to win the war, and whatever consequences fall in the wake of that must be considered in the later period and not while the fighting is going on.
Fortunately, the financial and economic system has been strong enough to stand the strain to date, and although we live and learn, speaking in terms perhaps of years, we do not know how much longer the system can stand the strain which is at present imposed upon it with the steadily mounting debt and the charges and other regulations attendant thereon. If we do not have a regimented, totalitarian state, then we shall have a free economy where every man will be his own master, able to choose the vocation or job which he wishes. May I point out particularly to the house that the greatest stumbling block to a return to the system of free economy is the present taxation and fiscal policy of the country. No better means could have been devised to bring about a socialist state than the present taxation policies of Canada, and if they Sre continued there is no question that free enterprise and initiative will expire.
At the outbreak of the war, taxation was used as the instrument to stifle civilian production, which was literally choked off. Certainly there should not be an increase in civilian production brought to the market to any greater extent than will enable our people to live in a reasonable degree of comfort. Certainly there should be no increase in standards. Wages were stabilized in civilian industries but certainly not in war plants, where workers were doing jobs at higher rates and war plants were attracting workers from ordinary fields of industry. We have only to look at the aircraft industry to find a typical example of the process. That was all to the good. But the reverse situation will obtain in the post-war period. No longer do we want- to strangle civilian production. On the contrary, we want to cancel all war production and to turn all our man-power to production
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for civilian use. We shall turn from production to kill to production to live. It is, therefore, logical that we should reverse the process which we adopted at the outbreak of the war whereby we raised taxes to prohibitive levels, particularly on business, and to a large extent on individuals also.
Unless that is done, initiative and the motivating force which we have always had in a system of free economy will be lost to us and we shall lose that freedom which so many of us prize. At the present time the minimum tax on business is forty per cent; if that business earns more than the average earnings during the 1936-1939 period, the tax is 100 per cent; then whatever is left after that may be distributed to the shareholders, and they are taxed in their particular brackets at anywhere from thirty per cent to ninety-eight per cent. So that it does not take more than simple arithmetic to realize that there is no possible incentive for one to engage in business or to expand, or even for an individual who is not in business or corporation brackets to earn more money, because the brackets are so high that it is not worth the extra effort.
We find that not only in the upper brackets, whether they are connected with the war effort or not, is it no longer profitable to do this, but workers in the factories do not find it profitable to work the sixth day because that puts them in the higher brackets for the whole week's wages and there is so little left of the sixth day's wages that it is not worth while working. The consequence is that the nation loses production, and the Department of National Revenue loses what it might otherwise have obtained had the taxation been more reasonable.
It may be that such a system is necessary- I will not say that it is, but this is not the place to debate the question-during a period of war, but certainly during peace time and during the great conversion period after the war we must not have such conditions obtaining. There is nothing more important for the Prime Minister to announce than the government's intention with regard to post-war taxation; for the power to tax is the power to destroy, and that is what is happening as far, as civilian production, particularly new production, is concerned. And rightly so, at the present time, because we have a war to carry on and we do not want more goods for civilian use. But companies as well as individuals must know whether they will be compensated for the risk they have to undertake and the enterprise and management they must con' tribute in the post-war period, and particularly is this so of new businesses.
{Mr. Jackman.]
Some government officials have left the impression that it would be their recommendation that taxes after the war should be substantially reduced. We are all aware that the treasury will need revenue in the post-war period, but it would be foolish to kill the goose that lays the golden eggs. People must know where they stand in the matter of taxation. While the question is important to all, it is of the greatest importance to those who are engaged in business to provide leadership through w-hich jobs are created. Canadian citizens not government departments are going to do the major planning in this country, and it is time to think now of the deciding factor of post-war taxation; otherwise there is no use in having government commissions and boards and other public bodies set up to decide how much work can be created, how many jobs can be provided, how much capital expansion there may be. What we need is a clear chart so that business will know whether it can undertake new things and whether there is sufficient incentive for them, because unless there is some compensation for the risk involved there is not likely to be much go ahead; the green light is not likely to come on as far as business is concerned.
It is not necessary to bring to the attention of the house this fact, that not only does a nation perish without vision but that without leadership the nation is lost. We must, therefore, provide a chart whereby leaders in business and industry can guide their future plans, and a fair and equitable taxation policy applicable to the post-war period should be announced immediately. Let us know what our ascertainable post-war expenditures are likely to be. Let us know the over-all picture of social welfare costs. Inasmuch as it is in our power to provide it, let us give the people what they want and what they need. But it is also our duty to tell them what the cost is and how that cost is to be borne by our people. Reconstruction means reemployment and job creation. That is what the people want, not doles and hand-outs, even if it is their own money. Let us provide a fair day's wage for a fair day's work. Public ownership may well be desirable in some instances, but where there is room for competition and development let not the government become a limiting monopoly. For example, in the air transport field we find the present government-excluding any likely competition even when the whole world is our oyster and there is plenty of room for not only the government line but for a number of competitors in what is likely to prove one of the greatest and fastest expanding fields of transportation.

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Has this government for one moment considered what the effect already is on young Canadians with competing air transport companies? Are they likely to continue to engage in air transportation in Canada with the de-. vitalizing hand of a limiting monopoly apparently to be laid on this great industry of promise? Is it any wonder that the brightest of our young men, those who would provide leadership in the field, are already being attracted to the United States where there are no less than half a dozen companies engaged in international transportation? If we are to have a real reconstruction policy in this country, let us not adopt halfway measures and for want of political courage fall between the two stools of national socialism and free enterprise, If we are to have an incentive and not just to obey orders, let this government announce its post-war taxation policy; for how can business which creates jobs be bold and forward-looking if it does not know the environment in which it is to operate? With the war providing a sure market for the proceeds of industry and agriculture there has been little business risk The taxation policy may have been rigorous but not unsound in principle. After victory, with production to satisfy the needs and desires of millions of our people, with all its attendant risk and the necessity of finding markets, let the government proclaim a fair system of post-war taxation for all, so that consumers will have money to buy and producers some incentive to go ahead and take the risk and produce.
If the government is interested in reconstruction as are all our people, and particularly those of the armed forces and in war industries let it announce without delay the conditions under which business will be called upon in the post-war period to carry on.


Mr. W. J. WARD (Dauphin):: I am sure
that the Prime Minister (Mr. Mackenzie King) has reason to have a feeling of satisfaction at the general acceptance of this bill by the house. I should not have taken part in the debate at this time had it not been for some remarks made by the hon. member for Rosetown-Biggar (Mr. Coldwell). Fearing that I might be called to order if I attempted to deal with his remarks when the bill comes before the house I take this occasion to reply to my hon. friend.
Not only is the hon. member for Rosetown-Biggar running true to form in his actions on this measure but also in the actions of those who surround him when they speak on matters of which they have no knowledge. The general social programme that was inaugurated by the Liberal party many years ago had its
beginning long years before there were any Cooperative Commonwealth-Federation members in this house. And this includes such measures as old age pensions, with which the hon. member attempted to deal. I wish to refer to old age pensions particularly. Hon. members in that corner of the house have frequently taken unto themselves the entire credit for having instituted and, as they frequently put it, forced old1 age pensions through this house and upon the leaders of of that day. As a matter of fact, they had as much to do with the formulation and passage of old age pensions as had the mummies of Egypt.
I am sorry that the hon. member for Comox-Alberni (Mr. Neill) is not in his place at the moment, because for the first time that I can recall they have given him credit for having had some part in bringing about the passage of old age pensions. That is quite true, but the hon. member for Rosetown-Biggar was overgenerous that evening. However, what is the history of old age pensions? I distinctly recall the seven members-I have the names here-who met in a room on the fifth floor in the latter stages of the session of 1922. Who were the seven members? They were as follows :	George G. Coote, the then member
for Macleod; T. W. Bird, the then member for Nelson; Henry E. Spencer, the then member for Battle River; Miss Agnes C. MacPhail, the then member for Southeast Grey; E. J. Garland, the then member for Bow River; J. S. Woodsworth, the then member for Winnipeg North Centre and W. J. Ward. These were the seven members who met in that room. Neither the then member for Winnipeg North, nor the hon. member for Comox-Albemi were present. As time went by, our organization gathered momentum; by 1923 we had gathered around us usually from twenty to twenty-five members who would meet with us, and by 1925 there were anywhere from forty to fifty members who met frequently to deal with old age pensions. And who were the forty or fifty members? Well, regularly there was a member of the Conservative party, the then member for New Westminster, and we always had a considerable number of Liberal members, but mainly they were Progressive.
The hon. member for Rosetown-Biggar referred to a letter which was written in 1926 to our present Prime Minister and to the Right Hon. Arthur Meighen, who was leading the opposition. The letter was in the form of an offer of support. The hon. member for Rosetown-Biggar would lead the house and the country to believe that that letter came from the then member for Winnipeg North

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Centre, the then member for Winnipeg North and the hon. member for Comox-Alberni, which was entirely untrue. The members of the Labour party of that day were nothing more than a mere incident. Old age pensions had no particular force in so far as the two Labour members who were in the house at that time were concerned. It was the Progressive members, supported by two or three Conservative members and a number of Liberal members, but mainly Progressive members, who made old age pensions possible.
I wish to remind the hon. member for Rosetown-Biggar when he speaks of the amount of $20 a month not being sufficient, that that was the amount agreed upon by Mr. Woodsworth, Mr. Heaps and all the other members at that time. Seventy years of age and $20 a month was all that was asked' for. Therefore I think it is well that we put the record straight and that the country should know who was responsible for placing old age pensions on the statute books of this country.
I should also like to refer to some of the remarks made by the hon. member for Rosetown-Biggar in reply to the hon. member for Essex East (Mr. Martin). Surely the hon. member for Rosetown-Biggar-and he is nobody's fool-must have known the facts, or was he deliberately attempting to mislead the country, talking with tongue in his cheek.


Clarence Gillis: I rise to a point of order. The hon. member is imputing motives when he charges the hon. member for Rosetown-Biggar (Mr. Coldwell) with making false statements to the house. I ask for a withdrawal.


William John Ward: My answer to the hon. member is that the hon. member for Rosetown-Biggar said in his remarks the other night- and he was not called to order as follows:
I wish to say this, that to-night after twenty-five years most of those promises, as far as social legislation is concerned, remain unfulfilled.
That is untrue. No one called the hon. member to order when he made use of what was an unfair and untruthful statement.


Clarence Gillis: I am asking for a withdrawal of the statement that the hon. member for Rosetown-Biggar was talking with his tongue in his cheek. That is imputing motives. And I ask the hon. member to withdraw the statement that the hon. member for Rosetown-Biggar was misleading the house.


Thomas Vincent Grant: Where would he keep his tongue?


Mr. MACKENZIE (Vancouver Centre):: What is wrong with that?


Clarence Gillis: I am asking you for your decision, Mr. Speaker.


William John Ward: I did not intend to impute motives. My intention was only to have the facts straight. Let us keep the record straight. The hon. member for Rosetown-Biggar has been in politics for quite a long time and has been a student of economics. I have no doubt he has studded the programme of the government of this country for a considerable time, and I think he knew when he made that statement that it was an unfair if not an untrue statement.
After all, we are living in a country to-day which is second to none in the world, so far as social progress is concerned. We are living in a country where the wage level is the second highest in the world. We are living in a country where our economic standard is perhaps as high as that of any other country.


John Horne Blackmore: Heaven help the other countries!


William John Ward: I read in a newspaper account of a statement made by the hon. member for Rosetown-Biggar before a rally in the Masonic hall only the other night, at which time he indicated' his disgust with respect to cartoons appearing in the press. He pointed out that those cartoons pictured boys in foxholes in Italy who were hoping and praying that Canada would remain the same country they had left. I never was in Italy, but from what we can learn about it-and especially since war broke out-it must be a terrible place, as compared with Canada. The world does make progress, on a basis of comparison; and I can well imagine that, on that basis, those boys would hope to God that they would come to the same Canada they had left.
I think many of those soldiers, too, would hope to come back to a free Canada, one where free enterprise is here, waiting for them. I could not help feeling when I read this press report of the hon. member's statement that he is not fair to Canada or to the Canadian people.
We do not have to cross the world, away to the other side, to find intelligence. I know our Primfe Minister-and I can say this truthfully-is one of the greatest humanitarians in the world to-day. That is borne out by every thoughtful ,person in Canada. I think it can be declared that he has done as much in a humanitarian way for the downtrodden people of this country as any man has done for his people in any other country of the world. I do not think we are fair with ourselves, with our country or with our government when we continue, as do our friends in the C.C.F., to belittle our country, blacken it in every possible way, and discount the motives of all

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others. It would seem that nobody is honest but the C.C.F. I can visualize what would happen if they ever took office, and discovered that a country cannot be governed on a basis of destruction and irresponsibility. That is all we got from the hon. member for Rosetown-Riggar the other night when he spoke about social matters, old age pensions included.
I have spoken only to put the record straight, and I hope that never again shall we hear that sort of twaddle. I got a letter the other day from the president of an old age pensioners' association in Manitoba, and he used the very same words. Perhaps he learned them from the hon. member for Rosetown-Biggar. He used the very same words in his letter to me, going so far as to say that the late Mr. Woodsworth and Mr. Heaps had forced the hand of our Prime Minister in 1926, and that if it had not been for those two members there never would have been an Old Age Pensions Act on the statute books of Canada.


Clarence Gillis: He knew history.


William John Ward: It is quite evident that the hon. member who interrupts knows very little about the history of old age pensions.


Clarence Gillis: Some time I shall take time off to tell you what I do know.


William John Ward: However, I do not wish to get into a controversy with the hon. member. I appreciate this opportunity, Mr. Speaker, to put the record straight.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Golding in the chair.
Section 1 agreed to.
On section 2-Definitions.
Mr. STIRLING:: Would the Prime Minister give an explanation with respect to paragraph (e) ? It states that reconstruction means the reestablishment in civil life, "and includes every undertaking by dominion, provincial or municipal authority", and so on. Would he explain the relationship which will result from the operation of this department in connection with provincial authority?


William Lyon Mackenzie King: 
Clarence Gillis: I should like further explanation respecting paragraph (e). I notice the merchant marine is not included. It states that reconstruction means the reestablishment in civil life and reemployment on demobilization of the men and women of the armed services, of persons released from war industries, and so on. I think the merchant marine should have been included.


William Lyon Mackenzie King: My hon. friend will realize that there is no intention to omit the merchant marine. They can be viewed as being part of the scheme, since they are serving in the forces having to do with the-war. The definition of reconstruction is, I think, broad enough to take in any form of activity that is known, provided it is constructive in character.


Clarence Gillis: That may be all right, provided the Prime Minister is interpreting the clause, but it will be interpreted by many people. An amendment to the bill setting up the Department of Veterans' Affairs was needed to include the merchant marine. I have no doubt as to the intention.


Clarence Decatur Howe: The merchant marine will not be demobilized.


Clarence Gillis: Nor will workers in war industry, and they are included under this clause.


Clarence Decatur Howe: Some of them will be.


Clarence Gillis: The merchant marine definitely will be.


Clarence Decatur Howe: The merchant marine will be larger.


Clarence Gillis: Than it is now?


Clarence Decatur Howe: Oh, yes.


John Horne Blackmore: As we consider this paragraph I think it would be a good thing, to make sure that we all realize, as I think the Prime Minister does, that it involves, first, that there shall be a maximum domestic market in Canada for all the goods which will be produced in Canada or for all the
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goods for which our products may be exchanged. I think the Prime Minister will agree that that is a fundamental premise. There must be a maximum domestic market in Canada for all the goods produced in Canada and for the goods for which the surplus goods of Canada can be exchanged. In other words, the purchasing power in the hands of the people of Canada must be raised to a level at which they will be able to consume Canadian production to the fullest extent of their needs. That will be involved in this paragraph and I want to make sure the Prime Minister appreciates that fact. If our primary and secondary industries are to be able to carry on to the maximum of their efficiency there must be a level of purchasing power among Canadian consumers which will enable them to consume to the ultimate extent the production of Canadian industry, both primary and secondary. That is involved in this paragraph.


William Lyon Mackenzie King: Full employment would mean as much in the way of employment as it is possible to achieve, but it does not necessarily mean the guarantee of employment to everyone at every hour -of the day. We must not fail to take into account such matters as seasonal unemployment and the like. But it does refer to what we ^generally consider as mass employment, the (employment of large numbers. The aim of reconstruction will be to strive to achieve the fullest possible employment from domestic and foreign trade or commerce. I do not know if I have caught the purpose of my hon. friend's question, but I am trying to answer it.


John Horne Blackmore: The Prime Minister's words would indicate that he has, but I am not entirely sure that he appreciates to the full the meaning of what I said. This involves that all consumers in Canada shall be able to buy to the limit of their needs the goods which Canadian industry will be able to produce. If these words really mean what they should, that will be involved. That means that the standard of wages in Canada will be such that we shall not have a large percentage of Canadian wage earners getting less than $500 a year. That will be a condition not to be tolerated in Canada.


William Lyon Mackenzie King: My hon. friend understands that there is a difference between an objective and a guarantee. The objective is set forth here quite clearly, but I would not say that any government measure could go so far as to guarantee to individuals what their purchasing power is to be from day to day. The objective we are seeking is to enable all

classes to have a minimum standard of living. That is the government's policy with respect to reconstruction, not confining reconstruction merely to the producing of commodities and the sale of goods, but extending it to the social and economic needs of the people, and to meeting economic hazards.


John Horne Blackmore: I think that is fair enough. I am going to be a little more specific. If men are to have the greatest opportunity to work in the production of shoes, then the people of Canada must be in a position to buy the maximum number of shoes that they need. The same principle would apply to all the commodities Canada is able to produce. If the people are not able to buy shoes, then people certainly are not going to be employed in producing shoes. The same is true with respect to all industries in Canada.
This means that probably we are not going to depend upon the wages which industry at present feels able to pay; we are going to find means of supplementing wages and incomes. We may even go so far as to make use of a dividend in order to enable the people to consume. I have not said much about dividends, but probably it is about time that many members of this house began to contemplate them seriously. The family allowance is an example, although that is just a meagre, halting, hesitating little device; in the light of the potential productive capacity of Canada, it- is almost contemptible. However, I think the Prime Minister deserves credit for taking a step along this line. I just wanted to make sure that the Prime Minister saw the possibilities that were involved. The paragraph reads:
"reconstruction" means the reestablishment in civil life and reemployment on demobilization of the men and women of the armed services, of persons released from war industry, and the reorganization of industry, in order to provide maximum production. . . .
You cannot have a maximum production of cheese unless every person in Canada can eat all the cheese he needs. Nor can you have a maximum production of strawberries unless everybody in Canada can have all the strawberries he needs. You can say the same about the whole list of commodities. In drafting this statement the Prime Minister has gone a long way,, provided that it can be worked out to mean just what the words should mean. This paragraph goes the full limit of social credit. I just wanted to make that clear, although I do not believe the Prime Minister had any such thing as that in mind. However, I hope he did and I thought it would be worth while to bring it up.

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There is another point involved here and I want to make sure that the Prime Minister agrees with this. Not only must prices of wheat, milk, beef and other primary products have a floor, but the floor must be high enough to stimulate the maximum desired production of all those commodities in Canada. This does not mean that the increased price, we will say, of beef or milk or any other primary product must be paid by the consumer. In other words, there will be a subsidy perhaps, where necessary, paid to the primary producer which might raise the price of a bushel of wheat, for example, to SI.25, whereas the consumer would have to pay only seventy-five cents a bushel. This sounds strange to orthodox ears, but it is not strange to men who see visions of the possibilities of a new order. The device has already been used in Britain of paying to primary producers seventy-five cents a dozen for eggs and letting the consumers have the eggs for fifty cents a dozen. Under a new order the difference will not be paid through taxing the people or by borrowings from the people, but will be paid with money which will represent the production of the country and will be governed only by the extent of the production of the country.
I set out to point out that this really means that prices to primary consumers will be so high as to include not only the cost of production but a fair remuneration which will justify the primary producers in going forward with a generous production programme. I presume that the Prime Minister had that in mind.


William Lyon Mackenzie King: If I may refer first to the question asked by the hon. member for Cape Breton South as to whether the merchant marine is included, I was perfectly sure that it vras included. If it had been twenty-five minutes past ten o'clock on Monday morning, instead of twenty-five minutes past ten o'clock on Friday night I would have caught my hon. friend's point at once. In the definition of "industry" my hon. friend will see that transportation is included. Paragraph (b) states:
(b) "industry" includes merchandising, manufacturing . . . transportation, . . .
And so forth. He will also see that the definition of "reconstruction" includes "maximum production and full employment during and following the change over from war-time production of industry to peace-time production". So that, reading the two together, my hon. friend will see that the merchant marine is included. I felt that it would be there in one form or another. There is extra emphasis given to what relates to the armed forces.
In answer to the hon. member for Lethbridge I do catch at times what I think is his meaning. Then it sort of fades out because I catch something else from what he is putting forward. As nearly as I can gather, he is concerned that this legislation aims at maximum employment, and I agree with him in that.


John Horne Blackmore: I am merely pointing out what it really involves. If the legislation is to attain actually and in fact what the wording of this paragraph implies, then a technique will be involved which will include the measures I have indicated. It will include a scientific adjustment of prices, a scientific adjustment of wages by wage bonuses, the distribution of consumers' purchasing power which will probably make the dividend advocated in Alberta look rather pale. I hope that all members on the treasury benches can get this idea without too much suffering on the part of the Canadian people, because it is the Canadian people who will suffer; it is not you men, not directly. I hope that you can get this idea before it is too late. You cannot be sure that you are going to be able to sell Canadian cheese abroad, but if you manage the economy of this country aright you can be sure that you will be able to sell in Canada all the cheese that all the Canadian people will eat. That is what is involved.


Humphrey Mitchell: What about wheat?


John Horne Blackmore: You can sell all the wheat in Canada that all the Canadian people can eat. The same rule applies to every commodity.


Humphrey Mitchell: You would have a great time eating all the wheat we produce.


John Horne Blackmore: I did not say that you would eat all the wheat. You will have a hard enough time getting this into your head if you take just what I say, and do not imagine things I did not say. That is one of the difficulties with a lot of men. They do not take what was said but take what they imagine was said. What is said is strong enough.
What I have to say, Mr. Chairman, is simply this, that if we take pains to see that the Canadian people have consumer purchasing power with which to absorb and use the products of our industry, both primary and secondary, at fair prices, we can be sure of that much. We cannot be sure of selling any given amount of our goods abroad. We want to sell as much as we can abroad without hurting anybody else, but we do want to make -sure of this home market. I believe that tli
Department of Reconstruction

way in. which this paragraph is worded implies all these things, but I am not at all sure that the draftsman of this bill had these things in mind.


Mr. ISNOR:: Mr. Chairman, I have so far refrained from taking any part in the discussion of this bill because I felt that what I have to say could be very well said on this section. Because of the mention of casual labour by the Prime Minister I should like to draw to his attention and that of the government the position of the waterfront worker. In 1936 Canada brought into effect the national harbours board, which took 'in the *eight national harbours throughout the dominion with an investment of something like $224,000,000 A large number of men are *employed at the various ports as casual labour handling incoming and outgoing freight. On the Atlantic coast at both Halifax and Saint John these men work for something like four :to five or six months a year on the waterfront ;and they have to depend for the rest of the year on what they earn during the period they are employed. I feel that if we are to take care of labour, it is that type of employment that we must provide for. The present Minister of Labour brought into effect last year a measure under which he organized a labour pool and guaranteed a certain number of men, roughly seven hundred, a floor wage at waterfront work during the full season. I am going to suggest to the government that the national harbours board consider taking over the complete handling of freight at all ports throughout Canada. It would give the national harbour's board something definite to deal with. They deal with transportation, and the handling of incoming and outgoing freight is part of the transportation problem.
I am suggesting that, with the large investment which the government now have in national harbours throughout the dominion, they could very well take up this question of labour and guarantee the men an annual wage instead of three to six months' employment, so that the mein may be on hand at all times and able to handle freight in the most expeditious manner. They might also extend their activities by buying proper equipment for handling freight in the various ports and thustadd to the efficiency of the operations. I believe that the government would be well advised to take -over, under the jurisdiction of the national harbours board, the work of the longshoremen, the checkers, the freight handlers and all skilled and unskilled labour on the waterfront. If a plan were inaugurated whereby this could be done it would lead to greater efficiency. I would further suggest a preference such as wa3 (Mr. Blackmore.]
brought into effect by the late Right Hon. W. S. Fielding. He allowed a ten per cent preference for freight coming through Canadian ports. I believe that the ten per cent preference should be again allowed in respect of all outgoing freight and at least five per cent for all incoming freight handled through Canadian ports. This would add to employment on the waterfronts; and I advocate, as a measure of fairness and justice to the men engaged there, that the government give serious consideration to setting a floor weekly wage for those who are now known as casual labour. I offer these as constructive suggestions.


William Lyon Mackenzie King: My hon. friend has anticipated what is implied in section 6, as giving power to the minister to enable him to perform the duties imposed upon him by the bill. I might mention paragraph (c). The minister may-
. . . consult with representatives of primary producers; industry, science and labour upon any question connected with reconstruction.
The section also mentions the possibility of conferring with other parties. I believe that under that section the minister would) take up immediately" with the Minister of Transport what my hon. friend has suggested, and also confer with labour organizations on the matter to which he has referred. My colleague the Minister of Pensions and National Health has directed my attention to the clause which gives the minister power-
... to coordinate the actions of other departments and agencies of the Government of Canada for the purpose of ensuring that the transition from a war-time to a peace-time economy shall be effected as quickly and as smoothly as possible.
There are apparently several clauses which have been drafted for the purpose of enabling just such steps to tbe considered by the minister as my hon. friend has suggested; and his suggestion is a helpful one.


[Stage Direction]
Section agreed to.
On section 3-Establishment of department.
Mr. MacNIOOL:: I assume that the meaning of subsection 3, that such employees as are necessary may be appointed in; the manner authorized by law, means, through the civil service commission?


William Lyon Mackenzie King: That is correct.


[Stage Direction]
Section agreed to.
On section 4-Duties of the minister.
Grote Stirling: Were it not for the last six words of this section I should look upon this measure as one which provided for the coordination of plans only. But "provide for

Department of Reconstruction
the carrying out thereof" may imply a good deal more than. that. Would the Prime Minister say what he means by the six words?


William Lyon Mackenzie King: Yes. My hon. friend has the correct interpretation. The duty of the minister will be not merely to see that plans are formulated, but to see that such plans as have been framed for the purpose of reconstruction are carried out. The minister will be a member of the cabinet. So far as the plans relate to those made by government departments, I assume he would proceed first of all by consulting his colleague of the department concerned. If that were not adequate to ensure .the carrying out of the plans, he would bring the matter up in cabinet, and the cabinet itself would exercise its collective authority to see that the right steps were taken.


Grote Stirling: What would be the relation between this new department and the other departments of government? For instance, the Department of Public Works deals principally with construction. After these years of war, when money has been spent for little other than war purposes, there certainly will be extensions of public buildings, for instance, to mention one thing. I can imagine that the Minister of Public Works might have fairly strong opinions as to what programme should be laid before council and what should be undertaken. Would that programme have to be submitted to the Minister of Reconstruction for his approval before it goes forward to the council?


William Lyon Mackenzie King: I assume the first step the Minister of Reconstruction would take would be to get in touch with every department of government which is undertaking any form of reconstruction work. He would assemble their various projects; he would See, first of all, if there were any overlapping in government departments, whether there was a symmetry about the whole. Any question which was likely to arise, he would take up, in the first instance, with the minister of the department concerned. If there were a difference between them he would bring that matter to the cabinet to be settled there. That would be the method of proceeding.


Clarence Gillis: The parliamentary committee on reconstruction made two reports to the house and certain specific recommendations of projects across the country. Will these reports be considered by the new minister?


William Lyon Mackenzie King: Undoubtedly, yes.


Clarence Gillis: Are the recommendations in the reconstruction committee's report to the
house to have any weight, or has the new ministry the authority either to implement or reject them as it sees fit?


William Lyon Mackenzie King: I am sure the minister will welcome, above everything else, any recommendation which comes to him from a committee of parliament. I have no doubt the minister would be the first to recognize that the work which has been done by the committee on reconstruction is just the kind of foundation he requires to begin his work effectively. If it came to a question of whether or not a recommendation should be accepted, someone has to make the final decision. I would say that the minister would be the person who would decide, unless it was some question which should come up to the cabinet as a whole.


Agar Rodney Adamson: I think the hon. member for Cape Breton South is referring also to the subcommittee reports, the James committee and the Wallace committee, particularly the one on natural resources, which was, I think, an excellent report and should receive careful consideration.


William Lyon Mackenzie King: Yes. I believe that, in speaking on the second reading, I took care to refer to these different reports, all of which are exceedingly valuable and practically all of which have been carefully studied already by government officials in the different departments and to a considerable extent by members of the government.


Mr. ESLING:: Would the Prime Minister say how far the jurisdiction would extend in relation to the construction of buildings? Does it extend to the municipalities, or is the extent of a piece of construction governed by the cost?


William Lyon Mackenzie King: The question my hon. friend has asked is, I think, very much to the point. He has just mentioned the construction of buildings by municipalities, and reference has been made to the construction of buildings by the federal government. We may assume that there will also be construction of buildings by provincial governments. Part of the task of the minister-I do not mean actually the minister himself, but his deputies and the experts who are advising him-would be to collect all information possible on what has been done in the construction, for example, of public buildings. If it were found, say, in one community that the municipality intended to construct a building, the province a building, and the federal government a building, part of the duties of the minister would be to call attention to that fact and to say, "Can we
Department of Reconstruction

not in some way see that these three buildings are not put up all at once? We may have a shortage of work later on and we had better reserve this project against such a contingency." That is only an illustration, but the minister's main job would be to apply common sense to the situation which all would be interested in meeting in the most satisfactory way.


William Kemble Esling: Does it apply to private enterprise or only to public buildings? You cannot construct a building, even a $2,000 building, in a municipality without having first secured a permit from the city clerk or the municipal authorities. Therefore the point is: Is the jurisdiction of the municipality subservient to that of the minister or to this section of the bill? It seems far-fetched surely that this federal government is going to the municipalities to say whether a man shall put up a building or not.


William Lyon Mackenzie King: My hon. friend has entirely misunderstood my view if that is the interpretation he puts upon what I have said. The municipality itself, I believe, would welcome all the information it could get with regard, for example, to public buildings to be constructed within its boundaries. The dominion will not invade the jurisdiction of a municipality; it will not invade the jurisdiction of the province. It will give all the assistance it possibly can both to the municipality and to the province with respect to the best way of maintaining employment in the community, not for to-day only but for a period of years.


William Kemble Esling: I do not care to be persistent, but I should like the Prime Minister to make this clear. Does the federal government invade the jurisdiction of the municipalities in the construction of buildings by private enterprise, or does this section refer only to public buildings? As it stands, it certainly means jurisdiction over the erection of buildings in municipalities, just exactly as it assumes jurisdiction to-day under the building controller. If it does not mean invasion of the jurisdiction of the municipalities, then I think it should certainly be made specific in this clause because one cannot interpret it in any other way.


William Lyon Mackenzie King: I think the
word "observation" would be better than the word "jurisdiction" or the term "invasion of jurisdiction." It will be part of the duties of the minister to observe widely what is taking place, but not to seek to enforce jurisdiction on any one. Perhaps what my hon. friend has mostly in mind is this:	Is this an effort
to have the government do things which

private enterprise ought to do? If that is the point, the government would prefer to have private enterprise do whatever it can in the first instance, and it will encourage enterprise as much as possible. But where private enterprise is clearly not able to provide the needed employment, the government ought to come in and assist in preventing unemployment.


William Kemble Esling: I hope I shall be forgiven
for being persistent, but I should like to ask whether, in the construction of a block, let us say, it will be necessary to apply to the minister for a permit, or does he relieve himself of all that responsibility? To-day such an application is necessary under war conditions, under the building controller. The minister has before him an application from, let us say, the city of Nelson. Let us take a particular case in point. A man was required by the chief of the fire department or by the city authorities to remove a certain building which had been constructed a number of years before. All right. By so doing the city loses taxes on that building; it loses revenue from taxation. At the same time, the owner is saddled with about $250 annually of taxes on property from which he receives no revenue. He arranged with the two adjoining buildings to use the fire walls of each building. In order to secure supplies he tore down an old mining building to obtain the necessary steel beams and the necessary heavy timbers and joists, but he has to come to this department to secure a permit to reconstruct that building under such conditions. My simple question is:	Under
the terms of this section, must a private citizen in any municipality, large or small, come to the federal government or to the minister for a permit in order to proceed with the construction of a building?


William Lyon Mackenzie King: There is
nothing in this section which imposes that obligation or establishes that jurisdiction. The condition to which the hon. member has referred is one arising out of the war. During the war it has become necessary for the federal government to give priority to war purposes over other civilian requirements when there is a limited supply of materials. But we hope that as soon as the war is over, the restrictions which have been imposed will be gradually removed and that we shall get back to a condition where there will be as little interference as possible with private initiative and enterprise.


William Kemble Esling: But this applies to post-war conditions and we must accept these clauses as the English language expresses them. It is

Department oj Reconstruction
not made clear whether one will have to apply to the federal government for a permit. If that is the case, why not make it clear?


William Lyon Mackenzie King: The condition to which my hon. friend refers is one that arises out of restrictions imposed for a specific purpose, namely, to meet situations that have developed during the war. There is nothing to be gained by putting in this statute a provision that these particular restrictions will be removed later on. They are imposed by virtue of the War Measures Act. I cannot say at the moment how soon these restrictions can be removed. It may be possible to remove some the day after the armistice; it may be necessary in some cases to wait a little time. But there is nothing in this section that creates any permanent restrictions.


Grote Stirling: Is not this the point? This bill does not empower the minister to forbid any piece of construction in a municipality?


William Lyon Mackenzie King: That is correct.


[Stage Direction]
Section agreed to.
On section 5-Duties of the minister.
John Ritchie MacNicol: I have a few questions with regard to paragraph (a). Reference is made to employment in industry. My first question is: Does this refer to employment of men and women in industrial plants engaged in some way in the production of munitions, or does it refer to men and women in private plants not in any way engaged in producing munitions as coming under the minister's duty to provide employment?


William Lyon Mackenzie King: As I read the section it first of all emphasizes the importance of the minister giving his attention to the members of the armed forces and those who are engaged in war industries. That is the purpose of the section.


John Ritchie MacNicol: Does that apply to plants not engaged in war work?


William Lyon Mackenzie King: That particular section does not apply to them, but the general purpose of the minister would be to seek to further full employment in industry generally. To that extent it is part of the minister's business to get as much information as he can that will help towards that end.


John Ritchie MacNicol: Paragraph (c) of section 5 reads:
to formulate plans for industrial development and conversion. . . .
In carrying out his duties would the minister be able to initiate programmes such as obtained in England prior to the beginning of the war when the British government by regulation insisted on the necessity of fifty per cent British content in any goods imported into England for exportation to Europe, or any goods made in England for exportation to Europe. Would the minister have anything to do with making a regulation like that?


William Lyon Mackenzie King: I think that would be a matter of government policy as to the extent of assistance to be given to industry and the like. That would be a matter of policy to be settled by the government. The reference here is to formulating plans for industrial development and conversion. The emphasis is rather on the general policy of bringing forward different projects for new developments or civilian uses for war plants, with a view to having them carried out. There is nothing to prevent the minister from making a recommendation such as my hon. friend has mentioned, but the paragraph does not impose on the minister any obligation of the kind.


John Ritchie MacNicol: That is a fair answer. The paragraph refers to formulating plans for industrial development. Would that enable the minister to surround himself with capable industrial advisers to inaugurate new lines of manufacturing by making a survey of what we now import with a view of ascertaining if some or all those lines could be manufactured in Canada?


William Lyon Mackenzie King: Yes. I think the next section answers my hon. friend's question as -to how he might go about it. The explanatory note refers to powers of the minister. The section reads:
The minister, to enable him to .perform the duties imposed upon him by this act, may: . . .
And then paragraph (e) is as follows:
inaugurate conferences of representatives of primary producers, industry, science and labour as well as representatives of dominion, provin-' cial and municipal authorities engaged or likely to engage in any reconstruction plan.
The minister can bring together any experts he believes will be helpful to him, whether they are individual experts or representatives of industry or officers of industrial establishments, and get their advice with relation to plans for industrial development.


John Ritchie MacNicol: Under paragraph (c)
would the minister have power to consider and perhaps order, as a means of giving vast employment, the initiating of works such as a canal around the Fort Vermilion rapids on

Department of Reconstruction

the Peace river and again around the Fort Fitzgerald and Fort Smith rapids on the Slave river, since the elimination of those rapids would permit the free transportation of coal from Hudson Hope on the Peace river right down to Aklavik, and that Canadian coal could be used for the heating of the north country? Would he have the authority to initiate such works as that?


William Lyon Mackenzie King: My reply would be that undoubtedly the minister will welcome suggestions from all sources, and particularly from members of parliament, as to where it might be possible to further some national need or purpose by particular industrial or public works projects such as my hon. friend has mentioned. In the case mentioned by my hon. friend, if he were to speak to the minister himself, the minister would then, I assume, confer with the officials of the Department of Public Works, or the Department of Transport, or whatever departments are concerned, and would ask: "Has this project been considered? Here is a matter that ought to be looked into. If it is thought that that particular area is in need of development works, had we not better consider this among others?" I would not say that the minister would be able to get his way all the time, but certainly that would be one of the things which he would wish to bring to the attention of the departments concerned. In the light of the expenditures involved in the whole programme it might be necessary for the minister to weigh those different projects and come to the cabinet and say: "Here are so many. I would strongly recommend that we do a certain amount." He might not recommend the whole. The government policy as a whole would decide on how far it would be possible to go.


John Ritchie MacNicol: I have in mind northern Alberta. I am not sure that the government of Alberta have assisted but I am sure they would. In northern Alberta there is a movement to develop the vast coal resources at Hudson Hope and to take them by water down the river. They could then come down as far as Peace River town with very little dredging in the river. The construction of the two canals I mentioned would permit them to take the coal right down to Aklavik at the mouth of the Mackenzie river where they certainly need coal and where coal now costs a tremendous sum of money, because it is taken from away to the south of Edmonton by rail up to Waterways and then on down from there another 1,661 miles. I certainly would strongly advise the new minister to consider that as a project. It would create 
a lot of work and help open up that great country.
Section stands.
Progress reported1.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Monday, June 26, 1944