1944-06-12

Hon. T. A. CRERAR (Minister of Mines and Resources):: I desire to table parliamentary return, reference No. 193, asked for by the hon. member for Lake Centre (Mr. Diefenbaker), a statement showing location of and prices paid for all properties purchased by the government during 1941 to 1943 in Manitoba, Saskatchewan and Alberta.
I should like to make this comment, if I may: The preparation of this order involved a great deal of work. I have in mind the possibility of similar questions being asked as to the acquisition of properties under the Veterans' Land Act, with details of purchases, locations and descriptions. A great deal of work would be involved in that; therefore this should not be taken as a precedent.



CANADIAN FORCES


Hon. W. P. MULOCK (Postmaster General) :: I wish to advise members of the house that, as a result of the combined efforts of the Minister of National Defence, the Minister of National Defence for Air, and myself, a new system has been developed for the sending of cigarettes from Canada to members of the armed forces in Italy which will result in the equivalent of air mail service.
It is hoped soon to have a similar system in operation for the members of our forces serving in Britain and France. The new system of handling cigarettes addressed to members of the forces in Italy goes into effect on June 19, and simply described, involves the sending by air mail of addressed labels, representing cigarettes ordered as at present in Canada to a Mediterranean depot, where they

Canadian Forces
will be drawn against a large reserve of cigarettes which has been built up over a period of time by bulk shipments.
Under the new arrangement, the individual sending the cigarettes is relieved of the possibility of loss between the tobacco company in Canada and the cigarette depot in Italy, as the Post Office Department is assuming responsibility for loss, if any, of the bulk shipments. In addition, it is expected that the new plan will result in a marked speeding up of deliveries. From the standpoint of the mailing public, there is no change in procedure. Orders will be placed in the same manner as at present, either with the tobacconist or direct with the company. When the company receives the order, a label covering each standard package of three hundred cigarettes ordered will be prepared, complete with postage and particulars. The labels will then be recorded by the Post Office Department and sent overseas by air transport. Upon arrival at the tobacco depot, the labels will be attached by members of the postal corps to parcels of the particular brand of cigarettes ordered and will then be dispatched to the addressee. The scheme has a particular advantage in that if any plane carrying labels is lost the labels can be quickly duplicated and the orders filled as if no loss had occurred. Replacement stocks at the depot in Italy will be forwarded in bulk shipment.
I have referred to standard packages of three hundred cigarettes. The efficient operation of the plan makes it necessary to adopt this size of a parcel, and after June 19 all cigarettes forwarded for men overseas must be in this size. The plan will not affect the present practice of certain auxiliaries, associations or other agencies sending bulk shipments of cigarettes for impersonal distribution to units or generally throughout the forces.
Orders for delivery under the new plan will be accepted for Sweet Caporal and Winchesters of the Imperial Tobacco Company, British Consols and Exports of W. C. Macdonald Incorporated; and Buckinghams and Wings of Tuckett Limited.
Persons wishing to order cigarettes from tobacco 'companies other than those mentioned may continue to do so, but in these cases the individual parcels will continue to be handled as at present. These orders also, however, must conform to the three hundred cigarette standard package.
As a further result of the scheme, it is anticipated that later on, possibly within a month, a system will go into effect whereby
members of the armed forces overseas will be able to purchase cigarettes direct from the overseas tobacco depots at the rate of three hundred for the equivalent of one dollar.

CANADIAN WOMEN'S ARMY CORPS PIPE BAND-[DOT] DRESS
On the orders of the day:


Mr. JAMES SINCLAIR (Vancouver North):: Mr. Speaker, I have a question to ask the minister of National Defence of interest to all the Canadian Scottish regiments, and one which I believe will be of interest also not only to your Honour, but also to the other seventy hon. members who, like yourself, are either of Scottish birth or of Scottish descent. On Saturday afternoon I had the pleasure of hearing the very excellent pipe band of the Canadian Women's Army Corps when it appeared on parliament hill. I was surprised, however, to find that they were not attired in the dress characteristic of a pipe band. The members of the British Army Women's Corps Pipe Band wear tartan kilts; indeed, any recruits to the corps enlisted in Scotland may wear the kilt. I would ask the minister whether consideration will be given to outfitting in a similar fashion this fine pipe band, made up of members of the Canadian Women's Army Corps.


Hon. J. L. RALSTON (Minister of National Defence):: I can assure my hon. friend that I shall be glad to consult him in the matter. Having been myself a member of a Highland battalion, I agree with him that all possible steps should be taken to see to it that there is strict observance of the dress regulations of the Highland clans.


Mr. HANSON (York-Sunbury):: Why should not the minister consult other Scottish members of the house? Why pick out the hon. member for Vancouver North?



QUESTIONS

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

Mr. GERSHAW:: 1.	Will the government get a report from the P.F.R.A. officers regarding the conditions of the grain and grass crops and the stock watering places in southern Alberta?
2.	What steps are being taken to make use of the available water in the streams from the hills and mountains in working out some long term drought area policy in the above area?
Questions


Mr. CRERAR:: 1.	Through the field staffs under the Prairie Farm Rehabilitation Act and the Prairie Farm Assistance Act, and other departmental officers, the Department of Agriculture is kept informed of the crop and moisture conditions in Alberta. At the present time the district engineers under P.F.R.A. are making a check to determine the extent of the water reserves in the dams and dugouts in the Lethbridge and Medicine Hat areas.
2.	It has been recognized for a great many years that the best way to make use of the water supply of the streams of Alberta is by a series of storage reservoirs on, and adjacent to, streams where high flows and flood flows occur periodically, in order that such water can be held over and used beneficially when the stream flows are low.
The dominion reclamation service, recognizing the necessity of storing the high flows, made preliminary surveys of a great many storage sites in the foothills and mountains. The prairie farm rehabilitation organization have access to all of the information and plans made by the reclamation service and it has been the policy, as funds and staff have become available, to make detailed surveys of those various sites.
Until tests have been made to determine foundation conditions it is not possible to determine the feasibility of reservoir sites. This is the information now required in connection with all of those sites which have been already investigated by the reclamation service and the P.F.R.A. The policy of the P.F.R.A. is to continue investigations of storage sites on the mountain streams particularly with regard to foundation conditions.
In addition to these major works, planned for future construction, the sum of $366,384.66 has already been expended in Alberta under the Prairie Farm Rehabilitation Act on projects designed to conserve and use the water of rivers and streams in Alberta.


R.C.A.F.-EQUIPMENT DEPOTS-STATIONERY AND PRINTING DESTROYED
Mr. BENCE:: What was the total cost value of stationery and printing destroyed in R.C.A.F. equipment depots, in each of the provinces of Manitoba, Saskatchewan, and Alberta, during the twelvemonth period from May 1, 1943, to May 1, 1944?


Mr. POWER:: 1.
No. 7 equipment depot, Winnipeg,
Man	 $2,630 42
No. 11 equipment depot, Calgary,
Alta	 1,689 60
Total	 $4,320 02
TMr. Gershaw.]
There is no equipment depot in Saskatchewan.


CANADIAN ARMY-ACCIDENT ON BIG BEND HIGHWAY, B.C.
Mr. GREEN:: 1.	Has there been any investigation' into the fatal accident which occurred on the Big Bend Highway in British Columbia on or about the 23rd May, 1943, when an army truck crashed through a bridge over the Goldstream creek?
2.	If so, what was the result of such investigation?


Mr. MACDONALD (Halifax):: 1.	Yes. The matter is being investigated by a court of inquiry.
2.	The result of the investigation is not yet available.


STEVENSON AIRPORT WINNIPEG
Mr. KNOWLES:: 1.	Has the Department of Transport received from the St. James-Winnipeg airport commission, since May 22, 1944, a further proposal for the enlarging of Stevenson field?
2.	Is consideration being given by the government to the granting of official approval to the plans proposed by the above commission?
3.	Is consideration being given by the government to joining with the local, provincial and municipal governments in supporting the foregoing proposal ?
4.	If not, has the government any alternative
plans for the enlarging of this airport?


Mr. CHEVRIER:: 1.	Yes. Letter dated May 28 has been received.
2,	3 and 4. The St. James-Winnipeg airport commission have been advised of the government's desire to cooperate fully with the commission in the further development of Stevenson airport when conditions necessitate its extension. No commitment for any financial assistance under present conditions has been made.


BRITISH COLUMBIA STRAWBERRY AND RASPBERRY PULP
Mr. CRUICKSHANIC:: 1.	Was the strawberry and raspberry pulp, or So2 production of British Columbia placed under allotment for sale to manufacturers in 1943?
2.	If so, what was the total quantity of each exported from British Columbia for this purpose?
3.	What was the average price paid for strawberries and raspberries under this order?
4.	Could shippers export as the pack became ready?
5.	Who financed the pack being held for export to eastern manufacturers, and to the order of munitions and supply?
6.	What other provinces came under this order?

Questions


Mr. ILSLEY:: 1.	Yes, except the pulps packed for the packers' own use in British Columbia.
2.	Strawberries, 647 barrels; raspberries, 2,505 barrels.
3.	Strawberry pulps; approximately 18Jc. per pound of fruit, f.o.b. plant in B.C.
Raspberry pulps; approximately 17^c. per pound of fruit, f.o.b. plant in B.C.
4.	No.
5.	The packer.
6.	None.


CANADIAN ARMY-SOLDIER ROY, CHAUDIERE REGIMENT, SUSSEX, N.B.
Mr. POULIOT:: 1.	Was a soldier by the name of Roy, blind in one eye, placed in category "A" in the Chaudiere regiment, while that regiment was at Sussex, N.B.?
2.	If so, was he sent overseas?
3.	Was he placed in another medical category while in England, and was he sent back to Canada because his medical category had been lowered ?
4.	Was he retained in the army in Canada?
5.	If so, where, and what are his duties?
6.	What is his present medical category?
7.	In what medical categories was he placed, on what dates, and by what physicians?


Mr. MACDONALD (Halifax):: With the information available it has been found impossible to identify this soldier. I have spoken to the hon. member for Temiscouata, and I would ask that this question be dropped.
Question dropped.


CANADIAN ARMY'-SOLDIER PARADIS, CHAUDIERE REGIMENT, SUSSEX, N.B.
Mr. POULIOT:: 1.	Was a soldier named Paradis who was totally deaf placed in category "A" while he was in the Chaudiere regiment at Sussex, N.B.?
2.	Was he sent overseas and, if so, when?
3.	Was his medical category lowered while he was overseas, and was he sent back to Canada as unfit for military service and, if so, when?
4.	Afterwards, was he sent back overseas?
5.	If so, was he cured of his deafness, and when ?
6.	Is he now a staff sergeant in the Quebec regiment overseas?
7.	In what medical categories was he placed, on what dates and by whom?


William Chisholm Macdonald: On the assumption that the soldier referred to is E11014, Sgt. Joseph Paradis, the information is as follows:
1.	No. He was not totally deaf. He was placed in category "E" at Sussex, N.B., and later placed in category "A" at Quebec, P.Q.
2.	Yes. 20th July, 1941.
3.	His medical category was not lowered overseas and he was not sent back to Canada as unfit for military service, but was returned in March, 1942, for instructional duty with the newly mobilized 6th and 7th divisions.
4.	No.
5.	Answered by No. 4.
6.	No. He was discharged as medically unfit on 5th January, 1944.
7.	Category "A", 12th September, 1939, medical board, Quebec, P.Q.; category "E", 24th April, 1941, medical board, Sussex, N.B.; category "A", 6th June, 1941, medical board, Quebec, P.Q.; Pulhems 1115111, 7th December, 1943, medical board, Dartmouth, N.S.


DEPARTMENT OF LABOUR-EMPLOYMENT SERVICE AND UNEMPLOYMENT INSURANCE BRANCH
Mr. COTE:: 1.	Who is the officer appointed by virtue of order in council P.C. 7994 to take charge of the employment service and unemployment insurance branch in the Department of Labour ?
2.	What control, if any, does he have, (a) on the officers and other staff of the unemployment insurance commission; (b) on the regional and local offices of the said commission?
3.	To whom is this officer referred to in the preceding questions directly responsible for his administration of the employment service and unemployment insurance branch?
4.	Who are the executive officers of the said branch and what is their respective representative capacity in relation to, (a) the employer; (b) the worker; (c) the Canadian taxpayer?
5.	Has the unemployment insurance commission any responsibility whatsoever and, if so, what is the nature of that responsibility, for the administration of the employment service and unemployment insurance branch?


Mr. MITCHELL:: 1.	Mr. Allan M. Mitchell, U.I.C. commissioner.
2.	(a) The control as outlined in sections 1 and 5 of P.C. 7974; (b) see (a).
3.	Defined under sections 1 and 5 of P.C. 7994.
4.	H. F. Caloren, chief executive officer; W. K. Rutherford, chief employment officer; R. G. Barclay, chief insurance officer; T. R. Walsh, chief of the legal division, (a), (b) and (c) All are civil servants.
5.	The responsibilities of the unemployment insurance commission are those described in section 1 of P.C. 7994, and those of the individual commissioners are as set out in sections 2, 3 and 4 of the same order.
Questions

WHEAT MARKETED BT FARMERS, 1935-36 to 1942-43 Mr. FAIR:
How many -bushels of wheat were marketed by farmers in Canada in each of the crop years, 1935-36 to 1942-43 inclusive?


Mr. MacKINNON (Edmonton West):: Marketing	Millings	
	Prairie	Ontario	Total
	provinces1	wheat2	
bushels	bushels	bushels1935-36...	. 216,273,373	3,687,710	219,961,0831936-37...	. 165,628,731	3,251,912	168,880,6431937-38...	. 125,471,078	3,664,256	129,135,3341938-39...	. 290,539,457	3,213,687	293,753,1441939-40...	. 427,312,750	4,716,754	432,029,5041940-41...	. 458,382,611	5,129,701	463,512,3121941-42...	. 227,854,572	3,962,862	231,817,4341942-43...	. 268,219,159	5,120,631	273,339,7901 Including receipts at	internal	private and
mill elevators from 1940-41.
2 Only figures available on marketing of wheat in eastern Canada.


COORDINATION OF PRODUCTION
Mr. FACTOR:: 1.	Is Mr. H. J. Carmichael, coordinator of roduction and chairman of the production oard, a dollar-a-year man, and what is his per
diem or expense allowance?
2.	Is he in the employ of General Motors of Canada, Limited?
3.	Is he on the payroll of the company?
4.	Is he a director of the company?
5.	Has he severed all connection with General Motors of Canada, Limited?


Mr. CHEVRIER:: 1.	Mr. H. J. Carmichael, coordinator of production and chairman of the production board, was invited by the Minister of Munitions and Supply to join the department and on January 13, 1941, he accepted the position of director general, gun production branch. Since the date of his appointment he has accepted no salary, per diem allowance or expenses.
2.	No.
3.	No.
4.	No.
5.	Yes. Mr. Carmichael resigned his position as vice-president and general manager of General Motors of Canada, Limited, on January 13, 1941.


SOLDIER SETTLEMENT-ALBERTA
Mr. HANSELL:: What lands south of township 20 in the province of Alberta have been purchased since 1939, for the purpose of rehabilitation of soldiers under the soldier settlement scheme?


Ernest George Hansell: In view of the information asked in the question immediately preceding this one on the order paper, in the name of the hon, member for Battle Rivef, (Mr. Fair) which has been allowed to stand, I would ask that this question be dropped and I will reword it. Part of the information I desire may be found in the answer to the previous question when it is brought down.
Question dropped.


MOBILIZATION ACT-PERSONNEL IN NEWFOUNDLAND  FARM LEAVE
Mr. POULIOT:: 1.	Under the mobilization regulations, are conscripts stationed in Newfoundland deemed to be overseas?
2.	If not, are they entitled to farm leave?


Mr. MACDONALD (Halifax):: 1.	N.R.M.A. soldiers serving in Newfoundland are serving outside of Canada and the territorial waters thereof, but are not serving overseas in the sense that they are not serving under the administrative control and direction of Canadian military headquarters in Great Britain but are serving under the administrative control and direction of national defence headquarters, Ottawa.
2.	Canadian army routine order 3456, appearing as an appendix to Hansard, dated 20th March, 1944, which deals with farm leave, does not apply to army personnel serving in Newfoundland. They are, however, eligible to be considered by national defence headquarters for the grant of compassionate leave on the same basis and subject to the same considerations as apply to the grant of such leave in the case of army personnel serving under the administrative control and direction of Canadian military headquarters in Great Britain.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. CORMAN:: 1.	How many fishermen lost all or part of *their fishing grounds on lake Erie to the Royal Canadian Air Force for the use of bombing and gunnery practice?
2.	What compensation was paid each pound net fisherman per year?
3.	What compensation was paid each gill net fisherman per year?

Motions jor Papers


DOLLAR-A-YEAR MEN
Mr. KNOWLES:: 1.	How many one-dollar-a-year men have been employed by the government, or any department thereof, subsequent to the information contained in sessional paper No. 139, dated January 28, 1944?
2.	What are their names, addresses, and qualifications, and on what date was each appointed?
3.	With what firm or company was each of the above employed before entering the service *of the government?
4.	Which of the above are still employed by the said firms or companies?
5.	Which of the above are still on the payrolls, or are directors, of the said firms or companies?
6.	Have any of the above firms or companies received contracts from the government since the outbreak of the present war, apart from the information contained in sessional paper No. 139, as noted above?
7.	If so, on what date or dates, and for what amount or amounts, in each case?


SYDNEY FOUNDRY AND MACHINE COMPANY
Mr. GILLIS:: 1.	Who are the owmers of the Rhodes Curry wharf at Sydney, Nova Scotia?
2.	Has the Sydney Engineering and Drydock Company the right to refuse any other company the right to use this wharf in necessary war work?
3.	How much money was paid the Sydney Foundry and Machine Company for refits for the corvettes Regina and New Westminster, in 1943?
4.	Was the corvette New Westminster, tied up from May 3, to October 1, 1943, at the Sydney Foundry and Machine Company's plant? If so, for what reason?
5.	What is the total value of capital assistance, equipment, grants or subsidies, given the Sydney Foundry and Machine Company or the Sydney Engineering and Drydock, during the years 1940, 1941, 1942, 1943, and to June 15, 1944?



MOTIONS FOR PAPERS


Mr. FONTAINE:: For a copy of all telegrams, letters, correspondence and other documents exchanged since January 1, 1943, between all persons and the Department of National Revenue regarding transfer of Mr. Bruno Forcier. customs and excise employee at Montreal, to the customs and excise office at St. Hyacinthe.


Mr. GIBSON:: Mr. Speaker, this motion
has been on the order paper since April 27. I understand that each time motions for papers have come up in the house the hon. member has been absent. I have no objection to its passing if someone would move it on his behalf.


[Stage Direction]
Motion agreed to.

Mr. GAUTHIER:: For a copy of all correspondence, letters and telegrams exchanged between the Department of Munitions and Supply, the Wartime Metal Corporation and the Siscoe Metal Limited, pertaining to the opening, operation and closing of the Montauban zinc-lead mine, in the county of Portneuf, a mine formerly operated by the British Metal Corporation and the property of Tetrault Mines.


Mr. CHEVRIER:: Return tabled.



FRENCH-CANADIAN APPOINTMENTS TO BOARDS, ETC.

Mr. RAYMOND:: For a copy of all telegrams, letters, correspondence or other documents exchanged between the premier of the province of Quebec, Mr. Adelard Godbout, and the dominion government, or any member of the dominion government, since the month of November, 1939, to the effect that French Canadians have been unfairly treated in the creation of, and the appointment of members to, the various dominion boards, commissions and organizations.



PENSIONS AND HEALTH-NEUROLOGICAL HOSPITALS OR INSTITUTES

Mr. BRUCE:: For a statement from the Department of Pensions and National Health showing the neurological hospitals or institutes in Canada, together with a copy of correspondence from the authorities controlling these institutions, addressed to the government or any minister or official of the government, regarding the need for additions or extensions to such neurological hospitals or institutes; also a statement showing the number and location of other hospitals where surgical treatment of neurological cases is carried out; also the number of neurological surgeons in Canada who confine their practice to neurological surgery.



BRITISH COLUMBIA STRAWBERRY AND RASPBERRY CROPS

Mr. CRUICKSHANK:: For a copy of all letters, telegrams, protests and other documents in the possession of the department, regarding the disposal and processing of the 1943 strawberry and raspberry crops in British Columbia, and concerning administrator's orders A-794 and A-1200.



LABOUR CONDITIONS-CARPENTERS AND JOINERS, WINNIPEG  CANADA PACKERS

Mr. KNOWLES:: For a copy of all records of proceedings and records of decisions, dated since April 20 1944, with reference to the appeal of the United Brotherhood of Carpenters and Joiners of America, Winnipeg local union No. 343, from the action of the national selective service office, at Winnipeg, in directing one or more members of said union to accept employment with Canada Packers Limited, of St. Boniface, Manitoba, at a wage rate of 54J cents per hour. Also for a
Inter-American Commission

copy of all communications and memoranda, to and from the Minister of Labour, dated since the hearing of the above appeal, with reference to the implementing of any recommendation respecting the payment of supplementary allowances to the aforesaid union members; also for a copy of any orders in council relating thereto.



UNEMPLOYMENT INSURANCE COMMISSION- PROVINCE OF QUEBEC

[Stage Direction]
Mr. COTE;
For a copy of all correspondence, letters, telegrams, petitions and other documents exchanged between the dominion government and any person or persons, organizations or societies, or between the dominion government and the government of the province of Quebec, concerning the establishment of a district office of the unemployment insurance commission in the city of Quebec and any municipality other than Montreal within the province of Quebec.

Mr. POULIOT:: For a copy of each one of the amendments to the national war services regulations.



MOBILIZATION ACT-REGULATIONS

Jean-François Pouliot: For a copy of all amendments to the mobilization regulations, (a) of the Department of Labour, and (b) of the Department of National Defence.



INTER-AMERICAN DEVELOPMENT INQUIRY AS TO RECENT MEETING OF COMMISSION IN NEW YORK

[Stage Direction]
On the orders of the day:
Mr. GORDON GRAYDON (Leader of the Opposition):: I understand that at the recent conference in New York of the Inter-American Development commission a resolution was adopted favouring the organization in Canada of a similar commission. I should like to know if Canada was represented at this conference officially or unofficially; if so, by whom, and also whether any report has been made by such government representative. I should like to ask also whether the government is in a position to indicate its policy with respect to the organization of such a commission in the dominion.


Right Hon. W. L. MACKENZIE KING (Prime Minister):: Canada was represented at the recent conference of the Inter-American Development commission by Mr. H. D. Scully, who is our consul general in New York. Mr. Scully was present as an observer. At the conference a resolution was passed suggesting that a similar commission be established in Canada, but thus far the invitation to establish such a commission has not been

received. Until it is received and the implications examined I think it would be well not to make any statement of policy.



CONFERENCE WITH PROVINCES


[Stage Direction]
On the orders of the day:
Gordon Graydon: What progress has been made since the Prime Minister's return from London with respect to arrangements for the dominion-provincial conference, and is the Prime Minister in a position to give any indication as to the date of the conference?


William Lyon Mackenzie King: As my hon. friend knows, in preparation for a conference of this kind a great deal of data has to be assembled, particularly on financial matters. I understand that considerable progress has been made in that connection, and in the gathering of information that would be useful to those present when the conference meets. The question of meeting the convenience of all the provinces as to the exact date of the meeting is one that presents difficulties, though not insuperable ones. At the moment I am unable to say when the conference will meet, but every effort will be made to have it assemble just as soon as all the provinces have indicated when they will be in a position to attend.



THE WAR


[Stage Direction]
On the orders of the day:
Gordon Graydon: Is the Minister of National
Defence in a position to make any statement with regard to the extent of the casualties that have been suffered by the Canadian forces in the campaign in France?


James Layton Ralston: As my hon. friend will
understand, I am not in a position to make any statement, to the extent of giving numbers or anything of that kind. I think the most I can say, in view of the messages which have been received, is that our losses are moderate, and that is particularly so when all the factors entering into operations of this magnitude are considered.
I believe it was the hon. member for Macleod (Mr. Hansell) who asked me the other night whether or not casualty lists would be furnished to members. Arrangements have been made to see to it that members will receive those casualty lists, and it is my hope

Dominion Elections Act
that they will receive them at about the same time as the lists are given to the press. This would be a complete list periodically of army casualties.



GOVERNMENT OP LIBERATED AREAS-RELATIONS WITH GENERAL DE GAULLE

[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, I should like to ask a
question of the Prime Minister. He _ will understand, from the nature of the notice I sent him, that I am seeking information which I believe would be of interest to the house and country. Is he in a position to make a statement as to arrangements made for the government of liberated areas of France, including any information as to relations between the allied military authorities and General de Gaulle?


William Lyon Mackenzie King: Mr. Speaker, I may say
that I know these matters have been the subject of consideration between Mr. Churchill, General de Gaulle and the President of the United States, but I am not in a position at the moment to make any statement as to the present position.



DOMINION ELECTIONS


[Stage Direction]
The house resumed from Friday, June 9, consideration in committee of Bill No. 135, to provide regulations enabling Canadian war service electors to exercise their franchise, and Canadian prisoners of war to vote by proxy, at any general election held during the present war, also to provide amendments to the Dominion Elections Act, 1938, which are consequential to such regulations, or have become necessary by the advent of the said war-Mr. McLarty-Mr. Bradette in the chair.
On schedule A, section 35-War service elector voting as civilian.
Hon. N. A. McLARTY (Secretary of State):: Mr. Chairman, it will be recalled that all other sections of both schedules were passed on Friday night. This was allowed to stand at the request of the leader of the opposition. The hon. member expressed apprehension that there might be a considerable number of men on furlough or on leave, and that if wider facilities could be given to enable them to vote, even though they might be some distance away from their ordinary voting places, it should be done.
I know it was the intention of the special committee which considered these regulations not to put any stumbling block in the way of those on leave or on furlough, exercising their franchise, and it was the committee's intention that they should vote in the most convenient manner. Over the week-end consideration has been given to the suggestion made. It must be remembered that the special committee broadened this regulation as widely as it thought possible, and there has been no suggestion of any attempt to curtail the right to vote of any war service elector. However, the chief electoral officer has given the matter consideration, and it is our belief that, without unduly complicating the machinery, through a slight amendment we can broaden it. Whereas under present circumstances a man in the army, the navy or the air force who is on furlough must report to the polling division of the particular branch of the armed services in which he serves, the schedule can be broadened so as to make it permissible for such member of the forces to vote before the election officer of any of the services, irrespective of the particular branch in which he serves. This change can be effected by striking out the words "of the same force" where they appear in line 44 of section 35 in the schedule, and inserting after the word "electors" in line 45 the words "by the commanding officer of a Canadian naval, military or air unit." I am advised by the chief electoral officer that this is about as broad as the provision can be made, if it is to remain practicable and workable. I believe in this we have gone some distance to meet the wishes of the leader of the opposition. To go further would make the provision impracticable.


James Angus MacKinnon: I move:
That section 35 of schedule A be amended by deleting the words "of the same force" in line 44 thereof, and by inserting after the word "electors" in line 45 the following words, "by the Commanding Officer of a Canadian Naval, Military or Air Unit."


Gordon Graydon: Hon. members will realize that this amendment is the result of discussion which took place in committee on Friday night. It appeared to some of us that men who were on furlough for any extended length of time, during an election campaign, might be discriminated against because of their being at distant points, and their not being able to reach the places designated by the act as being the proper places at which to vote. I believe finally the matter came down to a consideration of those under twenty-one years of age who, by reason of the war services voting regulations, would have the right to vote.
Dominion Elections Act

Those over twenty-one years were, of course, covered by the general civilian provisions permitting their being sworn in in rural areas. I believe it may be said properly that the only possibility of inconvenience would be in rural polling divisions, because at urban points the possibilities of service voters obtaining their right to exercise their franchise conveniently would be greater. Therefore the discussion dwindled down to a consideration of those under twenty-one years of age in rural areas. The difficulty is one of covering only a small group so as to avoid discrimination against those in rural areas.
Although I realize that there is still a possibility of some discrimination and inconvenience, at the same time I believe the suggested amendment will meet the situation, and should reduce to a minimum any possible inconvenience to service voters on furlough. No matter where a man may be, there is apt to be a camp of one of the armed services nearby where a polling booth would be within his reach. Previously that might not have been the case, and great hardship would have been worked upon some who desired to exercise their franchise and who were under the civilian age limit for voting. So far as I am concerned the amendment is satisfactory, although in some instances inconvenience may be suffered. However, I cannot see how it can be opened any wider without causing difficulties of a practical nature.


Mr. ROSS (Souris):: I supported the leader of the opposition the other night when he raised objection to section 35. In my province there are three adjoining rural ridings in which there are no training centres of either of the armed services. Am I right in supposing that any soldier at home on leave would go to the nearest training centre of any one of the armed services in order to poll his vote?


Norman Alexander McLarty: That is right.


Mr. MacNICOL:: On Friday night I listened carefully to the leader of the opposition state his case. As I remember, he raised the question of a soldier on furlough or on leave under twenty-one years of age who might be in the village of Palgrave, for instance, in the northern end of Peel. That man would have to go to some camp, such as the exhibition grounds at Toronto or a camp at Hamilton or elsewhere. I cannot see where this proposed amendment is going to improve the situation.
I do not know whether it can be improved, but I do not see that we are going to improve it by taking out the words "of the same force" and substituting "or the commanding officer" and so on. Will the minister explain just

how this proposed amendment will meet the situation suggested on Friday night by the leader of the opposition? If it does not, we may as well leave the section as it is.


Norman Alexander McLarty: As I have suggested, no matter how willing this committee may be and no matter how willing the special committee was, we cannot avoid some inconvenience. Prior to this amendment any man in the army would have had to go to army voting quarters; a man in the navy would have had to go to navy voting quarters, and an air force man would have had to go to the air force. The purpose of this amendment is to permit a man to go to any one of these.
I might point out further, as was suggested the other night by the hon. member for Vancouver North, that there are twelve days for polling available to a war service elector. You can only carry the matter to the point where you have done everything that it is practicable to do to meet the situation. If this does not meet it, I must say it is hopeless to think that any measure could be adopted to meet it unless you make the 32,000 returning and deputy returning officers throughout Canada special returning officers in order to do it. There may be some inconvenience, but in the very nature of things the war service electors will generally be in concentrated areas, and this amendment is simply to meet the exception, namely, the man on leave or on furlough or the man under twenty-one years of age. I suggest that this is all that we can safely do.


Gordon Graydon: Perhaps I might just interject a word to satisfy the hon. member for Davenport who is showing such solicitude for the people in my riding, for which I am extremely thankful. The situation in that particular area is this. Previously a man would have had to go to Toronto, and some of our people may not want to go to Toronto. But now, if lie is an army man, instead of having to go to the exhibition grounds in Toronto to record his vote he can go to the air observers' school at Malton, which is not more than half way.


James Sinclair: The average leave is only two weeks, and, with the twelve days provided by the bill, a man would be back at camp in time to poll his vote. This will apply only to men who have been repatriated from overseas or who are on one month's leave, men who are away out in the country far from any service polling station. I doubt whether there will be a hundred men affected by this.


James Arthur Ross: That all depends upon what time of y'ear the election takes place.

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Mr. FAIR:: I was a member of the special committee set up to deal with the' elections act amendment, and I feel satisfied that when we presented the report to the house everything possible had been done that could be done. As has been suggested by the hon. member for Vancouver North, these service men and women are allowed twelve days before election day in which to vote, and very little inconvenience would be caused. While I am glad this amendment has been made to broaden the provisions, I do feel that we did a pretty good job in the special committee.


James Arthur Ross: In view of the remarks of the hon. member for Vancouver North I should like to repeat what I said. There is a block of three rural constituencies in southern Manitoba where there are no training camps. Should the election be held during harvest time when many men are home on harvest leave, it will mean that they will have to get together and drive to either Brandon or Winnipeg in order to poll their votes.


James Sinclair: The election will not be held in harvest time.


James Arthur Ross: I do not know a thing about that.


An hon. MEMBER:: How far is that?


James Arthur Ross: These constituencies are all in southern Manitoba, and the men would have to go to . either Brandon or Winnipeg.


George Alexander Cruickshank: How far?


James Arthur Ross: Some of them would have to drive 150 miles.


George Alexander Cruickshank: People drive 500 miles to vote for me.


James Arthur Ross: They probably will for me, but I am thinking of the other fellows.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Bill reported.


[Stage Direction]
Hon. C. D. HOWE (Minister of Munitions and Supply) moved the second reading of bill No. 137, respecting surplus crown assets.
Richard Burpee Hanson: Mr. Speaker, this is a very important measure and one which I think de,serves a substantial amount of consideration before it receives
second reading. I regret I was unable to be here late last week when the minister introduced the measure. I am not as familiar with the subject matter as possibly I ought to be, but I am aware of the immensity of the problem that confronts the government and the nation in respect to the disposition of surplus crown assets. Some six months ago or so announcement was made of the establishment, by order in council, I assume, of a body termed the Crown Assets Allocation committee, and of the setting up by letters patent of a corporation charged with the responsibility of the disposition of these surplus assets. If that structure was already established by order in council with respect to the committee, and by letters patent with respect to the crown corporation, under I believe identical nomenclature, why was it necessary to come to parliament for legislation to do the same thing?-unless it be that the powers conferred by order in council in the case of the committee and by letters patent in the case of the corporation were not in the opinion of the government wide enough to take care of the situation.
Has the minister taken the house and the country fully into his confidence as to the immensity of the task, measured in terms of dollars and cents, which is before the corporation in the disposition of these goods? Has he told us why it has become so large as to be measured in terms of what I believe to be hundreds of millions of dollars-


An hon. MEMBER:: Billions.


Richard Burpee Hanson: Then I
suggest to him and the country that there has been default on the part of the crown in over-purchasing, in over-building and in oversupplying.
My understanding of the purpose of the Department of Munitions and Supply was that it was to be the one channel through which all requisitions for supplies from any of the spending departments were to be filled. I think that that principle is a sound one. It would never do to have government departments competing with each other for the purchase of similar classes of goods, or different classes of goods for that matter. Therefore I approved the principle of having one department set up to be responsible for the purchase of all supplies required for the great national effort of the country. There would be, I thought, coordination under that system, and there was a prospect, I hoped, of getting value for the money expended. But the weakness of the system as it developed was that the Department of Munitions and Supply has never had anything to say, or at

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least never assumed any jurisdiction, as to whether or not a given quantity of' this, that and the other thing was actually required. I believe that is borne out by the position which now confronts the minister, when he finds that he has on hand, not hundreds of millions of dollars' worth of goods, as I suggested, but, as I heard interjected, billions of dollars of surplus assets.
It must be remembered that all these goods have been purchased with funds obtained from two sources, either from heavy taxation imposed on the people of Canada, or from the heavy loans, amounting to six and a half billion dollars, which the Canadian people have contributed to finance the war effort of the nation. If it is now revealed that there are surplus assets which are not required to the tune of billions of dollars, then someone is in default.


An hon. MEMBER:: Not at all.


Richard Burpee Hanson: I am not setting up a straw man. I am proceeding on the basis of what I understand to be the facts. I may be exaggerating when I say billions of dollars, because I can scarcely bring myself to believe that there are surplus assets to that amount.


An hon. MEMBER:: Large capital expenditures.


Richard Burpee Hanson: Capital expenditures are in an entirely different category. I have never complained of the expenditure of large sums of money by way of capital expenditure for the building of war plants, because we did not have the plants and they had to be established if there was to be production. The only complaint I ever made in that regard, and the minister I am spre will bear me out, was as to the allocation of some of the plants. We in the eastern part of Canada and in other parts have been denied them. But that is water over the dam. That is not the immediate subject of investigation. Apparently this thing got out of hand to the extent of hundreds of millions of dollars. The minister ought to give a full and frank explanation of the why and wherefore of that. I have heard that there were astonishing surpluses of some things. One day I happened to mention here in the house to the Minister of National Defence that I had heard of a surplus of 300,000 greatcoats. He questioned that severely, but he never gave me the figures of what the surplus was.


James Layton Ralston: There was no surplus at all. There are in the army about 450,000 men, which makes it less than one additional greatcoat for each man in the army.


Richard Burpee Hanson: The minister admits that there was on hand a supply-


James Layton Ralston: A supply, but that is quite different from a surplus.


Richard Burpee Hanson: -of 300,000 greatcoats-and how many more? I have heard that there was on hand a surplus-I am going to call it that-of literally thousands of dozens of tooth brushes, which we should know something about. Before this bill gets its second reading, and certainly if the minister cannot do it then he should do it when the bill comes into committee, the house and the country is entitled to have from the minister a detailed accounting to enable the public to determine whether value has been obtained for the money expended in days gone by.
We have had this question up before the house on more than one occasion, and the minister told us with a good deal of pride of what had been accomplished in the way of production. I think he is entitled to some degree of pride in the production of this country, and I am going to give him that credit. But he has never told us about the headaches which they have suffered in that department of his and: of the losses that have been sustained-I shall not say by any improper intent, because I do not mean that at all, but by lack of foresight, by lack of coordinating ability to determine what actually should have been done in a given case. There must have been many of these cases. I referred on a previous occasion to one of them. I am not going to refer to others that have come to my attention. But I do think that the minister ought to give us some information with respect to the huge volumes of money that have been spent in connection with these war expenditures and should indicate whether the country has got value for them or not.
Having read this bill, I have come to the conclusion that there must have been something in the order in council setting up the allocations committee, and in the letters patent creating the corporation, which was set up months ago and is now to be superseded by the corporation established by this bill-I come to the conclusion, I say, that there must have been something lacking, or something which in the opinion of the minister and his advisers ought to be in this bill. I find on reading the bill that this corporation and this committee is merely an instrument of the minister himself, that he is a dictator under this bill. There is nothing that this committee can do, or refrain from doing, there is nothing that this corporation can do or refrain

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3719>
from doing, unless it has the imprimatur of the minister. That constitutes him the sovereign controller aver the allocations committee and the corporation. Why was there any necessity at all for a committee?
Certainly we are not given much information with respect to this bill in the explanatory note which will be found opposite page 1. The bill starts out by saying that the several clauses contained in it are self-explanatory. I deny that statement. Of course, that is very general. The bill proposes, according to this note, to confer authority upon the corporation to be established thereunder, to sell, exchange or otherwise dispose of, hold, manage, recondition or otherwise deal with surplus crown assets and-this is the kernel, the reason for the bill-to confer certain powers upon the Minister of Munitions and Supply and the governor in council in relation thereto, including the power to establish an advisory committee.
Why the necessity of this crown corporation and advisory committee? The corporation is to be headed by Mr. Carswell, of whom everybody speaks well. I have not heard any criticism at all. The general manager of the company is a man who is well known, a man of managerial ability, who is being lent to or drafted into the organization, and who has had experience in merchandising and so forth. There is no criticism at all. A board of directors has been submitted, I believe, and approved by the ministry, the names of some of whom are well known to me and to most Canadians, and some of whom are perhaps not so very well known. I offer no criticism of the personnel of the corporation. If left alone I think they will do pretty good work. But what I am afraid of is that with the pressure, the political pressure-I might as well say at once what is in my mind

which is bound to be exerted on the minister just in the forefront of an election, this corporation will not be free from the pressure of the minister. Why is it necessary to have an allocations committee at all, unless it be for the mere purposes of assembling the information from the different departments? I can understand that that would be a profitable service and perhaps one which ought to be rendered.
I have grave fears about the working out of this committee, and I wish to devote a few minutes' attention to that. It is all related to the problem of the transition period between war-time industrial production and peace-time needs.
Certain broad principles ought to be laid down here by those in authority and be the
100-234i
subject of discussion, and be not only a guide to this corporation as to what they shall do with these surplus assets, but, may I suggest, and very properly so, a guide to private industry and as a method of control over this government agency.
The first thing I suggest to the minister is this, that through the agency of the committee, or by whatever other agency may be established, there should be an early inventory of accumulated stocks of materials. We ought to know exactly where we stand. The country should know-and there should not be anything secret about it-what are the accumulated surplus stocks of material on hand and what they cost.
There should be laid down as a second principle in relation to war-time production the reduction of production where all danger of shortage is past. We in this house do not know what the situation is, but I suggest to the minister, with respect, that he ought to provide parliament with a statement as to whether there is now any longer any danger of shortage.
The third principle I suggest is the cancellation or reduction of war contracts where it is evident that supply is ahead of anticipated demand and-this is for the benefit of the' Minister of Labour (Mr. Mitchell)-the diversion of man-power to industries where there is still pressing demand.
I see the minister has announced over the radio and in the press that there is to be a searching inquiry into the man-power situation, which has now reached an acute stage, and I can well understand that. But-this is by way of digression-he omitted in his statement to take into consideration the thousands of draft-dodgers in this country.


Mr. MITCHELL:: There are not thousands of draft-dodgers in this country.


Richard Burpee Hanson: There are' draft-dodgers by the thousand in this country, and I will give an instance of this. I am coming to it and if he wants details I will give them to him privately.


Mr. SPEAKER:: Order. May I call the hon. member's attention to the fact, as to the relevancy of the argument-


Richard Burpee Hanson: It is only a sentence or two, but if Your Honour thinks I. am out of order I will not pursue it. I will give it privately to the minister. What I have in mind in dealing with this question of manpower, which is relevant-


Humphrey Mitchell: If my hon. friend does not know, he should know that there are not thousands of draft-dodgers in this country.
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Richard Burpee Hanson: There is a lost legion, and I can.tell the minister where some of them are.


Humphrey Mitchell: There is not a lost legion, either.


Richard Burpee Hanson: Mr. Speaker has ruled me out of order, and I do not want to pursue that.


Humphrey Mitchell: You are not only out of order; you are wrong.


Richard Burpee Hanson: You are out of order in the first place, and in the second place I am not wrong. You are like the Bourbons; you neither learn anything nor forget anything. You are always right when you are wrong.


Thomas Vien: Order.


Richard Burpee Hanson: I should address the Chair. I apologize to the Chair, but the minister provoked that. I will return to the thesis I was trying to advance in a *constructive way.
This question of man-power is important. There should be, and I believe there will be, if Mr. Carswell and his general manager are left alone, a definite policy for handling surplus materials. I am glad to hear the announcement that a convention has been arranged between the two adjoining countries so that there will not be any dumping, one with the other. That is important and I congratulate the minister upon having made that arrangement. But what I am endeavouring to draw his attention to is this. The greatest care should be taken in the disposal of certain of those surplus assets-I refer particularly to tools, machines and the like- so that small plants shall not be crowded out of the picture for the benefit of the large plants. From time to time the Canadian people have allowed a great centralization of industry to grow up, and I believe it is not to the benefit of the body politic that that should have occurred. It has occurred to a much greater degree in the United States than here.
I remember travelling many times through the New England states. I have seen, and I am sure the Minister of Munitions and Supply has seen, because he comes from New England, the situation there. The three northeastern states, Maine, New Hampshire and Vermont, have been practically at a standstill because of the withdrawal from the confines of those states of small industries into the great industrial development of New 'England. They have been the hinterland of New England in the development of concentrated industry in the states of Massachusetts, Rhode Island, Connecticut and else-
{Mr. Mitchell.]
where. That has not contributed to the development of those three states, and the same thing is true in Canada. I realize, of course, as every thinking man or woman in this country must realize, why it has been so in Canada. Geography has to a large extent been the cause of the centralization of industry in Canada, and it may go on, but an honest attempt at decentralization ought to be made.
One of the things the minister can do- and I offer this to him with the best of good will as a constructive suggestion-is that in the disposition of machinery, in the distribution of equipment in government-owned factories, care should be taken to see that the small economic unit which will be on the market for new tooling and new machines is given an opportunity to buy some of this material. This must be done if they are to survive. Nearly every small industrial unit in this country will have to retool after the war because their machines are worn out after a long period of use without replacement. Then there is the question of obsolescence and the like. I do beseech the minister and his company to see to it that the small plants are not crowded out by the big baron with the ready money who will be able to outbid the other fellow.
Of course it is axiomatic-and I need only mention this general principle to the minister because I believe he is as fully seized of it as I can possibly be, and perhaps more so, since he has had a wider degree of business experience than I have had-that the disposition of surpluses should be made in such a manner and over such a period as to cause the minimum of disturbance to the normal market. If there is anything like a tendency to throw stocks on the market beyond the power of the market to absorb them, there is bound to be great disturbance to the normal business of the country. ,
The next principle that I suggest to the minister-and it has to do with something that is very near to government policy-is that stocks of materials should be utilized in such a manner as to reduce the danger of inflation. They should not be sold too readily. This principle ought to envisage a wide and equitable system of distribution of materials which have been definitely short for consumer goods because of war priorities. Above all, any attempt to comer the market by huge purchases of goods released from war uses should be prevented. Just imagine what might happen if one of the huge departmental stores in this country could go out and make a bid for one entire class or type of goods

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that the government have on hand. They would have the market for that class of goods. It should be prevented at all costs.
I am putting my next statement in the form of an interrogatory to the minister. What have the government and the Department of Munitions and Supply done to keep a check on these goods? Has there been integrated throughout in the rapid development of the department and the multiplicity of requisitions that have come from the three war service departments any system of inventory control so that they would know what was on hand at any given time? Has there been any compulsory reporting of supplies on hand from time to time? Is there any danger-I mention this without the idea of making any assertion with regard to it, because I do not know-of the existence of suppressed or hidden surpluses that nobody knows anything about? This has become so huge that it is quite possible there may be large hidden surpluses that the public does not know about. The allocation committee or the corporation itself should make a widespread and intelligent survey of the demand for materials for consumer goods, and wherever possible, owing to the shortage of consumer goods in Canada-I hear it spoken of everywhere I go-there should be an immediate diversion of surplus war stocks to civilian uses. We should not wait until the war is ended, when an unfavourable condition might be created. Of course if the war goes on for any appreciable length of time it is always possible, I suggest, to cancel all such diversions to consumer goods which may be required and return production to war needs.
Above everything else I warn the minister and his set-up-I am using the word "set-up" in no improper or derogatory sense-against sales to promoters or speculators. The minister will find the thrifty, the wide-awake man who will care more about making money than winning the war, ready to purchase these goods, and having in mind the scavengers in this country who are always looking for this sort of thing, he will find the man who will be out to buy these stocks on a speculative basis or promotion schemes. Sales should be made only to those who require such materials as are available or those who are creating plants to use them.
I wish to make another suggestion to the government. All this surplus war material was paid for out of the war appropriation funds. It has mostly, if not all, been added to the debt of the country. The net proceeds of all sales should be used to reduce the national debt. It should not go into current revenue. Any other method of allocating the funds to be derived from this source would be shocking
to me. To say that we will take the money that is derived from the borrowings made from the public and put them into the consolidated revenue fund, or make any other disposition of them save and except the reduction of debt, would not be prudent, would not be sound fiscal policy.
If I have time I should like to say a word or two about these war plants. Some have been closed down and reopened. To me that was significant, because it indicated at all events that the war was not quite over as some people seemed to imagine. I am glad that those plants were available for reopening and that they will supply the necessary munitions, let us say, to turn the scale in the last stages of the war.
A day is coming when these war plants will not be required for production purposes in the interests of the government. Of course many of those war plants are ephemeral in their nature; some, I hope, are substantial. Some I should think could be converted to-peace-time pursuits. I do suggest to the minister that all these plants are not mere scrap,, and any who get that idea into their heads should be disillusioned. These plants cost a great deal of money. They ought to be of great value, particularly their equipment, and they should not be sold at ridiculously low prices. They should be disposed of so that they may perform a useful purpose. I suggest, too, that careful consideration be given by the minister, in making sales of war plants, to the question whether they are adapted to conversion into peace-time industrial plants. There should be some planning in that connection on the part of the administration.
I do not desire to pursue this line of thought any further; I have given the minister some of the ideas that are running through my mind. I hope they may be of a constructive character, and that he will give consideration to them. At the risk, perhaps, of being misunderstood by some hon. members of this house I do suggest that there must be large quantities of surplus goods which would be of inestimable value to some of the occupied countries of Europe in the days that are to come. These goods have been paid for, and these people are destitute. There are those who lack food, clothing and other things. Canada has done much with respect to helping Britain. Canada now is doing something for parts of destitute Europe, and I think consideration might be given to the diversion of some of our surplus supplies from what might be glutted markets to lands overseas where there is to-day a crying need. In that connection the greatest care should be taken to see that these goods are not exploited by any
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international speculators. Let us take canned goods as an illustration. No doubt large reserve stocks have been built up for the armed services. Canned goods are in very short supply for ordinary consumers; I was at home over the week-end and that fact was brought forcibly to my attention. I suggest that strict control ought to. be maintained over these reserve stocks of canned goods so that they may be fed out to the consuming public and not to those who would make a profit by large purchases at small prices. They ought not to -be thrown on the market in large quantities, which would bring about the ruin of that portion of the agricultural population of this country which produces these commodities. There are very many pressing civilian needs to-day. Some of them can be met by wise *operation on the part of this corporation, to which, as far as I am concerned1, I would be prepared to give very substantial authority.
There is one point, however, I should like the minister to justify in connection with these *two bodies he is setting up. Why are they subjected to such strict ministerial control? If these men are worthy; if they are good business men; if they are given some guiding principles, then they ought to have freedom from ministerial control and authority which might very quickly degenerate, and I think hon. members will know what I mean. I dislike to see such dictatorial powers as are given in this bill conferred upon any minister in tonnection with a peace-time activity. It is a, delegation of authority we are making here to-day. The minister keeps all this authority in his own hands, and I think he ought to justify that position before this house. Then I believe he ought to tell us in some degree of detail the quantum of surplus goods they have on hand, their nature, variety and kind, and why such a tremendously substantial reserve, in terms of dollars and cents, has been built up. We ought to be assured that the money of the Canadian public has been wisely spent and not wasted, and that there will not be substantial loss. My fear is that because of over-purchases and because of what I believe to be a lack of jurisdiction on the part of the Department of Munitions and Supply to restrict quantities in the requisitions which it receives, there may be the possibility of some loss. It was like the old wartime information board when Mr. Lash was here. Information was fed in to him from a dozen or more departments, but he had no jurisdiction to edit any of it. That was a most unsatisfactory position for a trained publicist like Mr. Lash; he had no jurisdiction. Whether or not this department had the jurisdiction, and I do not think it had, it did not exercise

any by cutting down requisitions for what might appear to be inordinately large quantities of supplies. The minister should explain the position to the house before we accept this bill.


Stanley Howard Knowles: In listening to the opening remarks of the hon. member for York-Sunbury (Mr. Hanson) I could not help but think what fun it must be to be a cabinet minister. A few months ago, when the Minister of Munitions and Supply (Mr. Howe) set up the War Assets Allocation Committee and War Assets Corporation Limited by order in council, he was roundly condemned by the opposition for proceeding in that way. The opposition said it should have been done by legislation and rightly so. Now, when the minister decides to supersede that action by order in council by bringing in a bill, doing this very thing by legislation, he is again condemned by the opposition.


Richard Burpee Hanson: That is our privilege, is it not?


Stanley Howard Knowles: It is not only our privilege; I think it is a good thing the minister has yielded to the criticism of the opposition on this point and has brought in this legislation. so that it can be discussed in the house. But on that point I offer him my congratulations.
With regard to the argument the previous speaker sought to make in criticizing the bill because it placed too much authority in the hands of the minister, I want to say that this is a feature I welcome in the bill. I may be critical of the Minister of Munitions and Supply on many occasions; I may be critical of the government of the day, but I am much more anxious to see the democratically elected government which represents the people of this country control our economic affairs than to have control of those affairs improperly delegated to private business men outside this house and outside the government. So I say that on that point, too, I congratulate the minister; because it seems to me that what, he has written into the bill is not some dictatorial powers for himself, but simply the principle of responsible government with respect to our economic affairs.
Having said this, Mr. Speaker, let me turn to the other side of the picture and express some of the criticisms I should like to offer. I confess that those criticisms are directed not so much against the bill as against the policies that I fear may be carried out by the government under its terms. The other evening I was sitting in my office studying this bill, and

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had decided that of itself it was pretty much to the good. For a little diversion I turned on the small radio set I have in my room and, lo and behold, there came over it a familiar voice. It required only a moment to recognize the voice of my good friend the Minister of Munitions and Supply speaking from Port Arthur. I had been studying his bill, and thinking of all the good things the minister had done for the war effort following the principle of public ownership; then I had to listen to his voice telling me over the radio that after the war is over that principle must be discarded-


John Ritchie MacNicol: And in that he is absolutely sound.


Stanley Howard Knowles: and full control given back to private enterprise. An hon. member to my right says, "Hear, hear." But I am sorry the Minister of Munitions and Supply is not prepared in peace time to stick to the principle he has found so necessary to meet the demands of war.
There are two or three points in the bill I would question. Perhaps it would be more appropriate if I were to wait until we reach the committee stage, later in the day, to make those observations. In general there can be no question as to the necessity for setting up some machinery to handle surplus war assets, which inevitably have been accumulated. I do not share the alarm of the previous speaker as to the quantity of supplies on hand. After all, these supplies had to be produced and made available if we were to carry on an all-out war effort. I imagine it is also true that a large portion of the huge figure to which the minister referred the other night would constitute plant and equipment financed by the government. When one realizes that there are huge surpluses valued at perhaps three or four billions of dollars, as stated by the minister last Thursday night, it is obvious that some machinery must be set up to handle them. That in itself is just occasion for parliament's passing such a bill as the one now before the house. The question in my mind however, is as to what policy the government is going to pursue under this measure when it becomes law. Is it to be the first concern of the government to protect the kind of economic system we had before the war, one which gave us the sad story of the thirties ; or is the government going to realize that the demands of peace are just as compelling as have been the needs of war? In the house, and throughout the country, that is the basic post-war issue.
I view under two headings the disposal of surplus assets. First of all there is a
quantity of movable goods, such as automobiles, clothing and other supplies. Secondl}' there is the matter of war plants, and crown properties such as the Polymer Corporation Limited and Research Enterprises Limited. In the same category there are certain aircraft factories, and there are many places where the government has part ownership of plants. That applies in respect of some aircraft establishments, and I believe applies also to the plant in Montreal which is to produce penicillin.
It seems to me that the disposal of the movable goods which will be surplus at the end of the war should be dovetailed into a national plan for the maximum production of peacetime goods. I feel that plants such as those to which I have referred, and some others, should be retained and operated by the government as part of a comprehensive national plan for the provision of full and useful employment and a maximum standard of living for our people. In other words, if I may repeat what I said a moment ago, we in this group feel that once the war is over, the needs of our hard-won peace must be faced with the same determination with which the country has faced the demands of war.
I know there are many in the house who insist that private enterprise can do that. When the Minister of Munitions and Supply spoke over the radio the other night he seemed to be suggesting that to the people in his constituency. But I hold in my hand a copy of a publication called Headlines; it is by no means a leftist publication. It is published weekly by the national association of real estate boards with offices at Chicago and Washington, D.C. This issue of May 15, 1944, contains an article dealing with post-war employment. The whole of it would be interesting, but I shall take time to read only one paragraph:
Who will find them jobs, especially returning soldiers? Private enterprise cannot by itself underwrite an employment programme which can be counted upon. No group of business men can assume responsibility for the entire national economy. We may want the government out of business, but whether we like it or not, mass unemployment is something that the government has to take care of.


Mr. BLACKMORE:: And the government cannot do it unless they can sell their goods.


Stanley Howard Knowles: In contrast with the
statement I have just read, I have noted some interesting quotations in connection with the setting up of War Assets Corporation Limited. In its issue of January 29, Saturday Night made this comment:
The business community must be gratified that Mr. Horve (Minister of Munitions and Supply) has placed the disposal of surplus war asseto
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in the hands of business men and set them up in trade, not in political and official Ottawa, but in metropolitan Montreal.
The Financial Post of the, same date, January 29, quotes an address given just prior to that date by Mr. Carswell, the president of the corporation. This is what he said, in part:
Since the key job of the corporation is to protect the going economy against impingement of war surpluses, it stands to reason the corporation should never get into competition with industry-which is another way of saying it should not sell direct to the consumer but rather -to those whose legitimate business it is to deal with the article concerned and on a basis that, within the corporation's powers, will ensure reasonable profit to dealer and reasonable price to consumer.
I suggest to the Minister of Munitions and Supply that despite what his political or social or economic philosophy may have been when he was called upon to undertake the tremendous tasks of his present position, he took the view that the demands of war had to be met no matter how many readjustments were necessary in the economic set-up in order to fulfd that end. I contend that when peace comes the same attitude is necessary. When we are faced with the need of full and useful employment and the need of maintaining a high standard of living among our people, the primary purpose of a corporation such as the one being set up under this bill should not be simply to protect the going economy against impingement of war surpluses; its key job should be to meet the needs of our people.
There is one other thing that worries me a little, and I shall be quite happy if the minister can set aside my fears. I hold in my hand sessional paper 360 of May 28, 1943, dealing with optional purchase clauses in government agreements with private corporations. I shall read one or two paragraphs from this sessional paper which indicate terms of disposal. The following refers to one of the plants of Defence Industries Limited:
Defence Industries Limited is to make an offer if it desires to purchase the plant or any part thereof. If an agreement is not reached in sixty days, the government shall have a reasonable period to dispose of the plant to any other party on condition that it must be removed within ninety days from sale. If it is not sold to other party, the government shall remove the plant and level the site, or surrender ownership to the company without payment. The land is to be resold to the company for $1.
There is nothing significant in the last sentence, because I understand that in the first instance the land was bought for one dollar. But the rest of the terms seem to me to suggest that government policy with regard to the possible continued operation of a plant such as that is hamstrung by the authority

given to Defence Industries Limited under the terms of the contract. Here is another one with the Electric Reduction Company of Canada Limited:
The government shall offer the plant to the company at a fair and reasonable price. If not sold to the company within ninety days the company may dismantle the plant and deliver to the government at the plant gate.
That is an interesting way to put it.
Notwithstanding the foregoing, the company may purchase electrolytic perchlorate cell at a price equivalent to the market value of used platinum therein.
There are several other similar paragraphs in this sessional paper, but I shall not take the time to read them. When the minister speaks either on the second reading or in committee I hope he wTill refer to the question I have raised in connection with these terms of disposal. My desire is that plants in which public money has been invested for the purpose of meeting the needs of war may continue to be operated by the government to meet the needs of our people in times of peace. My fear is that these terms block the carrying out of such a policy-if perchance we can persuade the government so long as it is in power to carry out such a policy.
This question cannot be handled on a piecemeal or patchwork basis. The house and the government should realize, as probably the government has, that the whole question of disposing of three or four billion dollars' worth of assets is not something isolated that can be handled without regard for the whole economic set-up of the country. When one contemplates the magnitude of these surpluses that are to be disposed of, and thinks of them in terms of trying to fit them into the whole economy of the country, he is brought right up against the necessity of our getting a vision of really rebuilding our economy and remaking Canada once this war is over. It ranges out into the whole question of a tremendous housing programme, the rebuilding of our cities, the seeing to it that there is work for those who come back from -overseas and for those whose services in the making of munitions will no longer be necessary. To hope that private enterprise will be able to do that is, I suggest, sheer folly. I have given at least one instance in which a private enterprise journal realized that that is the case. The government looked at the needs of war and realized that they had to be met, and my contention is that the people of Canada will expect that same approach and that same attitude when peace comes.
This is indeed a most important measure.
I look upon the bill itself as being in the

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nature of enabling legislation. It does not indicate just what the government's policy is going to be. Perhaps that is correct in the nature of things. As I said earlier, I welcome the fact that the final say in these matters will be in the hands of the government of the day, that that is not being delegated to private business interests. However, because of the importance of the policy that will be carried out under this bill when it has been passed, I hope that during the discussion the minister will give us some indication of the policy the government will follow. I still hope he will say something a little more encouraging than the remarks I heard from him over the radio [DOT]the other night.


John Horne Blackmore: Mr. Speaker, I think the minister is to be [DOT]congratulated upon introducing this bill at the present time. I believe the majority of the Canadian people will agree that there is a need for such a bill. Certainly it would be inadvisable in the highest degree to allow the situation to run wild, so to speak, when peace is declared. We must take every precaution to see to it that there is a return to as nearly normal as we shall probably be able to get after so colossal a conflict as the one in which we are engaged.
Reading through the bill I find it on the whole quite satisfactory. The principle is sound, as I have said. Before mdking the few comments upon it that I think it fitting I should make, I probably should revert to the remarks of the hon. member who has just taken his seat (Mr. Knowles), for whom I have a very high degree of respect. As I gathered the general purport of his contribution, it was that since the government had found it so necessary to take over control of industry in large measure during the war, and because of that measure had been able to attain so high a degree of success, it argued automatically that government ownership in peace would solve our problems. I think that some extremely important factors are being overlooked when any such conclusion is drawn.
May I point out to my hon. friend and to those who are disposed to think as he does that in war our primary problem is production. In peace our primary problem in an age of plenty is distribution. Government ownership will enable the government to produce with the greatest success. But government ownership will not enable the government in time of peace to distribute; for distribution depends upon the amount of purchasing power which goes into the hands of the people and the degree to which that purchasing power is spread out among the people so that they can consume the goods which are being produced
by industry. That mere fact should give all people who are socialistically inclined in their thinking cause for a good deal of serious reflection. In war time not only is the government obliged to get quantity of production but it must have design, and many times the particular design which the government-wants is not a profitable type of production for any industry to be engaged in fabricating. The government must have design, and it must have special quality; it must also have an exceedingly high degree of speed in the production of the items that are being brought into existence, and at the same time there has to be a high degree of secrecy. All these things make it so that government ownership is probably the best producer in this field in time of war.
But in peace time these factors are not nearly so important. There is no need for secrecy. There is no particular need of a high degree of speed unless people are buying goods faster than the goods are being produced, and that is not likely in an age of plenty. There is no particular worry about quality, because if people have the money they will simply leave unpurchased the goods that are unsatisfactory in quality. Quality therefore will take care of itself. If there is a sufficient demand for goods, industry will provide the speed, because the faster they produce the goods the more money they will make. So that those who argue for government ownership in time of peace are falling into error; for all these factors will be taken care of by industry itself. The solution of the problem of distribution is to provide purchasing power for the people. If we can manage to give high enough wages, good jobs, good enough prices for the things which are produced and reasonable prices for the things which people have to buy, pensions and allowances and all that kind of thing which will allow the rank and file of the people to buy abundantly of the goods which industry stands ready to produce, then we shall be successful in distribution, and the ownership of the industries will simply make no difference at all, provided that industry manufactures the goods, which it will, and sells them, which it certainly will.
Having dealt with that matter in some measure, may I turn to certain aspects of the situation which I think it is well to point out to the minister. I remember that when I first came into parliament I received in the mail one day a fine shoe which had been cut all down one side with a razor so that it was impossible to repair it and make it fit for use. The shoe came to me from somewhere in Nova Scotia, and the man who sent

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it to me wrote an exceedingly indignant note in which he said, "There are literally thousands upon thousands of shoes which have been treated like this and thrown on heaps, while thousands of people in this area need even shoes such as this and are denied the privilege of obtaining them." That kind of wanton waste I am sure the minister wants to put himself in a position to prevent. We certainly do not want anything like waste or sabotage after this war. The people need the goods, either people in our own country or people abroad, and provision' must be made for allowing the common people who have been deprived of these good things to get them after the war. Never mind if that will be competing with private industry. Some provision must be made to protect private industry if that is necessary. But the goods simply must not be destroyed.
There is another aspect of this whole matter to which the hon. member for Bow River (Mr. Johnston) referred the other night and which I should like to mention briefly. I think it is in a high degree desirable that provincial governments should have the privilege of buying these war assets in so far as they may desire to do so. I can conceive that great numbers of tractors, trucks and the like might be of much value to the provinces in their public works programmes. They ought to be made available to the provinces at a very reasonable rate, and the country ought to know that that is going to be done. The provinces should be able to buy enough of these assets for a future supply if need be. I use tractors and trucks merely as an illustration.
Again, municipal governments ought to be able to obtain their needs of such equipment and machinery in so far as they may desire to do so. They should certainly have a chance to bid along with the governments of the provinces.
I think that after the last war there was far too much secrecy with respect to the disposal of surplus war material. I speak subject to revision of my opinion after learning more about the situation, but at the moment I fail to see why at the close of the war the government should not publicize in the widest and freest and frankest fashion the exact amount of goods which they have for disposal, telling the people where these goods can be obtained, how they can be obtained, at what prices they can be obtained, so that everybody may know all about them. It seems to me that that would avoid the possibility of the scavengers, to whom the hon. member for York-Sunbury (Mr. Hanson) referred, having a field day. With the radio facilities at the disposal of the

government and with newspaper advertising it ought to be an easy matter to conduct a campaign of publicity so that everybody will know all about a thing which is everybody's business.
May I turn for a moment to the degree of control which has been placed in the hands of the minister. I am not a friend of centralized control. I think we have far too much of it. I was sympathetic with the words of the hon. member for York-Sunbury when he advocated decentralization of control. I think that the time has come when the whole country must study means of the decentralization of industry, the decentralization of credit control and of responsibility with respect to everything that pertains to our public wellbeing. So I say that I am not in favour of having too much power centralized in the hands of the minister. Yet in this case I believe it is a good thing. I notice at least four clauses in the bill which give the minister great power. I think, with certain reservations, that that is sound under the circumstances. It is sound because it centralizes executive capacity and is likely to work for greater efficiency in the disposal of this material, which will be a titanic job, I think. Then, it will centre responsibility on one man so that we can get at him and parliament will be able to get control of the situation much better, inasmuch as the minister will have that responsibility. At the same time, I think the minister will agree that there should be provision for establishing checks against his power. I am not saying that this will be necessary in the case of the present minister, but no one knows who the next minister will be and I am sure that the minister as a citizen of Canada would feel much better if this tremendous power were safeguarded with adequate reservations which would reassure the people that such power would be exercised wisely and in the public interest.
I suggest that some such set-up as this might be introduced into the bill. I would not go so far as to suggest that the minister modify the present bill, although, if he saw fit, he might do that; but some such measure as this I do suggest-that each provincial government should be given a considerable amount of influence in controlling the whole policy. The minister would do what members of the government in large measure have done during the war; he would invite into his confidence the representatives of the provinces for advice and counsel and put a certain amount of work on them in carrying out the purposes of the act. If that were done the minister would be in a better position to carry on. If he were to ask each province to appoint a com-

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mittee to work with the war assets corporation and with him, and if then each provincial government were to ask the main municipalities in the province to appoint committees to work with it, we would have once more an opportunity for the widest measure of publicity and understanding regarding the matter.
I believe that in the days following the war there will be great necessity for maintaining confidence amongst the people. They must not be permitted to get the idea that they are being "sold down the river," or that things which are not in their best interest are being done behind the curtains. I believe that the making of such an arrangement as I have suggested, under which the provinces would work with the central government and the municipalities would work with the provincial government, would serve as a. sort of safeguard against undesirable public attitudes regarding the whole matter of the disposal of war assets.
I have said all that I care to say at the present time. Such other observations as I have I will make when the bill is in committee.


[Stage Direction]
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Bradette in the chair.
Section 1 agreed to.
On section 2-Definitions.
John Ritchie MacNicol: I wish to ask a question with regard to subparagraph (i) of paragraph (f), "included in a report made to the minister under section 3". Has the minister had any reports from the hundred and one companies-I am using an arbitrary number- which have been set up in connection with the making of munitions, in regard to stocks and various lines of materials that have not been used and which there is no likelihood of using?


Mr. HOWE:: The committee itself is closely in touch with every department of government. Munitions and Supply have a representative on the committee, and it is the duty of that representative to know the situation in every plant in Canada, regardless of whether it is a crown plant or a private concern using government materials, and to watch for surplus inventories. That is done now, and was being done before the corporation was formed. Material was being transferred from one plant to another. The department goes further than most private firms in keeping inventories of all materials. On the termination of contracts the department moves quickly to arrange that surplus raw materials from the contract are removed from the plant and disposed of to other plants. Now surpluses will be reported to the committee, and disposed of through
War Assets Corporation. I receive eight or ten recommendations from the committee each day. I understood the hon. member to ask whether there were any reports under section 3.


John Ritchie MacNicol: Am I right in assuming that there are large quantities of material the purchase of which was ordered and which are in store in various manufacturing companies-goods that would have been used for making munitions had changes not been made in certain munitions equipment, which changes rendered obsolete large stocks of material?


Clarence Decatur Howe: There are occasions when changes of specification make obsolete certain materials, either semi-manufactured or raw material. It has been the practice throughout the munitions programme to dispose of these surplus materials as rapidly as possible. If they are capable of use for any other purpose they are used for that purpose. If they are not, they are converted to scrap and sold back to the primary producers. That has been going on constantly. Within the last six weeks arrangements have been made to the end that the War Assets Corporation will handle all disposal of scrap, and all rendering back into scrap. Before that, the director of scrap metal, in the organization of the Department of Munitions and Supply, did that work. All surplus material or material rendered obsolete was reported to the director of scrap material, and it was his duty to have it rendered back into scrap and sold to primary producers.


John Ritchie MacNicol: I have in mind some first-class material which has been rendered obsolete in certain plants owing to change in the design of munitions they are making, but which could be used in various other plants or to fill civilian requirements. Is someone specifically charged with the duty of salvaging obsolete material instead of scrapping it?


Clarence Decatur Howe: Yes. The director general of production has taken that duty on himself. He has general knowledge of the programme of the department, and he decides whether material of the type the hon. member mentions can be successfully used by another plant. If so, the production schedule is arranged in the other plant to use that material. That work has been going on under careful direction.


John Ritchie MacNicol: Or disposed of for civilian requirements.


Clarence Decatur Howe: It can be, yes. We have not been selling material outside the department, except scrap. We have been transferring' material from one programme to another, but we have refrained from selling to the public.
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The purpose of- this bill is to authorize the selling of any surplus material to the public. It is a very serious responsibility to sell government property to the public. Public property is always regarded as in a class by itself, and any wrongful disposal of it is regarded as much more serious than ordinary mishandling of materials; therefore, great care has been taken to safeguard the sale of such material.
At the present time all surpluses of the type that were previously handled by transferring from one contract to another will be reported first to the committee, and by the committee ;to the minister, and then transferred to the Crown Assets Corporation for expert disposal which the machinery of that corporation can apply.


Mr. SHAW:: What type of inspection is carried on to determine what shall be scrapped and what shall not be scrapped? I had a very disturbing report from a responsible individual ^employed in a government-owned plant oper-:ated by a private company. I would not care to mention either the individual or the company at the moment but I can do so to the minister. This individual reported that in a great many instances machine parts which could have been readily repaired were relegated to the scrap heap and sold as scrap. I should like to know just what type of inspection is utilized to guard against a condition of that kind developing, provided that the condition does exist?


Clarence Decatur Howe: The acceptance of war material is in the hands of the United Kingdom and Canada inspection board. The rejections by the board become, of course, the property of the contractor. I cannot imagine what a contractor could gain by putting rejected parts into scrap if they could be reworked and put into finished work. I cannot think of any contract where such action would not work to the detriment of the manufacturer.


Frederick Davis Shaw: I was not speaking of parts delivered from the factory where they are manufactured, but rather of parts that had become damaged as a consequence of use and discarded when they could be repaired. That was the nature of the complaint. As an example, let us take a part which has been damaged-this individual mentioned that case -and which could have been repaired without much difficulty. Instead of that he contended it was thrown on to the scrap heap and a new part used in its place.


Clarence Decatur Howe: My hon. friend is talking of a machine tool?


Frederick Davis Shaw: I am not talking of a plant engaged in the repair of machine tools.


Clarence Decatur Howe: Is my hon. friend talking about a part of a machine tool?


Frederick Davis Shaw: Part of a machine, yes.
My question is: What type of inspection is carried out to guarantee that what is called scrap is actually scrap?


Clarence Decatur Howe: That problem has engaged the attention of the department. We have a company called Cutting Tools and Gauges. The purpose of the company is to take worn parts of machines or damaged parts of machines into the plant, recut them or refabricate them and send them back for further use. The controller of machine tools has a staff constantly circulating among factories investigating breakages and uses of cutting tools. Great savings have been effected by the Cutting Tools and Gauges Corporation. As regards the salvage of cutting tools alone-at least those that would have been discarded in the ordinary process-through the work of this company in refabricating them and shipping them back as good as new, estimated savings to the government now amount to between two or three million dollars. I can assure the hon. gentleman that the point in question is not being overlooked. I cannot say that occasional cases of wastage do not occur; but every possible precaution is being taken to see that wastage is kept to a minimum.


Mr. FRASER (Peterborough West):: Will the board set a definite price on each article?


Clarence Decatur Howe: Yes.


Gordon Knapman Fraser: There will be no tenders called; there will be a definite price?


Clarence Decatur Howe: That is right.
Mr. FRASER (Peterborough West)1: Will the different articles for sale be advertised in the papers, or will there be a definite list sent out?


Clarence Decatur Howe: It is difficult to answer that question; it depends on the article. For instance, the method of disposing of an overage destroyer or an over-age corvette may be different from that of disposing of a number of kitchen utensils. I do not think I can make any general statement. The purpose will be to sell the goods as directly as possible from the government to the ultimate consumer. As a matter of practical administration there may be commissions given to a group of dealers, but there would be no outright sale to dealers for re-sale at any price the dealer likes to charge to the ultimate consumer. The purpose is to work directly from the government to the ultimate consumer.

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Mr. FRASER (Peterborough West);: What I had in mind was that some garage men may want machine tools after the war is over. I wondered if they would have any knowledge that the machines they require may be for sale?


Clarence Decatur Howe: Machine tools are listed. They are in a class by themselves. The disposition of them is an important problem, because the government's purchases amounted to about $100,000,000. Definite scales of prices have been placed on used machine tools, depending on the age of the tool and the hours of use to which it has been put. The same scale of depreciation is applied as is allowed by our income tax department on machine tools used in a factory. The price is definite, depending on the history of the tool. These tools are listed as they become surplus and the lists are widely circulated. Small plants are given preference. One condition of sale is that if the plant is being sold to replace an old tool then the old tool must be rendered into scrap and disposed of. The purpose of selling machine tools is to improve the equipment of small plants first of all and not to put a lot of obsolete and inferior tools on the market in consequence.


Gordon Knapman Fraser: Some of those tools have been imported from the United States and other countries?


Clarence Decatur Howe: That is right.


Gordon Knapman Fraser: Duties have been paid and perhaps refunded. When they are sold by the government will they be sold duty free? The purchaser will not be asked to pay the duty?


Clarence Decatur Howe: In pricing the article, the question of duty, whether paid or not, will be taken into account, and the article will be priced accordingly. But by arrangement with the income tax department, it has been decided that the price of the article will take care of the duty; and since all the funds recovered from the sale go to the receiver general of Canada in any event, the tools will not be subject to further duty if sold by War Assets Corporation Limited.


Mr. STIRLING:: The minister did not speak on the second reading of the bill, but I hope he will take an opportunity to reply to some of the points raised in the speeches that, have been delivered. I remember that the hon. member for York-Sunbury referred to the short life of War Assets Corporation Limited, and he wondered what the main reasons were, why that method was changed to this one based on legislation. Perhaps it might be appropriate under this section for
the minister to give us some description of what has been accomplished in the seven months during which War Assets Corporation Limited has been in existence, what it has handled, what it has disposed of, the methods it has used and whether those methods will be continued under this corporation.


Clarence Decatur Howe: In the order in council setting up War Assets Corporation Limited it was stated that a bill would be presented at the next session of parliament providing legislation to replace the order in council. The purpose of the legislation is, first, that the principle involved may be discussed in this parliament. As I said before, the sale of government property is a serious matter, and I believe hon. members should be made well aware of the procedure. I think it was stated in Bernard Baruch's report that the disposal of government property should be conducted in a gold-fish bowl; that it should be open to, public view, and that will be the procedure of War Assets Corporation Limited. Another reason, this is a continuing job. The powers of the government under the War Measures Act will expire shortly after the war ends, but the work of disposal will continue for a long: period thereafter. An act of parliament i& desirable to provide continuity.
It was suggested by the hon. member for York-Sunbury that great surpluses are now available for disposal. Of course that is not the case. It was thought desirable to provide the machinery for disposal while the problem was on a small scale, and to build up an-organization to cope with the larger problem whenever it might confront the government. I mentioned the amount of $3,000,000,000. I arrived at that figure having regard to the-fact that my department has purchased about $10,000,000,000 of munitions and supplies, and I estimated that perhaps one-third of this would be subject to disposal at the end of hostilities. Many of these munitions may be outside Canada, in the United Kingdom, on the continent or in other allied countries. Mutual Aid material is subject to recall after the war, if it has any value. We have ships around the world, being operated by various people, and these will be subject to recall. We have warships, not all of which will be required for our peace-time navy, and that will become a problem of disposal. We have guns and other weapons used by the armed forces, and a wide variety of other supplies. To give hon. members an idea of one problem, this country has produced over six hundred thousand automotive vehicles. Many of these will not return, but a considerable proportion will be brought back, and that will be one great problem which will have to be-
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faced by the War Assets Corporation. That corporation is charged with keeping in mind that it is disposing of the property of all the people of Canada, and its first duty is to see that the material is distributed in such a way that all the people will share in any benefit that may accrue to our economy through the sale of this used government material.


Grote Stirling: What has the corporation accomplished so far?


Clarence Decatur Howe: The real work of the corporation started about two months ago, and to date the net proceeds of sales have been as follows:
Aircraft	 $69,100
Automotive equipment	 18,361
Machine tools	 23,809
Scrap metal	 17,580
Miscellaneous scrap	 1,007
Sundry small sales	 1,890
Those were sales by the corporation directly.


Grote Stirling: Directly to consumers,
does the minister know?


Clarence Decatur Howe: Yes, directly to consumers.
Then the scrap and salvage division, which .has been under the direction of the corporation for the past month, sold $88,000 worth of scrap, while another agency of the department, which is also being transferred to the [DOT]corporation, disposed of $132,000 worth of scrap. So that in the past six weeks the business of the corporation has netted the treasury 'some $350,000.


John Ritchie MacNicol: At reasonable prices?


Clarence Decatur Howe: Yes, I would think so.


Mr. JACKMAN:: Could the minister give the original cost to the government of the assets from which $35,000 were realized?


Clarence Decatur Howe: No, I have not that information. A considerable part of the total is represented by aircraft, and my hon. friend will realize that the recovery price on trainer aircraft that have been used in the air training programme bears very little relation to cost. I believe that the aircraft in question were made in Canada at a cost of $6,000 or $7,000 each and were sold to Mexico for about $1,400 or $1,500, as is and where is. In the meantime their useful life in the air training plan had been exhausted, so that I would consider that a very good recovery.


Mr. JOHNSTON (Bow River):: How many motorcycles have been disposed of already? While I am on my feet I should like to ask the minister what method of identification is used in connection with government-owned property. I have in mind such machines as lathes. I am not blaming the minister for

this; I am just drawing it to his attention. I recall having visited some aircraft and shipbuilding factories, and I was told that the only government identification was a number painted on the machine. To remove that number would require only a little gasoline or something of the kind. For their own protection I should think the government would have some metal stamp on each machine, so that in days to come, after this disposal is completed, no one may be accused of possessing property to which he has no right. If the government had a permanent identification mark a check could be made, which would eliminate the possibility of anyone getting possession of government property to which he was not entitled. I refer to motorcycles, because not long ago I was told by certain people, who I thought were in a position to know, that quite a number of motorcycles in good condition had been sold for very small sums. I remember that in one case $250 was mentioned. I was surprised, because I did not know that there had been permission given to sell the motorcycles. I was in doubt as to whether the government had gone so far as to sell them. Apparently, however, this Indian motorcycle with sidecar was sold for $250, a reasonable price for anyone to have to pay.


Clarence Decatur Howe: The hon. member has spoken about the identification of machine tools. He will be aware that it is difficult to steal a motor car and then to camouflage it in such a way that the ownership cannot be ascertained. Machine tools are just as well protected. I think the hon. member could assure anyone who has a government machine tool that it would be only a matter of time when the owner thereof would catch up with him. Careful registration is kept of every machine tool. There are several identification marks, including the name of the manufacturer, on each tool. The government will not hesitate to prosecute for theft anyone who illegally possesses any unit of crown property. We have had one or two cases of theft, and in those instances have prosecuted and recovered. That will be our policy, and it is one which I believe is generally known. I would be surprised if there is any wholesale illegal transfer of crown assets. Then, so far as motorcycles are concerned, I believe the only motorcycles handled by the committee have been transferred from the army, through mutual aid, to Russia. I know of no sale to the general public. I must point out, however, that there was in existence an army disposal board, before the corporation was formed, and it is possible that that board sold motorcycles to the public: If so, I have no knowledge of it.

Surplus Crown Assets


Stanley Howard Knowles: When I questioned the minister the other night I understood him to say that property, as defined, includes crown plants, as well as other kinds of equipment. In the event-and the minister knows I hope this will not happen-of the decision being made to dispose of a crown plant, what course would be followed? I understand that most of these crown plants are held in the name of the Minister of Munitions and Supply. Does that mean that he would report to the committee and that committee would report back to him, or what procedure would be followed?
In that same connection, would the minister give some indication as to what would happen in connection with plants where expansions have been made, with government financial assistance, and where the plant managers tell us there is no clear line of demarcation between privately-owned and government-owned property.
Then, will the settlement of terms of disposal, such as I read a while ago from a sessional paper, No. 360, come under the jurisdiction of the machinery we are now setting up?


Clarence Decatur Howe: The machinery for the disposal of crown plants is that the department responsible for the plant declares it surplus to the requirements of that department. This is reported to the board, and the board examines the situation to see whether any other department of government can utilize the plant in question. If not, recommendation is made to the minister with respect to disposal. That is, if no use can be found for it for government purposes, a recommendation goes to the minister that it be turned over to War Assets Corporation, as surplus crown property. The minister, in turn, would receive the report and, after consideration, make a recommendation to council. It will be remembered that every decision involving values over $15,000 must be reported to the governor in council. If council decides that the plant in question should be disposed of, such plant would be turned over to War Assets Corporation for disposal.
My hon. friend suggests that every plant owned by the government should be operated by the government. The leader of the Social Credit party said, very properly, that in war time the problem is one of manufacturing, while in peace time it is one of disposal of output. He suggested that if there were plenty of money in the hands of consumers there would be no problem of that kind. I can assure him that the problem would still be there, because Canada is capable of producing
almost anything in quantities far in excess of the ability of her own population to consume. Our exports always represent a very considerable part of our annual production.
I believe there are certain plants which the government could operate to advantage; but there are a great many plants the government could not possibly operate in competition with private industry. When those plants become surplus to government requirements, the option will be either that the plants be closed or that they be put into hands which can operate them successfully. The decision is, as I say, first in the hands of the committee, and then in the hands of the minister. The matter is then considered by council and, if disposal is decided upon, the actual disposition will be handled by the corporation.
The hon. member has referred to certain types of construction where the method of disposal is specified in contracts. The situation is not as serious as he believes. It arises where a special war munition or a product required for war munitions can be built much more cheaply as part of an existing plant turning out a commercial product. The option usually is to spend a fairly small amount of money in building a publicly owned addition to a privately owned plant, or spending a large amount of money in duplicating the privately owned plant, and adding to it a unit required for war production.
The hon. member referred to one plant which I recognized as Defence Industries Limited. That was a case where the raw material in question was chlorine. A plant to manufacture chlorine is expensive to build. While I forget the product to which the hon. member refers-although I recognized it at the time-I remember it was a product used wholly for war explosives. The best way of obtaining it seemed to be that of building a unit inside the plant of D.I.L. The unit built by the government had no relation to the private business of D.I.L.; it was not a commercial product. Therefore D.I.L. had a perfect right to say, "This may be all very well for the war, but the material you are making will not be used after the war, and we want that unit removed from our works. It does not fit in with an integrated chlorine plant." A proviso was made to the effect that D.I.L. would make us an offer for the unit, with such conversion as might be possible. If we were not satisfied with the offer we could then sell the unit where we liked, and under that condition remove it from the property. That type of transaction has been made only when it was the cheapest way to provide the particular war material. I am satisfied, and
Surplus Crown Assets

I think the committee will agree, that the procedure taken was the cheapest way for the government to achieve the required result.


Stanley Howard Knowles: In the case the minister has just described I take it that the War Assets Corporation would not have anything to do with arriving at the price; that would be determined already by the terms of the contract?


Clarence Decatur Howe: Oh, no, the contract would be transferred to Surplus Assets Corporation, and the experts of that corporation would decide whether it would be better to accept the price offered by Defence Industries Limited, whether the plant should be offered elsewhere or whether it should be tom down and sold as scrap.


Mr. MATTHEWS:: Mr. Chairman, I was sorry to be out of the chamber when the hon. member for .York-Sunbury was speaking, but with most of the arguments I heard and with the suggestions offered by others who followed him I readily agree. I am not going to discuss the question of war plants because I shall leave that to those who know more about it than I, but I should like to say a word with regard to. training centres and other places where there is not much in the way of equipment but where there are many buildings.
Farmers all over this country have been in dire need of lumber for several years. Their buildings have gone into disrepair and are becoming worse every month. They have accepted all this in good spirit because of the war. I suggest that in the disposal of buildings at the training centres the farmers should have preference in every possible case. I do not think any jobbery or speculation should be permitted in the disposal of these buildings; if possible, they should be sold direct to the consumer; that is, to the farmer. Just how this is to be done is perhaps outside my knowledge, but I wonder if a selling agent could not be posted at each of these centres to have control of the sale of the building. He could deal direct with the individual where possible, or perhaps auctions could be held. But in any event, the sale should be direct to the consumer and the farmer should not be asked to pay tribute to any other firm or dealer. I urge this suggestion upon the department.


Clarence Decatur Howe: The hon. member has described the exact method contemplated for disposing of that type of equipment by Surplus Crown Assets Corporation. Very few buildings have been turned over to the corporation, but the machinery is such that sales will be made on the ground to users in the vicinity, who can get greatest value from the salvage.


Harry Rutherford Jackman: This new corporation will not be confined to war assets; I take it that it will handle all surplus property?


Clarence Decatur Howe: Of the government.


Harry Rutherford Jackman: And also that it will be continuing in its nature. That is to say, it will not have to do only with surpluses that arise after the armistice is signed; it will continue to operate indefinitely as long as there is any use for it. I take it that the minister or his department will be the chief provider of information, although there will be some obtained from the various defence departments.


Clarence Decatur Howe: Each member represents a department w'hich is likely to have material for disposal. In the long run the Department of Munitions and Supply will perhaps be the smallest source of material. At the moment we are perhaps the principal source. The termination of contracts is a function of the department, but any scrap or salvage arising out of the termination of contracts will be for disposal by Surplus Crown Assets Corporation. The departments of national defence will ultimately be the largest sources of material to be handled by the corporation.


Harry Rutherford Jackman: What about goods still in process of manufacture under contracts with munitions and supply? Is this section broad enough to cover material in process?


Clarence Decatur Howe: Yes.


Harry Rutherford Jackman: I notice that the report must be made to the minister, but there is nothing to say that the minister must report to Surplus Crown Assets Corporation. I presume it would be automatic, but we may find ourselves in the position where a minister receives a report which he does not care to pass on to Surplus Crown Assets Corporation. Why should that not be provided against?


Clarence Decatur Howe: Is the minister to be allowed no discretion?


Harry Rutherford Jackman: I am just wondering whether all surplus assets should not be made known to Surplus Crown Assets Corporation. As one hon. member has said, we may have a different minister.


Clarence Decatur Howe: Surplus Crown Assets Corporation is represented on the committee by the president. The committee may recommend that assets be declared surplus, but the government may know of reasons why it does not wish to declare those assets surplus. It may be a matter of government policy.


Harry Rutherford Jackman: Unless the minister felt it wise to pass the information on, the committee

Surplus Crown Assets
might not know. There is nothing in this section which makes it mandatory upon the minister to pass on that information which is given to him by the various departments. I should think the minister would have no objection to giving the information filed with him to Surplus Crown Assets Corporation.


Clarence Decatur Howe: In theory it is given to the minister; in practice it is given to the committee.


Harry Rutherford Jackman: As long as the minister is satisfied. I do not see anything in the bill which would relieve the minds of those in business which might compete with products declared to be surplus. Business should know whether these surplus assets are to be held off the market or whether they are to overhang the market for some indefinite time until the government or Surplus Crown Assets Corporation decides to dispose of them. For instance, there might be thousands of yards of duck and business might not know just when the ultimate disposal would be made. That material would be overhanging the market and would have a depressing effect on trade.


Clarence Decatur Howe: The only protection the businessman can have is the calibre of the management of Surplus Crown Assets Corporation. The business of the corporation is not solely to protect trade; it is to recover government money, and to distribute the goods turned over to it to the best interest of all the people. It must combine all three interests in a reasonable way. It has power to hold or reconvert and operate as well as to sell. The matter of disposal requires the broadest judgment of almost any problem. My hon. friend will know that after the last war, material was sold by auction, and much of it got into the hands of speculators and second-hand dealers, with a tremendously destructive effect on industry and without any real benefit to the crown or to the public. We believe that the machinery now established will bring to bear on the problem the best judgment that can be found. The purpose will be to bring about a balance between the various interests that must be considered.


Harry Rutherford Jackman: What is the fundamental philosophy behind this bill. A short while ago the minister said that in Canada we can produce far more than we require and that therefore we have to export a great deal. Now he is saying that the chief purpose behind this bill is to get as much out of the surplus assets as possible, whereas many of us will feel that the main thing after the war will be, not to try to salvage what we can out of the surplus material, but to create jobs. That will be in
the minister's mind also. So that in relation to the question which I asked before, I should like to know whether industry will find that there will be in some cases huge surpluses of material overhanging the market and awaiting a buyer at the best disposition which can be made of it by a government company, or whether industry will know definitely what the policy of the government is to be in regard to this material. Will prospective buyers know that they cannot get this material below a certain price? Will the government even hold some of these surpluses as strategic materials or something of that kind? It seems to me that we ought to know what is to be the prime essential, whether it is to create jobs or to salvage to the last dollar, because the two may conflict with each other. So that it is well to know what is behind this bill in that regard.


Clarence Decatur Howe: The purpose of the bill is to bring the best balanced judgment that can be had to bear on problems of that kind. My hon. friend would hardly expect me to say now that we would do one thing or another thing as a matter of general policy. Business will be able to discuss its problems with the management and directors of the corporation, just as will public interests. I think business generally believes that the machinery, now being established will serve the purpose as well as any that can be devised.


John Ritchie MacNicol: If Surplus Crown Assets Corporation follows the policy which the minister outlined a few moments ago in reference to the disposal of crown plants, that policy will create a lot of jobs and I support the minister's policy in that regard exactly 100 per cent. I wholly disagree with the hon. member for Winnipeg North Centre. I should like to tell him as one who was through a lot of this following the great war and has seen the results that followed the disposal of government plants and their purchase by private capital just what happened, for instance, in one case. We have to get back to private enterprise just as rapidly as possible, and I hope that this example of the results which followed from the disposal of one government plant after the last war will make some impression on my hon. friend. I have had a lot to do with business, and with big business, and I am afraid my hon. friend has not. The minister spoke of the disposal of plants. Immediately following the last war-I do not just remember what agency was set up for the disposal of crown plants, because it is quite a few years ago now-there was a very large plant on Dufferin street, Toronto, in which aeroplanes had been made. It was a substan-
Surplus Croton Assets

tial, well-built brick plant, well proportioned, well engineered and well machined in every particular. That plant was disposed of in some way, together with much of the goods and equipment therein. Some private company of investors, as I remember it-I am not just sure of the financial set-up-purchased that big plant, with the result that in a short time perhaps fifteen different new industries . started up in that plant. When I say fifteen, that is an arbitrary number; there might have been a few more or a few less. But about fifteen new industries started up in that plant, some of which are perhaps there to-day, and they gave much employment.
The minister is right in his policy of disposal of crown plants, enabling .private investors to buy them or in any event to use them and start up scores and scores of new industries. We want all the new business we can get, and there are many, many businesses which are not started simply because they lack the .plant in which to start. The plant I have in mind is one I know very well. It was next door to the plant with which I was associated. I saw the results of the disposal of that plant. My hon. friend the member for York South is thoroughly familiar with the plant I am speaking of and with the facts I am presenting to the committee. Ever since the last war a large number of men and women have been engaged in different lines of industry in that old plant. It is old now but it was not old at that time. That is what we want, to get back to private industry as quickly as we can and produce the requirements of the people. It cannot be done economically by government plants, as the minister very well said.
Besides, a large number of these plants have been built along lines which private industry would not follow. It did not make a fig of difference if it took one thousand tons or one hundred tons of coal a week to heat some of these huge government .plants, because they were put up for a temporary purpose, and no doubt the cost of heating in many of these plants is excessive. I * am not finding fault with the government for that, because the plants were put up for a special purpose, to help win the war. But the cost of heating is excessive in many cases because the buildings are not of brick. Private enterprise, when it puts up a plant, counts upon occupying it for an indefinitely long period of time and figures on the cost of maintenance, heating and so forth. We did that in the business with which I was associated. We put up a substantial plant, because private enterprise always looks to the cost of maintenance and heating, coal to-day being a very large part of the cost of production.

So that I say to my hon. friend the member for Winnipeg'North Centre that I do not want him to feel that I am basing my disagreement with him on anything but sound argument and many years of experience. My experience has been that many government plants would not be purchased by private industry. Shell constructed .plants, for instance, would not be purchased) by private industry because the buildings are not substantial enough. A substantial building might be purchased by private enterprise, just like that big aeroplane plant that I mentioned on Dufferin street, Toronto. That is the kind of thing we want. We want to give more employment, and I know of no place where we can get more jobs more quickly than by getting back to private enterprise as quickly as possible after the war and by the government disposing of substantial plants.


Stanley Howard Knowles: Why did private enterprise not do it before the war?


John Ritchie MacNicol: Everybody knows the
conditions before the war. It would take too long to get into that argument. My hon. friend cannot possibly know about production, about who is going to produce. Every man to his own business. If I stick out a sign with "lawyer" or "doctor" on it, that does not mean that I am a lawyer or that I can practise medicine. Every man to his own business. A man must know what he is talking about.


Mr. NOSEWORTHY:: They did not know it in the nineteen-thirties.


John Ritchie MacNicol: A man has to know something about a subject he is talking about. If he is engaged in industry all through his lifetime he should know something about production and business; he would know much more than, the man who has merely a theoretical knowledge of the subject. I speak from practical experience.


James Arthur Ross: Where there is surplus equipment in one of the armed services and it is turned over to the corporation and they have a request from another department not directly concerned in the war-I have in mind certain road equipment and equipment that might be used in connection with water conservation projects under the Prairie Farm Assistance Act, and in many other places in the west in connection with experimental or reclamation farms-I suppose application could be made for such equipment under this set-up.


Clarence Decatur Howe: It is one of the duties of the committee.


James Arthur Ross: I should like to know how a municipal corporation wanting fire-fight-

Surplus Crown Assets
ing apparatus or road equipment which might be turned over from one of the airports would get into touch with the committee if it wanted to purchase such equipment. I know several municipal units who desire to obtain fire-fighting apparatus and other equipment which they know will become surplus in communities adjacent to their territories. I believe that the government have received resolutions from the automotive trade of the country protesting against the direct sale of jeeps. They suggest that this should be reserved for the normal trade. What would be done in connection with the sale of jeeps? Would they be advertised and sold direct to consumers or through the normal trade? These are questions I had in mind.


Clarence Decatur Howe: As regards the first question of transferring from one government department to another, that is handled by the committee. Interested departments are represented on the committee and are given a first priority in regard to any article being handled by the committee. As regards municipalities, they are given a priority after the provinces. The province is given first priority and the municipality second on any equipment that is likely to be of service to either. The municipalities will be circularized if material of tha't type is available, and inquiries will be handled as well as possible by the corporation.


James Arthur Ross: What about the sale of jeeps and surplus automobiles?


Clarence Decatur Howe: My hon. friend is mistaken when he says that representations have been received from the automotive trade. That statement has been published in the newspapers and has been denied by the trade, and certainly no communication has ever reached the department from the trade. The jeep, I may say, is greatly overestimated as a civilian instrument. It is expensive to build and operate, and its tractive qualities are much below those attributed to it by public opinion. It will be disappointing.


James Arthur Ross: I think the public should know that now.


Clarence Decatur Howe: If all the facts are known, and we are trying to make them known-the national research council are preparing a careful study of the jeep as a civilian vehicle- and if after the facts are disclosed the public still wish to buy jeeps, I have no doubt they will be made available to them.


Grote Stirling: With regard to the difficulties of getting away with the theft of government material, has Canada anything
comparable witih the broad arrow of the United Kingdom which is placed on everything made and owned there?


Clarence Decatur Howe: Every machine handled has the stamp and painted insignia on it. The Citadel brand and number are stamped in the machine. There are several identifying marks on machine tools.


Richard Burpee Hanson: Whatabout supplies as distinguished from equipment?


Clarence Decatur Howe: I cannot say, but I should think it would be difficult to steal government property, making a business of such theft, and get away with it.


[Stage Direction]
Section agreed to.
On section 3-departmental reports of surplus property.
Richard Burpee Hanson: Is any running inventory kept? How do the various departments handle the situation? As the minister knows, in a wholesale house they have day-to-day reports of sales and purchases, and running inventories are kept, so that they know exactly what stock is on hand in their warehouses at any given period of time. How does the government handle that sort of thing?


Clarence Decatur Howe: The government has its own central inventory. Everything of a capital nature bought by the government is carried on inventory, billed in when purchased and billed out when disposed of.


Richard Burpee Hanson: That is capital.


Clarence Decatur Howe: Yes. Machine tools are carried on a central inventory. Machine tools may be lent to the Inglis plant in Toronto and later transferred to General Motors in Oshawa, or to any other plant, but they always appear in a central register, the transfer being recorded. Similar inventories are kept for materials in government-owned plants. Each plant has its own inventory, a record that is carefully checked.


Richard Burpee Hanson: That is, material?


Clarence Decatur Howe: Yes.


Richard Burpee Hanson: Or is the minister speaking of equipment?


Clarence Decatur Howe: No; raw material. Inventory records are carefully checked. Rules are put out from time to time as to how much inventory can be carried on government account.
Surplus Croum Assets

For example, in the aeroplane industry inventory is confined to two months' requirement. Various limits are put on various types of production in order that excessive inventories will not be accumulated. I know of no plant where the inventory position cannot be quickly determined either by the records of the plant itself or by those in Ottawa.


Richard Burpee Hanson: It may be the part of wisdom to have supplies of more than two months. It is in the case of consumer goods. That is very important, because they cannot always be reached. What I have in mind is what I referred to in my remarks on the second reading. Has the government been supplied with any inventories? Has it any over-all picture of surpluses, and will the minister give a break-down of that, so that the country will know the nature, extent and quality of those surplus assets which we shall dispose of? That, after all, is the main reason for the bill.


Clarence Decatur Howe: When my hon. friend was out of the chamber I explained that the surplus-


Richard Burpee Hanson: I cannot be in two places at once.


Clarence Decatur Howe: I explained that the surplus assets referred to are not at present surpluses, but are rather anticipated surpluses. The surpluses of the present day are comparatively small, arising out of the cancellation of contracts. They are current scrap that is purchased in government-owned plants and a few materials coming back now in the way of used aircraft no longer required, or a few used vehicles. But the problem is not of large proportions. My hon. friend spoke of millions of dollars of surplus. I know of no such surplus, but we do anticipate that a large part of everything made in the war will eventually return to the government as surplus. I suggested, when the hon. member was out of the chamber, that the orders placed by my department at the moment total around
S10,000.000,000, and I said I would guess that a third of that material would come back to be handled by the corporation as surplus assets.


Richard Burpee Hanson: That is what the minister means by anticipated surpluses?


Clarence Decatur Howe: Yes. It will not all come back to Canada. It will be in Britain or France or a good many countries of the world, but the ultimate disposal will be in the hands of the War Assets Corporation.


[Stage Direction]
Section agreed to.
At six o'clock the house took recess.

After Recess
The house resumed at eight o'clock. PRIVATE BILLS

[Stage Direction]
The house in committee on bill No. 12, for the relief of Ethel Sangster Muir-Mr. Factor -Mr. Bradette in the chair.
Stanley Howard Knowles: I wish to take only a minute to register a protest on behalf of the group I represent, in view of the fact that nothing has been done as yet to find some place where these divorce bills can be dealt with other than in the parliament of Canada. This is not a new protest on behalf of our group or other groups and other members of the house. We do not propose to take up any time but I feel the protest should be stated.
Sections 1 and 2 agreed to.
Bill reported, read the third time and passed.



CONSIDERED IN COMMITTEE-THIRD READINGS

[Stage Direction]
Bill No. 10, for the relief of Theodore Zalopany.-Mr. Gray.
Bill No. 11, for the relief of Thelma Alice Warren Whittet.-Mr. Fulford.
Bill No. 13, for the relief of Kiril John Christo.-Mr. Gray.
Bill No. 14, for the relief of Helaine Ethel Leopold Lax.-Mr. Mcllraith.
Bill No. 15, for the relief of Cecil Benjamin Pomeroy.-Mr. Mcllraith.
Bill No. 17, for the relief of Paul Sanson White.-Mr. Fulford.
Bill No. 18, for the relief of Mary Hope-Beers Ross.-Mr. Mcllraith.
Bill No. 19, for the relief of Wasyl Usypchuk, otherwise known as William Usypchuk.-Mr. Factor.
Bill No. 20, for the relief of Walter Stanley Spencer.-Mr. Fulford.
Bill No. 21, for the relief of Emma Gertrude Groves Morris.-Mr. Hill.
Bill No. 22, for the relief of Gertrude Margaret Amy Ogilvie.-Mr. Hazen.
Bill No. 23, for the relief of Myrtle Josephine Teel O'Dell.-Mr. Emmerson.
Bill No. 24, for the relief of Marjorie Helen Parker Leduc.-Mr. Boucher.
Bill No. 25, for the relief of Margaret Derry Kirby.-Mr. Boucher.
Bill No. 26, for the relief of George Thomas Bragger.-Mr. Hill.
Bill No. 27, for the relief of Freda Watson Norman Daniels.-Mr. Emmerson.
Bill No. 28, for the relief of Iris Mabel Dash Wilkinson.-Mr. Hill.

Private Bills
Bill No. 30, for the relief of Thomas Henry Dwyer.-Mr. Maclnnis.
Bill No. 31, for the relief of Elsie Margaret Ormandy Henderson.-Mr. Boucher.
Bill No. 32, for the relief of Arthur Charles Duffy.-Mr. Gray.
Bill No. 33, for the relief of Kathleen Edna Ellis Wainwright.-Mr. Hill.
Bill No. 34, for the relief of Diana Lenore Carsley Tenenhouse.-Mr. Gray.
Bill No. 42, for the relief of Charlotte Muriel Wright.-Mr. Stokes.
Bill No. 43, for the relief of Sarah Carmichael Hay Johnston.-Mr. Emmerson.
Bill No. 44, for the relief of Margaret Georgina Isabel Townsend Mansfield.-Mr. Emmerson.
Bill No. 45, for the relief of Pasquale Di Guglielmo.-Mr. Hazen.
Bill No. 46, for the relief of Theodora B. Ostlund Fruitier.-Mr. Fulford.
Bill No. 47, for the relief of Erna Warthold Langlois.-Mr. Hill.
Bill No. 48, for the relief of Ruth Steinwold Bauer.-Mr. Maclnnis.
Bill No. 49, for the relief of Georges Hodgson Fisher.-Mr. Mcllraith.
Bill No. 50, for the relief of Molly Gurevitch Gladman.-Mr. Factor.
Bill No. 55, for the relief of Julia Menard Mills.-Mr. Hill.
Bill No. 56, for the relief of Vera Esteri Seppala Vuorimies.-Mr. Hill.
Bill No. 57, for the relief of Violet Magdalen Johnson Overall.-Mr. Hazen.
Bill No. 59, for the relief of Edna Lyall Burgess Lambert.-Mr. Boucher.
Bill No. 60, for the relief of Barbara Hellen Smith Dodds.-Mr. Mcllraith.
Bill No. 61, for the relief of Ellen Margaret Doris Sheehan Decary.-Mr. Mcllraith.
Bill No. 62, for the relief of Kathleen O'Raw Major.-Mr. Fulford.
Bill No. 63, for the relief of Vernon Oswald Marquez.-Mr. Fulford.
Bill No. 66, for the relief of Wilson Allan Martin.-Mr. Fulford.
Bill No. 67, for the relief of Victoria May Larkin Kirkcaldy.-Mr. Casselman (Gren-ville-Dundas).
Bill No. 68, for the relief of Nellie Blinkhorn Cowie.-Mr. Maclnnis.
Bill No. 69, for the relief of William Mace.- Mr. Casselman (Grenville-Dundas).
Bill No. 70, for the relief of Pauline Hislop Ralph.-Mr. Casselman (Grenville-Dundas).
Bill No. 71, for the relief of Ethel Mary Moffatt Shaw.-Mr. Whitman.
Bill No. 72, for the relief of Alfreda Elsie Hatch Carpenter.-Mr. Maclnnis.
Bill No. 73, for the relief of Rachel Segal Kaparofsky.-Mr. Factor.
Bill No. 74, for the relief of Paul Lapointe.- Mr. Factor.
Bill No. 75, for the relief of Vera Grace Percy Moore.-Mr. Factor.
Bill No. 76, for the relief of Jean Fernand Georges Robitaille.-Mr. Maclnnis.
Bill No. 77, for the relief of Marie Stella Gisele Payette MacRae.-Mr. Gray.
Bill No. 78, for the relief of Horace Henry Chapman.-Mr. Hazen.
Bill No. 79, for the relief of Florence Berger Bassin.-Mr. Casselman (Grenville-Dundas).
Bill No. 80, for the relief of Roland Edouard Levert.-Mr. Macdonald (Brantford City).
Bill No. 96, for the relief of William Cowie. -Mr. Hill.
Bill No. 97, for the relief of Nita Marjorie Hammerich Ward.-Mr. Casselman (Grenville-Dundas) .
Bill No. 98, for the relief of Margaret Kirsen Brown MacRae.-Mr. Casselman (Grenville-Dundas) .
Bill No. 99, for the relief of Margaretha Bernhard Cronauer.-Mr. Macdonald (Brantford City).
Bill No. 100, for the relief of Henry Rattigan. -Mr. Fulford.
Bill No. 103, for the relief of Margaret Millar Short.-Mr. Mcllraith.
Bill No. 104, for the relief of Mary Annesley Iverson.-Mr. Factor.
Bill No. 105, for the relief of Annie Drewniak Sonberg.-Mr. Macdonald (Brantford City).
Bill No. 106, for the relief of Celia Zlatkes Azeff.-Mr. Mcllraith.
Bill No. 107, for the relief of Louisa O'Tool Shelley.-Mr. Factor.
Bill No. 108, for the relief of Miriam Schwartz Silcoff.-Mr. Macdonald.
Bill No. 39, respecting The New Brunswick Railway Company.-Mr. Emmerson.
Gordon Graydon: Since we have come to the end of the list of divorce bills for this evening, may I make this observation. I do not want to repeat what I said on a previous occasion with respect to these bills, but I listened with some interest to the protest of the hon. member for Winnipeg North Centre. I do not consider a protest of much use at this stage except to repeat the statement that I made on a previous occasion, namely, that it is not sufficient to say that these bills should not be before the house. I think we must make some concrete suggestion as to how divorce bills should be handled. I think the government might well consider referring these matters to the Exchequer Court of Canada. I suggested that when the debate
Private Bills

took place some time ago. I think most hon. members of the committee are pretty well tired of these divorce proceedings. It is a thing that cuts through party lines and it does seem to me that the exchequer court is the place to which people who are entitled to relief may go without infringing upon either the constitutional rights, or any other rights, that the provinces may have. If that were done, parliament would be rid once and for all of this business which comes up periodically and which is not always acceptable to hon. members generally.
Bills reported, read the third time and passed.



SECOND READINGS

[Stage Direction]
Bill No. 119, for the relief of William Taffert. -Mr. Mcllraith.
Bill No. 120, for the relief of Belle Bailey Leibovitch.-Mr. Mcllraith.
Bill No. 121, for the relief of Gertie Shulman Friedman.-Mr. Mcllraith.
Bill No. 122, for the relief of Sarah Slutsky Shapiro.-Mr. Mcllraith.
Bill No. 123, for the relief of Jessie Dickson Mackie Toy.-Mr. Hill.
Bill No. 124, for the relief of Angele Pauline Edgar Marie Lambert Choux.-Mr. Fulford.
Bill No. 125, for the relief of Margaret Kathleen Hollenbeck Fortin.-Mr. Fulford.
Bill No. 126, for the relief of Hulda Van Koughnet Lynch-Staunton.-Mr. Boucher.
Bill No. 127, for the relief of James MacMillan McHale.-Mr. Homuth.
Bill No. 128, for the relief of Vernon Ross Aiken.-Mr. Boucher.
Bill No. 129, for the relief of Frederick Richard Channon.

Mr. Factor.
Bill No. 130, for the relief of Ernest Charles Hazard.-Mr. Whitman.

[Stage Direction]
Mrs. CORA T. CASSELMAN (Edmonton East) moved the second reading of bill No. 118, respecting the General Missionary Society of the German Baptist Churches of North America, and to change its name to the North American Baptist General Missionary Society.
Gordon Graydon: There was a collection of divorce bills, Mr. Speaker, which went through in the usual way, and I intervened because I did not think this bill should be included with them. I thought it should be dealt with separately.


Thomas Vien: Does the hon. gentleman wish the second reading of this bill moved?


Gordon Graydon: Yes.
Motion agreed to and bill read the second time.



UNITED NATIONS MUTUAL AID


[Stage Direction]
Hon. J. L. ILSLEY (Minister of Finance) moved that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to provide:
1.	That sums not exceeding eight hundred million dollars ($800,000,000) -be granted to His Majesty for the purpose of making war supplies available to any of the united nations, other than Canada, and of fulfilling any obligations arising out of the united nations relief and rehabilitation agreement;
2.	That the governor in council may determine the terms and conditions upon which such war supplies are made available to any of the united nations and may require in certain cases payment or repayment in kind of property or reciprocal action or provision of supplies or other direct or indirect benefit as may be deemed appropriate;
3.	That the Canadian mutual aid' 'board be authorized to carry out the purposes of this resolution;
4.	That the governor in council be empowered to raise by way of loan under the provisions of the Consolidated Revenue and Audit Act, 1931, such sum or sums of money not exceeding in the whole the sum of eight hundred million dollars ($800,000,000) as may be required for the purpose of defraying the expenditures herein mentioned and for purchasing or otherwise acquiring or 'procuring war supplies in Canada through the agency of the Minister of Munitions and Supply, the principal and interest of any such loan to be a charge upon and payable out of the consolidated revenue fund.
He said: Mr. Speaker, the essential purpose of this resolution and the bill which will be based on it is simply to extend the scope of the Mutual Aid Act to include the provision of relief supplies to UNRRA and to appropriate $800 million to carry on our mutual aid programme. The borrowing powers which are added are normal provisions of all our war appropriation measures.
Parliament last year overwhelmingly approved the principles of our Mutual Aid programme. Parliament has already this year-with practical unanimity-approved Canada's participation in UNRRA and the principle of using Mutual Aid funds to make this possible. I believe parliament and the vast majority of Canadians approve these

Mutual Aid
principles now more than ever before. The events of the last few days have brought home to all of us the critical nature of the present phase of the war and the vital importance to all our forces of full supplies of the best fighting equipment. Our Mutual Aid programme has helped substantially to arm the British forces that fight side by side with our men in Normandy, in the channel, and in the skies of France. Mutual Aid has been helping to arm the Russian forces whose achievements have made victory possible and kept many Germans from being ready to destroy our forces landing in France. Mutual Aid is helping to rearm the French forces, so that they may fight effectively alongside our men and others-as in Italy-in the liberation of their countrymen whose spirit has stood fast against many terrors during the last four long years. Mutual Aid has been helping the Australians to drive the Japanese back from island to island in the Pacific. Mutual Aid supplies for our long-suffering friends in China have recently arrived in India and will go through to China by air or by land, as soon as that is possible. Mutual Aid supplies are flowing to all the major fronts. They are enabling Canadians working here at home to give the strongest possible support to our men in uniform by strengthening their comrades in arms and thereby contribute most effectively to the speeding of victory.
The essential purposes and principles of Mutual Aid remain as they were determined by this parliament last year, with only the addition that we propose to include in Mutual Aid the provision of essential relief supplies to our liberated allies. These will be contributed through UNRRA, the democratic, international organization that has been created for this purpose.
The general principle of mutual aid is now well established among the united nations. The United States pioneered in the field with the enactment of the lend-lease act even before she entered the war. The lend-lease principle has now become not only a great "weapon for victory," but a household word and a landmark in relations between nations. Britain has applied the lend-lease and mutual aid principle in providing military supplies to various allies requiring aid from her. Australia and New Zealand, while originally on the receiving end of lend-lease, are now providing reverse lend-lease to the United States on a scale which is very large in relation to their population and resources. The acts of our own parliament occupy an honourable place in the evolution of this new and sensible form of
inter-allied relationship. Our Mutual Aid programme is an important part of a larger whole.
The main purpose of Mutual Aid is to ensure that Canada's war production-made possible by the bounty of nature, the hard work of our people, and our good fortune in being far from battles and bombs-is used most effectively in the common cause, in accordance with the strategic needs of the war. It is intended to make this most effective use of our production possible without the creation of huge inter-allied debts, which would burden commerce after the war and prejudice a just and enduring peace.
The ways in which these purposes have been accomplished and the principles of Mutual Aid put into practice are made evident in the report of the Mutual Aid board, covering its operations up to March 31 last, which my colleague, the Minister of Munitions and Supply (Mr. Howe), as chairman of the board, has tabled this afternoon. I shall not attempt to recapitulate the detailed information in the report, nor to summarize it, in moving this resolution. I wish to refer to some parts of it, however, in commenting on a few of the major questions that are relevant to our present discussions. The Minister of Munitions and Supply, as chairman of the board, is in charge of the administration of its work and will be able, if necessary, to provide further information to the house.
The Prime Minister (Mr. Mackenzie King), on March 16 of this year, tabled in the house the general Mutual Aid agreements which Canada had entered into with Britain, the Soviet Union and Australia. Later the agreements with China and the French Committee of National Liberation were also tabled. These agreements, which are practically identical in form except for minor adaptations to fit special circumstances in the case of the Soviet Union, set forth the general terms and conditions upon which Mutual Aid supplies are furnished by Canada to her allies. The Prime Minister himself explained the nature and purport of these agreements when he first tabled them, and called attention to several important aspects of them. A copy of the agreement with Britain is appended to the report of the board, and the others are in practically the same terms. This agreement itself is short and quite easily understood. I believe, therefore, that I need not attempt to enter now upon any exposition or explanation of these agreements, or of the terms and conditions upon which Mutual Aid supplies are furnished.
By the time the Mutual Aid Act was finally passed in May of last year, the government had already begun to establish the administra-
Mutual Aid
[Stage Direction]
tive organization necessary to put it into effect. The board began immediately to work out the new arrangements with other countries which would be necessary as a consequence of its operation. However, it took longer to put the Mutual Air plan into effect than we had expected, because of two essential features of the plan. The first was the principle that we would contribute actual supplies rather than money to the countries receiving aid. The second principle was that we would make arrangements directly rather than indirectly with countries receiving aid. In order to contribute actual supplies, it was necessary for the board to arrange to have these supplies produced and purchased on its direction and for its account, and then to transfer the supplies to the recipient nation. The principal changes required were in the operations of the Department of Munitions and Supply, which had formerly been acting as an agent of the British and other governments, and which now had to become in effect a, dealer in war supplies, having them produced at the direction of the board, which took title to them, paid for them on delivery, and then turned them over to the recipient country. To put those new principles into practice it was necessary for the Department of Munitions and Supply to take over the great bulk of all the thousands of war contracts placed by the British government with Canadian producers through the agency of the department in the past. This was a formidable task, involving much legal, administrative and accounting work. The take-over of these British contracts went into effect on September 1. The corresponding date for the take-over of Australian contracts was October 1.
To establish direct arrangements with Russia, China and the French Committee of National Liberation has also taken considerable time. Not only was it necessary to secure details of the supplies required-which it has been difficult for the French to furnish-but it has been necessary for the board and its various administrative officers and agencies to make inquiries and hold many consultations to verify the essentiality of the requirements, the possibilities of supply and of transport, and to avoid duplication with the programmes of Lend-Lease and Mutual Aid supplies being furnished by the United States and Britain. This administrative work and organization of the board, necessary to carry out the purposes and meet the conditions of the act, are described in the report and I need not go into it here. I would like to assure the house, however, that care is taken to ensure continuing consultation not only -with the military and supply authorities in Canada, but also with the various combined

boards and other international military and civilian agencies concerned with these questions in Washington and London.
War supplies have been furnished as Mutual Aid to Britain, Russia, China, Australia, India, and the French Committee of National Libertion. Detailed information on the actual supplies furnished to these countries up to March 31 is given in the report-particularly on pages 15, 22, 26 and 29. There is no simple way to summarize those many physical items. In the case of Britain they cover the great range of our production of munitions and military equipment, ships, and food and farm products. In the case of Australia they include air training services for Australian airmen, munitions and aircraft supplies, metals, timber, automotive equipment and other items, as well as the services of Canadian ships required to transport supplies to Australia. In the case of Russia, the major items have been metals, explosives, vehicles, repairs and services to merchant ships and in particular wheat flour, to which the Russians have given a high priority. For China the outstanding items are guns and ammunition-both small arms and light artillery-together with the signal equipment and motor transport necessary to complete the artillery batteries. We have also provided Canadian shipping services to deliver these supplies to the Chinese authorities in India. Supplies had only begun to be provided to the French committee by March 31, but at the present time there are substantial shipments ready in depots to be despatched to the French as soon as final shipping instructions are received from them.
The figures for shipments up to March 31 are not representative of the proportions in which supplies are now moving to the various countries. It took longer to arrange Mutual Aid supplies for Russia, China, the French and even Australia, than it did for Britain, and consequently their total share in shipments has been increasing in recent months. Countries other than Britain will, therefore, receive a larger share of the total Mutual Aid supplies this year than last year.
Mutual Aid expenditures have inevitably lagged somewhat behind the shipment of goods, as the board makes payment to the Department of Munitions and Supply only after delivery, and it takes some time for the invoices to come in and for the necessary verification of accounts. Of course, under war conditions the actual shipment of goods is not held up until the accounts are settled. As a consequence, the value of the war supplies furnished up to March 31 is in excess of the expenditures made-particularly in the case of

Mutual Aid
supplies for Russia, Australia and China-and there were, of course, outstanding accounts at March 31 remaining to be paid.
The expenditures up to March 31 out of the Mutual Aid appropriation are shown in the table on page 7 of the report. It will be noted that, when rounded off, the figures are approximately as follows:
Expenditures for war supplies transferred to Britain amounted to 724 million dollars, to Russia 23 million dollars, to Australia 21 million, to China 4 million. Relatively small sums of $874,000 were expended to send essential supplies of flour to the West Indies and $482,000 to send wheat to India, to help relieve the famine which developed there last autumn.
In addition, expenditures for war supplies held by the board in transit or storage and to be transferred in future to recipient countries were 139 million dollars.
Expenditures for administration were approximately 25 thousand dollars.
The total of all the expenditures was approximately 913 million dollars.
Out of the billion dollars provided by the original act, there remained therefore at March [DOT]31 approximately 87 million dollars. Most of this was expended during April in meeting commitments previously incurred. Ten million of it had been set aside for UNRRA, in accordance with the authorization of parliament in the UNRRA Act which the house passed on April 21.
Considerable detail is given in the report for the expenditures made for supplies for each of the recipient countries. As it is conveniently available to the house and the press, I will not burden the house with it now. In the case of Britain, it will be noted that expenditures of $555 million on munitions and military supplies are classified under 13 headings, while expenditures of $169 million on farm products and foods are classified under 19 headings. In the case of Britain, estimates are also given of the funds which Britain herself has spent in Canada during the year, which exceed quite substantially in total the Mutual Aid expenditures on supplies for Britain. These figures cannot be given in such detail as those for Mutual Aid expenditures, because we do not have the detailed information. I would also like to emphasize strongly that these figures for British expenditures in Canada and the similar figures for British receipts from Canada are only estimates, subject to a margin of error.
I would like to emphasize clearly that these Mutual Aid shipments are not by any means the only war supplies going to the United Nations from Canada. All the countries receiving Mutual Aid, with the possible exception of China, purchased supplies in Canada
during the past year. Those able to pay for substantial amounts of supplies have been making substantial purchases. Some nations have been able to pay for all their requirements in Canada, and as a consequence they have not requested assistance under the Mutual Aid Act. Our sister dominions, South Africa and New Zealand, though obtaining substantial quantities of war supplies from Canada, have not asked to secure any portion of them as Mutual Aid. It is possible that some countries, because of new developments-perhaps because they will need more from Canada or because their ability to purchase will be less- may make application for the first time this year.
The board has followed the policy of providing as Mutual Aid only what the recipient countries were unable to pay for in Canada. As far as a country is able to pay, it buys what it requires. In the case of Britain and, indeed, in the case of all the other nations in the sterling area, their purchases during the year ended March 31 have substantially exceeded the value of supplies provided to them under Mutual Aid.
Gordon Graydon: Do we determine which country can pay and which cannot?
Mr. 1LSLEY: Yes, we know pretty well.
Figures are given, as I have already indicated, in the report to show how this has worked out in the case of Britain. The table on page 19 shows the estimated payments to Canada by the United Kingdom in the year in question under various headings. It will be noted that payments for munitions and military supplies amounted to 353 million dollars. A further quantity of munitions, as indicated in the footnote to the table, estimated to amount to about 90 million dollars in value, was purchased in effect by Britain through drawing upon the funds which she had previously paid into the munitions production revolving fund, which was used for financing the production of munitions in government-owned plants in Canada. I will not burden the house with the other items in this table, but I would call attention to the fact that Britain purchased from Canada during the year a larger value of foodstuffs than we provided to her under Mutual Aid. I would also point out that metals, lumber and certain other products for Britain were all purchased rather than included in Mutual Aid supplies, mainty because of administrative reasons. It was not considered desirable to extend the Canadian procurement machinery, particularly that of the Department of Munitions and Supply, unnecessarily into the purchase of goods which Britain had previously been obtaining directly from Canadian contractors.
Mutual Aid

The sources from which Britain derived the funds to make the purchases which I have described and other payments to Canada are shown in the table on page 19 of the report. It will be noted that roughly half of the ,funds Britain obtained during the year and used in Canada came from payments made in Britain and to the British government by the Canadian forces overseas. These payments, as the hon. members will note if they compare this table with the one given in Hansard last year, were more than double the corresponding payments made in the previous fiscal year. I would expect a further substantial increase in the current year now that our forces fire engaged in intensive operations. I should also call attention to two other sources of funds which enabled Britain to purchase supplies in Canada. It will be recalled that last year we undertook to buy out the interest of the British government in Canadian war plants. Part of the transaction took place before April 1, 1943, but 165 million dollars were paid to the British government in the early months of the last fiscal year. There is another and somewhat more complicated group of transactions described in the report as "Cash withdrawals from working capital funds formerly advanced to the Department of Munitions and Supply and contractors". When the Department of Munitions and Supply was acting as the agent of the British government in placing contracts in Canada, the working capital required for the production of supplies for Britain was furnished by the British government, and amounted to quite considerable sums. When, however, the various British contracts were taken over by the Department of Munitions and Supply and became Canadian contracts from which deliveries could be made either to Britain, or to Canadian forces, or to any others of the united nations, the Department of Munitions and Supply took title to all the goods in process and itself provided the working capital funds required to finance the production of the goods in question. The British government was therefore able to use the working capital which it had formerly advanced to make current purchases during the year.
The new element in this year's mutual aid bill, which will be based upon this resolution, is the extension of Mutual Aid to cover Canada's contribution to the united nations relief and rehabilitation administration-or UNRRA, as it is called. The house is already familiar with the nature, purposes and activities of UNRRA, which were discussed in April when the house passed the act approving Canada's participation in UNRRA and ratifying the international agreement by which the

organization was established. I do not propose, therefore, to attempt to explain to the house the way in which UNRRA is organized nor any details of its operations or proposed operations. The parliamentary assistant to the President of the Privy Council, who dealt with many of the questions in the earlier debate, will be able to answer further inquiries regarding UNRRA wrhich may come up in discussing this resolution or the bill.
Prom what has already been said in the house, I think we are all-or nearly all- agreed upon the essential importance of providing aid and relief to our allies, who have suffered so greatly under the occupation of the enemy and from the immediate effects of hostilities in their homelands. We recognize, too, that we in Canada have food and clothing and medical supplies which can be furnished to our liberated allies to help them over the very difficult period before they are once again able to provide for themselves.
It is appropriate to note here certain points concerning the size and nature of Canada's contribution to UNRRA. While some of the countries receiving relief will be able to pay for it in foreign exchange, many will not be able to do so-and what they are able to pay to UNRRA in their own currency will likely be needed in part for local expenses and in any event cannot be converted into dollars, or used to purchase supplies abroad. Consequently it was provided in the agreement establishing UNRRA, which the house has approved:
In so far as its appropriate constitutional bodies shall authorize, each member government will contribute to the support of the administration in order to accomplish the purposes of article 1, paragraph 2 (a) (i.e., the provision of relief). The amount and character of the contributions of each member government under this provision will :be determined from time to time by its appropriate constitutional bodies. All such contributions received by the administration shall be accounted for.
At the first meeting of the council of UNRRA last November, the method of determining the contributions of members was carefully considered and the council made the following recommendation, which was supported by the Canadian delegates who had consulted.the government on this matter:
As to the amount and character of the contribution of each member government, to be determined by its constitutional bodies as provided for in article V of the agreement, the council recommends that each member government whose home territory has not been occupied by the enemy shall make a contribution for participation in the work of the administration, approximately equivalent to one per cent of the national income of the country for the year ending June 30, 1943, as determined by the member government.

Mutual Aid
The council recognizes that there are cases in which the recommendation above may conflict with particular demands arising from the continuance of the W'ar or may be excessively burdensome because of peculiar situations, and therefore recognize that the amount and character of the contribution recommended is subject to such conditions.
In accordance with this recommendation, we are proposing to make a contribution to UNRRA equal to one per cent of our national income for the twelve months ended June 30, 1943. I have obtained from the dominion bureau of statistics an estimate of our national income-and I would emphasize that it can be only an estimate-for this period, which they have compiled in such a way as to be as comparable as possible with the estimate prepared for the United States by the United States department of commerce, on which the contribution of the United States is to be based. This estimate of our national income turns out to be approximately 7,615 million dollars. Based upon this estimate, we are proposing to make a contribution to UNRRA of 77 million dollars. Already parliament has authorized the government to provide an amount up to ten million dollars from the Mutual Aid appropriation of last year, and the appropriation now being asked under this resolution will enable us to make our total contribution in the figure I have indicated. I should point out to the house that the council of UNRRA has recommended that not less than ten per cent of the amount contributed by each member government shall be in such form of currency as can be expended in areas outsidle the contributing country, and that the * balance shall be in the form of a credit in local currency which will be available for the purchase of the contributing country's supplies and services. Therefore we shall be providing to UNRRA ten per cent of our contribution in a form which UNRRA can transfer into foreign exchange if it so desires.
In extending our Mutual Aid Act to include the provision of relief supplies to our liberated allies we shall be extending the purpose for which supplies are furnished under Mutual Aid to include not only the effective prosecution of the war but also the securing of a just and enduring peace. Already Mutual Aid, as I have shown, has contributed and is contributing to the winning of victory. We can look forward with hope and confidence to the role which Mutual Aid will play, through our contributions to UNRRA, in relieving the human suffering which the war has caused and in helping by constructive measures truly to secure a just and enduring peace.
Motion agreed to and the house went into committee, Mr. Bradette in the chair.


Gordon Graydon: What yardstick does the government employ in arriving at the amount of $800,000,000? I take it that the $800,000,000 asked for by this resolution will, of course, be reduced so far as Mutual Aid is concerned by the amount which is included for UNRRA. I was curious to know how the government arrived at this particular figure when on the previous occasion the figure was some $200,000,000 more than that. The UNRRA provision I fancy would run from somewhere between $90,000,000 and $100,000,000, provided that one per cent of the national income was the basis, as the agreement called for, on which this country was making its contribution.


Mr. ILSLEY:: Our contribution to UNRRA will be $77,000,000.


Gordon Graydon: I have read somewhere that it might reach something like $90,000,000, which would mean, of course, a reduction from the $800,000,000 in the actual amount spent for Mutual Aid. Would the minister enlighten the committee on this point?


James Lorimer Ilsley: I cannot give nearly as satisfactory a reply as I should like to. The amount of $800,000,000 was decided upon some months ago, after taking into account a large number of uncertain factors, such as the probable requirements for the next twelve months or thereabouts of Great Britain, Russia and Australia, which are the large recipients of Mutual Aid. Their requirements in Canada may fall off sharply or they may not; they may increase.
Another factor in the situation-I cannot pretend to give all the factors now-is the expenditures which we shall be compelled to make on account of our forces in Great Britain and on the continent of Europe. If those expenses are very great; if they go up to a very considerable extent, then to the extent that they do, that increases the amount required under the War Appropriation Act and reduces the amount required under the Mutual Aid Act. The situation is one of those very uncertain ones where it is impossible to select a figure that will be mathematically or scientifically correct. I think about the best I can say is that we thought at the time we were giving consideration to this, $800,000,000 would be as appropriate a figure as any. There is no doubt that our expenditure will go up owing to the intensive operations of our services overseas and therefore there will be a big drain on our war appropriation, which should relieve our Mutual Aid, but I am not prepared to say that there [DOT]will not be a gap there. This is not one of
Mutual Aid

the finance department's accurate estimates at all, because no accurate estimate is possible.


Gordon Graydon: You would not want to say that it is one of their inaccurate estimates?


James Lorimer Ilsley: I have not heard of any of those.


Gordon Graydon: I do not think you have.


Stanley Howard Knowles: Mr. Chairman, I understand that it is the desire of the minister to introduce to-night the bill based on this resolution, but that he is quite prepared to wait until to-morrow for the second reading. Mr. ILSLEY: Yes.


Stanley Howard Knowles: In that event I shall defer any general remarks that I have to make until that time, but at this stage perhaps this might be said. We believe that Canadians generally are proud of the ability of our country to do the things provided for under this measure. It is true that the measure highlights certain principles to which we shall call attention when the bill is before us, but we are quite prepared to agree to the passing of the resolution now.


Mr. ADAMSON:: Who passes on the essentiality of the shipments?


Clarence Decatur Howe: The combined chiefs of staff have that responsibility under the legislation. If it is army material a certificate is given by the chief of staff of the army, and if it is navy material, by the chief of staff of thh navy.


Agar Rodney Adamson: Does all material, irrespective of whether it is for the United Kingdom or for other of the united nations such as Russia, China, Australia or other dominions, have to pass through the chiefs of staff committee, and is the chiefs of staff committee the Ottawa or the Washington committee?


Clarence Decatur Howe: I am referring to the Ottawa chiefs of staff committee. The Mutual Aid board in Ottawa works very closely with the Lend-Lease administration in Washington, the purpose being to see that shipments to a single country are not duplicated as between our two countries. The shipments are cleared by all interested agencies. There have been occasions when the chiefs of staff committee in Washington has been consulted, as in the case of China; but ordinarily, particularly with respect to theatres where Canadian troops are fighting, essentiality is certified by our own chiefs of staff.


Agar Rodney Adamson: The minister mentioned China. Who passes on the essentiality of a shipment to China? Do we have an agreement that the chiefs of staff committee in

Washington or Ottawa shall pass upon that? Incidentally, can the minister say if we have made any shipments to China in view of the tremendously upset state of that country since the Japanese advance?


Clarence Decatur Howe: Yes; China is a Mutual Aid country. We have made three shipments altogether. The shipments are made to India with the understanding that the material will be flown into China, and they have met with the approval of Lend-Lease administration in the United States.


Agar Rodney Adamson: Is Stettinius the chief?


Clarence Decatur Howe: He was the chief. He is no longer. I am not sure who occupies that position to-day. In any event, we have a joint committee in Washington, composed of men from United States agencies engaged iff similar work, who meet with our own committee charged with that responsibility in Washington. The combined chiefs of staff pass on shipments to China, in view of the disturbed situation mentioned by my hon. friend.


Agar Rodney Adamson: I am anxious to understand the machinery. Suppose we have a shipment to China or Russia; how does the machinery work? The question is interesting. We co-ordinate our shipments with the Washington committee on Lend-Lease, so that we do not either duplicate or ship too much of one material, and we ship independently of the Washington committee. Is that the procedure?


Clarence Decatur Howe: I hardly understand my hon. friend. After the material has been certified as suitable for shipment; after our own armed forces have agreed that there is strategic necessity for the shipment, and after the Washington committee has found that it is not a duplicate shipment, and that the material is required, it is shipped by Canada.


Ernest George Hansell: This resolution is very
similar to those that we have passed in bygone years since the introduction of the Lend-Lease principle has come into our economy, and, of course, particularly in time of war we all desire to aid other countries by supplying them as far as we possibly can with necessary munitions of war and foodstuffs. On that account it seems to me that the measure is admirable. As we have passed the bills in days gone by, and coming now to this resolution, I cannot help thinking that there is involved here a principle which we so often hear opposed, namely, the idea of giving something for nothing. I wish I had thought of this Mutual Aid resolution when talking the matter over with the Minister of

Mutual Aid
Labour the other day when he referred to the principle and said that he had held all his life the belief that one should never give something for nothing. The fact of the matter is that in this $800 million provision what we are actually doing is giving a large part of it away to other countries. Of course, it has to be bought, but it is bought by ourselves through a certain process of lending. As I understand it, in the passing of this resolution, and of the bill which will follow, we are giving the government power to raise by way of loan under the provisions of the Consolidated Revenue and Audit Act an amount in the neighbourhood of $800 million. It means that a very large portion of that will be an expansion of our own credit here and will be a bill chalked up against the Canadian people.
I am not going to oppose that either. As far as I am concerned, perhaps there should be more of it done, because we all recognize that after there is an expansion of credit in our internal economy it is reflected in the prosperity of the people, since the people share in that expansion of credit. It goes into their pockets in one way or another and they are better off. Where the rub comes is that if it is ever to be paid off the people of Canada will have to pay it. If it goes into the debt structure of the country and is handled by a process of refunding, the debt may remain for centuries, and even then the Caandian people will be called upon to foot the bill, so far as interest is concerned.
I hope we shall not hear so much, in connection with any proposals made from this group, about the principle of giving something for nothing, because this is. a measure which entertains that principle. It is giving something for nothing to other countries. We could reverse the order, if this country ever found it necessary to do so, and do the same thing, only instead of shipping goods out, we could make them available to our own people.
I am quite conscious of the fact that many of these goods may be regarded as surplus. If we have a very fine crop of wheat this year I do not know whether that commodity will be included, but there is no harm that I can see in giving away goods to these countries that need them. The only thing is that we pay for them here in one way or another. As a matter of fact, when we do something of this kind the country is richer financially though, of course, it is poorer as far as actual wealth goes, because whenever you export you send out real wealth. You may expand your credit and be financially better off, but when you do so there is a corresponding debt.
I would ask the minister a couple of questions. Just what is the meaning and what is the force that he attaches to the word "mutual"? I do not think I have that properly analysed in my own mind. Do I understand that it is a Mutual Aid bill in relation to other countries doing the same thing? If that is so,
I would couple another question with that one. I should like to compare anything we are doing with what perhaps the United States is doing, and to know how it works out on a per capita basis, if that is possible. We have twelve million people in Canada who are now offering to supply $800,000,000 worth of goods to other countries. How does that work out on a per capita basis, and what is the United States' share in this Mutual Aid idea? If twelve million people in Canada are responsible for the sending out of the country of $800,000,000 worth of goods and if it is really Mutual Aid, it would appear to me that the United States would have to send a lot more than that. The hon. member for Red Deer reminds me that it would amount to something in the neighbourhood of $8,000,000,000. I should like the minister to answer these questions. I am pleased to concur with others in allowing the first reading of the bill to go through, provided that we discuss it on second reading to-morrow. That will give us an opportunity to read, analyse and digest the statement made by the minister and the report which was tabled to-day.


James Lorimer Ilsley: It would appear to me that the use of the word "mutual" is justified in two ways. In the first place, assuming that nothing was to be returned in a material way, I would consider that if this country contributed $100,000,000 worth of supplies to the Soviet Union, and the Soviet Union carried on a joint and effective prosecution of the war, we would be aided by the Soviet Union and we would be aiding the Soviet Union. Therefore I think aid is mutual. It will be remembered that the carrying on of the joint and effective prosecution of the war by a recipient of Mutual Aid was to be regarded as sufficient consideration for the furnishing of the aid, and therefore mutuality is established. But mutuality may be established in another way. I think that will be apparent from the agreement which is found in the appendix to the report of the Canadian Mutual Aid board, which was tabled this afternoon. The recipient undertakes certain obligations in respect of the supplies and in respect of the attitude, and I was going to say policy which he will follow.
Mutual Aid


Ernest George Hansell: That will be explained in the report?


James Lorimer Ilsley: Yes.


Ernest George Hansell: I shall read it over.


James Lorimer Ilsley: That would be my explanation of the word "mutual". It is used in two senses, both of which justifies its use. The amount of total Lend-Lease aid by the United States of America from March, 1941, to March 31, 1944, is $24,224,806,000.


Grote Stirling: To all countries?


James Lorimer Ilsley: To all countries, yes.


Grote Stirling: If I understand page 19 of the report aright, it is an attempt to balance what Canada supplies the United Kingdom against what the United Kingdom supplies to Canada. That is right, is it not?


Clarence Decatur Howe: Britain pays all it can for its procurement in Canada. Mutual Aid is intended to take care of the remainder. It did that last year. This year it will fall somewhat short of doing so. Britain pays all the Canadian dollars that are available in the sterling block, including Canadian payments for provisions and weapons for our troops and capitation charges involved in keeping our troops in Europe, as well as the cost of aeroplanes that we buy from Britain. Those funds are used in Canada to purchase food and weapons for Britain; but in addition to that, Britain has a share of Mutual Aid funds. There the quid pro quo is the fact that Britain is actively prosecuting the war in defence of the empire.


Grote Stirling: Does that not tail on to what I have just said, that an attempt is made on page 19 to balance certain items? Besides that, on pages 17 and 18 we have those other amounts to which the minister has just alluded, $554,720,000 and $169,034,000 for food supplies.
I take it that those are the amounts outside the mutual feature of this arrangement that the United Kingdom has not succeeded in paying for; is that not so?


Clarence Decatur Howe: The position is that the
United Kingdom purchased for cash munitions and military supplies to a value of $353,000,000, and received, under Mutual Aid, munitions and supplies including ships to a value of $554,720,000. That is the story of munitions. The story of food is that Britain purchased in Canada food supplies to a value of $252,000,000, and paid cash for those purchases. She received, under Mutual Aid, foodstuffs to the value of $169,034,000.
[Mr. Usley.J


Grote Stirling: The $353,000,000 and the $252,000,000 at the top of page 19 form the first two items of what I take to be an attempt at balancing?


Clarence Decatur Howe: No. Those are two items. Britain bought munitions and military supplies to the value I have indicated; food supplies to the value I have indicated. Britain also bought and paid cash for base metals to the value of $150,000,000; lumber and other wood products, to the value of $96,000,000.


Grote Stirling: Making a total of over
$1,000,000,000? [DOT]


Clarence Decatur Howe: Yes; that is right.


Grote Stirling: Then the next set of figures appear to be an attempt to balance that?


Clarence Decatur Howe: Yes; that is right.


Grote Stirling: The mutual one is $534,000,000. The wording attached to it is what puzzles me. This is the way it reads: "From payments by Canadian forces overseas." I thought the $534,000,000 represented the expenditures that the Ufiited Kingdom took care of for our troops overseas.


Clarence Decatur Howe: That is correct. The table on page 19 of the report shows the sources from which the United Kingdom gets the Canadian dollars to pay Canada. It gets them from British exports to Canada, $101,000,000; receipts of Canadian dollars for freight services, S3S,000,000; from interest and dividends, $59,000,000; from other current receipts, $38,000,000; from capital receipts, less capital payments not shown 'elsewhere, $27,000,000; from payments by Canadian forces overseas-


Grote Stirling: That is the one.


Clarence Decatur Howe: That is money that we pay into Britain's account here in Canada to offset the account for sterling in the United Kingdom, which sterling is used to look after our troops, feed them, provide them with munitions, arising out of the capitation charges for the troops in the field.


Joseph William Noseworthy: On page 8 of the report I find this statement:
In the agreements which the nations receiving Mutual Aid have concluded with Canada there is provision for Canada receiving such reciprocal aid as may be determined from time to time in the light of the development of the war.
What is the meaning of this at the present time?


James Lorimer Ilsley: The agreements provide that Canada may obtain as reciprocal aid such articles, facilities, services or information as the nation receiving Mutual Aid is in a

Mutual Aid
position to supply and as may be determined by common agreement in the light of the development of the war. This provision will be of benefit to us should the war develop in such a way that at some time in the future we require a greater value of goods and services from any of the countries receiving Mutual Aid than they require from us. In such circumstances we would be able to request reciprocal Mutual Aid. Up to the present, however, we have not needed to obtain reciprocal aid in goods and services, because all the countries with which we have been concerned have needed a much larger value of supplies from us than we have needed from them. To have requested them to provide us, as reciprocal aid, with part of the supplies we purchase from them at the present time would only reduce their ability to buy from us and increase the size of the excess to be provided by Mutual Aid.


Joseph William Noseworthy: What was the year on which the minister said the bureau of statistics based our national income at something over seven billion dollars?


James Lorimer Ilsley: For the twelve months ended June 30, 1943. I should have made it clear that this basis.as nearly as possible is the same as that which is used by the United States in regard to their national income, on which their contribution to UNRRA is based.


Joseph William Noseworthy: It is for the same
year?


James Lorimer Ilsley: Yes. In connection with reciprocal aid I should say that we have obtained some. At page 8 of the report of the Canadian Mutual Aid board the hon. gentleman will find the following:
T'he United Kingdom on its own initiative has given Canada reciprocal aid in the form of six destroyers for the Royal Canadian Navy, and has announced its intention to provide Canada with two cruisers and other ships in the near future. The United Kingdom since early in the war 'has been providing without charge the armament for many of Canada's merchant ships.
The general picture, however, is as I have stated it; the requirements of the other countries from us have been so much greater than our requirements from them that the reciprocal aid provisions have not been brought into play to any extent.


Joseph William Noseworthy: Does the minister know if any Mutual Aid has been requested by or granted to Newfoundland under this arrangement?


James Lorimer Ilsley: Neither requested nor
granted.


Joseph William Noseworthy: Does the minister know whether aid has been granted by the United States under Lend-Lease?


James Lorimer Ilsley: Yes, I understand there has been some.


Agar Rodney Adamson: Have any goods been supplied under the Mutual Aid plan for the rehabilitation of devastated areas? I have in mind particularly Russia, where I understand some rebuilding is now going on. This is one of the problems we shall meet in the rehabilitation of the devastated areas. Would the equipment for that work, which we 'shall 'have to do or at least help and support, come out of this fund?


Clarence Decatur Howe: The Mutual Aid is purely for war, material and supplies used for war purposes. There are other provisions for looking after devastated countries. Of course the UNRRA provision is definitely for that purpose. In addition, there is military aid, which wili be given during the period when the army will be in charge of relief and rehabilitation; in the months immediately succeeding the occupation. Canada participates in UNRRA, as my hon. friend knows, and arrangements are being made to the end that Canada will participate in fair proportion with other countries in the work of military relief.


Harry Rutherford Jackman: Would the minister explain exactly how the shipments to these various countries originate. Is it by application from these countries; does that application go to the joint board of which the minister spoke? I ask this question because I understand some offers of assistance were made to certain areas, perhaps in particular to Bermuda and the West Indies, which offers were refused by those countries because they had means of their orwn and wished to pay for whatever they got. I should like to know exactly what procedure is followed in granting this largesse, if I may so call it, to other countries.


Clarence Decatur Howe: The usual procedure is that the country desiring Mutual Aid makes application to the Department of External Affairs. The qualifications for Mutual Aid are checked by external affairs and by the treasury department and the country is approved as a recipient of Mutual Aid. After that, applications for specific items are filed with the administrative officer of the Mutual Aid board. Such items are cleared by him with the agencies in Washington and with our own chiefs of staff as to essentiality, and if approved in both quarters they are submitted to the Mutual Aid board in Canada for approval. After that, orders are placed through the Department of Munitions and Supply in the
Mutual Aid

case of munitions, or through the Department of Agriculture or the Department of Trade and Commerce in the case of foodstuffs. In most cases deliveries are made at a port in Canada. Goods for China, however, are delivered to their destination by Canada.


Harry Rutherford Jackman: The information I had came to me from quite good authority and I should like to know from the minister


Clarence Decatur Howe: As to the West Indies? I may say that the West Indies are purchasers of supplies in Canada, particularly wheat and foodstuffs, which they have purchased year in and year out. The increase in shipping rates from Canada through the Mediterranean added greatly to the cost of those foodstuffs in the West Indies. Looking at the problem as a whole; bearing in mind that Canada was sending flour to the United Kingdom and1 that the United Kingdom was sending back a certain amount of flour to the West Indies, it seemed reasonable that instead of Mutual-Aiding all the flour to Britain, we could Mutual Aid a certain amount of flour to the West Indies. The offer was made to the West Indies as a whole and was gladly accepted by most of the islands. One or two felt that they did not require the aid and declined, but we did ship a fair amount of flour to the West Indies under Mutual Aid, and I think we were quite justified in doing so under the circumstances.


Harry Rutherford Jackman: I am not objecting to Canadian flour being sent to the islands which need it and are not in a position to pay for it in dollar currency. Nevertheless the minister has just admitted that we offered flour to certain of the islands in the West Indies, which offer was declined. I do not see how that ties in with his former statement that these supplies are delivered after an application is made by the requesting country, which application must be cleared by external affairs, then by the finance department, and finally approved by the joint council. Here we have actual instances of the money of the Canadian taxpayers being offered, in the form of our good wheat and other supplies, to certain recipients who have said that they were quite able to take care of themselves, that they did not wish any free gifts but were quite prepared to pay for what they got. I do not know why the administration of Mutual Aid should adopt such a procedure with the taxpayers' money.


Clarence Decatur Howe: Perhaps I was not quite correct in my facts. The first approach from the West Indies came from the largest of the islands of that group. There was a request for Mutual Aid by way of flour from Canada.

We have the same relationship to all the British West Indies, and it was felt we could hardly meet one request without making an offer to all the West Indies.


Harry Rutherford Jackman: Even if you have a request from one, and not from the others, you decide you must make the same offer to all?


Clarence Decatur Howe: We felt that way. Perhaps my hon. friend would have done it differently. However, that does not alter the fact that we did it in that way.


James Lorimer Ilsley: I would point out that the taxpayers of Canada were not adversely affected by the offer, nor would they have been by an acceptance of the offer.


Harry Rutherford Jackman: As I understand it, a particular island, or islands, actually paid for it. Whether they paid for it in United States currency, which they had available, or whether they preferred to pay for it by giving us sterling credits which would eventually be available for spending by Canadians in that area, I do not know. But if it was paid in either of those currencies, certainly the Canadian taxpayer is much better off.


James Lorimer Ilsley: It would be paid for in Canadian dollars obtained from Great Britain, thereby lowering the pool of Canadian dollars in Great Britain, and necessitating a larger amount of Mutual Aid to that country.


Donat Raymond: To what countries have we contributed in connection with Mutual Aid?


James Lorimer Ilsley: Great Britain, the United Kingdom, the Union of Soviet Socialist Republics, Australia, China, India, the West Indies and the French Committee of National Liberation.


Donat Raymond: Could the minister
explain in what way Great Britain has contributed to Canada? I understand it is Mutual Aid?


James Lorimer Ilsley: Yes.


Donat Raymond: Then, as the hon. member who sits next to me said a moment ago, if jt is Mutual Aid it should be mutual. Otherwise it would be just on one side. What is the contribution by Great Britain toward Canada?


James Lorimer Ilsley: I do not think we have done any more for Great Britain in this war than Great Britain has done for us. The hon. member may have a different view about it, but I do not think so. I explained fully to the hon. member for Macleod, I thought, the basis for the use of the word "mutual". It is based upon the fact that when a nation sends its

Mutual Aid
men out, and those men lose their lives, they are doing something for the common eause- just as we are, when we make machines, and so on, and contribute them to the war. If the hon. member suggests that it must be machine for machine, then it is the same as dollar for dollar, and the whole principle of Mutual Aid or Lend-Lease disappears from the picture entirely. Nations have been trying to get away from this idea of cash on the barrel-head, and material value for material value. They have reached the place where they think that if we are to win this-war we have each to do everything we can in our own countries.


Donat Raymond: So that when Canadian soldiers are fighting in Europe they are still contributing to Mutual Aid. It is another kind of contribution; is that correct?


James Lorimer Ilsley: They are making a contribution to the joint cause, of course.


Donat Raymond: And if I understand correctly, the minister said that the Mutual Aid coming from Great Britain or from Russia is because they defend liberty, and so on. Is that correct?


James Lorimer Ilsley: That is part of it; but they also undertook certain obligations under the agreement.


Donat Raymond: Well, when Canadian soldiers are fighting on the other side, they are still contributing to Mutual Aid-


James Lorimer Ilsley: Oh, well-


Donat Raymond: -besides this item of supplying munitions and goods; is that correct?


James Lorimer Ilsley: They are contributing to the common cause; there is no doubt about it.


Mr. MACKENZIE (Vancouver Centre):: To our own defence.


Donat Raymond: But this is another contribution, is an additional contribution; is that correct?


James Lorimer Ilsley: Yes.


Donat Raymond: That is all I want to know; I just wish to have it clear.


Gordon Knapman Fraser: In the event of a country asking for Mutual Aid in respect of food products, how does the government, or the board in charge go about procuring those products? Let us suppose that one or two companies advertised in the country to which the food was to be sent. Would the board ask the companies which made that food, to supply it, or just those companies which had exported it in the past?


Clarence Decatur Howe: The combined food board, and our Department of Agriculture handle purchases of that type. I may say, however, that so far as the United Kingdom is concerned, all trade names have been barred for the duration of the emergency. The packages are all stamped with the Canadian Mutual Aid emblem, and, so far as the board is concerned, that is the only emblem required.


Harry Rutherford Jackman: What is the emblem?


Clarence Decatur Howe: The maple leaf, with the name of "Canada" printed in four languages.


Agar Rodney Adamson: There is no consideration, is there, with respect to Italy so far as Mutual Aid is concerned while she is theoretically a co-belligerent?


Clarence Decatur Howe: No. She is not an ally.


Joseph William Noseworthy: At page 24 of the report of the Canadian Mutual Aid board we find a chapter dealing with the French Committee of National Liberation. We find this statement:
Shipment of these army stores is scheduled to commence early in the fiscal year 1944-45.
Have shipments gone forward?


Clarence Decatur Howe: There was some delay in making contact with the French Committee of National Liberation, with the result that only one or two shipments, comprised chiefly of naval guns, have gone forward. However, a major shipment is about to leave at this time.


Harry Rutherford Jackman: I was interested in the remarks of the Minister of Finance a few minutes ago, and I may have something further to say later on. Would it be convenient for him to give the specific item and the total amount of securities, gold and other assets we took over from Great Britain in order to pay for what is now called Mutual Aid. I think we started by taking over $250,000,000 in gold outside the ordinary trading account. Could the minister give the items, showing the securities in gold, and other forms, taken from Great Britain since the war started.


James Lorimer Ilsley: The hon. member knows that the main item is the repatriation of securities.


Harry Rutherford Jackman: Yes.
_ Mr. ILSLEY: He wishes to know what there is in addition to that?


Harry Rutherford Jackman: Yes, just the major items.


James Lorimer Ilsley: There was about $700,000,000 worth of securities officially repatriated; that is, by the British government and transferred to Canada officially. There was an unofficial

Mutual Aid

repatriation of about 1100,000,000 more; that is, the sale of securities in Canada. There was some gold as well.


Harry Rutherford Jackman: 


James Lorimer Ilsley: There was $250 million in gold in 1939 and 1940 and $165 million in gold in 1943.


Harry Rutherford Jackman: What was the total of Canadian government and government guaranteed securities? Was it just $700 million? I think it ran to larger figures than that. Then you have the loan from Canada of $700 million against the pledge of specific collateral. How much was that and what was it worth?


James Lorimer Ilsley: The figures about the securities are approximately correct, $800 million altogether.


Harry Rutherford Jackman: That is government and government-guaranteed securities.


James Lorimer Ilsley: There were $700 million of government and government-guaranteed, and $100 million would be something else.


Harry Rutherford Jackman: War assets.


James Lorimer Ilsley: There were the British investments in factories in Canada, $205 million.


Harry Rutherford Jackman: What is the status of the $700 million loan which we made to Britain against the pledge of certain collateral securities, which, if sold, were to be returned to Canada?


James Lorimer Ilsley: This obligation of $700 million which Canada holds has been reduced to some extent by the sale of securities by the United Kingdom. It was agreed that the proceeds of any sales or redemptions would be applied to the reduction of the loan.


Harry Rutherford Jackman: What is the approximate market value of the $700 million to-day? I understood it was made up of stocks rather than bonds. I presume that the collateral has fluctuated in value.


James Lorimer Ilsley: It is not exactly collateral; it is not a pledge; we have the agreement from the United Kingdom that if they dispose of any of the securities-[DOT]


Harry Rutherford Jackman: We would not take more than $700 million.


James Lorimer Ilsley: Oh, yes.


Harry Rutherford Jackman: Nothing over $700
million.


James Lorimer Ilsley: Perhaps I do not understand the hon. gentleman.


Harry Rutherford Jackman: As I understand it, our
government made a loan of $700 million or gave Britain a credit for that amount against the pledge of certain specific securities.


James Lorimer Ilsley: That is not it.


Harry Rutherford Jackman: They were vested in the government of Great Britain by nationals in Great Britain who held them. If any were sold, the amount would go to Canada to redeem the $700 million loan. I may be surmising, but I understood that one reason why we took them over was that owing to our taxation policies the values of these securities, which were mainly stocks, were greatly depressed at the time and it was considered unfair to take them over at low prices. Therefore we agreed upon what was the approximate market value in figuring this loan. Since then, the value of the securities may have increased substantially and I merely wish to know if that is the case.


James Lorimer Ilsley: I might be able to get the present market value in Canadian dollar securities, now held in Great Britain.


Harry Rutherford Jackman: I remember there was
some talk last year about Great Britain still having a billion dollars worth of Canadian securities and that they were pledging some of those against the $700 million loan. What is the situation now with regard to Britain's holdings of Canadian securities? I believe the minister said a moment ago that the amount outstanding is still $700 million.


James Lorimer Ilsley: That is right.


Donat Raymond: I should like to verify the point I raised a moment ago. This resolution is for the purpose of introducing a bill to provide a sum of $800 million in order to supply war materials to the united nations. Is there any other country which contributes in the same way as we are doing at the present time?


James Lorimer Ilsley: Yes. An outstanding example is the United States of America. To date their Lend-Lease contributions amount to $24 billion. In my remarks when the resolution was introduced I referred to the fact that other parts of the British empire furnished large sums by way of reciprocal aid. That is true of Australia, New Zealand and the United Kingdom. The United Kingdom also extends Mutual Aid of her own production to certain other countries, such as Spitfires to Russia.


Donat Raymond: Do I understand that Great Britain uses war supplies received from Canada or the United States to supply Russia?


James Lorimer Ilsley: No. The transfer of supplies is referred to in the agreement and it cannot

Mutual Aid
take place without the consent of Canada. It is not taking place to any extent, although it might be impossible to prevent some from going out. Probably it ought to because it might be the most advantageous use of the goods, but they are not being sold.


Donat Raymond: Were they not sold to Australia a year ago?


James Lorimer Ilsley: I think that is so. I think in the first year of our arrangement Great Britain charged Australia sterling for some of the goods that went there, but we regarded that as an internal arrangement in the sterling area. That is not going on now. I understand that that transaction is not completed; it is not finalized, as we say.


Agar Rodney Adamson: The goods are not irrevocably earmarked for shipment? If goods are shipped to one country and another country needs them, they can be transferred to the second country?


Clarence Decatur Howe: We can transfer them.


Agar Rodney Adamson: Suppose we are making a shipment to China which goes to India and that shipment is needed by the United States authorities; can they take that shipment, or what is the machinery for transferring it? If we had a shipment to Great Britain and Great Britain found she had ample supplies of that particular article but that Russia was short, could the shipment be transhipped to Russia or to any other of the united nations with our consent, without our consent, or by what machinery?


Clarence Decatur Howe: In the case of a shipment to the United Kingdom which the United Kingdom wishes to divert to Russia, the consent of Canada must be obtained. The charge would then be transferred from Britain to Russia. In other words, we would regard it, not as a Mutual Aid transaction with England, but as a Mutual Aid transaction with Russia. The provision of our several agreements is that goods sent to one country under Mutual Aid cannot be transferred by that country to another country. In the case of the last shipment to China, for delivery through an Indian port, an arrangement was made with the Chinese government to the effect that if the material is required for the war in India, Canada shall have the right to divert it.


Agar Rodney Adamson: That is an agreement [DOT]between the- Chinese and Canadian governments?


James Lorimer Ilsley: I do not want to give a wrong impression about the dealings of the United Kingdom with Australia. I do not know what they are. Since I made the reply
100-236i
that I did, I have been informed by the officials that the goods for which Great Britain charged Australia were goods of Canadian origin purchased by Great Britain in Canada. I am also informed that the transaction is not completed, that there are mutual claims and so forth between the United Kingdom and Australia. I do not want it to go out from this parliament that I am making any statement about these transactions, because I do not know what they were as between the United Kingdom and Australia.


Grote Stirling: A good deal of information is given with regard to our dealings with the United Kingdom, what the United Kingdom received and what the United Kingdom gave; but as far as I can make out, similar information is not given with regard to the transactions with other countries. The minister did refer to Australia's contribution being considerable for a country of her population and resources; but in the case of the Union of Soviet Socialist Republics, Australia, China, the West Indies and India, I do not find in this report the contributions which they may make to Canada under their part of the Mutual Aid Act.


James Lorimer Ilsley: We have not for Australia and the other countries nearly as complete figures 'as we have in the case of Great Britain.


Harry Rutherford Jackman: In regard to brands on any goods shipped abroad under Mutual Aid, I understood the Minister of Munitions and Supply to say that it was the policy of our country and perhaps of other countries Under Mutual Aid to ship the goods without any specific brand on them. I do not know that I hold any particular opinion as to the rightness or wrongness of that policy. Where competition either now or post-war may exist as between respective allied countries, there may be very good reason for not putting any brand on, but where the potential competition is between one of the united nations and perhaps another country-let us take the case of Canadian bacon against Danish bacon-I should like, to know the reasons behind the government's policy in not being willing to have any of these articles branded for which we are developing new markets in Great, Britain and elsewhere and where the brands; may be of considerable importance post-war,, vis-a-vis some other country which is not one of the united nations. Would the minister state the reason?


Clarence Decatur Howe: The brand that goes on all these goods is the brand shown here-the maple leaf with a circle in which the name
Mutual Aid

"Canada" is printed in large type in English and in French, in Russian and in Chinese. That is the brand on Canadian Mutual Aid shipments. It was the decision of the British government that the material bought by the British government for distribution in time of distress should not bear the name of the firm from which the material was purchased. I hope my hon. friend will not ask me why, because I cannot tell him. But the fact is that large shippers from this country are not permitted to put the brand of their firm on their shipments of foodstuffs.


Gordon Knapman Fraser: That is just a new ruling?


Clarence Decatur Howe: No; it has been in force for the last few years.


Harry Rutherford Jackman: The reason why I asked the question was that the information which came to me quite a year ago was that the Americans, for instance, were sending over powdered eggs in little cartons that held the contents of half a dozen with the Lease-Lend JBIue Eagle mark on the package, whereas our powdered eggs were in large cartons and were used in the bakery trade rather than by the small consumer. I had that on good information, although it is by no means fresh now, and I should like to know what we are doing at the present time to identify our goods not only with the Canadian Maple Leaf but [DOT]whether we are packaging them in such a form that they will go to the large body of consumers rather than to a specific few? In other words, while we are in a joint war and everyone is willing to make sacrifices in the common cause, nevertheless where it is fair I think we must also keep a weather-eye out for post-war trade. I would ask the minister if he knows how powdered eggs from Canada are going over at the present time.


Clarence Decatur Howe: The combined food board
purchases British requirements in Canada and in the United States, and I am told that the specifications in each country as to packaging are the same. The United States puts on its packages the Lend-Lease emblem and Canada puts on the Mutual Aid packages the Canadian emblem. That is the only difference betweeen the two. I think we are supplying large packages and small packages. I am told that we do, and that the United States has the same range of packages.


Ernest George Hansell: There is just one point
I should like to make clear in my own mind. Giving this Mutual Aid to the united nations is an admirable gesture, but I would ask the minister if there is any difference between
I Mr. Howe.]
giving aid in this form and in trading with these nations in the ordinary way and then cancelling $800,000,000 of their debt to us. It seems to me that that would be less complicated. Would it result in any difference? Does it not amount to that after all?


James Lorimer Ilsley: It is hard to know just what the hon. gentleman means when he asks whether it is the same? It obviously is not the same.


Ernest George Hansell: Does it not have the same effect?


James Lorimer Ilsley: So far as I can see, the
ultimate economic effect is identical; that is, if we wanted to do it another way; if we wanted to get out a book and charge up each of these countries with so many dollars worth of goods and then, after they get the goods, burn up the book.


Frederick Davis Shaw: Would that not be cheaper?


James Lorimer Ilsley: No, certainly not.


Frederick Davis Shaw: Under the present set-up you have various organizations handling Mutual Aid, and a great many more employees would be necessary than to do it as the hon. member for Macleod suggests by simply cancelling the $800,000,000 worth of goods received by the recipient countries.


James Lorimer Ilsley: That is the reason why I
asked what my hon. friend meant by asking whether it is the same. Does the hon. member suggest that there should be no checking by this country of essentiality, that we should leave all that to the purchaser? It may be that he is suggesting that we should allow any country to have whatever it asks for? That would be a very different matter.


Frederick Davis Shaw: Trade is never done in that way. Does this country not exercise some authority in ascertaining what we shall sell?


James Lorimer Ilsley: I will tell the hon. gentleman how trade is done. A person buying pays for the goods, and that is a salutary check on what he orders.


Frederick Davis Shaw: I doubt that the statement is absolutely correct, because, if that were the case, there would never be one outstanding debt between two countries because of one country exporting a greater volume of produce than it imported from the other. The minister says they simply pay for what they secure. Technically speaking, that is not correct. If it were, there would not be international debts, . in the sense of one country owing another more because of excess purchases.

Mutual Aid


James Lorimer Ilsley: I do not know what the hon. gentleman is driving at. I foolishly took on an answer to a theoretical question the purport of which I did not understand. I am sorry; that is all J can say.


Ernest George Hansell: I must be satisfied with the answer 1 have received. Evidently in time of W'ar, with such international complications as exist in connection with goods, *perhaps it is the government's way of doing it.


James Arthur Ross: On page 15 of the report there is a reference to farm implements provided:
Ploughs	 2,898
Drills	 1,000
Binders	 1,845
Threshers	 205
Hammer mills	 731
With regard to the question raised by the hon. member for Rosedale, that certain goods were offered some nations who were in a position to pay for them, I am wondering if there is really a demand for these articles. The reason why I bring this question up is the fact that in Britain with one-third of the cultivable land that we have in Canada they have as many tractors as we have, and at the commencement of the war one-third as many. That may be good business; I do not know. At any rate, reference is made here to a number of different pieces of machinery. With the great shortage that exists in this country-and, as I have pointed out many times before, many people in Canada had orders and permits passed for drills for this spring which they have not been able to receive at this date, some time after seeding is over-I am wondering how these requests are arranged. Are they done through the Department of Agriculture in the old land, and is there a check-up to ascertain whether these commodities are essential at this time when production is hampered in consequence of man-power shortage and the shortage of labour-saving machinery?


Clarence Decatur Howe: During the past two years it has been thought that, solely from the viewpoint of winning the war, it is more advantageous to have foods grown in the United Kingdom than in Canada. My hon. friend knows that when the submaiine war was at its height, shortage of shipping was very serious. For that reason, during the past two years we have shipped a considerable amount of agricultural machinery to the United Kingdom. We did so because we believed that this woujd prevent the British people from starving, and if it caused some inconvenience to our own people, that is not a very serious impact of the war on Canada.


James Arthur Ross: Does the minister think that the same demand exists for this type of implement?


Clarence Decatur Howe: No; we are not shipping implements now.


Mr. McGEER:: I understand that the
Lease-Lend programme started with the $/00 million loan to Britain against which no securities were actually taken; following that there was a gift of one billion dollars to Britain, and following that, a gift of one billion dollars in Mutual Aid, without any arrangement that anything should be returned; and the present basis upon which this resolution will be passed, with the bill succeeding it, is the same. Is it not a fact that this was an arrangement agreed upon as part of the general war programme, where Canada did embark on a course peculiar to Canadian economy and Canada's war programme, and quite different from all the rest? The $700 million no doubt was similar to the Lease-Lend programme of the United States, because that $700 million was used to buy goods in Canada; but the remainder, totalling now roughly three billions in three years-two billion up to date and an extra billion now- is an out-and-out gift from Canada in Mutual Aid, without anything being expected in return. Is that correct?


James Lorimer Ilsley: If our requirements from Great Britain exceed her requirements from us she is obligated under these agreements to furnish Mutual Aid to us. That may be a very remote contingency; nevertheless the obligation is there. What the hon. gentleman says is substantially true, namely, that from the material point of view we are contributing, as I would say, to the common cause-


Gerald Grattan McGeer: And as best we can.


James Lorimer Ilsley: Yes. It goes to Great
Britain, a lot of this, but it is really a contribution to the common cause rather than a gift to the United Kingdom.


Gerald Grattan McGeer: Well, of course, the significance of that contribution of Canada to the common cause is that with the $700 million lent to Britain and the two billions already given in Mutual Aid, that comes roughly to three billions. Contrasting that total contribution from Canada with the total from the United States, our Lease-Lend programme is much more substantial proportionately to our population than the Lease-Lend programme to the south of us. There may be some people who feel that Canada should not make that kind of contribution. I believe that the great majority of Canadians will be proud of the fact that Canada is making that contribution and will be glad
Mutual Aid

to continue it so long as we can make it to the common cause and the struggle in which we are engaged. The only thing about it is that there are not many people throughout Canada who appreciate, in addition to the war programme that Canada is carrying on, the enormous contribution that Canada is making in this programme to the common cause, in proportion to her population and her industrial wealth.
There is one more observation in regard to the common contribution which I desire to make, and that is the fact- that we are financing it ourselves. That is true, is it not? We are financing it without any aid either offered or expected in so far as the goods are produced and in so far as they are prepared for shipment to wherever they are going. The financial responsibility of providing the capital and the medium of exchange required is a purely Canadian enterprise. Is that correct?


James Lorimer Ilsley: That is correct.
Mr. MeGEER: And in that, I believe, we have found an indication of Canadian financial independence of all the world. If we can do that in war time and use our own financial power to make an enormous contribution to the cause of world freedom, we must never forget, when peace comes, that we Canadians do not have to go hat-in-hana into the financial markets of the world to borrow foreign capital to build Canadian institutions.


Harry Rutherford Jackman: Vice versa.
Mr. MeGEER: My hon. friend says, "vice versa." I realize that it would be extremely difficult to get any lessons of this kind across to that side of the house. Just what "vice versa" means, I do not know; but when I am talking about Canadian financial independence I am talking not about something that has .any vice versa about it.


Harry Rutherford Jackman: All vice.
Mr. MeGEER: This is one definite Canadian programme that has nothing to do with anything else. We have been taught for a great many years by that kind of nonsense that we did not have the means to finance ourselves. We had to borrow in Berlin; we had to borrow in London; we had to borrow, in Paris. We were a young country and we had no means that comes out of the accumulated wealth of the ages; but when this crisis came it was not the wealth of London that counted. We happened to be the rich uncle right here in Canada.
There is another observation I should like to make to the minister. If we could only speak as boastfully of what we are doing for old age TMr. McGeer.]
Canadians as of what we are doing for Mutual Aid in the cause of common freedom there would be a great many Canadians just as proud of that-


The CHAIRMAN:: Order.
Mr. MeGEER : -as they are proud of the splendid contribution we are making. I do not want to traverse that subject any farther, but I did rise in my place to emphasize the fact that our Mutual Aid programme is something of which every Canadian has good reason to be proud.
Resolution reported, read the second time and concurred in. Mr. Ilsley thereupon moved for leave to introduce bill No. 138, 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.
Motion agreed to and bill read the first time.



SURPLUS CROWN ASSETS


[Stage Direction]
The house resumed consideration in committee of bill No. 137, respecting surplus crown assets-Mr. Howe-Mr. Bradette in the chair.
On section 3-Departmental reports of surplus property.
Stanley Howard Knowles: I should like to ask the minister a question with respect to subsection 3 of this section. It is not a critical question; I am simply seeking information. Why is it that the two departments named are the only two excepted from the provisions of this paragraph?


Clarence Decatur Howe: The reason is that any live
stock or agricultural products held by the Department of Munitions and Supply or the Department of National Defence would have been bought- for consumption. They are not producers of those materials. Other departments such as the Department of Agriculture are producers of live stock and ordinary sellers of live stock, and producers and ordinary sellers of food products. My hon. friend will know that the government through its agencies has a great many experimental farms which produce agricultural products.


Stanley Howard Knowles: I can understand that in so far as the Department of Agriculture is concerned, and perhaps the Department of Pensions and National Health, and maybe some others. But what about the Department of Finance and the Department of the Secretary of State?

Surplus Crown Assets


Clarence Decatur Howe: Neither of those has anything to sell. They have no surplus assets.


Stanley Howard Knowles: According to the wording of this section, if any of those departments have any live stock or agricultural products, it looks as if they would not have to report them.


Mr. REID:: Could the minister tell the
committee why he does not include fishery products as well? I take it that the Department of National Defence and the Department of Munitions and Supply may have in one of their departments surplus supplies of canned goods which would properly come under agricultural or dairy products. There is no doubt that the Department of National Defence, if not the Department of Munitions and Supply, would have supplies of canned salmon and fish as well. I am therefore wondering whether it should not be included in the bill. Perhaps the minister can explain the reason why it was left out?


Clarence Decatur Howe: The Department of Fisheries is not a producer of fish in the sense that the Department of Agriculture may be a producer of live stock or of wheat. It may buy fish but it does not catch them; therefore, if it had any stock of fish to dispose of, it would be quite proper to report it under section 3, subsection 1.


Thomas Reid: The Department of Agriculture does not grow any live stock; it gets them from the farmers.


Clarence Decatur Howe: No; they are owners of
experimental farms.


[Stage Direction]
Section agreed to.
Section 4 agreed to.
On section 5-Crown assets allocation committee.
Stanley Howard Knowles: I have a question I should like to ask the minister. I tried to locate it in Hansard, but I did not manage to do so in time. I recall that the minister indicated on Thursday evening that the crown assets allocation committee which was set up previously under order in council consisted mainly, if not exclusively, of senior civil servants. I believe he said that they were of the rank of deputy ministers or assistant deputy ministers. Is that to be the policy under the provisions of this bill, and, if so, is there, any place in the bill itself where it is provided?


Clarence Decatur Howe: The departments specified in the bill are entitled to representatives on the committee. At the moment those representatives are high ranking civil servants from those
departments. The chairman is a full-time appointee, and there are three members of the committee who are not associated with government work. There is a representative of the farmers, a representative of householders and a representative of labour. The full-time chairman and the representatives of the several departments with the three special representatives compose the committee.


Stanley Howard Knowles: I am sorry, but I do not seem to be able to find where that composition is specified ini the bill. Would the minister point it out to me. It seems to me that all we have is the simple statement that the minister with the approval of the governor in council may establish the committee.


Clarence Decatur Howe: Apparently the governor in
Council determines the composition of the committee by order in council. I had forgotten that it was not in the bill; but each department is to be represented, and in fact all appointments to the committee are recommended by the minister and approved by the governor in council. Naturally the minister responsible obtains recommendations from the several departments entitled to representation.


Stanley Howard Knowles: Then there is no guarantee in the bill itself that this procedure will be followed. I am not arguing that it is necessarily the only procedure to be followed; I am just pointing out that the minister said, and has just repeated, that this is to be the practice. The purpose of bringing in this bill was to supersede the order in council and put the matter on a legislative basis, and I point out that this particular feature has not been provided for in the legislation.


Clarence Decatur Howe: That may be true; probably
it was not provided in the order in council which established the machinery. A separate order in council set up the committee; but that would be on the recommendation of the minister, which would include the names and designations of the members of that committee. Another government could change the composition of the committee if it wished to do so.


Stanley Howard Knowles: As I see it, there is nothing in the bill that would prohibit the crown assets allocation committee and the board of the War Assets Corporation from being the same personnel.


Clarence Decatur Howe: They could be, if the government wished.


Gordon Graydon: Is there any special motive in using the languge of this section, which says that the minister, with the
-zsm
Surplus Crown Assets

approval of the governor in council, may do certain things? My understanding of the draftsmanship of bills of this kind is that usually power is given to the governor in council. In this case, however, it seems that the minister is the initiating authority and the governor in council comes in later by way of reference. Is there any special reason why that should be?


Clarence Decatur Howe: I think it only puts the actual procedure into words. The governor in council does not originate anything itself; everything is recommended by some member of council. It may be the Prime Minister, but usually it is the minister in direct charge of a particular effort. In this case the minister recommends and the governor in council approves. In the bill the minister is given certain powers which he may exercise of his own volition, while certain other powers must have the approval of the governor in council.


Gordon Graydon: I take it that the personnel of the present crown assets allocation committee will be continued when this legislation takes over and the order in council ceases to operate?


Clarence Decatur Howe: That is correct.


Grote Stirling: As I understand it, the principal duties of the crown assets allocation committee is to advise the minister after having ascertained what there is to sell. Does that committee advise at all as to how it shall be sold, or where?


Clarence Decatur Howe: Yes.


Grote Stirling: Then what is the function of the board? What does the board do?


Clarence Decatur Howe: The board does the selling.


Grote Stirling: It merely does the
selling?


Clarence Decatur Howe: The committee can recommend to the minister a scale of priorities. For instance, if it is dealing with road machinery, it can recommend that first priority be given to a province, second priority to a city and third priority to someone else. It cannot recommend prices, which is the function of the corporation, but it can attach any recommendation it wishes to any item it refers to the minister. Ordinarily the minister will pass on that recommendation to the corporation. It might come as an instruction from the minister, passing on the recommendation to the board.


Grote Stirling: But this committee is the really important body?


Clarence Decatur Howe: Oh, no; the functions are different. Each has its own function, and I could not say which is the more important. Certainly the corporation has a tremendously important task in determining the methods of sale, in pricing the products and in setting up an organization for distribution across Canada.


Grote Stirling: Does the minister anticipate that holding some of this material will be a very considerable operation?


Clarence Decatur Howe: Oh, yes.


Grote Stirling: The storage?


Clarence Decatur Howe: Yes.


Grote Stirling: Does the committee decide that?


Clarence Decatur Howe: No; the board will decide that. The committee may recommend that a certain item be held off the market. For example, the wartime prices and trade board has a representative on the committee. The committee may take the view on the recommendation of the wartime prices and trade board that it would not be beneficial to the Canadian economy to place a certain article on the market at this time. That recommendation would be passed on to the board, but ordinarily the board would be responsible for deciding when the material should be sold and at what price.


John Ritchie MacNicol: Is provision made in this bill for the control and disposal of crown assets in Europe or anywhere else?


Clarence Decatur Howe: Yes.


John Ritchie MacNicol: In what way?


Clarence Decatur Howe: The board has jurisdiction over Canadian surplus materials wherever they may be. It has power to open bank accounts abroad, to appoint representatives or committees abroad, and to open offices abroad. As a matter of fact the board is represented in London; one of our munitions and supply officers in London is the representative of the board for any disposal in the United Kingdom.


John Ritchie MacNicol: How about Italy and France and North Africa?


Clarence Decatur Howe: That will come later.


John Ritchie MacNicol: Is not the government of the United States setting up separate boards in those countries-


Clarence Decatur Howe: I dare say they are.


John Ritchie MacNicol: -to dispose of their surplus stocks after the war, particularly to rush the disposal? And should we not be doing that also?

Surplus Crown Assets


Clarence Decatur Howe: We have no problems in those countries at the moment. Any supplies we have in Italy are in the custody of the Canadian army in that country, and they are not surplus. If they should become surplus I daresay the army will find some way of disposing of them for value.


Harry Rutherford Jackman: At page 3646 of Hansard the minister said this crown assets allocation committee would review the statements of the various government departments in regard to surplus assets, as to whether or not they were really surplus to the requirements of the particular department.


Clarence Decatur Howe: Not of the particular department; of the government as a whole.


Harry Rutherford Jackman: Very well. I should think there would be just as much need for a corresponding provision for review as to whether or not certain departments were holding back in reserve assets which were not needed. It might be that certain departments of national defence would find themselves with a great deal of material which in the eyes of some of their officers would be useful as a reserve, but if they were reviewed by a proper authority-perhaps this board or perhaps some other committee of the cabinet-they would be found to be surplus. I am wondering whether it would not be well to insert in this bill some provision whereby not only the assets reported would be reviewed but it could be found out exactly what assets which might be surplus were still in the hands of various departments.


Clarence Decatur Howe: The minister of each department must be the judge of whether or not he has surplus material in his department. The officer representing the department on the committee is impressed with the desirability of not carrying surplus material, and I have no doubt he will exercise any influence he may have in the department in the direction of having surplus material reported to the board. But a committee of this type, or any outside authority, can hardly go inside any particular department of government and instruct the minister or the department as to what should be disposed of and what should be kept.


Harry Rutherford Jackman: Where will policy be made in regard to the operation of the Crown Assets Corporation? We have the minister, and it would appear from a reading of the bill that he has great power in a large number of cases. In fact, much of the decision seems to rest with him personally. Then we have the crown assets allocation committee, and then the officers of the War Assets Corporation.
Reverting to the question I asked this afternoon in regard to government policy with respect to the three billion dollars worth of surplus war assets which we may have after the war is over, will that amount or parts of it be withheld from the market so that ordinary business ma3' go ahead? That is a question of policy. That amount of three billions of dollars works out to about $300 for each man, woman and child. Many of those assets will, of course, be of a military nature, and of no possible civilian use. At the same time there will be a great deal of clothing and other items which could be converted to civilian use, and it will be a question of great concern to business men in this country to learn what is going to happen to those supplies, because on what is to happen to them will depend much of their planning for postwar employment. The minister gave me his answer, one which was not satisfactory to me. However I cannot force him to give a different one, if he does not care to do so.
Nevertheless I should like to learn from him this: With whom will that policy in connection with the disposal of surplus assets rest? Who will decide whether or not they will be thrown on the market, with the resulting dislocation of ordinary industry and ordinary workmen, or whether those surplus assets will be withheld from the market? Where would one expect to find that policy declared, as it must be declared, it seems to me, if business is to go ahead in the post-war period?


Clarence Decatur Howe: The Minister of Munitions and Supply has absolute authority over every purchase that is made, or has been made since the war began. But the Minister of Munitions and Supply has not made every purchase-has not made any purchase. He must see that he has an organization which functions reasonably, and along reasonable lines.
The Minister of Munitions and Supply bears the same relationship to the Crown Assets Corporation. He is responsible for the work of the corporation, and he exercises that responsibility through a board of directors of his own choosing, which he supposes to be competent to advise him in that relation. The board represents a cross-section of industry and consumers. I should think, if he were a wise minister, he would accept the judgment of that board on the larger questions of policy as well as on details. I think that should satisfy my hon. friend, if he will reflect on the whole situation.


Harry Rutherford Jackman: Which board will be advising? Is it to emanate from the minister,

Surplus Crown Assets

backed by the decision of those whom he considers worthy of advising him, or is it to come from the crown assets allocation committee? Or is it to come from the officers of the War Assets Corporation? I want to know where business men will find out the policy of this government at some time in the future, in regard to the disposal of surplus war assets.


Lionel Chevrier: It is contained in section 9 of the bill.


[Stage Direction]
Section agreed to.
On section 6-Term of office.
John Ritchie MacNicol: Section 6 states that the term of office of the crown assets allocation committee members shall be one year. Then the directors of the War Assets Corporation shall hold office for three years. In the United States their whole programme is based upon as short a term as possible. Is it expected that these gentlemen are to be in office for three years? It states that they are to be reappointed. Surely to goodness there will not be a long time intervening between the end of the war and the final disposition or final control of assets left over from the war. If it is to take a long time, then there will be a terrific cost by way of salaries of one kind and another.


Clarence Decatur Howe: The committee is appointed for one year. The reason is that it is an advisory committee, composed largely of government officers. The corporation is appointed for three years, with terms of two years and one year for certain directors. The purpose of that is to obtain continuity.
I feel certain that the work of the corporation will last for at least ten years. The last war ended in 1918, and we are still disposing of surplus material from it. Only the other day we sold some harness left from that war.


John Ritchie MacNicol: But we did not keep a committee in office for ten years after the war.


Gordon Graydon: May I point out to the minister that there seems to be strange incongruity between sections 6 and 7. Although we have not yet reached section 7,
I refer to it for purposes of comparison. It states that "the committee shall advise the minister". In other words, this is an advisory committee. I suggest that subsection 2 of section 6 destroys the position of the advisory committee, because it says:
(2) The committee shall be responsible to, and subject to the direction and control of the minister.
I do not know whether the minister sees the humorous aspect, but it does seem to me 
that if ever there was a committee which was thoroughly under the control, guidance and direction of the minister, this is certainly the one. It ceases to have that independence which an advisory committee should have.
I point this out to the minister in the thought that he might wish to have subsection 2 deleted. I should think that would be done, if the committee is to serve any useful purpose in an advisory capacity. How can a committee advise the minister when the minister himself, according to the bill as it now stands, exercises over that committee complete direction and control? It seems to me that is not the relationship which should exist between an advisory committee and the minister in charge. So as to relieve himself of any charge of having taken a dictatorial attitude, I suggest that the minister might well reconsider subsection 2, if, indeed, he has not already done so.


Clarence Decatur Howe: I take it that the committee must be responsible to someone.


Gordon Graydon: I have no objection to its being responsible.


Clarence Decatur Howe: I point out that the minister takes advice from a great many officers, for whom he is responsible. My hon. friend always likes to suggest some independent body that is responsible to no one. I could mention one or two organizations of that type, but 1 do not think they would be very helpful. The minister must take the responsibility. The government must take it ultimately, and the minister is responsible for advising the government.


Gordon Graydon: That is all right,


Clarence Decatur Howe: The minister must get his
advice where he can get sound advice. He forms this committee, which he believes is capable of advising him as to whether material is really surplus to government requirements. It may be surplus to the requirements of one department, or it may be material that another department can use. However, it is the duty of the committee to make sure that no department of government requires that material. That is their first duty. Then the committee looks into certain aspects which are purely governmental. Is it required for relief purposes? Is it required for Mutual Aid? Is it required for any purpose allied with government? Then it has regard to other governments. Is it material of a class that the provinces should have first option on, and the municipalities second option? It calls all these matters of general policy to the attention of the minister. The committee makes a recommendation to the minister on each item. The

Surplus Crown Assets
duty of the committee ends there. I might point out that there is no relationship between the committee and the corporation. My hon. friend asks to whom business would go to deal with. It would go to the corporation; it would have nothing to do with the committee. The committee looks at things from the government viewpoint and the policy viewpoint. The actual selling is done by the corporation, and the corporation will be the only agency that will have any relationship with the public, or with business, or with anything else. The duty of the committee is to advise the minister.


Gordon Graydon: I think the minister
missed my point with respect to the question of responsibility. I did not intend to convey that criticism to the minister. If I did not succeed in making myself clear, perhaps I may do so now. I think it goes without saying that the committee would be responsible to the minister and I should think no one would raise an objection about that. My objection was that under subsection 2 the committee would be subject to the direction and control of the minister. That was the part of the section to which I objected. I can rightly understand that there must be responsibility, but when you give direction and control it seems to me that that takes away the real effect of an advisory committee.


Stanley Howard Knowles: I would point out to the leader of the opposition that there might be objection if it were the other way around. The minister could come into the house some day and say, "I am sorry; I have no control of the committee." If he said that, we in the opposition would state pretty clearly that we considered he was responsible.


Clarence Decatur Howe: I think the wording is correct. The minister may ask the committee to investigate any aspect of a transaction and the committee is bound to do so. The minister is responsible for the salaries paid the chairman, and to those members outside the government service.


[Stage Direction]
Section agreed to.
Section 7 agreed to.
On section 8-Secretary and officers.
John Ritchie MacNicol: Will the secretary and other officials be taken out of the present civil service, or will this mean the establishment of a new staff?


Clarence Decatur Howe: The section states that the staff shall be appointed or employed in the manner authorized by law; that means through the civil service commission. In
100-237i
addition, the minister may temporarily employ such persons of technical or professional attainments as he may deem necessary, as well as other temporary employees.


Mr. NOSE  WORTHY@: The words "authorized by law" would bring these employees within the scope of the civil service?


Clarence Decatur Howe: Yes.


[Stage Direction]
Section agreed to.
On section 9-Ministerial powers.
Mr, GRAYDON: I want to raise objection to the wording and the language of this section. I wish to know what was in the minister's mind, because I am quite sure that this bill bears the mark of the minister's handiwork. I should like to know his motive in phrasing this particular section which states that he may do certain things with specific or general authority from the governor in council. I am afraid the governor in council may be tempted or invited by this section to give a blanket cheque or blanket authority to the minister. If I may say so, I think the minister has already clothed himself with wider powers under this bill than are normally given to a minister of the crown. I should like to have the minister's answer on that point.
Clarence Decatur Howe: There is certain general
authority given to the minister. For example, he can exercise his own authority in transactions amounting to not more than $15,000. He has general authority to turn over to the War Assets Corporation material which is classified as scrap. But if he wishes to dispose of a building costing more than $15,000 or any item costing more than $15,000, he must have specific authority from council. That is why specific and general authorities are both mentioned.


Grote Stirling: Where is the reference in the bill to the $15,000 limitation?


Clarence Decatur Howe: That authority is given by order in council.


Grote Stirling: The minister receives tremendous powers under section 9, and I notice that, later on, powers similar in nature although not quite as extensive or numerous are given to the board. Would it not be possible under this section for the minister to set aside the board if he chose to do so?


Clarence Decatur Howe: Certainly.


Grote Stirling: He could then proceed to exercise these powers.
Surplus Croim Assets


Clarence Decatur Howe: Yes. Strangely enough, the authority is with the government. If the board makes a bad decision, the minister could certainly overrule it.


John Ritchie MacNicol: This section certainly embraces a lot of territory, as anyone who is acquainted with the complexities of industry will realize. I have heard an hon. member- not a member of the government-advocate that his town should be permitted to buy road machinery cheaply. That particular town happens to be a coal producing town which ships coal to Ontario. If such a policy were pursued I wonder how the employees here *would be able to buy the coal which would be shipped from that town. I hope that in the disposition of all this material the question of jobs which may be affected thereby will be considered. Those who are familiar with production know that since the war broke out the iron industry has increased 100 per cent, which means that there will be tremendous stocks of iron goods for sale. It will take almost dictatorial powers to control the sale of those surplus iron goods so as not to interfere with reemployment which will be very important after the war. The total capacity of electric power plants has increased very largely. The capacity is twenty-five per cent greater now, and before the war is over, production will be still higher. It is greater to-day than ever before. If machines are thrown on the market in a disorderly way- that is a very good expression-it would, of course, affect employment in the electric production business. The same applies to the aluminum business, which has gone up 500 per cent since the war broke out.


Clarence Decatur Howe: By 1,100 per cent.


John Ritchie MacNicol: The official United States report which I have here says 500 per cent, but the minister may have later information. The figure I gave is for 1942. The magnesium business, new in this country, has grown by 100 times greater in the United States, and perhaps it is more than that now. I am not greatly opposed to dictatorial powers if they are required to prevent the flooding of the market with cheap material.


Ernest George Hansell: It does appear that there is great power being placed in the hands of the minister by this section. I do not know whether all that is necessary or not. I am not a business man, and I do not understand very much about crown corporations. But when you read of all the power that is being given to the minister, and give him power "to do any *other thing", that means he is all-powerful.


Gordon Graydon: Omnipotent.
tMr. Stirling.]


Ernest George Hansell: However, I will content myself with going on record with that observation. May I ask this question? By paragraph (a) the minister may:
.	.	. sell, exchange, lease, lend or otherwise
dispose of or deal with surplus crown assets either gratuitously or for a consideration.
Apparently something is to be given away, so that once again the government believes in something for nothing. Could the minister give us a case where that might be done? I can understand that obsolete machinery might be given to provincial governments or something like that. But it does seem to me that this section may lay the minister or the government open to a good deal of criticism. That seems to me quite a loophole in this bill. I do not suppose that the government would do anything that they should not do, but this does leave it open to somebody to carry on quite a racket. I do not think the minister would. I think the government is sincere in this legislation, but it does seem to me that there are quite a few loopholes in the bill. Certainly it does not seem to be water-tight. I do not want to get out of bed on the wrong side in the morning, but equally I do not like to get into bed on the wrong side at night. Would the minister throw some light on paragraph (a) ? What example can he give of where it might be advisable to give any assets away? I might like to get in on that.


Clarence Decatur Howe: The army in Italy might very well have surplus foodstuffs or surplus equipment that might be very badly needed by the starving people of Greece just across the Adriatic, and under this paragraph the minister would have authority, if he received that advice, to instruct that the material be transferred to Greece as a gift to the Greek people. That is one application. It would be a matter of charity on a national scale.


[Stage Direction]
Section agreed to.
On section 10-War Assets Corporation.
Stanley Howard Knowles: I want to ask a question, and if I may refer to a subsection of another bill I can put my question more quickly. Section 7 of the bill to amend the Aeronautics Act provides:
No member of the board shall either directly or indirectly engage in manufacturing or selling aircraft or in the transport of goods or passengers by aircraft for hire or reward.
And so on. I am wondering if there should not be a parallel clause in this bill. My hon. friends . to the right, particularly the hon. member for Rosedale, are quite concerned lest business has not proper connections with this War Assets Corporation. My fear is

Invasion oj Western Europe
that the connections of business with it will be too good for the welfare of the country as a whole. I should like to see some independence on the part of the members of this very important board comparable with the independence which the' minister prescribes in the act for the aeronautics board to which I have just referred. Would the minister make a statement on that?


Clarence Decatur Howe: The two are quite different. The aeronautics board is a judicial board as well as an advisory board. It has certain judicial functions to perform which would be prejudiced if any member of the board were interested in the operation or manufacture of aircraft. In the case of this corporation the minister is responsible, and the board is responsible to the minister for exercising its best judgment. It is a type of judgment that can best be exercised if a man has practical experience in that line. For instance a mining man would be the best adviser on the disposal of mining machinery and a merchant would be the best adviser on the best method of merchandising. It is just as in the operation of war plants we obtain the services of a man familiar with the type of operation required. He may also be operating a plant of his own in a small way.


Stanley Howard Knowles: But it; does seem to me that the powers of this corporation are greater than the functions of the committee. I felt, as the minister was speaking, that he was referring more to the work of the advisory committee than to the work of the corporation. Wider powers are set out in section 12.


Clarence Decatur Howe: If my hon. friend does not mind postponing this discussion, I will ask that the committee rise and report progress so that my colleague may introduce another item of business.	-
Progress reported.

Hon. J. L. RALSTON (Minister of National Defence) moved that the house go into committee of supply.


Stanley Howard Knowles: Mr. Speaker, I do not intend to take more than a minute or two, but I should [DOT] like to make a request of the government. As a matter of fact, I made my request in the form of a suggestion to the Minister of National Defence this morning, so that what I am about to say will not come as a surprise to the government. On Friday night when the house was adjourning he indicated that the government would call supply to-day and that,
if we went into supply, items would be called in each of two departments. It was indicated that this would complete the list so far as going into supply was concerned. I suggested that since the session may last for a number of weeks yet and hon. members, on the opposition side at any rate, and private members on the government side, would like to feel that it was possible later on in the session for them to raise certain matters on going into supply, we might go in to-night and call an item in one department, leaving one last department open for a later date.


Thomas Alexander Crerar: We had already anticipated the hon. member's request and it was the intention to call only one item to-night. That leaves one remaining, on which my hon. friend and his associates can make all the speeches they wish. They will have that opportunity.


Gordon Graydon: I hope it will not be
taken advantage of too fully.


Ian Alistair Mackenzie: So do we.


Thomas Alexander Crerar: I am only saying that the opportunity will be there.


Stanley Howard Knowles: I did not promise a speech.


Gordon Graydon: No; you threatened one.
Motion agreed to and the house went into committee of supply, Mr. Golding in the chair.



DEPARTMENT OP FINANCE

[Stage Direction]
Service-
J/7. Departmental administration, $581,751.
James Layton Ralston: The item stands.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Tuesday, June 13, 1944