1946-08-07

[Stage Direction]
Right Hon. L. S. ST. LAURENT (Acting Prime Minister): Mr. Speaker, I rise to speak to a matter of privilege, in the absence of the [The Chairman.]
Prime Minister (Mr. Mackenzie King), and on his behalf. I raise this matter of personal privilege relating to a news item published in the Ottawa Journal of yesterday under the heading "Low charges Mr. King courted communists." This article is dated at Noranda, Quebec, August 6, and states:
Solon Low, national leader of the Social Credit party, in an address here said Prime Minister King "deliberately courted the communist party in the 1945 federal election."
Mr. Low spoke in behalf of Real Caouette, Social Credit candidate in the September 16 federal by-election in Pontiac. The Pontiac vacancy was caused by the death of W. R. McDonald, Liberal.
Mr. Low said "the government of Canada is responsible for the shameful conditions we witnessed recently when so many government employees took the stand to admit loyalty to a government other than Canada."
He charged this was proof of the courtship of the communist party in 1945 and said ostensibly the party was outlawed in the early part of the war but later it was permitted, and as proof of government friendship a large number of civil servants of doubtful loyalty were hired in important posts.
I hope that this report is unfair to Mr. Low; I know it is unfair to the Prime Minister. I was closely enough associated with the Prime Minister before, during and after the 1945 campaign to enable me to state positively that there is no foundation for the allegation or insinuation that this report suggests.

[Stage Direction]
First report of the joint committee of both houses of parliament on printing,-Mr. Emmerson.

[Stage Direction]
Hon. IAN A. MACKENZIE (Minister of Veterans Affairs) moved:
That the name of Mr. Bentley be substituted for that of Mr. Moore on the standing committee on industrial relations.
Motion agreed to.


[Stage Direction]
Hon. J. A. GLEN (Minister of Mines and Resources) moved for leave to introduce bill No. 367, to amend the Immigration Act.
He said: Mr. Speaker, it is necessary to make certain amendments to the Immigration Act to bring it into conformity with the Canadian Citizenship Act, as the present definition of "Canadian citizen" in the former does not agree in some respects with the term "Canadian citizen" as defined in the citizenship act.

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man selling his farm in Manitoba and going south, let us say, to live. At the present time he must get a permit. Not only must he go to the trouble of getting a permit but he must make a case satisfactory to the board I think some of the conditions suggested were illness on his own part, or family obligations, things which would make a sufficient human nature story for the board to be impressed by it and to grant him the permit. I suggest that is not necessary. I suggest that in a case of that kind there might very well be a small amount which a resident making a bona fide change might be entitled to take with him as of right. To me it is very important that there should be something here, some signal as it were of the desire to retrace our steps and to get back what freedom we may as quickly as is reasonable. Therefore I put this forward in the hope that this very small request-and I hope it is also a very human one-will receive support in various quarters of the house.
Mr. ABBOTT:: My hon. friend raised the same point in the committee where he moved an amendment; and I do not think I can do better, in replying to him, than to repeat the statement I made on that occasion in which I gave the reasons why, in my opinion, I could not agree to the amendment. It will be found at page 196 of the report of the committee:
The position of the government with respect to these proposals is this.
That is, the proposals which my hon. friend has just made.
It believes that the continuation of foreign exchange control is necessary for the reasons given by the Minister of Finance in his statement on the resolution preceding the introduction of the foreign exchange control bill. It also believes that the system of exchange control which is established should be effective to accomplish its objects. The question of the circumstances under which and the amount to which capital may be exported from Canada is a matter of policy which must necessarily be determined by the government in the light of the general exchange position as it exists from time to time. The policy presently being administered by the foreign exchange control board -and it wili be continued so far as possible

is a liberal one and the intention is to pursue as liberal a policy as the circumstances warrant. No one can predict what the foreign exchange position will be in the future, however, and if the present measure is to be effective in accomplishing its purposes the government must be free to change any of its foreign exchange control policies to meet changing situations as and when they occur. Accordingly the government cannot accept amendments to the foreign exchange control bill of the character proposed by Mr. Macdonnell, which would have the effect of limiting the government's ability to adapt its foreign exchange control policy in order to deal quickly and effectively with situations which may arise in the future.
For these reasons I must oppose the amendment.


Mr. MACDONNELL (Muskoka-Ontario):: May I make one further and brief observation. This fully underlines what I said this morning and there is no suggestion that I was not right. There is no suggestion that I was not right in saying that the amounts are trivial, as they are; there is no suggestion that this cannot be done without danger. There is merely the reiteration that there must be complete power, that power must not be lessened in the slightest particular anywhere. Let us be quite clear; that is what we are voting for.


Douglas Charles Abbott: If my hon. friend wishes
to have me answer that I will do so and do it briefly. I do not say that these are trivial or unimportant. I say that if you give to any individual in this country who wants to move to the United States the right to take $15,000 with him, then, if it should become necessary to impose travel restrictions, as we had to do two or three years ago, it would be impossible to do it fairly and effectively without amending the law, which might necessitate the calling of a special session of parliament for the purpose. I simply wish to deny the statement made by my hon. friend that, by inference, I am agreeing to his assertion that such a provision would be unimportant, or would not in any way affect or handicap the efficient administration of the control measure. That in my judgment is not the case.


James MacKerras Macdonnell: May I make just one more observation which I think is relevant. In the committee I said, although it is not in my amendment, that I wished to make it clear that I am in good faith when I say that I do not want this to create any danger. If the minister would take the amendment and alter it, giving further power, if necessary, for the board to vary the figure, I would be perfectly content to accept it. To me it is a kind of symbol that some day we are going to begin to restore rights to the people. That is all I want it there for, and at the present time there is r.o right to anybody.


The CHAIRMAN:: The hon. member for Muskoka-Ontario (Mr. Macdonnell) moves that clause 25 (1) (a) be amended by adding after the word "Canada" the following words: "provided that in the case of a bona fide change of residence a Canadian resident may without permit export an amount not exceeding $15,000". Those in favour of the amendment will say aye.
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which is saddled on the people. The whole thing amounts to another cost of doing business and making it more expensive for people to live in Canada than in other countries.


[Stage Direction]
Section agreed to.
On section 9-C. R. and Audit Act not applicable to account.
Mr. McMASTER:: I should like to ask the minister why the provisions of the Consolidated Revenue and Audit Act shall not apply?


Douglas Charles Abbott: That is the act which says that all receipts have to go into the consolidated revenue fund, so that in the case of a board of this kind the Consolidated Revenue and Audit Act is not applicable. But provision is made for an audit of the board's transactions by the auditor general.


[Stage Direction]
Section agreed to.
Sections 10 to 22 inclusive agreed to.
On section 23-Payments by residents to non-residents.
Mr. HAZEN:: This section states:
(1) No resident shall, except in accordance with a permit,
(a) pay, lend or otherwise dispose of Canadian currency to a non-resident.
A non-resident, under the interpretation clause of the act, means any person other than a resident. In view of that part of the section which I have read, and that definition, is not a business man in this country precluded from paying money or handing any money to a tourist who comes in here? As I read the section, that is one of its effects.


Douglas Charles Abbott: Theoretically my hon.
friend is right. That, of course, is covered by regulation. That is an obvious case in which there should be the general rule, and payments to tourists are excepted from that general provision.


William Alexander McMaster: Will it still be the law that you cannot deposit money in the bank to the credit of a non-resident without filling out that form?


Douglas Charles Abbott: That is correct. That is
equivalent to making a payment to a nonresident.


[Stage Direction]
Section agreed to.
On section 24-Designation of currencies by the board.
Mr. JACKMAN:: What are the designated currencies at the present time?


Douglas Charles Abbott: I am advised, to the sterling area, sterling or Canadian dollars; to any other points, United States dollars.


Harry Rutherford Jackman: What would happen,
then, if a Canadian importer wants to deal, let us say, with Guatemala; or, to make the case a little more difficult, let us say, with Greece, what is to be the situation there, particularly if those currencies do not happen to be convertible into one of the so-called designated currencies? Is the Canadian trader to be prevented from dealing with a Greek because Greek drachma do not happen to be convertible into United States currency or sterling?


Douglas Charles Abbott: Yes: if he were selling to Greeks he would have to make his contract in United States dollars, or the drachma if that happened to be convertible into United States dollars.


[Stage Direction]
Section agreed to.
On section 25-Property.
James MacKerras Macdonnell: In my remarks this morning I said there were two things, among others, in which we had sought to have slight changes. One was the question of time and the other was the introduction of some slight relaxation of the general rigidity of this bill. Without making any extended remarks, I just want to recall to the committee that I told them this morning that we suggested, in the case of a Canadian resident making a bona fide change of residence, a small amount should be allowed, to be fixed by the board. I have put it in an amendment, but I said I would be perfectly ready to have it left flexible. I wish to remind the committee, before I move this amendment, that the amounts involved are, I believe, comparatively trivial. I frankly confess that, in a sense, I am making this amendment as a kind of token or a beginning toward the lessening of the rigidity. Having said that, I will move an amendment to subsection 1, paragraph (a). It now reads:
(1) No person shall, except in accordance with a permit,
(a) export any property from Canada.
I move, seconded by the hon. member for Rosedale, the addition of these words:
provided that in the case of a bona fide change in residence by a Canadian resident he may without permit export an amount not exceeding $15,000.
I believe the practical significance of that is quite small. I gave an illustration this morning which I hope will come close to the minds of hon. members, the illustration of a

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that large sums should be used to purchase foreign exchange to support a rate which is not justified. I agree with my hon. friend on that point. But under a system of exchange control that must be left to the exercise of the judgment of the board.


Harry Rutherford Jackman: To speculate.


Douglas Charles Abbott: It is not speculation, but an exercise of judgment on the part of the authorities.


James MacKerras Macdonnell: Will the minister in his reading and studying of the Bretton Woods agreement consider this point, that nothing will contribute more to the success of that agreement than that the level of our currency should have a realistic relationship to the actual business conditions from day to day?


[Stage Direction]
Section agreed to.
On section 8-Earnings paid into C.R.F.
Harry Rutherford Jackman: This clause has to do with the earnings of the board, which now are to be paid into the consolidated revenue fund, I am thankful to say, and are not to be allowed to revolve within the ambit of the board itself. But this is supposed to be a control measure, and not a tax-raising device. Under the War Measures Act, which has allowed the existence of this creature for the last five years, it has not been a control board alone but a taxraising expedient. Let us look at the burden which this board has been to the Canadian public since its inception. From September 15, 1939, to December 31, 1940, it took out of the Canadian public $16,000,000.


Douglas Charles Abbott: That was put on the record a moment ago, I think by the hon. member for St. John-Albert.


Harry Rutherford Jackman: It will not hurt to reiterate it.


Douglas Charles Abbott: Perhaps they were different figures.


Harry Rutherford Jackman: I say that in that period $16,000,000 was taken out of the Canadian public, as a cost to business which is passed on in higher costs to the Canadian public. The profit on that was transferred to the reserve fund, which now is seriously dented by the mistakes leading to July 5 last. The board accumulated a surplus that year, 1940, of $8,900,000; and in the following years surpluses of $9,200,000 in 1941; $11,225,000 in 1942; $9,400,000 in 1943; $6,600,000 in 1944 and $3,841,000 in 1945. Yet this is supposed to be a control board and they are making all this money. No doubt they would point to it as a profit. But it is nothing more or less than
an additional burden on Canadian business which must be passed on to the Canadian citizen. Not only is that bad enough in itself, but it arises from the fact that formerly one per cent was charged on the buying and selling rate. When a merchant wanted to deal in United States exchange or sterling the rate was one-half of one per cent. The rate should have been reduced to that figure years ago; but the bureaucrats seek to justify their salaries which are not published to the members of this house or known to the people of Canada. You can believe me that they are very adequate salaries; the jobs have no insecurity about them, and when these officials retire they are given a pension which is very adequate. The men, who are no doubt able in their particular fields, the bank and the exchange board, are very well paid, and apparently so well paid that it is none of our business or that of the people whom we represent and who put up the money for them. Of course, if they can show a paper profit, if they want to call it that, it looks well; it is a good thing; they may say they are making money for us, but let us go back one step and realize that this money-every cent of it-is coming out of the Canadian taxpayer.


Douglas Charles Abbott: Supposing these same
transactions had been carried out by the commercial banks; does my hon. friend think the profit would have been less?


Harry Rutherford Jackman: As has been pointed out to-day, I think, on the floor, and certainly was brought out- by the committee, the star witness for the government said that on small transactions-by which, I suppose, is meant five to fifty dollars-the rate prevailing before the war under ordinary private banking practice was probably no smaller; but on the transactions which have to do with business, transactions the costs of which are passed on to the Canadian people, the rate was very much less. Instead of being half of one per cent, which again is fifty per cent of what the board charged a year ago, it used to be one-sixteenth or one-eighth, or at the most three-eighths.


Douglas Charles Abbott: Yes, but I think the banks took positions on the exchange.


Harry Rutherford Jackman: Never mind. I am speaking of the cost to the Canadian public. You could either buy or sell within a one-sixteenth or a one-eighth spread. Now it is half of one per cent, and the result is shown not only in the costs of running this board but the costs of paying the banks, and the very large profit-that is, the so-called profit-
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September 15,1939, we had in Canada holdings of United States dollars and gold amounting to $393 million. This amount fluctuated at the end of each year, and I should like to give the round figures for the different years. In 1940 it was $404 million; in 1941, $332 million. Then we reached a low point on December 31, 1941, when we were hard pressed for money with which to purchase war supplies in the United States, and the fund got down to S187 million. The next year it had increased to $318 million; then $649 million and $902 million. On December 31, 1945, it was $1,508,000,000 in United States currency and gold. Apparently the tendency in recent years has been for this fund to grow about 60 per cent a year. It does not take very much compounding at that rate for the fund to grow out of all sensible proportions, and possibly a limit should be put on it. But the least we can expect is a statement of policy from the minister as to what the action of the board is likely to be. When this question was under discussion in the banking and commerce committee as to how much the board should have of the taxpayers' money with which to speculate in gold and United States currency I asked' the expert witness whether it would make very much difference if $500,000,000 of this $1,500,000,000 were not held in the fund but held by Canadian individuals in the form of United States investments, and his answer was that it would not make a great deal of difference. The only difference that I could gather from his answer was that it is always nicer in a difficult time to have cash in the bank rather than assets in the form of securities which, while pretty readily convertible, are not just cash. There were days before central banking was instituted when one could not get cash and when securities were not of very much value; but those days have long since passed, particularly in view of the fact that we now have the Bank of Canada and its integration with the foreign exchange control board.
What would be the result if $500,000,000 of this $1,500,000,000 were held 'by private investors and not by the board? The difference would be that private investors in United States securities, if they were allowed to buy them, would be able to get a rate of 2i to 4 per cent, whereas the Bank of Canada does not earn any such figure as that, probably not even one per cent on its balances. If individuals in Canada were allowed to own these United States securities they would be under the control of the board in just the same way as all other United States securities in Canada can, if necessary, be taken over by the board. I admit that an order in council or some
fMr. Jackman.]
other authority would be necessary to do that at the moment. Under the proposed bill individuals holding these United States securities could be made to report the same, and if these securities were not physically in Canada the individuals could be made to bring them over to this country. So that if the board would allow individuals to own some of these securities and would supply them with funds to acquire them we would have an income in United States dollars in Canada from these securities, which the board claims is badly needed. But only the board is allowed to purchase these United States securities with funds under its jurisdiction. There again is another evidence of the cost of this type of regulation to the Canadian public. But what I am chiefly concerned about is some indication of policy on the part of the government or the board as to how much of the unappropriated revenues of this country is likely to be taken for the purpose, as I say, of allowing the board to speculate in gold and United States currency.


Douglas Charles Abbott: It is almost impossible to give an accurate estimate. It depends on circumstances as they exist from day to day. What is being done here is this. When an advance is made from consolidated revenue fund to the board it is in order that the board may purchase United States dollars or purchase gold. United States dollars are the dominating currency, and what the board is doing in effect when it gets an advance of $100,000,000, let us say, from consolidated revenue is to convert that into United States dollars. That was discussed before the banking and commerce committee. I gave substantially the same answer there, and it is the answer I must give to this committee.


James MacKerras Macdonnell: I appreciate the minister's difficulty, but I would ask this question which I think is not irrelevant. Reference has been made earlier to-day to the obligation we have under Bretton Woods. I am not going to go into that at length, although I do not agree with what was said. Under Bretton Woods we can, if necessary, depreciate our currency up to ten points merely by saying that we want to, or virtually so. I would think it undesirable that we should be in a position where we might just stubbornly stick to a certain parity that we started off with, with the idea that we must stick to it whether or no, and perhaps use large reserves in doing that. I wonder if the minister would say something as to that. There is a point there.


Douglas Charles Abbott: I appreciate the point, and speaking as an individual member of the government I do not suggest for one moment

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Douglas Charles Abbott: I shall certainly look into
it, although I do not know whether it is so or not. I would point out to my hon. friend something which he no doubt knows, that our exports are approaching a nearly alltime high and have been for some time. Without having the figures before me, I am not prepared to accept a general statement such as the hon. member for Victoria-Carle-ton has made, that millions of dollars worth of exports have been lost because of our exchange control policy. I have serious doubts as to whether that is an accurate statement.
Mr. MaeNICOL:	The minister knows
very well that it is impossible to base any estimate upon our present condition of trade. We are exporting mainly raw products which are not available in other countries. We are fortunate to be able to obtain that business, but when normal times return this may not be the case.


Douglas King Hazen: The hon. member for Vic-toria-Carleton has pointed out that many potato exporters in New Brunswick have lost money because of the change that was made without notice in the value of the Canadian dollar on July 5. It has been .brought to my attention that losses were also suffered by exporters in the maritime provinces, or at least in New Brunswick, who engaged in selling tinned fish. It seems to me that some provision should be made or some steps should be taken to protect these people and save them from loss. The report of the foreign exchange control board issued in March, 1946, shows on page 39 and following that for the years ending December 31 the board made the following profits:
1940		 $8,915,000
1941		 9,265,000
1942		 11,225,000
1943		 9,414,000
1944		 6,659,000
1945		 3,841,000
In view of those figures, it seems to me that the board might very well do something to compensate these people for the losses they have sustained by reason of the government taking this action without any notice.


Douglas Charles Abbott: Would my hon. friend suggest that the board should get the credit on the imports?


Douglas King Hazen: No, I do not suggest that at all; I do not suggest they should. Do you?


Douglas Charles Abbott: No, I do not, and I do not think they should pay the losses on the exports.


Harry Rutherford Jackman: As I recollect, there was some discussion in the committee that the board was to have the power to use for the purchase of gold and United States exchange any unappropriated moneys in the consolidated revenue fund.


Douglas Charles Abbott: That is covered by section 7.


Douglas King Hazen: This section deals with the special account in the name of the Minister of Finance, known as the exchange fund account, established by the Bank of Canada pursuant to the Exchange Fund Act. The total assets in that account at the end of December 31, 1945, were $1,435,130,213.63, which is a large sum of money. Could the minister tell us how much of that money was seized from people of this country at the international boundary line and not returned to them?


Douglas Charles Abbott: None of it.


Douglas King Hazen: Where did that money go that was seized?


Douglas Charles Abbott: Any fines or seizures of that kind go directly into the consolidated revenue fund under the appropriate statute.


[Stage Direction]
Section agreed to.
Section 6 agreed to.
On section 7-Advances out of C.R.F. to exchange fund account.
Harry Rutherford Jackman: While I do not intend to move an amendment by way of providing a ceiling, nevertheless I think the committee should be made fully aware of the power which is being given to the board through the Minister of Finance -under this section. Under this section the minister may make advances to the exchange fund account; that is, the fund with which the exchange control officers speculate, out of unappropriated moneys in the consolidated revenue fund on such terms and conditions as -the governor in council may prescribe. This board, through the minister and the governor in council, do not have to come to parliament if they want a $1,000 million. When we talk in figures like that we must realize that in my constituency there are taxpayers who pay a tax of twenty-two per cent after $750 if they are single, or after $1,500 if they are married1. They are not eager to see the government drop $150,000,000, as they did on July 5, or more. May I point out to the committee how this fund has grown and why we should have some indication from the minister in charge as to how large this frog is going to expand itself, so that we may have an idea of how much of an encroachment it will make into the taxpayers' funds. On
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Mr. HATFIELD:: Then I must object to the continuation of regulations under this measure which will force exporters in this country to go to the expense of making out these forms, and which will require the exporter to make out the B form, one which is prepared in seven copies. Before making out these forms they have to make application and obtain permission to export goods. All this is unnecessary.
We always made out export papers which were required by the customs branch, and in those papers we stated the amount and value of the goods. These provisions set up by the foreign exchange control board have the effect of compelling exporters to add to their office staff. I am only a small exporter, but I have had to add four or five people to my staff to make out these forms. If one is going to export a cargo of goods from this country, and if he has about fifty consignees, days are required to make out these papers.
It is just a waste of paper and a nuisance to the exporter. We are an exporting nation, but we in the maritime provinces have lost sales of goods through the cancellation in July. The maritime provinces have lost sales amounting to millions of dollars. This is true particularly of the growers of certified seed potatoes, who were not as fortunate as the pulp and paper people. The market for seed potatoes in the United States and South America was limited, and we had to meet competition. The result has been that we have lost about half our market for certified seed potatoes in the United States, South America and South Africa because of the cancellation of the premium on United States funds, it has meant a loss of millions of dollars to the maritime provinces.


Mr. GRAYDON:: Arising out of what was said by the hon. member for Victoria-Carleton, the minister made reference to forward contracts as distinguished from other types of contracts.


Douglas Charles Abbott: Forward contracts for the purchase of exchange.


Gordon Graydon: I understand. Would it be correct or incorrect to suggest that the exporters who would have forward contracts would be the larger ones, while those without would be the little men?


Douglas Charles Abbott: Not necessarily. My hon. friend will recall that in the days before the foreign exchange control board any exporter could hedge his sales in foreign exchange by making a forward purchase of foreign exchange.

Then, I do not know what the hon. member means by "the larger ones". I used to have a client who was a substantial tea importer and exporter, and who dealt extensively in foreign exchange. He always covered his commitments by purchases with his bank. Similar facilities are available to the trade to-day, under the conditions I outlined earlier, namely, that there must be definite commitments to pay a definite sum within a definite time. I do not think it would be fair to say that these arrangements are available only to the large exporters.


Gordon Graydon: I am not suggesting that, and I would not think that would be the case. But as it would work out in a practical way, I should think, as an onlooker of the argument, that the little fellow would be the one who would not have the money with which to purchase blocks of exchange that the big man would, and for that reason the little man in this case would be the greater sufferer instead of the larger exporter who would be in the business. I think the minister, on contemplation and reflection, will perhaps find that that assumption is correct.


Douglas Charles Abbott: I am told that the cost
of the protection referred to is only one-sixteenth of one per cent a month, which I would not think would be such as to preclude any reasonably solvent merchant from availing himself of this form of insurance.


Heber Harold Hatfield: Any exporter could not take out a contract for more than three months. If I entered into a contract in May with a person in the United States for so many potatoes to be shipped this fall, I could get protection only up to three months. I could not enter into a contract for five months when the goods are going to be shipped, but other exporters can. The agents of the foreign exchange control board and the bankers have lists of preferred exporters. I tried to make a contract and I know.


Mr. MacNICOL:: In former years I had a good deal to do with exporting. What the hon. member for Victoria-Carleton has said seems to me to be a serious statement. He has made the statement that the situation he is up against affects not only his business but has resulted in the loss of many millions of dollars of orders from South America. If that is so, that is an extremely serious situation. Anyone who knows anything about business knows that export trade is of great value to a country. If what the hon. member has said is so, I would think the minister or his department should rectify it.

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with us, and appear to be unwilling to depart. Knowing many hon. gentlemen opposite as I do; having known some of them for many years, I know that legislation of the type under discussion is as disagreeable to them as it is to many who sit on this side. I cannot imagine that champions of freedom and liberty such as the hon. member for Vancouver Centre, who hails from the highlands and who sits in the front bench opposite, and my good friend, also from the townships, who is Minister of Finance for the moment, really rejoice in legislation of this nature; but I feel that they have been ensnared by a system of controls to which we resorted during the war, and that they have become so dependent upon this bureaucratic system that they cannot shake themselves free from it.
The United States, our nearest neighbour, a country with which our relations are intimate, a country whose development is somewhat ahead of ours, but a country whose activities have always had a profound influence upon our destinies, has shaken itself free from those controls with which it found it necessary to shackle itself during the period of the war. It has never saddled itself with the type of institution set up by the present bill. We are creating a difficult position for ourselves if we attempt to manage our currency and our whole economic system, and thus give rein to an intensive nationalism which will prevent ordinary intercourse between friendly nations. It was pointed out here this afternoon that if a farmer living on the border wishes to sell his farm and move across into the United States, in effect he cannot do so because he cannot take with him the amount necessary to buy a farm there.


Mr. IRVINE:: Is that quite true? Might he not be permitted by the board to do so?


Mr. HACKETT:: In special circumstances and with the permission of the board he might be permitted to go to the United States. This is an important matter for many people, particularly for those living along the international border. Those who are aware of the ease and facility with which people moved across the international boundary in the past, have found most galling the regulations enacted by the foreign exchange control board, which are perpetuated by this measure. Ultimately, misunderstanding and possibly bad blood will result from the enforcement of these regulations.
There is a growing tendency to dominate and to control the individual. I am not at the present time going to deal with the sections in the measure which are so extremely harsh in respect of the control of human 63260-280
conduct. My objection to the bill is that it takes away from individuals and institutions prerogatives and rights which belong to them, and places upon the government added burdens which it is not alble to carry. If we benefit from the lessons of history, we are bound to know that such controls breed tyranny and revolution and must result in sorrow for the Canadian people and the loss of that freedom which has characterized our growth and development to this time.


Heber Harold Hatfield: I want to know if protection to be given to exporters who, prior to a few weeks or days preceding July 5, had exported goods and had a contract with the foreign exchange control board under its B form to bring the currency back to Canada, and sell it to the board. Those exporters of goods sold with the expectation of receiving ten per cent on their money, and in some cases that ten per cent was more than the profit on the goods. In all fairness the government should have protected them. It is protecting a few privileged exporters, to the extent of $13 million of the country's money. Surely it should have protected exporters who sold goods on a distinct understanding, and who made a contract with the foreign exchange control board prior to July 5 to bring that money back. They carried out their conditions under the contract, but the foreign exchange control board failed to carry out its part of the contract.
Mr. ABBOTT': If they had a forward contract, which was open to everyone, they would be protected. But if they had simply filled out the B form, which is a notice that they intended to export and were going to receive payment in United States funds, they were taking the exchange risk themselves.


Heber Harold Hatfield: Many of these exporters were not privileged to have a form of contract. The only exporters who were thus privileged were the exporters who had longterm contracts. It required about a month or two months to get a permit from the board to take out a forward contract. The procedure had to be taken up with one's banker. Certain exporters, such as those who export pulp and paper products, and some other privileged exporters, were the only ones who could take out forward contracts. The others could take it out for three months.


William Ross Macdonald: Does the section carry?


Heber Harold Hatfield: No; I should like to have an answer.


Douglas Charles Abbott: I have given the hon. member all the information I have on the subject.