1946-04-11

[Stage Direction]
Right Hon. L. S. ST. LAURENT (Minister of Justice): Mr. Speaker, may I inform the house that by proclamation issued on April 5 and published in an extra of the official gazette of that date certain portions of the Penitentiary Act which were to come into force by proclamation, have been brought into force. These are subsection 6 of section 4; section 4A and part of subsection 2 of section 13, which relate to commissioners. Immediately thereafter order in council P.C. 1313 was passed appointing Major-General Ralph B. Gibson, of the city of Toronto, former vice

chief of staff of the Canadian army, a commissioner under the act. I now table a copy of the order in council.
Mr. COLD  WELL@: Has Major-General Gibson had any special training or experience in nenolovv?
Mr. ST. LAURENT: No particular training in penology, but considerable experience in administration and the handling of men. After careful consideration we came to the conclusion that he had the qualifications which would fit him for this particular commission.



CRIMINAL CODE


[Stage Direction]
Mr. T. L. CHURCH (Broadview) moved for leave to introduce bill No. 27 to amend the criminal code (motor cars).
Some hon. MEMBERS:: Explain.


Mr. CHURCH:: The object of the bill is to call the attention of the people of Canada to the number of fatal accidents which are occurring in increasing numbers in this country. A return to an order of the house of April 3 shows that there were 149,000 accidents, and nearly 10,000 people were killed during the period covered by the return. This rate of motor car accidents on the highways is becoming a public scandal. The sections of the bill are modern and constructive in character and I hope the Minister of Justice

Criminal Code
(Mr. St. Laurent) will consider them when he is bringing in amendments to the criminal code. I shall not read the sections, but will refer only to the marginal notes.
The first section deals with the requirement that the driver of a car shall stop after an accident. Some children were killed in the riding of the hon. member for Danforth (Mr. Harris) down near the beach by a cowardly hit-and-run driver. These hit-and-run drivers are a menace all over the country. The bill provides for imprisonment for a term not less than six months without the option of a fine.
Section 2 deals with driving while under the influence of alcohol or a narcotic. The object of this section is to add the words ''under the influence of alcohol" to the section as it now stands. The next section deals also with hit-and-run drivers and provides for an increase in the penalties now imposed.
Section 5 brings the hiGand-run driver under subsection 7, and provides that an order may be made prohibiting the convicted person from driving a motor vehicle for any period not exceeding three years. The next clause deals with the causing of a death in a culpably negligent manner. This incorporates the law now in force in New York state. The amendment penalizes the driver where death results, if the driver is breaking bylaws-against speeding for instance-and where he may be thirty per cent the cause of the accident.
The next section deals with the trial of a female person. It seems only fair that in the trial of any female person by a jury a certain proportion of the jurors should be female persons. They voted 52 per cent in the elections as against a male total vote of only 48 per cent.
The marginal note for the next section reads:
Charge of manslaughter arising out of operation of motor vehicle, criminal or culpable negligence proved.
The purpose of the amendment is to define the powers of the jury in cases of manslaughter arising out of the operation of motor vehicles.
The final section defines the powers and functions of the judge and the jury by the judge. There have been instances in which cases have been taken away from the jury. Questions of law should be matters for the judge to decide, and questions of fact should be decided by the jury. The jury should decide on the evidence whether a person is guilty or not guilty.
I hope the Minister of Justice will consider these amendments to the criminal code.
Motion agreed to and bill read the first time.



QUESTIONS

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

Mr. PEARKES:: 1.	How many landing craft were issued to the Combined Operations School, Courtenay, British Columbia, during -the years 1942-46?
2.	Wbat was the average cost of these craft?
3.	How many of these are still retained by the army?
4.	How many have been declared surplus to requirements and turned over to War Assets Corporation?
5.	What disposal has been made of the balance, if any?


Mr. LAPOINTE:: 1.	42.	.
2.	$9,843.11.
3.	30.
4.	8.
5.	Condemned and written off (hulls only) 4.


EXPORTS OF WHEAT
Mr. McCUAIG:: 1.	How many bushels of wheat did Canada export during 1945, basis No. 1 Northern, Fort William and Vancouver?
2.	To what countries was such wheat exported ?
3.	Was any such exported wheat sold at over $1.55 per bushel?
4.	If so (a) to what countries; (b) in what quantities; (c) at what prices?


Mr. MacKINNON:: 1.	329,672,842 bushels.
2.	Country	Amount
bushels
United Kingdom	 113,313,762
Eire	 7,610,632
British South Africa	 2,562,641
British India	 20,356,843
Ceylon	 812,503
Barbados	 28,250
Jamaica	 27,426
Trinidad	 1,050
B.W.I. others	 508
Gibraltar	 207,600
Malta	 2,284,405
Newfoundland	 3,046
New Zealand	 5,124,641
Palestine	  353,334
Belgium	 10,679,208
^China	 804,753
Colombia	 449.662
Costa Rica	 83,330
Cuba	 69,039
Czechoslovakia	 207,644
Greenland	 133
Egypt	 9,543.187
Questions

Amount
bushels
France	 9,099,934
Fr. Africa	,	 6,541,456
St. Pierre	 292
Germany	 644,974
Greece	 11,181,995
Honduras	 19,998
Iceland	 16,449
Iraq	 1,461,775
Italy	 2,112,071
Mexico	 88,930
Morocco	 5,724,690
Netherlands	 15,484,784
Norway	 1,467,916
Peru	 1,392,098
Portugal	 448,000
Port Africa	 321,198
Russia	 5,654,281
Salvador	 82,590
Syria	 289,000
Yugoslavia	 858,532
United States	 92,258,282
Total
329,672,842
3	and 4. The highest export price of Canadian wheat during the crop year 1945-46 to date, has been $1.55 per bushel, basis in store Fort William/Port Arthur or Vancouver. This applies to sales made to all countries. Prices for all other grades are lower than this except for Alberta red winters, on which there has been a premium of 10 cents per bushel for No. 1 A.R.W. in comparison' with No. 1 northern.


WAR ASSETS-MOTOR VEHICLES
Mr. WEBB:: 1.	How many (a) jeeps; (b) station wagons; (c) automobiles; (d) trucks, are held for sale by the War Assets Corporation?
2.	Are priorities required to purchase these vehicles?
3.	If sp, to whom are they issued?
4.	If not, what is the proper procedure to buy
one?	[DOT]
5.	What are the names of individuals or municipalities in the county of Leeds who have purchased vehicles or materials of any kind from War Assets Corporation?
6.	Is there a local office of War Assets Corporation in Leeds county?
7.	If so, where is it located?


Mr. McILRAITH:: Question No. 25, standing in the name of the hon. member for Brant (Mr. Charlton), asks for very similar information. I would draw the attention of the house to the fact that on Monday, April 1, a question was asked by the hon. member for Lincoln (Mr. Lockhart) and passed as an order for return. That question asked for

detailed information about automobiles, trucks and so on, in the possession of War Assets Corporation and held for disposal. The order for return already passed seems to cover the information asked for by paragraph No. 1 of this question and by the later question in the name of the hon. member for Brant (Mr. Charlton). I would ask that paragraph 1 of this question be dropped, that the remainder of the question be allowed to stand, and that question No. 25 be dropped.


Mr. SPEAKER:: Answered.
(On the question of Mr. Charlton, immediately following-.)


Mr. STIRLING :: May I draw attention to the fact that Your Honour called "answered" to the rest of the question of the hon. member for Leeds (Mr. Webb). I think the rest of that question should stand. This is the matter referred to by the parliamentary assistant to the Minister of Reconstruction on the question of the hon. member for Brant.


James Horace King: Stand.


Mr. CHARLTON:: 1.	How many (1) passenger motor cars; (2) station wagons; (3) sedan delivery trucks, owned by the Department of National Defence (a) army; (b) navy; (c) air force; (i) have been declared surplus; (ii) are held for disposal by War Assets Corporation: (iii) have been disposed of by War Assets Corporation?
2.	To whom were such vehicles sold and at what price?
3.	Were any sold to government departments?
4.	If so, to what departments and how many to each?


George James McIlraith: Dropped.


Mr. DIEFENBAKER:: There is certain information asked for in this question that was not answered, nor did it come within the ambit of the order foV return referred to by the, parliamentary assistant. The portion that is not covered by the order for return is that which has to do with the number of the various types of vehicles owned by the Department of National Defence, army, navy and air force, that have been declared surplus.


George James McIlraith: I might elaborate on my previous remarks. When the hon. member has had an opportunity of looking at the order for return, which I expect will be filed in a day or two, together with the evidence given before the war expenditures committee, to be found at pages 45 and 68 of the proceedings, if he still feels that there is further information which has not been provided, the matter can then be brought forward again.
Question stands.

Questions


DEPARTMENT OP VETERANS AFFAIRS-MR. FINDLATER
Mr. JOHNSTON:: 1.	Has a Mr. Findlater been appointed to a position under the Department of Veterans Affairs? If so, when and to what position?
2.	Who recommended this appointment?
3.	What salary does he receive?
4.	What moneys did he receive for expenses since his appointment?
5.	What qualifications does he possess for this
position?	.	.
6.	Has he made any personal inspections of the veterans" houses constructed or under construction in the city of Calgary?
7.	If so. how many and on what dates.
8-. Did he make any recommendations to the Department of Veterans Affairs regarding these houses?	.
9.	If so, what were such recommendations'
10.	Were these recomendations put into force?
If so, when?	.


Mr. TUCKER:: 1.	Mr. A. Findlater, regional supervisor at Calgary was appointed to a position of field supervisor, 26th November, 1925.
2.	District superintendent of soldier settlement, Calgary.
3.	$2880 plus war duties supplement of $240 per annum.
4.	Information not readily available as period of employment excedes 20 years. Actual expenses paid under travelling regulations.
5.	Mr. Findlater was a" successful soldier settler at time of appointment, and had 1414 years' farming experience in Alberta. His satisfactory service as field supervisor, and later as chief field supervisor, led to his appointment as regional supervisor, at Calgary, under the Veterans' Land Act.
6 and 7. It is not the responsibility of the regional supervisor to carry out building inspections. For this work two qualified building inspectors are employed and are on the job continuously. One of these inspectors had 18 years experience as carpenter and carpenter foreman, and the other 25 years experience in the same line of work of which he was in business for himself for 20 years. The building inspectors report to the district construction supervisor, Edmonton.
8, 9 and 10. The condition of flooring and millwork was reported to the district construction supervisor, who, with the contractor, made a careful inspection of all houses under construction. The scarcity of lumber, particularly for wood finishes, was so great that it was necessary to decide if the work should stop, or be proceeded with, using the best materials available. In view of the housing emergency facing veterans the latter course was followed. Contractor has had instructions since last January to replace any faulty material as satisfactory material becomes available.


DEPENDENTS OF SERVICE PERSONNEL ABOVE WARRANT OFFICER CLASS 1
Mr. BENTLEY:: 1.	Has the dependents' board of trustees provided supplementary grants or special assistance to any dependents of armed services persons holding a rank above that of warrant officer class 1?
2.	If so, to whom?


Mr. LAPOINTE:: 1.	No.
2.	Answered by No. 1.


STEEL PLATE AND BAR STEEL
[Stage Direction]
Mr. ISNOR,:
1.	Is steel plate or bar steel being exported from Canada to the United Kingdom?
2.	Has there been a recent curtailment of steel plate to shipbuilders located in Nova Scotia ?
Mr. McILRAITH:: 1.	No.
2.	Yes. This, however, is not confined to the province of Nova Scotia. Because Canadian shipyards have accepted orders for shipbuilding in excess of capacity of Canadian mills and the recent steel strike in the United States has made it impossible to import sufficient additional quantities from that country, it has been necessary to allocate on an equitable basis the available Canadian supply which has resulted in curtailed shipments to some yards.


ESTON, SASK., POST OFFICE
Mr. JAENICKE:: What has been the revenue of the post office in Eston, Saskatchewan in each of the years, 1938, 1939, 1940, 1941, 1942, 1943, 1944, 1945?


Mr. MacKINNON:: Year	Revenue
1938	
$4,087	421939	
4,511	661940	
5,113	251941	
5,555	091942	
6,148	831943	
6,558	231944	
7,816	161945	
8,166	30


ESTABLISHMENT OF EMBASSY AT THE VATICAN
[Stage Direction]
Mr. LaCROIX:
Has the government received any requests for the establishment of an embassy at the Vatican?
Mr. MACKENZIE KING:: Representations as to the desirability of establishing such a diplomatic mission have been made from time to time by individuals but not officially.
75S
Questions


DOMINION BORROWINGS
Mr. QUELOH:: 1. What was the total amount of money borrowed by the dominion government in eaeli of the years from 1939 to 1945 inclusive from (a) the chartered banks; (b) the Bank of Canada; (c) the public?
. "- How much of the money borrowed from the public represented savings and how much bank credit?
3.	How much money was repaid by the dominion government in each of the years from 1935 to 1945 inclusive in classes (a) (b) and

4.	What was the gross national debt as at March 31, 1946?
5.	How much of this debt is owed to (a) individuals; (b) corporations (other than banks) ; (c) the chartered banks; (d) Bank of Canada?
6.	How much of this debt is payable in (a) Canadian funds; (b) funds of other nations, giving names and amounts thereof?


Mr. MAYHEW:: 1.	Details of Dominion of Canada loan flotations for the fiscal years ended March 31, 1939 to March 31, 1945, inclusive, will be found on pages 'LIV to LVII of the introduction to the public accounts for the fiscal year ended March 31, 1945.
2.	The wording of this question is not clear. If the question means how much was borrowed from the chartered banks to finance the purchase of Victory loan bonds, the answer is that approximately all of such loans made in the period 1939-45 have been liquidated.
3.	Details of Dominion of Canada domestic bond redemptions for. the fiscal years ended March 31, 1939 to March 31, 1945, inclusive, will be found on pages LVIII and LIX of the introduction to the public accounts for the fiscal year ended March 31, 1945. No information is available as to the distribution of holdings of maturing issues.
4.	The figures for total liabilities of Canada as at March 31, 1946, are not yet available. At March 31, 1945, total liabilities were $15,712,181,527.26.
5.	(a) No information.
(b)	No information.
(c)	No information. The monthly return of liabilities and assets of the chartered banks of Canada shows dominion direct and guaranteed securities held by each bank. The amount of such securities held on March 31, 1945, was $2,916,559,650.
5. (d) No information. The monthly return of liabilities and assets of the Bank of Canada shows dominion and provincial direct and guaranteed securities held by the Bank of Canada. The amount of such securities held on March 31, 1945, was $1,535,247,139.65.

6.	Of the total liabilities of Canada, $13,983,763,574.91 is in the form of unmatured funded debt. On March 31, 1945, the unmatured funded debt was payable as follows:
In Canadian dollars .. $13,638,698,042 05
In pounds sterling 

 12,065,532 86
In United States dollars 333,000,000 00



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. WYLIE:: 1.	What are the names of field inspectors and supervisors who operated in the province of Alberta under the Prairie Farm Assistance Act in the year 1945?
2.	How long was each of them employed in the said year?
3.	What salary did each receive during the said year?
4.	What amount of travelling expenses was paid to each during the year 1945?



MOTOR VEHICLES


Mr. CHARLTON:: 1.	How many 1946 model passenger cars have been purchased by the government?
2.	By what departments have such purchases been made ?
3.	What (a) number; (b) make and/or model were purchased by each department?



PUBLIC SERVICE-TOTAL NUMBER OF FEDERAL EMPLOYEES, REMUNERATION AND ALLOWANCES

Mr. ROSS (St. Paul's):: 1.	What is the total number of employees of the government of Canada, including employees of boards and commissions, appointed by federal authority as of March 31,, 1946?
2.	What is the total amount of salaries, wages and allowances paid to such employees in March, 1946?



PRIVILEGE


[Stage Direction]
On the orders of the day.
Mr. JEAN-FRANCOIS POULIOT (Temis-couata): Mr. Speaker, on March 30 last a Toronto Weekly, Saturday Night, complained about the member for Temiscouata having called some professors seditious. The editors of that paper, who belong to the petrified brain-trust of desiccated bachelors and spinsters that form the Civil Liberties League of Toronto, have complained that I was guilty of contempt of court for recalling certain events of ten or twelve years ago in what I then said in the house. Ten or twelve years

Income Tax
ago is quite a distance in the past, and I have had to check my notes. I find that King Gordon was on the F.B.I. list of J. Edgar Hoover when Mr. Bennett was prime minister, and here the paper says-
Some hon. MEMBERS:: Order.


James Horace King: Order. I would ask the hon. gentleman to be as brief as possible in raising his question of privilege.


Mr. POULIOT:: Mr. Speaker, it is a question of privilege. That sheet has said in the first place that I was guilty of contempt of court, which is an offence, for having made the statement in the House of Commons; and it said further that I would be afraid to repeat it outside of the house where I had not the protection enjoyed by a member of parliament when speaking in the house. I shall speak outside of the house on April 13 in eastern Ontario. I shall be ready to repeat then what I have said, if they are not satisfied, and I will prove it too.



INQUIRY AS TO EXTENSION OF PRICE INCREASE TO DAIRY BUTTER

[Stage Direction]
On the orders of the day:
Mr. MARK C. SENN (Haldimand): I would ask either the Minister of Agriculture or the Minister of Finance whether the wartime prices and trade board is giving consideration to an extension to daily butter of the four cents per pound increase in the price ceiling on creamery butter, and if so when we may expect a decision.
Right Hon. J. L. ILSLEY (Minister of Finance):: Mr. Speaker, consideration is being given to such an extension. I do not know when a decision will be arrived at, but I expect soon. .



INCOME TAX


[Stage Direction]
On the orders of the day:
Mr. CLARENCE GILLIS (Cape Breton South):: Mr. Speaker, may I direct a question to the Minister of National Revenue, arising out of numerous inquiries that I am receiving from persons at present unemployed who still have a substantial portion of their 1945 income tax to meet at the end of April. Will the government consider applying the savings portion of their tax to liquidate what is owing at the end of April on the 1945 income tax?


Hon. J. J. McCANN (Minister of National Revenue):: Mr. Speaker, I thank the hon.
member for having given me notice of his question. The matter has been given the serious consideration of the government. It is not the policy of the government to allow application of the savings portion of the income tax to liquidate the balance of the 1945 payments. This is done on the ground that it would be discriminating in favour of one class of people.


Clarence Gillis: The unemployed without an income can surely not be expected to meet their payments at the end of April. That would not be discrimination; I think it would be in the best interests of the government.



REPEATER CRIMINALS


[Stage Direction]
On the orders of the day:
Mr. GORDON GRAYDON (Peel):: Mr. Speaker, I have a question for the Minister of Justice. At the fortieth annual conference of the Chief Constables' Association of Canada, it was resolved:
That, in the opinion of the conference, there is a definite need for a policy to be formulated by the government of Canada in respect to the serious problem of the repeater criminal, whose activities are so largely responsible for crime in the dominion.
I understand that this resolution was presented to the Minister of Justice by a delegation of this association on November 7, 1945. Will the Minister of Justice kindly indicate to the house if the government is giving consideration to this resolution and, if so, what steps are being taken in the matter?
Right Hon. L. S. ST. LAURENT (Minister of Justice): My understanding of the resolution was that it contained no suggestion; it wanted a result to be achieved. The matter is one which it is my intention to ask the new commissioner of penitentiaries to investigate and report upon.



CANADIAN NAVY


Mr. M. J. COLDWELL (Rosetown-Big-gar):: May I ask the Minister of National
Defence if the answer he gave to me yesterday, Hansard, page 730, while it may have been technically correct, is actually in accordance with the facts, and if any intimation was given Mr. Lee that his racial origin would prevent his application from receiving consideration?
Canadian Navy


Hoh. DOUGLAS ABBOTT (Minister of National Defence):: Mr. Speaker, I shall be very glad to elaborate on the answer I gave yesterday; perhaps it was too brief. I can best do so by reading a copy of a letter which I addressed to Mr. Lee:
Ottawa, April 10, 1946.
Frank B. Lee, Esq., c/o Queen's University,
Kingston, Ontario
Dear Mr. Lee:
Your letter dated March 27, addressed to the Prime Minister, has been sent to me for reply.
The regulations concerning entry into the Royal Canadian Navy permit the entry of any British subject provided he fulfils the requirements prescribed from time to time as to age, education, physical fitness, character and technical knowledge for entry into the branch or component selected. All such applications must be made to Naval Service Headquarters at Ottawa and passed on here. In connection with the examination of applications, a selection board has been created, of which Captain J. M. Grant is the president.
I have made inquiries concerning the matters dealt with in your letter of March 27 and am informed that on that date the selection board interviewed candidates from Queen's University at H.M.C.S. Cataraqui. I understand that you had made no previous application for an interview- by the board and did not appear for such an interview until the board was preparing to leave H.M.C.S. Cataraqui to catch a Toronto train and that you then approached Captain Grant as the latter was actually leaving the establishment to enter a motor car and asked him if there was any possibility of your application for entry into the electrical branch being considered.
It appeared to Captain Grant that you w-ere somewhat older than the average candidate, and he reports that he advised you that it was doubtful whether your application w-ould be considered and that in any ease there was then no time for an interview. You then asked if your racial origin would be a cause for rejection and Captain Grant informs me he replied that it might be but that, jn any event, final approval or rejection of a candidate is made by Naval Service Headquarters.
It is perhaps unnecessary for me to say that in voicing the view that your racial origin might be a cause for rejection Captain Grant was merely expressing his own personal opinion and in no way reflecting the policy of the Department. He was quite correct in stating that applications must be made to Naval Service Headquarters and that the final approval or rejection of any candidate must be made here.
If you desire to make application to the Naval Secretary, Naval Service Headquarters, Ottawa, for entry into the Royal Canadian Navy, I wish personally to assure you that your application will receive every consideration.
Yours very truly,
(Signed) D. C. Abbott.



TRAIN TRAVEL


[Stage Direction]
On the orders of the day:
Mr. L. O. BREITHAUPT (Waterloo North):: Mr. Speaker, may I ask the Minister of Transport what restrictions on train travel and sleeping car service have recently been lifted on Canadian railroads, and when further improvements will be made in this respect?


Hon. LIONEL CHEVRIER (Minister of Transport):: I have not yet been able to obtain a report from the transport controller on this matter, and I have to draw upon my memory. So far as I remember there are but three orders left under the jurisdiction of the transport controller, and none of them has to do with restrictions on train travel and sleeping car service. Some time ago I announced that restrictions on reduced rates for week-end travel for parties of ten or more, and covering dominion and provincial public holidays, would be lifted, and that has been' done, effective as of March 15.



WAR CRIMES


[Stage Direction]
On the orders of the day:
Mr. E. D. FULTON (Kamloops):: I have a question to address to the Prime Minister in his capacity as Secretary of State for External Affairs. Will he tell the house whether a Canadian representative has' been appointed for the trials of Japanese war criminals at Hong Kong -which are now proceeding, and can he say when that representative will be dispatched?


William Lyon Mackenzie King: My hon. friend did not give me notice of his question. I will take this as notice, and have it replied to to-morrow.



GASOLINE


[Stage Direction]
On the orders of the day:
Mr. ROBERT FAIR (Battle River):: I have a question to ask the Minister of Finance. For the purpose of encouraging increased production of much-needed food supplies, has the government taken action to remove the three cent war tax on gasoline, and the recently-imposed two cent tax on motor fuels?

Business of the House


James Lorimer Ilsley: Mr. Speaker, the answer is in the negative, as my hon. friend knows.


Robert Fair: Then my subsequent question is, why is this action not taken?


James Lorimer Ilsley: That question is out of order.



BUSINESS OF THE HOUSE


William Lyon Mackenzie King: As announced last night, the first order for to-day is the consideration of the resolution respecting the loan to the United Kingdom. Before the item is called I feel that I should like to say a few words to hon. members about the procedure in debate on a resolution preceding a money bill. My reason for doing so is that the house having departed from its rules on some occasions during the last few years, the debates have been much longer than they otherwise would have been, and the public business has been delayed as a result. What I wish to say is that the rule is that a resolution must precede a money bill, but the resolution is intended merely as a notice to the house that a money bill is about to be introduced. It is not intended that the notice should be debatable; rather, the correct practice is that the resolution should be allowed to pass, the house go into committee and that, in committee, a statement be made on essential features of the bill which is later to be introduced, this to be followed if so desired by some brief discussion. It is not intended that a lengthy discussion should take place at that stage. The discussion on the bill should come after the bill itself is introduced.
I have spoken of this in previous sessions; if I recall aright, in 1943, when I think the hon. member for Peel (Mr. Graydon) who was then leading the opposition, agreed with me, at least in part, that it was desirable that discussion at the resolution stage should not be prolonged unduly: In 1944 I again drew the attention of the house to the position of a resolution preceding the introduction of a money bill. I again pointed out what I have said a moment or two ago. In that year, if I am not mistaken, the leader of the C.C.F. party expressed agreement with that view. Last year I was absent from the country at the time the resolution on the appropriation bill was before the house and I did not, therefore, speak of this particular aspect at the time, but I did notice that, by not following the rules, a very long debate took place in committee on the resolution. In fact, this is
what also occurred on the war appropriations bills in the other years I have referred to, with the result that, after weeks of discussion in committee on the resolution, the bill was introduced, and then the bill itself-I have forgotten whether this was the case last year or not, but I know it was the case in some years-went through with practically no discussion at all, but with some comment in the press thereafter that it seemed unwise for the house to be voting millions of dollars with little or no discussion on the second reading of the bill.
One of two things is certain to follow if we do not observe the rule; either the discussion which takes place on the resolution, and which may run along for days, may be repeated at great length in the debate on the bill, or, as I have just indicated, there will be a lengthy discussion on the resolution and then the house will take the view that, as the matter has already been discussed at length the bill itself should be allowed to go through with little or no discussion and, as a consequence thereof with some misunderstanding thereafter on the part of the public.
This morning, in order that I might give the house an official w-ord, I took up this matter with the Clerk. I have from him" a statement which I shall read as authoritative in the matter. It is as follows:
The motion for referring money resolutions to the committee of the whole is similar to the first reading of a bill which is not debatable under our standing order 71. The object of the resolution recommended by the crown is to give the house a first opportunity to decide if there is a prima facie case for introduction of a bill. The details of the projected measure are not then disclosed and the resolution is necessarily short although care is always taken that the terms used are sufficiently wide to cover the whole of the bill which will be subsequently introduced.
This house confirmed on June 1, 1936. the Speaker's decision to the effect that the fundamental terms of the resolution submitted to the house with the governor general's recommendation cannot be amended. In the United Kingdom parliament, where the standing order governing the case is the same as ours, no motion is made for the Speaker to leave the Chair when the order is called. May says, page 506:
"If a resolution appears on the notice paper to be considered in committee of the whole house under this standing order, and a minister of the crown signifies the royal recommendation, the Speaker leaves the Chair forthwith and the house resloves itself into committee."
As hon. members know, the Clerk has been a long time in the house and has followed its proceedings closely. Moreover he is an authority on the rules. He adds this paragraph:
Loan to United Kingdom,

When Sir Wilfrid Laurier and Sir Robert Borden led political parties in this house either on the treasury benches or in opposition they always took a firm stand against the discussion of a money resolution when the Speaker was in the chair. Their contention was that the motion was formal, and was only made because there was no other way for the house to go into committee of the whole.
As hon. members are aware, a committee of the house is considering the rules, and considering them with a view to making the proceedings somewhat less lengthy than they have been at times. I should think the best way to further the object we had in appointing that committee is to abide by such rules as we have already, and make such further amendments to them as may be necessary.
I am only explaining the situation to the house: I am sure what I have suggested is the correct practice, arid that, if followed, it will preserve all that the house may wish to preserve of the rights of members and will help materially to expedite its business.
Mr. JEAN-FRANQOIS POULIOT (Temis-couata): Mr. Speaker, on a point of order: there are two things to consider. There is the motion that you put for the house to resolve itself into committee of the whole, and there is the discussion of the resolution in the committee. If we do not discuss the motion when the chair puts it to the house, there is nothing in our rules which prevents a member from discussing the matter when the chairman of the committee of the whole is in the chair. These are two entirely different matters. The leader of the house knows that very well. But I just bring to the attention of hon. members the necessary distinction between both "discussions-the debate before Mr. Speaker, before the full house; and the discussion when the chairman or the deputy speaker is in the chair in committee of the whole.



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[Stage Direction]
Right 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 come into force in whole or in part .on proclamation for the purpose of approving the financial agreement between the government of Canada and the government of the United Kingdom signed on March 6, 1946, and of granting authority, (a) to advance to the government of the United Kingdom before December 31, 1951, amounts not exceeding in the aggregate one thousand two hundred and fifty million dollars ($1,250,000,000); (b) to continue

until January- 1, 1951, the interest-free provision of the loan to the government of the United Kingdom under The War Appropriation (United Kingdom Financing) Act, 1942; (c) to cancel the amount owing by the government of the United Kingdom to the government of Canada with respect to the British Commonwealth air training plan being the sum of four hundred and twenty-five million dollars ($425,000,900);	(d) to borrow for the purpose of
paragraph (a) under the provisions of the Consolidated Revenue and Audit Act, 1931, sums not exceeding one thousand two hundred and fifty million dollars ($1,250,000,000); and (e) to carry out the other provisions of the said agreement.
Gordon Graydon: Despite the speech which we have just heard from the Prime Minister, I am quite sure that at least the Minister of Finance, who is charged with piloting this resolution through the house, will undoubtedly be expected to make out the prima facie case of which the Prime Minister spoke. I suggest that this is the time for him to do so, in case there are others who desire to speak before Mr. Speaker leaves the chair.


William Lyon Mackenzie King: Perhaps the house will allow me to make a brief reply to the remarks of the hon. member for Peel. The prima facie case appears in the notice itself. I am simply interpreting the rules. If I have given the wrong interpretation, I am prepared to stand corrected; but what I say to my hon. friend is this. If the Minister of Finance now makes his statement at length, while the Speaker is in the chair, in all probability he will be followed by several others before the house goes into committee and before we get down to the resolution stage of the discussion. When the bill itself is before the house, hon. members will be in a position to debate it on second reading and to discuss its details in committee of the whole. We may follow one of two courses. We may proceed in the manner suggested by my hon. friend, and have a debate on the resolution while the Speaker is in the chair, and then a lengthy discussion in committee on the resolution; then when we come to the bill the house will have debated the whole question and the bill will probably pass in a very short time. Or when we come to the second reading of the bill, if there is a desire on the part of some in the house to block the measure, there will probably be endless repetition of what has taken place on the resolution while the Speaker was in the chair.


Major James William Coldwell: Is the Prime Minister really interpreting a rule, or is he telling us what was the custom prior to the war? So far as his statement goes, I think it is quite sound that we should avoid two or three

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discussions on the same matter. But I should like to know whether we have a rule, or whether what the Prime Minister is suggesting is that we follow a custom which was in vogue before the war. I can find no rule, I may say.


William Lyon Mackenzie King: My hon. friend's observations suggest precisely the reason I had for conferring with the Clerk of the House, who is an authority on the rules, and asking for a written opinion from him before speaking again on this in the house. I have read the Clerk's opinion to the house. I could not put my hand on a particular Tule, 'but there is a rule in the sense that it is a practice which the house has followed, and which authorities on procedure set forth. The other method of proceeding has been a departure from the correct practice.


Jean-François Pouliot: If there is no rule, there cannot be an authority. He could not be an authority on nil.
Motion agreed to and the house weht into committee, Mr. Macdonald (Brantford City) in the chair.


James Lorimer Ilsley: I presume it will be appropriate for me to make a full explanation of
this resolution, even though we are in committee.


Mr. BRACKEN:: Before the minister proceeds, may I ask him a question? I do not know whether we fully understand what the Prime Minister had in view in his statement a few moments ago. The Minister of Finance is now proposing to make a full statement on the measure. That, I agree, is quite proper and necessary, but I trust that if the minister is allowed to make a full statement there will be no desire on the part of the government that others shall be denied an opportunity to make full statements also.


William Lyon Mackenzie King: In committee there is opportunity for full discussion.


James Lorimer Ilsley: As I understand it, there
can be the fullest discussion in committee; indeed the committee is the proper place for a discussion of details of a measure such as this. In order to introduce the discussion and the details it will be necessary for me to say something about the agreement itself and the principles underlying it, together with the reasons for it.
The financial agreement between the government of Canada and the government of the United Kingdom, signed on March 6th, was made public immediately after its signature and was made available to the members of fhe house in printed form at the beginning
of the session. In moving this resolution, I wish to explain as briefly as I can the essential purpose of the agreement as a whole and its various provisions.
This agreement is the keystone in the financial measures and arrangements made by this country for international trade and reconstruction.
The need for a credit of this magnitude and on these terms springs not only from the effects of the war upon Britain, but also from the vital importance to Canada of the re-establishment, expansion and continued development of foreign trade. As compared with others, Canadians enjoy a high standard of living. We look forward to a higher standard. We are making our plans to achieve that higher standard, but our country is so specialized in its resources and its development that it can provide high standards of living only by trade and exchange. Cut off from trade or faced with a severe loss of markets abroad, we could not maintain even our present standards, despite whatever success we might have in securing full employment. Given access to expanding foreign markets and to imports of things we require, we can make our own employment effective in yielding us living standards far beyond any that the average Canadian enjoyed before the war. Exporting the products of our farms, forests, mines and factories, utilizing cheap hydro power, Canadians can earn a living second only to that enjoyed by our neighbours in the United States. Denied the opportunity of exporting and importing on a large scale, however, we would become increasingly conscious that we are a small, northern country, lacking many of the resources and advantages which are necessary if a country is to live well within itself.
In normal times our employment, as well as our living standards, depends upon trade. When our export markets are depressed, Canadians are thrown out of work. Without a revival in exports, work can be found for them only on less productive jobs than those in the export trades. Our farmers and our other primary producers are vitally dependent upon foreign markets. The prices they receive and the amount which they can sell must, over the long run, be determined mainly by the markets outside- of Canada for our wheat, our bacon, our cheese, our apples, our fish, our lumber and our metals. In the short run we can give some protection to our farmers and our fishermen by floor prices and other such artificial devices; over the long run, however, nothing can protect their real interests against a loss of markets abroad.
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Our financial strength, as well as our economic prosperity, now requires high levels of national income, and therefore of foreign trade, to maintain the level of Government revenues that are required if the Government is going to meet all the commitments which have been undertaken, both as a result of the war and as a result of the changing views of the Canadian public on the responsibilities that any government should assume in conditions of to-day. If we are to be successful in our public finance, we cannot afford to be hesitant and half-hearted in promoting the foreign trade which is the basis of our prosperity.
Our interest is not simply in finding some place to put our surpluses; we must receive payment for our exports that can be used in discharging our own debts and in purchasing the imports which we require, and which we want for our higher standard of living. To accomplish this purpose we must be able to use the proceeds of our exports to the United Kingdom and the continent of Europe in paying our own bills and debts in the United States and in making purchases wherever we can best obtain the goods we need. We have a special interest in being able to use the currency that we receive for our exports, to obtain other currencies that we need for the payments we must make.
Already the government, with the support of parliament, has undertaken many measures to restore, expand and develop Canada's trade. The principal one to which I shall refer at
present is our programme of export credits, which is serving to finance a large part of our current exports. In the last session of parliament, on December 3, I made a detailed statement on our policies and operations in this field, and I shall not repeat here the substance of what I said at that time. As the leader of the opposition and others have asked me to review our foreign lending operations at this time, however, I wish to give the house a brief summary of the position up to the present.
Under part II of the Export Credits Insurance Act, as amended at the last session of parliament, our total authority for making direct loans to other governments is $750 million and our authority for giving guarantees is $200 million-and by that I mean I think it is two or three million dollars, or something like that-and no guarantees have been given since my review in December. Against our $750 million authority for direct loans we have now entered into agreements to lend $502,500,000. including the agreement with the government of France which was signed this week, and we have undertaken to lend additional amounts of $142,000,000 to those with whom we have already made agreements. This makes our total commitment $644,500,000 at present. Of this an amount of $67,412,051 had actually been advanced up to March 31.
The amounts and terms of the individual loans can most conveniently be given in a short table, which, with the permission of the house, I will place On Hansard at this point:
Credits Under Part II of The Export Credits Insurance Act
Amount of	Time of	Interest	Amount UsedCountry	Credit	Repayment	Rate	by March 31/46Belgium 	1947-1976	3%	$25,000,000China 	
60.000,000	1948-1977	3%	nilCzechoslovakia 	
19,000,000	1950-1954	24%	3,191,551France 	
242.500,000	1947-1976	3%	nilNetherlands 	
125,000,000	1950-1976	3-05%	, 25,150.000Netherlands East Indies 	
15,000.000s	1950-1954	2i%	1,800.000Norway 	
13,000,0003	1951-1959	2i%	9.495,000
3,000,000	1950	2%	2,775,500Total 	
$502,500,000	$67,412,051
Add: Additional amounts committed (see footnotes) $142,000,000 Total commitments: $644,500,000
C4n additional amount of $75,000,000 has been tentatively agreed with Belgium on the same terms.
2	An additional amount of $50,000,000 has been promised to the Netherlands East Indies od the same terms.
3	An additional amount of $17,000,000 has been promised to Norway on the same terms.

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I should add that some advances have been made to France under section 3, which I shall point out later. Those advances will be transferred to the agreements, so to speak, in the near future.
I shall have a little more to say later about the U.S.S.R. This amount is not the whole amount that the U.S.S.R. owes Canada. Advances have been made to the extent of perhaps another $9 million, under other authorities. However, I shall deal with that later.


John Bracken: When was this credit extended to Russia?


James Lorimer Ilsley: During the latter part of 1945. In respect of some of the items it was agreed that it should be extended long before that. But there are so many transactions- some dealing with wheat, some with industrial equipment, and some with mutual aid supplies which were not delivered before the end of the war-that it is almost impossible to give a summary explanation in a few words.
So the total of the amount of credits covered by the agreements is $502,500,000; the amount of cash used up to March 31, 1946, is ,$67,412,051. Additional amounts committed for, which I have mentioned, amount to $142 million, making a total commitment of $644,500,000.
Then, as I started to say, for the sake of completeness, I should also mention that temporary advances have been made on behalf of allied governments under section 3 of the War Expenditure and Demobilization Appropriation Acts and previous War Appropriation Acts. During the past year these have served as temporary loans to certain of the governments to whom we are providing credits under The Export. Credits Insurance Act. A table of these advances as of February 28 was given in answer to a question and appears on page 417 of Hansard. It has not been possible to provide a complete table as yet for the same items as of March 31, as a number of the accounting transactions are not yet completed. I should mention, however, that the list for the end of March includes amounts of approximately $80 million on behalf of France, which will be repaid shortly from the export credit which has just been provided to that country, approximately $30 million on behalf of the United Kingdom, representing costs incurred subsequent to February 28 and therefore not covered by the claims agreement, approximately $14 million for the Netherlands, $9 million for the U.S.S.R., $8 million for Australia, and $5 million for Belgium. These figures do not include the items that have been settled by the claims agreement with the
United Kingdom, nor do they include certain expenditures made out of appropriated funds which it is expected to recover in whole or in part from other countries, such as military relief, for example, and costs of production of some supplies originally ordered for Mutual Aid and which are now being sold.
A detailed report on operations under part II of the Export Credits Insurance Act will be presented to the house later this month, and the house will have an opportunity to discuss them, as it is planned to bring into the house a bill amending certain provisions of that act, although not altering the amount that may be loaned under it.
Turning now to the special case of Britain, we should note first that her need for credits is huge in comparison with the other countries with which we have dealt.. Moreover, there are special factors in the case of the United Kingdom, which I shall discuss in a moment, that necessitate and justify different terms from those we have offered as a matter of policy in other cases. The government is, therefore, not proposing to deal with the credit to the United Kingdom under the Export Credits Insurance Act, but instead is seeking the specific approval of parliament for this financial agreement that has been concluded with the British government.
During the five years from 1946 to 1950, the United Kingdom will be going through a jjeriod of transition and reconstruction, both in its domestic and in its international economic affairs. In this period it will be endeavouring to revive and establish its export trade, which was so seriously curtailed during the war when all Britain's manpower was mobilized for war service, war production and only the most essential civilian purposes. It will take time for British exports to get back to their pre-war volume, although the progress made over the past few months is encouraging. It is necessary for Britain to do much more than to regain the pre-war levels, however, if she is to pay her way internationally. She has had to sacrifice many of the overseas investments she had made, and will no longer be able to count on as much income from this source as before to help her pay for imports.-This must be replaced by increased exports. Moreover, the losses incurred in shipping during the war have reduced, at least temporarily, the income from her merchant marine, while the general dislocation of trade and finance caused by the war has interfered with the British overseas earnings in respect of insurance and financing services, which also helped to pay for imports.
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II, 1946

[Stage Direction]
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These reasons for regarding. the United Kingdom position as a special one requiring special treatment are much more important in relation to>
Canada even than they are to the United States. They are more important for two reasons: first, because we are so much more vitally interested in the future of international trade as a whole than the United States, and, secondly, because such a large proportion of our trade takes place with the United Kingdom and other countries in the sterling area and we are most concerned to continue this trade and to continue to be able to receive payment for our exports to Britain and other sterling area countries in a form that we can use for expenditures elsewhere.
Britain has for many, many years occupied a key position in international trade and in its development. For more than a century it has been the greatest importing nation in the world. Despite the enormous growth of the importance of the United States in international trade and finance after the first world war, Britain remained much the largest importer. In 1938, for example, British imports comprised approximately 19 per cent of the total imports of the world, whereas American imports amounted to only slightly over eight per cent of the total. Nor do these figures alone make clear the great importance of Britain's markets. The nature of her1 imports was such that she constituted the chief market for countries such as Canada, Australia, New Zealand, Argentina and Denmark, as well as many smaller countries, all of which were greatly dependent upon exports for their prosperity and their general welfare.
Because of this large and central place which Britain occupies in world trade, British policies in regard to trade are of critical importance to exporting countries and particularly to Canada. In addition, British policies will influence and largely determine the policies of many other countries, including particularly the countries now in the sterling area and probably the countries of western Europe. If Britain follows one type of policy it will enable and encourage these other countries to follow it as well. Therefore, British trade policy in the next few years, when the whole pattern of postwar trade is to be determined, will be of the very greatest importance.
There are, broadly speaking, two alternative types of policy open to Britain at the present time. The first and much the more desirable policy from our point of view is the type reflected in the Bretton Woods agreements and the proposals for expansion of world trade and employment put forward by the United
States government. This type of trade and exchange policy involves a minimum of restrictions on trade, tariff reductions, the elimination of discriminatory import quotas and exchange practices, and the freedom of each country to use any currency that it has obtained through trade with another country in carrying on trade with any third country. This type of policy would make possible not only a high level of trade but freedom in the direction of trade. The alternative type of policy, on the other hand, which is open to the United Kingdom is one of bilateral arrangements in which Britain would purchase goods on condition that the selling country would take British goods in exchange, one involving discrimination in both importing and exporting and substantial restrictions on the use of currency received by exporting countries. Under this type of policy if Britain were forced to follow it, she would endeavour to make the most of the bargaining power which her huge import markets give her in order to improve the terms on which she trades and to force her exports into the markets of other countries.
The choice which Britain makes between these two alternative policies is vitally important to Canada as well as to the United States and to other countries which are largely dependent upon exports. There are many in the United Kingdom, some of them in very influential positions, who contend that Britain cannot afford the risks of liberal policies under present circumstances. They propose that she should exploit the strong bargaining position that will be hers after the present shortages disappear and buyers' markets return. Some persons in Britain even seem to see virtues in the political and economical arrangements likely to result from the restricted trading blocs which would emerge from a policy of bi-lateral bargaining and discrimination. On the other hand, there are many who realize, as we realize here, the advantages to Britain of liberal policies that will encourage the maximum development of trade. Britain can follow these policies which we favour if the British government and the British people can have confidence that they will possess sufficient financial resources to engage in trade on these liberal lines, which would involve more imports and a larger temporary increase in Britain's indebtedness than would the other policies, pending a revival in British export trade.
Britain cannot afford to choose the liberal trade policy' unless she gets loans from the United States and Canada on liberal terms. If she follows these policies, which we wish to see her adopt, she will have to discard
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within the next year many of the defensive and discriminatory import and exchange measures which she adopted during the war to protect her financial position under the enormous strains which the war thrust upon it. She will have to go into debt to the United States and to Canada, and perhaps to others, on a large scale. Britain can only afford to undertake these debts with any confidence of being able to repay them if the terms recognize the realities of her international financial position and make allowance for the relatively narrow margin she will have available over the long run to make repayment and pay interest. This necessity for liberal terms arises on the one side from the huge amounts which it is necessary for Britain to borrow, and on the other from the effects which the war has had upon her international financial position.
We must realize that Britain is no longer a wealthy country in international terms. She has sacrificed her international financial strength in meeting the costs of the war. Before the war Britain had substantial overseas assets that yielded her, on balance, an income of approximately a billion dollars a y'ear.
After Dunkirk, Britain, as part of her allout mobilization, threw all of her financial resources at home and overseas into the struggle, and used her ability to borrow abroad both in North America and in the sterling area. From that time until the end of hostilities, 3he incurred heavy costs outside her own borders in buying supplies and in financing the conduct of warfare in many parts of the world. The United States and Canada relieved her quite rightly of a considerable part of these costs in North America by' lend-lease and mutual aid. These, however, were truly part of our North American war effort rather than aid to Britain, who continued to carry more than her full share of the financial costs of the war. As a consequence of these huge overseas expenditures, Britain was forced to liquidate her overseas investments to. a value equivalent to approximately five billion Canadian dollars. About twenty per cent of these liquidated investments were Canadian securities. This liquidation of assets, however, was only the beginning. Britain proceeded to borrow heavily abroad in order to finance the costs of the war outside Britain and her total external debts increased by 'the equivalent of 13 billion Canadian dollars. In addition, she used up practically all her foreign exchange reserves before lend-lease commenced, and has only been able to rebuild them to little more than about half of what they were prior to Munich. As a consequence of all 
these changes, the British are now worse off to the extent of about 20 billion Canadian dollars than they were when the war commenced. Now the war and the effects of the war upon her exports and her overseas expenditure have left Britain in the situation where she must borrow a further five or six billion dollars during the transition period. As a result of the war, therefore, she will end up with her international position worsened by the equivalent of over twenty-five billion Canadian dollars, as compared with her position in 1939.
In addition to these losses in her external position, Britain of course suffered great losses at home-losses in property, in manpower and in wealth. We are all familiar with the spectacular damage caused by bombs and rockets; we are not so familiar with the insidious losses that arose because Britain was unable to repair and maintain her equipment, her houses and all the property that goes to make possible modern civilization. In addition, of course, the British cut down their standards of living and their consumption substantially below pre-war figures on average, while we on this continent were able to raise ours. I mention these losses within Britain only in order that we shall not seem to concentrate solely on the financial side. Other allies have suffered enormous losses in their own countries. None, however, has borne the international costs that Britain has borne; none is faced with the same tremendous problem of readjustment in the balance of their international payments. Alone among the allies, Britain has suffered as a result of the war a great deterioration in her external financial position and now, in addition, she must borrow huge new sums in order to embark in peacetime upon the trade policies which are so important to us.
The government has examined the present and prospective financial situation of Britain at length. We have come to the conclusion that Britain can undertake the trade and financial policies that she would like to undertake, and that we would like to see her undertake, if we and the United States are prepared to enter into financial agreements such as those already signed with her. We have come to the conclusion., after the most serious study and discussion of the matter, that terms more onerous than those provided in this agreement would not enable Britain to follow the policies which are in the long-run interests of both countries, and indeed of all countries. We have also come to the conclusion that the British government will be able to meet the terms of this agreement over the next fifty-five years. The British authorities themselves considered

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this aspeet of the matter most thoroughly and they have taken the most careful and responsible attitude possible in regard to the obligations which they have incurred under this agreement and the Anglo-American agreement. They have been determined from the outset, and indeed they made this determination clear to us as early as 1944, that they would not incur debts which they could not honestly believe they would be able to discharge.
I should like now to outline the main provisions of the agreement and to make some comments upon them that may help the house to understand their meaning and purpose.
In the first place, I should like to explain that this financial agreement and the other agreement on the settlement of war claims are separate and distinct. The agreement on the settlement of war claims is essentially a measure to settle with precision and finality a large number of outstanding claims between the two governments, without making any concession of consequence on either side. The amounts of some of the claims which are settled by this claims agreement are open to argument, and it would have been possible to spend years in debating whether this claim or that should be one or two or three million dollars, more or less, all things considered. Both sides have come to the conclusion that the payment by the United Kingdom to Canada of $150 million would be a fair and reasonable settlement of the net balance of the claims by Canada on the United Kingdom over the claims by the United Kingdom on Canada. There should, during the consideration of the estimates, be an opportunity for discussing the details of the claims covered by this agreement, if members wish to do so. The transactions to implement the agreement are being carried out under the War Expenditures and Demobilization Appropriation Acts of the 1945-46 fiscal year. Britain has already paid us in gold the $150 million she undertook to pay in this settlement.
The first item of interest in the financial agreement itself is, of course, the amount of the credit and the way in which it may be drawn upon. The British representatives asked for this amount, and demonstrated to our satisfaction that they would1 in fact require this much and more to finance the purchases which they intended to make in Canada during the six-year period in which the credit may be drawn upon. In fact, as I have already indicated, the British deficit of Canadian dollars will likely be such that the total amount of this credit will be drawn before the end1 of 1948. The British representatives made it clear 63260-49
to us that they expected that Britain would need to finance additional purchases ini Canada from other cash resources.
The terms of the loan relating to interest and repayment are, of course, the same as those in the agreement between Britain and the United States. During the years 1946-50 no interest is payable on the amount of the loan which will have been used. The reason for this is that this is the period during which Britain will be experiencing difficulty in her balance of payments as a result of the immediate after-effects of the war. This is the period during which she needs to use the credit, and she cannot afford to pay interest in this period without making additional credits necessary. Interest commences at the beginning of the year 1951 and for that year is payable on the whole amount outstanding at the end of the year. From that time on, interest is payable each year on the amount of the credit outstanding during that year. Principal repayments are made at the end of each year from 1951 to 2000 A.D.
We would naturally have preferred a higher rate of interest but after careful consideration of the probable British balance of payments, we reached the conclusion that two per cent was all that Britain would be in a position to pay. Indeed, she will not be able to afford even this rate of interest unless her exports expand and are maintained at-a high level. It is for this reason that waiver of interest payments is provided for under certain circumstances in our agreement as in the agreement with the United States. This is needed to allow for the uncertainties and risks which the United Kingdom must face in reestablishing her export trade. Interest may be waived only if the United Kingdom's exports over the preceding five years are insufficient to pay for the pre-war volume of her imports, taking into account other current account transactions as well. In effect, therefore, we say to the United Kingdom: If your exports are sufficient to enable you to pay for a prewar volume of imports without running further into debt, then we will demand interest from you; if, however, they are not up to this level and if, therefore, you must go into debt or liquidate your capital in order to import on the pre-war scale, or else must restrict your imports to avoid the strain upon * your resources, then we are prepared to waive the interest payments.
I should point out that the waiver will only be granted if the United Kingdom states that it is necessary in view of the present and prospective conditions of international exchange and the level of her gold and foreign exchange reserves, and if the international monetary
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fund certifies that the condition in respect of United Kingdom exports is fulfilled. We have also the safeguarding provision that the waiver will only be granted by Canada if it is also being granted by other countries having similar agreements, which, of course, include the United States and any further countries which may enter into agreements of this kind with the United Kingdom. This waiver clause should go a considerable distance in enabling us to avoid any possible damaging effects of the burden of large scale indebtedness upon future trade in the event of adverse economic circumstances.
The next important provision of the agreement is article 5 regarding exchange and import arrangements. It will be noted that this is reciprocal in form, and that each of the two governments agrees to accord to the other treatment not less favourable than that provided for in any instrument of agreement with the government of any other country, signed prior to the date of this agreement. Under this clause Canada binds herself to give the United Kingdom most-favoured-nation treatment in regard to the use of import quotas, which are referred to in some of our trade agreements. The United Kingdom, on the other hand, in this clause undertakes to give Canada similar treatment to that granted the United States in the Anglo-American financial agreement. This is of quite substantial importance. Hon. members will recall that there are 4 important sections of the Anglo-American agreement relating to these questions. Under certain of them the United Kingdom agrees to make sterling paid by the United Kingdom in current -account transactions, or sterling released from accumlated balances, freely convertible and available for current transactions in any currency area without discrimination. On the other hand, certain of the undertakings given in the Anglo-American agreement apply specifically to the treatment of United States transactions or trade, and it is the benefit of these provisions in particular that we obtain under Article 5 of our agreement. In particular, we obtain the benefits of paragraph (i) of section 8, in which the United Kingdom undertakes not to apply exchange control in such a manner as to restrict payments or transfers in respect of [DOT]current transactions between the two countries, or the use of sterling balances to the credit of residents of the United States arising out of current transactions. We also obtain the important benefits of section 9, in which the government of the United Kingdom agrees to administer any import restrictions on a basis which does not discriminate against imports from the other country in respect of any pro-
duct. This assurance of non-discrimination in import control is to take effect as soon as practicable, and not later than the end of 1946. We shall obtain the benefit of this nondiscrimination as a result of Article 5 of our agreement.
Article 6 of the agreement provides in effect that .the arrangements already existing in respect of the loan which we made to the United Kingdom in 1942 will continue as they are at present until the beginning of 1951, and that before that date we shall discuss the question of payment of interest on, and the , terms of repayment of, any balance of the loan then outstanding. Members will probably recall that this loan was made under the War Appropriation (United Kingdom Financing) Act, 1942. In substance, the actual loan was made to Britain to finance war expenditures during 1941, as we were providing Britain with dollars in 1941 in return for sterling which we accumulated and this accumulated sterling was paid off with the $700 million loan granted in 1942. The loan was, of course, a war loan, made to finance war expenditures. The act which authorized it provided that no interest shall be payable under such obligation in respect of any period prior to the termination of the war. Consequently the loan has not -borne interest up to date. In view of the enormous burden of international debt which war has thrust upon Britain and the difficulty she faces in reestablishing her export trade and paying for all her current requirements, we have come to the conclusion that Britain has not the capacity to pay interest on this loan during the period from now until the end of 1950, any more than on the main loan, and that she should not be asked to do so. There has been another important arrangement concerning this loan which is being continued under the new agreement. At the time we made this loan in 1942, the United Kingdom government undertook to ensure that the proceeds of sales to persons not resident in the United Kingdom of Canadian securities payable in Canadian currency, and interests therein, held by residents of the United Kingdom, and the proceeds of the redemption or repayment of Canadian securities or -interests therein held by residents of the United Kingdom were paid to the -government of Canada as part repayment of this loan. This arrangement is now being extended and will continue until the end of 1950, along with the interest-free provision. Under this arrangement the loan is being paid off or reduced by the sale or redemption of Canadian securities held in Britain. This process will result in the gradual and orderly repatriation of Canadian securities

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owned in the United Kingdom, and in the gradual reduction of the amount of the loan outstanding. The total repayments up to date have amounted to §161,435,596.43. Additional repayments are pending as a result of the substantial sales and redemptions of securities in the latter part of 1945, and when they are made the loan will be reduced to something in the neighbourhood of $500 millions.
Article 7 of the agreement provides for the cancellation of the amount owing by the government of the United Kingdom to Canada under the British commonwealth air training plans of 193-9 and 1942. These agreements were the basic ones under which this great Canadian project, one of the most creditable aspects of our war record, was developed and financed. In broad terms, the agreements provided for the sharing of the total costs of these plans among Canada, Britain, Australia and New Zealand in proportions considered fair at the time in view of the number of pupils from the several countries to be trained under the plans, and also in view of other relevant circumstances at the time. Under both the first and second plan, the United Kingdom share was intended to be financed mainly through contributions in kind, that is, contributions of aircraft, spares, supplies and equipment. As the plans developed and as the various circumstances affecting the ability of the United Kingdom to make contributions in kind changed, for example, when the great intensification of the air war in 1940 made it difficult for the United Kingdom to send planes to Canada for training purposes, the share of the United Kingdom in the total costs came considerably to exceed the amount which she could furnish as contributions in kind. As a consequence, when the settlement of the accounts for the first plan was finally worked out, it was found that the United Kingdom's share of the cost exceeded what she had contributed and paid by $200 million. Similarly, when the details for the second plan, ending at March 31, 1945, were worked out, it was found that the United Kingdom had paid or contributed an amount that fell short of her share of the costs by $225 million. These two sums together add up to the $425 million referred to in this financial agreement. The detailed methods by which the shares of costs were determined, and the various items credited to the United Kingdom are exceedingly complicated, and if the house wishes to know more about them when considering the bill, I am sure that the Minister of National Defence for Air, with some advance notice, would be able to give an explanation of them.
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In agreeing to cancel this amount owing by Britain in respect of air training, the government has been motivated by a number of strong reasons. In the first place, this service provided to Britain is one that might well have been covered by mutual aid, and perhaps would have been covered by mutual aid had not the air training agreements been entered into before mutual aid began and the accounts worked out only after, mutual aid had terminated. We did provide air training services to Australia and New Zealand as mutual aid, and we furnished supplies to Britain as mutual aid that could be used for air training in Britain. Secondly, the United States government furnished air training services to Britain and to other countries as lend-lease and furnished Britain with equipment and supplies on a large scale to be used in air training, including equipment and supplies used in the British Commonwealth air training plan in Canada. Thirdly, we came to the conclusion after much consideration that repayment of this $425 million was beyond the United Kingdom's capacity to pay within any reasonable period. From what I have already . said, it will be evident that the amount which the British can undertake to pay is severely limited within the next five years and, indeed, over the remainder of this century. We have taken full account of their ability to pay in setting the terms for interest and repayment on the new loan and for the 1942 loan. It seems to us futile to ask the British government to pay this $425 million some time in the next century when they have completed the payments on the loan which we are now making to them. I do not believe that either the British or the Canadian people at that time would consider it a proper transaction. I think it is far better for us to face the facts clearly and cancel this particular war debt. It should be remembered that the British have no production assets as a result of incurring this debt-nothing that will add to their ability to pay it.
I need say only a few words about the remaining articles of the agreement. Article 8 regarding consultation indicates that the two governments will work together in putting the agreement into effect, and that if major changes -occur in the international situation which materially alter the prospective benefits and obligations flowing from the agreement, they will consider together what changes in its provisions they should agree to make, subject to such legislative approval as may be necessary. By consultation we shall be able to work out such things as the manner and
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[Stage Direction]
time at which the United Kingdom will draw upon this credit and the machinery for implementing its other provisions.
I should now refer to the exchange of notes between the Chancellor of the Exchequer and myself in regard to our understanding about the entering into force and implementation of the various provisions of the agreement. This was made necessary because the agreement has been drawn up in the expectation that the financial agreement between the United Kingdom and the United States, signed at Washington on December 6 last, will be approved by the American congress and will entet into force some time during the current year. As soon as that agreement does enter into, force, we shall be prepared to implement the whole of our agreement once parliament has approved it. If, however, congress does not approve the Anglo-American agreement, we shall consider that, in the terms of article S of our agreement, a major change has occurred in the international financial situation which would materially alter the prospective benefits and obligations flowing from our agreement, and that consequently it would be necessary forthwith to consider what changes in the provisions of our agreement the governments of Canada and the United Kingdom should agree to make, subject to such legislative approval as may be necessary, which, of course, in our case would be approval by parliament in the event of any amendment to the agreement itself. If congress does not approve the Anglo-American agreement, we shall not benefit from the trade and exchange provisions of that agreement, either directly or through the application of article 5 of our agreement. It will, therefore, be necessary to consider some substitute for article 5 of our agreement in those circumstances. Consequently we feel that those portions of our agreement which it is not necessary to implement immediately in order to enable the United Kingdom to proceed now with its purchases in Canada should be deferred until we see the results of congressional action. For that reason, therefore, we have reached the understanding with the United Kingdom that articles 5, 6 and 7 of the agreement will not be implemented until it is known whether the United1 States congress has approved the Anglo-American agreement.
In conclusion Mr. Chairman I wish to say ju&t this. The United Kingdom has always been Canada's largest and most reliable market. Upon the continuation of this market the employment and welfare of millions of Canadians depend. It must cease to be a satisfactory market for Canadian products unless the British pound is in the future both convertible and stable. The restoration of the
[Mr. Ilsley.l
convertibility of sterling and the maintenance of a reasonable stability of sterling depend upon the successful completion of the proposed loan agreements with the United States and Canada. If these go through, Great Britain can take her full part in the post-war period and throughout the years of the future as a great trading nation, a nation whose currency can be used by any country to buy the products of any other country; a nation whose currency will retain a stable value from year to year. Viewed in this light, this agreement is of the highest importance, and value to Canada. It is not in any sense an act of charity, it is an investment in the future of Canadian trade. Together with the Anglo-American agreement and the Bretton Woods agreements, it will enable us to proceed confidently to the consideration of the commercial policy that Canada and other countries should follow after the war, and to the establishment of the international trade organization which has been proposed by the United States. As hon. members already know, it is planned to have an international conference on trade and employment some time within the next twelve months. Preceding that will be a smaller conference, sponsored by the economic and social council of UNO, for the purpose of drawing up specific proposals for the consideration of the larger conference and, more particularly, foy the negotiation of specific proposals for the reduction of tariffs. These measures, relating to international trade and the barriers to such trade, are of the utmost importance to Canada. We can proceed to a proper consideration of them and to the action that will be based upon such consideration only if the financial resources that will make trade possible are provided by agreements such as that which has been placed before the committee .for approval.
Mr. MACDONNELL (Muskoka-Ontario):: I shall not attempt this afternoon to make any detailed observations on the very complete statement w'hich we have received from the Minister of Finance, but I should like to make some general remarks on this resolution, which seems to me to be one of tins most important that we have ever considered in this house or that we shall have to consider for some time. In the first place it seems to me that the time at which we are considering this resolution is rather apt, perhaps even critical, because it so happens, as you know, Mr. Chairman, that this matter has now reached the stage of impending decision in the United States. I suppose it is no exaggeration to say that what we do in this house at the present time may have an influ-

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ence far beyond ourselves. What we are being asked to do, as the Minister of Finance has pointed out, is to take part in what may be described as a piece of global economic strategy. We heard a great deal about global strategy during the war, and I take it we must have global strategy to-day, in times of peace, when we face questions just as difficult as we faced in the war, if not more so. and in an atmosphere more difficult because we have not now that inspiration, urgency and common feeling which come from sharing a common danger which we can feel day by day in terms of human life. I believe we are facing just as great a common danger to-day, but it is not so easy to see it.
I wish to discuss this matter solely from the point of view of the economic interest of Canada. That is not because I have not any other feeling about the matter. I might speak from other points of view, but the reason I wish to speak from that point of view is that I want to put it on a basis where no Canadian fellow citizen can say to me, "you have introduced an extraneous element here." I want to put it on a basis where I can say to any Canadian citizen. "I am arguing this from the point of view of your interest and my interest, our Canadian interest, our economic interest." I have some hope that if we can all make each other believe that we are really arguing it on that basis and that there is nothing else in it, we can reach that measure of unanimity which I regard as very important.
The next observation I wish to make is that I believe every one in this house-I really said this already-realizes the enormous, the vital importance of this. If this succeeds 

if we have faith we can make it succeed- we have a chance to go forward to some kind of economic cooperation comparable with what we had during the war. If we ourselves, the United States and the United Kingdom reach some kind of coordination and cooperation the rest of the world will, I am sure, be glad to follow. If we fail, then there is literally no hope for anything except the old chaos which we all got to know so well in the thirties.
I come to the bill, the first section of which says that the government of Canada will extend to the government of the United Kingdom a credit of SI ,250,000,000. What do we mean by that? What does that mean in terms of the life of the ordinary Canadian citizen? We have become so accustomed to these fabulous and ast-onomical amounts that we are getting to feel they are just figures in books, and some .people tell us that they are
just figures in books. I should like to describe what it means to me in as simple words as I can. What it means is that the citizens of Canada are to be asked either to pay taxes or to lend money to that amount, to make that amount available to the people of Great Britain and of other places, as the Minister of Finance pointed out, to buy goods in this country. Why do we do that? Do we do that just to make ourselves good fellows, because we are generous-hearted? No. Why do we do it? All hon. members know why we do it. I ventured to say last autumn when the exports credits were up that we could not afford not to afford them. I say the same thing about this amount. Why do I say that? What do I mean when I say it? All hon. members need to do is to look back over the last fifteen years. They do not need to go another step backward to see what foreign trade means in the life of this country. We remember the figures of 1929. Our exports amounted to something like $1,400 million. Then it went down in 1933 to little more than one-third of that amount. I believe it was S534 million. We all know what that meant. Then by uncertain, rather anxious and slow degrees it mounted up in 1939 until it was something over $900 million, just under a billion, if I remember rightly. We all know what happened since that time. It mounted up and up until it got to about $5 billion. We know how that happened. We know that we borrowed, that we taxed ourselves as we never believed we could. The Minister of Finance almost made us like it. We taxed ourselves to the extent of about two and a half billion dollars, and on top of that we borrowed almost another two and a half billion dollars. In various other ways the minister managed to raise about another $500 million. Altogether we took out of our pockets about S5.500 million. The result was we were all rich. We all had money in our pockets. There is great danger lest we feel somehow or another that these good times with these fabulous amounts can just go on. The truth of the matter is that we are like a man who had an income of $2,500 and then borrowed $2,500 and spent the whole $5,000 in one year and said, "This is grand", and did not bother very much about what is to come afterwards.
The Minister of Finance smiles. He knows better than that, and we are going to know better when we look at it. The longer the spree, the sorer our heads will be when we wake up. I do not think many of us believe there is some magic which enables us to go on borrowing and borrowing and never have to pay the piper. Incidentally I am glad that
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we got a very fine lead this week from the Chancellor of the British Exchequer, who, I suppose, is a socialist.


Mr. COLD  WELL@: Yes, and it was a socialist budget.


James MacKerras Macdonnell: I like to be able to praise a socialist when I can. I want to point out that no one is more orthodox in the arranging of a budget than Doctor Dalton. He made it clear that a balanced budget is essential. He is a model for us here. I hope the Minister of Finance is following very closely what he is doing.
I come back to exports, because I think we should regard this matter in that light and not let ourselves get confused with this, that or the other thing. We should regard this simply and clearly as a matter which affects us through our export trade. The Minister of Finance has already made that clear and I wish to underline it. It affects us in our export trade. That brings us to Britain. When we look at the continent of Europe which was our great market, and when we consider the extent to which that market is shattered-we realize that from the loans to European countries we heard of this afternoon-I suppose there never w-as a time when the British market was more important than it is now.
I do not like to think of what would happen, first of all to Europe, and then to us, if Britain is not able to restore her economy. Therefore it seems to me that when we are talking about assisting her to restore her economy we are talking about something which is very close to ourselves. I should like to read a few words from a speech of Lord Keynes which was delivered in the British House of Commons. He was speaking about his trip to the United States and the negotiations that were carried on last autumn. He referred to the attitude which they had to take in the United States. He was answering some people in Britain who felt, I suppose naturally, that since they had been in the war for two and a quarter years before the United States there might have been a somewhat different attitude taken toward all the amounts which were spent, and spent in the United States, during those two and a quarter years. But Keynes told them to forget all about that, and he had one or two important remarks to make on it, I should like to read one or two of them. It is, I think, put in rather clever wording. This is what he said:
We soon discovered that it was not our past performance or our present weakness, but our future prospects of recovery and our intention to face the world boldly that we had to demonstrate.

He went on to say:
In every circle in which I moved during my stay in Washington, it was when I was able to enlarge on the strength of our future competitive position, if only we were allowed a breather, that I won most sympathy.
Why do I read this to the house? I do so for two reasons: first of all, to try to underline the argument that I am making. If I succeed in nothing else I hope I shall succeed in showing that I am arguing this from the point of view of the interest of Canada. My second reason for reading it is to draw to the attention of the house what Mr. Keynes said, who, I suppose, on his record of the last twenty-five years can clearly be regarded not only as the greatest economist, but the most successful prophet that we have had in economic matters. In case I forget later, I should like to remind the house of that astounding book he wrote in- 1919 called "The Economic Consequences of the -Peace," in which he repeated everything that has happened since; at any rate, everything that has happened with respect to the indemnities of the first war. He said they could not be paid-. Keynes pointed out the whole thing. Here is the man who was in Washington. Here is the man who told- the British that in dealing with the United States they had to satisfy the people of that country that they would- be able to recover; that this global strategy of economics would succeed, that if they were given this breathing space they could get on their feet and be able to fit again into a freer world1 economy, and that this would- be to the advantage of the United States and ourselves.
Let us remember when we are talking about this that the negotiations in the United States-and Keynes pointed this out in the British House of Commons-were always carried out with congress in mind. There was 'congress; and congress was considered to be representative chiefly of the people of the middle west. In other words, they wanted to get down to hard-boiled people who considered nothing about sentiment, but who were looking to their own advantage.
To me the matter is very simple. I shall give a simple illustration drawn from business. I do not know if I have used it before in the house; but if you have escaped it, there are a lot of other people who have not. It is this: We all know that in business, the wise businessman very often finds it necessary to give credit. The wholesaler may give credit to the retailer, and he may not pay for a year or two years, or even three or more. Why does the wholesaler give credit to the retailer? Does he do it because he likes the

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retailer? Indeed not; he may dislike him. He does it because he thinks this man is a sound businessman, and he hopes to set up a good customer. That is why we should make this loan to Great Britain.
I wish now to say a word-and no more than a word, because the Minister of Finance has covered it, and I do not wish to labour it-about another phase of the matter. It is well for us to remember two things that happened during the war. It is well for us to remember why these people need help. It is not because they are a lot of poor weaklings who have mismanaged their own affairs. It is not because of that at all. It is because they have fought a war for six years. It is because they had to take their savings for generations-perhaps centuries-and use them, as wre know, to buy astronomical amounts of supplies in the United States.
The , result is that that great source of income is just about cut in two. But that is not the worst. The worst is that after the United States came into the war, and when things seemed to be going better, when prospects were better, in the last years of the war Great Britain had to make this great distortion in her economy, namely, that she had practically to give up her foreign trade. She had to make the things that she could make at home, for use at home; and the United States and other countries took over the foreign trade. This was necessary to save shipping, and to prevent so far as possible the unnecessary use of shipping in submarine infested waters. The fact of the matter is that these unfortunate people, while fighting for their lives, saw their trade drop to about thirty per cent of what it was in 1939-and it was nothing to boast about even in 1939. That is, the reason why we a^e faced with this situation.
There are two alternatives, and, I think, only two. The first is that of multilateral trade, to which the Minister of Finance has referred, and which we hope will become real under this International Conference of Trade and Employment which is to meet during the current year.
What is it hoped that may do? It is hoped that may get us away from the multitudinous restrictions we have, and about which we all know so much. We would all like to get awray from them if we can. I do not think there is any doubt about that. It is a policy to free sterling currency, which at the present time is not free. They have had to stipulate in England that people who sell there have to leave their money in England, so that sterling could be used and marshalled and
the small amount of United States exchange could be kept in a pool, which was managed by Great Britain.
The whole aim of loans by the United States and ourselves is to set that free and, as the Minister of Finance said, so that money can be used freely throughout the world, so that we can get back to the method left behind, so that we can do business again without being hampered with all these numerous checks and balances.
What is the alternative? The alternative is a very simple one. I shall read again the words of Keynes, and I would ask hon. members to note carefully what he says. The alternative, of course, is to go on with the sterling bloc. The alternative is for Great Britain to seek more credits from the countries in the sterling block to whom she already owes a lot, particularly those in the sterling bloc who have not the goods that we in Canada and the United States have, and who have not the materials which are needed by the United Kingdom in order to get its business under way.
This is what Keynes said in the debate in the House of Lords:
The alternative is to build up a separate economic bloc which excludes Canada and consists of countries to which we already owe more than we can pay, on the basis of their agreeing to lend us money they have not got, and buy only from us and one another goods we are unable to supply.
May I read it again, because it is true. Perhaps it sounds like a clever epigram; but let me read it again:
The alternative is to build up a separate economic bloc which excludes Canada and consists of countries to which we already owe more than we can pay-
That is, each country in the sterling bloc.
-on the basis of their agreeing to lend us money that they have not got-
They have already extended credit beyond their means.
[DOT]-and buy only from us and one another goods we are unable to supply.
Because the people who can supply them are the United States and Canada.
I want now to come back to one observation he makes here which, to my mind, is vital, when, he says, "This economic bloc which excludes Canada." I believe there is an argument for Australia or New Zealand or South Africa, or France or Belgium. I think there is an argument in the case of these countries that they might flourish under a sterling bloc. But I cannot see how there is an argument that
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we can flourish in it, because we cannot get into it. The reason for that is that nature has put us in North America. We are inescapably north American-as a distinguished leader of my party said about, ten years ago. We are inescapably, geographically north American.
If we are not in the sterling bloc, then will hon. members and will the people of this country please reflect upon what that means? It means that if we are unfortunate enough to have the economic world divided into two blocs, one presided over by the United States and the other presided over by the United Kingdom, we are not in either one. We are in some unpleasant no-man's-land, some middle ground I do not know anything about. Therefore I feel, and I believe every man who will think it over will feel, that what we should hope for in all our hearts is that this trade agreement may succeed, and that therefore we should now take the means of giving it a chance of success.
As the Minister of Finance has said, one of the aims is that we should give the British a breathing spell; give them a chance to get on their feet; give them a chance to pay us this loan, and in doing so be able to increase and increase and increase their foreign trade, so that we shall be able to sell them more and more goods.
We shall have to take goods, too; do not forget. Nevertheless what we hope is that their trade may greatly increase, both ways.
As I said a minute ago, I believe every sensible man, if he could visualize these two alternatives, would not hesitate a moment as to which he would take. Again, if we can have multilateral trade, which means going back to the simple and sensible world-certainly it was sensible when compared with the mess we have been in since-of the nineties, or opening years of the present century. I do not mean that they were perfect; I do not mean that our social services were what they should be. I am thinking about the international situation and the likelihood that any sensible man would wish to go back to that reasonable degree of freedom.
Nobody believes we can get rid of restrictions and discriminations to-day or to-morrow. But if we could1 get back to those conditions, when there was a reasonable degree of freedom, trade moved1, goods moved freely, and people benefited from each other's capacity to specialize, as the minister pointed, out. That is what we should have again.
What reason have we to think that that may succeed? First, I would say-this may be a rather negative reason-that there are

a lot of people still in places of responsibility who know the terrible results of not doing it. They remember what happened in the 1930's. I was reading a book this morning which pointed out the awful effects of economic'nationalism running mad. It pointed out that in 1929 Germany, Italy and France imposed tariffs on wheat amounting to as much [DOT]as $1.83 a bushel. The result was that in the succeeding five years 600,000,000 bushels less wheat were imported into those countries than in the previous five. The competent writer of this book reckoned that that cut d6wn the purchasing power in this country by some $200 million per annum.
We remember these fantastic things and any sensible man wants to do everything possible to get away from them.
In the second place we have moved into a world where, although there are perhaps a lot of grandiloquent and more or less irresponsible things said about full employment, not only, public conscience but political necessity demand that the state shall never stand by again and see unemployment in a big way without using all the resources of the state to prevent it. We have this great hope, particularly when we look at the United States-if you have prosperity in the United States, then the thing will go. If you have prosperity in the United States you will have trig imports into the United States; if you have big imports into the United States, that is half the battle because that will get the wheel turning everywhere.
You have only to look back to see what happened to British exports in 1929, 1930 and 1931 when the United States went flat. British exports went down by fifty per cent. There you have it.
May I come back to Keynes; I do not want to be tiresome by quoting him but, after all, Keynes is considered, as I said a few minutes ago. to be a very great expert. He has been the best prophet on these matters that we have had and he has the great advantage of having lived last year for several months in the United States. He says:
All the most responsible people in the United States and particularly in the state department and the treasury, have entirely departed from the high tariff, export subsidy, conception of things, and will do their utmost with, they believe. the support of public opinion in the opposite direction. That is why this international trade convention presents us with such a tremendous opportunity. For the first time in modern history the United States is going to exert its full powerful influence in the direction of reduction of tariffs, not only of itself, but by all others.
I should like to give one little illustration culled from yesterday's press which shows the difficulty we are running into, because of

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the mixed-up world we havq now where the individual who is trying to do business finds himself cribbed, cabined and confined at every turn. I read in the New York Times an unfavourable reference to a stepchild of the Minister of Trade and Commerce (Mr. MacKinnon), the Canadian Commercial Corporation. The New York Times takes a rather dark view of that, the minister will be glad to know. This article states that the operations of this corporation will be unfair in connection with ordinary trade movements, and it quotes one individual as follows:
The important thing, one exporter declared, "is not what the Canadian corporation is set up to do, but that it is set up at all."
I am not going to labour this, and incidentally I should point out that the report is quite fair because it gives the minister's explanation when it says:
According to the Canadian Minister of Trade and Commerce, the commercial corporation is intended to take over the various functions of making purchases in that country for foreign governments and LTNRRA; to assist private enterprise in obtaining essential supplies from former enemy territories, and to provide machinery to purchase sugar, tea, oils and fats, which are under international allocation or foreign government control.
I am not complaining about that; I am only mentioning it to show what a fantastic world we live in. This morning I talked to an exporter who had been groaning under these restrictions. He said, "We exporters are not a lot of dumbells; we are ready to do business, but when we want to we have to go to this board and we get wound round and round with red tape." Perhaps that is not a criticism of the board, because what else can it do? We all know that when you get a board and put a man at the head of it with a lot of people underneath him, the rest of them cannot assume any responsibility. Do not let us fool ourselves about what happens when you get a board like this. What you do is to set up a little kingdom-perhaps it will become a government secret and be forgotten by the cabinet. I understand that this board is presided over by an able and energetic man who got his training under the Minister of Reconstruction (Mr. Howe).


Louis Orville Breithaupt: Probably a good Tory.


James MacKerras Macdonnell: All the better if he is, except that if he is a good Tory he will be a man of energy who will want to do a good job, and doing a good job will mean doing a big job. Whoever this gentleman is, and I do not know his politics, no doubt he will be faithful to his minister. If that is so he will have a great desire to exercise power; he will have a great desire to push other 63260-50
people around. My feeling is that that board will go on and on acquiring more and more power, unless some strong person, unless the Minister of Trade and Commerce keeps his hand on it and prevents it from doing so. I am not joking; that is what happens when you put a man on a board who wants to do a job. When you have a man who thinks he can very easily make himself believe that he knows more about it than anyone else, especially when other people have to come and do double handsprings before him. He may begin to believe that all these business men know nothing at all and he will want to stay there as long as possible. That is the sort of thing we should be trying to get away from. That is the sort of thing we shall begin to get away from if this agreement, which permits a reasonable freedom of action, is carried.
I want to repeat myself just briefly and I promise not to say it all over again. There will be difficulties; there will be objections raised. Incidentally, I am only discussing the principle and I may be raising objections to certain details. The alternative which Keynes outlined is, to me, unthinkable. It is an alternative which leaves Canada, as I say, to be ground between the upper and nether millstones. I hope with all my heart that in this debate we shall be able to consider this matter from the point of view of the true economic interests of Canada. I believe that if it is rightly considered in that way there is only one answer.


Major James William Coldwell: Mr. Chairman, I do not propose to make any extended remarks this afternoon in connection with the statement that has been placed before us by the minister, except to say that I believe that the putting into effect of these agreements will be beneficial, not only to Canada but to the entire world. Therefore we are prepared to support this agreement, reserving to ourselves the right to make inquiry into details to understand it better. We should, not only in this house but throughout the country, consider agreements of this sort in a more realistic way.
It seems to me that all of us at times are under what I might call a money illusion. We think in terms of money and we think in terms of financial agreements and financial returns from those agreements. As a matter of fact, what we are actually doing is to send, in this case to the United Kingdom, certain goods which she requires and which she cannot herself produce. If we are to do the same thing for the other nations whose loans have been mentioned this afternoon, and these loans are to be repaid from 1946 to 1976 or from 1949 to 1979, as the case may be,

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we shall if we are wise, if we have the ability to do so in spite of the contradictions of our present economic system, import into our country not pounds and shillings and pence or francs or any ot-her foreign currency, but quantities of goods which will enable us to raise our own standards of living. That is what agreements of this sort should mean. In this time of necessity we need to help rebuild the economy of the world and to assist our best customer to place herself once more in the position of being able to take from this country goods which she will ultimately repay in goods which we shall receive from her or from some other country obligated to make payments to her, and we should so arrange our affairs that we shall be able to take these goods and use them for improving our own standards of living.
The hon. member for Muskoka-Ontario (Mr. Macdonnell), who has just made a very fine speech about the matter, said a few moments ago that during the war we taxed ourselves and borrowed from ourselves as we never taxed and borrowed before. But is it really true that we accomplished the miracles we accomplished during the war just by taxing and borrowing from ourselves as we never did before? That is not true. We accomplished those miracles by producing as we never produced before. Taxing and borrowing money? Money meant nothing at all during the war. It was the production of goods for the winning of the war that counted; because we produced as we never produced before we were able to accomplish the wonders we achieved during the war, and so long as we are able to maintain those high levels of production we can continue to perform miracles in supplying the nations with the goods which they need in order to recover their economy and at the same time help to raise our own standards of living in this country by improving the housing situation and supplying the various other things we ourselves need at the present time.
One of the difficulties is this. Never at any time have the producers of our country had the means to use the goods which they produced or the goods that are returned to us in exchange for the goods which we produce and export, and consequently the time comes when we find ourselves in the position of having to safeguard our economy, as it is called, and we endeavour to build a wall around ourselves. I was delighted to hear the hon. member from Muskoka-Ontario speak in the way he did this afternoon about opening up the channels of trade. That is indeed refreshing coming from the party with which

he is associated. But may I add that even to-day when I pick up articles or read speeches by friends of my hon. friend I see that they insist on the necessity of retaining the imperial preferences and the Ottawa agreements. Yet, if ever agreements were made that were restrictive of international commerce it was the Ottawa agreements.
*An hon. MEMBER: They made reductions.


Mr. COLD  WELL@: There we have an interruption from the same party discounting the words used this afternoon by the hon. member for Muskoka-Ontario. If we are to have a free flow of trade, we can never have it by building a wall around Canada or around the association of nations known as the British commonwealth, and one of the reasons why I am prepared to support these loan agreements is that they will tend to open up world trade.
I am not unmindful of the fact that these agreements, so far as Canada is concerned, can be successful only in so far as our great neighbour to the south follows intelligent international economic policies. Here I believe is the great danger, because the United States remains to-day an island of capitalism in a world that tends ever more to socialization or socialism, or whatever you like to call it. Those contradictions in the capitalist system in the United States will compel her in the long run to try to protect her own economy and her own standards, as she calls them, by keeping out goods from the rest of the world, with the result that we shall have deepening unemployment.
I did not want to introduce any discussion of the United Kingdom budget but my hon. friend asked if Mr. Dalton was a socialist. I have known Hugh Dalton for a long time and I would say he is a pretty thorough-going socialist in his thinking and in his views. Let me point out to my hon. friend that I shall be quite content if the Minister of Finance (Mr. Ilsley) here in his first full year's budget after the war follows Mr. Dalton's example. Mr. Dalton has relieved entirely British income tax payers in the lower brackets to the number of two and a half million people, and if the Minister of Finance here will relieve our income tax payers in the lower brackets and restore the pre-war income tax exemptions in this country, that will be an instalment of income tax relief which we shall be very glad to welcome in this house.


James Lorimer Ilsley: Would the hon. member be content if I took the English exemptions and took the excess profits tax off?

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Major James William Coldwell: No. My right hon. friend asks me if I am prepared to accept the English income tax exemptions and I answer no, because our economies and social services are so different and always have been.


An hon. MEMBER:: Oh.


Major James William Coldwell: Yes. We are making loans to Britain at the present time. Do not forget that we are a rich country and that the British people are compelled to dig down deeper than we are. Nevertheless they have restored the pre-war level, at least of income tax exemptions, and yet we, a rich country, have not restored the pre-war levels. I say that if the Minister of Finance will do that in his 'budget we shall have a word of commendation for him. Let me point out, too, that the British have retained the super-taxes on high incomes; let us retain them too. They have increased their succession duties; let us increase them too. Then see how my hon. friends to my right will greet such a budget. It is true that the British budget provides that the excess profits tax will be removed at the end of the year, but it retains the war profits tax of five per cent. Let my hon. friends approve the taxation of profits too, and then we shall be more on common ground. It is no good to cite Britain as an example unless one states exactly what is happening there, and it is time we understood just exactly what they are doing to implement their policies.
In almost the same breath the hon. member made the statement that we dare not go back to the conditions of 1930. It is true that we dare not go back, but I believe that we are headed for those conditions under the policies now being put into effect in North America. The hon. member for Muskoka-Ontario says that if there is any tendency to go back to the conditions of 1930 we must use all the powers of the state to see that that does not happen. "Use all the powers of the state"? But we find my hon. friends demanding at the same time that controls shall be removed, that the powers of the state shall be curtailed. That would prevent us from doing the very thing he wants, using the power of the state to prevent a recurrence of the conditions of 1930. I find it very difficult to understand the logic of some of my hon. friends.


Gordon Graydon: Do not blame that on the logic.


Major James William Coldwell: There is no logic in it. It sounds well, but when you pick up the speech and read it the day after, it will appear like a good many things that you have said the night before appear the day after.
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So, Mr. Chairman, all I want to do is to say that when the proper occasion arrives we shall have more to say about this, but meantime I believe that the agreement entered into is, in the main, a good agreement and we are prepared to give it our support.


Mr. BLACKMORE:: First of all may I congratulate the Minister of Finance (Mr. Usley) on the excellent presentation which he has made. Since I have been here I do not think he has ever said anything in the house which I could so heartily support as the speech which he has just delivered. One of the main reasons why I can support so enthusiastically what he has said is that he is finally, as the hon. member for Rosetown-Biggar (Mr. Cold-well) points out, on a goods and services basis.
If I recall correctly, the minister did point out that it would be impossible for the British people to get their pound up to value and keep it stable unless they had this loan; and this loan is a loan of goods. It is the goods and services which a people can produce that make for the stability of their money. Once the whole world begins to see that, it will begin to look at this situation which so grieves the hon. member for Muskoka-Ontario (Mr. Macdonnell), not as a completely bewildering and incomprehensible puzzle, but as a labyrinth from which there is a way out to be found.	[DOT]
I do not propose to discuss this matter at length because, as the hon. member for Rosetown-Biggar points out, there will be plenty of opoprtunities to have much more to say as we go forward. But I should like to point out three matters which, in my judgment, ought to be borne in mind in dealing with this loan. I will discuss it briefly from three points of view: first of all, from the point of view of defence; second, from the point of view of good business; and third, from the point of view of common decency and national self-respect.
We are in a world of grim realities. In our own lives we have seen two wars. Who can say that we shall not yet in our own lives see a third war? Britain has saved us twice in the memory of those in this chamber. Who is to say that we shall not need to have Britain save us a third time?
Canada is a member-if one may use an athletic expression-of the British commonwealth and empire team. Thus far this team has won every series. The United States has thus far played in our team as a star, and Great Britain has also been a star player in the team. Great Britain has been seriously injured in the last series, and we must get
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her back into good condition; we must make her fighting fit again. Fighting strength in these days depends more and more upon fro-ductive capacity, economic strength and financial strength. If, then, we are to restore Great Britain to a condition of fighting fitness we must restore her economically and financially.
Just a few words regarding the general situation which Britain faces. What do the British people do to make their living? There are in the neighbourhood of forty-seven millions of them in a small island which has not the resources to support them. What do they have to do? Well, there are several lines of activities in which they engage to make their living. First of all, they produce what they can from .their own resources and they manufacture what they can from their own resources. Nest, they export as much goods as they can manage to manufacture and sell to pay for imports. Next, they depend on income from foreign investments. Next, they depend on income from carrying services which they have rendered with their merchant ships. Finally, they depend on the interest on financial loans and on insurance which the British have a good deal to do with.
What has happened to Britain? The Minister of Finance gave, I thought, a very fine and comprehensive picture of what has happened to Britain. He could have gone into great quantities of detail, which perhaps it was unnecessary to go into because hon. members, generally speaking, are well informed. But it would be a good thing to recall at this time that a tremendous amount of Britain's industrial capacity was destroyed during the last war. Many of the plants were actually bombed. A great number of British industries were changed over from a peacetime basis to a war-time basis; and the British were given as their part in the team the very task of changing their industries over from a peace-time basis to a war-time basis and were dependent upon the United States for their peace-time production. This is why the British were hurt so seriously when lease-lend was cancelled immediately at the close of the war.
Another important matter is this, that for about six years the youth of Great Britain have been trained in producing war material and consequently lack the skills and the facilities necessary to produce peace-time goods. Meanwhile a good many of the techniques in connection with peace-time production have been changed, so that even some who were skilled do not find themselves exactly qualified to produce at the present time. That is the first thing.

Then, with respect to British foreign investments, they have lost a tremendous amount of those foreign investments because they had to liquidate them to get raw materials with which to fight the war. Consequently, as the Minister of Finance points out, they can no longer depend on them to anything like the same degree as a source of income.
Then, at least one-third of the carrying ships of Great Britain have been destroyed in the war. They have been sunk or otherwise lost; they are not there; consequently the British are not able to use them as a means of deriving income.
This is only a part of all that has gone on. One could go into much greater detail. But the result of the whole study would be to show that the British capacity to produce goods is seriously impaired; and if we are to restore the British to the position in which they will be able to fight again in case they have the need to fight-and they may have to, in a very short time-we shall have to make every possible effort to see that they have the goods necessary to enable them to restore themselves to a high degree of productive capacity and financial strength.
What can Canada do about this whole matter? Some of us are beginning to suffer a little because of a shortage of goods, but I do not think many of us here in Canada have suffered much so far. There are some things we have to get along without. But the trouble in Great Britain is that the people have to get along without nearly all the things we enjoy. It is astonishing how seriously their diet is impaired. It must be borne in mind that these people have been enduring these conditions for five years. If we do not advance the goods to them they are going to have greater austerity than they had even during the war. How can one expect people who are impaired physically by malnutrition or undernutrition to be capable of a high measure of production. All that I am saying at the present time has quite obviously to do with defence. If Britain is to be strong and ready to fight again in case of need we must help to make her capable, and the only way to do that is to supply her with the goods which she cannot produce and which she can obtain only by trading exports for them.
I am going to sum up by making this statement. It is expedient that Canada should aid Britain to be strong. It is expedient that we should grant this loan, and greater loans still, if the British find that they need them. It is expedient that we should grant the loan so that Britain may be capable of being our ally



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in case of another war, that she may be a good market for Canada in times of peace, and that she may contribute to the general prosperity of mankind.
I am sure that every hon. member is well aware that many of the goods Britain produces are of extreme importance to the other nations of the world, and that there is a high demand in the world for those goods. The world cannot have as high a standard1 of living as is possible unless Britain is able to produce such goods. If, by reason of the want of a loan such as this, Britain cannot produce *those goods, the result will be an impairment of the general standard of living, of well-being and of prosperity throughout the world. The Minister of Finance pointed out that Britain was our A-l customer. She is indeed our A-l customer; and she was the A-l customer of thirty-one nations before the war. How many people know that? She imported more than any other nation of the goods produced by thirty-one countries. To what a tremendous ' extent, then, the general prosperity of the world depends upon the prosperity of Britain, and upon her capacity to import goods and to pay for them, must be obvious to all.
Finally, I think we all agree that Canada is able to lend the money. We may be afraid of the debt-I am afraid of the debt-but there are things we all dread more than debt; otherwise this house would not have sat calmly by and encouraged the government to incur fifteen billions of debt while the country was at war. Yes, Mr. Chairman, there are things we fear more than we fear debt, and there are things in the future that we need to fear more than we fear the debt that will be incurred. If we have to raise many billions as debt to pay for goods, as long as we are struggling with the present financial system, let us raise the money and supply the goods to Britain.
There is another aspect of the question that will have a strong appeal to every member of the house; that is the moral aspect. It is morally right that Canada should make this loan to Great Britain. In the first place, the war expenditures of Great Britain were proportionately greater than those of any other allied country. Everyone knows how we naturally react to the spectacle of any one member of the team bearing a heavier burden than the rest. It is beneath our national self-respect to allow Britain to continue to bear a greater burden financially than we are bearing.
Taxation in Britain was on a scale never before reached in any country in the world, I am told. Can we sit idly by and witness
such a state of affairs and do nothing about it and still feel that we can respect ourselves nationally?
Britain bore more than her shdre of the international financial burden of the war. She provided more goods on mutual aid to Russia, the United States and other nations of the world. She bore a greater international burden than any other one of the allied countries. Can we contemplate that without a twinge of conscience?
Britain faces a more difficult international trade position to-day than any other nation, as the minister has well pointed out. We naturally wish to help those whose ability has been impaired. Notice how readily, in any community, people contribute to the rebuilding of a home that has been destroyed by fire, especially when the sufferer is poor. Surely the same principle works internationally, especially when the country affected is a very close friend.

and certainly Britain has never done anything which should deprive her of a title to the friendship of the Canadian people. For the reasons I have outlined, M.r. Chairman, I wish to state, that the Social Credit group will enthusiastically support this loan to Britain.
Mr. CARDIN:: Mr. Chairman, at the risk of being alone I wish to register my opposition to the principle embodied in the resolution. I do not propose to go into a detailed discussion of the principle of the bill which will be based on this resolution, but I desire to take this opportunity of expressing my strong opposition to that principle. I wish also to express sentiments that I have voiced in this house on previous occasions with reference to proposals of this kind.
History will have to take note of the fact that when it comes to the consideration of proposals relating to what is called the British empire there is no difference between one side of the house and the other. All the members of this House of Commons, with very few exceptions, always agree when a proposal is made to help to sustain the prestige, the grandeur and the prosperity of the United Kingdom.
We have heard during the last few days very beautiful words and strong expressions of opinion about Canadian citizenship. Well, if you bring these principles, these ideas, together with the sentiments that have been expressed this afternoon, under serious consideration, I think you will find a strong and a definite conflict of ideas and of principles.
Without any intention of offending the views or the sentiments of anyone in this house, I persist in calling this proposal
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another gift which is being made by the small fellow to the big fellow. The sum involved is, $1,250,000,000. What is that in the exchequer of the United Kingdom? A drop of water in the bucket, if not in the sea; and we get all excited about it, as if the whole world were going to crumble if we did not grant this new gift to a country which is ten times, fifty times richer than we are.
One has only to look at the map of the world to see the interests that the United Kingdom holds all over the globe wherever there is something of any value in the soil. This gift that we are proposing to make is out of proportion to our capacity for paying. The last speaker said that Britain was taxed to a higher degree than any other country, and he added, "I am told". If he will look at the figures he will discover that, in proportion, Canada is the most heavily taxed country of all those that participated in the war, and we had less interest than any other participating country. It is beyond our means, beyond our capacity, to make a gift of this kind at this particular time when we need so many things to help our country to recover from the false economy of the war to a reasonable and fair and durable economy for the time of peace.
We were told by the hon. member for Muskoka-Ontario (Mr. Macdonnell) who made an able speech-he is always impressive when he gets on his feet and argues on any question-that if we did not agree to this proposal we. might find ourselves between a financial organization at the head of which would be the United Kingdom, and the United States organization, and that Canada would be placed in a position to suffer very much if we did not agree to help the United Kingdom to revive her trade and to revive at the same time the whole trade of the world. I should like to hear any hon. member of this house state seriously that all that Canada did during the last war is to be lost if we do not agree to this last loan or gift that w'e are asked to make to the United Kingdom.
We were told by Britishers themselves that up to the present time Canada has done splendid work. Some of them have said, somewhat lightly, but with a large amount of truth: "We should not ask Canada to go any farther than what she has up to the present time, because the effort that Canada has made is beyond all expectation of any reasonable citizen, even of the United Kingdom." I do not propose for the moment to discuss certain arguments that have been advanced here. I reserve for a later day the right to go into more detail and make more compre-TMr. Cardin.]
hensive comparisons between our position and the position in which the United Kingdom finds itself at the present time. At the moment I do not want to delay the proceedings of the committee. If the resolution passes I ask that it be passed on division, because I do not agree with the principle embodied in it. I am convinced that there is no necessity, and no necessity has been shown, for Canada to enter into such an agreement on terms which are more favourable to the United Kingdom and more difficult for Canada than the terms of the. United States loan. We still have in our ears the voices of citizens of the United Kingdom advocating that the proposed United States loan should be refused. In the circumstances I wish to make my position clear and definite. In the past I have been opposed to the renewal of such gifts. At first they were properly described as gifts. Later on, they were called by another name-mutual aid. Now it is called a loan to be reimbursed in fifty years from now. Really it all amounts to the same thing.
The agreement contains a clause waiving all interest if at a certain period in the economic life of the United Kingdom they feel that they are not in a position to pay the interest. Well, I am opposed to that.
I think it is time that Canada took a definite step and spoke for herself instead of speaking for the British empire as we are doing all the time. Where is the Canadian spirit in this house? There is none.
A few days ago some hon. members spoke about hyphenated names. Heavens, if the bill which the Secretary of State (Mr. Martin) introduced to create a Canadian citizenship should pass, we shall be in the very same position of having a hyphenated name- Canadian citizen-British subject!
We are part of the British empire, and I claim, without any desire of offending the views of anyone, that we are not a sovereign country. We may be by strict interpretation of certain laws; but in practice we are to a large extent what we were before, colonials. We have somewhat increased the liberties /that we have enjoyed in the past; certain things are not imposed on us any more by the front door, but suggestions are made to us through the back door and we obey them. Those things happened during the last war and there are indications that they are still continuing throughout; the order is coming from outside in all things .relating to our economy, finances and commerce.
I am not afraid of the future of my country, even if my country is left alone. Even if my country is left between the sterling bloc and the United States I have enough confidence
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in Canada to feel that Canada is capable of coming through her difficulties and achieving a prominent place among the important nations of the world, even though she is not assisted by the one side or the other. Let us be ourselves; let us think for ourselves, and let us think of our future, the future of Canada. It is with these views, not complete I admit, and not the result of any preparation, that I express my opposition to the principle embodied in the resolution. I would agree to the passing of the resolution, but with the conventional term of "on division".


Thomas Langton Church: I should like to see the
resolution go through before six o'clock and the bill introduced. I compliment the government on this particular resolution. Notwithstanding what the preceding speaker has said, it follows out the principle laid down thirty years ago by Sir Wilfrid Laurier and Mr. Fielding when they offered aid to the mother country in the form of preferential trade, without asking anything in return. The resolution which precedes the bill will assist the mother country which suffered so terribly in the war.


Some hon. MEMBERS:: Six o'clock.


Thomas Langton Church: I should like to see the resolution pass. The principle of the loan is exchange of goods and services for goods ' and services. It is not like the United States loan, exchange of goods and services for debt or gold. I should like to see the government go farther and offer further aid later on, and with what Australia and New Zealand have done to assist the mother country at this particular time, the United States loan could be done without. I should like to see the government thus go farther if necessary.
It is good business, first, last and all the time, as everybody will admit, because Britain was always our sure and best customer. The resolution has showrn what Canada has done.
It will give aid to the mother country as aid from Canada is being given France to recover herself.
In conclusion, I may say that under paragraph (d) I am glad Canada is cancelling the debt for the air scheme. I believe that is due the mother country. Our army, navy and air force were unprepared. Britain, save for the aid of the dominions, for two years prevented an invasion of our shores, which would have cost us much more than $400 million.
I hope the government when they borrow this sum of $1,250 million will do something to lessen the cost of these loans. As we know, we have paid heavily for some loans. We can borrow by private loans and negotiations,
or we can call for tenders. The fetter method has been proved most successful in Washington. We saw7 an example the other day where a company from Cleveland secured refunding at some cost of the debt of the whole city of Montreal.
I believe the people of Canada, Australia and New Zealand will rejoice to see that the dominions are as an economic unit, coming to the help of the mother country in her hour of trouble.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.


Thomas Langton Church: I have great admiration for the hon. member for Richelieu-Vereheres, but I am sorry that he has taken the stand which he has with regard to this particular resolution. As I see it, such a position will be regarded by others as though there was a division between us at a time when unity is necessary. We should hang together as we did during the war, and did so well, or we shall hang separately and the British empire will be no more.
I supported the cause of France and the defence loan. The Minister of Finance made very fine statements regarding both loans and the resolution is an illustration of equality of treatment. The minister should be commended for the stand he has taken. We must not forget that when the war first started we were without an army, navy or air force. Our safety depended mainly upon Britain's supremacy of the sea. That saved the St. Lawrence river and the maritimes, Quebec and Ontario and the eastern provinces from the awful invasion we might have had. Axis submarines did later get up as far as Gaspe and near Riviere du Loup.
I always rejoice in the fact that we should always learn something from the lessons of history regarding this particular resolution. As I say, I have supported 'both loans, the one to Britain and the one to France. It is good business to aid Britain, our best customer. As has been said by a great historian, W. McNeil Dixon:
Civilizations arise, and continue to exist-and all history is the witness to the truth-when conditions are hard only when they are continually threatened, only when they are determined to maintain and defend their rule.
As I see it. in many places war is still going on and we have yet to win the peace. As I would say in answer to the hon. gentleman
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who preceded me, history has taught us something about the stand he has taken. As this historian says:
They (the nations) decline and fall when the external pressure is removed, or rather the inner spirit decays. The surrender may disguise itself in many forms, of which humanitarian sentiment is one. "If a country," wrote F. S. Oliver, "will not stand up for its rights, it must surely lose them. The spirit of giving in is the most fatal disease to which nations are subject, and it is apt to attack them, like a cancer, when they have arrived at the meridian."
We rejoice in the many freedoms we have had in this country from time immemorial. We have had all the freedoms set out in the Atlantic charter. I wish to compliment the hon. member for Richelieu-Vercheres upon being such a splendid citizen of this country. I do not think anyone in the house admires him more than I do, I believe he will regret not supporting this loan. There is one lesson which he should leam and which he apparently has forgotten. As I said, I supported the French loan because I think we can help to rebuild that great country. The minister has done his duty in that connection. I support the loan to Britain because 1 think it is good business and will mean a great deal of business. As this great historian at Glasgow university, Mr. W. McNeil Dixon, in the Gilford Lectures, "The Human Situation," said:
You may, indeed, conclude that you will have neither part nor 'lot in the rivalry, you may wash your hands of responsibility for the madness and folly of mankind, you may renounce the contests, and refuse the challenges of ambitious competitors for your place and power, you may elect to leave its future to the bullies of the world.
Is that what we are going to do? We are not out of the woods yet. Are we going to leave our future to the bullies of the world? I continue:
But it should be obvious that if the heart be set on nothing the earth contains or offers, nothing in the manner of the earth will be done there.
I cannot forget how the enemy came past St. Pierre and Miquelon, how they were found in the many Inlets in our great gulf. We had a closed session of the house regarding that matter. After the fall of Dunkirk and after Dieppe the United States thought Britain was done for and they asked that Britain should not surrender her fleet to Germany. I have always had a great deal of respect for hon. gentlemen from Quebec. I know nearly all of them. Many of them come to our city and they find that there is no bigotry there. There is no racial or religious jealousy, because our people are hard-working and they find they must hustle too much to make a living

without bothering themselves about smaller matters. We should try to carry into peace the same unity as we had in war and not forget that we might have been invaded, only for Britain's aid and the aid of the dominions. The United States thought Great Britain was done and that Canada was done.
I believe the hon. member for Richelieu-Vercheres and others will regret the stand they have taken on this particular matter. The United States took the same stand at the time of Dunkirk; they thought Great Britain and her dominions were done. Let me quote one more paragraph in conclusion to show our hon. friends they are wrong and will regret their stand because history always repeats itself.
When England's day comes to an end the principles which have contributed to its coming, Christian, pacifist, or whatever they may be styled, will not thereby be strengthened. On the contrary, such is the irony which pervades things human, they will have brought about their own eclipse, their own dissolution, and the triumph of the opposing principles. The decline and fall of England, which will rejoice her enemies, will not be England's decline and fall only, but of all for which she stood, and not till then shall we know the extent of our miseries. I, at least, am not of the opinion that humanity, justice, freedom, no, nor Christianity, will be gainers in that fall.
I hope that we shall have little further discussion of this loan, although I respect and appreciate the opinions of the younger members who come from the great province of Quebec. We have always had absolute unity in this country and the people of my city will never forget the land of France, where, in the last war, over 6,000 of my fellow citizens lie buried until resurrection day. They went to the aid of France with the 1,000,000 men who went from the British dominions, 130,000 of whom fell in the war, and they went there as citizens of dominions enjoying their own sovereignty, their own autonomy, their own independent status.
We have in the Minister of Finance a gentleman who has always been very kind and courteous to all the members in the house. He has borne a lot of the burden of the day and I rejoiced to see him honoured by His Majesty on the 1st of January last. I believe that history will record that he played a noble part in trying to save the mother country by this resolution at the most acute hour in history.
I should like, in conclusion, to quote one paragraph from Mr. Churchill on empire unity:
Let no man underrate the abiding power of the British empire and commonwealth. Because you see forty-six millions on our island harassed about their food supply, or because we have

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difficulty restarting our industries and export trade after six years of passionate war effort, do not suppose that we shall not come through these dark years of privation as we have come through the glorious years of agony, or that half a century from now you will not see seventy or eighty millions of Britons spread about the world and united in defence of our traditions, our way of life and of the world causes you and we espouse.	_
Britain and her dominions entered the war looking for nothing. They thought of nothing but the freedom of the human race, French and English. We have always, all races, got on splendidly together in this country. When this loan from Canada to Great Britain was announced in the British House of Commons the news was received with applause and it was also applauded in New Zealand and Australia. We are now on the eve of the coming of our new governor general. I believe we have in him a man who will unify all classes of people in this country. He comes straight from the battlefields where he fought side by side with our soldiers he led in the glorious cause of freedom.


Jean-François Pouliot: Mr. Chairman, I am very sorry that I cannot agree with my hon. friend the member for Broadview any more than he himself did agree with the speech delivered this afternoon by the hon. member for Richelieu-Vercheres. This loan raises no question with respect to the new governor general. What, we have before us is a resolution concerning a so-called loan of $1,250,000,000 to Great Britain. I am speaking in this debate because as a member I have a right to speak and no one can deprive me of that right unless the rules of the house are changed. I will protest very strongly against any change in the rules because I enjoy my rights and I want my colleagues in this house to enjoy their rights.
I do not see why we should pass this measure without scrutinizing it, and the members who would follow that course will be blamed when they return to their constituents. Opinions are free. One may be for the measure; another may be against it, and another may be open-minded, as I am myself, waiting to decide how I should vote upon it. But my right to speak now on this measure is as unquestionable as is the right of any other hon. member, and I say again that I do not see why we should rush to put this measure through at full speed.
A lot of surprising things have been said. To-day I saw among my clippings one from a Montreal daily of February 18, 1937, and I shall read only one headline to show what bunk is talked by statesmen. I quote:
U.K. will not ask dominions to help pay defence cost, Chamberlain tells house.
Everyone cheered when he said that, just as people cheer when just as foolish utterances come from statesmen here or anywhere else. Was he a good prophet, as the hon. member for Muskoka-Ontario called Lord Keynes?


Major James William Coldwell: What paper was my hon. friend quoting from?


Jean-François Pouliot: I will send it over to my dion. friend.


Major James William Coldwell: I should like to know the name of the paper.


Jean-François Pouliot: The Montreal Gazette. The type is big enough for my hon. friend to read it across the aisle.


Major James William Coldwell: Almost.


Jean-François Pouliot: Chamberlain was not serious. He was talking bunk to the house, and he was cheered-hurrah, hurrah, very fine! They have a curious way of understanding things in England. I, will quote something else which was said by another former prime minister of Great Britain, Lord Baldwin, in a book that I will pass over to any hon. member who wants to read it. It is important that we understand their state of mind. The quotation I am about to give is from a speech delivered by the Right Hon. Stanley Baldwin at Empire day and Coronation banquet of the Combined Empire Societies, London, on May 24, 1937. It is from one of the dozen last speeches that he made before retiring as prime minister. He said:
If you will only do as I have done, study the history of the growth of the constitution from the time of the civil war until the Hanoverians came to the throne, you will see what a country can do without the aid of logic, but with the aid of common sense.
That I cannot understand-without logic but with common sense. For me, common sense is logic, but for him it had a different meaning. He went on:
Therefore my next point is:	Do not let us
put any part of our constitution in a strait-waistcoat, because strangulation is tlie ultimate fate. And I would say one more thing:	Don't
let us be too keen on definition.
I do not think the measure now before the house will put this country in a strait-waistcoat. I think it will put this country in a strait-jacket.
The only difference between the right hon. Minister of Finance, the hon. member for Muskoka-Ontario and the hon. member for Rosetown-Biggar is that the latter is more intimate with Mr. Hugh Dalton. That is the only difference between them. They all think similarly. The hon. member for Leth-
78b
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bridge, the former leader of the Social Credit group, is, if I correctly understood what he said, even more enthusiastic about these measures.


Mr. MacINNIS:: You have no doubt of
that.


Jean-François Pouliot: Yes. I do not wish to
offend my hon. friends who are just in front of me, but I do not believe in the present government of Britain, and I believe also that all they said about the nationalization of the Old Lady of Threadneedle street is just for the gallery.


Angus MacInnis: Do you believe in the
present government of Canada?


Jean-François Pouliot: I say this for the reason
that the former governor has been chosen as governor by the present government. His name is rather funny; it is Lord Catto. Never mind; Catto was good enough for Churchill and he is good enough for Attlee. The same old system continues.
The main reason why I am opposed to the finance schemes of the government is that the experts who advise them are those whom I denounced twelve, thirteen or fourteen years ago when they were appointed by Viscount Bennett, then Prime Minister. They were chosen by a Conservative prime minister and chosen by him alone. I do not know whether he consulted the leader of the Liberal party about the matter; I asked the question and Mr. Bennett said No, and that was the reason for me that it was Yes. But the fact is that those great experts were appointed under a Conservative government, and sometimes I was alone in denouncing them. I was often rebuked, even by my leader, because I denounced them. At that time there was a Conservative government in charge of the business of the country, and therefore things went wrong much sooner than they do when the party in power is the Liberal party.


Angus MacInnis: Bjit still they go wrong.


Jean-François Pouliot: It does not mean that
they are any better. However, I will not mention them by name. My hon. friends agree with me.


An hon. MEMBER:: Just at this moment.


Jean-François Pouliot: But for ten years I was alone, in denouncing them by name and asking the government to fire them. I had no support, and I regret deeply that the leader of the C.C.F. group never supported me in removing these obstacles from the way. He was quite ready to describe the evil situation which was created by that intelligentzia, which

is similar to the one that brought revolution to Russia, but he stopped there. I notice that the hon. member for Regina City seems to be very alert; I hope he will give a tip to his leader at times to support me.
Let it be understood well, Mr. Chairman, that I am ready to support any measure to help the British people so long as that help serves that purpose. I have said so already. But I do not believe that we are now in a position to make a gift of such magnitude to a country which is called the mother country by those who describe themselves as true Canadians. I hope you will understand well what is my point.
A statement was made by one of the ministers yesterday or the day before, and last week, to the effect that it was impossible to help those who were suffering from any infirmity because it would cost too much. When the hon. member for Eglinton (Mr. Fleming) moved a resolution with regard to health, and the hon. member for Vancouver East moved one regarding old age pensions, they were told that we have not the means to provide this assistance. But now we have the means not only to finance the United Kingdom but to finance the sterling area. This is incredible. We cannot do it. We have not the backbone to do that; we have not at the present time the population to do it, and we have not the means to do it. When anyone wants to help those in need in this country, our own people, the answer given is, no, we cannot do it; we have not the means to do it. But when it comes to the financing of the . sterling area money comes so easily. It reminds me of all the reforms we were advocating before the war; it was impossible to get a satisfactory answer. But as soon as the war came all the sluices were wide open; the money flowed. It was easy to find money for the war, but it is impossible to find money for Canadians. If it is urged that family allowances are for the benefit of our own folk, the answer given is that if this measure does not pass there will be no more family allowances, and the people who have saved money, sometimes were forced to save money, to buy victory bonds, will not get anything when they go to the bank to change their coupons. That is not the way, I believe, in which discussion should be carried on upon a matter of such magnitude. I suffered humiliation because I accused Bennett of having lent $60 million to the Canadian Pacific Railway company without consulting the members of his cabinet, and the then Speaker called me to order, without having the right to do so, in spite of the rules of the house, which I knew much better than he did. However

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I made a concession for the sake of the party. At the time I denounced Bennett because he lent $60 million to the C.P.R., without consulting his cabinet. What about making a gift of a billion and a quarter to Great Britain without consulting the supporters of the government in this house? This I cannot understand, nor can I agree with it, because I am a Liberal and I believe we must stick together. We must be consulted before any matter of such importance is decided upon.


Mr. HOMUTH:: I thought you had a caucus once in a while.


Jean-François Pouliot: When I talk of Liberalism my hon. friend cannot understand anything.
What surprises me also is that in this time of distress, when we are told it is impossible to get any money for the poor, for those who suffer any infirmity, the Bank of Canada gets bigger and bigger. They have now bought two buildings for $1,170,000. They are growing up. Some day I will take the house into my confidence and tell my colleagues the story of the Bank of Canada, how it came on the programme of the Liberal party and how it was stolen from the Liberal party by Mr. Bennett; and if the Bank of Canada was ever amongst the fourteen points of the Liberal party I will tell you why. It was one more point to win Oxford and other by-elections. That is all. That is why the Bank of Canada has been put in the beggar's bag, with a few other things- just to offer something concrete to the electorate at the time.


An hon. MEMBER:: Your party would not do anything like that, would they?


Jean-François Pouliot: My hon. friend should not be scandalized; they do worse than that. But my hon. friends over there do not enjoy the freedom we enjoy on this side of the house in the Liberal party. If I were a C.C.F. member and spoke as I am speaking now as a Liberal I would probably be censured by the hon. member himself.


An hon. MEMBER.:: Oh, no.


Jean-François Pouliot: Well, then, the hon. gentleman is a Liberal. Now, Mr. Chairman, here we are being greatly generous. This is $1,250,000,000, and it is well arranged. There was an understanding between the United Kingdom envoys and the government and they fixed up their war claims. What it is we do not know. I did not expect the Minister of Finance to make a plea for the adoption, of the resolution this afternoon; I expected him to give a complete expose of the situation and to inform the members of the house of the situation. But after we had listened to him we knew no more
than after having read the agreement. I expected more details about the matter and I will tell him the kind1 of details I want.
In the first place, in this country we have what is called a temperate climate. We have not a tropical climate. But Great Britain has possessions in the West Indies; it has Trinidad, Jamaica, the Bahama islands. Why should we not put in our claim for these in return, as a guarantee for what we have been doing financially for them? It is not only a question of a a billion and a quarter; it is a question of all that we have done for England since the beginning of the war. I remember the first time the first billion dollars was voted. What was the reaction in England? What appeared in the morning press was that it was taken very calmly in England, and I as a member of parliament had1 to remind Mr. Churchill and Mr. Eden, after they had come here and forgotten to thank us for our help, our monetary help, in the very chamber that had voted these gifts. I reminded them of all this. At a meeting in the city of New York or Washington- one of them-where the Prime Minister of Canada was present, Mr. Churchill said that the help that Canada had given to the united nations, and especially to the United Kingdom, was massive. Afterwards, I said here in this house that evidently Mr. Churchill never failed to read the speeches made by Jean.-Fran<;ois Pouliot in the House of Commons. Why should we not have Bermuda? Why should we not have Jamaica, with its mm, its sugar, its molasses? Why should we not have the bananas of Trinidad? We should have something.


An hon. MEMBER:: We have no bananas.


Jean-François Pouliot: No, but something should be done. The matter is too sacrosanct to be discussed as a business proposition when Englishmen come here with their brief cases in which they put everything they can get in this country. They make several trips and have larger bags and cases, and all the stores in town are empty after a delegation has been here. Well, they do not talk of business; they talk of sentiment. But sentiment, sentimentality, does not exist in the mind or heart of an Englishman when he does business with someone, and if he saw7 anyone acting sentimentally-and Canada is the only country in the world to-day that does so-he would say, "That fellow is crazy".
I will not say that of anyone in this country, but I think it of this measure. I think it is silly and crazy. It is not only a question of having something territorial as a guarantee of what is being done and what has been done by Canada for Great Britain.
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There are other things too. There are securities, bonds and stocks now in England, controlled by foreigners. I will give a brief resume to show what they are; and every time it is the same thing. We are told that with this amount we shall redeem securities. A small amount, a small slice, a very small slice comes back to this country, and the , rest stays in England-I will tell the committee why-or is sent to the United States via Toronto. Here we have nothing or very little. Mark you, sir, over a billion and a half in securities, bonds and stocks is over there. The cartels should be owned in Canada by Canadians. Cartels make colonies out of dominions, as has been stated repeatedly.
There is still a large quantity of C.N.R. stock, securities; over 60 per cent of Canadian Pacific in London, Paris and Amsterdam, and they control, mark you, sir, Consolidated Smelters and Western Lands also to a large extent. There is Hudson's Bay, Lever Brothers, Lazard Freres, who are interested in so many concerns, Canadian collieries-my hon. friends from the west know what that is-the match combine of Bryant and May of London and Sweden, H. F. Ritchie and Company who control Eno's and lots of medicines, Red Rose Tea. International Nickel, Courtauld's Rayon Companies and C.I.L., besides others. There are municipal securities and bonds of Montreal and Moose Jaw and other places. When the directors of an organization like Canadian Industries Limited are Canadian they are just stooges to international finance. My hon. friends who listen to me now would fall from their seats if they knew who is the president of Courtauld's in Montreal. They will find it (in the book in the library.
British taxes are less owing to the allowance for the corporation tax and special allowances for what the company has paid. When the company pays 40 per cent it is deducted from the 60 per cent charged to the shareholder taxpayer. Here the charge is 60 per cent, without any reduction. I do not see why all that wealth which should belong to the Canadian people has not been brought back .here, just as all the stocks, securities and bonds of the Indian railways have been called back to India, not by Hindus but by Englishmen engaged in business there, and just as all the South African securities have been brought back from England to South Africa by Smuts, mark you, who is a dandy imperialist.
Britain has been planning how to carry on .f the loan were refused, and Britain insists that France pay all claims in gold. I kept something in reserve. It is an excerpt from the Financial Post quoting an interview with

Keynes. Canada has been giving help to thirteen countries, owing to the advice of these experts in whom it is impossible to have any trust. It is impossible for the farmers, for those engaged in lumbering or any other occupation to have any trucks, and what do I see? I see that Finland, a country with which Canada has been at war without sending a single soldier there, now receives Ford trucks built in Canada, though from the experience of all hon. members it is impossible to secure any trucks in our own country. How is it that they are sent as far as Finland, an enemy country, while we have not even yet made peace with -Finland? We send our trucks there; yet when farmers in any part of this country want trucks they have to beg them on their knees, and sometimes it is a very long time before they get a satisfactory answer. It is absurd. Why should we serve these countries outside Canada while our people are in need of these things? What I say now I could repeat anywhere in this country. I could repeat it in tory Toronto or anywhere else, and I am sure it would find an echo in the minds of all those who are patriotic enough to look at the matter reasonably.
I know some will say I am not a loyal Canadian because I want my people to be served before any stranger or foreigner. I think it is a shame that we should not look after our own people, who made such sacrifices during the war, in order to give benefits to enemies of Canada, to send help to thirteen other countries. We are supporting the sterling area. Is there anything crazier than that? It is a handicap to our trade. It is most difficult to trade with countries outside the sterling area as long as we are in it. What was the first idea of that organization? It was the German zollverein, at the time of Napoleon. It was a union between the grand duchy of Baden and Prussia, and at first it was a commercial union. There was no sense of business in all the war financing, and it is time to say so. I remember what Mr. Aberhart said about that kind of financing before he died. He said it was wrong, and he was right in saying it was wrong.
I speak with great sincerity, and the committee honours me by listening; but how is it that it is impossible to reduce taxation as it has been reduced in the United States, where last fall twelve million people were relieved from taxation by President Truman by the stroke of a pen, and in Great Britain, where taxation now has also been reduced? I wonder if the help we are giving to Great Britain now, which will increase the burden of taxation on the shoulders of our Canadian fellow citizens,

Loan to United Kingdom
will not help to relieve the people of the United Kingdom of their own burden of taxation. I do not know if hon. members have read an editorial which appeared in the Montreal Gazette of April 10, but if they have not I should like to read it for them:
The budget forecast for 1946-47 presented by the Right Hon. Hugh Dalton, chancellor of the exchequer, called for a decisive cut of approximately $7-5 billions, or thirty-one per cent in total outlay . . .
The only alternative would have been continuance of deficit financing ahd burdensome borrowing. But a firm retreat from such policy is marked by a drop of 68 per cent in the 1946-47 deficit compared with the past year.
Then it goes on to compare the United Kingdom and Canada.
Both countries levied the tax on a one hundred per cent basis during the war, but Britain led the way in dropping it to 60 per cent-at which level it now stand in Canada-and has now acted first to wipe it out entirely.
It will be said that Canada will meet with disaster, that it will be the end of the world if wfe change that agreement. No, sir. Trade nqust be free and it is a barter. I remember what was said by the Prime 'Minister (Mr. Mackenzie King) when he notified us of the appointment of our first and only consul general in the city of New York. He told us he would work in cooperation with the representatives of the United Kingdom. That is wrong, because Canada must be financially independent; Canada must be economically independent ; and we are not to be under the tutelage of the United Kingdom any more than under the tutelage of the United States in regard to trade. We must be masters of our trade; and if there is any difficulty between a Canadian and an Englishman the consul and the government shall stand behind the Canadian and fight the Englishman on the trade proposition.
I find it most unfortunate to have to say this. We are told here that there are to be new contracts for Canadian foodstuffs. Mr. MacLeod of the British United Press went to England during the war and came back with this news, which is clear and obvious to all. He said after the war is over, the question of trade will not be one of gratitude; it will be one of business; and if England can find cheaper goods in other parts of the world than in Canada, she will buy them there. That is normal; I do not disagree with it. What I find childish and silly is the suggestion that Englishmen, with their sense of business, will put aside centuries of tradition to adopt the views of the Canadian government and say, "After you, my dear Alphonse; after y-ou. my dear Gaston." One who takes
that view cannot have read a line of the history of England. I have the greatest admiration for Englishmen. They come here and they are the masters of the land; Canadians must be put aside when the Englishman says, "How do you do? Ho, ho; fine country, Canada." Every hon. member laughs, but every hon. member knows that is true. They come here as conquerors. Each Englishman who comes here to make a bargain with the Canadian government is like Julius Caesar when he went to Britain for the first time. He is a conqueror. He reminds me of the child who was writing figures on the blackboard. "11 pose zero et retient tout". That is the way it is done. It is a principle of business; it is the principle the Canadian government should-have.
Is it reasonable to think there has been last fall a lowering of taxation in. the United States to exempt twelve million people at the stroke of President Truman's pen, a reduction of taxation to that extent, and which is going on in England now; yet it is impossible to get a guarantee in this country that, bachelors, single people, will receive some relief, that their burden will not be alleviated to $1,000, and for married couples without children to at least $2,000?
The other day when a question was asked about a reduction in expenditures a minister answered: "There is no question of reducing taxation; the question is one of reducing expenditures." We hear hon. members in the Progressive Conservative party talk about reduced expenditures. I say to them this: Support us in asking at least something in return for those agreements signed not long ago.
How much was I abused during the war; how many times have I been called traitor when I asked only for a recognition of what had been done by this country! If I put my hand in my pocket I find there a sentence uttered by the Minister of Finance either last fall or last spring. I cannot conceive of his saying this, and yet he did say that Canada was not a creditor nation; that our people owed more to other countries than other ' countries owed to Canada. After that, how can he say that this measure is not a pure gift. The mutual aid bill, and all those measures were gifts. They were sentimental gifts, and that -was said in the house. If to-day we have some difficulty with the other united nations and if we have some difficulty with our own folk, because enemy -countries are favoured at the expense of our own, it is due precisely to the fact, that- not only is this country under the yoke of UNO, but it is also under the yoke of UNRRA, and we are not masters of our
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own destiny. When we fight for the recognition of freedom, not of single individuals, but the freedom of the country at large, we fight for the cause of each one. We fight for the cause of liberty. We fight against that octopus which is trying to control our national resources, the octopus of international finance which I have denounced repeatedly by name in this house, but without support. However, I hope that next time I do so I shall have the support of someone-at least that of my C.C.F. friend who was so nice to me just a minute ago.
I thank the committee for having listened, and I hope that my colleagues, whom I respect, will never think that one is biased because, although not anti-British, he is pro-Canadian.
(Translation):


Mr. RAYMOND (Beauharnois-Laprairie):: Mr. Chairman, this afternoon, the Right Honourable Prime Minister (Mr. Mackenzie King) asked members to refrain from an extensive discussion of the resolution since we will have an opportunity of outlining our objections when the bill is submitted for second reading. I will therefore postpone my remarks expressing my disapproval.
However, as the resolution embodies a principle against which I struggled all through the war, and which I feel all the more justified in opposing now that the war is over, I deem it proper to register my disapproval without delay.	,
.Looking closely at the resolution, we find that the Right Honourable Minister of Finance (Mr. Ilsley) is introducing a measure seeking, among other things, "to cancel the amount owing by the government of the United Kingdom to the government of Canada with respect to the British commonwealth air training plan, being the sum of four hundred and twenty-five million dollars". This afternoon, discussion has taken place mainly on the loan and nothing has been said about this out-and-out gift, this direct contribution of $425 millions to a country which at the very moment it requested this gift, or should I say received it, was lending money to another country, with interest.
In the second place, we are also asked to settle for $150 million another debt the details of which we do not know and which we have reason to believe a much greater than that sum. That is another direct gift.
In the third place, we are asked to lend without interest for five years the amount of one thousand two hundred and fifty million dollars on the understanding that at the end of those five years we shall decide whether to claim interest. In other words, more money gone with the wind.

What will these loan gifts and presents achieve? They will simply make it possible for Great Britain to advance money to other nations thus developing her commercial relations and maintaining her supremacy over world trade. To my mind we who are citizens of Canada have no right to levy taxes on our fellow countrymen in order that Great Britain may lend money to other nations.
This afternoon, the Right Hon. Minister of Finance gave the impression that the donor rather than the recipient of a gift ought to be grateful. What a strange reasoning ! . . . We have now come to misrepresenting the meaning of words; gratitude is no longer expected of the recipient of a gift but of his benefactor. The borrower who is advanced an interest-free loan, that is, a worthless investment which is nothing but a gift in disguise, is no longer required to be thankful since the shoe is now on the other foot and it behooves the benefactor to show gratitude. I am not ready to accept this argument, and I wanted to register my disapproval without delay, postponing until the second reading of the bill a mQre detailed discussion of my objections.
(Text).:


Mr. GLEASON BELZILE (Rimouski):: Mr. Chairman, I think a voice from the province of Quebec should be heard to-night in defence of the resolution before us. This resolution does not represent an entirely new policy of the Liberal party. In my view it is the continuation of a policy which was adopted during the war under dire exigencies.
I consider I have a right to discuss this matter because judgment has. been parsed upon it by the electorate of my constituency. "Billions to England" was the cry of every Nationalist, every member of the Bloc Populate and every independent member during the last election. In my own constituency the most forceful denunciator was the former member of parliament and he made many speeches. Previously he had separated from his party; after denouncing it in this house in the most violent terms, he crossed the floor of the chamber. During the campaign I defended the government to the best of my humble ability. The good people of the constituency of Rimouski had every opportunity to form an opinion. On polling day they gave their verdict and here I am to speak for them.
It seems to me that Canada's relations with the United Kingdom, even the purely commercial relations, are the greatest occasion for misunderstanding and misinterpretation. Our relations with other countries on



II, 1946

[Stage Direction]
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approximately the same basis are not even questioned. Under the Export Credit Insurance Act loans have been authorized and made to other countries but never a word has been said. This afternoon the Minister of Finance (Mr. Usley) tabled full details of all these loans. At the beginning of the session a question was asked and the answer appears in Hansard at page 358. The hon. member for Moose Jaw (Mr. Thatcher) asked for the details of loans and gifts made by Canada to other nations, and the following information
was given:
U.S.S.R	 $13,000,000
Norway	 13,000,000
Netherlands Indies	 15,000.000
Czechoslovakia	 19.000.000
Belgium	 25.000.000
China	 60,000.000
Netherlands	 125,000,000
France	 242,000,000
Total	 $512,000,000
These loans were considered by every nationalist as good business.
(Translation) :
Maxime Raymond: May I ask the hon. member a question?


Gleason Belzile: Certainly.


Maxime Raymond: Did those loans which you have just mentioned bear interest or were they interest-free?


Gleason Belzile: According to the report of the Minister of Finance (Mr. Usley) the interest rate ranges between 2| and 3 per cent.


Mr. LALONDE (Labelle):: He was not in the house this afternoon.
(Text):


Gleason Belzile: If these loans were considered as purely business matters, I humbly submit that the present loan should be considered in the same way although it does involve a large amount of money. As was said by the hon. member for Muskoka-Ontario (Mr. Maedonnell), it should be appraised and judged solely in the light of the general interest of Canada and of its people. It should be judged from a purely selfish and egotistical point of view. In extending a loan a businessman or a man on the street has two things to consider. First, he must consider his own personal situation and. second, he must consider the solvency of the borrower. That is a good rule and it should be applied to the present case.
What is the financial situation of Canada? The statistics that I am about to give were obtained from the Canada Year Book for 1945. National income forms the fundamental basis of revenue. When national income is considered in relation to national revenue or taxes it faithfully portrays the economic
position of a country. From 1933, the darkest year of the depression, Canada's national income has risen from $2,795 million to an estimated amount of some $9,000 million for 1945. National revenue increased from some $500 million to a total of $2,765 million. There is no doubt that our national wealth is much greater in 1946 than it1 ever was. In using the other method of calculating national wealth, that of working back to capital values ough income tax returns, we find that the same assertion can be made.
Of course we must consider our national debt of some $15,000 million, most of which was incurred during the war and which therefore, is not represented by corresponding assets. However, this is counterbalanced to some extent by the fact that this loan is mainly held in Canada and is payable in Canadian funds. It is said that during the war Canada repatriated Canadian securities from the United Kingdom to a value of about $1,000 million and has accumulated sterling balances, later converted into a loan, of which there is still owing to Canada some $500 million which is guaranteed by liens on Canadian securities held in the ^United Kingdom. Therefore our financial situation as far as the United Kingdom is concerned has been converted to our advantage to the extent of $1,500 million. I think everyone who spoke before me concurred in the opinion that our financial situation is actually quite sound.
We have assumed great responsibilities to our own people. There is the interest on our debt, the reestablishment of our veterans, the payment of family allowances and so on. We must face great problems, such as reconversion, housing, great programmes of public works and railway expansion such as has been requested from the other side. After listening to many speeches in this house, I have formed the opinion that many of us are trying to raid the treasury in order to satisfy the demands of our own constituencies that this or that should be provided.
To meet these responsibilities, to solve these problems and to satisfy our constituents we shall need an annual revenue of some $2,000 million, and we shall have to get this from taxes. Taxes are derived from national income and the rate of taxation is in direct proportion to the national income. With a national income of $10,000 million, we must impose taxation at the rate of 20 per cent in order to raise $2,000 million. With an income of only $6,000 million the rate goes up 33i per cent. National income is the yardstick of the comparative severity of taxation. It is -a principle of economics that income results only from production. In that I agree
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Mr. L. R. BEAUDOIN (Vaudreuil-Sou-langes):: Mr. Chairman, I am very glad to
speak on this measure following the hon. member for Rimouski. In the first place, I wish to congratulate the hon. member upon his wonderful address. I think he has presented his conception of the measure in a comprehensive and realistic manner. I was not going to participate in this debate but, like the hon. member for Rimouski, I feel that some voices from Quebec should be heard in favour of this measure.
This question merits thorough consideration and careful study. It has been explained clearly this afternoon by the Minister of Finance. We have heard about this measure for quite a while: now it is presented to the house in the form of a resolution. Later on, a bill will be introduced and we shall have a further opportunity to discuss the present measure.
I was very much surprised at the speech which was made at the end of the afternoon by the hon. member for Richelieu-Vercheres. He stated at the beginning of his remarks that he was not very well prepared to speak on the matter but that he just wanted to state his opinion of the measure. When he said that, I recalled the advice which he had given to the people of Quebec about the seriousness of certain matters into which one should not go without careful study. I delved into some excerpts from the press, and I picked out this
Loan to United Kingdom

item, which appeared in the Montreal Star on ApMl 10, 1942, when the hon. member for Richelieu-Vercheres was addressing the people of Quebec on the matter of the plebiscite of 1942. He said:
I submit that several aspects of the question have not been presented to you, and, what is still more serious, you have not been shown the grave consequences which might result from your decision. It may very well be, in fact, that the vote to which you have pledged yourselves may bring results exactly contrary to those you desire.
I would be the last one to speak of this measure in emotional terms. It was a real comfort this afternoon to hear the hon. member for Muskoka-Ontario state that he was considering this measure exclusively on the basis of the interests and the best interests of Canada itself. That is the tone that the Minister of Finance has set on this question, and that is the way that it is understood throughout Canada, that this loan is a good business proposition. But had there been anyone to suggest that the subject of this loan should be presented in emotional terms, I would again have recourse to thoughts expressed by the hon. member for Richelieu-Vercheres as I found them in La Presse of Saturday, April 25, 1942, when he said, and I translate:
Independence would not protect us; on the contrary it would aggravate our obligations and the results of a possible defeat. Look at Belgium! Look at Holland! We are far from there, one might say. Yes. because the English fleet guards the ocean. But without it, what w-ould the defence of our coasts be worth?
These statements of the hon. member for Richelieu-Vercheres should be remembered today. Were we considering this measure otherwise than as a business proposition; were we considering it as a gift, I would be entitled to consent to this measure, under the terms expressed by the hon. member himself, as a gift, and I would consent to it not with interest at two per cent but without any interest at all.	.
I agree with the hon. member for Rimouski that this measure is only one loan of a group of loans which have already been made in order to restore and maintain our export trade. In the debate on the speech from the throne at the beginning of the session the hon. member for Queens-Lunenburg made it clear, and it has been made clearer since, that other loans have been made, about which hon. members who are opposing this measure have never uttered a word. I would repeat, although the hon. member for Rimouski has made it quite clear, what was pointed out by the member for Queens-Lunenburg. namely, that:
Loan agreements have been entered into with England. Belgium, China, Czechoslovakia, the Netherlands, the Netherlands East Indies, Norway and Russia. Furthermore, negotiations are well advanced toward making a very large amount of money available to France.
As part of that policy instituted by the government, in the best interests of Canada, we have this measure for a loan to the United Kingdom. We must understand that the economy of Canada and that of other countries interpenetrate. We cannot live alone. We must understand, in order to support this measure, that global strategy which the minister discussed so ably this afternoon.
The Liberal party is presenting this measure. It is supported by the Conservative party, by the C.C.F. and by the Social Credit party. A great deal of study was given to the question by the government before introducing the measure, and I do not see why certain individuals should rise and speak against the proposal after so many have given it careful consideration and so many people in all sections of the country, realizing what good business it is for Canada, have through their representatives, agreed to the resolution.
Again I will recall the words of the hon. member for Richelieu-Vercheres when he declared in La Presse on Wednesday, January 12, 1938:
(Translation):
A man who stands alone in politics or in any organization is worth nothing at all. What can be expected of an individual who is always changing about and who has such a nasty character he can get along with no one? Personally, I do not trust anyone who is neither with the government nor with the opposition, and is regarded as a one-man party.
' (Text):
I know that hon. members are anxious to have this debate concluded and I have no desire to take up any more of the time of the house. Let me say, in conclusion, that I have confidence, in the government of the country, and knowing that in every move it makes it does consider the best interests of Canada, I wish on behalf of my constituents to declare that I am very happy to support this measure since I believe that its object is to safeguard the interests of the country.
Resolution reported, read the second time and concurred in. Mr. Usley thereupon moved for leave to introduce bill No. 28, respecting the financial agreement between Canada and the United Kingdom signed on the sixth day of March, 1946.


Mr. DEPUTY SPEAKER:: Shall the motion
carry?


Pierre-Joseph-Arthur Cardin: On division.
Motion agreed to on division and bill read the first time.

Canadian Citizenship



CANADIAN CITIZENSHIP


[Stage Direction]
The house resumed from Tuesday, April 9, consideration of the motion of Mr. Martin for
the second reading of bill No. 7, respecting citizenship, nationality, naturalization and status of aliens.
Mr. C. C. I. MERRITT (Vancouver-Bur-rard):: I should like first of all to say a few words on the Japanese question. I do not wish to dwell very long on that particular aspect of the subject, but I will place myself squarely behind the British Columbia members who have preceded me in this debate. The people of British Columbia are very much concerned over the delay in the application of the policy announced by the government. It seems to me that the government must recognize that delay will bring them further and further into difficulties, and they must very soon come to a decision and carry through their policy.
The government will be more and more under the influence of pressure groups in this connection. I would point out to the Minister of Labour (Mr. Mitchell), when he receives these pressure groups, that the contest, if there is one, is between the people of British Columbia represented by their members in parliament, who have a responsibility not only to themselves but also to those whom they represent, and those deputations that have a responsibility only to themselves. The people of British Columbia have borne this Japanese problem for many years and for them it might be likened to a red-hot shot. During the war, after years of effort, they succeeded in dumping it on the lap of this government. There is only one thing that the people of British Columbia will not accept, and that is to have this red-hot shot dumped back into their hands to carry it again alone.
So that whatever policy the government eventually decides to adopt-and I hope that it will adopt a policy quickly-that policy cannot be one of forcing back upon us a load which we have carried too long and know too well. That is all I wish to say about the Japanese.
I now turn to the bill itself. First, I should like to refer to the point raised by the hon. member for Kindersley (Mr. Jaenicke) and the hon. member for St. John-Albert (Mr. Hazen). I was veiy much surprised that in introducing the bill the Secretary of State (Mr. Martin) did not make any statement as to the discussions he had had with Great Britain and the other members of the commonwealth. I should have thought
that in connection with a bill of such importance nothing could be more desirable than that there should be such a discussion; and if the Secretary of State were to take the view I do, surely he would have made that announcement when he introduced the bill. Then, arising out of his remarks in reply to the hon. member for York South (Mr. Cockeram), I wish to say that certainly for many years no one on this side of the house has doubted Canada's absolute sovereignty. Certainly there will be no one in the official opposition who will regret that we are taking the lead in the development of empire affairs. But if we are to take such a lead it is of vital importance to a very large number of people in this country that the lead we take and the example we set to the other nations of the commonwealth shall be not only for the good of Canada but also to the advantage of that association which so many of us believe is good for Canada. Therefore, if this bill is to be used as a model for legislation in other countries of the commonwealth it is vital that we do not put any impediment in the way of the free movement of peoples in the empire family.


Mr. MARTIN:: Does this bill do that?


Charles Cecil Ingersoll Merritt: In the five years residence rule it certainly does.


Paul Joseph James Martin: That has been the law for twenty-seven years.


Mr. FLEMING:: Oh, no.


Charles Cecil Ingersoll Merritt: I shall leave that point and come to another angle of this matter. I am a natural-born Canadian whose forbears were also born in this country. I am entirely Canadian, and I am one of a very large number who are entirely Canadian, yet who say with pride, "I am a British subject." Therefore, I think I may speak for a moment on behalf of that very large class. The Canadian-born British subject is the one class of Canadian that has taken an awful beating in this debate. We have heard much about the glories of all other classes of Canadians, while the Canadian-born who is proud to be a British subject has been accused of various weaknesses in his Canadianism. Well, I think it is very good that matters of this kind should be brought up, because the opinion of others is very good for one's soul. Until this debate I had never realized that my Canadianism was not complete. I do not doubt that it is, even after what has been said, but certainly it will do me good to know there are those who hold such a view.
I welcomed the bill heartily, and I welcome it particularly for the reasons so ably advanced by the hon. member for Spadina (Mr. Croll).

Canadian Citizenship
I consider that this bill is of tremendous importance, as the hon. member said, to the class of Canadians on whose behalf he spoke; and I can well understand the view he takes when he says many people who have come into this country have not experienced the same sense of nationhood they knew in their native countries in crowded Europe. But I wish to say to the hon. member for Spadina, who, I am sorry, is not in his seat now, that he must not doubt the attachment of native-born Canadians to their birthright. We travel in' no shadow of the mother country or of the United States. We are British subjects because and only because we are Canadians; we are not. British subjects in spite of being Canadians. The hon. member spoke of "soft, apologetic Canadianism." I must say I have not experienced any such feeling, nor have I ever encountered it in this country. Very often I have met the reverse of soft, apologetic Canadianism, but never that type.
In addition to welcoming the bill, I welcome this debate, during which many frank things have been said. That is a good thing. I have sat silently in this house for some months now and have been amazed and distressed at references to colonialism and slurs on the status of British subjects. I have not been silent because 11 agreed with those remarks, but rather because I <jlid not understand and therefore did not know how I could answer them. In this debate, however, I think I have heard the reasons which motivated references to colonialism and derogatory remarks about British subjects; and if I do understand them now I might say a word in reply. I gathered from the speeches of the hon. member for Outremont (Mr. Rinfret) and the hon. member for Beauharnois-Laprairie (Mr. Raymond) that both hon. gentlemen were of the opinion, although in very different degree, that the status of a British subject meant there was some allegiance to Great Britain or Great Britain's laws as well as allegiance to Canada. If that is so I think I can answer it. I would say that such a view is a complete misconception of law and of fact; and since it is only a misconception that stands between us, nothing really holds us apart. I say perfectly frankly that if dual nationality or allegiance to another country existed owing to my being a British subject; if it meant that Canada was not a sovereign state, I would join with my hon. friends not in destroying the status of a British subject but rather in rectifying it, so that if there were derogations from Canada's sovereignty those derogations would be removed. I wish to say this-and I do not say it for myself, but for all Canadians proud of the status of British subjects-that that

status is not to us one of habit or law, or one to be supported simply because we were born to it; it is a status we honour because we believe in it.
We believe in the status of British subject, and as Canadians wish to remain British subjects, because to us the British Empire or the British Commonwealth of Nations, whichever you like to call it, has been for many years in the past, and will be for many years in the future, the greatest bulwark of freedom that exists in this world. We desire to remain British subjects. We are proud of being British subjects now, because to be and to continue to be such is to us the surest way to be and to continue to be free men.
If there was any such misconception that I thought I gathered in the speeches of the hon. members to whom I have referred, it seems to me that the misconception might be based simply upon our use of words. I would point out to the house that where we can refer to citizens of Canada as Canadians or citizens of Brazil as Brazilians, we cannot refer to citizens of the United States of America by any adjectival addition to that country's name. Therefore we call them Americans, although they have no greater right so to be called than have we or the Brazilians. After all, we live in America and we, too, are Americans. But we allow to the United States, for convenience, the national appelation of American.
The same might be said about Great Britain. That country is not Britain; it is the United Kingdom of Great Britain and Northern Ireland, and one cannot add to that description ,the suffix "an" and use it conveniently in conversation.
Therefore, particularly in the United States, there has grown up a habit, which I noticed in the debate this afternoon, of referring to the citizens of Great Britain or of the United Kingdom as "the British". Surely that gives rise to a misconception of the term "British". Surely we are imparting to the citizens of Great Britain a status they do not exclusively possess, and that they do not claim exclusively for themselves.
They are not the only British. A British subject is not a citizen of Great Britain, as one hon. member has suggested. I suggest to anyone who doubts that statement that he ask an Englishman what his nationality is. He will say that it is English. And if one were to confuse a Welshman with an Englishman I think there would be a great row from the Welshman.

Canadian Citizenship
To drive that point home I would call the attention of the house to the perfect conception of nationality which exists in Scotland where, not only would the Scot be annoyed if he were called an Englishman-I would not dare do it-but also Scotland, although part of the United Kingdom, still has its own law, and still jealously retains many of the attributes of a separate country. So that I do not for a moment think it ran be said, with any justification, that a British subject is something which pertains exclusively to Great Britain.
I wish to enlarge upon my conception of the status of British subject. As I said. I am a Canadian and I come from a family which through all Canada's history, long before confederation, has lived in Canada. I have no connection whatsoever with Great Britain. Yet I am a British subject. As a British subject, however, I am not the subject of any nation but Canada. And let me say here, with all sincerity, that no nation holds a greater place in my heart than my own country of Canada.
A British subject, therefore, is not a citizen of the United Kingdom. He is a citizen, rathe, of the British commonwealth of nations. A British subject has one king and one country-not two countries. But he has fraternal affiliations with many countries; he is close to being a world citizen. He is a member of the greatest collection * of freely associated nations the world has ever seen. He is an internationalist in a world which is still nationalist, but is groping toward internationalism. He is a member of the first successful united nations organization. I say to the house that the British subject is the prime hope for the future of a free world.
The term is the exclusive possession of no one country, but rather it is the joint possession of many. Although I do not wish to labour this, I might offer another illustration of status, which I think makes it very clear. The hon. member for Outremont and I are both British subjects from Canada. Likewise, an Australian is a British subject from Australia. Mr. Churchill is a British subject from England and Field Marshal Smuts is a British subject from South Africa. Neither Mr. Churchill nor Field Marshal Smuts has any greater claim to the title "British subject" than has any hon. member in the house. Country of origin gives no precedence whatever to that appellation.
Let us for a moment turn to the bill. If the status of British subject is as I have described it, then it is something very much to be prized. It represents freedom; it represents
sovereignty, and at the same time it represents the ability to join with other countries in something more than a mere arrangement of convenience for the time being.
When a British subject comes from England to Canada he may, under this bill, if he wishes, remain a British subject from England or, by going through the procedure provided in the bill, he may become a British subject from Canada. If he follows the latter course he assumes allegiance to the law of Canada and at the same time renounces his allegiance to the domestic law of England. Therefore I say he does not become naturalized in the usual sense of the term, but rather he becomes re-nationalized. If that is his status, if the process that he has gone through is different, why should he be lumped together in this bill and be forced to go through exactly the same procedure as must be gone through by an alien? The hon. member for Nanaimo -(Mr. Pearkes) pointed out the other day, I think most cogently, that the period of apprenticeship should not necessarily be the same for the one who has already partaken of a part of our joint heritage and who needs only to familiarize himself with our domestic law in order to be able to fit very well into our national life. That he should be lumped together with the alien is, to my mind, an ungracious act by a government wThich has not paid sufficient attention to that non-vocal but very large number of people in this country for whom I think I can claim to speak. I say it is an ungracious act because it. is an unnecessary act and also because, as far as I know, it is a unilateral act.
At the opening of my remarks I referred to the necessity of consultation with the other nations of the commonwealth before introducing this bill. If we are setting an example to those other nations we must be clear in >ur minds as to what we are doing if we lump these people together in the cause of sovereignty. I say to the Secretary of State that sovereignty is not something over which to chuck your weight about. I say rather that sovereignty is pure, steady power which needs vivid expression only when it is actually attacked.
I do not think there is anyone in this country or in this house who doubts Canada's absolute sovereignty to-day. We hear about appeals to the privy council and the right to amend our own constitution. But do not let us think that the existence of those limitations on our sovereignty, if they can be called such, are there because of any act committed outside the boundaries of this country. We all know, and if it were not so I would be
Canadian Citizenship


James Horace King: The hon. member has exhausted his time.


Some hon. MEMBERS:: Go on.


Charles Cecil Ingersoll Merritt: I have practically finished, Mr. Speaker. I only wish to say, in conclusion, that I hope out of this bill we can establish a status that will settle all doubts and differences between us as to the way in which we all hold our sovereignty. Then we can go on, in national unity, to the great future which lies ahead for Canada. Canada, in the British Commonwealth of Nations may be not one of the minor partners, but one who in due time will assume the lead in the commonwealth of nations which will play the greatest part in making a reality out of the united nations organization.


Mr. T. A. KIDD (Kingston City):: Mr. Speaker, I do not agree by any means with many statements which have been made so far in this debate, and for that reason I shall ask the indulgence of the house for a few moments.
We are now dealing with bill No. 7, an act respecting citizenship, nationality, naturalization and status of aliens, which is now referred to as the Canadian Citizenship Act. This bill had its first reading some three weeks ago, on March 31. It is divided into seven parts and forty-seven sections, and the principles of the bill are directly related to about seven different items. It deals with ' natural-born Canadian citizens, Canadian citizens other than natural-born, loss of Canadian citizenship, status of citizens and recognition of British subjects, status of aliens, and the method of procedure and evidence, as well as a schedule defining the oath of allegiance.
This bill is undesirable for the reason that it takes away from British subjects a privilege which they have had and which they enjoy to-day.


Paul Joseph James Martin: What privilege does it take away?


Thomas Ashmore Kidd: I will tell the minister, if he will follow me. If this bill passes as recommended by the Secretary of State, it will mean that British, subjects throughout the empire will probably go to Australia or New Zealand in preference to Canada. This bill has been the sounding-board and is the instru-
Canadian Citizenship

ment to make known to this house and to Canada that there is in this house an antiBritish following who are not desirous of giving preference to British subjects.
I welcome the opportunity to say something on this bill. The statement has been made, with reference to Japanese now domiciled in Canada, that the predicament and the embarrassing position in which the government now finds itself may be relieved by the passing of this bill. I wonder whether the bringing forward of this measure at the present time has any bearing on the Japanese question.


Paul Joseph James Martin: Not a bit.


Thomas Ashmore Kidd: All right. Some supporters of the government could not avoid blushing to hear the various anti-British expressions which have already been used in this debate. After the next few months, when the troops have returned home from overseas and are settled in civilian life, Canadian immigration policy will likely be relaxed to admit many British people who are desirous of coming to this country. Under the provisions of the proposed bill these men cannot become citizens of the country until they have resided here for five years, and they will, therefore, be unable to vote in dominion or provincial elections held during that period.


Paul Joseph James Martin: The hon. member knows that is not right.


Thomas Ashmore Kidd: The minister knows the five-year clause.


Paul Joseph James Martin: It has nothing to do with the elections act at all.


Thomas Ashmore Kidd: It has. Let the minister follow me. I should like to draw to his attention the immigration set-up as it existed in the ten years following 1930. There entered into Canada about 150,000 annually, or, in that decade, a total of one and a half million immigrants. One hundred thousand annually were aliens and the other fifty thousand annually were from Great Britain and the empire, or put it in this way, for every three immigrants entering Canada one was British and two were of foreign extraction. In the same period we lost 100,000 citizens annually to the United States. This means that the best citizens Canada produced, boys and girls of Canadian families, educated in our collegiate institutes, our technical schools and our universities, went across the border to find positions for themselves and their families. For every British immigrant entering Canada two Canadian citizens went to the United States. This is a state of affairs which we

should not allow to occur again. Just as our immigration policy in that period was antiBritish, so is this proposed bill, and I tell the Secretary of State that we have already had two indications of a government attempting to pilot through the house-this most contentious bill. A citizenship bill was introduced by a previous secretary of state, Hon. C. H. Cahan, in 1931, but it was withdrawn, and-


Paul Joseph James Martin: It was not the same bill at all.


Thomas Ashmore Kidd: I know it was not the same bill, but it had to do with citizenship. The urgency to-day is no greater than it was at that time. Two other contentious bills, one dealing with the flag and the other seeking to abolish Dominion day, have already been brought forward this session. I would refer particularly to the procedure in dealing with the Canada day bill, which was sponsored by a private member and was oiloted successfully through the house in one .afternoon and evening. The present bill is also contentious, and I tell the Secretary of State that he might have been well advised to have left this to the hon. member for Matapedia-Matane (Mr. Cote) who did such a good job in support of the government.
Though it has been recalled recently, I would briefly refer to the part played by Great Britain in world war I and world war II. In world war I Russia was an ally, but dropped out before the war was finished. In world war II she did not enter untfl after the war had continued for months. In'world war I France was on the side of Britain; in world war II she capitulated to Germany nine months after the war commenced. The United States did not enter either world war I or world war II until some -time after those wars commenced. In the last war Great Britain and the empire stood alone against Germany for over a year. This must not be forgotten. This is not a time for the House of Commons to enact legislation taking from British subjects entering Canada the rights they have enjoyed for generations. British subjects throughout the world should not be placed for immigration purposes in the same category as aliens who fought against the empire.
May I recall to the house something which Canada should not overlook, the part played by her troops on at least two occasions. Canada declared war in August, 1914, and September, 1939. Canada owes much to those men who in 1914 and 1939 formed the first and second divisions. The majority of these men were of British stock. If I may make a personal reference, I remember well, as do some other

Canadian Citizenship
members of this house, the first inspection by Their Majesties of the first Canadian division on a Saturday afternoon in November, 1914, on Salisbury plain. With Their Majesties the King and Queen were Lord Roberts and Lord Kitchener. I wish to mention particularly the Princess Pats. The majority of these men were South African veterans who freely volunteered to serve Canada and the empire. They were marked by the ribbons they wore. The key men in nearly every section, company and brigade were veterans. A few weeks later, in April, 1915, the same troops, at Ypres, when the Germans launched their famous first gas attack, made a name for Canada, and from that very moment Canada's prestige in the empire has steadily grown.
What happened in 1914 repeated itself in 1939. The men of the first and second divisions were veteran volunteers, the majority being of British stock.
Let us also not forget that it was the British navy in the fall of 1914 and in 1939 that delivered Canada's first division safely to England. Reference was made to that a few minutes ago in the loan debate, and I shall not refer to it at length. But I would say this. Deputations from Canada have visited the empire year in and year out since confederation. Even since the last session representatives of Canada were in England. The part which our Canadian soldiers overseas played in world war I and world war II has done more to cement Canada to the empire than all the deputations and conferences held before or since.
Let me give one illustration. We had in Kingston a unit of the empire air training scheme, No. 14, which was the first and largest fleet air training school in Canada. There were 100 classes of about fifty each, which meant 5,000 men training there for the R.A.F. fleet air arms. These boys served in the most hazardous branch of the service. What happened during these four years? Many of them, not dozens but scores of them married Canadian girls. Many went overseas and many of them wish to return to Canada. Why should those boys be placed ini the same category as aliens who have to wait for five years before being granted the franchise? No finer citizens will enter Canada than the 30,000 or 40,000 war brides who wish to find new homes here at the present time. We must not overlook the thousands of Canadian brides who married British soldiers and soldiers of our allies and who would like to return to Canada.


Paul Joseph James Martin: Every one of those, under the bill, will become a citizen.


Thomas Ashmore Kidd: It will take five years.


Paul Joseph James Martin: No, not at all.


Thomas Ashmore Kidd: I say that this bill should not take away, from our British subjects coming to Canada, the privilege they now enjoy. The Secretary of State, in his explanation of the bill, seemed to go out of his way when he said:
One thing we hope to do, following the passage of this measure, is to provide a more effective and impressive ceremony for admission into the Canadian family.
I say to the Secretary of State that in view of the fact that nearly one million aliens entered Canada in the ten-year period of the thirties, the question flashes through one's mind: Why was not this ceremony carried out in the past when taking the oath of allegiance as British subjects as is now proposed?


An hon. MEMBER:: The Bennett government was in power.


Thomas Ashmore Kidd: For five years. Since the last session of parliament Canada was represented by members of the government in London. Heading the deputation were the Minister of Justice (Mr. St. Laurent) and the Secretary of State (Mr. Martin). What happened there? Apparently the Secretary of State was not too favourably impressed by Canada's relationship and responsibility to the mother country. We have him returning from the old country, and the first major piece of legislation, contentious as it is, is tabled and sponsored in his name. He evidently set out to discard British preference in regard to British immigration.
Tuesday last developed into a Japanese and British Columbia day. The hon. member for New Westminster (Mr. Reid) did not hesitate to state where he differed with the government on this bill. The fact that bill No. 7 has been sponsored by the government makes it difficult, if not impossible, for government supporters to take any other position than a party view of it. This afternoon I went into the library and looked up the Globe and Mail, because I happened to be in London in 1937 during the conference there. We have heard a good many things said in connection with this bill and something flashed through my mind regarding what had taken place at that conference. I am sorry I have not the clipping because I did not know that I would be referring to the matter at this moment. However, take the Globe and Mail for the month of May, 1937, and you will find that at that conference the statesmen were dealing with the question of citizenship, which occupied a great deal of their time. On that occasion the premier of South Africa shot

Canadian Citizenship

a question at the meeting which took them all by surprise. He wanted to know what the definition of "British subject" was and no one could answer him. A committee was appointed and a former Minister of Justice was made chairman, while the British attorney general, whose name has slipped my memory, spoke for twenty-five minutes on the subject of British citizenship. After the discussion was over, they did not seem to be much farther ahead. What took place in 1937 at that conference only convinces us that this citizenship bill is a contentious one and something that should not be rushed through the house hurriedly but should be studied from all angles.


Mr. H. G. ARCHIBALD (Skeena):: I
should like to contribute a few words to the discussion of this bill. I am absolutely in support of the principle of it. As a child I had my education partly in the old country,, in Scotland, and here, also in this country. I think a lot of the race I come from in Scotland, but I also think a great .deal of the country in which I was born, Canada., I also realize that this country comprises many men and nationalities and that here we still have to write down, when we are asked to furnish information on going to the United States on a visit, that we are British subjects. We are still known by our racial origin, and it is about time that this country grew up and that we became just Canadians.
In the United States, no matter whether a man be an Italian or a Czechoslovakian, he is always an American and there is no deviation from that. We here in Canada should have the same spirit and be known as Canadians.
The tradition of the old country has in some respects held back the development of this country in so far as working-class conditions are concerned. I am now referring to the merchant marine. In the building of freighters, which we1 constructed during the war, 10,000-tonners, we followed the good old British traditions of putting the galley amidships and the mess hall at the front of the boat, and you had to lug the food across the open deck. Imagine what it would be like in the middle of winter on the north Atlantic I An American would have enough sense to put the galley and the mess hall in one part, but we have to follow the tradition of the British nary and the time of Lord Nelson.
That may be a small thing, but it means a great deal to the men working on the ship. I suggest that we here should establish our own traditions on the North American continent. I am not so much concerned about a national viewpoint. I am thinking of the spirit of the people of the whole North

American continent. It is something distinctive and we should follow along our own lines.
There has also been too great a tendency on the part of those who have been British-born or who have come of British stock to rub it into the other fellow. I shall never forget the time I was working on a threshing outfit in southern Alberta. There I saw Dutchmen, Belgians, Czechoslovakians and Poles. One Englishmen had preceded me on the job and he claimed that he was the only white man there. That is the sort of thing that must stop if we expect to have a united nation.
In the speeches that have been made on this bill, especially by members from British Columbia, hon. gentlemen seem to have suffered from violent attacks of yellow fever. I come from Skeena, a federal riding, a fishing district which produces as much fish as any riding in that province, and in spite of the Jap issue they elected me. Let me explain the reason they did so. They found out a long time ago what was the secret of it. Like the other members from British Columbia I am absolutely opposed to the Japs going back to the doast, but for a reason. In the last election, if it had not been for the Jap ifesue the poor Conservatives and Liberals would not have known what to talk about: they would have been absolutely bankrupt. The fishermen on that coast suffered during the depression; fish went down to around two cents a pound, and the full hatred of the fishermen was turned to the' Japs, their fellow workers. But when the crisis begins to become apparent in this system, as it will with mathematical certainty, I hope there will be -no Japs on the coast on whom to blame it. This time the people will know the cause of the trouble.
I went back to British Columbia during the last provincial campaign. The last lone Liberal there, Mr. Pattullo, was in desperate circumstances. He came out with this line of propaganda, that if the C.C.F. got in they would allow' the big companies to bring the Japanese back into the canneries. It was my duty to tell the people that if the C.C.F. .got in there would be no big fish packing companies. But he lost, and again the Japanese were the main issue in that area.
What I want to see brought out clearly is that there is no difference among the workers in this country, whether we be black or yellow or red. We all suffer under the same system, and soon we are going to realize that. Sir James Orr says that in a couple of years we shall have complete collapse of commodity prices unless such prices are fixed internationally. If that collapse becomes apparent

Canadian Citizenship
on the coast within the next two years the fishermen will realize once and for all who are the real Japs. A year before the election I attempted to go on the radio with a speech in which I wanted to say that after the war with Japan was over and won our first act would be to put Hirohito back on the throne. The C.B.C. censor, who said that he was not a censor but that he just checked things, censored that speech and said that such a statement was seditious. I was in the army, and he was not; but they did put Hirohito back [DOT] on the throne, and these governments here did trade with Hirohito even after we had declared war on Germany. Therefore in the final analysis, putting Hirohito back on the throne showed more of a community of interest with the ruling class of Japan than with their own workers here.
This citizenship bill is a step in the right direction. I hope it will mark the beginning of a united Canada.


Mr. T. J. BENTLEY (Swift Current):: I did not really expect to be called on to speak to-night, Mr. Speaker; I thought there was a long list ahead of me, but I do not want to miss the opportunity of saying a word or two on this particular measure. It is not very often that one in this corner of the house is able to agree so wholeheartedly with the present government, but I wish to congratulate the government and the Secretary of State (Mr. Martin) on this bill. It is peculiar to note that at infrequent intervals during the life of this government they have shown flashes of brilliance, but their inspiration has come from only one source. Many years ago there sat in this house, with a smaller group an,d under a somewhat different name but with just about the same philosophy, a gentleman from Winnipeg named Mr. Woodsworth. He was keen to have the old age pension brought into effect, and as a result of his constant pressure the Liberal government of that time finally gave us old age pensions. They were not very good ones, but still it indicated that the government were susceptible to such propositions after a great deal of pressure, and, of course, if they thought it would do them good politically. Then, after another long period, following constant pressure by progressive people on this side of this house and throughout the country- I did not say Progressive Conservatives but progressive people-the same government finally brought in the family allowances measure. That was another good step; the allowances were not good enough, but they were far better than nothing at all.
I believe the Prime Minister (Mr. Mackenzie King) is to be commended for the selection of his Secretary of State (Mr. Martin). I do not make that statement in order to obtain any applause either for myself or for the minister, but simply to point out that apparently the hon. gentleman is open to inspiration, and is able to convince the government that something good should be adopted. He has now brought in this citizenship bill. I wish to read from a little pamphlet; and then I will give the name of it.
The C.C.P. again pledges itself to . . . the adoption of a distinctive national flag and national anthem and the necessary legal provision
for Canadian citizenship.
This little book is called the "C.C.F. Manifesto", and was drawn up at the C.CJF. national convention held in Montreal a year ago last November and early December. So that the government can be congratulated on being able to accept suggestions of this kind, and on being able to select from the platform, of another party the things they consider good. We hope that some day they may take more from our platform; in fact we believe it would be an extremely good thing if they would read this little book all the way through and adopt everything it suggests.
To Canadian-born citizens like myself I believe this measure is very welcome. I welcome it not only for reasons of national pride, because a perspn should not have too much national pride just because he was born here. I cannot be proud o'f being born here because I had nothing to do with it, but can feel very lucky to have been born in a country like Canada and to have grown up among the kind of people we have here, those who were born here and those who have come here from other lands. I believe those who like myself were born here will welcome this for another reason. As I grew up I made up my mind that never, under any circumstances, no matter what the law says-and I am a law-abiding citizen-would I ever give any nationality to any government official on any question but that of Canadian; and I never have. I do not know whether I can be arrested for breaking that law, but I make the statement that I have never given any other nationality than Canadian, and if this bill should not pass I will still stick to that. No one will ever get me to say anything else without putting me in a torture chamber. I could not do anything else; I have to be a Canadian' or I am nothing at all, and I refuse to accept that alternative.
804
Canadian Citizenship

Possibly the people who can be proudest of this bill are those who have come here from other shores. They at least can say they exercised their intelligence and chose the country in which they wanted to live. Their coming here has been a compliment to Canada, a compliment to those who were born here and a compliment to their own intelligence in wanting to live here. They have made a great contribution to this country, and I am sure they must feel gratified, after having chosen to come to these shores, that now they will be able to call themselves what they wanted to be.
So far as the Japanese question is concerned, let me say that I am not closely associated with it at the present time. However, I should like to tell hon. members from British Columbia, from whichever side of the house they come, that I remember the question quite well around thirty-five years ago when I was a very young man. I was working in British Columbia then for wages, and I remember that when the. Japanese came in there at that time they were welcomed by the employers.


An hon. MEMBER:: Cheap labour.


Thomas John Bentley: Yes, they were cheap
labour. They were hired for cheap wages when they were swinging the rigging on the old donkey-engines for the big timber companies. The rest of us, if we were not able to work on the springboard, or at the higher type of work, had to compete with them in the lower work. But the employers welcomed them then.
Since then, they have shown themselves in many respects capable of competing with our own people in different lines of business. Probably because of this they are not so well liked. However, I am not going to discuss the question from the British Columbia point of view; rather I shall leave that to the intelligence of the house, when a vote in the matter is called.
But I do wish to say this, that, with my limited knowledge of Canadians of Japanese origin, I could not now possibly support some of the statements we have heard from British Columbia about the poor citizens their Canadians of Japanese origin are likely to make. We have a few families of these people in the constituency in which I live. Some of them are in business; some are market gardeners; some are on farms, and some are at labouring work. Every one of those citizens is well liked in his community. They are good men.


Mr. GIBSON (Comox-Alberni):: We can
give you lots of 'hem.

Mr. BENTLEY':	Our premier in Saskatchewan has, I believe indicated that we are willing to take some.


John Lambert Gibson: We have
an unlimited supply.


Thomas John Bentley: No,, you have not an
unlimited supply, but you have quite a number of them. Possibly they will like to come to Saskatchewan ; possibly they will not. But let me say this to the house, that there is one elderly Canadian gentleman of Japanese origin who sits with me in the Canadian legion, a veteran of the last war, of the Princess Patricia Canadian Light Infantry. That same Canadian Japanese citizen is liked by all the Canadian legionnaires around there. He is received and accepted in all circles, the same as any other individual out there. But he is a practical farmer, a good farmer. He has a wife and family, and one of his boys was killed in the Canadian forces in this war. Does anyone here think for one moment that I am ever going to cast a vote which will throw a reflection upon that land of individual? It certainly would not be fair to do so. That is the way I feel about these people.
This bill carries with it a great many privileges and responsibilities. One of those privileges is the right to vote, and the responsibility is the obligation to vote and to try to understand what one is voting on. Those are two things which go with oitizbnship, and should not be forgotten.
The fact that the bill, as described by the Secretary of State, is to provide for some kind of ceremony and initial training for these people to teach them the responsibilities connected with their privileges is all to the good. I believe the newcomers will welcome it, and be the better for it.
They have another privilege, the right to do useful work. That is an important privilege in the citizenship of any country-the right to work at useful work. They have no right to be thrown on the bread-line every so often when the system under which we operate refuses to work. If they are to be citizens they have the right to work. Then they have the obligation to accept useful work. Their jobs should be there, and they have the right to take them, and also the obligation.
. They have the right to education and training to make them more useful in some useful job and to make them useful and valuable citizens in the community. They have the right to training to the extent of their ability to learn that to which their training is directed. They have the obligation which goes with that, that of educating themselves

The Governor General
to the best of their ability, according to the facilities made available to them for that purpose. That is a privilege and a responsibility, right there.
They have the right to security and comfort to the fullest extent of Canada's ability to produce the goods and services needed for security and comfort, regardless of their ability to work. That is right in line with the resolution placed before the house by an hon. member opposite.
With that obligation goes the obligation of all citizens, whether they were born here, or whether they came here later, or are newcomers recently arrived, of contributing to the comfort and security of the less fortunate among our citizens.
If this citizenship bill will impress upon the people the fact that these privileges are accompanied by obligations, then I think we have one of the measures to which the people of Canada have been looking forward for a long time. Let me again remind the house that this was part of the programme of the party to which I belong, of hon. members sitting in this corner of the house. Because of that, and for other reasons I have mentioned, I believe there will be no difficulty in our supporting the measure.
On motion of Mr. MacNicol the debate was adjourned.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Friday, April 12, 1946.