1947-12-15

Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, I believe it will be the wish of hon. members that before we proceed further with the business of the house some slight tribute should be paid on behalf of our parliament to the name and memory of a former prime minister of the United Kingdom who had over many years close associations with Canada and who, in fact, was a member of the privy council of this country. I refer, of course, to the Right Honourable Earl Baldwin of Bewdley, who passed away at the advanced age of eighty years on Sunday morning.
The unparalleled events of the last few years have more or less overshadowed the careers of not a few of those who in the two previous decades were among the most prominent in public life. That is particularly true of the career of Lord Baldwin, who resigned the premiership of the United Kingdom at the time of the coronation, and who for some years past has been living in semi-retirement. When Earl Baldwin died, there passed from the scene of world politics, one who in his day was pre-eminent among British statesmen.
Baldwin was for some twenty-nine years a member of the British House of Commons. During those years he was outstanding as a parliamentarian. He was three times Prime Minister of the United Kingdom, covering in all a period of some twelve years. In that time he played a foremost part in a solution of the vexed problems which were then before the nation. It was his fate to have been in office and to have occupied the first place in British public life for most of the difficult years between the two great wars.
I shall not attempt in anything I say this afternoon to comment upon either the policies of his administrations or upon specific acts of his government. This would not be the time or place for that. But I should like to say a word in regard to the outstanding place which Stanley Baldwin, as he was known at the time, held at the time and will always
hold in relation to the affairs of the British commonwealth of nations. I believe it to be a fact that no one, at that particular time, had a better understanding of relations between the different nations of the commonwealth and of what was best calculated to further harmony and effective co-operation between them than had the late Earl Baldwin. I think his administration may be credited with having guided the development of the commonwealth along lines which made possible the close co-operation which existed in the testing time of war.
It may not be within the recollection of all present that it was during the conference of 1926, over which Baldwin presided, that the government of the United Kingdom, in combination with the governments of 'the other nations of the British commonwealth, gave formal recognition to what we now speak of as the doctrine of the equality of status of the nations of the commonwealth. That doctrine found expression in legal form in the Statute of Westminster, which will ever remain one of the great documents in British history.
Canadians regardless of party affiliations, retain many cherished memories of Lord Baldwin's visits to our country. Hon. members will remember that it was Stanley Baldwin who was the first prime minister of the United Kingdom to visit Canada while in office. Fortunately it has become a natural thing for us to have visits from prime ministers of the United Kingdom. This parliament and this country has been visited by others who have since held that high office-Mr. Ramsay MacDonald, Mr. Churchill, and Mr. Attlee have all been here as prime ministers of the United Kingdom-but Mr. Baldwin was the first British statesman who while holding the office of Prime Minister felt it a duty to his own country and to the commonwealth to visit this dominion as the oldest and largest of the overseas nations. Hon. members will recollect that Baldwin came out at the time of the diamond jubilee of confederation and was accompanied by the then Prince of Wales. He visited Canada again in 1932 at the time of the economic conference. Wherever he went throughout Canada in 1927 and 1932 he received the warmest of welcomes from the people of this country.
It was also under Baldwin's government that the first high commissioner came to

The Late Earl Baldwin oj Bewdley _
Ottawa to represent the government of the United Kingdom in this country. The example thus set has since been followed in representation of their governments in the other countries of the commonwealth by all the nations of the commonwealth. These are links with Britain and with other parts of the commonwealth which have proved their enduring worth.
I should like to mention one other important matter, with which Stanley Baldwin was immediately concerned and which had an important bearing on our own relations with the crown. I refer to the part he played in what might have resulted in a critical constitutional crisis at the time of the abdication of King Edward VIII. So tactfully and ably did Baldwin act in that very difficult situation that, without lessening the friendship he enjoyed with the Sovereign to whom he had been prime minister, he was able, at the same time, to inform the British House of Commons of the situation that had arisen and advise acceptance of the abdication of the king.
I should perhaps also mention the general strike that took place in Britain in 1926, and w'hat was spared Britain at the time, and possibly other nations since, by the able manner in which that situation was also met by Mr. Baldwin. He possessed unquestionably a unique gift of reconciling differences as they arose in his own country. It was one of the great objectives of his life. In that very critical situation his conduct once more was such as to commend itself not only to Britain but to all parts of the British empire.
While sharp differences of opinion exist as to some of the policies of his administration, Baldwin himself was always highly respected for his whole-hearted and selfless devotion to Britain's welfare and to British interests as he conceived them. Patriotism and public service were the watchwords of his career. He was a great Englishman and a great gentleman. He had a close and personal attachment to the English countryside and country life; a keen appreciation of literature, to which he himself made important contributions. His natural simplicity and sincerity of manner endeared him to his followers, and brought him many friends.
So far as Canada is concerned, I might add, Mr. Speaker, that the name of the late Earl Baldwin of Bewdley will always hold a high place in the minds of our people, and, to those who knew him and were privileged to enjoy his friendship, a place of deep affection in their hearts as well.


Mr. JOHN BRACKEN (Leader of the Opposition):: Mr. Speaker, I wish to associate
myself and the party I lead with the tribute paid by the Prime Minister (Mr. Mackenzie King) to a former prime minister of Great Britain. Earl Baldwin was a British prime minister well known to Canada. As our own Prime Minister has said, he was one of the first holding that high position in Britain to visit this country during his tenure of office.
I recall very well his first visit to Canada about twenty years ago. When he spoke in the city of Winnipeg it was from my own window in the second storey of the parliament buildings to a vast assemblage on the grounds outside. I can remember still his interest and the sympathetic manner in which he treated the early history of that part of Canada.
I recall, too, very well his second visit to Canada, I think in 1932. This was at the time of the empire trade discussions in this city. At that time he came 'to us not as the prime minister of Great Britain but as president of the executive council in the coaltion government of Ramsay MacDonald. I recall the great hopes he had for further commonwealth and empire co-operation. It is interesting to recall at this time the faith he had in the encouragement of trade between different parts of the commonwealth.
History will say of Baldwin that he was a generous citizen. It is said of him that he turned back to the state all the wealth it had permitted him to make during the first world war. I think too, that history will speak of him also as a great and typical Englishman, an astute and capable parliamentarian and as one of the outstanding public figures in Great Britain in the interwar period.


Mr. M. J. COLDWELL (Rosetown-Biggar):: Mr. Speaker, death is a great leveller. No matter how high a position a man has held in public life, in the British commonwealth or any other country, he goes the same way as the humblest citizen, and we are reminded of that today.
Like the Prime Minister I do not propose to comment on Mr. Baldwin's record as a ship he enjoyed with the sovereign to whom the time nor the occasion to do so. As to the work that he did, I think it will be appraised in the light of the history of the period through which we are passing. It is difficult to make a correct appraisal of any political leader who has lived over the last number of years and who played a prominent part in the affairs of our respective nations.

House of Commons
With regard to Mr. Baldwin's part and place in the history of world relationships, when all the facts are known of the times in which we have lived the correct appraisal will be made and I propose to leave that to history. But may I say that with the relatives whom he leaves behind we wish to express our sympathy.



PRIVATE BILLS


Mr. RALPH MAYBANK (Winnipeg South Centre) moved:: That on account of the pending adjournment of the house the six weeks' period allowed by standing order 92 for the presentation of petitions for private bills be deemed to expire on Friday, February 20, 1948, instead of on Thursday, January 15, 1948.
He said:	Probably the motion needs no
amplification, but it is presented because of the fact that owing to the adjournment there will be a period of time when petitions cannot be laid on the table of the house. This is the procedure that has been followed at least twice in the past, one occasion being in 1940.


[Stage Direction]
Motion agreed to.


[Stage Direction]
Mr. JAMES SINCLAIR (Vancouver North) moved for leave to introduce Bill No. 4, to amend the Dairy Industry Act.
Motion agreed to and bill read the first time.

William Lyon Mackenzie King: Mr. Speaker, I wish to move, seconded by the Secretary of State for External Affairs (Mr. St. Laurent):
That Mr. William Henry Golding be appointed as deputy chairman of committees of the whole house.
I might draw the attention of hon. members to standing order 56, section 5, which reads as follows:
At the commencement of every session, or from time to time as necessity may arise, the house may appoint a deputy chairman of committees who shall, whenever the chairman ot
committees is absent, be entitled to exercise all the powers vested in the chairman of committees including his powers as deputy speaker during Mr. Speaker's unavoidable absence.
Hon. members will recall that the hon. member for Huron-Perth (Mr. Golding) was chosen by the house for this position at a previous session, and from the many tributes that were paid to him at the time, I hardly need say a word in support of his nomination today. I am sure it is one that will be welcomed by hon. members in all parts of the house.


Mr. CHURCH:: I should like to ask the Prime Minister whether any consideration has been given to giving this hon. gentleman some remuneration for his services. He presided in the committee of supply last session during the hot weeks of July.


William Lyon Mackenzie King: My hon. friend will probably recall that last year I made the suggestion that suitable remuneration should be attached to this position, on account of the many duties it involves and the time and care that the hon. member had to give to the duties of the office. I am sure the house would gladly have made the necessary appropriation, but the hon. member said that he himself preferred not to take any remuneration. I hope that during the course of the present session he will see his way clear to allow the house to give the kind of recognition, financial, or in some other way, that we should like to give.


Thomas Langton Church: Why not give him a decoration? A Cobden medal might be suitable.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mr. J. G. DIEFENBAKER (Lake Centre):: I should like to direct a question to the Minister of Justice. I should like to know whether or not any replies were received from attorneys general of the several provinces and deans of law schools to the question sent to them on direction by the committee on human rights and fundamental freedoms as to the legality of a national bill of rights for Canada. If so, will he table any such correspondence?


Mr. DENIS:: Why don't you write to him?
Inquiries of the Ministry


Right Hon. J. L. ILSLEY (Minister of Justice) :: A few replies were received, and I shall -see that the correspondence is laid on the talble of the house 'before the Christmas adjournment.



INTERNATIONAL CARTEL


[Stage Direction]
On the orders of the day:
Mr. A. E. ROBINSON (Bruce):: I should like to address a question to the Minister of Justice. According to a press report this morning a foreign government has alleged that a Canadian firm is connected with an international cartel. Will our government investigate the accusation?


James Lorimer Ilsley: If the hon. gentleman will direct me to the newspaper dispatch in question, which I have not seen, I will look into the matter to which he refers and advise him-I do not know that it will be necessary to advise the house-of what action, if any, is proposed to be taken.



FOREIGN EXCHANGE CONTROL


[Stage Direction]
On the orders of the day:
Hon. DOUGLAS ABBOTT (Minister of Finance):: On Tuesday last the hon. member for Lake Centre asked me under what act or regulation Canadians crossing the United States boundary are being searched with a view to ascertaining whether or not there are any infractions of the foreign exchange control legislation. He had given me no notice of his question, and I answered subject to correction:
I think that is done in accordance with the provisions of the foreign exchange control legislation.
I find that I was correct in that statement. It comes under section 47 of the Foreign Exchange Control Act.



POTATOES

[Stage Direction]
REQUEST FOR REFRIGERATOR CARS On the orders of the day:
Mr. W. CHESTER S. McLURE (Queens):
I desire to direct a question to the Minister of Transport. It is not about the ferry boat, which is a humdinger. The other day before leaving Charlottetown a delegation waited on me and asked me to ask this question on behalf of the potato growers of the province. When can we get sufficient reefer cars for the trans-
portation of our potatoes in Prince Edward Island? That is the question the farmers asked me to direct to the Minister of Transport.
Hon. LIONEL CHEVRIER (Minister of Transport):: The position of refrigerator cars at the moment is very tight, but I can tell the hon. gentleman that there are more reefer cars on Prince Edward Island now than there has been for some considerable time.


Some hon. MEMBERS:: Oh, oh.


Lionel Chevrier: The trouble with my hon. friend is that he has been so busy in the last few days he has been unable to see what use has been made of the cars.


Some hon. MEMBERS:: Order.


Lionel Chevrier: Perhaps after what we have learned or seen-


Some hon. MEMBERS:: Order.


Lionel Chevrier: -on the island recently my hon. friend will hold his peace for a while.


Thomas Langton Church: You gave them a $6,000,000 car ferry; no wonder you won down there.



INQUIRY AS TO IMPORTATION FROM NEW ZEALAND

[Stage Direction]
On the orders of the day:
John George Diefenbaker: I should like to direct a question to the Minister of Agriculture or to the Minister of Trade and Commerce, I do not know which. It has to do with a press dispatch to the effect that 10,000,000 pounds of New Zealand butter is on the way to Canada at a price, I believe, of 54 cents a pound. Is that a fact?


Mr. GRANT:: It is good stuff to win an election on.


Right Hon. J. G. GARDINER (Minister of Agriculture):: I have no knowledge of any butter on the way to Canada from New Zealand or from any other place. So far as the law is concerned, I am not aware that there is anything that would prevent anyone from bringing butter to Canada.


John George Diefenbaker: But the minister has no knowledge of it?


James Garfield Gardiner: No knowledge of it. TRANSITIONAL MEASURES ACT, 1947



CONTINUATION IN FORCE UNTIL MARCH 31, 1948

[Stage Direction]
The house resumed from Friday, December 12, consideration of the motion of Mr. Ilsley for an address to His Excellency the Governor General praying that the Continuation of

Transitional Measures Act
Transitional Measures Act, for 1947, be continued in force until the 31st day of March, 1948.
Mr. F. D. SHAW (Red Deer):: Last Friday I adjourned the debate on the Transitional Measures Act. It was generally anticipated at that time that the debate would be concluded Friday evening, and this in spite of the fact that we had a rather limited filibuster in one quarter. Were it not for the fact that once again in that debate efforts were made to misrepresent the position that Social Credit-ers have taken with respect to controls and related matters, it would not have been necessary for me to move the adjournment of the debate as I did.
Sir, it is quite obvious that there are still some in this house who, deliberately or otherwise, are endeavouring to create false impressions with respect to Social Crediters, in that they are endeavouring to assert, in the first place, that we favour the return to the laissez faire of irresponsible enterprise of pre-war days. Secondly, they are endeavouring to create the impression that Social Crediters favour the throwing of Canadians completely on the mercy of certain irresponsible private interests who will be free to exploit them; and in the third place I detected that an effort was being made to create the impression that we are quite satisfied to permit the continuance of certain current economic conditions which actually threaten to stimulate revolution within this country.
Let me once again, on behalf of my colleagues here, deny these allegations unequivocally and categorically. Mr. Speaker, the leader of this group stated on several occasions, for those with eyes to see and ears to hear, our reaction to the current economic upheaval in this nation, and also our recommendations with respect to the necessary cures. I must state emphatically that any attempt to emasculate our speeches by the mutilation of paragraphs and sentences for the purpose of creating such false impressions must be relegated to the category of dishonest politics.
Speaking on Friday the hon. member for Weyburn (Mr. McKay) asserted that the government must have been stampeded into what he calls its present untenable position by certain groups in this house. Referring specifically to this group, he stated, as reported at page 258 of Hansard :
No doubt they-
-meaning the government-
-were also influenced by the social credit attitude as expressed by their leader on March 21 in this house when he said: "Social Crediters are implacably opposed to planned controls" . . .
That is not the end of his sentence, but the remainder of it has to do entirely with the Conservative party. That group of words, Mr. Speaker, "Social Crediters are implacably opposed to planned controls" is less than one third of the original sentence.


An hon. MEMBER:: Read it all.


Frederick Davis Shaw: I shall do so. Just prior to the sentence which the hon. member is presumed to have referred to, the hon. member for Peace River (Mr. Low) said:
With us it is not a question of the need of controls; it is indeed a question of what kind of controls.
Then he said, and this is the sentence in full to which I referred a moment ago:
Social Crediters are implacably opposed to planned controls, which enhance the power of the state at the expense of the liberties of the individuals of Canada.
Now I say that t'he eight words quoted to give an entirely incorrect picture and the twenty-six words indicate the position which the leader of this group took on our behalf and the position which we take at the present time. The leader of this group went on, after making tihat assertion, to state that we favour the removal of bureaucratic wartime controls as rapidly as possible-and I would underline the words "rapidly as possible". He then also indicated the necessity for safeguarding the whole political economic and moral wel-ware of our Canadian people. He emphasized too the necessity of taking action to protect the political, economic and moral welfare of our people by introducing, concurrently with the removal of bureaucratic wartime controls, certain effective checks and balances which are inherent in a revitalized and reformed financial policy in the first place. He also laid particular emphasis on the necessity for tax reductions. He also stressed electoral reform, and he recommended the re-application of the subsidies and price discount factors as being one of the most effective methods of bringing prices into line.
Again on Friday the member for Weyburn referred to us, and I find it necessary to take issue with the observations made on that occasion. He said, as reported at page 258:
On the other hand, the C.C.F. requested the government on March 20 in this chamber to retain price controls to keep prices down, but were defeated by a combined vote of government, Social Credit and Progressive Conservatives.
This assertion was challenged by the member for Peterborough West (Mr. Fraser) and
Transitional Measures Act

also by the member for Peace River. The member for Peterborough West said, as recorded in Hansard:
Mr. Fraser:	I think the hon. gentleman
would like to be fair. I do not think he will find any place in Hansard where such a vote was taken.
Mr. Low: When was the vote taken?
Mr. McKay:	On March 20.
Mr. Low:	There never was such a vote.
Mr. McKay:	Yes, there was.
Mr. Fraser:	On the retention of price controls?
Mr. McKay:	Look in Hansard.
Mr. Low:	It is not there.
Mr. Fraser:	It was not called for that
purpose.
Mr. McKay:	That was the essence of the
motion. I submit that this group was reflecting public opinion when that motion was presented to this house last March.
An examination of Votes and Proceedings for March 20, 1947, reveals that on that day the C.C.F. leader did move an amendment to a government motion calling for the continuation of certain essential orders and regulations. The amendment did in effect condemn the government for its so-called headlong decontrol policy and it also called for the reimposition of controls. Votes and Proceedings of March 20 reveal this statement, and I wish to underline and emphasize the statement:
Mr. Speaker ruled the amendment out of order on the grounds that it contravened standing order 50 which precludes all amendment to the main question on a motion to refer a resolution to committee of the whole.
From this ruling the leader of the C.C.F. appealed. The next statement from Votes and Proceedings of that day is extremely significant. This is it:
And the question being put:	Shall the ruling
of the chair be sustained?-it was decided in the affirmative on the following division.
And the division is recorded. After very careful consideration of the amendment, after extremely careful consideration of standing order 50, we came to the conclusion that that amendment was not in order and consequently we supported the Speaker's ruling and nothing else.
I think it is most unfair to endeavour to create the impression, either through a speech in this house or elsewhere, that Social Credi-ters did other than vote to sustain the ruling of the Speaker. I say in all kindness to the hon. member that even with the wildest stretch of the imagination no other conclusion could possibly have been arrived at.
I can conceive of this situation, that the Speaker's ruling may have been challenged

in order to put us in a position where a most fantastic deduction could be made and an impression sent abroad that we voted against the amendment.
There are two further references in Votes and Proceedings to which I think I must refer. On Tuesday, March 18, 1947, all Social Crediters with the exception of the member for Pontiac (Mr. Caouette), who was responding to the will of his electors, supported the extension of the National Emergency Transitional Powers Act of 1945 until May 15, 1947. Votes and Proceedings of the above date confirms this fact. This position was further confirmed by a vote recorded in Votes and Proceedings of March 25, 1947.
Finally, Votes and Proceedings of April 16, 1947, again reflects the fact that all Social Credit members, with the exception of the hon. member for Pontiac-who, I may interject, responded once again to the will of his electors -did by their vote support the government measure for the continuation of certain orders and regulations for a limited period during the so-called national emergency. By declaration in this house, Mr. Speaker, we have reasserted our opinion-and it is not only my personal opinion; it is the opinion of this group-that because of abnormal conditiops the government would have to exercise certain controls over price structures, foreign exchange, imports and exports, rentals, and so forth. In the second place we have said that certain controls or systems of controls employed by the government should be removed as rapidly as possible and be replaced by automatic controls of a more democratic character than many of those which operated during the war. We also emphasized that the controls as we have known them cannot be permitted to be carried on indefinitely. I say personally that controls in themselves can no more cure the economic disabilities which confront this country than can the mere locking in an asylum of an insane person cure him of his mental disease.
Speaking on Friday evening the hon. member for Cariboo (Mr. Irvine), at page 265 of Hansard, made this assertion:
As I said, we have tried to amend this resolution-
Meaning, of course, the resolution to continue the transitional powers act until March 31, 1948.
-and the house has voted down our amendment.
It is the next part that I take exception to: That is to say, the three capitalist parties-
You will notice the emphasis he put upon that word "capitalist," but I think it resulted

Transitional Measures Act
in a case of mental intoxication which sent him completely off the deep end as far as the remaining words are concerned-
-in this nation joined together to vote down an amendment to control the prices to the Canadian people of essential commodities in order that their income might be able to purchase the necessities of life.
Certainly, Mr. Speaker, it cannot be construed that the amendment which they moved on Friday did have the intent and purpose implied in the statement made by the hon. member for Cariboo. Without the amendment the transitional powers act would continue in operation until March 31, 1948; then, with parliament in session, members and parties in this house, knowing what conditions are, say, by the first of March, are in a position to come to a decision as to whether they are prepared to support the continuance of this measure or not.


Mr. LOW:: The usual socialist drivel.


Frederick Davis Shaw: I say that arriving at a conclusion of that kind, putting it in Hansard and sending it out, is a vicious sort of thing; in fact, I would almost say it is an obnoxious sort of thing. I heard someone say just now that it was diabolical in character, but I would not want to use those words, because I realize that they are possibly not parliamentary. As I have emphasized, that amendment simply asked for the extension of the emergency powers for a twelve-months period rather than a three-months period. I think I have made our position perfectly clear with respect to that matter. Certainly the past record of this group, as I have indicated, with respect to the whole question should satisfy all of our willingness to support such extensions when the government can justify the necessity for such extensions. The hon. member for Cariboo would be the first to admit that the mere granting to the government of an extension for twelve months does not guarantee that the government will do the things necessary for the establishment of a proper price realizationship and thus assure the people of this country that they can buy the essentials of life.
I want to give one other reference to what the hon. member for Cariboo stated. He is reported at page 265 in Hansard as follows:
I would suggest that neither the government nor the opposition that is before me nor the opposition that is behind me-
Meaning us, of course.
-would be prepared to submit the question before us in the form of a plebiscite to the Canadian people and abide by what they said.
The hon. member for Peace River made it abundantly clear right at that moment that
we would be perfectly happy to have the matter submitted to the Canadian people, in proper form, naturally. What I take strongest exception to are these words, "and abide by what they said." I assure you, Mr. Speaker, that there is absolutely no instance on record of the members of this group not having abided by public opinion, where that public opinion was expressed clearly and effectively. I recall that it was not many years ago that a plebiscite was held in this country. We did not approve entirely of the wording of the plebiscite question, but when the Canadian people voted in the affirmative in support of the manpower plebiscite we came into this house and certainly supported the decision as expressed by the people. But I must say at the same time that, if memory serves me correctly, my hon. friends of the C.C.F. party did not do that. Again, if memory serves me correctly, they voted against the National Resources Mobilization Act.
Before proceeding further, Mr. Speaker, I want to re-emphasize what I said a moment ago. We have no fear whatsoever of a plebiscite, and the people can feel assured that we are prepared to carry out the decision which they render, should such a plebiscite be held.
Un Friday we all listened with a good deal of interest, as we always do, to the hon. member for Cape Breton South (Mr. Gillis). I always try to be in the house when he speaks, because with much that he says I thoroughly agree. I am not taking exception to anything except a possible conclusion he arrived at. I do not believe, for one moment, that my hon. friend should take the results of government bungling on the one hand and of the activities of certain irresponsible private enterprisers within the country on the other, and on the basis of that advocate the nationalization of Canadian industry. Like the hon. member for Cape Breton South, I represent miners, along with others. As has been indicated to me, the miners of my constituency are not favourably disposed towards the nationalization of industry as expounded by some people in this country. I believe they have taken their lead from John L. Lewis, the president of the United Mine Workers of America. Writing in the Canadian Mine Worker, which is the official organ of district 18 of the United Mine Workers of America, on the occasion of the birthday of that publication in 1944, Mr. Lewis said this-and I think his words are most significant; I think
Transitional Measures Act

labour in this country should take note of them and give the most careful consideration to them. Mr. Lewis said:
Labour must guard against the inroads and acceptance of benevolent fascism as a substitute for sanely and honestly regulated free enterprise. A paternalistic bureaucracy, now so widely exercised as part of our war effort, must not be permitted to hold over and become the governmental yardstick and doctrinaire policy of our transition period. Labour must stand united as never before for the maintenance of its social gains and fight on every hand the imposition of regimentation which flows from the altruistic concept of nationalization programmes which shackled the workmen of Europe into fascism and nazism, and which eventually generated economic injustices into a world wide conflagration.
In those words John L. Lewis set forth my view with respect to this matter as well as I could state it myself.
Just before coming into the house my attention was drawn to another matter which I think is tied in with this subject, 'because in connection with controls we have the advo-lacy in some quarters of nationalization, socialism or whatever you wish to call it. I have here a clipping from the Montreal Standard of December 13, 1947. Apparently the hon. member for Rosthern (Mr. Tucker), the parliamentary assistant to the Minister of Veterans Affairs, spoke to the Reform club of that city at luncheon on Saturday, and this is the newspaper report of his remarks-I am not pretending to quote him verbatim:
Tucker declared that the Liberals are enemies of communism-
I doubt that, to start with.
-and other subversive doctrines. They oppose the socialist doctrines of the C.C.F. and social I
Such downright poppycock! What complet dishonesty in reference to social credit!
-but support the individual rights of privat initiative and promoted social legislation whic will take care of the poor and needy.
I say to the hon. member for Rosthern that this comes with mighty ill grace from him, because it is my contention that through certain policies applied by this government in recent years, and supported by him, the soil has been fertilized in which the communists lay the eggs from which they hope their little totalitarian serpents later will hatch. There is no group in this house or this country that has taken a stronger stand against communism than we have. There is not a group in this house or in this country that has taken a stronger stand in support of private enterprise than we have. For the hon. member for Rosthern to make a statement of this kind is pure and sheer political dishonesty.

Just in passing that reminds me of another statement made in Edmonton by the Minister of National Health and Welfare (Mr. Martin), in which I believe he referred to social credit as a cancer in the body politic, or something like that. All I want to say to the hon. gentleman is that even though he is Minister of National Health and Welfare, and even though he may have the finest body of advisers, he will not 'be able to remove that so-called cancer. I can assure him of that.
Some of the statements made in the west by cabinet ministers are extremely interesting. These hon. gentlemen ought to scout around a bit after it is presumed they have left for Ottawa, and listen to some of the comments and observations made by the people to whom they have spoken. It would' not enhance their prestige at all. Generally speaking these fellows are likeable chaps. Returning for a moment to the hon. member for Rosthern, in this regard I would refer him to his own minister, of whom the hon. member for Lake Centre (Mr. Diefenbaker) said at page 191 of Hansard:
You know, sir, that the first move of a socialist in order to bring in a socialist economy-and sometimes as I look at the Minister of Veterans Affairs (Mr. Mackenzie) I wonder how he feels at being an instrument for bringing in socialism in our country-
The minister replied:
Very proud of it.
Of course he quickly qualified that remark by saying that if he had to choose between socialism and some kind of Toryism which he mentioned, he would take socialism; nevertheless the following day, though I have not the quotation at the moment, he reaffirmed his position in that respect. I would not take issue with him at all, because I believe he has contributed very substantially toward bringing socialism into this country.


Mr. ZAPLITNY:: Does his parliamentary assistant help him at all?


Frederick Davis Shaw: I think he is an important contributing factor.


James Garfield Gardiner: Mr. Speaker, I would ask the hon. gentleman to withdraw something he said, since the hon. member for Rosthern is not in his seat. If I understood the hon. gentleman correctly he said a few moments ago that the hon. member for Rosthern was politically dishonest.


Some hon. MEMBERS:: No.


James Garfield Gardiner: That was how I understood it.

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Frederick Davis Shaw: I said the act could be categorized as a politically dishonest act.


James Garfield Gardiner: What is the difference?


Frederick Davis Shaw: I am perfectly willing to withdraw as far as the record is concerned, but I assure the minister I still have that opinion.


James Garfield Gardiner: That is all right, but as I understand it a member of this house cannot say that another member is dishonest.


James Lorimer Ilsley: On the point of order, Mr. Speaker, I think I was derelict in my duty in not rising immediately that remark was made. I was very much surprised to hear the hon. member say something was downright dishonesty, which was as I understood it, and certainly that should be withdrawn.


Frederick Davis Shaw: I have no desire to do anything to offend Your Honour or the house, but I want to get the record perfectly straight. I am sure the minister can realize how I felt on reading the statement reported to have been made by the hon. member for Rosthern. As a matter of fact I am surprised that I kept my language so moderate. However, I am perfectly *willing to withdraw anything that may be offensive to the house.


James Garfield Gardiner: Withdraw the statement that he was dishonest.


Frederick Davis Shaw: It might throw the whole sentence out of kilter if I withdrew just one word.


James Lorimer Ilsley: The hon. gentleman's duty is quite clear; it is to withdraw the words "downright dishonesty," or the word "dishonest," because certainly it cannot be used.


Frederick Davis Shaw: I think the record as it was taken down should be examined, because that might result in the complete mutilation of something that should not be mutilated. On the other hand I did not intend to say the hon. member was dishonest but that I thought the statement could be characterized as such.


James Garfield Gardiner: The hon. gentleman said that this was downright political dishonesty. If he wants to change that to "downright political" it might be all right, but he should not use the word "dishonest."


Mr. JOHNSTON:: Well, it may have been.


James Garfield Gardiner: But you cannot say a member of this house is dishonest.


Mr. SPEAKER:: As I understood the hon. gentleman, he did not directly accuse the hon. member for Rosthern of having been dishonest; if I understood him correctly he said it was an act of political dishonesty. Since it is the duty of the Speaker to protect freedom of speech in this house I did not intervene when the hon. gentleman made the statement to which I have referred, but my attention having been called to it by the Minister of Agriculture, I believe the hon. member should find another expression to use,, because what he has said really constitutes an imputation.


Frederick Davis Shaw: As I indicated earlier, I do not want to say anything that might be considered unpleasant by the house. I shall be glad to withdraw the word, although it is; hard for me to do so. I respect Your Honour and the house, and I shall withdraw it, but I would ask that I not be required to withdraw the whole statement. I believe the ruling should be limited to that word, and it has been suggested that I use the word "skulduggery".
I shall conclude with just a word or two. It is a fact that the people of my constituency are not satisfied with current economic conditions. The farmers are simply furious about the situation which has developed in the livestock industry. We have seen a virtual liquidation of whole herds, and breeding stock is. moving to the market, I was going to say by trainloads, but at least by carloads. In a district like Red Deer, which is such an important mixed farming area, that becomes a serious situation. Farmers have urged me to register the strongest protest, and I do that now.
The consumers back there deplore the ever-increasing cost of living. We say that the government must do something about it. They have our suggestions and we hope that they will take action. There is also a multiplicity of little aggravations which are wrapped up in what I would refer to as Liberalism. Back home they are no longer betting whether the Liberal candidate will win Red Deer constituency the next time; the betting is whether he will beat the communist who got only 600 votes in 1945.


Mr. J. R. MacNICOL (Davenport):: Mr. Speaker, just before coming to Ottawa to attend this session, with the hon. member for Greenwood (Mr. Massey) I attended a meeting of local 514 of the united electrical workers, held at 175 Bathurst street, Toronto, and presided over by John Rowley and addressed by Ellis Blair. I must say that I enjoyed attending this meeting at which there were present 100 to 150 men and women, apparently all of whom were employed in factories in Toronto, many of them in Davenport riding according to the names I saw there.
I think I can compliment them upon their ability to express their opinions and to line
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up an argument to support what they believe to be correct. I doubt if I would have said anything about this had it not been that a local labour paper called the UE News contained what I thought was a fair article dealing with the attendance of both of us at that meeting. The article was headed:
MP's meet with Toronto UE members but won't sign prices petition.
We were both asked to sign a petition. I thought the petition in principle was quite fair, but I told them that I did not believe it was right for a member of parliament to sign a petition. I said that I felt a member should go to the House of Commons with his mind wide open, ready to listen to any argument for or against what came up on the floor of the house. Therefore I declined to sign the petition and so did my colleague, the hon. member for Greenwood. I think that was a fair position to take. I am glad to be able to say that the reaction of most of those present was, in my opinion, in agreement with a member of parliament taking that position.
Much of what I heard there that day I can agree with, and much of it I have heard expressed by hon. members sitting to my left, more particularly by the hon. member for Winnipeg North (Mr. Stewart). In saying that, I do not want him to think I agree with most of what he says, but I can agree with some of the things that he has said.
In the first place, I wish to say that I am going to support the resolution before the house. I think my leader has given a plain, well spoken and clear statement of the position of this party. I support him in that and I shall vote accordingly.
My whole life has been spent with working people, and I was one myself for many years. I want them and I want the people whom I represent to feel that I believe my duty here is to be fair and square to everyone and to all classes. I do not want to give my support to any one class; I feel that I should support whatever I think is right.
One of the ladies present, a very bright little woman, expressed almost word for word what the hon. member for Winnipeg North said about refrigerator prices, but in her case she was relating her own experience. The hon. member for Winnipeg North referred to someone in Montreal who had this experience, and I have no doubt that many people have had similar experiences, namely, that at the present time there is little stability in refrigerator prices.
The last time I was in England was at the time of the coronation. At that time I
[Mr. MacNicol.1
obtained a copy of an act-unfortunately I have not been able to find it-which had been passed by the government there. I do not know whether this act is still in operation and I cannot recall clearly what was in it. My impression is that it provided some machinery whereby the buyer of any article who felt that he had been overcharged or gypped could apply to a board or a committee to find out if. he had actually been over-charged. If there had been an over-charge, a penalty was provided. If that act is still in force in Great Britain I am sure the authorities here could ascertain what has been its effect. If the effect has been good over there I believe it would be equally good here.
When I was home on Saturday I saw a bill which had been presented to a working man by some repair man who had performed some service in his house. I thought it was a tremendous bill for the small amount of work that had to be done. It may not have been too large because I suppose one would have to have all the facts before he could say whether there was any extortion. On the other hand, I believe the public should be able to ascertain whether they are being overcharged or whether extortion is being practiced. I do not know whether you would call this price control and I do not know what (hey called it in England.
In addition to attending that meeting of union members, I received, just after coming here, many' wires from different unions along the same line as the information given to me at that meeting. One was from local 252, signed by the president, A. P. Burke; another from local 717, signed by the president, E. Kriek; another from local 725, signed by the president, A. Addison; another from local 753, signed by the president, A. Johnston; another from local 870, signed by the president, R. McArthur; another from local 919, signed by the president, W. Burns; and another from local 975, signed by the president, Victor Emby.
I mention those only to show that there is a very widespread feeling over the high prices people have to pay for the necessities of life today. How they are to be controlled I do not know. I am a great believer in free enterprise and I believe that by and by the matter will regulate itself, but at the moment prices are undoubtedly very high.
On Saturday last someone I know well went into a boot store to buy a pair of shoes which he had been in the habit of buying for $11.50. The merchant told him that the price had gone up to $13.50. When the buyer expressed surprise at the price jump the merchant said,

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"The salesman for the firm that supplies me with these shoes was in this morning and told me that after such-and-such a date the price will be SIS." After that conversation I asked the merchant why the big jump from SI 1.50 to $13 50 and the proposed jump from $13.50 to $18? He said, "These are American shoes and they cannot be imported now, and any price can go.'' Whether the government has power to regulate the price of any particular item or not I do not know, but certainly $18 is a very high price to pay for a pair of low shoes. So apparently there is reason for much of tlie uneasiness throughout the country over prices all along the line.
The hon. member for Winnipeg North (Mr. Stewart) in his brief remarks, which on the whole I found not unfair, followed his usual line when speaking of business and industry. I would have thought that a man with such a fine name as Alistair Stewart would not intentionally say anything unkind about anybody, but his expressions toward industrialists were certainly not very kind.
I listened with interest to what my leader said a few moments ago when eulogizing the late Lord Baldwin. I was acquainted with the late Lord Baldwin. He was engaged in the iron and steel business in Great Britain on a large scale and we had some acquaintance because I, too, was in that line of business at one time. I like to think of his generous action in turning back to the national treasury of Great Britain all the profits that his great company made during the war from iron and steel, of which they were large producers. They had a plant in Toronto. I would tell the hon. member for Winnipeg North that there are many manufacturers like that, many with whom I am personally acquainted. I know many who refused to accept profits during the war. I do not like to hear all manufacturers branded with the same mark, that they are all bandits and everything they should not be. On the contrary, from my considerable experience I have found most of them to be men of true Christian principles in the main who command the respect of the people they serve and those with whom they work and of the community in which they live. So I would suggest to my hon. friend not to brand everybody as he does.
In my youth I was associated with labour unions and I can say that I have always respected the stand taken by the majority of labour leaders. They should not all be branded as being everything they should not be. The vast majority of labour leaders, I can say from my experience, are against strikes and do what they can to adjust differences so as to prevent strikes, knowing from experience that a strike does not help everybody. They make every effort to protect the men they represent. There may be the odd one who would like to see a row, but they are not all like that by any means. There may be the odd industrialist who does not avoid a row. But in the main both labour leaders and industrial leaders are men of the very finest character and both do a great deal for industry and the unions, building up industry on the one hand and getting better labour conditions for the men on the other. So while I think well of much that the hon. member for Winnipeg North said, when he attacked industry holus-bolus, I could not support him.
I said a few moments ago that I did not sign the papers which were presented to me to sign. This is not the exact paper I have before me. This one was sent out by the Labour Progressive party, which, too, has something worth while in it. I am not going to denounce all it says and does because it has some good points. These are similar to the proposals they asked me to sign:
(a)	Prohibiting any further price increases.
I could not sign that. I would have to have placed before me the arguments for a particular price increase and the arguments against it. Perhaps there are arguments for a price increase on many goods. I could not sign that proposal holus-bolus. The next one is:
(b)	Re-establishing price controls.
I could not sign that. A lot of controls should have been lifted long ago. A lot of controls have been removed and the minister has given reasons why the controls should be off. I am not expressing any opinion at the moment whether controls should be on or off. I am in favour of extending power to the government to continue certain controls up to March 31, and when that time comes along I shall have to make up my mind again if a further extension is asked. I am not against everything. The next one is:
(c)	Restoring governmental subsidies on essen-tal consumer goods where necessary.
There again I would have to have presented to me the reasons in favour of a particular subsidy and the reasons against it. In other words, Mr. Speaker, I know that you, too, have often been asked to sign petitions. Personally I do not take very much stock in petitions. I had brought to my room the other day a pile of petitions containing I do not know how many thousands of names, and later presented by the hon. member for Winnipeg North. A lot of those signatures would
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be given in good faith but the majority of them would be given without inquiry whatever. The next proposal is:
(d)	Prosecution of those found guilty of profiteering.
I am in favour of that. I will support the prosecution of anyone found guilty of profiteering. I believe that was the real motive behind the bill in Great Britain some years ago. I do not believe that profiteers, men who deliberately and cold-bloodedly raise prices beyond what they should be, should be allowed to go scot-free. No, Mr. Speaker. For years and years I have studied everything I could study and travelled far and wide and discussed with the sanest labour leaders what legislation could be brought into the house to ensure labour receiving an adequate return. And industry should be able to obtain a reasonable profit on their investments, so as to design and promote expansion in building up the country. Surely to goodness there is some way to do it, and I hope when the government bill pertaining to labour comes into parliament after we resume in the new year we shall have some legislation which will ensure to the investor and to labour fair play. They both are entitled to it, and the country will prosper best and fastest when both have it.
I did not rise to make any extended speech but I wish to make two -more comments. I wish to refer, first of all, to what the hon. member for Winnipeg North said about the lack of price control in this country. I find that in Russia they have the same difficulty as we have, and I am not going to blame the Russians for it. I am one of those who have a high regard for the Russians. I have had a lot to do with Russians because many of them made good moulders and good machinists in the business with which I was associated. I always took pleasure in helping them the best I could. I find that the Christian Science Monitor in its Saturday's issue quotes from the July number of "Monthly Labour Review" of the United States department of Labour having to do with matters in Russia. I am not criticizing Russia, but this article quotes Russian prices and compares them with United States prices. It shows that the average working man's wage in Russia is 500 rubles a month. I had an official telephone the Bank of Montreal this morning and ask how much a ruble is worth today, and the banker replied 18-86 cents; therefore anybody can ascertain from that fact how much labour gets in Russia. All he has to do is to multiply 500 rubles by 18-86 cents. The amount is nothing like what labour gets in Canada. I wish they got more, over there; I

hope the time will come when they will get more. Then the worker out of his small return has to pay infinitely higher prices for what he buys than we have in Canada, which goes to show that even under a socialist government-and I am not talking now of socialism or capitalism-prices are away higher than they are in this country under a free enterprise government. This also goes to show that .prices are something which you cannot control as you might like.
The Russian pays a minimum of 800 rubles for a suit of clothes. Judging by the pictures of the Russians I have seen on the street they are not wearing the same type of clothes as we are over here. I do not know what a Canadian suit would be' worth in Russia, but according to this, 800 rubles at 18-86 cents per ruble it would amount to a very high price. And it goes all the way down the line. A pair of men's shoes cost 270 rubles. Well, when I heard on Saturday that in a short time low shoes will be $18 a pair in Toronto I was surprised, but the Russian is paying many many times that when he pays 270 rubles at 18-86 cents a ruble. Women's clothes, men's shoes, coats, radio sets, phonographs and so forth are all at much higher prices than they are here. I am not blaming the Russian government for that. They have problems about which I know nothing; they have costs about which we know nothing. In like manner I wish to say, mostly to my hon. friends on the left, with whom I 'have little fault to find so far, that I should like to see them be not so all-embracing in their denunciation of capitalism and of industry. What would this country be without industry? The city of Toronto, which has a population today of almost a million, would have a population of perhaps ten or fifteen thousand.
Somebody said something the other day about control of goods coming into this country. Before the bill having to do with importations is brought down I hope that a lot of care will be given to it. In Toronto and Ontario we have no fewer than 2,000 businesses large and small, handling mostly United States goods. One gentleman came to see me when I was home a few days ago and told me that if such-and-such a control went through he would be forced to close. He said that he had a small business employing fifty-three men. He had built up that business over the years, and it will be too bad if he is forced to close. He is only one of several men who came to see me with the same story. I want to support the Minister of Finance (Mr. Abbott) in a program of trying to conserve United States dollars because it is patriotic to do so. On

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the other hand, I hope that he will listen to arguments so that his program will not wipe out too many of these businesses handling United States goods.
I should like to say a word on controls in connection with old age pensions. The other day there came to see me a neighbour lady who is eighty-four years of age. She is a dear old lady. She lives in a small, humble home. All her lifetime she was thrifty because poverty made tier thrifty and she had nothing to waste. Out of her small earnings she was able to save sufficient to buy a small home. Now she owns it. She has a very small income and has been able to put two or three hundred dollars in the bank. She rents the upper little flat in her home for $16 a month. That is the total on which she has to live. She asked me if there was not some way by which she could receive some return without surrendering the title to her house. I hope, when that subject comes before parliament, that control will be wiped out, the control which obliges an- individual to surrender the title to his home before obtaining the old age pension. That is all I have to say. I hope that, when that bill comes in, that particular control will be wiped out and the old folks will be given the opportunity of obtaining the old age pension without surrendering title to their homes.


Mr. E. G. McCULLOUGH (Assiniboia):: Mr. Speaker, the government resolution before the house seeks extension of the emergency powers until March 31, 1948. The hon. member for Davenport (Mr. MacNicol) has decried the rising cost of living, and in the course of his speech apparently supported some of the things advocated by Tim Buck. I may just say that it seems we are coming to a queer state in Canadian-


John Ritchie MacNicol: Will the hon. member allow me to interrupt?


Edward George McCullough: Certainly.


John Ritchie MacNicol: The hon. member is taking a wholly wrong opinion of what I said. I did not express any opinion on what Tim Buck said, other than that I respect everybody's opinion. I merely read what was in the circular which I was asked to sign and which I refused to sign. I do not want the hon. member to be smart and try to mix me up with Tim Buck.


Edward George McCullough: I had no intention of being smart or clever, but I have been confused with the attitude taken by the hon. members to the right. I do not wish to take any time in discussing it at this
time. The record speaks for itself. The speaker who preceded the hon. member for Davenport did just two things. In the course of his address he devoted almost his full time to attacking members of this group. He said that he was implacably opposed to planned control. I should like him or some other member of his group at some time to tell us, if he does not believe in planned controls, what kind he believes in. In my opinion if the controls are not planned they are unplanned.
We have before us one of the most serious situations in Canadian history. There is no doubt about that. The decontrol policies of this government have led our Canadian economy into a crisis. Before coming here I talked with many people from various walks of life. Our farmers particularly are enraged at the government's decontrol policy, as I have never seen them on any other occasion. They are opposed to putting coarse grains on the Winnipeg grain exchange, for once again we have the grain exchange gambling in our farm products. Moreover, the farmers are greatly disturbed because in many instances, owing to the increased cost of production, they are forced to wring the necks of their chickens or else continue to produce at a loss.
The opening of the grain exchange for coarse grains came at a most inopportune time so far as western farmers are concerned, when half or more of the coarse grains had already been put into the hands of the grain companies and of speculators. A neighbour of mine told me that prior to the opening of the Winnipeg grain exchange he had sold 4,000 bushels of coarse grains.
The policy of the government is striking at the very heart of democracy in this country. This particular man of whom I speak fought in the first great war for democracy in Canada and for our Canadian way of life. He lost his own son in this last war and he has another son who came back and is now trying to make a decent living in Canada. Yet we find this sort of thing happening to him.
Before getting on the train I had a talk with a veteran of the two wars. He is now trying to make a living taking mail from the station to the post office, and he is doing the best he can to augment his income by running a small poultry farm. He tells me however that since the controls on coarse grains have gone off, his cost of production has risen so high that he is forced either to destroy his flocks or to produce at a loss. That is the result of the government's policy.
We cannot simply stand by to wait and see, as the Minister of Finance (Mr. Abbott) has suggested during this debate. It seems that
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the government will not take action, notwithstanding the fight that my colleagues are making for the reimposition of controls in order that something may be done for western farmers, and for the farmers of the east as well. Such is the situation in the west today that the farmer there has no faith in the future of agriculture.
During the war the Minister of Agriculture (Mr. Gardiner) advised the western farmers that in order to keep the British market for hogs, we would have to go into stable production of these animals, and in the latter part of the war many people like myself put in costly electric fences, self-feeders and piggeries, but we found that as a result of the policy with respect to coarse grains, whereby we could not get a drawback, we were forced out of production. Hundreds of farmers in the west abandoned production in this direction and consequently the output of hogs fell. That was a sledge hammer blow to livestock production in the west.
As a result of the recent decontrol we find that, owing to the removal of the coarse grain subsidies the eastern farmers have been placed in the same position so that they are having to slaughter young pigs or to sell them at the ridiculously low price of $1 or $2 per head. Today in consequence of this, the Canadian farm economy is on the brink of ruin, simply because the government stands by and says we must "wait and see", presumably waiting for some word from the United States as to what we should do in this country.
I have great respect for the United States, but when any country will destroy 8,200,000 bags of potatoes, as was done in the United States last year, when the world faces starvation and when such a man as Sir John Boyd Orr, chairman of the agricultural and food committee, is endeavouring to get all the food obtainable for millions of people, it is time that we did something on our own behalf. We can have our own economy planned so that we may play our part in rehabilitating the peoples of Europe.
Today the peoples of Europe are faced, not with a passing hardship; their situation seems just now to be hopeless. Today we are fighting for democracy in Canada, and unless we answer the challenge that faces us, I do not see what hope there is for all classes who are suffering from the policy of the government.
I have dealt with the effect of the government's policy on the farmers. Let me mention the veterans. There are two classes of veterans who are hard hit by the action of this government. Last year when we were discussing these various measures in the house, I pointed out that lumber was being allowed to go out

of the country and that the exporters had made a profit of 90-3 per cent. One of my friends-on that occasion asked "What did they pay in taxes?" As far as I am concerned, it is not what they pay in taxes that counts. I submit that so long as we allow unbridled free enterprise to take precedence of human rights and a decent standard of living for the masses we shall have to urge that something be done to help these people.
What about old age pensioners? This government saw fit last year to add $5 to the old age pension, but that was wiped out by the increase in the cost of living. Today the government has a budget surplus running from $925. million to something like one billion, and out of that surplus it is only fair that the older people of the country should receive some additional allowance. The government is taxing people to such an extent that there is a surplus of nearly $1,000 million. Surely it is time we did something on behalf of the older citizens of Canada.
What about the workers? As soon as I heard about the decontrol policy of the government I wrote to the Prime Minister (Mr. Mackenzie King) suggesting that- if we had increased industrial unrest in Canada the fault could be laid at the door of the federal government. I repeat that today. If we allow the cost of living to go up as it has done during the past months, and particularly since the decontrol measures of the government have come into force, we are bound to have unrest in the country, and there is no solution except for the workers to go on strike or to ask for higher wages. Profits are soaring, and the cost of living is going up with them.
According to the Labour Gazette of October 19, 1947, the cost of living has been going up 2-8 per cent per month. As of October 1, 1947, the cost of living, as measured by official government sources, was 19 per cent higher than in 1945, and the cost of living rose in the three months prior to October 1 by 5-2 per cent. This is having an adverse effect on the whole Canadian economy.
During the war w-e found that of those who were being inducted into the army over forty per cent were suffering from malnutrition. The government decided to put a subsidy on milk, and last year when we asked that the subsidy be continued they flouted the will of parliament and removed it, and this in spite of a large surplus. We find that in 1945-46 according to government figures, food consumption in Canada had dropped 3-5 per cent, and in fluid milk in Ontario alone it had

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fallen 4-5 per cent from September 1946 to September 1947. Now we have another increase effective December 1.
I do not want to labour the point, but profits have increased 60 per cent in 1946 over 1945, and the first seven months of this year show further increases. While this is going on our people are having to buy less and less, and they are worried as to how they are going to make ends meet. I do not say for one moment that we in this group are the only ones concerned about this matter. I know that on all sides of the house there are those who appreciate the difficulties which our people are going through.
I might just say here that even the Prime Minister knows of the difficulties facing our people. In his book which he wrote eighteen years ago, he has this to say:
Humanity has rights superior to those of industry and nationality. For their ultimate solution, industrial and international problems must await the inspiration of a universally accepted faith in human brotherhood . . .
Industry must be thought of not primarily as an arena of competition for material rewards, but as a form of social service . . . Industry must be made to serve humanity; humanity must no longer be sacrificed to the demands of industry.
I can only say to him that to some of us it would appear that is what is going on today, namely, that humanity is suffering in order that profits can be made. During the war and after the war we decried the fact that this government did not have a planned economy. We said that if we were going to swing our war economy into a peacetime economy so that we could have a. rising standard of living for our people, it would be necessary to plan that. But in spite of all our pleadings and admonitions to the contrary, this government saw fit to sell our plants down the river and because of that we find we have rising costs of living. To give just one example, there is the matter of fertilizer. I am not going to speak very long on that matter, but I want to bring it to the attention of the Minister of Agriculture. The farmers' costs are going up, even in the maritimes, where they have to buy a good deal of fertilizer. The cost of ammonium nitrate has gone up from S60 to $91 per ton f.o.b. their stations. The whole difficulty is that today we have an economy predicated on profit and not on human values. I want to appeal to hon. members on all sides of the house. The issue is quite clear. To the political democracy we have we must add some of those things which we fought for, among which are social and economic justice.


Mr. ANTHONY HLYNKA (Vegreville):: If no one interrupts me, Mr. Speaker, I shall be only about fifteen minutes.


James Garfield Gardiner: Tell us what you are going to say.


Solon Earl Low: That is not a threat.


Anthony Hlynka: But if someone should break in, I might take my full forty minutes.


Mr. KNOWLES:: Threats are not allowed.


Anthony Hlynka: Under this resolution the government is asking for the extension of emergency powers for another three months, until March 31, 1948. That is the only question before the house at the present time. In other words, after the resolution carries, as I believe it will, the government will neither be committed to controls nor pledged to abolishing them, except as was indicated in the blunt statement which the Minister of Finance (Mr. Abbott) made in another debate. However, our C.C.F. friends seem to have such great confidence in what the government will do that they offer to give the government an extension of emergency powers for the whole year-that is, until December 31, 1948. Such confidence seemed to surprise even the Minister of Justice (Mr. Ilsley), but it did not surprise any one in the Social Credit group. To us the reasons are obvious. The leader of the Social Credit group (Mr. Low), the hon. member for Battle River (Mr. Fair) and the hon. member for Red Deer (Mr. Shaw) have, I believe, placed on the record the position of the Social Credit members of parliament on the question of the extension of the emergency powers of the governor in council. I need touch on only a few additional points and perhaps stress several of those that have already been mentioned.
But before dealing with these matters I should like to say, as has already been pointed out, that this group supported the granting of the emergency powers to the government last year and also supported essential controls. We did not support abusive controls, but rather maintained that controls should be exercised over some controllers. On this occasion we take the same stand and favour essential controls. We now have before us the resolution to extend the emergency powers of the government for another three months. I will support the resolution, but may I ask this question: extension of emergency powers to do what? To allow a twelve and half per cent increase in the price of farm machinery? To allow a thirty per cent increase in the already unfair scale of freight rates? To discontinue subsidies on coarse grains, and to lift without
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warning the ceiling on the price of coarse grains? To discontinue subsidies on certain essential foodstuffs? Or, by way of agreements, to keep down the price of everything which the farmer has to sell and to allow the sky to be the limit on the price of articles which the manufacturer has to sell? In a word, what does the government intend to do with these emergency powers? These are questions which the government should answer before the vote is taken.
I should like to say two things with regard to the price of wheat. First, the government's wheat agreement may be adjusted if need be. But what is unfair about the agreement is that the farming population alone stands to lose the difference between the agreement price and the world price, whereas this difference should be borne by the entire nation and not by the wheat grower alone. In the second place I wish to point out that the Canadian wheat grower would not mind receiving for his wheat a price lower than the world market price if he were guaranteed a parity price for farm products in the future. But so far the government has failed to indicate what the farmer may expect in future years. For that reason it is unfair to expect the Canadian farmer to sell his wheat below the world market price.
On Thursday last the Minister of Agriculture (Mr. Gardiner) gave his reasons for lifting the ceilings on coarse grains on October 21 instead of on September 21 as might have been expected. The minister gave us, as an -excuse, the meat strike. But why should the farmers be the losers because of any meat strike? In regard to the lifting of the ceiling on coarse grain, I might also say that the greater number of farmers who were hailed out, or dried out, turned to hog raising. They bought grain, fed it to hogs and had hoped to make ends meet until the next crop year. The government's action has now placed them in bankruptcy. The government should make up this loss to those who suffered by reason of the government's move.
I have two telegrams which I should like to read, indicating the present mood of the farmers. The first is as follows:
Farmers this district strongly protest inadequate returns to livestock producers. Urge increase in prices by subsidies to livestock producers, opening of United States markets and re-negotiation of British contracts.
That is signed by R. Henning, president of the Josephsburg local, United Farmers of

Alberta. The next telegram I want to read, making the same request, is as follows:
Immediate action urged on government to adjust price of livestock in relation to feed grain returns.
That telegram is signed by M. W. Cassidy, of Vegreville. I also have a few newspaper clippings, one of them containing a quotation from the remarks of the Minister of Agriculture (Mr. Gardiner) to the dominion-provincial conference on agriculture, as follows:
I am authorized to state that some action will be taken which will result in prices rising on products fed from grain which will take care in future of the increase brought about in feed costs through the removal of ceilings and withdrawal or drawback of subsidies.
The same newspaper report goes on to say:
It is expected the British contracts will provide for reduced shipments of meats, partly because of an anticipated decline in Canadian production of livestock next year and partly because of Britain's shortage of dollars.
I want you, Mr. Speaker, to keep in mind the phrase "because of Britain's shortage of dollars." Then the article goes on:
This suggestion received support yesterday in London dispatches which quoted informed sources as saying that a complete cut-off in bacon imports from Canada appears in prospect unless new financial arrangements are made with the dominion.
That clipping was from the Edmonton Bulletin of December 3, 1947, and was a Canadian Press dispatch by George Kitchen. The next clipping I should like to quote is taken from the Toronto Evening Telegram of December 12, 1947, and is a Canadian Press dispatch from London:
Canada and Canadian farmers need a gesture from us-
That is, from Britain.
-to convince them that there is something stronger than merely commercial considerations linking the dominion and the mother country.
The final clipping to which I want to refer is from the Ottawa Journal of December 11, 1947. The headline is, "Russia agrees ship grain to Britain." The dispatch states:
Russia has agreed to ship Britain a "substantial quantity" of coarse grains from the 1947 harvest, Harold Wilson, president of the board of trade, announced today.
Then the article goes on to say :
We also agreed that in May next there should be further discussions to prepare long term supply arrangements over a wide range of goods providing for balances in the program of trade between the two countries.

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Our aim was to secure a long term balance in trade and financial transactions, and there was no question of payment by either side in hard currency.
You will remember, Mr. Speaker, that the article I quoted from the Edmonton Bulletin contained the suggestion that the trade agreement as between the United Kingdom and Canada presented a difficulty as far as money was concerned. Now we are told that in the agreements which have been reached and which are likely to be reached in future between the United Kingdom and the Soviet Union, money is not an immediate problem. That just goes to prove that if Canada does not keep her head and does not do some serious thinking we are going to lose the best market we ever had. Surely if the people of the United Kingdom need the farm commodities we produce and want to sell, we should be able to find ways and means of reaching an agreement as between the two countries, because some of the other nations are going to take advantage of the present situation. We know that Canada and the United States have been assisting various European countries. We intend to go on giving that assistance, but if we should ever seem to get a little tired of helping these people the Soviet Union may jump into the game and take over that assistance; and of course psychologically that move would appeal to some of the devastated countries of western Europe. That is the thing on which we must keep our eye. Canada can produce large quantities of foodstuffs, and certainly Canada should be able to find ways and means of making this assistance available to other countries.
As was urged in the telegrams I read, prices of farm products should be increased, or subsidized if you wish, in order to spread the load over the entire nation, so that the farmer would not be asked to bear the burden alone.
I might mention briefly another weakness in the policy of the government, and that is in regard to freight rates, a matter which is still before the board of transport commissioners. If the application of the railways is approved it will mean an addition of thirty per cent to present costs. As far as I can judge, the application is not merely for an increase which will apply only for a limited period; I believe it will be extremely difficult, when prices of farm produce fall, to bring freight rates back to any lower level. In that case the farmers will take up the matter again. They will discuss it at their meetings; they will ask members of parliament to speak on it; the whole thing will drag out and it may be years before the freight rates are adjusted.
So much for that point. Another important matter is the price of farm machinery; and here again, when the prices of farm products fall, it will be extremely difficult to convince the machinery companies and the government that prices of farm implements should be reduced so that farmers would be able to buy them.
Then I would say the policy of the government today appears to be to discourage production, though we all know production is perhaps the only solution of the problem of inflation. In my opinion, production is the answer, so should we not do everything within our power to see that production is increased? By the present policies of the government, however, and its agricultural policy in particular, production all across western Canada is being reduced. The objective of the government should be a fair relationship between the prices which the farmer receives for his products and the prices which he has to pay for the things the manufacturer sells to him. That is parity prices; that is what the farmers of western Canada and all over Canada want. The present agricultural policy of the government will result in the liquidation of our agricultural industry.
In closing, I should like to refer to two clippings from the Edmonton Bulletin. The first one reports a convention of the Alberta Farmers' Union which was held in Edmonton during the first week of December. The Edmonton Bulletin of December, 5, 1947, contains this:
The A.F.U. board of directors has been authorized to consider taking the necessary steps to call a grain non-delivery strike if and when necessary, unless certain demands are met.
The resolution also sets up the following five demands be met:
1.	Initial price of wheat be raised to $2 per bushel basis Fort William and Vancouver.
2.	The payment on participation certificates, to be made at the end of each years' operations, and the participation payments for the crop year 1945-46 be made immediately.
3.	If the dominion government wishes to sell cheap grain to the domestic market or the international field, pending the setting up of the fact-finding board and the establishment of parity price, that they subsidize from the dominion treasury, the difference in price between the British wheat agreement and the price paid on the export market.
4.	The Canadian farmers should be paid the market price on domestic sale of wheat and any necessary subsidy paid by the dominion government.
5.	The dominion government set up a national grain board to market all grains, and such a board to have adequate farm representation.
I quote that report in order to point out the dissatisfaction of organized agriculture -with the present trend of affairs.
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James Garfield Gardiner: The hon. member said that he would be only fifteen minutes, but he has taken more than twenty-five minutes.


Anthony Hlynka: I thank the minister for interrupting me, but I think what I am going to say from now on will prove helpful to him. No member wants to see a grain strike, particularly in his own constituency. I would not quarrel so much with a strike instigated in the constituency of the minister, but it so happens that last year a strike was started in the constituency which I have the honour to represent. The result was that the farmers got worked up. There was a lot of dissatisfaction. Neighbour began to hate neighbour and all the rest of. The men who had initiated the whole thing slipped out from under it quite easily, and the feud finally subsided.
I do not want to see a strike. It would not be good for the country. It would not be good for the agricultural industry. It would not be good for the farmers. I urge the government, and particularly the Minister of Agriculture, to do everything possible to find the best possible solution to the problems faced by our farmers at the moment.
In conclusion, I should like to quote a report which appeared in the Edmonton Bulletin of December 2, 1947, referring to a speech by the president of the Alberta farmers' union. I want to put. this on record because I think it expresses the sentiments of organized farmers. The report reads:
Non-delivery strike on grain only, if proposed adjustments in farm produce prices are not affected, was urged Monday at the Alberta farmers' union convention in the Masonic temple.
The price of wheat should be $2 a bushel, basis Fort William, for the 1918 crop, according to C. J. Stimpfle, AFU president, who delivered his official report to the convention.
The AFU head further said, "I maintain we cannot sit idly by and allow producing costs to increase without a corresponding increase in the produce we sell. Therefore I would suggest that this convention set a price for our production and service, and failing to achieve that price, after all other methods have failed, nondelivery of all grain be instituted.
Remember, grain only; I do not think nondelivery of all farm produce can be as effective as on one commodity such as grain, because of its shortage in the world supply.
We are living in an organized society and organized people in this society use this method. That being so, we must use this method too, when all other means fail, whether we like it or not."
I want to leave that statement for the consideration of hon. members and the government. We know that when strikes occur they are not always planned for the benefit of the farmers or of labour. We know that there are individuals who want to foment strikes and

they usually are found among those who lead strikes. I do not say that all those who lead strikes, whether of farmers or of labour, have ulterior motives, but there are those who want to paralyse this country. They want to paralyse the United States; they want to paralyse France; they want to paralyse Italy; they want to paralyse every country in western Europe and on this continent so that their objectives may be achieved. We as a nation are capable of producing all the foodstuffs that are required; we are capable of increasing our production in order to assist Europe in her recovery. It is our duty to see that Great Britain suffers less. It is up to us to do everything we can to see that Great Britain is again placed on her feet.


Mr. D. S. HARKNESS (Calgary East):: Mr. Speaker, probably the major part of my remarks would have been more appropriately made on the resolution having to do with the Agricultural Products Act than on this measure, but I am compelled to make them now by representations received from farmers in my constituency and by the fact that the discussion on this resolution has had to do largely with agricultural problems and particularly with the impossible situation in which our livestock producers and feeders now find themselves.
However much the Minister of xigriculture (Mr. Gardiner) may talk around the problem, he and everyone else who is familiar with the livestock industry know that an impossible situation does exist. Subsidies and controls on the prices of coarse grains were removed, resulting in a sharp increase in prices. At the same time the embargo against the export of beef cattle and hogs to the United States markets has been retained. As a result of that and of the price levels of the British meat contracts, the returns to the producer have been held down actually to what the British contracts call- for. That is the practical effect and the situation at the present time. The minister has recognized that things are bad by making a statement to the federation of agriculture that something would be done about the matter, and the farmers of the country, I think, were led to believe that that statement of the minister would be followed' very shortly by another one saying just what would be done. That belief was reinforced by the statement made last week by the minister's parliamentary assistant. The time is long overdue when the anxiety of the livestock producers of this country should be ended. They have been kept in a state of uncertainty too long. The minister should forthwith make a statement on what is to be done to alleviate the situation.

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It is futile for the minister to argue, as he did in this house last Thursday, that the price in the British contracts for cattle and hogs is the floor price and not the ceiling price. That is just not so, in my opinion. It is quite true that these contracts give a floor price, but it is mere quibbling on the part of the minister to say that the floor price is not, for all practical purposes, at the same time the ceiling price.


James Garfield Gardiner: Half a cent a pound.


Douglas Scott Harkness: The minister said something about half a cent a pound. But the fact is that, as long as we are producing more cattle and hogs than we can consume ourselves, and the only buyer for our surplus is the government, the price it pays is, in effect, the ceiling price. There may be half a cent a pound difference between the ceiling and the floor price. The packers are willing to pay a small amount over the ceiling price in order to induce supplies to come on to the market so as to keep their plants in operation. But it is mere quibbling on the part of the minister to say that it is a floor price only for any increase over that price that is paid by the packers is insignificant.
One thing further I would say. The policy of the government and the situation it has produced will rapidly convert the price into a floor price absolutely through the rapid killing off of breeding stock and young animals. Next year, unless the situation is corrected rapidly, we shall see very much higher prices for livestock because of the destruction of a large part of our livestock industry.
The hon. member for Calgary West (Mr. Smith), myself and several other members of this party have repeatedly urged the government to help the situation to some extent by removing the embargo on beef cattle shipments to the United States. We have urged that ever since we have been in this house. We urge it to a large extent from the point of view of retaining for the producers of this country what the minister himself has admitted in this house is the natural market for Canadian beef over the years, when the present more or less unnatural situation disappears and Great Britain can again secure her beef supplies from the Argentine or elsewhere.
There is at the moment an added and urgent reason why the embargo should be lifted. Livestock returns must be increased if the ndustry is to be preserved in a healthy condition. What have the farmers themselves to say on this question? I should like to read a telegram which was handed to me on Friday 5849-19
evening as I was sitting here. It is from Okotoks, the largest town in the rural part of my constituency:
Okotoks U.F.A. unanimously request lifting embargo on cattle to U.S. market. We request immediate action.
Okotoks U.F.A.
So much for the U.F.A. I have also had sent to me, and it arrived on Friday last, the program of the sixth annual convention of the Alberta farmers' union which was held at Edmonton, December 1 to 5, 1947. Reference was made to that a few moments ago by the hon. member for Vegreville (Mr. Hlynka). One of the resolutions which was carried at that convention reads:
Whereas livestock yards here are glutted, and an adverse relationship to feed costs exists, and
Whereas there is a shortage of U.S. currency which can only be met by the sale of Canadian goods to the U.S.A., and
Whereas dominion goverment policy has tended to decrease the production of livestock, and
Whereas the manufacturers of lumber, nails, and wire, etc. have been allowed to avail themselves of higher market conditions in the U.S.A. regardless of domestic requirements.
Therefore be it resolved that we ask the dominion government to immediately lift the embargo on the shipment of livestock to the U.S.A.
There are several other resolutions on the program along the same line, so the minister can no longer maintain that the farmers and livestock producers do not want this embargo lifted, or that they are not very anxious to have access to the United States market.
During the past two years the Minister of Agriculture has always contended in this house and throughout the country that everything was rosy in the agriculture picture, that the policies followed by this government were aimed at producing a stable and prosperous agriculture, and, furthermore, that the farmers and their organizations were behind these policies and supported them, and so forth. But the representations I have just referred to and everything said in this house in the last few days regarding the livestock situation is conclusive evidence that the farmers of this country no longer have confidence in the livestock and agriculture policies of this government.
The fact that the farmers have not confidence in the government's policy on wheat is also quite apparent. The hon. member for Vegreville read to the house the resolution passed by the Alberta farmers' union in connection with a threatened strike unless grain prices were increased. I shall not read that again but I would just comment that the program of the convention of the Alberta
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farmers' union is endorsed by twelve districts and over 200 locals. There are only twelve districts in the union, so that it is endorsed by them all. I think the last thing we want in this country is another non-delivery strike. I do not want to go into the 1946 strike except to say that in my opinion it was ill-advised and a mistake. But certainly it was a disturbing event, and it should have served as a warning to the government and to the urban population of Canada of what the effect is likely to be if the farmers are pushed too far in the matter of prices. If the farmers of this country got together and called a non-delivery strike I do not need to elaborate on what the results would be. By the strike in Alberta they demonstrated that they are capable of doing it if they are pushed too far, if they are made too angry -and they certainly have been made angry at the present time. They are getting angrier all the time. I would suggest that the government take immediate steps to alleviate that anger so that we do not get on our hands a delivery strike by the farmers. That would really be a strike to end all strikes.
The statements of the Minister of Agriculture in connection with all these matters have always sounded very well. I am a great admirer of his ability to make a good-sounding case out of very poor material. However, the more I listen to him, the more I am reminded of a story of an old rancher in our part of the country. He had a ranch away out west of Calgary where the big hills sort of merge gradually into the small mountains, and he conceived the idea that the best type of cattle for that country would be some of the Highland cattle, long haired and so forth, which originated in the same spot as the Minister of Veterans Affairs (Mr. Mackenzie). He imported some of these cattle and had them running out there. Not so very long afterwards a livestock dealer from Calgary called on him. The temperature was about thirty degrees below zero. It was an extremely bitter day. In the course of the conversation he said, "Well, Mr. S. how are your Highland cattle getting along?" The reply was, "Oh, they are getting along all right." The dealer said, "I understand that they are very hardy cattle, and that they can stand the cold much better than anything else." The rancher said, "Yes, they are hardy. Look, there is one of them up on that hill right now cooling off." That is an example of the minister's statements. In fact, when I hear one of them I always think, "There is another of those 'bull on the hill statements' ". He should bring this type of thing to an end and,

as I said a while ago, make a definite statement as to what is to be done to put the livestock industry back on its feet.


James Garfield Gardiner: They usually make you warm up instead of cooling down.


Mr. SMITH (Calgary West):: You know, cattle can't swim.


Douglas Scott Harkness: For a few moments I should like to turn to the statements that have been made here in regard to prices and the high cost of living. I agree that the cost of living is too high for a considerable number of our people. It is too high in relation to their income. The people to whom I refer particularly are those on fixed incomes, the disability pensioners, and more especially the people on the so-called burnt-out pension. It is within this government's power to correct that situation, and they should exercise that power by increasing these pensions or by granting a cost of living bonus to these pensioners, and it should be done forthwith. There are other people who are sufferers from the high prices. There are the old age pensioners, in fact pensioners of any kind. There are many pensioners who receive their pensions from private sources. Many of them are just as hard hit as anybody else, and together with the so-called white-collar workers, store clerks, and people of that kind, they are the people who are suffering most.
A more realistic approach than that of the C.C.F. is necessary to this problem. I can see no use whatever in presenting, as the hon. member for Rosetown-Biggar (Mr. Coldwell) did, a neat little theorem in connection with this problem along these lines; that the rate of wages has not risen as much as the cost of living has increased, and that therefore wages must be increased. Presenting this little theorem, supported by a large number of statistics, many of which could be used to prove the opposite if you put them on a little different basis, is not going to get us anywhere. I suggest, first of all, that real wages can be increased only if production per man hour is increased. That is the only way in which real wages can be improved. I suggest that it would be much more helpful, if you are going to make calculations along these lines, to make them on this basis,-how much have wages increased per unit of production as compared with the cost of living? In other words, what is now the labour cost for laying 100 bricks, for turning out a ton of steel, for producing an automobile or anything else that one might mention? If you relate labour costs to any article which is produced

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and the increase which has taken place in the labour cost to the increase in the cost of living, I suggest that you will find a very different picture from the one presented by the C.C.F. I suggest, further, that that essentially is the difficulty which we see in England at the present time. The production per man hour is not sufficiently great-I am not going to go into what the reasons may be-and therefore a great many of their economic difficulties stem from that. Similarly I am convinced that a great deal of the outcry over the cost of living in Canada and the fact that it is out of proportion to the wages of our people stems from the same fact, that the labour cost per article produced has been too great. The greatest complaint at the present time along this line is over the increase in food prices.
I should like to say right now that a great deal of the outcry is due to the fact that the urban population has become accustomed, through the depression years and since, to relatively low food prices, and naturally they would like to see these low food prices retained. Who would not? The C.C.F. party, of course, have been trying to make political capital out of that fact and, as usual, have been trying to stand on both sides of the fence, with the constantly reiterated cry that food prices and cost of living must come down, at the same time saying to the farmers that the price for their products must go up. Well, you just cannot have it both ways. What they are doing is trying to propagate the old unreasonable view that you can have your cake and eat it too. It is impossible. Still, that idea fools a lot of people. I suggest that we look at the thing. Are agricultural prices too high? Would any hon. member rise in his place and say that prices received for agricultural products by their producers are too high? I do not think a single hon. member would say it. I am sure that he would not. In fact nearly everyone here would say that prices of farm products are too low. If they are too low-and I think they are, as shown by the low average income received by farmers across the country-then the food price is too low in relation to the cost of production rather than too high, and food prices should go higher rather than lower, if you look at it from that point of view. I am not saying that they should go higher; but, as I say, to relate the thing to the cost of production, then they should be higher The only way in which you can bring these two opposite things together, to give the farmer a high price for hi? ?;oods, his food 5849-19J
products, and to supply them to the consumer at a low price, is by way of subsidies or something of that nature. There is just no other way it can be done. Somebody has to pay the difference between the two.
I should like to point out that there is a great fallacy in subsidies and it is this. They must be paid for, plus the cost of administering, which is always very great. There may be situations in which a subsidy on food prices is justified as a temporary measure. I think there are situations of that kind, but I should like to point out the fact that any subsidy which you pay means in the long run a higher cost for food or anything else for the people of Canada as a whole, because they must pay the extra cost of administration which enters into it; in addition to which there result many inequities to both consumers and producers. One of the greatest complaints with regard to the high cost of living and the rise in food prices has to do with the price of milk. We have heard that brought out by many members of the C.C.F. particularly, who refer to starving children and so forth. I should like to discuss the subsidy on milk by way of illustration of what it would cost to subsidize all food products and other items entering into the cost of living.
May I suggest a neat little scheme which the government could put into effect to alleviate the worst of the cries about the high cost of living-the price of milk. As a palliative, and an immediate means of helping people with low incomes, and having families to support, the government might issue, with the family allowance cheque, a monthly allowance of thirty milk tickets, or thirty-one as the case might be per child, each of them worth, say, five cents. [DOT] If the recipient wanted a quart of milk, supposing the price to be, let us say, fifteen cents, he would put in one ticket with ten cents into his bottle. The only expense in connection with this scheme would be the cost of printing the tickets and issuing cheques to milk distributors. The family allowance cheques are sent out anyway, and that would be all that would be required. The milk distributor would send in his tickets. If he sent in 1,000, he would get a cheque representing five cents per ticket or whatever amount might be decided upon by way of subsidy. Furthermore, as regards those who pay income tax, the whole thing could be collected back from them. They merely pay it back with their income tax. This would be a means of subsidizing the really low-income class of people who have children, and it would be a useful scheme whereby the
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Mr. RONALD MOORE (Churchill):: I do not intend to take up much time this afternoon. I shall simply deal with two problems that have come to my attention over the week end, both having to do with the matter of price control. The government has taken a definite stand with respect to its future policy on price control. The Minister of Finance (Mr. Abbott) advised us that it could oe only by means of a completely controlled and completely directed economy that we jould re-institute price control.
Over the week end I received a telegram from local 695 of the international union of mine, mill and smelter workers at Sheridan, Man., and its 284 members to go on record as being entirely in favour of re-establishing price controls on the basic necessities of life. Before coming to Ottawa, the matter of rising prices was discussed with a number of dairy managers who operate throughout my constituency. These men reminded me that, since the abolition of the producer subsidy on milk, and with the great increases which have taken place in the cost of living since midsummer, the consumption of milk has gone down noticeably. They advise that families who in the past consumed between three and four quarts of milk a day now buy from two to three quarts. They expressed the opinion that the reason for the reduction in the consumption of milk is that their purchasing power is not sufficient to enable them to make further purchases.
The hon. member for Calgary East (Mr. Harkness), who spoke a few moments ago,

stated that one of the reasons for not increasing wages in this country was that production per man hour had not gone up. The Minister of Finance, in his budget address last year, informed the House of Commons that over half the workers in Canada received wages which were insufficient to bring them within any income tax bracket. It is these people who find the increasing cost of living a very difficult problem with which to cope.
The increases we have experienced in the cost of living over the past six months are something which greatly concerns the people of the country, and that is why I am taking a few minutes now to bring the opinions of my c-onsituents before the house.
There is one other matter with which I wish to deal, and that is coarse grains. In the fall of this year the government placed coarse grains on the open market and within a very short time the market price for these grains increased approximately thirty cents a bushel. Prior to this, many farm organizations in the west had requested the government to state its policy with respect to coarse grains for the present crop year. When no statement was forthcoming many farmers took it for granted that the policy then in effect would continue for the rest of the crop year. The result was that many of them marketed coarse grains one or two days before the new policy was announced. They lost as much as thirty cents a bushel. Farmers in my area alone lost as much as from SSOO to $1,800 each, and it is needless to say that they were not very well satisfied with the policy of the government.
But there is another matter in that connection that should be brought to the attention of the Minister of Agriculture (Mr. Gardiner), and also to the attention of the cabinet, because I believe the cabinet was interviewed with regard to it. A large number of farmers in Saskatchewan were adversely affected and the leader of the Liberal party in Saskatchewan, the hon. member for Rosthern (Mr. Tucker), flew to Ottawa to have the situation looked into. On his return to Saskatchewan he reported to the Western Producer that action would be taken by the government which would reimburse these fanners for at least a part of the losses they suffered because of the government's new coarse grain policy. I am sure the farmers of western Canada are interested to know if it is still the intention of the government to remunerate them for the losses they suffered because of the sudden reversal of policy by the government with respect to the marketing of coarse grains.

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Mr. J. S. SINNOTT (Springfield):: Mr. Speaker, keeping in mind the limited amount of time we have before Christmas, I will endeavour to make my remarks short.
Speaking as a representative of the farmers in my constituency-and I say we have the right to consider ourselves among the best farmers in the west-I wish to emphasize here that in the constituency I represent we have never had to lean on the shoulders of anyone.
There is one aspect of the emergency powers as to which I wish to say a few words. It is the considered view of my constituents that the trading in coarse grains should be taken over by the wheat board; and, should a fluctuating market prevail, the western farmers are of the opinion that it should be carried on under the wheat board with a stabilized initial price; and profits, if any, distributed at the end of the year among those who have marketed their grain.
I feel sure that the official opposition will concur in this, for their leader (Mr. Bracken), speaking in this house on February 24, 1917, as reported at page 758 of Hansard said, "I do not oppose the board taking over coarse grains"; although at the time he was very careful to guard himself and his party against the definite closing of the Winnipeg grain exchange.
I am not a lawyer and I do not propose to say how this marketing should be achieved, but my impression is that it requires only a few strokes of a pen by a good legal draftsman to amend the existing legislation; and perhaps the deletion of the words "wheat or wheat products" wherever these words are used, in part 4 of chapter 15 of the statutes of 1947, would have the necessary results, these deleted words to be replaced by the word "grain" as defined in the 1947 legislation referred to. It could even be done in other ways, such as by an order in council, but in any event it should be done immediately. I am sure that there will be agreement from all members of western Canada, and I am sure the results from such marketing would certainly help our farmer neighbours in eastern Canada. By this action we would definitely close the Winnipeg grain exchange.
According to Sir John Boyd Orr, the present food shortage will continue for many years. We must not deceive ourselves that it will end with the 1948 harvest. The reason for that is the anticipated increase of the population of the world, which will be forty million from May 8, 1945. Therefore food production will have to be increased by 110 per cent in the next twenty-five years.
The marketing of wheat by the wheat board and the marketing of coarse grains under the same board, if permitted-and it must be so- must continue long after August 1, 1950, when the present legislation expires. It is unfair and unjust to permit the trading of any grain or foodstuffs by any group who can rig the world food market.
I therefore repeat that if the government has the power under the present resolution to continue the present control over the trading in wheat, it may as well have it with respect to coarse grains; and if the amendments I advocate can be instituted in the present statute, if the government has not the control at the present time it should take the necessary steps to do it now.
Speaking in the house on December 11 last, the Minister of Agriculture (Mr. Gardiner) said, as reported in Hansard at page 214:
The fact is that on October 21 and down to the present the government has had no authority to place oats and barley under the control of the wheat board.
I would therefore strongly and firmly suggest that, in the best interests of the Canadian farmer and of Canada as a whole, the authority should be taken as soon as possible and steps taken at the same time to prohibit the trading in grain by any Canadian grain exchange.


Mr. H. R. ARGUE (Wood Mountain):: At this time. Mr. Speaker, I wish to deal with some of the remarks made by the Minister of Agriculture (Mr. Gardiner) the other night. Before doing that, however, I wish to say a few words about the whole question of price control. It seems to me that the government has failed in its price control policy in at least two ways.	First of all, I
believe it has failed to listen to the voice of the Canadian people. There can be no argument as to the fact that the people of Canada desire price control at this time; and there eannoc be any argument either, as to the fact that, because there has not been price control, we have seen the sad spectacle of run-away prices. The other way in which I believe the government has failed is with respect to carrying out what it said was its declared policy, namely, the removal of price controls in such a manner as not to cause a drastic increase in the cost of living. Because of this failure, we see the spectacle of increasing prices from one day to the next.
There can be no argument as to the fact that the policy of decontrol has not helped the average Canadian. On the contrary, the
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policy of decontrol has helped big business. I say that it is the duty of any democratic government to listen to the people whom it represents. It seems to me that at this time the administration is not running the country as much as big business is running it. That can be seen easily by the results of the policies the government has undertaken. In a period of inflation people suffer because they cannot buy the necessities of life in the way and in the quantity they should be able to buy them. At this time many people cannot afford an adequate diet. They cannot afford to wear proper clothing. They have not sufficient money to provide themselves with proper shelter. But of those three things, I believe the fact that so many people cannot afford a proper diet is the most appalling. In a country such as Canada, a country which produces such huge quantities and varieties of food, the government, at least in the field of food, should have kept prices down.
Out of the Department of National Health and Welfare there came a bulletin which stated that the people of Canada should be drinking twenty-five per cent more milk. I am sure the Minister of National Health and Welfare (Mr. Martin) would agree with that statement; but while his department is saying the people of Canada need twenty-five per cent more milk, the Department of Finance, through its decontrol policy, is making certain that the people do not get even as much milk as in the last few j'ears. According to a report in the press, when milk prices increased in Toronto dealers in that city admitted that their sales had dropped by from twenty to twenty-five per cent.
The same thing is true in regard to the price of butter, which went up from fifty to seventy cents a pound when the government discontinued the subsidies on coarse grain. The farmer who produced the cream that went into the production of the butter did not get all the benefits of that price increase. The business organizations which manufacture butter were able to reap a profit of twenty cents on each pound of butter they had in storage. The same thing happened when the government implemented its so-called austerity program; prices of vetgetables increased by from twenty to 120 per cent, but the farmer did not get the benefit of that price increase. He had marketed his vegetables long before, and it was only the great wholesale houses and the dealers who stood to make that profit.
I think we can all agree that during the war years the government's price control policy

was pretty successful. From 1944 to 1945 the cost of living, according to the official index, went up less than one point. I believe one reason for that small increase was the policy then followed by the government of paying subsidies and carrying on over-all price control. During the war people of Canada were asked to invest in victory bonds. The people rallied to their government in time of need and invested in those bonds. In the advertisements published during those campaigns the people were asked to invest in this way in order to prevent inflation, and were told that if they did so they could be sure there would be no inflation in this country. In 1945 the Liberal party went to the people on a program of no inflation. An article sent out by the Liberal party under date of May 15, 1945, appeared in the press under the heading, "Liberal policy will create post-war opportunities for all." That was part of the program of the Liberal party at the last general election, and this is what the article had to say:
Jobs! Jobs with bright futures for the young men and women coming out of the armed services with the best part of their lives before them. Jobs for all. Jobs with big prospects and good reliable money that will keep its buying power. After all the hard work, sacrifice, and self-discipline which has brought us through the war, the people of this country have earned a brighter future in a better, juster, grander Canada than we have ever known.
I submit, Mr. Speaker, that the government has not kept faith with the people of Canada; that it has not implemented its election program which promised jobs with big prospects and good reliable money that would keep its purchasing power. So far this year the cost of living has gone up some fifteen points, and has increased by twenty-three points since 1945. Truly today inflation is with us, and I submit that it is time the government obeyed the will of the majority of our people. It is time it implemented its own election program; it is time controls were reimposed, so that the people who invested in victory bonds will not find the purchasing power of that investment dwindling from day to day.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Hazen Robert Argue: Mr. Speaker, when the house rose at six o'clock I was dealing with the way in which inflation has seriously affected the living standards of so many people. The fact

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is that the farmers of Canada have also been adversely affected by rising costs, not only of the things they have to buy, such as machinery with which to farm, but also in their cost of living. When a farmer goes out today to buy an ordinary tractor he must pay approximately $2,300 for it, when not many years ago he could have bought it for $1,300 or $1,400. He must pay approximately $4,000 for the most efficient type of combine. He finds also that the cost of gasoline has gone up very drastically. In the spring the cost of tractor gasoline went up four and one-half cents a gallon and this fall it went up another cent. Only the other day I saw a forecast in the Financial Post that gasoline is to take another jump of from one and a half to two and a half cents a gallon.
The farmer believes, and rightly so, that when his costs go up that increase is permanent. When there is a slump in the prices he receives he finds that his costs do not go down at the same rate. A number of tariff reductions were announced recently. I believe any tariff reduction is a step in the right direction. The tariff on tea was reduced from eight to two cents a pound and on coffee from three to two cents a pound. However, those reductions in tariff were not reflected in reduced prices. The distributors absorbed the tariff reductions as increased profits.
All increases in the cost of production to the farmer and all increases in his cost of living should lead to necessary changes in the government's wheat policy. The leader of this party, the hon. member for Rosetown-Biggar (Mr. Coldwell), when speaking the other day referred to the statement that had been made when we were discussing the United Kingdom-Canada wheat agreement, namely, that the C.C.F. advocated the payment to the farmer, out of the public treasury, of any increase in production costs that had taken place since the signing of that contract.
I shall now turn to the government's coarse grain policy. The head of the Canadian Federation of Agriculture, Mr. Hannam, is reported in the Rural Co-operator of November 11, as having said:
Nothing that has happened in Canadian agriculture in many years has stirred farmers throughout the dominion to such a high pitch of resentment as has the recent action of the dominion government in removing ceilings and subsidies from coarse grains at this particular time. i
I was pleased to note that apparently the Minister of Agriculture (Mr. Gardiner) felt that this issue was important enough to warrant the major speech which he made in the
house the other night. When I commenced my remarks before six o'clock the minister was in his seat and I stated that I was going to deal with some of the things he had said. I believe he left two veiy important questions unanswered. First, where does the minister stand with respect to the Winnipeg grain exchange? Does he or does he not believe in the speculative sale of farm products through the grain exchange? He did not say. I am forced to the conclusion that he supports the Winnipeg grain exchange method of handling coarse grain because he said nothing at all with reference to the action taken on October 21.
He did not state to what extent, if any, farmers who had sold grain prior to October 21 and thus had lost a good deal of money would be compensated. He did take some time to attempt to show that prices of coarse grains were properly in line with the price of wheat, but in making that argument he assumed that the correct price for wheat at this time is $1.55 a bushel. I do not think that assumption is altogether fair. When one considers the price of wheat going into domestic consumption, the price of wheat going to Great Britain under the contract and the price of No. 2 wheat, one will realize that the average price which will be received by the wheat board for the 1947-48 crop is more likely to be closer to $2 a bushel than to $1.55. If that is true, then, if we take the minister's own argument, prices of oats and barley are still too low.
If we assume that the price of wheat is $2 a bushel, then the ceiling price of barley should not be $1.25, as the minister stated, but rather $1.61. The ceiling price of oats should not be ninety-two cents, but rather $1.19. It seems to me that, in making his statement, the minister forget one important relationship. It is not good enough to relate oats and barley only to the price of wheat; there should be a fair relationship between prices of oats and barley and prices of hogs and beef. If there was some semblance of a fair relationship before October 21, then there is no fair relationship today. The proof that there is no fair relationship is shown by the fact that farmers who raised hogs for years are now going out of hog production as rapidly as possible.
It is time that the government gave producers of livestock a price that was fair in relation to the price of coarse grains. The present price of coarse grains represents a serious blow to the livestock industry. If immediate steps are not taken either to
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increase prices or to reinstate the subsidy on coarse grains the livestock industry of this country will dwindle to an insignificant point.
I should like to deal with the situation which prevailed in western Canada this fall before the government's policy on coarse grains was announced on October 21. The argument was made by the Minister of Agriculture that the farmers of Canada had a reasonably good idea of what the government was going to do. The fact is that the farmers delivered more oats and barley from August 1 to October 21 in this crop year than they did during the same period in the previous crop year.
If these farmers had known they were going to lose thirty cents a bushel on their barley they certainly would not have marketed their grain. But this was the situation. There was no quota against oats and barley at the elevator delivery points, but there was a quota on wheat of about ten bushels per seeded acre at most delivery points. Barley is always harvested before the wheat crop, and the farmer knew he would have to save his storage space on the farm for wheat on which there was a quota, so he delivered his oats and barley to his local elevator. The fact that there was no quota on oats and barley was directly part of government policy. The government was saying to the farmer, "Come on, boys; deliver your oats and barley so that you will have room on your farm to store your wheat". And, as a colleague beside me says, the Winnipeg grain exchange made a handsome gain on that account.
The Minister of Agriculture, in the course of his remarks on Thursday last, said at page 212 of Hansard:
During the last session provision was only made for continuing these drawbacks until August 1, and everyone surmised from this that the controls would probably be taken off on August 1.
He is saying there that everyone knew that the government was going to take these controls off on August 1. But in the next paragraph he has changed his mind and the farmers no longer know the government's policy, for he says:
It was only the uncertainty as to whether or not prices would be changed on August 1 that caused the grain to be delivered, together with the fact that throughout the whole period of control, both before and after the act, farmers had been treated ill a way which those who might desire to do so could justify as being reasonable.


Frederick Samuel Zaplitny: "As being reasonable"; what does that mean?


Hazen Robert Argue: I do not know, I am sure. In the third paragraph the minister again changed his mind. He has decided once again that the farmers do know the government's policy. He says:
An intimation was given to the people of Canada at that time-
Namely, August 1:
-that, in addition to what had been voted during last session, sufficient funds would be provided to take care of any drawbacks for a two months' period; and the statement was also made at that time that the controls ought .to be taken off at the same time.
Again he says that the farmers knew the government's policy for two months. Then he goes on to say that in October once again the farmers were not sure what the government's policy was.
I say this, Mr. Speaker, that no farmer in western Canada knew what the government's policy was going to be, and the fact that they delivered their grain shows that they did not know. I also say I do not believe a member of the government party outside of the cabinet knew what the government policy was going to be. It was a deviating, vacillating policy which changed from day to day and month to month, and certainly the farmers could not be expected to follow a policy of that kind. The farmers all this time believed, and they had good reason to believe, that should the subsidies be taken off and the controls removed, they would be compensated wholly for any change in price.
On March 17. in the House of Commons, the Minister of Agriculture said at page 1408 of Hansard, in what he deemed to call a statement in regard to the production of coarse grains in 1947:
In order to avoid discrimination against producers who have already delivered barley during the present crop year an adjustment payment will be made of ten cents per bushel in respect of deliveries between August 1,	1946, and
March 17, 1947.
That was the time when barley was increased some ten cents per bushel, and farmers who had already delivered their barley in that year were paid the ten cents more, as the minister said, to avoid"discrimination. So the farmers in western Canada this fall naturally assumed, on the basis of what had been done before, that the government would keep faith with them and give them any benefit in the way of increased price that might take place due, of course, solely to a change in government policy.
There are other people who believed that the government should do something along that line. Saskatchewan Liberal candidates

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and the five M.L.A.'s in that province, I presume, along with the hon. member lor Rosthern (Mr. Tucker) had a meeting and decided to fly that hon. gentleman along with Mr. W. C. Woods, chairman of the caucus of Liberal provincial candidates, to Ottawa to place before the cabinet the farmers' view in relation to coarse grains. They came back to Saskatchewan as heroes, for on Monday, November 24, the Regina Leader-Post's front page carries a big headline, "Coarse grain loss to be made up," and the first paragraph of the article reads:
The dominion government will indemnify coarse grain producers against loss as a result of the lifting of coarse grain price ceilings October 21 and will take steps to see livestock producers are compensated for the increase in feed costs, Walter Tucker, M.P., Saskatchewan Liberal leader, and W. C. Woods, Kinistino, chairman of the caucus of Liberal provincial candidates, declared Sunday on their return from Ottawa.
Mr. TUCKER; Does the hon. gentleman object to that?


Hazen Robert Argue: I have been pleading for twenty minutes that a payment be made to the farmers. The Leader-Post supports my hon. friend; it does not support me, and I do not think he will say that it misquoted him. According to the Leader-Post, my hon. friend said that the loss would be made up.


Mr. TUCKER:: Are you against that?


Hazen Robert Argue: Here we are in the second week of the session and nothing has been done in that direction. I would suggest to my hon. friend that he stuck his neck out too far and that he does not speak for the government.
The Minister of Agriculture, speaking in the house on Thursday last, made a passing reference, at page 214 of Hansard, to the fact that the farmers and the wheat pool had played the game very well. He also stated that the wheat pool organization had sold, he believed, more than twenty per cent of the coarse grains which had been marketed to them between August 1 and October 21. I do not know how much was disposed of by the pool elevator organization, but I believe it was far more than twenty per cent. I hope it was not, but I think it was, because I happened to attend a wheat pool committee meeting in my riding, at which a field man from the pool organization spoke and he said that he did not know how much the wheat pool had sold of the crop marketed during that period, but he estimated that by October 21 the pool had not in its possession more than ten per cent of the oats and barley bought in August and September and the first three weeks of October. If that is correct, a large payment cannot be made by the pool 5849-20
organization, although I know they will pay every red cent they had made of profit back to the producers who sold them their grain. The line companies may follow the same policy, but I am completely sure that if it were not for the farmers having their own pool organization the line companies would absorb every dollar of profit or every million dollars of profit that they made.
The minister also said at page 214 of Hansard:
But what I found was this, that a certain number of bushels-about half-were delivers J to the pool elevator companies, particularly m Saskatchewan, and that about the same proportion of the grain delivered to one or the other was sold. That grain moved out at a lower, not at a higher price. But it got into the hands of those who sold feeds in eastern Canada, and some things are alleged to have happened. At one place one thing happened, and at another place a different thing. I am not going to attempt at the present time to lay blame on those who handled the grain for not having allowed it to get into the farmers' hands at a lower price, hut to have held it until a higher price could he obtained for it.
The minister was not laying the blame on those dealers who profiteered at the expense of the farmer, but at page 1446 of Hansard of March 17 of this year he announced the government's coarse grain policy. At that time when there was a chance, as he said, for grain dealers to make fortuitous profits, the government went in and took over the stock of coarse grains and sold it back to these dealers, and the government made the gain to be applied to the farmers' marketings rather than allowing the dealers to make the profit. Then he said this:
In any case in which a price increase or substitution of a price for a subsidy would have the effect of giving unwarranted profits to holders of stocks, such stocks will be purchased by the government at the old price and returned to the holders or sold at the new price. This procedure will make it possible to recover subsidy or prevent chance profits to the holders of stocks.
Then he underlined this:
I want to emphasize this point in order to discourage any hoarding in anticipation of increases in ceiling prices or withdrawal of subsidy that may take place in the future.
He told the people of Canada, and the grain dealers in particular, on March 17, speaking for the government, that the government was not going to allow chance profits, profiteering at the expense of the producers of coarse grains if an adjustment in price should be made upwards. I ask the government, how can the farmers of western Canada know what the government's policy is when, on March 17, the Minister of Agriculture
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stated the government's policy and did not carry it out? The only thing for the government now to do is to compensate 100 per cent the farmers who lost money by following the direction given to them by the government.
If the hon. member for Rosthern-and I hope and believe he wants the farmers compensated-would use his influence instead of jibing at me when I am making a speech he might be more effective in seeing that the farmers were adequately and completely compensated for the losses they have sustained.


Walter Adam Tucker: Why jibe at me?


Hazen Robert Argue: According to the Minister
of Agriculture, the grain dealers in Canada made a huge profit at the expense of the farmers, and I say to the government, do not increase the price of beef and pork in the same way in which the price of coarse grain was increased and allow the packing firms in this country, who have bought cheap beef and bacon, to make huge profits on the stocks they hold in the coolers at the present time.
I believe that the farmers of Canada have lost faith in the government; I believe that the farmers of western Canada have lost faith in the government. The Minister of Agriculture has given them a lot of advice; he has outlined many programs to them in the past and they have co-operated. In 1941 he told the farmers to reduce their wheat acreage and increase their summer-fallow acreage and they would get paid $4 an acre. The farmers did that, and two years later they knew they had lost $10 or $15 an acre when the market for wheat was opened up at that time.
The Minister of Agriculture advised the farmers to raise hogs and coarse grains. The farmers raised their coarse grains and marketed them, and they had thirty cents a bushel literally stolen from them. If farmers had not raised hogs, they would not now have to dispose of young pigs at fifty cents apiece or knock them on the head; and if instead of raising coarse grain and taking a loss of thirty cents a bushel, farmers had done what the government said they should not do, namely, grow rye, then, of course, they would have made a good deal of money.
I do not like to see this country come to the point where the farmers and the people of Canada cannot place complete faith and confidence in the government's policy as outlined from time to time, and I sincerely hope that when the government again sees fit to announce another change in the agricultural program, whatever it might be, it takes the

farmers into its confidence and that the government itself lives up to the policy and the program which it has asked the farmers to live up to and to practise.


Arthur Leroy Smith: Will the hon. gentleman permit a question? Is he opposed to government control of farming operations?


Hazen Robert Argue: The government has not controlled the farmers' operations. The minister has given the farmers some advice; in some cases they took it and in others they did not. All I am saying is that for the most part, where they did not take the minister's advice they were money ahead.
In closing, Mr. Speaker. I should like to ask the government to do the following things: first, compensate, out of the public treasury, if necessary, the losses sustained by farmers who marketed barley and oats from August 1 to October 21 of this year; second, close the Winnipeg grain exchange; third, stabilize the relationship between meat and coarse grain prices; fourth, place the marketing of all meat products under the meat board and the marketing of coarse grains under the wheat board.


Arthur Leroy Smith: Is that not controlling farming operations?


Hazen Robert Argue: My hon. friend would not understand. Fifth, take over all stocks of meat now in the hands of the packing industry so as to prevent profiteering should an increase in meat prices be announced; sixth, accept British goods in increased quantities so as to help assure the British market for grain and livestock products.


Mr. J. H. BLACKMORE (Lethbridge):: Mr. Speaker, representing the federal riding of Lethbridge, I believe there are two or three things I should say. There are four general principles that should be laid down to express the will of the federal riding of Lethbridge. First, the cost of living must come diown. Second, prices of feed and of livestock and of livestock products must be established and maintained at such relationship that producers will be encouraged to produce buoyantly and abundantly. Third, farmers as a class must not be obliged to bear more than a fair share of the burdens resulting from national policy. Fourth, there must be introduced into Canada's agricultural policy such a degree of consistency and stability as will give farmers confidence in agriculture.
Farmers throughout my constituency feel that in the case of the British-Canadian wheat agreement they were required to pay out of their pockets what the whole Dominion of Canada ought to have paid in order to guar-

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antee the British consumer wheat at a reasonable price. They do not believe that kind of thing should continue.
The removal of the ceilings on coarse grains was obnoxious to the people in my constituency. It injured our hog raisers, our dairymen and our poultry producers beyond measure. Whether the government in its wisdom thought that move was necessary I do not know, but it is certain the government made the farmers pay the full cost of the change.
We should like to give a warning from my constituency: it is, that the government's moves toward abandoning subsidies are all in the wrong direction. Subsidies are the only means whereby fair prices can be established and maintained. If the government goes blindly on with the policy it now pursues of abolishing subsidies, then it will simply wake up to find it has led the Canadian people into the ditch again, as did its foolhardy policy with respect to Bretton Woods, which led the nation into a ditch from which it will take more than this government to extricate us. Certainly the government does not need to do everything wrong in this country 1
The sugar policy of Canada must be revised. This is the first time in this debate the beet sugar industry has been mentioned, but inasmuch as sugar control comes under the act now being discussed, it seems appropriate that I say a few words with respect to that industry on this occasion.
I repeat, the sugar policy of Canada needs revising. As a striking bit of evidence, it has cost the nation upwards of 28,000,000 United States dollars in the year 1947 because we have not used wisdom in our sugar policy in Canada. We have put ourselves in a position in which we are importing from the United States dollar areas sugar which we could have produced in Canada. And it would have been greatly to the benefit of Canadian agriculture and the Canadian economy in general if this sugar had been produced in Canada.
Canada simply must produce more sugar beets; if this government does not see that, then it will make one more ghastly blunder, as it has already done as regards sugar during the past ten or twelve years.
I should like to read a passage from a press release issued on November 2, C623, entitled "Sugar ration ends", coming from the wartime prices and trade board. I wish to comment on a few words that appear in the passage I am about to read:
This one cent per pound advance in the permitted ceiling will cover not only the regular statutory import duties which are concurrently being reinstated but also the increased costs of cotton and jute bags and other materials.
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May I direct attention particularly to the words, "regular statutory import duties which are concurrently being reinstated". There are several questions which the people of Canada need to have answered in respect of this statement. We naturally are to assume, I take it, that the SI.29 duty on general tariff or nonempire sugars is to be reinstated. We want to know whether the SI empire preference on empire sugars is also to be reinstated so that the importer of empire raw cane sugar must also pay a total of $1.29 in effect. The answer to that question is exceedingly important for the beet sugar producers and the people of Canada. Finally, has the pre-war S2.30 fixed value of sugar for import been reimposed?
Hon. members will recall that this value was imposed in 1932. It was apparently abandoned during the early years of the war. It is of vital importance to the sugar beet industry that this valuation be reimposed ..so that in case there should come a slump of prices through over-production in the cane producing areas, which would bring down the price of cane sugar to a low point, that cane sugar would not be brought into Canada to destroy the beet sugar industry of Canada, as might easily happen.	.
We want to know therefore, whether that $2.30 fixed value for import has been reimposed, and we want to know whether it is proposed to increase that $2.30 fixed value appropriately to make it conform to the higher level of sugar costs and prices prevailing in Canada at the present time as a result of the war.
May I now read another quotation from the minister's release of November 2:
In this connection the minister announced that the government did not propose to subsidize the production of sugar beets in 1948, nor did it propose to sell imported cane sugar on a subsidized basis. Beet sugar may therefore be expected to sell at prices in line with average laid-down duty paid costs of imported cane sugar.
May I call attention to the last statement:
Beet sugar may therefore be expected to sell at prices in line with average laid-down duty paid costs of imported cane sugar.
Hon. members were startled last year to find what trickery was used in connection with certain words and how, apparently, the house was deliberately and consistently deceived by the government from beginning to end as to the basis upon which the beet sugar producers would be paid. The deception arose from the interpretation placed on certain expressions. It looks as though there were weasel expressions in this quotation also. The policy which is indicated here could easily result in injurious injustice to the producers in the beet sugar industry.
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So much depends upon the answers to three questions: First, how much non-empire cane raws has been or will be purchased by Canada for 1948, and at what prices, and at what average price?
It is reported that already Canada has bought the Dominican crop at 85 per hundred weight. At the same time it is reported that Holland has bought 10,000 tons from Mexico at 84 per hundredweight. This tends to indicate how uncertain the sugar market is even now, and consequently how uncertain, according to these words I am discussing, the situation may be for producers of sugar beets in 1948.
Second, how much empire cane raws has been or will be purchased by Canada for 1948, and at what prices, and at what average price?
And, third, does the Canadian government propose during 1948 to buy all cane raws through a government agency or will certain Canadian private enterprises be permitted to buy on the world market where prices of sugar might seriously fall?
To indicate how serious the fall might be, may I point out that the evidence which is coming to hand, or which has already come to hand, indicates that for the year 1947-48 there will be more sugar produced by those areas supplying the peoples of North America than those peoples will be able to use. I quote from "Sugar Facts Extra" of December 9, 1947, one sentence:
Making allowance for the natural increase in consumption, it can be seen that, with over 13 million tons in the offing, there is more than enough sugar available for North America during the coming year.
Such being the case, it is obvious, Mr. Speaker, that there could be a rapid fall in the price of cane sugar. From the results of this fall our beet sugar producers must have protection. Empire producers of cane raws must receive their $1 preference. If not, then the importer of empire cane raws will be getting his sugar with a duty of twenty-nine cents, whereas the importer from non-empire sources will be having to pay $1.29 for his sugar. It is quite obvious that the refinery importing empire sugar and paying only twenty-nine cents is going to have a distinct advantage over others in the country and is going to have a particular advantage over the beet producers. This fact is likely to deprive the beet producers of fifty cents per hundred of their normal protection. This would be the minimum. If a very much larger percentage of sugar is imported from empire countries than is imported from non-empire countries, then the beet producer will be deprived of more and more, perhaps up to seventy cents

per hundred, of his normal protection against cane sugar from outside. If normal protection is denied the beet-grower he must be compensated by subsidy.
I ask the minister to answer at an early day, the questions which I have asked so that the house may have in its possession information upon which to base its judgment concerning the way in which the dominion, government proposes to manage the sugar industry of Canada during the year 1948. When the minister answers those questions, I shall have some further observations to make.


Mr. WILLIAM BRYCE (Selkirk):: I had no intention of taking part in this debate, Mr. Speaker, until I received this telegram which I should like to bring to the attention of the minister. The other matters which I wish to speak about with regard to farming can wait until we reach the next resolution. The telegram I refer to reads as follows:
Due to restrictions on imported vegetables I have been requested by a lot of Transcona residents including invalids and diabetics, to request you do everything in your power to have these restrictions removed or reduced that imports of lettuce, tomatoes, etc., which not otherwise available in Canada be allowed; hearing considerable criticism of government for permitting imports of unnecessary liquor, candy, biscuits, jewelry, while vegetables necessary for health are banned. May I hear from you soon.
Hymie Margolis,
Transcona, Manitoba.
I happened to get that telegram because for the last twenty-eight years I have lived adjacent to that town and it is quite reasonable that its people should wire me about this matter. I do not intend to labour the point, but I hope the minister will do something about the matter, because I think every hon. member in the house realizes how necessary it is that these people who are sick and need vegetables should not have to do without them. Although the Minister of National Health and Welfare (Mr. Martin) is not in the house at the moment, I am quite sure that if he were in his seat he would support me in this, because at the present time he is carrying on a program urging that we eat more vegetables than we have ever eaten before. If importation is cut off, the people just cannot get them. I hope that the Minister of National Health and Welfare and the Minister of Finance (Mi. Abbott) will be able to review this situation and do something about it.
While I am on my feet I should like to say-something about the milk producers in Winnipeg. The hon. member for Souris (Mr. Ross) spoke about this matter on Thursday night. He commended the gesture which had been made by the distributors with regard to avoid-

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ing a strike there. I agree with him on that point. But I wish to commend the milk producers who have for so long a time tolerated the conditions in the Red River valley. I know there are many hon. members in this house who are connected with the milk industry.
Matters have reached such a stage now that milkmen are selling at a loss; they cannot go on any longer. In Winnipeg they were offered S3.75 per 100 pounds. That would make the farmers' share for a quart of milk work out at 9-6 cents. Milk is selling in Winnipeg at sixteen cents a quart. Distributors' costs have also gone up just the same as those of milk producers. As hon. members will recall, we used to get men at a fairly reasonable wage, but there is plenty of work now and there are many more congenial jobs than that of milking cows on a farm. It is becoming more difficult to get help and higher wages must be paid.
There is also to be considered the matter of the development of the milk business. If you go back to conditions twenty-eight or thirty years ago, you will remember that you heard the rattle of the milk wagon, went out with your container and obtained what milk you wanted. At that time distributors' costs were not very great. But, later on, bottles were introduced, and then wax containers, all of which has gradually added to the expense>
of the distributor. We now find five or six different wagons going down the same street, all selling 3-5 or 3-6 milk, depending on the province you are in. Some of the creameries are owned by the one outfit, but they still have different wagons on the street selling milk in competition with one another. Then also there are different kinds of milk. All this has added to the cost of distribution. Then there is advertising that we did not need in the old days. All that has to be paid for. Somebody must pay for it. The distributor does not want to pay for it; the milk producer does not want to pay for it, and the consumer wants cheap milk. So we are caught in a vise. The farmer cannot produce milk unless he gets paid for it, nor can a man distribute it unless he is paid for it. Therefore some other way must be found of dealing with this situation. It will be necessary to have the distribution of milk dealt with municipally or provincially. But the people cannot pay any more for milk than they are paying today. What has aggravated the milk situation is that during the war people bought milk for ten cents a quart.


John Ritchie MacNicol: It is now eighteen cents a quart in Toronto.


William Scottie Bryce: It is unfortunate that such a valuable commodity and such a balanced food as milk should have reached such a price. But
to come back to what I was going to say, the subsidy to the producer and the subsidy to the consumer gave the consumer cheap milk. That was what the milk producer was always against. He said that the day would come when the subsidies would come off and then people w'ould be clamouring for cheap milk because they had become accustomed to cheap milk when wages were good. If you are going to subsidize anybody it will have to be the consumer, if he is going to be able to buy milk. The Minister of National Health and Welfare says that everyone should have a quart of milk a day, but people cannot buy that much milk on the wages they are being paid. If you have a small family like mine you may be able to do it, but if you have a good-sized Scotch or French family you just cannot buy enough quarts of milk with the wages you make. That is one thing which has aggravated the position.
Another thing is the situation in regard to coarse grains. The other night the Minister of Agriculture (Mr. Gardiner) said that the farmers went into this with their eyes open. I hope he is listening to me, because I am talking to him now. I thought that was a very unfair statement for him to make, because right along we were advised to market our coarse grains, to get them on the market for the feeder in eastern Canada, to make room for the storage of wheat, and so on. On March 17, 1947, at page 1408 of Hansard, the minister said:
In any case in which a price increase or substitution of a price for a subsidy would have the effect of giving unwarranted profits to holders of stocks, such stocks will be purchased by the government at the old price and returned to the holders or sold at the new price. This procedure will make it possible to recover subsidy or prevent chance profits to the holders of stocks. I want to emphasize this point in order to discourage any hoarding in anticipation of increases in ceiling prices or withdrawal of subsidy that may take place in the future.
As far as the milk producers were concerned, they had no notification that this subsidy would be taken off coarse grains; and our costs have gone up tremendously. I might quote the views of some of the milk producers. Whether you mix your feed two to one or three to one, feed costs have gone up $20 a ton. For the person producing his own grain the increase has amounted to thirty-two cents a bushel on barley and twenty-two cents a bushel on oats. For the man who is buying his grain and has a straight dairy herd of perhaps 100 or 150 cows the cost has increased by fifty-two cents a bushel in the case of barley and thirty-two cents a bushel in the case
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of oats. The minister was good enough to have Professor Patterson carry on some research in the Red River valley in order to determine the cost of production. We have been guided by the results of that research, but everything is changing so rapidly we cannot keep up with it. Now we have oats and barley going up, which put everything else out of balance.
Then we have the labour situation. Some dairymen are paying married men $125 a uonth with free house, fuel, vegetables and milk; and for extra part-time help the going wage has recently been sixty cents an hour, with meals. I am sure hon. members can see the situation. I do not think the Manitoba milk board realized just how serious it was, but I went to one of these meetings, and I never saw such a determined bunch of men in all the twenty-eight years I have been shipping milk. They simply said, "We won't take it any longer. We will not ship any more milk until we get a square deal. There is a backlog of grievances. We have never had a square deal"; and Winnipeg is going to suffer as a result. Someone may ask how it was possible for dairymen to operate last year on a milk price which was below the cost of production. Well, the dairy farmer cannot go into and out of the dairy business over-night. He might have to carry on at a loss for a time, by accepting less for his labour, by using unpaid family labour, by going without interest on his investment and by not making necessary replacements, but that can last only for so long; then he will get out of the business. I know something about that, because I am one of those who exploited their families in order to give Winnipeg cheap milk; but in more prosperous times people just will not do this.
I do not want to take up any more time, since I am going to speak also on the next measure to be considered. I might assure the minister, however, that I have received all kinds of resolutions from the country asking that the grain exchange be closed and that the wheat board handle coarse grains. Personally I think that would be a good thing; I should like to see that done, because the present method of having coarse grains on a speculative market is anything but satisfactory. We cannot plan ahead. The farmer must know what he will have to pay for his grain. He has to sign an agreement with the milk companies covering a year ahead, and he signs at a price for that year. To do that he must know what he will have to pay for his grain, and the farmer does not know that at the present time.

Anything else I have to say to the Minister of Agriculture can wait until we reach the next item.


Mr. J. L. GIBSON (Comox-Alberni):: Mr. Speaker, I imagine many other hon. members are wondering, as I am, why we are here at this inopportune time of year, particularly in view of the so-called program that has been presented to us. However, personally I am very glad to have come three thousand miles, if only to say two things. One is to assure the Minister of Agriculture (Mr. Gardiner) that I am waiting for his announcement on feed grains. The other announcement I should like to hear before we leave is as to what steps the government intend to take in regard to increasing the allowances to the various classes of war pensioners in Canada. I sincerely hope that before we go home for Christmas we shall have a statement in that regard. I am quite sure that all the members of the government are kindly men, and that they will feel much better when they sit down to their Christmas dinners if they feel they have done the right thing in this very important instance.
1 imagine, too, that other hon. members are receiving a great many telegrams and letters, as I am, in regard to price control. I know we are all very much concerned with the drastic increase in living costs here in Canada, particularly as it affects those in the fixed income groups. I am inclined to agree with the Minister of Finance (Mr. Abbott), however, that any over-all reimposition of price controls would be most difficult to carry out at the present time. Looking around the government departments here, I for one cannot imagine where on earth you would find room for one more desk to put one extra stenographer at work if we set up such an organization. I also agree that it would be most difficult for a trading nation like Canada, which has to import and export so much, to keep prices of commodities in this country very much below world prices. Just for the minister's consideration, however, I was wondering if it might be possible for us to control undue or unwarranted price increases by setting up a price spreads board. Such a board would require to have power to present a report to the minister, and then there should be some teeth in the legislation, which would permit the minister to take action in the courts in any case in which undue profits were working against the public interest. Actually I do not think the threats we have heard from the government in this regard are sufficient to deter certain unscrupulous operators who may move into our commodity fields.

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The statements made so far by the minister would indicate that the government is trying hard to get away entirely from the payment of subsidies. I have not convinced myself that that is entirely wise. I was of the opinion that for many reasons the government should not have abandoned its subsidies on milk, flour and bread products. I think the soundness of my belief is evidenced by the fact that the government has indicated to the gold mines that it is prepared to subsidize them to some extent. To speak strictly from the political point of view, it would not appear to be wise for the government to be able to find funds with which to bonus gold mines, small as well as large, at a time when it tells people in the lower income groups that they must pay these drastically increased prices for bread and milk. I would not want anyone to get the impression that I am opposed to the government's policy of bonusing gold production. Probably that is wise, but at the same time I think a good case can be made out for the payment of subsidies on milk and bread. If the government is determined not to pay an over-all subsidy on flour and bread as was done previously, perhaps it might be possible to pay it in a somewhat selective way.
The government is committed to the payment of family allowances and it is prepared to go certain lengths in redistributing wealth in Canada. I was wondering if it would not be possible to include a few milk and bread tickets with the family allowance, veterans payments and old age pensions cheques that are sent out. They would go to the right people and in that way the subsidy would be selective. It might be an excellent thing to slip in a couple of extra tickets with the old age pension cheques that go out in Saskatchewan. They probably need them.
I should like to turn now to the very able speech of the hon. member for Rosetown-Biggar (Mr. Coldwell). It is perhaps unfortunate that the C.C.F. appear to be taking the same approach to our problems as the Labour Progressive party. I know the hon. member is sincere and I am trying to be fair in what I say. I think it must be a source of genuine embarrassment to hon. gentlemen opposite that they are coupled in the public mind with the Labour Progressive party.


Mr. ARCHIBALD:: They did not embarrass you in the last election.


John Lambert Gibson: They did not embarrass me and they are still there. I was honoured when the leader of the C.C.F. party paid a visit to Alberni, but it was a matter of regret that I happened to be in a
remote part of the riding and was unable personally to welcome him. I always felt that the hon. member had a great intellect and I think it most unfortunate that his outlook is somewhat circumscribed, possibly due to a too long residence in Saskatchewan and recently here in Ottawa.
The Albernis are perhaps the most advanced industrial towns in Canada and I am sure that the hon. member must have been impressed with the prosperity that was visible there. Strangely enough, that was all created through private enterprise. Some of the greatest mills in the world are located there. There is a great plywood factory and a magnificent new pulp mill.


An hon. MEMBER:: And the biggest strike.


John Lambert Gibson: It was
probably a humbling experience for him, as well as educational, to compare that mill to the little box factory he lelt in Saskatchewan. I know him to be a sincere man, and I am sure there was sorrow in his heart when he thought of the great socialist experiment in Saskatchewan where everything is supposed to be done for the workers. I am sure that the workers in that Saskatchewan box factory never in their wildest dreams thought they would receive the money that is paid in Alberni under private enterprise. I might say also that it has never been necessary for the companies there to threaten their men with a lockout unless they produced larger profits for the owners, the owners in that case being the government of Saskatchewan.
I hear my hon. friends across the way utter cries of despair over the terrible conditions we are facing, but I do not think there is an hon. member on any side of the house who will not say that conditions in his riding today are better than they have ever been before in the history of this country. I realize that things are not perfect and that there are still certain injustices under our social system. I am sure there is not a member who would not do everything in his power to correct these injustices, but it seems to me that the C.C.F. are doing a disservice to this country. There seems to be tendency on their part to try to gain political prestige by preaching a class struggle or something like that. That is entirely wrong. Probably I have been in Canada too long, but I have never seen evidence of the existence of a class or caste system in this country. It has always appeared to me that that is a form of mental escape for those who have not the vision and courage which one must have to get ahead under our system of society.
I am extremely sorry that the hon. member for Rosetown-Biggar was not able to stay longer
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in Alberni. I should have liked to take him along the west coast where there is probably the greatest undeveloped and richest frontier still remaining in Canada. I could have shown him billions of dollars worth of timber which provides every opportunity in the world for young Canadians to create businesses for themselves. Despite what C.C.F. members may say about all timber being alienated, the fact is that over ninety per cent of the twenty to fifty billion feet of lumber that are there- the government does not even know how much there is-is owned by the crown. It is available to you and to your sons. It is a challenge to you to go there and create opportunities for work for your fellow Canadians.
I do not want to be drawn into a biblical discussion, as one hon. member got into trouble the other day about Jeremiah; but the phrase, " 0 ye of little faith," strikes me as being particularly appropriate to the C.C.F. party.
I do not suppose I could go there without an invitation, but sometimes I should like to visit Woodworth House. It must be a great place down there and they must have some unique machines.


An hon. MEMBER:: You are invited.


John Lambert Gibson: I am not referring to propaganda machines because all political parties have those. There must be a socialist calculating machine down there. It is really amazing how they will take concrete facts from the Financial Post, put them through the machine and turn out the greatest bunch of political hamburgers you have ever seen to feed to the boys in the back concessions. They are so astute in so many ways that I am amazed they do not save the facts and figures that they get from this machine for the back concessions. After all, the people there have not much opportunity to check these statements.
I do not want to presume to give hon. gentlemen opposite any advice, but it often seems to me that they should set their sights higher. There are not enough people in Canada to put them into power if they appeal only to that type of intellect. They must go to another group. There is a group of people in Canada who are not satisfied with our present social conditions and they aspire to something better. I think hon. gentlemen opposite should try to reach that class of intelligent people who would probably in due course be able to bring them into power if hon. gentlemen opposite were worthy of it.


Mr. BENTLEY:: You had better come over and help us. You are good.


John Lambert Gibson: I was very much interested in the figures which the

leader of the C.C.F. party put on Hansard by unanimous consent, showing the increased profits different companies had made. I think he tried to leave the impression with the house that a certain percentage of those increased profits necessarily was the answer to the percentage increase in the cost of the goods. I think the hon. member for Rose-town-Biggar is far too intelligent and far too honest to try to make such an approach, particularly to the House of Commons. Most people have not an analytical mind such as he has, and probably many people will draw a wrong conclusion. If he was really trying to convey information to the house I could not help wondering how much more helpful it would have been if, in taking the profits of a bread company, for instance, which had shown increased profits, probably due to legitimate reasons such as an increased volume of sales, he had divided those profits by the number of loaves of bread which the company had distributed during the year and, instead of leaving the impression with uninformed people in the back concessions that the three or five cents increase in the price of a loaf of bread was due to inordinate profits that the company had made, he had shown the increased volume of sales and that the increased profits represented undoubtedly a very small fraction of a cent of increase in the price of a loaf of bread.
I hold no brief for big business. I have never been associated with it myself. But I am particularly grateful for the prosperity we have in my riding, which in very large measure is due to the fact that large capital has come in and invested its money and created jobs at high wages for the people I have the honour to represent.
I noticed among the figures which the hon. member for Rosetown-Biggar put on Hansard he listed the profits of British Columbia Packers. That happens to be a company with which I am very familiar. With most of the senior executives I was associated as a fisherman twenty years ago on the British Columbia coast. They have all come up the hard way themselves, and they are very able men in the fish business and very decent men. I just could not imagine them trying to grind down the faces of the poor or trying to make inordinate profits out of their misfortunes. I do not believe it is in their character to do it.
I managed this m-orning to get hold of the company's 1946 balance sheet. Keta salmon is the cheapest kind of salmon we pack in British Columbia. I have sold it myself for one-half cent a pound, and in those days the

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retail price of a can of Keta salmon on the store shelves on the prairies was ten cents.
I was particularly struck by the fact that the retail price today in a Vancouver store has advanced to twenty-five cents. One would naturally assume, after listening to the figures of increased profits given by the hon. member for Rosetown-Biggar, that the reason for , that advance in price was the increased profits the company had made. But I would point out that this year, instead of the fisherman selling that salmon for one-half cent a pound he is receiving twelve cents a pound, or twenty-four times as much as he received twenty years ago. An actual study of the situation will reveal that the primary producer has received the major portion of the increase in cost.
Speaking of the profits of British Columbia Packers, I should like to quote from the statement of the directors to the shareholders of that company. Probably some of my hon. friends in the C.C.F. party have had visions of large profits in canned salmon. The hon. member for Rosetown-Biggar quoted figures to show a twenty-eight per cent increase in profits, or $140,000 of an increase, leaving the impression that the profit was inordinate, but here is what the directors' statement says:
The profit represents only 2'2 per cent of the value of the total net sales for the year. This profit of one dollar for each forty-six dollars of production at sale value is insufficient having regard to the large amount of capital invested and the risks incurred in a business wherein millions of dollars must be expended in preparation for a fish run which in volume may prove to be far below expectations, and in which a year's production normally acquired within a short season and subject to decline, must be carried for comparatively long periods.
It is interesting to note that there was an increase between 1945 and 1946 of $9,637,000 in sales value. The company sold that much more product in 1946 than in 1945. Of that, the money they paid out to the fishermen and to labour amounted to $7,672,000, and all that the shareholders got, even including the increased profits that year, was one cent on every dollar of sales. That is all that was paid to the shareholder.


Mr. WRIGHT:: How much did they get on the capital investment?


John Lambert Gibson: They have a capital of $6,000,000 and the shareholders received $243,000, or about three per cent. The fish business, I can assure the hon. member for Melfort, is particularly hazardous. I think I would rather be a farmer in the Pal-liser triangle, which I know nothing about, than I would monkey around with t'he canned salmon business.


Percy Ellis Wright: It is easy to see you do not know anything about it.


John Lambert Gibson: I am
sometimes sorry that the C.C.F. are not in business themselves. They are great co-operators, and I have often thought their advice to the government and to the house would be much more sound and constructive if they had had a background of personal experience in the hazards of running one of these businesses. I just had that thought the other day.
I can remember the hon. member for Vancouver East (Mr. Maclnnis) when the indemnities were increased, saying that he did not want an extra $2,000 and I think he left the impression that none of the other members of his party wanted it at all. I have often thought it vpould be a good plan if twenty-five members of the group put up $2,000 apiece and went into the sawmill business, which is one in which they think large profits are being made. I know a pretty good sawmill on Vancouver harbour which they could get for $50,000, and it would give them an excuse for coming out to the Pacific coast once in a while. There would be many advantages to it. Of course, since there is a certain amount of hazard in this business, I would not suggest any of my hon. friends going into that scheme if they were down to their last Buick convertible or anything like that. But if they can afford it, it might be a good gamble.
I can see that you have over there a lot of talent. The hon. member for Kindersley (Mr. Jaenieke) can certainly set up your company for you and give you all the legal advice you need. I am sure that the hon. member for Winnipeg North (Mr. Stewart) would be able to advise you on income tax matters. You will not be quite as fortunate in British Columbia, of course, as you are in the box factory of yours because you will have to pay some taxes. I can well imagine, too, that the hon. member for Regina City (Mr. Probe) ought to make a good manager; he is full of energy, and he is evidently a forestry expert. One of my political scouts told me the other day that he had taken a postgraduate course in forestry, he read that poem on "Trees" or something. If you make a few dollars out of it you can alwravs use it to grease the propaganda machine at Woods-worth House. It will probably need a little attention by that time.
That is about all I am going to say to my hon. friends tonight. I say it very kindly. There is one thing I want to say in all seriousness. The hon. member for Cape Breton South (Mr. Gillis) made a particularly apt observation in his speech the other day when he expressed
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the view that the people of Canada were looking to the government to provide the kind of leadership required, point the objective as to where we Canadians as a nation were going. I believe that is a particularly timely request, and I should like to join him in it.
The Canadian people will go to any length to co-operate with the government in every way to try to put our Canadian economy on a sound basis. It is up to the government to provide that leadership and to point the way for us to follow.
(Translation):


Mr. PIERRE GAUTHIER (Portneuf):: Mr. Speaker, I have no intention of dwelling at length on this matter, important though it be. I merely wish to present to the house, and more particularly to the government and to the honourable minister of agriculture (Mr. Gardiner) a specific request on behalf of eastern farmers, and more specifically on behalf of the constituency I am privileged to represent in the house.
We have learned from previous speeches and from the press, of the demands being voiced all over the country. It is my belief that the eastern farmers also expect their demands to be voiced in this bouse, so that the government may act as soon as possible, as they hope it will, in adjusting the price of feed grains.
I know that in requesting that subsidies be restored or that controls become once more a part of our policy, we touch upon a very difficult subject, and one that arouses great enthusiasm in a large number of politicians. I must say, Mr. Speaker, that even if it were necessary, in order to meet the needs of the farmers in my district as regards mill feed, to restore some controls, I would heartily support such action, as I have always done, and I have clearly indicated my stand in that connection. I shall support whatever control is necessary or any control which may help farmers in the raising of cattle.
I have had the opportunity of meeting many delegations from the county of Portneuf, especially those associations representing l'Union Catholique des Cultivateurs. Almost all parishes in my constituency have sent delegations to meet me, and I communicated at that time-that was about two months ago -with the Right Hon. the Minister of Agri-

culture with a view to obtaining a price readjustment whereby our people could follow the cattle-raising policy which formerly gave splendid results.
I asked the delegates whether they could supply me with the prices they were paying for certain foodstuffs, certain feeds or other products required for breeding purposes. They provided the following figures which I wish to place on record: ordinary feeds: $3.50; chicken-feed, $4.35; hog-feed, $4; oats, $3.75; wheat, $3.25; flour, $5; linseed^bread, $5, which is very scarce, almost impossible to secure; corn, $5, which six months ago sold for $3.75.
I do not wish to paint too dark a picture of the situation, but the farmers I represent in this house do not expect me to create a literary masterpiece upon bringing their legitimate claims to the attention of the government. I shall be very brief and content myself with placing before this house the reasons they gave me, which are found in the Guide, a publication representing our Union Catholique des Cultivateurs (Catholic Union of Farmers). I quote:
First, the dominion goverment should entrust the wheat board, or any other organization established for that purpose, with the sale and distribution of feed grain to farmers of eastern Canada, in order to eliminate any speculation which might have the effect of making prices soar and creating inequality of distribution;
In the second place, the dominion government should immediately negotiate with the British Ministry of Food in order to readjust the prices of all agricultural products which we have agreed, under contract, to supply Great Britain;
In the third place, the Agricultural Prices Support Board, or the Department of Agriculture acting on its behalf, should establish minimum prices for agricultural products, the prices of which are too low or tend to go down, or take any other step capable of creating a satisfactory balance between the costs of production and the sale price on the Canadian and British markets, and
Finally, the dominion Department of Agriculture should consult with Canadian agricultural organizations before taking any new step with a view to ensuring the economic stability of our agricultural production.
Such are the grounds for these claims. They reflect quite accurately the views of farmers in my district and, I am sure, in the whole of Quebec province.
It is rather unusual, sir, for Quebec members to air grievances and inveigh against certain

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measures of the dominion government aimed at bestowing greater favours on farmers of the west and other provinces. I mention the west because I recall that hon. members from Quebec province have always been prepared to support the government in expediting the adoption of measures likely to lend greater help to western farmers.
I remember that we even voted countless amounts of dollars in order that they might, during a certain period, reduce their acreage in wheat and other seeds. We have been very agreeable, I repeat, to help our brother farmers in the west. It seems to me that when we ask, as we are doing today, that help be given to eastern farmers, so that the price of mill feed may be reasonable and that our farmers may continue to follow a cattle-raising policy which, as I said, has given splendid results in the past, all hon. members of this house, and especially those from western Canada, to whom we have extended our help on many occasions, should be the first to request the government to give sympathetic consideration to the claims of eastern farmers.


Mr. MICHAUD:: Hear, hear.


Pierre Gauthier: I remember that one day an outstanding husbandry expert from the province of Quebec, formerly a director of the Portneuf county experimental farm-operated by the provincial government -and head of the Quebec department of agriculture, Mr. J. S. Chagnon, asked that consideration be given to a program enabling Quebec farmers to obtain at all times of the year whatever products from the west they needed. The program was this: building, in various ports along the Great Lakes and the St. Lawrence as far as Gaspe, elevators to store oats, corn, feed mash and flour; in short, all the products I mentioned just now in connection with the request based on the claims of my constituents, which I made to the Right Hon. the Minister of Agriculture.
To my mind, dominion agricultural authorities would do well to reconsider the opinion of Mr. Chagnon, an agronomist, who feels that elevators ought to be built in the various ports along the St. Lawrence, and that eastern farmers should not have to contend with transport difficulties and with problems sometimes facing the railways when they have to provide enough cars to carry mash and grain from the west, as happened a few months ago.
On many occasions, delivery of certain products from my constituency, such as powdered lime, in great demand as a fertilizer, lagged behind schedule because the Canadian National or Canadian Pacific Railways, faced with a severe shortage of cars, could not carry out distribution in several constituencies of the province of Quebec.
I wonder, Mr. Speaker, if the Minister of Agriculture could not again consider the views expressed by Mr. Chagnon, an expert agronomist; and I hope that, in the near future, eastern farmers may benefit from this improvement which has perhaps not been sufficiently stressed but which could mean so much to them. I promised to use restraint and refrain from painting too dark a picture of the situation. However, if the dominion Minister of Agriculture does not help out the eastern farmers in connection with feed grains, com and flour, I must say that, although failure in this respect may not mean disaster, I feel sure our farmers would be compelled, as they are already, to keep only what is absolutely essential to feed themselves. It is not a matter of warding off starvation, but of making sure they do not suffer hunger because of a scarcity of commodities they used to produce when prices were fair and reasonable.
It has been pointed out that farmers stopped raising poultry or livestock and were even selling thoroughbred stock to the packers because of lack of feed and poor returns. That is perfectly true. I ask the government to give this problem special attention and to take urgent steps which, to a certain extent, should take precedence over the legislation now before the house so that when we go home for the holidays we can tell our farmers that their claims are being given special consideration.
(Text):


Mr. H. O. WHITE (Middlesex East):: Usually some short name or nickname is given various proceedings, and I think it is likely that this short session before the Christmas season will be called the rubber-stamp session. We have come here and are confronted with the problem of wThat vre should do with the powers act. Shall we extend it another three months? What else is there to do?
We were denied an opportunity on the speech from the throne to discuss the prob-
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lems of the country, but it seems to me that so far every speech has done just about that. We came here to discuss the trade treaties and some of the austerity program, but all we can do is to give our blessing. In other words, it looks as if the government wants to shift the responsibility from its own shoulders to the shoulders of parliament and to blame parliament instead of taking the blame itself.
For some time the farmers have been expecting an announcement regarding prices of animal products. I wonder if we have had two of the answers today, one of them being the bill to legalize the manufacture and sale of oleomargarine in this country. The other was a news article declaring that 10,000,000 pounds of butter would be imported from * New Zealand. That may be an answer but it is not the answer that the farmers were hoping for. In fact, the farmers will be terribly disappointed about it. It seems strange, but when the government wants to find some cheap food, when it wants to find something that will embarrass the farmer it can find it anywhere; but when the farmer wants a market where he can get a little more money for his product the government can find a good reason for not allowing the farmers to enter that market.
There is something else the government could do as far as meat prices and prices of animal products are concerned, and that is simply to implement the Agricultural Prices Support Act. It is on the statute books of the country and does not need a great staff to administer it, and it would serve its purpose here and now.
It might interest many farmers to know that a Liberal introduced this oleomargarine bill into the house. There is confused thinking across the way. For instance, there was the spectacle of the Minister of Veterans Affairs (Mr. Mackenzie) declaring that he was a believer in socialism, and the hon. member for Selkirk (Mr. Bryce) just now mentioned the fact that people bought milk for ten cents while it was subsidized. Well, our children's children will pay for that milk. Only half of the milk that was consumed during the war years was paid for. That is going to be a different matter.
In the past, probably in the dim distant past, we referred to the two parties in the house as high and low tariff parties. But today labour is protected by tariffs. Goods produced by cheap labour are not allowed into the country. Industry is protected by these self-same tariffs and they are quite substantial. But apparently there is not protection for the dairy industry, a $400 million industry

in this country. There is no protection for that industry or for the farmers. At the same time they are denied, as I said a moment ago, access to United States markets where they could get a decent price for their products. Neither the Canadian fishermen, nor the Canadian lumbermen, nor the miners, nor the pulp and paper industry are denied access to the United States markets. They all have such access. But the farmer, the poor man of the Canadian economy, is tied up to the European economy, and I think he is getting tired of it.
I noticed on Saturday, according to the bulletin board in Ottawa, that the government was reporting the biggest surplus in its history, a matter of $486 million in the first eight months of this fiscal year. We also had the announcement on November 17, I think it was, of the austerity program and increased taxes on imported goods. But along with that were taxes of twenty-five per cent on things which were made here in Canada, which really makes no rhyme or reason whatever. Many industries will suffer from it; and when industry suffers, labour suffers. In my riding of Middlesex East, in a large part of the industrial east end of London both industry and labour are likely to be affected before this austerity program ends) and there has been some speculation as to when it will end. I suppose one man's guess is as good as another's. But if I were to make a guess, I would say that this austerity program will end and these taxes will come off and this $486 million surplus will be thrown at us right before the next general election. That would be the logical time to take those taxes off. Probably it was a good idea to put them on, in order that there would be something to take off.
Many of the statements that are compiled nowadays based on figures supplied by the dominion bureau of statistics are unfair to the farmer because most of the statistics refer back to the years 1935 to 1939; and if there ever were a time in the history of Canada when farmers' prices were out of line with those of other products, that was the period. So when it is said that farmers' prices have risen so much and prices of other products have not gone up as much-for instance, you will hear it said that the price of farmers' goods has gone up to 150 per cent and manufacturers' goods only 125 per cent, or whatever the case may be-consideration is not given to the fact that the period used by the dominion bureau of statistics was the unfair-est time in all Canadian history. So we are at a disadvantage when we come to compare figures.

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I wish to say another word or two about the dominion bureau of statistics. I happen to be in the business of producing honey. The dominion bureau of statistics this year reported the biggest crop of honey in Canada's history. When the official who was responsible for the compiling of those figures was brought before the Canadian bee keeper council and questioned on the correctness of those figures, with all the figures at his command and all the statistics available, he could not prove that he was right. But we could not prove that he was wrong. But I submit this, Mr. Speaker, that with the province of Ontario experiencing only half a crop and the province of Quebec, which ordinarily produces about
2.000.	000 pounds, producing this year about
6.000.	000 pounds, with the province of Manitoba with fifty to sixty per cent of their normal crop and Saskatchewan likewise, the figures certainly could not have been correct. But we will suppose that they were correct. If he was right this year, he was wrong in all the other years.
Also, the bureau of statistics report a surplus of all kinds of farm products whenever they get an opportunity, with the hope that prices can be depressed for farm products. For instance, this year they said that the apple crop was seventeen per cent above last year's crop, but they failed to state that last year's crop of apples was fifty per cent below normal. This practice gives consumers a wrong impression. These figures are juggled, as I say, to the producers' disadvantage. I think the bureau should be more careful in the material they feed out to the press, in the hope possibly of getting cheap food; because, after all, none of those who are engaged in that work are producers.
Some of those who have spoken on this subject today have had a telegram or telegrams as an incentive or prod to say something about the matter. I am sorry to say that I have not had any such excuse. But I wish to say that many of the farmers are very much disappointed over the way in which daylight saving is being handled. We should either have daylight saving across the country or we should not have it at all. When one municipality is on daylight saving and another is not, or when the city is on daylight saving and the country is not, a confusing situation is produced. Farmers who are employing short-time labour from the city find that about the middle of the afternoon the labourers' day is ended and away they go home, whereas the farmer can go on and work for another five or six hours. I think daylight saving should be made effective right- across
the country or not at all. If we are going to have control, let us have some here.
Mr. BONA ARSENAULT (Bonaventure). It is obvious, Mr. Speaker, that because of the present economic situation in which we in Canada find ourselves today, the powers granted to the government by the Transitional Measures Act of 1947 are still required. Certain facts must be faced. Since most of the controls were lifted and our economy was handed back largely to provincial jurisdiction and private enterprise, the cost of living has risen to a point where we must frankly admit that thousands of householders in this country cannot afford many of the bare necessities of life. At the same time at least some sections of this so-called private enterprise are taking advantage of this unfortunate situation to realize exorbitant profits at the expense of the masses of the people of this country. Figures given in this house on December 9, I think, by the hon. member for Rosetown-Biggar (Mr. Coldwell) have not been denied as yet, to my knowledge; and to complement those figures may I state that during the year 1946 chartered Canadian companies increased their profits by about 350 per cent over those for the year 1938, realizing SI,400 million; while during the year 1947, which will end in a few weeks, the profits realized by these companies will probably reach the 82,000 million mark, or about 500 per cent greater than the profits cashed in by the same companies in 1938.
I am not against private 'enterprise; I am not against profits realized by private enterprise, but I am dead against the abuses of capitalism in this country. At the same time we see that in 1945 the cost of living index stood at 119-7. while the food index was at 133-3. In 1946 the total cost of living index had increased to 126-8 and the food index to 148-5, while at November 1 of this year the total index stood at 143-6 and the food index at 173-6, an increase of seventeen per cent for the whole index and fifteen per cent for the food index in a single year. This gives many of us grave concern.
I do not like to mention these things, but they have to be said. The situation cannot continue indefinitely. The people of Canada are not prepared to accept this kind of squeeze much longer. Therefore the powers sought by the government will have to be exercised fully in order to bring an end to this state of flagrant social injustice in our country. We all know this is not an agreeable task to have to perform; it is a most difficult one, indeed, but inflation such as we are experiencing in Canada today is one of the most crucial problems to face this country since the war. A solution will have to be found, because if
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we let inflation continue its upward trend this country will soon fall into a major economic depression. Therefore drastic measures should be taken immediately in order to bring the cost of living index at least back to where it was in 1946. We cannot rely upon the oldtime laissez faire to solve these problems.
I believe the hon. member for Portneuf (Mr. Gauthier) said he would permit the government to impose certain controls and price ceilings. I would go much farther than that. I believe price ceilings should be reimposed immediately on timber and on all basic food commodities. At the same time, in order to help solve our dollar crisis, we should take advantage of the concessions made to us in the trade agreement worked out with the United States and re-open our export market in that country to the extent of at least fifty per cent of our surplus production of lumber, livestock, wheat, grain and meat. Then in order to assist our eastern farmers the freight subsidy on coarse grains from the west should be maintained after March, 1948, and, in addition, a subsidy of at least $6 per hog should be paid the eastern farmers. Then I respectfully suggest to the Minister of Finance (Mr. Abbott) that, since it seems very doubtful whether the additional excise tax on automobiles, announced as an emergency measure for the conservation of our United States dollars, does in practice serve this purpose, it should be lifted as soon as possible. Furthermore, there is profiteering going on in Canada on a very high level, at the expense and suffering of the people at large. In order to put an end to profiteering in this country, and at the same time in order to help our wage earners and the common people maintain a decent standard of living, I would suggest that a special excise profits tax be imposed on all essential industries and firms in Canada, over and above a certain margin of profit which would be considered fair and just, the huge sum of money so collected to be redistributed to the people of Canada in the form of subsidies or income tax reductions.
I ask the government to study these few suggestions very carefully. Unless the situation is corrected promptly, we are heading for social upheaval and economic chaos; we are diving backward into the same era of confusion and hardship that marked the decade after the termination of the first war. Each of us in this chamber has a responsibility in discovering the best possible solution to this very urgent problem.


Mr. A. M. NICHOLSON (Mackenzie):: Mr. Speaker, first I must congratulate the hon. member for Bonaventure (Mr. Arsenault) who

has just taken his seat. I am sorry more of the cabinet ministers were not in their seats to hear his timely remarks.


An hon. MEMBER:: They saw what was coming and left.


Alexander Malcolm Nicholson: I am not speaking of myself; I was referring to the hon. gentleman who just made one of the most valuable contributions to come from the other side of the house.
In view of the critical comments that have been made regarding affairs in Great Britain, I think I should say a word or two on that matter. Some of the Conservatives to my right and to my left have been very critical. I suggest they should secure a copy of this interesting booklet, "How Britain was Fed in Wartime". On page 34 they will find this:
The experience of 1914-21 showed how important it would be, in another war, to control prices at the earliest possible moment. In 1939 this lesson was not forgotten and price control orders for the chief foods were ready for signature at the outbreak of hostilities.
So the Labour government was not responsible for imposing price controls. They were imposed by a Conservative government because it was recognized that they could not have a repetition of the profiteering which took place during world war I.
Then on page 22 of this same booklet I find a justification for the rationalization of milk collection and distribution. I quote:
To economize in transport and labour, the ministry of food rationalized the collection of milk from the farm and its transport to the first-hand buyers, with a resultant saving of 75,000 vehicle-miles daily and 2J million gallons of petrol per year.
It went on to mention the situation that normally prevailed where you would find six or more vehicles delivering milk on the same street. We tried to follow that pattern in Canada, but we were not quite so successful. The 1943 report of the wartime prices and trade board states:
For example in Saskatchewan, where a zoning plan for deliveries to creameries has been operative since May 1, over 2,000,000 truck miles per year have been saved. Zoning plans do not affect farmers hauling their own milk or cream or shipping it by rail, and therefore do not tie producers to a particular plant.
I know there are a great many members who would like to have six delivery wagons going down their street every morning delivering milk, but I think the majority of men in Canada would prefer not to have to pay seventeen cents a quart for milk if it were possible to have it handled in a more rational manner. It so happens that in Ottawa we have four different milk wagons coming to the four

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houses nearest to where we live. They all sell milk which must come up to certain standards. I defy any hon. member to take milk from one of those wagons, put it in a glass and be able to say it is any different from that delivered by the other wagons.
I am glad the hon. member for Peace River (Mr. Low) is in his seat. I was disturbed the other day to hear him quote a lengthy report in Time magazine dealing with the behaviour of one Frederick Henry Dennis, a man who owns a 1,000 acre farm in Suffolk, England. I know the hon. member was not responsible for the quotation, but I think he should have tried to be fair. I have never had the good fortune to visit his constituency, but I am sure that I could go to some areas and find some rather sordid conditions. If I described those conditions it would not be fair to the Peace River country or to Canada. It was not fair to select that article from Time and present it as it was presented, without trying to get the other side of the story. It certainly was not doing a service toward the better understanding of international affairs.
I understand that there is a man named Frederick Henry Dennis who does own a large farm. I understand also that his fall wheat crop was a failure through no fault of his own or through no fault of the government. This resulted entirely from the most severe winter they had ever had in British history. In the spring he was granted permission to seed his field to mustard, but Mr. Dennis was not a co-operative citizen.


Solon Earl Low: He was ordered.


Alexander Malcolm Nicholson: No, the facts are that he was granted permission to plant mustard, not buckwheat.


Solon Earl Low: He was ordered.


Alexander Malcolm Nicholson: I am not quoting.
Time; I am giving you the facts from information which is correct. You gave the story as you got it from Time. I am not quarrelling with the hon. member, I am simply saying that he should have got the other side of the story. I understand that the owners of caged birds in Great Britain are finding great difficulty in getting bird seed and they are *buying buckwheat on the black market at fabulous prices. Mr. Dennis was determined to disregard the laws of his country. Instead of seeding his field to mustard in order to fertilize his land so that the following year the people of his country might have more food, Mr. Dennis decided that there was an opportunity to feed the little birds in cages and make money on the black market. He
disregarded the laws of his country and seeded his land to buckwheat. When the matter was brought to the attention of the authorities they said that he had violated the law and that the buckwheat must be plowed under.


Solon Earl Low: They waited until it was ripe.


Alexander Malcolm Nicholson: It was not ripe. He
had a good deal of influence and there was some delay in execution. Orders were given for the buckwheat to be plowed under, but he pulled some strings. I think the ministry of food is open to some criticism for not having carried out the order. There was some delay and some argument as to whether the buckwheat was too far advanced to make .the proper green fertilizer which was desirable, but I understand that the matter is now in the courts and that there will be a full and fair explanation. There is no doubt that Mr. Dennis violated the laws of his country and seeded buckwheat with a view to getting black market prices. I think the hon. member for Peace River should have taken the time to find out if there was another side to the story as it was given in Time. The information was available in the office of the high commissioner for Great Britain. They have not made a public statement-


Solon Earl Low: Is that where you got it?


Alexander Malcolm Nicholson: I got the information
from the British high commissioner's office and it was available to any hon. member who wanted the complete story. I suggest that if the hon. member had consulted the New York Times of December 7, he would have found an article by Charles E. Egan, which reads as follows:
A new spirit of hopefulness, the like of which has not been seen in Britain since the days immediately preceding the end of the war, has taken hold of the average citizen here during the last few weeks. Travellers going through London, the midlands and other parts of Britain after an absence of a year or two have been struck by the new attitude of the public and are puzzled for an explanation.
And further on:
The steel output through October and November has been running at a rate equivalent to an annual production of 14,000,000 tons. The figure for October was the highest ever recorded by the industry. The iron and steel industry has passed its target for the current year and is matching the output level fixed for 1948.
And again:
Although Britain realizes it has a long way yet to go before its economy is salvaged from the post-war menaces, a start at least has been made and this has engendered in the public a new self-confidence in survival.
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In connection with iron and steel production the article says:
An indication of the strides made in the iron and steel industry is conveyed by a comparison of the current rate of production with that in 1938. Using the 1938 level as 100, the current output of pig-iron stands at 115, that of steel ingot and castings at 138, cold rolled strip at 307, light rolled products at 142 and steel castings at 159.
I want to say to the Progressive Conservatives and others who are critical of any proposals that come from this corner of the house or of any suggestions we offer for a future Canadian program, it is not the C.C.F. that is on trial; it is our whole democratic set-up that is being tested. I should like to draw the attention of hon. members to an article which appeared in Maclean's of December 1, 1947, by L. S. B. Shapiro and entitled, "Will Stalin's bread conquer Europe?" He deals in considerable detail with the critical shortages in Europe and he selects Italy as an example. He points out that Italy would require to import 3-4 million tons of cereals this year in order to maintain her very inadequate rations. Then that figure was cut down to 2-9 million tons and later to 2-4 million tons. They realized that that target could not be realized with the United States supplying a maximum of 1-3 million tons and Canada supplying only 100,000 tons. However, Mr. Shapiro shows that there is a shortage, on the starvation side, of 200.000 tons. He goes on to say:
The situation, therefore, is quite clear. The western nations will supply Italy with the bulk of her minimum requirements-less 200.000 tons. This shortage will become acute in February. The psychological moment will arrive then-because, when a man is hungry, the important thing to him is what he can eat now, not what he ate last month.
When Italy is sufficiently hungry and cold, the Soviet union is prepared to come through with the last 200,000 tons-and the political impact will be tremendous.
Toward the end of the article I find this:
The European workman who can't get enough food into his stomach to supply sufficient energy to earn a living is not going to be impressed by the fact that Americans are forgoing chicken on Tuesdays and eating fish and meat instead. It's not that he feels himself in a position to demand anything of the Americans or the Canadians. He is instinctively judging a situation. If democracy doesn't work he will have to try something else. And there is only one thing he can try-communism.
That is the realism with which the western democracies must approach the problem. They must realize (1) that there is simply not enough food in the world today; (2) that in the topsyturvy distribution system in which we find ourselves, the only available sources for alleviating the situation are on western dinner plates

and in the granaries of Soviet Russia; (3) that Russia is waiting and hoping that the selfishness of the people of the west will present them with the opportunity to make good the deficiencies.
Poultryless Tuesdays and meatless Thursdays won't save western Europe. Only a wartime system of compulsion wherever there is an adequate supply of food will save it. The people of the west must share their food-not contribute their surplus-share it! Otherwise a way of life will pass from the face of Europe, not to return in our lifetime or our children's. If this is important to the people of the west, then they must act stex-nly and decisively.
This is a war; the weapon is food.
We have the performance of Canada during all the years of war to support the arguments made by the members of the C.C.F. during this debate and in previous debates that Canada can do the job if we want to. During the war the Minister of Reconstruction (Mr. Howe) set very high targets for his objectives. The Minister of Agriculture (Mr. Gardiner) appealed to the farmers of Canada, and while he never did give them a fair deal, the farmers produced as never before and surpassed all records. The Minister of Finance (Mr. Abbott) declared that whatever was physically possible would be made financially possible, that no financial obstacles would be allowed to stand in the way. The wartime prices and trade board was set up. We had different members of the cabinet emphasizing the importance of having control over prices and having a planned economy. Donald Gordon, speaking on November 15 last on price control, said:
Here we have a situation where the security of tenure and the peace of mind of many thousands of citizens have to be weighed against the dissatisfaction of owners wrho are temporarily prevented from improving their profits or getting possession of their own property.
Mr. Gordon, spoke in that way in justification of rental controls and regulations where the good of all was the dominant consideration, and where the desires of individuals to improve their own personal positions did not receive very much consideration. We remember that gifted writers like Kenneth Wilson and Frederick Griffin were brought to the aid of the board to tell the people of Canada how important it was to get their full cooperation.
I have here a pamphlet by Frederick Griffin on "Fighting Inflation", and on page 3 I find this-he is quoting the Minister of Labour (Mr. Mitchell):
"Under inflation in Canada," says Mr. Mitchell, "men rvould gamble madly in dollar futures. People would lose their homes, their businesses, their lands, lose them to slick men with funny money."
He went on to say that if you took this Canadian dollar bill which I have in my hand

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to Germany, in December, 1922, you would have been able to secure 10,000 German marks for it, and that by August, 1923, you could have got 10,000,000 marks for it, and in November, 1923, 130,000,000,000 marks. So I ask my millionaire friends to my right to listen to the words of wisdom uttered by the Minister of Labour a few years ago. The national debt of Canada could have been settled with the equivalent of one dollar if our currency should fall in value as the German did after world war I. Fortunately we have not reached that stage here. I have friends who retired in British Columbia a few years ago, believing they had enough money to keep them the rest of their lives, but now they find that the dollars they took to British Columbia are not worth much more than fifty cents. We have a great many people in Canada, pensioners and others, who are living on a fixed income, and if hon. members are not worried about the problem of inflation I can tell them that the people back home are worried. If hon. members here take the position of the hon. member for Comox-Alberni (Mr. Gibson), that everything is fine and that people are not worrying, certainly the rank and file of the Canadian people are not viewing the situation complacently.
I have here the Labour Gazette for November, 1947. It contains reports of three important trade union conventions that were held since parliament prorogued in the summer. First, the trades and labour congress, representing 360,000 members, made it very clear that everything was not fine in Canada when they passed this resolution unanimously:
Resolved that, this 62nd convention of the Trades and Labour Congress of Canada declares to the nation that the cause of the present alarming spiralling of prices is due to the selfish profiteering of big business which must be curbed, checked and brought under strict control, and the workers and farmers of Canada are working hard and producing more as a whole-


Arthur Leroy Smith: Does the hon. member believe that last statement?


Alexander Malcolm Nicholson: I have not finished the quotation:
*-and individually than at any time in our country's history and are getting less for their labour in real purchasing power than for years past. These truths are self-evident.
I am sure my hon. friend will not dispute it.


Arthur Leroy Smith: I do dispute that.


Alexander Malcolm Nicholson: The trades and labour congress further resolved:
That this 62nd convention of the Trades and Labour Congress of Canada demand that no
further price increases on necessities of life be allowed, and that the federal government immediately establish a price control board to which all applications for price increases be made and which should also review and examine all 1947 price increases.
The Canadian Congress of Labour, representing about 360,000 members, at its convention also passed a resolution on price control:
Be it therefore resolved that this convention go on record as condemning our federal government for its recent move towards complete elimination of subsidies and price control to the obvious detriment of Canadian citizens generally; and
Be it further resolved that we demand of the federal government that in the interests of the national welfare, a special session of parliament be called to deal with the question of replacing the subsidies and price controls recently removed on basic foodstuffs, clothing, and other essentials, and that they reimpose the excess profits tax, and investigate all price increases since the elimination of price control, and punish those guilty of profiteering.
Still another very important convention was held by the Canadian and Catholic Confederation of Labour, representing 70,000 workers. The convention went on record in regard to prices, and the delegates at the convention asked the federal government to reimpose price control until production became sufficient for consumer requirements.
The whole point of my argument is that during the war Canada proved we could do it, and why now, with a larger number of people on the farms than ever before, do we have to face the cold fact that we have to cut down our consumption of milk, our consumption of butter, our consumption of cheese and our consumption of meat products? Why is it that with our tremendous productive capacity-


Arthur Leroy Smith: If the hon. member will permit a question, does he not know as a matter of fact, when he is speaking of the price of milk, that every province in Canada from Ontario west has price control in milk now, under provincial boards, and had it for a great many years prior to the dominion imposing its control? The hon. member is complaining about the price of milk. Milk is under control now in several provinces and the price of milk is rising everywhere in Canada.


Alexander Malcolm Nicholson: If my hon. friend wants to make a speech-


Arthur Leroy Smith: I am asking the hon. member a question.


Alexander Malcolm Nicholson: What the hon. member wants to do is make a speech. The facts are that we have available in Canada the manpower necessary to produce all the milk that we can consume.


An hon. MEMBER:: Where?
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Alexander Malcolm Nicholson: If we had during the war a million of our youngest and strongest men and women in the armed services, and with the majority back home available now, if we cannot produce as much milk now as we could during the war there must be something wrong with our economy. That is all we are saying. There is something wrong and it is the duty of the government to work out in peacetime as it did in wartime a program so that whatever is physically possible is finan-daily possible.


James Garfield Gardiner: The Conservative government worked the other out before the war.


Mr. JACKMAN:: That is social credit.


Alexander Malcolm Nicholson: I do not care what it is; it is plain common sense. That was the theory of Mr. Ralston when he was Minister of Finance and also of the present Minister of Justice (Mr. Ilsley) when he was Minister of Finance, that whatever was physically possible could be made financially possible.
Let me remind the house that during the war we turned out in our Canadian shipyards 486 naval escort vessels. The Canadian aircraft industry turned out 16,400 planes, and by the end of 1943 more than 120,000 people were employed. The arsenals and shell-filling plants turned out more than 80,000,000 rounds of heavy ammunition and more than 4,000 million rounds of small arms ammunition. We built, in all, 6,590 tanks. Food produced on the farms was more than doubled in wartime with our ablest and strongest people off the farms. We doubled our food production in spite of the fact that we had a reduction of thirty per cent in our manpower. How about the cost of the war? According to 'Canada From Sea to Sea", it was $19 billon, almost $10 million a day for the entire duration of the war. Hon. members must aot forget that solemn commitments were made to those who risked their lives. We promised them that they would never have to return to a Canada of insecurity, a Canada of want. Now that the war is over, we have the manpower and we have a hungry world calling for the foods that we can produce here. I submit that the government of the day must not break faith with our citizens. We must see to it that-


Mr. BARRETT:: Will the hon. gentleman permit a question?


Alexander Malcolm Nicholson: Certainly.


Theobald Butler Barrett: Will he advocate the conscription of manpower in peacetime?


Alexander Malcolm Nicholson: I do not think there is any need for conscription of manpower if the government of the day will guarantee that [DOT]the farmers will be given a fair price for their products. I think the industrial worker in Canada will work as hard in peacetime as he worked in wartime. We did not need conscription of manpower to get our foundries, our mines and our airplane factories working. We did not need conscription to get production of agricultural products, and there is no need to have conscription of manpower now if we can get a decision from the government, and if we can get some co-operation from the people on this side of the house to face up to the facts that Canadian citizens are now living in a state of insecurity with a rising cost of living. They do not know whether next year they will be able to maintain food, clothing and shelter for their families.


Mr. RODNEY ADAMSON (York West):: Mr. Speaker, this debate has taken the form of a debate on the usefulness or otherwise of controls, and a rather simple motion of the Minister of Justice (Mr. Ilsley) to extend the emergency powers bill under the statutory clauses in the bill has developed into a wide-open discussion that has wandered all over the world with regard to the advocacy of a completely controlled economy for Canada.
There is one country in the world that has a completely controlled economy. The previous speaker mentioned it in rather laudatory terms as being the saviour of Europe. I refer, of course, to the Union of Soviet Socialist Republics, which have been such a help to us in the recent four power minister's conference which has just broken up today, thereby destroying the hope of any secure peace in Europe for an indefinite period.
Let us see what this great utopia has done this very day. There is a current joke going around in the Soviet republic which is repeated by those who are able to travel, and it is this. One Russian asks the other, "what is the jolliest money in the world?" and the other Russian answers, "The Soviet ruble, because the foreigners laugh so much when they see it." Let us look at what has happened in Russia in the last two days. The currency of that country has been cut by the ratio of ten to one; that is, if you had a thousand-ruble bill it is no longer of any value unless you exchange it in the bank for a hundred-ruble bill. I think that is a fairly drastic deflation in currency, the wealth of the people, and I hate to think what any government in any democratic country would be up against if they adopted any such measures as that.

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Let us go to the next question, bank credits. Bank savings accounts are cut anywhere from a third to a half, depending on the size of the bank account. Government bonds are cut by two-thirds. That is, for every government bond, every victory bond you have there is a drastic reduction. You would take three 100 ruble victory bonds to the bank and the bank would say, "Thank you very much; we will give you one new 100 ruble bond in exchange." That is what complete control of currency, complete control of the life of the people, complete, control of production, complete control of every going in and coming out of the citizen means. That is inflation; that is chaotic conditions. I ask this house whether any government in this country, in the United States or in any country that calls itself a democracy, could withstand the wrath of the people for one five-minute period if it took steps such as these?
Let us see what happens to the Russian worker. We have tremendous demands for controls, tremendous demands for the imposition and increase of controls over the entire economy of Canada. Every day spokesmen for unions wire members of this house to reimpose controls, saying, "Let us go back to the controlled economy of the war." What happens to the Russian worker in a completely controlled economy? His salary remains the same. His bank account is cut by a half to two-thirds, if he has one. The currency in his pocket is devalued by ten times. He can buy food or clothes or anything that he has money to pay for, only in the new currency. The worker, office or factory-and I am quoting from an Associated Press dispatch from Moscow-offers to continue his salary at the new rate for the generous period of one-half of a month. Now, Mr. Speaker, that is an example of an agricultural and industrial country that was held up by hon. members to the left as being the saviour of Europe, as being the economy, the ideology of the nation that is prepared to step in if the Marshall plan fails, to prevent starvation in western Europe. In fairness, I think some examination of what conditions are actually like in Russia should be made. When you get across this country a wave of pressure groups demanding a completely controlled economy, I wonder how far they would be prepared really to put up with it if they got it.


Mr. DEPUTY SPEAKER:: Is it the pleasure of the house to adopt the motion? Carried.


[Stage Direction]
Motion agreed to.
AGRICULTURAL PRODUCTS ACT CONTINUATION IN FOIiCE UNTIL MARCH 31, 1948
James Lorimer Ilsley: Mr. Speaker, may I ask that the
house revert to "Government Notices of Motions". I should like to move the following resolution standing in my name:
That, whereas section eleven of the Agricultural Products Act, being chapter ten of the statutes of 1947, provides that subject as thereinafter provided, that act shall expire on the thirty-first day of December, one thousand nine hundred and forty-seven, if parliament meets during November or December one thousand nine hundred and forty-seven, but if parliament does not so meet it shall expire on the sixtieth day after parliament first meets during the year one thousand nine hundred and forty-eight or on the thirty-first day of March, one thousand nine hundred and forty-eight, whichever date is the earlier:	Provided that, if at any time
while that act is in-force, addresses are presented to the governor general by the Senate and House of Commons respectively, praying that that act should be continued in force for a further period, not in any case exceeding one year, from the time at which it would otherwise expire and the governor in council so orders, that act shall continue in force for that further period.
And whereas it is considered desirable to continue the said act in force until the thirty-first day of March, one thousand nine hundred and forty-eight;
The following address be presented to His Excellency the Governor General of Canada:
To His Excellency Field Marshal The Right Honourable Viscount Alexander of Tunis, Knight of the Most Noble Order of the Garter, Knight Grand Cross of the Most Honourable Order of the Bath. Knight Grand Cross of the Most Distinguished Order of Saint Michael and Saint George, Companion of the Most Exalted Order of the Star of India, Companion of the Distinguished Service Order, upon whom has been conferred the Decoration of the Military Cross, one of His Majesty's Aides-de-Camp General. Governor General and Commander-in-Chief of the Dominion of Canada.
May it Please Your Excellency:
We, His Majesty's most dutiful and loyal subjects, the House of Commons of Canada, in parliament assembled, respectfully approach Your Excellency praying that the Agricultural Products Act be continued in force until the thirty-first day of March, one thousand nine hundred and forty-eight.


Mr. J. A. CHARLTON (Brant):: Mr. Speaker, before proceeding with the resolution before us, may I say a word regarding the remarks made by the hon. member for Vancouver East (Mr. Maclnnis), as reported at page 267 of Hansard:
If this government cannot tell the farmers of Canada that over a period of years they will have stability in their industry and will get cost of production out of their efforts, the
Agricultural Products Act

farmers of Canada will do just what they are doing now. They will slow down on production, and slowing down on production today, particularly food production, when millions of people are starving throughout the world, is a crime of the greatest magnitude.
Now, Mr. Speaker-


Mr. MacINNIS:: I do not wish to interrupt the hon. gentleman, but as I understand the rules of the house, a debate concluded cannot be referred to in the same session.


James Lorimer Ilsley: That is right.


John Alpheus Charlton: I did refer to it.


William Ross Macdonald: It is against the rules of the house for an hon. member to debate the same subject during the current session.


John Alpheus Charlton: I can give in my own words what the hon. member said, but I hope that is not necessary now because I have already read it.
I do say, however, in view of the tremendous job which the farmers have done across the country, that it ill becomes any member, and least of all the hon. member for Vancouver East, to call the farmers criminals because they have slowed down in production after continuing for five years the effort they made during the war.


Angus MacInnis: Mr. Speaker, I object to the hon. member taking up the subject now. He should have taken it up when I made the statement. Moreover, I did not say what the hon. member says I said; I was saying it in an altogether different sense. I was pleading for increased production all round and I did say it was a crime that production should be reduced.


John Alpheus Charlton: I quoted from Hansard, Mr. Speaker, and if the hon. member wants to call Hansard untrue-


Angus MacInnis: If the hon. member
wanted to object he should have objected when I made the statement. I object to his proceeding now because I cannot deal with the matter.


William Ross Macdonald: The hon. member for Vancouver East has objected to what has been said by the hon. member for Brant (Mr. Charlton). He says he did not make the statement-


An hon. MEMBER:: It is there.


William Ross Macdonald: I would ask the hon. member for Brant not to refer to a previous debate in this session.


John Alpheus Charlton: It was a straight quotation from Hansard. The hon. member said it and he cannot get out of it. It is on page 267.


William Ross Macdonald: Order. I have asked the hon. member for Brant not to refer to that debate in his present speech.


John Alpheus Charlton: I am sorry. I am sure, though, that many farmers across this country will feel very badly at that accusation.


Angus MacInnis: Mr. Speaker, the hon. gentleman is still talking about the same subject.


Mr. BOUCHER:: He is not quoting
Hansard.


Angus MacInnis: It makes no difference whether he is quoting Hansard or not. He cannot refer to it, and the Speaker has so ruled three times. That debate is finished. He had plenty of time to get into the debate if he had wanted to.


John Alpheus Charlton: Do you want to make another speech now?


William Ross Macdonald: The rule is that an hon. member must not refer in the present session to a debate that has 'been concluded.


John Alpheus Charlton: The Agricultural Products Act, Mr. Speaker, which was passed in this house on March 21 last, does not need further debate. In view of the fact that we met in December instead of January, this debate cannot be avoided. My remarks regarding the act can be found in Hansard, and they would be exactly the same today if I were to repeat them.
Agricidture today faces the most serious situation with which we have been confronted in many years. Almost irreparable damage has been done, regardless of what the parliamentary assistant to the Minister of Agriculture said in London on Tuesday last, and I quote:
Robert McCubbin, parliamentary assistant to agriculture minister Gardiner, today forecast to the Middlesex federation of agriculture an announcement from the federal cabinet within "two or three hours" or at the latest two or three days which would solve all their farming problems.
Regardless of that fact, even though that statement were to be made now, the truth is that the result will be lowered production and that ultimately the cost to the consumer will be raised either through straight cost to him or through taxation. This is definitely the responsibility of the government through the

Agricultural Products Act
side-stepping tactics of the Minister of Agriculture (Mr. Gardiner). I do not think the excuses voiced by the parliamentary assistant will make the farmers of Ontario believe other than that. At least as far back as March 31 last year, as the record will show,
I warned the government of impending danger; I did so from that time until the last day of the session on July 17, and I endeavoured to get an answer to my question from the government through the Minister of Agriculture. But I did not get it. There was no answer forthcoming and that was the situation even up until the last night, on July 17. Being a farmer myself, I would liken the attitude of the government to a situation which is, I believe, quite commonly known to Ontario farmers. It is one which I remember particularly, as a boy, namely, that of being asked to go for the cows on a day when a severe electrical storm is pending. Invariably those cows would be found in the farthest corner of the field lying there quite contentedly chewing their cuds and paying no attention whatever to the impending storm. By this time the rain is pouring down, but they are still lying there, in spite of all the prodding that is done. They are content not to be disturbed; they are quite reluctant to move and are indignant at being driven to the shelter of the barn or stable. By this time, the herder of the cows is getting a good soaking, just as the public is getting a good soaking today.
Last Thursday evening the Minister of Agriculture made a good attempt to justify the government's action on this feed grain policy; but even then he did not answer the question which was asked as far back as last March. Apparently the government has no policy; it had no policy then and it has not one today. The promise which the parliamentary assistant gave to the people of London means very little, because the three days are long since gone. But three days mean very little after waiting for eight months and suffering the uncertainty which the farmers of Canada have suffered, and after the loss of breeding stock which has already occurred far across this country. The answer to our criticism has only been given by the Prime Minister (Mr. Mackenzie King) himself in the form of a threat of a general election. I believe it was quite evident to all members of the house what our answer to that threat was. Personally, I would welcome it, and I would also welcome a visit by the Prime Minister to the town of Paris in the county of Brant for the purpose, not only of buying more dress shirts which he required
to go to the wedding in London, but to explain to the people how he proposes to extricate them from this mess that his government has got us into.
One question I have been asked by many of the farmers of my riding is this:	Even if
the price increase was announced today, will the farmers get it? Where is the 84 increase they were supposed to get for their bacon last year after the 84 increase was brought about by an increase in the British food agreement? I have here two statements with regard to hogs delivered in the city of Brantford. One is for January 17, 1947, for grade B-l carcasses and the price is given as $21.95 per hundred. The other statement is for November 17, 1947. again for grade B-l carcasses, and the price now is only $22.60 per hundred after the $4 increase. As I say, during that period there was supposed to have been a $4 increase in the price of bacon to the farmers.
Mr. GARDINER; The hon. member is quoting hogs, not bacon.
Mr. CHARLTON; It is hog carcasses.


James Garfield Gardiner: That is different from
bacon.


John Alpheus Charlton: There are no dressing
percentages off that, anyway; it is the dressed carcass.


James Garfield Gardiner: One is Wiltshire sides
and the other is hogs.


John Alpheus Charlton: There is little difference between the Wiltshire side and the dressed hog, is there not?


James Garfield Gardiner: There is quite a difference. In the one case, the head and the tail is off, among other things.


John Alpheus Charlton: There is not a difference to the extent of the difference between sixty-five cents and $4, though.
The statement that the farmer is the forgotten man is readily explained by the statement made the other day in the house by the Minister of Finance (Mr. Abbott) in an apparently unguarded moment, when he said that farmers of this country were not any more intelligent than some members of this house.


Mr. MARTIN:: He never said that. He
was speaking of the opposition.


Mr. ROSS (Souris):: He was speaking
about farmers.


Paul Joseph James Martin: He was speaking about
farmers in the opposition.


James Arthur Ross: There are some
farmers on both sides.
31S
Agricultural Products Act


John Alpheus Charlton: In any event, the statement is there on Hansard for anyone who wants to check up on it. I must say to the Minister of Finance that the farmers are at least intelligent enough to run their own business if they were not hampered by a bunch of armchair theorists who tell them what they should do, and who profess to know more about what they should do than the farmers do themselves. Regardless of how long I talk, Mr. Speaker, the government's attitude is apparently not going to change. Their attitude has been and will apparently continue to be, "We will tell you when we get good and ready to tell you."
In closing, the only thing I can say is -that the farmers of Canada want a statement from the Minister of Agriculture and they want it now. They are sick and tired of being pushed around in the dark.


James Garfield Gardiner: The hon. member
should have been down in Prince Edward Island last week. The people there are all farmers.


John Alpheus Charlton: That is the trouble,
Mr. Speaker. These statements can be made outside the house, but they cannot be made inside it where all hon. members can hear them. This selling of breeding stock is not something which occurred just recently since the increase in feed prices. The selling of breeding stock has been taking place since last spring. I warned the minister of it on that occasion, so that it cannot have been caused just from the fact that the price of feed has gone up. It has been greatly accentuated since that happened, it is true; but it cannot be blamed solely on that fact. It is purely and simply a case of the farmers not knowing what the policy of this government was or what it is going to be. The damage has been done, but further panic selling can be avoided if the minister makes his statement. On behalf of the farmers of this country, I am asking once more that the Minister of Agriculture tell them what he is going to do and that he tell them before it is too late.


William Scottie Bryce: I
should like to move the adjournment of the debate, Mr. Speaker.


William Lyon Mackenzie King: We have ten minutes yet.


Some hon. MEMBERS:: Go ahead.


Some hon. MEMBERS:: Question.


William Lyon Mackenzie King: Before this motion is put, Mr. Speaker, I should like to say a word. I was going to inform the

house tonight that the government intends tomorrow to proceed with the second reading of Bill No. 3, an act respecting emergency measures for the conservation of Canadian foreign exchange resources. It is quite true that on Wednesday of last week I said we would go on with these two resolutions until they were completed, but at the time I was speaking I had in mind what hon. gentlemen opposite had represented, that they were matters which would not likely take very long. I do not think anyone in the house dreamed we would spend three days on one resolution. If we are going to spend another three days on the next one it is quite obvious that little will be accomplished before an adjournment on Friday for the Christmas recess.
It is important, I think, that the house and the country should have full particulars in regard to the emergency measures for the conservation of Canada's foreign exchange resources, and that the minister should have an opportunity to make his statement without further delay. I would hope, therefore, that everyone would agree to this measure getting precedence over any others tomorrow. If hon. members wish to debate the matter on second reading tomorrow might be reserved for that purpose. Later we could go on with the resolution being discussed tonight. But I would remind the house that there are one or two other measures, particularly the one having to do with assistance to the gold mining industry, which the minister will wish to introduce before the house adjourns and on which hon. members doubtless will wish to have some discussion. To make sure these measures are before the house and the country before we adjourn over the Christmas season, I shall have to hold in reserve the possibility of an adjournment on Friday night. I believe we can get through by seeking to accommodate each other, but it will require some measure of accommodation.


John Bracken: May I make an observation at this time? If I interpret the Prime Minister's remarks correctly, they are to the effect that the debate in which we are now engaged will not be proceeded with tomorrow, but that in its place we shall proceed with the second reading of Bill No. 3, respecting emergency measures for the conservation of Canadian foreign exchange resources.


William Lyon Mackenzie King: That is right.


John Bracken: Then with all respect may I ask the Prime Minister whether he would be willing, provided that the Minister of Agriculture (Mr. Gardiner) is ready, to

Agricultural Products Act
have the minister make a statement on the resolution with which we are now dealing. I think the house and the Canadian people would welcome such a statement by the minister. It may be that he is not ready to make it; but, speaking for many in this house and outside, we would like that to be done if the government are willing.


William Lyon Mackenzie King: If the minister is in the position to do so, that could be done when we return to this resolution.


John Bracken: Of course it could, but we do not know when that is going to be.


William Lyon Mackenzie King: Certainly we will return to the resolution we are now debating before the house adjourns. We must get that resolution through before the year is out; otherwise the legislation to which it relates will terminate. I have no doubt the minister, if he is in a position to do so, will be glad to make a statement before the debate is concluded.


Mr. COLD  WELL@: I agree with the leader of the opposition on this; I think the country is waiting for the statement of the Minister of Agriculture.


James Garfield Gardiner: Just on the point which has been raised, and not speaking on the resolution at the moment, I do not think it is possible to make the sort of statement for which the leaders are asking. That statement cannot be made until the negotiations with Britain have gone further. I presume what is wanted is a statement that we are going to do so-and-so in regard to prices of certain commodities. That statement cannot be made until we have completed our discussions with London, and there is no way of giving a statement of that kind at this stage. It may not be possible even to give it by Friday evening; so if hon. members are just talking until that statement is given, I do not know how it can be made on that basis.


Mr. COLD  WELL@: I presume that is one reason for not proceeding with the debate on the agricultural matter.


William Lyon Mackenzie King: No. This measure respecting the conservation of Canadian foreign exchange resources is very important. It w-as one of the measures which, in our opinion, required the house to be called together before the Christmas season. I think it ought to be brought forward without further delay. That is the reason.


John Bracken: If I might ask one other question: the Prime Minister has indicated that the motion now before us will have to be dealt with finally before we adjourn this
month. I do not mean my next question to be embarrassing, and I hope it will not be; but does the government consider that Bill No. 3 should be finally dealt with before the adjournment?


William Lyon Mackenzie King: Oh, no; not finally dealt with, but certainly progress made; if possible, through second reading. The-debate can be adjourned at any time.


John Bracken: Can the Prime Minister say how much time he will allow on that before returning to the discussion of the measure now before us?


William Lyon Mackenzie King: If hon. gentlemen wish it, we might devote tomorrow to Bill No. 3 and return to the resolution respecting agricultural products on a following day.


Angus MacInnis: Did the Prime Minister say Bill No. 3 did not have to be finally dealt with before we adjourn?


William Lyon Mackenzie King: Yes.


Angus MacInnis: Then under what authority will the taxes involved in that measure be imposed?


Douglas Charles Abbott: That has nothing to do with taxes. Bill No. 3 relates simply to the import restrictions; it has nothing to do with taxes.


Agar Rodney Adamson: May I ask the Minister of Finance when the bold bill, by whatever name it may be called, will be printed and ready for distribution?


Douglas Charles Abbott: I think it may be ready tomorrow. I have given to the Clerk tonight the text of the resolution which must precede the introduction of that bill. It will appear either in Votes and Proceedings or on the order paper tomorrow, and I intended to ask, perhaps with the unanimous consent of the house, to be allowed to advance the resolution one stage by simply making the statement about the legislation having received the approval of the governor general. It should be on the order paper tomorrow.


Agar Rodney Adamson: If I understand the position correctly, it is a money bill?


Douglas Charles Abbott: That is right.


Agar Rodney Adamson: And concurrence of this house will have to be given before it can be enacted and go into operation?


Douglas Charles Abbott: It is a money bill, and of course it cannot become law until it is passed by this house and the other place. But I am not sufficiently optimistic to think we can get it through both houses between now and Friday, so that I am afraid it will have to go over until later.
Agricultural Products Act

Mr. tOW: May I ask the minister when it will be his intention to introduce the resolutions authorizing the change in the excise tax?


Douglas Charles Abbott: Those could be introduced at any time. I intend to introduce the resolutions before the house adjourns, but I have not discussed with the Prime Minister or my colleagues the matter of just what day that will be done.


Solon Earl Low: And will it be necessary for the minister to have those resolutions adopted by the house before we adjourn?


Douglas Charles Abbott: I am afraid it would not be possible. I think all we can hope for is to get all those measures before the house before we adjourn. They could be discussed briefly, perhaps, for whatever time is available, but I do want to have all those measures introduced before we adjourn, so that at any rate hon. members may study them during the recess.


Major James William Coldwell: I should like to know, then, why this is called an emergency measure for t'he conservation of Canadian foreign exchange resources. Apparently there are really only two emergency measures before us. One is the resolution we dealt- with tonight ; the other is the resolution it is suggested we should not deal with tomorrow; and those would not be matters of emergency if we had not been called in this session. Under present conditions there are only two emergency measures now before the house. While I think there is merit in what the Prime Minister just suggested, though less merit now than when he made the suggestion, in my opinion we have only the two emergency measures and otherwise we are asked to deal with matters which are not matters of emergency.


William Lyon Mackenzie King: They are emergencies in the largest sense of the word.


Some hon. MEMBERS:: Oh, oh.


William Lyon Mackenzie King: The whole situation has arisen out of the international condition. If it had not been for the international situation being what it is, these measures would, never have had to be brought forward. In the real sense they are emergency measures. The resolutions just referred to are relatively trifling things. The Minister of Finance has a
long standing obligation to speak in New York on Thursday of this week. He will not be in the house on that day.


James Arthur Ross: We have an emergency here.


William Lyon Mackenzie King: I was going to suggest that, as the first order of business tomorrow, we take the second reading of Bill No. 3, respecting emergency measures for the conservation of Canadian foreign exchange resources and then adjourn that debate after the minister has made his statement.


Some hon. MEMBER:: No.


John Bracken: We cannot accept that.


William Lyon Mackenzie King: Just a moment; hon. members have not heard what I have to say. Then if it is desired, the whole of Thursday might be devoted to the continuation of the debate on the second reading of that measure. Rather than continue the debate on the second reading tomorrow, we could have the minister make his speech and then adjourn the debate until Thursday. We would follow the second reading of this measure tomorrow with a continuation of the debate we have been having tonight.


John Bracken: I do not know what powers the Prime Minister or the government may have to determine the course of procedure in that way, but as leader of this party I must object to the Minister of Finance making his speech on this matter without any time being allowed for anybody else to speak. We object to that procedure. After the Minister of Finance speaks, there ought to be time for someone from each party to follow.


William Lyon Mackenzie King: I am perfectly agreeable to that.


John Bracken: I think the Prime Minister might have allowed two days for this debate.


William Lyon Mackenzie King: If my hon. friend would rather follow immediately after the Minister of Finance makes his speech, well and good. We can take all of tomorrow for the debate on this second reading, but we shall have to make some adjustments for Thursday.
Motion (Mr. Bryce) agreed to and debate adjourned.
It being five minutes after eleven o'clock, the house adjourned, without question put, pursuant to standing order.

Tuesday, December 16, 1947
The -house met at three o'clock.



PRIVILEGE


Walter Adam Tucker: Mr. Speaker, on a question of privilege, yesterday, at page 278 of Hansard, the hon. member for Red Deer (Mr. Shaw) when I was not in the house read something that I was alleged to have said in Montreal, as follows:
Tucker declared that the Liberals are enemies of communism and other subversive doctrines. They oppose the socialist doctrines of the C.C.F. and social credit.
I never mentioned social credit in that speech and so I certainly never said that social credit held socialist doctrines. I am sorry that the hon. member saw fit to quote from a newspaper report, did not see fit to verify it, and basing his remarks on it he then accused me of dishonesty in connection with something I never said at all.



BILL OF RIGHTS


James Lorimer Ilsley: Mr. Speaker, I beg to lay on the table copy of correspondence relating to the power of the dominion parliament to enact a bill of rights, which was asked for by the hon. member for Lake Centre (Mr. Diefenbaker) the other day.



BUSINESS OF THE- HOUSE

[Stage Direction]
On the order under government notices of motions:
That on and after Tuesday the 9th December, 1947, and every sitting day thereafter until Tuesday, the 30th December, government notices of motions and government orders shall have precedence over all other business except introduction of bills, questions by members and notices of motions for the production of papers.
William Lyon Mackenzie King: Mr. Speaker, perhaps the house would give its unanimous consent to allow this motion to be dropped from the order paper. If not, it can stand.


Some hon. MEMBERS:: Dropped.


James Horace King: Dropped.



FOREIGN EXCHANGE CONTROL


[Stage Direction]
On the orders of the day:
Mr. D. F. BROWN (Essex West):: Mr. Speaker, may I ask a question of the Minister of National Revenue? What specific instructions have been given customs officers regarding examination of Canadian citizens crossing the border before or after short visits in the United States, and have there been any instances wherein gross infractions have been uncovered as a result of action taken by customs officers?


Hon. J. J. McCANN (Minister of National Revenue):: Mr. Speaker, all persons leaving or entering Canada are subject to examination by customs officials, irrespective of the length of their stay or the frequency of their crossings. Since November 17 all customs officers have been directed to increase their vigilance and thoroughness in carrying out their duties. Varied and substantial seizures made in recent weeks indicate that extra precautions are justified in the examination of all classes of travellers, including short-term and long-term visitors. I might add that examiners have been instructed to use the utmost discretion and civility in carrying out their duties.
*	QUESTIONS



REQUEST FOR ANSWERS

[Stage Direction]
On the orders of the day:
John Bracken: Might I ask the Prime Minister if the government will give favourable consideration to having the questions on the order paper answered? They are being carried forward from day to day at what must be unnecessary expense, and I would think they could be dealt with in a short time.


William Lyon Mackenzie King: Yes, Mr. Speaker, I shall try to see that the questions are answered by Thursday or Friday next.



CRIMINAL CODE


[Stage Direction]
On the orders of the day:
Mr. H. W. TIMMINS (Parkdale):: May I direct a question to the Minister of Justice?
Inquiries oj the Ministry

Has the minister under contemplation or consideration any amendments to the criminal code to curb the multitude of sex offences which are disturbing the people of Canada?


James Lorimer Ilsley: Mr. Speaker, the only answer possible to a question such as that is that the government's policy will be made known in due course.



TRANSPORTATION FACILITIES FOR MEMBERS DURING SESSIONS

[Stage Direction]
On the orders of the day:
Lionel Chevrier: On Friday last the hon. member for Peel (Mr. Graydon) asked whether consideration would be given to providing hon. members who live at some distance from Ottawa quick transportation not at their own expense. Roth before and since the hon. gentleman asked the question, representations were made to the Department of Transport for railway facilities and the provision of extra equipment by way of transportation by rail; and I am now able to acquaint the house with measures which have already been taken, through the co-operation of the two railways, to accommodate hon. members who will be travelling some distance to their homes.
On Friday night, December 19, the Canadian Pacific Railway Company will operate in lonjunction with the Canadian National Railways a special train to Montreal and Quebec. The Canadian National will run a through sleeping car from Ottawa to London, and both the Canadian Pacific and the Canadian National will have any necessary extra sleeping cars on their transcontinental trains to the west. Trains to the east will also carry whatever extra equipment is indicated by the demands for space.


Mr. GILLIS:: Whatever is left.


Lionel Chevrier: Having regard to the
train facilities which will be available, and the fact that by leaving Ottawa on Friday night even those going as far as the Pacific coast can be home on Tuesday, I think the house will perhaps find it satisfactory that these arrangements have been made. I should add that the usual provision will be made in the estimates to cover the transportation expenses of hon. members to and from their homes, as was done in the past.


Mr. GRAYDON:: May I ask the minister
whether he has given any consideration to the question of air travel? That is what I had in mind.


Lionel Chevrier: I would think that
travel by air is not covered by this provision.



VETERANS AFFAIRS


[Stage Direction]
On the orders of the day:
Percy Ellis Wright: I should
like to direct a question to the Prime Minister. What definite action has the government taken to date to implement the promise of the Prime Minister given on pages 5736 and 5737 of Hansard of last session to give due consideration to the taking of appropriate action to relieve the position of those receiving basic disability pensions, the war veterans allowance and the allowance to veterans' widows and orphans? I mean, of course, other than allowing prices to rise and further jeopardize their position.


Mr. HARTT:: That is not a question.


William Lyon Mackenzie King: If I understand my hon.
friend's question, it relates to what consideration the government has given to the matter to which he has referred. The government has been giving the matter consideration right along.



INQUIRY AS TO SETTING UP OF SPECIAL COMMITTEE

[Stage Direction]
On the orders of the day:
Percy Ellis Wright: I should like to direct a question to the Minister of Veterans Affairs. Is it his intention to have the veterans affairs committee set up at this session, and will he have it constituted a standing committee of the house?
Right Hon. IAN A. MACKENZIE (Minister of Veterans Affairs): Mr. Speaker, that question has not yet been finally determined. Last year I did give the house the assurance that there would be a committee on veterans affairs, but my intentions at the moment, subject to the consent of my colleagues, would be that it would be a much smaller committee than the large committee of sixty-two members which we had two years ago, and that preliminary to the setting up of the committee other actions may be taken by the government that would limit the questions which the committee might have to consider.
In regard to the last question asked of the Prime Minister by my hon. friend, I can as-ire him that for the last two and a half months every day a committee of the cabinet has been sitting giving careful study to the situation. I think my hon. friend is very welt

______'________Foreign Exchange Conservation
aware of the pressure of the last ten days upon the government, and I can assure him that the question he has in mind-
Sum hon. MEMBERS: Hear, hear.


Mr. MACKENZIE:: I do not mean pressure from any Tories; I mean pressure from a conscientious sense of public duty.


Some hon. MEMBERS:: Oh, oh.


Gordon Graydon: Good old socialist!



FINANCIAL PLIGHT OF MARRIED STUDENTS

[Stage Direction]
On the orders of the day:
Harry Grenfell Archibald: I should like to direct a question to the Minister of Veterans Affairs along the same line. Has the government given consideration as well to the financial plight of married students?


Ian Alistair Mackenzie: The answer is definitely in the affirmative. For the last year or year and a half that question has been very much before the government of Canada. I myself received a delegation from the students of the University of British Columbia, who were, I may say, a very fine delegation, with reference to the question. I am sure that officials of the department have received other representations, but the question is actively under study at the present time.


Mr. FLEMING:: They will all have graduated before you take any action.



BUSINESS OF THE HOUSE

[Stage Direction]
On the orders of the day:
John Bracken: May I direct a question to the Prime Minister with respect to the procedure during the next day or two? Is the government in a position now to say how much time it proposes to allow for the debate on Bill No. 3, respecting emergency measures for the conservation of Canadian foreign exchange resources? This is the measure which will be spoken to by the Minister of Finance today. Can the government say now whether they are just allowing one day or two days or how long for the consideration of this measure at this time?


William Lyon Mackenzie King: I announced last night that today would be given over to consideration of this measure. If it is the wish of hon. gentlemen that we should continue for a day longer on this measure, the order for tomorrow will be arranged accordingly.
5849-21J



PRIVILEGE


[Stage Direction]
On the orders of the day:
Mr. JEAN-FRANCOIS POULIOT (Temis-couata): I rise to a question of privilege. I have received some letters from Social Crediters and in one of them I am called diabolical. I have answered them all by sending them, with my frank, a white sheet of paper, as white as the emblem of innocence, and I give this suggestion to my colleagues if they receive letters such as these.


[Stage Direction]
Hon. DOUGLAS ABBOTT (Minister of Finance) moved the second reading of Bill No. 3, respecting emergency measures for the conservation of Canadian foreign exchange resources.
He said: Mr. Speaker, in moving second reading of this bill, I wish to give the house a broad outline of the comprehensive program which the government has worked out to deal with our United States dollar problem, and to discuss in somewhat greater detail the special part of that program with which this bill deals, namely, the restriction of imports. The details of other parts of the program-the new excise taxes and the assistance to the gold mining industry-will be dealt with when the appropriate measures are before the house. In regard to the import restriction program, I shall leave to my colleague, the Minister of Reconstruction and Supply (Mr. Howe), the task of discussing those aspects of it with which he is primarily concerned.
I apologize to the house for the length of my statement but it has seemed to me necessary to present the facts with which the government was faced, and to state the considerations and objectives by which it was guided in seeking and in determining an appropriate policy.
Canada's Exchange and Balance of Payments Position
The necessity for vigorous action to correct our United States dollar difficulties is shown by the sharp reduction in the official holdings of gold and United States dollars this year. From the end of 1946 to the middle of November, these exchange reserves fell by almost S750 million. IV hen the program to improve our exchange position was announced, the official reserves were down to $500 million as
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compared with S1,245 million at the end of 1946 and SI,500 million at the end of 1945.
As I said in introducing the budget last spring, the government expected a very substantial reduction in our exchange reserves during the post-war transition. It was quite clear that recovery in Europe and Asia could occur only gradually and that, during the period of reconstruction, the maintenance of our exports to many overseas countries would depend in part upon the provision of credits. It was also clear that our imports from the United States would be very large. It was hoped, however, that as recovery abroad gained momentum we should receive payment for a growing proportion of our overseas exports in the form of a return flow of goods and in convertible exchange. It was also hoped that imports from the United States would gradually level off as stocks were replenished, as more goods became available from other countries and as improved production checked the sharply rising trend in world prices.
Hon. members will be familiar with the developments that have postponed the realization of these hopes-the extreme winter in western Europe with its fuel crisis and resulting poor crops, the growing political unrest in a number of countries induced in large measure by the uncooperative attitude of Russia, the breakdown in the attempt to make sterling convertible, and the spread of the "dollar" crisis to almost the entire world. Aid from the United States, large though it has been, has not been sufficient for the task. For the time being the ability of most overseas countries to pay for their purchases from us with convertible exchange or with a return flow of goods is very limited. At the same time, the level of investment and consumption here in Canada has risen beyond the most optimistic predictions and this in conjunction with the further marked rise in external prices has involved an extraordinary increase in our imports from the United States. The deficiency in our current transactions with that country, which because of other countries' difficulties had to be met to a large extent by drawing on our exchange reserves, became so large as to threaten the efficient working of our economy.
There is of course nothing new for Canada in running a deficit in her current transactions with the United States. For many years, it has been customary for this country to spend more in the United States than that country spends in Canada. Before the war the surplus in our transactions with Great Britain, western Europe and other overseas countries had for

some years been sufficient, and indeed usually more than sufficient, to meet the deficit with the United States. Since the surplus was convertible into United States dollars we were able, in addition to meeting the United States trading deficit, to achieve' a considerable reduction in our foreign indebtedness.
Canada's import requirements, especially from the United States, were greatly increased by the war. Our expanding industrial effort was heavily dependent on access to materials and components from the United States. Great Britain and our other allies were in no position to pay for our growing shipments of war supplies on a cash basis and early in the war we began to run short of United States dollars. Measures were taken to restrict the use of United States dollars to essential purposes mainly through severe import restrictions and special excise taxes. Such restrictions, however, could not have provided an adequate solution. We needed and looked for a constructive and far-reaching approach which would release our war effort from the limitations imposed by the United States dollar shortage and we found such a solution with the helpful co-operation of the United States in what was known as the Hyde Park agreement. The main point of this was to pool North American production so as to achieve the largest total of war output. In the process the United States government purchased large quantities of war supplies in this country, thus helping to overcome our United States dollar shortage and putting us in a position where we could carry out a very large war program of our own and also provide large-scale assistance to overseas allies.
As a result of these policies and arrangements we were able to pay cash for all our purchases from the United States. Some liquidation of Canadian holdings of United States investments and a substantial inflow of capital from the United States later in the war further strengthened our liquid position. The net result was that we emerged from the war with large exchange reserves amounting to no less than $1,500 million at the close of 1945.
We were thus in a favourable position to proceed with our own reconstruction program and at the same time to provide a substantial contribution to relief and reconstruction in the war-torn areas of the world. Total credits, contributions to UNRRA and other assistance were approved to the extent of $2,000 million to be expended over a period of several years. Britain and our other major customers in Europe were not able to make full payment in cash or in goods for the large quantities of food, materials and equipment which they needed from this country. From our point of

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view, we wished to sustain our exports in the transition period, particularly in view of the rapid curtailment in war expenditures. Moreover, we wanted to help our friends and customers to meet their very difficult problems of reconstruction, looking toward the rebuilding of soundly based and mutually beneficial trade.
In 1946, our balance of payments position was not far out of line with expectations. We were able to permit the use of a large amount of the credits extended to other countries without any undue reduction in our exchange reserves. Recovery abroad seemed to be making headway and the new organizations for international co-operation were coming into being. While our trading deficit with the United States was increasing substantially, our total transactions with the world still showed a favourable balance.
To give the essential figures, our position in 1946 may be summarized as follows:	we
had a favourable balance in our current transactions with the world of about 8460 million. In addition, there was a net inflow of capital, mainly from the United States, amounting to approximately $100 million. We also received a net amount of about $40 million in convertible currency as a result of certain other capital transactions. If all transactions had been on a cash basis, our exchange reserves would have increased in 1946 by the total of these three items, that is, by $600 million.
Needless to say, all these transactions were not, nor could they have been, on a cash basis. The United Kingdom and other countries utilized a total of $750 million out of the credits which had been authorized to them. In addition, through UNRRA and mutual aid we gave away exports to the value of $110 million. There were therefore exports of $860 million which did not produce foreign exchange in 1946. So instead of adding $600 million to our exchange reserves, there was a reduction of about $260 million, the official holdings falling to $1,245 million at the end of the year.
We could have faced reductions of this magnitude in our exchange reserves without undue concern for two or three years, provided of course that there was a gradual and sustained recovery in Europe and elsewhere. During the present year, however, the situation became steadily more unfavourable. On the one hand, we found it necessary to aid our overseas customers by permitting them to make large further drawings on their credits. On the other, our imports increased very rapidly, to such an extent that the surplus in our total current- transactions with all countries disappeared. Whereas in 1946 we were shipping substantially more goods and
services out of the country than we were bringing in, in 1947 our purchases were as large as our shipments.
The picture for 1947, that is, for the ten and a half months up to the middle of November, was approximately as follows:	Our
current transactions with the rest of the world were pretty well in balance-actually the tentative estimate puts imports and other current payments at a figure about $15 million in excess of exports and other current receipts. However, there were also capital payments mainly of an unusual or non-recurring nature of $220 million which consisted of our gold contribution to the international monetary fund of $75 million and of a net retirement of Canadian debt in the United States of 3145 million. Thus if all our transactions with other countries had been on a cash basis our exchange reserves would have decreased by about $235 million-the sum of the net capital movements I have mentioned and the very small deficit in our current accounts.
But part of our exports were financed on credit, though not as much as in 1946, since some countries had already used up most of their credits and since Canada was not in a position to allow as rapid a use of the remaining credits. The net credits utilized during the ten and a half months up to the middle of November were approximately $480 million and in addition we gave away, through UNRRA. exports to the value of about $35 million. Thus our current transactions with the world, though approximately in balance, resulted in a drain on our exchange reserves of about $515 million. When you add to this the decrease of $235 million which would have occurred if all our trade had been on a cash basis, you have the approximate measure of the loss of reserves since the beginning of the year, which left them in the middle of November at approximately $500 million.
Another way of presenting the developments of this year is to start with our United States dollar deficit. During the ten and a half months up to the middle of November the deficiency in our current transactions with the United States was approximately 81,100 million. From the countries to which we were extending credits we received cash payments for part of our heavy surplus of exports to them and we also had a small current surplus with other dollar countries than the United States. These cash payments reduced our over-all dollar deficit on current account to around $530 million, to which should be added the capital movement mentioned above of $220 million in order to obtain the loss in our
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exchange reserves this year. It must be recognized that the balance of payments estimates which I have given for ten and a half months are necessarily very approximate, but I believe they give a reasonable picture of the nature of the changes.
The High Level of Imports from the United States
In the ten months up to October, Canada's mports from the United States have been running at the rate of nearly $2,000 million per annum, an increase of almost fifty per cent as compared with 1946 and four times as much as just before the war. In October, they reached the highest monthly figure on record, $190 million.
There' are several reasons why our imports from the United States have risen to such heights.
The marked increase in United States prices has of course been an important factor in swelling the dollar value of imports. Wholesale prices in the United States during the first ten months of this year averaged twenty-eight per cent higher than in the like period of 1946 and were eighty-six per cent over the pr.e-war average. But the really significant point is that the actual quantity of imports continued to rise substantially in 1947, despite the notable increase in United States prices and despite the fact that the Canadian price level was relatively lower than that of the United States.
The reasons for the much increased purchase of United States goods are to be found in the high level of production and income in Canada and in the accumulated needs and requirements of industry and consumers alike. The great program of capital expansion and improvement born of requirements long deferred by depression and war, and nourished by high demand and by developing opportunities, added heavily to our imports of machinery and equipment, of parts for incorporation into Canadian-made capital goods, and of steel and other materials. Judging by a tentative estimate by the Department of Recoustruction and Supply, investment in plant, equipment and housing this year will run to about $1,800 million compared with $1,240 million in 1946 and a pre-war figure of less than a third as much. As an illustration of the effects of high capital expenditures on our imports, our purchases of machinery from the United States at around $300 million in the first nine months of this year were sixty-eight per cent higher than in the like period of 1946 and nearly six times the corresponding 1939 value. Our imports of primary iron and

steel at $81 million were up fifty-nine per cent over the previous year and were about five times pre-war.
High consumer purchases have also contributed substantially to raising our imports from the United States. Long deferred demand for such things as automobiles backed by accumulated wartime savings has made itself strikingly apparent. Imports of finished passenger automobiles from that country, for example, amounted to $37 million in the nine months up to September, more than three times the amount in the corresponding period of 1946. Moreover, sharply rising domestic production of automobiles and household appliances has involved heavy imports of parts and materials. High expenditures on less durable goods are also clearly reflected in our dollar imports. For example, our purchases of cotton goods (not including raw cotton or cotton yarns) from the United States were $75 million up to the end of September this year, as compared with $37 million a year earlier and less than $5 million in the corresponding period of 1939. More and more citrus fruits, out of season vegetables, as well as a variety of luxury and semi luxury goods have been flowing into this country and there seemed to be no end to the increase.
The large volume of our exports has also contributed to raising our imports from the United States. This is notably the case in respect of exports of such goods as automobiles and electrical goods where there is frequently a substantial United States content in Canadian production.
John Bracken: Would the minister permit me to ask a question?


Douglas Charles Abbott: Yes, certainly.


John Bracken: Will the minister's statement give us the figures showing the imports from the United States month by month during the last year?


Douglas Charles Abbott: I had not included those figures in this statement. They are of course readily available. Perhaps they might be made available to the house during the committee stage.


John Bracken: May I ask the minister to see that we have those figures as soon as he can provide them?


Douglas Charles Abbott: Yes. I think they could probably be made available from the bureau of statistics. I will see that those figures are made available to the house before we conclude the committee stage. To continue my statement: Normally, this would not produce

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any exchange difficulty, but today when the bulk of such exports are going to countries which find it difficult or impracticable to settle in convertible exchange it is a factor that cannot be ignored.
Finally, replenishment of business inventories has swelled imports of many articles and materials. Inventories of most of the goods which we normally obtain from the United States were very low and in some cases non-existent at the end of war. This year, however, there has been a considerable increase in such stocks toward more usual levels.
Even if Europe and Asia had experienced a full recovery from the effects of the war, the bulk of the great expansion in our imports would have come from the United States. Actually, most of the countries outside of this hemisphere had not been able to re-establish a satisfactory volume of exports and we therefore had to rely even more than usual on United States sources of supply. In the first ten months of this year seventy-seven per cent of our total imports came from the United States, whereas in the five years prior to the war the proportion was sixty-one per cent.
This analysis of the reasons for our extremely high imports from the United States indicates that there are certain temporary elements in the increase. Overseas countries will in time be able to ship us more and we shall return to usual sources of supply for goods which we can now only obtain in quantity from the United States. Great Britain, for example, has every intention of increasing her sales to us to the greatest possible degree. There is also, as I have noted, a considerable element of inventory replenishment by business and restocking by consumers in the present import totals, and this of course will not continue indefinitely. Moreover, the great program of capital expansion now under way reflects to a substantial degree deferred needs for replacement and improvement and as progress is made in catching up with this backlog of demand, the rate of capital investment and its associated requirements for imports can be expected to decline. In addition, the prices of some imports from the United States have risen to an exceptional degree in relation to other prices and as world production expands some reduction may be expected in their cost.
However, even when due allowance is made for the temporary factors which have been swelling our imports from the United States, it is not possible to escape the conclusion that our propensity to import from that country is very great. Under conditions of high employment, it is natural to expect a continued heavy flow of imports from the United
States. In 1929, the most active pre-war year, imports from that country were nearly as large as they are today in relation to our national income and production. High employment, rising consumption, and heavy investment in physical capital inevitably produce a great demand for the sort of goods that the United States can most readily supply, in addition to the essential fuels and materials which we require at all times. The use of the same methods of production, the close trading and financial connections, the ready access to United States materials and techniques are among the factors which produce this result. The similarity in habits of consumption, supported by continuous contacts between Canadians and Americans, work in the same direction. Most important of all is our proximity to the greatest concentration of industry and natural wealth in the world today.
The Question of Convertibility
-If Canada could rely on soon being able to convert into dollars a large surplus in her trade with Britain and other European and sterling countries, our dollar problem might still be regarded as purely temporary. The facts of the present position, however, suggest that it would not be wise to depend too heavily on converting overseas surpluses to meet our United States deficit.
In saying this, I am not taking a pessimistic view of the outlook for European recovery. I am confident that Britain will surmount her great present difficulties. I also believe that there are good reasons for expecting substantial further recovery in other western European countries. At the same time, we cannot ignore the fact that western Europe is not as favourably situated as before the war. It has suffered very heavy economic losses both in the form of destruction and dislocation and in the liquidation of foreign investments. It will be years before a full recovery has been achieved. The plans drawn up at Paris do not envisage that the pre-war standard of living will be fully regained even in 1951. For some time western Europe's purchases from this continent will be restricted and, even when the special trade restrictions which prevail today are removed, the ability of this region to purchase from us will have its limitations. We must therefore guard against optimistic assumptions as to the size of the convertible trade surplus which we may have with western Europe in future, and we should not forget that there have been occasions in the past when our dependence on converting an overseas surplus to pay a United States trading deficit has caused us considerable difficulty.
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The Basis of Government Policy
These were the facts and considerations which the government had before it. They indicate that we have an urgent and serious United States dollar problem. They suggest that it is in part temporary and in part of a more lasting nature.
In determining a policy, the government had the following considerations and objectives before it:
1.	The measures taken had to be sufficient to bring our United States dollar problem under control. At the recent rate of depletion, our remaining exchange reserves could have lasted for only a limited period and their disappearance would have clearly involved extreme difficulty and drastic restrictions. A country, like a business, without liquid resources is in a highly vulnerable position no matter how favourable the other items in its balance sheet may be. Its freedom of action, its trading position, and its very welfare would be gravely prejudiced. The program had to be big enough and broad enough to do the job even if that involved the use of restrictive measures.
2.	It was essential to find a lasting solution to the United States dollar problem through a constructive approach designed to increase -and to re-direct our trade and production. Canada's interest lies in freer and expanding trade and our approach to the problem has been one of constructive co-operation with other countries. We have demonstrated our intentions in this respect by our contribution in establishing the new machinery of international order and by our policy of assisting war-torn countries in reconstruction. We do not wish to use restrictive measures to any greater extent or for any longer time than can be avoided, and we do not believe that any satisfactory and lasting solution to our problems, and indeed to the problems of others, can be found within the limitations of a restrictive approach. In working out constructive and expansive measures, it is essential for us to enlist the fullest co-operation of the United States with the dual aim of achieving a better balance in our mutual trading relationships and of making the fullest practicable contribution to world recovery.
3.	It is much in Canada's interests to assist and facilitate recovery in western Europe. Given economic recovery, this region can provide markets for certain basic Canadian products which it would be difficult to sell elsewhere on a permanent basis. More than that, our freedom of action as a trading nation depends in large measure on the recovery of Britain and the other European democracies.
I say this in no spirit of criticism of our good
[Mr. Abbott. 1	'
neighbours to the south, for there are no two peoples that get along better and trust and understand each other so well as Canadians and Americans. But it is none the less a fact that Canadians value their independence, and I believe that' our American friends respect us the more for it.
4.	The measures to correct our exchange difficulties should be designed-with a view to minimizing dislocation to our economy. Restrictions which would affect our basic production should be avoided and every effort should be made to apply the required measures in a manner that will not create unemployment. The government is also conscious of the necessity of avoiding measures that would raise prices and costs indiscriminately. While some price increases are unavoidable, or even necessary to check the demand for imports from the United States, it is clearly undesirable to add any more to inflationary tendencies than can be helped. It is most desirable to interfere with individual initiative as little as possible.
The emphasis of the program is on constructive measures which we hope and believe will bring about a solution to our United States dollar difficulties in the reasonably near future, and bring it about in a manner that will enable us to maintain a high standard of living and a high degree of freedom in our economic life. We cannot, however, expect to achieve a sufficient expansion and readjustment in our production and trade to correct overnight a United States dollar deficiency of the present magnitude. The constructive side of the program must, therefore be supplemented by restrictive measures. We are in a serious situation and we must make some prompt adjustments in our consumption and in our investment programs.
The restrictions will save substantial amounts of United States dollars. While it is difficult to make precise estimates, the prohibitions and quotas if they had been in effect during the twelve months ended June, 1947. would have excluded imports from United States dollar countries to the value of something like $300 million. The travel restrictions would have reduced our United States dollar expenditures by from $30 to $40 million. A substantial saving will result from the control of imports of capital goods but it is hard to say how much and in this case the saving will increase as arrangements are worked cut in particular industries, and as capital expansion plans are reviewed. As time goes on, the constructive measures will steadily bring about a better balance in our United States dollar transactions, and

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meanwhile as an extra margin of safety we have at our disposal a United States credit of $300 million.
The Longer-Range Constructive Policy
I have heard it suggested that the constructive part of the program lacks content, that it is too general and too vague. That is a mistaken view. There is nothing vague about the reductions in the United States tariff which resulted from the negotiations at Geneva. And if the statement that the governments of Canada and the United States are consulting on measures designed to achieve the maximum degree of economic co-operation between the two countries is a general one, let me assure the house that it is far more than a mere statement of good intentions. If the United States congress decides to authorize the use of Marshall plan funds in making purchases outside the United States, as we hope and expect it will, that will be a decision of great importance to Canada. It is true that the program to develop and re-direct our resources and industry in a manner that will permanently reduce the undue lack of balance in our trade with the United States is just beginning. But as the Minister of Reconstruction will confirm it is a serious program which the government will pursue with determination and vigour.
Referring for a moment to the Geneva trade agreements which are now before the house, I would direct particular attention to the reduction in the United States tariff as it affects this country. Substantially better terms of entry have been accorded to farm products, lumber and wood products, and base metals, to mention some of the more important categories. Note should be taken of the fact that tariffs have been reduced on articles processed from our primary production as well as on the primary products themselves. This enlarges the opportunities for further development of fabrication and processing of our primary output and for increasing the proportion of our exports to the United States in the more valuable processed and manufactured forms.
Important as these new tariff reductions are, the government believes that steps should be taken to reduce further trade barriers and to promote closer and more advantageous economic co-operation between the two countries. It is the desire of the government to reach a further trade agreement with the United States. This proposal has been made informally to United States officials who are studying this and other methods of promoting mutually beneficial economic co-operation. The government has been investigating the possibilities of shipping additional supplies to the United
States and there is a good deal that can be done in the near future. While it will take time to increase to desired levels our production of the sort of goods which have a ready market in the United States, output of some such commodities is still expanding and new capacity is coming into operation. Considerable further expansion in our United States dollar exports can be achieved by diverting exports away from other countries and by reducing Canadian consumption. Action along these lines is necessary and practicable to a substantial extent. It is expected that deferment of some capital projects and reduced consumption of some goods in this country will make available larger supplies for export. It is well to remember that expansion projects and production of durable goods involve the use of large quantities of Canadian-produced goods, such as base metals and wood, which might otherwise be exported, as well as the use of very substantial imports.
So far as diverting exports to the United States is concerned, the exchange difficulties of Britain and other countries have led them to restrict their imports from Canada with increasing severity and to confine their purchases to only the most essential items. Fortunately, there is a market in the United States for many of the exports which are being restricted by these countries and to that extent diversion will take place rapidly. Canada naturally does not wish to divert supplies which are urgently needed overseas.
The extent to which we can continue to assist Britain and other countries will depend in large measure on the implementation of the Marshall plan. The prospects for the approval of this plan by the United States congress are, I believe, encouraging. Such a constructive and imaginative step by the United States could make the difference between a healthy world recovery and the indefinite continuance of economic dislocation and distress over much of the world.
The form in which the Marshall plan is implemented is also very important to us. We have pointed out to the United States how our difficulties in buying from that country arise very largely from our inability to sell to Europe for cash, and we have expressed our concern that dollars made available by congress for aid to Europe will be used in part to purchase supplies in Canada and elsewhere that are not readily available in the United States. The United States government has recommended to congress that it should authorize the use of funds voted for aid to Europe in making purchases outside the United States, and this principle has alieady been accepted by the United
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States senate in regard to the interim aid program. We expect that this policy will be implemented in regard to Marshall plan funds and if it is, we shall be better able to continue our own program of aid to Europe. If it is not, we shall have no alternative but to divert further exports from overseas to the United States.
It will be appreciated that our ability to contribute to world recovery depends very largely on overcoming our exchange difficulties in a manner that will not restrict our total production. A greater integration of the efforts of the United States and Canada to assist world recovery would add considerably to the capacity of this continent to provide urgently needed assistance just as it did during the war. We are making every effort to achieve the needed integration and we have encountered a most co-operative and helpful reception in our discussions with the United States government.
I do not propose to deal at length with that part of the policy which is the particular responsibility of the Minister of Reconstruction, since he will shortly be outlining his plans to the house. The aim is to achieve a better balance in branch plant operations, to encourage expansion of production for export to dollar markets, and to facilitate the development of production and resources in a manner that will ease our United States dollar deficiency. The government has no intention of embarking on a program of building up uneconomic production in this country. It is convinced, however, that there are great possibilities for expanding and re-directing our production in an efficient manner so as to improve permanently our exchange position.
The government will endeavour to centre the attention of industry on this question and in some cases it may be necessary to take specific action to facilitate the kind of readjustment and increases in production which are required. We expect that Canadian industry will realize its interest in and responsibility for the success of this program and there has already been an encouraging response. We want to maintain and expand our industrial structure, but we must find methods of doing so which will not involve the present-excessive drain of United States dollars.
In the statement which I made to the house on December 11, I have already explained the government's plans for assistance to gold mining. I need not repeat them now.

The Import Restriction Program
I now come to an explanation of the import restrictions covered by the bill. As the Prime Minister (Mr.	Mackenzie	King)	has
emphasized, the	government believed it
unwise to impose any such restrictions before the Geneva agreements were concluded. At the same time, we could not postpone action until early in the new year when the new session of parliament would normally have met. Parliament was therefore called at the earliest practicable date. As we feared it might, the calling of an early session was widely interpreted as an indication that imports were to be restricted. The rush to buy goods in the United States which had already assumed large proportions was aggravated. The government had therefore to watch an accelerated additional loss of United States dollars which could be ill afforded or to find some means by which the special measures could be put into effect before the program could be placed before parliament. As I said in announcing the program, the government had not believed that powers to restrict imports were contained in the Foreign Exchange Control Act, but was advised by the law officers of the crown that the act did provide a legal basis for such action. In view of the dangerously mounting losses of United States dollars, the government decided that the right course was to use these powers until parliament had the opportunity to pass special legislation. Hon. members will appreciate that, even if the program had been delayed until parliament met, it would have been necessary to introduce the import restrictions in the same way. By that I mean that they would have had to go into effect immediately on their announcement to avoid widespread evasion, windfall profits, and a heavy further increase in United States dollar expenditures.
It has been suggested in some quarters that in connection with this matter certain bureaucrats decided they needed power and believed that if they could twist certain sections of the Foreign Exchange Control Act they could obtain that power. Certain senior civil servants have been mentioned by name, and it has been suggested that they should be brought before a committee of parliament to give evidence as to the advice they gave and as to whether they did advise that the Foreign Exchange Control Act should be used for that purpose. That suggestion was made in the house. I was not in the house at the time, but let me say this, that so far as the reference to the so-called bureaucrats deciding that they needed extra power is concerned

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and that if they could twist the provisions of the Foreign Exchange Control Act they could obtain that power, that is nonsense and completely without foundation. So far as the use of the Foreign Exchange Control Act is concerned, the government takes the entire responsibility and I as Minister of Finance must take the largest share of responsibility in that connection.
When I came to the conclusion that import restrictions were inevitable I at once gave personal consideration as to how they could be brought into effect. I consulted the law officers of the crown, the deputy minister of justice, and I was advised that under the Foreign Exchange Control Act the governor in council had power to designate the currencies which could be used for imports and that that act was available for the purpose of imposing such restrictions. As I said a moment ago, it was never believed that the act contained those powers, and certainly the foreign exchange control board never had those powers and never wanted to have them.
I wish to add but one remark. I deprecate more than I can say this practice of suggesting that permanent civil servants should be brought before a committee of the house to state the advice they have given, to the government, because that strikes at the very foundation of the British parliamentary system of responsible government. The policy which the government announces is the government's policy and it must stand or fall by that policy. It takes its advice from the permanent civil servants and in some cases accepts that advice and in others rejects it, for reasons. The government itself must take the decision. But to suggest that permanent civil servants should be subject to questioning as to what advice they have given the government would, if followed, be completely destructive of our parliamentary system of responsible government. I know of no case in which any such suggestion has been made before this one to which I am referring. It has never been made in the British House of Commons. To my knowledge it has never been made before here and I hope this is the last time it will be made.
One of the strengths of any British parliamentary government is the permanent civil service which goes on from government to government. The government may change but the permanent civil service is always there, ready to advise and carry on the functions of government. If we are going to expose the permanent civil service to personal attack and innuendoes and call them to account for 5849-221
the advice they have given to their political superiors, I say that we shall not be able to get any sort of first-class men in our civil service.
Some concern has been expressed as to the severity of the specific restrictions which were imposed. In the spheres where it was feasible to impose specific restrictions, they are admittedly quite severe. They had to be, if we were to save any substantial amount of United States dollars. The point is that a large proportion of our imports cannot be much restricted without very serious effects on our economic life. We cannot readily cut our imports of fuel or raw materials; coal, oil, cotton and iron ore, for example, are basic necessities in our economy. Nor could we suddenly cut down the import of many components and parts without most serious effects on a variety of major industries. In regard to capital goods, some are urgently needed to expand our production and while a considerable reduction in such imports is practicable, it is largely a question of screening these imports in terms of the uses to which they will be put. More than three-quarters of our total imports from the United States are comprised of fuels, raw materials, components and parts and capital goods. This means that the direct restrictions had to be concentrated primarily on finished goods, mostly of a type used by consumers.
In working out the prohibitions and quotas we could not consult with industry nor could we carry out exhaustive inquiries with respect to each item. Absolute secrecy was essential. We were also under the necessity of specifying the restrictions in terms of tariff items since the tariff classification is the machinery with which our customs officers are familiar and can work effectively. This created some difficulty in getting suitable definitions and specifications. We recognized that an ironing-out job would have to be done as soon as the restrictions were announced. As a result of representations received and more detailed information acquired since the announcement, appropriate adjustments and improvements have been made in the original schedules.
There is one further general point about the restrictions that I wish to emphasize. It is that we have imposed them in a manner broadly consistent with the principle of nondiscrimination. That is to say, the same restrictions calculated on the same basis have generally been applied to all countries. When the import of an article has been prohibited, the prohibition applies to all countries. Similarly, the import quotas are based on
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pre-war trade and are applied in the same manner to the two groups of countries which have been listed. This principle of nondiscrimination has caused some confusion and misunderstanding. Why, we have been asked, when it is generally desirable to increase our imports from Great Britain do you prohibit the import of any goods from that country? Why, when the whole program of restrictions is frankly designed to save United States dollars do you not confine them entirely to dollar countries? There is a very strong reason for applying this non-discriminatory principle. It checks the possible abuse of restrictive practices in that it does not permit the country concerned to treat the import of a particular product in differing ways for different countries. It is a sound principle of international trade which it is most important to us to have generally accepted and which is included in the draft charter for the international trade organization. It is a principle which our neighbours in the United States also regard as very important. The restrictive program is of course designed to cut our imports from that country and is anything but welcome to many of- their exporters. The longer-term constructive program depends greatly on co-operation with the United States. Knowing their views and subscribing to the same principle ourselves, it was only reasonable that we should make a special effort to avoid direct discriminatory practices.
I have heard it suggested that because of their non-discriminatory character the restrictions are likely to have serious effects on our imports from certain non-dollar countries. This is a quite mistaken view. The prohibitions affect only a very minor portion of these imports and the quota restrictions leave wide latitude for expansion of imports subject to quota from the non-scheduled countries, which include Great Britain, France and Australia, among others. Indeed, because of the incentive which the quota system provides to importers to increase their purchases from non-scheduled countries, it is likely that the restrictive program will on balance tend to enlarge our imports from such sources.
The Import Prohibitions
The prohibited list-schedule I of the bill-covers a wide variety of consumer goods and certain other articles which the government has decided can no longer be permitted to draw on Canada's reserves of foreign exchange. The list includes a number of items of a luxury or non-essential character. It also includes a good many things which are important in themselves but which are pro-

duced in Canada in substantial quantities and which are frequently of such a nature that their purchase may be postponed.
All the items on the list have been selected with a view to saving United States dollar exchange; in other words they are goods which are imported entirely or largely from the United States. Since the principle of nondiscrimination involved application of the prohibitions to all countries, the list naturally does not include items which are of considerable importance to countries to which we have been extending credits. Thus there are no restrictions on the import of some luxury goods, as for example, sterling silverware and certain classes of perfumes.
There are a large number of non-essential and luxury items on the prohibited list. These include such things as cut flowers, some fancy foods, novelties, comic and "pulp" periodicals, pleasure boats, fur coats, jewelry, paintings, and various amusement devices.
The greater part of the list, however, is comprised of items that could not be described as luxuries. These are largely goods which are produced in substantial quantities in Canada or for which adequate Canadian substitutes are available. In respect of foods, for example, the import of meat, poultry and eggs is prohibited. Imports of fresh fruits, except citrus fruits, bananas, and apples, of fresh vegetables, except potatoes and onions, and of dried fruits, except pitted dates, figs, prunes and raisins, are no longer permitted. Hon. members will note that the exceptions are very important. The prohibitions mean, however, that we shall have to go without the usual supplies of out of season vegetables and put up with a less varied but still adequate vegetable diet. The fact is that we cannot now afford to spend scarce United States dollars on these additional amenities. Cigars, cigarettes, toilet soaps, and cosmetics are also prohibited because we produce a sufficient supply of these things in Canada.
The prohibitions also extend to most household electrical appliances, including refrigerators, washing machines, stoves, sewing machines and toasters. Canadian production of these articles is large and has been increasing sharply. For example, our production of domestic electrical refrigerators was more than three times as great as our imports in the twelve months ended in June of this year. Our output of electric washing machines at 133,000 was four times our imports, and in the case of stoves the domestic production accounted for 95 per cent or more of the total supply. The ban on imports of radios would

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have kept out less than 50,000 sets in the twelve months ending in June when our domestic production was 720,000 sets.
The other significant items on the prohibited list include a number of paper products, furniture, certain building materials and household supplies, passenger automobile tires, cameras, typewriters and certain other business machines. In most of these cases there is a large Canadian production. Imports of automobiles have been temporarily banned, but a restrictive quota is being worked out and its detailed provisions will be announced as soon as possible.
There have been some cases of hardship resulting from the suddenness with which the prohibitions came into effect. Hon. members may recollect that the prohibitions applied to all goods which were not actually in transit at the time of the announcement. We simply could not afford to permit all goods on order to enter the country, and the difficulties of defining "goods on order" as well as the fact that some purchasers had been over-ordering made this standard an unsatisfactory one in any case. In a few extreme cases special permits have been issued; for example, where goods have been completed and ready to ship which were made to the particular specifications of the buyer and which were not resaleable in the country of origin.
The Quota Restrictions
There are other types of imports which, though significant and desirable, had grown to excessive proportions in relation to our capacity to pay out hard currency. We wanted and in many cases needed to bring in these imported goods but we could not afford to pay United States dollars for the very large quantities of them that were coming into the country. A disproportionate quantity of these imports was coming from the United States as compared with pre-war conditions.
The method adopted to meet this problem was to set quotas based on the pre-war pattern of trade and to divide the quotas into two parts, one being applicable to imports from certain countries which we must pay in United States dollars and which do not appear to be suffering from a serious shortage of dollars, and the other being applicable to imports from all other countries. Our problem is one of reducing United States dollar outlays rather than of restricting our imports generally. We have been purchasing goods now subject to these quotas from the United States, the principal country in the first or scheduled group, on a scale many times in excess of pre-war. At the same time the value of our purchases from the
second group described as the non-scheduled countries is not greatly above the pre-war level. We can afford to increase our imports from these non-scheduled countries, which include Britain, the British dominions and the western European countries among others, and we do not wish to add to their problems by seriously restricting their sales to us.
The imports subject to quota are listed in schedule II of the bill and are classified into five quota groups. A description of each of these quota groups will give a much better idea of what the system is and how it works than any explanation in general terms. The first group includes the following fruits and vegetables: oranges, grapefruit, lemons, limes, fruit juices, apples, potatoes and onions. As I noted earlier most other fruits and vegetables are on the prohibited list except for bananas, raisins, figs, prunes and pitted dates, which are left unrestricted. Imports of the fruits and vegetables listed in this group amounted to $10 million per year for scheduled countries and $11 million for non-scheduled countries in the pre-war period of 1937-39. The quota which has been set for this group is 200 per cent of pre-war which means that about $20 million of these goods can be imported from scheduled countries in the next twelve months, and about S2i million from non-scheduled countries. During the twelve months ended June 30, 1947, such imports from scheduled countries were not far from $40 million while those from non-scheduled countries were less than $700,000. This means that such imports from the United States and other scheduled countries will be cut to about 50 per cent of the actual imports in the twelve months ended last June. On the other hand, imports from non-scheduled countries could be increased three and a half times without exceeding the quota.
Any individual importer shares in the group quota in accordance with his share of the trade during the twelve months from July, 1946, to June, 1947 inclusive. In other words. ' an importer simply reports to the government the total of his actual imports of the goods in the particular quota group from the scheduled countries for this period' and his permitted imports for the next twelve months are calculated' by applying the appropriate percentage.
'Mr. GREEN: What about new businesses?


Douglas Charles Abbott: Provision is made for that, and particularly for veterans. There is a gap left in the total quota to allow quotas for new businesses, particularly those which have been established by veterans who have no quota basis. The base period, as my hon.
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friend will appreciate, is 1946-47, ending June, 1947, so that we believe that most of the veterans will have been established in that period.
In the case of the fruit and vegetable quota, this percentage, as noted above, is 50 per cent of the actual imports from scheduled countries in the twelve months ended June 1947. For the time being, open permits are being issued for imports from non-scheduled countries since actual imports are so far below the amounts permitted under the quota system. The annual quotas will normally be administered on a quarterly basis.
The quota on fruits and vegetables will mean some reduction in our imports of citrus fruits. I am advised, however, that prices for oranges in the United States are considerably below those prevailing a year ago and the total quantity that may ;be imported with half last year's dollar expenditure is likely to be very much more than half last year's physical volume, and certainly more than before the war.
The second, and! largest quota group, relates to textiles. It includes almost all textile products advanced beyond the yarn stage -fabrics, knitted goods, clothing and other finished goods. It does not include textile fibres and yarns on which no restrictions have been placed. Because of the shift in sources of supply, our heavy dependence on imports of cotton goods, and the much increased level of textile prices, it was necessary to set the quota at 400 per cent of prewar. Even at this figure the quota system will sharply restrict imports from scheduled countries though it will give wide latitude for increasing our purchases from non-scheduled countries.
In the pre-war period, imports from scheduled countries of the textile products now subject to quota averaged only about $10 million. However, during the twelve months ended June, 1947, imports from these same countries were nearly $130 million. With the total quota at $40 million, that is 400 per cent of pre-war, this means that importers are now only permitted to purchase up to 32 per cent of the amounts which they imported from scheduled countries in the period from July, 1946, to June, 1947.
The position in regard to non-scheduled countries is almost the complete reverse. In the pre-war period, imports of the textiles now under this quota from Britain and the other non-scheduled countries amounted to $30 million. The quota is thus $120 million. Actual imports during the twelve months ended June, 1947 were only $52 million and

the result is that we could more than double our purchases from non-scheduled countries before reaching the quota limit.
Since most of our imports of woollen goods come from the United Kingdom and since we have a large and generally adequate rayon production of our own, hon. members will appreciate that the main effects of this textile quota will be felt in the sphere of cotton goods. There will be a sharp reduction in our purchases of cotton fabrics from the United States and we hope a substantial and continuing increase in our purchases from Great Britain. In 1946 we imported more than 200 million yards of broad-woven cotton fabrics from the United States and only 5 million yards from the United Kingdom. This is a complete reversal of the pre-war trade pattern, when our average imports from the United States were less than 25,000.000 yards and those from the United Kingdom were
70,000,000 yards. Since the quota from scheduled countries is only 32 per cent of the recent rate of import, our imports of cotton fabrics from the United States are likely to be reduced by from 125,000,000 to 150,000.000 yards during the next twelve months.
The adequacy of the total supply of cotton fabrics will therefore depend on obtaining much larger supplies from the United Kingdom and to a lesser degree on increasing our domestic production. From the discussions we have had recently with British government officials, we are confident that a pronounced increase in imports from that source can be expected. If actual shipments approach expectations, our total supply of cotton fabrics will be quite sufficient for our needs. Taking our estimated domestic production, the much expanded imports from the United Kingdom which we expect, and the sharply reduced imports from the United States, our total supply in 1948 should work out to somewhere in the neighbourhood of 450,000,000 yards. This is somewhat less than the very high figure of 1946-about 490 million yards-but much more than our average pre-war supply which was around 350,000,000 yards. While there will be difficulties in this readjustment of sources of supply and while the total supply will be somewhat less plentiful than in the last year or two, the Canadian people are still going to have a sufficient supply of cotton goods.
The third quota group includes leather, footwear, gloves and mitts, leather garments, luggage and purses. The quota is 200 per cent of pre-war and as in the other quotas this restricts imports from scheduled countries and leaves considerable room for expansion

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in regard to non-scheduled countries. The quota works out to slightly less than $7 million for scheduled countries which is 70 per cent of the actual imports in the twelve months ended June, 1947.
The fourth quota group includes clocks and watches, cutlery, sporting goods, toys, smokers' supplies and certain types of glassware. The quota in this case also is 200 per cent and this involves a cut of nearly 60 per cent in the recent rate of imports from scheduled countries.
A fifth quota group to come into effect on January 1 was announced on December 12. It includes a wide range of prepared foods of a kind for which the United Kingdom, Australia and France were normally our principal suppliers. Included in this new group are such items as pickles and sauces, meat and fish pastes, cheese, pickled and preserved fruits, canned fruits and chocolate and confectionery products. The national quota will be 200 per cent of pre-war and the individual importer's quota from scheduled countries will be 28 per cent of his imports during the twelve months ending June 30, 1947.
As administrative experience is gained it may be possible to develop further quota categories in order to meet the special problems of some of our importers and some of our supplying countries. There are, however, narrow limits to such further adjustments, at least until our basic dollar position has substantially improved.
It will be observed that the whole quota system has been made as flexible as possible. Importers are not tied down to particular items or particular countries but are permitted to use their quotas to purchase any goods in a given quota category from any of the countries in the applicable schedule. The government believed it desirable to permit freedom of action to the largest feasible degree and wished to avoid undue administrative complications which might have retarded the efficient working of the system.
Import Controls on Capital Goods
As I mentioned earlier, prohibitions and quota restrictions are applicable only to a limited portion of our total imports. These methods would not be suitable to check the heavy flow of imports of capital equipment, and materials and parts for use in construction and in the manufacture of durable goods. The significance of such imports' depends mainly on the use to which they are put. The same imported material or machine may be highly essential when used for one purpose and much less essential when used for another.
The control of such imports must therefore be flexible and related to the use of the imports concerned.
The system adopted therefore is to make imports of the kinds of capital goods, components and materials listed in schedule III of the bill subject to control, and the Minister of Reconstruction and Supply has been charged with the administration of this phase of the program. He will be in a position to review with industry proposed expenditures involving the import of such goods with the aim of reducing the drain on our dollar resources. Industries with capital expansion programs should check their import requirements with him and where feasible postpone such projects, as a number of firms have already done. This control also involves examination of methods to reduce the net dollar deficiency resulting from many of our industrial operations. Hon. members will appreciate that it is closely related to the plans for developing and re-directing Canadian production which are also the particular responsibility of the Minister of Reconstruction and Supply.
While this completes my outline of the main features of the bill, I wish now with the indulgence of the house to refer briefly to the remaining parts of the dollar-saving program since they are so closely related to the restrictions contained in the bill.


Mr. GREEN:: May I ask the minister a question? Where does the bill define scheduled and non-scheduled countries?


Douglas Charles Abbott: I shall have to look that up. I could give the answer later, when I have concluded.
The Travel Restrictions
A necessary corollary of the restriction of imports was the limitation of the amounts that could be spent for travel in United States dollar areas. We had to ration the use of dollars for pleasure travel or else make the import restrictions even more severe. The travel restrictions now in effect are approximately the same as those which prevailed immediately after the war. They allow an annual ration of funds for pleasure travel not to exceed $150 per person for those who desire to travel in a United States dollar area.
Mr. MaeNICOL: Per month?


Douglas Charles Abbott: Per year. That was the regulation in effect at the end or me war and for some time after. We were each allowed $150 once a year for pleasure travel in the United States.
Applications for travel funds in excess of this annual ration, when required for genuine

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reasons of business, health or education, will be dealt with on their merits by the foreign exchange control board.
The Special Excise Taxes
The remaining part of the restrictive side of the program consists of the special excise taxes on a wide range of durable consumer goods. This is not the time to discuss these taxes in detail but I wish to explain why they were imposed and how they fit into the general program as an essential supplement to the import restrictions. Their first and primary purpose is to discourage the sort of expenditure which adds to our imports from the United States. Most of the goods subject to these taxes are produced in Canada in substantial volume and most of them have a significant United States dollar import content. The import of practically all these goods in finished form has been prohibited or placed under quota restrictions and substantial savings in United States dollars are expected to result from this action. The savings, however, would be considerably reduced if domestic production of the same type of articles were to expand to fill the gap in the supply, since this would involve further substantial imports of parts and components.
It could be argued that a more effective way to check expenditures that involve a considerable import of parts and materials would be to relate the tax directly to the import content of the article concerned. But the objections to this type of action are conclusive. Taxes directly related to import content would be tantamount to sharp increases in the tariff and under the Geneva agreements as well as in our own longer-range interests we would not consider such a course. In addition, taxes of that kind would involve levying different rates of tax on substantially the same articles, and hon. members can readily imagine the complications that would result. Moreover, such action would represent an extreme form of discrimination against businesses which are in the early stages of developing their operations in Canada.
A second reason for these taxes was to limit so far as practicable the degree of discrimination against regular suppliers in the United States and their dealer organizations in Canada. For the time being, many of these suppliers and dealers are losing a part of their business because of the unavoidable necessity of restricting imports from the United States. Regrettable as it is, we cannot help that. But by imposing these excise taxes we are doing something to protect the legitimate longer-range interests of these businesses. While the Canadian manufacturers are temporarily relieved of competition from
IMr. Abbott.]
the United States, their unexpected advantage is being at least partly offset by the effects of the special taxes. Without these taxes, prices of many of the articles affected could have risen a good deal, to the benefit of the manufacturers and distributors. As a result of the taxes, it is the public treasury that benefits.
Now I have emphasized that the main purpose of the new excise taxes is to save United States dollar exchange rather than to produce more revenue. At the same time, additional revenue will not be unwelcome for two good reasons. The first is that the new taxes will undoubtedly withdraw some purchasing power even if, as we hope, they lead to some reduction in purchases. As the trend of prices indicates, spending is still outrunning production over a wide area of our economy. The second is that our budget position, though good, is not as good as many popular reports would have it. We do have a large surplus this year, so far-larger than we had expected But we have been making large advances to overseas countries as I have already indicated. While these outlays are advances rather than expenditures, the government has to raise and pay out the funds. On a cash basis, including these outlays, our income is only moderately in excess of our outgo. And there are good grounds for the view that we should be running a substantial surplus in times of high activity like these.
The Credit from the United States Export-Import Bank
As I stated earlier, our official reserves were about $500 million at the middle of November. In addition to this liquid reserve we have the rights conveyed by the articles of agreement of the international monetary fund to draw upon our quota in the fund. As an extra margin of safety we have 'believed it prudent to add to our exchange resources by arranging for temporary financing in the United States.
A foreign loan is not of course a solution to our dollar problem. It merely provides a supplement to our exchange reserves to take care of a temporary deficit until the constructive, longer-run measures which are going into effect get into full operation and produce a more reasonable balance in our commercial and financial relations with the dollar area. Not only does it give more time for the constructive solutions, but it also permits the adopting of a program less upsetting to business than would otherwise be necessary. Without the additional latitude which a loan provides, the program of restrictions would

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have to be much more severe which would cause undue dislocations to the Canadian economy and to many of our suppliers in the United States.
In the ordinary course of events, dollars borrowed by Canada in the United States would have come from private investors. In the present circumstances, however, it was felt that the magnitude of the sum required, and the necessity for quick decision, made it advisable to approach a public institution, namely the export-import bank of Washington. Arrangements have been made, as I have said, with that bank for a credit of $300 million. This credit is available for use up to the end of next year. Any amounts borrowed are to be repaid in equal instalments in three, four and five years' time.


Mr. HACKETT:: What is the rate of
interest?


Douglas Charles Abbott: That has not yet been
settled. In reply to a question at the press conference which followed the announcement, I said that the general practice of the export-import bank is to make a service charge over and above the average cost of United States financing, which I understand now is something of the order of 1J per cent. So that the rate will obviously be in excess of that sum. However, I am not yet in a position to say definitely what the final rate will be. One. reason for that is, as hon. members know if they have read the exchange of correspondence, that we said we would, in due course at an appropriate time, sound cut the public market to see what might be done there.


Donald Methuen Fleming: May I ask if it is a loan or a credit?


Douglas Charles Abbott: I think it might be called
both. When we take the money, it will be a loan, I suppose; and until we draw on it, it is a credit which is available for us to draw against.


Arthur Leroy Smith: Bearing
interest?


Douglas Charles Abbott: Loans from the exportimport bank bear interest from the time the money is drawn, not from the time it is made available.


John Ritchie MacNicol: But we shall have to
pay it back, no matter which it is.


Douglas Charles Abbott: That is quite right. As
my hon. friend points out, we shall have to pay it back, no matter which it is.


Angus MacInnis: Pay it back by another
(oan.


An hon. MEMBER:: There is nothing
unusual about that.


Douglas Charles Abbott: To continue:
The Question of Currency Depreciation
Before closing, I wish to make it quite clear that currency depreciation was considered neither a desirable nor effective alternative to the measures which the government has adopted. In formulating its program, the government has followed the course which will have the least tendency to raise prices and which will work. No program could be devised which would not increase the upward pressure on prices to some extent since we have to reduce the inflow of goods from dollar countries and, so far as practicable, increase the outflow to them. While it has been necessary to raise the prices to consumers of certain durable goods by imposing special excise taxes, we have tried to avoid measures which would increase the pressure on the prices of day-to-day necessities. We have taken very special care to avoid actions which would increase prices unnecessarily and indiscriminately.
This is one of the reasons that the government rejected the course of depreciating the currency. Make no mistake about it. Depreciation, or devaluation as some people prefer to call it, would raise the whole price level, necessities and non-essentials alike, over and above whatever increases might otherwise occur. Not only does depreciation increase the cost of imports, such as coal, oil, cotton textiles and steel products, but it also raises the Canadian dollar prices of most exports and thus increases the cost of food, wood and paper, and metals to give some of the main examples. In present circumstances, depreciation would have prompt repercussions on our living costs: many items would be raised immediately and others would follow without much delay. Anyone who suggests that depreciation is not an inflationary measure in times like these is living in a world of fantasy.
Strong as are the objections to depreciation from the standpoint of its effect on prices, they are not the most conclusive argument against it. As I said the other day, if a moderate reduction in the exchange value of our currency would really solve our dollar problem, it might be well worth considering. But there is nothing to suggest that depreciation would begin to solve our dollar problem. Currency depreciation may be helpful to a country which is in balance of payments difficulties because its costs and prices are too high to enable it to compete effectively in world markets. That is certainly not our position. Our costs and prices are generally
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lower than those of other countries with whom we compete in export trade. Price competition is certainly not restricting our exports. On the contrary, we have kept our costs relatively low and at current rates of exchange our staple exports can be sold in the markets of the world in competition with any country. The fact is that our difficulty in obtaining United States dollars for our exports arises from the international financial difficulties in which some of our best customers find themselves, and it is apparent that these difficulties would not be eased by depreciating the Canadian dollar.
So far as imports are concerned, it seems most unlikely that exchange depreciation of moderate proportions would exercise a major restricting influence on our United States dollar purchases. It would be far more likely to restrict our imports from European countries which have relatively high costs and are having difficulty in producing and in making available adequate supplies for export. With regard to our purchases from the United States, it must be remembered that prices in that country have risen by about 40 per cent since the middle of 1946 and despite this increase we have steadily enlarged the volume of our imports from that source. It is difficult to imagine that a further moderate increase in the cost of these imports would result in their sharp restriction. The demand for imports from the United States is much too broadly based to be greatly or quickly affected by a moderate change in their prices.
Now some of the advocates of depreciation say that the government made a mistake in returning the Canadian dollar to par with the United States dollar in July, 1946. They say that the government's unwillingness to admit this alleged mistake is the cause of our dollar difficulties. I would certainly not argue that the government is infallible. These are very difficult times and we are doing our best to plot a course through waters which are pretty largely uncharted. Nevertheless, I want to emphasize that we believe as strongly today as we did in July, 1946, that the action then taken was in the best interests of this country. It brought our price and cost structure into betier alignment with those of other countries and it limited the increase in our price level and living costs. It helped in the readjustment to high peacetime production, and it did not in any way create difficulties for our customers abroad.
But quite apart from the validity of our decision, it is pretty far-fetched to suggest that the 10 per cent change in our exchange rate is the cause of our present dollar difficulties. That would be to claim that the

difference between a forty and a fifty odd per cent increase in the cost of imports from the United States would have reduced our purchases from that country by something of the order of $500 million. It certainly could not be maintained that a change in the rate on the Canadian dollar would have in any way relieved Europe's difficulties and thus provided us with more United States dollar exchange.


Arthur Leroy Smith: Surely it is not as simple as that, is it?


Douglas Charles Abbott: It is just about as simple as that. The truth is that we should still be faced with an acute United States dollar problem today even if the rate had not been changed in 1946.
It should be stated that some of the advocates of depreciation argue that we should have continued to experience an inflow of United States capital had we not returned the dollar to parity. While there may be something in this view, it can be very easily overemphasized. Perhaps some types of capital, particularly capital seeking a speculative profit, might have more readily entered Canada with the dollar at a moderate discount, but not in a quantity to make any major difference in our exchange position. As I said the other day, that is not the sort of borrowing we want to do in the United States. If United States capital has been deterred from coming into Canada, it has, I believe, been because of the unfounded rumours which have been circulated as to possible depreciation of the Canadian dollar, coupled with a complete misunderstanding of the nature of the unofficial rate for the Canadian dollar in New York, rather than because of any real doubt as to Canada's ability to solve her current United States dollar problem. United States investors who have placed their confidence in Canada have had a remarkable record of safety and satisfaction with their Canadian investments and while during the war and at other times Canada has faced temporary difficulties, these investors have always seen Canada take the steps necessary to correct the situation. They are confident that Canada will again solve her current problems, and that confidence is soundly based. Those who spread false rumours about possible devaluation of the Canadian dollar are rendering a great disservice to this country and to those who have made and will make investments here.


Harry Rutherford Jackman: You are guaranteeing the world against the devaluation of the Canadian dollar, are you?

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Douglas Charles Abbott: Not guaranteeing the world anything.


Harry Rutherford Jackman: You are as much as saying so.


Douglas Charles Abbott: No.
There is another point which is important in regard to this oft-discussed question of currency depreciation. If we go in for depreciation when our competitive position is strong and our exports high, is there any logical end to this business of reducing the value of our currency? Much stronger reasons for depreciation could be advanced when exports are more difficult to sell. Do the advocates of depreciation suggest that we reduce the value of our currency whenever we have difficulties in our United States balance of payments, pushing our price level up farther and farther and continuously reducing the value of our money? It seems to me that is not the sort of policy that would appeal to the Canadian people. It is not the sort of policy that would be conducive to stabilization of currencies and to economic co-operation among nations.
I have not discussed the theoretical alternative of depreciating our currency to a point where it would achieve a sufficient reduction in our imports to correct our dollar position. This is not consistent with our international commitments and, even if it were, it is not the sort of alternative to which the government could give serious consideration. The drastic devaluation that would bo required would produce the kind of inflation that all of us have read about but fortunately have never experienced, and I hope never will experience, in this country. It would produce gross distortions in our economic structure and, through the friction and unrest which it would generate, it would reduce our productive capacity and our ability to compete abroad. If it severely restricted our imports from the United States, it would even more severely cut our purchases from other countries and further reduce their ability to buy from us. It might produce a substantial inflow of United States capital but that would mean in fact that we were selling Canadian assets to United States investors at bargain prices. That would involve in turn a further substantial increase in our annual dollar payments of interest and dividends to United States investors. In short, the course of drastic depreciation is one which no responsible government would choose.
In conclusion, I believe that the approach we have adopted to meet our dollar problem is the only sound and sensible one. Given time, the constructive aspects of the program should be sufficient to do the job. Meanwhile, we
have to put up with restrictions if we are to retain control of our own affairs. The government believes that the restrictive side of the program will involve comparatively little dislocation of our economy. I sincerely hope that hon. members will try to see the program as an integrated whole. It is easy enough to criticize and find objections to any particular aspect of the restrictions. None of them are welcome. But let us remember that we must save dollar exchange and that if we do not like one method of doing it we must find another. The program must be sufficient to do the job and it must be flexible enough to meet contingencies. The maladjustment in our dollar position is much too large to be corrected without a good deal of inconvenience and some difficulty.
The speed with which the constructive program achieves the needed results will depend in no small measure on our own efforts. But it must be recognized that it will also depend on external factors, namely the rate and extent of recovery in overseas countries and continuance of a high degree of co-operation with the United States.
The program is designed to overcome a national problem and it depends on a national response. The more that businessmen and the public generally support it and adopt it in their individual thinking, the quicker and the better will the program achieve the desired results. We must make a national effort to increase our dollar exports and to readjust our industry so as to reduce our dollar deficit. We must make a national effort to curtail our spending, particularly on durable goods, and to postpone new capital investment of a less essential nature. It is a program which calls for intelligent understanding and co-operation. It is the sort of program which Canadians can take in their stride and make work. We live in very troubled and uncertain times. But the Canadian people have shown a remarkable capacity to adapt themselves within the framework of their democratic institutions and traditions to changing conditions. We faced and met the challenge of the war in a manner which surprised even ourselves. We can meet this present challenge with less difficulty if we will only recognize and accept it.


Howard Charles Green: The minister was going to answer my question with regard to the schedule.


Douglas Charles Abbott: Could the hon. member let that stand? Speaking from memory, however, I believe that the scheduled and non-sched-uled countries are specified in the order in council. Again speaking from memory-and I have not a copy of it befoie me-I think
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there is some latitude for the governor in council to determine which countries will be scheduled and which will be non-scheduled. The line of division is between countries which are in balance of payment and those which are not. That is a condition which obviously may change from time to time.


Howard Charles Green: I cannot find anything like that in the bill.


Douglas Charles Abbott: I will give my hon. friend an answer later.


Mr. J. M. MACDONNELL (Muskoka-Ontario):: Mr. Speaker, before proceeding
with a discussion of the question before the house, perhaps I might be allowed a word with respect to the interjection of the Minister of Finance (Mr. Abbott) with regard to the reference made to civil servants. I agree fully with the principle he laid down, but there is a corollary to that, and that is that higher civil servants let themselves get thrust into positions where they seem to be making announcements, as they did during wartime from time to time, which we all thought should have been made by the ministers. I suggest that it is a two-way street, and on that basis I agree fully with what the minister said.
Mr. Speaker, I do not think any of us envy, or indeed could envy the task of the Minister of Finance this afternoon. I wonder if he thought sadly of the budget speech of last April, of the "surplus which was greater than all surpluses", and of the "unlimited prosperity" which we had at that time. I was glad to observe a note of caution in what he said today, and I am not surprised that after these last months there is a note of caution, because I think the Canadian people are surprised, indignant - almost incredulous - after the talk of surpluses and prosperity to find that they are having austerity-I noticed the minister did not use that word today; but it is his word-they are having austerity, embargoes, under the act, new taxes, and all the things which go with it. And I suggest that the people have not even yet realized the full significance of all this, and that the government may hear a good deal more from them, when they do.
I do not wish to make too good a case, and I do not wish to be in the position of not recognizing the difficulties. So I just wish to say this, here and now: that we recognize the difficulty of getting money from Europe, we recognize the growth of purchases in the United States, we recognize the assistance we have given to others. But we say we are here today in this session, this somewhat abortive

session, not for those reasons, but because of mismanagement by the government, to which I shall now refer.
During the short time it has been my privilege to be in the House of Commons I have tried, and I hope with some success, to use moderate language. This I find it difficult to do today, because I think this bill must be one of the most preposterous bills ever presented in a free parliament.
I say that for this reason; it is not so much because of what the minister said today, but rather because of what he did not say. Listening to what he said today, one would think there was nothing really unusual in it; that we were in trouble, and that we had to impose taxes and embargoes. What I complain about, and what I believe many people are complaining about, is that this bill gives powers which have never been given before in peacetime, perhaps never even approached in wartime. It gives arbitrary powers to one man to control the industry of this country, to an extent that I would never have believed any party, and still less any party led by the Prime Minister (Mr. Mackenzie King), would have come to. We who have been free, moderately, are asked to put shackles on ourselves. We who have struggled for generations to achieve the position of living under the rule of law are now to live, so far as business is concerned, to a very large extent under the arbitrary powers of one man. This is control-complete, final and absolute. And I shall prove that in a minute, at least to my satisfaction, by reading certain sections of the bill.
Let me give an illustration of the fantastic lengths to which this goes. It came to my attention yesterday that an American living near the border, and who spends his summer holidays in Canada, wanted-in his own truck as I understand it-to bring some lumber across to improve his own premises in Canada. It did not involve any United States money at all, because it was his own. But he could not do it. That shows the extent to which this goes; and this is only the beginning of it.
I now wish to read one or two sections of the bill. Section 3 states:
No person shall import or attempt to import into Canada any goods listed or of the classes described in schedules I, II or III except in accordance with a permit . . .
And so on. And section 4:
No permit shall be issued for the import of goods listed in schedule I-
And that refers to luxury goods.
-unless, in the opinion of the minister, exceptional hardship would result if a permit were not issued.

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I would not object to that so much, but in section 6 we have the final pay-off. I refer particularly to paragraphs (c) and (d). But before turning to that section, let me refer to section 5 which states:
The governor in council may make regulations, etc.
That is only by order in council, of course; we are getting used to that. But when we come to section 6 we deal with administration and we find that it states:
6.	(1) Subject to this act and the regulations, the minister may
(a)	prescribe the procedure to be followed in applying for and issuing permits;
(b)	prescribe forms necessary for the administration of this act;
(c)	in particular cases or classes of cases, from time to time, prescribe terms of, and conditions to a permit or the permission granted in a permit additional to those prescribed by regulation.
In other words, the minister's judgment is absolute and final. And-and perhaps this is even worse:
(d)	authorize any person, under his control and direction, to act on his behalf under this act.
In other words, under this act, the minister is going to have these astounding powers.
It may well be asked how people who call themselves Liberals-and I think there are some real Liberals across the way-were ever brought to agree to this. The only way I can imagine is that they were told it would not last long. There has been added to Liberal principles the new Liberal principle of arbitrary powers, the application of arbitrary powers.
That is what it is. I must say I was surprised; I thought the minister did not quite do justice to the bill in that respect. It seems to me that he was not at great pains to underline to us the full extent of those arbitrary powers.
You may say, What do we want? We want law, known to all, the same for all and fair for all, such as the tariff act, which will have provisions written into it and which will not be left to the discretion of one man, and, as my colleague beside me points out, we want this law to be subject to the interpretation of the courts.
I suggest to the house that this bill is an offspring of the order-in-council mind and legislative bankruptcy, or lethargy-I do not know which it is-of the government. In any event it is a refusal to try to write a law which will be the same for all, known to all and fair for all.
I need not delay the house by arguing as
to the reason for this legislation, which is
the currency mess we have got into, and which the minister himself described at some length. How serious it is we all know. It includes not only such important things as coal and oil, as the minister pointed out, but many of the products used in manufacturing in the factories of Canada. Indeed I suppose if we managed to get into the position where we actually did run out of United States funds, it would mean widespread unemployment in Canada.
There are many people in this country who know how serious that is. They are those who have had their businesses ruined already, and who have been told that they have to come to a full stop. I shall now read a paragraph from a letter sent by the assistant deputy minister of finance to a man who is advised with regret-it was a nice letter- that.:
. . . under the regulations of the order in council the articles which you have on order may not be imported into Canada at the present time.
Then there is this paragraph which I ask the house to consider:
It is unfortunate that these necessary emergency import control regulations cut across long-established trade connections such as yours, but as the Minister of Finance has stated, the urgency of Canada's foreign exchange position forces the government to adopt these restrictions to correct it.
There you have it. Those people, and there are many of them, will understand very fully what this bill means.
I digress for a moment to refer to a point the minister brought up again today. He brought it up in his speech last November. I refer to the use of the Foreign Exchange Control Act. I would like to read from evidence given by the governor of the Bank of Canada to the senate committee on banking and commerce in August of 1946. The governor was being questioned by the Hon. Mr. Crerar as to the powers of the foreign exchange control board under the act:
Hon. Mr. Crerar:	Let me put it this way.
Supposing Eaton's, which is a large retailing establishment in Canada, wanted to buy a half a million dollars' worth of goods in the United States for sale through its stores, there might come a time in your judgment when the foreign exchange control board would say to Eaton's, "No, you cannot do that."
Mr. Towers: God forbid! sir. We have never done that, and I hope we never shall under this proposed legislation.


Douglas Charles Abbott: And we have not in this case.
Mr. MACDONNELL (Muskoka-Ontario); Later the Hon. Mr. Crerar says:
It seems to me there is no question that what Mr. Towers asks for in the bill gives the foreign
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exchange control board the power to say to Eaton's, "You must cut that down to $200,000."
Mr. Towers:	No, there is no such power
at all.


Douglas Charles Abbott: There is no such power in the board today.


James MacKerras Macdonnell: All right. What I am saying is-and, by the way, the Minister of Finance was present when this evidence was given-that when the minister tells us that they did not know the power was there but that the law officers of the crown said it was, he is surely not suggesting that the law officers of the crown came and suggested to him that this could be done?


Douglas Charles Abbott: I think I have already told my hon. friend and the house that I asked the law officers of the crown for their opinion. They did not advance their opinion unsolicited. The government took full responsibility and I take full responsibility for the decision. It had nothing to do with the board.


James MacKerras Macdonnell: I quite realize that. I think the law officers of the crown should never have been approached on that question because, if an assurance of this kind is not valid there is no assurance of any kind, it seems to me, that is valid. I do not think the government should ever have asked the law officers of the crown that question. It was what the lawyers call an ex parte motion. The people of Canada were not represented at all when that was done. It was done simply between the government and the lay officers of the crown.
I return now to the reason which brings us here this afternoon, and that is the currency mess. The minister has dealt with it, and I shall not detain the house long on it, but I draw attention to a few things that happened.
It certainly is unfortunate that this large fund which the governor of the Bank of Canada said in August, 1946, he thought would last at least two years and perhaps longer has gone practically within one year, that it has so rapidly, so unfortunately, and so tragically been dissipated.
I want to remind the house of one or two things. In 1939 when the war began we had 3ome $400 million in the fund. As the minister pointed out, they got pretty near the bottom of the barrel in the early years of the war, but the Hyde Park agreement came to our rescue and the fund was built up, so that oy the end of 1943 there was in it $649 million; by the end of 1944, $902 million; by the end of 1945, $1,508 million, and in June of 1946. $1,624 million.

I draw attention particularly to one thing. That fund was growing steadily. It was a fund, as the governor of the bank pointed out to the senate committee, which resulted from capital movements, to a very considerable extent LTnited States investments and other capital. We did not earn it but it came in in that way, as the governor said. In June, 1946. with our dollar at 90 and the United States dollar at 100, we had achieved a rough and ready balance. Our securities in the United States at that time were quoted at 93; in other words, above the official rate. We had, as I say, achieved a kind of balance. The fund was continuing to increase up to that moment and there was, so far as I am aware, and I have heard nothing to the contrary suggested, no reason for alarm that it might not go on increasing. That was the very moment when the government, for reasons to which I shall refer later, reasons having to do with price control, which actually was a foreign principle introduced into a currency matter, pulled the plug and our United States resources cataracted down the drain. I want to explain what was in the mind of the government. They had a hope which might have been realized but it was not, but at any rate at that time the fund began to disappear, and I want to draw attention briefly to the way it went. *
In the first six months of 1946 .it had increased by $116 million. During the whole j-ear of 1946 there was a loss of $264 million. In other words, in the last six months there was a loss of $264 million plus $116 million, or a total of $380 million. But that is not the whole story.
If it is fair-and I do not know anything unfair about it-to project the conditions of the first six months of the year through the last six months, assuming that the dollar had been left where it was and where it was pretty comfortable, we would have reached a situation where we would have had $116 million in the second half of 1946, subject to this, that we would have had to make an adjustment for an increase in our United States imports in the second half. They did increase. The excess of United States imports over our exports in the second half of the year was $71 million more than in the first half. So the increase we would have had would not have been the whole $232 million, $116 million multiplied by two, but $232 million less $71 million. In other words, it would have been $161 million. If you had that $161 million and compare that $161 million with the actual loss of $264 million, you would reach the conclusion that at the end of the year we would have been $425 million better off.

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Now we come to a longer period, from July, 1946 to November, 1947. During that period we lost roughly SI,150,000,000. Can we blame the government for that? Let us examine it.
First of all, we must admit that the United States imports were up, but I shall suggest to the house that there were two very strong reasons why they were up, for both of which the government were responsible. The Minister of Finance claimed in a recent speech that going to parity had saved us $200 million, namely, ten per cent on S2 billion of purchases. There may be something in that, but it overlooks the offsets. If the dollar had been at 90 it would have deterred Canadian purchases in the United States, stimulated American purchases in Canada and operated to draw here United States investments which have practically dwindled to nothing. This is a point which has been grossly ignored by the government and was ignored at the time this action was taken. We would have had that great difference.
As I said a moment ago, United States imports had increased but the government was to a very considerable degree to blame for that and there are two reasons I shall give for that. In the first place, the government's conscious, calculated, continuing policy during that year was to go on inflating, to go on increasing the money supply, which inevitably operated as a stimulus to further purchases. And finally this: for months there were kites being flown to suggest that there would be restrictions, and so on. Indeed, it was almost as if the president of a bank said to the depositors, "Now, I am going to warn you that six months from now we shall probably not be able to pay." What do you think the depositors would do? That is what happened here. The government practically occasioned a run on American dollars.
The minister also told us that there has been a great uprising, an increase of United States imports. As a matter of fact I think a great many people rushed in to anticipate their demands. I think it is perfectly clear that it is proper for us to say that, on the basis of what I put before you, the government, by their action in June, 1946, which in retrospect seems to me to have been wholly a mistake, did lose several hundred million dollars of our exchange.
In one way it might seem almost incredible that this action was taken, and yet when one looks at the actual situation, one can realize just what it was that led ministers to this conclusion. In the speech made by the Minister of Finance in July, 1946, when the announcement was made of return to parity, to me it is a most extraordinary thing but after reading the speech very carefully, I find
no reference in it whatever to the movement of United States capital. What clearly happened is this. The government were troubled because United States prices were going up, and they hoped that we might escape that and meet United States prices coming down later on. They were going to let the people of the United States take the high road and us take the low road. It would not be a "detour over rough and difficult ground," to use the Prime Minister's words of November 17. No, this was not going to be any "detour over rough and difficult ground." We were going to go very comfortably, as I say, on the low road while the people of the United States went on over the side of the hill and came down to meet us. That was what was hoped, and I think, in the light of that, it is very interesting to read from the speech of the governor of the Bank of Canada at the annual meeting of the bank which took place last February.
I should like to say right here it seems to me that what the governor said in his speech contained notes of warning which should have been taken at that time. This is what he said in his speech of February 11:
United States prices are substantially higher than Canadian ones at the present time. Obviously this spread could not be maintained indefinitely, even if controls were retained in Canada. The return of the Canadian dollar to parity with the United States dollar last July reduced but did not remove the upward pressure on Canadian prices arising out of the rapid increase in the United States price level. However, many observers in the United States are expecting a considerable reduction in the case of some of the more extravagant price increases which took place during 1946.
You see, there was still some hope, though there was much misgiving in the mind of the governor when he made this speech. Then he goes on, and this, I think, is very important. This is the crux of the whole matter. This shows what they hoped for, the pleasant hope that they had which, unfortunately-and I think we can say unfortunately with great genuineness-did not come off. This is what he said:
If this occurs and Canadian and United States prices in general come together at a less inflated level, Canada's effort to make an orderly transition from war to peace will have borne fruit.
What does that mean? It means, as I said a few moments ago, that this was a gamble. This was a gamble that United States prices would come down. If it had succeeded it would have been a very pleasant gamble; it would have looked very clever, but it did not succeed and we are all paying the price. It did not succeed, and we lost our exchange, we failed to meet United States prices on the low level and we dried up United States
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investment in this country. That is the reason for the trouble we are in now.
Were there any warnings of any kind? Oh, yes, there were warnings. I have referred to the speech of the governor in February, which I think was a warning. There was a much stronger warning given by a well-known international banker, which appeared in the financial press some time in March, I believe. But apparently nothing could be done. I understand from the Prime Minister's speech of December 8 that they were troubled about the matter and had thought about it, but they could not do anything about it. This is what the Prime Minister said, as reported at page 66 of Hansard'.
I can say to this house quite honestly-
I do not think the Prime Minister needed to put in the words "quite honestly". I am quite sure there are not two kinds of statements which the Prime Minister makes, one which is honest and the other which is not. But I continue:
I can say to this house quite honestly, knowing the situation as I have from the beginning, that we were deeply concerned about the loss of United States dollars over quite a period, hut we were informed by those who were concerned with the Geneva negotiations that that conference had a great possibility of succeeding; and that it would be unfortunate if anything were done in Canada which would prejudice the success of the discussions that were taking place there. That was the reason we waited until we knew definitely that the final agreement had been reached before we took the step to call parliament and to have those great questions discussed here.
Well, now, that sounds grand, but I have one or two things to say about it. In the first place, it seems to me that if that was the real reason, and if we did actually refrain from giving any inkling of this to the people who were negotiating busily at Geneva, then we played a terrible trick on them. Apparently the implication of it, if I understand it, is that we could not tell them just what we were going to do here, that we would have to wait until the agreements were made; yet I suppose the measures that we are being asked to enact now will be the greatest blow to the success of these trade treaties, of which we must all desire the success. I suppose there could not be any greater blow than this, and therefore I suggest that reason is a bad one. I suggest also that other countries did take steps to meet their situation during that period because they were under pressure as we were.
I think I know the real reason, and I think the Minister of Finance told us the reason this afternoon, why they delayed. They were in the Micawber business; they were hoping for something to turn up.


Douglas Charles Abbott: Not at all.


James MacKerras Macdonnell: They were waiting. I notice, by the w'ay, that oar new dictator whose speech I am going to read from in a few minutes had something in his speech about it.
I was interested to hear the Minister of Finance speak very strongly about the Marshall plan. I think he is quite right. I think the Marshall plan is terribly important to us; of course, Marshall did speak in June, and always there was a possibility that something might happen. Therefore they just let things go along. They were like the fellow who is in the water and in some danger and he clutches at any lifebelt he sees and hopes for the best. I think this delay was most unfortunate. I think the step taken on July 5, 1946, was bad. I think even early this year, when warnings came from the governor of the bank and from other authorities, it might have been possible for the government to say, we made a mistake then and we are going back to reality. However, I shall have something to say about that later.
I now come to these powers which are given, these powers both positive and negative, the power to restrict, which the Minister of Reconstruction and Supply (Mr. Howe) is going to have in a big way, and the power to stimulate. I think I should read some of the more interesting sections from the speech of the Minister of Reconstruction and Supply. He has a short-range policy and a long-range policy as well.


Mr. HOWE:: What speech is this?


James MacKerras Macdonnell: This is the November 20 broadcast. As I say, he has both a short-range and a long-range policy and we are told that the long-range policy is to last only a few months. I do not know how long the short-range policy is to last if the long-range policy is merely a matter of months.


Clarence Decatur Howe: Read that section through.


James MacKerras Macdonnell: I will read the whole thing.


Clarence Decatur Howe: Please do. I have heard that remark of mine distorted five times. Now read it correctly.


James MacKerras Macdonnell: If the minister will stop interrupting I will read every word of it; every word of this paragraph, that is to say, not every word of the speech. This is what the minister said:
The short-range policy of spending less in U.S. dollars, involving prohibitions, quotas, and excise taxes, will bring immediate help. The long-range policy, of earning more U.S. dollars, must

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be made the permanent solution of our difficulty. The short-range policy is temporary; just how temporary, will depend upon the enthusiasm and energy that we can put behind the long-range program. It is the long-range program that I wish to discuss this evening, the program for building up our U.S. dollar exports, and thus bringing about the end of restrictions. My experience tells me that if we will make the building up of U.S. dollar exports a national objective, we should be able to balance our trade in a matter of months, and on a high level, rather than on a restricted level.


Clarence Decatur Howe: How many months did that
say?
Mr. MACDONNELL (Muskoka-Ontario); Well, I should think-


Clarence Decatur Howe: The leader of the opposition said six months. That is his interpretation.


James MacKerras Macdonnell: I would say less than a year. Is that fair?


Clarence Decatur Howe: I do not think so.


James MacKerras Macdonnell: I will not argue with the minister about that. I will simply leave it there. Let me read another paragraph. The minister's modesty carried him away a little here; nevertheless I will read it:
In 1945, our national objective was to rebuild a peacetime Canada on a scale that would provide jobs and a high standard of living for our veterans and war workers. During two years of reconversion, we have matched, and in some fields, exceeded the accomplishments of the war years. Unemployment in the year 1946 averaged only 3-5 per cent, and for 1947, 2-5 per cent. Today, it is practically non-existent. In short, we did the job.
If by that the minister means that the people of Canada did the job, I agree with him entirely. If he means that the department did the job, they did not have any more to do with it than the man in the moon.
I now want to read another interesting extract, and I would ask hon. members to observe that when the minister is given power he uses it. He is a realist and when he is given power he will use it. Do not let anyone be fooled on that; he has not got it just to play with. This is what he said:
Manufacturers using important supplies of semi-manufactured materials imported from the United States, must examine ways and means of reducing such imports, either by obtaining their needs from Canadian production, or otherwise. Those selling goods having a substantial U.S. content and selling them for other than dollars, must endeavour to find dollar markets that will at least restore the U.S. dollar drain resulting from their transactions.
I wish to read finally this paragraph, because we are coming to the same point which the Minister of Finance touched upon:
Canada faced a similar dollar exchange crisis in the early days of the last war and solved it through the Hyde Park agreement, which enabled us to sell munitions of war to the United States. The Marshall plan, now being discussed in Washington, may very well help us out of our present situation. If so, the duration of the period of restrictive measures will be shortened accordingly. I am happy to say that the measures we are taking to solve our balance of payment difficulties are meeting with understanding and friendly co-operation from our neighbours to the south.
So much for the broadcast.


Clarence Decatur Howe: A good speech, wasn't it?


James MacKerras Macdonnell: Parts of it.


Clarence Decatur Howe: It reads very well.


James MacKerras Macdonnell: Perhaps I might say of it what Churchill said of a certain speech. "Parts of it were true and parts of it were trite; the parts that were true were trite and the parts that were not trite were not true."
I should like to say just a word or two about these restrictions because they will be there in a big way. I never thought I should live to see the time when industry would have to operate, shackled as it is at the present time. These proposals will raise costs too. But what I wanted to talk about particularly at the moment is the embarrassment to business. The minister seems to me to talk about the businessmen of the country as if they were a lot of Rip van Winkles who have been asleep all the time, and as if all the minister has to do is to wave a magic wand and they will rouse up and do things they never did before. May I point out that many of these very men were here during the war helping to do the job?
The minister talks in an airy way about Canadian subsidiaries of United States companies and he suggests that they will have to change their whole way of business. There is no mystery or want of knowledge as to what brought them here. They came here for two reasons, first of all for the Canadian market, and, secondly, because they could export from here more readily to other empire countries. That was the chief reason for their coming here; and for the minister to say to them that they will have to change their whole way of doing things-well, he might as well go and bay the moon as do that. He cannot suddenly get people to change in that way. Let us try to imagine the position of a man endeavouring to set up in a new business now, a

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man of energy and initiative. What has he to do? He cannot see the minister when he comes here. The minister is too busy. Therefore such a man must see someone else, and it will be an unlikely thing if that someone else has sufficient experience or knowledge to deal with the matter, because men of experience and knowledge are back home trying to work at their own industries. The fellows who were here during the war cannot be got back here, so that as an administrative problem the thing is tremendous.
There is something else that I dislike. We have here a central bank, which I think is a good thing, and it has been well administered. But do not let us fool ourselves. It has taken away from the free expression of the chartered banks, for they are people subject to authority now. And we are going to do the same thing to industry in this country. How hon. members opposite can swallow this pill I do not know. Have they done it because they think it will be only for a matter of months? The minister says that months may be many months. Well, if my hon. friends think it is only a matter of months or of a few years, they had better forget it. Unless we get manna from heaven in the shape of the Marshall plan, or something of the kind, this will not be merely for a few months or a few years. This kind of power grows. It has grown, a colleague of mine says. Of course it grows. I read a book describing similar powers in the United States and there was in that book one phrase which I shall never forget. It is this, "Coercion is insatiable". I should like hon. members to remember'that.
I was glad to see a socialist friend of mine, Professor Underhill of the University of Toronto, writing the other day that we need vision, energy, enterprise and initiative in this country. Does anyone think this will conduce to that sort of thing? Does anyone think people who will be shackled, as this measure shackles them, will have vision and energy?
As a matter of fact, what I fear is that with this tied economy here and a free economy over the line, some able people will be constrained to leave this country and go elsewhere, where there is a chance for their energies.
Let us ask ourselves this question:	What
is possible under this measure? I have tried to look at that question because, after all, we are in a mess and must do something about it. I have asked myself what is possible, whether anything is possible, and I have talked to people in business, who assure me that certain things are indeed possible. United
[Mr. Macdonnell (Muskoka-Ontario) .1
States subsidiaries will be able to manufacture some things, some parts, and send them across the line, but I am assured that it cannot amount to much in a short time. It will be a gradual process. It is reversing the trend; it is contrary to the policy that brought people here who set up industries in Canada, and the minister will have quite a time. He is a great optimist and he talks optimistically about what can be done. He says that we are manufacturing 200 parts that we did not manufacture, but if you add it all up you might find it does not amount to much more than $200.


Mr. STEWART (Winnipeg North):: Does the hon. gentleman suggest that the policy of United States subsidiaries should rise supreme over the needs of the country?


James MacKerras Macdonnell: No, I do not suggest that. I shall have something to say in that regard. I do say, however, that, whether we like it or not, United States subsidiaries have played an important part in the development of this country and we need not feel ashamed of it, because we are only going through the stage that the United States went through for fifty years. From 1850 to 1900 the United States was busy borrowing from Europe. The hon. gentleman will agree with that. Also as is very well known, some of our best immigrants have come here as managers for United States plants, have stayed in this country and made their homes here, and have become among our best citizens. That question does not bother me. Thank you for asking it.
I was trying to consider the question of what is really possible, and my conclusion is that progress will be slow, that we shall be foolish if we have any high expectations, and that what we must consider are long-range policies running for a considerable number of years-


Clarence Decatur Howe: In other words, the theory is that it cannot be done.


James MacKerras Macdonnell: -and not just for months.
I should like to say one word more about this control matter. As I said, now that we have control which is complete, final and absolute, sometimes I wonder if it is not irrevocable. That is what bothers me. I wonder whether, if we go on for a few years, we can ever turn back. In this house there may be some men who like that; if they do, that is all right. But I never understood that the party led by the man who is Prime Minister of this country at the present time did like that kind of thing; indeed I am sure there

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are many men opposite who dislike it as much as I do. Whether or not the minister dislikes it, I cannot tell.


Clarence Decatur Howe: Leave it to him to say.


James MacKerras Macdonnell: I cannot tell.


Clarence Decatur Howe: Tell us what you think.


James MacKerras Macdonnell: It is an interesting point. I want to discuss it. I think many people will be interested.


Clarence Decatur Howe: My hon. friend is just beating the air.


James MacKerras Macdonnell: I shall not be much longer.


Clarence Decatur Howe: I hope my hon. friend will
tell us what to do before he gets through.


James MacKerras Macdonnell: I shall have a word to say even about that. I am trying to tell hon. gentlemen opposite now what I think are the evils in what they are doing. After all, they are the government. They are responsible. Our primary job is to suggest what is wrong with what they are doing.


Clarence Decatur Howe: That is a comforting philosophy.


James MacKerras Macdonnell: The Minister of Reconstruction and Supply is quite a conundrum to me, because I think he believes in energy, private initiative and all that kind of thing.- What I am troubled about is that I think he still believes far more in his own personal power. Therefore I think he likes this kind of thing. I am not going to put this on any personal basis, because I would not want this power exercised by anyone, even though he had the wisdom of Solomon and the knowledge of Francis Bacon. The minister got his training in wartime, and I do not believe that kind of mentality is necessarily good for this kind of job. We no longer have wartime conditions, and the things that the people put up with in wartime they will not put up with now. Furthermore, as I said a little while ago, the people who helped the minister to do a job in wartime are now back home trying to work at their own jobs. I repeat that this bill, in the power which it gives to the minister, is the negation of everything we tried to build up in our life. I think it has caused throughout this country alarm which the government perhaps hardly realizes.


Harry Rutherford Jackman: Not in Ottawa, anyway.


James MacKerras Macdonnell: I have spoken about my feeling that there is not going to be any quick relief from these troubles.


Clarence Decatur Howe: Cassandra!


James MacKerras Macdonnell: That brings me back to the question of money or currency. As I said, I think there is an extraordinary measure of agreement in this country that what was done in July, 1946, was wrong. 1 am not saying that everyone who thinks that necessarily shares my view as to what should be done now, but I think there is an extraordinary measure of agreement that our present troubles flow from what was done then. For the life of me I cannot see why it it is not so; because, as I repeat again, in July, 1946, we had a kind of rough equilibrium which the government rudely disturbed.
I now want to make this point. I believe that these remedies will be seriously retarded unless we have a sound currency condition. If one looks at our background, as I said a few minutes ago, one realizes-quite properly in my opinion-that we have relied to a considerable extent on United States investment here; and it is the cutting off of that which is largely responsible for what is happening now. We have reached a kind of impasse, in my opinion, and we have now three courses open to us in the matter of currency.
The first is to stay as we are, and the minister assures us again that the government is adamant on that point. It is an unfortunate thing that our dollar and the United States dollar have the same name. They are not necessarily the same thing. The fact that they have the same name I think often deludes us into having a kind of false pride that they should have the same value. The French franc and the Italian lira at one time had the same value, but it was a fortunate thing they did not have the same name, because there was never any worship of the sacred cow in the matter of keeping them at the same level. I would say that the government as well as the Department of Finance have become the prisoner of their own ideas and are in great danger of relying on the doctrines of the textbook, instead of coming out into the clear, open air of reality, facing conditions as they are and dealing with them in a common-sense manner.
I want to read from something the minister said in his speech on December 9, and this will be found on page 91 of Hansard.'.
Currency depreciation is a device which may be resorted to, and which it may be desirable to resort to. if the value, either internal or external, of one's currency is below its real purchasing power; but that is not the case with respect to the Canadian dollar. We are not handicapped in a single export market of the world because our dollar is at par with the

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United States dollar. We are not losing a single sale in that market because our prices are too high.
I confess that when I read that statement it puzzled me a great deal. I do not set myself up to be an expert on exchange. However, I discussed it with a couple of experts or a couple of people whom I thought to be experts. One of them said it was so confused that he did not know whether it meant anything at all; and the other said that it meant exactly the opposite of what the minister said. Therefore, when I reached that stage I decided I would lay off it and not try' to be an expert at all.


Douglas Charles Abbott: That is helpful.


James MacKerras Macdonnell: Just this I will say on it. I think the ordinary man in the street in July', 1946, thought that when we appreciated our dollar to parity, one of the reasons was that at ninety cents it was considered to be below its true purchasing value.
But I am not going to bandy words on that. I want to appeal to the verdict of facts, because I think facts are stubborn things. It is on that ground that I venture to say' what I am going to say. It is an appeal to reality because I think at the present time we are living in an ivory tower and are trying to pretend things exist which do not exist. The Canadian dollar is valued today in New York at 12$ per cent discount which is approximately two cents less than when the minister's speech was made in November. That is not good. I know it is said by the foreign exchange control board that that really does not mean anything, because those dollars are not dealt with in the ordinary way. But I say this: Let anyone laugh off the test of value which comes from transactions between willing purchasers and willing sellers in very substantial amounts. If that is not a verdict of value, I should like to know what is. I know the difficulties. The minister has pointed them out. I know the fact that we did not get hard money from Europe has contributed to this question. I know that very well. But on the other hand, for the government here in Canada to say that the Canadian dollar is worth 100 United States cents seems to me rather laughable, because I can well imagine an American saying, "Come over here and see for yourself that it is not worth 100 United States cents. We are dealing with it at eighty-eight cents". The government seems to be like a man in a boat with the tiller in his hands, trying to steer the boat when the rudder is out of the water. Therefore he has no control. Whether we can compare the

government to King Canute I do not know; I will leave that. At any rate the results of what has been done are clear: excessive purchases of United States commodities; confusion worse confounded-embargoes and taxes; people put out of business, and the whole turmoil we are in, which the minister described very well.


Douglas Charles Abbott: Nobody has been put out of business.


James MacKerras Macdonnell: I should like to say a word about this further drop of two cents since November. I do not think we can laugh that off. There was a time when the Department of Finance would have been very deeply concerned to see our dollar drop two cents within three weeks in what I call a free market.


Douglas Charles Abbott: It is not a free market.


James MacKerras Macdonnell: That is the official answer, and in reply I can only appeal to the immortal judgment of common sense.


Clarence Decatur Howe: It is a bootleg market.


James MacKerras Macdonnell: That is the official line, but I repeat: It is a transaction between willing buyers and willing sellers in a free country, where they deal in our dollars, not to the extent of a few tens of thousands, but in large amounts. I want to say just a word about this last drop, because I think it might have been contributed to by one or two things which were not in the least necessary. I notice that the well informed-at least I suppose he is well informed; he writes for a Liberal paper-Bruce Hutchison, writing in the Free Press, says that the American public and even the American congress were taken completely by surprise by all our difficulties. It seems to me that when we spend as much money as we do on publicity we should have had enough publicity there so that they would not have been taken by surprise.


Douglas Charles Abbott: Does my hon. friend seriously think we should have advertised in advance in the United States that we were in exchange difficulties and likely to have to take some form of action to correct the situation? Does he seriously suggest that?


James MacKerras Macdonnell: No, I do not.


Douglas Charles Abbott: That is a serious question, and I should like a serious answer.


James MacKerras Macdonnell: No, I do not, though you did a pretty good job of advertising our troubles here.

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Douglas Charles Abbott: I just asked if my hon. friend seriously suggested that.


James MacKerras Macdonnell: I will answer the question. I complain that you advertised our troubles too well here, and perhaps you will say I must not complain because you advertised them too little there. But I say if you were advertising them here you might as well have advertised them there.
I still suggest to the minister that he read what Hutchison has to say, and he may not think this is so foolish as he did at first.
The other point I want to refer to, and I think it is perfectly proper to refer to it, because it is a matter of common discussion, is that it is frequently reported that we have been negotiating for a loan in private quarters, and that we have not succeeded in getting it. Whether that is because we have been trying to dictate our ideas there, I do not know; but I suggest that also is not a good thing for Canadian credit.
I have spoken about the dollar and keeping it as it is; and I refer now to the second alternative, which is to let the dollar go free. That, I am sure, is the objective of most people in this house. I do not think it is an immediate objective. Personally I feel that we have to go by degrees; nevertheless I believe that is the only real objective we can have. I hate controls, but if I thought they would work I would stomach my dislike of them. The reason I am against them is that all history shows that in the end they bring their own retribution. There is another reason for not letting the dollar go free, and that is that we have obligations under Bretton Woods. I will say quite frankly that I think the world is too unsettled at the present time for us to take that risk. I will point out also in aid of the minister that when it was done after the first war-and incidentally there has been a great disposition to pretend that everything done after the first war was stupid, but I am not so sure it was stupid-in letting the dollar go free they had Europe on its feet and not on its back, as it is now. *
Then I come to the third suggestion, which has been made already by my leader and which- I repeat, of the dollar at ninety cents. Of course there are a great many unpleasant things about it. Tire minister has outlined them very well, and I agree with much of what he said. I do not suggest it because it is nice; I suggest it because I think it may help us to avoid worse things. When the minister 'says it would do no good that does not convince me at all. The minister said a little while ago that an additional ten per
cent in the price would not deter purchases in the United States. To me that is a most unconvincing argument. Rising prices are always a deterrent, and the last ten per cent is like half an inch on the end of your nose; it makes quite a difference.
Mr. ABBOTT; It all depends on your nose.
Mr. MACDONNELL (Muskoka-Ontario); Furthermore you may as well say that if a company is not making a profit the addition of ten per cent to its gross would not help; but everyone knows that the last ten per cent of the gross usually makes the difference between a profit and a loss. I am sure the minister will not contradict that. We do not want to expect too much from this. I am not suggesting that it is going to work any miracle; no fear. The damage has been done. If you go to a doctor after disregarding the rules of health for eighteen months he cannot cure you over-night; he can only set you back on the road to recovery. I am not suggesting that anything can be quickly done. But when people say it will not do anything I reply, first of all, that when we were at ninety before, we appeared to be in a condition of very considerable financial health and stability. To give them every credit, the department were beginning to ease the restrictions. Business was getting rid of a few of the shackles, but of course when this happened they were put on again. We have a shackled economy now, and the minister will make it worse. Even at the present time we have all kinds of financial restrictions. In Germany they used to have travel marks, this kind of marks and that kind of marks. If you inquire into the regulations of the foreign exchange control board it will make you dizzy. They have all kinds of different rates at which money can be had for this purpose and that purpose and the other purpose, according to the judgment of the board as to the relative desirability of the transaction that is to take place. In other words, they are supposed to have all the wisdom of Solomon.
Another point I wish to make clear is this. I have spoken a good deal about American investment in this country. I do not want anyone to think I believe that going to ninety will suddenly bring about a rush of American investment, or anything of the kind. As a matter of fact, that action would be only recognizing facts, because at the present time they do not value our dollar at more than ninety, so that we will not have a rush of investment. What I do think, however, is that a movement toward reality will win respect from American businessmen. I think they

doO
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will regard it as as sign of realism. I do not think they will regard it as a sign of weakness but as a sign of strength; and, furthermore, I think it can be maintained that it is not depreciation in the ordinary sense. It is going back to where we were. However, I do not press that.
It will, I believe, do three salutary things. In the first place, it will deter purchases from the United States. Second, it will stimulate sales. Third, it will tend-and I only say "tend"-in the long run to bring back American investment, which in my opinion we shall need for many years in this country.
I know the difficulties that are there. It will send up some prices, and there may be a tendency to exaggerate that. It will make our coal cost more, but it will not be as bad as some of the things we have now, as a result of which many other articles, some of them in great need, particularly for domestic use by young people setting up housekeeping, are going to cost twenty-five per cent more, which is bad enough. Of course some of those things may be included in the changes the minister has made.


Douglas Charles Abbott: None of them are very essential.


James MacKerras Macdonnell: The second thing it will do, and I do not minimize this at all, is make it more difficult for Britain to sell here. I would not willingly add one featherweight to Britain's burden; but my answer to that is if we are over-valued, Britain is over-valued; and my feeling is that there has to be a recognition of reality, not only by us, but by other people. At the p- sent time I believe part of our troubles, and no small part, is due to the over-valuation of currencies, and in that connection I want to read a short extract from a book I have in my hand, which seems to me to put the matter very well indeed. I think the point is of such importance that I am going to ask .the house to let me read this quotation. This book is by one Henry Hazlitt, a writer of standing, I believe, and is called, "Will Dollars Save the World?" I am reading from page 18:
When a currency is over-valued ... it produces a chronic surplus of imports over exports. The over-valuation of a nation's currency makes imports cheaper than they would otherwise be in the terms of that currency. This naturally encourages people in that nation to increase their purchases of imports. The over-valuation of the currency tends, on the other hand, to make the prices of that nation's exports high in terms of other currencies. This discourages other countries from buying.
I wish to interject here a remark about Bretton Woods, because I may forget to say

it later. I have no apology to make for having voted for Bretton Woods, because I thought two years ago we were entitled to believe that recovery might proceed at a different pace from what it did. I would point this out, that at the time we voted for Bretton Woods what we feared was everywhere competition in depreciation. But what have we got? We have not got that at all. We have competition in appreciation, because nations have been so keen to have goods from the United States they have appreciated their currency and, in some cases I believe, very unwisely.
Then, to continue my quotation:
Suppose, for example, that a French brandy sells in Paris for 1,200 francs a bottle. The black-market rate for the franc is about 280 to the dollar as this is being written. Let us assume that in a free market the franc would sell a little higher-say about 240 to the dollar. At such a rate the brandy could be bought for $5 a bottle in American money. But the official rate for the French franc, which the American importer is now forced to pay, is 119 to the dollar. This means that the brandy must cost him more than $10 a bottle. The arbitrary exchange rate enforced by the French police raises the price as much as would a 100 per cent American import duty (on top of the duty that we actually impose). And this applies to every French import to this country. Is it surprising, apart from any other factor, that France is exporting so relatively little to us?
I said at the beginning that this measure of control is complete, final and absolute. We shall continue to have the forms of freedom in business, just as they had it in nazi Germany under Schacht, but we shall increasingly lose the realities.
It is obvious, of course, that this is a socialist measure. They are entitled to believe in a completely planned economy. Once started, it will be terribly hard to control it. There is a tendency for it to go on. In my opinion there is no reason whatever to believe that it will end in any near future.
Having regard to this socialist aspect, I should like to read a brief extract I ran across in a socialist paper, the New Statesman. The article by Mr. Vallance was headed "Plans for the Planners." Here is a man who has the courage of his convictions in a big way. He says:
With every step which the government is compelled to take in the direction of operational planning, it will become progressively more advisable, indeed imperative, to extend the sector of nationalized industry. This is the inescapable consequence of the sort of planning which as a nation we cannot avoid taking and which cannot be halted half way.
Then there is this closing sentence which I think everyone should consider and ruminate upon:
Who rides a tiger must never dismount.

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Paul Joseph James Martin: They dismounted in Prince Edward Island the other day.


James MacKerras Macdonnell: Now, now; we do not begrudge the minister his little triumph in a small province. But the great question is: What is going to happen with the big issue? If we are right about this bill the minister will have a good many headaches before he is through with it.


Clarence Decatur Howe: I knew that was what you were worrying about.


Mr. POULIOT:: A tiger for both of you.


James MacKerras Macdonnell: I sympathize with you, but I sympathize still more with the people under your control.
Mr. Speaker, I am just through-


Clarence Decatur Howe: And no solution.


James MacKerras Macdonnell: As I said, this is a preposterous bill and it should not pass parliament unless it is radically altered both as to its powers and the other provisions. We in this party will vote against it here and in the constituencies until the day comes when sanity returns and these arbitrary powers are taken away.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Major James William Coldwell: Mr. Speaker, this afternoon we listened to the Minister of Finance (Mr. Abbott) and the hon. member for Muskoka-Ontario (Mr. Macdonnell) discussing one of the most important bills that have been placed before this house for many a long day, a bill which, with all its powers, is perhaps necessary in some respects in order to protect the Canadian people at the present time.
If I may make a first criticism of what has been done I would say that the steps taken by the government to protect the Canadian economy in the present adverse exchange situation were taken too late. Had the government taken some steps earlier-and I shall have more to say on this later on-we might have avoided the necessity of seeking a credit of S300 million in the United States.
May I at once associate myself with what the Minister of Finance and the hon. member for Muskoka-Ontario said this afternoon about the impropriety of attacking in this house the permanent officials of Canada. Both hon. gentlemen quite properly warned the house that this should not be done because the men so attacked are not responsible for
government policy. Their advice would be tendered to any government, and the government itself must decide whether to accept or reject that advice. Consequently the officials should not be criticized in the manner in which they have been for tendering the advice which the government seeks.
The bill, as I said a moment ago, is a very important and drastic measure for peacetime. Yet if we look back to 1943 and 1944 it was obvious that many of the steps we took then to protect Canada's economy in wartime would have to be taken in order to protect our economy in the post-war period. I think the government was ill advised to remove controls as rapidly as they were removed.
We have a number of prohibitions in this bill. I do not want to labour the point, but in my opinion those prohibitions and quotas should have been accompanied by measures of control, control not only of the goods imported under quota into our country but of goods of the like class or kind produced in Canada, whether prohibited entry or coming in under quota. .
The bill was attacked by the hon. member for Muskoka-Ontario this afternoon on the ground that it conferred arbitrary powers on the government. It does confer quite arbitrary powers. But may I point out to the hon. gentleman and to the house that his whole speech this afternoon was, in my opinion, a request for the continuation of arbitrary powers in the hands of irresponsible and private persons, in the sense that they are not responsible to the people of Canada? I would much prefer, if we are to have arbitrary and emergency powers conferred at all, to have them placed in the responsible hands of the ministers of the crown, who are in turn responsible to parliament, as parliament is responsible to the people of this country. Consequently I cannot agree with the criticisms that were made of the measure from that point of view by the hon. member for Muskoka-Ontario.
As far as the devaluation of the dollar is concerned, I think our views are well known. Right from the outset we took the position that the devaluation of the dollar at this time would involve an added burden upon the mass of consumers in this country, and I think the hon. gentleman who spoke this afternoon recognized that when he said that a 90-cent dollar would cause a lot of unpleasant things. These unpleasant things, Mr. Speaker, would have been felt mainly by the consumers of Canada through still higher prices for many of the goods they must use.
There can be no question to my mind that the prohibition of the importation of luxury
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goods under the circumstances which this country faces and the curtailment or even the prohibition of luxury travel are two necessary steps to protect the Canadian dollar position at this time. But whatever may have been necessary, it should not have involved the prohibition of what we consider to be essential health foods or essential household commodities. Many of the goods prohibited or placed under quota are goods to which we have become accustomed in our homes as necessities rather than as luxuries, and to my mind the prohibitions in that field are much too wide.
Again, may I say that in spite of what the minister said this afternoon I think it was a mistake that we invoked the non-discriminatory clause of the Geneva treaty before we had to bring it into effect in 1948. Indeed, even then we do not have to bring it into effect because, if the conditions we face today in Canada continue, we can, with the consent of the other signatories to the treaty, extend the time further before we need to put that clause into effect. So the principal criticism that one is inclined to level immediately against the policy of the government in regard to these prohibitions and the use of this clause of the treaty is that it was invoked when it was unnecessary, in the second instance, and that the prohibitions and quotas were not accompanied by any attempt to control prices.
A further weakness with which I shall deal later is this. We quite overlook the fact, if we are going to place power in the hands of a minister to develop and plan the Canadian economy, that we must consider the effect upon our economy of those great monopolies and cartels which play such an important part in the economic life of all countries and to which Mr. McGregor, commissioner in charge of the Combines Investigation Act, referred in the report he submitted to parliament some time ago. Canadian Industries .Limited, for example, controlled as it is by two powerful international cartels, du Pont de Nemours and Imperial Chemical Industries, can do a great deal to prevent the minister and the government and parliament from putting into effect policies which are essential to the welfare of Canada at this time.
When the speech from the throne was read by His Excellency the Governor General I had hoped that in it there might have been, in view of the McGregor report, some reference to legislation that might be brought down to meet the needs of this country and to prevent the exploitation of our people by some of these great monopolies and international cartels. Until we are prepared to deal with that problem, and deal with it quite thoroughly, many

of the powers placed in the hands of the Minister of Reconstruction and Supply (Mr. Howe) to develop the economy of this country may be nullified by the activities of such organizations as I have mentioned.
Bill No. 3 clearly envisages the integration of our economy more closely with that of the United States. That, I believe, may prove, on a short-term plan, beneficial to a number of our producers, and we welcome some of the tariff cuts which will benefit some of the primary producers of our country; but in spite of the short-term advantages, I am wondering whether in the long run the integration of our economy with that of the United States will prove beneficial to Canada.
As I said a week ago, our economy is largely competitive with that of the United States, and we have been in the habit of trading as a member of the Atlantic triangle. It is true that Great Britain is no longer able to trade as she was before the war. But may I point out to hon. gentlemen that in integrating our economy with an economy which is competitive with ours, we are running grave dangers, and in spite of all that may be said with regard to the difficulties which our best long-term customer has been faced with over the last two years, nonetheless there are signs that the economy of Great Britain is rapidly reaching the stage where I do not think the people who are critical of what has happened there will be .inclined, if I may put it in a slang phrase, to sell Great Britain short.
In the last few weeks I have noticed in the papers some very interesting statistics and statements. If we look, for example, at the New York Times of a week ago, and at the graphs which accompany the article dealing with the British recovery up to that point we find the following:
An indication of the strides made in the iron and steel industry is conveyed by a comparison of the current rate of production with that in 1938. Using the 1938 level as 100, the current output of pig-iron stands at 115, that of steel ingots and castings at 135, cold rolled strip at 307, light rolled products at 142 and steel castings at 159.
And if we look at the figures which probably are more symptomatic of the recovery we find that the figures for coal are very impressive indeed. I am quoting from The Nation:
Since the national coal board took over the mines on January 1, 1947, the total output has been some five million tons greater than in the comparable period of 1946. In the week ending November 8, production was 97 per cent of the 1938 average, though the available working force

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was considerably lower. Since the five-day week was introduced last May, absenteeism has declined and over-all output per man-shift risen.
There we have an indication that perchance our long-term and best customer is rapidly reaching the point where she may turn the corner definitely, and in a few years may be able to resume the trading relationships, not perhaps in the same way, but be able to resume the trading relationships upon which our prosperity has so largely depended.
We sometimes overlook the fact that prior to the war something like twenty per cent of all the goods offered for sale on the markets of the world were bought by the United Kingdom, some of them consumed in her own country, some in fabrication to export and some for re-export, and we were a beneficiary of that system. Yet we find that today the British manufacturers are pointing out to the government of the country that that recovery and that move toward normal trade relationships is being impeded by policies very similar to those which we are putting into effect in our country at the present time.
In the Montreal Gazette of today, December 16, appears a report dated London, December 15, as follows:
British manufacturers, trying to boost Britain's export trade, are suffering from an underlying sense of frustration and increasing uncertainty, a delegation from the National Union of Manufacturers today told Harold Wilson, board of trade president. The delegation showed him the analysis of 1,146 replies to a questionnaire submitted to its membership of 50 trade associations and 4,000 manufacturers in many branches of industry. Most serious problems facing exporters, the report said, were restrictions imposed by foreign, dominion and colonial governments.
Import restrictions in the British commonwealth showed an almost complete embargo in India and Pakistan, and there were long lists of widely varied goods which could not be sent to Australia, New Zealand, Canada and South West and East Africa.
Except for restricted classes of goods, similar difficulties were being encountered in Belgium. Denmark, France, Greece, Holland, Norway. Portugal, Spain and Sweden.
Manufacturers were also finding difficulties in exporting to the United States and South America. Middle East. Egypt and Turkey all were reported difficult or impossible for a long list of goods.
Then this significant paragraph appears:
The National Union of Manufacturers recommended that "The government should regard as its most urgent task the conclusion of trade agreements with foreign countries, if necessary on a bilateral or barter basis, and the arrival at suitable understandings with the dominion and colonial governments, in order that British exporters may be assured of their markets and of their supplies of raw materials."
Then there appears one criticism of the government which I should also read. It is as follows:
The report criticized government bulk-buying of raw materials and recommended simplification of steel allocation to manufacturers.
There we have a statement regarding the trade relationships, and we find this powerful group, still powerful in Great Britain, urging that, if this condition continues, attempts be made to enter into bilateral trading relationships. That is a serious matter, because we realize that Canada in a peculiar way has depended upon a different sort of relationship. The very phrase I used a few moments ago, the "Atlantic triangle" indicates that we were once able to sell vast quantities of goods to Great Britain and buy vast quantities from the United States, and to have a deficit on our account in the United States and a credit in Great Britain, and the credit in Britain wiped out our deficit in the United States. Therefore, when we see our own country moving in the direction of restrictions, I say this is unnecessary at the moment because the non-discrimination clause of the Geneva trade agreements should not, in my opinion, have been put into effect until it was quite necessary to do so. Our dollar position gave us the right to forgo that until at least January 1. 1949. and even beyond that with the consent of the signatories to the treaty.
What I wanted to say particularly tonight was this. The whole program of the government can be made ineffective if we allow the powerful interests in our country-I call them irresponsible interests-who have an arbitrary power of which the hon. member for Muskoka-Ontario complained, to continue to exercise that power. The McGregor report indicated how that power was exercised in Canada. I hope all hon. gentlemen have read the report. Just over four years ago, during the war, when we in this party pointed out how these powerful influences were being strengthened in our country, we were taken to task by various members of the house and were asked again and-again what proof there was of these statements. We used to go then for proof very largely to the United States, but today all we have to do is to read the official report submitted to the government by Mr. McGregor of the combines investigation organization to find that proof-reports submitted at the request of the government.
It seems to me that if we are going to achieve what the government hopes to achieve under the plans for the development of our economy there is one thing more that should be done, and that is there should be a thorough
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investigation into the control of powerful segments of the Canadian economy by monopolies and by international cartels. I would go as far as to say that it warrants the setting up of a royal commission before which witnesses could be called and the officials who are responsible for the enforcement of the Combines Investigation Act could appear.
In my opinion the organization enforcing the Combines Investigation Act is entirely inadequate to meet the task. When we have spoken of monopolies sometimes in this house we have heard the comment, as the hon. member for Lake Centre (Mr. Diefenbaker) interjected the other day, "Why don't you lay a charge in the courts against one of these monopolies or combines?" That sounds all right in the House of Commons; but, as hon. gentlemen know, no individual member of this house would stand very much chance of laying a charge against one of these powerful monopolies because it would ruin him financially and the monopoly could hire the best legal talent in the country in order to defeat the objective one had in view.
We are prohibiting, for example, the importation of radios into this country. I will give a personal experience of mine during the last few days. I happened to be in a large store in this city last Thursday, and on the counter I saw a portable radio similar to one which my wife has, which was given to her as a present last summer by a doctor friend in New York. I brought that radio back and when I was going to do so I had to ask what my friend had paid for it. He told me $96, so I declared that value, and last Thursday I saw in the local store in question a radio exactly like it, made by the General Electric Company. I went up to the counter and said, "That is a very nice radio; what is the price of it?" I was told the price was $197 plus the new excise tax, bringing it to over $240.
The radio industry in this country is a highly protected one, not highly protected merely by the tariff authorized by this parliament, but protected on account of the patent arrangements and the other factors that enter into the making of radios. The radio may be said to be a luxury. I do not regard it as such, especially in many homes where there is someone in the family unable to get out. Under those circumstances it is not a luxury. But if we regard it as a luxury, then I say there is a group of people who are controlling the patents in this country and who today are going to be still further protected because we cannot import radios from the United States.
It is quite probably true, as the Minister of. Finance said this afternoon, that the

number of importations during the past twelve months was very small in comparison with the number of radios manufactured and sold in this country, but there is a concrete example of exorbitant Canadian prices. Then we come to fertilizers, and very necessary drugs and medicines as well, and so on, manufactured by Canadian Industries Limited.
Canadian Industries Limited, as the McGregor report well points out, is under the control completely of two great international monopolies which have formed an international cartel. I refer, of course, to d>u Pont de Nemours and Imperial Chemical Industries. Mr. McGregor brings evidence to show that this cartel allowed Canadian Industries Limited to be set up, but set up for Canada only, and the company organized for Canada is forbidden, except under express permission from the parent companies, to export some of the commodities which it manufactures. Yet we find the government saying that this measure, Bill No. 3, is designed to increase our exports in order that we may get dollar exchange.
The same thing applies to electrical supplies. During the war we did develop a fairly substantial export trade in various electrical devices made in this country; but if we look at the figures over the last year and follow the speech made by the deputy minister of trade and commerce recently, we find that during the last year electrical equipment from Canada for export has fallen to a very low level indeed; that, again, because electrical supplies are largely under the control of a monopoly and are linked up with a great international cartel.
And so I say to the government tonight that if we are to benefit at all from prohibitions which involve great sacrifices on the part of the Canadian people, if the Minister of Reconstruction and Supply (Mr. Howe) is to carry out the provisions of the bill which foreshadow the building of the Canadian economy along a new and perhaps stronger line, then we have to deal with the control of our economy by these monopolies and cartels. During the war the Minister of Munitions and Supply, now Minister of Reconstruction, in reply to me, said that he was engaged in fighting a war and that at that moment he was not interested in dealing with monopolies and cartels. Well, the war is over and here we have a bill before us ostensibly designed to foster the Canadian economy, to foster the building of various types of supplies and equipment in our country for export. And we find in the McGregor report-it is not a statement of mine but is found in the

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McGregor report-evidence to prove that the Minister of Reconstruction and Supply may be checkmated in any efforts he makes along the line which the bill visualizes.
I say to the government that the time has come when there should be a thorough investigation into the operations of these large cartels and organizations within our own country. A cartel is, of course, an international organization; but we have parts of these cartels in the form of various nation-wide, monopolistic industries in our own country, and it is with those that we can deal. I quite agree with what Mr. McGregor says regarding international cartels, namely, that they will have to be dealt with probably by international action. Nevertheless we have the opportunity within our country to deal with some components of these organizations in our midst. So I say to the government that if the sacrifices of the Canadian people involved in this particular measure are to bring results to us, other action must be taken than that which is visualized in the bill.


Mr. McIVOR:: If I may, I should like to ask the hon. member a question.


Major James William Coldwell: Yes.


Daniel (Dan) McIvor: Is the Minister of Reconstruction and Supply (Mr. Howe) not the same minister who carried through the program during the war? Does the hon. member not think he will carry the program through to the same state of completion, without any question of dishonesty or expense to the people of Canada?


Some hon. MEMBERS:: Oh, oh.


Mr. COCKERAM:: No, not without
expense.


Major James William Coldwell: That is entirely off the point, Mr. Speaker, because I made no suggestion of that, sort with regard to the Minister of Reconstruction and Supply, and I would be the last one in the world to do so. I made no suggestion that there would be any personal dishonesty in connection with his administration, and I made no suggestion that the hon. gentleman was not a highly efficient and energetic minister. What I am saying is this:	No matter how honest,
efficient or energetic a minister may be-


Stanley Howard Knowles: Or how optimistic.


Major James William Coldwell: -in the economy in which we are operating, the very best efforts of such a minister may be defeated by the great monopolistic industries with which he has to deal. That is the point I was making and I would not wish to be misunderstood in that connection.
Here we have the report to which I referred, "Canada and International Cartels, an Inquiry into the Nature and Effect of International Cartels and Trade Combinations." Everything I have said tonight can be found within the covers of this government publication to which I have referred. So I wanted particularly to emphasize this angle.
Before I conclude my remarks I want to say that, in my opinion, the government must do more than prohibit and must do more' than put Certain supplies under quota. In my opinion the government must see to it that the people of Canada who are denied access to goods are not exploited by groups, of arbitrary interests that operate within the borders of our own country.
We are up against these difficulties. This afternoon the minister spoke of the necessity, of getting steel. Why do we not develop, our steel industry to a greater extent in our own country? For example, we find that Canadian manufacturers have been held up and handicapped by a lack of steel. Yet what are we doing? We have a great development at Steep Rock where some of the finest iron ore on the continent has been mined. All that iron ore goes to the United States. Yet we are busily importing iron ore from the United States. We send iron ore over the border at one point and bring other ore back over the border at another point. Our railways and our steamships could bring our own material from Canadian mines just as well as-material can be brought from United States^ owned mines in the state of Minnesota. So-if we are going to plan our economy to any degree, we should do it in order to build our economy upon our own resources as nearly as we can.
Consequently, Mr. Speaker, tonight I wanted' to say what I have said regarding the-dangers inherent in this bill, dangers which' are quite obvious to everyone who under-stands what these prohibitions and quotas' mean, unaccompanied as they are by any attempted control of the great monopolistic industries within our own country which are part of international cartels, and unaccompanied by any effective price control of the commodities of a similar nature which axe produced within our own borders.
Mr. SOLON E. LOW (Peace River): It has been encouraging to me at least, Mr. Speaker, to. listen to the two speeches that were made this afternoon and evening, or perhaps I should say the one this afternoon and the part of the one just concluded this evening which I was able to be present te hear, because both speakers said much with,



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which 1 and my group are entirely in agreement. I am happy to see the mentality developing which says that Canada must become more self-sufficient. That is something which this group has been advocating for a good many years; and that is one of the big reasons why so many people have said to us, "You are nothing but narrow nationalisrts". I should just like to point out that the events of this day and age are forcing Canada, along with most other nations, into a position of selfsufficiency in the essentials at least. I am happy to see that that necessity is being recognized, and that steps are being taken now to start Canada upon that road.
II should like to comment just briefly on ttihe speech made by the hon. member for Muskok a

0 n t a r i o	(Mr. Macdonnell) this
afternoon. I thought he made an admirable presentation of his case. I also thought I should like to have heard him give just such a speech as that in this house back in 1945, when this little group was battling the whole ipuse on Bretton Woods. It would have been ;a splendid contribution to our battle then. I ^should like to say !o the hon. member for Rosetown-Biggar (Mr. Coldwell) that those wbo voted for Bretton Woods in 1945 did their best to tie Canada inescapably to the most-favoured-nation or non-discrimination clauses in trade treaties, a thing which has brought us into the mess, or at least is partly responsible for bringing us into the mess we are in today. I must say, of course, that I agree with the hon. member for Rosetown-Biggar that in our efforts to make Canada self-sufficient we must watch that we do not come more under the control of cartels and combines. That is something the government must fight, and some program will have to be laid down which will prevent further encroachment by combines and cartels.
We have before us, Mr. Speaker, the' so-called austerity program of the Minister of Finance (Mr. Abbott) to restore the balance of trade between Canada and the United States. The imposition of sweeping restrictions concurrently with the announcement by the government of tariff reductions should bring right home to all Canadians the utter futility of the attempts currently being made to bolster up an economic system that has already given us two world wars; that has already given us economic collapse and depression, a series of revolutions in the world, and the state-dominated systems of control which have led to various forms of totalitarianism in other parts of the world.
The British people have been inflicted with austerity Strachev, austerity Shinwell. aus-
(Mr. bow.!
terity Dalton, and more recently austerity Cripps. From what I read the Australians have been groaning under the directives, so-called, of austerity Chifley. President Truman evidently has put on the garb of austerity'; and now Canadians have been introduced to austerity Abbott. Austerity seems to be the order of the day; it is quite evidently a universal practice. One contemplating the whole trend of affairs the world over is induced to ask this question:	Who is it that is imposing this policy on the world? We must remember that policies are made by men; there is no escaping that. They are not natural phenomena; and I must say the speech of the minister this afternoon failed to convince me, at any rate, that this worldwide policy of austerity is merely the natural aftermath of the war. That was the burden of his whole message, and from his point of view and that of the government 1 must say he made a pretty good case of it; but I must repeat that he by no means convinced me. I say' that, two years after the war, to plead that what we face now is all due to the havoc of war is not even a plausible explanation.
We all remember that before the war the biggest problem confronting nearly every country was what to do with its abundant production. In their frantic efforts to dispose of their abundance crops were plowed under; food was destroyed; production was restricted, even to the point of paying people not to produce, and industry all over the world was sabotaged. Then came the war; but with depleted manpower in practically all the nations engaged in the war, the abundant production resources were released to the full, arid most countries produced almost unbelievable quantities of goods with which to spread the destruction of life and property.
I think we must all agree that today, more than two years after the cessation of hostilities, farmers could be producing more, and that industry could be producing more. Greater production could be the order all round; but in our country if they do produce more they are penalized bv heavy taxation. That is the reward they get. As a consequence, the production of food on the farms in Canada is certainly lagging seriotisly. In industry it is quite apparent that real wages have been reduced by an inflationary condition brought about by policy and nothing but policy. Hence there has been industrial strife which has led to the restriction of production. I sav, too, that initiative and incentive in alt fields of production have been effectively stifled in this country. That is a serious matter, because we know we cannot possibly

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open wide the floodgates of production if incentive and initiative are destroyed. Those are iwo necessary ingredients in the character of men if we are to have abundant living.
To the ordinary man in the street it would seem that those in control of the whole situation are determined that there is to be no problem of poverty amidst plenty in this post-war period. They appear to be taking right good care that there shall be no plenty. That is the way it looks to the average man in the street. The Minister of Finance pleads, and I suppose rightly, that he is confronted with a growing adverse balance of trade with the United States. We all recognize the seriousness of that situation; but ordinary reason and common sense, and I suggest even an elementary knowledge of economic realities, should tell the minister that the way to solve the problem he faces is to render Canadian production so abundant and Canadian goods so low in price that Canadians will buy more of their home-produced goods and therefore less United States goods.
But that is not the way he is setting about this business. The government seems to be taking just the opposite course. At the same time I suggest that Canadian producers should be encouraged in every possible way, not only to produce those things Canadians want, but to find out what goods our United States friends want. Then they should set about to induce the production of those goods Canada can produce more efficiently than our friends in the United States can produce them, so that we may use those things to pay the United States for the things we cannot ourselves produce and which we must import from that source.
Bill No. 3 forms an integral part of the government's program to meet the dollar crisis. Therefore it must be considered along with the other measures; the Geneva trade agreement, the modification of empire preferences, the imposition of new excise taxes on certain domestic and imported goods, and the subsidy on the production of gold. The minister said that in so far as these measures are restrictive they are temporary. Well, let us pray God they are temporary, but I believe the minister knows very well they are not. We were told by this government that the wartime tax agreements were temporary. At the time those agreements were proposed to the provinces I said I would bet my shirt, the last one I had, that they would be made permanent. I will not bet my shirt now because, with the shortage of cotton, I would not be able to get another. We were told also that the huge bureaucracy which was installed by this
government during the war was temporary; but where are they? They are still with us. And we were told that wartime controls and the heavy burden of taxation were to be temporary. Well, somebody seems to have other ideas. I should like to find out just who that somebody is, or who those somebodies are. That is why I am very much interested in having the fullest possible investigation of all these measures in order to determine just who are imposing their will upon the Canadian people against the wishes of those people.
I grant, Mr. Speaker, that the government requires temporarily-and I emphasize "temporarily1'-to prohibit and restrict certain imports from the United States and other dollar countries. We support their doing so at this time to prevent the further dwindling of our dollar reserves; but we do urge a most careful selection of the prohibitions, so as to ensure for Canadians an adequate supply of green vegetables and fruits, and the other necessities of life. We must see to it in committee that these things are carefully screened out, and I, for one, propose to use the utmost vigilance in .behalf of the people of Canada.
We object to granting the minister these authoritarian powers as indicated in section 6 of the bill. We do not think for one moment that such powers given to any man could possibly inspire confidence in producers and businessmen to do their utmost to produce the things we need. If we are to meet the crisis before us we must inspire confidence and must induce the businessmen of this country to have confidence in the ability of the government to give wise leadership and direction, but to keep their fingers out of the pie. .
We object to the imposition of new excise taxes. They are an integral part of this whole problem. The minister this afternoon certainly failed to convince me that these taxes were at all necessary or at all wise. We object to them because they are inflationary and they will inevitably push up prices and add materially to the cost of living in Canada. We object to them also because they will discourage production and will dislocate already established business and industry. These taxes, may I point out, are only one of the penalties that Canadians are now called upon to pay because of this government's devotion to the Bretton Woods abomination and the most-favoured-nation or non-discrimination clauses in trade treaties.	*>
And finally may I express the objection of this group to the government's undue emphasis upon the need of bringing up Canadian production of goods for export to the United
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States, market. I say "undue emphasis". We take the stand that the production of all kinds of goods and services ought to be encouraged [DOT]for the good of the Canadian people, first, and [DOT]that trade should follow and not precede the filling of our own people's needs first.
"We suggest'that this bill should be sent to the committee on banking and commerce, and that every possible opportunity should be given there for the most thorough investigation of the government's whole program. We shall oppose the second reading of the bill.
Some hon. MEMBERS:: Question.


Arthur Leroy Smith: Mr. Speaker, I shall not delay the question period very long. However, this matter is one of great importance and I feel my limitations in speaking to it at all.
I am sure anyone who read the Geneva trade treaties, irrespective of how used he may 'have been to interpreting documents, has at last found one in which in respect of each clause there may certainly be more than one interpretation. However, today for the first time we heard from the Minister of Finance (Mr. Abbott) an explanation of what certain items in the schedule mean.
I knew while I sat in my room, before coming down here-and we know that the boys were out telling us that we were going to hear a wonderful speech; not that he does not always make wonderful speeches-that great pressure had been added in the last few days in respect of this matter. I noticed that the government, artists as they are at stage-setting, turned loose the bells up in the tower just before we came down to the chamber, and from the cacophony of noise that came from those bells I was at last able to distinguish a dime. I believe that tune is called the "Floral 'Dance." It deals with a dance in a quaint old 'Cornish town-as you know, sir, "Fiddles, ''cello, big bass drum" and all that sort of thing. But I rather thought that, having heard the big bass drum this afternoon, before any of us spoke we would have heard the euphonium who is absent from his front-row seat here tonight.
Going farther back in my memory in respect of that song, I then understood why that particular piece of music had been played today. I believe the answer is that it is so Illustrative of the government's position in jumping from crisis to crisis, until we have ended up where we are, in a very serious position. I remember that the two last lines *o:
Dancing here, dancing there;
-Jiggling, joggling everywhere.
[DOT]	fMr; Low.]
And this is the biggest jiggle and joggle we have ever seen in this chamber.
I have no intention of covering generally the ground covered by my deskmate, the hon. member for Muskoka-Ontario (Mr. Macdon-nell). But before offering such criticism as I may have, and the constructive suggestion I shall make, I should like to comment briefly with respect to the two last speeches to which we have just listened.
As to the last one: It was short; it was sound and to the point.
I confess quickly that the hon. member for Rosetown-Biggar (Mr. Coldwell) made an argument in favour of socialism, of government ownership and of complete control- because that is what state socialism is. That is the type they believe in. But nothing new came from his speech, except this: I want to assure the hon. member that if he has in mind any cartels or monopolies in Canada which require investigation, I do not think he will find anyone in the House of Commons who would oppose any such investigation, upon reasonable evidence being placed before the government. I am sure that would be the attitude of the government.
I believe it was last year when an amendment was put through at the suggestion of the hon. member for Lake Centre (Mr. Diefenbaker). The answer to that now is, "Well, a private member has not the money to fight a corporation, with all its wealth and with all its very learned counsel." I am glad to know that if counsel are really learned they are expensive, because that is the way our economy works. If you want those luxuries, you simply have to pay for them. But I think his laughing the thing off and putting it on a money basis is without justification. Because it is still true in this country that if one lays a criminal charge-and this is at least quasi criminal-there are sections of the criminal code which deal with conspiracy which are almost word for word with sections in the Combines Investigations Act. Thank God we live in a country where a man who lays a charge does not need a lot of money, because in all our provinces the crown takes care of all prosecutions of that kind. So that is the answer to that portion of his speech.
I intend to say something about the excise tax and I begin with a concrete example. In the city from which I come there is a man who manufactures casings for refrigeration equipment. I may say in this particular case not only did I wire the Minister of National Revenue ('Mr. McCann) but I also saw the Minister of Finance (Mr. Abbott) a few days ago, so that before bringing this matter up

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in the house I want you to know that I did go through those motions, and the individual of the small concern involved also wrote to the deputy minister of national revenue.
These are the facts. It is a small company, with $9,000 capital. They manufacture casings for refrigeration equipment, and they buy the equipment. They bought, with assistance from their bank, $9,000 worth of equipment in Los Angeles. That equipment arrived in Calgary on the day of the evening on which the Minister of Finance spoke. That equipment was in the Canadian Pacific Railway freight sheds at three o'clock in the afternoon of that day. The railway communicated with my friend and he communicated with his customs broker, but it was then too late to have clearance made. Remember, there was no idea that this thunderbolt was coming. He went the next day to get his equipment, *which was in Calgary, which had been paid for, and which under tentative arrangements had been sold to customers, and he was told he could get it only when he paid this new tax of $3,000 on the equipment, then lying in the freight sheds in that city.
Somebne might say:	"Why not do that
and dispose of the stuff?" The answer is this, that the tentative customers said, "We are not going to pay this excess price now, because the government have announced that these stringent measures are merely temporary. He cannot send the equipment back. It is paid for, and he has not got $3,000 to pay the duty. If he did pay the duty he probably could not get his money back because he might not be able to sell the equipment.
I oouple that with this. I have in my hand a document headed "Memorandum Circular", and this is how it reads:
Memorandum Circular
Series D No. 47 T.C. 242 No. 898-C
Department of National Revenue, Canada (Customs and Excise Divisions)
Ottawa, 18th November, 1947. To Collectors of Customs and Excise:
Resolutions affecting the Excise Tax Act and the customs tariff.
You were wired this date as follows:
I want the house to get this:
"Until further instructed take all customs and excise entries presented on and after eighteenth instant subject to amendment stop notify outports by wire."
The following are the provisions of special resolutions affecting the Excise Tax Act and the customs tariff, to be introduced in parliament at the coming session.
Please note particularly that these resolutions are effective today.
In the sohedule on the back my friend in the refrigeration equipment business finds a place in the second or third paragraph. In simple language what does that mean? It means this, that the government of this day are collecting excise taxes from people in Canada without one scrap of authority to do so.


Douglas Charles Abbott: That is done every year when the budget is introduced.


Arthur Leroy Smith: I will deal with that now, since the minister has interrupted. The budget is introduced in parliament, and by usage over the years that practice has been adopted. But if you can do this on the 18th of November you can do it in July, six months henee when the house is sitting. What the minister is now saying is that he has the right to tax the Canadian people without consultation of parliament because there are the taxes imposed now without parliamentary authority.


Douglas Charles Abbott: I do not like to interrupt my hon. friend but I know he wants to be fair. I say I am not claiming the right to tax the Canadian people. It is nothing more than a notice that that tax will be imposed if parliament, approves, and if parliament refuses to impose it nobody is- under legal obligation to pay the tax today until parliament does approve. - But I have notified the Canadian people, as is done when the budget resolutions are tabled, that I shall ask parliament to make this tax retroactive to the 17th day of November, when I gave the notice.


Arthur Leroy Smith: The minister's statement is accurate even to the width of a gnat's eyelash; it is that thin. But the fact does remain that you make your budget speech statement to 245 members of parliament, and you do not, you never have, and I think you never will again in this way place a tax on the Canadian people which they must pay-do not let us get away from this-before they can get the goods. The man must pay the tax before he can get the goods. You may refund it later, but he pays the tax, and he does that under the directive which I have under my hand and which I have now put on Hansard.


Mr. ROWE:: Put on another tax on New Year's eve.


Arthur Leroy Smith: That might be a good idea.
I turn to another aspect of this matter and wish to say something in more general
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terms about this excise tax. As I read the Geneva trade agreement, while I may say that I am very far from putting myself forward as an authority on what some of these clauses mean, for frankly I do not know what many of them do mean, nevertheless this agreement is a splendid thing because it shows an effort at least of so many nations to get together. I think we all must say that. The nub of the thing or the skeleton of the thing is this, that it is merely an agreement to attempt to do something. I say that without criticizing any of the men who were there because I know that in this house we have difficulty sometimes in getting together a large committee, and it might be more difficult when you have twenty-six nations gathered together at Geneva. That was the number, if I remember correctly.
In addition to that, we have this excise tax. We have put a twenty-five per cent tax on certain articles, many of them articles which, as the hon. member for Muskoka-Ontario said toda.v, are regarded as necessary when people are setting up housekeeping; an electric refrigerator, for instance. Personally I do not believe in them; I use the old ice box so that I can let my friends have ice when they are having a party. But most people use electric refrigerators and equipment of that kind. Are we not in this position? Up goes the tax; up goes the price. If people pay the price the cost of living increases, and in the broader sense, not in the technical sense of the word, you have inflation. If they refuse to pay the price, then you have deflation and loss of jobs. The thing must go one way or the other with substantial increases of that kind. I hope the people buy them because I know that if it goes the other way, even in the small place in which I live, many people will be out of work.
I said in the beginning that I had a suggestion to make. It follows somewhat the idea advanced by ihe hon. member for Peace River (Mr. Low), and it is this. We have heard of many ways of equalizing this dollar situation, but we are wasting our time unless we have a long view and are able to find methods, not only to cure this crisis, but also to see to it that a similar one does not come ten, fifteen, twenty or thirty years from now. I do not think the problem is so much imports from the United States to Canada or exports from Canada to the United States as it is the proper use of the natural resources of this country which will produce those things now imported. In other words, if you get rid of the necessity of buying that dollar, the method

does not matter much. The internal development here is not only the logical way, but the way most likely to succeed.
Let me put it in this way. If down here you are drilling an oil well-and I hear you are drilling one near Owen Sound-for every barrel of oil they get out of that well they save the payment out of three United States dollars. I give that just as a sample of the thing I am going to try to talk about. In western Canada, and particularly in the province in which I live, we have for a good many years had some oil. The development in the last two years in connection with that industry is simply amazing. At the present time on exploration-and I do not mean exploitation; I do not mean the production of it-those parties who are out seeking oil are spending a million dollars a month, and that is being spent largely by companies from the other side of the line. We have Turner valley which, in spite of what you may hear, is a large oil field, compared with any other place. An oil field is not much use. What you need is oil fields, the plural, and plenty of them. What has happened there in the last year? Here we have Turner valley down by Calgary. Two hundred miles almost straight north of that, a little bit west, perhaps, we have now found the Ledue field. I know we hear the Imperial Oil called a monopoly, but I am very glad that the Imperial Oil found it. They spent $23 million of their own private enterprise money, no government's money, before they got a dime back out of this Leduc field. The government of the province has received S16 million by way of royalties from the oil produced in Alberta on the basis originally of ten per cent; now it is 12J per cent. To date S166 million have been spent, and to date $156 million have come out of the ground. Therefore the industry today stands in the position of having a $10 million deficit.
Up to a few days ago, of twenty-nine completed wells twenty-five are oil wells. The field has been gradually extended fortunately by some smaller and private companies, until the estimate today, conservatively made, is this. From present development that field alone can produce a hundred million barrels of oil, and that, as they say in the backwoods where I come from, "ain't hay". Any field that will do that is a reasonably good oil field.
I want you, Mr. Speaker, to get this picture. Going east from there 125 miles we come to the Lloydminster area which is on the boundary between the two provinces. We have there now a refinery, and they are producing this heavier oil which you people who are threatened every year with being frozen to death, because you have no coal, are so anxious to

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get. In fact somebody told me the other day, and I think it is true, that John L. Lewis was the best salesman for fuel oil that the world ever saw, but that is the situation in which you find yourselves. Go south from there into the Brooks area and we have another new field developing. We have had water trouble, but the last well at a little place just east of Brooks called Baintree has not got it. Then go on south to Taber and you will have a little trouble with water again. But the point is this. The oil which we are now finding is in the Devonian limestone. It is not in the Madison lime, which is Turner valley production.
Take a look at the map of North America. Down east you have Texas, Oklahoma and Montana; you have oil at Fort Norman, and it runs pretty well along that line. Now, two large and three or four small fields having been developed in that tremendous area and from this new producing formation, anyone can see that the time is not far distant when that will be of tremendous good to the Dominion of Canada. We must always remember this. I am going to say a word about coal, if I can get it in, in time. But I will say this; oil is something on which we do not have to pay high freight rates, nor is there an expensive haul from the west. Oil is carried in pipelines. The upkeep on the line is not costly. All you need is a few pressure stations along your line. The oil is of a quality which will not thicken to the point where it will not run, except at Lloydminster. Therefore we can visualize something there.
Hon. members may say, why mention that? What can we in this House of Commons do about it? The only thing I am asking the minister to do is not to tax us on a profit until we have made a profit. The minister has done much. Do not misunderstand me. In 1943 he and his department went some distance, but that is not the fact today. And I say to you, sir, with all confidence, that if we are just allowed to run we shall do our duty. We do not want to avoid paying taxes. If we make a profit we want to pay taxes on it, but we do not want to pay taxes on our capital, because we cannot develop in that way. I see a ray of hope in this picture. I believe that even I shall live to see the day when we shall get rid of a couple of hundred million dollars of United States exchange through what is developing out there at the present time.
I wish to say a word about coal. We had a long investigation. I wanted to look up something today but I could not find my volume. We get so many books and papers 5849-24
in the House of Commons that I do not keep [DOT] proper track of mine. But may I make this suggestion. We have had many investigations into the coal industry. I am not criticizing the three fellows who ran the coal commission, but I have been through three or four things of this kind; I have been before royal commissions and so on, before most of these fellows grew up. This is the situation, broadly * speaking. We have never yet had any inquiry with regard to coal which regarded coal as a national asset and as of national use within the country. We have not yet heard any evidence, for example, as to what effect it would have on our railways. If we could but get your market down here the railways could transport our coal and we could choke off the purchase of millions of dollars' worth of United States exchange. I am quite sure that many members who have used our coal simply say, "Alberta coal." You might as well talk about horses. There are Shetland1 ponies, Percherons, Clydesdales, thoroughbreds, cay-uses and fox meat. Why, there are just as many kinds of coal as there are kinds of horses in the province of Alberta. I noticed in the newspapers a few weeks ago that the district superintendent of the Canadian National Railways at Windsor, I believe it wa&-I read it in the Toronto papers-made the statement, with respect to the coal we have in Alberta, that if he put it in his engine he would be stuck before he got it outside his yard. That, jackass does not know that the Canadian Northern, the Canadian Grand Trunk and the Canadian National were burning that coal and carrying heavy trains over mountains before he ever saw a coal bin. Perhaps he was born in one; I do not know.
We cannot have that sort of thing if we are to make Canada a real country, and we must devise some means of doing so. It may be in greater research; it may be in other uses which can be made dominion-wide. But it does seem a strange thing to me that in this country, with fourteen per cent of the world's known resources in that province, we cannot supply you. Last winter you in Ontario and Quebec were worrying as to whether you would be frozen to death because of a seamen's strike on the great lakes. I remember the minister telling us that he had found box cars and diverted them, but that things would be all right if we were oareful.
Why should that ever happen here when we have so much coal underground there? And do not worry about the quality. Do not listen to the boys who have axes to grind and who tell you that it will not store. You



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see it stored along the railways and in open dumps, as I have done for forty years travelling up and down.
I am afraid I have exhausted my time, but I should like to say a word or two about something else and that is the highly mineralized belt which runs across all northern Canada. I am talking of straight assistance, perhaps by work, perhaps by way of money, and certainly by surveys and that sort of thing, particularly in that portion of the country known as the Northwest Territories, which are wholly owned by the dominion government.
I read in today's paper that the United States was in a position to supply only fifty-five per cent of its lead, for example. There is no question that we have untold resources in base metals, and at the present time we are buying these commodities elsewhere. Surely there is room for immense development there. I am not discussing this Greek formula that was produced for the gold mines, which no one understands. I do not understand it, so I wild not bother about it. I am talking about base metals.
There are two things that attract capital because they have a lure; one is gold and the other oil. A few years ago we read a book dealing with what was referred to as black gold. It discussed the Mexican situation so far as oil was concerned. There is a lure to that metal and that mineral which does not attach to the baser kinds of metals and minerals, and so my thought is this. It is all right to prohibit when you have to; but every prohibition we make, whether it be a mink coat or a double-boiler that some housewife uses in the kitchen, represents a diminution in the standard of living in the country to which the entry of such things is prohibited.
It seems to me, therefore, that the energy, the time and the thought of our scientists, our surveyors, our topographical workers, should be devoted to the expansion of this little strip which is settled along the forty-ninth parallel so as to go into that eighty-five per cent of country which is as yet practically untouched. We used to think years ago that it was so cold up there that no one could live there, but Stefansson disposed of that idea, although I was greatly interested to see in a book published by the Minister of Trade and Commerce ('Mr. MacKinnon) that for the first nine months of this year we imported from the United States $64,011 worth of ice. I cannot understand that. It shows how crazy our economy is. I am not blaming governments but the people for the funny things we do. I also found that we were importing 
telephone poles and railroad ties from the United States. Imagine this country, with railroad ties in almost everybody's backyard and with telephone poles covering our mountains, and yet we are bringing these things in. We might also do without a few live turtles that are coming in at the same time.


An hon. MEMBER:: You have enough crabs on the other side without importing any turtles.


Arthur Leroy Smith: I do not know whether the member makes a proper distinction between crabs on the other side and the lobsters on this side, but we will let it go at that. I suggest, sir, that our energies should be devoted to providing opportunity for our people. There is no use in saying that we can provide security from the cradle to the grave without somebody working and producing 'to give that security. While I do not believe in governments being in business, I believe it to be the duty of the government to provide opportunity for its people. It lies in the west and it lies in the north; and there, if we but do the obvious thing, never in your time or mine, never in the time even of the youngest member here, shall we ever meet again the artificiality of a dollar crisis with the United States.


Mr. W. R. THATCHER (Moose Jaw):: Mr. Speaker, after listening to the speeches which have been made tonight and this afternoon,
I think every member will realize that for many months Canada has been drifting closer and closer to a crisis in our exchange position with the United States. Prior to the war, as the minister pointed out this afternoon, generally speaking Canada was able to make heavy purchases in the United States, and to sell heavily in Great Britain. Great Britain was able to pay us in large part in American dollars which she obtained by selling to the United States or to other countries, which in turn sold to the United States. Canada used the dollars which we obtained from Great Britain to pay our United States friends for their exports to us. This multilateral trade triangle worked quite satisfactorily for Canada.
But unfortunately the war came along, and with it came many dislocations. For one reason or another the British found they could no longer pay us in United States dollars; and for the past two years, to a large extent, the merchandise which we have sold to Britain and other western democracies, has been sold on credit. But we have had to continue buying from the United States in hard cash. Our purchases have increased rapidly. If my figures are correct I believe that since the first

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of the year we have had an adverse balance of trade with the United States amounting to more than $75 million a month. Obviously this situation could not go on, and the program which is before us today is the government's suggestion as to the methods which should be used to remedy our temporary shortage of United States dollars. I think such a program as this was unavoidable; I think it was inevitable; and I doubt if there is any member in the house who will suggest that emergency measures are not needed at this time.
But I think there are many members in the house-who will criticize the government -and some of them have already done so- for having taken so long to bring about these measures. If my information is correct, at the first of this year Canada had a balance of United States dollars of approximately $1,260 million,. By the time the government finally decided it would act on this crisis, our United States dollar balance had dwindled to about $480 million. Surely the government can be criticized for having refused to face up to the realities of this situation. I heard the Prime Minister (Mr. Mackenzie King) the other night say, and I heard the Minister of Finance ('Mr. Abbott) subsequently say, that the government could not act because of the negotiations which were going on at Geneva. I find it hard to accept that statement as a valid reason for not acting. But even if we do accept it at its face value, surely there were many positive steps which the government could have taken many months ago. For instance, if it is feasible tonight to bonus gold, why was it not feasible six months ago? If it was feasible tonight to put on travel restrictions, why was it not feasible six months ago? If it was feasible this week to put on some sort of program for Canadian industries to export, why could we not have done that six months ago? In other words, I would suggest that there were many steps which the government could have taken without harming the negotiations which were going on at Geneva. Certainly in this crisis I think the government can be accused of having given the people of Canada what we might call Chamberlain leadership.


Some hon. MEMBERS:: Oh, oh,


Wilbert Ross Thatcher: The government finally got around to acting, but when they did, it seems to me that they acted without any comprehensive or planned blueprint. On the one hand, they prevented the importation of many articles which were essential in our economy. For example, I believe that certain kinds of refined oils were put on the banned 5849-24J
list. Yet in a few days it was found that those refined oils were needed to turn the' wheels of Canadian industry and the ban had! to be taken off. I am told that a ban was, placed on yeast. In a few days it was found! that a certain strain of "mother yeast" was needed by the yeast companies of Canada if they were to turn out yeast; the ban had to-be taken off. There were numerous articles in that category. Although the program has been in operation for only about three weeks, the government has had to make many changes. On looking over the list, I think there were many things which should have been put on the list and were not put on. such as alcoholic beverages. Perhaps there was a reason; I do not know. The hon. member for Calgary West (Mr. Smith) suggested railway ties. There are many articles in this category. In other words, it would seem to me that when the government did act, it acted without properly studying the lists of articles which would be affected by the embargo.
We in the C.C.F. group, despite the tardiness of the government, despite the lack of planning, agree that some such bill as is before us is unavoidable at this time. But we thinik we see numerous weaknesses, numerous omissions and numerous dangers in it.
Our first criticism is, of course, the fact that, as we see it, it will nullify any trade advantages which might have accrued to Canada from the Geneva agreements. On Tuesday evening we listened to the Prime Minister eulogizing the great horizons the agreements were opening up for Can-adian trade. Yet every hon. member in this house knows that, as long as this bill is law, the Geneva agreements cannot mean a great deal to the people of Canada. As has been pointed out several times today the Minister of Reconstruction and Supply (Mr. Howe) suggested that these restrictions-may last only a few months. I hope the-minister is right, but I am afraid he is wrong. If he is wrong, instead of having freer trade-over the next few j'ears we are going to have.-tra"de which is definitely restricted.
The second weakness in this bill, as we see it, is that it will inevitably mean higher prices and a higher cost of living to Canadians unless price ceilings are reimposed. I think we saw the certainty of this happening when we saw what happened to vegetables after the embargoes were put on. Hon. members will recall that in the Toronto market and other markets, when the embargo was put on certain vegetables such as onions, potatoes, carrots and things of that kind, within a week, although the cost of production had not increased, the price increased by from fifty per cent to

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seventy-five per cent and ceilings had to be reimposed. I suggest to the minister tonight that the sudden reduction of supplies in hundreds of articles from the United States cannot avoid ibeing an invitation to some people to profiteer. For instance, looking at the electric refrigerator situation, I believe that thirty-one per cent of the Canadian supply of electric refrigerators formerly came from the United States. According to the Financial Post of December 6, one week after the embargoes had gone on, one dealer in an eastern Canadian city arbitrarily added $100 to the price of all his stock of refrigerators, even though the excise tax would have taken only $50. This import ban will relieve Canadian companies from United States competition. I think such action may have a very serious effect, particularly when we remember that there are many instances where only one company is making a product. For example, there is only one company in Canada [DOT]which makes sewing machines; I believe there ds only one company in Canada which makes bicycles; and so you could go on. The infla-rfionary tendency is bound to be there if for [DOT]no other reason than the law of supply and demand. Supplies have been decreased. I urge upon the minister tonight the necessity of reimposing price controls on those articles at least which are affected by these embargoes .and restrictions.
In the third place, we in this group would [DOT]suggest that there is a great danger of uneco-momic industries springing up in Canada 'behind the protection of these embargoes. With competition eliminated, I think it is [DOT]conceivable that many lame-duck industries might start up, operate for a year or so, and then come along to the government when the [DOT]embargoes are off and want tariff protection or some sort of subsidy. I think that is a danger which we should not overlook. at this time, because otherwise they may be a burden on it his country later on.
The fourth feature of these restrictions which many members of this group are not keen about is the $300 million loan. In the past, Canada has made many loans, but usually those loans have been used to increase our wealth or to increase our productive capacity. It seems to us that this loan will be used simply to pay living expenses. In other words, Canada will be in a position something like that of a man who goes to a bank and borrows money to keep up a standard of living which he cannot afford. It seems to us that we should pay our way as we go, because this is only going to postpone the day of reckoning. It may be that we have to make the loan; but, if so, perhaps the minister would say why we
{Mr. Thatcher.]
cannot borrow from the international monetary fund, which was set up by Bretton Woods and from which I understand we could borrow up to $75,000,000 annually. I thought that was what it was for.
The fifth thing I do not care very much for in regard to 'these restrictions-and I am speaking personally-is this. Some people wonder why the government has not seen fit to remove the virtual embargo on the export of Canadian beef cattle and certain agricultural products. It has been estimated that about $100,000,000 could be realized in the United States from these sources. In this time of crisis, when we need United States dollars so badly and when the Americans are anxious to buy our cattle, I wonder why we are overlooking this source. There is the further point, as to how long Canadian farmers should be deprived of the benefits of the United States market, where I believe prices are anywhere from one and a half to two and a half times as high as Canadian prices. It is quite probable that if this virtual embargo were lifted or relaxed the British market would be affected. But I understand that at the moment a committee is in Ottawa negotiating for a market in Britain next year; and there is very great danger, I am told, that we may not have this market, or that it will be greatly reduced. In the newspapers of December 9 I read a Canadian Press dispatch which quoted food minister Strachey of Britain as having said:
It is too early to say whether Britain will be able to buy any bacon in Canada next year.
So I suggest that the day may soon come when we shall need that United States market. It might not be advisable to remove the embargo completely, but we could at least allow some of our cattle to go to that market and realize United States prices. I would be quite prepared to admit that if we took this action our domestic prices probably would be affected; but I do not think it is fair to remove price ceilings from, say, 998 items and leave them on only one or two. In other words, it is discrimination to take the ceilings off everything the farmer has to buy and leave them on the things he is producing. I believe the minister should at least give the house a statement as to the intention of the government in this regard. I suppose there is some good reason why we are overlooking that source of funds at the present time, but I hope that before the day is over, or at least before the debate is through, the minister will make a statement.
The sixth feature of this bill about which this group is not in agreement is the higher excise tax; in fact we strongly object to it.

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The Minister of Finance made a radio address over the C.B.C. not very long ago, from which I should like to quote one paragraph:
The government will ask parliament to place an excise tax of 25 per cent on a wide range of durable consumer goods . . . most of which are of a less essential character.
That list included such items as electric irons, electric washing machines, electric refrigerators, vacuum cleaners and things of that kind. I wonder if the minister would say an electric iron or an electric washing machine is a luxury. I submit to him that today no electrical appliance is a luxury, but rather is in the category of an essential to every Canadian housewife.


John Lambert Gibson: Perhaps he has never used a scrubbing board.


Wilbert Ross Thatcher: These items definitely enter into the cost of living, and this twenty-five per cent tax cannot help but add to the cost of living of every Canadian. This tax was also imposed upon many sporting goods. During the war years, I remember the government found that many Canadians could not join the armed forces because they were not physically fit. As a result I believe a physical fitness program was instituted in each of the three services. When the war ended, the program was carried over into civilian life; a director was appointed, and the government gave the program considerable financial backing. Does it not seem strange, then, that now we should be undoing that good work, and taxing the very people we are trying to make fit? I think this tax is vicious and unfair. Instead of encouraging home industry at a time when we need to increase exports, I think it will discourage home industry. Thus we hope that the government will remove this tax.
The seventh feature of this bill which we of the C.C.F. do not like, as was pointed out by the hon. member for Rosetown-Biggar (Mr. Coldwell), is the fact that our export program is bound to be hindered by the actions of international cartels. The minister has said the government hopes to increase exports from many of the branch factories in Canada; yet according to the McGregor report, "Canada and International Cartels", Canada produces many commodities the export of which is severely restricted. A few moments ago the hon. member for Calgary West (Mr. Smith) suggested that some definite cases should be pointed out, and then perhaps they could be prosecuted. I should like to point out one or two cases, and I quote from Mr. McGregor's report. He is talking about
Canadian Industries Limited, and, at page 20, says this	company-Canadian	Industries
Limited-	.
. . . is not to engage in any export trade, even, when it is in a favourable position to do so through tariff preferences or other causes.
I would ask the minister what steps he is going to take, to see that Canadian Industries Limited, with its many plants across Canada, does its part to export its products in this emergency.
Then, on page 24 of the report, the commissioner reports that a similar situation exists with respect to the companies which manufacture radios and radio tubes. According to Mr. McGregor, the production and sale of radio tubes and sets must be confined to the Canadian market. How can the radio companies of Canada take part in our export program if that is true? Then, on page 25 of the report, Mr. McGregor says that the match companies of Canada are not allowed to produce for anything but the Canadian market. I ask the minister whether or not the government is going to take any steps to see that the match companies take part in our export program. Mr. McGregor goes on and points out that aluminum, nickel, zinc and other products of that kind are affected by cartel! arrangements. I do not know if this is wholly correct; I am asking for information, but is the Aluminum Company of Canada going to play a real part in this program? Is International Nickel going to take a part, or will cartel restrictions stop them?
On the surface at least it would seem that a large segment of Canada's productive capacity is tied up by cartel restrictions, as-we go into this emergency period; and I suggest that it is the duty of the government in one way or another to force these companies to play their part in our export program. In facing this crisis-and it is a crisis- I believe it is the duty of every individual and every company to play a part; and I say that it is a crime against the state if, because of some international cartel restriction, some company or groups of companies in Canada refuse to play their part in the emergency.
Our final criticism of these restrictions is the fact that we do not believe they go far enough. Probably they do not go half far enough. During 1947, if my figures are correct, our United States dollar reserves have been depleted to the extent of about $800,000,000. According to the minister's, own estimates as I read them in the newspaper-which may not have had them accurately-this program will save about $300,000,000. Where are we going
36G

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to get the other $500,000,000? Is it all to coni'e from increased exports? I think that is a pretty tough assignment. So I say that we in the C.C.F. do not believe that the restrictions announced go far enough. As we see it, *Canadians must realize that, for the next few years at least, in all probability multilateral trade as we have known it in the old-fashioned sense of the word is a thing of the past. Whether we like it or not, world conditions will force Canada on to a bilateral basis, particularly as far as our trade with the United States and our trade with Great Britain is concerned.
. As far as the United States goes, since 1867 our adverse trade balance has been more than $9,000 million. I believe at this time the Americans must realize that this situation cannot continue. If the United States wants to keep her trade with Canada I believe she will have to start, and start soon, to buy a jjreat deal more from us.
1 think Americans must be told, and in 'an emphatic way, that trade is a two-way proposition, and that if we are to buy from tthe United States they will have to buy from us. I hope the government will enter a bilateral agreement with the United States before long; but if it does not see its way clear to do so, I hope it will go after the Americans definitely and ask them for far greater tariff decreases than they have given us under the Geneva agreements.
L think the time is particularly opportune to go after those tariff decreases because Americans all throughout the world are seeing trade barriers put up against their goods, and they must realize that this is a real trade problem for them. If we wait too long to go after tariff decreases we may find a depression upon us; and it has always been politically inexpedient in the United States io bring about tariff decreases during a depression. Therefore I hope the government, [DOT]first, will go after a bilateral agreement and, failing that, will go after the Americans for substantial tariff decreases. And if the United States refuses to give us those tariff decreases, then I say we shall be forced by circumstances to make restrictions such as we have before us tonight a permanent part of our economy. I hope that such a course will not be necessary.
Then, so far as Great Britain is concerned, the exact opposite is true in our trading position. We have always sold her far more than we have bought from her. But today the British have no funds, and they say, "We are sorry, but we cannot buy from you, unless vou buy from us." We see our food markets
(Mr. Thatcher.l
jeopardized unless we can increase our imports from Great Britain. We of the C.C.F. would like to see a bilateral trade agreement with Great Britain; but, failing that, feel the house should give every favourable consideration to the suggestion made by Mr. Ernest Bevin on September 3 last for an empire customs union. That kind of union would eliminate tariffs from a large part of the world and would join together economies which are to a large extent complementary.
This group believes that Canada cannot proceed in the immediate future with multilateral trade, owing to world conditions. Therefore we urge the government immediately to initiate bilateral trade treaties with Great Britain and with the United States. We believe, in addition, that without the reimposition of price controls the bill before us will lead to higher costs and a lower standard of living.
For these reasons I move, seconded by the hon. member for Wood Mountain (Mr. Argue):
That Bill No. 3 be not now read a second time, but that it be resolved that in the opinion of this house the government should, first of all, give the assurance that where any goods or products are prevented from entering Canada by embargoes or restrictions provided in this bill, price ceilings will be imposed on all goods of a similar class or kind.


James Horace King: I would ask the hon. member for Macleod (Mr. Hansell) to proceed. I shall have a look at the amendment to see if it is in order.


Mr. E. G. HANSELL (Macleod):: Mr. Speaker, I feel tonight it is necessary for me to say something on this measure for the reason that it is the one which forms the austerity program now facing the Canadian people. Just before leaving home to attend this session, I was met by a number of people registering grievances concerning the proposed austerity program. I was met by one or two small businessmen who despaired of their own businesses. I was met by others who, for years, had desired to purchase cars but who now find, either that they are unable to obtain those cars or, if they are obtainable, that they must pay excise taxes, of such proportions as to render them incapable of buying.
I was surprised to hear the Minister of Finance (Mr. Abbott) say, when he interrupted the hon. member for Calgary West (Mr. Smith), that no one was under any legal obligation to pay the excise tax. I am willing to let the lawyers fight out the technicalities of that statement, but I would ask the minister to realize something of the practicality of the situation. If a man gees today to buy

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a car and tells his dealer that he will take the car, but that he is under no legal obligation to pay the excise tax, does the minister tell me that the car will be delivered to the purchaser? Apparently he does not want to answer the question. It is all very well to say that there is no legal obligation to pay the excise tax; but no one gets the goods without paying it. That is all there is to it. One must pay the tax, or he cannot purchase the goods.
I listened with a good deal of interest to the minister's speech this afternoon. It was a nice speech, in that it was an attempt to explain the situation in which Canada now finds itself and the manner in which the government is attempting to creep out from underneath the burden of administration. But let me say that, while the speech sounded nice, the voice of austerity will sound much louder than did the minister's speech, especially when the people realize that in Canada today, three years after we have passed through the austerity and severity of wartime economy, they are now being asked to go back to that period of austerity. That is the voice which will sound louder in their ears, especially when they cannot have, three years after the war, those things of which they were deprived during the war. And as my hon. friend the member for Bow River (Mr. Johnston) adds, they were promised these things too.
What will be happening within the next few months? During the war years, we were told how the compulsory savings of the taxpayers would be a little nest-egg to be used when we reached the time of peace. They would (hen be able to spend it on goods that would be available. Now what is happening? Just at a time when the compulsory savings are to be returned to the people, a lot of excise taxation is slapped on the goods that the people will need; and in a period of uncontrolled consumer prices, in a period of inflation, how far will those same dollars go? That is the question which will face the people of Canada during the next few months. The war has been over for about three years and we should be looking towards a period of abundant prosperity, comfort, contentment, peace of heart and mind, and security. Now the people are being asked to go through a period of austerity. Something must have gone wrong somewhere, and it is the government's responsibility to tell us, not what has happened, not how things have gone wrong, but why they have permitted things to go wrong.
The leader of this party a little while ago mentioned the fact that not only is Canada being asked now to go through a period of
austerity, but that other countries seem to be facing austerity too. Great Britain was mentioned, also Australia; and even the United States, which seems to be wealthy in dollars, is facing difficulties. If all these nations now, almost three years after the war, are being asked to go through a period of austerity, somebody in the world somewhere must be prospering. You see, it just does not make sense that, three years after the war when our productive system has been geared to a peacetime economy and a peacetime production potential, all these nations should now be facing austerity. Something is wrong somewhere, and someone else somewhere or another must be benefiting. Just try to figure that out. If my logic is wrong I wish someone would say so.
It does seem to me that someone has bungled somewhere. So many policies that are adopted to me just do not make sense. I mention this one right now, three years after the war. It does not make sense to me. What are we told now? We must take our production, our real wealth, those things that are made by the workmanship and skill of our own workers and the technical brains of our scientists and send them out of the country. It does not make sense to me for a government to propose a policy and say that we are going to benefit by getting rid of our real wealth. It does not make sense to me for the government to tell us that we cannot enjoy our own national abundance because we have not got somebody else's dollars.	*
With respect to the monetary -technique of which this group have spoken here a good many times in past years, to say that we have to pay interest on money which is created by the stroke of a pen and which the government could create through its own bank, that does not make sense to me either. There are a lot of things that do not make sense. I will give the government credit-


An hon. MEMBER:: For what?


Charles Edward Johnston: That is a $64 question.


Ernest George Hansell: That question might
stump me. I believe that members of the government are capable men. When they look this way they look to be capable. They are nice when I go into their offices. They are so obliging that I do not like to talk this way to them. But they are wrong so often. I do not think the country is lacking in administrators. Essentially, I think we could go out on the street and pick up good administrators for a dime a dozen. Obviously there is something wrong with government policy. So often their policies prove to be wrong for
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they only lead us into difficulties all the time.
I think sometimes that if you would go around the city and pick up a half a dozen or a dozen and a half business men and put them around the council table or in the seats of the mighty and get them to decide on a policy, they would be right just as often as the government. I believe that if our own government sat around the council table and after they had discussed matters for a while decided to flip a coin and say, "Heads, we will do this; tails, we will do that," they would be right more often because they would have at least a fifty-fifty chance of being right.
There is no question in my mind., Mr. Speaker, that our present difficulties have their roots, if not entirely, partly at least in that old Bretton Woods agreement which we fought here two years ago. How this group fought against being tied to that international monetary fundi Xt was drawing on towards Christmas, and how we were accused of trying to create a filibuster! How unpopular we were with people who did not know anything about the agreement. Yet we were told that it would be part of the solution of the world's post-war economic ills. It was passed as a sort of cure-all, although the minister admitted that perhaps it was not altogether perfect. I am quite convinced that the present austerity program is partly the result of our being tied hand and foot to the Bretton Woods agreement. We shall have something more to say on that when we discuss the Geneva trade agreements. It does seem to me to be a dangerous thing to tie our internal economy to some external legal monetary authority. I am certain of this, that we cannot manage our internal economy according to the will of our Canadian people, because we find ourselves tied to an external monetary power.
What has happened? The government tried to tell us that that agreement would bring peace, prosperity and enjoyment upon the earth. They have told us for years that their policy of free trade among nations would bring us to the verge of utopia. Anyone who talked in terms of economic nationalism was surely taboo in this house. Now what do we find our position to be? We find now that, through some sort of bungling, the present government has been forced to an economic nationalism, the severity of which no economic nationalist in his right mind would ever dream of. That, to my mind, is the truth.
I am not going to say any more except to register my severe objections to this bill. The leader of this group has suggested that it should go to the banking and commerce committee. I do not know whether it is the inten-

tion of the Minister of Finance to send it there. In his speech this afternoon he said that he did not think these experts who are sometimes called bureaucrats could be blamed, and that the government would have to stand or fall by the policy which it had adopted. But let us remember this, and I have nothing to say against the advisers of the government. They are good men in their places; they are capable men in their places, but when they give advice which is wrong I do not believe their right place is in that field any longer. That is my honest conviction. Let us remember that governments come and governments go, but the advisers stay on forever, and when they advise the government with respect to this or that policy and it proves to be wrong, even though it cost the life of the government, another government coming in would be subject to the same advice from the same people. That is what I call, not the strength of our parliamentary and democratic institution, but the weakness of it.
I say this, and this is where I believe the austerity program is going to be so severe. I believe we shall discover within the next few months, and perhaps within the next year-I do not know how long the program will last- that no end of small businesses will go on the rocks. There is no question about that. Big business is not always bad business. We hear a lot in this house from some quarters about big business. Well, I am not prepared to say that big business is always bad business, but I will say that big business perhaps will be able to weather the storm. Perhaps they have certain financial resources; perhaps they have certain connections and they will be able to weather the storm; but imagine a small business that is just starting. It may be an electrical shop, I do not know; it may be a variety of small businesses. Take the veterans who have come back and started up small businesses here and there. I know that times are good, and they should get better in these years of peace following the war. Some of these businesses are going on the rocks. Take small textile industries. I tell you that some of these are going on the rocks. We all know that a new business has a struggle to gain a hold, to gain momentum and to keep its head above water for a year or two until it gets on its feet. Small business always has that experience, and now just when it should have an opportunity of becoming permanent what is going to happen? They will not be able to get the raw material; they will not be able to get this or that, and the result will be that they will have to close down. That is perhaps one of the worst features of this austerity program.

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I have registered my objection. I have said what I think makes sense and what I think makes nonsense, and because I think it makes nonsense I am going to vote against the motion.


James Horace King: Unless some hon. members have representations to make on the legality of the amendment which is before the Chair I am ready to make my ruling.


Stanley Howard Knowles: Mr. Speaker, can you indicate what the nature of your ruling might be? If'you are going to rule in favour of it, we would not have to make any representations.


James Horace King: Mr. Thatcher moves:
That Bill No. 3 be not now read a second time but that it be resolved that in the opinion of this house the government should, first of all, give the assurance that where any goods or products are prevented from entering Canada by embargoes or restrictions provided in this bill, price ceilings will be imposed on all goods of a similar class or kind.
I call the attention of the hon. member to citation 660 in Beauchesne's Parliamentary Rules and Forms, third edition, at page 229: On the motion for the second reading of a bill respecting the Canadian National Railways and to provide for co-operation with the Canadian Pacific railway system, and for other purposes, a member moved as an amendment "that the second reading of this bill be postponed until this house declared that nothing therein shall be taken to authorize any amalgamation of the Canadian National Railways with the Canadian Pacific Railway; or to divest parliament of its rights; or to take from the House of Commons its primary duty to control expenditures of public moneys and the taxes required to meet the same; . . . ". The Speaker ruled this out for the reason that, instead of being a declaration of principle, it proposed a postponement of the second reading pending a definite declaration of the house; moreover, it did not purport to disagree with the principle of the bill but it dealt with its provisions and anticipated amendments which may be moved in committee. On an appeal to the House, the Speaker's decision was sustained by a vote of 88 to 35.
I believe that it is my duty to-


Stanley Howard Knowles: Mr. Speaker, before you
actually make your ruling, may I speak- to the point that you have raised about the amendment? I have followed closely-in fact I had read it before-citation 660, which you have just now read to the house. I point out that there is quite a difference between the amendment which was referred to in the citation and the amendment now before the house. That amendment asked that a decision on second reading be deferred until the house had declared .itself with respect to that matter; in other words, it called for a vote on another substantive motion by the house itself. The amendment moved by the hon. member for Moose Jaw simply expresses as an opinion of the house that, before we are asked to vote second reading, the government give a certain assurance, and I submit that that kind of amendment is provided for in a citation a few paragraphs ahead of the one you read, namely in citation 657 which reads:
It is also competent to a member who desires to place on record any special reasons for not agreeing to the second reading of a bill, to move as an amendment to the question, a resolution declaratory of some principle adverse to, or differing from, the principles, policy, or provisions of the bill, or expressing opinions as to any circumstances connected with its introduction, or prosecution; or otherwise opposed to its progress; or seeking further information in relation to the bill by committees, commissioners, the production of papers or other evidence or the opinion of judges.
In addition to citation 657, there is found on page 337 of Beauchesne's Parliamentary Rules and Forms, third edition, a form for the kind of amendment now before the house. It is indicated as form No. 93 on second reading, and there are several samples of it there.
I will read the last one. Sir Wilfrid Laurier "moved in amendment thereto":
That this bill be not now read a second time but that it be resolved that the abridgment by this parliament of the electoral franchise . . .
And so on. I submit that this amendment is in exactly that same form. That is to say, it proposes a delay by the house in giving the second reading until certain other conditions have been met. In addition, I would point out that in the last session of parliament there were at least two cases where an amendment was moved in similar form. On February 21, as indicated at page 697 of Hansard, when the redistribution bill-was before the house, I moved an amendment that "this bill be not now read a second time but that it be . resolved that in the opinion of this house" a certain proposal be made. Similarly, on March 31 of this year, as reported at page 1910 of Hansard, when we had before us the bill to appoint auditors to the Canadian National Railways, there was an amendment that "this bill be not now read a second time but that it be resolved that in the opinion of this house the government should give consideration to the making of provision for the auditing of the accounts of the Canadian National Railways to be done by the auditor general of Canada."
What you have in this whole provision, Mr. Speaker, is something similar to the resolutions that private members can move, which simply state the opinion of the house. This

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has been done before. Those two amendments I quoted from last year were both allowed by Your Honour and voted on. This one is similar and, I submit, should be regarded as in order.


James Horace King: Before giving my ruling. I may say to the hon. member that I have already looked at citation 657, but I want again to call the attention of the house to this point. The amendment reads:
That Bill No. 3 be not now read a second time but that it be resolved that in the opinion of this house the government should, first of all, give the assurance that where any goods or products . . .
And so on. The ruling to which I referred a few moments ago to declare that amendment out of order is this:
The Speaker ruled this out for the reason that, instead of being a declaration of principle, it proposed a postponement of the second reading pending a definite declaration of the house.
In this case it is the postponement of second reading of the bill pending a declaration of the government.
Moreover, it did not purport to disagree with the principle of the bill but it dealt with its provisions and anticipated amendments which may be moved in committee.
In my opinion the amendment must be declared out of order.


Thomas Langton Church: Mr. Speaker, the motion before you is for the second reading of Bill No. 3 wherein the minister seeks certain powers that, in my opinion, are entirely dictatorial. Such vast and gigantic powers as are asked for in this bill have never before been conferred upon any minister of the crown. The minister who is now asking parliament to grant these powers to him did some good work in the war, and I therefore regret that he should now be asking for what amounts to a totalitarian dictatorship.
Let us look at cause and effect so far as this bill is concerned. To find the cause of it we must go back two years. All that was done at Ceneva is interlocked with the proposals of this bill and we can do nothing now but hold a post mortem. The government is simply asking us to allow it to establish a Hitler autocracy, because the bill proposes to make the minister absolute over the law courts and over the House of Commons. In the schedules to the bill we find the list of Canadian articles set out in the pamphlets issued by the Department of Trade and Commerce last February, March and April down to September. They are all linked together.
In this bill the government proposes to do two things. Two standards of living are being set up. One relates to imports and exports fMr. Knowles.]
and the other has to do with our mode of living. There is something more serious than the dollar situation and that is the principle of the bill, which relates to the standard of living we have had in this country, according to which the liberty of the subject has been guaranteed. The freedom of a man, freedom of body, mind and soul, is a priceless heritage and it is being taken away by this bill, under these Hitler autocracy powers, these totalitarian powers which the minister proposes to assume. What can it profit a man if he gain the whole world and lose his own soul? The government may succeed in the first principle of the bill regarding exports and imports, mode of living and all that kind of thing, including the dollar situation. They knew two years ago what they would do but kept the House of Commons in the dark, never telling us a word about it. I say, they may succeed with regard to imports and exports, with regard to the dollar situation and all that sort of thing, but they will not succeed in attaining their second objective, for what will it profit us if we win the first two and lose our souls?
As I said before, we must look to cause and effect. What about the empire? Where do we go from here in this bill? The limit of the bill should be March 31. That should not be exceeded. Then there is the austerity about which we hear so much. We never heard of it all last session until the end of Geneva. When did the government first start to talk about austerity? Did y.ou ever hear about it at the time of Lake Success, when certain people went down there and occupied a whole floor of the Biltmore hotel. Was there any austerity proposed there? A hundred thousand dollars for one whole carload of people to go down there for weeks and months. The government knew all about the Geneva pacts last spring. But when I asked the acting leader of the house, who is a fine gentleman, about this matter on February 10 and if he could tell us anything about his Geneva talks, he told us he could not tell us anything about them because they were going to meet some time later in the next few months.
As I say, we no longer have a in- freedom of body, mind or soul as a result of this bill.
If you look at the principle of expansion of world trade it is just a myth. All trade will now flow to the United States and little to empire countries. They will get all the trade and the empire and the dominions will get nothing. What has become of preferential trade? That is down and out by the Geneva route. It is mentioned in the schedules, and what do you find? You find this if you make a close study of this bill. We should be close friends and allies for ever of the United

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States. That should be our policy. But we should keep to the great principle of being economically independent of them. That is the chief requisite. That is what we lose now by Geneva. For that reason I supported preferential trade and opposed Brett-on Woods and the Geneva pacts. We should stick to empire preference and lessen our trade dependence on the United States by developing empire preferential trade along the lines I have indicated. We need that- policy today.
What is my policy? What do I propose? I would apply protection by way of bonuses, subventions and subsidies to Canada's natural resources, resources of grain, bacon, eggs and food, which should all go to our best customer, Britain and be within the empire. I would apply the national policy program of bonuses, subventions and subsidies and all that kind of thing to develop preferential trade within the empire family. My chief complaint with regard to this Bill No. 3 is that it has been used to make it appear that we are surrendering everything we have to please Washington. There will be no more future success for empire trade, and that preferential trade is out if this bill passes. The bill is political. It is not economic. Britain will be ruined beyond any hope of .recovery and so will Canada, because we are going to lose empire trade. As I say, we need to get back to the vision of those men who founded that particular doctrine, gave it to us and made a success of it. By this Geneva pact scheme, that is being eliminated.
If what is set, out- in this bill is supposed to be the best that can be done in this economic emergency situation then I say no to it. I say, further, that the bill should be limited ' to March 31. It should not be on forever because we do not know what kind of austerity will follow from this bill. It may be a huge austerity. In other words, by this bill, we are going to place control under one minister and his officials, totalitarian Hitler autocracy, over the head of the law courts and over the head of the House of Commons, until next March.
What is to become of Bill No. 3 based on the Geneva charter which ruins empire trade? See what we pledged to United States by that. By Geneva we pledged ourselves to the United States to accept the principle of non-discrimination as a right and proper principle in world trade. That is what I object to principally, namely, that we have adopted a wrong principle and a doctrine which was proposed by the United States many years ago when they fought tooth and nail against these preferences. They fought right along against them. Not only is that principle contained in this particular Bill No. 3, but we find the same
principle which the government are adopting now in lease-lend, also in the United States loan and now, in this farce of all-American trade, the Geneva agreement. Those three principles are still in the two schedules in the bill here. We are going to agree to what . the United States asked for at Geneva, namely the abrogation of these preferential trade doctrines, as set out in the schedules, by what is known as the non-discrimination clauses. That is, we agree to grant no favours to empire countries under these schedules, but agree religiously to avoid that, to let America grab all trade. That is a dangerous doctrine.
A large part of this bill is called a charter.
It is the Geneva charter. It is in the book here. You have the same system applying to Canada which Canada accepted. This particular charter is called the Geneva charter. Bill No. 3 is the local end of it and it is the only end of it we are dealing with now. In this Bill No. 3, in its present form, I say the government is making the same mistake as it made before. The bill is based on white paper 27 and 27A made at Geneva. As I say, Mr. Speaker. I am opposed to the doctrine set out. My complaint is that at Geneva we pleased Washington and ruined any hope of empire trade to put Britain on her feet again. We agreed to this principle and thereby gave up all hope of success in ever getting our empire trade back. The government at Ottawa has no mandate for this Bill No. 3. The government has shown by Bill No. 3 that it lacks any evidence of vision, and "where there is no vision, the people perish." The government has adopted this internationalism found in Bill No. 3. I am absolutely opposed to the dictatorship set up over the people of Canada by Ottawa and the creation, by this Bill No. 3 proposed by the present government, of a vaster bureaucracy than has ever before been attempted here over the lives and liberties of individuals. I clearly saw in December, 1945, the coming of this tragedy when I strongly opposed the Bretton Woods agreement and the American loan which have been -the cause and effect of this dollar situation set out in this bill, the awful result of which two agencies has led at Geneva to attempts to liquidate and dissolve the British empire and end British preferences.
I would use the national policy under this bill for capital and labour, both of them to harmonize industry in Canada and not nationalize it-a national policy brought up to date to meet after-the-war conditions, for grain, food, bacon and all farm products. I would use the national policy by giving bonuses, subventions and subsidies instead of
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this Bill No. 3. We would have accomplished it, because the British empire today is, in natural resources, much stronger than either Russia or the United States. For that reason I have taken a stand on it. I believe New Zealand and Australia are with the mother country, and are opposed to much of this regimentation. It is going to be on nearly three years after the war. It will be on until next Easter. This will be good anyway until next March. I would amend the bill until March 31. That is as far as I would go.
Among other things, this bill has become an absurdity at Christmas time. We have over one million Canadians who have gone to the United States, many of them in poor circumstances. How are you going to give them this Christmas grant of the usual $25 under this bill? We used to be able to send $25. They are poor people over there who left Canada; some of them are students. They have gone over there to seek a living. They have been driven out of Canada by such measures as this; they did not get a chance. They are left over there under this bill, at Christmas time, without any notice. We cancel, by foreign exchange, any hope of sending money over. You used to be able to send them over some benevolent grant, money now limited to $25 a month. Some of them are out on the street or will be if they do not get this. This is done over the head of parliament and of the law courts. Why was not this whole matter referred to the supreme court in the last six months to find out if the government of the day had any power to extend the Foreign Exchange Control Act in the way they are doing?
What are we here for? We might as well go home if the executive can do that. It is getting worse than in the days of the family compact of 1837, when the government can pass measures like this over the head of the commons and over the head of the law courts. This is the high court of parliament; yet one man has power to do all this. I want to be fair to the minister. He did a lot of good work during the war, and I am sorry he has taken this new job.
I have consistently supported the system of preferential trade, but by this measure we are eliminating it for all time to come. Where is Britain to get the food, if she cannot get it from this empire source? Last session the government knew all about this Geneva pact. Look at the schedule. Last session the government knew about it, but they told us they did not know. Why did they not tell us something about this when parliament was
TMr. Church.]
sitting last July? They were taking United States dollars from Britain to pay for some of the food they gave Britain then. Parliament knew nothing about it. I did not know anything about it, nor did the press, nor the radio, nor the public; yet they were proceeding in the manner indicated.
As I say, I have been a great admirer of the American people, but here we go farther than in any other bill we ever had. We have surrendered too much initiative, economically, politically and financially to Washington all along, and the American people do not want that. Nor do our people. The Americans want to know the truth, the whole truth and nothing but the truth. They want to know all about our exports and imports, and our economic problems, but the people in the constituencies do not know. Why were we called here? We are to be sent home on Friday, and we might as well not have come at all. What was the need for this session, if the government has all these powers? The dictators in Europe have seen their day, but the government here are adopting measures such as Hitler imposed. In Bill No. 3 we are just trying to imitate the Hitler autocracy by removing these things from the jurisdiction of the House of Commons and the law courts. Well, it is good-bye to law and order. It will take a small standing army all along the border to enforce these regulations, asking everybody at the border: "Are 3'ou sane or insane? What have you in your pocket? Have you an American dollar?" In the -end they are going to cause widespread dislocation of business and great unemployment. We should have stood by the people of Britain, our best customer, who stood by us during the seven dark years of the war. We should have enabled them to get on their feet again. What are we doing? With all the standing army we had down in Washington, with all the officials we had down there, they knew nothing about this Geneva bill until it was proposed in the House of Commons.
I do not want to talk the bill out. I would be quite capable of doing so, but I have some respect for the young minister, whom I have known for a great many years. I am surprised that he did not let the people know long ago about this policy of wait and see what Washington does. The Minister of Reconstruction (Mr. Howe), who will carry out this measure, does not look like a dictator. He is a sportsman, anyway; but I can tell him that he is adopting totalitarian powers, along with his deputy, Mr. Berry. I do not know Mr. Berry personally, and I have never

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criticized a public official because I believe they are only carrying out their duties to the -best of their ability. They are the victims of a system. However, I do say that in adopting this measure the government are going very far. If they succeed in carrying out the provisions with respect to imports I am afraid they are going to destroy trade and commerce and cause widespread unemployment in this country.


Clarence Decatur Howe: Tomorrow we shall continue
with this debate, and I now move the adjournment of the debate.
Motion agreed to and debate adjourned.



BUSINESS OF THE HOUSE

[Stage Direction]
Mr. HOWE moved the adjournment of the house.
John Bracken: Would the minister tell
us what will follow if this debate should be finished tomorrow?


Clarence Decatur Howe: If we have second reading
we shall go into committee of the whole on the bill. This bill will take the full day.
Motion agreed to and the house adjourned at 10.48 p.m.

Wednesday, December 17, 1947