1947-03-12

PRIVILEGE


Mr. A. L. SMITH (Calgary West):: Mr. Speaker, I am rising on a question of privilege. I hope, sir, that you will regard it kindly and that some of the gentlemen from the "amen" corner will regard it even generously.
Yesterday the Prime Minister announced that the Easter recess would extend from April 2 until April 14. I am asking that this

Privilege
matter be given further consideration. I am in this position. I must rent my house, which I have done, and the member for Calgary East (Mr. Harkness) is in the same position. The housing shortage being what it is, we could not selfishly close those houses. Last year we were in the same position. We were away from home just one day less than six months, attending the last session of parliament. On the other side of the picture it seems to me that the business of parliament perhaps requires that we should make this Easter vacation as short as possible. I am asking the government to reconsider the matter, because it does seem to me that with all the work we have in front of us we shall be occupied for another full six months and that we can serve our time a little better down here.


Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, my hon.
friend may or may not have noticed that I had asked the Clerk to place in Votes and Proceedings a motion with respect to the-Easter vacation in order that the matter might come before the house again before a final decision was reached. The motion appears in today's Votes and Proceedings and will be on the order paper tomorrow, when there will be an opportunity for the house to discuss the resolution. May I say to my hon. friend that the whole purpose my colleagues and I had in mind was to seek to meet the wishes of the great majority of the members of the house. It was, accordingly, suggested that the whips confer with the members of the different parties and it was understood that the government would be guided by their decision.
So far as the government is concerned let me make it perfectly clear that wTe are quite prepared to take either the shorter or the longer period, but what we are seeking to do, in leaving it to hon. members themselves to decide, is to oblige hon. members of this house so far as we can in the matter.


Arthur Leroy Smith: I appreciate that fully, and I was not suggesting for a moment that anything was being forced on us, but some of us are in a difficult position. I was in the same position last year. I did not get any expenses-not a nickel.



MB. GIBSON (COMOX-ALBEENI)-REFERENCE TO REPORT IN VANCOUVER &quot;DAILY PROVINCE&quot;

Mr. J. L. GIBSON (Comox-Alberni):: Mr. Speaker, I rise on a question of personal privilege arising out of a reference to myself made in the Vancouver Daily Province of February 27 last, in which I was referred to as "J. L. Gibson, Liberal, Comox-Alberni". I do not say, sir, that this is the most libellous
thing that has ever been said about myself, but it is probably the most untrue. I do not intend to take the same action that the premier of Ontario took against the Toronto Daily Star because I do not believe the courts would hold that it constitutes defamation of character. There is only one thing I will say. I am probably the unique member sitting to your right in that of all hon. members who sit over here I have no hope of ever being in your position, sir; of being a parliamentary assistant, a member of His Majesty's privy council, or in the other place. I will even go so far as to promise the Prime Minister (Mr. Mackenzie King) that if the electors of Comox-Alberni withhold from me their support at the next election I will not even ask him for a messenger's job.



REPORTS AND PAPERS

Hon. COLIN GIBSON (Secretary of State):: I wish to table a statement with respect to translations of Hansard, Orders of the Day, Votes and Proceedings, Reports of Committees and Proceedings of Committees. With the unanimous consent of the house I would ask that it be printed in Votes and Proceedings.



POSITION AS TO SUPPLY-INCREASE IN CONSUMER RATION

['I was paired with the hon. member for Marquette (Mr. Glen). Had I voted I would have voted for the amendment to the amendment.']
Hon. DOUGLAS ABBOTT (Minister of Finance):: Mr. Speaker, I should like to make a brief statement on the prospective supply of sugar during the current year.
Sugar has been a commodity in short supply since 1942, when the Japanese forces overran and subsequently destroyed some of the greatest sugar producing areas of the world, and since that year the available world supplies of sugar have been subject to international allocations. The sugar committee of the international emergency food council, of which Canada is a member, has recently completed its review for 1947, and its recommendations on the 1947 allocations have been unanimously approved by the executive committee of that council.
The total available supply of sugar in 1947 shows an encouraging improvement over 1946, but still falls considerably short of meeting current world requirements.
Statistics of 1947 supply must necessarily be estimates, since the greater part of the 1947 crops is not yet harvested or manufactured. Within certain limits, however, we are now able to project our 1947 position.
On the most optimistic assumption relating to crop out-turns, the 1947 allocation to
Inquiries oj the Ministry

Canada-which for statistical purposes includes our domestic beet sugar production-will provide us with 93 pounds of raw sugar per capita, which is equal to 87 pounds of refined sugar. If, on the other hand, we take a conservative view of crop prospects, we will have about 86 pounds of raw sugar, or about 80 pounds in terms of refined. These figures may be compared with actual supplies of 71 pounds refined in 1946, 95 pounds as our average pre-war consumption, and 103 pounds per capita in the peak year of 1941.
In other words, we can expect an improvement in 1947 of not less than 12 per cent and probably not more than 20 per cent in comparison with 1946. But even this improved rate of supply will be at least 20 to 25 per cent below what I might call the unrestricted or unrationed demand. It will, therefore, be obvious that we cannot anticipate the elimination of sugar-rationing for at least another twelve months.
The wartime prices and trade board reports to me that current stocks and prospective supply justify an increase in the ration, and an increase of one-seventh or about 14 per cent, will be put into effect at the beginning of the next rationing period which is April 1.
In 1946 the standard consumer ration under the combined sugar-preserves ration was 7 coupons per quarter. This will now be increased to 8 coupons per quarter. Similarly, the industrial sugar ration which is now at 70 per cent of 1941 usage, will be raised to 80 per cent of 1941 usage. Biscuit and cereal manufacturers will also get a 10 point increase to 85 per cent, and bakers the same increase to 90 per cent of 1941 usage. Equivalent increases will be extended to "quota users" -that is to say, hotels, restaurants, etc. The home canning allowance of 10 pounds of sugar per person will remain unchanged for the present, though without holding out any firm promise I may say that if nothing untoward happens, the prices board hopes to be able to validate two or three extra coupons during the fruit harvesting season.


Mr. DIEFENBAKER:: Will the minister permit a question? Has consideration been given to increasing the present subsidies with a view to assuring a material increase in beet sugar production, and also to permitting factories to operate to capacity instead of the way they are operating at present?


Douglas Charles Abbott: As my hon. friend knows, the increase to $1.25 was authorized by the sugar administrator through the wartime prices

and trade board. So far as I am aware, no consideration has been given to increasing that amount.



[Stage Direction]
On the orders of the day:
Mr. STANLEY KNOWLES (Winnipeg North Centre):: May I direct a question to the Minister of Finance? Has the minister's attention been called to a press report to the effect .that certain government officials believe that to permit rising prices would result in decreased consumption of butter and meat, as has happened in respect to milk? Will the government accept or reject this advice?


Douglas Charles Abbott: I have not seen the article and I have no particular comment to make on it. The government sometimes accepts the advice of newspapers, and sometimes it does not.


Stanley Howard Knowles: This is the advice of government officials, not of newspapers.


UNITED NATIONS
[Stage Direction]
On the orders of the day:
Mr. F. S. ZAPLITNY (Dauphin):: I should like to direct a question to the Secretary of State for External Affairs. What steps are being taken by the Canadian government to replace our contributions under the arrangements of the united nations relief and rehabilitation administration by some other form of organized assistance?
Right Hon. L. S. ST. LAURENT (Secretary of State for External Affairs): At the last meeting of the general assembly of the united nations a resolution was adopted to set up a committee of experts to assess the needs for further relief in devastated countries. That committee made its investigation and recently made its report to the secretary general who communicated it to the member nations of the organization. The report was recently received by the Canadian government and has been under active consideration since its receipt, but no decision has yet been reached.

Inquiries oj the Ministry


STATUS OF SUBSIDY TO MARITIME OPERATORS AFTER MARCH 31
[Stage Direction]
On the orders of the day:
Mr. A. J. BROOKS (Royal) :: I should like to direct a question to the Minister of Reconstruction and Supply, based on a telegram which I have received from certain coal operators in the maritime provinces with reference to the withdrawal of coal subsidies. Will the minister inform the house whether it is the intention on March 31 of this year to withdraw the subsidy paid on the production of coal?


Right Hon. C. D. HOWE (Minister of Reconstruction and Supply):: The government have not reached a decision on that point; therefore I am unable to give the information.


Alfred Johnson Brooks: Will the minister inform the house? March 31 is not very far away, and he knows that a serious situation has developed in the maritime provinces. The operators would like to know.


Clarence Decatur Howe: For reasons which my hon. friend will appreciate, it is not customary to announce changes in subsidy arrangements in advance of the changes taking effect. Since this is a special circumstance I shall investigate and endeavour to get an early decision.


PRICE UNDER AGREEMENT WITH BRITISH FOOD MINISTRY
[Stage Direction]
On the orders of the day:
Mr. MARK C. SENN (Haldimand): About a month ago the Minister of Agriculture, in reply to a question by the leader of the opposition stated that the price of cheese under the agreement with the British food ministry was the subject of negotiation. Can he say whether the matter has been decided yet?
Right Hon. J. G. GARDINER (Minister of Agriculture):: A decision has not yet been
reached on that question. It is associated more or less with the decision that will be taken with regard to feed grain, and the matter will all be decided at the same time.


BOOK OF REMEMBRANCE
[Stage Direction]
On the orders of the day:
Hon. BROOKE CLAXTON (Minister of National Defence):: Some time ago I was
asked a question by the hon. member for
Wentworth (Mr. Lennard) as to the government's intention regarding a book of remembrance. Numerous representations have been made that we should have a book to record the names of all the members of Canada's armed forces who gave their lives in the last war, in order that we might have a permanent record of those who gave their lives.in order that freedom might live. I should tell the house it has been decided that work on such a book will be commenced. The location and form will be announced later.


LABOUR CONDITIONS
[Stage Direction]
On the orders of the dajr:
John Lambert Gibson: I
wish to direct a question to the minister of transport. I gave him notice of it. Will he state why lifeboat crews have not received raises of wages as have all crew members of lighthouse tenders on the Pacific coast, who have received substantial increases retroactive from August last.


Hon. LIONEL CHEVRIER (Minister of Transport):: Increased wages for crews of
life saving stations are being actively considered at the moment by the Department of Transport. A submission is now before the Department of Labour and it may be some little time before a decision is arrived at. Just as soon as one has been reached it will be put into effect.


POULTRY
[Stage Direction]
On the orders of the day:
Mr. G. A. CRUICKSHANK (Fraser Valley) :: In view of the peace and harmony
prevailing this afternoon, may I direct a question to the Minister of Agriculture? When will the minister be able to make a statement regarding feed grain for poultrymen in British Columbia?


James Garfield Gardiner: As announced yesterday, I
hope to be able to make a statement before the end of the week. That should be the day after tomorrow.


GOVERNOR GENERAL'S SPEECH
[Stage Direction]
The house resumed from Tuesday, March 11, consideration of the motion of Mr J. W. MacNaught for an address to His Excellency
The Address-Mr. Hackett
[Stage Direction]
the Governor General in reply to his speech at the opening of the session, and the amendment thereto of Mr. Bracken, and the amendment to the amendment of Mr. Low.
Mr. JOHN T. HACKETT (Stanstead): The amendment proposed by the leader of the opposition (Mr. Bracken) states in terms that the mov6r, and the party which he leads, have not confidence in the administration of the day. I need not say to you, Mr. Speaker, that confidence in the present administration does not ooze from the soles of my shoes. If I have until this late moment refrained from taking part in the debate it is because I had hoped that some of the gentlemen opposite, whose constituencies are in the province from which I come and who for many reasons are better qualified than I to speak for the people of that province, would have stated the views of the people of Quebec. So far I have heard from the opposing benches nothing which would indicate that in Quebec there is any dissatisfaction with the present regime or with the policies that it is pursuing.
One hesitates to make himself the interpreter of others' wishes and of others' thoughts, but the time does come when one is so strongly impressed by the unanimity of public opinion that he feels it his duty to speak even though his voice be but a faint echo of that opinion. I entertain the view that the people of Quebec are opposed as a whole to controls; that they tolerated them during the period of the war; that for the purposes of the war they were willing that such controls should weigh upon them; but that, the war being over, they regard these controls as no longer reasonable but on the contrary harmful to them.
An hon. MEMBER:: Louder, please.


Mr. SPEAKER:: Order. I would ask hon. members to moderate their voices. So many conversations are going on in the chamber that it is difficult to follow the hon. member who is trying to make himself heard.


Mr. HACKETT:: I thank you, Mr. Speaker. I am not unaccustomed to speaking in places where my words do not always fall on attentive ears; that is sometimes a sign that those who should hear refuse to do so. I was going to deal with two or three of the controls that seem to be particularly irksome.
I do not know of anyone who does not find that some control in some way is agreeable to him. Everybody can find in this or that control something that is beneficial to him, and to that extent the burden of the system as a whole is less troublesome to him. But I am opposed to the general principle of

control. Many controls imposed upon the people grow largely out of the policies of the government.
We have learned from the apostles, the avowed apostles-I was going to say the honest apostles-of socialism who sit to our immediate left, that last year, only something over thirty per cent of the total building which went on in the dominion was the building of dwellings. We are aware that it is because of the restrictions imposed by government upon the materials which are essential to house construction, and because of its policy of exporting those things which are essential to the construction of dwellings, that there has been such a lag in this most important undertaking, that of building houses for the people. It was interesting to hear a socialistic programme such as that undertaken by the government-the programme of providing houses-criticized by the socialists because the government had not carried out its programme as effectively as the socialists think they could have carried it out had they been in office.
I submit, Mr. Speaker, that this failure is merely evidence of the inability of a government to perform functions that are in their very nature the business of private enterprise. Houses are needed, and they are not being provided, because the people who could provide them, the agencies that are necessary to bring them into existence, are cramped and curbed by government controls.
Let us leave dwellings-and consider office buildings, of which there is a shortage in all the cities, a shortage again attributable to government policy. We find these buildings filled with commissions, boards, and crowm companies, and their employees. We find hordes of these government employees occupying useful space in most of the large buildings of all the principal centres of the country. Therefore I say that the shortage of dwellings as well as of office and factory space is largely due to the failure of the government to make it possible for the ordinary enterprise of the people to overcome this particular difficulty which confronts them.
We are told at times, and we know it is true, that it is impossible to find young men or young women to undertake tasks in the business world. The reason is that they have some kind of job with the government. They are in a crown company, a board, or a commission; and they occupy, if in Ottawa, some of these temporary buildings. I sometimes think that if a cleansing flame could wipe out the temporary buildings which have been put up here, it would render a great service to the people of Canada. They are filled with people

The Address-Mr. Hackett
who were congregated there for the purposes of the war and who have remained for no purpose other than to increase the burden on the taxpayers.
Another form of control which is particularly burdensome is the wartime prices and trade board. I ask any of my hon. friends who sit opposite, and who represent constituencies in the province of Quebec, how much enthusiasm is there in their constituencies for these wartime controls? They are not only burdensome; in many instances they are highly detrimental to the welfare of our people. I come from a part of the province where dairying is engaged in; and there, because of the control of the price of butterfat, herds are being sold. Let me say here, because I do not wish to be misunderstood, that there has been no serious drop in the production of butter, but there has been a very serious drop in the production of cheese, and there has been an immense increase in the demand for milk products. Yet we find that the herds are being dissolved; they are being sold, they are going across the line where price restrictions no longer exist.
In the year 1944, 53,804 pure bred and dairy cattle were exported from Canada to the United States. Last year 92,013 head of these cattle were exported to that country. Of this very substantial figure more than half came from the province of Quebec. In the year 1944, 28,457 head of pure bred and dairy cattle were exported from Quebec, and last year 47,666 were exported. When I say from the province of Quebec, that means that a very large percentage of them came from the area known as the eastern townships, which is the dairying area of Quebec. The dairying industry there has been dealt a mortal blow by the controls w'hich have been placed upon it by the present administration.
Just a moment ago the Minister of Finance (Mr. Abbott) mentioned sugar. I should like to say a word about that. The international food council is a body which controls the sugar output of the world. It is composed of representatives of Great Britain, the United States and Canada. The United States produces 65 per cent of its sugar requirements, Britain 30 per cent, and Canada 18 per cent. Out of this world pool last year we were allotted 504,000 short tons of sugar. That included 90,000 tons of Canadian grown sugar. That meant that we needed to import into Canada 414,000 tons of sugar. Where did it come from? Forty per cent of it came from Cuba and San Domingo; the balance came from the British West Indies. That brings me to a point which I will develop a little later. But owing to the way in which prices have been manipulated,
the greatest source of sugar beet supply in Canada, southwestern Ontario, has been hit so hard- that its production fell at one time to less than 20 per cent of what it was before the war. In the great factory at Wallaceburg, which is capable of producing something like 2,500 tons of sugar a day, not a wheel is turning.


Mr. REID:: Did the lack of labour not have something to do with that?


John Thomas Hackett: The lack of labour had absolutely nothing to do with it. Government policy made the price of sugar such that the farmers who were growing onions, beans and other subsidized products, just could not afford to grow beet sugar. We find this great industry hamstrung and throttled by a policy of the government. The situation became so terrible that, in order to prevent the annihilation of this great industry, the government of Ontario contributed one dollar per ton per year for beets, in the hope that remedial legislation would come.


George Alexander Cruickshank: We contributed
some Japs.


John Thomas Hackett: I should prefer to talk to the hon. member for Fraser Valley (Mr. Cruiekshank) in private. He is more interesting there and easier to follow.
I was going to say that there were some Poles brought in last year to help garner the beet crop; but the fact is that the policy of the government has ruthlessly smitten in this area in Ontario an industry which is indigenous to that province. It is being sacrificed for reasons which nobody can explain. At one time something was said by somebody about not a nickel for a Tory province. One does not like to suggest that this might have had something to do with the policy here, but the fact remains that this industry in the province of Ontario is being very greatly hampered and is threatened with extinction, just as is the dairying industry in the province of Quebec.
What is the reason for all this? We are told we are imposing these restrictions because we fear inflation. Let us examine that for just a moment. I suppose inflation means, among other things, a rise in price, a drop in the value of our money; that is on the lips of everyone. We hear that the housewife is fearful lest the prices of dairy commodities and sugar go up. But does the housewife understand, has it been explained to her, that because of the taxes under which her house-
The Address-Mr. Hackett

hold labours, the take-home money of her husband is diminished, in order that these controls may be continued?
Let us consider the amounts paid last year in bonuses and subsidies on butter and cheese and compare them with the total of the two or three cents increase in the cost of milk. Then we shall see how much more that milk costs the people of Canada. Let us go further and take this matter of sugar about which we were speaking. The price has been fixed. The refinery in Montreal receives $5.89 per hundred pounds. The cost of refining is fixed at $1.57. But here is a little item which no one seems to have spoken of. Sugar is in the general tariff at $1.29 per hundred pounds, with an imperial preference of $1 per 100 pounds. This means that every hundred pounds of sugar imported into Canada pays $1.29 at the port of entry. Moreover there is an excise tax of $1 per hundred pounds. In order to maintain this control the excise tax and import duty have been obliterated. So right away we have a concealed bonus or tax upon sugar amounting to $2.29 per hundred pounds, subject to the slight modification that the $1.29 applies only to the general tariff, which would mean sugar coming from sources other than British. At the present time that preference is not allowed, but if you wish to indulge in the fiction of considering that preference to be in effect, we must remember that we get 40 per cent of our importations of sugar from Cuba and San Domingo and the remainder from the British West Indies. The result is that, there is a concealed benefit or subsidy being paid by the taxpayer, amounting to something over $18,000,000 a year. So when the housewife begins to understand that the fact she is getting sugar for a little less means that a great deal more is taken out of her husband's wages in order to pay taxes, she is not going to be as enthusiastic about wartime controls as she may be at the present time.
But, Mr. Speaker, that is not the whole story. When you add to these hidden bonuses and subsidies, which are not declared, the cost of administration; when you add the cost of paying and maintaining the hordes who are checking up on all manner of dealers in sugar and other commodities all over the country; when you add the cost of the detectives, the snoopers, the people following up one another to see that the government employees themselves are honest, the people who are endeavouring to ascertain whether or not these controls are being respected in their minutest details; when you take all that, plus the cost of prosecutions, and compare that cost to the price that would

normally prevail if there were complete freedom, I venture to suggest that we are paying more per pound for sugar and more per quart for milk with the controls on than if they were off-and controls are still on milk, to the extent that it is affected by the sale to Britain of quantities of cheese, which sales are controlled and subsidized.


Mr. GLADSTONE:: We still have a long way to go to reach the 25 cents a pound for sugar we paid after the first war.


John Thomas Hackett: I did not understand the hon. gentleman, and I hope he will pardon me if I do not answer him, because I have a limited time and I wish to get on.


Robert William Gladstone: I say we paid 25 cents a pound for sugar after the first war, and present prices are still a long way from that.


John Thomas Hackett: We have heard a great deal about what happened after the last war. W e did go through a short period of turbulence, but we escaped the clutches of all these controls and got back on our feet again. What are we doing now? Last year we passed the National Emergency Transitional Powers Act which continued these controls, and this session we are asked to pass legislation continuing other controls. We find the spirit of control creeping in and popping up in most unexpected places. The Minister of National Defence (Mr. Claxton) was here a moment ago. Only the other day, in a committee of this house, this same cloven-footed animal, control, popped up and a provision was inserted in the Patent Act giving the government the right to expropriate at any time anyone in the department felt it wise to do so. This simply means that anybody with a patent which is worth while, which might be used for defence purposes, would never bring it to Canada. By these controls we are shutting the door on inventions and denying ourselves the benefit of the genius of our people.
Again let us talk about prices. I should like so much to see this brought into the light. Let me tell hon. gentlemen of a practice that is going on in my constituency. Merchants are driving their trucks into neighbouring villages in New England, and there they are buying from retail merchants, at retail prices, certain kinds of goods such as paper products, originating in Canada, and others, such as coffee and other products, originating outside the United States, and bringing these goods to our ports, declaring them to customs at the retail prices which they paid for them, and

The Address-Mr. Hackett
putting them on the shelves duty paid in their stores at prices lower than those at which they could buy them wholesale in Canada.
When one encounters a condition of this kind one feels there is something terribly wrong in this whole system of controls. We have put up with it for a long time. We are paying taxes, higher probably than those paid by any other people, taxes which are driving our young folks away from home. We are paying taxes which are making it difficult to get into the production of controlled goods, with the result that our manufacturers are turning their efforts to the production of goods which are not required or which have not come under control, in the hope of getting some return on their invested capital.
And why do we proceed in this way? The people of Quebec are utterly dissatisfied with this type of control. They resent it; they have no respect for it; they feel that it is so unnecessary that any means of evading, avoiding or getting away from it is lawful. The result is that our courts are filled with prosecutions of those evading the law. But these people feel they are doing no wrong, because they have no respect for the law in its present form.
Why do we follow the programme of the socialists? Their programme was clearly stated at Regina, and I took occasion to read it only a short time ago. If the hon. and capable gentleman who leads that party had been called upon to form a government I do not believe he could have hoped to make more rapid progress, along the lines of socialization of the great industries and great undertakings of this country, than has the present government.
We find all these theories indulged in, and we ask: Where have they ever succeeded? What is there to lead one to believe that socialism can give any relief to anyone? Name a country which has profited or benefited under socialism. Name a country which has not lost in prestige, lost in liberty, lost in everything we hold dear, when it yielded itself up to that form of government, a form of government which inevitably culminates in-


Mr. IRVINE:: Good living.


John Thomas Hackett: I was going to say serfdom: but I hesitate to use that word because I have heard it used so often in the house.
Let us turn to England. There is no one in the house who does not admire the effort England made in the last war. Yet today we see her under a socialist government, listless, her hands paralyzed, as it were, and her heart
no longer responding to the thrill of the anthem that Britons never shall be slaves. Today they are not producing enough to keep themselves alive; and there does not seem to be any intent or wish on the part of those who are in key industries to make the effort necessary to redeem themselves from the difficult position in which they find themselves.
I felt that in this debate it was well that at least one person coming from a province which is traditionally individualistic, a province which speaks for itself in most matters and which, as I believe all hon. members opposite know, is opposed to these controls en bloc and in detail, should raise his voice in protest. It seemed to me the government should be given this information from the opposition, if not from its own members.
We are gradually slithering into a position from which it will be very difficult to emerge. And so long as the people have no confidence in socialism-and I still think the people of Quebec are hostile to its doctrines, believe that it is detrimental to the general welfare of the country and will ultimately cause them great grief-I believe the people of that province should have at least one spokesman in the House of Commons, even though he may represent a feeble minority, to say that Quebec does not want socialism; does not want controls.
After all, on this continent there is no place for two social philosophies. The great nation to the south of us has been the determining factor in most of the important decisions Canada has taken. That may be our misfortune, but it is a fact. A socialistic Canada cannot hope to live in harmony beside a free-enterprise United States. And when wre enact legislation such as the foreign exchange control bill, which impounds dollars which Americans brought here in good faith, in the belief that they had a good investment and could take it home with them when they saw fit, we are breaking faith with a friend.
It is well that we should understand that we are not merely slipping or slithering down the Gadarene slope; we are rushing down it. The amazing thing to me-and this is one of the peculiar aspects of my situation in parliament-is that most of my intimates who sit opposite say nothing. I wish my friends would find it in their hearts to say what their constituents tell them about controls. I wish they would find it in their hearts to vote as their constituents suggest to them they should vote concerning these matters which effect us so vitally.


Mr. FREDERIC DORION (Charlevoix-Saguenay) (Translation):: Mr. Speaker, I
The Address-Mr. Dorian

believe that the hon. member for Stanstead (Mr. Haekett) has just given, us an exact picture of the feeling which now prevails in the province of Quebec, particularly with reference to controls; personally, I hope to have the opportunity, when this bill is introduced in the house of stating what the electors of my riding think of the wartime prices and trade board and of controls. Since the opening of the session, the following excerpt from the throne speech has given rise to a great deal of commentary:
Since the last session of parliament, negotiations for tax agreements have been carried on with certain of the provinces.
And further:
Tax agreements have now been reached with several of the provinces.
We know of course that several provinces have still not deemed fit to enter into an agreement with the Dominion government. I maintain, therefore, that the present rift between the federal authorities and several provincial legislatures threatens to widen to the point of upsetting the structure of confederation.
It is not my duty to uphold the position taken by provinces such as Nova Scotia, Ontario and Quebec. The spokesmen of those provinces have expressed their opinions much more clearly than I could have done myself. On several occasions they have asserted their rights and they are in a better position than anymne else to defend the interests of their respective provinces.
As federal representative of one of the most important constituencies, I contend-and I am sure that I express the opinion of my electors-that the dominion government's attitude in dealing with the provinces constitutes a tremendous threat to our country's unity.
By deciding to sign separate agreements with certain provinces, the federal government dangerously aggravates the few dissensions which may have existed between certain provinces owing to the differences of interests which naturally have always existed.
Those separate agreements tend to rouse the provinces one against the other and favour the annexation movement in the western provinces and the separatist movement of Quebec, all this to the detriment of the Canadian nation.
I hope that I may be wrong, but I maintain that the present attitude of the government in this matter may have disastrous consequences.
My constituents have asked me to seize the first opportunity afforded me to express, on their behalf, the strong resentment which they
[Mr. Dorion.J
have felt upon hearing that strangers holding important posts in our country took upon themselves to teach us lessons in morality or to insult what we hold as our dearest and most precious heritage.
Since the beginning of the session, we have heard from all sections of the house justified grievances against the treatment meted out to our country by the so-called "Big Four."
I was particularly impressed by the speech of the hon. member for Portneuf (Mr. Gauthier) who uttered hard but true statements. I remember, Mr. Speaker, that in March, 1945, along with a few other colleagues, I shocked the house when I stated that I had little faith in the united nations organization, as contemplated. I said among other things:
This resolution deals with the safeguard of mankind and the important part Canada is called upon to play in the organization of a new world.
Obviously it was not anticipated at the time in what position Canada would be placed by the great powers. And I added:
If the powers that will control the conference were all democratic powers, we might perhaps entertain some hope; but when we know that the one which exerts the greatest influence upon others is a dictatorial power, just as the one we are now fighting, we cannot expect very efficient results.
It seems to me, Mr. Speaker, that the fears I then felt on the score of international relations were not so senseless or unfounded, especially when we consider that our country, one of the few in the whole world that fought with the greatest unselfishness, is disdainfully, I would even say contemptuously kept out of international conferences.
We had not possessions to defend; we did not need to wage war to extend foreign markets. We believed or rather imagined that we were being commanded to take part in the war by the desire to rid the world of subversive forces, especially of elements undermining civilization and Christendom.
What a disillusion, what a brutal awakening to realities, when, today, we see the countries that we have specially helped, under the rale of reactionary opportunists who are attempting to deprive a suffering, an almost dying people, of the only particle of ideal that may help them to some extent, to endure the sufferings which are their lot.
Indeed, every one knows that, through iniquitous and numberless prosecutions, by open persecution even, launched against religious authorities, both Catholic and Protestant, an attempt is made to do away with all thoughts of religion, in these people.

The Address-Mr. Dorion
We have not rationed our help to France, either during or after the war; we thought that, on the day of deliverance, we would recognize her as we had known her in the past, and especially in the light of memories she had left among us, in Canada. But what a change we have noticed. Of course, I am not referring to the real France, which still exists in the hearts of all French patriots and which, sooner or later, will come to light again, I am sure, for that France, true France, can never die.
I am speaking of what is commonly known as official France, which we know through her government and her foreign representatives.
After having tendered our help with so much generosity, we had the right to expect that, in view of her present situation, her representatives would not attempt to give us lessons in domestic government and so-called culture, as they have done quite recently.
If there is one country from which we would never have expected insults, it is certainly Yugoslavia. We did not hesitate to contribute most generously to the assistance intended for the people of that nation. We might perhaps have asked ourselves whether the government forced on that country after the war was one which we could trust, but we overlooked all such considerations and our only thought was to relieve the distress of the people. We did more than our share and we could reasonably expect some gratitude instead of insults such as those which the consul general of Yugoslavia in Canada has just directed to one half of this country's population. We could not expect the recipient of our food gifts to bite the hand of his benefactor and to spit in his face by insulting His Holiness the Pope. I have here an article in which Mr. Emile Benoist reports, in Le Devoir of March 10, an interview given by the consul general of Yugoslavia in Montreal. Here is what Mr. Benoist has to say:
We shall translate as literally as possible the first part of that interview*:
The consul general of Yugoslavia, recently appointed in Montreal, Mr. Zaco Popoviteh, lays on the Roman Catholic church the blame for "the highly coloured reports" of the trial of Yugoslav Archbishop Stepinac, on charges of collaboration with the enemy.
Much has been written about Stepinac, said Popoviteh in an interview', but most of the information is misleading.
We allowed Stepinac to defend himself, but the crimes he had committed were so great that he could not do so. He said that he knew nothing about the slaughter of those Serbians who had refused to become Roman Catholics, but the evidence against him was overwhelming. Neither the Pope nor Stepinac protested against those outrages, but the Pope now claims that the Catholics are persecuted in Yugoslavia.
That statement is absolutely untrue.
In my opinion, the time has come for Canada to prepare a manual of etiquette for the benefit of certain foreign representatives. Moreover, we are somewhat to blame for this unpardonable audacity of the Yugoslav representative in Canada. Indeed, had the Canadian government given effect to the request of hundreds of organizations and of thousands of individuals; had it picked up enough courage and protested against the unjust and despicable way the Yugoslav government treated Archbishop Stepinac, because he was a Catholic, it is quite probable that this new consul would not have dared vent the way he did his ill-humour, upon his arrival in this country. And again today, if the Canadian government accept, without sounding a protest, the insults of this individual, it thereby encourages this man and others like him, to go on insulting us in our own house.
The people insist that the government take a firm and courageous attitude and I hope it will not fail in its duty. There is but one solution to this problem, namely that the Canadian government make the necessary representations to the Yugoslav government to the effect that this representative be called back as soon as possible.
Mr. Speaker, I should like to say a word concerning the amendment to the amendment now before the house. The hon. member for Laval-Two Mountains (Mr. Lacombe) clearly stated what he thought of it, and as far as I am concerned. I fully endorse his remarks.


Mr. PHILEAS COTE (Matapedia-Matane) (Translation):: Mr. Speaker, I wish first of all to congratulate my deskmate in this house (Mr. Courno.yer) on his splendid victory in the constituency of Richelieu-Vercheres. I also congratulate him on his maiden speech.
(Text):
I should also like to congratulate my honoured colleague from "Little Chicago", the hon. member for Prince (Mr. MacNaught) on his address. He has proven once more that the crown prince of Prince Edward Island is good timber for the King's cabinet.
(Translation):
Mr. Speaker may I now call to the attention of this honourable house the demise of my two predecessors as federal representatives of the constituency of Matapedia-Matane, Mr. F. J. Pelletier and notary J. L. Dionne. The former was member of the house from 1917 to 1925, the latter from 1925 to 1930. Both passed away in the year just ended, after having, in their own way, admirably served their constituents and their fellow-citizens.
The Address-Mr. P. Cote

Both served the Liberal party and their country equally well. I again extend my sympathy to both families.
(Text):
I had no intention of participating in this in this sort of academic debate, but since the hon. member for Muskoka-Ontario (Mr. Mac-donnell) lifted the lid on the chicken, cooked, stuffed and dressed by the financial bigwigs, I consider it an elementary courtesy to thank him briefly for his helping. The hon. member for Muskoka-Ontario is well known throughout the country as the former president of the National Trust Company of Toronto, and as the financial critic of the Tory opposition. Therefore nobody would dare connect him with anything but big business, financial interests and trust corporations, which, of course, is in perfect harmony with Toryism and reactionary political concepts. So when, the other day, namely on February 7, he took the stand taken by the Tory premiers of Ontario and Quebec with regard to federal-provincial relations, he was in good company and vice versa; for the old saying is always true: "Dis-moi qui tu frequentes et je te dirai qui tu es." But that union of the bigwigs of finance with the premiers of Ontario and Quebec gave us more than a flavour of what was cooked in the oven of Toryism in this countiy. It also gave us a taste of the real meat they are serving us as well as the gravy with which they are covering it.
Yes, indeed; at long last the hon. member for Muskoka-Ontario, with his unbiased frankness, told us that the people he represents fully share the views of Messrs. Duplessis and Drew, although he let pass a wonderful opportunity to tell us why their sharing the views was not altogether in harmony with sharing the wealth; or maybe it was simply because he was trusting that we would analyse it. Well, let us do so. Why is it, then, that the Tories and the financiers in this country get together aboard this political bogey of provincial autonomy? Would it by any chance be for the same reason that they got together against family allowances? Let us see, and let us see, first, what is the federal proposal to the provinces and, second, what is the aim of the federal government with regard to these proposals. After that, we shall see why the Tories and the trustards are once more like "larrons en foire" on this issue.
The federal proposal for the provinces can be brought down to this: allow us to levy taxes, part of which you could yourself levy according to the constitution; for we want to assume the cost of social security legislation so as to make it uniform across the country,

to say nothing of the financial help we could give you in return for the opportunity of coordinating on a nation-wide basis the reconstruction programme of our streamlined period of the atomic age. In other words, the Mackenzie King government says to the provinces: "We need to exercise a right to taxation to go on with our programme for sharing the wealth. We need that right to draw revenues from those who have so as to give to those who have not." The Mackenzie King government goes on saying to the provinces: "Look. You ought to know why we do ask from you these rights, and there should be no suspicion in your minds about what use we are going to make of them, because you ought to know, by now, what we have done with them while you let us use them."
And for the sake of those who have eyes and see not, let us repeat here what was actually done by the Mackenzie King government with the use of the provincial rights on one hand and the money of those who had ability to pay on the other. The provincial rights temporarily iend-leased to the federal government served first the purpose of implementing a policy of sharing the wealth through social legislation, as for instance, the family allowance, old age pensions, unemployment insurance, et cetera, et cetera; and secondly served the purpose of implementing a policy of asking those who have ability to pay, to do so, for the benefit of those who cannot.
The family allowances, for instance, since established by the Liberal government, have taken from the pockets of those who had, the sum of approximately $800,000,000 which was devoted to those who unfortunately had not. But with the provincial rights of taxation given under terms safeguarding the minority rights and the provincial rights-and here there is nothing to impair the provincial governments for the purpose of safeguarding these principles to collect a small proportion of these taxes-this government, I am sure, would soon find occasion to implement a national system of state medicine for the benefit of all instead of letting medicine service the few. I feel certain that this government would put into effect very soon a better system of employment insurance. I am also sure that this government would soon find ways and means of assisting the crippled, as I believe that shelter, food and clothing could be made available to all at a much higher standard of living than the present.
Let us not forget either the reconstruction programme of the very able right hon. minister, who only waits for the green lights from

The Address-Mr. Blackmore
the provinces to proceed with his loaded vehicle. May I briefly point out here some of the public works badly and urgently needed and which cannot be undertaken before the federal government secures from the provinces the right to proceed with them, and may I venture to list some of these projects: civic centres, public markets, sewage systems, water mains, exhibition grounds, railway crossings, tunnels, viaducts, sidewalks, et cetera, et cetera, et cetera.
All that involves, of course, a great deal of expenditure which cannot but come from taxation. And as the Liberal government's fiscal policy is to get the money from those who have the ability to pay, in other words the rich people, the latter, through their representatives who are always the reactionary-minded people, the Tories, here in this House of Commons, the financial critic of the opposition and in the Tory provincial houses, Messrs. Drew and Duplessis, the bigwigs of finance, I say, fight and fight like "diables dans l'eau benite" to quash the costly welfare programme and reconstruction scheme of the Mackenzie King government. Afraid of openly, directly and squarely opposing social security legislation and the government's programme of reconstruction, the Tories and the bigwigs of finance-today in span, tomorrow in tandem, but always pulling together in the reactionary direction-fear the potential costly resentment to their unpatriotic egocentricism and are only too glad to hide behind the smoke-screen of so-called autonomy.


Mr. McMASTER:: Has any member of the government seen and approved the speech which the hon. member is now reading?


Mr. COTE (Matapedia-Matane):: I can answer my hon. friend without hesitation that the Liberal party is a house of many mansions and we do not need to submit our speeches to anyone, as members of other parties apparent^ must do. Once more, I wish to thank the hon. member for Muskoka-Ontario for his debunking.


Mr. J. H. BLACKMORE (Lethbridge):: Throughout the debate on the speech from the throne the social crediters have maintained that the government should have indicated that change of policy which would make for the removal of the causes of depression. Social crediters have contended that the government has evinced no signs of any awareness of such a change being necessary. Apparently they think that all is well. There has been no hint of any knowledge of the nature of such a change and no disposition to discover the character of such a change if it
were needed, or to make such a change if the discovery were made. In other words, Mr. Speaker, the stand which seems to be taken by the members of the government and of the official opposition is simply this, that all is well, that we can go forward forever with the system we are using right now. Our financial system is perfect they assume; our economic system is perfect; all we need is more international trade. That seems to be the attitude of Liberal members and it seems to be the attitude of Progressive Conservative members.
Social credit has maintained from the beginning that government members have no justification for assuming that complacent attitude; that there is every indication on the contrary that we are hastening to a collapse, and that wise members and a wise administration would be looking into the possibilities of finding ways and means of heading off a collapse and avoiding depression. This has been the contention of social crediters ever since this parliament was elected in 1945. It is their contention today, and that is why social crediters are opposed to the financial policy of the present government.
Social crediters are not arguing that the government is not doing wisely in many respects. We are not finding any particular fault with the government, since it is operating under the present financial system; but we are warning that the present financial system has run its course and must be changed, and. we are holding the government responsible for recognizing that fact and devising the change necessary and taking measures to implement that change.
Social crediters, through an amendment, have endeavoured to direct the attention of parliament to what they believe is the nature of the change which is essential to avoid depression, and we invite and urge the members of the house to support our amendment. In the years to come, if all goes well, men who take the trouble to read the record of these times will be astounded that the members of this house have sat through twelve years or more of sessions completely disregarding reforms so earnestly advocated and so obviously necessary as the reforms which social crediters have advised since coming into this house.
We once more present these reforms in the form of an amendment. It is the sacred responsibility of the members of the present parliament to discover the cause of depression and of debt. It is also our sacred duty to discover the cure for depression and debt. Finally, it is our solemn obligation to cause to be introduced those measures which will
13v-
The Address-Mr. Blackmore

apply the cure for depression and debt. The cause of coming depression and the cause of debt can be found; the cure can be found, and the corrective measures can be devised and applied within the life of the present parliament. It all depends on how open-minded, progressive, public-spirited and earnest the members of this house are.
There is no time to lose. The situation is urgent. For the assistance of such members as are studying this matter-and I am sure there are a good many in this house and in the country-may I read a statement which is found in a most interesting and instructive book called, "The Principles of Currency, Credit and Exchange," written by Doctor William A. Shaw. I believe it would be well to give an idea who this William A. Shaw is. He is the secretary of His Majesty's treasury in England, or was when the book was wntten. He is the author of "History of Currency", "The Theory and Principles of Central Banking" and so on. He is editor of the "Calendar of the Treasury Records". He has done those things in his career and has had those opportunities to investigate and learn, which, I believe, entitle him to the greatest of respect by all people who desire to learn the facts about banking and moneys. The date of publication of the book was 1934. On page 5 of the preface there appear these words:
There is no inherent or scientific necessity for an ever-recurring cycle of over-trading followed by disaster and depression. The cause of that recurrent phenomenon lies hidden in the financial structure of the modern world and it is removable. If our civilization is to survive it is imperative that such cause be removed without delay.
I ask hon. members of the Liberal party, of whom a great number are sitting opposite to me and listening courteously to what I have to say, if words as solemn and as portentous as those can be safely disregarded.


Mr. BRUNELLE:: Was the system ever tried in England?


John Horne Blackmore: I will give some discussion on that. That is a very fine question. Of course there are some light-minded laughs, based on the assumption which many people make that Social Creditors do not know what they are talking about. No more serious error can be committed by members of this house than to assume that Social Crediters do not know what they are talking about, because they have the best authorities in the world behind , them, and they have the facts of the present situation behind them. All that is

necessary is that attention be given to the things we urge, and hon. members will all. begin to get a grasp of the situation.
The hon. member for Champlain (Mr. Brunelle) has asked me if the Social Credit system has been applied in England. Before I finish my talk here, I am going to point out to the hon. member that when the British government began to use the Bradburys, the treasury notes, in world war I, the British government began to use debt-free money backed by the social credit of England. It was not called social credit, but the principle was there. It was the state creation of debt-free money in the form of Bradburys. The British government saved the British banking system, the Bank of England, and all the other banks of Britain, with the Bradburys. This is a fact beyond all possibility of controversion. How did it work that way? Well, it worked. That is the significant thing. The Bradbury took Britain through the war successfully. It took her through the inflationary period which was likely to follow the war, and was carrying Britain safely into the waters of peace when Winston Churchill, through one of the most colossal blunders ever committed, I suppose, by a statesman in the British commonwealth, allowed the principle of the Bradbury to be discarded and permitted the Bank of England to regain control of the financial policy of Britain. He confessed in 1932 that it was a colossal error.
The hon. member asks me if the principle of social credit has ever been applied. The first fundamental principle of social credit, which is debt-free money created by the state, independent of a bank, was applied in the Bradburys in Britain in the first world war. There will be other examples of debt-free money which I will give the hon. member before I finish my speech. May I thank the hon. member for that question.
It is, of course, important indeed that we find out. whether or not social credit has ever been tried. Social credit, as a whole system of technique, has not been applied anywhere in the world. Otherwise I do not suppose it would ever have been discarded. But the principle of the aeroplane was never applied, nor was that of radar applied until someone invented it. Then it was used. The principles of the telephone were not applied up until a certain time. So it is with every invention. Parliamentary government had never been used up until a certain time.


Mr. LOW:: And there were unthinking people who said it would not work.


John Horne Blackmore: Certainly. The fundamental principle upon which the perfected

The Address-Mr. Blackmore
structure is based had been tried exactly as was the case with the automobile, for example, or any other great invention. The discovery of the principles upon which the construction was based had been made, were known and were put together by those who were sufficiently skilful to put them together and who saw the possibilities. Do I answer the hon. member's first question? I thank him once more for it.
May I now revert to the quotation which I read, and may I most earnestly urge the members of the Liberal party and of the Progressive Conservative party that they give this matter the most solemn consideration. I wish the hon. member for Muskoka-Ontario (Mr. Macdonnell) who, I suppose, is one of the financial authorities of the Progressive Conservative party, were in the chamber now. I should like to talk to that hon. gentleman in a very straight manner this afternoon. I hope his friends will tell him that I have talked to him, and I regret that he is not here at the moment.
Let me read another quotation to show how serious is the situation we face and how convinced Doctor Shaw is that a solution can be found. On page 8 of the preface of the same book which I have just quoted, we find these words:
What hope is there-
He is thinking now of the possibility of applying debt-free money in the United States and he sees that debt-free money would solve the problem of the United States and would prevent war. He had this to say:
What hope is there for such reform in the United States? To this we simply reply. It is no longer a question of hope. It is now a case of reform or death-death to our civilization. The world cannot stand another crash.
You cannot disregard words like that, Mr. Speaker; you cannot disregard a man of Doctor Shaw's quality.
Social Crediters attacked the C.C.F. amendment and voted against it, because the C.C.F. proposals of government ownership more or less of Canadian industry and government ownership of Canada's financial institutions contained no germ of a solution of our economic problems. I reaffirm that and will defend that stand against anyone who may rise and oppose me in this house or outside this house. I repeat: in the two fundamental socialist proposals there is not even the germ of a solution of our problems. That solution is to be found somewhere else. As I said the other day, the C.C.F. proposals merely confuse the minds of the people. Application of
the C.C.F. proposals would do no good and would probably, and almost certainly, do Canada great and perhaps irreparable harm.
I do not want to be anything but kindly, but I must be straightforward and frank. I wish to congratulate the C.C.F. members who have participated in this debate up to the present time upon the high standard of the speeches they have made. That is what I desire to see. There is no need for us to make nasty insinuations and remarks against each other. We are, all of us, looking for the truth. Now let us discuss matters until we find the truth. I should like to commend the hon. member for Vancouver East (Mr. Maclnnis) and the hon. member for Cariboo (Mr. Irvine) for the high quality of the speeches they contributed to this debate yesterday. In my judgment there were some respects in which they were inaccurate, but in many respects they were accurate.
Why do I say government ownership of industry could not do any good? Well, I put the argument before the house the other day. Our problems are two. First, we must have in Canada ample production; second, we must have in Canada ample consumption to consume the goods we produce. If a proposal is to be of any value to us it must either increase production or increase consumption. I argued, I believe quite successfully and beyond contradiction, that government ownership of the industry of this country will not materially increase production, and it cannot increase consumption, for reasons I have set forth and need not repeat. The cause of our troubles does not lie in industry. May I read one more passage from the same book, which I still hold in my hand. I am not saying this man is an authority whom the C.C.F. should accept; nevertheless consider his qualities; he is a man worthy of respect. This is what Doctor Shaw says at page 12 of his preface:
For the hidden main spring of all the cyclical movements and evils of the past has lain in finance and not in industry.
That is a matter of really serious concern, is it not? It shows the kind of thing on which we should be concentrating our attention as something which might give us a solution. The C.C.F. propose to nationalize or socialize our financial institutions. I can imagine that some hon. members of the C.C.F. who are sitting here so courteously today giving me a hearing, for which I greatly thank them, may say, "Well, we propose to nationalize the financial institutions; we recognize that the trouble lies in finance." My answer is that the nationalization of the financial institutions is
The Address-Mr. Blackmore

not the solution; it is the use you are going to make of those financial institutions that will decide whether or not they can solve your problem. If you should have government ownership of your financial institutions before you had any policy that was satisfactory to meet the situation, you would probably only increase the difficulties confronting you. I believe, and I think I could successfully establish, that the C.C.F. have completely missed the point once more in this respect, in advocating the nationalization of the financial institutions instead of the introduction of a policy.
Now, with the indulgence of the house I should like to read a short passage from my previous speech so that I may fit in a remark made by the hon. member for Cape Breton South (Mr. Gillis), which I appreciated very much. I want to go on and give him the answer which at that time I promised I would give. At page 1129 of Hansard for March 7 I said:
It is not necessary for the government to have ownership of any of the financial institutions in order to bring about fundamental changes in the financial policy of the country which would enable the country to finance consumption. Let that clearly be remembered.
The hon. member for Cape Breton South said, "Explain." I replied:
I can explain it. However, I have not the time to do so now.
Considering the amount of time it took me to develop my talk the other night, I think hon. members will recognize that I did not have time to deal with that matter then. May I now proceed to keep my promise to the hon. member for Cape Breton South and other members of the C.C.F. who may be interested in my answer to the question. First of all, may I direct the attention of the house to the Canadian mint. It is not part of any Canadian bank. However the Canadian mint creates money. It will take a certain amount of silver, stamp it, make it legal tender, and probably double its value. In other words, in a twenty-five cent piece, we will say, it creates probably twelve cents of new money, debt free. No bank is needed to create that money; no bank needs to stamp it.
Now suppose you had a government agency functioning as the mint functions, only that instead of stamping twenty-five cent pieces of silver it stamped twenty-five cent bills or dollar bills. It must be obvious to every hon. member that by stamping those bills the government would obtain new money which did not have to be collected by taxation and did not have to be borrowed, but would be just as good as any other money in the world. Surely
fMr. Blackmore.]
no one ever questions the value of a twenty-five cent piece stamped by the Canadian mint. It is just as good as any money to be had in the world. Then, if we need new money for consumption purposes, obviously the government can create that new money through a facility which is not part of any bank or banking system.
That was the idea I would have developed for the hon. member for Cape Breton South. I would have gone on to point out to him one or two cases in history where such a thing had been done.
Once more I return to the most interesting and earnest question asked by the hon. member for Champlain (Mr. Brunelle).


Hervé-Edgar Brunelle: But please be as short as possible; we want a vote.


John Horne Blackmore: That is right, but we are here to do serious business for this country.


Hervé-Edgar Brunelle: I am convinced; go
ahead.


John Horne Blackmore: The British had to use this monetary device between 1914 and 1920; and I believe I shall explain it to hon. members, or to those of them who have not studied this particular point.
In England, when the war broke out in 1914, they were on the gold standard. Consequently all the money in circulation, as a result of all the activities of all the banks in England, was backed by gold. Just as soon as people began drawing their gold out of the banks and sending it out of the country, immediately the money of Britain lost its backing and had to be withdrawn. The Bank of England and the banking system of Great Britain told the government they would have to close their doors within two or three days after war broke out, because gold had been withdrawn from the banks and sent abroad.
This was a crisis of the first magnitude. What did the British government of those days do? Did they say, "We will have to lose this war because we have not gold"? No. They said, "We have goods and services; we have the ability to produce them. We will go ahead, and have money that is not based upon gold." Then they created treasury notes, and said to the Bank of England, in effect, "People will come to you asking for gold. Tell them you have not got it, but you have treasury notes. These treasury notes are backed by the whole power of the British nation; consequently they are better than any gold. And if people say they will not accept them, let them wait until they will accept them."
But the people accepted them. The government went on creating, until in 1920 they had 354 million of them in circulation. The British government bought all the gold coin circulating in Great Britain, using to do so paper Bradburys. They then used the gold to trade for goods from the United States. They financed the war on that paper currency, government created and debt-free. That was a remarkable experience. I commend the record to hon. members who are interested in this, and I can tell by the way they are reacting that a great many of them will wish to read it.
There are several books they might want to read. I have in my hand a most excellent one called "Currency, Credit and the Exchanges", published in 1927 by William A. Shaw. This book will give a simple and straightforward account of the facts of the whole experiment. I submit that it contains information of the greatest importance to hon. members and to the country. Then, another good book which they will want to read is "The Theory and Principles of Central Bank-

ing." This, too, was published by William A. Shaw-in 1930. He uses a great deal of the information obtained during the Bradbury experiment.
I submit that if hon. members will read these books they will find them most comprehensive and dependable, and most enlightening treatises on money and banking.
So now I turn from the examples we have had of state-created debt-free money, where it has worked successfully. These examples, Mr. Speaker, illustrate the first fundamental principle of social credit. The next question which I should like to discuss for a moment or two, before I take my seat, is as to how the money should be used. It is quite obvious that if the government went on creating money, and' just spent it right and left, disaster would result. The money would have to be used in the right way, just as water in an irrigation system has to be used in the right way. You just cannot turn irrigation water so that it will run willy-nilly over the land. It will cause havoc if you do that. Neither must you allow the water to collect in two or three places. You have to distribute it evenly and scientifically over the whole area to be watered, in a way which will make it do the greatest amount of good. Similarly with money you must distribute it over the whole economy, in a way which will enable the people to consume most fully the goods produced. How is that to be done?
In the first place, new money would be used in large measure for compensating discounts on prices. I shall have to spend a minute or two on that. I believe that the hon. member for Cariboo (Mr. Irvine) was just a little forgetful when he indicated that he had not been able to get any clear comprehension of the proposals of this group. Let me state them again as I have stated them twenty times already on the floor of the house. In the first place, social credit maintains that debt-free money can be created to the extent that there is a surplus of goods and services in the country not being purchased by the money which people are earning through wages and salaries and dividends from industry. That is the first thing.
Then social credit proposes to use that money, first of all, to discount the prices of manufactured goods. Take a binder, for example-and the farmers will be interested in this. Suppose a binder is offered for sale at $350 and the government decides that that is too high a price. The government undertakes to pay sixty dollars of the price. The government pays that amount to the manufacturer, enabling the manufacturer to

The Address-Mr. Blackmore
make a $60 discount and compensates him for making that discount. If that same principle, the compensated discount be applied to all manufactured goods in the markets, the prices of manufactured goods will be brought down substantially, and the first step will be made toward a just price-a compensated discount to bring down the prices of manufactured goods. That is just the opposite to inflation.
The next thing is to raise the prices of primary products, such as wheat, potatoes, apples and all the other products raised on the farm, the prices of which are notoriously low in bad times. The government can put a floor under these prices using debt-free money, and the floor can be raised to such a point that the primary producers can obtain a return for their products that will enable them to buy a fair amount of the secondary products with the returns from their efforts. Thus is established, through compensated discount and subsidy, the second great principle of social credit-the just price.
Along with that go just wages. The hon. member for Cariboo mentioned last night that there should be an increase in wages. Every member of this house knows full well that if wages are raised to the people who are working in a plant, if the plant has to pay those increased wages, the costs of the plant will increase and its product will be sold at a higher price.


William Irvine: Unless profits are lowered.


John Horne Blackmore: Even if profits are
lowered, a good many people will not be able to buy the goods at those higher prices, will not be able to buy the goods they ought to have. The hon. member for Rosetown-Biggar (Mr. Coldwell) and I have contended that no working man should receive less than $1,800 a year under any circumstances. But suppose a man is working in a plant which finds it impossible to pay a wage of $1,800 and carry on; what is to be done? The wages the plant pays out could be supplemented by a government bonus similar to the cost-of-living bonus that was granted during the war. This bonus would not be paid with money raised by taxation or by borrowing, but with debt-free money created in accordance with the amount of surplus goods and services to be found in the state. If this were done, hon. members can see that the money would be put right out into circulation where the people would use it for consumption, which is just what we want. This money could be put out into circulation without the government going into debt to 83166-84
the banks. It could be created and put out by what we call in our social credit terminology the monetary authority.
This is important to bear in mind. There are and will be a number of our C.C.F. friends and other members who will ask:	How are
you to make sure that the banks will lend money to producers to produce goods? Well, I have never yet seen a bank refuse to lend money to a producer when there was a good market for his goods. The banker will always say to a producer who comes in to borrow money: Are you going to be able to sell these goods at a good price? If you can, all right; I will lend you the money.
If the purchasing power is put into the hands of the people, as I have indicated, by the devices of a just price and fair wages, there will be no difficulty in having the banks lend the money; and if there should be any difficulty the government can use the device we used in Alberta. In Alberta we did not have power over our banking system. That power resided in Ottawa. But we felt that the banks were not lending as much money as they ought to. They were following -the policy that was dictated throughout the dominion. So we set up our treasury branches and cut down the interest rate and lent money on more generous terms. Within a surprisingly short time the ordinary chartered banks were lending just as freely as the treasury branch was and at as low a rate of interest.
That indicates how the government can control a monopoly, which is something which troubles our C.C.F. friends tremendously. The government can control a monopoly simply by financing an organization to come into competition with a monopoly and by giving the competing organization those favours which are necessary to enable it successfully to compete. We tried that in Alberta with the slight power we possessed and it was successful. So I submit that we need have no fear of the banks not lending money when we have sufficient purchasing power in consumers' hands. The banks would lend generously for production. Thus we would have a free flow of credit. The loans for production would be repaid or cancelled partly with debt-free money. May I pause there a moment or two.
Up to the present time there has been the danger, when banks have lent money, that they could not get their money back. It is obvious that with debt-free money going into circulation among the people the banks would have a far better chance of having their loans repaid. In many cases the loans would be partly if not wholly repaid with debt-free money. That is one way in which the debt-

The Address-Mr. Bracken

free money would be cancelled out of circulation. So there would not be the danger of too much of it being in circulation.
The banks lend money for production purposes but not to pay interest. But interest is necessary to encourage the banks to lend money. The banks also never lend money to pay a profit. If we are to continue under our system of interest and profits the finest way to enable us to carry it on is to have debt-free money which can supply means for the payment of interest and profits. That is another way to cancel debt-free money out of circulation.
There are people in this country who have expressed great concern lest a certain kind of abuse occur. They say: If you ever let the government-our Conservative friends will say, if you ever let these Liberals get control of the power to create money-they will create so much that we shall1 never be able to turn them out, because they will establish a fascist dictatorship in this country. I do not believe that, but to overcome that difficulty there are these safeguards. In the first place, in the Bradbury experiment the money was automatic, just as automatic as the money which is created in the mint, and no one ever suggests that the government is going to go into the mint and print or stamp so much money that it will be able to corrupt the population. Why? Because they never print or stamp money at the mint unless the banking system says that it wants this money, unless business wants the money to do business with. That makes it automatic.
There are several devices of making automatic the issue of debt-free money for consumption. The amount of surplus goods and services would limit the amount of money to be created. Parliament would supervise all the aspects of the process of creation and disbursement of created money much as it now does the raising and expenditure of money by taxation or borrowing. My time is exhausted, Mr. Speaker, I thank the house for its courteous attention.


Mr. JOHN BRACKEN (Leader of the Opposition):: Mr. Speaker, the immediate
question before the house is the subamendment to the amendment to the main motion on the address in reply to the speech from the throne. I am rising at this time not to supplement anything that I have said or that anyone else has said but rather to try to make clear, as briefly as I can, our position on the immediate question before us, namely, the subamendment. In what I shall have to say I shall offer neither criticism nor commendation of the remarks of any hon.

member who has taken part in this debate. I wish to say that on the whole the debate has, in my opinion, been conducted on a high level. I think those who have spoken from every section of the house have given their best judgment to the consideration of the questions before us.
In moving his subamendment on Friday last, the hon. member for Peace River (Mr. Low) asked four questions, I believe, and proposed certain principles or policies, seven or eight in number. He then moved his amendment which is expressed in four sections. Then the hon. member asked that we express our opinions with respect to the questions asked and that we state whether or not we concurred in the principles which he enunciated. I would not have risen at this time except that failure to say something might be interpreted as meaning that we were opposed to all of these things or that we supported them all, or some other incorrect interpretation might be put upon it. Briefly, I wish to deal wTith the questions now before us and I am glad to be able to say to the house that, as far as we are concerned at this time, this will be the last we shall have to say in the debate.
Speaking generally, I favour and we favour much the greater part of what the hon. member had to say. We approve the objectives he sought; and we agree with most of the means which he suggested for achieving those objectives. On the practicability and the utility of one or two of his suggestions I have some honest doubts. When I say that, I want the hon. members who represent the Social Credit party to feel that we are not in any way impugning their sincerity, or the faith they have in the principles they hold. If we do not agree with them in every proposal they advance we ask only that they give us credit for the same intellectual honesty that we give to them.
Let me refer first to the four questions raised by the hon member for Peace River. The hon. member asked whether the party I represent claims that under this government centralization has been intensified, taxes increased, the national debt increased to staggering proportions and bureaucracy carried to unusual levels. I do not need to make another speech to let the house know that the answer to each of these would have to be, yes. On several occasions I have said that taxes are five times as high as they were before the war and probably will remain four times as high. Our debt is four times as high or more, and our civil service twice or more times as numerous as it was before the war.

The Address-Mr. Bracken
With respect to the second point, the hon. member asked whether we claimed that the present government has in certain of its policies been introducing socialism while at the same time preaching a different doctrine. The nature of the debate I think answers that question. There is no doubt in our minds about it. Some of the legislation brought down, even at this session, leans toward totalitarianism.
The third question-and the house will pardon me if I deal with these briefly because I wish to get through by half-past five o'clock if I can-the hon. member asked is whether we believe that the government has been guilty of flagrant violation of its promises with respect to the men of the fighting forces. I shall only refer to one of the government's policies in order to answer that question. One has only to observe the housing situation to which these men returned to realize that the answer must be, yes. The inflated prices which young couples have to pay -for houses will keep many of them poor for half of their lives.
The fourth question of the hon. member was as follows. He asked if, in our opinion, the government had failed to preserve and vitalize true democracy in Canada, and if it had allowed conditions to develop which encourage the growth of communism and other forms of totalitarianism. One has only to recall two incidents in the recent history of the country to answer that question. One is the extent to which the cooperation of the communists was given to the government in the recent election and the infiltration of communists into the government service, resulting in the spy probe.
With these four criticisms of the general direction in which the government is going we are in entire agreement.
I come now'to certain policies or principles, upon which the hon. member sought an expression of opinion, upon which he sought either concurrence or non-concurrence. I do not feel that we have always to answer every question that every debater raises in the house; but, as I said before, in view of the fact that failure to do so might be interpreted either one way or the other and not leave the correct impression as to where we stand, I shall take a few minutes of the time of the house to make that clear. He asked if we concurred in these principles. Let me summarize them as briefly as I can and comment upon them as I proceed.
The first was that full and unfettered freedom shall be restored to the people of Canada. We agree with that, and I think by far the greater proportion of hon. members of nearly 83166-84i
every section of the house agrees. We agree with it to the fullest extent possible, short of infringement upon the rights of others.
The second principle was that all unnecessary controls, domination by state democracy, and centralization of power by a multitude of regulations shall be brought to an end. Mr. Speaker, the nature of the debate so far indicates where we stand on these matters. The answer is, yes. I have expressed similar views so often that there is no need of repetition here. I said so at an earlier stage of the debate.
The third principle upon which he asked for concurrence or non-concurrence was that crushing taxation shall be reduced by at least 30 per cent immediately. I have already said that on the basis of the government's own figures such a reduction should be expected. The hon. member went on to say that crushing taxation shall be reduced by at least sixty per cent within reasonable time. I am sure that W'e would all like to hope that that would be possible, but I am afraid I could not hold out such a hope and expect anyone to believe me, if the heavy commitments already made by the government and to which practically every hon. member is committed are to be carried out.
The fourth principle was that every Canadian shall be entitled to a social security income in addition to his earned income. This is being done now indirectly through the many social services provided by this country and, so far as I know, every hon. member has supported them.
Let me go on. He said that every Canadian should be entitled to a social security income in addition to his earned income, which would render him independent of state charity. I do not know that I understand the full implication of this statement. Certainly the purpose of our whole economy must be to enable everyone to have the opportunity of earning such an income, and the economy must provide it in cases where childhood, old age, accident, sickness or unemployment prevents it from being earned. But the hon. member's statement may contain implications beyond what I have suggested. Since that is probable, I shall refer to it again in just a moment.
The fifth statement of policy upon which he asked comment was this, that the paralysing restrictions on agriculture and industry shall be removed in order that the country's productive efforts may be free to enable adequate housing and other national requirements to proceed. I have been saying that for a long time. The fact is that all such controls as hinder production are a limitation on our
The Address-Mr. Bracken

standard of living and such controls should therefore be discontinued at the earliest time practicable.
The sixth principle upon which he asks us to comment is that farmers and other primary producers shall be assured a fair return for their services, and purchasing power sufficient to buy available goods. If I have said that once I have said it a thousand times in the last ten years. Jt is a basic part of our political creed. Practically every section of the house preaches that doctrine, though the extent to which it is practised by the government may be a matter upon which we would disagree.
The seventh point was that there should be brought about greater stabilization of wage scales and incomes. I know of no political party that does not agree with that objective. It must be obvious to all that this should be the purpose of any responsible government to the full extent that it is practicable in our complex economy. I am sure this government is endeavouring to reach that objective. But the test of government administration is in the results they secure. Certainly we must strive for these ends.
His eighth and last point was this, that parliament shall be made responsible to the will of the Canadian people. That is the principle upon which parliament was supposed to be established, and we must not depart from it. Then he added the statement that constitutional changes should be made to establish the legitimate rights of every Canadian.
If this means, to make the state the servant of the people and not their master, I am in entire agreement with it. I am in accord with the intent of my colleague, the hon. member for Lake Centre (Mr. Diefenbaker), in seeking a bill of rights making this a basic feature of the constitution of the country.
I come now to the amendment moved by the hon. member for Peace River (Mr. Low). It consists of four clauses, three of which I can support and one of which I do not comprehend sufficiently to have confidence in it. The first part of the subamendment would return to parliament complete control of Canada's financial policy. I do not see how anybody could disagree with that. The second part I shall refer to in a moment.
The third part would remove present discouragements to the production and availability of building materials and encourage the construction of houses. Well, we have had a long debate on housing here and it will not avail us much to say anything more now on the question; but that is what we here have all been trying to say for many months past.

The fourth part of the subamendment would clarify the relative rights and responsibilities of the dominion and the provinces in our federal system of government. That is one of the things that I have sought for ten years or more to have achieved-the correction of the errors of the present relationship-errors which I believe every thinking person in Canada admits-correcting them with the minimum of centralization and the maximum of provincial autonomy. It was only upon the acceptance of these principles that this confederation was formed; it will be only with their maintenance that it will stand against the adversities of the future.
With respect to the second part of the hon. member's amendment, I have some doubt; and in expressing that doubt, as I said before, I ask that he give to us credit for the same degree of intellectual honesty in holding our views as we give to him in holding his. That part reads as follows:
The use of the national credit to meet at least some of the financial requirements for essential services-[DOT]
That is not the most important part of it; the most important part follows:
-and, as a guarantee that this country shall not again be subjected to financial depression, to make available to each and all Canadian citizens a proper portion of purchasing power which shall not first pass through the usual channels of industry, etc. . . .
And so on. Mr. Speaker, if society generally had sufficient faith that such a financial policy would prevent depressions-and if it will I am sure we all wish success to hon. members of the Social Credit party in propagating that doctrine-if that is so, I feel sure that parliamentary bodies would, before now, have given wide support to it. Since, so far as I know, they have not done so, it must be because society as a whole has not confidence in it. It may be the fault is in our society; it may be the fault of those who are promoting the doctrine; it may be that wre are too obtuse to understand it. At any rate, so far the doctrine has not been widely accepted.
It is a fact, nevertheless, that in some degree such a guarantee is given now; and to the extent that such a fiscal policy has been or may be used for the support of definite public services such as old age pensions, unemployment insurance, family allowances, floor prices and so on, services that are regarded as being essential to the public good, to that degree I support it and I am sure practically everyone in this house supports it.

The Address-Mr. Bracken
But, Mr. Speaker, if this part means, as I suspect it is intended to mean, the issuance of money or credit indiscriminately, apart from definite public services, and for no service rendered, then frankness requires that I say I am not convinced of its effectiveness or its practicability. I have tried to keep my mind open on this matter, but so far I have not been convinced of the soundness of such a policy. At the moment I cannot see it in any other light than that it would be giving, indiscriminately, to some people, the earnings of others. I can subscribe even to that for certain purposes, such as for the aged, for children, for the disabled, for the unemployed and for public measures of social and economic justice. But I cannot bring myself to support an indiscriminate policy-I emphasize an indiscriminate policy-which in my present view would have the effect, even though indirectly, of taking from those who work and giving to those who can work but might not choose to do so.
Let me summarize what I have tried to say. I agree wholly with the hon. member for Peace River in his indictment of centralization. extravagance, and high taxation. I agree with him when he says that the government is guilty of flagrant violation of the promises it made to the men of the fighting forces with respect particularly to housing. I agree with him in his indictment of bureaucracy, communism and totalitarianism in every form. Generally speaking, I agree with the objectives outlined by the hon. member and for the most part with the proposals by which he hopes such objectives will be realized. But with regard to the particular proposal, namely clause B of the subamendment relating to the use of the national credit, I have very grave doubts as to its practicability and its utility. I therefore find myself unable to vote for that portion of the subamendment since it might leave the false impression that I am in favour of this particular fiscal policy, when such is not the case.


Mr. MARSHALL:: I was paired with the hon. member for Marquette (Mr. Glen). Had I voted I would have voted for the amendment to the amendment.



BUSINESS OF THE HOUSE

William Lyon Mackenzie King: Mr. Speaker, so as to enable us to proceed to have the next division forthwith, I would move:
That Mr. Speaker do not leave the chair at six o'clock this day.


John Bracken: May I be permitted to second that motion?


[Stage Direction]
Motion agreed to.


[Stage Direction]
The house resumed consideration of the motion of Mr. J. W. MacNaught for an address to His Excellency the Governor General in reply to his speech at the opening of the session, and the amendment thereto of Mr. Bracken.
James Horace King: Is the house ready for the question?


Mr. ANGUS MacINNIS (Vancouver East):: Mr. Speaker, I shall not delay the house for more than a minute. May I explain that this is a vote of no confidence in the government. If we vote, as we shall, with the official opposition, it does not indicate confidence in the official opposition any more than the vote we have just recorded on the Social Credit amendment to the amendment indicated confidence in the government.


Mr. GRAYDON:: Have you any confidence in yourselves?


Some hon. MEMBERS:: Question.


Mr. McLURE:: I was paired with the hon. member for Beauce (Mr. Dionne). Had I voted I would have voted for the amendment.
Motion (Mr. MacNaught) agreed to on division.


William Lyon Mackenzie King: That the said address be engrossed and presented to His Excellency the Governor General by such members of this house as are of the honourable the privy council.


[Stage Direction]
Motion agreed to.
William Lyon Mackenzie King: According to the rules of the house, immediately after the address has been agreed to, the house proceeds to set up the committee of supply and the committee of ways and means. Under a resolution of the house passed some days ago, the committee of supply has already been set up.



WAYS AND MEANS


William Lyon Mackenzie King: That this house will on Thursday next resolve itself into a committee to consider ways and means for raising the supply to be granted to His Majesty.


[Stage Direction]
Motion agreed to.
On motion of Mr. Mackenzie King the house adjourned at 6.20 p.m.
Thursday, March 13, 1947