1948-02-12

[Stage Direction]
PAYMENT OP 50 CENTS A BUSHEL TO PRODUCERS DELIVERING FLAXSEED TO WHEAT BOARD 1947^8
Right Hon. C. D. HOWE (Minister of Trade and Commerce):: Mr. Speaker, I wish to make certain announcements that will be of interest to Canadian producers of oilseeds.
During the current crop year, 1947-48, the Canadian wheat board is buying flaxseed at a price of $5 per bushel basis the top grade of both eastern and western flaxseed at Montreal and Fort William-Port Arthur respectively. There is a ceiling price at this same level which fixes the price to Canadian crushers on domestic supplies. Any surplus over domestic requirements of seed and oil is available for export. Existing trading methods require the use of this surplus seed and oil in arrangements with the other countries so that Canada may secure supplies of other essential oils. Under present regulations, the producers who delivered flaxseed to the Canadian wheat board are entitled to participate in any net profits that may arise. It has become apparent, however, that this participation cannot be a clear-cut, commercial proposition when so many arrangements between countries are involved and the government has decided to calculate and pay out to producers the participation that would have been involved on a fair and reasonable basis. This action has the double effect of settling the producers' interest in the flax and freeing government agencies to use the surplus seed and oil in arrangements for other essential oils necessary to the whole Canadian economy. The government has therefore accepted the recommendation of the Canadian wheat board and will authorize that body to pay a fixed and final payment of fifty cents per bushel to those producers who have delivered or will deliver commercial flaxseed to dealers acting as agents of the board during the crop year 1947-48. This payment will involve distribution of about six million dollars to Canadian producers.
An announcement with respect to the handling and marketing arrangements for flax covering the crop year 1948-49 will be made at the earliest possible date.
With regard to rapeseed and sunflower seed, it is also the intention of the government to authorize the Canadian wheat board to buy these oilseeds in 1948-49 on the same basis as in 1947-48, namely, at six cents per pound basis the top grade of each, f.o.b. shipping points named by the board.


Mr. MENARY:: Do I understand the
announcement just made is in answer to the question I asked yesterday with regard to flax?


Clarence Decatur Howe: Yes.


Mr. MANROSS:: That is that "flaxible" control.



UNITED KINGDOM


[Stage Direction]
On the orders of the day:
Mr. JOHN BRACKEN (Leader of the Opposition):: I wish to direct a question to the Minister of Agriculture (Mr. Gardiner). Will he table copies of the recent agreements concluded with the United Kingdom with respect to beef, bacon, cheese and eggs?


Right Hon. J. G. GARDINER (Minister of Agriculture):: I shall be pleased to table copies of the agreements made between Canada and the United Kingdom with respect to the products that have just been named.
(Translation):



DIPLOMATIC SERVICE


Mr. RENE HAMEL (St. Maurice-La-fleche):: Mr. Speaker, I wish to direct a question to the right hon. the Secretary of State for External Affairs (Mr. St. Laurent). In its issues of February 7, 9 and 11, 1948, a Montreal newspaper, Le Devoir, informs the Canadian public that, after a personal request had been made by His Majesty the King to the
Inquiries oj the Ministry

Canadian government, changes have recently been made in connection with the signing-


Mr. SPEAKER:: I regret to interrupt the hon. member, but I must remind him that when an hon. member puts a question, he should not give information to the house, but merely state his question.


René Hamel: My question, of which I have sent a copy to the right hon. the Secretary of State for External Affairs is this: Have any changes been made in connection with the signing of our diplomatic representatives' credentials? If so, what are they?
(Text):
Right Hon. L. S. ST. LAURENT (Secretary of State for External Affairs): The hon. member refers to three articles published in the newspaper Le Devoir on February 7, 9 and 11 and one said to have been published in the Chicago Daily Tribune on February 10 with regard to the effect of the letters patent constituting the office of governor general of Canada, which became effective on October 1, 1947, and he asks for an explanation in connection with the statements contained in those articles.
I received the hon. member's notice just three or four minutes before coming into the house, and I must confess that I had not read these articles. I have now obtained the articles and will give them careful consideration, but in the meantime I think it would be of interest, in view of the fact that the question has been raised, to place on Hansard the explanation which was given by the Prime Minister in a press release of October 1, 1947, dealing with the subject. I will then carefully consider the articles in question and see if there is any difference between what they contain and what was contained in the official statement; and if explanations are to be given as to differences I shall be glad to give them. The press release by the Prime Minister was as follows:
The Prime Minister, Mr. Mackenzie King, announced today that new letters patent governing the office and appointment of the Governor General of Canada had been signed by His Majesty the King on September 8, 1947, and countersigned by the Prime Minister of Canada. The new letters patent (the principal document relating to the office of governor general) come into force on October 1, 1947, and will supersede on that date the existing letters patent of 1931 (as amended in 1935) and the royal instructions of 1931.
2. The royal documents relating to the office of governor general had not undergone a careful revision since 1931. The Canadian government accordingly recommended to His Majesty the issuance of new letters patent consolidating the former documents and bringing them up to date.

3.	Apart from textual alterations designed to bring the new letters patent into line with constitutional developments and practices in Canada and within the commonwealth, the principal alterations may be summarized as follows:
(a)	By the introductory words of clause 2 of the new letters patent, the governor general is authorized to exercise, on the advice of Canadian ministers, all of His Majesty's powers and authorities in respect of Canada. This does not limit the king's prerogatives. Nor does it necessitate any change in the present practice under which certain matters are submitted by the Canadian government to the king personally. However, when the new letters patent come into force, it will be legally possible for the governor general, on the advice of Canadian ministers, to exercise any of the powers and authorities of the crown in respect of Canada, without the necessity of a submission being made to His Majesty. (The new powers and authorities conferred by this general clause include, among others, royal full powers for the signing of treaties, ratifications of treaties, and the issuance of letters of credence for ambassadors). There will be no legal necessity to alter existing practices. However, the government of Canada will be in a position to determine, in any prerogative matter affecting Canada. whether the submission should go to His Majesty or to the governor general.
(b)	The new letters patent revoke and supersede the existing letters patent and the existing royal instructions. The royal instructions have been incorporated in the new letters patent which have been issued under the great seal of Canada.
4.	No new commission of appointment will be issued to Viscount Alexander, the former letters patent having been revoked "without prejudice to anything having been done lawfully thereunder." Moreover, Viscount Alexander's present commission is a continuing one expressed to be subject to the existing letters patent "or any other substituted for the same."
5.	An appropriate proclamation will, as required by clause XVI of the new letters patent, be published today in the Canada Gaxette.
6.	Annexed to this statement is a copy of the new letters patent, with appendices giving the text of the documents in force prior to October 1, 1947.
That is the complete statement, and I will now table a copy of the letters patent and other documents referred to. As I said before, I will examine these articles to see whether they purport to make any statement of fact that would not be in conformity with the official press release, and give a further answer after I have made that examination.



DISCUSSION RESPECTING IMPORTATION FROM NEW ZEALAND OR AUSTRALIA

[Stage Direction]
On the orders of the day:
Mr. R. E. DROPE (Northumberland ,Ont.):: I wish to direct a question to the Minister of Trade and Commerce, a copy of which I have already forwarded to him. Has the question of the importation into Canada of New Zealand or Australian butter been discussed by

Foreign Exchange Conservation
any officials on behalf of the government with any officials representing New Zealand, Australia or the United Kingdom, and if so what decision has been reached?


Clarence Decatur Howe: Anticipating a possible temporary shortage of butter in April the government communicated with Australia and New Zealand to inquire whether butter would be available from either source in the event it is required. The replies indicated that there is still a strong requirement for Australian and New Zealand butter for the United Kingdom. Therefore the government has dropped the proposal for obtaining butter from those sources.



HUMAN RIGHTS


[Stage Direction]
On the orders of the day:
Mr. J. G. DIEFENBAKER (Lake Centre):: I should like to direct a question to the Prime Minister, having to do with press releases to the effect that Canada has made no recommendations regarding an international bill of rights. For that reason I ask the Prime Minister whether he intends to set up the committee on human rights and fundamental freedoms at an early date.


Right Hon. W. L. MACKENZIE KING (Prime Minister):: I have not seen the references my hon. friend has mentioned, but as I understand his direct question it is whether the government intends to reappoint the committee on human rights and fundamental freedoms. The answer is yes.


John George Diefenbaker: Then if I may ask a supplemental question, has Canada made any recommendations as yet with respect to the composition of the international bill of rights, or with respect to any rights which should be included therein?


William Lyon Mackenzie King: Obviously I could not answer that question without first conferring with the departments concerned. I shall regard it as a notice, to be answered later.



RENT CONTROL


[Stage Direction]
On the orders of the day:
Mr. DONALD M. FLEMING (Eglinton): In view of press reports of which the Minister of Finance is aware, I should like to ask him whether the government contemplates any change in the announced policy of permitting rent control on commercial accommodation to expire on March 31, in keeping with the statement made by the minister in the house on January 27, at page 593 of Hansard.
Hon. DOUGLAS ABBOTT (Minister of Finance):: No, Mr. Speaker. As long ago as June, 1947, I announced in the house that it was not the intention of the government to ask parliament to continue the control of commercial rentals beyond March 31 of this year, and an order of the wartime prices and trade board was subsequently passed-I am not sure as to' the exact date-revoking the control of commercial rentals as of March 8, 1948. There is no intention of changing that order.



FOREIGN EXCHANGE CONSERVATION


[Stage Direction]
The house resumed from Tuesday, February 10, consideration in committee of Bill No. 3, respecting emergency measures for the conservation of Canadian foreign exchange resources-Mr. Abbott-Mr. Bradette in the chair.
On section 1-Short title.
Mr. ADAMSON:: When the committee was last discussing this matter I had moved an amendment respecting the title of the act in which I had suggested the striking out of the word "emergency" so that the act would be known as the Exchange Conservation Act.
I pointed out at the last sitting of the committee that there was no question that, while the exchange situation beween us and the United States was in the nature of an emergency, nevertheless the emergency had now become chronic, and that any attempt to hide the facts of the case would delude the Canadian people in respect of the very essence of our exchange difficulties.
Since then, if anything, the exchange situation has been aggravated by the rapid and startling decline in the security markets of the world. These security markets are a barometer of world trade. They forecast accurately the situation to come, and show more than anything else the situation we are approaching, namely that we are moving from a sellers' to a buyers' market. In other words the international exchange position will be aggravated, as it was during the period of depression in the early part of the thirties.
When I say that I do not anticipate, nor is anything I say now to be so interpreted, that we are entering a period of depression or slump. That is not my intention, nor is it my
Foreign Exchange Conservation

belief. But I do say that the changeover from a sellers' to a buyers' market is upon us, and the first move has already been made. Therefore we shall be faced with selling our goods under different circumstances-some of them, I admit, in fortuitous circumstances in that those goods command a world market and are essential to the feeding of the world. On the other hand our essential metals are required for the making of the sinews of industry throughout the world, so that world industry may have the essential raw materials. We are in a fortunate position in that regard. But from the point of view of the over-all position, havipg regard to the rapid depression and the slump that has taken place on the security exchange, it can be said that we have moved into a different type of market, one in which pressure will have to be exercised in order to sell goods. That being so-and it is bound to happen sooner or later; every cyclical movement of trade develops in that way-exchange restrictions will have to be a continuing part of our way of life until such time a? world trade really gets to a state of equilibrium and regains some semblance of stability. It is merely wishful thinking to consider that that is likely to happen in the near future. Therefore I offered my amendment.
I have one further observation to make in this connection, and it is in direct reply to the hon. member for Acadia. He is perfectly correct when he says that I did support the Bretton Woods agreement. I believed, and I still believe, that some method of currency stabilization on an international level was necessary. I still believe there is at least a hope that that might take place. Therefore I supported the Bretton Woods agreement. The levels of currencies agreed upon under this agreement have proved to be completely unworkable. Instead of devaluating currencies, they were placed at an uneconomically high level in order to improve the trading position of the various members of the international monetary fund with the United States. This has made the whole Bretton Woods agreement unworkable.
My position now is that we should take steps to maintain our freedom in respect of the international monetary fund. It has been proved that under present regulations it cannot be made to work, or cannot be a workable instrument for the stabilization of international exchange. It has been proved that the rates fixed by the fund have no real connection with the actual value in the open market of the fund of the member countries. I feel that necessary steps should be taken; and if the fund will not bring reality into

its dealings, then either we should withdraw from it or should take such steps as will bring reality into our dealings with the fund.
I say that because there are just two alternatives in connection with currency stabilization, two ways in which it can be brought about. One is by the establishment of a gold standard; and I think it would be wishful thinking if we were to assume that in the chaotic situation of the world today any semblance of a fixed gold standard could be brought into being. The other way is by international agreement to stabilize currencies. I supported the Bretton Woods agreement in the hope that there would be some international agreement and that it would work. Unfortunately it has not proved to be workable.
As I see it, this situation is not likely to be temporary, despite the sanguine hopes of the Minister of Reconstruction and Supply. My reason for saying that is that our trading position is dependent upon world trade. If we are to control our currency, or at least attempt to control it, it will be a long long time before world trade gets into such a state of balance that these or some other regulations will not be necessary. If the government would free the Canadian dollar and abolish the foreign exchange control board these regulations would not be necessary. There are the two alternatives.
There is a third possibility which has been discussed at length in this house by myself, the Minister of Finance and others. I refer to the progressive devaluation of our dollar within the terms of the Bretton Woods agreement. I understand that we can devalue ten per cent and eventually a further nine per cent which would put our dollar at eight-one cents as compared', with the United States dollar. But even though we did that, I still believe that exchange conservation measures would be necessary.
We are deluding ourselves by thinking of this as a temporary measure. I have contended that part of this measure should have been adopted years ago. I do not want to repeat what I said the other night, that there are three parts to it. One is devaluation, and that action has not been taken. With the upset state of the world, with the majority of the world trading today under controls directly imposed by governments, unless we are prepared to take a long step and free ourselves completely from the foreign exchange control board, I do not see how we shall be able to get away from controls over currency of this nature for at least years to come. Therefore I move the amendment.

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Mr. KIDD:: I should like to say something about the amendment moved the day before yesterday by the hon. member for York West, but I rise particularly to bring one or two points to the attention of the Minister of Finance. Just as we entered the house today at three o'clock we were handed reprints of Bill No. 3.


Douglas Charles Abbott: That was done merely for
the convenience of hon. members.' I explained the other night when my hon. friend was not here-


Thomas Ashmore Kidd: I was here.


Douglas Charles Abbott: I beg your pardon. That
was done for the convenience of hon. members.


Thomas Ashmore Kidd: I just wish the minister would listen to me for a moment because everything is not going too well. Only yesterday I had an inquiry concerning this bill, and do you know what I had to do? I had to take Bill No. 3, which had its first reading on December 11, 1947; then I had to note what the minister said on December 8, 1947, as reported on page 18 of Hansard; then I had to consider the amendments that were read into Hansard on Tuesday, February 10; and then today we have this reprinted bill.
This brings me particularly to the point made by the hon. member for York West, that there is not very much of an emergency in connection with this measure.


Some hon. MEMBERS:: Hear, hear.


Thomas Ashmore Kidd: Just a minute. Sometimes I
think the minister gets carried away. It is very difficult to get the Minister of Finance to make a statement. I think hon. members will follow me when I say that when he was Minister of National Defence for over two years we could not get him nailed down to making a public statement in this house. We have the same thing now in connection with the finance department. When we tried to get him nailed down to saying something about policy he journeyed away over to Cornwall one day and then after he left the defence department his successor read a carefully prepared statement complimenting the government on its policy.
What has happened here? This bill has been before us only since the house opened in December. It was actually tabled on November 17 when you went on the radio and tried to tell us about the emergency. You went on the radio with the Prime Minister and the Minister of Trade and Commerce, and you gave us the contents of this bill which was
brought in a couple of weeks later. So I take issue with you. It is being done more or less by order in council, and then you come in and expect the members of this house to agree with you. Since the bill was brought into the house you have made two amendments-


Douglas Charles Abbott: Those amendments have not been moved yet.


Thomas Ashmore Kidd: Never mind; the fact is that this is creating hardship for the people of Canada, and if that were not so I would not be making these remarks now. I think some of the blame for this procedure must rest on the Prime Minister and the law clerks. I contend, and I think many agree with me, that in dealing with this bill you should have followed the same procedure as you do when bringing down your budget. In fact, if it is an emergency the house should have been called two weeks earlier.


Douglas Charles Abbott: Submit that to the new committee on rules.


Thomas Ashmore Kidd: I am not going to argue one way or the other. When you were replying the other day to the hon. member for Peterborough West, as reported on page 1077 of Hansard, you held up two advertisements in an effort to justify what you are doing.


Douglas Charles Abbott: I know my hon. friend wants to be in order. I believe he is supposed to address the Chair and not use the second person singular.


Thomas Ashmore Kidd: I know the Chair pretty well and I will agree with him. While you were speaking you held up one advertisement, and you could have held up two, in an effort to show that everything you had done was quite proper and in order. It is not in order. One advertisement appeared on January 14, and the other a week or so later. You were hoping that the public more or less took those in.


An hon. MEMBER:: Address the Chair.


Thomas Ashmore Kidd: Never mind. You interjected something about the $10 clause, and that is where I want to take issue with you. You referred to the order in council of May 23 which permits Canadians to take across the border United States funds to the amount of 810 and $15 Canadian. Three ladies of my constituency crossed the border and they had to undergo hardship because you did not do what you should have done.


Mr. HARTT:: I rise to a point of order.


An hon. MEMBER:: Sit down.
Foreign Exchange Conservation


Maurice Hartt: Will you please stop hollering?-because it will not do you any good. I rise to a point of order.


An hon. MEMBER:: Look at your assistant, Mr. Abbott.


Maurice Hartt: I do not expect anything from some hon. gentlemen but grunts, and I do not want the hon. gentleman's advice. I submit, Mr. Chairman, that the speaker who had the floor was entirely out of order. Clause 1 deals with the short title of the bill. We have discussed the principle of the bill-


Mr. FERGUSON:: What is the principle?


Maurice Hartt: The hon. member would not understand it, not with his brain power. Clause 1, as I said, deals with the short title, which reads:
This act may be cited as the Emergency Exchange Conservation Act.
Either the title is correct or it is not; either it is acceptable or it is not.


Mr. MACDONNELL (Muskoka-Ontario):: The amendment is to determine whether it is correct or not.


Maurice Hartt: If there is any objection to the title, let it be stated; but I submit, Mr. Chairman, that it is not in order to discuss currency policies or anything else that may come to mind on this particular clause.


Mr. POULIOT:: Speaking to the point of order, Mr. Chairman, I submit that no ruling can be made until the hon. member for Kingston City has finished his argument.


Mr. LENNARD:: On a point of order, when I rise in this house, which is not very often, I speak from my appointed place in this chamber, and I feel that if backbenchers in other parts of the house did the same we should make more progress.


Maurice Hartt: Speaking again to the point of order, Mr. Chairman, I have a right to repeat, and I think the committee will grant it to me-


Jean-François Pouliot: I submit, Mr. Chairman, that no one has the right to speak twice on the same point of order.


Maurice Hartt: I accept the hon. member's point.


Some hon. MEMBERS:: Sit down.


The ACTING CHAIRMAN (Mr. Bradette):: In committee of the whole a certain amount of latitude is allowed on the first clause. I hope that that privilege will not be abused. I will ask the hon. member for Kingston City to proceed.


Thomas Ashmore Kidd: I think the Minister of Finance should make a statement in advance of any such order in council as P.C. 2045 going into effect. It was passed on Thursday, May 22, 1947. Nothing was said about it on Friday, May 23, nothing on Monday, May 26, nothing on Tuesday, May 27, until a reply was made to a question asked by the hon. member for Rosetown-Biggar. That is the only time the Minister of Finance made a statement about the order in council. I bring this up because one of my constituents was directly affected. Three girls were journeying by bus from Kingston to the United States, over the international bridge, as they do once or twice a year. They were picked up by the customs officials. I want to pay a compliment to the customs officials, nearly all of whom are veterans of world war I. They are very courteous and gentlemanly, but they have to carry out their instructions under the foreign exchange control order. This girl was asked how much United States currency she had. She told them $40 U.S., plus $5 Canadian. They said that was $30 too much. She had to leave $30 with them. They gave her a form which she signed, and it came back to Ottawa. She then proceeded to Watertowr with her friends. The officials said that the girl should have had form H with her, but this girl did not know it was necessary. She had collected her United States currency at various stores. When she came back across the border she expected that the $30 would be refunded, but the officials intimated that she had broken the law. Probably she had, but the point is that if she broke the law it was the fault of the Minister of Finance for not publicizing the order in council. He said nothing about it on the floor of the house, or on the radio, and no advertisements about it were published in the press.


Douglas Charles Abbott: I must interrupt the hon. member. First, on a point of order, Mr. Chairman, this has nothing to do with the present bill. The matter to which he refers took place last May, and I cannot recall whether I made an announcement in the house.


Thomas Ashmore Kidd: No, the minister did not.


Douglas Charles Abbott: I will accept the hon. gentleman's word, but I do know that the details of the order were widely publicized. I raise the point of order, Mr. Chairman, that we cannot discuss the administration of the foreign exchange control board on clause 1 of this bill. If we attempt to do that we open up a discussion that will keep us here until the heat of summer. I did not interrupt my hon. friend when he was stating his case, but I

Foreign Exchange Conservation
would ask the members of the committee to keep within the scope of the bill we are now considering.


Thomas Ashmore Kidd: I am not going to say any more, but the minister did make a statement the other night on the $10 restriction.


Douglas Charles Abbott: That was in reply to a question.


Thomas Ashmore Kidd: An hon. member asked me whether the girl got her money back. She did not.


Joseph-Arthur Bradette: Standing order 58(2), reads:
Speeches in committee of the whole house must be strictly relevant to the item or clause under consideration.
We are on clause 1, and I would ask the committee to keep within the orbit of that clause.


Mr. CASE:: I hope to keep within the rules, Mr. Chairman, in discussing the short title of the bill, which reads:
This Act may be cited as the Emergency Exchange Conservation Act.
That indicates the purpose of the bill. By this bill we are delegating to a minister of the crown, to one person, tremendous authority. There is such a thing as the law and the spirit of the law. I know this act is to be administered by the Minister of Trade and Commerce.


Douglas Charles Abbott: No; schedules I and II will be administered by your humble servant and schedule III by the Minister of Trade and Commerce.


Wilfrid Garfield Case: When we come to the other schedule we shall hear from the minister responsible for administering it.


Douglas Charles Abbott: That is the intention. On the point raised by my hon. friend I think I mentioned the other night that in matters relating particularly to schedule III, that is the permit system for so-called capital goods, I would expect my colleague the Minister of Trade and Commerce to deal with that schedule, and I shall handle the questions as to schedule I, relating to prohibitions, and schedule II, the quota item.


Joseph-Arthur Bradette: Is the committee ready for the amendment?


Mr. SMITH (Calgary West):: I have a question to ask; I hope I am in order. I want to assure the minister that there is no catch in it; I am really looking for information. I was wondering under what authority we are acting now. Is it the War Measures Act?


Douglas Charles Abbott: P.C. 4678, under the
Foreign Exchange Control Act.


Arthur Leroy Smith: That lasts until when?


Douglas Charles Abbott: From memory, 1949 or 1950.


Arthur Leroy Smith: We seem to be getting along pretty well the way we are under the War Measures Act. Why is it necessary to bring in this legislation?


Douglas Charles Abbott: I shall be very glad to answer that question.


Arthur Leroy Smith: Perhaps the minister has explained it before.


Douglas Charles Abbott: I did, first in the broadcast which I made on November 17 in announcing the proposed policy, and again in the house when I introduced this legislation. Broadly speaking what I said was-this has been discussed before-that the Foreign Exchange Control Act was not intended to be used for the purpose of imposing import restrictions on goods.


Mr. JACKMAN:: Not like a sledge hammer.


Douglas Charles Abbott: I am replying to the hon. member for Calgary West. I am repeating what I said at the time. The act was not intended to be used for that purpose, but we were advised by the law officers of the crown that powers did exist under the act whereby we could impose those restrictions. I said in my broadcast address and in introducing the bill that in these circumstances the government felt that it should bring before parliament at the first available opportunity specific legislation to impose these restrictions. That is the position. We may be criticized for our action in using the foreign exchange control order, but that is the reason why the government is now asking parliament to enact in statutory form a special exchange conservation measure.


Arthur Leroy Smith: I did not ask the question for the purpose of getting an opportunity to criticize. I was wondering- and perhaps this is not done; I do not know- whether a copy of the opinion about which the minister spoke could be made available.


Douglas Charles Abbott: The opinion was a verbal one. I have a memorandum which I can make available. I say that offhand; I do not know whether one usually produces the opinion he receives; it was a verbal opinion given to me.
Foreign Exchange Conservation


John George Diefenbaker: Who asked for the opinion?


Douglas Charles Abbott: I asked for it. I think I answered that question in the house before; but in any case I asked for the opinion.


Arthur Leroy Smith: If the minister gave that information before I did not hear it.


Douglas Charles Abbott: I do not think my hon. friend was here when some other hon. member raised the question.


Arthur Leroy Smith: Did I understand the minister to say that he would be glad to let me look at the memorandum?


Douglas Charles Abbott: Yes. I do not know that one usually tables these opinions in the house. I asked for the opinion, I received it, and I have a memorandum in my file which the deputy minister of justice gave me.


Arthur Leroy Smith: I shall appreciate it if the minister will be good enough to let me see it. I am not much of a lawyer, I know, but I may differ from the view that has been given to the minister.


Mr. MacNICOL:: Mr. Chairman, so far I have not passed any comment on the bill which has been introduced. I wish that the Minister of Reconstruction were in his seat, because what I have to say concerns him.
I am one of those who wishes to see made effective the pronouncement some time ago of the Minister of Reconstruction and Supply that goods which are not made in Canada at the moment, but could be made here, should be made here. One of the schedules prohibits the importation of that type of goods. The minister has a program which I heartily endorse, namely, that of making more use of branch factories located in Canada of United States factories. The minister intends to encourage them to ship back to the United States many of their finished products made in Canada. I agree with that. The minister has an opportunity there which will be good for Canada, because there is a large number of United States plants, many of which I am thoroughly familiar with, whose plants in Canada are producing exactly the same material as they are in the United States. Some of these plants are located in Toronto, Hamilton and elsewhere in Ontario and Canada. I am going to encourage the Minister of Reconstruction and Supply to pursue that policy.
Much of the material that is now barred cannot be completed here unless more material and more machines come in. I want to assist the minister to the best of my ability to pursue his policy along that line in the hope that he

will save a lot of United States dollars by having material made in United States branch plants in Canada shipped back to the United States. I was thinking of one item, school furniture. At present, boards of education in Montreal, Toronto and elsewhere buy special school furniture in the United States. There are United States branch plants located in Canada. I have in mind one branch plant which makes a special line of school furniture. At the moment they need more machines to equip the plant to finish what they make. Until they are able to obtain certain equipment they will not be able to make the equipment our schools want.
The minister has had a lot of business experience. I hope he will see to it that some latitude is given to enable branch plants of United States firms located in Canada to finish the products that they can make. I repeat, I think the minister has something there and I should like to encourage him in every way possible to promote shipment to the United States of any material made in Canadian branches of United States plants, material which is exactly the same as that made in the parent plant in the United States. I cannot understand why a plant in the United States which has a branch in Canada should hesitate to encourage the importation into the United States of goods made in their Canadian plants. If that were done we would save a lot of United States dollars, and it would be doing no injury to our friends across the line.
When I take part in a debate I always try to add something worth while. Because of my long business experience I believe the Minister of Reconstruction and Supply has something in that program. I want to support him in that regard.
There are one or two other matters on which I should like to speak while I am on my feet. I should like those who have to do with issuing permits to use their best judgment in that regard. Do not ask busy men, big business managers, sales managers and their advisers, to come down to Ottawa to obtain a permit for some small item. I hope that in working out the program the two ministers have in mind, busy men will not have to come here for everything if a letter will do. I have no doubt that the department has officials who will be available to determine at once, even from a good letter, whether they should issue a permit or not. I hope consideration will be given to these busy men. They find it difficult enough to make a go of business without being harassed in coming down here to get a permit for a small item. Perhaps that is another way the two departments can assist in saving United States dollars. When the

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matter is laid clearly before the department I hope there will not be too much difficulty in getting a permit.
I wish to say to the Minister of Finance that Canadians generally want to assist him in saving United States dollars. I think everybody is imbued with the idea that it is necessary to do that. How can we assist him? I think Canadians want to help him. We all realize that we must cut down on what we buy from the other side. On the other hand we must enable those who are producing in Canada equipment containing something produced in the United States to be able to finish that equipment. If someone asks for a permit for a small machine or a small part of a machine to assist in making his product- for instance, school furniture-or some small part to complete the equipment which when completed could be exported back to the United States, thus bringing in United States dollars, I hope the two departments will use their best judgment to help business. I think most people really want to do the best job they can for Canada under present conditions. That is the spirit we all should have.
I wish to mention one further item, namely, stone. Many of the schools in the big centres use a great deal of Indiana limestone and other special types, and additions to some schools are planned. No one knows better than do the two ministers that two different types of stone cannot be used in the outside walls of a school without spoiling the whole symmetry of it. I do not know just what can be done. We do not want to import any more stone than necessary. But if a case like the one I have mentioned should arise, I suggest to the two ministers that they see to it that no trouble occurs. If it is a whole new school building that is planned, they should see to it that the school is built wholly of Canadian material, if it is available or if it can be substituted. But where a school is partly built and an addition is being made, I suggest that * some judgment be used in deciding whether the material required to build that addition should be admitted or not. At the moment I do not know whether it is admitted. I hope the best expectations of the government will be realized and that as much foreign exchange as possible can be saved. I for one want to help in achieving that objective.


Douglas Charles Abbott: I thank the hon. member for Davenport for his remarks. I shall see that the parts which relate to schedule III are brought to the attention of my colleague the Minister of Trade and Commerce. My hon. friend can rest assured that both of us 5849-73
will do whatever we can to minimize any necessary inconvenience to the Canadian public as a result of these unfortunate restrictions.


Joseph-Arthur Bradette: I did not want to interrupt the hon. member for Davenport, but I should like to point out to the committee that I feel that specific items should be dealt with under the proper section, such as sections 3, 4 and 5. There are lengthy schedules under which specific items may also be dealt with.


Mr. QUELCH:: I wish to address a question to the minister with regard to the conservation of United States exchange. Can the minister tell the committee how far discussions have gone with regard to the Hyde Park agreement? The specific point I have in mind is this. Last week my attention was drawn to an article wffiich stated that the United States would be buying from Canada farm produce for re-export to Europe, and that the price paid therefor would be similar to the price we receive under the British agreement. If that is correct, I should like to ask if that price would apply to all farm produce bought from Canada by the 'United States for re-export to any country in Europe, or would apply only to the farm produce bought from Canada for re-export to the United Kingdom as part of Canada's commitments to that country?


Douglas Charles Abbott: I have seen some of the press reports to which the hon. member for Acadia has referred. However there have been no discussions along those lines with the United States authorities, and of course there cannot be any until congress has decided on wrhat plan, if any, is to be approved for purchases for assistance to Europe. As I have said on a number of occasions, we are hopeful; we believe that if a plan is passed it will authorize what have come to be known as offshore purchases, and that there would be funds available for the purchase in Canada of the things we have to sell and which are needed in western European countries. To answer my hon. friend's question specifically, for the reasons I have explained there have been no discussions with the United States government authorities as to the basis on which such commodities will be purchased.


James MacKerras Macdonnell: I want to say a word on the amendment, and to remind the committee that the tenor of it is to point out that this bill is likely to be on the statute book for some time. With that wise caution which nearly all lawyers develop in the course of their practice the minister said he was "not going to attempt to hazard any prophecy or guess as to how long we
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might have to continue some kind of proper action to conserve our exchange and reserve position." I notice that his colleague, the Minister of Reconstruction, is still unrepentant about his use of the word "months", because he is 'reported to have used' it again in Halifax a night or two ago. I want to point out that this bill has no time limit on it, although the foreign exchange control bill, to which we made so much objection, did have a time limit. I believe it has only a little more than a year to run.
I want to point out again-I intend to say it in season, and perhaps the minister will sometimes think out of season-that this is a bill conferring arbitrary power of a kind absolutely foreign to all the professions of the party opposite. I am sorry that the hon. member for Quebec South (Mr. Power) has left the chamber; he was in his seat earlier. I was proposing to ask him, in view of the things he has had' to say about Liberalism, what he has to say about this arbitrary power. I should like to point out again that no matter in what temporarily pleasant hands arbitrary power is placed, it is still arbitrary power.
In December when we were here I ventured to make a prophecy. I ventured to say there would be little demur or protest from the business community, and I said the reason was that they would be afraid to come here. I do not often venture into the realm of prophecy, but I have had that one proved to my entire satisfaction. One of my friends tells me that he went to something like a dozen business firms to get some comment from them. Not one would say a word. And who is to blame them? After all, they may have to come down here next week to try to make some terms with the minister. I want to say again -and I hope my friends in the business community will hear me-that this is arbitrary power of the very kind that existed in Germany. I do not intend to talk about national socialism and all that kind of thing, but power is power. I want them to know that this is the same kind of power that the businessmen in Germany welcomed and thought would not hurt them a great deal. Indeed, for a while they thought it went nicely and even ministered to their profit. In the end they found that arbitrary power was not a pleasant thing.
I have just one further word to say. The gentlemen to my immediate left, even in the somewhat extreme suggestions which in our opinion they have from time to time made as to the exercise of power, have never I believe suggested a power like this, where one man has it in his hands to make or

unmake any business which has, as so many have, the need of substantial imports from the United States. Therefore we have a government today which is going beyond even socialistic doctrines so far as they would be applied at the present time by the gentlemen to our left. I ask the business community to remember that. I understand their difficulty at the moment, but I remind them again that when this sort of thing begins you can never tell where it will end.


Joseph-Arthur Bradette: Order. I really believe a great deal of this discussion should have taken place on second reading of the bill. I have been very indulgent so far, and I hope that indulgence will not be abused.


Mr. PEARKES:: Speaking to the amendment, I notice that on page 323 of Hansard for December 16 the heading given when the minister introduced his bill was, "Foreign exchange conservation". Obviously even the editor of Hansard seemed to have some doubt as to whether or not there was an emergency in connection with this bill. Then turning to page 336 of Hansard for the same date, the minister was speaking and reference was made to the reason for the imposition of some of the taxes; and they were said to be imposed in order to protect the regular suppliers in the United States and the dealer organizations in Canada. I do want to suggest that a degree of protection is required for those producers in Canada who are growing the vegetables required to replace those which are prohibited.


Joseph-Arthur Bradette: If the hon. member will permit me, I suggest that in the following sections and schedules he will find ample opportunity to deal with specific matters, instead of bringing them to the attention of the committee at the present time.


George Randolph Pearkes: I want to refer to one
statement made by the minister on February 10, when he was again dealing with the production of vegetables and referring to lettuce and tomatoes produced in hothouses. He rather insinuated that vegetables produced under those conditions were not equal to those produced in the United States under natural conditions. I do suggest this fallacy was exploded many years ago, and that all kinds of tests-


Douglas Charles Abbott: I did not intend to give
that impression. I said they were luxuries, but I do not know whether or not they are as good.

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George Randolph Pearkes: The minister's words are
at page 1082 of Hansard.-.
... it would be far better to buy lettuce and tomatoes where they are grown naturally in the open. . .
If I have placed the wrong interpretation upon those words I shall be very glad to have the minister correct me.


Douglas Charles Abbott: I was just assuming it was more expensive to grow them under glass; that is what I was referring to.


George Randolph Pearkes: I want to point out that this is the time when the vegetable growers on Vancouver island are actually sowing their vegetables. That is done during February and March, and this is the time they have to make a decision os to whether or not they are going to plant more than they have planted in the past. Therefore I would ask the minister whether he could give the same degree of assurance to those vegetable growers on Vancouver island that he has given to producers in the United States, that they may have a reasonable degree of protection.


Douglas Charles Abbott: Well, Mr. Chairman, in
the first place I have not given the growers in the United States any assurance that they will have any protection at all. All I have said is that I can give no one in this country any assurance as to how long these restrictive measures will remain in force. That is as far as I have gone; and I have repeated that statement on a great many occasions, about as many times as the hon. member for Muskoka-Ontario has made his speech about the arbitrary powers contained in this bill.


James MacKerras Macdonnell: And you will hear it again.


Douglas Charles Abbott: I do not know that I can
add anything to what I said the other evening.


Mr. LOCKHART:: I believe another hon.
member may intend to introduce a new matter, but I should like to ask a question in relation to a brief reference the minister made a moment ago. I am confused; I am just wondering where one may come in. The minister said this bill was based originally on the provisions of the Foreign Exchange Control Act, or that it was made necessary because of the application of that act.


Douglas Charles Abbott: No. I said the order in
council which is now in effect, or the regulations which are now in effect prohibiting imports from the United States and placing others under quota, were passed under the provisions of the Fojr-gn Exchange Control 5849-73J
Act, which as my hon. friend knows is another statute which was enacted by this house a year or so ago and that the government felt it would be more appropriate to have a special statute introduced in this house and adopted to cover these particular restrictions. That was my statement.


Norman James Macdonald Lockhart: Granted1 that, the very first sentence at the top of Bill No. 3 is "an act respecting emergency measures for the conservation of Canadian foreign exchange resources". The hon. member for Kingston City raised a point in, connection with the imposition of certain control regulations at border points. Since this discussion has been under way three or four very serious matters have come to my attention. If the minister says that cannot be done, or if you, Mr. Chairman, rule that it cannot be done under section 1, the short title, would someone please advise me just where a member may bring up a matter of this kind? You have said there was a lengthy discussion on the motion for the second reading, but at the same time there are particular matters which should be dealt with, and I am wondering if there is any place in this bill where I might bring up briefly one or two points.


Douglas Charles Abbott: If I may make an observation I would say there is no place in this bill at which my hon. friend or any other hon. member could properly discuss the operations of the foreign exchange control board. A discussion of that matter could perhaps take place on various occasions. One such occasion I can think of offhand would be when the appropriation in my estimates for the administration of the foreign exchange control board! is before the house. At that time, of course, hon. members would have full liberty to air any question relating to the administration of the board, which as my hon. friend knows is an agency of the Minister of Finance.


Norman James Macdonald Lockhart: Then if there is a specific matter having to do with the conservation of United States dollars I take it we must search through schedules I, II and III to find a place where that discussion would be in order. Is that a correct understanding?


Douglas Charles Abbott: As my hon. friend knows, this bill relates only to the importation of commodities. On the appropriate schedule, or on one of the sections dealing with permits,
I should think the hon. gentleman could make any observations he wished as to the way permits issue and administration was being handled; but it would1 have to relate
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to matters concerning the import of commodities. Travel restrictions, for instance, could not be debated under this bill.


Norman James Macdonald Lockhart: I am not worrying about travel restrictions, but it appears to me this is a case of confusion worse confounded.


Mr. KNOWLES:: If the hon. member for York West is serious in proposing his amendment that the word "emergency" be struck out of the title, I rise to oppose it. Like the hon. member, if he was here, I voted against second reading of the bill. It seems to me the one redeeming feature of the bill, since I am opposed to it, is that it is only an emergency measure. If you took out that word', since there is no time limit in the bill, as the hon. member for Muskoka-Ontario has pointed out, it seems to me we would have on our necks permanently something we do not want. The hon. member may have had some point in mind in offering his amendment; but it seems to me to be ridiculous. We should vote on it and get on with the bill.


Douglas Charles Abbott: I have been waiting until the end of the discussion on this section before making my reply. The hon. member for Muskoka-Ontario asked for some information at the last sitting, and before we finish the discussion on this section I should like to give it. I shall be prepared to say a few words when other hon. members have concluded what they have to say with respect to this striking amendment.


Mr. SKEY:: The other evening when this section was under discussion the minister and 1 took part in a verbal exchange. He expressed .-a view which I should like to bring to the -attention of the committee, and with your indulgence, Mr. Chairman, I should like to place some facts on record.
The minister referred to the reports of the banks of Canada as reliable documents, and suggested that I should read them.


Douglas Charles Abbott: Just in fun.


Lawrence Wilton Skey: Well, I have read them-or at least those of them I could find. He suggested that they approved the action taken by the government. I have been able to find one reference in a bank report in which he might be interested. In a statement made by Mr. Dobson, president of the Royal Bank- and as I do not know this gentleman I hope his being quoted in the committee will not make him subject to penalty-he says:
Something drastic had to be done. Whether the restrictions imposed will prove effective remains -to be seen. All hoped the controls would be temporary.

Then I turn to a statement by Mr. Bryden, of the North American Life Assurance Company, who was a graduate in commerce and finance and got his training from the same sources from which Mr. Rasminsky of the Bank of Canada received his training. Mr. Bryden states:
The Canadian dollar is being held at parity with the United States dollar, when it is perfectly obvious that our balance of payments with United States doesn't justify such a rate. Other currencies generally are being held at exchange rates which cannot be justified on the basis of their balance of payments with us.
Those are two financial references. The third comes from the president of the Royal Trust Company, who has this to say:
In consequence of this we fail to realize that our thinking could be simplified if we went down to what I believe to be the basic fact that there can be no lasting cure for international financial difficulties without a return to free convertibility of national currencies at realistic exchange rate.
That is the financial side. Then, referring briefly to the commercial side, I would quote what was said as recently as two nights ago over the Canadian Broadcasting Corporation by Mr. Courtland Elliott, executive member of the Canadian chamber of commerce:
The facts probably are that the present emergency is due, not to a few acts of recent occurrences, hut to the combination of a whole series of interferences by government planners which had the effect, at one time or another, of upsetting the normal functioning of prices, interest rates, wages, foreign exchange values and other factors.
I do not ask the minister to rise in his place and attempt to refute the quotations I have made.


Douglas Charles Abbott: I agree with them, in
substance.


Lawrence Wilton Skey: I merely rise to say that when there was a great government campaign in respect of price controls M'r. Donald Gordon was in charge of the prices board. The government went out, with Mr. Donald Gordon back of it, to sell the Canadian public on this measure. We now see that those false controls could not keep the Canadian people from suffering from the tremendous rise in prices. I would now apply the same lesson to the exchange situation. If in this instance the government goes out to sell this policy to the Canadian people, offering it as the only solution, it will find itself in the same position as that in which it found itself in connection with price controls.

Foreign Exchange Conservation
All I urge is that the minister and his advisers take counsel with themselves, keep an open mind on the subject, and do not try to tell the Canadian people that this is the only way out.


Douglas Charles Abbott: I thank my hon. friend for his advice. The government is in favour of the free convertibility of currency, and it is in favour of realistic exchange rates. It believes that the Canadian exchange rate is a realistic rate.
As to keeping an open mind, we will always try to do that. I am not prepared to say that this is the only way of solving the problem. However, after a great deal of careful consideration the government did come to the conclusion that it was the best available means at this time. That is why the measure is before the house.


Mr. BENTLEY:: Mr. Chairman, I have three observations to make. Two of them I will be allowed to make, but I am not so sure of the third one; therefore I shall leave it to the last.
First I will ask the minister a short question requiring only a short answer. In reply to the hon. member for Acadia he used the expression "offshore purchases". What does that mean?


Douglas Charles Abbott: It has come almost to be recognized as a term of jargon. It means purchases made outside the United States with funds appropriated under the European recovery plan.


Thomas John Bentley: We thought so, but we were not sure.


Douglas Charles Abbott: Those have come to be generally understood as offshore purchases.


Thomas John Bentley: We could have a better definition.
Then, coming to my next point; I am a law-abiding citizen and am anxious to abide by the rules of the house. I do not wish to do anything to embarrass anyone. At the same time I do not want to be deprived of my rights as a member. I believe half of the comments made here this afternoon could have been ruled out of order so far as the subject under discussion is concerned. What I have to say is along the same line, but perhaps with a different slant, and I should like to know whether I shall be permitted to proceed or whether we will hold strictly to the
rules, as a result of which I would have to wait until next July to say what I should like to say now or in the near future.


Douglas Charles Abbott: Have a try now.


Joseph-Arthur Bradette: I know the hon. member for Swift Current fully realizes that the Chairman as such has no personal preference. However he must help to enforce the rules-and on this point the rules are definite. I would refer hon. members to standing order 58 (2) which states clearly:
Speeches in committee of the whole house must be strictly relevant to the item or clause under consideration.
The Chairman of necessity must rule in accordance with what I have read.


Thomas John Bentley: It is so difficult to decide exactly whether what one has to say falls within that scope. I think in some respects I am within it, although possibly in other respects someone may find that I am not.
A moment ago the minister replied to the hon. member for Acadia who had stated that there w'as more to the Hyde Park agreements than meets the eye. I have reason to believe that the Hyde Park agreements and the later arrangements made between Canada and the United States have had some influence upon this bill. I want to remind the house that the other day I asked the Secretary of State for External Affairs if there was anything more to the Hyde Park agreements than the house already knew. His reply was concise and definite, that only what appeared in the President's and the Prime Minister's statements on April 20, 1941, as issued to the press, was contained in them. However, the OttawA Citizen of February 7 had this to say:
The Washington correspondent of the Evening Citizen. Mr. Peter Inglis, however, has found that the senate committee on small businesses is in possession of much more "evidence."
He then goes on to discuss the whole matter, and he deals with the problems that confront the Canadian people because of this bill and other measures that are before us, such as the Geneva trade agreements. He points out that arrangements have been made between the two countries which have never been formalized or, as he puts it, have never been coded; nevertheless they are in the archives of the two nations. Apparently under this arrangement letters between Mr. Ray Atherton and the present Minister of National Defence indicated that while the United States govern.-
Foreign Exchange Conservation

ment recognizes Canada as the forty-ninth state in the matter of receiving imports such as oil and steel, nevertheless, and again I quote his words:
-it offers Canada no apparent help in her present dollar difficulties.
On other occasions we have contended that it was unfair to apply the non-discriminatory clauses of the Geneva trade agreements to this particular bill. But the fact remains that in one section of the bill it is stated that permits will not be issued unless in the opinion of the minister they are necessary or hardship will result. We have seen no evidence since the minister assumed charge of his department that he has a mind which is receptive to other people's opinions. Apparently he is quite opinionated. We find that generally he has made up his mind before he comes into the house and there is no use offering any argument here. He contends that everything in this bill is all right, but the fact is that these non-discriminatory clauses are working hardship on some businessmen.
A short time ago the hon. member for Davenport said that he hoped the big business men of Canada would not be inconvenienced by having to come to Ottawa to see officials in order to get permits. I submit that it is infinitely more important that the small businessman be not required to do that. The big businessmen can afford to hire emissaries; they have expense accounts and they can send their people down, but the small businessmen have no possible way of getting down here, and, as someone suggested the other day, having a cup of coffee with the Minister of Trade and Commerce, a glass of Scotch with some other people, and a dinner with someone else. They simply cannot afford to come here and buy Scotch and Coca Cola.


An hon. MEMBER:: Unfair to use trade names.


Thomas John Bentley: In looking through the bill I cannot find any section which would cover the illustration I want to give, but the fact is that the particular item has been banned. A small businessman in my city has been running a little shop where he sells goods. He is a good businessman and he has been able to get many customers. He recently took on the agency for the Norge and Magic Chef cooking ranges which use propane or bottled gas. Because of his aggressive sales policy and the fact that he was located in a
fMr. Bentley.]
section of the country where there was an immediate response because of a shortage of other fuel such as electricity and so on, he was able to build up a fair business. In the early stages he could handle the delivery of the bottled gas with his own truck, but later on the business developed to the point where he had to keep larger quantities of this propane gas in store in order to assure a continuity of service to the people to whom he had sold stoves. This meant a heavy investment. To a big businessman the investment may have represented only peanuts, it may have represented only the cost of a couple of trips to Ottawa, but it was a large investment for this man to make. He now finds that he cannot import Norge or Magic Chef stoves from the United States, and that it is difficult to get propane gas. His investment is lying idle, or mostly idle, because he cannot store the stuff. He could have bought the stoves from Great Britain, but he is not allowed to do it. The British trade commissioner wired on, December 19 that these cooking ranges are on the prohibited list from Great Britain.
We are supposed to be dealing with the principle of the bill, and I contend that that prohibition is unfair. The only item I can find that applies to this is item ex 446a on the last page of the newly printed bill.


Douglas Charles Abbott: It would come under item ex 443 on page 10.


Thomas John Bentley: The fact that there is an item in the bill makes it no better or no worse; it just makes it a little easier for me to understand it. I think the minister should give consideration to some of these things. We want British goods over here. Our people have indicated their willingness to use these commodities. Our merchants have indicated their willingness to merchandise them in this country. A majority of this House of Commons has indicated belief in private enterprise and private initiative. Surely things should not be done that hamper initiative simply because some other nation desires the application of the non-discriminatory clauses contained in the Geneva agreements.
I should like to refer to a speech made in this house by the Minister of Finance, who said, when asked why he applied these nondiscriminatory clauses:
While it possibly could not be called a fetish with them-

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That is the United States.
-it is a principle to which great importance is
attached.
I have been suspicious of what has been going on in the last few years, and I believe that we are actually being sold to the United States. Before we go any further with it I should like to know the terms of sale. I can see no earthly reason for banning British goods from this country. In this connection I should like to quote a reprint from the Toronto Globe and Mail, appearing in the Vancouver News-Herald of January 30, 1948. It says in part:
The intent of the program was to discourage purchases from the United States. But the same bans were applied to the soft currency countries, which were thus deprived of any chance to repay us in goods for the credits we had extended them. Mr. Abbott and his brain trust, in their eagerness to keep Washington happy, evoked a "non-discrimination" clause. Its effect has been to discriminate most harshly both against the Canadian people who have to pay the cost and against those nations we should be seeking to help.
The British board of trade, for instance, released on December 11 a list of manufactured articles available for export. Of 86' items on the list, 39 were under the import ban, 13 were restricted by quotas, 21 were subject to 25 per cent excise tax and 13 could be imported only under permit.
I submit that the whole thing is unfair and that parts of this bill should be revised by the minister to make it acceptable to the Canadian people as a whole and to this house as representative of the people.


Douglas Charles Abbott: Perhaps I had better answer now one or two points raised by my hon. friend. First he referred to the Hyde Park agreement and intimated that this bill is in some way tied in with benefits we got from the United States under the Hyde Park or some other agreement. That is not the case. The Hyde Park agreement during the war actually resulted in the purchase in Canada by the United States of about one and a quarter billion dollars worth of goods and that accounted in substantial measure for the very strong position in which our dollar reserves were at the end of 1945.
I have answered my hon. friend's point as to the non-discriminatory clause on two or three occasions. As to the United States making almost a fetish of non-discrimination, we do too. No country has a greater stake in the principle of non-discrimination than has Canada and being of that opinion we feel that we should set an example. I have repeated time and again that on balance this does not prejudice exporters from soft currency areas. On the contrary it helps them enormously. But because of the quota system,
while that results in severe restrictions of United States imports, it permits a tremendous expansion of importations from soft currency countries.
As to propane gas type stoves and heating and cooking apparatus, importations are very heavy running into several million dollars.
I cannot say offhand how much of that is represented by the propane type of gas stove, but the proportion would be substantial. We have to select some things to exclude. The government has no illusion that this will be a popular measure. We fully realize that, in essence, it is bound to be unpopular, but it is one of those things which the government has to do on occasion. There is no doubt that this is not a vote-catcher. I have no illusions that we are going to get a lot of votes by this measure. But the measure is an unfortunate necessity. If we are going to accept responsibility for the restriction of imports, we have to restrict something; we have to select the less essential commodities which are in reasonably good supply in Canada. I daresay that propane gas type stoves are produced here.


Thomas John Bentley: By two firms which have practically a monopoly.


Douglas Charles Abbott: That business has grown
up largely in the last two or three years. If some means can be found of affording some relief there, well and good, but, as I said at the outset when I announced this policy on November 17, there are bound to be some hardships and inconveniences. We have tried to make them as little as possible. These articles on the prohibited list have been selected with the greatest care. We have endeavoured to select articles which were imported primarily from United States dollar areas rather than from soft currency areas. I think we have been pretty successful in that, because I am informed that if imports were on the same scale as last year the whole prohibited list would exclude only one and a quarter million dollars worth of goods from the United Kingdom, which is negligible compared with the total importations. That is the position with respect to the non-discriminatory question. It is, of course, non-discriminatory. We believe strongly in that principle. It is not as non-discriminatory in fact as it is in form. We have maintained the principle of non-discrimination, and I for one believe and the government believes that it is in the interests of Canada that this principle should be maintained.


Thomas John Bentley: I just want to comment on the minister's statement about these gas
Foreign Exchange Conservation

stoves being made in Canada. They are made I believe, by two firms in Canada, McClary and Clare Bros. McClary and Clare Bros., if they make them, have a policy of granting an exclusive agency, and because of that, other dealers are shut off from this source of supply. It is virtually a monopoly for these two firms and their agents. Something should be done to ease that situation in the interests of the Canadian consumer, if these stoves are manufactured here, and I understand that they are. Otherwise the minister will only confirm my original statement that he never changes his mind once he brings his policy into the house.


Douglas Charles Abbott: I do not agree. I have changed my mind in a number of cases. I have made a number of amendments when they have been shown to be desirable or necessary, and since these restrictions were imposed we have made many changes in them as announced. I have been accused from other quarters of wobbling back and forth, but as I said the other night, I have no desire to earn the reputation of being either a mule or a jellyfish. If some change is shown to be sound I will make it, but the general principle remains, and one cannot be continually carving out of the list this article or that until we are much more nearly out of the woods in regard to exchange.


Harry Rutherford Jackman: Perhaps the minister will later give an answer to this question which arises out of his remarks. Where a barrier has been imposed against soft currency countries has that barrier not made it difficult, If not impossible, for those soft currency countries to ship their goods into Canada? The reason I ask the question is this. We find that the retailer in Canadian towns and cities has not been able to purchase some British textiles because he could not pass on the cost expressed in sterling. If British textiles and other goods from soft currency countries have to leap over a tariff barrier, even though only a small preferential one, it may exclude much more than one and a quarter million dollars worth of goods which the minister mentioned as being on the prohibited list.
I support the amendment of my colleague the hon. member for York West in regard to the use of the word "emergency." I have just consulted the dictionary and I find that emergency is a sudden juncture demanding immediate action. This particular juncture has been growing for a long time. The minister

informed us yesterday that his experts made very few mistakes, that they had been working on this list since last June or so.


Douglas Charles Abbott: I said the middle of the summer.


Harry Rutherford Jackman: I can point out to the minister some glaring errors which have since been rectified, after all the midnight oil that was spent in preparing the list. The word "emergency" means a sudden juncture. I doubt whether that applies here. The word "temporary" is generally taken to be a word ef not such acute significance. It means only "for a time". I do not think that word would be suitable either. The word "permanent" means "lasting", or "intended to last". Judging from what these controls are likely to bring about, I think they are more apt to be of a permanent nature. Therefore I have no hesitation in supporting most heartily the amendment of my colleague asking that the word "emergency" be deleted. Since we have not heard from the Minister of Finance or from any of his colleagues on the government side it may be that he is enthusiastic and willing to accept it.


Douglas Charles Abbott: I said I was going to wait until everybody had expressed their opinion.


Harry Rutherford Jackman: I realize that. As I say, I do not think that "emergency" is the right word-


Douglas Charles Abbott: I was not sure whether the hon. member for York West was serious or not in his amendment.


Harry Rutherford Jackman: I understand it is difficult to know whether the minister is serious or not. I heard the other day that officials in the department used to be very much concerned because the predecessor of the minister used to be worried about everything. Now they are very much concerned because the present incumbent of the office worries about nothing.


Douglas Charles Abbott: Who can tell.


Harry Rutherford Jackman: Who can tell? I should like to point out, first, that there is nothing temporary about the condition in which we find our trade position. It has been a chronic situation with us for years and years vis-a-vis the United States. In the bill which the minister has brought down there is no time Limit set at all. Should this house overlook the fact there is no time limit set we can be very thankful that there is another place, just as we found in the foreign exchange control bill. When our protestations were of

Foreign Exchange Conservation
no avail, bon. gentlemen in the other place were able to enforce upon the government a certain time limit. I think the Minister of Finance, who at that time may have been a parliamentary assistant, said that they would not make any changes.


Douglas Charles Abbott: I was Minister of National Defence at the time.


Harry Rutherford Jackman: But changes were made. I remember that in a corridor conversation he said that changes would not be made, but changes were made.
The second point I wish to make in regard to the use of the word "emergency" is that there is nothing curative in the present regulations in this bill. It is entirely as I have said twice in this house, very much like a patient who takes insulin, which keeps him alive from day to day but cures nothing. At least the minister should point out to the committee just how or where he expects our exchange position to be righted, and how he expects to look forward to having the condition remain righted and the controls removed at the same time. So far as one can see, these controls will be with us probably forever unless some adventitious event occurs and helps the government out of its predicament. The method of cure which many of us on this side of the house prefer is, of course, the more normal and natural one, the one which has worked in times gone by, namely, devaluation, perhaps step by step and within Bretton Woods, as I believe we shall be allowed to do. The question now is whether one wants the government to put on selective controls; whether the people want the government to prohibit this item or that or put it on the quota basis, or whether the people themselves, under the natural working of exchange, allow our dollar to go to the discount at which it is entitled to sell because of our prodigal buying. Do they want the government to tell them they may have this and that, or are we to continue under conditions as they have always operated in a free economy? There is not very much difference except as to who is to do the dictating, the individual or the government.
Are we to allow the normal method of economic law to work the situation out and to right it permanently and give it a permanent, self-righting cure? Is the government to decide whether we shall have $150 each to travel in the United States, or whether we can spend $10 for lettuce in the cold season? Personally I would much rather spend $10 for lettuce in place of being told by the government that I could have $150 to go to the United States.
The people of Canada do not want to be told how they may spend $20 or $25. They want to be given a certain freedom.
One generation may have been raised without lettuce and fresh vegetables in the wintertime. Another generation may have different ideas. Surely people can spend their own money the way they want to spend it, and if the government makes so much United States exchange available per capita, let the individual spend it as he wishes.


Clarence Decatur Howe: Appalling hardship.


Harry Rutherford Jackman: Quite a hardship.


Clarence Decatur Howe: Yes.


Harry Rutherford Jackman: It is a hardship to a great many people in Canada. People want to be freed from this irritation.


Douglas Charles Abbott: The amount of $2,800,000 worth of lettuce in the base period.


Harry Rutherford Jackman: Why should some fresh vegetables not be permitted to come into the country?


Joseph-Arthur Bradette: I am in the hands of the committee, but I do not think all this discussion should take place on the short title. If the committee wants a general discussion of all items on, the short title I shall be satisfied. Surely the committee wants to follow the rules if it hopes to make any progress in this important legislation. Unless we follow the rules we shall never make -any progress.


Harry Rutherford Jackman: I am always very glad to bow to your ruling, Mr. Chairman, but the question is whether or not the word "emergency" is applicable in this particular bill or whether it is not. This is an extremely important bill. Nothing at all is said about a time limit except that it is to expire on the proclamation of the governor general. The whole embodiment of the bill has to do with an emergent matter, but the very substance of it indicates that it is to be of a permanent nature. I hope, sir, that you are keeping that in mind if you feel that you must rule against me. I consider that the present regulations are not getting us anywhere. The government was impressed with the holding of the dam during December when the outflow was not as great as formerly. It is very much like a person who has been laying in a great store during the summer months. As the minister well knows, all the importers bought as much as they could. They used1 all the bank credit they could1 and even endeavoured to raise loans from private
Foreign Exchange Conservation

sources in order to buy United States products in the event that when the controls finally did come about, which were so well known to all these importers, they would then simply coast along for a while and give the minister's exchange account the appearance of having been temporarily righted, perhaps without too great hardship to the people.
I should like the minister to tell us just what there is in the nature of his orders today which will effect a permanent cure. What is there that is not exactly in the nature of a drug which keeps one alive from day to day? Where is the curative nature in these regulations? When may we look forward to their removal? That is where the emergency nature comes in. How are we ever to have them removed? I cannot see it myself, and1 I think the committee is entitled to some enlightenment. What is the effect of the devaluation in Italy and latterly in France on the government's position?


Douglas Charles Abbott: This should not be discussed on section 1 of the bill. I rise to a point of order. I have discussed the question of devaluation ad nauseam. I discussed it when we were on second reading of the bill. I have made three or four speeches on it. The announcement of the government's policy was with respect to the constructive side of this program. This bill admittedly deals with part of the restrictive measures, and we are on section 1, the short title. There must be some limit to the freedom of discussion which we can have on this section of the bill.


Harry Rutherford Jackman: Mr. Chairman, on the point of order, the question is, are these restrictions of an emergency nature, or are they of a permanent nature? There can be no question in my mind that they are of a permanent nature. We shall never get a cure so long as the government follows the policies it has followed! up to now.


Douglas Charles Abbott: That is your opinion.


Harry Rutherford Jackman: Unfortunately in these very words are expressed the whole gist of the bill.


Joseph-Arthur Bradette: Is the hon. member speaking to the point of order raised by the minister?


Harry Rutherford Jackman: I am explaining.


Joseph-Arthur Bradette: Does any other hon. member wish to speak on the point of order? The minister is perfectly right. Surely, the discussion has been going far afield. I do not think it is the intention of the committee to have it carried on indefinitely.


Harry Rutherford Jackman: Mr. Chairman, if you are going to rule against me I am forced to obey your ruling. The question is whether or not the matters outlined in the bill and the acts which are done under it are emergent, or whether they are not. I am claiming that there are a great many points which illustrate that, and I hope that members on the government side will pay some heed to the arguments I am putting forward. As a matter of fact, as far as I gathered, I have had good attention. I asked the minister a question which, I grant, was far afield. It was whether he had changed his mind since the devaluation of the franc. That was merely a theoretical question on which it may not be necessary to take up the time of the house, but there are a number of points which, I think, are germane to the question of whether or not the word "emergency" should remain in the title of the bill. With your permission, Mr. Chairman, I will continue.
What I should like to know is this. If these regulations are entirely of a temporary or emergent nature, as I assume the minister will suggest, how are we to re-establish our credit in the United States? It would seem at the present time that we cannot borrow there except from a government agency, the export-import bank. If we are to go to private sources there, as we ordinarily do as a self-respecting country, what is there to be of a permanent nature on which bankers can rely so that they can see that, if we borrow in United! States exchange, we shall be in a position to make repayment? As long as these regulations do not cure but merely keep alive, I do not feel that we are likely to reestablish our credit. The minister should point out to us what there is of a curative nature here which will, over the long term, keep the Canadian dollar in balance at some appropriate level.


Douglas Charles Abbott: The only cure will be to
export more and import less.


Harry Rutherford Jackman: There are various ways of doing that. The government may select one method and the people may prefer another. What I should like to ask the minister in regard to this "temporary" or "emergency" nature is this. What is to be the position of our country should we re-establish triangular trade as we had it before, and for the reestablishment of which we are now advancing hundreds of millions of dollars of credit? Again, we are the natural breadbasket for Great Britain and certain parts of Europe. What is to be the position of the Canadian dollar, first, vis-a-vis sterling and, second, vis-a-vis the United States dollar? In times gone by, when we were not on the gold

________________Foreign Exchange Conservation
standard, when you could not exchange all currencies at parity, we occupied a midway position. Today we find our dollar on a level with the United States dollar and sterling at a substantial discount. Should we be successful in restoring the triangular trade basis on which we functioned for so long in the past, when are we to readjust our currency so that we can get back to that normal position? Or would the minister be good enough to say that that is a condition which we should no longer have to look forward to, that our dollar can remain high? I am getting back again to whether this is a permanent cure or merely a temporary expedient. Would the minister at the same time explain to the committee why it was that our dollar sold at a discount in relation to the United States dollar at various times in our economic history, when our costs of manufacturing were not higher than United States costs; which situation, I understand from his previous expostulations, was the only reason why a country should ever consider devaluation of its currency. Perhaps the minister can give us some help.


Clarence Decatur Howe: Why not buy a good book on it?


Harry Rutherford Jackman: Not the kind the Minister of Trade and Commerce read the other day. In fact, he was not reading any book at ail. He was making up his own theory. In order not to burden the committee further, I would ask the minister to point out whether there is, in his opinion, anything of a curative nature in these present restrictions or whether they are merely a stopgap to keep us going from day to day.


Douglas Charles Abbott: To answer the last question -and I will not take the time of the committee to answer some of the others because they are theoretical-I have said time and time again that this particular measure is not a curative measure; it is a restrictive one; and that in the final analysis our situation will not be permanently cured until we can get paid in convertible currency in cash for what we export, in order to pay our bills in the United States. Because of the position we are in at the moment we must take restrictive action, and we shall have to continue that restrictive action until the constructive measures to which I have referred time and time again in other speeches have had time to work out.


Harry Rutherford Jackman: What ones?


Douglas Charles Abbott: On the question of what we shall do in our pattern of triangular trade and what will happen in the future, I would say
that we have a pattern of triangular trade now. If my hon. friend asks what we shall do when sterling again becomes convertible- and that, after all, is the test-that is a different question. We are selling substantial quantities now for a currency which is not convertible into United States dollars-perhaps his opinion on that is as good1 as mine. I do not know.


Arthur Leroy Smith: I have a short question to ask. I wonder if I interpret the minister's last remarks correctly by this illustration. It seems to me that he has told us that we are drowning in ten feet of water, but through this excellent government bill we are now going to drown in only eight feet of water. That seems to be about the situation.


Douglas Charles Abbott: My hon. friend, in his usual graphic way, has given an illustration; but I suggest that we are not drowning at all, that we are taking appropriate action to protect our position and taking it in time, and that effective action is getting results.


Stanley Howard Knowles: You set up a committee to find1 out where the water came from.


Mr. ROSS (St. Paul's):: I was interested in the minister's statement when he said that we are to use this method only to a point; that it was not a curative measure; that we are to use it until such time as the curative measures we have put into force will take care of the situation. I have never heard of any curative measure which will do that. I wonder whether it is the Marshall plan which he is hoping will afford some assistance? How long does he think it will take those countries in Europe to rehabilitate themselves? I suggest that the minister has not yet told us one of the things we can do in this country, as a curative measure, namely, selling our natural products in the United States in return for the things which we shall get from them; sell our cattle in the United States-


Douglas Charles Abbott: And take them from the United Kingdom.


Douglas Gooderham Ross: And I suggest the reason they have not done it-


Joseph-Arthur Bradette: Order.


Douglas Gooderham Ross: The Minister of Reconstruction at the present time has great hopes, as a matter of fact, of sending some of the goods which we are to manufacture bits and pieces over to the United States. 1 say that you might as well send coals to Newcastle as send those goods from this country. I suggest that the cabinet have taken a
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most unrealistic view of this whole matter. I think they are afraid to face the issue as it ought to be faced right now. We have these conditions and, as my hon. friend says, they have not done anything for us. We are going to drown anyway, whether it is in ten feet of water or in eight feet.


Douglas Charles Abbott: Mr. Chairman-


Douglas Gooderham Ross: I am going on for just a minute or two yet.


Douglas Charles Abbott: All right, go on. I thought my hon. friend was through.


Douglas Gooderham Ross: I say that the government have not taken a realistic view of the matter. If you want to do that, what have you to do? You must stop imports into Canada. Another thing you must do is do it over the whole population, not over just a few people. Why should one firm or one individual be singled out, crucified and put out of business? Why should all the people not bear the burden?


Douglas Charles Abbott: Certainly; put them all out of business.


Douglas Gooderham Ross: Why should the wheat producers take the price they are asked to take? Why should the burden not be spread over the whole population? That is what I am objecting to. Why not have sense and brains and devalue the dollar? Why stick to a prejudice? That is the point. I want now to quote one paragragh:
In the meantime the whole economy of Canada is being put through the strains of severe regulation for a possibly unrealistic objective.
This is from the Montreal Gazette, which was discussing reviews made by two publications, one from the sterling area and one from the dollar area, The Economist and the United States News. These fellows who analyse these situations and write these articles are not fools. They have brains. They are on different sides of the water; they both have statistical branches, and so on, as well as economists of no mean skill. Yet our government here, with the help of their advisers, set themselves up to do a certain thing when everyone in the rest of the world says they are crazy to do it. Let me repeat this paragraph:
In the meantime the whole economy of Canada is being put through bte strains of severe regulation for a possibly unrealstic objective.
The United States News would certainly seem to agree with the statement of The Economist that the Canadian cabinet ministers who say that "they hope to start taking controls off in a matter of months . . . show no willingness, let alone any desire, to face the future frankly."

That is so; and in1 addition they have not told us yet when they hope to take off those controls. The people of Canada are going to be kept in suspense for a long time. My guess is that it will not be a matter of ten or eleven months, as the minister says, but that it will be a matter of years. Once we get these things on, We shall never get them off until we get the government out.


Douglas Charles Abbott: I have only one comment to offer on the speech, just made by the hon. member for St. Paul's. That is, it is the last of a long series of defeatist speeches from hon. gentlemen sitting opposite. I am not interested in defeatist speeches.


Harry Rutherford Jackman: What do you mean,
"defeatist"?


Douglas Charles Abbott: Saying the country cannot get out of its exchange difficulty; that it is in a condition that will last for years; that the only cure is devaluation, and that these methods will not work. I make the assertion that they will work. If hon. gentlemen- opposite think they are helping the cause by standing up and saying these methods cannot work, that is their privilege.


Douglas Gooderham Ross: The minister says these things will partly work; that is really what he has told us. He believes these will be a help. I want the minister to rise in his place and let us in this House of Commons know what steps the government intend to take to see that our exchange situation becomes normal. He cannot depend on getting sufficient convertible currency from Great Britain for years; he knows that as well as I do. We have to do something for the people of Great Britain and the countries of Europe. We have to do that; everyone knows it. What is the use of calling these loans? They are not loans. We have to help- these people for our own satisfaction. If the minister can tell me what steps the government propose to take, it will be the first time he has told this House of Commons.


Douglas Charles Abbott: In order to save the time of the committee, I will send my hon. friend copies of several speeches I have made in the last couple of months. All the answers are there.


John Ritchie MacNicol: I should not like the impression of the hon. member for Swift Current, in what he said with respect to my remarks, to go unchallenged. I am sure the hon. member did not mean what I thought he meant in trying to suggest that I was not

Foreign Exchange Conservation
just as much interested in the small businessman as in the big businessman. I have been in business all my life, and businessmen and employment are my interest. I want to repeat what I said before, that I hope the two departments who have to handle this problem, which is a big problem, will try to work out some method whereby businessmen, large or small-it makes no difference to me, as long as they are employing labour-who find it necessary to ask for an explanation in regard to any regulations, will not always find it necessary to come to Ottawa. When I was speaking a few moments ago I had in mind two men, both large employers of labour. One has 670 men in his plant; the other has about 500. Both these men found it necessary to come to Ottawa, where they remained for about two days. They were treated very well by the departmental officials. From what they told me I am glad to learn that we have officials like those who discussed the problems of those two men, because both those gentlemen went back happy and satisfied, with their troubles eliminated.
What I had in mind was some method whereby such people could write to Ottawa, whether they were big businessmen or small, and have the department here unravel their difficulties without its being necessary for them to come here in person. I know what big businessmen have to do. A man with 670 employees believes it is his duty to be on the job every minute possible. It is no easy task to manage a company employing that many men, and to look after the products they produce. That is what I had in mind. I want both departments to make it as easy as they can for those who are seeing that the wheels of industry turn. I do not want the hon. member for Swift Current to get the impression I am not just as much interested in the small businessman as he is, or anyone else. That is not what I was trying to point out. I was talking for employers of labour, and I shall never cease talking for men who give other men employment.


Douglas Charles Abbott: I appreciate what my hon. friend has said about the departmental officials. The section which has been set up to handle this particular phase of the program has been under very heavy pressure since November, but I believe they have tried to meet the inquiries of the public as well as possible. It is not only possible but desirable that requests should be handled by correspondence. I am told we are now getting about 350 letters a day, dealing with matters most of which can be disposed of without the
applicant coming to Ottawa. In cases where that is not possible they are asked to come here, but even so it is advantageous to have such matters submitted in writing first, because then the matter can be looked int6 and the ground prepared.


Douglas Gooderham Ross: I did not hear the minister a few moments ago when he interrupted me to say, "and take it away from the poor Britons". Well, I submit that the only reason the poor Britons are taking our cattle and dairy products to such an extent is that these contracts were shoved down the throats of the Britons and they had to accept them on that basis in order to get wheat.


Douglas Charles Abbott: That is not the case. If the hon. gentleman had been in Britain as I have been, within the last three or four months, he would realize that they are glad to get our bacon and beef and cheese.


Mr. HAZEN:: I should like to ask the minister if he or his officials have made any investigation to ascertain whether United States funds can be saved by using Canadian National railway lines wholly within Canada rather than subsidiaries in the United States. I ask that question because last year in the railway committee I asked Mr. Vaughan, president of the Canadian National Railways, what the operating expenses of the Canadian National were on the line that runs from a point near Island Pond, Vermont, to Portland, Maine, and he told me the expenses amounted to $2,674,000. This year I put on the order paper a question asking if that amount was paid in United States funds. I was informed that of that amount, $2,348,482 was paid in United States funds. I am not in a position to say-and this may be looked into further-how much of the gross earnings was paid in United States funds. However, I believe that if the minister looks into the matter carefully he will find that a great proportion of the amount spent on that subsidiary of the Canadian National Railways running to Portland was paid in Canadian funds, while the operating expenses were paid in United States funds.
A dispatch from Ottawa appearing in the-Telegraph-Journal on November 28 last states:
The action of the Canadian National Railways in lowering export freight rates to Portland, Me., is in direct conflict with Canada's austerity program, it was admitted here today by officials of the foreign exchange control board. The belt-tightening program is to conserve United States dollars. The C.N.R.'s action will mean a depletion of this country's holdings of American dollars.
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"The loss in United States dollars in the running charges from the border to Portland, where the rail transportation cost is paid in Canada, may be considerable," officials state, "The extent of the loss will depend on how much freight is diverted to Portland."
I do not wish to read further from this press report, but I would suggest that if the minister has not examined into the possibilities of saving United States dollars by having the trade of our country go through Canadian rather than United States ports, and particularly the port of Portland, the matter might well be looked into by him.


Douglas Charles Abbott: I shall take note of my hon. friend's remarks and look into the matter.


Victor Quelch: Before eleven o'clock last Tuesday night, when discussing this bill I brought up the question of prohibitions against soft currency countries, and the minister gave a reply, but it was then too late to discuss the matter further. A few minutes ago the minister made further reference to this matter.
The minister has emphasized the point that the amount of business lost through prohibition against soft currency countries is negligible. I think he would agree that, while the amount of business might be negligible today, it might be greatTy increased in the not too distant future. I receive publications from England, and I know that the production of the very things we are prohibiting today is being increased; that is, the amount of their production is being increased today and will continue to be increased considerably in the future. So that the amount of business might be increased considerably in a few months' time.
The other point the minister made was that the government stands solidly behind the principle of non-discrimination. The policy of non-discrimination is merely one principle contained in one article of the general Geneva agreements. I think the minister agrees that the important point is not so much that we do not violate one principle of the general agreement, but that we shall not violate the general agreement in its entirety.
That being so, I suggest that the minister will have to agree that if at any time we place against any one nation a prohibition that we are not called upon to place, under the general agreement, then in fact we are discriminating against that nation. It is all very well to give lip service to the idea of non-discrimination; but when you apply against a nation a prohibition that you are not called upon to apply, under the general agreements, then you are definitely discriminating against that nation.

The degree is not important; that is, it is not important as to whether it is a great deal of business or a small amount of business. That, as I say, is not important; it is a question of principle. And to substantiate my argument, let me quote from the Geneva trade agreement, article XIII of which creates the principle of non-discrimination. But article XIII is definitely modified by article XIV. You cannot take one article out of this agreement, and say that is the principle of it. You have to take the other articles which modify or are related to article XIII.
Article XIV gives the exceptions to the principle of. non-discrimination in several ways. Let me refer particularly to subsection 1 (b). Perhaps I should refer to the whole of section 1, which bears the heading, "Exceptions to the rule of non-discrimination". It states:
1. (a) The contracting parties recognize that when a substantial and. widespread disequilibrium prevails in international trade and payments a contracting party applying restrictions under article XII may be able to increase its imports from certain sources without unduly depleting its monetary reserves-
And this is the important part:

if permitted to depart from the provision of article XIII. The contracting parties also recognize the need for close limitation of such departures so as not to handicap achievement of multilateral international trade.
(b) Accordingly, when a substantial and widespread disequilibrium prevails in international trade and payments -
And I interject that certainly that is the situation today.
-a contracting party applying import restrictions under article XII may relax such restrictions in a manner which departs from the provisions of article XIII to the extent necessary to obtain additional imports above the maximum total of imports which it could afford in the light of the requirements of paragraph 2 of article XII if its restrictions were fully consistent with the provisions of article XIII, provided that
(i) levels of delivered prices for products so imported are not established substantially higher than those Tuling for comparable goods regularly available from, other contracting parties.	fi
I shall stop there. Perhaps the minister may be able to argue under that section that
the price level of goods we would be importing from Great Britain would be higher than the price level of goods from elsewhere. But I am not so certain he can substantiate that charge. I have seen quotations showing prices of articles we can import from Great Britain, and they compare favourably with prices of similar goods we can import from the United States today. But if the minister is to make

Foreign Exchange Conservation
that argument, namely, that we cannot import articles from Great Britain without a violation of article XIII, because the price level of goods is higher, then let me refer him to subsection (6) of article XIV which states:
The provisions of article XIII shall not enter into force in respect of import restrictions applied by any contracting party pursuant to article XII in order to safeguard its external financial position and balance of payments, and the provisions of paragraph 1 of article XI and XIII shall not enter into force in respect pf export restrictions applied by any contracting party for the same reason, until January 1, 1949.
I say when you take those two sections of article XIV you find they definitely modify article XIII which laid down the principle of non-discrimination. Therefore I charge that when you apply against a nation certain provisions which, under the agreement, you are not compelled to apply, you have discriminated against that nation. While the minister may like to give lip service to the principle of non-discrimination, I charge that today this government is unduly discriminating against the United Kingdom.
Another point is that the minister suggested that the benefit we would derive from this policy is far greater than the benefit we would derive from allowing these goods into the country.


Douglas Charles Abbott: I said the benefits the United Kingdom would derive.


Victor Quelch: I think that is perhaps a matter of opinion. If the minister could argue that the amount of production of these articles which today is prohibited could not be increased, that might be true. But in view of the fact that Great Britain today is greatly increasing the production of those very things, it might tell a different story. I again emphasize this fact, that if we along with the United States, as two great producing nations, try to force upon less fortunate nations agreements which are not to their benefit, we may find that we are building up a position which may very well cause international friction and create war. That will certainly not be to our benefit in the future.


Douglas Charles Abbott: I listened attentively to my hon. friend, and I do not think there is anything I can add on this matter of nondiscrimination which I have not said already either in the course of the committee discussion on this bill or at other stages.1
I have only one other observation to make in connection with what he has said. So far as I am aware, I have not posed any argument
in connection with these matters of price levels in Great Britain or in any other country.


Victor Quelch: If you have not posed your argument in connection with non-discrimination in price levels in Great Britain, how can you say that in order to adhere to the Geneva trade pact you have to apply prohibitions against Great Britain? I contend that you are just basing your argument on one principle and ignoring the fact that it is made final by article XIV.


Douglas Charles Abbott: I have not necessarily tied up the Geneva pact with that principle. I have reiterated time and again that Canada believes the non-discrimination principle is in its vital interest. Whether there is an escape clause in the Geneva agreement which would permit us to violate that principle for a twelve months' period is, in my judgment, not particularly relevant.


Mr. STEPHENSON:: The object of this bill is to conserve United States currency and the method being used to do this is to restrict imports from the United States. Naturally this will create shortages of many things in Canada. Is it not reasonable that, in order that we be not deprived of those things, our manufacturers, processors and growers should be given some guidance by the government? Is it not possible for the government to say to these people, "This restricted program is going to be in force for two months, for six months, for two years or for ten years"? Surely the government has some policy under which it can say to our growers and manufacturers that this will be in effect, say for at least a year? Does the government still say that it has nothing to give to the people of this country in the way of guidance as to what they should do?


Douglas Charles Abbott: The difficulty with these committee discussions is that hon. members pop in and out of the chamber. I answered that question on Tuesday evening and again this afternoon.


Charles Elwood Stephenson: The answer is that there is no guidance to be given to the people of Canada?


Douglas Charles Abbott: I have repeatedly made my position and that of the government quite clear. These restrictions are considered as being necessarily temporary in nature; they are not protectionist. Unfortunately the people must exercise their own judgment as to how long it is likely to take.
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Charles Elwood Stephenson: It simply creates confusion. The government has no policy; that is just what has happened.


Agar Rodney Adamson: Before the debate on this amendment is closed I should like to reply to a statement made by the hon. member for Winnipeg North Centre. The reason just given by the hon. member for Durham is the reason why I moved to delete the word "emergency." It would be of advantage to the Canadian people to know when this provision would likely be terminated. The minister stated that we shall be expected to export more and import less.


Douglas Charles Abbott: Or both.


Agar Rodney Adamson: Or get our dollars into convertible currency, into cash or into sterling convertibility. In my opinion, those are longterm hopes. I was going to use the word "chronic" in connection with our exchange conservation measures. I looked up the meaning of the word and I find it means "lingering," "lasting" and "inveterate." I would say that our exchange position with regard to hard currency is lingering, lasting and inveterate at the present time.


Douglas Charles Abbott: I am a bit more optimistic than the hon. member.


Agar Rodney Adamson: The minister is more optimistic. Those are the hard facts, and they are world-wide. When we come to section 14, I intend to move another amendment setting a terminating date.


Mr. GREEN:: It is quite evident that a great deal of discretion will be exercised under the provisions of this bill by departmental officials here in Ottawa, officials of the Department of Finance and the Department of Trade and Commerce. There is a reasonable possibility of businessmen in Ontario and Quebec being able to come to Ottawa to state their cases before these officials, but it will be extremely difficult for the businessman, particularly the small businessman carrying on business in the west or in the maritimes.
Is there not some way in which discretion could be exercised by officials in more distant parts of the country? For example, there is a collector of customs in Vancouver, a senior official of the government. My understanding is that that collector has absolutely no discretion in connection with the administration of this austerity program. Would it not be possible to delegate some authority, so that a man in business in a small way in Vancouver could go to that collector of customs to tell his story and then find out whether special con-

sideration would be given to his case? It should not be so difficult to work out a remedy.


Douglas Charles Abbott: I am very conscious and the officers administering these new restrictions are very conscious of the difficulties faced by businessmen in the far west and the far east. There are not so many discretions exercised under the prohibitions under schedule I and the quotas under schedule II as there are under schedule III with respect to the import of capital goods under the permit system. The whole thing is under constant study, and I shall give careful consideration to the point raised by the hon. member for Vancouver South to see whether there is any possibility of delegating some authority to customs collectors or others at distant points.


Clarence Decatur Howe: There will be an officer with authority to grant import permits in each of the large centres across Canada. The Department of Trade and Commerce have officers who now have authority to grant export permits and it is intended that the same officers will be empowered to grant import permits.


Howard Charles Green: That would be under schedule III?


Clarence Decatur Howe: That is the schedule where the permits would be required.


Howard Charles Green: That will help a great deal, but the main difficulty is under schedule I which covers the power to deal with hardship cases. Practically all the cases that have been submitted to me come under schedules I and II and it was those cases I had in mind.
If a man in a distant city or town could walk in and tell a collector of customs or some responsible government official his story the possibility is that he would get consideration which he could not get by writing a letter. I have three or four cases of that type on my file, and I am confident, that if Mr. Taylor or one of his senior officials were in Vancouver and could interview these men, permits would be granted under the hardship clause, if not under some other provision. At the present time it is practically impossible to get consideration of that kind. I am glad to hear the Minister of Trade and Commerce say that he is providing for the granting of power to his officials in connection with schedule III. I do ask that power be given to deal with applications also under schedules I and II.


Douglas Charles Abbott: These hardship cases are very special cases, exceptions to the general rule. The provision is that they must be cases

Foreign Exchange Conservation
of particular hardship. I think it is fair to say that the great majority of those cases will already have been disposed of. Under the orders that exist now and under the statute as proposed that discretion must be exercised by myself. In practice, the way it is handled is this. The facts are submitted to a special committee, headed by Mr. Taylor. The facts are first taken by an official, either by correspondence or otherwise; then considered by this committee which has been set up by me, and that committee makes recommendations. In most cases I have accepted their recommendations where particular hardship has been shown. If there are circumstances which are very unusual they will sometimes discuss them with me first before consideration by the committee. I think it would be quite possible to have men collect the relevant facts, say in Vancouver, and send them here by wire or air mail for consideration by the committee, and by myself, if necessary. But I am afraid that in the very nature of things the discretion is one which has to be exercised here. I would find it difficult to delegate a general power to make these exceptions.


Howard Charles Green: There are several officials on that committee?


Douglas Charles Abbott: About four.


Howard Charles Green: What objection would there be to having some members of that committee go to the Pacific coast within the next few days and hear applications there? You would still have the same people making the decision, and you would get around the present difficulty that the small businessman has not a chance to present his case.


Douglas Charles Abbott: Businessmen never appear before that committee. Their representations are made to an individual. The committee consists of the assistant deputy minister of finance, Mr. Taylor; Mr. Donald Gordon, representing the foreign exchange control board; Mr. Mackenzie, deputy minister of trade and commerce; Mr. David Sim, deputy minister of customs, and Mr. Taggart of the Department of Agriculture. That is the committee which considers these hardship cases and makes recommendations to me. As my hon. friend will appreciate, it is a very high-level committee, consisting of senior officials. The facts are collected by subordinate officials but they are passed on by this committee. We shall do our best to see that facilities are available at other points to enable those who have cases to submit to get the facts
before local officials, but I am afraid the facts will have to be passed upon in the way I have outlined.


Howard Charles Green: There is a wide difference of approach between the two ministers. The Minister of Trade and Commerce said-


Douglas Charles Abbott: The conditions are entirely different.


Howard Charles Green: There is no difference at all. The Minister of Trade and Commerce has dealt with his part of the problem by giving authority to men in the different centres to make a decision, and I think he is quite right in doing so. That may be because he has been out to the west coast a great deal more than the Minister of Finance.


Douglas Charles Abbott: That is not fair.


Howard Charles Green: I do not want to be unfair.


Douglas Charles Abbott: That has nothing to do with it at all.


Howard Charles Green: It is a fact that the Minister of Trade and Commerce is providing for discretion to be exercised in the local centres, and, I repeat, there is no reason why the Department of Finance could not likewise give discretion to representatives in the local community.


Douglas Charles Abbott: The Minister of Trade and Commerce will supplement what I have to say. The circumstances are completely different. I have to act as judge whether or not there is a case of particular hardship. The Minister of Trade and Commerce has to decide whether it is proper to issue a permit, say for a printing press to come into Canada, or structural steel, or some other goods. The circumstances are completely different. They are not analogous at all. The Minister of Trade and Commerce can elaborate on that.


Clarence Decatur Howe: In schedule I a prohibition is applied. In schedule n quotas are applied. Neither of these calls for the issuance of a permit. There may be cases of hardship which deserve consideration, but such cases are an exception. In schedule III everything that is admitted- requires a permit. Therefore permits are the ordinary routine in schedule III, but not in schedules I and II. Where permits are required, we naturally have the facilities for issuing permits as well located as possible for the convenience of the public. We will have rules laid down governing the issuance of permits, and within those rules the local offices will deal with applications. But if there is a borderline case it will be referred to Ottawa for decision.
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Howard Charles Green: May I point out that the quotas are of the same nature.


Clarence Decatur Howe: Not at all.


Howard Charles Green: A quota has to be established for each business. Each business is entitled to a certain quota.


Douglas Charles Abbott: It is based on a mathematical formula. There is no discretion.


Clarence Decatur Howe: No permit is required.


Howard Charles Green: A quota has to be set up.


Douglas Charles Abbott: The hardship clause has nothing to do with quotas.


Howard Charles Green: I know that. I am pointing out that under schedule II a quota has to be set up for each business.


Douglas Charles Abbott: On a mathematical formula. There is no discretion. .


Howard Charles Green: Representations are made by the businessmen concerned!. They are making representations now to the committee here in Ottawa. Discretion with regard to these quotas should certainly be given to officials in the local centres, and I can see no reason why hardship cases should not also be dealt with by men in the different centres.


James MacKerras Macdonnell: Unless I misunderstood the two ministers, this clause seems to be not quite in accordance with what they said. Section 3 (1)
says:
No person shall import or attempt to import into Canada any goods-


Douglas Charles Abbott: Had we not better wait until we come to that?


James MacKerras Macdonnell: No, because this seems to say that permits are required under schedules I, II and1 III.


Douglas Charles Abbott: If my hon. friend will read further he will see that they are granted by way of quota. In the case of goods under schedule II, that is determined on a mathematical formula and the minister has no discretion. The permit is automatic. Under schedule III there is a discretionary issue of permits for a particular piece of goods.


Howard Charles Green: If the quota permit is automatic, could the local men not issue it without referring the case to Ottawa?


Douglas Charles Abbott: Yes, up to five per cent. The quofa is based on the imports of a particular importer in the base period.


Howard Charles Green: The local people are not given an over-all power to issue quotas under schedule II. They may be able to issue quotas

for a very small amount, but I understand that they do not make all the decisions on quotas. Is that not right? They may have power to allocate a small percentage of the quota, but the decision that really counts is not made by the local men at all, but in Ottawa.


Douglas Charles Abbott: It is not a decision because it is determined on the record of performance. What happens is this. The local collector of customs is entitled to give a man five per cent of his quota. The full quota to which he is entitled is determined by examining the customs records here at Ottawa, and Ottawa only; they have to be checked here. The discretionary five per cent is to enable the importer to carry on until such time as the customs records can be checked in order to determine on the mathematical formula what his full quota shall be. That is the method. Disputes may arise over questions of fact in connection with these quotas. I do not know what the practice is. I think the collector of customs would get the facts and it would have to be settled.


Howard Charles Green: At the present time I think everything of that type has to be channeled through Ottawa, and that is one of the things I am complaining about. There should be discretion out in the centres to make these decisions.


Douglas Charles Abbott: I am informed that the changes are ordered and issued here and here only of necessity because the records are here, except the five per cent to which I have referred. The quota difficulty will again be ironed out very soon, because the records are being checked and additional staff has been taken on. The great majority of the quota question disputes is as to the facts, and so on, and I think they have already been cleared up.


Howard Charles Green: Then I suggest that the minister go one step further and iron out the hardship cases and make a provision for them to be decided1 out in the communities, unless there is a very rare issue to be settled.


Douglas Charles Abbott: I shall do the best I can. It is a judicial function, and it is very hard to delegate that.


James MacKerras Macdonnell: I am sure the Minister of Finance did not intend the remark he made to prompt me to make a few further remarks, but it has. He said a few moments ago that these measures were not protectionist. I Should like to read a short statement to the committee indicating that his view is not unanimously held.

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Douglas Charles Abbott: I said the other day they were highly protectionist. Of course they are protectionist, but not intended for protection.


James MacKerras Macdonnell: The minister had a different view a few moments ago.


Douglas Charles Abbott: No.


James MacKerras Macdonnell: This is from the Winnipeg Free Press of January 5 last. I thought this short statement would be of interest:
As a part of the dollar shortage program, the dominion government last November 17, placed a large part of our imports from the United States under prohibition, quotas or suspended sentence with Mr. Howe as the judge and jury with power to cut them off if, as and when he pleases. The restrictions apply to scores of articles-stoves, radios, refrigerators, automobiles, furniture, cooking and heating equipment, machinery, all capital goods and so on. These goods are made in Canada by manufacturers who have always received tariff protection. But despite the disavowal of the government and the imposition of excise taxes on home production, the restrictions amount to the greatest dose of protection administered to this country since confederation. Compared with what happened last November, the Bennetts and the Meighens with their "no truck or trade with the Yankees," the "brick for brick tariff," "Canada First," tariff blasting and so on, were pikers.
I just thought the minister would be interested in that.


Douglas Charles Abbott: We could repeat this sort
of thing forever. This has been discussed time and again. I said the other night that of course this was highly protectionist; it could not be anything else.


James MacKerras Macdonnell: I was surprised to hear what the minister said this afternoon.


Douglas Charles Abbott: Of course what I meant to
say was that this was not introduced with the intention that it should be a protectionist measure, and I am sure my hon. friend realized that was what I was saying. It is not necessary to read a long excerpt from the Winnipeg Free Press to prove that.


James MacKerras Macdonnell: I thought the minister would be very much interested in the excerpt.


Douglas Charles Abbott: I read it.
Amendment (Mr. Adamson) negatived.


Douglas Charles Abbott: Perhaps I have just time
before six o'clock to answer the question asked by the hon. member for Muskoka-Ontario. I really intended to do this before. A somewhat similar question was asked by the hon. member for York West.
On Tuesday last the hon. member for Muskoka-Ontario raised a question about the movement of gold into Canada. Specifically, he asked:	[DOT]
. . . whether there were any unusual transactions, any windfalls, in the gold situation, whether any gold came in from some unexpected sources outside of the North American continent.
A little later on the same day, the hon. member for York West, referring to the statement I had given in regard! to our holdings of reserves, said that I-
. . . did not bring out the difference between gold and hard currency, and United States dollars. We do not know how much British gold and gold from other sources was shipped in and earmarked. We have just a general over-all figure of the gold and hard currency held.
I am not quite clear just what the hon. gentleman may have had in mind. However, I can say that there were no windfalls in the gold situation, no special shipments of gold into Canada from unexpected sources outside of the North American continent or, indeed, elsewhere, no imports of British or other gold for earmarking which affected our reserves, et cetera.
For the information of hon. members, I shall now break down the figures for our reserve position as of the four or five recent dates which I have already given to the house, showing our holdings of gold separately from our holdings of United States dollars. The figures are as follows:	,
November
November
December
December
13,
30, 17,
31,
J anuar-y 29,
	Total		
	Official		U.S.
Reserves	Gold	Dollarsmillions	millions	millions1947	500-7	347-0	159-11947	480-2	302-4	177-81947	400-9	281-4	179-51947	501-7	280-6	215-11948	513-9	290-0	217-9
During the period in question, the only special gold transactions which took place- and by "special" I mean transactions other than purchases of our newly mined gold when refined by the mint-consisted of purchases of gold from a foreign central bank for payment in United States dollars, and this gold was almost immediately sold to the federal reserve bank for United States dollars. Hon, members will note that this transaction did not affect our total reserve position but merely changed for a short time the relative holdings of gold and United States dollars in that total position.
With regard to the reference to earmarking made by the hon. member for York West, may I say that any amounts of gold held in Canada by foreign or central banks under
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earmark do not enter into Canada's exchange position at all, because they are not the property of the Canadian government or the Bank of Canada. Any changes which may have taken place in such earmarked gold, have, of course, no relation to the question of Canada's foreign exchange holdings.


James MacKerras Macdonnell: May I ask a question? Will the minister give the figure showing the other holdings of the foreign exchange control board, other than gold and United States dollars.


Douglas Charles Abbott: I am informed that my hon. friend has a similar question on the order paper and the answer to that is being prepared.
Section 1 agreed to.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.
On section 2-Definition-"permit".


James MacKerras Macdonnell: Section 2 in a sense takes us to the heart of the bill, and I should like to ask the minister to give us an explanation in some detail as to the way these permits are working. The matter came up briefly just before the dinner recess. The minister referred to these permits in a general way. The difference between schedule I, schedule II and schedule III has been pointed out, and also the fact that the permit in schedule I and schedule II is somewhat different from that in schedule III. The minister referred to the fact that changes had been made in schedule I. He says that, "after consideration of the various circumstances, it has been found desirable and proper to transfer items from the prohibition schedule to the quota schedule". He referred to the fact that under section IV he has given certain dispensations. Will the minister say in detail, if it will not run us into too much trouble, as to the permits which have been given? In other words, I want to know the distress conditions which have arisen for which permits have been given. The minister may feel that he should not give the names of the persons involved, but I see no reason why we should not have the other details; and I think it would be of interest for the committee to have them.


Douglas Charles Abbott: I think I can probably comply with that request, which is a perfectly fair one. First I should like to make a few general observations. With respect to goods

in schedule I there is no question of a permit except where there are circumstances of particular hardship under section 4. With respect to goods in schedule II the permit takes, of course, the form of a quota which is given to the importer in accordance with the mathematical formula that was discussed this afternoon. Up to the present time, in connection with the prohibitions set forth in schedule I, a total of 5,226 special permits have been issued under the particular hardship clause. That includes such things as the mass importation of tomatoes from the Bahamas, with which I think the committee is familiar. Representations were made that these tomatoes had been grown and that there was no alternative market.


John George Diefenbaker: How many applications were made?


Douglas Charles Abbott: There were also lumber and certain veneer items. Broken down between different countries there have been a total of 4,558 from the United States and 53 from the other schedule countries-that is to say, from dollar countries-or a total of 4,611. There have been 446 from the United Kingdom, and 169 from other non-schedule countries, making a total of 5,226 which I indicated a moment ago. The total value or total cost of those special permits-and these figures are as at February 7-amounted to $7,228,147. I have them broken down here into a long list of various commodities or items, but perhaps the committee does not wish me at this time to go into that detail. They can be made available if it is desired.


James MacKerras Macdonnell: Would the minister think it well to put them on Hansardf Is there any reason why they should not be put on Hansard?


Douglas Charles Abbott: None whatever. Perhaps it might be suitable if I had a table prepared and placed on Hansard this evening, or perhaps it could be put on tomorrow. The list contains such items as lumber, furniture, radios, washing machines and electrical supplies. There is a Jong list.


Harry Rutherford Jackman: Does the minister mean that the total cost of $7,000,000 was on a year's basis?


Douglas Charles Abbott: There are twenty-five specified groups and one sundry group. The total value of the goods which have been allowed in under the particular hardship clause is, as I have indicated, $7,228,147.


Harry Rutherford Jackman: Which is for what period?


Douglas Charles Abbott: That is from the whole world.

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John George Diefenbaker: How many applications have been made altogether, of which some are still pending and others have been turned down.


Douglas Charles Abbott: I have not available the' total number of applications. A great many were turned down on the ground' that they did not comply with the requirements of particular hardship. However, I have not those figures this evening and I am not sure whether they could be readily given now. They would be available from the files, of course, but I have not them here this evening.


John George Diefenbaker: The minister will be able to furnish them before this discussion is finished?


Douglas Charles Abbott: I am told that already there have been handled some 25,000 or 30,000 letters, which no doubt could be made available. I suppose it would mean going through all the files. Some of the applications, quite clearly on the face of them, on general principles would not involve circumstances of particular hardship. They would be cases where the individual felt that there was some hardship involved and would make application. That would be turned down on the ground that there was no particular hardship. There were certain principles established. For instance, if goods were being manufactured' in, let us say, the United States, and they had been stamped with the name of the importer, or they had containers or that sort of thing and could not be disposed' of readily in an alternative market without substantial loss, those were allowed in. That is typical of a large class of cases which would be treated as coming within the particular hardship category. On the other hand, if they were goods which could foe disposed of in the United States or some other market without any substantial loss, then in the final analysis I would decide that there was not any particular hardship within the meaning of the section.


James MacKerras Macdonnell: Was the word "hardship" interpreted merely as a case where the person concerned would suffer some specific financial loss due to the unwarned imposition of the measure? Is that the sense?


Douglas Charles Abbott: I think that is probably a pretty fair statement. It is a question of appreciation of the facts, as to whether there was particular hardship. Shall I put it in this way: if as a result of trying to dispose of the goods in the country of origin there would be serious financial loss, that would be considered as a case of particular hardship and a special permit would be issued. The variety of circumstances that have been put up has
been almost legion. I wish my friend, the former member for Vancouver-Burrard, were here. He put up an application for a merry-go-round that was either en route to or in Vancouver, and under conditions which we finally came to the conclusion would constitute particular hardship if the merry-go-round were not allowed to stay in Canada. I am citing that only as an example of specific cases which have been considered on their merits, in regard to which it was decided that there was particular hardship involved and that a permit should be given.


James MacKerras Macdonnell: I think the minister said there were a certain number of groups and then a miscellaneous class. Does he mean that there were certain general principles decided or that all of these many thousand of cases had been considered as special cases and decided purely on the special circumstances of the case?


Douglas Charles Abbott: There were a great many cases which fell into groups. On the other hand, there were a great many cases which really had to be considered and are still having to be considered as individual cases. We had one case of a merry-go-round, for instance, and there was one case in connection with grapes, as to which there was a long discussion because of the special way in which grapes are purchased ahead of time, are sent part way and placed in storage, and get in-transit rates and so on. It was found that, with respect to certain portions of the shipments which were en route here, there would; really be particular hardship if those were not allowed to come forward. It is very difficult to generalize. It was felt that this particular hardship provision should be put into the order in council, where it is now, and into the law in order to give some flexibility to enable cases of particular hardship to be dealt with on a judicial basis, as I said this afternoon. It is a question for appreciation by myself, really, on the advice of those who look into the facts, as to what should be done to relieve a particular case; and I would think, if I may just conclude, that within a fairly short time we shall be able to dispose of the great majority of these cases.


James MacKerras Macdonnell: When I asked the minister whether there were any groups which might fall into a principle-and if there are I hope the minister will attempt to describe them-what I had in mind was whether there were any principles which the general public ought to know, so that those who may have cases to bring to the minister may have some idea of the principles on which their applications will be dealt with.
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Douglas Charles Abbott: As I say, it is a little difficult to generalize. For instance, a wide range of paper products which are necessary for certain manufacturing processes have been admitted until alternative sources of supply can be arranged here in Canada. I am told that certain articles and equipment in connection with 25-cycle power have been allowed in for similar reasons. Of necessity, there must be the exercise of judgment in connection with these matters, and I think within another month or so we shall have that particular headache, if I may so describe it, largely behind us.


James MacKerras Macdonnell: To go back to what I said about general principles involved, has any publicity been given to what we have been calling the general considerations which might be a guide to the public?


Douglas Charles Abbott: Speaking generally, there has not been any publicity given, because it is not possible to lay down any general rule. In certain cases, however, advice has been given to certain sections of the trade as to what can be done. I am referring now particularly to certain lumber and veneers. The trade interested in these matters has been informed as to what will be permitted, and a circular, a copy of which I have in my hand, was sent out early in January to importers of lumber and veneers. I need not read the whole thing, but it begins in this way:
Following representations made by importers of lumber and veneers classified under customs tariff items 503. 504, 504a, 505, 507, and ex 507a (but not 507b) relaxations of prohibitions P.C. 4678 under permit have now been authorized as follows.
Then the particulars are given, and I am told that was published.


Mr. TIMMINS:: That will be a continuing matter, then?


Douglas Charles Abbott: Yes, that will be continued.


James MacKerras Macdonnell: That is the very sort of thing I had in mind. That appears to be a case where the distress is not merely that of some individual who happened to have entered into a contract which will cause him a loss; but it would seem to be a case where, due to the general needs of the trade, you are relaxing a prohibition. That is a different kind of distress. To me it would seem to be a recognition of the fact that certain goods are needed in this country. Is that correct?


Douglas Charles Abbott: In part, that is true. There are a few groups of that kind for which, temporarily at any rate, it is necessary to relax these prohibitions.


Park Manross: I thought these hardship matters came under section 4.


Douglas Charles Abbott: They do, and this discussion should properly have come under section 4, but it was brought about by the hon. member for Muskoka-Ontario in connection with the permit question. I would suggest that there is not very much controversy about section 2, which is merely a definition section; that probably a good many of these questions will relate to hardship, and therefore it would be better to bring them up under section 4.


Douglas Gooderham Ross: Before we leave
section 2, I want to ask a question about hardship.


Douglas Charles Abbott: Then I would suggest that the hon. member ask his question under section 4, which is the hardship section. Section 2 merely contains the definition.


Mr. FLEMING:: Arising out of an answer given by the minister, I should like to ask if in any case he has regarded as a hardship
case-


Douglas Charles Abbott: Now. Mr. Chairman. I
must ask that we deal with the hardship cases under section 4. I really think it will make for more efficiency. It is section 4 under which authority is given to issue special permits in case of particular hardship, and I urge hon. members to bring up hardship cases under that section. Otherwise we may have a couple of discussions on this particular phase of the bill. Probably we can reach section 4 in a few minutes.


Donald Methuen Fleming: I am quite prepared to
come back to this point on section 4, though my question arose from an answer given by the minister. If I may come back to that under section 4 I have no objection to leaving it now. However, there is another matter I wish to mention in relation to section 2. What has been the procedure established within the department for handling these applications? The minister has said that in the last analysis the responsibility for making a decision rests upon him.


Douglas Charles Abbott: With other committees
sitting I suppose it is necessary to indulge in a certain amount of repetition, but I suggest to my hon. friend that this question was asked this afternoon, when I know he was engaged in another committee, and at that time I gave a fairly detailed answer which will be found in today's Hansard. We have a special interdepartmental committee set up, and this afternoon I named the members of the com-

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mittee. They make recommendations to me. That is the procedure, which I outlined very fully this afternoon.


Donald Methuen Fleming: I did not intend to go
into that; I was only concerned with the minister's part in it. Are all these cases, the refusals as well as the issuing of licences, brought to the minister's personal attention, or is it a case of the committee winnowing them out and only leaving the actual granting of the permits to the personal decision of the minister?


Douglas Charles Abbott: After the first week or
two of this headache, if I may use that word again, a pattern more or less emerged. The committee to which I referred this afternoon, headed by Mr. Taylor, the assistant deputy minister, has dealt with a great many of these cases and issued the permits without referring them to me. This committee keeps full and complete minutes of its proceedings and the decisions it takes. Those minutes are sent to me after each meeting; and the understanding with respect to the permits which are issued without being referred specifically to myself is that if I take objection to the method by which cases are being handled, I am to let the chairman of the committee know. Special cases are referred to me. The merry-go-round case which I mentioned a moment ago was taken up with me specifically. I decided that it was a hardship case and that the merry-go-round had better stay in Canada.


James MacKerras Macdonnell: I am not trying to differ with the suggestion of the minister that cases of hardship should come under section 4, but there is a question I wish to raise. We want to discuss the nature of the permits under schedule III. I am ready to follow the minister's suggestions as to whether this might be discussed under section 2, as I thought, or whether it had better come under section 3. If the minister has no objection, I will raise it now.


Douglas Charles Abbott: I really think it would be more logical to discuss the nature of permits, the method of issuing them and so on, under section 3, which is the section which says that permits may be issued. This is purely a defining section. However, I do not suppose it makes much difference which way we do it, although I should think it would be more consistent to have it under section 3.


[Stage Direction]
Section agreed to.
On section 3-Goods not permitted import.
Donald Methuen Fleming: Mr. Chairman, would you call the subsections, please.


Joseph-Arthur Bradette: I believe it would be preferable to read the whole section, as we did with respect to section 2.


Donald Methuen Fleming: It could be called, one subsection at a time. It is a long section, and different things might be said by different members on the respective sections.


Joseph-Arthur Bradette: Subsection 1.


Douglas Charles Abbott: If I might be permitted to comment upon the suggestion of the hon. member for Eglinton, perhaps it might be wise to consider subsections 1 and 2 together, because they are closely linked. If we do not, I think the discussion is likely to overlap. Subsection 1 imposes a general rule that no goods shall be admitted, except by virtue of a permit; and then subsection 2 contains an important provision, namely, that the first subsection shall not apply in respect of goods which are included in the schedules to the act that were included in appendices seven, eight and nine of the foreign exchange control regulations. I believe the discussion might range over both subsections.


Joseph-Arthur Bradette: If it is satisfactory to the committee we shall call the whole section as one unit, so that it can be discussed as a whole.


Mr. JAEXICKE:: Mr. Chairman, I have an amendment to offer to this section. It concerns section 3 (1) of the bill. However, before offering my amendment, I should like to make a few remarks in support of it.
When closing the debate on second reading, the minister said that the principle of the bill was very simple. Its use was to apply import restrictions in order to conserve United States dollars. Yet, in no portion of the bill do we see any mention of United States dollars. As a matter of fact, except for the short title, and the title itself, the bill does not suggest that it is meant for the purpose of regulating exchange at all. If anyone reads the bill, without the explanation given in respect of it by the minister on second reading, he would say it was a bill intended for very high protection. As a matter of fact, the hon. member for Vancouver-Burrard suggested that it might be used for that purpose.
Statistics found at page 882 of the Canada Year Book, 1947, show that in every year since 1919, including 1947, with the exception of four years Canada has had a favourable trade balance. And those years when we did not have favourable trade balances wrere 1920, 1929, 1930 and 1931. The total of these
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favourable trade balances, after deducting the unfavourable ones, is something in the neighbourhood of $9,000 million.
Even if we take into account payments made to foreign countries on account of private and public debts and obligations, which undoubtedly were paid out of these trade balances, it seems to me, even if we take these debts paid into consideration, that somebody, somewhere, somehow, must owe us a lot of money. In view of this apparent favourable situation, it is almost unbelievable -and I am sure it is unbelievable to the people in the country-that the government finds itself in the precarious position of presenting this remarkable bill to parliament at this time.
Our trade statistics show that in all these years we have always sold more to Great Britain, to the commonwealth and to other western European countries, than we have bought from these countries. I believe that is still so. And in fact, it has been more so in the last few years in spite of the British preference which, I believe, has been in force for some fifty years.
These statistics also tell us that during all these years we always purchased more from the United States than they purchased from us; in fact, we purchased considerably more than they purchased from us; and again especially in the last few years.
In his speech when presenting the bill to the house, the Minister of Finance explained how we were able to manage for years under this lopsided arrangement. He pointed out that Great Britain, the commonwealth and other countries to which we sold were able to sell enough to the United States in order to provide them with sufficient funds to pay us. And the way the minister explained it, it was a sort of triangular arrangement. It seemed to work nicely during many years, and especially before the first world war.
It now turns out that this triangle is by no means an eternal triangle, and that this vehicle upon which our foreign trade seems to have slid along fairly smoothly for years has now been smashed. It is interesting to speculate as to who should bear the blame for the smashing of this nice triangular arrangement.


Douglas Charles Abbott: Blame it on Hitler.


Frank Eric Jaenicke: I am inclined to believe that no one in particular is to blame. We simply emerged into another new era of foreign trade and foreign relations necessitated by the technological and scientific advances on the one hand and war, destruction and
	, |
mistrust on the other. It seems to me that by force of these circumstances the world has lost its old banker, Britain. And, again by force of circumstances, and without anyone willing it, the United States has emerged as the world's banker. Without laying any particular blame on our good neighbour to the south, Uncle Sam, I am of the opinion that we find ourselves in this precarious position today because Uncle Sam does not measure up to John Bull as the world's banker. You see, besides being the world's banker. Great Britain was also the world's trader. She was a free trade country. She took goods from other countries which owed her; and if she did not need those goods for her own domestic use, or for any other use, she sold them wherever she could.
It seems to me that in thinking of world trade-and I argue that we would do well to think about that condition-and especially world trade before the first world war, perhaps we may now realize that the world owed a debt to Britain for managing the system of world trade quite well prior to the two wars. Without arguing in favour of going back to that system of world trade, it seems to me that, in order to revert to the fairly smooth working situation which existed before the wars, we would need a banker who is also a world's trader. And if Uncle Sam is to be that banker, whether he wills it or not, we have to go a lot farther than the concessions which have been made under the Geneva trade agreement.
The present bill attempts to rectify the siluation by conserving United States dollars. At the same time it endeavours to do this in a spirit of non-discrimination, as set forth in the Geneva agreement. In other words, the bill is drawn in accordance with the terms and spirit of the provisions of this agreement. I know that the minister in his address in presenting the bill on second reading did not rely upon the terms of the Geneva agreement. He tried to justify the non-discriminatory elements in the bill upon its own merits. But I may say I am quite sure the people in the country understand that the non-discriminatory feature of the bill is there because we wish to live within the terms and spirit of the Geneva agreement. That is why this bill is put forward as a non-discriminatory bill, and it is my opinion that, because of the inclusion of that principle, the bill will fail in its objectives. Even with the Geneva agreement, we still have time to enact a measure that would deal with this serious situation. It is true that it would have to be discriminatory, but it might remedy the situation.

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The hon. member for Acadia spoke on this matter on Tuesday and again this afternoon. He referred to articles XII and XIII and he read portions of article XVI. In order to have the story complete, I think we should have on the record the pertinent portions of articles XII and XIII. Article XII is the article which permits a signatory nation to the agreement to enact measures such as the one we are enacting at the present time. I shall read only the words which are necessary in order to make my meaning clear, which are:
Notwithstanding the provisions of paragraph 1 of article XI, any contracting party, in order to safeguard its external financial position and balance of payments, may restrict the quantity or value of merchandise permitted to be imported.
And again:
(i) to forestall the imminent threat of, or to stop, a serious decline in its monetary reserves.
The pertinent part of article XIII reads:
No prohibition or restriction shall be applied by any contracting party on the importation of any product of the territory of any other contracting party . . . unless the importation of the like product of all third countries or the exportation of the like product to all third countries is similarly prohibited or restricted.
Even to that non-discriminatory clause there is an exception. The hon. member for Acadia placed on the record the pertinent words in article XIV which provide an exception to that rule of non-discrimination set forth in article XIII. I am of the opinion that we could afford to use discrimination in order to balance our exchange with the United States. The minister said that Canada or the government is proud of the stand taken in applying, not discrimination, but rather non-discrimination in connection with this bill, and that we want to set an example. That is all very well and I commend him for his fine spirit, but the question is whether we can afford to take that attitude. I submit that we cannot. Even the United States is not loath about enacting a law which is against the spirit of the Geneva agreement. Just a few days ago I read in Foreign Trade, a publication of the Department of Trade and Commerce, issue of January 31, 1948, the following which appears on page 225:
The United States treasury department has ruled that the Canadian excise tax, imposed on November 18, 1947, is part of the freely offered price in Canada. Under the present United States customs laws, therefore, this tax must be included in the value for duty purposes of goods, subject to this tax when imported into the United States.
I submit that that attitude on the part of the United States is contrary to the provisions of article VII, section 3 of the Geneva agreement, which reads:
3. The value for customs purposes of any imported product should not include the amount of any internal tax, applicable within the country of origin or export, from which the imported product has been exempted or has been or will be relieved by means of refund.
In view of our precarious position, I submit that we cannot afford to set an example of non-discrimination. It is only discrimination that will overcome the difficulties in which we find ourselves. It seems to me that in order to balance our foreign financial position, in order to overcome our present monetary disequilibrium, in view of the statistics which have been quoted, we must restrict imports from the United States and all other countries which demand hard currency and encourage imports from countries which are willing to take our goods and which, by the way, already owe us a lot of money. I think we could very well apply the principle of discrimination to this bill, and therefore I beg to move, seconded by the hon. member for Winnipeg North Centre:
That subsection 1 of section 3 of Bill No. 3 be amended by inserting after the word "Canada" in line nine on page one of the said bill, the following words:
"From any country requiring gold or currency of the United States of America in payment or settlement of their purchase price."
That subsection would then read:
No person shall import or attempt to import into Canada from any country requiring gold or currency of the United States of America in payment or settlement of their purchase price any goods listed or of the classes described in schedules I, II or III.


Park Manross: I am not going to speak very long but I have some questions to ask. From the trend of events I think I had better cover them all in about ten minutes without waiting for answers because it seems that when the minister answers a simple question he takes just about as much time as he does to answer a speech. We are talking about section 3 which covers schedules I, II and III. which in our kind of language is schedule I, "you don't"; schedule II, "you do", and schedule III, "maybe". Schedule I covers prohibited articles; schedule II covers articles under quota, and schedule III says, "Maybe you get a permit."
This particular bill will be hard to administer. Before touching upon the particular tariff items I wish to mention, may I offer some advice to the excise and customs branch? I suggest that they hold sort of sales or educational meetings with the examiners located at the borders in order to attempt to turn
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them into diplomatic policemen. I have noticed quite a few cases at the border where examiners have got pretty rough and tough. I know it is hard to administer regulations and examine cars without becoming somewhat officious or throwing your authority about, especially when you try to get diplomats for the miserable salaries that are paid.
I have one particular case I should like to mention. A car crossed at Windsor containing an invalid who was returning from a hospital where she had undergone an operation. They were asked if they had anything to declare, and they said, "We have some gifts in the trunk." The examiner went to the trunk and he tore in and tore the claws off the furs and damaged the car. Then he had them move the lady who was an invalid inside the customs house where she was kept for quite a while. He said "You did not tell us about this item and that item." She said, "I told you they are all gifts, and the names are on them. If they are not permitted, you can seize the gifts." He said, "We are also going to seize the car." The way it works apparently is that if you say you have nothing to declare and they find something, you are hooked. That has been my experience. But if you tell them you have something, then they have not the right to seize the car. However, they seized the car-I am not making an issue of that-and they fined her $50. These people got to Tilbury. It got cold and they wanted to put a heavier coat on her mother who was an invalid. They could not find the coat, so they drove back to Windsor, and the coat was there in the customs house. That was a coat made in Canada, with a Canadian label on it. The customs officers told her that they did not intend to seize that coat, that it was there by an oversight. I am not criticizing that particular examiner or the department except to this extent-


Mr. McCANN:: Did my hon. friend state that the customs officer fined somebody $50?


Park Manross: The official fined somebody $50.


James Joseph McCann: That statement cannot be correct. Customs officers have no authority to fine anybody. What they have authority to do is to collect customs duties that are due. I doubt very much the accuracy of the hon. gentleman's statement.


Park Manross: Thank you very much, sir. Now I shall have to go into details, Mr. Chairman. They are as follows:
In re seizure No. 30322/7214:
The collector of customs and excise, Windsor, Ontario, having reported that a seizure has been made from you on January 29, 1948, of the following goods-

Which are listed, and it goes on to say:
That the said goods were smuggled into Canada and that the said automobile was used in such unlawful importation.
(Car released upon deposit of $50)


An hon. MEMBER:: What is the hon. member reading from?


Park Manross: I am reading from a Department of National Revenue statement. That $50 may not be a fine. The minister may trip me up on my English. I know they got $50 from her. I am not arguing that it was wrong. I am simply arguing that that was the attitude of those fellows because they have not been properly educated how to go about the matter. If the Minister of Finance and I held some sales meetings there we could educate these people to be diplomatic and still get the goods.
I presume that all items in the customs tariff which are not mentioned in the bill remain as is. That is my assumption. Tariff item 698 comes to my mind because this is White Cane week in Canada. Item 698 covers articles specially designed for the use of the blind, whether used for educational, recreational or other purposes. Such articles come in duty free. That item is not in the bill and I assume it remains as it is. It covers supplies brought in for the blind, such as Braille, and various other systems. The blind need these supplies and have not any too much money. I think the Minister of National Health and Welfare is going to do something further this session to implement the program coming as close as he can to the six-point program for the blind, and naturally, if he does this, more supplies will be required. I am going on the assumption that the rest of the items in the tariff which are not mentioned in the bill are not to be changed.
I turn now to item 415(a) in schedule I, which covers "refrigerators, domestic or store, completely equipped or not." It does not say, "and parts thereof," although the general ruling has been that if parts are completely assembled they come in under 415(a), but items such as brass valves, wheels and so forth, are cleared under the items covering such materials. I know we are not talking about taxes under this bill. Nevertheless refrigerators carry a 25 per cent tax. My understanding is that the manufacturer in Canada of electrical refrigerators can bring in all the parts he wants. In other words, the 25 per cent tax is to curtail production. But there is nothing in the regulations to curtail his importations. In other words, he has to cut down production. The 25 per cent tax is paid by young couples and veterans establishing homes, and the tax will slow up Canadian
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production. I should like to have seen the electrical refrigerator manufacturers given a United States dollar quota similar to automobile manufacturers, and then you would not have needed this 25 per cent tax on refrigerators. They would get a quota of United States dollars for what parts they need. It is an established fact with all the leading refrigerator manufacturers in Canada that the refrigerator contains a certain United States content. One manufacturer estimates his at $8.90, one at $11, of United States content. It varies. If that item could have been in schedule II and if it had been given a quota of United States dollars, it would have eliminated this burdensome 25 per cent tax.
There is nothing in the bill which says that a new company shall have a quota for bringing in parts, tools, machinery, and so forth. A United States firm might want to establish a branch in Canada. It may have lots of money in the United States and could send the parts in to its branch company. There should be some arrangement whereby new firms can get a quota on parts importations, even if it is only for a temporary period, until they can secure sources of supply in Canada to take care of their needs.
I do not know whether quotas have been set on automobiles imported from the United States. They are on the prohibited list but I understand there are to be quotas. I do not know whether it is to be a dollar quota to manufacturers or a car quota to dealers to bring in completed cars. Of course, if the quotas are equal in dollars to manufacturers and new dealers who have established themselves in business to be able to bring in Nash, Studebaker and other completed United States cars, the new dealer will be seriously handicapped. He could not get many cars if he gets only $210 a car. The importer of United States made cars who has no Canadian source of supply may be forced out of business, while the other dealers will still be kept in business, regardless of how severe the import quotas might be. I know that in my riding there is extreme hardship for four dealers, with a plant investment of $350,000, employing 3eventy-two men, and handling United States cars. They are now being practically put out of business. Their franchise is gone and their bank credit is practically gone.
I notice another item in schedule I, item 192 on page 8 of the original bill. I have not the reprint here. It covers insulation. Insulation, with the exception of fibre glass, is prohibited. I do not know why that one type of insulation has been permitted entry, while all the others have been barred. I called the department in regard to these items and asked
different people to try to find out why. I should like to know for my own satisfaction. We have refrigerator manufacturers and other people building houses and trying to insulate them. I asked the department why fibre glass was permitted to come into the country and other insulating materials were not. Finally I was told that somebody would call me back. You cannot expect everybody in the department to know everything, except the minister.
The individual to whom I was talking said that fibre glass was a much better insulating material. He said that it was a higher class material with much more heat resistance, and that is why it was admitted. I asked him what was the "K" factor of fibre glass. He said, "I do not get you." I said, "What is the 'K' factor of fibre glass?" He said, "I cannot tell you that." I said, "I can tell you that, because I have a book published under the authority of the Hon. J. L. Ilsley, M.P., Minister of Finance, in 1943, and on page 23 he lists the 'K' factor of these insulating materials." I might explain to the committee that the "K" factor has to do with heat resistance or conductivity of insulating material. Glass wool, which is fibre glass, has a "K" factor of [DOT]27; "Kimsul" and some other types of insulation that are prohibited have a "K" factor of [DOT]27, exactly the same. I told him that, and he said, "Fibre glass is used for certain types of refrigeration only; it is cut the size and it does not absorb moisture." That is all right. The minister might give somebody the right to import fibre glass for a particular type of refrigeration where there might be a certain moisture condition and where batts and other types of insulating material could not be used. Cork insulation is out because it is too hard to get.
Fibre glass was never used for insulating houses up to within the last few years. We have a manufacturing concern from the United States, the Kimberly Clark Corporation, with a $28,000,000 investment in Terrace, Ontario. They are building 2.500 houses for their employees. They want to insulate them with insulating material called Kimsul, which is made from Canadian pulpwood shipped to Wisconsin. They probably get one hundred and fifty million United States dollars from shipping pulpwood to the United States. They want to return probably $2,000,000 worth of insulating material from this pulpwood to Canada. The department felt that they were right when they took the stand that insulating material for houses is made in Canada and fibre glass is not for houses. If that were true, of course it would be all right; but the minuta
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the fibre glass people were permitted to import fibre glass insulation they went out to all dealers handling Kimsul insulating material to sell them fibre glass for houses. They brought their price down to the same price of other insulating materials. The fibre glass people are running an advertisement as follows:
Here's important news for the building trade. Fibreglass building insulation-the product which within eight short years of its introduction has rocketed to first place in the highly-competitive insulation field in the United States-is now distributed in Canada.
Therefore the prices are comparable. Fibre glass sells at $80 a thousand, while Kimsul insulating material sells at $75 a thousand. In other words, the fibre glass price is within $5 of the price of other materials. As a consequence, the fibre glass people have tripled their business, while the importers of other types of insulating material are not permitted to import. That is a problem in the schedules which should be taken care of. This is a matter which has come to my attention. I have no insulating distributors or manufacturers in my riding. It has come to my attention because I was associated with the business for a great many years, insulating houses, building cold storage places and so on across Canada.
Another matter I should like to mention is that of tumblers. I did not have as much information when I first brought this matter up as I now have. Machine-made tumblers, mostly tableware, come from the United States. If they are decorated when they come off the machine they are permitted to come in, but if they are decorated afterwards they are prohibited. The reason is that this bill is drawn solely on tariff items. Plain ware comes under one item and decorated ware under another. Before the war we used to get a lot of this ware from Belgium and England. Recently we seem to have cultivated the United States source of supply. Consequently they have allowed tumblers to come in from the United States. I cannot say whether we should or not, because I am not in a position to say whether we have enough in Canada or can get them from Belgium or not. But if tumblers come in from the United States, certainly we should allow the plain ones in. They cost twelve cents a dozen less, and in carload lots, which is the way they are bought, that is quite an item. This is another item that should be checked and rectified. These are not policy objections; they are schedule objections. As I said a while ago, they should have come under item 4, because some of them will create a real hardship.

I have nothing further to say on this schedule with the exception of that which was mentioned by the hon. member for Davenport this afternoon. I hope that limestone from Indiana will be permitted entry, so that the universities which are now expanding to take care of student veterans will be enabled to enlarge their institutions without spoiling their architectural appearance. I also hope that the Minister of Trade and Commerce, in his quite generous and thoroughly businesslike way, will give these universities permits for the necessary building material to enable them to accommodate the students they have received from the second war. That is all I have to say, Mr. Chairman. I could have put on a lot of questions, but that would take a lot of time. My questions are now on the record and we shall probably get the answers before the section is disposed of.


James MacKerras Macdonnell: I wish to go back to the question of permits under schedule III which, I think, are the most difficult and important. I do not know whether the minister would like to add something to what was said this afternoon just before the dinner recess. What we want to know is on what basis the permits are made; whether each case is being dealt with on its individual merits or whether there are certain general rules. We were told) that regulations were to be made. The minister might tell us whether these regulations have been made. If so, what are they? If not, why not, and just what the situation is at the moment.


Clarence Decatur Howe: There is a variety of permits under schedule III. Permits covering new construction are issued) on a project basis. In other words, if a building project is approved a project number is given the over-all expenditure. When approved, individual permits issue automatically. And, as applied to the project, the sum total of the individual permits must not exceed the limit set in the project, but within that limit permits issue freely.
So far as individual items of equipment are concerned, we have rules applying to that. If it is a replacement of a worn-out part it will issue automatically. If it is a new machine, the needs of the situation are examined and it depends on whether a case can be made out or not.


James MacKerras Macdonnell: Will the minister permit a question? Is the

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minister going to put on the record certain regulations, or is he just going to give us the general description?


Clarence Decatur Howe: Well, the only regulations today are the over-all permits affecting the automobile industry, both the manufacture andl the parts. But it is impossible to bring new construction projects down to an absolutely rigid 'basis. Generally speaking, the tests there are as to whether they will create important amounts of United States dollars; whether they are essential to the industrial life of Canada, such as hydro-electric plants; and as to the general purpose of the project. On several occasions I have said that projects which merely add to the comfort and convenience of the Canadian people are not granted permits; for example, moving picture theatres, office buildings or places of amusement are glaring examples of projects that are not granted permits.


Harry Rutherford Jackman: That is interesting to know after all these years.


Clarence Decatur Howe: If my hon. friend will just keep quiet I shall be able to inform the hon. gentleman who asked1 the question. My hon. friend's interjections are always helpful, but if we could keep the discussion to one at a time, it would help. As far as manufacturing firms are concerned, the purpose is to encourage the use of Canadian facilities to the maximum extent. The arrangement with the automobile industry has been published. It is so framed as to encourage the maximum use of Canadian components as well as the maximum effort on the part of the industry to export and help us to obtain United States dollars.


Harold Aberdeen Watson Timmins: I wish to ask a question
of both the Minister of Finance and the Minister of Trade and Commerce. At the present time I presume we are carrying on under P.C. 4678?-


Douglas Charles Abbott: That is correct.


Harold Aberdeen Watson Timmins: -and whatever regulations there are must be in P.C. 4678.


Douglas Charles Abbott: That is correct.


Harold Aberdeen Watson Timmins: There are a great number of things in P.C. 4678 such as designate currencies, non-resident, foreign currency, sterling area countries, Canadian currency, United States dollars and so on, which go to the very root of the matter of these import controls; yet they do not appear at all in the bill. I presume they must, at some time or another, all be covered by regulations,
and regulations come under this section 3. My suggestion, and it is only a suggestion, is that, since those regulations must come before us some time, they ought to come before the house just as soon as possible so that we may deal with these matters which are the very meat of this whole bill. That is my first thought.
My second thought is directed to the Minister of Trade and Commerce. He suggested that permits will be issued under schedule III in the way of projects. I presume that, if it is decided that a certain project was a necessary one and was entitled to a permit, if it was an office building the limestone required may come in, as well as marble and steel. There would not be any end to the component parts of that building that might come in under that project permit. Does it give to the builder, the contractor or owner a choice of materials, or just what strings does the minister have on the things that come in under that permit?


Clarence Decatur Howe: Before any project is approved, it is screened for United States content ; and where Canadian substitution is possible, any United States content is stripped from the project before it is approved. When the project is approved it has a list of materials to be imported from the United States, and a dollar value for those materials which has been approved by the officials responsible for the examination. But any project that is approved is approved only to the extent of permitting the import of materials absolutely necessary for the completion of the project.


Harold Aberdeen Watson Timmins: May I follow that up
by another question? As has happened and as will happen, suppose the minister is confronted with a project which is an office building and right next door he is confronted with another project which is partly mercantile and partly office building, what happens there?


Clarence Decatur Howe: Neither one would be
approved.


Harold Aberdeen Watson Timmins: Inasmuch as in certain
places, I see buildings being torn down and people being thrown out of their offices, can we take it absolutely that if they are in either one of those categories the projects will not be allowed to go ahead?


Clarence Decatur Howe: That is right.


Harold Aberdeen Watson Timmins: Is there not some way
that we could have before the house, and not so much before the house as before the
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people in business who may not be able to obtain them, the regulations which are to govern the minister's decision in respect of these matters in the future?


Clarence Decatur Howe: It is much easier for anyone in doubt to write to the department and get a ruling on the case than it is for me to lay down definite rules.


Stanley Howard Knowles: We shall have to get back to the amendment moved by the hon. member for Kindersley before long; but, as the Minister of Trade and Commerce has been brought into this discussion, I should like to express the hope that, some time before long, he will make a statement as to what is being done under his direction with regard to the positive side of this new program. We were told in November, when the Prime Minister and the Minister of Finance made their famous announcements, and we have been told a number of times since, that this program is not just a restrictive one; that it consists not only of the kind of measures that are before us now under the direction of the Minister of Finance, but that there is also a positive program headed up by the Minister of Trade and Commerce. We have been led to believe that there is to be an expansion of industry as the basis for increased exports which, in the long run will improve our position greatly. In the debate on the second reading of this measure, the Minister of Finance indicated that the Minister of Trade and Commerce would go into the matter later and give us the positive side of the story; but I submit that we are still waiting for it. The Minister of Trade and Commerce is talking in the same restrictive terms that we get from the Minister of Finance.


Douglas Charles Abbott: We have this bill before us now.


Stanley Howard Knowles: I am not particularly anxious that the Minister of Trade and Commerce make that kind of statement tonight, but I think he owes it to the house and to the country, some time soon, to give us some details on the positive side of the program.


Agar Rodney Adamson: The question just raised by the hon. member is one we spent all afternoon on.


Clarence Decatur Howe: I shall save you the trouble of asking it again. The attention of the department is being devoted actively to making use of any existing facilities in Canada. The department is also encouraging new projects which promise to be substantial earners of United States dollars or to add subfMr. Timmins.]
stantially to Canada's useful exports. That is the direction in which the efforts of the department are being directed, and with some success, I may say. We have arranged for the use of existing facilities which will provide for substantial increments of United States dollars.


Stanley Howard Knowles: Can the minister give some details, indicating in what industries or in what facilities these developments are taking place?


Douglas Charles Abbott: That is out of order.


Clarence Decatur Howe: I question how far we should be led down side alleys of this sort, Mr. Chairman. This has nothing to do with this bill.


Stanley Howard Knowles: It is an important part of the program. We have been waiting for it for three months.


Clarence Decatur Howe: I mentioned a program of $50,000,000 of aluminum exports to the United States from facilities that are not now active. I could mention an accumulation of other groups of projects, but I think it would hardly help hon. members to decide about this bill.


Stanley Howard Knowles: When shall we get that kind of discussion?


Clarence Decatur Howe: I do not think you will ever get it.


Stanley Howard Knowles: That is a great reply for a member of the Liberal party to give in the parliament of Canada.


Arthur Leroy Smith: Yes; and I am a member of it, and it is my turn. I contribute little, perhaps, and what I have to say now will be brief. A moment ago the hon. member for London was telling of the experience of some people who came to the border at Windsor. He was rudely contradicted by the Minister of National Revenue; and unfortunately that is becoming a habit with the minister, though he is the only member of the cabinet about whom I will say that. Lest he think everyone in his department is perfect, let me tell him that I crossed the border on January 25 at North Portal. I was going to the other side because of my health. My bank had communicated with the department and had obtained $400 for me. That took in my wife's $75 and my $75, so I did not get all the gravy that was going. I had my form H and everything else I should have had. The officer at North Portal said, "Have you $400"? I replied that I had. He said, "I will have to take it from you." He scared my wife to death; but I said, "Yes; you and who else?" Let us not think for one moment

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that these people the hon. member for London was talking about are all trained; and I hope they are not taking their cue from the manner exhibited' by the minister in this house tonight.


Mr. HERRIDGE:: I want to ask the minister one question on this point. What would be the reason for prohibiting the importation of certain very necessary things at this time, while at the same time there are no restrictions on the importation of United States films?


Douglas Charles Abbott: That is a pretty general question. I believe my colleague the Minister of Trade and Commerce is dealing with the film aspect of this matter. Some people consider that films are just as necessary a part of life as, shall we say, strawberries in January or some other things.


An hon. MEMBER:: Cabbages.


Douglas Charles Abbott: Well, we are importing cabbages now. One purpose of this program is to interfere as little as possible with established businesses in Canada on which a great many people are dependent for their livelihood. I do not think anyone can deny that the entertainment industry, including the motion picture industry, is certainly not patronized only by the upper ten, or that it is an industry which employs a great many people, and that it would be neither wise nor even desirable to cut it off in that way. I believe the Minister of Trade and Commerce can give the committee some idea of what is being done with respect to the importation of films, but I would hesitate to believe that members of this committee would suggest that we should prohibit the importation of United States films, or, for that matter, of any films.


Mr. FRASER:: They are a lot better than the films than the national film board get out.


Clarence Decatur Howe: Negotiations are going on with the film industry which promise a substantial quid pro quo to offset the drain of dollars caused by the industry. I am not prepared to make a full announcement this evening, but I think I can say Canada will get good value from the industry in return for permitting the industry to take Canadian dollars across the line.


Howard Charles Green: Has any restriction at all been placed upon the importation of films from the United States?


Clarence Decatur Howe: Certain film materials and cameras are prohibited.


Howard Charles Green: But has any restriction been imposed yet on the films?


Clarence Decatur Howe: No.


Mr. BLACKMORE:: A moment ago the Minister of Trade and Commerce spoke of various types of industry they were endeavouring to develop in Canada in order to save United States dollars. I just wonder if he will give particular attention to the possibility of developing the beet sugar industry in Canada. Last year we lost practically $28,000,000 in United States dollars because our beet sugar industry was not developed. If we really mean to get somewhere; if we really intend to develop industry in Canada, it is industry of this kind to which we must devote our attention, because there is no doubt this industry can succeed, and there is no doubt the Canadian beet sugar industry can save United States dollars if just a little common sense is shown in the management of that industry. But common sense was not indicated in the reply given me the day before yesterday by the Minister of Finance to a question I asked.


Douglas Charles Abbott: Well, Mr. Chairman, could we get back to section 3?


Lawrence Wilton Skey: I am most concerned about the reply just given by the Minister of Trade and Commerce to the hon. member for Winnipeg North Centre, who brought up a subject with which the committee was concerned all afternoon. One hon. member after another taxed the Minister of Finance with the same question. This is a restrictive measure, one of the positive measures, one of the curative measures in this legislation. Now it is put up to the Minister of Trade and Commerce, and he gives us the answer that there will never be the possibility of discussing this in the House of Commons. In other words, we must trust to him. I just want to draw a parallel to that answer, and I think it is apt in this case. Last evening I spent some hours in reading Mr. Trevor Roper's book entitled, "The Last Days of Hitler." In it he describes Mr. Goebbels' propaganda during the late war, by means of which the German people were kept happy year after year with his promise of the secret weapon. As I see it, this promise is the secret weapon of the Department of Finance and the Department of Trade and Commerce, and the Canadian people will never know what it is.


James MacKerras Macdonnell: I wish to say a word about the same question. As I understood it, the minister in effect said to the hon. member for Winnipeg North Centre that the details of the positive side of the government's new program would never be known.


Douglas Charles Abbott: He did not say that. *

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Clarence Decatur Howe: I did not say that.


James MacKerras Macdonnell: I have been a businessman myself, and I am not suggesting that the minister should come out and tell us all the details of this or that arrangement he has in view. But I am suggesting that we should not be left to learn in the newspapers some fine day that this or that has been done. I suggest that we are entitled to some general ideas, not just these vague pieces of optimism. I notice the minister was at it again the other evening, saying this would be only a matter of months. He might do well to learn a little from the Minister of Finance, who does not indulge in nonsense of that kind. I think we are entitled to some information, unless we are to believe that this arbitrary power has made the minister not only above himself but above us. There must be some information we can have and not, as I say, just these general observations.
Before I sit down, I want to ask one other question. I understood the minister to say that one of the industries to which United States dollars were being allowed was the automobile industry, and that this was being done on the basis of the amount of United States dollars which that industry was likely to bring into Canada. That is what I took down when the minister was speaking, and I thought that was what he said. If he wants to correct it I wish he would do so now.


Clarence Decatur Howe: The particulars of the automobile regulations have been published in the press for the last four days, both in advertisements and in the news columns. I have not that information before me at the moment, though I can get it. I said it was a proportion of imports they were allowed in the standard period, plus a proportion of the money spent on complete automobiles imported, plus a certain proportion of the money recovered from exports. But surely my hon. friend reads the newspapers, and he must have read that if he has any interest whatever in the subject.
So far as the hon. member for Winnipeg North Centre is concerned, if he saw the trade statistics for the last month which were published, and which I am sure are of interest to him, he would find that the increase in exports is very much larger than the decrease in imports. The exports did increase largely, while the imports were reduced, which is an indication that the program is in operation. And we hope that the future figures will indicate the same thing, namely a substantial increase in exports, while we bring about a reduction in imports.


James MacKerras Macdonnell: What are the increases in exports? Will the minister give us details?


Clarence Decatur Howe: We issue press releases on that subject almost every day. Surely my hon. friend knows that.


James MacKerras Macdonnell: I am asking the minister, if he has those figures, if he will let us have them. We are discussing that now.


Douglas Charles Abbott: We are completely out of order.


Stanley Howard Knowles: When will it be in order? I was told a minute ago, "never". I am asking the question again.


Joseph-Arthur Bradette: Part of this discussion is certainly out of order, because we are dealing with Bill No. 3, emergency measures for the conservation of foreign exchange. Is the amendment carried?


Douglas Charles Abbott: I wish to point out to the committee again that we are dealing with Bill No. 3, which is one sector of the dollar conservation program. It is a purely restrictive measure. I cannot say at the present time that it would be proper for me to speak about constructive measures which the government is taking, through the Department of Trade and Commerce and through other government departments, to increase our exports. But I do know, and I am certain that it would not be on section 3 of this bill.
.Mr. MACDONNELL (Muskoka-Ontario): Just a minute; we are discussing permits, and we have been asking the Minister of Trade and Commerce to tell us the basis upon which permits are being issued.


Douglas Charles Abbott: It has not anything to do with export.	*


James MacKerras Macdonnell: He has told us one of the bases of permits being issued-and I took this down-is the proportion of United States funds recovered by the motor industry. I want to know how the motor industry is recovering American funds. I do not think it is an unfair remark, for he himself brought it in as part of his argument. However, I will not press it. But I do wish to know what he means by saying that the automobile industry is producing American funds. If he is correct, where are the exports of motors going, which are producing American funds?


Clarence Decatur Howe: Mr. Chairman, all I can say is that it may surprise my hon. friend to know

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that the Canadian automobile industry is not a drain on balance-that is the industry manufacturing in Canada is not. It does not constitute a drain on American funds. Value of exports is in excess of value of imports. The net balance does not represent a drain.


James MacKerras Macdonnell: Does the minister mean a net balance in American funds?


Clarence Decatur Howe: The net balance of exports.


James MacKerras Macdonnell: That has not anything to do with this.


Clarence Decatur Howe: I say that it is much the same thing. However, it would take all evening to explain that to my hon. friend.


James MacKerras Macdonnell: All right, take all evening to do it.


Clarence Decatur Howe: As a matter of fact, dollar exports to the United Kingdom at the present time are just as good as exports to the United States, in obtaining American funds, because the balance in excess of the loan is paid for in gold-that is American funds.
However, the point I make is that it seems to us that the industry is capable of contributing much more in American funds than it has been doing, and the regulations are framed with that in mind. I shall be very glad to get the regulations and either put them on Hansard or send them to my hon. friend. I have sent up for them. I am surprised that he has not read them. I think he will see they are definitely designed for that purpose.


Agar Rodney Adamson: The minister said that exports to the non-dollar countries were paid for in gold. Does that mean that exports of automobiles from Canada to South America and England are paid for in gold?


Clarence Decatur Howe: The minute gold is mentioned, my hon. friend pricks up his ears; the discussion is getting into his territory. The position is this, that certain amounts of credit are issued per month to the sterling countries. Everything above those amounts is paid for in gold. If we ship anything to the sterling areas in addition to the amount of the credit, it is just as valuable in United States dollars as though we shipped it to the United States, because it produces gold. That is probably too deep for the hon. member.


Harry Rutherford Jackman: What the minister said was that we allowed Britain so many credits per month, I suppose in Canadian dollars, to repay us for things they buy from us. And anything above those credits will be paid to Canada in gold.
The question is this, should Canadians increase their imports from Great Britain? Then that would tend to offset further purchases from us by Great Britain.


Douglas Charles Abbott: Right. The position is
simply this, that the net deficit is financed partly out of credit and partly in cash. If the United Kingdom increases its exports of textiles, for instance, to Canada, it is just the same as United States dollars, or gold of course.
But I suggest that we do not get into a discussion of the balance of payments position on section 3 of the bill, or a discussion of any of the other thousand and one variations of this complex exchange problem, or we shall never finish. I do not know how we can handle it at all. One comes here with certain information ready to answer certain questions. I have before me some very competent officials who have figures with them, but it was not contemplated that this evening we would be discussing those subjects which have been raised. I do not think we have the necessary detailed information which could be provided to the committee. Questions as to the details in connection with permits are not properly asked now. General questions asking how permits are issued are perfectly in order, but when we get to details, it certainly does not come under this section.


Joseph-Arthur Bradette: The point is well taken by the Minister of Finance. It is absolutely impossible to cover all financial ramifications on this bill. This is a bill for a definite purpose, and we are dealing with one section of it.


James MacKerras Macdonnell: The Chairman and the minister agree that this is the proper time to discuss permits; and the Minister of Trade and Commerce undertook to tell us the bases upon which he was issuing them. So far as I am concerned, the information he has given is either wrong or so confused that I, at any rate, cannot understand it. He can blame me for that, if he likes, but I will come back to have it cleared up. The minister gave us figures with regard to the automobile industry which, I think, are entirely misleading. I cannot yet believe that he has answered squarely the question I have asked him, because he got out of it by saying that exports to the United Kingdom were as good as gold, because the amount over and above our credit was paid in gold. How much is paid by our credit, and how much in gold? My understanding is that it is mainly paid by our credit. What

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is the sense of the minister saying that you apply the gold wholly to the automobile industry?


Douglas Charles Abbott: If the British take automobiles, they will take them instead of aluminum; that is the answer to that.


Mr. McMASTER:: Are any credits being given to the sterling countries other than the unexpended balance of the loans today?


Douglas Charles Abbott: None.


Stanley Howard Knowles: As will be seen, this
section has to do with import controls. I understood-and I am speaking subject to correction-that one of the principles of import control was to provide in it the proper exceptions to enable the Minister of Trade and Commerce to assist in developing certain Canadian industries for the purpose of increasing our exports to help to overcome our balance of payments. That is the reason why I waited patiently until we reached section 3, because I thought that would be the appropriate place to discuss the positive side of the program which will be under the direction of the Minister of Trade and Commerce. I still feel that it is a perfectly proper question for a member of parliament to ask, namely, that some minister of the government should indicate when we can hope to get some information about that positive side of the program.


Douglas Charles Abbott: Section 3 has nothing to
do with the positive side of the program. The provisions with respect to capital goods in schedule 3 are there because, in the very nature of things, they do not lend themselves to quota restriction. Obviously one could not make a blanket prohibition of the importation of essential goods like machinery and structural steel. It was felt that the only practical way to deal with the importation of that class of goods as distinct from consumer goods was by the permit system. That permit system has nothing directly to do with the constructive side of the program. It might well be that one of the reasons which would govern in allowing or refusing a permit would be the fact that the project which was contemplated would contribute to our export trade, but the measure is essentially restrictive. These articles are such that they could not naturally be restricted under a quota system.


Stanley Howard Knowles: That is a fair enough
reply, but could the minister indicate at the same time when we can discuss the positive side of the program? I am beginning to wonder if there is one.


Douglas Charles Abbott: There is one obvious place where one could do that, and that is on the estimates of the Minister of Trade and Commerce. If there were no other place, it certainly could be done there. I think that would be an appropriate place to discuss this long-range matter. Obviously it is something that cannot be accomplished overnight, and I said that in my radio speech on November 17. I said these restrictive measures would be necessary until such time as the long-range constructive measure could be brought into effect.	The hon. member for Cape
Breton South laughs.


Mr. GILLIS:: You mean it is out of range.


Douglas Charles Abbott: I think any hon. member,
on reflection, will agree that it is a pretty commonsense point of view.


Howard Charles Green: I should like to get back
to the consideration of the amendment before the committee. As I understand it, the effect of that amendment i3 to take out of the operation of this bill imports from all countries other than dollar countries. I may be wrong in my interpretation, but I understand that that is what the amendment would do if accepted.


Douglas Charles Abbott: That is my understanding of it.


Howard Charles Green: I must say that I support wholeheartedly an amendment of that type. Frankly I do not see how many of the private members on the government side can oppose that amendment. There are three types of restrictions provided by Bill No. 3. The restrictions under schedule I are in the form of outright prohibitions which apply to all countries, dollar countries and non-dollar countries or soft money countries, as the minister calls them.
Schedule II provides for quotas. It is pertinent to note that, in setting the quota restrictions, the government has forgotten all about this non-discriminatory principle about which the minister is so boastful. Two types of country are set out, the dollar country and the non-dollar country, and each is treated in a different way. I ask the Minister of Finance to correct me if I am wrong, but my understanding is that the dollar countries are Cuba, the Dominican Republic, Guatemala, Haiti, Panama, El Salvador, Switzerland and Russia, which could hardly be described as a dollar country although she is in with the rest.


Douglas Charles Abbott: It is not a question of being a dollar country or not. It is rather a ques-

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tion of being one of the group of countries which are technically known as countries in balance of payment difficulties.


Howard Charles Green: Then there is the United States, including Alaska, Hawaii, Guam, Puerto Rico and the Virgin Islands, and Venezuela. There is discrimination in connection with schedule II.
There is a third group which comes under the Minister of Trade and Commerce and in which goods from all countries are included. In this case a permit must be obtained for the import of capital goods from any country.
It is perfectly clear that the problem we are facing is a shortage of United States dollars. It is also perfectly clear-and no minister has contradicted this-that under the Geneva trade treaties which the minister gives as his reason for having non-discriminafcory-


Douglas Charles Abbott: I did not give it as my reason.


Howard Charles Green: I am glad to hear that. Incidentally, I suspected that that was not the minister's reason. There is no doubt that under the Geneva treaties we have the power to adopt discriminatory policies.


Douglas Charles Abbott: For twelve months.


Howard Charles Green: For twelve months. The minister says that this bill is temporary; he is calling it an emergency bill. The Minister of Trade and Commerce said it is to be for only a few months. Is it to be for more than twelve months, or what is it to be?


Clarence Decatur Howe: Just keep the record straight; I never said a few months.


Howard Charles Green: I am afraid that what happens is that the Minister of Trade and Commerce gets enthusiastic and does not know what he says.


Clarence Decatur Howe: I know what I say.


Howard Charles Green: I am afraid that statement was of that type.


Clarence Decatur Howe: I am afraid it was not.


Howard Charles Green: It is perfectly clear that under the Geneva trade treaties Canada can discriminate to remedy an adverse exchange situation. It is perfectly clear that, by adopting this policy of total prohibition against non-dollar countries when we do not need to, we have discrimination. That is the sort of action which is breaking the terms of the agreement upon which some of the ministers place such store.
The minister said last night that this nondiscriminatory policy was of the utmost value to Canada because of our large export trade and the fact that there was this Atlantic 5849-75J
triangle of the United States, Canada and: Great Britain. I would point out that Great Britain has always been our best customer.


Douglas Charles Abbott: No.


Howard Charles Green: Practically always.


Douglas Charles Abbott: No, not practically always.


Howard Charles Green: Ever since confederation, with the exception of a few years. So far as Great Britain is concerned, much of that trade has been built up undter the discriminatory policy. The empire preferences, which were the only things that pulled us out of the depression, were discriminatory. Under those preferences, British Columbia was able to sell her lumber, her apples and her fish. There is no British Columbia member on the Liberal side of the house who will disagree with that statement.


Mr. REID:: Do not point at me; I voted against the trade agreements.


Howard Charles Green: You made a big mistake that time. The hon. member for New Westminster does not often make a mistake like that. The imperial preferences were discriminatory. Canada's whole tariff policy from confederation to within these last few weeks has been discriminatory. No matter what government was in power, that was the type of fiscal policy we adopted.
Now suddenly the government has turned to a non-discriminatory policy. I would point out that we do not yet know what the United States will do. Congress has not approved the Geneva treaties and we do not know yet how far they are going to go. We do not know what concessions we shall get in the United States market. For the life of me I cannot understand why Canada is in such a hurry to give everything away. The Minister of Finance said last night, at page 1088 of Hansard:
We do want to set an example.
We want to set an example to the whole world. That is why we are rushing into this non-discriminatory policy. The hon. member for Kindersley said that the government had adopted this non-discriminatory policy because of the Geneva treaties, but the Minister of Finance a moment ago denied that. He said that is not the reason at all.


Douglas Charles Abbott: Not the only reason.


Howard Charles Green: The reason was given clearly by the minister himself when he said on December 9, as reported at page 95 of Hansard:
The United States in particular attaches great importance to the non-discrimination
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^principle. While it possibly could not be called -a fetish with them, it is a principle to which .great importance is attached. The success of this emergency program and the smooth functioning of our economy depend upon the wholehearted co-operation of our friends to the *south. That has been evidenced by their willingness to make us a loan of $300 million.


Douglas Charles Abbott: And to give us oil and steel.


Howard Charles Green: Give us nothing. We are paying for it all. The minister talks about a loan of $300 million. He does not tell the house that he was turned down when he asked for $800 million.


Douglas Charles Abbott: He did not ask for that and was not turned down. Where does my hon. friend get his information?


Howard Charles Green: Let us get down to bedrock. The reason for this rush to adopt a nondiscriminatory policy is to please the United States, and there is no other reason. This bill has one great defect. It should have stamped on every page, in large red letters, "Made in U.S.A."


Douglas Charles Abbott: What nonsense!


Howard Charles Green: Then we would know exactly what sort of thing we are dealing with.


Clarence Decatur Howe: No truck or trade with the Yankees.


Howard Charles Green: It is not a question of no truck or trade. That is just a cheap interjection.


Clarence Decatur Howe: I am simply saying-


Howard Charles Green: Let my hon. friend rise in his place to say it.


Clarence Decatur Howe: I simply say that cutting off imports from the United States, a market which they have had for many years, to help us straighten out our dollar position and at the same time preserve our place in the United States market is no truck or trade with the Yankees.


Howard Charles Green: I do not know what that has to do with the matter. I do say this, Mr. Chairman: there was a situation to be met and I am sure the people of the United States understand it. They are friends of ours and they know what position we are in. They want these restrictions lifted as soon as possible, and the quickest way to remedy our trouble was to put restrictions on imports of dollar goods rather than on goods from all over the world. The United States people have always been our friends and always will be. I should like to tell the ministers this, that the people of the United States and the United States government would have far more respect for the Canadian government if

it stood on its feet and took the straightforward course. It is not the American way to want to have people grovelling before them and trying to win their favour. That is not how they do business, no more than it is our way. If we want the respect of the people of the United States, let us be open and aboveboard about this thing and not try to go around the corner. I urge the members on the government side to support this amendment and to make this bill apply only to the dollar countries. That is the reasonable provision to make at the present time. Put the bill through on that basis, and let us try to get over our difficulties as quickly as possible. But do not use this present occasion as a means of bringing in a non-discriminatory policy.


Douglas Charles Abbott: I do not know how my hon. friend can speak with such complete assurance as to what the attitude of the United States people and government would be if we adopted the suggestion which is contained in this amendment and which my hon. friend has just advocated of a frankly out-and-out discriminatory policy against the United States.


Howard Charles Green: And all other dollar countries.


Douglas Charles Abbott: But they do not amount to very much, I am sorry to say. It would be considered, and rightly considered, as a frankly discriminatory policy aimed at the United States. I know what I am talking about, because I have some means of knowing what the people of the United States feel about trade discrimination and I know that is how it would be considered. I hope the committee will fully realize the implications of adopting such a policy. I realize them, and I hope the committee will. The United States have been very good neighbours, and in the difficult times during the war when we were very short of essential supplies there was never any restriction placed on their exports to Canada. Export permits and export controls have never been enforced by the United States against Canada, as they have been against every other country. When hon. members stop to reflect for a moment on some of the essential raw materials we have to obtain from the United States, such as oil, steel and so on, I think they will agree it is important that the United States should continue to treat us in that wray. That is something we might well bear in mind. I have, both this afternoon and before, discussed this question of discrimination and non-discrimination, and I have said that the net effect of adhering to this desirable principle will be, not to injure or diminish our imports from soft currency areas, but to increase them.
The amendment strikes right at the fundamental principle of the bill and converts it

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from a bill which is non-discriminatory to a bill which is aimed directly at the United States. I want the members of the committee to realize fully what they are doing if they vote for this amendment. I say at once that I cannot accept it and the government cannot accept it. The amendment will be opposed.


Mr. MERRITT:: I should like to ask the minister a question arising out of his statement. Was the minister giving the committee an expression of his own opinion when he said that discriminatory measures against the United States would have repercussions in the way of stopping all United States exports to Canada, or has he had the assurance from United States authorities that that would be the result?


Douglas Charles Abbott: I have had no such assurance, but I know this without any question, that such action would be deeply resented in the United States. What action they might see fit to take in consequence I do not know. They have always treated us extremely well. But to take such discriminatory action against them is something I would not do.


Charles Cecil Ingersoll Merritt: I am reminded by the minister's statement of something that took place in this house in 1930 when Canada was facing an adverse trade balance with the United States, although in lesser degree than today. It is my understanding that at that time the Conservative party, then in opposition, were calling upon the government to take action to right the adverse trade balance in the then only known way by the imposition of tariffs. The government was unwilling to take this course, and the then Prime Minister who is also the present Prime Minister said: Oh, yes, we could take action like that, but in dealing with our great friends and neighbours to the south "we must keep cool heads." Somebody from the front row of the opposition benches called out that the right hon. gentleman "has his extremities mixed." I think we have the same situation here now. If the minister has not this assurance from an official source in the United States that the result of our taking direct measures to counteract what after all is shortage of United States dollars and not other currency, I think we have the same Liberal party attitude, the same pattern and no changing of its stripes after eighteen years. I feel sure that in cur present difficulties any steps that we took which were not designed against any country for the mere sake of discrimination, but were designed to protect this country from conditions to which it has come without any fault on the part of the Canadian people, would not be resented by
any right-minded people. In taking the course that he has, and in making the statements that he has made this evening, the minister is not rightly interpreting the spirit either of the United States or Canadian people.
I have been quite amazed, and I should like the minister to expand on his position in this respect. In introducing this bill, the minister gave a reason for the imposition of the special excise taxes, which may be found on page 336 of Hansard. I agree it was only one reason, but he said in part:
A second reason for these taxes was to limit so far as practicable the degree of discrimination against regular suppliers in the United States and their dealer organizations in Canada. For the time being, many of these suppliers and dealers are losing a part of their business because of the unavoidable necessity of restricting imports from the United States. Regrettable as it is, we cannot help that.
I call the attention of the committee to the next words:
But by imposing these excise taxes we are doing something to protect the legitimate long-range interests of these businesses. While the Canadian manufacturers are temporarily relieved of competition from the United States, their unexpected advantage is being at least partly offset by the effects of the special taxes.
I would have said that the Canadian manufacturers were under disadvantage now, not advantages. So much for the way the minister, in practising non-discrimination, deals with United States business which has interests in Canada. He specifically protects them. He uses the word that is so hateful to him, "protection". When he introduces this general range of legislation respecting restrictions he will protect United States business. Perhaps there is nothing wrong with that, but I would have expected that he would also take equal pains to protect Canadian businesses and the Canadian people. I would have thought he would use-


Douglas Charles Abbott: The tax is against the Canadians also.


Charles Cecil Ingersoll Merritt: I would have thought that he would use them with at least as much consideration and generosity as he used United States firms.


Douglas Charles Abbott: He has.


Charles Cecil Ingersoll Merritt: But on the other hand, I shall give the committee one example of how the minister looks at his duty toward the Canadian people. He protects the United States businessman. But when we were talking the other night about hothouse tomatoes and lettuce, the minister, in dealing with the restriction and refusing to give the Canadian people any lead as to how long the restriction
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would be in operation, said of the measure, as reported at page 1082 of Hansard of February 10:
It is put on reluctantly, and anyone who expands production in a particular field, relying on the protection which is afforded by these prohibitions, must do so at his own risk.
In other words, special measures to protect the United States business. Perhaps that is perfectly all right, but surely not all right when he accompanies them with these categorical statements that Canadians must get along at their own risk.
Then again, on page 1077 of Hansard the minister said, and he brought this point up himself in talking about representations that had been made to him:
We realize, of course, that it has a highly protective effect; and quite a number of Canadian industrialists, or at least, Canadian producers, have suggested that many United States dollars could be saved if we would add some items to the list, and thereby stimulate production in Canada. However, thus far we have not seen fit to accede to those requests.
In another part of the same evening's debate at page 1086, the minister had this to say about the suggestion from the hon. member for York West, that deflation of the dollar would still be necessary, coupled with this program. Referring to the hon. member, the minister said:
It is true that he has been an advocate of devaluation for some time, and there are a great many people in this country who would like to see the devaluation of the dollar. They would benefit by it.
Some hon. members interjected, suggesting that that was an unworthy statement for the minister to make, and he went on and said:
Yes, they would; I know they would; make no mistake about that. There are advocates of devaluation because, among other things, it would benefit some lines of endeavour that they would be in.
His attitude throughout seems to have been one of being willing to get away from the Liberal party's doctrinaire free trade, and even lo use the horrible word "protection" in respect of the United States manufacturer; but when it comes down to helping Canadian producers, in our present difficult situation to expand the production of goods in this country, to get some advantage of what otherwise must be disadvantages to all of us in Canada he says, No; it is at their own risk. They have private reasons of their own benefit for making these requests. Altogether, Mr. Chairman, not only on the ground of this question of discrimination, of stopping imports from non-dollar countries, but also on the ground of what right the minister has to ignore the interests of Canadian producers

when he carefully protects the interests of United States producers, I think we should hear more from him.
The hon. member for Vancouver South has quoted the passage where the minister said that in this measure we want to set an example to the world. I want to suggest to the minister that his first duty is to the Canadian people and to Canadian business. We are in difficulties which are not of our own creation. We have no duty to set examples which will react against our own people. I want to suggest to him that he is still Minister of Finance in a Canadian government, and that we have not yet the wider form of North American government or world government which he seems to envisage by his statements to the house.


Douglas Charles Abbott: I will just answer that, if I may. We are still on this protection business. I have dealt with this time and time again. The effect of imposing these prohibitions is about the highest form of protection that could be imposed. It protects the domestic producers who are behind the embargo, including the raising of vegetables or anything else. The statement that I made about these taxes and preserving to the legitimate United States exporter the market which he has had in Canada was this. It would offset to some extent the terrifically grave disadvantage under which he was placed in this market by the high protection we were giving to the Canadian domestic producer. Such offsetting protection, if one may call it that, of the United States exporter to Canada, is more than outweighed by the highly protective advantage given to the domestic producer. To say that you are protecting the United States exporter by cutting him down on a quota basis to a fraction of what he had previously and giving the Canadian producer a free and unrestricted market is a distortion of the real truth. There is no question as to the excise tax conferring protection on the United States exporter.


Howard Charles Green: You yourself used the word.


Douglas Charles Abbott: How does a country prosper unless it has export and import trade? If anyone in this house will suggest that we should do anything which would unnecessarily injure the normal flow of trade between our two countries, he has a political philosophy which is completely different from my own. This afternoon a number of hon. members were urging the view that we were foolish in cutting off imports. The hon. member for Swift Current was urging that we should remove some of these prohibitions and should

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let in some of these refrigerators. You cannot have it both ways in these things. To suggest that this policy is one which shows I have just forgotten the exact language my hon. friend used-that I am thinking of world government, international government-[DOT]


Harry Rutherford Jackman: North American.


Douglas Charles Abbott: -North American or something that is other than a Canadian government is, to use a word I have had occasion to use before in this debate, just nonsense.


Charles Cecil Ingersoll Merritt: I wish to follow this up one step further. To my mind, this is not just simply a question of a bill that goes through this house like amendments to the National Housing Act or other important measures. What we are hearing from the minister now is a new statement of Canada's trade policies, and it is important that we should fully understand where this government is leading us by these new ideas which have never before been introduced in this house.


Douglas Charles Abbott: There is nothing new at all.


Charles Cecil Ingersoll Merritt: I would ask the minister this question. According to his own statement, he has taken steps to protect, for the duration of these emergency exchange restrictions, what he calls the legitimate interests of the Canadian manufacturers.


Douglas Charles Abbott: Yes; because we have taken them away in the same bill.


Charles Cecil Ingersoll Merritt: Yes, I quite understand that.


Douglas Charles Abbott: We are trying to let them keep a little of what wre have taken away from them.


Charles Cecil Ingersoll Merritt: I quite understand that he has taken much away in the same bill.


Clarence Decatur Howe: You will never get him to understand.


Douglas Charles Abbott: I suppose not, even though I talked all night.


Charles Cecil Ingersoll Merritt: He has taken much away in the same bill. In these measures he has taken what steps he could to soften the blow upon United States businesses. He himself used the word "protect" in relation to the action he has taken in that respect. By this bill you are taking away from Canadian manufacturers their normal trade as well. You are stopping a lot of them from importing from the United States goods which for a long time they have been accustomed to import. But when it comes to protecting them against what you are doing to them in
this bill the minister says, that is a business risk you must take yourself. He has no help to give in the bill and no advice to offer to Canadians, even as to how long these restrictions will remain in force. We have tried to get from the minister a statement of how long he thinks these restrictions will be in force, because we think it will be useful and will soften the blow upon Canadian businessmen. They can then make up their own minds as to what they are going to do. But the minister tells us that he cannot make any forecast at all. Yet the other night the Minister of Trade and Commerce was in Halifax speaking just when this same point was up before the committee. He had no hesitation at all in giving a forecast. He gave his well-known forecast that the restrictions would last for only a few months, if he was correctly reported in the press. One of these ministers has an idea how long the restrictions will continue, namely, a matter of months, and the Canadian businessman could make up his mind on the basis of that statement. The other minister says that he has no forecast; it may be longer; it may be a very long term. 1 say that one of them, Mr. Chairman-


Douglas Charles Abbott: I did not say so.


Charles Cecil Ingersoll Merritt: -is teasing the Canadian people. "Teasing" is the only word I can think of that correctly describes the situation. Suppose it should happen as the hon. member for York West suggested to this house. Suppose it should happen that these restrictions had to remain in force, not for months, as the Minister of Trade and Commerce says, but for years, as was suggested by the hon. member for York West, who has been right several times over these matters.


Douglas Charles Abbott: He is a great fellow.


Charles Cecil Ingersoll Merritt: Is the situation to be that for all those years the United States businessman who has present connections in Canada is to have his market protected for him?


Douglas Charles Abbott: He will have it restricted.


Charles Cecil Ingersoll Merritt: Is he to have it held open for him during these restrictions, while for all these years the Canadian businessman will not be able to go into any one of these businesses, may not be able to continue in his present business, or may have to change the very basis of his business, not just because of the restrictions, but because the restrictions are on and the minister will not tell him when they are likely to come off?


Agar Rodney Adamson: The restrictions are a secret weapon.

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Charles Cecil Ingersoll Merritt: The minister talks of this measure as a highly protective measure-


Douglas Charles Abbott: Protectionist.


Charles Cecil Ingersoll Merritt: -or a highly protectionist measure. I ask you, Mr. Chairman, and I ask the members of the committee what protection there is for the Canadian businessman and the Canadian people who are in complete and absolute uncertainty as to what the protective measures are. There is no protection at all in such a measure.


Douglas Charles Abbott: There is protection on both sides.


Charles Cecil Ingersoll Merritt: I can only suggest to the minister that he forget for a moment his doctrinaire ideas about free trade-


Douglas Charles Abbott: I will try to.


Charles Cecil Ingersoll Merritt: -or at least the doctrinaire ideas which have been followed by his party ever since confederation.


Mr. McILRAITH:: To the great advantage of Canada.


Stanley Howard Knowles: They have never followed the idea.


Charles Cecil Ingersoll Merritt: I suggest that he realize that this bill is not in any sense a protectionist measure for Canadian businessmen. It is a means by which many Canadian businessmen may be destroyed. It is a means by which many Canadian businessmen have been destroyed.


Mr. CRUICKSHANK:: May I ask the hon.
member a question?


Charles Cecil Ingersoll Merritt: Certainly.


George Alexander Cruickshank: I want to ask the hon. member for Vancouver-Burrard exactly what protection he desires turtles to have.


Charles Cecil Ingersoll Merritt: I do not want to say any
more on this point at this moment, but I do not want to let pass unchallenged the statement of the minister that this is a protectionist measure for Canadian business. It is not. It is a destructive measure. I want to suggest to the minister and the government that, in following this principle of non-discrimination, particularly when, as has been pointed out many times, it is not necessary even under ' the Geneva trade agreements to practise full non-discrimination, he is doing more harm to the Canadian people than that which necessarily had to follow the moment restrictions like these were brought in. When the economy of the country is being placed so thoroughly in the hands of the Minister of Finance and the Minister of Trade and Com-

merce, as is done by this 'bill, the sort of statements made by the Minister of Finance throughout the debate do not give me any assurance of a measure which will be of any assistance at all to the Canadian people. I think he needs a major change in his outlook on these matters if we are to have this measure administered in such a way as to do the Canadian people the least possible harm.


Douglas Charles Abbott: I wonder if the committee is ready for the amendment, Mr. Chairman. I have said I cannot accept it.


Howard Charles Green: Do not hurry; take your medicine.


Douglas Charles Abbott: Oh, gladly; from you and a lot of others.


Thomas Reid: I have been waiting for over fifteen minutes, so that there is no favouritism being shown me now. My purpose in rising is to answer an argument advanced this evening by the hon. member for Vancouver South. I thought he made it plain that one of his main arguments against this measure and in favour of the amendment was that the legislation was directed not only against United States trade but also against trade with Great Britain; and he suggested' that if we on this side voted for the amendment that would free trade as between Canada and Great Britain, and that this measure would then be directed solely against the dollar countries.


Howard Charles Green: I am sure the hon. member does not want to be unfair. I said it covered all the soft currency countries. Great Britain is, of course, the principal country; but it covers also Australia, France, Belgium, Holland and other countries.


Thomas Reid: But you said you could not see a member on this side standing up and voting for the amendment, which drew the retort from one of the ministers-I did not say it-that you were waving the flag in regard to the triangle formed by Canada, the United States and Great Britain.


Howard Charles Green: I did not hear that interruption, or I would have dealt with it.


Thomas Reid: You wanted this bill to deal directly with the United States and not to bring the United Kingdom within the provisions of the schedules. There might be something to that argument if we did not have the schedules before us. I would just ask the committee to look at the bill. There are three schedules. The first is the prohibitory schedule; the second sets out the items which may be imported under quota, and the third covers those coming under permits. So it can be reasonably assumed that under schedules

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II and III certain goods will be allowed to come from Great Britain and the United States, under quotas and permits. But look at schedule I and see what it deals with. You will see that we are prohibiting the importation of such articles as tea, coffee, oysters, turtles, which were mentioned by the hon. member for Fraser Valley; maple syrup, grapes, melons, fruits. Then you get on to tarred paper, sandpaper, roofing shingles. Then you go along to candles, perfumery, licorice. If you look over the schedule you will see that very few of the articles enumerated' in schedule I come from Great Britain. I doubt if the trade between Canada and Great Britain in any of these prohibited: articles would amount to very much. Look at the items. They include planks and boards and plywood; fruits of all kinds; grapes; frozen vegetables, and so on. It seems to me most of these articles come from the United' States, and that Great Britain would not be losing any trade because of these prohibitions.
I rose because the inference I took from the remarks of the hon. member for Vancouver South-and I think it was more than an inference-was that schedule I was directed not only against the United States but also against Great Britain; and the hon. member went on practically to challenge us on this side to vote against the amendment proposed by the C.C.F. I just draw these facts to the attention of hon. members on this side; and I would ask hon. members opposite to tell us how many of the articles listed in schedule I would be brought to Canada from Great Britain.


Donald Methuen Fleming: In his remarks a few
moments ago, following the hon. member for Vancouver South, the Minister of Finance submitted what I thought was the most extraordinary argument in support of this extraordinary measure that one could expect to hear in this house, even coming from the government side. I wish to deal with that argument for just a moment.
The minister was talking about discrimination, harmful discrimination of the kind that will give offence to our cousins south of the border. I should like to ask him, where did this idea of discrimination begin in respect of this program? I say it began right in the government's order in council P.C. 4678; and yonder to your right, Mr. Chairman, are the exponents of government by order in council. Look what they have done here. They drew a distinction in this order between the scheduled and the non-scheduled countries. They themselves drew the line of distinction as between the hard currency countries on the
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one hand and on the other, the countries other than hard currency countries. It is not simply the United States, as the Minister of Finance has said. The others may not bulk so large in our total trade, but the line was drawn on the basis of hard currency.
What the Minister of Finance had to say was this, and to me it was an extraordinary argument. He said, "Now, do not remove from this bill the harm that it will do to our trade with countries outside the hard currency countries." It is not just Britain. It is Britain; it is the commonwealth and France and many other countries in the world, countries with which we want to trade. What does he say? He says, "Do not remove from this bill the harm it will do these other countries, because if you do you will give offence to the United States."


Douglas Charles Abbott: It does not do them any
harm; it helps them.


Donald Methuen Fleming: To confine the application of this bill to hard currency countries will not do the United States one particle of harm. The harm which is done to United States export trade is done in the bill, just as it was done in P.C. 4678; and to confine that harm, that reduction in export trade, to countries in the hard currency area will not hurt the hard currency countries one whit more than they are being hurt right now.
Beyond that, far from increasing the burden this bill is imposing upon imports from the United States and other hard currency countries the sort of proposal we on this side of the house are supporting, which would confine the effect of the measure to the hard currency countries, actually would help the United States. How is the United States to be helped, the position of international trade being what it is today, unless we do all we can to help to revive those countries in the soft currency areas? Will the Minister of Finance say that it will be of some help to the United States, that it will appease feeling in the United States, for us to apply import restrictions against Great Britain, against other commonwealth countries, against France, against Scandinavian countries, against other countries in Europe and in South America?
One of the fundamental lines of United States policy today is to help these countries to rebuild their economies. Yet the minister says we shall offend sentiment in the United States by trying to undo now, in this amendment, the harm that this measure would do to soft currency countries. The minister's argument does not hold water; it contradicts itself.
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The United States is contemplating a European recovery program; a figure of $17 billion to $20 billion is talked about, that the United States is preparing to put into Europe, to rebuild those countries; and Canada at the present time is being asked by the Minister of Finance to impose hardship on those countries when they try to get their goods into the Canadian market.


An hon. MEMBER:: Nonsense.


Donald Methuen Fleming: He is. It is right in the bill; and if you cannot read it there, you cannot read anything. Not only will the kind of proposal we are making on this side of the house, which is to confine the effects of this measure to hard currency countries, do no harm to the United States, but it will actually help the United States.
And in the next place, it will help us.


Douglas Charles Abbott: Would my hon. friend permit a question?


Donald Methuen Fleming: You are trying at the present time to help those countries by giving them credits. We do not know in many cases whether or not we shall be repaid. But, Mr. Chairman, surely it would be the part of common sense to take from those countries at the present time what they are in a position to send to us, struggling as they are to build up their export trade.
What country in the world has a bigger stake in the rebuilding of the export trade of Great Britain, France, the Scandinavian countries and other countries in the soft currency area than has Canada? What country has a greater stake? None. It means a great deal to Canada right now to help those countries in every way possible to increase their export trade. That is the only way, under present conditions, that we are going to help to get ourselves paid.
The kind of treatment the minister is proposing does not simply harm the United States and harm these other countries. It is harming a great many Canadians right here at home. Let me give one or two examples. I am thinking of two young returned soldiers in Toronto who took everything they had in the world, including their re-establishment grants, to establish here an agency for the importation of a certain line of French goods, based upon contacts that those veterans had made when they were fighting in France. What happened? What will happen now? This bill, simply because the Minister of Finance blindly follows the fetish of non-discrimination, will completely ruin the business of those two young veterans. Will any man in his

right senses stand in this House of Commons and1 say that will help the United States?
Mr. Chairman, I could give you dozens of examples of other veterans and other Canadians who have established import businesses in Canada for the purpose of importing goods from Great Britain, from the commonwealth countries and from other countries in Europe- soft currency countries. What is happening to them? They are being ruined. Their businesses are being completely mined by this measure. Why? Will that bring help to the United States? Of course it will not. Will that appease sentiment in the United States? -to ruin the businesses of these Canadian importers, and to reduce imports from these soft currency countries which so badly need to export today?
Well, if that is the kind of sentiment the Minister of Finance imputes to our cousins over the border, then I say to him and to the committee that he insults the intelligence of the people of the United States.
This situation with which we are confronted, which is embodied in the arbitrary and dictatorial measures in this bill, is a situation brought upon this country by a government that was blind and impotent. What they are doing today, now, is not simply to encompass further ruin of the Canadian -people; rather, by making such a stupid fetish of this talk of non-discrimination, they are doing untold damage to our relations with trading nations elsewhere in the world, with which in the future we are bound intimately to be connected, if there is to be any hope of economic revival in the world.
Two wrongs do make a right; and the Minister of Finance does not make this bill one whit more acceptable to the house or to the Canadian people by extending the harm that it does to the soft currency areas, as he is doing to the hard currency areas. The more one hears the government trying to support this measure, the more one is convinced that the whole thing is a priceless example of economic lunacy.


George Alexander Cruickshank: Mr. Chairman, I shall be brief, because it does not require much to meet what has been said by the hon. member. My voice is not good tonight, but the hon. member does not require much answering. He has absolutely proven the need of the bill by the speech he has just made. Long before I came to this parliament I heard about "no truck or trade with the Yankees." I heard about "blasting our way into the markets of the world."

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Donald Methuen Fleming: You are trying to blast your way out of it.


George Alexander Cruickshank: I can talk just as long as you can, and I can wave my arms just as long as you can. After having listened to that speech from one of the heirs-apparent to the leadership of the opposition, I can only say that in this party we have a great deal more difficulty in aspiring to leadership because we are all heirs-apparent. Over there they change their leadership every six months. So my hon. friend may yet have some hope.
The speech he made just now was a wonderful speech for isolationism. I believe I can understand this bill, and particularly item 109 in schedule I, one of the prohibited items: "Nuts of all kinds". We do not need nuts in Canada; we have them here now.


Harry Rutherford Jackman: If they are shelled they are all right.


George Alexander Cruickshank: The day before yesterday I heard the hon. member for Rose-dale read for forty minutes that great thesis from the Toronto stock exchange. Listen just for a little while to the common people of Canada on the other side of the track-which I know you would not understand.
I want to ask my hon. friends from Toronto if they have read item 92-you people, who are going to blast your way into the markets of the world and who are going to have no truck or trade with the Yankees.


Mr. MILLER:: Have you done anything for your voice tonight?


George Alexander Cruickshank: I ask my hon. friend from Manitoba if, after reading tonight's paper-which was not so gratifying to the Toronto stock exchange-the policy of the Minister of Agriculture with respect to wheat has not proven to be the correct one for the people of Canada.


Lawrence Wilton Skey: Are you supporting him for leadership?


Maurice Hartt: The same as the Tories are supporting you.


George Alexander Cruickshank: Much as I appreciate the help from Montreal, I do not need any assistance in handling Toronto.
As I said before, we have gone for twenty 3rears with one leader; we do not change every six months. You are all fighting over there now, including the hon. member for Stanstead, to make sure that you will be in the running. I understand that there are four in the running now.


Park Manross: We are not in the trouble you are about our leader.


George Alexander Cruickshank: You change them every six months.


Park Manross: We have one now.


George Alexander Cruickshank: It is only such measures as the one being brought in now by the Minister of Finance that have enabled British Columbia to dispose of her products. We are paying sixteen cents a quart for milk, and nobody emphasized that price more than the party over there. The hon. member who has just spoken does not say anything about eight cents for a bottle of coca-cola.


Park Manross: No advertising; do not use trade names.


George Alexander Cruickshank: Just let me take care of the berries.


Park Manross: I will take care of the pop; you take care of the berries.


George Alexander Cruickshank: I believe that,
because all you do is to pop up over there.


Park Manross: I will take care of pop and mom too.


Stanley Howard Knowles: Get back to the nuts in the shell.


George Alexander Cruickshank: I presume the hon. member for London knows all about kum-quats. I do not even know what you do with them. I presume they come from Ontario.


Park Manross: How do you spell that?


An hon. MEMBER:: This is not a kindergarten.


Park Manross: What are you doing here?


Joseph-Arthur Bradette: I ask hon. members kindly to remain silent while another hon. member is speaking.


George Alexander Cruickshank: I shall be serious now because I have had fun with hon. members over there. They have been talking all night and have said nothing. We in British Columbia do not believe that, in connection with the disposal of our crops, we can depend upon the Marshall plan. We believe that a friendly government in the United States will be of material assistance to the province, but we believe also that it is only through such legislation as this bill that we can have any hope of disposing of our future crops. We realize the foreign exchange situation and that we as Canadians must do our part. I as the member for Fraser Valley believe that it is our only hope at the present time with the emergency situation we now face.
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Mr. ARGUE:: When the minister was dealing with the amendment a moment ago he stated in no uncertain words that he was opposed to the principle of the amendment which would permit discrimination. As I understood him, he gave as his reason that Canada was greatly dependent upon the United States for such things as oil, structural steel and one other item which he mentioned but which I could not get.


Douglas Charles Abbott: Cotton. There are a dozen or more essential commodities.


Hazen Robert Argue: I am admitting that Canada is dependent upon the United States for a great many commodities.


Douglas Charles Abbott: And they are in short supply in the United States now.


Hazen Robert Argue: I think the minister will agree that under the Geneva trade agreements, the basis of which is non-discrimination, Canada as a signatory is allowed to discriminate under certain conditions until January 1, 1949. I believe that the United States believes in non-discrimination and will live up to the Geneva trade treaties. I should like to know how the United States can discriminate in connection with the export of certain things to Canada, things that are essential to us.
Then I have another question. The minister implied that the United States was giving Canada some special favours. How can Canada be given special favours by the United States if that country is living up to the Geneva trade agreements which say that no exporting country can discriminate? If the United States is giving special favours to Canada, then that would be discrimination against other countries.


Douglas Charles Abbott: That is very easy to answer. The United. States or any other country is free to impose export controls; they have them now in the United States, but they are not enforcing them against Canada. We have export controls on feed grain which we are enforcing against the United States. For certain reasons the United States is not enforcing her export controls against Canada with respect to steel and oil. She is entitled to exercise those controls under the Geneva and other agreements.


Hazen Robert Argue: Would you say that is discriminatory?


Douglas Charles Abbott: It all depends upon how one defines "discriminatory". Under the Geneva agreements, one is not permitted to pay export subsidies, and the United States are not paying export subsidies. However,

one is permitted to exercise export control over commodities in short supply in the country of origin, and that is what the United States are doing today. However, they are not exercising those export controls against this country and never have done so.
There is one other feature I did not touch on in discussing this matter. This is only my personal opinion which may or may not be shared by others, but I feel that, while the European recovery plan is under discussion in congress, which is a far-reaching and generous plan on the part of the United States and which we understand contemplates the use of the United States taxpayers' money to purchase supplies in other countries, it would be most unfortunate if her next door neighbour were to adopt a discriminatory policy against her.


Mr. IRVINE:: It is warmer in the chamber this evening than it was yesterday afternoon, and there is a little more humour. Both of these conditions appear to be welcomed on all sides because they help to break the monotony. I am glad to feel so much heat and see so much interest and hear so much humour. During the debate tonight on the amendment, I think some of those who have defended the amendment and some who have opposed it have gone farther than the case warrants.
I wish to say a word in favour of the amendment, but I want to say also that I am not a preferentialist. I think there are some good principles embodied in the Geneva treaties which were signed by twenty-one nations. There are in those treaties certain general principles with which I think this committee agrees. We believe in multilateral agreements. The more multilateral they can be, the better. But there are realistic positions that have to be taken into consideration. The agreement itself and those who drafted the agreement recognize that a country like Canada might find itself in a position where it had to protect its currency, and so provision was made for that very purpose so that until a certain date in 1949 we could take advantage of the discriminatory clause.
All that we are saying in this amendment is that we want to take advantage of that discriminatory clause which was put into the Geneva agreement, and thus we are not violating its principle. We are simply taking care of our own people and protecting our own interests in the best way we possibly can.
As has been pointed out, I think very ably by the hon. member for Eglinton, such a policy need not and, I believe, would not

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affect our relationship with the United States one little bit. If it did, it would not be to the credit of the United States. Most decidedly if their dollar was in jeopardy or their exchange was in the position of ours they would not hesitate for one moment-and I do not blame them-to take advantage of the discriminatory clause. We are merely asking that, because we are banning certain goods from the United States under certain conditions, we shall not ban those goods from Britain or from the dominions or from any other country that might want to supply us with them. By so doing, we would make it possible for the people of Canada to secure from Britain and the dominions the goods we have found it necessary to ban from the United States. In the second place, we would improve our exchange position with the United States, and ultimately perhaps would have more to expend in the United States and might shorten the period for which this legislation is necessary, assuming that the government's predictions are correct that it will be only a temporary measure. But may I say that I doubt its temporary character.
I am one of those who believe that, whether we iike it or not-and we are not blaming the government for this-the world situation is such that there may be a reorientation of the whole business of international relationships and international trade, and what we think today may be only for a brief duration of a month or two may be merely the beginning of a long period of very much different relationships among the nations of the world in matters of trade.
And so, having in view, in the first place, the needs of our own people in respect of goods, and having regard, in the second place, to the actual financial problem with which this nation is confronted, I and those on this side who support the amendment cannot see what harm could come to our relationship with the United States by adopting the amendment. But we can see that great good can come to this country and to other countries in Europe which might be glad to make exchanges with us. So I urge the government to accept the amendment, and if they will not accept it I hope we shall be able to carry it anyway, and thus materially improve the legislation which the government is proposing.


Mr. FULTON:: Mr. Chairman, dealing with the amendment on its merits, I should like to reply to the arguments advanced against it by the Minister of Finance and the hon. member for New Westminster.
In opposing the amendment, the Minister of Finance based his argument almost
entirely on the premise that to adopt it could be interpreted only as being directly discriminatory against the United States. That, to my mind, is losing sight of the main purpose of this legislation, which is that Canada is suffering from a shortage of United States dollars-that is not our fault-and in taking steps to relieve that shortage is not discriminating against the United States, but in essence is trying to protect our own position.
But what it seems to me is discriminatory and directly discriminatory, is to go on from there and say that, because we have to take measures to restrict our imports from the United States, we shall also apply those measures to the other countries of the world. That is discrimination against the other countries of the world, whereas the original measure, which apparently was acceptable to the United States, is not discriminating against them, because in essence it is something that was simply forced upon us to protect our own position. If, then, the United States are willing to accept the fact that we have to impose an embargo on trade with them it seems to me that they will not ask that we do the same thing which would hurt our trade with the rest of the world in the same way that we hurt our trade with them. If, as the minister says, they are good neighbours and realize our difficulties and have accepted the fact that we are reluctantly compelled to do this, they would not say: Then you must do the same thing to the rest of the world that you are doing to us. That, I am certain, is not the position which the United States would take, as the minister suggested to justify the stand which the government has adopted as a result of its doctrinaire belief in the policy of non-discrimination. It cannot be interpreted in any other way.
The hon. member for New Westminster advanced, I think, a more cogent reason against accepting the amendment if his argument had been correct, but it was not correct. He dealt with the suggestion of the hon. member for Vancouver South that the embargoes contained in the bill are damaging to our trade with the United Kingdom. The hon. member for New Westminster said: Let us look at schedule I; and the hon. member for Fraser Valley did the same thing. They picked out a few items such as turtles and nuts in the shell and out of the shell, and so on. Of course it is a very easy thing to pick out three or four items from a schedule of eight pages and say: These articles do not come in here from the United Kingdom and therefore this bill will not hurt our trade with
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the United Kingdom. But if you will look at schedule I a little more carefully and com-ipare its items with the goods which the United Kingdom is prepared to supply, it is .obvious that this bill would damage our trade with the United Kingdom and the British commonwealth extensively. I should like to name just a few articles.
On December 11 the British government published a list of articles which it was prepared. to supply in quantity to Canada in 1948. They include lighting fixtures, office furniture, domestic laundry machines, refrigerators, movie projectors, electric clocks, camera and photographic accessories, domestic electric appliances-all substantial articles covering a wide variety of trade. These are the articles which the United Kingdom is prepared to supply to Canada in quantity in 1948.
Schedule I contains a list of goods the importation of which is prohibited, and at the bottom of page 9 you will find this item: kitchen or household hollow-ware. There is a category of kitchen articles. On page 10 of the bill appears "refrigerators, domestic or store, completely equipped or not; motion picture projectors for use with films; lamp shades and shade holders; electric light fixtures or parts." Then two-thirds down the page a whole category of electric appliances, domestic electric appliances such as are covered1 in the list that the United. Kingdom is prepared to supply. On page 11 of the bill, still in schedule I, item 519 is as follows, "house, office, cabinet or store furniture of wood, iron or other material", and so on. These are not items of trade lightly to be dismissed as the hon. member for New Westminster and the hon. member for Eraser Valley tried to dismiss them. They are substantial items of trade. They are not like nuts or turtles or anything else one wishes to name. They are items of importance to the United Kingdom, which is striving so earnestly to increase her exports to us, and which we should be encouraging to increase its exports so that we might enable it to pay us in dollars for what we must sell to it.
This situation is one which has been forced on us by circumstances; and if, as the minister says, the United States is willing to recognize our position, and not to hold it against us then-and I repeat the argument put forward by the hon. member for Vancouver-Burrard- the minister's first duty is to the people of Canada. His first duty is to minimize-


Douglas Charles Abbott: That is what I am trying to do in proposing a non-diseriminatory bill.


Edmund Davie Fulton: That is exactly what the minister is not doing in proposing a non-

discriminatory bill. He calls it a nondiscriminatory bill, but that does not make it so. Actually it is a discriminatory bill, unnecessarily discriminating against the commonwealth countries, France, Belgium, The Netherlands, Luxembourg, the Scandinavian countries, and all the other countries in the soft currency areas which need not be included in this bill. It is discriminatory against them, and to that extent it is unnecessarily injurious to the Canadian people and the Canadian economy. If the minister and hon. members opposite would see the matter in that light, which is a logical approach to the question, and if, as he says, and as we believe, the United States is realistic about the matter, then it could easily be seen that the amendment .proposed by the hon. member for Kindersley is acceptable. It is simply making what is otherwise an unnecessarily cumbersome and harsh piece of legislation into a good, workable and realistic piece of legislation.


Douglas Charles Abbott: Would it be possible to put the amendment tonight?


Howard Charles Green: No.


William Alexander McMaster: Sitting on this side of the house, I cannot speak for the policy of my party. I can follow the policy of the party when we come to one. So far as I know, the policy of this party has never been to uphold this amendment. I believe it would be a mistake if this amendment were to carry. It seems to me that there is no particular reason why it should carry. This is a bad bill. I spoke about it when it was up for second reading, and this amendment will not make a bad bill any better; I think it will make it far worse. The effect of this amendment will be to do something that will be injurious to us as a country. I can only wish that the debate which has taken place in the last two hours had not taken place at all.
Somebody spoke about what happened in 1930. The year 1930 is not a long time ago so far as I am concerned; it is comparatively recent history, but a great many things have happened during that time. So far as I am concerned, I will oppose the amendment.


Some hon. MEMBERS:: Question.


Thomas John Bentley: No, Mr. Chairman. I do not see any reason why this vote should go through tonight.


Douglas Charles Abbott: We are just on the amendment. We are not asking that the section be passed tonight. Why cannot we vote on the amendment tonight?

Foreign Exchange Conservation


Thomas John Bentley: Because we hope some day the minister will give up his self-opinion and bow to the will of the majority of the people of this country.


Douglas Charles Abbott: This will not be one of the cases.
Mr. ST. LAURENT: Let us find out where the majority is in the committee.


Thomas John Bentley: There have been a lot of interjections from the other side of the house. Some of them have been quite unfair. The Minister of Trade and Commerce deliberately refused to give some information to the hon. member for Winnipeg North Centre. He then threw across the house the statement that he was just flag waving again. Is there anything wrong with flag waving in this connection? If a flag is thf symbol of nationhood, and if we have any pride in our nation, is it not better to stand on our feet than to go down on our knees to somebody?
I 'do not know whether the United States want this or not, since some people say they do not and others say they do. But from appearances, this is influenced by the United States. I think the minister is heavily influenced by them in this matter, and to me it can be reduced just as simply as this. An individual owes money to his storekeeper. He has not been able to pay his bill because of some circumstances in his business that cut down his earning power. He goes to the storekeeper and says, "I owe you more money than I can pay for some time; therefore I will have to cut down on my purchases from you." The storekeeper would simply say, "Certainly you will have to do that", and it would be an amicable agreement. But if the individual who owed the storekeeper money was associated with some other person who owed him money and had some goods that the debtor of the other storekeeper could use, and the merchant to whom the individual owed money were to say, "If you do not buy from me you cannot take anything in payment from another person," I would say that that would be an unfriendly act on the part of the merchant who was the creditor of the original person of whom I spoke. Mr. Chairman, would you call eleven o'clock.


Joseph-Arthur Bradette: I am in the hands of the committee.


Some hon. MEMBERS:: Eleven o'clock.


Douglas Charles Abbott: Has my hon. friend much to say on that?


Thomas John Bentley: I do not know.


Douglas Charles Abbott: The hon. member is not ready to vote on the amendment?


Thomas John Bentley: No.
Progress reported.



BUSINESS OF THE HOUSE

[Stage Direction]
Mr. ST. LAURENT: As the Prime Minister announced, and as was agreed to, apparently by all hon. members, tomorrow we shall revert to the debate on the address.
Howard Charles Green: May I ask the Secretary of State for External Affairs or the Minister of Veterans Affairs when the motion to set up a special committee on veterans affairs will be moved? Will it be tomorrow?
Mr. ST. LAURENT: No, that will not be tomorrow. The arrangement that was made was that we would revert to the debate on the address tomorrow, and we cannot do more than one thing at a time.


Howard Charles Green: I know that. May we have any idea when that motion will be put to tin house?
Mr. ST. LAURENT: If the house were prepared to have the motion adopted as a routine motion without any debate it could be put at once; but the information we have is that some hon. members desire a debate, and a debate which may be quite protracted. We shall have to consider when time can be made available for that debate.


Howard Charles Green: The minister cannot say tonight?
Mr. ST. LAURENT: No, I cannot say tonight when there will be an opportunity for that debate, because there was some hope that the debate on the address in reply to the speech from the throne would be concluded next week and that we could then take up something else. I can assure the hon. member that the motion to set up that committee is one which is looked upon as having a high degree of priority in the business to be dealt with.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Friday, February 13, 1948