1956-01-27

Hon. Stuart S. Garson (for the Minister of National Revenue) moved: for leave to introduce Bill No. 8, to implement an agreement between Canada and the Kingdom of Denmark with respect to income tax.
Motion agreed to and bill read the first time.



INCOME TAX ACT


Mr. Stanley Knowles (Winnipeg North Centre) moved: for leave to introduce Bill No. 9, to amend the Income Tax Act (communication of information).
Seme hon. Members: Explain.


Stanley Howard Knowles: Mr. Speaker, the purpose of this bill is to lift the iron curtain of secrecy with respect to corporation income tax returns.
Motion agreed to and bill read the first time.



AMENDMENT TO PROVIDE FOR HEARING OF CORPORATION APPEALS IN PUBLIC

['The matter is now before the Speakers of the two houses.']
Stanley Howard Knowles: for leave to introduce Bill No. 10, to amend the Income Tax Act (corporation appeals).


Some hon. Members:: Explain.


Stanley Howard Knowles: Mr. Speaker, the purpose of this bill is to provide that appeals by corporations before the income tax appeal board be heard in public.
Motion agreed to and bill read the first time.



[Stage Direction]
On the orders of the day:
Hon. George A. Drew (Leader of the Opposition):: Mr. Speaker, I should like to direct a question to the Prime Minister. In
view of the fact that it has been announced that there will be a debate on external affairs starting on Tuesday next, could the Prime Minister arrange to have the order in council of July 7, 1955, tabled? This order in council was referred to by the Minister of Trade and Commerce (Mr. Howe) in his remarks a few days ago.


Right Hon. L. S. St. Laurent (Prime Minister):: I shall see just what the order in council is and endeavour to have it available before the debate on external affairs.


George Alexander Drew: So there may be no uncertainty, I would explain that the order in council is the one which the Minister of Trade and Commerce said referred to permission to export 15 Harvard trainers to Egypt.


Mr. Donald M. Fleming (Eglinton):: Mr. Speaker, I wonder if the Prime Minister would enlarge upon the assurance he has just given the Leader of the Opposition and table in the house all orders in council which have been made with respect to permission to ship arms and war materials abroad, say within the last year.


Louis Stephen St-Laurent: That would have to be considered in the light of our obligations toward the countries with respect to which such orders were made and their security claims, as against the disclosure of the character of such commodities as might be obtained for military purposes from Canadian sources.
I shall consider the hon. gentleman's request. We would have no objections of our own and in so far as we can comply with the request, without departing from the ordinary amenities between governments, I shall endeavour to see that that is done.


Donald Methuen Fleming: If the Prime Minister should find himself in a position where he does not wish to disclose the specific provisions of the orders approved, would he still be in a position to disclose the dates of the orders in council and the countries concerned?


Mr.   SI Laurenl@Quebec East: I shall take note of the hon. gentleman's representations and endeavour to remain in a position where it would not be possible for anyone to say we are trying to withhold information that it would be proper to communicate.
eoo	HOUSE OF COMMONS
Inquiries of the Ministry


[Stage Direction]
On the orders of the day:
Mr. A. M. Nicholson (Mackenzie):: Mr. Speaker, I should like to direct a question to the Secretary of State for External Affairs. Could the minister indicate whether any progress is being made with a view to exchanging parliamentary visitors between Canada and the U.S.S.R., as has been done between several western European countries and Russia?


Hon. L. B. Pearson (Secretary of State for External Affairs):: The matter is now before the Speakers of the two houses.



FARMERS' CREDITORS ARRANGEMENTS


[Stage Direction]
On the orders of the day:
Mr. M. J. Coldwell (Roseiown-Biggar):: should like to ask the Minister of Justice if the government has given consideration to amending the Farmers' Creditors Arrangement Act to make it apply to all debts of farmers whenever incurred and to give effect to it at once, to prevent the repossession of farm implements during the current year. The minister will understand the background of this; that is why I preceded it with no explanation.


Stuart Sinclair Garson: I wish to thank the hon. member for having given me notice of his question. This has to do with government policy which will be announced in due course.



THE BUDGET


[Stage Direction]
On the orders of the day:
Mr. J. M. Macdonnell (Greenwood):: should like to direct a question to the Minister of Finance. Now that the estimates are down, can the minister give us an indication, even a general indication, as to when he expects to bring down his budget, whether it will be early or late or normal, if there is a norm?


Hon. W. E. Harris (Minister of Finance):: Mr. Speaker, I would be curious to know what my hon. friend means by normal. If he means some time between now and May 1 I would agree with him.



REPORTED SALE BY U.S.S.R. TO UNITED KINGDOM

[Stage Direction]
On the orders of the day:
Mr. L. E. Cardiff (Huron):: Mr. Speaker, I should like to address a question to the Minister of Trade and Commerce. Has the minister been informed that the U.S.S.R. has sold between 25,000 and 30,000 tons of wheat to British millers within the last few months and, if so, why was Canada unable to secure this business?


Right Hon. C. D. Howe (Minister of Trade and Commerce):: Mr. Speaker, I have not been informed that the U.S.S.R. has sold wheat to Britain, but I am not surprised. They often sell wheat to Britain. Our share of the British market probably will be higher this year than in previous years. We never believe that we are privileged to sell all the wheat that Britain uses. They may prefer to buy other wheat from time to time.



CANADA-UNITED STATES-INQUIRY RESPECTING MEETING OF JOINT ECONOMIC COMMITTEE

[Stage Direction]
On the orders of the day:
Mr. Erhari Regier (Burnaby-Coquitlam):: Mr. Speaker, I should like to direct a question to the Minister of Trade and Commerce. In view of the proposed trip to Washington of the Canadian Exporters' Association to have an interview with President Eisenhower on the subject of the $750 million annual trading deficit, is the government planning on asking for an immediate meeting of the joint Canada-United States economic committee to discuss the problems?


Clarence Decatur Howe: Mr. Speaker, the Canadian Exporters' Association is a private enterprise, and what it does is not the concern of the government. With regard to our trade with the United States, we are not unhappy about it. It is at a very high level. I know of no reason to call a meeting of the joint committee on account of anything that is taking place in that direction.



ROYAL CANADIAN MOUNTED POLICE


[Stage Direction]
On the orders of the day:
Mr. E. D. Fulton (Kamloops):: Mr. Speaker, may I ask the Minister of Justice if he would make a statement informing the house of the exact situation with respect to two members of the Royal Canadian Mounted Police who

were recently dismissed in British Columbia for having, according to press reports, beaten a prisoner and obtained a confession from him by that method. Would the minister particularly say what was the full extent of the disciplinary action taken? If the minister is not in a position to do so now, perhaps he would be kind enough to take this as notice and make a statement at an early date.


Stuart Sinclair Garson: Mr. Speaker, I shall be glad to take my hon. friend's question as notice.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Hon. R. O. Campney (Minister of National Defence):: On January 18 the hon. member for Calgary North (Mr. Harkness) asked if there had been a change in policy with regard to the number of days' training for which members of the militia are paid.
There has been no change in policy in this matter.
The authorization from headquarters provides for all ranks a maximum of 60 days' pay for training. This authorization covers not only training at local headquarters but also training at summer camps, special training and administrative duties connected with training. Allocation of time and of pay among the various categories above-mentioned, up to the prescribed 60 days, is left to the discretion of officers commanding the commands.
I have been informed that the order issued by western command to which the hon. member referred in his question did not, in fact, reduce the number of training days for reserve army personnel in that command but rather broke down the 45 days' normal local training into 30 days' armoury training and 15 days' week-end training. The total number of training days, therefore, remains the same.



HEALTH INSURANCE


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Minister of National Health and Welfare? May I ask him if there is a more detailed statement, the general terms of which the Prime Minister gave us yesterday, of the offer made by the federal government to the provinces in connection with a health
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insurance program? If so, could that more detailed statement be given to the house in some way?


Hon. Paul Martin (Minister of National Health and Welfare):: Mr. Speaker, my colleague, the Minister of Finance and leader of the house, tells me that in a few days or so an opportunity will be given when it is proposed to consider certain aspects of the estimates of the Department of National Health and Welfare. I do not think the house would consider that I would be justified on the orders of the day in taking the time required to make as adequate and as complete a report as the situation and the importance of the subject matter warrant. I think my hon. friend will appreciate that this is so.
The conference which concluded last night was a most constructive and helpful one. Without exception, all governments participating in that conference are deserving of credit and, I am sure, the expression of thanks of this house and the people of Canada for the way in which they approached our deliberations on this important matter. The provincial officials have gone home and are now considering the proposal put forward by the federal government in the matter of health insurance.



PROVISION FOR GUARANTEE OF BANK LOANS TO PRODUCERS IN PRAIRIE PROVINCES, ETC.

Clarence Decatur Howe: that the house go into committee to consider the following resolution:
That It is expedient to introduce a measure to provide, by way of a guarantee for bank loans made on or after the 15th day of November, 1955, and before the 1st day of June, 1956, for short-term credit to grain producers in the prairie provinces to meet temporary financial difficulties arising from inability to deliver their grain; to provide also that the governor in council may extend the application of the act to cover loans made before the 1st day of June, 1957; and to provide further that any amount paid to a bank under the act be paid out of the consolidated revenue fund.
Motion agreed to and the house went into committee, Mr. Applewhaite in the chair.


George Alexander Drew: Is there going to be an explanation of the resolution before we proceed with the discussion?


Clarence Decatur Howe: Yes, Mr. Chairman.
The purpose of this bill is to provide a partial guarantee of loans made by the chartered banks to producers against grain on farms, and to reinforce the security that would ordinarily be available under the Bank Act.

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costs would be paid either by the borrower directly when he obtained an advance, or indirectly as a deduction from his participation payment if the interest and administration costs were to be absorbed by the wheat board.
Advances by the wheat board mean that the board would use money realized from the sale of grain delivered by all producers to lend to certain producers. Inevitably there would be costs and losses. Costs which were not paid by the borrower and losses would be deducted from the proceeds of the sale of grain, and would ultimately come out of the pockets of those producers who either had not obtained advances or had repaid them. I do not believe that this should be done and I challenge any member from the wheat-growing areas of the prairies to defend such a proposal.


Mr. Argue:: We will debate that matter this morning.


Clarence Decatur Howe: Good; I love to debate with my hon. friend.
Our conclusion, therefore, was that the wheat board was not as well equipped as the banks to make loans, the costs to the borrower would not be less if the board made the loans, such lending would be a misuse of board funds, and the board itself would be permanently damaged if it were turned into a lending and collection agency.
If the wheat board, on the other hand, is not to use producers' money for the making of advances, then I see no argument at all why the board should get involved in the business. The banks have the resources and the lending experience, and they have the legal and constitutional right to take adequate security, which the wheat board does not have.
Some proposals have been made that the board should make interest-free advances. For the board to make interest-free advances and absorb the cost and the losses as a charge against producers' participation certificates would, as I have already said, be a gross misuse of board funds. For the board to advance moneys on behalf of the treasury and bear none of the costs or the losses is a different proposition. This means that the treasury would be asked to make loans without interest to all western producers against farm-stored grain whether or not they needed the advance. No other producer in Canada obtains such interest-free advances. Moreover, I do not think the taxpayer should be asked to make interest-free advances to producers which they could invest immediately, for example, in government bonds and earn a return of 3 per cent or so.

I shall not say much at this stage about the provisions of the bill itself. The limit on loans is $1,500 to an individual borrower, which is $500 more than in 1951. The interest rate is 5 per cent, down J per cent from 1951. This rate was negotiated between the banks and the Department of Finance. It is the same as under the Farm Improvement Loans Act.
The bank guarantee is a smaller proportion of total loans than in 1951, partly because of the limited loss experience under the previous legislation and partly because these loans are secured by farm stored grain, rather than standing crops. The guarantee will apply to loans made under the conditions laid down in the bill since November 15, 1955. The over-all limit on guaranteed loans is raised from $20 million to $50 million.
Security must be taken under section 88 of the Bank Act, and the bill provides that such security takes priority over other liens. The borrower is also required to assign one-half of the proceeds of future deliveries of grain to repayment of the loan. In the 1951 legislation the assignment covered the proceeds of all deliveries until full repayment.
In the event that elevator congestion prevails at the opening of next crop year, which is quite likely because of the big crop harvested in 1955, the bill provides that the guarantee can be extended to loans made under the same conditions between October 1, 1956 and June 1, 1957.
As hon. members are aware, the order paper contains notice of another bill by which it is proposed to relieve the wheat board of the cost of carrying excessive stocks of wheat accumulated as a result of nature's bounty during these past years. These two proposals, if accepted, will enable the board to follow an aggressive yet orderly marketing policy without fear that carrying charges will eat up the producers' equity in existing wheat board stocks, and will enable those producers who are short of cash to obtain temporary advances pending normal deliveries within the crop year.
They do not in any way alter the fundamental grain marketing policy of the government, which is to sell as much grain as possible at the best possible prices. That policy has been a remarkable success. It has moved enormous quantities of grain at reasonably good prices. In this period of temporary surpluses it has given a degree of stability to world markets that might otherwise have collapsed, as they did in the 1930's.
There are heavy stocks of wheat in Canada for one and only one reason-good rainfall on the prairies for several years. There has been no increase in acreage. There have been

no subsidies. Sales have been good, more than enough to clear out average crops. They continue to be good.
In the rest of the world stocks are also heavy, but for different reasons. In nearly all other parts of the world wheat production has been stimulated by price supports or by protective measures of one kind or another. We should all recognize, however, that the United States, which increased its acreage so sharply a few years ago, is now taking measures to bring its acreage back to more normal levels.
In these circumstances of heavy stocks throughout the world, the government and the wheat board face a difficult task in marketing Canadian wheat to best advantage. You will expect me to say that we are doing a good job. But I suggest to hon. members on the other side of the house that before they criticize the government's wheat policy, they take a good look at the facts, and consider the effect of their remarks upon the position of the Canadian wheat board as a marketing agency.
The great danger in the present situation is that sellers may be panicked into dumping stocks on to world markets that cannot absorb them. This is what happened in the early 1930's. It is in no one's interest to see this happen again.
In due course, if sensible policies are followed and uneconomic supports and barriers are removed, present excessive stocks will be absorbed. In the meantime it is encumbent upon all of us to have steady nerves and cool heads.
It seems to me that there should not be a prolonged debate on this legislation. The provisions of the bill have been in effect since November 15. We may as well face the fact that wheat board selling is no longer a dominant factor in the movement of this crop; the amount of grain that will be exported depends upon the ability of our railroads and our seaports to deliver that grain to ships.
The board has succeeded in its selling efforts in spite of the advice of opposition members. It has not reduced the price, as almost every Conservative newspaper in the country has demanded it should; it has not bartered its wheat for old bottles or anything of that sort; it has not exchanged its wheat for foreign currencies; it has not given wheat away. It has consistently followed wheat board policy which has been successful for many years and which has been successful recently; that is, to exchange Canadian wheat for Canadian dollars.
Therefore I think it should be no particular part of this debate to belabour the wheat board. The wheat board has done its job.
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True, it had to wait until opposition members expounded their theories in the fall, since foreign buyers were afraid the board would believe some of the opposition members. Well, we did not; we just waited until normal trading conditions would return. We are now back in the wheat business, and this bill is needed to meet an immediate situation. I hope this bill will receive your favourable consideration.


George Alexander Drew: Mr. Chairman, the right hon. Minister of Trade and Commerce has carried forward the unfinished part of the speech he was making a week ago Wednesday night to the Liberal meeting here in Ottawa. Having admonished the members of his own party that they must all follow the party line, we are now being admonished that we must follow the line of the Minister of Trade and Commerce or fearful consequences will result in the markets of the world. With his customary disregard for any basis for what he says, the minister followed his carefully read typewritten statement with closing remarks in the rather freewheeling style for which he is better known when he speaks without a text prepared in his department.
In those closing remarks there was concern and warning as to the danger that was inherent in the members of the opposition discussing this vitally important subject.


Clarence Decatur Howe: You will pay no attention to my warning.


Mr. Rowe:: I would not expect that he would.


George Alexander Drew: I can assure the right hon. Minister of Trade and Commerce that in so far as those closing remarks are concerned, I certainly shall pay no attention to them. But I would point out that he has completely ignored the people who have been speaking very loudly and vigorously on this subject, that is the farmers themselves. They have been waiting to hear some constructive proposals from this government.
Certainly optimism is a good thing; certainly it is wise for people to have faith in their ability to tackle problems, but it is also wise to have some regard for statistics issued by the very department for which the minister is responsible. When the minister gives us the bland assurance that all is well, that hardly agrees with the statement issued only the day before yesterdaj by the dominion bureau of statistics. These are the exact words of that statement:
Marketings from prairie farms during the weei ending July 11 were approximately half at 4,770,00( bushels versus 8,656,000 bushels.

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That is not a statement by members of the opposition; that is not a statement by those whom the minister seeks to chastise for any attempt to place these facts before the public. That is a statement by a bureau which was set up by the minister's own department to give the public the facts.
When we are told about sales for export and the fact that all is well, that the only concern now is in regard to the ability of the railway companies to deal with this problem, again we have the statement of the bureau of statistics which shows that for the last four weeks there has been a substantial reduction in export clearances. That statement of the dominion bureau of statistics-shows that for the past four weeks up to and including the day before yesterday, when the statement was issued, export clearances have been issued for 10,863,000 bushels as against 12,561,000 bushels for the corresponding period last year, a drop of 1,698,000 bushels.


William Earl Rowe: How many weeks?


George Alexander Drew: That is for the four-week period. There was actually an improvement in the last of those four weeks, but the total for the four-week period shows a substantial reduction in export clearances, and certainly there is nothing to justify the optimistic statement that only the ability of the railways to handle the wheat can cause any concern about this situation.
Then we had the peculiarly reminiscent statement by the right hon. Minister of Trade and Commerce that they had to wait until the members of the opposition expounded their theories last fall before this subject actually came forward for consideration. We were told also that this was likely to cause alarm, that this was likely to cause panic, that this was likely to disturb possible purchasers of our wheat. It is not within the rules of this house that I should use appropriate terms to describe a statement such is that made by the Minister of Trade and Commerce in this respect.
After all, this subject has been under dis-:ussion before. It has been pointed out in his house on a number of occasions that 'or several years the request has been made hat legislation be placed on the statute cooks so that when the situation required it, :ash advances could be made in respect of arm-stored grain. This is not something lew. I pointed out in the debate on the ipeech from the throne only two weeks ago hat in December, 1952, I had urged that we lave legislation on the statute books to deal vith cash payments in respect of farm-tored grain where that became necessary. 
This is not something new; this is not something which has emerged during the last few months. It is something, however, which has emerged in an acute form, not because of anything said by the opposition, not because of the bountiful crop alone, as the Minister of Trade and Commerce implies, but because wheat is piled on the farms of western Canada in unprecedented quantities and the farmers do not know where to get money for their immediate needs.
We come to the statement by the Minister of Trade and Commerce that the government looked into the various methods which might be employed, and having decided that this must be dealt with by way of loan, it then decided that it should be done through the banks. The Minister of Trade and Commerce said this is not something that would be appropriate for the wheat board. I would point out that we have emphasized since long before this house sat, and have emphasized on every possible occasion since this became an acute problem, that we believed there were special circumstances to support the proposition that the only effective way in which this situation could be met would be to make cash advances through the wheat board on farm-stored grain in relation to an established quota, as has been done in regard to grain delivered in the past; and that this payment should be made in the ordinary way on the basis of the initial price fixed by the board, as an ordinary cash advance, as though the grain to that amount had already become the property of the board.
That would avoid any question about loans by the banks, the involved procedure which has been set up and the difficulties encountered by many farmers in actually even making arrangements to attend at the bank for this purpose.
The question is not one as between loans by the banks and loans by the wheat board. The question is between cash advances on farm-stored grain and a method of loan which does not satisfactorily meet the situation. That is the real issue. That has been the clear issue at all times; it is the issue now, and it is the issue which I would hope the government would still consider in its proper light.
The Minister of Trade and Commerce has made a peculiarly interesting observation which I hope will not be overlooked in its implications. In explaining why he did not think the wheat board should be put in the position of being responsible for dealing with this problem, he said, and I believe I quote his words with accuracy, "I do not think that it"-that is, the wheat board-"would welcome producers shopping around amongst them for advances."

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Clarence Decatur Howe: My hon. friend is mistaken. That statement did not refer to the wheat board. It referred to the grain elevator operators.


George Alexander Drew: If that is the case the Minister of Trade and Commerce is simply saying that if the wheat board, through its agencies, were to make arrangements of this kind, the agencies, which the minister has now defined as the wheat elevator operators, would not welcome producers shopping around among them for advances. What does he mean by that? Either there would be a clear basis for advances or there would not. Is the minister implying that this would involve some improper procedure?


Clarence Decatur Howe: You just do not understand the country elevator business.


George Alexander Drew: One thing that is perfectly certain is that the Minister of Trade and Commerce does not understand the problem he is dealing with, to judge from what he has said here this morning. He has directed all his remarks with a paternal sense of pain for the ignorance of the members of the opposition, without any regard to the fact that what has been asked and what we are asking is what the farmers of western Canada have been asking vigorously and in no uncertain terms for some considerable time.
When the Minister of Trade and Commerce warns us of the dire consequences that might come from the discussion of this subject in this house, does he suggest for one moment that the people he thinks might become alarmed do not read our newspapers and do not read the statements made by our farmers? Or when he singles out what he describes as the Conservative press, I wonder if he now includes in that expression the Winnipeg Free Press, which has given no uncertain expression to its demands that some alternative method be employed. Certainly the Winnipeg Free Press is not hesitant in criticizing the government's handling of its wheat policy. Certainly the Winnipeg Free Press has not been reluctant to point out that there is a crisis. I would point out also that there are other newspapers in western Canada which have been equally vocal and equally vigorous and which, with the optimistic approach to the general subject which the Minister of Trade and Commerce has injected into his remarks, I would not previously have described as Conservative newspapers.
No; this subject is one that has been placed before the people of this country and before any possible purchasers of our wheat by the farmers themselves, by their representative organizations and by the general discussions which have taken place. As a matter of fact
the Minister of Justice (Mr. Garson) is quite aware that he did not have to wait until he came into the House of Commons to learn that there are certain strong views expressed on this subject. I feel sure that is true also of other hon. members. The Minister of Justice has indicated that he welcomed the frank discussion of this subject and the way it came forward. We all have occasions when discussions of a similarly frank nature take place, but most certainly the Minister of Justice is under no illusion that this is the only place where this subject has been brought forward for consideration, and where the Minister of Trade and Commerce and the operations of the government in this matter have been subjected to some substantial measure of criticism.
The figures from the dominion bureau of statistics, to which I have just referred, show that during the past four weeks farm sales are down and export clearances are down. As I quite clearly stated, one out of those four weeks, the last one, did show an improvement; nevertheless the total for the four weeks is down. There is certainly nothing in those statistics issued by the bureau, which is in the department of the Minister of Trade and Commerce, that justifies in any way the broad and optimistic statements he has made.
There are other reasons why this problem should be discussed and should be tackled. This loan system is not one which the Minister of Trade and Commerce expects to be employed to any considerable extent. Once again, having regard to the context of his remarks, may I point out that he implies that the government was considering some arrangements to meet the situation which responsible newspapers in western Canada described as a crisis, and which farm organizations have definitely asked everyone in Canada to recognize as a crisis.
If that is so, then let us consider the attitude of the responsible minister, as stated in his own words. In Calgary on November 28, in referring to this loan plan, the Minister of Trade and Commerce used these words:
It is my hope and belief that comparatively little use will be made of the lending facilities, that most farmers are either in a position to carry on without borrowing or are in a position to finance in the ordinary way.
Those words are clear. The Minister of Trade and Commerce simply does not regard this as legislation designed to meet any real emergency. He is looking on it as something that will not be used extensively. The farmers of western Canada have made it clear through statements they have made within their organizations and individually that they

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do regard it as a crisis and that they do regard some solution of the problem as urgent and immediate. For that reason the proposal before us is not adequate.
I wish to make it clear at this point, Mr. Chairman, that we will not vote against the resolution. Inadequate though it may be, unsatisfactory though it may be, with interest rates on the basis they are to be charged under this plan, we are not going to seek to deny whatever relief may be afforded by this method. We believe it is appropriate, however, to point out that this does not meet the situation. We do point out the situation to the government once again, and we urge them to reconsider their position. We believe that whether or not this legislation is passed the government should reconsider the justification for making cash advances on farm-stored grain.
The Minister of Trade and Commerce made the statement that no other producers in Canada would receive similar consideration. One thing, Mr. Chairman, perhaps not recognized fully by many people in other parts of Canada who live outside the prairie provinces is that no other producers in Canada are in exactly the same position. We are fully aware of the fact that other agricultural producers have problems that they think are just as critical, in some cases more critical. I would point out that the potato grower on his farm in northern New Brunswick or Prince Edward Island faces an even more urgent problem. He has a crop that cannot be kept. It is a perishable crop. The same is true of the fruit growers in the Annapolis valley and elsewhere. They have perishable crops that cannot be stored. The problem they face on their own farms is even more critical because, with all the difficulties facing the wheat growers, the growers of potatoes, apples and other products of that kind cannot keep those products against the day when there may be some return.
Nevertheless there is a difference in this problem and one that I think the potato grower, the apple grower and other agricultural producers in other parts of Canada will recognize. By law the wheat producers of western Canada are unable to sell to anyone but the government agency. That is the key to the whole nature of this special problem. We also must recognize the scale of the problem from the point of view of Canada as a whole. Nearly one billion bushels of wheat are involved in the consideration of this problem. That involves an enormous amount of money for all Canadians, and it is not only a problem of the individual wheat producer,

critical though his problem may be. This is a problem affecting the whole of Canada.
We are also confronted with the fact that the wheat producers, who under legal restrictions are not permitted to sell to any but the government agency, have on their farms at this time nearly 500 million bushels of wheat. An enormous percentage of the world's available wheat supply is lying on the farms of western Canada at this time, or is contained in some sort of temporary shelter. That is the problem. One of the things which should be borne in mind, without in any way debating all the questions that may arise as to details of operation and otherwise, is the fact that the government says by law "this is our grain", which makes them in effect the owners of that grain the moment it is harvested.


William Earl Rowe: They cannot sell it to anybody else.


George Alexander Drew: I emphasize that point. In effect the moment the wheat is harvested the government becomes the owner of the grain. There is no other purchaser. The wheat farmer has been permitted to assume, and with reason, that the wheat would be taken up appropriately year by year so that from this grain, which must be delivered to the government agency, he would get an adequate return on the basis of a quota per acre at the initial price fixed by the board, and that this amount would then be handed to him as a cash advance on his quota book.
Our argument, and we have put it forward for some considerable time, not just in the last few months, is that the government alone can take the wheat and the government is already in fact the ultimate owner and by law can be the only owner in the end when it is sold. Therefore where the wheat cannot be taken into the elevators and the farmers need this money for their immediate requirements, then on that wheat, which in effect belongs to the government, the farmers should be able to go in the usual way and get a cash advance on a proper quota basis at the regular initial price, such advance to be marked on their quota book, with the understanding and the undertaking that that amount of grain will be delivered to the elevator on demand the moment they receive notice that the space is available.
Surely there is nothing complicated about that. The ordinary machinery now existing would carry this out without any problem of any kind. There would be none of this ominous shopping around that the Minister of Trade and Commerce implies. Perhaps his mind is accustomed to shopping around for a consideration. The fact remains, however,

that this system is one which involves no shopping around. This system is one which would be on a clear and understandable basis, with the cash payment entered in the quota book in the ordinary way and paid to the farmer.
That, Mr. Chairman, is what we ask. We certainly will support the resolution, inadequate though it may be to meet the problems facing the farmers; and though we are told that it will contain provisions which in themselves we think are onerous and unfair certainly it is better than nothing. We do urge, however, that with the adoption of legislation of this kind the government does not make the mistake of thinking it has dealt with the problem. I hope it will look at the statements that are appearing in the press of western Canada and those coming from farm organizations before the childish threat is issued to this house that we are in some danger of creating a panic if we even dare to discuss problems for which we are responsible. May I say to the Minister of Trade and Commerce


Clarence Decatur Howe: Just talk to the chairman.


George Alexander Drew: -that even if his Liberal supporters are prepared to applaud that kind of dictatorial statement, he is not going to find any acceptance of warnings of that kind here in the House of Commons. This is still a free House of Commons, and we are going to carry out our obligations in the house. Certainly there is no greater obligation than to point out to the government that along with any arrangement of this kind there should go further consideration of a simple and practical method by which the farmers can receive some cash immediately without any involved procedure in return for wheat which in effect already belongs to the government and to no one else. Since it does belong to the government and since the farmer himself certainly can exercise no control over the availability of freight cars and elevator space, there should be no interest on payments made in respect of advances on the wheat which the government has already in effect taken under its control.
That is a proposition which emerges naturally and logically from the position the government has taken. I hope all our friends in every part of the house who have had reason to give this subject consideration will let us have the advantage of their opinions, because we are not merely dealing with the motion concerning this resolution now before us. In this discussion we have an opportunity once again to urge the government to give consideration to the only practical proposition that has been put forward to give
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the farmer some relief in the critical situation in which he now finds himself. We know perfectly well that there have been bountiful crops. Of course there have been such crops. By that statement the Minister of Trade and Commerce would seem to imply that our only hope is to have a disastrous crop failure. That is what in effect is implicit in that statement. The only suggestion they have to offer is a disaster of another kind.


Mr. Sluder:: Balderdash.


George Alexander Drew: I am glad to know there is at least one Liberal member who is willing to have his voice heard. All I hope is that, instead of the kind of comment that has just been made, some Liberal members opposite will show that they are prepared to discuss this subject during the debate in spite of the admonition which has been given to them by the Minister of Trade and Commerce.


William Earl Rowe: They will not say anything.


George Alexander Drew: There is always reason for
hope. We might hope that some of the things which are now being said privately will be said publicly by hon. members opposite with regard to this subject.


William Earl Rowe: They will not even deny what you are saying.


George Alexander Drew: Mr. Chairman, it is true that
there have been wonderful crops. Surely, however, this government is not going to just leave the impression that all it intends to do is wait for bad crops to solve this problem. If this situation were as simple, as easy and as good as the Minister of Trade and Commerce has implied by his recent remarks, may I ask this question: Why was he complaining about the action of the United States government? If there is no reason for concern about what has been done, why did he make a public statement about the action of the United States government with regard to sales which he thought might conceivably disturb these operations?
The fact is that he was concerned about it, in spite of the fact that the Minister of Agriculture apparently thought surpluses were a good thing. He was disturbed about it and he said so. I only wish that in this discussion this morning something of that concern had found its way into his remarks, so there might have been some real relationship between what he said and the situation as it actually exists.
Whatever the situation is, Mr. Chairman, there is one other consideration that has not been met by the government. The Minister of Trade and Commerce made the statement that we would find in the speech from the

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throne the whole wheat policy of the government. This morning we had been left with the clear impression that the government has no other thought with regard to this matter except what is found in this resolution.
Let us remember what the minister said. He told us that there have been good crops; that this is the only reason there has been any serious problem; and that there have been, of course, some difficulties with regard to the availability of cars. We know that within recent weeks ships have been lying at anchor in the harbour at Vancouver, unable to pick up the grain which they were ready to move. It is explained that this situation might be the result of the failure to get wheat there because of the shortage of box cars. There is also the statement-and it has not been satisfactorily challenged in any way-that there is over 100 million bushels of storage space not being used in the elevators of this country at the present time.	*
The farmers of Canada are not responsible for that situation. The farmers of Canada have in their hands no power to deal with the problem of the availability of freight cars and other means of transportation. That matter is in the hands of the government alone. The farmers of western Canada, who are in a unique position because of what I have already pointed out, should be told at this time what the plan of the government is for the current year. In addition to anything that is said in relation to this resolution, surely this is the time for the farmers of western Canada, who are in that special position, to foe told what the policies of the government are in relation to the crop for the coming year; that is, for this present year. If they do not know, how can they possibly make their plans for the seeding which will take place in the not too distant future? The farmers have a right to know what is going to happen next fall. They have a right to know what this government intends to do if we have another bumper crop, as might reasonably be expected with the amount of precipitation there has been during this winter. No matter how inadequate this legislation may be, and even though they have not yet agreed to provide for cash advances on farm-stored grain, certainly the government should come forward with a clear statement of policy so the farmers may be able to make their plans for this year with some knowledge of what they may reasonably expect. Otherwise the only hope that is offered to them is disaster of another kind. No solution of the problem is offered to them by this government except the possibility that there will be a disastrous crop failure. Surely they are entitled to more than that.

I therefore close these remarks, Mr. Chairman, with the statement that in supporting this resolution we do so simply because we would not wish to urge that any relief, however limited or unsatisfactory it may be, should be denied to any farmer who wishes to avail himself of it. At the same time, however, we urge that the government reconsider its position and decide to make cash advances on farm-stored grain by the method and for the reasons I have outlined. We also urge that before these discussions are closed, the government make an announcement to this house and, through this house and the press gallery in the house as well as through Hansard, to the country, inform the farmers in the three prairie provinces what they may expect next fall in relation to the crop that will be grown this year.


Hazen Robert Argue: The resolution the Minister of Trade and Commerce has presented to parliament at this time to meet the severe shortage of cash on the prairies is probably the most unpopular move this government has made in the realm of agricultural policy since October, 1947, when the ceilings were taken off oats and barley and then were placed back on the grain exchange.
This morning we have been read a lecture by the Minister of Trade and Commerce. He has suggested to us that we should curtail the debate, that we should not speak in this debate, that we should not discuss the serious position of the western farmers. The Minister of Trade and Commerce is again up to his old tricks. He is trying to muzzle parliament and prevent free discussion. This government is a past master at muzzling parliament. Yesterday we had a fine example of the way in which this government treats parliament and the members of the House of Commons. Yesterday I had before the house a bill proposing a reduction in interest rates on small loans.


Some hon. Members:: Order.


The Deputy Chairman:: I think the hon. member will agree that neither a reflection on a vote of the house nor the discussion of an alternative measure is in order under this resolution, on which we are allowing wide discussion of the farmers' problems.


Hazen Robert Argue: I am not commenting on a vote of the house at all. I am commenting on the attitude of this government. When a member of the opposition has a proposal before this house, not necessarily yesterday but any time in the past, that might embarrass the government, what does the government do? It has somebody stand up and move the adjournment of the debate, using its parliamentary majority to cut off debate and kill

the discussion. Then when the adjournment cannot be moved because it is a piece of government legislation that is highly unpopular, as this legislation before us now is, of course the minister uses veiled threats to attempt to accomplish the same result.
The minister and the Liberal party stand alone in saying to the people of western Canada that the legislation now before this house will solve the problem. The Minister of Trade and Commerce is smarting under the treatment he received within the last few months in western Canada. He went to speak to one farm convention after another to try to ram down the throats of the farmers this same kind of garbage he is attempting to ram down our throats this morning. At these conventions the farmers repudiated the minister and said, "We are not supporting bank loans; we are, in fact, opposing bank loans." Then this morning the minister makes the utterly ridiculous statement that anyone who is against this legislation; anyone who says that bank loans are not good; anyone who says that the wheat board should be instrumental in making advances to the farther, is against the wheat board.
That is a fine statement to make regarding the Saskatchewan wheat pool delegates, who on November 1 last at the opening of their annual meeting passed an emergency motion asking for cash advances through elevator companies on farm-stored grain. No organization has promoted the wheat board method of marketing more than the Saskatchewan wheat pool. I am sure the delegates at that meeting proposed something they thought would help the wheat board and would not, in fact, hinder it in any way.
When the minister threatens parliament and tries to choke off discussion, he does not stop with threatening the opposition, as the Leader of the Opposition said, he manhandles the Liberal party back benchers and says, "Fellows, toe the line". He says there are people in this country opposed to the wheat board. Yes, there are. Every time you hear anybody say there is widespread opposition in Canada to the wheat board, you can bet your bottom dollar it is a member of the Liberal party who is sowing the seeds of opposition to the wheat board.
That is not all that is wrong with this legislation. The minister has contempt for the opposition, he has contempt for his own party, and he has contempt for parliament. I was surprised that the Leader of the Opposition should overlook the very important point that this legislation in fact came into effect on November 15. Now, months later, parliament is being asked to rubber stamp something the government put into effect months 67509-39J
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ago. You know how it was put into effect? The Minister of Trade and Commerce is quite agile at a lot of things. He was in Regina addressing the wheat pool convention on November 5, I believe. It was there he made the big announcement of this bank loan legislation. Parliament was not in session; parliament in the minister's opinion did not have to be called into session. All the Minister of Trade and Commerce had to do was to stage a radio-T.V. show and announce the policy. He did not need parliament. The announcement was made in that way, and months later parliament is called and we are asked to rubber stamp this legislation the government is proposing.
As I have said, not since 1947 has this government done anything in connection with prairie farm matters that was so thoroughly and so unanimously unpopular as is this measure. The prairie producers resent having this bitter pill of bank loans rammed down their throats. It is no alternative to a system of cash advances. It is not working, and was not supposed to work. The minister said it is not going to be used very much, and it is not. Not many farmers can get a loan. This method was not used much in
1951.
The Leader of the Opposition said the position of his party has been clear since
1952.	The position of the C.C.F. was clear for many years prior to that. In 1942-43 the members of this group were advocating cash advances. On December 3, 1951, we presented a motion requesting cash advances. The situation then was not nearly as critical as it is now. At that time the government put through parliament somewhat similar legislation guaranteeing bank loans up to $20 million. As the minister well knows, just a little over $600,000 of the $20 million was actually used.
I have in my hands figures showing the bank loans that have been obtained in the first two weeks of the operation of this act. Some hon. members may think that if the act is going to remain in effect for some months, it would be used very little in the first two weeks. The fact of the matter is that many farmers who felt they were in such a desperate financial position that they were forced, because of circumstances, to go to the bank to ask for a loan would do so in the early part of the operation of the act. I have the figures for the first two weeks of the operation of this act. In that time there was loaned to less than 3,000 farmers, out of 200,000 producers on the prairies, just over $2-5 million. That is an indication not only that the legislation is faulty, not only that the banks are exceedingly careful in

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making these loans and are endeavouring to make as tew loans as possible, but that the producers themselves are not anxious to have this kind of loan.
The producer believes that he is forced to go to the bank to ask for loan on his summer's work, a loan on his wheat, a loan on something which is his cash asset, and worse still is forced to pay interest on it. He is, in fact, paying interest on his own income. How many times have I heard farmers say, "We would like to get the Minister of Trade and Commerce in this position, where at the end of each month instead of getting his regular cheque he would be told that legislation was being provided whereby he could go to the bank and borrow his month's wages, go into debt and pay interest on his own money." That is the basic reason that wheat producers are opposed to this legislation.
It will not work for a great many reasons. It will not work because it is probably correct to say that a very large percentage of western farmers do not go to banks, do not do ordinary banking business. As a matter of fact there are more credit unions in Saskatchewan than there are branches of chartered banks in that province. Most of these credit unions are doing business in the rural areas, so that a great proportion of the prairie farmers never darken a bank door. In many instances they do not know the bank managers, and they may have to travel 40 or 50 miles to find a branch of a chartered bank. They go into a bank to see the manager, and the farmer is a total stranger. The banker cannot tell if he is a farmer; cannot tell if he has a quarter section or six quarter sections. The bank manager cannot tell whether he has 1,000 bushels of wheat, 10,000 bushels or none. The bank manager is placed in an untenable position. The bank manager is just as much opposed to this legislation as the producer who is forced to go to the bank and ask for a loan.
The principle of forcing farmers to pay interest on their own money would have been just as bad if the government had included the credit unions in this proposal. I do not know why the government would not allow the credit unions to have the same privileges and the same guarantee as the banks. The farmers who do business with the credit unions would certainly be a lot happier to go to the credit union manager, who knows their circumstances, to ask for a loan under this legislation. The government, of course, are friendly with the banks. They know the heads of the banks. The government and the banks are very close. However, the government will not tolerate

guarantees for the credit unions to allow them to compete with the banks for banking business on equal terms.


Mr. Cannon:: Will the hon. member permit a question?


Hazen Robert Argue: Surely.


Charles-Arthur Dumoulin Cannon: Does the hon. member know that in the case of fishermen the banks and credit unions are on the same footing as far as loans are concerned?


Hazen Robert Argue: Yes, that is the toe in the door. It has taken a long time to correct that situation, and I am glad the government made the change, though it still has a long way to go. It took private members to suggest it; it was not a government idea. I am suggesting now that the credit unions be given precisely the same guarantee as was given to the banks, and I am willing at this time to stake my reputation on the statement that on loans the credit unions make to purchasers they will come to the government for a smaller guarantee and a smaller recompense than in the case of the banks, because the records of credit unions show that they have sustained very few, almost negligible losses in the business they do.
This legislation is wholly inadequate because of the total amount of money farmers can obtain under it. It is bad enough for the farmers to have no money and to have a lot of wheat in their yards they cannot sell. It is bad enough that the farmers owe money all around town; but it is even more serious for the local merchants, the storekeepers, garage men, implement dealers and oil dealers who have not just one set of accounts but have the accounts of perhaps 50 or 100 farmers to worry about. It is the local merchants in the prairie provinces who are carrying the load. They have carried it in the past and they are carrying it today. That is why the resolutions which came to the government were so unanimously in favour of cash advances; the storekeepers and merchants wanted some measure which would enable the farmers to pay their accounts.
The minister informed us yesterday that he has thousands of pieces of paper in his possession respecting a return I asked for in relation to the production of papers in regard to cash advances. I am positive that fewer than 1 per cent, if indeed any, of the resolutions or letters from wheat producers in the minister's possession state that they are in favour of the policy that is now being presented to parliament. The producers are almost unanimously opposed to this method of handling the situation at this time.

The government is proposing this kind of legislation as a means of dealing with the problem. It is proposing other legislation which asks parliament to approve the payment of storage on excess carryover. The Minister of Trade and Commerce said that the people of Canada, the taxpayers, would resent having to provide the money necessary to pay interest-free cash advances. I do not believe that statement. I do not think it is true because I believe, although I could be wrong, that the four parties in this house will give unanimous approval to the government's proposition that parliament and the national treasury should meet the cost of storage and carrying charges on wheat.
I am just as convinced that had the government had the foresight, courage and imagination to bring in a proposal for cash advances, there would be the same unanimous support in this house as is now likely to be given to the storage provision.
I suggest that the government should do one more thing and should do it now. The government should not make an interim payment on the 1954 wheat crop and then a final payment some months later. I do not think that is the best method of handling the situation at this time, when a severe shortage of cash exists. I believe that the government through the governor in council should now close out the wheat board account for 1954-55. The inventory should be valued at present sale prices, and the farmers at this time should ge given the largest payment that can be made out of the funds that happen to be in that account after it is closed out. They should not receive a small payment now and a small payment some months later, with all the extra cost that is involved in the wheat board making a separate payment.
I would hope that under the legislation now before the house the payment could be more than the 15 cents a bushel which was paid last year in the form of an interim and final payment. I would hope that legislation before the house would make it possible for the government to make a payment of 20 cents or even 25 cents a bushel. Certainly the account should be closed out and the farmers should be paid that money as soon as possible.
The Minister of Trade and Commerce has said that the only danger which threatened wheat markets in the last few months has been speeches by members of parliament. I presume he means speeches by hon. members who have been talking about cash advances. I also presume he means that the wheat pool officials are damaging the grain business when they go about and ask for cash advances. The minister rose and said the other day the
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United States is to blame. It is the United States policy which is to blame, he says. He says that bartering and accepting legal currency and gifts will not be sufficient to increase our sales, but the United States is following that policy and is increasing its sales and distribution to a large extent.
I was pleased at the announcement that a trade delegation from the U.S.S.R. is coming to Ottawa. It would be my hope that the minister himself would handle the deliberations of that conference, and that the government would face the export situation with an open mind. I hope the government will be prepared to undertake any financial steps that may be necessary to enable the export of Canadian wheat, and to enable sales to be made.
The minister does not like the word barter. I would suggest that the minister make contract sales, if he does not want to use the term barter and in attempting to sell wheat, be prepared to sell it to nations behind the iron curtain or to any other nation. The government should be prepared to make those sales where necessary on a contract basis over a number of years; and where credit extension may be necessary, the government should not stop at one year but extend credits over two, three or four years if necessary and if such credits will result in an expansion of our wheat trade.
Some announcements concerning export sales that have been made in the past month have given some encouragement to the farmers. These announcements relate almost entirely to sales of Canadian wheat to countries behind the iron curtain. It is not an accident that these sales are to communist countries. The reason that sales of wheat to countries behind the iron curtain are the main hope for increased sales of Canadian wheat at this time is the fact that public law No. 480, under which the United States congress is supporting and promoting the disposal of United States wheat, confines the disposal of such wheat to countries other than those behind the iron curtain.
I think that Canada should be in the position of promoting sales to any country in the world and by whatever method might be necessary, including the methods that are being used in the United States. We should not have lagged behind the United States and have reached the position where today apparently our only substantial hope for increased sales appears to be countries behind the iron curtain.
We have this legislation before the house, and it is most unpopular. As I have said, no

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one is in favour of it except the Minister of Trade and Commerce and his supporters. They are endeavouring to drag in the farm organizations and show that they are in support of this policy. The provincial leader of the Liberal party in Saskatchewan made a similar statement early in November, and an official reply had to be issued by the Saskatchewan wheat pool denying that they were in favour of bank loans. In part that statement had this to say:
The policy of the Saskatchewan wheat pool, as approved by its delegates in annual meeting, is clear-cut. It does not favour the government's proposal for bank loans. It firmly believes that the conditions are such that extraordinary measures are called for, and that these should include advances against farm-stored grain, and that such advances should be made to individual farmers through elevator companies in accordance with an agreement between the companies and the wheat board.
The minister attempts to show that when we support having the wheat board make these arrangements, we want the wheat board itself to go out and make the loans. Nothing could be further from the truth. All we are asking is that the wheat board make the arrangements whereby the grain elevator companies can make the advances. The elevator company agents are in a much better position to make advances than are the banks. I have said that we have more credit unions in Saskatchewan than branches of the chartered banks, and I would say that there are 12 elevator agents in Saskatchewan for every branch of a chartered bank.
The elevator agent is personally acquainted with the farmer. He knows the farmer's business, because he is a close friend of the farmer who brings grain to his elevator. Most likely he knows the amount of grain the farmer has on his farm. He is in position to make the advance. Why does the minister say the government will not do it through the elevator companies? His claim and he is wrong again is that the elevator company or the wheat board cannot be given the power to place a lien against the grain of the type which a chartered bank could obtain under the Bank Act.
The minister made another amazing statement the other day. He said it would be very risky for loans to be made by the elevator companies to farmers. Why? Because he said the farmer might feed the grain, the farmer might sell it to his neighbour or the farmer might not repay the loan. The Minister of Trade and Commerce was saying in effect that he could not support advances to farmers through the wheat board and the elevator system because the farmers are dishonest, because they are

likely to feed their own grain or because they are likely to sell it to their neighbours. I think that was a shameful statement, and it is a statement which the Minister of Trade and Commerce and the Liberal party will not be allowed to forget.
I do not think the farmers of western Canada as a group are any more dishonest than any other group in Canada. I believe the western wheat producers are honest. The experience of the government under the Farm Improvement Loans Act, whereby the government has had to pay just 1/35 of 1 per cent of the money advanced under the act, shows that an overwhelming majority of prairie producers are wholly and completely honest. I believe that cash advances are practical and would be repaid almost without exception, and would give the government a cheaper method of making money available to the producers than the method now used.
If the farmers were given cash advances and the interest paid by the government it would cost the treasury 4 per cent on an advance of 90 cents per bushel, which is the most that has been asked and which is the amount the CCF is asking for. That would cost the federal treasury less than 4 cents per year to finance a bushel of wheat in the farmer's possession. The minister says we should not ask the taxpayer to do that, but according to the other resolution on the order paper-I want to say I am pleased it is there, and I am going to support it- the government and the taxpayer will assume carrying charges and storage charges on grain held by the wheat board in excess of 178 million bushels. What does that mean? It means 4 per cent on the whole initial price.


Clarence Decatur Howe: What bill is the hon. member discussing now?


Hazen Robert Argue: The storage payment resolution. I am pointing out to the minister that what he is doing in this instance-and I am glad he is doing it-is more expensive and costly for the taxpayers per bushel of grain than the proposal we have been advocating for many years. It is more expensive for this reason. Not only will the national treasury be paying 4 per cent of the average initial price for the wheat; the national treasury will also be paying storage charges at the rate of 10j>- cents per bushel per year. The policy which the government is now following will cost the taxpayers of this country almost four times as much per bushel of grain as the policy which we in this group have been advocating for many years.

I suggest to the government that even at this late date it should withdraw this legislation and provide for cash advances, which would give the farmer in Canada at least part of that which is given to the producer in the United States. The farmer in the country immediately to the south is able to get $2.08 per bushel on 95 per cent of all the wheat he has harvested, with the advance being interest-free on delivery of the grain. If the United States government can provide a cash advance of $2.08 per bushel, surely this government should do more for the Canadian wheat producer than is being provided by this legislation, which attempts to shackle him with further interest charges.


Mr. Quelch:: Mr. Chairman, I think the question of bank loans against grain stored on the farm must be viewed in the light of present conditions, as well as in the light of the situation that existed at the time this policy was first put into effect by the government.
The minister stresses the fact that sales of wheat are picking up, that there is really no great marketing problem today, that the problem is rather a question of transportation and the lack of box cars. It is interesting to note that, because last year the farmers were told that it was not a problem of transportation but rather a lack of orders, that the elevators could not get orders. Now the farmers are told that there are plenty of orders but they cannot get box cars. Many farmers are beginning to wonder whether or not the railways are putting on a sit-down strike as a protest against the Crowsnest pass rates.
Be that as it may, the important point to note is that we are now approaching the end of the sixth month of the present crop year. It is ten months since the first costs were incurred in the production of this wheat, and it is over three months since harvesting operations were completed. In spite of that fact, there are many points in western Canada where farmers today are not able to deliver one single bushel of wheat against even a one-bushel quota. That is the situation that exists today, and that is why it is still very critical in so far as many points in western Canada are concerned.
In addition to that situation, there are amounts of wheat from previous crop years that are still being stored. Costs were incurred in the production of that wheat, and farmers are most desirous of being able to liquidate some of those costs. Those costs can be liquidated only by the sale of the wheat. Apparently the minister keeps forgetting that the production of wheat is not a costless thing. He seems to think that if the farmer has some wheat on his farm he can sell it and invest the proceeds in government bonds. Unfortunately that is not the
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case at all. In a majority of cases the larger percentage of the wheat on the farm is already pledged, and the minister should keep that fact in mind.
The answer given by the government last fall that there would be bank loans against wheat stored on the farm caused a wave of protest meetings throughout western Canada.
I know that the minister has stated that those meetings were largely at the instigation either of the grain exchange or of certain interests in the large cities.
That may be true in certain parts of western Canada. I am not in a position to say whether it is or not. I can say that there is not one word of truth in that charge as far as my constituency is concerned. The protest meetings originated among the farmers themselves. You might say it was a spontaneous action on the part of the farmers, and generally a member of a local farmers' union would take the responsibility for first trying to arrange a meeting.
I was not in my constituency at the time the question came up, but I very soon received a long distance telephone call asking me to come down and attend some of the meetings. I would like to say that those meetings were not political in any shape or form. I did not go on the platform, but merely sat with the rest of the farmers. As a matter of fact there was no platform speaker. The meeting was called to order and the chairman was appointed, and then there was a free for all discussion. The discussion first of all took place on the government's proposal, because at that time it was merely a proposal, to make bank loans available to farmers against wheat in storage. I can say that there was very bitter protest against that suggestion.
I remember the first meeting. A resolution was moved that the farmers were unalterably opposed to such a suggestion. A good deal of discussion took place on that motion, but finally some farmers pointed out that whilst the majority were very much opposed to that proposal, nevertheless there were some farmers in such dire straits that they would have to take advantage of some form of loan. If they could not get what they wanted through advances they had better have the loans as suggested by the government, but they were prepared to take them against their better judgment.
The reason they opposed loans was largely that there are very large stocks of wheat on the farms and a very large percentage of those stocks are already pledged. That is something the minister does not appear to be able to get into his head. He has an idea that so long as the farmers can sell a small



$16 HOUSE OF COMMONS

[Stage Direction]
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amount of their wheat, what might be regarded as a normal amount in a low crop year, then any wheat that is left on the farms may be regarded as velvet, and they can use that for the purpose of purchasing bonds or for any other purpose. But unfortunately that is not the situation. As I say, a very large percentage of wheat is already pledged. Take the Morrin district, probably one of the best wheat districts to be found in western Canada. It is on the gumbo plains. I was told at that meeting that in that district 60 per cent of the wheat on the farm is already pledged.
Clarence Decatur Howe: May I ask the
hon. member a question? If the wheat is already pledged, is he suggesting that the government should make an advance on it just the same?


Victor Quelch: No, not on the 60 per cent of the wheat that is pledged. The government could certainly make an advance on the remaining 40 per cent at least, or it could make an advance on 50 per cent with the stipulation that a certain amount be used to pay off the obligations that have already been incurred. The reason such a large percentage of that wheat has already been pledged is that heavy costs were incurred in the production of the wheat. Farmers were obliged to get bank loans to meet those costs, and they were obliged to charge bills with machine companies, stores and oil companies, and those bills exist at the present time. Therefore they are not interested in a proposal that would put them further into debt. What they want is a chance to sell some of their wheat today in order to pay off those debts. They are not interested in going further into debt, especially at an interest rate of 5 per cent.
These meetings gave very careful consideration to the proposal of the western wheat conference and the resolution that was submitted to the government by the wheat conference and by the western provinces. It was a proposal that the government should advance to the farmers up to 50 per cent of the normal wheat delivery. There was strong support for the principle of that proposal.
The only thing the meeting did not like was the rather vague definition of "normal delivery expected". They said that might mean 8, 6, or perhaps only 4 bushels. So they suggested that, instead of using that form, they should say "up to 50 per cent of at least 8 bushels per cultivated acre." That is the basis upon which delivery was made last year and judging from what the minister said we have reason to hope that there will be a similar delivery this year.

The fact that we may have a similar delivery this year does not help the situation today. Today the farmers are in the very difficult position of having debts piled up. Every time they go to town they have to meet their creditors. Though they have wheat on the farms by means of which they should be able to liquidate those debts, they are not able to sell it. They also stress the fact that the government is largely in control of the wheat market. It took only 8 bushels in 195455, but there is no chance for farmers to deliver even a one-bushel quota at many points today. Therefore they feel the government should be prepared to make advances up to 50 per cent of at least 8 bushels per acre.
The minister argued that the only safe way to make loans would be through the banks, and that there would be little security by any other means. I am not going to debate that point, because the farmers are not asking for loans. They are asking for advances. The minister keeps making the alternative between bank loans and loans through the wheat board, but that is not what the farmers are asking for. They are asking that advances be made, and they would be quite prepared to give title to the wheat on their farms in return for these advances. Therefore the question of security does not arise. That is actually what is done in the United States under the sealed storage program.
Before I begin on another phase, may I call it one o'clock?
At one o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 2.30 p.m.
Victor Quelch: Mr. Chairman, the Minister of Trade and Commerce has made it quite plain that he believes it is to the advantage of Canada to maintain a surplus of wheat. He has also emphasized the fact that he believes the government should be prepared to relieve the farmers of some of the burden created by storage charges on the wheat held by the elevators, but on the other hand he does not feel that the surplus position creates any burden upon the farmer.
I would agree with the Minister of Trade and Commerce wholeheartedly that it is in the national interest to maintain a substantial reserve of wheat. We feel that a reserve of wheat should be maintained as a national responsibility so that in the event of a series of crop failures we would have enough wheat on hand to meet domestic requirements as

well as to fill the demand from foreign markets. But we do not believe that the farmers should be required to finance the cost of maintaining that reserve.
I should like to quote what the minister said on this point, as found at page 129 of Hansard of January 16:
As far as the long-term situation is concerned, it seemed to me it was a hardship on the western farmer that he should be required to pay the carrying charges at the level required when grain storage is filled for practically twelve months in the year.
This is the point I want to draw to the attention of the house.
Apart from that, it did not seem to me that there was any particular burden on the farmer through this condition of plenty.
Toward the bottom of the same page he said:
We shall endeavour to see that hardship is not permitted to fall on the producer, but we are glad to have surpluses, particularly at a time when, in so many areas, we have acute shortages that hold within themselves the seeds of inflation.
As I say, we agree wholeheartedly with the minister on the desirability of maintaining a substantial reserve, but we do not agree with the minister that by merely paying the storage charges on a certain portion of the wheat held in storage in the elevators the burden is being lifted from the farmers. The minister apparently feels that it does not cost any more to produce and harvest a big crop than it does a medium one.


Clarence Decatur Howe: Mr. Chairman, I have never said that and I do not agree with the suggestion. I do know that the size of the crop makes a difference.


Victor Quelch: If the minister does not agree with that, I cannot understand why he should suggest that there is no burden on the farmers in carrying surpluses, because when they have been able to sell only a certain amount of wheat under a quota, the amount they have sold is only equivalent to quite a small crop.


Clarence Decatur Howe: Mr. Chairman, 8 bushels per specified acre is about 16 bushels per seeded acre, and 16 bushels per seeded acre is not a small crop on an average across the prairies.


Victor Quelch: The average in Alberta for the last year or two has been around 27 bushels, and the average in the area that I represent runs around 25. Right now in the good crop gumbo areas it runs around 35.


Clarence Decatur Howe: Over how many years? Is that just during the wet period?


Victor Quelch: On the gumbo plains it is over a long period of time. I would say the 67509-40
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average yield now is probably around 35, but over a long period I should imagine that on the gumbo plains it would be about 25.
We are faced with this situation. When a large crop is in sight the farmer has to consider whether he can harvest that crop with his existing machinery. In some cases he may feel he will have to buy additional machinery. In some cases he may feel that his machinery is worn out and that new machinery should be bought. On the other hand, if he decides to try to harvest a heavy crop with machinery that he knows is in poor condition he is very liable to be faced with heavy costs resulting from breakdowns and loss of time, and heavy costs resulting from repair bills. He will have additional costs for fuel and labour and the additional cost of providing storage for that heavy crop. Therefore until the surplus wheat now on the farms is sold, the farmers are faced with the debts which were accumulated as a result of raising that heavy crop.
Of course it is not only the farmer who is suffering in the rural areas. Another person who is suffering just as much as the farmer, and in some cases even more, is the small, local businessman who in many cases has acted as the farmer's banker, advanced him credit and allowed him to obtain supplies without even signing a note. Many of these small businessmen have their backs to the wall today. They are in a position where the wholesalers will not allow them to have any more goods unless they pay cash. If any goods are shipped to them they are shipped c.o.d., and they cannot even lift them from the station without paying for them. I know many good businessmen, though perhaps they have been a little bit too generous, who are having a lot of difficulty in carrying on at the present time.
I find that in most cases the old established farmer is able to meet these costs from his savings. He is in that fortunate position. Many of the older farmers who are hoping to retire shortly are having to use a lot of the money upon which they intended to retire to meet current costs of operation which cannot be met by the sale of wheat. The minister will undoubtedly argue that this situation will soon be remedied, and that as soon as they can sell their wheat they can replace their savings. That is true, but unfortunately many farmers are not in that fortunate position. I have in mind particularly the younger farmers, and it is these new farmers who are really caught in the squeeze today.
Take the position of the young farmer buying a farm on time. Many of the older farmers who started farming in the west between 1910 and 1920 are now retiring, and


Clarence Decatur Howe: Would my hon. friend tell me what bank lends money at 3J per cent? I might like to change banks.


Victor Quelch: All the chartered banks in Canada. They will lend money on the security of dominion bonds. I might mention the Bank of Montreal.


Clarence Decatur Howe: 
Victor Quelch: 
Clarence Decatur Howe: I shall be glad to do so. I have the approximate total up to the end of the year, but I have not the figures broken down as between provinces.


Victor Quelch: I saw some mention of the approximate number in the papers the other day. I thought perhaps the minister would be able to give us the approximate number.


Clarence Decatur Howe: I will try to get
that information.


Victor Quelch: In closing I will say this. In view of the fact that there are some farmers who will be obliged to seek help under this legislation, we intend to support it. Nevertheless we feel that it falls far short of meeting the needs of this situation.


Mr. Thatcher:: Mr. Chairman, I should like to comment briefly on this specific resolution. As I understand it, the main purpose of the legislation is to ease the critical cash shortage among prairie farmers. As a westerner I certainly sympathize with that objective.
As hon. members know, out in western Canada our wheat surplus recently reached the almost fantastic figure of one billion bushels. Our farmers are literally buried in wheat. Unfortunately, however, deliveries are so small that the farmers can get hardly enough cash to pay current living expenses. There is a very real cash shortage. That shortage is being reflected in reduced retail sales; and through lower retail sales I think harm is being done to the manufacturing industries of the east, such as the farm implement industry, the automobile industry and

so on. I therefore suggest that today there is real reason for parliament to consider giving the western farmer a helping hand.
This afternoon I have no particular political axe to grind, but I must say that I agree with those who have already participated in this debate and said that this resolution is unsatisfactory and inadequate. I am convinced that the desired objective, namely that of helping to ease the cash shortage in the west, could be achieved more effectively by cash advances on farm-stored grain. What is more, Mr. Chairman, if the truth were known I think many Liberal members from the prairies and even one or two cabinet ministers may think likewise.
What is the weakness of the proposal we are now discussing? I think the main weakness is simply that there will not be many farmers who will use it. Today most farmers who live on the prairies can borrow money from the banks on the security of wheat, without this legislation. I admit that there will be the odd one whose credit is perhaps not too good, who will need it. But by and large that is not the case. The majority of our western farmers today are reluctant to go further into debt to the banks than they are at the present time. That is why I say I do not think they will use this legislation.
We had the same kind of act on the statute books back in 1951. It was virtually useless then. I think it is going to be virtually useless today. As a matter of fact I think the Minister of Trade and Commerce must agree with that statement because out in Calgary, I think it was on November 28, he made this statement:
It is my hope and belief that comparatively limited use will be made of the lending facilities.
As I see it, all this legislation is going to do in the west is create more dissatisfaction, more resentment and more discontent. Almost without exception I think it is fair to say that our farm leaders, co-operatives, farm unions, wheat pools and the like have asked for cash advances on farm-stored grain.
The mechanics of such a scheme would be simple. Elevator agents would make cash advances against the quota book, on a basis decided by this parliament. Perhaps the advance would be 50 cents a bushel; maybe it would be 60 cents a bushel. That would be a matter for hon. members to decide.
The advantages to the farmer of such a scheme are obvious. In the first place there are many more elevators than there are banks, and it would be much more convenient for him to go to those agents. In the second place, I think the interest rate would be lower if the matter were handled through the board.
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Despite what the minister said this morning, I am convinced that the Canadian wheat board could borrow money at a lesser rate than 5 per cent. The collection of the advance would be automatic, because the amount of the advance would be repaid as the grain was delivered. Above all, as far as the farmer is concerned, when he obtained an advance he would be getting his own money. He would be getting money that he would not have to worry about paying back. It would not be money that was simply another loan.
Why has the government rejected cash advances? It cannot be because of cost to the taxpayer. In asking for cash advances the western farmer is not just asking for another government subsidy. The amount of the advance would be deducted from his payment when he delivered his grain. The interest could be deducted from his last participation certificate when the final settlement was made. I do not think cash advances would need to cost the taxpayer a single, solitary cent.
Why does the Minister of Trade and Commerce appear to oppose cash advances? In his speech last week he suggested that those who are asking for cash advances are out to destroy the Canadian wheat board. I do not think the minister would expect that statement to be taken seriously by this house or by people in the west. He knows, as well as do most hon. members, that the very people who have been asking for cash advances, such as the farm unions, co-operatives, wheat pools and the like, are those who support the wheat board most vigorously. If they thought this action would in any way endanger the Canadian wheat board, I do not think they would be making the request for cash advances.
In the second place the minister intimated that this program of cash advances would be beyond the capacity of the wheat board to administer. I find it rather difficult to accept such reasoning also. To say that the wheat board is not able to handle cash advances is a reflection on the ability and competence of the staff of the board. I do not think such an intimation has much justification.
As we deal with this problem, Mr. Chairman, it seems to me that we should bear in mind the fact that neither guaranteed bank loans nor cash advances are going to do much to solve the over-all wheat surplus problem. Neither proposal will sell one extra bushel of wheat. But in my judgment cash advances would be infinitely more effective as an emergency measure than the legislation now before us, for getting cash into the hands of the

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farmers. I shall, if a vote comes, reluctantly support the resolution which is now before us.


Mr. Jutras:: When the s-peech from the
throne was being discussed, I did not participate in the debate though there was a great deal of interest amongst members in that particular debate. I knew that all these measures of particular importance to us would reappear later in the form of resolutions and bills and that I would have an opportunity of expressing my views on them. This is the first such resolution, and probably the most contentious of the lot, that is before us for discussion today.
The resolution refers to a situation which developed last fall in western Canada. As the house is fully aware, a shortage of cash developed as the result of inability to deliver grain to the elevators, particularly at harvest time. Of course this created a serious problem. There were meetings and discussions all over the three western provinces in an attempt to solve the problem. The idea of cash advances appeared to be the easiest solution, and certainly was the one that had the most appeal throughout the three western provinces. As a matter of fact it spread over the west like a prairie fire. Of course our friends in the opposition from Saskatchewan, Manitoba, the hon. member for Assiniboia and the hon. member for Prince Albert were right there to fan the fire.
However, I think we can all agree that producers and everybody have a great deal of regard for cash advances as such. I believe we can say that everybody agrees with cash advances, but when you try to translate the idea of those cash advances into a practical scheme that would be acceptable to everybody then indeed there are many opinions. Many and varied schemes evolved out of the discussion. Frankly, Mr. Chairman, no matter what you term it, if you make an advance on a certain commodity, in this case wheat, it is still a loan. Inevitably there will be interest charges and administrative costs. There will be losses in any scheme of this nature.
If the person who receives the loan or the advance is unable, for one reason or another, to deliver the grain he still has an obligation to make good with money. In effect, a cash advance is just another term for a loan. At this point I should like to refer to the hon. member for Brandon-Souris who, in his speech early in the debate, made the ridiculous and I think childish assertion that the government were accusing the western farmer of dishonesty because they required guarantees in making loans. I believe this suggestion was also taken up today by the hon. member for Assiniboia. Of course we all know that any institution that lends money,

particularly other people's money, has an obligation to ensure that this money is repaid. They must get a guarantee in one form or another. I feel it is ridiculous to suggest that just because we are asking for a guarantee we are questioning the honesty of the farmers.
After all, even if a man cannot meet his financial obligations on a certain day it is certainly no indication that he is dishonest. It does happen, as we all know, that farmers, like everybody else, miscalculate and things do not work out exactly as planned. I believe the farmers themselves, as well as the farm organizations, would insist that an organization such as the wheat board operate in an efficient manner. I can understand our socialist friends being very free with other people's money, but I am a little surprised at hearing the suggestion from the hon. member, for Brandon-Souris, who is conservative in more than one sense.
Then we come to the hon. member for Prince Albert, to whom I referred previously. In the discussions in this house and outside, more recently outside, he has tried to make much of the statement the Minister of Trade and Commerce made in the course of an earlier speech. The hon. member tried to ridicule the suggestion by the minister that the members of the board would have presented their resignations if they had been called upon to administer such a scheme. The inference was that the minister was being run by the board. I think the people of Canada know the Minister of Trade and Commerce well enough to know that if he were convinced a measure was sound he would have found ways of implementing it.
It may be true that the hon. member for Prince Albert, or even the opposition, is not interested in knowing the feeling of the members of the Canadian wheat board but I can assure you, Mr. Chairman, that every producer was very much interested in finding out exactly how the members of the wheat board felt about this question. I am sure the producers gave full weight to the advice of the board on such an important question. After all, the board would be charged with the responsibility of administering the scheme, and if they have such strong feelings on the matter there must be sound reasons for it. When statements like that are made throughout the country, invariably the impression is created that the members of the Canadian wheat board have other interests at heart than the primary interest of the Canadian producer. There is no other way the suggestion can be interpreted.
I believe either we have trust and faith in the members of the board or we have

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not. But it does not mean we have to blindly follow their advice. When they take such a strong view, you cannot just dismiss it. According to the hon. member for Prince Albert, he would fire the whole board overnight without batting an eye. Apparently that is what the producers could expect from the Conservative party if they were responsible for administering the board.
While I am on this subject, may I protest against the charges that are repeatedly made, and were made recently in this house, against a civil servant who in my opinion is doing his best for the producer in spite of the very great difficulties. I refer to our transport controller. Surely even if you do not agree with his results or methods you will at least give him credit for discharging his duties honestly and looking after the interests of the producer. I know for a fact that is how he discharges his duties and I know that he is very conscientious and anyone who suggests that as controller of the board he is catering to interests other than those of the producer is being extremely unfair to this man. That charge has been reiterated again and again in this house. I feel it is unfair for the controller-


Hazen Robert Argue: Where are the box cars?


René Jutras: As I said before, Mr. Chairman, even if you are the controller you do not manufacture box cars-


Hazen Robert Argue: But you are supposed to control them.


René Jutras: -and the hon. member for Assiniboia should know that as well as anyone else.


Hazen Robert Argue: He lost them in the United States.


René Jutras: If he cannot, is that an indication that his integrity should be challenged? It is perhaps a matter of opinion as to whether or not his efficiency can be challenged but surely it does not give us the right to challenge his integrity, and that is an entirely different matter.


Hazen Robert Argue: I see that you agree he is no good; that is fair enough.


René Jutras: The point I am making at this time is that we have no right to challenge his integrity. I can assure the hon. member that we will discuss the other point relating to the transport controller at another time in this house; I shall be very glad to discuss it with him in this house.
A statement has been made by another hon. member from the west to which I should like to refer briefly. I refer to a statement
made by the hon. member for Winnipeg South (Mr. Trainor). I am sorry to observe that he is not in his seat; possibly I should have sent him a note but I assumed that he would be here when I spoke. However, the hon. member took it upon himself to moralize earlier in this house on this question. I must confess I believe he got a bit mixed up in his morals. Nevertheless, he in turn issued a challenge to hon. members to appear on a platform in a farming community. I observe that the hon. member is coming into the chamber now and I want at this time to give him a little kindly advice. I think he should revise his thinking in relation to the wheat board before appearing on a platform before an audience of farmers or grain producers. In the course of his remarks he referred to the wheat board's operation and termed it the charity of the Canadian taxpayer. There is nothing the farmers resent more than to have the operation of the board referred to as operating on the public charity because, as we all know and as has been explained time and time again-although apparently it has not penetrated my hon. friend's mind as yet -the board is an entirely separate operation from the government. It does not operate with public money but borrows money for the operation of the board and operates for the benefit of the producer and finally redistributes the money back to the producer. There is nothing which farmers generally resent more than to be told that the board operates as a charity from the Canadian taxpayers. I think it would be nice if the hon. member could bear that in mind before leaving the chamber.
There is, however, another misconception in the hon. member's mind which I do not intend to deal with at too great length because it is an involved question and I observed that it reappeared in the speech given by the Leader of the Opposition earlier this morning. I am referring to the nonsensical view that the government buys wheat from the farmers and that the whole procedure operates out of public money, confusing the two and trying to lay the blame there.
This point was taken up by the Leader of the Opposition this morning and was used as the basis of his argument. This is an old argument which we have heard for years, ever since the inception of the wheat board. The most staunch opponent of the Canadian v/heat board has used this argument in and out of the house incessantly since the inception of the board. The Leader of the Opposition laboured the point this morning that the government was "forcing" the farmer. Let me say if there has ever been a case of voluntary

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compulsion the wheat board is a good example. The Leader of the Opposition said in effect that the farmer has been forced into an impossible position. That is the effect of the argument advanced by the hon. member for Winnipeg South which was taken again by the Leader of the Opposition. I can assure both the hon. members that the farmers of western Canada and certainly all of the farm organizations can see through that argument and they have long since seen through it. As a matter of fact, it is the very argument which is causing the farmers great concern, in asking the government to share the cost of operation of any cash advance. Early last month in Winnipeg a western conference was held attended by nine farm organizations and others who met to discuss the question of cash advances. I think the discussion was more on a scheme of a permanent nature and most of the discussion was along that line, but it was based on the assumption that the government would take the responsibility for the interest and administration of the scheme. When the argument to which I have just referred was brought forward the delegates at the convention took a second look at it before asking the government to implement such a scheme, and the resolution instead of being passed was referred back to a special committee for further consideration before being presented. I am simply saying this in passing to indicate that this is an old argument and that the farm organizations in particular can see through it.
The hon. member for Moose Jaw-Lake Centre took the position this afternoon, if I understood him correctly, that the farmers and the farm organizations were unanimous in asking for cash advances through the wheat board as the responsibility of the wheat board. I submit that this is not what the Leader of the Opposition on the one hand and the Conservative party on the other have been advocating. I followed the speech of the Leader of the Opposition very closely this morning in an endeavour to ascertain what his position was in relation to this matter and I must admit that I am still not too clear on the subject. He referred to the loans being made through the ordinary channel of the wheat board as an ordinary payment. That would be exactly what the hon. member for Moose Jaw-Lake Centre advocated. However, in his concluding remarks the Leader of the Opposition added that the government should pay the interest. Did he mean that the government should pay the administrative costs and the losses? No one speaks of losses, although there are bound to be some losses,

and it remains to be seen exactly what his position is on that point because it makes all the difference in the world.
I agree that in all likelihood the farm organizations will support-not without reluctance, concern and perhaps with some modifications-a scheme of cash advances if the government assumes all the responsibility. However, when you examine the basis on which it has been put by the hon. member for Moose Jaw-Lake Centre, that the board should take full responsibility, I doubt at this moment if you could get any farm organization to endorse the proposition. Certainly it is the scheme advocated by the farmers' union because in their resolution they ask the government to assume the administrative and interest charges and I have yet to see a farm organization which has come out clearly for a cash advance through the ordinary channel of the wheat board with the board assuming all responsibility. This is the very scheme to which the wheat board itself took very great exception.
I am convinced that any fair-minded man will realize there are grave dangers in such a proposition. Of course, it depends-


Mr. Trainor:: What is the difference between the wheat board and the government?


An hon. Member:: Do you not know the difference?


René Jutras: I am glad that the hon. member for Winnipeg South has placed that remark on the record and I shall repeat it to make sure that it is on the record. The hon. member has asked what the difference is between the wheat board and the government. 1 would suggest that he attend several farmers' meetings and become informed on the subject, because I do not intend to take the few minutes at my disposal to explain it to him.
As I said, Mr. Chairman, the crux of the whole problem is:	who will assume the
responsibility in connection with any such loans and losses incurred through their operation? I would think that, at least in our part of the country and I believe generally, a great many producers would raise serious objections. You run into a great many difficulties. The farmers who do not ask for loans would have to help pay for the cost of the loans made to others. In all the discussion that has taken place since last fall on that particular point there has been no unanimity. I repeat that I doubt very much if you could get any farm organization to pass such a resolution.
When you ask the government to assume all the cost then you remove one of the main difficulties in connection with cash advances. But if we are to do that let us be fair and

admit it is an entirely different proposition when you ask the treasury to provide outright assistance. Speaking for myself and my district and Manitoba as a whole, I think the first question that would be asked, even by the farm organizations, would be, "What about the farmer who has had no crop?" There are many parts where they have had no crops for a few years, and certainly where they had no crop last year. Would they not expect to receive assistance on the same basis as those who have had a big crop? That raises another serious question to be resolved.
I am just mentioning these things in passing to indicate that the problem is by no means as simple as the opposition would like us to believe. When you talk of cash advances in general there is no difficulty, but before they can be put into operation the government must translate them into one specific scheme or another. Let us remember that when the emergency occurred three months ago a solution had to be found or a temporary expedient adopted in as short a time as possible.
At the present time throughout the western provinces the emphasis is being placed on a permanent scheme, call it cash advances or loans, in connection with farm-stored grain. I submit that this is another proposition entirely. This is a loan with the grain as security. Reference has been made to the United States scheme, but that is an entirely different proposition. This is not something new as it has been debated fully on at least two occasions in the past year. There are advantages and there are disadvantages.
So far the farm organizations throughout the country have not yet found a solution or a scheme that would be generally acceptable. It depends a great deal on how it is operated and on world conditions. If there were a need for it, that would be a good reason to institute such a system; but, as I say, it is a different system.
That is why, at the western conference held in Winnipeg last December, after due consideration they referred it back to a committee for further study. There may be merit in it, but the point is that cash advances in general do not mean very much. There must be something specific. There is no point in saying that farmers as a whole or farm organizations will support the idea of the wheat board being fully responsible for all administrative costs and so on that would be entailed. It all depends on how it is worked out.
As I say, this occurred three months ago and these bank loans were not popular and are not popular. But they have helped some people, particularly smaller operators, to a degree. The only real solution is to get the grain moving. We are fortunate that the grain
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is moving at the moment. I do not want to anticipate the other debate, as two of the previous speakers have, but I think it can be shown clearly that the policy pursued by the Minister of Trade and Commerce in connection with grain has been fully vindicated and will be fully vindicated in the months to come.


Mr. Harkness:: Mr. Chairman, I should like to take a minute to comment on one or two statements made by the hon. member for Provencher, who has just resumed his seat. It seems to me that the hon. member devoted all of his speech to an attempt to becloud the issue. In other words he was following the technique of setting up a straw man, setting up something that nobody has really asked for, and then proceeding to knock it down.
One statement in particular to which I take objection is the statement by the hon. member for Provencher that the Conservatives would fire all the members of the wheat board. No one has ever said any such thing. One or two people in our party have said, and I think all of us would be prepared to say the same, that they doubted very much the minister's statement that the members of the wheat board would all resign if cash advances were brought in. That is a very different thing entirely.
I am not going to bother going into the other matters which the hon. member for Provencher mentioned, because I think in the course of my remarks I will be replying to him in more detail.
The measure before the house was brought forward to validate action already taken by the government in an effort to relieve the shortage of cash in the hands of the farmers due to their inability to market grain over the past several months. Everyone in western Canada realizes the seriousness of that situation of shortage of cash. The Minister of Trade and Commerce has attempted throughout to minimize the seriousness of the situation and as has been indicated by several speakers-I will not repeat this-it seems quite evident that he expects that very little use will be made of this measure, that not many farmers will take advantage of it. I think the measure is being brought in deliberately to ensure that as few farmers as possible will take advantage of it, only those who are absolutely desperate; and of those, only the ones whom the bank considers good risks will get any benefit from it.
I think there are two considerations which we should keep particularly in mind as far as this legislation is concerned. The first is the adequacy of the measure to meet

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the situation which prevails and the second is whether there is an alternative measure which could be put into force to meet the situation more satisfactorily in place of the measure put forward by the government. I think on both counts there is no question that this is a pitifully inadequate piece of legislation for the situation it is designed to meet. I will be going into that in more detail.
This morning the minister said that this legislation was required solely-he stressed the word "solely"-because of the large crops of the past five years, and later on in his speech he said it was due to an abundant rainfall, that that was the only reason the legislation was necessary. Apparently in his thinking the minister leaves out of consideration altogether the effect of a large surplus of wheat in the United States and the fact that that is being disposed of-he has complained of this frequently-under give-away plans and things of that sort. He leaves out of consideration entirely the fact that there is a great deal more wheat being grown in Europe and in other parts of the world. In other words, apparently he fails completely to recognize that this is anything but a temporary situation which one or two poor crops will correct. It would appear at the present time that it is not a temporary situation. We must all admit that this particular measure is purely a temporary solution, one that will have no long-range effects whatever, and that we should not be thinking in these terms at all. What we should really be considering here is some means to meet what looks as though it would be a serious long-term situation as regards the disposal of the western wheat crop.
The minister went on to say in his usual optimistic manner that sales will be made in sufficient quantities so that farmers will be able to deliver approximately the same amount of wheat as was the case from the
1953-54 crop. What did they deliver from that crop? Under the stress of circumstances they delivered an eight-bushel per acre quota. In some cases they were not able to deliver the eight bushels per cultivated acre. If a farmer had a half-section farm with 300 acres under cultivation, he would be able to deliver 2,400 bushels of grain, which would net him, considering grades and so forth, not a great deal more than $2,400-maybe $200 or $300 more than that at the most-in most parts of western Canada. Considering his expenses, that is not sufficient to enable him to carry on operations, to meet the living expenses of himself and his family, to feed and clothe them and so forth, to pay his taxes and continue in business. Even if we are able to

take from the farmers as much grain as was taken from them in the previous year, they are still going to be in a very serious situation in most cases.
The minister then went on to say that cash advances meant putting the wheat board into the lending business, and the member for Provencher (Mr. Jutras) repeated that in the usual parrot-like fashion that the members of the Liberal party follow as far as the pronouncements of the Minister of Trade and Commerce are concerned. It has been pointed out by several other people, and I pointed it out myself only a few days ago, in the throne speech debate, that cash advances being made through the agency of the wheat board do not turn the wheat board into a loaning institution. A very great distinction must be made here between a loan made by a chartered bank or any other loaning institution, on the basis of a lien against wheat held by a farmer, and an advance made by one of the agents of the wheat board to a farmer for grain he has on his farm and is ready to deliver to the wheat board. As a matter of fact, the agents of the wheat board would be doing exactly the same thing as they are doing all the time and have been doing for many years past.


Clarence Decatur Howe: May I ask the
hon. member a question? Would there not be a difference? In the first case the bank has security for the advance and in the second case there is no security in the hand.


Douglas Scott Harkness: Yes, I think that the wheat board has more complete security than any bank would have, for this reason, that no farmer can deliver any grain and sell any grain except through the wheat board.


Clarence Decatur Howe: That is not true.


Douglas Scott Harkness: The minister says it is not true. The only other place he can sell any grain is to a neighbour or to another farmer. Of course, that brings up another point. There is a great deal of what, strictly speaking, under the Wheat Board Act, is illegal trade going on, that is what the minister is referring to. In other words, what has happened as a result of the extremely tight cash situation is the development of a black market or a free market, or whatever you want to call it, underneath the regular wheat board market for grain. Farmers are selling grain in that market at prices as much as 50 per cent below the regular prices quoted by the wheat board, and in many cases even less than 50 per cent. That is what the minister is referring to. But, as far as the ordinary legal sale of grain is concerned, and except for a very limited quantity which can be disposed of to farmers

in the feeding business, the only market a farmer has is the wheat board. I do not think the minister will dispute that.


Clarence Decatur Howe: I know of considerable quantities-and so does my hon. friend-being sold to feeders, and that is quite a legitimate transaction, as far as I know.


Douglas Scott Harkness: I have just said that there is a certain amount being sold, and most of it is being sold at very low prices.


Clarence Decatur Howe: If advances had been made on that wheat by the wheat board, what would have happened then?


Douglas Scott Harkness: If advances had been made on that by the wheat board, the farmer would not be in the position of having to sell it at these ridiculously low prices. He would have the money in his pocket. He would get twice the price he is getting at the present time. The only reason why anybody is selling grain at 60 cents and 70 cents a bushel, when the quoted price of the wheat board for it is $1.70 for No. 1 at Fort William, is that he is desperately in need of cash. As somebody remarked to me not very long ago, you cannot starve a farmer. You can introduce all kinds of regulations that might conceivably have that effect, but he will beat them. He will not starve. He will find some means of living.


An hon. Member:: He can live on wheat.


Douglas Scott Harkness: Nobody wants to live on a pure diet of wheat, but farmers are finding a means of getting cash in spite of the situation they are in and they will probably continue to do so. However, that is getting away from the main point I was following, which is that the elevator agents of the wheat board have been taking in grain from the farmers, making out cheques to them to cover the initial payment, and to have them make out similar cheques to cover grain on the farm-grain that they know is on the farm-is essentially the same thing. It does not involve any new administrative machinery. It does not involve anything that is going to cost a great deal of money. It can be done extremely simply and without any real risk because the farmer who has had a cash advance, unless he dies or goes out of the farming business, cannot deliver any grain without repaying that cash advance. In other words, he is in a strait-jacket as far as trying to get out of repaying that cash advance is concerned.


Clarence Decatur Howe: I do not like to keep interrupting, but reference is made to the farmer who has liens on his grain. The
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liens would take precedence over those cash advances, I suppose, would they not?


Douglas Scott Harkness: As a matter of fact, I do not think they would.


Clarence Decatur Howe: Yes, they would. I assure you they would.


Irvin William Studer: The municipal lien does.


Douglas Scott Harkness: The municipal lien does, but the other liens do not. As a matter of fact, what does the farmer want the money for except to pay off these liens, these taxes and so forth? That is why he is trying to get the cash advances. The various points the minister is trying to make are further efforts to becloud the real issue. In that connection the minister said this morning that the farmer would be shopping around and trying to get someone to give him cash advances. That statement is ridiculous.


Irvin William Studer: That is not what he said at all.


Douglas Scott Harkness: That is exactly what he said.


Irvin William Studer: It is not.


Douglas Scott Harkness: He said it would be an undesirable thing. As a matter of fact, every farmer deals with one or two elevator men at the most and in most cases he leaves his permit book with the elevator agent. It stays there right at the elevator. He brings in grain when he is able to deliver it and it is marked off against his permit book. If the amount of the cash advance were entered in the permit book there would be no difficulty in collecting the money save in very exceptional circumstances. I admit there is no operation of any kind in which there is not some slight risk, but I would submit that the amount of loss which would occur under a scheme of that sort would be infinitesimal.
The minister also tried to maintain this morning that cash advances would not be cheaper as far as the farmers are concerned. He went on to say that the board borrows money at 3 per cent but that if the board were making cash advances the administrative costs would be at least 2 per cent more. I do not know on what basis he says they would be 2 per cent more. As I have just indicated, I cannot see where the administrative costs would amount to anything. The elevator agents, who are acting as agents of the board, are there carrying on their operations and as part of their ordinary activities and without any more remuneration, because they would be issuing cheques anyway, they could make these cash advances. In other words, there is no need to have a big administrative set-up in order to administer such a scheme, and rather than

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the cost of it being 2 per cent I would think it would much more likely be one-tenth of 1 per cent or perhaps less than that.
There was one point touched on by the hon. member for Provencher which was not touched on by the minister. In none of his statements does the minister seem to acknowledge the responsibility of the board and the government, because the board is an agency of the government. There has been no admission of the responsibility of the board and the government to take this wheat off the farmers' hands because of the fact that the wheat board is the only market the farmer has. When you put into operation a legal monopoly system of any kind-there are plenty of legal monopolies, as the Minister of Justice knows-then whatever the purpose of the monopoly there are certain responsibilities that go with the granting of the monopoly. The person or persons having the monopoly are required to give certain services.
Take the case of a railway serving a certain area. They have a monopoly on that form of business in that area, and whether or not it is profitable for them to do so they are required to run trains on that line. There are many branch lines throughout the country on which the railways lose a lot of money but they are still required to run trains on those lines. When they apply for the discontinuance of service on such branch lines in most cases they are turned down. As I say, any monopoly position carries the responsibility of giving service. The government and the wheat board, having a monopoly on the marketing of grain, consequently have the responsibility of taking the grain off the farmers' hands. The farmers have no place else to sell it, and if the government and the board do not take it off their hands they should at least put cash in the farmers' hands in the form of cash advances so that they will be able to finance their operations, eat, clothe themselves and their families and carry on in a normal manner.
I do not think the government can escape from that position. They have a monopoly position in the marketing of grain through their agency, the wheat board, and therefore they have the responsibility of handling the grain. The minister also went on, as several other speakers have indicated, to give us a little lecture and say that we must be careful what we say in criticism of the government and our general wheat position because there is great danger that what we say here may have the result of causing people to refuse to buy our grain, of knocking down the price and so on. I would say the minister cannot have it both ways. Quite frequently

he tells members of the opposition in the house that it does not matter what we say anyway, that we are not going to have any influence and are not going to change matters by a lot of talk. However, that having been his position with respect to a considerable number of matters, I do not think he can now turn around and say: "You must not say a word about wheat because you may ruin a sale or two." In addition, it is a ridiculous position for the minister to take because he knows just as well as I do that the people acting as buyers for other countries know the general wheat and grain situation in the world just as well as we do. Nothing we say here is going to give away any secrets or make any difference in the attitude of people buying grain.
The minister made another statement which I thought was very questionable. He said that the board has not reduced prices and it is still selling wheat. As a matter of fact, the board has reduced prices considerably on the lower grades of wheat. They had large amounts of No. 5, No. 6 and feed wheat which were not selling. As far back as three or four years ago they were urged to reduce the price to some extent so as to place this wheat in a competitive position with barley and oats as a feed grain and they refused to do so. But finally in the last year they did reduce the prices of these low grades of wheat and as a result considerable amounts have been sold. In other words, this is an indication of the fact that, in spite of what the minister says, low grade wheat in any event is still susceptible to the law of supply and demand and that if you reduce prices you can make sales.
That, as I say, has been done, and I am glad it has been done. This move has not yet succeeded in getting a good deal of this low grade grain out of the elevators and thus making room for the better grade crop we grew last year.


Owen C. Trainor: It took them a long time to do it.


Douglas Scott Harkness: As the hon. member for Winnipeg South says, it took them a long time to take this really sensible step and start to get rid of the low grade grain which was clogging the entire marketing set-up.
To sum up the situation briefly, as I see it the loan scheme is completely inadequate to meet the existing situation. The government has admitted its inadequacy by bringing forward another resolution which will be considered shortly, to pay part of the storage costs on grain. In other words, what they have done is to make two stabs at the problem, both very ineffective, instead of looking

at the situation, realizing how serious it was and taking some really useful step in order to solve it.
The next point is that the maximum amount of $1,500 by way of a loan is too small. It is not sufficient to meet the farmer's harvesting expenses and carry him through the winter. Let us take as an example the half-section farmer, not the big farmer but the half-section farmer who had 200 acres in crop last year. It was a good year and we will say he got 30 bushels to the acre. He has 6,000 bushels of grain. In most cases the half-section farmer cannot afford to have his own combine because his operation is not big enough. Quite a number of such people have combines but they do custom work for other people. We will take the more ordinary case where the man does not own a combine. He has to have his grain custom-combined. In my part of the country at any rate it would cost $5 an acre to have the grain swathed and combined. In other words, the half-section farmer had an expenditure of $1,000 simply to have his grain cut and put in his granaries, which would leave him if he got the maximum loan-he probably would not get the maximum with a half-section farm-with $500 for all the rest of his expenses, $500 on which he and his family have to live and with which to put in a crop next spring. The thing is ridiculous. It just does not meet the situation.


Clarence Decatur Howe: It is ridiculous to say the loan was intended to carry a farmer for a year.


Douglas Scott Harkness: I am not saying it was intended to carry him for a year, but certainly it must have been intended to carry him through the winter-


Clarence Decatur Howe: No.


Douglas Scott Harkness: -and to let him eat during that period and get enough money or enough credit to buy oil and so forth to put in his crop next spring. In other words, surely it must be designed to carry him six months because he is not going to get any other income before that time.


Irvin William Studer: Wheat is not the only thing he grows.


Clarence Decatur Howe: He is selling wheat every month.


Douglas Scott Harkness: In a number of cases it is the only thing. If it were not for the fact that the majority of farmers have some livestock the situation would really be disastrous. They would be in a starving situation at the present time. As the hon. member for Assini-boia has said, they would be reduced to eating nothing but their own wheat. Fortunately
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the majority of them have some livestock. There are quite a few who are without any livestock and they are entirely dependent on grain which they produce. As I say, I think there is no question that the amount of the loan is completely inadequate. It is far too small and it will not serve the purpose for which it was intended.


Irvin William Studer: Where do the farmers live who have no livestock?


Douglas Scott Harkness: There are many of them living not far from where the hon. member is situated, right around Maple Creek.


Irvin William Studer: Without livestock?


Douglas Scott Harkness: Yes. The next point is the interest rate. I am not going to dwell on this matter. However, I do not think there is any doubt that interest rates are dependent on the risks involved. You have a government guaranteed loan to begin with. The chances of the wheat not being delivered to offset the loan are remote. If by any chance that happens the government is taking up the slack. In these circumstances a 5 per cent rate of interest is not justified.
The minister himself said that the wheat board borrows money at 3 per cent. In cases like this, if the matter is going to be handled in this way, the interest rate should be down to the same amount, in my opinion, namely 3 per cent. The other great difficulty is that many farmers have not been able to get this loan. That is the information I received. I should be interested in getting from the minister before this debate closes how many farmers have applied for a loan and how many have been given a loan; in other words, what percentage of farmers have been turned down as far as this loan is concerned? I think those figures would be extremely illuminating.
The complete inadequacy of this measure to meet the desperate shortage of cash which exists in western Canada has been quite adequately shown, in my opinion, by the speeches made on this side of the house so far today and during the speech from the throne. I would hope that the government would pay sufficient attention to those speeches to lead them to try to devise something better, or in other words, really to put into effect a system of cash advances such as that which has been urged on them by all the farm organizations in western Canada.


Mr. Tucker:: There are a few points with which I should like to deal in regard to this matter. The first point that I wish to make is in connection with the attempt to indicate that a cash advance on farm-stored grain, though it must be repaid, is not a loan. The fact that the opposition parties, by trying to

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make out that advances against farm-stored grain which must be repaid are not a loan and are equivalent to selling the grain, indicates what a dangerous thing it is that they are advocating. The hon. member for Acadia indicated that in his area there were charges against the grain to the extent of in some cases perhaps 60 per cent of the value. If what is advocated by the opposition were done, and if advances were made against that farm-stored grain by the elevator company on behalf of the wheat board, what you would have would be this situation. When the time came to deliver the grain, the charges would have to be paid to the extent of 60 per cent and those loans would have to be paid to the extent of 50 per cent. There would not be enough to pay actually what was owing on the grain. Who would go short? Obviously the person who would go short would be the wheat board. As no statutory priority could be given to the wheat board, before any cheque could be issued to the wheat board all these prior liens would have to be met. So the farmer would be hauling wheat in to the elevator. He would get nothing for it for himself and there would not be enough to meet the wheat board requirements.


Mr. Johnston (Bow River):: The hon. member for Acadia never said there were liens on it.


Walter Adam Tucker: I want to develop this point.


Charles Edward Johnston: Get it right.


Douglas Scott Harkness: Is this the eastern Tucker or the western Tucker?


Walter Adam Tucker: I notice it is unpalatable for members of the opposition to look at the facts.


Charles Edward Johnston: The hon. member for Acadia never said there were liens on it.


Walter Adam Tucker: I heard what he said.


Charles Edward Johnston: He never said there were liens on the grain and you know that could not have been possible.


Walter Adam Tucker: I know what he said.


Douglas Scott Harkness: Are you speaking as the eastern Tucker or the western Tucker?


Walter Adam Tucker: It is the same thing as a lien, if my hon. friend wants to make any distinction. Provincial law in this matter would apply as against the wheat board. It would not apply as against the bank. There is no use of members of the opposition trying to raise a whole lot of prejudice because the Minister of Trade and Commerce said that

if the matter were handled through the wheat board these prior liens and pledges would have priority over repayment to the wheat board, and that would mean that there would be severe losses. That statement was seized on in a characteristic way by the hon. member for Assiniboia. I refer to the Minister of Trade and Commerce saying that if the loans were made by the wheat board we could not give statutory priority to these advances or loans, and that there would be losses. That statement was distorted by the hon. member for Assiniboia to his saying that the Liberal party were accusing the farmers of being dishonest.


Charles Edward Johnston: That is practically what the minister said.


Walter Adam Tucker: Why do you not listen to what I am saying instead of being so anxious to say something different? Why do you not listen for a little while?


Charles Edward Johnston: You are mixed up.


Douglas Scott Harkness: Two-tongued Tucker toeing the line.


Walter Adam Tucker: The minister pointed out these facts which I think anybody who was ready to recognize the facts must recognize to be the truth.


Charles Edward Johnston: He did not state the facts.


Walter Adam Tucker: Then we are told by the hon. member for Assiniboia something that I was not surprised to hear. First of all, he laid down a false statement that the minister in effect accused the farmers of being dishonest. Then he went on to add, "We will certainly not let the people of Saskatchewan forget that statement".


Mr. Zaplitny:: Hear, hear.


Walter Adam Tucker: My friend the hon. member for Dauphin says, "hear, hear". Those are the accepted tactics of the C.C.F. in western Canada.
As a matter of fact I think the people are getting dissatisfied with these tactics. First of all, there is a smear which has no basis in fact and then they say, "Now just watch out how we are going to make it stick to you". That is exactly what the hon. member for Assiniboia said this morning.


Irvin William Studer: The tactics of Karl Marx.


Walter Adam Tucker: As my hon. friend has just said, they are the accepted tactics of Karl Marx and I am not surprised at the members of the C.C.F. party following them.

Here is another example hinted at by an interruption. My hon. friends are glad to find that there is a Liberal newspaper which has put something on their editorial page about which they are already licking their lips in anticipation of how they are going to spread it all over Saskatchewan with regard to myself. Whether it is well founded or not does not worry the members of the C.C.F. party. Of course consistent with the attitude of Karl Marx which is, arouse hatred; that is the way to get into office. It does not much matter whether it is the right thing to arouse hatred as long as you get into office.
My hon. friends across the way have repeatedly taunted me with regard to the Free Press two-Tucker editorial. I shall therefore deal with it for a moment. Here is an extract from the editorial:
On the afternoon of October 17 the executive of the Liberal association met, 50 strong, in Rosthem. That evening the western Mr. Tucker wired Prime Minister St. Laurent and Trade Minister Howe and, on behalf of the meeting, pressed for cash advances on farm-stored grain.
But the air of Ottawa has caused a strange metamorphosis; . ...


Alexander Malcolm Nicholson: True.


An hon. Member:: Read it all.


Walter Adam Tucker: You can read it all if you want, but I believe it has already all been read in the house. I am pointing out that our executive asked for cash advances on farm stored grain. I ask you, Mr. Chairman, if that is not what this bill provides?


An hon. Member:: No.


Walter Adam Tucker: Let us see what we are actually providing. The banks are authorized to make advances against the grain on the farm, on which there is given a statutory security. When that grain is delivered to the elevator, the agent to whom it is delivered must deduct half of the payment on the grain to repay that advance.
Seme hon. Members: No.


Walter Adam Tucker: My hon. friends say no. I am stating exactly what I understand is provided. This is to be an advance against grain on the farm on which there is a statutory priority, and which is to be repaid out of the proceeds from that grain.


Owen C. Trainor: At 5 per cent.


Walter Adam Tucker: We are not dealing with the interest rate at the moment, if my hon. friend will just keep his mind on one thing at a time. I am dealing with this question that it is alleged our executive asked for cash advances and when I said here in the house that what the government was proposing to
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do was to make cash advances, then I am accused of taking a different stand from what my executive took. My point is that when you say the banks have a right to make an advance against grain on the farm, and if they make an advance they have security on the grain, and when the grain is delivered the debt must be repaid, then you are providing for cash advances against that grain.


Douglas Scott Harkness: You will never make that stick.


Walter Adam Tucker: I may not be able to make it stick, but my hon. friend is rejoicing in the fact, whether or not it is true, that I will not be able to make it stick.


Charles Edward Johnston: Are you differentiating between advances and loans?


Walter Adam Tucker: Advances are exactly the same as loans.


Charles Edward Johnston: The minister does not agree with that. He says everybody who asks for advances is a saboteur of the wheat board.


Walter Adam Tucker: I am dealing with the question as I see it. The minister makes his own speeches. If my hon. friend thinks I have always got to agree with the minister, he is mistaken.


Some hon. Members:: Hear, hear.


Douglas Scott Harkness: Start to show some of that disagreement.


Walter Adam Tucker: My hon. friends opposite say I will not be able to make it stick. They do not want me to get the truth before this house for fear I might make it stick. So far as I am concerned, I was elected to this house 20 years ago. In the meantime, I have been elected twice to the legislature. My hon. friends may taunt me that I cannot make things stick, but my experience with the people of western Canada is this. If you are honest with them, they will give you their support. My hon. friends may laugh all they want, and they have tried very hard to beat me, but I still have faith that the people do support honesty in public life rather than dishonesty. If all my hon. friends can say when I am laying the facts before this house is that whether or not they are facts I cannot make them stick, then is not that coming down to a pretty low point in political life?


Douglas Scott Harkness: We say you cannot make them stick because they are not facts.


Walter Adam Tucker: It is very interesting to me. I can listen to my hon. friends opposite without getting so uneasy that I have to keep yelling at them, because it is my attitude that

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we are reasonable men and I can wait until I make my arguments and leave it to the good sense of the house. I am not afraid to have the opposition present their arguments, but it would look to me as if the opposition were afraid that some advantage they think they are going to be able to reap from this editorial may be taken away from them if I explain it. I wonder if that is their attitude? They jeer that I will not be able to make it stick, even although it is true.
I repeat that an advance against farm-stored grain, on which security is given and which must be repaid with interest, is a loan. Nobody can say anything different.


Douglas Scott Harkness: I do.


Walter Adam Tucker: You can it if you want to, but you will be saying something that is incorrect and it would not be the first time.


Douglas Scott Harkness: We will let the farmers judge that.


Walter Adam Tucker: There again we have the idea that you think you can make the farmers believe almost anything. 1 do not think you are going to make them believe that the Tory party-


Douglas Scott Harkness: You are judging me by yourself.


Walter Adam Tucker: I do not think you are going to make the farmers believe the Tory party is more to be trusted to maintain the wheat board as the exclusive agency for the marketing of wheat than is the present government.
Talk about making things stick. You just try to make that stick out in western Canada. The people of western Canada remember how under a Tory government wheat on the open market was permitted to go down to a point where the farmers were getting 19 cents a bushel for No. 1 wheat. Those are the people who talk to us, those are the people-


Douglas Scott Harkness: Who established the wheat board?


Walter Adam Tucker: Those are the people who say the wheat board should sell more wheat; that it should reduce the price. Yes, those are the people. They do not need to tell the farmers that is a Tory policy because the farmers know it.


Douglas Scott Harkness: Who established the wheat board?


Walter Adam Tucker: If my hon. friend would just keep quiet I would not have referred to the unfortunate record of the Tory party in western Canada because it was not my intention to do so.


An hon. Member:: Is there a Tory party in western Canada?


Walter Adam Tucker: Well, the remnants of it. As a matter of fact, I realize that all the time there is a definite attack upon the wheat board. They are attacked for not selling wheat fast enough. They say the board should reduce the price to get rid of it.
Now then, what would be the effect of that? We have had several years of good crops, but there will be periods again, and history shows it, when we will have short crops. What happened in the past before we had the wheat board was this. The farmer had to market his grain. It was sold on the open market and went into the hands of the speculators. The time came ultimately when the wheat was sold, and when it was sold in years of short crops the speculator got the better price. The farmer who had no wheat to sell did not benefit. It is for that reason I have believed in the wheat board for over 30 years. It is because year after year I saw periods of good crops in western Canada when the price would fall. Then, when we had short crops and the price went up, that did not benefit the farmer but it benefited those who bought the wheat. When there was any danger of oversupply such as there is today, they let the price go down to levels such as were experienced in 1932 when good No. 1 northern wheat was sold by the farmer for 19 cents a bushel.
Now then, so far as the Winnipeg Free Press is concerned, they are entitled to their opinion. They do not like the wheat board as a compulsory marketing agency for Canadian wheat.
I do not mind the Free Press disagreeing with me. In fact, Liberals disagree amongst themselves all the time, and that is the view of that newspaper. I hold a belief that the wheat board is a good thing for the western farmer, and a good thing for the Canadian economy. It is one of the things in which I believe with all my heart and soul. If it means my motives are to be questioned, if it means I may be driven out of public life,
I will stick to the thing in which I believe.
I do not care that much about my fate. Many of my hon. friends rejoice, thinking they have something there which indicates that I was dishonest and they hope to use it against me all over Saskatchewan and particularly in my own seat.


An hon. Member:: Oh, oh.


Walter Adam Tucker: I know that the hon. member for Assiniboia would dearly love to use that against me but I want to say this: so far as I am concerned I have taken a stand which I think is right in this matter. I know they

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will use that against me but it is not the first time I have been slandered by members of the C.C.F. party and I suppose it will not be the last. I do not propose to be deterred from saying what I think is in the best interests of the farmers of western Canada by any threats that have been made against me to the effect that I will be smeared up and that I will not be able to successfully answer their accusations.


An hon. Member:: It was not the C.C.F.


Walter Adam Tucker: I say to every one of you, do the worst in your smear campaign; I rely on the good sense of my people.


An hon. Member:: Hear, hear.


Walter Adam Tucker: Now, then, let me just deal with the facts of this matter-


An hon. Member:: Yes, let us get to the facts.


An hon. Member:: It's about time.


Walter Adam Tucker: I was one of those who attended the marketing conference in Saskatoon from start to finish. I believe that the hon. member for Saskatoon was there for some of the time.


Mr. Knight:: I was there all the time.


Walter Adam Tucker: Well, I was one of those who attended all sessions and the hon. member for Qu'Appelle was another. I think the three of us were the only ones who were there at all times.


An hon. Member:: You are wrong again.


Walter Adam Tucker: I think the hon. member for Prince Albert looked in two or three times.
Now, Mr. Chairman, the marketing conference was called by the interprovincial farm union council and they invited to that meeting the members of the farm unions, representatives of the pools and of the United Grain Growers, representatives of labour, chambers of commerce and so on.
I have in my hand a report of that meeting which was sent to me by the secretary of the meeting and so that there may be no doubt about it, I am going to read the first two resolutions passed at that conference. The first resolution that was laid down was to the effect that the wheat board had the confidence of the people present. The resolution was passed unanimously without a single dissenting voice and it read as follows:
That this conference express its confidence in the Canadian wheat board as a sound method of marketing Canadian grain.
That resolution was carried.
The next resolution concerned advances to farmers and reads as follows:
Motion as amended-
Observe that it was the motion as amended-
Be it resolved that the organizations participating in this conference urge the government of Canada to make immediate provision for advances to farmers on grain in store on the farm, and further that these advances should be up to one half the value of the normal delivery expected and should be repayable on the basis of one half of the value of each delivery made by the farmer.
This was the resolution finally passed by the conference but it was passed-as the hon. member for Saskatoon knows-only after a great deal of discussion and only after a resolution was brought forward representing what many of the farmers would like to have seen done; namely, have advances made through the wheat board. When this was brought forward, I think, by the representatives of the farm unions, it met with opposition. Various objections were raised by some of the people who were present, who said in effect that this procedure would involve the wheat board in the matter and put them in the position of trying to collect back money loaned from the farmers.


Mr. McCullough (Moose Mountain):: The
whole thing was a phony issue.


Walter Adam Tucker: My hon. friend says it was a phony issue, but it was raised at that conference and in all sincerity. My hon. friend seems inclined to take the attitude that no one else but himself is sincere. I find that a most distasteful attitude. I think there were many people at that conference who were as sincerely concerned about the best interests of the farmer as my hon. friend from Moose Mountain. Of course, my hon. friend labours under the impression that only he and his group are honestly and sincerely concerned about the best interests of the farmer. I think that is a most despicable attitude. Among the people who took that attitude were leaders of the pool and they would not raise a phony issue.


An hon. Member:: Now let us talk about the pool annual convention.


Walter Adam Tucker: I will come to that if you will just contain yourself in patience.


An hon. Member:: It will soon be time to quit.


Walter Adam Tucker: I know that you are looking forward to the end of this discussion and I do not blame you. In any event the idea was brought forward that a very strong attack was being made upon the wheat board and that if something was laid upon it whereby it had to absorb losses and had to engage in

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contests in the courts as to what should be done with the money from the wheat delivered to it and had to engage in collection of loans or advances it would involve the wheat board in something it was not set up to do. They said we would prefer that the wheat board be kept as a marketing agency and not be dragged into this field and they said further they did not want their elevator agents dragged into this field. They said they would not want the wheat board engaged in the business of trying to collect debts. This represented the attitude of some of the pool leaders. Finally it was decided to appoint a committee to draw up a resolution which would urge that the government provide for advances and leave it up to the government to decide how it should be done, after hearing any representations which might be made by organizations there represented. That was the considered opinion of this conference called by the farm unions and attended by representatives from all over western Canada including representatives of the provincial governments of Saskatchewan and Manitoba. The provincial minister of agriculture of Saskatchewan supported this resolution.


An hon. Member:: That was a mistake, was it not?


Walter Adam Tucker: Let my hon. friend tell the Hon. Mr. Nollet that.
I would like to refer again to the resolution that was passed. They wanted action from the government-


An hon. Member:: They sure did.


Walter Adam Tucker: They decided it should be left to the government to decide what action should be taken to get money into the hands of the farmers and that it should be repaid. It surprises me to learn that some people think this was not asking for loans to be provided for; how could it not be a loan when it was going to have to be repaid? Who ever heard of the idea that if you sell something, you have to pay back the money which you received when you sold it? My hon. friends are obviously trying to distort the meaning of this resolution.


An hon. Member:: Another phony explanation!


Walter Adam Tucker: You may say that it is a phony explanation but I am, after all, giving an explanation which you cannot answer. You can only try your usual smear tactics.
I am now coming to the editorial. I have described what had happened at this meeting representing the people of western Canada, that they were ready to leave it to the government after hearing from their representatives at the meeting of the various

organizations to decide how it should make provision for the advances-


An hon. Member:: What about the Rosthern resolution?


Walter Adam Tucker: I am coming to that if you will just contain yourself in patience. I met the Rosthern executive about three weeks later. Many present felt they would like to have advances made by the wheat board through the elevator agents. I pointed out to them what had happened at this marketing conference. I had with me the very sheet I hold in my hand and I read them the resolution passed by the marketing conference. I said the reason this conference did not ask for advances to be made through the wheat board was because they received advice from pool leaders and others to the effect that it would not be a good thing for the wheat board to become involved in this matter. I suggested to our executive that as the marketing conference was not ready to ask that the wheat board become involved for fear that it might damage it and as they believed in the wheat board as much as anyone, if this was the considered opinion of some pool leaders I was inclined to pay a lot of attention to it even though at the outset I had thought it would be simpler and easier to have these advances made through the elevator agents from the wheat board. But when I heard pool leaders tell me that this might adversely affect the wheat board I did not think we should go against their advice. I said, what is the government going to do? The government will know what has happened at the conference in Saskatoon. In view of the fact that this marketing conference did not pass a resolution asking for it to be done through the wheat board, in view of the advice given by some pool leaders, I said that I was satisfied that the pool leaders before giving that advice would have been in consultation with the members of the wheat board. I said that I expected the wheat board would be giving the same advice, that they should not be involved in this matter. So I said that as far as our executive was concerned I would suggest that we ask the government to take action as quickly as possible to provide advances being made to the farmer in a way that they thought would be best for the farmer and best for the wheat board.
I explained the thing just as carefully as I am explaining it to this committee. On the strength of my explanation the executive said that they thought I was right in my attitude and that I should draw up a resolution asking the government to provide for advances in such a way as they saw fit, but that I should emphasize the necessity of

those advances being made as quickly as possible because it had been suggested that the government could not provide for advances through the banks or in any other way unless they called parliament together. They said that I should ask the government to act as quickly as possible without waiting to call parliament. That was their attitude.
So I drew up this resolution asking the government to make advances against grain stored on the farm. Because I knew of the advice the government was likely to get from the pool leaders from what they had said at this conference I thought the best thing for me to do was to stress the need for early action and to ask the government to make advances without telling them how to provide for advances. The resolution reads:
Recognizing the urgent pressing need of the farmers for cash to pay outstanding bills for harvesting and other expenses and for food, clothing and fuel before the onset of winter the Rosthern federal constituency Liberal executive ask the federal government to make provision at an early date for cash advances to be made to farmers on grain stored on farms to the extent of up to one-half the value of grain deliveries expected to be made during the current crop year.
That telegram was drafted to ask the government to make advances in such a way as it saw fit. It did not ask that those advances be made through the wheat board.


Frederick Samuel Zaplitny: Will the hon. member permit a question?


Walter Adam Tucker: The hon. member can ask it after I am through. That is the resolution which was passed after a full explanation to the executive. Naturally when I am accused of taking one stand in the west and another stand-


An hon. Member:: Hear, hear.


Walter Adam Tucker: My hon. friend says, "Hear, hear", but he knows that what I say now is true, that I did not take another stand. I have proved that to him.


An hon. Member:: Prove it to the
newspapers.


Walter Adam Tucker: It may be hard to prove to them, but I think I can prove it to them if I have proved it to you. Fifty people attended and heard my explanation. They heard me say that the government was almost sure to act on the advice of the pool leaders and the wheat board because I said the fundamental policy of the Liberal government was not to interfere in any way with the successful functioning of the wheat board. I said that I was satisfied that if they were getting that advice they would set up some system of advances to be made through the banks.
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I explained in the speech I made in this house that that was what had happened at the farm marketing conference.
I want to say to the members of this committee that I am not one who pretends that everything the government of this country does is in accord with what I might like to see done. We are a large country and no one part of the country can dictate the whole national policy. We have to have a national program and the majority must rule. An attempt must be made to take care fairly of all parts of the country. When the government lays down a policy which I think is the best policy for the country as a whole, 1 will support that. I know that some eastern members will support this particular measure although they may get into trouble with their constituents for doing so. It is a national policy and I must support the government that puts into effect policies with which I agree.
I am not ashamed to say that in that connection I follow the party lead. This government has set up the wheat board and it is standing solidly behind it in the midst of this crisis and that policy should have the support of every person in western Canada who believes in the wheat board.
My hon. friends say that these attacks do not have any effect on the situation. I grant that if we had an open market and wheat was always available speeches would not affect prices, but when you have over 800 million bushels of wheat under the control of the wheat board, a government body, and then there is a concerted attack being made upon the government that that board is not doing a good job in selling wheat, that it should reduce prices to get rid of the wheat, possible buyers know that the only thing necessary to be done in order to get cheaper wheat is to have the wheat board waver in its policy, for the government to tell the wheat board that they had better bow to the attacks of the opposition and drop their prices.


Edward Turney Applewhaite: Order. I must advise the hon. member that his time has expired. For his information, may I say that I have allowed him some 90 seconds for interruptions.


An hon. Member:: I knew you would never get to the wheat board resolutions.


Walter Adam Tucker: If you will allow me to go on I will.


Mr. Hees:: Mr. Chairman, I would be the first to admit that we do not grow wheat in Broadview, but last summer I had the opportunity to travel through the western part of this country and I talked to a number of

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elevator operators and wheat farmers. I found that they had quite a problem before them. Listening to the minister this morning I could hardly believe my ears because according to him there does not seem to be a problem. According to the minister, the government is selling our wheat, the farmers are absolutely satisfied and everything is perfectly satisfactory.
So I phoned up the bureau of statistics at noon just to see what our selling efforts had been as compared with those of our competitors. I got figures from the dominion bureau of statistics for the last two crop years and for the first quarter of the present crop year as compared with the first quarter of the last crop year.


Clarence Decatur Howe: Is the hon. member referring to sales or exports?


George Harris Hees: I am referring to export sales; that is what they gave me.


Clarence Decatur Howe: The bureau of statistics have no record of sales; they have a record of exports.


George Harris Hees: It is the actual sales that we made expressed in millions of bushels.


Clarence Decatur Howe: It must be exports.


George Harris Hees: We will call them exports, but I understood they were export sales. They were sales that were made. We shipped the wheat out of the country.


Clarence Decatur Howe: I think my hon. friend should be sure of what he is talking about. Sales are recorded only by the wheat board but exports are a matter of record with the bureau of statistics.


George Harris Hees: All right, I will accept the minister's correction. These are exports of wheat, and wheat flour in terms of wheat, expressed in millions of bushels. Now, I know that the minister will claim that it is not fair to compare our performance with that of the United States and Argentina because United States exports to a certain extent are giveaway exports. I know that the Argentine enters into barter deals with other countries. The minister would claim that we do not want to enter into barter deals of that kind.
Even though the United States has exported 30-8 per cent more in the last crop year than the year before, and the Argentine 21-9 per cent more, we shall not hold that against the government because that is on a different basis from that on which we deal. However, I checked with the officials of his department who are in charge of our sales, with respect to exports made by Australia and France. They have assured me that both Australia

and France sell under the same kind of competitive conditions as Canada, and that it is fair to compare our performance to the performances of those two countries. I am glad the minister agrees.
The figures I got for Canada were that in the crop year 1953-54 we exported 255-1 million bushels, and in the last crop year,
1954-55, we exported 251-8 million bushels, or a decrease of 3-3 million bushels, which is a percentage decrease of 1-3 per cent. Australia in the crop year 1953-54 exported 63-4 million bushels, and in the crop year 1954-55 exported 94-2 million bushels, or an increase of 30-8 million bushels, which is a percentage increase of 48-6 per cent. France in the crop year 1953-54 exported 34 million bushels, and in the crop year 1954-55 exported 83-8 million bushels, or an increase of 50 million bushels over the previous crop year, which is a percentage increase of 250 per cent.
Now let us look at the comparison between the first quarter of the present crop year and the first quarter of the previous crop year. In the first quarter of the previous crop year, 1954-55, Canada exported 73-8 million bushels, and in the first quarter of the present crop year, 1955-56, we exported 59-6 million bushels, or a decrease of 14-2 million bushels, which is a percentage decrease of 19 per cent. Australia exported in the first quarter of the 1954-55 crop year 21-5 million bushels, and in the first quarter of the 195556 crop year 23-2 million bushels, or an increase of 1-7 million bushels, which is a percentage increase of approximately eight per cent. France exported in the first quarter of the 1954-55 crop year 10-2 million bushels, and in the first quarter of the present crop year 16 [DOT] 1 million bushels, or an increase of 5-9 million bushels, which is a percentage increase of 58 per cent.
As I have said, I believe the minister will agree it is perfectly fair to compare the performances of France and Australia with that of Canada, as all three of us are selling under the same competitive conditions. Yet in the past crop year we exported 3-3 million bushels less than in the previous crop year, whilst the other two countries between them exported 80-8 million bushels more than they did in the previous crop year.
The same performance took place in the first quarter of this crop year. Canada dropped by 14-2 million bushels, and the other two between them have increased by approximately 7 * 6 million bushels.
That shows that our selling effort is not what should be expected of this government. Other countries working under the same competitive conditions as Canada have sold considerably more wheat during the Dast crop

year than in the previous crop year, and that
increase has been maintained into the first quarter of the present crop year. This shows that somewhere Canada is falling down. We are not as aggressive or for some other reason we are not making the sales. We are selling less wheat, whilst other countries working under the same conditions are selling more wheat.
Therefore the government is very much to be condemned for allowing competitors to beat us right across the board while our sales are dropping off. That is the kind of performance that would cause a sales manager to require a very good explanation from a salesman; if it was not forthcoming, the salesman would be out of a job. The Canadian people, especially the wheat farmers of Canada, have a right to demand an explanation for that very poor showing from this government.
The other thing that impressed me when I listened to the minister this morning was that it seemed, according to him, that the western wheat farmers are perfectly satisfied, first of all, with the selling efforts of the government and, secondly, with the bank loans which have been arranged by the government for them at 5 per cent. The best way to find out what the people think about something is first of all to go out and talk to them, which I did this fall, and secondly to have a report of a meeting where a representative group gathers and expresses its opinions. That I have here in my hand.
This is a report given of a meeting held in Minnedosa, Manitoba, in the middle of November, attended by no less a person than the genial Minister of Justice. According to this report, it was quite a meeting. As the Minister of Justice will assure the Minister of Trade and Commerce, you would not find anywhere a finer group of people than you find in Minnedosa. I had the privilege of being there last summer and the year before and I talked to many of these people. I am sure the Minister of Justice will back me up when I say that these people are good wheat farmers. This is an average wheat farming community in western Canada, and the people who live in that community and who attended this meeting-I am sure the Minister of Justice will correct me if he does not agree completely with what I say-the people who attended this particular meeting in large numbers were some of the finest people you would find. They are fair-minded, they are calm, collected, reasonable people, wanting only a square deal and asking nothing special from anybody. All that they ask is fair treatment.
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Hazen Robert Argue: They used to vote for the government.


George Harris Hees: This report I have here which appears in the Minnedosa Tribune of Thursday, November 17, is headed "Garson Gets 'Hot Potato'; Western Farmers Hostile." It states:
The honourable Stewart Garson (Minister of Justice, Lib. M.P. Marquette) had hold of a hot one on Thursday night when he stood on the stage of the Legion hall in Minnedosa following the presentation of the brief and his talk to the audience.
For a period of three hours Mr. Garson parried questions hurled at him from the floor. Although, to the casual observer, these questions may have appeared to be merely a means to trip up the cabinet minister, they were questions of vital concern to the farmers of Minnedosa area as well as the farmers across western Canada.
One of the questions that came up continually was that Canada seems to be so critical of U.S. grain selling program, but what has the Canadian government to offer in its place?
Mr. Garson said that Canada hasn't any program that she can lay her finger on at the present time.
Then I go on to a little later in the meeting and the report has this to say:
Mr. Rudolph Usick took the floor again and reiterated that as yet Mr. Garson hadn't answered the question of what was going to happen. He read from various news clippings indicating that there was a solution to the problem if the government wished to look for it.
Mr. Garson remarked that Mr. Usick should be on the wheat board at an attractive salary if he knew the answers. He asked Mr. Usick if he thought the wheat board hadn't studied all these proposed solutions. The wheat board has proven in the past that it can get rid of the grain. Unfortunately it is bucking the American giveaway program. But if the farmers will only have patience and not make the situation worse then something will turn up. Mr. Garson again admitted that there was no solution at the present time but feels that with Mr. Howe at the head things will turn out all right.
That is the kind of answer that was provided to the questions which these people were very rightly asking. A little later in the meeting the newspaper report has this to say:
Spokesmen for the farmers ridiculed the farm loan which got great approval from the audience. Mr. Garson was asked how he would like to go to the bank and borrow his salary at 5 per cent interest.
That is a very good question and I should like to hear the answer.


Hazen Robert Argue: He would certainly have a lot of interest to pay.


George Harris Hees: I continue:
In the eyes of the farmer that is what it amounts to. He has to pay interest on his year's labour. Herbie Schulz said that there was no criticism of the wheat board but that the present crisis was the direct result of government bungling. The government has tied the wheat board up in a straight jacket as far as invoking any system that

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will move grain. He said that the Canadian government is going all out at every turn-


Clarence Decatur Howe: On a point of order, is it in order for an hon. member to read the expressions of people outside the house and, more than that, is it in order to read pages of a newspaper in a debate of this kind?


Hazen Robert Argue: The cabinet does it all the time.


Edward Turney Applewhaite: On the point of order raised by the minister, I do not think there is any question that the editorial does not conflict with the rules of the house in that it does not comment on the proceedings of the house. But there is, as I think the hon. member for Broadview will agreee, if not a provision at least a series of Speakers' rulings against the reading of lengthy editorials so that the speech becomes the speech of the writer of the newspaper article rather than that of the member who has the floor. I think the hon. member is quite capable of expressing his views in his own words without too much assistance from newspapers.


George Harris Hees: Thank you, Mr. Chairman. This is not an editorial. This is simply a straight news report, and I am almost through. The reason I am reading it is that I think it expresses very clearly to the house the feelings of the average wheat farmer about what the government is doing and not doing. It is for that reason and that reason alone that I am reading it, and I will be through very shortly. The report goes on to say:
With regard to the cash loans he said it was an insult to the integrity and industry of the Canadian farmer. Another young farmer wanted to know what he was supposed to do come spring. The cash loan is based on the amount of bushels of grain one has. He figures he could borrow $1,300. When he sells his grain, one-half of this goes back to the bank, leaving him a surplus of $650 which is debt. How does the government expect him to live and put in a crop on that?
That again is a very good question, and again it remained unanswered by the minister. The report continues:
These types of questions carried on until 1.00 a.m. before the 600 audience that packed the hall.
I read that, Mr. Chairman, simply to show how good, sensible, reasonable Canadian western wheat farmers feel about what the government is doing and is not doing. They are incensed about what the government is doing.


Clarence Decatur Howe: What is your opinion? You are talking about sensible people but we would like to hear your view as well.


George Harris Hees: They consider it an insult. They do not consider what the government is doing

to be in any way satisfactory, and for that reason members of this house have a perfect right to stand up and demand that the government not only sell our wheat but also that until they have sold it they make available cash advances without interest to the farmers who are being victimized by the government's complete failure to sell our wheat at the present time. There is no excuse for the government not selling it. Other countries working under exactly the same competitive conditions have been able to go out and make very important increases in sales in the past year. The reason the government has not done so is that they seem to have lost their knack of selling, if they ever had it, and it is about time they took some lessons in how to sell, got out and sold and helped the farmers instead of sitting back and doing nothing about it. I certainly hope the minister will do just that.


Mr. Bryson:: Mr. Chairman, I think we all witnessed a very amazing performance a few minutes ago by the hon. member for Rosthern. It seems a very strange thing to me that all of a sudden the hon. member has blossomed out as the great champion of the government so far as this legislation is concerned. I do not know how to account for this thawing-out process, but I can assure the house that when this issue was being debated throughout western Canada last fall the hon. member for Rosthern and his colleagues in the Liberal party in Saskatchewan were in a deep freeze out there and we did not hear very much from them. I am not too sure whether or not it is the warm weather down there that has been a contributing factor in that thawing-out process.


Walter Adam Tucker: On a question of privilege, the hon. member for Assiniboia can tell my hon. friend that there was no concealment of my views because the hon. member for Assiniboia and I had a debate on the matter before the students of the University of Saskatchewan and there was no attempt to conceal my position at that time.


Hazen Robert Argue: It was as transparent then as it is now.


Hugh Alexander Bryson: I heard the speech and I did not think it was even worth considering at this point. I suppose I should rise with some temerity to take part in this debate in view of the pointed threat made by the Minister of Trade and Commerce this morning to the effect that debate on this legislation should not be carried on by the opposition for any length of time. I should like to say at the outset that I am not only taking part in the debate to express my own objections to the legislation but I am also taking part at

the express request of the many thousands of farmers who reside in my constituency and who have made it known to me in no uncertain terms that I am to put forward their objections to the legislation at every opportunity.


Clarence Decatur Howe: Are you going to vote against it?


Hugh Alexander Bryson: The resolution before the house, which will of course ultimately become government legislation, is the answer the government has given to the very real and critical problem which the farmers of western Canada are grappling with today. That problem is the shortage of cash brought about because of their inability to market grain and grain products. There are a good many reasons for this shortage of cash, not the least of which is their inability to market their grain products.
I am not going to take the time of the house to place on the record once again all the reasons which have already been placed there so ably by opposition members during the throne speech debate why farmers find themselves in their present position, but may I say I think there is something very sinister in this piece of legislation, something we do not see on the surface of it. This legislation confirms a suspicion widely held on the prairies that a very peculiar situation is arising in this country. That suspicion is that the government has lost touch and has lost interest in what is happening to that section of Canada. If this situation is going to continue it will in the end spell disaster for the future economy of this country. Apparently this government-and this is the view widely held in western Canada-has become obsessed with the idea that almost overnight we have blossomed into an industrial nation and that our economic prosperity in this country is no longer dependent on our agricultural industry. As a matter of fact, in so far as western agriculture is concerned, they view it as a sort of necessary evil, an embarrassment, and one for which this government is obliged continually to apologize to the rest of Canada. This resolution goes a long way towards confirming that suspicion which is held by so many people in western Canada, and I think it is disastrous.
Prior to the introduction of this legislation meetings were held in virtually every school-house and community hall in western Canada in an effort to bring to the attention of this government the fact that a serious situation had developed and that something must be done to restore to farmers in western Canada the purchasing power which they had lost. They asked for cash advances as the only reasonable and feasible method by which
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that purchasing power could be restored. While I admit-as do most people out there- that the government has lost touch, I should like to take a few moments to review some of the events-and only briefly-that finally led this government to acknowledge that there was a problem in western Canada. Certainly I am not going to burden the house with an account of the dramatic part that was played by the leader of the Liberal party in Saskatchewan. The part he played had all the ingredients of a mystery thriller. I refer to his safari to Ottawa-and the cloud of mystery that surrounded that trip-with his little black bag under his arm in which was deposited his secret formula.


Irvin William Studer: Like the socialists' trip to Washington.


Hugh Alexander Bryson: I am glad to note that the hon. member also has become quite vocal on this question. We are going to look forward to a speech by the hon. member for Maple Creek, knowing before he makes it that it is going to be extremely hard to listen to. I am not going to say anything about the profound pronouncement that was made by that same gentleman when he returned from Ottawa. These are things which all of us would like to forget, including the leader of the Liberal party in Saskatchewan. The Americans have their ballad of Davy Crockett. We in Saskatchewan have the drama of Hammy McDonald. What is more important are the visits-and the statements that arose out of those visits- by the Prime Minister, the Minister of Trade and Commerce and the Minister of Agriculture. They were like Caesar. They went; I do not know what they saw; and they made speeches. Reluctantly they admitted that there was something wrong. As an example, the Minister of Agriculture, speaking in Edmonton, had this to say. He admitted there was something wrong but he said, "I have the answer but it is not cash advances. We need a million more people". He said that we need a greater population because we need industry but he said that we cannot get industry until we get a dam on the south Saskatchewan river. I hope the farmers of western Canada are not obliged to wait that long before some further purchasing power is returned to them.
Then we had the speech of the Minister of Trade and Commerce when he spoke to the Alberta wheat pool convention in Calgary. After making a prolonged speech he said in effect at the very end: "Farmers of western Canada, take courage. Next year you might have a crop failure." The upshot of it all was simply this. In spite of all the representations that had been made by the business and farm leaders in western Canada after they had

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considered every angle of this situation and had come out in favour of cash advances, this is what happened. Instead of listening to them and taking their considered advice, this government took the advice of a sprinkling of Liberal stooges within these organizations rather than the considered opinion of these people who truly represent the farmers and the business men of western Canada.
Then when this legislation was being proposed; when we knew that this was what we were going to get; when we knew that the government as going to reintroduce the 1951 legislation which is sometimes referred to as the agricultural interim financing act, we had once again another series of meetings, this time protesting the so-called bank legislation which was being introduced. I was greatly surprised and not a little shocked the other day when I heard the Minister of Trade and Commerce say to the members of the House of Commons that the business men in western Canada were carrying on some kind of conspiracy against the farmers. He said, "My, how they would like to get their hands on this money!" In other words, he was casting doubt as to the motives of business men. That is a typical Liberal trick. When the Minister of Trade and Commerce is obliged to defend this legislation by using tactics of this kind-tactics that we would expect to come from a Liberal back bencher -it is fairly evident to me that this resolution, in so far as any merit it may have, is as barren as a mule.
After all, why should not the business men in western Canada be concerned that the purchasing power of the farmers should be restored? We know that the future prosperity and the future existence of business people scattered throughout the towns of western Canada are dependent on the prosperity of the farmer. By the same token, the farmer is just as dependent on the business man. In western Canada today-as has been stated here in this chamber today-we find the business man carrying a terrific burden of debt and carrying a great many farmers because he knows that their interests are mutual. Hence when we have statements made in this chamber that a conspiracy is going on and that the end result in all probability will be the end of the wheat board, I think that is ridiculous. I think there is a conspiracy all right, but the Minister of Trade and Commerce has named the wrong people.
I would make this statement. I believe that there is going on in this country a conspiracy to wreck the wheat board and that it is being spearheaded by this Liberal government in co-operation with the Winnipeg grain exchange. I am convinced-as are a great many 
other people-that the marketing policies being advocated and carried out by this government have done more to undermine the farmers' confidence in the wheat board than have all these other things to which the Minister of Trade and Commerce referred. We are now confronted with this same legislation which proved to be so ineffective in 1951. Certainly assistance was needed then as the minister pointed out today in his speech. But in spite of the fact that it was needed only $626,000 out of $20 million that was guaranteed to the banks was used not because people did not need it, but for the very simple reason that they could not get it.
What is the condition of affairs today? We are in much greater need of money today than we were in 1951. In my province the cash farm income in the first 10 months of 1951 amounted to $631 million. What is it today? In the first 10 months of 1955, the cash farm income in the province of Saskatchewan was only $283 million. Of course, if you add the $21 million that was paid out in P.F.A.A. benefits, which should have been paid out the year before, then it brings it up to about $305 million, which is only half of what it was in 1951.
Let us take a look at the principle of this bill. Let us take a look at the mechanics provided for implementing the principle of this bill. Well, it is wrong on both counts. Mechanically, it is impossible to implement the provisions of this bill, and in principle it is wrong because it has no morality in it. If a comprehensive statement were to be made incorporating all the views protesting bank loans, I am sure such a statement would clearly indicate that it is a disgrace and an insult to ask farmers to pay interest on loans against their production when they have no responsibility whatever for the inadequacy of marketing policies which apparently make it impossible to sell our grain in the markets of the world. What I have said is, in substance, the preamble of a resolution presented by the federated co-operatives to this government, an organization that speaks for 150,000 farmers in Saskatchewan and Manitoba. They came out flatfooted and asked for interest-free cash advances on farm stored grain.
I have often wondered, Mr. Chairman, what would happen if at the end of a week a worker in any other industry went to the boss and said, "I want my week's pay". The man at the wicket saying "I am sorry but we did not sell as much of the products you produced last week and we cannot pay you, but I tell you what we have done. We have made arrangements with the banker on the comer and if you can answer the questions he is

going to ask you about your business and provide the necessary security he might consider giving you part of your wages but you will have to pay 5 per cent." I leave it to the imagination of members in this house as to what would happen. The worst feature of all is the fact that the farmers, after working all year and after producing what is after all the basic wealth of this country, have now to go cap in hand to the bank and ask for a loan. After expending their labour, after expending their capital, they now have to go cap in hand and ask for a loan.
Those are the arguments, Mr. Chairman, against bank loans. Those are the arguments in favour of cash advances. What about the practicability of implementing this measure? As was said this morning, there are only 350 chartered banks in the whole province of Saskatchewan. I imagine the same condition prevails in other provinces as well. There are just as many farmers who never bother with a bank as there are who do business with the bank. The banker is in an impossible position.
I should like to point this out, Mr. Chairman.
I have talked to a good many bankers in my constituency and I have yet to have one of them tell me that he has made a single loan with grain and nothing more as security. The form the farmer is asked to fill out is not the only form he is asked to sign. The banker is in an untenable position.
What is he going to do? I will tell you what he is going to do. He is going to go to the elevator agent, as many bankers are doing, and hold a conference with the elevator agent concerning the circumstances surrounding a man's farming operations before he can honestly make a loan. That is what is happening. What then is the bank doing for the 5 per cent interest? I am not even sure they are providing the form which the farmer is asked to fill out. They do not even have to collect the money. That is the argument that was used against cash advances, and why the government said cash advances were not feasible. The elevator agent should not be loaded with the responsibility of carrying out the provisions that would be necessary, yet today we find the elevator agent is doing the very thing the government said he could no do.
I should like to read into the record the provisions for repayment. I will only read part of it. Two tickets have to be made out. The first ticket, that is to the producer, should show the details of delivery and the deduction of one-half of the net proceeds payable to the bank. The second ticket, for the remaining half of the net proceeds, should be made payable to the lending bank and should be forwarded to the bank. The
Shipment of Aircraft to Middle East elevator agents in effect are now being used as the collecting agency for the chartered banks, and at no remuneration from the bank.
Mr. Chairman, may I call it five o'clock?
Progress reported.



PRIVILEGE


Clarence Decatur Howe: On a question of privilege, Mr. Speaker, I should like to correct a misstatement I made through carelessness. I am reminded by a question addressed to the Prime Minister (Mr. St. Laurent) this morning that on January 4 I referred to an order in council which conveyed approval of the shipment of Harvard training aircraft to the Middle East. I had in mind that orders in council were required for every export shipment, but that is not the case. They are required only in case government property is concerned. In the case of an export permit relating to private property, if it has anything to do with military affairs or if it is going to a sensitive area, ministerial concurrence is required by the ministers of external affairs, defence and trade and commerce.
The sale of the Harvard aircraft was a private transaction. No government property was involved. There are minutes of the concurrence by the three ministers but there was no order in council. I wish to make that clear because I not only misled the members of the house but I misled the Prime Minister. My officers have since pointed out the incorrectness of the statement that I made to the house.


Mr. Green:: Could the minister say on what dates the approvals were given by the respective ministers?


Clarence Decatur Howe: On the 7th July, 1955.


Howard Charles Green: By all three ministers?


Clarence Decatur Howe: Yes.


Stanley Howard Knowles: Perhaps the minister would also wish to correct his statement as to the date on which he made the misstatement? We were not sitting on January 4.


Clarence Decatur Howe: January 24.


William Earl Rowe: You are only 20 days out; that is not too bad.


Clarence Decatur Howe: My memory is not as good as it was when I was 20 years younger.

Small Loans Act SMALL LOANS ACT



AMENDMENT TO PROVIDE FOR A REDUCTION IN RATE OF INTEREST

[Stage Direction]
The house resumed, from Thursday, January 26, consideration of the motion of Mr. Argue for the second reading of Bill No. 3, to amend the Small Loans Act.
Mr. Claude Ellis (Regina City):: Mr. Speaker, I rise in support of Bill No. 3 dealing with the proposed amendment to the Small Loans Act and to express first of all my disappointment that the parliamentary assistant to the Minister of Finance saw fit to adjourn the debate yesterday. One of the reasons given for doing so was the fact that the government is bringing forth some legislation along similar lines during the present session. However, I would remind the house that this bill was placed on the order paper last year by the hon. member for Assiniboia (Mr. Argue). I feel that a great deal of worthwhile discussion can result in a clarification of the issues before this house with respect to this legislation. The fact that the government has announced its intention to bring in legislation on this subject is in no way a guarantee that we are going to have the type of legislation which we want at this time.
I think there is no need to stress the importance of this matter in Canada today. The hon. member for Assiniboia reminded us yesterday that the amount of credit in this country has more than doubled in the past four years and that according to recent figures the amount of debt in Canada is well in excess of $2 billion.
The high interest rates charged by the small loan companies, of course, bear most heavily on the low income groups in Canada. It is quite obvious that wealthy individuals can pay cash for their purchases and if they find themselves short of cash at any given time they are able to go to the banks and borrow money at one-quarter the amount of interest charged by the small loan companies. Therefore, when we discuss this bill we are discussing a matter that comes very close to the small wage earner in this country.
I think we should for a moment examine briefly the various factors entering into the establishing of interest rates in Canada. Quite apart from the ordinary costs of doing business the profits of the loan companies play a very large part in this matter. Figures were placed on the record yesterday which showed that there had been an increase of over 1,000 per cent in the profits of companies doing business during recent years 
and certainly the small loan companies cannot argue that a reduction in the interest rate is going to force them out of business.
The small loan field is a most lucrative one and we need only listen to the commercials which they sponsor on the radio encouraging people to borrow money from "a friendly finance company" to find an indication of the great amount of effort the small loan companies exert in order to attract business. In other words, it is not a case of their doing an individual a personal favour. They spend lots of money in advertising designed to persuade people to take out loans for the obvious reason that lending money is a profitable business. Any suggestion that there might be a curtailment of credit owing to the revision of the interest act is certainly not valid.
The question of risk is another matter which we should examine closely. The inference is left that the excessive or exorbitant rates charged by small loan companies compensate for the vast amount of risk they undertake in lending money. The very fact that the small loan companies have set aside only -26 of 1 per cent to cover losses on their operations indicates that the amount of risk involved is not as great as they would have us believe. We know, moreover, that the experience of the Canadian Bank of Commerce in this field leads us to a similar conclusion since they feel that -25 per cent is quite adequate to cover any losses which they might sustain. As a matter of fact, if one looks more closely at the personal loan plan of the Canadian Bank of Commerce one finds that since the inception of the plan in 1936 until October 31, 1953, the Canadian Bank of Commerce loaned a total of $248,461,909. These figures are contained in the report of the banking and commerce committee of 1954 at page 186. The total loans written off during that period amounted to $380,378 but there was an amount subsequently collected of $157,058 which left a net loss incurred by the personal loan plan of the Canadian Bank of Commerce of $223,320 in the period 1936 to October 31, 1953.
This amounts to less than one-tenth of 1 per cent of all the money loaned during that period by the Canadian Bank of Commerce. Under those circumstances it is difficult to understand why exorbitant interest rates should be charged by the small loan companies in Canada because if one examines the risk element incurred by the Canadian Bank of Commerce and compares it with the risks involved in the small loan company field we find there is very little difference. As a matter of fact, one will recall that prior to

1954 the banks were not permitted by law to back loans by chattel - mortgages. We know that on the basis of guarantees and endorsements-and we must consider the fact that a great deal of this money was loaned during the late 1930's, during the time of the depression-the banks suffered an almost negligible loss.
Once again I am going to refer to the 1954 report of the banking and commerce committee. The committee was informed at that time that the total secured loans of the small loan companies as of December 31, 1952, comprised 70-92 per cent of the total loans made and that the unsecured loans totalled 29.08 per cent. Comparable figures for the Canadian Bank of Commerce indicate that the bank had total secured loans of 60-35 per cent and a total of 39-65 per cent unsecured loans. It is quite easy to see that the small loan companies are taking no greater risks than those taken by this chartered bank.
Under these circumstances it is extremely difficult to understand why the small loan companies in this country should be permitted to charge such excessive rates of interest. I am concerned with the effect that the lowering of interest rates for small loan companies would have on consumer finance generally throughout the country. Perhaps more goods are financed or purchased on instalments, the purchases being financed by the firms involved; but as the hon. member for Assiniboia (Mr. Argue) pointed out yesterday, these rates are even more excessive.
We are told of 54 per cent being charged by a large mail order house. When I heard that figure given I found it difficult to believe that that much interest could be charged, but I turned to the catalogue of a leading mail order house-whether it is Simpsons-Sears or Eaton's does not matter-and according to the table published there I find that if you buy a $20 item to be paid for at the rate of $5 per month for four months there will be a carrying charge of $2.25.
The only way to arrive at the proper rate of interest in that case is to consider the transaction as a series of $5 loans to be repaid at monthly intervals. Thus we find that at the end of the first month the purchaser pays $5; in other words, he has had the use of $5 for one month. At the end of the second month he pays another $5 and in that instance he has had the use of that $5 for two months; at the end of the third month he pays another $5 and he has had the use of that $5 for three months. When he repays the loan with the fourth $5 payment at the end of the fourth month he has had the use of that last $5 for four months. In 67509-41
Small Loans Act
reality he has borrowed $5 for ten months, and that figures out at 54 per cent interest being charged by the large mail order houses in this country.
Under those circumstances I think it is quite evident that any general reduction in interest rates in any field will have a beneficial effect upon the rates throughout the whole field of consumer finance. In other words, a reduction in the rates of interest charged by small loan companies will force other consumer credit organizations to make a downward revision in their rates.
But the vicious part of the whole set-up is the fact that the people who can least afford the burden of excessive interest charges are the people who are forced to bear them. Under this iniquitous system it is the small purchaser buying the $20 item who must pay the 54 per cent interest. If he buys a $30 item the interest rate goes down. In other words, the bigger the amount of the purchase the lower the rate of interest.
While I realize that we are not concerned in this bill with the carrying charges of large retail organizations I do suggest that the passage of the bill with the consequent reduction in the interest rates allowed to be charged in the small loans field would of necessity bring a downward revision in the whole field of consumer finance. We have to recognize the fact that credit plays and will play an important part in our economy. There are those who may argue that people should save sufficient money to make these purchases, but I invite hon. members to consider the economic consequences of pursuing that line of reasoning.
I am quite certain that the average merchant in Canada depends to a large extent upon time sales in order to sell his goods. A great many people in the low-income brackets in Canada would never be able to afford what we have come to regard as the amenities of life if they could not buy on time, or else borrow money from small loan companies in order to buy the article outright.
We have no idea of the nature of the legislation the government proposes to bring down, but I think this debate will serve a most useful purpose if hon. members are able to impress upon the government the necessity of bringing about a reduction as outlined in the bill we are now discussing. If we are going to permit the charging of excessive interest rates we must justify our action in the light of the facts. I think I have said enough this afternoon to indicate that neither the profits made by the small loan companies nor the risks involved are justification for charging a rate of 2 per cent per month on the unpaid balance.

Small Loans Act
I have not heard a cogent argument as yet as to why we should persist in forcing that rate of interest on the people of this country. In the small loans field it is the small wage earner, the little fellow, who borrows, and I think this is one way in which we as a parliament can give some measure of relief to the people who are in greatest need.


Wilbert Ross Thatcher: Mr. Speaker, this bill is similar to one introduced last session by the same hon. member. I am not going to comment upon it at length as I intend to wait until the government's legislation is before the house. However, I do want to take this opportunity to make certain comments in connection with a meeting called by the hon. member for Rosetown-Biggar (Mr. Coldwell) in my constituency shortly before the last session of parliament ended, and at which he mentioned the Small Loans Act. The hon. member for Rosetown-Biggar came to Moose Jaw and held a meeting in our technical school auditorium. He made a number of charges against me, in which I know the house would not be particularly interested. Perhaps I am biased, but I felt that most of them were incorrect. There was one in particular which I should like to mention now. I should like to quote from a report of the meeting which appeared in the Regina Leader-Post as follows:
Mr. Coldwell cited Thatcher's differences of opinion and said that when the C.C.F. party attempted to introduce measures to reduce the 24 per cent interest charges of small loan companies, to 12 per cent, Mr. Thatcher was directly and emphatically opposed to such a move. He contended, according to Mr. Coldwell, that the loan companies could not operate, and people would not be able to borrow money to buy washing machines and other articles on time.
People who were at the meeting told me ;hat the hon. member went on to intimate that I was vigorously opposing this legislation, because I knew that if it passed I would not be able to sell merchandise from my hardware store.
What are the facts? I wish to say most emphatically-I have Hansard of the debate which took place-that I never commented on this particular bill at any time since I came to parliament. Page 3535 of Hansard of May 6, 1955, shows that the hon. member for Assiniboia (Mr. Argue) introduced the bill. It was then spoken to by the hon. member for Kenora-Rainy River (Mr. Benidickson) and a few days later, by the hon. member for Peace River (Mr. Low) and a member from British Columbia. There was no vote taken. I say that either the hon. member for Rosetown-Biggar had a research assistant who did not do his homework thoroughly, and who passed on information which was

not correct, or he deliberately misrepresented the facts. If he was guilty of an error, then I would ask him publicly to apologize. If he was not, I say again that he very unfairly misrepresented the facts. This was only one of a number of charges which the hon. member made on that occasion. Later in the session I hope to refute some of the others. I say again that I think the hon. member, in coming to my constituency and taking a meeting when I was not there, should at least have stuck to the facts.


Mr. Speaker:: The house will realize that, when the hon. member referred to the hon. member for Rosetown-Biggar and said that he had deliberately misrepresented certain facts or had unfairly made certain statements, I did not intervene, although some hon. members looked in my direction, because he was referring to words that were pronounced outside this house. I wish to state that if the statements referred to had been made in this house and if the hon. member were to use the same language, I would have immediately asked him to withdraw.


Wilbert Ross Thatcher: I am sorry if I did not make myself clear. I said that either one of two things must have happened. Either he must have been labouring under a misapprehension, in which case I would ask him publicly to apologize, or he was misrepresenting the facts. It must be one or the other. This is the newspaper clipping. If he has made an error, I would be glad to accept an apology and then the matter can be ended.


Mr. Colin Cameron (Nanaimo):: There is an aspect to this proposed legislation that has not yet been touched upon, one which came to light two years ago before the banking and commerce committee. I refer now to the proceedings of that committee as set out on page 1071 of the report of those proceedings on Thursday, April 8, 1954. On that occasion the committee had been discussing the operations of the personal loan department of one of the chartered banks. The general manager of that bank was before the committee as a witness. The hon. member for Eglinton (Mr. Fleming) asked him this question:
Q. May I ask you if the Canadian Bank of Commerce has been asked to extend loans to small loan companies since going into this operation?
That referred to the personal loan operation. The answer was:
A. We have small loan companies who borrow from us. On our books we have a number of customers.
Q. Has this operation affected the business you have done with those small loan companies who were your customers?
A. Yes.

There was a further question:
The next question was:
Q. Favourably or otherwise?
The general manager made this reply:
A. We have lost some accounts.
That particular exchange at that time brought to my attention-though I suppose it should not have been necessary-one aspect of the operations of these small loan companies that had not occurred to me, and that is that they are in effect retailers of a commodity that is wholesaled to them by the chartered banks:	the commodity of
credit. If we are to assume, as I think we have the right to assume, that these companies in all probability obtain their funds from the chartered banks at between five and six per cent or possibly at a much smaller percentage, and in return retail them at rates approaching 24 per cent, we see that the mark-up on this commodity is in the neighbourhood of 400 per cent.
I suggest that we should look very carefully into this situation. The chartered banking system of Canada holds a position in our economy that is perhaps unrivalled by the banking system of any other country. It has complete control of the operations of our commercial banking system. It has explicit and implicit protection and support from the government, and the experience of one of the chartered banks in entering into this very necessary field would seem to me to indicate that it is a field in which the chartered banks should be encouraged to enter more readily than they have done in the past.
I was particularly interested two years ago when Mr. Neil J. McKinnon of the Canadian Bank of Commerce, in making his presentation in support of the request for an amendment to permit the taking of chattel mortgages, said that at the outset of their operations in the personal loan department they had required the signatures of two guarantors for every loan. Later this was reduced to one endorser, and in recent years 40 per cent of their loans had been made without any endorsation or guarantee whatever. This would indicate that this business is a comparatively safe one for the banks to engage in. I believe we should give encouragement to the banks already officially and openly in the business and also encourage the other chartered banks to follow suit. I know of no better way to do that than to reduce the enormous mark-up, as I have described it, now charged by the private loan companies on the funds they receive from the chartered banks for their business purposes.
67509-41J
Small Loans Act
Admittedly, the operations of this particular bank in the personal loan field have not been as extensive as one might have wished and have not been as extensive, I rather gather, as the general manager himself would have wished. During the hearings of the banking and commerce committee, I had a suspicion in my mind that there had been, if not opposition, at least rather lukewarm support for this program on the part of the bank directors, because the general manager informed us he was not at all satisfied with the extent to which they had advertised this particular service. I myself remarked that I was surprised to hear of it, as I had been a customer of that bank for a number of years and I myself had never come across any advertising or any literature on the subject of their personal loan department. It was in reply to that comment Mr. McKinnon admitted that they had been in his opinion far too conservative in their program of advertising.
I think we have in this country a banking system of sufficient size, sufficient diversity and sufficient flexibility to enable it to undertake this very necessary function for the Canadian people. I would feel much happier if I knew that those who are in need of immediate short-term financial help on a small scale were able to go to the chartered banks rather than to these organizations, which presumably are quite financially sound, but which, on the other hand, are springing up all over the country and by means of their exorbitant interest rates are putting shackles around the necks of too many of our people today. So it is with great emphasis that I voice my support for this long overdue piece of legislation.


Robert Ross (Roy) Knight: Mr. Speaker, there is one idea I should like to advance, and I think only one. My hon. friend from Assiniboia has already covered the purpose of the bill. He has stated that the object of this bill is to reduce the maximum rate that may be charged by small loan companies from 24 per cent to 12 per cent.
My idea relates to the methods of advertising. In some cases they are nothing short of dishonest and vicious-and those are two words that for me are rather strong. I would point out that in the case of the wrapping of bacon we made it illegal-the Minister of * Justice will probably correct me here, but at any rate there was an understanding that those people would no longer wrap their bacon, fat or otherwise, in red tinted wrapping paper. That restriction has become effective. It is a case of what I call dishonest advertising. If that was one then certainly here is another. As a matter of fact, I do

Small Loans Act
not think I would characterize the sample I have in my hand in that way. This one is pretty decent compared with most. In fact it is rather pleasant and at the same time pathetic. It takes the form of a nice little Christmas wrapper, and everything is sweetness and light. There is the picture of a little girl cuddling her doll in front of a brightly lit Christmas tree, and they say in the advertisement:
The holiday season brings added happiness to young and old alike, but at the same time it is the season when many of us find ourselves short of cash because of extra expenses.
To state it briefly, if I had been introducing this private bill or if I were to introduce another one I would say that anyone whose business is the lending of money should be compelled to state the rate of interest per annum in his advertisement and I emphasize the words "per annum." That is the crux of the whole matter because the people who use these small loan companies, the people who get into these little financial jams, the people to whom this sort of pleasant thing appeals, are people who are not customarily very adroit in the matter of calculating the amount of interest per annum. Very often they have their backs to the wall. To use a colloquialism, they are in a jam and they have to do something about it immediately.
Perhaps if they knew what the rate of interest was they would take the money anyway in some cases, but I think the rate of interest per annum should be clearly stated. I have taken one example from this comparatively harmless table. For instance, they say that you can get $1,000 in cash by agreeing to repay $93.11 per month over a period of 12 months. That is all it says. You get $1,000 in cash and you repay $93.11 per month for 12 months. If I am correct in my calculations, at the end of the year you have paid back $1,117.32. That means that for the use of the $1,000 over the period-there is the catch, of course; what is the period-you pay $117.32. If you divide by 10 you are paying $11.73 for the use of $100.
I am quite sure that many people who have used such loans would say when approached that they had paid 11.73 per cent for the use of the money. But how does it work out? First of all you have to repay something every month. You have to pay back one-twelfth of the loan every month and so you actually only have the whole $1,000 for one month. Then over the next 11 months the amount of the loan diminishes by something less than $90 each month until you come to the final month when you have scarcely any of the company's money at all. Nevertheless in the final month you are still paying the same amount, not rate, of interest as you paid in the first month.

Therefore when I said that the matter of the period is all-important I meant just that. The situation can be put in two ways. You can say that you have the use of $1,000 for six months or you can say that you have the use of half of the money, $500, for the 12 month period. I just made a rough calculation when the debate started, but I think I am perfectly safe in saying that the interest rate is well over 20 per cent and probably approaches the legal limit of 24 per cent.


Mr. Michener:: It is 22-3.


Robert Ross (Roy) Knight: Thank you very much. We have a mathematician in the house. At any rate, I think I have made my point. I believe that most of this advertising-whether this particular one is included I do not know -is, I say advisedly, a deliberate misrepresentation of the actual facts. I hope that something will be included in the government legislation along the lines I have indicated. Let us face it that many of these people are ignorant and in a particular financial crisis they will turn to anyone who will provide them with some money. I say that the government or somebody should protect them against themselves. I do not say that anyone in the business of lending money should be compelled to advertise, but if he wants to advertise setting forth the amount to be paid back over a certain period and so on, then I say that he should be compelled by law to state the amount of interest per annum, and I put the emphasis on the last two words, "per annum."


Walter Adam Tucker: Mr. Speaker, I should like to commend the government very much for proposing to take some action in this very difficult matter. Those who were members of the banking and commerce committee will recall that this matter came before the committee when we met at the last session to amend the Bank Act and the Bank of Canada Act. Of course the members of the banking and commerce committee were very interested in the subject because of various reasons with which they are as familiar as the members who have spoken. They were particularly interested in what the Canadian Bank of Commerce was doing in the matter.
However, there was a feeling in the committee revising the Bank Act that it might be unwise, when they were dealing with the revision of that act, to pass any legislation which would in any way interfere with the maximum limit the banks can charge under the Bank Act, namely, 6 per cent per annum. There was the thought that the

Canadian Bank of Commerce was doing a real public service in supplying money to borrowers of small loans at a cheaper rate than the small loan companies. There was some question as to why the other banks were not entering the field more and what could be done to assist them to enter the field in a bigger way.
As I remember it, it was finally decided that it would be unwise for us to change the maximum limit in the Bank Act from 6 per cent in order to encourage the making of these small loans by other banks because it was so hard to define a small loan, and if we lifted the maximum amount of 6 per cent the question would then arise as to how you would prevent loans now being made by the banks at 6 per cent at a higher rate than 6 per cent under any new provision that might be included in the legislation. In other words unless you could define a small loan so that a whole lot of loans made today at 6 per cent would not be made at the higher rate, then in trying to solve the problem you might bring about the result that more people would have to pay more interest than they were paying before.
I do not think anybody in the banking and commerce committee felt that any really satisfactory conclusion had been reached. It was realized that the Canadian Bank of Commerce in receiving an effective rate of interest of 10-46 per cent was, in the opinion of some lawyers, infringing on the Bank Act which sets the maximum rate a bank can collect at 6 per cent. The Canadian Bank of Commerce had received a legal opinion which indicated they had the right to operate as they were doing and they were going ahead with that business, but apparently the other banks would not enter the field unless there was some change in the Bank Act to put it beyond doubt that they had a right to charge more than the 6 per cent set out in that act.
As I have stated, the banking and commerce committee were a little bit nervous about tampering with the maximum rate and I do not think anybody really suggested that the maximum rate in the Bank Act should be changed. The Canadian Bank of Commerce was asked if they could suggest an amendment that would prevent loans being made- loans that today are being made at 6 per cent-at a higher rate of interest than 6 per cent and restricted to strictly personal loans. I think they brought in a suggested amendment but one which I believe did not satisfy any member of the banking and commerce committee. I should say I think most of the members of the committee felt really appreciative of the attitude of the Canadian Bank of Commerce because they were persisting
Small Loans Act
in staying in this field which they had entered about 18 years ago and were providing money to borrowers at less than 12 per cent a year. I expect that it is the attitude of the government to ask some committee either here or in the Senate to go into this matter. It is such a complicated matter that I would not want to express any definite opinion on it in case it is referred to our banking and commerce committee of which I am a member.
When the first small loan bills came before this house-I think it was in 1937-to authorize a rate of 2 per cent per month being charged, I opposed those bills strongly. Then evidence was brought in indicating that if you do not provide a legal way by which borrowers of small amounts can get money at 2 per cent interest, you will find that they are resorting to lenders who are not under any control whatever and who will charge more. That is the argument that was used. Finally it was accepted by the banking and commerce committee and these bills finally went through after they had been before the banking and commerce committee for two sessions.
As I say, this question again came before the banking and commerce committee last year. I think it would perhaps be useful to read the comment or the summing up of the Canadian Bank of Commerce in the matter because it is something in which I think all hon. members are greatly interested and are much concerned about, namely that persons having to borrow small sums of money should not be obliged to pay exorbitant rates for it. This comment by the Canadian Bank of Commerce in their brief indicates some of the difficulties involved in the matter. As I say, I want to commend the government for introducing legislation so that something can be done about it if it is at all possible.
I am reading from page 822 of the proceedings of the standing committee of the House of Commons on banking and commerce. This is from the brief of the Canadian Bank of Commerce. Before I read that comment I might say that the members of the committee were greatly interested in the brief because it made an examination of the small loan companies' operations and compared them with their own. An examination of their earnings and costs-that is of the personal loan plan of the Canadian Bank of Commerce -shows, as I have said, that total earnings were at the rate of 10-46 per cent upon loans outstanding; that their salaries amounted to 2-77 per cent on loans outstanding; that their advertising amounted to 0-15 per cent on loans outstanding, an extremely small amount; and that other expense, including salary costs and other expenses at branches,

Small Loans Act
amounted to 3-25 per cent on loans outstanding; and that the cost of funds was 2-05 per cent. In other words, the Canadian Bank of Commerce was providing funds for the small loans branch of their activities for 2-05 per cent. This fact indicates that they were not charging a large amount of interest for the use of those funds. In commenting on this matter here is what they said at page 819. They say:
These comparisons-
That is with the small loan companies.
-are made not to offer any commentary on the operations of the small loan companies, v/hich have obviously filled a public need in a high-cost field. The comparisons do indicate, however, that extreme economy in operations has been necessary under the personal loan plan.
That is the bank plan.
During the past 18 years the annual operating results of the personal loan plan showed a loss in each of five years and a net profit of less than $50,000 in each of six years.
That is the situation although the bank was charging an effective rate of 10-46 per cent and was getting its money for 2-05 per cent. The brief goes on to say this:
It is apparent that if expenses in the personal loan department had not been restricted to a low level compared with the small loan companies the department would have operated at a heavy loss throughout the period.
In other words the bank suggests that if they had not held down expenses to the very minimum in that branch of the bank's operations, they would have had a heavy loss throughout. They sum the whole situation up in this way, and I put it before hon. members because I think all hon. members are greatly interested in this matter and that they might well consider the opinion of this expert in the Canadian Bank of Commerce. Here is what he said:
As the personal loan plan offers facilities to the public similar to the small loan companies, but at much lower cost, it is natural to seek reasons for its failure to show greater growth. There is no single answer but the following observations suggest an explanation:
1.	The small loan companies by taking chattel mortgage security do not need to require endorsers or guarantors. This enables borrowers to preserve greater privacy about their affairs.
We provided for chattel mortgages being taken, so that observation should not apply any more, as I understand the amendment we made to the Bank Act. The second reason was this:
2.	The relatively low level of earnings under the personal loan plan has not permitted or warranted adequate advertising. For example, advertising costs of the personal loan plan in 1951 and 1952 totalled $10,679 while the outlays of the small loan companies totalled $1,360,775.
fMr. Tucker.]
I would ask you, Mr. Speaker, to note that the Canadian Bank of Commerce apparently found that, although they were advancing money at less than half the cost to the borrower compared with what was charged by the small loan company, they did not get any great amount or proportion of the business and they attribute one of the reasons to the power of advertising. They said that their charges were so low that they were able to spend in two years only slightly over $10,000 while during the same time the small loan companies spent $1,360,000. It shows the power of advertising. Even although the small loan companies were . charging twice what the bank was charging, that was the situation. I think there is a great deal in what was said by the hon. member for Saskatoon (Mr. Knight) with regard to these people doing the kind of advertising they do at the cost of the borrower. Their third observation is as follows:
3.	Part of the reason for the low level of advertising expenditure, however, derives from policy. During the period of voluntary credit restriction of 1951/1952 and in earlier years of full employment the bank did not seek to expand personal loan volume, believing that this was not, at that time, in the public interest. It is doubtful, however, whether this had much effect other than to permit a larger volume of loans to go to the small loan companies.
In other words, as I understand it, the bank is saying there that they did not think it was in the public interest to try to press these small loans at that time. But they seemed to think that because they did not do so it meant that more went to the small loan companies.
4.	The element of cost is probably not a significant consideration in the minds of the majority of small loan borrowers.
Here is the opinion of the Canadian Bank of Commerce after being 18 years in this business. In their opinion, the element of cost is probably not a significant consideration in the minds of the majority of small loan borrowers. I must admit that that to me was a most surprising thing because surely most people do not like to pay an effective rate of 24 per cent if they could get the money for 10 per cent or less. However, this is the opinion of the Canadian Bank of Commerce. Apparently good advertising can overcome the desire of people to get a good bargain.
The Canadian Bank of Commerce then winds up its statement like this:
The personal loan plan of the Canadian Bank of Commerce was created to provide a necessary service to the public at the lowest cost consistent with an economic operation; its methods of operation must, of course, conform with legal opinions upon which the scale of charges is based.

I would point out to the members that the actual situation in regard to the Canadian Bank of Commerce is that it had a net profit, after income tax, on loans outstanding of *77 per cent. In other words, they did not earn a profit of even 1 per cent on loans outstanding.
Then, they said: they could not afford to advertise. They said they could not charge any more than they were because the base of the charge was regulated by the Bank Act. They took it that act permitted them to take a discount of 6 per cent ahead of time, but they could not go beyond that. They were definitely limited by the Bank Act as to what they could do. They said:
-its methods of operation must, of course, conform with legal opinions upon which the scale of charges is based. As previously mentioned, the present basis is not sufficient to permit the necessary publicity and development in rendering service of greatest breadth, but it is not suggested, that a scale of charges approaching the level sanctioned under the Small Loans Act should be considered. Experience has shown that the personal loan plan of the Canadian Bank of Commerce can provide an effective service at lower rates and it has also shown that authority to take security in the form of chattel mortgages is a necessary condition to the providing of comprehensive personal loan facilities.
The bank suggested, as I understood them, that the personal loan plan should apply to loans up to $3,000 or $3,500. If I may summarize in my own words what I understood this brief to say, it was that if there were some change in the law to enable them to charge something more than this 10-6 per cent, then they could extend these services to a greater extent than they had heretofore. But they made it very plain that they were not asking for a rate of charges similar to those in the Small Loans Act. The banking and commerce committee found this brief of the Canadian Bank of Commerce very intriguing, and I think believed it to be the basis upon which a further investigation should be carried out as to the way in which the banks of this country could be asked, as a public service, to enter this field. After all, the banks do get very valuable rights from this parliament. At the same time, in opening this field today, they felt we should not in any way change the limit of 6 per cent on ordinary loans.
I believe all members of the house, and particularly the members of the banking and commerce committee, will agree with me that this is a very difficult problem and one upon which we were justified in not embarking in connection with our study and revision of the Bank Act. At the time I felt this brief did lay down a foundation upon which an investigation could be made to ascertain what
Small Loans Act
use could be made of the bank facilities in this country to ensure that borrowers of small amounts of money would not have to pay 24 per cent interest. I believe all members will agree that all the banks should be expected to render this service to small borrowers as part of the public service they should render in connection with the grant of their charters. At the same time, nothing should be done to interfere with the maximum amount of interest that can be charged on ordinary loans.
This is not an easy problem to solve. Certainly it is one which I think the members of this house will be glad to have an opportunity to study. My own feeling when the motion was made yesterday to adjourn this debate was that it was the thought of the parliamentary assistant (Mr. Benidickson) to the Minister of Finance that it might be a good thing if a careful study of what had happened in the past were made before various members committed themselves too definitely; that if we obtained advice from experts in this field we would not appear to be pre-judging the matter before it did come before us. It was for that reason I supported the parliamentary assistant. I believe everybody will agree this is a difficult and complicated matter. When the government has promised to introduce a bill covering the matter, I think most members of the house will want to be sure they give it the fullest possible study and get the best possible advice, in order to make sure that the course embarked upon is in the best interests of the small borrowers in this country.


Stanley Howard Knowles: I rise only for the purpose of making a few comments on the remarks made earlier by the hon. member for Moose Jaw-Lake Centre (Mr. Thatcher). I am grateful to my hon. friend for staying in the house because I indicated to him that I would be making these comments and that I would rather make them in his presence.
The hon. member for Moose Jaw-Lake Centre quoted from a dispatch, I believe it was in an issue of the Regina Leader-Post, in which it was stated, and I quote:
Mr. Coldwell cited Thatcher's differences of opinion and said that when the C.C.F. party attempted to introduce measures to reduce the 24 per cent interest charges of small loan companies to 12 per cent, Mr. Thatcher was directly and emphatically opposed to such a move.
The hon. member for Moose Jaw-Lake Centre then went on to cite Hansard as proof of the fact he did not oppose such a proposition on the floor of this house.

Small Loans Act
I think hon. members will readily see the error into which the hon. member for Moose Jaw-Lake Centre has fallen. My leader, the hon. member for Rosetown-Biggar (Mr. Cold-well), whose integrity needs no defence in this house or in this country, did not say that the hon. member for Moose Jaw-Lake Centre opposed this proposition on the floor of the house. The hon. member for Rosetown-Biggar said that the hon. member for Moose
Jaw-Lake Centre was opposed to our introducing a measure such as this. Obviously, the opposition to which my leader had referred was not expressed in the house but was expressed somewhere else.
On motion of Mr. Regier the debate was adjourned.


[Stage Direction]
At six o'clock the house adjourned, without question put, pursuant to standing order.