1961-07-05

AGRICULTURE AND COLONIZATION

[Stage Direction]
Second report of standing committee on agriculture and colonization-Mr. McBain.


Hon. Donald M. Fleming (Minister of Finance):: Mr. Speaker, may I, following the practice that I have adopted in these matters, ask leave to give the house notice of an amendment that I shall be introducing to Bill No. C-120, an act to amend the Income Tax Act when it is reached in committee. The amendment will be that the bill be amended by striking out lines 41 and 42 on page 7 thereof and substituting therefor the following:
-the year in which it was received, from duties that shall be deemed to have been performed by him in Canada in that year, unless it can be established, by subsequent-
The other change is simply a textual one. In clause 23 of the bill, line 33, at page 19, the word "is" should read "are".


EXTERNAL AFFAIRS
Mr. Speaker:: By leave of the house may I table the report of the fifth meeting of the Canada-United States interparliamentary group held recently in Washington. These are copies in English and in French. I have not had an opportunity of speaking to the house leader or to hon. members about this report. In the past, however, it has been printed as an appendix to Hansard. If the Prime Minister would like to see that practice continued, this would be the appropriate time to deal with it.


Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, I think this organization, unofficial as it is, since its inception two years ago has made an exceptional contribution to an understanding by legislators not only of Canada but of the United States of those problems that affect us. I am sure the house would want the inclusion of this report as an appendix to Hansard so there will be
available to all hon. members a record of the outstanding deliberations that took place just recently.


Hon. L. B. Pearson (Leader of ihe Opposition):: Mr. Speaker, I think it would be a good idea to put this report in as an appendix to Hansard as the record of a meeting which is another stage in the development of a piece of international machinery that could be of great benefit to both countries concerned.


Mr. Hazen Argue (Assiniboia):: Mr. Speaker, we think it is appropriate that this report should be printed as an appendix to Hansard.


Mr. Speaker:: Is it agreed, then, that the report now tabled be printed as an appendix to today's Hansard?


Some hon. Members:: Agreed.
[Editor's note: For text of report referred to above, see appendix A.]



STARRED QUESTIONS


Mr. Habel: 1.	Was a man by the name of Donat Verrette employed as an engineer or in any other capacity in the Department of Defence Production in December 1959?
2.	If so, was he engaged in making studies as to the possibility of establishing a Bomarc launching base at or near Kapuskasing, Ontario?
3.	Did the department discuss such studies with the Rocheleau Construction and Engineering Company Limited of Hull, Que.?
4.	If so, was there any discussion by the department of the possibility of granting a contract to this company?


Hon. Raymond O'Hurley (Minister of Defence Production):: Mr. Speaker, the answer is as follows:
1.	No one by the name of Donat Verrette was ever employed in the Department of Defence Production.
2.	Not applicable.
3.	Not applicable.
4.	Not applicable.


BOMARC MISSILE BASE, MONT LAURIER   CONSTRUCTION CONTRACTS
Mr. Herridge: 1.	Have contracts been awarded for the initial construction of the Bomarc missile launching base near Mont Laurier?

Starred Questions
2.	If so: (a) to what firms? (b) on what date? (c) what were the terms of each contract?
3.	Were any of these contracts on a cost-plus
basis?
4.	If so: (a) which ones? (b) for what reason? (c) what work was to be performed on this basis?
5.	Have any payments been made on these contracts to date?
6.	If so: (a) on what contracts? (b) to what firms? (c) on what dates, and how much was paid on each date?
7.	Have any payments been made under a cost-plus contract?
8.	If so: (a) on what contracts? (b) to what firms? (c) on what dates, and how much was paid on each date?
9.	Is any money owing for work performed to date?
10.	If so, how much money, and to whom is it owed?


Donat Raymond: Mr. Speaker the answer is as follows:
1.	Yes.
2.	(a) A. Janin & Co. Ltd., Montreal,
Quebec.
(b)	July 29, 1960.
(c)	Firm price.
3.	No.
4.	Not applicable.
5.	Yes.
6.	(a) Construction of supporting facilities for R.C.A.F. Bomarc site, La
Macaza.
(b)	See answer to (2) above.
(c)	A. Janin & Co. Ltd.
September 9, 1960	$ 166,355.10
October 10	 520,639.98
November 15	 322,995.85
December 13	 513,178.57
January 10, 1961	 223,009.24
February 14	 319,935.64
March 13	 303,344.08
April 14	  296,223.14
May 16	 229,534.65
June 26	 255,272.51

7.	Not applicable.
8.	(a), (b), and (c)-not applicable.
9.	No.
10.	Not applicable.



APPLICATION FOE HAILWAY CONSTRUCTION, B.C.-YUKON

Mr. Howard: Has the Pacific Northern Railway Company made any application to the Canadian government for a licence to build a railway through any part of British Columbia or the Yukon Territory and, if so, what was the date of the application, the route covered, and the decision of the government with respect thereto?


Hon. Leon Balcer (Minister of Transport):: Mr. Speaker, the answer to this question is that no such application has been received.

teacher's residence, caughnawaga



INDIAN RESERVE

Mr. Howard: 1.	Since January 1, 1957, has a teacher's residence been built on or for the Caughnawaga Indian reserve?
2.	If so: (a) what was the cost of the building? (b) the name and address of the contractor? (c) was any of the material or work found to be defective or not in accordance with the specifications, and, if so, what are the details surrounding this?
3.	What was the cost of bringing the residence up to standard or replacing the defective materials?


Hon. Ellen L. Fairclough (Minister of Citizenship and Immigration):: Mr. Speaker, I would ask that this question be allowed to stand.


Mr. Speaker:: Stand.


Mr. Y. R. Tasse (Parliamentary Secretary to the Minister of Public Works):: Mr. Speaker, I wonder whether I might have permission to revert to question No. 435.


Mr. Speaker:: Is that agreed?


Some hon. Members:: Agreed.


Yvon-Roma Tassé: The answer to this question is as follows:
1.	Yes.
2.	(a) $77,765.38.
(b)	Simeon Marcil, St. Chrysostome, P.Q.
(c)	Yes. The building was inspected by departmental architects on June 14, 1961 and the deficiencies, all of which were minor, were noted.
3.	The deficiencies are being corrected by the contractor at no cost to the department.



CHARTERED BANKS MERGER

Mr. Benidickson: 1.	Has the Minister of Finance been approached by any of the existing chartered banks with a view to exploring the possible approval of another banks' merger?
2.	If so, which banks made such approach, and when was it made?


Donald Methuen Fleming: Mr. Speaker, as I stated last week in reply to a similar question, there are no such applications. 1 have not received any.



SUMMONS FOR FAILURE TO ANSWER CENSUS QUESTIONS

Mr. Deschaielets: 1.	Has the minister any information to give to the house on a summons served on Mr. Jacques Roy, a Vancouver T.V. and radio commentator, in connection with his answers to questions on the census?
2.	Would the minister advise whether this is the only case of summons being issued in connection with failure to answer questions on the census form?


Hon. George H. Hees (Minister of Trade and Commerce):: Mr. Speaker, this case was heard in Vancouver court on Wednesday, June 28, 1961 and at the request of defence counsel was adjourned until Thursday, July 6, 1961 at 2.30 p.m. As the matter is sub judice it would be inappropriate for me to comment further.
This is the only case where proceedings are going forward at the moment. There are a small number of cases of refusal being investigated. The bureau is not interested in securing fines or imprisonment, but rather in securing the information required under the law. Every effort is made to avoid court action, which is taken only as a last resort.



NATIONAL MUSEUM


Mr. Herridge: 1.	As of March 10, 1959, did any employees of (a) the natural history branch (b) the human history branch, of the national museum, not hold British or Canadian citizenship?
2.	If so, what were their names, the positions held, in what branch of the museum, on what date were they first employed, and what citizenship did each hold?
3.	Are any of these people still employed by the museum?
4.	If so, in what position and branch of the museum, and what are the duties of each?
Starred Questions
5.	How many appointments have been made to the staffs of (a) the museum of natural history (b) the museum of human history, since March 10, 1959?
6.	Have any of these persons not held Canadian or British citizenship at the time of their appointment?
7.	If so: (a) what is the name of each such person? (b) in what branch is each employed, and what positions has each held on what dates? (c) What citizenship does each person hold?
8.	Were any of these appointments to the museum staff not made through the usual civil service competition?
9.	If so, (a) which ones (b) on what authority were they appointed, and on what date?


Hon. W. G. Dinsdale (Minister of Northern Affairs and National Resources):: Mr. Speaker, the answer to part 1 is yes to both (a) and (b). The answer to part 3 is yes. The answer to part 5 is (a) 15 and (b) 12. The answer to part 6 is 2. The answer to part 8 is no. Part 9 is therefore not applicable.
The answers to parts 2, 4 and 7 are lengthy, and if it meets with the approval of the hon. member and the house, Mr. Speaker, may I have these answers printed in Hansard?


Mr. Speaker:: Is that agreed?


Some hon. Members:: Agreed.
[Editor's note: The answers referred to above are as follows:]



Q. 2 APPENDIX &quot;A&quot;

[Stage Direction]
Date of
Name	Position Held Branch of Museum Appointment Citizenship
Duties
Crum, H.A	
Langston, W. Jr... MacNeish, R.S...
Oschinsky, L	
Balikci, A	
Twarecki, T	
Biologist 3	
Biologist 4	
Biologist 5	
Biologist 3	
Anthropologist 2 Technician 1	
Natural History it	Sept. 20, 1954 Oct. 20, 1954	American	(See Appendix "C" for duties)Human History	June 20, 1949	"	"	Sept. 2, 1958	«	«	Oct. 29, 1954	Bulgarian Resigned June 16, 1961	"	Dec. 2, 1958	Polish	Became Canadian citizen Feb. 58
Youngman, P.M.. Biologist 2	
Clarke, A.H	 Biologist 3....
DeBlois, A.D.... Anthropologist 2

[Stage Direction]
Natural History Sept. 8, 1960 American "	Sept. 15, 1959 American
Human History	Sept. 15, 1960 American

[Stage Direction]
Duties Performed by Persons shown in Appendices A and B
[Stage Direction]
H. A. Crum: Associate curator, cryptogamic botany: studies the taxonomy, ecology and distribution of Canadian bryophytes both in
the field and in the laboratory; prepares for publication occasional papers and monographs based on original research; selects material to be retained in the cryptogamic herbarium and supervises the preparation and arrangement of specimens of mosses, liverworts, lichens and algae; improves the herbarium by restudying older collections and
[Stage Direction]
Starred Questions
revising determinations; makes material available for study through loans and exchanges; determines specimens for other botanists; answers inquiries from the public.
W. Langston, Jr.: Curator of vertebrate palaeontology: research on fossil vertebrates, including geological, taxonomic, anatomical and biological aspects; publication of scientific reports and popular articles in this field; supervision of the museum collection of fossil vertebrates, including acquisition, records, identification, labelling and arrangement; design and supervision of preparation of museum exhibits in vertebrate palaeontology, including the writing of labels; direction of the laboratory of vertebrate palaeontology, where specimens are prepared for study and exhibition (three preparators and one artist); direction of museum expeditions for the collection of fossils; maintenance of knowledge of recent advances in vertebrate palaeontology, through reading current literature and through contacts with other workers in Canada and abroad; delivering of popular lectures and radio and television expositions on fossils.
R. S. MacNeish: As senior archaeologist, to be responsible to the director for the planning of program, and the general administration of the archaeology section; to plan and carry out research in archaeology, including the preparation of reports; to advise the archaeological staff on their research; to be curator of the archaeology collection, and to supervise directly the work of the cataloguer and the storemen; to supervise from a scientific standpoint the preparation of archaeological exhibits; to prepare popular articles and give lectures in archaeology; to answer inquiries in archaeology from specialists and from the public.
L. Oschinsky: Under direction, to plan and carry out anthropological studies in various parts of Canada and to analyse material on this subject held in the national museum; to prepare technical correspondence, reports and scientific papers thereon; to provide guidance on exhibition of materials; as required, to assist with and present lectures or prepare educational information for the public; as required, to supervise professional and subordinate staff; to perform other related duties as required.
A. Balikci: To plan and carry out research in social anthropology and ethnography, including field work; to prepare reports on his research, and reviews of related work; to act as curator of parts of the ethnological collections; to assist in the preparation of ethnological exhibits; to answer inquiries in ethnology from specialists, and from the public;
[Mr. Dinsdale.l
to prepare popular articles and to give lectures in his special field.
T. Twarecki: Under direction, to prepare and catalogue anthropological collections of the human history branch; to assist in the restoration work on all difficult material and to maintain proper storage conditions to protect specimens against decay, insects, drought and other forms of deterioration; to make materials available for exhibits and scientific study and to be responsible for the receiving and shipping of specimens; as required, to lecture on the restoration of specimens; to conduct correspondence in connection with the duties, and to perform other related duties as required.
[Stage Direction]
P. M. Youngman: Under direction, to plan and undertake research and field investigations on Canadian mammals, particularly in the fields of taxonomy and distribution; to collect, identify, and direct the cataloguing and arrangement of mammal specimens in the collection; to supervise the use of the collection by others; to prepare scientific and popular reports on mammals; to give lectures; to represent the national museum at meetings dealing with mammalogy; to participate in the planning and preparation of exhibits of mammals.
A. H. Clarke, Jr.: Under direction of the chief of the zoology section to carry out research on the taxonomy, distribution and ecology of one or more phyla of invertebrate animals other than the arthropoda; to undertake field investigations on the invertebrate fauna of Canada, and to collect specimens for study and exhibition; to act as curator of part of the museum collection of invertebrates, including the mollusca; to prepare scientific reports and popular articles within the field of study; to give lectures and demonstrations; to assist in planning exhibits; to make routine identifications of invertebrates submitted by the public, other scientists and agencies; to perform other related duties.
A. D. DeBlois: To plan, organize and carry out studies in linguistics, which includes field work and the collection of material for, and supervision of, research; to present to the public by lectures, speeches or other media educational data concerning the subject matter; to prepare reports and manuscripts on this subject; to answer public inquiries and correspondence; to perform other related duties.

Mr. Howard: Was a Mr. Homer Stevens, secretary treasurer of the United Fishermen and Allied Workers Union,

provided with a special diplomatic passport in 1957, and, if so, upon what date was the said passport issued, and for what purpose was it issued and used?


Hon. Howard C. Green (Secretary of State for External Affairs):: Mr. Speaker, the
answer to this question is no.



SOULANGES CANAL


Mr. Chevrier: 1.	Did the Department of Transport receive tenders from industry in relation to the purchase of the east end of the Soulanges canal at Pointe des Cascades?
2.	If so, what is the list of names, addresses, and amounts of such bidders?
3.	How many employees are likely to be engaged in each case?
4.	What action has the government taken on these tenders?


Léon Balcer: Stand.


Hon. Lionel Chevrier (Laurier):: Mr. Speaker, may I bring to the attention of the Minister of Transport the fact that on Monday he indicated that he had received tenders. I wonder why he could not answer question No. 442 rather than having it stand.


Léon Balcer: Mr. Speaker, when I said we had received tenders, that was the fact. We had received tenders, but we have received further tenders since then. We received one yesterday. In order to be able to answer questions of hon. gentlemen my officials have to process these tenders. I will answer this question as soon as we have the complete list for the hon. member.


Lionel Chevrier: The expiry date was June 30.




Mr. Chevrier: 1.	Did the Minister of Transport receive a letter from the municipality of the village of Pointe des Cascades concerning the sale of the eastern end of the Soulanges canal?
2.	On what date?
3.	What was the purport of the letter?


Léon Balcer: Mr. Speaker, the answer to this question is as follows:
1.	Yes, from the mayor of the municipality.
2.	Received June 6, 1961.
3.	The letter indicated that the members of the first council of the municipality of Pointe des Cascades incorporated June 1, 1961 objected to the sale of the canal property at Cascades Point to private interests and recommended that the Soulanges canal property be turned over gratuitously to the province of Quebec.
Orders for Returns




Mr. Chevrier: 1.	Did the Minister of Transport receive a copy of a resolution passed by la commission d'expan-sion industrielle de Vaudreuil-Soulanges concerning the use of the eastern end of the Soulanges canal at Pointe des Cascades?
2.	On what date?
3.	What was the purport of the resolution?


Léon Balcer: Mr. Speaker, the answers to this question are as follows:
1. There is no record of any copy of a resolution adopted by la commission d'ex-pansion industrielle de Vaudreuil-Soulanges having been received in the department.
2 and 3. Not applicable.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Howard: 1.	Since January 1, 1950, have any grants been paid to incorporated companies other than crown corporations?
2.	If so, with respect to each such company, what is (a) its name, address, and type of business (b) the amount of the grant by period of payment
(c)	the total amount paid to date (d) the expiry date of the grant (e) the authority for such payment (f) date upon which each grant came into effect (g) the date and nature of any change in the grant?


SUBVENTION PAYMENTS TO INCORPORATED COMPANIES
Mr. Howard: 1.	Since January 1, 1950, have any subventions been paid to any incorporated companies other than crown corporations?
2.	If so, with respect to each such company, what is (a) the amount of the subvention by period of payment (b) the total amount paid to date (c) its name, address, and type of business
(d)	the expiry date, if any, of the subvention (e) the authority for each such payment (f) the date upon which each subvention came into effect (g) the date and nature of any change in the subventions?
He said: Mr. Speaker, I wonder if I might be permitted to mention this matter. This request by the minister for orders for returns relates to questions of mine. There is a third question of a similar nature, No. 282. I wonder whether this would not be in the same category and if it should not be made an order for return.


Hon. Noel Dorion (Secretary of Stale):: Mr. Speaker, question No. 282 applies to loans over an 11-year period to companies other than crown corporations, and requests the details of each. To supply this information would involve unreasonable labour and expense on the part of at least one department.

Business of the House
In Central Mortgage and Housing Corporation, for example, it would involve the examination of thousands of accounts over an 11-year period. For this reason it does not seem to be appropriate to suggest that the question, as it now stands, be made an order for return.



BUSINESS OF THE HOUSE


Mr. J. A. McGrath (SI. John's East):: Before orders of the day are called, may I ask for the unanimous consent of the house for leave to proceed with two notices of motion for the production of papers standing in my name to be found at the back of today's Votes and Proceedings'!


Mr. Gerard Loiselle (SI. Ann):: In the same way as the previous speaker I also would ask unanimous consent to move the notice of motion for the production of papers which appears in my name in today's Votes and Proceedings.


Mr. Speaker:: Is there any objection to proceeding with the three notices of motion for the production of papers which appear at the back of today's Votes and Proceedings, two in the name of the hon. member for St. John's East and one in the name of the hon. member for St. Ann?


Donald Methuen Fleming: Before you ask the house for that consent, Mr. Speaker, I wonder whether we might have a moment to look at these. We have not seen them yet.


Mr. Speaker:: The hon. members spoke to me about these questions. I understood that each had been discussed with the minister concerned and that there had been no objection.


Léon Balcer: If I understood the hon. member correctly, he mentioned this motion, No. 155, for a copy of plans and the agreement made on May 19, 1961 between the city of Montreal and the national harbours board relating to the Champlain bridge approaches, the Pointe St. Charles dump, and the causeway leading to Ste. Helen island. As far as I am concerned there is no objection to it.
The same applies to the two following motions in the name of the hon. member for St. John's East, Nos. 156 and 157. There is no objection as far as I am concerned.


Mr. Speaker:: Is it agreed that these motions may be proceeded with, notwithstanding the inadequacy of notice?


Some hon. Members:: Agreed.



MOTIONS FOR PAPERS


[Stage Direction]
Motion No. 155-Mr. Loiselle:
For a copy of plans and the agreement made on May 19, 1961, between the city of Montreal and the national harbours board, relating to the Champlain bridge approaches, Pointe St. Charles dump, and the causeway leading to Ste. Helen island.
Motion agreed to.

[Stage Direction]
Motion No. 156-Mr. McGrath:
For a copy of all correspondence exchanged between the Minister of Transport and the government of Newfoundland since June 27, 1957, respecting the Bell island ferry service.
Motion agreed to.

[Stage Direction]
Motion No. 157-Mr. McGrath:
For a copy of all correspondence exchanged between the Canadian maritime commission and the government of Newfoundland since June 27, 1957, respecting the Bell island ferry service.
Léon Balcer: Acceptance of this motion is subject to the usual reservation in reference to obtaining permission from the province.


Mr. Speaker:: Subject to the limitation expressed by the minister, is it the pleasure of the house to adopt the motion?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.
(Translation) :


[Stage Direction]
On the orders of the day:
Lionel Chevrier: Mr. Speaker, I should like to put a question to the Minister of Transport (Mr. Balcer).
Is the minister in a position to inform the house whether his department has come to a decision with regard to the Soulanges canal and whether the government has decided to turn over the entire canal to the Quebec government?


Léon Balcer: Mr. Speaker, a decision has been made and it will be announced tomorrow.
(Text):



AGRICULTURE


[Stage Direction]
On the orders of the day:
Hazen Robert Argue: Mr. Speaker, I should like to ask a question of the Minister of Agriculture. Has the minister anything further to report in respect to the very

disastrous crop conditions in western Canada and, in particular, can the minister inform the house whether the government has in mind any action for making direct payments to producers who suffer crop losses or losses in income?


Hon. Alvin Hamilton (Minister of Agriculture):: Mr. Speaker, I am sure the house is very pleased to see the hon. member for Assiniboia back in the house.


Lionel Chevrier: As well as the minister.


Hazen Robert Argue: Mr. Speaker, on a point of privilege, I should like to remind the long-absent Minister of Agriculture that my return to the House of Commons preceded his.


Donald Methuen Fleming: The minister was on public business, not personal politics.


Francis Alvin George Hamilton: Mr. Speaker, the hon. member for Assiniboia was away on one type of business while I was away in respect to the business of the western farmers.
A meeting of the three western agriculture ministers and their staffs, the premier of Manitoba, the Minister of National Defence and myself representing the federal government, was held last Sunday in Winnipeg. At that time we went over the plans of the various provinces to meet the exceptional drought conditions of this year in the west. We formally went through the plans for the traditional freight assistance for the movement of fodder to cattle. It was made clearly apparent that in many parts of the country there would not be enough fodder to move even if there was freight assistance, so we discussed a program of switching the farmers in western Canada who have cattle herds to feeding grain in preference to fodder.
The federal government also made an offer to the provinces to double its community pasture program whereby the federal government would move grain to the community pastures enabling the doubling of the population if necessary, so that farmers not able to get fodder and who do not have water could bring their cattle to these pastures. The provincial and federal governments agreed that there should be a joint program of extension aimed particularly at the agricultural population of Manitoba and Saskatchewan, to point out the economics of grain feeding as opposed to fodder feeding and how the techniques of switching from one grain to another which is in supply can be used.
We discussed at some length the application of the agricultural prices support legislation, but it was the hope of us all that by certain techniques we could keep the flow of cattle moving to commercial markets in
Inquiries of the Ministry such a way that prices would not drop, so there would be no need to use price supports. The provincial governments expressed gratification in respect to our willingness to use support prices, and we discussed various grades to which it would apply, and so on.
Finally I should like to add a word and say that the situation as far as the cattle industry is concerned is quite serious. Weather conditions have deteriorated during the last 10 days. However, the essential fact to keep in mind is that there is no surplus of beef production in North America. There is no need for prices to decline if the movement of cattle to market is kept under good control. It was the declared intention of the four governments to see that this is done.
In regard to the last question asked by the hon. member in relation to payments, I think I can say that the federal government in 1958, through the words of the Prime Minister and his national agricultural program, among other things offered a program of crop insurance and a program of forage banks. I think the events of the last few months indicate the wisdom of this program, and I am sure the experience this year will convince the provincial governments across Canada that they would be very wise to inaugurate a hard sell campaign, selling crop insurance to farmers to enable farmers to build up a fund to meet this type of emergency, so as not to be faced with the tremendous drop in income such as they are now faced with.
The federal government stands ready at all times to see that everything possible is done to ameliorate conditions in any part of Canada, whether it be Prince Edward Island or the western provinces.


Hazen Robert Argue: Mr. Speaker, I should like to ask a supplementary question. Does the minister not feel that consideration should be given to cash payments to western producers, not only because of crop losses but also because of the added expense this year of combating the grasshopper and cutworm plagues? My second supplementary question, in view of the minister's reference to crop insurance, is this. I wonder whether the government has under consideration any amendments to the act so the federal government itself might bear part of the liability for crop losses, the whole of which is now shouldered by provincial governments; and has the government considered any change in its 20 per cent payment toward premium costs?


Francis Alvin George Hamilton: I should like to answer the second part of the question first. The present Crop Insurance Act is enabling

Inquiries of the Ministry legislation which allows any province to set up a scheme suitable to its own needs. The federal government provides 20 per cent of the premium by way of assistance to farmers to induce them to participate. There is nothing to prevent any provincial government from joining with the federal government in giving help by way of a contribution to the farmer's premium.
Second, the government is considering ways and means to improve any and all of our legislation, and this includes the crop insurance legislation. I think it is very clear that if under the terms of the present act there is overpayment on any insurance scheme in the first few years after the insurance plan has been set up there will be a heavy burden, but the fact remains that the federal government has offered to lend such schemes 75 per cent of the cost of any over-call on the scheme.
There has been a suggestion by the province of Manitoba that there be an additional reinsurance provision so that any province would not be seriously jeopardized in its credit arrangements if there was a heavy loss. This particular aspect of the situation is under review.
With regard to the first part of the hon. member's question as to the general loss suffered by farmers, I think this government has demonstrated that whenever there has been a serious loss of income, as in the case of the farmers of Prince Edward Island last fall with regard to their potatoes and as in the case of the western farmers, we have always been ready to consider some suitable means of coming to their assistance. I should like to remind the house that in 1958 and in 1960 the federal government made an acreage payment to western farmers which was opposed by the hon. member for Assiniboia, and now I have-


Hazen Robert Argue: That is not true. That is a lie.


Mr. Speaker:: Order. The hon. member for Essex East.


Hon. Paul Marlin (Essex East):: I wonder whether I might get in a brief remark after the long speech of the Minister of Agriculture. In view of the condemnation by the minister of agriculture of Saskatchewan regarding the wholly inefficient way in which the crop insurance scheme is being applied, and owing to the fact that no province other than Manitoba is really participating in the scheme, may I ask the minister if the government will not agree to take steps to provide a crop insurance plan that will apply to all ten provinces and not just to one, that is Manitoba, which took the initiative long before this government acted in the matter?


Francis Alvin George Hamilton: Mr. Speaker, as usual the hon. member for Essex East is away out on his facts. The provinces of British Columbia, Alberta, Saskatchewan and Prince Edward Island are now actively exploring various crop insurance schemes.


Mr. Marlin (Essex Easl):: That is not what I said.


Francis Alvin George Hamilton: These programs will be worked out and I am quite positive that under the type of legislation we have, which allows each province to set up a scheme suitable to its own needs, insurance on special crops and on cereal crops will spread all across this country in the next few years. With regard to the words of the minister of agriculture of Saskatchewan, I think he is just suffering from the fact that in his province they tried to extend crop insurance by a correspondence course rather than going out and selling it across the kitchen table.


Peter Francis Martin: Mr. Speaker, in view of the misinformation given to the house by the Minister of Agriculture, may I ask him if it is not a fact that at least eight provinces are not now participating in this anaemic crop insurance scheme of the government?


Francis Alvin George Hamilton: Mr. Speaker, apparently the hon. member for Essex East did not hear me say that certain provinces, and I listed them, are now working on plans for crop insurance in their provinces. Therefore the figure of eight provinces not cooperating is not true.


Peter Francis Martin: Mr. Speaker, the hon. gentleman persists in ignoring the nature of the question. Is it a fact that eight provinces-


Some hon. Members:: Order.


Mr. Speaker:: Order. I think any further debate should be reserved for the estimates.


Peter Francis Martin: With great respect, Mr. Speaker, may I say that you allowed the Minister of Agriculture to make extended statements. As we are coming to the adjournment of the session I think we are entitled to place on the record the real facts involved in the situation. I do so by way of a question. I simply ask the minister-


Mr. Speaker:: Order. The hon. member is seeking to ask a supplementary question which is a repetition of the question he has already asked, and it seems to me that with the number of supplementaries the whole situation has been sufficiently aired.



INQUIRIES RESPECTING CONCENTRATED MILK, SOYBEANS, BUTTER, ETC.

[Stage Direction]
On the orders of the day:
Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I wish to direct a question to the Minister of Agriculture. Will the minister be in a position in the near future to make an announcement concerning the recent request of the concentrated milk producers?


Francis Alvin George Hamilton: Mr. Speaker, this matter is before the government for decision. As soon as a decision has been arrived at it will be announced in the house.


Paul Joseph James Martin: A supplementary question, Mr. Speaker. May I ask the Minister of Agriculture if he has yet made a decision and is in a position to announce a floor price on soybeans, and if at this very late date in the year the government is prepared at long last to make a decision with regard to a price for Ontario grown wheat?


Francis Alvin George Hamilton: Mr. Speaker, the other day in the house I answered a similar question by saying that there are a number of commodities before the government for consideration at the present time for decision on the terms of support price. When a decision is made it will be announced.


Hon. J. W. Pickersgill (Bonavisla-Twillin-gate):: I should also like to direct a supplementary question to the minister, if I may. Has the government reached a conclusion about the reduction in the consumer price for butter which was forecast by the minister more than six months ago?


Francis Alvin George Hamilton: The answer to that question is that by the government's announcement the hon. gentleman will know that a decision has been reached.



CAPE BRETON


[Stage Direction]
On the orders of the day:
John Whitney Pickersgill: Mr. Speaker-


John George Diefenbaker: I was just going to answer the hon. gentleman's question.


John Whitney Pickersgill: That is not the question I was going to ask.


John George Diefenbaker: Mr. Speaker, two days ago the hon. member for Bonavista-Twillingate asked whether the government had made a proposal to the Dominion Steel and Coal Company
Inquiries of the Ministry for stretching out the work at the Florence colliery and, if so, what attitude had been taken by the company.
I am informed that a meeting was held on Friday, June 23, between representatives of the united mine workers and of the government on the closure of this colliery. At this meeting a proposal was made that some amount of additional work could be made available if complete salvage was made of all the equipment in the mine. It was agreed to refer this proposal to the company for its consideration and advice with the understanding that, if found practical by the company, the government would consider some financial assistance to permit of full recovery.
The proposal was placed before the president of Dominion Steel and Coal Company, and the technical details were also reviewed with the vice president in charge of mining operations. The government did not make any proposal, but simply transmitted to the company for consideration and advice the suggestion made at the meeting. The company advised that, both on general and technical grounds, the complete salvage of all material was not practical, and that the amount of extra employment that might be made available was not sufficient to justify the effort.


John Whitney Pickersgill: Mr. Speaker, I thank the Prime Minister for his answer. Actually I rose to ask another question which I should like to put now to the Minister of Trade and Commerce.



SALT FISH


[Stage Direction]
On the orders of the day:
John Whitney Pickersgill: Mr. Speaker, I should like to ask the Minister of Trade and Commerce if he could give a report, either today or at any rate before the adjournment, which we hope will be before too long, on the success of his department in assisting in the disposal of the overhang of salt fish on the market from last year and if he could indicate whether there have been any discussions with the Minister of Fisheries and the fisheries price support board to ensure that there will not be a serious fall in the price of salt fish because of the loss of the Cuban market and other marketing difficulties.


George Harris Hees: I will be glad to look into the question and give the hon. member an answer as soon as possible.

Inquiries of the Ministry TRANS-CANADA AIR LINES



REQUEST FOR REPORT ON LABOUR DISPUTE

[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: Mr. Speaker, I should like to ask the Minister of Labour a question in view of the announced strike deadline set by the air line flight attendants association in its dispute with Trans-Canada Air Lines. Can the minister inform the house what steps are being taken to ensure that an agreement is reached between the two parties?


Hon. Michael Starr (Minister of Labour):: Mr. Speaker, the Department of Labour has been in constant touch with and on top of the events occurring in this dispute. Because of our interest and concern in the matter, a meeting has been arranged which is being held in Montreal with a mediator from the Department of Labour taking part in the discussions. We hope the parties will come to an agreement as a result of this meeting.


Frank Howard: Could the minister inform the house of the name of this mediator?


Michael Starr: Mr. Duquette.


Frank Howard: In view of the fact that Mr. Duquette was unable to effect a settlement at an earlier stage, does the minister not think that someone of the calibre of Mr. Eric Taylor should attempt a settlement?


Michael Starr: Mr. Speaker, we have been quite successful in the past in our attempts to settle disputes, and we shall continue on that basis.



HOUSING


[Stage Direction]
On the orders of the day:
Gérard Loiselle: Mr. Speaker, may I direct a question to the Minister of Public Works and ask him to comment on a press report of this morning to the effect that Central Mortgage and Housing Corporation have filed an action in the courts to recover some apartments built in Montreal.


Hon. D. J. Walker (Minister of Public Works):: Mr. Speaker, I have not yet had the opportunity of reading that report.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I wish to direct a question to the Secretary of State for External Affairs. In


view of a Canadian Press dispatch of July 4 stating that an informed source said that the Canadian government has decided to defer joining the organization of American states but intends to play a bigger direct role in Latin American affairs, is the minister in a position to inform the house of the government's position in this matter?


Howard Charles Green: Mr. Speaker, during the debate on external affairs about two months ago I dealt with this question. The situation remains as it was explained at that time. The question as to whether or not Canada should join the organization of American states continues to be under examination. We have for quite a long time been strengthening our relations with the Latin American states. We now have either direct or non-resident representation in 18 of the 20 Latin American states, and shortly we may have representation in 19. On August 5 there is to be a meeting in Uruguay of the inter-American economic and social council. Canada will have observers at that meeting.


Paul Joseph James Martin: A supplementary question, Mr. Speaker. Is it intended, as mentioned in the report to which my hon. friend directed his question, that Canada shall be represented at that conference by an observer of cabinet rank? In this connection the minister will recall having said that the government was going to ask the Canadian institute of international affairs what it thought the government should do about the O.A.S. Can the minister now say whether he has received instructions from the institute as to what policy the government should adopt?


Howard Charles Green: Mr. Speaker, as usual the hon. member for Essex East asked a question and then distorted the facts and added two or three fish hooks. The hon. gentleman's statement with regard to the Canadian institute of international affairs, as I believe the hon. member very well knows, was quite far removed from the facts. I said in my speech during the debate earlier this session that we were anxious to obtain opinions from Canadians generally, including members of the Canadian institute of international affairs, which does a very useful work in considering various external affairs questions in which that body is concerned. As a result of our request for opinions we have received a great many representations. As yet there has been no decision taken as to what policy will be adopted.


Peter Francis Martin: Will the minister please answer the first part of my question, in which I inquired whether Canada would

be represented at the conference in Uruguay on August 5 by someone of cabinet rank?


Howard Charles Green: That has not yet been decided, Mr. Speaker.



CANADIAN ARCTIC


[Stage Direction]
On the orders of the day:
Howard Charles Green: Mr. Speaker, yesterday the hon. member for Laurier asked the following question:
Has the Canadian government authorized the installation by the United States of an atomic powered weather station in the Canadian Arctic?
The answer is that as part of a continuing program of meteorological research in the Arctic, the meteorological branch of the Department of Transport and the United States weather bureau arranged earlier this year for the installation and testing of a new automatic weather reporting device designed in the United States. The electrical energy required to power the device will come not from an atomic reactor but from radioactive isotopes. Heat generated by these isotopes will be converted into electrical power by means of a thermocouple. Plans call for the equipment to be installed on Graham island in the Queen Elizabeth islands, and the information it transmits will be picked up by the weather station at Resolute Bay.



INQUIRY AS TO EXTENSION OF FISHERY LIMIT

[Stage Direction]
On the orders of the day:
Mr. J. R. Tucker (Triniiy-Conception):: Mr. Speaker, I wish to direct a question to the Minister of Fisheries. Can the minister say whether active negotiations are being carried on at the present time with the nations which are fishing off the east coast of Canada to extend the fishery limit to twelve miles?


Hon. J. A. MacLean (Minister of Fisheries):: Mr. Speaker, this is a question that should more properly be directed to my colleague the Secretary of State for External Affairs.


Paul Joseph James Martin: In absentia.


John Angus MacLean: Since my colleague has found it necessary to be absent I shall bring this question to his attention to see whether an answer can be brought down for the hon. gentleman.



INCOME TAX


[Stage Direction]
On the orders of the day:
Mr. Alexis Caron (Hull):: Mr. Speaker, may I direct a question in French to the Acting Minister of National Revenue.
(Translation):
Mr. Speaker, I should like to know if the income tax inspectors have been au-
Inquiries of the Ministry thorized to ask various Montreal parish priests to sign the following letter, as reported in this morning's Le Devoir:
I, the undersigned, parish priest, authorize the income tax officers to modify, annul or change the receipts given in my parish for charitable donations.
That is a monstrosity that cannot be tolerated-
(Text):


Mr. Speaker:: Order. If the hon. member has not given notice of his question it seems to me it might more appropriately go on the order paper.


Alexis Pierre Caron: It is a very important matter, Mr. Speaker. It is highly improper for the officers of the department to proceed in the way suggested-


Mr. Speaker:: Order. I am not reflecting in any way on the importance of the matter, but the information sought is not the sort of information an hon. member might expect to have drawn out of a hat. If notice is not given the information requires to be looked up, particularly in the absence of the Minister of National Revenue.


Lionel Chevrier: Mr. Speaker, I rise on a point of order to bring to your attention the fact that this question is one of importance in certain areas of the city of Montreal. If the question raised by the hon. gentleman cannot be answered by the minister at this time it should at least be taken as notice. The practice referred to in the question is certainly contrary to the regular practice of the officers of the department. The acting minister owes it to the house if not to his departmental officials to tell the house whether or not it is a fact that what has been referred to is taking place in Montreal.


Mr. Speaker:: In view of what the hon. member has said I shall give the minister an opportunity to take the question as notice if he wishes to do so.


Hon. J. W. Monieith (Acting Minister of National Revenue):: Mr. Speaker, I have not seen the article in question, and as a consequence I am not in a position to reply at the moment.


Lionel Chevrier: Will the minister take the question as notice?



HEALTH AND WELFARE


[Stage Direction]
On the orders of the day:
Hon. Paul Hellyer (Trinity):: I should like to direct a question to the Minister of Transport. In view of the tragic death of a Hamilton

Inquiries of the Ministry lad allegedly from the use of inadequate and dangerous underwater breathing apparatus, can the minister say whether specifications for this type of equipment come within the jurisdiction of his department? If so, does he plan regulations designed to reduce the possibility of similar accidents happening in the future?


Léon Balcer: I have read of this tragic accident, Mr. Speaker. I know my department is very much aware of the various dangers connected with the use of these instruments and toys, and it has been watching very closely the sale of all apparatus of this type. As far as the legal position of the department is concerned and its responsibility in connection with these matters, I shall be pleased to investigate.



THE BUDGET


[Stage Direction]
On the orders of the day:
Mr. Erhart Regier (Burnaby-Coquillam):: should like to ask the Prime Minister a question. In the light of the disclosure made in this house yesterday as found at page 7526 of Hansard, namely that a non-Canadian, one Mr. Jacobsson, had been advised of the contents of part of the budget, does he not think the minister-


Mr. Speaker:: Order. It seems to me that
the hon. member is asking a question arising out of the debate of yesterday. As nearly as I can make out his question is not seeking factual information but is presenting a point of view which would more appropriately be brought up in the debate which is still continuing.


Erhart Regier: If I may, I should like to say this on the point of order. I believe this matter is within the administrative responsibility of no less a person than the Prime Minister. We had the Minister of Finance admitting that there had been a leak in the budget-


Some hon. Members:: Oh, oh.


Erhart Regier: -and I believe I am right in asking for the reaction of the Prime Minister.


Mr. Speaker:: Order. The hon. member is presenting an argument and not seeking information.


Lionel Chevrier: On the
point of order, Mr. Speaker, may I say this. It was clearly stated during the debate yesterday by the Deputy Speaker-and he will correct me if I am wrong-that this

was a matter which should not come up in debate. Now that the hon. member raises it in this fashion, he is told that he is out of order.


Mr. Speaker:: What is the hon. member's objection? As far as I understand the question that has been asked, it is to suggest to the Prime Minister some impropriety in what was done, and to ask him to comment on it. That is not seeking factual information, in my opinion.


Erhart Regier: I wonder whether I might ask the Prime Minister this question. Is he contemplating any action as a result of the disclosure made yesterday by the Minister of Finance?


John George Diefenbaker: Mr. Speaker, no disclosure was made. I can also tell the hon. gentleman that his suggestion regarding the Minister of Finance will receive the contemptuous answer that it deserves.


Some hon. Members:: Oh, oh.


Lionel Chevrier: Shame.


Lester Bowles Pearson: Mr. Speaker, my I ask the Minister of Finance whether he disclosed to Mr. Jacobsson-


Mr. Speaker:: Order. I appreciate the interest of hon. members in this matter, because I heard it debated last night. I do not propose to allow the debate to encroach on this period of the day. If the Leader of the Opposition has a question for factual information, although the event transpired some time ago it might conceivably be of such urgency that I would permit it. But as far as discussing the relative merits or demerits of the minister's action is concerned, this procedure is not appropriate for such a discussion.


Lester Bowles Pearson: Mr. Speaker, we were told last night by the chairman that we were not permitted to discuss this matter in this debate, that it was irrelevant and out of order. This matter came to our attention not weeks ago but last evening in the course of this debate. Therefore, Mr. Speaker, I think I have a right *-and I hope you will agree with me-to ask the Minister of Finance the question that I propose to put to him, namely whether there was a disclosure to Mr. Jacobsson of the international monetary fund of the exchange section of the budget speech before that speech was made in the House of Commons.


Donald Methuen Fleming: Mr. Speaker, the answer is no. Of course it is no. To talk about this as being a leak is just unadulterated nonsense. I made it

quite clear in reply to a question asked yesterday by the hon. member for Burnaby-Coquit-lam that Mr. Rasminsky, who is the Canadian representative on the executive board of the international monetary fund, was authorized by me to indicate confidentially and in only general terms to Mr. Per Jacobsson, the managing director of the international monetary fund, the general nature of the proposal that was to be made in the budget of June 20 in relation to the external value of the Canadian dollar.
It will be remembered that this was a statement of policy on the part of the government, not a statement on a particular measure. That was all that Mr. Jacobsson was made acquainted with in the conversation that Mr. Rasminsky had with Mr. Jacobsson in Washington on Tuesday, June 20. The following morning, as I also said yesterday, Mr. Rasminsky met with his fellow directors of the executive board of the international monetary fund and discussed with them the budget which had then been released and of which copies were then available in Washington; but Mr. Rasminsky until then was not acquainted with the budget. I pointed out last night that he was acquainted with only two chapters in the budget in general terms because of the fact that he is the manager of our exchange fund. This was just a normal consultation in regard to the management of the fund.
Therefore Mr. Speaker, to attempt to picture this as a budget leak is, I say, a travesty of the facts. I point out also, as I did yesterday, that in relation to the value established for the Canadian dollar in accordance with the article of the international monetary fund, on two occasions-


Mr. Speaker:: Order. I question the propriety of the minister proceeding beyond the bare facts of the questions which were asked. To my mind the whole discussion is not appropriate for this period.


Donald Methuen Fleming: If you will permit me to say so, Mr. Speaker, I did so only because of the use of a very accusing term, namely "leak", in relation to the budget.


Lionel Chevrier: What about the Prime Minister's term?


Donald Methuen Fleming: I simply say this, Mr. Speaker. Having regard to the use of that term, I thought it only fair that I should say that on two previous occasions in the days of the former government, when the value of the Canadian dollar was changed in relation to the articles of the international monetary fund, there were consultations with the managing director of the fund while this matter was still secret in Canada.
Governor of Bank of Canada


Lester Bowles Pearson: Mr. Speaker, may I ask the minister whether it is not a fact that when those two changes were made, they were not included in the budget speech?


Donald Methuen Fleming: Mr. Speaker, the policy that was announced in the budget speech could have been announced at a time other than during the presentation of the budget. That is not the point. It is a question of secrecy as applied to a matter related to the external value of the Canadian dollar and the relationship of that question to the provisions of the international monetary fund. The circumstances are precisely the same in that regard as they were in two previous cases under the former government.


Mr. Speaker:: Order. I hope the minister and hon. members will leave the matter at that point. I think my original view was correct. Although I may not often be right, I think I was right in suggesting that this matter was not appropriate for orders of the day.



BANK OF CANADA


[Stage Direction]
The house resumed, from Tuesday, July 4, consideration in committee of Bill No. C-114, respecting the Bank of Canada-Mr. Fleming (Eglinton)-Mr. Chown in the chair.
On clause 1-Office of governor deemed vacant.
Lester Bowles Pearson: Mr. Chairman, it is unfortunate that we begin the discussion of this very important bill when so many of the ministers, including the Prime Minister, have seen fit to leave the committee before the discussion begins.


An hon. Member:: Shame.


Lester Bowles Pearson: Last evening we on this side of the chamber did our best to get at some of the reasons underlying this bill of attainder and some explanation for the star chamber procedures which are embodied in it. That was not very easy because the minister, who gives us whatever information he sees fit, has said we are not entitled, in this court of appeal, on this issue, where the truth is not being heard, to what he considers to be confidential information. So we are restricted to what statements he sees fit to make on the various questions that we put to him in connection with a bill that is of such fundamental importance because it involves basic elements of decency, justice and fair play.
Perhaps the most important element in the consideration of this bill in committee is the reason the minister has given for the introduction of the bill, namely the impossibility of securing co-operation from the man whom

Governor of Bank of Canada the bill is designed to fire. The minister made an extraordinary statement last evening, among other extraordinary statements, when he said it was impossible to get that kind of co-operation-


Donald Methuen Fleming: What page?


Lester Bowles Pearson: Page 7521 of Hansard. They did not really try, out of respect for the sincerity of Mr. Coyne. It was quite out of keeping to ask him to put aside his views and co-operate, so they decided instead, out of respect for his sincerity, to demand that he put aside his job.
The one concrete charge levelled in this field of non co-operation, which was contradicted by the minister himself at the time and subsequently but it is still persisted in by the minister and it was repeated at page 7040 of Hansard, is this:
In the winter of 1957-58 I conveyed to him-
That is the governor:
-a request for an easing of the requirements respecting the liquidity reserves of chartered banks. That request, which was designed by the government to ease tight money, was rejected by the governor firmly and angrily.
There was certainly no indication at the time that the minister took anything but a favourable view of the policy of the bank. However, we dealt with that point last night and I do not intend to repeat it. I would like to ask the minister certain questions arising out of the statement he has made.
The minister said that this request was made-and it is a very important one, because on this request hangs the government's case-in the winter of 1957-58. I would like to ask the minister precisely when this request was made, not "in the winter of 195758". When was it made? Under what circumstances was it made? What were the details of the request made by the government of the governor in this field of monetary policy, for which at that time the government said they had no responsibility?
I would like to ask the minister what reason was given by the governor at that time for, as he puts it, rejecting this particular request. I would like to ask the minister whether he took any further action or made any further request of the governor or any servant of the bank, or any of the banks, respecting this particular matter at that particular time. If so, with what results?
I ask these specific questions of the minister in the light of the statement made on June 15 by the governor of the Bank of Canada when he said:
I repeat again that at no time has the Minister of Finance criticized or expressed a difference of opinion with the monetary policy being pursued


by the Bank of Canada which the bank and its board of directors were entitled to assume carried the tacit approval of the government.
Now the minister has told us there was one time-and he does not give us details of the time, place or circumstances-away back in the winter of 1957-58 when the governor angrily and firmly refused such a request. Now we should like to have information about that.


Donald Methuen Fleming: I supplied information last night with regard to that occasion. I said it occurred in my office in this building, and I referred to those who were present, other officials of the Bank of Canada as well as the deputy minister of finance.


Lester Bowles Pearson: What date?


Donald Methuen Fleming: I shall not attempt to fix the date precisely. The occasion was, I would say, very late in 1957. It would be November or December of 1957, and the occasion was one on which I conveyed to the governor a request of the government for a reduction in the liquidity reserve requirements with reference to the chartered banks, which then was 15 per cent, having been advanced to that figure at the time of the imposition of the tight money policy a year and a half earlier.
I have said that this was a definite proposal and a definite request, and it was rejected. It was rejected at the time. The governor said he did not consider it sound that there should be any reduction in the prevailing 15 per cent requirement. He rejected the proposal firmly. As I said last night, he rejected it firmly, flatly and angrily. That made it clear that the governor felt himself under no obligation to give effect to requests of the government with respect to monetary action, because this was a definite request which had obvious and immediate implications for monetary policy.
From that point on, as I have said, the governor having taken that position, I turned to examine precisely my authority in this situation, and I found that under the existing statute I had been given by parliament no express authority to issue directives to the governor of the Bank of Canada in relation to such questions. I found also that the provisions of the Bank of Canada Act are perfectly clear in vesting in the bank the right and authority to create money. There is no authority reserved to the government in that regard.
That has been basic in the relations between the government and the governor from that time to this. I have said that the authorities of the bank-it was not the governor only-were always prepared to indicate what steps they were taking in the monetary field

or to defend what they were doing; but as to the authority, it had been clearly established right from the beginning that the government had no authority over the Bank of Canada in relation to such matters.


Mr, Pearson:: Well, the minister has not dealt with my question. He has dealt with some things which I did not raise, though they are very interesting. He has indicated, for instance-and this is of some importance in the light of certain disclosures last evening -that he was not sure of his authority in this field, apparently, until this particular incident took place.


Donald Methuen Fleming: No. This is what I said. In line with what I had said while in opposition, I thought there was some authority possessed by the government in this field. I was brought up very short at that meeting. That led me to examine the statute and to conclude that no authority had been given to the government in this field to give directives to the bank.


Lester Bowles Pearson: Well, until this incident the minister had thought he had some authority in this field. It was not very long before this meeting that he was very clear and certain about the authority of the government in this sphere. When this meeting took place he was of the opinion that he might have some authority, but then he discovered he had no authority or responsibility in the field of monetary policy, at least until last evening.
May I ask the minister whether this clash- and we certainly have the right to call it a clash in view of the terms the minister has used, because this was a request which was firmly and angrily rejected by the governor- took place before or after November 13, 1957? Hon. members may recall that on November 13, 1957 the minister, replying to the hon. member for Coast-Capilano as reported on page 1063 of Hansard, said he was not aware of anything that could be called a clash between the government and the bank.
I should like also to ask the minister, while we are on this basic incident whether a record of any kind was made of this meeting, the conclusions of which were so important in the minds of the government that three and a half years later, based largely on those conclusions, they decided to introduce an act of parliament to discharge the governor of the Bank of Canada without giving him the right to be heard. This obviously was an important meeting. This is the incident upon which the government builds up its accusation. It was years ago, but it is on this basis that the government decided that the governor had to go. As I say, this was obviously a very important meeting because of the important and responsible people who
Governor of Bank of Canada attended it, and I ask if any record was made of this meeting, which the minister thinks may have taken place in December, 1957; whether there is anything which he could disclose from such a record.
I should also like the minister to deal with the other question I have asked him. I should like the hon. gentleman to tell us whether any further requests of this nature were made of the governor or of any servant of the bank, or of any of the banks; and if so, what was the result of any such request which was made subsequent to this meeting which took place some time in the autumn, presumably in December of 1957.


Donald Methuen Fleming: I am not sure that I followed all the points raised by the Leader of the Opposition, but if I overlook anything perhaps he will draw it to my attention. No communication in writing passed between the governor and myself in relation to this incident. Any communication of such a nature would, of course, have been confidential. I have drawn attention to this matter because it established very clearly the fact that the governor held a different view from the one I had entertained and had expressed while in opposition as to the relationship of the government to monetary policy.
It was made quite clear that the governor made the decisions in relation to action in the monetary field and considered himself under no obligation whatever to accept directives from the government. It was a precise proposal which I put before him, and I did so on behalf of the government. It was not something that I put to him on my own account. It was something which was conveyed to him-and he was so informed-coming from the government. He rejected it. It was perfectly clear that in the view of the governor he was under no obligation whatever in the sphere of monetary action to accept directives from the government. As I say, this proposal which the government put forward was rejected flatly and angrily.


Lester Bowles Pearson: Does the minister not agree that the liquidity requirement, and that is what we are talking about, was not approved by the governor but was accepted voluntarily by the chartered banks on the suggestion of the government? Does the minister not recall that in the Bank of Canada report of 1955 there was included the statement that the function of a minimum liquid asset ratio is to increase the effectiveness of monetary policy in moderating a too rapid expansion of credit? A little further on, at page 16 of this report, appears the following statement:
Alter discussion, the banks have agreed to work to achieve by May 31, 1956 a minimum liquid asset

Governor of Bank of Canada ratio of 15 per cent which they will endeavour to maintain on a daily average basis from June on.
Is the minister really trying to tell this committee that on the basis of this one meeting, in respect to matters about which the minister is so vague that he doesn't even know when it was held and has no record of it, but suggests it was in 1957, sometime in September, the government in 1961 has decided to introduce a bill to discharge the governor of the Bank of Canada?


Donald Methuen Fleming: Mr. Chairman, the Leader of the Opposition would perhaps be closer to accuracy and orderly procedure if he would stick to his questions instead of jumping to conclusions, because the conclusions are so definitely wrong. He does not wait for an answer to get the facts but jumps at conclusions and consequently makes statements which are quite at variance with the facts.


Paul Theodore Hellyer: If he waits for an answer he will grow old in the process.


Donald Methuen Fleming: Now, Mr. Chairman, may we proceed with the answers to the questions? The Leader of the Opposition, it was quite obvious as soon as he started, has obtained and accepted in full Mr. Coyne's version of the increase, at the time of the application of the tight money policy, a year and a half before we came into office, in the liquid reserves of chartered banks from 8 per cent to 15 per cent. Mr. Coyne, in the report which the Leader of the Opposition read and on other occasions, has taken the ground that this was agreed to or undertaken voluntarily by the chartered banks.
I have to say that this is a matter of the clearest kind of dispute between Mr. Coyne's version of what happened and the version of the chartered banks, because I had occasion in those days to confer with a number of the chartered banks on this question, and the answers I invariably received from them were that this was imposed upon them by Mr. Coyne and they did not agree to it. They firmly disagreed with the statement which appeared in the report of the governor of the bank which the Leader of the Opposition has read. That is the fact, and that is the difference in the statement in that regard which is wide and complete.
It will be remembered also by hon. members that when the tight money policy was instituted a year and a half before we came into office, this increase from 8 per cent to 15 per cent in the liquid reserves requirement of the chartered banks obliged the chartered banks to market, at a time when the market was not strong, vast holdings of Dominion of Canada bonds, and that the

chartered banks in the course of that enforced liquidation sustained very heavy losses. This was a matter, therefore, that the banks regarded as of some considerable importance. They have not forgotten that on that occasion, as they have made very clear, a policy was imposed by the governor of the Bank of Canada which obliged them to liquidate their substantial holdings, running into hundreds of millions of dollars in dominion government bonds, with consequent very heavy losses. From that time on the chartered banks have naturally been much more cautious in their lending policies, because they had no assurance that there would not be a repetition of what had happened to them in that unhappy experience of 1955-56.


Paul Joseph James Martin: Mr. Chairman, when answering a question the Minister of Finance roams all over. This is evidenced by the fact that the last part of the answer he has just given has nothing whatever to do with the question put by the Leader of the Opposition. He is tending to confuse the issue. My question is, having seen the governor of the Bank of Canada around November, and the governor having taken the position that he did, why did the minister then go to the banks themselves a short time thereafter and ask the banks to do the very thing which he had asked the governor to do and which the governor had said was a matter that belonged to the banks?


Donald Methuen Fleming: What did I ask the
banks to do?


Paul Joseph James Martin: You asked the banks to do precisely what you had asked the governor to do.


Donald Methuen Fleming: I did so because the chartered banks-


Paul Joseph James Martin: Please answer the question very simply.


Donald Methuen Fleming: -considered in this respect, quite at variance with the statement of Mr. Coyne, that a requirement had been imposed upon them to increase from 8 per cent to 15 per cent, and hold at 15 per cent, their liquid reserves.


Paul Joseph James Martin: What statutory authority was there for that?


Mr. Pitman:: Mr. Chairman, 1 should like to continue the matter referred to by the Leader of the Opposition. It seems to me we are seeking a break-through in the wall, although I do not think we are getting very far. Last night I listened to the remarks of the Minister of Finance, and his words had a very familiar ring. I went back to my office and looked up his former words, and

found that he was using exactly the same phrases and words as before, just as though it was a replay of the same record. There is no new information forthcoming, and I suggest this is becoming an exercise in futility. I suggest the reason for this is that whenever the Leader of the Opposition seeks to ferret out information the answer is given that the information is confidential. I suggest that the minister is being very selective in regard to what he determines is confidential.
Last night the hon. member for Burnaby-Coquitlam asked for particular advice which the governor had given to the Minister of Finance in respect to debt management in relation to the present budget. I suggest this is an extremely important matter, because the minister has stated in this house that the reason the governor of the Bank of Canada must go is that the expansion budget which has been presented is opposed by the governor and, therefore, he must be relieved of his duties in order that this expansion budget may be brought to a successful conclusion. The main reason given for his having to go is his lack of co-operation with this expansionist government.
We have no way of finding out what the governor of the Bank of Canada advised in relation to this budget because the Minister of Finance refuses to give the information on the ground that it is confidential. As an example of that, when the hon. member for Burnaby-Coquitlam asked for information, the Minister of Finance said the following, as reported at page 7520 of Hansard of July 4, 1961:
That hon. member asked me specifically to disclose the advice given by Mr. Coyne to the government in relation to certain questions of debt management with respect to the money-raising program for the present year. It would he highly improper on my part to disclose advice given to me or to the government by the adviser in this respect,-
Then he went on to say the following:
It would be very unfair either to the adviser in this particular case or the advisers of the government in other cases if ministers were to disclose in the house advice of a very confidential nature given to them in this regard.
When it was suggested that the information was being hidden the minister then said the following, as reported on the same date:
-it remains hidden for very good reasons of public policy. It has always been so under our system of government.
I should like to point out that although this information is considered confidential, the advice given by the governor of the Bank of Canada in 1957-58 apparently was not confidential, because the Minister of Finance has brought that information to the attention of this house. The minister stated that the 90205-6-477
Governor of Bank of Canada governor refused to accept certain proposals by the government, angrily and completely, which apparently brought the Minister of Finance up very short because he went into very great detail, as reported at page 7524 of Hansard of July 4, 1961, to describe what took place at this meeting held in his office in this building, which would appear to be a regular meeting and which would be confidential. I think the minister is being rather selective in considering what is confidential and what is not confidential.
The Leader of the Opposition this morning has presented the one shred of evidence of a real difference between the government and the governor of the Bank of Canada which has given rise, four years later, to a desire for his resignation. I should very much like to know why the advice given by the governor of the Bank of Canada in 1957-58, which was revealed by the Minister of Finance, not by the governor of the bank, was not considered to be confidential.
In all the letters of the governor of the Bank of Canada he has stated that there has been complete co-operation without any area of disagreement. He has also stated he was willing to co-operate in regard to the present budget, and that he has desired to co-operate all down the line. Why is it, I ask the Minister of Finance, that the advice of the governor of the Bank of Canada in 1961 is confidential but was not confidential back in 1957 and 1958?


Donald Methuen Fleming: The hon. member has not appreciated the difference in what is involved here. I was asked last night to disclose advice received from the governor of the Bank of Canada in relation to a matter of debt management and I declined to give that information. In that realm the Bank of Canada acts as adviser to the government. The government takes full responsibility for the decisions, and it would be highly improper under such circumstances to disclose the advice received.
The incident which has been discussed here this morning was not a matter of advice on the part of the governor at all. The whole point is that this was the field in which he made decisions. I referred to the fact that a particular request had been made by the government and a decision had been taken by the governor. There is a great difference between advice in the one case and a decision in the other, and it is the decision that I have given to the house.


Walter George Pitman: Would the conversation that took place at that particular meeting in 195758 not be regarded as confidential by those who attended the meeting?

Governor of Bank of Canada


Donald Methuen Fleming: I have not gone into it in extended detail. I have given to the house what was an essential fact, that the government made a specific request for a course of action. This is fundamental to what has happened since, and it is fundamental to all this discussion that has gone on at this stage and earlier stages of this matter. The governor gave the answer that I have related to the house. It was a decision; it was an act, Mr. Chairman.


Walter George Pitman: Would the Minister of Finance state whether at any other time there has been a fundamental disagreement between the Minister of Finance and the governor of the Bank of Canada when the governor has angrily refused to co-operate in some proposal?


Donald Methuen Fleming: Mr. Chairman, this was the decision-


Paul Joseph James Martin: Answer the question simply.


Donald Methuen Fleming: The hon. member for Essex East apparently is going to determine what shall be the questions and what shall be the answers. I suggest to him that he is responsible for his own questions, the hon. member for Peterborough is responsible for his questions, and I am responsible for the answers I am giving to the hon. member for Peterborough. This was the decision that set in their respective places the authority of the government and the authority of the bank. It was made perfectly clear in the light of that decision, a firm decision taken by the governor on that occasion, that the government had no authority to give him directives in relation to action in the monetary field. That was very definite and clear and that was why, as I say-


Paul Joseph James Martin: That is not the point at all.


Donald Methuen Fleming: -having regard to the firm decision that he made at that time in rejecting a government request, I was thrown back on the statute and found in the statute that no express authority was given to the government, to the Minister of Finance, to give such directives. With regard to what the governor has said about co-operation since the request was made for his resignation, may I say that I think anything that was said after May 30 in these letters by the governor has to be read in the light of the fact that he had been asked for his resignation and he was even then building up his case.
As I have said in the house on several occasions already, these letters that he was writing were written in the course of creating

self serving evidence. They abound in statements of his virtue. In a situation of this kind what is surely the best guide is not what he has said after the request for his resignation but what he did, and I have related to the house what he did on this occasion which set the pattern and set the positions of government and governor in their places with respect to authority in the field of monetary action.


Lionel Chevrier: May I ask the minister if this was the first fundamental difference that took place between the government on one hand and the governor on the other hand?


Donald Methuen Fleming: I would say yes. This was quite fundamental, Mr. Chairman. It certainly rocked me to find that this request from the government was firmly rejected, and angrily rejected.


Lionel Chevrier: What did the minister do in the face of this attitude taken by the governor?


Donald Methuen Fleming: There was nothing I could do. As I have said, I went to the statute to see if I had the authority that previously I had assumed that the government had, which was the basis of the view I had expressed in the house when in opposition, particularly in the debate of 1956, and I found there no express authority given to the government to give directives to the governor of the Bank of Canada.
It is a fact, Mr. Chairman, that in this respect the Bank of Canada Act does not follow the terms of the Bank of England act. Under an amendment to the Bank of England act made in 1945, I think it was, express authority is given to the treasury, which means to the chancellor of the exchequer, to give directives to the governor of the Bank of England, but there is no such authority given to the government under our Bank of Canada Act, or given to the Minister of Finance in relation to the Bank of Canada.


Lionel Chevrier: Then I should like to ask the minister this question. Since there was, as he put it, a fundamental difference between the government on the one hand and the bank on the other, why did he not then ask the governor to resign?


Donald Methuen Fleming: Mr. Chairman, I have already discussed that point and answered that question at least half a dozen times, I am sure. If we had known at the end of 1957 that in the year 1961 we were going to face the situation with which we are now confronted, then certainly I am quite confident that the government at that time would have decided to ask parliament to deal with this situation if the governor refused to resign. But, Mr. Chairman, we did not foresee that matters would move to this climax. If we

had known that, it we had had the benefit of that foreknowledge, then obviously I think my colleagues would have agreed that we should have acted then. We were in a situation then, Mi. Chairman. We wanted above all things to keep the Bank of Canada out of political controversy.


Paul Joseph James Martin: You put it in.


Donald Methuen Fleming: No, it is not the
government that put the Bank of Canada into political controversy. It is the governor of the Bank of Canada by his ill-advised series of speeches in the fiscal field-


Paul Joseph James Martin: Which you approved.


Donald Methuen Fleming: -exploited by the opposition in this house.


Paul Joseph James Martin: Which you approved.


Donald Methuen Fleming: I did not.


Paul Joseph James Martin: You did so.


Donald Methuen Fleming: Mr. Chairman, the hon. member for Essex East says that I approved the speeches-


Paul Joseph James Martin: You certainly did.


Donald Methuen Fleming: -of the governor of the Bank of Canada. I have said in this house and I repeat now that never did I approve those speeches of the governor of the Bank of Canada. Never were they referred to me. Never did I know when he was going to make speeches.


Paul Joseph James Martin: You defended his right to make them.


Donald Methuen Fleming: Mr. Chairman, I never defended those speeches. I never defended one word of the content of those speeches. I was not going to have the hon. member for Essex East put me in the position which he would have loved to put me in at that time, of trying to be a censor and throttler. I always explained my position in the house, and the record shows it. Look at the Hansard record for February 21. Never did I take any responsibility for what the governor of the Bank of Canada was saying. Always I disclaimed any responsibility for what the governor was saying.


Lester Bowles Pearson: Mr. Chairman, when we criticized those speeches in this house the minister attacked us, as he did last night, for daring to criticize them. He came to the defence of the governor's right to make speeches, and now he has the effrontery to get up and say that he did not approve those speeches-


Lionel Chevrier: Hypocrite.
90205-6-477J
Governor of Bank of Canada


Lester Bowles Pearson: -which caused so much trouble that he asked the governor to resign.


Donald Methuen Fleming: On a question of privilege, Mr. Chairman, the hon. member for Laurier has just now said-I do not know whether it got on the record-from his seat while the Leader of the Opposition was speaking, "hypocrite".


Paul Joseph James Martin: I said that earlier myself.


Donald Methuen Fleming: That word has been ruled to be unparliamentary. I do not know whether it was directed to the Leader of the Opposition or to myself but it does not matter to whom it was directed. It is unparliamentary and it should be withdrawn.


Lionel Chevrier: Mr. Chairman, the point is that the attitude of the minister has been hypocritical in this matter. I made the statement which the minister said I made and I wish to explain how I came to make it.


Donald Methuen Fleming: Mr. Chairman-


Lionel Chevrier: Just a moment. I am speaking to a question of privilege.


Donald Methuen Fleming: An explanation of an unparliamentary word is quite out of order. The unparliamentary word must be withdrawn under the rules of the house.


Lionel Chevrier: Under the rules of the house, unless closure is to be applied by hon. gentlemen opposite, an hon. member has the right to reply. What I am saying-


Donald Methuen Fleming: There is no right to repeat an unparliamentary word.


Lionel Chevrier: I point out to the minister that he has swallowed himself, has backtracked and has made a complete turnabout with respect to his attitude in this matter. That is what prompted me to say that the conduct of the minister was hypocritical.


Mr. Churchill:: Withdraw.


The Deputy Chairman:: Order. I am sorry to interrupt the hon. member who has the floor. There is no way on my part of knowing whether or not the word "hypocritical" found its way into the record. I was listening closely to the Leader of the Opposition. If the hon. member for Laurier was successful in placing the word "hypocritical" on the record I am sure he would wish to withdraw it, because under our rules it is considered unparliamentary.


Lionel Chevrier: Mr. Chairman, I shall abide by your ruling. I withdraw the word. I point out to the minister, however, that he has backtracked and swallowed himself on this issue. Now I turn to the question-

Governor of Bank of Canada


Mr. Macdonnell:: Mr. Chairman, would the hon. member permit a question? Is it conceivable that the hon. gentleman does not understand the difference between the Minister of Finance defending the right of the governor to speak and the minister approving what the governor said? Surely the difference is clear as crystal, and both the hon. member for Laurier and the Leader of the Opposition must recognize that.


Lionel Chevrier: Apparently, Mr. Chairman, the hon. member for Greenwood has not been listening to the discussion.


James MacKerras Macdonnell: I have been listening very closely.


Lionel Chevrier: I suggest that the hon. member for Greenwood has not been listening. An attempt is now being made to fire the governor-


John Whitney Pickersgill: Because of his speeches.


Lionel Chevrier: That is precisely what is happening. The minister and the government are trying to fire the governor for making those public speeches which the minister defended over a period of days here in the House of Commons.


James MacKerras Macdonnell: Does the hon. member not understand the explanation of the minister to the effect that the minister did not defend the speeches but the right of the governor to speak?


Paul Joseph James Martin: Mr. Chairman, there can be no doubt about what the minister said. I direct the attention of hon. members to the words of the Minister of Finance to be found at page 2258 of Hansard of February 21, 1961:
-may I say that I have no right of censorship over the speeches of the governor of the Bank of Canada. He does not refer them to me. Why should he do so? This is a free country. He makes his own speeches and chooses his own themes. I read these speeches afterwards as does the Leader of the Opposition. It is sometimes forgotten by hon. members opposite that this is a free country. I trust that I am not to be held responsible for what may be said by the governor of the Bank of Canada when he exercises his right as a citizen to make speeches.
Surely, after this, the hon. member for Greenwood is not going to defend the minister who put himself in a most ridiculous position in the last few minutes.


James MacKerras Macdonnell: Mr. Chairman, there is not a word in what was read by the hon. member for Essex East which indicates approval on the part of the Minister of Finance of the content of the speeches made by the governor.


Peter Francis Martin: That is not the
point.


James MacKerras Macdonnell: But that is the point. There is not a word of approval in what was read.


Lionel Chevrier: The point is quite clear, Mr. Chairman.


Some hon. Members:: Sit down.


Lionel Chevrier: I was attempting to ask a question. I had the floor when I was interrupted by the hon. member for Greenwood, who did not like the attitude I was taking. I was attempting to make clear that the minister and the government are trying to fire the governor of the Bank of Canada for exercising the free right of the governor to make these speeches. That is exactly what is happening.
I now come back to the question I wished to ask earlier. In the light of the fundamental difference which the minister tells us existed between the government and the governor, why did not the Minister of Finance amend the Bank of Canada Act to meet the position? I asked the minister why he did not request Mr. Coyne to resign, and the minister in replying gave a long, empty answer. I now put this question. Why did not the minister amend the Bank of Canada Act under the circumstances referred to?


Donald Methuen Fleming: Mr. Speaker, I shall begin first with the observations the hon. member for Laurier has made. It will be noticed that he made some accusing observations and then went on to ask a question. I hope when I deal with his observations the hon. member will not say I am delaying an answer to his question. I shall deal with his question.
What I have been saying in the course of this debate is fully consistent with what I said in the house on February 21 in the passage read by the hon. member for Essex East.


Lionel Chevrier: That is not so. That is not true.


Donald Methuen Fleming: Never, Mr. Chairman, did I assume any responsibility for what the governor said. I have always disclaimed responsibility for what the governor said. On this and on other occasions the governor never submitted to me his speeches. He never asked me if he should or should not accept invitations to go out and make public speeches. He never referred these questions to me. I firmly declined then and on other occasions, when hon. members of the opposition sought to exploit the observations of the governor of the Bank of Canada to accept any responsibility for what the governor was saying.
Hon. members opposite know very well that what the governor was saying was clearly at variance with government policy. As I said

yesterday, Mr. Chairman, if it had been in harmony with government policy there would have been no point whatever in their reading the speeches of the governor of the bank or trying to make them an issue in debate on the floor of this house. The point they were trying to put forward was that the governor was out making public speeches not in relation to monetary policy but in relation to fiscal policy, a very thorny subject at any time and one always charged with political differences.
Hon. gentlemen opposite brought this question into the house. Of course they realized that the governor was making speeches on fiscal questions in terms completely at variance with the policies of the government. Hon. members opposite sought to embarrass the government, if they could, by bringing on to the floor of the house the speeches of the governor. They attempted to create confusion and the impression that this was someone speaking with some countenance on the part of the government for what he said.
I have made the record very clear in this respect. Never did I accept any responsibility for anything the governor said. As to the suggestion that I should have muzzled the governor-


Lester Bowles Pearson: The minister muzzled him in March.


Donald Methuen Fleming: -that I should have called him in and given him an order-


Lester Bowles Pearson: Which the minister did.


Donald Methuen Fleming: -I wish to make it clear that this is exactly what the hon. gentleman opposite wished me to do.


Paul Joseph James Martin: The minister muzzled the governor on March 18.


Donald Methuen Fleming: Hon. gentlemen opposite sought to put me in a position where it would appear that I was telling the governor what he should not say. Mr. Chairman, do you see the position in which the hon. gentlemen opposite wished to place me? They sought to create the impression that I was attempting to use the governor, simply allowing him to say things which might be approved by the government but denying him the right to say things which could not be approved by the government or which could be regarded as being critical of the government or at variance with government policy. That is the position in which hon. gentlemen opposite sought to put me, and I was not willing to be put in that position.


Lionel Chevrier: The minister is in a much worse position.
Governor of Bank of Canada


Donald Methuen Fleming: I took the position of disclaiming responsibility for what the governor was saying. As for responsibility of the governor for what he was saying, that responsibility rests solely with the governor. Anyone who holds this high office knows perfectly well that when he goes out and makes public speeches critical of government policy, the responsibility for that course of action is his, and the responsibility for what course of action may follow is, in the first instance, his responsibility because he is the one who has brought this on himself and has done it deliberately.
When I say deliberately, Mr. Chairman, there can be no doubt that the governor must have been aware that he was making speeches on fiscal policy that were not in accord with the government's views. We had a situation in which the governor was out telling the people in public speeches to tighten their belts, that there should be a restriction in trade, at a time when the government was seeking to expand Canada's external trade. He addressed himself to questions of investment, asking this country to cut itself off from the inflow of capital, capital which over the years-as I was saying in those days in various speeches, including the budget speech-has done a great deal to assist in the development of the resources of this country.
I had expressed the opinion in various speeches, including the budget speech, that the people of Canada did not wish to see a slowdown in the development of their resources, but wished to go ahead with the development of their resources. This was in line with the view of the Canadian people, which, if you wish to use an expression which has become current in this debate, reflected an expansionist attitude toward the development of Canadian resources.
There can be no doubt in the mind of anyone about the conflict in views here as between those which the governor was declaring from the housetops in a series of public speeches right across the country and those which the government was expressing on such questions.
There has been on my part no inconsistency. The hon. member for Laurier talks about somersaulting. Mr. Chairman, it is not the government that has turned a somersault in this situation; it is the opposition which has done so, particularly the Leader of the Opposition. This is where we have seen the most extraordinary political acrobatics that I am sure this House of Commons is likely to see for many a day.
You will remember, Mr. Chairman, that when the Leader of the Opposition spoke in that debate we had on February 20, on an
7562	HOUSE OF
Governor of Bank of Canada opposition amendment to a government motion to resolve the house into committee of supply, he made some statements about this matter, and he made them in the light of the fact that the speeches of the governor were contradictory of government policy in the fiscal field. You will remember, Mr. Chairman, that it was against that immediate background, in the very context of that situation, that the Leader of the Opposition said this, as found at page 2201 of Hansard:
If the governor cannot agree with the general policy which the government desires him to implement, then the governor has no alternative, of course, but to resign.
Those are not my words. Those are the words of the Leader of the Opposition. He had evidently forgotten those words.


Lester Bowles Pearson: No, I have not forgotten them.


Donald Methuen Fleming: Apparently he has now constituted himself a champion of Mr. Coyne, the man who, as he was saying back on February 20, ought to resign when there is a difference of opinion. He said where there is a difference of opinion the governor ought to resign. Now he is saying that the governor ought not to resign.


Paul Joseph James Martin: Not at all.


Donald Methuen Fleming: Oh, Mr. Chairman, did you hear that? I hope that interjection got into the record of Hansard. When I said that the governor should resign in the light of the statement made by the Leader of the Opposition on February 20, the hon. member for Essex East said "Not at all".


Paul Joseph James Martin: You have confused the issue.


Donald Methuen Fleming: Oh, Mr. Chairman, the hon. member for Essex East cannot have it both ways. There is a fundamental difference here. Everybody in this House of Commons knows it. The hon. member for Essex East knows it as well as do those members of the House of Commons who are fair in their judgments.


Some hon. Members:: Oh, oh.


Donald Methuen Fleming: He knows it perfectly well, Mr. Chairman. Yet now that we have the very situation about which the Leader of the Opposition was talking on February 20, when he said that under such circumstances the governor ought to resign, they not only do not want him to resign but, when the government is driven to the extreme limit of asking the governor to resign, not only do they fail to support the government and in that way support what the Leader of


the Opposition said in this House of Commons on February 20, but they swallow themselves; they turn their backs on what was said by their leader on February 20; they become political acrobats the like of which have not been seen in Barnum and Bailey or any other circus. They now say that not only should the government not have asked for the governor's resignation but, now that the matter is before parliament with the full knowledge that there are these fundamental and far-reaching and irreconcilable differences between the government and the governor-they now say that parliament should not proceed to declare this office vacant. Such is their idea of consistency, Mr. Chairman. I do not think this House of Commons is likely to see a repetition on the part of any other members of the house of such political acrobatics as those we have seen on the part of hon. members opposite in the course of this discussion.


Mr. Deschalelets:: Why do you not answer the question? Your speech is over now.


Donald Methuen Fleming: Having dealt in part with the observations of the hon. member for Laurier with which he preceded the question he asked, may I say this in relation to the question. He asks me why I did not amend the Bank of Canada Act. May I say that parliament is the body that amends the Bank of Canada Act.


Some hon. Members:: Oh, oh.


Donald Methuen Fleming: We could have come to parliament in those days and could have asked parliament to amend the act. I have said already, I think about seven times, that had we foreseen that in 1961 these fundamental differences would move to the point to which they have moved, then certainly we would have acted sooner. Let there be no doubt in the mind of anyone about that matter. However, I have said that we hoped this situation could be lived with until the end of 1961.
That was our hope. If there were not to be a change in the office of governor we would have had to legislate in very precise terms in order to effect what was required in this situation and in a manner in which parliament does not normally legislate. Therefore there was not any possibility, as we saw it, of any final solution of this matter apart from detailed and extensive legislation or a change in the office of governor.
I have said that we hoped to live with this situation until December 31, 1961. That became impossible in the light of the interests of the country in the spring of 1961. Having regard to the necessity for asking parliament to approve a broad and comprehensive

program of effective action, the kind of program that required the effective working together of the authorities in the fiscal field and the authorities in the monetary field, and being faced with the necessity of having the most complete co-operation between government and Bank of Canada to implement this program it was for that reason that it became impossible to live with this situation until December 31, next.


Lester Bowles Pearson: Mr. Chairman, the minister's long harangue reminds me of that species of cuttlefish which, when in fear or in trouble, throws out an inky smokescreen substance and in the resulting darkness and confusion hopes to escape. The minister's 30 minute harangue is not going to allow him to escape from the questions which he will not answer.


Donald Methuen Fleming: Thirty minutes? I spoke for about 10 minutes.


Lester Bowles Pearson: However, the minister's
speech makes it necessary for us on this side of the chamber to reply to these inaccurate and hypocritical observations of his.


Some hon. Members:: Oh, oh.


Gordon Minto Churchill: Wait a minute.


Donald Methuen Fleming: Mr. Chairman, you have already dealt with this question. I do not know whether there is very much difference between calling a man a hypocrite and saying that he makes hypocritical assertions. If that language is parliamentary, then of course it will have to be parliamentary for all hon. members.


Lester Bowles Pearson: I will withdraw the word "hypocritical", Mr. Chairman, in order to save time. I will put it this way. We shall have to deal with the minister's manipulation of facts and figures.


Gordon Campbell Chown: Perhaps on that happy note I should call it one o'clock and leave the chair.
At one o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 2.30 p.m.
Lester Bowles Pearson: Mr. Chairman, the remarks of the minister this morning commenting, as he said, on certain observations on this side of the chamber before he dealt with questions that had been submitted to him require a word or two on my part. I hesitate to go over this old ground again which surely has been covered enough. But the minister quoted my statement, as an example of my inconsistency, that when there is a dispute between the
Governor of Bank of Canada governor of the bank and the government, the governor of course, in those circumstances, should resign. I do not withdraw that statement or any other statement I have made along those lines. That is quite clear, of course. But this situation is not the kind of situation which the minister would have us believe it is.
In the first place the governor of the bank has said he has never refused to co-operate with the government, and the illustrations of non co-operation in the last two years which the minister has brought forward are so absurd that, in default of better evidence than that, we accept the governor's word. If the governor says he has co-operated and the minister says he has not co-operated, surely the only issue is that in a dispute of that kind, before the governor resigns-and if his usefulness is destroyed by the government, naturally he has to resign-he is entitled to his day in court. That is the issue. By "court"
I mean an appearance before a committee of the House of Commons which is being asked by legislation to throw him out of his job. Could there be any more simple and elementary issue than that?
The minister says the governor must resign, although he says the governor has cooperated, "because we have in our view had a dispute with him". And that is the end; he is not to be allowed to talk before those who are accusing him. That is the issue and no effort on the part of the minister can conceal or confuse-well, perhaps he can confuse the issue. Another point raised by the minister this morning and which can be dealt with very quickly indeed is that of the speeches made by the governor, which the minister has put forward as a main reason why the governor should resign.
The record on that matter is perfectly clear. It is quite true that the governor made these speeches, from 1959 especially. It is quite true that we criticized some of these speeches in the House of Commons. We were worried about them. It is quite true that the minister was not worried about them, because he did not take issue with any of them in the House of Commons. After years, in March, 1961 the minister finally admitted that he had some responsibility in this matter, having previously disclaimed any responsibility. In March of this year he asked the governor of the bank to stop making these speeches, especially when the governor began to talk about full employment and what could be done to bring about full employment. The governor was told to stop making these speeches, and he stopped making them. That is that.
Then there is the question of consultation and communication between the minister and governor. There is no doubt it has broken
7564	HOUSE OF
Governor of Bank of Canada down, but the responsibility for that breakdown, again as far as we know-because we have not all the evidence; we cannot depend on any one side-the minister must take his responsibility. He talked about the old days when the governor of the bank was in close and constant touch and consultation with the government of the day, which was a Liberal government. They were Liberal ministers of finance. That is perfectly true. That applied also to this governor who is now being discharged. If this consultation and communication broke down-as obviously it did, because the minister had no consultation with the governor of the bank even to the point of talking with him about the budget-that is a deplorable situation for which the government must take its share of responsibility.
The main reason for this act of parliament, brought forward again by the minister this morning, was the angry and firm refusal of the governor back in November or December, 1957 to take certain action at the direction of the minister in respect of the reserves of the chartered banks; an action which he had no authority to take under the Bank of Canada Act; an action which would have been purely voluntary on his part if he had taken it; an action which the government itself could have taken by intervention in the affairs of the bank or by altering the Bank of Canada Act.
The governor of the Bank of Canada at that time did not take this action, for which he had no statutory authority at all, and the minister because he took this position in 1957, out he goes in 1961. Over all these years the governor has borne the blame for that. There it is, Mr. Chairman. There is the case made by the minister against the governor of the bank.


Paul Theodore Hellyer: There is no case.


Lester Bowles Pearson: We do not know about this case because we get only one side of it. We do not defend, we do not accuse the governor in respect of these matters. All we do is ask that he be given the right to be heard in respect of the charges made against him; charges which have not been supported by effective or impressive evidence in this committee. I should like to ask the minister a few specific questions.
As one of the matters which relates to this bill is the matter of pension, a pension which was provided by a decision of a committee of the board of directors, all nominees of the present government, and approved unanimously by the full board of directors, most of whom were appointed by the present government, this is a pension about which all of us who are worried about the way things 

are done in these matters should know something. I shall ask the minister two or three questions and then give him the opportunity to reply to them. I should like to ask the minister, first, why he found it necessary to raise this pension question on May 30. He himself stated, in contradiction to what has been stated elsewhere-and this is the kind of contradiction which should have been resolved before a committee where evidence could have been taken-as reported at page 6353 of Hansard that the governor of the bank raised the question of the pension with the words: "Well, what about my pension?" Is that the only way in which this came up, and is ^ it the first way it came up in this discussion? Was that the first time, on May 30, 1961, that the pension issue was ever raised by the minister with the governor of the bank? May I also ask the minister whether the action taken on February 15, 1960, on pensions when this matter was established by the board of directors was approved by all the members of the board of directors? Was any advice given at that time or subsequently to the board of directors of the Bank of Canada by the deputy minister of justice, who is a member of the board, in respect of this action?
I also ask the minister whether he does not receive detailed reports of meetings of the board of directors of the Bank of Canada from his deputy minister who normally attends, or from a representative of the deputy minister. Finally I ask whether it would not be the duty of the minister to read the minutes of all meetings of the board. Perhaps the minister would deal with these questions before I go on to ask him a few others.


Donald Methuen Fleming: The first time there was a discussion between the governor and myself about this pension action was on May 30. I had in the course of the discussion that day mentioned to him that I had become aware of the action taken by the board at its meeting on February 15, 1960-that I had recently become aware of it-and that while I was aware that the minutes of the board showed that he took no part in the discussion of that portion of the subject relating to his own pension, nevertheless, having regard to his high position, and the fact that he was given a very wide veto power under the act, and that a high measure of responsibility in matters affecting his own personal interest was to be expected of anyone holding the high office of governor of the Bank of Canada, the view of the government was that there had been a dereliction in his duty in not seeing that this matter was brought to the attention of the government.

I pointed out to him that this had not been done, and that having regard to the provisions of the act, the by-law as applied to his own pension, by reason of the fact that it had not been gazetted, was of doubtful validity. The governor contended at first that there was no question about the validity of the by-law because, he said, there had been opinions given at one time, some years earlier, that by-laws passed by the board of directors of the bank in relation to pensions for members of the staff and officers of the bank did not require the approval of the governor in council for their validity. I pointed out that if he were right in that contention it still did not touch the point that the by-law had not been published in the Canada Gazette in accordance with one of the provisions of the act. He took the position that gazetting was not essential to the validity of the action taken. That, I think, was the substance of the conversation with regard to the by-law in relation to pensions passed on February 15, 1960. It was later in the conversation, before he left, that he proceeded to ask me the three questions which I related to the house when I spoke on June 14, one of them being: "What about my pension"?
I told him, as I have already related to the house in full detail on this subject, that he must understand that as far as the government is concerned there was no understanding between us that he would be entitled to the pension he claimed under the by-law of February 15, 1960. I made that very clear to him in reply to that question.
The next question asked by the Leader of the Opposition was whether the by-law of February 15, 1960, was approved by all of the directors. My information is that the bylaw was approved unanimously. Let me add this, to clarify the situation, because one of the comments made by the Leader of the Opposition yesterday would have given a contrary impression: the board at that time was composed of some appointees of the present government and some appointees of the former government of which the hon. gentleman was a member. The proportion at that time was four members appointed by the former government and eight appointed by the present government. The subcommittee of the board which considered this question, according to the record and according to my information, was composed of three members, two drawn from appointees of the present government and one appointee of the former government. As I have said, my information is that the by-law, including the special provision made for the pensions of the governor and deputy governor, was approved unanimously. It should be remembered that the by-law covered many other 90205-6-478
Governor of Bank of Canada things in addition to the special pension provision for the governor and the deputy governor. As a matter of fact, this whole matter, as I learned this spring on looking into it, had begun with a general review of the pension by-law of the bank as applied to all members of the staff, of whom there are a good many hundreds. It was only in the course of that review that this proposal to enlarge the pension provision for the governor and deputy governor was raised.
The next question is whether there was some advice given to the board by the deputy minister of justice at that meeting on February 15, 1960.


Lester Bowles Pearson: I meant the deputy minister of finance. I am sorry.


Donald Methuen Fleming: Yes, I think the Leader of the Opposition will realize he was wrong in saying the deputy minister of justice was a member of the board. He never has been. The deputy minister of finance was not present at that meeting on February 15, 1960. As I have already told the committee, he was suddenly called to Toronto the day before the meeting owing to the unexpected death of a brother-in-law. He was obliged to leave at once and to take full charge of the funeral arrangements. That is the reason he was not present at the meeting on February 15, 1960.


Paul Joseph James Martin: The assistant deputy was there.


Donald Methuen Fleming: The assistant deputy was there but he went on very short notice and did not have the background of information in respect to this matter that the deputy minister had and, as the committee is aware, I was not acquainted with what transpired at that meeting until the spring of 1961.
In regard to the question in so far as advice is concerned, I think I have already answered that because that matter arose during my discussions with the governor on May 30. There had been advice tendered to the governor by the Department of Justice- it was not the deputy minister-on earlier occasions as to whether a by-law of the Bank of Canada relating to pensions required the approval of the governor in council. That was the one issue involved in the opinion, and it did not touch upon the other question I have mentioned as to whether such by-laws also required to be published in the Canada Gazette.
The next question asked by the Leader of the Opposition had reference to whether I receive detailed reports from the deputy minister of justice or, I take it, anyone else, as

Governor of Bank of Canada to what transpires at meetings of the board of directors of the Bank of Canada. The answer to that question is no.
The last question was whether the minister is not under some duty-


Mr. Benidickson:: The minister referred to the deputy minister of justice and I am sure he meant his own deputy minister.


Donald Methuen Fleming: I intended to say the deputy minister of finance.


William Moore Benidickson: Yes.


Donald Methuen Fleming: The last question was whether the Minister of Finance was under some duty to read all the minutes of the board of directors of the Bank of Canada. The answer is no. It has not been the practice of the bank to issue and circulate copies of minutes of board meetings at all. I am informed, because of the secret nature of the business transacted at meetings of the board of directors, these minutes are not circulated, and the directors going to meetings have on their desks either the minutes or a precis of the minutes of the previous meeting. These meetings are held at what are, by the standards of private business, fairly lengthy intervals. Meetings of the board of directors of the Bank of Canada are held on the average I would say of five times a year, so there is an interval of about two months between meetings.


William Moore Benidickson: All the more reason for reading the minutes.


Donald Methuen Fleming: The bank does not issue or circulate the minutes. 1 have not seen any of the minutes of the board because these proceedings of the board are, of course, secret. This spring, after having been told of the increase in the governor's pension provided by the board, by the by-law of February 15, 1960, 1 asked for a copy of the by-law and a copy of that portion of the minutes of the meeting at which this subject was discussed.


Lionel Chevrier: What date this spring, did the minister say?


Donald Methuen Fleming: Are you referring to when I received a copy of the by-law?


Lionel Chevrier: Yes.


Donald Methuen Fleming: It would be in April of this year.


Lester Bowles Pearson: Mr. Chairman, we have
learned some details about this very unusual action in regard to pensions, taken by the twelve directors, eight of whom were appointed by the Conservative government, on the recommendation, after a good deal of study by the pensions committee of three


members, two of whom, including the chairman, were appointed by the Conservative government, and the chairman of which is a close friend-a very reputable gentleman indeed-of the minister himself. That is the origin of the increase in this pension, and other pensions; an increase which I must say has caused a good deal of understandable surprise, as a result of the action by this board of directors.
The minister has also said that the question of pensions at the meeting of May 30, when the governor was asked-that is a mild word -to resign-


Donald Methuen Fleming: It is an accurate word.


Lester Bowles Pearson: This matter of pension was raised by the minister first, and only afterwards did the governor ask his question about it. The minister has said this afternoon-and this statement was made before-when he referred to the doubtful validity of the pension, that at a meeting where the governor of the bank was to be asked, and again I use that very mild word, to resign, the minister raised the question of the validity of the pension of the governor, a pension which had been established and increased by a board of directors, eight of the 12 of whom were appointed by this government. That, Mr. Chairman, speaks for itself.
Then the minister says that the governor was guilty, in the words he used, of a dereliction of duty in not bringing this increase to the attention of the minister and the government-an increase which was recommended by the board of directors on February 15, 1960. The governor was to be blamed for not doing this. Let me point out again, Mr. Chairman, that at the meeting where the board of directors took this unusual action in respect to the governor's pension-this Tory board of directors in the majority-


Donald Methuen Fleming: It is not a Tory
board of directors.


William Moore Benidickson: It then was two to one.


Lester Bowles Pearson: At this meeting there was in attendance a representative of the Department of Finance in the person of the assistant deputy minister of finance. And then at the next meeting when the minutes of the previous meeting would undoubtedly be read- I take it that is the routine procedure at meetings of board of directors, although I must say I do not sit on meetings of boards of directors very often-the deputy minister of finance was present to hear the minutes of the previous meeting when the decision had been made to increase the pension of the governor. With the assistant deputy minister knowing about it and the deputy minister

knowing about it, the minister now blames the governor of the Bank of Canada for not informing him of this increase. That also speaks for itself.
I ask the minister with respect to a matter that did not concern the government directly, but concerned the board of directors of the bank, appointed in the majority by the government, which was conducted directly in accordance with the provisions of the act, why the minister blames the governor for a dereliction of duty rather than his own representatives who were present at meetings when these actions were taken?


Donald Methuen Fleming: It was not a question of "rather than".


Lester Bowles Pearson: I also ask the minister on what legal basis does he contend that the action taken by the board had to be approved by the government and published in the Canada Gazette? I then ask the minister, and I will give him a chance to answer these questions before I ask him any more, how he learned in April of 1961-not through the deputy minister and not through his assistant deputy minister-about this action taken a year and a half before.


Donald Methuen Fleming: I learned about it through Mr. Bryden on March 19, as Mr. Bryden has stated in his letter which was made public last week. I am sure the Leader of the Opposition is acquainted with that. That was the first time I heard of it at all.


William Moore Benidickson: What about the other letter?


Paul Joseph James Martin: Does the minister say the first time he heard of it was March 21?


Donald Methuen Fleming: I first learned about it on March 19.


Paul Joseph James Martin: If he learned about it for the first time on March 19, will the minister then explain why, if he felt so strongly about it, he did not complain about it to the governor until May 30?


Donald Methuen Fleming: Mr. Chairman, this matter was given very careful consideration-


Paul Joseph James Martin: Why not answer the question.


Donald Methuen Fleming: Mr. Chairman, I thought I was answering the question.


Paul Joseph James Martin: You are not
answering questions, you are now turning to another subject.


Donald Methuen Fleming: Mr. Chairman, one can see how anxious the hon. member for Essex East is to obtain the facts and information. He asks a question and before I can
90205-6-478i
Governor of Bank of Canada utter one sentence he starts making more of his silly and absolutely unreasonable remarks.


Paul Joseph James Martin: Never mind the insults, just answer the question.


Donald Methuen Fleming: Perhaps the hon. member will reserve his insults for himself and not interfere with the answer to the question.
I made it clear that I heard of this action from Mr. Bryden on March 19. Following that I began to make inquiries. I asked for a copy of the by-law and then a copy of the minutes of the meeting. I then studied the matter very carefully to determine the position. This matter was considered very carefully and it was only after conclusions had been arrived at that it became timely and appropriate to discuss the matter with the governor.


Paul Joseph James Martin: It is now clear that the minister says he first learned of the action taken by the board on the 19th of March. It is now clear that he did not discuss this matter with the governor until the 30th of May. The minister now gives us the reason that between the 19th of March and the 30th of May he wished to consider the course that would be taken. He will not mind my saying, of course, that it would be very difficulty to convince any reasonable-minded person that it would have taken all that time for the minister to register his objection. Obviously there were other reasons. While the minister takes the position that he did not know of the pension having been decided on until the 19th of March, I suggest to him that he knew before the time that the pension was determined by the board of directors that the board was going to give consideration to an increase in the pension.


Donald Methuen Fleming: I did not, Mr. Chairman.


Peter Francis Martin: I ask this question. Is it not a fact that before Mr. Bryden took the initiative in the board of directors-


William Moore Benidickson: In 1959.


Peter Francis Martin: -that Mr. Bryden,
the minister's close friend and one of his political workers, had discussed his intention with the Minister of Finance?


Donald Methuen Fleming: No, it is not a fact, Mr. Chairman. Mr. Bryden has made this very clear in response to the aspersions that have been cast by the governor and repeated by certain hon. members of the opposition in this house. An attempt has been made, and by none with more determination than the hon. member for Essex East, to make it

Governor of Bank of Canada appear that the Minister of Finance has misled the house in this respect. There was no discussion between Mr. Bryden and myself about the pension or any pension arrangements for the governor of the bank at all.
Mr. Bryden made it very clear in the statement he issued last week that in the most passing way he simply referred to the fact that he was proposing to have a review of the pension by-law of the bank. There was no reference whatever-


Paul Joseph James Martin: That is the point. You said a moment ago that was not the case.


Donald Methuen Fleming: -there was no suggestion whatever of a reference to the pension of the governor of the bank.


Lester Bowles Pearson: Is he not a member of the bank?


Paul Theodore Hellyer: What did you think they were going to do?


Donald Methuen Fleming: Here is what Mr. Bryden said at page 3 of his letter of June 28, and this is put forward by Mr. Bryden to answer these aspersions and these attempts to mislead and hoodwink people as to what was the discussion. This is what Mr. Bryden said in his letter to me:
I had two conversations with you with respect to pensions. The first was in August 1959, when in a very casual conversation I said that a subcommittee of the board was giving consideration to the bank's pension fund and to salaries. No reference was made to the special provisions dealing with the pensions of the governor and deputy governor and in fact no details at all were mentioned because, at that time, the board's subcommittee had barely started to work.
There is the complete answer to the hon. member for Essex East and I trust an effective burial for the aspersions he has been casting about.


William Moore Benidickson: You did not indicate that you were offended by the 1957-58 activity of the governor.


Donald Methuen Fleming: Pardon?


William Moore Benidickson: My remark was that the minister gave no indication to the chairman of the committee that he had any reservations with respect to pensions that might be provided for the senior officers of the bank with which the minister is trying to tell us the government had a quarrel on monetary policy that originated in November, 1957.


Donald Methuen Fleming: Mr. Chairman, for what must be at least the twelfth time I repeat that the subject of the pension of the governor was never mentioned. Mr. Bryden continues:

The second conversation with you was on March 21, 1961, when I mentioned in another connection, the action taken by the board on February 15, 1960, with regard to the special pension provisions for the governor and deputy governor. You were surprised to learn of this and I was also surprised that you did not know of it.
That also is a statement of fact, Mr. Chairman. This was the first time that the question of the increase made in the pension provisions for the governor came to my knowledge and it was in the course of a conversation on a related matter but not directly in regard to pensions that this happened to be mentioned. That was when I first learned of it. You can imagine my surprise, a surprise that so impressed Mr. Bryden that he comments that he was also surprised that I knew nothing of it.


William Moore Benidickson: We have had published one letter from Mr. Bryden to the Minister of Finance and I believe it post-dates the controversy that we are now discussing. What about the letter from Mr. Bryden to the Minister of Finance to which the governor has referred? Mr. Bryden is a close friend of the minister and an appointee of the government. What is the possibility of giving the Canadian people the full facts by producing the letter that has not yet been made available, namely, the earlier letter from Mr. Bryden to the Minister of Finance?


Donald Methuen Fleming: The hon. member refers to the letter which has been so grossly misrepresented by the governor of the bank in his recent communications and published statements.


Paul Theodore Hellyer: Let us see it so we can judge for ourselves.


William Moore Benidickson: This is why we should have a committee that could establish the facts.


Donald Methuen Fleming: This is what Mr. Bryden had to say about that letter by way of correcting the false references to it by the governor of the bank in his recent public statements. This is in Mr. Bryden's letter to me of June 28, 1961.
Reference has been made by Mr. Coyne in a recent letter to you that I told you about a possible change in these provisions six months before the directors acted in February 1960. The letter I addressed to you on April 7, 1961, gives in chronological sequence the meetings and discussions relating to both salaries and pensions which led up to the approval by the board of amendments to the pension fund by-law. I continue to regard this letter as a confidential communication.


William Moore Benidickson: Are you speaking for yourself or are you quoting Mr. Bryden?


Donald Methuen Fleming: I am still reading Mr. Bryden's letter, as I made clear. I repeat:

I continue to regard this letter as a confidential communication. At Mr. Coyne's request I subsequently sent a copy of this letter to him in his capacity as governor of the bank since I was still technically a director of the bank at the date the letter was written.
This is the letter which has been grossly misrepresented by the governor of the bank and referred to by certain hon. members in this house in quoting from the governor's letter which, as I have said, was a gross misrepresentation.


Lester Bowles Pearson: So you say.


Donald Methuen Fleming: Mr. Bryden makes it quite clear that he wrote me the letter in confidence and I received that letter in confidence. That confidence has been respected.


William Moore Benidickson: You have referred to it in the house and are obliged to table it.


Donald Methuen Fleming: This House of Commons, when confronted with a motion that this correspondence should be tabled, upheld the confidential nature of that correspondence. What the governor did was to ask Mr. Bryden for a copy of this letter and he obtained the letter which was written in confidence and it was given to him because he was the governor and it related to the affairs of the bank. But did the governor respect the confidence? No, he did not, and he did not even refer to it accurately. He grossly misrepresented the contents of the letter and then he tried to make it appear that there had been a hiding of this letter. There never was anything of the kind.
This house has dealt with this question on a motion to produce some days ago and has decided that because of the confidential nature of the communication that confidence should be respected and the privileged nature of the communication should be upheld in this house. This house has upheld the privileged nature of that communication. But that did not prevent the governor from making an entirely untrue statement about the effect of this letter and referring, if you please, to a letter that he had received in confidence and which he well knew had been written to me in confidence. I ask if that is good behaviour on the part of a public official.


Paul Joseph James Martin: The minister now has said, of course, more than I am sure, on reflection, he would wish to have said. I asked him a few moments ago if there had been any discussion between himself and Mr. Bryden prior to the decisions of the board at Mr. Bryden's initiative to provide for this pension to the governor, the circumstances of which I should like an opportunity of examining the governor upon because I do not like the
Governor of Bank of Canada pension. I am not alone in that in this party. However, I am anxious to find out-


Donald Methuen Fleming: Almost alone.


Lester Bowles Pearson: You gave it to him.


Paul Joseph James Martin: I am anxious to find out the circumstances that prompted a board of directors, eight of whom were appointed by this government-


Donald Methuen Fleming: And four appointed by you.


Mr. Martin (Essex Easl):: -to take the course they took to which the minister now professes, carrying a white cloak of innocence, to be totally opposed. The minister now has admitted that, prior to the decision of the board, he did have a general discussion about pension matters of the bank with Mr. Bryden.


Donald Methuen Fleming: That is not a true statement.


Peter Francis Martin: That is what you said a few moments ago.


Donald Methuen Fleming: The hon. member talks in one breath, Mr. Chairman, about the governor's pension-


Peter Francis Martin: I have the floor.


Some hon. Members:: Order.


Donald Methuen Fleming: Then he talks about the general pension by-law; he is talking about two different things.


Peter Francis Martin: I hope, Mr. Chairman, that you wil1 caution the Minister of Finance to contain himself and to speak when he has the right to speak. I am not yielding the floor to him. It is clear from what he said a few moments ago that he has contradicted himself. There was a discussion between himself and Mr. Bryden with regard to the pension arrangements of the bank. This afternoon the minister denied that that situation existed. We have found out that the minister, within the course of 20 minutes, has contradicted himself on this important matter. He says Mr. Bryden has asked him in the recent letter written to the Minister of Finance, to treat as continuing in its confidential character the letter of resignation of Mr. Bryden of April 4.
I suggest to the minister that he had asked Mr. Bryden to provide in this last letter for that very request.


Donald Methuen Fleming: That is untrue.


Peter Francis Martin: The minister says that is not true. I say the minister did suggest that to Mr. Bryden.

Governor of Bank of Canada


Donald Methuen Fleming: On a point of order, Mr. Chairman; this is something obviously within my knowledge, and I say that I did not ask for that letter. The hon. member says I did, and I say I did not. Under the rules of this house, it does not lie within the right of any hon. member to question the statement of another hon. member in relation to a matter within his knowledge.


Paul Joseph James Martin: Under the rules of the house, the minister is right. However, the fact is that the minister now, in view of the importance of the Bryden letter, in view of what he has said about comments that have been made by a government official with regard to that letter, owes it to the house and to the country to ask Mr. Bryden, at the earliest possible moment, for permission to divulge the contents of that letter. I am sure Mr. Bryden, who has nothing to be ashamed of in this matter, who acted with the best intentions even though his course may not be fully supported by all of us in this house, would not now take the position that that letter should not be divulged so that we can ascertain the real circumstances in this matter.


Donald Methuen Fleming: He said so on June 28, which was last week.


Paul Joseph James Martin: I know he said so, and I am suggesting why he said so. Does the minister deny that there was any collaboration between him and Mr. Bryden with regard to this last letter? Does the minister deny that he called Mr. Bryden on the phone and said that there was discussion in the house-you have seen a report in the papers about it, don't you think you ought to write me again and among the things that you ought to suggest is that this letter of April 4 should not be made public? The minister denies that.


Donald Methuen Fleming: I certainly do deny that.


Paul Joseph James Martin: I said you have denied it.


Donald Methuen Fleming: Will the hon. member refrain from indulging in these Actional expeditions and tell the truth?


Paul Joseph James Martin: Let the Minister of Finance not forget that his conduct in this matter is under examination, not that of the governor of the Bank of Canada. We have a right to And out whether or not there was collaboration along the lines I have indicated. Otherwise, why would there be any reluctance to table the letter of April 4?


Donald Methuen Fleming: Because it was conAdential.


Paul Joseph James Martin: That is only fair to Mr. Bryden, and the reason the minister does not want to expose that letter is that it will put him in a different position in regard to this pension proposed by a Tory board of directors. That is the reason, and there is no other. If that is not the reason, then why does not the minister go to his friend and say, I believe this letter of April 4, now that it has been referred to by the governor, now that it has been discussed in the House of Commons by that terrible man from Essex East, should be tabled.
If the minister thinks we are having an inquiry this afternoon, he has a second thought. The minister at every turn is dodging every issue. He is precluding our receiving answers to speciAc questions. Now he seeks to confuse this whole pension issue which he wishes to create as a separate issue to provide a smokescreen, to provide a screen against his own ineptness in handling these important matters that are now engaging this House of Commons. That is the reason, and it is because of that that we insist on knowing the circumstances the minister has not yet revealed with regard to his part, and the part of his government, with regard to a matter about which now they give the pretence that they are against.
Let it not be forgotten that the man who proposed this pension was a close friend of the minister. Let it not be forgotten that he proposed it to a board of directors, the great majority of whom were supporters of my hon. friend's party. Let it not be forgotten that they were appointees of the Conservative party. They are the ones who are responsible for this pension, and the minister, by no method that he can employ, can hope to escape the responsibility vicariously by putting the responsibility for this pension arrangement onto the shoulders of others. We are not here to defend any individual. We are here trying to ascertain the facts, and we are not able to get those facts from the Minister of Finance.


Donald Methuen Fleming: I doubt, Mr. Chairman, if the truth has ever been handled so lightly in this House of Commons as it has been just now by the hon. member for Essex East. In typical fashion, as he has on various other occasions in the course of this debate, he has set up his straw men, entirely the creatures of his own Action and imagination, and then proceeded to argue as though his Actional presentation were factual. Well, it is not; it remains Action as it was from the beginning.


Paul Joseph James Martin: Give us a chance to And out.


Donald Methuen Fleming: Well, Mr. Chairman, there are ways of asking questions without making statements that are utterly untrue.


Paul Joseph James Martin: Not with this minister.


Donald Methuen Fleming: The hon. member and I, I think, are coming to understand each other better. I will say of him that he has uttered this afternoon a series of false charges, one after the other-


Paul Joseph James Martin: On a point of order, Mr. Chairman-


Donald Methuen Fleming: -made out of whole cloth.


Paul Joseph James Martin: On a point of order, Mr. Chairman, may I say that the hon. gentleman has made a statement that I am not going to even ask him to withdraw. I have not made any false charges. I have asked questions of the hon. gentleman who is now under cross-examination. Let him not think that he is the accuser in this situation. In the present instance, in respect of this matter, he is the accused and because of that we have a right to put questions to him in a form that will reveal the true situation.


Donald Methuen Fleming: If I am the accused and the hon. member for Essex East is the accuser, then I say, and repeat, that I am falsely accused. I hope I make myself clear.
For the twentieth time, Mr. Chairman, let me say that never was the subject of the governor's pension discussed with me. Never did I hear reference to the change that has been made by the board of directors in the provision for the governor's pension until late March, 1961, something like 13J months after the meeting at which this had been done.
The hon. member is following a strange course when he says he does not like the pension but he seems to like the man who is going to get the pension if he can get it.


Paul Joseph James Martin: I never said that. If the minister is going to quote me, I would ask him to quote me correctly. What I said was-


Donald Methuen Fleming: It is quite clear. The hon. member tried to make us believe that he did not like the pension, but I say he likes the man who is claiming the pension. If the hon. member for Essex East can have his way in this debate, it is quite clear that the governor will get his pension; he will not get it now but they would stall off this discussion, if they could, until December 31, when the period of the governor's
Governor of Bank of Canada term will expire anyway and they will evidently be pleased then to see him come off with this handsome pension.
I have made it quite clear-and I made this very clear to the governor of the bank when I saw him on May 30-that the reaction of the cabinet to this pension, when they heard of it, was one of shock and consternation. That is our view of this pension. We do not hold the governor responsible for actions taken by others. However, we hold him responsible for his own actions or his failure to take action where it is properly to be expected of the governor of the Bank of Canada under such circumstances. It was for that failure that he was held responsible, It is for that failure that he is being judged I say that it is the view of the government, as it has been since we heard of this matter, that is was a dereliction of duty on the part of the governor of the Bank of Canada not to see to it that the government was made acquainted with this handsome increase provided for him on February 15, 1960. After all, the board of directors under the Bank of Canada Act is not completely supreme because that act gives the governor the power of veto, so great are the powers of the governor under this act. If those powers are great, so is the responsibility that goes with them. With great power goes high responsibility, in the view of the government; and that responsibility was not discharged.
I do not hold the governor responsible for actions taken by the directors, but we hold him responsible-a man who had the power of veto-in that he did not at least see to it that the government was made aware of this handsome increase.
When an opinion was given some years ago that the approval of the governor in council to a pension by-law passed by the board of directors of the Bank of Canada was not essential to the validity of that by-law, that opinion did not say that such a by-law, if it affected the governor's personal pension, should not be reported to the governor in council. That is a very different matter. Here we are in the realm of what is the assessment of responsibility. It is in this realm that we should ask whether there has been good conduct on the part of the governor of the Bank of Canada, holding an office than which there is none higher or more important in this country outside the government itself. Mr. Chairman, we say that responsibility was not discharged in a matter affecting the personal interest of the governor of the bank.
It is all very well now for hon. members opposite to try to hide behind a decision of the board of directors. It is all very well for the governor of the Bank of Canada now
7572	HOUSE OF
Governor of Bank of Canada to try to hide behind a decision of the board of directors. But what of the decision of the board of directors when that same board of directors a month ago asked the governor for his resignation? When it suited the governor on that occasion, he ignored the resolution passed by the board of directors. He defied them, as no decision of the board of directors in that regard was to be construed as binding upon him. But in a matter which affected his personal interest under this bylaw, with more than a doubling of his pension involved, an increase from less than $12,000 per annum to $25,000 per annum for life and payable immediately on retirement in this case at 51 years of age-


An hon. Member:: Shame.


Donald Methuen Fleming: -in that case the governor is prepared to say. "Oh, well, I stand behind the decision of the board of directors". If the decision of the board of governors was something for him to stand behind as of February 15, 1960, what then of June 13, 1961, when the governor defies the same board and then goes out and defames the board in public utterances that the governor then proceeded to issue?


Paul Theodore Hellyer: Will the minister permit a question?


Donald Methuen Fleming: Yes.


Paul Theodore Hellyer: Is it not true that there is an arrangement under which the governor would not collect his pension at age 51 if he had other alternative employment at the time?


Donald Methuen Fleming: No. There is no such arrangement. This is just a red herring that was drawn across the trail by the governor of the bank in one of those recent public statements or letters of his. There is no such thing involved. It is so interesting, Mr. Chairman, to have this red herring put up now. When I asked for his resignation when I met him on May 30, why did the governor in putting to me three questions ask me "What about my pension?"


Paul Joseph James Martin: Let us examine him.


Donald Methuen Fleming: Anybody with any knowledge at all knows perfectly well that there are no such conditions as those suggested now by the hon. member for Trinity written into this by-law or the claims that the governor makes under it. This is just a red herring, Mr. Chairman; nothing more.


Paul Joseph James Martin: Let us find out whether it is a red herring.


Donald Methuen Fleming: If you don't know yet, you will never know because your mind is blocked.


Paul Joseph James Martin: That is brilliant repartee.


Donald Methuen Fleming: I think it is obviously an act of mercy that the hon. member for Essex East is kept on in this house as a sort of pensioner. It is quite obvious that, if this is the kind of interpretation he can give to by-laws, it is a good thing he is not thrown out in the world practising law again.


Some hon. Members:: Oh, oh.


Paul Joseph James Martin: Let me tell my hon. friend that my constituents will send me here long after the hon. gentleman will have left here.


An hon. Member:: You had a fairly close call the last time.


Donald Methuen Fleming: Mr. Chairman, the hon. member is smiling.


Paul Joseph James Martin: I am laughing.


Donald Methuen Fleming: I do not wish to ruffle him any more. We wish to keep on the subject here.


Paul Joseph James Martin: Oh, oh.


Donald Methuen Fleming: I have had occasion at other times to remind him that in the last election, when he came through literally by the skin of his teeth, he did not run as a Liberal. I saw his election signs in Essex East and the word "Liberal" was conspicuously absent. This is the man who just two months previously had run for the leadership of the Liberal party.


Paul Joseph James Martin: Let us examine the governor.


Donald Methuen Fleming: I think the hon. member ought to be a little more loyal to his leader.
Mr. Chairman, I have endeavoured to make these facts plain. We are engaged in what appears to be constant repetition. I can only say that, so far as my answers have been repetitive, they are repetitive only because the questions have been repetitive.


Lester Bowles Pearson: Mr. Chairman, let us finish this subject.


The Chairman:: Order. The hon. member for Skeena was seeking the floor.


Frank Howard: I have not that sort of intimate relationship that Mr. Coyne has with members of the Liberal party and I have been watching with amusement some of the activities that have been engaged in recently on both sides. I have not said anything yet on this particular bill at either stage-


Mr. Webster:: Don't spoil the record.


Frank Howard: My hon. friend advises me not to spoil the record. I would tell him that the Minister of Finance has dirtied it up enough already that it is not possible to spoil it any more. I would say that my position on this particular matter coincides with that expressed by the Minister of Finance when he introduced the bill. I agree with him that this is not a so-called Fleming v. Coyne dispute or issue. I do not look at it in that sense. I think what it is is a dispute and an issue between what is right and what is wrong; an issue between the rights of an individual to a fair hearing and the smearing attack engaged in by hon. gentlemen opposite from a privileged position in the house.


Paul Joseph James Martin: Hear, hear.


Mr. McCleave:: Good gracious; look who is talking. If anybody does that sort of thing, it is you.


Frank Howard: Here is my hon. friend from Halifax, with that intimate interest in divorce that he has showing through again.


Mr. Peters:: He should divorce himself from these serious matters.


Frank Howard: The Minister of Finance started off with the statement that he was going to present facts to the committee, but he so interlaced those facts with half truths, untruths and fiction that the record now reads like something that would be prepared in a weird tales and fantastic stories publication. Arising out of it all I am forced to have some doubts about the truthfulness and the veracity of the minister himself-


Some hon. Members:: Oh, oh.


Frank Howard: -some serious doubts about them, in view of what he has said.


Donald Methuen Fleming: Obviously, Mr. Chairman, the rules of the house are being deliberately broken here-


John Whitney Pickersgill: The hon. member has only said he has his doubts.


Donald Methuen Fleming: -and I ask that the rules be enforced and the hon. member be invited to withdraw that statement.


Jacques Flynn: This problem has arisen before and it may help the committee if I read citation 145 of Beauchesne's fourth edition, page 126:
It has been formally ruled by Speakers In the Canadian commons that a statement by an honourable member respecting himself and peculiarly within his own knowledge must be accepted, but it is not unparliamentary to temperately-
I think I should underline this adverb for the hon. member for Skeena:
Governor of Bank of Canada -criticize statements made by a member as being contrary to the facts; but no imputation of intentional falsehood is permissible. A statement made by a member in his place, is considered as made upon honour and cannot be questioned in the house or out of it.
I suggest that the hon. member for Skeena has done more than temperately criticize statements made by the Minister of Finance and should correct it.


James MacKerras Macdonnell: Mr. Chairman, I am not quite sure whether this is a proper question of privilege, but it will only take a minute. I have been in this house for 15 years now, 12 of them in opposition. I do recognize that with regard to the opposition we should be very sympathetic with those who take pretty wide latitude and perhaps talk a little irresponsibly at times. But as far as I can remember, only within the last three months would any one have dared in this house to suggest that the Minister of Finance could stray from the truth. These things which are being said opposite-are being said carefully and usually fall short of containing an actual accusation, but I do suggest there are certain decencies which should be preserved in this house and which are in danger of not being preserved.


Some hon. Members:: Hear, hear.


Paul Joseph James Martin: Let the Minister of Finance observe those decencies.


Frank Howard: The Minister of Finance is the first one in this house to fail to observe those decencies. Apparently these decencies to which the hon. member for Greenwood has referred, for which he and others have high respect, are not adhered to by the government in the treatment-


Mr. Browne (St. John's West):: On a point of order, Mr. Chairman-


Mr. Robichaud:: Here is an expert getting up.


Jacques Flynn: Order.


Frank Howard: There are slurs and slanders against the governor -


Jacques Flynn: Order.


William Joseph Browne: I have as much right to get up as anyone else. We have heard a lot of talk about closure, and when I get up, after listening for days to speeches, I am not allowed to speak. The point of order is this. The hon. member for Skeena referred to-


Frank Howard: Mr. Chairman, you cannot have two points of order at the same time.

Governor of Bank of Canada


William Joseph Browne: -the half truths and untruths spoken by the Minister of Finance. He should withdraw that statement.


Jacques Flynn: I have invited the hon. member to do so and I was hoping he was coming to it.


Frank Howard: I was proceeding to that point, Mr. Chairman, when the hon. gentleman- what position does this hon. gentleman hold now?-the Solicitor General, interrupted. I do not know whether the Minister of Finance engages in half truths and untruths, but I will withdraw the implication, if it was contained in my remarks, that he has engaged in those sort of things, on his own word. I have my own doubts and my own thoughts.


Gordon Minto Churchill: Withdraw it like a man, instead of only half withdrawing it.


Mr. Bell (Carleton):: You would not expect him to withdraw it like a man.


Frank Howard: Fortunately, Mr. Chairman, this government is not yet in a position to engage in thought control, as much as it would like to do so. It may have that sort of authority and control over hon. members on the other side of the chamber, but heaven forbid that it should go any further.


Paul Theodore Hellyer: They just hide letters.


Frank Howard: In my opinion what has occurred here is that Mr. Coyne has not been treated in a decent and honest manner by this government, because it has consistently refused to submit this particular question to a committee where Mr. Coyne can be examined under oath, where the Minister of Finance can perhaps be examined under oath, and where other officers of the Bank of Canada can be examined under oath.


Gordon Minto Churchill: On a point of order, Mr. Chairman. The question of the reference to a committee was decided by a vote of the house yesterday and there should be no further reference to that matter during the course of this debate.


An hon. Member:: Decency.


John Whitney Pickersgill: It was not a question that was decided yesterday.


Frank Howard: We all know the attitude of the Minister of Veterans Affairs on these and other matters also, but I still say that it is because of the refusal of this government to reconsider its position that Mr. Coyne is not being treated in the manner to which the hon. member for Greenwood referred a while ago. It appears that all that is desired with regard to the Bank of Canada is to make it
fMr. Howard.]
a political puppet or a tool of the government that will jump any time some crackpot minister of finance wants to crack the whip-


William Moore Benidickson: Including the directors.


Frank Howard: -to operate under direction for political purposes; not for sensible, planned purposes either. I do not know Mr. Coyne. I have never met him. I have never spoken with him. I do not particularly favour his policies, any more than I favour the policies of this Minister of Finance. But I do favour his right to be heard; not the manner of being heard to which he has resorted within the last few weeks-I do not agree with that either.
The Minister of Finance has the right to stand up in this house and to make statements of fact, or what he claims are facts, and when those facts are questioned, to insist upon his parliamentary right of having those statements accepted as true. He has engaged in that activity regularly and continuously. He has, as I said, interlaced them with some fiction, some imagination and hallucinations, and these we have to sift from the facts themselves. But Mr. Coyne does not have an opportunity to present his point of view to the people who are being asked to fire him, and to be examined on that point of view, as has the Minister of Finance who is now in the position of being examined in so far as his activities are concerned. As I said, I disagree with the manner and the course Mr. Coyne has followed in issuing press releases. I disagree with the words of those releases. Many of the words contained in them are as inflammatory as those which the Minister of Finance could employ even in his most gentle moments. But there are some serious charges made in some of these letters which Mr. Coyne has released. One of them is a charge against the Minister of Finance about certain budgetary matters having come to the attention of the governor of the Bank of Canada and the statement that changes were subsequently made in the budget. This is a serious charge to level against the minister. And how does the governor know? Did he see the budget? The minister said he did not-Mr. Coyne is a liar; he did not know things of this sort. Yet if somebody in this house calls the Minister of Finance a liar he immediately runs foul of the rules as was shown a moment ago.
Not only can that word "liar" not be applied to the Minister of Finance or to anybody else, but we cannot even question the degree of truth in an answer or the fullness of an answer given by the Minister of Finance when he rises and says: you must accept my word, because the rules say so. But the rules allow the Minister of Finance and others

to cast slurs and accusations against Mr. Coyne for statements he has made publicly in the press. This is a disgraceful way to run the affairs of this nation. Such accusations are disgraceful especially coming from a Minister of Finance who just a few years ago had his bench covered with the union jack, who also some years before that was a Sunday school teacher and an active participant in the United church. For him to engage in an activity of this sort from a privileged position against any individual in society is disgraceful and not in keeping with that sense of decency which the hon. member for Greenwood mentioned a while ago. No wonder the hon. member for Greenwood resigned from the cabinet, if this sort of thing goes on.
Not only is this activity a disgrace to our parliament and to our concept of freedom and rights and a disgrace to what we thought we had enacted when we enacted the bill of rights, but it is also a disgraceful way to deal with a corporation such as the Bank of Canada-to fill it up with toadies who are going to jump every time the government cracks the whip for any unprincipled political reason whatsoever. Let us take a look at some of the directors-some of the people who might become governor after Mr. Coyne has gone. Reference has been made to the number who have been appointed since this government took office. Their names are in the annual report and there is no need to refer to them specifically. The years 1958, 1959, 1960, 1961 are the years when these gentlemen were appointed to these positions. Let us take one of them from my own province of British Columbia, Mr. Frederick Field. He was appointed first, I believe, on December 1, 1958 by this government, then reappointed in 1959 for the normal period. This is how the Bank of Canada is being operated, and this is the purpose of some of these appointments. Here is a gentleman, Mr. Field, who contributed $5,000 to the slush campaign fund of the Secretary of State for External Affairs in 1958. That is evidence of his association with the Tory party. Here is a gentleman, Mr. Field, who kicked in $7,675.88 to the campaign fund of the hon. member for Vancouver Centre. Here is a gentleman, Mr. Field, who contributed $5,000 toward the election of the hon. member for Cariboo, another Conservative; a gentleman who contributed $3,000 toward the election of the hon. member for Vancouver South. Here is a total of more than $20,000 contributed by one individual, as evidenced by sworn statements, to Conservative campaign funds. Shortly thereafter he ends up by being appointed to the board of directors of the Bank of Canada.
Governor of Bank of Canada Money talks. Money counts. If you contribute to the party we shall see that you are paid off, one way or another.


An hon. Member:: How much did you get
from Hoffa?


Frank Howard: How much does this government get from Hoffa? I do not know how much they got from Hoffa but I would say this: I have just as much dislike for Hoffa as I have for hon. gentlemen opposite.
Not only has the government loaded the board of directors with its own pets, its own favourites who will jump when it cracks the whip, but the Minister of Finance is now involved in getting the Bank of Canada infiltrated with his relatives. Here is another pipe line into the operations of the Bank of Canada. Perhaps Mr. Donald Wilson may have had some relationship with the Minister of Finance in some of the things he has discovered about the Bank of Canada.
For a variety of reasons I have no intention of supporting this bill at this stage, or any other stage of the proceedings, unless this government admits to some sense of decency of treatment, some sense of honesty, some sense in keeping with our concept of rights and freedoms. Unless it admits to those and is prepared to refer this bill even at this late date to a committee of this house, I do not intend to vote for it. A government that wants to engage in the trial of an individual by slur and insult, a government that wants to proceed to a conviction by distortion and hypocrisy is wasting its time by asking me to support it on this issue,


Lester Bowles Pearson: A few moments ago the hon. member for Greenwood made a plea for decency in debate. I would suggest to the hon. gentleman that the most decent thing to have done in this situation would be to have given the man whom we are being asked by act of parliament to turn out of his job, a chance to appear before a committee of the house.
If there ever was a case made for that procedure to have been followed weeks ago, that case has surely been made and reinforced this afternoon. If that had been done this matter would have been decided a long time ago. It would have been decided after all the evidence had been taken on both sides and witnesses called, witnesses who could contradict each other if necessary. Instead, we get selective confidentiality from the Minister of Finance and selective statements from the Minister of Finance. That, I claim, is not the decent way to proceed in respect to a man with whom we may disagree but with whose right to be heard before he is turned out we do not disagree.
7576	HOUSE OF
Governor of Bank of Canada Mr. Macdonnell: I endeavoured yesterday briefly to state why I voted against the amendment, and perhaps my chief reason was that I understood the Leader of the Opposition and as far as I know everyone else in this house had reached the conclusion that the governor of the bank could not continue to hold his position. I stated that, and it was not contradicted. Apparently, in the last 24 hours there has been a great change of front.


Lester Bowles Pearson: If the hon. member had been in the house at 2.30 he would know that I dealt with that point in the reply I made to the statements of the minister this morning. Of course, the government has destroyed the value of the governor of the Bank of Canada. Of course it has. Of course, the governor of the Bank of Canada cannot continue to serve with this government. But before he is thrown out, surely he is entitled to state his case.
The hon. member is a gentleman and he is a sportsman, and he must realize that when the governor says there is no disagreement and when he had asked for the right to be heard he should, surely, be entitled to that right before we pass this act of parliament discharging him. That is what I mean by decency, and that is why I shall vote against this bill, and for no other reason.
Now, Mr. Chairman, the Minister of Finance in dealing with the pension matter said that the governor and not the board of directors, eight of whom were appointed by his government as well as the chairman of the pension committee who is a great friend of his, must take the responsibility for this course of action which was unanimously adopted by the board of directors. It is not the Tory board of directors but the governor who is culpable because he did not stop this action.
In respect to the knowledge of the minister of this matter, we accept his word-he knew nothing about it. However, his friend and confidant, Mr. Bryden, had the following to say, I will read from his letter of June 28, 1961 which was made public:
I had two conversations with you with respect to pensions. The first was in August 1959-


Paul Joseph James Martin: Hear, hear.


Donald Methuen Fleming: Do not stop there, go on.


Lester Bowles Pearson: Yes, of course, I will read the rest of it. It continues as follows:
-when in a very casual conversation 1 said that a subcommittee of the board was giving consideration to the bank's pension fund-


Donald Methuen Fleming: Read the next sentence.


Lester Bowles Pearson: Yes, I intend to.


-and to salaries. No reference was made to the special provisions dealing with the pensions of the governor and deputy governor-
The minister knew that a committee of the bank directors was studying the question of bank pensions, and he knew that in August of 1959. The minister's deputy and his assistant deputy were aware of the action that was taken.
The minister will correct me if I am wrong when I say-this has been stated by the governor-that the deputy minister had given his approval to the pension arrangements one week before the meeting of February 15, 1960. The deputy minister knew about it and the assistant deputy minister knew about it, and the minister knew that a pensions committee of the bank was operating under his friend, Mr. Bryden.


Donald Methuen Fleming: No.


Paul Joseph James Martin: Of course you did, what do you think we are?


Lester Bowles Pearson: Yet, with the two senior officials of his department with full knowledge of what went on because they attended the meeting when the decision was made, the minister tells us that so little did he know about the workings of this affair and the workings of his department in respect of the Bank of Canada, he knew nothing about this until March 1961. Well, we accept the minister's statement, but that is a strange way to run a department.
Then we have this letter of April 6 from Mr. Bryden which the minister claims that the governor of the bank has distorted. The minister has given his own interpretation of that letter, but surely that is another reason why we should have a committee go into these matters. The minister having claimed that this letter has been mispresented, why does he not remove all doubt by tabling the letter and making it public? He says it is a confidential letter, but he does not mind referring to that confidential letter in giving his own interpretation of it. All he has to do is ask Mr. Bryden, and he is in close touch with him, to give permission to having this letter made public, and I am sure it will be given, then this doubt will be removed. The minister will not do that. The minister cannot expect to have it both ways. If he wants to remove himself from suspicion in these matters let him give us all the facts on the basis of the evidence and documents. Until he does that, we have the right-


William Moore Benidickson: He is concealing the evidence.


Lester Bowles Pearson: -we have the right to assume that the whole story has not been told and that the government will not allow it to be told.


Paul Joseph James Martin: Hear, hear.


William Arnold Peters: Mr. Chairman, I am quite perturbed by this whole matter.


An hon. Member:: Oh, oh.


William Arnold Peters: I am not perturbed particularly because of the fight between Mr. Coyne and the Minister of Finance, because, as I have said before, I think they are both Conservatives with Conservative attitudes, and I still believe that there is very little difference between them, and that difference is purely between two men who cannot get along. However, I am perturbed because I think the minister has been misrepresenting the facts to this committee and to the country in relation to the pension, and I only wish to talk about that aspect of the question.
Mr. Norman Campbell in the Ottawa Citizen of July 4, 1961, had the following to say:
Had governor James Coyne been contributing to the civil service superannuation fund instead of to the Bank of Canada's own pension fund, he would be eligible for a pension of over $24,000 on his scheduled retirement December 31 next.
The pension would be computed at 2 per cent of salary for each year of service.
This is interesting in light of the fact that the $25,000 pension authorized by the bank's directors was the prime reason first given by finance minister Fleming for seeking Mr. Coyne's resignation,


Donald Methuen Fleming: What are you reading from?


William Arnold Peters: I am reading from the Ottawa Citizen of yesterday.


Donald Methuen Fleming: It is full of false statements.


John Whitney Pickersgill: Everyone is false but the minister.


William Arnold Peters: I would not say the minister has given false statements to this house but he has confused the facts to such an extent that no one knows what is right and what is wrong. I am quite sure that Norman Campbell sitting in that exalted fourth dimensional position-


Some hon. Members:: Oh, oh.


William Arnold Peters: There may be some who say that the position of those in the fourth estate is an eminent position. I suggest it is fourth dimensional, and perhaps that is true as well. To go on with the article, it reads as follows:
There is an unwritten understanding that no governor of the Bank of Canada, or other senior official, will draw his pension if he goes to a salaried job on retirement-that is. not until he leaves the salaried job.
Governor of Bank of Canada
The article continues:
That is the reason president Donald Gordon of Canadian National Railways receives no pension from the Bank of Canada, where he was deputy governor.
Is the minister aware-he is a very intelligent man with very intelligent assistants, as I have pointed out on a number of occasions before, particularly his assistant in the house who is familiar with the Civil Service Act and civil service pensions-that this pension is not out of line with pensions under the civil service itself? While it is true that the rate may be a little higher than is normally paid to deputy ministers and others in that category, if the pensions paid to individuals in other categories had the same percentage applied to them those pensions would be considerably higher. The minister has not said that there is anything wrong with the application of this 2 per cent formula. Perhaps I am drawing a supposition similar to that drawn by the hon. member for Essex East, this afternoon-


Paul Joseph James Martin: You must not do that.


William Arnold Peters: It is my opinion that because of pensions paid to retired directors of the Bank of Canada, the minister was able to go to the governor of the Bank of Canada and tell him if he did not publish the changes in the Canada Gazette then the payments made to other individuals receiving pension under the new scheme would be illegal. I do not think the change in the pension itself is a factor involved in this fight.
We believe that the pension of $25,000 is unreasonable particularly in relation to the size of pensions being paid to the retired people of this country. We say this pension is much too high in relation to the majority of pensions being paid to other individuals. I do not think that this change in pension was at any time a factor in the position taken by the Minister of Finance regarding the resignation of the governor of the Bank of Canada. I am sure if we had the opportunity, as the Senate will have, of finding out some of these facts, we would discover that most of the concern in respect to the governor of the Bank of Canada did not arise because of the philosophical position taken by the governor, but arose because the government intended to achieve control of this bank in that manner. This was a more serious threat to the economy according to the thinking of some of the leading people involved in the situation than was the fact that this man would probably get a $25,000 pension on retirement at such an early age. I think that the minister has not been fair with the committee.

Governor of Bank of Canada
I should like to speculate on what is going to happen to this bill. I think there are only one or two things that can happen. The bill will be put through by the large Conservative majority. They have already called back most of their members and they will use their majority to see that the bill is passed by the house. When the bill goes to the Senate, the Senate may well be threatened that if they take a position contrary to the wishes of the government the Prime Minister will come into the house and say that there has to be Senate reform and parliament will be dissolved and they will go to the country on Senate reform. This will probably be the final outcome of this matter. If it is not, I think the senators will have to give consideration to soft-pedalling the questions they ask. If they do not, they will find out some of the answers that we in this house want.
One question in which I and all Canadians, I think, are interested, is what is wrong with the financial institutions of this country? Why have we not been able to get greater Canadian participation in our national development and what roles does the Bank of Canada play in this field? Canadians will want to know that; the senators, I hope, will want to know that, and we in the House of Commons want to know the answer to that.
We are not particularly interested in whether Mr. Coyne parts his hair one way and Mr. Fleming does not like it or whether Mr. Coyne does not like the looks of Mr. Fleming. We are not particularly interested in this personality clash. In putting this matter before the Canadian people I think we have been unfair in trying to put it on the basis of whether or not a $25,000 pension for this man is too much or not enough. I would also suggest that Mr. Coyne, after his many years of working for the Bank of Canada, probably has as good qualifications to run big business as have some of the other people who have come from that particular field. One man who got very close to the top in the Bank of Canada was Donald Gordon who now has a salary of $75,000 a year and who, unless some decision is made otherwise, will probably continue to serve as the head of Canadian National Railways.


John Whitney Pickersgill: Nobody knows.


William Arnold Peters: If the minister is not able to do what he appears to be trying to do, to blacken the personal reputation of Mr. Coyne, I say that Mr. Coyne will be able to get a substantial job and will not need to ask for his pension for a good many years to come.
It has been interesting to note that it has been pointed out in the press that the changes

in the pension plan in general covering employees of the Bank of Canada at all levels have resulted in a reduction in the total cost of their pensions to the Canadian people and not an increase. The fact that one pension at the very top has reached the proportions it has has not cost the Canadian people anything and I suggest it is not necessarily going to cost them anything for a number of years to come.
I suggest to the minister that he should rise in his place and tell us whether he really thinks that a pension of $25,000 is too high. If he does think it is too high, will he consider changing the whole scheme of pensions of civil servants which is based on the very simple principle of a contribution of 2 per cent of the earnings of the employee? If there is unfairness at this high rate there must be unfairness throughout all other levels of rates in the pension program.


Lester Bowles Pearson: May I ask the minister one further short question on this matter before he replies? It is this. If the minister thought that the action taken by the board of directors of the bank on this pension matter was improper and if the government, as the minister has told us, received the news of this action 18 months later with shock and consternation, did the government consider either asking the board of directors to reconsider their action instead of blaming the governor for it or asking the board of directors, which took this action that caused shock and consternation, to resign?


Donald Methuen Fleming: As to the effect of the by-law and of courses that may be taken to deal with this pension, this question will be dealt with in due course. There are various aspects of this matter that are under consideration relating to the validity of the bylaw and this matter is receiving study. The hon. member for Timiskaming-


Gordon Campbell Chown: Order. I might intercede at this point to reflect for a moment on what I thought I heard coming from some area in the house and that was the addressing of the first minister by his first name. Of course, this is very much against the rules as is well known to the member who made the remark. I cannot positively identify who it was but I would ask that member, who should know this rule very well, to desist from this type of interjection.


Donald Methuen Fleming: The hon. member for Timiskaming drew certain inferences from an article in yesterday's issue of the Ottawa Citizen which he read. The portions of the article that he read contained one misstatement after another. Various of them have been raised in discussion here today. The

writer of that article keeps going back again and again to assert that the prime reason for asking for the resignation of the governor was this matter of the pension. This was one of five reasons. The article takes us back to the first statement issued by the governor, who gave a very misleading impression of the conference held on May 30. I wish to deal particularly with what that erroneous and misleading article says with regard to the pension. This article seems to suggest that this pension is comparable with those payable in the civil service. I say that is a very misleading presentation.
The superannuation act was amended at the 1960 session of parliament on motion of the government and the effect of that amendment was to increase the superannuation provisions so that persons qualifying under the act might have a pension based on 35 years' contribution at the rate of 2 per cent per annum and with the pension based upon the six best earning years. The highest salary paid in the civil service, as was pointed out yesterday by the hon. member for Carleton is $24,000 a year. That is the highest salary paid. How anybody can make 70 per cent of that come anywhere near the pension payable to the governor will be a stretching of any mathematical process.
But that tells only a small part of the story. The fact is that these pensions under the superannuation act are payable to persons retiring at age 65. Here is the governor who is able to retire at age 51 and draw a pension of $25,000 per annum. Moreover, the pension payable under the superannuation act is a contributory pension and the rate of contributions was increased last year. But what about this pension, this increase? It was a contributory pension, it is true, when on February 15, 1960, the board of directors of the bank increased it. Up till that time the contributions by the governor had been $1,500 per annum but when his pension rate was more than doubled on that occasion what about the contribution? He does not contribute on a full salary of $50,000 a year. Under the by-law he contributes on only $40,000 of that. I am informed that in 1960 his pension contributions, following the increase on February 15, amounted to a total of $2,287.50 of which $1,500, of course, was deductible from his income for tax purposes and $787.50 was taxable. This year, 1961, if his contributions run a full year, he will contribute $2,400, of which $1,500 will be deductible from income for tax purposes and $900 will be taxable.
Now, Mr. Chairman, when I look around the civil service of this country and I see a writer in the Ottawa Citizen comparing the pension rights available to the governor under
Governor of Bank of Canada this pension by-law of February 15, 1960 and think of the provisions that are available to civil servants, then I say I do not know of any civil servant in this country who would not jump at the opportunity to trade places with the governor under those circumstances. As a matter of fact, I think most people in this country would jump at the opportunity to trade places with anyone who could retire at age 51 on a pension of $25,000 a year for life.


Lester Bowles Pearson: Fire your board.


Donald Methuen Fleming: I have already dealt with that subject. I do not know whether or not the Leader of the Opposition paid any attention to that subject. I hope my remarks sank in.


Lester Bowles Pearson: Yes, I recall every word.


Donald Methuen Fleming: There is another comparison that I think it is not unfair to draw here. 1 made a return to the house or answered certain questions on June 26 as recorded at page 7032 of Hansard. One of these questions concerned the various pension amending by-laws over the years and the rates of contribution under those.
A question was asked as well on another occasion, about the extent of the pensions paid. I have informed the committee as to the extent of the pension paid to the former governor of the bank, Mr. Graham Towers, after his long service. It is just about the amount that the present governor would have had if there had not been that change in the pension by-laws in February, 1960. It is said in this newspaper article that it is something like an unwritten rule that if the incumbent of this office of governor finds himself a salaried position outside upon retirement he forgos or waives his claim to pension. This is indeed something new, Mr. Chairman. There is no justification for any such assertion.
It may enter into the minds of the directors, and undoubtedly did enter into the minds of directors who voted for this increase in February, 1960, that a governor whose term of office expires cannot expect to step out into another position immediately with a corresponding salary. After all, there are not that many positions in this country that pay a salary of $50,000 a year with a pension of $25,000 per year payable on retirement at whatever age in life that may come. But, Mr. Chairman, there is no foundation whatever for the assertion or allegation that there is some unwritten rule or understanding that if a former governor, in receipt of a pension finds himself a salaried position elsewhere

Governor of Bank of Canada he will forgo or waive the pension to which he is entitled from the bank; that is just made out of somebody's imagination,
I refer hon. members to what I said at page 7178 of Hansard of June 28. There I pointed out that the maximum pension payable today by the Bank of Canada, and as I mentioned at that time this is the pension of the former governor Mr. Graham Towers, is $1,145.83 per month. This is a pension of approximately $13,500 per annum after the long service which Mr. Towers gave as governor of the bank from 1935 until the end of 1954. I think, Mr. Chairman, we should have some regard for a proper basis of comparison and not be misled by the kind of newspaper statements by which the hon. member was evidently misled.
My final comment is this, Mr. Chairman. This present issue is in no sense attributable to any clash of personalities. It is attributable to questions of principle.


Lionel Chevrier: Before I ask some additional questions of the Minister of Finance, I wish to make an observation which I hope the hon. member for Greenwood and the minister will take in good part. During the course of the discussion this afternoon, in giving answers to questions as the minister did a moment ago, he seemed to be of the opinion that everything concerning this matter that comes either from this side or a source other than the government is false. He has said that the article in the Citizen which was written by Mr. Norman Campbell is replete with inaccuracies. He has said it is false; that some of the statements made by the Leader of the Opposition are false; that statements made by the hon. member for Essex East are false. He interrupted the hon. member for Bona-vista-Twillingate to say that his statements were nothing but falsehoods.
The hon. member for Greenwood told us the Minister of Finance, in his attitude, could not stray from the truth. He was scandalized a moment ago at some of the things that were said here and thought they should not have been said. He nods his head now by way of agreeing with what I am saying, namely, that the Minister of Finance could not stray from the truth. Well, it seems strange that the truth can only come from that side and that from this side there could not be anything but falsehoods.


James MacKerras Macdonnell: I did not say that; in fact I was very careful not to say that.


Lionel Chevrier: I am now attributing the last part of what I said to the discussion that has been taking place, and not to the hon. member for Greenwood. What I did say about the


hon. member for Greenwood was that he said the Minister of Finance could not stray from the truth.


James MacKerras Macdonnell: That is what I said.


Lionel Chevrier: That is what was said, yes. What I am saying now is this: It seems strange to me that the truth can only come from that side and cannot come from this side. How is it that during the course of this discussion we have been interrupted continually by the minister who has been rising in his place or interrupting from his seat to say, that is not true; that is untrue; that is false. This remark has been made repeatedly during the course of this discussion. He interrupted the hon. member for Bonavista-Twillingate, as reported at page 6917 of Hansard, to say this: "When are you going to start telling the truth tonight?" This is only one example of at least ten, if not more, which cover the pages of Hansard.
I am saying now that it seems strange to me that it is possible for those who sit on the other side to use the word "truth" very flippantly in so far as we on this side are concerned, but when we use it concerning those who sit on that side of the house, then it is against the rules; it dare not be used.
I come to the questions which I intended to ask of the minister. I would ask the Minister of Finance this question: According to the governor, at a meeting of the board on March 20 the governor asked the directors whether or not he should resign and all the directors said, no. Has the minister looked at the minutes of the meeting or has he discussed the matter with any of the members of the board of directors to ascertain whether or not that contention of the governor of the bank is accurate?
Another question I should like to put is this. Does the minister agree that the governor, at least until March 20, had the confidence of the board of directors of the bank? What was the relationship between the minister and the board of directors of the bank? Did the minister discuss with any of the directors, with all of them together or with any of them separately, the position or the views on the statements which were made by the governor of the bank before the month of June, 1961?


Donald Methuen Fleming: I have not seen a copy of the minutes of the board meeting of March 20, the date to which the hon. member refers. I have said that the only portion of the minutes of the board that I have seen at any time was the extract from the minutes of the meeting of February 15, 1960, which I procured, according to my recollection, in April last.

So far as discussion with members of the board is concerned, may I say this. There are a number of these members of the board of directors with whom I am not personally acquainted and to whom I have never talked at any time. These men were appointed to the board. They were not appointed there on the basis of being told what to do. They were appointed on the basis of their being persons of experience who were put on that board to discharge the functions of directors of the Bank of Canada. I have made no attempt to tell those members of the board of directors what to do. A couple of them-I think probably three of them in all-spoke to me to express their great concern about the speeches which the governor was making and about the way in which they felt he was embroiling the Bank of Canada more and more in political controversy.


Lionel Chevrier: When was this?


Donald Methuen Fleming: At various times during, I should say, late in this past winter and leading up to the spring.


Paul Joseph James Martin: Before they gave him a vote of confidence?


Donald Methuen Fleming: I am not aware of any vote of confidence.


Paul Joseph James Martin: Oh, yes; you certainly are.


Donald Methuen Fleming: If there is a vote of confidence recorded on the board's proceedings I should like to know about it, because I have not heard of it.


Lionel Chevrier: The minister did not direct his attention to the first question I asked him. May I say to him that when I put it to him he was speaking to his colleague.


Donald Methuen Fleming: I answered the first question.


Lionel Chevrier: I submit to the minister that he did not answer it. The question I put to him was this. According to the governor, at the meeting which was held on March 20 he asked the directors whether or not he should resign and they said no. I am asking the minister whether he inquired of the directors whether or not that contention was accurate. He replied that he had not consulted the minutes. He replied that he had discussions with some of the board members. However, he has not answered the question as to whether or not the statement was accurate. In order to assist him in that matter I ask now whether he had a discussion with the deputy minister of finance, who is a member of the board, concerning this matter.
Governor of Bank of Canada


Donald Methuen Fleming: Mr. Chairman, the hon. member put his question on the basis of the minutes when he asked it first and I dealt with that question. If he is asking me about any other source of information, I would say that, from the information I have received there was a quite warm discussion at that meeting concerning the speeches of the governor and quite strong disapproval was expressed not only of the course of his speeches but of the content of his speeches, and he was told that he was embroiling the bank in a political controversy. Indeed, I am informed that he was told on that occasion that he was in political controversy "right up to his neck", or some similar expression was used. As to this matter of his turning around then and asking those who had been speaking in this way if they were asking for his resignation, I have not precise information on this point but I am told that he challenged those who had been expressing themselves to this effect and asked if they wanted his resignation. They said no, that was not their purpose in raising this matter, and that they were expressing their opinions as directors concerning the course of action of the governor. The hon. member can draw his own conclusions. I have certain information as to the loss of confidence on the part of the directors in the governor in the light of these circumstances.


Lionel Chevrier: If the directors were of the view that the governor was in political controversy up to his neck, does it not appear strange to the minister that they would vote confidence in him as they did.


Donald Methuen Fleming: They did not vote confidence in him.


Lionel Chevrier: The governor said so.


Donald Methuen Fleming: I have no information that there was any vote at all. It was a matter of discussion. The governor turned to those who had been speaking in this vein and he said in effect, "Do you want my resignation?" or "Do you want me to resign?".


Lionel Chevrier: The governor said that they had voted confidence in him. He made that statement publicly in one of his letters.


Donald Methuen Fleming: I do not think he said there was a vote.


Lionel Chevrier: I think so.


Donald Methuen Fleming: Can you produce that reference?


Lionel Chevrier: I can look it up. I think that points up the fact that, if we had a committee such as the one we have been requesting during the course of this debate,

Governor of Bank of Canada then without any doubt we would be able to get the truth in so far as this matter is concerned. We have, on the one hand, statements made by the minister that are completely in contradiction to those made by the governor. I should like to ask this additional question. Did the minister discuss the reappointment of Mr. Coyne with the directors before he told the governor on May 30 that the government would not approve his reappointment?


Donald Methuen Fleming: I have not discussed that matter with the board. I have never met the board as a board at any time. However, I was aware of the feeling certainly of some members of the board who had lost confidence in the governor and who were not, as I was informed, prepared to recommend his reappointment on the expiry of this term.


Paul Joseph James Martin: Is the minister not aware that the resolution asking for the resignation of Mr. Coyne by the directors expressed regret and that it was explained later by Mr. Baribeau that the reason that it was obvious that the governor and the Minister of Finance could not get along? Does the minister not recall that resolution?


Donald Methuen Fleming: I recall the resolution but I do not recall any such statement as that which the hon. member has just made in regard to their view.


Paul Joseph James Martin: There we have the Minister of Finance again, as always, not able to give us succinct answers so that we can get on with the many questions that should properly be addressed to him at the present time. The questions that I am going to ask will not require a speech by my hon. friend. I hope that he will be able to give succinct answers. Does my hon. friend remember the names of the two directors who met with the minister on June 2?


Donald Methuen Fleming: On June 2 and 3 two of the directors came to see me. They were Mr. Hill and Brigadier Patrick.


Paul Joseph James Martin: Were they the same two directors who on May 8 had made arrangements with the minister to meet with him on June 9 to discuss in a preliminary way the appointment of a successor to the governor on the expiry of his term?


Donald Methuen Fleming: No. That is not right at all.


Paul Joseph James Martin: Who were the directors who met with him at that time?


Donald Methuen Fleming: At what time?


Paul Joseph James Martin: I am asking whether they are the same directors who met with the minister on May 8?


Donald Methuen Fleming: The hon. member asked me who were the directors. What is the hon. member asking now?


Paul Joseph James Martin: First of all, Mr. Chairman, my hon. friend has mentioned by name two directors with whom he had a meeting on June 2. My next question was, were they the same directors who on May 8 met with him-


Donald Methuen Fleming: I have said no.


Paul Joseph James Martin: -and made arrangements for a meeting on the 9th?


Donald Methuen Fleming: I have said no.


Paul Joseph James Martin: On May 8 did my
hon. friend meet with directors to discuss points that were going to become effective on June 9 with regard to having a vacancy in the office of the governor of the bank?


Donald Methuen Fleming: Mr. Chairman, this was the first time I had any discussion with Brigadier Patrick in relation to this subject. June 2 was the first time I had seen him in several months, or talked to him in several months. Mr. Bruce Hill, following the resignation of Mr. Bryden, was appointed the member of the board on the executive committee and also on a committee that was appointed to consider the question of a nominee for the office of governor for the new period commencing January 1, 1962. He telephoned me- he did not come to see me-early in May to indicate that he was leaving for Europe and on his return he hoped to have a discussion with me in regard to this subject of the nomination of a governor to take office in the new term.


Paul Joseph James Martin: This was the Mr. Hill I take it, who was a former Conservative candidate?


Donald Methuen Fleming: I think he does have that distinction, and a very worthy person he is indeed to hold it.


Paul Joseph James Martin: Mr. Chairman, my hon. friend's reply surely should be, "Yes, Mr. Hill was a former Conservative candidate". I do not know why my hon. friend hedges his answer like that. He knows perfectly well, I suggest, that Mr. Hill was a former Conservative candidate.


Donald Methuen Fleming: A first-class man too.


Peter Francis Martin: My hon. friend says, "A first-class man". There are many Conservatives who deserve that designation. I cannot say that would apply to everyone in this house.


Donald Methuen Fleming: A former president of the Canadian chamber of commerce.


Peter Francis Martin: I know Bruce Hill very well. My hon. friend says he is president of the chamber of commerce. I know that. I am simply asking these questions. My hon. friend should not be offended just because I ask if one of his friends was a Conservative candidate. Is there anything in that to be ashamed about? If there is, why hesitate? Can the minister say whether he had talks with the governor or any of the directors between June 2 and June 12?


Donald Methuen Fleming: No, I have not seen the governor since May 30.


Peter Francis Martin: Yes or no.


Donald Methuen Fleming: I have had no talk with him.


Peter Francis Martin: The answer is no.


Donald Methuen Fleming: He left my office that day asking for time to think the matter over. The next time I heard from him was on the morning of Monday, June 12 when the board was then meeting in Quebec city, when I received from him several letters which had obviously been written with a view to creating self-serving evidence.


Peter Francis Martin: As far as the
governor is concerned, the answer is no. My hon. friend could save our time by just saying yes or no, and the matter would be over. As between the 2nd and the 12th of June, did he see any of the directors?


Donald Methuen Fleming: I said earlier, Mr. Chairman-and the hon. member has obviously forgotten it-that I saw Mr. Hill and Brigadier Patrick on the 3rd.


Peter Francis Martin: Can the minister say whether he discussed with Mr. Hill the text of the resolution which was passed by the board on June 13, prior to its consideration by the board? Was it discussed in his office? Was it written in a letter? Was it discussed over the telephone, or by wire I simply wish to know-and the answer is yes or no- whether or not there was any indication by Mr. Hill as to the nature of the resolution which the Minister of Finance wanted the directors to pass on June 13.


Donald Methuen Fleming: Mr. Chairman, Mr. Hill telephoned me to tell me of the text of the resolution which he had indicated to the governor the day before that the board of
Governor of Bank of Canada directors were seriously considering, which they hoped it would not be necessary for them to pass because they hoped he would have the good sense to tender his resignation under the circumstances.
Following the meeting of the board on Tuesday, June 13 I was informed-I was given the text of this resolution over the telephone and told that it had been adopted by a vote of 9 to 1.


Peter Francis Martin: Again, Mr. Chairman, the response could have been yes or no-


Donald Methuen Fleming: No.


Peter Francis Martin: -but the minister wishes to embellish his responses, and there is nothing one can do if he so insists. May I ask the minister if he suggested any changes in the resolution as read over to him by Mr. Hill?


Donald Methuen Fleming: No, Mr. Chairman.


Peter Francis Martin: Is it not a fact that Mr. Hill did make a deletion in the resolution as read to the minister, after his talk with the minister?


Donald Methuen Fleming: I have no knowledge of any deletion whatsoever. I certainly did not make any suggestions.


Peter Francis Martin: The minister does not deny that there was a deletion after the talk, does he?


Donald Methuen Fleming: Mr. Chairman, I have flatly denied that I knew anything about any deletion. I do not know whether there was any deletion. I never heard of one.


Peter Francis Martin: I am not asking the minister whether he had any knowledge. I am asking the minister now whether or not, as a result of that conversation, there was a deletion. That is a different matter altogether.


Donald Methuen Fleming: Mr. Chairman, I have no knowledge of any deletion whatsoever, so how can I have any knowledge of a deletion following the conversation? Certainly there was no talk about a deletion to me and I have never heard of any deletion, nor did I suggest any.


Peter Francis Martin: My hon. friend's first answer should stand. He said he had no knowledge of any deletion. That does not mean he does not now have knowledge of a deletion as a result of his conversation with Mr. Hill.

Governor of Bank of Canada


Donald Methuen Fleming: I have said, Mr. Chairman, that I have no knowledge of any deletion, and as far as X know the hon. member is just imagining something. I have no knowledge to this moment of any deletion.


Paul Joseph James Martin: Of course, everyone is imagining things; everyone except the minister. Perhaps he is imagining this. I take it that the Minister of Finance has great confidence still in Mr. Bryden. The answer is yes or no.


Donald Methuen Fleming: Mr. Chairman, the hon. member is still standing. I certainly think Mr. Bryden is a very estimable citizen.


Paul Joseph James Martin: Does my hon. friend agree that Mr. Bryden is a man of good judgment?


Some hon. Members:: Oh, oh.


Donald Methuen Fleming: I will not make any judgment in relation to the pension and the by-law of February 15, 1960.


Paul Joseph James Martin: My question was, not whether he had good judgment in relation to a particular matter but whether the minister's acquaintance with him established in his mind the fact that Mr. Bryden was a man of good judgment.


Gordon Minto Churchill: What has this to do with the bill?


Paul Joseph James Martin: Well, we shall see.


Donald Methuen Fleming: Mr. Chairman, I think Mr. Bryden, like most people, is a man of very good judgment in many ways. Nobody has completely good judgment in all matters. The hon. member for Essex East has good judgment in some matters.


Richard Albert Bell: Very few.


Donald Methuen Fleming: It is a question, always, of how many. I have a very high regard for Mr. Bryden's judgment in general. I am reserving comment on the pension increase of February 15, 1960.


Paul Joseph James Martin: Of course, my hon. friend forgot to mention that Mr. Bryden is an expert in the field of pensions. I believe that is the source of his income. Of course the minister knows more about these things than his good friend, his loyal, political collaborator, Mr. Bryden. But we have this admission from the Minister of Finance, that Mr. Bryden is a man of good judgment. I asknowledge that the minister said none of us is infallible, except the hon. gentleman, and that accounts for the fact that his policies are perfect and that they are so widely accepted throughout the country and throughout the world. May I ask the minister-


Donald Methuen Fleming: Mr. Chairman, I think my opinion of the hon. member's judgment is improving.


Paul Joseph James Martin: I wish I could reciprocate. I have here a clipping from the Toronto Star of June 14 where there is reported with regard to Mr. Bryden-


Gordon Minto Churchill: Relate this to the bill.


Paul Joseph James Martin: On June 14 it was reported:
Mr. Bryden said while he was a member of the board of directors there was never any great opposition to Mr. Coyne's monetary policies. ''By and large the board supported the policy that was being pursued. I certainly had no quarrel with Mr. Coyne's policies," he said.
Any lack of harmony between sections of the government is not good, he said, but he felt there had been "more smoke than fire" between Mr. Coyne and finance minister Donald Fleming.
Does the minister agree with this statement of this man whose judgment the Minister of Finance has acknowledged to be worthy of special mention?


Donald Methuen Fleming: Mr. Chairman, I do not know that I have the text of any such statement. I do know that I have before me the Toronto Daily Star issue of June 27 and that, in the most shocking way, this newspaper plays up what has been shown in Mr. Bryden's letter to me of June 28 to be a complete misinterpretation of what he said to the Toronto Daily Star on June 27. This was following the extraordinary statement put out by the governor of the bank on June 26. Reference was made in that document to the letter which Mr. Bryden had written to me in April. This newspaper publishes, under a headline, the statement: "Director Backs Coyne Statement". That was an absolutely false statement on the part of the Toronto Daily Star. Mr. Bryden did confirm the fact that he had written that letter to me and the Toronto Daily Star takes that, puts it on the front page, and pretends that that was confirmation of what Mr. Coyne had said about the contents of the letter to me.
That was proven to be completely false by the statement which Mr. Bryden made in his letter to me on June 28 in which Mr. Bryden had made the statement that I quoted earlier this afternoon in reference to this letter, and in which Mr. Bryden sets the record straight and makes it perfectly clear that this use of his April letter by the Toronto Daily Star was absolutely unjustified. It is a complete misrepresentation of what Mr. Bryden said. All he did was to acknowledge that he had written that letter. It was the Toronto Daily Star that went beyond and

misrepresented that as being confirmation of Mr. Coyne's statement about the contents of that letter.


William Moore Benidickson: Why are you so nervous about this letter? Why can we not see it in this controversy?


Donald Methuen Fleming: The hon. member was a parliamentary secretary for several years. In that time he had occasion-or I presume, if his services were used in the department to which he was assigned he had occasion-to know that confidential communications are entitled to have that quality respected not only by the recipient but by those who send them and it would ill behove parliament to break down that kind of confidence just as it ill behoves the governor of a bank to obtain by request a letter written in confidence by a director of the Bank of Canada to the Minister of Finance concerning bank affairs and then to represent that as saying something different from what it did say. We have Mr. Bryden's statement on this matter in his letter of June 28 and the record is now made clear.


Lester Bowles Pearson: We all recognize, of course, the sacredness which is attached by the members of this government to confidential documents, from the events of January 20, 1958. No amount of talk by the minister on that subject is likely to impress us very much. We remember outside pages containing the word "confidential" being torn off and selected passages from a confidential official memorandum read out to this house.
I should now like to ask the minister whether he was in touch on May 8 with one or two members of the board of directors of the bank to make arrangements to meet the minister on June 9 to discuss in a preliminary way the appointment of a successor to the governor on the expiry of his term of office.


Donald Methuen Fleming: Obviously the
Leader of the Opposition has not been paying any attention to the questions asked by the hon. member for Essex East. The hon. member for Essex East asked that question and I answered it fully.


Lester Bowles Pearson: The minister did not answer that question. The minister merely said these were not the same directors he met on another occasion. I ask him now if he met two directors or one director on May 8 to make arrangements for a meeting on June 9 to discuss the succession to the governorship of the Bank of Canada.


Donald Methuen Fleming: That precise question was asked of me by the hon. member for Essex East, and I answered it fully.


John Whitney Pickersgill: Answer it now.
Governor of Bank of Canada


Donald Methuen Fleming: Are we hearing from Bonavista-Twillingate now?


Lester Bowles Pearson: May I ask the minister if on May 8 when he made an appointment for June 9 to discuss the successor to the governor of the Bank of Canada he had at that time, that would be May 8, decided to ask for his resignation?


Donald Methuen Fleming: Mr. Chairman, I apologize to the committee for repeating what I said earlier, but hon. members will appreciate that if I am to be asked to answer the same question twice, and an answer is insisted upon the second time, I shall have to repeat the answer. I have already said that Mr. Bruce Hill was appointed to this committee, and prior to his leaving for Europe early in May he said he would like to see me when he came back, which was going to be sometime in the early part of June. That is all there was to it.


Paul Joseph James Martin: Will the Minister of Finance answer this question? Is it not a fact that from November of 1957 until recent days the Minister of Finance completely ignored the governor of the Bank of Canada, and that he by-passed him and carried on his dealings with the bank through other personalities in that organization?


Donald Methuen Fleming: No, that is not a fact. There is no truth in that statement.


Lester Bowles Pearson: Is it a fact that the minister, who was completely out of touch and not in communication with the governor of the bank was, in fact, in communication with a member of the board of directors over the terms of a resolution calling for the resignation of the governor, and does he consider it appropriate on his part to establish that kind of contact in those circumstances?


Donald Methuen Fleming: If the Leader of the Opposition is referring to the resolution passed by the board of directors on the morning, or at noon, of June 13, I have already dealt with that subject in reply to questions by the hon. member for Essex East, and I may say to him that I am also informed that the members of the board of directors were doing their best to try to persuade the governor of the Bank of Canada in the interest of the Bank of Canada to take in this situation a rational course and not the irrational course he did take.


Lester Bowles Pearson: Is it also true that the minister was trying to persuade the board of directors to persuade the governor to resign?


Donald Methuen Fleming: I asked the governor to resign when I met him on May 30. There has been no further communication on my part to him since. His resignation would

Governor of Bank of Canada properly have been directed to the board of directors. He might perhaps have had the courtesy to tell me what he was going to do, but he did not. That is the way that matter stood. As far as the board of directors is concerned, I have said that two of its members came to see me on June 2 and 3. These were men who were endeavouring in the interest of the Bank of Canada to urge upon the governor of the bank that he should have regard for the interest of the institution in a situation in which it was quite clear it was impossible to expect the circumstances then existing to continue.


Lester Bowles Pearson: Is it a fact that the minister had no contact with the board of directors even through his own deputy minister in the matter of a pension which the board of directors had increased, but when it was a matter of the governor's resignation he was in close contact with the board?


Donald Methuen Fleming: No. That question is a misrepresentation. The hon. gentleman talks about close consultation. I have never met the board of directors as a board. On the week end when the board members were assembling in Quebec on the Sunday for their meeting of June 12 and 13, the only member of the board that I heard from at all or had any communication with was Mr. Hill, and he was doing his best to try to compose the situation, feeling that it was the interest of the Bank of Canada which should have first consideration.


William Moore Benidickson: When he decided to give his personal advice to the governor of the Bank of Canada, did the minister, using his phrase reported at page 7040 of the House of Commons debates of June 26, 1961, "scurry again" to look at the Bank of Canada Act and find what his rights were? Did he scurry again, as a very able lawyer and a bright boy, to look at the evidence contained in the reports of the House of Commons committee on banking and commerce in 1954 when we together looked very carefully into the responsibilities assigned to the government and to the governor in these matters?
I regard the Minister of Finance as a bright boy, and have always held that opinion of him. However, inasmuch as the Minister of Finance was the chief spokesman for his party when in opposition at the time when the banking laws in this country were being reviewed in 1954 by the standing committee on banking and commerce-and the hon. gentleman's name appears on almost everyone of the 900 pages of the report of that committee -I find it difficult to understand how he can come to parliament in his ministerial office almost four years later and say that in 1957-58


he conveyed to the governor of the Bank of Canada a request for the easing up of the requirements respecting the liquidity reserves of the chartered banks. That statement can be found at page 7040 of Hansard for June 26, 1961, where he also says that, as a bright boy, he then scurried to read the Bank of Canada Act.
The minister had just participated in an election campaign at that time during which both he and the present Prime Minister, both eminent lawyers, had been screaming about the tight money policy. I cannot believe that those two hon. gentlemen were so irresponsible as to go to the Canadian electorate, as they did during the campaign that year, without having read carefully the responsibilities of the government vis-a-vis the governor of the Bank of Canada in connection with monetary policy. However, that is the explanation given by the minister during the current debate.
I suggest to the minister, and challenge him to correct me, that he has shown no inconsistency during any budget debate between his own statements and statements made by the governor of the Bank of Canada. On the contrary, my belief is that only during recent weeks has the minister been defeated by his colleagues in the cabinet in respect to policies regarding which he has not differed from those espoused by the governor. I can refer to them if the minister wishes me to, because some other statements were made by him in the course of presenting his preliminary budget in 1959 to his friends in Toronto.
There was nothing contained in those statements to indicate that the Minister of Finance was then an expansionist. I think he was not then defending the expansionist movement of the cabinet but has now decided that he must knuckle down, because his colleagues overruled him, in an attempt to defeat this public servant who now, because of this difference of opinion in respect to policy, must part company with the government.
Having sat with the Minister of Finance at meetings of the banking and commerce committee in 1954, I should like to ask him whether he recognizes as a principal obligation of the governor of the Bank of Canada that responsibility to issue storm warnings whenever there is a conflict regarding monetary policy on the part of the governor of the bank and fiscal policy as announced by the Minister of Finance? In 1954, the then much admired governor of the Bank of Canada, Mr. Graham Towers, described the obligation of the governor in practical terms when he said that it was like an aeroplane signal on an automatic instrument warning system.

While I have not agreed during the past three or four years, and have challenged some of the policies of this government which I thought were supported by the bank, I should like to say that I admire the willingness of the governor who is bound to be dislocated, to do that which Mr. Graham Towers suggested in 1954 was a necessary responsible act on the part of the governor of the Bank of Canada; that is, issue a storm warning.
I should like to know whether the Minister of Finance feared that the governor would make an announcemnt by that kind of warning signal which caused him to decide, as he now says, not to present this present budget and its proposals to the current governor of the bank. I suggest that is the essential reason for that somersault and flip-flop reversed position adopted in the present budget.
I suggest that we now have a culprit in the person of the governor who is being asked to resign because the Minister of Finance has somersaulted and completely reversed his position because, as recently as a year ago, the minister suggested that any interference with the exchange rate on the part of the government was a gigantic gamble which the government should not undertake.
I have attempted during the budget debate and by placing questions on the order paper to find out the cost to this country of this interference with the exchange rate. I suggest that interference is the essence of the dispute today. If the Minister of Finance wishes me to demonstrate the accuracy of that suggestion, I should be glad to do so by quoting his own words of September, 1957, as well as his words of 1958 when he suggested he was happy about the monetary situation, and also by quoting his words used in a speech to the Canadian club in Toronto in 1959. I am fully prepared to waste the time of this committee by quoting those words if the minister wishes me to. He has referred to political acrobatics, but I should like to say that I have never witnessed any greater political acrobatics than those demonstrated by the minister just before one o'clock this day.


Paul Theodore Hellyer: Mr. Chairman, it is quite obvious from the discussion that there is only one allegedly substantive charge put forward by the minister in respect of monetary policy and that dates back to 1957. He has told us that in 1&57 he had a disagreement with the governor of the Bank of Canada when he requested the governor to reduce the liquidity requirements of the chartered banks. The governor, he said, refused, and this is the basis of the argument which he would lead us to believe has persisted throughout four
Governor of Bank of Canada years. The minister did not, however, recommend to parliament changes in the Bank of Canada Act which would have changed the relationship between the governor and the government.
We must assume then either that the actions of the Bank of Canada during the intervening four years did not interfere with the government's over-all plan for the Canadian economy or that the minister was derelict in his duty. It is one or the other, Mr. Chairman. The minister cannot have it both ways. Either the Bank of Canada did not obstruct the government during those four years or the minister was derelict in his duty in not coming to parliament and asking for legislative authority in order to be able to implement the policies of the government, if they had any.
The truth of the matter is that the government did not have any policies throughout those four years. They were completely void of policy. The Bank of Canada did not obstruct them. That is obvious. Surely the minister would not have sat idly by for four years and allowed the bank to run roughshod over some real plan he had for presentation to the Canadian people. The fact of the matter is that he had no real plan. He still has no real plan except the possibility of now turning the printing presses to work to try to print the money to meet the deficit which he and the government have incurred and which is unprecedented in the peacetime history of this country.


William Moore Benidickson: That is why the minister fears hearing Mr. Coyne in a committee of parliament.


Paul Theodore Hellyer: Last evening the minister claimed that it was as a result of government fiscal policy that interest rates declined in 1957 and 1958. I have a very simple question for the minister. If it was as a result of fiscal policy that interest rates declined in 1957 and 1958, why is he not now introducing into the house a similar policy as recommended by the governor of the Bank of Canada?


Lester Bowles Pearson: Mr. Chairman-


Paul Theodore Hellyer: Surely the minister is going to answer that question.


William Moore Benidickson: The question is, who is telling the truth?


Lester Bowles Pearson: I will let the minister answer this other question if he desires to before I ask my final one.


Paul Theodore Hellyer: Certainly he should tell us why he does not introduce a fiscal policy which will reduce interest rates if this is desirable to encourage growth and development in the Canadian economy.

Governor of Bank of Canada


William Moore Benidickson: Tell us how to reduce
interest rates.


Donald Methuen Fleming: Mr. Chairman, as was made quite clear in the budget debate, which hon. members opposite evidently want to reopen and repeat, it is government policy to seek to bring about by all means open to the government a reduction in the general levels of interest rates in Canada, and if the house gives effect to the policies and programs proposed by the government this goal will be pursued by an effective co-ordination of fiscal and monetary policies.


Lester Bowles Pearson: Mr. Chairman, the governor of the Bank of Canada has said that on May 30 the minister stated he had been instructed to ask for the governor's resignation at once. I ask him, instructed by whom?


Donald Methuen Fleming: By the government.


Paul Theodore Hellyer: Is the minister alleging that there was continuous obstruction by the Bank of Canada throughout the four-year period, 1957 to 1961?


Donald Methuen Fleming: Mr. Chairman, I have said so many times now that the monetary policy that was pursued throughout this period was the monetary policy of the Bank of Canada. It was the governor's policy. His view of authority in this field was made perfectly clear in the meeting to which I have referred in November, 1957.


Paul Theodore Hellyer: Was this policy out of harmony with what the government was attempting to do?


Donald Methuen Fleming: It is obvious that at times it was.


Paul Theodore Hellyer: If that is so, I ask one final question. Why did the minister not introduce in this chamber legislative changes which would have corrected the situation?


Donald Methuen Fleming: I have already answered that question on six, if not seven, previous occasions. If the hon. member has not absorbed the answer yet I will-


Paul Theodore Hellyer: Because you were not doing your job properly.


Donald Methuen Fleming: -give the answer again although I do not wish to bore the committee with this repetition. The answer is on the record.


Paul Theodore Hellyer: Because you were not doing your job; you were asleep.


Donald Methuen Fleming: Oh, no, that is not the reason at all. The hon. member is quite confused.


Paul Theodore Hellyer: You went into hibernation for four years.


William Moore Benidickson: Mr. Chairman, the minister claims hindsight when we know that the essence of this debate is whether the governor of the Bank of Canada was guilty in the late fall of 1957 of not acceding to requests made to him by the minister with regard to monetary policy expansion and at a time when the minister said he had his departmental officials with him. We on this side wanted a parliamentary committee investigation so that we could have all such officials present to give testimony that even by hindsight might be valuable. I refer to something that has been referred to before. I do not apologize for putting it on the record again. When the minister's memory was perhaps clearer and nearer to the situation he said on June 17, 1958, when he presented his budget:
Monetary policy also changed in the latter part of 1957. The money supply was expanded rapidly after mid-August, and partly for this reason and partly because of a reduction of demand in certain credit fields, monetary conditions in Canada generally became easier and interest rates declined substantially. Banks have now for some time been in a position to meet all credit-worthy demands for commercial and personal loans. Market rates of interest in almost all categories of borrowing have declined substantially.
I say that this was the opinion given to us here and to the nation on June 17, 1958, long after the minister apparently had had his interview in November 1957 with the governor of the Bank of Canada. He expresses, in June 1958 as he always does, complete satisfaction with himself and with the policies that he advances to the nation. There is no indication of criticism anywhere there. But he proposes to say now in 1961 with hindsight that in November of 1957 he would not have approved of the words found in his budget speech of June 1958. Similar statements can be referred to throughout these four years such as in the budget of 1959. We heard today that the minister criticizes the governor of the Bank of Canada for a "tightening of the belt" policy. Let us remember the minister's eloquent conclusion to a recent budget speech when he said, "Work and save, work and save".
Can you find anything more typical of agreement between the Minister of Finance and the challenged statements of the governor of the Bank of Canada than my last quotation from the Minister of Finance? I could continue for some time and carry on quoting the Minister of Finance up to the blue baby budget of 1960. In that last budget in particular the minister referred to discouraging capital investment from foreign lands. In examining three or four budget speeches of the minister I have never found disagreement with the Bank of Canada like we now get on a somersault basis. I say to the minister that

it is the minister who has been upset in the cabinet and has not chosen to resign because of the upset. He has been adhering to these policies throughout, but stays in office and tries to find a scapegoat in Mr. Coyne and provides him no hearing.


Donald Methuen Fleming: This is conjecture on the part of the hon. member and completely imaginative.


Mr. Maiheson:: Mr. Chairman, at page 7041 of Hansard for June 26, 1961, the minister is reported as having made this statement:
We attached, as a government, the highest importance to the bank and its functions.
Later, on the same page, we find this:
Let me tell the house that as far as my responsibility is concerned I have done my best to carry on in a co-operative attitude.
Now, sir, we remember that under Messrs. Dunning, Ralston, Ilsley, Abbott and Harris, there was regular and systematic consultation with governors Graham Towers and James Coyne on all aspects of economic policy, fiscal policy, monetary policy, and this was continuously carried out. I ask the minister if, after his rebuke to the governor which occurred in March 1958-I might remind the minister in referring to this that the Ottawa Journal of March 14, 1958 carried a headline, "Fleming Rebukes Governor" and that the Gazette of March 15, 1958 carried a headline, "Fleming Rebukes Coyne"-over three years before the request for the resignation, has Mr. Coyne been asked by the minister for any advice whatsoever on any matter of economic, fiscal or monetary policy, until the minister's request for the governor's resignation on May 30, 1961? And by this I mean has the governor been asked for advice, not his deputies?


Donald Methuen Fleming: Mr. Chairman, I have already dealt with that several times. We are just going over the same ground, over and over again.


Lester Bowles Pearson: Mr. Chairman, the minister's last refusal to answer a very pertinent and important question shows that we are not going to get very far in committee of the whole in securing information from the government which surely is essential before this action which we are asked to take is taken. We get from the minister selected pieces of information from documents of one kind and another. When we refer to a document which he mentions and which he does not want to make available, he says it is confidential. We get one side of the statement, and that is bound to be so because of the nature of the case. This is not the kind of body where we can have both sides put forward. It is quite clear, Mr. Chairman, that we are being 90205-6-479
Governor of Bank of Canada told in connection with this matter what the government wants us to know and nothing else. It is quite clear we are going to be asked to take action on this bill without having the kind of information which should be made available in terms of the man who is being accused.
Well, that is it. The government takes responsibility for refusing this kind of information and for refusing to set up the kind of body which would have made it possible for evidence to be taken and witnesses to be heard. The government can take that responsibility if it so desires. We will not take any share of it, Mr. Chairman.


Jacques Flynn: Shall clause 1 carry?


John Whitney Pickersgill: Will you call the yeas and nays?


Jacques Flynn: All those in favour of clause 1, will please stand.
Clause agreed to: Yeas, 57; nays, 29.


Jacques Flynn: I declare the clause carried. Shall the title carry?


John Whitney Pickersgill: On division.
Title agreed to on division.
Bill reported.


Donald Methuen Fleming: the third reading of the bill.


Lester Bowles Pearson: Mr. Speaker, I intend to speak on third reading of this bill for only a very few moments. I intend to put the issue, as we see it, before the house on this bill. It is a simple issue, but it is a fundamentally important issue and no smokescreen of any kind, no oratorical invective or exuberance should be allowed to obscure this issue. The issue, Mr. Speaker, is not that of the policy of the person or of the tactics of the governor of the Bank of Canada. The issue is not even whether the governor of the Bank of Canada has co-operated or not co-operated with the government in financial matters in which cooperation from him is desirable, indeed is essential and in some cases is required by law and is certainly required in practice. The governor says he has so co-operated. The minister says that he has not co-operated since at least, November, 1957. This is July, 1961.
But that is not the issue. The issue is one of simply the fundamental right of justice and fair play, the right of a Canadian to be heard before condemnation and to be heard before the body which is condemning him. It is a right enshrined in that clause of the bill of rights which says that no Canadian act of

Governor of Bank of Canada parliament-and we are dealing with a Canadian act of parliament-no Canadian order or rule or regulation or law, shall be construed or applied so as to deprive a person of the right to a fair hearing in accordance with the principles of fundamental justice for the determination of his rights and obligations. By a "hearing" surely is not meant in that clause of the bill of rights the right, in default of a hearing before a court or tribunal, to write letters. So I ask the government this question: How dare it violate this right in this case or in any other case, a government which so often boasts about its devotion to this same bill of rights. In this controversy between the Minister of Finance and the governor of the Bank of Canada, this right is being denied if we pass this bill because we in this House of Commons by this bill shall have condemned the governor. We shall have thrown him out of his job by act of parliament without giving him an opportunity to state his case before the body which is being asked to take action. That is the issue, Mr. Speaker, and that is the only issue, namely such a right to be heard by or before a body which the Minister of Finance once called the high court of appeal; such a right to be heard in simple, elementary justice.
Oh, the hearing might have taken two or three days, if it had been permitted. It might have been inconvenient. It might have been embarrassing to the government or it might have been embarrassing to the governor. However, we would have had an opportunity in this House of Commons, through an agency of the house, to examine the evidence, to summon witnesses and to get as near to the facts of the case as was humanly possible; and on the basis of the evidence, and only that kind of evidence, would we then have been asked to take the action which is embodied in a bill.
I do not know what would have happened if that procedure had been followed. Surely the government by now must be sorry that they did not follow it. Naturally we on this side of the house are suspicious as a result of the refusal of the government to allow this matter to go to a committee. It flatly refuses to allow any evidence to appear in this House of Commons except that evidence which it wishes to bring forward or the evidence we can get on published documents by the governor of the bank and others.
I know this, Mr. Speaker, and the house must know it. Because we are not giving this hearing to the governor of the Bank of Canada, a high public official, we are violating his basic right to be heard before the tribunal which is being asked to condemn him, and to do so on the basis of evidence supplied in this house by the government

alone. When we produce evidence supplied in the press-and that is the only place to which he has access-the Minister of Finance says that it is not true, that it is distorted, that it is false or uses other words of that kind, a procedure which makes it difficult indeed for us to get to the facts of this situation in a way in which we could have done it if there had been a committee.
The fact that the governor, prevented for years from appearing before a commons committee, has circulated letters defending himself against charges which have now been made against him, or the fact that his tactics and some of his statements in his defence may be open to criticism, does not alter his right to be heard. We are the ones on this side who have criticized some of the policies and some of the tactics of the governor in the past, but we now support his right to defend himself against those who accuse him. The House of Commons is being asked to discharge the governor of the Bank of Canada, a public official, who will not resign voluntarily because he asserts that the charges made against him are wrong, that they do him a grave injustice, and that he is entitled to be heard by parliament in respect of those charges before parliament takes action against him. So I repeat, Mr. Speaker, that for the House of Commons to take the action recommended in this bill without the governor's being given the opportunity which he seeks to appear before a committee of this house would be an intolerable and indefensible violation of an elementary right of a free Canadian citizen. Because of that fact we will vote against third reading of this bill.


Herbert Wilfred Herridge: 
Paul Theodore Hellyer: Because of a tyrannical government.


Herbert Wilfred Herridge: The passage goes on to say:
Bills of attainder generally commence in the House of Lords.
Then it goes on to deal with the powers of the commons in this respect. This is an authority upon which the practices and procedures of the parliament of Great Britain are based. Here we read that according to their rules and procedures both houses must hear the accused and the accused must have the opportunity to put forward his defence and have counsel. That practice and procedure, according to the record I have just read, has long been the practice in Great Britain. The Prime Minister has said on a

Governor of Bank of Canada number of occasions that the practices of this house are based on those of the parliament of Great Britain, but in this instance we are departing from that practice.
Then I began to search further. Of course we all know that the constitution of the United States was based in substance on the history, traditions, practices and procedures of the parliament of Great Britain. That was the foundation of the constitution. I read a book entitled "The Liberties of an American" written by Mr. Leo Pfeifer, a very well known advocate in the United States. On page 165 of this book, under a paragraph headed "Bills of attainder" we find the following:
Both the federal government and the states are forbidden by the constitution to enact bills of attainder. A bill of attainder is an act of the legislature inflicting punishment upon a person or persons who have not been convicted in a judicial trial. It needs little argument to show that punishment by legislative act without judicial trial does not accord with democratic concepts of fair play, besides being inconsistent with the American system of the separation of powers.
Historically bills of attainder concerned themselves only with punishment, but, as in the case of ex post facto laws, the supreme court held that a disqualification for an office or profession imposed upon individuals by act of the legislature may constitute punishment and thus be a bill of attainder.
Therefore, Mr. Speaker, I understand the reason why the hon. member for Essex East has constantly referred to this bill as a bill of attainder. For the reasons we stated prior to the vote on second reading, and because during the committee stage of the bill the committee did not have the opportunity to get the facts, to know the truth from both sides, and while we recognize the supremacy of parliament, the issue-as was mentioned by the leader of the official opposition-is the right of the accused to be heard; because the accused has not been afforded the right established by the practice and procedure of the parliament of the United Kingdom, by the practice and procedure of this parliament and, according to him, those rights provided in our bill of rights, this group intends to vote against third reading. However, before resuming my seat, Mr. Speaker, in view of the unusual circumstances, this unique situation and the unfortunate position in which the government will find itself in the eyes of the country, we would like to hear from the Prime Minister at this time.


Mr. Speaker:: Is the house ready for the question?


Some hon. Members:: Question.


William Arnold Peters: Mr. Speaker, just before the vote is taken I would like to endorse the statements of the last speaker, and particularly his last remark.
[Mr. Herridge.l
This debate is a very important one. This is something that has not happened in Canadian history, as the previous speaker pointed out. It is something that has been done very seldom in England, the mother parliament of our system. Because of the confusion that has been raised on all sides of the house in relation to this matter, and the fact that the Prime Minister has been an outspoken advocate of the rights of the individual and has presented to Canada the picture and the image of someone willing to and capable of defending the rights of each individual in this country, I think he has an obligation to give his reasons for asking the parliament of Canada to take this unusual course. I should also like to know why the Prime Minister did not intervene in the major issue of this matter and allow this question to be examined by a committee of the house where all parties concerned could at least exercise their right under the law to be heard.


John George Diefenbaker: I did not intend to participate in this debate until I listened to the Leader of the Opposition (Mr. Pearson) a few moments ago give a summary of several days of this argument-a summary of the position of the opposition. I decided to wait until I had found exactly the position in which the opposition had placed itself, and it is with that position that I intend to deal, after having made some initial reference to the bill of rights which, during the last few days has been folded in the arms of the opposition as something which they have espoused in the past.
I think of the days when I brought the bill of rights before this house, and I see them sitting there, the ministers of that day, now in opposition. They ridiculed the bill of rights. They said it was unnecessary. Last year, at one time, they were about to oppose it when it was introduced. I understand that the member for Essex East (Mr. Martin) took a very firm stand in this direction but that an hon. member occupying one of the rear seats of the opposition took the view that it would be improper and unjustified on the part of the opposition to oppose the bill of rights. Finally, after days of uncertainty, it received the support of the opposition.
I am glad to see today the degree to which, with the passing months, that which they rejected, that which they ridiculed, that stone they were about to reject as having no basis, in fact has become the cornerstone of their arguments in connection with the removal of the governor of the Bank of Canada.


Paul Theodore Hellyer: The rights, not the bill.


John George Diefenbaker: The hon. gentleman does not even know what the bill of rights contains, of that I am sure. I have heard his observations on this earlier-observations in which he said there is nothing to the bill of rights. Now he is going to interpret that which only last year he stated would never be effective in this country. And in the ensuing months, over and over again, the prophecies of the opposition have proven to be false, in that the bill of rights has become, in fact, a measure whereby the individual, in the preservation of his rights and fundamental freedoms, has received, in the courts, the protection which it provides.
Today we find them, these who ridiculed, these who condemned, these who would have diminished its effect if they could have done so, suddenly become the proponents of the thing which they said was worthless, ineffective, and not legislation of a kind which ought to be placed on the statute books. When I see the hon. member for Bonavista-Twil-lingate (Mr. Pickersgill) speaking of the rights of men, talking of bills of attainder and the dangers to individuals of action being taken in that regard, what a transition has taken place in his thinking since he departed from the position of clerk of the privy council to that later of a minister of the crown and, today, of a member of the opposition. Can he forget what he did to Mr. Pitt? Can he forget that? Was he given a trial? I ask the hon. gentleman: what trial did you give him? What offence had he committed, excepting that he denied you the opportunity to occupy the room to which you, in your position, believed you were entitled?


John Whitney Pickersgill: On a question of privilege, the right hon. gentleman has chosen to revive an incident about which he made speeches in the election of 1953 and about which I wrote him a letter to which he never deigned to reply, in which I set out the facts about this matter. I intend when the right hon. gentleman has finished his speech, to put that letter on he record, and we shall see who is telling the truth about this matter.
The right hon. gentleman has made an accusation against my honour-


Mr. Speaker:: Order. The hon. member, of course, has his right to speak in due course.


John Whitney Pickersgill: An attack has been made on my honour-


Mr. Speaker:: Is the hon. member raising a question of privilege?


John Whitney Pickersgill: Yes.


Mr. Speaker:: Will he state the matter of privilege?
Governor of Bank of Canada


John Whitney Pickersgill: The right hon. gentleman has made an accusation which affects my honour. There is absolutely no truth in his charge that I had anything whatever to do with any action which may have been taken by the head of the Canadian National Railways concerning Mr. Pitt. Those facts have been put on the record, and the right hon. gentleman was sent those facts in a letter to which he did not bother to reply.


John George Diefenbaker: I realized the hon. gentleman would become aroused.


John Whitney Pickersgill: McCarthyism.


John George Diefenbaker: Oh, the hon. gentleman should not speak of that. We recall all the papers of those days and months. We remember the arrogance and the attitude of the hon. gentleman. He says he wrote me a letter to which I did not reply-a letter of the individual in question regarding matters which were self-exculpatory and which were not based on the facts.


John Whitney Pickersgill: I was not given a hearing either.


John George Diefenbaker: I do not mind interruptions as long as they are made from a standing position. I can understand the feelings of the hon. gentleman. I realize full well that this is one of those things-that the word "Pitt" is written on the hon. gentleman's heart as "Calais" was on Mary's heart. They talk about the bill of rights, and they talk about the rights of the individual-those who in 1945 and 1946 and 1947 destroyed the rights of individuals in this country by order in council. These are the people who today wrap themselves in the garments of political rectitude; these are the individuals who said to a farmer from the province of Manitoba who had won a case in the courts: you shall not carry on that case-by order in council we declare that whatever the courts may have decided you shall not have your rights. These are the individuals-and several of them are sitting here today-who at that time passed an order in council whereby in an investigation into one company in this country there was set up a commissioner with full power to investigate, inside or outside the law. If this investigating commissioner went beyond the law it stated that there should be no right of action on the part of the individual who had been wronged. I could go on indefinitely, but these are the people to whom today, in the hours of opposition, repentance has come, if we are to believe them.
I shall mention the bill of rights, that bill which has been so ridiculed and spurned. It covers fundamental freedoms and human rights and recognizes in Canada that there

Governor of Bank of Canada have existed and shall continue to exist without discrimination, certain named human rights and fundamental freedoms, and then states, in so far as the construction of the law is concerned that every law of Canada shall, unless expressly declared by an act of the parliament of Canada operate notwithstanding the Canadian Bill of Rights. This bill goes on to state that no law shall be construed or applied to authorize or effect the arbitrary detention, imprisonment or exile of any person, impose or authorize the imposition of cruel or unusual treatment or punishment, deprive a person who has been arrested or detained of the right to be informed promptly of the reason for his arrest or detention, nor of the right to retain and instruct counsel without delay, nor of the right by way of habeas corpus for the determination of the validity of his detention. That strikes home recollections of another day.
One of these hon. gentlemen, and perhaps two of them, were then members of the government in the month of September 1945 when-


Paul Theodore Hellyer: Mr. Speaker, I rise on a point of order.


An hon. Member:: Sit down.


Paul Theodore Hellyer: Mr. Speaker, on a point of order.


Some hon. Members:: Order.


Paul Theodore Hellyer: Mr. Speaker, what is the relevancy of the debate presently being engaged in by the Prime Minister-


An hon. Member:: Sit down.


Paul Theodore Hellyer: I hope Your Honour will enforce the rule of relevancy.


Some hon. Members:: Order.


Mr. Speaker:: Order. A point has been taken that the remarks of the Prime Minister (Mr. Diefenbaker) are not relevant to the debate on third reading of this bill. As I understand the tenor of the statements of the Prime Minister they are directed toward the proposition that fundamental rights are involved in this bill. I heard the Leader of the Opposition (Mr. Pearson) also suggest this was the basis of his opposition to the bill on third reading.
I think if the Prime Minister goes into an illustration which brings forth other matters, themselves irrelevant, the scope of the debate is enlarged to the extent that there may be an extended reply, that would not be strictly relevant. Having regard to the position taken by the two previous speakers I do not think I can suggest that the tenor of the argument is irrelevant. However, I do make the observation that while it is in order to
IMr. Diefenbaker.)
illustrate argument, references to extraneous matters which tend to enlarge the scope of the debate are not relevant.


John George Diefenbaker: Mr. Speaker, I have listened to all these arguments about the bill of rights, and I know it is disturbing to hon. members opposite-


Some hon. Members:: Oh, oh.


John George Diefenbaker: I know it is disturbing to hon. members opposite when I make such reference because they do not wish to hear the facts.
I had arrived at the point of mentioning the particular matter of habeas corpus which those apostles of parliamentary government posed today in relation to preservation of the rights of men. I was pointing out that those hon. gentlemen passed an order in council in the month of September, 1945, abolishing the right of habeas corpus, and kept it concealed until February, 1946, in accord with a denial on the part of the then minister of justice that there was in fact a hidden and secret order in council.
I have been reviewing something of the record of those hon. gentlemen in order that the house may have some conception of the degree to which reliance is to be placed upon those apostles in respect to things they today avow as necessary and worthy of maintenance, when they themselves have transgressed each and every one of them during their day.
I made reference to the bill of rights because the subsection thereof to which they apparently make reference is that which states that no person shall be deprived of a right to a fair hearing in accordance-


Some hon. Members:: Hear, hear.


John George Diefenbaker: -in accordance with the principles of fundamental justice for the determination of his rights and obligations.


Some hon. Members:: Hear, hear.


John George Diefenbaker: It is in that connection that I intend to particularly refer to Mr. Coyne's rights and obligations being interfered with when the supreme court of parliament has before it his record-


Some hon. Members:: Oh, oh.


John George Diefenbaker: -when the supreme court of parliament has before it his record as set forth-


William Moore Benidickson: Now we have a real demagogue.


John George Diefenbaker: -as set forth in the letters which he has issued from time to time.


Some hon. Members:: Hear, hear.


John George Diefenbaker: In one of those letters he refers to the word of a man-


Mr. Winch:: Mr. Speaker, it is six o'clock.


John George Diefenbaker: -in whom he places reliance. I look at that individual now and wonder whether I behold in fact the person who dictated certain portions of those letters.


Lester Bowles Pearson: You do not see him.


John Whitney Pickersgill: Mr. Speaker, I rise on a question of privilege.


An hon. Member:: It is six o'clock.


John Whitney Pickersgill: Mr. Speaker, I rise on a question of privilege.


Mr. Speaker:: Order.


An hon. Member:: It is six o'clock.


John Whitney Pickersgill: Mr. Speaker, on a question of privilege.


Mr. Speaker:: Order. I think the hon. member might better defer his statement in regard to the matter of privilege until the debate can be resumed, as it is now six o'clock.


Lionel Chevrier: No.


Lester Bowles Pearson: No, Mr. Speaker.


John Whitney Pickersgill: Mr. Speaker, when one is defamed by the words of the Prime Minister, one should surely be given a second in which to reply.


An hon. Member:: It is six o'clock.


Lionel Chevrier: The hon. member should be allowed an opportunity to reply.


Mr. Speaker:: Order.


Lester Bowles Pearson: Mr. Speaker, the hon. gentleman should be granted time to reply.


Mr. Speaker:: Order.


An hon. Member:: It is six o'clock.
5,	1961	7595
Business of the House


Lionel Chevrier: This is unfair.


William Moore Benidickson: Surely the majority will be fair.


Mr. Speaker:: Order.


John Whitney Pickersgill: Mr. Speaker, I should be allowed to rise on a question of privilege.


Mr. Speaker:: Order. Will the hon. gentleman resume his seat. The hon. member rose on a question of privilege at the time of the adjournment. By leave of the house the question can be heard now. Is it agreed?


Some hon. Members:: Agreed.


John Whitney Pickersgill: Mr. Speaker, the statement the Prime Minister has just made was made by the Minister of Public Works in the form of a direct question to me the other evening. At that time I gave a simple and direct answer which was no; my answer is still no. My reputation, for telling the truth in this house, I stand on.


Some hon. Members:: Hear, hear.


Paul Theodore Hellyer: Clear and unequivocal.


Mr. Speaker:: Order. The hon. member has stated his question of privilege and if there is no comment on it I shall now leave the chair.


Paul Theodore Hellyer: The Prime Minister plunged to new depths this afternoon.


Mr. Speaker:: Order. It being six o'clock, unless there is some discussion of the business for tomorrow I shall adjourn the house.



BUSINESS OF THE HOUSE

Gordon Minto Churchill: Government orders tomorrow, Mr. Speaker.


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


[Stage Direction]
The fifth meeting of the Canada-United States interparliamentary group was held in Washington and Norfolk, Virginia, from Wednesday, June 7, to Sunday, June 11, both inclusive. Twenty four members of the congress of the United States and 24 members of the parliament of Canada participated.
The group held two plenary sessions and two series of committee meetings on Thursday and Friday. One committee discussed defence and foreign policy, while the other committee discussed economic matters of interest to both countries. The first committee met under the co-chairmanship of Senator Homer Capehart, and later Senator George Aiken, and Speaker Mark Drouin. The second committee was co-chaired by Representative Cornelius Gallagher and Speaker Roland Michener.
The Canadian delegates were welcomed at the opening plenary session on Thursday, June 8, by Secretary of State, Dean Rusk, who underlined the importance of these meetings of legislators as a valuable means of promoting better understanding and appreciation of their mutual problems. Later that morning the Canadian delegates proceeded to the floor of the United States Senate and were welcomed by Senators Aiken, Mansfield, Dirksen, Capehart, Keating, Humphrey, Johnson, Javits, Allott, Fong and Senator Hickey, the presiding officer. The statements of welcome are printed in Appendix "B" of this report.
Representative Gallagher was host at a luncheon in the old supreme court chamber, an historic room of the Capitol building which served as the Senate chamber from 1819 to
1859	and as the supreme court chamber from
1860	to 1935. The wives of the delegates were entertained at luncheon by Mrs. Fulbright and Mrs. Gallagher. Following these luncheons the members of the Canadian delegation and their wives had the honour of being received by the President at the White house.
Later in the afternoon the co-chairmen participated in a ceremony at the zoological gardens of the Smithsonian institute, when a pair of Canadian beavers, the gift of the government of Canada, was formally presented to the director of the institute. The occasion was enlivened by the presence of a baby beaver born to the pair in Washington a few
days before. That evening the Canadian delegation and their wives were the guests at a dinner given by the United States delegation.
On Friday, following the conclusion of the business sessions, the Canadian delegates were the guests of Senator Aiken at a luncheon in the old supreme court chamber. Meanwhile the wives of the Canadian delegates enjoyed a very pleasant cruise on the Potomac river on board President Kennedy's yacht, the Honey Fitz. Members of both delegations and their wives left Washington late Friday afternoon for Norfolk, Virginia, where they were the guests of the continental army command for the week end. On Saturday, after the inspection of a guard of honour and the firing of a 19-gun salute, the delegates attended air and ground exercises at Fort Storey and Fort Eustis near Norfolk. The group also visited the national aeronautical space agency for a briefing on "project Mercury" by Mr. Carpenter, one of the seven United States astronauts, and other members of the agency. On the same day, the wives of the delegates visited Jamestown and Williamsburg for a tour of historic sights. Both delegations returned to their respective capitals on Sunday afternoon.
Committee Discussions
The discussions in the committees took place with the same spirit of frankness and respect for divergent views as has characterized discussions at previous meetings. The personnel of the two committees is shown in Appendix "A" of this report. At the closing plenary session on Friday, reports of the two committees were approved for inclusion in a press release. This press release was distributed at a press conference held by the four co-chairmen prior to the departure for Norfolk. The committee reports are reprinted in Appendix "C" of this report.
Conclusions
This latest meeting of the Canada-United States interparliamentary group confirmed once again the usefulness of such exchanges. All delegates, many of whom were attending for the first time, welcomed the opportunities given to them both in the business sessions and on informal occasions for discussions with their United States colleagues. The Canadian delegates wish to express their

warm appreciation for the cordial hospitality of President Kennedy, the members of the United States delegation, and the commanding general and officers of the United States continental army command.
As a result of the policy of including new personnel in the delegations for each meeting, 56 members of congress and seventy members of parliament have now taken part in one or more of the meetings held since January, 1959. As on previous occasions, the attendance of the wives of the delegates did much to confirm and strengthen in social exchange the friendships formed in the conferences themselves.
In submitting this report, we also wish to acknowledge the co-operation and express our appreciation for the assistance of officials of the various departments of the Canadian government who helped with the arrangements for the meeting.
Mark R. Drouin Roland Michener Speaker of the Senate Speaker of the House
of Commons Joint Chairmen Dated at Ottawa July 5, 1961.
Appendix "A"

[Stage Direction]
The delegates, arranged according to the committees on which they served, were the following:
Defence and Foreign Policy Committee United States Delegation Senator George D. Aiken (Chairman) (R) Senator Homer E. Capehart (R)
Senator Francis Case (R)
Senator Eugene J. McCarthy (D)
Senator Maurine B. Neuberger (D) Senator Claiborne Pell (D)
Representative Edna F. Kelly (D) Representative Philip J. Philbin (D) Representative Samuel S. Stratton (D) Representative William T. Murphy (D) Representative William S. Broomfield (R) Representative Glenn Cunningham (R)
Canadian Delegation Hon. Mark Drouin (Co-Chairman)
Senator J. E. Lefrangois (L)
Senator Lionel Choquette (PC)
Hon. Paul Hellyer (L)
Mr. Egan Chambers (PC)
Mr. Gordon Aiken (PC)
Mr. C. A. Best (PC)
Mr. R. C. Coates (PC)
Mr. Frank Howard (CCF)
Mr. C. R. Granger (L)
Mr. H. P. Lessard (L)
Mr. G. M. Stearns (PC)
90205-6-480
Economic Matters Committee United States Delegation Representative Cornelius E. Gallagher (Chairman) (D)
Senator Mike Mansfield (D)
Senator Alexander Wiley (R)
Senator Warren G. Magnuson (D)
Senator Henry C. Dworshak (R)
Senator Gordon Allott (R)
Senator Thomas J. Dodd (D)
*Senator Lee Metcalf (D)
Representative Frank Ikard (D) Representative Thaddeus J. Dulski (D) Representative Laurence Curtis (R) Representative Stanley R. Tupper (R) Representative Howard W. Robison (R) *Representative Harold D. Cooley (D) *Representative Ralph R. Harding (D)
Canadian Delegation Hon. Roland Michener (Co-Chairman) Senator W. R. Brunt (PC)
Senator A. L. Beaubien (L)
Senator S. J. Smith (L)
Mr. Paul Martineau (PC)
Mr. J. M. Forgie (L)
Mr. Orville Philipps (PC)
Mr. J. R. Taylor (PC)
Mr. O. J. Godin (L)
Mr. Lucien Grenier (PC)
Mr. H. G. Rogers (PC)
Mr. R. R. Southam (PC)
* Also participated in place of members of official delegation who were unable to attend.
Appendix "B"

Mr. Aiken:: Mr. President, each year for several years it has been our privilege to have as our guests in congress members of the Canadian parliament. We have with us today 12 members of the house and 12 members of the Senate. We are always glad to have the Canadian delegation with us. We consider our Canadian friends the best friends we have anywhere. The following members are present in the chamber, and I take the opportunity to introduce them to the Senate.
Senate
Hon. Mark R. Drouin, Progressive Conservative party (Quebec), Speaker of the Senate.
Hon. W. R. Brunt, Progressive Conservative party (Ontario).
Hon. Arthur L. Beaubien, Liberal party
(Manitoba).
Hon. Sydney J. Smith, Liberal party (British Columbia).

Hon. J. E. Lefrancois, Liberal party (Quebec).
Hon. Lionel Choquette, Progressive Conservative party (Ontario).
House of Commons
Hon. Roland Michener, Progressive Conservative party (Ontario), Speaker of the House of Commons.
Hon. Paul Hellyer, Liberal party (Ontario).
Mr. Egan Chambers, Progressive Conservative party (Quebec).
Mr. Paul Martineau, Progressive Conservative party (Quebec).
Mr. J. M. Forgie, Liberal party (Ontario).
Mr. Gordon H. Aiken, Progressive Conservative party (Ontario).
Mr. C. A. Best, Progressive Conservative party (Ontario).
Mr. R. C. Coates, Progressive Conservative party (Nova Scotia).
Mr. Frank Howard, Co-operative Commonwealth Federation (British Columbia).
Mr. Orville H. Phillips, Progressive Conservative party (Prince Edward Island).
Mr. J. R. Taylor, Progressive Conservative party (British Columbia).
Mr. O. J. Godin, Liberal party (Ontario).
Mr. C. R. Granger, Liberal party (Newfoundland).
Mr. H. P. Lessard, Liberal party (Quebec).
Mr. Lucien Grenier, Progressive Conservative party (Quebec).
Mr. Harris G. Rogers, Progressive Conservative party (Alberta).
Mr. R. R. Southam, Progressive Conservative party (Saskatchewan).
Mr. G. M. Stearns, Progressive Conservative party (Quebec).
We are delighted to have the Canadian delegation with us today and tomorrow. I believe another activity, which we hope will be equally interesting to our guests, is planned for Saturday. (Applause, senators rising.)


Mr.   Mansfield@: Mr. President, I wish to join the distinguished senator from Vermont, who has led the Senate group so ably in our discussions with our Canadian colleagues for the past several years. We are always honored when a delegation from another country comes to visit us. We are especially honored when our Canadian friends do us the honor and the privilege of meeting with us in this chamber. We hope your stay will be happy. We hope that we will be able to reciprocate at least in part for the many kindnesses and courtesies and privileges which you have extended to us on the visits which we have made to your delightful and wonderful country. It is good to have you with us. We hope that this will be just one visit of many.


Mr.   Dirksen@: Mr. President, in a world that is so full of ugly fevers and contagion today, we can think of nothing quite so comforting and so reassuring as to have a delegation from our neighbouring country come to visit us, to whom we can refer with earnestness and in truth and in fact not only as neighbours, Mr. Speaker, but as friends.
It brings a real note of comfort, as with our eyes, as Ishmael did of old, contemplate the horizons of the world and a sea of troubles, to consider how fortunate we are. We hope that you deem yourself equally fortunate that we are your neighbours. It is great comfort that we can live together in amity and concord without troops and without any other visible military evidences, because of the understanding that we have had for such a long time.
As minority leader, I welcome you to the Senate.


Mr.   Capehart@: Mr. President, I merely wish to say to these gentlemen that it is a pleasure for us and a great honor to have you here. We hope that you will come very often.


Mr.   Keating@: Mr. President, as a representative of the state of New York, a considerable part of which borders on our great friends to the north, I wish to extend greetings to this distinguished group. I have spent many happy hours in Canada, and I have always enjoyed my visits there. I have many Canadian friends. I am sure that many of you gentlemen have close friends in the United States. My city of Rochester is to a large extent populated by people who were bom in Canada and who cherish their ties to the north. We have very close relations with our Canadian neighbours. The Rochester yacht club sponsors a very spirited contest, as you probably know, with our Canadian friends, in which we have been frequently bested, but we never give up.
I am delighted to note that so many of our guests from the north have elected to sit on this side of the aisle in the Senate. There are a great many vacant chairs here, and we welcome them on this side of the aisle. We congratulate them on their good judgment, and are perfectly delighted to have some of these vacant chairs filled.
I know our friends will not take it amiss when I say that, if we cannot have more Republicans, then there is no one else we would rather have in these chairs, no one else in whose presence we would take greater pride or pleasure than our good friends from the north.


Mr.   Humphrey@: I too wish to join in extending a friendly and cordial welcome to our fellow parliamentarians from Canada, who are our good friends.

After listening to the lucid comment of my friend from New York, I am reminded of one part of our foreign aid and foreign policy programs, the exchange program. As a member of the Senate on this side of the aisle I would not mind proposing an exchange for some of the regular attendants on that side of the aisle for those I see presently on that side of the aisle. (Laughter)
We welcome you and we want you to know that your presence in the Senate is a source of satisfaction and joy to us.
My state of Minnesota borders on Canada. Many times we have travelled to the great city of Winnipeg. Many of our people make regular journeys over there. Many of your people come to Minnesota.
We are at the other end, so to speak, of the St. Lawrence seaway. We are joined to you not only by the great land mass of the Nort American continent, but also by the great St. Lawrence seaway.
We wish to express our appreciation to our friends from Canada for their leadership in the consummation of this, one of the great public works projects of all time.
Finally, I express my appreciation to them for their leadership in the councils of diplomacy. Canada has demonstrated mature statesmanship, particularly at the United Nations. That leadership has had a very good effect and a very good conditioning upon the deliberations of the United Nations, and we thank you for it. We herald you also for your tremendous economic growth in recent years, and the capacity you have demonstrated of being able to roll with the punches of your economic growth and expansion. We congratulate you upon your prosperity and upon your sharing of the fruits of your production. We also congratulate you upon your population growth. Surely in your great country there is so much room for so many good people.
Frankly, we are happy, as the minority leader said, in these trying days, to have such wonderful good friends, even when you occasionally tell us things that we may not want to hear, even though we may deserve to hear them. We shall reciprocate in kind but in a kindly way.


Mr. Johnston:: It is a wonderful thing in this troubled world to have representatives from another nation come to visit us, particularly to have these visits made by people who believe as we do and work along with us in our efforts to make this a better world. If all the nations of the world believed as you do it would be a much better world to live in. So we are thankful today to have you come to visit us here in the United States, as we face the problems that we are facing, and realize that we have you right to 90205-6-480J
the north of us, and that you are our right hand, so to speak, in helping solve the problems of the world. May you continue to grow and not only prosper materially but also prosper in giving all the people the liberties that belong to them. God bless you and may you continue to grow is the wish of all the senators at this time.


Mr.   Javils@: Mr. President, I wish to join my colleague from New York in welcoming the Canadian parliamentarians, and to express on this rare occasion my appreciation for the many long-standing favours conferred upon my state through my person.
When I was attorney general I had the opportunity to co-operate with your authorities in finding and punishing rascals in the security field. I received enormous co-operation from your officials. During the war, as an army officer, I worked with your minister of munitions. In more recent days I had the honour of dining with Prime Minister Diefenbaker and his cabinet, including the late departed and lamented Mr. Smith, a very dear friend of mine, and a wonderful man.
I have also visited and participated in the inauguration of power projects connected with the seaway, and in the Niagara frontier area, where we are working together.
As my tribute, as a senator from the state of New York, to the great Dominion of Canada, a great, stanch, and true friend, as has been so eloquently stated by my colleague, the distinguished junior Senator from New York (Mr. Keating), I may say that we have demonstrated that free peoples can work together in a discipline, nothwithstanding the fact that self interest may often dictate our pulling apart.
In the final analysis, no matter how frank you may be with us-and even critical at times-we all know that, like a couple who are married, this has all got to be lived with until there is a better day or a sunnier side to our relations, because we are indissolubly linked together.
I think it is this deep conviction which we all carry, and which is so particularly true in the States which border on Canada that represents one of the enormous strengths of freedom throughout the world. I do not think any nation in the world, even behind the iron curtain, doubts that Canada and the United States will always stand together, and that any hopes of separating them in any way are bound to be dashed. This is one of the most enormous strengths which freedom has.
I am delighted to welcome you and to speak to you in that spirit.


Mr.   Alloil@: Mr. President, I have had the honor this morning, in the absence of the

co-chairman of our delegation, the senator from Vermont (Mr. Aiken), to welcome our distinguished visitors to Washington and to the United States. To do this again would be, indeed, surplusage. However, for the Record, I think perhaps it should be said that this particular meeting has been of unique value, a value which is not found in any other type of meeting. That unique value is that members of the House of Representatives and members of the U. S. Senate, and members of the House of Commons and members of the Canadian Senate, are able to meet together and discuss frankly every phase of our relationships-our cultural relationships, our tourist relationships, our economic relationships, our common interest in matters of defence, our common interests in the salvation of freedom throughout the world; and to do this frankly, without any fear of having spoken something which is contrary to the spirit of our respective governments, because none of us can speak for our governments, even though two distinguished Speakers of the parliament of Canada are here.
So if in the days ahead it should be asked what we hope to accomplish by this meeting it may be said we hope to accomplish the great area of understanding which friends seek- and understanding which is based upon giving and taking, and giving and forgiving; an area which we know will lead to more fruitful relationships in every respect between our countries.
The unique value of this meeting is that we meet without fear of doing something which may be taken as binding upon our governments. We meet in a spirit of friendship and frankness, which brings to all of us an education as to the desires and the possibilities of the future. That is something which we need.
Again, I welcome our Canadian friends to Washington and to the United States.


Mr.   Fong@: Mr. President, I join with other senators in welcoming the members of the Canadian parliament to our hall and to our country. I was a member of the interparliamentary committee which went to Canada in February. We received from the members of the Canadian parliament a most cordial and hospitable welcome, a welcome much unlike, as I told them, the first welcome I received from the Canadian people, when I was deported from Canada in 1929. That incident took place when I was a member of the R.O.T.C. team from the University of Hawaii. We went to Camp Perry, Ohio, and then crossed the Detroit river in an attempt to go to Windsor. At that time the Canadians told me I had to post a bond if I wanted to enter Canada. So I returned to the United States, at the invitation of the Canadian government,
and they paid my transportation fare of five cents across the Detroit river. (Laughter).
Mr. President, the meetings which the interparliamentary committee held in Canada in February were most fruitful. I was much impressed with the earnestness and the seriousness of the views of our neighbours across the border. I know that their problems and our problems can be solved most amicably. I came away from that meeting with a better concept of their problems, knowing that the differences which exist between the United States and Canada are minor compared with the may things which we have in common.
We in this hemisphere have mutual problems, and we know that by discussing them together from time to time, as we did in Canada in February, and now, again, in the United States, we shall be able to solve them.
I look forward to long lasting friendship and amity with the Canadian people. I know that this friendship will endure to all eternity. I thank the representatives of the Canadian parliament for coming to visit us. I know that our deliberations will be fruitful for both the United States and Canada.
Again, I convey my welcome to the Canadian parliamentarians, and am grateful to them for having taken the time to come and visit us.
The Presiding Officer (Mr. Hickey in the Chair): The Chair joins in the hearty welcome accorded by senators to our brethren from our northern neighbour; and trusts that their sojourn in our capital city will prove both pleasant and profitable.
Appendix "C"



REPORTS OF COMMITTEES

[Stage Direction]
Report of Defence and Foreign Policy Committee
1.	Western Hemisphere Co-operation:
(a) Canadian participation in the O.A.S United States members supported President Kennedy's recent suggestion that Canada consider joining the O.A.S. Canadian members agreed that Canada and the United States must stand together in supporting common objectives within the hemisphere, to raise standards of living and help meet the communist threat. The problem for Canada is to decide whether joining the O.A.S. would be in the best interest of Canada and the western hemisphere. This question is the subject of lively public discussion in Canada at the present time.
Among the arguments advanced in favour of Canada's association with the O.A.S. were the assistance which Canada might be able to give toward raising living standards in Latin America, the additional weight of

Canadian leadership and stability in hemispheric policy discussions, removal of the anomaly of Canadian participation in NATO but not in O.A.S., and removal of doubt about Canada's support of the principles on which O.A.S. is founded.
Among the arguments mentioned in opposition to Canadian participation in O.A.S. were the limitations on Canada's resources, the risk that Canada's position in O.A.S. would either be labeled as that of a satellite of the United States or would be harmful to United States prestige to the extent that Canada's attitudes diverged from that of the United States on significant issues, and finally the loss of Canada's ability to present an uncommitted view on problems arising in the hemisphere.
(b) Cuba: There was complete agreement on the serious threat which communist influence in Cuba presents to the whole hemisphere. With respect to methods of countering this danger, however, there were two basically different approaches. Some felt that the situation warranted drastic measures. Others believed the Cuban revolution was brought about by underlying causes which are to be found in many other areas in Latin America. These unhealthy tendencies must be dealt with on a long term basis through programs of economic assistance, information, cultural interchange, and foreign policies in the interest of the freedom and economic opportunity of mankind. The committee agreed that there is need for expressing to the peoples of less developed countries the social objectives of our society. To compete successfully with the communists in the emerging countries we must explain our system in terms of social justice as well as personal freedom.
2.	Strengthening NATO:
There was full agreement of the necessity of strengthening the conventional forces assigned to NATO. It was noted that both Canada and the United States have met their NATO force goals. Several specific NATO defence problems were discussed: the desirability of having small nuclear weapons for tactical use; the inhibition on the use of major nuclear weapons in the absence of adequate conventional forces; the question of control by a multi-national organization over a NATO nuclear strategic force; and the necessity of making the United States nuclear retaliatory weapons invulnerable. It was recognized that if the Soviet union moved at any time in force to cut off access to West Berlin, NATO would be ready to respond with the necessary force.
3.	China Policy:
The committee discussed trade with communist China. The members were agreed that there should be no trade in strategic goods. The Canadian members, however, stated that in Canada there was general support for a policy of trade with China in nonstrategic goods on the grounds that to cut off all trade would not weaken the hold of the Chinese communist party and that trade helps maintain the strength of the Canadian economy. The view was also expressed that it can assist in some measure to preserve a small reservoir of good will in China which could be of long term benefit to the west. Some United States members, while acknowledging that the United States does trade in certain non-strategic commodities with countries of eastern Europe, were of the view that trade materially assists the Chinese in reaching their economic objectives, raises moral issues on which the United States public feels deeply and strengthens the Chinese position in Asia. The Canadian chairman referred with pleasure to the statement made in the House of Commons the previous day by the Prime Minister regarding the happy solution to the difficulty which had arisen over the supply from United States sources of grain unloading equipment and the committee agreed that this was a good example of continuing co-operation between, the two countries.
The committee also discussed the closely related questions of diplomatic recognition of communist China and its representation in the United Nations. While neither Canada nor the United States has yet recognized the People's Republic of China, it was generally agreed that the issue of representation in the United Nations would soon confront the two nations and that at the forthcoming meeting of the general assembly there would likely be increased support for seating representatives of communist China. The "two China" concept was also considered as a possible solution for the representation of China. It was pointed out that the admission of a Chinese communist delegation to the United Nations would be interpreted in many places in the United States as an act of appeasement and might lead to strong demands that the United States leave the United Nations. The Canadian members pointed out that Canadian public opinion is divided on the issue.
4. Disarmament
The committee agreed that disarmament negotiations must be continued despite the difficulties and lack of concrete progress so
[Stage Direction]
far. Recognizing the growing military potential of communist China, probably independent of Russia, it was suggested that at some future time provision, might be made for communist China to participate in realistic disarmament discussions. Confirming the continuing need to seek agreement on banning nuclear tests under adequate safeguards, the committee was concerned as to how long the United States should postpone the testing which is required to advance nuclear capability in the face of Russia's refusal to negotiate an agreement in good faith. Only by thorough inspection around the world could [DOT]each side be certain that the other was not [DOT]secretly taking the lead in more efficient weapons. Canadian members reported that public [DOT]opinion in Canada now was against resumption of nuclear tests, but could change in the face of continued Russian rejection of inspection and the growing possibility of the Russians conducting secret tests.
5.	Defence Production Sharing
In view of the interdependent nature of the economic as well as the military aspects of the common defence effort, the committee confirmed the need for a strong industrial base in Canada as an essential part of North American defence. The defence production sharing program continues to provide opportunities for Canadian industry to participate on an equitable basis with United States industry in defence development and production. The committee noted that since the initiation of the program, Canada continued to procure more defence items in the United States than the United States procured in Canada. It was agreed that efforts should be continued to strengthen the Canadian portion of the common defence production base through increased United States defence procurement in Canada.
Report of the Committee on Trade and Economic Matters
Aid to Underdeveloped Countries
There was a general discussion on the principles which should govern aid to underdeveloped countries and the problems of implementing aid programs. It was agreed that there was need for more effective preparation and planning of aid programs and that proper training of personnel administering them was also important. Reference was made to the desirability of close co-operation between Canada and the United States as contributing countries, both in determining a fair sharing of the burden and in promoting effective administration. The United States delegation pointed out that the United States was now contributing about 1 per cent of its
gross national product to foreign aid programs, and the suggestion was made by the United States delegation that this percentage might be a target toward which other countries might aim. It was agreed that this aid was necessary in furtherance of the aims of the developed nations in accepting their responsibility toward the underdeveloped countries.
Boundary Waters
In the discussion of the Columbia river, the Canadian delegation observed that there were certain problems in Canada that had to be resolved before ratification of the treaty by parliament could take place. In this connection, it was pointed out that the province of British Columbia had made the necessary amendments to its water act, and had authorized the British Columbia power commission to apply for a licence to construct the Canadian works provided for under the treaty. It was also understood that the preconstruction engineering would be completed later this year. It was hoped, therefore, that the project would not be delayed unduly.
Concerning the Passamaquoddy tidal power project, a member of the United States delegation asked for an expression of Canadian views, in the light of the international joint commission report. A member of the Canadian delegation responded that the report indicated an unfavourable cost benefit ratio which in turn suggested that the project would be uneconomical at this time. The United States delegation thought it might be useful to continue studies of the project.
The United States delegation urged the desirability of a joint study of potential traffic on the Richelieu-Champlain waterway and of improvements to handle this traffic. Such a study was of some urgency due to possible alternative action by the United States on the Hudson-Erie waterway.
Tourism
There was a discussion on the balance of tourist expenditures between Canada and the United States. It was pointed out that in 1958 and 1959 Canadian tourist expenditures in the United States were $413 million and $448 million, respectively, while United States tourist expenditures in Canada were $309 million and $351 million. Thus, there was an annual Canadian deficit of approximately $100 million in each of these years. With this in mind, the Canadian delegation expressed concern over the legislation now pending in the United States congress to reduce the import duty exemption accorded to returning United States tourists from $500 to $100. Both delegations recognized the seriousness of the problem and discussed several

ways in which the present imbalance might be improved, including expanded Canadian tourist promotion and better arrangements for air travel on Canadian and United States transborder carriers.
Trade
The committee discussed trade with the Sino-Soviet bloc with particular reference to trade with communist China. The Canadian delegation explained the recent sale of agricultural products to communist China. It was pointed out that the whole matter of agricultural products and of foreign sale of food stuffs was a problem of greater relative magnitude for Canada than for most other countries since Canada consumed about 14 per cent and exported 86 per cent of its wheat production, whereas in the United States the figures were just the reverse. The United States delegation understood the factors within Canada that resulted in these sales and explained the basis for the United States in not engaging in such trade.
Trade with Cuba was also discussed. The United States delegation explained the distinction in United States law between trade with Cuba and with communist China. It cited the dwindling amount of such trade in the permissive categories of food and medicine.
Both delegations recognized that Canada and the United States had a common interest in strengthening themselves and in supporting and promoting free world objectives against the threat that faces them.
United States Investment in Canada
The contribution which United States investment has made to the development of Canadian industry was recognized but members of the Canadian delegation also drew attention to the problems which arose in Canada due to the large measure of United States control over certain segments of Canadian industry. It was pointed out that the Canadian government had recently taken measures to encourage wider participation by Canadians in their own industrial development without penalizing foreign investment. It was also suggested by the Canadian delegation that it would be helpful if Canadians had greater access to the equity financing of United States companies in Canada.
International Trade Unions
The Canadian delegation expressed some concern over the excessive influence exercised on Canadian trade unions by the heads of some United States-controlled international unions. Admittedly this was a matter for consideration within Canada.
European Trade Groupings
A Canadian delegate expressed the hope that Canada and the United States would consult to find a mutually satisfactory approach to the problems created by European trade blocs.
[Stage Direction]


Thursday, July 6, 1961

[Stage Direction]
Second report of standing committee on agriculture and colonization-Mr. McBain.