BEAUHARNOIS POWER PROJECT


Mr. SPEAKER:: I have the honour to
inform the house that I have received the following communication from the Clerk of the Senate:
Resolved, that a message be sent to the House of Commons requesting that house to grant leave to their Clerk to appear and produce before a special committee of the Senate a copy of the evidence adduced before a special committee of the Commons appointed during the second session of the present parliament, to investigate the Beauharnois power project.


Right Hon. R. B. BENNETT (Prime Minister):: I move that the request contained in the message that 'has just been received from the Senate, be granted, and that a message be sent to the Senate to acquaint Their Honours therewith.


[Stage Direction]
Motion agreed to.

[Stage Direction]
A message from His Excellency the Governor General transmitting estimates for the year ending March 31, 1933, was presented by Hon. E. N. Rhodes (Minister of Finance), read by Mr. Speaker to the house, and referred to the committee of supply.

Questions

[Stage Direction]
Hon. T. G. MURPHY (Minister of the Interior) moved for leave to introduce Bill No. 13 relating to the submission to parliament of certain regulations and orders in council.
Mr. MACKENZIE KING:: Explain.


Mr. MURPHY:: The Dominion Lands Act of 1906 contained provision for the tabling of orders in council. When the act was revised in 1908 provision was included that these orders in council tabled should be approved by resolution by both houses. The Forest Reserves and Parks Act, which was passed in 1911, contained similar provision. Orders in council under these acts are valid only for one day after the session closes unless they have previously been approved by each house of parliament. For several years the orders in council, although tabled, were not con- ' firmed by resolution, and in 1928 action was taken by special act of parliament, chap. 44, Geo. V. 18-19, assented to 11th June, 1928, validating the orders in council passed up to that time. The present bill is to validate the orders in council passed between the 7th December, 1929, and the 31st January, 1931, which have been tabled in both houses.
Motion agreed to and bill read the first time.



CIVIL SERVICE ACT

[Stage Direction]
Mr. ONESIME GAGNON (Dorchester) moved for leave to introduce Bill No. 14 to amend the Civil Service Act (Vacancies, outside service).
Some hon. MEMBERS:: Explain.


Mr. ONESIME GAGNON (Dorchester) (Translation):: Mr. Speaker, the ball which
I am, to-day, introducing is a reprint of bill No. 132 which I had the privilege of introducing on July 20, last. I do not deem it necessary to repeat what I then stated and which will be found in last session's Hansard, Volume IV, page 3926, English version, and at page 3884, French version.
Motion agreed to and bill read the first time.



QUESTIONS

[Stage Direction]
(Questions answered orally are indicated by an asterisk).
41761-12i
^BRITISH POTATO EMBARGO

Mr. NEILL:: 1.	Has the government received the report of chief engineer, Mr. J. M. Wardle, of his inspection in the summer of 1030, of proposed sites for national parks on Vancouver island, British Columbia?
2.	Will the minister lay it on the table?


Mr. MURPHY:: 1.	A preliminary partial inspection of certain areas was made by the chief engineer of the Parks branch, Mr. J. M. Wardle, in the summer of 1930 merely for the purpose of advising the minister and to enable him to discuss the subject with the government.
2.	No.
Questions


CANADIAN PACIFIC RAILWAY-FINANCIAL ASSISTANCE
Mr. MITCHELL:: 1.	Has any financial assistance been rendered by government funds to the Canadian Pacific Railway during the last six months?
2.	If so, for what purpose and amounts?


Mr. RHODES:: 1.	None, apart from payments due in the ordinary course of business for services rendered, e.g., the carrying of mails and steamship subsidies as voted under the Department of Trade and Commerce, with the exception of $172,710 being amount paid under the Unemployment Relief Act, 1930, for interest on expenditures undertaken as relief measures in advance of corporate requirements, under agreement authorized by P.C. 2292 of September 30, 1930.
2.	Answered by No. 1.


ALFRED PEAT PLANT
Mr. BERTRAND:: 1.	Is the Dominion government still the owner of the peat fields and the machinery connected therewith, in the township of xiifred, Ontario?
2.	If so, does the government intend to work these peat fields in the near future?
3.	If the government is not the owner: (a) to whom were these peat fields and machinery transferred or sold; (b) What was the sale price, or on what conditions were they transferred?


Mr. GORDON:: 1.	Under agreement approved by order in council of July 21, 1931, (P.C. 1662) provision was made for the transfer of the Alfred peat plant to Peat Fuels, Limited, Montreal. Possession was taken by Peat Fuels, Limited on July 26, 1931.
2.	No.
3.	(a) Answered by No. 1.	(b) $8,000.


PERLEY BRIDGE
Mr. BERTRAND:: 1.	On what date was the work on the Farley & Grant contract, in connection with the Perley bridge, finished?
2.	What was the total amount paid to Farley & Grant on said contract?
3.	Have the contractors been paid in full?
4.	If so, on what date was the last payment made?


Mr. STEWART (Leeds):: 1.	November 6, 1931.
2.	$191,059.26.
3.	Yes.
4.	December 30, 1931.


LAKE ST. JOHN SETTLERS
Mr. DUGUAY:: 1.	Does the Dominion government contribute in the help given to the settlers of the county of Lake St. John, if so, in what proportion?
2.	Must the contribution be made in money or script?
3.	Do the settlers receive this money for work done on their land?
4.	Is the amount of money received by them deducted from the $60 bonus which was promised to them?


Mr. GORDON:: 1.	Under the agreement with the province of Quebec, under the Unemployment and Farm Relief Act, 1931, it is provided that the Dominion government shall pay to the province 50 per cent of the expenditures made by the province for direct relief in provincial territory where no municipalities are established and where suitable work cannot be provided for the unemployed.
2.	The regulations governing the administration of the Unemployment and Farm Relief Act, 1931, provide that "direct relief" means food, clothing, fuel and shelter, or payment in lieu thereof, but makes no reference as to whether payments shall be made in money or script.
3.	In addition to the provisions for direct relief as mentioned in answer to question No. 1 above, the Dominion government 'has agreed to contribute to works undertaken by the Department of Colonization of the province in the county of Lake St. John to the extent of $12,600 to which the Dominion government contributes $6,300. This work consists of ditching, grubbing, draining land, blasting, cutting and preparing lumber, building bridges. For the work referred to the regulations prescribe that the federal government requires that a maximum work day of eight hours shall prevail and that the provincial or municipal authorities may fix rates of wages to be paid provided that such rates be fair and reasonaible.
4.	The agreement between the province and the Dominion makes no references to any bonus to be paid to 'the settlers.


* CANADIAN NATIONAL RAILWAYS-STATISTICS
Mr. BLAIR:: 1.	How many employees have been dismissed from the Canadian National Railways during the past year?
2.	How many employees have had their hours or wages lessened during the last year?
3.	How many branches of the Canadian National Railways have been cut off during the last year ?

Questions
4.	What are the branches of the Canadian National Railways that have been cut off during the last year?
5.	What provisions have been made for those men that have been thrown out of employment when they were dismissed from the Canadian National Railways?


Richard Bedford Bennett: I think I am within the judgment of the house when I say that this is a question which cannot and should not be answered. The usual formula in cases of this kind reads somewhat as follows: The management of Canadian National Railways feel that it is not in the interest of the railway, nor in the general public interest, that information of this kind should be brought down. It is objectionable, also, in that it subjects the Canadian National management to inquiry which is not directed to the operation of privately-owned railways. In addition, it is information more properly subject to production before the select standing committee on railways and shipping, where the officers of the Tailway may make what representations they may deem necessary in the production of information as to operations. There is the further abjection that, at the present time, a royal commission is investigating the entire problem of transportation in Canada.


PREMIUM ON EXCHANGE
Mr. MACKENZIE (Vancouver):: 1.	What exchange premium is now being paid in United States money orders sent to Canada?
2.	Were exchange premiums paid at all times since the Canadian dollar went to a discount in the United States?
3.	What was the rate of such exchange premium in the months of September, October, November, and December, 1931, and January, 1932?
4.	What was the value of orders cashed in Canada and received from the United States during the last five months?


Mr. SAUVE:: 1.	Twelve per cent (12 per cent).
2.	No.
3.	No premium was paid in months of September, October, November and' December, 1931. Since 4th January, 1932, premium has been paid at rates varying from eighteen to ten per cent.
4.	$2,920,794.32.


UNEMPLOYMENT RELIEF-NEW BRUNSWICK
Mr. VENIOT:: How much money, if any, has been advanced to the government of New Brunswick: (a) to assist the government in meeting its share of unemployment relief and direct relief; (b) to assist the government in meeting loans maturing in the United States?


Mr. RHODES:: The answer is: (a) and (b), nil.


OLD AGE PENSIONS
Mr. WOODSWORTH:: How Boon will the federal government pay to the provincial governments, the additional percentage of the old age pension expenditures provided for under the legislation of last session?


Mr. GORDON:: No payments can be made on the 75 per cent basis as provided by the legislation of 1931 until such time as the necessary new agreements have been executed with the provinces. These are at present under negotiation.


KERROBERT, SASK., AGRICULTURAL SOCIETY
Mr. WOODSWORTH:: 1.	Did the agricultural society of Kerrobert, Saskatchewan, receive a grant of $1,500, or any other sum, during the last twelve months?
2.	If so, under what authority was such grant given?
3.	Is the Kerrobert agricultural society a class "C" society?
4.	Did any other class "C" society receive a grant?
5.	If so, what societies received such grant?


Mr. WEIR (Melfort):: 1.	Yes.
2.	Order in council P.C. 1722 of July 24, 1931.
3.	No fairs classified by this government as class "C".
4.	Answered by No. 3.
5.	Answered by No. 3.


PENSIONS, APPLICATIONS AND APPEALS
Mr. McGIBBON:: 1.	How many applications for pensions were before the pension tribunals one year ago?
2.	How many to-day?
3.	How many decisions were given:	(a)
favourably; (b) unfavourably?
4.	How many have been appealed, and how many appeals have been heard?
5.	How many of said appeals were favourable to applicant and how many were unfavourable?


Mr. MacLAREN:: The answer is:
1. 2,066.
2.	2,436.
3.	(a) 2,129; (b) 2,416.
4.	Appealed, 2,722; heard, 1,461.
5.	Favourable, 265; unfavourable, 1,046.


TECHNICAL EDUCATION-NEW BRUNSWICK
Peter John Veniot: If any correspondence has taken place between the government of New Brunswick and

Questions as Orders for Returns
the federal government with relation to aid for technical education, will copy of same be produced?


Wesley Ashton Gordon: It would seem that this
is not a specific question, but if the hon. gentleman will make it specific and is willing to allow the question to stand until to-morrow we shall be glad to give the information.


CLERK OP THE HOUSE
Mr. POULIOT:: 1.	When and on whose recommendation did Mr. Arthur Beauchesne become a civil servant and in what capacity?
2.	When and on whose recommendation was he appointed Assistant Clerk of the House of Commons?
3.	When, on whose recommendation and on the approval of whom was he appointed Clerk of the House of Commons?
4.	What was then his salary?
5.	Since then, did he get an increase in salary?
6.	If so, when, on whose recommendation and why did he get it and what was the amount of such increase in salary?
7.	Since Mr. Beauchesne has been appointed Clerk of the House, did he receive any sum of money besides his salary as Clerk of the House of Commons?
8.	If so, what was the amount of any such item and why and when and on whose authority was each one of said items paid to him?
9.	Who was Speaker of the House of Commons when the said Mr. Beauchesne was appointed Clerk of the House, when his salary was increased, if such is the case, and when other payments, if any, were made to him?


Pierre Édouard Blondin: As to questions numbered 23 to 41, both inclusive, with the exception of question No. 35, they were not submitted to me before being placed on the order paper. Had they been so submitted they would not have been put on the order paper. In my opinion they are improperly on the order paper and I direct that they be struck off. I have instructed the Clerk to furnish the hon. member who asks the questions with the information sought, and it is available to him. Information will always be furnished to any member concerning the conduct of the affairs of the house should it be desired. My authority for so ruling regarding such questions is May, who in his Parliamentary Practice at page 240 says:
No written or public notice of questions addressed to the Speaker is permissible.
These questions relate exclusively to matters within the department of the Speaker.
Further authority for my ruling will be found in Campion's Procedure of the House of Commons, pages 128 and 129, from which I quote:

A question should be directed to a minister officially responsible for the subject matter with which it deals. Without detracting from the generality of this rule, the following types of question are out of order on this ground, viz: - .... questions dealing with matters within the jurisdiction of the Speaker.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. TETREAULT:: 1.	How many married women are employed in the various government departments in Ottawa ?
2.	How many said women live with their husbands?
3.	How many said husbands are employed by the government?
4.	How many of said women are the sole support of their family?


INCOME TAX BRANCH, MONTREAL
Mr. TETREAULT:: 1.	How many persons are employed in the Income Tax Branch at Montreal?
2.	How many persons have been appointed since August 1, 1931?
3.	How many married men?
4.	How many married women?
5.	How many unmarried persons?
6.	How many of each nationality?


MINISTERS' PRIVATE SECRETARIES
Mr. POULIOT:: 1.	What is the number of private secretaries and assistant private secretaries to each minister, including the Solicitor General?
2.	What is the name and salary of each one and for what minister does each one work?



UNOPPOSED MOTIONS FOR PAPERS


Mr. DUFF:: For a copy of all letters, telegrams, correspondence and other documents passing between the Postmaster General, and/or any of his officials, and any person or persons in the province of Nova Scotia, with reference to an inquiry into the conduct of the postmaster at Lochaber, in the county of Antigonish, Nova Scotia, as well as a copy of the report and evidence, if any, submitted by the Commissioner, Mr. N. D. Murray, of Halifax, Nova Scotia, appointed by the federal government to inquire into the conduct of federal officials.



ARTHABASKA, QUE., POSTMASTERSHIP

Mr. MARCIL (for Mr. Girouard):: For a copy of the report made by Alfred Powell, commissioner, appointed to investigate charges of political partisanship, and on which the government acted to dismiss Albert Beauchesne, postmaster at Arthabaska, Quebec.

Motions jor Payers



ARTHABASKA, QUE., PREVENTIVE OFFICER

Charles Marcil: For a copy of the report made by Alfred Powell, commissioner, appointed to investigate charges of political partisanship, and on which the government acted to dismiss Albert Bergeron, preventive officer at Arthabaska, Quebec.



MOTIONS FOR PAPERS


[Stage Direction]
On the motion of Mr. Reid:
For a copy of all telegrams, letters, correspondence. and other documents, passing between the Department of Labour, any cabinet minister or any official and the Government of British Columbia, and any minister or official of that government, regarding all or any matters affecting or touching upon unemployment, direct relief or unemployment relief in the city of New Westminster and the municipalities of New Westminster, of Burnaby and Richmond.
Wesley Ashton Gordon: With reference to this
motion and the following motions in the hon. gentleman's name up to and including No. 6, while as I have already stated the statute does not contemplate this information being ready until fifteen days after the act becomes operative, yet in order to get the information into the hands of the hon. member earlier I have had the officials of the Labour department prepare a copy of the agreement with British Columbia, together with the orders in council passed having to do with the agreement, and I shall be very glad to table this part of the information. If there is any other information the hon. member desires with which we can supply him at an earlier date, if he will be good enough to let me know, I shall be glad to have that information tabled. In the meantime I presume the hon. member will agree to drop the notices from the order paper.


Pierre Édouard Blondin: Do I understand that
motions Nos. 1 to 6 are to be dropped? .


Wesley Ashton Gordon: Yes.


Mr. REID:: Yes, Mr. Speaker, with the
understanding that the information will be accorded to me.


Wesley Ashton Gordon: The information will be
accorded just as soon as we can prepare it.


Pierre Édouard Blondin: Notices of motion numbered 1 to 6 inclusive dropped.



SASKATCHEWAN ASSOCIATION OF RURAL MUNICIPALITIES

[Stage Direction]
On the motion of Mr. Vallance:
For a copy of all telegrams, letters, correspondence, petitions (not including signatures), memoranda and other documents passing between the secretary of the Saskatchewan Association of Rural Municipalities and the Dominion government or any department or cabinet minister thereof since August 1, 1931.
Richard Bedford Bennett: The resolution as prepared does not indicate the business to which the petitions or correspondence refer, but if, as I take it, the hon. gentleman refers to the petition that was delivered to the Minister of Finance by a representative of the Saskatchewan Association of Rural Municipalities, there will be no difficulty in providing him with a copy of that petition without the signatures.


Mr. VALLANCE:: If the Prime Minister
will read motion No. 18, I think he will realize the information I am seeking.


[Stage Direction]
Motion agreed to.

[Stage Direction]
On the motion of Mr. Pouliot:
For a copy of the last annual estimate prepared in accordance with Revised Statutes of Canada, 1927, chapter 145, section 17, by the Clerk of the House of Commons of the sums which will be probably required to be provided by parliament for the payment of the indemnity and the actual moving or transportation expenses of members, and of salaries, allowances and contingent expenses of the house, and of several officers and clerks thereof under his direction, during the fiscal year.
Pierre Édouard Blondin: I am of the opinion that the estimate as submitted under the statutes to the government is not a public document, and is not to be disclosed in the manner requested. I rule the motion out of order and that it be struck off the order paper.
Motion dropped.



HOUSE OF COMMONS-MEMBERS' STENOGRAPHERS STAFF

Mr. POULIOT:: For a copy of all recommendations signed by each member of parliament for any stenographer being employed on the members' stenographers staff this session.


Richard Bedford Bennett: Mr. Speaker, that cannot
possibly, I submit, be a proper matter for an order for return. The government must accept responsibility for any action involving, as in this instance, the expenditure of public

Unemployment Relief-Mr. Heaps
moneys. If the discretion is exercised improperly such may be the subject matter of an inquiry in the proper place. It does not seem to me however that a recommendation by an hon. member for the employment of a given individual constitutes a public document, within the terms of the rules of the house.


Jean-François Pouliot: This motion does not
indicate any reflection upon anyone.


Pierre Édouard Blondin: The objection taken by
the Prime Minister is sustained, and the motion is struck off the order paper.



UNEMPLOYMENT RELIEF


Mr. A. A. HEAPS (North Winnipeg) moved:: Whereas there are large and increasing numbers of our citizens at present unable to obtain employment and thereby the means of existence.
And whereas during recent years production has increased enormously.
And whereas real wages have not increased in proportion and thus consumption has not kept pace with production,
Be it resolved: that, in the opinion of this house, in order to absorb the unemployed into industry, thus eliminating the enormous waste of enforced idleness, the hours of labour be materially reduced and the purchasing power of the masses increased, and further to this end, that the government be requested to submit the necessary measures to the house.
He said: Mr. Speaker, I have no doubt that during the course of the present session there will be submitted to this house legislation of a very important character. We will have before us matters concerning the railway situation and probably the great waterways of Canada, but to my mind there is at the present time no question of such vast importance to the people of this dominion as is that of unemployment. The other matters referred to sink into insignificance when compared with this great problem, this great tragedy, which is now stalking throughout the length and breadth of the Dominion of Canada. In my opinion it is time this parliament tackled most earnestly the problem of unemployment. So far there has been no inkling or no indication whatsoever as to what steps the government may take to meet existing conditions.
In 1930 the matter of unemployment became a vital issue in this house, and many times during the session the problem was 
discussed. At that time the party in opposition accepted the challenge, if they were returned to power, to deal with unemployment, and having accepted the challenge the electors of the Dominion of Canada sent them back to this house with a very large majority. The party now in power will ultimately be judged by its action in this connection. In 1930 when the Liberal party went to the country unemployment was a vital factor, and I do not think I am exaggerating in the slightest degree when I say it was one of the chief contributing factors in putting them where they are at the present time. If the Conservative party accepted the challenge in 1930-and I give them credit for having done so-I do not think I am asking for more than my just rights when in 1932 I ask them what they are going to do about this great problem of unemployment.
I realize fully the attempts they have made to deal with the matter; I realize that they have jacked up the tariff as high as possible; to a very large extent they have spent public moneys to provide public works; they have been giving relief on a vast scale to thousands and thousands of Canadians throughout the length and breadth of the dominion. On the one hand we find they have been giving concessions or doles to the manufacturers and on the other hand they have been giving doles to the people who are being deprived of the opportunity to work. I want to say, Mr. Speaker, that doles, whether they be given to those at the top or those at the bottom, are not going to solve the problem of unemployment.
During the past year or so the problem has become considerably aggravated, and instead of conditions improving the opposite has been the case. For the last eighteen months the Conservative party has been in power, and those who are in close touch with the situation will realize the conditions existing to-day in many of our large industrial centres; at this time I shall not discuss what is happening in our rural areas. May I quote to hon. members just a few figures concerning the cities of Winnipeg and Montreal. On January 20 last, just a few brief weeks ago, in the city of Winnipeg there were 5,079 married men, heads of families, who were in receipt of public relief. At the same time there were 5,388 single men and 493 single women receiving similar aid. The best figure I have been able to obtain from authoritative sources in regard to the city of Winnipeg indicates that at the present time there are 20,000 men and women out of work.

Unemployment Relief-Mr. Heaps
This figure, may I add, does not include very large numbers of people who are at present engaged on relief work. If these people were taken into consideration the figure I have already given would be greatly increased.
Yesterday while in the city of Montreal I heard an alderman of that city discuss their unemployment situation. He stated that for a long time very little had been done to relieve conditions, and very little in the way of obtaining accurate data was being attempted. The situation became so acute that they decided to take a registration, and within a period of ten days over 19,000 heads of families registered as being willing to work with pick and shovel for approximately forty cents per hour. This figure does not include single men and thousands of others who would have registered had there been any prospects of employment for them. If we accept those figures as correct-and there is no doubt they are-then it means that there are in some of our large industrial centres from one-quarter to one-third of the workers actually either on relief or demanding measures to take care of them.
Undoubtedly we will be told that in Canada we are suffering from world conditions. I have no doubt that to a certain extent conditions prevailing in certain other parts of the world are reflected in Canada, but we as a Labour party are not going to accept the excuse that because there are bad conditions throughout the world the same are bound to exist here. If we in this dominion were short of the essentials or necessities of life I could quite understand there being some excuse on the part of the powers that be for the prevailing conditions. But we are not suffering from any famine condition, any shortage of the necessities of life; we are suffering, if anything, from a "famine of plenty."
Now, so far this session the only indication we have had of what .the government propose to do to deal with the problem is the announcement made by the Prime Minister a few days ago that the salaries of civil servants would be reduced by 10 per cent. I want to take this first opportunity of protesting on the floor of the house against this action. I would not have objected so much if the government had accepted the cost of living figures as submitted by the Department of Labour or the Bureau of Statistics, and then decided to make some minor reduction in the salaries of those in the civil service receiving the higher scales of pay; but the government simply announce that all civil servants wil-l have to submit to a reduction of 10 per cent in their salaries. [DOT]
I suppose this is one of the remedies the government are taking to cope with the present situation. Well, as representing a labour constituency and the ideals and aspirations of labour in parliament, I desire to contrast that action with another action the government took only a few short weeks ago. The government wanted money, and naturally they had to go to the capitalists to obtain it. What did they do? Did they say to our financiers: "You have got to accept a lower rate of interest for the money that we want you to loan to the government"? Oh, no. They went to our moneyed people and said: "If you will let us have your money we will give you a higher rate of interest than you have ever had in the history of this dominion." Had the government insisted on a lower rate of interest, the saving to the country would have been sufficient to have rendered unnecessary the 10 per cent salary reduction. In other words, the government are reducing the salaries of the workers in order that they may pay increased interest to the wealthy people of the dominion. In my view, this shows a complete lack of knowledge as to what the great masses of the people are thinking at the present time.
I propose to give a few figures as to interest charges, because they undoubtedly have a certain vital bearing upon the whole question of national economics. I am bringing these figures to the attention of the house because apparently so far the only government policy for dealing with the situation is the policy of "rigid economy", and I want to show where that policy might be applied. In 1914, prior to the war, the total fixed interest charges of the dominion were $12,893,505; the total revenue receipts were $163,174,000. In other words, our interest charges were a little over 8i peT cent of our total revenue receipts. But in 1931 those respective figures had increased to $121,289,844 and $356,209,358; that is, our percentage of interest charges to receipts had gone up from 8-6 to 32 per cent. Putting it another way, while our revenue had increased about 150 per cent, our interest charges had increased over 1,000 per cent. I submit that if the government were determined upon a policy of rigid economy that is where the saving might have been started.
The test part of my motion reads as follows:
That, in the opinion of this house, in order to absorb the unemployed into industry, thus eliminating the enormous waste of enforced idleness, the hours of labour be materially reduced and the purchasing power of the masses increased

With the vast number of people that we have out of work, I think the first question I
186	COMMONS
Unemployment Relief-Mr. Heaps
ought to submit to this house is:	How are
those people going to be absorbed into industry? The fact is that to-day they cannot be so absorbed, otherwise they would be working. That being so, I think I ought to submit to the house some concrete proposals as to the measures that should be taken to that end. It has been stated, and I think, correctly so, that there is only one cure for unemployment, that is to provide work. If to-day the panaceas offered to parliament for the cure of unemployment have proven ineffective, then I think it is only right and proper that we should turn to other measures for dealing with this very serious problem.
During the past few years production in Canada has increased by leaps and bounds. I do not think there is any doubt about that, and I do not think it is necessary for me to quote statistics in support of my statement. It will be sufficient for my purpose to state that according to the figures submitted by the Bureau of Statistics, during the period from 1917 to 1929 there was an increase in production of over 70 per cent. During approximately the same period, between 1917 and 1928, real wages, that is, wages as measured in terms of purchasing power, have increased by 16-4 per cent. In other words, productivity has increased beyond all proportion to the increase in wages. So long as we have this tremendous spread between the wages received and the value produced, I submit there is no hope of solving the problem of unemployment. During that same period of about eleven years, according to the Bureau of Statistics, the number of wage earners in Canada increased from 552,968 to 566,780-an increase of only 13,812; or to put it another way, individual production increased by an enormous ratio, while wages increased by a very small ratio. In 1928 the average amount of production per person employed in industry in Canada was $5,729; in other words, every man and woman in the dominion working in industry produced this value in commodities; but the amount received back in the form of wages was only $1,024 per person. This figure, however, does not tell the whole story in regard to labour costs; I think there should be other items added to the $1,024, because I am confident there are some missing. But at the same time there is another aspect of this question that in my opinion will compensate for any omissions from $1,024, because it should be borne in mind that the figure of $5,729 as the amount produced by every person working in industry represents the value of the goods when they leave the gates of the manufac-

turers. By the time those goods reach the consumer their price perhaps has doubled, so if there is anything lacking in the computation of labour costs probably it would be compensated for by the increase in price of the commodities which the worker has to buy back from the retail stores.
From this it will be seen, Mr. Speaker, that those who come in between the man who produces and the consumer are taking far too large a toll of the goods or the wealth of this country. We in the Labour party claim, as I believe many of those belonging to other groups in this house also claim, that unless that spread is decreased there is no hope of dealing with the problems of poverty and unemployment with which we are now faced.
If we are to deal with this question at all I think first we must see that the people have access to the commodities which they produce. At the present time they have not that access, because in the first place they have not the purchasing power, and they have not that purchasing power because they do not receive sufficient in the form of wages. So we claim that one thing we must do is see that the people get more in the form of wages than they receive at the present time. But, as I said a moment ago, if we are to absorb more people into industry, how can that be accomplished? To-day we can produce far more rapidly than we are allowed to consume, and in fact I believe I am correct when I say that we can produce far more rapidly than we could consume even if we were allowed to consume a reasonable amount. If that is the case there is no problem of production; we have more or less solved that problem. So it comes down to a question of distribution, and I think the problem facing parliament at present is how to bring about a more equitable distribution of the wealth produced.
If we are to absorb more people into industry I think that can only be done in one way. There is no use talking of markets in other parts of the world; every other country is attempting to find those markets, and all the nations of the world cannot be on an export basis. So if we are to provide work for all those who want work I think that can be done only by reducing the hours of labour so that more people may be employed, and a matter of this kind can be dealt with only through the federal parliament; it cannot be done by provincial legislation. That is why I am asking the federal government to take the initiative in legislation of that nature.

Unemployment Relief-Mr. Heaps
Then we come to the question of the distribution of the commodities and the wealth produced. I submit that this question of distribution can be solved only in part by increasing the purchasing power of the masses of the people, and that can be brought about only by giving those who are performing useful service a greater return in the form of real wages than they are receiving at the present time. The figures I have submitted to the house show that at present approximately one-fifth of the value of an article is paid to the persons engaged in its production in the form of wages, and perhaps if other charges are taken into consideration that proportion might increase to one-quarter. The man engaged in industry can repurchase only one-quarter of the commodities which he produces, and the rest must wait until an export market is found or until it is consumed in one way or another.
I believe an increasing number of people favour the idea of shorter hours. This is not prevalent only among those who belong to the Labour -party; we find that opinion held by many belonging to other parties, and I was very much interested a short time ago in the statement of a gentleman who is well known to members of this house. Speaking in Toronto he said:
Unless inventive genius can devise new services or industries to absorb the present machine created surplus of workers, the nations of the world must unite in a pact to reduce *working hours. . . .
That statement was made by the present leader of the Senate, and I am wondering whether the leader of the Conservative party in this house will accept that dictum. I thought the leader of the Senate was getting to the stage where he might soon join the Labour party, but when I learned that he had been made leader of the Senate I felt that my party had lost a possible recruit.
I think I have quoted enough figures to show that at present too large a proportion is going to sources that neither toil nor spin, I find, Mr. Speaker, that during 1931 the amount paid in the Dominion of Canada in the form of dividends totalled a large sum. The year 1931 was disastrous for millions of people in Canada; in that year hundreds of thousands of our fellow-Ganadians lived on relief; farmers were on the verge of poverty, unable to meet their obligations; thousands of workers in our cities were going to relief offices in the hope of being able -to obtain something in the way of -assistance. But wha-t do we find? In 1929 the total amount paid in dividends, according to the Montreal Star of December 16, 1931, was $215,097,291, while
in the -poor year of 1931 the amount paid in dividends and profits was $210,221,919, or a difference of approximately $5,000,000.
From this I -think it must be obvious that to-day profits are levying too great a toll upon industry, and it must be apparent that instead of going to the few these profits should go to the many. It may be asked how this is to be -brought about, and I must say frankly that in my opinion the only way to make the changes I have briefly enumerated this afternoon is to bring in state regulation to a greater extent than is the case at present.
I know some hon. members Shudder at the idea of state regulation, but there is no need to be afraid of the term. To-day the state interferes in practically everything we do. Every time there is a tariff change in this house it means some form of state interference with business, and if we can interfere with business for the purpose of putting it on a stable foundation I think in these times there is no reason why we should not interfere in order to put the living conditions of the masses of the people on a firm foundation as well.
When I bring this question to the attention of parliament my mind goes back to the scenes I witnessed in my own city of Winnipeg a few weeks ago before I left for Ottawa. There I saw thousands of single men being fed. They were trooping into buildings and warehouses where hundreds at a time sat down to a rather skimpy meal which they received from the city through the fund provided for the purpose by the three public authorities. There they sat down, and amongst those men we can find some of the flower of our manhood. These men, when wanted during the year 1914, became the nation's heroes, and in 1932 they have become the nation's hoboes. They come from all walks of -life: you will find among them the ordinary labourer as well as mechanics skilled and unskilled, yes, and even lawyers and doctors, all receiving relief. When in the city of Winnipeg at the present time between one-quarter and one-third of the population are in receipt of some form of public assistance, I ask this House of Commons : How long can a condition of that kind continue? Here we have come to parliament and so far we find not a word said about this serious problem of unemployment. I know it is still early in the session, but not a thing has been foreshadowed to meet the situation. The workers, the great masses of the people in the country, are to-day looking to parliament to do something to deal in a fundamental way with this great and very important problem.
1S8	COMMONS
Unemployment Relief-Mr. Gershaw
Right at this moment while this matter is being discussed in the House of Commons there are doubtless hundreds of thousands of workers, affected by the problem, who are wondering what steps the government will take to cope with the situation. I trust this afternoon that the government will take the present opportunity to tell the house and the country what they have in mind in this regard. When we realize that to-day in our midst there are hundreds of thousands who month after month have been living on some form of dole we can well believe that the people are looking to parliament to give them a lead. They want some assurance. These people are being driven deeper and deeper into the mire, with the result that they are beginning to lose their manhood and womanhood, to-day we ought to give them a message not merely of hope and encouragement but of something practical in the way of an assurance that the government and parliament are going to tackle in a real and earnest manner this greatest of all problems that we have had to face.


Mr. F. W. GERSHAW (Medicine Hat):: 1 will not take up the time of the house trying to make it clear that there is a great unemployment problem in Canada to-day. The question of the reduction of working hours is a very old one, but to-day, owing to changed economic conditions, it must be viewed in rather a new light. In past years, before factories reached their present state of productive efficiency, the effect of overstrain, through long hours, upon the health of the individual and the question as to how the hours of leisure would be spent were all important. These problems have been largely dealt with and to-day the whole subject must be approached from the point of view of trying to some extent to solve the great problem of unemployment which is so much in evidence.
Stephen Leacock said in 1921 that the power of workers to produce had increased fortyfold in the past 150 years. Since that time inventors have developed many other laboursaving devices:	We have combines displacing labour in the harvest field; we have powerful engines pulling long freight trains and so displacing the number of crews previously employed; and we have in the factory labour-saving devices through the operation of which only a small fraction of the number of men previously employed can now obtain work. It has happened before, when this problem became serious, that a war or something of that kind would occur and thousands

of men were absorbed into armies, navies and other services. We do hope that such a thing will not be needed to relieve the present situation; we hope that instead of more armaments we shall have less as time goes on. In the past also more work has been available during periods of construction when branch railways were being built to open up new territories, and when building materials to construct homes, stores and elevators were required, and when there was at least a temporary market for machinery and requisite material of every kind. Then much work was available.
We heard a few days ago about one country that is trying a new experiment and we find that there they have no unemployment problem, probably because they are going through a period of construction. But in our country our plant has already been overbuilt; production has probably been overdone, and we find that thousands of men are laid off. This seems to work in a vicious circle. Men are laid off; there is no purchasing power; factories cannot sell their products, and more men are laid off. And so the vicious circle goes round and round. We also have boys and girls who are growing up in the country and there is little prospect of their obtaining work under present conditions. Can anything be more unfortunate than to see an aged, infirm man having to go out and work with pick and shovel while some of his grownup boys, unmarried, are out of work and unable to give him any help. During recent years hours of labour have been shortened. The figures show that from 1913 to 1926 hours of labour dropped 20 per cent and it was predicted at that time that disaster would follow. But that prediction has not been justified. Shorter hours of labour, it is true, would increase factory costs, but can that be avoided? Has not the cost of unemployment to be met in any case? If, therefore, factory costs might be slightly increased it would probably in the end result in a saving to the taxpayers of Canada.
I am in favour of this resolution. I believe it would work in the interests of the Canadian people. It would make for contentment because it would give a wider distribution of the available amount of work and a wider distribution of the wealth available in the country; and if the economic interests of the few clash with the wellbeing of the many, then surely the latter must have the preference. I believe that by shortening the hours of work some progress would be made in solving the great unemployment problem.

Unemployment Relief-Mr. MacNicol


Mr. J. R. MacNICOL (Toronto Northwest) :: I desire to pass a few comments on
this resolution but I hope that the mover (Mr. Heaps) will not gather from anything that I say that I contemplate associating myself with the Labour party. The remarks I make I make from the point of view of one who has been inside the walls of industry for approximately a quarter of a century, looking out on the world from that aspect, not looking in through the windows and telling those inside what to do and the men in there how they are to conduct themselves. I propose to confine myself largely to the resolution.
In connection with production, if we take the index in Canada as of 1913-and I believe they use 1913 in both Canada and the United States as the basis of their index figures- but if we bring the index figure down to 1926 and accept 100 as the index for that year, we find that production in Canada advanced from 1926 to the peak in January, 1929, when it reached 43 points higher than normal, or the index rose to 143. From 1929 to December, 1931, the index lowered and lowered as far as productivity in Canada is concerned, until in December, 1931, it stood at 82. Therefore the statement in the resolution as far as increased production is concerned, must refer to 1929, the high-water mark, because since that time, as I have said, there has been a consistent contraction of business.
With reference to wages, if we take the real wages also as of the period of 1926, what do we find? Using the figures which have been assembled by the Department of Labour in Canada-I do not know whether they are issued yet-we shall first take actual wages as of 1926 at 100, the cost of living at 100, and real wages at 100. There is a wide distinction between real wages and actual wages. Real wages means the amount that can be purchased by the actual money received in proportion to the prices of the commodities. In 1931, actual wages had risen from the index of 100 in 1926, to 106. The cost of living on the other hand, starting with 100 as the index in 1926, had decreased until in December, 1931, it stood at 89, or eleven points below normal. Actual wages, as I said a moment ago, stood in December, 1931, at six points above normal, if we assume 1926 as normal. Real wages figured on that basis in December, 1931, stood at 119. I merely leave those figures with the members, and I shall pass on to the next item.
The resolution refers to the reduction in the hours of labour. At the present time many thousands of men and women are out of work, and we cannot reduce their hours
of labour. Many more thousands are working on part time, and their hours of labour should not be reduced. Even those who are working full time are compelled to make voluntary contributions from their incomes and this is equivalent to shortening their hours also. The application of the principle of shorter hours is not new. It commenced in 1840 when President Van Buren of the United States adopted the ten-hour day principle for all government services in that republic. The next move was in 1879 by the state legislature of Massachusetts when it adopted regulations pertaining to the hours of labour of women and shortened the period of work for women. Then in 1886 the movement commenced in Canada to have shorter hours of work; thus from 1840 to 1886 the period of hours of work was reduced. I am not a prophet, but I do not hesitate to say that in the future the hours of labour will be reduced still further than they are to-day.
There has been a tremendous advance in production. The leaders of industry and likewise the leaders of the different labour organizations have taken careful note of that. How could there be anything but an advance in industry when we consider there has been a tremendous advance in chemistry, physics and the science of mathematics? If we take into consideration the application to industry of the advances in those educational fields, naturally production did increase and by 1929 the productivity of the plants in America exceeded the productivity in 1919 by approximately fifty per cent. That is, the productivity of every man engaged in industry in 1929, owing to the improvement in the machines in the industry in which he worked, and applying this generally to industries, increased fifty per cent.
The very fact that machines have improved so that the productivity has increased, has resulted in numerous surveys, at all times encouraged by those engaged in industry, both the employers and the workmen. The first survey was made in 1908 by the National Industrial Congress Board of New York. They endeavoured to ascertain if the number of days per week for work had been reduced in a number of United States plants, and they found in 1908 that eight plants in that country had reduced the work per week from six to five days. In 1931, last year, the United States Labour department made a much wider and more extended investigation. Their questionnaire covered 37,587 companies and they ascertained that those companies employed approximately 4,000,000 men or women as the case might be. They learned in reply
190	COMMONS
Unemployment Relief-Mr. MacNicol
to the questionnaire that 892 of those companies had adopted the five-day week as a permanent principle in their plants. If we apply the percentage to the numbers engaged, we find that approximately 225,000 of the
4,000,000 were permanently on the five-day week.
Later on, just last year, I believe, the Industrial Standards Board of New York sent out a questionnaire to 2,000 firms in the United States. This questionnaire was replied to by 266 firms. The questions were:
1.	Are you in favour of a shorter week?
2.	Are you in favour of fewer hours per day?
In reply to the first question, "Are you in favour of a shorter work week?" fifty-three per cent of the firms replied no, and forty-six per cent firms replied yes. I am leaving out the decimals. In reply to the second question, "Are you in favour of fewer hours per day?" Thirty-six per cent of the firms replied yes, and sixty-three per cent of the firms replied no.
The experience of the Kellogg Company of Battle Creek, Michigan, I believe will be of interest in this connection. The Kellogg Company in December, 1930, went on a shorter shift schedule. They operate twenty-four hours per day and they divided the work into four shifts of six hours each. That resulted in their adding to their staff three hundred more operators. I should just like to quote a few sentences from what they say as to the results as printed in the October issue of Factory and Industrial Management. These were the advantages for the employees: More leisure time for recreation.
Opportunity to cultivate gardens.
Time to pursue educational courses.
Increased incentive to prepare for managerial jobs.
Less fatigue, resulting in a more healthy, ambitious, alert and aggressive working force.
Opportunity for mothers who must support children to earn a living and yet have ample time at home to care for their families.
Less waste time, due to concentration of work in a single period.
Decreased cost of living-all meals at home.
Now as to the company itself. The advantages according to this article have been as follows:
Increased daily production from the plants as an operating unit, due to increased production at every station or task, slight in itself, but considerable in the aggregate.
Elimination of meal periods, with their waste and the expense of a large cafeteria.
As most hon. gentlemen know, nearly all the larger industries maintain cafeterias which supply meals for their employees. I continue to quote:

Increased return from the capital invested in plant and machinery, owing to the increased rate of plant operation.
Decreased overhead due to the fact that the factory produces more packages of cereals per dollar of overhead than under the eight-hour shifts.
I should also like to quote from a book published by the National Industrial Conference Board, New York, entitled The Five-Day Week in Manufacturing Industries. A very close study was made of this question of the shorter working week in the state of New York, and I should like to quote a few sentences from the conclusions of these investigators. They say:
The conclusion that any or all industrial establishments could advantageously adopt the five-day week schedule does not follow from the evidence offered in its favour by a majority of the companies that are qualified from experience to appraise its advantages and drawbacks. This evidence does, however, remove the five-day week from the status of a radical and impractical administrative experiment.
Whether or not the application of the five-day week will be extended to industry generally, and whether such extension would be economically sound and socially desirable, are questions that lie in the field of conjecture and opinion and are outside the scope of this study.
In the end, the question of the length and arrangement of the working week is likely to be settled, not on the basis of theoretical principles, but by the practical experience of employers and workers, individually and in groups.
In this connection I would say that there are many lines of industry which cannot perhaps have a shorter working week, either shorter hours per day or fewer days per week. On the other hand I am told that in certain industries men are working seven days per week. So far as I am concerned, I would like to see that practice entirely eliminated if at all possible. I do not think anyone should work seven days a week if it can be avoided.
Next, if industry is to progress it is bound to take advantage of the benefits of invention, particularly along the lines to which I referred some moments ago in connection with chemistry, mathematics, physics and so forth, and of course these inventions may increase the difficulty in connection with employment.
I for one am convinced that a study such as is suggested in the resolution is worth while, and I was pleased to see the motion on the order paper because it directs public attention to the matter. While I do not think that anything can be done now, perhaps when the depression lifts and we get into good times again and industry bounds along, regulations may be made which will prove advantageous.
I am convinced that it will never do to allow

Unemployment Relief-Mr. Maclnnis
machinery to develop and continue to displace labour to a greater extent than it does to-day without some provision being made for the future. It will never do to deny to men the opportunity to work through machinery displacing labour. I can remember well When I was a boy many I knew worked twelve hours per day in industry. I have seen in my time the number of working hours per day reduced from twelve to ten, and from ten to nine. I believe that Canada along with other signatories to the Treaty of Versailles has agreed to place in operation at the earliest convenient time the eight-hour day. So there is no reason to think that a shorter working day will not come. Whether the time is ripe now, I do not know. Whether it is economically sound at the present time,
I cannot say. I rise merely to give my support to whatever will increase the demand for the services of workingmen, whatever will increase the opportunity for men to serve and increase the numbers that may be employed. The subject of employment in industry has been one of profound interest to me for many, many years, and I am happy at all times to do what I can in any way I can to provide men with the opportunity to work. If, when times get better, it is found necessary to reduce the hours of work and if such action increases the opportunity to serve, I think I will be in a position to advocate along that line.	[DOT]


Charles Marcil: May I ask the hon. member if the same wages were paid for five days' work as for six?


John Ritchie MacNicol: I am pleased the hon.
member has asked the question. In Canada so far as I know at the present time no firms are operating on a five-day week basis. The Goodyear Tire and Rubber Company of Canada, Limited, operating in Toronto is on a six-hour shift, four shifts per day. The Kellogg Company, to which I referred, operating on a six-hour shift, raised the wages of the men in the plant 33 1-3 per cent thereby making the wages from the six-hour day equivalent to those from the eight-hour day. In that plant the wages of the office staff were raised only 12| per cent because that staff was receiving higher salaries. I read a moment ago from Factory and Industrial Management in connection with the Kellogg Company. They were satisfied that even operating on the six-hour day costs were cut down and the production was as great.


Mr. ANGUS MacINNIS (Vancouver South):: Mr. Speaker, rising to second the
resolution of the hon. member for North
Winnipeg (Mr. Heaps) I wish to say I am pleased the resolution has come before the house so early in the session. During the session of last year hon. members in this corner of the house made every effort to promote a discussion of the unemployment situation throughout this dominion, and to have something done early in the session so that every opportunity would be given for discussion. However, we failed in that, and not until the closing day of the session was anything said concerning unemployment or remedies proposed by the government in regard thereto.
As the mover of the resolution has pointed out, in 1930 unemployment became a matter of national importance and an issue in the election of that year. I took the position at that time that the government of the day was not responsible for the prevailing economic conditions, and took the further position that the government which would succeed them, if there were a change, would not be able to deal effectively with unemployment because our economic system, as everyone knows who has given it any thought, is not carried out according to plan. It runs here and there where it will, according to the time and circumstances in which it finds itself, and for that reason I realize that the present government, regardless of their pre-election promises, cannot effectively deal with the problem. They made the promises, however, in 1930 and at the special session, with a great deal of confidence, they sought to work out a remedy. In the session of 1931 however they realized that their efforts were not going to be effective, and although they tried to do something further they began to draw attention to the fact that hon. members on this side of the house were not making any constructive suggestions toward a solution. What a constructive suggestion is or means depends on the definition of the term. If they mean a suggestion which would cure unemployment and improve industrial and social relations as between the various classes in this country, we say we cannot make such constructive suggestions because unemployment arises out of the relations existing between the different classes in Canada.
However I pointed out about a week after the session opened last year that one of the few ways in which the government could deal with unemployment was to reduce the hours of work and increase the wages of workers in industry. Unfortunately however that suggestion was not accepted; undoubtedly the government considered it was not constructive and, in the same manner, they may feel that

Unemployment Relie]-Mr. Maclnnis
the present resolution is of the same nature. Several points are made in the resolution now before us. First, there is the statement, in effect, that the condition of unemployment is becoming worse. I quote from the resolution as follows:
Whereas there are large and increasing numbers of our citizens at present unable to obtain employment and thereby the means of existence.
I do not think anyone denies that statement. If we turn to the Labour Gazette of January, 1932, however we will find therein ample proof of the statement made in this resolution. On page 56 I find the following: The curtailment in industrial activity, which first appeared towards the latter part of 1929 and continued throughout 1930, became more pronounced during the year just passed, with the result that employment in Canada was generally at a lower level during 1931 than in any other year since 1926.
Then, if we turn to page 57 we find a
chart describing the state of employment in Canada from the year 1921 to 1931, indicating that the peak of employment was reached about the middle of the year 1929. At that time, comparing with the figure 100 which is given for the year 1926, the peak is indicated at 127-8. From that time to the end of 1931, when the index figure is 98, we find a continuous decline in employment. When I say, "continuous" may I add that the term is interpreted in only one way, because there was an up trend in 1930 and a lesser up trend in 1931. Taking the main curve however there is shown to be a continuous decline since the middle of 1929. If we take the index figures of employment supplied to the Bureau of Statistics by the various employers in the dominion, taking the year 1926 as the average of 100, in 1930 the index reached its maximum of 118-9 on July 1, while the highest point reached in 1929 was 127-8 at the beginning of August. During the year under review the index averaged 102-5, compared with the average for the preceding years, 1930, of 113-4, and 119 for 1929. The report continues:
In connection with these indexes it might be mentioned that the present depression has been characterized by a very general movement to retain in so far as possible the usual working force by reducing the hours worked.
The earnings of the persons included in the monthly reports of employment, if available, would, in this way, probably show in many cases a greater decline than the numbers oil the payrolls.
So even accepting these figures, if we take into consideration that many are working on short time, purchasing power as represented by wages has declined much more than would be suggested by the figures given in the indexes.

The preamble of the resolution reads:
And whereas during recent years production has increased enormously.
The mover of the resolution gave ample proof of that recital, and I think it was substantiated by the member for Toronto Northwest (Mr. MacNicol) who preceded me. But perhaps a few further figures along the same lines would not be amiss. In a report made to the international conference of the International Labour Office in May, 1930, there is contained a report from the director, Mr. Albert Thomas, on unemployment and its causes, its extent, and so on. In a lengthy review of the various causes for unemployment, the final point-the ninth point discussed in making out the report was:
9. The disorganization of the labour market caused by the extra-rapid development of labour-saving machinery and of the process of rationalization.
He contended that an inquiry carried out in the United States into the output of workers per working hour showed that this output had increased in 1927 as compared with 1914 as follows:
In slaughterhouses and preserving factories, by 26 per cent.
Cane sugar refining works, by 33 per cent.
Paper factories, by 40 per cent.
Tanneries, by 41 per cent.
Steel works and rolling mills, by 46 per cent.
Cement works, by 54 per cent.
Mills, by 59 per cent.
Petroleum refining works, by 82 per cent.
Blast furnaces, by 103 per cent.
Automobile factories, by 178 per cent.
Tire factories, by 292 per cent.
These figures show a very substantial increase in production per worker in the United States. What is true of that country is largely true of this dominion.
The value of production per individual also increased. In the Monthly Labour Review of the United States for December, 1930, in the period between 1919 and 1929 the value of production per individual worker in the manufacturing industries of the United States increased from 220-5 to 256-2, or 16 per cent. During the same period the index of prices fell by 30 per cent. This means that the actual output really increased by nearly 50 per cent.
Not only has.that increase taken place in industry, but in recent years there has been a similar increase in agriculture. The effects of mechanization were not felt in agriculture . until within comparatively recent years, but now the effect of machinery is apparent. The deputy director of the International Labour

Unemployment Relief-Mr. Maclnnis
Office, Mr. H. B. Butler, reporting on the increased use of agricultural machinery in the United States said:	'
To take one single case: the combine (reaper-thresher) wherever adopted deprives five agricultural workers of employment. And the use of these machines has made immense strides in some countries: in Kansas, for example, there were 14 in 1918, 20,000 in 1928 and 25,000 in 1929, while the figures for Canada are 2 in 1922, 18 in 1925, 4,341 in 1928 and 7,215 in 1929.
A rather peculiar thing in this connection is that while a great number of people were deploring the trend of population from the country to the cities, agricultural production was increasing so fast that it could not be disposed of. In the Canadian Congress Journal for May, 1931, there is an article by Mr. Andrew Stewart, of the University of Manitoba. This article won the prize offered by the Royal Bank of Canada for the best paper on the economy of machine production in agriculture. Mr. Stewart states:
A tractor operator with a five-bottom 14" plough can turn more land in one hour than the same man with a walking plough could cover in a day. Ten days of one man's time are required with a one-horse outfit to cultivate the same acreage that the four-row outfit can cultivate in one day. In 1930, with hand production methods. 32 hours of man labour were required to produce 10 bushels of wheat. In Montana an acre of 'land has been summer-fallowed and a crop of wheat removed the following year with 2-5 hours of man labour. . .
This reduction in labour has resulted in a larger acreage operated per worker. Since 1850 the average acres of improved land per worker in the United States has increased steadily from 30 acres to 49 acres in 1925, and the figures for Canada show that between 1881 and 1891, acres of farm land per worker increased 95 per cent, improved land per worker 105 per cent and crop acres per worker 109 per cent.


Mr. YOUNG:: If, as my hon. friend says, the combined reaper harvester enables one man to do the work of five, what reduction would be necessary in the hours of labour of harvesters in order to keep those five men employed in the field?
Mr. MaeINNIS: The hon. member for VVeybum (Mr. Young), representing a country district, perhaps would be better able than I to answer that question. I have not gone into the matter sufficiently to say, but I think I have plainly shown that with present unemployment conditions among the people of Canada, the farmers and the workers, as primary producers, have not received any benefit from the great increase in productive machinery in this country. As a matter of fact we are worse off than we were when production was carried on in a much more primitive way, because at present we are altogether divorced
from a means of livelihood, while in former days we were close to the means of getting a living.
Of course, as the hon. member for Toronto Northwest pointed out, the question of shorter hours is nothing new, but at this time, with unemployment being felt so severely, the matter is being discussed in many places. Last year the question was brought up in the Ontario legislature by Mr. S. C. Tweed, member of the provincial house for North Waterloo. In bringing forward the question Mr. Tweed said:
If we are to depend for a return to prosperity upon an increase in the price of wheat we may have to wait a 'long time. There is no lack of buying power, rather there is concentration of buying power in too few hands.
That is the position we take in bringing forward this resolution. We consider that there is sufficient wealth produced in the country, and all that we need is some means of distributing that wealth. That can be done only through an increase in the purchasing power of -those engaged in industry. In my own province of British Columbia the question was brought forward by Colonel Nelson Spencer, a member of the government party in that province. Mr. Spencer is a lumber operator; he employs a great many men, and he has come to the conclusion that there is no way out of our present difficulties except by Shortening the hours of labour without a corresponding reduction in pay. In that connection I believe he was instrumental in having a resolution passed asking the Dominion government to call a conference of the provincial legislatures in order to discuss this problem.
I wish to point out these facts because undoubtedly if the government speak at all on this matter they will take the stand that they have no jurisdiction over hours of labour. The question of unemployment is so important, and the government of the day must take part in so many phases of provincial legislation and provincial administration which only a few years ago never would have been thought of, that I know the provinces would be pleased and relieved if the federal government would take up this whole question of unemployment purely as a federal measure.
The hon. member for North Winnipeg (Mr. Heaps) pointed out that the leader of the Senate has given his benediction to the six-hour day. I know also that Senator A. C. Hardy, speaking before a Rotary club in Brockville in the fall of 1930, said he was convinced of the wisdom of the labour movement in its request for a shorter work day. When the Trades and Labour Congress inter-

194	COMMONS
Unemployment Relief-Mr. Maclnnis
viewed the government just before the opening of this session the same question was brought up. I should like to read from the memorandum presented by the Trades and Labour Congress to the government, which states:
There has been noticeable, throughout Canada during the past several months a determination on the part of employers to take advantage of the present conditions to reduce wages, notwithstanding there is ample proof that such a policy only results in decreased purchasing power and further aggravation of the unemployment situation.
I may say here that I am sorry the federal government has taken the position adopted by many short-sighted employers of labour, and reduced the salaries paid civil servants. Undoubtedly this will further aggravate the unemployment situation, in that it will reduce purchasing power.


Mr. MORAND:: Would the hon. gentleman say in what way this will reduce purchasing power, if that money remains in the country and is not taken up by taxation?


Angus MacInnis: It means that the less
purchasing power possessed by workers in industry, the less they can buy. If this money stays in the country that does not mean it is going to be used to purchase commodities. If I have a million dollars I cannot spend all that money in purchasing the things I need, but if I have a thousand dollars I can use that amount and more in the purchase of things I require. When you take ten per cent of that $1,000 you are curtailing my purchasing power, while if you take ten per cent off the million dollars quite possibly it will not affect my purchasing power at all. It may reduce the amount available for savings or for investment in six per cent government bonds, the proceeds of which will be used in meeting the unemployment situation.
The memorandum goes on to say:
We believe that by a liberal administration of the Fair Wages Act the government could assist materially to offset this by maintaining wage rates on works undertaken or assisted by the government, even though employers may in some districts have succeeded, temporarily, in reducing wages below what would be considered in ordinary times as "fair and reasonable."
The existing fair wages policy up to the time of enactment of the Fair Wages Act had been based on the existing conditions in respect to hours of labour which often resulted in unreasonably long work days. We believe that present conditions warrant a policy of still further reduction of hours in order to give a larger number of workers opportunity for employment. We would therefore urge the government both in respect to contracts coming within the scope of the fair wage policy and its own works, to,

wherever practical, put into effect the six hour day and five day week and by this means give a lead to private industry in a matter that cannot help but reflect itself in a reduction of the number of unemployed workers. In doing this, however, due consideration should be given to the payment of wages high enough to maintain established standards of living, as otherwise no real relief would result. Wage reductions have not been accompanied by any reduction in interest rates on loans, but on the contrary there has been a tendency to pay higher interest rates presumably to ensure the successful flotation of government bonds. This again we believe leads to a decrease in the amount of money available for purchases and a reduction of a demand for goods on the part of the masses.
In connection with their request for an extension of the six-hour day, they also made a further case for the ratification of the eight-hour day convention, pointing out that the government in its own employ at the present time has men working as many as twelve hours a day. I refeT to guards in penitentiaries where men are still working twelve hours a day, despite the fact that the government is paying direct relief to able-bodied men who would be able to do this work.
I have two more quotations to make. In this connection I think it is well to observe that the seriousness of the unemployment situation is making it possible to discuss this question in a better spirit than was possible some years ago. It is not so very long ago since, if you mentioned the matter of unemployment, you were reminded that people who were unemployed were unemployed because of their own shortcomings. To-day no one makes that statement. I noticed, in a report which appeared in the Toronto Globe, a speech made in Windsor, Ontario, by the present Minister of Railways (Mr. Manion) on Oetdber 16, 1931. I do not know at the moment what particular organization he was addressing, but I would give this brief quotation from (his remarks. He said:
We are spending $50,000,000 this year to give temporary relief to the families affected by the depression.
That is quite an item for a government to be spending-a government that was going to deal with the unemployment situation without having recourse to doles. The minister continued:
We cannot continue to spend this amount every year for this purpose. There must be an end to the peak of prosperity and the depth of depression.
And now comes a very important point which the minister made:
The human element is thrown out when the factories close down. This has been going on

Unemployment Relief-Mr. Vallance
for years. Industrial leaders, instead of inventing new machinery that means less work for the workmen, should evolve and devise some social machine that will forever put an end to such situations as now confront this country.
The Minister of Railways puts his finger on the vital point in capitalistic production when he states that the human element, that is, the workers in industry, are thrown out when the factories close down. The factories close down when profit cannot be made from operating them, for profit is the motive underlying production. He says that industrial leaders, instead of inventing new machinery that means less work for the workmen, should evolve some social machine that will forever put an end to such situations as now confront this country. But may I point out that industrial leaders are not interested in the human factor in industry; they are interested only in profits, and they install machinery in factories, not to ease the burdens on the backs of workers but to increase their own profits. How, therefore, can the minister expect such men to use their time in trying to evolve and devise some social machine that will forever put an end to such situations as now confront the country? If such a scheme is evolved that scheme will have to be put into effect, even, in my opinion, against the opposition of such leaders of industry, because it will take away from them their prerogative of making a profit out of the needs of the workers of the country. I submit that the present government should take the case up now, for if they do not do so some other government will have to do it later on.
Now I wish to quote an item from an address given by the Minister of Trade and Commerce (Mr. Stevens). He was speaking to The Advertising and Sales Roundtable in the convention hall of the Royal York Hotel on October 28, 1931, and in the course of his remarks he said:
We are unworthy of our marvellous heritage if we cannot take it and transmute it into something of which we can be increasingly proud.
We certainly cannot be increasingly proud of what we have to-day.
If we have learned the lessons of the past few years, and if we can bring distribution into equitable alignment with the growth of our production, then 1932 may well be the opening year in the new era of Canadian contact with the economic world.
This is rather a strange statement coming from a gentleman who in May last, when the motion which was passed in this house a few days ago was being discussed, said that there was nothing particularly wrong in the alignment between distribution and production. Possibly we should be glad that what we
have been saying here, along, of course, with economic conditions, is having some effect on the point of view of members of the government.
I do not think I need say anything further on this subject, but I hope that some member of the government will discuss the question. The question of unemployment is becoming increasingly serious and some steps should be taken to deal with it. I am just as firmly convinced as the Minister of Railways that this country cannot go on spending money year after year in trying to promote public works and in giving doles and direct relief to unemployed people, thereby piling up a debt, the carrying charges of which must be met. Something must be done. The wealth of the country must in some way be produced and distributed to those who need it, and in my opinion, under present conditions, there is only one way of doing this and that is by increasing the purchasing power of the workers in industry. That can be done, if both the product of industry and its production are fairly shared. I trust that the government will receive this resolution favourably and that we shall hear from them to that effect.


John Vallance: I wish to direct a question to some
hon. member who will follow the last speaker (Mr. Maclnnis), and I base my question on the wording of the resolution:
Be it resolved: That, in the opinion of this house, in order to absorb the unemployed into industry, thus eliminating the enormous waste of enforced idleness, the hours of labour be materially reduced and the purchasing power of the masses increased, and further to this end, that the government be requested to submit the necessary measures to the house.
Coming from the prairies and representing as I do a rural constituency, I should like to ask this question:	Is there any individual
in this house who will show me whereby, by a reduction in the hours of labour on the farm, under present conditions, it is even possible to apply this proposal to the farm? I was amazed at the hon. member for Northwest Toronto (Mr. MacNicol) when he stated that hours of labour, he hoped, would never be reduced so as to deny men the right to labour. I would conclude from his statement that man's chief end, in his opinion, is to labour. In mine, it is not.


John Ritchie MacNicol: I did not quite understand what the hon. member said about my advocating reducing the hours of labour so as to do something. What was it?


John Vallance: The point that I was attempting to make was from the hon. mem-
196	COMMONS
Unemployment Relief-Mr. Morand
ber's own statement. My hon. friend said, if I understood him aright, that he hoped the hours of labour would never be reduced to such an extent as to deny men the right to labour. I naturally concluded from that statement that my hon. friend's interpretation of man's chief end is that it is to labour.


John Ritchie MacNicol: The hon. member must have misunderstood what I said. The reduction of the hours of labour would offer an opportunity for a greater number to work. That is what I said.


John Vallance: I merely wrote down the statement of the hon. member and if he says he did not make it, the statement that he makes now comes finally to the same thing. In my opinion the trouble with capital is that the capitalists are demanding too much of the benefit that has been derived from the machine age. There are only four sources of wealth in any country:	the four natural resources,
namely, the forests, fisheries, agriculture, and mines. Without the application of labour those things are of no value, but labour to-day does not receive back its share of the cost of the fabrication and we find stacked up in the shelves what we propose to call too great overproduction. The trouble is that labour has not been getting that amount which will enable labour to buy back that which it has created. The last speaker has pointed out that under the profit system you can extract profit from only one source, and that is from the production of the goods, a certain percentage of the goods. According to the percentage that capital demands as a profit, just so long will it take to pile those goods up because of labour's inability to buy back that which it has created.
Coming from the prairies as I do, farming as I do, using all the modern machinery as I do, I should like to point out that in spite of the labour reductions that I can show, in the turnover of my business every year, to me, to the labourer still on that farm-talking of myself-I own no more at the end of the year than I did when we used the sickle and the walking plough. Why? Because labour and capital-I am talking of industrialists now- are demanding from me more than I am able to pay. Until that condition is rectified, how can we take two men to produce forty cent wheat where one is doing it to-day, and at the same time say that you can maintain the standard of living to those two? It cannot be done. I have laboured and I can tell labour this, that until the primary producer finds himself in a position to buy those goods which the industrialists create, we shall find ourselves always in the same situation.


Raymond Ducharme Morand: Mr. Speaker, I had no intention of taking part in this debate, but one or two statements have been made that I feel should be taken up. Coming as I do from an industrial centre, the question of finding some method of giving more work is certainly of real interest to me. The question, however, of shorter hours or shorter weeks or shorter months has not been the trouble in our part of the country; it has been a question of no hours and no weeks and no months. But I do not want to let this opportunity pass after the statements of the hon. member (Mr. Heaps) who moved the resolution, and also of the hon. member (Mr. Maclnnis) who said that nothing had been done by the government to alleviate conditions.


Abraham Albert Heaps: The hon. member is misquoting me, because I stated that the government had done a good deal in the way of alleviation.


Raymond Ducharme Morand: I am willing to take that back. I understood quite definitely that that had been said. I believe the hon. member for Vancouver South made that statement.


Angus MacInnis: I also did not make that statement. I have on several occasions said in the house that we appreciated what the government had done, but what they had done was quite futile in meeting the need.


Raymond Ducharme Morand: I am quite sure the government and the country will be pleased to know there is some appreciation of what has been done by the government. So far as we are concerned in our city, we fully appreciate the fact that the government, shortly after it took power, stopped labour from coming from other parts of the world where labour was certainly a drug on the market, where unemployment was much more severe than it is or was in Canada. Very shortly after the government came into power they stopped that labour from flooding this country. Conditions would undoubtedly be worse to-day if that had not been done. I wish to compliment and thank the government for having so arranged the tariff, despite the fact that they were confronted with tariff walls all over the world, with mass production and with a gradually increasing accumulation of goods, that they prevented the dumping of those goods into this country and throwing more men out of employment than there are at the present time. Surely that is something the government has a right to be proud of, and something the country will not forget.


Edward James Young: We shall not.

Unemployment Relief-Mr. Irvine


Raymond Ducharme Morand: I am afraid the country
generally will remember it in such a way that later hon. members on the other side will not forget it. The tariff as applied to many industries of my city has meant that at least what work there was left in Canada, what demand there was for the products of those industries, was for the purpose of giving employment to men within Canada, and that labour from outside the country was not employed instead of that of our own citizens.
There are a number of things that must be taken into consideration as regards industry. Not only has production increased very materially with the same number of men, but the quality of the goods produced is so high that they last possibly much longer than they did before, and until such time as the world itself is righted, until such time as a market can be opened in other parts of the world, until the currency of other countries becomes such that competition can be met, we are certainly overmanned in the way of production.
I wish to take this opportunity of bringing before the house the fact that we in our part of the country certainly are thankful for the very efficient and active manner in which this government has taken care of the situation, as regards not only helping those who are unemployed, but helping to continue in employment those who are working.


Mr. WILLIAM IRVINE (Wetaskiwin):: Inasmuch as this question of unemployment is one of great national importance I should like the house to get a clearer understanding of just what the resolution means. I do not rise to give that explanation myself because I am not clear on the point, but we ought to understand what it means before we vote upon it. I think the mover of the resolution (Mr. Heaps) has not taken the house entirely into his confidence in his exposition of the resolution.
Everyone will agree with the first statement of the resolution, that there are great numbers of our citizens at present unemployed and that through their unemployment their very existence is made precarious. We will also agree with the further statement that during recent years production has increased enormously. I was reading only this afternoon in the report of the Macmillan committee that production throughout the entire world had increased since 1913 by 25 per cent. So there cannot be much doubt about that. The next statement in the resolution is this:
Whereas real wages have not increased in proportion and thus consumption has not kept pace with production.
Of course, it is simply another truth to say that consumption has not kept pace with production, for the reason that wages have not increased in proportion with the increase in production.
Now I come to the declaratory part of the resolution:
Be it resolved: That, in the opinion of this house, in order to absorb the unemployed into industry, thus eliminating the enormous waste of enforced idleness, the hours of labour be materially reduced and the purchasing power of the masses increased, and further to this end that the government be requested to submit the necessary measures to the house.
Let us look at what that means. If it merely means what has been the policy of the organized Labour movement of Canada for many years, in respect to wages, then it means nothing. That policy has been and is that the wages of labourers can be and should be increased, in the vain hope that in doing so the standard of living and purchasing power will be increased. But here is the problem:	We are operating under a profit
system, and under a profit system an increase of wages must necessarily mean a corresponding increase in the price of commodities in the production of which wages are paid; so that ultimately an increase in wages must be balanced by an increase in prices, except in the case of overhead savings through improved organization or improved machinery, with such savings going to wages instead of to cheaper goods. To ask for wage increases or hour reduction under a profit system is to work around in a circle. That has been the weakness of the policy of labour ever since I knew anything about it. Even strikes never got labour anywhere, because it was not possible to have a real increase in wages under a profit system since wage increases were invariably offset by an increase in the price of commodities.
If it means that there must be a reduction of the hours of labour and an increase in pay under the present profit system, then it is impossible. If then the resolution means anything it means that we are asked to introduce a new system. That is what the hon. member for North Winnipeg (Mr. Heaps) must have in mind, and if so he is not following his usual frank way of dealing with things if he does not say so. He asks the house to introduce legislation as quickly as possible to implement this resolution. I would like to know what that means. Is it that the government should introduce by legislation a new economic system into Canada? That means, if it means anything, that the government must first nationalize the industrial system in
9S	COMMONS
Unemployment Relie]-Mr. Stitt (Selkirk)
this country. If the resolution means that, I will vote for it because I have always stood for that; I like it. If it does not mean that, it does not mean anything at all, and I would not be bothered voting for it. I would like somebody to explain just exactly what this resolution means. If it stands for a new system, which if it means anything it must mean, I would like to vote for it. If it stands for the old impossible system of increasing wages and shortening hours and increasing prices, the thing is ridiculous. Now will somebody explain?


Mr. J. H. STITT (Selkirk):: I had not intended to express my opinion on this resolution. I agree with the preamble, but not with the conclusion at all. The hon. gentleman who just sat down (Mr. Irvine) asked what the resolution meant. It means, I believe, more pay and less work. It reads:
That, in the opinion of this house, in order to absorb the unemployed into industry, thus eliminating the enormous waste of enforced idleness, the hours of labour be materially reduced and the purchasing power of the masses increased.
How' can the hours of labour be materially reduced and the purchasing power of the masses increased? I believe the hon. gentleman is asking this house to vote for a resolution in the vain hope that we can make something out of nothing.
There is another matter that occurs to my mind while I am on my feet. It is the habit for the official members of the Labour party to move resolutions of this kind without ever looking at the question of jurisdiction. I know when I raise that question my hon. friend from North Winnipeg (Mr. Heaps) will say: There is the lawyer again. Well, Mr. Speaker, in this house we are engaged in the making of law, and we have to be governed by our own constitution. I want to thank the hon. member for North Winnipeg for having made the first statement I believe that has been made in this house by any member of the Labour party that showed any sympathy at all with lawyers. I think he said that there were even some lawyers among the unemployed and receiving relief. I agree with that statement. In the city of Winnipeg, and in part of my constituency, there are lawyers and other professional men who are on relief.


Mr. GARLAND (Bow River) :: There is an
increased estimate for the Department of Justice this year, so possibly it will help my hon. friend.
fMr. Irvine.]


James Herbert Stitt: I hope that my hon. friend will get more justice. I think that is what his idea is. I am very glad to notice that.
This whole resolution loses sight of the fact that all society and industry is organized upon a profit basis. Even the poorest and most abject of us all want to get more .profit or to improve our position in life. The .members of the Labour party want to improve their position in life. Until we can eradicate from human nature that element of selfishness or that attitude towards self aggrandizement which every individual has, I believe we cannot bring into being a new Jerusalem and cannot arrive at a practical solution of our .problem by introducing a resolution such as the one now before us. In .my constituency there are many men without employment, and I recognize that fact as well as my hon. friend from North Winnipeg. I realize that most of these men who are out of work are not in that position voluntarily, but because there is no work for them to do.
If we were to put this resolution into effect what would it mean? Would it increase the work for the workless? No; it would divide up that work, which is now too little, among a greater number. Will the members of organized labour, those people my hon, friends in the corner apposite profess to represent, agree to cut down by, say, 25 per cent their hours of labour?


Abraham Albert Heaps: They have done it.


James Herbert Stitt: 
Mr. SANDERSON:: They are lost now.


James Herbert Stitt: No, our markets are not lost. I believe we are in the happy way of, in the very near future, recovering those markets.


Frederick George Sanderson: Well, my hon. friend cannot recover anything unless he has lost it.


James Herbert Stitt: For the moment I am content to admit the force of my hon. friend's logic. He has not shown any real iogic, however, but only word logic.
What about our wheat? We have disposed of more of our wheat abroad than we did last year-far more. We have not lost our markets, and are in a fair way to gain others.
I should like to say to my hon. friend from North Winnipeg that I represent a large number of labour people, and if he hopes to continue to represent and to serve labour^ in this house he should introduce a resolution within our jurisdiction, and one whereby we could accomplish something of a practical nature. We do not want mere propaganda, but something which, in the interests of labour and the people of Canada generally, will help us to solve this problem.
I consider that the resolution is nothing more than mere verbiage. I therefore oppose it. Before taking my seat however I should like to say that I believe my hon. friends from Winnipeg North and Vancouver South are actuated by high and altruistic motives. But when we try to foist upon our industrial system an abstract scheme such as the one now before us we are not trying to solve the problems of Canada but are introducing merely a resolution which means nothing, will get us nowhere and, in my humble opinion, will work to the detriment of Canada.
For these reasons, Mr. Speaker, I oppose this resolution.
Mr. JEAN-FRANCOIS POULIOT (Temis-couata):	Mr. Speaker, on one occasion when
a barrister was appealing before an appellate court from a judgment issued by a lower court
he said to the appellate judges, "I am appealing from the judgment of Mr. Justice So-and-So." Then the judges asked him, "Have you any other reason for appealing from this judgment?" The idea contained in the resolution is one brought in from the United States, and that is one of the reasons I am not prepared to accept it. There are other reasons however which I shall undertake to outline. If we reduce the number of working hours we will not solve the problem of unemployment but will only displace it.
I have only one further remark to make, namely, that since the right hon. Prime Minister (Mr. Bennett) declared that if he came into power he would end unemployment, I am very much surprised that no effective steps have been taken in that direction. At the special session the first action to relieve unemployment was to apply a plaster of $20,000,000, and following that to increase the tariff. Was that good or was it bad? Events have proved the lack of wisdom in these actions. During the war many people were wounded, but the same cure was not applied to all. Different diseases require different cures, and my suggestion would be that before we discuss further the great and difficult problem of unemployment an inventory be made of all our unemployed, setting out their previous occupations, reasons for unemployment and the concerns for whom they were working before they became unemployed. To my mind those facts should be known before any attempt is made to cure the evil. Undoubtedly such a survey would cost money, but having been done we would know, once and for all, exactly where we stand. I remember having read last year statements from the then Minister of Labour (Senator Robertson) to the effect that within a few months we would hear no more about unemployment, that everyone would have work to do and would be employed at some work for which he was fitted. The statistics we have received are to the effect that while the minister was making such statements the figures from his own department told a different story. For that reason I suggest to the Prime Minister- who, I am happy to say, is with us for another few seconds-and to the Minister of Labour (Mr. Gordon), to consider my suggestion and make an inventory of the unemployed. Undoubtedly expenditures would be necessary, but as a result of their efforts they would be in a position to give to the house information to which we are entitled, and would be in a better position to find a remedy for this terrible disease.
rr	COMMONS
Unemployment Relief-Mr. Boulanger
Mr. OSCAR L. BOULANGER (Belle-3hasse) (Translation):	Mr. Speaker, should
the House be asked to sanction the motion under discussion, I shall be forced to vote against it. I therefore wish to give, briefly, the reasons which will compel me to do so. One of these is that this resolution will not serve the purpose sought.
The hon. member who has moved this resolution stated that he wishes to increase the purchasing power of the masses. I do not think that this purchasing power will be enhanced by decreasing the working hours or by paying the labourers more to do less work.


Jean-François Pouliot: Hear, hear!


Mr. BOULANGER (Translation):: In my
opinion the only possible way to attain this end is to increase the purchasing power of the most numerous class in Canada: the farmers whom I have the honour of representing in this House.
While butter, eggs and other farm products sell at the present low prices and manufactured articles have not come down to the same low level, it is useless to discuss the raising of the purchasing power of the people. In order to increase such a power it would be necessary that the farmers found it possible to purchase these manufactured articles, and the latter will only be able to do so when their products fetch better prices. When farmers are given the means, when the agricultural class feels prosperous, there will be work for the manufacturers and workmen. The farming class must first be relieved because they are the most numerous in the community, they are the consumers, and it is the welfare of that class which is the foundation of the nation's prosperity.
I find that in the estimates brought down in the House, to-day, the grants to agriculture have been decreased by about one-third, while the estimates for National Defence show only a decrease of one-fifth. If the Government really intended to increase the purchasing power of the people, instead of decreasing the grants to agriculture this year, it should have increased them, it should have provided new markets for farm products and endeavoured to help the farmers to weather the present crisis.	.
While the whole world is discussing disarmament, it seems to me that the estimates of the National Defence could have been cut 
down by one-third, two-thirds or four-fifths, and that this amount could have been credited to agriculture. Thus the purchasing power of the Canadian people would have been enhanced, and to some extent the crisis would have been relieved. For these reasons briefly mentioned, I do not intend to support this resolution.


Wesley Ashton Gordon: Mr. Speaker, I will engage the attention of the house only a few moments with respect to this resolution. I think it obvious that both inside and outside this chamber there are two distinct schools of thought with respect to labour. The followers of one school are content to toil and by their thrift to advance themselves, while those of the other school are probably drifting the opposite way. There is not any doubt in my mind that every member of this house is anxious to seek some means whereby those who depend upon their livelihood in industry, and consequently upon the activities of those who employ them, shall be employed and remunerated at such a rate that they will be able to take their place in the life of their country, support their families, and carrying on as good citizens, in the aggregate help to build up a strong and great nation. No one will deny that that is the right of every Canadian citizen. I am not at all in agreement with those who make the statement that leaders of industry direct their attention wholly to profits and do not concern themselves with the interests of their employees. During my lifetime I have been associated with leaders of industry, although I must confess that I have never reaped the fabulous rewards from that contact that I have heard referred to in this house. In fact, in the short time that I have been a member, I have heard more of the huge profits that leaders of industry make than I ever learned of when I was outside and had some contact with those same men. Undoubtedly there is truth in what those who claim to be the exponents of labour say, that from time to time as depression falls upon us, and even in prosperous times, a section of our workingmen do not receive adequate remuneration for their labour.
So far as the resolution is concerned, I am persuaded that this parliament can do but little to carry into effect what it proposes.
I am sure hon. members realize that if we attempted to carry out what is proposed we would be immediately confronted with pro-

Unemployment Relief-Mr. Gordon
tests on the part of the provinces that we were infringing their rights, because while we are a federal union we are not a legislative union, and the provinces jealously guard the rights that were conferred upon them at confederation. It is quite true that the Treaty of Versailles did in terms suggest that all the nations of the world should get together in some way-it was not stated specifically how they should do it-and pass laws that would destroy the possibility of war and industrial conflict. In fact, it seemed to be the expectation that almost every ill that besets the human race would be entirely remedied by the passage of resolutions. Amongst others, this very subject was dealt with in that treaty. It has been discussed in this house before, and I presume it will be discussed again. In my view the federal parliament has not within its legislative power the right to do what the resolution proposes. True it is that by conference with the provinces and by a closer understanding between industry and labour great strides have been made in improving industrial conditions, and probably still greater strides will be made in the future. But when any hon. member stands up in this house and suggests that we can put the farmer on a five hour day, then I must confidently assert that he does not know very much about farming. Such a proposal is utterly impossible and cannot be worked out. With respect to the discussions that have taken place as to the reduction of the hours of labour, no one has suggested to what point they shall be reduced, or whether all industries shall be treated alike. On the other hand no one has suggested any solution to the problem of what to do with the resultant increase in the products of industry. Who is to buy them if prices go up? It seems to me that in past years I have heard the subject matter of this resolution discussed many times by economists, and I note that they found the same trouble in arriving at a solution that I have always found-the question whether it was going to be of any material help to the people concerned.
Just in passing let me say this: I was impressed by the suggestion made by the hon. member for Selkirk (Mr. Stitt). If it means anything, this resolution is very comprehensive in its terms. It covers more than Canada; it is universal in its application if it can be applied at all, and I am at an utter loss to know what measures this house could bring down that would be effective. I think perhaps we have learned something from the discussion that has taken place, but I know
of no measure that could be introduced in this house that would bring to fruition the idea contained in the resolution. The one burden, if you call it that, which is cast upon us at all times, and I think particularly at times like these, is to take care of the people within our boundaries and to see that their future is not imperilled by any conscious act of any government which is in power in this country. I wonder at times, however, if those who take the part of labour stop when their advocacy ceases, or if their concrete actions reflect the same ardour. In the last hour or two I have surveyed the records 'of the number of people brought into this country prior to that fateful July 28, 1930, in order to see to what extent those who take the part of labour really had labour at heart in the two or three years prior to that date. I find that one very ardent advocate of labour in this house, through his applications for permits for the admission of people into Canada, brought into this country 345 people, all of whom entered into some form of industry although each was supposed to take up agriculture. If every member and every defeated candidate had availed himself of a similar privilege our labour problem in this country would have been increased by 169.050 people. That is just a passing observation, but I think those who advocate the position of labour should be extremely careful to see that their interest does not cease with a verbal advocacy.
With respect to the resolution itself, in my view-and I think it is shared by those who have given this subject any considerable thought-this House of Commons has not the legislative power to bring in a measure that would carry into effect what is suggested in the resolution, and I seriously doubt if any committee of this house or any committee of economists could sit about a table and devise a scheme that would apply to all the different forms of industry and agriculture, giving effect to the idea contained in this resolution. I think at this time the house would be well advised to let the resolution drop, with the discussion that has taken place so far in connection with it.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Abraham Albert Heaps: Before the debate is resumed, Mr. Speaker, I rise to a question of privilege. When the Minister of Labour (Mr. Gordon)
202	COMMONS
Unemployment Relief-Mr. Heenan
spoke prior to the recess he referred to a large number of permits that had been obtained by someone to allow immigrants to come into Canada. The number he mentioned was, I believe, 369. He did not say who it was-


Pierre Édouard Blondin: If the hon. member
speaks now he will close the debate.


Abraham Albert Heaps: At the moment I am speaking on a question of privilege.


Pierre Édouard Blondin: When the Minister of
Labour was speaking the hon. member should then have raised the question of privilege; that was his opportunity. He has the right to close the debate, but he is not in order now in speaking to a question of privilege.


Abraham Albert Heaps: This is purely a matter of
privilege, Mr. Speaker. There may not be an opportunity of closing the debate if it goes on to eleven o'clock, and I thought I would take the first opportunity of referring to a statement which no doubt a great many hon. members thought was directed to myself.


Pierre Édouard Blondin: The hon. member is out
of order and I must ask him to take his seat.


Abraham Albert Heaps: This is the first time I have known a member to be out of order on a question of privilege.


Pierre Édouard Blondin: Order. This is not the
proper time for the hon. member to raise the question, which is not one of privilege.


Hon. PETER HEENAN (Kenora-Rainy River):: It will be agreed, I think, that the
thanks of this house are due the hon, member for North Winnipeg (Mr. Heaps) for having brought this resolution before the house at this early date in the session, because, as has been said, if anything is to be done towards relieving the unemployed or bringing in measures to meet the present situation in a definite way, the sooner the house gets down to business the sooner we shall accomplish something.
I had not intended to speak on this subject to-night for the reason that I have a severe cold. Indeed, I purposely allowed my motion to stand, although it is at the head of the order paper, in order that the motion moved by the hon. member for North Winnipeg might have precedence. Having, however, listened to a few of the speeches that have been made on this question to-day I thought that I ought at least to put myself on record with reference to some of the statements we have heard. The hon. member for Toronto

Northwest (Mr. MacNicol), speaking to this resolution, fully reviewed the question from the industrialist side and he concluded his discourse by saying that he would be very favourable to this resolution or one of this kind, but at some time in the future when conditions are better. My only comment on that is usually, when times are better and people are prosperous, we are told that there is no need for such legislation. It seems to me, therefore, that now is the time, when the need is manifest, that we should do something towards relieving unemployment or, as the Prime Minister would say, ending unemployment.
The hon. member for Selkirk (Mr. Stitt), who I am sorry is not in his place at the moment, very frankly said that he was absolutely against this resolution, and he gave as his reason that we had not the jurisdiction in this parliament, that it was a matter that should come within the provinces. Well, I remember making a similar statement on one occasion and I was not only laughed at but ridiculed, not merely from the opposition benches at that time but on the public platform. The Minister of Labour (Mr. Gordon), if I recall rightly, made a similar statement; he said in effect, whot can we do? He was at a loss to know what measures could be taken in this house to cope with the situation as presented in the resolution. The hon. member for Selkirk finished his speech by saying that if some member would introduce a resolution that came within the jurisdiction of this parliament he would be pleased to support it. I had the honour to introduce such a resolution at the last session, providing for the consummation of the treaty of Versailles with respect to hours of labour, and the Minister of Justice, then acting as leader of the house, very cordially agreed that the government could accept such a resolution. The resolution is being introduced again this session, and the reason is that the hon. member for Selkirk undertook at the last session to talk the matter out at eleven o'clock, thereby depriving parliament of the opportunity of putting its stamp of approval on the eight-hour day.


James Herbert Stitt: I object to that
statement, Mr. Speaker. I was a new member of the house. Hon. gentlemen opposite had spoken for hours and hours; I had not spoken and I had only ten minutes in which to present my views. I think the hon. gentleman's remarks are a deliberate misinterpretation of the situation.

Unemployment Relief-Mr. Heenan


Pierre Édouard Blondin: The hon. member for
Kenora-Rainy River (Mr. Heenan), I take it, does not intend to imply that the hon. member for Selkirk (Mr. Stitt) spoke as he did with the object of killing the resolution.


Peter Heenan: Yes, I make that statement here and now, and I am not the only one-


Pierre Édouard Blondin: The hon. member should
not impute that motive to the hon. member for Selkirk. It may have been that speaking as he did on that occasion had the effect suggested, but the hon. member must not impute that motive.


Peter Heenan: It was drawn to his attention at one minute to eleven o'clock that if he spoke another minute the resolution would be killed.


Pierre Édouard Blondin: Even so, he might not
have concluded his speech. I must ask the hon. member to withdraw the imputation.


Peter Heenan: I withdraw the imputation, Mr. Speaker. Now, I have in my hand the Canadian Unionist of October 1931, which gives the attitude of the government. My speech is reported in full, and the conclusion of the report is this:
Although Mr. Heenan's motion had the support of all parties, it was deliberately talked out by J. H. Stitt, the Conservative member for Selkirk, self-styled friend of the workers.
So that we 'have this resolution before the house again because of the fact that the 'hon. member did talk out the previous one, whether or not 'he intended to.
The present Prime Minister (Mr. Bennett) has said over and over again, especially during the election time, that if the federal government did its duty no man or woman who was willing to work should do without work. The Afinister of Labour now stands in his place, after the government has failed to end unemployment, and says that he doubts very much whether this house can do anything in the matter as regards providing measures to relieve unemployment, or providing for shorter hours, or assimilating workers in industry. If I remember rightly, the present Prime Minister once said that we had .the power; he said that if this parliament wished to insert a provision in our tariff legislation to provide for shorter hours or for any other condition with regard to workers, it had the power to do so. It appears, therefore, that we have now what is known as governmental solidarity, the present Prime Minister taking the view that we have the power and the Minister of
Labour declaring that he does not see anything within the four walls Of parliament that could give us that power.
The Minister of Labour also made certain references to the farming community. If I remember rightly, he said: Show me Where a shorter working day could be applied to agriculture. Well, I know that the present Minister of Labour has not been in his position very long and that is the excuse I would make for him; because he will find there is no labour delegation or labour platform that has ever suggested that a shorter working day should 'apply to agriculture. Indeed, the treaty of Versailles and the conventions arising out of it all exempted the agriculturists from the eight-hour day, so that there is no necessity for bringing up that bogey with respect to the eight-hour or the shorter working day as applied to agriculture.
The Alinister of Labour concluded his observations by saying that he was at a loss to know what measures could be taken to reduce the hours of labour, which is really what the resolution calls for. The present Prime Minister (Mr. Bennett), when he was leader of the opposition, announced a policy, as I stated before, that we could take measures by way of providing in the tariff legislation that any industry that secured the protection afforded by such legislation should manifest to the government or some commission that it was maintaining the eight-hour day, or the six-hour day or any hour day that the government might wish to impose. They could do all that is possible to stop the reduction in wages that is taking place all over Canada, but so far there is in this country, generally speaking, a reduction in wages ranging anywhere from ten to twenty-five per cent, and the government, so far as I am aware, have not taken any measures whatever to stop or to try to stop it. It is true some members of the cabinet have asked publicly that employers should keep on as many employees as possible during this period of depression and that they should not take advantage of the depressed times to reduce wages; but notwithstanding that, reductions in wages have taken place all over Canada just the same. Indeed, the government itself is leading the way by dismissing many men from the public service, and by making a reduction in wages.
Our railroad men, who are just now suffering a reduction of ten per cent, had, when the Conservatives were in power in 1921, to take a reduction to the extent of 12 1-2 per cent in wages, or about $45,000,000 a year. That is what they contributed to the prosperity of the country. It is true that they got back

Unemployment Relief-Mr. Heenan
upwards of six per cent of that between 1927 and 1930, but now they are again faced with the ten per cent reduction in wages, and I ask the Minister of Labour or any other member of the government: what have they _ done to prevent that reduction in wages? The railroads of Canada are under the jurisdiction of the federal parliament, and I have yet to hear of or see one iota of action the government have taken to stop that reduction in wages. Indeed, they have accepted the report of a board of conciliation and investigation which practically discards the announced policy and principle of the federal government with respect to wages as applied to railroad men. I have under my hand a copy of an order in council dated 16th July, 1918. I do not want to read it all because it is a very lengthy document, but in it there is this principle announced:
And it further appears that the railroad companies are of the view that the wages paid railway employees in Canada ought to be the same as that adopted in corresponding territories in the United States, as the class of work is the same in both countries.
That is an announced principle which was adopted by the governor general in council. This year the government appoints a board of conciliation and investigation and we have this reference:
As regards the employees' second point, we feel that railway basic wage rates in Canada must be based on conditions in Canada and not in the United States. We feel that the capacity to earn revenue must be an important element in the payment of wages, and in the United States railway earning conditions are substantially different from those of Canadian railways.
I have yet to hear some protest from either the Minister of Labour or any other member of the government with respect to that recommendation of the board of conciliation which discards the principle that they themselves enunciated in 1918. The Canadian railroad men are loyal to this country. As I said, they contributed $45,000,000 annually out of their wages by taking the reduction in 1921. They have accepted the reduction this year because of their loyalty to the country, because they have heard politicians tell them from every platform and in the House of Commons that prosperity is just around the corner and they are loath to be the ones that would attempt to put a drag on that prosperity from coming around that corner.
But, as I said, the government of Canada has jurisdiction over the railways. They could and the railway companies could have found on the railways many other avenues where they could have saved, but they started to reduce wages. If you read the newspapers of

this country you will find that very few of the writers have much knowledge with respect to the earnings of railroad men or the conditions of their employment. They take one or two or a dozen of the highest paid men on the highest paid runs and they put down their earnings as an average for the railroad men. They forget there are between 25,000 and 30,000 railroad men who have worked ten and twenty years, many of whom work only three or at most four months a year, and who are laid off because of seasonal traffic. They also forget at the present time there is upwards of $200,000,000 worth of rolling stock that is tied up on the side tracks, not used, that has to be paid for with interest and that is charged up to the railroad companies, and yet the railroad men's wages are the first to be attacked. They forget the millions of dollars tied up in the terminals, in the shops, in equipment of all kinds, that have been paid for with interest out of the revenues of the railroad companies, and that is lying idle, and the only thing it seems that they can save on, is the railroad men's wages.
I want to point this out very clearly, because the board has taken the position that a railroad man's wages in Canada ought not to be on a par with those that are earned in the United States. The railroad men of this country are not only loyal but efficient. We have to compare the operation of our Canadian railroads with the operation of those of the United States, because they are the only ones that are comparable, the railroads of Canada and the United States being equipped to haul long trains long distances, whereas the European railroads are equipped to haul short trains short distances. It is on record to-day that the railway men of Canada handle about twelve thousand tons of freight per man per mile more than do the railroad men in the United States. Yet we have a board appointed by the government bringing in a recommendation that, notwithstanding this display of efficiency and loyalty, the wages of the railroad men of Canada are not entitled to be put on the same basis as those of the railroad men of the United States.
There is no necessity to read this resolution again. It simply asks the government to submit the necessary measures to the house. The Minister of Labour says that he does not agree with the resolution. I hope he does not speak for the whole government. I hope we are not going to have government solidarity on this occasion, because there are many things that could be done. The government has power to bring in measures reducing the hours of work in industry under its tariff

Unemployment Relief-Mr. Donnelly
legislation. They have power to initiate a program of public works to be gone on with to provide work for the unemployed. They have power to go on with the trans-Canada highway, which they promised the electors of this country. They have many opportunities. Having failed in their promise to end unemployment, having failed to live up to the principle which they enunciated that if the government of Canada did its duty every man and woman in this country willing to work would have the opportunity to work; having failed miserably in all these things we have the spectacle of the Minister of Labour standing in his place to-day-not speaking for the government-and saying: I am at a loss to know what we can do in the matter.


Mr. T. F. DONNELLY (Willow Bunch):: I wish to make a few remarks in connection with this resolution. Let me say at the outset that I am in sympathy with labour in its effort to secure both high wages and shorter hours of labour. That has been the cry for years-less work and more pay. But I agree thoroughly with the Minister of Labour (Mr. Gordon) that this resolution is no solution whatever for the problem of unemployment.
I was rather surprised, however, that the Minister of Labour when he spoke on this question did not speak with more assurance as to what was the proper remedy for unemployment. I know that before the election in 1930 the government had no doubt whatever as to what the cure for unemployment was. Then they told us that while the then Prime Minister (Mr. Mackenzie King) promised to consider the problem of unemployment, the present Prime Minister (Mr. Bennett)-and he himself said so-would end unemployment; and the present Minister of Justice (Mr. Guthrie) said at Regina that if the Conservatives were returned to power they would end unemployment in three days.


Mr. GUTHRIE:: No, no.


Thomas F. Donnelly: We do not find that same assurance now. They are not so certain about it. The Minister of Labour says that he does not know what can be done to cure this unemployment problem. Apparently it is a different proposition entirely from what it was before the election.
While I am in sympathy with labour in desiring to see this unemployment problem solved so that they can get more pay and less work, I have very little sympathy with this government which made such rash preelection promises, for no other purpose, apparently, than to obtain office; because they must have known that they could not do the
things they promised. While we hear different men speaking about this problem of unemployment throughout the country, the Minister of Labour tells us that he does not know anything about a solution for it. He says that he has listened to several economists speaking on it and that apparently the economists, one and all, were unable to lay their finger on the solution of the problem of unemployment. Well, Mr. Speaker, he must have been listening to the wrong kind of economists, because for the last twenty years economists have been telling us the very thing to cure unemployment. They have been preaching it through all these years, but they have been a voice crying in the wilderness. If you listen to economists to-day you will hear them say that there is a world-wide depression and that it has been brought about by fiscal policies that restrict trade.


Some hon. MEMBERS:: Oh, oh.


Thomas F. Donnelly: My hon. friends laugh.
I will read something to them and probably they will laugh on the other side of their faces. This is from a bulletin published by the Chase National bank of the city of New York. It is an article on the tariff and the world depression by Mr. Benjamin M. Anderson, economist of that bank. He says:
We are in the midst of a severe business depression which is world wide. The most serious obstacle in the way of early recovery is the state of our foreign trade. The most serious obstacle in the way of the revival of our foreign trade is our high protective tariffs, the quickest way to get out of the existing depression is to reduce our tariffs so that our foreign customers may sell more goods here and get more dollars with which to pay interest upon their debts to us and with which to buy our goods. If we do not buy we cannot sell. If we do not buy enough we cannot sell enough.
I do not hear my hon. friends laughing now. Then listen to this:
Bankers and economists have been telling the country this ever since the world war, but the country has been slow in learning the lesson.
That lesson is being brought home to us to-day, and if we wish to cure unemployment and get out of the depression in which we find ourselves to-day there is only one way. If we want to sell more we must buy more. The Prime Minister said the other day that the only way to get a favourable balance of trade was to cut down our imports. Why, Mr. Speaker, any child knows that there is another way. Why not increase our exports? There are two ways of doing it. You can get a favourable balance of trade by increasing exports just as well as by cutting down our imports and throttling business. If
206	COMMONS
Unemployment Relief-Mr. Donnelly
we had more exports we would find our markets increasing all over the world and our labourers would be employed in our factories and in our means of transportation.
We hear a lot about the new factories that are coming to this country and of the improvement that has taken place under the higher tariff, but we had the spectacle of the hon. member for East Essex (Mr. Morand) rising in the house this afternoon and saying: In my constituency it is not a case of a shorter day or a shorter week; it is a case of no work. Yet we are being told that the factories in the industrial centres are working overtime on account of this great tariff. When I listened to the speech of the Prime Minister before the last election I thought there was going to be no trouble whatever. He said that the country was in a terrible condition, that it was very sick. He reminded me of a physician who goes to see a patient suffering from fever, accompanied by a severe headache. He says to his patient: I will give you this pill for your headache and this boittle of medicine to cure your permanent disease. In the same way the Prime Minister in September 1630 called a special session. He was the great physician who was going to cure unemployment. He said to his patient: I am going to give you this temporary relief, this small pill of $20,000,000 which will ease your unemployment for a while, and then here is a bottle of dope which is the great cure that is going to make you young and well. Take that and everything will be all right again. This bottle of dope is labelled "higher tariffs." We have been taking the medicine steadily; we had more of it last session, and the public is still asking for more. WTe are still getting bigger and bigger doses of that permanent cure, and yet the patient is getting sicker and sicker every day, until at last the Prime Minister himself has thrown up his hands and has had to admit, as he did when speaking to a meeting of one of the United Churches lately: Nothing but the grace of God, he said, can save this country. He admits he is wrong. He said that he would cure unemployment or perish in the attempt. Well, he is perishing in the attempt. He is failing to cure unemployment. I say we are not going to have better times or any improvement in this country until we increase our export markets. When we increase our exports we will begin to buy more, and when we begin to buy more we will sell more. At a time when we begin to buy and sell more and begin to trade more with our neighbouring countries, conditions will improve. The Liberal

policy as enunciated by Hon. Charles Dunning indicated that we were willing to trade with those who would trade with us; that is the Liberal policy, and that is the policy to which we are pledged to-day.


Mr. PORTEOUS:: I should like to ask the bon. member a question: How much did the Liberal government increase the exports of agricultural products in nine years?


Thomas F. Donnelly: My hon. friend may consult the Canada Year Book to get that information; I am sorry I have not the information under my band. I wish to tell him bowever that between the years 1921 and 1929 there was an increase of about 60 per cent, and I will add that Canada never was more prosperous than during those years. I will say more than that; I will tell my hon. friend that we took power at a time of depression and brought conditions back to prosperity.
Let us survey the history of Canada for the last thirty-five years; for the benefit of my hon. friend I should be pleased to trace it. Back in the year 1895 we were suffering from a depression, and at that time we had a Conservative government. In 1896 the Liberal party came into power, and through Sir Wilfrid Laurier a Liberal policy was put into effect whereby we showed a willingness to trade with those who would trade with us. We put into effect a British preferential tariff; we lowered the duty; and prosperity in Canada extended to the year 1911. At that time we tried to put into effect the very same policy that the Liberal party has always preached, to trade -with those who trade with us. We were willing to put through a measure of reciprocity to enable freeT trade with the United States. Out in the west however a lack of patriotism was preached and as a result we were defeated. No greater calamity ever overtook this country than the rejection of reciprocity. The people realize that to-day, and our agriculturists sineeTely believe it. From the years 1911 to 1914 Canada went through another period of depression, and conditions became worse and worse until war broke out. When the weu- was over and the Conservative party took over the reins of power we entered another period of depression which became worse and worse until the Liberal party again took office in 1921. They proceeded to put into effect the very same policy they had always believed in, that of trading with those who would trade with us. Conditions became better and better from year to year until the last election, when our Conservative friends obtained a majority, and as a result trade has been restricted and we

Unemployment Relief

Mr. Reid
are again in a period of depression. If my hon. friends will look back over the past tihirty-five years they will find that not once has there been prosperity during the regime of a Conservative government. If any of my hon. friends dispute that fact I challenge them to tell me the years, during the last thirty-five years, when during the time of a Conservative government we have had prosperity.
May I say to my hon. friend who interrupted that he will have the opportunity to speak when I have resumed my seat, and I ask him to tell me the years when we have had prosperity. Any prosperity Canada has enjoyed has -been under a Liberal government, and any prosperity we will ever have will be under a Liberal government. The economics of my hon. friends opposite are altogether wrong; their principles are wrong. They cannot restrict trade and have prosperity.
I contend, Mr. Speaker, that if we are to have an improvement in this unfortunate condition of unemployment there is only one way to do it, namely to cut down our tariff wall and trade with those who will trade with us. If we do that we will give employment to our people and return the country to that state of prosperity it enjoyed before the last election.


Thomas Reid: Mr. Speaker, I should like to say just a word concerning this very important resolution. Whether we agree with the wording of the resolution or the theory advocated by its mover (Mr. Heaps) we must admit that the subject matter is of great importance. What could be more important at this time than the question of employment for the masses of our people? In my opinion parliament would be well advised to give .more heed to and spend more time in discussing this subject.
One point has not been 'brought out in the various arguments advanced; I refer to the increasing numbers of our young men and women who upon reaching manhood and womanhood can find no useful employment, be 'they ever so eager to procure it. I have talked with many men and women who are almost distracted with the grave problem of unemployment which is affecting their grown up sons and daughters who find they have nothing to do and have to remain at home in idleness. I realize there are some hon. members in this house who believe that if we only wait a little while everything will turn out all right and matters will be adjusted. Perhaps they believe the tariff will solve our unemployment problem, if we but
have the patience to wait. I am glad to say that I for one do not share those views; for I am of opinion that with our modern labour saving machinery, industry, as we know it, will never again be able to absorb and give employment to the millions of able-bodied men and women throughout the world who desire it. I believe that should be borne in mind by the heads of governments and should be the basis from which to begin in an endeavour to find employment for those who must have it.
I am not sure whether or not the proposed resolution, if put into practice, would solve the difficulty, because as yet no one has been able to determine either by mathematics or by statistics just how many hours workers would have to be employed so that everyone might be engaged. I am firmly convinced however that if no attempt is made to solve the difficulty it will not solve itself, and I am wondering how much worse conditions have to become in Canada before some action, different from that which has been taken, will be taken to cope with the problem of unemployment. Conditions would be much better in my opinion if fewer hours of labour were necessary, coupled with the control of wealth, which is now in the hands of only a few. In that way employment would be given to greater numbers. If conditions do not improve the lesser number of our people engaged in occupations and receiving wages will be taxed to support the great numbers who, through no fault of their own, cannot procure suitable or, in fact, any employment and are forced to partake of charity. The cry of the masses must be heard, and cannot much longer be ignored.


Edward James Young: Mr. Speaker, considering this question of unemployment I think we would do well to carry our minds back to those primitive times when each family was a selLcontained economic unit, cultivated a small piece of ground with implements of their own faishioning, built their own houses out of such material as could be readily found; when the furniture was made from blocks of wood chopped off the end of a log, when clothing was made from wool sheared from their own sheep, spun and woven mto cloth, and fashioned into garments by the women of the household, and when everything was produced in the home. In those days there was no unemployment; there was plenty of work for everybody. If nature was kind and gave a fruitful harvest there was plenty to eat and plenty to wear. If nature was unkind and the crops in any particular
208	COMMONS
* Unemployment Relief-Mr. Young
locality failed, starvation stared them in the face; for there were no facilities to bring goods from a distance. I say there was no unemployment at that time; everybody had to work hard, long hours for a very meagre subsistence.
Compare the standard of living of an ordinary citizen in those days with the standard of living of an ordinary citizen to-day. Then he lived in a hovel with probably a thatched roof and a mud floor, with hardly any window, perhaps a sheepskin nailed over a hole in the wall, and a blanket for a door. He had no reading matter, no opportunities for education, no fine raiment, no musical instruments -something that we to-day consider necessary for a civilized being to enjoy life. Go into the home of an ordinary workingman to-day and you will find that it is a palace compared with what his predecessor lived in; you will find he has light, books to read, a telephone,
[DOT] a piano, a radio, opportunities for education- many things that even the richest could not enjoy in those days.
I ask you, what has brought about this change in the condition of the workingman? It resulted from the division of labour from improved methods of production. It was found that a man making his own tools, cultivating his own farm, shoeing his own horse, building his own house, making his own furniture, could not do much of anything in a given time. It was found that by a division of labour, by some men confining their attention to the production of those things which they could produce to the best advantage, while others confined their attention to the production of other things in which they excelled, it was passible to increase the total production of the human race manyfold. That process continued and was accelerated from time to time, until to-day men specialize in one branch of any particular industry. This has brought about a vast increase in the production of all kinds of wealth-much more wealth of every kind is now available for the consumption of the human race. The result is a much higher standard of living, and the world is able to sustain many times the population she could sustain in those days, and many times what she could sustain to-day were it not for these modern labour-saving devices.
I do not agree with those who say there is overproduction of wealth to-day; there is no overproduction of wealth. I do not agree with those who say we have solved the problem of production; we have not. We have not come anywhere near solving the problem of producing all the goods that the world can consume. Our capacity to consume food

is limited by the capacity of our stomachs; but our capacity to consume other commodities is unlimited. Overproduction of all goods? A thousand million people in the world to-day are not getting enough to eat. If you could add one slice of bread at each meal for those people it would require an additional two thousand million bushels of wheat a year. Can there be any overproduction of wheat while a condition like that exists? Overproduction of clothing? There are ten million people in Canada, and nine million, nine hundred thousand of them would do well to have more clothes. The same is true of our houses, our furniture, everything. There is no overproduction of wealth in the world to-day, and any scheme that aims to curtail the production of wealth will aggravate unemployment and lower the standard of living.
Now, we have seen that this division of labour and improvement in methods of production by improved machinery and otherwise has made it possible to produce many times more wealth than before. But that presupposes that those who produce one kind of wealth must be in a position to exchange it with those who produce another kind of wealth. Bring about these conditions where those who produce a surplus of wealth can exchange their surplus with those who produce a surplus of other wealth, and you have solved the problem of unemployment. Why is it, then, that we have unemployment? Because something stops us from exchanging the goods which we produce in abundance for the goods that we require and that other people produce in abundance. We in Canada can produce the basic products in abundance-lumber, pulpwood, newsprint, fish, minerals, wheat and so on; other countries can produce other things in abundance; but so long as governments interfere and say, "We will not allow you to exchange the things that you have to sell for the things that other people have to sell," just so long will there be unemployment.


An hon. MEMBER:: Tariffs.


Edward James Young: Yes, tariffs. I thank my
hon. friend for the suggestion. Tariffs, I say, are the main cause of all our troubles. Let me give you an illustration. A certain farmer in a dried-out district of Saskatchewan last year planted a field of potatoes in the bed of a lake that had gone dry; he harvested a good crop; nobody else in the neighbourhood had any potatoes; that farmer has more potatoes than he can use, he has potatoes to sell, but he cannot sell a bushel of them.

Unemployment Relief-Mr. Heaps
Why? Overproduction of potatoes? No, there is an actual scarcity of potatoes in that district. Why cannot he sell them? Because his neighbours have nothing to give him in exchange. Do you expect a man who produces one thing to give it away to somebody else who has nothing to give him in return? No. Those who produce one commodity must be in a position to exchange with those who produce something else.
We in Canada produce certain things; other people in other countries produce other things. The unemployed in Canada are not in a position to give us anything for the goods that the employed people are producing. If those who are producing in Canada were permitted to exchange their products for the products of the people of other countries, they would be able to purchase more goods in Canada, they wTould be able to enlarge their operations, they would be able to employ more men, and unemployment would disappear. Any attempt to remedy unemployment by decreasing the amount of wealth produced would have the very opposite effect; but every step taken to remove the trade barriers which prevent those who have wealth from exchanging it for other forms of wealth that others have to sell is a step toward the removal of unemployment. Until these barriers are done away with, we will have unemployment, and we will have it in worse form as time goes on.


Abraham Albert Heaps: I
was very glad to observe that those who have participated in this debate have expressed so much sympathy with the working people. We are thankful for those expressions, but we should like something more definite and concrete to help the unemployed-something more than sympathy. With the argument of the last speaker (Mr. Young) I do not altogether agree. I am of the opinion that if the whole world at the present time went entirely on a free trade basis there still would be unemployment. I have always held the view that in tariffs we shall not find a solution for the problem of unemployment. Also we have not merely to deal with the question of production. When speaking to my resolution I said that the question of production was solved to-day, I did not mean for one moment to imply that we have too much in the way of commodities. Let us assume that every human being able to work were harnessed to some form of industry and producing something of a useful nature. In a very limited time we could produce more than enough to satisfy all our requirements, and I think on
that basis four hours of work a day would be more than sufficient to satisfy human requirements, including those of the farmers!


Edward James Young: Where is your evidence?


Abraham Albert Heaps: I might as well ask my hon. friend what evidence he has that everyone would be happy if the world went on a free trade basis. I think the tremendous increase in production, our modern methods and machine equipment which is displacing labour, are sufficient proofs of the statement I am making to the house.
So the problem is not one of production or of exchange; it is a problem of distribution. If a man is working for wages and is getting only one-fifth or one-quarter of what he produces, it would be the same if he were living under protection or under free trade, and until we can break down that spread between what a man receives in wages and the value of what he produces, in my opinion, there is no hope of solving the problem of unemployment.
Something has been said during the course of this debate with regard to jurisdiction. I recognize the limitations imposed on this parliament; I recognize the difficulties connected with jurisdiction with which we are confronted, but if we are always to set up that question of jurisdiction I am afraid it will be very difficult for us to make much progress in this country. I remember that a few years ago, when the question of old age pensions was raised in the house, we were met with the plea of lack of jurisdiction, but when parliament determined to provide the aged people of this country with old age pensions, ways and means were found to overcome that difficulty. Just as we overcame the question of jurisdiction in regard to old age pensions, so I am satisfied we could overcome the difficulty of jurisdiction which faces us in connection with this problem, once the house is determined to do so.
Credit has been taken for what has been done by the government in order to assist the unemployment situation. I wish to say here that I greatly appreciate what has been done by the government during the past twelve or eighteen months in helping the municipalities and the provinces to deal with this unemployment problem, but when I make that statement that is as far as I can go. What they are doing is in no way a solution of the problem; it deals in no fundamental way with this great question. In fact, Mr. Speaker, it is my opinion that the continual giving of these doles and the increase in our national debt make it very

210	COMMONS
Unemployment Relief-Mr. Heaps
difficult to cope with the problem or to get any permanent solution. I think we are simply aggravating the situation.
When we look at the estimates presented to the house this afternoon we find a tremendous decrease in all expenditures for the ensuing year. There are one or two cases where increases have been made, however. One case is the interest on the national debt, which has been increased by about $13,000,000. Another case of an increase is the estimates for the Royal Canadian Mounted Police, which have gone up approximately $500,000. That is where our money goes, and I want to say that w'hen we start to economize on wages we are starting at the wrong end. We should do something about those tremendous interest charges, and I think if we did so we would be doing a good thing for Canada.
I was very much disappointed in the statement of the Minister of Labour (Mr. Gordon). I had hoped that on an occasion such as this, when we are having our first discussion of this important problem of unemployment, at least the minister would have told this house and the hundreds of thousands of men and women out of work what the government intend to do, but in his remarks there was not one word or one syllable which would give a ray of hope in this connection. I am very sorry that this was so; I am sorry the government have taken that attitude. I was looking for some constructive proposal, some word as to what the government intend doing during the coming year in order to deal with this extremely difficult and, I might add, menacing situation.
We have been told of the great increase in the prosperity of the workers; we have heard of the homes they own, of the electric lights they possess, of the radios, the washing machines and other articles found in their homes. Most of these articles in the average homes are purchased on the instalment plan, and many of them are not paid for. When we talk of the working people owning their homes we forget that in most cases there are very big mortgages on them. But may I give a little information which came to me only a day or two ago in order to show the conditions which exist in some homes. This information was contained in a letter from a very authentic source. It is expected that in the city of Winnipeg in the near future 1,500 children will be born in homes where there is hardly a rag in the house with which to clothe them. That is an actual situation, yet our Minister of Labour speaks about building up a strong nation. There is no one in this

house who more earnestly desires that end to be brought about than the members representing the Labour party, but when children are bom under the conditions I have just described, I ask: what chance have they of growing up into decent, strong, vigorous Canadian men and women? Their chances are very slim indeed.
Some people were surprised that I should introduce a resolution of this kind; they asked what good it would do the farmer. I am free to admit that offhand I cannot say how this is going to affect the farmer; I do not know whether it will be a detriment or a help to him. But if the farmer to-day has nothing but a load of debt, as I am told by farmer members of this house, I do not see how this resolution could affect him in any harmful way at all. On the other hand, if it has the effect of increasing the purchasing power of the great masses of the people, it might be of some benefit to the farmer in this country as well.
I believe I am safe in saying that in introducing this resolution I am voicing the opinions of every shade of labour thought in Canada. There is hardly a labour organization in this country that has not gone on record as being in favour of a shorter working day, and at the same time requesting an increase in their purchasing power. Within the last few weeks a delegation from the Trades and Labour Congress of Canada, the largest body of organized labour in this country, waited on the government with a memorandum which included a request for a six hour day. That request has been made now for quite a number of years past. Under these circumstances, therefore, when, as I feel, I am speaking here to-night for practically the whole of organized and the great part of unorganized labour in the country, I regret that I cannot see my wa3r to withdraw the resolution. I believe that within the confines of the resolution are contained the very things that are vital so far as the workers are concerned.
And now may I make one reference to a statement made by the Minister of Labour to-day. He stated something about a member of this house, interested in labour questions, having received 369 permits-I believe that was the number he gave-to enable persons to go on farms, those persons having ultimately found their way to the cities. I believe that was the statement he made, and the natural inference was left that I, having brought this question up to-day, was the member who had asked for these 369 permits. I

Stabilization oj Currency-Mr. MacLean
need hardly assure the house that this is not the case, and therefore I take this opportunity of correcting that impression, if any hon. members may have had it.
For the reasons I have given, Mr. Speaker,
I cannot withdraw the resolution.


Mr. McINTOSH:: May I ask the Minister
of Labour who the member was that obtained over 300 permits for the purpose stated?


Wesley Ashton Gordon: Mr. Speaker-


William Irvine: May I ask a question of
the mover of the resolution (Mr. Heaps) before he takes his seat?


Cameron Ross McIntosh: Let the minister answer
my question first.


William Irvine: I am asking the mover of
the resolution a question. What is the meaning of the resolution? Is it, as I presume, an entire change in the system which the hon. gentleman is asking for, or does he think it practicable to carry out his suggestion under the present economic system?


Abraham Albert Heaps: The hon. member is practically asking me to make a speech-that is, if I am to reply to his question. I think I dealt with that aspect of the subject in the concluding part of my remarks this afternoon.


Pierre Édouard Blondin: Is it the pleasure of the
house to adopt the motion?


Cameron Ross McIntosh: I asked one of the
responsible ministers of the crown a question.


Pierre Édouard Blondin: It is entirely within the
discretion of the minister to reply or not, as he pleases.


Mr. STEVENS:: The debate is closed.


Edward Joseph Garland: It was not a fair statement.
Motion negatived.



STABILIZATION OF CURRENCY


Mr. A. E. MacLEAN (Prince) moved:: That, in the opinion of this house, if the empire is to become an economic unit, the stabilization of currency within the empire is very important and should be one of the first questions for consideration on the agenda of the Imperial conference at its meeting in July next.
He said: I realize, in proposing this resolution, that I am not at all competent to discuss it adequately, but I regard it as so important to our country at the present time that at least it should receive some consideration in 41761-14J
this house. I understand that some other hon. member desired to move a similar resolution, omitting the words, "if the empire is to become an economic unit." It is immaterial to me whether those words remain in the resolution or not, and with the consent of the house I am willing to leave them out, so that the resolution, revised, would read:
That, in the opinion of this house, the stabilization of currency within the empire. . . .


Pierre Édouard Blondin: Has the hon. member the consent of the house to delete from the resolution the words "if the empire is to become an economic unit"?


Richard Bedford Bennett: No; let him go on with
the resolution as it is.


Alfred Edgar MacLean: Very well; it is immaterial to me and I will discuss it as it stands. I move this resolution to-night because in my opinion the present rates of exchange are detrimental to our trade. High rates of exchange between countries have prevented us from trading both within and outside Canada, and if we are forced to trade within the empire then this can be done only by the stabilization of currency within the empire and the abolition of adverse rates of exchange. Personally I cannot see that there is anything new in our trading within the empire, nor in the empire becoming an economic unit. The policy of the Liberal party has always been to trade with the empire and the whole world, and we know that from 1921 up to 1930 Canada was trading with every nation. But even then we did not find that we had a great sur-. plus of markets for our products and we were looking for wider markets with a view to expanding our trade. I am pleased to say, and I think every hon. member will agree with me in this, that during that time our trade went forward by leaps and bounds. Our friends opposite are now advancing the slogan about trading within the empire and making the British empire an economic unit, and I contend that if we are to be forced into the position of trading only within the empire, then the depreciation of the pound sterling, with its attendant disadvantages, makes it almost impossible for us to trade satisfactorily, especially with Great Britain, or with the empire as a whole.
I know that this is a very complicated question and one that has received the attention of leading economists and financial experts throughout the world, and if something can be done to improve the present very unsatisfactory situation every effort should be made in that direction. We are in fairly good company, it seems to me, when we propose this
212	COMMONS
Stabilization of Currency-Mr. MacLean
question in regard to empire currency. I believe that Lord Milner and Lord Beaver-brook were both in favour of empire currency, for in 1917 Lord Milner said:
I believe it to be of the utmost importance to the future of the empire that there should be empire currency.
Some people, including members of this house, are of the opinion that this does not go far enough; they think that an effort should be made to Stabilize the currency of the world and thus do away with unfavourable rates of exchange. I admit that this is quite desirable from every point of view, but at the same time the resolution now before the house is a large order for the time being, and if we could accomplish what is aimed at in this proposal we might then be in a position to say to the rest of the world, "Here is an example which you might well follow". Some people may contend that no hardship is imposed on anyone by present rates of exchange and that in the long run things equalize themselves, so that no one suffers very much from an adverse rate of exchange between one country and another. There may be some truth in that, taking the country as a whole, but that argument will not hold good in the case of the individual, because the individual is likely to be trading one way. He is selling his product to a country that has a depreciated currency, and there is no possibility of his getting any compensation in return. If he were able to sell part of his products in a country with a depreciated currency and the other -part in a country like the United States, where their currency is at a premium at the present time, there might be something in the argument. He might then even things up in the long run. But we know our producers throughout Canada are forced to sell a great many of their products on the British market; they are selling them on a depreciated currency, and there is no way out; they have to take their loss.
Some will say that this currency question is altogether one that is connected with the gold standard, and that we must adhere to it, while, on the other hand, others claim that the gold standard must be discarded. It is not my purpose to-night to discuss the merits or the demerits of the gold standard as a basis of currency, nor do I advocate doing away with the present form of currency in each country. If Great Britain wants to retain her pounds, shillings and pence, I say: let her do so. If Canada, on the other hand, wishes to retain her Canadian dollar, I say: let her do so. But there must be some system under
[Mr MacLean,]
Which the Canadian dollar or the pound sterling will have proportionately the same buying power in any country within the empire, and until we arrive at that point it is going to be pretty difficult for us to trade.
I do not know whether people realize how costly the present system is and how impossible under it it is for us to continue to do business, especially since the present government has adopted a policy of applying the dumping duty on the basis of the currency in the country from which the goods are imported. I have a case in point in a letter that I received from a gentleman the other day, pointing out that as regards the importation of goods from Great Britain, the depreciated currency is taken into account and the dumping duty applied, with the result that there is practically no more free entry of goods, even if they should happen to be on the free list, especially if they are of a class or kind manufactured in Canada. Under date of October 21st last, this gentleman writes:
On September 1st, Joseph Gundry and Company of Bridport, Great Britain, invoiced and shipped to us a lot of smelt bag nets, used for fisheries. They arrived in Canada some time previous to September 24, as they were rebilled from St. John on that date. Unfortunately the documents did not arrive as soon as the shipment, and when we attempted to clear them from the customs, which was shortly after October 1, the Customs department insisted on collecting as a dumping duty the difference between the depreciated value of the pound, on that date, and its par value. We did not clear them from the customs. The shippers made a draft on us in Canadian currency for the total value of the shipment. Smelt bag nets have always been entered free without any sales tax or duty.
You will notice that instead of getting any advantage by the depreciated value of the pound, we would be paying about $5.30 if we entered the nets to-day. Now the position is that if we are obliged to pay for British goods in Canadian currency and the customs demand a dump on free goods, the dump being the difference between the value of the pound at the time of entry, as compared to its par value, then the 'ower the pound goes the more the goods will cost us. This certainly would absolutely kill importations from Great Britain as we can easily get our supplies from the United States^ and in addition, it does not affect any Canadian industry, as these goods are of a class or kind not manufactured in Canada.
I may say in connection with this matter that these gentlemen put up a deposit of $56 and, as a result, after a great deal of correspondence with the department, the goods were released. But if they were of a class or kind manufactured in Canada, although they were permitted to come in free of duty, still that dump would apply. As I said before, this

Stabilization oj Currency-Mr, MacLean
depreciated currency has everything else trimmed, even the high tariff of our friends opposite, in keeping out goods and eliminating everything from the free list.
There -is one commodity with regard to which this comes right home to the people in Prince Edward Island, namely silver fox pelts, of which we handle a large number through the different organizations in the province. We all know that in Great Britain, London is the big market where the world price for those pelts is set. The moment the English currency depreciated to the extent it did, the silver fox business in this country received the worst setback it ever experienced in its history, because it makes no difference who the gentleman is who is purchasing a silver fox pelt, whether he is from London, England, or New York or Montreal, the first thing he does is to figure off the depreciated currency, and that has to ibe borne by the producer of the pelt. The poor fox rancher who is raising those pelts for sale is the man who has to stand the loss. There is a debatable question there. It is the same as the tariff question. Some will say that the consumer pays the duty or the tariff, while others wild say that the shipper pays it. This is largely a question of supply and demand. If there is a very strong demand on the market for a certain article, it is quite possible that the British buyer would pay the price and absorb the depreciated currency, but when you have a surplus of those products and you have to force them on the British market or on the auction sales in the city of London, it is impossible to think of compelling the buyer over there to pay for those in Canadian currency and absorb the depreciation in the English pound. These are some of the things that come home to us in our everyday business transactions and we feel that some effort should be made to overcome this great handicap under which we are labouring. I know there are some who will scoff at the idea and say that it is impossible, that it cannot be done. But if we read history aright and study the trend of affairs we will see that it has been done before. There has been for the past eighteen years an arrangement between Egypt and Great Britain under which the money of the two countries has been exchanged at par, and Mr. McGeer in an address at Vancouver last fall stated that this exchange of money between the two countries had taken, place for a .period of eighteen years on a pa.r basis with profit to the governments of both countries. So if suoh an arrangement can be carried out successfully between Great Britain and Egypt I do not see what should prevent some similar arrangement being .made between Great Britain and the other countries of the empire.
Our government claim that they have a favourable balance of trade at the present time. We have always been told that trade balances rule our exchange. Well, if Canada has a favourable trade balance at the present time, the question we would like to ask our friends opposite is this: Why is the Canadian dollar at such a discount to-day? I made inquiry at the Royal bank to-day and they told me that the discount on Canadian money was still 15 per cent. But that is almost aside from the question that we are discussing.
I have another letter under my hand Which I think I should read to the house. Although perhaps aside from the question, the situation complained of seems so unfair that I can hardly believe it is true. As hon. gentlemen know, some of our soldier pensioners are living across the line, and one writes to me as follows:
I wonder if you could help me. I have only earned thirty dollars in more than four years. At the present time I am living on eight dollars per week given by the state of Massachusetts. Two months ago I got $9.60 pension. This month I have a cheque for $14.70. Ottawa tells me it is adjustments. It costs 36 per cent loss to cash a cheque here. Banks will not take Canadian cheques.
This is a Dominion government cheque. You would hardly think that it is possible. He goes on:
I have to get these cheques cashed through a store and it costs me $7.20 out of a $20 pension cheque, and I have to wait two weeks for the $12.80.
That throws a little light on the hardships that are imposed on our soldier pensioners across the line. As I said before, you can talk of restricting trade, but there is nothing in the world that will restrict trade to t'he same extent as a depreciated currency. It simply stifles trade, and the result is conditions such as we have to-day. I think that the unemployment situation which our friends have been discussing in the house this afternoon has in part been brought about by just such conditions. It means a loss of markets; it means a loss to the transportation systems; and if our transportation systems are crippled to-day it is 'because our trade has been stifled by a depreciated currency and high tariffs which will not allow commodities to move. It is no wonder that our business men will not venture out into the open and try to do business under such conditions.
There are many other angles to this subject which have been discussed from time to time, such as the reorganization of our banking institutions to conform to the central banking system. That suggestion has been advanced in this house. It has been discussed on many
214	COMMONS
Stabilization nj Currency-Mr. MacLean
occasions here by the hon. member for Macleod (Mr. Coote) and other authorities on this subject. Then tnere is the question of the issue of dominion notes to one-fifth of the banks' deposits. Some advance that as a cure for our present ills. They claim that if we were allowed to issue dominion notes up to one-fifth of the banks' deposits, that would give us somewhere in the vicinity of
8325.000.	000 more notes in circulation. They claim that there were only 8174,000,000 of dominion notes in circulation in 1930 and that this amount could be very well increased by
8325.000.	000, which would still be quite safe and within the recommendations as submitted by the Macmillan commission when they were investigating similar conditions in Great Britain. However, I am not here to advance any of these suggestions as they are no doubt reforms that our people would hesitate to try.
We are labouring under a severe handicap at the present time, and if we can adopt some more workable scheme without endangering or disturbing our present financial arrangements, which have been giving good service to the country, I think we should look into the question and endeavour to bring about some improvement. I have under my hand a work by Mr. J. F. Darling, C.B.E., entitled A New Money to Unify the Empire. If I may be permitted, I should like to read a short extract, as it will place before the country at least one way in Which our present difficulty might be met. He says:
In suggesting a new money unit wherewith to unify the empire, it is not necessary to consider the creation of either a new coin or a currency note which would pass current throughout the empire. Britain, South Africa, Australia, New Zealand and the Irish Free State would still retain their pounds each, as, at present, a separate monetary unit; Canada would retain its dollar and India its rupee. In short, with the exception of the gold sovereign where it still circulates, existing currencies in the empire would continue to function practically as they do now.
What is suggested is a new unit which would link up these various currencies by forming a common basis on which each would be issued. This new unit need not be composed of either gold or silver, nor yet of an amalgam of the two metals. It would be found to act more efficiently and economically simply as a "money of account," or, in other words, as the money in which a super-bank of the empire would keep its accounts.
This super-bank could be called the "Bank of the Empire." Its customers would be few, but tremendously important. They would comprise the Bank of England, the government of India, the Canadian government and the noteissuing banks of Canada, the Reserve bank of South Africa, the Commonwealth bank of Australia, the Bank of New Zealand and other note-issuing banks in that dominion, and the

Currency Commission of the Irish Free State. These are the primary issuers of currency in the various parts of the empire. In each case- with the exception of India, where the reserve is largely silver-it is enacted by the respective governments that a given proportion of gold or gold assets should be held against the currency issued. Legislation would therefore require to be passed by each of the governments concerned permitting a balance with the Bank of the Empire to replace gold for all reserve requirements. That is to say, just as a London clearing bank regards its balance with the Bank of England as part of its cash reserve, so would the Bank of England itself regard its balance with the Bank of the Empire; and the same would apply to the other note-issuing banks and governments.
A most appropriate name for this new imperial money would be the "rex." The rex would be created for the exclusive use of the Bank of the Empire as the money in which it would keep its accounts.
The Bank of the Empire would be prepared to "buy gold at a fixed minimum price, paying for it in rex by crediting one or other of its few but important customers with the proceeds. It is suggested that this minimum price should be one rex for 113 grains of the fine gold, which is the gold content of the sovereign. The sovereign-the symbol of the pre-war gold standard-would cease to be coined. In place of the right, in countries where such still exists, to take gold to the mint to be coined into sovereigns, there would be substituted the right, which would be extended to all parts of the empire, to take gold to the Bank of the Empire to be paid for in rex-that is to say, in a balance at the Bank of the Empire-at 113 grains of fine gold per rex. The currencyissuing banks and governments, being the only customers of the Bank of the Empire, would act as agents for the bank in the purchase of gold, just as in pre-war days the Bank of England acted for the Royal Mint.
It is important, however, to note that it is the rex. and not the gold, that would become the basis for the currencies of the empire, and that the rex would thus constitute a new standard of value. The full significance of these fundamental changes will be better appreciated at a later stage.
It appears that this gentleman has gone into the matter thoroughly and has submitted, in a very able work which he has published, the suggestion for one bank. as a clearing house for the whole of the British Empire and this new money, the rex, to be used not in the different countries but just in connection with the clearings of this bank.
In the address given by Mr. McGeer at Vancouver on October 30, 1931, I find the following:
What the empire needs is the establishment of the money exchange system now in operation between Egypt and Great Britain for Canada and Great Britain and all other nations which comprise the British Empire (i.e.), a system that has maintained between Great Britain and Egypt, a perfect par exchange for over 18 years, at a profit to both governments.

Stabilization of Cwrency'

Mr. Rhodes
Another splendid work on the stabilization of the dollar is one by Fisher, but I shall not take the time of the house to read it.
I should be the last one, Mr. Speaker, to suggest any move which would in any way disturb the present financial structure of our Canadian banking system or, for that matter, the banking system of Great Britain as a whole. Our Canadian banks have given wonderful service. They have stood the strain and stress of difficult times, and, generally speaking, the people's savings, with very few exceptions, have been safe in them. Today, however, we see a different situation looming on the horizon, and it may be that some way will have to be found to meet the conditions with which we are confronted. As Mr. McGeer stated:
Six months ago Canada was concerned about the man who was unemployed; those people who had property and business and interest bearing securities were not worrying. But to-day the saleability and negotiability and the shrinkage in market values of these securities have now changed the situation.
We do not know what the future has in store for us. I submit, however, that at the coming Imperial conference this question should be thoroughly discussed. I know we will hear from the Minister of Finance (Mr. Rhodes) and other leading economists in this house, hon. gentlemen who have made a study of finance, and I believe if something could be arranged to remedy the present situation and do away with some of the disabilities under which we are labouring, a great good would be effected. To my mind the time is ripe for the consideration of this matter.


Edgar Nelson Rhodes: Mr. Speaker, I think I should say a word rather than have the motion disposed of with only the remarks of the mover (Mr. MacLean) before us. Perhaps the very silence in the house following the speech of the hon. member who moved the resolution bears eloquent testimony to the fact that there are not very many who are prepared to jump into a consideration of the question put forward by my hon. friend from Prince. The fact that there appeared to be no desire on the part of any hon. member to speak would seem to bear witness to the truth of the statement my hon. friend made at the outset of his remarks, to the effect that the subject is highly complicated. With all respect to him may I say that I do not quarrel with his initial statement to the effect that he was dealing with a subject with respect to which he knew very little. In fact, Mr. Speaker, if
I may say so again with respect, as he proceeded with his remarks I was reminded of the comment of Mark Twain that everybody complains about the weather but nobody seems to do anything about it. With all deference to my hon. friend I agree that he has propounded a very serious and important question, but, with further deference, I cannot say that he has contributed anything to the elucidation of it.
Having been Minister of Finance for some twelve days I bring to the subject all that wealth of wisdom, assurance and knowledge which is possessed only by extreme youth. Consequently I never expect to know so much about finance or subjects of exchange and empire currency as I do at the present time. Notwithstanding that wealth of knowledge which I now possess, as a youthful Minister of Finance may I say to my hon. friend that I find this subject almost as baffling as, apparently, he does. At the outset of my hon. friend's resolution I find the expression: "if the empire is to become an economic unit." In other words he predicates his resolution upon the assumption, I take it, that the empire should become an economic unit.


William Lyon Mackenzie King: No.


Edgar Nelson Rhodes: I do not know the interpretation my hon. friend vishes to place upon that first paragraph. I submit that he said not one word with respect to that part of the resolution, which to my mind is a rather striking omission. If it bears the importance in the resolution which one might naturally expect, having been drafted with the care and deliberation my hon. friend must have given to it, one might have expected at least some mention of it.
The burden of my hon. friend's remarks consisted of a complaint as to the handicap under which we in this country labour as a result of our unfavourable exchange position as compared with the neighbouring republic, the United States. He instanced the fact that his worthy constituents in the province of Prince Edward Island have suffered because they have to sell their black fox pelts at a lower price than they would have received had there been parity of exchange between the United States and Canada. He also instanced the rather pathetic case-with which we could all sympathize-of the returned soldier who receives his pension in Canadian funds and has to cash his cheque in the United States. But, Mr. Speaker, those two cases have nothing whatever to do with the subject matter of the resolution of my hon. friend. Even if a parity of empire currency
216	COMMONS
Stabilization of Currency-Mr. Rhodes
could be brought about, it would have no reference whatever to the exchange of countries other than those within the empire.
This subject is not new. As a matter of fact in the course of the afternoon I chanced to come across a pamphlet containing a report on Empire Monetary and Financial Policy by a joint committee of the Federation of British Industries and the Empire Economic Union. That committee consisted of some very eminent men indeed. For example the Empire Economic Union was represented by Right Hon. L. S. Amery, M.P., Right Hon. Sir Robert Horne, P.C., G.B.E., K.C., M.P., Sir Basil Blackett, K.C.B., K.C.S.I., and Mr. H. G. Williams, M.Sc., M.I.C.E.; the representatives of the Federation of British Industries were Sir Frederick Williams-Taylor, that distinguished Canadian financier, now in England, for many years general manager of the Bank of Montreal, Sir William Larke, K.B.E., Sir Roland Nugent, and Mr. R. G. Glenday. If one cared to peruse this pamphlet he would find at page 20 two or three paragraphs dealing with the very subject brought forward by my honourable friend. But the significant feature is this, that these men whose lives have been largely concerned with finance, banking, exchange and world currency, while they raised the question they offered no solution. Therefore I am sure my hon. friend will not expect me to move too rapidly in offering a solution of this very important question that he has propounded tonight.
And this subject is not new so far as empire conferences are concerned. It was raised at the Imperial economic conference of 1923 at the instance of New Zealand, and certainly the financial wisdom represented on that occasion was unable to offer a solution of the problem other than to suggest that inasmuch as the various countries of the empire were rapidly approaching a gold standard the solution was to be found in that circumstance.
Now, sir, so far as we are concerned-and I think I can speak for the government in this respect-we find no fault with the concluding portion of the hon. gentleman's resolution, namely, that the stabilization of exchange would be of the utmost value in promoting and in continuing inter-empire trade, and I think we are also prepared to agree with him that the subject is of sufficient importance to be included in the agenda of the Imperial Economic conference. Looking at the resolution in that light, I think we can accept it. I can only assure him that this government, as I am confident would be the case if any other government were in office, 
is prepared at the Imperial economic conference to discuss this or any other subject with the purpose of pooling our ideas in order to arrive at a solution that will serve to promote inter-imperial trade.


William Irvine: I quite appreciate, Mr. Speaker, that I am entering on ground where angels may fear to tread, nevertheless I am pretty nearly an angel myself.


An hon. MEMBER:: Question!


William Irvine: I did not say what kind of
angel; perhaps my hon. friend would object were I too specific. I may say that I was instructed by my group to put on the order paper a resolution somewhat along these lines. I did so, but through a mistake on my part I lost my favourable position on the order paper, and so take this opportunity to discuss the present resolution.
I think the hon. member for Prince (Mr. MacLean) is to be congratulated on his splendid courage, and also for provoking a discussion which should be of very great importance and benefit to this house and even to the government. Although I have no doubt that the government is very wise and well versed in all the mysteries of finance, still I do not think it can ignore a suggestion from the house. So I think this is an opportunity we should embrace, in view of the coming Imperial economic conference, to deal with a subject that is of fundamental significance to the economic difficulties of empire.
So far as the resolution is concerned, I agree with the hon. Minister of Finance (Mr. Rhodes) in the exception which he took to the fact that stabilization is predicated upon the empire becoming an economic unit. Now, sir, it is rather astonishing that the hon. gentleman who last week indicated that the Colorado beetle had prevented the economic unity of the empire should be the one to bring in a resolution predicated on that very disunity. The mere fact that the Colorado potato bug can upset the unity of the empire is in itself a sufficient reason why the stabilization of currency should not be predicated upon anything of that sort.
I think we will all agree with the importance of the stabilization of currency within the empire, but in my opinion the resolution should have gone a little bit further and made some suggestion as to the probable basis upon which such stabilization should take place. It would be possible to stabilize the currency of an empire or the currency of a nation and make it worse because of its being stabilized.

Stabilization o) Currency-Mr. Irvine
We all appreciate at the moment the necessity for the stabilization of currency, but unless we have some assurance that the basis upon which the stabilization shall take place will be worth while and sound and sane, then we had better not have stabilization at all.
Before I sit down, Mr. Speaker, I intend to move an amendment to this resolution, seconded by the hon. member for Acadia (Mr. Gardiner), which will set forth the principles on which we believe stabilization should take place. In dealing with this subject perhaps I might be pardoned if I remind the house that the very first speech I made some ten or eleven years ago was on the subject of finance. As the Minister of Finance has just said, sarcastically about himself, I knew more about the subject then than I do now; I am quite willing to admit that; nevertheless I was not entirely ignorant of some of the points in connection with it, although I probably was the only one in the house that believed so at that time. Perhaps I should point out that on that occasion I urged monetary reform, and I think I have urged it every year since I have been here. I urged that Canada should not return to the gold basis but should abandon it, and I predicted, if you please, very much what has come to pass in Canada and in the world since that time with regard to the economic situation. I might add that on that occasion I was laughed at, particularly by the front benchers of that day. One hon. gentleman went so far as to offer to make me king of Canada if I would settle some of the great financial questions with which I had been dealing. That was all very fine, but there is no one in this house who will laugh at what I am going to say to-night, because to do so would expose an ignorance which no hon. member would wish to own.
As I say, I was laughed at by the front benchers on that occasion prior to the last revision of the Bank Act. I had secured the sanction of this parliament to conduct an investigation into the basis, function, and control of financial credit prior to the amendment of the act; I thought it would be wise for us to have a review of the entire financial situation before we approached the revision of the act, and we got that resolution passed through parliament. However, while we spent a good deal of time in that investigation of credit, and while we had some very eminent men give evidence before that committee, the material we obtained was quietly buried. We never heard anything more about it, and the investigation went for practically nothing.
But since that time great events have taken place; a tremendous body of opinion has gathered in favour of financial reform; economic upheavals have swept across the world as a direct result of weaknesses in the financial structure of the world; a tremendous literature on modern finance has piled up in libraries; influential committees throughout the empire have given their views, in no uncertain terms, as to the necessity of the abandonment of the gold standard, the organization of a financial system upon a strictly scientific basis, and the substitution of a managed currency for an unmanaged accident of stupidity known as the gold basis.


Richard Bedford Bennett: Might I ask the hon.
gentleman a question, without desiring to interrupt him? What does he mean by a managed currency? Various financial men use that term in different ways. Could the hon. member tell me what he means without interrupting the course of his address?


William Irvine: If the right hon. gentleman will permit me to do so I will refer to that under another heading. Probably I will quote fiom the Macmillan report and also from the report referred to by the Minister of Finance dealing with that very point. But for the moment let me say that civilization itself is in imminent danger, largely as the result of a financial policy which I shall characterize as ignorantly conceived, blindly followed and wantonly applied. So we have the condition which is confronting us at present; it could not have been otherwise under the circumstances, and to-day I urge that something fundamentally constructive must be done quickly if disaster is to be averted.
A few years ago, Mr. Speaker, perhaps a generation ago, the governments of the world had a tendency more or less to ignore the economic unity of the world, the interdependence of the various nations in economic matters, but to-day I think there is a tendency to go in the other direction and to say that our problems cannot be solved because they are all international in character. The truth must be found somewhere in between those extremes. I think there can be little doubt that questions of tariff, of disarmament and of finance can be more adequately handled internationally than they can be handled nationally. I believe in respect to tariff that the free traders of to-morrow will have to make their appeal to an international court, because these questions cannot be finally settled by any one nation. An appeal to an international court must be made also in respect to disarmament, and ultimately some international body
218	COMMONS
Stabilization of Currency-Mr. Irvine
will have to settle the question of finance as well. But when that is admitted we have to admit also that the time is so short and the disaster so imminent that we cannot afford to wait until all the nations of the world come to an agreement on matters of finance. I may be wrong in this, but I am assuming that the attitude of mind to be found in the British commonwealth of nations is such as to make some practical advance possible in matters of finance. That being so, we ought to embrace the opportunity which will be afforded by the Imperial conference to discuss these matters and, if possible, make some headway in respect to them; because if we wait until all the other nations of the world, and especially those who have become gold minded, since the war, get ready to assist us, I am afraid we shall have to wait too long.
I have this conviction, Mr. Speaker: that there is sufficient intelligence and good will in the British empire to reconstruct our own financial system on a sound, proper basis. If other nations wish to drown themselves with golden millstones around their necks, let them do it. To find within the confines of the British empire all that is required to maintain the highest possible standard of living in modern times, yet lacking the financial genius to bring these things to the consuming public, would be a bad thing to be said about the statesmanship of the British empire. I hope it will not have to be said; I believe there is a way out, and I believe the Imperial conference will find that way. Canada has had a great deal to do with that Imperial conference; I think Canada will be given a good deal of the credit for it, and perhaps for a good many of the things that will be discussed. I hope Canada will take the lead in this matter also, and that this greatest of all modern questions, the question of finance, will be up for discussion.
I need not emphasize the advantage to Canada and Great Britain at the present time of the stabilization of currency. Briefly stating it, I think the rate of exchange on the pound in Montreal to-day is 83.97, while in New York it is 83.45. This means that on every carload of wheat and every shipment of live stock which the western farmer gets into the British market he loses 90 cents on the English pound. Under present world conditions, and with prices as they are to-day, to add 90 cents to that makes it a disastrous thing indeed, and no doubt our export trade with Great Britain would fall very considerably following the collapse of the pound sterling. So that there is not much use in the Prime Minister or the Minister of Trade and Com-

merce securing better markets in Great Britain for our goods by better tariff arrangements when we find that the difference in exchange nullifies all that they have been able to do. I think it will be admitted even by the government that if w'e could find any way of putting our money more nearly on a parity with that of Great Britain it would be of great advantage in our export trade. I would go so far as to say that we should be better off to-day if our money were stabilized at the value of the British pound.
But, I shall be asked at once, what would happen in the United States? Well, what would happen in the United States? I understand that Canada has been meeting her obligations there so far with gold; I presume that was -what the Prime Minister, when he was Minister of Finance, meant when he said that Canada was still on the gold basis. It meant that we were honouring our obligations internationally by paying in gold. If that is so, the honour would be in no way impaired if our dollar were worth 25 cents less than it is. Moreover, our export trade to the United States would be increased because their money would buy more in Canada than it would anywhere else, and we could find a good market in Great Britain because our money would be on a parity with theirs. I will not spend any more time emphasizing the importance of stabilization of British currency on a parity. All will agree on the advantages, if it could possibly be brought about.
In this connection I want to refer to the report of the joint committee of the Federation of British Industries and the Empire Economic Union, dated October 14, 1931, and perhaps also, if I have time, it might be well for me to refer to the report of the committee on finance and industry usually called the Macmillan report. I shall quote this briefly on certain points which I intend to argue. The committee on economic union, I may observe in passing, was composed of the following:
Sir Basil Blackett, K.C.B., K.C.S.I.
Right Hon. L. S. Amery, M.P.
Right Hon. Sir Robert Horne, M.P.
Mr. H. G. Williams, M.Sc., M.I.C.E.
The members of the Federation of British Industries included Sir Frederick Wiiliams-Taylor. I think that is the same gentleman who was president of the Bankers Association in Canada when there was being considered by a committee of this house a resolution dealing with credit matters. I can truly say, if he is the same gentleman, that he has given his O.K. to almost everything in this

Stabilization of Currency-Mr. Irvine
report which at that time he opposed in that committee. That is not a criticism; indeed,
I am going out of my way to compliment him upon having, during the intervening years, come to a better frame of mind. And I might suggest that if Sir Frederick Williams-Taylor has changed his mind in that time there is no reason why any gentleman in this house should fail to change his in the same time and on the same subject. The other members for the Federation of British Industries are:
Sir William Larke, K.B.E.
Sir Roland Nugent.
Mr. R. G. Glenday.
The next thing I want to refer to is the finding of these economists that the chief cause of the crisis is the monetary system. The committee does not say it is the only cause, and neither do I. But the personnel I have mentioned do hold that the chief cause of' the crisis to-day throughout the world is the breakdown of the monetary system. The report states:
The want of a proper standard of purchasing power is the chief cause of the survival of the monstrous fallacy that there can be too much produced of anything.
We agree with the conclusion of the Macmillan committee that the present world economic crisis is primarily a monetary crisis. And the report further says that the recent unparalleled fall in prices has been due in the main to a shortage of gold. The story of this disastrous deflation which has brought us to the present economic impasse began with the return to the gold basis after the war, Great Britain taking the lead. The Macmillan report mentions this fact as the main part of the explanation of the depression, or what is sometimes called the crisis.
Merely because a committee says that the monetary crisis is the chief cause of our difficulties does not, of course, prove it beyond any possible doubt, and I have no time, seeing that the clock is moving so fast, to argue all the details. I am glad, however, to have such an authority as this committee to quote in this respect, for it saves me much of the argument. Personally I have no doubt about the matter. I believe that in the British countries to-day, not to speak of others-and they are all the same-our monetary system, having up to this time been limited or controlled by the gold standard, in respect to both currency and credit, could not possibly have any real relation to the economic necessities of the case. If necessary I will demonstrate in a few moments just what I mean by that. Gold
is not controllable-and this will answer in part what the Prime Minister asked me- because in the first place you do not know how much of it you can find next week or next year, and therefore it has no relation to the amount of goods which will be in readiness, waiting to be distributed by money, which can be issued only on gold so long as we maintain the gold basis. Next, you have no control of gold because even Great Britain could not prevent other countries from bleeding her white of a commodity of which the empire produces 70 per cent of the entire output of the world. That is what I mean when I say that it is not controllable.
If we can find a means of stabilizing British currency on a basis other than gold, then it will be in control of the nations of the empire concerned and they will not be subject to being bled to death by those who wish to drain them from outside. Furthermore, such a basis would always have an intelligent relation to the requirements of money which would be developed by the natural evolution of the industrial process. I believe that the end in view can be attained by the British commonwealth. I say frankly that I do not think it is possible to do it in any other way.
I do not think we can look forward with any hope of such action being taken internationally in the near future. There exists no international body to-day with either the authority or the intention to handle the financial questions of the world. But there does exist an imperial body; or, if you wish to put it in more modern terms, the nations of the British commonwealth have found a way of getting together to cooperate for their own economic and sentimental interests. These nations have the good will and, I believe, the ability, and certainly they have the necessity,, to take action on this matter, and while it is quite likely that the question cannot be settled by them completely, ignoring all the rest of the world, it can be settled sufficiently well to prevent disaster in the empire. In the hope of a satisfactory arrangement of the empire currency, I would urge that the government at least indicate that it is willing to give consideration to the matter with that hope in view and to assist its consideration before the Imperial conference.
In regard to the empire taking action in this matter, the committee's report to which I have just referred has this to say in respect to gold in a monetary sphere:
An imperial sterling currency, so adjusted as to maintain reasonable price stability for the British Commonwealth, and so powerful as to govern, through the external trade of that
220	COMMONS
Stabilization of Currency-Mr. Irvine
commonwealth, both the value of the metallic medium of exchange and, indirectly, the value of the currencies of the rest of the world,-a pax Britanniea built up out of the present anarchy in the world's monetary affairs.
In another place the report says:
There is no insuperable difficulty in securing the desired end if once its importance is recognized by the governments concerned and the political will to achieve it becomes manifest.
I hold that view; I think the committee was right when it said that, and that is why I am urging to-night that our government should give consideration to this suggestion. Referring to the managed currency, the committee says:
Such management aimed at counteracting the serious economic, social and political effects of price instability, may be a difficult and delicate, but should not be an impossible task. Even if the ideal solution might be attainable only by a degree of international cooperation which is not yet in sight, much can be done by a great and wealthy community like the United Kingdom, and still more by so immensely powerful a group of communities as the British Empire, to shelter its own citizens from the worst effects of world monetary fluctuations and, indeed, to bring those fluctuations under some measure of control. Nor need such a policy of national and imperial monetary control interfere with the endeavours to improve international cooperation in this field.
My next point is that Canada should take the ground that the gold standard should be abandoned. This committee also has the following interesting statement:
The rigid linking up of gold and currency which compels the contraction of domestic credit because some quite fortuitous circumstance, like an American boom or a Paris panic, withdraws our gold, and only enables domestic expansion to take place when the foreign exchanges are favourable, are obvious objections to a system which is no longer required in order to maintain public confidence.
That is not t'he member for Wetaskiwin speaking; that is a committee of notables with numerous letters after their names, whose names I have just read to the house, gentlemen of unimpeachable integrity and of great economic knowledge. They go so far as to say that we do not require any longer to have a metallic basis of any kind to establish public confidence.


Richard Bedford Bennett: That does not deal with international balances.


William Irvine: 
Mr. M. N. CAMPBELL (Mackenzie):: 
Mr. GEARY:: Would the hon. member
permit a question?


Milton Neil Campbell: Certainly.


George Reginald Geary: My hon. friend said that if
the currency were raised to twice its present
224	COMMONS
Stabilization of Currency-Mr. Campbell
imount, the price of commodities would increase to an equal degree; therefore a farmer getting twice the amount of currency for the commodities he sells would have to pay twice the amount for what he buys. I ask my hon. friend how that would improve conditions, and how the farmer would profit thereby.


Milton Neil Campbell: The principal problem
in the world to-day is debts, not merely reparations and war debts but public and private debts as well. My hon. friend from Wetaskiwin explained that. The trouble is that those debts were contracted when currency was at a certain level. The currency has been deflated to a point where the dollar is worth twice as much, and the debt is doubled. A farmer who borrowed money on his farm in 1929 is called upon to-day to pay back two or three times the commodity value of what he borrowed at that time. What we want to do now is to devise some system which will bring us back to the normal price level, and a system whereby we can pay these debts.


George Reginald Geary: My hon. friend is arguing
only in regard to debts, and not in regard to exchange values.


Milton Neil Campbell: Not entirely. Debts
affect the whole business structure. One of the great impediments to the normal condition of business in the world to-day is the burden of debts, and those debts have been increased tremendously. Debtors have found it impossible to pay because of this deflation.


George Reginald Geary: I am very much obliged
for the opportunity of asking the question; I just wished to hear my hon. friend in that connection.


Milton Neil Campbell: It might not have any effect as between commodities. But when Germany made the arrangements for payment under the Young plan the commodity level then perhaps justified the Germans in undertaking the obligation to pay those amounts. The committee that recently examined the question of those reparations reported that Germany under the changed price level would now be called upon to pay three times the amount she had become originally obligated to pay. That is what we are all suffering from to-day.
Now I wish to point out something that I think is going to have a profound effect upon the whole situation, not merely the stabilization of monetary value within the empire, but throughout the whole world. In the United States they have deflated the dollar until it is a long way below, or above-whichever 
way you want to look at it-the normal gold level. That is to say, in the United States normally they require 40 cents in gold behind every dollar in circulation; to-day they have 80 cents. In other words, they have doubled the amount of gold they actually need behind their circulating mediums. What has been the effect? It means that the standard of measurement of the gold basis has been changed altogether. That, I think, is the reason why Great Britain and many other countries had to go off the gold basis. Canada is really on the normal gold basis to-day, but because the United States have deflated their dollar until it is much more valuable than the normal gold basis, we have not been able to follow them and our dollar is at a discount in New York.
What has happened in the United States? There you have another case of King Midas. The United States with the greatest amount of gold of any nation in the world, their vaults full of gold, found they could not eat their gold, could not make clothes out of it, could not even turn it into useful tools. But coincident with this immense reserve of gold they have the greatest amount of agricultural distress and industrial unemployment that has ever prevailed in their history. Now President Hoover has come out with a scheme which I think will be a partial corrective. A recent newspaper despatch refers to it as one of the greatest inflations in history. A despatch from Washington of February is headed:
Permit Inflation of U.S. Currency
Sensational Rise in Commoditj Prices is Forecast.
Then follows the despatch:
The United States government moved to-day to permit inflation of the American dollar. Senator Carter Glass, Democrat, Virginia, introducing a government measure permitting the Federal Reserve to "make advances to member banks on time, demand, or promissory notes," announced the bill was not for "excessive inflation of currency."
In fact, the bill would permit the federal reserve board to use its surplus stocks of gold -at present the dollar is backed by 80 per cent gold, whereas the legal limit is 40 per cent-to provide currency in exigency.
The first result of the government's move forecast in this morning's papers was a sensational rise in commodity and security prices.
Ogden L. Mills, Secretary of the Treasury, and other government officials, strenuously contended to-day the step should not be called
"inflation" but rather counter-deflation. It is the government theory that prices are too low and that recovery is prevented by the psychology of the country.

Privilege-Mr. Mackenzie King
As I said a moment ago, I think before very long we are going to see the greatest inflation in the history of the United States. That means the United States dollar will go down in value, and probably by the middle of next summer, or before, our Canadian dollar will come back to par in New York. But I would warn any of our Canadian statesmen not to boast of that as a result of their own efforts; it would simply mean that the American dollar has come down to meet the Canadian dollar.
I hope so. It will help to correct some of the evils here. It is more than possible that the American dollar will go down below our own, and in that case I would suggest to the government that they follow the line of the American administration and permit inflation to the same extent. The American dollar may go down to where the British pound will come back to par, in which case it will solve a good many of our international problems. I think the government should carefully watch this and not be too much afraid of what we call "inflation." Inflation, as one newspaper has said, is not the right word. The United States have "dehydrated" their dollar to the point where it is worth more than the normal gold dollar, and now they are only bringing it back to its former value. A few years ago some of us in western Canada were very much exercised over the fact that the terminal elevators were drying out our damp and tough wheat to such a degree that it became a concentrated wheat and more valuable than wheat which normally contains 12 or 13 per cent moisture, and the millers would pay a great deal more for it. We objected to that. The United States authorities have done precisely the same thing with the dollar-they have dried it out, they have dehydrated it to the point where it is more valuable than the normal gold standard value. I hope the government will watch the situation in the United States and try to keep in line with their policy.
On motion of Mr. Spencer the debate was adjourned.



ADJOURNMENT-BUSINESS OF THE HOUSE

Richard Bedford Bennett: At this hour, perhaps,
Mr. Speaker, we had better adjourn rather than call the next motion.
It is proposed to-morrow to take government orders, and after that supply-public works, trade and commerce and justice. They will be taken up in this order.



PRIVILEGE-MR. MACKENZIE KING

William Lyon Mackenzie King: Before the house adjourns, Mr. Speaker, may I direct the attention of my right hon. friend to what I think must be an error on his part, either a very simple one, or as he said a few days ago, one made with malice aforethought, though I do not for one moment indicate that such is the case. At the adjournment of the house Friday last my right hon. friend is reported in Hansard as having said:
As I explained, some of the opposition members desired to be present when bills were read the second time, and they have stood.
I have been unable to find in Hansard any previous reference by my right hon. friend to bills standing, and I do not find that any member of the opposition asked for bills to stand.


Richard Bedford Bennett: "Some hon. members,"
without the "opposition" would be the correct statement.


William Lyon Mackenzie King: I am very glad of that correction, because as Hansard reads it appears as if some opposition members were responsible for bills not having been proceeded with.
While on my feet, as a matter of privilege, and in order to clear up a misunderstanding, I may perhaps be allowed to refer to the incident that took place the other evening when my right hon. friend mentioned that in my speech at London I had made a statement which was not based on the evidence-


Richard Bedford Bennett: Hear, hear.


William Lyon Mackenzie King: -in reference to his not having permitted a contribution to be accepted from Beauharnois. My right hon friend said that in the evidence it was never suggested by any person that a sum of money had been paid to (he federal Conservative party by Beauharnois. I had not the evidence at hand at the time the Prime Minister spoke, but I felt perfectly sure that the statement I had made was based on the evidence. I have since looked up the evidence, and my right hon. friend will find it in the Journals of the House of Commons, Canada, volume LXIX, 1931, appendix No. 5, page 822. Mr. Sweezey was giving his evidence, and Mr. White was questioning him. These are the questions and answers:
Q. And then who else if anybody?
A. Well, still speaking of federal campaign funds, I do not recall of any specific-oh, yes, I



Privilege-Mr. Mackenzie King
contributed to General McCuaig, who, I understood, was the collector for the Conservative campaign fund in Montreal.
Q. How much?



A. $10,000.

[Stage Direction]
Q. Anybody else?
Mr. Lennox: You did not treat us very generously.
Then a little later on the same day he said:
Q. Have you told us all of the federal contributions ?
A. Yes, sir.
I submit that the reference there is to federal contributions, and that there is a direct statement made by Mr. Sweezey that he made contributions to the collector for the Conservative campaign fund in Montreal, indicating that he had in mind that he was the collector for the federal party.
Richard Bedford Bennett: There is no such reference. It says "in Montreal."


William Lyon Mackenzie King: The reference is very clear.


Richard Bedford Bennett: It is not.


William Lyon Mackenzie King: As my right hon. friend says, we are in the judgment of our peers. The answer is:
A. Well, still speaking of federal campaign funds. . . .
Those are Mr. Sweezey's words.
... .1 do not recall of any specific-oh, yes, I contributed to General McCuaig, who, I understood, was the collector for the Conservative campaign fund in Montreal.
Then a Conservative member on the committee, Mr. Lennox, speaking to Mr. Sweezey, is reported to have said:
You did not treat us very generously.
The word "us" must have meant the federal party. Those were the references I had before me when I made the statement that the contribution had been made to the federal fund. Certainly I was not trying to do the Prime Minister an injustice as to his having returned any contribution; I was making the point that he had returned it. My point was that the reason he did so was not that it was in the public interest so to do, but that he expected to have an investigation and therefore was not going to accept any funds in the interval, which did not seem to me too exalted a reason.
Now may I just say to my right hon. friend that I do not think I am any more inclined to do things with malice aforethought than he is, nor do I think I am given to making statements about other people with a view to doing them deliberate injury.


Richard Bedford Bennett: That is nat a question
of privilege at the moment.


William Lyon Mackenzie King: My right hon. friend may stop me if he wishes to do so. I say that in view of the statement I have given to the house as to the basis of my remarks, his statement that I had made a statement which was false or which I should have known was false and was therefore wilfully negligent in the discharge of my duty, was wholly uncalled for and unworthy of him. I have just pointed out where, at the close of the session on Friday, he made the deliberate statement that the opposition had been responsible for certain bills not being gone on with. He now says he did not say anything of the kind.


Richard Bedford Bennett: I did not say that. If it is in Hansard I must have used the words.


William Lyon Mackenzie King: My right hon. friend says he did not mean what he said, and I accept his word like a gentleman. I think my right hon. friend might be equally gentlemanly in accepting the word of those who speak from 'this side.


Richard Bedford Bennett: Mr. Speaker, the right hon.
gentleman has raised a question of privilege with which I shall deal at once. His statement at London, Ontario, was with reference to $200,000; it was with reference to General McRae; it was with reference to the treasurei of the Conservative party. The observations just made bring to mind the words of a British statesman with respect to a similar matter. He said, "It is unworthy of any man who calls himself a statesman, and only of a pettifogging attorney." Those were the words used with respect to a similar matter. Every member of this house knows what was said last year; my right hon. friend knows what the evidence shows, and I will take occasion to Tead the statement he made at London and compare it with what he now says. Then I hope he will make the amende honorable to this house, 'the members of whom are his judges. Then he will not stand here and endeavour to divest himself of responsibility for what he said at London with reference to a matter which was not at all the subject matter of his address on that occasion.
Motion agreed to and the house adjourned at 10.55 pun.

Privilege-Mr. Bennett
Tuesday, February 16, 1932