Mr. E. J. YOUNG (Weyburn):: Mr. Speaker, 'on, Friday last the following notice appeared in votes and proceedings in my name:
On Monday next-that the fourth report of the select standing committee on hanking and commerce, on the reference as to the price of gasoline, be concurred in.
A word of explanation is due the house as to why I, who was not even a member of the committee, should take it upon myself to move concurrence in the report. This is my reason. I was very anxious to have the report brought before the house. Under the rules it is necessary that forty-eight hours' notice be given before concurrence be moved. We were coming so close to the end of the session that I thought on Friday unless notice was given before the end of last week it would be impossible to have concurrence moved this session. I endeavoured to get in touch with the chairman of the committee to find out what his intentions were, but could not locate him. So I took it on myself to put on the order paper the notice which I have read. Terms of the reference are as follows:
That in the opinion of this house the price of gasoline to the Canadian consumer has for some time past been too high, and that this
[Mr. Rhodes.)
matter should be referred to the select standing committee on banking and commerce to investigate and report.
The question submitted to the committee was this: Are we paying too much for our gasoline; and if so, why? If we are paying too much for our gasoline, the committee reckoned that somebody, either our refiners or our distributors, must be getting too much for their services, and that is what they under- ' took to investigate.


Mr. BENNETT:: Mr. Speaker, in view of the fact that this is a sparse house and we could proceed with other matters, the hon. gentleman might adjourn his speech and go on with it to-morrow, on motions.


Edward James Young: That is satisfactory to me.


Richard Bedford Bennett: If he will adjourn the debate I think it would expedite matters.


Edward James Young: I move to adjourn the debate.
Motion agreed to and debate adjourned.



LAND SETTLEMENT

Hon. W. A. GORDON (Acting Minister of Immigration and Colonization):: I desire, Mr. Speaker, to lay on the table of the house the information asked for by the hon. member for South Perth (Mr. Sanderson) with respect to land placements in the province of Ontario by counties. Accompanying the return are letters from the commissioners of colonization of the Canadian Pacific Railway and the Canadian National Railways. These letters indicate that the railways, not having kept the information in the form desired by the hon. member, are not in a position to furnish it. With respect to the department, they have not kept the information in a way that would make it easily available by counties, but it is only fair to the hon. member to say that I showed him the list as kept by the department, giving the name of the individual, the wages and the address, and I believe that after reviewing it his fears in a general way as to the accuracy of the statements which have been made have been dissipated. The return whioh has been prepared, so far as the department is concerned, after a good deal of labour and time, will,
I think, check out to within a very few in number of those contained in the information I have heretofore given to the house. There is a slight increase because the return covers a period a. little longer than up to the first of May when the matter was raised in the house.

Questions



BANKRUPTCY ACT AMENDMENT

[Stage Direction]
Mr. JOHN T. HACKETT (Stanstead): Mr. Speaker, I beg to move, seconded by Mr. Turnbull:
That Bill No. 36, an act to amend the Bankruptcy Act (locality of debtor), be withdrawn.
Mr. SPEAKER:: Bj' consent of the house.
Motion agreed to and bill withdrawn.



QUESTIONS

[Stage Direction]
(Questions answered orally are indicated by an asterisk!.

Mr. DUPUIS:: 1.	What are the names and addresses of the persons who testified at the inquiry held by the Post Office Department, in connection with the case of Noel Fontaine, postmaster of Laprairie, Quebec, on February 27, and March 16, 1931?
2.	Did the following persons testify at that
inquiry:	Miss Jeannette Cedilot, Mrs. Paul
Bonne'terre (nee Angeline Dupre), Messrs. Samuel Racine, Wilfrid Ste-Marie, David Racette, Emilien Lamarre and Mrs. Arthur Lamarre (nee Noella Fontaine), all of Laprairie?
3.	If said persons were heard as witnesses by the commissioner holding the inquiry, why do their names and the evidence given not appear in the report of said commissioner as tabled in the house by the lion. Postmaster General, as "sessional paper No. 198" dated March 22, 1932?
4.	Does the original report of said commissioner mention the evidence given by the persons above enumerated in second question?
5.	If so, is the government aware that said names were left out?
6.	Why were they left out?
7.	Why did said commissioner not mention them in his report?
8.	Is the Postmaster General aware that the evidence given by the above mentioned persons is entirely favourable to the postmaster of Laprairie?


Mr. SAUVE:: 1.	According to the report of commissioner, the following persons gave evidence: Arthur Dufort, Joseph Ste. Marie, Oliva Lefebvre, Joseph Chouinard, Louis Roy, Emile Gravel, Remi Dore, Mrs. Odila Audette, Petronille Barbeau (Beaulieu), Miss Antoinette Beaulieu, Alfred Beaulieu, Jos. M. Longtin, Mrs. Paci-fique Racine, Arthur Lamarre, Fernand Fontaine, Gabriel Cedilot, Camille Bourdon, Noel Fontaine.
2.	In the report of the commissioner there is no record of the persons mentioned.
3.	4, 5 and 6. See answer to No. 2.
7.	No information.
8.	No.


EXCISE DUTY-CIGARETTES AND TOBACCO
Mr. GOTT:: 1.	How much excise duty was collected on cigarettes for the year ending March 31, 1932?
2.	How many cigarettes were manufactured in Canada during the fiscal years ending March 31, 1929, 1930, 1931, 1932?
3.	How much tobacco was exported from Canada during the fiscal year ending March 31, 1932?
4.	To what countries was it exported?


Mr. RYCKMAN:: 1.	826,415,948.77.
2.	Cigarettes
1928-1929		.. 4,664.692,635	
1929-1930		.. 5,073,502,520	
1930-1931		.. 5,063,419,576	
1931-1932		.. 4,343,670,119	
3 and 4.	Domestic produce	Foreign produceCountry-	Lbs.	Lbs.Great Britain	7,950,708	8Barbados	2,666	-Bermuda	103	Br. West Indies, other.	18	-Jamaica	7,702	45Newfoundland	46,092	-Hong Kong	94	Belgium	255,498	-China	269,360	-Cuba	9	-Denmark	1,485	-France	4	-Japan	3,018	-Mexico	12	Miquelon & St. Pierre.	100	-Netherlands	159	-Panama	12	-Switzerland	5,495	-United States	13,887	86,035Total	8,556,422	86,0S8



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. PRICE:: 1.	How many American citizens are employed by the Canadian National Railway Company in Canada?
2.	How long have they been employed, what positions do they hold and what salaries do they receive?


Mr. MANION:: In regard to question No. 1, Mr. Speaker, the railway company informed me they cannot get this information in time. Therefore I would move that it stand as an order for return.
Unemployment Relief


DK. TORY'S OFFICE FURNISHINGS
Mr. ROGERS:: 1.	What is the total cost of furnishing the office of Dr. H. M. Tory, President of the National Research Council, in the research building, Sussex street?
2.	What is the price of each desk, chair, table, rug, etc?
MR. GEORGE GONTHIEr's OFFICE FURNISHINGS
Mr. .ROGERS:
1.	What was the total cost of furnishing the office of Mr. George Gonthier, Auditor-General, in the Confederation building?
2.	What is the price of each desk, chair, table, rug, etc?
3.	What became of the furniture formerly in the office of the Auditor-General?



UNOPPOSED MOTION FOR PAPERS


Mr. TETREAULT:: For a copy of all correspondence, telegrams, and other documents exchanged, from 1926 to July, 1930, between the Department of Agriculture and Mr. P. E. Boivin. former member for Shefford, and Mr. Victor Gariepy, of Waterloo, Quebec, in connection with the appointment of Mr. Victor Gariepy as veterinary surgeon in the service of the Dominion government, in the county of Shefford.
UNEMPLOYMENT AND FARM RELIEF On the orders of the day:


Richard Bedford Bennett: Mr. Speaker, the hon. member for
Assiniboia (Mr. McKenzie) has asked me a question on several occasions. I thought he had misread what I said on the 29th July, 1931, I find on looking up the record that I then said:
During the last few days I have received telegrams from the province of Saskatchewan juggesting that it was not desirable that direct relief which might be regarded as charity should be accorded to those hardy settlers who hare lost their all for the third, and in some instances the fourth succeeding year, but rather that they would like to execute some document which would indicate that they regarded the help given as an obligation which they might some time be able to pay.
I may say to my good friend from South Huron (Mr. McMillan) that that indicates at least the attitude of some of those who at the present time are without crops, having had their third successive crop failure. I observe the hon. gentleman read my remarks as indicating that I had received communications from the province of Saskatchewan, and he was seeking information as to what member of the provincial government had communicated with me. It will be observed that my language did not mean that I had received communica-
tions from the provincial government, but from persons residing within the province. While some of the communications were marked ''personal," the one that gave me the most information was from a loan company manager, who, I knew, had travelled over the territory and found a disposition on the part of the settlers not to take charity but to make a contribution in the sense indicated.


Mr. DONNELLY:: The hon. member for
Assiniboia (Mr. McKenzie) is away at the present time, but I understood him to say that the declaration of the Prime Minister was to the effect that certain people in the west had written letters or sent communications of some kind to the right hon. gentleman intimating that they were ready and willing and anxious to pay back this money that was loaned, and that the hon. member had received communications from private individuals asking for copies of these letters and telegrams.


Richard Bedford Bennett: That is not the way it
reads.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the orders of tht day:
Mr. CAMERON R. McINTOSH (North Battleford): May I ask the' Minister of Railways whether he has any further information to give the house and the country in connection with the laying of steel on certain branch lines of the Canadian National Railways in northwestern Canada. The particular road to which I am referring is the sixty-nine mile stretch which is ready for steel between North Battleford and Edmonton.
Robert James Manion: There was forwarded to me this
morning a general review of the question to which the hon. gentleman refers, and which he has sent throughout the whole of his constituency. It places on words of mine conclusions which I do not think he had any right to draw, and under these circumstances I do not think I will make any more statements to the hon. gentleman in regard to the railway.


Mr. McINTOSH:: If the minister would
state what I have published in an irregular way, I might try to correct it.


Robert James Manion: I will state it at the proper time.


Cameron Ross McIntosh: All right.

Deportation Cases



DEPORTATION CASES


[Stage Direction]
On the orders of the day:
Mr. J. S. WOODSWORTH (Winnipeg North Centre):: I have received a telegram
from a Mrs. Stahlberg, of Montreal, stating that her husband, John Stahlberg, a resident of Canada for twelve years, was arrested by the Royal Canadian Mounted Police, on orders from the Immigration department, at their home, 1342 St. Antoine street, Montreal, on May 19, and immediately placed on a train for Halifax. May I ask the Minister of Immigration why it is that this policy of snatching people away from their homes, without giving them the opportunity of a trial in the place of their residence, is being continued. It seems to me to be very unjust and heartless, especially in the case of those men with families, and perhaps the minister could give some information with reference to this case.


Wesley Ashton Gordon: I have not before me the particulars of the case to which reference has been made, but I think the hon. member for Winnipeg North Centre is scarcely stating the position correctly when he suggests that people are being whisked away- if that is what he said-[DOT]


An hon. MEMBERS:: Snatched away.


Wesley Ashton Gordon: -snatched away from their homes and placed under arrest and tried. That is not the position at all. These sections of the Immigration Act under which officials of the department are functioning have been the subject of very considerable debate in this house on a number of occasions. Hon. members who were here in 1910 will remember the debate that then arose when the section of the act as it presently appears in the statutes was brought into being. And in. 1919, as some hon. members will recollect, the act was twice amended, in the one session I believe. These amendments were the subject of a good deal of debate in this chamber on a number of occasions, and I believe amendments to the sections in question were passed twice by this chamber. I do not think the amendments received the approval of the other house. Then in 1928, the section as it presently stands, which is a re-enactment of the legislation of 1910, was passed by this house, and it sets out the method to be followed in connection with investigations in the cases of those who may be or may have been guilty of an infraction of this law.
These men are not snatched away from their homes; they are not under arrest, although they are in detention, it is quite true. Many suggestions have been made as to some other method that might be pursued-Some say that they should be incarcerated in the gaol in their home city. They have not been convicted of an offence; they are not on trial; but their conduct as aliens in Canada is under review to determine whether or not they have a right to stay in Canada.
I am not going to go into this question at any great length. I could discuss it at very great length, but I feel that certain members of this chamber are sufficiently acquainted with this law and are quite familiar with the method which, of necessity, has to be pursued if law is to be enforced and those responsible for the invocation of the law are to do their duty. The board of inquiry may consist of one or of three members; the law makes provision for that. Those men whose conduct in Canada is under review are entitled, I think, to have their conduct reviewed by a competent board of inquiry composed of three members. True it is that the act contemplates that they may be brought before a board of inquiry at an immigrant station anywhere in Canada. Now, had they been brought before the nearest immigrant station, let us say, for example, at some port on the boundary, where there are no detention quarters, to start with, and reviewed by one officer, who works part time for customs and part time for immigration and is not acquainted with the practice and procedure contemplated by this section, that would not, in my opinion, be a fair review of the alien's case and a fair determination of it. There are very few places in Canada-the necessity has not arisen- where boards of inquiry composed of three members are set up, and there are very few places where proper detention quarters are available- for the detention of aliens until such time as their cases can be reviewed and their appeals heard.


James Shaver Woodsworth: If I may interrupt
the minister, is it not quite true, in the Winnipeg cases, that we have proper quarters right in the city of Winnipeg?


Wesley Ashton Gordon: I will come to that in
a moment. With respect to those cases that have been the subject of some comment -in some sections of the press recently- the evidence of the alien's right to stay in Canada was within the knowledge, in almost all of the cases, of the same witnesses. That made it rather difficult for the officers enforc-
Deportation. Cases

ing the law to be here and there all over Canada, as occasion might arise, when the men were detained for investigation. The department-1 believe they adopted the proper course-considered that these men, in having their conduct reviewed, should be brought before a board of inquiry composed of three persons, men who were well acquainted with the law and with what the law contemplates, rather than being taken before an officer not qualified to make a decision of this kind. I do not say that disrespectfully of these officers, because of necessity they are located at places in Canada where a close investigation of the effect of this law is not necessary in order that their duties may be properly discharged. Had they been brought before the nearest board of inquiry of one, then it would likely have been very incompetently considered from the standpoint of the alien whose case was under review. I agree with the stand taken by the officers of the department that there is necessity for uniformity in connection with these cases.
It has been suggested by some newspapers, and I think by some hon. members, that these men are not being given a fair trial. They are not on trial. The hon. member for Lis-gar (Mr. Brown) does not agree with that, but the fact is that they are aliens whose conduct and whose right to be in Canada is merely under review. If, on the one hand, it is found that they have the right to be here, they are immediately returned to their homes, as I believe one or two have been. If, on the other hand, it is found that they are here wrongfully or illegally or, being here legally, have transgressed our laws or are bent on stirring up distrust or riot, are bent on breaking our laws, then, so far as the officers of the department are concerned, after that has been made clear proceedings are taken in connection with deportation. These men are not precluded from the right to resort to habeas corpus and for some unaccountable reason they seem to be better fortified with money to carry on defence than even our own citizens are when they fall foul of the iaw.
There is another aspect of this matter upon which I think I should comment. There are many tens of thousands of law-abiding well-ordered citizens of foreign countries living in Canada. These people desire to obey our law's and are appreciative of what is offered to them in this country. But they suffer from the actions of the very indifferent percentage who will persist in waging war against our institutions. British subjects in Canada and

Canadian born people are prone to class all people from foreign lands as undesirable. They do it unconsciously but it is very unjust and unfair to many of these people. My association with many thousands of them who come from parts of the world other than the British Empire, mainly Europe, has convinced me that they are being penalized by the actions of their compatriots. These people are wholesome, upstanding and decent citizens of this country and they are being penalized by the actions of a small percentage of those w-ho want to stir up difficulties and distrust of our institutions. I do not propose to administer the affairs of this department in such a way that those who are endeavouring to obey our laws and who are proud of their right to be in this country are to be penalized because of the actions of some of their countrymen who do not seem to realize or appreciate the advantages afforded them by reason of the right given to enter Canada.
As time goes on it becomes more obvious that the last place on earth to which these men want to be sent is to their country of origin, and that is the place where they should be sent if they are not appreciative of the advantages and the rights conferred when they were allowed to enter Canada and live among the British and native born people of our country. I do not like to dwell too long on this matter but I assure the hon. member for Winnipeg North Centre (Mr. Woods-worth) that these men are being denied no right to spread their case upon the record. They are given the right to appear before me on appeal; they are given ample time and opportunity and are advised that they can appeal to the courts under habeas corpus proceedings. Not one word of evidence is taken down in any one of these cases until the person whose conduct and right to remain in Canada is under review is advised that he has the right to retain competent counsel. And these men do procure counsel, at times very expensive counsel, and their cases are determined fairly and justly as contemplated by our laws. If it is found that they have no right to remain in Canada, then I assure hon. members that I propose to carry out the duty cast upon me to invoke this law just as vigorously and fairly as I know how.


James Shaver Woodsworth: Before the minister concludes, may I ask-


Pierre Édouard Blondin: This matter is not the subject of debate.


James Shaver Woodsworth: I was merely asking a question.

Civil Service Act


Pierre Édouard Blondin: The hon. member asked a question and the minister replied to it at length.


James Shaver Woodsworth: I intended to ask merely a supplementary question before the minister concluded. I should like to know if there have been cases where aliens have had their naturalization certificates cancelled?


Richard Bedford Bennett: The act provides for that.


Wesley Ashton Gordon: I have not before me any detailed information with respect to the question asked by the hon. member, but I can say that the act certainly provides for the cancellation of naturalization certificates in cases where those certificates should be cancelled. I believe there have been a number of cancellations; if there have not, there should have been.


Mr. CAHAN:: There have been naturalization certificates cancelled because of absence of at least seven years, but otherwise no certificate has been cancelled except upon the report of a judge specially appointed for the purpose of examining into the facts as to whether or not the certificate was obtained by fraud, or, on the other hand, unless there has been a conviction by a criminal court of this country.



HYDROGRAPHIC SURVEY SHIP

[Stage Direction]
On the orders of the day.
Mr. ANGUS MacIXXIS (Vancouver South):: Mr. Speaker, I should like to inquire of the Minister of Marine (Mr. Duran-leau) if a contract has been let for the taking of the hydrographic survey ship being built in Collingwood from that port to the Pacific coast, and if so, the name of the contractor.


Hon. ALFRED DURANLEAU (Minister of Marine):: Mr. Speaker, I have not the exact information before me but I shall be glad to reply to-morrow to my hon. friend.



CIVIL SERVICE ACT AMENDMENT

[Stage Direction]
Hon. C. H. CAHAN (Secretary of State) moved the second reading of Bill No. 99, to amend the Civil Service Act.
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. LaVergne in the chair.
Sections 1, 2 and 3 agreed to.
On section 4-Residents for local appointments.
Mr. HEENAN:: I understand that this bill was based upon the report of the committee but, unfortunately, I have been absent for a
few days and have missed the discussion thereon. Could the minister tell us on what procedure the government intend to act now with respect to appointments of postmasters in post offices with a revenue of less than S3,000?


Charles Hazlitt Cahan: There is a special clause
covering that.


The CHAIRMAN:: The question will be
in order under that clause.


Mr. ROSS:: What is the meaning of residence of one year? Will it mean simply residence where a man is in the district, or something similar to the qualification for a vote?


Charles Hazlitt Cahan: The residence to qualify a
civil servant, that is residence of five years, is fixed by another clause. This, I presume, is simply residence in the locality for "one year immediately preceding," and is the outcome of criticisms which were made before the committee to the effect that in the appointment of civil servants for certain, might I say, subordinate positions in a locality, nominations were made of those resident outside that locality. This is to qualify only those who have been resident for one year in the locality. Clause 4 of the bill is in almost the same terms as paragraph 4 of the report of the special committee on the administration of the Civil Service Act.


Mr. VENIOT:: Might I call the attention
ol the minister to a point I have in mind? Suppose the applicant is not a resident of the district in which the post office is located but is a resident of a rural route receiving its mail through that post office. Is he to be considered, in applying for the position, as a resident of the district? I think that point ought to be made clear.


Charles Hazlitt Cahan: It would be impossible to
draft an amendment to meet all cases. This clause applies to appointments to local positions in any province and it declares that so far as practical such appointments shall-
-be made from persons having resided in such locality for a period of at least one year immediately preceding the date last fixed for receiving applications for such local positions.
I am adopting the phraseology of the committee's report and I think we shall have to trust to the future to decide how far this is practicable.


Peter John Veniot: My reason for bringing up
this point is that in the past we had difficulty in the Post Office Department in deciding this matter, and in many cases we had to leave it to the Civil Service Commission.
Civil Service Act


Charles Hazlitt Cahan: That is exactly where it is left now.


Peter John Veniot: Let the responsibility lie
there.


Mr. VALLANCE:: I notice the chairman of the committee is not in the chamber. The explanation given by the minister is the reason for leaving the clause as it is with the words "so far as practicable." We were trying to cover any possible case.


Arthur Edward Ross: What does "looality" mean?


John Vallance: Within the radius of
distribution of that post office.


Arthur Edward Ross: In my constituency several appointments were made where a man was temporarily located there, perhaps doing certain work while the family was situated elsewhere. Nevertheless he came into competition with men who all their lives had been residents of that constituency.


Charles Hazlitt Cahan: The man must be actually
resident for one year in the locality; that means his domicile, his home, must have been in that locality for one year.


Arthur Edward Ross: If the word "domicile" is used, that will be satisfactory.


Charles Hazlitt Cahan: "Residence" is more explicit tlian "domicile."


Mr. GANONG:: In my constituency in the customs service Milltown is an outport, while St. Stephen is a port. The Civil Service Commission promotes from the outport to the port. Examinations for the outport are not allowed to be held at St. Stephen. The result will be that appointments will be made wholly from the outport. Does the word "locality" mean the district or simply the locality?


Charles Hazlitt Cahan: "Locality" must be determined by the relation to the local position which is to be filled. The clause reads:
The appointments to any local positions in any province shall, so far as practicable, he made from persons having resided in such locality.
I think we shall have to trust to the Civil Service Commission to deal with that, "so far a3 practicable," as stated in the clause.


Peter John Veniot: I was not a member of the committee, but evidently the matter did not come before it in all its phases. I presume it would have to consider the regulations adopted by certain departments whereby they extend the territory. Take, for instance, the main post office in Ottawa. It is included in a certain zone, so that persons, even from a district outside the city limits, can apply for an Ottawa position and still be considered as being residents of the Ottawa district. The

same thing applies in the case of the Department of National Revenue. In New Brunswick, Saint John being the head office for the Department of National Revenue, it has happened, and it can happen again, that people in Saint John city may apply and become revenue officers or subcollectors of customs in the county of Charlotte, just as in the case brought up by the hon. member for that constituency. In the past that was not considered a violation of the act or regulations. Of course there is no provision in this clause to meet that situation. This is no time to try to amend the bill in that respect, but I would suggest that the provision be allowed to operate for a year and then, if any injustices occur, we can amend it.


Charles Hazlitt Cahan: This is simply a general provision to cover a specific case. As no one knows better than the hon. member for Gloucester, the Civil Service Commission has discretion and authority to carry this provision into effect, and it also has authority to make, concerning this, rules and regulations which must necessarily from time to time receive the approval of the governor in council. The committee undoubtedly intended to lay down a general line of policy, leaving it to the commission to work out that policy by rules and regulations which will later be framed. The words "so far as practicable" leave the commission a certain discretion in such a case as that to which the hon. member for Gloucester has referred.


Mr. LUCHKOVICH:: How would this
clause apply to returned soldiers? If a returned soldier living in a city heard of a vacancy in a village and applied for that position, would he have precedence over applicants who actually resided locally or would he have to reside in that particular locality?


Charles Hazlitt Cahan: I suggest that the returned
soldier would have no preference in a locality in which he did not reside.


Peter John Veniot: He did not have it under
the old law.


[Stage Direction]
Section agreed to.
Sections 5 and 6 agreed to.
On section 7-Vacation leave.
An hon. MEMBER:: What is the idea of
putting in "in a tropical country"?


Charles Hazlitt Cahan: That amendment I believe
was introduced at the suggestion of the Department of Trade and Commerce which maintains certain offices in hot countries where it is advisable to give one month's holiday on account of climatic conditions.


[Stage Direction]
Section agreed to.

Civil Service Act
On section 8-Gratuity in lieu of retiring leave.
Mr. MACKENZIE KING:: May I ask the
Secretary of State if this clause is intended to enable the government to make immediate appointments once clerks are retired?


Charles Hazlitt Cahan: It was pointed out before the committee by deputy heads of departments that at present a retiring official has the right to a certain length of leave according to the number of his years of service, the maximum being six months' leave. It has been found very difficult at times to administer a department during the term of leave of absence of a retiring official as under the existing law there is no power of appointment until the leave of the retiring official has expired. It was suggested before the committee, and upon consideration the government, thought it advisable to provide that an official upon retirement should be allowed to retire at once, so that in case there is need of a new appointment at once it could be made, the retiring official receiving a gratuity in lieu of leave of absence.


William Lyon Mackenzie King: What my hon. friend says as to the difficulty in administration, as I recall it, is correct. I hope, however, that this provision will not be used by the government to retire too many officials all at once.


Charles Hazlitt Cahan: I may say, Mr. Chairman,
that that suggestion is certainly not applicable to my administration of my office because I have not retired any officials. Death has retired quite a number, and even in these cases I have refrained from making new appointments so far as it was possible so to do consistent with maintaining efficiency.


William Lyon Mackenzie King: I hope that the example of the Secretary of State in the particular he has mentioned will be followed by other ministers.


Peter John Veniot: I am glad that this amendment is being made to the act because my experience as head of the Post Office Department would certainly suggest its advisability. Knowing how difficult it was to administer the act and do justice to those applying for positions that had been vacated by the retirement of officials, I was seriously considering during my latter years of office attempting to have such an amendment made to the act, and I am glad, therefore, that it has been made.


[Stage Direction]
Section agreed to.
On section 9-Suspension of employees in remote districts.
Mr. NEILL:: I would like to ask the necessity for this clause. Who asked for it?


Charles Hazlitt Cahan: The necessity arises out of
the fact that in remote districts where there has been malfeasance of office, theft or other dereliction of duty of a very material kind, no suspension of such officer can be effected at present until it is reported to the head office and the deputy minister or the head of the department takes measures to suspend such an official. This amendment authorizes the chief officer of the department in a remote district to suspend the official and report the suspension to the deputy head in Ottawa for further definite action.


Alan Webster Neill: I am entirely opposed to
this idea. I do not think this amendment is justified. There is no part of Canada, or very few parts at all events, that are not now in reach of communication by wire, and how long would it take for the chief officer, the little petty man out in a remote place, to wire to Ottawa to get consent to suspend? Are we going to go back to the old days of the divine right of kings when, if the King's porridge was not cooked to his taste, he said "Behead the cook"? I visualize a situation somewhat like this:	This amendment talks
about the chief officer, but actually he may be a very petty, inferior officer. One day he may get out of bed on the wrong side or he may have had a quarrel with his wife, or he may be drunk with a little brief authority and power, and he suspends one of his officials. The deputy minister has power to remove the suspension, but the man would not be paid in the meantime, and the head out in the remote district, having ordered the suspension, would naturally endeavour to make good on it and have it confirmed. Nine times out of ten the man would get a raw deal. Nothing is going to happen even if a man who has stolen money is left on the staff for a few hours longer until authority is received from Ottawa for his suspension. I do not think this amendment is justified. It is going to lead to a lot of trouble and a lot of injustice.


Mr. CHEVRIER:: The law as it now stands, section 51 of the act, reads:
The head of a department, and in his absence the deputy head, may
(a) suspend from the performance of his duty any officer, clerk or employee guilty of misconduct or negligence in the performance of his duties.
Civil Service Act

It was brought to the attention of the committee by the civil service commissioners and by certain deputy ministers that particularly in cases of surveys in far-distant portions of Canada, when an employee became unruly or no more worthy of retaining his position, the officer in charge of the party could not suspend him but had to communicate with the deputy head at Ottawa. That took time and in the meantime the man was continued on as an unruly subject. On the recommendation of the officers of the departments and also in conformity with the representations made by the civil service commissioners for the better administration of the act, the committee felt justified in making this recommendation because the law, section 51, also provides in paragraph (b) that the head of the department may remove such suspension. The recommendation now made does not alter the remaining portion of paragraph (b) of section 51 which reads:
. . . but no person shall receive any salary or pay for the time or any part of the time during which he was under suspension unless the commission is of opinion that such suspension was unjust.
The amendment simply means that for the time being the superior officer will have the right to suspend, but the whole case will have to be referred to Ottawa and will not be disposed of until the head of the department and the commission have passed thereon.


Alan Webster Neill: But my point is that these
suspensions will be much more frequent in the future on account of this loose authority.


Mr. GARLAND (Bow River):: I am very
much inclined to take the same view that my hon. friend from Comox-Alberni has taken and to regard this amendment as an extension of too great authority possibly to persons who may not have the judgment to exercise 't. In any case we may perhaps narrow down the scope of the clause if we cannot defeat it. Would the minister be good enough to give a definition of a remote district? What is meant by that phrase, "remote district?" Is it to cover the case of a man such as the senior member for Ottawa suggests, who is employed on surveys far away from rail and telegraphic communication, or are there any fixed territories that would come within the ambit of what are now called "remote districts"?


John Vallance: These cases were never referred to the Civil Service Commission at all, but the engineer in charge wired to the deputy head and he, in every instance, gave the powers that this section now gives.
TMr. Chevrier.]


Edward Joseph Garland: What is the power?


Edgar-Rodolphe-Eugène Chevrier: The right to suspend never belonged to the commission.


Peter John Veniot: No; I am wondering, however, how conduct of officials who do not come under the commission could be referred to that body. Let us consider post offices with less than $3,000 revenue which would not come under the commission at all.


Edgar-Rodolphe-Eugène Chevrier: That is not the point, Mr. Chairman. The point is that the present law provides that a civil servant cannot be suspended by the Civil Service Commission but by the head or the deputy head of the department. There are two things which may happen however, and they are these: Where expeditions and things of that nature are carried out some of the employees are under the Civil Service Commission and some are not. Those who are not under the control of the commission are not affected in any way by this legislation because the old rule prevails. But those who are-


Peter John Veniot: That is not so, fiere.


Edgar-Rodolphe-Eugène Chevrier: Yes. So that those
who are under the Civil Service Commission, and in remote districts, may be suspended by the chief of the expedition or party. The law has to be carried out as it would have been if the deputy had been in control, namely that the Civil Service Commission eventually must pass upon the merit or demerit of the suspension.


Edward Joseph Garland: I should like the minister to explain the meaning of the term "remote district" as it appears in the act? I have in mind men who may take a trip to the Arctic ocean.


Charles Hazlitt Cahan: I think the term "remote district" simply means a remote district, that is a district far removed from the centre of administration.


Edward Joseph Garland: Bow River, for example?


Charles Hazlitt Cahan: This section will be carried out under regulations framed by the commission and approved by the governor in council. I do not think any prejudice is likely to result to any civil service officer or employee in the civil service who is doing his duty. I can understand that a man employed by the civil service and operating in a remote district may become an habitual drunkard, or demented, or he may suffer from ill health so

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that he is utterly incapable of performing his duties. He may be guilty of some crime in the administration of his office. In such cases the responsible head of the department located in such remote district certainly should have the right temporarily to suspend and to report to the deputy head. It is a mere suspension. If the commission should decide that the suspension was not justified the man would be paid his full time and returned to office and to the performance of his duties. The fact is that in the administration of any department of business affairs I should not care to be administering in a remote district unless I had at least the right to suspend officers who were incompetent, inefficient, guilty of mal-administration or misconduct. It is simply a right temporarily to suspend.


Alan Webster Neill: The minister has said that the man who is suspended will suffer no wrong because the Civil Service Commission will see to it that suspension is removed and that he is paid in full if such suspension were not justified. But here is the situation: After all, men are human and liable to frailties. Under some of the circumstances enumerated a moment ago a man on the impulse of the moment or in a temper may suspend a subordinate. Having reported the suspension, human nature would be opposed to the admission, "I spoke too quickly, and I am sorry." He will not do that. It is up to the official to try to justify the suspension. He will do it, and stress every effort within his ability or facilities to make the suspension permanent, despite the fact that the dismissal was made too rashly or too quickly.
Will the minister tell us any instance where the public service of Canada has been prejudiced and any loss sustained by the government through the lack of this section? I should like to hear one instance.


Charles Hazlitt Cahan: Mr. Chairman, I have not such a poor opinion of human nature as my hon. friend. For many years I have employed men-very rough men-some 10,000 to 20,000 of them, when nearly every man carried a revolver and sometimes shot at sight. However their foremen always had a sense of justice, and although they might do things in anger they were not likely, when . in cold blood they reviewed the circumstances, to misrepresent their own motives or the facts. I have confidence in the officials in charge of departments in remote districts. If they give way to anger and improperly or unjustly suspend men they will not endeavour to misrepresent the facts to the commission or the head office. However if they should do so
there would be thorough and competent inquiries and in the end justice would be done. I think that a man in a remote district, who has a dozen or a hundred men under him, especially when they have little or no communication during certain seasons of the year with the outside world, should have the right of suspension for misconduct or inefficiency. Otherwise there could not be proper administration of any branch of any department.


Alan Webster Neill: From the minister's remarks 1 gather that I would be justified in advising subordinates to carry revolvers and to shoot at sight.


Edward Joseph Garland: The minister has referred to the centre of administration. Was he referring to Ottawa or to the nearest office of the particular department in question?


Charles Hazlitt Cahan: LTnder section 51 in every instance the head of the department is the head officer at Ottawa. For the information of hon. members I shall read section 51:
51. The head of a department, and in his absence the deputy head, may
(a)	suspend from the performance of his duty any officer, clerk or employee guilty of misconduct or negligence in the performance of his duties;
(b)	remove such suspension;
but no person shall receive any salary or pay for the time or any part of the time during which he was under suspension unless the commission is of opinion that such suspension was unjust or made in error or that the punishment inflicted was too severe.
2. AI1 cases of suspension, with the reasons therefor, shall be reported in writing by the deputy head to the commission.
It must be a report by the deputy head of the department to the commission sitting at Ottawa, who have the final determination and disposition of the matter.


Edward Joseph Garland: In answer to my question regarding a definition of remote places the minister said that a remote place was any place removed a great distance from the centre of administration. Now he says the centre of administration is Ottawa. In my view the city of Vancouver would be removed a great distance from Ottawa. Would this legislation give power to officials in Vancouver to discharge or suspend minor officials?


Mr. GUTHRIE:: No.


Edward Joseph Garland: Does it?


Hugh Guthrie: No.


Edgar-Rodolphe-Eugène Chevrier: Let me say to my hon. friend from Bow River that we had in mind cases of a temporary character such as I mentioned a moment ago, an expedition, a
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survey, or something of that kind not in the ordinary course of administration. He mentioned the appointment of a postmaster at Vancouver. I do not think anyone, no matter how he might disport his imagination, would try to argue that Vancouver is in a remote district of Canada.


Edward Joseph Garland: Not at all.
The minister's definition does that.


Edgar-Rodolphe-Eugène Chevrier: No one could argue
that Vancouver, Edmonton or Halifax is a remote point from Ottawa in the administration of the civil service. "In a remote district" means in a district which is far removed from the ordinary administration of the Civil Service Commission. This section covers only the cases that are presently under the Civil Service Act. Probably what my hon. friend from Comox-Alberni (Mr. Neill) has in mind is a minor position which is not under the act and is not at all affected by this provision. It gives to the chief of the party the right to suspend, subject to the Civil Service Commission subsequently passing on that suspension after he has reported it to the deputy head. The section is not complicated at all.


Edward Joseph Garland: Not after
the senior member for Ottawa (Mr. Chevrier) has cleared up the meaning of "any remote district." It seems that this is to apply to employees on such business as surveys, expeditions, and the like.


Edgar-Rodolphe-Eugène Chevrier: Certainly.


Edward Joseph Garland: In that
case it will not be as vicious as if applied, as the minister's definition would lead me to believe it might be applied, to such remote places as Vancouver.


[Stage Direction]
Section agreed to.
On section 10

Act not to apply to postmasters of certain revenue post offices.
Mr. GAGNON:: As a difficulty arises on
the interpretation of this section, I would ask the Secretary of State (Mr. Cahan) to consent to its standing over until after luncheon.


Peter Heenan: Some of us may not be
here after luncheon. I thought we might have an explanation at least as to what procedure will be followed in filling these offices with less than $3,000 revenue. How will the returned soldier preference be maintained under these conditions?


Charles Hazlitt Cahan: This bill is simply an
enactment of the various material paragraphs of the report of the select committee of this

house which reported upon the administration of the Civil Service Act. I am not in a position to answer the question of the hon. gentleman in detail. Under 57a no particular line of conduct or policy has been discussed or even considered by the government when I have been present. It was suggested that the report might be carried into effect by order in council, but the view of the officers of the Department of Justice, confirmed by the Minister of Justice, was that it should be carried into effect, if at all, by express enactment. This section 10 is the proposed enactment.


Peter Heenan: I am not complaining
about the section. I want to know how we are going to carry it out and at the same time protect the returned soldier. Surely the government must have some idea whether or not they are going to protect the returned soldier, and how. Hitherto these positions have been advertised in the different centres where the vacancies occur. Will this practice be followed, and by whom?


Charles Hazlitt Cahan: This section 10 provides that "the preference provided by section twenty-nine of this act, in favour of the persons mentioned therein, shall be applied in respect of appointments to such positions." This includes returned soldiers. I presume the government, when this bill is passed, will adopt such a line of policy as will maintain for the returned soldier the preference which he at present enjoys under the Civil Service Act. I cannot go further than that.


Mr. BROWN:: How is it possible to apply the provisions of section 29 when those positions are taken from under the Civil Service Act? Under present conditions an examination of the candidates has to be held. Whether that examination is perfect or imperfect is not the point. There is an examination held, and under the act a returned soldier having sixty per cent of the qualifications takes the lead over the man who has one hundred per cent.


Mr. BOWMAN:: They are all treated on the same basis so long as they come within the disability.


John Livingstone Brown: He certainly has a percentage of preference under the act, and that is determined by the examination. He is given so much credit for his educational qualifications, his personality, and so on all down the line. Then an estimate is made as to whether the returned soldier in view of all the circumstances takes precedence over the man who is not a returned soldier. When all these positions are taken from under the act, how

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is it possible to bold any such investigation and to determine on anything like a fair basis whether the returned soldier is really a competent man or not? Actually it rests in the hands of the man who has the gift of the position to say that in his judgment the candidate has or has not the necessary qualifications.


Charles Hazlitt Cahan: I think it is possible. Personally I have not taken one side or the other in connection with this report. I thought that perhaps it was not expedient that I, who nominally for the time being represent the civil service in this house, should do so. But there are branches of the public service in which appointments are made and which are not under the Civil Service Act. A large body of the employees of the National Revenue department are not within the provisions of the Civil Service Act. I know while I was temporarily performing the duties of minister of that department last summer a number of appointments were made, but in every case there was a thorough examination of all applicants, and the officials of the department reported upon the merits of those applicants irrespective of their political affiliations. I venture to say that the merit system is not necessarily restricted to the Civil Service of Canada as administered under the Civil Service Act. In my humble opinion it is quite possible in many cases to have a much better application of the merit system outside of the Civil Service Act. I have no doubt some regulations will have to be made whereby the preference given to the returned soldier shall, in accordance with this section, be retained. If it is not retained, my hon. friend, as a member of this house, will have full opportunity later to express his demand for a rectification of the procedure adopted.


John Livingstone Brown: In actual practice, I think
it will work out that the appointments will be made just as they were made under the old-fashioned system.


Edgar-Rodolphe-Eugène Chevrier: As a member of the
committee, may I again say that it was the intention of the committee that the soldiers' preference should be maintained, and I am satisfied that it will be maintained if the regidations are followed out. There were two ways in which it could have been done. Personally, I should have preferred to have the recommendation of the committee submitted to the Civil Service Commission, so that the commission would have availed itself of section 59 of the act and made a report to the effect that in its view it was impracticable or no longer in the public interest that 41761-205
this portion of the service should remain within its jurisdiction, and then it would have availed itself of the last part of section 59, making regulations thereunder- It is provided that such regulations as are deemed advisable shall be made, prescribing how such positions are to be dealt with. If this is taken away from under the operation of the act, either by statute or by the operations of the Civil Service Commission, upon an order in council, though at present, it would seem to me, it will be taken away by the effect of the bill, then all those excluded positions are to-day subject to the old order in council No. 1053, which declares that the soldiers' preference must be maintained. At present all these exempted positions are subject to the provisions of that order in council No. 1053, and if they are exempted under the statute, it is quite competent for parliament to say that, notwithstanding that such position may be taken away from the commission, section 29 of the act shall apply, in which there is ample safeguard for all preferences to returned men. To my mind, whether you do it one way or the other, the soldiers' preference will be maintained; and at all events it was well settled in the minds of members of the committee that that preference should not be done away with.


Charles Hazlitt Cahan: I ask that this section stand for the present and that we proceed with the others.
Section stands.
On section 11-Retired private secretaries not to be entitled to positions in civil service.


Mr. HACKETT:: This section would take away from the private secretary a prerogative which has been his for many years, I recommend that the committee consider very carefully some of the consequences of this section. The importance of the private secretary to his minister cannot be over estimated. A minister is dependent to a great extent upon his private secretary, and because of the importance of the position it has in the past attracted men of unusual sagacity, ability and great devotion to duty. Recently the practice of doing away with private secretaries who have served ministers of a previous administration has been modified, in the present government many of the ministers have retained the services of the men who had served their predecessors in office. This, I believe, is commendable. I do not think it 'has been known that a private secretary has ever been disloyal to the minister whom he was serving. The service as a whole, I sub-

Civil Service Act

mit, has been enriched by the absorption into it of men who have served as private secretaries. Private secretaries have opportunities for acquiring experience and becoming efficient administrators which many others in the service are denied; if we look about the service we find that .many who are discharging important duties in high office in a commendable way have been in earlier days private secretaries. I am aware that some have protested that the provision of the Civil Service Act which this section would abrogate tends to lessen the ambition of the civil servant who has not been a private secretary, because he might be denied an opportunity for advancement by the appointment of a former private secretary to a position over him. There may be something in the objection, but I think, it should weigh very lightly in the scale when considered with the possibility of denying to the service the excellence, natural and acquired, of this class of men. I therefore ask the committee to hesitate before withdrawing from the private secretaries that stimulus to take up and perform very arduous duties which follows from the offer of a high and permanent position in the service when they have finished their days of secretaryship.


John Livingstone Brown: Would the passing of this section mean that the private secretary, when he ceased to be such, would be eliminated from the service?


Charles Hazlitt Cahan: I understand that is the case. If a civil servant is appointed private secretary, while private secretary he is entitled under the law to an addition of $600 to his salary as civil servant. But a private secretary who is appointed at a time when he is not a member of the civil service, and who continues as private secretary for any term of years, would have no right to be appointed to the civil service upon the termination of his engagement as private secretary.


Peter John Veniot: Except by application and examination.


Charles Hazlitt Cahan: He would have to work his way up from the bottom as though he had never been a civil servant.


Mr. NICHOLSON:: I support what the hon. member for Stanstead (Mr. Hackett) has said. This is most unfair. Assuming that all private secretaries were released every 'time there was a change of government, and absorbed into the service, those who were so released and absorbed into the service would be only a small fraction of the total number of civil servants in Ottawa or in 
'Canada. Anyone who has had experience with the departments and with the private secretaries of ministers over a period of years- I have had an experience of some fifteen years-cannot fail to realize that the private secretaries, from the Prime Minister's down, are perhaps the ablest men in the service. These men serve long arduous hours, they are at the beck and call of their own ministers, of members of the house, of delegations and of all types and classes of people from one end of this country to the other and to my way of thinking it would be most unfair to cast them adrift simply because a government has changed. I am unable to understand just what the committee had in mind in making this recommendation. There are men and women who served under previous administrations and who are to-day diligent in their services to present ministers. I do not know where you could find people more courteous and diligent than these private secretaries, and I feel that the clause should be amended.


John Livingstone Brown: I am inclined to agree with the hon. member for East Algoma (Mr. Nicholson). I cannot imagine that the number involved would be very great, and I think it would be advisable to amend this clause. A private secretary must have the complete confidence of his minister and I think it is a credit both to the ministers and to the secretaries that those who served in the past have been taken over. I. do not think this clause should pass as it might very well be that the very excellent service rendered by these secretaries might be required again in the course of a few years, as we think possibly might happen.


Edgar-Rodolphe-Eugène Chevrier: Mr. Chairman, it is with a lot of diffidence that I agree with the recommendation. During the eleven years I have been in this house I have come to appreciate the value of the private secretaries but, on the other hand, one must not lose sight of the fact that at every election there would be ten to fifteen men and women injected into the civil service. These men and women are not put into minor positions, they are entitled to chief and principal clerkships. There are conscientious men and women who for twenty to twenty-five years, and sometimes for thirty years, have been expecting promotions to these positions and I think it would be most unfair and against the merit system to inject these secretaries into the service over the heads of those already in the service. The service may be deprived of very efficient men and women but we must not blow hot and cold at the same time.

Civil Service Act


John Thomas Hackett: Does the hon. member consider that this would be a departure from the merit system? Does he not consider that private secretaries have some opportunity of establishing their merit and that they are appointed because of merit?


Edgar-Rodolphe-Eugène Chevrier: I can only answer my hon. friend by quoting the definition of appointments to the civil service. An appointment to the civil service proper is made only upon a competitive examination or a demonstration of skill. I have yet to be shown that any of these private secretaries have been appointed into the- service upon a competitive examination or a demonstration of skill. So long as the merit system is defined along those lines I cannot logically admit that these secretaries are being admitted into the service upon a competitive basis. If there is a vacancy and these secretaries can bring themselves within the rules and regulations of the Civil Service Commission to compete in examinations, that course might be tried, but I think even then difficulty would be encountered. In the case of promotions or vacancies unless there are no departmental men or women capable of filling the position, no outsider can compete. The deputy head of a department must state that there is no one in the department in line for promotion to the vacant position before an outsider is allowed to compete. I think the course taken by the committee was a fair one towards the service and showed its intention that the merit system as described by the statute should be continued and that those employees in the service who have been long waiting for a promotion should not be debarred simply because someone who has served a minister well and truly is to be taken into the service.
When a minister comes into office he has two alternatives in the selection of a private secretary; he may appoint a new secretary or take over the secretary who served the previous minister. There are private secretaries who have served ministers under different administrations, and there are others who are appointed because of the fortunes of war and perhaps they should be prepared to go out when the fortunes of war go the other way. I think it would be a good thing if a system of permanent private secretaries was adopted.


George Brecken Nicholson: In connection with the question raised by the hon. member as to actual merit against academic merit, I should like to ask the hon. member if he does not consider that when a minister appoints a secretary he does appoint one because of merit and ability. I think we can take for granted 41761-2051
that when a private secretary is appointed he has some merit-merit at least equal to that of the majority of civil servants. He has, shall we say at least four years' experience with the minister, the deputy minister, members of the house and the public and is it not reasonable to say that the experience acquired, plus the ability he had when appointed, would put him on a level with the average civil servant? My hon. friend shakes his head but it is my opinion that a private secretary with the experience he has gained and the ability he possessed when appointed is just about equal to any man or woman in the category of the service to which he would be appointed. To my way of thinking it is most unfair to cast these men adrift simply because a change has occurred in the government. I have come in contact with former private secretaries who are now in the service and it is my opinion that their being there is of advantage to the service.


James Langstaff Bowman: Mr. Chairman, I think the senior member for Ottawa (Mr. Chevrier) has stated clearly the reasons why the committee brought in this recommendation. I agree with what the hon. members for Stanstead (Mr. Hackett) and East Algoma (Mr. Nicholson) have said with respect to the merits of the private secretary, but I cannot see that what they said with respect to being cast adrift applies because these private secretaries would have a right to compete for vacant positions.


George Brecken Nicholson: To start at the bottom.


James Langstaff Bowman: Why should they not
start at the bottom on the same basis as many others? After all, a man who has served perhaps twenty or twenty-five years in the civil service is entitled to some consideration. Why should a private secretary, simply because he has occupied for a year, or two, or three, or four years that position with one of the ministers, be given a position in the civil service in priority to the other man? Not only does this procedure deprive of promotion the man whoSe position is immediately below that given to the private secretary-


Mr. STEWART (Edmonton):: Has this
procedure deprived any civil servant of his promotion? I have never heard of such a case.


James Langstaff Bowman: If private secretaries are placed in positions of importance, of seniority, they must certainly stop the whole line of promotion from the bottom up.


Charles A. Stewart: Not necessarily.
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James Langstaff Bowman: I cannot see where they do not if we have a real merit system.


Charles A. Stewart: Likely information on that point came before the committee, and I should like to know whether in recent appointments any private secretary to a minister has prevented promotion in the civil service.


James Langstaff Bowman: Unless an absolutely new position were created, I cannot conceive where that would not be the case.


Charles A. Stewart: I hate to
interrupt, but I thought the committee had evidence to that effect, because I saw a good deal of it in the newspapers. My private secretary was a civil servant and of course returned to the department, so I have no personal experience of the situation described. I was thinking of private secretaries to other former ministers and I have not heard of their displacing anybody.


James Langstaff Bowman: The committee have
taken it for granted to this extent that where private secretaries have been given appointments in the civil service, they must take established positions; otherwise those positions would be open to competition in the usual way.


Charles A. Stewart: Is it not
provided in the act that they are to be given positions of chief clerk or better?


James Langstaff Bowman: Yes, but if that is done, they take positions which others now lower down in the service would ultimately fill, and so they stop the whole line of promotion. Personally I quite agree that some, from their experience, would prove to be very valuable civil servants; but after all, if you are going to have a merit system, they should enter the service just the same as anybody else, that is, by competition and merit combined. That and the reasons set out by the senior member for Ottawa were those that appealed to the members of the committee in bringing in. this recommendation. We felt that a man who had a great number of years of experience in the position which he occupied in a department, should not have his right of promotion interfered with by the injection into the service before him, of somebody merely because the latter had occupied the position of private secretary.


Mr. CARMICHAEL:: I wish to express my approval of this amendment as outlined in the proposed bill and to endorse the remarks made by the hon. member for Dauphin (Mr. Bowman), and the senior member for Ottawa

(Mr. Chevrier). As I understand the situation, it is that a minister has a right to select his private secretary wheresoever he desires. A private secretary need not have any special academic qualifications; he is a man whom the minister selects to do his private work, whom the minister thinks will be capable of doing that special work. He is a man perhaps for whom the minister has a liking, who will be congenial, and a man, or, indeed it may be a lady, who will be capable of filling a position that may require a special personal qualification. But it does not necessarily follow that that particular person could drop into some department of government and fill just as acceptably a position there. Further, if I understand the practice correctly, it is that when a private secretary has held such a position for a year, if some change of government- should occur or if for some other reason that secretary is thrown out of such a position, then he or she is required to be taken into the civil service in some department of government. I believe that to be a correct statement of the situation. When they are made permanent with some department, I understand they are given very handsome salaries. Surely there is no element of fairness in that procedure. It leads naturally to dissatisfaction among those other civil servants, many of whom may, as has been pointed out, have been in the department for a number of years and are anxiously waiting for promotion. This private secretary, who may not be at all capable, is taken into that department and given perhaps a position of seniority over those who have been there for ten, fifteen or more years. That is most unfair. If the provision were made-and I presume it exists -that private secretaries might come into the civil service through the method of examination just like any other applicant, that would be fair. In that case it would be open to any private secretary to come into the service under prescribed examination, and if he or she should be qualified for that position, he or she should be taken on and given a rating along with others.
As regards the argument that because a private secretary has left some other position, he should be given special consideration, in all fairness that argument is not used in reference to members of parliament. Members of parliament leave their callings and take their chances with the public for one year, or two or more years. But after the public says; We do not want you any longer, no special provision is made for us; we drop out and sometimes we may drop very hard, but we have to look out for ourselves. There is no department of government to reach out a welcome

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hand and offer us a generous, substantial emolument for the rest of our lives, unless perchance, we might land in the upper chamber. Most of us, however, leave our callings, enter political life and take our chances. Generally speaking, therefore, it is only fair that the gentleman or lady who leaves some other calling and becomes private secretary to a minister, should, when the minister ceases to be such, take his or her chances just as the rest of us have to do.


John Thomas Hackett: The hon. member for Kindersley has apparently overlooked the red chamber.


Archibald M. Carmichael: I mentioned that.


John Thomas Hackett: Members of this house have been known to retire there and not without some satisfaction to themselves. I would like, however, to bring the remarks of the hon. gentleman to this test. Is there an abuse? I suggest that this change should not be made unless it is to cure an abuse. Is there a man in the civil service who has been a private secretary who is unfitted and does not possess the qualifications for the position in the service which he now holds? If, as suggested by the hon. member for Ottawa, the definition of merit is not sufficiently broad to measure merit in its true sense, I think it should be amended. In any event I move, Mr. Chairman, seconded by the hon. member for East Algoma, that section 11 be deleted.


Mr. PECK:: There is just one point that
does not seem to have yet been considered, and that is the effect upon the present private secretaries. It seems to me that if we adopt the section as it stands it is going to deprive the existing private secretaries of the benefits they have a right to receive under the present law. So if we pass this section I think it should be only on the understanding that it does not take away from the present private secretaries the rights which they now have. These men and women have been appointed under a certain law, and they knew when they received their appointments that having served for a certain period they would be taken care of in the civil service. They have remained as private secretaries on that understanding. So I repeat, Mr. Chairman, that if this section is going to pass, it should be only on the understanding that those who are now occupying the position of private secretary shall have the benefit of the existing law. In other words, that this section be amended so as not to apply to existing private secretaries.


Edgar-Rodolphe-Eugène Chevrier: There is one word that I want to say on this amendment, and it is
as to what is meant by the merit system. The merit system, as I understand it, is not the merit of the man who is trying to get into the service. The merit system is the system that finds the man best fitted for the position, then appoints him and protects him until his retirement, and sees that he is treated in an equitable manner. That, as I understand it, is the merit system. It is not the merit of the man outside trying to get into the service. If this amendment is carried, the meritorious employee will be deprived of the right of promotion, and therefore the merit system will suffer an encroachment. I think that those members of the house who feel that the merit system is the only one, and I am one of those, Mr. Chairman, who feel that the merit system is the only proper system for the administration of the civil service, cannot vote in any other way except against the amendment.


Onésime Gagnon: I would like to say one
word, and that is that I gladly support the amendment which has been moved by the hon. member for Stanstead. According to the information I have, only about five or six private secretaries would be affected by the bill as it now stands, because most of the private secretaries have been taken from the service already. But the private secretaries who were appointed in July or August, 1930, entered the service on the understanding that should their ministers abandon their office for one reason or another they would be given a position in the civil service. Why should we be so strict, speaking about abuses and that sort of thing, when there are only about five or six private secretaries who are eligible to enter the service and why should we deprive them of an acquired right to be appointed to the service?


Edward Joseph Garland: I rise to
a point of order, Mr. Chairman.


Armand Renaud La Vergne: I would point out to
the hon. member for Stanstead that there cannot be any amendment to strike out a section.


Edward Joseph Garland: That was
my point, Mr. Chairman, exactly.


Armand Renaud La Vergne: The point is well taken.


Edgar-Rodolphe-Eugène Chevrier: In answer to the hon.
member for Dorchester, it does not make a bit of difference if there is only one private secretary to be absorbed into the service. That would be a sufficient encroachment on the merit system to warrant ns in carrying this section as it stands,
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Arthur Edward Ross: The argument that a person
becomes a private secretary with the understanding of later on entering the civil service is, I think, a very poor argument.


An hon. MEMBER:: Why?


Arthur Edward Ross: Why should a private secretary be given such a preference over those who have to take a competitive examination in order to enter the service? I have listened to the argument on both sides, and I repeat that that was about the weakest argument that could be put up, namely, that a person becomes a private secretary, I do not care under what government, with the promise that he is going to step into some nice job in the civil service.


Charles A. Stewart: One comes
to have a realization of the difficulties to be encountered when one has had experience. For example, in 1922, when the late government came into office we found the private secretary of the Prime Minister left high and dry after a good many years' service.


William Lyon Mackenzie King: There were
three of them.
Mr. iSTEWART (Edmonton):	Yes, there
were three, and this particular man was absorbed into the civil service and became a very valuable member of it. Another one is acting as private secretary to-day. I took my private secretary from the civil service itself, and when I went out of office he was absorbed back into the service. I do know, however, that I tried through the avenue of the Civil Service Commission to have provision made for two of these private secretaries who had been left stranded and we did manage to absorb them into the civil service. I do not know of any civil servant who has suffered in consequence of these appointments, and I thought probably the committee that suggested this amendment would have evidence to prove that people in the civil service who had earned the right to promotion had been prevented from being promoted by the absorption of private secretaries into the civil service at the time of the change of government. It does seem to me that a man who has acted as private secretary to a minister for seven or eight years, as some of these gentlemen whom we found out in the cold had acted, is entitled to some consideration. It is all right, as the hon. member for Kindersley has pointed out, to say that we as members of the house must take our chances, that we have nothing to look forward to after our term of service has 
expired, but I say, Mr. Chairman, that the man who acts in the capacity of private secretary, if he is worthy of the name at all, is a valuable acquisition to the civil service of this country. That is my feeling in the matter. Perhaps the provision in the old act, that one year's service as a private secretary entitles a man to entrance to the civil service, might be amended to call for a period of five or six years, but it seems to me that it is hardly fair that with a change of government five or six men who have given good service should be left out in the cold and have to seek some other employment. There are usually not more than that number.


George Brecken Nicholson: One word, Mr. Chairman, in reply to the hon. member for Kingston City (Mr. Ross). Ido not think he caught the implication of the suggestion with regard to the rights of those who have come into the service. At the time they came in the law provided that they would be taken care of. The law, as it stood, made provision for them, and if this legislation comes into effect they will not be oared for. The proposed legislation would undiermine the conditions under which these men came into the service as private secretaries.
Perhaps what the ex-minister said may be worthy of some consideration, namely that the period of time they should serve could be extended from one to three or four years. However to take that class of man and say that he must go back and pass an examination to take a position as janitor or office boy, or some other position, and then to work up again, is grossly unfair. No business in this country could be built up by following that principle. These men and women have come into the service because of their exceptional qualifications, or they would not be here. They have served and are serving, and to pass an enactment saying that because a government or minister may change they must be cut adrift without any moorings whatsoever is in my view the most unfair suggestion I have heard brought before this House of Commons.


Arthur Edward Ross: I do not think my hon. friend appreciated my stand. I do not see any reason why these men should not pass a civil service examination. The best qualified clerk in any city or town, or anywhere else, cannot take a government position without passing an examination. If they pass civil service examinations they are eligible for positions. I come to the argument that nothing has been heard about anybody being hurt. How can one person be put into a high position with-

out hurting some person who did not get the position? How could it happen that somebody would not be hurt and that some one has not been stopped in his line of promotion, unless such people were appointed to unnecessary positions for which there was no competition. I cannot understand how any person could be picked up outside of the service and put into some high position in it without hurting everybody from that position down.
At one o'clock the committee took recess.
The committee resumed at three o'clock.
On section 11-Retired private secretaries not to be entitled to positions in civil service.


Charles Hazlitt Cahan: Mr. Chairman, this bill is in accordance with the report of the select special committee, and the government has introduced the bill in order to carry out the views of that committee, but I think this discussion has led to a reconsideration as to whether section 2 of the amending act which was passed in 1929 should be amended in the form now proposed.
In selecting a private secretary I think there is no member of a government, entering upon his duties as minister of the crown, but has found very serious difficulty in procuring in the civil service men who are thoroughly competent and qualified for the position of private secretary. I do not reflect at all upon the members of the service who are subject to the direction of the Secretary of State when I say quite frankly that, excepting women in the service, it would have been impossible for me to find in that branch a man who was thoroughly qualified, or rather who had the qualifications which I desired, for appointment as private secretary. In the first place, the private secretary to the Secretary of State must be thoroughly competent in two languages. He should be a man of education, preferably a graduate of one of the colleges. He must ibe of a mentality and temperament which qualify him to deal not only with other departments and their officials but with the general public as well.
When I sought to obtain a private secretary I was disposed to retain the secretary of my predecessor in that office, who was a thoroughly qualified man. But in conversation with him I found that he felt some diffidence in remaining as my secretary. He had been carrying out the views of my predecessor in office who, to a certain extent, was a political organizer, and he felt that perhaps his political views somewhat debarred
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him from receiving my full confidence as my private secretary. When I sought to obtain another I asked at least four or five young men whom I thought were perfectly qualified, but each refused to accept the salary which would be available to the private secretary of a minister of the crown. A private secretary must attend to his duties from at least 'half past nine in the morning until midnight or later. He has no such hours of leisure as those which are allotted to the ordinary civil servant. In the course of two or three years I think he becomes more competent and more efficient to fulfil creditably the duties of a member of the civil service than any other class of men appointed to that service. Some of those who were appointed under the statute as it exists at the present time were induced to accept employment as private secretaries, and to carry on the duties pertaining to that office, at comparatively low salaries because they knew that under the statute, if they were not guilty of misconduct, they would be qualified for appointments, in the civil service, to the position of a chief clerk, when the minister should retire.
In discussing this matter with some of my colleagues and with other members of the house it was suggested that the public service could be adequately protected if a slight amendment were made to the statute passed in 1929, which is chapter 38 of the statutes of that year, making it necessary for a private secretary to serve not one year before qualifying for appointment to the service, but to serve at least three years before being eligible for such appointment. The section of the Civil Service Act as it now stands reads:
... in the event of the minister or other member of the government, or the leader of the opposition for whom he is actihg as secretary, ceasing to be a minister or member of the_ government or to he the leader of the opposition, as the case may be, the said secretary shall thereupon be appointed to a permanent position in the public service classified not lower than that of chief clerk, provided that the said secretary has been acting as such for a period of not less than one year.
It occurs to me that in justice to those who have already accepted appointment, and to insure that this section is not made use of for the purpose of qualifying for first-class clerkships men who have been placed temporarily in the office of private secretary, for the present every good purpose might be served if we simply amended that section by striking out the word "one" and inserting in lieu thereof the word "three," so that three years would be sufficient.
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I should like to know how that amendment would meet with the views of the house. This is rather a difficult matter. Personally I feel under a moral obligation to the young gentleman whom I selected. I do not think he has any politics in the world. He is a thoroughly competent man in French and in English and is a college graduate who devotes himself in a most efficient way to the services which are required of him. He must be so competent as to relieve the minister of a great deal of the minister's share of work in the administration of the department. The Department of Secretary of State receives from four thousand to five thousand letters a week, which have to be distributed and dealt with. The minister cannot attend to that. Since I have been in the office, while I have been in Ottawa I have worked frequently at least fourteen or sixteen hours a day. I have no civil service hours, and during the session I keep my secretary employed till midnight more frequently than otherwise. And that man, with that experience with me, is, I am sure, as competent and as well qualified for civil service duties as any other young man seeking an appointment to the civil service could possibly be. I go further than that. There are in the Department of the Secretary of State some young women who would be thoroughly qualified for these duties, but it is impossible for a Secretary of State to retain a young woman at his office until midnight, taking her away on his official trips and all that sort of thing. It is necessary for me to have a young man as private secretary, and in that whole department I do not think there is any person, who would accept the position of private secretary, who is as well qualified as the young man whose services I secured, on the condition, well understood by him, that he came in under the provisions of this act, the repeal of which is now sought. I should like to have the views of hon. members with regard to such an amendment. I cannot move the amendment myself, but if the committee is favourable I would ask my colleague, the Minister of Finance, to move it.


Mr. RHODES:: I beg to move accordingly:
That all the words after the words "said act" in the first line of section 11 of the bill be struck out and the following be inserted in place thereof:
( "is hereby amended by striking out the words 'one year' in the last line of said subsection and by inserting the words 'three years' in place thereof."


Charles Hazlitt Cahan: The section now reads: Provided that the said secretary has been acting as such for a period of not less than one year.

As amended it would read:
Provided that the said secretary has been acting as such for a period of not less than three years.


Mr. MARCIL:: Does this mean that he
must serve three years continuously with the same minister, or may he serve with different ministers during that time?


Charles Hazlitt Cahan: With any minister, I should say, in the capacity of private secretary.


Charles Marcil: Does the amendment provide for that?


Charles Hazlitt Cahan: As it stands now, the section provides that the secretary, either of a minister or of the leader of the opposition:
. . . shall thereupon be appointed to a permanent position in the public service, classified not lower than that of chief clerk, provided that the said secretary has been acting as such for a period of not less than one year.
I assume, and I think it is clear, that this means provided he has been acting as secretary of a minister of the crown or a leader of the opposition for three years, as the amendment now reads.


Edward Joseph Garland: When the motion for concurrence in the report of the committee was before the house, I ventured to move an amendment to one clause of that report which I regarded as objectionable. In reply to my amendment, hon. members, including some on both sides, suggested that as the report of the committee was unanimous we might as well accept it as it stood and not propose any amendment. Indeed, the Prime Minister went further, and having praised the committee for its excellent work and the unanimity of its decision, said:
Under these circumstances, so far as the government are concerned, we assumed that the unanimous judgment of the committee would be unanimously adopted by the house.
Now the government changes its mind, and we have, suggested by one minister and moved by another, an amendment to the bill, which amendment is just as objectionable as it was contended that my proposed amendment to the report was. I regard this section 11 as one of the excellent features of the bill. It restored the merit principle where the merit principle had been violated by the previous administration. I support the present section of the bill, and I am opposed to the amendment not only because the section in question sustains the merit principle throughout and protects the privileges and rights of civil servants, but further because every single organization representing the civil servants that appeared before the committee asked for this legislation. Further than that, the report of

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the Civil Service Commission itself submitted in the year 1930 makes pointed reference to this very matter. Under the subject "legislation", at page 14, the report says:
Private Secretaries-[DOT]
It would seem that a retrograde step was taken, in so far as civil service legislation is concerned, when chapter 38, 19-20 George V, was placed on the statutes. Legislation of this character has a tendency to dishearten the conscientious, hardworking employee whose chances of advancement are blocked by the preferment of an ex-minister's private secretary, and the lowering of interest in the personnel is reflected inevitably in the character of the work performed.
It is also open to question whether, from the point of view of efficiency and economy, the departments are benefited by having their higher supervisory positions filled by persons who are unfamiliar with their work.
Secretaries of ministers are certainly not familiar with the routine work of civil service administration.
In many instances, no doubt, the private secretary is a capable official who may, if he has had years of experience as private secretary in a department, speedily become of value to the staff. On the other hand, the tendency is to create in some departments unnecessary higher-grade positions, or to fill those already vacant with a view rather to the interest of the private secretary than to that of the department. It may be pointed out, further, that the legislation in question is contrary to the whole spirit of the Civil Service Act, inasmuch as private secretaries are appointed without competition, and the section of the act requiring that vacancies be filled as far as possible by promotion is contravened.
There is the definite printed recommendation of the Civil Service Commission, made to this house in the form of its annual report. In the evidence given before the committee every single organization represented on behalf of the civil servants recommended this very piece of legislation and opposed the granting of positions to private secretaries, especially the few positions available to men of that type. I quote from page 261 of the evidence. In this case it is given by the president of the Civil Service Association of Ottawa:
The Witness: Now, I would like to break a little fresh ground. 'There is the piece of legislation known as the private secretaries' amendment to the Civil Service Act, properly known as chapter 38, 19-20 George V, an Act to amend the Civil Service Act, assented to June 14, 1929, which we believe to be decidedly contrary to the principle of the merit system. Perhaps I could put it this way; A new government comes into office following a general election. A minister brings to Ottawa a young man he has selected to be his private secretary -John Doe. Already in this department is one Richard Roe, who has been employed in the service for twenty years, having successively held a junior clerkship, a principal clerkship
and now is a head clerk-these various advances having been effected by promotion after the usual investigation by the Civil Service Commission. Richard Roe is now looking forward to a chief clerkship. There may be only one chief clerkship in that department; the present incumbent is some years older than Roe and is due for superannuation in a couple of years or so, but manages to hang on-human nature-most of us would do the same. In the meantime the ministry, with a small majority, _ is getting ready for the inevitable general election which in four years follows. The administration is changed. Under the legislation I have referred to, the minister, ceasing to be a minister or member of government, the said secretary (John Doe) "shall thereupon be appointed to a permanent position in the public service classified not lower than that of chief clerk, provided that the said secretary has been acting as such for a period of not less than one year."
The present proposal is to change that and make it three years. That is but a very slight improvement of an entirely incorrect principle. The evidence continues:
The department has no need, or no place, for an additional chief clerk. The elderly incumbent is now retired and John Doe fills the position. As a consequence Richard Roe's opportunity is postponed for years or it may be forever. Further, the principal clerk next in line to Richard Roe, the clerk grade 4, the clerk grade 3, grade 2, grade 1, all efficient public servants, all are in a like predicament. The line of promotion in that department is blocked indefinitely. Not only may this unfortunate circumstance occur after a general election, but it may occur in any department, at any time during any administration, when any member of the government ceases to be a member of that government.
Nothing that I could say would add to the very pointed and effective remarks of the president of the Civil Service Association given before that committee. Let us continue and endeavour to find out whether any damage has been done. The point has been raised by the hon. members for East Algoma (Mr. Nicholson) and Stanstead (Mr. Hackett) as to whether or not anyone has been injured by this provision. I quote from the evidence of the same witness as follows:
Q. How many positions are there in the civil service as chief clerk?
The position of chief clerk is the one to which these secretaries are supposed to go. Incidentally, it carries with it an emolument of $3,100 per year. The question continues:
Can you tell me, Mr. Bland-approximately? -A. In the neighbourhood of 200 or 250, with that salary.
Those are all the positions there are of that particular type. The evidence continues:
Q. How many private secretaries were put into the civil service after the election of 1918?
Mr. Bland: There have been 54 all together.
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That is not a small proportion, 54 out of 250. Those 54 appointments had the effect of postponing indefinitely expected advancements within the service based on the merit system. These advancements might well have been anticipated, in fact should be anticipated by every occupant of a position within the service. I am opposed to any alteration of the present section in the bill. As I said at the outset of my remarks, this section is one of the bright features of the bill and I hope this committee will sustain the special committee in this regard.


Mr. MOTHERWELL:: Mr. Chairman, if I understand rightly the words of the Secretary of State (Mr. Cahan) the proposed amendment leaves the section as it was except that the secretary must have occupied his position for four years instead of three.


Some hon. MEMBERS:: Three years.


William Richard Motherwell: Three years. Well, I am in favour of that and I find myself in accord with the Secretary of State in that respect. I have had experience in the provincial and federal houses with private secretaries and I know that when a minister takes office and finds the secretary of his predecessor holding the position, he feels that if his services are to be dispensed with, a position should be found for him. I do not think a secretary should be thrown into the street. 1 know that many ministers would be completely lost without their secretaries. I have had to do without one for the last two years and I do not know where anything is. My files are valueless, they are stacked up here and at home and it is nothing but provocation for me to find anything. I suppose that is one of the penalties of being in opposition, but I am learning something in the meantime. When we came into office in Ottawa my first duty was to find a place for my predecessor's secretary. I could not throw him out into the street and I had to look around the departments for two months to find a position in which to place him and I finally was successful in finding an opening in the Department of the Interior, and I believe he is still in that position. I was then in position to appoint a secretary of my own, which I did. My predecessor's secretary did not lose one day's pay, he went from one position to the other. I would not refuse the same right to my hon. friends as their time will come, perhaps before very long, and positions will have to be found for their secretaries. The only difference has been that the Liberal governments, voluntarily, usually have taken care of their predecessor's private secretaries, while 
the Tory governments, I believe, did not always take care of outs. I may be wrong, but I understand that one of the reasons for passing the previous amendment was that we wanted to make sure that our successors would treat our secretaries the same as we had voluntarily treated theirs. It may be that we were mistaken in mistrusting our hon. friends, but we wanted to make sure by law that our secretaries would be taken care of.


Edgar-Rodolphe-Eugène Chevrier: Mr. Chairman, I am in full accord with what has been said by the hon. member for Bow River (Mr. Garland), if I understand the Secretary of State correctly, his argument is that a large number of the present private secretaries accepted their positions in the expectations that they would be treated as fairly as the others. I have no quarrel with that statement, but I would point out that opposed to these fifteen or twenty private secretaries there are a vast number of civil servants who for twenty, twenty-five or thirty years have been expecting promotion. The time may come when they are able to step into the positions upon which they have had their eyes set, and they should not be denied that opportunity. Even the proposed amendment, which seems to be a sort of palliative, would be the worst possible encroachment upon the merit system, and I, for one, cannot accept it. I cannot agree to the infusion into the service of those who have served for three years or longer as private secretaries-notwithstanding the personal qualifications they may have-ahead of those who for years have been hoping to obtain a just reward for long and faithful service. If there is anything in the present merit system -and I believe there is a great deal-then the system of promotion on merit should be conserved. For that reason I am sorry that on this occasion I cannot accept the amendment of the Secretary of State.


Angus MacInnis: I do not wish to say
very much in connection with this amendment and the clause of the bill that is now under discussion, excepting that I agree with the senior member for Ottawa and also the hon. member for Dauphin who were with me on the committee. Before we made this recommendation, we gave the matter a great deal of study and I consider the recommendation of the committee as embodied in the bill correct in principle. If so, then the substitution of three years for one year, as provided for by the amendment, does not alter the original principle involved. If it is wrong in principle that a person should come into the civil service in any way except by competitive

Civil Service Act
examination or promotion by merit, then the provision of a term of three years does not alter the situation. The hon. member for West Edmonton, Minister of the Interior in the previous administration, stated that when they came into office in 1922, they found it rather difficult to place the private secretaries who retired at that time with the outgoing ministry. It is rather strange that while the administration of which he was a member were in office from 1922 on, it was not until 1929, when practically they were leaving office, that it occurred to them to make this provision.
Another point which I wish to make is this: the hon. member for East Algoma says that those men, after having been a few years in office, would be thrown out on a cold world without any consideration, and that that is not fair. It may not be a desirable thing for those who have been thrown out in that way, but there is nothing unfair about it. It is, however, decidedly unfair to take them into the service without a competitive examination, over the heads of those who are already in the service and who have done good and faithful work. The same principle could be put in another way: temporary employees are on many occasions taken into the various branches of the service, but as soon as their positions become permanent, they have to submit to an examination and become permanent employees upon their merits or upon the standing they receive through that examination. Therefore, in my opinion, this clause of the bill should be passed as drafted and the amendment should be voted down because it is a violation of the main principle of the Civil Service Act.


William Lyon Mackenzie King: In connection
with what has been said concerning the merit system and what an amendment such as this one may lead to, there are one or two points which come to my mind as I think of what I have seen in the public service over a period of a good many years. Before the section under discussion was included in the act, I can recall that the practice on the part of ministers not infrequently was to appoint one who had been a faithful private secretary to some position in the public service other than a position for which an examination was required, and that what happened on more than one occasion-and I have two or three in mind at the moment-was that the private secretary of a minister was, on the eve of a general election, appointed to the position of deputy minister or assistant deputy minister by his minister who recognized the faithful nature of his service and was not prepared to
leave to chance the future of one who had served him well over a number of years. I believe that is very apt to happen again unless some provision is made which will permit of men who have rendered faithful service as private secretaries, being looked after in the manner here provided. That is a feature to be considered. Those who are in the public service have every right to look forward to promotion to the highest positions in the service, and certainly to such positions as assistant deputy minister or deputy minister, as regards which it lies beyond the control of any civil service commission to make the appointment. If we are to revert to the order of things that existed in the past, I can well see where it is altogether possible that a number of private secretaries may receive appointments to positions of that kind by an outgoing ministry rather than that it should take chances with respect to what might become of its private secretaries. The permanent service might suffer more in the end so far as promotion because of merit is concerned.
As regards the position of a private secretary, it must be remembered that in the years that anyone is associated in that capacity with a minister, he acquires a knowledge of government business in a large way that cannot otherwise be acquired, and a knowledge which is of the utmost service to the country as a whole. There are some positions that men can train for and which, especially if of a technical character, admit of concentration on one particular line which brings its own promotion, but for that kind of all-round service which means a great deal to the public service in its relation to the public, there is no training that any man or woman can receive equal to that which a private secretary to a minister of the crown necessarily gains.
Further, members of the civil service generally have standard hours of work and other features of employment which are more or less regular, that do not apply in the case pf private secretaries. The work of the latter is in large part not subject to limitations of any description; they are called upon to work at all horns of the day and night and with relation to all kinds of subjects; they are brought into touch with the public generally and they come to have an acquaintance in a large way with affairs throughout the dominion, all of which, it seems to me, merits a certain definite recognition on the part of the service in which they have been working. After all, a private secretary to a minister is in the civil service, or rather, in the public service-probably I should make that distinc-
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tion-but he is certainly very much in the public service, and I think it would be a great loss to the country if there were not the possibility of men and women who are being trained under ministers of the crown, finding their way ultimately into permanency of some relationship with public affairs. The suggestion of changing the period from one to three years is wise; indeed, a period of three years is perhaps short enough. In the interests of the public service, I am inclined to think it is desirable to seek to retain permanently those who have had that kind of training which can be had only in association with a minister of the crown and from an intimate knowledge of the affairs generally of some department of government.


Mr. CAMPBELL:: I wish to associate myself with those who have spoken in opposition to this amendment and in favour of the bill as introduced by the Secretary of State. I regret very much he has seen fit to alter the bill and to bring in this amendment. The principle involved in the original act is thoroughly vicious and the committee's recommendation is one that at the time met with the approval of the house. I see no reason why the house should change its mind at the present time. I fully appreciate the disabilities under which private secretaries labour, but in all fairness to the civil service, I contend the policy followed in the past has had a demoralizing efffect upon the whole service. Here we have men or women saddled on to the civil service with salaries ranging from three to four thousand dollars a year put into positions where they are not required at all and where very often, I understand, they do practically nothing simply because they happen to have been fortunate enough to have been a minister's private secretary for a short time. The effect on the civil service is to dishearten those who have had long and faithful service in that particular branch, and who are working at salaries probabfy very much below that which is given to this preferred class who have no particular knowledge of the work they are supposed to do. I think that something ought to be done to give this class of men and women a preference in the civil service-I quite appreciate that-but I think it should be done on the basis of merit and that they should be given a salary commensurate with the work they are doing. I see no reason whatever why they should be saddled on to the civil service to create all the disharmony and ill-will that the practice is creating at the present time. If we have to look after them, and I quite appreciate what the leader of the opposition has said,

that something should be done for them, I would prefer that they be given a retiring allowance and take their chance of getting into the civil service in the ordinary way rather than that they be allowed to enter by the back door as this amendment provides. The amendment does not, as other members have suggested, change the original principle at all. It makes no change in principle whatever, but simply lengthens the time of service necessary to qualify for entry to the service, and I do submit to the Secretary of State that the amendment is an unfair one. It is unfair to ask the house to take a stand against the committee's report after the house has already agreed to that report. I hope that the Secretary of State will see fit to withdraw the amendment rather than force it through now.


Mr. LAPOINTE:: I am in favour of this
amendment, and I was sorry to see the section of the old act struck .out. I am in favour of the merit system, and I admit that competitive examination is necessary for the good working of that system, but there is no rule without an exception, and this is a case where an exception must be made to the general rule. I do not think it would be possible for a minister to select a private secretary by competitive examination. Those who have been members of a government know that that is impossible. The private secretary is a confidential man. He has to replace his minister very often, and to act as a liaison officer between the minister and the public and between the minister and the officers of the department. If my friend from Mackenzie (Mr. Campbell) has known private secretaries who do not work-I do not know where he has found them. I have never seen in any department a private secretary who does not work. They work a good deal more than most of the civil servants, and it would be impossible for a minister to attract to his service as a minister of the crown a man who must have the education, the culture, the tact, and the many other qualities that are necessary to make a good private secretary unless there was a provision of this kind to give him some guarantee for the future. That has always been recognized. I was not here this morning and I do not know whether what I am about to refer to was mentioned or not. But in 1908 when the Civil Service Act was enacted and the first Civil Service Commission appointed, and the merit system introduced into the service, it was recognized that the case of the private secretaries was a special one.


Charles Hazlitt Cahan: That has not been referred to. I was holding it in abeyance to use if

Civil Service Act
necessary, and I hope that my hon. friend will fully state the case because it lays down a principle of long standing in the Civil Service Act.


Ernest Lapointe: Hon. gentlemen will find that chapter 16, section 81, of the revised statutes of 1906 provides:
Any member of the civil service may be appointed private secretary to the head of a department, and may be paid an additional salary not exceeding six hundred dollars a year whilst so acting.	.
2. No salary shall be payable to any private secretary unless the amount has been voted by parliament.
That was the law as it existed prior to 1908. In 1908 the Civil Service Amendment Act was enacted, section 39 of which reads as follows:
Any person chosen by a minister to be his private secretary may, without examination and irrespective of age, be appointed for a period not exceeding one year, and paid as a clerk in subdivision B of the second division, and after one year's services as such secretary he shall be deemed to be appointed to such rank.
In 1912 by chapter 15, section 1, that section 39 was repealed and the following was substituted therefor:
Any person chosen by a minister to be his private secretary may, without examination and irrespective of age, be appointed a clerk, for a period not exceeding one year, in subdivision B of the first division or in subdivision A or subdivision B of the second division, and shall be paid a salary not exceeding the maximum salary of the subdivision to which he is appointed, and after one year's service as such secretary he shall be deemed to be permanently appointed to the inside service at the salary which he is then receiving as such clerk and with rank in such subdivision.
So, from the very first it has been recognized that the case of the private secretaries was a special one and that they should be given permanent employment in the service after having acted as private secretary for a certain length of time.
The objections to the law of 1908 and of 1912 were that after a year of service as private secretary to a minister the private secretary was a permanent officer of the department and the minister could then appoint a new private secretary who, after one year of service, might also be appointed permanently to the civil service. There were certainly objections to a system which would have allowed a minister to appoint many persons to the civil service permanently after having first served him as private secretary for one year. So that section was repealed in 1918, but it was found afterwards that it was necessary to give some permanency to
the private secretaries acting bona fide for a minister of the crown as such, and that is the reason why the amendment of 1929 was enacted. I believe, Mr. Chairman, that it is advisable to substitute three years for one year, but after my experience as a member of the government for a few years I really believe that it is good policy to make an exception of all the private secretaries, and I am therefore supporting the amendment.


Edgar-Rodolphe-Eugène Chevrier: The amendment will not carry unanimously. I desire to register my most emphatic protest against it. All I desire to say in conclusion is this. I see no good purpose in helping out one or two or three undoubtedly well-deserving and well qualified employees, at the same time ruining the hopes and destroying the ambitions and forever wiping out the legitimate desires of a large body of civil servants just for the sake of giving a few a reward which could well be given in other ways.


Mr. SPEARMAN:: Mr. Chairman, having
listened to the debate and given the matter some considerable thought I wish simply to state my opinion. Both from personal knowledge and from what I have been able to learn from men better qualified to speak than I am, the private secretaries are men who must be exceptionally well qualified, and must give excellent service or they would not hold their positions. Further I realize that they have qualifications which, in a sphere suitable to their training, would fit them for services to their country. But, Mr. Chairman, while I believe they should receive recognition I do not believe they should receive it at the expense of four or five times their number, at the expense of men who may have given equally good service, and have developed expectations to which they are entitled, and which have kept up their morale and ambition. By reason of the appointments they would find these positions nullified.
As I have said I believe some provision should be made for them, but not at the expense of four or five times their number, not at the expense of men whose further advancement would be blocked, and who would have to renounce positions for which they were qualified and to which they had looked forward so long. For these reasons I shall oppose the amendment and support the section in the bill.
Amendment agreed to: Yeas, 44; nays, 21.
Section as amended agreed to.
Section 12 agreed to.
Civil Service Act

On section 13-Retirement from office of present civil service commissioners. Tenure of office of commissioners.


Charles Hazlitt Cahan: In this connection I am
about to suggest an amendment, which I shall ask one of my colleagues to move. The suggestion has been made that a civil servant might be appointed a member of the Civil Service Commission, that there are men who as civil servants have had a wide experience in the administration of the Civil Service Act, and that such men should not be debarred from appointment to the commission. However these civil servants are now entitled to superannuation under the Civil Service Superannuation Act. From time to time they have paid in to the pension fund, and if appointed as members of the Civil Service Commission they should not be debarred from the benefits to which they are entitled under the Civil Service Superannuation Act.
I am not making any promises on behalf of the government. I have not discussed with my colleagues the matter as to whether or not a civil servant is to be appointed a member of the commission, but I do say that a number of representations have been made by hon. members on both sides of the house that the government might favourably consider the appointment of at least one civil servant as a member of the Civil Service Commission.
The amendment which I am about to suggest, and which I will ask one of my colleagues to move, is that section 13 of the bill be amended by adding to the new subsection (3) of section 3 of the Civil Service Act a. paragraph which I shall read in a few moments. Subsection 3 of section 3 now reads:
Each commissioner shall hold office during good behaviour for a period of ten years from the date of his appointment, save that his tenure of office shall cease upon his attaining the age of sixty-five years.
The amendment proposes to add the following words:
Provided that if a civil servant, -who is a contributor under the provisions of the Civil Service Superannuation Act be appointed to be a commissioner, he shall be eligible, notwithstanding the provisions of the Civil Service Superannuation Act, to continue to be a contributor under the said act; his tenure of office as commissioner shall be counted as service in the civil service for the purposes of the said act, and he, his widow and children, or other dependents, If any, shall be eligible to receive the respective allowances or gratuities provided by the said act; and in case his tenure of office shall cease as in this subsection provided, or in the event of his being retired from the said 
office of commissioner for any reason other than that of misconduct, he shall be eligible to receive the same benefits under the said act as if his office as commissioner had been abolished.


Mr. RYCKMAN:: I so move in amendment.


Peter John Veniot: On what basis do you fix
the amount he shall contribute? Will it be on his salary as commissioner?


Charles Hazlitt Cahan: The salary he is receiving.


Charles A. Stewart: Mr. Chairman, is not the minister erecting a preference for the appointment of a civil servant to this position, inasmuch as he is not providing for superannuation or retiring allowance for the commissioners. It seems to me that there should be no bar to a civil servant acting as a commissioner, but I believe further that unless he is willing to accept the position on the same basis as the other gentlemen who will occupy the position with him, it would be somewhat unfair. There would be a preference to the civil servant accepting the position. I see no reason for interfering with his superannuation, which would take effect the moment he accepted the position on that basis. It does strike me that unless the three commissioners are permitted to contribute to the superannuation fund on the same basis, a preference is being offered that is quite unwarranted.


John Thomas Hackett: I heard the question asked by the hon. member for 'Gloucester, but I had some difficulty in reconciling the answer given with the act as I recall it. The act provides for contributions tby civil servants on certain well-defined salaries. I could understand that a commissioner, during his period in office, might -be permitted to continue to contribute to the superannuation fund as if he were still a civil servant. That could be done without, amending the act, but if I correctly understood the answer of the Secretary -of State it is suggested that the civil servant who might become a civil service commissioner would -contribute on the basis of his salary as a civil service commissioner, which might be considerably higher than his previous salary.


Charles Hazlitt Cahan: I was wrong if I made that suggestion; the bill itself says he may continue to -contribute on the same 'basis as though he were still a member of the service.


John Thomas Hackett: I might also say to the hon. member for West Edmonton that this is not an innovation. As an example, the

Civil Service Aci
recent appointee to the Board of Railway Commissioners is continuing (his service as a judge, from the point of view of the Judges Act, with regard to his retiring allowance. When he has completed his service on the Board of Railway Commissioners that service will count as if he had continued to be a judge, and if I have correctly understood the legislation he will be entitled to the benefits he would receive otherwise under the Judges Act.


Charles A. Stewart: In the meantime he is not drawing his retiring allowance, and under the Judges Act he has not contributed.


John Thomas Hackett: There is no contribution under the Judges Act. At the end of his service, or in the event of loss of health, he will be entitled to claim his pension just as if he had continued to be a judge.


Charles A. Stewart: Is my hon. friend sure of that statement:	I fancy that
his service on the commission will not count; that is, his retiring allowance will start from the date he accepted the appointment to the railway board.


John Thomas Hackett: Probably that is not of interest to the committee. We both might read the act again.


John Vallance: In the event of a civil servant being appointed to the commission, during his term as a civil service commissioner would he pay at the rate he was paying before he accepted that appointment? For instance, the hon. member for West Edmonton suggests that while one commissioner might be appointed from the civil service, the other two commissioners might be appointed from any other walk of life. I wonder if my hon. friend is aware of the fact that while under the Civil Service Act no more than three commissioners can be appointed, this government may see fit to appoint only one or two commissioners. If they appoint only one commissioner they may increase the salary to $10,000 or $12,000, and if that commissioner is appointed from the civil service and is to be retired on that salary of $12,000 or $10,000 after paying 5 per cent to the superannuation fund during his period of office, I think that should be looked into.


James Langstaff Bowman: As the act stands at present I do not think the objection taken by the hon. member for South Battleford would apply, because section 6 of the act definitely fixes the salaries of the commissioners at
$7,000 and $6,000 a year, and that provision is not altered by the bill under consideration.
To be quite frank, I was hoping that this section of the act would be amended to provide higher salaries. Recently the radio bill was introduced in the house, and it was suggested that the salary of the chairman of the radio commission should be $12,000 per annum, while the salaries of the commissioners should be $10,000 per annum. Personally I think that is much too high; I do not see how we can think of paying $12,000 to the chairman and $10,000 to the other members of the radio commission' while we only pay $7,000 to the chairman and $6,000 to the other members of the Civil Service Commission. As I stated previously, I think this is one of the most important commissions in Canada, if not the most important, and we should have men on that commission of very high character, strict integrity and considerable business ability. I am very strongly of the opinion that we will not get the right kind of men until we pay salaries commensurate with the duties that are performed. Personally I would have liked, and would still like, to see an amendment to the Civil Service Act authorizing the government to pay higher salaries than are set out at present in the Civil Service Act.


Peter John Veniot: Since I asked the question in this regard perhaps I may be permitted to 'make a suggestion for the consideration of the minister. I believe the Civil Service Commission would be very considerably improved if we had on it a commissioner appointed from the civil servants of Canada. Buit if we appoint a man who has been drawing a salary of $5,000 to $6,000 to a position paying $7,000 or $7,500 I think it would be wrong to permit him to make his contribution to the superannuation fund on the basis of that $7,000 salary, because his pension will be calculated upon the salary he received previously.
The suggestion I have to make is this, that if a civil servant is appointed to the Civil Service Commission he should be permitted to continue paying into the superannuation fund on the maximum salary of the position -which he held previously, and that the number of years he served on the commission should count to- the full in calculating the pension.


Charles Marcil: I have personal knowledge of some cases of judges who were appointed lieutenant governors. The time served in that capacity is counted as though they had been on the bench. Of course they received only one salary, but on retiring from the post of lieutenant governor the years they served
Civil Service Act

there counted as though they were served on the bench. I think it would be a mistake now to put a civil servant on the commission and ask him to contribute to the pension fund on the basis of his salary as a civil service commissioner unless the other commissioners were placed in the same position.


Charles Hazlitt Cahan: The proposed ameadknenit
provides that he shall be eligible, notwithstanding the provisions of the Civil Service Superannuation Act, to continue to be a contributor under the said act. So that the superannuation act would apply if he continued to contribute as he had done in previous years.


Peter John Veniot: It is clear enough, do you think?


Charles Hazlitt Cahan: It seemed to me so.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 10-Act not to apply to postmasters of certain revenue post offices.
Alfred Speakman: In regard to section 10, I have not been on the special committee nor have I given to the subject the special attention which the members of that committee have devoted to it. At the same time, with the little knowledge I have of the situation, I am very strongly opposed to this provision. I think it was stated by the Secretary of State that the report itself had been accepted unanimously. That is true so far as the committee goes, but it is not true with respect to the house itself. I fancy the Secretary of State, when he spoke of unanimity, was referring to the committee and not to the house, one section of which is very definitely opposed to the clause now before us, and which registered its objections in an amendment which was moved to this provision as it appeared in the report itself.
I am not going to speak at any length on this occasion; in fact I will not do more than make one or two comments on one phase of the matter. From our experience in the past and from what we have seen in respect of similar post offices and similar positions, there is no question in my mind that these appointments will be made very largely upon the recommendation of the sitting member from the constituency concerned, if that sitting member is a supporter of the government, but not necessarily otherwise. Now it has been argued by members of this house who support this clause that one of the definite duties of a representative is to represent his district with respect to appointments such as these, as well as in all other matters; that 
the member elected by the people representing a riding is possibly the best qualified man in the country to suggest the most suitable person to fill a position of this kind; and further, that being an elected member and being responsible to his constituents it would be to his interest to see that the very best men were appointed to fill such positions as came in contact with the general public. There may be something in that. But the experience of the past has also taught us that when such appointments are made on the recommendation of the member that member is understood to be a follower of the government in power. In a constituency represented by a member who is not a follower of the government, whether a member of the opposition or of any independent group, then the power of recommendation lies not in the hands of the member but in the hands of the defeated candidate or of the committee that supported him during the election. This, while not recognized in law, is so thoroughly recognized in practice that it has been taken for granted. There might possibly be some excuse for placing on the statutes this provision, that, as a member and as part of his duties, the elected representative should have some responsibility in regard to appointments. That would place it upon a certain basis of principle, and though I think the principle would still be wrong, nevertheless there would exist some basis of principle. But when that is not done, when the appointments are made as they have been made in the past and as undoubtedly they will be made in the future, then it is based upon no principle whatever but is simply a reversion to the most blatant form of political patronage. For my part, I cannot understand any member being anxious to secure political patronage. I remember that when the Right Hon. Arthur Meighen was leader of the opposition, speaking to me on this very point, he made the observation that he could not understand any member of the house or of the government being desirous in any way of extending the field of patronage or of securing for himself greater responsibilities than he already had, inasmuch as every position which he filled meant that he created nineteen enemies and one ingrate. That may be so, but there are a great many who are perfectly willing to accept that responsibility and face that danger. I am not going to take up the time of the house on this question. Nothing I can say will alter in any way the opinion of the house, but for my own sake and in order to make my position clear I say not only that I am definitely opposed to this clause but that in its actual working-out, what

has been said by various members as to responsibility of the member and the principle which underlies it, the principle of representation, has no bearing upon the question at all. This will be simply a reversion to that type of patronage which I consider most objectionable, and from which this class of the public service has been freed to a large extent; and so far as I can judge it will, particularly in those parts of Canada about which we have heard so much during the last few days, simply result in confusion in the ranks of the public service. There will be a host of dismissals after every election and a host of reappointments by political friends, and to that extent there will be a destruction of the merit system upon which we pride ourselves that our public service is based. I cannot speak too strongly against that phase of the report nor can I possibly support the amendment.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Bill reported.

[Stage Direction]
The house resumed from Friday, May 20, consideration in committee of Bill No. 81, to amend the Winding-up Act.
Hugh Guthrie: Mr. Chairman, this bill
was passed by the committee but stood over at my request in order that an amendment might be made to bring it up-to-date with the amendments to the Bankruptcy Act passed last week. I move that the following be added as Section 3:
Section 23 of the said act is amended by adding thereto the following subsection:
(2) In the case of any company except building societies, incorporated banks, savings banks, insurance companies, trust companies, loan companies and railway companies, the court shall not appoint as liquidators any person who is not licensed as a trustee under the Bankruptcy Act.


[Stage Direction]
Amendment agreed to.
Bill reported, read the third time and passed.

Hugh Guthrie: Mr. Speaker, an arrangement was made with the hon. member for Mackenzie (Mr. Campbell) to go into supply in order that he might have an opportunity to discuss a cer-41761-206
Supply-Indians-Radium
tain matter, and I therefore move that the house go into committee of supply.
Motion agreed to and the house went into committee of supply, Mr. Geary in the chair.



NATIONALIZATION OF RADIUM

[Stage Direction]
To provide for expenses connected with the administration of Indian Affairs, including salaries, supplies, relief, medical attendance, hospitalization, dwellings, agricultural activities, surveys, roads, bridges, irrigation, dyking, education, etc., and a grant of $100,000 approved by parliament in the session of 1926-27, $3,873,000.
Milton Neil Campbell: Mr. Chairman, under
this item I desire to discuss the matter of government control or nationalization of the radium deposits in the Great Bear lake district. The material which I have under my hand would take me forty minutes or more to place on record, but because of the lateness of the time and the desire for early prorogation I have abbreviated my material and will take up as little time as possible. However, I consider that this matter is of sufficient importance to merit some consideration by the committee even at this late date. I had arranged with some hon. members of the medical profession to assist me in this discussion and to deal with it more from the technical standpoint, but unfortunately several of these hon. members were obliged to leave over the week end and are not present. Perhaps I may be permitted therefore to deal with this matter from the technical point of view.
I have gone very carefully through the report of the cancer commission recently appointed by the Ontario government. I refer to what is known as the Cody commission. In this report it is pointed out that the facilities in Canadian hospitals for dealing with cancer are totally inadequate, that is with respect to the supply of radium. It is stated that the largest hospital in Ontario has less than half a gramme of radium on hand while some clinics in the United States, the British Isles and on the continent of Europe have eight or more grammes. I might point out that there are about twenty-eight and one-third grammes to an ounce. At the present time a gramme of radium is worth about $70,000 and there is only about one pound available in the whole world. There are about sixteen grammes of radium in Canada at the present time. The commission's report states that at present day prices radium to the value of about $200,000,000 is urgently needed throughout the world for the war on cancer. The commission

Supply-In dians-Radium

recommends that the government appoint a radium commission for the purchase, control and distribution of that product. It is pointed out that in Great Britain there is a national radium trust and a radium commission to look after the purchase, distribution and use of radium. Belgium, it appears, produces about 95 per cent of the world's annual output of radium, and the control by the Belgium government constitutes a trust which limits the supply, holds the price at the figure I have indicated and prevents there being a sufficient supply to meet the needs of the world. Radium is particularly valuable because it is practically indestructible. The report indicates that the mass disintegrates at the rate of one per cent every twenty-five years. Therefore the radioactivity of radium will last for a period of about 2,500 years.
With respect to cancer, the report states that this disease is wide-spread, and the evidence appears to be conclusive that it is increasing over the whole world. In the mortality returns for every country in the world, cancer has ousted tuberculosis from second place in causes of death, the first being held by heart disease. In 1929, deaths from cancer in Canada numbered 88.7 per 100,000 of the population; in 1930, the last year for which figures are at present available, this had risen to 93.3. In the United States, in 1930 the number was 96 per 100,000, while in 1900 it was only 63. The report points out that from the beginning of the time when there were tabulated records, there has been a progressive increase in the number of deaths from cancer. Taking the state of Massachusetts alone, in 1842 the deaths per 100,000 were only 13; in 1860 this had risen to 26; in 1900, to 71, and in 1928 it had risen to the alarming figure of 130. May I quote from an address delivered by Senator McRae and quoted in the Ottawa Journal as follows:
Doctor Ellis MacDonald, director of cancer research in the university of Pennsylvania, says that 100 additional grams of radium, if properly applied, would save in the United States alone the lives of 30,000 people every year.
. It goes on to point out that the supply and the price are under the control of the Belgian trust which is a part of the activities of the Belgian government. Radium is mined very largely in the Belgian Congo. I understand guards surround the mines so that no one can go there and see What is being done and there seems to be a general suspicion that the supply is limited and controlled to such an extent as artificially to raise the price and to limit the supply of radium available for the use of the world.

May I quote again from a Canadian Press despatch from Calgary, dated April 20, as follows:
A warning that European interests were seeking control of Canadian radium production was voiced to-night by Doctor H. W. McGill, Conservative member of the Alberta legislature for Calgary.
Doctor McGill made the disclosure just prior to his departure for Edmonton to attend a meeting of the Medical Council of the Alberta College of Physicians and Surgeons. He said he would place the matter before the meeting.
May I again quote from a recent editorial in the Toronto Globe? It says:
Some anxiety is expressed by those who assume to speak for mining interests lest General McRae's proposal for government control of the new radium deposits in the Great Bear lake region may lead to confiscation of rich ores anywhere, and thus menace the whole mining industry:	Such an inference is surely
not warranted.
Senator McRae made his appeal in behalf of suffering humanity, which needs radium for cancer treatment and can get it only at very high cost. Only a few days ago a New York hospital received five grams of radium on loan from Belgium, and the value is set at $350,000. If Canada has the reputed great quantity of radium in its pitchblende ore at Great Bear lake, it has a chance to render a tremendous service, but it should be done on a fair basis.
Again from a recent editorial in the Ottawa Journal, may I quote as follows:
Those who realize what radium has come to mean in fighting the scourge of cancer must welcome these words, spoken in the Senate on Wednesday by Mr. Meighen:
"Government control of radium production and conservation is having immediate and earnest consideration. It looks as though Canada had a supply of radium of inestimable value to this country and to the world, such as to imply the necessity of a thorough and most careful investigation. I am confident that a policy involving control by the government will be worked out."
Radium is manufactured in a number of countries, the first factory having been started in France six years after the discoveries of Mme. Curie. But while small supplies come from Bohemia, Colorado and Portugal, the chief source of production is in the Belgian Congo, and, unfortunately, a monopoly. The result of this monopoly, so it is alleged, is that radium is at a prohibitive price, its benefits denied to the vast majority.
In the Senate on Wednesday Senator McRae said there was a danger of Canada's radium supply passing into the hands of foreign control, a development that would withhold its benefits from the Canadian people. This, should it come to pass, would be intolerable. The province of Ontario has just had a report from a cancer commission urging the creation of cancer clinics and the use of radium in combating the disease. It would be a crime if, in the light of this, Canada permitted outside interests to step in, seize control of her radium resources, and exploit them for private profit.

Supply-Indians-Radium
I may say that 1 have under my hand a considerable number of geological reports on the Great Bear lake area. There is, of course, a good deal of doubt as to the extent of those deposits, and owing to the desire to save time now I shall not quote from those reports as extensively as I had intended. I shall, however, refer to a few of them just to show that they indicate, in the opinion of geologists, there are reasons to believe we have in that area a very considerable amount of pitchblende or radium ore. From memorandum series No. 51, issued by the Department of Mines in October, 1931, I quote the following:
From a small surface pit sunk to a depth of twelve feet at the original discovery point, eight tons of cobbed, high-grade pitchblende were taken in the early part of this year.
Again it says:
Beyond any question, the pitchblende deposits at La Bine point constitute a very valuable source of radium. At the present value of radium, ore could easily meet the cost of shipment to rail ($400) per ton. Improved transportation facilities, however, will have to be provided if serious production is to be attained.
Then it goes on to explain what the transportation facilities are at the present time and which would appear to be totally inadequate to render any service in the movement of ore from that area to outside points. May I interject at this point that owing to the impossibility, as those reports indicate, of getting the ore out, I see no object whatever in throwing that area open at the present time, and I suggest to the minister the necessity for keeping it closed and withholding development until better transportation facilities are provided. The report goes on to give a good deal of technical information which is valuable for my argument, but owing to the limited time, I shall not weary the house with it.
Again, from memorandum series No. 48, issued in March, 1931, by the Department of Mines, I quote the following:
There is no question but that an interesting discovery of pitchblende has been made. Its possible commercial value can necessarily only be determined by the proving up of tonnage, and this will have to await results of further development work.
I quote from a similar bulletin issued by the same department entitled, " Mineral development activities in district of Mackenzie, Northwest Territories," and under the heading of "Pitchblende and Silver" I find this:
According to assays made by the Department of Mines from samples obtained at La Bine point, Echo bay, at the east end of Great Bear lake, the pitchblende deposit is very rich in uranium oxide assaying from thirty per cent to 41761-206J
sixty-two per cent, corresponding to a content of one gram of radium in thirteen tons and six and a half tons of ore respectively. These pitchblende veins have been traced over a number of claims. Silver is associated with the pitchblende in the form of wire silver or leaf silver. Silver contents have been found to range from 1,634 to 8,965 ounces per ton.
From a similar bulletin by D. F. Kidd, geological survey, Department of Mines, entitled "The Great Bear lake-'Coppermine river district" I quote:
Two main types of mineral deposits have been found in the area; (a) copper deposits; (b) pitchblende deposits with silver and silver deposits.
The article goes on to explain the discoveries, but I shall not take up the time of the house elaborating on that.
There would appear to be every reason to suppose that sufficient radium for the world's use will be secured in that area, and Canada owes it as a sacred duty not only to our own people but to suffering humanity throughout the world to prevent this very valuable resource from falling into private hands, or at all events to see that if it does fall into private hands it shall be properly controlled by the government and be conserved for the use of suffering humanity. The existence of the Belgian trust, the activities of that body, and the extent to which the price of radium has been raised in consequence, make it urgent that the Canadian government on behalf of the Canadian people should take an interest in this matter and see that something is done before it is too late.
I had a number of questions to submit to the minister with respect to this matter, but I shall not put them on record now. In order to save time I handed a memo, to the minister this afternoon, and I trust that in his reply he will cover the questions that I raised therein.
There are other evidences on record to prove that the Belgian government are making an enormous profit out of this trust in selling radium at the price of $70,000 per gramme. The results are of tremendous benefit to the Belgian treasury, but at the expense of sufferers throughout the world.
The Department of Mines of Canada estimates that the cost of producing radium from the Great Bear lake area should not exceed $10,000 per gramme, and in this $10,000 is included $4,000 as the cost of freight under present conditions of transportation. If railways covered that area making it accessible, say, to Winnipeg or Ottawa, where there is cheap electric power, the radium could be purified at the minimum of cost-
Supply-Indians- Radium


Mr. MURPHY:: Might I ask from what report my hon. friend obtains the figure as $10,000 per gramme as the cost of production?


Milton Neil Campbell: That figure is given in
one of the reports issued by the Department of Mines. I intended to quote my authority for the figure, but owing to the desire to save time I did not make a note of it, but I got the figure from one of the bulletins issued by the department. Deducting freight of $4,000 per gramme would leave the production costs at $6,000 per gramme, and if one figures $200 per ton, on a basis of ten tons to produce one gramme, which I think is a conservative estimate from the reports from which I have already quoted, it would bring the production costs down to about $6,200 per gramme. Now my argument is this. It is uneconomic and unfair to the people of Canada to try to develop this resource with the transportation facilities that are available in that area at the present time. I am not worried about the development being held up. On the contrary, let us hold it up until the proper time when proper transportation facilities are provided. If this area is as rich in radium, copper, silver and other minerals as we have reason to suppose, there is no doubt that railways will be built into the area in time, and when railway facilities have been built the cost of producing radium will be brought down to a point where it can be made available to all our hospitals.
Judged by the publicity which this area has received, there is no doubt that there will be a rush into the district this summer. Various press reports that I have under my hand would indicate this. There are great dangers in that. These claims will be taken up. With the present difficulty in getting in supplies there is little or no doubt that there will be practically no development work done at the present time. As a matter of fact, the Department of Mines itself has declared a moratorium as regards assessment work on these claims, so that those now staking claims are given one year's extension in which to do the necessary amount of work, and there is very little doubt that when another year comes around there will be demand for another moratorium. There you have a valuable natural resource held in private hands. The moratorium secures to the claim holders their rights, but at the same time the natural resources are being alienated from the public. In connection with the movement of stake-claimers into that area, may I quote from an article in the New York Sun of April twentieth last, which says that one thousand veteran gold prospectors will set out from

various parts of the United States and Canada for the Great Bear lake district in the hope of staking their claims this year.
The Ottawa Citizen of April 28 had a copyrighted article by Frederick B. Watt, referring to the silver in that district assaying ten thousand ounces to the ton, and the article states that at the present price of silver this would mean S2,500 a ton.
May I refer to the statement made by the Prime Minister when introducing the radio bill into this house a few days ago. He stated that there was no doubt that at some future time the people of Canada would regret that any of the natural resources had ever been alienated from the crown, and that remark provoked applause from every part of this chamber. He stated that the air, which is one of our natural resources, was now to be preserved to the people of Canada. If that principle is sound with respect to the air as a natural resource, I say that it is doubly true with respect to something that is needed to preserve human life-the use of radium- and I do hope that the minister before this debate ends will indicate some policy on the part of the government that will give us a hope that this natural resource will not be alienated from the people of Canada. I trust his statement will be just as strong as, and perhaps a little stronger than, the statement from which I quoted issued by the government leader in the Senate.


Mr. IRVINE:: I should like to endorse the sentiments expressed by the previous speaker, and perhaps go a little farther in respect to the natural resources to which he has referred. He laid emphasis upon the necessity of controlling the exploitation of radium in the different sections. I agree with him, but I should like to go farther and say that other natural resources in those sections no matter what they may be should also be preserved.
I was particularly relieved the other day by the statement of the Prime Minister to the effect that the air was going to be preserved for the people of Canada. All my life I have had a nightmare that some day a huge corporation would bottle the air in the atmosphere surrounding the earth and sell it bo us at so much a bottle. I was afraid I would not be able to buy my bottle. Happily the radio bill has prevented such an occurrence. AVhat is true of the air is just as true of the land and the minerals therein. They belong to the people of Canada just as much as does the air. With all the lessons history has provided, surely the time has come when a government with any vision should take stepa to prevent the exploitation by individuals for

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private profit of our natural resources. I have before me an extract from The Canadian News Bulletin issued by the Minister's department, which is as follows:
According to reports reaching Ottawa a great many mineral claims have already been staked in the area adjacent to Great Bear lake, Northwest Territories, and there is every likelihood that many more will be staked this summer. Some prospectors have already gone in by aeroplane and others are planning to go in by water transport as soon as the ice goes out. In view of this great activity the topographical survey, Department of the Interior, Ottawa, has reprinted the manual respecting the survey of mineral claims in dominion lands for the use of dominion land surveyors who may be called upon to make official surveys of these claims.
In other words the department is facilitating-and quite properly so while the old system lasts-the requirements of private speculators and prospectors.
My point is that if there are rich deposits of ore of any description in the Great Bear lake section of this country, that ore belongs to the people of Canada. It belongs not only to the people who are living now but to those who may be here two thousand years from now. Because of that fact this government should take immediate steps to prevent exploitation. If there are no mineral deposits in that section the government should take immediate steps to prevent speculation in respect of something which does not exist. We have had enough of that sort of speculation. In either case I hope the government will not only take the advice of the previous speaker to prevent development by private individuals, but that it will proceed to ascertain whether or not there are minerals, and take the appropriate action in relation thereto. A few pounds of radium would pay the national debt. Why should the government permit some individual to derive the entire benefit therefrom? Here is an opportunity to safeguard for Canadians that which is their proper right and heritage.


William Richard Motherwell: I am sure the
Superintendent General of Indian Affairs must feel he is getting plenty of advice and I hesitate to give any more. There were certain commendable actions taken by the former Superintendent General of Indian Affairs in conjunction with the Department of Agriculture, and I feel sure that after the minister's attention has been drawn to them he will continue the work then begun. I refer to keeping herds on Indian reserves free from bovine tuberculosis. [DOT] There was a time some years ago when Indian reserves were polluted wfith bovine tuberculosis, and there was a
consequent spread of the disease to Indian children. I hope my hon. friend will work in the same harmonious cooperation with the Minister of Agriculture to keep the herds clean from that dread disease. Another good work undertaken by his predecessor was the establishment of a chain of splendid hospitals throughout the various reserves. I Should like to say one word in connection with the retiring Indian commissioner, Mr. W. M. Graham.
I will go into that later in the day when we get on to the Indian question proper.


Thomas Gerow Murphy: Mr. Chairman, hon. members have dealt at some length with the possibility of the government taking some action to control the development of radium deposits in the Northwest Territories. In that connection may I say that in 1930 a deposit of pitchblende was discovered by some private prospectors at Echo bay, a point situated on the eastern short of Great Bear lake. Some twenty tons of ore from that vein have been shipped to Ottawa, and during the past few months and even at the present time the Department of Mines are carrying on in their laboratory certain experiments with a view to the reduction of the ore in order to ascertain the quantity and quality of the radio active elements which may be present therein. The ore itself contains not only radio active elements but also a large percentage of silver. In discussing this matter it is well to remember that the vein of pitchblende was discovered through the initiative of private prospectors and to remember also that they have staked their claims and that under the laws of this country they have secured certain rights therein.
At present on account of the lack of transportation it is difficult to transport pitchblende or copper ore from that territory. May I point out however that there are facilities available at the present time which need only a certain amount of development to make them available throughout that season of the year when waterborne transportation may take place. From Waterways, Alberta, to Great Bear lake the system is navigable with the exception of two portages one along the boundary in the northern part of Alberta, where, at the present time, there is a motor road, and the other on the Great Bear river between the Mackenzie river and Great Bear lake, a distance of about ten or twelve miles. A certain sum has been placed in the estimates this year looking towards the building of a portage road around the rapids on that river. Therefore transportation from the area around Great Bear lake can be made available during
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that period of the year when waterborne transportation is possible. In addition to that, ore of a certain richness can be transported by means of aeroplanes. I have been informed that the silver deposits in certain parts of the vein at least are of such richness that it is highly profitable to transport the ore even by aeroplane. My information is that a silver content as high as 22,000 ounces to the ton has been found in some of that ore.
Dealing now with the value of the pitchblende deposit in connection with radium, I may say that at present it is undetermined. It is only in its infancy, and we do not know yet the extent or value of that deposit. Experiments which are being earned on at present by the Mines department are designed to obtain that accurate information so far as possible, and the process which has been worked out by their chemists has been very successful so far. I am told that the process they have evolved is more economical than the process used in Belgium to reduce the ore which they obtain in the Congo. With regard to radium, I may say that its present selling price varies from about $50,000 to about $75,000 per gramme, and that in all about GO grammes were sold last year. I have been unable to secure any definite figure as to the cost price of that radium, though it is currently reported to be from 810,000 to $15,000 per gramme. Our importations of radium have been as follows:
1928		 $ 17,597
1929		 40,687
1930		 46,012
1931		 207,735


Mr. SPENCER:: May I ask where that
was imported from?


Thomas Gerow Murphy: I have not that information, although I may say generally that up to 1930 radium was produced in Belgium, in the United States and in Czechoslovakia. In 1930, however, the United States ceased the production of radium, since the Belgians were able to put it on the market at a much lower figure than was possible in the United States. Belgian radium sells for from $50,000 to $70,000 per gramme, while the best the United States could do was about $120,000 per gramme. So I take it that the radium imported since 1930 has come from Belgium. I stated a moment ago that radium was produced in practically only two countries, Czechoslovakia and Belgium, but at present no exports are being made from Czechoslovakia, where the company is under state control. Therefore at present the world is dependent upon the con-

cern in Belgium known as the Union Miniere de Haut Katanga, and the supply of ore is obtained from the Congo which, before the discovery in the Great Bear lake district in the Northwest territories of Canada, was the richest in the world. Radium has been discovered not only in the Great Bear lake district; there are radioactive ores in Ontario also, at Wilberforce, which is in the county of Haliburton. A private company is making certain experiments in that area. While the mineral deposits in the Northwest Territories, of course, are under the control of the Dominion government, the mineral deposits in Ontario are under the control of the provincial government.
Previous speakers have stated that in their opinion the government should take steps to see that this valuable element, radium, is controlled if not operated for the benefit of the people of Canada. I suppose they meant also for the benefit of the rest of the world, though they had particularly in mind the people of Canada. But may I point out that at the present time this pitchblende deposit in the Northwest Territories is in private hands. Those areas have been staked under the laws of this country, and those men have obtained rights. While it is certainly within the competence of the Dominion government to take such steps as may be deemed wise to preserve for the people of Canada the benefits which may come from the use of radium, still those private individuals must have their rights looked after under our laws.


Edward Joseph Garland: I understand there is a suspension of the provision in connection with the development work that must foe done each year on the claim. To what extent has that suspension been carried?


Thomas Gerow Murphy: That applies to all minerals, both in the Yukon and in ithe Northwest Territories. Owing to the present low prices of metals the rules governing development or representation work have been suspended for a .period of a year, but before obtaining his final lease or title to his claim an individual must do .the amount of work provided for under our laws. He is simply given a moratorium of a year; in the final analysis he must do the amount of work required under the regulations.


William Irvine: Would it not be a good way to get rid of those who haye already filed claims if the government refused to give them any further extensions of time?

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Mr, MURPHY: I do not think that is practicable. The moratorium has been granted for a period of a year, during which it is not necessary for them ,to do representation work, though of course they imay go ahead and1 do it.


William Irvine: But when that year is up, if they have not made sufficient improvements to qualify; then if another year goes by and still they have not done any development work, would it not be possible to take back the claims?


Thomas Gerow Murphy: As I said a moment ago, the moratorium is only for a period of one year.


Mr. COOTE:: When was that moratorium granted?


Thomas Gerow Murphy: I have forgotten the dates. It wtas some months ago in the case of the Northwest Territories, and two or three months ago in the case of the Yukon.


George Gibson Coote: Was that done by order in council?


Thomas Gerow Murphy: Yes, under the regulations.


Henry Elvins Spencer: At whose request.


Thomas Gerow Murphy: The request came from different quarters, but principally from the prospectors themselves. I may say that the moratorium was granted for several reasons. One was that this region is very inaccessible and there are many difficulties in the way of transportation, as other speakers have already pointed out. Then again there was the low prices obtained for minerals such as silver and copper, which are the principal minerals found in those areas.
With regard to the government's control of radium, it goes without saying that in the first instance the mineral resources of the country belong to the state. That, of course, is self-evident; dt is granted. But we have had on the statute books for a long t/ime laws prescribing how these resources shall be disposed of, and until the present time the mineral resources of this country at least have been developed by private enterprise. Private prospectors have gone into these unknown quarters of Canada and have spent years, sometimes practically a lifetime, prospecting, and have met with many disappointments, and at is only a certain type of individual who will undertake that work.


Henry Elvins Spencer: What royalties are demanded?


Thomas Gerow Murphy: I shall come to that in a moment. There are only two methods by which these resources can be brought into
production: one is by the government actively going into the mining business or, on the other hand, by private enterprise; and until the present time they have been developed solely by private enterprise. These radium deposits are still in their infancy. The extent of the deposits is not yet known, nor to a certain extent has their richness been ascertained. Moreover, there are in Canada no refineries which are capable of carrying on the refining of that ore, at least commercially. The only place in which they can be refined at the present time is a small laboratory in the Mines department in Ottawa, and the process of reducing that ore has not yet been completed even here.
As regards the control which the government exercises at present, the payments which are made to the government in the way of royalty are provided for by certain regulations, which set out what the state shall receive from the private owners, those who are actually developing these mines. Possibly I cannot do better than read the clause which deals with this point. It is to be found in section 93 of the quartz mining regulations:
There shall be paid to the crown on every mine acquired under the provisions of these regulations, or under the provisions of the quartz mining regulations which preceded these regulations, an annual royalty on any profits of such mines which exceed the sum of $10,000 during any calendar year, and the owner, manager, holder, tenant, lessee, occupier or operator of the mine shall be liable for and shall pay to the crown an annual royalty as follows:
(a)	upon annual profits in excess of $10,000 and up to $1,000,000, three per cent;
(b) on the excess above $1,000,000 up to $5,000,000, five per cent;
(c) on the excess above $5,000,000 up to $10,000,000, six per cent;
(d)	on the excess above $10,000,000, a proportional increase of one per cent for each additional $5,000,000.
In addition to that, subsection 4 of that section reads:
The annual profits shall be ascertained and fixed in the following manner. The gross receipts from the year's output of the mine or, in case the ore, mineral, or mineral-bearing substance, or any part thereof, is not sold but is treated by or for the owner, tenant, holder, lessee, occupier or operator of the mine, upon the premises or elsewhere, then the actual market value of the output at the pit's mouth or, if there is no means of ascertaining the market value, or if there is no established market price or value, the value of the same as appraised by the mining recorder shall be ascertained, and from the amount so ascertained, the following and no other expenses, payments, allowances or deductions, shall be deducted and made.
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I will not read the manner in which the deductions are to be made, as that is not relevant to the argument, but the important point of that clause is this:
The actual market value of the output at the pit's mouth or, if there is no means of ascertaining the market value, or if there is no established market price or value, the value of the same as appraised by the mining recorder shall be ascertained.
That puts it in the power of the minister of the day to set a market value, and the price of that particular mineral at the pit's mouth. In addition to that, the following clause was added to the present regulation in force this year, being section 130:
The'governor in council reserves the right to make such additional regulations from time to time as may appear to be necessary or expedient in the public interest, governing the development and operation of any mineral claim or mine acquired under these regulations, in which, in the opinion of the minister, ores containing radioactive elements occur in sufficient quantity for extraction; also regulations governing the production and conservation of such ores and the elimination of waste.
Those are the regulations at present in force, dealing with government control so far as mineral operations are concerned.


Charles A. Stewart: When was
that regulation passed? What is the date of the order?


Thomas Gerow Murphy: They became effective on April 2, 1932. I do not think I need extend my remarks at greater length at the present time, except to say this. The government have not been unmindful of the value of radium to the people of this and other countries. We have been told by the medical profession that radium is very valuable in the treatment of cancer. We know also that the present supply of world radium is controlled by a monopolistic company, and we have also been informed that the price of radium is altogether too high in view of the cost of producing the mineral, although as I said earlier in my remarks, we have no accurate figures as to the actual cost of production. The Belgian company, however, claim that they have materially reduced the price of radium, from $120,000 per gramme to $70,000 and, in larger quantities, $50,000 per gramme.
How may the government exercise control over these deposits? The deposit which is now known to be in existence, although as to its extent or richness we have no definite data, is in private hands. There exists in Canada no commercial plant for the reduction

of the ore. The right to that deposit has been acquired by prospectors who have spent a long time in the north, men who went in there and have pitted their strength against the elements, have suffered hardships and. under the laws of Canada, have acquired certain rights. These rights must be respected.


Milton Neil Campbell: If the department had enforced the regulations the rights would have been extinguished; it is only iby the moratorium that they have any rights at all.


Thomas Gerow Murphy: I must take exception to the statement of the hon. member; it is not quite correct. Simply because the regulations have been changed to allow a year's moratorium, it does not necessarily follow that these men would not have gone ahead and done their representation work. They might have done so and it is hardly correct to say that this work would not have been done if the moratorium had not been granted.


Charles A. Stewart: They are operating now.


Thomas Gerow Murphy: I am not in position to say that they are not even now carrying on that representation work. They are actually mining to-day and I would be very much surprised if they are not doing much more than the $100 per year of representation work required by the regulations.


Milton Neil Campbell: Why the necessity for the moratorium?	[DOT]


Thomas Gerow Murphy: The moratorium was not put on solely at the request of the discoverers of the pitchblende deposits, in fact I do not think they made any representations. The representations were made by those who hold claims of zinc, lead, copper and silver deposits rather than .by those who are engaged in mining this radium ore.
As I say, this matter could be controlled by means of royalties so that the state would obtain what is considered to be a fair share for the state, that is, for all the people. Legislation could be passed by this parliament whereby in the case of radium a royalty in kind could be made available for the people of Canada. No legislation exists at the present time to permit this action being taken, and I merely mention the different methods by which control could foe exercised. The government is fully aware of the value claimed for radium in the treatment of disease, but as to just what method will be adopted in order to secure for Canada the 'benefit which is justly her due, I am not in position to say. This

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32S1
matter is actively engaging the attention of the government and we are prepared to take such necessary steps as will make radium available to the sufferers in Canada at the lowest possible price.


William Irvine: Mr. Chairman, the statement of the minister as to how these people became possessors of resources which were properly held by the crown is the ordinary orthodox statement. Surely the minister will agree that if no definite action is taken now, pretty soon all these resources will foe taken up by individuals in precisely the same way as these people to whom he has referred have obtained their rights; and before very long there will not be any natural resources left in the name of the crown. Of course this is not to be laid at the door of the minister, but the responsibility is upon him to take a new step away from that course which in the past has not been for the benefit of the people of Canada. I think the recent statement of the Prime Minister is the most important that has ever come from the treasury benches, and his remarks apply just as much to the resources now under discussion as they do to air and other resources. Unless the minister definitely says that the time has come for us to stop the exploitation of these resources for private profit, it may go on forever. The government should declare that all the resources in the area under discussion shall be regarded as being for the general advantage of Canada. Some of the unemployed Should to put to Work immediately to examine the whole field and estimate its value. If it should be found that there is value, either in radium or other minerals, then the government should finance the development by creating (sufficient Imoney to do po, thus absorbing a great proportion of our unemployed and at the same time garnering the wealth which might be applied to the paying of our national debt. The government's course is clear, and I should like to ask the minister if he will not go so far as to assure the committee that the government will not extend the time limit to those prospectors and others who have obtained leases or rights in respect of mineral resources in the Great Bear lake district. Will the minister give the undertaking that no further extension of time will be given to those who have filed claims?


Thomas Gerow Murphy: I am not in position to give a categorical answer to the question asked by the hon. member, because the action of the government would be predicated to a great extent upon conditions. The hon. member has
asked me to state that no further extension of time will be granted to those who are now in possession of mineral claims, but I am not in a position to give that assurance. However, I am willing to give this matter every consideration. I assure the committee that I have no desire to act in a manner other than that which will be for the benefit of all the people of Canada. The prospector who may have spent many years of his life, perhaps all of his life in discovering and prospecting these areas should not be cut off from the fruits of bis labours because of any drastic action on the part of the government.


James Shaver Woodsworth: It seems to me
most regrettable that the minister should take the attitude he has just taken. Apparently in his eyes the prospector fills the whole horizon, and it makes veiy little difference-


Thomas Gerow Murphy: I did not make any such statement as that.


James Shaver Woodsworth: I did not suggest
the minister had made the statement; I said iit was apparent to the rest of us that in the eyes of the minister the claims of the prospector were of paramount importance. The minister began by pointing out that the mines had been discovered by private prospectors and were now in private hands, and these facts were set up as serious objections to our taking any action. I think we all recognize that the prospector has certain claims, and. every one of us would foe glad to see that his rights are safeguarded. But in practically all mining areas it is not the prospector who makes the fortunes out of the mines; almost invariably it is the promotor. Generally the prospector has not the capital with which to develop the mine; he has to sell out, sometimes for a mere pittance, to the promoter who goes in and reaps 'the profits. It is not going to be different in a case of this kind. We are all willing to grant sufficient to remunerate the prospector, but it becomes evident that there are other claims than his. Let me give one iEuistration. Some hon. members may remember a few years ago the claims made by certain individuals who in the early days, had gone into Churchill, put up with all sorts of hardship, and laid claim to lands that latex on were to become the site of the present harbour and town of Churchill. It seemed then 'that there were certain claims that ought not lightly to be set aside; yet it was recognized that larger claims had precedence. Because certain people had taken up homesteads there in the early days, that did
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not mean they were forever to levy toll on the rest of the Dominion of Canada through the development of a railway and port in the north.
The minister states that certain transportation facilities are available, and yet elsewhere he rather suggests that a moratorium has been granted because there are not sufficient transportation facilities to enable the development to proceed. This is, after all, a minor matter. The lack of transportation facilities, the fact that the value is, as the minister has said, undetermined; the further fact that at present there is no commercial plant for reduction'-all these considerations make the present a particularly opportune time to take possession of those areas and deposits. If we wait for one or two ot three years, as is so frequently the case, it might very well be urged that vested interests are at stake. By that time the promoters would be in control and would have behind them large amounts of capital. But now we are getting in on the ground floor, as apparently the only man who has claims at the moment is the prospector, who could very easily 'be satisfied.


George Brecken Nicholson: What about those who have furnished all the money necessary to enable the prospectors to go in there and do the work they have been doing for the last ten years?


James Shaver Woodsworth: If we expropriate
the mining claims, the simplest method would be to make a refund. That is what we do in expropriation cases of various kinds. Take, for example, the man who has settled and built a little home; a railway is going to run right through his place and his land is expropriated. The owner may or may not be refunded all he has invested; it is considered a minor matter whether he is compensated to that extent or not. The railway, it is decided, must go through, and the court determines what under the circumstances the man should receive. It would be comparatively easy to indemnify those who have furnished the money to grubstake prospectors.
The minister further says that so far the development of mining areas has been by private enterprise. We all admit that, but our contention is that we have reached the stage when that policy ought to be abandoned. That is especially true in this particular case where the physical welfare of so many people is at stake. There seems to be n'o reason why in the future we should continue the haphazard policy of private development that in the

past has undoubtedly meant the exploitation of our great natural resources in order that a few might grow wealthy at the expense of the great majority of the people in the community.
The minister says that he is willing to give a fair share to the state. Our contention is that the state owns all; not that a few royalties should be paid to the state, but rather that the state should be considered, in the words of the Prime Minister the other day, as the trustee for development in the interests of all the people. That is a new point of view, and it is one that we in this corner should like to put forward now. It is quite true that in the development we must reward the prospectors, those who have gone in and done the pioneer work, but we have reached the stage where it should be recognized that not a small royalty but the whole resources should belong to the state. The crumbs should be thrown to private individuals not to the state.
One point that strikes me as being of the greatest importance in this matter is the claim made by our scientists that radium is essential for the treatment of cancer. None of us is an expert in that phase of the question; we have to take what the medical men tell us. But if their statements are at all correct, it means that the welfare, the safety, the health of hundreds of thousands of people are at stake. If that be true, I can hardly understand the attitude of the minister in dilly-dallying with an important question of this kind and refusing to state a forthright policy in dealing with it. It would seem to me to be the right thing to settle this matter as one of principle. If it is discovered within the next few months, or even if it is at the present time held by scientists, that radium is essential in the treatment of cancer, the government should immediately set aside those areas in which it is produced as belonging to all the people and proceed to work them in order that radium may be made available for those who need it.
Mr. STITT i(Neison): I thought the hon. member for Winnipeg North Centre (Mr. Woodswortli), having been up through the north would have a greater knowledge of the usefulness of a prospector than he appears to have according to the statement he has made on the floor of the house. Were it not for the prospector, there would not today be a mining company operating in Canada.


James Shaver Woodsworth: Granted.

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Mr. STITT (Nelson):: The prospector must come first. It is not fair to compare a prospector with a man who owns either a home or land which may be expropriated by a railway company. The home or land owner has an investment only in that home or land, while the average prospector has invested many years of his life. He goes out into the woods and fields and endures all kinds of hardship, half the time eating salt pork and bacon. I know whereof I speak, because I have done it myself. He goes far afield and he makes these strikes. Then, of course, the mining company comes in and acquires the claims. The statement that the mines are exploited for the benefit of a few is not correct, because thousands of people own shares in mining stocks and are in receipt of big dividends from them. It is true that the biggest stock owner receives the largest dividend.
In the case of this Great Bear lake strike. I happen to know Gilbert La Bine, who made it; how he travelled the 2,000 miles into the Arctic, pulling behind him a toboggan with his tent and grub, later leading by hand his partner who was also a prospector and who was snow blind. When he arrived at La Bine point, he found that he could not take his partner any further and he had to make camp. After he had fixed his partner up in the camp and got food for him, he looked around him and made this discovery. The La Bine brothers have been prospecting for twenty years. They have made their strike after a lifetime of toil.


William Irvine: Why not, as a reward, make this prospector the next governor general of Canada?


Bernard Munroe Stitt: If we have anything against him, we may do that. It is very unfair to say to that man: we are going to take away from you what you have been all your life looking for. A number of people are behind this grubstaking of La Bine; there are hundreds of people interested in it. It is known as the Eldorado Gold Mining Company, with about $2,000,000 worth of shares held all over Canada.


James Shaver Woodsworth: How much money has so far been invested in the development at Great Bear lake?


Bernard Munroe Stitt: I imagine about
$30,000 or $40,000 on prospecting, exclusive of development work now going on. I am interested in that country myself, and to send one prospector in there costs on an average $1,500. It costs from seven to eight dollars a day to feed your prospector, over and above
what you pay him for his work. It would be most unfair at this time, before the area has been proved, to talk of expropriating it. The government can always protect themselves. If they want that radium, they can forbid its export just as they forbid the export of gold; but to talk about taking it away from the prospector, well, you had better not come up to my constituency and talk that kind of thing.


George Gibson Coote: It is quite evident from the remarks of the last speaker that prospecting for our mineral resources has been carried on in a very haphazard way indeed. It is time these activities were carried on much more thoroughly and systematically than they have been in the past. Many geologists and mineral and petroleum engineers are at present without employment. The government has lately paid off from the air force nearly forty married men, some of the most competent fliers that we have in Canada, with a splendid record of war service. Some of them have flown across the great mineral areas of the Northwest Territories. Let us employ these men to take aeroplanes into that area, carrying geologists who will prospect the country in a thorough manner. I sympathize with the prospector and would want to see him well taken care of. At the present time the prospectors as well as the investing public are taken care of by the promoter. There has been too much money put into the development of our petroleum and mineral resources for the amount of production that has taken place. I say that the time has come when we should tackle this problem in a businesslike way. We have aeroplanes and fliers, and let us send these geologists up there well equipped to prospect our mineral wealth in that area. Let us start in Canada a real national policy for the development of our mineral resources. Now is the time to do it; for as the hon. member for Wetaskiwin has said, the longer we wait the less mineral resources we will have to take care of. What is the use of reserving all these mineral resources to the crown and then leasing them out to promoters to be used as a basis for stock promotions which are loaded on an unsuspecting public at prices which can never return dividends? In a few cases, of course, handsome dividends may be paid, but I contend that they should be returned to the state.


William Irvine: One more remark. It is a rather strange argument that because one or two prospectors have happened to wander into this north country and have thereby obtained certain so-called legal rights, the government
Supply-Indians-Radium

should not conserve both the present and future interests of the Canadian people. I never heard such an argument as that. Certainly I have no intention of suggesting for a moment that any prospector should be deprived of wages or reward for his services. I suggested in a question to my hon. friend who brought this matter up that I would be willing to make the man governor general of Canada who had encountered such hardships as he described and had rendered such service.


Ernest Lapointe: Give him a title.


William Irvine: We have no titles now, but if a title could be given him, I would suggest that he be given two. It is a man of achievement that we want to put into a position of that sort; there is nothing too good for such a man so far as I am concerned. But I refuse to let him stand in the way of a policy which will be in the interests of Canada for all time; for that is what he is doing according to the argument that has been made here this afternoon. It is a strange argument, and I submit that it should not be considered for a moment. Reward any man who has done service, glorify him, if you like, but safeguard our natural resources for posterity.


George Brecken Nicholson: I would like to say a word with regard to the general question. It is evident that some members who have spoken on this question have very little conception of what the development of a mine really means. Personally I know nothing whatever about the discovery of radium in the Great Bear lake area, but I wonder if my hon. friends have any idea how much money has often to be spent before the man who is developing a prospect can say whether it is really a mine or not, and I wonder how much money this country would have to spend before we could know that there really was a deposit of great value in the Great Bear lake area? Let me give an illustration. In the district in which I happen to live, after prospectors, thousands of them, had gone over the ground carrying their packs and suffering the hardships that have been mentioned, an area was discovered that gave promise of mineralization. In the instance of which I have knowledge five and one-half million dollars in cash have been spent for diamond drilling. The people who have spent that money do not know to-day whether they have a mine or not, but they are continuing to diamond drill. In one area in northern Ontario, through the determination of a mining engineer and a geologist, backed up by a number of men who are interested in this prospect, they have drilled down to 4,700 feet, and they do not know yet whether they have a mine or not. Would the government, 
if someone suggested that we spend five or six million dollars on a prospect in order to prove whether there was anything in it, spend that amount of money on a gamble? And where would the country land in a very short time if the government started doing that sort of thing all over the country?


William Irvine: We spent more than that amount above the estimated cost for the Montreal bridge.


George Brecken Nicholson: If my hon. friend would go through northern Ontario and see what the men are doing and the money they are risking in order to develop one single mine, he would have a better appreciation of the situation. The greatest chances in the world are being taken by men who are willing to spend their money in ascertaining whether they have a mine or not. One of the greatest mines in northern Ontario was brought into production by a group of men who lived in northern Ontario, had come up there from the east, acquired some means, had been prospecting elsewhere, had got one property and sold it, and then went on. After they had spent a million dollars of their own money and of the money of the people that they could get around them, they did not know whether they had a mine or not. Then what happened? Every one of these men pledged everything he had and might have in the future to a bank in order to get a loan to go on with the work. Is this country prepared to put up money on such a prospect as that?


William Irvine: It cost a lot of money for Columbus to discover America. Would my hon. friend suggest that Columbus should therefore have incorporated a company and taken possession of the North American continent for all time?


George Brecken Nicholson: My hon. friend is very clever, but the question is simply this: shall the country take such risks or not? If the country decides to take such risks and sends men out prospecting to develop mines, I have a picture in my mind's eye of the number of mines they will discover.


Angus MacInnis: I do not think it is a question of the country taking risks. The country is taking all the risk there is to-day in providing for unemployment. We have left the development of our natural resources in the past in the hands of private interests who have developed and exploited them for private gain, and as soon as they were exploited to the limit and nothing more was

Supply-Indians-Radium
to be got out of them, the people who were working on these natural resources were thrown out of work to swell the ranks of the unemployed, If the government does not wish to take this step now and safeguard what little natural resources we have left, it will be compelled to do it in the very near future. This is one of the most important questions that has been brought before the house this session. The hon. member for East Algoma asks, should the government risk five or six million dollars on a prospect? Why, the first thing the government did after the election of 1930 was to summon parliament and appropriate twenty million dollars for the relief of unemployment. We are receiving no benefit from our contributions to that end, because we are giving doles and the men are doing nothing. Would it not be better to put them out as prospectors? Many of them would be glad to do this work rather than leave it in the hands of private interests who, very often, are aliens.


Milton Neil Campbell: There is one aspect of this matter which has not (been dealt with by most hon. members who have spoken. I refer to .the question of what is to be done with resources still unalienated. The discussion has evolved into an argument as to whether or not we should expropriate the claims already staked. The minister left an impression on the -minds of hon. members-probably not intentionally-that all -the area had already been taken up. We have every reason to believe that large numbers of prospectors are still going in, and no doubt many more claims will be staked. Separate and apart from the other arguments there is the question as to what is to be done with the remaining unalienaited resources.
There is another matter I should like to discuss, one apart from that of government development. As a matter of fact I did not suggest -that, but I did suggest that the government should take some steps, either by developing the resources themselves or controlling development by private interests, to see that the interests of the people of Canada are protected. I can. see that government members can put up a very good argument as to why they should not carry on such developments. I suggest, however, that action should be taken somewhat similar to that taken with respect to gold. At a critical period last fall the government placed an embargo on gold, which oannot now be exported from Canada except by licence; therefore most of it is sold and handled by the federal government. That is one way in which these resources could be
controlled, even after private interests had been allowed to -carry out their programs.
The-re are other ways in which -this matter could be dealt with. I was shocked and surprised -to find that hon. members on -the government benches have not shown the vision, the foresight o-r advanced thought evidenced a few -days ago by the-ir own leader. When the Prime Minister made his statement concerning radio it was far in advance of anything I haive ever heard from -the government benches. He showed a vision with Teapect to the protection of our natural resources which few, if any, of his followers have shown-. I should like -to commend that attitude to -hon. members apposite. They could do no better in that respect than to follow -the example of their leader.


Ernest Lapointe: There are fi-ve minutes left, and I think I have sufficient time to present some points which have arisen in -my mind. I refer to the proceeds -from sales of Indian lan-ds, after they have been surrendered.


Thomas Gerow Murphy: Mr. Chairman, I do not wish to appear discourteous, but may I -remind the ho-n. member -that we are discussing an item under civil government?


Ernest Lapointe: No, my hon. friend is wrong.


Thomas Gerow Murphy: The discussion to which
my hon. friend is directing his remarks would properly -come under the Department of Indian Affairs.


Ernest Lapointe: The minister is wrong; this discussion is under the Department of Indian Affairs.


Thomas Gerow Murphy: Then the discussion is all out of order, Mr. Chairman.


Armand Renaud La Vergne: Yes, the discussion was all out of order.


Edgar Nelson Rhodes: There was a distinct
understanding that one item would be held, and that all discussion could take place upon it.


Some hon. MEMBERS:: Hear, hear.


Ernest Lapointe: We are discussing an
item which deals generally with Indian affairs.


Thomas Gerow Murphy: I am sorry that I was out of the house when the item was called.


Ernest Lapointe: I shall have finished before six o'clock.
Mr. MURPHY': Very well; proceed.
Supply-Indians-Radium


Ernest Lapointe: The other day the minister admitted the money from the sale of Indian lands belongs to the provinces. He says, however, that he does not wish to pay it back to the provinces because he is trying to come to some agreement whereby the money will be kept in trust for the Indians. The Prime Minister has said-and that is the reason I speak to-day-the trouble is that the privy council did not say that the money should or should not be held as a trust fund for the Indians. My right hon. friend is altogether wrong about that. It has been held that the Indian lands are the property of the provinces, and when they are surrendered in any way the provinces become the sole owners. The Indians have an interest until the land has been surrendered. This has been decided in two well known cases, the first an Ontario case concerning the St. Catharine's Milling Company, which is reported at 14 appeal cases, page 46. In connection with that case the privy council stated as follows:
The crown has all along had a present proprietary estate in the land, upon which the Indian title was a mere burden. The ceded territory was, at the time of the union, land vested in the crown, subject to "an interest other than that of the province in the same" within the meaning of section 109,-
That refers to section 109 of the British North America Act.
*-and must now belong to Ontario in terms of that clause, unless iits rights have been taken away by some provision of the act of 1867 other than those already noticed.
It appears to them to be sufficient for the purposes of this case that there has been all along vested in the crown a substantial and paramount estate, underlying the Indian title, which became a plenum dominium 'whenever that title was surrendered or otherwise extinguished.
Then in the year 1920, there was a case between the province of Quebec and the Dominion of Canada which is reported in the Law Reports, Appeal Cases, Volume 1, 1921. At page 411 I find the following:
The Dominion government had, of course, full authority to accept the surrender on behalf of the crown from the Indians, but to quote once more the judgment- of the Board in the St. Catherine's Milling Company's case, it had "neither authority nor power to take away from Quebec the interest which had been assigned to that province by the Imperial Statute of 1867." The effect of the surrender would have been otherwise if the view, which no doubt was the view upon which the Dominion government acted, had prevailed-
Which seems to be the view which the right hon. gentleman takes at this time-

namely, that the beneficial title in the lands was by the aet of 1850 vested in the Commis-

sioner of Indian Lands as trustee for the Indians, with authority, subject to the superintendence of the crown, to convert the Indian interest into money for the benefit of the Indians. As already indicated, in their Lordships' opinion that is a view of the act of 1850 which cannot be sustained.
There is no doubt that as soon as those lands were surrendered and sold the money belonged to the province of Quebec. Three hundred thousand dollars of that money is held by this government. The province is asking for it; the province has a right to get it, and I do not see upon what basis my hon. friend can refuse to hand it over. Why should we have further litigation to get that money?


Armand Renaud La Vergne: Shall the item carry?


Some hon. MEMBERS:: Carried.


Some hon. MEMBERS:: No.
At six o'clock the committee took recess-
After Recess
The committee resumed at eight o'clock.


Armand Renaud La Vergne: Shall the item carry?


[Stage Direction]
Item agreed to.
Progress reported,

[Stage Direction]
The house resumed, from May 6, consideration in committee of Bills Nos. 67 and 68-Mr. Rhodes-Mr. LaVergne in the chair.

Armand Renaud La Vergne: The committee is considering Bill No. 67, and1 the first section is No. 25.
On section 25-Valuation of securities.


Edgar Nelson Rhodes: I am ready to proceed
with this section, but I understand the hon. member foir Wetaskiwin has something to say with regard <to it. Perhaps we could proceed with the other sections of the bill and .return to this section when the hon. member arrives.
Section stands.
Sections 26 to 31 inclusive agreed to.
On section 32-Appraisement of real estate.


Edgar Nelson Rhodes: There are two amendments to be proposed to this section.

Insurance Bills


Edmond Baird Ryckman: I move that this section be amended by striking out the words "in Canada" in the first line and inserting the said words after the words "by it" in the fourth line of subsection 1.


Henry Elvins Spencer: How will that work out?


Edgar Nelson Rhodes: This means that the real
estate to be valued will be the real estate in Canada. We do not propose to go outside of Canada in connection with the valuation of the real estate of a foreign company.
There is a further amendment to subsection 2 of this section.


Edmond Baird Ryckman: I move that subsection
2	of section 32 be amended by inserting the words "in Canada" after the words "of real estate" in the third line.


Edgar Nelson Rhodes: The same explanation
obtains.


[Stage Direction]
Amendments agreed to.
Section as amended agreed to.
Sections 33 and- 34 agreed to.
On section 35-Release of assets in Canada.
Edgar Nelson Rhodes: There is an amendment to be proposed to subsection 3 of this section. It is simply an amendment for the purpose of making -clear the intent of the section.


Edmond Baird Ryckman: I move that subsection
3	of section 35 be amended by striking out the words "with the concurrence of the treasury board" in the second line thereof and the word "shall", in the fifth line thereof, and inserting in lieu thereof the words "may" in the fifth line thereof, followed by the words "with the concurrence of the treasury board."


Edgar Nelson Rhodes: There is also an amendment to be moved to subsection 6 of this section.


Edmond Baird Ryckman: I move that subsection
6 of section 35 be amended by striking out the words "securities" in the second line thereof and substituting therefor the words "assets in Canada."


Edgar Nelson Rhodes: The object of this amendment will be obvious; it is for the purpose of making it clear that the valuation is to consist o>f all the assets in Canada, not of the securities alone.


Henry Elvins Spencer: Are these the same bills that have been gone over so carefully by the other -chamber, and which there was no need to send to the banking and commerce committee? We -have had about eight or nine amendments now and the bill is so long that it is probable, before we get through
with it, that there will be as many more. Is the Minister of Finance still of the opinion that it was unnecessary to have these bills carefully gone over iby the committee?


Edgar Nelson Rhodes: Yes; and the mere fact that we have so many amendments, many of which are moved for the purpose of clarity, of making the intent of the bill obvious beyond question, would indicate the very extreme care with which the bill has been considered.


[Stage Direction]
Amendments agreed to.
Section as amended agreed to.
Sections 36 and 37 agreed to.
On section 38-Maintenance of separate funds.
Edgar Nelson Rhodes: I have a verbal amendment to move -to this section. It is to improve the language and make the intent clearer My colleague will move it.


Edmond Baird Ryckman: I move:
That subsection 1 of section 38 be amended by striking out the words "registered under the provisions of this aot to transact the business of life insurance" in the first and second lines of the subsection.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Sections 39 to 51 Inclusive agreed to.
On section 52-Classes of hazards covered by certificate.
Edgar Nelson Rhodes: I have an amendment which reads:
That subsection 1 of section 52 be amended by inserting the words "subject to the provisions of subsection 2 of section 8 of this act" before the words "any company" at the beginning of this section.
The object of the amendment is to make it clear that this section is not to override seotion 8, but to be read in conjunction with it.


Edmond Baird Ryckman: I move the amendment.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Sections 53 to 65 inclusive agreed to.
On section 66-Declaration of intent.
Henry Elvins Spencer: Putting through a bill in this way is a mere farce. We are not even reading the notes on the side.


Armand Renaud La Vergne: I have read the note.


[Stage Direction]
Section agreed to.
Section 67 agreed to.
Schedules agreed to.
Insurance Bills
[Stage Direction]
On section 25-Valuation of securities.
Edgar Nelson Rhodes: Section 25 was allowed to stand to suit the convenience of the hon. member for Wetaskiwin, but a similar provision is contained in the next bill we are to consider, except that it provides for the addition of a fifteen per cent limitation upon the holding of common stocks. The hon. member may proceed under this section to discuss the matters he desires to discuss, or at may suit his purpose to wait until we are considering the next bill.


William Irvine: What I desire to say can be taken up under the next bill.


[Stage Direction]
Section agreed to.
Bill reported.

[Stage Direction]
Section 1 agreed to.
On section 2-Definitions.
Edmond Baird Ryckman: I move that paragraph (b) of subsection 1 of section 2 be amended by striking out the words "outside of Canada" in the second line thereof and substituting therefor the words "in the United Kingdom, Great Britain and northern Ireland or in any British dominion or possession other than Canada or a province of Canada."


[Stage Direction]
Amendment agreed to.
Edmond Baird Ryckman: I move that paragraph (k) of subsection 1 of section 2 be amended by striking out the words "issued under the provisions of this act" in the last two lines thereof.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Sections 3 to 7 inclusive agreed to.
On section 8-By-laws.
William Irvine: Mr. Chairman, perhaps the committee will permit me to make a few remarks before this section carries. My remarks will not refer particularly to this section, although some of the things I desire to take up might come within its provisions. It may be contended that what I am about to say might have been more fittingly said on the second reading of the bill, but at that time we in this corner of the house were reasonably certain that the bill would go to a select standing committee. Observing that the bill covered a very large field and was practically a substitution for all insurance legislation, we decided to allow it to go through second reading in the hope that before a select committee we would be able to obtain
[The Chairman.]
a better understanding of its details. However, for reasons which were no doubt satisfactory from the minister's point of view, the bill did not go to a committee, and it now becomes necessary, after making some attempt to know what the bill is about, to ask that certain clauses be explained and to ascertain why certain provisions of the revised statutes of 1927 were not included in the present bill, and to criticize some of the new sections which did not appear in the old legislation.
I hope the committee will be lenient in allowing me to transgress beyond the boundaries of the present section, it will save time; otherwise I should have to refer to many different sections as they come before the committee. As I say, this bill covers the whole field of legislation in connection with Canadian insurance companies and British insurance companies doing business in Canada. This legislation is made necessary because of the findings of the supreme court, in respect to provincial jurisdiction and I suppose that is why it must be passed at this session. Otherwise it might have come before a select standing committee where we would have had more time to deal with its provisions.
I am in agreement with the main object of the bill, which seems to be to secure, or at least to retain, some control over insurance in Canada by some central body such as the Dominion government or the Department of Insurance. The bill, being as I say, a substitute for the legislation contained in the revised statutes of 1927, and covering a tremendous field, should have been studied by hon. members much more carefully than we will have an opportunity of doing. It is very bad practice to take such important legislation from the Senate without our having an opportunity of considering it in committee. However, I assume there are good reasons why this cannot be done. I suppose the Senate should be congratulated on a very fine piece of legislation, but we do not like to take all that the Senate says for granted, and we should have an opportunity to go into details, although it may be too late to talk about that now.
I shall now come to the specific points in the bill on which I should like to have an explanation, and I shall suggest some alterations in certain sections. I think I should refer first to the fact that certain sections in the old act which we believed were good legislation have been left out of this bill. I contend that such sections as I will refer to in a few minutes should be included among the company clauses. If hon. members will

Insurance Bills
look at section 56 of the old act they will find that it prohibits any insurance company or its directors, directly or indirectly, from promoting or organizing other companies. It has been charged and, I believe with good reason, that certain insurance companies in Canada have done that sort of thing even in spite of the fact that that section was in the old act. As that is not the business of an insurance company, we would like to know why this section of the 1927 statute was not included in the new legislation. There may be some good reason for this which has not been made apparent. The committee is entitled to know why this omission was made.
Section 57 of the old act does not appear in the new bill. That section rigidly restricted underwriting on the part of insurance companies. With that section removed, so far as I am aware, the insurance companies could become underwriting companies. There may be in this bill a clause which has escaped my notice prohibiting that in another way, but if there is not, I should like the minister to explain why the provisions in the old act in this connection do not appear in the present legislation. The business of insurance is not the underwriting of any enterprise or company; it is to carry on insurance, and this legislation should rigidly restrict such companies to the business of insurance. If there is in the act no provision which prevents an insurance company from entering these other lines of business, it is just possible some of them will do so. ,
Section 82 of the old act which again, I believe, was a very good provision, does not appear in the present bill, and so far as I am able to find out, there is no substitute for it covering the same point. Section 82 forbids any insurance company or any official of it to offer any estimate of the amount of its shares or dividends. This, of course, might be used by agents and others for the purpose of inducing individuals to become insured in individual companies. Prior to this legislation being included in the old act, I understand, considerable abuse was practised by companies in that very particular. But since the enactment of section 82 I believe that grievance has been fairly well cleared up. Again I should like the minister to state why that section does not appear in the new measure, or whether there is in the bill any substitute covering that particular point.
Subsection 4 of section 63, which, of course, was in the Insurance Act of 1927, probably would be better deleted. Certain insurance companies have, I understand, reorganized [DOT]other companies, written up the value of 41761-207
stocks, poured in water and appropriated to themselves the major portion of the capital; and still the stock of such companies is regarded as the same in value after reorganization as it was before. I believe steps should be taken to legislate to prohibit an insurance company from doing that sort of thing.
I come now to the sections of this bill which are new in insurance legislation in Canada. The first clause of importance is that which provides for a limitation of investments in common stocks to fifteen per cent. I know that the section in question is not yet before the committee, but I thought if I indicated now our difficulty im respect thereto, perhaps the minister, when he comes to it, will give the explanation. I shall be as brief as possible. We are at a loss to understand why the limitation should be fifteen per cent. If we 'have to have any percentage, it should be one per cent. So far as I am able to gather, all the insurance companies of Canada, with the exception of the Sun Life, taking them all together, have so far invested in common stocks only a little over one per cent of their book assets, although if they had wanted to do so they might have invested to a much greater degree because there was no legislation prohibiting theni. Sometimes it is wise for us to criticize, insurance companies, but in this instance .1 think we ought to give credit to the insurance companies of Canada which have stayed so well within the limits of their trust and have invested their money in the way in which a good insurance company should do. It does not appear to us in this section of the 'house that insurance companies should be permitted to invest in common stocks the funds of their policyholders, but if there has to be any percentage at all, we want it reduced or some reason given for the fifteen per cent permitted.
When we come to section 7 we find an exception which apparently must have been made in particular for the Sun Life Assurance Company. That is to say, it provides that subsection 6 shall not apply to such company having an excess of fifteen per cent in common stocks when this act comes into force. Meanwhile, of course, such company must not invest any more in common stocks, and if and when it has reduced its investment in common stocks to fifteen per cent, it will come within this provision of the law. I understand the Sun Life has some 47 or 50 per cent of the value of its book assets invested in common stocks, and this clause, while it does not so state, has been inserted expressly to safeguard that company. I do not object to that. The trouble has already been done; the govern-

Insurance Bills

ment cannot do otherwise than deal with the situation as they find it, and perhaps if government in the past .had listened a little more to the protests that, came from this section of the house, such a provision as this would not have been necessary, because those of us who had paid any attention to the insurance business in Canada knew what was taking place in this regard and warned the house about it. But the point is that no provision is made for any specified time within which this or any company having an excess of fifteen per cent of its book assets invested in common stock, can now come within the provision of the legislation. It may be very difficult to arrange such a time, but some limitation should be imposed,. so that any company coming within the provisions of this section would understand that the people of Canada, while they have been very kind in giving them an opportunity to correct their insurance practice, feel that the sooner the correction is made the better. There ought to be some provision in the section for that purpose, but I cannot see any in the bill as it stands.
Subsection 8 provides that shares of common stock which may come as bonuses or dividends to companies from investments already made should not 'be regarded as an investment in common stock within the meaning of this act. It may be advisable to retain that section on the ground that insurance companies now have investments in common stacks of otheT companies, and such companies, while they may be in very good condition, might find it necessary to refinance and might grant certain privileges to the insurance companies holding their stock. But at the same time there might be considerable abuse, and it appears to me that at least some consideration should be given to the section and safeguards taken against possible abuses.
There is another section to which I wish to refer, namely, subsection 2 of section 71, which provides that in a period of depression any insurance company which finds that its stocks have gone down with all other stocks may, in order to appear solvent in its books, write up its assets within certain limitations. Again I do not object; that may be necessary at certain times, but I do say that the same privilege should be given to everybody else. If the farmer, for instance, could write up the value of the butter and the eggs and the wheat that he has to sell he would be solvent, but there is no such provision made for him. This really appears to be class legislation. Very careful consideration should be given to this section of the bill.
I trust that the minister will explain why the sections of the old act which I have men-

tioned are not included in the bill, and will endeavour to answer the questions I have raised with respect to the particular sections I have mentioned.
In conclusion, I should like to say that in my opinion the insurance business in Canada perhaps is more ripe than any other business to be taken over by the state. If it had not been for the action of the Prime Minister and the government, we would now have neither insurance companies nor banks in Canada. In my opinion the action which the Prime Minister and the government took saved these institutions. But for the credit of the nation that was placed behind the banks through the Finance Act there is not a bank in Canada would have stood, and but for the special legislation by order in council with respect to insurance companies, there would be no insurance company in Canada to-day. I commend the government for its action in those respects. It was necessary to save those institutions. But, Mr. Chairman, we do not want to save them for private individuals. If it is necessary to .place the credit of the people of Canada behind such institutions, we want to control them for the people of Canada, and so I suggest that the government next year bring down legislation nationalizing the entire insurance business in this country. The business of insurance belongs to the people. It is the easiest and safest business to run; it is the most important from the point of. view of finance, and I trust that the government will take it over.
'Mr. RHODES: May I express my thanks to the hon. member for Wetaskiwin for his courtesy in advising me that he intended to make some references, by way of fair criticism, to certain provisions of this bill. If it meets with the approval of the committee, I shall endeavour to deal with the observations made by my hon. friend, especially as they have applied to various sections of the bill, in one reference rather than wait till we came to the particular sections involved.
In the first place my hon. friend has asked why sections 56, 57 and 82 of the old Insurance Act do not appear in this new measure. Let me point out that the insurance bills as they appear before this house represent not only the wisdom and judgment of the Senate, which gave many weeks of careful study to them, but also the combined judgment of all parties who evinced an interest in insurance legislation, including the provinces, which hitherto have opposed the dominion in its attempt to deal with insurance legislation at all. The reason these sections have been left out is due solely to the fact that, in the opinion of eminent counsel, to reenact them

Insurance Bills
in this measure would be to reenact sections which in terms have to do with the business of insurance, and that is the very thing which the privy council has determined beyond question is a subject which comes within the exclusive jurisdiction of the provinces. It might be, perhaps it is so, that these bills would be better if certain provisions of those sections hould have been incorporated in them, but we can only go so far in this legislation dealing with the subject of insurance as the privy council in its wisdom has decided we may go.
My hon. friend dealt with subsection 4 of seotion 63 of the bill.


Henry Elvins Spencer: Before the minister gets
away from that point, may I read section 81 of the old Insurance Act, which provides:
No officer, agent, employee or servant of such life insurance company, nor any person soliciting insurance, whether an agent of the company or not, shall be deemed to be for any purpose whatever the agent of any person insured in respect of any question arising out of the contract of insurance between such person insured and the company.
The section deals with the soliciting of insurance. I would ask the Finance minister if his remark applies to that section, and if so, in what way does that section clash with the decision of the privy council?


Edgar Nelson Rhodes: As I have stated before,
I do not profess to be able to give a legal opinion which has any value, but I am assured by competent legal authorities that beyond question to attempt to reenact this section would be in clear violation of the decision of the privy council. There is no question in the world in their judgment that an attempt to reenact this section would be unconstitutional having in mind the decision of the privy council.


George Gibson Coote: Would the minister say the
same with respect to the old section 82?


Edgar Nelson Rhodes: Yes, beyond question.
Coming to subsection 4 of section 63 of the bill before us, I apprehend that in the mind of my hon. friend from Wetaskiwin this is an attempt to permit the injection of watered stock into the securities of insurance companies. I may say to my hon. friend that the section does not mean that at all, nor is it capable of that interpretation. Many soundly managed companies have for one reason or another found it desirable to change the class and character of their securities. This section provides that if that is done there shall be no impairment either of the status or of the value of the securities, so if a reorganization were to take place as permitted 41761-207J
under this subsection the insurance company would still have as ample, as complete and as full protection as it had with the securities which it held prior to the reorganization.
My hon. friend raised the question why there has been imposed a limitation of fifteen per cent upon the amount of common stock which may be held in the assets of insurance companies. In fact he queried as to why insurance companies could hold1 any common stock at all. Hon. members will recall on a previous occasion I pointed out that in times past the superintendent of insurance had sought very diligently to have a limit imposed as to the amount of common stock which could be held 'by life insurance companies. The house in its wisdom, however, saw fit not to accept his judgment and imposed no limitation upon the amount of common stock which could be held. Leaving aside for a moment the merit of the question whether or not it is wise to allow insurance companies to invest in common stocks, we must remember that as a matter of actual fact every company in Canada to a greater or lesser degree has among its assets common stocks. So that we are not dealing with a theory; when we are discussing the matter of the holding of common stocks we are dealing with facts.
Upon that point, however, I think the argument may be made with considerable force that there is no good reason why the insurance companies should be limited to bonds in their purchases of securities. If one were to survey the market to-day he would find bonds not of companies but of nations which are selling for a mere fragment of their issued prices. Under legislation restricting the investment in securities to bonds, insurance companies might very properly have invested in many of those bonds and yet fared much worse in the matter of the reduction of their assets. That would be so even under the present drastic reduction in common stock values obtaining to-day. As a matter of fact however there are common stocks of Canadian companies, known in investment circles as seasonal stocks, which despite the low point at which all stocks and bonds are selling to-day, compare very favourably with securities of all kinds, whether they be bonds or debentures, issued not only in Canada 'but in any other part of the world. I have in mind the common stocks of some companies which represent their whole assets; that is to say, there are no debentures or bonds ahead of them. I sulbmit, Mr. Chairman, that as a security the common stock in a company like that is not only in a class with many bonds
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but -}>as the merit that to the extent the company prospers there is an added yield and consequently an added income to the insurance company fortunate enough to hold it.
I was somewhat impressed when I took note of the only element of criticism we have had with respect to these measures. The gentleman outside of the house who -has been so vocal in his criticism of them was at pains to point out that we in Canada would be well served if we had an insurance act and an inspector of insurance such as they have in the state of New York. As a matter of fact at an insurance convention held in that state on October 30, 1929, Superintendent Conway issued a statement which was published in the New York Journal of Commerce. It is as fallows:
There has been such a drastic readjustment of the prices of the leading common stocks of the country that I took the opportunity this afternoon to recommend to the insurance companies the purchase of such stocks. In addition I. called into conference the heads of the largest life insurance companies available in this state. These life insurance companies were unanimous in their belief that-the values of many of the leading common stocks had been readjusted to the point where they should be purchased. I stated to them that I would recommend to the next legislature of the state of New York an amendment to the statute so as to permit the purchase of the leading common stocks of the, country by life insurance companies for investment purposes. The life insurance presidents, who wore at the conference, offered to return-to-rnorrow afternoon and confer to see if there ryas any way in which under the present statute they could make purchases.
My sqle object in reading this opinion by Superintendent Conway is to show that the argument with respect to the value of common stocks, as an investment by life insurance companies, is by no means onesided.


Mr. LUCAS:: Time has proven that Mr. Conway's judgment at that time was very wrong.


Edgar Nelson Rhodes: Time has proven that his judgment with respect to that being the right time to purchase common stocks was wrong.


George Gibson Coote: Wrong any time.


Edgar Nelson Rhodes: I would point out that a host of others were equally wrong at that time, and I have no hesitation in placing myself among the number.


Mr. CAYLEY:: Did he advise the purchase of any amount, or was an amount stipulated?


Edgar Nelson Rhodes: There was no question as to the amount and no suggestion as to limitation. I have used the opinion of Mr. Conway

merely to indicate that there was a conservative point of view favourable to the purchase by insurance companies of common stocks to be held for investments.


Henry Elvins Spencer: What is the object of using the figure fifteen per cent? For instance, I understand one life insurance company held about forty-seven per cent common stock whereas the average among other life insurance companies is about 1.56 per cent. Would the minister give us some reason why the figure fifteen was suggested?


Edgar Nelson Rhodes: The best answer I can give is to say that the figure was arbitrary; they might have said ten per cent. I do not know that any exact reason can be given as to why. the figure fifteen was used in place of the figure ten, sixteen or seventeen. I assume it was selected as representing the combined judgment of those who had to do with the consideration of the act before the committee of the Senate. I suppose the figure fifteen is a fair one, and one beyond which it would not be advisable to go in the purchasing of common stocks. It is true that there are insurance companies to-day which have less than two per cent of their total investments in common stock holdings. * I would point out to my hon. friend, however, that if those companies confined their investments in common stocks to less than two per cent when, under the legislation as it previously stood, they could have invested without limit in common stocks, it does not seem reasonable to assume that now, when they are restricted to fifteen per cent, they will enlarge upon the total amount of common stock they hold in proportion to their total amount of investments.
Mr. SPEN-CER: That was not the reason for my question. The insurance companies generally have -not seen fit to invest even to two per cent. If only one insurance company has seen fit to invest so radically in common stock I should have thought those drafting the act would have followed the course adopted by the majority of insurance companies, and put the maximum a great deal lower.


Edgar Nelson Rhodes: I do not know that I can enlarge upon the answer I have already given. An argument for 10 .per cent or for 16 per cent might be supported as well as the argument for fifteen per cent. I take this to be an arbitrary figure imposed, in the judgment of those who have knowledge of these matters, as being the safe figure beyond which one

Insurance Bills
company should not go in the investment of these funds. Of course that decision was arrived at after several weeks of consultation, not only on the part of the representatives of the provinces but, I would point out, by the representatives of all the life insurance companies, including those to which my hon. friend refers. The bill is concurred in by all the life insurance companies, so I take it as beyond question that they are satisfied that this is a safe provision to be included in the act.
My hon. friend referred to the fact that one life insurance company in Canada already has a very large proportion of its assets invested in common stock. That is true, but it would be the height of folly to attempt to impose upon that company legislation that would bring it, under existing market conditions, immediately within the limitation of fifteen per cent. It would mean that the company would be compelled to jettison many tens of millions of dollars' worth of its securities upon a distressed market, and if we attempted any such thing we would do a great harm not) only to that company but to its policyholders. I think we are wise to give such a company time in which to dispose of its securities under the most favourable conditions, we hope under conditions which will permit of a substantial appreciation in price. In this connection let me point out that this company cannot buy another dollar's worth of common stock. There must be a gradual process of reduction, eventually bringing the company within the provisions of the act, which says it may not hold more than fifteen per cent of its assets in the form of common, stock.


William Irvine: Would it not be possible to give such powers to the superintendent of insurance, with respect to this particular company, so that at least he may exercise persuasive authority in order to bring it within the scope of the act as soon as possible?


Edgar Nelson Rhodes: I submit that to do so
would be to attempt to thrust too much responsibility upon one official of the government; it would practically mean that you would substitute the superintendent of insurance for the company in the management of its own affairs. If you come to the point where you say the government must take over insurance, that is another matter, but until we make that decision I submit that a provision of the kind suggested would be very unwise. At the same time I think I am fair to the superintendent of insurance, and I believe I am within the judgment of the
committee and will receive the approval of the great majority of hon. members, when I say that in the person of the superintendent of insurance we have a gentleman who is very vigilant in the public interest. I am sure that if any guidance of his can lead companies along safe channels he will be the first to make suggestions of the kind.


Henry Elvins Spencer: Would the minister tell me whether trust companies are allowed to invest in common stock?


Edgar Nelson Rhodes: Trust companies may invest their own capital in that way, but they may not invest their trust funds. In that respect they are confined to the securities set out in the Trust Companies Act.


Henry Elvins Spencer: Are not policyholders'
trust funds in the same position?


Edgar Nelson Rhodes: Certainly they are . in a
moral sense, without question, but they are not in the same position as trust funds held by a trustee under the Trust Companies Act.
My hon. friend referred also to the section of this bill which permits the valuation of securities. That is precisely the provision that obtained in the old act, as to principle. We are permitted now to do with respect , to stocks only what the old act has always permitted with respect to bonds, and I submit that if we are to permit the valuation of one form of assets we ought to permit the valuation of another, so long as the act provides that both may be held by the company as valued securities.	*
May I conclude by expressing my grateful thanks to my hon. friend from Wetaskiwin for his word of commendation with respect to the action of the government in the matter of the valuation of the securities of life insurance companies. I hesitate to think what would have been the reaction, had we not taken that step, upon the companies, upon Canadian business institutions and so on. In following that course we were only keeping to the judgment of the governments of each of the United States of America. This method was used during the war period, and subsequent events proved that the action of the government was wise. I do not profess to be a prophet or to be able to see into the future, but I have the hope, the faith and the belief that we are passing through a period of depression from which we will emerge, and that in the light of after events it will be shown that our action in the present instance was directed to the benefit of the policyholders, to the stability of the companies, to the preservation of Canadian credit.
Insurance Bills

and to the public good. In what position would the government have been, for example, had it not -taken action similar to that taken in the United States? It would have meant that Canadian companies, which do a very large proportion of their business in foreign fields, would have been placed in an unfair position to such an extent that their business would have been imperilled in the field where to-day they have equal opportunity with American companies.
I hope I have covered all the points raised by my hon. friend from Wetaskiwin, as it was my desire to do. If I have missed any point I will endeavour to deal with it more fully as we proceed with the various sections.


George Gibson Coote: Are there more companies
than one that have as much as fifteen per cent of their assets in common stock?


Edgar Nelson Rhodes: I believe there is only one life insurance company in Canada that has as much as fifteen per cent of its securities invested in common stock.


George Gibson Coote: I do not think it is wise to allow these companies to invest as much as fifteen per cent in common stock.


Edgar Nelson Rhodes: There are other companies with more than five per cent, and as a matter of fact one company has as much as thirteen per cent of its assets invested in common stock.


George Gibson Coote: In connection with this very point, I look upon insurance premiums as trust funds in the highest sense of that word. They are held in trust for widows and orphans, for whom so much concern is expressed in this house, and we should no longer allow these companies to invest, in common stocks, trust, funds held for widows and orphans. I think the experience of the last three years certainly proves that this is a situation that should be corrected.


Edgar Nelson Rhodes: Whether legally or not, I do not think that there is any question that morally they are trust funds and should be so regarded. It might be the part of wisdom for us to restrict the investment in common stocks to a lower figure than fifteen per cent, but I submit that we have gone a long way in the right direction in reducing the authority of the companies to fifteen per cent, whereas heretofore they have had no limitation at all imposed upon them. If a year or two hence conditions, as I trust, are more stable, * and insurance companies are in a position to dis-
pose of securities in the form of common stock, we may then, I hope, be able to determine the wisdom of still further restricting the extent to which such investments may be< made.


George Gibson Coote: If we are going in the right direction we ought to go all the way. Provision could be made with respect to companies that now hold common stocks. That could be done, by means of authority in the act, through orders in council passed by the government from time to time giving the companies sufficient time to dispose of their common stocks without loss to themselves. If that were done, companies that do not now hold common stocks would not be liable to make the mistake of investing their funds in these stocks. That would be a much better way of dealing with the situation in which many companies now find themselves.
Mr, RHODES: Any company which was able to resist the temptation of making money by investments in common stocks to the extent of limiting their investments to less than two per cent during the hectic days of 1927 and 1928 can certainly be trusted not to attempt, in the light of the experience of the past two years, to invest too much of its securities in common stock. Assuming for the sake of argument that it were wise to prohibit them from investing in common stocks at all, it would be a mistake to impose an arbitrary restriction by statute on these companies with respect to time. If a year hence conditions are such as to warrant us in considering, first, a policy, and then the wisdom of its application in a more restricted measure, that is another matter. But under conditions as they exist I say that for this year, having taken such a long step, it would be unwise at this time to go further, because it would be open to parliament to deal with the matter in a year's time in the light of experience gained in the interval, and we could then deal with it far more effectively in the interests not only of the public but of the companies themselves.


Michael Luchkovich: Is it not a fact that the state of New York refused to allow the Sun Life Company to sell insurance because of its policy of dealing in stocks, and that this refusal was made long before the stocks began to fall?


Edgar Nelson Rhodes: I would not subscribe to the impression conveyed by the hon. gentleman's question. I am not familiar with the facts, but I am advised that there were certain restrictions on the part of the state of

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New York, aside altogether from the question of stocks, which restrictions were distasteful to that company, who in their own judgment decided not to attempt to invade that field.
I do not understand for a moment, however, that the decision of the company not to attempt to take out registration there had any reference to or reflection upon their securities in any shape or form.


Thomas Merritt Cayley: I agree with the minister that perhaps the government have taken the only course they could to save the companies in the predicament in which they find themselves. He has spoken of common stocks that are perhaps as good an investment as bonds, and he has also implied that there are some mighty poor common stocks. The question that occurs to me is this: What precaution will the department take to satisfy itself that the companies are investing in good and not in questionable common stocks?


Edgar Nelson Rhodes: The conditions are laid
down by statute. We could never expect to take out of the hands of the companies the management of their own business and to place it in the hands of an official of government, unless we were prepared to go the length of taking over the insurance business, which is another matter.


Thomas Merritt Cayley: But surely there is some
provision that these common stocks must have proved their value.


Edgar Nelson Rhodes: That is prescribed in the act, and it was in the old act. The provision was that they had to pay not less than four per cent dividend for a period of seven years. In other words, the stocks had to be reasonably matured and seasoned stocks before the companies could invest in them.


Thomas Merritt Cayley: Do these same provisions apply to surpluses held by fire insurance companies?


Edgar Nelson Rhodes: Yes.


George Brecken Nicholson: With regard to investments in stocks by insurance companies, these investments are made only after the exercise of their best judgment by the directors and investment managers of the companies. The whole discussion has centred around a particular company which is reputed to hold a large block of common stock, but no discussion whatever has taken place with regard to other insurance companies that have invested in securities which are listed here as legitimate investments for insurance companies, and if you eliminate
them you leave very few securities in which an insurance company can invest, the book value of whose investments has been reduced just as much as the book value of the company that has common stocks. Take one or two items: Bonds and debentures of municipalities and school sections. I know many municipalities whose bonds and debentures would be reduced, if you took their market value to-day, just as greatly as the common stocks in which a number of insurance companies have invested. Then again, we have ground rents, and mortgages on real estate in Canada and elsewhere, I personally know insurance companies who have followed what is known as the conservative line and invested, not in common stocks, but in high class real estate mortgages. What would these insurance companies do to-day if they were called upon to realize upon these mortgages? It will be found that certain classes of bonds and debentures, of preference and common stocks of reliable companies are below their normal value. I know of one company paying and earning seven per cent on its preference stock, and that stock is selling today at a price barely equal to three years' dividends-it is worth about one-fifth of its ordinary market value. Why is that? Simply because it is not the seller or holder of real estate who fixes the price; it is the purchaser, and the same applies to bonds, school debentures and so on. This whole discussion has been centred about one company which is known to hold large blocks of common stocks, selected upon the best judgment of its directors. Anyone who has faith in Canada will admit that those stocks are as intrinsically sound as the best real estate or bonds to be purchased in Canada. They will come back just as surely as any other investment. I look upon this discussion, centred as it is against one company, as unfair and unwise in the interests of Canada and the policyholders of that company.


William Irvine: So far as I am concerned, I centred my remarks upon no single company. If anything I said applied to any company, that company itself is entirely to blame. My hon. friend appears to have an excellent knowledge of business and investments; I ask him if he considers common stock investments to be as safe as bonds?


George Brecken Nicholson: If the investments of
insurance companies are to be limited to the bonds of Canada, then there is nothing to be said. The bonds of Canada are the best
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investment you can get. Will my hon. friend suggest that the investments of insurance companies should be limited to the bonds of Canada?


William Irvine: No.


Edgar Nelson Rhodes: The remarks of the hon.
member for Wetaskiwin have been quite in keeping with this matter, and his suggestions and criticisms have been very constructive. I do not think any exception can be taken to anything he has said.


[Stage Direction]
Section agreed to.
Section 9 agreed to.
On section 10-Stock transferable.
Henry Elvins Spencer: I understand from the
Minister of Finance that sections 56, 57 and 82 of the old act are left out of this bill in order to get away from the decisions of the privy council. Does the minister think that we are safe in passing this bill and that it will not be challenged by the various provinces?


Edgar Nelson Rhodes: I cannot answer that question either negatively or affirmatively. I can only say that the bill was drafted after full conference and consultation with eminent counsel who represented the three provinces which have hitherto taken exception to dominion jurisdiction,, and that the bill meets substantially with their approval. At all events it is safe to say that they have not taken active steps in opposition to the two bills as they now stand, and I hope after we have operated under this legislation for a year or so, the provinces will accept them without question.


[Stage Direction]
Section agreed to.
Sections 11 to 31 inclusive agreed to.
On section 32-Liability of directors for transfer of shares.
Henry Elvins Spencer: Are special penalties provided for directors who mismanage their companies?


Edgar Nelson Rhodes: Section 118 provides for
penalties.


[Stage Direction]
Section agreed to.
Sections 33 to 43 inclusive agreed to.
On section 44-Approval of by-laws by treasury board.
Edgar Nelson Rhodes: 
Edmond Baird Ryckman: I move accordingly. Amendment agreed to.
Section as amended agreed to.
*Sections 45 to 62 inclusive agreed to.
On section, 63-Investment of company's funds.


Henry Elvins Spencer: This is the contentious clause. I should like again to refer the minister to subclause 6 of this clause and to ask him whether he would not give consideration to reducing that figure of fifteen per cent.


Edgar Nelson Rhodes: I do not think there is anything I can add to what I said a short while ago regarding this particular clause. It may i>e that, fifteen per cent is too much; it might be that ten per cent would be too much. As to that I cannot say, but I have said that this percentage represents the combined judgment of those who devoted a great deal of time and careful thought and study to this subject, including the life insurance companies themselves, who hitherto, when no limitation had been imposed upon them, invested not more than two per cent of their funds in common stocks. We might be well advised to let this figure remain as it is, and, as we proceed from session to session, revise it if necessary.


[Stage Direction]
Section agreed to.
Sections 64 to 80 inclusive agreed to.
On section 81-Maintenance of separate funds.
Edgar Nelson Rhodes: I have a minor amendment to move to this section, namely:
That subsection one be amended by striking out the words "registered under the provisions of this act to transact the business of life insurance."
This is merely for the purpose of good wording, because the clause would be correctly expressed with those words included. They are surplus, unnecessary. I shall ask my colleague, the Minister of National Revenue, to move this amendment.


Edmond Baird Ryckman: I move accordingly. Amendment agreed to.
Section as amended agreed to.
Sections 82 to 89 inclusive agreed to.

Insurance Bills
On section 90-Fraternal benefit societies.


Edgar Nelson Rhodes: I have a minor amendment to move to .this section. If members of the committee will refer to this section they will see the words "forty-one to forty-four". This should read: "forty-one and forty-four". I am therefore going to ask my colleague, the Minister of National Revenue to move:
That subsection 2 of section 90 be amended by striking out the words "forty-one to forty-four thereof boith inclusive" in the fourth and fifth lines and substituting therefor the words "forty-one and forty-four thereof."


Edmond Baird Ryckman: I move accordingly.


Mr. DUPUIS:: After the amendment, the clause will read: "with the exception of sections 26 and 41 and 44." There are two "ands".


Edgar Nelson Rhodes: My hon. friend is quite right. The first "and" should also be deleted.


Edmond Baird Ryckman: I move accordingly.


[Stage Direction]
Amendment agreed to.
*Section as amended agreed to.
Sections 91 to 107 inclusive agreed to.
On section 108-Delivery of securities.
Edgar Nelson Rhodes: There is an amendment to this section, to strike out the words "with the concurrence of the treasury board" in the second line of subsection 3 and insert the same words after the words "he may" in the fifth line of the said subsection. That is to make this section conform, and for the same reasons as given when the amendment was moved with reference to Bill No. 67.


Edmond Baird Ryckman: I move accordingly, Mr. Chairman.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 109-Life companies.
Edgar Nelson Rhodes: There is an amendment to this section, Mr. Chairman, to insert after the word "policies" in line twenty-six of the bill the words "together with its other liabilities in Canada."


Edmond Baird Ryckman: I move accordingly, Mr. Chairman.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Section 110 to 118 inclusive agreed to.
On section 119

Annual statement.
Edgar Nelson Rhodes: There is an amendment to this section, Mr. Chairman, to insert the word "British" before, the word "company" where it
occurs in paragraps (a), (b), (c), (d) and (e) of this section. This is only of application to British companies, and the amendment is designed to make that clear beyond question.


Edmond Baird Ryckman: I move accordingly, Mr. Chairman.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Sections 120 to 122 inclusive agreed to.
On section 123-Name of company.
Edgar Nelson Rhodes: There is a verbal amendment to this section, Mr. Chairman. It is to amend subsection 1 by striking out the words "company or British company registered under this act" in lines 2 and 3, and substituting therefor the words "corporation registered under the laws of the Dominion of Canada to transact the business of insurance"; and to amend subsection 2 by striking out the words "company or British company registered under this act" in lines 3 and 4 of the said subsection, and substituting therefor the words "corporation registered under the laws of the Dominion of Canada to transact the business of insurance."


Edmond Baird Ryckman: I move accordingly, Mr. Chairman.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Section 124 agreed to.
On section 125-Assets to be maintained in Canada by life companies.
Edgar Nelson Rhodes: There is an amendment to this section, to add after the word "policies" at the end of the section the words "together with its other liabilities in Canada."


Edmond Baird Ryckman: I move accordingly, Mr. Chairman.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Sections 126 to 133 inclusive agreed to.
On section 134-Release of assets on dicontinuance of business.
Edgar Nelson Rhodes: I have an amendment to this section, as follows:
That subsection 3 of section 134 be amended by striking out the words "with the concurrence of the treasury board" in the second line thereof, and the word "shall" in the fifth line, and by inserting the words "may, with the concurrence of the treasury board" after the word "he" in the fifth line thereof.
329S
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Edmond Baird Ryckman: I so move.


[Stage Direction]
Amendment agreed to.
Section as. amended, agreed to.
Sections 135 to 138 inclusive agreed to.
On section 139-Reserve liability for annual statement.
Edgar Nelson Rhodes: I have an amendment to this section which I believe will make for better construction. The purpose of the amendment is to form a considerable portion of subsection 1 into a new subsection. The amendment is as follows:
That subsection one of section 139 be amended by striking out the words "provided that" in the seventh line thereof, and by inserting as subsection 3 of the said section, all the remaining words of the proviso beginning with the words "Every British company" and ending with the words "under such policies."


Edmond Baird Ryckman: I move accordingly.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Sections 140 to 150 inclusive agreed to.
On section 151-Name of provincial company.
Edgar Nelson Rhodes: I have an amendment to this section which will make it conform to previous sections as amended. The amendment is as follows:
1.	That subsection one of section one hundred
and fifty-one be amended by striking out the words "company or British company or provincial company registered under this act" in the second and third lines of the said subsection. and substituting therefor the words "corporation	registered	under	the laws	of	the
Dominion of Canada to transact the business of insurance."
2.	That subsection two of section one hundred
and fifty-one be amended by striking out the words "company or British company or provincial company registered under this act" in the third and fourth lines of the said subsection, and substituting therefor the words "corporation	registered	under	the laws	of	the
Dominion of Canada to transact the business of insurance."


Edmond Baird Ryckman: I move accordingly.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Sections 152 to 157 inclusive agreed to.
Schedules agreed to.
On the preamble.
Ernest Lapointe: Before the bill is reported I should like to ask the minister if he thinks it will be accepted by the provinces, and that they will not urge that their jurisdiction is being encroached upon. My information is different. I was not here when the bills were first discussed, but I have read Hansard, and I

learn from that source that the minister based his opinion as to the bills .being within the jurisdiction of this dominion on the following statement by Lord Haldane:
Their Lordships have no doubt that the Dominion parliament might pass an act forbidding aliens to enter Canada, forbidding them so to enter to engage in any business without a licence, and further they might furnish rules for their conduct while in Canada requiring them, e.g. to report at stated intervals.
In the last case, which was decided a few months ago, their lordships of the privy council expressed the hope that that was the last litigation concerning insurance between the dominion and the provinces. I am very much afraid that the hopes of Lord Dunedin, who delivered the judgment, will not be realized. The statement of Lord Haldane, quoted by my hon. friend, is referred to in the judgment of a few months ago in the case of the Attorney General of Quebec versus the Attorney General of Canada. In that case Lord Dunedin is quoted as follows:
Their Lordships consider that although the question was studiously kept open in the Reciprocal Insurers case, it was really decided by what was then laid down. The case decided that a colourable use of the Criminal Code could not serve to disguise the real object of the legislation, viz., to dominate ithe exercise of the business of insurance. And in the same way it was decided that to try by a false definition to pray in aid section 95 of the British North America Act, which deals with immigration, in order to control the business of insurance, was equally unavailing. What has got to be considered is whether this is in a true sense of the word alien legislation, and that is what Lord Haldane meant by "properly framed legislation." Their Lordships have no doubt that the Dominion parliament might pass an act forbidding aliens to enter Canada or forbidding them so to enter to engage in any business without a licence, and further they might furnish rules for their conduct while in Canada, requiring them e.g., to report at stated intervals. But the sections here are not of that sort, they do not deal with the position of an alien as such; but under the guise of legislation as to aliens, they seek to intermeddle with the conduct of insurance business, a business which by the first branch of the 1916 case has been declared to be exclusively subject to provincial law. Their Lordships have, therefore, no hesitation in declaring that this is not "properly framed" alien legislation.
Further he says it is really the same old attempt made in another way. I will not quote more extracts, but surely the present legislation is the same old attempt not even made in another way but in the same old manner. I have nothing else to say except to prophesy that again these bills will run the gauntlet of the privy council and will meet the fate of the previous bills.

Insurance Bills


Edgar Nelson Rhodes: I do not think any good purpose can foe served by my attempting to enter into a discussion with my hon. friend as to the legal phases of this question-


Ernest Lapointe: I just want to issue a warning.


Edgar Nelson Rhodes: -even if I felt myself competent to do so, which I would foe the first to admit I am not. But I do not share the apprehensions of my hon. friend. In the first place those whose opinions I respect, eminent counsel, are in agreement, so far as lawyers can agree in controversial matters, that the language of the statute places us safely within our jurisdiction having regard to the recent decisions of the privy council upon the subject of the rights of the dominion as against the provinces in the matter- of the business of life insurance.
There is, however, a further reason which I think should not be overlooked. It is that these bills were framed after complete, full and very harmonious conferences and discussions with eminent legal gentlemen representing the three provinces, which hitherto have taken exception to the dominion jurisdiction as against the provincial jurisdiction in the matter of insurance. I will quote here just one sentence spoken in another place by a very eminent gentleman:
I think I can assure those hon. gentlemen that there is no disposition on ithe part of the provinces-even those which have introduced bills on this subject-to say (that no jurisdiction is left to the dominion. There is rather a disposition to find ground upon which they can stand, as distinguished from the ground on which we can stand, and to avoid if possible further litigation on this question.
I have the hope that not only the legal phraseology of these bills and the way in which they are framed but more particularly the atmosphere of confidence in which they have been framed is an indication that we have arrived at the last of our questions of jurisdiction, certainly as touching the business of insurance. Upon that question I may be quite wrong, but I can only give my hon. friend the opinions of those I have mentioned, for what they may be worth.


Ernest Lapointe: I may say that I am authorized by the legal department of the province of Quebec to say that they do not accept that bill. Not only that, but they say Ontario does not accept it either. On my last trip to Quebec there was a representative of the Ontario legal department on the train, and he told me the same thing; he has not the slightest doubt that this . legislation is ultra vires. So far as I am concerned I should like very much if some ground could be
found upon which to base an understanding.
I believe it is important that there should be some general control of the business of insurance, 'but I am afraid my hon. friend is too hopeful when he believes that this will be accepted by the provinces.


Edgar Nelson Rhodes: That may be so, although I will say that I think the dominion has gone a very long way in its endeavour to find a practical common ground which will be reasonably acceptable to the provinces. But if they insist upon gratifying their taste for further litigation I can only say that there is an old maxim about -the pitcher going too often to the well. Perhaps if the provinces persist in their activities they may not find themselves so uniformly successful.


Ernest Lapointe: The trouble is that they have always won their points.


Thomas Merritt Cayley: Perhaps the minister would permit me to refer to a subject that was discussed a few nights ago when we were considering the question of taxation.


Edgar Nelson Rhodes: We will come to that again; the bill is in committee.


Henry Elvins Spencer: Before these bills are reported I should like to remind the committee that now we have finished considering three bills -on the subject of insurance, covering in all some 118 pages and containing some 224 sections. It was because of the length of these bills that we in this corner of the house thought it would be better -to send them to one of the standing committees, because it is impossible to go through them thoroughly in committee of the whole. The Minister of Finance, however, gave as the principal reason why that should not be done the fact that the bills were so thoroughly considered in the other chamber that he did not think it worth while to pass them on to a committee of -this house. Apparently the work done in the other chamber, however, did not even suit the Minister of Finance himself, because in the course of the consideration of these bills dozens of amendments have been moved by the minister or his confreres. The very fact that these amendments have been moved is full justification for our request that these bills be sent to a standing committee of the house.
Bills reported.


Pierre Édouard Blondin: When shall said bills be read a third time?


Henry Elvins Spencer: Next sitting of the house.


Edgar Nelson Rhodes: Unless my hon. friend has any amendments to move, I would suggest that at this stage of the session, in view of

International Peace Park
the fact that the Senate is sitting, it would afford them a greater opportunity to deal with the bills than if we sent them up later.


Henry Elvins Spencer: In view of the remarks of the minister I withdraw my abjection.
Motion agreed to and bills read the third time and passed.



WATERTON GLACIER INTERNATIONAL PEACE PARK

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Hon. T. G. MURPHY (Minister of the Interior) moved the second reading of Bill No. 97, respecting the Waterton Glacier International Peace Park.
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. LaYergne in the chair.
On section 1-Proclamation.
Mr. ERRICK F. WILLIS (Souris):	Mr. Chairman, the present occasion offers an opportunity of presenting to this house certain facte in regard to the project known as the International Peace Garden of America.
May I say in a word that there is now in practically the geographical centre of this continent, a garden of three thousand acres, in the Turtle mountains donated to the people of North America by the governments of the province of Manitoba and the state of North Dakota, for the purpose of a living and lasting memorial to the greatest peace ever existing between two nations.
May I direct the attention of this house to the background, organization, and plans of this project, which in the future will, I believe, be well known to you all.
The idea of a 'beautiful garden on the international boundary was first thought of by an eminent Canadian horticulturist, Mr. Henry J. Moore, of Islngton, Ontario, in 1928, and was suggested to the convention of the National Association of Gardeners held in Toronto in August, 1929. The project met with the heartiest approval of the audience which represented thirteen United States horticultural societies, and practically all of the major horticultural organizations of Canada. The association formed a peace garden committee which committee organized an international committee. This committee has changed slightly from time to time in personnel, but is at present as follows:
Canadian Representatives Secretary: Mr. H. J. Moore, Islington, Ont. Treasurer: Sir John Aird, president, Canadian Bank of Commerce, Toronto.
Mr. J. E. Atkinson, president, Star Publishing Co., Toronto. fMr. Rhodes.]
Mr. E. W. Beatty, president, C.P.R., Montreal.
Mrs. George Black, F.R.G.S., wife, Speaker House of Commons.
Mr. John H. H. Jury, president, Drug Trading Co. of Canada.
Hon. Athanase David, provincial secretary, province of Quebec.
Mr. T. W. Duggan, general manager, Dale Estate (Florists) Brampton.
Lady Eaton, Toronto.
Rt. Rev. Edmund H. Oliver, D.D., Moderator, United Church of Canada.
Mrs. W. J. Hanna. Sarnia, wife of late Hon. Mr. Hanna, provincial secretary of Ontario.
Com. James Hay, O.B.E., territorial commander, Salvation Army in Canada.
Rev. W. A. Cameron, pastor of Yorkminster Baptist Church, Toronto.
Most Rev. S. P. Matheson, D.D., former Primate of all Canada.
Hon. D. G. McKenzie, Minister Mines and Natural Resources, Manitoba.
Rev. R. R. McKay, past president, Baptist Convention Ontario and Quebec.
Hon. Robert Weir, Minister of Agriculture.
Hon. W. R. Motherwell, former Minister of Agriculture.
Most Rev. Neil McNeil, D.D., Archbishop of Toronto (Catholic).
Miss Ethel T. Raymond, Brantford, journalist.
Rt. Rev. J. A. Richardson, D.D., Bishop of Fredericton.
Col. Hugh A. Rose. Welland, barrister, etc.
Mile. Idola Saint Jean, Westmount, pioneer in women's politics.
Mr. C. F. Sise, Montreal, president, Bell Telephone Co.
Sir Henry W. Thornton, K.B.E., president, C.N.R., Montreal.
Mrs. J. A. Wilson, Ottawa, past president, National Council of Women.
Most Rev. C. L. Worrell, D.D., Bishop of Nova Scotia; Primate of all Canada.
American Representatives
Mr. A. C. Burrage, Boston, lawyer, president Massachusetts Horticultural Society.
Rev. S. Parkes Cadman, D.D., Brooklyn, N.Y.
Hon. Martin L. Davey, Kent, Ohio, president, the Davey Tree Expert Co.
Mr. Henry W. deForest, New York, capitalist; vice-president, New York Botanical Garden.
Mr. Pierre S. duPont, Wilmington, Del., manufacturer.
Mrs. Henry Ford, Dearborn, Mich.
Rev. Jas. E. Freeman, Bishop of Washington.
Mr. T. A. Havenmeyer, New York, president, New York Horticultural Society.
Hon. Arthur M. Hyde, United States Secretary of Agriculture.
Mrs. Wm. A. Lockwood, New York, wife of Senator Lockwood.
Hon. Frank O. Lowden, Oregon, III., ExGovernor of Illinois.
Miss Marion H. MeClench, Ann Arbor, president, National Federal Business and Professional Women's Clubs.
Mr. Adolph Ochs, New York, director, Associated Press.
Hon. Wm. Phillips, Boston, former Minister to Canada.
Hon. Alfred E. Smith, New York, former Governor of New York.

International Peace Park
Mr. L. S. Taber, Columbus, Ohio, Master National Grange; Vice-president, American Country Life Ass'n.
Senator Thomas J. Walsh, Montana.
Mr. Owen D. Young, New York, lawyer, etc.
Canadian Advisory Organization Committee (Sponsoring Committee for Canada)
William E. Groves, Bowmanville, Ont., Manager Kingsway Nurseries.
Leo. McKenna, Montreal, P.Q., florist.
C. S, Thompson, Peterboro, Ont., secretary, Canadian Florists and Gardeners Assn.
Victor Scott. Winnipeg, Man., florist.
Silas A. McFadden, Toronto, Ont., Manager, Tidy & Sons, florists.
American Advisory Organization Committee
1 Sponsoring Committee for United States)
Donald J. Crighton, Cohvent, N.J., estate superintendent. .
Robert P. Brydon, Cleveland Heights, Ohio.
Joseph R. Dunlop, South Euclid, Ohio, estate superintendent.
Montague Free, Botanic Garden, Brooklyn, N.Y.. horticulturist.
Wm. J. Gray, Washington, D.C., parks superintendent.
Board of Trustees
William V. Udall, Boissevain, Man., editor. Joseph E. Atkinson, Toronto, president, Star Publishing Company.
Dr. Chas. MacLachlan, San Haven, N.D., superintendent State Tuberculosis Sanatorium.
Joseph W. Parmley, Ipswich, South Dakota, president, Canada-to-Canal Highway.
Having set up a powerful organization composed of' leading men and women of thi3 continent, backed by technical experts in horticulture, the next step was the selection of a site for the international peace garden. For this purpose two experts were chosen, one representing the sponsoring body of the United States and one for. Canada. The Canadian representative as chosen was Henry J. Moore, above mentioned, a graduate of the Royal Botanic Gardens at Kew, England, and one of the leading horticulturalists of this dominion. The American representative as chosen was Joseph K. Dunlop, of South Euclid, Ohio, estate superintendent to Congressman Chester W. Bolton. Mr. Dunlop is one of the outstanding practical horticulturists in the United States, having a special knowledge of ornamental gardening and landscape architecture.
This committee of experts had several sites brought to their attention, both east and west,' and after a careful and unhurried survey, reported unanimously to the sponsoring associations in the summer of 1931, in favour of the Turtle mountain site, on the International boundary between North Dakota and Manitoba. This recommendation was subsequently agreed to by the international committee on September 16, 1931.
Mr. J. W. Parmley of Ipswich, South Dakota, and Mr. W. V. Udall of Boissevain, Manitoba, drew the attention of the committee to the Turtle mountain region, and on June 2, 1931, it was inspected by Mr. Dunlop and Mr. Moore. Some idea of the nature of the region may be gathered from part of the report of Mr. Moore as to the inspection, I quote:
We inspected the area from the air, and what a sight greeted the eye. Those undulating hills rising out of the limitless prairie are filled with lakes and streams and in the lakes are lovely islands, all timber clad. On the south of the imaginary and unrecognizable boundary, wheat everywhere! On the north the Manitoba forest reserve. One photograph taken from the air revealed seventeen lakes, but in the Turtle mountains there are nearly two hundred on both sides of the boundary. What a place for a garden! Then on the ground our inspection of soils and vegetation was made. There is no finer soil anywhere. The vegetation composed of oak, elm, ash, poplar and other trees and hundreds of species of shrubs and flowers revealed this. Then a motor boat trip across Lake Max, in the forest reserve, where some ten species of ducks were noticed. Also in this reserve are beaver and many other forms of animals, and birds, including swans and partridge.
The Turtle mountain region is the watershed of Manitoba and North Dakota. It is a beau-; tiful undulating plateau which rises out of the seemingly endless prairie. The hills rise from a mean elevation of four hundred feet to an average of about one thousand feet, although at 'one point an elevation of 2,500 feet is. attained. The contours of the area lend themselves to the development of landscape gardening in all its forms. There are sheltered areas galore: there are scenes of pastoral loveliness and others of rugged grandeur.
A popular scientific description of the Turtle mountains has been given by Daniel E. Willard, A.M.; Fellow of the American Geological Society, former professor of geology, state agricultural college of North Dakota. He says:
The Turtle mountains plateau is a unique remnant of an older landscape of the continent of North America. It is located in approximately the centre of the continent, one half way between lake Superior and the Rocky mountains. It is crossed by the international boundary between the United States and Canada.
Owing to its unique location and to its geologic and geographic features it is a most fitting place for the location of the International Peace Garden. Its beauty as a natural garden at once impresses the observer. Its fitness to be the place of an international playground, and movement of international friendliness, and good-will becomes more apparent the more the natural features of its geological character are studied.
There is probably no accessible spot between the Atlantic and Pacific oceans that affords a more inviting and appropriate location for the International Peace Garden than does this natural beauty spot of the Turtle mountain.
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The Turtle mountains are not mountains at all. The region is part of the great central plain of the continent. It is a plateau about 40 by 60 miles in extent lying in part in the United States and in part in Canada. Nature, in laying out the ground plan of the landscape of the continent did not give heed to political boundaries. It happens that the political boundary, between the United States and Canada, crosses this unique landscape feature.
Great valleys have been formed by the erosion of streams. Remnants of the original formations, that have not been carried away, remain as hills and plateaus. The Turtle mountain plateau is such a remnant. The great valley of the Souris or Mouse is on the west and north. The great Assinniboine basin is north. The Pembina, tributary of the Red river of the north, lies to the east and north. To the south is the great plain of the Devils lake region, sloping to the south, a part of the Shevenne drainage system. . . .
It is a natural garden. Stones-'boulders-of every kind found in the formation to the north for hundreds of miles occur here in rich profusion, Granites, quartzets, porphyry, limestones, fragments of hard volcanic lavas, soft shales, in fact every variety of formation of which the earth is composed in the region extending to the west of Hudson's bay may be picked up here.
A rockery may some time adorn the garden or a geological museum made up of stones picked up in the immediate vicinity, that represent every geologic formation between the international boundary and the North Pole.
A more charming recreation ground would be hard to find. Places of greater interest to the geologist, the nature lover, are few. The lover of fish, birds and game will revel here. The land belongs to two great nations. It is open to the world. Nature made it a monument to peace and good will.
For the purposes of the garden, the province of Manitoba, kindly agreed' to donate to the association fifteen hundred acres of .the Turtle mountain .forest reserve, and the state of North Dakota agreed to purchase and donate an adjoining block of land of equal size. Following this a meeting of representatives of the sponsoring organizations and representatives was held at the Royal York hotel in Toronto on December 2, 1931. At that conference the state of North Dakota was represented by Dr. Charles MoLachlan of San Haven, North Dakota, and the province of Manitoba by Hon. D. G. McKenzie, the Minister of Mines and Natural Resources. The two governments then formally donated to the international peace garden a tract of land in the Turtle mountains of over 3,000 acres, being an oblong block, three miles long by one-and-a-half miles wide.
The .plans of the garden will 'be under the supervision of three expert horticulturists appointed by the American sponsoring body and three by the Canadian sponsoring body, and the actual carrying out of the plan will be 
under the supervision of the secretary who will reside at or near the garden.
May I say in passing that 'the official sponsoring organizations are:
For Canada-The Canadian Florists and Gardeners' Association.
For United States-The National Association of Gardeners.
Among the different organizations which have endorsed the project are the following in Canada:
1.	The National Council of Women of Canada.
2.	The Federated Women's Institutes of Canada.
3.	The Canadian Florists and Gardeners' Association.
4.	The Ontario Gardeners and Florists' Association.
5.	The Manitoba Horticultural Association.
6.	The Ontario Horticultural Association (80,000 members).
. 7. The Saskatchewan Horticultural Association.
8.	The Ontario Women's Auxiliary to the Canadian Legion.
9.	The Canadian Historical Society.
10.	The United Farm Women of Saskatchewan.
11.	The president of the Kiwanis clubs of Canada and several local clubs.
12.	The Canadian Gladiolus Society.
13.	The Rose Society of Ontario.
14.	The United Church of Canada.
15.	The Roman Catholic Church.
16.	The Anglican Church of Canada.
17.	The Salvation Army of Canada.
18.	The Baptist Church of Canada.
19.	The various local Rotary Clubs.
20.	The Toronto Progress Club.
21.	The Holy Blossom Synagogue (Hebrew) Toronto.
22.	The Boy Scouts of Canada.
23.	The Girl Guides of Canada.
24.	The Toronto and District Labour Council.
25.	The ornamental committee of the Canadian Horticultural Council.
26.	Catholic Women's League.
27.	The Manitoba government and opposition.
28.	Various local chapters of the Imperial Order of the Daughters of the Empire.
29.	The University of Manitoba.
30.	There are also a large number of boards of trade, chambers of commerce, municipal councils, and other governing bodies.
Among the United States organizations which have endorsed the project are :
]. The National Association of Gardeners.
2.	The Federated Business Women's clubs of the United States.
3.	The Massachusettes Horticultural Society.
4.	The garden clubs of America.
5.	The New York Horticultural Society.
6.	The American Orchid Society.
7.	The American Rose Society.
8.	The American Society of Landscape Architects.
9.	The Boy Scouts of America.
10.	The Campfire Girls.
11.	The Lions Clubs.
12.	The Florida Horticultural Society.

13.	The North Dakota Rural Letter Carriers'
Association.	_
14.	The North Dakota Postmasters' Association.
15.	The Yellowstone Highway Association.
16.	The Mount Rushmore National Memorial Association.
17.	The Canada-to-Canal Highway Association.
18.	The Great Northern Railroad.
19.	The Rapid Airlines Corporation.
20.	The Magna Carta Day Association.
21.	The imperial orders of the Daughters of the Empire of the United States.
22.	The chambers of commerce of North Dakota. South Dakota and many other states.
23.	The government of North Dakota.
24. The Department of Education, North Dakota.
25. The Department of Education, South Dakota.
26.	The International Bird Banding Association.
27.	Various boards of trade and municipal councils representing some 100 towns in the middle west and elsewhere.
28.	The American Pigeon Society.
29.	Churches of practically every denomination throughout the United States.
*Nursery companies and individuals in many countries have promised to donate trees and shrubs and perennial flowering plants by way of having their native countries represented in the garden.
There will be rock gardens, wild flower sanctuaries, greenhouses for tender plants and trees, shrubs and flowers of all varieties and kinds. Many institutions have asked for the right to establish within the garden memorials to their respective associations including the Magna Carta Association, and many others.
Parents have donated money to have trees planted in the names of their girls and boys, and the -Girl Guides of both countries have started a movement to have every company in the two countries provide money to plant a tree for each. The Boy Scout movement is also considering a similar idea for their association.
The garden will be a thing of beauty even as Kew Gardens, London.
There appears to be no lack of cooperation, and the nurserymen of North America and Europe have come forward in large numbers offering their assistance. It is hoped (that the garden will be able to establish a standard for horticulture on this continent.
The location of the garden is an admirable one inasmuch as it is within thirty miles of the geographical centre of the North American continent, and is easily accessible from all directions.
From the south the garden may be approached by way of the C'anada-to-Canal highway, otherwise known as the C. to C. highway, which is an international highway going south from Manitoba through the states
International Peace Park
of North Dakota, South Dakota, Nebraska, Kansas, Oklahoma, Texas and the PanAmerican republics of the Panama canal. It is the longest highway on this continent going north and south. Within the province of Manitoba it is located on provincial highway No. 25 which is a highway running directly south from the city of Brandon through Boissevain to the international peace garden, and this highway is linked up with the trans-Canada highway at Brandon, being provincial highway No. 1. It may also be approached from the east by provincial highways No. 1 and No. 2.
The international peace garden is approximately sixty miles south of the city of Brandon, and ten miles south of the town of Boissevain in the province of Manitoba, and ten miles north of the town of Dunseith in the state of North Dakota.
The organization behind the international peace garden is not one of any particular geographical location, but is a business organization which sprang from various centres on this continent, after four years of study and work, up until the present time, when it is actively sponsored by thousands of the leading citizens in Canada and the United States-The international peace garden is not concerned with either politics or religion, but draws its support from those of all creeds, political affiliations and races who believe in the commemoration of the great peace between the United States and Canada, by the creation on the international boundary of a beautiful garden, which on its completion will rival the Royal Botanic Gardens at Kew, England, or any other place in the world.
The international peace garden receives its financial support from public subscriptions obtained by its various sponsoring organizations throughout the United States and Canada. The objective is an endowment of five million dollars which when properly invested will yield an annual revenue large enough for perpetual maintenance. Of this amount the Canadian share is reckoned at one million dollars. No really active campaign has yet commenced, but contributions have been coming in from all over Canada to Sir John Aird, the Canadian treasurer, and to date in Canada alone over six thousand persons have contributed. Public schools throughout Canada have been taking a special interest in the project and school children have been permitted to contribute amounts of from five cents upwards and contributions have varied from that amount up to fifteen hundred dollars. Each contributor becomes a shareholder, and the names are to be recorded in
International Peace Park
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a permanent record book to be maintained within the garden. The land for the garden having been donated, and so many people having come forward, unasked to contribute, the committee anticipates no difficulty in being able to maintain the garden for an indefinite period of time.
The dedication of the international peace garden will be held on July 14, 1932, and to this dedication the world is invited. It is hoped that at the ceremony there will be present the Prime Minister of this country, or members of his cabinet, and the President of the United States, or members of his executive council, and leading representatives from the different governments, the different churches, and the leading societies of both countries. The arrangements for the dedication will be under the management of the International Peace Picnic Association which last year held a celebration at the site, at which some ten thousand people were present.
Legislation is now going through the legislatures of North Dakota and Manitoba to incorporate the international peace garden, and also to transfer to it fifteen hundred acres on each side of the international boundary or a total of three thousand acres, making up a block of land three miles long by one and one-half miles in width. Words cannot express the great feeling of thankfulness felt by the people of this continent to the government of the province of Manitoba and that of the state of North Dakota for the great Confidence shown in this project by the magnificent gift to it of three thousand acres of land.
What I desire to point out to this house is that the international peace garden movement in reality commenced in 1928, and is sponsored and endorsed by leading citizens and societies in the United States and in Canada. I desire also to make it very clear that the site for the international peace garden was selected by horticultural experts appointed from the United States and Canada, and that a site was not chosen until 1931, after due deliberation and proper examination.
The international peace garden is not a government institution, but is rather what might be termed a foundation to commemorate peace administered by a business organization in accordance with the wishes of its shareholders.
The governments of Manitoba and North Dakota have shown their confidence in the project and its personnel by donating 3,000 acres, and the garden will be dedicated this year at a site which is in the Turtle moun-
tains in practically the geographic centre of the North American continent, at a location which in the opinion of the experts is highly suitable for the purposes of the garden.
May I say in passing that the international peace garden should not be confused with the Waterton Glacier Peace park, about which this house may have heard something. The Waterton Glacier project is merely a change of name in connection with the national park now in existence, with the hope that by including the word "'peace'' tourists in large numbers may be brought to view its forests. The change in name does not include the creation of anything new, nor does it make the forest the property of the public, but is merely the advertising of an area which in its present form has been in existence as long as the continent, and which was formerly known as Glacier park and Waterton park.
An international peace garden has a value which is educational and symbolic and renders a material benefit to the two nations of this qbntineht which cannot be over estimated.
In commemorating a peace of over one hundred years it invites a continuation of peaceful and friendly relationships without which there cannot be material progress. It encourages peace rather than war and breaks down the barriers of reserve and indifference. It tends to offset insidious and dangerous propaganda which may be engendered by vocal citizens on both sides of the border and helps to. disarm hatred and prejudice.
There is nothing which can be compared to a garden as typifying peace, and there is no memorial as beautiful as one of trees, shrubs and flowers. Other memorials of stone and concrete>
there have been, but a garden becomes more beautiful and more symbolic as the years advance, and the more the visitors who come to this international peace garden the stronger the friendship between the two nations will become.
The garden will become an object lesson to the nations of Europe, pointing out that nations may live in peace as neighbours to the mutual benefit of each country.
In the past we have enjoyed the friendship and confidence of the American people, but it is always highly desirable that such a condition of affairs should be nurtured and strengthened, in order that founded upon the past a bond of everlasting friendship may be created for the future. .
I think it highly proper at this point to draw to the attention of the house a part of the address delivered to this house by the Prime Minister on July 8, 1931, when speak-

ing on the Disarmament conference, as found on page 3552 of Hansard, he said:
The development of democracy depends upon the maintenance of peace. War is destructive of all democratic forms of government. The declaration that this country desires to maintain peace is not sufficient. It is idle to think that permanent and lasting peace can come in our time merely by our making declarations and speeches. We have passed in the house and elsewhere resolutions in favour of peace; we have become parties to treaties of arbitration, and we have joined with other nations in declaring that so far as we are concerned war is renounced as an instrument of national policy. But all these renunciations, all these declarations, all these resolutions in favour of arbitration and peaceful settlement of dispute, either by recourse to law in world courts or other peaceful means, are useless except to the extent that they influence people's minds to think in terms of peace. If we are to have peace we must have it by cultivating and maintaining the spirit of peace, not the spirit of war. A warlike spirit is not consistent with the maintenance of peace, and the spirit of peace is an attitude of mind that comes from continuous education. It is therefore useful that we should from time to time make declarations so that the youth of the country may see the glories of peace as distinguished from the heroic achievements of war.
No man who reads history, no one who is familiar with the growth of civilization and with the heroic achievements of men who have given their lives on battlefields in every part of the world for high principles and great causes, can fail to realize that their example has inspired generations in days gone by, and will continue to inspire noble achievements that are consistent with the courage and enterprise of our races. But in this age we realize that war on any scale is destructive, not only of the nations that engage in it, but of the world at large. There can be no war of any importance now that does not become general in its effects and influences. There can be no war in these days of scientific achievement in the use of poisonous gases, artillery, tanks and aerial warfare that is not fatal to the very development of civilization itself. We now realize that far from being a virtue war is the negation of all virtues and is destructive of the world's civilization. But in the face of all that has been said, as illustrating the point I desire to make, it will be found that to-day amongst European nations there are many men under arms; equipment is being provided for war; men are talking in terms of the next great conflict, as though we had not been at the world's Gethesmane.
How are we to bring about the end we have in mind? We must do it, as I have said, by creating the will to peace, which comes from continuous educational effort. . . .
No prairie fire of which we have ever heard could spread like the conflagration of military operations in communities divided only by imaginary lines. That being so, disarmament must be a world-wide state of mind.
This country in the northern half of this continent, this young democracy with its ten millions of people, freed from the horrors of all probability of war within its borders, its 41761-208
International Peace Park
shores protected by the application of doctrines of an international character, has very little to disarm. . . .
I trust that the representations we will offer will not be unworthy of the great traditions of Canada in her struggle to maintain peace, in her belief in peaceful methods for the settlement of disputes, in her conviction that by recourse ito judicial and arbitral methods the differences of peoples having been settled, the differences of nations may also be concluded.
The international peace garden will serve a great educational purpose in cultivating and maintaining the spirit of peace rather than- the spirit of war, and is receiving the support of the people of this continent. Following the dedication on July 14 of this year, the garden will symbolize the hopes and aspirations of two great peoples who speak the same tongue, and who cherish the same ideas in regard to peace, and will be a perpetual reminder of the fact that there is a better way to settle international disputes than by recourse to war.
Mr. J. S. STEWART (Lethbridge):: In order to meet the wishes of the committee I promise to be very brief indeed, Mr. Chairman, but as this bill relates to a part of the country which I have the honour to represent I feel it incumbent upon me to say a word or two on the subject.
The action now being taken is the first step on our part towards carrying out a contract made between this government and the government of a friendly country, the United States of America, for the establishment of an international peace park between Canada and the United States. About six weeks ago a bill was passed by congress and we are now carrying out our part of the contract as agreed to by the Department of External Affairs in a letter written, under date of February 17 of this year, by Doctor Skelton, in which the United States were notified that if they would cooperate in creating this international .peace park so far as Glacier park is concerned, Canada would reciprocate. The two parks lie adjacent to one another. There is in Canada possibly 225 square miles in the Waterton lakes district, and the Glacier national park in the United States comprises an area of 1,500 square miles. There is a common body of water between the two parks known as Waterton lakes. There are in these two parks two very fine hotels operated by the Great Northern railway. There is the Glacier hotel at Glacier station, and in Canada, at Waterton lakes a magnificent hotel which cost somewhere in the neighbourhood of $250,000 to build, known as the Prince of Wales hotel. The idea of having this known as an international peace .park originated at a meeting of Rotarians held about a year ago at Waterton

International Peace Park

lakes, attended by many representatives from the United States as well as from Alberta and other provinces of Canada. They decided to approach their respective governments and ask them to declare these two parks in the two countries an international peace park. As I say the bill has already passed congress and has been assented to, and we are now carrying out our part of the contract in the bill which is before the committee.
May I say that the opening celebration will be held on June IS of this year, at which there will be present representatives from the United States and Canada and from many other parts of the world. There are gentlemen coming from England to take part in the celebration and speak on that occasion. The idea behind it all is to celebrate the one hundred years of peace, friendship and goodwill which have existed between the two countries. There will be four trains carrying the international Rotarians to their great meeting which will be held at Seattle, and these trains will be halted at Glacier station for six hours. The visitors will be transported to Canadian territory, and I would like to invite hon. gentlemen to take part in the celebration. I heartily commend to the committee the passage of this bill.


William Richard Motherwell: When this bill was on the order paper for its first reading, it stood there for four or five weeks, halting, the government apparently not knowing what to do about it. I was wondering if the government was ever going to go forward with it.


Richard Bedford Bennett: It stood there awaiting the passing of the American bill.


William Richard Motherwell: I think it awaited many other things besides that. Anyhow it is here now. It has been' given its first and second readings and is now in committee of the whole, and I have not yet heard the sponsor of the bill say anything about it. I have no desire to put the Minister of the Interior in an awkward position, but I do not propose to have this bill go through in this somewhat clandestine fashion without my having something to say about it even if the minister won't.
I was associated with the Turtle mountain scheme, which was started four years ago, and as representing the prairies I was in favour of it. The people of Saskatchewan with no boundary line site as good, and the people of Manitoba, were behind it. A secretary was appointed in Toronto, by name Mr. Moore. He has been here comparatively recently and it was from him that I learned the probability

of this Waiterton scheme not being likely gone on with. But here I find it at this stage, in committee of the whole, and the minister has not said a word about it.


Some hon. MEMBERS:: Oh yes he did.


William Richard Motherwell: At what stage?


Thomas Gerow Murphy: On the introduction of the bill.


William Richard Motherwell: Let us hear some
more about it, then, as the explanation on the first reading is generally pretty slim.


Thomas Gerow Murphy: I was just trying to be
courteous to the hon. member.


William Richard Motherwell: I am trying to be courteous to the hon. minister, and I want to give him the opportunity to say something more now on this bill. I have some material in my room and I hope to keep this discussion going until eleven o'clock so that I may get my memory freshened up by consulting my material. I had no idea that this was going to be gone ahead with at all. I am very much concerned about it. I saw the peace arch south of Vancouver some years ago, and it is a very beautiful representation of peace between the two countries. I believe in that kind of thing. I believe in both symbolizing and living the peace, but I do not believe in having a scrap among the Canadian provinces for the sake of peace between part of Canada and part of the United States, and that is what my hon. friend the minister is provoking by this bill. You cannot have the whole boundary line seeded down with peace parks, gardens and arches. If you are going to have one peace park in Alberta you will kill the Turtle mountain scheme, and if you are going to have the Turtle mountain scheme it will probably hurt the Alberta scheme. You cannot have and maintain the two as at present constituted. That is the situation as I see it. I did not make any contribution towards the Turtle mountain scheme except to lend it my moral support, and I am going to continue to lend it my moral support, and possibly go a little further at a later stage. I am familiar with the site at Turtle mountain. It was one of the first places I went to in 1881 when there was very little settlement, and I know something of its suitability for a park. The establishment of that park has been under way for four years.
I would also point out that these park names are very similar; no provincial secretary's department w'ould issue charters with two names so similar, but inasmuch as this is a federal bill

International Peace Park
and Manitoba's is a provincial one, it means that there is evidently no law restraining plagiarism in the matter of names as between the dominion and provinces.


Thomas Gerow Murphy: If my hon. friend will
allow me-


William Richard Motherwell: I want my hon.
friend to get up and help me kill a little time until eleven o'clock.


Thomas Gerow Murphy: The area in the Turtle
mountains was not set aside or named in a bill by the provincial government. They simply donated the area, but there was no bill passed.


William Richard Motherwell: No bill was passed by the Manitoba legislature with respect to it?


Thomas Gerow Murphy: No, the area was set aside as an area which could be used for the purpose.


William Richard Motherwell: The Manitoba government certainly got behind it and took some action, whether by way of issuing a charter for a company or by means of a bill or order in council I do not know, but at all events the Manitoba government sponsored the scheme. The state of Dakota did the same, and congress passed a bill with respect to certain school lands, thus sanctioning this peace garden. All the preliminaries necessary for the establishment of the Turtle mountain peace garden were started four years ago before this other scheme was ever heard of, or three and a half years ago at all events. If this is an evidence of my hon. friend's idea of peace among ourselves, I do not think very much of it. I do not see how under the present financial conditions of the country we are going to build two peace gardens, much less maintain them after they are built. I can quite understand the position of my hon. friend from Lethbridge and of the Prime Minister, who made a slight interjection a moment or so ago. Now that the thing has got going to this extent, they feel obligated to get behind it, but I am sure that they must both wish it was in Jericho or at the bottom of the sea; for they have to take a stand on it just as I have to do, and the Minister of the Interior also. My standpoint as a member of the opposition does not amount to very much, but as a citizen of the prairies who wants to see one of these schemes go ahead I object to trying to go ahead with two, with the strong probability of at least one of them falling down. That is what is likely to happen, during such times as 41761-208J
these at least. I should like to see an arch on the prairie, something like the one south of Vancouver. Some few years ago I had the opportunity of motoring in that vicinity and saw the peace arch there erected. I was then impressed with three obvious facts: First, it takes money to build an arch, second, it takes a considerable amount of ground, and third, it takes a lot of money to maintain it. I imagine that will be the experience with all the parks on our southern boundary with which the government are connected. There is no doubt that when the two prairie parks proposed are in a state of completion, if they both get that far, large sums of money will be required for their maintenance.
In my view it is wrong to present a bill such as the one now before us, the title of which is so much similar to the other one that the people are being deceived. They are confusing the two. The provinces have always held that they were justified in refusing to issue a charter to a company the name of which is so much like that of another that it may lead to deception, so that people may not know which from t'other or one from the other. I take it that spirit should be reflected in this bill, and nobody is familiar with that fact more than the Prime Minister. On the other hand I quite appreciate his position. I expect this is a Calgary show.


An hon. MEMBER:: Oh no.


William Richard Motherwell: It is an Alberta
show, then.


An hon. MEMBER:: A stampede.


William Richard Motherwell: A duplication of
peace gardens is most unfortunate. Certainly I should like to hear the Prime Minister speak at this time, because I should like some enlightenment. It is my desire to represent the people in Saskatchewan who are behind the Turtle mountain peace garden. They believed that there would be only one such boundary garden, and were quite agreed to have it at Turtle mountain. Along her boundary line Saskatchewan has no such advantageous location. There is no place from a prairie standpoint between the Rocky mountains and Winnipeg which would afford anything like the suitability of the Turtle mountain district. That is the reason I favoured the project and was absolutely shocked when I learned that this bill was on the order paper. I was not at all surprised when the Minister of the Interior hesitated to promote it any further. However, now that he is proceeding with the legislation I expect he will give us
330S
International Peace Park

an explanation. If he will speak I shall immediately sit down, because I am very much concerned in his statement. Probably he would elevate his voice to an audible pitch so that I may have a better opportunity to hear him.


Some hon. MEMBERS:: Carried.


William Richard Motherwell: No, it is not carried.


Thomas Gerow Murphy: Mr. Chairman, those who have already spoken-and I refer particularly to the first two speakers-have described the areas in which it is proposed to locate in one a peace garden and the other in which there is a national park. It is not necessary for me to recapitulate their statements. Suffice it to say that the peace garden idea was started voluntarily about four years ago by organizations in Canada and the United States known as horticultural societies. The meeting' at which the project took definite form so far as Canadian participation is concerned, was at the city of Toronto, on Canadian soil. Since that time the work in Canada has been carried on voluntarily. Certain moneys have been raised and promises of contributions made. At this point may I say that I consider it was a very worthy idea indeed. The location of the peace garden was not at first decided upon. A committee was formed which, acting in conjunction with a similar organization in the United States, was to select a position along the international boundary line at which this garden could be located. Eventually the Turtle mountain site was selected. The government of Manitoba set aside an area in a forest reserve, and the state of North Dakota set aside an area in that state immediately adjoining along the boundary line. Recently the United States congress passed legislation by which certain school lands were added to the area in North Dakota. So much for the peace garden.
For a number of years there has been in southern Alberta an area known as Waterton park. Immediately across the boundary in the United States is an area in the state of Montana known as Glacier park. So far as natural beauty, scenery and facilities are concerned these two areas virtually form one park. The idea now is simply to name that area the Waterton Glacier International Peace Park. The hon. member for Melville is mistaken when he states that the setting up of this area will entail great expense. If he so believes he is badly misinformed, because no expense whatsoever is involved in this measure.

These areas will continue to be administered by the respective governments as they have been in the past, and throughout the years moneys have been spent to develop the two areas, namely, Waterton park in Canada and Glacier park in the United States. This bill is introduced for only one purpose, namely to give an international name to the two areas.
In addition to these projects there are other monuments situated along the international boundary line, namely the peace arch on the international boundary between White Rock, British Columbia, and Blaine, Washington. And then, further, there is the international peace bridge which connects-


Armand Renaud La Vergne: Order. It is now eleven o'clock.


Thomas Gerow Murphy: What about the eleven
o'clock rule?


Mr. RHEAUME:: Go on.


Ernest Lapointe: It is eleven o'clock.


William Richard Motherwell: Yes, eleven o'clock is striking.


Armand Renaud La Vergne: I have to report progress.


Pierre Auguste Martial Rhéaume: No, let us go on.


Armand Renaud La Vergne: I have to report progress.


Thomas Gerow Murphy: Very well; I move that the committee rise and report progress.


Ernest Lapointe: Could we take up something else?
Progress reported.


Pierre Édouard Blondin: When shall the committee have leave to sit again?


Some hon. MEMBERS:: This day.


Richard Bedford Bennett: This day. Mr. Speaker, if there is general consent in the house, and the shorthand writers are not too tired, we might dispense with the eleven o'clock closing rule for at least twenty-five or thirty minutes. If that is the will of the house I would move accordingly.


Pierre Édouard Blondin: Mr. Bennett moves, seconded by Mr. Guthrie, that the house do not now adjourn.


Richard Bedford Bennett: No, that the eleven
o'clock rule be suspended.


Some hon. MEMBERS:: Carried.


George Gibson Coote: Mr. Speaker, how long do you wish to sit?


Edward James Young: Twenty-five minutes.

Special War Revenue Act


Richard Bedford Bennett: Whatever may be the
judgment of the house. If the house desires to sit for only thirty minutes, well and good; if it desires to sit until twelve o'clock I am content. It rests entirely with the house; if the house does not consent I shall not ask* the house to sit.


William Lyon Mackenzie King: May I ask if it is the intention of the Prime Minister to go on with the bill we have been discussing, or to proceed with something else?


Richard Bedford Bennett: I had intended to proceed with the bill.


William Lyon Mackenzie King: I imagine we will make more progress if we proceed with something else.



WAYS AND MEANS


[Stage Direction]
Right Hon. R. B. BENNETT (Prime Minister) moved that the speaker do now leave the chair for the house to resolve itself into committee of ways and means.
Pierre Édouard Blondin: Carried.


George Gibson Coote: Before you leave the chair, Mr. Speaker, I want to say that if this house cannot make progress-


Pierre Édouard Blondin: The motion was declared carried without a dissenting voice.


George Gibson Coote: I was trying to attract your attention when the motion was being put. I want to protest against Mr. Speaker reading motions and declaring them carried without looking to see whether or not any hon. member desires to speak to the motion.


Pierre Édouard Blondin: The motion is carried and the house is in committee.
Motion agreed to and the house went into committee, Mr. LaVergne in the chair.
6. (i) That the rate of consumption or sales tax as imposed by section eighty-six of the said act, as amended by section eleven of chapter 54 af the statutes of 1931, be increased to six per cent.
(ii)	That the following words be removed from the list of articles exempt from the consumption or sales tax set out in schedule III to the said act, as enacted by chapter 54 of the statutes of 1931, that is to say:-
"Bakers' cake and pies, not to include biscuits;" "and substitutes therefor" in line seven of the said schedule; "lard compound and similar substances, made from animal or vegetable stearine or oils;" "materials for use solely in the manufacture of any substitute for butter or lard;" "extract of rennet;" "ice cream;" "usual coverings ito be used exclusively for covering goods not subject to the consumption or sales tax;" "materials to be used exclusively
in the manufacture of usual coverings to be used for covering goods not subject to the consumption or sales tax."
Also under the heading "Goods Enumerated in Customs Tariff Items;" the following figures and words, namely;-
"45. Milk foods, n.o.p.; prepared cereal foods, in packages not exceeding twepty-five pounds weight each;"
"46. Prepared cereal foods, n.o.p.;"
And that the word "lard" where it first appears in line eight of the said schedule be struck out and the words "lard, when produced in Canada" be substituted.
(iii)	That the following words be inserted in the said schedule:-
"All articles manufactured or produced by the labour of the blind in institutions established for their care or under the control or direction of such institutions."
(iv)	That the following words be removed from the list of articles exempt to the extent of fifty per cent of the consumption or sales tax set out in schedule IV to the said act, as enacted by chapter 54 of the statutes of 1931, that is to say:-
"Biscuits of all kinds."


John Livingstone Brown: In regard to this matter of coverings, I have a letter from a man interested in the production of honey, and I should like an explanation from the minister.


Edgar Nelson Rhodes: If my hon. friend will permit me, I can anticipate what he is going to say iby advising him that while the resolution will remain we will propose an amendment to the bill founded upon the resolution which will eliminate the usual coverings from the six per cent sales tax.


John Livingstone Brown: That would include honey containers?


Edgar Nelson Rhodes: Yes, all containers.


Thomas Merritt Cayley: Including cheese boxes?


Edgar Nelson Rhodes: Yes.


Peter John Veniot: Does that include salt?


Edgar Nelson Rhodes: Yes.


Mr. TOTZKE:: Would that include flour sacks?


Edgar Nelson Rhodes: Yes.


George Gibson Coote: I should like to ask hon. members in the far comer to speak up so that we may hear them.


Edgar Nelson Rhodes: The question was with respect to usual coverings, and1 I advised the hon. member for Lisgar that when the bill is introduced, founded upon this resolution, it will contain a provision which will eliminate usual coverings from the operation of the sales tax.


Peter John Veniot: You will put it back where it was before?
Special War Revenue Act


Edgar Nelson Rhodes: Yes.


Alan Webster Neill: Does that include tins for salmon?.	.


Edgar Nelson Rhodes: Yes.


Thomas Merritt Cayley: Will the minister tell the committee if it is intended to change the tax on ice cream in any way?


Edgar Nelson Rhodes: No, there is no intention of changing the tax on ice cream.


John Livingstone Brown: Will the minister leave ice cream subject to the tax?


Edgar Nelson Rhodes: Yes, ice cream will be subject to the tax.


John Livingstone Brown: That is another -burden laid upon the farmer.


Edgar Nelson Rhodes: I do not subscribe to that point of view at all. This tax is levied upon a processed food, and it should be borne either by the manufacturer or by the consumer or both. There is no reason why the farmer should have to pay it at all.


Thomas Merritt Cayley: Would the minister explain how he intends to collect this ice cream tax?


Edgar Nelson Rhodes: From the manufacturer.


Thomas Merritt Cayley: I understand there may be some difficulty in collecting it because the invoice price will differ in various cases.


Edgar Nelson Rhodes: I am advised by officials of the Department of National Revenue that there will be no more difficulty in administering the collection of this tax than there has 'been in the case of other sales taxes.


Thomas Merritt Cayley: But I was thinking of a case where ice cream might be bought from one manufacturer for perhaps 90 cents a gallon; other ice cream, with other services, might sell at $1 or $1.25, while if the ice cream is put in one of these frigidaires, together with certain other services, it might cost still more. The invoice price would not be a constant quantity; it would be variable.


Edgar Nelson Rhodes: The tax would be imposed upon the selling price of the manufacturer, and not upon the price referred to by my hon. friend.


Mr. MacLEAN (Prince):: I believe very strong protests have been coming in, have they not?


Edgar Nelson Rhodes: I have some amendments to move. I -move that paragraph 6 of the resolution be amended by adding thereto the following subsection:
That the following words be inserted in the said schedule III: "baker's cake and pies when produced by any one manufacturer or producer to the value of not more than $5,000 in any one calendar year."
The object is to exempt these to the extent of $5,000 -in the -case of all manufacturers who produce in quantities less than the sum -mentioned. They pay no tax, but those who .produce in quantities greater pay a tax.
Mr. M-aoLEAN: Does tha-t ind-ude biscuits?


Edgar Nelson Rhodes: No.


[Stage Direction]
Amendment agreed to.
Edgar Nelson Rhodes: I have an amendment with respect to articles manufactured by the blind.
We put these in the fully exempted -list, but we find that this would work unfairly. In the manufacture of -many commodities, I know that -certain manufacturers are themselves employers of blind- people, people who would otherwise be thrown out of work if the competition became very keen, as would likely happen should -the full exemption of six per cent obtain. I-t is proposed that instead of giving them ithe full exemption of six per cent we put them in -the half list. That would give them a -preference over goods manufactured in the ordinary way, but at -the same time it would not make the competition so unfair as to -preclude a reasonable opportunity for manufacturers to conduct their business in the ordinary course. The amendment is that the following words be inserted in schedule IV:
All articles manufactured or produced by the labour of the blind in institutions in Canada established for -their care or under the control or direction of such institutions.
Notice having been given in -the budget resolutions of -the intention to exempt totally from the sales tax articles manufactured by the blind, provision will foe inserted in the bill whereby such -articles will foe exempted from April 7 up to and including May 23, after w-hi-ch date, in accordance with the amending resolutions, these goods will bear the half rate of three per cent. I will ask my colleague -to move the amendment.


Edmond Baird Ryckman: That subsection (i.ii) of paragraph 0 of the resolution of April 6, 1932, to amend the Special War Revenue Act, be struck out and the following substituted therefor:

Special War Revenue Act
"(iii). That the following words be inserted in schedule IV: 'all articles manufactured or produced by the labour of the blind in institutions in Canada established for their care or under the control or direction of such institutions.' "


[Stage Direction]
Amendment agreed to.
Edgar Nelson Rhodes: I have another amendment, that paragraph 6, subsection (ii) of the resolution of April 6, 1932, to amend the Special War Revenue Act, be amended by adding thereto the following words:
That the words oatmeal, rolled oats, cornmeal, rolled wheat, be deleted and that there be inserted in lieu thereof: "oatmeal, rolled oats, cornmeal and rolled wheat when in packages exceeding five pounds each in weight"; and that the words "bran, shorts, middlings" be deleted and that there be inserted in lieu thereof the words "shorts, bran and middlings when for use as cattle, hog, poultry or other stock feed, or when sold for human consumption in packages exceeding five pounds each in weight."
The effect will be to place a tax on all processed foods uniformly, in the case of packaged foods, but all these commodities in bulk or quantities over five pounds in weight are tax free.


Alfred Edgar MacLean: Has the minister considered the request of silver fox ranchers with regard to biscuits used for the feeding of these animals? It is only fair to exempt them when other foods for animals are exempted.


Edgar Nelson Rhodes: We have arranged in the
bill which is based on the resolution to place fox food in the category of cattle foods, and therefore they will be exempt.


Alfred Edgar MacLean: Thanks very much.


Thomas Merritt Cayley: What revenue is expected
from the tax on ice cream?


Edgar Nelson Rhodes: Six hundred thousand
dollars.


George Gibson Coote: The minister has enumerated certain cereals. Were they taxed in the old act?


Edgar Nelson Rhodes: They were taxed until
1924. My hon. friend understands that we are taxing only packaged processed foods and not essential foods. Bran, shorts and middlings in bulk are not taxed.


Mr. KENNEDY (Winnipeg):: Does the
exemption apply to those articles in packages over five pounds?


Edgar Nelson Rhodes: Over five pounds they are not subject to the tax.


George Gibson Coote: I am not quite clear on that. Would rolled oats in a package or sack of five pounds or less be taxable, or rolled oats sold by a grocer out of a barrel in less than five pounds?


Edgar Nelson Rhodes: If they were sold out of
the barrel they would not be subject to the tax. The idea is to tax the processed and fancy named foods which are sold in package form.


George Gibson Coote: The bulk of the rolled oats
sold to-day is sold in small sacks. I do not know what the size of the sack is, but this is one of the staple foods.


Edgar Nelson Rhodes: My hon. friend realizes
that this tax is imposed on the manufacturer at the source; that is where it is paid. If a purchaser goes to a grocery shop and wants to buy the foods in packages, he must pay the tax.


George Gibson Coote: Whether this tax is paid by the manufacturer or by the retailer, in the end the purchaser must pay. I think it is a mistake to put a tax on cereals, which is one of the staple foods of the people.


Edgar Nelson Rhodes: If the individual desires
to buy in bulk or from bulk he does not pay the tax, but if he insists upon purchasing packaged food in packages of less than five pounds weight, he must be prepared to pay for a commodity upon which the manufacturer has paid a sales tax.


George Gibson Coote: The majority of people have not money enough to buy in bulk. The only way they can buy is in small packages.


Henry Elvins Spencer: They have acquired a
bad habit.


Mr. STEVENS:: They can get it in bulk for half price.


George Gibson Coote: In some places they cannot buy in bulk.


[Stage Direction]
Paragraph agreed to.
7. That the special excise tax on imports imposed by section eighty-eight of the said act, as enacted by section fourteen of chapter 54 of the statutes of 1931, be increased to three per cent.
Alan Webster Neill: Is the minister going to propose any more amendments?


Edgar Nelson Rhodes: There are a number of
amendments which will appear in the bill; for instance salt for- use by deep sea fishermen.


An hon. MEMBER:: A new budget.
Special War Revenue Act


Edgar Nelson Rhodes: The bill will exempt from the sales tax salt used in the sea and gulf fisheries.


Mr. POWER:: Is the minister considering the question of an excise tax on lumber?


Edgar Nelson Rhodes: That will be exempted
under the bill. The exemption will apply also to fibres and there will be a provision to exempt from the excise tax animals for the improvement of stock.


George Gibson Coote: Are barrels to be exempt?


Edgar Nelson Rhodes: Perhaps my hon. friend did not hear me; I told him that the bill will provide for the deletion of the tax upon all containers.


Peter John Veniot: In connection with salt,
does the minister refer to the excise or sales tax?


Edgar Nelson Rhodes: The sales tax.


William Lyon Mackenzie King: Does the minister agree with his colleague the Minister of National Revenue (Mr. Ryckman), who has been moving the various amendments, that this special excise tax is really a customs tax?


Edgar Nelson Rhodes: I do not know that any
good purpose can be served by discussing names. My right hon. friend knows that it is a tax applied for the specific purpose of raising revenue, and to that extent at least it is distinguished from a tax imposed as a customs -tax. It is purely a revenue tax of a special character as distinguished from an ordinary tariff. I am not disposed to quarrel at all with my right hon. friend as far as the name is concerned.


William Lyon Mackenzie King: What revenue does the minister expect to derive from this three per cent tax?


Edgar Nelson Rhodes: The estimate is that we
will derive a revenue of $5,500,000 for each one per cent, so that this tax ought to bring in $16,500,000.


William Lyon Mackenzie King: Am I right in assuming that this tax is to apply on the value for duty purposes, and that as a matter of fact it comes nearer to being a tax of four per cent than it does to being one of three per cent?


Edgar Nelson Rhodes: The tax applies on the duty paid value, but I think it is a tax of three per cent rather than- four -per cent.


William Lyon Mackenzie King: The average rate on dutiable goods is about thirty per cent, and when the value for duty purposes is taken into account the rate runs higher.


Edgar Nelson Rhodes: The value for duty purposes would be applicable only to a very limited number of articles, so I do not think it would have any appreciable bearing upon the amount.


William Lyon Mackenzie King: Will not the effect of this tax be further to restrict trade rather than to encourage it in such a way as to increase the revenue?


Edgar Nelson Rhodes: That is a moot question. I think it follows that to the extent that the duty is raised you make it a little more difficult for the hurdle to be jumped. The fact is that we need revenue and must seek it in every available way, and it was felt that under the circumstances this was a desirable method.


William Lyon Mackenzie King: As I understood the Prime Minister a day or two ago, he intimated quite frankly that the present duties were intended to be prohibitive.


Richard Bedford Bennett: When did he say that? Show me that.


William Lyon Mackenzie King: I shall be pleased to look it up. I certainly got the impression and I think the house did, that the duties had been put at a certain point avowedly for the -purpose of restricting trade.


Richard Bedford Bennett: Restricting, not prohibiting.


William Lyon Mackenzie King: They were at a point which in many cases was prohibitive, and I think that was quite frankly stated. At any rate we know that in many cases the present rate is prohibitive and how a further duty of three per cent is going to bring in revenue to the administration is a conundrum.
, Mr. RHODES: I think it is fair to say that all taxation takes a toll of business; it is a drain upon business as it is upon the purse. I do not think we can get very far by discussing this phase of it. It seems to me that the important question is, first, that we must have the money, and, second, we must find the best way to get it with the least detriment to business and with the least possible burden upon those who pay the tax.


William Lyon Mackenzie King: May I ask the minister whether the purpose of this tax is not part of the bargaining paraphernalia of the ministry in connection with the forthcoming conference? Is it not intended to assist the administration in bargaining?


Edgar Nelson Rhodes: No. The right hon.gentleman will recall that the tax was imposed in the first instance over a year ago as a one per cent tax. It is -purely a revenue tax and has reference to nothing else but revenue.

Special War Revenue Act


James J. Donnelly: If I buy goods in the United States to the value of $100 American money, they would be worth $110 in Canadian money, our dollar being at a discount. Would I have to pay this tax on the $100 or the $110?


Edgar Nelson Rhodes: It would be paid upon the invoice value of the goods in Canadian dollars.


William Lyon Mackenzie King: Does the
minister not think that in connection with the forthcoming conference it would be a helpful gesture to decide at once to abolish this tax so far as trade within the empire is concerned, indicating that the government's real desire is trade within the empire? Has the ministry considered that, or would the minister be prepared to make a statement before parliament prorogues?


Edgar Nelson Rhodes: I think that the representatives of the other British nations will be the first to realize our necessities and recognize that this tax is a tax for revenue purposes only.


William Lyon Mackenzie King: I cannot altogether agree with my hon. friend. Great Britain, for example, with whom we shall be chiefly negotiating, recognizing our necessities and, I believe, the need of our sceuring markets in that country, has imposed practically n,o duties against Canada. In November next the new British tariff becomes applicable to the dominions unless in the interval by way of negotiation something is arrived at which will encourage trade. My point is that it would be a helpful indication of the government's attitude and a real encouragement of trade within the empire if an announcement were at once made by the minister that this three per cent excise tax would not apply against goods entering Canada from the other parts of the empire. Moreover it would be adopting towards Great Britain an attitude similar to that which she is adopting towards Canada.


Edgar Nelson Rhodes: My answer to that is this: We have been giving a preference to Great Britain for a quarter of a century. So far as this excise tax on imports is concerned, it is applicable to the whole world, including the British dominions. Therefore we are in precisely the same position with respect to the preference as we were before the imposition of this tax. As regards its bearing upon interdominion trade, it may be a subject for discussion, but, if so, it would be a subject for the conference. It is not one upon which it would be wise or seemly for us to make an announcement in advance.


William Lyon Mackenzie King: The preference with Great Britain is by no means what it has
hitherto been. As my hon. friend knows, the first action on the part of the new Conservative administration was to raise the duty against Britain as well as against other parts of the world, and the preference was made distinctly less than it had previously been. It is not to-day anything like what it was in 1930. That, I think, is true so far as the preference to Britain is concerned. However, if it is preferences within the empire we are talking about, here is a real opportunity for Canada to show that she wants to encourage trade within the empire, by saying that, while she now has a tax that relates to the whole world, as respects trade within the empire she will not apply this three per cent impost. If my hon. friend is anxious to proceed along the lines on which Britain has set the example with respect to trade with Canada, he would consider that suggestion very carefully.
My hon. friend speaks about our having given Britain the preference. That preference has been as much of an advantage to Canada as to Great Britain. The idea that the only country which benefits by a preference is the one that sells and not the one that buys, is a mistake. No trade would ensue at all unless the arrangement were beneficial both ways. Trade in itself is exchange, and exchange in itself is valuable or it would not take place. It is wrong to argue that because we have given Britain the preference, she has been the only one to gain an advantage. We have gained because we have procured from Great Britain commodities we desired at a rate at which it would not have been possible to obtain them had the preference not existed. We have also another benefit because of the preference; we have been able to keep down the cost of living and some of the costs of production, and thus have helped our producers in the great basic industries, and have, in regard to our great export production, been better able to compete and hold our own in foreign markets. The preference, therefore, has been as much of a benefit from the Canadian point of view as it has been from the British point of view.
It should also be noted in this connection that, after all, Britain has not for the most part imposed any tax against us. She has given us in her markets the same opportunities as have her own producers or manufacturers. That is a large concession, very different from that which we give Great Britain, whose goods are taxed before they come into this country at all. All these points are matters of importance, particularly on the eve of a conference.
I again would suggest to the minister that he make some gesture showing that we wish
Special Wav Revenue Act

to trade within the empire, instead of making such trade more difficult as he is doing by the proposed three per cent tax. This tax, indeed, may be the means of entirely shutting out some British goods, especially when it comes on top of existing tariffs. As a preliminary to the conference, it would be an admirable step, just now when the minister is proceeding with his bill, to have it so amended that the three per cent tax will not apply to commodities coming from different parts of the British Empire.


Edgar Nelson Rhodes: I cannot agree with my
right hon. friend when he says that the people of the mother country have granted us a concession permitting us to trade with them on the same basis as they have allowed the whole world to trade with them.


William Lyon Mackenzie King: Not a concession. We have been in a favoured position in the British market in that we have been able to sell our goods on exactly the same basis as has the British producer or manufacturer. There has been no handicap of a tariff, except in a limited way, over which our commodities have had to pass before entering the British market.


Edgar Nelson Rhodes: That is not what my hon. friend said before. He may not have said then what he intended to say, but he said something about a concession having been granted to Canada and not to another country.


William Lyon Mackenzie King: I was speaking only in relation to trade between Canada and Great Britain.


Edgar Nelson Rhodes: When I spoke of our having given Great Britain a preference for a quarter of a century, I was not for a moment attempting to weigh the question of advantage to one side or the other, nor had I that in mind. I was dealing with the mere fact that there had been for that period of time a preference in this market to the mother country which we did not give to countries outside the empire. It may be that this three per cent tax is some handicap to business, but I submit that the people of the mother country, with the fairness which has always characterized them, would be the first to concede that it is purely a revenue-producing measure. My right hon. friend has suggested that, as a gesture prior to the conference, we might eliminate the three per cent tax in favour of the importation of British goods. Apart altogether from the wisdom of taking a step in advance of a conference where these questions should be a matter of discussion, let
(Mr. Mackenzie King.]
me point this out to my right hon. friend: If we did that, to the extent that we failed as a result to derive revenue-and we would lose revenue to a very substantial sum-to that extent we would have to impose additional taxation upon the people of Canada to make up the difference. Wherever the money comes from, we must have a certain revenue and it remains to be determined what avenues we should pursue in obtaining it. From that point of view I do not subscribe to the suggestion of my right hon. friend that it would be the part of wisdom for us to take the action he suggests. That is only my view, but I have it clearly in mind that that is the position which would appeal to the sense of fairness and justice of the British people.


William Lyon Mackenzie King: I do not wish to prolong the debate on this point; on the other hand I do not wish the minister to run away with the idea that he is going to secure revenue by adding a tax which, when placed upon the present tax, will have the effect of practically prohibiting trade. As our tax against Great Britain stands at the moment, there is very little preference left. A preference given to Great Britain means nothing unless the actual rate of taxation allows some British goods to enter this country. The rate of taxation with respect to most British goods, particularly with this three per cent added, will be prohibitory, and, to the extent that it is prohibitory, the minister will derive no benefit whatever. With this three per cent tax off, a little trade might trickle in, and to that extent there would be some revenue, so that it would be helping both the revenue and conference to take the step I suggest.


Edward James Young: I think if the minister would study this question carefully he would agree that the leader of the opposition was right when he said that this tax would work out closer to four per cent than three per cent because it is levied on the duty paid value of the goods. In fact, in cases where the duty has been raised one hundred per cent, it will work out to as much as six per cent.
In an unguarded moment the minister referred to this tax as a duty. I am not going to quarrel with him over the name, but it has all the earmarks of a duty and it works like a duty; that is, it is imposed on all goods coming through the customs.


George Gibson Coote: When is a duty not a duty?


Edward James Young: When you can evade it.


Edgar Nelson Rhodes: When it is an excise tax on imports.


Edward James Young: It will raise the price in Canada on all imports entering the country, and by that same act you notify Canadian producers of similar goods to increase their prices by a like amount. In the short session of 1930 the minister's leader brought in certain amendments to the tariff increasing the duty on a great number of articles, but before doing so he extracted from the Canadian producers of those articles a promise that they would not take advantage of the tariff to increase their domestic prices. The question I would ask the Minister of Finance is this: Has he obtained any similar assurances from Canadian manufacturers that they will not take advantage of this duty, or tax, if you wish to call it that, to increase their prices in the same proportion?


Edgar Nelson Rhodes: My right hon. leader extracted that promise in connection with amendments to the tariff from manufacturers producing the goods in question. He would not contemplate going hat in hand to the manufacturers of this country and consulting them as to whether it would be competent for the government to raise by way of taxation certain sums of money which the government needs. I may say in reply to my hon. friend that certainly I did not consult the manufacturers prior to suggesting an increase in the excise tax on imports by this two per cent. My hon. friend may be right but I can say to him that up to the moment I have not had any indication from any quarter that the price of goods has been increased by the manufacturers in consequence of the application of this increase in the tax from one to three per cent.


Edward James Young: At least the manufacturers have not been asked to give any assurance that they would not increase their prices. I take it then, that calling this tax an excise tax instead of a duty will be acceptable to the manufacturers, because it will absolve them from the promise they made that they would not take advantage of any increase in the tariff to increase their prices. Let us see how that will work out. They have the right, without violating any promise, to take full advantage of the situation. The figures I am going to give I am giving from memory, but I believe that they are substantially correct.
The minister told us that this tax would yield S5,500,000 at one per cent. It figures out at $16,500,000 at three per cent, and at not more than $20,000,000 at four per cent,
Special War Revenue Act
as the revenue expected by the minister. We produced in Canada last year some $2,947,000,000 of manufactured goods, of which we exported something like $475,000,000, leaving about $2,500,000,000, of Canadian produced manufactured goods to be consumed in this country. If our manufacturers under this arrangement have the right to increase their prices three or four per cent on all these goods it will give them the opportunity to collect from the people of this country something like $100,000,000 in addition to what the minister is collecting in revenue. I do not IhiDk that they will go to that extent, but I believe that they will go half that far and take $50,000,000 out of the pockets of the people of this country and put it into their own coffers, and my hon. friend gets $16,000,000 or $20,000,000. Is that good business, I ask, in view of the present financial situation in this country?


Edgar Nelson Rhodes: My answer would be that if the facts were anything approaching the imaginings of my hon. friend from Weyburn it would be very bad business, but I cannot subscribe to the accuracy of anything like the fantastic figures he has just given.


Edward James Young: The figures are not fantastic.


Edgar Nelson Rhodes: I cannot add to what I said before. I know of no instance where there has been an increase in price due to this tax.


Edward James Young: You have not heard of it yet.


Edgar Nelson Rhodes: I would be very much surprised if we did hear of such a thing.


Thomas Merritt Cayley: This is what you would call a depression tax to increase the revenue.


Edgar Nelson Rhodes: Purely a revenue tax.


Thomas Merritt Cayley: A hard times tax, and if hard times continue will the tax go up again next year?


Edgar Nelson Rhodes: My hon. friend knows that he cannot expect an answer to that question. We can hope that the times will improve and that it may be possible to reduce it. That is the more hopeful outlook.


Thomas Merritt Cayley: We will hope for the best.


George Gibson Coote: I think this is an aippropriate time for me to say that this is a bad tax. At a time when business is so badly depressed as it is at present, it is certainly a mistake to hamper it with these increased sales and excise taxes, and I would suggest to the minister that
Special War Revenue Act

before he brings in another budget he seriously consider getting his taxes where the money exists.


Some hon. MEMBERS:: Where is that?


George Gibson Coote: From the incomes of the millionaires of this country.


Mr. CASGRAIN:: There aren't any more.


Alfred Speakman: I understand, Mr. Chairman, that this is purely a revenue tax. While we do not call it a duty, it being levied on all imported goods, nevertheless it has all the features of a duty, and it is applied to the duty paid value of the goods. During the last two years .the revenue from customs has been steadily decreasing in spite of the increase in the rates of the tariff. That has been due, of course, partly to the decreased value of the goods, the decrease in their dollar value, and partly to general business .conditions throughout the world. There is no question that it is also due in part to the restricting effect of increased tariffs. This tax will of course, increase that restricting effect, and the question in my mind is, to what extent will this additional duty-for we may as well call it by its proper name-further restrict our trade and so reduce our revenue, or to what extent will it bear out the minister's anticipations of increased revenue? There is a point beyond which tariffs cease to be revenue .producing, and I am very much afraid that the tariff on many articles which are now paying a high rate of duty will, with this added duty, have reached that point, and will cease to realize anything like the revenue which the minister anticipates.
In reply to the leader of the opposition, who suggested that this tax might be removed from goods imported from Great Britain or elsewhere throughout the empire, the Minister of Finance replied that if we did this, it being a revenue producing tax, it would necessitate taxing our own people more heavily in order to make up the deficit, as we require a certain amount of revenue in any case. To what extent, again, does the minister believe that taxes of that kind are paid by anybody else than our own people? So far as I am concerned, and I am not a fanatic, I have never seen the time when an increased price upon goods imported and sold in this country, whether that increased price was brought about by the tariff or by a sales or excise tax, was not .paid by the purchasers of the goods, they being out own people. Therefore I cannot very well see what difference it makes to our own people whether we pay a tax upon goods we buy from Great Britain or whether we pay .it on some other articles. We 
pay it in any case. I am a good enough Canadian to hope that our revenues will be increased. I am not anxious to see revenues decrease; my hope would be to the contrary. I am just Scotch enough, however, to say that I hole me doots.


Charles A. Stewart: I should like to see my hon. friends carry out to the fullest extent their theory that tariffs will increase prosperity in Canada. Certainly they are giving it a real trial. To say that this three per cent tax is not a tariff does not appeal to my sense of reason. It is just as much a tariff as any other tax. When there is added to the already excessive tariffs on imports from foreign countries and from Great Britain another three per cent tax I think we are reaching the prohibitive stage.
My hon. friends seem to take comfort in the thought that prices have not been increased. But prices have not decreased to the extent they would have had it not been for the fact that through the imposition of tariffs manufacturers have been allowed to Charge undue prices. That, in a nutshell, is the situation. I make the prediction that so long as hon. members opposite continue their present course, just so long will the depression in .Canada continue. We are having a real trial of what tariffs can do for us, and the experience is a bitter one. My hon. friends may determine to pursue that course. All I have to say is that there will be splendid proof of what excessive tariffs can do to Canada. The experiment seems to be bearing out my contention.


John Thomas Hackett: How does that apply to Great Britain?


Ernest Lapointe: Wait and see.


Peter John Veniot: Does the dump apply in consequence of the depression of the pound sterling, and does the fixing of value for duty purposes apply to the three per cent excise tax?


Edgar Nelson Rhodes: It is on the duty paid value that the excise tax is imposed.


Peter John Veniot: On the duty paid value?


Edgar Nelson Rhodes: Yes. I should like to take a little longer, but I am afraid it is too late to-night. I must say however that my hon. friend from West Edmonton is not altogether correct in his assertion that the three per cent excise tax is an additional burden imposed upon goods already taxed. He may call it what he likes; I shall not quarrel with him. My hon. friend must realize however that there is a wide range of duty free goods upon which this tax applies.

Banking and Commerce


Edward James Young: The average rate on all goods is twenty per cent.


Thomas Merritt Cayley: Will the minister assure us that as soon as times are better and the revenue permits it, this tax will be removed?


Edgar Nelson Rhodes: My experience in public life has been too wide to make any definite commitments as to what will be done in the future with respect to taxation. I will say to my hon. friend, however, that nobody would be more delighted than I-and I am sure I can speak for my colleagues-when the time arrives that we can not only reduce taxation in this respect but in every other possible respect.


Ernest Lapointe: Carried.


[Stage Direction]
Paragraph agreed to.
Paragraphs 8 and 9 agreed to.
Resolution reported, read the second time and concurred in. Mr. Rhodes thereupon moved for leave to introduce Bill No. 102, to amend the Special War Revenue Act.
Motion agreed to and bill read the first time.
Edgar Nelson Rhodes: Is there any objection to giving the bill second reading to-night and letting it stand at that stage?


An hon. MEMBER:: Well-


Edgar Nelson Rhodes: All right; next sitting of the house.


Pierre Édouard Blondin: Mr. Rhodes moves,
seconded by Mr. Stevens, that said bill be now read a second time.


Edgar Nelson Rhodes: No.


Ernest Lapointe: Yes, read it now.


Edgar Nelson Rhodes: Very well.
Motion agreed to and bill read the second time.
On motion of Mr. Bennett the house adjourned at twelve o'clock midnight.
Tuesday, May 24, 1932