THE PRIME MINISTER

[Stage Direction]
CONGRATULATIONS ON ATTAINMENT OF HIS 73ld BIRTHDAY-HON. C. G. POWER: 30th ANNIVERSARY OF ELECTION TO PARLIAMENT
Mr. JOHN BRACKEN (Leader of the Opposition):: Mr. Speaker, according to the morning press, today is the anniversary of two very interesting events in Canadian history : one was the birthday in Canada seventy-three years ago of a child who later became Prime Minister of this country and is Prime Minister at the present time. Another was the entry into the House of Commons thirty years ago of a young man who has been here ever since and is with us still. I refer to the hon. member for Quebec South (Mr. Power).
On behalf of my associates and myself I wish to congratulate them both. This is one occasion when we can forget party differences and pay deserving tribute to two men who have given a large proportion of their lives to the service of their country.
I want to compliment the Prime Minister upon having reached another milestone in his career. Seventy-three years is three years over the allotted span given to man. I wish to compliment the Prime Minister upon looking so hale and- hearty in spite of his years, and we wish for him many more years to enjoy life as one of Canada's elder statesmen.
I want to compliment the hon. member for Quebec South as well. His has been a familiar figure here for more than three decades. I understand it is the longest continuous record without defeat of any living member of the House of Commons. During that period it was his privilege to have a most honoured record in two world wars. Whatever the future holds for the hon. member we shall always have pleasant memories of our association with him in this house. Whatever his future course may be 1 am sure he will take with him the best wishes of a host of friends not only inside this parliament but outside as well.
Right Hon. IAN A. MACKENZIE (Minister of Veterans Affairs): Mr. Speaker, on behalf of my colleagues on this side of the house, and I think on behalf of every single member of the house, I desire to express my
deepest gratitude to the hon. the leader of the opposition for his typically generous and well-deserved words.
Only a few months ago I had the honour, on another very significant occasion, of paying my personal tribute to my distinguished Prime Minister, and, on this great anniversary when he is seventy-three, we who are with him, around him and behind him to the limit-and I am speaking without the slightest political tinge-only hope that at eighty-three he will be in the same seat and still leader.
My friend said a very true thing. There are occasions on which we forget the acerbities and the asperities of political animosities and when we are able to rally together as Canadians honouring one who has honoured himself in the great service he has rendered to Canada. And so, sir, on behalf of this side of the house may I be privileged this afternoon to extend to you the hope for many, many continued years of great happiness, of great content and of great continued service to the country you love so well.
May I say a word to the hon. member for Quebec South (Mr. Power), one who is my best friend in the house. We were two of the greatest fellow sinners in the historic years between 1930 and 1935. I hope that for our sins during those historic years we shall be forgiven. But this at least I may say, sir. Although we exposed some terrible policies we established some faithful and enduring friendships. May I say humbly that the cause of democracy, the cause of freedom, the cause of those who have been wrongly called the common people, and whom I prefer to call the ordinary people, the simple, plain people of our country, have never had a finer champion in this Canadian confederation than the Hon. Charles Gavan Power, the member for Quebec South. May I at the same time, as his fellow sinner, extend to him very warmhearted felicitations.


An hon. MEMBER:: Chubby.


Mr. MACKENZIE:: Yes, Chubby, beloved by everyone in this house. May I extend to him the greetings of every single member of every part in this house, and express what I believe to be the common wish, that he may long continue to devote that splendid and brilliant brain of his to the service of
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his province, of the nation and of all the freedom-loving nations of the world.


Mr. M. J. OOLDWELL (Rosetown-Big-gar):: Mr. Speaker, after what has been said both by the Leader of the Opposition (Mr. Bracken) and by the right hon. the Minister of Veterans Affairs (Mr. Mackenzie) there is not much left for me to say on behalf of the party with which I am associated in this house.
I should like, first, to convey to the Prime Minister our very best wishes and our sincere greetings and to say to him that we trust he will be spared many years to enjoy the honours that have been bestowed upon him.
To the hon. member for Quebec South I vould say that we are delighted to have the opportunity today of congratulating him also.
[ have always felt that in the hon. member for Quebec South we had a colleague with broad, humanitarian sympathies, which sympathies he showed in the high office he held during the war, while he looked after the interests of many of our young men who served in the armed forces.
While my remarks may be brief, I assure the Prime Minister and the member for Quebec South that they are none the less sincere.
Mr. SOLON E. LOW (Peace River): It is always a good thing, it seems to me, that we have birthdays and anniversaries. In this instance it gives us a chance in this house to let the Prime Minister and the hon. member for Quebec South know that if in the smoke of battle we treat them with some severity, we are happy to have this opportunity of showing them uncommon kindness lest they think we are their enemies.
We have no enmity personally towards anyone, and we wish to let the world know that is true. I take this opportunity therefore, on behalf of the Social Credit group in this house, of expressing our sincere congratulations to the Prime Minister on reaching the age of seventy-three and at the same time of keeping his vitality so high. I believe I said on the occasion of his seventy-second birthday that it was a secret which I thought a good many, people in the country would like to find out, how he could reach such an age and still keep his vitality at that level. It is also a secret, the answer to which a good many people would like to discover, how it is that although the Prime Minister has attained such a ripe age the people continue to put him and his government back in power. For the last twenty years, as far back as I 
can remember anything political in my life, the people of the country were going to "throw Mackenzie King out".
Seriously, Mr. Speaker, I do wish for the Prime Minister the attainment of every single thing his heart desires except one, and I believe he can easily guess what that is. At the same time I wish to take this opportunity to extend to him our sincere wishes for a very happy Christmas season.
To our good friend the member for Quebec South, let me express our congratulations on his achievement as well. Thirty years of continuous public service is no mean achievement, Mr. Speaker, especially during the trying times that Canada has been witnessing in . recent years. We have the highest admiration for the splendid work the hon. member did during the last war. We feel that he achieved a standard of administration in the public service that will for many years be a challenge to anyone in this country who thinks of entering public life.
To both gentlemen we extend our heartiest congratulations.
(Translation):
Right Hon. L. S. ST. LAURENT (Secretary of State for External Affairs):	Mr. Speaker, it is quite obvious from what is going on in the house that this day marks a festive occasion for the province of Quebec. It would not be necessary, for all to be convinced of that fact, that anyone should add a few words in French in order to associate an overwhelming majority of the people of my prov-* ince who speak my own language to the tribute which is being paid to the leader of our party and to my excellent friend and fellow-member for a constituency of the city of Quebec. But I think that the record of this tribute would remain incomplete if it did not include a few w'ords in French.
Nearly thirty years ago, we placed our confidence in the Right Hon. William Lyon Mackenzie King on the occasion of the 1919 convention. We have had no reason to regret it ever since. From year to year we have become more and more convinced that he had no more real or keener wish than to associate all Canadians, whatever their origin, their language or their creed, in the privileges and responsibilities of Canadian citizenship. I believe that he has thus rendered an inestimable service not only to the people of my province, my creed and my race, but to Canada at large.
Of course, "Chubby" and I have been lifelong friends and one has reason to be proud of the tribute paid to him by all his colleagues in this house. No one has helped

Anniversaries-Mr. King and Mr. Power
more in the life work of our Right Hon. Prime Minister than the man who has for thirty years represented Quebec South in this house. It is a rare but most fortunate coincidence that we should be able, on a single occasion, to include in similar tributes, the Right Hon. the Prime Minister, William Lyon Mackenzie King, and the Hon. Charles Gavan Power.
I want to say in French that there is no one I know, speaking my own language, who is not desirous to associate himself in the wishes and tributes we are tendering to both these gentlemen.
(Text):


Mr. J. H. HARRIS (Danforth):: Mr. Speaker, as one of the younger members of this honourable assembly, perhaps for the first time in twenty-five years I may be privileged to pay tribute to one who has been serving Canada, the right hon. the Prime Minister (Mr. Mackenzie King), my courteous, kind and considerate friend for a quarter of a century. And may I be permitted to couple with his name, sir, that of my dear friend the hon. member for Quebec South (Mr. Power).
The British Order of Merit has been bestowed upon our Prime Minister; all honour to him in accepting it. We in this chamber will not forget that it is emblematic. Today we have the honour and privilege of paying respect to these two gentlemen, as emblematic of a united Canada and of everything worthwhile not only to our own country but to civilization itself.
The tact, judgment, kindness, and consideration of these two honourable gentlemen have been appreciated by all of us, whether they were on this side of the house or on that. I suppose it would be quite natural for me to say that we were happier when they were on this side. But wherever they are, we honour and respect them. We hope and pray to God that they may be privileged to serve this country for many years to come-on this side; and we in turn will do our level best to serve Canada on the side on which we belong.
Now that the Prime Minister and my dear friend the hon. member for Quebec South have reached the age when flowers are being presented, I do not think they would mind retiring to a position of ease and contentment. But even if they do, I say to the people of Canada that they will be well served by my right hon. friend and the hon:. member for Quebec South, representing as they do not only two elements in the country but a united Canada, a people with the same objectives in their hearts as to the welfare
of our native land and the welfare of civilization, in order that we in Canada may serve better the rest of our fellowmen in these most difficult times. I offer congratulations to the Prime Minister and to the hon. member for Quebec South.


Mr. JEAN FRANCOIS POULIOT (Temiseouata):: Mr. Speaker, I met Mr. King for the first time nearly a quarter of a century ago because I had defeated his own candidate by 3,500 votes. I must say that one of my constituents impersonated the hon. member for Quebec South, and told the die-hard Liberals that he was a personal messenger sent by Mr. King to advise them to vote against the government candidate. Mr. King had invited me to luncheon at Laurier House with Mr. Lapointe. It was the most successful of all peace conferences.
I shall never forget that occasion. It afforded me the privilege of becoming acquainted with the real Mr. King, whom Canadian and foreign historians and writers have so often and so wrongly described as somebody so like the Grand Lama of Tibet that even the Liberal caucus wondered at times if he was a mar-morean statue or a human being. They did not realize that he is the busiest man in Ottawa and that, owing to his high sense of public duty, he feels obliged to sacrifice his social life to his responsibilities as Prime Minister and leader of the Liberal party.
I wanted my electors to know Mr. King as well as I knew him. The first time he stopped at Riviere du Loup he was at the back of his car and was met by a handful of my friends. Years later, when he was leader of the opposition, I invited a few people to my house to shake hands with him. They came by hundreds. The third time 25,000 people had gathered at Riviere du Loup from all around on the occasion of the visit of the king and queen. Mr. King was there. Mr. King is so popular and so well liked because his natural gifts of kindness and cordiality always bloom out in a climate of mutual confidence and affection.
On another occasion, we were then in the cold region of opposition, and in Riviere du Loup it was at least fifteen below zero. Mr. King had been driving eighty miles at night from Edmundston to Riviere du Loup. We did our best to warm him up at home.
Another time the circumstances were not the same. It was the funeral of Mr. Lapointe in my church at Riviere du Loup. Mr. King was coming down the aisle with Mr. Cardin; we shook hands, and we did not say a word.
It has been repeated time and time again that Mr. King was subtle in a Machiavellian way, and that he could cut the throat of an

Anniversaries-Mr. King and Mr. Power
opponent by a very delicate gesture of his hand. But my own experience was altogether different. The ties of friendship between Mr. King and myself were strong enough to resist disagreement, contradiction and opposition; even displeasure did not break them. After having been an active supporter of his for twenty years, to my profound regret I crossed the floor of the house on the conscription issue.
At the following general election he was coming from the maritimes. I knew he was to pass through Riviere du Loup, and although I was temporarily on the other side of the tracks, I found the door of his car wide open for me. Without asking me anything, he gave good advice to the crowd that was there. He said, "Vote for my friend Jean Frangois Pouliot," and he was cheered to the echo.
Remembering my close association of so many years with Mr. King, and remembering also that my electors of Riviere du Loup have known him better than the bureaucrats of the pen who have depicted him as so aloof and so inaccessible, I must admit that I am very human and that he is also very much so; but I hasten to say that I would willingly trade fifty per cent of my humanity for fifty per cent of his industry. We all wish for the Prime Minister that his industry will continue to serve humanity. I wish him a happy birthday and a happy Christmas; and I wish the hon. member for Quebec South a pleasant anniversary and a merry Christmas.


Mr. KARL HOMUTH (Waterloo South):: Mr. Speaker, while this gives an ordinary membeir of the house an opportunity to wish everyone a merry Christmas and happy New Year, at the same time it gives us the opportunity to pay tribute to someone; and today I do that sincerely because I am paying a tribute to one who is a native son of my own county, of which I am also a native son. I dio not need to pay any tribute to the hon. member for Quebec South (Mr. Power), because we have known each other for many years, and indeed on some occasions I think we have been stuck with each other. So I need pay him no particular tribute because in every sense of the word we are pals. .
I rise on this occasion, Mr. Speaker, because I feel that as a representative from Waterloo county' I would be remiss in my duty if I did not pay my compliments to a native son. Ours is a peculiar county; it might be called a melting pot, because it is made up of people from almost all the countries of the world. Out of that melting pot has come a virile Canadian citizenship, a people loving Canada, loving the empire and all the freedoms for which it stands. So today w'hea I address

these remarks to the Prime Minister I do so realizing that during all the years we have fought each other politically we have always had a great love for our native county. When the right, hon. gentleman returned to Waterloo county just a few months ago the acclaim he received was not offered because he happened to be the leader of the Liberal party; it was because a native son of our county had achieved a great success. So, Mr. Prime Minister, let me say in all sincerity that I pay tribute to you today as a native son of Waterloo county who has achieved great success. We may differ in our policies; we may differ in certain principles we hold; we may differ politically; nevertheless it is a tribute to our county that one of its sons should have been chosen to lead the government of Canada for so many years. Today I stand here as one who is politically opposed to you, but as a member of this House of Commons who believes in the freedom we have enjoyed and tried to preserve in this country. I pay tribute to you, sir, for having done your duty as you saw it and for having ted this country through a most- difficult period. If it is possible to do so later I should like to shake your hand, and say, "Well done, Waterloo!"


Right Hon. W. L. MACKENZIE KING (Prime Minister):: Some years ago, Mr. Speaker, I was much impressed by a passage I read-I think it was by George Eliot-in which appeared the words:
Speech is but broken light upon the depth of the unspoken.
I was much impressed with the significance of those words at that time. But they have come to have a new and fuller meaning this afternoon, one for which I cannot be too grateful. and for which I cannot thank the members of this house too warmly. All that has been said by the leaders of the different groups opposite, by my colleagues on either side of me, by other fellow members from this and the opposite side of the house, has touched me more deeply than I can begin to express. I hope they will understand that, while I am deeply in their debt for the kindness of heart they have revealed, it is only because I feel as deeply as I do that I am unable in return to express to the house the debt I feel I owe to its members for these many evidences of their friendship and great good will. To one and all I am profoundly grateful for the congratulations and good wishes which have been so generously extended on my seventy-third birthday anniversary.
The wish has been very kindly expressed that I might continue in public life for a considerable, time longer. No one knows what the

Anniversaries-Mr. King and Mr. Power
future holds in store. As, however, I look at the beautiful basket of flowers immediately in front of me, and see that in number the roses represent seventy-three years, I realize only too well that, with the years, the number is rapidly becoming far too large.
I should like to take advantage of this moment, if hon. gentlemen opposite will allow me, to express my appreciation, particularly to hon. members on this side of the house who have presented me with this gift, together with the good wishes they have *expressed, accompanied by a scroll containing their names individually and including the entire membership of our party in the house. This parchment is something which I shall treasure deeply all my life, and which I hope, when I am gone, may find its place in the public archives of our country.
This is the seventy-third anniversary of my birthday. In many ways I could wish the figures might be reversed, and that it might be the thirty-seventh anniversary. Looking back over the shears, I would say that had I been able to glimpse at thirty-seven what I have lived to see since, or had I been able to surmise it, I wonder very much if I should have felt at that or any time that I could ever accept office and assume the responsibilities that have come with office in the years that have followed since.
Reference has been made to the county of Waterloo. I think it was just four years before that thirty-seventh anniversary that I had the honour of being elected the member for 'North Waterloo. It was a year later that I had the honour of being made a member of Sir Wilfrid Laurier's government as the first Minister of Labour. Little did I suspect, at that time, that a political career awaited me through the years, or that any career would begin to present the problems and responsibilities that have come with the years. I wonder if any of us, if we could see ahead for the next twenty or thirty years, would be able to pursue our tasks with equanimity of mind. Yet, speaking honestly, as the hon. member for Muskoka-Ontario (Mr. Macdon-nell) has questioned me for saying, looking back over the years I think I can say that, great as the anxieties and trials have been, at times, what there has been of so-called burdens of office over those strenuous years have been far outweighed by the rewards of public service. Of those many rewards, I can think of none greater than the one which has come to me this afternoon in this House of Commons. I am indeed grateful to all hon. members for that. How much all that has come to me of opportunity and reward is
owing to the sacrifices, privations and sufferings of others no one realizes more fully than myself.
May I say this further word. It relates more particularly to the future. I believe all hon. members of this house and of the parliaments which will succeed this one will have great responsibilities to bear. We have seen difficult times in the past; but I would not speak my heart honestly this afternoon if I did not say I believe we were going to witness very serious times in the years to come. I think every member of any free parliament must consecrate his life as never before to the furtherance of good will, to the utmost of his ability; and to a determination to battle evil forces as he never has battled them before.
I hope every individual member will, to the utmost of his power, wherever opportunity comes, do what he can both as between individuals and between nations to foster the utmost of good will; but, at the same time, be prepared as an individual, as we must be prepared as a nation, to use every instrument in our power to battle the forces of evil whenever and wherever they raise their heads.
I am sure we must all bend our energies in that direction; and, if we do, I have not the slightest doubt that, having played the part that the different nations of the British commonwealth with their allies have played in preserving liberty and freedom in this world, come what may, liberty and freedom will be preserved through future generations and in the same courageous way, if that is necessary.
In facing the unknown, there is only one sure path to follow. It is, from day to day, to the best of one's judgment and ability, to perform the duty which is closest at hand, sustained by the belief that, "As thy days, so shall thy strength be."
Little has given me more pleasure this afternoon than that there should have been associated with my name on this anniversary the name of another who has been a very close colleague through many years, and who is so greatly honoured and beloved by members of this House of Commons. I refer, of course, to the hon. member for Quebec South (Mr. Power). It is true that, in point of number of years of membership in the house, I still am a little in advance of him, a little over a year; his time may come but meanwhile I will not allow anyone else to assume the role of dean of this house, who cannot meet its requirements to the full.
Let me say, however, that thirty years of continuous and unbroken service as a member
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of this House of Commons is a record of which the oldest no less than the youngest member might be enviable. It is one all of us are proud the member for Quebec South has made. I extend to him both personally and on behalf of the party I represent-indeed, as hon. members appear to wish to have it, on behalf of the house-the heartiest congratulations and the warmest and best wishes for his future.
I should like with the permission of hon. members, to mention at this time one or two other hon. members who have been in the House of Commons for a long time, and whose association with its business through the years I have been here, it has been the privilege of my hon. friend from Quebec South and myself, to share. The hon. member for Danforth (Mr. Harris) has been kind enough to extend greetings in terms which touched me deeply. May I say he has been an associate of Mr. Power and myself for over twenty-six continuous years, and I extend to him the warmest congratulations and best wishes, on the record he also has made. I reciprocate toward him in fullest measure all the kindly feelings he has expressed towards myself.
There is one other hon. member who shares with the hon. member for Danforth the record of over twenty-six years of continuous service in the House of Commons. I refer to the hon. member for Haldimand (Mr. Senn) who, unfortunately, is not with us today. Through illness he has been prevented from taking his seat at this session. A day or two ago, when I learned of the serious nature of his illness, I took it upon myself to send him a telegram -not personally only, but on behalf of all members of the House of Commons-to express to him the solicitude we felt concerning his health, and how earnestly we hoped he might soon be restored to health and able to take his seat in the house again.
There are other hon. members who have been here for quite a long time. Somewhat hurriedly I have prepared a list of those who have been in the house for over twenty-one years. Among those who have been in the house for over twenty-one years are the hon. member for Temiscouata (Mr. Pouliot), the hon. member for Grenville-Dundas (Mr. Cas-selman), the hon. member for Beauharnois-Laprairie (Mr. Raymond), the hon. member for Dufferin-Simcoe (Mr. Rowe), the hon. member for Broadview (Mr. Church), the hon. member for Yukon (Mr. Black), the hon. member for Cochrane (Mr. Bradette), the hon. member for Digby-Annapolis-Kings (Mr. Ilsley)' and the hon. member for York East

(Mr. McGregor). There may be others, but I believe I have covered all of those who have been here for more than twenty-one years.
Then there are some, like my colleague the Minister of Veterans Affairs (Mr. Mackenzie), who have been associated with politics in legislatures as well as in parliament, and whose combined years of public service would extend over a very long period.
May I say to these old-timers, these old friends, how deeply I have appreciated the association we have had together through the years, and how warmly I wish for them all that is best in the future.
May I, in conclusion, thank all hon. members of the House of Commons for what their association has meant to me in the years I have been in this house-and it has never meant more than it has today. I hope each one will believe that from my heart I extend to him and to her, the very best of wishes for the future, all that one could wish for what is best in their lives.
With your permission, Mr. Speaker, I should like to add a word of thanks and also of good wishes to hon. members of the other house with whom through the years I have shared public life in this parliament; and also my thanks to members of the fourth estate, my friends and fellow members of the parliamentary press gallery whose friendship has also helped greatly to enrich my life, and for whose futures, I extend my best wishes.


Hon. C. G. POWTER (Quebec South):: Mr. Speaker, it is indeed a happy occasion, and perhaps for me a happy coincidence, that the birth of the Prime Minister of Canada and leader of the House of Commons should coincide with the thirtieth anniversary of my entry to this chamber. It has permitted hon. members who were kind, generous and courteous enough to pay the usual compliments to persons in my position, to couple my name with that of the Prime Minister.
They have been most kind. They have shown that in this House of Commons, even in the midst of an emergency session, one may take time out to deal with matters which ordinarily might be considered as indications of frivolity and perhaps a lack of interest in affairs of state, but which really might better be considered as indications of the spirit of good will in the House of Commons, the spirit of friendship, the spirit of comradeship and of chivalry which is characteristic of this Canadian nation of ours, and which is so well represented by the members of the house.
My right hon. friend the Prime Minister has made some reference to the competition which might exist between us for fatherhood of this house. Speaking for myself, when I

Anniversaries-Mr. King and Mr. Power
look at the brood of children which throngs the benches of this chamber I would say to the Prime Minister that I wish him well in his role of father to all those who sit about him. I also admit freely he has, through his kindness, his fatherly affection and guidance, all the qualities and qualifications of a father in a degree far superior to mine.
For many years the paths of the Prime Minister and myself have followed along parallel lines, although at all times they may have been on vastly different planes. Both of us have taken active parts in political life. For my part I have enjoyed the relationship which has existed between us. of an admiring and devoted1 follower to a respected chieftain. If at times our paths have diverged, there was in no respect a lowering of the honour in which I held him or a lessening of the gratitude which I have had for his kindness. So strong has that attachment been, and it still persists, that I rarely neglect him in my prayers. As one of the few of us who are still continuing Liberals, I pray that he will return to the faith of his forefathers.
You have probably often speculated, Mr. Speaker, as I have, when at the beginning of a session you hear addresses made with respect to those who are no longer here, as to just what will be said about you. If you want to resolve that speculation all you have to do is remain twenty-five years more in this house. You will then be a witness to a full-dress rehearsal. You will also have an advantage over those others in that if hon. members who are making the addresses or observations with respect to you forget to mention salient points which you believe to be important in connection with your career-after all, you know better than those who are speaking about you-you can rise on a question of privilege the next day and correct them.
I have spent half' of my life as a member of this house. It has been a good half life. It has been joyous; it has been one filled with comradeship and kindness. There are no moments of it which I regret. I say that with perfect sincerity. There are those who have the idea that politics is a mean kind of game, that it is filled with disappointments and delusions, but so far as I am aware, and *co far as I have been able to observe during ail these years, politics is filled also with loyalties, with decencies, with honesties, with comradeship, with evidence of the helping hand and the sympathetic spirit. I for one can say that it has been a wonderful life and a good one, and I do not regret it.
My right hon. friend the Prime Minister has often expressed the wish to write a book. That desire comes to almost all of us who have taken some part in public life. I too have thought that perhaps in my retirement I might solace my years and days with the writing of a book. It would not be concerned with the mazes of statecraft nor with the intricacies of international affairs. I should like to write a book about this Commons House of Canada. I perhaps would put it in the form of a homily, ashes to ashes and dust to dust, and I would entitle it "Back to Front and Back Again". I would tell of the long and painful progress down five rows of seats to the front benches, and I would tell also of the short and rapid and sudden transition from a private car to an upper berth. I would perhaps dedicate it to the over-ambitious youth who inhabit the back benches and also to the over-pretentious elderly ones who inhabit I he front benches. I might comment on the title page in ancient Greek, "Mati-otes, Matiotetoun Ta Panta, Matiotes"- "Vanity of vanities; all is vanity".
I cannot close these remarks without making some reference to the constituency of Quebec South which during all these years has shown such patience, tolerance and indulgence in sending me here to represent them, alien though I was in birth and language. That constituency has shown me a measure of confidence which is rare indeed in parliamentary history, and for which I shall be forever grateful.
(Translation):
Mr. Speaker, may I for a moment forgo parliamentary rules, in the strict sense of the term, to direct a few words to my friends and colleagues of the province of Quebec.
My friends, for years we have stood together in struggle and in triumph, we have been friends in good times and bad. In Canada, I stand as a living example of the tolerance and broad-mindedness characteristic of our fair province since, for thirty years, electors whose language and racial background are other than my own, have been so kind as to return me as their representative.


Some hon. MEMBERS:: Hear, hearl


Charles Gavan Power: May I thank my colleagues for their unfailing support and friendship. May I also ask you gentlemen to convey my thanks to those leaders and constituents of yours with whom, in the past, I often rejoiced over your victories.
3S2
Princess Elizabeth

(Text)-.



PRINCESS ELIZABETH


William Lyon Mackenzie King: Before I ask a page to carry this basket of flowers to my private office, I should like to inform the house that I received last night, in a communication from our High Commissioner at London, a letter which I should like to read, from Her Royal Highness Princess Elizabeth, thanking the government and the people of Canada for the wedding gift which was presented to her: Buckingham Palace
5tli December, 1947.
Dear Mr. Mackenzie King:
I am most grateful to the government and people of Canada for the wedding present of such remarkable generosity which they have sent me. They have given me a collection of silver so magnificent, both in quality and in quantity, that my pride in its possession is only equalled by my pleasure that the people of Canada should have seen fit to express their good will towards ine in this way.
Not content with this splendid present they have sent me in addition a mink coat of absolute perfection. Whenever I wear it, as I very often shall, it will remind me of the moving tributes and marks of affection which have reached me from all over Canada during these last few weeks and which have left a very deep impression on me. I look forward to the day when the Duke of Edinburgh and I will be able to visit Canada, to thank its citizens in person for their kindness towards us, and to learn to know the country and the people as we most earnestly desire to do.
Yours sincerely,
Elizabeth



GOLD MINING


[Stage Direction]
Right Hon. L. S. ST. LAURENT (for the Minister of Finance) moved that the house go into committee at the next sitting to consider the following resolution:
That it is expedient to introduce a measure to make provision for the making of emergency payments by the Minister of Mines and Resources to assist in meeting the increased cost of production of gold produced from gold mines during the three years commencing on December 1, 1947.
He said:	His Excellency the Governor
General, having been made acquainted with the subject matter of this resolution, recommends it to the consideration of the house.
John Bracken: May I ask if it is the intention to proceed with this measure before we proceed with the Agricultural Products Act, as intimated previously?

Mr. ST. LAURENT: No. I understand this is a formality which is required to advance it one step and get it on the orders of the day.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
John Bracken: I do not see the Minister of Finance in his place. I should like to ask him a question arising out of the general concern in Canada today respecting the hoarding of United States dollars. I have not given the minister notice of this question, and I do not expect an immediate answer. What I should like is this. When the minister comes to close the present debate he might deal with it. What amount of United States dollars has been reported to chartered banks in Canada arising out of the tourist business for the year 1947 to date? I am aware that we have official figures for past years, but I am not aware that there has been any announcement of the figures for this year. Perhaps someone on the other side will communicate that question to the minister so. that he may consider giving it an answer.


Mr. R. W. MAYHEW (Parliamentary Assistant to the Minister of Finance):: I have taken note of the question of the leader of the opposition, and will see that it is brought to the minister's attention.



INQUIRY AS TO NEW AGREEMENT WITH THE UNITED KINGDOM

[Stage Direction]
On the orders of the day:
Hon. W. EARL ROWE (Dufferin-Simcoe):: I should like to direct a question to the Minister of Agriculture. In view of this morning's rumour that a new deal has been made with the United Kingdom in reference to the food agreement, has the minister any report to make to the house today?


Right Hon. J. G. GARDINER (Minister of Agriculture):: Nothing to report today.



IRON AND STEEL


[Stage Direction]
On the orders of the day:
Major James William Coldwell: May I direct a question to the Minister of Reconstruction and Supply, of which I gave

____________ Foreign Exchange Conservation
him notice earlier today? In view of the statement of the Minister of Finance yesterday that our primary iron and steel imports are about five times the pre-war level, and in view of the seriousness of our long term exchange position, will the minister advise the house as to the action he is taking in order to stop the dismantling of the sheet mill at Sault Ste. Marie for shipment to the United States?


Right Hon. C. D. HOWE (Minister of Reconstruction and Supply):: The sheet mill at Sault Ste. Marie has not been in operation for approximately four years. It is an old and obsolete mill, and its operation was uneconomical and wasteful. The semi-finished steel which would have been used to feed this mill is now being shipped to the Steel Company of Canada and to the Dominion Foundries and Steel Company Limited at Hamilton for finishing into plates and sheets. The yield of these finished products from the modern equipment of the mills in Hamilton is much higher than could be produced in the Algoma sheet mill. We have not sufficient ingot steel capacity to support both operations; therefore no action has been taken or will be taken to stop the dismantling of the sheet mill at Sault Ste. Marie, which was privately owned and in which the government has no interest.



FOREIGN EXCHANGE CONSERVATION


[Stage Direction]
The house resumed from Tuesday, December 16, consideration of the motion of Mr. Abbott for the second reading of Bill No. 3, respecting emergency measures for the conservation of Canadian foreign exchange resources.
Clarence Decatur Howe: easier to reduce than to increase, and much quicker. Therefore we have a program for reducing expenditures in United States dollars. Hon. members in the opposition have referred to this as an austerity program.


An hon. MEMBER:: The minister did.


Mr. MacNICOL:: The Minister of Finance started it.


Clarence Decatur Howe: Well, I suggest it should not be called an austerity program. Should anyone wish to know what an austerity program is, if he would visit the United Kingdom at this time he would get a very good idea of what such a program can be. It means no private motoring, it means meagre and monotonous food rations, a minimum of clothing, a minimum of those purchases which add to the amenities of life.
Ours is a restrictive program for a temporary period of time. We are cutting off many imports, such as strawberries in February, to which we have become accustomed but with which we can very well do without. Certain items that assist in the amenities of housekeeping are either cut off or are made more expensive or in some cases are limited in quantity to Canadian production. Certain restrictions will be placed on the import of capital goods which will have the effect of cutting down types of construction that can just as well be postponed. But I hope that no one will believe that the government considers this a real austerity program. Having seen an austerity program in operation, I hope that such a program will not be necessary in Canada.
At the last sitting of the house we heard from the official opposition two solutions of the Canadian problem. One of them we can accept wholeheartedly while the other we must reject as wholly undesirable and incapable of making any contribution to our objective.
The member for Calgary West advocated increased production. That is the government program. He spoke of increased developments in his own province, particularly in the fields of oil and coal. I may tell hon. members that the government has that type of expansion very much in mind. The possibilities for increased oil production have been explored and I can tell hon. members that the objective for the Leduc field, which is Canada's new producer, is 250 producing wells by the end of 1948. Production on such a scale will be an important contribution to the correction of Canada's United States exchange balance.
As far as coal is concerned, the difficulty is man power to mine the coal. We have marketed every pound of coal which the Alberta field could produce for the past several years.

We should like to have additional production. Hon. members seem to feel that as in pre-war days coal mining in Alberta is limited by lack of markets. That is not the case and in my opinion it will not in future be the case. The amount of Alberta coal that can be mined will be the amount that the Alberta mines can produce.


Mr. TIMMINS:: With respect to the
Alberta mines, is it not a fact that if they were to produce the amount of coal we need in Canada they would be compelled to put in extensive new modem types of machinery which would greatly increase cost to the mines?


Clarence Decatur Howe: I can assure my hon. friends that the coal mines of Alberta are as well mechanized today as any other coal mines on the continent, and that coal mining in Alberta is conducted in as efficient a manner as coal mining in any other mines on the continent.
I should like to dwell now on the alternative suggestion. It seems to be one that could easily be carried out by a stroke of the pen and, if it could solve the difficulty, that would perhaps be the better approach. That is to devalue the currency. I will not refer to the theory of money as it relates to devaluing the currency. The Minister of Finance (Mr. Abbott) has dealt with that subject. I wish to refer to the by-products of that policy. As we all know, the devaluation of currency is a device which makes it possible for the owner of a business to sell his products in foreign markets for one kind of money and to pay his help and his costs of production with a less valuable kind of money. The theory is that such an arrangement will enable his firm to export to markets which otherwise would not be available. That objective is not important at the present time. There is no market in the world which Canada's prices will not permit Canada's goods to enter. However, that is usually the purpose of devaluing currency.
As far as the Canadian worker is concerned, he is paid in money less valuable than that received by his employer. Of course the effect of that is to write down his wages. And incidentally, at the same time as his wages are written down, his savings are written down because his savings are transferred from a money of one value into a less valuable money. In time the situation will be corrected, in that the worker will not be satisfied to accept the same number of dollars of less value. He will insist on getting a greater number of those dollars and by that means he may be put back in balance. Even so,

__________ Foreign Exchange Conservation
the loss in his savings will be a loss which cannot be corrected. Of course that does not end the situation. The hon. member for Muskoka-Ontario (Mr. Maedonnell) will offer a remedy for that. We will devalue again. If devaluation is good once, it will be good twice. So we start all over again changing the value of the Canadian dollar.


Mr. MACDONNELL (Muskoka-Ontario):: Would the minister permit a question?


Clarence Decatur Howe: Yes.


James MacKerras Macdonnell: Were these arguments the minister is using now not valid when devaluation took place in 1939?


Clarence Decatur Howe: Yes. I will answer that.
We used devaluation in 1939 as an instrument for fighting the war. We were the only country in the Americas to be at war, and there is a natural tendency for a flight of capital from a country at war to countries at peace. We devalued the dollar in 1940 as a means of meeting a situation that would have seriously impaired our ability to fight a war. But we say this. When the war was over we played square with the public by putting the value of the dollar back where we found it in 1940.


Mr. JACKMAN:: Are you not going to
play square now?


Clarence Decatur Howe: Well-


Harry Rutherford Jackman: What textbook is the
ninister quoting from?


Clarence Decatur Howe: It is one that my hon. friend aever read. It is the textbook of hard experience, the experience of men who earn their wages. My hon. friend has never met that kind of people. I would assume that if the devaluation of currency is good, it must have worked well in other countries. I wish someone would tell me of any countries that devalued their currency and are better off on that account. I can mention Germany before the war where the wages of the workers were subject to deflation, and where the property of the middle-class workers was swept away.


James MacKerras Macdonnell: What about the devaluation in England in 1931?


Clarence Decatur Howe: All right; I am coming to
that. You will not mind if I just linger a bit on the way. Let us consider the position of France. We have seen the middle class of France destroyed by devaluation of the currency. If you want a really extreme situation, take the situation in China where the
workingman has to take a wheelbarrow to work in order to wheel home his week's wages. That is devaluation in the extreme. When I was studying engineering more than forty years ago one of my professors had a theory that I think is still sound. He said, "If you want to test your thesis, apply to it the principle of reductio ad absurdum."


James MacKerras Macdonnell: You have done that.


Clarence Decatur Howe: I still think that is a sound principle. In other words, if some devaluation is good, more devaluation must be better.


James MacKerras Macdonnell: That is perfect nonsense.


Clarence Decatur Howe: I agree that the hon. member was talking nonsense yesterday, but perhaps I may be permitted to have my say today.


Harry Rutherford Jackman: Let us get down to facts.


Clarence Decatur Howe: My hon. friends opposite
claim that the principle of devaluation is sound. The question then becomes: how much should we devalue? My hon. friend mentioned ten per cent yesterday. In a nearby city there is a large school of thought which talks in terms of twenty per cent. I received representations from a delegation of mine operators who presented a written brief to the government advocating that an ounce of gold be valued at $52.50 Canadian, which is devaluation of thirty-three per cent. With so many schools of thought having opinions about devaluation, how can anyone expect that there will be a reasonable limit placed on devaluation should it be resorted to?


James MacKerras Macdonnell: I argued for you. You made it ninety and you made it stick. I applauded you for that.


Clarence Decatur Howe: We were being careful. [DOT]


Major James William Coldwell: That is control.


Clarence Decatur Howe: Reference has been made to, and some ridicule has been poked at, my optimism. I stated in a speech a while ago that I thought this campaign for balancing our United States dollar position could be made effective. I believe that we will win that objective, and I believe that if every man and every institution in this country will get behind it, it can be won within a reasonable time. I said I was basing my opinion on my experience, and my experience was that from the time the dollar crisis appeared in 1941, the situation had been corrected in about nine months' time.


James MacKerras Macdonnell: Under war conditions.
386
Foreign Exchange Conservation


Clarence Decatur Howe: Yes, under war conditions. I might mention conditions were more favourable then than now. Then we had an economy that was under control. We had a people that were 'behind the government and we had an opposition hoping that we would succeed. If you look back at the debates in parliament in those days, you will find no carping opposition to the efforts of the government to meet a situation which was similar to the one we are contending with now.


James MacKerras Macdonnell: We know you would like that now, too.


Clarence Decatur Howe: I said that our program for meeting the emergency was a program of increased production. Fortunately that program does not depend on legislation by parliament; it has been underway for some weeks. And, I may say, with some success. A few weeks ago I called up the president of a company which I knew had unused productive capacity in this country. I told him that we had a job to do and that we needed his contribution to the doing of that job. He called me this morning to say that he had succeeded in doing what I had asked him to do, that he had sold the production from his unused capacity, that the value of the contract was about $50 million, United States, and that he will be starting to expand his operations without delay.


Mr. COCKERAM :: Over how long a period?


Clarence Decatur Howe: I will just let it go at that.


Alan Cockeram: No.


Clarence Decatur Howe: If the hon. member wants to ask a question, let him stand up on his feet and ask it. What is the question?


Alan Cockeram: Over how long a period was this S50 million contract spread?


Clarence Decatur Howe: I said that he had sold the production of his unused capacity at a price of $50 million.


Alan Cockeram: I asked the question, over how long a period? The minister has made a statement. I think he should answer my question: over how long a period does that $50 million spread.


Clarence Decatur Howe: The answer would require some computation; but, failing that, I can say that the period is comparatively short.


Alan Cockeram: Twelve months?


Mr. DEPUTY SPEAKER:: Order. I may say that there have been too many interruptions by hon. members-


An hon. MEMBER:: Hear, hear.


Mr. GRAYDON:: The voice of experience over there.


William Ross Macdonald: -by hon. members while sitting in their seats. That is undoubtedly improper. If an hon. member wishes to ask a question and the minister agrees, it is permissible for the hon. member to do so; but I would ask hon. members not to remain, in their seats and interrupt.


Alan Cockeram: I rose in my place and asked a question, and I am still waiting for a reply.


Clarence Decatur Howe: Well, I am not going to reply.


Alan Cockeram: Because you can't.


Clarence Decatur Howe: For reasons which I shall develop, the schedule is not exhaustive; that is, it does not cover all the capital goods and related products the imports of which it may be desirable to regulate. It is not intended to restrict imports for normal repair, maintenance and servicing, with the exception of repair parts for automobiles, which will be dealt with by special quota arrangements. Since the only practical way for the customs department to administer the restrictions is to have a complete ban on specified tariff classifications of imports, subject only to exception by permit, repair parts have been excluded, except in the case of automobile repair parts as I mentioned, from the tariff items listed in schedule III.
The category of imports for which permits will be required is basically that going into new and expanded construction and equipment. These will have to be determined on a "project" basis. That is, the application for any specific import will require detailed information on the purpose. If the project as a whole is approved1 a project number will be assigned which will ensure that not only the particular import applied for, but all imports listed under schedule III necessary to the completion of the project will be permitted.
The project approach will not only simplify the administration, but avoid possible confusion or uncertainty facing business. Anyone planning to proceed with a project which will involve imports of any of the materials listed in schedule III must make application for approval of these imports on the basis of the project proposed. If the project is approved, all necessary imports under schedule III for it will be permitted.
On the other hand, as I mentioned, it was not necessary to make all conceivable imports for capital purposes subject to permit. By selecting a number of the key essentials, it was ensured that all projects of any significant magnitude would be brought to the department for review and approval.
It must be remembered in this connection that there are continuing domestic controls on steel and lumber. If permits are refused for a number of the essential key items, in the great majority of cases the project will have to be deferred and all the ancillary and minor imports of products not listed in schedule III which would have been made for it will automatically not be made.
While exactly the same procedure will be applied to imports from all countries, certain background facts must be taken into consideration. For example, during the war Canada was prevented from importing from the United

Kingdom as a result of the "essentiality program" of the United Kingdom itself. As a result, Canadian importers developed new sources and contacts, chiefly in the United States. This is a factor which must be taken into account in establishing regulations which will be equitable as between our two chief suppliers and customers.
The total value of imports from the United States of items listed in schedule III was $284 million in 1946, and on the basis of the first nine months of this year will be $445 million in 1947. Too much attention should not be paid to this figure, however, since on the one hand no estimate can be made of the proportion of this total which will be excluded because each case must be dealt with on it merits. On the other hand, as I have just explained, a large number of imports not listed will be automatically excluded by banning a few key materials essential to proceeding with a project.
A division to review applications and administer the issue of permits has been established in the department of which I am minister, under Mr. John Berry, who has been seconded from his position as president of War Assets Corporation. It is now actively functioning, and I need scarcely emphasize that all would-be importers of items listed in schedule III should be prepared to put before that division the details of their respective projects. Advisory industry committees are being set up-fof example, in steel and machine tools-following the practice of the war years. I put great stress on the importance of these committees: in this case our problem is their problem, and we intend to put the issue squarely before them. I am confident that, with the co-operation and understanding of business leaders, labour leaders, farmers, and consumers, we can, in Canada, weather any storm.
I must also mention a group of items included in schedule III scarcely less important than the key capital goods listed, but in a different category. This group includes automobiles and parts for the production of automobiles, and parts for the production-although not for the repair and servicing-of the durable consumer goods banned under schedule I. These include such products as washing machines, typewriters and domestic sewing machines. In other words, it is not proposed to permit the unlimited importation of parts for assembly in Canada of articles which are prohibited in their finished form, since this would clearly defeat the purpose of the ban as a measure for the conservation of United States dollars. A regulated volume of imports of such production parts for assembly in Canada will be allowed under permit, but only after the importer has satisfied the department

Foreign Exchange Conservation
that he is making every reasonable and practical effort to conserve United States exchange. In the case of automobiles and automobile production parts, which form the largest commodity in our adverse United States dollar balance of payments, arrangements will be worked out with the industry which, we hope, will achieve a substantial saving in exchange on a basis that will be equitable as between the different interests represented and which will accelerate the sound development of the industry in Canada.
While I have described the general administrative procedure to be followed, hon. members will naturally be interested in the principles which will guide this procedure. I should like to repeat that the guiding principle must be the conservation of United States dollars. Clear appreciation of this will avoid much misunderstanding. In other words, while our policy is, of necessity, restric-tionist in the sense of restricting our expenditures to our means, the approach is not protectionist. By "conservation of United States dollars" we mean a much more positive policy than simply replacing imports of finished goods from the United States with imports of parts for assembly in Canada. This alternative would also involve a heavy drain of United States dollars, and there are in this class a number of items of which Canadians must for a while get along with less. Our immediate necessity, and the objective which will have top priority in administration, is the expansion of sales in United States dollars. To this end the government intends to give energetic and effective encouragement to the development of our natural resources of mines, forests and fields which will find a market in the United States, and to the expansion of manufacturing industries that will be able to compete in the United States.
This is far from an uneconomic program, or one that must depend on protectionist restrictions. It is simply speeding up the established and natural development of the Canadian economy. I am interested to hear from hon. members opposite that we are "planning for recession", or for "a hunger program". Our wartime industrial experience showed that, with an adequate volume of production, Canadian unit costs and production performance compared favourable with the United States or with any other country in the world. It is our intention to provide for that adequate volume of production in every field in which it will be economically justifiable. We feel sure that the United States will accept the view that it is preferable to receive more Canadian goods which their consumers want than to lose much of their biggest market.
It is fortunate indeed that the Geneva agreement precedes our exchange difficulties. That agreement has greatly improved our potential for the long-run constructive correction of our chronic adverse balance with the United States. In my remarks to the house on the Geneva agreement last week I gave a number of examples of the spectacular development of our industry in the last eight years, and of the new opportunities which the agreement opens to us. At the same time I must say I know that the correction of our chronic United States dollar deficit will not be simple, and will not be accomplished without real effort.
In conclusion, I should like to emphasize that, dependent as we have been and are on many world conditions over which we have no control, Canada's policy to meet our present exchange problem will not be a defeatist and negative one. Some consumers, and some merchants, will be adversely affected in the short run. But we are going, aggressively, boldly and imaginatively, to develop Canadian resources and industry, and to find markets for those resources and industries which will provide us with additional United States dollars. Only by such action can we maintain, and stabilize, the highest standard of living which Canadians have yet achieved. And it is only in this way that we can maintain full employment, fair wages and a high level of income in Canada.
To sum up: 1. The basic solution of our dollar problem will be found in increased production.
2.	Short-term help will be sought by asking Canadians to consume less in order that Canada may export more.
3.	New production will be stimulated, particularly that production which is based on Canada's specialized resources.
4.	Present restrictionist policies are not intended to be protectionist. New industries based on such short-term policies will be discouraged. We will encourage new industries that have a place in Canada's normal competitive economy.
5.	Canada's basic materials, such as steel, must be used to best advantage. While low-cost housing and manufacturing capacity will be given high priority, construction projects that do not contribute to increased production will be discouraged.
6.	We will proceed with confidence in the belief that Canada can accomplish her national objective of safeguarding our national financial independence.
7.	This is every man's task and every Canadian will be expected to do his part.
Foreign Exchange Conservation


John Bracken: Would the minister
permit one observation before he closes his remarks? At the beginning of his speech a statement was made which was rather critical of us because of our use of the term "austerity." I should like to call the minister's attention to the second to the last paragraph in the address made by the Minister of Finance (Mr. Abbott) on November 17, in which he discussed this whole program and used these words:
So we have to make adjustments to bring our national living standard within the limits of what we can afford in the difficult conditions that surround us. For most of us, this moderate measure of austerity will mean inconvenience and for some it will create difficulty. iBut a problem of this magnitude cannot be solved painlessly.
I draw that to the attention of the minister and point out that that is where the term first originated. If it was used elsewhere it was taken from that source.


Clarence Decatur Howe: I am sure that my hon. friend will agree that a moderate measure of austerity is hardly equivalent to an austerity program. I quite agree that the word crept in there; but, since the Minister of Finance had just returned from England where he saw what I believe to be a real austerity program in operation, I do not think he should be accused of calling this an austerity program.


John Bracken: I was simply pointing out that it was the minister's colleague who used the expression first.


Mr. ROSS (St. Paul's):: Neither the minister nor the Minister of Finance has cleared up one point. I should like to know how many United States dollars it is expected this program will save in a few months, which is the length of time the minister is reported to have said it will take.


Clarence Decatur Howe: I thought we went into that last evening. I said, "In a matter of months"; my hon. friend says, "a few months," and the leader of the opposition said, "six months." I stated that this drain could be stopped in a matter of months if we made doing so the national objective of all the people of Canada.


Douglas Gooderham Ross: I want to know how many dollars it is expected this program will save.


Clarence Decatur Howe: I would not know that.


Douglas Gooderham Ross: Then it is just a pig in a poke.


Mr. ADAMSON:: Could the minister give is the names of his controllers? I know a
	j |
steel control has been set up, but I think business would like to know if other controls have been set up.


Clarence Decatur Howe: Mr. Uren is the steel controller and Mr. Rochester is the timber controller. After that, we run out of controllers.


Mr. HAZEN:: Can the items in schedule III be imported without permit up to February 1, 1948?


Clarence Decatur Howe: Yes.
Mr. DONALD M. FLEMING (Eglinton): Mr. Speaker, we have just heard from the Minister of Reconstruction and Supply (Mr. Howe) an apologetic speech in support of the request of the government that he be vested with powers greater than any which have been vested in any person in Canada at any time in our history in peacetime, and perhaps in wartime also. The only person who gets anything out of this bill except austerity is the Minister of Reconstruction who is to get vast powers. Having lately come from the field of housing, fresh from the government's colossal failure there, the minister is now seeking to extend his rule and is inviting the house to assign to him new worlds to conquer. Perhaps it would not be amiss if I asked the minister, as I ask all others on the treasury benches who are similarly minded: upon what meat doth this our Caesar feed that he has grown so great? Apparently it is not on vegetables coming from the United States. We look upon the minister as the man who is to become under this legislation, if the house adopts it, the Canadian Cripps, the czar of Canada's economy.
It seemed to me that the principal reason given today by the minister in an effort to justify this extraordinary request for these amazing powers was that there would otherwise be a danger of inflation. I want to tell the minister and all members of the government that we have inflation today. It is past the incipient stage and the government's policy is responsible for it. I have here a statement from one of Canada's leading economists, Mr. Courtland Elliott. This gentleman commands the high regard of business. During the war he held a position with the government, functioning under the excess profits tax legislation. Speaking of the United States dollar scarcity in Canada, he said on November 11:
Conscious monetary and fiscal policy has increased our money supply in the hands of the public (from $2,876 million in 1939 to $7,476 million in 1947. Money burns holes in pockets and that means buying, and partly in the United States.

Foreign Exchange Conservation
The facts are crystal clear. The government is responsible for the situation we have today and for the great problem we face. It has been fiddling these many months while Rome burned. First, the problem has been open and obvious; it has not been a hidden problem.
Second, the problem did not develop overnight; it has been developing steadily and with increasing momentum.
Third, the problem began with the restoration to parity in the middle of 1946. The minister and the Minister of Finance (Mr. Abbott) invite this house to bury its intelligence and believe that was a pure matter of coincidence. No one will be fooled in that way. The beginning of the problem was in the middle of 1946.
Fourth, abundant warnings have been given to the government. Warnings were given last session in this chamber. I well remember the warnings of the hon. member for York West (Mr. Adamson), the hon. member for York South (Mr. Coekeram), and others. If the government wishes evidence of a more recent warning I would refer them to August 21 when the government of the United Kingdom suspended the free convertibility of sterling.
Fifth, this delay has meant a steady flight of dollars and decreased gold production. It has created a situation where the gold industry is literally fighting for its life. Eventually it was made the occasion for more drastic measures. Had action been taken long ago, other measures would have sufficed to cure this situation without a resort to this drastic program which the government has now announced.
Sixth, this government deliberately withheld information from parliament and from the Canadian people, information that should have been made available. I well remember, Mr. Speaker, in the standing committee on banking and commerce in the early part of the session in 1946, when we were considering the foreign exchange control bill, how we tried to get some information out of the government concerning the supply of United States dollars; and when the government took the step of restoring the dollar to parity with the United States dollar in the middle of 1946 how we tried to get some information; but we were deliberately and emphatically refused that information. In the intervening period the government has consistently hidden the facts. Apparently it was not prepared to trust parliament with the information.
Seventh, the remedy proposed by the government today is, stripped of all pretence,
dictatorship-nothing short of it. This is not the first time in history that an economic crisis or an economic problem has been made the occasion of a demand for dictatorial powers by someone, and it does not impress me in the least to hear the Minister of Reconstruction and Supply (Mr. Howe) say in the house today, in defence of this request for these tremendous powers, "Oh, well, trust me." Every dictator-and we have had experience in the world these two past decades-has said that very thing when he asked for the first of the dictatorial powers with which he eventually was clothed.
Eighth, the measures that have been taken in keeping with this dictatorial remedy that has been proposed bear all evidences of having been conceived over-night. They are half-baked; they have been put together in haste. There is no excuse for that. The government have had ample warning of the situation. All these months they have known that measures would have to be taken. Surely they might at least have had a well prepared program to put forward. But what do we see? Here is the order in. council that was passed on the 12th day of.November and announced to the public in the last hour of the 17th day of November, P.C. 4678. And what happens? No sooner is the order in council made public than the necessity for amendments and changes immediately becomes apparent. On November 26 we have P.C. 4858 with the first batch of amendments. On December 8 the next one, P.C. 5017, and again the same day an announcement by the Minister of Finance of changes in the excise tax proposals; on December 1.1 a complete revision of the proposals with respect to the gold subsidy, and then another one w'hich has not been made public, but which in many respects reveals moie eloquently than do these other changes the colossal blunders that have been made.
Among the prohibitions contained in the government's announcement of November 17 was one applicable to the importation of western pine from the United States. This has been for a generation the principal source of material for sash and doors, and to some extent millwork, for the three prairie provinces and also the province of Ontario. Ninety per cent of the pine used by us for this purpose has come from the states of Washington, Oregon and1 northern California. That was shut out by this bureaucratic blunder of November 17. A knowledge of a little recent history would surely have taught the bureaucrats sitting on the government benches and elsewhere that during the war this staple necessity was so important that it was per-
Foreign Exchange Conservation

mitted to come in free. It was placed on the list of essential goods, and even the ten per cent import duty was taken off it during the wTar. But along came the bureaucrats with their blunders on November 17 and they shut it out. That situation persisted for some days. Now the government have changed it but they have not made any public announcement concerning the change.
The problem that we have before us today in all its critical proportions is a problem for which this government is responsible, and it will not be good enough for the Minister of Reconstruction and Supply today to put up a straw man in the form of inflation and knock him down to try to frighten the house with respect to inflation.
What wa9 put forward yesterday by the financial critic of the official opposition, my colleague the hon. member for Muskoka-Ontario (Mr. Macdonnell), was a proposal that we go back to the position where we were doing very well prior to the middle of 1946, the position in which stability had been achieved. There was not any suggestion about inflation, and I repeat that we have inflation today. This is a fine time now for the Minister of Reconstruction and Supply to be holding forth on the dangers of inflation, when he and his colleagues in the government are responsible for the inflation that exists in Canada today.
I do not need to remind the house that the government's announcements are full of contradictions. They appeared in the statements of the Minister of Finance and the Minister of Reconstruction and Supply over the air and in the house; but I refer also to certain fundamental contradictions in government policy which have shown up so clearly in this situation. Time does not permit me to mention more than a fetw. They call for more freedom, but at the same time what they have been doing has been leading steadily to more and more restrictions. Second, they have been preaching stimulation of imports. They are those who preach that it is more blessed to import than to export; but what do we see today? Measures so drastic applied against imports into Canada that they have no parallel in our history.
Again they boast about the market far our wheat that they have obtained in the United States, and at the same time they tell farmers in this country that they will not be permitted to ship their wheat to that market. Then they boast about the way in which they have opened up the American market for Canadian beef cattle, and at the same time they continue to apply the embargo against the ship-

ment of beef cattle. These are fundamental contradictions in what the government have been doing before our very eyes; and last but by no means least, after they have been foisting on the Canadian people such a surfeit of talk and propaganda on the subject of our national prosperity, what do they bring us to now? Austerity, the tightening of our people's belts right across Canada by measures that will affect every man, woman and child in the country. Accompanying it all is again the usual contempt for parliament and parliamentary processes.
The reason for calling this session, as was announced by the Prime Minister (Mr. Mackenzie King) on the 30th day of October, was the necessity for ratification of the Geneva trade agreements. Well, we have seen just how much there was in that pretext. There was nothing in it. And the Prime Minister on that occasion, as hon. members will see in the press reports, was asked by some representative of the fourth estate, "What about Canada's dollar crisis?" The Prime Minister was evasive on the subject, but when we got here the government claimed that parliament was called to discuss the dollar crisis. Apparently the reason for calling parliament underwent a transformation between October 30 and December 5. What do we see? In an act of condescension, the government that has shut off debate on one occasion in this house already, permits two days of discussion on this far-reaching measure, a gracious act of condescension. What does it all lead to? It leads to an adjournment tonight of the debate on this measure and we shall come back to it perhaps in February or March of next year. This is a sample of the urgency of the measures that prompted the government to call an emergency session of parliament, and the poppycock that has been offered to the house as to the reason why parliament was not called much earlier than this to deal with the dollar crisis and to deal effectively with it. The reason given is that it would not have been prudent for parliament to be in session while the negotiations were proceeding at Geneva. There are only two interpretations to be put upon that: one was that there were things that were not good for the representatives of other nations to know about us at Geneva; in other words, our negotiators were not telling them the whole story; and second, a distrust of parliament. These are the only two interpretations it is possible to put upon that statement.
Here we are today with this whole austerity program a fait accompli. You have it in effect today full and complete, and the government is apparently not in the least

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worried if this debate is adjourned for a couple of months 'because it has its program in effect right now.
I have not the time to discuss order P.C. 4678 in detail now, but I point out in passing that it cuts across all existing contractual obligations even in cases where goods were paid for, even where they were moved into storage with a view t'o eventual movement to this country, and where no question of exchange was involved. In spite of that, the order cuts right across these obligations with the result that loss is entailed to Canadians even where no United States exchange was involved.
This order, P.C. 4678, is justified by the government under the terms of the Foreign Exchange Control Act of 1946. Let me remind you, Mr. Speaker, of what was said on this subject bv the then minister of finance when he was piloting the measure in t'he house. He said, at page 2547 of Hansard of 1946:
We have no intention of using this exchange control legislation to restrict anything but certain types of capital movement.
Yet, Mr. Speaker, we have the government today undertaking to justify P.C. 4678 on the strength of the Foreign Exchange Control Act of 1946. We have the government committing a complete, outright and deliberate breach of faith with parliament. What has happened is that parliament has been deceived as to the intention of the government with respect to this legislation. An opinion of the law officers of the crown has been referred to. I have the greatest respect for the law officers of the crown. I wish to make it clear that I would not be so bold or presumptuous as to set any opinion of mine against theirs; but it would be, I think, in a situation of this kind, extremely interesting for the house to see what that opinion is. In fairness to the house, the government ought to make public that opinion; it ought to bring it down in this house. We should know what the opinion of the law officers of the crown is upon which the government purport to justify this legislation.
If this legislation is valid, there was no occasion to bring the bill here; there was no occasion to bring parliament together to discuss this measure, and therefore the bill we are discussing is entirely unnecessary. I should like to know, in connection with that opinion, for instance, how it reconciles what has been done with subsection 2 of section 26 of the Foreign Exchange Control Act. In the preamble to P.C. 4678, one of the sections referred to as justifying or enabling the passing of that order in council is this section 26, 5849-26
which says in effect that no one shall import any goods into Canada except under a permit. Subsection 2 of section 26 has this to say:
The board shall not withhold a permit for the import of goods into Canada in any ease where the payment made or to be made therefor to a non-resident does not exceed the fair value thereof, and was made or is to be made in a currency designated by regulation as payable in connection with such a transaction.
If for no other reason than legitimate curiosity, one would like to know what that opinion of the law officers says about that section. One would like to know what the opinion says about that portion of the preamble to the Foreign Exchange Control Act which says "it is desirable to ensure that such reserves in foreign currency are used to promote and facilitate trade." They are being used under this measure today, under P.C. 4678, to restrict trade.
If this order in council is valid, why are we taking time to discuss Bill No. 3? Why, will you tell me, Mr. Speaker, have we in section 14 of the bill a provision which has the effect of making valid what has been done under the terms of P.C. 4678? There you have a provision which says in effect that P.C. 4678 is validated, with everything that has been done under it. Everything done under it is presumed to be valid and is confirmed by this legislation.
If the law officers of the crown had given the opinion which has been referred to, and if it justifies P.C. 4678, then we are being asked to legislate something that is quite unnecessary. In section 14 we are asked to do something that is completely unnecessary and therefore we are being asked to fan the air.
The Minister of Reconstruction today asked us not to think, with reference to the powers under this bill, in terms of dictatorship. It was a soothing kind of speech we heard from the minister today. I choose-I believe with much more realism and with a truer regard for the terms of the bill and of the order in council, P.C. 4678-to say that parliament is being asked to abdicate. That is what is involved in the bill. We might as well fold up as hand over to one minister powers of the breadth and scope contained in this Bill No. 3 and in P.C. 4678. It is not so many years ago that this chamber rang with the indignant protests and denunciations of the right hon. gentleman whose seventy-third birthday we have observed today. Back in 1934, dealing with a relatively simple and innocuous measure introduced by the government of that day,
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the right hon. gentleman fulminated in these words at ipage 2336 of Hansard of that year:
When the government believes it is in the interests of its own policies it may pass any order it pleases with regard to the trade of Canada, regardless of the legislation parliament itself has enacted or may enact.
Do hon. members (of the Commons) realize that this bill gives to the governor in council the power to prohibit absolutely the importation of goods from another country which the government may allege it is in the public interest to prohibit?
Those are the words the present Prime Minister uttered in 1934 on a bill which does not begin to compare even faintly with the bill that is before us today, in the scope of the powers that parliament is asked to confer in favour of one member of the government. Under this bill and under P.C. 4678, it is not one whit of exaggeration to say that the Minister of Reconstruction holds the Canadian economy in the hollow of his hand.
In these three schedules of the bill there is a list of commodities of tremendous proportions. There is no freedom left to business to decide what it is to purchase and what it is not to purchase. Apparently no thought was given to saying to any particular business, "We are going to restrict the amount of currency you can expend in the United States. We will see that certain things shall not be bought, but within the scope of the kind of things we show in the quota list, we will not interfere with your right of choice so long as you do not exceed the quota of currency to be made available to you". There is no thought given to that, and apparently it did not appeal to the government because the bill is designed to vest dictatorial powers in the hands of one man.
Gone are objective standards in the application of law to the citizens of the country, regardless of their walk of life or of their station. What the government has substituted is eventually the decision of one man. It is all in the minister's discretion, whatever is done under the act. The minister may be just as impartial, just as good as he today says he is. He may be all that; but there is no human being alive who, clothed with powers like these, will ever be able, human weakness being what it is, to divest himself completely of caprice and whim and favouritism and partisanship. It cannot be done. A great deal depends on the mood of the man at the time. I can well imagine coming before the minister for a permit on some occasions when his temper is good, when it might be easier to deal with him than on some other occasions when his temper is not so good, as we have seen in the house. For instance, I hope I am never in the posi-

tion of coming before the minister and asking him for the exercise of his discretion when he is in one of those moods where he is riding high and handsomely over the House of Commons.
Let us look at the terms of the bill itself. One does not need to go outside the terms of the bill itself to find the clear handwriting of those who believe that power should be absolute in the hands of the minister. In the debate on second reading I know it is not permissible to refer to the details of the bill, but I point out that power is given to the minister to suspend the operation of the act with regard to any person or class of goods. In other words, power is given to the minister to nullify the act completely if he chooses to do so. Not only that; but power is given to the minister, under another provision of this act, to move goods from one schedule to another. If he wishes, he can say, if it suits him, that goods included in schedule I shall be deemed to be included in schedules II and III.
Then let us remember this, Mr. Speaker. The fixing of the quotas with respect to those commodities enumerated in schedules II and III is vested in the minister and he is given complete and uncontrolled discretion with respect to them. Under P.C. 4678 the quotas are fixed. But under this bill there is no limitation on the power of the minister to fix the quotas. The minister can fix and unfix the quotas to his heart's content without ever going to anybody and seeking the power to do so. He has the power to do that. He can manhandle these quotas to his heart's content. Not only that, but what about the scheduled and non-scheduled countries? There is not a word in Bill No. 3 about scheduled and non-scheduled countries. P.C. 4678 divides the countries of the world into scheduled and non-scheduled countries. We have among the scheduled countries this enumeration: Cuba, the Dominican Republic, Guatemala, Haiti, Panama, El Salvador, Switzerland, the Union of Soviet. Socialist Republics, the United States of America and its possessions, and Venezuela. All other countries are deemed to be non-scheduled countries.
But what do we find under this bill? The minister can apply these import restrictions as he chooses without regard to the definition that exists today under P.C. 4678 with respect to scheduled and non-scheduled countries. If he wishes he can apply these restrictions to the hilt against our sister nations in the British commonwealth. There is no restriction in this bill with respect to scheduled and non-scheduled countries. In those respects, there is far less democracy in this bill than there was even under that dictatorial order in council P.C. 4678.

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Then to cap all this, there is the provision in this bill that the burden of proof, with regard to anyone who is accused of violating the provisions of this act, is on the person charged with the violation. That is a fine sample of democracy, Mackenzie King government style, 1947.
Then the government has sought to beguile us with these choice promises as to the temporary nature of the measure; but the Minister of Finance gave it all away yesterday when he began on this note, that the scarcity of United States dollars in Canada is a permanent problem. The Minister of Reconstruction and Supply, in his radio address, also talked about a long-term program to deal with a long-term problem, and also a short-term approach to the same problem. Yes, the problem is permanent. You will find, Mr. Speaker, that there is no time limit in this bill. There was a time limit imposed in the Foreign Exchange Control Act. But there is not any time limit in this bill. The Minister of Reconstruction and Supply, in one of those suave, debonair, offhand statements' of his, says, in effect, "Well, when I say a matter of months, I really mean years." He said that yesterday, that a matter of months does not mean something under a year, it means more than a year; that means years. By this curious process of sophistry in which the minister excelled today, yesterday and on November 20, he has somehow persuaded himself and asked the house to believe that a month is a year, that one-twelfth equals one-it sounds very much like his reports on housing-and apparently he has persuaded himself that the lesser includes the greater, as a mathematical proposition. Apparently somebody has been talking to the minister since he made that radio address on November 20. Apparently somebody has drawn to his attention the fact that it was a silly statement he made when he said this problem could be cleared up in a matter of months.
Having regard to the blunder of the Minister of Reconstruction and Supply and a similar blunder of the Minister of Finance who denied in the house last week that he had ever used the word "austerity" and then on the next day had to read an extract from his own radio speech of November 17 in which that very word appears, I suggest that these two ministers are eligible for a leading place on a feature program of a Canadian radio station. The name of the program is, " Did I say that?"
They said this would be a temporary measure. The Geneva agreements, which they are nullifying by this measure, will last only three years. Will anybody guarantee that this measure will not nullify the Geneva trade agreements for their full three-year life?
5849-26i
While we are on the matter of months, may I say that today marks the end of one month since the great radio speech of the Prime Minister and the Minister of Finance on November 17, and look at what has happened in the matter of one month.
One of the features of this legislation which ought to provoke the strongest opposition in this house is that, although our problem is purely and simply a scarcity of United States dollars, these restrictions are not limited in their effect to imports from the United States. They apply to imports from other countries as well, including many countries with which we have a favourable trade balance, to which we are selling much more than we buy and from which we should be encouraging imports today, in order to help them on the road to recovery.
At page 222 of Hansard, Mr. Speaker, you will recall that my esteemed leader drew the attention of the Minister of Finance to a considerable list of items which the government of the United Kingdom had indicated that that nation was in a position to supply in the export market during this year. As will be found at page 222, the Minister of Finance said:
May I say that the embargoes contained in the bill now before the house do not materially affect exports from the United Kingdom.
That statement made by the Minister of Finance cannot be reconciled with the facts. An analysis has been made-I do not take personal credit for it-of eighty-six items in that list which was referred to by the leader of the opposition; and of the eighty-six, what do we find? Thirty-nine of them are now banned from entering Canada; thirteen are restricted by quotas, and twenty-one are subject to the twenty-five per cent excise tax.


Mr. CLAXTON:: I should like to ask the hon. member a question, if I may.


Mr. FLEMING:: Yes?


Brooke Claxton: How much trade is
affected by the thirty-nine, thirteen, and twenty-one items to which he has referred?


Donald Methuen Fleming: I have not all those figures. I suggest that it would be a useful occupation for the minister who has just asked me that question himself to look up that information.


Brooke Claxton: If the hon. member wishes to draw any conclusions from the figures, I suggest that he bring the figures before the house.
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Donald Methuen Fleming: 
Mr. ALISTAIR STEWART (Winnipeg North):: Mr. Speaker, I find it impossible to dissociate the present economic crisis from the war. For five or six years we used all our resources of every type to smash Europe, politically, socially and materially. It will take us a good deal more than five years to rebuild the damage we have done, because Europe must be rebuilt for our own sakes, lor there lie some of our very best markets. And so the cost of reconstruction, I maintain, is part of the cost of war.
However, there is another cost, an intangible cost, the cost in ideas-cherished ideas which perhaps will have to go overboard because they are at variance now with the facts of the situation.
I hope the government has paid that price, because the problems which confront us today cannot be met with habits of mind which could not cope with the trade depression. It has been said by many speakers that the crisis has been coming for some time and that everybody knew it. Two years ago in the annual report of the foreign exchange control board, it was forecast to some extent. I will grant that perhaps the situation has not been aided by restoration to parity of our dollar.
When the announcement about parity was made in the house I accepted it, as I still do; and I do not want to get into any argument about it. But I would say this, that so far as devaluation is concerned, it will hurt everybody in Canada. The government has taken another alternative in selecting certain items which will be prohibited or else put on a quota. I doubt very much, however, if the
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group of nations has agreed to take discriminatory action against all if it has taken it against one-then if it is compelled to take action against one, all the others must suffer. The effect of the non-discriminatory clause is to restrict trade. Contrary to what the minister thinks, we do not increase world trade; rather we restrict it.
Apparently this non-discrimination clause is in operation due to what the Minister of Finance called an American fetish. Has the government of Canada abdicated in favour of American fetishes? Personally I object to that type of American domination. The leader of this party, the hon. member for Rosetown-Biggar (Mr. Coldwell), has told us that trade between Canada and the United States is competitive. He has urged upon the house that our export trade should lie with what the Minister of Reconstruction calls our historic markets, the United Kingdom and Europe. Instead, the government is going ahead with efforts to integrate our industries with United States industries.
What exactly does that mean? Does that mean that we are to make parts for United States manufactured goods? Does it mean the rationalization of industry in the sense that we make articles of a certain type for this continent while the United States makes others? Does it mean that we in Canada are to become hewers of wood and drawers of water for United States industrialists by sending them our natural resources, while they fabricate them and send them back to us in the form of manufactured articles? Does it mean the merging of ourselves with the United States economy so that we become an economic colony? If it means any or all of these things, it means putting ourselves in a position where we will suffer from every blunder in United States policy. It means that we will suffer from any booms or depressions which they may have in their economy.
It has been suggested that perhaps Canada will be the Belgium of the new world, but I do not think that is the case. It looks as though we are the Czechoslovakia of North America; we are to become the prisoners of dollar imperialism. Fifty years ago there were Americans who were afraid that humanity would be crucified on a cross of gold. IV e need not be afraid of that now because we are finally hooked on the talons of the double eagle. In effect what the government has done is to abrogate Canadian sovereignty.
I am not going to traverse the ground already covered by members of our group. They have stated our case on the excise fax

and on monopolies. However, I should like to direct the attention of the government to the situation with regard to prices in this country. A measure such as this will increase prices to the working people and farmers of Canada. If such a plan is carried out it will have serious social consequences to this country. It is something we have to guard against.
I maintain that the effect of this bill unaccompanied by controls will be to make scarcity more abundant, to deny to those who lack the money the ability to buy goods which are available only to the wealthy, and to make certain that discrimination against our own people which the government professes to find so offensive when directed against the United States. Therefore I move, seconded by the hon. member for Dauphin (Mr. Zaplitny):
That all the words after the word "that" be struck out and the following substituted therefor:
"this bill be not now read a second time but that it be resolved that in the opinion of this house price ceilings should be imposed immediately on all goods or products of any class or kind the importation of which is prevented or limited by embargoes or restrictions."
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Mr. SPEAKER:: Before the house rose at six o'clock, the hon, member for Winnipeg North (Mr. Stewart) moved, as an amendment to the bill before the house:
That all the words after the word "that" be struck out and the following substituted therefor:
"this bill be not now read a second time but that it be resolved that in the opinion of this house price ceilings should be imposed immediately on all goods or products of any class or kind the importation of which is prevented or limited by embargoes or restrictions."
I am not ready to give a ruling on the amendment, but I should like to call the attention of the hon. member for Winnipeg North to the fact that his motion says:
. . . that in the opinion of this house price ceilings should be imposed immediately on all goods or products of any class or kind the importation of which is prevented or limited by embargoes or restrictions.
I should like to ask him if he means the embargoes or restrictions which are mentioned in the bill which is before the house.


Alistair McLeod Stewart: That is my intention, Mr. Speaker.

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Robert Wellington Mayhew: Mr. Speaker, although I realize that the time for this debate is short, yet I am urged to participate in it because from the time the Prime Minister (Mr. Mackenzie King) made his announcement on November 17 last on the Geneva trade agreements and the Minister of Finance (Mr. Abbott) immediately afterwards made public this country's emergency program to correct our trade balances, I felt keenly that nothing could be more important to the people of this nation than that we realize 'the advantages as well as the difficulties contained in both the long-term and short-term programs.
There is nio doubt in my mind that the agreements reached at Geneva constitute the most advanced plan of removal of international trade barriers that any group of nations have been able to agree upon to date. The accomplishment of this agreement reflects great credit on the Canadian representation at that meeting, as it also reflects great credit on those from other nations. Nothing as far-seeing could have been possible except from the minds and brains of mein with broad vision and the knowledge that in this course lay the hope of a peaceful world.
I also feel most keenly that it is essential for us to keep these two programs, one domestic, the other international, in proper perspective. We must guard against the temptation to look upon the immediate as the more important and, because of that attitude, forget that the restrictive part of the one may, in our particular case, 'be but a stepping-stone to great opportunities inherent in the other.
However, important as was the statement of the Prime Minister, and grateful as we were to hear his voice on that occasion, the statement of the Minister of Finance brought such a complete realization of Canada's United States dollar position that it was only natural that the scope of the Canadian program should receive the greater consideration, and that the plan should become today's outstanding problem.
For years we Canadians have been buying more than we were selling in the United States. At the same time we have been selling more than we were buying from Europe and the rest of the world, but we were able to balance our United States dollars by the use of the moneys that we received from Europe and the rest of the world.
At the end of the war came also the end of the lend-lease program, the end of the Hyde Park agreement, which I am afraid most Canadian people have not yet realized the full benefits of. It also brought to us the necessity
of aid to Europe and constantly higher loans. It also brought a complete new condition for Canadians. What Canadians found previously difficult to understand they now understand completely. They understand that foreign exchange is not a matter for bankers, but it is a matter for the individual Canadian, and we are all concerned in it. Had we made no loan to Europe in 1946, and had Europe been able to get United States dollars for their purchases we would now have an increased rather than an almost exhausted trade balance. Of course we had no obligation, other than a moral one, to make a loan, but to make a loan was human, honourable and in our own interest the best thing to do.
But let us assume just for a moment that we had refused to face up to these changed world conditions. What would we now be doing? There would be no so-called austerity program. Canadian pleasure travel to the United States would be unrestricted. We could buy our luxuries, new motorcars, washing machines, radios, refrigerators. Canada would not need to work at the menial task of growing its own cabbage, lettuce, tomatoes, early potatoes and, in fact, some late ones as well. We would be having a perfectly enjoyable and lovely time, but unfortunately our happy time would sooner or later have to come to an end. It would have ended abruptly when our resources had been depleted, had we no longer had the power to make ourselves self-supporting. Here, let me say, I do not refer only to our dollar balance in the United States; I refer also to the natural resources of this country, which we would have been depleting, exporting to foreign countries in order to get the exchange to pay for goods bought in the United States. Fortunately for us, the Minister of Finance had the courage to place the complete picture, without hesitation, before the people of Canada. Any less strong pronouncement of these facts would not have brought us to a full realization of our position.
Let us not regard this entire development as an insurmountable hurdle, but as a situation in which our real ability and ingenuity shall be brought into play in facing up to the changing circumstances. It is fortunate for us that it has happened at a time when our neighbours will in many cases, I am sure, welcome the Canadian move to look after our own needs, to take some of the strain off their own short supply of material as well as food. Save for some interested groups who have been shipping to us, the move will not be misunderstood.
As the result of our unbalanced trade with the United States, Canada is like a person who is quickly using up all savings to make current
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purchases. When those savings have run out, then what? That specifically is the major and immediate economic challenge which we shall be called upon to meet and solve. The question is in the minds of all serious thinking Canadians who feel, and I think rightly, that all things should be done to keep this country from even verging on a condition which in the minds of other people, particularly in the United States, would place us in the category of a dependent nation. No one in Canada, and I doubt whether many in the United States, would want to feel that Canada was a United States problem.
The short-term section of our program, with its import restrictions, its gold bonus, the United States loan, the limitations on pleasure travel, is, in my opinion, a stop-gap action to achieve immediate results. The method through which we shall finally meet our problem brings up the real challenge to Canadian ingenuity and resourcefulness. I should like to divide it into two main activities-production and salesmanship, or production and merchandising if you prefer it.
I feel that Canadians are not really good merchandisers, and that the Canadian people have not a great deal of resistance ability against the merchandising abilities of some other people. This course involves comprehensive, long-term planning, and it also involves a real consciousness on the part of Canadian industry and business, that its position and its methods must come under careful, self-imposed scrutiny if it is to expand or even to retain the present domestic market, or if it is to compete successfully with merchandising and production methods adopted by competitive countries.
In discussing this question, I should like to emphasize that there is not the slightest intention of implying that we can live without trade with other countries, including the United States. I wish to emphasize, however, that trade must be two-way in every sense of the word, and our present position is far from that. Last year Canada bought seventy-five per cent of its imports from the United States, but sold back to the United States only thirty-nine per cent of its exports.
When we look critically at the total score of our indebtedness to the United States for the purchase of goods for Canadian consumption we can readily see that it is made up of many thousands of items covering a wide range of categories; in fact, almost every major industrial field as well as a great many agricultural products.
As an example, and only as an example, listed among these many items are such things

as lettuce, corn, tomatoes, spinach, celery and many dozens of similar items, both fresh and canned or otherwise processed. Their total costs run into millions of dollars, and that expenditure is actually for those commodities which I feel, with some planning, could be supplied almost entirely from domestic production.
It seems staggering to find that during the first seven months of 1947 Canada's bill for the importation of cabbage alone was only slightly short of 81,000,000. Surely something could be done right here in Canada to improve a situation of that kind. These few things I have mentioned are but a small fraction of the total imports of that kind and do not include any of the imports which, either because of climate or because of other factors, this country could not hope to produce successfully, such as a number of citrus and tropical fruits.
But even in those fields where we have rather indolently accepted the idea that the only place in which to 'buy is the United States, I am thoroughly convinced that tremendous improvements can be made if we waken up to the possibilities of doing something for ourselves. It is up to us to do a better job of salesmanship and to encourage originality in design, and it is up to us to throw overboard our own demands for quick and exorbitant profits.
The effectiveness of the selling campaign which made California "Sunkist" oranges almost a byword, both in the United States and in Canadian homes, is generally recognized, and a knowledge of its effects on the California orange industry is common property. But if we in Canada used that knowledge in taking a similar course of action with some of our own products, such as, for example, fortified apple juice, especially graded potatoes and many other things, we could achieve similar results. I have mentioned potatoes several times because I remember that during the war and before the war we could go and buy Utah potatoes on this market. They were specially graded and temptingly put up, and a lady could go and buy one potato, take it to her apartment, bake it and have supper for two. We have just as good potatoes in the east, in the west and in the middle west, but we did not have the foresight or the courage to go about dealing with them in the same way. That is what I am trying to emphasize. It is a matter of production, but it is equally a matter of good salesmanship practice.


Mr. FRASER:: Page your agriculture
department.

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Robert Wellington Mayhew: I have used that simply to illustrate a situation which I think is quite typical of our whole production and merchandising program. 1 have mentioned some food items which are part of our billion dollar bill. But the food1 bill is not by any means the one in which we add up the greatest number of dollars on the red side of the ledger. Take a look at the really big field which accounts for more than a third of our drain of United States dollars, iron and its products. Listed among the thousands of items are such things as pipe fittings, for which we paid almost $1,000,000 in the first seven months of this year. In the same period, wire for the manufacture of wire rope cost us about one and a quarter million dollars. Automobile engines sent the bill up another four and a half million dollars. .Plows and plow parts account for more than two million dollars. Logging machinery used in one of Canada's most permanent industries added another three million dollars. As in the categories previously mentioned, these are just a few examples making up the list which includes everything from tank cars to fingernail files; and the last item, incidentally,, accounted for almost $20,000 in the first seven months of this year. We paid $300,000 for fishing rods imported from the United States. Surely one cannot call that an austerity program, when we are asked to produce our own fingernail files and1 our own fishing rods rather than having to buy them from some place else.
In the field of wood and paper products we find another long list of items which, it seems to me, could be produced in this country without too much trouble and with satisfactory profits to the makers. Just one or two examples occurred to me on looking over the list of imports. I find that we spent during the first seven months of this year about a quarter of a million dollars for railway ties, which were referred to last night by the hon. member for Calgary West (Mr. Smith). We spent another $150,000 for telegraph poles and piling and a further $200,000 for cedar lumber. But I could go on almost indefinitely giving examples such as those I have already mentioned. While it may appear that the individual amounts are not great, in the aggregate they add up to that billion dollar six-months bill which was met by less than half out of current earnings by this country of United States dollars, the remainder from savings.
It seems to me almost unbelievable that we in Canada are unable to meet such things as style requirements or other quality requisites, particularly when we know that Canadian manufacturers have already gained an enviable reputation in many countries as a result of the fine job they have done in turning out excellent quality in many lines. We have too readily adopted ready-made quality and style standards. It may be the easy way; but it is, in my opinion, unimaginative and lacking initiative to such an extent that it stifles any creative ability which might find truly Canadian expression in fashion or quality of Canadian-made goods.
The same sort of attitude has developed with respect to our buying habits. It is quite conceivable, in my. opinion, that thousands of materials could be purchased by Canadian industry from sources other than in United States, probably at no greater cost and with the added advantage of making contacts where Canadian goods could be marketed. But because it is just a bit less trouble to get on the telephone and call New York, or some other United States city, we have failed to expand1 our activities in that connection to the extent which we could have done. I think there is some excuse for Canadians falling into that habit. It is three thousand miles from one coast to the other; but it is only three or four, maybe twenty miles across to a large city to the south of us where we can get what we want over-night. Surely we are not in such a hurry for most of these things that we in the west could not afford to call up Toronto and Montreal, not forgetting that there is Vancouver and Victoria as well.


Mr. REID:: And New Westminster.


Mr. BLANCHETTE:: They will never forget that.


Robert Wellington Mayhew: Let us really put "can" in Canada and keep it there.
In my opinion, the responsibility for taking action along this line rests squarely upon the shoulders of the main divisions of our industrial and financial structures, just as long as we retain the idea that the free enterprise system can do an effective job. That freedom also involves a responsibility, and that responsibility includes much more than mere selfish interest which, through its failure to recognize the national interest, becomes in time a threat to the welfare of individuals and industries alike. Governments in a more or less free economy can be a very real help to private business in providing a kind of clearing house for ideas and in paving the way through legislative action or to some extent through research. But, I repeat, the final responsibility rests with the industries themselves.
Personally, I am in favour of retaining a small section of the wartime prices and trade
Foreign Exchange Conservation

board to give some leadership in aotion to improve some of our production methods. A number of the staff of the board gained, during the war, some valuable experience in that field; and I feel they would be extremely useful as a permanent co-ordinating body. Then in the merchandising field, I feel quite strongly that some section of the Department of Trade and Commerce should be in a position to give sound advice to industry and business and should carry out continuous research in selling programs.
I have given these few suggestions to show the nature of the problem that we in Canada must come to grips with.' I want to emphasize the fact that there is a short-term and longterm viewpoint we must achieve. I want, most of all, to point out the necessity, certainly not the impossibility, of finding the answer to this problem.
I have mentioned a number of items, using them as examples to show some of the possibilities open to us in helping to get ourselves out of some of the immediate difficulties as far as United States dollars are concerned. The items I have mentioned are those which we have been importing, but our list of imported goods is not by any means the most important. There are thousands of other manufactures which could be developed in this country that would add to our sales to the United States. I think Canadians have been far too much inclined to look upon a log as a finished product rather than as a raw material which we ourselves could puit through all the various processes required to make it acceptable consumer goods for sale both on the domestic market and for export. Here again I spoke only of a log for the purpose of illustrating what I mean. All our raw material is in the same position.
The extent to which we change our attitude and practice in this regard will decide, in the long ran, the extent to which we may, as soon as possible, return to more normal trade with our southern neighbour and the extent to which we may import the thousands of articles which, because of climatic or other reasons, are more efficiently or profitably produced in the United States.
A full program of development in Canada, industrially and agriculturally, must mean, if it is to be a success, an immigration policy based on careful selection, with the need of maintaining a virile, healthy Canada. An expanding population of virile people on this part of the continent cannot be anything but to the general advantage of the United States, as we shall still be dependent upon them for the things we are unable to produce. The difference in climate makes it possible for us

to have an integrated, complementary trade with the United States, in many respects, without affecting our commonwealth relations.
At the present time we hold an important place in international affairs. Our present commitments are, I think, about our limit. The world thinks of us as a people who believe in fair play. Our history justifies this thought. The best assurance that we can play our part in the international scene is for us to develop our own country and keep it vigorous and strong, economically and socially. Industrial Canada does not mean, as I see it, a few great industries in a few large cities. It means an industrial people working with intelligence and diligence to develop those things which nature has so bountifully bestowed upon us.


James Horace King: The Minister of Finance (Mr. Abbott) has moved the second reading of Bill No. 3, respecting emergency measures for the conservation of Canadian foreign exchange resources. Section 3 of this bill deals with the import of certain classes of goods listed in schedules I, II and III; the list is long and comprehensive. The hon. member for Winnipeg North (Mr. Stewart) moves in amendment that the bill be not now read a second time but that it be resolved that in the opinion of this house price ceilings should be imposed immediately on all goods or products of any class or kind the importation of which is prevented or limited by embargoes or restrictions. At eight o'clock I asked the mover of the amendment if by "embargo" or "restriction" he meant those provided in Bill No. 3. He said he did. That being so, there is no other course for me to follow than to declare, as I did yesterday, that the amendment-


Major James William Coldwell: Before you give your ruling may I say just a word?


James Horace King: Order. I am giving my decision; I should not be interrupted.


Major James William Coldwell: But I thought-


James Horace King: Order.


Major James William Coldwell: In that case I shall have to take some other action.


Ian Alistair Mackenzie: You may take whatever action you wish.


James Horace King: I propose to rule, as I did yesterday, that the amendment concerns something that may be done when the bill is in committee. There is nothing to prevent the hon. member from moving an amendment to section 3 of the bill to provide that price ceilings shall be established prior to the imposition of embargoes. For this reason I believe that the amendment is out of order.

Foreign Exchange Conservation
I have another reason for coming to this decision. The hon. member for Rosetown-Biggar (Mr. Coldwell) moved as an amendment to the address, which is still under consideration, the following:
This house regrets that Your Excellency's advisers have failed to use the powers provided by parliament to control prices, and by their actions have caused alarming increases in the cost of living and a dangerous lowering of the living standards of the Canadian people.
As the hon. member knows, there cannot be two debates on price control. The amendment before the house at the moment is actually anticipating debate on the amendment along the same lines which has been presented by the hon. member for Rosetown-Biggar. For these two reasons I have no hesitation in saying the amendment is out of order.


Major James William Coldwell: I am sorry, Mr. Speaker, I should have liked to discuss the validity of the amendment before you gave your ruling. Unfortunately the ruling has been given; I must say I disagree with it, and therefore I shall have to appeal from it.


James Horace King: Before that is done, I should like to call attention to another point which I believe is very important and which covers both the amendment of yesterday and the amendment of today. The bill at present before the house, which the hon. member for Winnipeg North seeks to amend, is entitled "An act respecting emergency measures for the conservation of Canadian foreign exchange resources." If hon. members will look at May, page 395, under the heading "Amendments to be relevant", they will see:
The fundamental rule that debate must be relevant to a question necessarily involves the rule that every amendment must be relevant to the question on which the amendment is proposed.
The question actually before the house is the principle of Bill No. 3, which is entitled "An act respecting emergency measures for the conservation of Canadian foreign exchange resources." Hon. members will see that section 1 of the bill provides:
This act may be cited as the Emergency Exchange Conservation Act.
They will see further:
Interpretation
2.	In this act "permit" means a permit issued under this act.
A little further on they will see:
3.	No person shall import or attempt to import into Canada any goods listed or of the classes described in schedules I, II and III-
In a word, this bill is to permit the administration of this country to decide which goods may be imported into Canada in order to save United States dollars, as has been stated so often in this house. I understand

and this is why I put the question to the hon. member-that under this bill the administration has power to decide which necessities or goods may be imported. When the bill is passed and becomes the law of the country, the hon. member suggests that when these goods are imported into Canada the administration should immediately impose price ceilings on all goods or products of any class or kind the importation of which is prevented or limited by embargoes or restrictions. That is why I say that the amendment of the hon. member is not relevant to the principle of the bill, which is an act respecting emergency measures for the conservation of Canadian foreign exchange resources. I should think that the amendment of the hon. member may be introduced in committee, as it covers regulations which could be imposed on goods which are imported into Canada.


Major James William Coldwell: May I say a word? First of all, may I refer to the last point-


James Horace King: I did not understand what the hon. member said. I am sorry, but I cannot permit debate on my ruling. I have already given my ruling, and have taken considerable trouble to explain it. If it is not satisfactory to the hon. member, it is his privilege to appeal.


Major James William Coldwell: I am in such complete disagreement that I must appeal this ruling.


James Horace King: Those in favour of sustaining the Speaker's ruling will say yea.


Some hon. MEMBERS:: Yea.


James Horace King: Those against will say nay.


Some hon. MEMBERS:: Nay.


James Horace King: In my opinion the "yeas" have it. Call in the members.
Mr. Speaker put the question as follows:
The question before the house is a motion by the Minister of Finance who moved:
That Bill No. 3, respecting emergency measures for the conservation of Canadian foreign exchange resources, be now read the second time.
The hon. member for Winnipeg North (Mr. Stewart) moved:
That all the words after the word "that" be struck out and the following substituted therefor:
"this bill be not now read a second time but that it be resolved that in the opinion of this

Foreign Exchange Conservation
house price ceilings should he imposed immediately on all goods or products of any class or kind the importation of which is prevented or limited by embargoes or restrictions."
Section 3 of the bill prohibits the import of certain classes of goods listed in schedules I, II and III. The list of goods is long and comprehensive. The hon. member for Winnipeg North moved the amendment which I have just read. After the hon. member had moved that amendment I asked him if the embargoes or restrictions mentioned in his amendment referred to the prohibitions in Bill No. 3 and he said they did.
There was no other course for me to follow than the procedure which I followed yesterday when an amendment in nearly the same terms was moved, an amendment which proposed to do something which could be done in committee of the whole. There is nothing to prevent the hon. member from moving an amendment to section 3 of the bill that price ceilings be established prior to the imposition of an- embargo. Following that decision, I think the amendment is out of order. Moreover, the hon. member for Rosetown-Biggar (Mr. Coldwell) moved an amendment to the address in reply to the speech from the throne which is still under consideration. His amendment was as follows:
This house regrets that Your Excellency's advisers have failed to use the powers provided by parliament to control prices, and by their actions have caused alarming increases in the cost of living and a dangerous lowering of the living standards of the Canadian people.
There cannot be two debates on price control. The amendment moved by the hon. member for Winnipeg North anticipates the continuation of the debate on the amendment to the address. For these two reasons I declare that amendment out of order. I would direct the attention of hon. members to a well known rule to be found at page 395 of the 14th edition of May. It is entitled, "Rules with respect to form and content of amendments," and it reads:
The fundamental rule that debate must be relevant to a question necessarily involves the rule that every amendment must be relevant to the question on which the amendment is proposed. [DOT]
The matter before the house is an act respecting emergency measures for the conservation of Canadian foreign exchange resources. I called the attention of the hon. member to the fact that his amendment was not relevant to the title of the bill before the house, that it was rather a question of administration. I suggested that his amendment could be proposed during the committee

stage. I having declared the amendment to be out of order the hon. member appealed from my decision.


Mr. HERRIDGE:: Owing to the illness of the hon. member for Riehelieu-Vercheres (Mr. Cournoyer) I did not vote. Had I voted, I would have voted against your ruling, Mr. Speaker.


Mr. J. G. DIEFENBAKER (Lake Centre):: Mr. Speaker, on this day of bouquets, possibly it would not be amiss, as far as this bill is concerned, if an austerity bouquet were offered at this time. Having listened to the address, not only of the Minister of Finance (Mr. Abbott), but also of the Minister of Reconstruction and Supply (Mr. Howe), in which each endeavoured to justify the necessity of the bill before the house, I intend to vote against it.
Over a very considerable period of time I have believed that this government is following 'the road of dictatorship in this country, and it is of interest to know that in a book which has been referred to on a number of occasions in this house, namely the monumental work by Hayek "The Road to Serfdom", there is a reference to what takes place in a nation where there is foreign exchange control. Let me quote from the footnote at page 92, wherein there is set out the situation with reference to foreign exchange control and what it leads to:
The extent of the control over all life that economic control confers is nowhere better illustrated than in the field of foreign exchanges. Nothing would at first seem to affect private life less than a state control of the dealings in foreign exchange, and most people will regard its introduction with complete indifference. Yet the experience of most continental countries has taught thoughtful people to regard this step as the decisive advance on the path to totalitarianism and the suppression of individual liberty. It is, in fact, the complete delivery of the individual to the tyranny of the state, the final suppression of all means of escape-not merely for the rich but for everybody. Once the individual is no longer free to travel, no longer free to buy foreign books or journals, once all the means of foreign contact can be restricted to those of whom official opinion approves or for whom it is regarded as necessary, the effective control of opinion is much greater than that ever exercised by any of the absolutist governments of the seventeenth and eighteenth centuries.
In the explanation by the minister as to what he intended to do when he secured these powers under the bill, he stated, in effect, that "its guiding principle will be the restriction of the use of United States dollars."
The hon. member for Eglinton (Mr. Fleming), in a powerful indictment of the government, bore out what Hayek says in this book, namely, that control over exchange is, in fact, the road to totalitarianism and dictatorship. What is the position of the minister to be? He makes no excuses for the power he is going to exercise, a power the like of which, as the hon. member for Eglinton said today, has never before been asked for anywhere by any government in any democracy at any time. Imagine what it means to freedom in this country when, in the hands of the Minister of Reconstruction, without any appeal, the right will rest to command, to countermand, to browbeat and to intimidate, if he will, every businessman in Canada!	,
You say he will not use the power? He will be placed in possession of powers that permit him to deny those who are politically unfit the right to continue in business. I have read the speeches of the present Minister of Justice (Mr. Ilsley) in 1934. On one occasion he used the expression "outrageous". I say- and I am trying to restrain my language- that no more outrageous application has ever been made to parliament to abdicate its powers to one man than the government asks
Marshall
Martin
Matthews (Brandon)
Maybank
May hew
Menary
Merritt
Michaud
Miller
Mullins
Murphy
Mutch
Nixon
Pearkes
Pinard
Raymond (Wright) Reid
Richard (Gloucester) Rinfret
Robinson (Bruce) Robinson (Simcoe East)

Foreign Exchange Conservation
parliament to do. It places industry in the position where it may be pushed around and bullied by a minister of the crown, while the individual who is interfered with has no right of appeal; and if the law is to be enforced, it means that individuals will be inspected and suspected. Moreover, in order to be enforcible it will require the efficiency of a police state.
Under this legislation, parliament is asked to place a minister of the crown in possession of sweeping powers, a minister who is presumed to be a servant of the people. It transforms him into the people's master; and if parliament passes this legislation in its present form, parliament will, in fact, give to the minister immunity from challenge, recause that is what we are doing. We say ;o him in effect, "You exercise this power as you will, with freedom from scrutiny, however unfair, . however politically biased the decision may be".
I have asked this question and no minister has endeavoured to answer it yet: When has any government asked that any of its ministers shall, in fact, be the master, the judge and executioner of business or of individuals in our country? Equality before the law, which is the essence of freedom, the essence of the right to live, is denied, and there is placed in the hands of the minister the power to declare who shall, in fact, survive in business and who shall, in fact, die as a result of his edicts and his ukases. I do not over-state the case, and in support I know of no better editorial on the subject than that which appeared in the Western Producer of Thursday, December 4, 1947. This paper for years has taken the stand that there has been no danger in this country of any government endeavouring to take unto itself powers of dictatorship. But what did this paper say in its editorial under the caption, "Canada a Dictatorship"? This is what it states:
The charge of dictatorship has often been flung at the present Ottawa regime but most Canadians do not take it seriously. They find it hard to credit that any government elected by democratic processes, and never backward in proclaiming its loyalty to democratic principles would, to any serious extent, deviate from its professions. Yet many who have closely followed the course pursued by the federal government during the last decade have discerned some definite and quite disturbing developments.
It deals at length with the statement of the Minister of Finance in his radio speech of November 17, and then it says:
For surely, assuming that any standards of honour and decency remain, if parliament did not know it was voting these powers-

The powers of the foreign exchange control board which the Minister of Finance admits he did not know he possessed.
-and the government did not know it was receiving them they were never given nor received. This is the kind of subterfuge used by a responsible minister to avoid the necessity of consulting with the duly elected representatives of the people. Perhaps it is time that we took the charge of dictatorship more seriously.
Read that order in council to which the minister referred1 today, P.C. 4678; ascertain the powers that are contained therein, an order in council which will be continued in existence, and let anyone rise in his place and say that that order in council does not confer upon a minister of the crown a power with respect to which that minister is responsible neither to parliament nor to the courts of the country.
Did something happen on November 17 that made it necessary for this government to depart from the time-honoured procedure of having parliament called together for the purpose of having budget proposals presented in a legal and constitutional form? From what the minister said yesterday, it is clear that the foreign exchange problem has been continuing month by month. The government knew of its existence and1, as the hon. member for Muskoka-Ontario (Mr. Macdonnell) said, it just waited, hoping that something would turn up. Ministers travelled in all parts of the world at the time when conditions were most serious and when exchange was being lost in a way that held danger for the economy of the people of Canada. Then finally, on November 17, without any reason whatsoever for fixing that date, parliament was deliberately flouted by the actions of the government in giving instructions to officers of the Department of National Revenue that on and after said date they were to do certain things which had1 never been before parliament and had never been considered by parliament.
The other day my leader said that what was done was unconstitutional. The hon. member for Eglinton (Mr. Fleming) requested the production of the legal opinion from the law officers of the crown, and I think that was a proper request. Did the law officers of the crown in any way advise that it was possible for a minister of the crown, two or three weeks before the opening of parliament, to impose taxation from that date? I say to my hon. friends in the government of this country, that by that action they committed a crime against constitutional government in this country. And they wish us to act as rubber-

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stamps and be accessories after the fact, by our vote now given, for conduct illegal to begin with. To the government I say that you flouted parliament. This is the indictment; you imposed taxation without parliament, when parliament was not sitting. There has been no endeavour on the part of the Minister of Finance to furnish an excuse. Imagine the condition of affairs, sir: taxation that will rest on everybody in Canada, restrictions that will affect practically all industry in Canada, and the lawgiver gives that law by the facilities of radio and not in parliament! I read what he said and re-read it because the people of Canada should know it:
At the coming session of parliament a special bill will be introduced concerning these emergency restrictions. In order to avoid widespread anticipation and evasion of these restrictions in the next few weeks, which would cost us many millions of dollars that we cannot afford, we will ask parliament to make this new law apply as from midnight tonight, and we will put these restrictions into effect in advance, as we do in the case of budget proposals.
Were budget proposals ever put into effect before parliament was convened? When I read in Hansard that the Minister of Finance read parliament a lecture on parliament procedure and parliamentary rights, I ask this question. If we had in this country the regard and consideration for, almost the worship of, the constitution and constitutional rights, that is, heed for the British parliamentary system, would this have been done? I say to the Minister of Finance-he is not in his place at the moment-or to any other minister, that any minister under British parliamentary practice who had done this in Britain would never have been present yesterday to ' read a lecture to parliament on parliamentary procedure. He would be at home writing his memoirs. Then he says this:
This can be done-
Taxation can be imposed, I interpolate, and restrictions can be levied1.
This can be done under the provisions of the Foreign Exchange Control Act.
Now listen to these words, sir:
At the time this act was passed the government did not believe that such power was contained in the act but we are now advised by the law officers of the crown that it provides the legal basis for such restrictions as are proposed. In the urgent circumstances which face us we have decided that this power should be used until parliament has the opportunity to pass specific legislation.
What an explanation!


William Earl Rowe: What an exhibition!


John George Diefenbaker: Yes, and what a dereliction for ministers of the crown to say that there was urgency when they knew for months and months what was happening. The record tells its own story. It was no more urgent on that date than it was last June when ministers of the crown on the other side of the house ridiculed the warnings given by the hon. member for York West (Mr. Adamson) and other members of this house. Why, it was known in the United States. United States papers in May, June and July were pointing out what was happening. The responsible minister said there was nothing to it. I have before me here a statement which was
a statement made by the minister just before he went away to Europe. There was nothing to fear, he said in effect. But here is the record, and I am now just giving round figures:
January ., February . March .. ..
April	
May	
June	
July	
August . ., September October .. , November

957.000.	000
811.000.	000
700.000.	000
710.000.	000
655.000.	000
651.000.	000
668.000.	000
615.000.	000
526.000.	000
480.000.	000
These figures show the amounts of United States exchange available. The decrease was a continuing process. It was not suddenly accelerated. This government knew all through the year what was happening. I think the explanation by the hon. member for Muskoka-Ontario tells the story. The government waited; they hoped. They were fearful lest the people know the facts. Then, when finally they had to tell the facts they decided to make parliament their scapegoat for the responsibilities which they should have assumed. I have said that what was done was illegal and without justification or the shadow of justification. The measures being brought before parliament in this session commit this country to a planned economy on a terrifically large scale. Some people say to me that private enterprise is on trial; rather it is a planned economy that is on trial, because for the last year and a half the foreign exchange control board has had the power to prevent the exchange crisis. Did it do so? Apparently the power placed in the hands of that board could not do it, and finally the last course was adopted whereby the Minister of Reconstruction is to be made the boss. He is going to tell us what we must do, not that we be saved but that the government be saved.
Business across the country is fearful; and has it not reason to be? Men come down here in droves; there is confusion on every hand.

Foreign Exchange Conservation
This afternoon my right hon. friend said, in effect, that the government named the tariff items, by numbers. It is quite simple; read the schedules. To illustrate, in the first list it was prohibited to import diamonds. Then it was found that diamonds included commercial diamonds. So they had to say the prohibition did not cover commercial diamonds, and .finally they had to remove diamonds from the list. And so it goes. I have item after item before me of like kind, a kind of put-and-take proposition, a kind of trial and error proposition. There are commodities included, too, where it was found its result was to keep out things from Britain or from France, and the officials had to make changes accordingly because they did not want that to happen. So day to day confusion becomes more confusing.
Some say no political considerations will enter into this matter. Tell that to the businessmen across this country. They will come to members of parliament and say that ruination faces them. Then they speak of the possible unemployment that is going to result, the undermining of their business and the alteration of their economy. You ask them, "May I use your name and point out the example?" What is the answer? "Oh, no; we dare not." All across this country today the psychology of fear has gripped businessmen. They are fearful lest by representation they in any way incur the wrath of him who, after all, has the right to say whether or not they shall survive.
Parliament should remove from business the shackles that a muddled tyranny has already imposed upon it in a matter of three or four weeks. I believe the speech made last evening by the hon. member for Calgary West (Mr. Smith) was a real contribution. I believe the policy of this government is one of defeatism, though today the Minister of Reconstruction said it was not. It is a policy of defeatism, pessimism and fear. Let us encourage young men to have their own businesses in this country. According to a Gallup poll, seventy-four per cent of our people want to do business for themselves. The hired man wants to be a farmer, the prospector wants to be a mine owner; the worker wants to be the owner of a business. This austerity program denies the opportunity to develop small business. It paralyses the little businessman, the small manufacturer who has built up his business in the last two or three years. The veteran who came back from overseas, whose business depends upon the importation

of small parts which he assembles in this country, finds that under this austerity program he is denied the right to live.
Mr. Speaker, we have a challenge in this country. We see our young men going across the boundary line. Some say private enterprise here holds out no promise to young men. Why is it that last year 30,000 went across to the United States? They went to the greatest country in the world that believes in private enterprise, in order to have an opportunity they consider is denied them in Canada. Let us in this parliament endeavour to build up a desire on the part of our people, encouraged by the government, encouraged 'by leadership in this country, to develop the eighty-five per cent of Canada that is yet undeveloped. You say to me that we have a Department of Mines and Resources. That is so; and what are the figures in connection with that department? Last year the total amount expended in connection with our natural resources amounted to only sixty cents out of every $100 spent. Let us expand. Let us develop. At this itime, when Canada should be developing, let us not place upon the initiative of men prepared to take a chance in business the shackles of the muddling tyranny of governmental authority.
Someone may say that business is not frightened. Have you heard from our businessmen how they feel about it? Have they any assurance as to what the law will be tomorrow, as to what changes will be made tomorrow by the minister? Unless there is reasonable assurance for the immediate future, initiative is denied. You deny that freedom to which Burke referred 170 years ago:
Our constitution is like our island, which uses and restrains its subject sea; in vain the waves roar. In that constitution, I know, and exultingly I feel, both that I am free, and that I am not free dangerously to myself or to others. I know that no power on earth, acting as I ought to do, can touch my life, my liberty, or my property. I have that inward and dignified consciousness of my own security and independence, which constitutes, and is the only thing which does constitute, the proud and comfortable sentiment of freedom in the human breast . . .
Can the spirit of freedom in the human breast live when parliament is asked to give a minister the power to grant freedom to one and dispense tyranny to another? Is there freedom in a country where, at a time when there should be development, the government takes a stand for restriction; when there should be expansion, it raises the flag of control? The policies of the present are the

_______________Foreign Exchange Conservation
very reverse of ithe policies of two years ago. Read the white paper of two years ago, with all the hopes it extended.


William Earl Rowe: It has been lost.


John George Diefenbaker: It might just as
well be lost, for it is not being used today. The government then did not want prices to rise. It wanted to keep prices down. Now, by order in council of the 17th of November, they bring in excise taxes on many necessities so that the prices will be so high the people will not be able to buy those goods. I could go through the whole picture of inconsistency followed by inconsistency, both masquerading under the guise of economics.
What a floundering spectacle Canada has seen in the last few weeks. The Prime Minister (Mr. Mackenzie King) went on the radio and said, in effect:	We are going to
open the channels of trade. And before his words had ceased to roll over the radio waves, his leading minister made a speech in which he said, in effect:	Now we start the work of
restricting the development, of the trade which the Geneva agreements permit this country to have.
One other word. My hon. friend the Minister of Finance made a speech yesterday, in which, as I said a while ago, he raised a question regarding a reference I had made to certain outstanding men. The minister proceeded to read me a lecture on parliamentary procedure and constitutional government.


Mr. McILRAITH:: Good for him.


An hon. MEMBER:: What do you mean, ''Good for him"?


George James McIlraith: It was needed; that is what I mean.
Mr. DIEFENBAIvER:	You know, sir,
before one starts reading lectures and comparing Canada with the British government and with British institutions, it is well to remember this, that there is in Great Britain a civii service that is in large measure, as much as ours, free and untrammelled. Britain has kept those civil servants, outstanding permanent leaders who continue from year to year, above any suggestion of politics, or anything of that kind. What have we done in this country?


George James McIlraith: That is what we have done, except from 1930 to 1935. Do not talk about that subject, or we will go into it.


John George Diefenbaker: I do not know whom my hon. friend refers to as "we".


George James McIlraith: The Canadian people.


John George Diefenbaker: He is not a minister yet. He is only in the outer fringe. But never at any time in Great Britain has any civil servant gone on the air to announce government policy.


William Earl Rowe: Think that over, and speak again.


John George Diefenbaker: The minister made a declaration yesterday that I think will receive a good deal of attention in this country. He displayed great interest in the civil service. So have I. To speak in a personal sense, my own father was twenty-five years in the civil service and I know the work that they do. I suggest that if the government wants to display more than an academic interest in the civil service, let the government bring in the increases in pay that it has been dangling before the civil service for the last several months.


George James McIlraith: Tell us about the
decrease in 1930.


William Ross Macdonald: The hon. member's time has expired.


George James McIlraith: Let him go on.


Some hon. MEMBERS:: Go on.


John George Diefenbaker: What does Your Honour say?


William Ross Macdonald: With the unanimous consent of the* house, the hon. member may continue.


George James McIlraith: Go on. Tell about the 1930 decreases in pay of the civil servants.


William Earl Rowe: You were not here then.


John George Diefenbaker: I shall not presume at all; the house has always been considerate. May I close with this sentence, that at last we have a declaration from the minister that the policy which the government announces is the government's policy, and that it must stand or fall by that policy. That is the proper attitude. That attitude denies the propriety of a declaration made within the last few weeks by a deputy minister regarding a matter of public interest.
Let us maintain inviolate our civil service, denying them in every way any possibility of their being dragged into the cockpit of politics, for which the government must bear the responsibility, where there have been any departures.


Mr. H. G. ARCHIBALD (Skeena):: should like to contribute a few words to this
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debate because I was greatly interested tonight in the words of the Minister of Reconstruction [DOT] and Supply (Mr. Howe) when, as usual, he expressed optimism. His optimistic statements in the past have not always borne fruit, and many people in this country who expected to have homes have been disappointed.


Mr. GIBSON (Comox-Alberni):: They won the war.


Harry Grenfell Archibald: I admit that the minister has great ability, and I am not making light of it. But since the government has seen fit to decontrol the economy, the minister has been playing a hand that will get this country into greater difficulties.
I object to the non-discrimination section in this bill. It is, of course, a logical development from the government's attitude and support of the Geneva trade pacts. In carrying out the non-discrimination section, when ve protect ourselves by putting up discriminatory provisions against the United States we are also forced to impose discrimination against all other nations.
In the past we have never had a balance with the United States, and I believe it is foolishness to suggest that we can have a balance in the foreseeable future, under multilateral trade. In other words, if this unbalanced condition continues it will become greater and greater; more and more restrictions will have to be imposed. And as we impose more and more restrictions against the United States, so we are forced to impose more and more restrictions against the rest of the world. In other words, the government's free trade policy will turn into its opposite, so that we shall be going into a complete state of isolation.
There have been attempts by several speakers, from both the Liberal side and the Tory side, to turn this debate along the lines of protection versus free trade; tariffs versus free trade. That attitude in this day and age reminds me of the totem poles for which my district is famous-monuments to a colourful but bygone age, and fit only for museum pieces.
The struggle in the world markets today is not between those who believe in high or low tariffs. The struggle today is between multilateral trade and bilateral trade. Bilateral trade is that means of trading which brings about a balance between nations, without the intervention of currency-or hard currency, as it is known. It is much like the trade agreement which was published the other day between Great Britain and the U.S.S.R. The

statement was made that no hard currency was considered in that trade; all balances would be settled in goods.
Therefore we find that multilateral trade is slowly but surely coming to a dead stop. We find) such countries as Sweden curtailing imports from the United States; we find Canada doing the same thing, and Great Britain also. Why? Because they have no United States dollars. Under multilateral trading, wherever an unbalance exists as specified under the Bretton Woods agreement it must be settled in United States dollars or gold. No country has United States dollars or gold. The government is saying to us: You are not allowed to carry on a friendly poker game in your own home; you must go and play in a professional layout. When you get into such an institution the house takes a rake-off on every pot. Every gambler knows that if you stay long enough the house will take your whole stake. That is what has actually happened. Two years ago we had a billion and a half dollars; now we are going to the house and asking for another $300 million. Any gambler also knows that if he carried on under that method he would wind up being a swamper in the institution with the job of sweeping up the cigarette butts and other junk. That is the position in which every Canadian is going to find himself. He will find himself faced with the high cost of living of the United States worker without in turn receiving his high wages. We are to be peons of Wall Street.
The government's attitude toward the United States is, to say the least, subservient. In discussing the non-discrimination clause several days ago, the Minister of Finance (Mr. Abbott) said that it was a fetish with 'he United States. Therefore, even though it is a detriment to Canada, we must abide by it. In the last year or so we have read in our press of agreements between Russia, Roumania, Yugoslavia and Poland; there has been much reference to the domination of those nations by the U.S.S.R., and it has been said that the governments of those countries were just stooge governments. What is this government? It is nothing more than that. Seemingly the marrow has leaked out of the bones of the men on that side of the house. Either that, or the United States has taken a leaf out of recent history and planted a fifth column in the ranks of the government for the creation of another banana republic; but instead of being even a banana republic, we are to be just hewers of wood and drawers of water.

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What is happening on the west coast? Under the Geneva trade agreements we are allowed the privilege of sending frozen and fresh fish to the United States, but the 'twenty-five per cent duty on canned salmon still remains in effect. The result is that we are not allowed to process fish in this country.


Mr. PEARKES:: Are not the fishermen getting twice the amount of money for their raw fish that they got before?


Harry Grenfell Archibald: I grant the necessity of shipping a given amount of fish in the frozen and fresh form, but it must be remembered that the Geneva trade pact provides that whenever there is a glut of agricultural or fish products an embargo may be set up immediately. As soon as the glut exists in the United States, our market will be gone. Our planned markets are being sold down the river by such agreements as made at Geneva.


John Lambert Gibson: Hear, hear; the hon. member is right.


Harry Grenfell Archibald: If the hon member for Comox-Alberni continues making speeches such as he made the other night he will be agreeing with me before long. However, I am afraid his compatriots will not like it if he continues to speak along those lines. What the government is doing is to enter into a pact with the United States to declare war on state economies or state trading. It is only economic war at the present time, but usually economic wars end up in shooting wars. Some countries have established the state form of production, while others are developing in that direction through democratic action. We are laying ourselves open to the evils of a fluctuating United States market. The Ottawa Citizen of December IB contained an editorial entitled, "The Causes of Inflation," which reads in part:
However, the survey indicates exports from the States will fall as the world shortage of dollars grows more severe (assuming that no new loans are made).
They go on to point out that there is definite danger of unemployment and genera] depression in that country. By hooking our economy to the economy of the United States, we in the not too distant future will be left holding the bag. The Toronto Daily Star of December 13 points out that the recovery in the 'United Kingdom has been remarkable. Referring to coal mining, which has been a sore spot in that economy, this article says:
Arthur Horner, miners' union secretary, has since startled Britain-and the world-by saying he was convinced that in less than two years his men should be able to jump up their output by 50,000,000 tons a year, or 25 per cent.
Then follows a long list of commodities in connection with which they are breaking production records every month. We should hook our economy up to the planned economies in Europe where they have guaranteed their people freedom from unemployment. They have given no such guarantee in the United States.


George James McIlraith: What are the planned economies of Europe to which the hon. member refers?


Harry Grenfell Archibald: Great Britain's is
planned.


George James McIlraith: What others?


Harry Grenfell Archibald: Sweden and the Scandinavian countries.


George James McIlraith: And Russia?


Harry Grenfell Archibald: And Russia; that is right.


George James McIlraith: Go ahead with the other countries. I am serious.


Harry Grenfell Archibald: I am answering. You have a philosophy on the capitalistic benches that the state method of production is necessarily a dictatorship and that a laissez-faire economy is automatically a democracy. There are dictatorships in the world today. A reverend gentleman by the name of Endicott pointed out what was happening in China.


George James McIlraith: There are other opinions coming out of China.


Harry Grenfell Archibald: Foreign correspondents of the United States press have pointed out that the Greek government is developing communism rather than eliminating it. No matter what system we have, we can save our democracy if we are conscious of the world in which we live. We in the C.C.F. claim that the people of Canada are capable of administering their own affairs in their own interests under a co-operative commonwealth.


Brooke Claxton: Mr. Speaker, in a session and debate like this any government is always faced with one of two courses of action. Either it can try to get through parliament the legislation which it believes to be in the national interest, or it can join with the other parties in taking up the time available by endeavouring to answer every point as it is made. In this case the government, I think it is obvious to hon. members, and indeed to

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people outside the house, has taken the course of having the legislation introduced, and then it has been largely the opposition which has spoken afterwards.


Mr. GREEN:: Two ministers have spoken in this debate.


Brooke Claxton: One danger about that course is that if we have a whole succession of speakers speaking from one particular point of view it may give some impression outside the house, because it certainly does not give the impression in the house, that they are representing a point of view which has some substantial support. On that account, Mr. Speaker, I should like to take a few minutes of the time of the house tonight to deal with one or two matters that have been brought up by some opposition speakers in the course of this debate. In doing so, may I recall that we are met here at a time when the world is probably in as difficult a position as it has ever been in a period of peace since there was recorded history, and yet we have seen this situation ignored very largely by members of the official opposition.


Gordon Knapman Fraser: And by the government.


Brooke Claxton: And they have spoken as if this was some minor incident in fiscal policy.


Gordon Knapman Fraser: Minor? Nothing of the sort; we have tried to emphasize its seriousness.


Brooke Claxton: The opposition seems to take turns at saying in one sentence, "there is no urgency; there is no urgency," and then in the next sentence, "it should be met by some different means;" but all the time we have uttered by opposition members the cry, "dictatorship." The hon. member for Lake Centre (Mr. Diefenbaker) has used that expression I suppose twenty-five times tonight, and I would think it is probably the twenty-fifth time he has made that speech within the last two years.
In the British House of Commons some years ago, someone was charged with introducing the thin edge of the wedge which would break the constitution, and Lord Cecil replied that he had seen a lot of thin edges of wedges inserted in the British constitution, which the good sense of the British people had never driven home. But my good friend the hon. member for Lake Centre goes a good deal farther than talking about the thin edge of the wedge. He says the dictatorship is here. He keeps on saying that day after day; it is not just around the corner; it is here, and the people of Canada are being enslaved by it.
fMr. Claxton.]


Gordon Knapman Fraser: And howl


Brooke Claxton: That is the story, and I must say he sticks to it.


William Earl Rowe: And the minister has not yet refuted it.


Brooke Claxton: He says that businessmen are shackled, and you can hear their chains rattling as they come down in droves, as he says, to Ottawa.


Alan Cockeram: Go down to the Chateau Laurier and you will find out.


An hon. MEMBER:: In the cocktail bar.


William Ross Macdonald: Order.


Brooke Claxton: Well, Mr. Speaker, I think I have seen something of dictatorships, at second hand, thank God, but I have come pretty close to some others.


William Earl Rowe: You are pretty close right now.


Brooke Claxton: It has been my privilege to travel much more extensively than I should have liked, in the course of which I have seen something of what has been going on in many countries of Europe, and visited most of the countries of the British commonwealth during the last year; and I can tell my hon. friend, having seen it myself, having studied it, that I know of no parliament on the face of the earth where parliamentary institutions in the truest sense are freely practised to such a degree as they are in Canada today. I know of no democracy on the face of the earth where democracy is as free and untrammelled as it is today in Canada. When we come to these shackles, I know of no single country on the face of the earth where business, labour and farmers are better off than they are today in Canada.
These same old clamorous complaints, this continuous fear of what will happen is expressed time and again. They have not happened yet and they are not going to happen in the future.


Alan Cockeram: They are justifiable complaints.


Harry Rutherford Jackman: Beacon lights.


William Ross Macdonald: Order.


Brooke Claxton: The hon. member for Lake Centre read a passage from "The Road to Serfdom" and talked about the closing of the boundary to travel being a first and most dangerous step on the way to dictatorship. He spoke about it, while we look across at our boundary with the United States which is crossed by more travel and more trains and more people than any other boundary on the face of the earth.

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John George Diefenbaker: And more people getting searched than ever before.


Brooke Claxton: People are getting searched when there is an indication that they are breaking the law, and my hon. friend would not have it otherwise.


John George Diefenbaker: No, but not when they are innocent.


Brooke Claxton: My hon, friend, I am sure, would) not want the impression to go out, which has gone out throughout the length and breadth of this country, that he has not confidence in the senior advisers and civil servants of the government. Not only can I speak from my experience, but I should like to quote on that, score what is said by representatives of other countries at conference after conference, and my hon. friendi will correct me if it is not true, that he has been at Lake Success and in other countries and met delegations from other nations, and that they all say with one accord that Canada is fortunate in having the splendid, talented, conscientious and honest group of civil servants representing her and taking part in the discussions. I ask my hon. friend if that, was not his experience, just as it was the experience of the hon. member for Winnipeg North Centre (Mr. Knowles) and the other members who attended international conferences in the past. That is the invariable experience.


John George Diefenbaker: Mr. Speaker, the minister said that I was at Lake Success. That statement is not in accordance with the facts. As a matter of fact, the press reported that the government did the choosing for this side and said that I would not be one fitted to go.


Brooke Claxton: I am very sorry indeed. I had the thought that the hon. member would not have paraded his knowledge if he had not had' some experience outside Canada in connection with this international business.
I may refer, however, to the hon. member for Peel (Mr. Graydon) who was on the delegation and who sits in front of the hon. member for Lake Centre.


An hon. MEMBER:: He has not said it.


Brooke Claxton: No, he has not said it and he does not believe it. I have no doubt that the reason he has not said it is that he does not believe what the hon. member for Lake Centre said, any more than the hon. member for Muskoka-Ontario (Mr. Mac-donnell) or the hon. member for S tans tea d (Mr. Hackett) agrees with it.
In this debate we are engaged in dealing with a problem which we believe is of a most serious character. It is impossible to exaggerate its seriousness. We believe it demands measures which are certainly wide-sweeping, and which must be wide-sweeping if they are to do the job that is required1, and that is to bring our position with respect to funds into balance again with the United States.
We have advanced this program and hon. members of the opposition have so far put forward a single alternative suggestion, and that is that we should depreciate the currency. The Minister of Finance has dealt with that, I believe, to the satisfaction of this house and also of the Canadian people. They do not want to face the kind of results which have attended that course in other countries. They do not want to see happen in Canada the results which would attend that course here.


James MacKerras Macdonnell: And which this government did before.


Brooke Claxton: This government-


Alan Cockeram: Did before in 1940.


Brooke Claxton: At that time, as my hon. friends will recall, we had a completely closed border to peacetime trade and travel, and at that time the purchasing power of the Canadian dollar was lower than that of the United States. It is not that way today.


William Earl Rowe: We know that. That is the problem.


James Horace King: May I ask hon. members not to remain in their seats and interrupt. There is only one way in which questions can be asked, and that is by a member rising with the consent of the member who has the floor.


Alan Cockeram: May I direct a question to the minister? He has just made the statement that at the time our money was put into discount in 1940 the Canadian dollar would purchase less in Canada than in the United States. Will he follow that up and tell us how he arrived at that conclusion?


Brooke Claxton: The answer is as I gave it a moment ago. At that time the purchasing power of the Canadian dollar was below that of the United States dollar, and the Canadian dollar was pegged deliberately at that level at a time which closely coincided with the almost complete closing of the border to travel and trade, so that we might conserve currency in order to buy war materials. That situation continued until it was eased in consequence of the Hyde Park agreement of April, 1941.
In the course of his remarks the other night, the hon. member for Macleod (Mr. Hansell)
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said, "something is wrong", that when a number of countries were cutting down their purchases, that somebody must be making a profit. He went on to suggest that it was a bad course for us to be following, that we should sell our wealth abroad in order to maintain our own economy.
I quite agree with the hon. member when he says that something is wrong. The fact is that the world has not yet nearly recovered from the most devastating war in history, a war which lasted six years. Most of the countries of Europe have been over-run by the enemy. Old channels of trade and old standards have been destroyed. The whole western coast of the Pacific, almost the whole continent of Asia, is in a turmoil, and simultaneously with this we find a very large section of Europe and Asia divided by an iron curtain which helps to prevent recovery. At the same time we see the greatest and most powerful nation in the world with a large productive capacity needed abroad, but which other countries cannot buy because they have not the means with which to pay.
That, I suggest, is something wrong; and for a country like Canada, dependent as it is on world trade to a greater degree than any other nation, it is a situation which leads to serious consequences. Hon. members are aware, and the hon. member for Muskoka-Ontario admitted, that we had done a great deal by way of gifts to Britain. If I might recall the figures, there was a gift in 1942 of one billion dollars; there was, during the war, $2,161 million in mutual aid; there was a loan in 1946 of $1,250 million; there was the consolidation of the old loan of $700 million; and, in addition, there was the fact that very large supplies of food, larger, I believe, than any other country shipped, were shipped to Britain, some of them at prices below world prices. That meant, as we all know, that Canada did more to help Britain than any other country in proportion to population.


Alan Cockeram: But we want to know about the exchange question at the present time.


Brooke Claxton: We know my hon. friend's particular interest in the exchange question, and that is why he is in favour of devaluation of the currency.


Alan Cockeram: Oh, no. I think that is a dirty remark anyway.


Brooke Claxton: That contribution, unfortunately for us, has been made possible by reason of our shipping to Britain food and supplies, for much of which we could have obtained United States dollars from other

countries. We believed that course was in Britain's interest and that it was in our own interest to assist in her restoration.


Howard Charles Green: To what countries does the minister refer?


Brooke Claxton: Britain.


Howard Charles Green: The minister said we could have shipped those goods to other countries and got United States dollars. Which countries?


Brooke Claxton: To practically everj- dollar country at one stage or another. There are countries in western Europe which still have dollar currency left and which are ready to pay dollar currency for our products.


William Earl Rowe: Where.


John Ritchie MacNicol: What countries?


George Randolph Pearkes: May I ask the minister a question? Is that the reason we have been selling arms and ammunition to China? Could I have an answer to that question?


Brooke Claxton: My hon. friend knows I have not to do with the selling of arms and ammunition to China. He ought to have directed his question to-


Alan Cockeram: The Minister of Reconstruction and Supply.


Brooke Claxton: -the Minister of Reconstruction and Supply who is here. He will have to deal with that.


William Earl Rowe: He has troubles enough. We do not want to bother him any more tonight. You should be able to answer that.


Brooke Claxton: That delivery of food has undoubtedly helped Britain, and we are hoping that other assistance which will be forthcoming will enable her to set her feet on the way to recovery again. The same thing is true of assistance rendered to other countries. But the fact is that a considerable part of this assistance took the form of extending credit on goods which we might have sold for dollars, and at the same time we were taking goods in unparalleled quantities from the United States.


Alan Cockeram: May I ask the minister where he would have sold for dollars those goods that we shipped to Britain in the last year?


Brooke Claxton: Almost any country.


Clarence Decatur Howe: Anywhere.


Alan Cockeram: The Minister of Reconstruction and Supply says, "Anywhere." That is the answer, I guess.

[DOT]_________ Foreign Exchange Conservation


Brooke Claxton: "Anywhere" is the right
answer.


William Earl Rowe: Are we confused? Put on
your spectacles.


Brooke Claxton: Maybe hon. gentlemen
opposite are confused. They may speak for themselves on ithat.


William Earl Rowe: We could do better than you are doing.


Brooke Claxton: Our experience is that
there has been such a shortage of food in almost every country in the world, except the three or four which export wheat, that this produce could be sold in almost every country.


William Earl Rowe: You mean that everybody
who is hungry could give you dollars. Is that it?


Brooke Claxton: Yes, there were dollars
to pay for it.


William Earl Rowe: I thought so. That is logical.


Brooke Claxton: The position to date,
Mr. Speaker, is this. We have put forward to 'the house the program contained in the speech of the Minister of Finance and in that of the Minister of Reconstruction and Supply. The opposition has countered with the single suggestion that we should devaluate our currency. As between these two courses-


Howard Charles Green: There have been many
other suggestions.


Brooke Claxton: I have not heard any,
and I followed this debate with a good deal of care.


An hon. MEMBER:: We suggest that the
government resign.


Brooke Claxton: I suggest that, as between the two courses the members of this house and the people of Canada will not have much difficulty in making up their minds.


Donald Methuen Fleming: Give them a chance, will you?


Brooke Claxton: The hon. member is
very courageous today about brandishing the clarion call to an election. Of course we are never adverse to it because we have been rather successful on this side of the house.


Donald Methuen Fleming: Will you try it again?


Brooke Claxton: We would be quite prepared to face that at any time.


Mr. KNOWLES:: Try it now on price
control.


Donald Methuen Fleming: 
An hon. MEMBER:: Absolutely.


Donald Methuen Fleming: It was just an idle threat,


George James McIlraith: As will be noticed,
both Toronto members approve it.


Brooke Claxton: The house has been
gathered together now for some ten days and the government has put forward its proposals. It is now time that we should get on with the job of dealing with them. Our hope is, of course, that we can do as much of that as possible by Friday night.
With regard to one or two questions about calling parliament and the like, I should like to say one or two words further. My hon. friends opposite have, almost in the same breath, said that there is no emergency and then asked why parliament should not have been called earlier. The Minister of Finance answered that question the other night when he referred to the fact that parliament was called just as soon as it was possible after the trade agreements had been announced; and that it was not possible for us to plan and put into effect the kind of policy which would be needed to meet the emergency until we knew, first, whether there would be trade agreements, and second, until there was some better indication as to the possibilities of the Marshall plan. As soon as those matters were clarified a little more, it was then possible for the government to take the action which it did take, namely, to call parliament.


Alan Cockeram: Why did we not wait until the Marshall plan was definitely announced?


William Earl Rowe: We may have to participate in that yet.


Brooke Claxton: The course followed can perhaps be tested by a single yardstick. What would hon. members have said had either nothing been done, or had the action been taken which was taken, but parliament had not been called together and given a chance to express itself on it? Mr. Speaker, once it was decided that something must be done, the [DOT] course followed1 was the only one that could possibly have been taken.


William Earl Rowe: What do you expect to get done before Christmas? You have not done anything yet.


Brooke Claxton: If we have not done anything yet, it is only because there have been
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many speeches from hon. gentlemen opposite, in which the same points have been repeated time and time again-


William Earl Rowe: You have not answered any of them yet.


Brooke Claxton: particularly on questions of procedure.


Alan Cockeram: No; dictatorship.


Brooke Claxton: My hon. friends opposite have made a great many speeches about parliamentary institutions and parliamentary democracy. In their aims, of course, I join them completely. With the means to be followed, I join them completely in so far as they relate to means that have been taken in other democratic countries, that are confirmed by our own course and that will work. The best way to make parliamentary institutions and democracy respected is to make sure that they meet the needs of the people and the needs of the country, in time. Otherwise we shall have no democracy.


Donald Methuen Fleming: About eighteen months late.


Brooke Claxton: As I said at the beginning, our belief is that you can travel the world around and you will not see-


Alan Cockeram: Any greater dictatorship that you have here.


Brooke Claxton: -any parliament in
which 3'ou have greater freedom than you have here.


Donald Methuen Fleming: You said that once before.


Brooke Claxton: I would recall to my hon. friend that in every parliament in the British commonwealth today that I know of, and in the house of representatives in the United States, the control of the business of parliament is laid down, as they say, behind the Speaker's chair; and the legislature works to a close timetable,, which gives a definite number of days on each step.


Mr. HACKETT:: Does the hon. gentleman think that rule obtains in the legislature of Quebec?


Brooke Claxton: I do not know anything about that. The fact is that a considerable proportion of the people of Canada are coming to believe that it is time that some such course was followed in this country, that in order that parliament may get on with its business it should regulate its time and hon. members should exercise some self-control. If at this session we had more time I am afraid hon. members opposite would make

more speeches, but it would not advance the cause we have at heart; that is, to see that the legislation we believe is necessary to meet the need as it exists and is recognized today is brought into effect as soon as possible. We hope we may be facilitated in that work by members of the opposition as well as by all others.


Agar Rodney Adamson: On a point of privilege, Mr. Speaker, I did not want to interrupt the minister, but he said no members of this party had brought to the attention of the government the serious crisis which was developing. On no less than five occasions I brought it to the attention of the government, as did several other members of this party.


Some hon. MEMBERS:: No point of privilege.


Agar Rodney Adamson: I want to put that on record; and since I was sufficiently polite not to interrupt the minister while he was speaking, I expect a certain amount of politeness in return. If the government has so lost any idea of politeness and parliamentary procedure, Mr. Speaker, then I ask you to uphold the rules.


Brooke Claxton: I do not often raise questions of privilege, but since my hon. friend has become so indignant I must state that I did not say what he just said I did, as I am sure Hansard will bear out. I said that no constructive suggestion other than the one I referred to, that is, to depreciate the currency, had been made by the opposition, and that is the case.
Mr. HARRY R. JACKMAN (Rosedale): Mr. Speaker, after listening to the inspiring speech of the hon. member for Lake Centre (Mr. Diefenfoaker) I feel moved to offer what I believe is called a testimony, such as took place in the former Methodist church. I am very sorry the Secretary of State for External Affairs (Mr. St, Laurent) is not in the house at the moment, because when the hon. member for Lake Centre veas making his charges in regard to the dictatorship which some of us feel is coming upon this country, if it is not already here, the right hon. gentleman smiled to himself, no doubt feeling that what my hon. friend said was an exaggeration, if not a gross exaggeration. May I say to my right hon. friend and to other ministers of the crown, many of whom I would be even more willing to trust with absolute power than I would trust myself-while on the other hand there are some I would not be quite so willing to trust with such power-that in the few days of this week that have already passed

Foreign Exchange Conservation
I have been obtaining some information for the remarks I intend to proceed with shortly. In no less than two cases, manufacturers or their representatives who gave me the information said, "Please don't quote me. Leave me out of the picture." Why? Because they were going to see Mr. Berry or some other controller; they would have to lay their case before him, and they were very much afraid the government might crack down on them.
This afternoon the Minister of Reconstruction (Mr. Howe) said he did not think any person could say he had been unfair during his experience through the war years. I am not saying he was unfair. His record may be without blemish of any sort. Nevertheless it is wrong that the businessmen of this country, who create employment and who create our prosperity, should feel that they cannot say what they wish to their representatives in parliament because it might get to the government. May I give a very simple illustration. I had to inquire for some quotations on Canadian government bonds in New York- and I bring this out only to indicate the fear complex which is growing up in this country because of government controls. I got these quotations; and after I said, "Thank you," the final word was, "Please be sure and don't say where you got the information." What difference on earth could it make? Only this, that this house, like practically every other financial house in the country, does a certain amount of dealing in bondls with the Bank of Canada. They are beholden to the Bank of Canada. Certainly, since the war years every chartered bank has felt itself so beholden to the Bank of Canada that the officers of those banks are afraid to open their mouths and say what they think, because the Bank of Canada can. make it either difficult or easy for them. So they are very much afraid of saying what is on their minds. That is what happens when we put power into the hands of a government which does not merely lay down the rules under which business shall be conducted, but actually conducts the business itself, and has the power of life and death.
Now, sir, if I' may turn, in the few minutes remaining to me, to the subject of this debate-


Clarence Decatur Howe: You have thirty-five minutes to go.


Harry Rutherford Jackman: May I say that in the remarks which I shall make I would not for one moment presume to have the inexhaustible confidence which the Minister of Finance (Mr. Abbott) has in the opinions he gives forth to the house; nor would I hope to fall into the same fallacious economic theory which we heard from the Minister of Reconstruction and Supply here today.
The situation is that in dealing with these very broad economic questions, no one really knows exactly what the answer is. There are certain indications, however, as to what the proper course should be, and I should like to put forward those indications, as I see them. Even the Minister of Finance admitted that the government's advisers were not infallible-and that was indeed a very great admission for him to make. But we are facing a grave issue. Andi the minister admitted that when the decision was made on July 5, 1946, to revalue our dollar to parity with the United States dollar, the basis for the government's reasoning turned out to be wrong. Yet the decision remained correct, according to the government.
What were some of the reasons which in July, 1946, the government relied upon when it brought the Canadian dollar up to parity with the United States dollar? First of all, it thought international trade would expand, that there would be more sterling convertible into dollars. That did not turn out to be the case. Second, the government thought Canadian imports from the United States would level off; exactly the reverse happened. Third, the government thought prices, after the lapse of the office of price administration in. the United States, would go up in that country and then they would come down. Quite the reverse has happened. Prices in the United States continue to go up, and indications are that for the months ahead they will continue to rise.
Are the advisers of the government therefore any more likely to be right now than they were in July, 1946? The human equation in these economic questions is incalculable, particularly in a free society; and recent events indicate that the human equation is just about as uncertain in the soviet society.
I believe every businessman would now consider that the action on July 5, 1946, of the government was a mistake. The old purchasing power parity theory of exchange which, was connected with the gold standard has disappeared. Under it, if costs in one country became lower than in. another country, the country with the higher costs naturally bought where costs were lower, and repaid with gold any excess of imports it

might have. The gold going into the low-cost country then, had the effect of increasing the price level in the low-cost country so that the price levels of the two countries again became in balance. That theory has now gone by the board; and apparently the only law which governs the rate of exchange is the law of currency supply and demand.
Canadians buy so much more in the United States than Americans buy from us that there is an acute shortage of American dollars. Thus far the foreign exchange control board has supplied the deficiency, but it is now at the end of its tether. The effect of more Canadian dollars being offered in the United States market than are required to pay for Canadian goods purchased by Americans would ordinarily be to drive down the value of the Canadian dollar until we stopped our over-purchases.
Every economic proposition set out in. the textbooks is qualified by the statement, "other things being equal." But the difficulty in dealing with these questions as practical problems is that other things are seldom equal. Therefore it is always with the greatest difficulty that one can arrive at a safe conclusion as to what would .happen in any given set of circumstances.
The government's gazing into the crystal ball has thus far not been very successful; but we may be thankful there are economic laws which, after the government is through with its fumbling activities, after it has taken us from one mess into another, after having passed from one control to a stricter control, will enable us to revert to economic laws, so that we may pull ourselves out of the morass, oven if it is a most painful process.
May I pause here a moment to say that with the difficulties surrounding a broad economic question, such as a decision as to what our exchange rate should be, it seems to me that the members of the house would not be able to come to an intelligent decision without the use of the committees' system, where we may have before us those who make it their life's work to study these problems, so that we may draw upon the opinions of experts, for what they are worth, and so that we may have before us the businessmen and bankers who are experienced in these problems.
As it is, we have a parliamentary system which is probably England's greatest contribution to civilization. But one of the greatest features of that system is that it is a living organism and a living growth, and that it can grow according to the conditions it has to meet. We should come out of the nineteenth century and streamline our parliament. Without a committee in which these matters

Foreign Exchange Conservation
could be thoroughly gone into, powers must rest in the hands of the executive; and parliament-particularly the government majority-[DOT] can be nothing but a subservient majority. How can an individual member hope to go into intricate questions of a grave nature, such as what our exchange rate should be, and the restrictions we should put on, or what powers of life and death we should give to the ministry, unless we have capable advisers?
Certainly it is the system in the United States; and whether or not our parliamentary system allows for it, since its inception, times have changed so that if we are to do a job at all, and if we are to serve the people, then we must be given the opportunity of having before us people who will be able to give us the benefit of whatever information they may have, and so that we may interpret their views in the light of the needs of our constituents.
We have a whole host of other committees of the house; and I think it might be of interest to the people of Canada to know that, while apparently we cannot afford the time and personnel for a committee to go into this very grave problem-perhaps the greatest problem we shall have to face this session- yet we have a railway' committee with twenty-three members; another committee on railways, canals and telegraph lines composed of sixty members; a committee on printing with fifty-four members; a committee on the library of parliament with forty-four members; one on the restaurant with twenty-four members; one on Indian affairs with twenty-two members and one on canteen funds with twenty-two members. Compare the relative importance of those committees and the time devoted to them in this building with the importance of the problem now before the house.
The regulations the government has brought down in an endeavour at this late date to conserve our exchange and to restore the balance are not of a temporary nature, no matter what the minister may say. The condition of Canada's trade with the United States has shown a chronic lack of balance almost from the beginning of our economic history. An operation is required. The government's action is much like a medicine man telling you to hold a festered finger in the air instead of lancing it. These controls may well be fastened upon us, not for a matter of months or years, but forever. Certainly there is nothing in them which is of a permanent, corrective nature. They merely give a blood transfusion, as it were, and do nothing to cure the infection in the blood itself. Are we to
have restrictions forever in order to correct our exchange unbalance? Or are we to resort to more natural methods?
What can be considered to be the true value of the Canadian dollar in terms of United States currency? Three per cent Dominion of Canada bonds due in 1966 sell for around 104 in Canada, but those same bonds bring only 87 in New York, a difference of 17 points. If anyone wants to know the true value of the Canadian dollar, it is about 15 or 16 per cent discount. The foreign exchange control board have issued a little pamphlet in an endeavour to show that the free money market in Canadian funds in New York is only a small market which does not mean anything, that it is not for current merchandise transactions but only for investment account. The fact is that every week hundreds of thousands of dollars worth of Canadian bonds are traded in New York by life insurance institutions and others. They are willing sellers and willing buyers. The price of those bonds in New York is 87, whereas the price in Canada is 104. May I say that it was not always 87; it was 102i on July 16, 1946. Some time after our revaluation, our bonds began to go down in price because the United States investor foresaw exactly where the Liberal government would bring the Canadian economy. It has rendered us destitute of United States reserves and nothing has been done for many months to restore those reserves. We now have a reflection of what Canadian credit is in that country.
Let the Minister of Finance try to raise a loan in New York at the present time repayable in Canadian dollars. He will soon find that the true value of our exchange is about fifteen per cent discount. Canadians are regarded as being honest people and they are entitled to honest dollars vis-a-vis the United States. As it is now, we have several kinds of dollars just like Germany had under. Schacht; we have many kinds of currency.
When the Minister of Finance spoke the other day he said that there was nothing to suggest that currency depreciation would solve our problem. May I say that that is the good old-fashionied way to prevent over-buying of goods in another country. Would putting our dollar down to ninety cents help us to balance our currency vis-a-vis the United States? I suggest that a ten per cent depreciation of our dollar wouldi increase our exports to the United States.


Clarence Decatur Howe: Will the hon. member tell me what we could export under that condition that we cannot now export?

Foreign Exchange Conservation


Harry Rutherford Jackman: 
Clarence Decatur Howe: I wish my hon. friend would find a few of those things so that we could have enough of them in Canada. He speaks of exporting steel from Canada to the United States.


Harry Rutherford Jackman: I mentioned tool steels. Does the minister wish to deny that?


Clarence Decatur Howe: We are exporting those today.


Harry Rutherford Jackman: I am just saying that you could increase your exports. I thought you said that you had not enough steel in Canada, and yet you say you are exporting it. The revaluation of the dollar would be an automatic process when we have no controls. When these things are left to the natural working of the economic laws they bring into being self-righting forces. Those forces would be brought into effect after artificial controls had been removed.
We have a great deal of surplus war capacity. The minister can give the house the actual figures because he knows all the answers to these questions. I suppose that there was an increase of fifty per cent in our industrial capacity during the war and some of that capacity is not being used at the present time. It could be used if there were a ten per cent devaluation in the United States market.
I am glad to see the minister is enjoying this so much because, as I say, he knows it all. If there is anything at all in the Geneva agreements under which tariffs are cut a certain amount; if we are to be helped by the Geneva agreements through such cuts, what would 'be the effect in Canada of an exchange devaluation? The effect of a ten per cent cut would be similar to a lowering of tariffs against us by ten per cent. Will the minister deny that? I shall willingly accede him the floor if he wishes to deny that a ten per cent devaluation will do just as much
as a ten per cent cut in the tariffs of foreign countries.


Clarence Decatur Howe: Does my hon. friend realize
that there is a United States component in practically everything we use and that that would cost us ten per cent more? A cut in tariff is a straight cut in the cost of the goods, but a depreciation in currency means that, while we would get more for what we sell, we would also have to pay more for what we buy. Therefore it is not equivalent in any way, shape or form.


Harry Rutherford Jackman: As the minister pointed out this afternoon, some articles have no American content, others have only a small American content, while some have a larger American content.


Clarence Decatur Howe: Tell me one article which has no American content.
On motion of Mr. Jackman the debate was adjourned.



BUSINESS OF THE HOUSE

John Bracken: We have two days left, and I understand that members of the government and others desire to get away from here Friday night. Would the minister explain his intentions with respect to the matters we are to deal with and also the order in which they will be dealt with in the next two days.
Mr. ST. LAURENT: The leader of the opposition asked me a day or two ago if it would be possible to have questions answered and to deal with notices of motions for the production of papers. In order to comply with that apparent desire, it is suggested that that will be the first order of business tomorrow. After that, we shall proceed with Order No. 5 on the order paper of today, which is resuming the adjourned debate on the motion of the Minister of Justice in connection with the Agricultural Products Act. If that is disposed of before eleven o'clock, we shall- then resume this debate. I think that will keep us going all day tomorrow.


John Bracken: Do I understand the minister to say that we would go back to this particular debate tomorrow?
Mr. ST. LAURENT: Yes. If the addresses respecting the Agricultural Products Act have been disposed of, on Friday the Minister of Finance would like to proceed with the resolution which was moved forward one stage today, and which contains legislation to be introduced concerning assistance to the gold mines.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Thursday, December 18, 1947