CRIMINAL CODE AMENDMENT

[Stage Direction]
Mr. A. U. G. BURY (East Edmonton) moved for leave to introduce Bill No. 5, to amend the criminal code.
Some hon. MEMBERS:: Explain.


Mr. BURY:: The purpose of the bill is to make two amendments in section 750 of the criminal code, in Part XV, in connection with summary convictions.
The first amendment is to extend to those who have been convicted and sentenced to a fine without imprisonment on default the same rights as are now under the code extended to those who have been convicted and sentenced to imprisonment without a fine, and to those who have been convicted and sentenced to a fine and, in default of payment, imprisonment, both of which classes on appeal can enter into a recognizance and remain at liberty until their appeal comes on. In the case of a man convicted and sentenced to a fine without imprisonment on default there is no such provision, and he must pay his fine and costs in full before he can appeal. The purpose of the amendment is to extend to him the same privilege as is granted already to the two classes first mentioned.
The other amendment is intended to preserve to a convicted person the right of appeal notwithstanding his having failed to indicate an intention of appealing after his conviction. As the law now stands if a man convicted and sentenced pays his fine, and then later within the time limit specified by the code, files his notice of appeal, he may be and sometimes is met at the court of appeal with the objection that he has waived his right of appeal by paying his fine without then indi-

Questions

eating an intention to appeal. The purpose of the amendment is to preserve the right of appeal during the time provided under the code for the filing of the notice.
Motion agreed to and bill read the first time.



QUESTIONS

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

Mr. MERCIER (Laurier-Outremont):: 1.	Has the government or any of its representatives had any representations made it or them, or has it or they held or had any interviews or meetings with representatives of the city of Montreal, or of the Montreal board of trade, or of other bodies, having reference to a forty foot channel below the port of Montreal?
2.	If so: (a) what were such bodies; (b) what was the answer given?


Mr. BENNETT:: With respect to this question the hon. Minister of Marine indicated the other day that an answer would be given later. It would be difficult to answer the question exactly by a written reply for the reason that representatives from several bodies in Montreal saw the minister and other representatives of other bodies saw me, and the answer therefore would be that representatives of various bodies of Montreal saw various members of the government with respect to the improvement of the channel below the port of Montreal. One body, for instance, which sent representatives was the chamber of commerce, and another, the board of trade. The answer given was that departmental engineers would collect all the available information and make a report in due course as to what, if any, action could be taken to provide a deeper channel than that now existing between the port of Montreal and the sea.


Mr. MERCIER (Laurier-Outremont):: In view of the fact that a committee of departmental employees has been named a commission to study this question I am quite satisfied with the answer of the right hon. gentleman.


DUTY ON IMPORTED MERCHANDISE
Mr. BLAIR:: 1.	What were the declared values of merchandise imparted into Canada during 1931, 1932, 1933, and 1934, to date, by: (a) The T. Eaton Company, Limited; (b) The Robert Simpson Company, Limited; (c) Hudson's Bay Company ?

2.	What amount of duties and imposts were paid upon such importations during each of above-mentioned periods either by the consignee or consignors?


Mr. MATTHEWS:: In answer to parts 1
and 2 of this question I would say that it is contrary to the established practice of the Department of National Revenue to give information which would disclose the business of an individual or corporation.


Mr. SPEAKER:: Dropped.


IMMIGRATION IN 1933
Mr. LUCHKOVICH:: 
Mr. GORDON:: 1.	14,382.
2.	Statement attached.
3.
Statement of Immigration to Canada, by Origins, for the Calendar Year 1933
British-
English	 1,412
Irish	 278
Scotch	  561
Welsh	 53
Total	 2,304
From the United States	 8,500
Northern European races-.
Belgian	 26
Danish	 46
Dutch	 25
Finnish	 45
French	 76
German	 389
Norwegian	 29
Swedish	  13
Swiss	 21
Total	  670
Other races

Armenian	 7
Bulgarian	 12
Chinese	 1
Croatian	 102
Czech	 52
East Indian	  35
Esthonian	 1
Greek	 29
Hebrew	 420
Italian	 253
Japanese	 106
Jugo-Slav	 65
Lettish	 3

Questions as Orders jor Returns
Other races-Concluded
Lithuanian	 42
Magyar	 484
Negro	  16
Polish	 360
Portuguese	 1
Roumanian	 27
Russian	 63
Ruthenian	 378
Serbian	 25
Slovak	 400
Spanish	 7
Spanish American	 4
Syrian	 13
Turkish	 2
Total	 2,908
Grand total	 14,382
Statement of Deportations from Canada, showing Country Deported to, for the Calendar Year 1933
Austria	 25
Belgium	 9
British-
England	 1,309
Ireland, Northern	 218
Ireland, Free State	 53
Scotland	    840
Wales	 194
Australia	   15
Bermuda	 8
British West Indies	 4
British Guiana	 2
East Indian (India)	 2
Lesser British Isles	 10
N e wf oundland	 23
New Zealand	 3
South Africa	 3
Bulgaria	 14
China	 91
Czecho-Slovakia	 114
Ecuador	 1
Egypt	 2
Esthonia	 4
Finland	 258
France	 6
Germany	 160
Greece	   7
Haiti	 1
Holland	 32
Hungary	 101
Italy	 13
Japan	 27
Jugo-Slavia	 113
Korea	 1
Lithuania	[DOT] [DOT] ..	19
Luxemburg	 1
Malta	 1
Poland	  318
74726-8J
Portugal	 1
Roumania	 159
Russia	   12
Scandinavian-
Denmark	 70
Iceland	 2
N orway	 44
Sweden	 76
Spain	   6
St. Pierre and Miquelon	 2
Switzerland	 13
Syria	 1
Ocean Port totals	 4,388
United States citizens	 291
Grand totals	 4,679


EXPORTS TO CHINA AND JAPAN
Mr. LUCHKOVICH:: 1.	What was the value of Canada's exports to China and Japan in 1920 and 1929?
2.	What was the value of imports from the above countries in 1920 and 1929?


Mr. STEVENS:: 1.	Canada's domestic exports to China and Japan for the fiscal years 1920 and 1929, were:
Exports to-	1920	1929
China	$ 6,665,805 $24,242,507
Japan	
7,732,514	42,099,9682.	Canada's imports from the above countries for the fiscal 'years 1920 and 1929, were: Imports from-	1920	1929China	$ 1,205,229 $ 3,095,296Japan	
13,637,287	12,921,317



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. LUCHKOVICH:: 1.	How many Japanese entered Canada from 1925 to 1934, and how many Chinese entered Canada during the same period?
2.	What are the immigration restrictions with regard to Japanese and Chinese?
3.	What is the Chinese and Japanese population of Canada?
4.	What is the position of the Japanese and Chinese in Canada in regard to the franchise?


PAYMENTS TO KILMER, IRVING AND DAVIS
Mr. BLAIR:: 1.	What sums were paid for legal fees, and for what services rendered to any department of the government since September, 1927, to the firm of Kilmer, Irving and Davis of Toronto?
2.	Who are now, or were the members of the firm during that time?
3.	What other law firms of lawyers resident in Ontario have received fees from the Dominion government, and in what amounts, Bince 1927?
Motions for Papers



MOTIONS FOR PAPERS


Mr. VENIOT:: For a copy of all correspondence, tenders and other documents, relating to a call for tenders for work on Shippegan wharf, Gloucester county, New Brunswick.



SHIPPEGAN, N.B., SUB-COLLECTOR OF CUSTOMS

Peter John Veniot: For a copy of all applications, correspondence, and the report of the Civil Service Commission, relating to the appointment of subcollector of customs at the outport of Shippegan, Gloucester county, New Brunswick.



ANSE AUX CANARDS RIVER-CONSTRUCTION

Mr. BRASSET:: For a copy of pay lists and other documents, m connection with work done at Anse aux Canards river, Gaspe county, since August,



GRANDE ENTRE, QUE., CONSTRUCTION WORKS

Maurice Brasset: For a return showing a copy of all pay rolls and amounts of money disbursed, in connection with_ the work done by the Department of Public Works at Grande Entree, Gaspe county, from July SO, 1930, to the present date.



HAVRE AUX MAISONS, QUE., CONSTRUCTION

Maurice Brasset: For a return showing a copy of all pay rolls and accounts which have been paid by the Department of Public Works in the municipality of Havre aux Maisons, lies de la Madeleine, from July 30, 1930, to the present date.
l'eCHOURIE, QUE., LIGHTHOUSE WATCHMAN


Maurice Brasset: For a copy of all declarations, affidavits, telegrams and other correspondence, in connection with the dismissal of Gregoire Lafrance, of Pointe Basse, lies de la Madeleine, as watchman of the light-house at 1'Echourie, lies de la Madeleine, and also relative to the appointment of his successor.



WHEAT AGREEMENT

Richard Bedford Bennett: Mr. Speaker, before we proceed with the order of notices of motion, with the permission of the house I should like to lay upon the table two copies, one in English and one in French, of the World Wheat Problem and the London Agreement. This document was mentioned yesterday as having been circulated in western Canada to the governments of the western provinces.



GUARANTEES TO BANKS

Richard Bedford Bennett: Mr. Speaker, in answer to a question asked yesterday, I should like to intimate to the right hon. the leader of the Opposition (Mr. Mackenzie King) as to when the banks were made aware of the guarantees. He suggested it was in the month of August and I promised I would look it up. The truth is that while the government did not negotiate with the banks, the information to which reference was made was given before I left this country in June, that is, that if the securities could not be sold, the guarantee would be given.



CREDIT AND FINANCE


Mr. W. T. LUCAS (Camrose) moved:: Whereas, the provision of an adequate medium of exchange through the issue and control of currency, is a function inherent in the state, and one which is wholly within the jurisdiction of the federal parliament, and
Whereas, the transfer of this function to private interests to be used as a means of profit, rather than as a public service, has enabled those controlling finance to dominate every phase in the industrial and economic life of the nation, and
Whereas, the depressed and chaotic conditions which now prevail would indicate that this financial control, as at present exercised' has proved itself detrimental to the best interests of the people of this country;
Therefore be it resolved, that, in the opinion of this house, the government should give immediate consideration to the reassumption of this responsibility, and the creation of a national system of credit and finance, to be controlled in the interests of all the people, and under the jurisdiction of the federal parliament.
He said: Mr. Speaker, never in the history of Canada and perhaps never in the history of the world has the money question been so widely and freely discussed as at the present time. After the financial collapse and the disclosures which have been made in the last few years, the people are no longer willing to allow the bankers and financiers to do their thinking for them. They are asking themselves this very simple question: Why is it that having the raw materials, the men, the machines and the power to produce in superabundance, we cannot make use of the things we can and do produce? The answer is becoming obvious. It is because of an outworn, man-made, privately controlled money system. Nothing else stands in the way. I want to say to this

Credit and Finance-Mr. Lucas
house and to the Canadian people that among the multitudinous questions which confront them at the present time there is none of such transcendent importance as that which is to be decided by the resolution now under consideration. The question to be decided is: Are the Canadian people to have national sovereignty over their money system, their medium of exchange? In a recent message to congress President Roosevelt made this statement:
The issuance and control of the medium of exchange, which we call money, is the high prerogative of government.
It is interesting to know that the President of the United States, in spite of strong opposition, was determined to restore this right to the American people. At the present time the authority of the crown over national credit has been made subordinate to the policy of the private financial authorities. This must be changed. National sovereignty over the money power is fundamental. It lies at the very roots of national prosperity and the possibility of a permanent recovery of purchasing power. Shakespeare once wrote:
There is a tide in the affairs of men,
Which, taken at the flood, leads on to fortune;
Just as with the individual, so is a nation called upon at times to make important decisions. We stand today at the cross-roads -to the right, abundant nature, coupled with man's genius, offers plenty for all; to the left, unemployment, misery, squalor, want and destitution. History tells us that the Anglo-Saxon has ever been at his best when his back is to the wall. We stand to-day in that position. There is no turning back, our only escape is by bold frontal attack. The barons of old found themselves in a similar position. They had to strike or remain slaves. They demanded their rights and won them and every child in our schools is taught that the liberty of the people commenced with the signing of the great Magna Charta in 1215. In those early days the masses of the people were uneducated and, therefore, progress was slow. So we find that many centuries elapsed before another great reform was brought about which had far-reaching effects upon the lives of the people. In 1832, approximately 100 years ago, the first reform bill was passed. This was quickly followed by other reforms, and education spread to the masses and so far as history records, since the spread of education, more progress has been made in the last 100 years in our scientific and industrial development than was made in all the centuries of time that went before.
The problem of our forefathers was one of scarcity and famine. To-day man is no longer the slave but the master of nature in so far as eliminating the fear of scarcity is concerned. To-day an abundant nature coupled with science offers a new promise to mankind and yet we stand in that ridiculous position which has been so aptly described as starvation in the midst of plenty. To-day our problem is not one of production but rather one of distribution among the people of the abundance we have learned how to produce.
Capitalism along with education taught men to conquer nature by rapid assault. Under the impulse of the technical requirements of capitalism, the evolution of the sciences has been a triumphal march of the human mind. Science has stripped the veil of mystery from the natural forces which once filled our ancestors with fear. Science has made possible the subordination of natural forces to the human will in the service of our main object the production of the necessities of life with a minimum expenditure of energy, but our social and political science has lagged woefully behind. Yet, Mr. Speaker, in spite of what education and science has done for mankind, the world finds itself to-day in a very unhappy condition. I should like to quote from The Inversion of Science by Professor Soddy, as follows:
Discoveries, in themselves noble and full of the promise of better things, are being turned to evil. Plethora and glut choke the world's markets and produce not prosperity but unemployment and destitution. The dread powers of nature which science has in harness are being used not to build up a civilization worthy of our intellectual and material greatness, but, with the enthusiasm reminiscent of a lunatic asylum, to destroy and wreck it.
If it is not too painful an operation, stop and think for a moment, and ask yourself, what is wrong? Has nature failed us? Are we unable to produce sufficient to satisfy the needs of mankind?
No, Mr. Speaker, as Professor Soddy has so well said, plethora and glut choke the world markets and produce not prosperity but unemployment and destitution.
When one thinks of the squalor and misery in the world to-day, with its millions of unemployed, but especially in this young country of Canada, with its abundant potential resources, with its virile man power, its immense wheat fields, its great water powers, magnificent factories and transportation systems, one would think that here at least one would find prosperity, happiness and contentment, but, Mr. Speaker, we know that it is not so. However, we are told that we have sound money.

Credit and Finance-Mr. Lucas
Mars were inhabited and some person up there with a great telescope could take a bird's-eye view of our world to-day with its unlimited resources, its tremendous wealth producing power enabling it to produce plenty for all, and in the midst of all this abundance he saw unemployment, misery, poverty and want, he could come to no other conclusion than that those people were only fit subjects for a lunatic asylum.
Let us look at this question with plain, everyday common sense. What would one think of a farmer who had great stacks of feed in his fields, plenty for all his stock, but fenced around with barbed wire, far enough away so that only those beasts with long necks could reach the feed, the others having to starve or eke out a miserable existence by picking up the stray bits which fell from the mouths of the more fortunate ones? We know what would happen to him. He would immediately be arrested for cruelty to animals, and rightly so, and yet that is a fair illustration of what is happening in the human family, and what is being done to remedy it?
Doctor Hamilton Fyfe, Principal of Queens University, speaking at the annual dinner of the Engineering Institute of Canada last year, gave the engineers something to think about when he said:
They should be more than technical advisers, exploited by captains of industry, he told them, and expressed the view that the chief reason why industrial paralysis was allowed to continue was that the engineering profession was "in bondage to finance." They had allowed' themselves to be used as tools, and their technical ability had immensely increased productive efficiency, but they failed to apply their intelligence to the solution of the fundamental problem of making industry function for the public good.
Doctor Fyfe hit the nail on the head when he said that the engineers were in bondage to finance, but he should have gone further and said that not only the engineers but the great mass of the people as well were in bondage to finance. The great decision which has to be made to-day is whether the people are going to remain in bondage to finance or are they going to uphold the traditions of their ancestors and demand their rights as free men. In the development which has taken place during the past hundred years, but more especially in the last fifty years, finance has become so interwoven in our industrial and commercial life that it is to-day as necessary to that life as air is to the human body. We would not for one moment think of legislating into the hands of a group of private individuals the sole right to control the air about 
us which we all need to breathe in order to live, and yet we have done that very thing in so far as our industrial and commercial life is concerned.
Let me again quote a few lines from Professor Soddy's work at page 44:
Democracy, in its struggle with autocracy, has failed to recognize that, of all the prerogatives of government, the issue and regulation of the currency is the first, if not the only, essential, and it is not necessary to look further for the cause of its hopeless failure to give to the world a system of humane government. The coining of money can in no sense be defended as a legitimate form of private enterprise. Here at least we may claim to be upon ground that not even the most extreme individualist can dispute.
But passing from theory to practice, we have seen how our inverted ideas are fast making it the only form of private enterprise. Quite unwittingly and because of the confusions of economists between wealth and debt, democracy has given to the financier of to-day powers which never yet in history have been wielded by the most absolute autocrat. Irrespective of peoples and parliaments, kings and cabinets, the control over the manufacture of money has put into the hands of a few men absolute power over industry, and with it the very life of the nation.
Industrialized nations are so heavily in debt that industry is being administered' as a bankrupt concern in the interests of its creditors, and its primary purpose to produce wealth is more and more becoming secondary to this. Shylock has us all in his grip, scientific men and inventors, black coat and artisan, farmers and labourers, editors and journalists, teachers and professional men-all are being brought under a centralized financial domination. But thought is still free, and, despite the press, let us hope some remnant of it may persevere in our ancient schools and universities.
Yes, thought is still free, and the pioneering spirit and love of freedom which have ever characterized the Anglo-Saxon race are not now going to submit tamely, if I am any judge to a financial dictatorship which has been largely responsible for our present unhappy condition. I am willing to concede that when the monopoly over money was granted to private individuals, finance did not play such an important part in the lives of the people, and that they, the people, were not educated or trained sufficiently to handle it wisely. But in the meantime conditions have changed. The monopoly power of money in private hands has grown beyond all imagination, until to-day it threatens to wreck and ruin our present civilization. In the meantime also, education and science have fitted our people for a more abundant life and some means must be found to see that they get it.
After a conference of English clergymen at Swanwick early this year, the conference circulated a document on "The Christian faith

Credit mid Finance-Mr. Lucas
and the economic depression," containing the following statement:
We indict the monetary system as a whole, on the ground that it is not doing what we are justified in expecting it to do, namely, to arrange for the proper distribution and exchange of goods and services. The gifts of God are being withheld from His children. The present widespread sense of insecurity and fear results; and the freedom which Christ oame to bring is denied. We are told that one nation by itself cannot reform its monetary system, owing to its dependence upon international factors. To wait for universal consent on this matter is a policy of drift and despair; and we believe that, if our nation were to give a lead, other nations would be prepared to cooperate with us.
The world is looking for a lead on this allimportant question, and as the Anglo-Saxon race has ever been in the forefront of civilization, to whom else can we look with more hope for leadership and guidance? Something must be done and that quickly. Our civilization is at present chained to a corpse, and, in the words of St. Paul, cries out, "Who will deliver me from this body of death?" Is it any wonder that the wealthiest age the world had ever known has been brought almost to the verge of collapse? So I present this resolution asking that the control over our money our medium of exchange, be restored to the people, where it rightly belongs, earnestly hoping that this young country of Canada, a country free from the bitternesses, jealousies, suspicions and hatreds which dominate many of the older countries of the world, may give a lead and point the way to a brighter and better day to come.
I wish to place on record a short statement by that great industrialist Henry Ford :
Congress should have kept its constitutional power over money. But it failed to do so. It farmed out the system to private hands-a notion just as antiquated as the old notion which once prevailed of farming out the postal system.
We should have a money system managed by the public for the service of the public in the furtherance of life's continual demand for expansion. Money is right now holding up our progress to the goal which I have outlined. It is our natural conveyor system, but it is not moving. People hold on to money because they think it is wealth. But money is only the mover of wealth, and it is not moving. And those who claim to be experts in the management of the money machine do not seem to be able to make it move.
I trust, Mr. Speaker, that I may be pardoned for quoting so freely, but I know there is a tendency for the orthodox party man and the orthodox financier, whether in or out of this house, to look with contempt on anything Which emanates from this corner of the house, especially in regard to financial matters. But while the parties referred to may place what
importance they see fit upon my own observations, they cannot lightly ignore the opinions of such men as I have quoted, and who, I may say, are only a very few of the leading men of to-day who have glimpsed a clearer vision of the new and brighter day to come and who recognize that the purpose of a just economic system is to deliver goods and services, and that money must be made the servant rather than the master of mankind.
As in days gone by a public opinion developed which won for us our religious freedom, our political freedom, which abolished slavery, and I am confident that there is now developing a money mentality which recognizes that the grim goddess of finance exercises an inexorable power over the lives of the people, and unless conquered will rivet unemployment and poverty upon society until its doom.
So far I have quoted from authorities mostly outside of Canada. I now wish to place on record an excerpt from a statement by an honourable and respected member of this house. Speaking before the Canadian club of Toronto, on November 13, 1933, Hon. C. H. Cahan, Secretary of State for Canada, made the following statement. I presume every hon. member received a copy of this speech, as I did. The speech was delivered on a special occasion in that great financial centre of Toronto, so I believe I am right in assuming it was a carefully prepared speech, and coming from such an honourable and distinguished member of the cabinet, may be taken as an authoritative statement. The Secretary of State in his speech very ably confirmed many of the contentions made in this corner of the house as to how our present banking system controls and manipulates the credit of the people of Canada. The address is entitled, " The Depression, its Monetary Problems." I quote, starting at page 5 where a little historical sketch is first given. I think it is important that it should be on record, because I am sure not only the members of this house but the people of Canada will be interested to know just how our credit is issued and controlled by the banks.
The British North America Act, 1867, which constituted the Dominion of Canada, provided that the parliament of Canada should have exclusive legislative authority with respect to banking, incorporation of banks and the issue of paper money, and also exclusive legislative authority with respect to currency and coinage. Temporary legislative measures were enacted by parliament in 1867 and 1870, but the first general and comprehensive Bank Act was enacted in 1871. Revisions of the act have been

Credit and Finance-Mr. Lucas
made by parliament at the close of successive periods of approximately ten years each. The fifth revision took place in 1923. The sixth revision will be made at the ensuing session of parliament.
In the earlier days of Canadian banking banks' loans to their customers were restricted to their bank notes and their banking capital. The customer usually received from the bank the amount of the loan in bank notes or metallic currency and therewith made his payments to his creditors As late as 1840 the note issues of the Canadian banks constituted more than one-half of their liabilities. Since then banking practice has radically changed.
On September 30 last the notes in circulation of all the Canadian chartered banks amounted to $141,000,000 and their total liabilities aggregated $2,849,000,000, or over twenty times the amount of their note issues.
The prevalent conception that bank deposits may only be created by actual deposits of specie, or its equivalent in dominion notes or foreign exchange, is quite erroneous. The bank returns for September 30 last disclose that the banks held only $49,000,000 in specie and $127,200,000 in dominion notes, or a total of approximately $176,000,000 in specie and notes, while their current loans and discounts were $1,428,000,000 which was a reduction of $932,000,000 in the amount of current loans and discounts on September 30, 1929. Such a large reduction in outstanding current credits would seem to indicate that the industrial and commercial activities of Canada have been reduced or restricted by nearly 40 per cent since September, 1929.
The aggregate of these loans, by which the bulk of all deposits are created, largely represents advances of credit made by the banks to their customers. The capital and reserves of all the banks of Canada amounted on September 30 to $306,500,000, which was at least partially represented by fixed investments. The credit extended by the Canadian banks is secured in less than one-fourth part by the capital and surplus of the banks, but largely by .the good faith, property, administrative efficiency and business capacity of the customers to whom such loans are made.
The creation and issue of money was in former times the prerogative of the sovereign. In a more primitive society money consisted exclusively of metallic coins. Later governments began the issue of paper notes, redeemable in metallic currency, and these notes were declared by decree or by statute law to be legal tender in payment of all liabilities.
In more modern times the invention and adoption of the cheque system has effected a radical revolution in monetary policy. The cheque has now largely usurped the function of metallic coins and government notes as currency.
Under the modern banking practice a bank customer, instead of withdrawing his loan in bank notes and metallic currency, receives a credit entry in the books of the bank for the amount of the bank's loan, as if it were a deposit made by him in his account with the bank. Against this credit in the bank's books of account the customer draws his cheques. The customer s cheque, which is an order on the bank for the payment of money to the payee of the cheque, merely results in the 
transference of the credit, which has previously been granted by the bank, from this customer's name to the name of another customer in the same or another bank's books of account. In case the payee of the cheque so drawn keeps his banking account in another bank, the two banks, in the larger cities and towns, daily adjust their balances through the clearing house.
The result is that, in modern practice, 70 to 80 per cent of the aggregate of all deposits shown in the Canadian bank returns represent in reality the amount of loans made by the banks and then outstanding. In consequence bank deposits consist largely of credit money which has been created by the banks. When a loan is repaid by the customer to the bank which made the loan, the deposit created by the loan is wiped out, and the aggregate of all bank deposits is thereby reduced by the sum so paid.
Then he gives the total of the deposits of chartered banks in Canada as $2,260,000,000, and continues:
This aggregate of deposits on September 30 last was $436,500,000, less than the average amount of deposits during the year 1929.
Since the cheque system has been adopted the difference between the amount of cheques paid into a customer's account at his bank and the cheques drawn by the customer and paid out by the bank represents a sum of money which the customer owns, but nevertheless this money does not exist except in the accounts of the customer's bank.
What is paid out of one bank account is paid into another bank account by entries in books of account. A relatively small quantity of metallic coins or paper currency suffices for owners who require cash for their petty expenses.
The cheque system, which has been developed, enables the banks to create money -without the issue of their printed notes. On September 30 last all the Canadian banks had $141,000,000 of their own notes in circulation, while the aggregate of bank deposits was $2,260,000,000.
It is convenient for the banks, with their numerous and widespread branches, to have available a limited quantity of their own notes, which suffice, in part, for the cash requirements of their customers; and therefore, to avoid the expense of holding in reserve and transferring currency as required, it has hitherto been deemed expedient that parliament should grant to banks the privilege of issuing their own notes in limited quantities as required, not only at head offices but at all their branch offices throughout Canada. This privilege is now being criticized, and parliament must decide at the ensuing session whether or to what extent it shall be withdrawn.
.	.	. But the cheque system, which now
prevails, enables the banks, as I have stated, to create credit money at will for many hundreds of millions of dollars in excess of their note issues. $1,428,000,000 of such credit money was issued and outstanding on September 30, last. In comparison with this bank credit money the amount of all money in circulation is quite insignificant.
But in fact the banks have not an unlimited power of creating credit in the form of bank loans which may be drawn upon by their

Credit and Finance-Mr. Spencer
customers' cheques. Their dependence upon public confidence is so vital to their solvency that in actual practice they invite disaster whenever they make loans which are not accompanied by satisfactory guarantees for their repayment. If the banks are to maintain their solvency they dare not make loans or advances unless they have reasonable confidence that they will be repaid in due time. The fact remains, however, that the banks now have an almost complete monopoly of the credit facilities of the country. They may restrict or extend credit at will within the limitations which I have mentioned; and the question has arisen whether the control of credit should continue to be exercised in the sole discretion of the directors and officials of the banks.
I trust that every hon. member of the house will study that statement carefully. I would suggest that it be printed in large type and distributed to every member of the banking and commerce committee, who will be charged at the present session with consideration of the revision of the Bank Act. That act is to be revised at this present session. The speech from the throne also announces that a central bank for Canada is to be established. This will be something new in the financial structure of the dominion. On what foundation this new central bank is built will depend its success or failure and its influence for good or evil over the lives of the Canadian people. If it is founded on the lines suggested by Lord Macmillan in his recent report, that is under private control, then it is just going to add another link in the chain of international financial domination, which I say without hesitation is largely responsible for our present unhappy condition, as well as that of other countries with privately owned central banks. No, Mr. Speaker, let Canada give a lead to the rest of the world and establish a publicly owned central bank, as recommended by Premier Brownlee in his minority report as a member of that commission.
I wish it distinctly understood, Mr. Speaker, that my resolution does not ask for the nationalization of our present banks; that would be unwise and too costly. The banks have such tremendous sums stored up in palatial structures that I am sure they will wish to retain them as reminders of their monumental folly. What I do ask is that the state resume its complete sovereignty and inherent right to control and direct finance in the interests of all of the people of the country. If this is not done and the control of finance remains in the hands of selfish private interests, then it is my firm conviction that, as inevitably as we are sitting here, we are going to face ruin in the not distant future.
May I ask that when the vote is taken on this resolution every hon. member may
forget his party ties, remembering that Canada is bigger and the welfare of her people more important than any political party.
Mr. HENRY E. SPENCER (Battle River): Mr. Speaker, in seconding this resolution proposed by the hon- member for Camrose (Mr. Lucas), I do so with a great deal of pleasure because I find that although this subject received very meagre consideration ten years ago, to-day it is receiving not only a great deal of thought throughout the country but also much more consideration in this House of Commons.
The subject has been so well discussed by the hon. member for Camrose that I hesitate to take up very much time in going over ground that has been covered so ably already. We must realize, however, that this depression and the chaotic conditions which we are facing really reflect the unstable monetary conditions under which we exist. We have heard a great deal with regard to poverty in the midst of plenty; this phrase has passed from mouth to mouth daily, but how much is being done to solve the problem? Surely none of us are satisfied, when we admit that this is a country rich in natural resources, that we should have so much poverty, degradation and crime in a new country like Canada. The faulty link, as my hon. friend has mentioned already, is the one between production and consumption, and for that reason this resolution is placed before the house to-day.
Money should be a medium of exchange; we should recognize that at all times there should be sufficient money available to enable all goods and services that may be offered and are wanted to be transferred from one to another. If there is a shortage of money, total goods cannot be transferred. At the present time, in the orthodox mind, money is considered the more important, and goods and services are curtailed to fit in with the amount of money available. - Money should be looked upon as a ticket system, and sufficient money should be in circulation at all times to enable us to trade with each other to the fullest possible extent. We know full well that gold as a basis has failed hopelessly for some time past; that has been recognized perhaps more clearly in the last seven or eight years, so very little is said about it to-day. Only three years ago we heard Sir Basil Blackett, a director of the Bank of England, admit here in the city of Ottawa that there was absolutely no need to retain gold as a basis behind our internal currency. Of course gold still has value with regard to the settling of international balances, but I claim that the basis

Credit and Finance-Mr. Spencer
of credit, is the power to produce and deliver goods and services as when and where they may be required. The war was financed not on gold but on the national credit, and the ability of our people to produce the things we wanted in order to carry on the war. In passing I might say that the limitation of the war was not brought about by the amount of money in existence but by the limitation of man power and supplies that were forthcoming.
Therefore I take it, Mr. Speaker, that the issue of money is a prerogative of the government. I received a letter the other day from a legal friend, in which he says:
It is commonly said that the right to issue financial credit has been transferred to the banks. I can see no proof of that and question it as a fact. I believe it to be a pure assumption. The supposition seems to me to be negatived by section 75 of the Bank Act. As a matter of law I would say:
1.	That the right to issue all money is part of the prerogative of the crown: In the words of President Roosevelt, " a high prerogative of government." It is so in all countries, and has been so in all ages.
2.	That financial credit is money and therefore falls within the prerogative of the crown. The definition of money in Halsbury's Laws of England, volume 21, page 37, is, " that form of wealth or credit which is transferred from one person to another by means of coins, bank notes, cheques and similar instruments." Or as Mr. McKenna says, " what is immediately spendable," including all bank deposits draw-able by cheque.
Money, as we well know, is of three sorts, coin, currency and credit. As has been so well outlined by the hon. member for Cam-rose, the coin and currency represent only a very small proportion of the money we use; it is largely made up of credit. By means of the Bank Act the government of Canada allows the banks certain privileges with regard to the issuing of money. It allows the banks to issue paper money, commonly called bank notes or bills, to an extent equal to their paid up capital, and also what they call excess issue to the amount of 15 per cent of their unimpaired paid up capital and 15 per cent of their reserves. This excess can be issued for six months of the year, from September to the following February inclusive. Parliament, however, never gave the banks power to issue financial credit, and I think that is the point on which we must take our stand to-day. Parliament never gave the banks power to issue financial credit; certainly it is not covered in section 75 of the Bank Act.
I should like to quote from the Dean of Canterbury, who puts the case very neatly when he says that this power has slipped 
unawares into private hands. To-day I read a very interesting address by the same gentleman, which appeared in the Illustrated London News, from which I should like to quote a few lines:
If in a pre-machine age men eo-uld support themselves in tolerable comfort, they can do so a hundredfold better to-day. Every man, indeed, can keep himself and a score of others too. It is a marvellous world. None need want. Remove the artificial restrictions and superabundance is at hand for all. Yet we starve. Literally, and in face of plenty. In the August heat wave Liverpool steamers moved from the docks, and from the neighbourhood of hot and thirsty children, too, and dumped a million oranges into the Irish Sea.
I could quote other similar cases of waste as well.
As I have said, most of our money is credit drawable by cheque. We have often heard, sometimes in this house and sometimes outside of it, that all the money the banks have to lend is money which is placed with them by their depositors. That statement may have been partly right some fifty years ago, but to-day it is entirely out of date. All loans create new money. All cancellations of loans cancel an equal amount of money out of circulation. A bank, therefore, when it creates a loan creates an asset, on the one hand, it also creates a liability on the other, and consequently a bank in making loans has to be very careful to see that it gets good negotiable collateral on which it can realize quickly in order to meet the demands of the depositors in case of a run on the bank.
I should like to quote a few words from the Macmillan report. On page 43 they make mention of how deposits are created and to the increase of cheque money, and under the heading of Bank Deposits they say:
Bank deposits subject to cheque furnish much the most important medium of exchange in Canada.
On that same page a table is given headed "Proportion of Deposits in Chartered Banks to Notes Issued," and they say, going back to the year 1871, that the proportion of deposits to bank notes was, in 1871 2-7 to 1, but to-day, so greatly has the system changed in favour of the use of cheques, that the proportion has risen from 2-7 to 1 to 17-1 to 1.
Looking over figures that I received the other day from the Bureau of Statistics I find that in 1931 the total gold amounted to $120,000,000; legal tender, $145,000,000, and deposits, $2,422,000,000. This in itself is further proof that we are in an age of cheque money, and not in an age of either coin or note money.

Credit and Finance-Mr. Spencer
In support of what I have said in regard to loans creating money I should like to quote from one who has already been quoted here to-day, Professor Soddy of Oxford. He says:
1.	Money is printed or written into existence by the bank.
2.	It enters circulation as a loan to somebody.	.
3.	It is then spent and then becomes a deposit in the name of the receiver.
One can readily see therefore that the greater the loans made, the greater will the deposits grow, and on the other hand, the greater the cancellations of loans the greater will be the drop in the total amount of deposits.
The Right Hon. Reginald McKenna, of the Midland Bank, England, states the case as follows:
The amount of money in existence varies only with the action of the bank in increasing or diminishing deposits. We know how this is effected. Every bank loan creates a deposit and every repayment of a bank loan destroys one.
Just to round out my argument I should like to quote, in spite of the fact that this passage has already been quoted to-day, a few lines from the address of the hon. Secretary of State (Mr. Cahan), to the Canadian Club at Toronto on November 13, 1933. He said:
On September 30 last the notes in circulation of all the Canadian chartered banks amounted to $141,000,000, and their total liabilities aggregated $2,849,000,000, or over twenty times the amount of their note issues.
The prevalent conception that bank deposits may only be created by actual deposits of specie, or its equivalent in dominion notes or foreign exchange, is quite erroneous.
I am very glad indeed to have such a well-known public man as the hon. Secretary of State come to our support in that statement.
I wish now to give four reasons for what I consider the breaking down of our present economic system.
First of all I would say that it has failed because of the private control of money and credit. Parliament has allowed it to drift into private hands which handle it entirely as a private business, with the profit incentive. Banks can increase or decrease to an alarming extent the amount of money in circulation through the control they exercise in regard to the issuance of credit, and by increasing or decreasing the amount in circulation at any time they can increase or decrease prices. Financiers, therefore, have more to do to-day with regard to increasing or decreasing prices and making business better or worse than has even the federal government in this country.
Secondly, they have attempted to base the currency on gold. We all know that gold is simply a fair weather standard. It has never operated when a time of stress came. Special legislation had then to be passed, as in 1914, to enable the banks to pay their debts in their own notes and to do away entirely with paying out gold. I am very glad that the public generally to-day recognizes that gold is not necessary so far as our internal money is concerned.
Thirdly, the system is debt-creating, and in that connection we have only to look at the debts which this country is carrying, debts created in some cases, it is true, for making permanent improvements, but debts which the federal government should not have incurred; because the duty of the government should be, not to borrow, but to lend.
I should like to put a question to the house with regard to interest. How is it possible to pay the interest on loans? How is it possible to pay the aggregate of loans, plus interest, without creating additional debt to meet the interest on the loans already made? That is one reason in my opinion why debts, both public and private, are increasing so rapidly.
Fourthly, the total prices under our system to-day are always greater than the total costs. That being so, it is impossible to get rid of our total production at any given time, with the result that if we have a surplus we have to find other ways of getting rid of it. There are two ways in which we generally try to do so. One is to sell that surplus on time. We know that the United States of America probably went further in that respect than any other country, by selling goods on time until they had a pyramid of goods sold on time sales to the amount of some $6,000,000,000, and then the whole thing crashed like a house of cards.
The other way is to export the surplus. But if we have not sufficient money at any given time to buy a surplus of goods that are made, we have not the money to buy the imports which may enter the country in exchange for our exports. This naturally leads to every country doing everything it can to interfere with the natural flow of trade in its anxiety to export more goods than it imports, and there you have your economic war, which ultimately leads to military warfare.
I should like to point out four particular things that have happened in this country to which I think we should give some attention. I am not going to deal with the Finance Act this afternoon because it is a large subject and is deserving of considerable time and study. I shall only make a brief
126	COMMONS
Credit and Finance-Mr. Spencer
reference to it. The bankers have made considerable use of the Finance Act, and I do not blame them because it is a great convenience. In 1918 they used the Finance Act to the extent of $282,000,000. The interest charge made by the government at that time was from three to three and one-half per cent. Among the various securities which can be taken by the banks to the treasury board are provincial bonds. In that same year four of the provinces found it necessary to go to the federal government for help, which they received to the extent of some millions of dollars. They deposited provincial bonds as security with the treasury board. While the private banks of this country were able to get advances under the Finance Act for from three to three and a half per cent, the provinces of Canada had to pay five and one-half per cent. I think it is very unfair that this should be the case. That same year I introduced a bill asking that the same privileges should be given to the provincial governments as were given to the private banks.


Richard Bedford Bennett: Does the hon. gentleman realize that in the one case you have a two-name paper while in the other case you have only a one-name paper?


Mr. SPENCER:: I should like to know
what the Prime Minister (Mr. Bennett) means by " two-name "?


Richard Bedford Bennett: You have the promise
of the bank in addition to the promise of the bonds, while in the other case you have not. The bonds are primary debtors.


Henry Elvins Spencer: The Dominion government realizes the absolute necessity of not allowing the provinces to default, and their credit should be considered as being equally good. I have not the time at my disposal to give the house a complete list of the securities which may be taken to the treasury board by the banks, but a partial list is as follows:
(d)	Promissory notes and bills of exchange secured by documentary title to wheat, oats, rye, barley, corn, buckwheat, flax or other commodity;
(e)	Promissory notes and bills of exchange issued or drawn for agricultural, industrial, or commercial purposes and which have been used or are to be used for such purposes.
Surely provincial bonds are as good as these.


Mr. HACKETT:: Have they ever been
taken?


Henry Elvins Spencer: They may be taken.


John Thomas Hackett: Have they ever been
taken?


Henry Elvins Spencer: They may be taken.


John Thomas Hackett: Have they ever been
taken?


Henry Elvins Spencer: Probably, as they can be
under the act.
The war was largely financed by the extension of credits made against war bonds bought by such credits. One has only to refer to that most interesting book by Sir Thomas White entitled " War-time Finance " to find that he makes a remark something like this:	During the war, Canada surprised
not only herself but the world when her people subscribed twice as much money as there was in Canada for war bonds and still left ample money with which to carry on increasing business. Anyone who has looked into the financing of the war knows how it was done. One questions very much the-right or the wisdom of the government of that day in piling up debt by allowing the banks to finance the war instead of doing it themselves.
In 1914 some $26,000,000 was issued direct by the treasury, $10,000,000 to the Canadian Northern, $6,000,000 to the Grand Trunk and $10,000,000 for general government purposes. On looking up the records I find that the collateral accepted by the government of the day for the $16,000,000 loaned to the railways was railway securities guaranteed by the Dominion government. At that time we took securities which we ourselves had guaranteed!
I should like to refer for a moment to the $35,000,000 deal put through about two years ago. We well know that this was done quite in order with dominion treasury bills. They were turned over to the banks as security for the line of credit given to the dominion. The banks had the privilege of taking those treasury bills to the treasury board and obtaining dominion notes, and they availed themselves of that privilege. The banks charged four per cent for their book-keeping, while the government charged the banks three per cent for issuing legal lender. Running for a period of two years the difference amounted to something like $700,000. At that time the government financed itself to the extent of $35,000,000 at a cost of one per cent. It could have been done for less because it certainly did not cost the banks that much. Why cannot that be done today? Why do we have to go out into the market and pay four or five per cent? It would be no more inflation to issue notes than to issue a credit drawable by cheque.

Credit and Finance-Mr. Rhodes
This is one point we have to get across, that is, that anything that functions as money is money.
I have no wish to take up the time of the house any longer but I would like to remind hon. members that the Bank Act comes up for revision this year. There is considerably more interest to-day in this subject than there was eleven years ago.


Mr. IRVINE:: You would not think so to look at the house.


Henry Elvins Spencer: No, you would not.
It is only natural that the banks will do their best to defend their privileges. I do not blame them at all, but there is a responsibility upon our shoulders to look after the interests of the public. I am not aware of what the banks intend to do with regard to employing people to look after their interests, but in 1923 they engaged three of the most eminent legal men in this country, Sir Thomas White, Mr. Aime Geoffrion and Mr. H. J. Symington. There were also other legal men engaged, and with the cost of printing and distributing a pamphlet as propaganda, etc., they spent in that year a total of $96,646.50. Somebody whispered to me the other day that already the banks had engaged Mr. Geoffrion the second time. I do not blame them for engaging these very highly paid men to look after their intersts, but we are here to look after the interests of the people, and it is up to us to do our best to see that the people get a square deal when the Bank Act comes up for revision.
Hon. E.N. RHODES (Minister of Finance): Mr. Speaker, I take no exception to the fact that the hon. member for Camrose (Mr. Lucas) has made this motion, but I must point out that a large portion of the discussion, particularly that of the hon. member for Battle River (Mr. Spencer), has had reference to a central bank and other matters mentioned in the speech from the throne and which will be dealt with in the very near future.


Henry Elvins Spencer: May I interrupt? I did
not mention the central bank.


Mr. RHODES:: Having said so much, it is not my purpose to raise any point of order; my particular object in mentioning the circumstance was to indicate that I do not propose to deal with the matter at length in view of the fact that in measures which are to come before the house we will be discussing the whole question of banking in all its ramifications.
I hope that my hon. friend from Camrose and my hon. friend from Battle River will not take it amiss if I say to them that, listening to their remarks, I could not help bearing in mind a statement made not long since by a very eminent professor in the United States who has specialized in economics and finance, and who gave public utterance to the view that there were only sixteen persons in the world who knew anything about finance. Among those he cited there was not one Canadian. So far as I am personally concerned, therefore, I approach the subject with great humility; but I am glad to know that the views expressed by this eminent professor did not in the least deter my hon. friend from Camrose and my hon. friend from Battle River from discussing this very large question.
The first recital in the resolution reads:
Whereas the provision of an adequate medium of exchange through the issue and control of currency is a function inherent in the state, and one which is wholly within the jurisdiction of the federal parliament	
I take no exception to that recital. I have only to point out in that connection that since confederation the control of the issue of currency has undoubtedly been recognized as coming under dominion jurisdiction, and control has been exercised through the passing of the Bank Act and similar financial statutes bearing upon banks and banking during each decennial revision down to the present year. It may be a debatable question whether that control has been as adequate or as complete as the circumstances warrant. But whether it was or was not complete, the fact remains that during all this period we have had control of the issue of currency.
In the second recital my hon. friend has taken in rather large territory. The second recital reads:
Whereas, the transfer of this function to private interests to be used as a means of profit rather than as a public service has enabled those controlling finance to dominate every phase in the industrial and economic life of the nation. . . .
I do not propose to discuss that second [DOT]recital at any length, but I wish to take exception to the very sweeping statements which it contains. Nor do I intend to debate the last assertion, that those who control finance dominate every phase of the industrial and economic life of the nation. But I do wish to make one or two observations with respect to the third recital, because it seems to me that it puts forward a point of view which gave colour to the whole of the utterances of my hon. friend from Camrose

Credit and Finance-Mr. Rhodes
in moving the motion. The third recital reads:
Whereas, the depressed and chaotic conditions which now prevail would indicate that this financial control, as at present exercised, has proved itself detrimental to the best interests of the people of this country. . . .
As I understand that language, the hon. gentleman takes the view, so common in many quarters not only in this country but in other countries, that the present world depression is largely if not entirely attributable to matters of finance-financial control of the issue of currency, gold coverage, the questions of silver and gold, and all the various matters having to do with finance. As I said at the beginning, any views I have with respect to finance I submit with very great humility. But we can be guided in these matters by the experience not only of the past but of those who have made a study of them; and in this connection I would direct the attention of the house to page 4 of what for convenience, and to avoid confusion, I will call the British Macmillan report. This statement appears:
A period of economic depression such as that which the nation is now experiencing is a testing time for all our institutions, political, social and economic. Systems which in periods of prosperity have worked satisfactorily enough may at such times be found incapable of sustaining the stresses and strains of adversity and may disclose defects hitherto unsuspected. Machinery designed to work within a given range may jam when that range is exceeded. Moreover, there is a natural tendency on the part of the public to seek a scapegoat for any distress which may befall it and preferably to attribute that distress to any cause rather than its own shortcomings. In the search for a cause which should absolve itself from blame the public in the present instance has not been indisposed to find it in our financial system, none the less readily that refutations of the accusation are little likely to be appreciated. Accusation is always easy; defence even though well founded is often difficult. And what is least understood is apt to be most suspected. It has been our main task to examine the available evidence in order to ascertain to what extent, if any, the attribution of the present distress to monetary causes is justifiable, and then, so far as possible, to suggest remedies for any defects in the system we may have discovered.
Perhaps it would not be amiss if I were to refer to one other paragraph while I am on this point:
An important thing to bear in mind is that financial policy can only be carried into effect by those whose business it is. We have in this country a great financial and banking organization, with great experience and great traditions. It is through and with that organization that we have bo work, for they alone are the repositories of the skill and knowledge and they alone possess the equip-[Mr. Rhodes.!
ment necessary for the management of our financial affairs. Their views and opinions, however they may fail to commend themselves to enthusiastic _ reformers, are factors to be reckoned with just as much as the views and opinions of trade unions have to be reckoned with on questions of wages and working conditions.
On this same point the British Macmillan Commission went into matters at very great length. I do not know that it would be wise to read the whole of their observations as set out in the chapter beginning at page 92 under the title, "The Influence of Monetary Policy on the Price Level." I will cite their opinion, given after they had weighed the evidence carefully, as to the relative effects upon the existing condition, more particularly having to do with the price level, of monetary as against economic causes. Here is their conclusion:
Our view is, therefore, that the price level is the outcome of interaction between monetary and lion-monetary factors, and that the recent world-wide fall of prices is best described as a monetary phenomenon which lias occurred as the result of the monetary system failing to solve successfully a problem of unprecedented difficulty and complexity set it by a conjunction of highly intractable non-monetary phenomena.
I might read the following sentence for the benefit of my hon. friends, the mover and the seconder of the motion, who were so confident of the ground upon which they stood:
Whether the international monetary system could have solved its problem is a matter on which we should hesitate to express a dogmatic opinion.
And then they go on further along the same lines.


William Irvine: What is the point about it?


Edgar Nelson Rhodes: The point I had in mind in making this citation was to indicate that there might be other points of view and that this is not a matter with respect to which one can give an Olympian opinion. I cite this as the mature judgment of a committee that had gone into the matter at length, a committee that has commended itself to the great majority of the members of the house and, if I mistake not, to the gentlemen in the area whence this resolution emanated.
One is tempted in connection with a document of this character to make, perhaps, more quotations than the house would care to listen to, but I cannot refrain from making specific reference to a portion of the one paragraph, No. 297, to be found at page 126 of the report of the British committee on finance and industry. I may say to the hon. member for Camrose that this is an answer to the, if not dogmatic, at least implied, assertion not only in his motion but in his manner of addressing himself to it, that all our ills are attributable

Credit and Finance-Mr. Irvine
to mohetary causes and that the condition which obtains in the world to-day could be cured by monetary policies. The paragraph reads:
We have already referred in this report to many non-monetary causes of disturbance, such as political troubles, war debts, seasonal variations, over-production in some direction or other, changes in tariffs; the collapse of the silver exchange, large changes in fashion and in demand, embarrassments caused by budget deficits or over-borrowing by governments, rigidity of internal economic conditions, and lack of confidence resulting from all these.
And so forth. Therefore my hon. friend will, I think, admit, whether he agrees with that assertion or not, that at least in the opinion of those who have given grave study to this matter there are factors of very great importance having a bearing upon it, other than those of purely monetary concern.
In this connection, and following out the idea to which I have endeavoured to give utterance, I was rather struck with a paragraph in a book recently published called The Economics of Recovery, written by Colonel Ayres of Cleveland in the United States. Perhaps it would be well for me to give it in full, because he comes to precisely the same conclusion as does the British Macmillan commission, if indeed he does not go a little bit further. He says;
The explanation of the nature of the depression set forth in outline here belongs in that third group. It holds that the depression is one of the major after-consequences of the war, and that its advent was almost inevitable once the great war had taken place. The fundamental principle is that the huge and abnormally distributed material and financial demands of a great war must inescapably disrupt and disorganize any system of production and distribution whether in a planned or an unplanned economy, and whether under a capitalistic, a communistic, a socialistic, or any other system of society. The true lesson of this depression is that we cannot afford any more great wars.
It seems to me that there is much to be said for the point of view expressed in the quotation which I have just given. With a subject as broad as this one could cover a wide field, but may I point out that the resolution itself calls upon the government to give immediate consideration to the reassumption of this responsibility, that is the government issuing a currency, and so forth, as outlined in the preamble to the resolution. May I say to my hon. friend that in the legislation which is forecast in the speech from the throne and which will be all brought down at an early day, the government is giving immediate consideration to this very matter, and also to the creation of a national 74726-9
system -of credit and finance to be controlled in the interests of the people and under the jurisdiction of the federal parliament.
The hon. member for Battle River proceeded to discuss details of the administration of the Finance Act, a subject which will be fully covered when the Bank Act and the other acts including the Central Bank Act are being considered by the house. I do not know that any good purpose can be served by our trying to cover the field one, two or three times when it will be so fully discussed not only on second reading in the house but for a long period of time, I fancy, before the banking and commerce committee where our views may be expressed pro and con more fully than can be done in open debate in this chamber. It seems to me, in view of the fact we are going to deal with these very matters in considering the several government bills which have been forecast in the speech from the throne and which will be before the house at an early day, no good purpose can be served by prolonging this debate, or so far as that is concerned, by pressing the matter to a division. I take it we are all agreed that the measures which the government have in view are, so far as principle is concerned, acceptable to the whole house; whether or not they are acceptable in their various details is a matter which can be determined when they are actually being considered. I trust, inasmuch as my hon. friend has had an opportunity to express himself upon the principles outlined in the resolution, it may meet his purposes, in view of what I have said, to withdraw the motion.
Mr. "WILLIAM IRVINE (Wetaskiwin): Mr. Speaker, this subject has been discussed from this corner of the house quite often during the past ten or twelve years and our viewpoint, whether erroneous or otherwise, is pretty well known to hon. members, so that I do not now propose to launch out into an explanation of the monetary policies which we have advocated for so long. But frankly I am somewhat disappointed at the apparent lack of interest that has been shown, at least so far, by the house in regard to this resolution. Some of the speakers have indicated that the subject of finance, banking, credit, debt and so forth is one of great interest in the country and in the world to-day. Judging from the lack of interest in the house at the moment, I am wondering whether they are right in saying that. I have heard some hon. members, speaking to audiences in the west during the last year or two, wax eloquent
raVISED EDITION

Credit and Finance-Mr. Irvine
about the piracies of bankers and all that sort of thing, but I do not see them now on their feet making an attack that they could make here where it would be more effective. I am rather surprised to find that is so.
I am even more surprised with the reply made by the hon. Minister of Finance (Mr. Rhodes). Of course I must forbear from criticizing his speech too severely owing to the humble confession he made at the outset of his remarks, an implied confession, at least, that he knew absolutely nothing about the subject. When a man, either in the House of Commons or elsewhere, makes that frank statement, it would be cruelty on the part of anyone to follow with a ripping speech of criticism, so he has disarmed me at once. I also noted the implied sarcasm of the reference to someone who had discovered all the people in the world who knew about banking and had not included among them any Canadians. I would suggest that the gentleman who wrote the article or made the speech in which that statement was contained should certainly have included the Prime Minister of this country (Mr. Bennett), even if he forgot the hon. members in this corner and the Minister of Finance. But it has always been part of the superstition and camouflage with which finance is surrounded to assert that it is a subject impossible to understand, therefore we must leave it entirely to those in whose hands now lies the power to deal with the financial affairs of this country. May I say to the Minister of Finance that if we discovered nothing else during the investigation at the last revision of the Bank Act, we did discover that the bankers did not know anything about finance at all. Their statements of ignorance stand in the records of the committee investigating the subject, to be seen by anyone who wishes to examine them.
In spite of the supposed wisdom that surrounds those who handle finance, and in spite of the suggestion that it is too profound for the lay mind, I venture to say it is not nearly as profound as hon. members sometimes suggest. I would further say that it is certainly within the compass of any average mind to understand at least the general principles of the financial system now in vogue, and to trace to the application of those principles some of the greatest evils and greatest difficulties with which the modern world has to contend in its economic and social life. The Minister of Finance suggests that since the resolution only asks that the government give immediate attention to taking control of finance, that is now being done, inasmuch as the Bank Act and the Finance Act will come

up for consideration and revision during the present session. If that is so, then I assume that the government is accepting the resolution, because if they are already determined to do what the resolution asks for I cannot see that the minister has any reason to reject it.
But let me point out to the minister in that connection that the revision of the Bank Act is not nearly as important as the way in which it will be revised. Revision does not necessarily include a discussion of whether or not finance in Canada should be taken out of the hands of the individuals who conduct it for profit and be handled by the state or by somebody created by the state and instructed so to handle money that it may carry out its specific economic function of facilitating the production and distribution of goods within the nation of Canada. I say there is a very great difference between the subject matter of this resolution and the mere revising of the Bank Act. I wonder whether we will be allowed to discuss the wisdom or otherwise of nationalization of banking when the question of the Bank Act comes before the house. I want to make clear that the thing that is of most interest is not the mere fact of revising the Bank Act. It is not enough for us that we stroke the t's and dot the i's of that act and make insignificant alterations here and there; the significant thing for us is to know what is going to be the basis of our financial system during the next ten years, what shall be the objective of the financial institutions which we set up in this country, in relation to the economic and industrial requirements of the state. These are the questions that we are interested in, and the questions embodied in the resolution so eloquently moved by the hon. member for Camrose (Mr. Lucas). The resolution is predicated upon a well known, and I think indisputable fact,, that it is the junction of the state to handle the financial affairs of the state; that the right and power to issue currency and to control credit originally was vested in the state, and constitutionally as far as we know is there yet. But something has happened in Canada. I am not clear as to who made it happen, nor do I know the intricacies of the process by which it was brought about, but it does appear now that the authority to control credit is no longer in the hands of the state, at least directly. It has been delegated to another authority. That authority is permitter now to carry on the credit and financial services of the state for private gain. If you take up an ordinary bank note-those who are fortunate enough to have any of them-and look at it you will discover that the king's head no longer appears thereon, but the heads of bankers.

Credit and Finance-Mr. Irvine
Of course bankers' heads may be as good as kings' heads; I am not comparing heads, but I am indicating that something has happened. The symbol of authority has been changed. We have gradually changed from the authority of the sovereign to the authority of a financial group, which put its own physiognomy on the currency of the state. That, I say, indicates that the direct authority has passed from the sovereign, from governments, from parliament, and gone into the hands of institutions that have no responsibility to anybody, institutions whose object is to make profit. Although this is in perfect harmony with the ethical idealism of capitalism to make profit, it is objectionable as applied to money in particular, because that is something which owing to its universality and indispensability is within the prerogative of the state alone, and should not be entrusted to any private individual or corporation whatsoever.
So I say that the resolution is predicated on what we have always regarded as true, that the state should control the issuance of currency and the administration of credit. It would appear that we no longer have that authority, for indeed the state itself must go to that body to which it has delegated this power, to borrow from time to time for the carrying on of its own public business, thus raising by a pyramiding system a national debt which, while Canada is perhaps not as badly off as many countries, cannot be paid in any country of the world where the system is used, and I think that includes every country.
The next clause of the resolution indicates that the transfer of this power has been made; and I have briefly shown that that is the case.
Then the third "whereas" of the resolution, to which the minister took exception, indicates that as this financial system lias been administered under private control it has been demonstrated to be not to the best interests of the Canadian people during the present economic crisis. The chief objection of the minister, as I gathered it, was that there may be a number of causes contributing to the present economic situation. Of course I am quite ready to admit that this may be so, and the resolution does not say it is not so. The resolution is not all-embracing; it does not say that the control of finance must be regarded as an explanation for every detail that is wrong in our present economic situation. It does not say that; it does not make any estimate of the effect of finance at all. It merely says that finance, so far as it has a
74726-9J
bearing upon the problems of ito-day, has not been handled in the best interests of the Canadian people and I suggest to you, sir, that the minister did not disprove that point, nor indeed did he attempt to argue it. He quoted from the Macmillan report, showing that a number of other elements in addition, to finance must be regarded. I was surprised when he -went on to say that one of these factors to which the crisis could be attributed was tariffs.
If I had time, sir, I would be prepared to argue-and I should be surprised if the Prime Minister would take issue with me-that one of the reasons why he had to do with the tariff what he has done is exactly a financial reason; that any country owing money abroad oa.n only meet its obligation in regard to those borrowings by exporting goods, and that, can be done only by shipping out more than is shipped in. One of the instruments by which it is possible to bring about that result is the tariff; therefore even tariff policy is strictly a financial proposition. No country in the world that owes money to another can wipe out tariffs or lower them, even at the will of a majority of the people, wTho may not understand that to do so means the financial collapse of that country under the present financial system. Tariffs can be lowered only when the financial system is changed.
What the resolution asks the government to consider is the setting up of a financial system that will not- tie us to the apron strings of Wall Street and that will not paralyze the entire economic and commercial life of Canada merely because someone was foolish enough to go to Wall Street to establish credits when we had credits in Canada in abundance, only we did not have-eith-er the sense or the will to use thosee credits, which could have been done without piling up interest charges that were unnecessary. That is the chief reason why this resolution has been moved.
Now we come to the resolution itself and What we ask the government to do. We ask that immediate consideration should be given to the resumption of the responsibility by this government, and this nation of the prerogative, if you like, of issuing and controlling the financial requirements of the state. We are asking that consideration. Of course we do not know what is to happen; the government may be going to give us a national banking system. We are not criticising the government at all in that respect, because we do not know what proposals will be made. But surely the only thing a private member
Credit and Finance-Mr. Irvine

of this house can do is to bring in such resolutions as this to indicate at least what we think should be done and what we think the people whom we represent would like to have done, in order to assist the government as much as we can-if the government are thinking about what is the relation of the people to legislation, as I believe they are-to come to their conclusion as to whether in the next ten years our financial institutions should be handed over by statute to the complete domination of private individuals or whether we should make an attempt, an experiment if you like, to administer them through the government or through a body directly responsible ito the government, that will be amenable to policies which the government, in the interests of the economic life of the countiy, may be called upon to lay down from time to time.
The bank charters will be up this year for either extension or curtailment, and I have no doubt it is in anticipation of that very fact that the hon. member for Camrose (Mr. Lucas) brings forward his resolution. Therefore this resolution is timely; it gives us an opportunity to reflect upon the most important feature of the whole business of revising the Bank Act, as to whether or not we shall assume the power now possessed by the bankers or continue to extend it to them.
I should say briefly that our banking sys-stem is resting upon a wrong basis, and I say this with all due deference to the wisdom that is supposed to surround those who speak about finance. It is on a wrong basis, because up to the present time it has been based upon gold, and there is simply no conceivable intelligent relationship between the amount of money which may be required by a state in order to distribute the goods in that state to the people who produce them and the amount of gold which may be found now or at any other time on this planet. So to that extent it is entirely absurd to continue that basis. The second reason is that gold has an intrinsic value in itself, while the function of money is to become a medium of exchange. To use a medium which in itself has intrinsic value is practically impossible, for then the medium ceases to be a medium and itself becomes a commodity.
Another weakness in that basis is the one which we have had demonstrated so grievously in Great Britain, Canada and other nations of the world during the past few years; that is, that gold lends itself so easily to manipulation on the part of one nation as against another that it can be drained out of one country, bleeding that countiy white

and leaving its industrial life prostrate and at the mercy of a nation in competition with it for such markets of the world as may remain. The next weakness of the present banking system is the wrong motive behind it. It is not, or should not be, the motive of a financial system to make money out of money. You can plant potatoes and more potatoes will grow; you can breed hogs and they will produce more hogs, but you can plant bank notes for all eternity and no bank notes will be produced. The private individuals who handle an institution of that sort assume a tremendous responsibility, and to allow them to interject a private motive into the handling of such an institution is courting disaster. Indeed that disaster has already befallen us.
Let me give an example of the impossibility of the present banking system, and instead of banking I should say the financial system because I am not criticizing our banks as banks. I have no doubt they can add up figures as well as anyone else. I have always found that they could estimate credit perhaps too well; I always had difficulty and no doubt properly so. I am not criticizing them in that regard, nor am I criticizing them for what has been brought about. The conditions in Canada to-day must be chargeable to the members of this house during all the sessions that are past, and if we do not take steps to remedy those conditions they will be chargeable to us to-morrow.
As an example of the impossibility of the financial system, let us look at this. Here is the basis and the principle upon which money may	be issued, and I	think	in	ourtextbooks it	is so stated-that	money	is	thesymbol of wealth. Therefore, if you have wealth you	should never lack	in the	abilityto move it	or distribute it for lack	of	the
symbol. Since money is the symbol of wealth, somebody should have the authority to make the symbol when it is necessary to move the wealth.
Let us imagine we are going to move a steel rail costing $100-I do not know just what they cost-for a railway, and let us say that we have to create S100 before we can move that steel rad. Very well, we do so. We move the steel rail into the Canadian Pacific Railway yards to do service, and we move the $100 into the bank till. After twenty years that $100 has become $200, and the steel rail is worn out. And so on. Wealth perishes, but you can go on pyramiding your finance, augmenting and growing and multiplying itself in a regular geometric progression until it reaches the enormous figures

Credit and Finance*-Mr. Irvine
that we see represented in the world debt to-day, and which debt cannot be met by any country in the world. The only thing with which that debt can be met is real wealth-goods and services consumed by the people of any age and any time, but under the present financial system goods are not accepted for monetary debt.
The next thing is that banking in Canada exercises an obviously wrong technique. It looks upon money as a commodity, and it proceeds to manipulate money on the basis of a commodity. Money is not a commodity. It is the symbol of commodities, and it must be differentiated entirely in its operation and in its function from that of a commodity. It is precisely because the banking systems of the world, not of Canada particularly, but all banking systems, treat the medium of exchange as a commodity, that this process of creating debts goes on, and as long as that is done we cannot avoid such difficulties as those with which we have had to contend very recently.
Let us look at one feature of the results of this system. One of the great financial critics of this time has put the matter in as simple a way as this. He says:	If you will
put the money on the table there is no commodity produced in the modern civilized world that you cannot have. If you put the money on the table, yes. Now we have evidence that there are a great many more things produced in Canada than we have money on the table with which to buy them, and what sort of financial system is it which, in order to save figures in a book and pyramid them as debts to posterity, will allow real wealth actually to rot in front of our eyes while the peoples of the world are starving for lack of these very goods, and this because of the lack of money?
I do not say, Mr. Speaker, that the financial difficulty is the only one. I do not say that if we could find a better way of carrying on our financial institutions all economic problems would disappear, but I do say that some of the present difficulties are chargeable directly to the maladministration of finance. This parliament should be interested in finding out to what extent that is so. It should be interested in learning to what extent our difficulties to-day have been brought about through the maladministration of finance, in order that we may use the opportunity which parliament gives us to correct that condition in so far as it may be corrected.
Of course, we in this corner are always willing to learn. When we try to make an
argument we may sometimes sound very dogmatic, but really we do not feel dogmatic. Nobody I suppose could be more humble in his appreciation of how little he knows than we are over here, and the only thing that saves us is that little as we do know, we know that we know just about as much as anybody around us. That is the only excuse we have. But if there is anybody else who has a better suggestion than we are offering we shall indeed be very glad to know what it is. But we do like to see some consideration given to what we have been studying for many years, a subject which has been brought to the forefront by sheer necessity in every country in the world to-day, and which now is the very centre of consideration in national and international policies in every country in the world. I am not saying that the government is not giving the subject that consideration. I do not know what sort of a Bank Act we are going to get. We are taking this step, I repeat, to safeguard, so far as we can, the legislation and see that the Bank Act, when it comes, will be a better one than we now have. We wish to see that in our financial structure in Canada we do not have such things as have taken place in this and in other countries by this pyramiding, this debt-creating method, creating a debt which cannot be paid. I imagine that Canada with her splendid resources can come nearer to paying her debts than any other country, but I assert that no country in the world to-day can pay the debts that the debt-creating banking systems of the world have built up on the backs of the people as a whole and on the backs of individuals. Somehow or other the private and the public debts of this country must be reduced, and be reduced not by starving ourselves because under the debt-creating systems we have started something going, the creation of a debt which we can never pay even if we never went into debt any more than we are at the moment. We must have a system which, instead of asking us to deny ourselves of the abundance with which we are almost smothered, in order to pay interest and to safeguard certain outworn fetishes about money, will distribute to every Canadian all the goods that he w-ants or is interested in working for, and which will see that no goods will be destro3fed in this country through the lack of the means of moving them to the consumer. That is a policy which, regardless of any international financial complications whatsoever, can be settled in Canada.
I hope, Mr. Speaker, in spite of the rather discouraging remarks of the Minister of Finance (Mr. Rhodes), that the government will at
Credit and Finance-Mr. Bennett

least accept our resolution in the spirit in which we are offering it, and thus bear out the statement of the minister himself when he said that the government is giving immediate consideration to this question. If it is, there is no reason why our resolution should not be accepted.


Richard Bedford Bennett: Before the motion is voted on I should like to add my voice to that of the Minister of Finance (Mr. Rhodes). He pointed out that the very matters which are suggested for our consideration must necessarily be dealt with in the Bank Act, notice of the introduction of which now stands upon the order paper. The whole question of currency is involved in the Bank Act and in the central bank bill, and as well the question as to the issuing power, whether the state or the privately-owned institutions to which reference has been made shall issue notes- all that has to be considered. As we shall have to debate these matters later, why should we prolong this discussion in view of what has been said, when we know that when' these bills reach this house they will be discussed, and when they reach the committee be discussed again at still greater length? The reason they are upon the order paper early is that they may be given their second reading and get to the committee on banking and commerce without delay. The notice standing in the name of the Minister of Finance for the first reading of the bill for the extension of bank charters will be moved just as soon as the printing is completed, and with respect to the central bank bill it is expected at least that we shall be able to place it on the order paper next week and get it through its second reading, when the fullest opportunity will be afforded to every member of the house to express his views. I assure the hon. gentleman who has moved this resolution and those who have spoken upon it that the questions to which they referred are to be dealt with in those bills. Full opportunity will be afforded in the discussion of the government measures to deal with every phase of the questions which have been so fully and, shall I say, so amply dealt with by the hon. gentlemen. That being so, the government is not compelled, as it would be by the very nature of things, to oppose this resolution in view of the fact that its bills will deal with these matters. The purpose aimed at, namely the bringing of the matters in question to the attention of the government, has been served. I might say that that was wholly unnecessary because, as I have indicated, these matters are to be dealt with in the legislation to be intro-iMr. Irvine.]
duced. I expect this legislation will be down next week unless something happens to delay it in connection with the translation or other matters of that sort. I assure the house that every opportunity will be given to discuss all the phases of the questions raised by the hon. gentlemen.


William Thomas Lucas: Mr. Speaker, the Prime
Minister (Mr. Bennett) has given us assurance that we will be able to discuss fully these matters when the government measures come before the house. 1 should like to know if the fact that this resolution has already been debated will debar us from again discussing this question?


Mr. BENNET  T@: I was rather surprised
at the hon. gentlemen coming forward with their resolution in view of the fact that the rules of the house provide for what they do provide. I rather thought that when they saw the bills on the order paper they would defer their discussion. I can hardly say that the Speaker may or may not regard it as a second discussion upon the same matter, but I do say that the government will not offer any opposition to the discussion of these subjects upon the second reading of the bills. They would have to be considered from another angle, that being the angle from which they are dealt with by the government in the measures in question. The government will not offer any opposition to discussions during that debate upon any phase of the matters to which this resolution refers.


William Thomas Lucas: Mr. Speaker, in view of
what the Prime Minister has said, and not wishing to prolong the discussion, I beg leave to withdraw the resolution.
Motion withdrawn.



GOVERNOR GENERAL'S SPEECH


[Stage Direction]
The house resumed from Tuesday, January 30, consideration of the motion of Mr. Gobeil for an address to His Excellency the Governor General in reply to his speech at the opening of the session, the amendment thereto of Mr. Mackenzie King and the amendment to the amendment of Mr. Gardiner.
Hon. CHARLES STEWART (West Edmonton) :: Mr. Speaker, in common with the
other members who have spoken on the address in reply to the speech from the throne, I desire to congratulate the hon. members who moved and seconded that address. Of course, I was not able to follow the mover (Mr. Gobeil) entirely as I am

The Address-Mr. Stewart (Edmonton)
not familiar with his language, but the seconder (Mr. Barber) seemed to me to make a very temperate speech. He had a very difficult subject to handle. The one outstanding feature of his remarks was the fact that while lumbering and mining in British Columbia had enjoyed some improvement, the dairying and fruit industries were not in so happy a position. The policies of this government have been to provide assistance for the secondary industries with a consequent demoralizing effect upon the primary industry of agriculture. That is true all over Canada. The Prime Minister takes a good deal of credit for the increased sale of fruit enjoyed by the apple growers of the Annapolis valley. I do not see how the British Columbia fruit grower is enjoying any benefit from the policies of this government, because on the prairies we are buying apples cheaper than ever in my .experience. That may be attributed to better shipping facilities, but that is the fact nevertheless, and in consequence the fruit growers of British Columbia, as admitted by the hon. member for Fraser Valley (Mr. Barber), are the sufferers.
I shall not have time to cover in detail all that has been said, because the situation has been very ably dealt with by my leader. He spent four hours dealing with the question and the Prime Minister devoted about the same time to a reply. So far as I can see, though he made a splendid speech in defence of his position, what he said did not in any sense answer the statements made by our leader, that the country is in a deplorable condition. I understand that members of the government regard as infra dig any reference to the state of affairs in the country to-day. Well, it was not always so; it was not so in our day, and I propose to deal with some of the statements made by the present leader of the government in 1930, when conditions were not nearly so acute either in agriculture or in the manufacturing industry. Employment, we are told by the Department of Trade and Commerce, is in a much better situation than it was at the zero hour in 1932. I will not go into details. I have no quarrel with the statisticians who prepare the reports, but I will say that, with mighty few exceptions, and we might as well know it, throughout Canada to-day, there is more unemployment in the municipalities than there was at that time. There are more people on relief, and if that is true, how in the world can there be an improvement in the situation?
What did the Prime Minister say about unemployment? He complains about our dealing with this matter just now; he says that
we are unfair in our statements. I simply take the records of the commissioners of relief in the various districts throughout Canada as an indication, to show the state of unemployment to-day. It must be borne in mind that during last year the government has had to put a very considerable number of people on relief employment, and they are credited in the statistical statement given by the Department of Trade and Commerce as persons employed. The statement is made that 146,000 more are employed to-day than in 1932. I reiterate that if the statements of the commissioners of relief throughout Canada are true, then that statement is not correct. And I do not see how the situation will be remedied if the policies pursued by the present government are to be continued. We cannot expect any other state of affairs, despite what my hon. friends to the left say, as to the need of a complete new system. I do not agree with that, but I certainly agree that wre need many changes in the present fiscal policy of this government.
The complaint is made that we are making a great deal of the unemployment situation. What did the Prime Minister say in 1930? He said that unemployment existed then on a scale never before known in the history of this country, and this by reason of the policies of the Ottawa government. If the Ottawa government was responsible for 117,000 unemployed in 1930, then the Ottawa government is responsible to-day for 1,500,000 unemployed.


An hon. MEMBER:: You are wrong there.


Charles A. Stewart: I am stating facts. The statement of the present Prime Minister in 1930 was that the Ottawa government was responsible for unemployment. He said something else. He said that unemployment was then on a scale that demanded that it be treated as a national emergency. Has he treated it as a national emergency? What else did he say? He said that the Liberal party was trying to evade its responsibility. He was going to give work, not doles; it was a national matter, and as such it was to be taken over by the federal government. Well, he has not kept that promise in one particular. He ridiculed the statement of my leader, that, unemployment was first the responsibility of the municipality, secondly, the responsibility of the province, and, if necessary, that relief should then be furnished by the federal government. But what has this government done? After ridiculing the proposal of my leader, the Prime Minister has not departed in any respect from that
136	COMMONS
The Address-Mr. Stewart (Edmonton)
policy. We now have the proposal of a public works program to be instituted by this government, over which they will have complete control; but so far, with the single exception that the Department of National Defence is giving employment to a number of unmarried unemployed, this government has done nothing but issue relief through the medium of the provincial governments. If it is not doles, what is it? This country is on the dole to an extent never known before, put on the dole by the leader of this government in direct defiance of the pledge given to the electorate of Canada upon which he was elected and now sits in this house. But that was not the only pledge he gave; he gave many more. A great deal was made of unemployment at that time and the right hon. gentleman promised work and not doles. There has been no work however but rather doles, in direct contradiction of the promise he made on that occasion. He said that every man who was willing to work would have 'work; and on one occasion he said, "Let us not be deceived; let us get to grips with this problem,; let us have action, not words." That must be very satisfying to the men on relief to-day. He said:
I am a man, just as you men who are here, one of your fellow citizens. I have responsibilities, as every roan in my position has. and I must not lightly make statements that f am not prepared to the last syllable to carry into effect. And I will not.
I leave it to the judgment of hon. members, to what extent these very solemn promises made by the Prime Minister of this country are being carried into effect to-day.


Mr. POULIOT:: None.


Charles A. Stewart: I know the problem is a difficult one. We knew it was a difficult one in 1930; we were fully aware of that fact, but we did not then and do not now propose to make to the electorate promises that we will utterly fail to implement or even not try to implement; yet this government has done so. I do not intend to say more about unemployment; I am going to delay further remarks upon this question until the bill is introduced to provide work;
I hope the bill will provide work and that some attempt will be made, by the government to keep some of its promises on which they were elected. A country like Canada, with all the latent natural resources possessed by it, has no licence to be in the unfortunate position she is in to-day with respect to unemployment, and I lay responsibility for that at the door of the present government.

The leader of the party to my left (Mr. Gardiner) the other day took exception to the statement of my leader (Mr. Mackenzie King) that the gentleman recently appointed to ibhe tariff board was a Conservative; that he was not a Progressive. I may say to my hon. friend that I never beard a better Tory speech delivered in this house than the one delivered by that same gentleman who then represented Mackenzie. He sought during forty minutes to prove that the Liberal party by their policies had a higher average tariff than that imposed by the Conservatives. If my hon. friend was under any illusion about where that gentleman stood, subsequent events must have dissipated it to some extent when he was appointed to the tariff board because I have not noticed this government being very generous to opponents who opposed them vigorously. This appointment will be one in a list of hundreds, and on every occasion the government took good care ito see to it, as they had a right to do, that those appointees were men of opinion similar to their own.


Jean-François Pouliot: The former member for Mackenzie was a whitewashed sepulchre.
Mr. STEWx\RT (Edmonton): May I give my hon. friend some of my reasons for making those statements, because I think it is important on questions of tariff that we reiterate from time to time the exact position of the application of tariffs by the two historic parties. I am going to give figures in connection with well known imports, imports that are used every day. I have under my hand a table of comparative tariff rates under five different tariff programs. The rates are as applied to imports from Great Britain- rates against other countries under the Bennett or the Bennett-preference tariffs are unbelievably high. I take first cotton printed piece goods, a commodity that goes into every
home. The rates are as follows:
Rate
Government-[DOT]	Per cent
Conservative-Borden	 25
Conservative-Meighen	 25
Liberal-King	 18
Conservative-Bennett	 61
Conservative-
British preference	 58.5	'
Then there is white cotton flannelette, another commodity used more or less in every home in Canada:
Rate
Government-	Per cent
Conservative-Borden	 17J
Conservative-Meighen	 17|
Liberal-King	 15
Conservative-Bennett	 55
Conservative-
British preference	 52

The Address-Mr. Stewart (Edmonton)
I take next wool piece goods, another commodity which goes into every home. These items are chosen designedly, because they affect practically every home in Canada:
Rate
Government-	Per cent
Conservative-Borden	 30
Conservative-Meighen	 30
Liberal-King	 24J
Conservative-Bennett	 68
Conservative-
British preference	 64
Wool Overcoating
Conservative-Borden	 30
Conservative-Meighen	 30
Liberal-King	 24	J
Conservative-Bennett	100
Conservative-
British preference	 93
Let me take high-grade suitings, another article that is worn by many people in this country although, may I say, not so many of them are being worn to-day because the tariff keeps them out:
Rate
Government-	Per cent
Conservative-Borden	 30
Conservative-Meighen	 30
Liberal-King	 24	J
Conservative-Bennett	 72
Conservative-
British preference	 68
Hosiery, Wool
Conservative-Borden	 25
Conservative-Meighen	 25
Liberal-King	 18	to	24J
Conservative-Bennett	 92
Conservative-
British preference	 82
Blankets
Conservative

Borden	 224
Conservative-Meighen	 25
Liberal-King	 204
Conservative-Bennett	106
Conservative-
British preference	 78
Axminster Carpets
Conservative-Borden	 25
Conservative-Meighen	 25
Liberal-King	 224
Conservative-Bennett	106
Conservative-
British preference	 80
Farm Implements Mowers and Binders
Rate
Government

	Per cent
Conservative-Borden		. .. 124
Conservative-Meighen. . . .	... 124
Liberal-King		. . . 6
Conservative-Bennett. . . .	. . . 25
Conservative-	
British preference		... 25
Cultivators, Harrows, etc.
Conservative-Borden		. 20
Conservative-Meighen		. 15
Liberal-King		[DOT] 74
Conservative-Bennett		. 25
Conservative-	
British preference		. 25
Ploughs	
Conservative

Borden		. 20
Conservative

Meighen		. 174
Liberal-King		. 10
Conservative-Bennett		. 25
Conservative-	
British preference		. 25
Cream Separators	
Conservative-Borden		. Free
Conservative-Meighen		, Free
Liberal-King		, Free
Conservative-Bennett		, Free
Conservative-	
British preference		. 25
Barbed Wire	
Conservative-Borden		. Free
Conservative-Meighen			. Free
Liberal-King		. Free
Conservative-Bennett		. Free
Conservative-	
British preference		. 10
When one of my hon. friend's colleagues in that group will from his place in this house take the responsibility of trying to lend colour to the statements made by hon. gentlemen opposite, we have grave doubt about his being entirely progressive in his ideas, because hon. gentlemen whatever they may claim in the house, go out into their constituencies and invariably tell their electorate that they are for a lower tariff than was ever received from a Liberal party; they try to secure votes that are naturally Liberal, on the ground that they are more radical in this regard than the Liberal party has even been. I have had some opportunity to watch my hon. friends during the past few years and know something about the kind of propaganda they are carrying on. It has never been directed very seriously against hon. gentlemen opposite, indeed my good friend, the hon. member for Wetaskiwin (Mr. Irvine) has gone to the extent of saying that there is no need to hold up the sins of the party who sit on the opposite side of the house, because they are beyond recall, the electorate are through with them. But he devotes a great deal of attention to the Liberal party in Liberal centres in western Canada.


An hon. MEMBER:: They all do.


Charles A. Stewart: 
An hon. MEMBER:: That is what we had left over from you.


Charles A. Stewart: 
An hon. MEMBER:: Keep them.


Charles A. Stewart: How can you keep them? Every farmer knows that the moment they get over 220 pounds you are docked, so you have to sell them as soon as they are ready. We have a rigorous climate out there, and we have to try to get our hogs on the market before the cold weather sets in, so we are forced to take these prices. I see distress and suffering among my neighbours, and I may tell the Prime Minister that I take mighty little satisfaction from the fact that temporarily the price of hogs has gone lip. As soon as we begin to produce we will find the price go down to the old level. I hope it will not; I should be glad to see it remain at ten cents, and in fact I would be glad to get five cents.


Mr. DUFF:: The farmer does not get ten cents.


Charles A. Stewart: No, of course he does not, but the Minister of Trade and Commerce (Mr. Stevens) is going to rectify that by means of the inquiry which is to be made, and which is necessary because of the action of this government in putting these individuals in a preferred position. I want to tell my right hon. friend that I hope he attacks the question as vigorously as he promised to do in 1930, when he said that if any individual sought to take advantage of the protection afforded him the government would see that redress was given at once. This has been going on for three years; in a moderate way it is going on right now and I am waiting to see what kind of redress we are going to get. If we do not get redress

at once; if it runs on for another six months or so we will not need redress, because we will all be out of business.
I see where one particularly optimistic individual says that it all depends upon the farmer, that on one side of the road he has known a man to become wealthy while the man on the other side of the road was a complete failure. Well, I have seen a few oases of that kind, but by and large the farmer needs all the assistance he can get in a very difficult occupation. Mighty few of them make more than a reasonable competence out of a lifetime of toil. My hon. friends who live in Ontario know that. I have been engaged in farming all my life, and I know something about it. At present I am not in a particularly unfortunate position, but that is not due to the receipts from my farm, which have bad to be bolstered on many occasions. When hon. gentlemen tell me that the farmers of western Canada are responsible for many of their difficulties I can only say that I wush they would go out and address a farm gathering in the west when they do go. I notice that they stick pretty religiously to the urban centres.
I have lived in western Canada for over twenty-six years, Mr. Speaker, and I have never known the people to be so incensed as they are to-day. They are willing to consider anything, even sovietism, if it will change the situation, and they are not going to be buncoed any longer. When they get an opportunity to express themselves hon. gentlemen opposite will understand in what high regard they are held by the farming community of western Canada.
On motion of Mr. Thompson (Lanark) the debate was adjourned.



BUSINESS OF THE LIOUSE

Richard Bedford Bennett: The business to-morrow will be to fake the order paper as it is.


Mr. LAPOINTE:: What does that mean; shall we take up the address?


Richard Bedford Bennett: No, just as the business is on the order paper. To-morrow is private members' day.


Ernest Lapointe: I notice that this year the debate on the address appears on the order paper under the head of public bills and orders, and I believe that for the first month of the session public bills and orders have precedence on Thursday. Do I understand, then, that the debate on the address will go on to-morrow?

Questions


Richard Bedford Bennett: When we reach public
bills and orders the debate on the address will be proceeded with. That is what I desired to say, that we will take the business as it appears on the order paper.


[Stage Direction]
At six o'clock the house adjourned without question put, pursuant to standing order.
Thursday, February 1, 1934