Mr. SPEAKER:: I have the honour to inform the house that a message has been received from the Senate informing this house that the Senate have passed the following bill to which the concurrence of this house is desired:
Bill No. 91 (letter E of the Senate) intituled: "An Act Respecting Shipping."


Right Hon. R. B. BENNETT (Prime Minister) :: Mr. Speaker, you have just read a message from the Senate indicating that Bill Letter E of the Senate relating to shipping has been passed by the Senate. We were unable to complete the printing of it by Friday night, and as the bill is now transmitted to the house I would move, with the permission of the house, that standing order 22, which provides that bills originating in the Senate and sent to this house for concurrence shall be placed for first reading on the order paper under the heading "routine proceedings," immediately after "introduction of bills," be suspended for this sitting and that the bill be placed on the order paper so that it may be read the first time this afternoon. I will write the motion presently. I have just heard
the message read from the Senate and I was not sure until a few minutes ago that it would come to us this afternoon.


Mr. MACKENZIE KING:: It is purely to
expedite the proceedings of the house?


Richard Bedford Bennett: Yes.


[Stage Direction]
Motion agreed to.
Hon. ALFRED DURANLEAU (Minister of Marine) moved for leave to introduce Bill No. 91 respecting shipping.
William Lyon Mackenzie King: Will the minister explain the bill?


Mr. DURANLEAU:: On this reading I do not intend to go further than to say that this measure is a complete revision of our Canadian laws respecting shipping. It has been framed in the light of the statute of Westminster and of the agreement with the other dominions as to uniformity in shipping laws, and also in the light of our Canadian laws, so as to give Canada a full power over all Canadian ships no matter where they might be and over other British or foreign ships within Canadian territory. I intend to make a complete statement on the second reading.
Motion agreed to and bill read the first time.



PRIVATE BILL


[Stage Direction]
Bill No. 85, for the relief of Mary Mabel Taylor Johnson.-Mr. Lawson.

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

Mr. MORAND:: How many government employees are there in the port and sub-ports of Windsor in (1) immigration; (2) customs and excise; (3) post office; (4) radio department; (5) weights and measures; (6) agriculture; (7) annuities; (8) income tax?


Mr. CAHAN:: 1. 66.
2.	261.
3.	139. This includes postal employees at Walkerville and Sandwich postal stations.
4.	3.
5.	1.
6.	10.
7.	1.
8.	2.-Total 483.
Questions


BIG BEAVER, SASK., POST OFFICE
Mr. DONNELLY:: 1.	Who is the postmaster or postmistress at Big Beaver, Saskatchewan?
2.	Is he or she a British subject?
3.	If a British subject, is he or she such by birth or naturalization?
4.	If by naturalization, when naturalized and by what process?


Mr. CAHAN:: 1.	Miss Lela Marian Wood.
2,	3 and 4. According to a statement made by the postmistress on the 3rd March, 1931, she was bom at Britton, South Dakota, U.S.A., on the 26th February, 1907, and became a British subject when her father was naturalized. The postmistress states that she is the daughter of Edwin Wood. The records of the Department of the Secretary of State disclose that Edwin Wood, formerly of Britton, South Dakota, was naturalized at Weyburn, Saskatchewan, on 15th January, 1917, under the Naturalization Act, R.S.C. 1906, chapter 77. By the provisions of that act, all his minor children who were residing with him in Canada are deemed to be naturalized British subjects.


MOTIONS FOR PAPERS
Mr. MACDOUGALL:: For a return showing the amount of money spent annually by the federal government by way of subsidies to the Nova Scotia coal industry from 1923 to 1934, inclusive.


GRAND FALLS, N.B., POSTMASTERSHIP
Mr. MICHAUD:: For a copy of all correspondence, letters, telegrams and orders in council, relating to the appointment of a postmaster at Grand Falls, Victoria county, New Brunswick.


WHITE BROOK, N.B., POSTMASTERSHIP
Joseph Enoil Michaud: For a copy of all correspondence, letters, telegrams and orders in council, relating to the post office and dismissal of postmaster and appointment of successor, at White Brook, Restigouche county, New Brunswick, between September 1, 1930, to May 29, 1934.


RIDING MOUNTAIN NATIONAL PARK
Mr. WEIR (Macdonald):: For a return regarding the Riding Mountain national park in Manitoba showing, the names and addresses of:	(a) persons holding permanent or administrative positions; (b) persons holding temporary positions and the character of work being done by each; (c) persons holding concessions of any kind; (d) persons having contracts of any kind.


CASCAPEDIA, QUE., WHARF
Mr. DUGUAY:: For a copy of all correspondence exchanged between the provincial government of Quebec and the federal department of Public Works and Labour, and any other person or corporation, respecting the building of a wharf at Cascapedia, on the Cascapedia river, county of Bonaventure.


UNEMPLOYMENT RELIEF-MR. ELIAS LEBEL
Mr. FAFARD:: For a copy of all telegrams, correspondence, and other documents exchanged during the past two years between the dominion unemployment relief bureau and Mr. Elias Lebel, of Ste-Jeanne d'Arc, county of Matapedia, Quebec.	/


OLD AGE PENSIONS-NOVA SCOTIA
Isaac Duncan MacDougall: For a return showing: (a) the number of aged people in Nova Scotia to whom old age pensions have been granted, with their names and addresses; (b) the amount paid to date by the federal government in respect to the payment of such old age pensions in Nova Scotia.


Mr. A. W. NEILL (Comox-Alberni):: I rise to a point of order which perhaps is on a very wide basis. I suggest that it is not in the public interest that the names and addresses of these old age pensioners should be published.


Richard Bedford Bennett: The hon. gentleman sent me a note
indicating - that he thought names and addresses might be omitted. As a matter of fact, with respect to another return the matter was looked into last year and it will be recalled that a return was ordered containing the names of all those receiving pensions under the military pensions act, so that from the standpoint of the right to receive the information if it is sought, I am afraid there is no question as to its being quite competent and proper for the house to pass the order if it so desires.


[Stage Direction]
Motion agreed to.

[Stage Direction]
On the notices of motions:
Mr. McINTOSH:: For a copy of all correspondence, letters and other documents exchanged between any person in Beacon Hill, Beacon Hill district or elsewhere, and the department of the Postmaster General, regarding the management of the post office at Beacon Hill. Saskatchewan, during the past year; also a copy of any report made by an inspector of the Post Office

Privilege-Mr. Weir (Meljort)
Department who made a special investigation in connection with the management of said post office any time between June 1, 1933, and Jpne 1, 1934.


Cameron Ross McIntosh: For a copy of all correspondence, letters and telegrams exchanged between any person in Spiritwood, the Spiritwood district or elsewhere, and the department of the Postmaster General, regarding the management of the post office at Spiritwood. Saskatchewan, since September, 1930, to April 1, 1934; also a copy of the report of the inspector of the department who made a special investigation in connection with the management of the said post office during the month of February or March or any other month during the year from June 1, 1933, and June 1, 1934.


Cameron Ross McIntosh: For a copy of all correspondence, letters and telegrams exchanged between any person ill Medstead, Medstead district or elsewhere, and the department of the Postmaster General, regarding the management of the post office at Medstead, Saskatchewan, during the past year; also a copy of any report made by an inspector of the department who made a special investigation in connection with the management of said post office any time between June 1, 1933, and June 1, 1934.


Richard Bedford Bennett: In view of the terms of
these notices of motion, three in number, standing in the name of the hon. member for North Battleford (Mr. McIntosh), I should like them to stand because they are asking for letters from unnamed persons, and one can easily realize how difficult it will be to prepare such a return when you have not the names of all the persons in the particular district who have communicated with the department. In the closing lines of these notices another question is raised to which I should like to speak when the hon. member is in his place. At present I would ask that the notices of motion stand.
Notices of motions stand.



PRIVILEGE-MR. WEIR (MELFORT)

Hon. ROBERT WEIR (Minister of Agriculture) :: Mr. Speaker, I rise to a question
of privilege. In this connection I regret that the hon. member for North Battleford (Mr. McIntosh) is not in his seat but I feel I cannot delay the matter. It is reported on page 3613 of Hansard of Friday, June 1, 1934, that the hon. member for North Battleford stated as follows:
Last year the minister contended that the Anglo-Saxons were the only people in the north: he suggested that the Mennonites, the French, the Belgians, the Scotch and the Welsh and others were not people, but merely political cattle.
I was listening very closely to the hon. member for North Battleford and I did not hear him use the words "but merely political cattle." I asked some of my colleagues if they had heard these words used and they stated definitely that they had not.
On checking up the typewritten copy of Hansard I found that the words "but merely political cattle" had been written in with a red pencil, and that there had been a period after the word "people." Upon inquiring of the staff of Hansard I was informed that those words were not in the reporter's notes and the reason they were inserted was that the hon. member for North Battleford instructed Mr. Young, associate editor of debates, that he had used these words and insisted that they be inserted.
The hon. member for North Battleford was referring to a statement that I had made in the house, as set out in revised Hansard at page 5280 of May 22, 1933, wherein referring to the Mennonites I stated as follows:
I had the privilege and pleasure of working throughout that whole district for years as a school inspector. I know many of these people personally and they take second place to none.
On the same date in the same debate, with reference to the French, I stated as reported on page 5290 of Hansard:
There is no hon. member in this house or out of it with a higher estimation of the fine qualities of our French-Canadians and of the French in the old land than I have.
On the same page in referring to these people I referred to "French, Ukrainian, Scandinavian and other people who live in harmony, and are doing everything they can to make that one of the best sections in Canada."
In view of my opinion so expressed, therefore, the words allegedly inserted are so insulting that had I heard them used I would have insisted at the time that they be withdrawn. Having checked up unrevised Hansard and having consulted my colleagues present in the house, who state definitely they did not hear the words used, I would ask that the four words "but merely political cattle" be stricken from the record.


Pierre Édouard Blondin: In the absence of the
hon. member for North Battleford I think the matter had better stand. In any event it is not one in which the Speaker can give a ruling. I suggest that it ought to be referred to the select standing committee on the official report of debates.
3G24
Privilege-Mr. Heaps


Richard Bedford Bennett: Mr. Speaker, I think this matter goes much further than that. In my opinion it should be referred to the committee on privileges and elections.


William Lyon Mackenzie King: I think possibly it would be well to hear the hon. member in the first instance.


Richard Bedford Bennett: I quite agree that the matter should not be dealt with now in the absence of the hon. member.



PREVENTIVE SERVICE SEARCHES

[Stage Direction]
On the orders of the day:
Hon. R, C. MATTHEWS (Minister of National Revenue): A few days ago the hon. member for Sherbrooke (Mr. Howard) asked me a question. He wanted information as to whether the Department of National Revenue or the minister had issued instructions to the preventive service to hold up and search cars of private citizens on the 24th of May on the roads all over the eastern townships.
In reply I may say that no such instructions were issued by the department or the minister.

[Stage Direction]
On the orders of the day:
Mr. A. A. HEAPS (North Winnipeg):: Before the orders of the day are proceeded with I wish to refer to the proceedings of Friday afternoon when the estimates of the Post Office Department were before the committee. I observe on page 3885 of Hansard it is stated that the item was agreed to, and I presume that refers to the last item in the estimates of the department. I was under the impression that when the chairman of the committee stated that the item was carried several members on this side of the house rose in their places, I being one, and said "No." Now the proceedings record that item as carried, but it will be observed that the discussion proceeded after that, I along with others being under the impression that the item had not carried. It will also be observed that subsequent to that report in Hansard and the chairman making that notation on the records of the house, the Postmaster General himself stated that he was to give the same evening information in connection with the estimates, all of us being under the impression that the item was still before the committee.
If that is the last item in the estimates it means that we shall have no further oppor-
[Mr Speaker.]
tunity of discussing the question, owing to a mistake in the records of the house. I do not know what can be done to change it, but I hope that the Postmaster General will have no objection to allowing the matter to be reopened at a subsequent date.


Richard Bedford Bennett: The hon. gentleman will have the most ample opportunity for further discussion when the bill founded on the resolutions is in committee of the whole and in committee of ways and means. He will have the most ample opportunity to discuss any item in the estimates that he may desire.


Abraham Albert Heaps: That is not the point. What I am trying to point out is that the chairman of the committee, perhaps through some misunderstanding, claimed and put on the records of the house that this item had carried when in fact it had not carried, and the discussion proceeded just as though the item had not carried.


Pierre Édouard Blondin: As pointed out by the Prime Minister, the hon. member will have ample opportunity later to address himself further to the item. The item was carried on June 1, and is properly so entered in the proceedings as taken down by the clerk. And the Hansard report verifies the record kept by the clerk.


Abraham Albert Heaps: But on a point of order may I point out-


Pierre Édouard Blondin: It is out of order to speak further on the subject. The hon. member will have ample opportunity to discuss the matter before the committee. Meantime the records of the house will stand as they are.


Abraham Albert Heaps: But what I want to point out, if I may-


Pierre Édouard Blondin: Order.


Abraham Albert Heaps: On a point of order, is it not possible that in noting the proceedings of the committee the chairman of the committee himself may have made a mistake?


Pierre Édouard Blondin: In this case he is correct.


Abraham Albert Heaps: If it is correct can you inform me why the discussion continued after the item was carried?


Some hon. MEMBERS:: Order.


Pierre Édouard Blondin: Order.


Mr. VENIOT:: If I may be permitted a
word regarding that question, I think it was wrong to say that the item was carried.

Privilege-Mr. Heaps
Hansard reports the item carried, that is i;em 21, which we were dealing with at that time, and we went on afterwards to items in 't;e general estimates. That was civil government. In the general estimates item 256 is divided into three parts. We were dealing with the three items separately, and when six o'clock was reached the hon. member who has raised the question of privilege was on his feet. I remember quite distinctly that when the chairman left the chair at six o'clock I felt sure the item had not been carried, that is 256 including all three items. We were discussing salaries and allowances, and mail services and so forth, mixing up the two. I crossed the house and said to the Potmaster General, " Your estimates will go through hurriedly after six o'clock, perhaps within half an hour." I was anxious myself to have the estimates go through, and with that in mind I crossed the floor to the Postmaster General, but he informed me that the items were all through, the chairman had said, " Carried." The Postmaster General was under the impression that his estimates had been carried.


Mr. SAUVE:: Yes, exactly.


Peter John Veniot: I then went to the chairman before he left the chamber and asked him whether these items were carried, and he said yes. The clerk assistant looked at the record and informed me that on the table record, the scroll, it was marked " Carried." I had my doubts whether it was carried. Then the matter came up afterwards in discussion with the hon. member for North Winnipeg (Mr. Heaps) and I told the hon. member that it was marked "Carried" on the scroll, but the item carried is not the item in dispute at all.


Pierre Édouard Blondin: There is no point in
elaborating the question any further, but if the hon. member will turn to page 3871 of Hansard, he will find that the whole item is reported, and that the whole item was under discussion according to the record. In any event, the chaii'man of the committee called it carried, the clerk who was taking the record put it down as carried and it has been carried.


Mr. G. G. COOTE (Macleod):: I think,
Mr. Speaker, that in this case the liberties of the house are perhaps challenged, and I would ask Your Honour whether the chairman of the committee can declare an item carried while members are discussing that very item. Is that the position the house is being placed in by the happening of Friday afternoon?
The Speaker of the house is charged with looking after the liberties of the house and seeing that they are not infringed upon. I think the member who was acting as chairman of the committee simply made an error in calling the item carried. We do not wish to set up a precedent here that will enable a chairman at any time to declare an item carried and so prevent discussion.


Richard Bedford Bennett: I think, Mr. Speaker, that the only method by which a matter of this kind can be dealt with is by formal proceeding. As far as the records of this house are concerned they show that the item was carried. They show further that the report of the committee was adopted. That being so, formal proceedings would have to be taken to vary the records. Assuming there may have been some confusion at the moment, after hearing the hon. member for North Winnipeg I have just indicated to him that no prejudice could possibly follow for he would be afforded opportunity to discuss the item which he says was prematurely passed or recorded as passed when it should not have been. I think where no prejudice has been done there is no necessity to resort to any formal proceedings, but if anyone were prejudiced by the action that has been taken there are means that can be resorted to, although they are somewhat formal in their character, for the purpose of seeing that the prejudice is removed from any hon. member of the house. I bear out what the hon. member for Gloucester (Mr. Veniot) has stated; I was not in the house in the afternoon, but just as the house rose he informed me that the post office estimates would be disposed of the next day, because he was going to make just a brief review of the situation. As I see it from the records, that is what did transpire and the report of the committee was made. For that reason I do not think the rights of the house have been affected; no prejudice has been done, and the hon. member will be afforded an opportunity to discuss the item when the house is in committee on the bill founded on the resolutions.



COURTS OF ADMIRALTY

[Stage Direction]
Hon. HUGH GUTHRIE (Minister of Justice) moved the second reading of bill No. 88, respecting courts of admiralty.
He said: Mr. Speaker, I think it would be well if I offered a word of explanation in regard to the object and scope of the proposed
3G20
Courts of Admiralty
[Stage Direction]
measure. There is a very useful and full explanatory note on the reverse side of page 1 of the bill.
Admiralty jurisdiction, as established in the Dominion of Canada, will be found at the present time in chapter 33 of the revised statutes of Canada, and that jurisdiction is founded upon the limitations imposed or the permission granted to what in the early days were colonies and are now dominions to pass acts in conformity with certain acts passed by the parliament of the United Kingdom in regard to the subject of admiralty law and the jurisdiction of the courts of admiralty throughout the empire. The acts of the United Kingdom upon which this jurisdiction was originally founded were those passed by the parliament of Great Britain in 1840, again in 1861 and again in 1890, as well as the most recent consolidation of the various courts of admiralty acts in the act known as the Supreme Court of Judicature Act, passed in 1925.
The admiralty jurisdiction established in this country under chapter 33 of the revised statutes of Canada was so established in the year 1890, and it has continued in force for the last forty-four years with very slight amendments. However, it will be remembered that at the imperial conference held in 1927 a review was made not only of the admiralty and merchant shipping acts but also of the Colonial Laws Validity Act, and at that conference it was agreed that a special committee should be set up to consider the operation of these acts in regard to the various dominions constituting the British Empire. A new constitutional status was established as between the United Kingdom and the various dominions of the British Empire at the conference of 1927, and the report of that conference was subsequently carried into effect at the conference which met in London in 1930. In the interval the special committee which had been set up in 1927 went exhaustively into the question of shipping and also into the question of administration of the admiralty law throughout the British Empire. My hon. friend from Quebec East (Mr. Lapointe) was a member of that special committee which sat in London in 1929, and the report of the committee was formally adopted at the imperial conference in 1930.
At the Imperial Conference of 1930 it was also decided to adopt a new constitutional act to be known as the statute of Westminster for the purpose of confirming the conclusions which had been reached at the

conferences of 1927 and 1930. In 1931 the statute of Westminster was passed by the parliament of the United Kingdom, and in the following year a similar statute was passed by this parliament. The effect of the adoption of that statute both in Great Britain and in Canada has been to extend the jurisdiction of the Dominion of Canada, to make it practically co-extensive with the jurisdiction of the parliament of the United Kingdom in respect to admiralty laws and the establishment of courts of admiralty throughout the British Empire. It is to be noted that in the report made by the special committee in 1929 it was emphasized that so far as possible there should be uniform jurisdiction and procedure in all admiralty courts throughout the British commonwealth, subject, however, to such variations as might be required in matters of purely local and domestic interest. In the drafting of their bill it has been sought to make the admiralty law of Canada conformable to the admiralty court legislation of Great Britain as set out in the act passed by the parliament of the United Kingdom in 1925, which is the latest enactment of Great Britain on the subject; and it has also been the object of the draftsmen of the present measure to make such special provision as may be necessary in regard to matters of purely local and domestic interest in regard to the administration of admiralty law in the Dominion of Canada.
I may say that this bill has been prepared by the law officers of the Department of Justice, and great care has been exercised in its preparation. It was introduced originally in the Senate of Canada, where it was given very grave and careful consideration. The Senate made an exhaustive examination of the various clauses of the bill, passed the measure and sent it to this chamber for consideration. I am aware, of course, that a great many hon. members of this chamber are not very familiar with admiralty law or admiralty courts; those of us who live in the inland parts of Canada have little experience either with admiralty law or with admiralty courts, but having given the bill the best attention I am able to bestow upon it, and having obtained advice from men well qualified to offer opinions in regard to such matters, I am satisfied that the present measure very comprehensively embodies the admiralty laws of Great Britain and provides for their application to the Dominion of Canada with such alterations and variations as may be necessary to ensure that all local and special interests pertaining to the Dominion of Canada have been safeguarded.

Indian Act
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Hanson (York-Sunbury) in the chair.
Section 1 agreed to.
On section 2-Definitions.
Mr. HANBURY:: I should like to know
whether there will be any change in our Canadian judiciary as a result of the carrying out of this legislation?


Mr. GUTHRIE:: Yes, there are some
changes. For instance, at the present time the Exchequer Court is empowered to administer the admiralty law in the Dominion of Canada. Both judges of that court, there being a chief and puisne judge, have jurisdiction. At the present time, in the case of an appeal such appeal may be heard by either one of the judges of the Exchequer court. Under the present bill the two judges will have to hear appeals. In the case of the absence or the inability of one judge to be present power is given for the appointment of an ad hoc judge to be called in for that purpose, in order to make a court of two judges. There are some changes of that kind, although there are not many, and they are not important.


[Stage Direction]
Section agreed to.
Sections 3 to 10 inclusive agreed to.
On section 11-Governor in council may constitute admiralty districts.
Mr. BLACK (Yukon):: In regard to section 11, may I ask the minister whether the admiralty districts already established by order in council are interfered with by this act, and whether they will have to be reestablished?


Hugh Guthrie: This is precisely the same allocation of admiralty districts as appears in the present act in the revised statutes. There has been no change.


[Stage Direction]
Section agreed to.
Sections 12 to 38 inclusive agreed to.
Schedule A agreed to.
Bill reported, read the third time and passed.

[Stage Direction]
Hon. THOMAS G. MURPHY (Minister of the Interior) moved the second reading of Bill No. 90, respecting the Caughnawaga Indian reserve and to amend the Indian Act.
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Hanson (York-Sunbury) in the chair.
On section 1-Acts and proceedings validated.
Mr. STEWART (Edmonton):: Would the minister explain the object of this bill?


Richard Bedford Bennett: It is to validate an illegal order in council.


Mr. MURPHY:: If the ex-Minister of the Interior will turn to my remarks as reported in Hansard when the bill was introduced on June 1 he will find there a full explanation.


Charles A. Stewart: Two or three words would settle the whole matter. The Caughnawaga band of Indians has been particularly difficult to deal with. I do not ask for a long explanation.


Charles Murphy: On March 5, 1889, the
Caughnawaga band was brought under part 2 of the Indian Act by order in council. The order provided for six sections or divisions of the reserve under the provisions of the act, section 167, which provides for the division of the reserve into sections not exceeding six, containing as nearly as possible an equal number of voters, or if the Indians so desire, only one section may be constituted. Subsequently on July 12, 1906, at the request of the Indians a further order in council changed the six sections to one. Since that year elections for councillors have been conducted annually under the latter order in council. That is to say, the councillors for that reserve have been elected at large rather than for the six sections. It now transpires that that second order in council was illegal and the legislation now before the house is merely for the purpose of validating the acts which have been done since that time down to the present, and to amend the section so that the superintendent general may have the elections in that reserve carried on either for the six divisions or for the reserve as one division, as may be wished.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
Bill reported, read the third time and passed.

[Stage Direction]
Hon. R. C. MATTHEWS (Minister of National Revenue) moved the second reading of Bill No. 89, to amend and consolidate the Excise Act.
William Lyon Mackenzie King: I do not wish to oppose the second reading of this bill and I rise only to ask the minister if he would
Excise Act

draw the attention of the house to such of its provisions as may be in the nature of amendments to existing acts. Most of the measure is a consolidation, and if there is anything substantial in the was7 of additions I should be glad if the minister would indicate what there is. The hon. member for North Waterloo the ex-Minister of National Revenue (Mr. Euler) is not in the house to-day. While I do not wish that circumstance in any way to delay the proceedings, and I am sure he would not, if when we are in committee we come to clauses to which exception is likely to be taken I would be glad if the minister would allow them to be held over until the ex-minister is in his seat.


Mr. MATTHEWS:: Mr. Speaker, that will
be quite agreeable to me. I might say to the right hon. gentleman what I intended to say if I had made an extended explanation, that there are three rather radical changes in the bill. My right hon. friend asked me on the first reading if there were any new sections, and I intimated to him that there were none of any great moment, having in mind that the principal changes have already been made known to the house by the Minister of Finance when his budget proposals were under discussion.
The three principal changes are as follows. First, the gallonage tax on beer imposed by the Special War Revenue Act is being repealed, and the existing duty on malt is being increased.
The second change is that the tax imposed by the Special War Revenue Act on malt syrup suitable for the brewing of beer is being repealed and converted into a duty of excise.
The third change is the setting up of a schedule or tariff of excise duties which will be very convenient for purposes of reference. That appears on the last pages of the bill.
For the convenience of the house the existing act with all the consolidated amendments is printed in extenso on the right hand pages of this bill, and as far as possible the corresponding sections of the amending bill will be found directly opposite to the old sections. I shall be glad, Mr. Speaker, to discuss these changes and others of a minor nature when the relevant clauses are before the committee.


[Stage Direction]
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Hanson (York-Sunbury) in the chair.
Sections 1 to 8 inclusive agreed to.

On section 9-Minister may refuse or suspend licence.
Wilfred Hanbury: Is there any change in the licensing of breweries or distilleries?


Robert Charles Matthews: Section 172 deals with that. There is no essential change.


[Stage Direction]
Section agreed to.
Sections 10 to 69 inclusive agreed to.
On section 70-Forfeited goods.
Wilfred Hanbury: It has come to mj7 knowledge that many automobiles have been seized in the past and that in many cases when they have been advertised for sale there has not been sufficient publicity so that many people in the area are unaware of the *sale, with the result that many automobiles have been sold at ridiculously low values. Some provision covdd be made by the department to ensure that the general public have greater knowledge of these sales and it would also be in the interest of the public that a valuation should be placed on these automobiles and that they be not sold as I have heard they have been in the past not of necessity to political friends but to friends of seizing officers who probably insert the notice in some little country newspaper and then tell some of their particular friends that if they would be present at the sale they would not be likely to have much competition.


Mr. HACKETT:: Does that not come under the Customs Act and not under this one?


Wilfred Hanbury: I leave that to my hon. friend. I am just making my representation to the minister. I think that is a condition that should be corrected.
Mr. MATTHEW'S: I am advised that in case of a seized automobile two or three weeks' notice is given by advertising in the local or city papers in Toronto or Montreal, and invariably the highest tender is accepted. If my hon. friend knows of any irregularity I would be very glad if he would report it to me.


Wilfred Hanbury: I am not suggesting to the minister there has been irregularity, but my understanding of the matter is that these seizing officers sometimes when they come on a very valuable car do not give to the sale the publicity that they otherwise would. Further than that, I think in order to meet that situation it would be advisable to place an upset price on such a car. I realize that

Excise Act
is not always an easy matter, but there is no question some of these officers have been taking advantage of their knowledge and position to see that their friends, and in some cases their own relatives, get an automobile at much less than the department would desire.


Robert Charles Matthews: Can the hon. member give me a case?


Wilfred Hanbury: I have no particular case in mind but I understand this is a more or less general practice.


Mr. BOUCHARD:: In support of what the hon. gentleman who has just taken his seat has said, it was rumoured in my district-I have no particular case in mind; I have not had time to look into the matter and it is always difficult to get the facts of a case like that-that in one instance some people closely connected with the customs officers were given a chance to buy cars at a very low price. I do not mean there is anything irregular but there is at least a carelessness that should be remedied as soon as possible.


Mr. MERGIER (St. Henri):: As regards the advertisement of the date of sale of a car by the department, could there be a notice posted up on public buildings in Montreal so that every body might see it?


Robert Charles Matthews: The date of sale is invariably posted and in large cities we get a valuation on the car before it is sold.


John Thomas Hackett: Just the other day I received a complaint that automobiles seized, I think it was under the Customs Act, had been destroyed because the upset price was too high. This suggestion was that the government should take a lesser price rather than destroy the automobiles and receive nothing for them. I have never heard of any complaint under the Excise Act but I have heard of complaints under the Customs Act of the kind I have just related to the committee.


Paul Mercier: Where is the auction of such cars held in Montreal?


Robert Charles Matthews: The cars are seized and sold in Montreal.


Paul Mercier: What about the date of sale?
Mr. MATTHEW'S: The date and place of sale are posted; they are well known.


Paul Mercier: When did the last sale take place, and where? I am asking this just for information; I have no grievance.


Robert Charles Matthews: I am sorry to have to say that we are selling cars every week.


Paul Mercier: In the department in Montreal?


Robert Charles Matthews: Yes.


[Stage Direction]
Section agreed to.
Sections 71 to 118 inclusive agreed to.
On section 119-Minimum penalty.
Paul Mercier: This section says that the courts shall have no power to suspend sentence. Is that a new provision?


Robert Charles Matthews: No, that is not new.


[Stage Direction]
Section agreed to.
Sections 120 to 123 inclusive agreed to.
On section 124-penalties belong to crown.
William Lyon Mackenzie King: Would the minister explain the significance of that section?


Robert Charles Matthews: This section, which corresponds to section 133 of the existing act, has been rewritten, to bring the Excise Act in line with the practice long ago adopted under the Customs Act of paying for information received, if such information results in conviction and the imposition of penalties; even if for various reasons the net proceeds may be a loss, that is if the fine is not paid and the convicted person prefers to serve time, or the expenses exceed the amount realized.


Charles A. Stewart: Is it the intention to pay an officer of your own department as well as an informant?


The CHAIRMAN (Mr. Hanson, York-Sunbury):: It is in the discretion of the
minister.


Robert Charles Matthews: Yes, both officers and informants.


Charles A. Stewart: That is, you are going to pay an official of the department who is under salary for getting information that will lead to conviction, in other words for carrying out his duty?


John Thomas Hackett: That is the rule that has obtained under the Customs Act.


Wilfred Hanbury: That does not make it right.


Robert Charles Matthews: This system has obtained under the Customs Act since confederation.


Charles A. Stewart: I know it has but I do not like it. I am strongly

Excise Act

opposed to it. If you are paying a man to do a job he ought to do it; his remuneration should not depend upon his success in getting convictions.


Mr. BOTHWELL:: Just a few days ago the papers carried a report of a case in British Columbia in which the magistrate commented on this question of moiety. It seems that some plainclothes men or stool pigeons or whatever they are called planted or sold certain liquor to perhaps a restaurant keeper, and then gave information to the police that this particular storekeeper or whatever he was had this liquor in his possession. A policeman found it there and the man was charged with having spirits illegally on his premises. According to the statement of the magistrate in that case this was done simply for the purpose of getting a share of the fine, getting this moiety. I believe the section which permits things of that kind being done should be seriously considered before it is re-enacted.


Robert Charles Matthews: The power given under this section is discretionary. I shall be glad to let it stand, and give it further consideration.
Section stands.
Section 125 agreed to.
On section 126-Regulations.


William Lyon Mackenzie King: There is an important departure here, if I read this section aright. It says that:
The minister may make such regulations as to him seem necessary or expedient for giving effect to any of the provisions of this act.
Formerly, I understand, the governor in council made the regulations. Apparently the power is now being given to the minister. I know that a time does come when some power has to be delegated, but it seems to me that this matter of the delegation of power to a minister should be considered very carefully, because the public generally will be affected by regulations which the minister makes. Other departments of the government will also be interested in and affected by them. It seems to me that it is a mistake to take this power of making regulations out of the hands of the governor in council and give it solely to the minister. I wish the minister would tell us why he has found it necessary to seek to change the act in that particular.


Robert Charles Matthews: Section 126 corresponds to section 135 of the existing act. It has been rewritten to confer upon the minister the general power of making administrative regu-
lations. The existing section confers that power upon the governor in council, in addition to the powers proposed to be conferred upon the minister by the bill to declare the true intent of any of the provisions of this act. This bill omits this, and also omits as redundant, in view of the general power to make regulations, the specific power to make regulations for warehousing and so on. Throughout the bill the draftsmen have proceeded on the basis that administrative regulations can be made departmentally, that is by the minister, more conveniently than by the governor in council. Such regulations must of course, be confined strictly to matters of administration-


Wilfred Hanbury: It does not say so.


Robert Charles Matthews: -the powers of the minister to regulate being confined to giving effect to the provisions of the act.


William Lyon Mackenzie King: What the
minister says only confirms what I said as to the intent of the change; it is to take away from the governor in council and give to the minister himself the power of making the regulations that may be necessary under this act. From confederation up to the present time that is a power which has rested with the governor in council and has not been delegated solely to the minister. In connection with section 126 one must, I think, read section 128:
All regulations made under this act shall have the force of law. and the person guilty of any violation of any regulation shall be subject to such penalty or forfeiture as by this act is provided.
In other words, under this compilation, which is in part a revision of and in part an addition to existing acts, we are being asked to give to a single minister of the crown the power to make regulations which involve penalties in the nature of fine and imprisonment. That is the very thing that we have been protesting against so strongly all through this session, with respect to the marketing bill and other legislation, that power is being taken first of all from parliament and given to the governor in council and then where formerly entrusted to the governor in council is taken from the governor in council and entrusted to a minister.
I have made reference at different times to a report of the royal commission appointed in Great Britain, about five years ago I think, to consider this whole question of the delegation of power to ministers of the crown. That commission went very fully into the kind

Excise Act
of matters which we are being called upon to deal with here. I recall that one of the comments of the commissioners was that officials like to get into their own hands the power to make regulations, and the report uses words similar to those the minister himself has used, that this is so because it is more convenient for officials to have the making of regulations in the hands of their own ministers, than to be obliged to have the minister obtain the approval of the governor in council. But the matter of excise deals with taxation, and with respect to taxation I submit that the power of complete control should not be removed from the House of Commons to any further degree than is absolutely necessary. There is a certain safeguard to the ministry itself in having these regulations come before the governor in council for approval. I know that time and again during the period when the late Liberal administration was in office regulations which were recommended by the Department of National Revenue came before the council for consideration. On many occasions very strong reasons were pointed out as to why the proposed regulations should not be made, either for example by the Minister of Agriculture, the Minister of Labour, the Minister of Trade and 'Commerce or as was most frequently the case the Minister of Finance. I do think that in these matters that are certain to some extent to affect taxation the governor in council ought to have supervision over the regulations. I believe they should be approved by the governor in council and should not be left to the minister. I would ask that this section be allowed to stand.


Hugh Guthrie: There is only a very
slight change in the law as it has been for many years.


William Lyon Mackenzie King: It is the
change of a word, but in principle it is a
tremendous change.


Hugh Guthrie: There is no change in
principle at all that I can see.


William Lyon Mackenzie King: The previous
act required that these regulations should be passed by the governor in council. Now it is proposed to allow the minister to make the regulations instead of the governor in council. Any regulations made by the minister himself are to become part of the law of the land. It is hard enough to-day to keep track of what the law is as respects matters relating to the Department of National Revenue without leaving it in the power of the minister to make the law from day to day. The 74726-230J
governor in council will be some check on regulations; if it is left to the Minister of National Revenue himself no one will know what the law is from hour to hour.


Hugh Guthrie: I would direct my right
hon. friend to section 137 of the present act:
All regulations made under this act, whether made by the governor in council or departmental-
The department could make regulations, and a breach of those regulations would render the person liable to a penalty.


Charles A. Stewart: Quite so,
but my hon. friend knows perfectly well that all regulations were subject to the scrutiny of the treasury board, and that later they were passed as a general order in council.


Hugh Guthrie: I do not think so.


Charles A. Stewart: I have a
very vivid recollection of it. Look at section 127, where drawbacks are involved. Here you are passing to the minister the power to cany on under his own supervision, without reference to anyone, the passing of regulations and the carrying out of those regulations.


William Lyon Mackenzie King: I would add
in further reply to the Minister of Justice that one has only to take the explanation given by the Minister of National Revenue as to what is being done by this section. In reply to my question the minister said the section was designed to take away from the governor in council and put in the hands of the minister the making of these regulations. That is what he said. I submit that this power should not be given to the minister, that it is not in the public interest to do so. I am sure if the minister has a chance to consider the matter more carefully with his colleagues, this power will not be taken away from the governor in council.


Robert Charles Matthews: I am quite prepared
to let this section stand.
Section stands.
Sections 127 and 128 stand.
Sections 129 to 139 inclusive agreed to.
On section 140-Excise duties on spirits.


William Lyon Mackenzie King: Are these some new duties?


Robert Charles Matthews: No.


[Stage Direction]
Section agreed to.
Sections 141 to 154 inclusive agreed to.
Excise Act
[Stage Direction]
On section 155-All spirits to be warehoused.
William Lyon Mackenzie King: I notice that from here on there seem to be a number of instances where power apparently is again being taken away from the governor in council and given to the minister. Looking at section 155 it would seem to me that as respects the class of matters there referred to there might be justification for allowing the minister or the department to make the necessary regulations they seem to relate only to the business of the bonding of warehouses. Undoubtedly that is the sort of thing with which the governor in council should not be troubled, beyond approving the general course to be followed. On the other hand, in other sections of the act power is taken away from the governor in council and given to the minister and his officials to make regulations which may affect the revenues of the country. There I think great care should be taken to see whether this transfer of power is justified in the first instance. What I should like the minister to do if he will on these sections that transfer from the governor in council to the minister power to make regulations is just to direct the attention of the committee to those sections and give his reasons as to why it has been thought advisable to take power into his own hands instead of leaving it with the governor in council, as it has been in the past.


John Thomas Hackett: Under this section subsection 6 is the only clause granting that power.


William Lyon Mackenzie King: I am not taking exception to section 155, but in regard to this section I should like the minister to indicate why he has taken power in the matter of making regulations for vatting, blending and so forth.


Robert Charles Matthews: That is purely administrative and in my opinion the power should be given the minister to make these regulations.


William Lyon Mackenzie King: The minister
used the word "administrative" as though everything administrative should be in the hands of the minister. Administration is part of the duty of the governor in council as well as of individual ministers. The point I wish to make is that in the public interest it is wholly desirable that in most matters of administration all members of the cabinet should at least have knowledge of regulations that are being made, especially where they are likely to affect the public interest or several departments of government. That is 
particularly so with regard to matters which relate to revenue, duties, abatements of duty, and so forth, as well as to matters that may have a vital bearing upon policies, the tariff policy and the like. In every instance where the power to make regulations has been removed from the governor in council and given to the minister, the minister should justify the change Which places this power in his own hands. We might let this section stand.
Section stands.
Section 156 stands.
Sections 157 and 158 agreed to.
On section 159-Bottling spirits in bond.


William Lyon Mackenzie King: Stands.


John Thomas Hackett: Is not that section so
much like subsection 6 of section 155 that it could be carried?


Wilfred Hanbury: It was not carried.


John Thomas Hackett: Subsection 6 has been
carried?


Wilfred Hanbury: No.
Section 159 stands.
Section 160 agreed to.
Section 161 stands.
Sections 162 to 168 inclusive agreed to.
On section 169-Penalties of sale of spirits unlawfully manufactured.


Robert Charles Matthews: An amendment will be proposed to section 169, and is made on the recommendation of the Deputy Minister of Justice, to make it clear, in case of any question arising, that a vehicle in or upon which is found illicit spirits or spirits illicitly removed from premises, subject to excise, is forfeited without regard to the circumstances of the removal or transportation in which the vehicle is engaged.


Mr. RHODES:: At the request of my
colleague I beg to move:
That section 10!) of the bill to amend and consolidate the Excise Act be amended by striking therefrom the words "removing the same" in lines 43 and 44, and substituting therefor the following words "transporting the spirits so manufactured, imported or removed, or in or upon which the same are found."


Paul Mercier: I think there is another amendment to the section. I notice that in line 23 of section 169 the word "one" is underlined.


John Thomas Hackett: It used to be "two."

Excise Act


Robert Charles Matthews: Ye?, that is a reduction of the penalty from S200 to 8100.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Sections 170 and 171 agreed to.
On section 172-Amount of bond.
Wilfred Hanbury: On two previous occasions the minister was asked as to the conditions of bonds. I wish he would place on record what changes there have been.


Robert Charles Matthews: This section corresponds with section 194 of the existing act. The clause "in such sum as the minister may determine but in no case shall such sum be less than 82,000" is substituted for the words, "in the sum of two thousand dollars." as the basis for fixing the amount of.security to be given by licensed brewers. In small breweries 82,000 is probably adequate but as the duty upon malt has been increased it is felt that perhaps in some cases larger bonds may be advisable, to secure the full amount of duty at stake.


[Stage Direction]
Section agreed to.
Sections 173 and 174 agreed to.
On section 175-duties.
William Lyon Mackenzie King: These are new duties are they?


John Thomas Hackett: Yes.


[Stage Direction]
Section agreed to.
Sections 176 and 177 agreed to.
On section 178-Beer brewed for private use.
Peter John Veniot: This seems to be a new section.


William Lyon Mackenzie King: Yes, it is.


John Thomas Hackett: Arising out of the budget.


Peter John Veniot: I understand that section 178 is entirely new.


Robert Charles Matthews: Section 178 takes the place of section 195 in the existing act. It has been rewritten in the interest of clarity and to remove any possible doubt as to the fact that home brewing is a privilege which may be refused, suspended or revoked for cause.


Paul Mercier: Let us suppose that someone would like to brew some wine at his own home,-dandelion wine, for instance-would that come under the same provision? I am referring to wheat or bee wine.


Robert Charles Matthews: This takes away no right of home brewing, but has to do only with the brewing of beer.


Peter John Veniot: The home brewer, no matter what he brews, must have the consent of the collector; is that correct? The position ought to be made clear. For instance, if I wish to brew blueberry or dandelion wine or sarsaparilla, some very healthful preparations, have I to obtain consent?


Robert Charles Matthews: There is nothing in the Excise Act providing for that.


Peter John Veniot: But it is being enforced. People in my county are being imprisoned for making sarsaparilla. I know of an old lady of 78 years who was sent to prison for three months for such offence. The mounted police made the seizure, and there was alleged to be a violation of one of the federal acts; whether it was this one or some other, I do not know. Let me outline a case with which I am familiar, having to do with a woman who was making beer for the household.


John Thomas Hackett: Is that not under provincial legislation?


Peter John Veniot: No, dominion. The mounted police came in and seized it. The young man of the house took the responsibility for the violation and was sent to prison for three months. I must say that I do not know whether the charge was laid under a federal or provincial statute; I must be fair in that regard. The reason a charge was laid was that no permission was given.


Robert Charles Matthews: This section deals with beer. Anyone who wants to make home brew can give notice and receive a letter of consent from the collector.


Peter John Veniot: That is what I want made clear. Once the notice is given, they are all right? Is the minister aware that the provincial authorities of New Brunswick, the liquor control board, will not recognize that permit?


Robert Charles Matthews: I have no information on that.


Peter John Veniot: Suppose the New Brunswick liquor board refuses to recognize that permit and prosecutes?


John Thomas Hackett: It is a case for the courts.


Peter John Veniot: A provincial act cannot go contrary to the federal act.
Air. BOTHW7ELL: Just on that last point, the provinces do say they do not recognize any permit given under this act for making
Excise Act

beer at home. I understand that in some of the provinces instructions have been given by the attorney general not to prosecute in cases where the permit or consent was given. Nevertheless they state that they are not bound by that consent.
I have another question to ask. The minister says that there is nothing in this act to prevent people making choke cherry wine or rhubarb wine or any of the ordinary home made wines in their homes, but a complaint has been made to me that a particular individual served time for having some choke cherry wine that he made at home. He was prosecuted under this Excise Act and sentenced and served his time. I cannot vouch for all the facts, but my informant is reliable and I have no doubt that those are the facts.


Robert Charles Matthews: I have no information on that particular case. I do not know the name or the address or anything except the facts as given by the hon. gentleman.


Charles Edward Bothwell: May I ask if it is the intention of this act to stop that?


Robert Charles Matthews: I shall be very glad to look into any case that is reported to me. So far as making choke cherry or dandelion wine
is concerned, this act does not deal with that at all.


Peter John Veniot: Is it allowed under this act?


Robert Charles Matthews: This act does not touch it at all.


Peter John Veniot: That is not the point. Is it allowed under this act? Suppose I do such a thing, am I liable to prosecution under this clause?


Robert Charles Matthews: No, there is no prohibition whatever in this act of what the hon. gentleman has outlined.


Mr. GANONG:: I think what happens is that a good many people get their permit in good faith, and after manufacturing the home brew or home made wine the provincial authorities step in and will not allow them to have it in their possession. A good many people have been fined in consequence. They think that the dominion permit gives them permission to have this wine.


Peter John Veniot: My hon. friend has stated the case in a very concise way. That is just what is happening. I should like to have this matter straightened out. What is the use of a federal permit permitting the manufacture of home made wine if it is com-

pletely ignored by the provincial authorities? If a federal permit is given, the provincial authorities have no jurisdiction, but a good many people have got into trouble just the same.


Mr. HOWDEN:: If the minister is not
going to reply I should like to say a word about this matter. I happen to be a medical man; I have occasion to be in a great many homes in the district from which I come, and I know it is quite a general practice in the summertime to make choke cherry wine, rhubarb wine and many other wines. Now if that is an infraction of the criminal code, this is a very good place for us to learn about it. I think we should have an understanding here and now just where the responsibility rests in this matter, and whether it is an infraction of the federal law or an infraction of the provincial law or an infraction of any law at all to have this home made wine in your home. I should be very grateful if someone can give me some information on that point.


Robert Charles Matthews: It certainly is not an
infraction of this act. It may be an infraction of some provincial statute of which I have no knowledge.


Peter John Veniot: A provincial statute cannot supersede the legislation of this parliament. The province can make laws governing the disposition, but not the manufacture.


Robert Charles Matthews: I am not responsible,
of course, for acts that are passed by the provinces, and I cannot accept that responsibility. All I say is that we are not imposing any restrictions whatever on the making of wines such as have been described.


Paul Mercier: The provincial officer comes along and seizes that rhubarb or choke cherry wine that has been made at home. The person who desires to make this home made brew applies to the nearest collector, giving notice in writing of his intention to brew, and receives from the collector a letter of consent. But the provincial officer comes along and the provincial law supersedes that permit given by the collector. The making of wine for family use should be put on the same footing in this act as home brew. I contend that the man who is brewing beer for his private use has a special privilege in this country under section 178, and the man who is making home made wine for family use should have the same privilege. He should not be condemned under the law and have to go to gaol.

Excise Act


John Power Howden: Is it necessary to get a
permit from the federal authority in order to make home made choke cherry wine?


Mr. BURY:: Has this section anything to
do with choke cherry wine?


John Power Howden: What we want to know
about are these wines that are made at home.


Ambrose Upton Gledstanes Bury: This section has to do with
brewing beer. Where in the section does the hon. member find any reference at all to
wine?


John Power Howden: The hon. member does
not find any reference to wine in the section, but we are discussing wine because this is the proper time and place to get a statement from the minister on that question.


Robert Charles Matthews: The only statement
I can make is that we place no prohibition whatever on the manufacture of home made wine.


John Power Howden: That is all right.


George Gibson Coote: What constitutes beer under
this act? Is there a definition in the act?


Robert Charles Matthews: Yes, in section 4 on
page 4.


George Gibson Coote: Is there a definition of
wine?


Robert Charles Matthews: This bill does not
refer to wine and contains no definition of wine.


[Stage Direction]
Section agreed to.
Section 179 agreed to.
Section 180 stands.
Sections 181 to 193 inclusive agreed to.
On section 194-Notice of intention to steep grain.
William Lyon Mackenzie King: What is the significance of this section?


Robert Charles Matthews: This section corresponds to sections 216 and 217 of the existing act. The provisions of the existing sections for 48 hours' notice of intention to steep in malt-houses not within a city or town are omitted as unnecessary under modern malthouse practice.


[Stage Direction]
Section agreed to.
On section 195-Duties on malt.
William Lyon Mackenzie King: Are these new
duties?


Robert Charles Matthews: This corresponds to section 219 of the existing act. The rate as set out in the schedule is 6 cents per pound instead of 3 cents, the object of the increase
being to absorb in the excise duty upon malt a gallonage tax on beer imposed by the Special War Revenue Act which, as previously stated, is to be repealed.


[Stage Direction]
Section agreed to.
Sections 196 to 199 inclusive agreed to.
On section 200-Any other process of malting.
William Lyon Mackenzie King: The commissioner is mentioned here. Who formerly performed the function? This provision seems to proceed on the theory that where the old act speaks of departmental regulations the new act specifies either an officer or the minister. Also it would appear that where the old act required regulations to be made by the governor in council this revision turns that power over to the minister. There may be exceptions, but broadly speaking that appears to be the principle.


Robert Charles Matthews: The regulation-making power is vested in the minister as responsible head of the department and the commissioner, as administrative head, is responsible for the promulgation of the regulations.


[Stage Direction]
Section agreed to.
Sections 201 to 215 inclusive agreed to.
Section 216 stands.
On section 217-Conditions of licence.
William Lyon Mackenzie King: This seems to be a new section.


Robert Charles Matthews: There is no essential change.


[Stage Direction]
Section agreed to.
Sections 218 to 220 inclusive agreed to.
On section 221-To be paid.
William Lyon Mackenzie King: This division with regard to duties of excise appears to be new. Are all these sections in conformity with the resolutions?


Edgar Nelson Rhodes: Sections 222 and 223 arise out of the budget resolutions.


[Stage Direction]
Section agreed to.
Sections 222 to 234 inclusive agreed to.
Section 235 stands.
On section 236-Generally.
William Lyon Mackenzie King: I wish to call attention to 236 and then ask that it shall stand. It goes a step further than anything has gone hitherto in that it allows the minister to restrict the sale of goods. It seems as though the government had a policy not only
Excise Act

of limiting production but of restricting sale in as many directions as possible, at all events of putting that power into the hands of the governor in council and ministers of the crown. This bill in that regard is in keeping with some other measures we have had before us this session. For the first time in a bill respecting excise there is being taken away from parliament and placed in the hands of the minister of National Revenue the expressed power of restricting trade by restricting the sale of goods. This is a new feature, allowing the minister of his own discretion to restrict the sale of some goods. I do not care to how small a number or category of goods it may relate, the fact is that it gives the minister power to restrict sales and I object strongly to that power being placed in the hands of any minister or department.
Section stands.
Sections 237 to 241 inclusive agreed to.
On section 242-Duties of excise on manufactured tobacco.


William Lyon Mackenzie King: Is there something new there?


Robert Charles Matthews: There is no change
there. The underlining relates to the duties having been put into the schedule rather than into the body of the bill.


[Stage Direction]
Section agreed to,
Section 243 agreed to.
On section 244-Boxes of cigars to be marked.
William Lyon Mackenzie King: There is something new there again, probably the inclusion of the words:
As is prescribed by departmental regulations.
That term is being used now in this provision for the first time. Perhaps in addition to what I said before, I should have gone on to say that where in existing legislation matters were general, they are now being made more specific. Formerly under some of the sections there have been departmental regulations, the matter being expressed simply as left to the department. It is now specified as being prescribed by departmental regulations.


Robert Charles Matthews: I might point out to
the leader of the opposition that the words underlined-
As is prescribed by departmental regulations, -take the place of these words:
In such manner as is determined by the department.


William Lyon Mackenzie King: That bears
out what I have just said. Under the old act certain matters were regulated by the department; such regulations were looked upon as departmental regulations. In this revision they are now referred to as regulations prescribed by the department. I think there is an improvement there.


[Stage Direction]
Section agreed to.
Sections 245 to 252 inclusive agreed to.
On section 253-Re-working tobacco and cigars.
George Gibson Coote: Is clause 253 new or is there an old section dealing with that?


Robert Charles Matthews: Clauses 253 and 254
correspond with sections 287 and 288 of the existing act. The only difference is that the wording has been slightly changed.


[Stage Direction]
Section agreed to.
Sections 254 to 261 inclusive agreed to.
On section 262-Regulations-by minister.
William Lyon Mackenzie King: This I think
is the proper way of setting forth the powers of a minister to make regulations. Parliament itself defines the class of regulations which the minister should make. I do not think we should give power to a minister to make regulations which do not fall under one or another of the headings which definitely set forth the limits within which the minister's powers shall be exercised.


Paul Mercier: Clause 262
replaces section 304 which reads:
The governor in council may, subject to the provisions of this act, make such regulations-


William Lyon Mackenzie King: Under the old act it was the governor in council.


Robert Charles Matthews: Yes, the word "minister" should be underlined.


William Lyon Mackenzie King: Yes; but what I said a minute ago still applies. If the minister is to be given any powers at all, they ought to be included under a similar clause as regulations specified in it; in addition to powers which parliament has given, he should not be given the right later on to make any regulations he pleases.


Paul Mercier: Stand.
Section stands.
Sections 263 to 283 inclusive agreed to.

Farm Indebtedness-Mr. Bennett
On section 284-Licence for stemmers.


Paul Mercier: Is this a
new clause?


Robert Charles Matthews: Clauses 284, 2S5 and
286 correspond with section 329 of the existing act. It has been rewritten to conform to the other licensing sections of the act and to make it clear that the business of a stemmer includes "casing" which is a term well understood in the trade and is defined in clause 7, paragraph (a) of the bill.


[Stage Direction]
Section agreed to.
Sections 285 to 303 inclusive agreed to.
On section 304-Unlawfully having or selling manufactured tobacco or cigars.
Paul Mercier: Is subclause
4 new?


Robert Charles Matthews: Yes. If loose tobacco
or cigarettes are distributed there is no means of determining whether the packages from which they are taken for distribution have been properly stamped.


Peter John Veniot: What do you mean by "distribute" in subsection 4?


Robert Charles Matthews: Given away.


[Stage Direction]
Section agreed to.
Sections 305 to 320 inclusive agreed to.
On section 321-Commencement of act.
William Lyon Mackenzie King: Is the minister in a position to give a guarantee that parliament will be prorogued by the first day of July? I shall be glad to have this section carry if he is perfectly sure that will be carried out.


Robert Charles Matthews: The answer is no, I am not able to give a guarantee; but I am able to express the wish, in which I hope the right hon. gentleman concurs.


William Lyon Mackenzie King: Perhaps the Prime Minister can give the guarantee, as he is just coming in.
We have before us, Mr. Prime Minister, a section which is to the effect that:
This act shall come into force on the first day of July, 1934.
I was asking the Minister of National Revenue if he can give a guarantee that parliament will be prorogued by that date.


Richard Bedford Bennett: I think, Mr. Chairman, I can readily give a guarantee that the Royal assent will be given to the bill by that date. But with respect to whether or not we have risen, that is another thing altogether. Perhaps the leader of the opposition would give a guarantee in that regard. It always rests with the opposition.


William Lyon Mackenzie King: I will guarantee to work with the Prime Minister to end the session speedily, if he will do so.


[Stage Direction]
Section agreed to.
Mr. CHEVRIER:: I do not want to delay the business, but before the bill carries, might I ask the minister with respect to section 304. subsection 4:
It shall be deemed an offence under the last preceding subsection for anyone to distribute gratis tobacco or cigarettes for advertising purposes otherwise than in packages stamped as herein provided.
So that there may be no misunderstanding, will the minister say under what conditions that may be done?


Robert Charles Matthews: If loose tobacco or cigarettes are distributed there is no means of determining whether the packages from which they have been taken have been properly stamped.


Richard Bedford Bennett: My colleague the Minister of Finance (Mr. Rhodes) has intimated to me that objection has been taken to some clauses that vest in the minister the power of making regulations, the breach of which involves imprisonment. That must be done by the governor in council. The objection taken will be met and amendments made accordingly.


William Lyon Mackenzie King: Then we shall understand that the next time the bill comes up the minister will have amendments to his own act to carry that out?


Richard Bedford Bennett: Yes.


William Lyon Mackenzie King: Substituting
"the governor in council" in all those sections where "the minister" now appears.
Progress reported.



FARM INDEBTEDNESS


[Stage Direction]
Right Hon. R. B. BENNETT (Prime Minister) moved that the house go into committee to consider the following proposed resolution:
That it is expedient to bring in a measure to facilitate compromises and arrangements between farmers and their creditors, to provide for the appointment of official receivers, and for the establishment of provincial boards of review and their remuneration.
He said: I shall accommodate myself to the wishes of the party opposite as to whether or not I make a detailed explanation of this measure now or when the house has gone into
3038	[DOT] COMMONS
Farm Indebtedness-Mr. Bennett
committee. Presumably it would be done better in committee, where questions can be asked and answers given.
The purpose of the bill and the complementary bill which is dealt with in the succeeding resolution is to meet a situation which is one of very grave import to the welfare of the country as a whole. The farming population has experienced great diffiv culties in meeting the obligations which they themselves have created. The purchasing power of the dollar having fallen to the extent to which it has, the difficulty of providing one dollar by the sale of commodities that have been reduced in value to say sixty cents, instead of the dollar that prevailed at the time the obligations were created has made the burden exceedingly onerous, as has been found in practically all countries of the world. I shall deal later with the extent of the mortgage indebtedness on the farms of Canada. It is sufficient for my present purpose to say that as far as we can ascertain from the census of 1931, together with other information available, it is estimated at about S726,000,000, that is in all the nine provinces. Especially in western Canada there has been difficulty in meeting the obligations for interest on the mortgages. I need hardly point out, what is in the knowledge of every member of this chamber, that loans have been made upon farms largely by (a) loan companies whose business is to deal in mortgages; (b) life insurance and other insurance corporations and companies; and (c) private individuals. Obviously the life insurance companies, having to reserve at a rate of interest that is less than four per cent, have perhaps not experienced the same difficulties by reason of the inability of fanners to pay the seven and eight per cent provided for by their mortgages if they could pay anything at all. With respect to the mortgage companies they have not loaned their own capital, but largely funds which they have borrowed. It is of course well known to all that the capital of the loan companies would not go very far in mortgage loans, and that they all obtain funds by the sale of debentures bearing various rates of interest, as I shall presently indicate, which funds they loan in various parts of the country. During the war when higher rates of interest prevailed-that is when it was more difficult to obtain money on debentures-loan companies issued debentures at a higher rate of interest than had theretofore prevailed. More recently, that is since the war, they issued debentures still bearing rather high rates of interest. It is a matter of knowledge to those who have read the annual reports of loan companies that

many of them have issued debentures bearing a rate of five per cent per annum, and that they loan this money at rates of 6i per cent to 8 per cent and more, it being estimated that owing to the losses that have been experienced by reason of climatic conditions the loans that average less than 7 per cent represent, shall we say, no profit to the loan companies.
Private individuals, of course, are able to make their own arrangements with respect to compromises and extensions of time under mortgages they have taken. Life insurance companies, for the reasons I have mentioned, having to deal with present and prospective profits payable by way of dividends to policy holders, are not in quite the same position; they have experienced great difficulties. Loan companies that themselves have interest to meet on the debentures they have issued also have a difficult position to face. Under these circumstances we called together representatives of the insurance companies and loan companies and discussed with them the problem in its many bearings to ascertain if something might be done by which we could afford some relief to those who had imposed upon themselves the burdens and obligations incident to mortgages. It was finally concluded that the suggestions made by the government, from the information which had been obtained, were sound.
The first suggestion was that we should endeavour to secure a cheap and speedy method by which a farmer in difficulty could provide some arrangement or composition with his creditors. It is a well known fact to members of the house engaged in business that under the common law no compromise could be made with a man by his creditors to pay less than one hundred cents on the dollar unless all creditors agreed. Hence it was that before any laws dealing with compositions or assignments were passed, either by provincial legislature or federal parliament, every creditor had to agree to what was called the deed of composition. Later the government of Sir Oliver Mowat, I think it was, in the province of Ontario passed an assignments act, the validity of which was challenged and ultimately determined by the privy council. The provisions of that act contemplated the realization of the assets of the debtor and the distribution of such assets, ratably and proportionately, amongst his creditors, be they many or few. But in upholding the validity of that statute the privy council also indicated that if the dominion occupied that field at any time under the

Farm Indebtedness-Mr. Bennett
exclusive jurisdiction conferred upon this parliament to deal with bankruptcy and insolvency, thereupon the jurisdiction of the provinces would be ousted. Parliament has exercised its jurisdiction and has enacted a bankruptcy act. It therefore follows that the matter dealt with by the provincial legislatures is no longer within the legislative competence of the provincial legislatures and that the bankruptcy and insolvency act which we placed upon our statute books is the statute to which we must look in dealing with the problem of bankruptcy.
Bankruptcy proceedings have been regarded with some suspicion not only by the farmers themselves but also by those with whom the farmers deal, and the question of whether or not the general provisions of the Bankruptcy Act should apply is, of course, an open one. We do not propose, therefore, that the ordinary provisions of the Bankruptcy Act should apply but that for the present-hoping that it will not be for any long period-there should be appointed a special receiver rather than an official receiver such as we now have, whose duty it will be to assist in arriving at a composition, adjustment or settlement of the outstanding difficulties that confront the farmer. To do that we must keep in .mind two things, first, that contracts that have arisen under a mortgage are matters within the jurisdiction, for contractual purposes, of the provinces under property and civil rights; secondly, that the exclusive jurisdiction of this parliament to deal with interest is conceded by all. We therefore propose that an earnest effort should be made to bring about a composition, arrangement or agreement between the creditors of the farmer and the farmer debtor. The result of that would be, having regard to his present assets, his capability to earn, the productivity of his farm and its location, that he could reasonably contemplate the possibility of commencing again if he knew how his debts were to be paid and the period of time over which he would make the payments.
The object, of course, is to keep the farmer on the farm; if possible to keep him ^ cultivating the land upon which he has lived. In making the arrangement we contemplate, through the assistance of those who have loaned him money, it follows of course that we can go only a certain distance in determining how his security can be dealt with. Therefore in dealing with the problem of bankruptcy which thus arises for settlement, we propose that the secured creditor shall value his security and, if he determines that his security is worth eighty per cent of its face
value, that he shall not assert a claim to recover a sum representing the difference between the value he has placed upon his security and the face value of such security. That we believe we have legislative power to do.
There then arises the case of the other creditors and when the other creditors have filed their claims-all of which is to be done in a simple and, shall I say, expeditious, informal and inexpensive way-then the settlement is open for final determination. If it is approved by the creditors and by the representative of the creditors in the person of the one who takes the place of the official receiver or assignee, it is confirmed by the court and the farmer begins once more to undertake to build his home, his fortune and his future. If, however, a deed of composition or adjustment, appears impossible; if the parties are unable to determine whether or not the farmer may be able to meet his present obligations by payment of sixty or seventy cents on the dollar, or whatever the figure may be, we then propose to set up in eaeh province a court of revision consisting of a judge of the court hating jurisdiction over bankruptcy-in the western provinces a judge of the supreme court, in the province of Quebec a judge of the superior court and a judge of the supreme court in Ontario-and he, with the representative of the creditors and of the debtor-that is, one who always represents the debtors as well as the creditors-will consider the whole situation of each specific case, the conditions, the circumstances, the capability of the man to pay having regard to the location of his farm, the size of his family, their aptitude for farming operations, their general attitude towards cultivation of the soil and so on. Having considered all these problems the board of review make a proposal and, after due consideration, that proposal becomes the composition arrangement under which the farmer begins again the struggle for the future.
That, we believe-simple, inexpensive and informal-will bring about, we will say, renewed hope in the minds of those who, for reasons that need not be discussed now, have looked forward to the future with almost hopeless concern. But we have also jurisdiction to deal with another phase of it, as I mentioned a moment ago, namely questions arising out of interest. And so, as the result of experience in the past, we propose that where a mortgage is not repayable, that is where a mortgagor is not permitted to pay off by the terms of the mortgage, nevertheless he may be able by tendering the amount of the principal, together with interest to the
3040	COMMONS
Farm Indebtedness-Mr. Mackenzie King
date of payment, and three months interest- if you desire to use that word-to obtain a discharge of his obligation. I can say from my own personal observations and experience that in many long term mortgages which were negotiated at high rates in days long since past, the inability of the mortgagor to pay his debt has been one of the most fruitful sources of present disaster; for in days when he was receiving large prices for his products he was certainly willing to pay off, but inasmuch as he could not pay unless by paying very great bonuses-and in most instances not at ail-he did not bother to do so. But now, where he thinks he will be able to secure cheaper money we propose that he shall be able to pay off his mortgage if it beam a rate higher than seven per cent, and that on tendering the sum representing the principal with interest, as I have said, to a given date, and three months' bonus, the mortgagee shall be compelled to accept that money to discharge the mortgage, -and if he does not do so, thereafter the rate will be onlv five per cent That is perhaps as far as we can go, because there is some grave constitutional doubt as to the right of a federal parliament to interfere with contracts solely within the jurisdiction of provincial legislatures, under the head of property and civil rights. But as I have indicated we believe we have power to legislate. Now, supplementary to the legislation which I have mentioned there is provided a Farm Loan Act, that is an amendment to the existing legislation which, while it has not been accepted by all the provinces, is in force in many of them. We propose to make some necessary administrative amendments which our experience has taught should be made, and further to authorize the loan of a somewhat larger sum than that provided for by the act, the limit being $7,500, and instead of fixing the amount of the mortgage at fifty per cent to provide for a lesser margin of safety and increase the amount of the mortgage to sixty per cent.
In addition to that it will be observed by many of those hon. members now listening to me that after we have done all these things it is quite obvious that the unfortunate insolvent might not then be in any position to go forward, because he would have no money with which to undertake his work. We therefore propose that the Farm Loan Board shall be authorized, by way of what would amount to a second mortgage, to advance a limited sum, which is mentioned in the act-and a matter which may be considered in committee-to enable a person to provide himself with seed, implements or whatever may be necessary to enable him once more to 
engage successfully in his vocation. And he may make a charge on his personal property, also, as additional security, if so desired.
Roughly, therefore, with the amendments proposed to the Farm Loan Act supplementing the provisions of the legislation which we suggest, we believe that we shall have provided at least some measure of relief to those who are the mainstay and the backbone of any country such as ours. We believe that this legislation, conceived as it is in a desire to assist those who from year to year in days gone by have produced new wealth amounting in all the provinces not to millions but to billions of dollars, will be a step towards keeping them upon the land, which is the first object we have in mind. We are trying to make conditions tolerable for those people who find themselves in financial difficulties, so that they may obtain a new start and remain upon their farms, rather than lose them through foreclosure proceedings, or become mere tenants of mortgagees who have foreclosed and taken .possession. That is the principal object we have in mind, and we 'believe that the bill which will be founded on the resolution represents the exercise of our legislative jurisdiction so far as we may constitutionally exercise it, and that with the legislation which has been passed by the provinces and that which some expressed the desire hereafter to enact., we shall be able to do something to meet the difficulties of the agrarian, and make more tolerable his existence under present depressed conditions.
William Lyon Mackenzie King: Mr. Speaker, I believe I can say that undoubtedly the purpose behind the legislation as outlined by the Prime Minister (Mr. Bennett) will meet with general approval. No one who has the slightest knowledge of conditions in farming communities can do other than, appreciate the fact that large numbers of farmers have incurred liabilities in times quite different from the present, and under the prevailing conditions of the past three or four years have found it increasingly difficult to attempt to meet those liabilities. The result has been that the very hearts have been taken out of many men who have struggled to maintain themselves on the land, men who ^re among the main producers of our country. Any legislation coming within the competence of parliament which seeks to preserve the rights of all parties, and aims by reasonable methods of compromise to meet a situation which in some particulars has become intolerable will, I believe, speaking generally, commend itself to parliament.

Farm Indebtedness-Mr. Coote
I should say, however,-and I base this comment in part on what the Prime Minister himself has said-that I hope the legislation introduced will not be of a .character to raise false expectations in the minds of those whose interests it is intended to serve. I am afraid there may be obstacles as to jurisdiction; in fact, the Prime Minister has himself hinted at that. Those obstacles may be formidable. It would be unfortunate indeed if by virtue of a measure now to be introduced farmers receive the impression that they are likely to obtain substantial relief, only to discover a little later on that, for reasons over which this parliament has no control, hopes have been raised which are false and can not ultimately be realized. If there is any criticism of the measure on that score I hope the government, and particularly those in whose interests the measure is being introduced, will not feel that such criticism is directed against the objects of the measure but rather that it is in the nature of an effort to avert any disappointment which might serve to make the last state worse than the first and which might be prevented if matters are gone into carefully at the present time.
I believe a measure of the scope indicated by the Prime Minister is almost certain to be involved and intricate, and I doubt if it would be wise to attempt to discuss it at length until we have the bill before us. I rise therefore only to say that I believe the general purpose of helping by legitimate means to relieve the financial embarrassment of farming communities will commend itself cordially to all parties in the house.


George Gibson Coote: Mr. Speaker, I am very glad indeed that the government has at last seen fit to bring down some legislation- to deal with this very difficult problem. It is a problem that has been facing us for two or three years, and the government I think would be the first to admit that the problem has been brought to the attention of this parliament on a great many occasions. I would not care to discuss the matter fully at this stage because I think the right time would be when we are in committee, and it may be that the major part of the discussion will have to be left until the bill is introduced.
It does seem to me that in view of the conditions existing in agriculture and the low prices which the farmers have received for their products for the last several years, the legislation proposed, so far as we can gather from the remarks of the Prime Minister (Mr. Bennett) does not go far enough to meet
the existing situation. Might I point out to the house that the index number of prices for farm products generally, as published by the bureau of statistics stood around 100 in 1926, 1927, 1928 and 1929, and fell to 82 in 1930, to 56-3 in 1931, and in 1932 it seems to have averaged all the way from 52 down to as low as 42-7, at which point it stood in December, 1932. The last month which is quoted in the return I have here is May, 1933, when it had risen to 51-2. But that does not tell the worst part of the story; for a large number of our farmers are producing principally field crops and the index number for field crops fell in 1927 to 99, in 1928 to 92; in 1929 it was 93, and in 1930 it fell to 70; in 1931 it fell to 43 and in 1932 it fell as low as 33-6. The farmer was therefore in the position of attempting to carry on with a drop of 65 per cent in the price of his product. He was in a somewhat similar position to that of a man who had been receiving 81,000 a year and had his income cut to 8336 per year. These conditions are responsible for the terrific burden of debt which is resting on our farmers. In many cases farm mortgages bearing interest at eight per cent are now in arrears for as much as four year's interest, and a great many of them for three years' interest. I know of some cases where the interest and taxes have been paid up to the end of 1932. I have one case here in. which the interest and taxes have been paid in full up to the end of 1932, but the interest was not paid in 1933 principally because of a crop failure. There was a frost which froze the wheat in July of that year and there was very little grain to thresh on that farm. The company which has the mortgage, a life insurance company by the way, is insisting on the execution of a crop share lease by the owner of the farm which would give to the company one-half the crop delivered free of all expense to the company to apply on their claim for interest. That is an impossible condition for the owner to live up to, and yet I have letters here from the company to the owner in question insisting that this should be done.
That brings me to one point in respect to which I suggest to the Prime Minister that something should be done in connection with this legislation. Perhaps some change in the bill or some extension of it might be made providing for a reduction of interest rates on existing mortgages. The Prime Minister suggested that it was not clear that this parliament had the power to do that, but we have been told repeatedly by the provincial authorities that they have not the power, that it rests here. The power must rest either in one
Farm Indebtedness-Mr. Coote

parliament or in the other, and I think in view of the years of low prices which the farmers have endured it would be only fair for this parliament to include such a provision in the bill which is to be introduced.
It may be said that the loan companies are not responsible for the low price levels for farm products. That may be, but the farmers are not responsible either. They are the innocent victims. They have no way of protecting themselves against those low price levels. It is true that the provincial governments in many cases have passed legislation protecting the farmers against the loss of their homes through mortgage foreclosures. Sometimes that is called paternal legislation, legislation which has been objected to by banks and by loan companies, but what would be the condition if we had not had this protective legislation? If the protective legislation is to be lifted or withdrawn as a result of the legislation we are passing here, I think that this legislation should cover the cases I have referred to where the interest rates on farm mortgages are as high as eight per cent. It is going to be impossible in many cases for these people to get the amount of the mortgage to tender to the mortgage company so as to get a lower interest rate. I do not think they can get relief in that way. I do not see how it can be done, and therefore while we are attempting to deal with this debt problem we should deal with these cases. Some of these people have kept the interest paid up to date, but it has only been by the hardest kind of struggle, by enduring great privation, by lowering the standard of living of their own family and by doing without hired help and working very long hours. Are we going to leave them in a position where they will have to continue to do that, where they will be, I think it is only fair to say, at the mercy of the company, the loan company or the life insurance company that holds the mortgage? In view of those circumstances I think that before this legislation is passed some extension of it should be made to deal with that particular situation.
I would also like to point out one other matter to the Prime Minister.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


George Gibson Coote: When the house rose at six
o'clock I was about to direct the attention of the government to the difference in the position of the farmer and the ordinary business man in connection with bankruptcy

proceedings. This is the difference. For most business people, bankruptcy proceedings do not affect their homes; as a rule the business man's home is separate from his business property; whereas, in the case of the farmer, in almost every instance the mortgage covers his home as well as his farm land. I suggest therefore that any provision we make for extending to farmers the advantages of bankruptcy proceedings must take that fact into account.
A little pamphlet issued by the Department of Agriculture contains this statement:
Canadian agriculture is essentially made up of farm homes. The common form of tenure is ownership, although this state is decreasing slightly at the expense of tenancy and part tenancy. Still in .Tune, 1931, 586,299 farms or 84.4 per cent of the 728,664 farms in Canada were owned by their operators. Another 67,942 farmers (9.3 per cent) were part owners and part tenants. As a charge on the owned farms in June. 1931, stood mortgages to the amount of $677,564,100. The total farm mortgage debt of Canada at that time is estimated at about $726,000,000. This is not an excessive burden in normal times, but there is evident need for liquidation when farm revenues are so low and when farm products have such a small fraction of their usual purchasing power.
I quote now from a recent work published in the United States by Mead and Ostrolenk, dealing with the plight of American agriculture, and I quote this because it is applicable to Canada as well:
Agriculture has continued its downward course until its products, still flooding in undiminished volume into saturated markets, are selling at the lowest prices in recorded history; until bankruptcy is an almost universal phenomenon; until farm wages have fallen to prc-Civil war levels; until the largest of American industries is prostrate.
Speaking generally, practically the same thing is true of Canadian agriculture. This is very well illustrated by figures I put on Hansard about six weeks ago, in which I showed that in Canada the net farm income was estimated by the bureau of statistics as about $600 per farm, and out of this there must be met interest charges, which we were discussing this afternoon, taxes and all other cash expenditures. That is really at the root of the farm problem.
One of our great farm problems is that of prices of farm commodities. I do not wish to delay the house at this stage because most of what we have to say can be better said when we are in committee; but I would point out in connection with the figures I gave this afternoon in regard to the index number of agricultural products, that for nine out of the last thirteen years farm products have sold at

Farm Indebtedness
a decided disadvantage in relation to the things which farmers have to buy. In December, 1932 the index number of farm products was 42-7 and the index number of field products, 33-6. The figure for retail prices and the cost of services which the farmer has to buy stood, on the other hand, at 80. Interest charge in most instances had not fallen at all but remained fixed, and in many cases it took three times as many products to pay the interest as it did in 1926. The farmer can pay interest and taxes only with his farm products and he has no way of monetizing those products at what he considers a proper level; he can only sell at prevailing prices. The discrepancy in the drop in these different items which I have specified explains the need for legislation such as this, and I can only say in conclusion that we shall have to wait until the bill is brought down to determine whether it is adequate to meet the situation. If it is not I trust that the government will be willing to consider suggestions for widening the scope of the proposed legislation.
Motion agreed to and the house went into committee, Mr. Smith (Cumberland) in the chair.


Paul Mercier: I listened carefully to the explanation of this resolution, and while I know that the resolution speaks for itself, I think the Prime Minister must be aware that the position of farmers in the province of Quebec is perhaps a little different from elsewhere. Most of them have invested money in the large cities. They have saved money and through their agents have loaned it on property in the cities, up to one, two, three or four thousand dollars, sometimes on second mortgage. The property has depreciated, and in most instances the second mortgage has been wiped out. The farmers in that province also own immovable property in the city, and you will find the real estate owner on a small scale with property valued at five or six thousand dollars. He cannot make both ends meet; he cannot pay his taxes, and receives practically none of his rent, even though this has been guaranteed by the city of Montreal and the provincial and federal governments.
This resolution is intended to help the agrarian. Is it not possible to provide in the bill when it comes down for some assistance to people in the cities, not only in Montreal but in the cities throughout Canada, who are trying to save their property? I am not speaking from any political motives when I say that in Montreal, just as in western
Canada, the people to-day are being strangled by debts and taxation, and even those who have invested money in tenements in which they occupy one flat and rent the others, hoping to pay their taxes and improve their property, in addition to saving a little for themselves out of rent, find themselves on relief because they are obliged to wait for their cheques from the city. Those cheques have to be contributed to by the provincial and federal authorities, and the money which these people get from this source is fully needed to pay their taxes. Most of them have been obliged to ask the Montreal civic authorities for permission to pay their taxes in monthly instalments, $30, $40 a month and thus escape the sheriff's sale, and the civic authorities being in need of money are inclined to accept this. Industry and farming are the cornerstones of the nation, and while we are glad that the farmers will be helped by this legislation, the government should come to the assistance of those who own real estate in cities such as Montreal and help them to save their property which otherwise will surely go to ruin.


Richard Bedford Bennett: The circumstances to
which the hon. gentleman alludes are not unknown to the government. The fact is that the small home owner in the cities of Canada has been very hardly hit. In his endeavour to make for himself a home he usually has acquired a lot and then built upon it a house, this being made possible by a mortgage to either a building society or a loan company. Now, with conditions as they are in the cities and with taxes increasing instead of decreasing, he has been unable to find profitable employment to enable him to pay the taxes or the interest on his obligation. The provinces, speaking through their legislatures, have taken steps to deal with one phase of this matter; in most provinces they have provided for a moratorium and no proceedings can be taken to enforce by way of foreclosure claims arising under the mortgages. That is not so in all the provinces, but it is practically true in them all. Over that we have no jurisdiction; that is solely a matter within the competence of the provincial legislature. They have the making of the statutes and limitations; they have the control of the courts; they have the right to determine whether the courts may be used for the purpose of foreclosure or otherwise, and in the exercise of that undoubted power practically all the provinces have gone a very long distance.
On the question of taxes there is nothing that I can usefully say beyond what the hon.
3G44
Farm Indebtedness

gentleman has just said. The only way in which the federal power could assist would be to advance the money to enable the taxes to be paid by the small home owner or to enable him to pay the interest. The control of the matter from a legislative standpoint rests entirely with the provincial legislatures. I should say that the difference between the agrarian and the urban dweller lies in the fact that we are endeavouring to maintain the agrarian upon his farm because he is adding new wealth to the nation. The conditions to which the hon. gentleman refers would not meet that test. On the other 'hand, in the United States where they had ample means, they did deal in part with this question ; they have not dealt with it to the extent which some people would like. We have carefully considered the matter from many angles; we could not make it a part of this bill, but I really do not know any method by which, short of having the ability to produce money and make it available for that purpose, we could deal with the situation. That is the real fact about the matter as it stands at the moment. But the provinces have gone as far as they could to meet the difficulty to which the hon. gentleman has referred.
In view of the fact that the bill to be founded upon this resolution must be the subject matter of discussion, because as the resolution stands it would be very difficult to ask questions and obtain satisfactory answers to them, if the committee is of the will that I think it may be, we can pass the resolution, give first reading to the bill and distribute it so that between now and to-morrow ample opportunity may be afforded for consideration of its provisions. Of course I am ready to answer any questions that in the meantime may be asked on the resolution; but if hon. members refer to the subject matter of the bill, I believe we will accomplish more than by having a vague and general discussion about matters with which in some instances we cannot successfully deal. I am, however, entirely in the hands of the committee.


William Lyon Mackenzie King: I agree with the Prime Minister as to the desirability of seeing the bill before we attempt a discussion of what may or may not be contained in its provisions. I question, however, whether we would be ready to go on with the bill tomorrow.


Richard Bedford Bennett: Quite so.


William Lyon Mackenzie King: Without knowing what is in the bill to be founded on the

resolution, I imagine it will prove to be more complex and involved than appears on the surface. There is one question I should like to ask the Prime Minister before the measure passes the resolutions stage. The latter part of the resolution reads:
For the establishment of provincial boards of review and their remuneration.
Does that mean that the federal government intends to establish boards of provincialwide scope and jurisdiction and to remunerate the officers of each board allowing the province to confer certain powers on the board, or will the boards get all their powers from the dominion?


Richard Bedford Bennett: We confer the powers. The board of review to be established is, as I said this afternoon, one composed of three persons: the representatives of the creditors and the debtor and a judge of the court having jurisdiction under the Bankruptcy Act. The powers conferred will be those conferred by this parliament. The jurisdiction of the board will be limited by the terms of the statute. The compensation which we will pay we hope will not be very heavy in view of the fact that one of the members of the board is a judge and the character of the work will not be too onerous, we think, if the measures taken to effect compromises and adjustments by the interested parties succeed as we believe they will, having regard to the expressed attitude of the representatives of those who have loaned their money and who in reality are nearly as greatly interested as the farmers themselves in seeing that the latter remain upon and cultivate their properties and thus continue in the communities in which they are living. The right hon. gentleman will probably be satisfied with the provisions in that regard. There is to be a board for each of the provinces but it may be necessaiy to have more than one board in a very large province, and if circumstances warrant this, there is provision for the creation of more than one board.


Peter John Veniot: Many people built their houses under the federal housing act and under present depressed conditions they are not in a position to keep up their homes, pay taxes and so on. Of course I understand the act is administered through the provincial government and through it by the towns. The money is loaned by the federal government. I brought this question up a couple of years

Farm Indebtedness
ago. The province of New Brunswick gave a two year extension, but that does not seem to meet the situation. I know cases where houses have been built under the federal housing act and the parties have since lost them through not being in a position to comply with the conditions under which they received the loan. After having paid say $2,000 on a house worth $4,000 or $5,000, they find themselves ousted from it and the house sold to others for the difference between the amount paid and the cost, so that they are out $2,000. Could anything be done in such a matter?


Richard Bedford Bennett: The hon. member for Gloucester will agree that is a matter solely within the jurisdiction of the province and in regard to which we cannot exercise any jurisdiction.


Peter John Veniot: The federal government
could make representations.


Richard Bedford Bennett: When the provinces have made representations that they desire to grant more generous terms to their borrowers, the dominion has extended equally generous terms to them. That is my memory of what has been done so far.


Peter John Veniot: I agree with that.


Mr. POULIOT:: We have heard a lot
about the national debt of Canada, federal, provincial and municipal, amounting to so many billions of dollars. The debt has been considered as a liability. But if it is a liability with regard to the debtor it is an asset for the creditor. During last summer I communicated with the provincial treasurers and secretaries of each province of Canada, and I received astounding answers, indicating that in seven provinces out of the nine it was impossible to get any idea of the total amount of mortgage debt within the province. The only actual answer I received was from the province of Ontario; I got a report from the superintendent of insurance which was far from complete, and I got a letter from the provincial secretary of Quebec saying that in 1929 the total amount of registered mortgages was nearly one billion dollars, for the one year only. Therefore the reports that are given by the bureau of statistics for the whole country are far from complete and must be wrong. It seems to me that before studying a matter of such importance the government should see to it that the house is supplied with all available informa-74726-231
tion concerning the total amount of mortgages in each province, in order that those mortgages might become productive of national revenue to a certain extent-if not the mortgage itself at least a part of the interest thereon. I wonder if the government has any objection to seeing that that information is made available to the house.


Richard Bedford Bennett: At the last census an
effort was made for the first time to ascertain the mortgage indebtedness of rural Canada. The total as returned and estimated as I shall presently indicate was $726,000,000. The direct returns indicated a total indebtedness of $671,776,000 on the owned farm lands of Canada, which represent $566,016,900 on 208,460 farms out of a total of 586,299 fully owned farms, and $105,759,600 or 34,390 out of 67,942 partly owned. I shall presently indicate what the difference is between owned and partly owned in the census figures. The final figure of total farm mortgage indebtedness was arrived at by adding to this figure that I have just given an estimate of the mortgage indebtedness on the rented portion of 67,942 partly owned farms and on 74,382 rented farms operated by tenants.
Three distinct classes were considered; (a) fully owned farms; (b) partly owned farms, that is in which the element of tenancy enters with respect to the property in question; and (c)-


Charles A. Stewart: May I ask the Prime Minister if the definition of the first class, (a); means operated by the owner?


Richard Bedford Bennett: Yes, the whole property
was owned by the operator. Lastly (c), farms operated by tenants.
The method by which the estimate was made with respect to those matters not covered by exact information is given by the bureau as follows:
The census returns provide indebtedness figures for about 77 per cent of all Canadian farm land. The estimate of indebtedness on the remaining 23 per cent is arrived at by considering first the 36,000.000 acres in the partly owned, partly rented group, of which about 18| million acres are owned and 17J million rented.
That is the second class to which I alluded a moment ago.
The census figures cover 107,000.000 acres of fully owned land, and the 18J million acres of owned land in the partly owned, partly rented group, a total of 126,000,000 acres. It is therefore necessary to make an estimate for the 20.000,000 acres of fully rented land and the 17J million acres of rented land in the partly

Farm Indebtedness


Wilfred Hanbury: Could the Prime Minister give it by provinces?
Prince Edward Island
Nova Scotia	
New Brunswick.. ..
Quebec	
Ontario	
Manitoba	
Saskatchewan	
Alberta	
British Columbia.. ..


Richard Bedford Bennett: I am just about to do that:
	Partly owned and	Total
Bully owned	partly rented	(acreage(acres)	(acres)	owned)1.108,258	43,128	1.151.3864,061,333	102,837	4.164.1703.849,881	129,527	3,979,40816,134,602	477,987	16,612.58918.554.741	1.328,028	19.882.7699.272.776	1.644,350	10.917.12630,289,620	8,936,852	39.226.47221.423.004	5,497,499	26,920,6032,489,933	339,314	2,829,247107,184,148	18,499,622	125,683,770
There is a further division of the rented and owned lands. I do not know whether or not the committee would like that information, but I take it that in part the rented lands in the western provinces are .those lands that have been foreclosed, and on which the former owner is a tenant. That is so in part, but not wholly, because those who come from western Canada realize that there are quite substantial quantities of land held by tenants on share payments, apart altogether from those areas in which the mortgages have been foreclosed and the farms taken over by the mortgagee and rented to the original mortgagor, sometimes under an agreement for sale or sometimes under an ordinary lease that provides that he may have the option of purchase with crop payments. If the committee is interested I will give the figures which we have had prepared as from the census. The total acreage of farm lands, according to the census classification, was 163,254,959 acres. The total acreage owned was 125,683,770 acres, and the total acreage rented was 37,571,189 acres. That is divided up into the farm areas, and then subdivided into the owned and rented totals. I have that by provinces, but presumably it is unnecessary to read it unless the committee desires to have that information.


Wilfred Hanbury: I would suggest that if
the Prime Minister has the information with regard to the mortgage indebtedness by provinces it would be very interesting.


Richard Bedford Bennett: These figures do not
cover that.


Mr. SPENCER:: Could we have those
figures put on Hansard?


Richard Bedford Bennett: With the permission of
the committee the table giving the subdivision by provinces may be placed on Hansard. The next table is the percentage 74726-231J
of farm land owned and rented in Canada, by provinces. That partly answers the question suggested by one of the hon. members the other day, in dealing with another matter. In Prince Edward Island 96-7 per cent of all the lands are owned and only 3-3 per cent are rented. In Nova Scotia 96-8 per cent of the farm lands designated as such in the census are owned and 3-2 per cent rented. In New Brunswick 95-9 per cent of lands designated as farm lands are owned and 4-1 per cent are rented. In Quebec 95-2 per cent of lands thus designated are owned and 4-8 per cent are rented. In Ontario 87 per cent of lands thus designated are owned and 13 per cent are rented. In Manitoba, of the farm lands discovered as such 72yy per cent are owned, and 27,% per cent rented. In Saskatchewan 70f^ per cent are owned, and 29j55 per cent rented. In Alberta 69-,V per cent are owned, and 30,-,, per cent rented. In British Columbia 79-,-,, per cent are owned, and 20yo per cent rented, giving an average in Canada of 77 per cent owned and 23 per cent rented.
The hon. member for Vancouver-Burrard (Mr. Hanbury) has raised the question of relating the mortgage debt on the owned land farms to the total farm acreage, and expressing the result in farm indebtedness per acre. Ontario is far the highest with the figure of S8.75 per acre; Quebec is second with S5.53; British Columbia third with $4.29; Prince Edward Island fourth with $4.09. The older and more intensive agriculture of these provinces is typified by economy in the use of land. The low figures for Nova Scotia and New Brunswick are largely attributable to the low absolute figures of farm indebtedness. There is a great deal of part time farming in these provinces, the farms in many fishing, lumbering and mining districts being regarded as homes rather than income earning estab-
Farm Indebtedness

lishments, the future returns of which can be mortgaged. That is one difficulty in classifying farm lands. In the provinces down by the sea the owner or occupant of lands may carry on lumbering in the winter and fishing in the summer. The farm may be of small acreage; it is his home, he grows all his vegetables and sows a few acres in oats or barley so that he may feed his horses, cattle and pigs. He is classified for this purpose as a farmer, because he is essentially a farmer in the sense in which that term has been used for census purposes.


William Lyon Mackenzie King: Do the figures relating to average farms owned mean the average number of actual farms or the average percentage of the acreage of all farm land?


Richard Bedford Bennett: I tried to explain that the figures I gave showed the percentage of farm lands as such rather than the number of farms. The census return shows the percentage of farm lands owned and rented in Canada, by provinces. Obviously it would not give the numbers of farms, because you would arrive at an entirely different percentage, especially in western Canada.


Paul Mercier: The Prime
Minister has stated that the farms throughout Canada are mortgaged to the extent of about 8726,000,000. Has he in his memorandum a figure showing the total valuation of Canadian farms?


Richard Bedford Bennett: I can give that information to the hon. member for St. Henri (Mr. Mercier) before I conclude. Perhaps, properly speaking, this subject may have some reference to the next resolution, but if the house will permit I will give the information now. The hon. member for St. Henri has asked what, according to the census return- which I -desire the chamber to keep in mind covers 77 per cent of the land, the other 23 per cent being rented-the mortgage debt on all the owned farms in Canada amounts to. In Prince Edward Island it amounted to $4,866,700; in Nova Scotia it was $6,570,000; in New Brunswick, $6,485,400; in Quebec, $96,409,400; in Ontario, $199,755,100, in Manitoba, $59,223,400; in Saskatchewan, $175,770,300; in Alberta, $107,519,000; and in British Columbia, $15,177,200, making a total of $671,776,500 covering a total farm acreage which, as I said a moment ago, amounted to 163,254,959, or an indebtedness per acre of $4.11.
To many of the members of this committee these figures are familiar owing to what transpired in the special economic committee which sat last year. It, may be tiresome to them-at least to some of them-and unless the house desires I shall try not to burden the record too much by going into detail. I have before me another table, giving the history of the indebtedness per acre of the total owned land in the country. Table 4 may be placed on Hansard. The average is $5.34.
Mortgage Indebtedness per Acre of the Total Owned Land (Census, 1931)
Prince Edward Island	$ 4.866,700	$ 1,151,386	$ 4	24Nova Scotia	
6,570.000	4.164.170	1	58New Brunswick	
6,485,400	3,979,408	1	63Quebec	16,612,589	5	80Ontario	
199,755,100	19,882,769	10	05Manitoba	
59,223,400	10.917.126	5	42Saskatchewan	39,226,472	4	48Alberta	
107.519.000	26.920.603	3	09British Columbia	
15,177,200	2,829,247	5	36Canada	
$671,776,500	$125,683,770	1 Or	34


Mr. BEAUBIEN:: Has the Prime Minister any information regarding mortgages on chattels?


Richard Bedford Bennett: No, I have not at the moment. I said a moment ago that that information is exceedingly difficult to obtain, and in answer to a question asked me a minute ago I should say that in the province of Quebec the figures were very large. It must be remembered that in the appropriate registry offices there are deposited trust deeds of corporations. Heavy mortgages, trust mort-

gages, covering issues of securities have been lodged, and when the figures were given by my hon. friend I could not but think that they included the trust mortgages of the various corporations, because otherwise they are at variance with the statement issued by the census enumerators.
Here is a table which I believe may interest the committee. It is a table to show the ratio of the mortgage debt to the total value of the farm property, and is given according to census figures of 1931. In the

Farm. Indebtedness
aggregate the total value of farm property in Canada in 1931 was 85,247,753.468, and the mortgage debt on the owned farms, as I have said, was 8671,776,500. The mortgage debt on the owned farms as a percentage of the total value of farm property was only 12-80 per cent. So if hon. members compare those figures with the figures of any other agrarian country I think there is not the same cause for complaint as some of our friends, not in this chamber, but elsewhere, would indicate. For instance, the highest figure is in Manitoba where 15 f per cent is the value of mortgages with respect to the value of farm land, and the lowest level is in Nova Scotia, where it is 6 2Yioo per cent.


Charles A. Stewart: Based on the 1930 figures?


Richard Bedford Bennett: The 1931 figures. I am not unmindful of the fact that the shrinkage in value since 1931 has been very considerable. Nevertheless, assuming that the diminution in value of farm property would render, it worth only half what it was in 1931, we have a ratio of mortgages to farm values still at only 25 per cent which, having regard to the circumstances of this being a new country, is far more favourable than most people had expected the return would show.
While the returns, as I desire again to reiterate, do not deal with 100 per cent of the farms of the country, nevertheless with
respect to 77 per cent the information was given in answer to inquiries. There are some interesting figures in table 6 which we have had prepared, showing the ratio of the mortgage debt to the value of the land, by provinces. The custom of loan companies has been to lend substantially 50 per cent of the trust value by way of first mortgage. In. some instances the mortgage has been increased to 60 per cent. On the value of the farm lands, for instance, of Prince Edward Island, we have the total mortgage debt as a percentage of the value stated as 20-95, while in British Columbia the level is only 15 4%oo- With the total value of farm lands in Canada standing at 82,710,358,000, there is a mortgage debt of $671,776,500, or a ratio of 24-79 between mortgage debt and value.


George Gibson Coote: What is the 1931 figure?


Richard Bedford Bennett: I have said that those are census figures. There is an element of doubt, resolved in this instance by an estimate based upon known factors and applying accepted principles to those factors, and on that principle we have arrived at a statement of the total indebtedness that I have indicated of S726,026.500. In deference to what has been suggested I shall place upon Hansard table No. 7, which gives the details by provinces.
Estimated Total Farm Mortgage Debt of Canada, by Provinces
Province	Indebtedness On Owned Farms (Census figures)	Estimated Indebtedness on Rented Farms	Total Farm Mortgage IndebtednessPrince Edward Island	$ 4,866,700 6,570,000 6,485,400 96.409.400 199,755,100 59.223.400 175,770,300 107,519,000 15,177,200	$ 59,700 78,100 99,300 1.712.100 10,560,800 7.934.100 20,788,000 12,542,100 475,800	$ 4,926,400 6,648,100 6,584,700 98.121.500 210,315,900 67.157.500 196,558,300 120,061,100 15,653,000Nova Scotia	New Brunswick	Quebec	Ontario	Manitoba	Saskatchewan	Alberta	British Columbia	Canada	671,776,500	54,250,000	726,026,500
Farm Indebtedness

The next table deals only with the total farm acreage and farm indebtedness per acre. Throughout the country, assuming the total indebtedness to be $726,026,500, and the total
farm acreage to include, as I have said, partly rented and partly owned land, the average farm indebtedness per acre is only $4.45. The table follows:
Estimated Total Mortgage Indebtedness, Total Farm Acreage, and Farm Debt per Acre, by Provinces
Province	Estimated Total Mortgage Indebtedness	Total Farm Acreage	Farm Indebtedness per acre$ 4,926,400 6,648,100 6,584,700 98.121.500 210,315,900 67.157.500 196,558,300 120,061,100 15,653,000	1,191,202 4,302,031 4,151,598 17,445,089 22,840,898 15,131,685 55,673,460 38,977,457 3,541,541	$ 4	14 1 55 1 59 5	62 9 21 4 44 3 53 3	08 4	42
726,026,500	163,254,959	4 45
			
the report appearing in yesterday's papers that after June 15 federal relief will be cut off? If that is the case, may I ask if the real estate owner will be secured for his land? I know that the matter is very complicated, but will something be done?


Richard Bedford Bennett: I am dealing with the farm lands situation. I can only say that the matter has been brought frequently to the attention of the government. It is a matter of the greatest difficulty in the western cities as well as in the city of Montreal, and if there is any remedy that can be discovered for the situation we shall be very glad indeed to adopt it.
Mr. SPEAIvMAN: There was one point touched upon by the Prime Minister in his preliminary remarks when the resolution was before the house, and that was in respect to the application of the present Bankruptcy Act to farmers under the proposed legislation. I think the Prime Minister intimated that the full provisions of the Bankruptcy Act would not prevail for the present at least because of the long standing objection on the part of farmers to coming under its full terms. I did not understand, however, to what exent the farmer would continue to be exempt from the compulsory features of the Bankruptcy Act; that is those provisions under which the creditor may force the debtor against his will into bankruptcy. As the Prime Minister and no doubt the house know, under the present Bankruptcy Act a farmer cannot be forced into bankruptcy by a creditor but he may go


Mr. DUFF:: Is the Prime Minister including free land as well as mortgaged land?


Richard Bedford Bennett: I am dealing in that instance with the lands designated as farm lands, which include lands wholly owned by the occupying farmer and lands partly owned and partly rented, and the total indebtedness of farm lands so designated-it will be remembered that we designated lands as farm lands in the maritime provinces that possibly were very small in the way of farms, being in some cases only a few acres of clearing- averaged only $4.45 per acre. I shall see that these tables are placed on Hansard.


John Power Howden: Does that include wild lands?


Richard Bedford Bennett: No, I tried to make clear that grazing lands were segregated from other lands. There might be on some of a farmer's lands a certain area which was pasture land, or as the hon. member has suggested, possibly wild lands, but the designation for census purposes was the curtilage of the farm,-I think that is the word in the books. That is lands that were comprised in the farm that was spoken of as the man's farm. Sometimes it might be many thousands of acres, sometimes a few acres only. But that designation in the census figures of 1931 was taken, with the result I have just indicated.


Paul Mercier: 
Richard Bedford Bennett: Obviously the terms of the proposed legislation are not subject to discussion, but I gather entirely the point which the hon. gentleman has made. I suppose he knows that the legal advisers of all the western provinces are aware of the doubtful validity of what are called the debt adjustment acts, but that of course does not touch in any sense the validity of the statutes that provide for the cessation of court proceedings, moratoria, and so forth. It does not touch those because their validity is admitted. But the matter of which the hon. gentleman speaks is dealt with in the bill, and I quite appreciate his point.


Mr. SPEAKMAN:: I merely raised the point in order that the Prime Minister would have it in mind when the legislation is brought down. I also appreciate the fact that there has always been a question as to the validity of the debt adjustment acts under provincial jurisdiction in relation to the powers of the federal parliament with respect to the Bankruptcy Act.


Alan Webster Neill: I would like to ask two questions, and if the Prime Minister has already answered one before six o'clock I am sorry. I refer for a moment to the buildings that were erected under the Housing Act. These undertakings took place right after the war when prices were at their very highest both
as regards the inflated value of lands and houses and of the material with which to build houses. They were concurrent, so to speak, with the same conditions that obtained under the Soldier Settlement Act when soldiers bought land and stock at inflated prices. The government in their wisdom years afterwards saw fit to have a revaluation of those lands whereby the settlers obtained very substantial reductions running as high as fifty per cent in some cases. The interest was also rebated from time to time. A very large rebate was made to the soldier settlers, and those who came under the Housing Act felt that they had been unfairly treated inasmuch as the claims for consideration were met by the government only as regards farm lands and not as to houses for homes. The house owners got no rebate whatever because thej were told that the money was loaned by the dominion to the provinces, and by the provinces to the municipalities, and that there was no responsibility on the dominion. As fax as I know that is the position to-day. But I understood the Prime Minister to say that there had been, not adjustments perhaps, but consideration given in cases where the provinces had extended generosity-I think that was the word used-


Richard Bedford Bennett: Generous treatment.


Alan Webster Neill: Yes, that in such cases the dominion had done the same by the provinces. I would like to ask in that connection, was it in regard merely to the extension of the ultimate debt, which would still remain a debt, or was there any rebate made of principal or interest as was done in the case of ths soldier settlers?


Richard Bedford Bennett: In reply to the hon. member for Comox-Alberni (Mr. Neill) I can only say that thus far, so far as my memory goes, there has been no rebate (a) of principal, or (b) of interest. All that has been done is to extend the time of payment to the same extent as the time for payment has been extended by the borrowing province to the borrowing builder.


Alan Webster Neill: The only other question I wanted to ask is this: What is the minimum qualification, so to speak, to qualify as a farmer under this legislation? We generally think of farms as being 160 or 320 acres. But what about the little man with five or ten acres, a few cows, some poultry and garden produce? Will he qualify?


Richard Bedford Bennett: The hon. gentleman has raised a question to which I propose to ask the committee to give its best judgment. At
Farm Indebtedness

the moment in the bill the definition adopted is the definition that appears in the Bankruptcy Act, namely, one solely engaged in the tillage of the soil. Obviously that definition is not sufficiently comprehensive to meet cases that must be dealt with under this act, and the committee will perhaps be able to suggest a more comprehensive definition of "farmer." We propose at any rate to make it more comprehensive than it appears in the bill, but I adopted the language of the Bankruptcy Act for the purpose of discussion in the first instance.


Henry Elvins Spencer: May I refer for a moment to legislation passed about a year ago with regard to helping companies out of their difficulties. I understand that the legislation then passed enabled companies, if sixty per cent of their creditors agreed to take a certain rebate, to settle their liabilities and start over again without going through bankruptcy proceedings. Will the same system be followed in this legislation in relation to farmers?


Richard Bedford Bennett: This legislation has been delayed because the decision of the supreme court as to the validity of the legislation passed last year has not yet been handed down, but I thought that rather than delay it any longer I would introduce this bill, and it may be modified to some extent by the decision when it is given. I should think the court will hand down its decision to-morrow or the next day; that is my understanding. This bill does contemplate the application of somewhat the same principle, although there is the variation that there is an official whose business it is to assist the farmer with his creditors in arriving at an adjustment of his difficulties; and if there has been failure, as I indicated this afternoon, there will be, through the board set up in each province in the manner I have already indicated, a further opportunity to' prepare a scheme of arrangement and compromise which it is believed will be acceptable to all parties concerned.


Henry Elvins Spencer: Which court is considering the question?


Richard Bedford Bennett: The Supreme Court of Canada.


George Gibson Coote: Might I ask the Prime Minister, in regard to the question I raised before six o'clock about the reduction of interest rates on existing mortgages, whether consideration was given to that question by the government in preparing this legislation, and whether it is not a fact that the committee which last year was inquiring into the ques-
tion of debts and interest rates received advice from the attorneys general throughout Canada that the dominion government did have jurisdiction in connection with that matter.


Richard Bedford Bennett: The hon. gentleman is as familiar as I am with the terms of the advice given to the committee. There are still differences of opinion with respect to that matter. The government naturally has given much consideration to it, and in a section of the bill that will be based on the resolution there is provision for dealing with mortgages that carry a higher rate than seven per cent, and the method by which that rate may, if certain conditions are not observed, be reduced to five per cent. But to pass a retroactive confiscatory bill with respect to mortgages would, we thought, be more hurtful than beneficial to this country, and I think that on reflection the hon. gentleman will agree, when he sees the legislation, that we have gone as far as we can without placing ourselves in that position.


George Gibson Coote: Perhaps when we see the
bill we shall find in it something which it is not possible to see at the moment, but there are a great many farmers now with mortgages at eight per cent. They are managing to keep that paid up by hook or by crook; I mean, they are in the last extremity to keep that eight per cent paid up. It is one of their ambitions to meet their obligations in the terms in which they were undertaken, and because of the increase in the purchasing power of money it would be, I submit, only just to these people who are paying interest at that rate, and it would not be working an injustice on the recipients of the interest, if the rate of interest were by law, from the date of the passing of the act, reduced to a lower level. The Prime Minister, I know, is familiar with the action taken in Australia where by law, rates of interest on mortgages were reduced by a certain percentage of the existing rate or down to five per cent, whichever was the greater. I do not see why we could not adopt the same principle here; there is such necessity for it. Many a farmer is in a difficult position, carrying a mortgage that may be considered the maximum which his farm will bear, and on which he has so far paid eight per cent and must continue to pay that rate unless he can make some arrangement under the new bill. He is competing perhaps with a neighbour who has bought a farm from a mortgage or loan company or from some private person who has obtained it under foreclosure or abandonment by a former owner, and he may have secured it at

Farm Indebtedness
a price which is no higher than the mortgage the other man is carrying; and in many instances he is paying only five per cent on the agreement of sale. The man who is endeavouring to maintain his old farm, keeping his mortgage in good standing, is at a disadvantage in competition with the other farmer who has bought an abandoned farm or one which has been secured under foreclosure. There is a very difficult situation there and it cannot be met except by legislation reducing the rate of interest. I am not going to press the point any further to-night, but I hope the government will give consideration to the question, unless it appears, when the bill comes down, that provision has been made to meet it. I trust the government will even be prepared to go so far as to amend the Interest Act to provide for a reduction in the rate of interest on existing obligations of that sort.


Richard Bedford Bennett: The legal question, neatly put, is this. The exclusive legislative power is vested in this parliament to deal with interest; the exclusive power to deal with property and civil rights is vested in each provincial legislature. This parliament therefore has the right to determine what constitutes the legal rate of interest, and may declare in proper terms that no greater rate than a named rate shall be recovered from any person. But the Interest Act as it stands has left it open for any person in this country to exercise his own free will and make any contract he pleases to pay any rate of interest he agrees to pay to his lender. That is the law at the moment. Should no provision be made as to the rate, then if any rate applies it is five per cent under our act.
Now the hon. member for Macleod must realize that once a contract has been made, and under an existing rate of interest which was legal within the statute passed by this parliament, the extent to which this parliament can interfere then with a contract involving property and civil rights is an altogether different matter. As I understand the hon. gentleman, he suggests that this parliament, in the exercise of its plenary powers, should pass a retroactive statute declaring that notwithstanding contracts that have been made, all interest shall be reduced under such contracts to a given rate per annum.


Alan Webster Neill: In future.


Richard Bedford Bennett: No, he said, as I understand, that notwithstanding what the contract
contained it should thereby be modified and it be declared that the rate instead of being the one fixed by the contract, should be a rate fixed by parliament.


Alan Webster Neill: To be paid in future.


Richard Bedford Bennett: Yes; he said also: In respect to accumulated arrears of interest, but that was only secondary to the main part of his argument.


George Gibson Coote: I think I suggested only after the date of the passing of any act of this parliament.


Richard Bedford Bennett: That is, notwithstanding any contract that had been entered into heretofore providing for a rate of interest, after a given date the rate should be one fixed by this parliament. I see no reason why I should not tell the committee exactly what has taken place. I asked representatives of the loan companies, the insurance companies and the mortgage companies to come to Ottawa, and they very kindly did so. We discussed this situation at very great length and I will put their predicament to the committee in a single line. If we did that, they would be faced with bankruptcy. The reason is this: they have borrowed money on debentures for which they are paying the high rate of five per cent. As that money was borrowed largely from Scotland and the contract is there, if we reduced the rate to five per cent there would be a loss; if we reduced it to six per cent there would be a loss, for the average recovery of, I think, one of the largest insurance companies lending in western Canada was 4-83 per cent. I mention that because I approached this problem with an absolutely open mind and determined if I could to secure a concession from the companies that were lenders, indicating to them, in the words of Gladstone, that the forces of civilization were not yet exhausted against its enemies. But after I heard that one company had borrowed in Scotland $30,000,000 on debentures on which they were paying five per cent interest, and another had borrowed $29,000,000 on which they were paying five per cent, I confess I felt the provisions which we have inserted in the bill are about as far as we can go without deliberately putting into insolvency the institutions that are lending the money. One of the insurance companies produced its documents and I was amazed when I was shown that the average rate of recovery of interest, mark you, as the hon. member for Macleod (Mr. Coote) would say, was over a term of years only 4-83 per cent. That in itself was to me rather surprising.
Farm Indebtedness


Wilfred Hanbury: Although they are paying five per cent.


Richard Bedford Bennett: No, this was one of the insurance companies. I am putting the case exactly as it was put to me, and I think the hon. member for Macleod, if he were sitting in my place, would hesitate to submit to parliament legislation that, retroactive in its character, would abrogate contracts and substitute for the will of the parties the supreme will of parliament as expressed by a majority in the house, with the result that institutions that had borrowed and given promises to pay in other lands, would be made insolvent.


George Gibson Coote: Of course the Prime Minister has some advantage over us in this connection in that he has discussed this matter with the companies that have lent the money, but unless there is a greater advance in the price of farm products than we can see at the moment, some of those companies are bound to take losses. That is inevitable; it simply cannot be avoided. What I am suggesting is not, I think, unreasonable; it is something many of the companies might have done voluntarily before this. I know companies that I am sure have not sold a debenture outside Canada, are still insisting on the eight per cent to the very letter of the law. I say again that what I am suggesting was done in Australia by law.


Richard Bedford Bennett: The situation there, as the hon. gentleman knows, is entirely different from that here.


George Gibson Coote: Australia, of course, may or may not be the proper example for us to follow. To come to the question which the Prime Minister raised as to where the jurisdiction lies, it must lie either in the province or in the dominion or jointly in the two to do this thing which seems to me to be so necessary. I am not, however, going to press the point further to-night. We will examine the legislation when it comes down, but if there is not some provision in it for dealing with eight per cent mortgages we shall simply have to urge the matter again upon the government. I suppose that is all we can do.


Wilfred Hanbury: My understanding of the explanation given by the Prime Minister is that the very situation that the hon. member for Macleod (Mr. Coote) is bringing to the attention of the committee has been taken care of by the requirement that will force the mortgagee to accept the lower valuation, not
LMr. Bennett.]
only on his principal but also on the interest that has not been paid to date. If that is the condition, I think the legislation has already been made retroactive.


George Gibson Coote: That is only in connection with those who are actually insolvent to-day. There are still some farmers who are solvent; I mean they have kept the interest paid, but I do not see how they are going to pay it much longer, and for their sake, rather than have them drift into insolvency through a rate of eight per cent, parliament and the mortgage companies themselves would be well advised to consider the passing of legislation which would reduce that rate of interest. There are some companies which are willing to take action to-day, but they say, and very properly, that they cannot be expected to do so if their competitors will not. They say: We are in the life insurance business; we want to show as good a return as the other companies; we want to pay as good dividends to our policyholders; if our competitors are charging eight per cent, we must follow the same policy. I shall not labour the point any more; I believe the Prime Minister knows the situation and we will see what the legislation provides in respect to the matter. Unless it provides more than I understood from the Prime Minister's observations this afternoon, we shall have to urge at a later date that some action be taken to deal with the matter.


Charles A. Stewart: I quite
appreciate the situation the hon. member for Macleod (Mr. Coote) has brought to the attention of the committee, but having had some experience with soldier settlers on the land where a considerable number of them paid out in full I know there is no doubt there was discrimination against those individuals. Personally I prefer to wait until I see the bill before entering into a discussion of the matter, but if the bill provides machinery for the adjustment of present difficulties it will, I think, have met a want and will be appreciated.
I was going to say that the tables presented by the Prime Minister are intensely interesting, but of course they cover only farm mortgages, and I note from the wording of the resolution that the board to be set up will have authority to deal not only with the mortgage situation, the actual farm mortgages, but with other indebtedness of the farmer as well; therefore it is broader in its aspect than merely dealing with the mortgage situation.


Richard Bedford Bennett: That is so.

Farm Loan Act


Charles A. Stewart: Is it possible from statistics to have some tables prepared, even if they are merely estimates, of the indebtedness of this character, chattel mortgages and indebtedness of every sort? Because I take it that even agreements for sale that are in existence will hardly come under the category of the estimate the Prime Minister has presented in the table. There is a very large indebtedness which I suppose in the ordinary sense of the word we would call floating indebtedness that would be taken into consideration by the board. I presume it is impossible to obtain figures of these, but if they could be procured I should like to have them.


Richard Bedford Bennett: I think that the hon.
member for Red Deer (Mr. Speakman) especially, will recall that last year a very determined effort was made to secure figures covering the indebtedness to which the hon. gentleman (Mr. Stewart, Edmonton) has referred. The difficulty of course is apparent at once; the amount owing to the grocer varies from time to time; the amount owing to the implement dealer varies. When this scheme of arrangement, this compromise plan, is being considered all these debts will be dealt with. But to form even an estimate of the indebtedness of the farm population of this country from time to time under all heads is something that I know from the Results of the effort made last year is impossible. Is it not fair to say that no satisfactory estimate was arrived at of the total indebtedness of the farm population of the country? Is that not a fair way to put it?


Alfred Speakman: I think the Prime
Minister has expressed it correctly. The committee explored every avenue in an endeavour to get even a fair estimate of the total debt outside of mortgages and chattel mortgages, of the multitude of debts owing to implement companies, lumber companies, oil companies and wholesale houses, to say nothing of retail stores. We found ourselves unable to arrive at anything more than a very loose estimate, nothing that we ventured to place on our record because it was based on so little actual information.
Resolution reported, read the second time and concurred in. Mr. Bennett thereupon moved for leave to introduce Bill No. 92, to facilitate compromises and arrangements between farmers and their creditors.
Motion agreed to and bill read the first time.


Richard Bedford Bennett: It is understood that we shall endeavour to afford the widest opportunity for considering the contents of the bill on second reading. The bill is printed in English and in French, and will be available for distribution to-night.



CANADIAN FARM LOAN ACT


[Stage Direction]
Right Hon. R. B. BENNETT (Prime Minister) moved that the house go into committee to consider the following proposed resolution:
That it is expedient to amend the Canadian Farm Loan Act (R.S.C., c. 66) to facilitate and increase the extension of credit to farmers, to authorize the Minister of Finance to purchase additional bonds issued by the board, and guaranteed by the government, and to provide for supplementary advances by the board.
Wilfred Hanbury: Explain.


Richard Bedford Bennett: I endeavoured to indicate to the house this afternoon in a broad and general way that this bill is complementary to the bill dealing with the adjustment of farm indebtedness. In view of the fact that the bill deals with a number of amendments that have to be made in consequence of administrative experience, perhaps it is desirable now only to refer to the fact that the bill to be based upon the resolution contemplates the sale by the board of debentures to enable the business of the board to be carried on, so that it may meet the conditions to which reference has been made, namely the inability of those who pay off their long term mortgages to secure reasonably cheap money. The extent to which the debentures may be purchased by the government will purposely be left blank. That matter the house will deal with at the proper time.
I also indicated that the measure founded upon the resolution contemplates that additional advances to those already provided for in the provisions of the Canadian Farm Loan Act may be made, to enable a scheme of composition or arrangement to be carried into effect; and lastly that additional advances may be secured in provinces where there are chattel mortgages by a charge upon personal property, in order that the farmer who has entered into a scheme or arrangement with his creditors may have some small additional capital with which to commence the struggle back to prosperity.


Henry Elvins Spencer: Has this resolution particular reference to the bill known as the farm loan act?
Farm Loan Act


Richard Bedford Bennett: The Canadian Farm Loan Act.


Henry Elvins Spencer: I should like to draw the attention of the house to the fact that western Canada particularly hoped for great benefit from the coming into operation of that act. I think I would be supported by those who know anything about the matter in saying that never has a piece of legislation passed by this house been a greater disappointment. It was put through at a time when it could have done tremendous good if it had been well administered, because it would have made money available on mortgages running for a long term of years. But when it began to operate it was found that the regulations were more strict than those imposed by any banking institution or ordinary mortgage corporation, and the amount of loans made under it was infinitesimal compared with the original demands. In the various provinces a certain amount of money was advanced, but very little compared with the original demands. When the hard times came on it was found that the administrators acted in the carrying out of this particular legislation more harshly than any debt collectors we know in this dominion. I suppose I have had more correspondence with regard to the hardships incurred through borrowing under this act than in regard to any other matter. I mention this because if we are to have an act that will work there will have to be a great many alterations.


Mr. W. T. LUCAS (Camrose):: I should like to endorse what the hon. member for Battle River (Mr. Spencer) has said. I have had a great deal of trouble in connection with borrowers under the farm loan act, and from my experience I must say that if I had to advise a farmer about getting a loan I would advise him to take it from a loan company rather than under the Canadian Farm Loan Act. Many of these borrowers have been put to a great deal of expense, and when they have complained to me or to other members it is difficult to get any satisfaction.
I remember once going into the office at Edmonton in a very amiable mood and when I attempted to discuss the matter in a friendly way I was told that I had no business to interfere with it all. If the bill now being brought in contemplates larger loans I suggest to the Prime Minister that regulations be laid down to ensure that there shall be better administration of this act in the future.


Charles A. Stewart: I should like to ask the Prime Minister if he has the figures as to the overdue interest on existing farm loans.


Richard Bedford Bennett: No; I thought we would deal with that in committee. I have no right to speak again except at the close of the debate, so I shall defer such observations as I propose to make on the moving of this resolution until other members have signified their intention to speak.


Alan Webster Neill: I assume that the Prime Minister is going to deal with the remarks of the last speaker?


Richard Bedford Bennett: Yes. May I say that this afternoon the right hon. leader of the opposition (Mr. Mackenzie King) put his finger upon one of the difficulties that arise in connection with the introduction of any legislation of this character. When the farm loan act was introduced in this parliament the then Minister of Finance, who was a very cautious Scotsman, was extremely careful to provide for almost every contingency that would indicate the possibility of the loans not being repaid. The provinces assumed a large responsibility under that legislation, and when I have had occasion to complain-as I have, like other hon. members-I have been told that this is a matter solely within the jurisdiction of the provinces. Then when I endeavoured to secure some explanation from that quarter I was told that this is a matter entirely removed from politics, which must be dealt with solely upon its merits. The result is that it is one of the most convincing arguments that I have found in a long time as to the difficulty of creating a board, surrounded by the conditions that surround the Canadian farm loan board legislation.
Nevertheless the Dominion of Canada has advanced substantially $8,000,000 to this enterprise, and the loans have been made under appraisements controlled and directed by the provincial authorities under regulations enacted by the federal board. Each borrower has been compelled to invest a certain sum in the stock of the board, and the rate of interest at which he has borrowed has not been so very low as to induce him to believe that it is worth the effort he has made to invest in this very praiseworthy enterprise. The result is that he is very hesitant before he undertakes to invest his money in a certain amount of stock of the enterprise, because he pays six per cent for his money and he thinks possibly he would just as soon be a free man and pay seven per cent somewhere else.
There is one other point in that respect. The act provides, as will be remembered, for loans to an amount not exceeding fifty per

Farm, Loan Act
cent of the valuation, at a rate of six per cent. Obviously when interest rates are high the incongruity of the situation arises. What the hon. member for West Edmonton (Mr. Stewart) says is perfectly true; in the changing conditions of this country there are discriminations that arise by reason of the lapse of time of a single year. The man who pays all his debts as they come due sometimes finds himself very much worse off than the one who waits and waits and waits, and then has greater facilities and more opportunities to pay his obligations than he would otherwise.
In that regard I recall a story; I am not a good story teller, but this story is very apt. A distinguished gentleman who had a quarrel with another because of the interest he was paying wound up by shaking his fist very vigorously and saying, "You can say nothing to me; I always pay one hundred cents on the dollar." "Ah," the other replied, "that is where I have the better of you. I pay ninety per cent and take the benefit of the discount." Perhaps that illustrates the difficulties of the situation to which hon. gentlemen have referred. That was an actual happening that came under my observation when I was a very young man, and I then realized the value of discounts in business.
Be that as it may, however, I should like the house to realize that this resolution does not contemplate a change in the structure of the farm loan board, nor does it contemplate any substantial change in the method of administration. But if, during the progress of the discussion, it becomes apparent that it is the wish of hon. members that something of that sort should be done, we will endeavour, in the hot days of June, to meet their wishes to the best of our ability.
Motion agreed to and the house went into committee, Mr. MacDonald (Cape Breton South) in the chair.


George Gibson Coote: I should like to ask the Prime Minister a question. At what rate will the farm loan board be able to make loans?


Richard Bedford Bennett: There has been no change in that regard. I suppose the hon. member followed me a moment ago-


George Gibson Coote: I happened to be out of the house.


Richard Bedford Bennett: -when I said the present rate was six per cent, plus the purchase of stock.


Mr. HANSON (York-Sunbury):: I should like to ask if there will be any change in the regulations under which loans are made. I have had a great deal of experience under this act, and my experience has been similar to that of other hon. members. At the presenttime an appraisement is made by an appraiser appointed by the provincial board. They lend up to fifty per cent on a conservative valuation of the land and twenty per cent on the improvements. My experience has been that it takes about six months to put through a loan, and by that time the farmer has lost all hope; he cannot wait. The valuation is so conservative; the appraisements are so reduced and the amount allowed for improvements is so small that I think it would have been far better if the legislation had never been passed.
I remember the circumstances under which this legislation was set up. The minister was a canny Scotsman. He did not want to enact this legislation; he held off as long as possible, and when he did put it through I think the experience of all hon. members proves that it was of little or no benefit to those whom it was intended to help. I think we might as well wipe it off our statute books.


Alfred Speakman: There is just one other point, which might be clarified if not in the law at least in the administration. I think my experience has been the same as that of other hon. members; when a situation was brought to our attention which appeared to us to savour of injustice, we took it up with the provincial board. We were informed that the act had been perpetrated under federal authority, over which the province and the provincial board had no control. Then, when we took it up with the federal board, we were informed that it came entirely under provincial administration, and I have seldom seen a more successful exhibition of.passing the buck than has been exhibited by those two branches of the administration of this act. I trust that this may be clarified, if not in the act itself then in the regulations or in the method of administration, so that we will know whom we are to hit.


Richard Bedford Bennett: When the bill based upon this resolution is before the house I shall supply the hon. member for West Edmonton (Mr. Stewart) with the details of interest arrears and produce copies of the regulations. We will carefully consider the bill in committee of the whole house, and if hon. members have amendments to suggest which will improve the situation, if they will bring them
Farm Loan Act

forward when the bill is in committee we can take some time to consider whether or not they can be incorporated in the measure in order to make it more effective; for I do fully appreciate the difficulties to which hon. gentlemen have referred, having experienced them myself.


Alan Webster Neill: If no one else will come to
the rescue of the memory of the canny Scot I think I should like to say a word in support of this much abused measure. The hon. member for York-Sunbury (Mr. Hanson) was correct when he said they lend up to fifty per cent of the valuation, but he did not go far enough. The trouble is that usually they do not lend up to fifty per cent. That is their limit. If they always lent up to fifty per cent it would be easier. But to say that the act has been a total failure is hardly borne out by the very large sum that the Prime Minister has mentioned as having been lent. The fact that they were not after all too cheese-paring in their policy is indicated in the fact that he talks about arrears of interest still being overdue.


Richard Bedford Bennett: Very substantially.


Alan Webster Neill: Substantial arrears, he says.
I have myself complained of their being too narrow, and not lending enough, but it would appear that conditions somewhat justified that act. The original rate is six per cent, or whatever may be the sum at which they sell the bonds.


Richard Bedford Bennett: It has a relation to the
sale of the bond issue.


Alan Webster Neill: And then there is another
charge of two or two and one-half per cent for amortization. I know of more than one case where farmers borrowed money from private sources at 8 per cent, and after having it five or ten years the whole amount would be demanded back, and if times were bad they were lucky if they could get it renewed. At any rate, at the end of twenty-five years they still owed the whole of the money and would be paying eight per cent, but under this plan they paid eight and one-half per cent and at the end of twenty-five years they did not owe anything. It was a substantial advantage to the farmer. I never knew anyone who was fortunate enough to get a loan who had any complaint about the way he was treated. I know of specific cases where the change was from eight per cent under private hands to eight and one-half per cent under the government, with this difference, that in the case of the private 
man the mortgagor still owed the amount at the end of the period, but in the case of the government it was in the course of twenty-five or thirty years wiped out. I hope the government has no intention of doing away with it, and while it has been unpopular because they have been so particular in carrying it out, yet I believe it has done substantial and good work.


Charles A. Stewart: I think a
word should be said with respect to the farm loan act, because it was one which for a long time was under consideration by the previous government. It was not only the then Minister of Finance who was careful; another official of the government was quite as careful as the then Minister of Finance. The deliberations ran over a considerable period of time, and that is why I am intensely interested to know, after the criticisms I have heard, how the interest payments are standing up. The experience of governments generally- and I know something about the matter of loans-is that it is the easiest thing in the world to lend money, but it is the most difficult thing in the world to get it back. That has been the experience of the province of Alberta for the past twenty-five years. Times were much better in the days when this act was put upon the statute book than they are to-day. I shall be much interested to know how interest payments are coming in under the loan act now being criticized because of its rather onerous provisions. If interest is paid it is evidence, of course, that it might be loosened up, but if interest is not paid I do not know what I shall have to say about it.


George Gibson Coote: I think if the books of any loan company were examined it would be found that a great deal of interest on farm mortgages is in arrears. It cannot help being that way. Conditions are such that the farmers as a class cannot keep their interest paid up. While I am on my feet I should like to say that, as a whole, the farm loan board has certainly never over-extended itself, because the amount of money it has lent in Canada is only a trifle over one per cent of the amount outstanding in Canada on farm mortgages. It would seem, therefore, that the farm loan board has been careful, if nothing else.


Henry Elvins Spencer: When we examine the
costs of administration of the act we will find them pretty high. Needless to say, it is easy to understand that costs mount up because of inspection carried on before making loans.

Australian Wheat


Richard Burpee Hanson: That is
all paid by the borrower. He has to put up a ten dollar bill before they will look at it.


Henry Elvins Spencer: But even the ten dollars does not pay all the expenses incurred by inspectors. I am told by one of the best inspectors that if he had been absolutely accurate in having forms filled out he could never have recommended a loan, so extreme were they in their demands. As we have lent very little under the act and the administration has been going on, it stands to reason that on a per capita basis the expense has been very high.
Resolution reported, read the second time and concurred in. Mr. Bennett thereupon moved for leave to introduce Bill No. 93, to amend the Canadian Farm Loan Act.
Motion agreed to and bill read the first time.


Pierre Édouard Blondin: When shall the said bill be read a second time?


Richard Bedford Bennett: Next sitting. The bill is printed and will be distributed at once. Ample opportunity will be afforded for consideration of its provisions.


Charles A. Stewart: May I suggest that we should have at least two days on both these bills?



THE KING'S BIRTHDAY

Richard Bedford Bennett: This, Mr. Speaker, is the sixty-ninth anniversary of the birth of His Majesty the King. We are sitting, because it has been the practice of parliaments from time immemorial to discharge public business on all days in which it is necessary so to sit. But in view of the amount of business disposed of to-day I propose shortly to move that the house do now adjourn. In doing so I am sure I express the wish of every hon. member in the chamber that His Gracious Majesty may long be spared under Providence to rule over an united empire, and that his realm may be the home of a happy, prosperous and contented people. I am sure that is the heartful sentiment and prayer of all those who constitute this Commons House of the Canadian parliament.
On motion of Mr. Bennett the house adjourned at 9.50 p.m.
Tuesday, June 5, 1934