SELECT STANDING COMMITTEES

[Stage Direction]
Hon. E. N. RHODES (Minister of Finance) presented the report of the special committee appointed to prepare and report lists of members who compose the select standing committees of the house, as follows:

[Stage Direction]
Messieurs:
Anderson (Toronto-High Park) Beaubien Burns Casgrain Casselman Duff Elliott Eeling Gagnon Gray Guthrie Hanson (York-Sunbury Jacobs
Kennedy (Peace River)
Lapointe
Lawson
MacDonald (Cape Breton South) MacNicol Marcil McPhee
Mercier (St. Henri)
Mitchell
Morand
Ralston
Stevens
Stinson
Sullivan
Thompson (Simcoe East)
Turnbull-29.
(Quorum 10)

[Stage Direction]
Messieurs:
Ahearn
Anderson (Toronto-High Park)
Be a. umer
Bell (Hamilton West)
Beynon
Bothwell
Bradette
Bury
Cantiley
Casgrain
Casselman
Chewier
Dorion
Dupre
Edwards
Esling
Eiset, Sir Eugene
Fraser (Cariboo)
Gardiner
Geary
Haekett
Hanbury
Hanson (Skeena)
Harris
Heaps
Howden
Jones
Kennedy (Peace River)
Lacroix
Laurin
Macdonald
(Kings, PJS.I.)
MacMillan (Saskatoon) McGibbon McIntosh McLure M an ion
Mercier (Laurier Outremont) Mitchell Moore (Ontario) Munn Pouliot Price Ross
Rutherford
Ryerson
St-Pere
Sanderson
Seguin
Shaver
Smith (Cumberland)
Speakman
Stewart
(Edmonton West) Stitt (Nelson)
Totzke
Tummon
Turnbull
Urquhart
White (London)
White (Mount Royal)
Young-60.
(Quorum 20)
[Stage Direction]
Select Standing Committees

[Stage Direction]
Messieurs:
Taylor	Wilson
T^treault	Woodsworth
Verville	Wright-54.
PUBLIC ACCOUNTS Messieurs:
Ahearn
Anderson (Halton) Arsenault Barber Barrette
Bell (St. Antoine)
Bowen
Brown
Chaplin
Chevrier
Deslauriers
[Stage Direction]
Dumaine
Dupre
Dupuis
Edwards
Ernst
Fournier
Gobeil
Golding
Gott
Hall
Irvine
Kennedy (Winnipeg South Centre) Larieehe Larue
Lawson
Luchkovich
Maelnnis
Mackenzie
(Vancouver Centre) MacMillan (Mackenzie) McDade McGregor Maloney
Mercier (Laurier-Outreraont)
Mitchell
Moore (Ontario)
Munn
Myers
Peck
Pettit
Raymond
Sanderson
Seguin
Spence
Stinson
iSullivan
Tummon
Verville
Wilson-50.
Anderson (Halton)
Arthurs
Beaubien,
Beaubier,
Bell (Hamilton West)
Both well
Bourgeois
Cahan
Church
Coote
Cowan (Port Arthur-Thunder Bay) Davies Donnelly Dubuc Duff
Dumaine Duranleau Edwards Embury Fournier Fraser (Cariboo) Fraser (Northumberland. O.)
Gagnon
Garland (Carleton)
Geary
Girouard
Hanson
(York-Sunbury) llsley J acobs MacDonald
(Cape Breton South) Maelnnis Mackenzie
(Vancouver Centre) Macphail (Miss) Michaud Perras Pouliot Power R alston Rhodes Robinson Ross
Rutherford Smith (Cumberland) Smith (Vietoria-
Carleton)
Smoke
Speakman
Stanley
Stewart (Leeds) Taylor Willis-50.
(Quorum 15)
STANDING ORDERS Messieurs:
Baker
Bell (Hamilton West) Bell (St. Antoine)
Blair
Bury
Caban
Church
Deslauriers
Fontaine
Fraser
(Northumberland, 0.)
Hay
Luchkovich McKenzie (Assiniboiu) Mercier (St. Henri) Munn Plunkett Rowe
Rutherford Thompson (Lanark) Woodsworth-20.
(Quorum 8)

[Stage Direction]
(Members to act on the part of the Commons) Messieurs:
Anderson (Halton) Baribeau Belec Boulanger Bourgeois Brasset Charters Desrochers Dubois Embury Esling Factor Fortin Girouard Gott Gray Hay Heaps Howden Lucas MacLean Maloney Marcil Matthews McKenzie (Aesiniboia)
McLure
Mills
Moore (Chateauguay-Huntingdon)
Munn
Murphy
Parent
Peck
Perras
Pickel
Porteous
Price
Guinn
Rheaume
ltinfret
Roberge
Robinson
Rowe
Ryerson
St-Pere
Short
Simpson
(Siracoe North) Spencer Spotton
(Quorum 15)

[Stage Direction]
Messieurs:
Arthurs
Baker
Beynon
Both well
Casgrain
Chaplin
Coote
Donnelly
Dorion
[Stage Direction]
Ernst
Euler
Fraser (Northumberland, 0.) Gagnon Ganong Geary Hackett Hanson (York-Sunbury)
Harris
Howard
Hurtubise
Irvine
J acobs
Lapointe
Laurin
Lawson
Mackenzie
(Vancouver Centre) MacMillan (Saskatoon) MeGibbon McPhee
Mercier (St. Henri)
Michaud
Morand
Perley
(Qu'Appelle Pettit Power Ralston Raymond Rhodes Robinson Sanderson Smoke Spencer Stanley Stevens Sullivan Val lance
White (Mount Royal) Willis
W oodsworth-50.
(Quorum 15)

[Stage Direction]
Barber
Bertrand
Blair
Bouchard
Boucher
Boulanger
Messieurs:
Bowen
Boyes
Brown
Burns
Butcher
Carmichael
[Stage Direction]
Select Standing Committees
Coote	Pickel
Davies	Porteous
Donnelly	Rowe
Dubuc	Sauvd
Dupuis	Seguin
Fafard	Senn
Elliott	Shaver
Garland (Bow River) Simpson
Gobeil	(Simeoe North)
Golding	Smith (Victoria-
Goulet	Carleton)
Hall	Spotton
Hay	Sproule
Jones	Stewart
Loucks	(Lethbridge)
Lucas	Stirling
McGill is	Sutherland
McKenzie	Swanston
(Assiniboia)	Taylor
McPhee	Thompson (Lanark)
Moore (Chateau-	Totzke
guay-Huntingdon) Tummon	
Motherwell	Vallanee
Mullins	Weese
Myers	Weir (Melfort)
Perley	Weir (Macdonald)
(Qu'Appelle)	Wilson-60.
	(Quorum 20)
MARINE AND FISHERIES	
	Messieurs:
Baribeau	Macdonald
Barrette	(Kings, P.E.I.)
Beaubien	Maelnnis
Brasset	MacLean
Cantley	McDade
Cardin	McLure
Dickie	Munn
Duff	Neill
Duranleau	Pouliot
Ernst	Plunkett
Ganong	Price
Hanson (Skeena)	Quinn
Ilsley	Reid
Jean	Ross
Johnstone	Short
Larue	Speakman
MacDonald	Stitt (Selkirk)
(Cape Breton South) Urquhart	
	Veniot-35.
	(Quorum 10)
MINES, FORESTS AND WATERS	
	Messieurs:
Arthurs Beaubien Belec Bell
(St. John-Albert)
Beynon Bradette Campbell Cotnam
Cowan (Port Arthur Thunder Bay)
Desrochers Dickie Duguay EsUng
Fraser (Northumberland, O.)
Garland (Bow River)
Gershaw Gordon Hurtubise
(Quorum 10)
Usley
Johnstone
Kennedy
(Peace River) Macdougall McKinnon Mitchell Mullins Parent Piunkett Roberge Simpson
(Algoma West) Smith (Cumberland) Stewart
(Edmonton West) Stewart
(Lethbridge)
Stitt (Nelson)
Tetreauilt
Weir
(Macdonald)-35.

[Stage Direction]
Messieurs:
Arsenault	Macdougall
Bell (St. John-Aibert)	MaeNicol
Bourassa	Maephail, Miss
Bourgeois	Alclntosh
Bury	Morand
Church	Keill
Cowan	Parent
Ferland	Perley, Sir George
Uolding	Reid
Gordon	St-Pere
Hackett	Stanley
Howard	Stitt (Selkirk)
Howden	Thompson (Simeoe)
Jean	Turnbull
Johnstone	Veniot
Kennedy (Winnipeg-	White (London)
South-Centre)	Woodsworth
Lacroix	W right-35.
(Quorum 10)	
DEBATES	
Messieurs:	
Bouchard	Marcil
Charters	Muloek
Coote	Perley, Sir George
Esling	Rinfret
Lafleche	Wilson
Macdougall	Young-12.
(Quorum 7)	
THE	LIBRARY
(Members to act on	the part of the Commons)
Mr. Speaker and Messieurs'	
Barber	Larue
Bertrand	LaVergne
Bourassa	MacMillan
Boyes	(Saskatoon)
Butcher	Maephail, Miss
Campbell	Marcil
Carmichael	McGillis
Charters	McGregor
Chevrier	McIntosh
Cotnam	McKinnon
Dubois	Muloek
Dupuis	Peck
Factor	Perley, Sir George
Ferland	Pouliot
Fontaine	Quinn
Fortin	Rheaume
Fraser (Cariboo)	Short
Gagnon	Smoke
Girouard	Thauvette
Guthrie	Thompson (Lanark)
Irvine	White (London)
Jones Lafleche	Wright-H.

[Stage Direction]
(Members to act on the part of the Commons) Mr. Speaker and Messieurs:
Ahearn
Barrette
Beaubier
Campbell
Cantley
Carmichael Garland (Carleton) Hanbury Howard Lafleche
Interest Act Amendment
[Stage Direction]
Macphail, Miss	Senn
McKinnon	Spence
Mills	Sproule
Mullins	Taylor
Ryerson	Thauvette-20.
Mr. RHODES moved that the report be concurred in.
Motion agreed to.

Hon. E. N. RHODES (Minister of Finance) moved:: That the select standing committees of this house shall severally be empowered to examine and inquire into all such matters and things as may be referred to them by the house and to report from time to time their observations and opinions thereon, with power to send for persons, papers and records.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Mr. G. G. COOTE (Macleod) moved for leave to introduce Bill No. 11, to amend the Interest Act.
Mr. POULIOT:: Explain.


Mr. COOTE:: Mr. Speaker, the Interest Act as it now stands does not place any limit upon the rate of interest that may be agreed to or that may be collected. Section 1 now reads:
Except as otherwise provided by this or by any other act of the Parliament of Canada, any person may stipulate for, allow and exact, on any contract or agreement whatsoever, any rate of interest or discount which is agreed uipon.
The bill which I am introducing proposes to place a limit of seven per cent per annum upon the rate of interest that may be charged and collected. It also contains another provision which would limit the rate of interest which might be collected on mortgages on real estate to four per cent per annum.
Motion agreed to and bill read the first time.



THE KING'S SILVER JUBILEE

[Stage Direction]
On the orders of the day:
Right Hon. R. B. BENNETT (Prime Minister) :: Mr. Speaker, I think it desirable that I should read a short statement to the house in connection with the celebration of the twenty-fifth anniversary of the king's accession to the throne:
As announced in the speech from the throne, Canada will join with the rest of the empire in celebrating on May 6th next the 25th anniversary of the king's accession to the throne. In accordance with His Majesty's

expressed wish that all unnecessary expenditure should be avoided and that celebrations should be local, the government will not initiate any great national celebration.
It is proposed that the day will be celebrated as a public holiday throughout the dominion, and that a salute shall be fired at Ottawa and at all provincial capitals.
The government will announce a program of proceedings to take place in Ottawa on Parliament Hill on the morning of May 6th, which will enable members of representative national and' local patriotic organizations, school children and the public to join in commemorating the king's silver jubilee. His Excellency the Governor General will attend, and will present His Majesty's silver jubilee medals to those of our fellow-citizens in Ottawa, to whom they are awarded.
The lieutenant-governors of the several provinces will be invited to carry out in the provincial capitals programs similar to that which will be adopted at Ottawa. Mayors and reeves of civic and municipal centres, other than Ottawa and the provincial capitals, will be invited to organize local celebrations on similar lines.
Members of the defence forces will be free to participate in any functions arranged by local authorities.
As a special act of thanksgiving on the part of the people of Canada on the occasion of this anniversary, His Excellency the Governor General, on March 1st, will initiate an appeal for the establishment of a permanent fund, to be known, by His Majesty's gracious permission, as the "King George V. Silver Jubilee Cancer Fund for Canada." An opportunity will thus be afforded to every household that is able and willing to contribute to participate in providing a permanent Canadian fund which will promote the welfare of our people in memory of this great historic occasion in the history of the British empire.
In due course it is proposed that both houses of parliament shall submit a loyal address to His Majesty the King.



LEAGUE OF NATIONS ASSEMBLY

[Stage Direction]
On the orders of the day:
Mr. JEAN-FRANQOIS POULIOT (Temis-couata): With reference to the statement made by the Prime Minister on January 29, 1935, Hansard, page 310, to the effect that the report made by the Canadian delegates to the fifteenth assembly of the League of Nations had been laid on the table of the house, in English and in French, a few days before, may I call the attention of the government to the fact that, on applying for a copy of the report in French from the distribution office, I found that it was not available. I would ask therefore when the French copies of the report will be available.
Richard Bedford Bennett: 

TIM BUCK'S OTTAWA MEETING

[Stage Direction]
On the orders of the day:
Mr. ANGUS MacINNIS (Vancouver South):: May I ask the Minister of Justice whether any instructions have been issued to the Royal Canadian Mounted Police to prevent Mr. Tim Buck from speaking in the city of Ottawa?


Hon. HUGH GUTHRIE (Minister of Justice):: The matter has never been brought to my attention. No instructions have been issued and no discussion whatever has taken place in regard to it.



POTATO GRADING

[Stage Direction]
On the orders of the day:
Hon. P. J. VENIOT (Gloucester):: Can the Minister of Agriculture provide me with a copy of the regulations regarding the grading of potatoes in the maritime provinces and in Ontario?


Hon. ROBERT WEIR (Minister of Agriculture) :: I shall be glad to.



PRECIOUS METALS MARKING ACT

[Stage Direction]
Hon. R. B. HANSON (Minister of Trade and Commerce) moved the second reading of Bill No. 2, to amend the Precious Metals Marking Act, 1928.
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Smith (Cumberland) in the chair.
On section 1-" Mount."
Mr. HANSON (York-Sunbury):: Perhaps I should give a brief explanation of the bill. The amending bill and the statute of 1928 itself are designed, first, to protect the buying public in their purchases of articles made of precious metals and, secondly, to protect the dealer and manufacturer. The amendments proposed are minor in character and few in number and should not long detain the attention of the house. The measure itself has been submitted to the manufacturing and retail trades and they have practically unanimously agreed to its terms.


[Stage Direction]
Section agreed to.
Sections 2 to 4 inclusive agreed to.
On section 5-Certificate of master or assayer of royal mint to be evidence of facts stated in certificate.
Mr. CAMPBELL:: Has any application ever been made that a referee be allowed under this section? What I mean by referee
is this. Wherever assays are made settling any dispute, it has been the custom to have more than one assayer.


Richard Burpee Hanson: I do not understand that such is the case. I would direct the hon. member's attention to section 18 of the act, which provides in effect that the certificate of the assayer shall be final as a matter of evidence. We must have some way of proving the assay, and in all matters where that sort of thing is done in government offices, where analyses are made, in dealing with that class of evidence or testimony the certificate of the government officer is final and conclusive. I have in mind many of the acts relating to temperance, particularly the old Canada Temperance Act, under which I operated for a great many years, as I have no doubt hon. members who were practising at the bar in the old days also did. You could not proceed otherwise, and it has never been suggested as far as I know that there should be a referee. What is sought here is to meet a difficulty which is arising in connection with the act by reason of court litigation.


Colin Alexander Campbell: What I mean by a referee is this. When disputes arise in connection with assays, even although the assays are made very carefully, many times, when another assayer makes an assay by the same method, it is found that there is a slight difference which is apt to cause trouble. That difficulty is usually met, in settlements in connection with the sale of minerals or metals, by what is known in the mining or metallurgical industry as a referee. I am not suggesting the appointment of a referee, but provision that another assayer may come in.


Richard Burpee Hanson: The matter has not been called to my attention. If that principle is feasible, we have in Ottawa the royal mint and their assay should be final. On the broad principle, I should say that for purposes of prosecution under this act the certificate of the government official should prima facie be final in every case. I do not think there is any reason why we should depart from the practice that has heretofore obtained.


[Stage Direction]
Section agreed to.
Bill reported.

[Stage Direction]
Hon. E. N. RHODES (Minister of Finance) moved that the house go into committee to consider the following proposed resolution:
That, it is expedient to amend the Canadian Farm Loan Act to facilitate and increase the extension of credit to farmers, to authorize the
[Stage Direction]
Farm Loan Act-Mr. Rhodes
Minister of Finance to purchase additional bonds issued by the board and guaranteed by the government, and to amend the provisions relating to the constitution of the board, the purchase of capital stock, the rate of interest, the amount of outstanding bonds, and supplementary advances.
He said: I am in the hands of the house whether it is preferred that I make a general statement at this stage or we go into committee where there would be a wider opportunity for question and answer in case that might be considered advisable.
Mr. STEWART (Edmonton):: May I suggest to the minister that we should like a statement now, not too extensive, but giving us a clear explanation of what is intended by the bill to be founded on the resolution?


Edgar Nelson Rhodes: All right. I shall deal only with the general features and the main purposes of the proposed bill, reserving a more detailed discussion to the time when we are in committee on the bill itself.


Mr. ELLIOTT:: Perhaps the minister might indicate what changes in interest he has in mind?


Edgar Nelson Rhodes: I shall deal with that question as I pass on.
Perhaps the chief purpose of the bill is to do away with the dual control, the divided responsibility and of necessity, of course, the conflict of interests which it has been found in practice has arisen by reason of the fact that we have had provincial boards and the dominion board working under the old arrangement. Under the bill which will be submitted founded upon this resolution, the provincial boards will be abolished and there will be one dominion farm loan board, provision being made for the appointment of a representative of the board in each province. Further, if it is thought desirable, there will be appointed an advisory board to act with him should occasion demand. I may point out in this connection that apart altogether from the difficulties which are bound to arise through the divided authority, the dual control of which I have spoken, the difficulties of the board in its operation have been increased by reason of the fact that the act heretofore has never operated throughout the whole of Canada. For example, it has never operated in Saskatchewan, nor in Ontario, nor in Prince Edward Island, the operation of the dominion act being dependent, according to the terms of the act itself, upon legislation being passed by each province in turn; and as I have indicated, so far at all events the act has not been availed of by the three provinces named.

The board as at present constituted is composed of four members, one of whom is the Minister of Finance who is the chairman. I can not see that any good purpose will be served by discussing the broader question as to the wisdom of a minister of the crown attempting to preside over a board of this character, but I will say this, that with the demands upon the time of the Minister of Finance it is physically impossible for him to attend to the detailed work of presiding at meetings of the board and dealing with individual instances of loans. It simply cannot be done and as a matter of fact, during the whole period of time in which I have had the honour to occupy the office of Minister of Finance, I have been able to attend only one meeting of the board and that was on an occasion of special significance, having to do with the matter of dealing with general, broad principles. So, under the new bill we are proposing that the board shall consist of not less than three nor more than five, the chairman of which shall be the commissioner of farm loans.
Another important provision is enlarging the amount available by way of loans. It will be recalled that under the original Farm Loan Act of 1927 the dominion was authorized to advance a sum only up to 815,000,000, but in the amending act which was passed at the last session we enlarged the amount available to the board in the sum of $40,000,000 by way of advance from the dominion treasury plus an additional $30,000,000 to be made available to the board by means of a dominion guarantee of the bonds of the farm loan board. That provision is not disturbed but we have enlarged the amount in each case by 810,000,000, making a sum of $90,000,000 altogether available for the board.
The proposed bill does away with the provision calling upon the borrower to subscribe to five per cent of farm loan stock and it follows that it should also do away with the necessity for the province subscribing to five per cent of the farm loan stock. Inasmuch as we have encouraged such investments there are contracts outstanding in virtue of which the provinces have subscribed in the aggregate to between $400,000 and 8500,000 of the stock of the board. There is provision in the bill whereby that amount of money be returned to the several provinces that have subscribed.
My hon. friend (Mr. Elliott) has referred to the question of interest. He will recall that in the original set-up of the act it was clearly outlined that the amount of interest to be charged was to be determined by the cost of

Farm Loan Act-Mr. Elliott
money to the board. That principle is not disturbed and it will depend entirely upon the going rates from time to time as to the rate which must be charged tio the individual borrower. While prior to September last I think it was, perhaps a little later, the dominion charged five per cent to the board for money which had been advanced from the federal treasury, that rate was then reduced to four per cent, and I may say, having regard to the then cost of longterm money, because it must be borne in mind that the bonds of the farm loan board are issued for a period of twenty-two years, four per cent was a fair rate. Since that time there has been a lowering of interest rates and while I cannot anticipate the action of the government with respect to a given time or a given rate, it rather looks to me as if it would be possible for the government to lower that rate to three and a half per cent, but I can only announce in a general way that it is the policy and the desire of the government to make available to the farm loan board money as cheap as it can possibly be advanced.
The question of spread between the cost of money to the board and the price at which money is loaned to the individual farmer is of course another matter. I do not know that it would serve any good purpose for me to go into that now other than to say that it is the opinion of the commissioner, Mr. MacLean, and his associates that to keep the board on a fair actuarial basis there should be added to the cost of the money to the board two per cent to cover co^t of administration and a margin of reserve sufficient to build up a fund which could be drawn upon from time to time to absorb the inevitable lasses which occur in making loans. I feel however that that can be reduced, but certainly not below one and a half per cent, because the minimum cost of administration will be one per cent, without any margin of safety whatever. I't may be borne in mind however, that as the sum of loans made increases the board's overhead will be spread over the larger total and therefore the percentage of administration cost will tend to diminish. But in any case, if we are to keep the board in sound financial condition I do not think we can safely go below a margin of one and a half per cent.
There are a number of minor amendments to the act, merely to make it fit in with these broad general principles, but speaking generally I have covered the main alterations and the general principles of the measure.


Mr. MARCIL:: Will the minister give the names of the members of the board at present?


Edgar Nelson Rhodes: The board at present consists of Doctor J. D. MacLean, Mr. Charles Duquette and the Minister of Finance. There is one vacancy.


John Campbell Elliott: perhaps I may be pardoned for taking a short time to point out to the minister in charge of the bill and to the Prime Minister and -to the other members of the government who are in the house the immense importance of the subject now under consideration to the farmers of this country. Throughout the country everyone is of one mind in regard to the necessity of making the overhead in the basic industries of production as low as possible. Of these basic industries, all of which are important, I submit that no other is so important as that of agriculture, in which more than fifty per cent of the population of the dominion are engaged. I say to the minister very seriously that while the lot of the farmer has not been easy at any time in the history of this country, it has been much easier at some times than at others. For the past number of years the farmer has been experiencing perhaps the greatest difficulties of anybody engaged in any industry.
I should like to point out something as to the way in which the interest rate has worked in regard to farm loans in, say, the last quarter century. I think I have had fairly wide experience in connection with farm loans. Hon. members will bear in mind that, say, thirty years ago, the loan that was most desired by people who were lending money was what was called a gilt-edged farm loan, one in which the amount loaned was not more than fifty per cent of the actual value of the farm, the value for which it was thought at that time it could be sold at almost any kind of a sale. I recall loans being made to farmers thirty years ago for four and a half and four and three-quarters per cent. Five per cent was quite common. Perhaps the best evidence that could be had of how urgent the present problem is and the great difficulties under which the farmer has been labouring in recent years is the fact that those who were formerly anxious to get farm loans, more anxious, as I say, to get loans on farms than on any other security have practically gone out of the farm loan business in recent years. That has made the position very difficult for the man who has had to borrow money to enable him to carry on his farming business. I submit to the minister that no set of people engaged in any occupation in this country have borne a

Farm Loan Act-Mr. Elliott

heavier share of the burdens of taxation and the other burdens incident to pioneer life in this country than the farmers. I think this is the time when the government should take a very generous view with regard to the rate of interest that should be charged. It is a fact that many of those who are lending money in recent years have felt that it was only the fair thing to do, in view of the low prices the farmer was getting for what he had to sell, to make reductions in the interest and to make substantial reductions in the principal. I think that has been fairly general in regard to farm loans from one end of the country to the other. I might point out that nothing is more to the advantage of the lender than to have a rate of interest which the farmers can pay. A high rate of interest is absolutely impossible in recent years. It is much better to have a rate of four per cent and have the farmer feel he can pay it than to charge five and a half or six per cent, and in some cases higher rates-


Mr. VALLANCE:: Eight per cent.


John Campbell Elliott: Yes, but of course eight per cent does not do much good to the lender because he does not get it paid. It is much better to charge four per cent and get it than to charge eight per cent and not get four. That is about the way it works out. The figures the minister has given show that he expects to be able to borrow the money at three and a half per cent. Allowing two per cent for the cost of administration and the losses that must arise in a lending business brings the rate to five and a half per cent, if I understood the minister.


Edgar Nelson Rhodes: That is at two per cent, but it may be one and a half per cent.


John Campbell Elliott: Yes, if it should be one and a half per cent the rate will still be five per cent. What I wish to point out to the minister and the government is that at the present time five per cent is altogether out of proportion to the prices the farmer is getting for the product from which he has to pay that interest. I should like to make a few comparisons as to what four per cent means to the farmer to-day with what six and a half per cent meant when this act was first put into force, what five and a half per cent meant later on, and what either five and a half or five per cent would mean to-day. May I direct attention to the following figures, which show the relationship of the prices of farm products and manufactured goods in the years from 1927 to 1934 to the prices in 1926. Take 1926 prices as represented by 100:

	Farm	Manufactured
	Products	Goods
	%	%
1926	100 0	100.01927	102.1	96.51928	100.7	95.01929	100.8	93.01930	82.3	87.31931	56.3	74.81932	48.4	69.81933	51.0	70.2December 1934.	61.6	72.7
I point out this fact to the minister and the other members of the government in order to show that for what he buys to-day the farmer pays a much higher rate than he receives for what he has to sell. I point it out also in order to show that to-day four per cent is as high a rate as he can possibly pay. It is equal to a rate of six per cent or six and a half per cent in 1927, judged by what the farmer received at that time.
What is the reason for this situation? I ask hon. members if any one has any doubt at all as to the reason why farmers cannot get loans on their properties to-day except through farm loan boards or organizations of that kind. The reason is not that farmers are less thrifty or less industrious than they were fifteen, twenty or twenty-five years ago. It is that the overhead has become so high and the prices for farm products so low, that it is practically impossible to pay taxes and make ends meet on the ordinary farm to-day, even with the farmer and his family working without wages at all. We talk about minimum wages, unemployment insurance, short hours of labour and all the rest of it. These are all admirable in their own place. No doubt they are necessary in the life of a country developing as Canada is, but I should like to point out that the farmer and his wife and family have no minimum hours of labour or minimum wages. As everyone who knows anything about farm life in this country is aware, they work long hours, depriving themselves of most of the luxuries and many of the absolute necessities of life, and at the end of the year they find themselves in many cases unable to pay their taxes. In other cases they are able to pay part of the interest on the mortgage, but during the last few years it has been very seldom that they have found themselves able to pay any principal.
I am in perhaps as good a position as anyone in this house to know just what difficulties have been encountered by the farmers in the last few years. Those who have not been so enterprising as some of their neighbours have fared perhaps better. The man who in 1925, 1926, 1927 or 1928 had enough faith in himself and in his wife and family to buy

Farm Loan Act-Mr. Elliott
an additional farm and place a mortgage on it, to-day finds himself not only unable to pay any of the principal on that mortgage but has to exert himself to the utmost to pay the taxes on the two farms. In many cases I know of excellent families, descendants of pioneer stock, who for three or four generations have no.t known what it was to be sued, who are being driven off not only the second farm but also off the old home farm because of their inability to keep up payments on the mortgage.
I realize the difficulty in balancing the budget; I realize that this is perhaps the most difficult time we have ever had in Canada in that regard, but I do want to urge upon the Minister of Finance, the Prime Minister and the other members of the government that something must be done if you wish to keep the people on the farms to-day instead of having them move, as many of them have moved in the last few years after their mortgages have been foreclosed, off the farms into the cities, where they swell the bread lines and increase the number of unemployed. If the people are to be kept on the farms you must bring down the rate of interest to at least four per cent. They cannot pay any more. I do not think that will be denied by anyone who is familiar with farm life. If at four per cent there is to be a loss I think at this time the government should bear that loss in the interests of the struggling farmers from one end of this country to the other.
What has taken place in regard to the interest paid on bank deposits? Within the last year the interest on savings bank deposits has been reduced from three per cent to two per cent, a reduction of one-third the former figure or one-half the present amount. The loans that are being floated both by this government and by the Ontario government do not cost nearly as much as they did a few years ago, and of course on short time loans the rate is very much better. I believe that with the utmost care in selecting the persons to whom loans are made the rate can be brought down to the figure I have mentioned. I do not believe any government could grant all the applications that might be made; I think that would be suicidal.
The loans must be kept within reasonable bounds, and the amounts must be such that the farmers can expect to repay, because after all the government do not want a lot of farms on their hands. If they are forced to take over some of these farms they will realize some of the hardships the farms have had to endure in the past few years. I know of one man in a neighbouring county to the one 92582-261
in which I live who was very well off, with a number of mortgages on different farms. I do not know who advised him to do so, but he foreclosed those mortgages when the interest and some of the principal was not paid. As a result that man has had ten or eleven farms on his hands for the last year or two. He was badly enough off before but he is completely bankrupt at the present time. You cannot get anyone to work a farm now at any reasonable rate of rent. As a matter of fact a good many farms throughout the province of Ontario are being rented for taxes at the present time. I expect to have an opportunity later on to say something, but before the bill is introduced I should like to urge upon the minister with all the power at my command, that this matter is most vital to Canada's greatest industry and to the welfare of the Canadian people as a whole. There is not much more that I desire to say now.
We talk about the cost of overhead. No person who knows anything about farming conditions will argue that to-day overhead is not very much greater than it was a few years ago. No one who understands the difficulties with which the farmer who has a mortgage on his farm has to contend will argue that interest is not overhead. Unless we can decrease substantially the overhead to which I have referred we will find many good farms abandoned by some of our very best farmers. That may not be a very bright picture, but it is the truth, and I can see no object ini concealing it.
As I understand the situation the government of the province of Ontario believes that at current borrowing rates they can afford to loan money to the farmers at the rate of four per cent; I hope they can.
During the years to which I have referred I placed loans in the district in which I was practising to the extent of many hundreds of thousands of dollars. Those loans were made on onfy what we call gilt edged security. I believe I reflect the views of the people who loaned the money when I say that during those years even with the low rate of interest a few hundred dollars would pay all the losses that occurred. That has not been the case in recent years.
Perhaps I could not say what I wish to say better than by repeating something I said to the house on a former occasion respecting the plight in which the Canadian farmers now find themselves. Speaking in this house on April 14, 1932. I used words which I believe would apply with equal force to-day and will indicate conditions now existing:

Manitoba, Mr. J. R. McLean of Reston, under date of December 27, 1934. It is as follows:
We have a Federal farm loan board who have not been loaning any money in this territory for some time, although loans have gone through in other districts, and under the new arrangement second mortgages can be secured at low interest rates, for those favoured the last few years with good crops, districts which have been less favored than ours in past years.
I myself have lived in this district for 42 years, having farmed for myself for 31 years. All I own or possess, I have accumulated in 25 years from the farm, the last six years being unprofitable for farmers. I have at least spent $25,000 in improvements, and paid for 2| sections of land as well as $10,000 worth of stock and equipment in the said 25 years, and had clear title to everything previous to the depression. My stock has mostly disappeared by sale for living expenses since.
I made application in 1933 for a loan from the Federal farm loan board and had my farm inspected twice, the last time by the superintendent himself from Winnipeg, J. H. Martinson, and my application has been turned down because of conditions in this locality. This has been done, according to Mr. Martinson, by the head office. This is his assertion, and he goes further to state that he has recommended my application. But I have it on good authority, in fact the best, that the head office has turned down applications from this district which is in your constituency, on the advice of the Manitoba board "which is composed of Mr. Martinson and his two colleagues" and that the head office do not approve of any loans in this district until conditions change.
Now, myself and dozens of others who have still equity in our farm cannot carry on without assistance, and the only assistance I need is a loan to straighten up accumulated debts since the depression, and a nest egg to continue and put in a crop in 1935. I am not going to ask for relief nor accept any, but it seems the first function of a government under the circumstances is to help those who are willing to help themselves, people who have got into difficulty through no fault of their own. I think loans should be made to farmers who have the security to offer, at a low rate of interest, so they can proceed to put in a crop next spring. It is not when seeding starts we need money, but before, so we can he prepared when spring opens up. I hope you will give this matter thought and bring it to the attention of the proper authorities.
After living here for most of my life, and knowing the country with recurring dry years,
I have not lost faith, remembering the great prosperity we enjoyed in years we had sufficient moisture, and it will return.
Yours truly,
Jas. R. McLean.
Then, as a typical example, I show hon. members a page from the Country Cuide of its issue of March, 1930. This page shows the place of this farmer, J. R. McLean, and it points to him as an example to the farming community of Canada. It shows his house electrically lighted, his fine class of live stock, and the buildings which Mr. McLean says cost him some $25,000.
(Mr. Willis.]
Now what I desire to point out first is that in a case such as Mr. McLean's apparently neither the Manitoba board nor the federal board take any cognizance whatever of the past record of the farmer. I would point out that the ordinary farm loans are for the period of twenty-three years, not one or two. It seems to me that the Canadian farm loan board should adopt a businesslike basis, or place the prospects of repayment on the basis of the record of the farmer and the record of his land. Rather, it seems that they ask one question and only one: Did you happen to have any rain last year? They ask no questions in regard to the crops he had in 1926, 1927, 1928 and 1929. They pay no heed to the fact that during these years the district produced the greatest and the best crops in the province of Manitoba. I submit that the board should follow the ordinary banking practice, which is to investigate the character of the individual and appraise his security and his possibilities of making repayment of the moneys borrowed during the length of the mortgage. At the present time it is undoubtedly true that they are making loans in other parts of Manitoba not nearly as productive over a period of ten years; rather they are making loans where for the last two years they have had some rain, whereas these same districts a few years ago, and for a long period of years, were flooded out by water.
The second point I want to make and the second criticism is that the policy of the Canadian farm loan board is hampering the operation of the Farmers' Creditors Arrangement Act brought forward by the government last year. One of the greatest difficulties in that regard is in connection with rates of interest. If the people in my district could obtain loans at 51 per cent they could, under the machinery of the Farmers' Creditors Arrangement Act, obtain a small loan and pay off their creditors, who would be glad to accept cash for maybe 50 or 75 per cent of the amount, and they could start again on the basis of 5| per cent and be very glad to do it. Moreover, it seems to me that the attitude of the Canadian farm loan board is a direct negation of the policy of the federal government. The federal, the provincial and the municipal governments are pouring into that district moneys for the purposes of relief. These governments, in effect, are saying to the people, " We believe you can make a go of it. We believe this is a phase which will pass, this is merely a dry cycle which you have experienced before, and we will help you to carry on." Rut the Canadian farm loan board in its great wisdom comes forward and says, "No. We won't even inspect your

Farm Loan Act-Mr. Willis
farm. We care not whether you have $25,000 worth of buildings and want a loan of only $500 and no more, that has nothing to do with us. We have said it will never rain on your farms again." Remember, the period of the loan is twenty-three years.
In my opinion the attitude of the Canadian farm loan board is entirely incorrect. In Manitoba there are two areas; one is known as drought area A, which is the worst drought area in Manitoba, all unfortunately within my territory, and there is outside that drought area B, not so badly affected. While I have not been able to gather evidence, it seems to me that the attitude of the board is simply this. They say merely, " Oh, you are in drought area B," or whatever it may be. May I say to this house and to the Canadian farm loan board as well that within the so-called drought area B there were this last year crops of 40 bushels of wheat to the acre. It is designated drought area B owing to the fact that the division is by municipalities. Now, the municipalities in western Canada are very large, with the result that you may have complete dryness in the south of the municipality, causing it to be designated drought area B, whereas in another section you may have, as in fact we did have last year, ample crops-good returns to the farmer and apparent prosperity. But they simply say to the farmer that he is in drought area B. As the hon. member for Lisgar (Mr. Brown) knows, in the municipality of Roblin the southern part may be designated drought area B whereas in the northern part there is apparent prosperity.
The Canadian farm loan board points out correctly that it is not loaning money on compassionate grounds. Certainly it should not loan money on compassionate grounds but should loan on a business basis. May I point out to them however that they can do better from a business point of view by making loans at the present time than they could ten years ago because now a man like McLean, owning two and three-quarter sections of land, with $25,000 worth of buildings would be willing to accept a few thousand and give them a first mortgage, and they would have security which they could not have obtained had they lent the money ten years ago. Further, at the present time within these areas, owing to the fact that in the last couple of years they have had no rain, there is great opportunity for anyone from the standpoint of investing money for the purchase of land, because it can be done so easily. Cash is so important at the present time that they are willing to sacrifice what they have in order to carry on. Therefore greater security can be obtained.
In my opinion, at the present time they are loaning moneys to districts in the northern part of the province which have no past record and no great prospects for the future. But in view of the fact that at present and for a short while they have had some rain there is a willingness to loan moneys there at a time when they could do better, from the point of view of security, by placing loans in other sections of the province.
With the amendments outlined by the minister I am pleased, because I think that the abolition of provincial boards will enable us, if I may say so, to place the blame in the proper quarter. The amount of the advance, $90,000,000, seems adequate. It appears to me however, if we can believe the words of these men, that it may be necessary to have a new personnel in the board in Ottawa, to revamp and reorganize it. It may be necessary to retire some of the members and perhaps the commissioner himself. I say that with all kindness. I do not think that at the time the Canadian farm loan board was set up it was ever contemplated that the present personnel would handle $100,000,000; I do not think it was ever contemplated that the present machinery would do so. I am informed that the commissioner has an appointment dated January 1, 1929, for a period of ten years. In that respect he has his rights which should be safeguarded; he came here on that promise and certainly that should be safeguarded also. But if loans are to be passed by those in Manitoba who have inspected the land and know the situation and are going to be turned down at Ottawa simply because, as they say, the individual is in the drought area, then how can you bring about the change unless you change the personnel of the board? I trust that when the necessary changes are made they will be able to place on the inspection in Manitoba men who have had experience there, who understand where the proper security is and where loans can safely be made, rather than do as they have done in the past. It seems to me that direct federal administration will be an advantage. If the same old attitude is to be adopted as was adopted in the past and loans passed by the inspectors before coming here are to be cancelled and not granted; if the same attitude is going to be adopted in regard to the amounts advanced and the way in which the whole administration is carried out, then it may be necessary, safeguarding the interests of the commissioner in every way, safeguarding his rights, that either he be surrounded with a new personnel or-and I say this in all kindness-the commissioner himself be retired or his attitude changed.
408	COMMONS
Farm Loan Act-M. Stewart (Edmonton)


Charles A. Stewart: I rise not to be critical of the administration of either the Farm Loan Act or any of the amendments that have been made during recent years in regard to the operation of the act itself, but rather, if I can, to suggest something that may be helpful. In my opinion the situation that to-day affects agriculture from one end of Canada to the other is the most critical in our history. I am simply astounded when I come here and listen to statements made by men coming from what we consider the garden spots of the dominion so far as agriculture is concerned, to learn that competent farmers of many years' experience are finding themselves in serious financial difficulties. I have nothing to say with respect to the administration of the farm loan board or any other board that have loans in the so-called drought areas. I asked a question of a friend of mine: Would you loan money under similar circumstances if it were your own money? When I say that may I say to the minister that the situation in Canada is so critical at the present time that the government in charge and, indeed, the House of Commons should be prepared to take extraordinary chances to save the situation. I for one am prepared to support extraordinary efforts to save a situation of this character. We have been forced to guarantee bonds of railway companies in order to save them and no one knows whether the Canadian people may be called upon to make good in some respects some of those guarantees that we have issued. Our experience in the past has been that even in prosperous times the farm loan business has been a bit precarious from the standpoint of receiving returns expected by those who loaned the money. This cannot be blamed upon the agriculturist. His is a very precarious occupation; he does not know when he makes his investment in labour and money in the planting of a crop whether he is going to reap it or not. I for one have had the experience of beginning to reap a crop and having it all destroyed in a period of a few minutes. That of course is not true of all Canada, but it is just an example of what happens in agricultural pursuits in all parts of this country. So I think we are safe in saying that it is a somewhat precarious undertaking or calling.
I felt the same in 1927 and 1 believe the dominion government in the interest of agriculture, which is so important to the welfare of this country, might by the adoption of a farm loan act be taking some chances on the repayment of the loan. I do not agree with the hon. member for Souris (Mr. Willis) who 
has just taken his seat, that the blame can be laid at the door of the personnel of the board. The Liberal government and this government have surrounded the operations of that board by regulations because it was thought they were warranted. Perhaps they were too onerous, but 1 think if my hon. friend will make inquiry he will find that even in the most prosperous sections in which loans have been made the board has a considerable number of unpaid interest claims. This to me is an indication that despite all the precautions of the board itself and the precautions by the government surrounding the operations of the board, they have not made it immune from the difficulties encountered by others who are lending money under a situation such as this. I make this statement because I do not want to speak in a critical way of either the board or the government itself. Agriculture, in my opinion the most important industry in Canada, is on the verge of bankruptcy and naturally the next thought that occurs to one is: then it must be a very precarious undertaking to loan money to an industry of that character. It is, and I therefore urge the minister and the government that particularly at this time special consideration be given to this matter and, indeed, some chances taken. I believe the government are warranted in taking grave chances, if you will, to save the situation.
As regards Alberta, I am not going to say a single thing about the southern portions of the province; what I have to say and the information I have gathered refers to the northern section where we have never had a crop failure, where eveiy year the farmers have been in receipt of reasonably good returns for their labour in the way of crops. Yet in those favoured localities which are in the constituency which I have had the honour to represent for the last four years-and they are but typical of other sections of the whole of the northern portions of the western provinces-at least 70 per cent of the farmers are facing bankruptcy. That seems a large proportion; nevertheless it is true and seven or eight years ago they were rated among the most prosperous farmers in the country. Conditions however have been such with respect to the price levels that they have been receiving for their produce that they are in that unfortunate position to-day. So bad has it been that the provincial government in their wisdom or otherwise some years ago felt it incumbent upon them to pass what they called a debt adjustment act. It turned out to be nothing more nor less than a debt suspension act and while the creditor could not take

Farm Loan Act-M. Stewart (Edmonton)
action, the unfortunate farmer found himself faced with rapidly increasing responsibilities due to the accumulation of interest and very frequently the accumulation of unpaid taxes. That is the situation which confronts us today. Last year we passed in this house a debt adjustment act and under its provisions we were hopeful that some amelioration could be secured for the farmer. That act has a back-fire that perhaps we did not anticipate in the last session of parliament. The man who is most vitally affected is usually the retail merchant in the locality who has granted credit to these farmers. While his credits may be cut down very materially there is no way for him to secure a reduction of his own indebtedness, incurred largely through giving those credits. I mention that in passing to indicate to the government and the house what a serious situation is developing in Canada in this connection, and how hazardous the tenure of ownership or even tenancy on the farms is becoming. To-day no one is prepared to lend money to an individual engaged in agriculture. That cannot be denied. I have interviewed several mortgage companies and life insurance companies engaged in this business and they say: Not another dollar except to protect the investment we already have; and we would be glad to get our money and get out. That is their attitude. I think the government are to be commended for anything they can do by way of improvement of the act and in securing a larger amount of funds to loan to meet this very serious situation. Last year, in conjunction with the Farmer's Creditors' Arrangement Act, provision was made by amendments to this act that loans could be made for the purpose of tiding the farmer over his serious situation while investigation was being made. I do not know how far that has worked out, I have no information as to how much was done, but judging from what I learned in Alberta very little was done by the farm loan board in the way of loaning last year. I am not going to be critical about that. But the situation in a great many, cases where composition of debts was being sought was that it appeared that while most of the creditors were willing to compromise in a reasonable way on their debts the main difficulty was the mortgage itself, usually held by some corporation. If my information is correct, the corporations holding the mortgages were quite willing to surrender them at some considerable reduction if they were paid off. That would mean of course the transfer of that mortgage to the farm loan board, they being the only agency through which loans might be secured.
But my information is-I cannot say that I know anything personally of this matter- that even with the cutting down by the mortgage companies to a reasonable degree of the principal and accumulated interest as proposed, the amount as so reduced would still exceed the limit of seventy per cent of the present selling value of the land and therefore the farm loan board would be unable to make the loan. I do not blame the farm loan board, but in my opinion we have got to give much more leeway to the board than we have in the past. We have got to modify the regulations. I have never lost a crop on my farms. I had them valued some years ago but if I were asked to-day what they are worth as a productive enterprise I really do not know what I would value them at. And as I say, although we have been frozen, in no year have we lost a crop on those lands and they are typical of a great many others. But if I were sent there as an appraiser to say what the value of a farm is to-day I would have great difficulty. It is all right to talk about the experience of the past, but what is going to be the experience of the future, in the light of what has happened in recent years?
So my whole plea is that a very lenient view be taken of this situation, and that the government take some extraordinary chances in loaning money in order to keep our farmers on the land. The procession of farmers off the land in western Canada, or arrangements with the mortgage companies to farm for the purpose of paying the taxes or on a basis of one-third of the crop, which is the usual rental for farms in that locality, is going on at a tremendous rate. Such a condition breaks the spirit of people who have spent twenty-five or thirty years of their lives trying to build up a competence for themselves and their families. It is useless to go over a recital of what a farmer and his family do in the way of actual labour to secure the returns that they get from a farm even in prosperous years. I do not want to interject a single word that would suggest .that I am blaming the policy of the government for the present situation; I may do that at another time, but this thing is too serious to make a political issue out of it. I shall deal with the policy of the government on another occasion, and perhaps deal as harshly as T can with them in order to see if some amelioration will not be granted in that regard. But I say, speaking for myself, that I am prepared to back the government in taking some very grave chances. I welcome to some degree the suggestion of complete control. A common expres'
Farm Loan Act-Mr. Rowe

sion in western Canada is that there is too much passing the buck when you have the two bodies operating in this connection. With complete control we could at least know who was to blame if loans are not consummated. I make this suggestion. Perhaps there never has been a more favourable time than the present to borrow money. I have not given this suggestion the consideration it deserves, and I do not know whether it is workable but it is that loans be shortened to a period of five years. If in that time we do not have a change in price levels for farm products it will not make much difference whether we have farm loans or not. Our devout hope is that price levels will rise and then the question of interest becomes not so important. I make the suggestion in the light of our past experience that interest rates be based on basic commodity price levels. For a shorter period I am sure the minister can go into the money market and borrow at a much more favourable rate than he can for a twenty year period. Then leit the benefit of this cheaper money, borrowed for shorter terms, with the government guarantee, be passed on to the borrower on a five year loan, which was the usual period of mortgage loans in western Canada made by the mortgage companies. That at least would carry us over the difficulties of the present time. With this perhaps also should go a reduction in interest to the rate suggested by the hon. member for West Middlesex (Mr. Elliott). I make this suggestion so that the minister may have a chance to look into it before we come to discuss the details of the amendment.
In conclusion I would say that anything the government may propose, any chance they make take which they themselves deem hazardous, will I think receive the warm support not only of myself but of other members from western Canada.


Mr. W. E. ROWE (Dufferin-Simcoe):: I am very glad that I can agree with a great deal of what the hon. member for West Edmonton (Mr. Stewart) has just said. I am sure there is no member in this house who understands rural problems but will agree that this question far transcends political controversy. I feel that I must support the government very heartily in approving of the suggested amendment to the Farm Loan Act. I feel satisfied that many of the problems mentioned in this house have been rather confused with the debt problem of the farmers. As the previous speaker said, agriculture is in perhaps a more difficult situation to-day than it has been for many years, though I do not think it is as difficult as it was two or three years ago. The

hon. member for West Middlesex (Mr. Elliott) suggested that the rate might be lowered to 4 j- per cent; personally I would be glad to see it reduced to 4 per cent but, as hon. members know, the Farm Loan Act provides that the rate must be sufficient to provide for the issue of bonds, the building of reserves, and the expenses of administration. I hope that when the bill comes down I may be able to deal more fully with this point and offer some suggestions.
In the province of Ontario I feel that recently the farmers have been in a rather more difficult position with regard to farm loans than has been the case with the farmers of other provinces. In this province we had applications made to the government by over a thousand farmers prior to the last provincial election, to which the hon. member for Southeast Grey (Miss Macphail) has referred. Of those applicants over five hundred had paid the inspection fee of $12 but, according to my information, not more than fifty applications were accepted. The nature of the mortgage situation in Ontario and the other provinces is very much as the hon. member for West Edmonton (Mr. Stewart) has stated; the fact that the provinces have issued loans in the past has more or less taken that business out of the realm of private enterprise and, as has been stated, the loaning corporations refuse to lend money, especially if the application has been refused by the province or by the farm loan board. In the province of Ontario, in which as the representative of a riding in that province I am vitally concerned, we have something like $55,000,000 in loans to some 17,000 farmers under the farm loan act of the province. In the past when a farmer needed a loan or desired to buy a farm for himself or his son he naturally thought of getting the money from the farm loan board. That was the custom for many years, but those loans were abruptly discontinued just at a time of crisis, when the need was greatest. During the last session of this parliament the Farm Loan Act was amended to provide that loans might be made not to fifty per cent of the value of the farm but to sixty-six and two-thirds per cent of the value of the farm and chattels, and I believe many provinces have taken advantage of that amendment and have passed enabling legislation.
That amendment was passed in this house in June of 1934, when unfortunately the legislature of the province of Ontario was not sitting. On June 19 an election w'as held; in fact the amendment was passed by this parliament while the election campaign was in full swing. No enabling legislation was passed

Farm Loan Act-Mr. Vallance
in the province of Ontario. The legislature has not met since the election, though we expected a session some time ago as was promised. At any rate the result has been that this enabling legislation has not been passed and relief has been withheld from farmers who are in dire distress, on the verge of going into bankruptcy, and, in some cases subject to the risk of losing the results of twenty-five years of work. During the last few months I have had scores of farmers plead with me to see some private interest and try to do something in the way of securing farm loans. The provincial government of Ontario have absolutely refused to issue these loans; they have refused to consider the thousand applications which were before the board at the time of the election, including the five hundred who paid their $12 inspection fee and whose applications had been approved even though in some cases gilt edge security was offered.
I remember one case in particular, that of a man who paid $13,509 for a farm. I know that man very well. He worked as energetically as any man could work; he suffered all softs of privations, difficulties and hardships, and he paid for the farm with the exception of $3,800. He pleaded with the province for a loan, but his application was refused. I understand that the reason given was that the previous government had failed to pass an amendment to the farm loan act, and the board had not the authority to issue the loan. I leave 'that example with this house for what it is worth. Everyone knows that the dominion Farm Loan Act was passed in 1927. Everyone knows that the amendments to that act were passed in June of 1934, just a few days prior to the provincial election. Just why the provincial board have absolutely refused to approve or deal with one thousand applications which were made prior to the last election is for that board to state. In the meantime our farmers in Ontario who have been seeking mortgages have found themselves in a more difficult financial condition than has been the case during the last five years. I have had scores of farmers at my home almost weeping, wondering what they could do.
For these reasons, Mr. Speaker, I am very glad that at the beginning of this session the government have seen fit to step into the breach and bring forward amendments to the act, extending further credit to the farmers of Ontario and of the dominion generally. I am glad that the government propose to take over the administration of the act, so that it cannot be said that we are passing the buck, and I believe they will make these loans at
the lowest possible rate of interest. I am glad that those who sit to your left, Mr. Speaker, have intimated that they are prepared to support these amendments, even though they may increase the risk of temporary loss to the government. I wish heartily to endorse the proposed amendment, because it comes when it is most needed in the province of Ontario and fills the gap created by what on the surface appears to be neglect on the part of .the provincial government who might have helped thousands of farmers in this province in these difficult times.


John Vallance: Mr. Speaker, we have heard from the
province of Aliberta, the province of Ontario and the province of Manitoba. I was very pleased indeed when I saw this resolution on the order paper:
Resolved, that it is expedient to amend the Canadian Farm Loan Act to facilitate and increase the extension of credit to farmers

I remember that last year, when we were dealing with the amendments then before the house, I asked the Prime Minister if this act was operative in the province of Saskatchewan. As the Minister of Finance has said to-day, up to the present time that act has not been in operation in that province. I understand that there is concurring or enabling legislation to make it possible for the farmers of Saskatchewan to come under the provisions of the Farm Loan Act. There are no people within my knowledge who have any greater need of extended credits than the farmers of Saskatchewan. In my opinion the Canadian Farm Loan Act is complementary to the Farmers' Creditors Arrangement Act. While going through a portion of the province of Saskatchewan I found many farmers who were anxious to take advantage of the Farmers' Creditors Arrangement Act.
What is the situation? We find the farmer going to the representative of the adjustment board and making a proposal. He places his cards upon the table and states, "I owe so much to a mortgage company, so much to a machine company, so much to a bank," and so on and so forth. "I would suggest in setting up this scheme that my debt be reduced by 33J per cent and that my interest rate be cut down from its present rate"-which may be 8 or 9 per cent. Hon. members coming from the western provinces are amused when they hear talk about interest rates as low as four per cent, five per cent or even six per cent on mortgages. That does not exist in western Canada. The farmer asks that the interest rate on his debt be cut down to six per cent. Of course the question is,
Farm Loan Act-Mr. Vallance

"What have you to offer?" "Nothing." What is the creditor going to do to me, a farmer, if I come to him and simply suggest that instead of owing him a debt of one hundred cents on the dollar he should accept at some future date seventy-five cents or fifty cents, as has been suggested, and cut the rate down to six per cent. I hope it may be possible under the proposed amendments and through the legislation now contemplated at Regina that the farmer of Saskatchewan may be able to go to the farm loan board and obtain a second mortgage or borrow up to sixty per cent of the value of his land and chattels. If he were able to obtain $1,000 or $1,500 or whatever amount the board saw fit to extend to him he could then approach his creditors and possibly make some adjustment. We find that in the province of Saskatchewan there are very few if any adjustments being made simply through lack of funds to make them. Representing a rural constituency in the province of Saskatchewan I feel that I may endorse all that has been said by the hon. member for West Edmonton (Mr. Stewart). As an individual from Saskatchewan I am prepared to give every assistance to the government in passing the legislation if such legislation is as outlined in the resolution.
Dealing with conditions in Manitoba the hon. member for Souris (Mr. Willis) directed his remarks to the dried out area. I cannot understand why the farmers in those dried out areas have found it difficult to obtain loans simply because of the fact that over a certain period of time the precipitation has been such and such or so and so. I should like to observe however than when we take a specific period of time between two points, periods of five or ten years, and leaving out the last four or five dry years, we find that the production in that portion of Saskatchewan now known as the dried out area was greater by volume and value than that of the northern areas. All the southern portions need is rain. I know rain cannot be given to them under the Farm Loan Act, but I do believe the act could help the farmers to carry on until such time as they do have rain. It is utterly impossible in many portions of western Canada, and more especially in the dried out areas, for farmers to borrow money, even on mortgages. Going through the country I had farmers tell me that the mortgage companies are not bothering them, the machine companies are not bothering them, and the banks are not bothering them. Why not? Because there is nothing to take. I say that if the farmers of Saskatchewan are contemplating an adjustment of debt now is 
the time to do it. If Saskatchewan's dried out area ever gets a crop, just watch the mortgage companies, the banks and the machine companies. If those dried out areas, over a period of years, can get back to their former average of production the banks, mortgage companies and machine companies will climb on to the farmers and make it utterly impossible for them to carry on. To-day the farmers are not being bothered, and my suggestion would be that they should get an adjustment of their debts. I think that would be possible. If with the $90,000,000 now at its disposal the board would advance credits to the farmers it would confer a great blessing not only on the dried out areas in Saskatchewan but on the western provinces generally.
My farm is located between the dried out areas and the northern areas. As the hon. member for Souris has said, one-half of the municipality might be said to be in the dried out area because, strange as it may seem, we find the dried out areas are slowly creeping north, annually. We find the grasshopper plague is doing the same thing. In my constituency we hope we will not have in the coming season a grasshopper plague such as we have had in the last two years. I have been in the one community for twenty-eight years, and only in the last two years have we experienced a total crop failure. I feel sure that when the farmers in the west, and particularly those in the province of Saskatchewan, read in the newspapers that the federal Farm Loan Act is to become operative, and that there is $90,000,000 to loan to the farmers, they will be greatly pleased. I hope the board will not deal too strictly with those portions of Canada which have not been so favoured climatically as many others.


Mr. V. C. PORTEOUS (North Grey):: Mr. Speaker, I should like to make a few observations concerning this resolution. Not from a political standpoint, and in all seriousness I want to say that never was there a more cruel decision made than the decision of the authorities in the province of Ontario to discontinue the operation of the Ontario development board. The hon. member for West Middlesex (Mr. Elliott) has said that thirty years ago farm mortgages were a gilt edged investment. As compared with other investments I would say the same is true to-day. I believe if an analysis were made of losses on investments we would find that the percentage of losses on farm mortgages in eastern Canada is very much lower than on other kinds of investments. The same was true, so far as ithe Ontario development board was

Farm Loan Act-Mr. Porteous
concerned. I had considerable experience in negotiating between that board and some of the applicants, and my experience was that upon some occasions the board were not lenient enough. They said they would not take mortgages over fifty per cent of the value of the farm. If that was not a gilt edged investment I do not know what could be.
A good many angles to this problem have been presented this afternoon. One was that we should have a lower rate of interest, especially in the province of Ontario, and with that I agree. Another hon. member believed there was not sufficient credit extended to the farmers at any rate of interest. I believe both those points may be well taken. I agreed further with the hon. member for Souris in his observations concerning .the dried out areas. In my view credit extended to the people in those sections of the country where crops are uncertain should be based on a long period, and not a short period of only two or three years. It should be on a long term basis for a period of possibly twenty years, and both from a business and actuarial standpoint the rate should be as low as possible; but, Mr. Speaker, it should be at cost. The farmer as yet is not a charity patient. If you were to base the rate of interest upon his ability to pay, then in some cases, judging by the last few years, the farmer would not pay any interest at all, but the farmers are not asking for .that sort of thing because it is charity. I believe that the farmers in some cases have been asked to carry burdens unjustly, 'but nevertheless they are not going to ask for charity.
The rate of interest should be as low as possible on a business like basis of course, and it should be at cost. That is all the farmers are asking. The cost also should be kept as low as possible. I think myself that a spread of li per cent is possibly too much. I think that with a fair administration of this program there would be very few losses, and I think there would be no losses at all if it is administered properly, in which case the spread could be less than li per cent. I also think that in the near future money will be borrowed more cheaply, and the rate of interest could be arranged so that it would be lower to the farmer than is anticipated at the present time.
I want to make just one more suggestion, and that is that in setting up the machinery to administer this act as amended, the minister should take into consideration the possibility of associating it with the Farmers' Creditors Arrangement Act. I think before
long, if we have not got them right now, we shall have some most enlightened receivers so far as the farmers' ability to pay is concerned under the Farmers' Creditors Arrangement Act, and I think that the advice of those receivers might be a great advantage to the board that might be set up, and I should like to see these two activities associated and carried on together.
As the hon. member for Dufferin-Simcoe (Mr. Rowe) and some other hon. gentlemen have said, the Farmers' Creditors Arrangement Act is now operative, but it does not go far enough, and if there was some credit available so that those people who have burdens of debt could receive credit, many of them would take fifty or sixty per cent of their debt and make a settlement.


Peter John Veniot: Mr. Speaker, I do not want to take up very much of the time of the house on this question of amending the Canadian Farm Loan Act, but I should like to call the attention of the Minister of Finance (Mr. Rhodes) to what I consider is one of the causes why the interest rate is so high, and perhaps it is also one of the reasons why the minister feels that the rate could not be lowered to the point that has been suggested during the discussion this afternoon.
I have had something to do with helping farmers to obtain loans under this act, and I find that the cost is extremely high. Take a farmer needing a loan of $1,000, for instance. He cannot get that loan under a cost of $50. First he has to send in $10 for an appraisal. Then an appraiser is sent out, and when his appraisal is in and the board is considering the proposition of making a loan to the farmer, he is instructed by the local board that he must be prepared to pay $35 or $40 more when the time comes to search the title and make out the mortgage.
Let me give a case in point. An application for a loan of $1,000 was made through the local board in New Brunswick. First we had to send $10 for an appraisal. The appraiser lives within half a mile of the man who was making application for the loan. There was $10, and all the work that that appraiser had to do could be done within three or four hours. The application is considered favourably. In the application you have to give a description of the property as it is on record. The lawyer or the legal firm to whom instructions are given to make out the papers have not much searching of records to do because the whole thing is there before them, and yet it costs the farmer $35 or $40.
Farm Loan Act-Mr. Verdot

Now such costly proceedings must add considerably to the overhead, but if you cut down that overhead, and I believe it could be cut down by 50 per cent on every application, you could also cut down the cost of administration, and that perhaps would give you the opportunity of loaning the money at a lower rate of interest.
I was pleased to hear the minister state that the local boards will be abolished. I understand by that, that the work will be done entirely from Ottawa, with the assistance perhaps of agents in the field. Let me draw the minister's attention to the fact that that will mean a considerable reduction in the overhead if the work is properly looked after. That is another source of reduction in overhead which may make possible the loaning of the money at the rate suggested in the discussion this afternoon.
But I should like to urge on the minister this point: For gracious sake, in naming appraisers, do not have it done in the way it is being done now by the local boards. Why, Mr. Speaker, the appraisers that are named in the province of New Brunswick have no more idea of valuing properties than I have an idea of clinching the moon with my teeth. I know it. I am interested myself, and have been for years, in the valuation of property, as chairman of boards of assessors and as chairman of school district boards, where the chairman and the secretary together have experience in the valuing of properties.
There is another point, although this may not be repeated under the amendment to the act, but in the past when times were very good, appraisers have been named who were interested themselves in loaning money to farmers, and when they went to appraise the property, they simply sent in such a report that the farmer could not get a recommendation from the local board for a loan. The local board was blamed for that, and the head office at Ottawa was blamed for it when it should fltit have been blamed except for naming such an appraiser. That appraiser, after seeing that he had knocked out the chances of the farmer for getting a loan under the board, would then come forward himself and lend the money. I know cases of that kind, and that is one reason why I am pleased to see that the local board is to be abolished and that the head office here at Ottawa will have charge of the administration of the act.
I feel sure that it will result in more efficient administration, with greater satisfaction to the farmer.


Mr. W. J. LOUCKS (Rosetown):: Mr. Speaker, I am sure it is a pleasure for me to endorse this resolution and to see such unanimity upon it. It seems that we are agreed one hundred per cent on the resolution, and I know it will be gratifying to the farmers of western Canada as well as to those of the east to know that the sum of 890,000,000 is to be devoted to the purpose the government has in view. Hon. gentlemen who have already spoken have indicated the difficulties which confront the farmers of the west, but I would point out that there are still a good many farmers who have not been forced to put on a first mortgage. The question therefore is, what about those who have not yet had to go to a mortgage company for assistance? Can they get any benefit through the farm loan board? So far as I have been able to ascertain, it would appear that there is a possibility for such farmers to get some assistance.
One important question, a question on which I feel very strongly, is that of interest. It has been my privilege in the last few months to see many applications favourably received for the writing down of debts owed by farmers. There is no question whatever about it that interest is a millstone around the farmer's neck, at any rate in western Canada. The debt is very often doubled as the result of interest. Take a mortgage of 85,000; in the last four or five years the debt has almost doubled. The average rate is eight per cent and when you compound the interest you can see how onerous the burden becomes.
As regards the Farmers' Creditors Arrangement Act, we are getting results. I have been receiving letters from farmers in my constituency in which they express their appreciation of the writing down of their debts. In other words, there seems to be cooperation . between the creditors and the farmers; there may be a few instances in which this is not true, but generally speaking it is. The other day I received a letter from a farmer who lives not very far from me. He is a man of about seventy. He told me that he had taken new heart and courage and he complimented the receiver in my town on the way in which he had made it possible for this farmer to have his debts written down. Previously, he said, he had been disheartened; he had given up hope; but now he feels that it is possible for him to meet his obligations, in part at any rate.
There is however a difficulty in connection with the unsecured merchants throughout the

Farm Loan Act-Mr. Loucks
little towns. Most of them would be glad to-day to take fifty per cent of what is outstanding in their accounts. That is the information I have received from most of the merchants in my district, but when they are asked to write down debts, however willing they may be to do this, there is no money forthcoming to enable them to finance their business. They are still obligated to the wholesalers one hundred per cent. They say that if it were possible for them to get fifty cents on the dollar from their debtors they could carry on. With that money they could go to the wholesaler and come to some arrangement with him, but it does not avail them anything to write down debts fifty per cent and receive no money at all.
In my part of the country I do not know how they are going to put in a crop this spring if they have no money, and most of the farmers have not a dollar. During the last three or four years the deterioration in machinery has been something terrible, and the trouble has been aggravated by the dryness, because the land is so dusty that the machinery deteriorates much more quickly than it would ordinarily. But I have not given up hope, Mr. Speaker. There is a future before us. I have lived in that part of the country for thirty years and until a few years ago I never had a complete failure, though I have experienced two now.
About the first of November I had occasion to visit the dried out area in my constituency, a district about seventy-five miles from where I live, where they have had four complete failures. In this district there are mostly Finlanders, and I attended a meeting of the ratepayers' organization, comprising some two hundred of these people. When they got to the meeting these farmers were apparently so discouraged that they almost felt like hanging the reeve of the municipality, whom they blamed for the plight in which they found themselves.


An hon. MEMBER:: A member of parliament?


William John Loucks: No, he was not a member of parliament. I was told that if I got on the platform something might happen to me, but I did. I told the chairman of this organization that I was not afraid to face my audience and so I got on the platform and spoke to these men-there were women also -for three-quarters of an hour, and then I suggested to the chairman that he should throw the meeting open for a sort of fellowship meeting. He did so, and I should like to give you the testimony of some of these
people, not all Finlanders. One man said, "I went through the great war, fighting from the beginning to the end. To-day I have a family of seven. This morning I took five of these children to school without any shoes on their feet, though it is the first of November. But I am determined to keep my children at school as long as I can." There was condemnation, not of this government but of the provincial authorities, on the ground that all they were allowing these people was $5 for adults for clothing. This man said it would not buy a pair of boots, and yet he had seen billions of dollars blown away in the great war. He said he had put in his crop the last year in the hope that there would be a harvest, and there he was, unable to get enough money to buy boots for his children. But what encouraged me, Mr. Speaker, at this meeting of two hundred ratepayers, was the optimistic spirit of the farmers after all that they had come through. They said that if it were possible for them to obtain a little bit of money to carry them along they were quite willing to continue.
When we reflect that a few years ago that country produced great crops, we cannot think that there is no future ahead of us. Indeed, the possibilities in Saskatchewan may be beyond the comprehension of some eastern people. We have excellent soil there; some of the best of it lies in that dry area. Would it be advisable therefore for these people to move to the western states, when we know that the same condition prevails right down to the gulf of Mexico?
I am glad that the Minister of Finance is taking steps to help the farmers out of their difficulties, making it possible for them to pay back the money in the future. But as I said before, I feel very strongly on the question of interest, which in my opinion should not be more than four per cent. When we take into consideration the overhead and administration of some of these mortgage companies, I think we are justified in the contention that interest should not be higher than that rate. In our section of the country many of the farmers are to-day assigning a third crop to the mortgage companies. Let me point out what happens in connection with those mortgages. An agent comes out and drives all over the farm to see how the crops are coming along and all this overhead is charged to the farmers in my section. There is no necessity for this because a crop survey is made every year. It is clear that a great deal of this overhead can be eliminated .
Farm Loan Act-Mr. Loucks

Further, the dominion government, if we are going to get lower rates, must set the example. There is no use in going to the mortgage or insurance companies to endeavour to get them to charge a lower rate. If the government cannot get cheap money for us it is hopeless to expect to get it from the mortgage and insurance companies. Just a few days before I came to Ottawa I visited the court of review in Saskatoon and I met the manager of the Toronto General Trusts Corporation. He knows me well. He said to me: " Look here, Bill, the government has not gone far enough yet. Do not forget this: we who represent the trust company are obligated for a great amount of money over in Great Britain; we are obligated also to insurance companies at a certain rate around five or five and a half per cent. The government of Canada should go to the fountain head, to those who loaned us the money, and see if something cannot be done by them to bring the rates down; then it will be possible for us and the other companies to meet the request of you farmers." In other words, he said: We are still obligated for five or five and a half per cent interest to big financial firms in Great Britain and even to insurance companies, some of them in this country, who have loaned us a great deal of money, so you see the necessity of the government going to the fountain head to find out if something cannot be done. While I have great sympathy for widows and orphans, I do not believe at the present time there is much money invested by the widows and the small investors; I think most of this money that is being administered through the mortgage companies is coming from big financial concerns. When I think of the farmers who went from eastern to western Canada, many of them from Ontario-and I am one of them-who took the risk and went out to the west as they did, investing there what they had, and who made good and made that country one worth while to live in, every consideration should be given by this government to those people so as to retain them on the land, looking forward to the time when conditions will improve.
The hon. member for Toronto Northwest (Mr. MacNicol) suggests that I should give the house some information as to what we have accomplished in that western country. The amount of wealth we have produced is too great to be realized, but billions and billions of dollars' worth of wheat have been taken out of western Canada. When I think of my own little town of Delisle shipping
[ Mr. Loucks r
over a million bushels of wheat in 1915, Rosetown shipping over a million bushels, and similarly with different towns all along the line-that was when wheat was at a much higher price than it is to-day-I think I am safe in saying that money has come from western Canada to the east in billions. One unfortunate circumstance affecting the people out there is that when the price of wheat went down so low the price of the things they consume did not fall commensurately, and that was pretty hard on the farmers.


Some hon. MEMBERS:: Hear, hear.


William John Loucks: 
Colin Alexander Campbell: Mr. Speaker, I wish to thank hon. gentlemen for allowing me to say a few words in regard to this resolution. I rise with a good deal of trepidation, this being my maiden speech in this chamber. I have listened with much interest to this debate, expecting that it would take on the aspect of a discussion of a resolution regarding a federal farm loan act, but I note that a good deal of it has been concerned with what has happened in Ontario in regard to the agricultural development board.

Farm. Loan Act-Mr. Campbell
Just in passing, before I speak directly to the resolution, it is only fair that I should say something respecting the working of that board during the last five or six months or a little longer. It is very true, as the hon. member for Dufferin^Simcoe (Mr. Rowe) and the hon. member for North Grey (Mr. Por-teous) have said, that during last summer and up to the present time many people in Ontario have been looking for loans. It is also true that a good many applications were received by the board prior to the election held on June 19 last, and that many of those applications were approved just prior to that election, and that some of them have not been approved by the board to the extent that a loan has been made. I want to make it clear to all hon. members that prior to the month of May the interest rate on farm loan mortgages in Ontario stood at six per cent. During the provincial election campaign, in which I had the privilege of taking an active interest, it was announced that that rate would be lowered to five and a half per cent and, as has been stated by the hon. member for Southeast Grey (Miss Macphail), it was cut to five per cent during the heat of the election. The people throughout the province did not really know just what was happening. When the new provincial government took office they made an investigation to find out just how the agricultural development board stood, and they discovered that some $55,000,000 of the people's money had been loaned throughout Ontario. One unfortunate experience was that many loans had been made, not for the purpose of allowing a farmer to permit his son to purchase a farm and some *new stock and start up in business, or for the farmer to improve his farm by building a new bam or house, but rather at the instance of influential people, supporters of the late government, and the fact is that they wanted to turn to the agricultural development board many mortgages which were due and on which the interest was very much past due. That is a serious statement to make, but it is a fact that has been ascertained. Other instances were found in which the board had neglected their business to such an extent that the new board found themselves the owners of many farms on which taxes had not been paid for two or three years. In the township south of the one in which I happen to live, the agricultural development board now has on its hands four farms, on two of which there was no tenant and the taxes had not been paid for over two years; and in one instance the farm was advertised for taxes last fall and redeemed by the board. When 92582-27
the new board made a survey they found that if this $55,000,000 odd of loans were liquidated the province of Ontario would suffer a great loss. Therefore they reorganized the board, made further investigation, and it was decided to carry on. They are trying to sell many of these farms, and the province of Ontario will, no doubt, not suffer as great a loss as at first seemed possible.
The statement was made this afternoon that no loans have 'been made by that board. I happen to know that during the months of November and December some seventy-two loans were made, amounting to something like $140,000, or an average of about $2,000 each. These loans were made to people who wanted to purchase stock or improve their buildings, or who had sons that they wanted to start on farms for themselves-the purpose for which the board was originally started. It was announced by the present federal government just after the election that the farm loan board and the Farmers Creditors' Arrangement Act would be in operation in the near future, and it was intimated that the interest rate charged would be somewhat lower than was current in Ontario. Consequently I have no doubt received as many applications as the hon. member for North Grey or the hon. member for Dufferin-Simcoe. Many of these people have withdrawn their applications from the provincial authorities, or the agricultural development board of Ontario, waiting to see what is going to happen in the working out of this farm loan act. It was also announced by the Ontario agricultural development board some time ago that the interest rate there would be only four per cent. That was to come about because they said they would be willing to pay the difference between what the federal farm loan board would charge for the money loaned under this act and the four per cent. I note however that the Minister of Finance (Mr. Rhodes) said to-day that that arrangement would not be allowed to be carried out. Therefore the farmers of Ontario are to be deprived of the chance of receiving money at four per cent, unless the government will consider lowering the interest rate to that figure.


Edgar Nelson Rhodes: If my hon. friend will permit me, I regret to have to interrupt; it is quite contrary to my custom, but he is under an entire misapprehension in saying that the minister said that any action of this government will prevent the people of the province of Ontario from receiving money at four per cent.



Farm Loan Act-Mr. Campbell


Colin Alexander Campbell: I did not mean just what I think the minister understood me to mean. I merely state that the province of Ontario announced through the Minister of Agriculture that money would be made available on farm mortgages at four per cent. The plan would be that the money would be borrowed from the federal farm loan board, and if the interest rate were higher than four per cent the provincial government would for the benefit of the farmers pay the difference between the four per cent collected from the farmers and the rate paid to the farm loan board. I mention that, as I understand from what has been said to-day that the farm loan board is going to operate as a federal body and that the provincial boards will have nothing to do with it. By that action the people of Ontario will be prevented from receiving that benefit.


Edgar Nelson Rhodes: If that happens it will be the fault of the provincial government, not of this government.


Colin Alexander Campbell: No; I want to go a little further. The Minister of Finance and his government still have a chance to give to the people of Ontario that benefit by a reduction of interest rates to four per cent. This is a vital point that I want to make clear. Notwithstanding the claims made by the hon. members from western Canada I represent probably the most agricultural riding in the dominion; there is only one incorporated village in my riding, and that has only seven hundred people. The people in my riding are farmers, with a few miners and lumbermen. They represent probably the most substantial class of citizens that this province is privileged to have. They are all descendants of United Empire Loyalists; they have resided there for many years; the farms are mostly owned by their occupants and have been in the family for generations. The only sales made are probably from one family to another as a farmer wants to get a farm for his son. Unfortunately during the last two or three years, on account of falling revenues, the father is not helping the son out, and consequently we have in the counties of Frontenac and Lennox and Addington a large number of farms for sale, and a large number of farm boys for whom farms cannot be bought on account of the interest rates that would have to be paid on a mortgage; consequently they are just staying home and living off the parents. If the Minister of Finance would study the amount of production from the

agricultural industry for the last five years ne would find that it is impossible for anyone connected with that industry to pay more than three per cent. I have no doubt that even though interest rates should be down to four per cent many mortgages will be in ai'rears for interest, on account of local conditions, sickness or otherwise. But the government must take cognizance of the fact that the farming and agricultural industry needs just as much help as do the labouring people who by reason of the present tariff and other policies of this government find themselves out of employment.
This morning I received two letters from constituents saying that the mortgages on their farms are held by estates-two different estates, I may add; there is no connection between the two, because the farms are in different townships. It is necessary that both estates be wound up in the near future. In both cases the lawyers find there is no money available to have someone else take over the mortgage, at any interest rate. Probably there are many cases of this kind throughout the whole dominion. Either the farmer must lose the farm through foreclosure or the estate must take less money for a quick settlement. If the government could see its way clear to allowing money to be loaned at a reasonable rate of interest, it would be a very great advantage to the farmers and also to people holding mortgages in cases such as I have just mentioned. I am not going to say what the rate should be; I do not wish to take up too much time, but the fact is that unless you lower the interest rate to around four per cent either this government or the government to follow will have a very sad experience in connection with tfie collection of interest and principal.
I want to point out something further. All during my recent election campaign the question of lower interest rates, not only on farm mortgages but on government loans and so on, was debated at great length. I was criticized by some hon. gentlemen opposite for the statements I made, but I want to point out that the people of Frontenac-Addington, composed mainly of agriculturists and who realize the severe burden they are bearing at the present time, by electing me have asked this government to reduce interest rates to the greatest extent possible.


Mr. SAMUEL GOBEIL (Compton):: Mr. Speaker, I wish to add a very few remarks to what has been said already in connection with this measure. I do not think the govern-

Farm Loan Act-Mr. Gobeil
ment can be too highly praised for the amendments proposed. There are several reasons why I make that statement, some of which have been stated already.
The first change suggested is the elimination of the provincial boards, and I am very glad to be able to say that I find myself in perfect accord with some hon. members opposite, especially the hon. member for Gloucester (Mr. Veniot), in their expressions of opinion as to this move. By the way, I should like to remark that for the last week or ten days we have been witnessing quite a strange scene. Since the house opened we have been told by some hon. members opposite that the radio speeches of the Prime Minister (Mr. Bennett) were delivered only for the purpose of getting votes; one hon. member went so far as to call them bluff. But when these reform measures are brought down, what do we see? Even hon. members opposite are very anxious to rise and place themselves on record as approving them.
Before I digressed, Mr. Speaker, I was saying that I find myself in accord with the hon. member for Gloucester with regard to the provincial boards. I do not wish to say anything in a political way in regard to those boards, because I do not believe in giving the last blow to a dying man, and if my judgment is correct these boards are on the eve of passing away. But at least this will clear up the situation. Certainly I have had more correspondence in regard to farm loans than in regard to anything else during the past four years. Sometimes I have had to write three or four letters to the same man, all because responsibility could not be placed. I do not wish to say anything harsh with regard to the inspectors or even the members of the provincial boards, but the personnel of the boards was submitted by the different provincial governments, and it goes without saying that most of those appointed-and in the case of our province I think I can say all those appointed-were of the same political faith as the provincial government. So it was only to be expected that even if there was no partiality the people whose applications were refused would think this had been done in many cases because of their political faith. I do not suggest that all who apply for loans in future will get them, but at least they will know who refuses the loan. They will not be told by one person that their loan was refused by the provincial board and by another that the loan was refused by the federal government. That is one desirable feature of the suggested amendments.
92582-27J
Another improvement I wish to commend is the fact that in future borrowers will not have to contribute five per cent of the loan. This was another bad feature of the act, and the borrowers could not understand why they should be borrowers and lenders at the same time. Many times a farmer who needed $1,000 foimd that, in addition to what it might cost him for a clear title, he received only $950 instead of $1,000, because he had to subscribe five per cent of the loan.


Peter John Veniot: The resolution does not say that is to be changed.


Samuel Gobeil: I understood the Minister of Finance (Mr. Rhodes) to make that statement.
I also wish to join with the hon. member for Gloucester as to the matter of titles. Probably the government cannot help themselves-


Peter John Veniot: Yes, they can; let the government fix a fee.


Samuel Gobeil: That might be done. I should like to point out that in the province of Quebec the situation is worse than it is in other provinces. I could mention two cases, in my own parish. One man borrowed $1,500, and the cost of securing a clear title was $149. So, with the five per cent that he had to subscribe to the board, instead of receiving $1,500 he received not quite $1,300. I know of many other cases where the cost was well over $100.
I had a note before me in connection with appraisers, a point mentioned by the hon. member for Gloucester. I do not believe it is necessary to go into the matter in detail, but I may say that I agree with him. If I were to suggest anything to the government A would be that they should choose appraisers carefully. I make the suggestion without any thought of criticism. Although in the province of Quebec we have had some very worthy appraisers, on the other hand some had no experience in farm values and a few were nothing more or less than political appointees. It may be that most new appraisers named by this government would be Conservatives-I hope most of them would be-but I would find no fault if some were Liberals. First of all, I would say, "Get a good man, a man with experience who knows the values of farm properties and who could do justice not only to the government but to the borrower."
I believe I have nothing further to say on the resolution, although I may make some1

Farm Loan Act-Mr. Coote
additional observations when the bill is before the house. For the time being I shall conclude by saying that I heartily endorse the principle embodied in the resolution.
Mr. G. G. COOTE Macleod):	Mr. Speaker, so much has been said in regard to the resolution that I have only one or two observations to make. I feel that there are two points which should be emphasized even to a greater extent. The first is that the Canadian Farm Loan Act and the Farmers' Creditors Arrangement Act were what might be termed companion bills. I think one hon. member said they were twins. I believe the two acts should be taken together when we are dealing with the farm debt and farm credit situation. I have discussed the matter with men who have been actively connected with the administration of the Farmers' Creditors Arrangement Act, and it is only because of representations made to me by them that I now speak.
The greatest difficulty farmers find to-day in making arrangements with their creditors under the Farmers' Creditors Arrangement Act is that there are mo credit facilities available to them. Many of these men who wish to make arrangements with their creditors could do so on favourable terms, if they could get the cash to turn over in settlement of whatever percentage of their liabilities is agreed upon. A great many men could obtain a fifty per cent reduction of their liabilities if they could get a loan for that amount. Of course that is if the whole proceeds could be turned over to their creditors. It seems to me that if in many cases the farm loan board were given instructions by the government, instructions which I think the government should take the responsibility of giving, loans could be made. In other words, I wish to agree with what was said so well by the, hon. member for West Edmonton (Mr. Stewart). In my view the time has come when in the national interest as well as in the interest of agriculture the government should show their willingness to assume some of the risk entailed in granting loans. I believe they should Say frankly to the men administering the farm loan act, "We anticipate you will have some losses, and we do not think it necessary that all the losses you incur in making loans in these times must be charged up to the operation of the act and included in the interest you are going to endeavour to collect from the people to whom you make loans." It would be far better for the board and for the government to have loans under the farm 
loan act in respect of which they would have a reasonable expectation of collecting the interest named on the face of the mortgage, because once a large number of borrowers get in arrears and find they cannot pay there seems to be a temptation for those who perhaps, by struggling hard enough, could pay, to allow their interest payments to stand.
I would have a great deal of sympathy with any person administering the farm loan board to-day. I do not mean to say that I excuse all the decisions the board has made in the past, but unless they have some specal instructions from the government, or provisions in the act to warrant their running risks, they will not take them. They know perfectly well that the present level of farm prices is such that in many cases the loans being applied for are too large. That is, the earning capacity of the farmer, due to present price levels, is not sufficient to pay the interest. Those in charge of farm loans do not like to have loans placed on their books which they have no good reason to believe will be kept in good standing. There is no guarantee given to the farm loan board that price levels will be raised. We know that at the present time there is a slight raise in price levels.	I have before me the last
monthly statement of the Bank of Nova Scotia in which are set out farm revenues in the Dominion of Canada for the past three years. I have worked out the figures on a per farm basis, and without going into detail may I say that the average farm income in 1928 was approximately SI,600. In 1932 it had fallen to $630, in 1933 to $600, and in 1934 had raised slightly to $745. There has been a slight increase, but not sufficient to enable the farmer to pay any interest, if he is giving his family a decent standard of living. Any hon. member could easily demonstrate that it was easier for a farmer to pay eight per cent in 1926 than to pay anything to-day. As a matter of fact interest can come only out of farmers' surpluses. It can come out of the revenue available after his living and his necessary expenditures have been deducted, and we know that for the last three or four years there has been no such surplus. If the farmer has paid any interest at all he has paid it because of a reduced standard of living or from capital savings. He may have used his insurance savings. The difference between $1,600 in 1928 and $600 in 1933 has taken away the farmers' ability to pay taxes, to pay interest, to buy new machinery, to pay insurance premiums and to provide for the health and education of his family.
At six o'clock the house took recess.

Farm Loan Act-Mr. Beaubien
After Recess
The house resumed at eight o'clock.


George Gibson Coote: Mr. Speaker, when the house rose at six o'clock I had been emphasizing that in my opinion it is necessary that greater facilities be provided under the Farm Loan Act if the Farmers' Creditors Arrangement Act is to effect anything like the purpose for which it was intended. I simply want to say in that connection that I think the rate of interest should not be more than four per cent, and if these greater facilities are to be provided at a rate which agriculture can pay, it is quite clear that the government must be prepared to assume some liability, at least enough to take care of that part of the rate of interest which has always been added in order to cover the risk of loss. I am not going to labour the point any further because I think it has been emphasized several times this afternoon, so that the minister must surely be convinced by now that this is really necessary.
I have had several cases brought to my attention of men who have been endeavouring to get loans, and who have not found it necessary to make any arrangement with their creditors under the Farmers' Creditors Arrangement Act. I shall mention only one which I think is typical of a good many others. This farmer has a small farm of 160 acres, sixty acres of which is broken. He has I think fifty head of cattle. He is trying to get a small loan to enable him to put up some better buildings, particularly a dairy bam, but so far he has been unable to interest the board even to the point of encouraging him to send in the $10 to cover the inspection fee. It may be that the board in their wisdom feel that they cannot make that loan, but it does seem to me that we must have some better credit facilities for agriculture that will enable a man in that position to get a small loan in order to put him in a position where he can produce under more favourable conditions. I have seen enough correspondence to convince me that a more liberal loan policy must be adopted on the part of the officials in charge of the board if the Farm Loan Act is to meet in any way the present needs of agriculture in the matter of credit facilities.
Without taking up any further time of the house I would again urge on the minister that the government, in whatever legislation they bring down, provide in it or decide as a matter of government policy that the government itself will assume some of the risk in connection with the losses that will be made from now on.


Mr. A. L. BEAUBIEN (Provencher):: Mr. Speaker, I should like to offer a few suggestions to the minister and the house based on the conditions that I have found prevailing in the riding that I have the honour to represent. During the last three or four years I have had occasion to come in contact with farmers' indebtedness to a very large degree, and the conditions I have found are these-and incidentally may I say that I do not think anybody can discuss this resolution without linking it up with the Farmers' Creditors Arrangement Act.
In my riding the average farm consists of 240 to 320 acres. We will take, for the sake of argument, a farm of 320 acres. Say that a man owes $8,000 on a half section of land. If he is able to take advantage of the Farmers' Creditors Arrangement Act and get his indebtedness reduced, say, fifty per cent, that still leaves him with an indebtedness of $4,000. Now if this resolution and the bill to be founded upon it will take care of such a case and allow a man who has had his indebtedness reduced say forty or fifty per cent to consolidate his remaining indebtedness in one loan spread over a period of years, twenty or twenty-two years I think the act says, and only very small annual payments are provided for, he might be able to get out from under. But unless the Farm Loan Act and the regulations that will govern its administration are able to take care of that situation I doubt very much if we are going to make much headway in the readjustment of farmers' indebtedness. In the last few years I have found that many creditors were willing to make readjustments, but they all asked the farmer: What consideration will the loan company get if I reduce your indebtedness? The farmer finds himself in a position where he is unable to say to the loan company or to any of his creditors: I will give you your cash if you will reduce my indebtedness.
I do not think there is any great demand in the country for new loans. Of course there might be in certain districts where people want to get a start, but in my opinion the great demand is to relieve the farmer of the indebtedness which he incurred during the period of high commodity prices, and unless this act takes care of that situation so that the farmer after he has had his debt readjusted will be able to consolidate his remaining indebtedness in one loan, I doubt very much whether this legislation is going to be a success.
May I make these few observations to the Minister of Finance (Mr. Rhodes)-and I do not do it at all in any way of criticism

Farm Loan Act-Mr. Beaubien
[DOT]of the Farmers' Creditors Arrangement Act which was passed last summer. Probably it took a little time to get the act under way. As far as I can find out, in the province of Manitoba the board of review has not as yet given any decisions to speak of; if so, it must have been very recently. I find this fear existing, that the farmer was not sure whether the board of review had the right to force a secured creditor to readjust the farmer's indebtedness. In fact I took this matter up with several legal minds in the city of Winnipeg, and I have not yet been able to get a clear and definite understanding whether the board of review has or has not the right to say to the secured creditor who has, say, a first mortgage on the farm: You will have to take so much, and the readjustment will be based on the value that you voluntarily put on the productivity of the farm, or that the board of review puts on it.
When the provincial boards are abolished I assume a provincial representative will have to be appointed for each province. I trust that these representatives and the board here in Ottawa will make every effort to relieve the farmer who is indebted to such an extent that he will never get out from under unless he is able to readjust his debt under the Farmers' Creditors Arrangement Act, and I would urge that the board be not too critical of the loans after the man's whole indebtedness has been reviewed by the receivers and the board of review under the Farmers' Creditors Arrangement Act. If this legislation, with the increased credit facilities that are to be placed at the disposal of the board, is administered as it should be, and if due consideration is given to the ability of the farmer under present conditions to pay and to the capacity of his land to produce enough to pay at present prices, some good might be accomplished. But even when you have reduced your debt by say fifty per cent, calculate on the basis, not of 18,500 but of $4,000, at 51 per cent, and you have $220; and then you have to figure on your municipal and school taxes, at least fifty cents an acre. You must also take into consideration repairs and upkeep of buildings, which would not be less than $100 a year. Then there are other incidental expenses which would add to your overhead, to say nothing of the cost of seeding and of harvesting your crops, and many other costs which enter into farming. So that when you take all these things into consideration the farmer will still find it very 
difficult to make both ends meet. It is therefore only by amortizing his indebtedness, consolidating it under one head and making small annual payments, the rate of interest being reasonably low, that he can clear his home from indebtedness.
I offer these suggestions in the hope that they will be considered. Very often we feel that the officials are not administering the act as we should like them to, but the difficulties are numerous and they do the best they can. At the same time I think the government should instruct the boards which will administer the act to carry out its provisions having in mind present commodity prices and the conditions that exist in Canada at the present time.


Mr. J. S. STEWART (Lethbridge):: Because the amendments which are proposed are of great interest to the farmers of southern Alberta I beg the privilege of taking up a few minutes of the time of the house. Before proceeding to give the house some suggestions based on actual examples that have recently come to my knowledge, I think I should make a short statement in all fairness to the Alberta provincial board-that is, the board that looks after farm loans in that province. As we were told this afternoon, some $15,000,000 has been provided for loans to farmers throughout the dominion, and in Alberta a very small proportion of the money has been lent to the farmers, one of the chief reasons being the provincial legislation which was enacted about the year 1926 and which we call the Debt Adjustment Act of Alberta. Should a farmer get into financial difficulties he seeks the shelter of this act and creditors find it almost impossible to obtain any of the money which they may have advanced to the farmer. Consequently the operations of the provincial farm loan board have been greatly restricted.
I will venture to present to the minister for his consideration four examples that have come to my notice from farmers living in my riding. The first relates to loans on irrigated lands. Most of these lands are held of course under agreements of sale, but we have a goodly number of farmers living on Canadian Pacific Railway lands, holding title to their farm lands, some to the extent of 320 acres. They own this land outright and the only tax which they have to pay outside of school taxes is the annual irrigation tax amounting to $1 an acre. Li%'ing within four miles of Lethbridge there is a farmer who owns 160 acres of irrigable land to which he holds free

Farm Loan Act-Mr. Stewart (Lethbridge)
title. On this land he has a magnificent brick house and a bam which would do credit to any farm in Ontario; and yet, although he has to pay only $160 a year water rental, he is not in a position to have his application for a loan considered by the Alberta board. There are quite a number of farmers in southern Alberta similarly situated and it seems to me that the government should take this example into consideration and alleviate that condition. That man surely is entitled to get his loan at five per cent just the same as any other farmer living in southern Alberta.
The second example is one with which I am very familiar. The hon. member for Souris (Mr. Willis) this afternoon mentioned a similar example in his own constituency. In the southern part of the riding I represent there is a farmer who owns 2,000 acres of land. He has a home that cost him at least $6,000, in which there is every electrical convenience to be found in Ottawa. His barns are lighted by electricity, he has at least 30 horses,
515.000	worth of machinery, and he owns the
2.000	acres outright, without one cent of mortgage or debt against the property. Moreover, he has made the money with which to purchase this land in the very district in which he now lives, and yet he cannot get one cent by way of loan from the Canadian farm loan board. Why? Because he lives in what is known as the drought area. I have known him for twenty-seven years and he has never had a crop failure and has enjoyed a good standard of living. Notwithstanding what has been said by some hon. members in this house, some of the farmers in southern Alberta, in fact a goodly number of them, enjoy a good standard of living even in these hard times. In order to meet the present unfavourable situation the farmer goes to the bank, and with all these assets, and not owing a dollar, he borrows in the neighbourhood of $2,000 and is charged seven per cent. They discount the note, and when he renews it three months afterwards it is again discounted. That situation should be taken care of. No man could have that estate in southern Alberta, accumulated in twenty-seven years, even though in a semi-dry district, without having had at least good average crops. And he comes from one of the best Scottish settlements in the dominion-I leave hon. members to draw their own conclusion as to where that may be. The one thing he does not want to do is to put a mortgage on his home, because he has never had one yet. But owing to circumstances over which he has no control he desires a loan, and yet with assets amounting to $40,000 or $50,000 he cannot get a dollar.
A little distance away from that gentleman there is another farmer residing in southern Alberta who has complained to me about the operation of the act. This gentleman bought two half sections for which he paid $30 an acre, or $9,600 each. One he bought in 1917 and one in 1918. On the one which he bought in 1917 he has paid $8,580 odd and he still owes over $9,000; on the other half section he has paid $9,800 and still owes over $8,000. In seventeen years in the one case he has made an average payment in interest or principal of over $500 per annum. It ought to be a pretty good country in which to live when a man can maintain his home and family and still be able to pay off that amount of interest or principal each year. In the other case he has paid off an average of $600 per annum. During all this time he has kept up the payment of taxes on those two half sections; each year he has given at least from one-third to one-half of the crop to the parties from whom he purchased the land and he has bought $12,000 worth of machinery. I would like to inform the hon. member for West Edmonton (Mr. Stewart) that there arp some good sections in southern Alberta, chiefly in the Lethbridge riding. This farmer goes before the official receiver and possibly may eventually get to the board of review in regard to compromising his debts. He is a good Canadian citizen. In the seventeen and eighteen years he has paid nearly $18,000 in interest and principal on those two half sections and he still owes that much more. He can never under any such conditions as prevail at the present time pay off that loan; he must get some help, and when he comes to the board of review or the official receiver he finds that he cannot get any loan from that organization.
As many hon. members have already stated, these two bills are companion measures. There must in my opinion be provision made by amendments either to this act or to the act concerning compromises with creditors, whereby a man similarly situated to this farmer will be able to get assistance to enable him to pay off his debts if he receives a reasonable adjustment. Where should he apply for this assistance if he does not go to the farm loan board?
The fourth case is similar to some that were mentioned this afternoon. There is in another part of my riding a widow who had almost enough boys to make up a full baseball team
Farm Loan Act-Mr. Reid

For thirty years they lived in southern Alberta. As the boys grew up they wished to get farms of their own and wanted to buy land in the immediate neighbourhood. The older boys succeeded in buying their farms and securing each a half section, but the two younger ones now find themselves in the position where although they have the machinery, the power and all the implements required to carry on scientific farming, they lack the capital to enable them to make a purchase of or a payment on some land which they now have under option and on which they would make their homes. It seems to me that bona fide Canadians who have been reared in our country, especially those who have been reared in Alberta and who know the conditions there, should be given an opportunity to purchase farms and get the money at a reasonable figure in order that they may be able to become the good substantial citizens they hope to be. These four cases are fair examples of those which have come under my observation and which I hope will all be covered by the legislation which is now before the house.


Mr. THOMAS REID (New Westminster):: I desire to make a few remarks on the resolution now before the house in connection with amendments to the Farm Loan Act. At the outset let me say that I agree heartily with the observations of other members who have spoken about the high interest rates; I also have come across them in my travels through the lower Fraser valley, and they are working a very severe hardship, shall I say, on the farmers of that district. I listened attentively this afternoon while some angles of the subject were under discussion. Still there were some aspects which were not touched upon at all, and these I would like briefly to mention.
The Minister of Finance (Mr. Rhodes), if I interpret him aright, in speaking about the cost of borrowing said that it might take one per cent to be a safe coverage, but that it was estimated that two per cent plus the cost of borrowing would be necessary to carry out safely the operations of the act. I believe I interpret him correctly in that regard, but I wonder whether he has taken into account the question of equity. While it is true that it may take one per cent to be a safe coverage so far as the financial end of the matter is concerned, I just wonder whether the minister has thought about the equity that the farm loan board has in these farms. In connection with that I might point out that the situation in the lower Fraser valley to-day is that the equity of the farmers is

completely gone, but the equity of the government through the farm loan board still remains. Let me cite one case; many could be cited, but the one I am going to give illustrates the point I am endeavouring to make. This farmer has 812,000 cash equity in his farm, which was valued at one time at something like $18,000. To-day the equity of the board in the land which the man has is $4,110. If the farm were sold on the market at this time at a price similar to that at which neighbouring farms are selling, it would not bring more than perhaps $5,000; but it would bring $5,000, because, as I pointed out, some $18,000 have been expended and the present proprietor or owner has put into that farm some $12,000 in cash. I wonder whether the minister has considered the situation that the farm loan board of the government is adequately safeguarded in regard to land while the equity of those under the act is at the present moment at least entirely gone. That some notice has been taken by the board of falling revenues is evident, I might point out, from the fact that when farm values started to go down the farm loan board demanded more security, and if in their estimation the security was not considered sufficient they put a chattel mortgage on the stock. I would like to say in regard to this action that while it is very true that a mortgage on the land is bad enough to carry, it is certainly crucifying the farmer when he is not allowed to sell stock owing to the fact that the government through the farm loan board have a mortgage on it. That phase of the matter should be looked into and chattel mortgages removed so that the farmer, if he sees fit, will be able to sell any stock off his farm. Land values have gone down, as I pointed out, from a value of $250 an acre in 1928 to around $75 an acre. As I have already pointed out, the total security of the board is still in existence.
Something was said this afternoon regarding the five per cent share capital which the farmer is charged out of his loan. I noticed when the minister was reading the resolution that he spoke of that being done away with in the future and the share capital put up by the various provinces being returned to them. This is not the proper time to ask questions, perhaps, but I should like to know what is going to be done about the share capital that the farmers have in the various loans. I should like to read the notice sent out regarding share capital, because it is striking in view of a comparison with share capital in any business organization. This farmer had a loan of over $4,000. The notice says;

Farm, Loan Act-Mr. Reid
You are also shown as the holder of 215 paid-up shares of the capital stock of a par value of $1 pei share.
Most people if they own shares in a company look for some return by way of profit, but the very reverse is the case with farmers who have obtained a loan under the Canadian Farm Loan Act. Not only was five per cent deducted from the loan and shares issued to them, but in turn they were called upon to pay interest on the shares. In discussing the matter with farmers in my district I find that they feel very badly about having to pay interest on shares which they never owned. Before I left to come to Ottawa some twenty-five farmers gathered in the municipal hall at Cloverdale, and asked me to attend the meeting. I found that each and every one of them felt that it is the interest that is crushing them out of existence. I am not going into the question of low prices for farm produce at this time and the inability of farmers to pay; I think that is only too well known. But when we find farmers who in past years have paid their interest and their principal and have kept up their taxes, municipal and dyking and otherwise and who find that they now owe S500 and over for interest on a loan of S4,000, it is little wonder that they feel very much discouraged. As the hon. member for Macleod (Mr. Ooote) pointed out, some farmers who have been paying in the past and have struggled to keep up their payments feel that if others are not going to pay neither should they. It is only with great difficulty that they have met payments, denying themselves many things in order to do so, while others are not paying at all, and because they cannot.
In connection with the five per cent share capital I was wondering if this would be coming back to 'the farmer. I make this suggestion to the minister: that note be taken of the share capital which was in the first instance deducted from the loans now outstanding and that this amount be deducted from the total interest owed. That would be a great help to the farmers at the present time. Then there is the question of solicitors' fees that I think should be looked into. I know that in registering mortgages in the land registry office there are some costs, but in my opinion there is no reason why a farmer should have to pay S15 to a lawyer for making out the papers in connection with a mortgage to the farm loan board.
Speaking now in regard to the Canadian Farm Loan Act and the Debt Adjustment Act, I might point out that so far as British
Columbia is concerned these two acts are niot in accord. No doubt most hon. members will remember that when the Farmers' Creditors Arrangement Act was before the house the Prime Minister (Mr. Bennett) changed the definition of the word "farmer." In the Canadian Farm Loan Act the definition of "farmer" is somewhat different from that found in the Farmers' Creditors Arrangement Act. When it was under discussion last year those of us who come from British Columbia pointed out that to enable farmers on small holdings, five and ten acre men, to come under the act the word "farmer" would have to be defined differently, so it was changed to read:
"Farmer" means a person whose principal occupation consists in farming or the tillage of the soil.
It was thought that would cover the five and ten acre men in British Columbia. But in the Canadian Farm Loan Act it is not so clearly defined. It reads:
"Farming" includes stock raising, dairying and the tillage of the soil.
So we find that when those in the greenhouse business or the poultry business in British Columbia apply for a loan they are told that those in the greenhouse business or perhaps growing vegetables on five-acre holdings do not come within the act as at present constituted. I invite the minister's attention to that in order that the Canadian Farm Loan Act may be changed to conform to the Farmers' Creditors Arrangement Act in that respeot.
Regarding valuation, the creditors act passed last year has nob worked out as many of us thought it would. I am going to cite two cases from the lower Fraser valley to show that under present arrangements it is almost impossible for a farmer to obtain an adjustment under the Farmers' Creditors Arrangement Act. To quote only one or two cases, one man had a mortgage of $9,000, which he had obtained in fairly good times. Finding himself in great difficulty last year he looked around for relief. He appealed to the mortgage company and the company said: "If you can procure $4,500 we will accept that in lieu of the $9,000"; that is, they agreed to cut the mortgage in two. So he went to the official in charge of the operation of the Farmers' Creditors Arrangement Act, who suggested that he apply to the farm loan board for a loan. But according to the valuation provisions in the Canadian Farm Loan Act the greatest amount that the board would loan

Farm Loan Act-Mr. Mills
that man was S4,000, because the valuation in British Columbia must not exceed $100 per acre, and the loan must not be over fifty per cent of the valuation, plus twenty per cent on the buildings. Therefore that man was denied the opportunity to save the 84,500.
The other case was that of a man who had a mortgage of $6,000, and the mortgage company agreed to take $3,000. But he found himself in difficulty in an endeavour to procure $3,000 from the farm loan board, although if he could have raised that money he would have saved $3,000. and had his loan cut in two. I suggest that that condition be taken into consideration and the two acts brought into conformity. I have no particular fault to find with the board or 'the officers of the board; they are servants of the crown carrying out their duties and doing their work in a businesslike way, and of course they must conform to the provisions of the act. An.y changes should be made by parliament, and now is the time to make them.
Now I should like to make a suggestion to the minister with regard to appraisals. Ten dollars may seem a small amount to have to put up, but to a man who is going around looking for a loan it is a considerable amount. It is evident 'that if he is looking for a loan he has very little money, and ten dollars represents quite a sum. So I am going to make this suggestion to the minister: why not have the appraisals made by officials of the soldier settlement board, who are doing all the appraising in the Fraser valley? That is no new departure. We have the Canadian pensioners and those under the British ministry being examined by the same doctors. The old country soldiers in Canada go before the same Canadian doctors that examine Canadian soldiers, and the same principle could be worked out in regard to appraisals. If these could be done by the soldier settlement board appraisers it would save at least $10 to each applicant.
I am going to reserve what further remarks I have to make until the bill is before us, but I should like to repeat that the most serious heavy interest charges. There is no doubt problem confronting the farmer to-day is the that something will have to be done; when a man owes $600 in interest on a $4,000 loan certainly he needs some help. That becomes aiore difficult to pay as time goes on, because it is like a snowball rolling down hill; it gets larger all the time. If something is not done many of these men will simply leave the land and lose all they ever possessed.


Mr. W. H. MILLS (West Elgin):: Mr. Speaker, I cannot let this opportunity pass without adding a few words to what has been said already in regard to this resolution. I believe if the governments of Canada-and when I say "governments" I mean provincial and dominion governments-are to bring prosperity back to this country they must start at the foundation, and that foundation is the farmer, the tiller of the soil. Assistance must be given the farmer.
Reference has been made by some hon. gentlemen opposite who represent constituencies in the province of Ontario to the plight of the farmers in this province, and I should like to say a word with regard to the development board that has been in operation in Ontario; for I do not believe any hon. member within sound of my voice knows more than I do of the situation that has existed in this province since the present government came into office. In reference to that board, what were the conditions the present government found when they assumed office? They found stacks of applications that had been passed by the Henry government; everything had been done with the exception of writing out the cheques and passing over the money. They found that loans had been made to 18,000 farmers in Ontario, totalling some $51,000,000, though if they had to be liquidated at the present time they would not realize $15,000,000. I do not say that is any particular fault of the Heniry government; you cannot blame a valuator for placing a value in 1028 or 1929 which was almost double the value that would be placed to-day. However, those were the conditions the new government found. It was said that no loans have been made by the new Ontario government. I should like to repeat what my hon. friend from Frontenac-Addington (Mr. Campbell) said, that seventy-two loans were made during November and December, totalling in the neighbourhood of $140,000. Those loans were made to applicants whose applications had been received and approved before the previous government went out of office.
Now I am going to say to the Minister of Finance (Mr. Rhodes) that if this is to be a purely federal undertaking a great deal of care should be taken in selecting the personnel of the board that will administer it, so that politics may not creep into the administration. If I were a member of a government which appointed a commission to administer an act of this kind, and if I interfered to the extent of recommending a

Farm Loan Act-Mr. Bury
loan that had been refused by the board and that was not justified, I would not consider myself worthy of the seat I occupied. I might say here that politics did play a prominent part in connection with the administration of this act in the province of Ontario.
I cannot help thinking of the conditions that exist in my immediate neighbourhood. My constituency is purely rural, with the exception of a town and a city. Unless we have prosperity among our farmers there will not be prosperity in our town and city. We have to get those farmers back on their feet, or they will be in the bread line. I know of several good farmers in my own neighbourhood who require a little assistance, which they cannot obtain from private individuals or loan companies. A farmer hardly gets a *cordial look to-day if he appeals to a bank for a loan. I am thinking of a farmer in my locality who bought a farm some years ago at a high price, and who has raised a family of eight children. A few years ago he went to the man from whom he had bought the farm, and who held the mortgage, and asked if he could not lower the interest rate a little. The mortgage holder replied, "No, I cannot do it. I can buy government bonds and clip off coupons and get nearly six percent. I cannot take less than six per cent." I think we must get a lower interest rate because with his present income the farmer cannot meet his overhead.
I should like to tell the house of another couple whom I visited last week end when I was home. They telephoned and wanted to talk to me in reference to a farm loan. This young man had had a position in the shops at Galt, I believe. He lost his position and came home, and has been attempting to redeem the farm held by his father, which had a mortgage amounting to practically what the farm is worth to-day, because farms are not. being sold at any price.
On this farm there are good buildings, a new barn and two silos. When he came to the place he had only a small amount of stock, while to-day he has a first class accredited herd of Jerseys. However, he is up against an interest rate of seven per cent. His wife said to me, "If we could obtain a loan bearing an interest rate of 4 per cent I would feel we were right in heaven." I should like to urge that the Minister of Finance make it possible to put loans through at four per cent or less. To-day, in view of the low prices received for farm commodities, these high rates of interest cannot be met.
On my farm we are to-day producing over 600 pounds of milk daily. To deliver that milk to the condenser we are charged nine cents per hundred. This milk, rated at 3-5 per cent butterfat, is selling at $1 per hundred. With bran costing S27 or S28 per ton and other feeds at proportionately high prices, one cannot sell milk at that low price and make a profit. As the old saying goes, the farmer is the only man who can continue to do business at a loss.
May I observe in closing that I shall be pleased to support any measure which will be of assistance to the farmers or which will be the means of getting them money at a lower rate of interest, no matter from what party it comes-whether it be the government, the Liberal party or the Cooperative Commonwealth Federation. We have to get money for our farmers; we must lend them money because they cannot borrow it elsewhere, and before they can get it we must see that it is available at a low rate of interest.


Mr. A. U. G. BURY (East Edmonton):: Mr. Speaker, the Minister of Finance (Mr. Rhodes) must be gratified at the amount of interest his resolution has aroused, the amount of debate it has occasioned and the amount of approval it has elicited from both sides of the house. I hesitate delaying passage of the resolution, but I believe I must do so in order to bring to the notice of the house and the minister one concrete case which to my mind indicates a certain weakness in the present law, a weakness which the minister may not have considered and one which I hope he will be prepared to remedy.
There is a saying in the legal profession that hard cases make bad law, and we recognize the truth of that statement. The case I have to submit to the house is more than a hard case; it is one which in my opinion must be representative of a considerable number of cases. It is an instance not merely of hardship but in a certain sense of injustice which in my opinion ought to be remedied. I refer to a farmer who for thirty years farmed in eastern Canada and for seventeen years farmed first in Saskatchewan and afterwards in Alberta. He owns a section farm three miles from the town of Erskine and one mile from the wheat pool elevator. Some years ago, by reason of an accident to his spine, he became paralyzed, and had to leave his farm and reside in the city of Edmonton, where he still lives. Notwithstanding his paralysis and his age he has been operating his farm from his bed. A man has been working the farm under his absolute control and direction, and
42S
COMMOJNs
Farm Loan Act-Mr. Gershaw
he has been paying for the seed and meeting the other costs in connection with putting in the crops. There is an arrangement between the two men whereby the man working the farm gets fifty per cent of the crop for his work. A few years ago the farm was valued at about $25,000. There are 475 acres under cultivation, good buildings and good fencing. For these reasons that valuation would not appear to be at all exorbitant. Since 1930 the owner in Edmonton has fallen into arrears with his taxes. To put in his 1931 crop he had to borrow from the bank. The amount of his indebtedness to the bank plus the amount of his taxes is $3,500; yet he cannot obtain a loan from the farm loan board because he happens to live in Edmonton, paralyzed on a bed, and is not living on the farm.
Hon. members will recall that some years ago a bonus of five cents per bushel was given on the wheat produced. In the spring of the year in which the bonus was paid he borrowed from the bank for the purpose of putting in his crop. He had ploughed 100 acres of summer fallow, had broken 34 acres of new land, and his borrowing from the bank was at an interest rate of eight per cent. In that year of 1931 he raised a crop of 6,000 bushels. Applying for the five cents bonus he was told that because he was not living on the land he could not have it; the man who did the actual work of raising the crop got the whole of the five centa bonus on the 6,000 bushels, while the owner in Edmonton did not get a cent. I am inclined to believe, from memory, that in point of fact there is an agreement of sale executed in favour of the man who put in the crop, and if that is the case difficulties would be possible. The point I wish to urge upon the minister, however, is that there should be a greater margin of discretion or wider powers given to meet cases such as this. In this instance the man is actually operating the farm, although the house in which he lives is at a distant point. His lifetime's savings are in that farm, and to-day I am not sure but what it has been sold for taxes. He entered into the ordinary consolidation of tax arrears agreement and made two payments since. 1930. but has not been able to make further payments since. The result is that bis tax agreement is in default and his protection under the consolidation agreement has gone. This man is a helpless cripple in possession of a valuable farm. It is possible, if not an actuality, that his farm may be sold for $1,000 or $1,500 arrears in taxes. I urge upon the minister that the definition of the term 
"farmer" should be widened so as to make provision for such cases. If he has not sold the farm I would urge and press and contend that the mere fact that he is living in Edmonton does not make him a non-occupant of the farm, and that even then he is within the definition of a farmer under the Farm Loan Act. But even if he has sold the farm, surely it should not be impossible to make some provision in the act that men who have a really valuable equity in a farm and who have for so many years been working at farming and building up the prosperity of the east or the west, should in some measure be protected, and that some relief and some concessions should be made to them in some way to enable them to get the money that is necessary to enable this man I speak of and others like him to avert a complete loss of the earnings and toil of his lifetime I do not know how the amendment can be made, but I do suggest that it might be made in some way. In the 1934 amendment to this act provision was made under section 10 of part II that a loan might be made to a mortgagee who is defined as "any loan, trust or insurance company," and that term is extended to include " such other corporations or persons or classes of corporations or persons" as might be designated by the governor general in council, on the security of an assignment or hypothecation of a first mortgage; and that term is defined as including an agreement of sale covering lands the title to which is in the mortgagee, using the term mortgagee in the wide sense. Now if such can be done in that case, why cannot it be done in the ordinary case of an application for a loan? I made application for this man a couple of years ago, I remember, and it was turned down on the ground that he was not actually an occupant of these lands.


Mr. F. W. GERSHAW (Medicine Hat):: Mr. Speaker, a good deal of what I intended to say has already been said, and I shall certainly not repeat it. I notice in looking over the statement that the farm loan board has not sustained many heavy losses, and the number of cases in which interest or principal payments are in arrears is not very great.
A few days ago I put a question on the order paper and by the answer I notice that fewer and fewer loans are being made year after year. For instance, in the province of Alberta in 1931 the number of loans was 298; in 1932, 239; and in 1933 the number was 80, and in 1934 the number had dropped to 47. I also asked what areas in the province were excluded from the operation of this act, and the answer I received was this:

Farm Loan Act-Mr. Golding
None. The policy of the board is to deal with applications on the basis of the productive value of the security offered and the qualifications of the applicant.
And yet, Mr. Speaker, when people in the southern part of the province apply for a loan they are invariably told that no loans are being considered in that district. We cannot blame tire board for being veiy careful with their loans because we know that year after year disaster has overtaken the crops in part of that district, but even in that blanket area where no loans are considered there are farms that annually have produced fairly good crops. There are farmers living in ithe hills who have been getting on reasonably well and who have every right to have their application for a loan, when they require it, considered.
Then again, as has been said, this act works in with the farmers' debt adjustment act. I would point out to the minister the futility of having commissioner's appointed and acting under the farmers' debt adjustment act in a district where there is no possibility of getting a loan from the farm loan board. When the act is being amended I do hope the minister will see his way clear to extend its scope to save some of the homes which are being lost at the present time. In the city whence I come a large number of retired farmers have made payments on their homes in the city and have counted on making future payments from the revenue from their farms. But they have been disappointed in getting that revenue and have been unable to meet their obligations, and consequently stand to lose their homes. Some are now tenants on their own property, and others, of course, will be forced to vacate their property in the near future. I believe that this is a field of activity which might well be added to an act such as this, and if that could be accomplished it would dispel the despair which some of these people feel, and in its place bring some courage and confidence and contribute greatly to the happiness and contentment of the Canadian people.
Mr. WILLIAM H. GOLDING (South Huron): Mr. Speaker, I want to take this opportunity of expressing my views on this question and of endorsing the views expressed this afternoon by the hon. member for West Middlesex (Mr. Elliott). I think that any member who represents a rural constituency and spends any time at all among his constituents must understand the distress and worry that our agriculturists are experiencing at the present time and have been for the last three or four years. I am very glad indeed
that the house has devoted the time it has this afternoon and evening to what since I have been a member of this house I have often considered as the forgotten man. It seems to me, Mr. Speaker, that we are going on adding to our machinery of government. An unemployment insurance scheme is now proposed, also an economic council; we have our marketing board, and whether we believe it or not, all these cost money to administer. After all, these costs find their way back to the consumer and to the basic producer, and ultimately in my opinion to our greatest industry, that of agriculture.
I have often wondered since I have been a member of this house, and it has given me a great deal of concern, just how long we can continue to add to our machinery of government and place these burdens upon the backs of our farmers who already are overburdened and have been for years.
Take the unemployment insurance scheme, for instance. No doubt it is a good thing in itself, and yet I can see that it is going to place another burden upon the farmers' backs. I think that every manufacturer who has to do with the agriculturists will recognize that all the costs that go into the upkeep of that scheme will have to be passed on to the agriculturists. In my own constituency during last fall and this winter I have been approached on a good many occasions in regard to the Farm Loan Act and the debt adjustment plan. Of course, in Ontario that is not yet in effect but I think it will be; enabling legislation will be passed as soon as the legislature meets. But I do want to add my plea to the Minister of Finance (Mr. Rhodes) to do everything in his power to see that this interest is reduced even to four per cent. Practically every member in this house would, I think, be quite willing to see the government take care of any interest charges over that amount. I have a feeling that a movement of that kind would be supported. We have had loans to the Canadian Pacific Railway, and I suppose the government can justify those loans; we have bad guarantees to that railway of $60,000,000. When we do that kind of thing I cannot see for the life of me why we cannot do something just as good and big for our agriculturists.
I do not wish to traverse the ground that has been so well covered by various speakers who have preceded me, but as the representative of a rural constituency I want to plead with the Minister of Finance and with the government to do all that lies in their power to have these loans available at four per cent,
43U
Farm Loan Act-Air. Blair

and I am sure our farmers all through the country would be greatly pleased if that could be brought about.
My only regret is that action of this kind was not taken two or three years ago. I can assure the house that so far as this action at the present time is concerned, it is too late for a great many of the farmers in my constituency, men who have come to me in the last two years to tell me about their difficulties and their troubles. But while that is true, I say let us take action now and do something that will benefit the people who are engaged in what in my opinion is the greatest industry in the dominion.


Mr. J. K. BLAIR (North Wellington):: While I approve very much of the proposal that is before us, I wish to bring to the attention of the house certain abuses that prevail in the district from which I come. We find that when a mortgage is higher than the value of the farm some banker, some loan company or some real estate man having charged a high rate of interest so that the mortgage value is greatly in excess of the farm value, then they get the farmer and his friends together and they say to him, "We will get you a loan on this from the government." They get a loan on the farm for much more than it is worth and then burden the neighbouring farmer by paying more for the farm than its value, with no intention of paying the mortgage but leaving the farm the next year. This has been done in many instances to the detriment of neighbouring farmers.
In the county I represent the farmers find it almost impossible to get a mortgage on their farms. It was bad enough when the provincial government offered five per cent for their loans, but when they offered six per cent that ruined farm loans almost entirely, because the farmer found it impossible to get a loan. We find therefore in North Wellington that there are bams without shingles, houses needing repairs, fences down and cattle in the grain here and there. The farmers are in a desperate situation for lack of money. They require implements but they are unable to buy them. Implements that should have been discarded years ago they are bound to continue using. Another great hardship is their handicap in producing revenue. Their horses and cattle have been reduced in numbers, and sometimes they have had to sell the best of them to raise money to meet interest.
I do not think that four per cent is too low; the lower we can get it the better. The wages of money should have some relationship to the wages of men, and the man who has a

farm does not get four per cent on his investment. Practically speaking, the farmers today are working without wages but only for their keep. We want the interest rate as low as possible.


Mr. J. T. SPROULE (East Lambton):: I
cannot agree with the last speaker (Mr.. Blair). Possibly he has a little money out drawing a high rate of interest and feels that he would not like to have anything less. But in my constituency there are a good many people who will join with some members on the other side in advocating a rate of interest as low as they can obtain. I feel proud of the fact that I belong to a party that has the courage to undertake the task of reinstating the farmer. It is one of the greatest measures we have had before us, and I do not hesitate to say that it is approved by all the farmers in my constituency.
It was suggested by the hon. member for Frontenac-Addington (Mr. Campbell) that the late provincial government was trying to collect a high rate of interest. If I understood him correctly, he intimated that they were charging six per cent or thereabouts. As long as I can remember, for quite a number of years, the Ontario board was lending money at five and a half per cent, and in fact that was the only source from 'which you could get money. If my hon. friend will look up the records he will find that the late government notified all their loan holders in June last that the rate of interest would be reduced to four and a half per cent. If the present government lends at four per cent that will be better still and will be quite agreeable to my constituency, as no doubt it will be to the constituency which the hon. gentleman represents. At the same time the late government should get the credit that it deserves, because a great deal was done in my locality.
The hon. gentleman went so far as to say that the late government had practically thrown away the money, carelessly allowing interest to accrue here and there. I would point out to him that the very same thing would happen if he had the reins of power. These loan boards were compelled to take chattel mortgages on the stock which the men had, but as there was no way in which they could possibly sell the stock to raise taxes there was only one thing for the tax collector to do, and that was to return the tax bill to the county against the property.
The hon. member suggested that the Ontario government had lent several thousand dollars since they came into office. This

Farm. Loan Act-Mr. Beynon
may be true, but it depends upon what side you are on. However, let it be where it is, it makes no difference so long as the loan does some good, because the man who applies for a loan needs it or he would not try to get one. Far be it from me to make capital out of this matter, because this is something that concerns every man in the rural districts. I do not quite agree with the hon. member opposite when he says that this legislation is too late. Even if it is coming along in the last days of this parliament, I admire a government that has the courage to step in and do something. Hon. gentlemen opposite tell us that these things should have been done two or three or four years ago, but the former government was in power for a long time and yet it did nothing. The present government is giving action and action at once so that we will get relief, and there has been no time that we needed it any worse than we do to-day.
As regards the suggestion that those loans were given very carelessly and that some received more than they should, surely my hon. friends opposite do not think that the men who made the valuations were not fair valuators. While they are pretty well cleared out, there are some of them in office still. Those men used good judgment. There is a great deal of difference between the days when you could sell a cow and receive enough money possibly to meet the interest, and today when you would have to sell a dozen cows to meet it, and the same thing would apply in all these cases. If hon. members would look into some of the records they would see that in those days when it was easier to pay $1,000 or $2,000 or $3,000 from the price of produce sold than it is now to pay $150, the amount at which those lands were valued was not too high. If the present provincial government spends the money as wisely as did the late one, they will not do bad business.
I do not want to take up much of the time of the house because I think we are all of about the same mind on the matter. I am sure we will all be agreeable if the interest rate is kept down, and any government that has courage enough to go ahead and introduce a measure, as I said, to reinstate the farmer at the present time, is certainly going to study the whole question and give him the money at the lowest possible rate of interest.


Mr. W. A. BEYNON (Moose Jaw):: Just before the hon. member for East Edmonton (Mr. Bury) rose to speak I had intended addressing the house for a very few moments
on one branch of this subject which has not yet been touched, or at least, had not until then. I do not intend to go over those phases of the Farm Loan Act which have been dealt with. Some of the remarks I heartily concur in; others I do not, but I will leave that for the time being. We have however in all districts in this country cases similar to that stated by the hon. member for East Edmonton, some of them differing somewhat; and I want to deal with one along that line but somewhat different.
There is living in the city of Moose Jaw a gentleman who came to this country from the great republic to the south. He has been farming in that district now to my knowledge for over twenty years. He brought with him to this country over $30,000 in cash, and he invested that money in farm lands in the Moose Jaw district. He has broken those lands and improved them, and all his farms are equipped with the very best of farm buildings. They are also all supplied with the very best of farm machinery and ample power to work them. This man, who had acquired over $30,000 in farming in the United States and who has since then been conducting several large farms in this country, is no longer a young man; consequently he has moved into the city and is living there while his sons and sons-in-law are operating those farms. During this time of drought in that part of the country it has cost a great deal to keep the farms going and his reserves have been pretty well exhausted. He has been buying seed, helping the boys to put in their crops and trying to provide a living for himself. When he was actually farming there was not a year that he could not have had a loan of $5,000 or $10,000 from the bank without any question whatever. This year he went to the bank to borrow a few hundred dollars to pay his taxes and they would not give him a dollar. This man is the owner in his own right of several sections of land, all clear and with the very best of farm buildings. The fact that he is not residing on the land, not actually farming, takes him outside the terms of this act, although he is responsible for the operation of the farms. He is not alone in this; there are many men in that city who are in the same situation, and I have talked to a number of them. The case is very similar to the one stated by the hon. member for East Edmonton. What these men want is not a loan for twenty or thirty years, but a short term loan at a reasonable rate of interest, something to carry them over until they can get a crop and look after themselves. This man unfortunately was hailed out this year.
432	COMMONS
Farm Loan Act-Mr. Weir (Macdonald)
Had it not been for that unfortunate fact, notwithstanding the drought in that district, he would have had sufficient to pay his taxes and cany on his farming operations. It is that class of people who have come and lived here, built up this country, spent a great deal of money, who are to-day denied any source from which they can get money to keep them alive. This man has not a thing on which to keep up his house in the city except what he gets off the farm. I assume they had perhaps a little to sell off the farm, but he needs some money now to put in seed and carry him for the time being.
If the minister could arrange somewhere in this legislation to provide for short term credits for men of this class

not fly-by-night men, but men who have been here for years, men who have built up the country and are substantial citizens-I think that is what should be done. I just want to bring this matter to the attention of the minister because it is a point that should be dealt with, and it has not been covered in recent speeches.


Mr. W. G. WEIR (Macdonald):: I listened with a great deal of interest this afternoon to the minister when he introduced this resolution proposing amendments to the Canadian Farm Loan Act. I think we can all apprehend a general acceptance of the resolution as introduced. Apparently there was quite general unanimity with respect to the object of the proposed amendments to the act. It goes without saying that they will virtually revolutionize the mortgage loan business of the country, and the dominion government in the very near future will be the sole institution lending money on farm lands. That may be all right. It is a huge step and I can quite appreciate that it may be even more acceptable to the farmers themselves than it will be to members of parliament after this legislation becomes operative.
I can see considerable objection to the old act as to the manner in which it operated, in that it was not applicable in or used by all the provinces. I think that may have been unfair. As regards the proposal to consolidate the administration of the act in Ottawa through provincial offices, I have no complaint or observation to make. Perhaps that will work for more uniform administration. In the meantime I should just like to say that so far as the organization in Manitoba is concerned I have not heard of any particular complaint against the officers operating there.


Mr. HANBURY:: Except in Souris.


William Gilbert Weir: There was no
complaint there. With regard to amending the part of the act which required the borrower to subscribe for stock in the company to the extent of five per cent, I am glad to see that eliminated. It used to be in the mind of many people interested in farm loans and rural credits that we should try by this means to secure the interest of the men borrowing the money, with the idea that in so doing he would feel that he was part of the institution, and thereby it would operate more efficiently. But experience shows that that requirement kept a great many people from taking advantage of loans under the Canadian Farm Loan Act. I recall looking into two or three proposals for loans by farmers, and it worked out that the farmer had to pay roughly S8.50 for each S100 borrowed. That looked large to him, so he naturally looked elsewhere for his money. The minister stated this afternoon, if I heard him correctly, that the money subscribed by the . provincial governments up to date would be returned to them. The question came to my mind, as it did to that of another hon. member who spoke: what about the five per cent already advanced by farmers who have taken advantage of these loans? I should like to see that money returned to the fanners in the form of credits on their interest or arrears.
There are two other features to which I should like to refer. In this respect I may get into deep water, but it seems to me that in view of the debt adjustment legislation and prior claims and things of that kind that have developed in the last ten or fifteen years in respect to farm mortgages, our whole farm loan policy will have to be considerably changed. The two features that I should like to submit for the minister's consideration are with respect to the personal covenant and the right to repay a loan at any time without bonus. As far as the personal covenant is concerned my feeling is that it should not be required on a farm mortgage. You might say it should not apply to the homesteader.
I have in mind a farmer owning say a half section of land. Personally I feel that that is a nice sized little farm. He may have that clear of debt. But sometimes we ge't ambitious and wish to add more land. When it comes to purchasing that additional land and borrowing money for the purpose from any mortgage corporation I feel that the farmer should be protected to the extent that his personal covenant should not go on that new loan: in other words protect him to keep him on the homestead.

Farm Loan Act-Mr. Weir (Macdonald)
As to the bonus, if a loan should be paid before due I would submit that the minister might make provision to accept the principal of the loan at any time that it is available. We have seen too many cases in the past in which before a loan came due a man might have had a particularly good year and was in a position to pay off his loan, yet because he had to pay an additional amount to get the mortgage company to take that money he refrained from paying it. Human nature just made him take the position that he would not pay any bonus to the mortgage company. That money then was probably not used to the best advantage, and perhaps when the mortgage finally came due it was not there.
This measure will provide that the dominion government may loan to the farmers of Canada up to $90,000,000. That is a lot of money. Of course it is going to operate in conjunction with the debt adjustment legislation passed a year ago; that is all to the good. I suggest to the minister that an effort be made to have this legislation put into operation as soon as possible. I have in mind people preparing to put in a crop this year. If they could feel assured that they could secure money in the way of a loan at a lowT rate of interest from this organization, they would be much more encouraged to go ahead and put in the crop, and at the same time, where they are heavily involved, would have the additional advantage of making a more satisfactory adjustment with their creditors.
One serious difficulty is with respect to the valuation of land. I cannot tell you how you could go out and value farm lands in Manitoba to-day, and I assume the same thing applies to the other provinces. I listened to what the bon. member for Souris (Mr. Willis) said with respect (to loans in his district. He referred to the farm loan board lending money in another district that suffered from flooding a few years ago. This district since that time has suffered for three years considerable grasshopper damage-not a total loss in every instance but many farmers having practically a total loss for the past five years. I have in mind an illustration. I am reminded of a fanner near me who had a first class quarter section of land. He did not live on it, and consequently was not able to borrow money on it from the farm loan board. He had purchased it under an agreement of sale. Last fall he owed $2,300 on that quarter section. The man to whom he owed the money said, "K you can get me $1,000 I will call it square." and he had to beg friends to let him 92582-28
have that $1,000 at six per cent interest. I recall what he told me of one man whom he approached for a loan. The man said to him, "Why should I lend you $1,000 on that quarter section when I can go down into the district where my own lands are and buy a quarter section from the municipality for $750?" Now, the quarter section that he could buy for $750 is in the area which was flooded out some years ago and to which my hon. friend from Souris referred. So the difficulty of placing a valuation on farm lands for mortgage purposes is very great. I know of many farms in my own district carrying mortgages as high as $20 an acre. Of course this man who was able to pay off his $2,300 mortgage with $1,000 was pleased to do it- Perhaps that might be called the purifying effect of capitalism and regarded as one of its advantages. In that connection may I point out that it is likely that some day the government will be obliged to accept a less amount of money for mortgages than the amount loaned.	'
I think the government is fortunate in being ahle to start this plan at this time. Farm lands are undoubtedly low in price now, and the risks should be proportionately less. In Manitoba we had the Manitoba Farm Loan Association, which unfortunately started at a bad time. Its history is not any too bright. I hope that this legislation will meet with much greater success. The fact of its being started in a period of depressed prices should make for success.
There is one other point that comes to my mind, and it is this; if I recall correctly the aict as it stands at present provides for one per cent additional interest on arrears. I do submit that this should be changed. The man who farms or wants to farm is anxious to keep up his payments if possible, and I submit to the minister that if it can be done some provision should be made for carrying arrears, if they must occur, at the original rate of interest.
The other feature that comes to my mind is that it does seem too bad, when we can secure money at four per cent or perhaps less, that we have to add one per cent for administrative costs. That seems too high a percentage for that service. It may be necessary but it does not seem fair, in comparison with the cost of the money, to 'have to pay an additional one per cent just to administer the organization and provide for the reserve to be set aside for bad debts.
I have nothing further to say with respect to this legislation except a word of commendation to the government. I honestly think



Farm Loan Act-Mr. Spencer
this is a move in the right direction; I feel that we are starting at the right place. I agree with other hon. members who have taken the position that after all is said and done we can talk about the assistance we must give to the unemployed, to the building trades and so on, but in the final analysis if you can get the farm business on a sound basis and in a position to carry itself reasonably well you will do more to relieve our generally distressed situation than by all the other legislation you might put through.


Mr. H. E. SPENCER (Battle River):: Mr. Speaker, I am very glad indeed that this act is to be amended in a worth while fashion. I remember when the act was passed by this house in 1926; we had great hopes in regard to this type of legislation. It was put forward as a great advance, as no doubt it was, and if the administration had been carried on in the spirit in which the act was drawn up, there is no doubt at all in my mind that it would have filled a great want. Unfortunately, however, after the act was passed it was held up for a year, and then it seemed to fall down entirely as far as administration was concerned. I say it fell down because we had hoped that at least twenty per cent of the enormous number of mortgages in Canada would have been taken up under this act. It was estimated that if this happened it would have the effect of forcing the loan companies to bring down their charges to the level of those made by the farm loan board. Owing to the way in which the act was administered, however, very little money was loaned. According to some figures given me in 1932 I find that only 4,119 loans were granted out of 14,423 applications made, and although the Minister of Finance had the right to purchase bonds of the farm loan board to the extent of 815,000,000 I find that up to 1932 only 87,500,000 had been loaned under the act.
I knew that the act was not working out successfully in the province from which I come, so far as loans were concerned, but I was interested in the figures given to-night by the hon. member for Medicine Hat (Mr. Gershaw), who said that in 1931 only 298 loans were made in the province of Alberta, and the number dropped as low as 47 in 1934. It always seemed to me that one of the weaknesses in the act so far as Alberta was concerned, and I suppose this applied to other provinces as well, was that loans were not made unless the borrower turned over as security the land on which his house was

built. I know many men of excellent standing as farmers who wanted loans on land, but not on the land on which their houses stood. Although they had ample security to offer for the loans, their applications were refused. I know of several cases in which the would be borrowers, after having been turned down by the board, made application to ordinary loan companies and received advances on their land without delay.
I join with others in this house who have stressed the absolute need of a very low rate of interest under this act. I do not know what the Minister of Finance has in mind, but I sincerely hope that the rate will not be more than four per cent, and that if possible it will be less. As the hon. member for Macleod (Mr. Coote) pointed out earlier in the evening, the Farmers' Creditors Arrangement Act and the Farm Loan Act are two measures that should work together, but while I have great hopes of some good being done by the administration of the first measure I am rather afraid that it will be a partial failure if we do not see that the greatest possible use is made of the farm loan act.
I should like to say just a word with regard to the cost of administration. We are informed in regard to the unemployment insurance measure the government proposes to carry the cost of administration. If that is to be done in order to help those in the cities who are receiving insurance relief woidd it be too much to ask the government to carry the cost of administration of this act in order to help out those who earn their livelihood in the country?
I do not wish to say more at this time because we do not know all the details of this bill. I freely admit that we had great hopes when this act was first introduced; we have been frightfully disappointed, but at the same time I realize that if the necessary amendments are made it may become a very useful piece of legislation.


Mr. ONESIME GAGNON (Dorchester):: Mr. Speaker, if I rise at this time it is not because I desire to find fault with what the distinguished critic of the Cooperative Commonwealth Federation has said. I had hoped to spare the house the trouble of listening to me, but so few members from the province of Quebec have expressed their views on this important question that I fear the Minister of Finance (Mr. Rhodes) may think us indifferent to his proposed legislation if something is not said by some of us who eome from this province.

Farm Loan Act-Mr. Gagnon
During this debate we have heard many new members make their maiden speeches, and certainly they deserve ito be congratulated because they have pleaded well the cause of the farmers of their constituencies. We know, of course, that they are fresh from the byelections, and undoubtedly they have come here determined to fight the government to the last ditch. It is a pleasure to the older members, however, ito realize that the newer members find it necessary, when they rise for the first time, to congratulate the government on the proposed new reforms which it is hoped will bring salvation to Canada. '
This resolution is very important indeed, in view of the sad situation of agriculture, not only in the western part of Canada but in the province of Quebec. The dire condition ?f farmers and the great poverty under which they are operating certainly cannot be overstressed. I happen to represent a rural constituency which has suffered very much during the depression, and certainly my constituents will welcome with great pleasure the amendments the government is introducing.
I have already advocated some reforms in connection with rural credits. Speaking on the budget in 1932, I said:
Now, Mr. Speaker, may I refer to other legislation which has been disastrous to the farmers of eastern Canada; I mean the law rnacted in 1929 creating the Canadian Farm Loan Board. This legislation may have been aeneficial to the western farmers, but it has aot been at all helpful to the farmers of eastern Canada. The rate of interest is too high, the legal fees incident to the granting of loans are also too high, and the obligation laid upon borrowers to contribute to the special fund is not only unpractical but absurd.
I realize I might have used milder language, but these were my views. To illustrate the impracticability of the legislation I shall describe to the house the case of a poor farmer living in one of the older parishes in my constituency. His farm was valued at S4,000. In 1932 he applied for a loan of only 81,400 which has not yet been granted. Notwithstanding the fact that he has been unsuccessful in his effort to secure a loan, he has been sued by a notary who is charging him the sum of $400-only $400-for the cost of investigating titles, and so on. I have complained to the federal and provincial boards, but they say there is no remedy because they cannot prove that the notary did not render the services for which he has charged so high a fee.
Nevertheless I feel this case illustrates my point, namely, that the criticism which has been levelled at the act is certainly justified 92582-28J
in many respects. I believe all hon. members agree that amendments are necessary, because I have not heard any dissenting voice this afternoon from any quarter of the chamber. Of course we know that at the last session some amendments were made, but as the hon. members for Dufferin-Simeoe (Mr. Rowe) and Compton (Mr. Gobeil) said this afternoon, the enabling legislation has not been passed 'by the legislative assemblies of Ontario and Quebec, although in Quebec the legislature has been in session since January 7. Everyone realizes that a general overhauling of the act has to be made. I understand there are difficulties the government will have to face in connection with any change in rates of interest, but I feel I must agree with what some hon. members have said, namely that it would be highly desirable, if at all possible, to have the rate of interest lowered to four per cent.
In 1931 the Conservative opposition in Quebec waged a very extensive campaign for the establishment of a provincial system of rural credits. At that time the leader of the opposition in that province was criticized and considered very unwise because he recommended that the rate of interest should not exceed two and a half per cent. Nevertheless in some financial reviews we have read lately that in Italy Mussolini has created a system of rural credits whereby the farmers pay only two and a half per cent. I am not at all prepared to go that far now, because I realize conditions in southern and central Europe are very much different from those obtaining in America. That is true because of our longer winters, and the fact that farming in this country cannot be carried on for more than six months. Nevertheless I certainly wish the government would lower the rate of interest to as low a point as possible.
I recognize that due to pressure of public opinion the legislature in the province of Quebec has contributed one and a half per cent to the interest charged by the Canadian farm loan board. I sincerely hope when the new legislation is in operation the provincial government will see its way clear to raise its contribution to the point where they will pay half the interest levied.
May I also stress the point that one must not lose sight of the fact that the new legislation will be a necessary complement of the Farmers' Creditors Arrangement Act which only lately has been passed. In the province of Quebec the farmers have applied to the middle class, the rentiers, to obtain loans, but in many instances the rentiers are not much richer than the farmers. Some rentiers have

Farm Loan Act-Mr. Gagnon
loaned to the farmers everything they had, and now on account of moratorium legislation passed in Quebec since 1933 those creditors cannot get their money. At this time they cannot obtain relief from the banks or from the mortgage loan companies. Therefore it is necessary that they have at their disposal the only instrument from which they can get relief, namely the Canadian Farm Loan Board.
Therefore I urge the minister to set up as speedily as possible the required organization to provide the necessary moneys so that the farmers who this winter have made arrangements with their creditors may secure a loan as soon as possible next spring. I urge the minister, further, to appoint a large number of farm inspectors so that at the earliest possible moment farms may be inspected. I realize this will entail an expenditure of money, but it will not constitute a waste because the more money spent to inspect farms and provide loans to farmers the less money will be spent in the administration of the Farmers' Creditors Arrangement Act.
For these reasons I am pleased to concur in what has been said from all quarters of the house in welcoming the resolution. Indeed it must be gratifying for the Minister of Finance and the Prime Minister to know that the new program of reforms has been so well received by the opposition, because nothing by way of reform could be more practical than that which tends to ameliorate the conditions under which the farmers are operating.


Mr. VINCENT DUPUIS (Laprairie-Napierville):: Mr. Speaker, I shall not take
the time of the house to discuss the question of farm loans from the standpoint of their economic soundness, because experience has proven in this country and in the United States that from that point of view they have been disastrous. If I recollect aright, before the N.R.A. legislation in the United States, that country had claims against farmers for over one and a half billion dollars which were considered then a complete loss to the country; and if we consider this legislation on that ground, it certainly would be very hard to understand. But I suppose that the government in its last hour of agony has decided for once to find within its bosom one good resolution. May I hope, Mr. Speaker, that it may not prove to be one brick paving the floor of that place to which I do not wish the government to go at the next election?
I have tried to find a reason why the government is bringing down this legislation at

this late hour. I have asked myself: Is it because they have tried that other legislation called the Farmers' Creditors Arrangement Act which they passed last year, and which as a matter of fact has completely destroyed the credit of the farmer of eastern Canada?


Samuel Gobeil: It was all destroyed before that law was passed.


Vincent Dupuis: Perhaps the hon. gentleman finds the destruction around him so extensive that everywhere he sees nothing but destruction. But speaking for the province of Quebec, from which my hon. friend comes, he knows perfectly well that before that Farmers' Creditors Arrangement Act was passed, farmer lenders in our province relied on the credit of a farmer, because they knew that no sounder or better security was to be found in Canada than the security of our farms even since the crisis. Don't shake your head.


Samuel Gobeil: Absolutely no.


Vincent Dupuis: The hon. member for Compton (Mr. Gobeil) says, "absolutely no." Well, I hope he will go into his riding and say that again.


Samuel Gobeil: I certainly will.


Vincent Dupuis: Then he has more courage than judgment.


Samuel Gobeil: That remains to be seen.


Mr. McINTOSH:: They say he will not
come back.


Vincent Dupuis: In the province of Quebec
the best security was our farms before the Farmers' Creditors Arrangement Act was passed, but since the enactment of that legislation there is not a single lender who would dare to lend one cent on a farm, because the farmers, good and bad, as soon as they are sued for a mortgage, now rush to the local administrator of the Farmers' Creditors Arrangement Act and seek an adjustment reducing their mortgage perhaps fifty per cent; or they may ask that they be absolved from paying interest for from fifteen to fifty years. The hon. member for Compton knows that. Who will dare to lend money on the security of the farm under those conditions? The consequence is that the farmers have their backs to the wall. They do not know what to do. There is only one recourse and it is this legislation.
Why did the government wait so long to pass this legislation? Was it because, as the Prime Minister (Mr. Bennett) said in his

Farm Loan Act-Mr. Dupuis
radio addresses, the opposition deliberately opposed any legislation that the government introduced into this house in the last two or three years? I would answer the Prime Minister by saying that if the opposition did anything wrong in that particular case it was in not opposing the Farmers' Creditors Arrangement Act. Nobody said a single word against it last session, and it has proved to be the worst piece of legislation that was passed.


Samuel Gobeil: Weren't you here then?


Vincent Dupuis: I was here, but I had the same idea that the Prime Minister mentioned over the radio. I did not want to oppose the government too much because, although I am not a prophet, I knew that the Prime Minister, having no other argument, would try to throw something on the opposition one way or the other, so I think I showed good judgment, as did all the members on this side.


Hugh Guthrie: He has got you going all right.


Vincent Dupuis: This year the government comes with this legislation, and I say it is too late. It is only a deathbed repentance.
My hon. friend from Dorchester (Mr. Gagnon), with his fine command of English, which I envy him, said: In 1932 I said such and such a thing in favour of the farmer. Well, Mr. Speaker, if I may take the attitude of a great man as he does, may I also remind the house of what the hon. member for Laprairie-Napierville said, not in 1932, but in the special session of 1930 when the government put through its unemployment relief measure:
I would ask the Prime Minister if the last two lines of clause 2 of the bill, reading "for such purposes and under such terms and conditions as may be approved by the governor in council" are broad enough to permit of an amendment to the Farm Loan Act to reduce the interest rate from 6^ to 4J per cent.
In that special session in 1930, when the Prime Minister was taking the money from the purse which we had left filled with forty-four million dollars before going out of office, and spending $20,000,000, throwing it away to fulfil one of his election promises because he did not want to perish in the attempt, I thought then, as the representative of a farming constituency, that it would have been proper for the government to redeem another promise and extend that relief to the farmer, and that is why I asked the Prime Minister then to reduce the rate of interest. But did they do anything about it? No, they were deaf-but not dumb. They could not
do it then-it was impossible. If I remember well, the representatives of all the farmers of this country took the trouble, although they were starving, to make a pilgrimage to Ottawa, and mind you, among this distinguished delegation there were members of parliament, including the hon. member for North Huron (Mr. Spotton) and the hon. member for Southeast Grey (Miss Macphail). They sent three delegates to the Prime Minister, who was very busy with the big lords of England, and they disturbed the tranquillity of the right hon, gentleman when they asked him to come to the rescue of the farmer. You know very well, and the whole country knows what the Prime Minister answered. He said he did not have time to meet the delegation. They then begged him to send the Minister of Agriculture (Mr. Weir), who is as a matter of fact a real gentleman, "Oh," said the Prime Minister, "the Minister of Agriculture is as busy as I am; we have no time for that." They were here for the purpose of asking this government, at a time when it was opportune, to help the farmer. But nothing was done. As regards the rate of interest, the argument was that it could not be lowered.
I see here in a Montreal newspaper, a newspaper which is always very delicate in what it has to say with regard to members of parliament-and the Minister of Marine (Mr. Duranleau) knows something about this, because I see a nice article written on this subject-I see in this newspaper something about the three ministers from the district of Montreal. I will not dare to repeat what is said about these three ministers, because I am proud of my province; I am proud of the population of that province, and I would be ashamed to repeat it before the representatives of the whole country, and leave this house under the impression that the whole province of Quebec is on the level on which the three ministers of the crown from the province of Quebec have been placed. The only thing I want to point out is that they praise the Prime Minister, declaring that had the ministers from the province of Quebec been more active, had they exercised more influence with the Prime Minister, they could have obtained something that would help to rescue the city of Montreal. And to prove it they say, "Mr. Houde just applied to the Prime Minister and in one moment the Prime Minister found in England $6,000,000 at a rate of 3} per cent." That is all very well, but may I ask whether the influence of the right hon. gentleman could not have been used on behalf
43S

Farm Loan Act-Mr. Dupuis
of the most important and the most interesting class in this country, the farmers who have been starving since this government came into power?
Nevertheless the intention is good and I want to congratulate the government on bringing down this legislation. It is better than nothing. We know that Christian charity obliges us to forgive even the greatest sinner in his last hour of agony, and I do not want to be less Christian than I am bound to be.
The hon. member for Dorchester (Mr. Gagnon) tried to throw stones at the government of the province of Quebec. Well, that is his usual habit; he is used to doing that because he has no argument against the Liberals in the federal field. But may I remind him that the province of Quebec, as he said-and I thank him for being frank for once-has contributed to the extent of one and a half per cent in the rate of interest in connection with the farm loan board. That is something. But he goes further. The hon. gentleman suggested that the province of Quebec should contribute fifty per cent of the rate of interest under this new legislation. Is it because his Prime Minister has acceded to the request of the premier of Quebec to contribute fifty per cent in connection with the unemployment relief legislation in Montreal, and by so doing relieve the municipalities of their unbearable burden, that he makes through this House of Commons a petition to the government of Quebec?
I heard the premier of Quebec about a month ago make that kind offer to the Prime Minister of Canada to contribute fifty per cent. I do not know whether I am wrong, but the Prime Minister is here to say whether I am or not. At any rate, I have never heard that the Prime Minister of Canada has accepted that offer of Premier Taschereau.


Richard Bedford Bennett: That was not the offer.


Vincent Dupuis: I am prepared to wait for an explanation from the Prime Minister. I should like to hear what the offer was. The Prime Minister has sometimes said that I am not clever, and I am the first to admit it. But I believe that I understand something about political economy-


An hon. MEMBER:: Honesty.


Vincent Dupuis: I will not say honesty, because the Prime Minister is an honest man. But I understand something of political economy and I know something about the meaning of words. I was there the night the premier of Quebec spoke, and the speech was

broadcast. He said, "I am ready to contribute to the amount of fifty per cent if the Prime Minister of Canada is ready to contribute the same amount to relieve the municipalities of the province of Quebec of the burden which is sending them into bankruptcy." If these are not the right words I shall be glad to hear from the right hon. gentleman, but that was what I heard. The hon. member for Dorchester no doubt knows in his heart, therefore, that the premier of Quebec is a very good administrator and made a very opportune offer, because he knows very well that the municipalities in this country are all going to be ruined if they continue to contribute one-third.


Samuel Gobeil: Ask Mr. Lacroix.
Mr. DUPU'IS: You deal with the hon. member for Beauce; he will settle you, because he knows you better than I do.
To conclude, Mr. Speaker, may I say this. I am in favour of this new legislation so far as I know what it is at the present time, reserving my right to discuss it on its merits when it comes 'before the house again, and I hope that the rate of interest will be as low as possible. The cost of administration is one and a half per cent for the farm loan board, and I am always asking myself why the cost of administration of the farm loan board is not paid by the government itself, because in many other commissions it is paid by the government. For instance, as regards the natural products marketing board, the railway board, the unemployment insurance board and perhaps many others, their administration is paid by the government, and I do not see why the farmers of this country are not of as much importance as those concerned with all this other class of business. I just put this question to the government. If this one and a half per cent is taken away from the rate of interest already intended to be charged, a great benefit will ensue to the farmers, and this may help to cover the bad features of the Farmers' Creditors Arrangement Act.
Mr. CAMERON R. MoINTOSH (North Battleford): Mr. Speaker, I desire to make just a few (Observations in connection with the resolution before the house. Perhaps the background of this resolution is somewhat similar to the background of the Agricultural Adjustment Act and the National Industrial Recovery Act characterizing the recovery legislation of the republic to the south of us. One cause that brought about governmental action to help the farmers there was the

Farm Loan Act-Mr. McIntosh
disparity between agricultural and industrial prices. That disparity became very serious and action had to be taken. Legislation followed by congress adopting the administrative agricultural act and the industrial recovery act. Another cause was that the spread in prices between agricultural and industrial products broke the purchasing power of the nation and as a result the credit structure of the whole country was interfered with.
The same thing is really the cause of the resolution before the house so far as Canada is concerned. The time has come in the history of this dominion when one of our basic institutions, agriculture, as we have heard to-night on all sides, is in a serious plight, just as it was across the border, and action has had to be taken. I am not one to say that the government ought to be blamed because that action has been somewhat belated because I am one of those who believe that it is better late than never; even a deathbed repentance is good if out of it can grow some constructive action that is helpful to others, although the government repenting may not be saved. So I say that I have been pleased to see the pleasant features that have characterized this debate. It has proved at least one thing: that we can have a debate in this house in a cooperative spirit. That is, we can agree on some things. To my mind that is indicative of parliamentary progress and also an honour to members of this chamber.
A great deal of interest has been shown in this debate and we know in a psychological sense interest always arouses attention, attention arouses action and action is always typical of the character of the individual. There can be no disputing that fact. That is sound individual economy. The same thing holds true as to this resolution. The interest in the house has been satisfactory and a good deal of attention has been aroused. The whole matter now will depend upon the action by the government and the character of that action during the next year or two. In other words, the whole success of this measure will depend upon the machinery established by the government and the way in which the work is carried out. If the machinery established is unworkable and not guided by a wise personnel, then of course the results will not be as anticipated, but I am hopeful that the results will be very good and so far as the resolution is concerned I believe the more adaptable the legislation that will grow out of it, the greater the success that will characterize the government's move.
The resolution deals with facilitating and extending credit to farmers, purchasing additional bonds issued by the board and guaranteed by the government, and amending the constitution of the board. These three parts of the resolution look hopeful and lead me to believe the government back of them is sincere about it and that we may look for ameliorative action during the next year or two.
I am pleased also to notice that parallel or concurrent legislation is under way in the different parts of Canada and that the measure will be a national piece of legislation; that is, it will apply to all Canada and not to a part of it. As a member from the west, and particularly from Saskatchewan, I am gratified to know Saskatchewan will be able to take advantage of this legislation. So far as the riding I have the honour to represent is concerned I may say that during the last two years we have had splendid crops; perhaps some of the best crops in Canada were in northern Saskatchewan last year. I do not care where you may go for comparison. Notwithstanding that I believe there will be great work to do for this measure when it becomes operative and therefore I am taking advantage of the debate to-night to say a few words on its behalf.
The two main features of the resolution are: first getting debts adjusted, and, second, extending credit. The whole essence of the legislation depends upon these two features of the legislation. So far as adjustment of debts is concerned, the Farmers' Creditors Arrangement Act of 1934 has not as yet covered a great deal of ground in Saskatchewan. I was speaking to the official receiver in the North Battleford area and he gave me to understand that only about twenty to twenty-five per cent of the debts before him were adjusted. Even twenty or twenty-five per cent means something, but that would leave about seventy-five per cent of the debts untouched and that means that in connection with seventy-five per cent of the debts coming before him for adjustment he found it impossible to get any adjustment. He said that he lacked power; he was chairman of a committee of three as it were; the creditor's, representative was there, the debtor was there and he was there himself, and if they did not come to an agreement, nothing could be done. Consequently in seventy-five per cent of the cases no agreement was reached and the debt adjustment was passed on to the provincial board of review. The Saskatchewan board did not


Mr. F. G. SANDERSON (South Perth):: Mr. Speaker, I would like to associate myself with hon. members in all quarters of the house in commending the Minister of Finance (Mr. Rhodes) for bringing down this resolution. Representing as I do an agricultural constituency in Ontario I am heartily in sympathy with the proposal and commend the government for at least making some move in regard to reduction of interest on money loaned to farmers.

Some of the hon. gentlemen who have spoken to-night have said they thought this legislation has been brought down too late. While I confess it would have been better for the great basic industry of this country, agriculture, if the government had brought down this legislation two or three years ago, yet I am glad that they did bring it down in the last session. As far as I am concerned I want to go on record as saying that I will support this legislation and be whiling to give credit to the government for bringing it down. To the Minister of Finance I say I think it will be a great mistake and a serious hardship upon the farmers of this country-I speak more particularly for the farmers in my own constituency in w'estern Ontario

if the rate of interest is not brought down to at most four per cent. If I understood the minister correctly this afternoon he stated that the cost of administration of this act would probably be about one and a half to two per cent, which would increase the rate of interest. Am I right in that?


Edgar Nelson Rhodes: Mr. Speaker, unfortunately we are not in committee. I made the suggestion earlier that it might have been wiser to go into committee where we could have had question and answer. I should like to have risen several times, but under the rules I could not. But when we get into committee I shall be glad to answer as many questions as I can.


Frederick George Sanderson: I thank the minister
for his courtesy. But may I say that there has been no legislation attempted in this parliament during the last four or five years to aid the farmers. I know I may be getting very close to a discussion that would be controversial, and I do not want to do that; nevertheless, except perhaps for the attempt to get further markets for farmers and better prices, that is my opinion. I am free to admit that in the last year or two there has been a slight increase in the prices of some commodities that the farmer grows; wheat, for instance, has advanced a good deal over two years ago; the price of hogs has advanced, and so on. But even to-day the basic industry of Ontario is in dire distress. If, therefore, there is any possibility of bringing the cost of administration of this act down, the minister should do so. I go further and say that if it is not possible to bring it down so that the rate charged may not exceed four per cent, then anything above that the government and the country should pay. I say that for this reason: the farmer gets no benefit from unemployment insurance. As

Farm Loan Act-Mr. Sanderson
to unemployment insurance let me say that if the bill when it comes in meets with the approval of the opposition, speaking only for myself, I shall be glad to support it. But it affords relief only to certain classes of workers. So far as the farmer is concerned it will cost him something and he will get nothing. Even, therefore, if the cost of administration of this proposed legislation for the relief of the farmers is considerable, I think the government should bear that charge so that the rate of interest shall not be over four per cent. That would go a long way towards helping the farmers of th'is country.
I do not know whether the Minister of Finance is familiar with the plight of the farmers in Ontario, which is a great agricultural province. The part of the province from which I come, and the constituency which I have the honour to represent in this house, in normal times is one of the most prosperous farming communities in Ontario.
I want to point out to the minister that with few exceptions farmers who a few years ago were in a comfortable position, with either no mortgages or small mortgages on their farms, and in many cases with resources laid up in the way of investments or money in the bank, now find themselves right up against it. In almost every case the resources which were laid up for a rainy day have disappeared. I am not going to blame that condition on this government, but it is a condition that exists. If the government knew t]ie plight of the farmers in this province and understood their difficulties they would realize that unless a rate of interest of four per cent or less is secured on loans to farmers, this legislation will not be of much help.
This afternoon the hon. member for Macleod (Mr. Coote) read some statistics with regard to the earnings of farmers throughout the dominion. If I understood him correctly the hon. member said that for the calendar year 1933 the average earning of the farmer amounted to something over $600, while in 1934 that average had increased to something over S700. How is a farmer with a family, with a mortgage on his farm and with taxes to pay, to navigate financially with an income of less than S80O a year? I quite agree with the statement made by the hon. member for South Huron (Mr. Golding), that if the basic industry is not prosperous there can be no prosperity for anyone. The farmers have the buying power; they have the largest spending power of any industry in Canada, and when that spending power is curtailed or almost cut off, as it has been for the last four or five years, they find themselves in dire distress. So I would urge the Minister of
Finance to do everything possible to get the rate of interest down to four per cent.
I may say, Mr. Speaker, that in the county from which I come many farms that have been perhaps handed down from father to son, or owned by the one family for many years, have been practically taken away during the last four years because the farmers have been unable to pay either the interest or the principal of the mortgages. If you go around the rural sections of Ontario, and particularly western Ontario, you will find many vacant, deserted farms, with taxes and interest arrears accumulating, representing a condition that is almost intolerable. If this legislation will give the farmers any relief I am all for it, no matter what may be the cost of administering the act. Just here I might say to the minister and to the government, in regard to the cost of administration, that the governmental machinery of this country is too expensive. In almost every department there is duplication as between the federal and provincial governments, which only adds to the cost. I am not saying this in a critical or offensive way, but there are too many members of the outside civil service travelling up and down the country. It is costing too much money, and in the final analysis the consumer has to pay for it. In connection with this legislation the minister might well set a good example by not having too many officials and thus curtailing the expense of administration.
I do not think I have a great deal more to say, Mr. Speaker. Local boards were referred to several times this afternoon. In my opinion the setting up of local boards will only add unnecessary expense, and if it would mean any saving I would recommend that the minister cut out the local boards in order to reduce expenses to the bone and set a good example to the other departments.
There is just one other point to which I should like to refer. I said many farms in the province of Ontario were vacant, but there is another side to the question that I do not think has been considered as yet. Back in 1918, 1919 and 1920, when conditions were what we called prosperous, when farmers were receiving big prices for everything they had to sell and when trade and commerce was expanding-and expenses were expanding as well-many well to do farmers in my part of the country, like other business men of that period, branched out and added a second and in some instances a third farm at prices at least double what they would have to pay to-day. In almost every case they had to borrow money and give a mortgage covering not only the second or third farm but also

Farm Loan Act-Mr. Boulanger
their home farm. To-day those men are in a terrible condition. They have not sufficient income to pay the interest on the mortgage, and they are loaded up with farm property on which, in many instances, they could not realize twenty-five per cent of the cost. I mention this to indicate to the minister the condition of the farmers in old Ontario, and :o show that they need some assistance from this government. I hope this measure is only the beginning of the assistance that will be rendered by the government to the agriculturists of the province of Ontario.
Mr. OSCAR L. BOULANGER (Belle-ihasse): Mr. Speaker, I shall not detain the house for more than a moment. I really cannot take part in this debate because I was not in the house when the resolution was presented and explained; I was not here because I was attending the sitting of the royal commission on price spreads.
I should like to refer for a moment, however, to something said this evening by my hon. friend from Dorchester (Mr. Gagnon). If I understood the hon. gentleman aright- md if I did not he will correct me-he blamed the government of Quebec for not having passed enabling legislation in connection with the amendments made to the farm loan act last session. I hold no brief for the Quebec government, but I think it only fair to say that one of the main amendments of last year, in fact the only important amendment, concerned the second mortgage that might be secured by a person who had already received a loan from the farm loan board. The amendment provided that the second mortgage could be secured on the land, live stock or other personal property of the farmer. Of course the hon. member for Dorchester knows very well that in the province of Quebec, under our legal system, there is no mortgage on personal property, on live stock or on chattels. A chattel mortgage is unknown in that province. Perhaps that was the reason the Quebec government did not pass enabling legislation to put into force in the province of Quebec the amendments made to the Canadian Farm Loan Act at the last session.


Mr. MICHAEL LUCHKOVICH (Vegre-ville):: Mr. Speaker, unless the Canadian Farm Loan Act and the Farmers' Creditors Arrangement Act are made supplementary neither piece of legislation will be as great a benefit to the farmer as was originally anticipated. I understand the mortgage indebtedness on farms in this country to-day is about 8700,000,000. I suppose most of that sum will be readjusted under the Farmers' Creditors Arrangement Act, and if it is not

it should be. In view of the fact that there is such a huge mortgage indebtedness in Canada-


Wilfred Hanbury: Is it all on farms?


Michael Luchkovich: Yes, on farms only. In view of that fact I am quite convinced we shall certainly require more than the original 815,000,000 voted in this chamber, and I venture to say we will need even more than the $90,000,000 spoken of to-night. The government should be congratulated, however, upon increasing the amount from $40,000,000 to $90,000,000, because the farmers will be benefited at least doubly thereby.
Just 'before I left for Ottawa I met a farmer in my district who told me that provided he paid his indebtedness to the mortgage company they were willing to reduce his debt by thirty-five per cent. The nigger in the woodpile lies in the fact that he is absolutely unable to get credit to discharge that indebtedness. The only way he could get it would be through the farm loan board, at a lower rate of interest and on more reasonable terms. I agree with hon. members who say that the interest rates should be reduced to four per cent. Very few people realize what a reduction of one per cent means to a farmer; in many cases it means the difference between success and failure. I believe these two pieces of legislation should be complementary, otherwise the farmers will not derive from them the benefit that they should.


Mr. J. H. MYERS (Queens):: Mr. Speaker,
in the few moments at my disposal


Mr. SPEAKER:: Has the hon. member for Queens spoken before?


John Howard Myers: No, not on this question. I am sorry to have to speak now, and I can assure hon. members I should have had no notion in the world of doing so had it not been for one remark made by the hon. member for South Perth (Mr. Sanderson), a remark which to my way of thinking was not only contrary to the facts but was quite unfair.
He said that during the last four years there had not been a single thing done in this House of Commons to aid the farmers. I like to see a debate conducted on a fair and square plan. I recall the very first act of this government, at the first session, was to pave the way for the Ottawa conference agreements. I have in my mind, too, legislation for debt adjustments, the marketing act and the wheat bonus.


Frederick George Sanderson: Will the hon. member permit a question?

Questions


John Howard Myers: The hon. member has
spoken. Almost everything that has been done in this House of Commons during the life of this parliament has been done with the aim and object of aiding our farmers. Let me say further that I do not know of one piece of legislation passed by this government to aid farmers which was not strenuously opposed by almost every member on the opposite side of the house.


Frederick George Sanderson: The hon. member made his speech last night on the Ottawa agreements.


John Howard Myers: I did not speak last night on this motion, and I have the right to say something at the present time. The hon. member who has just interrupted is one of the worst objectors in the house; he objects to everything which would benefit or alleviate conditions under which the farmers are operating.
Motion agreed to and the house went into committee, Mr. Bury in the chair.


Edgar Nelson Rhodes: Mr. Chairman, I had hoped that we could introduce the bill to-night and thus avoid practically a week's delay. I have sat here for six solid hours and have not had an opportunity to say a word, because according to the rules I have no right to reply on the motion to go into committee. I am making no complaint; I am merely stating that I feel it my duty to reply to certain observations which have been made. Under the circumstances I shall move that the committee rise, report progress and ask leave to sit again.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned without question put, pursuant to standing order.
Monday, February 4, 1935