[Stage Direction]
Hon. C. G. POWER (Minister of Pensions and National Health) presented the second report of the special committee on pensions and returned soldiers' problems.

Questions

[Stage Direction]
Hon. ERNEST LAPOINTE (Minister of Justice) moved for leave to introduce Bill No. 89, to amend the Juvenile Delinquents Act, 1929.
He said: Mr. Speaker, the object of this bill is to correct certain clerical errors that were made in the enactment of the statute last year.
Motion agreed to and bill read the first time.

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

Mr. POULIOT:: 1.	Did the Right Honourable R. B. Bennett, then Prime Minister, ask for a ruling from the Department of Justice before signing, in his own name and in his capacity as Prime Minister, the letter of guarantee of the $60,000,000 loan to the Canadian Pacific Railway, on behalf of the dominion government, the said letter being dated May 31, 1933. and addressed to the president of the .Bank of Montreal?
2.	If so, did the Department of Justice give a ruling, and, in such ease, what was the ruling, and when was it given?


Mr. LAPOINTE (Quebec East):: 1.	There is no record of the Department of Justice being asked to furnish such a ruling.
2.	Answered by No. 1.


MRS. CLEMENTINA FESSENDEN
Mr. CHURCH:: 1.	Will the government consider taking any steps to honour the founder of Empire Day, the late Mrs. Clementina Fessenden, buried in St. John's Anglican cemetery at Ancaster, Ontario, by way of erecting a suitable memorial or monument?
2.	Will the government lay on the table of the house, if available, any correspondence, resolutions or documents that have been sent to them in support of such a matter?


Mr. MACKENZIE KING:: 1.	No correspondence, resolutions or documents have been received concerning the proposal and no representations have been made in respect to it. The matter is not under consideration at present.
2.	Answered by No. 1.


EXPORTS TO UNITED STATES
Mr. MULLINS:: 1.	How many head of cattle were sent across the border from Canada from January 1, to May 1, 1935 and 1936, respectively?
2.	How many swine were sent across the border from Canada from January 1, to May 1, 1935 and 1936, respectively?
3.	How many	carloads	of	potatoes	were
exported to the United States from Canada from January 1, to May 1, 1935 and 1936, respectively ?
4.	How many	carloads	of	turnips	wereexported to the United States from Canada from January 1,	to May	1,	1935 and	1936,
respectively ?
5.	What amount of poultry (live) was sent
to the United States from Canada from January 1, to May 1, 1935 and 1936, respectively ?	*
6.	What amount of lumber (softwood) was
exported to the United States from Canada from January 1,	to May	1,	1935 and	1936,
respectively ?


Mr. EULER:: 1.	No.	$1935	
40,565	2,340,0841936	
76,755	3,681,8592.	No.	S1935	
145	3,1251936	
22,632	390,2413.	Bush.	$1935	
94,405	34,5251936	
223,736	197,1844.	Bush.	$1935	
804,656	173,9931936	
1,152,781	355,3175.	No.	$1935	
6,402	1,8751936	
71,655	46,5676.	M ft.	S1935	
68,049	1,649,2081936	
145,575	3,247,678
Note.-With reference to queries 3 and 4: Impossible to furnish exports of potatoes and turnips by "carloads," as exports of potatoes and turnips are entered in Canadian trade statistics in "bushels."
chateau laurier employees


Mr. PELLETIER:: 1.	What was the number of employees employed by the Chateau Laurier hotel 'and in what capacity during the months of February, March, April, and May, 1936?
2.	What number of hours are various classes of employees expected to work?
3.	What is the number of hours worked as overtime or extra time on Sundays or on the day usually allowed off?
4.	How much money was paid to employees for overtime on Sundays or usual day off?
5.	To how many employees, and to what class of employees has overtime been paid during the months above named?


Mr. HOWE:: This almost duplicates a question which I answered some weeks ago with reference to the same subject. This being an internal matter referring to the Canadian National Railways management, it would not be customary to give the information.
Questions


FLORENCEVILLE, N.B., POSTMISTRESS
Mr. BROOKS:: 1.	Have any representations been made to the Post Office Department requesting the dismissal of Mrs. Eva Nicholson, postmistress of Florenceville. New Brunswick?
2.	If so. what was the nature of these representations, and by whom were they made?
3.	Is it a fact that Mrs. Nicholson is a
widow and that this position is her only means of support?	.
4.	If a change is contemplated, will an investigation he made before any such change takes place?


Mr. ELLIOTT (Middlesex):: 1 and 2. An affidavit signed by Wm. Tardiff and Isaac Stephenson has been received regarding the political activities of Murray Nicholson, postmistress' assistant.
Another affidavit signed by A. B. McCain, George Perley, Isaac Stephenson, Barry McKay, J. Andrew McKay and Chas. McKay, complains that unsworn persons are admitted to the working part of the office and that the handling of the mail is not satisfactory.
3.	The postmistress is a widow. The department has no information as to her financial standing.
4.	Yes.



FARMERS' CREDITORS ARRANGEMENT ACT

[Stage Direction]
2.	The requisition forwarded to the Civil Service Commission stated "bilingual qualifications not essential."
Mr. BOULANGER:: 1.	Has the Department of National Revenue requested the Civil Service Commission to hold an examination for the position of customs and excise examiner in the province of Quebec, formerly held by J. L. Denis?
2.	If so, in its requisition to the commission, did the department indicate that a knowledge of the two official languages of the country was not necessary on the part of the candidates?


Mr. ILSLEY:: 1.	No, but the department requested the Civil Service Commission to fill the position formerly held by J. L. Denis.
2.	The requisition forwarded to the Civil Service Commission stated: "bilingual qualifications not essential."


Mr. BOULANGER:: 1.	Did the Department of National Revenue requisition the Civil Service Commission to hold an examination for the position of customs and excise examiner in the province of Quebec, formerly-held by J. A. O. Duval?
2.	If so, in its requisition to the commission, did the department indicate that a knowledge of the two official languages of the country was not necessary on the part of the candidates?


Mr. DOUGLAS:: 1.	Did the government discontinue the consideration of cases by the Creditor-Debtor Arrangement Act upon the handing of the test case to the Supreme Court?
2.	Has the government within the last two weeks made changes and new appointments with respect to those who are administering the Farmers' Creditors Arrangement Act?
3.	Had the Supreme Court's decision been handed down previous to the time these appointments were made?


Mr. DUNNING:: 1.	No.
2.	Yes.
3.	No.



DEPARTMENT OF NATIONAL REVENUE-APPOINTMENTS-BILINGUAL QUALIFICATIONS

Mr. ILSLEY:: 1.	No, but the department requested the Civil Service Commission to fill the position formerly held by J. A. O. Duval.
2.	The requisition forwarded to the Civil Service Commission stated: "bilingual qualifications not essential."


Mr. BOULANGER:: 1.	Did the, Department of National Revenue
requisition the Civil Service Commission to hold an examination for the position of customs and excise examiner in the province of Quebec, formerly held by C. H. Losey?	.
2.	If so, in its requisition to the commission, did the department indicate that a knowledge of the two official languages of the country was not necessary on the part of the candidates?


Mr. BOULANGER:: 1.	Has the Department of National Revenue requisitioned the Civil Service Commission to hold an examination for the position ot customs and excise examiner in the province of Quebec, formerly held by Paul E. Jensen?
2.	If so, in its requisition to the commission did the department indicate that a knowledge of the two official languages of the country was not necessary on the part of the candidates?


Mr. ILSLEY:: 1. No, but the department requested the Civil Service Commission to fill the position formerly held by Paul E. Jensen.


Mr. ILSLEY:: 1.	No, but the department requested the Civil Service Commission to fill the position formerly held by C. H. Losey.
2.	The requisition forwarded to the Civil Service Commission stated: "bilingual qualifications not essential."


Mr. BOULANGER:: 1. Did the Department of National Revenue requisition the Civil Service Commission to hold an examination for the position of customs and excise clerk in the province of Quebec, formerly held by A. Hebert?

Questions
2. If so, iii its requisition to the commission, did the department indicate that a knowledge of the two official languages of the country was not necessary on the part of the candidates?


Mr. ILSLEY:: 1.	No, but the department requested the Civil Service Commission to fill the position formerly held by A. Hebert.
2.	The requisition forwarded to the Civil Service Commission stated: "bilingual qualifications not essential."


Mr. BOULANGER:: 1.	Did the Department of National Revenue requisition the Civil Service Commission to hold an examination for the position of customs and excise clerk in the province of Quebec, formerly held by A. G. Macdonald?
2.	If so, in its requisition to the commission, did the department indicate that a knowledge of the two official languages of the country was not necessary on the part of the candidates?


Mr. ILSLEY:: 1.	No, but the department requested the Civil Service Commission to fill the position formerly held by A. G. Macdonald.
2.	The requisition forwarded to the Civil Service Commission stated: "bilingual qualifications not essential."


Mr. BOULANGER:: 1.	Did the Department of National Revenue requisition the Civil Service Commission to hold an examination for the position of customs and excise clerk in the province of Quebec, formerly held by V. Maisonneuve?
2.	If so, in its requisition to the commission, t uhe department indicate that a knowledge
of the two official languages of the country was not necessary on the part of the candidates?


Mr. ILSLEY:: 1.	No, but the department requested the Civil Seryice Commission to fill the position formerly held by V. Maisonneuve.
2.	The requisition forwarded to the Civil Service Commission stated: "bilingual qualifications not essential."


Mr. BOULANGER:: 1.	Did the Department of National Revenue requisition the Civil Service Commission to hold an examination for the position of customs and excise clerk in the province of Quebec, formerly held by J. Leber?
2.	If so, in its requisition to the commission, did the department indicate that a knowledge of the two official languages of the country was not necessary on the part of the candidates?


Mr. ILSLEY:: 1.	No, but the department requested the Civil Service Commission to fill the position formerly held by J. Leber.
2.	The requisition forwarded to the Civil Service Commission stated: "bilingual qualifications not essential."


Mr. BOULANGER:: 1.	Did the Department of National Revenue requisition the Civil Service Commission to hold an examination for the position of customs and excise clerk in the province of Quebec, formerly held by J. D. Comeau?
2.	If so, in its requisition to the commission, did the department indicate that a knowledge of the two official languages of the country was not necessary on the part of the candidates?


Mr. ILSLEY:: 1.	No, but the department requested the Civil Service Commission to fill the position formerly held by J. D. Comeau.
2.	The requisition forwarded to the Civil Service Commission stated: "bilingual qualifications not essential."


Mr. BOULANGER:: 1. Did the Department of National Revenue requisition the Civil Service Commission to hold an examination for the two positions of customs computing clerks in the province of Quebec, formerly held by Georges A. Loranger and J. A. Lefebvre?
_2, If so, in its requisition to the commission, did the department indicate that a knowledge of the two official languages of the country was not necessary on the part of the candidates?
3.	Did the department recommend to the commission the appointment of G. P. Wilcox and W. A. Dickson to these positions?


Mr. ILSLEY:: 1.	No, but the department requested the Civil Service Commisison to fill the positions formerly held by Georges A. Loranger and J. A. Lefebvre.
2.	The requisition forwarded to the Civil Service Commission stated "bilingual qualifications are not essential" and "bilingual qualifications not essential" respectively.
3.	No. The ratings on all candidates were forwarded to the Civil Service Commission.


Mr. BOULANGER:: 
Mr. ILSLEY:: 1.	No, but the department requested the Civil Service Commission to fill the position formerly held by Emile Fillion-Payoux.
2.	Yes.
3.	No. The ratings on all candidates were forwarded to the Civil Service Commission.
4.	According to his immediate superior, the' collector at Montreal, and also the inspector who rated the candidates, Mr. Dickson's knowledge and use of the French language are
3476	COMMONS
Questions as Orders lor Returns
quite sufficient to enable him to perform the duties of computing clerk in either of the official languages.


Mr. BOULANGER:: 1.	Did the Department of National Revenue requisition the Civil Service Commission to hold an examination for the position of customs computing clerk in the province of Quebec, formerly held by Peter Cragan?
2.	If so, in its requisition did the department indicate to the commission that a knowledge of the two official languages of the country was not necessary on the part of the candidates?


Mr. ILSLEY:: 1.	No, but the department requested the Civil Service Commission to fill the position formerly held by Peter Cragan.
2.	The requisition forwarded to the Civil Service Commission stated: "bilingual qualifications are not essential."



FARMERS' CREDITORS ARRANGEMENT ACT-DISMISSAL OF OFFICIAL RECEIVER

Mr. WERMENLINGER:: 1.	Has Mr. M. P. Graham, of Napanee, Ontario, been dismissed as official receiver under the Farmers' Creditors Arrangement A.ct?
2.	If so, when, and by what authority, and for what cause?
3.	If Mr. Graham was dismissed, was Mr. Stuart Simmons, of Wilton, Ontario, appointed in his place?


Mr. DUNNING:: 1.	Yes.
2.	May 28, 1936, on authority of the governor in council. A change was considered desirable in the public interest.
3.	Yes.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. MacNEIL:: 1.	What was the total revenue secured from the collection of top-wharfage tolls on government wharves during the fiscal years, (a) 1934-35, and (b) 1935-36?
2.	What was the total amount paid as commissions due wharfingers, for collection of top-wharfage tolls on government wharves, during the fiscal years, (a) 1934-35, and (b) 1935-36?
3.	What was the total number of government wharves, at which such top-wharfage tolls were collected, during the fiscal years, (a) 1934-35, and (b) 1935-36?



DEPARTMENT OF MINES


Mr. FERLAND:: 1.	What are the names and addresses of each of the students who, under the direction of the [DOT]Department of Mines, participated in geological surveys in 1935?
2.	In what schools, colleges or universities did each of them study in 1935?


Mr. CRERAR:: Return tabled herewith.



DEER LODGE MILITARY HOSPITAL

Mr. BEAUBIER:: 1.	How many medical officers are there on the staff of the Deer Lodge military hospital at Winnipeg, Manitoba?
2.	What are their names?
3.	What are the dates of their respective appointments ?
4.	What are their respective salaries?
5.	What are their hours of work, and their respective duties?
6.	Are any members of the medical staff holding salaried positions with other institutions? If so, who, and with what institutions?
7.	Are any members of the staff drawing pensions? If so, what are their names, and the amount of percentage of disability and amount of pension paid in such case?
8.	Is there a fully equipped operating room at Deer Lodge hospital, and, if so, is it being used for major operations?
9.	If not so used for major operations, why not?



LANCASTER MILITARY HOSPITAL

Mr. PATTERSON:: 1.	What are the names of all individuals comprising the medical, clerical, nursing, inspectoral and maintenance staffs of Lancaster military hospital, West Saint John, New Brunswick ?
2.	(a) What is the salary of each individual per annum; (b) what is the pension of each individual per annum, if any; (c) what are the expenses of each individual per annum, if any; (d) what do their expenses total individually for their entire term of office to date?
3.	(a) Who is the district pensions advocate for New Brunswick; (b) what salary does he receive per annum; (c) what pension does he receive per annum, if any; (d) what were his total expenses apart from his salary during the past year; (e) what amount do his expenses total for his entire term of office to date; (f) what legal training has he had as a pensions advocate, it any; (g) what legal degrees does he hold, if any?
4.	(a) How many, and what makes of automobiles, if any, have been purchased for the staff of Lancaster military hospital, West Saint John, New Brunswick, during the past ten years;
(b)	for what departments, and what individual was each such automobile purchased; (c) what was the initial cost of each such automobile, and what was the cost of maintenance and operating expenses of each per annum; (d) what was the total initial cost of all such cars purchased, and also the total maintenance and operating costs of all such cars operated by the staffs and in connection with the Lancaster military hospital, West Saint John, New Brunswick ?



DEPARTMENT OF THE INTERIOR-ASSISTANT LEVELLERS AND ARTICLED PUPILS

Mr. BOULANGER:: 1.	Was an examination recently held by the civil service commission in the provinces of Quebec and Ontario for positions as assistant levellers and articled pupils in surveying, required by the Department of Interior?
2.	If so, upon what date was such examination advertised, and when was it held?
3.	How was the examination advertised?

Wednesday Evening Sittings
4.	What are the names and addresses of the candidates who wrote at this examination?
5.	What are the names and addresses of the successful candidates?
6.	What are the names, occupations, addresses, ages and salaries of the examining board who have determined the standing of the candidates?
7.	In what order of merit were the candidates?
8.	Were the examiners unanimous on their decision regarding the relative merits of the candidates, and, if not, upon what points did they disagree?



MOTIONS FOR PAPERS


Mr. WERMENLINGER:: For a copy of all correspondence, requests for investigation and evidence given, and also a copy of the report made by the commissioner, recommending the dismissal of Mr. F. Antoine Labrecque, postmaster of St. Raphael, Belle-chasse county, Quebec.



DEPARTMENT OF MARINE-DISMISSAL OF OMER NOLET

Edgard Jules Wermenlinger: For a copy of all letters, telegrams and other documents respecting the dismissal of Omer Nolet, labourer. Marine department, at Quebec, and covering the period from October 1, 1935, to date.



FI.ORENCEVILLE, N.B., POSTMISTRESS

Mr. BROOKS:: For a copy of all correspondence relative to any requests or recommendations for the dismissal of Mrs. Eva Nicholson, postmistress of the Florenceville, New Brunswick, post office.



WINDSOR JUNCTION-WINDSOR, N.S., RAILWAY LINE

Mr. PURDY:: For a copy of lease entered into during the year 1914 between the then Canadian government railways and the Dominion Atlantic Railway with respect to the line of railway owned by the Canadian government running from Windsor Junction to Windsor, Nova Scotia.



DEPARTMENT OF THE INTERIOR-ASSISTANT LEVELLERS AND ARTICLED PUPILS

Mr. BOULANGER:: For a copy of the complete file pertaining to the recent examination in the provinces of Quebec and Ontario, for positions as assistant levellers and articled pupils, required by the Department of Interior.



DEPARTMENT OF NATIONAL REVENUE-CUSTOMS BULLETINS

Mr. STEVENS:: For a return showing:
1. A list of all bulletins issued by the customs branch of the Department of National Revenue during the last ten fiscal years, giving in each instance: (a) the number of the bulletin; (b) date issued; (c) whether by order in council or by authority of the minister; (d) date of repeal, if repealed.
2. Also a copy of all bulletins issued during the said period now outstanding and in force.


Mr. ILSLEY:: It is contrary to the established practice of the Department of National Revenue to produce bulletins which are confidential, but subject to that reservation I have no objection to the order passing.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
Hon. C. D. HOWE (Minister of Marine) moved that the house go into committee to-morrow to consider the following proposed resolution:
That it is expedient to bring in a measure to provide for the constitution of a corporation to be known as the Canadian Broadcasting Corporation for the purpose of carrying^ on a national broadcasting service in Canada in the place and stead of the present Canadian radio broadcasting commission, to provide for honorariums, remuneration, salaries and other expenses incidental thereto, to authorize the governor in council to make certain advances for purposes therein mentioned, and to repeal the Canadian Radio Broadcasting Act, 1932.
He said:	His Excellency the Governor
General, having been made acquainted with the subject matter of this resolution, recommends it to the favourable consideration of the house.
Motion agreed to.


Right Hon. W. L. MACKENZIE KING (Prime Minister) moved:: That on Wednesday the 10th instant and subsequent Wednesdays to the end of the session the sittings shall in every respect be under the same rules provided for other days.
He said: Mr. Speaker, in giving notice of this motion I had in mind that it might be possible some hon. members would find it inconvenient to have the house sit on Wednesday evening of this week in which event I shall be pleased to amend the resolution to begin evening sittings on Wednesday, one week hence, which will be June 17. However, if it suits the general convenience of the house, I am prepared to move the resolution as it stands.


Mr. WHITE:: What about morning sittings?


Right Hon. R. B. BENNETT (Leader of the Opposition):: Mr. Speaker, prior to this notice appearing on the order paper I had made arrangements that would involve the absence from this chamber on Wednesday evening of this week of myself and all those
Privilege-Miss Macphail

who are associated with me. If this motion were amended to read Wednesday, June 17, it would be greatly appreciated. Had I known that it was proposed to make this motion I would have made other arrangements, and I greatly regret having made those that I did.


Mr. POULIOT:: To those within sound of my voice it is abundantly clear that social entertainment .interferes in no small degree with parliamentary duties. I would suggest to the right hon. gentleman-


Some hon. MEMBERS:: Order.


Jean-François Pouliot: -either to cancel his engagement, postpone it, or remove himself gently from the picture in order that the session be prorogued to-night.


William Lyon Mackenzie King: I take full responsibility for the motion in the form in which it appears. The leader of the opposition is I feel quite justified in asking that at least a week's latitude be allowed before beginning Wednesday evening sittings. I regret not having consulted him before placing the motion on the order paper. I would suggest that it be amended to read Wednesday, the 17th instant, and subsequent Wednesdays, and that it be passed in that form.


Richard Smeaton White: What about morning sittings?


William Lyon Mackenzie King: I think it is perhaps a little too early to begin morning sittings. We hope to make progress by taking Wednesday nights.
Motion as amended agreed to.



PRIVILEGE-MISS MACPHAIL

[Stage Direction]
On the orders of the day:
Miss AGNES C. MACPHAIL (Grey-Bruce): I rise to a question of privilege. My attention has been called to a statement alleged to have been made-it is in quotations-by Premier Hepburn, appearing in the Ottawa Journal of June 2, at page 11, in which, discussing compensation for the family of Constable John Lewis, who was slain by Norman "Red" Ryan in Sarnia on May 23, Mr. Hepburn, the Premier of Ontario, is reported to have said:
We are not involved in any way. He was let out of the penitentiary because he was the "pet" of R. B. Bennett, Senator Mullins and Miss Agnes Macphail. We had nothing to do with paroling the man.
Some hon. MEMBERS:: Oh, oh.


Miss MACPHAIL:: I do not believe that anyone really thinks this is funny, for it undoubtedly had most unfortunate consequences, resulting as it did in the death of Constable John Lewis. I have borne a good deal of

adverse criticism about my activities in relation to penitentiaries, and in this matter I thought I ought to make it clear so far as I am concerned. I did not intercede on behalf of Norman "Red" Ryan. I asked Mr. Gallagher, chief of remission service, whether he would go through the files and give me a statement, which I should like to put on Hansard. I have received from him the following letter dated June 6, 1936:
Dear Madam:
Complying with your request, I have had the departmental records very carefully examined to ascertain 'whether you had, at any time, intervened, or asked for clemency on behalf of Norman, or "Red" Ryan.
As a result of our diligent search. I may definitely assure you that we have found no trace whatever of any communication from you in this case.
Yours respectfully.
M. E. Gallagher,
Chief of Remission Service.
I have no desire to blame anyone or to say anything further; I simply wish to make it perfectly clear to the house and the country that at no time did I intercede on behalf of Norman Ryan.


Mr. McIVOR:: I would like to make this statement in this connection-


Some hon. MEMBERS:: Order.



BANK OF CANADA


[Stage Direction]
Hon. CHARLES A. DUNNING (Minister of Finance) moved the second! reading of Bill No. 82, to amend the Bank of Canada Act.
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Sanderson in the chair.
On section 2-Definitions.
Mr. DUNNING:: The amendment proposed in this section is intended, as the explanation indicates, to remove the anomaly which now exists by reason of subsection 2 of section 5, under which subsection the Deputy Minister of Finance would be entitled to fees as a director. It is not and never was intended that that should be so.


Richard Bedford Bennett: Would it not be advisable, Mr. Chairman, in view of the importance of [DOT]this act, to call out the paragraphs? We have not asked that they be read, although we have a right to. I direct the attention of the minister to the fact that a few days ago he was very positive in his assertion that as a result of this measure the government would have ten directors-


Charles Avery Dunning: Votes.

Bank oj Canada


Richard Bedford Bennett: Ten directors' votes as against seven which might possibly be the other way. I join issue with him. If he will look at the definition of the word "director" he will find it means a member of the board of directors other than the governor or deputy governor. So that seven that exist, together with the governor and the deputy governor, would mean nine votes as against eight if it happened that the governor and the deputy governor were not men that were influenced by political sympathies, and it is to be assumed that the governor and deputy governor are not holding their positions in any political capacity.


Charles Avery Dunning: Nor the others, I hope.


Richard Bedford Bennett: Well, in what the minister said the other day the assumption was just that, and I directed attention to the fact that what has been added to it is nothing new\ "Director" has always meant a member of the board of directors other than the governor or deputy governor. That is nothing new. Therefore, as far as we are concerned, if the seven directors are added to the two you have nine as against eight, assuming that the seven and the governor and the deputy governor entertain the same views with respect to the matter of policy. It is quite apparent from what has been said in this chamber that this method of dealing with the situation is one that does not make this a publicly owned institution in the sense in which those words were used last fall in this country from one end to the other.


Charles Avery Dunning: I am having looked up the language that I used, but I did not intend the other day to convey the meaning my right hon. friend now indicates. What I intended to convey to the house was the number of votes on the new board which would be cast by government appointed members of the board as contrasted with the number of votes which would be cast throughout a period of years by those not appointed by the government. I have now my exact words:


Richard Bedford Bennett: The government does not appoint the governor. It only approves of him later.


Charles Avery Dunning: It approves of his appointment later, which, I think, rather strengthens my point.


Richard Bedford Bennett: Weakens it, I should say.


Charles Avery Dunning: The words I used the other day, page 3267 of Hansard, which relates I assume, to the same debate as that in which we are now engaged, were:
By the terms of the bill the relative voting strength on the board in each of the immediately succeeding years will be:
And then there are two columns headed "Government" and "Private shareholders." Obviously I was distinguishing between the number of votes on the board representing private shareholders and the number of those representing the government. And obviously the heading of the column, "private shareholders," is a clear indication of what I was attempting to convey to the house. Of course my right hon. friend is correct when he says that future governors must be appointed by the government on the recommendation of the board.


Richard Bedford Bennett: No, approved.


Charles Avery Dunning: I beg the right hon. gentleman's pardon?


Richard Bedford Bennett: They approve the appointment.


Charles Avery Dunning: They approve the appointment, and therefore, for the purposes of the argument I am making, the appointees may be considered as representative of the national policy for the time being expressed through the medium of the government; that is, the broad national policy of the bank. I am not now referring to what may be called the day to day operating of the bank, which obviously is a matter for the governor and the management, but rather those broad lines of national policy which, I intimated the other day in the address I made on introducing the resolution preceding the bill, should be followed.


Richard Bedford Bennett: I am sorry to say, Mr. Chairman, that the hon. gentleman has not dealt with the question. Neither the governor nor the deputy governor can be said to represent either public or private interests. They represent no interests. They are removed from the field and sphere of politics.


Charles Avery Dunning: But they vote.


Richard Bedford Bennett: But they are not
directors; that is the point I was trying to make.


Charles Avery Dunning: They are members of
the board.


Richard Bedford Bennett: That is another thing
altogether. They never were directors. I was trying to point that out. And the reason for it was perfectly clear: we were following sound corporate organization. Seven of the directors were elected. I put this question to the minister, and it is a very vital one. Assuming the present government promulgates three years hence a policy to which the governor and the deputy governor agree, and
Bank oj Canada

it should result a short time after in their no longer holding office, you have the possibility of the eight votes to which reference has been made and the two votes to which the minister has referred nullifying any effort that may be made to modify that policy. That is a very real danger.


Charles Avery Dunning: I am sorry that I cannot follow my right hon. friend at all.


Richard Bedford Bennett: Well, the present government appoints four directors, and that gives them eight votes, and they promulgate a policy that meets with the approval of the existing governor and deputy governor: that gives them ten votes. But another administration holds an entirely different view.


Charles Avery Dunning: Another government?


Richard Bedford Bennett: Yes, another administration. The hon. member for Winnipeg North Centre (Mr. Woodsworth) has formed a government, and it has an entirely different conception of the functions of the central bank. Then, obviously, the will of the people would be thwarted by this organization. The argument which was made the other day in connection with the national railways has far greater force if applied to this situation than it had with reference to the railway. You have here four men, with eight votes, plus the two that come to the governor and deputy governor as members of the board and not directors, making ten in all, as against a possible seven. Whereas the other side of the picture might be this, that the governor and the deputy governor together with the seven would make nine, as against eight. That position might easily arise because the present governor and the deputy governor are appointees of the government; in future the board of directors will elect their own governor, but his appointment is subject to the approval of the governor in council. Therefore, while in law the government does not appoint, in fact, by withholding approval until someone is elected by the directors of whom the government of the day approves, it does appoint. I am pointing out that the contingency which was indicated with such force the other day respecting the period during which men hold office in another branch of the public service has much greater strength when applied to this case, because the two who control are not directors but are members of the board; they have not votes as directors, but they have votes as nominees of the directors, and they are the governor and the deputy governor. So you have a contingency here on either side. You have either the combination of the governor and deputy governor with your

seven private-interest directors, making nine in all, as against eight votes represented by the four government-named directors, or e con-verso, you have the two and the eight votes, making ten, that would thwart any effort made by those elected by the other shareholders to give effect to their policies. I submit that is not what the government intends, because it is the very negation of the plan that was unfolded by the minister, and it does not give that democratic control of the organization to which reference was made. In other words it permits, on the one hand, men to thwart the will of an incoming government, or it permits those who have been appointed to hold office to thwart the will of those who may be elected by private interests-if such it should be called-the seven elected by the shareholders.


Charles Avery Dunning: I grasp clearly now what is in my right hon. friend's mind: I did not grasp it previously. After all the issue is a rather simple one. Pictured as my right hon. friend pictures it, the hon. member for Winnipeg North Centre and others sharing his views on monetary matters-I am not at all clear that they are revolutionary, but I am assuming my right hon. friend viewed the problem as involving a revolutionary change-


Richard Bedford Bennett: Not revolutionary.


Charles Avery Dunning: In the sphere of monetary matters. I do use the word "revolutionary" not from the standpoint of force but in its economic sense; that, I believe, is what he has in mind.
The statement of the right hon. gentleman is that in such an event under the new set-up of the Bank of Canada it would be possible that the board of directors might be able to defy the government of the day. Of course there is only one answer to that argument, the answer I endeavoured to give the other day. The parliament of Canada, the House of Commons of Canada, must be supreme. Undoubtedly if such a contingency arose the government of the day, being unable to secure the carrying out of the policies which it believed it had a mandate from the people to cariy out, would come before parliament and ask for such amendments to the law as would enable it to carry out its policies. In my opinion, Mr. Chairman, they would have a perfect right to do so. The people'of this country have a right, I believe, to get that which they vote for in the way of major policies of that description, and I would fully expect that if the bank as constituted at the time such a change in parliamentary representation took place was not responsive in broad, great matters, major matters of

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economic policy, to the will of the then existing parliament, the then existing government would come forward with proposals for the amendment of this law which would ensure the will of parliament being carried out.
I distinguish very carefully, Mr. Chairman, between that and the day to day conduct and functioning of the bank, which indeed is nine-tenths of its work. I do not assume that there will be a clear, marked division of view between one director and another because one happens to represent the shareholders and another happens to represent the government or between either of those two classes and the governor or deputy governor. I believe that in the day to day conduct of the business of the bank these men, being men of substance, men whom I believe to be as patriotic as any of the rest of us, will sit down together just as any other body of men would and endeavour so to administer the affairs of the bank as to give the maximum of service to the people of Canada, in accordance with the trust imposed upon them by this parliament. In practice I do not think they will be in those watertight compartments of divided view suggested by the right hon. leader of the opposition. After all, the discussion on this bill has had much more to do with what should be done with the bank than with the actual nature of the amendment itself. When I sav what should be done with the bank perhaps even that is wrong; perhaps I should say what should be done by the bank in the exercise of that all important function to which I made reference in detail in introducing the financial resolution. Any differences of opinion that exist in this house are with respect to what are the proper and sound functions of the bank in relation to our economic set-up in Canada. That is the point, and that point, I anticipate, will bring about a divergence of view for many years to come.
Later on I shall expand a little on the views of the government with respect to bank policy, but I am sure no one here would expect me to indicate that the bank is going to inflate or that it is going to deflate. How would it be possible to carry on the regulatory functions if I were to make such an announcement? The announcement to-day of a policy of inflation inevitably would be followed by a degree of wild speculation which undoubtedly would leave ruin in its trail, which could not be prevented by any agency that I know of as long as people are free to buy from and sell to each other either commodities or securities. No, Mr. Chairman, the functioning of this bank is a matter of day to day regulation of the volume of cash and credit at the disposal
of the Canadian people in order to enable them to discharge their ordinary trading functions with each other. To the extent that the amount of credit and cash is increased, to that extent money is made easier. To the extent to which it is decreased, to that extent money is made tighter. To those who say the bank has been following a policy of deflation I can only enter a complete denial. The facts and figures themselves absolutely prove that such is not the case. As we go along with the bill I shall present further details which I think will tend to prove my statements in this regard.
With regard to the board itself, and to come back to the point now before the committee, the government deems it of importance not merely that government policy, broadly speaking, should control the functioning of the bank. That we deem all important, but we also deem it important that there should be provision for voices, other than voices appointed by the government, to be heard in connection with the business of the bank. That really is the whole point. Shall there be any provision for other government appointees having any voice at all? We believe that to be all to the goods, and such experience of other central banks as I have been able to gather indicates that there is some merit in not relying completely upon a board composed solely of government appointees in connection with such an important function as the one we are now discussing. Government control is essential, in our view, but the voice of business generally, if you like, as represented in this case by the shareholders, is also of importance. It is not as though the shares could be monopolized by a few. That is not possible. The average holding, if my memory serves me aright, is only between nine and ten shares. Surely there is an advantage in bringing to the board a voice which is not the voice of the government, while at the same time retaining absolute control from the point of view of government policy. In spite of what the right hon. leader of the opposition says I firmly believe that that balance is brought about by -what we have before the committee. After all the difference between us is very small. My right hon. friend does not regard the governor and the deputy governor as being directors within the meaning of this act.


Richard Bedford Bennett: The statute says they are not.


Charles Avery Dunning: The statute says they are not. That is correct, but the statute also says that they vote at directors' meetings and it is in terms of votes that the will of the

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directors is expressed. While the statute may say that they are not directors, for my purpose if the statute says they vote that is quite sufficient, and in terms of the expression of view by way of votes the figures will be as I gave them the other day. At the outset there will be ten votes of government appointees as compared with seven votes of the elected members of the board, ultimately working out in 1940-41 and thereafter to six votes of government appointees and three votes of appointees by the shareholders. After all what we want to look to is the ultimate, and the six to three position is the one we will attain within a measurable time. Those six votes are composed of four directors appointed by the government of the day and the governor and deputy governor. Even taking my right hon. friend's measurement of the matter, by 1940-41 the permanent constitution of the bank will be four direct government appointees, apart from the governor and deputy governor, as against three appointed by the shareholders. In addition, however, on what might be called the government side of the fence are the governor and deputy governor, making up the total of six votes.
I have given a good deal of thought to the manner in which we may expect this set-up to work out within the limits I stated a few moments ago, of the policy of the government having absolute government control but with other voices being heard. I should like to be able to set this directorate upon a very high plane of public service. It would be my desire, and I know it would be the desire of the government, to make the directorate of this institution the blue ribbon of recognition in Canada of probity, character, sound judgment, and reputation. It ought to be one of the highest ambitions of a Canadian to become a director of the Bank of Canada and thus have a direct voice in the handling of that great function to which I referred in introducing the resolution, the function of regulating the volume of credit and currency in this country, in order that it may meet the public needs of Canada.


Jean-François Pouliot: There was an old professor of philosophy who used to say to his pupils: "If you do not understand anything it is philosophy; if you feel that I do not understand anything it is metaphysics." Every piece of legislation drafted by the late government is impossible to understand, and I congratulate the Minister of Finance upon being able to understand some part of it. It is a discovery! Every piece of legislation-I emphasize the word "every"-that has been put on the sta-
[Mr. Durmiog.l
tute books during the last five years is a maze and is amazing. It is amazing to think how obscure can be the mind of certain law makers. That is to be regretted; for every citizen of this country should know the law; no one is excused for ignorance of the law. The man who has no legal knowledge, the man on the street, looks at the shelves filled with these statute books and asks: What is that library? Is that the Eliot library? Is that an encyclopaedia? It is an encyclopaedia of half-baked knowledge. It is the statutory legislation of the late government.
Sir, first and always I have been opposed to a central bank. I said it at the time the legislation was enacted, but I accept the views of the majority of the members of my party;
I stand by them. In my humble view the majority of the members should decide the policy of the party. But this does not prevent my saying that every piece of legislation passed by the late government was an obstacle in the way of progress. Why was it passed? Because the right hon. gentleman, the hon. member for Calgary West (Mr. Beamett) in spite of his knowledge from encyclopaedias, could not concentrate on finance and explain it in plain language to the house and to the country; and moreover each of his colleagues, from the oldest to the youngest, did not know a word about finance. They may be rich, but leaving their wealth aside who would go to them for advice?


Mr. SPENCE:: Why not talk about the
bill?


Jean-François Pouliot: I am talking about the
sponsors of the first bill, those who studied it in council but brought no illumination to the house, and who now make little distinctions about a word here and a word there. Sir, when you wear stockings, after a certain time they need to be mended. If you wear them longer they need more mending, until at last you give them to the poor. Here is need for a lot of mending. Why not give the Bank of Canada to the poor and dispense with the mending?
I have the highest regard for the Minister of Finance, who is much more experienced and has much more lucidity of mind than his predecessors in office during the last five years, including the fifth year. From confederation until a few years ago the Minister of Finance was the big boss of finance in this country. He could make the banks tremble. He was the guardian of the wealth of the country. But on account of the weakness of the late government it was decided

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by them to call for supermen to look after the finances of this country, and we had this central bank act. Sir, we must go back to fundamentals. We must have a simplification of the law in order that the law may be understood by everyone. The legislation should be just as clear to every citizen as the traffic regulations, with signs here and there to show the way, to indicate curves in the road. This legislation has been brought down on account of the incompetency of former ministers of finance who were afraid to take the responsibility for what they had to decide, and who practised inflation in no small degree when they increased the price of gold and passed legislation affecting the holdings of insurance companies. When we think of the way our finance has been in a mess during the last five years, the Minister of Finance deserves every good wish in his efforts to restore it, in spite of the bad legislation with which he has to deal in order to accomplish that purpose.
Will you. please, Mr. Chairman, tell the hon. member for Calgary West to keep his remarks to himself and let me proceed with my own? He is disturbing the order of this committee.


An hon. MEMBER:: How about the bill?


Jean-François Pouliot: Coming back to fundamentals, it has been shown during this session that the banks have deposits to the same amount as they had five years ago. Therefore there is as much money now as there was then. Why, then, does it not circulate? Because of the lack of confidence brought about by the previous administration. It is now improving. But what counts is not only the amount of currency kept as deposits in the banks, but also the clearings. When the former government came into power the clearings fell by $5,000,000,000 a year. Imagine, sir: in a small country like this the clearings of the banks in 1930 were $20,000,000,000. an amount two-thirds as large as the public debt of the United States, which is a richer country than ours and in which there are many more people. It means that the people of Canada were trading together. But after that administration came into power the amount fell by $5,000,000,000, due to the lack of confidence of the people in that government. That is a matter of public knowledge; it must be known to hon. gentlemen of the Tory party. Yet, sir, having destroyed confidence in the hearts and minds of Canadian citizens, they presume to instruct us! They say: There should be so many directors; the directors should do this and that, "according to my own knowledge." It is ridiculous. It is 12739-222J
absurd. The first thing necessary to restore confidence is for those so-called geniuses to keep their mouths shut, and then remove themselves gently from the picture. Think of this, sir: those who enjoyed the protection of the late government, one of whom has now built a house outside of Canada, who was chairman of the investment committee of the Sun Life Assurance Company, and who, when his own bank refused to lend money to his companies, invested the money of the insurance company of which he was one of the leaders in his own business, and after everything went down in a mess, the date government gave a fictitious par value to all the stock that was held by that insurance company. That is what happened; it is known to every member of this house. My hon. friend from Winnipeg North (Mr. Heaps) must admit that I am speaking to the question now.


Mr. HEAPS:: Now!


Jean-François Pouliot: As I have done before. Mr. Chairman, I shall not insist upon it, but I stand by what I have said. The majority of my Liberal colleagues in this house have decided to support this legislation, and I am ready to stand by them. On the other hand, the present Minister of Finance occupied his present high position some years ago, and with success. He had a very pleasant budget to submit to the country at that time. I wonder why he should not be given the responsibility that he formerly had as minister in charge of the Department of Finance.
The hon. member for Calgary West has spoken about democratic control. If the Minister of Finance has the same authority and the same powers that he had five years ago under the statute in force at that time we would have real democratic control through the Minister of Finance. Because of these birds of prey that have caused so much damage in the banking business the Minister of Finance should be armed with the criminal code and should see to it that every one, no matter how highly he may be placed in 'our social life, should be treated according to his dealings. Then we would have democratic control. The present Minister of Finance is competent to accomplish these high functions, and in that way we would get rid of that mess of legislation which paralyzes the country, and at the same time confidence would be restored and the clearings would reach higher and higher levels. It is very simple. It may not be accepted because it is simple. Some people remind me of the fellow who put a riddle to another man. He said, Tell me what looks like an egg, is round, contains a yelk and white, has a" shell,
34S4
Bank oj Canada

and barks." The other fellow could not guess it, so the first one told him, "It is an egg." The other man said, "An egg does not bark." "No," said the other man, "that was to make the puzzle more difficult." Every piece of legislation of the previous government was like that. It was always to make the life of the country harder and more difficult, and I ask on behalf of my countrymen in all provinces of Canada that we may have a simplification of legislation in order that the Canadian people may understand something of the law of the land.


Abraham Albert Heaps: When the Minister of Finance introduced this measure he stated that changes would be made in the bill in the matter of electing the directors. I wonder if he could give the committee a little more information in that regard now.


Charles Avery Dunning: The question is quite in order, Mr. Chairman, but not on the interpretation clause which we are now considering. There is a definite clause of the bill which bears directly on my hon. friend's question, and I suggest that he defer his question until we reach it.


Mr. TUCKER:: My understanding of the resolution as it appeared on the order paper, and certainly it has been my understanding right along, was that the directors to be appointed by the government should have control of the board of directors. The resolution as it passed the house read in part:
... and to provide for election and appointment of directors in such manner as to assure voting control of the board by directors appointed by the government.
I certainly would urge and plead with the Minister of Finance that the act be brought into conformity with the resolution in that respect.


Charles Avery Dunning: We are doing just that.


Walter Adam Tucker: Even at the end of the time of expiration of the present directors' terms of office there will be six votes, as it were, of directors appointed by the government, including the governor and deputy governor, and three by directors representing the shareholders. The three votes, with those of the governor and deputy governor, make five, while the directors appointed by the government would only have four. On the other hand, however, if the governor and deputy governor were satisfied to vote with the directors representing the shareholders, we would have five votes on that side and the directors appointed by the government would have only four votes.
I now refer the committee to section 9. I understood the government was taking oon-

trol so that it could determine the general long range policy of the bank. Section 9 provides that if the governor does not agree with the decision of the directors he can refer the matter to the government, which can either affirm or disallow the decision. Suppose the governor and the deputy governor, who will be elected for seven years, decide to throw in their lot for seven years with the directors representing the shareholders. That would mean that for seven years there would be no way in which the government could force the bank to carry out its wishes. The Minister of Finance has referred to parliament being supreme in these matters, but in matters of finance it seems to be that this house, and not parliament, which includes the senate, should be supreme.
If this administration decided on a certain line of policy in regard to the central bank, and the governor and the deputy governor appointed by the former government decided to take a contrary view, and could carry with them the directors appointed by the shareholders, the government would lose control over the financial policy of this country, and this house of parliament would lose control, and that is a very serious matter. The preamble of the Bank of Canada Act states that the purpose of the central bank is:
... to regulate credit and currency in the best interests of the economic life of the nation, to control and protect the external value of the national monetary unit, and to mitigate by its influence fluctuations in the general level of production, trade, prices and employment, so far as may be possible within the scope of monetary action.
Suppose we pass the bill in this form; then if it should happen that the governor and the deputy governor lined up with the directors appointed by the private shareholders, we would be putting it in the power of the senate to decide what the financial policy of this country should be in regard to the operations of the central bank. I submit that since we are not taking over one hundred per cent ownership of the bank we should make very sure that we get one hundred per cent government control. When we provide that two people, appointed by the last administration, can thwart the expressed wishes of the government in regard to monetary policy by linking up with the private shareholders; when we provide that we cannot do anything about it iunless we pass an amendment to the Bank Act which must pass the senate, then we arc not taking over control of the Bank of Canada in the complete way we should.
I ask the government to give consideration to what I have said and bring the control of this bank strictly and fully within the resolution passed by this house so that there

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may be no doubt about the question of control. I plead with them to do that at this stage. If we intend to have control of the bank, let us make sure of having control. It would not do any harm to provide for the appointment by the government of another director so that we may be sure that the government, responsible as it is to the House of Commons, shall have control of the financial policy of the Bank of Canada, that important branch of the public service, without having to go over to the other house 'to get their consent. I submit that that is the important thing, and I do plead with the government to keep the matter of control by the government beyond doubt by providing for the appointment by the government of another direotor.
Mr. LEADER-: Mr. Chairman-


Charles Avery Dunning: Mr. Chairman, I do not want to be raising points of order, but we are evidently going to have quite a long discussion on this bill and I wonder if the discussion could be kept relevant to the section before the committee. The section now before the committee has nothing to do with the question raised by the hon. member for Rosthem (Mr. Tucker). If the discussion could be kept relevant to the particular section it would make it so much easier for me in handling the mass of material which I have relating to each section. Members of the committee expect me to answer all sorts of questions, but it is almost impossible for me to answer questions relating to sections which we have not yet reached. I ask that much consideration from the committee. I am not raising this as a point of order, although I think I could do it at this time.


Mr. LEADER:: Mr. Chairman, I want to assist the minister in every possible way to get this measure passed, but I have one or two observations I should like to make on the bill, and if I make them now, it will not be necessary for me to make them later in the debate. My observations will not be too general. I should like to say a few words with regard to the ownership of the bank, its functions and its relation to the conversion of our bonded debt and to the lowering of interest rates in general. If the minister thinks I should do so, I will wait until a more opportune time.


Charles Avery Dunning: There will be appropriate sections upon which those matters could be discussed.


Harry Leader: I must confess that I am
not a lawyer and perhaps I am a long way
from being a business man, but I have a few observations to make on this bill and if I could make them now, I would not need to make them later.


Charles Avery Dunning: It is up to the committee. I am raising no point of order.


Harry Leader: With your permission, Mr. Chairman, and with the permission of the committee, I should like to make them now.


The CHAIRMAN:: If the hon. member who has the floor will permit, the Minister of Finance (Mr. Dunning) has not raised a point of order, but I should like to quote paragraph 774 of Beauchesne's Parliamentary Rules and Forms, which reads:
The bill is considered clause by clause. The Chairman usually calls out the number of each clause, and reads the marginal note but he should give the clause at length when it is demanded by the committee. Each clause is a distinct question and must be separately discussed. When a clause has been agreed to it is irregular to discuss it again on the consideration of another clause.
Of course, I am not making a ruling because no point of order has been raised, but I bring this paragraph to the attention of hon. members and ask them to confine their discussion to the clause before the committee.


Harry Leader: Mr. Chairman, I suggest that you allow me to proceed and when I am out of order, call me to order. I am sorry I have not the knowledge of the hon. member for Rosthem (Mr. Tucker) who is a financial expert. Financial matters are usually so intricate and complex that the average layman, especially a farmer, has very little knowledge of them. That is the supposition, but I wish to present my views more along the lines of a business man or farmer than as an expert.
The bill before the committee has for its purpose the amending of the Bank of Canada Act, whereby the bank will be converted from a privately owned to a publicly owned and controlled bank. With that purpose I have no quarrel. I do say, however, that the method to be adopted, namely, to issue additional stock to the amount of 85,100,000 to be owned by the government, leaving the original stock of $5,000,000 in the hands of private interests, is not the proper method and is not what the public expected, based on the promises made prior to the last elections. I should like to read an extract from the Saskatchewan Farmer of May 28, as follows:
In view of the disappointment manifest in Liberal ranks in Saskatchewan over the decision of the King government not to eliminate rivate shareholders from the Bank of Canada, ut, instead, to take control of the bank by the issue of new majority stock to be owned
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by the government, it is of special interest to note that the new Labour government of New Zealand is following the other plan of Ouying out the shareholders,-the plan, which was thought, by the rank and file, would be followed in Canada. Newspaper correspondents show that the Labour government has given New Zealand the clearest possible proof that it means business. Its first legislative act has been to force through parliament in less than a week a reserve bank amendment bill vesting it with powers of control over currency, credit and banking such as are possessed by no other government in the empire, and by no foreign states except Russia, Germany and Italy.
The editorial goes on to say that perhaps the plan being adopted by that government is the proper one. I am not placing my views against the views of expert members of the government, especially the Minister of Finance. This procedure may be the proper procedure, and it may provide the results that we all desire. Recently the government of France decided to make the Bank of France a publicly owned and controlled institution. The editorial to which I have referred states that the government of France intends a reform of the statutes of the Bank of France to guarantee the preponderance of national interests. The bank at present is a private institution. I will not modify my previous statement because I believe it is the intention of the government of France to get control of the bank, allowing a certain amount of private interest, along, I presume, lines similar to those taken by the government in this country. It seems to me we should profit by the experience of other countries. New Zealand embarked upon a central bank about the same time as Canada did, and after their experience they decided that a bank half private and half public was not in the interests of the nation and so they determined to make it a purely national institution. I suggest that this government-perhaps they have done so-should seriously consider the action taken by other countries and profit by their experience.
In my opinion a central bank should have the sole right to issue currency and to regulate the nations credit. It should also have the power to control the interest rates charged by financial institutions; if it cannot do that it will never justify its existence. The burden of excessive interest rates is the nation's greatest problem. If the central bank here would do what was done in England with the cooperation of the Bank of England, it would perform a useful function. In this connection I should like to read an extract from the Western Producer; to me it is the most comprehensible explanation of the action taken by Great Britain, which I at any rate

have read. The title is The Refunding of Debt. I quote:
F. S. Wright, of the tax research bureau, in a recent letter to the press, gives us some information regarding the refunding in 1932 of the British war loan. Permit me, in supplement, to quote what A. W. Kiddy, financial writer, says on the same subject in the Spectator, most orthodox of London weeklies, in the issue of February 28 last.
"The amount of the proposed conversion was 2,000 million pounds sterling. The holders of the bonds were invited to convert, voluntarily, from the existing 5 per cent to 3J per cent, and they were notified that all those who declined to convert would have their bonds paid off. Now the British government did not have the money to pay such a colossal sum. The transaction was only made possible by a potential creation of credit to the amount necessary. This was possible through the concurrence of the Bank of England. And Mr. Kiddy remarks that the creation was possible -though in fact it was not -resorted to-"and because the investor knew that it would be possible and that the effect would be to make it impossible for this vast amount of money to be reinvested without occasioning a colossal rise in security prices, general consent was given to the conversion."
There are two points to be observed. First, that the so-called "voluntary" conversion was accompanied by a veiled threat which in effect made it compulsory; "either you will do this, or it will be the worse for you." And second it affords a striking illustration of the power of credit expansion where the will is there: as Mr. Kiddy says, it "was not actual credit expansion, but a powerful expression of potential power in that direction." The effect of the transaction was beneficial, enabling a considerable burden of debt to be lifted from the taxpayer.
If one calculates it at H per cent, the amount saved to the English taxpayers on $10,000,000,000 is $150,000,000 per annum.
Now the only difference between this case and the recent experience in Alberta is that the Alberta government did not have the backing of the Bank of England. Could it have had the concurrence of the Bank of Canada if it had sought it? And the further reflection will occur to the student of finance, that if the British government had power to call two billions sterling "out of the vasty deep" of the national credit, for the purpose of debt conversion, why should it not have exercised this power for the purpose of extiction of the debt? Probably because that would not have suited the ends of the money kings. They live upon debt, lending is their business and if the British public had so simple a lesson in the possibility of wiping out of debt, the next step would have been payment of the whole of the national debt! Then what would become of the power of the Lords of Money?
This is a rather long quotation, and while perhaps my own views are not in accordance with the latter part of the statement, I have nevertheless given the whole of it, because I think that is only fair. Let us return now to Australia. Australia, realizing that it could not continue to pay high interest rates-I believe the government consulted the people

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but no results were obtained-took the matter into consideration, and the Prime Minister of Australia, in consultation with the premiers of the several states, decided to reduce the internal debt^that is, the interest-by 22i per cent. This was made compulsory, being put upon the statute books. We have therefore lessons from other countries to guide us.
We must face this issue sooner or later. The longer we delay the conversion of the public debt and the lowering of the interest rate, the greater will be the difficulties the Canadian people will have to contend with. Action in this regard in a very short time is inevitable or the result will be chaos. While, I confess, I am not a financial expert, I think it worth while to give some extracts from the observations of men who have given this subject a great deal of attention, and who no doubt know what they are talking about. I wish to quote from a speech made by the Hon. W. D. Herridge at Hamilton recently. It is published under the title, Debt must be Faced. Mr. Herridge says:
However that may be, the fact is that we are overborne by debt and that something must be done to free us from it. It cannot be absorbed by the golden rays of prosperity. It is beyond the curative powers of bigger and better business. It must be cut away. That means a serious operation. It involves more than a voluntary conversion of our national debt. It may require a revision of the whole range of vested claims. That is indeed a grave matter. But we must face it and face it without delay. We must resist the almost irresistible temptation to try by milder means to cure, in its secondary stages, that dread disease which ends in general bankruptcy. The orderly reconstruction of our undefaulted obligations upon a just and sustainable basis may well be looked upon as admirable. No one loses by it. And everyone knows that it is done pursuant only to our promise to do our best to pay.
And now I wish to quote from a speech made by the present Minister of National Defence, the hon. member for Vancouver Centre (Mr. Mackenzie), in 1935. At that time he was not giving the views of his party or those of the present government; he made it plain that he was expressing only his own views. This was what he said:
Sixth, I suggest the reduction of rates of interest, on all outstanding obligations in the Dominion of Canada. Seventh. I suggest a national conversion scheme reducing the interest on all internal debt to two and a half per cent. Eighth, I advocate immediate negotiations with outside nations where our external bonds are held, for a mutually satisfactory scheme for the reduction of interest on external bonds.
These are the opinions of experts and as such should receive consideration.
In my opinion one of the duties of the central bank should be to call the bondholders together and inform them that the nation
cannot continue to pay the present high rate of interest on outstanding bonds and ask for a voluntary conversion. I have sufficient faith in the Canadian people to believe that they would agree to this, but it will take a national move to bring this about. We have had provincial and municipal defaults and complaints from all over Canada, but the bondholders have merely said, "AVe cannot meet your wishes." But if the national government, with a united nation behind them, made that demand, the bondholders would come across and say "In the nation's interests we agree to have interest rates cut down." There is no doubt in the world about that. That is why I urge the present government, in the exercise of the power which they will have, to take the matter up with the bondholders and see whether we cannot secure a reduction in interest on government bonds.


An hon. MEMBER:: Why the national government?


Harry Leader: Did I say "national" government? Well, federal government. The federal government should be a national government, Mr. Chairman.


Mr. FINN:: It is.


Harry Leader: I submit a nationally owned bank should have the power to regulate interest rates on all mortgages. I am deeply interested in this problem, for I know something about the real conditions. After one or more years of hardship and suffering in western Canada through crop failures, or because of crops produced at a loss, the people whom I represent in this parliament held a public meeting in the city of Portage la Prairie, and I was appointed the chairman. The object of the meeting was to impress upon the government the necessity of reducing the interest rates we had been paying, because we realized that in the end it would be impossible to meet the payments. The hall was full; we could have filled two or three halls of the same size. A committee was appointed to traverse the province of Manitoba and discuss this subject with all who would listen. I was a member of the committee. We had several meetings in various parts of the province. Finally we took the matter up through the United Farmers of Manitoba, and at their convention, held in Brandon, I suggested that a petition be circulated and presented to the Manitoba government asking them to reduce interest rates. A petition bearing thousands of names was sent to the government. They were sympathetic, but it appears that they had no power to reduce rates of interest. We did
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not get the reductions, but we got a debt adjustment act. I am very sorry it is necessary to have such legislation on the statute books of Canada, but so long as the present conditions continue we shall have debt adjustment acts and farmers creditors' arrangement acts and other legislation of a like kind to save people from eviction.
I wish to quote from Hansard of last year remarks made by a then member whose absence from this 'house is, I believe, a national calamity. I refer to Mr. Coote. I do not wish to say anything derogatory of his successor, but I knew Mr. Coote very well as one who was always fighting the battle for the common people, and I regard his absence from this house as a distinct loss to the nation. Mr. Coote told us what other countries have done with regard to reducing interest rates for farmers. He said:
In Argentine the banks have agreed to reduce interest rates two per cent to farmers.
He went on to say:
This rate is five per cent. A corresponding rate prevails on mortgages.
South Africa in 1933. The government paid one and a half per cent on farm mortgages and the farmer three and a half per cent. Any mortgage company refusing to take five per cent, a tax is levied that takes all for the state above five per cent. The amount of this tax is paid to the farmers who have paid it to the mortgage company.
New Zealand in 1932 passed the National Expenditure Act in which they reduced interest rates on farm mortgages to five per cent.
I believe that through a properly constituted central bank the government could very well compel our lending institutions to accept reasonable interest rates, the maximum of which should be, in my opinion, five per cent.
When the minister introduced his budget he told us that Canada's total investment in farm loan board loans amounted to 816,790,000. When one considers that the New Zealand government, whose population is probably less than one-third that of Canada, has $250,000,000 invested in farm loans, it must be admitted that Canada through its government has made but a very puny effort in the matter of lending money to the farmers at a low rate of interest. I believe the central bank should exercise sufficient power to lend millions upon millions of dollars at the rate of five per cent interest to farmers and others engaged in legitimate enterprise. I believe they can do it and it should be done, though only if the private lending institutions of this country refuse to do so. In my opinion all farm mortgages should be reduced to five per cent. In this connection I want to point out to the minister that farmers up until last year were 
paying interest at the rate of 6J per cent on loans froin the farm loan board. This has caused a great deal of dissatisfaction in view of the fact that the farmer who took out a loan only as recently as last year is not charged more than five per cent. I have had several letters on this subject. I think the government should consider the advisability of reducing all farm mortgages held under the board to the prevailing rate of five per cent. It would benefit not only the farmers but the government and the people in general.
I had intended to make some further observations, but the committee have been very patient in listening to my remarks and I am not going to delay them any longer. Neither from the government, the members of this house, nor the people I represent have I attempted to conceal my dissatisfaction with this proposed legislation. I believe we should have had a publicly owned and publicly controlled bank instead of the measure that has been presented to us. Nevertheless, believing as I do that the government and the Minister of Finance have the interests of our people at heart, I shall abide by their judgment and their decision and give this legislation my support.


Richard Bedford Bennett: Under existing conditions, having regard to the vast amount of unused money in the chartered banks, how is it possible for a central bank to regulate or control credit?


Charles Avery Dunning: I spoke of it as a regulatory force. My right hon. friend, I know, has studied this matter, and it is a fundamental principle of the legislation which he himself introduced that by its operations in relation to the cash reserves of the chartered banks it would be able to increase or decrease the volume of money and credit available at any particular time.


Mr. CAHAN:: It could increase it, but how could it decrease it?


Charles Avery Dunning: By open market operations.


Richard Bedford Bennett: As my right hon. friend from St. Lawrence-St. George says, how can it decrease it?


Charles Avery Dunning: It can increase, of course, by the purchase of securities in the open market, and it can decrease by selling them. That is fairly obvious. A decrease must be effected by the opposite method to that which is taken to bring about an increase.


Charles Hazlitt Cahan: Oh well, possibly.


Charles Avery Dunning: No one knows better than the hon. member for St. Lawrence-St.

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George that a great many factors present within and without the country have their bearing upon whether a given action will produce an identical result to-day with what the same action by the central bank would have produced even a month ago. One cannot but dogmatize with respect, for instance, to what the purchasing or the selling of securities by the bank will do, unless one takes into account all the other factors, both national and international, which are present at the time the transaction takes place. But partly, as I think my hon. friends recognize, that has a bearing on the bank's operations.


Frederick George Sanderson: Is subsection 2 carried?


Richard Bedford Bennett: I understood that we were taking up these sections by the different headings.


Charles Avery Dunning: I thought we were taking . up each section as a whole.


Frederick George Sanderson: That was my understanding also. Shall section 2 carry?


Richard Bedford Bennett: What is the reason for the amendment to paragraph (d) ?


Charles Avery Dunning: That is a matter of legal phraseology; it is really a legal amendment.


Richard Bedford Bennett: As the law stood dominion notes meant those that were payable to bearer on demand, issued and outstanding, which on the day on which the Bank of Canada was authorized to commence business constituted a direct liability of the Dominion of Canada. The old section provided that they were payable to bearer on demand on the day on which the Bank of Canada was authorized to commence business.


Charles Avery Dunning: That was the whole point. As a matter of fact the liability in regard to the notes ceases when they pass out of existence. At the present time they do not remain a liability of the bank. The old section read "on and after the day on which the bank is authorized to commence business."


Richard Bedford Bennett: Certainly.


Charles Avery Dunning: They have all been
cleaned up, and the liability is gone.


Richard Bedford Bennett: That is the point exactly; that is why I cannot understand why the amendment is being made. As a matter of fact the law properly stated it. The Bank of Canada has assumed liability for all outstanding Dominion of Canada notes on and after the day on which it began business. That was a steadily decreasing liability; as the notes were called in and cancelled the liability
became less, and when the last note was cancelled there was no liability; that is the position exactly. They substituted the notes of the Bank of Canada as those old Dominion of Canada notes came in, and the liability as far as the country was concerned was lessened by that substitution. We undertook to care for our responsibilities in that direction by delivering to the Bank of Canada bonds of the dominion on which we are paying a rate of interest which enables the bank to pay a dividend.


Charles Avery Dunning: This particular subsection, Mr. Chairman, is absolutely and completely a lawyers' subsection.


Richard Bedford Bennett: It looks like it.


Charles Avery Dunning: Neither the original form nor the amended form means anything to me as Minister of Finance. The lawyers who confer about these things and draft these measures say that this clears up an ambiguity. If it does not it really makes no practical difference to me, and I should be quite content to have it struck out.


Richard Bedford Bennett: I always say that if the minister is advised that he should put this in, well and good, but I suppose it is sections like this that are responsible for the old maxim about lawyers differing. I cannot see just why this section should find a place here. The liability was a lessening one; as the Dominion of Canada notes came in and were cancelled by the Bank of Canada the liability of the country under those notes lessened until it finally disappeared altogether, and we had the new notes taking their place. With respect to indemnity we gave the Bank of Canada certain bonds of the dominion, so I cannot see the reason for this amendment. It may be that some better lawyer than I suggested it, so I will leave it at that.


Charles Hazlitt Cahan: But of course, Mr. Chairman, all the old dominion notes have not been redeemed at the present time. A large number of them must be outstanding and probably will be outstanding for years to come.


Charles Avery Dunning: I suppose we will never know what has become of many of them.


Charles Hazlitt Cahan: I know that in connection with the chartered banks their notes are never fully redeemed; there is a certain small percentage that never comes in for redemption.
I assume in connection with the old dominion notes a large number are outstanding, and they are continued as a liability.


[Stage Direction]
Section agreed to.
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[Stage Direction]
On section 3-Body politic and corporate.
Charles Avery Dunning: The explanation speaks for itself.


Richard Bedford Bennett: Yes. This is another wholly unnecessary amendment, I think.


[Stage Direction]
Section agreed to.
On section 4-Board of directors.
Charles Avery Dunning: The change here is in the underlined words, and of course it is consequential upon what afterwards will develop in connection with the provision for the election and appointment of directors.


Henry Herbert Stevens: In a hasty reading of the notes on the opposite page I notice there is a [DOT]reference to the deputy minister of finance which does not appear in this new section. Is there any change of policy there?


Charles Avery Dunning: The deputy minister of finance will oooitimue to sit on the board, but without a vote.


Henry Herbert Stevens: The minister will correct me if I am wrong because I have just glanced over it hastily, but in the clause being repealed definite provision is made for the deputy minister of finance to be on the board.


Charles Avery Dunning: It is only subsection 1 that is being repealed.


Henry Herbert Stevens: That reads:
In addition to the other members of the board as constituted by subsection one of this section-


Charles Avery Dunning: Subsection 2 still stands.


Henry Herbert Stevens: It appears here as though it were being repealed.


[Stage Direction]
Section agreed to.
On section 5-Persons disqualified for appointments.
Charles Avery Dunning: The point here was that there seemed no reason why the governor, deputy governor and assistant deputy governor should be prohibited from holding stock in this bank. The intention was to prevent them from being interested in any way in any other bank but there does not appear to be any reason why they should not hold shares of the Bank of Canada if they desire to do so.


Richard Bedford Bennett: This is recognition of private rather than public control.


Charles Avery Dunning: It is a matter of the freedom of individuals.


Charles Hazlitt Cahan: What is the meaning of the words "financial institution"? A director cannot hold a share in any other bank or financial institution. What is a financial institution?

Nearly every company incorporated under the Companies Act of Canada is in one sense or another a financial institution, and it strikes me that you would be able to procure very few candidates for directorships in this bank if those to be appointed are to be precluded from holding a share in any other financial institution. I could understand "bank," "trust company" or some similar terms being used to denote particular companies in which the prospective director should not hold shares.


Charles Avery Dunning: I do not like to do it, Mr. Chairman, but I might suggest to my hon. friend that he could direct that question to himself and those sitting around him, because there is no change in that regard. That term was used in the bill as originally introduced by the former government. This is a qualification for governor, deputy governor or assistant deputy governor, and because this is a qualification for those offices only I do not think the restriction is too broad. It is only in connection with those three appointments, and because of that I have not suggested any change in the provision as it was in the act.


[Stage Direction]
Section agreed to.
On section 6-Directors.
Richard Bedford Bennett: I suppose it is intended
to vest these shares in the Minister of Finance?


Charles Avery Dunning: Yes.


Richard Bedford Bennett: Does this section declare that clearly?


Charles Avery Dunning: I think that is covered
in a succeeding section.	.


Richard Bedford Bennett: It must be. The shares
are divided into two classes: "A," the existing shares; "B," the shares to be issued. The shares to be issued, the section states, are to be utilized for the purpose of enabling the registered owner, that is the holder, the Minister of Finance I take it, to appoint four directors. But that appointment is subject to the approval of the governor in council. In other words, the Minister of Finance makes the appointment in the first instance. I was wondering what reason there is for paragraph (ii) being in the terms in which it is, "four directors to be appointed by the holder of the class "B" shares." That is, whatever minister holds them makes the appointment.


Charles Avery Dunning: But with the approval
of the governor in council.


Richard Bedford Bennett: Yes. I wondered why
the paragraph was worded in that way rather

Bank oj Canada
than that the governor in council, shall make the appointment, unless it be that the wording used was thought desirable because the registered holder of the shares will be the Minister of Finance.


Charles Avery Dunning: That is covered by section 10.


Richard Bedford Bennett: But logically I would
have thought that section 10 would have preceded section 9 of the act as amended.


Charles Hazlitt Cahan: It makes it very difficult to follow the meaning of the amendment to section 5 of the bill when the material provisions of the original section as it stands are not printed on the other side, in accordance with the rule. I am simply suggesting that in preparing these amendments we should follow the rules of the house. There was nothing by way of explanation to section 5 which would enable one to understand who were the persons disqualified for appointment.


Charles Avery Dunning: In that case apparently
the quotation from the old act was omitted. I apologize for that.


Mr. McGEER:: Section 6 is the section
that deals with the fundamental change proposed in the bill. By paragraph (i) the directors formerly existing, that is the representatives of the $5,000,000 of share capital, are continued as directors of the bank. Today I am going to address myself to the question of what that means, and how it violates the spirit of our constitution, and perpetuates a system which, I believe, is directly responsible for the impotence of government, for the destitution that exists in the land, and for the deplorable conditions that obtain to-day and that are being intensified throughout the dominion. One cannot look at our municipal situation without grave fears and misgivings, with 253 municipalities now in default, with Alberta embarking, rightly or wrongly, upon a financial policy which only one province is prepared at the moment to adopt and which is directly in conflict with the established policy of the dominion government and with the conditions existing in the old-established province of Ontario where $120,000,000 of municipal obligations are in default, and the provincial government, facing unemployment as it has never faced it before, has been forced to order contractors, who were carrying on works which were giving needed employment to the people of that section, to discontinue those undertakings.


Charles Avery Dunning: In Ontario?


Gerald Grattan McGeer: Ontario, I understand, has actually cut down some of its contracts in the northern area and men are out of employment, whereas, if needed works could be carried on employment could be found.


Charles Avery Dunning: That is too important to let pass. I am quite sure the government of Ontario would regard that as a serious reflection on them. Whatever internal arrangements the government of Ontario may have in respect to their works, I do not know, but it is not correct for anyone to say or to imply that the Ontario government cannot secure funds to carry on works. It has been and is getting those funds. Before that statement goes out across this country I think I should correct it right away, because it is entirely wrong.


Gerald Grattan McGeer: One of the contractors was complaining to me yesterday about being unable to carry on because some work on which he was engaged had been suspended.


Charles Avery Dunning: That may be, but not for the reason my hon. friend states. It is entirely wrong to state that the province of Ontario cannot get funds.


Gerald Grattan McGeer: All right; I accept that. But whether or not the province of Ontario can get funds, the fact is that there is an enormous amount of unemployment in Ontario and a great deal of work needing to be done there which is not being carried on. And across Ontario to-day steps are being taken to reduce unemployment relief, which steps are causing a general situation of unrest in that province.
Now, let me turn to Quebec. I suppose it can be said that that province is not without funds; that Montreal is not without funds. Nevertheless t'he fact remains that an unemployment situation exists in that city, and *that the men responsible for the administration of Montreal and the men responsible for the administration of the affairs of the province of Quebec are at their wit's end to find some way to meet debt and public obligations of the city of Montreal. A great many people believe the reason for that is that we have failed properly to observe our constitution, have failed to exercise properly and wisely the powers which are, by our constitution exclusively reserved to the dominion parliament. A great many people still believe we should have a properly constituted central bank that would issue currency and credit in terms of public need, to satisfy the domestic, social and industrial needs of the Canadian people. Under our constitution there is a definite responsibility upon parliament
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to maintain peace, order and good government, and in order that parliament may fulfil that duty and that function, certain legislative powers are exclusively reserved to the national parliament. As provided 'by section 91, matters reserved to the dominion parliament include:
1.	The public debt and property.
2.	The regulation of trade and commerce.
3.	The raising of money by any mode or system of taxation.
14.	Currency and coinage.
15.	Banking, incorporation of banks, and the issue of paper money.
That is the section of the British North America Act with which we are dealing in this legislation. Savings banks, weights and measures, bills of exchange and promissory notes, interest, legal tender, bankruptcy and insolvency are, under this section, also reserved to the dominion. These powers place on parliament the constitutional duty of determining, creating, issuing and sustaining the circulation of the media of exchange that will provide both government and people with a continuous circulation of adequate volume of sound and uniform currency. For that reason parliament should: (1) define the units of exchange that constitute the nation's money; (2) create the money needed to maintain national security and ordered progress; (3) regulate the volume of money created and issued; (4) stabilize the value of the unit of exchange internally and externally; and (5) regulate the circulation of money by taxation and otherwise.
We hear a lot of talk about funny money, rubber money, sound money and boloney dollar's. But I think it must be plain to any thinking man that parliament under a constitution which gives it the power to create money, to deal with every phase of law that has to do with the regulation of the monetary system, and which at the same time gives to that parliament the power to withdraw money from circulation by any mode or system of taxation, invests in that parliament the power to create and to maintain the circulation of a sufficient amount of money to preserve a decent measure of progress. Parliament can, by exercising its power to create and put into circulation money, along with its power to withdraw it from circulation, avoid all the evils, or at least all the disastrous evils, of too much or too little money in circulation. In other words, we have the constitutional power, and we should make the political attempt to avoid the evils of inflation and the disasters of deflation, which are just as bad.
Let me say that what we are doing in the matter of paper currency is in direct conflict with what parliament has already done in the

matter of coin currency. Under the power to create money, which is given us by our constitution, we create money, not by any mysterious method, but by the enactment of four laws: the Currency Act, revised statutes of 1927, chapter 40; the Depart ment of Finance and Treasury Act, revised statutes of 1927, chapter 71-and under the amendment of 1931 we have now made the mint a branch of the Department of Finance-the Bank of Canada Act which we are now amending, and which was passed in 1934; and the Bank Act,, statutes of 1934, chapter 24. What did parliament do when it passed the Currency Act? It declared the thing that the people of Canada must use for money. By section 15 of that act parliament declared that where money is involved in public or private accounts, contracts, trade or other transactions Canadian legal tender must be used. By section 2 of that act parliament has declared that the denominations of money in the currency in Canada shall be dollars, cents and mills, the mill being one-tenth of a cent and one hundred cents being a dollar. By section 17 of chapter 48 of the statutes of 1931 we made the Royal Mint, as I said a moment ago, a branch of the Department of Finance. In the administration of the mint, which is subject to the regulations which parliament under section 20 of the Currency Act has authorized the governor in council to make, legal tender coin money by section 8 is defined as follows:
(a)	in the case of gold coins, legal tender for any amount;
(b)	in the ease of silver coins, legal tender in payment for an amount not exceeding ten dollars;
(e) in the case of nickel coins, legal tender in payment for an amount not exceeding five dollars;
(d) in the case of bronze coins, legal tender in payment for an amount not exceeding twenty-five cents.
The point I wish to make is that out of what parliament has done with regard to coin money a policy has been developed which should be followed in the creation of paper currency money, because what we are doing in regard to our subsidiary coin, which is only partly legal tender money, we have more reason to do in regard to our paper currency, which is full legal tender money.
Under the provisions of section 24 of chapter 43 of the statutes of 1934, the Bank of Canada Act, Bank of Canada notes are made full legal tender money, and the Bank of Canada is authorized to create and issue these bank notes as such.
Under the powers of the Bank Act and the Currency Act we in parliament have created legal tender money.

Bank of Canada
Let me point out just how money is created, which seems to a great many people to be a mystery. Section 6 of the Currency Act provides that the Minister of Finance may from time to time use the consolidated revenue fund for the purpose of purchasing bullion to provide a supply of coin for the public service. That, surely, is creating money in terms of public need, and if hon. members follow me, they will see the distinction which exists in our attitude to coin money and in our attitude to bank note currency when we talk about
Denomination of coin
Gold:
Twenty dollar	
Ten dollar	
Five dollar	
Two and one-half dollar.. .. Silver:
One dollar	
Fifty cent	
Twenty-five cent.. [DOT]	
Ten cent	
Five cent	
Bronze:
Cent	
Nickel:
Five cent	
issuing money in terms of public need and issuing money in terms of private gain.
Section 20 of the Currency Act gives to the governor in council the power to determine the dimensions and designs of coins and all other necessary regulatory powers. By section 4 of the Currency Act parliament has set the minimum of the purity of the gold and silver in such coins and the specific weight of all coins in a schedule, which I should like to put on Hansard:
	Least	
Standard	current	
weight	weight	Standing fineness
Grains	Grains	
516	513.42	Nine-tenths fine gold,258	256.71	one-tenth alloy; or129	128.355	millesimal fineness,64.5	64.178	900.360	Eight-tenths fine silver189	two-tenths alloy; or90	....	millesimal fineness,36	800.18	50	Mixed, metal copper,tin and zinc.70	....	Pure nickel.
What I want to point out to the committee is that in this creation of money parliament fixes the shape of the coin and the metal content, and if hon. members will make a comparison between the value of the metal content of the coin and the money value given to the coin by parliament, they will realize that it is parliament which creates our metal currency. There are 480 grains in an ounce of silver. The silver content of a silver dollar is 360 grains ft fine; that is, 360 grains less ft, or a total of 288 grains of silver. The current price of silver is 44 cents an ounce; therefore, the value of the silver in a silver dollar is 28%so of 44 cents, or 26-4 cents. The silver dollar, with a metal value of 26-4 cents is given by the Currency Act a money value of 100 cents. That creates the money value in that connection; it is not the silver content which creates the money value.


Mr. KINLEY:: It is restricted legal tender up to only a very small amount.


Gerald Grattan McGeer: These subsidiary coins have no legal tender value.


John James Kinley: Paper money is legal tender to any amount; that is the difference.


Gerald Grattan McGeer: If my hon. friend, will follow me, when we come to paper money, which has full legal tender value, we find that it has far less value than the silver coins.


Richard Bedford Bennett: On the contrary, it has more.


Gerald Grattan McGeer: A five cent nickel coin containing seventy grains of nickel has a bullion value of about three mills, but by law it is given a money value of fifty mills. A one cent bronze coin has a bullion value of less than one mill, but parliament, by law, gives it a money value of ten mills. There is nothing behind or supporting the money value that the coin possesses, and it is not convertible into anything. Once a government issues it, it goes into circulation as the media of exchange of the nation and functions to serve all the purposes of money and all the purposes of legal tender money, up to the point it is made legal tender money.


Charles Hazlitt Cahan: But for petty cash only.


Gerald Grattan McGeer: It does not make any difference whether or not it is petty cash; if you had a million dollars worth of copper cents you would have a million dollars.


Charles Hazlitt Cahan: That is just where you are wrong; you would not.


Gerald Grattan McGeer: I would be very glad to take them from my hon. friend if he would give them to me. I would very soon convert the million dollars worth of copper coins in my possession into a million dollars worth of bank money.
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Charles Hazlitt Cahan: The hon. member will find that the chartered banks of Canada possess today millions of dollars in silver and in copper coin, and they can do nothing with these coins except to keep them in their reserves for the possible use of those who come to the bank. There is no redemption of copper coinage and there is no redemption of silver coinage so far as I am aware. They are used simply as petty cash and one who has too many of them in his till can never obtain good, sound dollars for them.


Gerald Grattan McGeer: There are some people who never use any other money than petty cash. They are not all millionaires and they are not all accustomed to using $50 bills. The great majority of our people never get any money but copper, nickel and silver coins and bills of small denominations. The money of the great masses of our people consists of copper coins, nickel coins, silver money and bills of small denominations. That is the only money they ever use.
Parliament has established as Canadian legal tender subsidiary currency token coins of little or no actual value. I hope my hon. friend will follow me here. Parliament can and does create money as a profitable function of government. Through the mint, which is now a branch of the Department of Finance, the government creates and issues metal tokens as currency which take their money value from the law which parliament has passed. Therefore, parliament creates money by passing laws. More than that, parliament creates money as a highly profitable function of government when it mints metal coins. For example, the Minister of Finance can buy an ounce of silver at forty-four cents and it can be minted into coins having a value of $1.35, with sufficient left over to pay the cost of minting. Therefore, if the government gets value for its expenditures when such money is paid out to the civil service, to contractors, or for the purchase of governmental supplies, the government makes a profit of ninety-one cents.


Charles Avery Dunning: Profit?


Gerald Grattan McGeer: A clear profit; it cannot make anything else.


Charles Avery Dunning: Is not there some cost connected with building and operating the mint?


Gerald Grattan McGeer: Yes, there is, but if the minister had listened to me he would have heard me say that the government could create $1.35 worth of coins and have enough over to pay the cost of minting.


Charles Avery Dunning: I do not agree.


Gerald Grattan McGeer: I do not suppose the minister has looked into the matter. The same thing applies proportionately to nickel and bronze coins. By making silver certificates legal tender and convertible info silver dollars, as has been done in the United States, the government can hold the silver coins in its vaults and issue convenient paper currency against them, get the same results and do away with the inconvenience of the carrying round of silver coins by the public.
My hon. friends talk rather glibly about the small change which they say is not important in the country, but let me give the value of that money which has actually been created by the government. Under the Currency Act and the Department of Finance, the government has created and issued silver coins up to the value of $34,210,267, nickel coins up to the value of $2,259,500, and bronze coins up to the value of $2,772,735. The total issue of subsidiary coins is valued at $39,242,502.
I should like to point out to hon. members of this committee that there has been a great change in the attitude of people and governments towards money. If we can do that with metal, we can do, and we are doing, the same thing with paper currency. I know men will say that you cannot create money without having something behind it; that you cannot create money without having a reserve into which it is convertible; that you cannot get something for nothing; there are a great many men in high positions of authority in the country who repeat these epigrams and think they are establishing a reputation of sophistication, but an examination of what this parliament is doing right now will prove otherwise.
This conclusion is confirmed by this particular bill under consideration. Section 24 of the Bank of Canada Act gives to the bank the sole right to issue Bank of Canada notes and makes them full legal tender. By the passage of the Bank of Canada Act provision was made for the repeal of chapter 41 of the Revised Statutes of Canada, the Dominion Notes Act, under which this parliament issued its own paper currency. In 1934 parliament transferred from the government to the Bank of Canada its constitutional obligation and constitutional right and duty to issue legal tender paper currency. Under section 26 of the Bank of Canada Act the gold reserves which the bank is required to hold is reduced to twenty-five per cent of the value of its notes in issue. Parliament has thus given to the Bank of Canada the power to expand $25 worth of gold into $100 worth of legal tender currency. In doing that, it

Bank o] Canada
does exactly what it does when it authorizes the mint to take 26-4 cents worth of silver and mint it into a dollar. The proportion of the money value of the silver dollar to the money value of the gold dollar is almost identical with the proportion of -the money value of the gold bill to its gold reserve support.


John James Kinley: Was it not the conference at the League of Nations that established that twenty-five per cent should be the minimum?


Gerald Grattan McGeer: It was not the League of Nations; it was the economic conference of 1933. If there is any other information that my hon. friend would like, I shall be very glad to give it to him.
In a word, parliament, by the enactment of the Bank of Canada Act, has given away its power to create and issue paper currency to the Bank of Canada. As a result, the Bank of Canada is able to print for every $100 worth of gold that it holds, $400 worth of legal tender Canadian cash with which it may purchase, among other assets, gold and interest bearing bonds printed and issued by the government. Thus we see parliament giving away its power and its constitutional duty to print paper currency to a corporation that now enjoys this power.
At the end of 1935 the government had authorized the issue of Bank of Canada bills in denominations of $1, $2, $5, $10, $20, $50, $100, $500 and $1,000, and the bank had printed them up to the value of $99,000,000. Here then we see the Bank of Canada printing paper currency of little or no value and issuing it with a money value given to it by parliament. The Bank of Canada thus performs with paper currency the same function that the mint performs with metal; it creates Canadian legal tender money. There are very great differences in -the results which occur when the government uses the mint, as a branch of the Department of Finance, to create money, and when the government delegates to the Bank of Canada its power to issue paper currency. One difference is that in the case of the mint all profit on the minting and issuing of metal coins goes to the government, while in the case of the Bank of Canada the profit on the printing and issuing of paper currency is shared between the government and private shareholders who have invested some $5,000,000 in the bank. I would point out that no group of shareholders offering $5,000,000 to an institution that can make money offers any contribution either to the business or
to the power of that bank. What does a bank, which has power to issue $99,000,000, and has issued $99,000,000, receive from a group of shareholders who have invested $5,000,0000 in shares? But that is not the worst part of it. I know that every man who takes the position which I am taking must perforce run counter to public opinion and must be prepared to stand in the condemnation of those who will adhere to the traditions and conventions of the past, not only long after they have been proven to be useless but long after they have been proven to be disastrous to the well-being and the progress of humanity. I am aware that wher men talk of such legislation as we are dealing with to-day they say that it is dictated by the need of security and by the necessities of sound finance. But in my opinion the time is not far distant when laws that give away to a private monopoly the power to create money, laws whereby parliament shares, with men who invest for private profit, its sacred and conspicuous duty of providing the people with an adequate volume of sound and uniform currency, will be looked upon not only as improvident but as thoroughly unsound and bad in constitutional procedure.


Charles Avery Dunning: My hon. friend spoke of giving away something to a private monopoly. We are not doing anything of that sort in this bill.


Gerald Grattan McGeer: No, but what you are
doing is this. You are-


Charles Avery Dunning: That is what my hon.
friend just a moment ago said that we were doing, if language means anything. Those were his exact words. Does he mean that?


Gerald Grattan McGeer: What I said was this, that by the Bank of Canada Act, which is under amendment now, we gave away to a private monopoly the right to print paper currency.


Charles Avery Dunning: The hon. member did
not say that.


Gerald Grattan McGeer: What I say now is that we are continuing that system, and I should like to deal with that feature of the bill, now that the minister has raised it, as to exactly what is taking place under the proposed amendment. I think the minister will agree with me when I say that under sections 13 and 14 of the Bank of Canada Act, which continue, the executive committee is an all powerful committee in control of the affairs of the Bank of Canada. Section 13 states that the business administration of the bank shall be under an executive committee which shall consist of the governor, the deputy gov-
Bank of Canada


Charles Avery Dunning: That is not so.


Gerald Grattan McGeer: All right; let me put the facts.	[DOT]


Charles Avery Dunning: The statement of fact is not so.


Gerald Grattan McGeer: I say the facts show it. I am not giving it as my statement; and I am going to ask the committee to decide on the facts. We have only $99,000,000 of currency in issue to-day. The Bank of Canada has on hand $181,000,000 in gold, and our gold production is increasing. Under the Bank of Canada Act the bank can, if it wishes, print and issue bank notes to four times the value of its gold reserve. Therefore parliament has authorized the bank to issue full legal tender currency to the value of $724,000,000, and it is using only $99,000,000. According to established current banking practice that amount of legal tender currency is sufficient to support at least $2,400,000,000 of bank credit. Surely, in the face of those facts no one can deny that, if currency and credit were issued to the extent warranted, destitution would not be stalking the land, work crying to be done would not be neglected, and men in every walk of life anxious, ready and willing to go to work would not be denied work because the federal parliament, the federal government, provincial governments and municipal governments are all declaring: We have not the money to go on with the works that we need to carry out.


Charles Hazlitt Cahan: May I ask my hon. friend: Supposing he issued $720,000,000 of Canada bank bills-that is, to the extent he suggests- what would he do with it?
Mr. McGEER; What would I do with it?


Charles Hazlitt Cahan: Supposing the hon. member were Prime Minister; supposing he had com-

Bank oj Canada
plete control of the currency and were czar and dictator of Canada, what would he do with the money?


Gerald Grattan McGeer: I would put people to work.


Charles Hazlitt Cahan: With what?


Gerald Grattan McGeer: With that money.


Charles Hazlitt Cahan: You would pay out that money in wages? I am fully convinced that if you did what you had in mind-


Gerald Grattan McGeer: You would ruin the currency of the country?
Mr. CAHAN -your dollars would not be worth cents. That is the whole trouble.


Gerald Grattan McGeer: If my hon. friend will just bear with me I may have an answer to that. I am going to deal with that question in just a moment, and I am going to deal with it just as fully as the committee will permit me. I have not overlooked such a simple problem in currency management as that. I grant you there are a great many difficulties in stabilizing the value of money, but I want the hon. member for St. Lawrence-St. George (Mr. Cahan) to remember that there were men like him who stood up in their places in the House of Commons in Great Britain and declared that any such thing as the management of international money could never take place unless the free use of gold was available, and that they were just as positive and just as convinced that no other system than an international gold system would operate, as he is that nothing can be done.


Charles Hazlitt Cahan: Will the hon. member allow me to reply to that? During that discussion there was no one in Great Britain, so far as I am aware, who made the contention of the hon. gentleman that you can create something of value out of nothing. The omnipotent creator is alleged to have that power, but I have never known a government or an individual to have it or to exercise it.


Gerald Grattan McGeer: I think that is a very glib statement. Being myself a lawyer, being a member of parliament, and knowing something about present methods of accumulating profit, I think it would be very unfortunate if things could not be created out of nothing, because if they could not, I believe most of the lawyers in the country would' be in the poor-house.


Charles Hazlitt Cahan: That would apply to the hon. gentleman as well as to myself.


Gerald Grattan McGeer: Yes, of course it does. What I say is, it is not to be said that you are creating something out of nothing when you create by law something which is essentially a
creature of law. There can be no money by any rule of nature. There can be money when people rise to the point that their intelligence will permit them to create laws by custom, or there may be such a thing as money when peoples rise to a standard of civilization where they can convene in parliaments for the purpose of enacting laws whereby collectively they can do for the people that which the people cannot do for themselves. My hon. friend should always keep in mind that money is only a simple tool of trade, created primarily to serve as a medium of exchange, created first by a law of custom to assist and advance commerce dependent upon barter, and now developed as the economic bloodstream of a civilization that is living for the firet time when illiteracy has been eliminated and accountancy has come to be generally understood. That is why we have been able to abandon a money of fixed value based upon metal for a token currency whose value comes from law. That is why we are able to take a token currency in the form of paper money and print it upon a basis of twenty-five per cent, and vest in the government the power to withdraw that circulation-


Frederick George Sanderson: I do not wish to interrupt the hon. member, but I must draw to his attention that he has spoken for more than forty minutes.


Some hon. MEMBERS:: Go on.


Gerald Grattan McGeer: What I want to point out is this, that if there is one thing upon which this house could have spent a lot of time, and spent it to great advantage, not only to the house but to the whole of the people of Canada, it is that of finding some method to get our medium of exchange effectively into circulation. I venture to say that I have given this subject enough time and study to command the respect of some members of the House of Commons. I have not come to this house without having spent as much time as I could possibly give in the last five years to the study, not only of this particular legislation, but of the monetary system now in vogue throughout the world, the changes that have taken place in the management and control of money, the creation of currency and the credit medium of exchange during many hundred years. This is where I think parliament is making a great and fundamental mistake. We see parliament delegating to the Bank of Canada the identical power to create and issue money that the Department of Finance exercises through the mint. The difference is this, that in the case of the mint the profit from minting money goes to the government, and in the case of Bank of Canada bills it goes to others.

Bank oj Canada

I have dealt with the way in which we create minted coins. I have dealt with the way in which we create Bank of Canada full legal tender money. That is not all the money created by parliament. Let me deal with section 60 of the Bank Act of 1934. Under that section parliament gives away the right to print as money bank note currency. To get a proper appreciation of what that section means the committee shoidd understand that under our Companies Act a limited liability company is incorporated; it has, we shall say, a capital of $1,000,000. That capital is sold; when the capital is paid for, the money is in the treasury; that is the working capital of the company and the shareholders are liable to lose that much money. When you incorporate a bank for a million dollars, however, sell your stock and have a million dollars in the treasury, section 60 of the Bank Act gives the bank the power to print another million dollars in money, and there is no further security required. The only thing the Bank Act says is that where that power to double the capital is enjoyed the liability of the shareholders shall be in the same amount, which is not an additional security but merely an equitable and proper extension of the principle of limited liability which is involved in the Companies Act.
That is what we do when we give our banks the power to print paper money. They can and do buy government bonds with that money. They can and do advance bank loans with that money. They have created an amount of money as great as $140,000,000, and I think it is now somewhere in the vicinity of $118,000,000. I am not unmindful of the fact that under the Bank of Canada Act for five years that amount is to be reduced by five per cent and for another five years by ten per cent until the amount of bank note currency which the banks can issue is reduced to twenty-five per cent. On their present capital they will still be able to issue, free, $36,000,000 of money. Let me recapitulate those figures. At the end of the year 1935 the total money in existence in Canada consisted of:
1)	Gold coins	 Nil
2)	Moneys minted and issued in
pursuance to the provisions of the Currency Act. consisting of silver, nickel and bronze coins	$ 33,674,787
(3)	Moneys issued by the Bank of
Canada under the Bank of Canada Act	 99,677,229
(4)	Moneys issued under the Bank
Act, chartered bank notes.. 118,928,662

There has been in the last year a drop of about $6,000,000 in the amount of silver, nickel and bronze coins, and another substantial drop in the total amount of money in issue. Thus we see that the Department of Finance, representing parliament, issues only $33,000,000 of the total of $252,000,000, in round figures, of token currency in circulation. Parliament creates thirteen per cent of the money and issues it for public use and in terms of public need, while giving away to bankers, who will issue not in terms of public need but only in terms of private gain, the right to issue eighty-seven per cent of the money now in use.
I ask the members of this committee to ponder the situation. In this dominion we have $252,000,000 of money; yet if we look up the records we find that our bank deposits total $2,400,000,000. We do not use either small change currency or large notes as the medium of exchange that carries on the business of this country to-day. The thing that has come to be the medium of exchange is a cheque transferring bank credit, which amounts to ten times the total money in issue in the dominion. I am aware of the fact that certain Canadian bankers have denied that they create money. It is true that they do not create money, but they do monetize credit and use it as a substitute for money, with a bookkeeping system. This is what a banker does when he wants a credit in a bank book, in order to finance a loan, in substitution for the old practice of taking his own capital or the capital that was left on deposit with him and appropriating it from himself or his depositors to a borrower; for that the banker substitutes the writing of a credit into a book, and in that way he just as effectively creates a medium of exchange as does the government when it mints silver coins, or as does the Bank of Canada when it prints bills, or as does a chartered bank when it prints bank note currency.
Let me show you how this works out. As I say, we had $39,000,000 of metal coins in 1934 and only $33,000,000 in 1935, but in Bank of Canada bills, bank notes and bank deposits we have $2,500,000,000. Thus we see that parliament creates only $33,000,000 out of a total of $2,600,000,000 of medium of exchange in common- use, or 33/2600, which is just a little more than one per cent of our money in issue. It is true that those in industry and commerce through individual and collective effort can create wealth up to a point, but they cannot create the money which is necessary to permit a collective enterprise to be carried on in either the production or the distribution of wealth in
Mr. McGeer.l

Bank oj Canada
human service. When we give away to a banking monopoly that is not responsible to parliament and to the government of the day the power to create money; when we set up in private hands, as we have done, our own Bank of Canada; when we give the chartered banks the power to create paper currency and statements of account which, when transferred by cheque, effectively serve as money, we place the issue of money in the control of those who will not put it into circulation other than under a contract which guarantess its return with interest. Consequently, instead of issuing currency out of the power of government, to advance a general program of progress and the well-being of the community, we find ourselves bogged down under a load of national debts, provincial debts, municipal debts, corporation debts and private debts, that there is nothing available with which to pay.
So what are we going to do? The taxpayers groan under the confiscation of their real estate, and often throw it back on the hands of the municipalities. Men flee from industry because they say that the risk is too great and the taxes are too high. Men actually leave one section of the country to go to another; they are leaving some of our overtaxed cities to-day and are actually leaving our country rather than submit to the confiscation of wealth by taxation which is still increasing. We have done some extraordinary things in this parliament. We have put on an eight per cent sales tax, the highest ever imposed in the Dominion of Canada, and in addition we have proposed to invite the nine provinces to levy additional sales taxes. Well, I speak with some little experience as a municipal administrator, and I say that you can do to investment in business in this country what has already been done to investment in real estate in Canada. You can destroy it by taxation.
This Bank of Canada does not provide, as I thought we promised, a properly constituted central bank which would issue currency and credit in terms of public need, not in terms of private gain. We are not doing that at all; we are perpetuating the worst kind of system, under which the sort of thing I have indicated is carried on, and I just want to draw the attention of hon. members to what it has cost this nation to carry on a system of that kind. These figures should make every hon. member think seriously before he votes for a system to continue the issue of currency and credit in terms of private gain. At the close of the war our national debt stood at $1,400,000,000. Since then we have paid out from consolidated revenue fund 12739-223J
$2,200,000,000 on account of interest. We have paid on account of principal $275,000,000, or, since 1918 a debt cost of $2,475,000,000. Notwithstanding that enormous contribution our national debt in the same period of time has risen from $1,400,000,000 to $3,200,000,000. Taking the average of our deficits and interest charges as we now face them in 1936, averaging them back to 1931, we are going behind at the rate of S2.400,000.000 a decade. And that is only the federal account. The municipal account is just as bad; the provincial account is just as bad, and the load of corporation and personal debt is bringing disaster everywhere.
What has parliament done in the past? Influenced and directed by those who claim a special knowledge of political economy and monetary control, it has said that parliament cannot be trusted with the issue of money; that it would spend too much, and that, therefore, we must put the brakes on by borrowing at interest and have the taxpayer stand behind to defy governments and put them out if they dare to spend too much.
But that did not work. Parliament said: Let us throw the burden on posterity. We borrowed to build roads, to build railways, and to build bridges across the St. Lawrence, believing that posterity was to carry the load. But, unfortunately for this generation, we have caught up to posterity, and the load which we thought posterity was going to bear we find that we cannot carry ourselves. A debt system is not a sound money system. A debt claim system, under which men interested in interest bearing bonds control the issue of currency and credit, is not a safe system. If we are going to have progress financed and democracy maintained we must do what has been done with the post office, administer it as a public utility largely free from partisan influence. We must do with our money system what we have done with out customs' system, administer it as a public undertaking largely free from partisan influence, and build it up until it earns the respect of everyone. We must establish the Bank of Canada as the supreme court of finance in the dominion and have men in charge of it who will serve just as honestly and efficiently and effectively as the men in the supreme court of Canada. That is not an impossible proposal. The Minister of Finance will agree that t'he Commonwealth Bank of Australia has no capital stock at all, and this kind of institution should not have any stock.


Charles Avery Dunning: My hon. friend is right,
but it had an advance from the treasury.
Bank oj Canada


Gerald Grattan McGeer: But no capital stock, and
it is wholly publicly owned. I think the Minister of Finance will agree that the Bank of New Zealand has been changed from one in part publicly owned and in part privately owned to a wholly publicly owned bank.


Richard Bedford Bennett: The Bank of Australia
was started as an ordinary chartered bank.


Gerald Grattan McGeer: But that has been wiped
out. I am talking about the Commonwealth Bank of Australia which stands to-day as a publicly owned institution.


Richard Bedford Bennett: And does a banking
business.


Gerald Grattan McGeer: The house in committee of supply, Mr. Sanderson in the chair.



DEPARTMENT OF TRADE AND COMMERCE

[Stage Direction]
Commercial intelligence service, including miscellaneous expenditure in connection with Canada's trade, $733,400.
Mr. MacNICOL:: Would the minister explain the reason for the increase?


Hon. W. D. EULER (Minister of Trade and Commerce):: The increase is accounted
for by some increases in salaries and in travelling expenses.


Abraham Albert Heaps: There is one word I should
like to say before this item passes, and it is more in the form of a question to the minister. I know it is the policy of the government to try to extend our trade as much as they possibly can; in fact, that is one of the methods they are adopting to bring about a better state of affairs in this country. Canada still has an embargo, I believe, on trade with Russia. Earlier in the session a question was put to the minister by my colleague from Vancouver East (Mr. Maclnnis), and at that time I think the minister's answer was that the matter was still under consideration. Personally I cannot see by what process of reasoning we still maintain an embargo on trade with Russia. It is true that politically we do not see eye to eye with her in respect to her institutions, but if that is going to be taken as the yardstick in judging what countries we shall trade with, we shall have to break off trading relations with many other countries of the world. We could very easily find an excuse, for example, for breaking off trade with Germany, for under its present regime it has committed more atrocities, I believe, than were committed in the last two hundred years in Russia, and yet we have never thought of breaking off trading relations with Germany. We have been compelled to apply sanctions to a certain extent to Italy, but we have not entirely broken off trading relations with her although she has violated world pacts. Japan

Supply*-Trade-Commercial Intelligence
is doing things in Manchuria and northern China which are in violation of international agreements, but so far from breaking off trading relations with Japan, the present government has entered into negotiations to ease our trading relations with that country. When those are the conditions prevailing I cannot see any logical reason why there should be an embargo, so far as Canada is concerned, on trading with Russia. I should like to know if the minister has had the matter under consideration, and, if so, what steps he or the department or the government intends to take in regard to the matter.


William Daum Euler: I think I might agree with
my hon. friend from Winnipeg North (Mr. Heaps) that certainly it is not one of the considerations, so far as trading with Russia is concerned, that Russia has a different system of government from ours. That does not enter into the question at all.


Richard Bedford Bennett: It never did.


William Daum Euler: I am speaking just for this
government.


Richard Bedford Bennett: The statute contains
special provisions, and that was not a provision of the statute.


William Daum Euler: I made no reference to the
statute.


Richard Bedford Bennett: I was referring to the hon. member for Winnipeg North.


Abraham Albert Heaps: I made no reference to any
statute.


William Daum Euler: I am referring to the subject merely because my hon. friend has brought it up, and I am simply making that observation. I do not know that I can add a great deal to what I said some time ago when a similar question was asked. Perhaps I can only repeat that so far as the government is concerned we would like to do business with every country in the world if the conditions were right and proper, and so far as trading with Russia and the removal of the embargo are concerned, at the moment that is still a matter for consideration. That is as far as I can go at present.


Abraham Albert Heaps: Would the minister state the difficulties in the way of establishing an understanding so far as trading with Russia is concerned, in just the same way that Great Britain and the United States are now trading with her?


William Daum Euler: I am afraid that I could not say that there are any particular difficulties. I would perhaps satisfy my hon. friend if I
asked him just to possess 'his soul in patience for some little time because the matter is receiving consideration.


Abraham Albert Heaps: I am a very patient soul, and I shall content myself in patience until another session comes round, by which time I trust that some progress will have been made in that direction.


Mr. BLAIR:: For some time, Mr. Chairman, I have been worried over the price of Canadian bacon in Great Britain. I have before me quotations showing that Danish bacon brings two cents a pound more in Great Britain than does our Canadian bacon, and those who will take the trouble to look up prices will find that the Danish farmer receives 4-7 cents a pound more for his bacon than we do in Canada. There are complaints that the bales in which bacon is shipped out of this country are not put up uniformly; that a poor piece of bacon will be put with a good piece, and for many years the type of bacon going out of Canada has not been regulated. There are five grades of No. 1 Canadian bacon, and we think the grading of bacon that is shipped out of Canada would help a great deal in this situation. We also feel that if our bacon wore of a uniform quality, this would help a great deal. I should be glad if the minister would tell us how many different grades of bacon there are in No. 1 that is shipped out of this country.
There is another angle to the question. Those who are best informed on the matter tell us that we have not the right type of bacon hog. We have reports from a friend of the minister, Mr. Schneider in Kitchener, and from Mr. J. S. McLean, of Canada Packers that it would mean twelve millions of dollars to Canada if we got a different type of pig, say the Danish pig. The Danes have specialized in bacon and dairying for the last seventy years, and have surpassed other nations in that field. The Danish pigs have proven themselves to be the best breeding stock. While the trade agreement helped to a certain extent, the fact remains that the Danes are pushing us right off the British market and getting a better price for their bacon. One of the reasons why we want the Danish pig in Canada is that at birth they are twice the size of the Yorkshire pig. They are much better mothers and have smaller shoulders and necks. They have larger hams which will grow faster and will weigh 225 pounds four weeks earlier than the Yorkshire pig. The Danish pig is wanted by the Canadian packer. This may not be inter-
3502	COMMONS
Supply-Trade-Commercial Intelligence
esting to some of the Toronto members, but it is interesting to the farmers who live north of Toronto, and it certainly is interesting to the people in my district. These people have been driven to extreme need, and it must not 'be forgotten that it is generally the pigs that pay the mortgage on the farm. Mr. J. S. McLean, President of Canada Packers Limited, 'has stated that if Canadian hogs had been as good as Danish hogs, during the last three years the Canadian farmer would have received $12,000,000 more for his hogs. That is a great deal of money, and I think attention should be directed to this statement.
For eight years I have tried to get the Danish hog into Canada, but there is an oligarchy in the Department of Agriculture past which it was impossible to get. There is a man in the department who occupies a room nearly as large as this chamber. Things have gone to his head and he believes he- is Mussolini. I think it is time that the officials of this department should be told what they should do. Our ministers have had great difficulty. The hon. member for Melville (Mr. Motherwell), when he was minister, tried to get the Danish pig into Canada, but he was not successful. The former Minister of Agriculture, Mr. Weir, tried to get them in. The department agreed to let in the landrace pig from Sweden, but they would not let in the Danish pig. The Swedish pig is much inferior, but the former minister had to abide by the ruling of the oligarchy. The present Minister (Mr. Gardiner) has told me, both publicly and privately, that he will help me to get the Danish pig in. I know he has his battles to fight and I know those in the animal husbandry division will try hard to see that he does not get the Danish pig in. Nevertheless he has given his promise and I rely on it. This would mean many millions of dollars to the people of Canada. I think this matter comes under the Department of Trade and Commerce as it really means trying to get as much as we can for the production of our farmers.


Harry Leader: Mr. Chairman, I want to draw just one matter to the attention of the minister. At one time we enjoyed a promising trade in pure bred cattle with New Zealand and Australia, but this trade has been lost. At the present time most of it is going to the United States. I take some farm papers and I am well aware of the fact that the United States are very proud that they have been able to get the representatives of the governments of Australia and New Zealand to purchase suitable pure bred stock in that country. We have trade commissioners in New Zealand

and Australia, and I think they should be notified that there is in Canada pure bred stock which will compare very favourably with anything there is in the United States. When the governments of those two countries again send their representatives abroad to secure pure bred stock, our trade commissioners should invite them to come to this country. It might be -asked if this stock can be obtained in Canada. I may say that within the last three weeks I have had the opportunity of visiting some herds in Ontario and I say most definitely and emphatically that we have some wonderful pure bred cattle. I am a practical man and I know what I am talking about. I have reared stock which was good enough to go to Australia and New Zealand. I urge the minister to take up this matter with the trade commissioners who should ask the representatives of the governments of these countries at least to visit Canada to see what they can get from their sister dominion.


Mr. BARBER:: Is the Commercial Intelligence Journal included in this vote? If so, what was the cost of publication?


William Daum Euler: That would come under printing. The hon. member for Wellington North (Mr. Blair) is interested in the breeding of Danish pigs, and he states that the Department of Trade and Commerce should attempt to promote the breeding of this particular type of animal. This department is always interested in the promotion of trade of all kinds with all countries, but I am afraid I am at a loss to answer any questions referring to the selection of any particular kind of pig as being the most suitable for production in this country. I think that would come under the live stock branch of the Department of Agriculture. With all respect to my hon. friend, perhaps he ought to make his representations to the Minister of Agriculture (Mr. Gardiner). He stated that the exports of bacon to Great Britain had fallen off, while those from Denmark had increased.


Richard Bedford Bennett: It is the exact opposite.


William Daum Euler: As a matter of fact, our exports to Great Britain have increased in greater proportion than have the exports from Denmark. With regard to quality, I am sure the hon. member would be interested in knowing that in a recent competition held in London, England, a firm of packers in the well known city of Kitchener took first prize.


John Knox Blair: Would the minister permit a correction? Until the imperial agreements our bacon exports fell off.


William Daum Euler: That is just exactly what I was going to say. I am sure the leader of the

Supply

Trade

Commercial Intelligence
opposition (Mr. Bennett) would have said that himself in a few minutes if he intended to speak on this matter.
I have not a great deal of information with regard to the sale of pure bred cattle, but I can say that there is a preference for that particular kind of cattle from the British isles. The Australian government are granting loans for the purchase of pure bred cattle in the United Kingdom. Rightly or wrongly, Australia is embarking upon a definite policy of buying from those who buy from them. There is a very heavy balance in favour of Canada in our trade with Australia, but for the benefit of my hon. friend from Manitoba, I may say that this country hopes to negotiate a new agreement with Australia and his representations will be borne in mind when that time comes.


Mr. DONNELLY:: Is it a fact that the United States ship most of the hams entering England? Why is it that that country ships most of the hams to England while Canada ships few or none?


William Daum Euler: I have no information with regard to the matter.


Henry Herbert Stevens: There is a matter which I think should receive the minister's attention. The hon. member for Wellington North (Mr. Blair) very properly raised the question of the sides from the number of grades of hogs that are included in what is known as grade A export bacon, but I did not notice that the minister referred to that question at all.


William Daum Euler: Because it does not come
under this department.


Henry Herbert Stevens: In a way, yes. Probably
it comes under no department, but certainly it should come under the Department of Trade and Commerce in conjunction with the Department of Agriculture. I know that the Department of Agriculture undertakes to handle all the grading of live stock and all that sort of thing so far as Canada is concerned, and when any action is necessary in connection with the export of live stock or the grading of live stock products the Department of Agriculture is usually consulted and I believe its views and expert advice largely dominate. But if any action is taken it must be taken through the Department of Trade and Commerce, that is, action definitely fixing the grade of export products. Now this is what was found in the investigation by the price spreads commission. I will read a part of the evidence which bears out what my hon. friend from Wellington North had to say on the subject. I shall quote two or three paragraphs because I think it
is desirable that this matter should be taken into consideration and some definite policy adopted. I quote from page 171 of the report of the commission:
Summing up, we feel that the system at present in vogue in handling Canadian bacon on the British market operates primarily to the advantage of the packer exporter and the distributor concerns on the British market, and that there is insufficient consideration given to the interest of the primary producer. If, however, as the president of Canada Packers has declared, the price of bacon in Great Britain fixes the price of hogs in Canada, it is obviously of vital importance to the producer of hogs that the marketing of Canadian bacon should be on a fair and equitable basis.
Evidence given us has shown that it was possible to secure for high class Canadian bacon a price substantially in advance of the prevailing price and a figure practically equivalent to that of Danish bacon.
I pause here to emphasize this particular point. The minister a moment ago referred to the firm of Schneiders, though he modestly refrained from mentioning the name, inasmuch as the firm happens to be in his own riding. There is another firm, Dumarts, which has just as good a record, but it was Schneiders' bacon with which an interesting test was made in London. One of those who carried out the test was a gentleman named Percival, I believe, though I am not sure of this, one of the most prominent in the marketing of bacon in London, and with him were Miss Cora Hinds of the Winnipeg Free Press and a third person. They were to be the judges. They took bacon from some of Schneiders' export, and they also took Danish, Irish and Dutch bacon, all leading brands. These samples they took to an expert chef in one of the outstanding hotels and after he had cooked the bacon and served it in the ordinary way this committee, without knowing where any particular sample came from, passed upon the best type, and they all agreed on a certain selection which proved to be Schneiders' bacon.
Another evidence that we can do as well or nearly as well as the Danish producers is [DOT]the experience of the Ontario Department of Agriculture with what is known as the Big "0" Brand. In this connection I wish to commend the present provincial Minister of Agriculture, Mr. Duncan Marshall, for having carried on that experiment-because it was largely an experiment. The abattoir that produced that brand, with the assistance of the Ontario government, took select bacon hogs for the purpose of making export bacon. I shall come to the significance of that in a moment, but for the purpose of this recital it is sufficient to refer to that in passing. They then exported their bacon to a committee of British distributors among whom,
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I believe, are two agents of Canada Packers, that is, British firms who are agents of Canada Packers in Great Britain, and other distributors. They constitute a marketing committee in England, and every Thursday they sit and determine what is to be the price of bacon for the following week. In other words, the price of Canadian bacon is fixed by a committee of British distributors of bacon, not only Canadian but other bacon as well. The Big "O" Brand was exported independently of that committee and one outstanding firm-I will not mention the name because they have been penalized and forced to abandon the handling of that brand-secured a price which equalled the Danish price in several instances, exceeded it in one or two instances, and in other instances was slightly below, a mere shilling or two below, whereas the prevailing rate for Canadian bacon was eight, ten, and sometimes fourteen shillings below the Danish. As a rule it is substantially below the rate for Danish bacon. I do not have the record, though, under my hand. But the Big "O" Brand, shipment after shipment, secured that market on a parity, either slightly above or slightly below the Danish price. It is safe to say that it was virtually on a parity with the Danish price. This committee to which I have referred served notice on the British firm that was distributing the Big "0" Brand- I have seen the letters, but here again one cannot use these things because it only penalizes people-directing them to desist and come into the committee again. And they did. I have no means of ascertaining how the Big "0" Brand has been marketed during the past year. That is not within my knowledge and I cannot therefore deal with it. Now, why is it that Canadian bacon has received a lower price on the British market than Danish bacon? I can give the answer by quoting further from the report dealing with the evidence before the price spreads commission. I shall repeat a part of what I have already read:
Evidence given us has shown that it was possible to secure for high-class Canadian bacon a price substantially in advance of the prevailing price and a figure practically equivalent to that of Danish bacon. This, however, was secured only through British marketing agencies other than those included in the British Bacon Committee. It was also pointed out that predatory action had been taken by the bacon committee to discourage independent dealers from handling Canadian bacon, such as the Big '0' Brand at a price obove the "official" price.
These are the facts. There is no question about them. I want the minister to follow this very carefully:

The packing companies include in grade A, bacon made from several classes of hogs, including selects, butcher, light, heavies-
And bacon. That is, five grades of hogs included in the production of what is known as grade A bacon. Your bacon hog fixes the price of hogs in Canada. Selects get $1 per hundred above the bacon price.


An hon. MEMBER:: A dollar per hog.


Henry Herbert Stevens: A dollar per hog above
the bacon price. The lights are penalized a dollar a hog; the heavies are penalized one and a half to two dollars a hog, and the butchers are penalized a dollar a hog in the market. Mr. McLean swore very positively- I have his evidence before me-that the price of all Canadian hogs was fixed by the price of bacon on the British market. The best price for Canadian hogs is for what is known as the bacon grade. He, however, who exports about eighty to ninety per cent of the bacon, included in the class of bacon that fixes the price in England five grades of hogs, including those three lower grades. It must be evident to anyone that the inclusion of those three lower grades in their grade A bacon, which determined the price of bacon in England, reacted adversely upon the price of hogs in Canada. One cannot escape that conclusion,
I turn now to a fact affecting interdepartmental officials. When I occupied the office which is now held by the minister, this question of the export of Canadian bacon was before me, and I may say to the minister that he has in Mr. Wilson an expert excellently versed- in the marketing of farm products. Through Mr. Wilson and other sources we learn that the type of Canadian, bacon which was going forward to Great Britain was inferior, and that if we were to raise the price of bacon on the British market we should have to improve the export standard. So I asked for a conference, and a conference was held between officials of the Department of Agriculture and the minister of that department, and officials of the Trade and Commerce department and myself. Present at that conference were two representatives of Canada- Packers. One was Mr. Todd, who claims to be the representative of the packers, but who, as everyone is aware who knows his connections, represents Mr. McLean, and the other was a gentleman who is not with that company but who at that time was its sales manager. At that conference it was demonstrated, from advices we had in the department, that it was the inferior type of bacon going forward which was responsible for the low price we were

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receiving on the British market as contrasted with Danish bacon. My effort was to interest the Department of Agriculture in raising that standard, which could be done by eliminating the use in grade A of the three inferior grades of hogs and limiting it to bacon and select hogs. But at that conference the officials of the Department of Agriculture turned to Mr. Todd, and' he it was who determined what the policy would be. His answer was along this line. He said, "There is a market in England for second bacon, and it is our opinion that it is better to export a substantial quantity of what might be determined second bacon, because there is a market for it." My argument was-and I believe that any expert in the Department of Trade andi Commerce will endorse it- that if we were to raise the standard of our export bacon by including a larger proportion of select and bacon hogs in grade A or by limiting grade A to those two selections, we should raise the price of bacon in England and automatically raise the price of hogs in Canada, because, as Mr. McLean said, the price of hogs in Canada was fixed by the price of bacon in England. Do not let us forget that we export only about fifteen per cent and we consume in Canada eighty-five per cent. So that the price of hogs marketed in Canada as well as of those exported to Great Britain is fixed by British prices for our bacon.
It may and probably will be argued that there is not a sufficient quantity of select and bacon hogs in Canada to make this suggestion practicable. The evidence showed that about twenty per oent were selects and thirty per cent were bacon; in other words, about fifty per cent of the hogs marketed wild grade bacon or select. So, as the total export is only about fifteen per cent, there is in Canada an abundant supply of high grade hogs to serve the market in Great Britain, the market we should most earnestly foster and develop, and yet to leave an adequate supply in this country for high class trade at home. But let us assume that the argument has some foundation, that there is not enough to supply our whole export requirements and attend to the demand in Canada. Then I submit-and this is what I rose to suggest to the minister-that there should be a definite regulation to limit the class of hogs used for the production of grade A bacon to selects and bacons; the others can go, if it is desired, into grade B bacon. But it is grade A bacon that fixes the price for Canada on the markets of Great Britain.
Let me read further from the report. After describing the types of hogs that go into the
production of grade A bacon, the report continues :
That the bacon committee in Great Britain is composed of British distributors who work m close collaboration with the Canadian packers, discloses, in our opinion, a condition m the marketing of Canadian bacon in Great Britain which demands the attention of an independent body with government authority in order that the producers' interests may be properly protected.
I think that is extremely important. They go on to say:
We recommend that a board be set up to supervise the live stock and meat production industry. This board should, in our opinion-
I would say here, this board or some other body:
immediately on its appointment make a earetul survey of the situation in the British market with a view to:
(a)	Ascertaining to what extent Canadian packers and the British bacon committee operate as a mutual body; and
(b)	To revise the grading of export bacon so as to ensure the highest possible price for Canadian selects and bacon hogs; and
(c)	To secure such a system of distribution as will satisfactorily meet the requirements of the British trade, while at the same time ensuring full and adequate protection to the producer of hogs in Canada.
As far as I know that has not been done. I am bringing it to the attention of the minister and of his colleague the Minister of Agriculture. I urge them to examine the reporl of the price spreads commission in this regard and to make a searching investigation of these facts, because the whole hog industry of Canada, that is the interests of the primary producers, is definitely adversely affected by the present method of marketing bacon in England. I had not any idea that this question would come up to-night, and'I have not in my hand certain statistics, I will, however, quote from memory, and I am pretty sure that my memory will not be much astray. I believe the facts I am about to give will surprise the committee.
After this report was made I carried on some further investigations of my own to satisfy myself on this point because I believe that the price of hogs-and incidentally the price of cattle, though we are talking about bacon and hogs just now-is of tremendous importance not only to the farmer but also to the economic structure of Canada. I will tell the committee why I say so. One thing that is evident above everything else in our discussions of the monetary question, unemployment and so on is that there is a shortage of purchasing power in the country, particularly among the farmers. Inasmuch as the farming community constitutes nearly fifty per cent of our population it follows as day
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follows night that if you can raise the prices of their products you increase the purchasing power of the farmers. In raising the prices of hogs we would be making one of the major, underlying, fundamental contributions towards recovery in this dominion.


Mr. HANSON:: Would the hon. gentleman permit a question? I gather from his remarks that he thinks it would be necessary to import Danish hogs in order to produce English breakfast bacon in Canada. Is that my hon. friend's idea?


Henry Herbert Stevens: I was not talking about that.


Olof Hanson: The hon. gentleman mentioned hogs being shipped in from Denmark.


Henry Herbert Stevens: I am entirely in favour of importing pure bred stock from either Denmark or Sweden, both of which are excellent types. I am entirely in favour of that being done in order to improve the stock in Canada, but I am trying to emphasize this: With the stock we have, without waiting for the improvement of the stock by the processes suggested, we can make a substantial contribution to the correction of this situation.
This is what I found, to which I was about to refer: I took Mr. McLean's statement that the price of Canadian hogs was fixed according to the price of bacon in the British market. Of course he went on to say that there were certain costs, spreads and so on which helped to determine the price, but the point was that it was the price we received on the British market which fixed the price of our hogs. Taking that as a basis I made an investigation; I said to myself: Well, if that applies to Canada it must apply also to Denmark and Holland, two of our chief competitors, and to other countries. I was able to get comparative figures from Denmark and Holland, and this is what I found: I have long sheets of these figures covering a period of two years, and the Danish farmer was receiving for his hogs about six,- seven or eight cents a pound more than the Canadian farmer was receiving, using the same ratio in each case. The Dutch farmer received from three cents to five or six cents a pound more. The average for two years showed that these farmers received about 4J cents per pound more for their hogs than did the Canadian farmer. There would have to be a slight _ deduction made in one case and an addition in another. In the case of Holland, which was the most comparable country with Canada, Holland was on a gold basis and there was the question of freight, but even if we make those allowances, it would vary only slightly the figure I gave a moment ago.

What I am coming to is this: Here in Canada we accept from the packers a dictum, if you like, a definite determining factor that fixes the price of hogs. It is not the government; it has nothing to do with the government. It is not parliament; parliament has nothing to do with it. The bare fact is that the price of bacon in England is so and so and the price of hogs in Canada will bear a certain relation to that price. Even accepting it on that basis we have a right to demand that the Canadian farmer should receive as fair a proportion of that British pound or dollar, as the case may be, as does the Dutch or Danish farmer, and that is not the case to-day.
I have gone into this matter in this way to demonstrate that in my opinion-and I have worked it out with the assistance of some very able statisticians-this runs into enormous sums of money. From memory I hesitate to intimate what the figures are, but they amount to millions and millions of dollars a year that I firmly believe the Canadian farmers at least are being deprived of, if not defrauded of, by the practice in force at the present time. In this report we have the finding, which as I recall it was fairly unanimous if not entirely so, that the government or some authority created by parliament should go into this whole question for the purpose of seeing that the Canadian farmer gets a fair price for his hogs. He is not receiving that fair price to-day. It is easy for statisticians representing the packers to say there is so much cost for this, so much for that and so much for the other thing, and then show a fraction of a cent a pound profit spread over all their operations. That is quite simple, but it is not the whole story. We have all the facts and figures in the report. Every table of statistics submitted shows that prices of farm products have dropped lower than those of any other major schedule. During the past six years, when the farmer has been subjected to the most difficult times of his history, the packers made more money than they ever did before. That is the point. Oh, I know the answer to that, that if you took all those profits and divided them among the millions of farmers, what would it amount to? That is not the point. On reflection we must always remember that when Canada Packers were organized in their present form they gathered in a number of independent packing concerns of which I think six were closed down, representing an investment of some millions of dollars. All that overhead is now taken out of the price of processing the hogs, but that plant is not operating.

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*Some of those great plants, which cost millions of dollars, such as the plant at Ingersoll, a portion of the Davis plant, and others of that kind, are used merely as storage yards. But the entire capital cost of the plants that were closed down remains in the capital structure, and the plants operating at present must provide through their processing charge the overhead for the whole structure.
In addition to that, the record shows that Canada Packers have created a reserve which in another five years will completely wipe out all the old investment, including that in the closed plants as well as the investment in the operating plants, as well as paying back dividends for some years, and of course they have also paid very handsome dividends and bonuses all through this period. Now I am not attacking a concern for being successful, but when that concern is so fabulously successful as it has been in the past five or six years during a time when the farmers suffered more than at any other time, that fact is worthy of consideration.
In the second place I say that they and they alone fix the price of hogs. No government body does it; the Department of Agriculture, the Department of Trade and Commerce, the provincial governments, the dominion government none of them has a word to say, but at ten o'clock every morning the price is fixed, fixed by virtually the one man, and fixed, as he says, on the basis of the price of bacon in England.


William Daum Euler: Is it really a fact that it is
fixed on that basis?


Henry Herbert Stevens: Yes, he swears to it. I
have it before me somewhere. This is not the exact item I was going to quote, but this refers to it:
Mr. McLean: You see if the British market advances the Canadian price here goes up immediately, and if the market declines, the Canadian price goes down immediately; and the hogs are bought on the basis of the English market practically all the time. Kemember that is not an absolute rule, because there are a hundred variations to it. But the variation from the export basis is always small.
There is another quotation, which for the moment I cannot put my finger on, in which he makes it even more definite than that. However, I think that will serve the purpose for the moment.
Therefore I say in the second place, the price of hogs being fixed on the basis of the price of bacon in England is a very serious matter, but the most serious of all is the British bacon committee. That committee sits once a week and determines what the price of Canadian bacon on the British market shall
Intelligence
be. There is no open market for Canadian bacon in Great Britain. Lest I should be misunderstood let me say at once that I do not wish to disparage the value of the British market to Canada; it is of tremendous importance, and we ought to cooperate with the British distributor in every possible way. I am not suggesting that we should do anything foolish or reckless, but I say that we have a right, in the interests of the producers of hogs in this country, whose price is subject to fixation in England, to have something to say on the fixing of that price. At the present time we have nothing to say. As is recommended in the report, the whole question should be carefully examined into. This should not be done in any reckless way; it should be done with great care. I understand that the minister is going over to England this year, and I think it is wise that he should. I suggest to him that while he is there he should look into this whole matter. He should not place himself wholly in the hands of the bacon committee; that might be more disastrous still. But if he goes over there suitably informed on the whole subject I believe that he will be able, with his well known sound common sense to see through the whole business.
I deprecate vigorously the restrictions that have been placed against independent exporters. I believe that there has been some improvement in that respect in the last year, but I am convinced that there is not the freedom of marketing which there ought to be. I believe that we should encourage exporters such as Schneider, Dumarts, and other smaller exporters, many of whom have established a reputation which we can well be proud of and whose bacon is equal to the best foreign bacon on that market.


William Daum Euler: Do they come under the control of that committee?


Henry Herbert Stevens: Speaking as to the past, I believe they were absolutely under its control. That statement may have to be modified as far as last year is concerned; I cannot speak as to that.


Mr. FAIR:: I wish to endorse the remarks of the hon. member who has just taken his seat, having lived* quite a number of yearns in the west where they raise hogs, and in a district which has done quite a lot to improve its breed of hogs in the past ten years, so much so that at the last Toronto Exhibition two of our boys took home the bacon for the swine judging competition. A few years ago I remember a number of my neighbours and myself taking hogs to the stockyards at Paradise Valley and selling them for 2| and
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2i cents a pound, the best hogs you could get. At the same time we learned that six executives of one packing plant were drawing $70,000 a year each yet we were told we were getting more than was coming to us. I think the matter raised by the hon. member for Kootenay East (Mr. Stevens) as to the grades permitted to be exported, that is bacon and selects, is a very good suggestion and should be followed up very carefully. If the proper officials will do their share to take the hogs out of the hog marketing business the farmers and those dependent upon them will be far more successful.


Mr. NEILL:: Before this item carries I wish to raise what may be a point of order, but perhaps I might bring it within the ambit of the item under consideration by asking the Minister of Trade and Commerce how we come to be on estimates this evening in defiance of the announced program last Friday night. This is the program as announced:
Mr. Bennett: What business will be taken up on Monday?
Mr. Mackenzie (Vancouver)-
Who apparently was leading the house for the government-
-We are prepared to proceed with any of the bills on the order paper.
It is a well known rule, although I cannot point to any paragraph in Beauchesne or Bourinot, but a rule sanctioned by perhaps forty years of usage in this house, that the last thing at night the leader of the opposition asks what is to be the program for the next day, and is advised by the minister who is leading the house. A habit had grown up to some extent-it was worse in the last house and it is worse in this-of departing from that procedure and taking up any item which happens to be convenient. This is not the first or second or third time this session that either estimates have been taken up when none was foretold, or certain estimates have been taken up that were not mentioned. It is absolutely essential that there be some faith in these matters. It is impossible for 245 men to be in the house all the time; they must go and attend to their letters and other business; a half empty house often does more efficient work, because the men are there who are interested in the subject, and if we are all to sit here all the time this will make for a great deal of delay. The hon. member for Kootenay East (Mr. Stevens), in the midst of his very able remarks a few minutes ago, said that he had not the slightest idea that this was coming up to-night or he would have had his data ready. Are we all to sit here without the slightest idea whether an item is coming up, and bring our notes morning,

noon and night in case it should? Does that make for cooperation? The government may say: Oh, well, we are going to do it and what are you going to do about it? But not a day passes without some member of the government having to ask the consent of the house- and that means unanimous consent-to pass a bill through some stage. The Minister of Finance did this on Friday night. Any one man can block it. I am not suggesting that as a threat or a hold-up or a filibuster, for I want to go home. But this is an illustration of the truth that we need cooperation; cooperation can be founded only upon good faith, and good faith I take to mean that when it is announced that the program will be so and so the announcement should be adhered to. I would suggest that whoever is leading the house for the government make a note of that, and that when a statement is made it be adhered to. If we are going to take estimates, say so; and if we are going to take estimates, indicate which estimates, and then adhere to that program.


William Daum Euler: I was not in the house the other night when the announcement was made, but perhaps I should take any responsibility for what may appear to my hon. friend as a breach of faith. Certainly there is no intention whatsoever of taking any advantage of the committee in bringing up these estimates to-night. The explanation, as a matter of fact, is very, very simple indeed. It may be known to my hon. friend that there is some intention on the part of some of us to proceed abroad during the summer; as it happens, one of the officials of the Department of Trade and Commerce intends to proceed to Great Britain in the course of a very few days, and it was thought desirable, before he leaves, to take the estimates of the branch with which he is particularly concerned. That is the simple explanation. I would also say that if the committee feel that any advantage is being taken of hon. members and they prefer that we rise and report progress, I am quite willing to do so, but it never entered my mind that we were taking advantage of anyone in connection with the matter.


Alan Webster Neill: 
William Daum Euler: I do not wish to delay matters unnecessarily, but the minister has been trying to get his estimates before the committee for some time. They have been announced repeatedly, at least on three former occasions, as coming up, but because of the length of the debate on some other matter it was quite impossible to bring on the estimates on the day arranged. Now it is getting to the time when it becomes almost imperative that something 'be done about the matter, and that is why these estimates were brought up to-night. If, however, the committee think there is any breach of faith, I do not wish to continue with these estimates to-night.


Alan Webster Neill: It is the hon. gentlemen who have not come back from Toronto or elsewhere who would probably have more of a grievance.


Richard Bedford Bennett: Possibly, Mr. Chairman, we have overlooked the fact that the Prime Minister said the other evening that we should be prepared to take up any items on the order paper because we had reached that stage of the session. The other evening when the hon. gentleman who was leading the *house said that we would take up any bills on the order paper I thought he had in mind anything on the order paper, as the Prime Minister had said on the previous evening, and this evening when it was mentioned to me that the discussion on the Bank of Canada Act was to be discontinued and Trade and Commerce estimates taken up, I am bound to say that I did not think this strange because when we are within perhaps two weeks or so of the end of the session the government usually says at the adjournment, when asked what will be the business of tomorrow: You must 'be prepared to take up any items on the order paper. I am sure that is what the minister leading the house the other evening had in mind when he said, "any bills on the order paper." We usually differentiate between estimates and bills, but in reality what we are now doing is preparing for the supply bill. If I had pressed the minister more closely the other evening he would no doubt have said that we must be prepared also to take up estimates, but that would not have answered the question of my hon. friend from Comox-Albemi (Mr. Neill) as to what particular estimates.


Alan Webster Neill: The right hon. gentleman may have known what was in the mind of the
hon. member for Vancouver Centre (Mr. Mackenzie), but unfortunately I only know what he said, and if one looks at the Prime Minister's remarks the night before it will be seen that he said "any bills on the order paper." I would have been quite satisfied if he had said that they were going into estimates tonight. But why not say so?


Daniel (Dan) McIvor: I can see a redeeming feature in this, if it works from the other end and gives those members who do considerable talking better control of their terminals so that we can speed up the business of the house.


James Houston Spence: I would ask the minister how many trade commissioners we have, and what is the total cost, including office expenses and so on.


William Daum Euler: There are thirty-six trade commissioners' offices and thirty-five trade commissioners, at a total of S733.400.


James Houston Spence: I was wondering if there were not some more economical system that we could adopt. We have so many trade commissioners and trade commissioners' offices all over the world. Surely we could get some man over there of high integrity to whom independent packers could send their stuff in competition with the other big packers, and who would help them realize a better price. Competition is the life ol trade. Perhaps we are confining our business too much to one line.


Jean-François Pouliot: Why not have peddlers, to please the hon. gentleman?


Richard Bedford Bennett: I should like to disabuse the mind of the hon. member for Winnipeg North (Mr. Heaps) as to there being an embargo on Russian trade. Apparently the reiteration of what took place has no effect on him. The former Liberal administration, it will be recalled, terminated diplomatic relations with Russia, but they did not in any way deal with the trade situation. The late government passed a statute empowering the governor in council to prohibit importations from any country that had not been a party to the treaty of Versailles, having regard to the labour provisions of that treaty, and subsequently there was a prohibition by order in council on the importation into Canada of anthracite coal, pulpwood, certain kinds of furs, and one other item. The reasons were obvious. These goods were being dumped on this market. There is no reason why trade with Russia may not be carried on to-day just as with any other country, or why Russia could not carry on trade with Canada just as any other country trades with Canada, except

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with respect to the commodities I have mentioned. The reason for those items being dealt with as they were has been explained so frequently to the committee that I shall not bother restating it.


Abraham Albert Heaps: All I referred to was the embargo on trade. I made no further reference.


Richard Bedford Bennett: There is no embargo.


Abraham Albert Heaps: Then why are we not doing trade with Russia?


Richard Bedford Bennett: We are in certain commodities.


Abraham Albert Heaps: Then there is an embargo on other commodities. I did not say that there was an embargo on everything, but I say that the government, if they so desired, could remove the embargo which now exists. Now that the matter has been brought up again, perhaps the minister would inform the committee against what goods coming from Russia there is an embargo.


William Daum Euler: If you wish to call it an embargo, it is imposed against timber, asbestos, pulp and dressed furs.


Richard Bedford Bennett: Undressed furs.


William Daum Euler: Undressed furs come in. There have been serious protests from manufacturers in this country against dressed furs coming in.


Richard Bedford Bennett: Originally it was the whole class of dressed furs. Then there was a modification of it.


Abraham Albert Heaps: Have not the breaking off of diplomatic relations with Russia and the embargo, or call it what you will, had the effect of almost entirely disrupting trade between Canada and Russia?


William Daum Euler: Perhaps I could answer that by saying that the trade is not so large as it might be if the embargo, if you call it such, were not applied. There is a certain disruption of trade, but I cannot give any figures at the moment.


Abraham Albert Heaps: Has the minister any figures that would show the trade between this country and Russia in the last few years?


William Daum Euler: No, I have not.


[Stage Direction]
Item agreed to.
An act to place Canadian coal used in the manufacture of iron and steel on a basis of equality with imported coal, administration of, $600.
John Ritchie MacNicol: Could the minister give
is an explanation of this item?


William Daum Euler: This is to cover administrative expenses.


John Ritchie MacNicol: At head office?


William Daum Euler: Yes.


[Stage Direction]
Item agreed to.
The Canada Grain Act, including management, operation and maintenance, also equipment of elevators, administration of, $1,927,200.
Mr. PERLEY (Qu'Appelle):: Could the
minister give us some of the particulars with respect to the distribution of seed grain in Saskatchewan, such as the amount required by the provincial government last spring, the price at which No. 1 northern was distributed, and also the price of oats, barley and rye?


William Daum Euler: I think that would properly
come under the Department of Agriculture. It has nothing to do with the administration of the grain act.


Ernest Edward Perley: As long as
an item is kept open in the Department of Agriculture under which this could be discussed.


William Daum Euler: I would not object to discussing it, but I have no information.


[Stage Direction]
Item agreed to.
Dominion Bureau of Statistics, $375,200.
Henry Herbert Stevens: Is the bureau of statistics still housed in that old saw mill?


William Daum Euler: It still is.


Henry Herbert Stevens: Some two years ago I
remember that conditions in this building were investigated and I think it was generally accepted that new quarters should be provided as soon as possible. I know the conditions in that building are certainly not fit for continuous occupation as an office building. This is more a humane matter than anything else, and I think some action ought to be taken.


William Daum Euler: I quite agree with my hon.
friend.


Mr. LAPOINTE (Quebec East):: Let us
build the supreme court first.


Richard Bedford Bennett: A substantial sum of
money was spent on improvements.


William Daum Euler: Yes, but conditions are
pretty bad.


[Stage Direction]
Item agreed to.
Exhibitions and fairs, $166,400.
John Ritchie MacNicol: Does this item apply to
work in connection with fairs in the old country?

Supply-Trade and Commerce


William Daum Euler: Perhaps I could read my
hon. friend a description of the work. This amount is required for shows and window displays when space has to be purchased in the British empire; for the purchase of goods in Canada for exhibition purposes; for the purchase of material used in the exhibition displays, including lumber, paint, oil, et cetera; for the removal of goods from Canada to London; for rentals, travelling expenses of staff, rental of sites for the exhibitions, warehouse and cold storage plants, and other expenses in connection with the operation of this branch. I might give some of the functions of the exhibition branch if the committee so desires.


John Ritchie MacNicol: The minister referred to the purchase of goods. Would that be manufactured goods, canned goods and things of that kind?


William Daum Euler: These goods are largely supplied by the manufacturers, but I think these purchases would cover mostly food products which are displayed in the windows of different stores throughout Great Britain.


John Ritchie MacNicol: It applies also to fairs, such as the Glasgow fair? I visited that fair and I saw a large display of goods.


William Daum Euler: That would come under this vote.


Harry James Barber: What amount was spent in Canada and in the British isles last year?


William Daum Euler: There would be administration expenses in Canada.


Richard Bedford Bennett: There are also administration expenses in Great Britain.


William Daum Euler: Yes.


Harry James Barber: We have been spending
S10,000 or $11,000 per annum in this country; how much do we spend in the British isles?


William Daum Euler: I regret to say that the
amounts are not segregated. There is an item of $33,880 for personal services, but I cannot say how much of that was spent in Canada and how much elsewhere. The item includes: Ottawa office, sundry expenditures, $1,920; warehouse at St. Catharines, $1,200; purchase of new exhibits, including grains, grasses, fruits and so forth, $3,000; exhibitions in the British isles, $49,965.30; general expenses, rental, land rates, taxes, water, maintenance, building, freight, wages, $23,434.70; expansion of cooperative policy to other empire countries, $6,000; participation in 1936 fairs, $15,000; participation in empire exhibition at Johannesburg, $30,000. I might say that we propose to increase that in the supplementaries. Then there is participation in the British empire trade fair, Hongkong, $2,000.


[Stage Direction]
Item agreed to.
Electricity and Fluid Exportation Act, administration of, $750.
Richard Bedford Bennett: Could the minister give the licences outstanding for the export from Canada of electricity, and to what extent electricity is being exported under such licences?


Mr. STIRLING:: Can electricity be exported from Canada through any other channel?


William Daum Euler: No; the federal government has complete control.


Grote Stirling: This would be the vehicle used?


William Daum Euler: Yes.


Richard Bedford Bennett: Could the minister give us the names of the companies that have licences and what amounts they are authorized to export?


William Daum Euler: I give the following particulars for 1934-35 in connection with the Hydro Electric Power Commission.


Richard Bedford Bennett: It would be well to have them all on Hansard.


William Daum Euler: The following are the figures for the various companies mentioned:
Hydro Electric Power Commission, Toronto, Ontario
Amount of licence in kilowatts.. ..	45,000
Amount of licence in horse power..	60.322
Average kilowatts exported	 42,827
Average horse power exported.. ..	57,409
Amount of licence in kilowatt hours. 394,200,000
Kilowatt hours exported	 375,164 600
Export tax	$112,549.38
Hydro Electric Power Commission, Toronto, Ontario (Surplus)
Amount of licence in kilowatts.. ..	80,000
Amount of licence in horse power. .	107,239
Average kilowatts exported	 21,368
Average horse power exported.. ..	28,643
Amount of licence in kilowatt hours. 700,800,000
Kilowatt hours exported	 187,179,343
Export tax	$56,153.81
Cedar Rapids Manufacturing and Power Company, Montreal, P.Q.
Amount of licence in kilowatts.. ..	75,000
Amount of licence in horse power..	100,536
Average kilowatts exported	 36,897
Average horse power exported.. ..	49,460
Amount of licence in kilowatt hours. 657,000,000
Kilowatt hours exported	 323,221.439
Export tax	$96,966.42

Supply-Trade and Commerce
Canadian Niagara Power Company, Niagara Falls, Ontario
Amount of licence in kilowatt hours. 45,000 Amount of licence in horse power..	60,322
Average kilowatts exported	 36,151
Average horse power exported.. ..	48,460
Amount of licence in kilowatt hours. 394,200,000
Kilowatt hours exported	 316,686,121
Export tax	$95,005.86
Canadian Niagara Power Company, Niagara Falls, Ontario (Surplus)
Amount of licence in kilowatt hours. 20,000 Amount of licence in horse power..	26,810
Average kilowatts exported	 2,866.24
Average horse power exported.. ..	3,842.15
Amount of licence in kilowatt hours. 175,200,000
Kilowatt hours exported	 25,108,300
Export tax	 $7,532.49
Western Power Company of Canada Limited, Vancouver, B.C.
Amount of licence in kilowatts.. ..	10,000
Amount of licence in horse power..	....
Average kilowatts exported	 1.47
Average horse power exported....	1.97
Amount of licence in kilowatt hours. 87,600,000
Kilowatt hours exported	 12,900
Export tax	 $3.87
Ontario & Minnesota Power Company, Minneapolis, Minn., U.S.A.
Amount of licence in kilowatts.. ..	3,000
Amount of licence in horse power..	4,021
Average kilowatts exported	 1,557
Average horse power exported.. ..	2,087
Amount of licence in kilowatt hours. 26,280,000
Kilowatt hours exported	 13,636,800
Export tax	 $4,901.04
B.C. Electric Railway Company, Vancouver, B.C.
Amount of licence in kilowatts.. ..	5,000
Amount of licence in horse power..	6,702
Average kilowatts exported	 19.06
Average horse power exported.. ..	24.21
Amount of licence in kilowatt hours. 43,800,000
Kilowatt hours exported	 158,220
Export tax	 $47.46
Maine & New Brunswick Electric Power Company, Presque Isle, Maine, U.S.A.
Amount of licence in kilowatts.. ..	2,500
Amount of licence in horse power..	3,351
Average kilowatts exported	 1,463.35
Average horse power exported.. ..	1,961.59
Amount of licence in kilowatt hours. 21,900,000
Kilowatt hours exported	 12,818.910
Export tax	 $3,845.67
Fraser Companies, Limited Edmundston, N.B.
Amount of licence in kilowatts.. ..	1,500
Amount of licence in horse power..	2,011
Average kilowatts exported	 647.8
Average horse power exported.. ..	868.4
Amount of licence in kilowatt hours. 13,140,000
Kilowatt hours exported	 5,675.000
Export tax	  $1,702.50
Northern B.C. Company, Stewart, B.C.
Amount of licence in kilowatts....	25
Amount of licence in horse power..	33.51
Average kilowatts exported	 4.54
Average horse power exported....	6.08
Amount of licence in kilowatt hours.	219,OQO
Kilowatt hours exported	 38,750
Export tax	 $11.92
Northport Power & Light Company, Rossland, B.C.
Amount of licence in kilowatts.. ..	1,500
Amount of licence in horse power..	2,011
Average kilowatts exported	 28.38
Average horse power exported....	38.04
Amount of licence in kilowatt hours.	13,140,000
Kilowatt hours exported	 248,583
Export tax	 $74.49
Maritime Electric Company, St. Stephen, N.B.
Amount of licence in kilowatts.. ..	600
Amount of licence in horse power..	804.29
Average kilowatts exported	 96.05
Average horse power exported.. ..	128.76
Amount of licence in kilowatt hours.	5,256,000
Kilowatt hours exported	 841,440
Export tax	 $252.44
Detroit & Windsor Subway Company, Windsor, Ontario
Amount of licence in kilowatts.. ..	300
Amount of licence in horse power..	402.14
Average kilowatts exported	 27.99
Average horse power exported....	37.52
Amout of licence in kilowatt hours.	2,628,000
Kilowatt hours exported	 245,200
Export tax	 $73.56
Gatineau Electric Company Limited, Ottawa, Ontario
No export.


Grote Stirling: What is the total amount of horse power exported?


William Daum Euler: The total amount exported is 1,391,883,980 kilowatt hours.


Mr. STEWART:: Has the minister the horse power?
Maine & New Brunswick Electric Power Company, Presque Isle, Maine, U.S.A. (Surplus)
No export.
Southern Canada Power Company, Montreal, P.Q.
Amount of licence	in kilowatts.. ..	500Amount of licence	in horse power..	670.24Average kilowatts	exported	
42.06Average horse power exported.. ..	56.38Amount of licence	in kilowatt hours.	4,380,000Kilowatt hours exported	
368,448Export tax	
$110.53


William Daum Euler: I do not have it before me.


Richard Bedford Bennett: What is the revenue?


William Daum Euler: The revenue is $305,709.67.


Richard Bedford Bennett: Are there any applications for licences now?


William Daum Euler: There are no new ones pending.


[Stage Direction]
Item agreed to.

Supply-Trade-Motion Picture Bureau
Electricity and gas inspection service, $220,300.
Richard Bedford Bennett: This is merely administrative. You collect the fees and this is advanced for it.


William Daum Euler: Yes. There is a considerable profit on the item, amounting to $115,000.


[Stage Direction]
Item agreed to.
International customs tariffs bureau, $2,700.
James J. Donnelly: Will the minister explain this?


William Daum Euler: This is Canada's contribution to a bureau which is maintained at Brussels for providing information with regard to the tariffs of all countries.


Richard Bedford Bennett: Like the agricultural bureau at Rome?


William Daum Euler: Yes.


[Stage Direction]
Item agreed to.
Motion picture bureau, $40,800.
John Ritchie MacNicol: Does the department plan to extend the work done by the motion picture bureau?


William Daum Euler: Only in the matter of providing sound. There is an increase of $800.


John Ritchie MacNicol: I went to the bureau where these pictures are being exhibited in Ottawa and it struck me that a great deal of good could be done if the pictures could be sent throughout the country. Many of them show the processing of various raw products from the very commencement. In the case of lumber, the process is shown from the log in the bush to the finished furniture. These pictures are not only very educative but indicate the wide diversity of activities in which the Canadian people are engaged in processing raw products of various kinds. What is the department doing to send these pictures all over the dominion?


William Daum Euler: These pictures go to practically all countries in the world, and perhaps the reason why they have not been seen more in our own picture houses in Canada is the fact that we did not have sound. Nowadays everything in connection with moving pictures is accompanied by sound, and we nre correcting that defect.


John Ritchie MacNicol: If there were some way of showing them in school houses, in small suburban communities or in small communities in the country, this would be of great benefit to the people. The sound would not be necessary. Electrical apparatus could be taken to show the pictures and this would give the people in the rural communities an
12739-224	[DOT]
idea of the great benefits that are derived from the urban centres where all these raw products are developed to the finished state for final sale.


William Daum Euler: We send them out for educational purposes, but precaution has to be taken to see that they are not admitted to places not properly protected as regards fire.


Hugh Alexander Stewart: Can the minister give a general statement of the scope of the activities which the department pursues in its work, particularly in	connection with motion
pictures?


Mrs. BLACK:: One year the Canadian
National gave me a dozen or fifteen moving pictures to take north. They included a great many scenes in the east: Nova Scotia during apple blossom time, New Brunswick hunting scenes, and various hunting and other scenes in Quebec. I had them shown in Mayo, White Horse and Dawson.


William Daum Euler: The organization and the
functions of this branch are as follows: The branch was organized in 1917. The chief functions are: (1) to produce and circulate throughout the world motion pictures and pictorial material such as photographs, photographic enlargements, films and lantern slides, transparencies, et cetera, designed to disseminate information about Canada and to advertise the resources, industries, products, scenery, tourist attractions and other aspects of the dominion as a means of developing trade and tourist travel and to make Canada better known to people of other countries; (2) to operate as a central organization for the production of all kinds of motion pictures, photographic material and pictorial displays for all departments of the dominion government and allied organizations; (3) to act as technical consultants to all government departments and allied organizations in matters pertaining to motion pictures, photography and the purchase, use and upkeep of motion picture and photographic equipment; (4) to cooperate with the provincial governments, railways, steamship companies, tourist bureaux and similar organizations in the production and distribution of films and pictorial matter to be utilized for the development of trade, tourist travel, et cetera; (5) to furnish information to government departments on the motion, picture industry and to cooperate with the motion picture industry in matters of mutual interest to the government, the industry and the general public.


Hugh Alexander Stewart: Just to complete that:
through what channels are the distributions made?

3514	COMMONS
Supply-Trade-Motion Picture Bureau


William Daum Euler: Does my hon. friend desire
the countries or territories?


Hugh Alexander Stewart: The channels through
which the distribution is made. And while the minister is considering that, to what extent, if any, does this branch cooperate with the tourist branch in the attraction of tourists? The work which they carry on seems to a certain extent a duplication of this.


William Daum Euler: I cannot say that there is
any particular relationship between the work of the tourist branch and this bureau.


Richard Bedford Bennett: There should be.


Hugh Alexander Stewart: I understood the minister to say that they cooperated with the tourist branch for the attraction of tourists, and I was just wondering through what channels they make distribution for that purpose.


William Daum Euler: We do, by supplying a
number of films, certain films which they find useful.


Hugh Alexander Stewart: Supply the tourist
branch?


William Daum Euler: So I believe. The territories in which films are in circulation are:
Australia, New Zealand, Tasmania, 150.
Austria, Czechoslovakia and other central European countries, 84.
Belgium, 31.
Canada, 1,215.
China, 51.
France and Switzerland, 51.
Germany, 120.
Greece, Turkey and the Near East, 28.
Hawaiian Islands, 20.
Holland, 51.
Italy, 70.
Japan, 30.
Norway, Sweden, Finland, Denmark, 62.
South Africa, 39.
South America, 100.
Straits Settlements and Netherlands East Indies, 12.
United Kingdom, 387.
United States, 3,216.
West Indies and Cuba, 36.
Or a total of 5,773 films.


Hugh Alexander Stewart: As to the extent to which these films are distributed in these countries, has the minister any information as to the number of showings or the use that is made of the films? It is all right to distribute them if they are kept in active circulation. I cannot think of any better channel or method of advertising Canadian production, Canadian scenery and Canadian conditions if these films are actually circulated, if they are working.


William Daum Euler: I cannot, perhaps, give entirely complete information. The films are handed

out to agencies. I do not suppose there is an accurate check-up as to just the number of times they are exhibited.


Richard Bedford Bennett: It is usual to check up the number of people who visit the theatres during the period films are shown. That is what commercial films do.


Donald Elmer Black: When I had the films I had to state exactly where they were shown and how many people were present. That was about eight years ago, I think.


William Daum Euler: I understand there is a record of that, but I do not have it before me.


Hugh Alexander Stewart: Do I understand the minister to say that as far as possible the distribution is made through the trade commissioners, say our trade commissioner in Australia?


William Daum Euler: All the trade commissioners have them.


Hugh Alexander Stewart: The films are distributed through them?


William Daum Euler: Yes.


[Stage Direction]
Item agreed to.
National Research Council, $500,000.
Richard Bedford Bennett: What increases in salaries have there been in that department since the first of the year?


William Daum Euler: The increase in salaries, less the five per cent, accounts for $54,038.45.


Richard Bedford Bennett: How is that money distributed? I have had some complaints about the unevenness of the increases. That is the reason I ask.


William Daum Euler: Just the increases or the total of salaries?


Richard Bedford Bennett: The increases. I mean raises in salaries.


William Daum Euler: Does my right hon. friend desire the names?


Richard Bedford Bennett: It does not make any difference. Just describe the office.


William Daum Euler: The secretary treasurer goes from $4,620 to $5,070; the assistant secretary treasurer, from $3,480 to $3,690; the head clerk, from $1,525 to $2,520-apparently that is merely a provision; the position has not been filled-principal clerk, no increase; another principal clerk, from $2,220 to $2,340; still another, from $1,425 to $1,980; clerks, grade 4, $1,800 to $1,860, $1,800 to $1,860, $1,500 to $1,650, $1,380 to $1,410; stenographers, grade 3, $1,560 to $1,620, $1,500 to $1,560, SI200 to $1,410; typist, grade 2, no increase;

Supply-Trade-National Research
office appliance operator, grade 3, SI,260 to SI,320; clerk, grade 2, $990 to $1,155, $900 to $1,110; stenographers, grade 2, $1,200 to $1,260, $1,140 to $1,200, $1,012 to $1,110; office appliance operator, grade 2, $1,140 to $1,200.


Richard Bedford Bennett: Perhaps the minister will say what is the total staff this year as compared with last year, the total personnel. I ask that because under civil government the particulars of this item are not shown.


William Daum Euler: Does my right hon. friend want the increases or just the total-


Richard Bedford Bennett: The total personnel.


William Daum Euler: It does not seem to be available just at the moment. Perhaps I might be allowed to place it on Hansard later.


Richard Bedford Bennett: I should like the personnel this year and last year and, of that number, how many received increases and how many did not.


William Daum Euler: The number on the staff of the National Research Council on April 1, 1935, was 126; the number on the staff on April 1, 1936, was 145. The number receiving increases, other than satutory increases, is thirty-three; and the additional number who will receive statutory increases this year is seventy-two. There are forty on the staff who will receive no increases this year.


Abraham Albert Heaps: I observe a reduction of some $22,000 in this item. I am not going to ask the minister why this reduction has been made, but I am interested in the general work and activities of our research bureau. I think we all realize the tremendous importance of the work that can be performed by an organization of this kind. Personally I am not very well acquainted with the work of the bureau, but I wonder if the minister is in a position to give this committee some information in a general way as to the work that is being done, what they have accomplished and what they are attempting to accomplish in the way of research work. I understand that changes were made in the staff last year, and I should like to know whether in the opinion of the minister we have the most capable staff we can get for the class of work they are asked to perform. If that is the case, can the minister give the committee such information as will give us at least some idea as to what progress is being made in the various -researches which have been undertaken.


Richard Bedford Bennett: An excellent report was issued only a week or two ago.
12739-224J	E!MD


William Daum Euler: My right hon. friend has anticipated what I was about to say. The work of the research council is fully described-in the annual report; perhaps my hon. friend might take time to read that. Probably the-hon. gentleman knows in a general way the-purposes of the council: general investigation, scientific development, and so on. Manufacturers, industrialists, farmers and others are invited to bring their problems to the council for investigation and report. Perhaps I might give one instance of a valuable work that has been done by the council in cooperation with the Department of Agriculture. I am told that they have developed a rustless wheat which in the course of another year or two can be pretty fully supplied to the wheat growers of Canada. If that is the case and this rustless wheat is a success it will certainly result in the saving of a tremendous amount of money. Last year, I believe, if it had not been for rust we would have had perhaps 200,000,000 bushels more of wheat. I am not quite sure that that would have been an unmixed blessing, however, when we have so much to sell.


John Ritchie MacNicol: I should like to ask the' minister if the research work carried on by the council in Ottawa is along the line of the' research work carried on by the provincial bureaux. As the minister knows, we have in Toronto a large research bureau at Queen's Park, with a substantial staff, to which the manufacturers contribute large sums of money. I suppose they take some of their problems there and I assume they bring some of them here. I have gone down to the bureau here to make a survey of what is going on, just for my own satisfaction, for we vote a large sum of money each year for the upkeep of this bureau. I was greatly impressed with the work being done in Ottawa, but I wondered what was being done with the results of this research work. Is any effort made to encourage industry to apply those results? Is some group of capitalists invited to erect a plant to make use of what has been found here as a result of this work? I remember quite well when the research bureau in Toronto was established; I was then in business,, and great things were predicted to the manufacturers when they were asked to contribute the initial $1,000,000 that was required in order to commence that work. I believe it was later when the bureau in Ottawa commenced operations.


William Daum Euler: No; I understand that Ottawa was first.

Supply-Trade and Commerce


Richard Bedford Bennett: Work was commenced
here but the building had not been constructed.


William Daum Euler: That is so.


John Ritchie MacNicol: I should like to know if the country has obtained the real benefits from this research work that has been carried on. I am convinced that the bureau is doing splendid work and should be encouraged to go further, but I should like to know whether the greatest possible results as far as employment or the investment of capital are concerned are obtained from the good work that .has been done by the bureau.


William Daum Euler: I am afraid I cannot make any comparison between the results obtained by the provincial organization and those obtained by the federal bureau. I am not familiar with the work of the provincial organization, and really not as familiar with the bureau here as I should like to be, because of lack of time. I believe, however, the Ottawa bureau was established first. We did not have the new building, but research work has been carried on for many years, and I think my hon. friend will know the line of work that is done. I do not know that I can say that the bureau originates certain processes and then hands them over to people who might enter into certain lines of manufacture as a result of that work, but manufacturers are encouraged to bring their problems to the research council, and I think they have been of considerable assistance.
I may say also that I think there is a tremendous scope for an institution of this kind to do a great deal of good in this country. I think also it will be found that the results are approximately commensurate with the amount of money we are willing to spend. This item is slightly reduced this year, as one hon. member stated a moment ago. I can only say that this is in line with the policy of economy, if you like to call it that, of this government. We felt that we had to restrict ourselves to a certain expenditure for the year, and frankly speaking that is why this item has been slightly reduced. I know there are some countries in the world, perhaps more particularly Russia, where millions and millions of dollars have been spent on research work, for which I think in the future they will be very well repaid. I hope that later *on this branch may be still further developed, because I think there is a great deal to be done in that direction.


Richard Bedford Bennett: I was going to ask the minister to what extent rustless wheat was
.	, j j *[) J,
developed at Winnipeg. Where was the work done?


William Daum Euler: I am afraid I cannot answer that question. Perhaps my hon. friend the Minister of Agriculture might give the answer.


Mr. GARDINER:: Rust resisting wheat
has been developed at Winnipeg, and the department hopes to distribute it next year. I have seen samples of it, which show up very much to advantage over marquis, reward and any other wheats that were grown.


Richard Bedford Bennett: Who developed it?


James Garfield Gardiner: The development was started at the time the hon. member for Melville (Mr. Motherwell) was Minister of Agriculture.


Richard Bedford Bennett: But I mean what scientist developed it?


James Garfield Gardiner: I cannot give the name offhand. There are strains at Winnipeg, Brandon, Saskatchewan university. Different men have been working on the matter at different places.


Richard Bedford Bennett: Was it the research council of Canada that did the work?


James Garfield Gardiner: I think the work was finally turned over to the research council after the vote had gone through the house and the laboratory was set up at Winnipeg through the activities of the Department of Agriculture.


[Stage Direction]
Item agreed to.
Printing of departmental publications, $95,000.
Richard Bedford Bennett: How is the reduction brought about?


William Daum Euler: We felt that some of them might be eliminated in the interests of economy.


Grote Stirling: Does this apply to all departments?


William Daum Euler: Just the Department of Trade and Commerce.


[Stage Direction]
Item agreed to.
Publicity and advertising in Canada and abroad, $54,100.
John Ritchie MacNicol: If this applies to the advertising of the researches made by the department, then it would be along the line I had in mind a few minutes ago, of what the research department is doing to encourage the manufacture of new lines in Canada.


William Daum Euler: It is not.

Supply- Trade and Commerce


John Ritchie MacNicol: What is it for? I see no reason why the results of research should be published if not to induce investment or better manufacture.


William Daum Euler: This relates to the advertising in newspapers and journals for the development of trade.


John Ritchie MacNicol: Advertising of what?


William Daum Euler: Advertising generally.


John Ritchie MacNicol: I thought we were on research.


William Daum Euler: No; we passed that; we are on item 276.


Richard Bedford Bennett: The minister will
remember that there was much discussion about this item. It was thought at one time that an appropriation of $100,000 was not sufficient for the purpose. If this covers the work of advertising abroad it is wholly inadequate, but I take it that this is in addition to the sum placed at the disposal of the high commissioner for advertising in Great Britain and Europe.


William Daum Euler: My right hon. friend is quite correct. There is a large sum, perhaps $200,000-I do not remember exactly-in the hands of the Canadian High Commissioner in London.


[Stage Direction]
Item agreed to.
Weights and measures inspection service, $383,300.
Ernest Edward Perley: Why the increase?


William Daum Euler: Because it is needed, and I
may say that this branch produces a very handsome profit, a profit of $90,000. But the work has increased; that is why there is an increasing expenditure,


Ernest Edward Perley: Is there a
full staff of inspectors in all the different divisions?


William Daum Euler: Yes.


Ernest Edward Perley: How are they appointed?


William Daum Euler: By the civil service commission.


Richard Bedford Bennett: The minister no doubt
recalls that during the progress of the investigation by the price spreads committee and commission it was apparent that there had been considerable abuse, and it was intended to strengthen this service in order that there might not be a repetition of those [DOT] offences against the act which wTere punished during the last twelve or fifteen months. To what
extent has the work gone forward? The minister will remember that a question was put on the order paper yesterday with regard to the matter. Have additional inspectors been appointed, and to what extent are efforts being made to enforce the law? There were very bitter complaints consequent upon the revelations that took place a year ago in connection with short weight, and the type of scale being used in some cases. The minister's predecessor took certain steps looking towards the improvement of those conditions. There are few things that concern the people more vitally than this.


William Daum Euler: Some time ago in reply to
a question in regard to prosecutions I gave some figures to the house. I do not know whether that might be regarded as an indication of the vigilance of the branch. Quite frequently I sign authorizations for prosecutions under the Weights and Measures Act. I do not know whether that is necessarily an indication-


Richard Bedford Bennett: No; the essence is prevention.


William Daum Euler: But I think prosecutions are a means of prevention.


Richard Bedford Bennett: I agree.


William Daum Euler: The more those who are in business know that violation will mean prosecution, the greater the likelihood that there will not be offences. Prosecutions are ordered as they seem to be needed. If it is a more or less trivial matter there is a warning, after that prosecution, and prosecution in every case where the offence seems to be flagrant.


Richard Bedford Bennett: There is a small fee collected for testing scales, is there not? There used to be.


William Daum Euler: There is still a fee.


Richard Bedford Bennett: To what extent is the
branch self-sustaining?


William Daum Euler: As I said, there is a profit
of something like $90,000.


Richard Bedford Bennett: It seems to me that great vigilance should be exercised in testing scales, because with the best intentions in the world men sometimes find themselves with scales that are inaccurate, and if the inspectors receive a small fee for testing once a year and locking or marking the scale, it seems to me very important that that work should be stimulated and maintained. The essence of the whole conduct of the Weights and Measures Act is that there should be inspection

Supply-Trade-Miscellaneous
and that that inspection should be adequate, which means that the scales should be inspected at least once or twice a year.


William Daum Euler: They are inspected once a
year.


Mr. CAMERON (Cape Breton):: Is any provision made by the department for furnishing public weigh scales in towns and municipalities?


William Daum Euler: No, not by the department.
Item agreed' to.
Port of London authority, $2,233.82.


James J. Donnelly: Will the minister explain this?


William Daum Euler: It is the annual payment to the port of London authority for defrosting facilities at Surrey dock for the Canadian government, as approved by order in council P.C. 1544.


Grote Stirling: What do they defrost?


William Daum Euler: Beef and poultry.


[Stage Direction]
Item agreed to.
International bureau of exhibitions, $1,200.
Mr. BBNNEiTT: How was the minister able to reduce this item? I thought there was a fixed fee which countries of a certain class pay.
William Daum Euler: It is owing to a difference
in exchange, I am informed.


[Stage Direction]
Item agreed to.
Miscellaneous-to provide for carrying into effect sections two and three of chapter 26 of the statutes of 1934, when the said sections came into force on August 1, 1935, the said statute being an act to amend the Canada Grain Act, whereby a statutory grade was established for Garnet wheat, and the statutory grade "No. 2 Manitoba Northern" was revised to exclude Garnet wheat by substituting "Marquis or equal to Marquis" for "red spring wheat of good milling quality" and to facilitate the efficient and orderly marketing of wheat now graded as No. 2 Manitoba Northern by providing that in respect of any such wheat which on the 31st July, 1935, was in elevators licensed under the Canada Grain Act, the governor in council may on the recommendation of the chairman of the board of grain commissioners indemnify any holder or owner thereof, for loss resulting directly from the revision of the statutory grade No. 2 Manitoba Northern aforesaid, $1,500,000.
William Daum Euler: This is a large sum which
is payable under the statute. It is merely revoting an amount which was voted last year, which was not paid then but which should be paid this year, in connection with garnet wheat.


Ernest Edward Perley: I think we
should have some information on this. Is this the amount that was paid to reimburse the elevator companies for the garnet wheat they had in store?


William Daum Euler: If my hon. friend will look at the details, the whole explanation is given there better perhaps than I could give it. It is a revote from last year.


Richard Bedford Bennett: Have any sums been paid under it yet?


William Daum Euler: I think not yet.


Richard Bedford Bennett: Should not some sums have been paid under it?


Ernest Edward Perley: Did the elevator companies ask for some adjustment on it?


William Daum Euler: I am informed that this wheat was scattered in many parts of the country and the board of grain commissioners had some difficulty in collecting the information necessary to enable them to make the payments, but they are still working on it.


Richard Bedford Bennett: What happened was that the board of grain commissioners came to Ottawa, and after certain action was taken with respect to garnet wheat, as indicated in the memorandum in the vote, they made a recommendation as to the appropriation by parliament of a sum of money to meet the situation that this memorandum discloses, but certainly I cannot understand why by this time nothing has been paid. If they furnished claims during 1935 there should be payments mow arising out of that, because while wheat was scattered all over western Canada, as the minister says, it was shipped, and this was to be paid only in the event of a loss.


Charles Avery Dunning: The loss has not yet been determined in many cases.


Richard Bedford Bennett: If the grain is shipped, surely the loss must be determined. The purpose was to maintain the standards of Canadian wheat abroad. The grain commission felt that we could not afford to take the risk of having the standards lowered, and they determined that this was the only way-perhaps other members of the committee are more familiar with the matter than I-by preventing this wheat being marketed, I shall not say under fase pretences, but under a misunderstanding. We made this appropriation accordingly, and what I cannot quite understand is how the crop year having ended July 31, 1935, and there having intervened the months since the first of August to the first of June of this year, we are. still in the position of not having

Supply-Trade-Mail Subsidies
paid out anything under the vote. It may be that there was no loss; I cannot say as to that, but I certainly find it difficult to understand why the whole sum should be revoted.


William Daum Euler: The facts were not all ascertained, and the intention was to make settlement of all these claims at one and the same time. I can assure the right hon. gentleman that nothing will be paid out unless it is fully justified after careful investigation.


Richard Bedford Bennett: I am sure of that, but the item reads:
-by providing that in respect of any such wheat which on the 31st July, 1935, was in elevators licensed under the Canada Grain Act, the governor in council may on the recommendation of the chairman of the board of grain commissioners indemnify any holder or owner thereof, for loss resulting directly from the revision of the statutory grade No. 2 Manitoba northern aforesaid.


Charles Avery Dunning: It was moved out very slowly.


Richard Bedford Bennett: It would seem so, but whether or not that is a suggestion based upon knowledge I am not quite sure.


Charles Avery Dunning: No; it is a very real problem getting rid of garnet wheat.


Richard Bedford Bennett: That was the only question I had in my mind, why no payment had already -been paid.


[Stage Direction]
Item agreed to.
mail subsidies and steamship subventions
Atlantic Ocean
Canada and the United Kingdom, on the Atlantic, service between, $250,000.
Canada and South Africa, service between, $112,500.
Pacific Ocean
British Columbia and China, service between, $118,800.
British Columbia and South Africa, service between, $84,000.
Canada, China and Japan, service between, $600,000.
Canada and New Zealand, on the Pacific, service between, $300,000.
Prince Rupert, B.C., and Queen Charlotte Islands, service between, $12,000.
Vancouver and the British West Indies, service between, $33,000.
Vancouver and northern ports of British Columbia, service between, $18,000.
Victoria, Vancouver, way ports and Skagway, service between, $12,000.	_
Victoria and west coast Vancouver island, service between, $10,000.
Local Services
Baddeck and Iona, service between, $8,000.
Charlottetown and Pictou, service between,
$20,000. . „
Charlottetown, Victoria, and Hollidays wharf, service between, $6,000.
Chester and Tancook island, winter service between, $1,600.
Grand Manan and the mainland, service between, $33,000.
Halifax and Bay St. Lawrence, service between, $2,000.
Halifax, Canso and Guysboro, service between, $6,750.	„
Halifax and Sherbrooke, service between, $900.
Halifax, LaHave and LaHave river ports, service between, $2,000.
Halifax, South Cape Breton and Bras d'Or lake ports, service between, $3,500.
Halifax, Spry bay and Cape Breton ports, service between, $4,000.
Halifax and west coast of Cape Breton, service between, $4,000.	.
Ile-aux-Coudres and Les Eboulements, service between, $1,100.	.
Mulgrave, Arichat and Canso, service between, $33,750.	.	.
Mulgrave and Guysboro, calling at intermediate ports, service between, $9,500.
Murray Bay and North Shore, winter service between, $40,000.	.
Parrsboro, Kingsport and Wolfville, service between, $1,500.	.
Pelee island and the mainland, service between, $8,250.	.
Pictou. Mulgrave and Cheticamp, service between, $11,000.
Pictou, Souris and the Magdalen islands, service between, $37,500.	.
Quebec, Natashquan and Harrington, service between, $85,000.	_
Quebec, or Montreal, and Gaspe, calling at way ports, service between, $60,000.
Rimouski and Matane and points on the north shore of the St. Lawrence, service between, $50,000.
Riviere-du-Loup and Tadoussac, and other north shore ports, service between, $8,000.
St. Catherine's Bay and Tadoussac, service between, $3,500.
Saint John, Bear River, Annapolis and Granville and other way ports, service between, $1,500.
Saint John and Bridgetown, service between, $800.
Saint John and Margaretville, and other ports on the Bay of Fundy, service between, $2,500.
Saint John and Minas Basin ports, service between, $5,000.
Saint John and St. Andrews, calling at way ports, service between, $3,000.
Saint John, Westport and Yarmouth, and other way ports, service between, $13,000.
Saint John and Weymouth, service between,
[Stage Direction]
Summerville, Burlington and Windsor, N.S., service between, $500.
Sydney and Bay St. Lawrence, calling at way ports, service between, $25,000.
Sydney and Bras d'Or lake ports and west coast of Cape Breton, and Prince Edward Island, service between, $22,500.
Sydney and Whycocomagh, service between, $16,000. , . .
Inspection of subsidized steamship services, $4,900.
Mr. REID:: Has the minister any information to give the committee regarding the conference that was held in London recently, at which Canada was represented by Mr. Beatty and the Canadian High Commissioner? I noticed from the reports that it was the intention of the British government to help, if

Supply-Trade-Mail Subsidies
they could, by means of a subsidy for the all red route from the Pacific coast. Can the minister make any statement on that to the committee?


William Daum Euler: The conference has not yet been held, but it is to be held. I cannot give any information at the moment as to just what is to be done.


Robert Emmett Finn: What is the amount of the
subsidy paid to the Canadian Pacific on their Atlantic service from Saint John to Liverpool, calling at Halifax?


William Daum Euler: We propose this year for
the Canada-United Kingdom service on the Atlantic a subsidy of $250,000.


Robert Emmett Finn: Does that include a subsidy to the freight boats?


William Daum Euler: That includes the Empress
of Australia, the Empress of Britain-


Robert Emmett Finn: She goes around the world in winter.


William Daum Euler: Of course, she does not get
a subsidy when she makes her world cruise.


Robert Emmett Finn: Are they paid by the trip or
for the year?


William Daum Euler: The service also includes
five freight liners, but in the winter, of course, the service is out of Saint John and Halifax.


Robert Emmett Finn: Out of Saint John practically.


Abraham Albert Heaps: Can the minister inform
the committee if there is any general basis upon which these subsidies are granted?


William Daum Euler: It is usually a matter of
negotiation. I do not know that I would care to say that there is any absolutely definite basis which would apply to all the services;
I am sure there is not. Perhaps some of it is a matter of inheritance; they got such and such a subsidy last year. In some cases I have cut the subsidy down because I felt conditions justified this, while in other cases the representation may have been very strong to maintain the present subsidy; in some cases it has been reduced, and in some cases increased. The basis is just about the same as with freight rates. I remember very well one time asking the head of the freight rates department of a certain Canadian railway upon what they based their rates; was it according to service rendered? He said no, just what the traffic would bear.


Abraham Albert Heaps: Is this a case of what the
government will bear?


William Daum Euler: Perhaps so.


Abraham Albert Heaps: Is there not some way of
arriving at an intelligent basis for granting these subsidies? We are granting a total of two million dollars in subsidies for this fiscal year, and I was wondering if the minister could tell us whether the individual subsidies were warranted by the actual amount of mail carried or other service rendered.


William Daum Euler: There are different factors entering into the matter, one of them, and a very important one, being the carriage of the mail. In other cases it may be that a service which is necessary could not be carried on at all except for this assistance obtained from the government. Various factors have to be taken into consideration in arriving at a figure. If the company is making a profit, the chances are that they would not get any subsidy at all. Very often the amount of the subsidy is based upon the returns received year to year from the steamship companies. They have to submit financial statements. For instance, the subsidies in a number of services were reduced. In one instance the reduction was substantial because the position of the company had improved materially during the year. In another case, where the competition had become extremely heavy and there was danger that the services would be discontinued, [DOT]there was a slight increase. It is impossible to give my hon. friend any definite principle that would guide all along the line.


Mr. WOODSWORTH:: What does the
government require from these steamship companies by way of a statement?


William Daum Euler: We receive audited statements.


James Shaver Woodsworth: Do those statements show the profits of the corporations, the costs of running the services, and so on?


William Daum Euler: They show the operating receipts and expenditures. I think in all cases, the statements showed deficits. Some of the companies showed a material reduction in their deficits, and in those cases the subsidies have been reduced.


James Shaver Woodsworth: According to the press, the Canadian Pacific states that it is running behind on its Pacific services and that there is very great danger they will have to give up unless further public assistance is received. What steps would the Canadian Pacific take to secure greater public assistance? What submissions are made to the government?


William Daum Euler: My predecessor in office will know that in many cases we are asked for

Supply-Trade-Mail Subsidies
an increased subsidy in the hope that it will be granted. This year there has been only one instance in which a substantial increase has been made. I think my hon. friend is referring to the rumours to the effect that the Canadian Pacific proposes to build .two new vessels to operate from the west coast to New Zealand. This project is still in the air, to use that language, and I have no information to give with regard to it. Whether the company will come for a subsidy is on .the knees of the gods, but when it does, whether a subsidy will be granted will have to be considered as a matter of policy.


Abraham Albert Heaps: Is the minister in a position to give us information with regard to the separate subsidy items? I take one at random from page 37 of the estimates, "Murray Bay and North Shore, winter service between, $40,000." I should like to know the services being performed by the company which receives this $40,000.


William Daum Euler: From December 1 to
December 31, and from March 1 to March 31 in each year, two round trips each month between Murray Bay and Havre St. Pierre, calling at St. Simeon, Tadoussac, Les Escoumains, Baie des Cedres, Pentecost River, Clarke City, Riviere aux Graines, Thunder River, River St. Jean, Port Menier, Bersimis, Baie St. Nicholas, Comeau Bay, Godbout, Baie de la Trinite, Shelter Bay, Seven Islands, Sheldrake, Magpie, and Longue Point of Mingan, as weather and ice conditions permit. From January 1 to February 28, inclusive, in each year, a regular service consisting of two round trips per month between Murray Bay and Seven Islands, calling at a number of points and Anticosti, as weather and ice conditions permit. Steamer must call whenever possible at government wharves. Mails to be carried free.	,


Abraham Albert Heaps: How much material is carried for this $40,000?


William Daum Euler: In 1934-35 there were eight round trips; passengers carried, 1,064; tons of freight, 1,034; live stock, 183; bags of mail, 233 and sacks of mail, 2,217.


Olof Hanson: Do these Pacific ocean subsidies refer to specific companies and specific ports? I notice in the case of the Canada-New Zealand service there has been an increase of $100,000. Is this for any particular steamship company or any particular port, or does it refer to British North American ports in general?


William Daum Euler: That is the subsidy to the Canadian Australasian line, half of which is owned by the Canadian Pacific and the other half by the Union Steamship Company.


Richard Bedford Bennett: The Royal Mail, is it not?


Henry Herbert Stevens: The Union Steamship
Company of New Zealand.


William Daum Euler: The ports of call are Vancouver, Victoria, Honolulu, Suva, and Auckland, New Zealand. Each voyage shall be extended to Sydney, Australia, without additional subsidy. The call at Suva is conditional upon the government of Fiji also continuing their contract for a like period and on the same terms as heretofore. The voyage to Auckland is not to exceed eighteen diays, ineluding one day at Honolulu.


Olof Hanson: Is it so much a trip?


William Daum Euler: It is so much a year for thirteen trips a year.


Olof Hanson: Do the Pacific ocean subsidies refer only to Vancouver or are other ports included?


William Daum Euler: Vancouver and Victoria.


Olof Hanson: Is there no mention of Prince Rupert or New Westminster?


William Daum Euler: Not in this.


Olof Hanson: Do other subsidies refer to other ports?


William Daum Euler: There may be calls at Prince Rupert in the British Columbia and China servioe.


Olof Hanson: Just the China service?


William Daum Euler: But not the New Zealand.


Alan Webster Neill: I did not quite catch the minister's explanation of the fifty per cent increase.


William Daum Euler: The statement was made by the ship owners that the competition from United States lines was becoming severe because of their better boats and also because of the fact that the United States government was subsidizing their vessels very heavily. I 'believe the Matson line is the one interested, and the Canadian company finds it very difficult to operate under these conditions.


Abraham Albert Heaps: Could the minister give us an idea of what subsidies the United States government are paying?


Richard Bedford Bennett: They pay on a speed basis.


William Daum Euler: The United States subsidies to the Matson line amount to $1,192,080.


Abraham Albert Heaps: To the one line only?

Supply-Trade-Mail Subsidies


William Daum Euler: To the Matson line.


Abraham Albert Heaps: How many boats do they run 'between United States ports and the
orient?


William Daum Euler: They run four.


Mr. TAYLOR (Nanaimo):: Does the minister differentiate between ships of Canadian and ships of foreign registry in the granting of subsidies? I ask that question because when boats of foreign registry are chartered it is frequently agreed that they shall engage foreign masters and foreign crews, and if something could be done to secure ships of Canadian registry it would benefit Canadian trade and employment.


William Daum Euler: We do not discriminate with respect to registry. As a matter of fact there are not many vessels registered in Canada. The Canadian Pacific boats are registered in England. As regards the employment of men on boats, the matter was referred to a committee after the last occasion on which the estimates were under consideration, and the committee has not reported.


Richard Bedford Bennett: Has anything definite been arrived at yet as a result of the negotiations that have been going on for a faster service to Australia and New Zealand?


William Daum Euler: Not yet.


Henry Herbert Stevens: I suggest to the minister that the service between British Columbia Pacific ports and New Zealand and Australia is a very important one to Canada from the standpoint both of maintaining trade and of the mail service, and the subsidy which is paid is quite a modest one compared with the service that is involved. The vessels were excellent ten years ago but they are not now up to date; in fact they are obsolete. There is a good deal of business being lost to the Matson line. It is true that line receives a subsidy of over $1,000,000 and it has faster and more up to date vessels. The result is that Canada is losing business to that line. I have always had in mind that we should negotiate with the Union Steamship Company of New Zealand, of which the Canadian Pacific is now half-owner, for a faster and more efficient service with more modern vessels, even if it is necessary to increase the subsidy. Another factor that should be kept in mind with respect to these larger items is that these lines carry mail. I have figured it out on two or three occasions, and if we paid for the mail at the usual rate, so much per ton or hundredweight, or whatever the rate is, we should have to pay almost as much as

many of these subsidies amount to. Therefore, when we discuss the question of subsidies we must remember that the service covers a very valuable mail service. I would suggest to the minister, now that he has increased the subsidy to $300,000, that a definite effort should be made to put on faster steamships and possibly to give a more frequent service. At any rate there should be faster and more modern ships. I certainly believe that the service is one which it is well worth sustaining. The minister himself referred to the pending negotiation for a revision of the trade treaty with Australia, which by the way has been a very valuable treaty to Canada, resulting in a considerable increase in business, and much in Canada's favour. All these matters ought to be safeguarded. But the question of subsidy should be considered in connection with these other points to which I have referred.


Richard Bedford Bennett: The minister will recall that when we last diisicussed this item we spent some time going into the relative merits of the Matson boats and our own. The Matson boats have a 22 knot sea speed and receive the subsidy based upon speed, plus loans from the government, to enable them to build ships by paying an interest of 1J per cent, in one case. The Royal Mail have indicated in their published statement that they have an interest with the Canadian Pacific in this line that runs from our Pacific coast to Australia and New Zealand, not the Union Steamship Company of New Zealand but the Royal Mail as the second partner. They purchased their interest from the Canadian Pacific for preference shares in the Canadian Pacific, and in their last annual statement they indicated that they had not received interest this last year or two in connection with the shares they thus acquired. I saw the other day that negotiations were pending between the Royal Mail and the Canadian Pacific, and the government of Australia, the government of New Zealand, the government of Canada, and possibly the Fiji Islands, through their appropriate representatives, looking towards a more speedy service that would be more comparable with the 22 knot sea speed service of the Matson line. The minister says that negotiations are still pending and that nothing has yet been definitely concluded, but it is quite obvious that a great deal of our mail which comes from England and which ordinarily would go through Vancouver has been diverted to boats at San Francisco for the purpose of finding speedy transport to Australia. Perhaps the minister will recall that when a former Prime Minister of Australia came to this

Supply-Trade-Mail Subsidies
country last he came to San, Francisco because of difficulties of securing accommodation which would suit his plans at the time and because of the slow rate of speed at which he would travel as compared with the speed of the Matson line boats. If the minister is not in a position to say what negotiations have been carried on, or to what extent they have been proceeded with, I can quite understand his not having a statement to make. I may be wrong, buit is it not the Royal Mail that has the interest to which I have referred?


William Daum Euler: I was going to correct my right hon. friend. The partnership exists between the Canadian Pacific and the Union Steamship Company of New Zealand. The Union Steamship Company, I am told, is owned by the P. & O.


Richard Bedford Bennett: P. & O. is what I meant to say, and not the Royal Mail. Mr. Shaw is chairman of the board.


William Daum Euler: All hon. members appreciate, and certainly the members of the government appreciate the extreme value of the service to Australia and New Zealand, largely because of the trade with those countries, which is very much in our favour. The boats which are now in the service, as the leader of the opposition says, are slower and more or less obsolete, and to my knowledge that is a matter of special concern to the owners. I cannot say anything more at the moment than that the situation is, to put it mildly, being explored thoroughly with the idea of putting on a better service. That is the position in which the matter stands now and I cannot give any other definite information at the moment.


Richard Bedford Bennett: We have only two, sometimes three boats, and the Matson line has four.


Olof Hanson: It is not necessary to remind the minister, because he is familiar with the fact, that we have a Pacific port which is served by the Canadian National Railways, the port of Prince Rupert. That port is equal to any on the Pacific coast, and when the question of subsidies is under consideration by this or any future government I think we should at least give some consideration to a port that is served by the nationally owned railway, a port that has facilities to carry Canadian trade and to bring back the products of other countries. I have no criticism to offer with regard to subsidies, but I would impress upon the minister that when the question is under consideration Vancouver and Victoria are not the only ports which should receive attention, because we have
another port which, as I say, is served by the nationally owned railway. Moreover, behind that railway system we have hinterland which statesmen in past years have regarded as valuable enough to warrant development, and it is up to the statesmen of to-day and of the future to find out whether that opinion is really sound and, if it is, to do something to assist in the development of that hinterland in British Columbia. I ask the minister to make a special note of that and to realize that we have on the Pacific British North American coast a port which is served by a nationally owned railway.


William Daum Euler: I wish to congratulate my
hon. friend upon the case he puts up for his good port of Prince Rupert. As he knows, we are not prone to make promises, except this, that we shall certainly give every consideration to his representations when the time comes.


Abraham Albert Heaps: I observe that the minister
has cut off half the subsidy on the steamships between this country and Great Britain. Is that going to affect in any way the services between Canada and Great Britain?


William Daum Euler: No; it will not affect them at all. I think I gave the explanation before. The cut has been made because the statement of the companies showed that they had done substantially better last year than they did the year before. In fact, if my memory serves me aright, prior to 1930 they were not receiving any subsidy at all.


Alan Webster Neill: I notice there are nine items on the Pacific ocean. Might I ask if they all include the free carriage of mail on the routes indicated?


William Daum Euler: I cannot give the number
of them, but in some of them the Post Office Department contributes towards the subsidy.


Alan Webster Neill: Which ones?


William Daum Euler: The Post Office Department contributes to these services: Vancouver and northern ports of British Columbia; Victoria, Vancouver, way ports and Skagway; and Victoria and west coast Vancouver island.


Alan Webster Neill: Is that all?


William Daum Euler: That is all.


Alan Webster Neill: They draw a subsidy under
this item, a mail subsidy it is called, and then the post office pays as well for the carrying of mail. Is that not a unique situation?


William Daum Euler: The post office assists.


Alan Webster Neill: And so they draw two subsidies. One is a mail subsidy, and they are

Supply-Trade-Mail Subsidies
paid for carrying the mail as well. Does the minister not think it should be either one or the other? If they get a mail subsidy for carrying the mail they should carry the mail, should they not? Or if they do not get the mail subsidy they are paid for carrying it according to weight and measurement. But apparently in these cases they get both subsidies. What is the explanation?


William Daum Euler: Nearly all subsidies are given not only for carrying the mail. That is merely a portion of the service which is rendered. We may say that, of a subsidy of S200,000 given a certain steamship company, $100,000 or $150,000 might fairly be for the carriage of the mails; the balance of it would be for the encouragement of the service itself, not necessarily having anything to do with the carriage of the mails. But in nearly all cases the total amount of the subsidy includes the cost of carrying the mails; over and beyond that it is for the service.


Alan Webster Neill: I suppose the minister, not
being connected with the department, would not have the amounts paid by the post office?


William Daum Euler: The Post Office Department would have to give that information.


Mr. MacNEIL:: What is the total amount of the subsidy granted to the Union Steamship Company, Vancouver?


William Daum Euler: Eighteen thousand dollars.


Robert Emmett Finn: I have a question to ask the minister. I notice that the Canadian Pacific Railway Company in their annual report have incorporated both their steamships and their railways. They aire two separate corporations. One is Canadian Pacific Ocean Steamships Limited and the other is the Canadian Pacific Railway Company. It is impossible from their report to tell whether they are making their profits out of the railways or out of the steamships. Under steamship depreciation, in their Canadian Pacific Railway Company report to their shareholders, they have taken out of their profit and loss account $3,550,996 for depreciation, and I also find that they have lumped the number of ships which they have both on the Atlantic and on the Pacific. They start with their five freight boats of 10,000 tons dead weight capacity, called the Beaver boats: then they come to the Duchess boats; then they come to the Empress of Asia, the Empress of Australia, the Empress of Britain, the Empress of Canada, the Empress of Japan and the Empress of Russia; then they come to the Mont boats, the Montclair, the Montcalm and the Montrose. Some of these ships are

operated on the Pacific. Five of them, freight ships, are operated from London, and the Duchess boats and the Mont boats are operated from Liverpool as passenger and freight boats. I should like to know whether the subsidy paid to the Canadian Pacific is paid to the Canadian Pacific Railway for their boats, or is it paid to the ocean steamship company?


William Daum Euler: The contract is with the railway company.


Robert Emmett Finn: Well, Mr. Chairman, that seems to me to be a strange thing. They are two separate corporations. Sir George McL. Brown is in charge in London of the steamship service, and Sir Edward Beatty is in charge at Montreal of the railways. We pay $250,000 of a subsidy. Is that paid to the railway or is it paid to the ocean steamship company?


William Daum Euler: It is paid to the railway.


Robert Emmett Finn: Well, I do not know of any railway in Canada that is subsidized.


Jean-François Pouliot: Sixty millions to the Canadian Pacific Railway.


Robert Emmett Finn: That is a small figure. They must have got on the inside. I am only asking for information as to what subsidy is paid to the Canadian Pacific Ocean Steamships Limited, which is a separate corporate entity, on their Atlantic service.


William Daum Euler: I am informed that they are the operating agents of the steamships for the Canadian Pacific Railway, and that is why the money is paid to the Canadian Pacific Railway.


Robert Emmett Finn: Well, then, I can quite understand why in their report in reference to railways they have written off as depreciation over three and a half million dollars on the ships, and some of their ships are practically new. The Beaver boats are the freight ships, 10,000 tons dead weight capacity, and practically new, about three years old. The Duchess boats are not very old. Only the Mont ships are old'. The Empress of Britain is almost 'new. I find too that they transfer to income acoojumt. what should go to profit and loss account, $2,832,183, and they do not pay any dividend; they say they need that as ready cash in respect of their railways in the United States. I should like to know what amount the department pays for the Atlantic service of the Canadian Pacific Railway and what it pays for the service

Supply-Trade-Mail Subsidies
on the Pacific? The right hon. leader of the opposition (Mr. Bennett) is correct when he says that the Matson Line is obsolete; they have obsolete boats.


Henry Herbert Stevens: No, no, not the Matson.


William Daum Euler: The Matson line is an
American line.


Robert Emmett Finn: I know, but the boats are obsolete.


Richard Bedford Bennett: No; they have new boats now.


Robert Emmett Finn: Then I congratulate them. I think the two ships that are operated by the Canadian Pacific alternate; I believe they run one trip from Vancouver and the other trip from San Francisco. I think that is correct.


Henry Herbert Stevens: No.


Robert Emmett Finn: Perhaps the ex-Minister of Trade and Commerce can tell us that.


Henry Herbert Stevens: Both from Vancouver.


Robert Emmett Finn: Does the Aorangi not go from San Francisco, and did the other one, that was lost, not also alternate with San Francisco?


Henry Herbert Stevens: No.


Robert Emmett Finn: What ships go from San Francisco?


Henry Herbert Stevens: None of the ships involved in these subventions.


Robert Emmett Finn: Then I should like to know the amount paid to the Canadian Pacific, whether it is to the ocean steamship company or to the railway company, for the Atlantic service. Is it or is it not $250,000?


William Daum Euler: We pay $250,000 to the Canadian Pacific for their Atlantic service.


Robert Emmett Finn: And what about the service to Japan?


William Daum Euler: The service to Japan costs us $600,000, reduced from $749,000.


Robert Emmett Finn: That is a total of $850,000?


William Daum Euler: Yes.


Some hon. MEMBERS:: Carried.


Robert Emmett Finn: What is earned, the amount? I was going to suggest to the minister and the government that there is upon the statute books something we have been discussing lately. I refer to the Canadian Pacific-Cana-dian National act, which was passed in order to cut out duplication and pool interests. Why is it that the Canadian Pacific are not asked to have every alternate boat on their Atlantic service turn at Halifax and the other one turn at Saint John?
Mr. EULER; They all call there.


Robert Emmett Finn: That is like knocking at a door and going away before the people can open the door and speak to you. The point is that if there is to be a pooling of interests it should be a genuine one. We are paying $250,000 for that service, and the freight boats go direct to Saint John. They are unloaded there, and remain in that port a week. Then 'they come around to Halifax, pick up the Canadian National freight there and go off to London. The passenger boats call at Halifax, land the mails and passengers, go around to Saint John, stay .there a week, load up, come back to Halifax, pick up any Canadian National freight that may be there, and go off to Liverpool. I am suggesting that in the interests of the development of the two Atlantic ports, Saint John and Halifax, the boats should call at each port alternately. That is what they do at Montreal and Quebec. The Empress of Britain does not go to Montreal but goes only as far as Quebec. The other boats go to Montreal and then call at Quebec. Is there any sound reason why the boats should not alternate between the Atlantic ports and why the Minister of Trade and Commerce and the government should not take into consideration pooling these interests on the Atlantic coast? Prior to the retirement of Sir Henry Thornton an agreement was entered into and a subsidy was paid the Cunard-White Star line. They called at Halifax and worked up a freight business which inured to the benefit of the Canadian National system to the extent of four or five thousand tons of freight every week. Now *that business is all lost. A great deal of money has been spent in the port of Halifax; I think when the right hon. leader of the opposition returned from England last year he opened a new pier costing $500,000, which is large enough to hold the Queen Mary and two or three other large ships at the same time. Here we are, paying subsidies of $250,000, and I do not think there should be any discrimination as between the two Atlantic ports, Saint John and Halifax, any more than there should be discrimination between Montreal and Quebec.
I should like to ask the minister whether, since he has been in office, he has discussed with the Canadian Pacific the possibility of having each alternate boat turn at Halifax. I am sure that if the subsidy of $250,000 were to be cut in .two and one-half given the White Star line they would call at Halifax every week and 'the Canadian Pacific could call at Saint John, as they do now. Saint John is their terminus; Halifax is not. Halifax is just a port of call, in order to pick up what

Supply-Trade-Mail Subsidies
other ships do not take. I think the two ports should be on a parity, at least in regard to those lines that are subsidized by the government, particularly in view of the act providing for the pooling of interests. They pool on land but they do not seem to pool on sea, and after all that is the right sort of pooling. The water makes the pool there, whereas the only water you get on land is the water that goes into stocks. The minister may not be prepared to answer my question to-night. I do not desire to hold up the estimates or to delay the business of the house


William Daum Euler: I shall be very glad to give consideration to the representations of the hon. gentleman.


Robert Emmett Finn: And to bring them to the attention of the government?


William Daum Euler: Yes.


Mr. ISNOR:: I should like to support my jolleague from Halifax-


Frederick George Sanderson: The hon. member for Cape Breton North-Victoria has the floor.


John Charles Alexander Cameron: I should like some information in regard to the service between Baddeck and Iona. Are there any ports of call stipulated in the contract, between these two ports?


William Daum Euler: The contract reads:
Baddeck, Iona or Shenacadie, and MacKay's Point; calling at Kempt Head on the western end of Boularderie island on trips from Baddeck to Iona; such calls to be made on only those days on which the subsidized steamer from Sydney to Whycocomagh makes her westbound trip from Sydney to Whycocomagh; and calling at Grand Narrows whenever there is a reasonable amount of freight or automobiles to put on or take off at that place.
(a) Provided, however, that if weather conditions prevent the steamer making a landing at Iona at any time, she shall, if possible, proceed to Shenacadie to land and take on passengers and freight.
Note: Connections at Iona: the steamer must make connections at Iona with the afternoon eastbound train from Halifax to Sydney from April 1st to November 30th, in each year.


Gordon Benjamin Isnor: I should like to support the suggestion of my hon. friend from Halifax in connection wibh the port of call of the Canadian Pacific ships. It is true that the subsidy was reduced last year from $500,000 to $250,000. The contract ran out, if I remember rightly, on March 31, 1936, so that it is not this year's but future contracts which I should like to have the minister bear in mind. I do not know whether there is a clause in the contract as to calling at any particular port or ports, but I think the

matter should be seriously considered and a clause inserted, if necessary, to the effect that calls should be made at both Saint John and Halifax on the Atlantic coast with the same amount of time spent in each. As already pointed out by my colleague, a direct benefit is to be gained by the Atlantic ports the same as in regard to boats operating out of Vancouver, where a large amount, $600,000, is paid in subsidies. I support my colleague in his contention; it is something that the minister would be well advised to consider in the future.


John Charles Alexander Cameron: I should like to direct the minister's attention to the item on page 38 of the estimates:
Sydney and Bras d'Or lake ports and west coast of Cape Breton and Prince Edward Island, service between, $22,500.
Who is operating that service now?


William Daum Euler: The contractors are the
Straits Shipping and Contracting Company, Limited, of Sydney, Nova Scotia.
Mr.	CAMERON	(Cape	Breton):	When
was this contract entered into?
Mr.	EULER:	August	1, 1935,	and it
runs to 1939.
Mr.	CAMERON	(Cape	Breton):	Were
any tenders called for?


William Daum Euler: No, no tenders.
Mr.	CAMERON	(Cape	Breton):	What
was the term of the previous contract, or had there been any contract immediately prior to this one?


William Daum Euler: I do not have it before
me, but I am informed that the terms were about the same as this one.


John Charles Alexander Cameron: As to
the period or as to the amount?
Mr. ElULER: From 1932 to 1934 the subsidy was $21,225. For 1934-35 it was $20,000; for 1935-36 it was $22,500, and for this year it will be $22,500.


John Charles Alexander Cameron: But was there a contract?


William Daum Euler: Yea.


John Charles Alexander Cameron: For one season?


William Daum Euler: 
John Charles Alexander Cameron: Then in August, 1935, it was renewed for four years?


William Daum Euler: Yes.


John Charles Alexander Cameron: Without any competition?


William Daum Euler: There was no tender.


John Charles Alexander Cameron: Had the previous contract expired when it was renewed?


William Daum Euler: Yes; I am informed that
the old contract had expired at the end of the previous season.


John Charles Alexander Cameron: Then there was no contract. The previous contract expired at the end of the season of 1934?


William Daum Euler: Yes, when navigation closed.


John Charles Alexander Cameron: And there had been no new contract entered into?


William Daum Euler: The new contract was made August 1, 1935.


[Stage Direction]
Item agreed to.
Progress reported.
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Tuesday, June 9, 1936