FISHERIES ACT AMENDMENT

[Stage Direction]
Mr. THOMAS REID (New Westminster) moved for leave to introduce Bill No. 20, to amend the Fisheries Act, 1932.
Some hon. MEMBERS:: Explain.


Mr. REID:: The purpose of the bill is twofold. First, it seeks the elimination of purse seines in the waters adjacent to the mouth of the Fraser river, and, second, it is concerned with the preservation of the livelihood of gill net fishermen of the Fraser river. It is the same bill as was introduced last year and the year before.
Motion agreed to and bill read the first time.

Questions



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
Hon. C. D. HOWE (Minister of Railways and Canals) moved for leave to introduce Bill No. 21, to amend the Canadian National-Cana-dian Pacific Act, 1933.
Mr. BENNETT:: Explain.


Mr. HOWE:: The purpose of the bill is to terminate the present form of administration of the Canadian National Railways, provided under authority of the 1933 legislation, and to substitute therefor administration by a board of directors to be appointed by the governor in council. This is the measure foreshadowed in the speech from the throne when intimation was given that legislation respecting the Canadian National Railways would be sought which would serve to confer a greater measure of governmental authority and responsibility to parliament.
Motion agreed to and bill read the firet time.
2.	Where did such boat, if any, have a base of operation?
3.	What was the cost of such patrol?


Mr. LAPOINTE (Quebec East):: 1.	No systematic patrol of the north side of the Baie de Chaleur was made by any vessel of the preventive service of the Royal Canadian Mounted Police in 1934 but when information was received from the land forces, occasional patrols by cruisers on duty in the gulf and elsewhere, were made along the north shore of the Baie de Chaleur. The Vigil and Beebe, which were based on Cara-quet, N.B., and Shippigan, N.B., respectively, also made occasional trips along the north shore of the Baie de Chaleur in 1934.
2.	Answered by No. 1.
3.	Inasmuch as all patrols on the north shore of the Baie de Chaleur in 1934 were only occasional, in the circumstances already related, it would be difficult to compute the cost of the few hours entailed for the patrols made by these vessels, as it was taken as a part of the daily routine, irrespective of where they were based.



QUESTIONS

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

Mr. BROOKS:: 1 What duty if any, is paid on United states table potatoes entering Canada under the provisions of the new treaty?
2.	What duty is paid on Canadian table potatoes entering the United States of America?
3.	What quantity of potatoes have been shipped into Canada from the United States ot America during the months of January and February of this year?


Mr. RINFRET:: 1.	United States table potatoes (not sweet potatoes) in their natural state, imported into Canada in accordance with the provisions of the Canada-United States trade agreement, are free of customs duty. They are exempt from the consumption or sales tax but subject to the special excise tax of three per cent.
2.	The rate of duty on Canadian table potatoes entering the United States of America is 75 cents per 100 pounds on potatoes other than government certified seed potatoes.
3.	Imports of potatoes from United States entered for consumption in Canada: Month of January, 1936, 381 ewt.; month of February 1936, 2,825 cwt.


BAIE DE CHALEUR PROTECTIVE SERVICE
Mr. VENIOT:: 1.	What vessel, under the protective service, did patrol work on the north side of the Baie de Chaleur in 1934?


MAIL CONTRACTS PAYMENTS TO RAILWAYS
Mr. TAYLOR (Nanaimo):: 1.	What was the total amount paid for mail
contracts for the last fiscal year to (a) Canadian National Railways; (b) Canadan Pacific Railway?	_
2.	What relative population is served bv (a) Canadian National Railways; (b) Canadian Pacific Railway?


Mr. RINFRET:: 1.	(a) $2,773,440.22, (b) $3,421,494.11.
2.	(a and b) Information not available.


BANK OF CANADA-BONUSES TO EMPLOYEES
Mr. WARD:: 1.	Did the Bank of Canada give bonuses at Christmas to their employees?
2.	If so. what was the total amount and to whom paid?
3.	Did the Bank of Canada increase the salaries of the staff taken over from the finance department?
4.	If so, to whom were increases granted and to what extent?


Mr. DUNNING:: Not matters of dominion government record.


PARLIAMENTARY GUIDE
Mr. WARD:: 1.	How many copies of the Parliamentary Guide are purchased annually for the use of the House of Commons, and what is the cost per volume?
2.	Is the editor a civil servant?
3.	If so, what is his salary?


Mr. RINFRET:: 1.	325 copies; $4 per copy.
2.	Yes.
3.	$2,520.
Questions


SASKATCHEWAN LIVE STOCK MARKETING BOARD
Mr. BOTHWELL:: 1.	How much has been paid to the Saskatchewan live stock marketing board, or to anyone on its behalf, under the provisions of the Natural Products Marketing Act, 1934, and amendments thereto?
2.	To whom and for what services were such payments made?


Mr. GARDINER:: 1. Grants totalling $9,000 were made by the dominion marketing board to the provisional Saskatchewan live stock marketing board in connection with the proposed Saskatchewan live stock marketing scheme. Up to February 29, 1936, $8,469.29 had been spent, leaving an unexpended balance of $503.71. These grants were made for organization expenses.
2.
Saskatchewan Co-operative Live Stock Producers (expenditures incurred by organization in connection with
scheme)	$2,795	00
A. F. Gilchrist (trip to Ottawa, attending meetings of provisional
board)	
576	04P. E. Rofolin (trip to Ottawa, attending meetings of provisional board and miscellaneous expenditures)..	581	17
G. S. Herringer (attending interprovincial and other meetings of
provisional board)	 167	64
D. M. Wylie (attending provisional
board	meetings)	 95	35
N.	Catley (attending provisional
board	meetings)	 95	70
A. Richardson (attending provisional
board	meetings)	 35	30
J. F. Minor (attending provisional
board	meetings)	
88	60W. A. Hunter (attending meetings of provisional board and	executive)..	174	15J. B. Lindner (attending interprovincial and other meetings of provisional board)	
89	20
R. Hopkinson (attending provisional
board meetings)	 68	60
I. McKenzie (attending provisional
board meetings)	
61	20G. H. Barr (legal services)	
2,500	00
Wm. Crozier (attending interprovincial and other meetings of provisional
board)	 79	44
R. C. Farr (attending interprovincial and other meetings of provisional
board)	
133	50C. E. Tysdale (attending interprovincial and other meetings of provisional board)	
70	02

E. H. Abbott (attending interprovincial and other meetings of provisional board)	 88 03
S.	F. Van Eaton (attending interprovincial and other meetings of provisional board)	
86 75O.	Olafson (attending meeting at request of provisional board)	
41 37P.	C. Hackney (attending interprovincial and other meetings of provisional board)	
26	15Ed. Evans (attending interprovincial meeting at request of board)....	25	55
Saskatchewan Stock Growers' Association (expenses incurred re
scheme)	
84	47Miss C. O. Furneau (mimeographing)	
2	50Bank of Montreal (excise stamps)..	2	10Alfred Speakman (printing)	
100	00Houston Willoughby (office rent)...	40	00
Saskatchewan government telephones
(installation and rental)	 1135
Halil's repair shop	
4	00Exchange and excise	
4	47O.K. Stamps, Seals, Stencils, Limited.	1	75C.P.R. communications	
1	15
Additional expenditures, details not
as yet available	
365	74Unexpended balance	
503	71

Note: The meetings of the provisional board were for the purpose of discussing from time to time, as the plan of regulation was developed, the provisions which the proposed live stock marketing scheme should contain.
Attendance at the interprovincial meetings was for the purpose of discussing the plan of operation to be followed under the three proposed live stock marketing schemes for the provinces of Manitoba, Saskatchewan, and Alberta, and if possible to work out a uniform procedure for all three provinces.


UNION STEAMSHIP COMPANY
[Stage Direction]
On the orders of the day:
Hon. J. C. ELLIOTT (Postmaster General) :: Mr. Speaker, yesterday the hon. member for Vancouver North (Mr. MacNeil) inquired whether or not there was any provision in the mail contracts affecting the Union Steamship Company. I have made inquiry, and my information is that there are no contracts between the Post Office department and the Union Steamship Company in regard to the carriage of mail.

Wheat Board


CANADIAN WHEAT BOARD
[Stage Direction]
The house resumed from Wednesday, March 25, consideration in committee of the following proposed resolution-Mr. Gardiner -Mr. McPhee in the chair:
That it is expedient to bring in a measure to provide for the payment of certain sums of money to the Canadian Wheat Board for distribution to primary producers of wheat in the provinces of Manitoba, Saskatchewan and Alberta who delivered wheat grown in 1930 to Canadian Cooperative Wheat Producers, Limited, through their respective pool organizations, for the payment by the Canadian Wlieat Board to Canadian Cooperative Wheat Producers, Limited, of the net credit balance resulting from transactions by Canadian Cooperative Wheat Producers, Limited, in respect of coarse grains grown in the year 1930, and for the payment of the reasonable expenses incurred in carrying out the provisions of the act.
Hon. J. G. GARDINER (Minister of Agriculture) :: Mr. Chairman, before proceeding I should like to ask a favour of the committee. Last evening I was asked to lay on the table a copy of the auditors' report, and of necessity at the time I had to place on the table my own marked copy, which of course is not really a government document. It has many notes on it that have nothing to do with a government document, and I would suggest that I now place on the table a clean copy and have my own returned.


Richard Bedford Bennett: I think the matter should have been raised when the Speaker was in the chair, Mr. Chairman, because it touches the privileges of the house, over which the chairman has no control. I see no reason why the object sought should not be attained.


Mr. MACKENZIE KING:: The document was originally placed on the table when the house was in committee.


Richard Bedford Bennett: Surely, but that is another matter entirely.


Mr. LAPOINTE (Quebec East):: The whole thing happened in committee and we are still in committee.


Richard Bedford Bennett: But the document became a document in the custody of the house, and the Speaker is the only officer who controls the house. It does not matter, when a member reads from a document and then lays it on the table, whether the house is in committee or the house itself is in session; it is in the custody of the house.


Ernest Lapointe: The house had resolved itself into committee of the whole when yesterday's discussion took place,
and my right hon. friend asked that a certain document be placed on the table. That was in the committee, while the committee was sitting on this particular resolution, and we are still sitting in committee of the whole. This is but a continuation of the proceedings of yesterday, and I do not see why we should ask the Speaker to take the chair.


Richard Bedford Bennett: I did not suggest that he should take the chair. I said that the motion should properly be made when the Speaker is in the chair because when the mace is not on the table the house is not properly in session. That is all I suggested, simply as a matter of procedure; but I have no objection because the object sought, as expressed by the minister, that there should be a clean copy on the table of the house, is very desirable.


James Garfield Gardiner: Just before the close
of the debate yesterday afternoon there was some discussion with regard to two other documents which are original documents, one being the report to council, and the other being the order in council based upon such report. I inquired this morning as to the possibility of having these documents placed upon the table. I was informed by the clerk of council that it is a thing that has never been done before, and in his opinion it is not a proper thing to do. On every previous occasion upon which documents of this kind have been produced the clerk has been called. On one occasion during the last parliament I think the clerk was called to produce documents of this kind before a committee of the house. But it is the opinion of the government, in view of the undertakings given last evening to the leader of the opposition, that these documents should be placed upon the table of the house in order that he may have an opportunity to review them. I would say, however, that a definite undertaking has been given to the clerk of council to return these documents immediately after the sitting to-day in order that they may be placed back among the records where they belong, and with that understanding I will place them before the committee. But before doing so, I desire to read the documents into the record of Hansard.
We have first the report. There was some discussion last evening in regard to the procedure that is followed in having an order in council drafted and having it placed before council, and as to when an order in council really becomes an order in council. I do not know that I agree entirely with all that was put on Hansard yesterday by the leader of the opposition in connection with this

Wheat Board

matter, but I was pleased to note when I read Hansard this morning that he got back to the same position as that from which I started at the beginning of the proceedings yesterday; for before the end of the day he was calling this document an order in council even before it had actually been signed in council. After it had been drafted by the clerk of council and sent to council the right hon. leader of the opposition said it was quite common to refer to it as an order in council. In that sense I was referring to it at the beginning of the discussion yesterday, and I assume in view of the opinion offered by the leader of the opposition I was well within my rights in referring to it as such.
The document I have now in my hand is the other document which was brought up in the discussion yesterday, namely, the report. If one were to stop at certain stages of the discussion that took place yesterday, and did not continue reading to the end, one might gather that what I was referring to at the beginning of my remarks on that occasion was the report to council and not the order in council itself. But I want to make it perfectly plain to-day that what I was referring to yesterday during all the discussion was the order in council itself-'the draft order in council that was described to the committee, and the final order in council after it was signed.
The report to council is based upon opinions that were apparently given in the first place by way of recommendation by the Minister of Finance to council, and I want to read that in full. It is as follows:
Ottawa, October 8, 1935.
It will be noted that the date is two days before the final drafting of the order in council:
Ottawa, October 8, 1935. To His Excellency the
Governor General in Council,-
The undersigned has the honour to report that the Canadian Wheat Board is empowered by section 7 (f) of the Canadian Wheat Board Act (25-26 George V, chapter 53), to acquire from Canadian Cooperative Wheat Producers, Limited, upon terms to be approved by the governor in council all wheat or contracts to purchase or take delivery of wheat in respect of which the government of Canada has given a guarantee.
The undersigned further reports that Canadian Cooperative Wheat Producers, Limited, has now offered to sell and transfer their wheat and contracts to purchase or take delivery of wheat in respect of which the government of Canada has given a guarantee upon the terms set out in the following letter from the president of said Canadian Cooperative Wheat Producers, Limited:

Canadian Cooperative Wheat Producers
Limited,
Wheat Pool Building,
Winnipeg, Canada.
October 8, 1935. The Canadian Wheat Board,
423 Main Street,
Winnipeg, Manitoba.
Gentlemen:
Under the provisions of the Canadian Wheat Board Act, 1935, it is provided by section 7 (f) that your board shall have power to acquire all wheat and contracts to purchase wheat, from the Canadian Cooperative Wheat Producers, Limited, upon terms to be approved by the governor in council.
On behalf of the Canadian Cooperative Wheat Producers, Limited, I hereby offer to sell and transfer to your board all wheat or contracts to purchase or take delivery of wheat in respect of which the government of Canada has given a guarantee, such sale or transfer to be upon the following terms:
(a)	The Canadian Wheat Board assumes all liabilities of the Canadian Cooperative Wheat Producers. Limited, in respect of the said wheat and the said contracts, for advances made in connection with the acquisition and holding thereof by the following banks:
Bank of Montreal
Royal Bank of Canada
Canadian Bank of Commerce
Dominion Bank
Imperial Bank of Canada
Bank of Nova Scotia
Bank of Toronto.
(b)	The Canadian Wheat Board will pay to the Canadian Cooperative Wheat Producers, Limited, the sum of eight millions, two hundred and sixty-two thousand, four hundred and fifteen dollars and thirty-seven cents ($8,262,415.37), being the sum total of balances due to the primary producers, and expenses and other charges in connection with the holding and handling of the wheat.
Yours very truly,
L. C. Brouillette,
President.
Just at this point I should like to make this statement: There is written in in the report at that point these words in pen and ink, "This to be verified by auditor's certificate." That is initialled by an initial which I am given to understand is that of the then Prime Minister, the present leader of the opposition (Mr. Bennett). He will be in a position to verify that or otherwise when he sees the order.


Mr. COLD WELL:: After the word "producers" is the next word "and" or "the."


James Garfield Gardiner: The word is "and." It reads, "being the sum total of balances due to the primary producers, and expenses and other charges in connection with the holding and handling of the wheat." Then written in in pen and ink and initialled by the leader of the opposition are the words, "This to be verified by auditor's certificate."


Charles Avery Dunning: Into the letter.

Wheat Board


James Garfield Gardiner: Yes, into the letter. I continue to read from the report to council:
The undersigned further reports that the Canadian Wheat Board has accepted the offer so made by the following letter signed by the chairman of the Canadian Wheat Board:
The Canadian Wheat Board,
423 Main Street,
Winnipeg, Canada.
Canadian Cooperative
Wheat Pool Building, Winnipeg, Manitoba.
October 8, 1935. Wheat Producers,
Limited,
Gentlemen:
I beg to acknowledge receipt of your letter of even date.from the president of Canadian Cooperative Wheat Producers, Limited, offering to sell and transfer all wheat or contracts to purchase or take delivery of wheat in respect of which the government of Canada has given a guarantee, upon terms therein set out. 1 beg to inform you that the Canadian Wheat Board is prepared to acquire the said wheat and contracts on the terms mentioned in your letter and I am directed to accept your offer accordingly.
Yours very truly,
John J. McFarland,
Chairman.
The Canadian Wheat Board.
The initial there is "J" but I think the proper initial is "I." I quote:
The letters aforesaid were exchanged at Winnipeg, this 8th day of October, 1935. The undersigned has the honour to recommend that the terms of acquisition set out in the aforesaid letters be approved.
Respectfully submitted,
Edgar N. Rhodes,
Minister of Finance.
At the bottom are the initials "O.K." and "R.B.B." Before reading the next document there is one thing I should like to point out. I am informed that on October S, 1935, this note which is written in in pen and ink and initialled by the present leader of the opposition was not in this document. It was not there on October 8 for reasons that will be given in the next document that I am about to read. It is in the document as it now stands, but there is nothing to indicate the date upon which those words were put in. In a public document of this kind I think it would have been quite proper to have the date put in at the time.


Mr. CAHAN:: Is that the report to council?


James Garfield Gardiner: Yes, this is the report to council. Particularly so since the date is different from October 8, or so I am given to understand.


Charles Hazlitt Cahan: I have changed1 reports to
council several times.


Mr. McLEAN (Melfort):: On what date was it drafted?


James Garfield Gardiner: On October 8.


Malcolm McLean: The same date as the letters were exchanged in Winnipeg?


James Garfield Gardiner: Yes.


Malcolm McLean: Quick work on the part of the mail service.


James Garfield Gardiner: It is quite possible they may have been here beforehand. A memorandum was then prepared in Ottawa by Mr. Rhodes, then Minister of Finance, and dispatched to Montreal by special messenger. This was addressed to the Honourable Messrs. Cahan and Gendron and reads:
Ottawa, October 8, 1935.
Memorandum for Hon. Messrs. Cahan and Gendron:
The attached minute of council, which I have signed, is sent to you for signature.
I am sorry the hon. member for South York (Mr. Lawson) is not here to-day; he was here ' last evening. I quote:
Hon. Mr. Lawson will be asked to sign it here on Thursday morning, making the four signatures. The report to council is based upon an outline in memorandum form from the Prime Minister of the proposed terms of transfer. I am asking you to sign the minute on the understanding that the order in council will not be issued until the Prime Minister has indicated his approval of the wording and terms. I am having the report sent to him concurrently so that he may sign it it "approved."
Edgar N. Rhodes,
Minister of Finance.
It will be noted that this letter was dispatched between October 8 and October 10.
I understand that on the morning of October 10, on the same day or about the same time, the report was dispatched to the then Prime Minister in the city of Toronto and signatures were obtained to the document in the form in which it then was. That was without the ink inscription written in the order in council.


Charles Hazlitt Cahan: But on the clear understanding which the hon. gentleman has read.


James Garfield Gardiner: I am giving the clear understanding. I am reading all the way through and hon. gentlemen can take whatever they wish from it and from the discussion yesterday. Apparently the report was sent to Toronto and this note written in at Toronto on October 10, and initialled by the then Prime Minister; and the minute of council, which was at that time the form in which the order was, had it been signed -
Wheat Board


Charles Hazlitt Cahan: It was not an order and could not be in such form so as to be signed as an order.


James Garfield Gardiner: I would ask the hon. gentleman to read his own leader's statement of last night in this connection.


Charles Hazlitt Cahan: I have not read it, but I say that a draft order-


Some hon. MEMBERS:: Order.


Charles Hazlitt Cahan: The hon. gentleman has brought in my name and is making insinuations. It was not an order and could not be an order until it had been passed or approved and initialled by His Excellency the Governor General.


James Garfield Gardiner: While we are on that point we had better clear it up. There was only one way in which it could become an order in council in the sense in which the hon. member indicates that it is an order in council.


Charles Hazlitt Cahan: That is the only sense in which a document is an order in council.


James Garfield Gardiner: Only by one of two ways could it become an order in council. First there would have had to be called a meeting of council in the council chamber and this report would have been submitted to council and signed by the chairman of council. That is one way in which it could become an order in council, and then it would be submitted to the governor general, and when his signature was appended it would be a completed order in council. That is the way most governments do it under most circumstances. But there are of course extraordinary circumstances under which they have to do something else occasionally, and I understand that the procedure then followed is to get the signature of four members of the council to the final form of the order in council-not to any interim form but to the final form of the order in council-and each of them sees the final form when he is signing the document. That is the general procedure, but that was not the procedure followed in this case. This minute was sent to Montreal to be signed by two members of the council after the Minister of Finance himself had signed it here in Ottawa: The statement was made that their signatures would be attached, first, the Prime Minister would be consulted as to his views and then the matter would be submitted to the Hon. Mr. Lawson, who was to be the fourth signer of the document; and Mr. Lawson was apparently correct in saying last night-or at any rate he left the

inference with the house-that all the words were in it when he signed it. So much for the report itself.
This is the order in council-and this is not an interim order in council but the final order in council, the one I was describing yesterday from my memory, having seen it. I had not previously seen the two documents formerly read but this morning I had them produced and I read the documents over. This order in council is the document which I was describing yesterday, with respect to which I said, towards the close of the discussion, that probably the hon. member for South York (Mr. Lawson), who raised the objection, having signed the document, would agree with everything I had said in describing it. I have no doubt that if he were here to-day he would agree that what I said was correct.


Charles Hazlitt Cahan: Are you referring to the report or to the order in council?


James Garfield Gardiner: To the order in council. This is the original. I read this document yesterday in the copied form but I think I had better read it again so that it may appear on Hansard just as it is:


P.C. 3199
[Stage Direction]
At the Government House at Ottawa Thursday, the 10th day of October, 1935.
Present:
His Excellency
the Administrator in Council-
Whereas the Canadian Wheat Board is empowered by section 7(f) of the Canadian Wheat Board Act (25-26 George V, chapter 53), to acquire from Canadian Cooperative Wheat Producers, Limited, upon terms to be approved by the governor in council all wheat or contracts to purchase or take delivery of wheat in respect of which the government of Canada has given a guarantee;
And whereas the Minister of Finance reports that Canadian Cooperative Wheat Producers, Limited, has now offered to sell and transfer their wheat and contracts to purchase or take delivery of wheat in respect of which the government of Canada has given a guarantee upon the terms set out in the following letter from the president of said Canadian Cooperative Wheat Producers, Limited:
"Canadian Cooperative Wheat Producers,
Limited,
Wheat Pool Building,
Winnipeg, Canada.
October 8, 1935.
The Canadian Wheat Board:
423 Main Street,
Winnipeg, Manitoba.
Gentlemen:
Under the provisions of the Canadian Wheat Board Act, 1935, it is provided by section 7 (f) that your board shall have power to acquire all wheat and contracts to purchase wheat from

Wheat Board
the Canadian Cooperative Wheat Producers, Limited, upon terms to be approved by the governor in council.
On behalf of the Canadian Cooperative Wheat Producers, Limited, I hereby offer to sell and transfer to your board all wheat or contracts to purchase or take delivery of wheat in respect of which the government of Canada has given a guarantee, such sale or transfer to be upon the following terms:
(a)	The Canadian Wheat Board assumes all liabilities of the Canadian Cooperative Wheat Producers, Limited, in respect of the said wheat and the said contracts, for advances made in conection with the acquisition and holding thereof by the following banks:
Bank of Montreal Royal Bank of Canada Canadian Bank of Commerce Dominion Bank Imperial Bank of Canada Bank of Nova Scotia Bank of Toronto.
(b)	The Canadian Wheat Board will pay to the Canadian Cooperative Wheat Producers, Limited, the sum of eight millions, two hundred and sixty-two thousand, four hundred and fifteen dollars and thirty-seven cents ($8,262,415.37), being the sum total of balances due to the primary producers, and expenses, and other charges in connection with the holding and handling of the wheat.
Yours very truly,
L. C. Brouillette,
President."
Now, therefore, His Excellency the Administrator in Council, on the recommendation of the Minister of Finance, is pleased to approve the terms of acquisition set out in the aforesaid letters and they are hereby approved accordingly.
Subject to the amount referred to in paragraph (b), page 2 hereof, being verified by auditors certificates.
This latter part:
Subject to the amount referred to in paragraph (b), page 2 hereof, being verified by auditors certificates.
-is initialled at both ends by the Minister of Finance, Mr. Rhodes, and it is written in in pen and ink. Then the signatures at the bottom are: Edgar N. Rhodes; Lucien H. Gendron; C. H. Cahan; J. Earl Lawson; and it is approved by L. P. Duff "10 X. 35 that is, the 10th day of the 10th month of the year, 1935. Then I have on the back of this, which is kept on the record as a part of the record in order to indicate the time at which the instruction came from Toronto to make this change, the telegram which I read to the house yesterday. I have the original here which was reported in Ottawa on October 10, 1935 at 11.40 a.m. It left Toronto on October 10 at 11.35 a.m., and arrived here delivered five minutes later:
There was an amendment at that point in the recommendation to council which does not appear at this point in the order itself. Going on with the order:
And whereas the minister further reports that the Canadian Wheat Board has accepted the offer so made by the following letter signed by the chairman of the Canadian Wheat Board:
The Canadian Wheat Board,
423 Main Street,
Winnipeg, Canada.
October 8, 1935.
"Canadian Cooperative Wheat Producers,
Limited,
Wheat Pool Building,
Winnipeg, Manitoba.
Gentlemen:
I beg to acknowledge receipt of your letter of even date from the president of Canadian Cooperative Wheat Producers, Limited, offering to sell and transfer all wheat or contracts to purchase or take delivery of wheat in respect of which the government of Canada has given a guarantee upon terms therein set out.
I beg to inform you that the Canadian Wheat Board is prepared to acquire the said wheat and contracts on the terms mentioned in your letter and I am directed to accept your offer accordingly.
Yours very truly,
John I. McFarland,
Chairman,
The Canadian Wheat Board." The letters aforesaid were exchanged at Winnipeg the 8th day of October, 1935.
B. J. Roberts,
Department of Finance,
Ottawa, Ont.
Just received consideration. Report approved subject to following change, section (b), page 2. Add this to be verified by auditors
certificates.	_ _
W P, TTnnter.
So that it will be seen that the letter in the first instance was drafted on October 8 and messengers sent to Toronto and Montreal about the same time to get this matter dealt with, and these messengers returned: with the signed document, returned to Ottawa in time for signature here on the tenth, not only by those who were here; I assume that Mr. Lawson was found somewhere after that and his signature obtained after the document came back from Montreal. Then the signature of the governor general was obtained, and this document then became a full-fledged order in council. That is the whole course through which it has gone, and, I submit, it is the entire story so far as the government understands it in connection with this order in council and the report that preceded it.
Charles Hazlitt Cahan: What is the inference we are to take from all that?


James Garfield Gardiner: Well, hon. gentlemen took many inferences from it last night. There was no inference taken from it in so far as the government was concerned, or in so far
Wheat Board

as I as minister introducing the resolution was concerned, other than in an attempt to answer a civil question put to me by the leader of the opposition in a civil way I was explaining the delay by indicating that these words were written in after the order in council was first drafted.


Charles Hazlitt Cahan: Would the hon. gentleman pardon me? I was not here yesterday; I am sorry I was absent on a committee of the house. But on reading the report this morning I was astounded to find that the hon. gentleman said, on page 1444:
The first order in council ended at that point.
And then again, on page 1445, he says:
"A change in the order in council."
Do not let us get into a quarrel over an improper application of the words.


James Garfield Gardiner: I would ask the hon. gentleman to turn, if he does not mind, to page 1462 of Hansard and read the words of bis own leader, at the bottom, in the left hand corner of the page, beginning:
The hon. gentleman is a better judge of that than I am. Let me proceed by pointing out the proposed order in council is not drawn by the minister. The clerk of the privy council takes the recommendation and on the recommendation he drafts the order in council


Charles Hazlitt Cahan: Yes, certainly.


James Garfield Gardiner: -which is sent in to council.


Charles Hazlitt Cahan: Yes.


James Garfield Gardiner: Those are his words.


Charles Hazlitt Cahan: But if the hon. gentleman
will allow me a moment-


James Garfield Gardiner: Just a minute. I
allowed a lot of moments yesterday. I want to complete my story and then you can tell yours.


Charles Hazlitt Cahan: Tell it straight and clearly, so that there may be no misunderstanding.
Mr. GARD'INER: I am reading from page 1462:
The clerk of the privy council takes the recommendation and on the recommendation he drafts the order in council which is sent in to council.


Richard Bedford Bennett: When they are considering-


James Garfield Gardiner: Just wait till we get
through the whole thing. Then the Minister of Finance says "order in council," with

a question mark after it. Mr. Bennett says, "Yes, which he sends in to council," using exactly the same term with reference to this document that I was using.


Charles Hazlitt Cahan: No, entirely different.


Some hon. MEMBERS:: Order.


Charles Hazlitt Cahan: The hon. gentleman has
brought my name into this matter and he is making a misstatement; therefore I wish to correct it, and I will assert my right to correct it.


James Garfield Gardiner: Well, Mr. Chairman,
if I am making a misstatement I am simply reading what the leader of the opposition said yesterday.	.


Charles Hazlitt Cahan: And adding to it what is
inaccurate.


James Garfield Gardiner: I am not adding anything to it.


Charles Hazlitt Cahan: Yes, you are; you are
making a statement.


James Garfield Gardiner: Mr. Dunning: Order in council?
Mr. Bennett: Yes, which he sends in to council.
Mr. Dunning: The hon. gentleman is falling into the very error-
And before he could complete the statement-
Mr. Bennett: It is a proper term to use-a draft order in council.


Charles Hazlitt Cahan: Quite so.


James Garfield Gardiner: He apparently slipped
into the same error as my hon. friend had accused me of slipping into. He said "order in council" and left the word "draft" off. Of course any person in this house has the right to correct himself, and he corrected himself.


Charles Hazlitt Cahan: No, he did not. He said
what was correct in the first place.


James Garfield Gardiner: He did, very early in it, and I am coming back to it in a moment just to indicate to my hon. friend that I did the same thing.
When it is passed by council and signed by the president of the council it is still not an order in council;-
He is going on to make an explanation of the remark that he made previously.
-but when the administrator or the representative of the crown-whether the governor general or the administrator-signs it and marks on it "approved," then it becomes an order in council.


Charles Hazlitt Cahan: Hear, hear.

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James Garfield Gardiner: Perfectly correct. Now let us go back to page 1444:
Now. Mr. Chairman, the original order in council ended there.


Charles Hazlitt Cahan: Yes.


James Garfield Gardiner: That is myself speaking.


Charles Hazlitt Cahan: Without the additional words.


James Garfield Gardiner: Just a minute; you had better read it all the way through before-


Charles Hazlitt Cahan: I have read it.


Some hon. MEMBERS:: Order.


James Garfield Gardiner: The original order in council ended there, that is the order in council before it was actually signed and had become a legal order in council legalizing this contract.
I made exactly the same explanation as my friend the leader of the opposition made in a little different words.


Charles Hazlitt Cahan: In very different words.


James Garfield Gardiner: The first order in council ended at that point.


Charles Hazlitt Cahan: That is the first order in council?


James Garfield Gardiner: Let us go on and read the other words:
Had the order in council been signed without any addition to it, that order in council would have meant exactly what the leader of the opposition stated a few moments ago it did mean, namely that payment could have been made on October 10 or any time after that by any government that was in power, and had it been intended-
Then my hon. friend stepped in in order to prevent the next remark, and presumed the intention before I had made the remark; and I can understand that now, having seen these documents.


Richard Bedford Bennett: Well, he was not here, and had not seen them.


James Garfield Gardiner: Of course I assume he saw the documents he put his initials on.


Richard Bedford Bennett: Certainly, but not the document-


Some hon. MEMBERS:: Oh, oh.


Richard Bedford Bennett: That is not even clever.


Charles Hazlitt Cahan: Will my hon. friend allow me to see the document he is referring to?


James Garfield Gardiner: If he goes through the next two or three columns he will find that
it is an explanation of the very same thing. In fact it took me several columns before I could really explain what constituted the order in council-


Charles Hazlitt Cahan: Well, you did not do it last night.


James Garfield Gardiner: And I can quite understand why to-day, having these documents in front of me. Anyone who will agree that an order in council was properly drafted and properly passed when three members signed it before it was in its final form on the understanding that some other one was going to agree, belongs to the kind of government we had five years too long in this country.


Charles Hazlitt Cahan: Will the hon. gentleman
please send the documents over so that one can read them?


James Garfield Gardiner: Well, Mr. Chairman, I should like to place this in the hands of the clerk of the house.


Charles Hazlitt Cahan: Has the hon. gentleman finished?


James Garfield Gardiner: Yes, for the moment.


Charles Hazlitt Cahan: Well, Mr. Chairman, the hon. gentleman has brought my name into this and I desire to make a statement.


James Garfield Gardiner: Before the hon. gentleman speaks, I object to his saying that I brought his name into it. Whoever wrote that memorandum brought his name into it.


Charles Hazlitt Cahan: Well, my name has been brought into it. I am not anxious to split hairs or misconstrue words, but if the hon. gentleman had had experience, as I assume he had, he would know that when a report is made to council a draft of that report is prepared by the clerk of council for submission to council but that is simply a draft. I have seen a report of my own come before council on an extract made from the report as a draft minute of council to be discussed. I have seen it changed time and time again during the discussion, retyped, sent back again with further amendments, suggestions and insertions written on the side, and finally typed again by the clerk before being finally passed by council. Then if there were some corrections to be made in its form as then finally prepared, which corrections could be made easily in ink, they were made in that way. It simply means that council, by discussion, has to review all the incidents relating to the case and to consider the draft minute, which is not a draft order in council but a minute proposed for the consideration
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of council. When you have around the council board a dozen men taking as large a part in the discussion of the terms of a proposed order in council as was the case during the time I served on council, you find that in the complex and intricate cases, which are to be dealt with, often the report is very dissimilar from the minute as then passed by council and submitted to the governor general for his signature. I infer that if the members of the present government are equally careful they will find that frequently draft minutes prepared by themselves or by their colleagues are subject to change following discussion, and are changed very materially indeed before being initialled either by the members present or by the president of the council.


Mr. GRAY:: Will the hon. member permit a question?


Charles Hazlitt Cahan: Certainly.


Ross Wilfred Gray: Will the hon. gentleman tell the committee whether the document, not the report but the actual order in council which bears his signature, contained the words written in ink at the time he signed it in Montreal? To my mind that is the crux of the whole situation; did it or did it not?


Charles Hazlitt Cahan: As far as I have read the draft P.C. 3199 it does not bear my signature.


Ross Wilfred Gray: I refer to the document bearing the hon. gentleman's signature.


Charles Hazlitt Cahan: This order in council does not bear my signature.


Ross Wilfred Gray: Mr. Chairman, if I might explain, because I do not want to mislead the hon. gentleman, there are two documents, the report and the actual order in council. What I asked the hon. gentleman was this: The actual order in council bears his signature, apparently signed in Montreal. At the time he signed it were the words written in ink there?


Charles Hazlitt Cahan: Wait a moment. In this document, which is evidently the document subsequently signed by His Excellency and marked by me-


Ross Wilfred Gray: Bearing your signature.


Charles Hazlitt Cahan: Bearing my signature. That document was submitted to me. Where is the letter that accompanied it?


James Garfield Gardiner: It is on the back of
the report.


Charles Hazlitt Cahan: On the back of this report,
which was the report of the Minister of Finance upon which council was acting, there is this letter from him:
The attached minute of council, which I have signed, is sent to you for signature. Hon. Mr. Lawson will be asked to sign it here on Thursday morning, making the four signatures. The report to council is based upon an outline in memorandum form from the Prime Minister of the proposed terms of transfer. I am asking you to sign the minute on the understanding that the order in council will not be issued until the Prime Minister has indicated his approval of the wording and terms. I am having the report sent to him concurrently so that he may sign it "approved."
I signed this other document on the side before the words " subject to the amount referred to in paragraph (b), page 2 hereof being verified by auditors certificates," were inserted. Those words were not there when I signed. In reading that I cannot recall my conversation-


James Garfield Gardiner: That is not the point.
Were the words on the order in council?


Charles Hazlitt Cahan: I have stated my case very clearly and with some care, and I stand by my words.


William Lyon Mackenzie King: May I ask my hon. friend another question?


Charles Hazlitt Cahan: Allow me to complete my
answer to the first question, and I will give the Prime Minister every opportunity.


James Garfield Gardiner: I want to clear up that point. When my hon. friend read the words that he said were not there he read from the report. Were the words in the order in council when he signed his name?


Charles Hazlitt Cahan: Just a moment and I will
deal with that; I am making a statement, and there will be no doubt as to the veracity of my statement. When I read this document that was sent to me, and which I signed, I cannot recall the conversation I had with the messenger. I do not even remember his name, but I think he was a messenger from the Department of Finance; that is my memory about it. I read that report with very great care, and I would not be surprised now to be told that I said to the messenger at the time that I thought these amounts ought to be verified or audited, or something of the sort. I am sure there was some apprehension in my mind at the time with regard to paying out such a large amount of money unless the accounts were properly certified. Whether and to what extent I made that known to the messenger on the morning he came to me I cannot now recall. I remember my own appre-

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hensions with regard to it, but I was not so fully acquainted with these transactions as was the Prime Minister, and the document I signed was signed on the clear understanding that the final form for that order was to be submitted to the Prime Minister, who had a special responsibility in the matter, and that its terms should be approved of by him, or that it should be approved with the terms in it which he regarded as necessary to safeguard the interests of the public.


Ross Wilfred Gray: Does the hon. gentleman suggest that it would be a legal document?


Charles Hazlitt Cahan: I have no doubt it is a
legal document. There can be no possible doubt that it is a legal document.


Ross Wilfred Gray: After three or four members of the council have signed a document, with the Prime Minister-it may be the Prime Minister, or some other member of the privy council

after three hon. gentlemen have signed it, then it can be altered and still be a legal document?


Charles Hazlitt Cahan: Certainly it is a legal document, when once it has been signed and approved by His Excellency the Governor General.


Some hon. MEMBERS:: Oh, oh.


Charles Hazlitt Cahan: But wait a minute, wait a minute. I am reserving ample time for the Prime Minister to speak. If the hon. member who has just spoken had been in council many times either under the previous prime minister or the present one he would know that in drafting these minutes of council the views of members of the council have to be taken into consideration. Frequently they are left for the final form to be drawn up by the clerk of the council, after full consultation with the members of the council chiefly concerned.
I have no hesitation in saying that in my opinion that is a legal document, and secondly I have no hesitation in saying that so far as my signature went-and I can speak only for myself-the words which are inserted were properly inserted and were not in contravention of or inconsistent with the terms and conditions under which I gave my signature.


William Lyon Mackenzie King: Now that the hon. member has spoken, may I ask him a question? The hon. member just now had in his hand the draft order in council which he signed. There is no question that he signed the draft order in council.


Charles Hazlitt Cahan: Correct


William Lyon Mackenzie King: Which contained a certain number of sections.


Charles Hazlitt Cahan: Yes.


William Lyon Mackenzie King: Attached to the draft order in council is a telegram or memorandum from which he read.


Charles Hazlitt Cahan: Yes.


William Lyon Mackenzie King: Which sets forth the conditions under which he signed it.


Charles Hazlitt Cahan: Yes, quite so.


William Lyon Mackenzie King: As I listened to the words which appear in the memorandum, they were to the efiect that he was signing, subject to the approval of its wording and terms by the Prime Minister.


Charles Hazlitt Cahan: Yes.


William Lyon Mackenzie King: Is that correct?


Charles Hazlitt Cahan: Yes.


William Lyon Mackenzie King: Subject to the approval of its wording and terms?


Charles Hazlitt Cahan: Yes.


William Lyon Mackenzie King: Its wording and terms, as I understand it, would be the wording and terms as they were when my hon. friend signed it.


Charles Hazlitt Cahan: Well,-


William Lyon Mackenzie King: Not wording
and terms which the Prime Minister might put on after my hon. friend has signed it.


Charles Hazlitt Cahan: Would the Prime Minister allow me to speak?


William Lyon Mackenzie King: Yes.


Charles Hazlitt Cahan: I, in the midst of an election contest-


Charles Avery Dunning: There is the answerl There; there; there is the answer!


Charles Hazlitt Cahan: I cannot pretend to be absolutely accurate, and I wish the late minister of finance were here, but my own impression is, and I have no doubt, that even after he had received that draft he telephoned me as to the wording of it, and asked if my approval still held to it. I cannot give an absolute statement with regard to it, but that is my impression.


William Lyon Mackenzie King: I do not wish to embarrass my hon. friend.


Charles Hazlitt Cahan: You cannot embarrass me.


William Lyon Mackenzie King: But I wish to make the situation clear to hon. members in
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the house. I may say at times, when it has been difficult to get the complete council together, the Prime Minister has sent the clerk of the council with the document to be signed-


Charles Hazlitt Cahan: My right hon. friend often did.


William Lyon Mackenzie King: Not very often.


Charles Hazlitt Cahan: Occasionally.


Richard Bedford Bennett: By post.


William Lyon Mackenzie King: It has been done, but not by post, and signed by colleagues. But I know of no case, at any time, where colleagues were asked to sign a document, and where the Prime Minister himself thereafter exercised a right to alter that document thus signed, either by adding to or subtracting from its contents, or changing it in any way. If my hon. friend had signed, and his colleagues had signed, and the Prime Minister had signed the document just as it was presented to them, then I would say there could be no objection to what was done. In that case the colleagues would have been doing exactly what the memorandum said they should do, namely to sign subject to the approval of its words and terms by the Prime Minister. But when the document was altered after they had signed it, a very different situation altogether arises.


Charles Hazlitt Cahan: I have no hesitation in saying frankly what took place, so far as I was concerned. I know that when that document was presented to me I had some doubts in my own mind with regard to paying out this large amount of money unless it was properly certified. As to how far I went with the messenger, I do not know; but in the discussion with the messenger which lasted, I remember, for some minutes, I made it perfectly clear that I was signing it under the terms of the letter which was addressed to me, and that I expected Mr. Rhodes, as the Minister of Finance of the day, to see that every proper safeguard was taken with regard to it. I will not now say, because I had so many telephone messages-but my impression at this time is that subsequently the Minister of Finance telephoned me in regard to it, and therefore my approval of or consent to that order in council undoubtedly was clear, and my consent to it, in the terms in which it finally passed, is undoubtedly clear in my own mind. There is no doubt about that.
As to the other matter, I trust the Prime Minister will not hesitate to make it clear to the committee that a report or application to council is not an order in council, and cannot properly be so described. I am sure

he will recognize, as I do after five years of experience, that a synopsis or precis of a minister's report to council is made by the clerk of the council for its consideration, and that that precis is not an order in council, but once that precis is put before council for consideration it is open to the criticisms and suggestions of every member sitting around the council table. As it is discussed, from time to time amendments are made, deletions are made and additions are made before the minute is sent up for the approval of His Excellency the Governor General. Otherwise you would reduce the members of council to mere automatons. I know in my experience that I have raised an awful fuss about the precis coming from some of my colleagues; though on the other hand perhaps my colleagues were not extreme in their criticism of my measures because, coming as they did from the office of the Secretary of State, they were not so important. Often the Prime Minister has to take a document to the governor general because of explanations he may require. I remember on one occasion I was sent with a very important document which emanated from my department to make my explanations to His Excellency the Governor General, who required a special explanation about it. But it is only when his excellency's initials are placed upon that document that it becomes an order in council, and I believe the confusion and the embarrassment due to the recriminations uttered on both sides of the house are due largely to the fact that hon. members have been calling a document an order in council before it became an order in council, when in fact it was a mere draft or precis for the consideration of council.


Mr. LAWSON:: Yesterday I said that after I had the opportunity of reading Hansard of yesterday with respect to what had been said by the Minister of Agriculture I might wish to say something. On reading this morning what was said yesterday I must confess I took the interpretation I did take yesterday from what I might describe as inaccurate or loose language in the description of a document used by the Minister of Agriculture. Late yesterday I understood the minister to say that he intended no aspersion, so far as I was concerned, and I accept that statement.
I should probably add just one thing more. So far as the document is concerned which is produced to-day, dated October 10, 1935, and which has been called an order in council, and which bears the signature of certain gentle-

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men including myself, to the best of my knowledge, recollection and belief the document is now in the same condition as when I signed it, and any amendment thereto in my opinion and in my recollection was made before I signed the document.


Richard Bedford Bennett: Mr. Chairman, I desire
[DOT]to make a very brief explanation with respect to this matter. Yesterday the Minister of Agriculture (Mr. Gardiner) came to this house prepared apparently to enter into a long debate with respect to the order in council; for he had his documents and papers with him. Of course we had no antecedent knowledge that such was intended, and therefore no preparation in any way had been made to deal with it. He produced the document at once, a copy of the order in council, and made a statement regarding the telegram, which he produced, from Toronto to Mr. Roberts, and made allegations that certain words had been written in, in ink, in the early progress of the debate, which none of us had any idea was to take that line. The language which was used, and to which reference has already been made, either was such as to leave the impression that a fraud had been committed on somebody by some government and that the crown had been asked improperly to approve an order in council, or was an effort to asperse the character of individuals who were not in this chamber to answer for themselves.
I said then that a large measure of responsibility must always rest upon a prime minister, and it now transpires that the question which was asked could have been answered in a very few words. I asked a simple question and, as the Minister of Agriculture says, a civil question, in a civil way. I asked what was the cause for the delay. The answer was that the order in council required the auditors' certificate, which had not been provided until January. That is the answer. But instead of that, yesterday we had an explanation which, read hereafter by those not familiar with the circumstances, would be apt to mislead them; for if the minister meant what he says to-day he meant, then the words that he used yesterday were certainly meaningless. I directed attention to the words as soon as they were used. I have had them marked in Hansard so that they might easily be referred to, but the essence of them was contained in the statement that apparently there had been two orders in council, that is, the first order in council and a later one. It now transpires bhat that was not what was intended, and the minister says that the loose way in which we all use words may be regarded as being responsible for that understanding of what took place.
If hon. members will look at Hansard, page 1444 and following pages to which the minister has referred, they will see that he speaks of the original order in council:
Now, Mr. Chairman, the original order in council ended there, that is the order in council before it was actually signed and had become a legal order in council legalizing this contract.
Then he said:
Now. these words were added. I say "added" advisedly.
I said:
There is a question of the gravest moment. He says these words have been added to it. When?
And the minister said:
I will give that information in a minute, if you will permit me. I will explain when, why and all about it. I would like to say to him that I have seen the original order in council.
But to-day he says he had not seen it until to-day.


Some hon. MEMBERS:: No. no.


James Garfield Gardiner: I said I had not seen
the report until to-day.


Richard Bedford Bennett: What he had seen was
a copy of the report to council.


James Garfield Gardiner: No, no.


Richard Bedford Bennett: Hansard is there. He
produced the report to which is attached the order in council. He said: I had not seen these papers, and I sent for them this morning.


James Garfield Gardiner: I think the hon. gentleman will accept my word. That was not my statement. I said I had not seen the report and the memorandum until to-day.


Richard Bedford Bennett: Hansard will speak for
itself. Perhaps the clerk will let me see the documents, please, that were tabled. The order in council which is attached to these documents, dated October 10, 1935, certainly has the words to which reference has been made, and in the handwriting of Mr. Rhodes. "Subject to the amount represented in paragraph (b), page 2 hereof, being verified by auditors certificates," with the initials "E.N.R." And in the preceding lines the words, " The letters aforesaid were exchanged at Winnipeg the 8th day of October, 1935," are also initialled, "E.N.R." These documents were part of the file, and I understood the minister to say this afternoon-


James Garfield Gardiner: I must correct the
hon. gentleman. There are two files, and the only file I saw was the file of orders in council. There is a file of reports separate from the file of orders in council.
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Richard Bedford Bennett: I accept what the hon.
gentleman has said; I am bound to, but it is not in accord with what was said yesterday. Then proceeding further, yesterday he said: "I say 'added' advisedly." Now there was only one order in council passed, and that order in council contained the words providing for a verification of the amount by auditor's certificate.
There remains for consideration a single question:	Were those words on the order
in council when it was passed? The answer that the minister gives from the evidence that he has produced is that those words were written by Mr. Rhodes before the order in council was submitted to His Excellency the Administrator for approval. That seems to be abundantly clear. But it is contended that the signatures, some four in number, are irregularly upon the order in council. The Minister of Finance (Mr. Dunning) shakes his head.


Charles Avery Dunning: Not the signatures.


Richard Bedford Bennett: I said the signatures, it
is contended, are irregularly upon the order in council because it is said that the signature of the Secretary of State was given to a document that was somewhat different from that finally passed.


Ross Wilfred Gray: The documents were irregular.


Richard Bedford Bennett: That cannot be so, for
the obvious reason that the document as finally passed by the governor in council- and there is a distinction in the use of words there; for the governor in council is the representative of the crown speaking through council, and an order in council becomes an order of the governor in council when he signs it. It might well be that there might be an order in council that was not approved because it is an order when the president of the council signs it; it is then the order of council, but it is not the order in council of the governor in council until the governor has signed it.


Charles Avery Dunning: It is largely a question
of terms.


Richard Bedford Bennett: Of course it is, but the
minister says that his difficulty has been that he finds there has been a misuse of terms by others, which he thinks is some justification for himself. Then he goes on to say that the order in council was then made to read in such and such a way. I do contend that if you read page 1444 and following pages

of Hansard the inference is dear that there had been an amendment of an order in council after it had been made an order in council by the approval of his excellency.


Some hon. MEMBERS:: No, no.


James Garfield Gardiner: No.


Richard Bedford Bennett: The minister says that
he makes no such assertion, and has no intention of making any such.


Ross Wilfred Gray: AVe know when the change was made.


Richard Bedford Bennett: The extra member of the government perhaps should not be so anxious to use the word "we" in such general terms.


James Garfield Gardiner: I should like to point out to the right hon. gentleman that in the present government we do not intend to take the position, at least I do not as the minister in charge of this bill, that no other member of the house has the right to speak because the government has a bill before the house.


Richard Bedford Bennett: The right to speak and the right to interrupt are entirely different. The right to arrogate to oneself the assumption of power which he does not possess is entirely different from the exercise of the right to speak in this chamber. Perhaps the hon. gentleman, now that he has said that the use of words are responsible for much that took place yesterday, will be a little more careful in the use of words.


James Garfield Gardiner: I think that my use of words compares very favourably with the right hon. gentleman's use of words.


Richard Bedford Bennett: I am sure it must be a delight to all to think that the leader of the opposition is a standard by which the hon. gentleman measures his own speech.
The fact is that the order in council provides the method by which the amount to be paid is to be ascertained. That is all. As the order in council stands before this committee it is an order that provides for the payment of money to be ascertained and verified by auditors who were to give a certificate. I think everyone will admit that that was in the public interest. One would think, after listening to what has been said, that the signing of reports, or orders if you like, in the period between the date of the issuing of the writs for an election and the date of the holding of an election was something wholly unusual, something never heard of before. When we came into office in 1930 we found a very large

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number of orders in council that had been signed by four members of the previous government between the date of dissolution and the separation of the ministers and the holding of the election. These orders were necessarily signed by four ministers in order that they might properly .be submitted to his excellency.


William Lyon Mackenzie King: May I say to my right hon. friend that there is no difference between us, in what he has said up to the moment, as to a number of ministers signing an order in council which has been approved by the terms in which it is before them, the order being properly signed by the required number of ministers and passing in that form. When my right hon. friend was Prime Minister did he consider that he was justified in adding any words he wished to a draft order in council already signed by his ministers, the draft then being considered a properly passed order in council?


Richard Bedford Bennett: Mr. Chairman, the right hon. gentleman has anticipated a phase of this discussion upon which I was about to embark. The whole theory of reports being made to council by the responsible minister is that they may be discussed in council. I pointed out many weeks ago, when it had been stated that it was a one man government, that hon. members had overlooked the fact that the president of the council had to call upon ministers to state why a certain action should be taken. They made their reports and upon those reports tfhe action was taken. Discussion took place freely and sometimes lasted many hours with respect to what action should be taken. In some instances the clerk, anticipating that action would be taken along the lines of the report, prepared a draft order. This has been done by successive clerks. I shall not review what has been said over and over again by the Secretary of State. These reports are not acted upon in their entirety. They are sent back to the ministers to be revised or rewritten, or changes are made therein counselled by the ministers. The order in council is then prepared. If time is pressing, interlineations are sometimes written into the body of the draft order in council itself and initialled by the president of the council and sent out in due course to the clerk of the council so that the approval of the executive may be obtained. If, after discussion, a conclusion is arrived at and the responsibility for the preparation of the document finally rests with the prime minister, his colleagues may say to him: "We have settled the principle, you will settle the order; if you will settle it and make the interlineations as we have
agreed upon them, we will sign on the distinct understanding that the principle has been settled." That happened not only under this government, but under many governments.


William Lyon Mackenzie King: I think I can put the situation in just a word. Does my right hon. friend see any distinction between a document which is signed, subject to the approval of its words and terms, and a document signed, subject to the approval of the words and terms of the Prime Minister? In one case the document is before those who sign and they sign with respect to its terms and words in toto. Those are the words that were on the memorandum which was before the ministers who signed prior to the time the then Prime Minister signed.


Charles Hazlitt Cahan: I certainly did not take that meaning from it.


Richard Bedford Bennett: Will the right hon. gentleman not make a speech now. If he desires to make one later, he can do so. The language of Mr. Rhodes, the then Minister of Finance, was:
I am asking you to sign the minute on the understanding that the order in council will not be issued until the Prime Minister has indicated his approval of the wording and terms.


William Lyon Mackenzie King: Nothing else, though.


Richard Bedford Bennett: Certainly not, but if the Prime Minister does not change the principle that has been agreed upon, if he uses other words to express the views upon which they have agreed, they accept and approve of that. The courts of the country have given judgments upon cases such as that, notwithstanding the observations made as to my knowledge of the law.


Ross Wilfred Gray: It changes the whole text.


Richard Bedford Bennett: There is no reason why the hon. member for West Lambton (Mr. Gray) should make himself abusive or insulting or obnoxious, because when he says that it changes the whole tenor of the document-


Ross Wilfred Gray: Quite.


Richard Bedford Bennett: It did not change it in a single sense because the order in council was to authorize the payment of a sum of money and the additions provided that the correctness of that should be ascertained by an auditor's certificate.


Mr. EULER:: If these words had not been inserted it would then have been obligatory to pay over something.


Richard Bedford Bennett: Not obligatory at all.
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William Daum Euler: Possible to pay $8,000,000 or more.	.


Richard Bedford Bennett: Not obligatory.


William Daum Euler: With the words added, it made it possible that nothing could be paid.


Richard Bedford Bennett: If I could use the words to a minister, I would say, what nonsense. It provided for expenses. I have under my hand a speech made by the Minister of Agriculture (Mr. Gardiner) in Saskatchewan in which he said that the wheat act of last session was the act of a Liberal authority and not the Conservative party, that it embodied what they wanted and not what the Conservative government wanted. I read yesterday from section 7 (f), which was agreed to by the committee and accepted unanimously by the house. That section provides that at least something must be paid as there was some value attached to wheat, despite what has been said to the contrary. The section reads:
(f) notwithstanding anything hereinbefore contained, to acquire from Canadian Cooperative Wheat Producers, Limited, upon terms to be approved by the governor in council, all wheat or contracts to purchase or take delivery of wheat in respect of which the government of Canada has given a guarantee;
The method is approved by statute. I am going to point out that this statute has no place in this parliament. When parliament has provided a way of dealing with a matter, that way must be pursued or the statute must be repealed. As long as this statute stands, until it is repealed, the method under which the matter is to be dealt with is not a method devised by the late government, not a method devised by a government, but a method approved of by this house as a whole; and it was in pursuance of that that this approval was being given. Now it is suggested that it must have had some political significance. I ask you, Mr. Chairman, in view of the observations made by the minister this afternoon, whether he thinks that on the J 0th day of October any minister who was desirous of using it for political purposes would have added a provision such as has been suggested, namely, that there must be a verification and certificates produced by auditors before any payments could be made.


Charles Avery Dunning: But that was not known to anyone else.


Richard Bedford Bennett: It was in the order in
council. I will tell you there are many things not known to anyone else which appear in orders in council passed since this government came into being, and when I asked for them

the other day I was told I could not have them. I inquired for specific ones. When application was made for these orders in council they were of course produced, and I will deal with that presently, and likewise with regard to seed grains, because parliament has provided a method in that regard.
This report carried the signatures of four members. The order in council itself was approved, as was indicated; they gave their approval to the terms of it providing for verification and certificate. I may say that it was sent to me-I am told I must not use the word " I," but how I can avoid doing so when I am referring to myself I do not know. It is true that it was sent to me in Toronto. The messenger came to Cornwall, I was told the circumstances, and I provided that there should be a certificate by auditors in order that the public interest might be properly secured and be properly safeguarded before any payments could be made.


Charles Avery Dunning: My hon. friend is forgetting one factor, and that is that the record there, which he has under his hand, shows that the whole transaction was founded upon a memorandum from himself.


Richard Bedford Bennett: Once more the Minister
of Finance is interrupting the flow of my observations, as I suppose he thinks he has a right to do, by long acquiescence, not even to ask a question but to make an assertion. What happened was this. The memorandum of this transaction was prepared by the Prime Minister in this sense: An offer was to be secured and acceptance of the offer made that there might be a contract, because council could not approve unless there was a contract; and a contract, as we all know, comprises an offer and an acceptance. There was an offer and acceptance, and it is pointed out that in the acceptance of the offer words were written by me in Toronto in the acceptance itself. It is so said.


Charles Avery Dunning: Will my right hon. friend permit me?


Richard Bedford Bennett: Yes.


Charles Avery Dunning: I am speaking of a period entirely prior to that. The report itself says that the whole transaction is founded upon a memorandum from the Prime Minister, which must have preceded the report to council.


Richard Bedford Bennett: May I say, it is in keeping with what we have had here. The report says no such thing.


Charles Avery Dunning: The letter of Mr. Rhodes.

Wheat Board


Richard Bedford Bennett: The minister said report.


Charles Avery Dunning: No, no.


Richard Bedford Bennett: He said report three
minutes ago. What he meant to say was, Mr. Rhodes' letter, stating that the minute of council was sent to me for signature, the report to council being based upon an outlining memorandum.


Charles Avery Dunning: What was in the memorandum?


Richard Bedford Bennett: Does the hon. gentleman expect me to remember? Does he expect anyone to remember? I was travelling about the country, and in order that the minister might deal with the matter it was suggested ' that it could only be dealt with in one way, namely, by securing a contract between the proposed buyer and the seller. That meant an offer and acceptance of the offer. The offer was in the form of a letter dated October 8 and the acceptance the same day, and it was written in in my handwriting, as has been properly pointed out, on page 2 of the report: "This to be verified by auditor's certificate. R.B.B." That was written, it is true, above the signature of Mr. Brouillette to the letter of acceptance in order that it might not by any possible chance be overlooked that there had to be verification by auditor's certificate before the purchase price could be paid for the contract.
We have a memorandum, which I apparently left with the Minister of Finance, but with respect to which I have no memory, because there were so many things in one's mind at that time with which one did not endeavour to charge the memory. The Minister of Finance apparently did not think it important enough to attach it to the file.


Charles Avery Dunning: It is an important state document.


Richard Bedford Bennett: It was not a state document at aid; it was merely to enable the minister to draft the report. When a minister of the crown makes a statement like that,
I say, knowing as I do the operations of the Department of Finance, knowing that various pieces of paper are used in the preparation of reports, pieces of paper that go to constitute a memorandum used in making the report-
I say that it is monstrous to make the statement that such pieces of paper are state documents.


Charles Avery Dunning: There was $8,000,000 involved.


Richard Bedford Bennett: But there was not $8,000,000 involved in the memorandum; nothing
could be involved except in the order in council. Now stripped of all verbiage, the situation gets down to this. The minister was asked to account for the delay, and instead of answering the question civilly and saying that because the order in council-


Some hon. MEMBERS:: Order.


Richard Bedford Bennett: He used the word "civilly" himself. He said that I asked the question civilly, and I say that instead of answering it civilly-I am using the complementary term-he did-what? He launched into this long statement, with the documents at his hand, prepared apparently to cast insinuations 

it meant that or nothing-upon the members of the administration charged with responsibility in the premises. We know that an order in council was passed containing a provision that an auditor's certificate was to be given before payment was made. This did not compel payment of the amount in any event; it only provided that it could be paid, and the addition made to it-using the words of the minister himself-was merely that there should be a verification of that amount by auditor's certificate. That is all. Now that could have been said in so many words. On January 25 we got the auditor's certificate, but why was it not paid then? Why has it not been paid since? That raises another point which I desire to make with respect to this transaction. I put this to the law officer of the crown responsible for the advice given the administration, the Attorney General of Canada. I put this to him: When parliament has provided a method for the payment of moneys or the acquisition of property, can any other method be adopted until the first method provided) by parliament has been repealed?


Ernest Lapointe: What does my hon. friend mean?


Richard Bedford Bennett: I mean that parliament in 1935 provided a method for the acquiring of this wheat, and it is now proposed to depart from that method and to do it by statute. If it is to be done by statute, obviously there must be a repeal of the provision already made by parliament, because-the rule is so clear as not to require being stated-when parliament has provided one method of dealing with a matter there can be no utilization of another method until that first method is repealed.


Ernest Lapointe: Parliament is always supreme.


Richard Bedford Bennett: But it must repeal this provision and substitute another for it. That
Wheat Board

is of course purely a question of law to which I ask the Attorney General of Canada to direct his attention; he will have no difficulty in ascertaining what the authorities are on that point. This resolution is that it is expedient to bring in a measure to provide for the payment of certain sums of money.


James Garfield Gardiner: Would it not be wise to leave the discussion of that point until we have the bill before us?


Richard Bedford Bennett: No.


James Garfield Gardiner: If that is to be done it will have to be done by a section in the act itself.


Richard Bedford Bennett: But the resolution itself must provide for the repeal of the present provisions, because otherwise the resolution should not be before the house; there should not be any such resolution.


Mr. THORSON:: If the legislation that results from the introduction of this resolution is passed, would that not operate as a repeal pro tanto of the previous legislation without any provision in the statute for the repeal of section 7 of the Canadian Wheat Board Act?


Richard Bedford Bennett: The rule to which the hon. member for Selkirk (Mr. Thorson) has directed attention is not a simple one. A repeal, as stated, may be brought about by direct action of the legislature or by implication. An implied repeal, as he knows perhaps better than I, is not one that the courts look upon with great favour, because it leaves the matter open to difficulties in connection with construction. I point out that we have already provided the method of dealing with this question. That method had the unanimous approval of this house; it was approved not only by a committee but by the house itself. I recall the language used by the right hon. gentleman, standing in his place. Having thus provided for it, why are we doing this at all? That is what I had in mind when I inquired about the delay. The matter can be dealt with now in twenty-four hours; it can be dealt with in twenty minutes if it is so desired, and could have been at any time since the auditor's certificate was given.
There is another question of which I have not yet had a satisfactory explanation given, and that is in connection with the coarse grains. There can be, undoubtedly, no acquisition of the coarse grains under the provisions of this act, but the coarse grains were sold, and the money only awaits disbursement. The question is not one of refunding money

by the government; the government has not the money; it is a question of disbursing, to those entitled, moneys arising from the sale of flax, oats, barley and rye. There has been a profit on barley; that profit is theirs. The profit on flax is theirs, and the profit on rye also. The loss on oats, the government says, we desire to make up. All that it is necessary to do is to take the adequate steps under the relief act, and that is the end of the matter; the payments are made. I do not yet quite follow what the hon. minister said yesterday wTith respect to these three types of grain that have been sold at a profit. What I did gather from what he said was that an effort had been made to combine the four types of grain, and, the four being combined, there was a net profit of $150,000 which was not thought to be a proper return to make to those who grew flax and barley and rye, but it was felt that they should receive all the profit that came from the sale of their goods, and that the oats people should be reimbursed for the loss that had been incurred in the sale of their oats. I should like to have that made perfectly clear. But it is clear that, under the provisions of the relief act that is in force in this country you can deal alike with coarse grains and with wheat. I was rather curious about this, because when I looked it up yesterday I felt that my first view was confirmed; and the hon. member for Selkirk who has referred to the question will realize that when you set up repeal by implication, judges from time to time have said that it is a most difficult thing to do, because when you talk about implications, in the repeal of statutes you are in the cloud land of doubt and conjecture instead of in the certainty which should apply in a case of this kind.
I took the trouble this morning to see what the government has been doing in connection with the relief act. As regards Saskatchewan, there have been loans of two, three, four, five million dollars; loans to the various provinces-Alberta, Manitoba, Saskatchewan-that required money; there is no trouble about that. Then one comes to another matter which is even more difficult to understand; it relates to this peace, order and good government clause, and I want the hon. member for New Westminster (Mr. Reid) to realize the extent to which the government have used it. I had no idea that it would be necessary for me to speak of this now in connection with the distribution under the relief act of a small sum of money to oat growers. I find an order dated February 6, 1936, which is the day this house met. Can you divide a day? Because the

Wheat Board
statute says that any orders passed under peace, order and good government,, cannot pass when the house is in session. The house met on February 6, and on February 6, on the recommendation of the Minister of Immigration and Colonization (Mr. Crerar), order in council P.C. 308 was passed. I find in it the following:
That there are in China approximately 4,060 persons of Chinese origin who have registered out from Canada under section 23 of the Chinese Immigration Act, 1923, the majority of whom are required to return to Canada within a period of two years from the date of registration in order to maintain their right to reentry; this in accordance with section 24 of the said act, and further, that a number of the Chinese now returning to Canada are practically without funds and are applying for relief;
And whereas the minister is of the opinion that if the period of registration which is limited by statutory enactment-
Bear in mind, by statutory enactment. Not something new, but a provision of the statute is to be dealt with. I commend that to my hon. friend the minister and to the hon. member for New Westminster.
-be extended, many Chinese at present in Canada would extend their visit to their native land beyond the said period of two years, that many Chinese now in Canada would return to China with a view to remaining there until unemployment conditions improve and thus relieve the unemployment situation in Canada as well as reduce the number of Chinese persons who would otherwise apply for relief.
That is a fine foundation. Now, listen:
Now, therefore, His Excellency the Governor General in Council-


James Garfield Gardiner: Mr. Chairman, on a
point of order, we heard a remark made yesterday with regard to taking up the time of the committee and taking up the time of the house. The remark referred to the speech of a certain hon. member the day before. My right hon. friend has gone on now for quite a long time discussing what to my mind can be properly discussed only on the second reading. There is no way of answering at this stage what he is now discussing. The bill will be before the house as soon as we get it out of the resolution stage; members will then be able to see that the bill provides for an entirely different thing from what the hon. gentleman is speaking about, and I think that is the proper time to discuss it. If the bill must be changed in order to meet his views, that is the time to change it, and not now, when we are discussing a resolution and the bill is not before us at all.


Richard Bedford Bennett: Clearly the point of
order is not a point of order at all, for the
obvious reason that I have been presenting 12739-95
an argument to show that no bill is necessary, and that this is already covered by existing legislation. When the hon. gentleman stated what he just said, namely, that the bill may contain matters that will make clear what I have not understood on the resolution, he at once affords me a reason for saying that he must make the explanations on the resolution, for he must on the resolution explain what the bill proposes to do. So I submit, with all deference to the chair, that there cannot be any point of order in that.


James Garfield Gardiner: On the point of order,
I think if the ihon. gentleman reads the resolution he will find that it does make provision for making payments to the primary producers. The agreement that he is speaking about is one that may be entered into between the wheat board and the wheat pool.


Richard Bedford Bennett: Surely this is-


James Garfield Gardiner: It is providing for payment to the primary producers, and it is providing for it by certain methods.


Richard Bedford Bennett: And this argument I am presenting now shows that last year we provided for this very matter, and this legislation is not necessary. I am pointing out what may be done under peace, order and good government. I had just reached the point when I read an order in council passed on the day this house met, to show wh.at may be done, and I was interrupted. May I proceed, Mr. Chairman?


Mr.   CHAIRMAN@Mr. McPhee: The
right hon. gentleman might get a little closer to the resolution.


Richard Bedford Bennett: I will stick very closely
to the resolution, because I am arguing that the resolution is unnecessary at the present moment. The balance of the order in council reads as follows:
Now, therefore, His Excellency the Governor General in Council, on the recommendation of the Minister of Immigration and Colonization and under the authority of section 3 of the Relief Act, 1935-
That is peace, order and good government-
-chapter 13, 25-26 George V, is pleased to order and it is hereby ordered as follows:-
Repealing a statute; that has never been done before under peace, order and good government, or by order in council. Listen to these words:
All persons of Chinese origin who under section 23 of the Chinese Immigration Act, 1923. have registered on or subsequent to March 1, 1932.

Wheat Board


Mr. TUCKER:: I rise to a point of order, Mr. Chairman. I should like to know what Chinese immigration has to do with the question before the committee.


The CHAIRMAN (Mr. McPhee):: I was about to ask the same question.


Richard Bedford Bennett: Surely the hon. member for Rosthern does not understand the point. On the day this house opened, under the peace, order and good government provision this government passed an order in council in the following terms:
All persons of Chinese origin who under section 23 of the Chinese Immigration Act, 1923, have registered on or subsequent to March 1. 1932, and all persons of Chinese origin who may register under the said section 23 on or before December 31, 1936, may delay their return to Canada for a period of three years over and above the statutory period as set by section 24 of the said act.
That is, for five years-


Walter Adam Tucker: What has that to do with the resolution under discussion?


Richard Bedford Bennett: It has this to do with it: it shows that there was power that was exercised when the house was in session, apparently, to deal with a statute-


Charles Avery Dunning: No.


Richard Bedford Bennett: Well, it bears the same date as that on which the house opened, and if the hon. gentleman will consult his attorney general he will find what happens with respect to an event that occurs on the same day as another event.


Ernest Lapointe: May I say a word?


Richard Bedford Bennett: Certainly.


Ernest Lapointe: Without discussing whether or not this could be done, did not my right hon. friend criticize it and suggest that it should not have been done? Then how can it be quoted as his authority for doing the same thing?


Richard Bedford Bennett: I am only pointing out, not that it could be done but that the government repealed a statute by order in council under peace, order and good government.


Ernest Lapointe: That could be done; anything could be done under peace, order and good government.


Richard Bedford Bennett: Never before has there been a statute so repealed and another substituted in its place. That is the position I wish to make clear. That was done notwithstand-

ing the fact to which the hon. member for Selkirk directed attention, that you could not do that now because the house is in session. The minister misunderstood me yesterday when I was dealing with the question of the government being unable to pass this while the house was in session. Undoubtedly you could pass it under the relief act but you cannot do it under peace, order and good government now that the house is in session. I was under a misapprehension as to what the minister said, if he took it from my observations that I thought he could do so.
Those are the objections I take to this resolution. The minister says the bill will clarify the matter. I want to know exactly what the resolution means before I, as one member of this house, agree to it, and before the committee agrees to it, because there is provision in the statutes already that would enable this end to be attained.


Joseph Thorarinn Thorson: I should like to say a
few words with regard to some of the observations made by the right hon. leader of the opposition. May I suggest that the discussion that has taken place on this resolution, both yesterday and to-day, has served a very useful purpose. It has indicated the extreme care that should be taken when government by order in council takes place. I do suggest as strongly as I can the superiority of legislating in the manner in which we propose to legislate as compared with the legislation by order in council that was attempted by the previous administration. Under section 7 of the Canadian Wheat Board Act certain powers were given to the wheat board that was set up under the provisions of that act. Paragraph (f) of that section gives the following power:
-notwithstanding anything hereinbefore contained, to acquire from Canadian Cooperative Wheat Producers, Limited, upon terms to be approved by the governor in council, all wheat or contracts to purchase or take delivery of wheat in respect of which the government of Canada has given a guarantee.
That was one of the powers given to the Canadian wheat board, but before that board could validly exercise that power two important conditions had to be complied with. In the first place there had to be a contract between Canadian Cooperative Wheat Producers, Limited, and the Canadian wheat board for the acquisition of wheat or contracts to purchase or take delivery of wheat. There could not be a contract relating to anything else. The second requirement for the validity of the transaction was that an order in council should be properly passed approving the contract between Canadian

Wheat Board
Cooperative Wheat Producers Limited and the Canadian wheat board.
It has been suggested by the right hon. leader of the opposition that the payments to be authorized by the bill that will be founded upon this resolution could have been made by way of order in council under the provisions of the Canadian Wheat Board Act. I agree with that view, but I also suggest that the discussion that has taken place today indicates grave doubt as to the validity of the order in council that was passed by the late administration. Every order in council must have a statutory base, and if any statutory conditions are provided for the passing of an order in council every one of those statutory conditions must be complied with in every respect. Therefore the order in council that was passed by the previous administration had validity only if it approved a wheat transaction. If the order in council approved some transaction that was not a wheat transaction it had no legal validity at all because there was statutory validity only for an order in council approving a wheat transaction. Now, was the contract between Canadian Cooperative Wheat Producers, Limited, and the Canadian wheat board a wheat transaction? What steps were taken by the late administration to inquire as to whether o-r not the contract related to wheat?


Richard Bedford Bennett: It says on the face of
it that it is wheat only.


Joseph Thorarinn Thorson: Were any steps taken
to inquire into that? It is quite true that the exchange of letters between Canadian Cooperative Wheat Producers, Limited, and the Canadian wheat board purport to. relate exclusively to wheat, but did they in fact relate exclusively to wheat? Was there any examination to ascertain whether the transaction purported to be made between those two parties was a wheat transaction or otherwise? I think there is no suggestion now as to the validity of the order in council as far as the antecedent signatures were concerned, but I do not think the important part of this transaction has been sufficiently stressed. The right hon. leader of the opposition pointed out that he-I think it was he

had inserted certain words, or that certain words had been inserted in the order in council so that the public interest might be protected, and so that there might be a verification of the amount suggested in the exchange of letters. But what steps were taken to inquire into two or three other matters which should have been looked into not only as to the accuracy of the amount, 12739-954
but as to whether the sum of money that was to be paid over to the Canadian Cooperative Wheat Producers, Limited, was to be expended'for wheat purposes or for some other purposes? There should have been an inquiry with regard to that matter, and that is one of the reasons why it is better to have legislation from the House of Commons than legislation which gets its operative effect from an order in council. In the house every feature is looked into; every section is scrutinized and examined as carefully as possible.


Charles Hazlitt Cahan: May I ask a question?


Joseph Thorarinn Thorson: There is the further advantage of having an opposition critical of the proposals or of the measure, and making searching inquiry into it.


Charles Hazlitt Cahan: May I ask a question?


Joseph Thorarinn Thorson: Yes.


Charles Hazlitt Cahan: I have followed the argument of the hon. member, and it seems to be sound. But where is there any suggestion that the order in council included any grains except wheat? I do not follow that suggestion.


Joseph Thorarinn Thorson: I am coming to that in a moment. The order in council followed the language contained in the exchange of letters.


Richard Bedford Bennett: No it did not; it commences with the section.


Joseph Thorarinn Thorson: And commences with the section-


Richard Bedford Bennett: Paragraph (f) of the
section.


Joseph Thorarinn Thorson: -authorizing acquisition, of wheat and wheat contracts.


Richard Bedford Bennett: Yes.


Joseph Thorarinn Thorson: My point is that it is not sufficient to follow the letter. The inquiry which ought to have been made is one as to whether the transaction was really a wheat transaction, that is, confined to the acquisition of wheat and wheat contracts, or whether it included some other matters for which under section 7 there was no statutory authority.


Charles Hazlitt Cahan: I cannot find any suggestion that it applied to any grain other than wheat.


Joseph Thorarinn Thorson: I am coming -to that, if my hon. friend will permit me to proceed.
The exchange of letters between Mr. Brouil-letbe and Mr. McFarland would appear to
Wheat Board

constitute an offer and an acceptance. Mr. Brouillette's letter contains two paragraphs, the second of which is as follows:
The Canadian wheat board will pay to the Canadian Cooperative Wheat Producers, Limited, the sum of $8,262,415.37 being the sum total of balances due to the primary producers, and expenses and other charges in connection with the holding and handling of the wheat.
That would appear to be entirely a wheat transaction. But was it solely a wheat transaction? What did the auditor's report reveal, when it came forward? That is set out in the auditor's report as one of the exhibits in connection therewith, namely exhibit AIV, particulars of which were given yesterday by the Minister of Agriculture. This exhibit reads as follows:
Wheat-Exhibit A IV
Basis-
60 cents	 $ 787,702 72
55 cents	 1,296,286 57
50 cents	 4,425,280 07

That was the only amount which related exclusively to wheat.


Charles Hazlitt Cahan: That is the advantage of having the auditor's report.


Joseph Thorarinn Thorson: Exactly; I shall come to that. Then, in the exhibit I find this note:
N ote,-Overpayments

Basis 70 cents ignored.
That appears because the wheat producers who had delivered their wheat to the various pools and had received seventy cents as the initial payment could not very well be forced to make refunds. The exhibit continues:
Coarse grains	 $890,658 44
Expenses of provincial pool organizations	 862,487 57
Of the total of $8,262,415.37 the amount of $890,658.44 was to be used for coarse grain *purposes, for which there was no statutory authority whatsoever.


Charles Hazlitt Cahan: Would the hon. member permit me to speak?


Joseph Thorarinn Thorson: Yea.


Charles Hazlitt Cahan: I simply wish to follow him, because I believe he is making a clear argument and I should like to understand what he says. I would point out to him, however, that the agreement which was made by these letters was "to sell and transfer all wheat or contracts to purchase or take delivery of wheat in respect of which the government of Canada has given a guarantee upon terms
{Mr. Thorson.)
therein set out." Then the letter goes on to say: "I beg to inform you that the Canadian wheat board is prepared to acquire the said wheat and contracts on the terms mentioned in your letter," and so on. That contract refers only to wheat. I am not going back to the doubt I had in my mind as to whether there should not be a careful audit of these accounts, because the agreement referred solely to wheat and in my opinion there was no liability incurred except as to wheat.


Joseph Thorarinn Thorson: Quite so. The contract appears on the face of it to be a contract exclusively for the acquisition of wheat.


Charles Hazlitt Cahan: Quite so.


Joseph Thorarinn Thorson: But it does not follow that the exchange of letters constituted the whole contract between the two parties.


Charles Hazlitt Cahan: I find no suggestion of any other grain being included.


Joseph Thorarinn Thorson: I am just pointing out what the auditor's report eventually disclosed.


Charles Hazlitt Cahan: Quite so.


Joseph Thorarinn Thorson: Apparently it was contemplated by the parties that out of the $8,262,415.37 which is mentioned in the exchange of letters, and which appears in the order in council, $890,658.44 was to be used for coarse grain purposes.


Charles Hazlitt Cahan: Would the hon. member permit a question?


Joseph Thorarinn Thorson: Let me develop my argument, and then the hon. member may ask his question.


Charles Hazlitt Cahan: Are we not agreed that the agreement called only for payments for wheat?


Joseph Thorarinn Thorson: Correct. The auditor's report also disclosed that out of the amount which appeared in the order in council, $862,487.57 was to be used for "expenses of provincial pool organizations." The suggestion I make, and the inference which can fairly be drawn from the facts as we now have them, is that if the sum mentioned in the order in council had been paid out, $1,402,461.36 would have been paid out without any statutory authority at all.


Charles Hazlitt Cahan: That is the reason there was an investigation, to show what applied to wheat, so that only wheat would be paid.

Wheat Board


Joseph Thorarinn Thorson: Was the investigation to be made only as to amounts, or did it also include what the amounts, if correct, could be used for?


Charles Hazlitt Cahan: Yes, certainly, a complete audit.


Joseph Thorarinn Thorson: Did any member of the late administration know that some portion of the amount that appears in the order in council was going to be used for coarse grain purposes?


Charles Hazlitt Cahan: I do not think there was a member of the government who could suspect it because the agreement covered wheat and only wheat, and an investigation was to be made as to what quantity of wheat was covered, in order that the eight million dollars odd could be devoted to wheat and nothing else.


Joseph Thorarinn Thorson: The purpose of the
auditor's inquiry was as to the accuracy of the amounts.


Charles Hazlitt Cahan: No, no.


Joseph Thorarinn Thorson: He was going to inquire into the amounts-


Charles Hazlitt Cahan: Amounts of what?


Joseph Thorarinn Thorson: Amounts of money and how the eight million dollars was made up.


Charles Hazlitt Cahan: When would-


Joseph Thorarinn Thorson: If my hon. friend will please allow me to conclude.


Charles Hazlitt Cahan: Certainly. I was simply trying to reach an agreement with the hon. gentleman.


Joseph Thorarinn Thorson: It is quite clear that it was contemplated by somebody that $890,658.44 was to be used for coarse grains for which there was no statutory authority, and it was also contemplated that $862,487.50 was to be used for expenses of provincial pool organizations. Now, if there is any inquiry with regard to this matter, there ought to be an inquiry whether any member of the former government knew that any of these amounts I have mentioned were going to be used for the purposes for which they apparently were going to be used.


Charles Hazlitt Cahan: I am quite willing that such an inquiry should be made.


Joseph Thorarinn Thorson: Quite so, and I am prepared to accept my hon. friend's statement that he did not know.


Charles Hazlitt Cahan: And the agreement did not call for it.


Joseph Thorarinn Thorson: On the face of it, no.


Charles Hazlitt Cahan: There are no two faces to it; there is only one.


Joseph Thorarinn Thorson: Was any inquiry made to find out the true nature-


Charles Hazlitt Cahan: The auditor's report shows-that a very careful inquiry was made.


Joseph Thorarinn Thorson: Will my hon. friend allow me to proceed? Certainly the farmers of western Canada thought they were going to get payments for coarse grains as a result of the payment of these moneys being authorized, and the thought I have in mind is this, that the bill which will follow this resolution will clear up the situation beyond doubt and will serve a useful purpose if only for that.
I quite agree that it might be possible to authorize the making of payments for the purpose of acquiring the wheat held and the wheat contracts, but this would have necessitated a new contract between Canadian Cooperative Wheat Producers, Limited, and the Canadian wheat board, and a new order in council, so that there would be the necessary statutory base for the payment of the money -two statutory bases: First, that there should be a contract between the two contracting parties for the acquisition of wheat and wheat contracts only, and nothing else, and then an order in council approving such a transaction. I would like to see this statute contain a provision for the equalization of coarse grain prices. Now that the government is proceeding by statute I would like to see that done.
Questions have been asked with regard to the three kinds of coarse grains that are dealt with. Particulars of that were given by the Minister of Agriculture yesterday, and these sums were indicated: Barley, $15,482.58; flax, $210,926.05; rye, $124,276.02, making a total of 8350,684.65. My understanding of the reason why these amounts are being paid to the pools, although they represent balances in respect of coarse grains, is this, that when the pool authorities sold these respective coarse grains they paid the money that they had received for these coarse grains into the general banking account, and to that extent reduced the balance against them, and the repayment to the pools of these three items totalling $350,684.65 is just another way of ensuring that the true wheat balance will be arrived at.


Charles Hazlitt Cahan: Would the hon. gentleman allow me to make a remark there?


Joseph Thorarinn Thorson: Not just at the moment.
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Charles Hazlitt Cahan: It is the first time I ever heard that.


Joseph Thorarinn Thorson: The wheat pool has had the benefits already of having received these moneys. If they had not received these moneys and paid them into the general banking account, the Canadian wheat board would have had to assume a much greater adverse bank balance than it has at the present time; that is the justification from the point of view of the wheat board legislation for the repayment to the wheat pools of these three sums.
If an examination were made of the situation I think it would be found that if the sum provided for in the original order in council had been paid out, there would have been authorized to be paid out the sum of $1,402,461.36 without statutory authority. I arrive at that figure in this manner. I have added the two amounts that appear in the auditor's report, the sum of $890,658.44 for coarse grains, and the sum of $862,487.57 for expenses, making a total .of $1,753,146.01, which had nothing to do with wheat except to the extent that the wheat balance would have been greater than it now is had it not been for the fact that the amounts that were owing to rye producers, flax producers and barley producers went into the general banking account; therefore it is proper to deduct that $350,684.65, leaving the sum which I mentioned, $1,402,461.36. The order in council, if it had been acted upon, would have resulted in that expenditure without authorization.
Now, what was the purpose and what was the advantage of passing an order in council if the government was going to get an auditor's report first?


Charles Hazlitt Cahan: To authorize the payment.


Joseph Thorarinn Thorson: Why pass it in the expeditious manner that was adopted? Why not get the auditor's report and make a thorough examination first to verify the amounts, and also to verify whether the transaction that was being approved was one relating exclusively to wheat or otherwise? Why was that not done before the order in council was drafted? That is a question that might well be asked, and I say that this discussion has served a useful purpose in indicating the care that should be taken before we legislate by order in council. It is well that all the facts should be disclosed before the committee, and that this legislation should be passed in the form and in the manner which is suggested.
Surely my right hon. friend the leader of the opposition cannot be serious when he suggests that there is no authority in this house to pass this legislation.


Richard Bedford Bennett: I did not say that.


Joseph Thorarinn Thorson: Why, of course, there is authority, and if it should be necessary to add a clause to the effect that so far as this particular transaction is concerned, section 7, paragraph f, should to that extent be repealed, it would be a simple thing to do. I suggest that the passing of the statute following this resolution would operate as a repeal pro tanto of the section we have been discussing. I would much rather see legislation of this sort passed in the manner in which we are passing it than see it passed in the manner disclosed by the discussions of yesterday and to-day. To that extent the discussion that occurred yesterday and again to-day has, in my opinion, served a very useful purpose.


Mr. COLDWELL:: I am a little surprised
at the turn the discussion has taken. As I understand it, an agreement was reached between the Canadian Cooperative Wheat Producers, Limited, and the government prior to the election. I think my understanding is similar to that of the people of western Canada. We believe that the money mentioned in this order in council was to do four things: First, it was to equalize all pool wheat payments at sixty cents per bushel, basis No. 1 northern, Fort William.


Charles Avery Dunning: Not equalize; that would be quite impossible.


Major James William Coldwell: To settle on that basis. Next, it was to bring the spreads into proper relationship so that the producers who delivered would not be penalized on account of lower grades. I am particularly interested in the third item, to adjust all coarse grain payments.


Joseph Thorarinn Thorson: A lot of people had that idea.


Major James William Coldwell: That is the general
idea throughout western Canada. Four, to provide for the operating costs of the provincial pools for the 1930 crop. I have given this order in council a very careful study indeed. Paragraph (b) was quoted a few moments ago by the hon. member for Selkirk (Mr. Thorson). The phraseology is this:
The Canadian wheat board will pay to the Canadian Cooperative Wheat Producers, Limited, the sum of eight millions, two hundred and sixty-two thousand, four hundred and fifteen dollars and thirty-seven cents ($8,262,415.37),-
Then occurs a comma. When the minister was reading this particular paragraph this afternoon I asked him to say whether the

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word was "and" or "the" following the word "producers" in the paragraph as it continues:
-being the sum total of balances due to the primary producers,-
Not the wheat producers only but the primary producers.
-and expenses and other charges in connection with the holding and handling of the wheat.
I see the Minister of Finance (Mr. Dunning) shaking his head, but I rose in my place to point out that this is not only my impression but that of thousands of people throughout western Canada.


Charles Avery Dunning: I have good reason to
know that, because they have written to me to tell me that is what they were promised.


Thomas Miller Bell: That is a factor which
must be considered at this time by this parliament. The producers of western Canada believe that the basis which I have outlined briefly was the basis of this particular agreement. Why do they believe that? Because they believe that the wheat and the other grains, which were their grains, were used throughout these difficult years to bring about a certain measure of stability. In connection with oats, where the auditors report a loss, there is a general opinion that they were more or less retained at the request, with the consent, or upon the advice of the then governments concerned, dominion and provincial, because of the peculiar drought, feed and seed conditions which were prevalent that year and the following years in western Canada. I urge the government to take these matters into consideration.
In other countries the farmers have been bonused very heavily. Fortunately for the Canadian people the farmers of this dominion had built up an organization which gave to agriculture something in the way of stability. It was a low stability, if you will, but nevertheless the institutions were there and the government of this country did not bonus the producers as was done in France, in the Argentine republic, in Australia and in the United States to the extent of hundreds of millions of dollars. As I said the other day, western Canada contains 55,000,000 of the
73,000,000 acres of cultivated land in the dominion. This vast area is in bad condition because of economic and natural causes over which the people had no control. I urge the government to read this order in council as I believe it is read by the producers of western Canada, and, when the bill is brought down, to see to it that the money allotted is sufficient to take care of all the payments the producers expect with regard to grain,
even if the administration costs of the pool are deducted. This would increase the amount further by some 8500,000, but I submit that that amount would not be a gift; it would not be a compassionate allowance; it would be payment for services rendered by these classes of producers to the people and the government of Canada during the difficult years through which we have just passed.


James Garfield Gardiner: I think I nodded my
head when the hon. member mentioned the figure of $500,000. The amount will be about $1,250,000.


Major James William Coldwell: Yes. Total amount.


Mr. CHURCH:: If the government would
only show a little Christian charity towards the head of the late government (Mr. Bennett) in connection with this matter it would enhance the opinion which the ratepayers of this country have toward this parliament. I think the head of the late government made one of the most outstanding contributions to the welfare of Canada. I have made a deep study of this question for over twenty years. A great protectionist paper in Toronto, the Evening Telegram, spent from $15,000 to $20,000 in 1922 to investigate the grain industry in the prairie provinces, the greatest imperial industry in this country. I know of no man who knows more about this grain industry than does the head of the late government. He is fully conversant with the functions of the producers, the traders, the handlers, the carriers, the millers and every one else engaged in this industry. There were some thirteen inquiries made by this parliament and provincial legislatures into this industry from 1897 to 1914.
This matter was dealt with late in June and in the early part of July of last year, when the Prime Minister of that day brought down an important measure which would have improved for all time the condition of the grain growers of western Canada. It is important for us to know just where the money in the resolution will go, and what I am concerned about in connection with this resolution is to see that the fund goes into the pockets of the men who grow the grain. Too long have these pools and grain exchanges been handled, not by practical farmers but by men who had not the interests of the grain growers primarily at heart but were party first farmers. When I look around this building and see lobbying lawyers and old officials of the grain exchanges, the very men who are responsible for the lot of the poor grain grower, I can sympathize with the late
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Prime Minister, who did more to place the industry on a sound basis than did any other man in Canada. He saved not only the grain industry but the country from bankruptcy during the worst years of the depression. He did not create these conditions; they were created years before he came into office-by whom? By the Liberal party, by the Liberal premier of Saskatchewan and other prairie Liberals, who spoke liere to-day, and by other Liberal premiers of the three prairie provinces. Their doctrine was that this greatest of imperial industries was a continental industry, and they insisted on the quack remedy of free trade. That was their cure-all for the ills of the prairies, with the result that this industry has been one of the worst exploited in Canada.
Years ago, Mr. Chairman, when you first came into this house, there was an effort on the part of the Conservative party to have coal, iron and steel and grain protected and supported by means of bonuses, subsidies and subventions. Protection has always been the best friend of the western grower and that policy has been extended by the founders and authors of protection, the Conseravtive party. But the Liberal party has advocated free trade, and we find that the western wheat growers have eaten the sour grapes of free trade; it is no wonder their teeth are on edge. The western wheat grower has allowed his leaders to delude him into thinking that wheat is a continental industry, but I submit that it is the greatest of imperial industries, for the markets of the British empire mean more to the grain growers of Canada than to any other class of producers in the country. The greatest enemy the western wheat grower has had has been the free trade policy of hon. gentlemen opposite and of the Liberal premiers of the three prairie provinces. They are the people who got the grain grower into his present state. On the other hand, the leader of the opposition, during his term of office as Prime Minister, did more for the western wheat grower than any other man in Canada has done. I think, therefore, he received a raw deal from the very men who should have appreciated what he had done for them, the men actually growing grain on the prairies.
I would not have taken part in this debate but for the fact that two members of the cabinet yesterday met a deputation from the municipalities. I said the other day that fifty per cent of the workers in central Canada were engaged in industrial pursuits; the Minister of the Interior (Mr. Crerar) increased that percentage when he estimated it at fifty-three per cent.


George Washington McPhee: I must ask the hon. member to confine himself to the resolution. There is nothing about protection or free trade in the resolution.


Thomas Langton Church: Is that correct, Mr. Chairman, but we are naturally anxious to know where the money is going to come from. The minister has given an explanation with which I am not at all satisfied. He was a free trader, and now he is for grain protection. It is true that this is only a resolution; we are told to wait until the bill comes down. Well, if this is the only industry that is to receive financial assistance from parliament, how much longer will the central provinces stand for the payment of these moneys when the industrial workers are refused consideration along similar lines? This resolution is based on the doctrine of protection, not free trade.
I believe in protection for all grain growers, but I would point out that some of the grain growers do not belong to the pool, nor do they wish to belong to the pool. I know that if I were out there I would not belong to a pool. No doubt this will benefit some of the grain growers, but there are others who will not get anything out of it. The whole system is wrong and in my opinion we should have a national policy for the handling of grain. We should provide protection for the men growing the grain so that the profits will not accrue to the grain exchanges. I look upon the grain exchanges as the aristocracy in this industry.
When will the payments be made? No one knows. Like a returning officer in an election, these men will probably be paid six months or a year after payment is due. And where do the farmers of Ontario come in? The minister said that there were four pools in Saskatchewan and Manitoba dealing with coarse grains but that there was none in Alberta. I do not know how long the finances of the country will stand this sort of paternalism. These stabilization funds are protection and are a burden and paid for by the industrial workers of Ontario, and they should have some protection as well as the grain grower. I am not opposed to the resolution; I believe that, properly administered, the legislation forecast therein would have a good effect, but I am opposed to a hand-out of $111,000,000 without any investigation. One thing the former Prime Minister did; in connection with this order in council that has been so much discussed, was that he insisted on putting some commercial restriction and some brake on the granting of these funds, instead of allowing himself to be dictated to by the grain exchange. What are these

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grain exchange people doing around the parliament buildings in the last few days? One newspaper gives their names. I could name a good many of them, although I am not going to do so, men who are trying to use their influence to bolster up these funds, not only the grants under this resolution, but something else that is coming down, $111,000,000 that has been handed out already, and more asked for.
A few years ago the three prairie provinces could get along with a grant or a cash subsidy under the British North America Act; they were able to maintain themselves without any subventions; they carried on their financial affairs the same as did other provinces in this confederation. I believe in the principle of confederation, the old Cornish battlecry of "Each for all and all for each." Ontario industrialists and farmers are just as much interested in the prairies as are other people, because every man, woman and child in every province except the Yukon are interested in the grain industry, as the Prime Minister said last July, in the success of these measures, and it was due very largely to him that proper commercial restrictions were applied in connection with the order in council. I think he is to be commended by the business men of the country for having prevented, as in the opinion of every good citizen he did prevent, province-wide bankruptcy in this great industry.
The people of Ontario and Quebec are becoming much alarmed at the obligations entailed by such resolutions as the one presented to-day, for a sum for $6,500,000 in respect of coarse grains and $350,000 for some other growers. Then these debentures are added on; wait till you see the expense bill. You probably will not find the expenses contained in the bill; they will be in the auditor general's report or a return to an order of the house.


Mr. MITCHELL:: May I ask the hon. gentleman a question? Who produced the wheat, who sold it, who bought it, and who is now going to pay for it? Why should the farmers of Ontario enter into that transaction in any place at all? It is not a hand-out.


Thomas Langton Church: That is not a question. That is a speech. I can only say that there is going to be a show-down in this house on social credit. So far as the merchants of Ontario and Quebec are concerned there are not going to be any more hand-outs along the lines proposed by the hon. member's party. The industrial workers have certain rights and privileges in this house. We want some
return for our money. I believe the time is not far distant when the two old provinces will insist on having a survey made. Surveys have been made all over; let us have a survey of Ontario and Quebec and find out what our real place in confederation is, instead of being a hewer of wood and a drawer of water for the rest of confederation.


Mr. NEEDHAM:: What I am concerned about is the amount involved that is to be paid over, and how soon it will be paid. On page 1464 of Hansard the 'hon. minister is reported as having said last night that his reason for being anxious to get along with this legislation was that seed grain has to be put out in western Canada within the next few weeks, and that if this 86,000,000 goes out to the farmers there, it will be a great help. The contract is over $8,000,000.


James Garfield Gardiner: Between six and seven millions.


Joseph Needham: The order in council, the agreement with the pool, was over $8,000,000, and $350,000 for coarse grains. Can the minister give us the amount that will go forward on the wheat?


James Garfield Gardiner: The amount covered
by the order in council was SS,262,000. That included almost a million dollars that was supposed to be for expenses; that would have gone to the pools to cover expenses, and included almost a million dollars for coarse grain; or, to be more exact, between eight and nine hundred thousand dollars for coarse grains. The amount that is to be paid out in this present bill is $6,509,000 for wheat, and $350,000 in round figures, for flax, rye and barley. These amounts will be paid out just as soon as we get this bill through the house and regulations set up upon which the payments are to be made.


Richard Bedford Bennett: The speech of the hon. member for Selkirk (Mr. Thorson) raised two or three questions that I should like to have answered now. When were the coarse grains sold, and who is to disburse the cheques? The hon. minister says now, when they get the regulations ready The contract is between the Canadian Cooperative Wheat Producers, Limited, and the wheat board, and the wheat board, not the government, were the people who made the purchase of the wheat. I want to know who is going to make the payments.


James Garfield Gardiner: The bill makes provision, at least the intention of the bill is to make provision, for the payment of the moneys
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from the wheat board to the wheat pool organizations, through the Canadian Cooperative Wheat Producers, Limited, which is the central organization at Winnipeg of the three pools. The procedure followed by the Canadian Cooperative Wheat Producers, Limited, in the past has been to pass over whatever moneys are available to the three provincial pools, and the three provincial pools have made the distribution. The bill will provide that regulations for the payment, after the money reaches the Canadian Cooperative Wheat Producers, Limited, are to be agreed to by the governor general in council. These regulations will be submitted by the Canadian Cooperative Wheat Producers, Limited, to the government before the payments are actually made.
I probably was not strictly correct in saying, in reply to the hon. member for the Battlefords, that $350,000 will be paid out to the producers by the Canadian Cooperative Wheat Producers, Limited. That amount of money will be turned over to the Canadian Cooperative Wheat Producers, Limited, and it is expected that at least a part of it, if not all of it, will be paid to the primary producers. It is really their money, and we are not presuming to say to them what they have to do with it, but the intention is that that is where it should go. Probably I was more nearly correct last evening than I was a moment ago when I said that the amount was over $6,000,000. It would be about $6,500,000 that we are sure will go to the producers; the other amount we are hoping will go to the producers. The amount that goes out for the coarse grains, shall I give the figures again? I gave them last night; they are already on Hansard.


Richard Bedford Bennett: No. The speech of the hon. member for Selkirk indicates that he has a much greater knowledge of this transaction than I have. What I desired to know was, when there was the realization on the coarse grains, because I think in view of what he has said I can offer an explanation about some meanings that were difficult to see until a moment ago.


James Garfield Gardiner: In order to give full information on that I would have to read the auditor's report, pages 24, 25, 26; there are about ten pages or so of it.


Richard Bedford Bennett: It is not necessary to do that. Perhaps the hon. minister can answer shortly in this way: Were the coarse grains disposed of prior to January 1, 1935? That would be broad enough to cover the matter.


James Garfield Gardiner: I think so, broadly
speaking. There is a table which sets that out. Probably I had better get the table.


Charles Avery Dunning: It varies as between the different grains.


Richard Bedford Bennett: I know, but I am asking about them all.


James Garfield Gardiner: Of wheat,-this is the carry-over in 1933-the total carry-over was
76,375,000	bushels. That was about sixty per cent of the amount taken in in 1930. Then, of oats, 1,265,000 bushels. That is about twenty-four per cent of the amount of oats that was originally taken in, and still held in 1933. Of barley there were 676,000 bushels, or about 10| per cent of what was taken in during 1930. Of flax there were only 7,000 bushels left. That would be at the end of the financial year of the pools, or of the Canadian Cooperative Wheat Producers, Limited, which was August 31, 1933. The flax was practically cleaned out. There was no rye held on that date; it had been all sold prior to that. I would have to go through the figures beyond that and ascertain the amounts disposed of month by month.


Richard Bedford Bennett: I am not interested in knowing in what months the grains were sold, but had all the oats been disposed of by December 31, 1934, or by June 30, 1935? Had all the barley been sold and disposed of by, we will say, June 30, 1935?


James Garfield Gardiner: This report brings the position down to October 31, 1935. Before October 31, 1935, all of the three grains, flax, rye and barley, were disposed of. There were some contracts in connection with oats held at October 31, 1935, and even at this date it would be impossible to say what the final losses might be in that connection or whether they would be as high as they stand now.
I think they have decreased to some extent since this report was prepared. According to this report the loss is $200,000; I think at the present time the loss is really about $188,000, because there have been some transactions in oats since.


Richard Bedford Bennett: The point I want to make clear is as to what the position was at the beginning of October. The order in council is dated October 10 and the offer and acceptance are dated October 8. The statement of the hon. member for Selkirk brings to my mind certain facts which I certainly had not kept in mind; I cannot remember everything. I am curious to know whether the minister can say what the condition -was on October 1, 1935, which will be sufficient for my purpose.

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James Garfield Gardiner: There are schedules at the end of the report dealing with each one of the grains, and I would have to go through those schedules and select that date, but I can have that information to-morrow.


Richard Bedford Bennett: Perhaps the hon. gentleman could have it by eight o'clock to-night. It becomes important for this reason: Did the sums of money realized from the sale of these oats, barley, rye and flax go to the credit of the companies' accounts in the banks and thereby reduce the guarantee of the country in that connection?


James Garfield Gardiner: I assume if it were left in its present position that would happen.


Richard Bedford Bennett: I want to know if that is what did happen.


James Garfield Gardiner: It is all one account, and as I understand it, that one account is guaranteed by the government, but in so far as the books that are kept by the companies are concerned, there are five separate accounts. That is if you are going to pay on the basis of stabilization you must separate those accounts.


Richard Bedford Bennett: The minister has not yet grasped the point of my observation, although the hon. member for Selkirk has done so. Apparently the hon. member has followed this matter with great care, and his statement recalled to my mind a set of facts that otherwise I might not have recalled. The hon. member said-and my colleague from St. Lawrence-St. George said that he had not heard of it before-that as these coarse grains were realized upon the money derived from their sale went to the credit of the account, that is the account in the banks, and thereby decreased the obligation or debt to the banks and, pro tanto, the guarantee of the country. I should like to know to what extent that was so on the first day of October, 1935, for it has a significance to which I shall refer presently.


James Garfield Gardiner: I will try to get that information. Of course without the amount involved the statement made is correct.


Richard Bedford Bennett: Yes, and if the hon. member for Winnipeg will permit me to say so-


Joseph Thorarinn Thorson: The hon. member for Selkirk.


Richard Bedford Bennett: I was not sure whether my hon. friend or the Minister of Immigration was the representative of Selkirk; I erred in that regard and my hon. friend will have to excuse me. The hon. member for Selkirk made a statement which I think was very
significant, very fair and very clear, if I might be permitted to make that observation without presuming. I cannot agree with his conclusion in law, because the order in council covered wheat only, but as the hon. member was talking about sales of coarse grains he said the understanding was that coarse grains were being taken care of in this order in council; as the hon. member for Rosetown-Biggar (Mr. Coldwell) was speaking he made the same statement, and I then recalled a circumstance which had escaped my memory entirely. That was that the contention made by the pools, to which the hon. member is now directing attention, was that they, because they had sold coarse grains, should be entitled to receive credit for the amount the country had escaped liability for by reason of the sale of the coarse grains. That matter becomes important, because I have a vague and shadowy recollection of the discussions which took place in regard to that question, and it seems to me that what has been said here this afternoon makes it abundantly clear what the position was. They said, "We have an account at the bank which the country has guaranteed; that account was operated for stabilization and other purposes. You were dealing only with wheat, but as we had only one account all the moneys received from the sale of flax, barley, rye and oats went into that account and thereby reduced the liability of the government." They were endeavouring to say that it was a part of the price they were to receive for the wheat they had on hand that they should be reimbursed the moneys which had come from the sale of coarse grains and had been used to relieve us with respect to that liability. When the hon. member for Selkirk made those statements I recalled at once the contention that was made. It seemed to me then to be not an unsound contention; I agree with what the minister has said, that it is a perfectly sound contention, because last year we were dealing with wheat. If the hon. gentlemen will look at the records of the meetings which took place from time to time they will find that there were suggestions that coarse grains should be dealt with. Finally, the provision as to coarse grains is a permissive provision which comes into force and operation only under certain conditions, and the contention made by the pool directors- there were three of them here^-was that with respect to coarse grains they should get that money because it had gone to reduce the liability which had been guaranteed by the country.


Joseph Thorarinn Thorson: Only for the purpose of arriving at the true wheat balance.
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Richard Bedford Bennett: That is the very point I desired to make, that they said, "If we are going to sell our wheat we want the price of the wheat itself and what money we should receive back either on the acceptance of the liability to the banks or on the added sum."


Charles Avery Dunning: In the form of profits on the coarse grains.


Richard Bedford Bennett: Yes.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.


George Washington McPhee: Shall
I report the resolution?


Richard Bedford Bennett: When we rose at six
o'clock the minister was good enough to say that he would secure certain information which I required.


James Garfield Gardiner: With regard to flax,
the information which I have gathered is that the sums which are stated in the report are those that were used in setting up the claim in the first instance, at the time the original order in council was being prepared. It is stated by the auditor, just below the figures quoted in the report, that the differences would be so small that the auditors do not consider it worth while to make changes. So that except in the case of oats, the figures are practically as they are in the report, with the exception that if it were figured out to the cent, interest would be added.
On August 31, 1933, the total flax stocks had been disposed of, and on August 31, 1935, there was a surplus of $210,926.05. I assume that if that were to be figured down to the proper amount at October 1, interest would have to be added.


Richard Bedford Bennett: Whatever they were
paying at the bank.


James Garfield Gardiner: In connection with
rye I wish to say that on August 31, 1933, the total rye stocks had been disposed of, and on August 31, 1935, the rye surplus was $124,276.02. That would be approximately the same at the beginning of the month of October. In connection with barley I find that on September 30, 1935, the day before the one for which information has been asked, stocks on hand amounted to 267,000 bushels, all of which was sold some time during the month of October. There was no barley on hand at the end of that month.

I have not the exact date it was disposed of, but it was some time during the month. At the end of October, 1935, the barley account had been cleaned out. The barley surplus on August 31, 1935, was $15,482.58. That will be varied somewhat by the cleaning out of the account. In connection with oats I would say that on September 30, 1935, the stock on hand amounted to 967,000 bushels, and on October 31, the stock on hand was 238,000 bushels. I have not the exact date this was disposed of, nor have I the prices from day to day, so that it is impossible to get the exact value.	By
December 2, 1935, the oat stocks had been disposed of. I am informed that the position as between October 31, and December 2, when these oat stocks had been disposed of, had improved by about $12,000, and the price was about the same throughout the period, namely somewhere round thirty or thirty-four cents per bushel. It would appear that the improvement during the month of October would be about in proportion to the quantity sold in November. So I would expect the improvement as against October 1, would probably be round $40,000 or $45,000. But on October 31, there were
238,000	bushels which, by December 2, had been entirely cleaned out.


Major James William Coldwell: May I ask a question
with regard to coarse grains? Will the amount of money in the coarse grain pool allow the pools to pay an amount equivalent to the initial payment? I have flax in mind, in connection with which I believe the initial payment was about $1.25. Will the surplus in the pools permit bringing the payments up to that level, or will they be substantially below or above that amount?


James Garfield Gardiner: The initial payment in the flax pool was one dollar for a time, and seventy-five cents for another period. They had wished to make a payment of $1.25, as a result of the original settlement. The surplus which was mentioned is the amount over and above the initial payments which have already been made. So that that amount is there for distribution. It will not permit of a payment of $1.25, but the amount of money in the pool will provide for a payment somewhere between the present average and $125.


Major James William Coldwell: That will be below $1.25?


James Garfield Gardiner: Yes; it will be below that. I am not sure but that it might be below the dollar, because it is somewhere between seventy-five cents and $125.

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Mr. WARD:: This information may have been given when I was out of the chamber, but I should like to know upon what basis the payment for pool grain is being arranged.


James Garfield Gardiner: The basis is set out in the bill. I assume the hon. member means payments for wheat.


William John Ward: No, for coarse grains.


James Garfield Gardiner: In connection with coarse grains we simply return the money to the Canadian Cooperative Wheat Producers, Limited, and it will be distributed to the pool. We have no control over that; it is really their money.


Mr. DOUGLAS:: Like most western members I should like to see this bill passed as quickly as possible, so that this money may go out to the farmers in the west. But some of these documents have been tabled so recently that we have not had access to them. There are some points which are not altogether clear. I notice this afternoon the hon. member for The Battlefords (Mr. Needham) brought up a question which apparently the minister did not quite understand.
I do not wish to carry away a wrong impression, but it is my understanding that these sums of money were guaranteed by the government, not to the pools or to the farmers, but to the banks, and that the wheat board was willing to take over from the Western Producers Ltd. stocks of wheat *and contracts to buy wheat. The offer made by the Western Producers Ltd. was an amount equalling $8,262,415.37. A contract was drawn up by which the wheat board accepted that figure, and the order in council P.C. 3199, a copy of which I have in my hand, ultimately constituted the contract. That amount of money was to be paid, pending receipt of an auditor's certificate.


Charles Avery Dunning: No.


James Garfield Gardiner: No, not pending.


Thomas Clement (Tommy) Douglas: Subject to the receipt?


Charles Avery Dunning: No; it was not to be paid at all until the certificate was received.


Thomas Clement (Tommy) Douglas: It was to be paid upon receipt of it. Let me read the provision:
Now, therefore, His Excellency the administrator in council, on the recommendation of the Minister of Finance, is pleased to approve the terms of acquisition set out in the aforesaid letters and they are hereby approved accordingly, subject to the amount referred to in paragraph (b) page 2 hereof being verified by auditors certificates.
As the minister stated last night, on January 25 the auditor's report was given, and the amount was substantially the same as that in this order in council.


Charles Avery Dunning: Oh, no.


Thomas Clement (Tommy) Douglas: I turn1 to page 1456 of
Hansard and I find that the amounts given in the auditor's report are, in round figures, $6,509,000 for wheat, $890,000 for coarse grains, and $862,000 for expenses.


James Garfield Gardiner: Those are the figures which the auditor's report says were claimed, not the figures which the auditors admit. That was the claim made at the time the order in council was drawn up.


Thomas Clement (Tommy) Douglas: Could we have any idea of the figures which the auditors do admit? My point is this: We have a contract in which the figure of $8,262,000 was agreed to. We have a report submitted and now the minister tells us that a bill is to be brought down to pay somewhere between $6,500,000 and $7,000,000. We cannot understand why there should be this discrepancy between from $6,500,000 to $7,000,000, and $8,262,000, a difference of over $1,500,000, which cannot be entirely accounted for by coarse grains. How is it accounted for? To the best of my understanding this is a contract between the government and the producers of western Canada. I have heard too often hon. gentlemen opposite talking about the sacredness of contracts to believe that they would, tear up a sacred obligation. I can hardly believe that a contract with bankers is sacred whereas an obligation to the farmers is a mere scrap of paper. There must be some explanation and I would like the government to give it.


James Garfield Gardiner: I will just say in reply that the auditor's report has been tabled and is available to everyone. It will be found, I think, on reading that report and following carefully the legislation that is being brought down, that the legislation provides for the payment of all the money which the auditor's report would permit of our paying. That will be found, I believe, on reading the auditor's report and the legislation itself, and when the case has been fully presented on the second reading of the bill, it will be found that all the money that can properly be paid is being paid under the present legislation.


Richard Bedford Bennett: The point that I last made this afternoon I suppose is answered by the position which the government take that they will not avail themselves of the legislation heretofore passed but propose to have passed a statute of their own. That is,
Wheat Board

of course, within their right, if that is their purpose, but I desire to point out that the law as it now stands would enable them to deal with the situation.
What was said by the hon. member for Selkirk (Mr. Thorson) brought to my mind the contentions that were made, namely, that the pools should be reimbursed for the money that had gone to reduce the liability which the government had guaranteed. I find from what the minister says that that sum was not $800,000, but $300,000 odd. I cannot recall at any time having heard the story about oats and that there should be a reimbursement there. The principle on 'which it proceeds I find a little difficult to understand, but that is neither here nor there. The government proposes to make payment for the loss sustained with respect to oats and to return the money that was credited against the guarantee of the government on the sales of flax, rye and barley. I think the pools would also be clearly entitled to the benefit of the interest that the government was released from paying on that account. I do not know what it is or whether it has entered into the computation, but clearly if as a result of the producer's property entrusted to them for sale there has been realized a profit of $300,000, as I understand it, on the basis of the figures mentioned by the minister, there should be a reimbursement for what the country saved by not having to pay interest. That would not be unfair, I should think. With respect to the oats item, I find it a little difficult to follow that in its entirety; indeed, I confess I cannot follow it.
With respect to the matter of expense, that was one of the real difficulties that was responsible for the necessity of introducing a certificate. The report of the auditors on that point has been presented to the government, and so they are able to deal with it. So that leaves no question at issue, if, in the first place, the pools are to be reimbursed the price of wheat on the basis mentioned; and if, in the second place, they are to be reimbursed the moneys to which at least in equity they were entitled, plus the interest saved by reason of its having been credited against the account. That disposes of two questions.
I am unable to deal with oats because I have not grasped the situation in regard to that at all. All I understand is that a loss was made and the country proposes to reimburse the loss.


James Garfield Gardiner: Probably I could make that clear to the right hon. gentleman.


Richard Bedford Bennett: All right.


James Garfield Gardiner: The position is this: There are four different accounts, and there are surpluses in three of them. We are returning those surpluses. We had guaranteed those accounts, and we believe that when the account showed a profit we should return the surplus, that is the surplus over and above the initial price paid. So far as oats are concerned there was $200,000 less than enough to pay the initial price paid to the farmer, and our guarantee involves the government paying that $200,000. So, without any provision in this legislation at all we are bound by the guarantee which the government gave to the banks to take care of that $200,000. That goes not to the farmers but to the bank, to pay the losses in connection with that account.


Richard Bedford Bennett: That being a separate account.


James Garfield Gardiner: Yes.


Richard Bedford Bennett: That makes that abundantly clear. Then, about the fourth item of expenses, there seems to be no difficulty about that. The auditors have reported upon it, and therefore the order in council would still be effective except as to the amount. The amount would be that certified by the auditors, except that in so far as coarse grains are concerned no order in council would be necessary. All the wheat board would have to do would be to repay the amount of money they had received credit for in the accounts of the bank, because when they assumed the bank liability they assumed a liability that had been lessened by the sale of these three commodities, and all that would be necessary would be to issue a cheque for that amount.


Charles Avery Dunning: They had no authority to do so under the law.


Richard Bedford Bennett: I think they would have, for this is not coarse grains; this is money, and the assumption of liability is an assumption of liability which has been reduced by taking somebody else's property.


Charles Avery Dunning: But where there was a loss-


Richard Bedford Bennett: I quite agree that with respect to losses the position is different, but we do not require any legislation with respect to that because our guarantee covers it, and all we have to do is to pay it.


James Garfield Gardiner: Legally speaking, we could keep the profits as well; that is to say, our guarantee permits of our keeping them because there is not sufficient money to

Wheat Board
take care of all the government's guarantee. So far as the bank's account is concerned, wheat and everything else are thrown into one account, but there are five different accounts with respect to the farmers.


Richard Bedford Bennett: It does not require legislation to deal with that phase of the matter, nor does it require legislation to deal with respect to losses because we are bound by our guarantee. With respect to expenses, I think that is covered if the expenses are referable to wheat. That must be covered by paragraph (f) of section 7. However, the government has determined to proceed in the other way and not to avail itself of the provisions of the law as it stands, and of course it is their privilege to do so. I was not assenting that parliament could not take any action it pleased with respect to any matter, because parliament is never bound by what has been done. It can always undo what has been done and can do it in some other way. There is a rule of law, to which I might refer, namely, that if you desire to repeal one method and substitute another for it, direct action should be taken. That eliminates the question of implication.
There was a celebrated comment on the law written by Mr. Herbert, one of the great wits of his day, -whose book was highly commended by the Lord Chief Justice of England. He says that there is no such thing as the magna charta because by implication it has been repealed. He then gives the reasons why it has been repealed by implication. That is not very good jurisprudence as it leaves the question whether a statute has been repealed open to implication.
The situation then gets down to this: The government having chosen the method by which to deal with this matter between the producers and the wheat board, it places in the hands of -the wheat board a sum of money which it says they are to pay over to the producers. That is the position as I understand it. What I cannot understand is why a question that was discussed yesterday with such animus could not have been disposed of with the simple statement that the addition to the original conception of the order in council was made with no political consideration. It must be apparent to anyone who goes into the matter at all that that must be the case when you add to any proposal a condition that subjects its operation to a delay that must be inevitable, namely, the auditor's receipt. I looked up some of the newspapers published at that time and I found a long article which appeared in the Winnipeg Free Press of October 10. It seems that at that time there
was no doubt. There was a statement that this was the correct understanding of it. The article reads:
The Free Press Wednesday asked W. F. McLeod, prominent pool official when the payments would be made. Mr. McLeod said there was no truth whatever in the report. "Its a damned lie,'' he said, "and you can tell that to whoever told the Free Press."
That is very strong language to use in dealing with the matter. The question as to the eighth and- tenth of October being important dates wras raised and someone suggested that there must have been very speedy facilities for the transportation of mail between Winnipeg and Ottawa. Surely it must be known to the hon. member who mentioned the matter that in the very necessity of things much of this would be discussed by telephone. The reason this matter was dealt with was the fact that the pool was clamouring to get rid of its wheat and to hand over its obligations at the banks to the new wheat board, and the new wheat board was endeavouring to commence its operations. Before it was able to do so, solicitors had to be consulted and the forms had to be prepared. This involved much delay and in all that time the government was dealing with the problem of fixing prices. At the same time it was negotiating for a basis upon which these assets of the producers could be turned over to the new wheat board. These terms had to be embodied in some form of contract and ultimately the contract took the form of an offer and an acceptance in writing. The government had to approve and decide upon such ;erms and conditions as might be agreed upon with the approval of the governor in council. When the matter came to the government I remember I was not here. I have looked it up and I find that on those days I was in Cornwall, Lindsay and Toronto. I well recall Mr. Hunter coming to me and I well recall the report being presented to me. I recall also writing into the document the provision that there should be a verification of the amounts by an auditor's certificate.
If one looks up what took place in 1930 he will find that one rather important matter was never completed because of delay in getting the order in council circulated in time to have it signed by the fourth man. An appointment which might have been made was never made. That is an indication of what might happen in connection with questions of this kind. Why it should be suggested that there was anything sinister behind it, or why it should be left to inference that there was something dishonourable in connection with it, I eamiot for the
Wheat Board

life of me understand. I should like to have it made abundantly clear to this committee before it rises whether o-r not this government charges the late administration with any sinister purpose or any fraudulent design or improper procedure in endeavouring to carry out the transactions to which reference has been made to-day.
Mr. GARDiINER: I may say that I think the inference that something of that kind might be taken from the remarks of either myself or others has been largely on the part of my hon. friends opposite. I have criticized the means by which the order in council was developed and by which signature was obtained to the order in council.


Richard Bedford Bennett: Whose?


James Garfield Gardiner: I have not said at any
time that there was any sinister motive or anything of that kind in connection with it. I am quite sure that no member of the government thinks there was any sinister motive. There might have been a political motive, but that is something the people will have to decide for themselves. I do not think anyone has suggested or insinuated that there has been any sinister motive or any disposing of the funds of Canada in an improper manner. I -am quite free to say this to the leader of the opposition. I think probably I have said most of what has been said on the part of the government, that there was no such intention in connection with any part of it. There was the pointing out of the fact that this did take place in the week immediately preceding the election and there was some reason why there might be difficulty in having ministers present at that particular time. The only fact which might require a little explaining is, -as t-o why it should have been done in that week. While that might require some explanation, there is nothing sinister involved. It is simply a matter of choice on the part of the government as to when this should be done.


Richard Bedford Bennett: I am obliged to the minister for that statement. I should like to make clear that even political motives cannot be attached to this transaction. When the order in council was issued it provided that it would not become effective until an auditor's certificate had been provided and that could not be done between the date of the order in council and the date of the elections. Of course it follows that you never can convince those who are your political opponents that anything you do is done with other than political motives. That being so, I suppose it is equally true that those who now sit to the left of the Chairman view

the acts of the present administration as having behind them political motives. When one sees that they take steps that their opponents might have hesitated to take with the same means, one wonders whether, after all, political motives are not attached by all opponents to governments in power, whatever they may do, good, bad or indifferent. That, I think, is fairly apparent from what has been said here, but I was deeply hurt that it should be suggested in the terms in which it was yesterday that this matter had behind it something that was very improper. Why should we have had all this discussion when a single sentence would have answered the whole matter, namely, that the delay was due to the fact that it had been provided in the order in council that an auditor's certificate should be forthcoming before payments were made; that that certificate was not available on the 25th of January, and that when it was it did not warrant payment being made in the amount specified in the order in council?
Resolution reported, read the second time and concurred in. Mr. Gardiner thereupon moved for leave to introduce Bill No. 22, to provide for the payment of certain sums of money to primary producers of wheat with respect to wheat of the 1930 crop delivered to provincial pool organizations.
Motion agreed to and bill read the first time.


Mr. SPEAKER:: When shall the said bill be read the second time?


James Garfield Gardiner: Now.


Richard Bedford Bennett: Is it printed?


James Garfield Gardiner: Last evening I asked for the permission of the house to have the bill read the second time, if possible, so that we might proceed with it, and I am informed-I say this for the information of the leader of the opposition-that everything has been done to get the bill in readiness for the presses to start immediately the first reading is given, so that copies will be got out right away and distributed as soon as it is possible to get them here. If that is satisfactory I would ask permission to proceed.


Richard Bedford Bennett: I indicated last evening that so far as we were concerned we would interpose no difficulties to the second reading being given at once, without in any sense abandoning our rights to deal with the question of principle when the bill is in committee or on the third reading. Reserving those rights, and without prejudice, I certainly offer no objection to the bill being read the second time.

Seed Grain


Some hon. MEMBERS:: Carried.


James Garfield Gardiner: I wish to make some remarks-


Richard Bedford Bennett: That is rather difficult unless we have copies of the bill.


James Garfield Gardiner: With permission for me to make, in the committee stage or following that, the address that would be made on second reading, I think that is satisfactory.


Richard Bedford Bennett: Quite so.


Mr. WOODSWORTH:: I do not think we ought to be asked to pass the second reading of the bill without having copies of it before us.


Mr. VENIOT:: The second reading has been carried.


James Garfield Gardiner: I do not see much advantage in proceeding inasmuch as we cannot go into committee without the bill.


Richard Bedford Bennett: You can get the second reading.


Charles Avery Dunning: Second reading! It is possible only by unanimous consent, and if my hon. friend from Winnipeg North Centre (Mr. Woodsworth) objects, of course the bill cannot now be read the second time.


Peter John Veniot: The second reading was passed before he objected.


Charles Avery Dunning: I question very much whether we shall make real progress because we cannot go into committee immediately, not having the bill. We are prepared to let the second reading stand until the bill is here.


Walter Edward Foster: Next sitting of the house.


SEED GRAIN
[Stage Direction]
Hon. CHARLES A. DUNNING (Minister of Finance) moved that the house go into committee to consider the following proposed resolution:
That it is expedient to bring in a measure to authorize the guarantee by the government of Canada of the principal and interest of loans made to or guaranteed by the province of Saskatchewan for purchasing seed grain and providing other assistance to farmers in connection with seeding operations during the spring of 1936.
Motion agreed to and the house went into committee, Mr. MacMillan in the chair.
Richard Bedford Bennett: Will the minister explain this, as to the amount involved?


Charles Avery Dunning: The question of seed grain has been a vital one on many occasions in the history of western Canada, and various measures have been necessary from time to time, on the part of both provincial and federal governments, to deal with it. During the past season very considerable damage by rust was caused in Saskatchewan and in parts of the other provinces as well, with the result that the grain was so much damaged as to be no good for seed. This has created a very serious problem, much more serious in Saskatchewan than in either of the other provinces, and the measure for which this resolution is the foundation is designed to cooperate with Saskatchewan in meeting this situation.
The province has on its statute books certain legislation respecting loans by municipalities and by local improvement districts, under the terms of which statutes borrowings by local authorities are guaranteed by the province. The legislation which will be based upon the resolution now under consideration involves adding the federal government's guarantee to that of the province with respect to obtaining loans for the purposes indicated. The amount which will be found in the bill as the aggregate principal amount which may be guaranteed by its terms is $4,000,000. While under the terms of the resolution the federal government guarantees repayment of principal and interest, provision is made in the bill to the effect that if the federal government should be called upon to implement its guarantee with respect to any portion of the amounts advanced, Saskatchewan must reimburse the federal government in that amount, or must deliver to the finance minister securities of that province representing the amount of money which the federal government is called upon to pay. Three years is allowed in the legislation-this is :a detail which I suppose should be explained at a later stage, but I want to give a general understanding of the situation-with respect to implementing any guarantee under the legislation.
I think that is all I have to say at the moment. The measure can be, naturally, very much better understood when it is before hon. members at later stages, but I desire to convey at this stage a fairly complete appreciation of what it is because of the fact, of course, that it is entirely a financial measure.


Major James William Coldwell: Is this legislation in Saskatchewan new legislation at the recent session, or does it follow the lines of the legislation passed in Saskatchewan last year, which-

Seed Grain


Charles Avery Dunning: The hon. member is speaking of the provincial legislation?


Thomas Miller Bell: Yes-which guaranteed the loan companies? Does this guarantee the loan companies, or does it guarantee the local authorities? In other words, is this a variation from the legislation of last year?


Charles Avery Dunning: The provincial legislation as amended this year is entitled "An act to enable municipalities to borrow money for the distribution of seed grain and supplies." I have gone through it very carefully in order to reply with accuracy to my hon. friend. The legislation of Saskatchewan relates to municipalities, and there is a separate statute relating to local improvement districts, in which the matter is being handled this year in a slightly different manner from that in which it was handled last year, inasmuch as under the Local Improvement District Act as amended this year the minister of municipal affairs of the province becomes the borrower.


Thomas Miller Bell: Is the rate of interest specified?


Charles Avery Dunning: No; there is no rate of interest specified in the bill. One of the primary objects of the federal guarantee is to ensure the lowest possible rate of interest from the banks for loans of this kind.


Mr. STEVENS:: May I ask the minister a question which affects the principle as indicated in this resolution? Instead of making loans or guaranteeing loans and interest, have the government considered the advisability of making a loan to the province or to any other distributing authority of the actual wheat now in their possession? The wheat in their possession costs money to carry.


Charles Avery Dunning: Yes.


Henry Herbert Stevens: A good deal of it is being carried in privately owned elevators, terminals owned by private companies, upon which there is a regular carrying charge of approximately, I think, a cent a month. It strikes me that if we could loan the wheat, with the understanding that out of the crops grown a return could be made of this seed wheat, this might be better than handling the matter in a financial way and guaranteeing loans and paying interest. Would the minister say whether that suggestion has been considered?


Charles Avery Dunning: Yes. It occurred to my own imagination that there might possibly be some merit in working it out in that way, and I had an examination made of the possi-

bilities of it through the wheat board and also through the provincial authorities. But the complications were entirely too great. This procedure seems to be much more simple, and in relation to the wheat itself, which is now owned by the wheat board, naturally the wheat board, or those acting for the wheat board in the country elevators, will be the suppliers of the wheat, and the wheat which is supplied will constitute a sale on the part of the wheat board to the municipality, or to the local improvement district, as the case may be, and will thus immediately stop storage charges as far as that particular wheat is concerned. In other words, this method of accomplishing the purpose is merely machinery designed to effect the end that the hon. member for Kootenay East (Mr. Stevens) desires to see effected.


Henry Herbert Stevens: Except in this one regard. If the money is borrowed by a municipality or the province or some other authority, it will be borrowed, in all probability, from the banks.


Charles Avery Dunning: Yes.


Henry Herbert Stevens: And interest will be paid to the banks for the loan of such money.


Charles Avery Dunning: Yes.


Henry Herbert Stevens: Then, that money will in turn be used to purchase wheat from the wheat board.


Charles Avery Dunning: Yes.


Henry Herbert Stevens: On the other hand if the wheat board-and they have wheat scattered all over the country; they have some in Edmonton, some in Saskatoon, some at Moose Jaw, some at the head of the lakes, some at Vancouver, some in Lethbridge; it is all) over the country-could loan the wheat, it strikes me that the machinery would not be different. Then the borrower could receive the loan, but instead of receiving it in value upon which he pays interest, he could receive the loan of the wheat and this would save him the interest. It may be said that that is unwise, because the government would be getting no interest, but the government is now paying interest to the banks for the carrying charges of the wheat, particularly the futures' contracts that are held. It is all the same; it has the same effect. It is paying charges to elevator companies for carrying this wheat, some of which, I venture to say, that is now owned by the government or the wheat board, has been held for four years. I think some of it still is being carried on the old contracts

Seed Grain
of four years ago and has cost in carrying charges about forty cents a bushel. That is one of the tragedies of carrying this wheat. My suggestion is that if we lend the wheat we could save the farmer whatever little interest charge is involved-it does not amount to much, but it is something-we could save the government or the wheat board the carrying charges of that wheat during the time, one year or whatever period it is, that the farmer would have to use it, and the farmer could return the wheat next fall by a deduction from whatever he delivers of the amount of seed he received, provided of course he has a reasonable crop.


William Daum Euler: That is the trouble.


Henry Herbert Stevens: Well, then, this can be spread over a period of two or three years. This practice of making monetary loans for the purpose of seed grain purchases is a very old one in this country. I venture to say that in the last three or four months my hon. friends in their treasury board have cancelled scores of old accounts, some ten, fifteen and twenty years old, in respect of advances made years and years ago in this way. On the other hand, if we ultimately lost the wheat it certainly would not be a larger proportion than we are now losing on cash loans that have been made, and I think it would be a much better system of handling the matter than making cash loans. I cannot understand why we should create a considerable fund-$4,000,000 is suggested; I admit it is not a very large sum, but it is $4,000,000-and pay interest to banks on that sum, merely to advance credit. When we have the wealth right in our own hands and do not know what to do with it, why not work out a system under which you could loan the wheat itself?


Mr. McDONALD (Souris):: I should like to ask the Minister of Finance whether Manitoba has applied for a similar loan.


Charles Avery Dunning: Manitoba has been advised of the conditions of this legislation and is at liberty to apply for similar assistance if it is required, but I am advised that that province expects to be able to care for its requirements otherwise. The area in Manitoba that is affected is relatively limited, and while what I say is subject to change if we are differently advised, according to my advice at the moment Manitoba expects to be able to look after its own requirements.


Richard Bedford Bennett: Why does not the government proceed by order in council under the 12739-96i
relief act, as we did last year in connection with seed grain for Saskatchewan and Alberta? By order in council dated May 31, 1935, with regard to Alberta and order in council dated April 8, 1935, in regard to Saskatchewan, instead of guaranteeing it, the money was loaned to the provinces and they dealt with the matter themselves. As far as we are concerned surely the statute is broad enough to enable the matter to be dealt with in that way, so why is it not dealt with by order in council?


Charles Avery Dunning: Frankly, we believe that this is a better method of dealing with the matter, principally as a result of past experience in the province itself. The best results ever secured in the administration of seed grain came about as a consequence of the adoption of this policy, and when I say the best results I mean from the standpoint of repayment by the farmers. The farmers felt their obligation to their municipality, which was their own local, self-governing entity, and apparently made much greater efforts in the way of repayment than ever before had been the case in connection with advances of the kind mentioned a few moments ago by my hon. friend from East Kootenay. Such advances were made many years ago and, as the hon. member says, from time to time in the treasury board it is necessary to write them off. The experience in that regard may be interesting.


Richard Bedford Bennett: But that would not be changed; that practice was in foroe last year. The amounts advanced to Saskatchewan last year were dealt with in that way.


Charles Avery Dunning: You mean loaned directly from the federal treasury?


Richard Bedford Bennett: Certainly. You are giving guarantees, and it is the same thing.


Charles Avery Dunning: I am anxious to get the resolution through, and I desire not to say anything which will give even the slightest offence to my right hon. friend.


Richard Bedford Bennett: Even since this session began millions of dollars have been advanced to Saskatchewan under the relief act which parliament passed last year. The provision is there to deal with such matters; the law is there, it was passed last year. This year you are going to deal with the matter differently; you are going to pass a statute. Everything you could do by statute you can do by order in council. Even in the last six weeks you have been dealing with millions of dollars in connection with the four western prov-
Seed Grain

inoes. I have the list before me, showing $3,000,000 at a time in connection with Saskatchewan. Why did we not pass a statute in respect of those amounts?


Charles Avery Dunning: For renewals.


Richard Bedford Bennett: The government made
grants, too, new loans. Take the very first one on the list, the matter of increasing the grants to the provinces to seventy-five per cent. That was done by order in council.


Charles Avery Dunning: Before parliament met.


Richard Bedford Bennett: Certainly, but with this
blank cheque which you condemned so roundly; you utilized that to increase the grants to the provinces without regard to need at all, with no need test at all. The grants to all the provinces, Prince Edward Island, British Columbia, Manitoba, Alberta, Saskatchewan and all the others, were increased to seventy-five per cent. I stand subject to correction as to whether the figure is seventy-five per cent, but that is my memory according to the statement of the Prime Minister the other day. During the last six weeks, with parliament in session, the government has been dealing with loans to Saskatchewan. I have before me the list of renewals and new loans to Alberta, Manitoba, British Columbia and so on; almost every few days an order in council is laid on the table of the house, and this morning I took the trouble to look at them. When you can deal with this whole situation through the municipalities, just as we did last year, with the province assuming the responsibility, under the legislation passed last year, why are we having recourse to a statute in this case?


Charles Avery Dunning: I suppose I must be prepared for a fight. I simply say frankly that this is definitely a part of the policy of the present government to get rid of that very method of which my right hon. friend is speaking. I will be quite frank; one of the things quite appalling to me, returning to the office of finance minister after five years, is the extent of power under the statute to which my right hon. friend refers. I recognize that there was very grave necessity, in many instances, for power to act, but the breadth and extent of use, and the tremendous sums of money involved in what has come to be called the blank cheque system, constitute a very grave responsibility for a finance minister to carry. My right hon. friend says that we have been using that authority. Surely there can be no question about this: Prior to the assembling of parliament there

was no other authority under which it was possible for the government to act in order to renew obligations already existing, and to take care of conditions, particularly with respect to relief, as they arose.
My right hon. friend says that we increased the payments to the provinces on account of direct relief without any need test; I think that was the word he used. I suggest that he might credit us with having very carefully examined that situation and having examined also his own method of dealing with it. In fact his method of dealing with direct relief was not changed. The question of the adequacy of the then existing scale of payment to meet conditions which we found existing in many of our major municipalities during the past winter brought the government to the conclusion that the increase was essential in order to put the people of this country through the winter. We had the authority under the legislation to which my right hon. friend refers. We had no parliament in session. We used the authority that was there, and I submit that we had no alternative.
Now, since parliament has met, surely the only complaint that can be made is that this type of legislation has not been introduced at an earlier date in order to get out from under the necessity of the blank cheque, as far as possible and as quickly as possible. Perhaps there is some ground for that criticism. It is really a question for a government to determine at the opening of a session of parliament as to which are the first things in importance to be dealt with, to be presented to parliament in session. We used our very best judgment in determining which were the first things, and we think we put first things first. But gradually, as the session progresses, we are endeavouring to replace the order in council provisions, under the statutes to which reference has been made, by statutes enacted in this parliament giving specific and requisite authority with respect to these matters. In times like these, of course, certain latitude is required. My own difference with my right hon. friend would be the extent to which he took that power to the government. I believe it really went beyond the necessities of the situation, great though they were, and it is important that parliament should retain in its own hands control over great expenditures and the manner in which they are made. The subject is a difficult one. My right hon. friend knows better than any other man in this house the difficulties I am facing in connection with these very matters, because he has experienced them. At the same time we are desir-

Seed Grain
ous of having parliamentary authority with respect to matters which, as my right hon. friend correctly states, could to-day be dealt with by order in council under existing legislation. I have tried to be as non-provocative as possible in discussing the question, because I desire to make some headway.


Richard Bedford Bennett: I do not think anyone could say that the Minister of Finance has been other than fair in the statement he has made, but five days from now the relief act is gone.


Charles Avery Dunning: I beg your pardon.


Richard Bedford Bennett: Five days from to-day the relief act is no longer in force. It expires on March 31, 1936. Thus far no provision, other than the resolution endeavouring to deal with Saskatchewan, has been made to deal with any problems. I am pointing out that if this is necessary with respect to Saskatchewan, between now and five days from now the power to deal with Alberta and Manitoba will have gone. It is no use suggesting that they may come in, because this house will rise a week from Wednesday for twelve days, and unless there is some statute which may be made effective, the government will have no power to deal with the matter. I suggest that if we are going to single out Saskatchewan to the extent of over S4,000,000, the proper course would have been to make some provision through which the government- could also have dealt with the other provinces. Place a limitation upon it, if you like, and do it by statute, if you will. I would not complain if the government did it by statute, if in the exercise of its discretion it feels it preferable to deal with the matter in that way, rather than by order in council. But it can only deal with it by order in council within the next five days.
I was hopeful that at least something might be done to enable the critical situation in some provinces other than Saskatchewan to be dealt with. I have mo objection in the world to the government following that out in any way it pleases, because in view of the denunciations which took place during the last three or four years I had expected that in the first week of parliament the relief act would have been repealed, and that a new provision would have been offered to deal with the situation. The minister did not catch the point of my criticism with respect to a general increase without a need test, because every province was not in the same position. But every province shared to the same extent in the increase. I know of my own knowledge, before leaving office, exactly
what the position was in some of the provinces in connection with what they had to do monthly for their own relief, and how wholly more than adequate in some cases and how wholly inadequate in other cases it might be.


Charles Avery Dunning: I get the point now.


Richard Bedford Bennett: That is the only point
I wikh to make. I rose to ask the horn, -minister a question which he has answered. He states that they might have had power to deal with it, but that as a matter of policy they prefer to deal with it in the way in which they have dealt with it. I have no objection to that being done; only I am anxious to have on the statute books something whereby the situation which developed in the province from which I come might be dealt with, so far as seed grain is concerned. After the 31st day of this month I do not know how it will be dealt with.


Charles Avery Dunning: I believe I previously
indicated the intention of the government to introduce special supplementary estimates.


Richard Bedford Bennett: Yes.


Charles Avery Dunning: I shall be frank with
the committee. When for a period of time the whole machinery of government has been carried on through the medium of orders in council, under broad legislation and broad powers such as those which have existed, it is not easy to bring back the machinery of government into what might be termed the parliamentary channel. I am speaking of the mechanical difficulties.


Richard Bedford Bennett: That sounds like the
Prime Minister.


Mr. ROWE (Dufferin):: You are pretty
late in starting.


Charles Avery Dunning: I might tell the hon.
member that we have been busy at the job ever since we took office, and we are still busy at it, and have had considerable difficulty.


Percy John Rowe: You will be
busier, too.


Charles Avery Dunning: I expect to have the
situation in hand before the expiry of the special powers contained in the relief act which, my right hon. friend correctly states, terminate on the 31st day of this month. These are measures going as far as, in the judgment of the government, they should go. There are in the existing legislation some powers for which the government does not deem it wise to ask for a renewal. I
Seed Grain

shall not go into further detail at the present time, but I may say that this is one of t'he' matters which is causing me considerable difficulty at the present time and events may change from day to day. Further than that I cannot speak with regard to the matter. But with respect to other phases of the same subject may I say that provisions are contained in legislation the discussion of which I hope will follow the passage of this resolution. There are the bills in the name of the Minister of Labour (Mr. Rogers) which will be debated to-night or to-morrow. I am not sure whether he will be able to go on to-night. I believe there are two measures standing in his name. When within the next week the house has before it, as it will, the measures proposed by the Minister of Labour, this measure now under discussion and the special supplementary estimates, I think it will be agreed that the field formerly covered by the broad powers of the relief act has been taken care of by separate parliamentary enactments.


Henry Herbert Stevens: I should not like the subject I introduced a moment ago to be brushed aside too lightly. I am not personally concerned about the exact method used to perform this particular task. I have no objection to the resolution, but I am desirous of pointing out to the committee that if the resolution passes in its present form, and no consideration is given to the other suggestion, then such suggestion is swept aside and not considered at all.
Before I desist from bringing it to the attention of the minister I should like once again to emphasize the significance of the matter. This guarantee of loans amounting to $4,000,000 will in all probability be substantially absorbed. I believe we could say that it would be taken up in full. That means that there would be $160,000 per annum interest, taking the rate of four per cent. If it were done the other way there would be no need whatever of paying $160,000 interest. Mark you, the security is just such things as we have, namely the wheat in our elevators. We have about 200,000,000 bushels of wheat in our elevators, and that is real wealth; in fact it is better wealth than the currency of our country. It has real value. That physical grain could be loaned to the farmers without interest and with no loss to the government. On the contrary there would be a saving of elevator and carrying charges. I am not criticizing the minister, because this has been done before, but I would say to him that we are proposing to saddle ourselves with a guarantee of interest. We are asking

the producers to pay the interest, and as I say, in the aggregate it would amount to around $160,000 a year, running for a period of three years. There we have about a half a million dollars in interest alone, and in my opinion there is no need to incur that interest debt.
The minister stated that there was a question of machinery to be considered. May I suggest to the minister how it could be done without interfering with in the slightest degree, or without losing the advantage of the so-called machinery which has been set up. I assume that in the present instance the government would simply give a guarantee, and that in all probability the provinces would be the agencies handling the matter. They would handle it, downwards, by distribution through the municipalities, and would buy wheat from the wheat board. Instead of buying the wheat from the wheat board, paying to the wheat board a cheque which we guarantee, why not let the province go to the wheat board and borrow its wheat and get, not a warehouse receipt because it is the reverse of a warehouse receipt, but a document admitting the borrowing of so much wheat which has to be returned, or returned in value, at a given time. My good friend the Minister of Finance is smiling, but I really see no difficulty in the matter at all, and with the government having in its possession through the wheat board a couple of hundred million bushels of wheat I can see no reason in the world why we should not loan it.


Charles Avery Dunning: I was not smiling in any offensive way, I assure my hon. friend, but surely if his proposal has any financial or economic merit it rests wholly upon his statement with respect to the saving of interest charges. It cannot rest upon the saving of storage charges because, of course, storage will not be paid on the wheat after it is taken out by the farmer to be sown. What my hon. friend forgets in respect to the interest is this fact, that the wheat board would have to go on paying interest to the banks on that money. My hon. friend's proposition would really mean that the wheat board would be loaning wheat to the farmers free of interest, but that does not mean that there would be no interest paid, because the wheat board has borrowed the money wherewith to acquire the wheat in the first place, and if it has sold the wheat without repaying its loan it would have to continue paying interest on the money. I am not criticizing my hon. friend for falling into that little error because I did so myself at first in examining this matter.

Seed Grain
With regard to mechanical difficulties may I point out that the distribution of that wheat from, the point at which it presently is to the point at which it is needed has to be paid for by somebody. If the loan is to be a loan in kind with repayment in kind, there must be a translation in some manner of the money cost of movement into terms of wheat. That is another little complication, and one which is not without its difficulty in practical application. I can assure my hon. friend that when I got through with a complete examination of all that was involved it was rather difficult to see that any saving would be effected for anybody by adopting the suggestion which he has made.


Henry Herbert Stevens: The interest at present paid on a great deal of this wheat is not interest currently being paid to the banks because a lot of this wheat is purchased outright and owned outright by the board. The interest will be paid on the general debt of the country, in which losses on this account are absorbed.


Charles Avery Dunning: The wheat board is functioning just as it did when my hon. friend was a member of the late government. It is functioning by virtue of a guarantee by the government of Canada of bank loans.


Henry Herbert Stevens: Quite so, but the title to a substantial portion has been transferred to the wheat board or to the government; it is not still in the banks.


Richard Bedford Bennett: It never was in the banks.


Henry Herbert Stevens: The minister says that it was.


Charles Avery Dunning: We are probably talking at cross-purposes. I can certainly assure my hon. friend that up to the present time none of the losses on wheat has been absorbed into the public debt structure of Canada. The amount in the bill now being presented by my colleague the Minister of Agriculture represents really the firet step in that direction, and I am not at all sure-


Henry Herbert Stevens: Will the minister permit just one question more? Do I understand the minister to say with respect to that 200,000,000 bushels odd which are still held in this country, most if not all of it, I think, by the wheat board, that none of it has been paid for outright but is still being carried by the banks or by guarantees to the banks?


Charles Avery Dunning: To whatever extent the value of it is represented by bank loans guaranteed by the Minister of Finance, in the same manner as the business has been carried on in the last four years.


Henry Herbert Stevens: What proportion is still in that position? Is it all in that position? If there is only a portion in that position^ how is the balance carried?


Charles Avery Dunning: If my hon. friend
remembers the provisions of the Wheat Board Act of last session he will remember that prior to the time when the wheat board takes delivery of any wheat it is being financed by the agents of the wheat board, who are the pools and the elevator companies throughout the west. It is being financed by them in the ordinary way in their own country elevator storage, and the wheat board takes delivery-I do not know that it must take delivery even in the terminals, but that is where it takes delivery in any event-and the wheat is then paid for by the wheat board with funds which are loans from banks under the guarantee of the government of Canada. My hon. friend, of course, knows that a very large portion of the holdings from stabilization account, and so forth, are represented by future contracts and not by actual wheat delivered, and in that respect a bank loan is necessary which is guaranteed by the government with respect to the clearing house accounts of the wheat board from time to time.


Henry Herbert Stevens: All I wish to add is that I understood from Mr. McFarland himself some two years ago that he was taking delivery of considerable quantities of wheat, taking title to it and paying for it. I do not think it was a very substantial portion of the whole holdings, but it was a considerable quantity, and one of the considerations was this, and I might as well mention it now: It had been the practice for a long time to carry practically all this wheat in company elevators, while we had the Moose Jaw elevator idle, almost empty, and almost every other government elevator empty. I think the one at Lethbridge has some one hundred thousand bushels in it, with a capacity of over one million bushels, and the Port Arthur elevator was nearly empty for years. I myself suggested and urged that we should use government elevator facilities for the storage of the wheat, instead of constantly paying storage to the company elevators as we were doing. As my hon. friend knows perhaps better than any other man in the house, the elevator companies for the last five or six years have been making most of their money out of the storage of wheat.


Charles Avery Dunning: There is no doubt of that.


Henry Herbert Stevens: I may be making an overstatement by saying most of their money, but
Seed Grain

I believe I am not far wrong. They have been making a handsome profit at all events through carrying wheat in private storage- private, I mean, in the sense of ownership, because they are public terminals privately owned-and they were making this money while our own elevators were empty. I remember very well discussing this matter with Mr. McFarland, suggesting that we had abundant space and urging that we should load up our own elevators. This question of contracts came up, and I suggested that we might as well take delivery and store the wheat in our own elevators and save paying storage. I assume that we have a considerable quantity of that wheat, and it seems to me that if we have taken delivery and the title rests in the dominion government in the right of the wheat board we might very well afford to loan the wheat out rather than continue the method of paying storage to private elevators. I do not think we should pay any more in the form of outgoing interest than we have to pay at the present time.


Charles Avery Dunning: Even if the wheat board has title to the actual wheat, as it has, that is represented by a loan at the bank.


Henry Herbert Stevens: Not necessarily.


Charles Avery Dunning: Why yes, because-


Henry Herbert Stevens: I will stop after asking
one more question because I do not want to delay the minister. There is undoubtedly a lot of loans, and I am as well aware of that as any member of the house, and do not need to be reminded of it. I say that there is held by this country a certain quantity of wheat that is not represented by loans at the banks. That is the point I make, and I ask the minister if he can tell me what that is. I do not want to embarrass him if he has not the information before him, but if he looks up the records I think he will find that there is held in this country some wheat, and a considerable quantity, that has been paid for outright and for which the title now rests in the dominion. If interest is being paid, it is being paid on the general debt of the country.


Charles Avery Dunning: I am afraid we are talking completely at cross-purposes. I have not under my hand the figures to which my hon. friend refers. I hope I am not making a mistake, but I am as sure as I can be that there is no wheat in the position of ownership to which my hon. friend just referred. If the board owns physical wheat, it has borrowed money from the bank wherewith to pay for it. As it sells physical wheat it reduces its overdraft at the bank. I can assure my hon. friend

that the overdraft is large enough to cause me worry, particularly when sales of wheat are taking place, and that is practically all the time, at prices lower than the initial payments, basis No. 1 northern, Fort William, made by the wheat board.


Richard Bedford Bennett: That is our complaint.


Charles Avery Dunning: We shall have an opportunity of going into that matter very fully. My right hon. friend will not expect to get into a controversy with me now on it. So far as the statement of the hon. member for East Kootenay with regard to the earnings of private elevators during the past four years is concerned, I think he is absolutely correct.


Henry Herbert Stevens: And terminals.


Charles Avery Dunning: I believe their earnings
have been in a large part from the storage of wheat which has been held there as a result of the policy followed with respect to its disposal during the past four years. I should say, in fairness, that a very large proportion of these private elevators-using "private" in the sense that my hon. friend used the word- is the property of the pools. The western wheat pools themselves have enjoyed a substantial revenue as a result of the policy of keeping the country elevators full during the past four years.


Henry Herbert Stevens: The same thing applies
to the terminal elevators.


Charles Avery Dunning: The same thing applies
to the terminal elevators, a large proportion of which are also owned by the pools.


Richard Bedford Bennett: They reduced their rates.


Charles Avery Dunning: I say that with some
force because I felt rather annoyed at some propaganda which was circulated by the Alberta pool in an official publication to the effect that large payments had been made to big interests in connection with the storing and carrying of wheat. It is not often that I come to the defence of the leader of the opposition, but the fact is that the big interests that got money in connection with the storage policy were the pools themselves, one of which was making this statement. I have called their attention to it, so I am not saying anything here that I have not said to them. They were referring to what they called instances of feeding big interests and mulcting the farmer, when as a matter of fact the pools themselves were the largest recipients. That is only natural because of the extent to which they control the elevator facilities. I think it is only fair to say that, Mr. Chairman, but you should have called me to order ten minutes ago.

Seed Grain


Mr. FAIR:: Who is better entitled to these big profits than the men who built the elevators and supplied the grain to keep them running?


Charles Avery Dunning: Of course they are, but surely those who are receiving these benefits should not condemn the paying of these charges.


Thomas Clement (Tommy) Douglas: There are two acts upon the statute books of Saskatchewan, No. 89, the Municipalities Seed Grain and Special Act, and No. 75, respecting Advances to Purchase Seed Grain. Under which of these bills will this resolution come? It states merely that
It is expedient to bring in a measure to authorize the guarantee by the government of Canada of the principal and interest of loans made to or guaranteed by the province of Saskatchewan.
It does not say under which of these acts the proposed bill will come.


Charles Avery Dunning: That will be made perfectly clear when the bill itself is before the house. I indicated to my hon. friend's colleague a few moments ago that I had gone through the statutes. It will be out of order, but perhaps I had better read section 2 of the bill.


Thomas Clement (Tommy) Douglas: If the minister feels it is better to wait until the bill is before us, I am quite prepared to do so. I withdraw my question.


Mr. PELLETIER:: In view of the statement made a while ago by the leader of the opposition, who was concerned about Alberta and Manitoba because of the fact that the relief act expired on March 31, 1936, I should like to know just what will be the position of these provinces under this resolution when that act does expire.


Charles Avery Dunning: With respect to Alberta, I should have explained that the previous government by order in council P.C. 3045 of September 26, 1935, authorized loans up to
82,250,000	to Alberta for various purposes. One item in the order in council was to cover the estimated cost of seed grain that should now be purchased in Alberta to secure proper seeding. The amount in this instance was 8300,000. It was not expected that Alberta would require further funds especially in view of the fact that since the present government came into office loans totalling 83,932,000 had been authorized for payment to Alberta for relief purposes and to reimburse the provincial treasury on account of relief, including agricultural relief, previously incurred and paid from provincial funds.


James Shaver Woodsworth: While the minister is on this subject, what about Manitoba?


Charles Avery Dunning: I explained with reference to Manitoba a little while ago. My hon. friend can find that in Hansard, if he does not mind.


James Shaver Woodsworth: The minister said that Manitoba was not likely to need any. I should like to know what will happen in case Manitoba really does need something and this general act has expired.


Charles Avery Dunning: 1 shall have pleasure in introducing a bill to cover that situation in similar terms.


Mr. PERLEY (Qu'Appelle):: I have no
desire to hold up the committee because I think all western members appreciate the fact that March 26 is late enough to have seed distributed to the farmers in order that they may prepare properly for seeding. However, the amount involved is rather large,
84,000,000. I was wondering whether the minister had received estimates from the provincial government as to the amount required for each kind of seed, that is for wheat, oats and so on. Is the government taking any precaution to earmark this $4,000,000? Has the government received any statement as to any outstanding liability on account of seed grain purchased last year, or are there any liabilities on account of seed grain purchased last year?


Charles Avery Dunning: The answer to the first question is no. Next, we have not the particulars referred to. The provincial government has undertaken a thorough survey and their estimate is that not less than $4,000,000 will be required. It must be borne in mind that in connection with this method of procedure the province is vitally interested in keeping down the advances because its guarantee is there as well as its obligation to pay to the dominion any amounts which the dominion is called upon to pay under its guarantee, if it is called upon. The last question had reference to the making of payments under this guarantee with respect to loans of the previous year. This cannot be dome. It must apply specifically to loans made for this year's seed.


Richard Bedford Bennett: As regards Alberta, I am familiar with the provision with respect to the loan of $300,000. It was asserted by representatives of the present administration that it was desirable to purchase the seed before it was sold or shipped out, and they took steps in that direction.

National Harbours Board-Mr. Green
Agricultural relief did not help them with respect to seed grain. My information was- and that is the -reason I asked the minister- that they had been disappointed in the quality of seed; an early frost had lessened the value of a great deal of grain for seed, and they might have to get seed from a distance. I was familiar with the fact that in September last that the government made personal representations, through the premier and one of the members to the cabinet, as to the necessity of securing this money, and the money was guaranteed in- order that the seed might be obtained while it was still in the country. Then there was disappointment by reason of frost in the north and some rust, not -much, in the south. I made the inquiry because I felt that the government might receive a request at an early date in consequence of this discussion which we have had.
Resolution reported, read the second time and concurred in. Mr. Dunning thereupon moved for leave to introduce Bill No. 23, to assist the province of Saskatchewan in financing the cost of seed and seeding operations for the crop year 1936.
Motion agreed to and bill read the first time.


NATIONAL HARBOURS BOARD
[Stage Direction]
The house resumed from Tuesday, March 24, consideration of the motion of Hon. Mr. Howe for the second reading of Bill No. 17, respecting the national harbours board.
Mr. H. C. GREEN (Vancouver South):: At the outset, may I say that I approve the general principle of this bill, and that I have great admiration for the Minister of Marine (Mr. Howe), who is bringing in the measure. I believe that in Vancouver he is regarded as a minister of exceptional ability and fairness. 1 do suggest, however, that there should be in the bill some provision for the appointment or election of advisory local councils. That may not be so necessary in the case of ports that are near Ottawa, but I suggest that there should be at least the power to appoint or to elect such a local advisory council. That recommendation has been made by Sir Alexander Gibb in his very able report, and I would refer the minister to page 4, paragraph 9, in which Sir Alexander says:
Adequate representation of local interests and of the port users, which at present is almost non-existent, is essential to the progress and efficiency of a port, and a strong local harbour council should be established on an elective basis.

The idea is, I imderstand, that such council should serve without remuneration. A local advisory council would be particularly helpful to the port of Vancouver for the following reasons. That port is very far removed from Ottawa and it will be very difficult for a central control board to keep in touch with the problems of the port; further, there is bound to be delay in handling those problems. Then, the port is the only one on the Pacific coming under the terms of this act; our problems are those of a Pacific port and not of a port on the Atlantic or on the St. Lawrence. I suggest to the minister that the problems are quite different and are those of the ports of Seattle and Portland, with which we are in direct and strenuous competition. Again, private business interests have had far more to do with the development of Vancouver than is the case with these other national ports.
Again, I refer to the report of Sir Alexander Gibb, quoting from page 178:
I feel inclined to emphasize the tendency of Vancouver to develop on rather different lines from those of other dominion ports, in that there is there a much greater participation of private enterprise. Vancouver is a national port and its policy must be directed accordingly, but so long as local business continues to play the part in its development that it does at present, it should be given full scope, subject only to the overruling considerations of the national policy.
That is a direct finding on this particular question which I am discussing to-night.
We have in Vancouver a port manager who is an excellent man; he knows the port and the work; but managing that port is very big business, and it is physically impossible for a port manager to keep in contact with the various groups using the port. Sir Alexander Gibb also realized this point, and I would quote from page 31 of the report:
Considerable latitude should be allowed to the port managers, so long as their activities are directed to carrying out the policy laid down by the central authority. It is essential to avoid emasculating the local administration, since no centralized control can replace an efficient and active local administration, or the special knowledge and initiative of the local business community, both of which are vital to a port's prosperity.
Then he goes on:
For this reason I strongly advocate a local advisory council. There are very many aspects of port working which such a council can properly care for, such as the representation of the interests of private wharf owners, of local merchants and distributors, of local consignees and exporters, of the labour view, and of the attitude of boards of trade, chambers of commerce, corn exchanges and other such trade organizations, in addition to shipping.

National Harbours Board-Mr. Ryan
It serves very usefully to identify the community with the port; and to secure the support and interest of local members of parliament, the city council, or provincial government in schemes, and so anticipate and meet criticisms from any such quarters, or action that might be prejudicial to the port.
It is invaluable in exploring the possibilities of local markets, in carrying out advertisement and propaganda, and in cooperation with interests likely to promote industrial developments. Finally, a local council provides a useful check on the tendency of more or less permanent officials to become stereotyped or arbitrary.
I cannot emphasize this too strongly, because our port is vital to the development of Vancouver. Sir Alexander goes on;
The port manager would be ex officio chairman of the council, which would meet regularly and be consulted on all such matters as proposed developments, alterations in rates, important changes in operation. The members of the council should have the right of initiating discussions on matters of policy affecting the port, on any complaints raised by users of the port, and on questions of rates, charges, etc.; but not on any purely executive matters, and they would have no executive duties or powers.
The advisory council's proceedings and recommendations would be submitted to the central authority, and they should have the right of direct access to the central authority, but not to any other department of government.
I suggest to the minister that without a local council of some sort there is bound to be misunderstanding, there is bound to be friction in a port so far removed from Ottawa as is the port of Vancouver.
In closing, may I say that I have every confidence that the minister is trying to do the right thing for all of our great national ports, but I hope that he will consider again this question of appointing or electing local advisory councils. I cannot too strongly or too earnestly impress upon both the minister and the members of the house the need of such a council in the case of the port of Vancouver.


Mr. W. M. RYAN (St. John-Albert):: I want to make a few comments on this bill, since it affects the port of Saint John. Saint John was in a unique position among the ports of this country in that it owned its port prior to the sale to the dominion government in 1917. It assisted in the development of the port by the expenditure of large sums of money; it owned the fisheries; it owned the lands underneath the water. As all these things belonged to the city, certain reservations were asked for when the port was sold to the dominion government, and these reservations are contained in the act which set up the harbour commission for the port of Saint John.
The present bill makes no particular reference to the port of Saint John except in two instances. Section 6 refers to bringing the port under the jurisdiction of the new harbour commissioners, and section 39 provides for the repeal of the act to set up the Saint John harbour commission. I wish to call to the attention of the hon. minister that the city of Saint John, when it sold its port to the dominion government, asked for certain reservations, and those reservations are contained in the act of 1927, chapter 67, 17 George V. Section 17 of the act states:
The fisheries lots now the property of the city are to remain under the control of the city authorities until such time as said lots or any part thereof may be required for public purposes, and possession of the whole or any part thereof shall be yielded up to the use and control of the corporation after six months on the serving of notice to that effect in writing by the corporation on the city.
The section goes on further;
Likewise there is to be reserved to the city the right to use, for ferry purposes, the following property:-
And it sets out the boundaries which it reserves to the city for a certain time as specified in the section itself for use for ferry purposes. I am not going to deal with the boundaries, but I call attention to the fact that after the description of the boundaries it is stated that the city shall have the use of those boundaries-to read from the section-
[DOT]-until the Canadian National Railways or any government authority shall construct a bridge across, or tunnel under any part of the harbour not farther north or west than Hilyard's reef and Navy island,-or at such other point as may be agreed to by the city,- by which provision shall be made for a street railway service and free accommodation for foot passenger and other vehicular service; then and in such case, the city shall convey to the Crown the said lands and rights above reserved. In the meantime, the city shall be responsible for the maintenance of the property, so reserved, in its present condition at its own expense.
I submit that if this bill is passed in its present form-and provision is made here for the repeal of the original act; therefore those reservations which were reserved to the city of Saint John will be a fortiori repealed as well-this may lead to considerable difficulties at the port of Saint John. For that reason I call these particular sections to the attention of the minister. It may be said that in the bill before the house section 37 may be described as a saving section, but in my opinion that section will not help to iron out the difficulties which will ensue if the bill goes through in its present form resulting in the entire repeal of the original act which set up the Saint John harbour commission.

National Harbours Board-Mr. Ryan
Section 37 of the bill before the house states:
The corporations and the board are hereby declared to be amalgamated and to form one corporation under the name of the "National Harbours Board" which shall possess and be vested with all the works and undertakings and all other the powers, rights, privileges, franchises, assets, effects and properties, real, personal and mixed, belonging to, possessed by, or vested in each of the corporations at or before the coming into force of this act-
And so on. That section cannot be of any assistance, I submit, so far as Saint John is concerned, because under the act which set up the Saint John harbour commission no real estate was vested in the Saint John harbour board; it had only the management and control of the property, and if reference is made to the act itself it will be found that all real estate is vested in His Majesty the King. I saw the original deed and I know that is the way it is made out; as a matter of fact the act provides that it shall be made out in that way. So I call these particular sections to the attention of the hon. minister. I do not want to delay the passage of this resolution, but I think at this time these matters should be referred to, and if the minister will look into these different sections it may facilitate matters when the bill is before the committee. I think every section of the original act should be carefully scrutinized and analyzed before this house is asked to repeal that measure which set up the Saint John harbour commission. Unless this is done it may lead to very great difficulties; it may result in lawsuits, and in any case it will leave matters in a condition in which they should not be left having regard to the original legislation.
I am not here to oppose the principle of the bill; if the minister thinks it will be in the interests not only of the port of Saint John but of all Canada to have these different ports brought under one management, so far as I am concerned I am prepared to give this a fair trial. Like the hon. member for Halifax (Mr. Isnor) who spoke on this bill previously, I am a little apprehensive as well in regard to what the hon. member described as the long arm management directing affairs from the capital city in respect to transportation and similar matters affecting our port of Saint John, but I have absolute confidence in the minister himself. He is a man of experience, an engineer, familiar with marine matters and transportation, and we will look to him to see that the port of Saint John is protected after this bill is put into effect. Let me repeat, however, that I hope he will have this bill care-
fully scrutinized before it gets to the committee, because in its present form this bill will repeal many sections of the original act which were placed there especially to protect the interests of the port of Saint John.


Mr. R. E. FINN (Halifax):: Mr. Speaker,
possibly if the rules of the house were strictly followed I would not be in order in speaking to-night, because I moved the adjournment of the debate the other evening.


Some hon. MEMBERS:: Carry on.


Robert Emmett Finn: With the permission of the
house and your permission, Mr. Speaker, I will proceed.


Walter Edward Foster: Order. By unanimous
consent, and with the leave of the house, the hon. gentleman could proceed. Shall the hon. gentleman have that permission?


Some hon. MEMBERS:: Carried.


Robert Emmett Finn: I thank you, Mr. Speaker
and hon. members, for the privilege you have extended in permitting me to speak to-night without regard for a technicality which might have prevented me from so doing. I would have continued when I moved the adjournment of the debate last Tuesday night had it not been for the fact that for the past ten or twelve days I have been confined to my bed, unable to attend the sittings of the house. I had the good fortune, however, to be present that Tuesday evening and to hear one or two of the speeches, including that of my right hon. friend the leader of the opposition (Mr. Bennett).
May I say, Mr. Speaker, that I have read all the sections of the bill that has been introduced by the hon. Minister of Marine and Minister of Railways and Canals (Mr. Howe), the Minister of Transport to be. I agree with a great many of the points mentioned by the right hon. leader of the opposition in his masterly speech the other evening, when he made comparisons between the various ports and mentioned the futility, as he put it, of attempting to develop certain ports that neither God nor nature had ever intended to be such. Happily for me, sir, I come from a province that adjoins that in which my right hon. friend the leader of the opposition was born. In those little provinces of Nova Scotia, New Brunswick and Prince Edward Island were bom, I think, those finer ideals that are exemplified today in the confederation of this country from the Atlantic to the Pacific.
Much was promised to the little province of Nova Scotia in the early days. Great were

National Harbours Board-Mr. Finn
our hopes and wonderful our ambitions, I well remember as a lad hearing the late Hon.
A.	G. Jones and my late uncle, Doctor Edward Farrell, who were great contenders for Liberalism in the historic constituency of Halifax against the late Mr. John F. Stairs and the late Mr. T. E. Kenny. I remember my uncle coming in through the proscenium wings of the old academy of music and starting to speak. At once he put his hand to *his ear and said, "Hark, do you hear the whistle of the Hongkong train? No, and why? Because it is blowing in Portland." It may be that we who have to deal with measures involving the future development of Canada both east and west are not in a more happy position because, while the whistle of the Hongkong train is not blowing in Portland, I can assure hon. members that a great many of the ships that go up the St. Lawrence to Quebec and Montreal do not make their terminus at either Halifax or Saint John when the Almighty closes navigation on that great river for five or six months of the year.
I am a proud supporter of the present government, whose leader (Mr. Mackenzie King) I follow with an allegiance amounting almost to a religious belief, because he has followed in the footsteps of that great Canadian the Right Hon. Sir Wilfrid Laurier, who had no equal with the possible exception of the Right Hon. Sir John A. Macdonald. Possibly if the right hon. leader of the opposition lives long enough, as I hope he will, and learns as he lives, he may qualify for such companionship in the future. I desire to remind the house that the government of the right hon. Prime Minister brought to Canada Sir Andrew Rae Duncan who, with Professor Macmillan of McGill university and the late Judge W. B. Wallace of Halifax, were a royal commission created to deal with the great transportation problem of this dominion, and to determine whether it was possible to keep within the confines of Canada and on Canadian soil our great products until they reach the great harbours east and west from which, sail great ships over the seven seas.
The report of Sir Andrew Rae Duncan-an outstanding man; otherwise he would not have come to Canada-advised the formation of harbour boards, and also advised the construction of facilities in order that the provinces nearest the sea might be in a position to cope with the trade that was to be carried over the great transcontinental railways, of which Canada has at least four to-day. In compliance with the recommendations of that report the government of the right hon. the present Prime Minister created harbour commissioners and laid down rules and regulations. They were under the able administration of the then Minister of Marine, the present Minister of Public Works (Mr. Cardin). Under that legislation all capital expenditures were referred to Ottawa, and properly so.
It is said that "while the lamp holds out to burn, the vilest sinner may return." The right hon. the leader of the opposition, knowing of its successful operation when he was Prime Minister, When he qpoke paid great compliments to the two chairmen of his commission, Mr. Phinney, K.C., and Mr. Hether-ington, both appointed by himself. He spoke with the Gibb report in his hands, recommending abolition of commissions, and the appointment of port managers for every port in Canada; yet he disregarded it then, and now he praises it.
To-night I wish to compliment the Minister of Railways and Canals and Minister of Marine (Mr. Howe) upon his appointment. He has brought to the office skill of a type which few hon. members possess, and intelligence and youth, although he has not so much of that which grows on the top of the head. It would not take an accountant very long to count them, even if I stopped for five minutes to permit him so to do.


Mr. WILTON:: Is this a discussion on mutual admiration, or on harbours?


Robert Emmett Finn: May I say to the hon. member that if it is a question of sour grapes, the next time I pay a . compliment I will extend it to him. When I was interrupted I was referring to the hon. Minister of Railways and Canals and to the introduction of this legislation which carries with it the sanction of the government and, of course, the sanction of supporters of the government if it is to survive. Liberal governments are always ready to listen to reasonable, understandable and explainable amendments, and an open discussion of a bill is in order, so that the people may know what is taking place.
I understand that Sir Alexander Gibb advised doing away with harbour commissioners, and the appointment of harbour managers and a system of central control which would work out to the financial benefit of the country, and would have the effect of removing from politics those matters which to-day are the inevitable subjects of discussion, if politicians are to exist. If they are not to exist no hon. member would have the right to enter this chamber.
I have given in the past a great deal of study to the development of the port of Halifax and to the reduction of freight rates. I have argued before the railway commission
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and before ,the Supreme Court of Canada on questions of law reserved by the railway sommission in connection with the Crows-nest pass agreement. Unfortunately, under the bill it seems to me that too much authority is placed, not in the hands of the Minister of Transport to be: but in those of a board to be created, with headquarters at Ottawa and which would operate all harbours from one end of Canada to the other. To a major degree it would control and take away that autonomy about which the right hon. the leader of the opposition spoke on Tuesday night.
I have never been a believer in absent treatment, and I would not be in my place to-night if I had depended upon surgeons treating me over the telephone. If they had not come alongside the operating table and attended to my case, as they did at the time of diagnosis, it would not have been well for me. Absent treatment can never be a success, because there is not present a specialist with the ability to apply the treatment which is the remedy, for the trouble diagnosed. Why? It is partly due to the fact that the port manager is only a cog in the wheel, and is directed by the chairman and the two commissioners, resident in Ottawa, who know nothing about local conditions and who, from day to day, have not an opportunity to watch development, growth and needs of any and all the great ports of Canada.
For these reasons I am opposed to control by a board in Ottawa, unless its operations are confined to certain specific matters, one of which would be the control of capital expenditures by it through the Minister of Transport, and the placing of funds that come in through the port in the hands of the port manager in ordeT that they may be accounted for, used and expended under a central audit.
I have not had the honour of discussing this bill with the Minister of Marine, and so I cannot say just what are the government's intentions, but if this bill, in providing for central control at Ottawa, means that from this city there will go out to the various ports the supplies that are necessary for the operation, development and expansion of our harbour facilities, I say that this is not fair to the legitimate aspirations of the business people who are located at these ports. It will not give to our people in the various localities in which these great ports are located an opportunity to tender on a fair basis for the supplies that are necessary in connection with the operation of these ports. I may be judging too quickly, and if I am,

I owe an apology to the Minister of Marine. When the bill goes into committee, and we have an opportunity of analyzing acutely the various sections of the bill, I hope to hear from his lips just what is intended and what will be the effect of the legislation as it finally passes through this house to the upper chamber to become law and to govern our ports from one end of this country to the other.
There are many questions akin to that of harbour development. Many millions of dollars have been spent at the port of Halifax. The scheme of the port development there was first outlined under the Conservative war leader, the Right Hon. Sir Robert Laird Borden, who was advised by experts, and who contemplated the development of ocean terminals. The result to-day, I am sorry to say, is that at certain times, when gales or even strong winds are blowing from the southeast, some of the masters of the great ships feel that they have not the security that they would have if the inner harbour had been developed, as was projected by Mr. Kennedy, who laid out the harbour of Montreal. Later on, when under the Hon. Mr. Emmerson, Mr. Blair, and later under the late Hon. W.
S.	Fielding, as acting Minister of Railways, the port was developed, and what is known as the "Fielding pier," pier No. 2, was built, it was built as the first unit of the development of the inner harbour, a development that with McNab's island, Lawlor's island and George's island, made a great natural breakwater that God and nature placed there, and had that development been proceeded with conditions to-day would have been very much better. As Captain Webster of the Montclair said to me one day, "Mr. Finn, I feel safe enough to go to sleep if I can get my ship safely inside George's island with both anchors down, and then the wind, let her blow."
But the other scheme of development of the harbour was proceeded with. My right hon. friend the leader of the opposition, as he says, was present at the opening of the new pier, and I remember that he paid great compliments to the gentlemen who had occupied the position of chairman of the Halifax harbour board, one of whom retired through professional exigencies and the other by the will of the people. We should find to-day a bill introduced into this house to change the name of the Halifax harbour commission, due to appointments made by my right hon. friend and his colleagues. After the defeat of the provincial government led by Colonel Harrington, and prior to that by the Hon. Mr. Rhodes, ex-Minister of Finance, practically

National Harbours Board-Mr. Finn
every man that was guilty of attempting to steal the franchise from the people of Nova Scotia was dismissed after investigation. It became a political eleemosynary institution of the party of my right hon. friend opposite, and every one of those dismissed were tucked away into lovely positions which they still occupy, although very soon they will sleep on harder pillows. If efficiency is the great thing to be desired, then at least some hon. gentlemen opposite must cry out, "Mea culpa, mea culpa, mea maxima culpa."
I see another hon. gentleman opposite, for whom I have a great admiration, as I have for the right hon. leader of the opposition. I refer to the former Secretary of State (Mr. Cahan), who reminded me only ten days or two weeks ago, as we walked out of the house together, that at an oratorical contest in Halifax, when I was attending Lasalle academy-he being one of the judges when I won the oratorical medal-said that he never dreamed that he would live to see us both sitting in this house at the same time. I am sure, however, that he always believed that if we should be in the house together we would be sitting on opposite sides and yet still be true personal friends.
My colleague from Halifax (Mr. Isnor), in speaking of this bill, has used the expression, "the long arm." Well, the long arm is sometimes used for one thing and sometimes for another. While I do not operate an automobile myself, they tell me that sometimes it is just as well to have both hands on the wheel; that you cannot operate a car with a long arm. I agree with my colleague in saying that the long arm, this distant treatment of our ports from Ottawa, is not the treatment that is calculated to bring about efficiency or that splendid expansion of our ports that we all look to see.
I regret that the debate on this bill could not be connected up with the debate on the bill to be introduced by the Minister of Railways and Canals in connection with the amendment of the Canadian National-Cana-dian Pacific Act. I was glad to hear that that act is to be scrapped. Why? I believe that the legislation creating that board of trustees was one of the greatest injustices ever done the Canadian National railway system. It was the beginning of the thin end of tire wedge to hand over gradually parts of the Canadian National system to Sir Edward Beatty and the gentlemen whom my right hon. friend the leader of the opposition characterized as the moneyed men of St. James street. The Canadian National railway system is one of which Canada might well be proud. If we
are saddled with the Canadian Northern railway; if we are saddled with the Grand Trunk railway, it is because those babies were placed on the doorstep of Liberalism. The credit of the country and the honour of our people have to stand behind them because they were taken over when Sir Robert Borden was Prime Minister of Canada to save some of the banks. He did not stop until he gave Sir William Mackenzie and Sir Donald Mann ten millions of dollars for their equity of redemption when both these roads should have been sold under the hammer to the highest bidder. If that had been done the country would have been the richer.
I want to say before I sit down that I wish Sir Henry Thornton was alive to-day. I saw him in New York after he had retired from the presidency of the Canadian National system. I believe he was the biggest asset that the people of Canada ever had. It is true that he made vast expenditures, but he did this in the days when Canada was forging ahead and opportunity was knocking at our door, not for the last time or the first time. It was necessary to act, and he did so. He coordinated these great systems into one and kept them going until he stepped out of the presidency, I believe broken in heart and broken in body. It was said of the late President Wilson by Theodore Roosevelt, a former president of the United States, when he ran as leader of the bull moose party -he got what the bull got, a shot between the eyes, and then he went to Africa to shoot lions-that he wondered' when he crossed Shadow Lawn if he would not see the shadow of the Lusitania. He said, "Lusitania, Shadow Lawn, Woodrow Wilson enough for me." I often wonder whether there are not some people in Canada who are afraid that they may see the shadow of that great man, Sir Henry Thornton, who was so misunderstood and so maligned, yet so wonderful and so human.
A committee of parliament laid bare to the bone everything that he or his associates ever did. The right hon. leader of the opposition created the Duff commission to investigate the Canadian Pacific railway, but when the Prime Minister (Mr. Mackenzie King), sitting where my right hon. friend now sits, asked him whether this investigation would be made public, he replied that it would not. He was asked whether the report would be tabled and he said, "no." I do not want to misquote him, but he said that in his judgment it was not in the interests of the people and of Canada that the position of the Canadian Pacific railway should be known to the people of Canada.
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National Harbours Board-Mr. Finn


Richard Bedford Bennett: I think the hon. gentleman is incorrect. The report was published and laid on the table of the house. It is available in the library.


Robert Emmett Finn: I will stand corrected in that it was tabled, but I think I am correct when I say that my right hon. friend said that it was not in the interests of Canada that the evidence should become the property of the people of Canada to be scrutinized. If that was so with reference to the Canadian Pacific railway, Why was not the same principle applied with reference to the Canadian National which was built up of private systems constructed by m-en who were contractors to themselves. To use an expression once used by a right hon. gentleman who was prime minister for a short time, when told that he was only a gramaphone for Mackenzie and Mann-


Richard Bedford Bennett: The hon. gentleman is again incorrect. If he desires to read the evidence he will find it in the library of parliament. It was not printed for reasons that were stated.	.


Robert Emmett Finn: I do not desire to be unfair to the leader of the opposition as I have too much respect for him, but the fact remains that everybody has not the right to go into the library and read that report. It was never distributed' in pamphlet form, as other matters of a public nature are distributed, so that the people of Canada might be conversant with a great public issue and be able to come to a conclusion in that regard. I well remember the words of the leader of the opposition when he said, "Competition ever, amalgamation never." In 1935 he changed his tune, as did a gentle^ man who crept into the Senate. This gentleman used to play a tin whistle so he was called "tinny." The right hon. gentleman said that if he was sent back to power he would have a plebiscite to ascertain whether the people of Canada wanted these great railway systems knit into one.
I say to-night, with all the sincerity, with all the force, vim and energy that I possess, that any hon. gentleman who has a responsibility such as the Prime Minister has, who would ask the young woman of twenty-one years of age or the young lad of twenty-one to decide whether or not millions upon millions of dollars of valuable assets including the very future of this country should be determined by them, though they know nothing about it, would be like taking a child out of the ABC class and asking him to prove a problem in geometry on the blackboard in the twelfth grade of one of the common schools of the country. No, Mr. Speaker. We must all remember our respon-

sibility. I am sure the leader of the opposition does, as does every hon. gentleman in this house. Sometimes we all speak hurriedly, quickly, in the heat of passion caused by sudden provocation, but I am sure that the leader of the opposition, while he has had great provocation at times to speak quickly, though always, I think, in a gentlemanly way, sometimes says things which he would prefer- as I have done myself, and I am not equal to him in stature or ability, but open confession is good for the soul-


Walter Edward Foster: Order. I regret having to interrupt the hon. gentleman, but he has spoken for forty minutes.


Robert Emmett Finn: I thank you, Mr. Speaker. I am sorry the time flies, and my words too, but I hope they will stick.


Mr. THOMAS YIEN (Outremont):: The principle underlying this bill involves such a departure from the system that has obtained heretofore that it cannot but be of great concern to members who sit for cities and towns which have harbour commissions, and particularly to those who sit for the city of Montreal.
Canada was, born on the banks of the St. Lawrence river, and its commercial growth was speeded up by the judicious use of our system of navigation, our river, which is a commerce carrier. The St. Lawrence river is the main artery that links up Canada with the rest of the world and its various provinces together. From Montreal, which is the head of ocean navigation in eastern Canada, our railway systems have radiated to all sections of our country. It is therefore of great concern to members sitting as I do for the city of Montreal that a system which has obtained heretofore and under which the harbour of Montreal has developed tremendously, as have those of so many other cities, should be radically changed.
I regret also that the time which has elapsed between the first reading of this bill and its second reading was not extended a little so that we might more thoroughly digest the various provisions embodied in the bill, which are of such great importance. Reference has often been made to the Gibb report on which the bill is mainly based. I have a great deal of respect for Sir Alexander Gibb and I should not like to speak disparagingly of his report, which in my opinion is of great value. Yet I think I should point out a few contradictions in the report, or at least a few contradictions between the facts therein recited and the conclusions arrived at by Sir Alexander Gibb.

National Harbours Board-Mr. Vien
In the first place, I would say, with due respect to Sir Alexander Gibb, that I do not regard him as infallible. He may very well make mistakes, and before acting upon his recommendations it might perhaps have been better to ponder over them a little longer. Be that as it may, I think there are more provisions than one in this bill which should be very carefully scrutinized. I have listened with a great deal of attention to the remarks made by the hon. member for St. Lawrence-St. George (Mr. Cahan) and also by the leader of the opposition (Mr. Bennett). I very seldom agree with the leader of the opposition, but I must agree with him on some of the points he has raised, very forcibly I think, in the remarks which he has made on this subject.
In the first place, even a board created directly under the supervision of the minister of the Department of Railways or of the Department of Marine will not be infallible, and it may make numerous mistakes which may be just as great, if not greater, than those that have been pointed out in some instances of the administration of our Canadian harbours. I am inclined to believe that people who reside in a particular locality are better able to judge the requirements of that locality and properly to administer the properties of the harbour and to develop the facilities therein involved than are people, who would be rather bureaucratic, in one of the departments of the state.
In the second place I would point out that conditions which will prevail at Vancouver may be very different from those at Halifax or Saint John, and that the conditions and requirements of the St. Lawrence river and of the ports of Montreal, Three Rivers or Quebec may be very different from those of other sections of our country. I should be inclined to trust the good judgment of those residing in the locality, fully cognizant of its requirements and needs, rather than the judgment of certain gentlemen for whom I have a great deal of respect but who may not have the same knowledge of local problems and local requirements. I am in favour of modifying to some extent the system which has prevailed heretofore. It has been rightly said that some expenditures were not warranted; but it seems to me that this state of affairs could have been rectified without the necessity of going the full length of the provisions of this bill. It could be provided without much legislation, that all capital expenditures should be carefully scrutinized and submitted to the formalities of a vote in parliament or of an order in council. Legislation much more simple than this bill might
also provide for the proper auditing of the accounts and the operating expenditures of the harbours of Canada. This could very easily be introduced in our legislation, without all the clauses and dispositions of this bill.
I should like to point out that Sir Alexander Gibb in his report pays a high tribute to the harbour of Montreal in which I am directly interested. At page 15 of his report he says:
There is strong evidence that the commissions of Montreal and Vancouver played an important part in this progress. They provided a type of administration at least the equal of any that was to be found elsewhere on the North American continent; and notwithstanding mistakes, which no system can prevent, the developments under the two harbour commissions have generally been sound and economically justified.
That conclusion, based upon his investigation of the facts, would seem to militate for the continuance of a system which so far has proved to be efficient. And then he begins to consider what has been done elsewhere. There will be found, at pages 29 and 30, an analysis of the systems in other countries, and he points out at page .28 of his report how after coming to a centralization of administration of the ports, they have now reverted to a greater autonomy being given to various harbours; and I have a study of the various acts which have been of late put upon the statute books of the French Republic. On January 5, 1912, a law was enacted giving back to several harbours in France local autonomy, and this local autonomy or authority was further enlarged by the law of June 12, 1920. Under these laws local authorities get corporate entities and full autonomy with respect to the administration of the harbours.


Charles Hazlitt Cahan: What harbours were those? Could the hon. gentleman give us the names? Cherbourg? Le Havre?


Thomas Vien: Particularly Bordeaux and
Le Havre. But the law is not limited to those harbours at all, and local authorities can be constituted under the law for the management of harbours other than those that I have just mentioned. Therefore, if this system of centralization was tried in France and was found less efficient than the local autonomy, I would be a little diffident about introducing this system in Canada without more careful study and investigation.
Sir Alexander Gibb compares the harbour of Montreal with those of other countries. I find at page 71 of his report some very inter-

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National Harbours Board-Mr. Vien
esting comparisons. At paragraph 148 Sir Alexander Gibb speaks of the operating costs in the harbour of Montreal, and says this:
Operating costs judged by ordinary standards do not at first sight appear excessive, for a port that is open for barely two-thirds of the year. But in the first place maintenance and repairs are not being wholly carried by the operating costs as they should be, and secondly on looking more closely into the accounts, there are obvious opportunities for reduction of costs without impairing efficiency. For instance the salaries and expenses of the administrative staff and offices account for 20 per cent of the total operating expenditure, and this is excessive; again the harbour railway shows a loss which should be avoidable. In the table below I have divided the costs over the principal departments, each carrying its proportionate share of the administration.
But though he shows there some room for improvement, he continues, by giving a comparison of the tolls collected at Montreal and the rates under which they are collected with those of various ports in the world, and he says:
Montreal thus compares very favourably with the average secured by large ocean ports elsewhere, particularly if allowance be made for the short season. On the basis of the present cost of constructing a first-class berth with sheds and full equipment in Montreal harbour, and assuming the present scale of charges and costs, the traffic required to cover operating expenditure, interest and replacement, would be about 240,000 tons of general cargo and grain per berth per year. The average annual figure is now about 135,000 tons, but in the peak year it rose to 165,000 tons per berth. It would from this appear that an ocean berth at Montreal can only be made self-supporting by raising port charges

a method which cannot be advocated; or by improving the handling capacity and the turn around of vessels, on the importance of which I have already laid stress.
The figure for gross receipts per ton handled, namely 47 cents, appears moderate, and that this is so is borne out by the results of my investigations into the cost of the port of Montreal from the shipping and user's points of view, as compared with other Canadian and United States ports. I have set out in table XIX the average normal costs of a tramp loading bulk grain, and a liner handling general cargo in Montreal, assuming no exceptional delays.
According to my information, and from the careful inquiries that I have made, I am satisfied that these costs are not seriously challenged by competing ports, except where the latter may be partially assisted by special rail rates, (p. 73.)
Therefore, it seems to me that this report is not a severe criticism of the present state of affairs in Montreal. There is no condition revealed at 'that point that would absolutely justify a departure from the system now in existence. As I have just mentioned, it seems to me that it would be rather a step

backward to cause the local districts to lose their autonomy and to suggest that a board created under the present legislation and centralized in any department of the government should be more efficient in managing the affairs of all the harbours of Canada. The management of the affairs of a big harbour is a big work, and if it has been necessary hitherto to maintain commissions in Halifax, Saint John, Quebec, Montreal, to say nothing of Vancouver, Toronto and New Westminster, surely it would be rather hazardous to centralize in the hands of only three men sitting in Ottawa the management of all our harbours.
As I have said, I should like to see some amendment to the present legislation to make it abundantly clear that no capital expenditure will be permitted until it is first voted by parliament and then authorized by order in council, and that such expenditures, either capital or operating, should be properly audited and placed' under the jurisdiction of the auditor general of Canada.


Richard Bedford Bennett: They are now.


Thomas Vien: I agree with the right hon. gentleman, who mentioned this previously. To my mind that would be a constructive amendment to the present system, and there is nothing to prevent the minister charged with the administration of the various harbour commissions from having a closer control over them. It is with a great deal of misgiving, however, that I view this change from a system which Sir Alexander Gibb was obliged to admit had given admirable results hitherto, in order to try something which had been experimented with in other countries and which in at least some instances, such as the harbours of Le Havre and Bordeaux, had to be given up. In the United States there is no central control over the big harbours. It may be said, as Sir Alexander Gibb points out, that in some harbours such as New York and others there has been overdevelopment, ahead of the requirements of trade and commerce. It seems to me, however, that this system has been of great assistance in the development of our harbour facilities so essential to our trade and commerce.
If I might be permitted to do so, Mr. Speaker, I would ask that you now call it eleven o'clock, and I would move the adjournment of the debate.
Motion agreed to and debate adjourned.
On motion of Mr. Dunning the house adjourned at 10.58 p.m.

Friday, March 27, 1936