Right Hon. W. L. MACKENZIE KING (Prime Minister) moved:: That a message be sent to the Senate to acquaint their honours that this house has appointed the Hon. the Speaker and Messieurs Blackmore, Blair, Blanchette, Bouchard, Cameron (Hastings), Chevrier (Ottawa) Duffus, Emmerson, Hyndman, Johnston (Lake Centre), I.ennard, MacKinnon (Edmonton), MaeNeil, Macphail (Miss), Mallette, Parent (Terrebonne), Raymond, Reid, Rennie, Walsh and Winkler a committee to assist His Honour the Speaker in the direction of the library of parliament, so far as the interests of the House of Commons are concerned, and to act on behalf of the House of Commons as members of a joint commission of both houses on the library.


[Stage Direction]
Motion agreed to.

William Lyon Mackenzie King: That a message be sent to the Senate to acquaint their honours that this house has appointed Messieurs Baker. Bertrand (Prescott), Fafard. Howard, Howden, Landeryou, Maclnnis, MacMillan, Macphail (Miss), McLean (Simeoe), Mills, O'Neill, Purdy, Rheaume, Roberge, Sinclair, Spence, Taylor (Norfolk), Tustin and Veniot a committee to assist His Honour the Speaker in the direction of the restaurant, so far as the interests of the House of Commons are concerned, and to act as members of a joint committee of both houses on the restaurant.


[Stage Direction]
Motion agreed to.

William Lyon Mackenzie King: That a message be sent to the Senate to acquaint their honours that this house will unite with them in the formation of a joint committee of both houses on the subject of the printing of parliament, and that the members of the select standing committee on printing, viz., Messieurs Chevrier (Stormont), Damude. Denis. Dussault, Perron. Hansell, Hurtubise, Hushion, Lapointe (Matapedia), MacKinnon (Edmonton). MacLean (Prince), AlcGregor, Afclntosh, McKenzie (Lambton-Ivent). Mills, Mulock. Purdy, Ross (St. Paul's), Taylor (Nanaimo), Tustin. Areniot. Weir and AVilton will act as members on the part of this house on the said joint committee on the printing of parliament.


[Stage Direction]
Motion agreed to.


[Stage Direction]
Hon. NORMAN McL. ROGERS (Minister of Labour): With the consent of the house, I wish to make a brief statement on a matter of public importance. In doing so may I refer to a question put to me on February 17th by the hon. member for Winnipeg North, in which he asked what alternative the government had for relief camps. I assured my hon. friend at that time that the measures by which we proposed to close the camps during the present year would be announced in due course. The statement I now propose to give to the house is designed not only to answer that question but to implement the previously announced intention of the government to arrange for the closing of the relief camps at the earliest possible date.
It has been announced that relief camps as now organized and conducted will be discontinued during the present year. As an emergency measure these camps may have been justified, but as a permanent feature of social organization in Canada they cannot be supported on grounds either of social utility or of governmental economy. This does not imply criticism of the administration of these camps under the Department of National Defence. In their organization and administration the Department of National Defence performed a difficult task with commendable efficiency as a peace time service of national importance. To continue these relief camps, however, on their present basis, would be to institutionalize them and to encourage an attitude of hopelessness on the
Unemployment-Relief Camps
[Stage Direction]
part of those for whom they were designed to make provision in a period of economic extremity.
The intention to abolish relief camps has been confirmed by the findings and recommendations of the committee appointed to report ito the Minister of Labour on existing conditions in these camps.
The government recognizes that in closing these camps every effort must be made to provide employment for those now on the strength of the camps who are employable. Preliminary arrangements have already been made for setting up machinery which will absorb, from time to time, those on the strength of the camps into gainful and useful employment. It is anticipated that these arrangements will permit the closing of relief camps, as such, not later than July 1 of the present year. No new projects will be undertaken. The present strength of the camps will not be increased. There will be no new admissions.
In seeking ways and means to provide employment the government has recognized the desirability of affording, so far as may be possible, alternative employment suitable to the training and experience of those now in camps. As a result of negotiations with the Canadian National Railways and the Canadian Pacific Railway through the Minister of Railways and Canals (Mr. Howe), arrangements have been made whereby 10,000 men will be employed on deferred maintenance work on the trackage of these companies during the coming summer. This work will be in addition to the usual maintenance work of the railways. It will be undertaken on a cooperative basis, provision for which will be proposed in the emergency supplementary estimates. Men taken from the relief camps by the railroads will be in private employment and on a basis of work and wages. Relief camps will be closed progressively to permit of the transfer of camp strength to employment on the railways et cetera, as soon as weather conditions permit.
While the relief camps remain open, projects will be continued under the Department of National Defence, working in closer cooperation with and carrying out the policy of the Department of Labour. The decision to carry on under the present organization is a natural outcome of the policy of abolishing the relief camps. It would be costly and undesirable to build up a large organization, under the Department of Labour, which will of necessity be shortlived.
It is proposed to encourage a greater measure of cooperation between the provinces and the dominion in the working out of a more intensive application of the farm placement

scheme, a scheme which has to date been followed quite extensively by some of the western provinces with very satisfactory results. Forest conservation, easier access to mining areas and other development projects would be other outlets for employment, and it is anticipated that these opportunities I have suggested for employment will absorb the bulk of men in the camps who are fitted for this class of work.
It is expected that through the instrumentality of the proposed national employment commission, working in cooperation with business and industrial undertakings, additional avenues of employment will be found. A greater degree of cooperation will foe sought in the national interest between the government and those agencies which have the power and understanding to meet the problem.
It has been decided by the government that the present allowance of twenty cents per day shall be increased to S15 a month, as from March 1st. All other allowances, such as food, clothing, medical care, tobacco, et cetera, will remain the same as at present. This monthly allowance of S15 will be paid out as follows: $7.50 in cash, the other $7.50 being set aside until such time as the man leaves the camp, when he will receive nonnegotiable vouchers payable at the rate of $4 a week at any post office, for the total balance standing to his credit. This ensures that if a man leaves a camp of his own free will, he will at least have some means of support while he is seeking industrial reestablishment.
Returns are now 'being received from all camps which will indicate the age and occupational classification of the camps' population and will be used as a guide in planning for reemployment of those who are employable. The government feels that it has a special responsibility at this time, in first seeking to find employment for those men who are in the camps, if the plan to close the camps is to be carried out successfully. Once this has been done, continuous efforts will be put forth to secure employment for all those who are employable. The unemployables will have to continue to be, as at present, charges of the provincial and municipal governments.

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

Mr. KINLEY:: 1.	What amount was collected from the operators of otter or steam trawlers by virtue of order in council-P.C. 2196-dated October 31, 1929?

Questions
2.	Who paid the amounts and how much in each particular case?
3.	Was the said order in council declared invalid or ultra vires?
4.	Were any payments herein above referred to refunded? If so, to whom and how much?
5. What was the final disposition of the matter by the courts and the government?


Mr. HOWE:: 1.	$5,856.36.
2.	Leonard Fisheries, Limited.
3.	Yes.
4. Yes. To the Bank of Montreal, for Leonard Fisheries, Limited. The total amount.
5.	Answered by Nos. 3 and 4.


FARM LOANS-LABELLE COUNTY
Mr. LALONDE:: 1.	How many farmers of the county of Laibelle applied during the year 1935 for a loan under the provisions of the Canadian Farm Loan Act?
2.	In how many cases was the loan application granted and the loan made?
3.	What are the names and addresses of the persons who secured a loan in this manner?
4.	What was the amount of each such loan?
5.	In how many cases was the loan application refused?
6.	What was the total amount involved in the loan applications that were refused?


Mr. DUNNING:: 1,	2, 3, 4, 5 and 6. The following answers are furnished by the Canadian Farm Loan Board: Records of the Canadian Farm Loan Board are not kept by counties and the information asked for is not now available. Moreover, the transactions between the board and borrowers are regarded as confidential and it is not considered in the public interest that information revealing the names of persons who have obtained loans should be given.


PATROL BOAT ULNA
Mr. VENIOT:: 1.	When was the patrol boat Ulna leased by the preventive service, and under what terms?
2.	What reports, if any, were submitted as to the fitness of the Ulna for the preventive service and by whom submitted?
3.	Was the Ulna purchased for use of the preventive service? If so, when, from whom, and at what price?


Mr. LAPOINTE (Quebec East):: 1.	The Ulna was chartered under an agreement entered into on the 30th April, 1931,
by the Department of National Revenue. The charter became operative from the 4th June, 1931, and expired December 31, 1931. The fee was $6,000 per month, the owners to provide crew, all supplies and keep the vessel seaworthy; the department to supply master and wireless operator.
2.	Before charter. Reports were obtained from Lloyd's surveyors and Charles Stephen, Engineer Lieut.-Commander, R.N. (retd.), technical adviser, customs-excise preventive service, who is an associate member Engineering Institute of Canada, associate member Canadian Society Civil Engineers, member of the Corporation of Professional Engineers, Quebec, P.Q., and member of the American Society of Naval Architects and Marine Engineers.
Before purchase. Reports were obtained from the master who had been in charge of the boat during the charter period-Skipper Lieutenant J. P. Fraser; Engineer Lieut.-Commander Stephen, technical adviser, Royal Canadian Mounted Police, and Lloyd's surveyor.
3.	Yes. The Ulna was purchased in May, 1932, by the R.C.M. Police for preventive service work, from the Margaree Steamship Company Limited, of Sydney, N.S., for the sum of $55,000 completely equipped, with linen, bedding, cooking and kitchen utensils, crockery and everything in condition to proceed to sea with a crew of seventeen men.


LEAGUE OF NATIONS
Mr. STEVENS:: 
Mr. MACKENZIE KING:: 1.	55.
2.	58.
3.	21 fls of September 1, 1935.
4.	19,347,987.30 gold francs as of September 1, 1935, constituting approximately 5 per cent of the total assessments to 1935.
Questions

5.	Three nations; namely, Brazil, Germany and Japan may be said to have withdrawn because of disagreement with the decisions or methods of the league.
6.	Thirty-six nations may be said to have paid their annual dues regularly and in full. In addition Chile on July 31, 1935, liquidated arrears which had accumulated since 1930. Arrears due from four other nations were for one year or less.
Commissioners-
Charlesworth, Hector	
Chauveau, C. A	
Steel, Lt.-Col. W. A	
Maher, Thos	
Cartier, J. N	
Administration-
Cole, A. W. W	
Gagnon, Y	
Gibson, II	
Landry, R. P	
Mortimer, W. R	
Representative of the Treasury- Shaver, G. M	
Publicity-
Ball, II. M	
Buchanan, E. C	
Houle, L	
Wooding, F. H	
Engineering Department, Ottawa-
Bourke, A. A	
Cahoon, R. D	
Chevrier, H	
Elliott, R	
Finlay, C	
Gould, G. C	
MacKinnon, K. A	
McMurtie, J. G	
McKinstry, D. G	
Olive, G. W	
Smith, H. M	
Trousdiale, K. C. R	
Stations and Studios-
Canning, L. A	
Claringbull, D	
Demert, S. J	
Denoncourt, C	
Ducharme, L	
Fortin, V	
Hamilton, H. E. S	
Hilton, F. B. C	
Hudon, G	
Garrod, F. J	
Pickard, J. A


CANADIAN RADIO BROADCASTING COMMISSION
Mr. DESLAURIERS:: What amount was spent in travelling expenses by each commissioner and official of the Canadian Radio Broadcasting Commission during the calendar years 1933,	1934, and
1935?


Mr. HOWE:: The following information has been supplied by the Canadian Radio Broadcasting Commission:		Fiscal Year
Fiscal Year	Fiscal Year	1935-361933-34	1934-35	to Feb. 21./3($1,097 41	$ SCO 21	S 268 4988 702,022 84	856 96	593 823,817 80	509 73 256 32	5 6025 30	12 6522 10 726 48	599 01	564 5957 35	591 60363 25	1.032 56	96 7547 05	66 30824 SO	399 28	201 04152 71	243 82	127 7842 00122 40	759 19	793 22 318 3066 45	28 75	15 05 96 51237 85	916 47	46 30454 31	250 86272 84	258 85364 55	305 00	166 56275 70	857 97898 11	1,081 78	546 85739 87	2,385 58	1,258 7521 95	192 20	53 43 96 01 30 007 CO 267 75	60 70	m 3564 07	194 54	3 00175 49	185 6061 80115 10	31 50 34 92FEBRUARY 26, 1936	Questions	545Fiscal Year	Fiscal Year	Fiscal Year 1935-36Stations and Studios-Cone.	1933-34	1934-35	to Feb. 21/36Radford, J	85 95	352 50Reid, W. A	21 55	Richardson, W. G	131 39	Shane. W. A	
19 89	142 04	6 45Shearer, C	438 56	352 12Speer, C. W	7 20Walsh, T. C. R	75 10Wright, G. A	350 07	321 74Program Department- Aylen, P	40 50	Brown, H	185 80Bushnell, E. L	
872 33	1,769 23	1,689 33Charland, W. L	37 27Desbaillets, J	
10 50	65 65	Dupont, J. A	3,161 50	2,658 81Fischler, H. J	
Gagnier, J. J	
27 02	114 72	212 95Houde, A. H	132 22Jackson, E. W	19 69	83 75Jennings, C	122 25Maxted, S	
83 55	180 33	455 10Pelletier, H. R	217 00	280 43Powell, W. E	73 97	Seguin, A	100 40Stovin, H. N	
1,305 61	3,570 73	3,297 95Taggart, G. A	899 53	658 14Waddington, G	
68 90	106 43Weir, E. A	
Willis, J. F	
178 59	1,094 67	763 01


Mr. DESLAURIERS:: 1.	Who paid for the broadcasts of 1'Union Nationale Liberale through the facilities of the Canadian Radio Broadcasting Commission?
2.	Was any commission allowed to any person on these political broadcasts?
3.	If so, what was the amount of such commission?
4.	To whom was such commission paid?


Clarence Decatur Howe: The following information has been supplied by the Canadian Radio Broadcasting Commission-
1.	Ivanhoe Hogue, Vickers & Benson, Limited, H. A. Baribeau. Some local broadcasts were paid for in cash.
2.	Yes.
3.	$1,30321.
4.	Commissions were allowed to: Ivanhoe Hogue, $1,299.22; Vickers & Benson, Ltd., $3.99.


SUPREME COURT BUILDING
Mr. POULIOT:: 1.	Did the government make any inquiry respecting the sanitary conditions of the building where the judges of the supreme court hold their sittings?
2.	If so, on what date and' what were the results of such inquiry?


Mr. LAPOINTE (Quebec East):: 1.	Upon the request of the Registrar, Supreme Court of Canada, officials of the Department of National Health were instructed to make an inspection of this building.
2.	Said instructions were given on 27th November, 1935. A report of such inspection was made on or about 10th December, 1935, and was submitted to the Department of Public Works for consideration.


QUEBEC POSTAL DISTRICT SUPERINTENDENT
Mr. ROBERGE:: 1.	What is the name of the superintendent of the Quebec postal district?
2.	How long has he held such office?
3.	How old is he?


Mr. ELLIOTT (Middlesex):: 1.	Samuel Tanner Green.
2.	He entered the service on the 21st July, 1885, and has held his present position since the 21st October, 1921.
3.	Seventy-two years.

Questions

fishermen's loans


Mr. POTTIER:: 1.	How many fishermen have applied for a loan under the provisions of the Canadian Fishermen's Loan Act?
2.	What is the aggregate amount of loans applied for under the provisions of the said act?
3.	What was the aggregate amount of loans paid out to the fishermen under the provisions of the said act, up to and including October 14, 1935?


Charles Avery Dunning: The following answers are furnished by the Canadian Farm Loan Board:
1.	97.
2.	$62,385.
3.	Nil.


BANK OF CANADA
Mr. ELLIOTT (Kindersley):: How many shareholders owned shares in the Bank of Canada, October 22, 1934, and how many at the present time?


Charles Avery Dunning: On allotment, October, 1934, 12,147; at December 31, 1935, 11,021.


RENEWAL OF MAIL CONTRACTS
Mr. BOULANGER:: 1.	How many mail contracts, by provinces, expiring December 31, 1935, were renewed between the date of the dissolution of parliament and the date of the elections, namely, between August 15, 1935, and October 14, 1935?
2.	How many mail contracts, by provinces, expiring March 31, 1936, were renewed between the date of the dissolution of parliament and the date of the elections, namely, between August 15, 1935, and October 14, 1935?


Mr. ELLIOTT (Middlesex):: Prince Edward Island	 Nova Scotia		 New Brunswick	 Quebec			 9 	 18 	 32 	 97
Manitoba			 34
Saskatchewan			21
Alberta				21
British Columbia			 32
Yukon			 Nil
Prince Edward Island....		 6
Nova Scotia				 3
New Brunswick				 36
Quebec			 6
Ontario				 4
Manitoba				 2
Saskatchewan			Nil
Alberta			Nil
British Columbia			Nil
Yukon			Nil



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. DOUGLAS:: 1.	How many were in relief camps during the years (a) 1935; (b) 1934?
2.	What was the total cost of operating these camps during (a) 1935; (b) 1934?
3.	What did it cost per person, per month, to operate each camp during (a) 1935; (b) 1934?
4.	What is the average length of residence in these camps?


FUNDED DEBT
Mr. TAYLOR (Nanaimo):: 1.	What were the funded debt issues, inscribed amounts, of the national debt of Canada; together with yearly totals, as from and including the year 1908 to the latest figures available?
2.	What were the net sums received by the dominion government against the inscribed amounts of the funded debt issues as in question 1; together with yearly totals as from and including the year 1908 to the latest figures available?
3.	Where sold foreign, what loss or gain developed as a result of exchange on each of the issues above; (questions 1 and _ 2); together with yearly totals as from and including the year 1908 to the latest figures available?
4.	What were the unfunded debt transactions, obligation figures, together with yearly totals as from and including the year 1908 to the latest figures available.
5.	What were the net sums received in sale or other adjustment of the unfunded debt transactions; together with yearly totals as from and' including the year 1908 to the latest figures available?
6.	Where sold foreign, what loss or gain developed as a result of exchange on each of the issues above; (questions 4 and 5); together with yearly totals as from and including the year 1908 to the latest figures available?


Charles Avery Dunning: Order for return, subject to the remarks I made the other day.


FARM LOANS
Mr. LACROIX (Beauce):: 1.	How many farmers of the province of Quebec applied for a loan since the farm loan act became law, giving the number of such applications for each year separately?
2.	How many inspections were carried out for which the farm loan board received $10, in connection with each such inspection, giving the number for each year separately?
3.	In how many cases was the inspection carried out without the $10 being paid, giving the number for each year separately?
4.	In how many cases was the loan application granted and the loan made, giving the number for each year separately?
5.	What was the amount of the loan made in each case and in each year?

Banking-Mr. Coldwell
6.	In how many eases did the farm loan board require two inspections, giving the number for each year separately?
7.	In each case where a loan was made, on what date was the loan application presented and on what date was said loan granted and documents completed, giving the figures for each year separately?


Charles Avery Dunning: To answer questions 6 and 7 would involve the examination of thousands of accounts. I wondered if the hon. member would be satisfied if we passed this as an order for a return with a reservation with respect to questions 6 and 7 because of the tremendous amount of work they would involve.


DISMISSAL OP POSTMASTERS
Mr. BOULANGER:: 1.	Are there any Post Office Department regulations respecting the dismissal of postmasters?
2.	If so, since when have such regulations been in existence?
3.	Were such regulations approved by the governor in council, and if so, when?
4.	What section of the Post Office Act authorizes the Postmaster General to enact such regulations?
5.	Have such regulations always been followed literally since their enactment?
6.	Were such regulations amended when the Civil Service Act was amended in 1932 by the addition of section 57a, exempting from the application of the Civil Service Act "the position of postmaster of any revenue post office where the revenue does not exceed three thousand dollars per annum"?


ROYAL CANADIAN MOUNTED POLICE
Mr. REID:: 1.	What was the total number of officers or men taken on the force of the Royal Canadian Mounted Police during the calendar years 1932 to 1935?
2.	What was the number of men taken on from each province, respectively?
3.	What was the number of men taken on from each of the principal cities in Canada?



MOTIONS FOR PAPERS


Mr. PERRAS:: For a copy of all letters, correspondence and other documents respecting the appointment of Miss L. O. Dessurault to the post office at the village of Bouchette and the renewal of the said appointment on October 15, 1935, for a period of four years.



DISMISSAL OF POSTMASTERS

Mr. BOULANGER:: For a copy of all Post Office Department regulations respecting dismissals of postmasters and a copy of all ordeTs in council, if any, approving such regulations.



BANKS AND BANKING


Mr. M. J. COLDWELL (Rosetown-Biggar) moved:: That, in the opinion of this house, the government should consider the advisability of national ownership and control of the central Bank of Canada and the chartered banks.
He said: Mr. Speaker, the resolution which I have the honour to move has been presented for the consideration of the house in order that the members may have an opportunity of discussing this problem which to some degree has been uppermost in the minds of the people of Canada for a very long time. In view, too, of the varied opinions that are held throughout the country it seemed well that at the beginning of the session ideas referring to our financial and banking system should be presented for consideration. I have in mind the reference contained in the speech from the throne, which reads as follows:
The control of credit, and the issue of currency, being public matters of direct concern to every citizen, it is intended, at the-present session, to ask parliament to make such changes in the ownership and control of the Bank of Canada, as may be necessary to [DOT] give to the government a predominant interest in the ownership as well as effective control of. the bank
Reading that, Mr. Speaker, it seemed to me that it was somewhat vague in character, and it appeared to indicate a certain degree of uncertainty even on the part of the government as to the exact policy that should be pursued. I remember, also the statement by the present Prime Minister (Mr. Mackenzie King) made in the house on April 26, 1932, when a somewhat similar proposal was made. At that time he said that he did not think serious consideration could be given to such a proposal. However, almost four years have elapsed during which period conditions in the world and, in particular, in Canada have changed considerably and perchance the opinion then held by the leader of the government (Mr. Mackenzie King) has been changed because of the changed conditions with which we are surrounded. I remember, too, the attitude of hon. gentlemen opposite in connection with the central bank bill of 1934. On that occasion members of our group supported the-bill because they believed it was a step forward in the direction in which they wished to go. It should be borne in mind also that a motion almost similar to this was moved by Mr. William Irvine in the house on February 4,
Banking-Mr. Caldwell

1935. At that time very little support was forthcoming from the house generally or from hon. gentlemen opposite. I recollect that only one Liberal member, the hon. member for Mackenzie (Mr. MacMillan) voted in favour of that particular resolution. I am not unmindful of the fact that in the recent election campaign a leaflet was issued in the interests of the Liberal party. That leaflet was more suggestive of action along this line, and I should like to quote from it as follows:
The Liberal party believes that credit is a ublic matter, not of interest to bankers only, ut of direct concern to the average citizen. It stands for the immediate establishment of a properly constituted national central bank, to perform the functions of rediscount, and the control of currency issue, considered in terms of public need. A central bank is necessary to determine the supply of currency in relation to the domestic, social and industrial requirements of the Canadian people; and also to deal with problems of international commerce and exchange.
I realize the importance of that election statement, and particularly the statement that credit is a public matter. I am under no delusion that that means social credit or has anything to do with that particular proposal, because we know there is a distinct difference. Hon. gentlemen to my right are on record as being in favour of a privately owned central bank and we know precisely where they stand. Hon. gentlemen to my left are in a somewhat similar position. I remember reading a pronouncement to that effect by the leader of the social credit group in Alberta when he assured various financial interests that it was not the intention of his government to interfere with the private ownership of anything. I should like to read to the house two questions contained in a manual issued last summer by the leader of that group. There is a section devoted to questions and answers in which he replies to an imaginary questioner as follows:
It is not the intention of social credit to confiscate or take away anything from those who already have it.
In reply to a subsequent question, "Does social credit involve socialization, nationalization, confiscation or expropriation?" Mr. Aber-hart replied as follows:
No. Social credit stands for controlled individual ownership. It holds to the decentralization of power and supports the rewarding of individual effort to the full possible enjoyment of the good things of life.
We have no criticism to make of the latter part of that particular answer. The answer to the question propounded is a direct negative; neither by purchase, nor by expropriation with compensation, as we believe is desirable and
{Mr. Cold well.]
feasible, nor by outright confiscation, as some urge, will anything be nationalized. Therefore my appeal for support of this resolution must be addressed primarily to hon. gentlemen who occupy Liberal seats in the present House of Commons, but I shall welcome support from hon. gentlemen who sit to my left and to my right if, after further consideration, they believe the time has come when something of this nature should be undertaken. Public attention is focused and has been focused upon that strange paradox of which we have heard several times already during the course of debates in this house. I refer to the paradox of poverty and want in the midst of actual and potential plenty. People ask why this should be so. Thev nut their hands into their pockets and find they have no money. Consequently they believe it is a shortage of money and purchasing power that is really at the root of the problem which we face to-day. Therefore they constantly demand more money and an increase in their purchasing power. Political parties have risen which have promised definitely to put money and purchasing power in certain forms into the hands of the people.
For a few moments I should like to discuss what money really is in order that we may get a picture of what actually needs to be done. The use of money came into existence centuries ago when men found it highly inconvenient to make exchanges of actual things with one another. A man found it very difficult to exchange a horse for a sword or a cow for a leather jacket, and consequently there came into existence certain tokens of exchange. We know this from our own Canadian history in connection with the trading between the Hudson's Bay Company factors and the Indians. At first many of these tokens had no intrinsic value, but as civilization advanced and became more stable we find that particular tokens which in themselves had an intrinsic value were utilized as money. These tokens took the form of precious stones, gold, silver, spices and so on. Not only did they become tokens of exchange, but, as time went on, they became measures of other commodities in terms of themselves. Thus in the process of human evolution money took on a distinctly new form and shape. The ancient law givers realized the danger of allowing the control of those things which were then used as the media of exchange to become concentrated into a few hands and become monopolistic in their nature. If we look to the oldest law we have in the English language, a law which was translated into our language from a more ancient tongue, we shall find that this is so. I

Banking-Mr. Coldwell
refer of course to the laws to be found in the Bible. Turning to the twenty-fifth chapter of the book of Leviticus one will find there that the primitive but wise lawgiver, Moses, said to the children of Israel: Lend not your money unto usury; take no increase of the other fellow. And, moreover, in another part of Holy Writ it will be found that they were obliged to cancel certain debts from time to time, some at the end of seven years and some at the end of fifty years.
To-day we are inclined to smile at those ancient laws, but they were written because those who at that time were charged with the responsibility of mapping out the future for semi-primitive peoples realized that if the power of money once fell under the control of a few people then indeed society would suffer from that particular kind of monopoly.


Mr. REID:: Is it not a fact that the
same Moses told the people that when they borrowed a measure of corn they should pay it back brimming over?


Major James William Coldwell: That is quite true; but let me point out that that suggestion had a significance which was somewhat different from the one which at this time I am discussing. I am discussing the possibility of the medium of exchange-not the lending by one producer to another of something which he needed temporarily-in itself becoming a continuous loan yielding interest; hence the command to cancel debts at the end of given periods of time. And if we turn to British history, from which we derive so much, we find that the first Edwards, one after the other, endeavoured to prevent the accumulation of wealth into a few hands and the lending of it at interest. They decreed that those who transgressed that law should be imprisoned, outlawed and even executed. Going back too to the history of the pronouncements of ancient teachers of the old church, we find also that throughout the early ages the saints of the church stood firmly opposed to the institution of usury in the midst of society; and that too, I may add. was afterwards the attitude of Martin Luther, the great German reformer.
In spite of all this, money became a commodity, and as the years went by, like any other commodity, it became subject to the law of supply and demand. In recent times, because of the rise of monopolistic industry and finance, we have seen the law of supply and demand break down. There are those who would like to go back to the more primitive way of doing things; but once we set our feet on the road it is difficult to turn back, and consequently we must
bear in mind the fact that monopolistic industry and monopolistic finance have given to those who control money and the institutions which exchange and lend a greater power than was known to any of the ancient kings in olden days.
As I said a short time ago, money is a measure, and for a long time it was a fairly stable measure; but recently instability has been a mark of our financial system. Expressed in terms of other commodities for which it is exchanged, it has become a measure such as we would not tolerate under any other circumstances. We could not do business, for example, if at one time the yard measure were 18 inches, at another time 24 inches, at another time 36 inches, and at still another time 72 inches; yet we have seen the measure of our trading relations-one with another fluctuate to as wide a degree as that in recent times. I well remember that in the province from which I come- thinking for a moment in terms of wheat- when wheat was $2 a bushel the farmer who borrowed $10,000 knew that that was equal to 5,000 bushels of wheat. But when, ten or fifteen years later, he came to repay the loan, he found that he had to repay not
5,000	bushels of wheat, which the $10,009 originally represented, but at a price of 25 cents a bushel, 40.000 bushels of wheat. We see the same situation in connection with eggs, butter, tobacco, tomatoes and various other commodities, the terms of which are understood in other parts of the dominion. Thus debts contracted at one level become an intolerable burden at another level.
We would not for one moment tolerate in our homes an unreliable electric meter to measure the power we use there; and yet in our economic structure we have been tolerating for a long time a measure of goods and of services which has fluctuated very seriously. Conversely, if loans made when money is cheap have to be paid back on another basis, then that is equally unjust both to those who lend and to those who repay. We have therefore to consider this problem of banking, finance and money in exact relationship to the property system within which it operates, and the proceeds of which it seeks to measure. Its stability is thus of primary importance in every phase of our economic life. The problem of purchasing power cannot, in my opinion, be considered apart from the general economic structure. In discussing this problem to-day I remember that monopolistic industry can defeat even the very best measures of government designed to control monopolistic finance.
Banking-Mr. Coldwell

When I speak of money I am using the term in a varied sense. In civilized society there are many kinds of money-first the nickel, copper, silver and paper money which we carry around in our pockets and with which we are all familiar. But that after all is little more than the small change of the present financial system. The authorities tell us that approximately ninety per cent of the payments made within civilized society are made by means of cheques and not wholly, but largely, from credits established within the banking institutions. The banks therefore have a tremendous power in that regard.
People sometimes ask: What do you mean by credit? May I say, before I explain what I mean by credit, that I am not one of those who believe that when a credit is created there is nothing behind it but the fountain pen which enters into the ledger the amount of money for which that credit stands. During my experience in another capacity I well remember how on more than one occasion I had to participate in the borrowing of money for an organization with which I was connected. How was that loan made? A bylaw was passed authorizing the mayor and the city treasurer to make a loan with one of our banking institutions. The bylaw being in order, the mayor and the city treasurer went to the banking institution, deposited a copy of the bylaw, signed a note promising to pay back, let us say in thirty or sixty days with interest at seven per cent, the sum of fifty or one hundred thousand dollars. If that bank did no more business that day than make that one particular loan its statement at the close of that particular day would show that, because of the making of that loan, the institution had fifty or one hundred thousand dollars, as the case may be, more on deposit than when its doors opened for business in the morning. Not one dollar would have been taken from any customer's account or from elsewhere. Of course there are those who say that that has been created out of thin air. No; the bank within the banking and financial system set up a contingent liability against that particular form of loan, and some time, somehow, the loan will have to be retired with something tangible. When loans are made freely, they raise the general level of prices, and if carried to an unusual degree may result in an inflationary movement within the society where such credits are established. This does not mean that the credit does not represent anything tangible. It does. It represents goods and services that already are available or will be available to the people and the society within which

the loan is made. For the contingent liability will ultimately be reconciled, in the case of the example that I gave a few moments ago, by the levy of taxes, or in the business world, by collecting the amount with which to retire it through the price level. And since bankers are human-and this is a point that I wish to emphasize because it has a very important bearing upon the resolution-since bankers are only human they make loans when they appear to be both safe and profitable. Consequently, when business is on the upswing they tend to make more loans, and by and by they actually encourage the boom that ultimately develops. I saw rather an interesting item in to-day's paper on that particular point. It is a report in the Montreal Gazette of a statement made yesterday by Governor Towers before the shareholders of the Bank of Canada. He said this in part:
While a policy of cheap and abundant money was the orthodox contribution of a banking system toward recovery-
Toward the upward rise of business:
-such a policy, if pursued too far, might bring about an unmanageable situation when revival developed.
And that is one of the principal contentions that I would make in support of the present resolution. If we are going to control the upward swing of business so that speculation does not become rife and a boom develop which when bursting will have serious effects, we must exercise a larger measure of control than we now do over our banking and financial institutions generally, and the central bank in particular.
Then we find this, that as shelves become full manufacturing slows up; as manufacturing slows up, unemployment develops; the demand for capital goods also grows less; we have less purchasing power in the hands of the people, and consequently we face immediately a depression within what is sometimes called the business cycle. We suggest that the reverse should be the procedure, that when a boom is developing the central bank and financial policy should tend to prevent that boom, and when on the other hand there is a recession from the peak setting in, our financial policy Should be to prevent the development of depression. We must bear in mind also that when the depression develops the bankers advise us, the governing bodies, to balance our budgets and to further restrict purchasing power, because the banker believes that he must get into a liquid position. He calls in his loans; he refuses to make more, and so on. And governments attempt, as I said a moment ago, to balance

Banking-Mr. Coldwell
their budgets. This is sometimes called sound business principles, and so they are sound business principles in relation to the making of private profit, because the banker protects himself, it is true at the expense of society sometimes; nevertheless in a society which is wholly or even largely competitive it is a case of every man for himself.
Of course we used to be told that there was a direct relationship between the matters I have been discussing and the gold basis. That is no longer substantially correct. We have been told-and we have been following that advice quite recently-that what we had to inculcate in order to make our money secure was a measure of confidence. Some wag said over the air a short time ago-I happened to hear him-that confidence was the ability to forget what happened last time and the courage to ignore what will happen next time. There is a great deal in that little quip. Bank policy, therefore, is in strict conformity with the general economic development in the times in which we live. If business is to receive the necessary assistance when it needs it the control of our financial institutions will have to be divorced from the selfish interests of those who control the banking and financial system. I do not use the word "selfish" in any wrong sense. I mean the looking after of the self-interest of the individual or institution concerned. We have seen how in times of boom money becomes easy to obtain, how in times of depression it becomes scarce. This reminds me that if we had a janitor looking after a block who turned on the heat in the summer time and the cooling system in the winter we should be inclined to change the janitor. That, to some extent, is an illustration of what has been going on in the financial world.
What we require is neither inflation nor deflation. I sometimes think many of the gentlemen who defend the present system and its operations are in reality, without realizing it, deflationists, and to my mind deflation and inflation are both evils. We must aim at equilibrium in our economic relationships and throughout our business institutions, but private institutions can scarcely be expected to act, sometimes against evident self interest, quite unselfishly in relation to monetary and financial policy. Quite recently, in the United States and elsewhere, we have heard the word "reflation" used to describe the bringing back to a reasonable level of prices, business and so on, but whether we call it "reflation" or "equilibrium" we must achieve the latter objective as soon as we can or society will perish.
The other afternoon I discussed what had taken place in Sweden, and again I should like to direct the attention of the house to the banking experiments that have been carried on in that country during the past several years. It has been said and undoubtedly will be said again that changes in the fiancial situation in Canada cannot be brought about because of our relationship to the great world all around us, but in the kingdom of Sweden in 1931, when they were driven off the gold standard, an attempt was made to do that very thing. Economists whose advice was sought by the government for the bankers were told that no matter what happened to the value of the kronen outside Sweden, an attempt should be made to stabilize the level of the unit of exchange within the country. They did that to a very remarkable degree, tying up their internal price level, their internal monetary unit, to actual goods, services and commodities and allowing the unit outside the country to swing into line and remain in line with foreign currency. So externally Sweden became a member of what is known as the sterling group, trading with Great Britain and measuring the value of her external unit in terms of British pounds, but internally Sweden has been able to maintain a price level which, as I said the other evening, has fluctuated only 1-9 per cent since 1931.
As potential production increases the purchasing power of the people ought to rise, and the real problem we have to consider not only in Canada but, in fact, in every country throughout the world is how to distribute more goods and services as they become available through the introduction of machinery and the increased productivity of human labour. The statement has been made so frequently in the house that I hesitate to repeat it, but to-day our trouble is one not of scarcity but of actual plenty in some respects, and of potential plenty in others. Consequently it will be the business of this parliament and the parliaments of all other countries in which there are democratic institutions to seek ways and means of bringing into line our consumptive capacity and our productive possibilities, and the nearer we can approach that point the nearer we shall be to a solution of the economic and social difficulties with which we are surrounded. Those who suggest that, unrelated to goods or to uncontrolled goods and services, vast quantities of non-recoverable purchasing power should be placed into the hands of the people, might make confusion worse confounded, because after all money is a title to something and unless you can deliver
Banking-Mr. Coldwell

the goods or guarantee their delivery you have no right to issue a title to goods which you do not control.
I have heard it said that we should consider Canada as a great corporation in which every citizen has a share and from which every citizen ought to draw a dividend. That is a splendid idea, but I have heard the same people go on to say that we are going to leave the banks and financial institutions, the oil fields and the other great monopolistic industries and institutions in the hands of those who now own and control them. In other words they say we are going to consider Canada as a great corporation from which every citizen ought to draw a dividend, but it will be a corporation without assets, and a corporation without assets cannot conceivably pay dividends.
My time is almost up, Mr. Speaker, but I want to urge the house to discuss this resolution on a high plane. Irrespective of our party affiliations let us, if we can, endeavour to meet the situation which has been created in the last few years and which will continue to be with us unless we take definite and intelligent steps to meet these problems in the near future. People are not going to remain content with the present condition for long.


Mr. DEPUTY SPEAKER:: The hon. gentleman has spoken for forty minutes.


Major James William Coldwell: I thank you, Mr. Speaker.


Mr. W. A. TUCKER (Rosthern):: Mr. Speaker, when I came into the house this afternoon I did not expect to find this motion on the order paper; it has been so changed that, by the rules of the house, I thought it would be moved to the bottom of the order paper instead of being left in its present position. However, I feel it my duty to define my own position in regard to this matter.
If this resolution read, "That, in the opinion of this house, the government should consider the advisability of national ownership and control of the Bank of Canada," and stopped there, I would vote in favour of it. In view of the fact that some measure along these lines is foreshadowed in the speech from the throne I have no intention of moving any amendment to the resolution offered by the hon. member for Rosetown-Biggar (Mr. Cold-well), because undoubtedly the government has that matter under consideration, and as a private Liberal member I do not wish to anticipate the action or intention of the government in that regard. So far as I am personally concerned, however, I am one hun-
IMr Coldwell.]
dred per cent in favour of a one hundred per cent ownership and control of the Bank of Canada by the Canadian people, through our government.
To some extent the suggestion was made that the remarks I addressed to the house a few days ago indicated that I was favourable to some scheme of inflation. If we controlled our central bank we could issue currency and control credit in terms of the interests of the people, and not in terms of private bankers' profits. From time to time the bankers regulate their business by largely extending credit when there is a business boom at one time, and curtailing it when there is depression at another. In other words the Canadian Macmillan report found there were times when the bank should be extending credit but that at such times it would not be in its own financial interests to do so. The report indicated that private banks could not be expected to take steps which would not be in their own interests. On the other hand at times when there may be a tendency to deflate, a government bank might and should throw its influence and its power towards arresting a deflation movement, whereas a private bank could not be expected to do so, because such action would not be in its own interests. Therefore if a central bank is to discharge its proper duties, namely more or less to control the price level and to prevent extreme depressions and extreme booms, the only way it can be expected to do so is to have it under government ownership and control.
The other day I endeavoured to point out over ninety per cent of the purchasing power of the country operates through the medium of cheques on bank accounts. That is the principal medium of exchange. By virtue of their control over those deposits the banks actually have within their control what used to be regarded as something within the sole province of the government, namely the right to create or destroy currency, or purchasing power. That is, in the earlier days before we had a banking system such as we have to-day the government decided the amount of currency it should issue. To-day, owing to the development of our banking system, by making loans or by buying government bonds the bank creates deposits which, in turn, are chequed from bank to bank, back and forth, thus in effect creating purchasing power at will. We will suppose that a government bond worth $1,000,000 is bought by a bank. That money is either deposited in the bank which purchased the bond or it is chequed out for some purpose to other people who redeposit it in other

Banking-Mr. Tucker
banks. Whether it actually goes into the bank which made the loan or into other banks, it increases their amount on deposit, and they in turn figure that they may make loans on the basis of those increased deposits. Therefore every time a loan is made or a bond is purchased there is an increase in the cash reserves of the bank or banks of the country, and at the same time an increase in the assets of the banks, viz the bond purchased or the loan owing.
Under our present system there is no limit to the extent to which the banks may increase their loans or may purchase bonds, with the exception of the limitation as to what the banks consider governments or individuals can repay. If governments or individuals borrow more than they can repay, the value of their credit goes down accordingly. I believe every hon. member understands that. If any hon. member thinks I could possibly repay $100- and perhaps he might be optimistic if he thought that-and I promised to repay $200, he would say, "Well, your note for $200 is really worth only $100." That is what I believe is meant by inflation. That is, the credit which a government or individual can put out at any time is limited by the amount the government or individual can hope to repay within a given time.
The point which it seems to me has not received sufficient consideration is this: Under our present system a government may go to a bank for money or credit. They actually issue credit against the bonds of the government. There is no limit to that, except the amount that they think the government can repay. In other words, if the banks believed that the dominion government could actually carry a debt of six billion, ten billion or fifteen billion dollars, there is nothing in the world to prevent them from lending the government any of those sums. They have the machinery to do it. It would not depend upon the savings in the bank; it does not depend upon gold, but depends entirely upon whether they believe the people of Canada can repay that money. If that is so; if the banks of Canada, with the machinery at their disposal, can create credit or can actually lend credit against the bonds of the government to any extent they believe to be safe, and to the extent they believe the government can repay, I put this to hon. members: If it is all right for private banks to create and lend credit to governments against government bonds, what is wrong with a central bank, owned and controlled by the government, actually extending the credit, instead of leaving that operation in the hands of a private
institution? Thereby we would save that tremendous drain of interest which to-day is ruining society. I pointed to figures a few days ago which indicated that the public institutions of Canada between the years 1919 and 1932 had actually gone into debt at the rate of $1,000,000 every day. I showed that the debt had been increasing at that rate. I believe most people would say that because it had been done through ordinary banking institutions it was not inflation. The point I put is this: If we were to take over the ownership and control of our central bank, and instead of increasing our debt by $1,000,000 every day we were actually to issue credit of $1,000,000 each day, through the central bank, and use it to retire the public debt, would we have a state of inflation? In other words,-


Mr. BENNETT:: That's the stuff.


Charles Avery Dunning: At last we have found it.


Walter Adam Tucker: In other words, if the Bank of Montreal or any other bank can issue that credit against the bonds of this country, why could not the Bank of Canada issue credit against those bonds, and issue it on a noninterest bearing basis? I have considered the matter for many months, and I cannot see why an institution which happens to be owned and controlled by a government could not do the same as a private institution. If it is all right for private institutions to increase the debt of Canada by $1,000,000 every day, I ask hon. members if it would be inflation were the public bank actually to lend $1,000,000 worth of credit every day on a non-interest bearing basis to retire the debt to private interests, which bears interest. That is not increasing in any shape or form the dead weight debt of the country. I suggest it might be done at the rate of 81,000,000 every day, the same rate as we have been going into debt in the past; if it were done at that rate inside of a little more than twenty-four years the public institutions of Canada, dominion, provincial, municipal and public corporations, would actually owe the same principal debt, but it would be on a non-interest bearing basis. Figuring the interest on the debt at about four and one-half per cent, it would mean that at that time we would be saving over $370,000,000 per year in interest, an amount that we are paying to-day.
In my judgment that is the flaw in our present system. I still contend that the banks do create and lend credit against bonds and loans. If you have the public institution creating that credit, and you put it on a noninterest bearing basis, you relieve yourself
Banking-Mr. Tucker

Of the payment of that interest. But to-day you have this situation that private institutions created by the government are creating credit. The banks lend it to governments, and then the governments endeavour to meet the interest which they have to pay on that credit by collecting taxes from the people. That is what is happening. The people are in effect paying money for nothing. It is taken from the masses of the people and concentrated in the hands of a few financial institutions. It simply means that you are draining from the masses of the people over a million dollars every day of the year for the payment of interest; you are piling it up in the hands of the big financial institutions, and the result is that just that much actual purchasing power is being drained from the country. It is not surprising, therefore, that we have the unemployment we see today. But if we could save that million dollars a day, once we got our debt on the basis I have suggested, and it is worthy of consideration, we would be able to look after our unemployed and our old people and many other things that are necessary to restore economic security to our people.
That, in short, Mr. Speaker, is the view I think of at least fifty per cent of the Liberal voters in this country. They believe that it should be given a trial. I mentioned the other day that the present leader of the opposition (Mr. Bennett), as Prime Minister, used the public credit of this country to the extent of $35,000,000, and that public credit is only costing us one per cent to-day. There were no dire results from his use of that public credit to the extent of $35,000,000, and I suggest that we should continue to develop that system of using our public credit, doing it through our own publicly owned and controlled central bank. If some hon. members think it would be better for the publicly owned and controlled central bank to charge a small rate of interest, the profits to go back to the people, there would be nothing wrong in that.
I would point out that governments to-day are taking practically all the credit that banks see fit to extend, and the result is that private individuals and corporations seeking credit cannot get it, because banks are able to make all the profit they want out of lending credit to public institutions. What chance has anybody who wishes to engage in business to borrow money at a reasonable rate of interest when the banks can lend to governments at five and six per cent? But if the governments did their own business of that nature through their own publicly owned and controlled central bank, private individuals and corporations would be able to get credit from the banks and financial institutions, which would be

ready to lend, as they claim they do to-day, the private savings of the people at interest, and interest would be on a lower basis because public institutions would not then be competing with private institutions for credit or loans.
I noticed a moment ago, when I suggested this idea which I am venturing to put before this house, a certain tendency to regard it as somewhat fantastic. But let me point out to hon. gentlemen that according to the last Canada Year Book fifty-four per cent of the entire taxation of this dominion to-day goes towards the payment of interest on the dominion debt and forty-four pur cent of the entire income of the federal government goes towards the payment of interest on the debt. The Minister of Finance (Mr. Dunning) can sit up night and day trying to effect economies in his estimates, but that is only nibbling around the edge of this great problem that confronts us when a large bulk of the taxation that is wrung out of the people has to go towards the payment of interest on our debt. When I hear people talk about economy, saving a few thousand dollars here and a few thousand there, and then see the government having to bring down supplementary estimates by which in the end they have to spend the amount saved by these economies, I say, Mr. Speaker, that such cutting down of the estimates by a few thousand dollars here or there is not dealing at all effectively with the thing that is gnawing at the very vitals of this nation to-day and preventing us from doing the things we should do for our unemployed, for our farmers, for our sick, and our aged. The place where we are spending our money to-day is in the payment of interest on our debts; for as I said before, fifty per cent of the entire taxation of the dominion goes towards the payment of interest on the public debt. I suggest that in these days, when people are studying how to save a little bit out of the taxes that are being raised, the place to which they should direct their attention is the place where fifty-four per cent of our entire taxation is going and if there is any scheme that will save fifty-four per cent of the taxation of this dominion being paid over into the hands of financial institutions, I submit that it should receive very careful study and consideration.
I submit further that great economists and able financiers all over the world have come to the conclusion that we must get away from the error that brought down the Roman empire. After all, the Roman empire was in somewhat the same position that we are in to-day. There was a tremendous amount of unemployment. The people had flocked to

Bankmg-Mr. Young
the city of Rome the centre of the Roman empire and congregated in it and the large cities; the cry arose for more bread and more circuses, and the only way the government could see by which to meet the problem of these people who were crying for bread and entertainment was the imposition of more and more taxation upon the people. The result was that the time came when the people of the Roman empire figured that the benefits of belonging to Imperial Rome were not as great as its burdens, and then when the barbarians descended upon the Roman empire it fell. Our situation is somewhat the same, but there ia this difference: with the development of our present banking institutions we do not need to tie ourselves down to gold or metal money. We do not need to tie ourselves down to any metallic substance. We can assume control of our Central Bank and through it issue and control currency and credit in terms of the needs of the people and not have to base it upon gold, silver or anything else of that nature. Looking at the economic situation we see that to do the business of this country requires so much purchasing power. We can issue that purchasing power through having control of the central bank and through our banking system. I suggest to you that the banking system of this country should be changed in accordance with the development which has taken place within the last forty and certainly within the last fifty years. There are older hon. members who can remember that forty or fifty years ago nearly all the business in the province of Ontario was done with money; especially in the country districts the idea of doing business by cheques was practically unknown. It is more important that something substantial of this nature should be done to meet our present situation than to try to save a few thousand dollars here or try to cut down expenses by a few thousand dollars there, which economies may tend to aggravate the present unemployment situation.
I appeal to my fellow Liberals to give sympathetic consideration to the suggestion that we take over the ownership of our central bank and make the use of it I have indicated. I know some people say that the idea of government borrowing from it is not feasible, but all I can say is that we will not ruin the country by trying it out. If it works, we can extend it further; if it does not work, we can drop it. We have made much more expensive experiments in the past. I contend we should have control of our central bank. We could then cautiously and carefully make use of its powers to create credit against the bonds of the country. We could cautiously retire our present debt now in private hands. If the idea works, we can extend it. If that is done I submit that inside of a very few years there will be no one worrying about socialism. If this idea is put into effect every man will have economic security and the liberty and freedom to which he is entitled under our British parliamentary institutions. Once more a necessary step will have been taken by organized humanity to march forward to higher levels of human achievement.
The resolution now before the house suggests that we should take over the private banking institutions and endeavour to run them. I do not believe that at the present time we are prepared to take any such step. If the latter part of the motion were deleted and it referred only to the national ownership and control of the central bank of Canada, I would be prepared to vote for the resolution.
Mr. A. MacG. YOUNG (Saskatoon): Mr. Speaker, the resolution now before the house is of great importance, and while it is not my intention to wander through the mazes of the theories of money and credit I want to make my position clear should this resolution come to a vote. I shall not take up more than two or three minutes of the time of the house.
The Liberal party is quite clearly on record as being opposed to the present set up of the central bank of Canada, and I agree entirely with that attitude. I think I can say, with equal accuracy, that the position of the Liberal party is well known as being in favour of a nationally owned and controlled bank. I see before me my genial friend, the Minister of National Defence (Mr. Mackenzie), and I am quite sure he will not disagree with that statement. During the campaign my right hon. leader (Mr. Mackenzie King) spoke in the city which I have the honour to represent. When he made the pronouncement that we would establish a nationally owned and nationally controlled bank he received a tremendous outburst of applause, the greatest outburst of the continued applause he received during his whole speech. If this resolution stopped where the hon. member for Rosthern (Mr. Tucker) suggests it should stop, I would be prepared to support it wholeheartedly. The time may come when it may be deemed advisable to take over even the privately owned banks. That time, however, is not the present, but I am prepared to support that part of the resolution which concerns the national ownership and control of the central bank of Canada.
556	COMMONS
Banking-Mr. Taylor (Nanaimo)


Mr. J. S. TAYLOR (Nanaimo):: Mr. Speaker, I am in favour of this resolution because I believe it is high time we should apply ourselves to a scientific study of the economic conditions under which we are living. Banking to-day is not conducted scientifically, but there are many features about the art of banking which could be scientifically understood. Banking has reached its present status entirely by an empirical process. The bankers themselves did not realize what they were stumbling upon when they undertook to take care of the money of the merchants. If we go back into the ages when tokens were exchanged we can realize how it became necessary that there should be some small medium of exchange having in itself an intrinsic value to take the place of the leather tokens then in use. This medium of exchange became of such a nature that it was necessary that it be cared for and stored, and it naturally gravitated into the strong rooms of the goldsmiths. Although all the earliest bankers were not necessarily goldsmiths, in England this was almost entirely the case. Childs and Company and the other private bankers which disappeared in the nineties when the joint stock banks were consolidating or amalgamating or fusing were originally goldsmiths. In taking charge of the money of the merchants and in issuing receipts for it, the early bankers soon discovered that the money did not go out in the same proportions as it came in, that the receipts which they gave remained current among the merchants of England and even on the continent for several months. This was the beginning of our present day system of bank notes and cheques. The goldsmiths, scenting an opportunity of making money, began to issue receipts against gold which did not exist. As the practice of banking became more select and respectable, it was discovered that for every hundred units of coin placed in their hands, they had to reserve a percentage as till money. In the nineties that percentage ranged around 23 to 26 per cent. During the intervening years it has gradually fallen until to-day 10-6 per cent represents the amount of till money which must be retained against every S100 of coinage held by the banker. This means then that the banker has in his hands approximately $90 which he is not likely to be called on immediately to repay; and realizing that, he scents the possibility of making money. But he must be careful, because this money is a trust committed to him by the business people of the country; and so, out of trial and error, out of experiment and understanding, he has determined upon a percentage which is

loaned at call, a percentage which is loaned on short discounts, a percentage which is loaned on long discounts, and a percentage which is actually loaned out on almost permanent investment.
In the article Commercial Banks and Credit, in a book entitled What Everybody Wants to Know about Money, by G. D. H. Cole, I find, taking the London clearing banks' averages of weekly figures, the following percentages of deposits: In 1925, cash and balances with the Bank of England were 11-8 per cent; 1933, a decrease to 10-6 per cent. Money at call and on short notice, in 1925, was 7 per cent, and in 1933 it had decreased to 5 per cent. In 1925 bills discounted represented 13-6 per cent; and in 1933 it had increased to 17-8 per cent. Investments in 1925 represented 17-2 per cent; and in 1933 it had increased to 27-3 per cent. Advances- peculiar to British banking-in 1925 were 51-5 per cent, and in 1933, 39-9 per cent.
It will be seen that in the course of time, with a better understanding of business and the continued and increasing use of the cheque, the disposition of the banker has tended and now is to invest definitely and not on short call, for he realizes that he has at his disposal approximately ninety per cent of the money deposited with him. The range of $90 in each $100 is spread over these various loans, and I would point out that by careful and judicious lending, in terms from 6hort to long, the banker is able to carry the load. But if any one of his loans fails to come through on due date he must immediately hedge his bet; he must immediately attempt to cover up by calling in loans from the other terms; and it so happens that when a catastrophe overtakes the country, bankers, here, there and everywhere, are placed in the position of calling in their loans-first call money, then three months' bills, then six months' obligations, and so on. Every person who has received money from the bank is compelled to scratch in the corners to repay his debt.
I make the definite assertion, therefore, that the banks are the first institutions in our economy to encourage a depression and for the very same reason they are the last institutions in our economy to ease it and to encourage a boom. That is only natural from their very position. They find themselves unable to exceed loans beyond the amount of their actual deposits. It has been said in this house that if they receive $100 they are in a position to loan $900. Theoretically that is true, but actually and practically it is impossible because the banker must be at all

Banking-Mr. Brunelle
times ready to return, the money to the depositor and he fears that he may be caught betraying his trust.
But what do we discover in this matter of loaning out money which belongs to the people of the country? The banker has developed towards that money the attitude of regarding it as his own property and he earns interest on it in the loan, and so encourages us to apotheosize interest and usury on loans. The banker is not justified in charging interest on loans. That may sound strange, Mr. Speaker, but I say that if we are going to use the money and the credit of the country to lend out for the purpose of helping industry in certain directions, it should be done on the basis of insurance cost to make sure that that money shall be returned, and not on the basis of interest on the money loaned. We must have that money back and it must pay insurance that it shall come back. That feature can be accomplished only by a government, and I charge this government to take into consideration the fact that in developing credit for the purpose of encouraging the industries of the country it can be done in precisely that way. We should then do away altogether with the idea of banks encouraging loans to their own friends.
It is not difficult, going over the history of banking, to see how frequently this has been done or how much the wealthy patrons of a bank can obtain at reasonable rates of interest, while business men with indisputable security are finding it hard to get proper loans at decent rates. Loans should be divided into classifications, insured according to the risks in any particular classification, and that can be done only by a government. Consequently, in the consideration of this resolution, I urge that the government realize the importance of undertaking the whole system of credit and finance scientifically, studying it from the economic standpoint and instituting such changes as would make it possible for the government to own and control the chartered banks as well as the Central bank.
It is high time that the government inserted itself into the whole financial system of the country; there is ample reason for this to be done. It has been refused up to the present, but it will not be long before the government realizes that this is its only hope of salvation. Every private company and every public company, when it is incorporated, should allot to the government some proportional equivalent of its paid up and authorized capital. If I have a large tract of land and intend to dispose of it in lots or in small acreage, I cannot do so unless I
first give to the government for roads and highways some portion of my property. If a man dies and leaves an estate, part of that estate is immediately claimed by the government. If a man buys foreign goods, those goods cannot come into the country until some duty on them is paid to the government. There is no part of our public or industrial life from which the government is not taking something as its 9hare. But in the matter of finance nothing has yet been attempted, and whenever it is talked about the cry is raised, "hands off finance." But we shall have to come to it.
For these reasons, and because I feel that only in this way can we bring to the people a sense of the real responsibility which we have as people, I am prepared to vote for this resolution.


Mr. H. E. BRUNELLE (Champlain):: I have listened with great interest to the speech which has just been delivered by the mover of this resolution, the hon. member for Rosetown-Biggar (Mr. Coldwell). In one of his previous addresses he said that environment had a great deal of influence on the opinions of the people; and probably because I sit on the same side of the house as he does, although I do not share his political views, and because I hold some ideas closely related to what he has just expressed, I find myself almost in accord with what he has just stated. I was a little surprised that my hon. friends the member for Rosthern (Mr. Tucker) and 'the member for Saskatoon (Mr. Young) did not agree with the resolution, because after all it says only that the government should "consider the advisability" of national ownership.
I have great faith in the present government. I am certain that they will be ready to consider the advisability of controlling our central bank as well as the other banks. I am not in principle in favour of public ownership, and I take the accomplishments of the Canadian National Railways as a sufficient warning. But I think we need credit, and it is essential that credit restrictions should be ended. By refusing or by granting a loan a bank has almost daily the great responsibility of either keeping a man or an industry functioning or bringing bankruptcy to the door of that man or that industry. I realize that currency and credit are very important and complicated matters, but I think we all know enough to realize that easier and better credit would do a great deal to help our financial recovery. Our bank reserves are increasing; bank deposits are increasing, and I must say that at the same rate bankers' free advice to the public
Banking-Mr. Pelletier

is increasing. Good enterprises have been forced out of business for lack of credit. If bank loans were more freely given out they would help in all spheres of our life towards the financial recovery of Canada, because the amount of credit has been at all times and in every country a controlling and dominating factor. Since the banks have the privilege of creating money through the facilities that the government -has given them they should do more to help to accelerate our business and our trade. Bankers should not have so much say in the framing of our monetary law. After all the business of banking is not such a wonder, not really such a mystery; as I have heard it said, it is only a bookkeeping system whereby the privileges of the government and the deposits of the people are at the service of the bankers.
I do not believe in the slogan "share the wealth." I think it would kill initiative. Initiative is the creator of hope, of ambition and of happiness. But when we come to deal with a question as important as that of credit we ought to know who is to be the master in our country. Many of our great leaders have stated that the bankers should not have so much to say in the preparation of our monetary or fiscal laws and measures. It is the government of the country that should dictate those laws and measures in the interest of the people.
I intend to say no more than that I am in favour of the present motion, because it only asks the government to study the question whether our banks, the central bank and the chartered banks, should be owned and controlled by the government. While the government is studying these laws something should be done to lower the banks' rate of interest from seven per cent to five or possibly four per cent. I believe the banks in the meantime should discharge their enormous responsibility in a worthy manner; that they should do their share to promote our commercial recovery, and that they should set an example of true and practical patriotism by giving a freer line of credit to our traders and to the directors or heads of our commercial institutions.


Mr. R. A. PELLETIER (Peace River):: In speeches on this motion to-day there have been statements made which certainly need correction. In particular the hon. member for Rosetown-Biggar (Mr. Coldwell) stated that he was not one of those who believed that credit flowed simply from the point of a fountain pen. In order that there may not be any belief that certain people in the house have any idea of supporting such a view I

should like to place on the records of Hansard the social credit definition of what real credit is. I have as my authority The ABC of Social Credit. This is what it says with reference to that particular subject:
Real Wealth-Real Credit-Financial Credit
And yet with the facts staring us in the face, the preconceived idea that money is something tangible still persists. Some of us, like the most uncivilized savages, have made of it the fetish before which we pay our vain oblations. Money is not God, nor is it even a commodity. You cannot eat it, wear it, or live in it. Yet it remains a mental fixation with some of us that money itself is wealth. Money is not wealth. It can be considered as wealth only in so far as it can be exchanged for such goods or objects as we may desire. (A bag of gold' in the desert would little avail us.) The real wealth of any nation is its ability to -produce and deliver goods (including services) as, when, and where required. Similarly the real credit of a nation is the belief in that ability, whereas the financial credit of a nation is quite simply the estimate of that ability expressed in monetary form, or as it is called, "monetized."
That is how we define credit, so I would not want it to be said that certain people hold the view that credit merely flows from the point of a fountain pen. I was glad to hear the hon. member for Rosthem (Mr. Tucker) say that the people of Canada who supported the Liberal party in connection with that particular plank of their platform certainly expected that party to deal with the central bank just as has been suggested in this resolution; I know the people at large had that in mind. I should like to add that if the resolution also contained these words, "With the object of controlling the credit and currency policy of Canada" instead of referring to private banks, it would become a different proposition and would be exactly in line with the remarks made by the hon. member for Rosthem. If it is the intention of the government to introduce at a later date legislation which will have that end in view, I am quite prepared not to support the motion and to wait until the government carry out the promises they made to the people of Canada during the last election campaign.


Mr. DANIEL McIVOR (Fort William):: Mr. Speaker, we are continually reminded that we should talk less and say more; if we did so we would not have so many empty seats in this chamber.
I am not prepared absolutely to support this motion because it suggests that the government should take over the control of all money. If that should be done we would not keep very much money in our pockets or in our houses, and I am not prepared to go as far as that. I like to have just a little bit of money that I can call my own. If the

Banking-Mr. Leader
mover would cut the tail off this resolution I would support it because, as the hon. member for Saskatoon (Mr. Young) has said, we campaigned on the issue of a national bank, nationally owned and controlled, and as far as I am concerned I am prepared to put into effect the platform on which we went to the country.


Mr. JOSEPH NEEDHAM (The Battle-fords) :: Mr. Speaker, I should like to say
just a word or two in connection with this resolution. The hon. member (Mr. Coldwell) who moved it would give the impression that the group to which I belong are not in favour of public ownership; much stress was laid on that point. I should like to remind the house that our leader in Alberta said that if they could not get the cooperation of the banks they would establish their own state credit house, so there should be no misunderstanding in that regard.
I was wondering why we should spend our time discussing a resolution of this nature when the government are pledged to bring down legislation in regard to banking. It seems to me that it would be far better to dispose of this resolution as quickly as possible-indeed, it never should have come up -and then wait for the government to bring down the bill which we can discuss on its merits.
I was pleased to hear the hon. member for Rosthern (Mr. Tucker) say that fifty per cent of those who supported the Liberal party at the last election had done so because of the statement that the Liberal government would take over and control the Bank of Canada. I believe that if the people of this country had possessed confidence and faith in the Liberal party there would not have been any social crediters here now, or socialists either for that matter. If the Liberals had kept pace with the progressive changes that have taken place in every walk of life there would have been no third and fourth parties sitting in the house. We are here because of the protests of our constituents in regard to these matters.
It is evident that Canada cannot carry on indefinitely as it has been carrying on for the past number of years. The other day in the house a question was asked and answered as to how much interest this country has paid on its debt since confederation. The debt was given as $2,895,124,262.99; the interest paid amounts to 52,823245,404.93, so that our present debt just about equals the amount of interest that has been paid. If any hon. member cares to look up the Canada Year Book he will find that in almost every year since
confederation, when the debt stood at $75,722,624, there has been an increase in out national debt. I wonder how many of us who run businesses could carry on a business on that basis. We would soon be looking for the leakage; we would have to change our method of doing business if we went into debt more and more, year after year. So the time has come, in fact it is overdue, when this country will have to make drastic changes in its financial system, and I for one am anxiously waiting for the government to bring down the bill in connection with the control and ownership of the national bank. I think that is what we should be discussing to-day.


Mr. HARRY LEADER (Portage la Prairie):: Mr. Speaker, I have come to the conclusion that it would be well for me, as the representative of a portion of this dominion, to place myself on record as to how I stand in regard to a publicly owned and controlled bank. I can do this with the greatest of ease because I was elected to support the present government, which stands for a publicly owned and controlled bank. I do not think we need to discuss that; we may leave it safely in the hands of the present government. Faced with a resolution worded as the one before us we are placed in a rather awkward position. Why did not the hon. member who introduced the resolution limit it to our national bank? Why did he bring in the private banks? I hold no brief for the private banks; I have done business with them for many years and have always found them good people with whom to do business. I have always paid them what I owed, and for that reason I had no difficulty with them. But with respect to a Canadian bank, a national bank for Canada, I would recommend that the government or anybody interested in the institution invite private interests and private bankers of Canada to keep their fingers out of this particular pie. Let us have a real nationally owned and nationally controlled bank. That is what I believe the Liberal party stands for. Therefore I cannot support the resolution in its present form, but I stand four-square for a nationally controlled and nationally owned Canadian bank.
Hon. CHARLES A. DUNNING (Minister of Finance): Mr. Speaker, I do not intend to take up much' of the time of the house in a discussion of a resolution which, I imagine, hon. members would not expect me to view with favour. I need not discuss at length the first part of the resolution, because the speech from the throne gave ample indication of the fact that the government is and has been considering the question of ownership
Banking-Mr. Dunning

and control of the Bank of Canada. From the interest displayed by hon. members in all sections of the house in all monetary and financial matters it is quite apparent to me that no government could avoid considering the matter, even if that were its desire; and this government does not wish to avoid considering it. I am sitting at the feet of many Gamaliels with respect to matters of finance, currency and economics, and I shall give such consideration as I am capable of to the Hansard report which will contain the various ideas submitted for lifting this country out of its difficulties.


Mr. MacNICOL:: But do not adopt them.


Charles Avery Dunning: As yet I have not heard anything new. That is not a criticism of the ideas expressed, but is merely an illustration of the old saying that there is nothing new under the sun. Since means of exchange were first devised between man and man, situations have arisen which have developed the kind of suggestion we have heard to-day and on previous occasions this session. I hope the mover of the resolution (Mr. Coldwell) will not misunderstand me when I compliment him upon his manner of presentation. If I may be permitted to say so, it was a happy change from the type of argument we have heard from that corner of the house to the effect that those who agree with the speaker and with the platform of the Cooperative Commonwealth Federation are friends of humanity, and that all others are its enemies. The hon. member for Rosetown-Biggar (Mr. Coldwell) got away from that type of argument, and addressed himself to the subject matter of his resolution.
I shall not attempt to go into all the intricacies of finance, but shall content myself by saying that I do not believe it would be in the interest of the people of Canada for the state to take over and operate the chartered banks of our country. I shall state briefly my reasons for that belief.
Apart from all considerations of a financial nature in the operation of financial institutions, I believe that the institutions of parliament and government have quite enough on their hands successfully to handle that which the constitution of Canada commits to their care, without trying to run all the business of the country from this chamber. Moreover, I do not believe that the machinery which has been developed through the years to enable people intelligently and properly to govern themselves in a representative assembly of this kind is the kind of machinery most effective for conducting the ordinary operation of any kind of business. One needs only to listen

in this chamber to the multitude of counsel with respect to any matter in order to understand how impossible and impractical it is for this to be an executive body. In fact, sir, we recognize that in our very institutions; we recognize it in the principles of cabinet government and the manner in which our British system relates that government to the legislative body, in the responsibilities which it places upon one and the checks it places upon the other. We see it in the provision demonstrated here every day whereby a proposal to expend public money or to tax the people must emanate from a minister of the crown, and be preceded by a message from His Excellency the Governor General. What is that but a check? It is a deliberately devised check, and one needs only to attend the sessions of legislatures in countries which do not have that kind of check, or one similar, to realize the very grave difficulties of attempting to charge a legislative body with any degree of executive responsibility.
" Oh," but you say-and I know the mover would say, and sincerely-"it would not be our intention to have parliament run the chartered banks; there would be a board." Yes, sir; that is the condition created as a result of the state going into business. Parliament creates a board to run this, and another board to run that, and so we have a series of bureaucracies operating the business of the country. I am not one who believes that private business is perfect. Like every other human instrument it is just as perfect as the individuals composing it; even parliament suffers from that limitation. Bureaucracy is subject to just the limitations of the individuals composing it. But, sir, it is subject to something more than that. A bureaucracy operating within a democracy, a series of boards operating the 'business of the country, have a tremendous self-perpetuating power. Think it over; they have a tremendous self-perpetuating power. One only needs to read the current history of countries which have developed this bureaucratic system which is advocated in the resolution now before the house in order to make a choice between maintaining to the utmost degree the kind of freedom which we enjoy in Canada, and bureaucratic control.


Mr. HEAPS:: Has not parliament some control of the banks at the present time?


Charles Avery Dunning: Of course, but this resolution intends that the government shall operate the banks or that they shall be operated through government instrumentality. Of course it is the function, indeed, it is the duty of this parliament, properly to control all

Banking-Mr. O'Neill
business and see to it that laws are put on the statute books and administered by the courts to ensure that business, and indeed our whole population, either as individuals or in their corporate capacity, shall keep in order and treat each other fairly. It is our business to make laws to ensure fair treatment as between man and man, as between institution and institution, as between individuals and institutions. But I submit, sir, that we should be losing something which is most precious in our national life if we so far sacrificed the kind of freedom to which I have just been referring in favour of setting up bureaucracies to run our chartered banks and our other business institutions. I do not know where we would stop if once we started that, and I am quite sure that the final result would be much worse than anything through which we have passed.
I do not wish to be misunderstood or misinterpreted as I am afraid my hon. friend from North Winnipeg (Mr. Heaps) was about to misinterpret me. I do not wish to be understood as indicating that any individual or any institution in this country should be free to do as he or it likes-far from it. It is our business to regulate by statute law the relationship between man and man, between industry and industry, and individual and industry, and that in all conscience, Mr. Speaker, is a big enough task. It is for that reason that I am against this resolution or any other similar resolution proposing to take over, without regard to anything else but the establishment of a socialistic state, the operation of business within Canada. We have gone far already in this country, and we may be compelled to go further, but for my part the going further will be slow.
As I said at the outset, I am opposed to the resolution in its present form, but in so far as it relates to the Bank of Canada the government is giving consideration to that question; and it will continue to do so.
Mr. T. J. O'NEILL (Kamloops):	Mr. Speaker, it was not my intention to speak on this resolution, but before the question is put to the house I should like to make clear where I stand on monetary reform.
I am in accord with the resolution up to a certain point, and that is where it declares for the national ownership and control of the Bank of Canada, and if the resolution stopped there I would be prepared to vote in favour of it.
I am not prepared at the present time to quarrel with the mover of the resolution (Mr. Coldwell) as to whether or not it should be adopted in its entirety, nor am I in a position to quarrel with him to-day as to whether or not we should adopt a socialistic state in this country. But I do not believe it would be in the interests of this country to adopt a socialistic state at the present time, and if I had the power in my own hands to establish a socialistic state right now I would not do so.
I do submit, however, Mr. Speaker, that the issuance of currency and credit should be absolutely in the hands and in the control of parliament. I submit also that we shall never have, and never can have, any prosperity that is permanent in its nature so long as private individuals control the currency and credit of the country. You cannot have prosperity under those conditions. At the present time the taxation that is necessary to meet the interest on our bonded indebtedness and sinking fund takes almost fifty per cent of the money that we collect in taxation. How are you going to continue if you go on borrowing the money from private individuals owning and controlling the currency and credit of the country? How are you ever going to get out of debt? How are you ever going to do the things that are required by the people of this country as long as you have to pay tribute to private individuals to use something that belongs to the people? You can never have any permanent prosperity under that system.
As I said at the outset, I did not intend to speak on this resolution; I just wanted to make my position clear. Much time has been taken up discussing things that will all be the subject of discussion when the budget is brought down, and when the budget is brought down I am as firmly convinced as it is possible for any man to be that the Liberal party will bring down legislation that will bring about national ownership and control of the Bank of Canada. I firmly believe that, and I was elected because of the belief of the people of my constituency that the Liberal party had promised something of that kind. When the time comes, if the Liberal party are not prepared to bring in such legislation, then I am afraid I shall have to vote against the party, much as I should hate to do so. That is all I have to say at this time, Mr. Speaker, but when the question comes up of the national ownership and control of the Bank of Canada I shall have a good deal to say about monetary reform.

Banking-Mr. Coldwell


Major James William Coldwell: Mr. Speaker, I should like to reply very briefly to some of the points that have been raised.
First I want to thank the Minister of Finance (Mr. Dunning) and hon. members opposite for the reception which this resolution has received to-day. Whatever disposition may be made of it, it has I think served a useful purpose in arousing a discussion and a frank statement by the Minister of Finance. I quite agree with him that an institution like parliament cannot be charged with the responsibility of running a bank or any industrial or business institution. It is unfitted to cope with such a task, but may I point out that no one suggests that. Those of us who hold the view that we have consciously to plan and integrate our economic life believe that subject to the statutes and powers laid down by the representatives of the people through the institution of parliament, those who are best able to plan and control the various financial and industrial institutions should be charged with that authority and that responsibility. The late government selected as governor of the Bank of Canada a man who is competent and skilled in the banking business, an able banking official. He understood the machinery he was to operate. I think it is along these lines that society will travel.
The cry against the number of bureaucracies running the country is generally raised whenever a measure of this description is proposed. Some years ago I looked up the speeches of Cobden, Bright and John Morley, who in their day and generation served Great Britain and society well. Again and again through those speeches I found that fear in connection with the proposed control of the bitter difficulties under which the people of Great Britain were suffering at the hands of the newly created industrialists. That particular cry does not frighten me at all. One of the criticisms levelled against the present situation is that we are governed by bureaucracies unseen and independent and, as the leader of our group sometimes terms them, irresponsible. They are irresponsible in the sense that they are not responsible to anyone but their own shareholders. I believe our financial bureaucracy is the greatest of them all and one which is perhaps responsible to a larger measure than any other for the conditions facing us to-day. The minister said that we might be compelled to carry out some of these proposals in the near future. I think we shall be, but I would like to believe that the people of this nation and of the world are becoming intelligent enough to be able

to anticipate compulsion so that compulsion will not be necessary. Compulsion is always disagreeable and sometimes changes brought about by compulsion act in a manner which many of us deplore.
So many hon. members have said that if the resolution stopped with suggesting public ownership and control of the central bank they would vote for the motion, but I may say that the reference to the chartered banks was designedly included in the resolution. Even if we have a government owned institution, even though our central bank may exercise, as such institutions undoubtedly do in certain other countries, a measure of control,
I believe the actual lending and other operations of the system will remain in the hands of the chartered banks. To the chartered banks will be left the actual decision as to what loans shall be made, as to what industrial enterprise is to be supported, as to what speculative business is to be carried on. I am not denouncing the bankers, but the fact remains that they are human and are looking out for their own welfare and profit and at times the preservation of the great interests with which they are themselves connected. I paid particular attention to the last hon member who spoke (Mr. O'Neill), who said that he believed there would be no prosperity as long as private individuals controlled our currency and credit. As long as the chartered banks remain in the hands of private individuals, so long will prosperity be deferred because, as I said a few moments ago, these bankers make the actual decisions regarding loans and credit.
Motion (Mr. Coldwell) negatived on division.



RIVIERE-DU-LOUP HARBOUR PROPOSED WORKS TO FACILITATE TRANSPORT OF COAL BY WATER

[Stage Direction]
Mr. JEAN-FRANCOIS POULIOT (Temis-couata) moved:
Whereas the city of Riviere-du-Loup is the most important centre in the eastern part of the province of Quebec;
And whereas, the harbour of said city is free from ice in winter, and navigation is possible at all times of the year;
And whereas, the said city is a divisional point of the national railways and the terminus of the Temiscouata railway, which links the said city to the province of New Brunswick, and to that part of the national railways known in the past as the transcontinental;
And whereas, the national railways are still in possession of the branch line of Riviere-du-Loup station to the Rivi6re-du-Loup wharf;
And whereas, the transport by water of coal from Nova Scotia to Riviere-du-Loup would be much more economical and would permit of its

Pacific Coast Shipping-Mr. Reid
distribution at a lower cost in eastern Quebec, in the northern part of New Brunswick and the state of Maine;
Therefore be it resolved, that, in the opinion ot this house, the government should appoint experts to study the matter from every angle and report to the government as soon °as possible.
He said: Mr. Speaker, in order to be very brief, because I have learned that action is preferable to speeches, I would refer the house to Hansard of April 27, 1931. Hon. members will find there a debate on a similar motion and also a very good reason why they should adopt this one. That motion was voted down by the then Prime Minister (Mr. Bennett) and fourteen or fifteen of his ministers who voted against it. Therefore, it must be a very good measure and I recommend it highly to the house. I shall not say any more, as I am sure that the Minister of Railways and Canals (Mr. Howe), who is also Minister of Marine, will accept this resolution.
Clarence Decatur Howe: Mr. Speaker, the subject matter of this resolution is somewhat of an upset to one who thought he knew the geography of Canada very well. In view of the representations of the hon. member, I feel the department will be justified in having a report made of this matter. I shall endeavour to do this as soon as it can be done without the use of icebreakers.
Motion (Mr. Pouliot) agreed to.



PACIFIC COAST SHIPPING


Thomas Reid: Whereas, great numbers of Canadian seamen on the Pacific coast of British Columbia are out of employment and in many cases destitute;
And whereas, owners of ships and vessels of Canadian registry on the Pacific coast of British Columbia give employment in large measure to seamen, cooks and engineers of oriental origin;
And whereas, other countries give greater consideration to the employment of their own nationals on ships and vessels belonging to their own country;
And whereas, the Canadian government grant large sums of money to the owners of ships and vessels by way of subsidies;
And whereas, it is desirable that every encouragement be given for the employment of officers, seamen, cooks and engineers of white Canadian citizenship in preference to those of oriental origin on all Canadian owned and registered ships and vessels;
Therefore be it resolved, that, in the opinion of this house, the government take such steps as will provide for employment of greater numbers of white Canadian citizens on all ships
and vessels of Canadian ownership and registry, the owners of which receive sums of money from the public treasury of Canada.
He said: I did not expect this resolution to be called to-day, and so perhaps I am not as fully prepared to discuss it as I should otherwise be; but inasmuch as I have introduced it now for the third' time perhaps it will not be necessary for me to make as extended remarks as I have made on previous occasions.
The resolution is sufficiently self-explanatory, but before I get through I shall ask the courtesy of the house to allow a slight amendment, because the resolution as it stands does not go as far as it should. The resolution asks that the government shall take:
Such steps as will provide for employment of greater numbers of white Canadian citizens on all ships and vessels of Canadian ownership and registry, the owners of which receive sums-of money from the public treasury of Canada.
I am going to ask that the words "of Canadian ownership and registry" be deleted. That would mean that all steamship companies receiving subsidies from the Canadian treasury would be required to employ greater numbers of white Canadian seamen. I am going to-propose this amendment because, looking into-the matter more closely, I find that operating: in this country are large steamship companies whose vessels are registered in London, so that if I did not delete the words "of Canadian ownership and registry" the result would be that only those shipping companies whose vessels were registered in Canada would come within the terms of the resolution.
The first recital of the resolution is:
Whereas great numbers of Canadian seamen on the Pacific coast of British Columbia are out of employment ...
I do not think any hon. member will dispute that.
And whereas owners of ships and vessels of Canadian registry on the Pacific coast of British Columbia give employment in large measure to seamen, cooks and engineers of oriental origin ...
I realize that there are perhaps hon. members who do not see eye to eye with me in regard to the employment of white Canadian seamen as against orientals. I am not asking that no orientals be employed, because I know that on ships operating between China and the Pacific coast it may be necessary that some orientals be employed to take care of oriental passengers. But here we find the country paying out, as it did in 1931, some 1900,000 by way of subsidy to a steamship company which employs at least 4S0 orientals on each steamer and with only the nucleus of a white crew in charge.
564	COMMONS
Pacific Coast Shipping-Mr. Reid
I submit that it is just about time we took more serious note of the situation. I think every hon. member will agree with me that it is only fair for us to begin to look after our own people first. Practically every other nation in the world' has some stipulation with Tespect to its own nationals. It will be found that on ships subsidized by the United States the companies are called upon to have 100 per cent American crews; and the governments rijf Norway, Japan, China, Australia and other .countries insist upon the employment of their * own nationals on their own ships. These ^countries pay greater attention to that point tfibn we do.
The steamship companies in Canada declare that they cannot get along without all these orientals, but I would point out that from 1921 to 1930 no such large subsidies were given to these companies as we gave from 1930 to 1935, and they operated just the same. I am not forgetting also that we have more than
2,000	white Canadian seamen idle on the Pacific coast, and it is galling and very ill-becoming for high officials in this land to say, as some of them have done, that our own seamen are not as good as those from other countries. I take particular exception to that statement. The Prime Minister (Mr. Mackenzie King) not long ago pointed out that, at one time in this history of Canada, Canadian ships sailed the seven seas, but to-day we have practically none. Most countries today are learning that it was unwise not to pay some attention to shipping and maritime icraft. If we are to be guided by those nations that are now taking cognizance of that fact, *where shall we find the men to man ships in the future if we are to give preference to people born in countries across the Pacific?
When I introduced this resolution on a former occasion the then Minister of Trade and Commerce argued that the men employed by the Canadian Pacific Railway Company on these large ships were British subjects from Hongkong. Well, anyone who has taken a little time to look into the exact situation in Hongkong will hardly make that statement very seriously. For the information of the house I might perhaps indicate how these people are engaged.
There is on board these ships a No. 1 man, a Chinaman, who on his arrival at Hongkong picks up a crew. Hongkong is a large city and it has only a small white population. I understand that there is practically no barrier in the city between the oriental population and Europeans, and for the No. 1 man to hire men in that seaport and then have the argument advanced that because they are hired

in Hongkong they become British subjects is to carry the point altogether too far. As a matter of fact, when the vessel docks guards are put around it to see that these men do not leave the ship.
As the hon. member for Vancouver East (Mr. Maclnnis) has truly said, these men are engaged because their labour is cheap; but when the steamship company says that it cannot discontinue the hiring of orientals because otherwise the cost would be too great,
I dispute that statement. If they had 100 per cent white crews on these vessels I doubt whether they would engage 480 men plus officers, as we find on each of the two steamers plying between the Pacific coast and China.
The statement has been made that if orientals are not employed our trade with China might be impaired. But let us look at the situation in Australia. They do not allow orientals to unload a cargo there, and there is a barrier in the language test to keep out orientals; yet the trade returns as between Australia and Japan and China will show that Australia has done more trade in the past few years than we have. For the benefit of the members of the house I might point out that last year subsidies were paid as follows: British Canadian Steamships, on the China service, $118,000; on the Silver-Java-Pacific line to South Africa, $84,000. Those payments to the company were made to encourage the movement of lumber, and when I made the statement in the house that I believed money was being handed out without very much consideration the then Minister of Trade and Commerce took it upon himself to send my speech to almost every lumberman on the Pacific coast. They in turn chided me for making such remarks, but may I point out that although the Silver-Java line were receiving $84,000 yearly to encourage the lumber industry they were actually charging three dollars a thousand more for lumber than the rate at which it could have been taken by other ships, and, due to the question having been brought up in the house and the department going into the matter, that steamship company then lowered their rates three dollars a thousand.
Then take the Canadian Australasian line, $200,000. By the regulations of the department two-thirds of the crew must be British. On the China and Japan service we gave last year a grant of some $690,000, and it is remarkable that in the agreement entered into be-

___	Pacific Coast Shipping-Mr. Reid
tween that company and the trade and commerce department the clause relating to seamen, officers and crew has been entirely left out, or, shall I say, rubbed out. In most of the others, if not all, there is some clause with regard to the hiring of officers and engineers. For instance, in connection with the subsidy to the British Canadian Steamships there is a clause relating to officers and engineers. A majority of all officers and engineers of the Silver-Java line have to be British. As regards the Canadian Pacific line between China and Japan there is no such clause at all. The steamers Niagara, Makura and Marama, of the Canadian Australasian line, which receives $200,000, must carry a crew two-thirds British. Of other lines receiving subsidies, some have clauses with regard to the hiring of seamen and others have not.
I think this resolution should commend itself to every hon. member and to the country. In plain language it is just about time we began to look after our own people. The reason the word "white" is inserted is, as I explained at the outset of my speech, that when men are hired from Hongkong the statement is made that they are British subjects. Some nationals on other steamship lines belonging to other countries are called upon to produce their birth certificates. It would be interesting if some clause were put into our agreements requiring that Chinese who are engaged at Hongkong shall produce their birth certificates, that is if they have one at all.


Mr. WOODSWORTH:: May I ask the hon. gentleman whether these people from Hongkong would be Canadian citizens? They would be British subjects, but not Canadian citizens.


Thomas Reid: No. I have had that question put to me many times. The argument has been used in the house about Chinese from Hongkong being British subjects. I have seriously disputed that statement. As I pointed out, Hongkong is a large city, predominantly Chinese, with a European quarter, but how could any man say that a Chinese, simply by being hired in the European quarter, became a British subject? I believe that is pretty far-fetched, and I have disputed seriously and will continue to dispute the statement that the orientals in these ships are British subjects.


James Shaver Woodsworth: In any case they would not be Canadian citizens.


Thomas Reid: They would not be Canadian citizens. In my resolution I am asking that every preference be given to Canadian; citizens. I hope hon. members this year can lend support to the motion. I know very often there is talk of brotherhood and of not raising racial barriers; yet I think it is inherent in us that we first of all have a little charity towards our own people. They should come first, in my opinion, especially during these troublesome times when over two thousand of our own Canadian fellow citizens are walking the streets in the cities of New Westminster and Vancouver.
I do not want to labour the matter at length nor to wander in great detail into figures. This matter came before the house last year and was referred to a committee. During the time the matter was being discussed in the committee, legal representatives of the Canadian Pacific railway, I think, and other steamship companies appeared before that committee and wanted to make representations on behalf of their companies. This I objected to at that time unless representatives from the seamen's union were also allowed to come before the-committee so that it might hear the two-sides and in fuller detail. Immediately that suggestion was made the representatives of the companies withdrew their request. If the house has any doubts on this matter, or if the minister is not prepared to accept the resolution as it stands on the order paper,
I should like to see the matter again gone into before that committee, and every opportunity given to the steamship companies to lay their views before it, with the proviso, however, that the seamen be brought before the committee so that they can combat or refute statements made by the shipping companies and so that every piece of information regarding the matter shall be placed before the members.
I have not taken time to go into the total numbers engaged in all those ships, but it runs into many thousands. As I have pointed out, it is just about time that we became sea-minded. We are becoming air-minded. We have two great coasts, the Atlantic and the-Pacific, and yet we are forgetting entirely the encouragement of those men whose calling is to go down to the sea in ships. There is an inscription above the door of this building:
The wholesome sea is at her gates
Her gates both east and west
566	COMMONS
Pacific Coast Shipping-Mr. Maclnnis
It cannot be very wholesome so long as we allow companies subsidized by this country to hire hundreds of orientals in Hongkong who in large measure displace our own good Canadian seamen.


Daniel (Dan) McIvor: Not knowing this matter was coming up, I am not so well prepared, so perhaps I shall not be so brief. I will support this resolution if representatives of the seamen's union will have an opportunity of bringing other abuses before the committee. While we at the head of the lakes have not so much water, we have a number of difficulties, three of which 'I should like to have considered: First, when a young man is employed on a boat .quite often he does not get a round trip. He is a long way from home and he has Ao ride the rails back. I could speak at -length on that point, but it is not necessary. Second, the wages paid on our Canadian boats are not in keeping with the needs of -our men nor with the wages paid by other companies. Third, when our seamen have to pass examinations for promotion, we suggest that at the head of the lakes examinations be held or transportation be paid for those seeking promotion.


Mr. ANGUS MacINNIS (Vancouver East):: Mr. Speaker, in saying a few words on this resolution moved by the hon. member for New Westminster (Mr. Reid), I should like to commence by stating that I have two objections to it, though I do not wish to convey the idea that I am opposed to the sense of the resolution itself.
My first objection is that it goes too far; my second objection, which may sound rather paradoxical, is that it does not go far enough. I think it goes too far when it designates by colour the kind of Canadian citizens who are to be employed, and it does not go far enough when it does not suggest the condition under which these Canadian citizens are to work on ships in receipt of assistance from the government of Canada. I remember that when I was much younger than I am to-day I spent a few years in the United States, where I noticed that the negro was not in the same position, as far as citizenship was concerned, as were the white residents of that country. I took great pride to myself, being a Canadian and of course living within the British empire, because in Canada all citizens were treated the same regardless of race or colour. I hope
[Mr. Woodsworth.l
I was not wrong. I should like to believe
that I was right; that colour was not to be considered a factor in Canadian citizenship.
I suggest that it is not enough to state that Canadian citizens should be employed in greater numbers; I support the hon. member for New Westminster (Mr. Reid) in that view, but we should remember, when we stipulate that these employees shall be white, we exclude not only people from the orient but also the descendants of people who came to Canada to escape from slavery, who thought they would be secure here, who expected to be on a level with the rest of the community. We are excluding these as well when we use the term "white" in this resolution. We also exclude the Indians, who certainly are Canadians if anyone in this country is a Canadian.
Then in my opinion the resolution does not go far enough when it does not provide that before the government of Canada gives any assistance by way of subsidy or otherwise, it should be satisfied that wages and working conditions on the ships subsidized are satisfactory for white men. Believing this would strengthen the resolution, I am going to move an amendment which I hope my hon. friend will see his way clear to accept. The amendment, seconded by the hon. member for Winn.peg North (Mr. Heaps), reads:
That the motion be amended by striking out the word "white" in the third last line of the motion, and by adding the following words to the motion:
And be it further resolved that all subsidies or monetary assistance by the government of Canada be withheld until such time as the government is satisfied that trade union rates of wages and working conditions prevail for all ranks on such ships.
The substantial part of the motion would then read:
That, in the opinion of this house, the government taks such steps as will provide for the employment of greater numbers of Canadian citizens on all ships and vessels of Canadian ownership and registry, the owners of which receive sums of money from the public treasury of Canada;
And be it further resolved that all subsidies or monetary assistance by the government of Canada be withheld until such time as the government is satisfied' that trade union rates of wages and working conditions prevail for all ranks on such ships.


Mr. CAHAN:: Have the suggestions made by the mover (Mr. Reid) of the resolution,

Questions
as to the amendments he desired, been incorporated in the text of the original resolution?
Mr. SPEAKER; I have not as yet received from the mover the text of his amendments.


Thomas Reid: I am very sorry, Mr. Speaker; as I pointed out the resolution came up unexpectedly this afternoon and I did not have time to put into writing the changes I wish made in the motion now before the house.


[Stage Direction]
At six o'clock the house adjourned, without question put, pursuant to standing order.
Thursday, February 27, 1936